CATCHWORDS Co-owners - lease in perpetuity of land - appellant co-owner in sole occupation carrying on business for reward - sale or partition - allowance for capital expenditure on improvements - account of rents and profits ~ whether respondent co-owner entitled to benefit of income from improvements made by , appellant without contributing thereto - whether appellant entitled to an allowance for his work and labour - effect of Limitation of Suits and Actions Act, 1866-7, S.A. Sale or partition - jurisdiction of Court to order same - Partition Act, 1881, S.A. - effect of Darwin Town Area Leases Ordinance, 1947 - temporal reference point for construction of Partition Act, 1881, S.A. - distinction between making a decree of partition and carrying it into effect. Application for adjournment - circumstances in which an Appeal Court will interfere with the exercise of discretion of a judge of first instance as to the mode and time of trying an action. Application to amend Notice of Appeal ~ reluctance of Appeal Court to permit point to be raised on appeal which was not taken in the court below does not extend to a question of lack of jurisdiction , ON APPEAL from the Supreme Court of the Northern Territory of Australia BETWEEN : ROBERT WEIR SQUIRE Appellant (Defendant) AND : FRANCES C. ROGERS Respondent (Plaintiff) No. NIG 14 of 1978. | Coram: Forster, Brennan and Deane Jd. Sydney ert ee ee IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY No. N&G 14 of 1978 GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA BETWEEN: ROBERT WEIR SQUIRE Appellant (Defendant) AND: FRANCES C. ROGERS Respondent (Plaintiff) O R D_ E R JUDGES MAKING ORDER Forster, Brennan and Deane JJ. DATE OF ORDER 29. August, 1979 WHERE MADE- 3 Sydney THE COURT ORDERS THAT : i. That the Defendant be given leave to amend the Notice of Appeal: (i) by inserting, after the number 1. following the words "ON THE FOLLOWING GROUNDS" on page 2 of the Notice of Appeal, the follow1ng: "A. That the Supreme Court of the Northern Territory has no jurisdiction to order sale of the property owned by the Plaintiff and (ii) (iia) =2- Defendant on the grounds tnat: (a) the jurisdiction to order the said sale is conditional upon the Court having power to grant a decree of partition; (b) the Honourable Court could not have so decreed in view of the provisions of Section 29 of the Darwin Town Area Leases Ordinance (1947 - as amended); (c) that because of the Plaintiff's delay and conduct a Court of Equity would have found that the Plaintiff was estopped in 1976 from claiming partition. ALTERNATIVELY B. by inserting in Ground No. 11 of the Grounds of Appeal after the words "rents or profits" the words "at all or alternatively"; and by adding at the end of the second clause (a) in the Notice of Appeal after "6th September, 1961;" the following: "or alternatively that the said Order be varied to read: 'That the following account and inquiry be taken and made, that is to say: (1) an account of all moneys which the Defendant has received to which the Plaintiff and Defendant were entitled as joint tenant; and (ii) an inquiry as to the amount expended by the Defendant upon capital improvements . to the said land, and to what extent the present value of the said land has been thereby increased'". 2. Order that the Orders made by the Supreme Court be varied by substituting for such Orders the following Orders: 2. THAT the land being Lot 2614 Town of Nightcliff, Hundred of Bagot comprised in Darwin Town Area Lease No. 1814 and entered in Register Book Volume 48 Folio 93 (hereinafter referred to as "the said land") be sold out of Court by the Respondent under the direction of a Judge in Chambers. THAT the gross proceeds of the sale of the said land be paid to the Respondent's solicitors who shall then pay them into Court to stand until further order to the credit of this action. THAT out of the said gross proceeds of sale shall be paid: (a) the costs of the action and of the appeal to the Federal Court of Australia as may be agreed between the parties or as may he taxed; (b) the ordinary costs, charges and expenses of the said sale, as may be allowed by a Judge in Chambers; and (c) to the appellant a sum equal to the amount, if any, by which the value of the land as realized upon sale has been increased, 1f at all, as a result of the improvements thereon, such sum to be determined in the manner directed by a Judge in Chambers. THAT after the payment of those sums set out in paragraph 3 hereof, the said proceeds of the sale shall be divided into two equal parts and one part paid to the Respondent and one part paid to the Appellant. THAT the Respondent and Appellant do join in the sale and execute all documents necessary to give effect to the transfer of the said land. THAT the Appellant do pay the Respondent's costs of and incidental to her attendance to give evidence in this matter including her reasonable travelling and accommodation expenses. THAT either party be at liberty to apply on fourteen days notice. IN THE FEDERAL COURT OF AUSTRALIA ) ) NORTHERN TERRITORY DISTRICT REGISTRY ) No. NIG 14 of 1978 ) ) GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA BETWEEN : ROBERT WEIR SQUIRE Appellant (Defendant) AND FRANCES C. ROGERS Respondent (Plaintiff) CORAM : Forster, Brennan and Deane JJ. 224 August 1979 REASONS FOR JUDGMENT FORSTER J.: I have had the advantage of reading the judgment of Deane J. I agree with it and the orders he proposes and I have nothing to add. I certify that this andthe preceding pages a2 a true copy of the Reasons for Judgment herein of his Honor Kr. Justice WA Ad , Associate d patea : 9-6°79 IN JHE FEDERAL COURT OF AUSTRALIA ) ) NORTHERN TERRITORY DISTRICT REGISTRY) ) GENERAL DIVISION ) No. NTG 14 of 1978 ON APPEAL FROM THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA BETWEEN ROBERT WEIR SQUIRE Appellant (Defendant) FRANCES C. ROGERS Respondent (Plaintiff) : CORAM : Forster, Brennan and Deane JJ. 20} August 1979. REASONS FOR JUDGMENT BRENNAN J.: I have had the advantage of reading the reasons for judgment of Deane J. I agree in the judgment which his Honour proposes, and in his reasons for proposing it, subject to a qualification presently to be mentioned. The appellant raised two defences to the claim for the order for sale of the jointly-owned property - the first relating to the respondent's delay in bringing proceedings in the Supreme Court of the Northern Territory, and the second relating to the requirement in s.29 of the Darwin Town Area Leases Ordinance 1947. That section requires that each parcel of leased land should be held and occupied by or under the lessee as one undivided parcel. Each defence was said to take the case out of s.4 of the 2/2 Partition Act 1881(5.A.), the section which conferred jurisdiction upon the Supreme Court to make the order for sale in lieu of partition against which this appeal was brought. Section 4 is expressed to apply "in an action for partition, where, if this Act had not been passed, a decree for partition might have been made...". It was submitted that, by reason of the defences, the case was not one where a decree of partition might have been made if the Act had not been passed. In xejecting these defences, his Honour has decided that the legal context which existed when the Act was passed in 1881 (or which must be notionally considered to have existed at that time) is the relevant context in which to determine whether an order for partition might have been made had the Act not been passed. I should wish to reserve my opinion on this question. My concurrence with his Honour's judgment is not thereby affected. Whether one chooses 1881 or some later date, the defence relating to delay fails for the reasons which his Honour gives. Equally, s.29 of the Ordinance in whatever temporal context it is considered, does not affect the jurisdiction of the Court to make a decree of partition. The defences fail, at whatever time they are to be considered. I certify that this and the one preceding pageg ace a true copy of the Reasons for Judgment herein of his Honour Mr. Justice 7) fothang Comey Dated: y August 1979 IN THE FEDERAL COURT OF AUSTRALIA ) ) NORTHERN 'TERRITORY DISTRICT REGISTRY ) No. NTG 14 of 1978 . ) GENERAL DIVISION ) AN APPEAL FROM THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA BETWEEN: ROBERT WEIR SQUIRE Appellant (Defendant) AND: FRANCES C. ROGERS Respondent (Plaintiff) CORAM: Forster, Brennan and Deane JJ. REASONS FOR JUDGMENT DEANE J: Robert Weir Squire ("the defendant") appeals against an order made by the Supreme Court of the Northern Territory for the sale of the estate of himself and Miss Frances Rogers ("the plaintiff") as tenants under a lease in perpetuity of approximately one and a half acres of land situate at Nightcliff within the Darwin Town Area. The defendant also appeals against an order that an account be taken of the rents and profits received by him in respect of the subject land since 5 September, 1961 and against a number of consequential orders. The relevant orders were made by the Supreme Court in proceedings instituted by the plaintiff on 14 December, 1976. These proceedings were listed for hearing on 5 October, 1978. When the matter was called on that day, counsel for the defendant informed the Court that he had been briefed to appear for the defendant some three minutes previously. The explanation pro- ferred to the Court was that the defendant had been advised on 28 September, 1978, by his previous legal representatives that they were unprepared to continue to act for him because of his failure to pay their professional fees. Counsel for the defendant sought an adjournment "for so long as possible". This application for an adjournment was opposed by counsel for the plaintiff who tendered a letter dated 27 September, 1978 from the defendant which concluded with the statement that he "no longer wished" his previous solicitors to act for him. No suggestion was made that the professional fees which the defendant declined to pay were excessive or that the defendant was unable to pay them. Counsel for the plaintiff informed the Court that his client, whom he described as "too old and frail" for regular travelling, had travelled from the United States where she lived to Australia for the case and would need to return to the United States if the case did not proceed and subsequently return to Australia for any adjourned hearing. The learned trial judge suggested to counsel for the defendant that he apply for a short adjournment to enable him to take instructions and ae indicated that he would then favourably consider an application for an adjournment to the following day. His Honour added that, so far as he was concerned, the case was to proceed "to day or tomorrow'. This last-mentioned statement was made in a context where his Honour had twice indicated that his "inclination" to refuse to grant a more lengthy adjournment was the result of his view "at the moment". Later in the morning, after a second short adjournment to enable negotiations between the parties to continue, counsel for the defendant applied for, and obtained, an adjournment of the proceedings to the following day which was a Friday. On that day, evidence was heard. At mid-afternoon when the evidence had seemingly been completed, counsel for the defendant indicated that the defendant was "asking that the land be divided, not sold" and was granted, at his request, an adjourn- ment of the proceedings until the following Monday to enable the more precise formulation of a proposal for partition. When the proceedings were resumed, counsel for the defendant sought and obtained leave to re-open the defendant's case. Leave was granted and a plan of proposed subdivision of the subject land was received in evidence. Arising from that evidence, further evidence was led by the plaintiff. Counsel then addressed and the learned judge reserved his decision. The facts as disclosed by the evidence before the Supreme Court were largely undisputed and can be briefly stated. The perpetual lease to the parties issued under the provisions of the Darwin Town Area Leases Ordinance 1947 on pare eeiehon wer TTS Doreen Vo Ren Denes wk: VWs Satan On Vea Es Vm anova a PE td op + ae wee mse tet Nene 8 30 October, 1962 with effect from 5 September, 1961. It required 'that within one year of its commencement, or such further time as the Administrator of the Territory might allow, there be buildings on the land of a total value of not less than $15,000. The annual rental reserved by the lease was forty pounds until 30 June, 1970 and, thereafter, five pounds per centum of the unimproved value of the land as deter- mined from time to time under the Ordinance. Before the issue of the perpetual lease, the land had been held by the defendant under a special lease. The defendant had permitted the plaintiff to live on the land for some years and the plaintiff had been responsible for effecting some improvements on the land includ- ing the erection of a hut. It was the defendant's decision that the perpetual lease should issue in the joint name of the plaintiff and himself. In June, 1963, some eight months after the issue of the perpetual lease, the plaintiff, who was and is an American national, left Australia to return to the United States. It would seem that, apart from a card which she sent on the Christmas after her departure, she had no communication with the defendant until, some thirteen years later, she returned to Australia to claim the benefit of her interest in the subject land and, ultimately, to institute the present proceedings. The improvements on the land at the time the perpetual lease issued were, apparently, not accepted by the Administration as appropriate to be taken into account for the fulfilment of the covenant relating to required building improvements. The defendant caused two buildings which he described as "twin blocks of flats! to be erected on the land at, he estimated, mes a combined cost of between $40,000 and $50,000. He caused other improvements to be effected on the land and there carried on a business of letting flats and rooms and conducting a caravan site. These buildings and improvements were largely destroyed by Cyclone Tracy in December, 1974. After the cyclone, the defendant expended further moneys on improvements. A valuation which was received in evidence indicated that the present improvements included a swimming pool and a total of eleven sub-standard buildings, comprising nine flats, fifteen single rooms, a recreation shed and an ablutions block. The gross annual income derived from the business of providing accommodation in flats, rooms and caravans and letting caravan sites was estimated, ignoring income from caravans and caravan sites, to be in excess of $19,000. The defendant estimated that his total expenditure on improvements, before and after the cyclone of 1974, was at least $100,000. His evidence to that effect was not challenged in cross-examination. It was not suggested that the plaintif£ had made any contribution at all to the improvements effected to the subject land after the grant of the perpetual lease. All outgoings, including rent, had been paid by the defendant. Little assistance as to the real issues between the parties is to be derived from the pleadings. The Statement of Claim sought an order for sale or, alternatively, an order for partition, an order for an account and ancillary orders. It contained allegations of the basic facts as to the grant of the lease, the registration of the plaintiff and the defendant as proprietors of the leasehold interest, the improvements on ~~ Mee ee tet te Relat roy the land and the carrying on by the defendant of the business on the land. All of these allegations were admitted by the defence. Allegations in the Statement of Claim that the plaintiff and the defendant held their leasehold interest as joint tenants, that a sale would be more beneficial than partit- ion and that the plaintiff was "interested in the leasehold estate" were denied by the defence which raised a number of legal defences. These legal defences were summarized by the learned trial judge, in his reasons for judgment, as being: "1. At the date of the purported grant to the plaintiff of a leasehold estate in the subject land she was not a Brttish subject and was therefore not qualtfted to hold the grant of leasehold land as presertbed by s.6 of the Darwin Town Area Leases Ordinance in force at the time of the granting of the lease. 2. The plaintiff ts not a joint tenant of the said estate but a tenant tn common. 3. fhe plaintiff is not entitled to the remedies elatmed or any of them. 4. The plaintiff is statute barred by reason of the Limitation of Aettons Act 1866-67 of South Australia. 5. The plaintiff has been guilty of delay and should be estopped by her conduet from gaining the relief sought". The learned judge stated that, on the hearing of the action, "the defendant did not persist in any of these defences, but in the end result contended that the Court should order a division of the property between the plaintiff and the defendant and put forward a plan of subdivision which would give effect to this proposal". An examination of the transcript confirms the accuracy of his Honour's observation in relation to the claim for an order for sale. The only defence to that el ee ae TO a ar weer ee ESSE ee , claim pressed by the defendant was that, in the circumstances, an order for partition and not an order for sale should be | made. The position is not, however, quite so clear in respect ' of the plaintiff's claim for an account of rents and profits. It is difficult to discern from the transcript of both evidence and argument which, if any, of the defendant's sub- missions were intended to relate either to the question whether an account of profits should be ordered or to the question of what matters should be regarded as relevant on the taking of 'any such account. At one stage, counsel for the defendant submitted that the result of the plaintiff's absence, lack of communication and failure to contribute to the earning of income was that "she would not be entitled to any income from that property". Subsequently, that submission was neither developed nor expressly abandoned. It was conceded by the plaintiff that the defendant was entitled, on the division of any proceeds of sale of the subject leasehold, to receive an allowance in respect of actual capital expenditure to the extent to which the proceeds of sale could be attributed to enhancement of value of the land as a result of the relevant improvements. Otherwise, there would appear to have been no submissions directed either to the defendant's entitlement, on the taking of any account, to the benefit of an allowance in respect of proper disburse- ments or in respect of his own work and labour or to the effect of any statute of limitations upon the plaintiff's entitlement on such an account. More important, the question whether, on the taking of an account of any rents or profits arising from the use of capital improvements, the plaintiff was entitled to participate in the benefit of the income of the improvements while being free of any obligation to make any contribution or allowance in respect of their cost, appears not to have been raised at all by counsel for the defendant. The Notice of Appeal filed on Behalf of the defendant sought a new trial of the action on the ground of an alleged failure by the learned trial judge to grant to the defendant a sufficient adjournment of the trial of the action so as to enable the defendant properly to defend the action. Orders setting aside the order for sale and the order for an account or, alternatively, changing the content of any order for an account were sought on a number of other grounds. For present purposes, the grounds which remain of relevance relate to alleged laches, estoppel by conduct and, as regards the order for an account, the applicability of the provisions of the Limitation of Suits and Actions Act (S.A.} 1866-67 which is in force in the Northern Territory. At the commencement of the hearing of the appeal, counsel for the defendant applied for leave to amend the Notice of Appeal by adding a further ground of appeal denying the jurisdiction of the Court to make che order for sale. Leave to amend the Notice of Appeal was also sought so as to make clear that the attack on the order for an account extended to the making of any order at all and was not confined to a submission that the order extcnded beyond a relevant limitation period. In the course of argument, a further application was made for leave to amend the Notice of Appeal to enable the defendant more fully to attack the form of the order for an account. The question whether the defendant should be given leave to make all or any of these amendments was reserved and the Court directed that the appeal proceed on the basis that leave to make the necessary amendments had been given and that the amend- ments had been effected. In my view, the defendant should be given leave to make all the proposed amendments to the Notice of Appeal. In so far as those amendments relate to the jurisdiction of the Court to make any order for sale, it is not suggested that the plaintiff had refrained from leading any evidence which would have been led if the point had been taken in the Court below and the ordinary reluctance of an appeilate court to permit a point to be raised, for the first time, on the actual hearing of an appeal does not extend to the case where the point is a bare legal point which, if correct, means that the Court below lacked jurisdiction to make the orders which it made. The position is not so clear in so far as the proposed amendments would raise questions relating to the order for an account. It will, however, appear from what is said hereunder that I am of the view that the circumstances are such that the defendant should not be precluded from raising, on this appeal, any argument as to the entitlement of the plaintiff to an order for an account or as to the appropriate form which any such order should take. Since the other members of the Court are also of the view that the defendant should be permitted to amend the Notice of Appeal in the manner sought, I shall proceed to deal with the issues raised on the appeal on the basis that the desired Co rer irony ere nee ere ee re ~10- amendments to the Notice of Appeal Have been effected. The first argument advanced on hehalf of the defendant on the appeal was that the orders made should be set aside and a new trial ordered on the ground that his Honour shouid have granted the defendant an adjournment of the hearing of the matter. The question whether an application for adjournment of a matter should be granted or refused is a matter within the discretion of the trial judge to be resolved according to the overall requirements of justice in the particular circumstances (Conroy v. Conroy [1917] 17 S.R. (N.S.W.) 680 at p. 682). Its resolution may involve the assessment of competing claims by litigants in other cases awaiting hearing in the list of the particular judge or the particular court and may require know- ledge of the working of the listing system of the particular court or judge and the importance in the proper working of that system of adherence to dates fixed for hearing. A court of appeal will not, as a general rule, interfere with the decision of a judge of first instance on that question unless it is sat- isfied that the exercise of his discretion has miscarried in the sense that it had been affected by wrongful application of principle or misunderstanding or erroneous assessment of the factual material before him. This general rule is subject to any power of the particular appellate court to receive new evidence on the hearing of an appeal (see, for example, Federal Court of Australia Act 1976, s.27) and the benefit of hindsight in a case where it can be seen that serious injustice has -1l1- resulted or will, in fact, result from the exercise of the discretion. In Sackville West v. Attorney General ((1910) 128 L.T. Journ. 265) it was held by the United Kingdom Court of Appeal (Cozens-Hardy M.R., Moulton and Buckley L.JJ) that: "although tt could not befaid that under no ctireum- stances would the Court of Appeal be justified in interfering with the discretion of the learned judge in a court below as to the proper mode and time of trying an aetton, yet tt would only be tn the most extraordinary ctreumstances that an applieation to review the dectston of the learned judge as to the conduct of the business in his own court could succeed; that the only ease in whteh the Court of Appeal would so interfere would be if satisfied that the decision was such that, notwtthstanding any exerctse by the learned judge of the power of control whieh he would have over the action when it came on for trial, justice did not result and he had failed to see that such would be the effeet of hts deetston;". That statement of principle has been quoted with approval in a number of subsequent cases (see, for example, Maxwell v. Keun L.R. [1928] 1 K.B. 645 at p. 650; Conroy v. Conroy, supra at p. 683). It is of particular relevance to a case where the exercise of discretion has resulted in a refusal of an adjourn- ment in that it recognizes the need to take into account, in considering the effect of a refusal to grant an adjournment, the control which the judge will enjoy over the action when it comes on for trial including, particularly in a case such as the present where no jury is involved, the power to deal with any particular applications for adjournments which may subsequently be made. er -12- The present matter was, as has been seen, listed to be heard on a day almost two years after its commencement. The plaintiff had travelled from America for the hearing. The letter from the defendant to the plaintiff's solicitors which was placed before his Honour indicated that the defendant's predicament resulted from his own deliberate action. The plaintiff's frail condition and the need to return to America and return to Australia if any lengthy adjournment were granted were also advanced by her counsel as factors supporting the refusal of any lengthy adjournment. Plainly, there were grounds 'for the view which his Honour formed that the matter should proceed either on the day fixed for the hearing or on the following day. As has been mentioned, his Honour's expression of that view was made in a context which made clear that the view that he was expressing was not one to which he was necessarily finally committed. Thereafter, counsel for the defendant made a number of particular applications for adjournment. All were granted. There is no basis whatever in the circumstances of the present matter for a finding that there was a failure by the learned judge properly to exercise his discretion in deal- ing with any of the applications for an adjournment that were made to him. To the contrary, I respectfully agree with the learned judge's exercise of his discretion on each occasion when a question of adjournment arose for his determination. His refusal to grant the adjournment "for so long as possible" which was initially sought was, in my view, correct. No subsequent application for an adjournment was refused. Fe an peer Cae nye A MR ST TS anes ee peterpan = -~13= The defendant has not sought to place any fresh naterial 'before this Court in relation to the question of the adjournment of the proceedings. It has not been suggested that the defendant was, as a result of the refusal to grant a lengthy adjournment of the proceedings, precluded from calling any particular evidence which it was desired to call or that any particular evidence which would be of assistance to the defendant was not, in fact,called. The attack on any failure to grant an adjournment has not been made good. The defendant's next argument on the appeal was that the Supreme Court had no jurisdiction to make the order for sale which was made. It is common ground between the parties that any jurisdiction of the Supreme Court to make the order for sale must be found in the provisions of the Partition Act 1881 of South Australia which is in force in the Northern Territory. The sections of that Act conferring jurisdiction to make such an order (ss. 3, 4 and 5} are, in terms, limited to " (ijn an action for partition, where, if this Act had not been passed, a decree for partition might have been made". The argument advanced on behalf of the defendant was that such a decree for partition might not have been made in the circun- stances of the present matter for two distinct reasons. First, that the provisions of s.29 of the Darwin Town Area Leases Ordinance 1947 ("the Ordinance") would have precluded the making of such a decree. Second, that a court of equity would have declined to make such a decree by reason of the equitable defences of laches and estoppel by conduct. Implicit in the defendant's argument is the assumption that the words "where, if -14- this Act had not been passed, a decree for partition might have been made" add to the prior reference to "an action for partition" at least the requirement that the circumstances of the particular case are such that the court would have had jurisdiction to make an order for partition. The validity of this assumption was not put in dispute by the plaintiff and, in view of the conclusion which I have in any event reached on the defendant's attack on the order for sale, I propose, for the purposes of the appeal, to accept it as valid. It should however be noted that, at the time the Partition Act 1881 (S.A.) was enacted, Sir James Bacon V.C. had already expressed, in strong terms, the view that the corresponding provisions of the United Kingdom Partition Act 1868 were the result of verbosity and added nothing to the words "(i)n an action for partition" (Pryor v. Pryor [1874-75] L.R. XIX Eq. Cas. 595 at p. 598 and cf, Walker, The Partition Acts, 2nd Edition (1882), at p. 27). Section 29 of the Ordinance provides, for present purposes, that subject to s.29A, each parcel of land included in a lease shall, except where a portion of the parcel is acquired by the Territory, at all times be held and occupied by or under the lessee as one undivided parcel. Section 29A provides for an application for approval to subdivide land that is subject to a lease under the Ordinance. Where approval to subdivide is obtained, the Ordinance prescribes a procedure for the grant of a new lease in respect of the various lots in the subdivision. Jt would appear to be common ground that there has not been any application for approval to subdivide the subject land. A court would plainly decline to make an nn ee . -15- order which would, in itself, involve a division of holding or Ul occupatidn under a lease in breach of the provisions of s.29 of the Ordinance. At the threshold of the defendant's argument based upon the provisions of s.29, there lies a general problem of the construction of the sections of the Partition Act 1881 (S.A.) which confer jurisdiction to make an order for sale (ss. 3, 4 and 5). The operation of each of those sections is, as has been mentioned, confined to an action for partition where, tf this Aet had not been passed, a decree for partition might have been made. On the assumption that the italicized words add a requirement or qualification to the words "an action for partition", the threshold problem concerns the ident- ification of the temporal reference point for determining the legal context in which the question whether a decree for partition might otherwise have been made falls to be answered. Is the relevant context that into which the Partition Act 1881 (S.A.) was introduced, namely, the law of the colony of South Australia at the time that Act commenced operation? Or is it the law operating at the time and in the place of the institution of the relevant proceedings, namely, the law of the Northern Territory on 14 December, 1976? Or is it the law operating at the time when the order for sale was made, namely, 9 October, 1978? Or is it some other, and if so what, legal context? The Partition Act 1881 (S.A.) was based upon, and substantially adopted, the provisions of the United Kingdom Partition Act of 1868. It is facultative legislation in that ~16- it confers a wide -power to make an order for sale in lieu of partition in circumstances where previously sale in lieu of partition was only available, with the assent of the Court, if all parties agreed that a sale was the most beneficial way of disposing of their interests (see, Pryor v. Pryor, supra; North v. Guinan, Beatty, 342). The legislation not only had the effect of making an order for sale available as a general alternative to an order for partition. It made the remedy of sale the preferred remedy in that, all other things being equal, an order for sale in lieu of an order for partition was to be made if an owner of a moiety requested sale and the owner of the other moiety sought actual partition. It was inevitable that the effect of the legislation would be that the alternative remedy of sale would displace the remedy of judicial partition as the ordinary order in a partition suit. By 1876, the author of the first published textbook on the United Kingdom legislat- ion (Walker, The Partition Acts, lst Edition) could comment that "the Court does not often now decree partition". In these circumstances, it would seem unlikely that it was the legislative intent that the general jurisdiction to make an order for sale should be confined to those circumstances in which, under the law as it might from time to time in the future exist, the increasingly rare order for actual partition of the relevant property might be made. It would seem more likely that it was the legislative intent that the circumstances in which the general jurisdiction to make an order for sale should exist would be those in which an order for partition might have been made at the time when the Act first spoke. The -17- use of the words "might have been made" (and not "might be made") lends some support for the latter construction which is, in my view, the 'correct one. The words "if this Act had not been passed" were, on that construction, necessary for the ' reason that the temporal reference point is the time when the Act first operated and not the time immediately before its commencement. (See Walker, The Partition Acts, 2nd Edition p. 27; Joyce v. Joyce [1963] Qd. R. 139 at p. 153; Patel v. ' Premabhai [1954] A.C. 35 at p. 45 (where the point was left open); and cf. Pacini v. Pacini (unreported) Supreme Court of the Northern Territory (Blackburn J.) 23 November, 1967). It follows that the question whether a decree for partition "might ... have been made" falls to be answered, in the present matter, in the context of the law of the colony of South Australia at the time when the Partition Act 1881 (S.A.) commenced to operate. The resolution of that question involves a determin- ation of the existence of jurisdiction to make an order for partition and not a preliminary trial to determine whether, in the exercise of jurisdiction, a court should, as distinct from might, have made such an order. If the provisions of s.29 of the Ordinance comprised a general prohibition on the subdivision of any land within a designated area, the above conclusion would suffice to dispose of the defendant's argument for the reason that the provisions of an Ordinance made in 1947 plainly would not constitute any part of the legal context in which the question in point fell to be answered. The provisions of s.29 do not, however, comprise any such general prohibition. They are -18- restricted in their operation to land included jn a lease under the Ordinance and constitute part of the definition of the obligations and rights of a lessee under a lease granted under the Ordinance. The provisions of 8.29 of the Ordinance may be irrelevant to the legal context in which the question whether a decree for partition might, in the circumstances of the case, have heen made, falls to be answered. They are, however, relevant in that they constitute part ! the cizcum- stances of the case in that the joint property iS property which cannot lawfully be divided otherwise than in accordance with the provisions of the Ordinance. 'he appropriate question, in the circumstances, is whether a decree for partition might, under the law of the colony of South Australia st the time the Partition Act 1881 (S.A.) was introduced, propeily have been made in respect of the estate of joint tenants under a lease granted in pursuance of a legislative enactment of the colony whose provisions corresponded to the provisions of the Ordinance. The answer to that question is to be found in the distinction between the making of a decree for partition anti the carrying of it into effect. The usual decree which was made in a pdjrtition suit prior to the various Partition Acts did not effect an immediate subdivision of the property in respect af which the decree was made. The form of decree expressly jecognized that actual subdivision might never be effected in that it reserved to the parties liberty to bring in proposals fui a sale- If all the parties were agreed that a sale was the most beneficial way of disposing of their interests, the court Would assent ~-19- to the decree for partition being carried into effect by such a sale (Pryor v. Pryor, supra; North v. Guinan, supra). It 'is plain that a sharp division is drawn between the decree and the carrying out of the division of the land under it. Indeed, the decree might have been carried out in one of two ways, either hy dividing the property or by a sale by consent of all the parties, and if the latter course had been followed it could not be said ... that a partition decree had not been made". (Patel v. Premabhai (supra) at p. 47). "A decree for partition" and "division" or "subdivision" are two different matters (ibid, at p. 45). The requirement of s.29 of the Ordinance that land be heid and occupied as one undivided parcel would not preciude the actual making of a decree for partition. The making of such a decree would not, in itself, involve a division of the holding or occupation of the land in respect of which the decree was made. The existence of the provisions of s.29 might lead the court either to frame a decree for partition in such a way as to ensure that the necessary approval for subdivision was obtained before the decree could be carried into effect by actual division of the property or to provide, by ancillary orders, for the actual making of an application for approval of the necessary subdivision (see, for example, the form of order made in Dougan v. Ley (1946) 71 C.L.R. 142 at pp. 145, 152 and 154). Those provisions might, in certain circumstances, lead the court to decline to make an order for partition on the grounds that it would be futile to do so (North v. Guinan, supra). There is nothing, however, in the provisions of s.29 ~20- of the Ordinance which deprives the court of its jurisdiction to make a decree for partition or which operates to deprive the present proceedings of their character as an action for partition where, if the relevant Partition Act had not been passed, a decree for partition "might have been made". In Patel v. Premabhai (supra), the Judicial Committee of the Privy Council held that a provision in the Fijian Subdivision of Land Ordinance, 1937 to the effect that land to which the Ordinance applied should not be subdivided without the prior approval of a board established under the Ordinance would not, for the purposes of the relevant provisions of the United Kingdom Partition Act 1868 which was in force in Fiji, have the effect of preventing the making of a decree for partition of land notwithstanding that the necessary approval for sub- division had not been obtained. Their Lordships examined the distinction between the making of a decree for partition and the carrying of it into effect and concluded that a decree for partition could be made even if the actual division could not be effected without breach of the terms of the Fijian Ordinance. "It is", their Lordships said, "not the making of the decree which is prohibited but the subdivision of the land which would otherwise result from the making of the decree". They added (ibid, at p. 47): "Thetr Lordships' view is in no way altered by the fact that under sectton ll of the Ordinance the tand in questton in the present tnstance could not, owing to tts diminutive size, be divided save in exzceptronal cireumstances, the qvestton being not Could it be divided? But Could a decree for partition be made? Nor is the definition of "subdivide" in ~2L- seetton 3(a) inimical to this opinton. All that that definition means ts that a divtston or sub- division takes place within the meaning of the Ordinance, tf the land is in facet divided, whether it tsidivided for the purpose of sale or conveyance or transfer or lease or sublease or mortgage, making an agreement, partition or otherwise dealing with the property. But it is not divided merely because an order for partition ts made: there is nothing to prohtbit the making of such an order. What is forbidden is the carrying out of the order by actual partition unless and until the approval of the board, set up by the Ordinance has been obtained. ... on the true construction of the Ordinance all that ts forbidden is the actual division of the tand or the earrying out of a decree for partition without the consent of the board. The making of a decree is not prohibited, and as such a decree might have been made (though it could not be implemented by actual diviston of the property) a dtreetion for sale of the property ts permisstble under the terms of the Act of 1868". It was submitted on behalf of the defendant that the requirement in s.29 of the Ordinance that the subject land be held and occupied as one undivided parcel was quite different from the prohibition upon subdivision which was contained in the Fijian Ordinance in Patel's Case. In my view, this is not so. The Fijian Ordinance contained (s.3) a wide definition of "subdivide" which included "partition" and "parting with the possession of any part thereof''. The requirement in the Ordinance and the prohibition in the Fijian Ordinance were both subject to the power of a public authority to approve subdivis- ion. In neither the present case nor the Fijian case was such approval obtained. In my view, the decision of the Privy Council in Patel's Case supports the conclusion that the provis- ions of s.29 of the Ordinance would not preclude the making of a decree for partition. That conclusion is contrary to the decision of Blackburn J. in Pacini v. Pacini (supra) but accords with the reasoning of Jeffriess J. of the Supreme Court of \Roereretan derTn Tren ~22- Queensland in Joyce v. Joyce (supra) and of Jones J. of the Supreme Court of Western Australia in De Campo Holdings Pty. Limited v. Cianciullo ([1977] W.A.R. 56 at p. 60). It also accords with the decisions of various single justices of State Supreme Courts that a legislative provision prohibiting or rendering ineffective a transfer or sale without consent does not, as a matter of jurisdiction, preclude the making of an order for sale in a case where the necessary consent has not been obtained for the reason that the making of the order for sale, as distinct from carrying it into effect, does not involve any breach of the relevant legislative prohibition (see Blennerhasset v. Blennerhasset [1957] V.R. 214; Fairweather v. Fairweather (1957) 59 W.A.L.R. 25; Wenderson v. Henderson [1963] W.A.R. 112; Hunt v. Hunt [1966] S.A.S.R. 169; cf. Bielfield v. Bielfield [1956] Q.W.N. 4 and Ross v. Ross [1962] Q.W.N. 31, and see also the judgment of Blackburn J. in Witchard v. Witchard (1975) 6 A.C.T.R. 31 at pp. 34-35). The defendant's argument based on s.29 of the Ordinance therefore fails. The defendant, on the hearing of the appeal, relied on laches and estoppel by conduct to attack the order for sale in two different ways. First, it was said that, by reason of the alleged laches and the alleged estoppel, an order for partition might not have been made in the circumstances and that, for that reason, the matter was not within the relevant provisions of the Partition Act 1881 (S.A.). This argument ignores the distinction between the question whether jurisdiction to make an order for partition would have existed and the question whether an order for partition ought to have been made in exercise of that jurisdiction (see supra). Aiternatively, it was submitted that, even if the Supreme Court had jurisdiction to make an order for partition or sale, it should have declined to do so by reason of the alleged laches and the alleged estoppel. Both arguments fail in limine for the reason that no factual foundation for the alieged laches and the alleged estoppel by conduct as regards the institution or maintenance of proceedings for partition or sale has been made out. In these circumstances, it is unnecessary to consider whether a defence of laches or estoppel is, in any event, available in an action by a joint legal owner of property for an order for partition or sale (see, for example, Bray v. Bray (1926) 38 C.L.R. 542 at pp. 545 and 546;- Scates v. Scates [1962] V.R. 398; Peck v. Peck [1965] S.A.S.R. 293 at p. 297ff. and Foster, The Law of Joint Ownership and Partition of Real Estate (1878) p. 110ff.). The defendant's attack on the order for sale cannot be sustained. There remains for consideration the defendant's attack on the order for an account. That Order was that: "pursuant to Order 36 of the Supreme Court Rules - the Master to take an account of the rent and profits recetved by the defendant tn respect of the said land since the fifth day of September, L96L", Order 36, Rule 10 of the Supreme Court (N.T.) Rules provides that upon the taking of any account directed by any judgment or order all just allowance shall be made without any direction or oa ~24- for that purpose. Order 36 contains provisions as to procedural steps ta 'be observed on the taking of an account and indicates a continuing active involvement of the Judge in determining disputed questions which might arise on the taking of an account (e.g., Rule 6 "only such items as are contested or surcharged shall be brought before a Judge in Chambers"). Otherwise, the provisions of Order 36 do not supplement the content of the order for an account which was made. It has already been mentioned that it was submitted, on behalf of the defendant, that the result of the plaintiff's absence, lack of communication and failure to contribute to the earning of income was that "she would not be entitled to any income from that property". That submission was left undeveloped. In so far as it may have been intended to raise an equitable defence of laches or estoppel by conduct to an order for an account, the factual basis for it has not been made out. The learned judge would appear to have received no other assistance from the defendant on either the question whether an account should be ordered or on the form which any order for an account should take. The difficulty which resulted is reflected in his Honour's reasons for judgment where he commented that the question of the applicability of a Statute of Limitations "may have to be litigated at a later stage" and added that he was aware that in making an order that the accounts be taken by the Master he may have been imposing an unreasonable burden on the Master. The order which his Honour made corresponded with ~25-+ that sought by the plaintiff in the Statement of Claim. In its reference to an account "of the rents and profits received by the defendant in respect of the said property", it left unresolved the question whether all of the defendant's receipts in the course of what the Statement of Claim acknowledged as being "a business" were to be the subject of the account. It did not specify what types of expenditure were to be allowed in the defendant's favour upon the taking of the account or whether any allowance was to be made in the defendant's favour for his own time and efforts. As his Honour recognized, the order ignored the question of the possible application of a relevant period of limitation of action. The Statement of Claim did not, in terms, seek an order either for payment or for an allowance from the proceeds of sale of any amount found duc on the account and no such order was made. It may have been envisaged that the matter would come back before the learned judge either in the course of the taking of the account or after the account had been taken_and that these questions, which had been ignored in the submissions of the parties, could then be resolved, Counsel for the plaintiff£ conceded that the Limitation of Suits and Actions Act 1866-7 (S.A.) was applicable to the plaintiff's claim for an account and that the order for an account which was made should be limited to the period commenc- ing six years before the issue of the writ. It was also conceded that the defendant was entitled, on the taking of an account, ~ to an allowance for his time and labour in the earning of the rents and profits for which he was liable to account. These concessions were only made on the hearing of the appeal and the order for an account should be modified to reflect them. -~26- Even after such modification however, the order made would leave unresolved the precise definition of what receipts should be included and what outgoings should be allowed on the taking of the account. The definition of those receipts and outgoings goes to the basis on which an account is to be taken and involves not uncomplicated questions of law and fact. Those questions should, to the extent that they are not foreclosed to the defendant, be decided at this stage and not left to be resolved either on the taking of the account or subsequently upon further consideration by the Court after attempts to take 'the appropriate account have been completed. In the light of the resolution of those questions, the order for an account should be varied so as to make clear precisely what receipts and outgoings of a revenue or capital nature are to be brought to account by the defendant and allowed in his favour (see Sanguinetti v. Stuckey's Banking Company (No. 2) L.R. [1896] 1 Ch. 502 at p. 505). The order for an account, made in broad and general terms, was that sought by the plaintiff in her Statement of Claim. It was made in that form largely as a result of the failure of the defendant to address submissions as to the modifications to it which should be made in his favour. With some hesitation, I have reached the conclusion that, in view of the fact that no account has as yet been taken, the defendant should not be foreclosed from relying, at this stage, upon any of the submissions which have been made on his behalf on the ee ee renin epee = question of the order for an account. In reaching this conclusion, . I have been influenced by the fact that the Statement of Claim -27- was defective in that it alleged neither that the defendant had i . failed to account for rents and revenue received by him from the common property nor that the plaintiff did not know the state of the accounts (In re Tolman's Estate (1928) 23 Tas. L.R. 29), that no order for payment of the amount found to be due on the taking of an account has been made, that the order made would inevitably lead to disputed questions of law before the Master and that the questions raised, on the appeal, by the defendant's submissions as to the appropriate form of any order for an account may have been thought by both parties to remain open to dispute either on the taking of the account or, subsequently, upon further consideration by the Court. The cases in which one co-owner can obtain an account of receipts from another co-owner who has had the sole use of the joint property are, except where the sole use has been the result of agreement (whether express, implied or imputed), holding over or actual exclusion, limited to those cases where one co-owner has received more than his share of the rents or other revenues of the common property (see, McCormick v. McCormick [1921] N.Z.L.R. 384 at p. 385; Henderson v. Eason (1851) 17 Q.B. 701; Rees v. Rees [1931] S.A.S.R. 78 at p. 81; Luke v. Luke (1936) 36 S.R. (N.S.W.) 310 at pp. 313-314; Scapinello v. ScapineJlo [1968] S.A.S.R. 316- at p. 320ff.). The plaintiff does not allege any relevant agreement between the defendant and herself. The Statement of Claim did no more than allege that the defendant was, and for some years had been, carrying on the business of permitting persons to occupy cabins and to park caravans on the land for reward to himself. The ~28- evidence indicated that "the business" in question consisted of the business of "a caravan and cabin park" and that occupat- ion fees were obtained for the use (to use neutral terms) of furnished flats, single rooms and caravans as well as for the use of parking and associated facilities for caravans. The receipts for which the defendant would be liable to account on the plaintiff's claim are limited to those receipts which can properly be regarded as rents and revenue of the common property itself as distinct from profits which the defendant may have made by his use and occupation of the common property (e.g., fees for services and for use of items of equipment). Plainly, the identification of what properly constituted rents and revenue of the common property in that sense required further evidence as to the precise nature of the receipts of the business which the defendant carried on on the land and could involve disputed questions of fact and law. In the absence of agreement between the parties, the case should be remitted to the Supreme Court for the ascertainment of the relevant facts and the determination of any such disputed questions. The question of what outgoings should be allowed to the defendant on the taking of the account can only be resolved in the light of whether the appropriate order for an account embraced all or some only (and if so which) of the defendant's receipts from his activities on, and in respect of, the land. The question of outgoings also raises the question of what, if any,allowance should be made to the defendant in respect of expenditure on capital improvements. Senior counsel who appeared for the defendant on -29- the hearing of the appeal directed the attention of the Court to a number of passages in the evidence which are relevant to the determination of the entitlement of the defendant to an allowance for capital expenditure upon the taking of an account of rents and receipts received by the defendant from the joint property. The plaintiff gave evidence that there was no question in her mind that there was any danger that the lease would be forfeited by reason of a failure to comply with the covenant requiring the erection of buildings on the land for the reason that she knew that the defendant "would be continuing with improvements and so on". She added that, during her absence: "I was in constant contact with others in the Territory and I did know that improvements were being made and so on ...". She also gave evidence that it was the practice between the defendant and herself that "while one person was managing the property, living there, and the other was away, to use the funds to improve the property, and take care of maintenance, etc.". This evidence, which was largely left unexplored, plainly supported the inference that, if some "rents and profits" received by the defendant werc, as would seem likely, applied in the making of improvements, they were so applied with the authority of the plaintiff. If this were the case, the defendant was, on the taking of an account, entitled to an allowance for any "rents and profits" which had been so applied. There remains for consideration the question of the defendant's entitle- ment to any additional allowance in respect of his expenditure on improvements on the subject land. As a general rule, capital expenditure upon permanent ~30- improvements to land by one joint owner without the authority of his co-owner creates a passive equity which attaches to the land. The joint owner making the improvements is not entit- led to bring proceedings for contribution against his co-owner. In circumstances where his co-owner (or a successor in title of his co-owner other than a purchaser for value without notice) would otherwise unfairly benefit under an order in equity (includ- ing pariition or sale of the property), he is entitled to an allowance for his expenditure on such improvements to the extent to which they result in the present enhancement of the value (or the price on sale) of the land (see, generally, Leigh v. Dickeson L.R. (1884) 15 Q.B.D. 60; Williams v. Williams (1899) 81 L.T. (N.S.) 163; In re Jones, Farrington v. Forrester [1892] 2 Ch. 461; Brickwood v. Young (1905) 2 C.L.R. 387; Re Byrne (1906) 6 S.R. (N.S.W.) 532; McMahon v. The Public Curator of Queensland [1952] S.R. Qd. 197; Noack v. Noack [1959] V.R. 137 and D. Mendes da Costa, Co-Ownership under Victorian Land Law, 3 Melbourne University Law Review 137 at p. 138ff.). The operation of these principles, on a sale under the Partition Act, was succinctly stated by A.H. Simpson C.J. in Eq., in Bouite1 vy. Boulter (1898) XIX L.R. (N.S.W.) Eq., 135 at p. 137 in the following passage: "Where an owner of an undivided interest in tand spends money in tmproving the property so that on a sale under the Partition Act tt fetehes an enhanced price, a Court of Equity in dividing the proceeds of sale will not allow the other co-owners to take their shares of the tnereased price without making an allowanee for what has been expended to obtain thot tnereased value: LEIGH v. DICKINSON (ste). This course of aetton eannot infltet any injusttce on the other co-owners, for itt takes nothing out of their pockets, tt only prevents them putting into their pockets moneys obtained by the expenditure of another person, unless they recoup him such expen- Pee -31- diture. In no cause eun the co-owner who hus improved the property obtain more than his outlay, though such outlay may have trebled the value of the property. And, on the other hand, the tnerease in the price obtained is the limit of what he ean recetve, though hts actual outlay may be far targer", The applicability of this general rule was conceded, on the hearing, by counsel for the plaintiff and his Honour directed that there should be paid to the defendant from the proceeds of sale "that sum, if any, which is properly attributable to the improvements effected on the said land by the Defendant". It is clear, in the context of his Honour's reasons for judgment in which the above passage from Boulter v. Boulter (supra) is quoted with approval, that the order related to the amount by which the sale price could be seen to have been increased by the improvements effected by the defendant. No other order or allowance was made or directed in the defendant's favour in respect of his capital expenditure upon improvements. The evidence indicated that, on the basis of the orders made, the defendant would receive no allowance in respect of the major part of the money which he had spent on improvements on the subject land. A valuation which was placed in evidence by the plaintiff indicated that the total increment in value of the land as a result of the improvements did not exceed $15,000. It was, no doubt, for that reason thought unnecessary to limit the amount representing the increment in the price received to be allowed in the defendant's favour to the amount actually expended in effecting the improvements. Senior counsel for the defendant on the appeal expressly disclaimed any suggestion that the defendant was ~32- entitled to assert any independent claim for contribution to the cost of capital improvements beyond the amount which the learned judge ordered to be paid from the proceeds of sale. It appears from the evidence that, with the possible exception of any occupation fees received in respect of the hut erected by the plaintiff and subsequently improved by the defendant and in respect of the use of the site by caravans, any rents and profits received by the defendant in respect of the land were received as a consequence of the use of improvements effected by him. A question arises whether the equitable principles underlying the defendant's entitlement to a limited allowance from the proceeds of sale of his expenditure on improvements (to the extent that they result in an increased price on sale) are, in the circumstances of the case, also applicable to preclude the plaintiff from being entitled, upon accounts upon partition or sale, to receive a one half share of any rents and profits resulting from the use of the improve- ments without making a full allowance in favour of the defendant in respect of his expenditure upon those improvements. In my view those principles do so apply. In Leigh v. Dickeson (supra), at p. 67 Cotton L.J. explained the right of the co-owner to receive a limited allow- ance for capital expenditure upon sale or partition as follows: "in a sutt for a partitton it ts usual to have an inquiry as to those expenses of whtch nothing could be recovered so long as the parttes enjoyed their property in common; when it is destred to put an end to that state of things, it ts then necessary to consider what has been expended in improvements or repairs: the property held in common has been tnereased in value by the improvements and repairs; Nee ae ent Se neem -33- and whether the properly is dtvided or sotd by Lhe decree of the Court, one party cannot take the tnerease in value, without making an allowanee for what has been expended in order to obtain that inereased value; in faet, the execution of the repairs and tmprovements ts adopted and sanettoned by accepting the tnereased vatue". Again, in Swan v. Swan (8 Price 518 at p. 519), the Court of Exchequer Chamber similarily explained the right of one joint owner ("the Defendant") to such an allowance for capital expenditure against another joint owner ("the Plaintiff"): "Although, in point of law, the Defendant may not, strictly speaking, have any lten on the premises, yet tf he has been at expense tn improving them, as stated, benefictatly for the Platntiff, the Plaintiff has elearly no right to take advantage of that expenditure, without maktng any allowance;". (See, also, Attorney General v. Magdalen College, Oxford, 18 Beav. 223 at p. 255; 52 E.R. 88 at p. 100; Vyse v. Foster (1872) L.R. VIII Ch. App. 309 at pp. 336-337). In the present case, there is no suggestion that the plaintiff was excluded from the subject land against her will. She voluntarily left it in the occupation of the defendant in the expectation that the defendant would spend money on improvements and, by so spending it, preserve their joint leasehold interest in the land by complying with the covenant requiring the making of improvements. She was aware of the defendant's activities on the land and the fact that ne was effecting improvements and made no complaint in that respect. In the circumstances, the plaintiff is not entitled to a one half share of the rents and profits which the defendant received in respect of the subject land as a result of the use of the -~34- improvements which he had effected while denying the defendant's entitlement to an allowance in respect of their cost. In my view, she is, in the circumstances, only entitled voluntarily to adopt the benefit of the improvements by claiming and receiving one half of any profit resulting from their use at the price of being liable to contribute to, or make an allowance in respect of, their cost over and above the amount included in the restricted allowance to which the defendant was independ- ently entitled on partition or sale. If she accepts the benefit of the profit earned, she must bear her share of the burden of earning it. The case is of the type referred to by Sir William Brett, M.R., in Leigh v. Dickeson (supra), when he said at pp. 64-65; "Sometimes money has been expended for the benefit of another person under such cireumstances that an optton ts allowed to him to adopt or decline the benefit: tin this case, tf he exercises his optton to adopt the benefit, he witl be liable to repay the money expended; but tf he declines the benefit he will not be liable". In the result, the order for an account made by the Supreme Court should be set aside. In the absence of agreement between the parties as to appropriate orders, the matter should be remitted to the Supreme Court for the hearing of further evidence to enable the definition, with some precision, of the receipts and outgoings to be included and allowed on the taking of the account. In view of the concessions made by the plaintiff, any account ordered by the Supreme Court should be limited to the period of six years prior to 14 December, 1976 and the defendant should, on the taking of the account, be allowed an amount as recompense for his work and labour in | | -35- deriving any receipts included in the amount. The Supreme Court should determine whether any receipts to be included in the account ordered had been applicd to the making of improve- ments in accordance with a general arrangement between the plaintiff and defendant. If so the defendant should, on the taking of any such account, be entitled to an allowance in respect of any receipts included in the account which had been so applied. In the event that the plaintiff persisted in seeking an account of receipts which had been derived by the defendant as a result of the use of the improvements which he had effected, the orders made for distribution of the proceeds of sale should be varied so as to allow the full reimbursement of the defendant (to the extent that the proceeds of sale allow) of all expenditure upon capital improvements whose use has centributed to the receipts the subject of the account, to the extent that a credit for such expenditure had not already been allowed upon the taking of an account. In the circumstances of the case, the sale of the property should await the outcome of any such further hearing before the Supreme Court (but not the actual taking of the account) so that the respective rights and obligations of the parties might be sufficiently defined to enable each of them to make an informed decision on any questions which might arise on, or in relation to, any auction or other disposition of the joint property. At the conclusion of argument on the appeal, counsel for the partics informed the Court that, in the event that the Court came to the conclusion to which I have come as to the appropriate orders to be made for disposing of the appeal RTT Cn a a I a ete fan -~36- and that that conclusion was sustained in the event of an appeal from this Court, the parties were in agreement on orders which : | : . would, if made, 'avoid any need for the matter to be remitted to the Supreme Court. Those orders were reduced to writing by the parties as "Short Minutes of Proposed Orders". I would dismiss the appeal in so far as it relates to the orders for sale made by the Supreme Court and allow the appeal in so far as it relates to the order for an account. I would vary the orders made by the Supreme Court by substituting for them the orders set out in the Short Minutes of Proposed Orders submitted by the parties. U5 272 a piece Ge Ges = Cheyer teat das : ue ucry or the -uesons for dudgtosd heicin - a 'dts Honour My Justice Deane fects ASSOCIATI Dita oY 6-74