Friday 28 August 2020

When is it appropriate to seek summary possession under order 53 of the Victorian Supreme or County Court Rules?

Summary procedure for possession under order 53

1.     In March 2020, the Court of Appeal (Maxwell P, Tate and Forrest JJA), looked at whether the summary procedure for possession of land under order 53 was appropriate in the case of a dispute between a brother and sister (see Chan and Lin v Chan [2020] VSCA 40).

 

2.     Maxwell P and Forrest JA agreed with the detailed reasons for decision written by Tate JA.

 

Background

3.     The dispute was between a brother and sister over the ownership of land in Victoria. Ching Ha Chan (‘Carol’) was the registered proprietor of 2 units in Plenty Road, Bundoora. Carol paid the deposit on each unit using money given to her from her parents. Carol and her brother, Ching Lung Chan (‘Michael’), lived in Unit 2 while Carol rented out a number of other bedrooms in Unit 2 and all of the bedrooms in Unit 1. Carol used the rental income to service the mortgage repayments. When Michael married Ying Lin (‘Lisa’) he moved to Unit 1 with his wife and eventually collected the rent from the other tenants in Unit 1 for himself. Michael claims that the money their parents gave to Carol was to purchase Unit 2 for herself and to hold Unit 1 on trust for him. Since late 2017, Michael had been in dispute with Carol about the ownership of unit 1. However, it was not in dispute that Michael and Lisa moved into Unit 1 with Carol’s consent.

 

4.     Carol brought summary possession proceedings for possession under order 53 in the County Court on 30 July 2018 to evict Michael and Lisa. She denied that she held Unit 1 on trust for Michael.

 

5.     A County Court judge made orders under Order 53 of the County Court Civil Procedure Rules 2018 in favour of Carol for the summary recovery of land.

 

6.     In the County Court, Michael and Lisa had claimed that they had an interest in unit one, ostensibly on the basis of a resulting, constructive or implied trust (although not in those terms, as they were not represented by counsel at the hearing).

 

7.     Counsel for Carol had submitted that nothing that Michael and Lisa raised had displaced the presumption of indefeasibility of title under the Transfer of Land Act, 1958. Justice of Appeal Tate found (at paragraph 38) that:

… counsel was wrong to submit that nothing had emerged either from Michael’s and Lisa’s affidavit, or Lisa’s oral submissions, to support an arguable case for the recognition of an equitable interest that might

attract an exception to indefeasibility (See, for example, Mathieson Nominees Pty Ltd v Aero Developments Pty Ltd [2016] VSC 131, [128] – [130]).

 

8.     Michael and Lisa applied for leave to appeal from the orders of the County Court. The primary basis for the appeal was that the dispute was not an appropriate case for the summary procedure under order 53, and

in the circumstances there were disputed facts and legal

contentions in respect of their equitable interest in Unit 1 that warrant a trial.

 

9.     The Honourable Justice of Appeal Tate granted leave to appeal and allowed the appeal.

 

10.  As a part of her reasoning, Tate JA examined the history, purpose, and scope of Order 53 (commencing at paragraph 46 of her reasons).

 

11.  Among other points of interest, Tate JA concluded that the summary procedure does not apply to a tenant, including a tenant holding over after the determination of the tenancy (in paragraph 8).

 

12.  Tate JA quoted from a decision by Derham As J (In Framlingham Aboriginal

Trust v McGuiness [2014] VSC 241, which was upheld on appeal in Framlingham Aboriginal Trust v McGuiness [2014] VSC 354 (Ginnane J). Associate Justice Derham summarised the principles that govern the application of Order 53 as follows:

(a)   It is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby trespassers are keeping the proprietor out;

(b)  It is intended to apply only in clear cases where there is no question to try;

(c)   The existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly;

(d)  While an order for possession may be made notwithstanding that there is a factual dispute between the parties, such an order will only be appropriate if the Court is able to satisfy itself as to the material facts that bring the case within Order 53;

(e)   The jurisdiction should be exercised with great care;

(f)    Where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07 of the Rules; and

(g)   Where the Court gives judgment for possession under Order 53, it may grant a stay of execution.

 

13.  Derham As J concluded with the following summary:

The power to give summary judgment for possession is similar in nature to the power to give summary final judgment under Rule 22.02 of the Rules. That power should be exercised with great care and should never be exercised unless it is clear that there is no question to be tried. The need for exceptional caution in exercising the power is the subject of numerous observations of courts in this country.

 

14.  Justice of Appeal Tate then analysed a number of other cases which held that the procedure under order 53 was not appropriate to deal with a factual dispute.

 

15.  In summary, she noted as follows:

The purpose of proceedings for the summary recovery of land is to protect against trespassers, that is, those who enter land without lawful authority or those who remain in occupation when the licence or consent to that occupation has been withdrawn. The procedure is only appropriate in a clear case, although it may be available where there is a minor factual dispute providing the dispute can be readily and fairly resolved by the judge.

 

The dispute between Carol, and Michael and Lisa, as to whether Unit 1 was held on trust by Carol for Michael, is not minor. The issue was not resolved by the judge, nor could it be without a trial. The judge, quite properly, determined not to hear the application until the parties had been given an opportunity to adduce evidence by affidavit. The evidence filed established a relevant contest of fact between the parties that could not be fairly and readily resolved summarily.

 

16.  After her analysis of the history, purpose, and scope of Order 53, Tate JA then noted that the two issues raised by the grounds of appeal relate to the status of Michael and Lisa as tenants at will or licensees and whether Carol holds Unit 1 on trust for Michael.

 

17.  The Honourable Justice of Appeal Tate then noted “When a person is given an uncertain interest in premises, the law may presume a tenancy at will” (paragraph73).

 

18.  At paragraph 76, Tate JA noted:

Michael and Lisa entered into occupation of Unit 1 lawfully. They

were permitted to occupy Unit 1 rent-free. There is no evidence to suggest that the occupation was for any defined term. There was no relevant lease. Their interest in Unit 1 is uncertain. If they had exclusive possession of Unit 1 by reason of an express or implied agreement with Carol, the law would likely presume a tenancy at will. While the position of a tenant at will has been described as somewhere between a lessee and a licensee, it is accepted that tenants at will are not licensees, licensees not being entitled to exclusive possession.

 

19.  As a result, Tate JA concluded that having never been nor become licensees, Michael and Lisa would fall outside the scope of Order 53.

 

20.  On the hearing of the appeal, both parties attempted to rely on new evidence. This evidence tended to establish that there may have been a constructive trust arrangement in place. The Court of Appeal rejected the attempt to introduce new evidence.

 

21.  Tate JA also outlined some of the (disputed) evidence from the hearing in the County Court and concluded (at paragraph 87):

While the evidence may seem somewhat scant to found a constructive trust based on principles of proprietary estoppel, in my view it is sufficient to indicate that the matter ought to have been directed to proceed by way of trial. … This was especially so given that Michael and Lisa were self-represented below and the identification of a relevant equitable interest is a complex matter.

 

22.  Finally at paragraph 91, the Honourable Justice Tate concluded:

I cannot confidently conclude that a constructive trust could not be found against Carol at a trial hearing of this proceeding. In those circumstances, the summary procedure under Order 53 is neither available nor appropriate.

 

Conclusion

23.  This case provides a useful summary of the law as it relates to the summary procedure for possession of land, as provided by order 53, as well as a thorough analysis of the circumstances in which the procedure will and will not be available.


WG Stark

Hayden Starke Chambers

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