Common Equity Problems
Frank Lever S.C, Updated 16 November 1998
Revised May 2005; Updated August 2007, Carol Webster
These notes incorporate earlier notes prepared by Garry Downes Q.C. and Bret Walker S.C.
Introduction
1. The Equity Division hears matters pursuant to:
(a)
its inherent jurisdiction and
(b)
its statutory jurisdiction.
2. The Court's Statutory Jurisdiction includes:
(a) Declaratory relief under section 75 of the Supreme Court Act and equitable damages
under section 68. (see also Part IV of the Act - Law and Equity).
(b) Real Property Act
i.
Applications under section 12A - to restrain the Registrar General from
registering a dealing.
ii.
Applications under section 15 - to produce deeds for the purposes of bringing
land under the Real Property Act.
iii.
Applications asserting or challenging indefeasibility under section 42.
iv.
Applications for orders under section 84 - vesting land under the provisions the
Real Property Act and other orders in relation to trusts.
v.
Applications under section 121 requiring the Registrar General to justify his
actions (or failure to act) in relation to certain dealings with land. (see also
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sections 122 and 123 dealing with the right of an applicant and the Registrar
General to state a case for determination by the Court).
vi.
Proceedings under section 126 for compensation by a party deprived of land or
his estate or interest in the land. These proceedings can be brought against;
•
the Registrar General, as nominal defendant, and
•
the person who has deprived the applicant of his estate or interest in the
land.
vii.
Applications under section 136 - by the Registrar General for delivery up of a
certificate of title for cancellation or correction.
viii.
Applications for the extension or removal of caveats under Part VIIA.
(c) Conveyancing Act
i.
Applications under section 36A for the division of jointly owned chattels.
ii.
Applications under section 63 for the production and delivery of documents
referred to in a schedule of documents in a deed.
iii.
Applications for orders under section 66 for the payment into Court of money
sufficient to cover an encumbrance of land (and interest) for the purpose of
allowing dealings with the land to take place.
iv.
Applications under section 66G for the appointment of trustees for sale or
partition of jointly owned property (other than chattels).
v.
Applications under section 89 - to modify or extinguish easements and restrictive
covenants relating to land.
vi.
Applications under section 98 by a mortgagor entitled to redeem the mortgage for
a determination whether amounts due under the mortgage have been paid where
the mortgagee is out of the jurisdiction, cannot be found or whose identity is
uncertain.
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vii.
Applications by lessees for relief against forfeiture under sub-section 129(2). (see
also the powers of the Court to protect under lessees against forfeiture of
superior leases under section 130).
viii.
Applications under section 55 by purchasers, to recover deposits paid under
contracts for sale.
(d) Encroachment of Buildings Act
i.
Orders for the conveyance, transfer or lease of the encroaching land under subsection 3(2)(b).
ii.
Orders for the grant of an easement of the encroachment under sub-section
3(2)(b).
iii.
Orders for the removal of the encroachment under sub-section 2(2)(c) and/or
iv.
Orders for compensation under sub-section 3(2)(a).
(e) Trustee Act
i.
Judicial advice under section 63.
ii.
The appointment, retirement or removal of trustees under section 70.
iii.
Vesting orders under section 71.
iv.
Orders authorising deviation from the terms of a trust under sections 81 to 84.
v.
Orders excusing a trustee's breach of trust under section 85.
vi.
Orders for the payment of trust money into Court under section 95.
(f) Family Provisions Act
(g) Property (Relationships) Act – formerly De Facto Relationships Act
Applications to determine the relative entitlements of de facto partners. The Court's
powers, and matters which it takes into consideration, are analogous to the Family Court
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of Australia's powers. Similar evidentiary considerations apply (compare section 79 of
the Family Law Act and sections 19, 20, 26 and 27 of the Property (Relationships) Act.)
(h) Applications under miscellaneous legislation dealing with children, including:
i.
Infants , Custody and Settlements Act
ii.
Children (Equality of Status) Act
iii.
Adoption of Children Act
(i) Miscellaneous statutory jurisdiction including applications under:
i.
The Bills of Sale Act
ii.
The Contracts Review Act
iii.
The Copyright Act
iv.
The Patents Act
v.
The Racial Discrimination Act
vi.
The Restraint of Trade Act
vii.
The Trade Marks Act
3. The Court's Inherent Jurisdiction includes:
(a) Injunctions
(b) Performance of agreements, including:
i.
specific performance
ii.
recovery of deposits
iii.
return of specific chattels
iv.
delivery up and cancellation of documents
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v.
rescission
vi.
rectification
vii.
equitable damages
viii.
foreclosure
(c) The appointment of receivers.
(d) Accounts and enquiries.
(e) Dissolution of partnerships.
(f) Administration proceedings.
(g) Will construction suits.
(h) Custody, guardianship and wardship.
(i) Applications for relief against forfeiture;
i.
of leases,
ii.
of deposits under contracts for sale.
See also sub section 129(2) of the Conveyancing Act dealing with the Court's
power to grant relief against forfeiture of leases and section 55 dealing with the
recovery of deposits under contracts for sale.
For a summary of the Equity Division's jurisdiction, the form of application and precedents
see Neville & Ashe, Equity Proceedings with Precedents (NSW). See also two books dealing
with Equity procedures before the Supreme Court Act 1970.
a.
Miller and Horsell, Equity Forms and Precedents (NSW) and
b.
Parker, Practice in Equity (NSW).
Useful textbooks dealing with matters more general include;
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a.
Mason and Handler, Wills, Probate and Administration Service (NSW)
b.
Hardingham, Neave and Ford, Wills and Intestacy in Australia.
c.
Butterworths Conveyancing Service NSW
d.
The CCH Conveyancing Service
e.
Butterworths Annotated Conveyancing and Real Property Legislation, edited by
(Justice) Peter Young.
f.
Jacobs, Law of Trusts in Australia
g.
Meagher, Gummow and Lehane, Equity Doctrines and Remedies (Fourth
Edition)
h.
Ford and Lee, Principles of the Law of Trusts
i.
Woodman, Administration of Assets
j.
Spry, The Principles of Equitable Remedies
k.
Burns, Injunctions
l.
E A Francis, Mortgages and Securities
m.
Leslie's Equity and Commercial Practice, (a four volume loose leave service
published by Law Book Company).
n.
The former Supreme Court Rules, Part 77 - Procedure Under Various Acts dealt
with important matters of procedure peculiar to various Acts, many of which are
relevant to the Equity Division.
4. General classification of remedies available in Equity.
The principal remedies offered by the Equity Division are discussed in detail in Part 5 of
Meagher, Gummow and Lehane, where they are classified as;
a.
Declarations
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b.
Specific performance
c.
Injunctions
d.
Specific restitution
e.
Damages in Equity
f.
Rescission
g.
Account
h.
Rectification
i.
Delivery up and cancellation of documents, and
j.
Receivers
5. Company applications.
Applications under the Corporations Act and associated legislation are being dealt with
separately. These applications take up a significant amount of the Equity Division's time.
6. Interlocutory applications.
Although not dealt with specifically in this paper, the Equity Division deals with a wide range
of interlocutory applications for interim relief. These include;
a.
Expedition
b.
Security for costs, under Uniform Civil Procedure Rules r 42.21 (formerly Part 53 of
the Supreme Court Rules) and section 1335 of the Corporations Law.
c.
Summary disposal
d.
Discovery, inspection, interrogatories.
e.
Particulars.
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f.
Applications to proceed by way of pleadings (where proceedings have been
commenced by summons).
g.
Amendment of summonses and statements of claim.
h.
Applications for Anton Pillar orders.
i.
Cross vesting applications.
j.
Joinder and removal of parties
k.
Applications for Mareva injunctions.
Some Preliminary Problems
1. Where to commence proceedings.
(a)
The cross vesting legislation means that it is now easier to seek equitable relief in
the Federal Court of Australia than previously. (see also the Federal Court's powers
to grant Injunctions and other equitable relief under Part VI of the Trade Practices
Act).
(b)
Equitable relief is frequently sought in the Federal Court:
i.
where other relief is claimed under Part V of the Trade Practices Act,
ii.
in matters concerning intellectual property rights.
These proceedings can also be instituted in the Equity Division.
(c)
It is, in theory, although expensive, possible to commence proceedings in the
Industrial Relations Commission under section 106 of the Industrial Relations Act
(varying etc, unfair, harsh and unconscionable work related contracts), to transfer
those proceedings into the Equity Division to be linked with related proceedings, in
another state Supreme Court or the Federal Court and then either to cross vest
those proceedings on to the other court or have that other court’s proceedings
transferred into the Equity Division. This however, requires a plaintiff to commence
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separate proceedings in at least two different Courts. It is therefore an expensive and
risky undertaking.
2. How to start.
(a)
(b)
Proceedings in the equity division can be commenced by:
(i)
summons, or
(ii)
statement of claim.
Where there is likely to be a substantial factual dispute, for example, where fraud has
been pleaded or misleading and deceptive conduct is alleged, and where no interim
relief is sought, then proceedings should be commenced by statement of claim: see
rr 6.3 and 6.4 of the Uniform Civil Procedure Rules.
(c)
Most proceedings are commenced by summons supported by affidavits setting out
the relevant objective facts. A summons is generally used where interlocutory relief is
sought.
(d)
Practice Note 63 (introduced in September 1990 and now repealed) meant that
proceedings could be commenced by summons in two ways;
(i)
Proceedings to wind up companies or urgent applications can still be
commenced by a summons with an early return date (company applications
are commenced by the filing of an originating process, equivalent to a
summons). Where this course is adopted, all of the relevant evidence should
be filed with the summons (or originating process) so that the matter can
proceed (if necessary) on the first return date. Summonses and originating
processes are returned before the Registrar in Equity who will then either
refer the matter to an Associate Judge or judge for hearing, or set a timetable
for the service of further affidavits and other interlocutory steps.
(ii)
Most summonses are now filed without a return date. A standard timetable for
affidavits and other interlocutory steps is provided for in the rules. This
method avoids regular attendance before the Registrar in Equity, provided
the timetable is complied with. In theory, the first attendance before the
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registrar should be when the matter is ready to be placed into a list for the
allocation of a hearing date.
(e)
Make sure that the Court's directions are complied with. The Court may refuse to
admit or read documents or reports filed out of time where prejudice is caused to
other parties or where the proceedings will be delayed or hearing dates vacated. It is
no longer sufficient to simply argue that an order for costs is appropriate. The
administration of justice and Court delays are now very important considerations.
(f)
Make sure each page (including annexures) of every affidavit is numbered and
identify the name and address of the person before whom the affidavit is sworn.
3. What relief to seek.
a.
b.
Prayers for relief commonly include applications for:
i.
declarations;
ii.
injunctions; and
iii.
damages.
It is, unfortunately, not unusual for practitioners to dress up a common law claim for
damages as equity proceedings by simply adding prayers for declarations that, for
example, a contract exists or that there has been a breach of the Trade Practices Act
or that the defendant has somehow acted unconscionably and/or should be
estopped from enforcing rights or relying on contractual or other common law
defences.
4. What to injunct.
a.
Although Equity does not deal with causes of action in the common law sense, it is
vital to identify the equity relied upon before commencing proceedings.
b.
Equity will not restrain a course of conduct simply because the plaintiff finds it
objectionable or unpleasant. Injunctions will only be granted in support of identifiable
equitable or legal claims.
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c.
Generally speaking, an equitable "cause of action" exists;
i.
if common law remedies are inadequate to enforce a common law cause of
action,
d.
ii.
in areas where equity traditionally grants relief,
iii.
to support a statutory right or remedy,
iv.
if the claim fits within one of the developing new equities such as;
•
estoppel in one or other of its varied guises,
•
unconscionable conduct,
•
restitution and unjust enrichment.
Always remember, injunctive relief is discretionary. Why should it be exercised in
favour of your client?
5. Whether to apply for an interim or ex parte injunction or short service
a.
Applications for urgent relief are often commenced ex parte before the duty judge.
The plaintiff can seek either;
i.
an ex parte injunction or other interim relief or, more commonly,
ii.
leave for short service of the summons resulting in the proceedings being
returned before the Court less than 5 days after issue of the summons.
b.
An ex parte injunction should only be sought in urgent circumstances. Such relief
should not be sought if the remedy can wait three or four days to have the
defendant brought before the Court.
6. Full and frank disclosure.
a.
When applying for ex parte relief it is essential that all of the relevant objective
facts be brought to the attention of the Court.
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b.
Failure to make full disclosure of all relevant facts and circumstances when
applying for interim relief provides sufficient grounds, to have that relief refused
or later discharged.
c.
It is essential that a judge being asked to make orders affecting the rights of a
party not before the Court has full knowledge of all relevant matters affecting
both the plaintiff and the defendant.
d.
Never do or say anything which may mislead the Court. It is important to
establish a relationship of trust with the judges of the equity division. It will make
your job a lot easier if the Court can rely on your assurances etc.
e.
Never use an ex parte application for the ulterior purpose of gaining a
commercial advantage without making full and frank disclosure of all of the
relevant circumstances.
7. Preparation of affidavits.
a.
Although the rules of evidence are not applied as strictly to interlocutory
applications, it is important to ensure that all affidavits are prepared with close
attention to the rules of evidence.
b.
Ideally, all affidavits should be prepared as if they are to be used at the final
hearing, complying with all of the rules of evidence. It does not help a plaintiff's
case if it has to obtain additional affidavits from the original deponents correcting
errors or omissions in earlier affidavits.
8. Arguable case and balance of convenience.
a.
Affidavits in support of applications for interlocutory relief should:
i.
contain evidence establishing a triable issue; and
ii.
show that, on the balance of convenience, an order should be made in
the plaintiff's favour.
b.
Make sure that your instructing solicitor has;
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i.
obtained the plaintiff's instructions to give an undertaking as to damages,
and
ii.
has explained the implications of the undertaking to the plaintiff.
9. In summary, before commencing any action for interim relief, ask yourself the following
questions;
a.
What is the "cause of action"?
b.
What is the threat to be restrained?
c.
What is the urgency?
d.
What is the balance of convenience?
e.
What risk does the plaintiff take in giving an undertaking as to damages?
10. Finally, when it comes to a hearing, which judicial officer has jurisdiction?
a.
the Registrar,
b.
an Associate Judge , or
c.
a Judge.
To resolve this dilemma, see Schedule D to the Supreme Court Rules and the Delegations to
Registrars under the Civil Procedure Act 2005. Whilst Associate Judges have broad powers
to hear and determine most interlocutory applications under the rules, they may not have the
corresponding inherent power. For example, an Associate Judge can hear an application for
security for costs under r 42.21 and section 1335 of the Corporations Act. He or she cannot,
however invoke the Court's inherent jurisdiction. For example, where security is sought on
the basis that the proceedings are an abuse of process.
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Section 66G of the Conveyancing Act - sale and partition of jointly owned property
1.
These are proceedings brought by co-owners of property (other than chattels) for the
appointment of trustees for the sale or partition of the co-ownership. The proceedings
are nearly always brought by co-owners of estates in fee simple in land.
2.
The only real defence to an application is to show (by a cross-claim) that the plaintiff
holds only a bare legal title and that the defendant has an absolute beneficial title. The
proceedings then become an ordinary Equity case concerning the establishment of
resulting or constructive trusts etc.
3.
The only other real dispute could concern the proportions in which the net proceeds of
sale should be divided where it is alleged that the beneficial title is held in different
proportions from that shown on the certificate of title.
4.
In reality, the proceedings are generally not resisted. They are usually brought in order
to confront a reluctant co-owner with the realities of his or her position.
5.
Because it is much cheaper for the co-owners to co-operate, a properly advised
defendant will, upon service of the summons, co-operate with the plaintiff in the sale of
the land and distribution of the proceeds. Wherever possible, parties should be advised
to agree on a regime for the marketing and sale of the jointly owned property in order to
minimise costs which will include the costs of the trustees (usually accountants) charged
with the sale of the property.
6.
Partition, rather than sale, is possible under sub-section 66G(4), although this is usually
impracticable. For this, valuation evidence is desirable, as well as evidence that the
proposed partition is practicable.
7.
The Court has power under section 66I to allow any of the co-owners to purchase the
property.
8.
The summons commencing the proceedings should be accompanied by a basic affidavit
setting out;
a.
details of title to the property,
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b.
a short description of the property,
c.
details of acquisition of the property,
d.
details of any mortgages or other encumbrances affecting the property,
e.
short details of the dispute between the co-owners, which has resulted in the
proceedings,
f.
9.
a statement why the dispute cannot be resolved.
In addition, the following formal documents should be filed with the summons:
a.
consent of the trustees to be appointed,
b.
an affidavit verifying the consent of the trustees, and
c.
an affidavit of fitness of the trustees.
Section 89 of the Conveyancing Act, restrictive covenants
1.
The usual application under this section is to extinguish or modify restrictive covenants.
Applications can also be made in relation easements, although these are less usual.
2.
Generally, contested applications are difficult to win. However, the majority of
applications go virtually uncontested and many of them are ex parte.
3.
Occasionally, the validity of the easement or restrictive covenant is itself in doubt. It is
always worth considering this question before commencing proceedings. Sub-section
89(3) provides for a substantive attack on the easement or restrictive covenant which
may be sought as alternative relief in the summons. The substantive law can be
researched in:
(a) Braderbrook and Neave, Easements and Restrictive Covenants in Australia.
(b) Preston and Newsom, Restrictive Covenants Affecting Freehold Land.
(c) The loose leaf conveyancing services.
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4.
The existence of a building scheme or, so called local law, should be investigated,
particularly in relation to restrictive covenants. This will often provide material to
challenge the validity of the covenant itself.
5.
Section 88 of the Conveyancing Act provides limitations on the enforceability of
easements and restrictive covenants on the use of land. The possibility of remedies
under this section should also be investigated prior to the commencement of
proceedings under section 89.
6.
Section 89 provides specific grounds on which easements and restrictive covenants can
be modified or extinguished. Evidence must be adduced to support one or other of these
grounds. Setting out the general effect and history of the easement or covenant is not
enough.
7.
As to the form of documents to be filed with the summons and affidavits, see the
precedents in Neville and Ashe.
8.
Photographs, properly captioned and indicating the location and direction from which
they are shot can be of assistance in making out a case under sub-section 89. For
instance, they can be used to show a change in the nature of the neighbourhood or a
diminution in the utility of the easement or restrictive covenant.
9.
On the first return date of the summons, directions are sought pursuant to sub-section
89(4). Short minutes should be prepared together with proposed advertisement or
circular notifying the application to the local council and others effected by the easement
or covenant.
10.
The existence, identity and addresses of all interested persons should be included in the
affidavit evidence. Directions cannot be made unless the Court is aware of the exact
nature of the persons or group of persons entitled to be given notice of the application.
Normally these are the people holding an interest in the land to which the benefit of the
easement or restrictive is appurtenant. This information can be obtained from:
a.
the Land Titles Office and
b.
local council records.
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11.
Subpoenas should be addressed to the Registrar General for the production of all
relevant certificates of title, transfers and deposited plans of sub-division.
12.
Strict compliance with directions made by the Court is important. It will help prevent time
wasting and the embarrassing need to repeat costly procedural steps in the litigation.
Evidence of compliance with directions, in strictly admissible form, is essential. This
evidence would include:
a.
affidavits dealing with the preparation and despatch of circulars and the
placement of advertisements,
b.
13.
tear sheets from newspapers in which the advertisements are inserted.
It is important on that, at the hearing of the application that the case is properly called
outside the Court. Any notice of intention to appear must be brought to the Court's
attention even if the would be objector, who gave the notice, does not appear in Court.
Otherwise, there is a risk that ex parte orders will be set aside because of a later
objector eventually asserting his claim.
Real Property Act, Part VIIA - Caveats
1.
Since 1 August, 1988 Part VIIA of the Real Property Act has collected and rationalised
the rules regarding caveats. This means that the chapters in Neville and Ashe dealing
with caveats are somewhat out of date.
2.
Applications for the removal of caveats make up an important part of the Court's work.
They are often dealt with by the duty judge on an urgent basis. It is therefore important
to ensure that affidavit evidence filed in support of the summons provides (in admissible
form) sufficient detail to establish the plaintiff's estate or interest in the land and/or the
defendant's lack of a caveatable interest.
3.
Part VIIA gives the Court power to deal with two types of caveat.
a.
Section 74B caveats
i.
A person claiming a legal or equitable estate or interest in land that is
subject to a primary application may, before the folio is created for that
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land, lodge a caveat prohibiting the bringing of the land under the Real
Property Act. Section 74B sets out the formal requirements for such a
caveat.
ii.
Section 74B caveats lapse after three months unless before the end of
that period, the caveator:
•
obtains an order from the Court extending the caveat and lodges the
order with the Registrar General, or
•
has commenced proceedings to establish his estate or interest in the
land and has lodged with the Registrar General a statutory declaration
giving details of those proceedings (sub-section 74C(1)).
iii.
Under subsection 74C(3), the primary applicant may also apply to the
Registrar General calling on the Registrar General to serve a notice on
the caveator, giving the caveator 21 days to commence proceedings
under sub-section 74C(1) to establish the caveators estate or interest in
the land.
iv.
If the caveator does not bring an action within 21 days, the caveat lapses
(sub-section 74C(3), (4) and (5)).
v.
The caveator can bring his or her own action under section 74D to extend
his caveat, whether or not the Registrar General has served a notice
under sub-section 74C(3).
vi.
The Registrar General has powers under section 74E to ensure that the
caveator is properly prosecuting its application to establish its estate or
interest in the land.
b.
Section 74F caveats
i.
A person claiming a legal or equitable estate or interest in land already
under the provisions of the Real Property Act may lodge a caveat
prohibiting any dealing which affects that estate or interest (sub-section
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74F(2), (3) and (4) deal with other grounds for the lodgement of similar
caveats and sub-section 74F(5) deals with caveat formalities).
ii.
The Registrar General must then give notice of the caveat to the
registered proprietor of the land.
iii.
Where a dealing is lodged for registration which is prohibited by the
caveat, the Registrar General shall, on application made by the registered
proprietor, serve a notice on the caveator:
•
notifying the caveator of the dealing,
•
advising that, unless proceedings are commenced within 21 days to
extend the caveat, it will lapse (sub-section 74I(1)).
The caveator then has 21 days in which to commence proceedings for
the extension of the caveat (sub-section 74I(2)).
iv.
The registered proprietor can also make an application to the Registrar
General under section 74J requiring the Registrar General to issue a
notice to the caveator requiring the caveator to commence proceedings
for the extension of the caveat within 21 days of service of the notice. If
proceedings are not commenced, the caveat will lapse.
v.
The caveator must then, within 21 days of the date of service of the
notice:
•
obtain an order from the Court extending the operation of the caveat,
and
•
vi.
lodge a copy of the order with the Registrar General.
The Court's power to deal with applications for the extension of caveats
under 74F is set out in section 74K. The caveator must establish to the
satisfaction of the Court that he or she has an equitable or legal estate or
interest in the land, the subject of the caveat.
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4.
An application to extend a caveat must be supported by an affidavit, setting out, in
admissible form, details of the legal or equitable estate or interest being claimed by the
caveator. For a useful summary of caveatable and non-caveatable interests see chapter
xviii of Woodman, The Law of Real Property in New South Wales, volume 1.
5.
The affidavit in support of the summons should set out at least;
a.
details of the registered proprietor;
b.
details of the estate or interest claimed by the plaintiff, including a short history of
how that claim arises and its basis;
c.
if the claim arises from a contract or other dealing with the land, then the relevant
documents should be annexed and short history provided;
d.
details of the relevant dealings with the registered proprietor in relation to the
caveat should be provided and a copy of any notice received from the Registrar
General annexed.
6.
Strict compliance with the time limits provided in Part VIIA is essential.
Trustee Act, section 63 - judicial advice to trustees
1.
Section 63 of the Trustee Act provides that a trustee may apply to the Court for "an
opinion, advice or direction on any question, respecting the management or the
administration of the trust property or respecting the interpretation of the trust
instrument".
2.
Proceeding are commenced by summons with a statement of facts. It is not always
necessary to join a defendant.
3.
There is an important distinction between a summons for judicial advice and a summons
for construction (usually of a will but sometimes of a trust and its execution). The Court
exercises its inherent jurisdiction in construction suits.
4.
Construction suits may be commenced by the trustee or by a beneficiary or creditor. If
other parties are affected, they should be joined as defendants.
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5.
Applications for judicial advice are not primarily concerned with the construction of
documents particularly where the respective rights of beneficiaries, creditors, legatee or
next of kin are concerned. The aim of section 63 is to enable trustees to be advised of
the nature or extent of their powers and duties of management or administration of the
trust property. The section does not provide a means of establishing the identity of
beneficiaries etc.
6.
Where a question of construction arises, even in proceedings for judicial advice, it is
appropriate to join defendants and to proceed by affidavit rather than statement of facts.
7.
Supreme Court Rules, Part 70 contains the Trustee Act rules. Part 70, rule 3 deals with
the statement of facts required by sub-section 63(3) of the Trustee Act. The statement
should contain;
a.
a statement of the question for opinion, advice or direction, and
b.
all of the relevant contentions and facts necessary to obtain that opinion, advice
or direction.
8.
A representative order (Uniform Civil Procedure Rules r 7.4, formerly Part 8, rule 13 of
the Supreme Court Rules) may be necessary in order to bind the beneficiaries in the
event of a later dispute.
9.
The advice given by the Court is usually conservative. The order usually take the form of
"the trustee would be justified" in taking a certain course of action or carrying out his or
her powers or discretions.
10.
The Court has power under sub-section 63(4) to direct that certain interests be
represented at the hearing and that the application proceed with affidavit evidence.
Trustee Act, section 71 - vesting orders
1.
A vesting order passes property as if a conveyance had been made passing whatever
estate or interest in the property the Court directs. A vesting order takes the place of an
actual conveyance which would have been executed if the transaction could have been
completed without the necessity of seeking an order of the Court.
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2.
The circumstances in which the Court will make a vesting order are set out in subsection 71(2) of the Trustee Act. These include;
a.
the appointment of new trustees,
b.
where a trustee is outside the jurisdiction of the Court of cannot be found,
c.
where a corporate trustee is dissolved,
d.
where a trustee neglects or refuses to act,
e.
where there is uncertainty about the identity of a trustee or whether the trustee is
living or dead,
3.
f.
where a trustee has neglected his or her duties,
g.
where it appears expedient to the Court to make a vesting order.
Section 78 of the Trustee Act sets out the affect of vesting orders once made by the
Court. That section also deals with the effect of similar orders made under the Real
Property Act and the Conveyancing Act.
4.
Other circumstances in which the Court will make vesting orders are set out in other
sections of the Trustee Act including;
a.
section 72 where the rights of unborn persons are involved;
b.
section 74 where a mortgagee is a minor or insane;
c.
section 75 which deals with a deceased mortgagee; and
d.
section 77 which deals with the specific performance of contracts and other
matters in relation to land.
5.
If the procedure is used in relation to an uncompleted contract for sale of land, it is
necessary to pay close attention to the considerations discussed in Chang v Registrar of
Titles (1976) 137 CLR 177.
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Trustee Act - section 81 - advantageous dealings
1.
Sub-section 81(1) gives the Court jurisdiction to confer on trustees, power to deal with
property (by way of sale, lease, mortgage, purchase, investment etc) where otherwise
the trustee would not have the power to do so. The Court also has jurisdiction under
sub-section 81(2) to empower a trustee to act, or to excuse itself from acting, where it
would otherwise be in breach of trust.
2.
The Court may confer power of a trustee where, in its opinion, it is expedient to do so. It
may impose specific terms and conditions.
3.
The Court's authorisation is usually given in respect of a defined course of conduct,
rather than a general authority. For example, the Court may authorise a sale of trust
property where a generous offer for the property has been received which will confer an
advantage on the beneficiaries (see generally Jacobs Law of Trusts).
4.
The proceedings are commenced by summons, supported by affidavits which should
include all relevant information necessary for the Court to decide whether it should
permit the trustee to deviate from the trust instrument. Such affidavits should include;
a.
evidence from the executor setting out his or her reasons why the property
should be sold (or whatever other dealing should be approved), and
b.
a valuation from a licensed valuer, or alternatively, a conditional contract for sale,
supported by an affidavit of a real estate agent (if any) and a valuer that the price
proposed is proper.
5.
In general, the evidence should be directed to demonstrating the expediency relied upon.
Before the Court can decide whether a dealing is expedient, it should have before it, all
relevant information including any evidence which may point to the dealing not being
expedient.
6.
Notice of the application should be given to all beneficiaries. The joinder of a
representative beneficiary should be considered in the event of any possible
disagreement about the proposed dealing. Applications are usually unopposed and often
relate to estates in which there are infant or undetermined beneficiaries.
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7.
The Court has specific powers when dealing with trusts affecting minors. For example;
a.
the Court has power under section 82 to authorise improvements or repairs to
trust property held for a minor (or remainderman);
b.
under section 83, the Court can authorise a trustee to spend capital to purchase
a house for a minor;
c.
under section 84, the Court can authorise the sale of property held in trust for a
minor.
Partnership suits
1.
The most common applications are for;
a.
the appointment of a receiver to the partnership;
b.
an application for accounts to be taken to determine the respective shares of the
former partners and/or;
c.
2.
the dissolution or winding up of the partnership.
An order for the taking of accounts can be made before or after the partnership has been
dissolved. Useful precedents can be found in;
3.
a.
Ritchies Supreme Court Practice, and
b.
Neville and Ashe.
Proceedings are usually commenced by summons. Where the assets of the partnership
are under threat, an interlocutory application can be made for;
4.
a.
the appointment of a receiver to the partnership's assets, or
b.
an injunction to restrain unlawful conduct by one or other of the partners.
When application is made for the appointment of a receiver to the assets of the
partnership, the following affidavits and documents should be filed in support of the
summons;
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a.
consent of the receiver and an affidavit verifying the consent,
b.
an affidavit of fitness of the receiver, and
c.
an affidavit setting out all of the relevant facts, matters and circumstances,
showing why a receiver should be appointed.
5.
The taking of accounts is conducted before an Associate Judge. The Associate Judge is
not, without reference from the Court, able to settle disputes about the terms of the
partnership itself. Such disputes should be canvassed as early as possible and should
be resolved before a judge, prior to the taking of accounts.
6.
Partnerships disputes and the taking of accounts are invariably tedious, time consuming
and expensive. They are rarely cost effective for anyone other than the lawyers. Strong
advice should be given prior to the commencement of partnership suits that they should
be avoided at all costs. Where (as is often the case) matters of principle with little or no
financial benefit, are involved, then consideration should be given to having the dispute
referred to arbitration or mediation.
Construction summonses
1.
These proceedings usually concern the construction of the provisions of a will. They
should not be confused with probate proceedings.
a.
If the only matter for determination is what the will means, then it is first
necessary to have the will be admitted to probate,
b.
After probate has been granted, a challenge can be mounted to the executors
interpretation. This is done by way of a construction summonses.
2.
Often the plaintiff is the executor faced with doubt or controversy concerning the
construction of the will.
3.
Proceedings are commenced by summons. The summons usually sets out the rival
contentions. Parties should be appointed to represent each of the possible constructions.
The executor often presents peripheral variations of the competing interpretations.
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4.
The original will should be available to the judge hearing the construction suit. Where the
original is difficult to read for any reason, agreement should be reached between the
parties for the tender of a clear transcription of the relevant provisions.
5.
Depending upon the applicable principles, it may be necessary to adduce extrinsic
evidence to supplement the terms of the instrument itself.
6.
Affidavits should be filed setting out all evidence concerning the identity of interested
parties. This is important so that the appropriate representative orders can be made.
7.
It may be necessary to join the Attorney General or, at least, give him notice of the
proceedings. This is particularly so in the case of an intestacy without next of kin or
charities.
8.
Where the relevant events span a long period of time, or where there are several interrelated events which are important, a chronology should be prepared for the Court. The
chronology would, of course, include dates of wills, deaths, marriages, departures from
home, childbirth and other relevant matters. It is important that some agreement be
reached between the parties on the chronology which will help simplify and shorten the
proceedings.
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