Victorian Bills Explanatory Memoranda Victorian Bills Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
Property (Co-ownership) Bill
Introduction Print
EXPLANATORY MEMORANDUM
Clause Notes
Clause 1 sets out the purposes of the Act. The purposes of the Act are
to--
· provide for the transfer of jurisdiction for co-ownership
disputes from the Supreme and County Courts to the
Victorian Civil and Administrative Tribunal (VCAT);
· set out the remedies available to determine these
disputes; and
· consequentially amend the Victorian Civil and
Administrative Tribunal Act 1998 and the Transfer
of Land Act 1958.
Clause 2 provides for the commencement of the Act. The Act will come
into operation on a date or dates to be proclaimed with a default
date of 1 July 2006.
Clause 3 provides that the application of section 187 of the Property Law
Act 1958 (PLA) is limited. Section 187 of the PLA deals with
the power to direct the division of chattels. Chattels are goods
that are not affixed to land (eg: a car, white goods, jewellery, a
boat or caravan). Section 187 gives a tenant in common with a
half or greater share in any chattel the right to make application
to the Court for an order for the division of the chattel and the
Court may make orders or give directions as it sees fit.
Clause 3 amends section 187 of the PLA to insert a new
section (2) and (3). The new sub-section (2) provides that if the
chattels that are the subject of an application are goods that come
within the meaning of Part IV of the PLA the person must make
application under Part IV. The effect of sub-section (2) is to
remove jurisdiction over disputes between co-owners over certain
types of chattels from the Supreme Court and County Court and
give jurisdiction to VCAT. The new sub-section (3) provides
that it is the intention of the new sub-section (2) to alter or vary
the jurisdiction of the Supreme Court.
1
551343 BILL LA INTRODUCTION 13/9/2005
Clause 4 inserts a transitional provision relating to the amendments to
section 187. New section 187A provides that section 187
continues to apply in respect of any proceeding commenced in
the Supreme or Court Courts immediately before the
commencement of clause 3 of this Act as if section 187 had not
been amended.
Clause 5 inserts a new Part IV to replace the existing Part IV of the PLA.
The purpose of the new Part IV is to provide a statutory
mechanism for terminating the co-ownership of land and goods
when the co-owners fail themselves to agree on the manner in
which the co-ownership should be terminated or a co-owner can
not agree to sell because he or she is not an adult or lacks legal
capacity.
PART IV--CO-OWNED LAND AND GOODS
Division 1--Preliminary
New section 221 provides that the new Part will apply to all land
in Victoria, whether or not the land is registered under the
Transfer of Land Act 1958. This means that the new Part IV
will apply to land registered under the Torrens System and
"general law" land.
New section 222 sets out the definitions used in the new Part IV.
The terms defined are "co-owner", "goods", "land" "property"
and "security interest".
New section 223 provides that nothing in this Part prevents the
severing of a joint tenancy by any other means that exist under
this Act or any other Act or law. While this Part provides for
severance pursuant to an order of VCAT there remains other
means by which a joint tenancy can be severed. For example,
severance can still occur with the consent of the co-owners or
pursuant to other legislative mechanisms such as Part IX of the
PLA.
New section 224 provides that despite anything to the contrary in
a security interest (eg: mortgages, charges) the severing of a joint
tenancy does not constitute a breach of the covenants or terms of
the instrument creating the security interest and does not affect
any existing powers, rights or interests of the holder of the
security interest.
2
Division 2--Sale and Division
New section 225 provides that a co-owner of land or goods may
apply to VCAT for an order for the--
· sale of the land or goods and the division of the
proceeds between the co-owners;
· the physical division of the land or goods between the
co-owners; or
· a combination of the first two options.
New section 225(3) requires a person making an application to
VCAT to give notice of the application to the holder of a security
interest over land or goods to which the application relates.
New section 226 sets out that in addition to any other parties, all
co-owners of the land or goods to which the proceeding relates
are parties to the proceeding in VCAT. Sections 59 and 60 of the
Victorian Civil and Administrative Act 1998 also deal with
parties to proceedings before VCAT.
New section 227(1) provides that VCAT can adjourn the
proceedings at any time before VCAT has made the final order if
proceedings in relation to the property of a co-owner are
commenced under the Family Law Act 1975 or Part IX of the
PLA. Part IX of the PLA deals with the division of property on
the breakdown of a domestic relationship. Under section 227(2)
VCAT can adjourn an application to permit a co-owner of
property to commence proceedings under the Family Law Act
1975 or Part IX of the PLA. This provision ensures that if a
co-ownership dispute comes before VCAT and during the course
of the proceedings it becomes clear that proceedings should have
been commenced under the Family Law Act 1975 or Part IX of
the PLA, the proceedings may be adjourned.
Section 227(3) provides that nothing in this section will limit the
power of VCAT to grant or refuse an adjournment in relation to
the proceeding before it.
New section 228 sets out the remedies available to VCAT in
making an order under this Division. VCAT can make any order
it thinks fit to ensure a just and fair sale or division of land or
goods occurs. Without limiting these powers VCAT may
order--
· sale of the land or goods and the division of the
proceeds between the co-owners;
3
· the physical division of the land or goods between the
co-owners; or
· a combination of the first two options.
New section 229 provides that the sale and division of proceeds
is to be the preferred option unless VCAT considers that it is
more just and fair to order one of the other two options listed
above. In determining whether either of the other two options
would be more just and fair VCAT must take into account--
· the use being made of the land or goods;
· whether the land is, or goods are, able to be divided and
the practicality of dividing the land or goods;
· any particular links with or attachment to the land or
goods, including whether the land or goods are unique
or have a special value to one or more of the co-owners.
However, these factors do not limit the matters that VCAT may
consider.
New section 230 provides that if VCAT considers it just and fair
it may make an order varying the entitlements of the co-owners
to land or goods. VCAT may also order the compensation be
paid to compensate for the differences in value resulting from the
variation.
New section 231 provides for the appointment or removal of
trustees by VCAT in any proceeding if VCAT thinks is necessary
or desirable. In an order appointing trustees VCAT may direct
the trustees in relation to the sale of the land, the distribution of
proceeds of sale or, in proceedings involving division, the
manner in which the division is to be carried out. VCAT also has
the power to make an order for the remuneration of any trustee
appointed for the purposes of the sale or division of the property.
New section 232 sets out the other matters that VCAT may order.
For example, in the case of an auction, VCAT may set the
reserve price or order that the sale is to be completed within a
specified time. In addition, new section 232(i) provides that
VCAT may, in a case involving land, order any necessary deed or
instrument be executed and documents produced or other things
be done that are necessary to enable an order to be carried out
effectively. VCAT can also direct the Registrar of Land Titles to
make amendments to the Register or do any act or make any
recordings necessary to give effect to an order under this
Division.
4
New section 233(1) provides that VCAT may order--
· the compensation or reimbursement be paid or made by
a co-owner to another co-owner or other co-owners;
· that one or more co-owners account to another co-owner
in accordance with section 28A;
· that an adjustment be made to a co-owner's interest in
the land of goods to take account of amounts payable by
co-owners to each other.
In determining whether to make an order under section 233(1)
VCAT must take into account a variety of factors listed in
section 233(2) including any amount that a co-owner has
reasonably spent in improving the land or goods. Section 233(3)
provides that VCAT cannot make an order requiring a co-owner
who has occupied land to pay an amount equivalent to rent to a
co-owner who did not occupy the land except in the
circumstances specified in the section. Similarly, section
234A(4) provides that VCAT must not make an order requiring
a co-owner, who has used goods, to pay an amount equivalent
to rent to a co-owner who did not use the goods except in the
circumstances specified. Section 233(5) provides that this
section is to apply despite any law or rule to the contrary.
Division 3--Accounting
New section 234 provides that a co-owner may apply to
VCAT for an order under this Division for an accounting in
accordance with section 28A of the PLA. Section 28A deals
with the liability of a co-owner to account to other co-owners.
An application under section 234 can be made whether or not
an application is made for the sale or division of land.
New section 234A sets out that in addition to any other parties
all co-owners to the land or goods to which the proceeding
relates are parties to the proceeding. Sections 59 and 60 of the
Victorian Civil and Administrative Tribunal Act 1998 also
deal with parties to a proceeding.
New section 234B sets out what VCAT can order in proceedings
for an accounting.
5
Division 4--Jurisdiction
New section 234C excludes the jurisdiction of the Supreme and
County Courts to hear an application under Part IV unless--
· the matter which is the subject of the application relates
to a proceeding under--
· Part IX of the PLA (division of property on the
breakdown of a domestic relationship); or
· Part IV of the Administration and Probate Act
1958 (testator family maintenance claims); or
· the Partnership Act 1958; or
· in any proceeding which has commenced in the
Supreme or County Courts the issue of co-ownership of
land or goods arises in the course of that proceeding; or
· in the opinion of these Courts special circumstances
exist which justify the Courts hearing the application.
The phrase "special circumstances" is defined for the
purposes of this section as--
· the matter which is the subject of the application
is complex; or
· the matter which is the subject of the application,
or a substantial part of that matter, does not fall
within the jurisdiction of VCAT.
VCAT does not have jurisdiction to hear an application where the
subject of the application relates to Part IX of the PLA, Part IV of
the Administration and Probate Act 1958 or the Partnership
Act 1958.
New section 234D provides that, without limiting the powers of
any court to make orders, where a court has jurisdiction over any
proceeding in relation to the co-ownership of land or goods a
court may make any order that VCAT could make under this
Part.
New section 234E provides that nothing in this Division prevents
VCAT from referring a matter to the Supreme Court or the
County Court under section 77 of the VCAT Act. Section 77
allows VCAT to refer a matter to where it considers that the
subject-matter of the proceedings would be more appropriately
dealt with by a different tribunal, a court or any other person or
body.
6
New section 234F provides that nothing in this Division affects
the operation of the appeal provisions in Part 5 of the Victorian
Civil and Administrative Tribunal Act 1998. A party to a
proceeding at VCAT may appeal an order, on a question of law
to the Court of Appeal, if VCAT was constituted for the purpose
of making the order by the President of a Vice President or to the
Trial Division of the Supreme Court in any other case.
New section 234G provides that it is the intention of section
234C to alter or vary section 85 of the Constitution Act 1975.
Division 5--General
New section 234H sets out the power to make regulations under
this Part.
New section 234G is a transitional provision. This section
provides that old Part IV will continue to apply to any
proceedings commenced under this Part before the
commencement day of the new part IV as if Part IV of the PLA
had not been amended by this Act.
Clause 6 is a consequential amendment to Schedule 1 to the Victorian
Civil and Administrative Act 1998. This amendment provides
that in a proceeding under Part IV of the PLA, VCAT must be
constituted by at least one member who in the opinion of the
President has knowledge or experience in property law matters.
Clause 7 is a consequential amendment to sections 103, 104 and 116A of
the Transfer of Land Act 1958.
The effect of the amendments to section 103 and 104 is to ensure
that VCAT has the same powers as the Supreme Court to direct
the Registrar to make alterations to the Register and require the
production of documents in relation to proceedings under Part IV
of the PLA.
The amendment to section 116A gives VCAT the power to
deal with a situation where a party has failed to comply with a
requisition by the Registrar of Titles to produce a document.
In particular, VCAT may order the Registrar to cancel a folio
(which is the original record of title now kept on the electronic
register at Land Registry) and create a new folio and a new
certificate of title (which used to be called the duplicate
certificate of title).
7