Xie v Chan (No 2) [2022] NSWSC 1319

Supreme Court New South Wales

Medium Neutral Citation: Xie v Chan (No 2) [2022] NSWSC 1319 Hearing dates: 23 September 2022 Date of orders: 23 September 2022 Decision date: 23 September 2022 Jurisdiction: Common Law Before: Campbell J Decision: See [15] of Judgment Catchwords: LAND LAW – co-ownership – statutory trust for sale – powers of trustee – variation of orders Legislation Cited: Conveyancing Act 1919 (NSW), s 66G Real Property Act 1900 (NSW), s 86 Cases Cited: Abigroup Limited v Abignano (1992) 39 FCR 74; 112 ALR 497 Foundas v Arambatzis (No 3) [2020] NSWCA 87 Texts Cited: Nil Category: Principal judgment Parties: Jian Xi Xie (Plaintiff) Kwai Wan Chan (Defendant) Representation: Counsel: Mr Y Chen (For the Trustee) Mr A Zhou (Solicitor)(Plaintiff)

Solicitors: Ren Zhou Lawyers (Plaintiff) File Number(s): 2021/324061 Publication restriction: Nil

Extempore Judgment (Revised) 1. On 8 April 2022, I made orders under s 66G of the Conveyancing Act 1919 (NSW) that Mr David Wang, solicitor, be appointed as trustee of the subject property located at Second Avenue, Campsie for the purpose of a statutory sale. I made other orders to give effect to that order, and for establishing the terms and conditions of the trust. 2. At the hearing before me on 8 April 2022, there was no real concentration upon when possession should be delivered up to the trustee by the defendant, Ms Chan, who has remained in sole occupation of the property since the death of the survivor of two joint tenants of one half share with Ms Chan the owner of the other half share as tenant in common. Rather, I simply provided that possession was to be delivered up on or before the date fixed by any contract of sale of the property for completion. 3. The trustee, and the plaintiff, who is the executor named in the will of the surviving joint tenant, have applied for a variation of the orders I made and, in particular, for variation of the orders I made, being orders 4 and 5, dealing with the surrender and possession. 4. I have had the benefit of very helpful written submissions from Mr Chen of counsel who appears for the trustee, which are adopted and supported by Mr Zhou, solicitor, who appears for the plaintiff as before. I am well satisfied that I have the power to vary the orders made on 8 April 2022, by force of s 66G(6) which is in the following terms: In relation to the sale or partition of property held in co-ownership, the court may alter such statutory trusts, and the trusts so altered shall be deemed to be the statutory trust in relation to that property. I also reserved liberty to apply, and I accept Mr Chen's submission that it is apt to exercise that liberty for the purpose of making such further or additional orders as will facilitate the execution of the statutory trust: See Abigroup Limited v Abignano (1992) 39 FCR 74; 112 ALR 497 at [509] per Lockhart, Morling and Gummow JJ. 1. From the affidavits that have been read, being the affidavit of the trustee, Mr Wang, affirmed on 11 August 2022, and the affidavit of the plaintiff, Mr Xie, affirmed on 5 September 2022, I am satisfied that, regrettably, the defendant, Ms Chan, who has not appeared today, has been obstructive to such an extent that the attempts of the trustee to discharge the obligations of his office have been very effectively frustrated. 2. As I remarked in my judgment of 8 April 2022, it was obvious that Ms Chan was interested in exploring whether she could buy the remaining half share in the property, and she made an offer in that regard, according to Mr Wang (see affidavit at [9]). However, when Mr Wang attempted to initiate consultation on a formal basis with Ms Chan by letter dated 29 June 2022, he received no response from Ms Chan. And, indeed, he received no formal offer of purchase from her in response to that letter and, I infer, he has received no formal offer since. 3. There has been a further important development in the matter and that is to say that Ms Chan has continued her omission to pay the mortgage on the property which, in accordance with my findings made on 8 April 2022 are her responsibility. I infer from Mr Wang's affidavit that the mortgagee, who is now legally represented by Dentons Lawyers, has expressed a desire to exercise its power over their security having regard to Ms Chan's default. Mr Wang, as it were, has had to hold them off while he executes the obligations of his office. 4. It is obviously important that progress be made on the sale before the intervention of the mortgagee given the consideration that sale by mortgagee in possession, generally speaking, is likely to yield a poorer result than sale of the property in the usual way on the open market. Mr Wang has annexed to his affidavit the default notice and notice of exercise of power of sale that was issued by the mortgagee requiring compliance by 8 August 2022. 5. It is also the case that Mr Wang has consulted experienced real estate agents in the Campsie area who have expressed some pessimism about the sale price given the current condition of the property. The advice he has received is that prospects of a satisfactory sale would be enhanced if the property could be marketed without her occupation. 6. Mr Wang has also expressed the concern that given his dealings with the defendant, she is hostile, and he expresses the view that he has little confidence that she will make a satisfactory offer to buy. He doubts very much whether the defendant will co-operate by cleaning out the premises and permitting some cosmetic renovation to be carried out before sale. In his view, the defendant will not co-operate with open house arrangements if she remains in occupation. All of that evidence persuades me that a case for variation of the orders has been made out. 7. I should say that the consideration that Ms Chan enjoyed legal title to the property as a tenant in common is no bar to the Court making an order for possession with immediate effect in favour of the trustee. Although Mr Wang has yet to register the Court's order with the Registrar General, and I interpolate that step should be taken as soon as possible, that is no bar to me making an order of the type sought. As White JA pointed out, with the agreement of Bell P (as the Chief Justice then was) and Basten JA, in Foundas v Arambatzis (No 3) [2020] NSWCA 87 ("Foundas (No 3)"), the effect of the order I made on 8 April 2022 is to convert the plaintiff's legal title into a right to participate in the proceeds of the sale in accordance with the terms of the trust. His Honour said (at [11]): "Following the making of the orders appointing trustees for sale neither the applicant nor the first respondent had a beneficial interest in the land. Their rights were transformed into the right to see the trust for sale performed and to a share of the net proceeds of sale in accordance with their beneficial interests and subject to an account in equity (citation omitted)." His Honour also observed that whether or not the trustee has served a copy of the order of appointment on the Registrar General under s 86 Real Property Act 1900 (NSW), s 66G(7)(b) Conveyancing Act effected the transformation or conversion to which I have referred and Ms Chan's prior legal title "no longer supported a right to possession as against the trustee for sale" (see Foundas (No 3) at [15]). 1. The only question remaining is how long should be permitted for possession to be surrenderd. It seems to me, following discussion with Mr Chen, that an appropriate period of time is no more than 4 weeks but I would grant liberty to the trustee to obtain the issue of a writ of possession forthwith, not to be executed prior to the expiration of 28 days from today's date. 2. Mr Zhou also sought additional orders. He pointed out that additional fees had been incurred by the plaintiff, which may require some variation of the orders I made on 8 April concerning the division of the costs of sale between the plaintiff and defendant. I indicated to him after hearing his submission and I would certainly be of the view that the costs of this additional application ought to be borne solely by Ms Chan whose obstructionism, at least on the evidence before me, has necessitated the application and has been responsible for the delay. Mr Zhou indicated that he was content with a variation to give effect to that expression of opinion, and I will attend to that matter. 3. Finally, I should say that I am satisfied by the contents of exhibit A and exhibit B that were tendered before me at the commencement of today's hearing that Ms Chan has had reasonable notice of today's hearing, the nature of the relief sought and the variation of the commencement time from 10am to 2pm. I am satisfied that she has had a reasonable opportunity to appear today to resist the orders sought, had she so desired. Her non-appearance is entirely unexplained, but I am satisfied that there is no denial of natural justice by the hearing proceeding today, especially given the matters to which I have referred in this judgment requiring expedition in the execution of the statutory trust. 4. For those reasons, I make the following orders: 1. Pursuant to s 66G(6) of the Conveyancing Act 1919 (NSW), s 23 of the Supreme Court Act 1970 (NSW), r 36.13(3) Uniform Civil Procedure Rules 2005 (NSW) or otherwise, vary the orders made by his Honour Justice Campbell dated 8 April 2022 such that: (1) To insert, after Order 2, an Order 2A, which reads: "2A. Declare that the Trustee has a duty to obtain the best price for the Property and should take such proper advice as to whether or not the any cosmetic renovation(s) should be carried out, and, after complying with s 66H of the Conveyancing Act 1919 as to consultation, would be justified in acting on such advice." (2) Order 4 be varied to instead read: "4. Order that the Defendant to provide vacant possession of the Property to the Trustee or any agent appointed by the Trustee on or before 21 October 2022 ("the Vacate Date")." (3) The first line of Order 5 be varied to instead read: "5. Order that on or before the Vacate Date: …" (4) Order 6 be varied to instead read: "6. Liberty granted to the Trustee for the issue forthwith of a Writ of Possession for the Property, provided that such Writ is not to be executed on or before 21 October 2022." (5) Order 8 be varied such that, before the order, these words are inserted "Subject to Order 8A below,"; (6) After Order 8, to insert a new order 8A which reads: "8A. The Trustee's costs and the Plaintiff's costs associated with and incidental of the Trustee's Notice of Motion filed on 11 August 2022 and the hearing on 23 September 2022 be paid from the Defendant's portion of the proceeds." (7) To vary Order 9(a) such that the words "(subject to Order 8A)" are inserted after the words "Trustee's fees". (8) To vary Order 9(c) such that the words "(after paying the costs according to Order 8A above)" are inserted at the end of the order. (9) After Order 10, to insert Orders 11-14, which read: "11. Direct the Defendant to provide a contact address or contact email address to the Trustee and to the Plaintiff's solicitor. 12. Direct, if the Defendant does not comply with Order 11 above, then after the Vacate Date, with respect to any document which needs to be sent to or serve on the Defendant, the Defendant can be notified via text messages sent to 0426 991 958, along with a short description of the document and an address within the Sydney CBD from which the document can be collected during usual business hours. 13. Direct the Defendant to provide to the Trustee in a signed letter details of a bank account into which any proceeds can be paid to her, on or before the Vacate Date. 14. Direct, if the Defendant does not comply with Order 13 above, the Trustee to pay into Court any proceeds which would otherwise be paid to the Defendant." 1. Direct the Plaintiff to cause a sealed copy of the Court's orders dated 23 September 2022 be sent to the Defendant at Unit 7/3-9 Second Avenue, Campsie NSW via express post.