Supreme Court New South Wales Medium Neutral Citation: Hilton Myles v Hilton Peter Myles [2011] NSWSC 1184 Hearing dates: 07/10/2011 Decision date: 07 October 2011 Jurisdiction: Equity Division - Commercial List Before: McDougall J Decision: Judicial advice given. Order for removal of caveat. Catchwords: TRUSTS - trustee - application for judicial advice - whether trustee may sell property and deposit sale funds on trust with NSW Trustee for beneficiary in circumstances where legal interest in property was retained by mistake and beneficiary cannot be contacted for instructions - no question of principle. Legislation Cited: Trustee Act 1925 (NSW) Category: Principal judgment Parties: Hilton Myles (Plaintiff) Hilton Peter Myles (Defendant) Representation: Counsel: John Fitzgerald (Solicitor) (Plaintiff) Solicitors: John M Fitzgerald & Associates (Plaintiff) File Number(s): 2011/271122 Judgment - (EX TEMPORE) 1HIS HONOUR: The plaintiff (Mr Myles) is shown on the register as one of the joint proprietors of a parcel of land at Sefton in the State of New South Wales. There is a house erected upon that land. The house and land are in a state of disrepair. There is money owing to the local council for rates, and other money owing in respect of the property. 2Mr Myles is a TPI pensioner. He disclaims any beneficial interest in the Sefton land. The reasons why that is so can be simply explained. 3The joint owners of the Sefton land shown on the register are Mr Myles and his late former wife, Alma Rachael Myles. Mr and Mrs Myles were divorced in 1961. In 1973 they entered into a property settlement. Under that settlement, Mr Myles agreed to transfer his interest in the Sefton house to his former wife. He performed his obligations under that agreement by delivering to his former wife an executed form of transfer. For reasons that are unknown, the transfer was not registered but a caveat was lodged to protect Mrs Myles' interest in the property. 4Mrs Myles has died. Probate of her will was granted to her son, the defendant (who apparently was known to her as Peter Hilton Myles but whose birth certificate records his name as being Hilton Peter Myles). Under the proved will, the defendant is entitled to the whole of the deceased's Estate. 5In those circumstances, as Mr Myles acknowledges, he holds the whole of his legal interest in the property on trust for his son, the defendant. 6The difficulty is that the defendant cannot be located. Mr Myles is not in a position to continue to incur expense in relation to the property. He cannot pay the arrears of rates that have accumulated. He cannot pay for the necessary upkeep and maintenance. 7In those circumstances, the obvious course to take is for the property to be sold, for all the expenses of sale and other expenses incurred in respect of the property (including proper expenses incurred by Mr Myles for its upkeep and maintenance) to be deducted, and for the balance of the proceeds of sale to be transferred to the NSW Trustee and Guardian pursuant to s 47 of the Trustee Act 1925 (NSW). 8The NSW Trustee (I adopt the language of s 47) has indicated that it is able to receive and hold the net proceeds of sale due to the defendant. 9In substance, although not in form, this is therefore a summons for judicial advice under the Trustee Act . To the extent that there has been non-compliance with the formalities required by s 63 and the Rules, (for example, because there has been no statement of facts) I excuse that non-compliance. The affidavits that have been sworn by Mr Myles and his solicitor, Mr Fitzgerald, set out the relevant facts in full and clearly. 10For the reasons I have given, it is appropriate to give advice to Mr Myles to the effect that he would be justified in selling the property, to pay out all accrued expenses (including expenses properly incurred by him as trustee) and the costs of sale, and also to pay out from the proceeds of sale his costs, on the trustee basis, properly incurred in respect of the present proceedings. 11That having been done, it is appropriate to advise Mr Myles that he would be justified in transferring the net amount remaining to the NSW Trustee under s 47. 12If those steps are not taken, the property will continue to deteriorate. It will presumably be sold by the local council for unpaid rates. It is at least a possibility (I would have said, a very strong one) that a sale under those conditions, with the property having deteriorated further, is unlikely to realise anything like its true value. If anything is to be salvaged for the benefit of the son, the course that I have outlined is the way to do it. 13For those reasons, I make the following orders: 1. I direct that the plaintiff is at liberty to sell the property situate at and known as xx xxxxx xxxx Sefton by public auction for the best price reasonably obtainable. 2. I direct that the net proceeds of such sale, after payment of all the costs and expenses of sale, and of all amounts owing in respect of the property, and of all amounts properly expended by the plaintiff for the maintenance, upkeep and preservation of the property, be paid to the NSW Trustee and Guardian pursuant to s 47 of the Trustee Act 1925 to be held on trust for the defendant. 3. I order that the plaintiff's costs of these proceedings, on the trustee basis, be paid out of the trust estate and that they be deducted from the net proceeds of sale before payment to the NSW Trustee of the balance. (Mr Fitzgerald addressed.) 14As I mentioned in my reasons given a moment ago, there is a caveat lodged against the title to the property at Sefton. That caveat was lodged by the plaintiff's former wife, the late Mrs Myles. It claims an interest under the Deed of Settlement and transfer to which I also referred. That caveat will have to be removed before the sale, which I have directed may occur, can be completed. 15It would be open to the plaintiff to give a lapsing notice and then to follow that up. However, it seems to me to be pointless to put the plaintiff to that expense and difficulty when, clearly, execution of the orders that I have made will achieve the essential purpose of the caveat, namely, ensuring that the net value of the property will be held for the purposes of the trusts of the deceased's will. 16For those reasons, I am satisfied that it is appropriate to make an order that caveat number N xxxxxx lodged against the title to the property comprised in Certificate of Title Volume xxxx, Folio xx be withdrawn forthwith and I dispense with service of notice of the application for withdrawal of that caveat. 17I direct that these orders be entered forthwith. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 October 2011