Assisted by Francesca Zappia
In Myers v Clark (2018) NSWSC 1029, a divorced couple, Mr Clark and Ms Myers were disputing over two jointly owned properties. Ms Myers placed an application to the Supreme Court of NSW to appoint a trustee to sell the properties. Here, the Supreme Court refers to section 66G of the Conveyancing Act 1919 (NSW) to appoint and individual, known as a trustee, to sell property on behalf of the co-owners, with or without their consent. Although the couple divorced in 2002, they remained tenants in common for their properties, with Mr Clark residing in one of the properties with his second wife. Much to his dismay, the property was still sold without his consent due to section 66G of the Conveyancing Act 1919 (NSW) .
Section 66G of the Conveyancing Act 1919 (NSW), refers to ‘statutory trusts for sale or partition of property held in co-ownership, whereby the court appoints a trustee to sell a property where two owners are fighting between themselves.
Section 66G demonstrates the power to force the sale of a property whereby one or more of the co-owners of the property are uncooperative. Even when one or more parties’ objects to the selling of the property, Section 66G grants the power to disregard the parties and appoint a trustee to perform the act.
Itis important to note that once the property is sold, the amount accumulated from the sale is deposited into a trust whereby the monies from the sale of the property are then distributed amongst the co-owners of the property. The amount that is distributed to each co-owner is dependant upon their contributions to the property.
Although Mr Clark had greatly contributed to the properties, and in fact, paid mortgage repayments in lieu of child support, Ms Myer’s lawyers discovered that Mr Clark had been improperly using the funds from the mortgage loan account.
Section 66G gives the court discretionary power- demonstrating that each application for a statutory trust of sale of property is upheld on a case-by-case basis. However, there are some ground rules which establish the nature of discretionary power held by the courts. For example, applications usually accepted and orders are made to sell the properties unless the court believes it would be inequitable to do so. This includes when accepting an application would be disproportionate or unfair to one co-owner would not be a basis for inequality.
Therefore, the circumstance in which a court would refuse to grant an order under section 66G is limited. The Supreme Court of New South Wales has stated that an application to appoint a trustee would be denied only when it is ‘inconsistent with a proprietary right, or contractual or fiduciary obligation.
The Court’s Decision
- The court granted Ms Myer’s application to appoint a trustee to sell both properties.
- Due to Mr Clark’s improper use of the mortgage account and despite his claim of having a greater contribution to the properties, the court decided there would be equal shares of the sale proceeds.
- Ms Myer’s legal costs were to be paid from the sale and Mr Clark had to bear his own legal costs
- Section 66G of the Conveyancing Act 1919 (NSW) can be applied to sell properties without the approval of the co-owners.
If you have found yourself in the middle of a property dispute and require assistance, please do not hesitate to contact a member of Coleman Greig’s Property team, who would be more than happy to assist you.