Goldberg v Goldberg [2000] NSWSC 399

New South Wales Supreme Court

CITATION : Goldberg v Goldberg [2000] NSWSC 399 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1065/2000 HEARING DATE(S) : 03/05/2000 JUDGMENT DATE : 3 May 2000

PARTIES : Harold John Goldberg (P) Leon Goldberg (D) JUDGMENT OF : Young J

COUNSEL : D R Stack (P) S Torrington (D) SOLICITORS : Conway MacCallum (P) Leon Goldberg (D) CATCHWORDS : Real Property [314]- Partition- Sale- Property requiring demolition work before sale- Duties of trustees. LEGISLATION CITED : Conveyancing Act, 1919, ss 66G, 66H CASES CITED : Dixon v Roy (1991) 5 BPR 11,655 DECISION : See paras 10-14

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG J WEDNESDAY 3 MAY 2000

1065/00 - HAROLD JOHN GOLDBERG v LEON GOLDBERG

JUDGMENT

1 HIS HONOUR: This is an application under s 66G of the Conveyancing Act 1919, for the appointment of trustees for sale of jointly owned property at Vaucluse. The property is owned by two brothers, having passed to them from the estate of their mother. The plaintiff is desirous of selling the property. The relationship between the brothers has been such that at least up until recently they have not been able to agree on a sale. 2 There is now a letter from a firm of solicitors to suggest that they have a client who is interested in buying the property and has put a holding deposit on in an endeavour to secure some rights to it. Just what the price and terms and conditions are and whether they are acceptable to both parties does not emerge. 3 The authorities on s 66G say that the court has only a limited discretion as to whether to refuse an order under the section and that, apart from an out of the ordinary case, the court usually makes an order for sale on the request of the plaintiff. 4 There is no suggestion here that any particular trust or equitable obligation prevents an order from being made. Indeed the evidence suggests that the property needs to be sold (partition is not an option) as it is in want of repair and is subject to considerable debts for rates and land tax. 5 Mr Torrington, who appears for the defendant, did not call evidence, but he submitted that it was really a waste of time putting in trustees for sale because the property could be sold without the intervention of trustees but, if trustees were appointed, they should be people other than long acquaintances of the plaintiff. 6 However, so far as the first point is concerned, there is every indication the trustees will be needed to effect a sale. The mere fact that there is a prospective purchaser in the wings is good news, but is not necessarily conclusive that there will be a sale on terms and at a price satisfactory to both parties. In any event, as the people who have been put forward by the plaintiff have offered to carry out the procedure without charge, the prejudice in putting in trustees is relatively small. The evidence is that the property is worth at least $5 million, so the relatively small amount of administrative expenses involved is not a matter which could dissuade me from appointing trustees. 7 Mr Torrington's other point has some weight to it. The people the plaintiff seeks to have appointed as trustees are acquainted with the plaintiff and there is bad blood between the plaintiff and the defendant. However, with a property of this value the commission for independent trustees is very great. Further, the defendant is a solicitor who is well aware of his rights and the obligations of trustees. I feel sure that the trustees know that they will have to cross every 't' and dot every 'i' as they go about their business. Accordingly, I believe I should appoint the trustees put forward by the plaintiff. 8 Two other matters arise. The first is whether the trustees should have power to demolish the existing structures on the property. The photographs Exhibit PXO1 indicate that something has to be done and there is evidence that the property might fetch $1 million less unless there is demolition. However, trustees for sale appointed under s 66G of the Conveyancing Act, 1919 have all the ordinary duties and obligations of trustees: Dixon v Roy (1991) 5 BPR 11,655. The trustees have a duty to get the best price. They also have a duty to make appropriate enquiries and take expert advice and to act on it if they consider that appropriate. Furthermore, under s 66H, the trustees have a duty, so far as consistent with the general interest of the trust, to consult the co-owners. I think the proper order is to declare that the trustees have those rights and duties rather than make an order for demolition. 9 Secondly, so far as costs are concerned, Mr Stack for the plaintiff has asked that the defendant pay the cost of these proceedings. That is not an order made in this type of proceedings because, as in ordinary partnership cases, the court takes the view that when parties have entered into a co-venture, even an involuntary co-venture such as being joint beneficiaries under a will, the costs of winding up the co-venture should be borne equally. Accordingly, apart from the costs that were reserved by Windeyer J on 27 April 2000, which I think the defendant should pay, the costs of both parties should come out of the proceeds of sale of the property. 10 I make orders 1 and 2 in the summons. I make orders 4(a), (b) and (c). I make new 4(d): The costs of both parties, as assessed or agreed, other than the costs of 27 April 2000. I make 4(e) as per original 4(d) of the summons. 11 I order that the defendant pay the plaintiff's costs of 27 April 2000. 12 I declare that the trustees have a duty to obtain the best price for the property and should take such proper advice as to whether or not the existing structures on the land should be demolished or not, and, after complying with s 66H of the Conveyancing Act 1919 as to consultation, would be justified in acting on such advice. 13 I reserve liberty to apply and further consideration. 14 Exhibits PX01 and DX05 may be returned: other exhibits to remain with the papers. ****************