A trustee sale of a valuable ‘duplex’ in a prestigious oceanfront location descended into an argument over kitchen cabinets and a dishwasher or more precisely, whether they were automatically included as part of the sale or whether the buyer was required to pay extra for them.

fixtureIt was Philip Segal’s sixth Supreme Court stoush concerning co-owner Elie Barel over the North Bondi compound that enjoyed a spectacular Pacific Ocean outlook.

Barel – an electrician who assisted with construction on the site – lived with his family in a five level residence on the property for 10 years while the pair had been leisurely advancing the construction of a second home for Segal higher up on the lot, with a view to strata title subdivision.

Cooperation between them broke down and Barel’s proposed resolution was for the property be divided in two. Segal opposed the partition and called for trustees to be appointed to effect a sale of the entire block.

In what appeared would put an end to the acrimony, Dr Segal gained full ownership at the November 2013 trustee auction by bidding through an intermediary, Kathryn Gaffney.

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After several delays, Segal settled on the buy in March 2014.

Not only did the radiologist sue the solicitor trustees Michael Osborne and Margaret Hole for overcharging him at settlement by the cost of the cabinets and dishwasher, he claimed they must compensate him for the rent they neglected to collect from Barel during the months prior to settlement.

Justice Rowan Darke in the NSW Supreme Court agreed the trustees ought to have considered levying rent but in his view, the benefit foregone by that lapse was outweighed by the prospect of far greater expense in recovering the rent, were Barel – who was after all a co-owner who had never paid rent before – to refuse to pay.

Back now to the kitchen.

The cabinets – stacked on the floor awaiting installation as part of a kitchen island that was never built – were “plainly chattels, not fixtures” in the judge’s view.

Absent any unsightly “ascetic consequences” from the dishwasher’s removal, it too could not be considered a fixture and therefore also did not automatically form part of what was sold under the auction sale contract. The trustees were therefore entitled to ask for an additional payment for those items.

Segal – successful in the other court events leading up to the sale – suffered a loss on all arguments in the final episode of this bitter dispute although, given the history, a further appeal is not out of the question.

Segal v Osborne [2016] NSWSC 941 Darke J 07/07/2016  Read case


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