James v James [2017] NSWSC 1309

Supreme Court New South Wales

Medium Neutral Citation: James v James [2017] NSWSC 1309 Hearing dates: 25 September 2017 Date of orders: 25 September 2017 Decision date: 25 September 2017 Jurisdiction: Equity Before: Emmett AJA Decision: See paragraph [17] Catchwords: CONVEYANCING – orders under s 66G of the Conveyancing Act 1919 (NSW) Legislation Cited: Conveyancing Act 1919 (NSW), ss 66F, 66G, Pt IV Div 6 Cases Cited: Ngatoa v Ford (1990) 19 NSWLR 72 Williams v Legg (1993) 29 NSWLR 687 Category: Procedural and other rulings Parties: Geoffrey Reginald James (First Plaintiff) Peter Charles James (Second Plaintiff) Steven Robert James (Third Plaintiff) Jennifer Elizabeth James (Defendant) Representation: Counsel: B R Skinner (Plaintiffs)

Solicitors: Newnhams Solicitors (First to third Plaintiffs) Margiotta Solicitors (Defendant) File Number(s): 2017/90823

EX TEMPORE JUDGMENT 1. HIS HONOUR: These proceedings involve an unseemly dispute between three brothers and their sister. The plaintiffs are Mr Geoffrey James, Mr Peter James and Mr Steven James. The defendant is Ms Jennifer James. The four parties are the children of Clair James, who died on 15 March 2014. I shall refer to the parties by their first names, without intending any disrespect. 2. Jennifer was named as the executrix of Clair's will and probate of the will was granted to her on 1 December 2014. However, by orders made on 5 April 2016, Mr Gordon Salier, a solicitor, was appointed as trustee of Clair's estate in lieu of Jennifer. 3. Geoffrey, Peter, Steven and Jennifer are the registered proprietors of property known as 17 Keith Street, Clovelly (the Subject Property). The four became the registered proprietors of the Subject Property by transfer from their parents dated 2 March 1984. Jennifer presently resides in the Subject Property as her principal place of residence. 4. At the time of her death, Clair was the registered proprietor of property known as 19 Keith Street, Clovelly (the Adjacent Property). In due course the Adjacent Property will be sold by Mr Salier in the course of the administration of Clair's estate. 5. Geoffrey, Peter and Steven requested Jennifer to agree to the sale of the Subject Property. Originally they wanted to have the Subject Property sold in conjunction with the sale of the Adjacent Property. However, because that course was opposed by Jennifer, they have not sought to press it. 6. The application presently before me is for the appointment of trustees for sale of the Subject Property pursuant to s 66G of the Conveyancing Act 1919 (NSW). The effect of s 66G is that where any real property is held in co-ownership, the Court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees to be held by them on the statutory trust for sale. Under s 66F(2), property held upon the statutory trust for sale is to be held upon trust to sell the same and to stand possessed of the net proceeds of sale, after payment of costs and expenses, and of the net income until sale after payment of costs, expenses and outgoings, upon such trusts and subject to such powers and provisions as may be requisite for giving effect to the rights of the co-owners. 7. These proceedings were commenced by summons filed on 24 March 2017. However, there was little progress in the finalisation of the proceedings. On 2 June 2017, Darke J directed Jennifer to file and serve points of defence and any cross-claim by 23 June 2017. She did not do so. On 7 July 2017, Darke J extended the time for Jennifer to file any cross-claim to 21 July 2017. She did not do so. On 31 July 2017, I extended the time for Jennifer to file and serve any cross-claim and affidavits to 21 August 2017. Jennifer did not file any cross-claim or any other material indicating her opposition to the orders sought in the summons. The proceedings were fixed for hearing today on 11 July 2017. 8. When the matter was called on for hearing today, Jennifer made an application for adjournment of the hearing on a basis that is not entirely clear. At best it seems that she was intending to invite the Court to exercise some discretion in the exercise of the power conferred by s 66G but wanted more time to put on evidence in support of her opposition to the relief sought by her brothers. The only material relied on by Jennifer consisted of affidavits sworn today, which were not produced until well after the time fixed for the commencement of the hearing. They appear to direct attention to discretionary matters involving hardship or unfairness. 9. There is very little discretion open to the Court when an application is made under s 66G of the Conveyancing Act 1919 (NSW). There is no general discretion, it appears, to refuse an application on such grounds as hardship or unfairness. On the other hand, if an application under s 66G for the appointment of trustees for sale is shown to involve a breach of a fiduciary obligation or breach of trust or a breach of a contractual obligation on the part of the applicant, that may well be a basis for refusing to make orders under s 66G. [1] 10. Having regard to the history of the matter, I declined to adjourn the hearing of the proceedings. However, I afforded the parties the opportunity of discussing the terms of any appointment of trustees for sale. During the course of the day there was considerable communication between the legal representatives for the parties in open Court under the supervision of the bench. In particular, I endeavoured to assist the parties in reaching a compromise that could accommodate their concerns to the extent possible. As a result of that process, I formulated orders that are designed to achieve that end. 11. One area of disputation concerned the identity of the trustees originally proposed. The objection by Jennifer to the trustees who were originally proposed was not entirely clearly, although it was asserted that there was some conflict because one of the trustees proposed was Mr Salier, who is the administrator of Clair's estate. It was also suggested that the other proposed trustee had some familial relationship with the solicitors for Steven, Geoffrey and Peter. I therefore propose to appoint trustees other than those originally proposed in the summons. One of the trustees was nominated by Jennifer and the other was nominated by Steven, Geoffrey and Peter. Both have consented to act. 12. Some degree of common sense has now prevailed and although neither party has consented to the orders that I propose to make, I consider that the orders, which have been the result of considerable negotiations during the course of the day, are appropriate in all of the circumstances. 13. It is clear that the Subject Property should be sold. However, Steven, Geoffrey and Peter have made some concessions as to the timing of the sale, because Jennifer opposed the commencement of marketing before the end of November 2017. She also sought to have completion of any sale deferred so as not to occur until the end of February 2018. 14. Steven, Geoffrey and Peter complain that the Subject Property is in a state of disrepair. It is therefore appropriate that Jennifer be required to bring the Subject Property into a clean and presentable state and manner appropriate for an effective marketing campaign. Further, it is also appropriate that the trustees for sale and any selling agent appointed by them have reasonable access to the Subject Property to enable them to prepare it for sale and to prepare an appropriate sale and marketing campaign. 15. Steven, Geoffrey and Peter have not been entirely successful on their application. However, they have been put to the expense of commencing these proceedings in order to bring about the sale and realisation of their interest in the Subject Property. In the circumstances, they should have their costs of the proceedings. However, as a compromise I propose to make no order as to the costs of today. 16. Having regard to the difficulties that apparently exist between the three brothers, on the one hand, and their sister, on the other, it seems likely that there will be further disputation in the course of the next few months pending the sale of the Subject Property. I therefore propose to reserve liberty to the parties and the trustees and any other person claiming an interest in the Subject Property to apply on 5 days' notice with respect to any matter that might arise under the orders that I propose to make. It would be appropriate, if possible, that the application be made to me. That is not an invitation to any of the parties to make applications that are without substance. However, if some genuine difficulty arises between the parties, it is appropriate that there be provision for an application to be made to resolve any such difficulties. 17. For those reasons, I propose to make orders in the following terms: 1. Order that Steven Brotherson and Simon Cathro be appointed Trustees (the Trustees) for the sale of real estate at 17 Keith Street, Clovelly in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio Identifier 5/301996 (the Subject Property). 2. Order that the Subject Property vest in the Trustees subject to any encumbrances affecting the entirety thereof and free of any encumbrances affecting any undivided shares therein upon the statutory trust for sale created pursuant to Division 6 of Part IV of the Conveyancing Act 1919 (NSW). 3. Order that the Trustees be empowered to offer the Subject Property for sale by public auction with power to fix a reserve price, provided that completion of the sale will not take place before 28 February 2018. 4. Order that the Trustees have the sole conduct of the sale of the Subject Property and be authorised to instruct a licenced real estate agent for sale and, if necessary, an auctioneer, with the total commission payable not to exceed 2.5% inclusive of GST. 5. Order that the Defendant do all such things, acts and deeds to: (a) Cause the Subject Property to be brought to, and maintained in, a clean and presentable manner as required for the proper and effective marketing of the Subject Property; (b) Allow for an inspection of the Subject Property by the Trustees and any selling agent appointed by the Trustees on 48 hours' notice of a request being made; (c) Allow for an inspection of the Subject Property for purposes of marketing on 7 days' notice of a request made by the Trustees or any selling agent appointed by the Trustees; and (d) Give vacant possession of the Subject Property within 28 days of a request made by the Trustees, such request not to be given before 20 January 2018. For the purposes of this order, all costs associated with any works to be undertaken on the Subject Property will be met equally by the four parties. 6. Order that, within 21 days of the date of these orders the Defendant deliver up to the Trustees the original Certificate of Title Folio Identifier 5/301996, if it is in her possession. 7. Order the Trustees to retain a quantity surveyor to assess the value of improvements made by the Defendant since 15 March 2014, such report to be obtained by the Trustees on or before 27 November 2017. For the purpose of this order, the value of any improvements made and paid for by the Defendant be adjusted in favour of the Defendant in accordance with the report of the quantity surveyor. 8. Order that on completion of any sale of the Subject Property by the Trustees the settlement funds received on completion ("the sale proceeds") shall be distributed in the following order: (a) First, in payment of selling costs and expenses in connection with the sale of the Subject Property including selling agent's fees and commission, advising fees, auctioneer's fees, legal costs and disbursements in transferring the Subject Property into the names of the Trustees and Trustees' legal costs and disbursements associated with the sale; (b) Then in payment of any amounts owing in connection with the Subject Property for council rates, water rates, water usage and any other utility or statutory imposts including Capital Gains Tax, Land Tax and Goods & Services Tax (GST). (c) Then the remuneration and expenses of the Trustees in respect of the sale; (d) Then in payment of the costs of obtaining a report from a Quantity Surveyor and Valuer; (e) The then remaining balance of the sale proceeds be paid equally to the four parties, subject to any adjustment which follows from Order 7 above and Orders 9 and 10 below, with the amount calculated by reference to Order 12 to be deducted solely from the Defendant's share, along with the value of the market rent pursuant to Order 9 (subject to those funds received by the Defendant by way of rent and declared pursuant to Order 10). 9. Order that the Trustees forthwith instruct an appropriate property valuer to calculate and provide a valuation as to the market rent payable for the Subject Property from 15 March 2014 to date. 10. Order that the Defendant file and serve on the Plaintiffs and on the Trustees an Affidavit or Affidavits accounting for her dealings and management in respect of all monies disbursed by her, or any person on her behalf, in respect of all monies received by her from the rental of the Subject Property from 15 March 2014 to date, along with any outgoings paid or unpaid by her in relation to the Subject Property, including but not limited to water rates, council rates, penalties associated with late payments and any other utilities, within 21 days of the date of these orders. 11. Note the agreement of the parties that the Trustees for sale shall not commence to market the Subject Property for sale before 27 November 2017. 12. Order that the Defendant pay the Plaintiffs' costs of and incidental to these proceedings other than the costs of today. 13. Reserve liberty to the parties and the Trustees claiming an interest in the Subject Property to apply on 5 days' notice with respect to any other matter that may arise with respect to the above Orders, the sale of the Subject Property or distribution of the sale proceeds.