Bakewell v Bakewell [2013] NSWSC 446

Supreme Court New South Wales

Medium Neutral Citation: Bakewell v Bakewell [2013] NSWSC 446 Hearing dates: 26 April 2013 Decision date: 01 May 2013 Jurisdiction: Equity Division Before: Sackar J Decision: The remaining sum of $47,000 be divided equally between the plaintiffs Catchwords: EQUITY - constructive trusts Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137 Byrnes v Byrnes [2012] NSWSC 1600 Muschinski v Dodds (1985) 160 CLR 583 Category: Principal judgment Parties: Sharon Bakewell - first plaintiff Susan Bakewell - second plaintiff Kerrie Bakewell - defendant Representation: Counsel: Plaintiffs self-represented M Langenheim - defendant Solicitors: No solicitors File Number(s): 2012/330105

Judgment

Background 1These proceedings concern a dispute between three sisters about the distribution of the proceeds arising from the sale of a property at 13 Springwood Street, Blackwall, New South Wales (the Property). The defendant, Ms Kerrie Bakewell, was the registered proprietor of the Property. At the time the Property was acquired, the Bakewell family was living in a property at Woy Woy. In order to acquire the Blackwall Property, a loan of about $143,000 was taken out in Kerrie's name from Residential Housing Corporation Pty Ltd, secured against the title of the Blackwall Property. However, shortly thereafter, the Woy Woy property was sold and the proceeds were used to pay off all but $1,000 of the loan. The Blackwall Property, at the time it was sold in late 2012, had registered against its title a mortgage in favour of Community First Credit Union Limited. 2The plaintiffs claim there was an agreement between themselves, the defendant and their parents (namely Barry Bakewell and Lorraine Morris) that the Property would be registered in the name of the defendant but would in equity be owned equally by the sisters in the family (there were initially four sisters, however one of the sisters, Cheryl Bakewell, died on 19 December 2007). 3The plaintiffs allege that after the death of their father, Barry Bakewell, on 12 August 2003, the defendant, without telling the plaintiffs, drew on the loan which was secured against the Property and used the funds thereby obtained for her own purposes. 4The second plaintiff is the attorney under power of the defendant (by a general power of attorney dated 15 August 2012), and in that capacity caused the Property to be sold for apparently $342,000, with contracts exchanged on 9 October 2012. The sale was said to be necessitated due to the non-payment of the loan from Community First Credit Union Limited. The settlement date of the sale appears to have been on or soon after 20 November 2012, and net proceeds appear to have been about $142,000. The net proceeds were placed in a trust account of Cleary Finlay Solicitors, who acted on the sale of the Property. The parties do not dispute that the amount owing to Community First Credit Union Limited pursuant to the mortgage registered on the title of the Property, plus the costs and expenses of the sale of the Property, should be first paid from the proceeds of sale before distribution of the proceeds. This has been done. 5However, the plaintiffs argued that the defendant has no remaining share in the Property because the amount used to discharge the mortgage to Community First Credit Union Limited was allegedly about $176,713.45, which they say is far in excess of the defendant's agreed share in the Property. 6The matter was initially listed before Stevenson J on 19 November 2012, the day before the settlement of the sale. His Honour granted an ex parte injunction, which was due to expire on 5pm on 22 November 2012, restraining the defendant from dealing with the net proceeds, and standing the matter over to 10am on 22 November 2012 before the Duty Judge in Equity. 7On 22 November 2012, Gzell J, the Duty Judge in Equity, ordered an extension of the injunction granted by Stevenson J until 5:00pm on 29 November 2012. On 29 November 2012, Gzell J further extended the injunction until 13 December 2012. On 7 December 2012 a mediation was scheduled to take place before Registrar Musgrave, but was terminated due to the defendant's non-attendance. 8The matter came before Hallen J on 13 December 2012. In the presence of the plaintiffs, the defendant was contacted by telephone and the parties were able to agree that from the net proceeds held by Cleary Finlay Solicitors, each of the plaintiffs would receive $40,000 and the defendant would receive $15,000. The balance of $47,000 remained and, as I understand, remains the subject of dispute between the parties. Hallen J ordered the defendant to put forward any claim she wished to make on the balance of the proceeds by 4:00pm on 31 January 2013, and that if no claim was made, the sum of $47,000 would be divided equally between the two plaintiffs. 9The issue before me is how the sum of $47,000 should be divided between the three parties to these proceedings. It is important to note that the plaintiffs assert that as a result of the family arrangements, there was a constructive trust under which the Property would be divided equally between the sisters.