Page Page 1 of 10 DOCUMENTS: Unreported Judgments WA39 ParagraphsRe The Estate of FERRARI ex parte THE PUBLIC TRUSTEE AS PLENARY ADMINISTRATOR OF THE ESTATE OF FERRARI - BC9903119SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERSMCKECHNIE JCIV 1520 of 199919 May 1999, 19 May 1999Re Estate of Vitalina Ferrari; Ex parte the Public Trustee as Plenary Administrator of the Estate of Vitalina Ferrari [1999] WASC 50Public Trustee -- Directions to commence litigation -- Undue influence -- Unconscionable conduct -- Gift of estate after reservation of life interest -- Effect of Alzheimer's disease -- Whether justification for commencement of litigationLegislation:Public Trustee Act 1991Case(s) referred to in judgment(s):Beeck v Beeck, unreported; FCt SCt of WA; Library No 990209; 23 April 1999Blomley v Ryan (1954-56) 99 CLR 362Bridgewater v Leahy (1998) 72 ALJR 1525Commercial Bank of Australia v Amadio (1983) 151 CLR 447Inche Noriah v Shaik Allie Bin Omar (1929) AC 127.Louth v Diprose (1992) 175 CLR 621Wilton v Farnworth (1948) 76 CLR 646Case(s) also cited:NilRe s58 of the Public Trustee Act 1991; The Estate of VITALINA FERRARI, Leighton Nursing Home, 40 Florence Street, West Perth in the State of Western Australia, Widow, A represented personMcKechnie J[1] This is an application under the Public Trustee Act 1991 s58 which reads:"The Public Trustee may, ex parte, take the opinion or obtain the direction of the Supreme Court upon any question, whether of law or of fact, arising under this Act, or in the course of his duties, or with respect to the exercise of any of the powers over persons or estates conferred upon him by this Act."The section requires, furthermore:"The Judge shall give his opinion or direction to the Public Trustee, who shall thereupon act in accordance with such opinion or direction, and shall, upon the request in writing of any such interested person, communicate to him the effect of such opinion or direction."[2] The Court is given little discretion as to whether or not it may proffer the opinion sought. It is not necessary, for the resolution of this case, to determine whether there is a discretion because in any event I propose to provide to such an opinion. This is an appropriate matter for the Public Trustee to seek directions.The powers of the Public Trustee[3] The general powers of the Public Trustee are enumerated in the Public Trustee Act s49, and include the power to bring and defend actions, suits and other proceedings, s49(j), and generally to do all such acts and exercise all such powers as effectively and in the same manner as the person whom the Public Trustee represents might have done, s49(r).Orders sought by the Public Trustee[4] The Public Trustee seeks the following orders:"1. The opinion of and obtain the direction of a Judge of this Honourable Court on whether an action should be brought by the applicant against Attilio Ferrari seeking directions that the Transfer of Land 6242209 registered on Certificate of Title Volume 1147, Folio 597 on 31 July 1996 pursuant to a deed of gift dated 18 June 1996 wherein Vitalina Ferrari transferred her estate in fee simple as the sole registered proprietor to an estate for life to herself and an estate in fee simple to Attilio Ferrari upon her death, be set aside on the grounds that Vitalina Ferrari at the time she executed the Deed of Gift:(a) lacked legal capacity; and/or(b) was subject to undue influence; and/or(c) a party to unconscionable conduct.2. An order that the costs of the application be paid from the estate of Vitalina Ferrari."[5] It can be seen immediately that the orders sought are, in the words of s58, with respect to the exercise of the powers over the estates conferred upon the Public Trustee.A descent into Alzheimer's disease[6] On 9 January 1998 the Guardianship and Administration Board made the following order, appointing the Public Trustee as administrator:"Upon an application dated 19 November 1997 by the applicant in respect of the represented person and upon the Guardianship and Administration Board ("the Board") being satisfied that the represented person -(a) is unable, by reason of mental disability, to make reasonable judgments in respect of matters relating to all of her estate; and(b) is in need of an administrator of her estate;(c) and cannot have such need met by other means less restrictive of her freedom of decision and action.IT IS ORDERED THAT:1. THE PUBLIC TRUSTEE of 565 Hay Street, Perth IS APPOINTED PLENARY ADMINISTRATOR of the estate of the represented person with all the powers and duties conferred by the Act.2. This Administration Order be reviewed by 9 January 2001.3. The administrator is exempted from submitting to the Board accounts in respect of the represented person."[7] There follows then a direction to the administrator from the board:"The administrator is directed to examine any significant financial transactions and the transfer of title to the property at 31 Dangan Street, Perth to ensure that the best interests of the represented person are protected."[8] Mrs Ferrari is now aged 83, and a widow. In September 1997 she was diagnosed with Alzheimer's disease and it was that diagnosis which appears to have led to the making of the order. Dr Spear, a consultant psychiatrist for older people, says that in his experience Alzheimer's disease develops over a number of years.[9] Her general practitioner was Dr Pham. He looked after Mrs Ferrari from 5 October 1993 to 10 August 1997. She did not speak English and attended Dr Pham with her son Attilio. In Dr Pham's opinion her mental state was considered to be normal until 20 August 1997.[10] A question which arises is the extent to which the onset of Alzheimer's disease may have affected Mrs Ferrari's mental capacity prior to 1997. Dr Spear doubts her mental capacity in 1996, and says:"In my opinion Mrs Ferrari may well have been demented in 1995."A gift is made[11] In 1996 Mrs Ferrari entered into a deed of gift. In that deed she gave to her son Attilio, in consideration of her natural love and affection, her house at 31 Dangan Street, Perth, together with all household chattels. The gift was to remain expectant upon her death.[12] Attilio has apparently lived with his mother all his life until she was admitted to a nursing home in 1997. It is this gift which gives rise to the present application and was the subject of the direction of the Guardianship and Administration Board. It comprises nearly all her property except for some $9000 in a bank account. Mrs Ferrari is a pensioner.[13] Members of her family, other than Attilio, have expressed concern that Mrs Ferrari may have lacked the requisite legal capacity when she executed the deed of gift. They question whether she entered the deed because of undue influence by Attilio or unconscionable conduct by him. This is the reason why the Public Trustee seeks the direction of this CourtPrinciples for setting aside a gift inter vivos[14] In Louth v Diprose (1992) 175 CLR 621, Brennan J said at 626 and 627:"The jurisdiction of equity to set aside gifts procured by unconscionable conduct ordinarily arises from the concatenation of three factors: a relationship between the parties which, to the knowledge of the donee, places the donor at a special disadvantage vis--vis the donee; the donee's unconscientious exploitation of the donor's disadvantage; and the consequent overbearing of the will of the donor whereby the donor is unable to make a worthwhile judgment as to what is in his or her best interest. A similar jurisdiction exists to set aside gifts procured by undue influence."[15] His Honour then refers to the Commercial Bank of Australia v Amadio (1983) 151 CLR 447 and continues:"Although the two jurisdictions are distinct, they both depend upon the effect of influence (presumed or actual) improperly brought to bear by one party to a relationship on the mind of the other whereby the other disposes of his property. Gifts obtained by unconscionable conduct and gifts obtained by undue influence are set aside by equity on substantially the same basis."[16] In Blomley v Ryan (1954-56) 99 CLR 362, the High Court discussed some of the circumstances in which equity will relieve against unconscionable bargains. Fullagar J, while noting that the list is of great variety and is not easily able to be classified, nevertheless included the following at 405:"The circumstances adversely affecting a party, which may induce a Court of Equity either to refuse its aid to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other."[17] The general principles in relation to both undue influence and unconscionable conduct have been set out in a series of cases, the latest of which in the High Court is Bridgewater v Leahy (1998) 72 ALJR 1525, and in the Full Court of Western Australia in Beeck v Beeck, unreported; FCt SCt of WA; Library No 990209; 23 April 1999.The Court's approach to this application[18] This Court is not trying an action to set aside the gift. It does not have the immeasurable advantage of seeing the parties and estimating their characters and capacities, for not only does that advantage affect credibility but it also affords the best evidence of what are the essential factors in the case, viz the intelligence and other faculties of the respective parties to the transaction - per Rich J in Wilton v Farnworth (1948) 76 CLR 646 at 654.[19] However, a trial Judge in any action taken by the Public Trustee is unlikely to have that advantage. I infer from the fact of the guardianship order, and from common knowledge of Alzheimer's disease, that it is most unlikely that Mrs Ferrari could now present a coherent account of her side of the transaction.[20] In my judgment the Court in giving its opinion must adopt a commonsense approach to the prospect of litigation and the possible effect of an action on the corpus of the estate. Apart from some $9000 and some household effects of little value, the estate is in fact the life interest in the land unless the deed is set aside.[21] It will be hardly sensible to commit the resources of this estate to the vagaries of litigation without substantial prospects of success. I propose therefore to examine the evidence surrounding the deed.Mrs Ferrari's mental state at the time of the deed[22] Opinion is divided as to how far Mrs Ferrari may have been mentally incapacitated by her disease. Dr Spear is unsure as to her capacity. She may well have been demented. He did not see her until a year after the deed had been executed. In his report dated 19 November 1998 he says:"Alzheimer's Disease causes a gradual deterioration in cognitive functioning over a period of years. However, I am unable to state whether Mrs Ferrari had the legal capacity to transfer the house into her son's name on the 18th June, 1996. However, I do believe there is doubt over her ability to give testamentary capacity at that time. Because of her language difficulties I am unsure whether she would have been able to appreciate a complex legal document and therefore any testamentary capacity at that time may have been invalid unless an interpreter was with her to explain the contents of the Will.Reports from her sons differ. In a family meeting held on the 1st October, 1997, one of her sons claimed she had memory problems going back as long ago as four years earlier. Others claimed that she had been confused over the previous 18 months and one claimed she was confused over the previous three months."[23] He then proceeds to detail the fact that reports from her sons differ as to the length of memory problems. He tested her formally on 21 October 1997 and he concluded:"At that time she was disoriented for time and place and unaware of her cognitive impairment. She was quite clearly unable to describe her estate and would have been unable to understand a complex legal document. At this time I recommended an application to the Guardianship Administration Board for a Guardianship Order.In my opinion Mrs Ferrari may well have been demented in 1995."[24] Her general practitioner, Dr Pham, thought she was normal until August 1997. He thought she was quite lucid. She enunciated quite well with her son and performed Dr Pham's instructions.[25] As I have said, the balance of her family differ in their view as to how long Mrs Ferrari had memory problems.[26] I would have to conclude that in assessing whether to conduct litigation the available evidence as to Mrs Ferrari's mental state at the time of the deed does not point unerringly towards incapacity. There is a real risk that incapacity could not be proved. The evidence is equivocal.[27] This by itself is not decisive.Undue influence - the relationship[28] The relationship between Mrs Ferrari and her son Attilio was long and they lived under the same roof. From Dr Pham's letter I infer that he looked after her.[29] In view of her advancing age and her possibly declining state I have little hesitation in concluding that Attilio stood in a special relationship with his mother, or more precisely, that she may have been at a special disadvantage in the relationship.[30] It is asserted, although without any admissible proof, that Attilio had threatened his mother that if she did not transfer the home to him, he would leave her and there would be no-one to look after her, and if she left the house to the six children then they could kick him out into the street when she died. For present purposes I accept that evidence could be obtained in admissible form if there were an action.[31] I observe that the previous mutual wills made by Mr and Mrs Ferrari (as asserted by the family other than Attilio) did leave everything to their six children as tenants in common in equal shares. If that is so then a consequence may be that on her death Attilio would need to find other accommodation if he could not buy them out. As he apparently had lived with her all her life therefore, the transfer to him of the house on her death is not such bizarre behaviour by itself to ring alarm bells as to either her mental capacity or his special position of influence.Circumstances of the deed of gift[32] It appears that Attilio consulted solicitors who prepared a deed. Mrs Ferrari did a very sensible thing. She consulted her own solicitor Mr Martella. There are important matters of significance. First, Mr Martella advised her in Italian, because she was unable to read English. It can be seen in the passage which I have already quoted from Dr Spear's letter that this deals with one aspect, namely the presence of an interpreter.[33] Secondly, she did not accept the deed as proposed by her son's solicitors. After advice she required that it be altered so that she would be able to live in the house for the rest of her life. This was done. Thirdly, in the deed she acknowledged that she had obtained independent legal advice and made the gift voluntarily and without duress or coercion by her son. Finally, Mr Martella, the solicitor, witnessed her signature, certifying that she appeared to understand fully the deed's nature and effect.[34] The case has some similarities with the facts of Inche Noriah v Shaik Allie Bin Omar (1929) AC 127. That case was decided in part on a presumption of innocence which was not rebutted but it is of some assistance in that it indicates that the intervention of legal advice is not wholly determinative of a case.Conclusions[35] It is not necessary for me to make a judgment as to whether the deed is void because of a lack of mental capacity by Mrs Ferrari, undue influence and unconscionable conduct by Attilio, or both. I must decide whether there are sufficient prospects of success for the Public Trustee to embark upon potentially expensive litigation at the probable expense of the estate.[36] In my opinion the prospects of success are not so substantial as to justify the action. The relationship between the two undoubtedly gives rise to a suspicion of influence. There is, apart from the conversation attributed to Attilio about leaving, no other direct evidence of undue influence or unconscionable behaviour. Therefore inferences would have to be drawn.[37] While the circumstances give rise to a possibility of undue influence, it should be remembered that equity is concerned with undue influence in all the circumstances, not just simply influence. Mrs Ferrari's mental state at the time of the deed is problematic and the evidence is equivocal. Mrs Ferrari will almost certainly be unavailable to give evidence. This is a factor of some weight.[38] In my opinion, the interposition of a solicitor to give independent advice at the time of the deed is a substantial barrier to any successful action. The interposition of a solicitor who speaks Italian, together with the change to the deed is such that with all the other circumstances I am of opinion that, although litigation would have some prospects of success, the strength of the case is not such that justice requires an action be brought by the Public Trustee. In my opinion the Public Trustee should not commence legal action, and I make a direction accordingly.[39] Of course, this judgment does not affect the rights of others who may wish to take action.OrderDirection not to commence litigation.Counsel for the applicant: Mr D L JonesSolicitors for the applicant: Public TrusteePage Page 2 of 10 DOCUMENTS: CaseBase CasesSheahan v Cooper [1999] FCA 190; BC9900736Court: FCAJudges: Mansfield JJudgment Date: 8/3/1999Catchwords & DigestReal property -- Co-ownership -- Partition and sale of land -- Sale ordered by court under s 69 of (SA) Law of Property Act 1936Disposition of proceeds of sale.Determination of interests in property.Whether agreement intended to grant exclusive possession of property.Whether agreement resulted in licence or lease.Whether proportion of distribution of proceeds of sale to be held on constructive trust.Value of property to be determined in light of value of life interest.Application to direct sale of property and distribution of proceeds instead of division of property.Whether appropriate to make order permitting offer to purchase applicant's share only.Held: Detailed orders for sale.Agreement was for a licence, not a lease.Court unable to direct sale of applicant's share only.Cases considered by this caseAnnotations: All Cases Sort by: Judgment Date (Latest First)AnnotationCase NameCitationsCourtDateSignalAppliedTaxation, Commissioner of v Krakos Investments Pty Ltd(1995) 61 FCR 489; (1995) 133 ALR 545; (1995) 96 ATC 4063; (1995) 32 ATR 7; BC9501996FCA19/12/1995AppliedCommonwealth v Verwayen(1990) 170 CLR 394; (1990) 95 ALR 321; (1990) 64 ALJR 540; [1990] ANZ ConvR 600; (1990) Aust Torts Reports 81-036; [1990] HCA 39; BC9002931HCA5/9/1990ConsideredMartin-Smith v Woodhead[1990] WAR 62; [1989] ANZ ConvR 611WASC21/4/1989AppliedAG Securities v Vaughan[1990] 1 AC 417; [1988] 3 All ER 1058; [1988] 47 EG 193; [1988] 2 EGLR 78; [1988] 3 WLR 1205; (1988) 21 HLR 79; (1988) 57 P & CR 17UKHL10/11/1988AppliedSquire v Rogers(1979) 27 ALR 330; (1979) 39 FLR 106FCA29/8/1979FollowedRadaich v Smith(1959) 101 CLR 209; [1959] ALR 1253; (1959) 33 ALJR 214; BC5900200HCA7/9/1959AppliedHill v O'Brien(1938) 61 CLR 96; (1938) 12 ALJR 270; BC3890119HCA4/10/1938AppliedBrickwood v Young & Minister for Public Works (NSW)(1905) 2 CLR 387; (1905) 11 ALR 154; [1905] HCA 12; BC0500055HCA14/4/1905ConsideredPitt v Jones(1880) 5 App Cas 651UKHL21/6/1880Page Page 3 of 10 DOCUMENTS: Unreported Judgments Federal Court of Australia74 ParagraphsSHEAHAN, TRUSTEE OF THE BANKRUPT ESTATE OF MARSHALL AND OTHERS v COOPER and ORS - BC9900736FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRYMANSFIELD JSG 112 of 19989-12 February 1999, 8 March 1999Sheahan v Cooper [1999] FCA 190REAL PROPERTY -- orders for disposition of proceeds of sale ordered under s69 of Law of Property Act 1936 (SA) -- whether document created lease or licence -- whether exclusive possession intended by document -- value of life interest -- application to direct sale of property and distribution of proceeds instead of division of the property -- whether order should be made permitting offer to purchase applicant's share only.Law of Property Act 1936 (SA) s69, s70, s71Radaich v Smith (1959) 101 CLR 209 appliedChelsea Investments Pty Ltd v Commissioner of Taxation (1966) 115 CLR 1 consideredGoldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199 consideredLuke v Luke (1936) 36 SR (NSW) 310 consideredRees v Rees [1931] SASR 78 consideredFerguson v Miller [1978] 1 NZLR 819 consideredHedley v Roberts [1977] VR 282 consideredAG Securities v Vaughan [1990] 1 AC 417 appliedCommissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR appliedHill v O'Brien [1938] 61 CLR 96 consideredBrickwood v Young (1905) 2 CLR 387 consideredSquire v Rogers (1979) 27 ALR 330 appliedBaumgartner v Baumgartner (1987) 164 CLR 137 appliedCommonwealth v Verwayen (1990) 170 CLR 394 appliedPitt v Jones (1880) 5 App Cas 651 consideredPerman v Maloney [1939] VLR 376 consideredAnderson v Anderson [1957] VR 317 consideredSchnytzer v Wielunski [1978] VR 418 consideredMartin-Smith v Woodhead [1990] WAR 62 consideredSheahan, Trustee of the bankrupt estate of Jillian Helen Marshall and the bankrupt estates of Richard John Cooper and Simon Vincent Cooper (Applicants)Mansfield JIntroduction[1] On 1 December 1998, I published reasons for my decision that, under s69 of the Law of Property Act 1936 (SA) ("the Act"), the property known as Rothmore Farm should be sold. The question of the disposition of the proceeds of that sale remained to be determined. In addition, I stayed the operation of that order upon certain terms, to enable the fourth respondent ACC to pursue an application under s71 of the Act in respect of Rothmore Farm. This judgment addresses those two matters. I shall not repeat the findings and conclusions in those reasons. I shall also use the same terms and descriptions in those reasons, again without repeating them.[2] There are certain other matters which these reasons also address: whether an order should be made under s69 or s70 of the Act for the sale of the land in Crown Lease Register Book Volume 498 Folio 76 ("the Heritage land"); whether an order should be made under s69 or s70 of the Act, or under s71 of the Act on the application of the second respondent JEC, for the sale of the 48 Bay Road Moonta property, and whether on the application of the Trustee I should vary the order previously made to permit the separate sale of a small part of Rothmore Farm to Tiparra Sanctuary Pty Ltd ("Tiparra"), being s284 and s285 in the Hundred of Tiparra ("the sanctuary land") which is part of the land in Certificate of Title Register Book Volume 3222 Folio 200 ("the Title").[3] The Commonwealth Bank of Australia and the Commonwealth Development Bank of Australia Ltd ("the Banks") appeared. They have an interest in the second part of Rothmore Farm as registered mortgagees of the undivided moiety of Rothmore and in the first part of Rothmore Farm as registered mortgagees of the undivided moiety of JHM. They have not participated in the hearing.[4] Elsie May Cooper is also a mortgagee of the undivided moiety of Rothmore in the second part of Rothmore Farm, by mortgage granted on 30 November 1983. It is not registered. The parties accept the existence of that mortgage, and that it would take priority over any later unregistered interest granted in the relevant moiety of Rothmore Farm, but be subject to the registered interest of the Banks. Elsie May Cooper attended the hearing on 1 December 1998 by counsel, but did not participate in the subsequent hearing of this matter.[5] Initially, Mr Tennyson Turner applied orally to be joined as a respondent. I declined that application. My reasons of 1 December 1998 explain that decision. On 22 January 1999, both Mr Turner and Agri-Steel Pty Ltd ("Agri-Steel") applied to be joined as respondents. That application was granted with the consent of the parties, and without either Mr Turner or Agri-Steel filing any affidavits in support of their application.The interests in Rothmore Farm[6] On the question as to the distribution of the proceeds of sale, the Trustee seeks orders that the proceeds of the sale of the first part of Rothmore Farm, including the sanctuary land, be applied:(a) as to one half, to him as trustee of JHM to reflect the moiety in her name, and(b) as to the other half,(i) 67.56% to him as trustee of JHM to reflect her life interest in the other half(ii) 16.22% to him as trustee of RJC and SVC to reflect their quarter interests in the remainder of that other half(iii) 8.11% to ACC to reflect his quarter interest in the remainder of that other half, and(iv) 8.11% to MJC to reflect his quarter interest in the remainder of that other half,and that the proceeds of the land comprising the second part of Rothmore Farm be applied:(c) as to one half to Rothmore to reflect the moiety in its name, and(d) as to the other half, in the same manner as (b) above.[7] The interests referred to in (a) and (c) are mortgaged to the Banks, and in the case of the interest referred to in (c) it is also mortgaged to EMC. The parties acknowledge that any orders for the distribution of the proceeds of sale should recognise and give effect to those mortgages.[8] The Trustee seeks that the distribution of the proceeds of sale of the Heritage land also be effected in the same manner as in (a) and (b) above.[9] The Trustee arrives at the apportionment in respect of the moiety in Rothmore Farms subject to JHM's life interest by valuing JHM's life interest, and then by calculating that value as a percentage of the total value of Rothmore Farm. The balance then remaining is divided equally between the four remaindermen. The respondents dispute that methodology, and the figures upon which the calculations are based. As appears below, I agree generally with the submissions of the Trustee.[10] It is necessary first to consider the present claim of Mr Turner to an interest in Rothmore Farm. Contrary to his earlier position, he now claims an equitable interest in Rothmore Farm itself as lessee or in some other capacity so as to be entitled to a share in the proceeds of the sale. He was supported in that claim by ACC. The claim is a derivative one, in the sense that it is dependent upon certain earlier transactions.[11] By letter dated 15 February 1993, JHM entered into an agreement with Belgravia Pty Ltd ("Belgravia") in the following terms:"I hereby grant your company, Belgravia Pty Ltd, a licence to freely enter at all times upon all the properties where I have a life interest, or any other interest, for the purposes of cultivating crops of your discretion and performing engineering and other works which you deem suitable.This licence also allows you to erect building, sheds and other improvements to the land or the buildings standing upon the land subject to the improvements being approved by the various regulatory authorities.This licence is irrevocable and transferable.In exchange for this licence, you or the holder of this licence will maintain me for the balance of my life."[12] The letter was typed. Adjacent to the signature of JHM there was printed by hand the following:"We the Trustees of the Jill Cooper Family Trust and Directors of Rothmore Farms Pty Ltd and Rothmore Pty Ltd do hereby agree with the granting of the Licence under the terms stated by Jillian Helen Marshall."[13] The three individual signatures under that printing were of ACC, RJC and SVC. No seal of Rothmore was fixed. ACC deposes to being a director of Rothmore, but the capacity in which RJC and SVC signed the document is not explained.[14] ACC deposes to having thereafter, with Belgravia and his brothers, provided accommodation and living expenses to JHM. He and his brothers and Belgravia have cropped the land. He does not explain the relationship between Belgravia, his brothers and himself, or how income and expenses have been shared between them, or indeed how he and his brothers have been entitled to participate with Belgravia in cropping the land.[15] Belgravia, by one of its directors Noelene Michelle Cooper ("NMC"), by affidavit sworn 4 February 1999, asserts a continuing interest in Rothmore Farm. She does not refer at all to any transfer of Belgravia's interest in Rothmore Farm to ACC, or by ACC to Mr Turner.[16] However, ACC asserts that in May 1988 Belgravia transferred to him the whole of its assets. He has produced a letter apparently from Belgravia, signed by NMC, to himself dated 22 May 1998. It reads:"As we agreed when you said you would accept the vesting of the Jill Cooper Family Trust, you must understand that you yourself have to take care of your Mother, provide money for her and accommodation if it becomes necessary. It's no secret that she is not happy sharing homes with each of you boys, so you can be sure you'll have to provide a house for her some time in the future. You can take this letter as an assignment of those rights and obligations to your Mother along with the vesting of the assets of the trust.At least you'll have the use of the life interest land while she lives, so you may be able to carry the cost of looking after her that Belgravia has had."[17] On 7 August 1998, ACC asserts that he sold the whole of the assets and property acquired from Belgravia to Mr Turner. He did not initially give any details of that arrangement. It was the arrangement by reason of which, as noted in my earlier reasons, Mr Turner claimed at the earlier hearing no more than access to Rothmore Farm to farm the crops presently growing and to harvest them, and to retain the benefit of those crops.[18] Rothmore's directors at material times have been RJC, SVC, ACC and JHM. The shareholders of its ten issued shares are RJC, SVC and ACC one each and JHM seven. The sequestration orders were made on 20 April 1998, so thereafter the Trustee in effect became interested in nine of the ten shares, and only ACC remained eligible to act as a director. It is unclear whether the quorum for a directors' meeting is only one director. Rothmore does not appear to have participated in any way in the agreements of 22 May 1998 or 7 August 1998, either by signifying its assent to either arrangement or in any other way.[19] On 1 February 1999, ACC signed an agreement with Mr Turner which he was asked to sign "to clarify the agreement" of 7 August 1998. That document is more formal in appearance. It recites the interest of JHM and the agreements of 15 February 1993 and 22 May 1998, and the assignment by ACC to Mr Turner on 7 August 1998 of "the whole of the rights" assigned to ACC on 22 May 1998. It recites that Mr Turner would then perform ACC's obligations in favour of JHM. It records that the arrangement of 7 August 1998 was partly in writing. No document to that effect has been produced in evidence. It then reaffirms the agreement of 7 August 1998 recorded in the recitals.[20] In Radaich v Smith (1959) 101 CLR 209, the High Court laid down that the decisive factor in determining whether a document such as the letter of 15 February 1993 creates a lease as opposed to a licence is whether the right which the document confers creates the right of exclusive possession: per McTiernan J at 214, Taylor J at 217-218. In that case, the instrument in question was in much more formal and detailed terms than the letter of 15 February 1993. See also Chelsea Investments Pty Ltd v Commissioner of Taxation (1966) 115 CLR 1 at 7; Goldsworthy Mining Ltd v Federal Commissioner of Taxation (1973) 128 CLR 199 at 212.[21] In my judgment, the agreement between JHM and Belgravia was not intended to, and did not, grant to Belgravia the exclusive possession of Rothmore Farm. It is not expressed to relate only to the first part of Rothmore Farm but its whole including the second part in which Rothmore has an undivided moiety. In fact, as noted below, ultimately Belgravia built improvements on the second part of Rothmore Farm. Up to the time of the agreement, at least in respect of the second part of Rothmore Farm, both Rothmore and JHM were entitled to use each and every part of the land co-owned but only so long as each did not exclude the other from the land: Luke v Luke (1936) 36 SR (NSW) 310; Rees v Rees [1931] SASR 78; Ferguson v Miller [1978] 1 NZLR 819. JHM therefore had the right to lease, or licence, the use of Rothmore Farm but not to the exclusion of Rothmore, or to the extent of interfering with Rothmore's rights in relation to the land: Hedley v Roberts [1977] VR 282. I do not consider that the agreement of Rothmore to the grant of the licence by JHM constituted a grant of Rothmore's interest in the second part of Rothmore Farm to Belgravia. The endorsement is not expressed in terms appropriate to such a grant.[22] In addition, the letter expressly confines the purposes to which Rothmore Farm may be used to cultivating crops or performing engineering or other works. At the time, ACC and his family were living in a house on Rothmore Farm, presumably under some informal family arrangement with JHM and Rothmore. The letter was not intended to exclude ACC and his family from Rothmore Farm, but exclusive possession would have had that consequence. In fact, ACC and his family continued to live on Rothmore Farm. This position is not addressed in the letter at all.[23] Those two considerations point firmly, in my judgment, to the fact that JHM's letter of 15 February 1993 did not give Belgravia the right to exclusive possession of Rothmore Farm. There are other indications which also point to the same conclusion.[24] The letter is expressed in terms of granting a "licence" rather than a lease. Whilst that term is not of itself decisive, it is a significant indicator of the parties' intention: AG Securities v Vaughan [1990] 1 AC 417. As Hill J (with whom von Doussa J and O'Loughlin J agreed) said in Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495-496, where it is not suggested that the label used is not a genuine statement of the parties' intention, that label should be given its proper weight. Moreover, the mortgages to the Banks by both Rothmore and JHM of their respective undivided moieties in the second part and the first part of Rothmore Farm were granted well before the letter, but there is no recognition of the rights which those mortgages granted to the Banks, or any apparent consideration of the Banks' interests. Any intention to grant a lease would have been very likely to lead to those issues being addressed in some way in the document. In particular, no apparent consideration was given to who, as between JHM and Belgravia, or even as between Rothmore and Belgravia, would maintain interest payments under the mortgages or, if that obligation remained with JHM and Rothmore, how Belgravia's position would be protected in the event of their default. It is also significant, in my view, that the letter granting the licence does not identify any particular term. Although it might be inferred that the term of the "licence" was for JHM's life, the letter is expressed to grant the licence in respect of the properties in which JHM has "any other interest" presumably referring to her undivided moiety in the first part of Rothmore Farm. It is said to be "irrevocable". Although the consideration is the obligation to maintain JHM for the balance of her life, that does not of itself convey that the licence expired at that time. The letter also does not deal with the impact of any interest if granted upon the interest of the remaindermen, in particular MJC whose approval to the licence was not obtained. It does not deal with matters such as who should pay for rates and taxes and any other statutory outgoings. It does not provide in any detail for the nature of the obligation to maintain JHM. Its language overall lacks the formality of expression usually found in the grant of a lease or of an agreement for a lease. The fact that it was really, as EMC deposed, a restructuring of existing informal arrangements involving JHM and members of her family to provide a more formal structure to enable JHM's sons to continue to work on Rothmore Farm and to run the engineering repair and manufacturing business also in my view tends to support the conclusion to which I have come: see, for example, Hill v O'Brien [1938] 61 CLR 96. I also observe that, in respect of those parts of Rothmore Farm which comprise Crown leasehold, the lease terms prohibit alienation by the leaseholder without permission of the relevant Minister. There is no evidence that such permission was contemplated, or sought, by JHM. That was a consideration which Dixon J address in Hill v O'Brien at 110.[25] I conclude that the letter of 15 February 1993 gave Belgravia a licence to enter upon Rothmore Farm to use it for certain stipulated purposes, but did not give it the right to exclusive possession of Rothmore Farm.[26] I have not had regard to the way in which Rothmore Farm was run after 15 February 1993 in construing that letter. That conduct is however consistent with the conclusion I have reached that the letter was not intended to grant Belgravia a lease of Rothmore Farm or exclusive possession of it: AG Securities v Vaughan (above). The evidence indicates that the obligation to support JHM was undertaken by ACC and his brothers as well as Belgravia, and that they all continued to crop the land. The transfer to ACC, and then to Mr Turner, during 1998 was effected very informally. In each event, Rothmore's position was not apparently considered. It was not asked to approve those later transactions. Until the document of 1 February 1999, as his earlier attitude illustrates, Mr Turner had apparently accepted that the transfer to him was in respect of the 1998-1999 crop only, with the right to enter Rothmore Farm to manage and harvest that crop.[27] There was a separate claim for some equity in Rothmore Farm arising from Belgravia's expenditure on improvements to Rothmore Farm in or after 1993. I have referred in more detail to the evidence and my findings on that topic when considering the value of Rothmore Farm.[28] I have found that Belgravia expended $50,000 or more on a shed on the second part of Rothmore Farm. In my view, it did so pursuant to a contractual arrangement with JHM to which Rothmore assented. I also find in my reasons below that that expenditure increased the value of Rothmore Farm by $7,500. In my judgment, that expenditure created an equitable claim in favour of Belgravia as against JHM in respect of her life interest in the second part of Rothmore Farm, because I find that it was incurred on behalf of JHM under the terms of the letter of 15 February 1993: Brickwood v Young (1905) 2 CLR 387, and with Rothmore's knowledge and approval. That claim exists only to the extent to which those improvements have increased the value of Rothmore Farm, namely $7,500: Squire v Rogers (1979) 27 ALR 330. Any claim by Belgravia against JHM in respect of that sum will be a personal claim against JHM, rather than one which separately entitles Belgravia (or ACC or Mr Turner as the successors to that personal claim) to participate directly in the distribution of the proceeds of sale. For reasons which appear below, I conclude that the proportion of the distribution of proceeds of sale representing that $7,500 is held by JHM or her estate on constructive trust for Belgravia or ACC or Mr Turner: cp Baumgartner v Baumgartner (1987) 164 CLR 137.[29] I reject the submission that that expenditure by Belgravia gave rise directly to some form of equity in Rothmore Farm, so as to entitle it to participate directly in the distribution of the proceeds of sale of Rothmore Farm. The improvement became part of the land itself, and at common law the person erecting the improvement has no claim to an interest in the land by reason only of having made that improvement. In equity, however, Belgravia's position in relation to JHM and Rothmore should be recognised so that neither benefits unconscionably by reason of Belgravia's expenditure: Commonwealth v Verwayen (1990) 170 CLR 394 at 409, 434-437, 440-441. In the light of my conclusion that the letter of 15 February 1993 did not grant to Belgravia an interest in the land, and in the absence of any other evidence of communications between JHM and Belgravia before it carried out the improvements that there was any assurance by JHM or Rothmore that the expenditure by Belgravia for the improvements would lead to Belgravia somehow getting an interest in Rothmore Farm, I conclude that equity will give effect to that circumstance by the constructive trust referred to in the preceding paragraph.[30] ACC also claims to have a right to have the distribution of the proceeds of sale adjusted to reflect certain maintenance and improvements which he carried out to Rothmore Farm. He has replaced the hot water service and the water pressure pump to the house on Rothmore Farm in which he lives with his wife and two young children, and has repainted that house, installed a new soakage pit, and effected other repairs. He has provided no evidence to quantify the amount expended on that maintenance and on those improvements. Mr Clark was not asked about them. I am unable to find that they added to the value of Rothmore Farm in any measurable way. I reject that claim.[31] I accordingly find that those entitled to participate in the distribution of the proceeds of sale of Rothmore Farm should be the interests for which the Trustee contends, subject to the distribution to JHM in respect of her life interest in the second part of Rothmore Farm being subject to a constructive trust in the sum of $7,500 in favour of Belgravia or the successors to its contractual rights namely ACC and then Mr Turner.[32] It is necessary to determine the value of Rothmore Farm so as to quantify the respective interests in the moiety held by JHM for life as between herself and the four remaindermen. That value will also be significant if ACC is to be given the opportunity to purchase that portion of Rothmore Farm other than his interest and that of MJC.The value of Rothmore Farm[33] There was no dispute that I should accept as a starting point the value of Rothmore Farm in accordance with the evidence of Mr John Clark, a qualified land valuer experienced in rural valuations. That value is $1,193,373. That does not include the value of the improvements added by Belgravia.[34] On the basis of his evidence, I find that the value of the first part of Rothmore Farm is $583,545 including the sanctuary land (valued by him at about $5,525), and the value of the second part of Rothmore Farm is $609,828 plus $7,500 for improvements, namely $617,328. That additional small sum reflects the value of improvements which he did not value when first he inspected Rothmore Farm because he did not see them. On that occasion, he was shown around the property by RJC, so I do not think that initial omission from his valuation is of significance. I conclude that those improvements are on the second part of Rothmore Farm, based upon the evidence of NMC. I have not had regard to the offer of Tiparra for the sanctuary land for the purpose of determining the value of JHM's life interest.[35] During 1993, Belgravia arranged for the construction of a steel workshop and other buildings at a cost of about $50,000 (on the evidence of ACC) and at least $66,500 (on the evidence of NMC) on part of Rothmore Farm. That is the improvement which Mr Clark included in his additional allowance of $5,000-$10,000 and in respect of which I have allowed the $7,500 referred to above. Since then, Belgravia operated a business of repair and manufacture of farm machinery from those buildings, and ACC, RJC and SVC have been employed in that business as well as cropping the farm. Prior to that time, ACC, RJC and SVC had been operating that business apparently in a more desultory way in sheds already existing on the property. I infer that Mr Turner has continued to operate that business probably through Agri-Steel Pty Ltd since August 1998.[36] Notwithstanding that evidence as to the cost of those improvements, I accept Mr Clark's evidence that they added only $5,000-$10,000 to the value of the property overall. He explained that there is no direct correlation between the cost of improvements and the value they add to rural land, and that in his experience such sheds only add minimally to the value of a property such as Rothmore Farm. His evidence on this topic was not contradicted in any respect by the evidence of Mr Gerald Dee, who was called by the respondents. I make an adjustment to the value of Rothmore Farm of $7,500 for those improvements as noted above, to reflect the mid point of his range.[37] Counsel for ACC suggested that, whilst the respondents generally accepted Mr Clark's valuation, there were matters of "interpretation" which it was necessary to address. One such matter was whether he intended that the values he arrived at should be reduced by $75,000 for the expenses of surveying and water metering, to which he referred in his valuation of 11 June 1998. I understood the reference to that sum as being the additional costs to be incurred if Rothmore Farm was not to be sold as a whole, although his valuation is somewhat cryptically expressed on that issue. He confirmed in his oral evidence that the $75,000 was only an expense to be incurred if Rothmore Farm was broken up and the several titles of land it comprised were sold severally. If it were sold as a whole, and for its present cropping use, that cost would not be incurred. I do not therefore reduce its value on that score.JHM's life interest[38] The value of JHM's life interest in Rothmore Farm, and in the sanctuary land, and in the Heritage land, needs to be determined so as to make orders concerning the distribution of the proceeds of sale of those various pieces of land. The amount to be distributed to the remaindermen, namely MJC, ACC and the estates of SVC and RJC, will be determined only in the light of the amount to be distributed to the estate of JHM for her life interest.[39] JHM was born on 21 May 1938. She is now sixty. She deposes to having had three "heart attacks", the first when she was only thirty-six years of age, and that she suffers from hypertension for which she takes blood pressure lowering medication. It is submitted that she has a very high risk of further heart problems, so that her life expectancy is significantly lowered.[40] Evidence was called from Dr C Kamenjarin, her general practitioner from May 1998 until recently, and from Mr P Hetzel, a qualified and practising cardiologist since 1958. They each had access to JHM's medical notes extending back to the 1970s. Each was an impressive and careful witness. They were agreed that she suffered from long standing hypertension. The difference in opinion between them was whether JHM had suffered myocardial infarction in 1977 and myocardial ischaemia thereafter, and consequently whether her life expectancy was diminished from the normal for her age by five years or ten years.[41] She clearly suffered a transient episode of chest and left arm pain in 1977, and was hospitalised for a brief period. Thereafter, she has suffered from hypertension, largely but not entirely controlled by appropriate medication, and worsened during periods of emotional stress. During Dr Kamenjarin's treatment, apart from elevated blood pressure on occasions, JHM was asymptomatic. The 1977 incident was treated conservatively, and her then general practitioner diagnosed possible old myocardial infarction. He obtained two ECG traces which were not conclusive. Mr Hetzel said that those traces were not indicative of a (then) recent heart attack, and that any significant ongoing ischaemic heart disease would have been likely to have produced further significant episodes of heart pain. None were recorded in her medical history from 1977.[42] I prefer the evidence of Mr Hetzel that JHM's life expectancy is diminished by five years from the normal life expectancy for a person of her age. I do so because I think the assessment of her medical condition in the light of the data from 1977 is more in his area of particular expertise, and because of his long experience. I do not think Dr Kamenjarin was in a position of particular advantage in the diagnosis of the incident in 1977 or thereafter, until 1998, compared to Mr Hetzel as her findings were limited to those on clinical examinations only during 1998, and they were largely normal apart from the elevated blood pressure. She too was forming a diagnosis and prognosis on medical history, but without the specialisation and experience of Mr Hetzel. She acknowledged that her estimate of life expectancy was "speculative".[43] Mr Clark's evidence was that Rothmore Farm could be leased for an annual sum equivalent to 5% of the unimproved value of the property, to be paid half yearly in advance. Mr Dee accepted that that was a common approach among valuers. Mr Clark said that more recently, annual rental was sometimes up to 6% of unimproved land value in respect of better quality land, but he did not put Rothmore Farm into that category. I accept Mr Clark's evidence on that topic.[44] On the basis of Mr Clark's valuation, I find that the unimproved value of Rothmore Farm is $1,159,973. That figure is arrived at by deducting from the value of $1,193,373 the value of the improvements as identified by Mr Clark. I appreciate that I have included in that sum $5,525 for the sanctuary land. In my view, it is appropriate to do so as the purpose of the exercise is to determine the value of JHM's life interest in Rothmore Farm as a whole. I was not asked by any party to do otherwise, and I was not given any evidence upon which I could otherwise value JHM's life interest separately in the sanctuary land. One half of that sum is $579,986.50. The income at 5% per annum which would be earned from that land would be $28,999.33.[45] Jon Holbrook is a Fellow of the Institute of Actuaries of Australia. His unchallenged evidence is that the present value of $1 per annum paid half-yearly in advance to a female aged sixty and ceasing upon death is $13.989, based upon a female whose life expectancy is five years less than normal. On the basis of a life interest generating a gross income of $28,999.33 per annum, the present value of the life interest is therefore $405,672. No party argued that I should make an allowance for taxation.[46] As the finding I have made is that the present value of Rothmore Farm is $1,200,873 (excluding any special value for the sanctuary land), I conclude that the value of JHM's life interest in one moiety of Rothmore Farm is 67.56% of the value. If Rothmore Farm is to be sold, in my judgment the estate of JHM should receive 67.56% of the proceeds of the sale of the moiety in which she has a life interest.[47] Mr Dee was somewhat critical of the approach adopted above, although ultimately he did not provide any other valuation method for JHM's life interest. He agreed that the methodology adopted by the Trustee through the evidence of Mr Clark and Mr Holbrook was a possible method of valuing a life interest. I discerned that he had been retained to address somewhat limited questions. He explained that the sale of a life interest only is very difficult because of the speculative nature of the life expectancy, and that it is also difficult to value a life interest reliably without detailed knowledge of the health, age and insurability of the life in question. I accept that evidence. However, in the present circumstances, I am called upon to determine the appropriate distribution of the proceeds of sale of Rothmore Farm, and it is necessary therefore to place some value upon the life interest of JHM. I have had the benefit of the expert evidence of Mr Clark and Mr Holbrook, and of the expert medical evidence of Mr Hetzel and Dr Kamenjarin in relation to the very matters Mr Dee said should be considered. I have no other methodology or valuation suggested by him. As indicated earlier I found Mr Clark to be an impressive witness and I accept his views and propose to proceed on the basis of them.[48] Counsel for JHM contended that the share of the disposition of the proceeds of sale of Rothmore Farm to which the estate of JHM was entitled for her life interest should be reduced because, under the will giving her that life interest, she was obliged to pay the rates and taxes and other like outgoings on Rothmore Farm. No evidence at all was adduced on the amount of those outgoings, and neither Mr Clark nor Mr Holbrook were cross-examined to suggest that that consideration would in any way affect their conclusions, or to ascertain whether either had made any assumptions on that topic which might be incorrect. In those circumstances, I am unable to conclude that JHM's obligation to pay those outgoings would alter the evidence upon which I have relied in reaching my conclusions, or that I should alter my conclusions because of it.[49] On the basis of my findings, therefore, the life interest of JHM in Rothmore Farm is worth 67.56% of the value of one moiety in each of the first part and of the second part of Rothmore Farm. It follows that interest of each of MJC, ACC, RJC and SVC should each attract one quarter of the balance, namely 8.11%. I shall treat those proportions as applicable also to the sanctuary land if it is to be separately sold. No evidence was directed specifically to the value of JHM's life interest in the Heritage land, nor was any submission made that I should treat it differently. I propose to proceed upon the same apportionment for the distribution of the proceeds of sale in respect of the Heritage land, especially in the light of its small value.ACC's application under s71[50] S71 provides:"On any application for partition, if any party interested in the property requests the court to direct a sale of the property and a distribution of the proceeds instead of a division of the property between or among the parties interested, the court may, if it thinks fit, unless the other parties interested in the property, or some of them, undertake to purchase the share of the party requesting a sale, direct a sale of the property, and give all necessary or proper consequential directions, and in case of such undertaking being given the court may order a valuation of the share of the party requesting a sale in such manner as the court thinks fit, and may give all necessary or proper consequential directions."[51] I have determined in my earlier reasons that s69 and s70 of the Act create rights independent of s71, and that s71 does not establish any legal proviso or qualification to the operation of those two sections: Pitt v Jones (1880) 5 App Cas 651; Perman v Maloney [1939] VLR 376; Anderson v Anderson [1957] VR 317; Schnytzer v Wielunski [1978] VR 418; Martin-Smith v Woodhead [1990] WAR 62. I did however stay the operation of the sale orders then made to enable ACC to pursue the making of an order that he be permitted to purchase Rothmore Farm or part of it under s71.[52] Counsel for ACC pointed out that the rationale for the independence of the rights under s69 and s70 lies in the undesirability of the party seeking the sale being forced to sell to another part owner of the property an interest in the property at a price determined by valuation, rather than being able to put the property to an open public sale: see eg per Lord Blackburn in Pitt at 659-660. It is then put that, in the particular circumstances, there is no real issue as to the valuation of Rothmore Farm, or as to the preparedness of the Trustee to accept that valuation for the purposes of an order under s71. The Trustee has not indicated that, for the purposes of any order under s71, he is prepared to accept the valuation of Rothmore Farm by Mr Clark. In that circumstance, it is not necessary to determine whether the only foundation for the decision in Pitt v Jones is as contended, although the discussion in Martin-Smith v Woodhead at 67-69 lends strong support to that submission.[53] There is a more significant reason in my view as to why I should decline to make an order under s71 in favour of ACC. I have decided that Rothmore Farm would be most effectively sold as one unit (subject to the application to separate the sanctuary land). Any order under s71 could not result in the sale of the moiety of Rothmore in the second part of Rothmore Farm. That is because s71 contemplates, in the present circumstances, ACC undertaking to "purchase the share of the party requesting a sale", namely the Trustee in respect of the interests of JHM, RJC and SVC. I reject the contention that the power to give all necessary or proper consequential directions contained within s71 is sufficient to empower the Court under s71 to direct the sale of Rothmore's interest in the second part of Rothmore Farm. I do not think those words are intended to do other than to facilitate the sale by the party interested from the party requesting the sale. No authority to the contrary was referred to. The result of any order under s71 would therefore leave Rothmore's interest, mortgaged to the Banks and to EMC, remaining with ACC owning the balance of Rothmore Farm other than the interest of MJC. MJC through counsel was prepared to submit to that position. However, as I indicated earlier in these reasons the Trustee holds through the estates of JHM, RJC and SVC nine of the ten issued shares in Rothmore. I am not persuaded that, in the circumstances, I should make an order which would leave Rothmore in that position.The sanctuary land[54] The sanctuary land is at the south western corner of Rothmore Farm, with frontage to Spencer Gulf. It occupies about 110.5 hectares.[55] Tiparra, on 7 December 1998, offered to purchase the sanctuary land for $120,000. The offer is unconditional. It has the capacity to pay for that land, and I find that its offer is genuine.[56] That offer is very greatly in excess of the value ascribed to the sanctuary land by Mr Clark. He valued the sanctuary land as scrub and sand hills worth $50 per hectare, and so worth about $5,525. Mr Clark was cross-examined to suggest that part of the sanctuary land was put to crop, and may have been of greater value than he suggested. There is now no physical mark clearly depicting the line between s284 and s285 and the balance of the land in the Title. However, Mr Clark was clear that the land in those sections was properly described as scrub and sand hills, and that a prospective buyer would so regard it, even if it was in a particular season partly put to crop. He focussed particularly on the sandy nature of the soil. He was sure that the scrub and sand hills land was that nearest the coastline. He assessed the land in the Title, and in Certificate of Title Register Book Volume 4214 Folio 545 as containing 182 hectares of scrub and sand hills in all. As s284 and s285 comprise the land closest to the coastline, I accept his evidence that the land in those sections is properly described as scrub and sand hills. Indeed, that scrub and sand hill area must extend inland even a little further to make up his assessment of 182 hectares of scrub and sand hills. In any event, even if the sanctuary land were in part land capable of being cropped, the Tiparra offer would clearly exceed any value which might ordinarily be ascribed to it.[57] The separation of the sanctuary land from the balance of Rothmore Farm will involve some additional costs for surveying. I find on the evidence that the separate sale of the sanctuary land will not affect the amount which would be obtained for the balance of the land in the Title, or for the balance of Rothmore Farm. There was some cross-examination of Mr Clark to explore whether a part of Rothmore Farm adjoining a wildlife sanctuary (the proposed use of the sanctuary land by Tiparra) would be adversely affected by weeds and vermin, but Mr Clark did not agree with those suggestions. There was no evidence adduced to support those suggestions. As I have indicated, I generally accept Mr Clark's evidence, including on this topic.[58] It is appropriate for all those interested in Rothmore Farm that the sanctuary land be sold in a manner that achieves the best price reasonably obtainable. The sale of the sanctuary land separately to Tiparra or to someone else will achieve that end. I therefore propose to vary the orders made on 1 December 1998 to direct the separate sale of the sanctuary land for $120,000.The Heritage land[59] The Heritage land is the land in Crown Lease Register Book Volume 498 Folio 76. It is owned as to one undivided moiety by JHM, subject to mortgages to the Banks, and as to the other undivided moiety by JHM for life and then for RJC, SVC, ACC and MJC equally.[60] Ultimately it was not contended that an order should not be made for the sale of the Heritage land. It is worth $5,000. The net proceeds should be applied in the same manner as in respect of the first part of Rothmore Farm, namely 50% to the Trustee on behalf of the estate of JHM and being subject to mortgages to the Bank, 33.78% to the Trustee on behalf of the estate of JHM unencumbered, 4.055% to the Trustee on behalf of the estate of RJC, 4.055% to the Trustee on behalf of the estate of SVC, and 4.055% each to ACC and MJC.The 48 Bay Road Moonta property[61] This property is in the names of SVC and JEC. It is their family home. They have three children aged fourteen, ten and eight.[62] The property is subject to a mortgage to the State Bank of South Australia ("the State Bank"), securing an indebtedness at 5 August 1998 of $29,934.65. The State Bank is aware of the application. It has not participated in the hearing.[63] It is common ground that the property is worth $90,800.[64] JEC has applied for an order under s71 of the Act that she be permitted to purchase SVC's interest in the property. That order is not really opposed. The issue is as to the sale price at which she should be given that opportunity. If she does not obtain such an order, or does not purchase the property pursuant to such an order, an order for sale under s69 and s70 of the Act is also not then opposed by her.[65] The only real issue is as to the value of SVC's interest. The Trustee claims that it is 50% of the value. JEC contributed $8,000 of her own money to the purchase of the property, and she claims that her equity in the property should reflect that contribution so that the amount she should have to pay to acquire SVC's interest should be reduced by that amount. I do not accept that contention simply because I am not satisfied on the evidence that there was inequality in the respective contributions of JEC and SVC to the acquisition of the property or subsequently. I do not have evidence as to when that property was purchased, or the sources of funds then used in its purchase (other than JEC's assertion of having contributed $8,000 cash), or the extent to which its purchase price was financed by borrowed funds, or the extent of any improvements to that property following its purchase, or the source of any funds applied to any such improvements.[66] It is common ground that a sale to JEC of SVC's interest will save about $5,000 in selling costs.[67] In the circumstances, I propose to order and direct under s71 of the Act that JEC be permitted to purchase the interest of SVC in the 48 Bay Road Moonta property within a period of thirty-five days from the date of the order for a price of $42,900 less half the amount then due to the State Bank, but of course subject to the consent of the State Bank. That figure represents my conclusion as to the value of SVC's interest in the property, less $5,000 to reflect selling costs which would otherwise be incurred if the Trustee were selling the property on the open market. That assumes that the State Bank mortgage will remain. JEC will have to pay the costs of the transfer including any stamp duty. If the State Bank does not agree to the mortgage remaining, JEC will have to pay $42,900 plus one half of the amount owing under the mortgage, and the Trustee will have to discharge fully the State Bank mortgage at settlement. The result, on the assumption that the amount outstanding under the mortgage is $30,000, will be that in either case the Trustee will recover clear the sum of $27,900 for SVC's interest in that property. The end result will be the same, and JEC will thereby get an unencumbered title with which she may be able to finance the purchase price by borrowing from another lending institution, if necessary.[68] If JEC does not exercise the opportunity to purchase the property in accordance with the above terms, then I am of the view that a sale of the property and a distribution of the proceeds would be more beneficial for JEC and the estate of SVC than a partition of the property. Accordingly, in that event, I would direct a sale of the property under s69(2) of the Act in a manner and at a time to be determined by the Trustee, and that after discharge of the mortgage to the State Bank of South Australia, the net proceeds of sale be distributed to JEC and to the estate of SVC equally.The 77 Bay Road Moonta property[69] The Trustee has not yet pursued this remaining aspect of the application (para3 of the amended application). I propose to adjourn it to a date to be fixed with liberty to apply to restore it to the list for directions on seven days' notice.The orders[70] The Trustee has indicated that he is prepared to accept an offer by ACC to purchase all of Rothmore Farm except for the interests of ACC and MJC, upon the basis of Mr Clark's valuation, including the amount offered for the sanctuary land, provided the source of funds used by ACC for that purpose is not funds to which he claims to be entitled in separate proceedings in this Court derived from the vesting of the Jill Cooper Family Trust. Evidence shows that, at present, such funds are available to ACC. MJC is prepared to acquiesce in that order. I have not been asked by any party to make any adjustment to that amount to reflect selling costs which would not be incurred by the Trustee by such a sale.[71] Both the Trustee and ACC submit that the Court has power to make such an order under s74 of the Act, which provides:"On any sale under this Part the court may, if it thinks fit, allow any of the parties interested in the property to bid at the sale, on such terms as to non-payment of deposit, or as to setting off or accounting for the purchase-money, or any part thereof, instead of paying the same, or as to any other matters as to the court seem reasonable."[72] As there is no dispute about that matter, I am disposed to make such an order.[73] To calculate the distribution of the proceeds of sale, I have fixed the value of the first part of Rothmore Farm at $698,020 to reflect the greater value of the sanctuary land. Mr Clark's value of the first part of Rothmore Farm has been adjusted to reflect the increased value of the sanctuary land, that is by taking off the $5,525 ascribed to the sanctuary land by Mr Clark and adding the potential sale price of $120,000. The total value of Rothmore Farm including the sanctuary land is $1,315,348. That figure is arrived at by adjusting the value of $1,193,373 also to reflect the increased value of the sanctuary land, and secondly by adding $7,500 for the improvements of which Mr Clark's initial valuation did not take account. Accordingly, for the purposes of the respective half interests of JHM and Rothmore in the first and second parts of Rothmore Farm, I have applied the percentage which reflects the proportion which each part bears to the total value. Those percentages are 53.0673% for the first part of Rothmore Farm and 46.9327% for the second part of Rothmore Farm. The figure in para2 of the orders and directions below represents 91.89% of the total value, that is excluding the interests of ACC and MCJ as remaindermen in one half of Rothmore Farm. Their respective interests represent 8.11% of the total value based upon the conclusions expressed above.[74] I make the following orders and directions:1. I vary the order made on 1 December 1998 by separately ordering the sale of the sanctuary land.2. I direct that the Trustee sell or offer for sale Rothmore Farm and including the sanctuary land (but excluding the interests of ACC and MJC) to ACC upon the conditions(i) that he pay the sum of $1,208,673 subject to any normal adjustments for rates and taxes and other outgoings(ii) that he settle the sale and purchase of that land within twenty-one days of the date of this order(iii) that the Trustee is satisfied that the source of the funds to be used by ACC to purchase that land is not funds to which he otherwise claims to be entitled in Action No SG 3019 of 1998 in this Court by reason of the claim by Rothmore Farms Pty Ltd (In Liq) of which the Trustee is liquidator to the assets and funds made available to ACC by the vesting of the Jill Cooper Family Trust(iv) otherwise specified in para1-para7 of my order of 1 December 1998.3. If Rothmore Farm including the sanctuary land is sold to ACC pursuant to para2 hereof, I direct that the proceeds of that sale be distributed as follows:(i) to the Trustee for the estate of JHM in respect of her undivided moiety in the first part of Rothmore Farm including the sanctuary land (26.534% of the full value)$ 349,014(ii) to Rothmore in respect of its undivided moiety in the second part of Rothmore Farm (23.466% of the full value)$ 308,660(iii) to the Trustee for the estate of JHM in respect of her life interest in Rothmore Farm including the sanctuary land (33.78% of the full value of Rothmore Farm) but subject to the sum of $7,500 to be held on constructive trust for Belgravia or its contractual successors$ 444,325(vi) to the Trustee for the estate of RJC in respect of his remainder interest in Rothmore Farm including the sanctuary land (4.055% of the full value)$ 53,337(v) to the Trustee for the estate of SVC in respect of his remainder interest in Rothmore Farm including the sanctuary land (4.055% of the full value)$ 53,337__________$1,208,673subject to the above figures being adjusted in proportion to reflect any alteration to the purchase price by reason of the normal adjustments at settlement.4. If ACC does not settle a contract for the sale and purchase of Rothmore Farm including the sanctuary land within twenty-one days of the date of this order, I direct(i) the Trustee sell the sanctuary land to Tiparra for $120,000, to be settled at such time and in such manner as the Trustee and Tiparra may arrange, and(ii) the Trustee sell Rothmore Farm excluding the sanctuary land upon the terms ordered in para1 - para7 of my order of 1 December 1998,and to the extent necessary to give effect to (i) hereof, my order of 1 December 1998 is varied.5. I direct that the Trustee sell the Heritage land upon the same terms as ordered in respect of Rothmore Farm on 1 December 1998.6. The net proceeds of the sale of Rothmore Farm and the sanctuary land be distributed as follows:(i) to the Trustee in respect of the undivided moiety of JHM in the first part of Rothmore Farm including the sanctuary land - 26.534%(ii) to Rothmore in respect of the undivided moiety of Rothmore in the second part of Rothmore Farm - 23.466%(iii) to the Trustee in respect of the life interest of JHM in Rothmore Farm including the sanctuary land, but subject to $7,500 being held on constructive trust for Belgravia or its contractual successors - 33.78%(iv) to the Trustee in respect of the remainder interest of RJC in respect of Rothmore Farm including the sanctuary land - 4.055%(v) to the Trustee in respect of the remainder interest of SVC in respect of Rothmore Farm including the sanctuary land - 4.055%(vi) to ACC in respect of his remainder interest in Rothmore Farm including the sanctuary land - 4.055%(vii) to MJC in respect of his remainder interest in Rothmore Farm including the sanctuary land - 4.055%.7. I direct that the proceeds of the sale of the Heritage land be distributed in the same manner as directed in para6(i)-para6(vii) hereof.8. I direct that the interest of the estate of SVC in the 48 Bay Road Moonta property be offered for sale by the Trustee to JEC for $42,900 but subject to that price being adjusted so that the estate of SVC bears one half of the amount owing under the State Bank mortgage and upon the following terms:(i) the price be subject to any normal adjustments for rates and taxes and other outgoings(ii) settlement be effected by JEC within thirty-five days of the date of this orderand the proceeds of such sale be distributed to the Trustee for the estate of SVC.9. If JEC does not settle the purchase of the 48 Bay Road Moonta property in accordance with para8 hereof, I direct that the 48 Bay Road Moonta property be sold by the Trustee upon the same terms as specified in respect of the sale of Rothmore Farm in the order of 1 December 1998, and that the net proceeds of the sale be distributed(j) as to one half thereof to the Trustee as Trustee for the estate of SVC, and(ii) as to one half to JEC.10. I direct that para3.1 of the amended application be adjourned to a date to be fixed with liberty to apply to restore that part of the application to the list on seven days' notice.Order1. Para1.4 of the order made on 1 December 1998 be varied by adding at the end thereof the words "other than the land comprised in s284 and s285 in the Hundred of Tiparra, and being portion of the land comprised in that title".2. That John Sheahan as trustee of the bankrupt estate of Jillian Helen Marshall and of the bankrupt estates of Richard John Cooper and Simon Vincent Cooper ("the Trustee") sell or offer for sale to Andrew Charles Cooper the land known as Rothmore Farm and being the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order (but excluding the interests therein of Andrew Charles Cooper and Martin James Cooper) upon the conditions(i) that the Trustee sell and Andrew Charles Cooper pay for those interests in that land the sum of $1,208,673, subject to any normal adjustments for rates and taxes and other outgoings to settlement(ii) that Andrew Charles Cooper settle the sale and purchase of that land within twenty-one days of the date of this order(iii) that the Trustee is satisfied that the source of the funds to be used by Andrew Charles Cooper in the purchase of that land is not funds to which the Trustee otherwise claims to be entitled in Action No SG 3019 of 1998 in this Court by reason of the claim by Rothmore Farms Pty Ltd (In Liq) of which the Trustee is liquidator to the assets and funds made available to Andrew Charles Cooper by the vesting of the Jill Cooper Family Trustand otherwise upon the terms specified in para3, para5, para6 and para7 of the order made on 1 December 1998.3. If Andrew Charles Cooper purchases the land referred to in para2 of this order in accordance with its terms, the proceeds of that sale be distributed as follows:(i) to the Trustee for the bankrupt estate of Jillian Helen Marshall in respect of her undivided moiety in the land comprised and described in Certificates of Title Register Books Volume 4384 Folio 117, Volume 4214 Folio 545 and Volume 3322 Folio 200 and in Crown Lease Register BooksVolume 544 Folio 90, Volume 545 Folio 9 and Volume 658 Folio 95 (26.534% of the full value of the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by para1 of this order and of the land referred to in para4(i) of this order)$ 349,014(ii) to Rothmore Pty Ltd in respect of its undivided moiety in the land comprised and described in Certificate of Title Register Book Volume 3323 Folio 1 and in Crown Lease Register Book Volume 543 Folio 89 (23.466%)$ 308,660(iii) to the Trustee for the bankrupt estate of Jillian Helen Marshall in respect of her life interest in the land referred to in para1 and para2 of the order of 1 December 1998 as varied by para1 of this order and the land referred to in para4(i) of this order (33.78%) but subject to the sum of $7,500 to be held on constructive trust for Belgravia Pty Ltd or its contractual successors$ 444,325(iv) to the Trustee for the bankrupt estate of Richard John Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order of 1 December 1998 as varied by para1 of this order and the land referred to in para4(i) of this order (4.055%)$ 53,337(v) to the Trustee for the bankrupt estate of Simon Vincent Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order of 1 December 1998 as varied by para1 of this order and the land referred to in para4(i) of this order (4.055%)$ 53,337__________$1,208,673subject to the above figures being adjusted to reflect the percentages above to represent any alteration to the purchase price referred to in para2 hereof by reason of any adjustment thereto at settlement pursuant to para2(i) of this order.4. If Andrew Charles Cooper does not purchase the interests in the land referred to in para2 of this order in accordance with its terms,(i) the land comprising s284 and s285 in the Hundred of Tiparra and being part of the land comprised and described in Certificate of Title Register Book Volume 3322 Folio 200 be sold to Tiparra Pty Ltd for $120,000 at such time and in such manner as the Trustee and Tiparra Sanctuary Pty Ltd may arrange, and otherwise be sold in conjunction with the land referred to in para4(ii) of this order; and(ii) the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by para1 of this order be sold in accordance with para2 to para7 of that order.5. The land comprised and described in Crown Lease Register Book Volume 498 Folio 76 be sold in accordance with para2 to para7 of the order made on 1 December 1998.6. The net proceeds of the sale of the land referred to in para4 of this order be distributed as follows:(i) to the Trustee for the bankrupt estate of Jillian Helen Marshall in respect of her undivided moiety in the land referred to in para3(i) of this order: 26.534%(ii) to Rothmore Pty Ltd in respect of its undivided moiety in the land referred to in para3(ii) of this order: 23.466%(iii) to the Trustee for the bankrupt estate of Jillian Helen Marshall in respect of her life interest in the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order but subject to $7,500 being held on constructive trust for Belgravia Pty Ltd or its contractual successors: 33.78%(iv) to the Trustee for the bankrupt estate of Richard John Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order: 4.055%(v) to the Trustee for the bankrupt estate of Simon Vincent Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order: 4.055%(vi) to Andrew Charles Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order: 4.055%(vii) to Martin James Cooper in respect of his remainder interest in the land referred to in para1 and para2 of the order made on 1 December 1998 as varied by this order and the land referred to in para4(i) of this order: 4.055%.7. The net proceeds of the sale of the land referred to in para5 of this order be distributed in the same manner and in the same proportions as directed in para6(i) to para(vii) of this order.8. The Trustee as trustee for the bankrupt estate of Simon Vincent Cooper sell or offer for sale to Janet Ethel Cooper the interest of Simon Vincent Cooper in the land comprised and described in Certificate of Title Register Book Volume 5439 Folio 585 upon the conditions(i) that the Trustee sell and Janet Ethel Cooper pay for that interest in that land the sum of $42,900 but subject to that sum being adjusted so that the bankrupt estate of Simon Vincent Cooper bears one half of the amount owing under the mortgage to the State Bank of South Australia,(ii) that the purchase sum being adjusted at settlement to reflect any normal adjustments for rates and taxes and other like outgoings(iii) that Janet Ethel Cooper settle the sale and purchase of that interest in that land within thirty-five days of the date of this orderand the proceeds of such sale be distributed to the Trustee for the bankrupt estate of Simon Vincent Cooper.9. If Janet Ethel Cooper does not purchase the interest in the land referred to in para8 of this order in accordance with its terms, the land referred to in para8 of this order be sold by the Trustee in accordance with para2 to para7 of the order made on 1 December 1998, and the net proceeds of the sale of that land be distributed(i) as to one half thereof to the Trustee as trustee for the bankrupt estate of Simon Vincent Cooper, and(ii) as to one half thereof to Janet Ethel Cooper.10. Para3.1 of the amended application be adjourned to a date to be fixed, with liberty to apply to restore that part of the application to the list on seven days' notice.Note: Settlement and entry of orders is dealt with in O36 of the Federal Court Rules.Counsel for the applicant: Mr R Whitington QC with him Mr G DavisSolicitor for the applicant: Piper AldermanCounsel for the first to the fifth respondents: Mr D KennellySolicitor for the first to the fifth respondents: Aldermans Consultant SolicitorsNo attendance for the sixth repondentThe seventh respondent appeared in personPage Page 4 of 10 DOCUMENTS: CaseBase CasesWebster, In the Marriage of (1998) 24 Fam LR 198; (1998) FLC 92-832; [1998] FamCA 1517Court: FamCAJudges: Ellis, Finn and Gee JJJudgment Date: 24/12/1998Catchwords & DigestFamily law -- Property interests -- Inherited property -- TrustAppeal by husband against property settlement orders.Application by husband for leave to appeal against child support departure order.Whether trial judge erred in adjustment made for factors under s 75(2) of Family Law Act 1975 (Cth).Whether trial judge's determination under s 79 of Act was outside reasonable exercise of discretionWhether within full court's power to re-exercise discretion.Where wife's father set up discretionary trust and wife beneficiary of trust.Where discretionary trust purchased group of companies.Where, in accordance with father's testamentary intentions, total control of companies passed to wife.Where two further trusts established.Where wife's mother had life interest in first trust.Where second trust set up for benefit of children of marriage.Where trial judge treated second trust as resource of wife and not an asset, and included value of first trust as asset, discounted for mother's life interest.Where wife made undertaking to court to distribute second trust only to children of marriage.Where trial judge in assessing contributions by parties for purposes of s 75(2) of Act, found weight in favour of wife.Where trial judge found husband entitled to additional $500,000 due to wife's resource of second trust.Whether trial judge erred in treating second trust as resource of wife and in adopting global approach to assessment of contributions.Whether trial judge erred in assessment of husband's contributions.Held: Appeal allowed.Application for leave to appeal refused.Trial judge did not err in treating second trust as financial resource of wife, or in adopting global approach to contributions.Trial judge erred in adjustment made for factors under s 75(2) of Act, in light of disparity in property of parties, significant contribution of husband to second trust and financial resources of wife.Trial judge's s 79 orders outside reasonable exercise of discretion and not just and equitable within meaning of section.Appropriate for full court to re-exercise discretion.Adjustment of $2 million made in favour of husband for s 75(2) factors.Cases referring to this caseAnnotations: All CasesSort by: Judgment Date (Latest First)AnnotationCase NameCitationsCourtDateSignalCitedSmith v Fields[2012] FamCA 510; BC201250415FamCA6/7/2012CitedStephens v Stephens (Enforcement)(2009) 42 Fam LR 423; (2009) FLC 93-425; [2009] FamCAFC 240; BC200951218FamCA24/12/2009CitedKostres v Kostres(2009) 42 Fam LR 336; (2009) FLC 93-420; [2009] FamCAFC 222; BC200951106FamCA15/12/2009CitedKennon v Spry; Spry v Kennon(2008) 238 CLR 366; (2008) 251 ALR 257; (2008) 83 ALJR 145; (2008) 1 ASTLR 271; (2008) 40 Fam LR 1; (2008) FLC 93-388; [2008] HCA 56; BC200810608HCA3/12/2008FollowedStephens v Stephens(2007) 212 FLR 362; (2007) 38 Fam LR 149; (2007) FLC 93-336; [2007] FamCA 680FamCA13/7/2007CitedCoventry v Smith(2004) 181 FLR 220; (2004) 31 Fam LR 608; (2004) FLC 93-184; [2004] FamCA 249FamCA24/3/2004Journal articles referring to this caseArticle NameCitationsSignalWebster v Webster; Casenotes(1999) 5(3) CFL 128Cases considered by this caseAnnotations: All Cases Sort by: Judgment Date (Latest First)AnnotationCase NameCitationsCourtDateSignalConsideredDavidson, In the Marriage of (No2)(1994) 117 FLR 335; (1994) 17 Fam LR 656; (1994) FLC 92-469FamCA13/4/1994ConsideredReynolds, In Marriage of27/04/1990 FamCt UnreportedFamCA27/4/1990ConsideredAshton, In the Marriage of(1986) 11 Fam LR 457; (1986) FLC 91-777FamCA27/8/1986ConsideredNorbis v Norbis(1986) 161 CLR 513; (1986) 65 ALR 12; (1986) 60 ALJR 335; (1986) 10 Fam LR 819; (1986) FLC 91-712; [1986] HCA 17; BC8601421HCA30/4/1986ConsideredThomson Australian Holdings Pty Ltd v Trade Practices Commission(1981) 148 CLR 150; (1981) 37 ALR 66; (1981) 55 ALJR 614; (1981) ATPR 40-234; [1981] HCA 48; BC8100114HCA11/9/1981ConsideredPastrikos, In the Marriage of(1979) 6 Fam LR 497; (1980) FLC 90-897FamCA21/9/1979ConsideredM Lewis Plant Hire Pty Ltd v Thompson02/11/1976 NSWCA UnreportedNSWCA2/11/1976Legislation considered by this caseLegislation Name & JurisdictionProvisionsFamily Law Act 1975 (Cth) s 75(2), s 79(1)Family Law Rules (Cth) O 32 r 2(3)Page Page 5 of 10 DOCUMENTS: Unreported Judgments NSW47 PagesREGISTRAR-GENERAL v HARRIS and ANOR - BC9805500; [1998] 45 NSWLR 404SUPREME COURT OF NEW SOUTH WALES COURT OF APPEALMASON P, POWELL AND STEIN JJACA 40701/9715 May 1998, 22 October 1998Torrens System -- remedies for deprivation -- claim against assurance fund -- whether person liable to pay damages was "insolvent" -- relevant time for determination -- Real Property Act 1900, s126(5)Statutes -- interpretation -- extrinsic matters -- legislative history of act -- whether provision was a consolidation of its predecessor -- whether entitled to beneficial interpretation -- ordinary and natural meaning -- "insolvent" -- Real Property Act 1900, s126(5)John Ham and Raymond Ham held beneficial interests in land under the Real Property Act 1900 (the "Act") as tenants in common. These interests were held subject to a life interest which came to an end in 1988. In 1989 the land was transferred by way of sale to Mr and Mrs Camley who believed that they were dealing with both brothers. In fact, it was Raymond alone who executed various documents, forging his brother's signature.On 24 October 1991, John Ham filed a Cross Claim against the Registrar-General for damages for deprivation of his interest in the land pursuant to s126(5) of the Act. At this date, Raymond Ham had not been declared bankrupt. However, it was found that he lacked funds to meet his debts as they fell due, including his liability to damages under s126(1)(a), s126(2)(b) and s126(3). By the time of trial in 1997, John Ham had died and the proceedings were continued by his legal personal representatives, the respondents in the appeal.BC9805500 at 2Young J held that the word "insolvent" in s126(5) means unable to pay his, her or its debts as they fall due. Accordingly, his Honour held that Raymond Ham was "insolvent" at the date of commencement of proceedings and that John Ham's estate was entitled to recover damages from the Torrens Assurance Fund.HELD, dismissing the appeal:(1) A person seeking to invoke the provisions of s126(5) of the Act must establish that the relevant fact upon which he or she seeks to rely exists at the time of the commencement of the proceedings. It is irrelevant that that fact may no longer exist at the time of the hearing.Saade v Registrar-General (NSW) (1993) 179 CLR 58, followed.(2) (By Mason P, Stein JA concurring; Powell JA dissenting) In the Real Property Act 1900, s126(5), the word "insolvent" means unable to pay his, her or its debts as they fall due.Re Muggeridge's Settlement (1859) 29 LJ Ch 288; Attorney General for British Columbia v Attorney General for Canada [1937] AC 391; James v Rockwood Colliery Co (1912) 106 LT 128; London and Counties Assets Co Ltd v Brighton Grand Concert Hall and Picture Palace Ltd [1915] 2 KB 493; Corporate Affairs Commissioner of New South Wales v Yuill (199