Blythe v Blythe

By a summons filed on 15 August 2018 the plaintiff claims the following relief:

The plaintiff was represented by Mr Murr SC with Ms Fraser of Counsel. The defendant was represented by Mr Busby, Solicitor, as town agent for the defendant’s solicitors.

For the reasons which follow — essentially, that the defendant has failed to demonstrate that there is a serious question to be tried that he has a caveatable interest — the Court has concluded that the plaintiff is entitled to an order that the defendant withdraw the caveat which is the subject of these proceedings and that the defendant should pay the plaintiff's costs of the proceedings.

Without disrespect, I shall refer to the various family members involved in this dispute by their given names. The plaintiff (“Jill”) is the mother of the defendant (“David”), Michelle and Christopher. Christopher played no part in these proceedings.

The proceedings concern what was the family home which, according to the evidence, is a substantial property on the waterfront at Yowie Bay (the “Property”).

The background facts were not in dispute.

The Blythe family commenced living at the Property in 1967.

The Property was originally owned by the family company, Stuart Property Investments Pty Limited (“SPI”). The shares in that company were held by Jill’s late husband, Harold (as to 270 shares), and Jill (as to 30 shares).

Harold died on 16 September 2005. He left his entire estate to Jill. Probate was granted on 8 February 2006.

Harold's shares in SPI passed to Jill.

By transfer made on 18 December 2007, SPI transferred the Property to Jill.

Jill's attempts to sell the Property since 2016 have been the subject of considerable disputation, including earlier proceedings in this Court heard by Emmett AJA: Blythe v Willis [2018] NSWSC 131.

Most recently, a contract for sale of the Property was entered into on 28 June 2018. The completion date for that contract is 30 August 2018. It is for that reason that the Court has determined the summons urgently in the course of the Duty List.

On 6 July 2018, Michelle lodged a caveat over the Property. The interest she claimed was “estate in fee simple by virtue of beneficial interest in trust … pursuant to a constructive or resulting trust arising from financial or nonfinancial contributions by the caveator, to the acquisition, conservation and/or improvement of the land”.

On 19 July 2018 a lapsing notice was served on Michelle’s solicitor. Michelle took no steps in relation to the lapsing notice.

On 8 August 2018, David lodged the caveat which is the subject of these proceedings (the “Caveat”). Again, the interest claimed was “estate in fee simple by virtue of beneficial interest in trust … pursuant to a constructive or resulting trust arising from financial or nonfinancial contributions by the caveator, to the acquisition, conservation and/or improvement of the land”.

On 9 August 2018, Michelle’s caveat lapsed.

After some correspondence between Jill’s solicitors and David’s solicitors, these proceedings were commenced on 15 August 2018.

David's evidence consisted of an affidavit sworn by him, an affidavit sworn by Michelle and an affidavit sworn by David's solicitor, which included a draft statement of claim that the solicitor deposed had been prepared consequent upon instructions from David and Michelle “to commence proceedings against [Jill] in relation to an equitable interest in the land claimed by [David] and [Michelle]”.

It will be recalled that the interest claimed by David in the caveat related to, amongst other things, improvements said to have been performed by him on the property. His evidence in relation to that topic was:

His evidence also included:

Michelle's affidavit was silent on the topic of improvements to the Property but included:

Insofar as the proposed statement of claim is concerned, notwithstanding the solicitor's description that it was intended to assert “an equitable interest in the land claimed by the defendant and Ms Levett”, it is notable that the relief sought in that proposed statement of claim does no such thing. Rather, it claims an interest in the proceeds of sale, relying on an alleged agreement or estoppel in relation to those proceeds:

No submissions were made on behalf of David in support of the interest claimed in the Caveat beyond the Court being directed to David's evidence. It was submitted by Mr Busby that that was all he could draw to attention in support of the interest claimed.

For a number of reasons, Mr Murr SC submitted that David's evidence, and David’s other evidence generally, was insufficient to support the interest claimed in the Caveat. Mr Murr SC’s submissions were put on the basis that the Court could take the evidence of David and Michelle at its highest and that, even if that were done, David had not demonstrated that there was a serious question to be tried that he had the interest claimed in the Caveat.

The Court accepts Mr Murr SC's submissions, which I will briefly summarise.

First, all that David's evidence (see paragraph [20] above) demonstrated was that he had undertaken voluntary effort in relation to the Property. It was submitted that a son simply undertaking voluntary effort to improve the family home could not, without more, give the son an interest in the family home. That must be correct. For example, there is no suggestion that David undertook the work in reliance on a representation by Harold that he (David) would obtain an interest in the Property if he undertook the work.

Second, whatever it was that David had done in relation to the Property had been done when it was owned by SPI. The Court accepts Mr Murr SC's submission that there is no basis in the evidence for the suggestion that any equity (personal or otherwise) could attach against Jill, who became registered proprietor of the Property after Harold’s death and after any of the work undertaken by David had allegedly been done.

Third, and again taking the evidence at its highest, what David and Michelle appeared to wish to assert was a family agreement of some kind, or a case in estoppel, in relation to 50 percent of the proceeds of sale of the Property. It is not necessary, and I expressly refrain from doing so, for the Court to make any observations about the merits or strength of whatever case it is that David and Michelle might ultimately bring against Jill. However, the Court again accepts the submission put on behalf of Jill that even in relation to a claim of the kind which it appears that David and Michelle wish to bring, there are two immediate and fundamental difficulties insofar as the present proceedings are concerned:

For these reasons, the Court is satisfied that an order should be made in terms of paragraph 1 of the summons.

In relation to prayer 2 of the summons, I indicated to the parties during the course of argument that I was not satisfied that there was sufficient evidence of a threat that David would file a further caveat so as to warrant an injunction of the kind sought in prayer 2 being made. However, I also informed Mr Busby that if his client did not give an undertaking to the Court not to file any further caveats in respect of the Property, then I would regard such a failure as sufficient evidence of a threat to lay such an injunction.

During the course of the lunch adjournment which intervened between hearing the argument and delivering these reasons, David instructed his solicitors that he gave such an undertaking to the Court. The Court notes that undertaking and, on the basis of it having been given, declines to grant the relief sought in prayer 2 of the summons.

Finally, I should record that an application was made on behalf of David for an order that half the proceeds of sale of the Property should be held or frozen (in a way that was not specified) pending determination of the claim foreshadowed in the draft statement of claim. I refused to do so.

Both the procedural irregularity of making such an order in these proceedings, and the dearth of evidence that could possibly have justified such an order in any event, compelled the conclusion that the application made from the Bar table by David's solicitor should be refused. If David and Michelle wish to commence proceedings in relation to the proceeds of sale of the Property and to seek interlocutory relief in relation to those proceeds, they are free to do so in the usual way.

The orders of the Court are as follows: