Sheahan v Cooper [1999] FCA 424

FEDERAL COURT OF AUSTRALIA

Sheahan v Cooper [1999] FCA 424

JOHN SHEAHAN Trustee of the bankrupt estate of Jillian Helen Marshall and the bankrupt estates of Richard John Cooper and Simon Vincent Cooper v NOELENE MICHELLE COOPER, JANET ETHEL COOPER, MARTIN JAMES COOPER, ANDREW CHARLES COOPER, ROTHMORE PTY LTD (ACN 007 956 327), AGRI-STEEL PTY LTD (ACN 083 806 179) and TENNYSON TURNER

SG 112 OF 1998

MANSFIELD J

ADELAIDE

1 APRIL 1999

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 112 OF 1998

BETWEEN: JOHN SHEAHAN

Trustee of the bankrupt estate of Jillian Helen Marshall

And the bankrupt estates of Richard John Cooper

And Simon Vincent Cooper

Applicant

AND: NOELENE MICHELLE COOPER

First Respondent

JANET ETHEL COOPER

Second Respondent

MARTIN JAMES COOPER

Third Respondent

ANDREW CHARLES COOPER

Fourth Respondent

ROTHMORE PTY LTD (ACN 007 956 327)

Fifth Respondent

AGRI-STEEL PTY LTD (ACN 083 806 179)

Sixth Respondent

TENNYSON TURNER

Seventh Respondent

JUDGE: MANSFIELD J

DATE: 1 APRIL 1999

PLACE: ADELAIDE

REASONS FOR DECISION HIS HONOUR: 1 I have before me a notice of motion of 31 March 1999 of the fourth respondent for orders under s 74 of the Law of Property Act 1936 (SA) directing the applicant to sell to him certain property within a specified period. 2 On 8 March 1999 I gave judgment and published reasons in this matter generally, including reasons for an order made under s 74 of the Law of Property Act. The fourth respondent was given twenty-one days within which to purchase Rothmore Farm, as it is defined in those reasons, for $1,208,673, subject to normal adjustments and upon other terms specified in those reasons. 3 The order so made at the time was in the nature of a consent order. I accept, for the purposes of this motion, that at the time, the fourth respondent and the seventh respondent were under the belief that the purchase price specified under any order made under s 74 would be in the order of $800,000. It is plain that the applicant, on the other hand, regarded the purchase price to be specified as likely to be in the order of the figure I fixed in that decision, and further was of the view that funds were available to the fourth respondent to enable him to purchase Rothmore Farm for that amount, namely $1,208,673. However, the applicant's acquiescence to the order so made was not specifically upon that understanding and the fourth respondent's request for such an order was not expressed to be conditional (as it is now said to have been) upon the purchase price being much lower than that determined. There was no qualification expressed on the level of funds available to support any purchase. The settlement time fixed in the order, namely twenty-one days, also had regard to the apparently shared understanding that funds to effect the purchase were available. 4 I now conclude that, contrary to my own view, there was not a shared understanding that funds were or would be available to the fourth respondent to purchase Rothmore Farm for a figure in the order of $1.2 million. I do not intend any criticism of any party in reaching that view. In those circumstances, I do not think it appropriate now to extend the order in the terms sought in the motion of 31 March 1999. The foundation upon which it was first made is now shown not to be continuing, and probably did not then exist. 5 Alternatively, I have been asked to permit the applicant to sell Rothmore Farm to the fourth respondent for that sum and, otherwise, upon the same terms previously fixed within a further period of twenty-eight days from today's date. I am disposed to accede to that request. It carries no downside to the applicant. It simply empowers him to enter into such a transaction if he thinks it appropriate to do so. Bearing in mind the relatively limited period of time since the order was first made, the amount involved, the time and expense which would be involved in preparing and presenting Rothmore Farm for sale in some other way, and the cost if such a sale were to take place, I am satisfied that if the applicant were to sell Rothmore Farm to the fourth respondent upon the terms otherwise specified and within that period, he would be acting properly. That is, of course, subject to any additional information becoming available to the applicant which causes him to form a different judgment about the proposed price of $1,203,673 being an appropriate one. If such information becomes available to him, he will not be obliged to accept any offer from the fourth respondent in those terms. The applicant or the fourth respondent may wish to come back to the Court to see whether some other order under s 74 should be made, if that circumstance arises. 6 I propose therefore to make an order to give effect to that consideration. It will obviate the need of any further application under s 74 if, as the fourth respondent's material now indicates, it is likely that he will be able to settle the purchase of Rothmore Farm for the figure nominated and upon the terms otherwise specified. 7 I propose to allow an additional period of time of seven days beyond the twenty-eight days to enable that to occur, if it is in the judgment of the Trustee appropriate to do so. I do not vary the orders which I made on 8 March 1999, as varied previously on 26 March 1999. I make a fresh order on the motion which will be in the following terms: 1. That John Sheahan as Trustee of the bankrupt estate of Jillian Helen Marshall and of the bankrupt estates of Richard John Cooper and Simon Vincent Cooper ("the Trustee") may sell or may offer for sale to the fourth respondent the land known as Rothmore Farm and being the land comprised in Certificates of Title Register Books Volume 3323 Folio 1, Volume 4384 Folio 117, Volume 4214 Folio 545 and Volume 3322 Folio 200 and in Crown Lease Register Books Volume 543 Folio 89, Volume 541 Folio 90, Volume 545 Folio 9 and Volume 658 Folio 95 (together called "Rothmore Farm" but excluding the interest therein of the fourth respondent and the third respondent) upon the conditions (i) that the Trustee sell and the fourth respondent pay for those interests in that land in the sum of $1,208,673.00 subject to any normal adjustments for rates and taxes and other outgoings to settlement (ii) that the fourth respondent settle the sale and purchase of that land within thirty-five days of the date of this order (iii) that the Trustee is satisfied that the source of the funds to be used by the fourth respondent in the purchase of that land is not funds to which the Trustee otherwise claims to be entitled in Action No. SG 3019 of 1998 in this Court by reason of the claim by Rothmore Farms Pty Ltd (In Liquidation) of which the Trustee is liquidator to the assets and funds made available to the fourth respondent by the vesting of the Jill Cooper Family Trust and otherwise upon the terms specified in pars 3, 5, 6 and 7 of the order made on 1 December 1998. 2. That if the fourth respondent purchases Rothmore Farm in accordance with par 1 hereof, the proceeds of that sale be distributed in accordance with the terms of par 3 of the order made on 8 March 1999. 3. That the Trustee may sell or offer for sale to the fourth respondent Rothmore Farm other than the land in Certificate of Title Register Book Volume 3322 Folio 200 (the sanctuary land) for $1,098,405 (but excluding the interest therein of the fourth respondent and the third respondent) and otherwise upon the terms set forth in par 1 of this order. 4. That if the fourth respondent purchases Rothmore Farm, excluding the sanctuary land, in accordance with par 3 hereof, the proceeds of that sale be distributed to the persons or interests specified and in accordance with the percentages of the full value of Rothmore Farm including the sanctuary land specified in par 3 of the order made on 8 March 1999. The intent is that the total amount of the proceeds of sale to the fourth respondent of Rothmore Farm and of the proceeds of sale of the sanctuary land pursuant to par 4.1 of the order of 8 March 1999 and distributed in accordance with par 6 of that order shall be the same amounts (subject to settlement adjustments) as the amounts specified in par 3 of that order. 8 Paragraphs 3 and 4 permit the Trustee to sell the sanctuary land separately, if in his judgment it is appropriate to do so. I have adjusted the price then payable by the fourth respondent, to reflect the sale of the sanctuary land for $120,000 to which has been added back the proportion of that sum to which the fourth respondent and the third respondent are entitled. 9 I order that the fourth respondent pay the applicant's costs of this motion to be taxed. I will otherwise adjourn the motion to a date to be fixed with liberty to apply on three days' notice. I fix that period so that, if the circumstance arises, the Trustee will have a sufficient opportunity to file material to explain why he does not, in his judgment, accept an offer from Andrew Charles Cooper in the amount contemplated. I direct the solicitors for the fourth respondent to prepare minutes of order for settling. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.