What is section 66G of the Conveyancing Act 1919 (NSW)?

Section 66G of the Conveyancing Act 1919 (NSW) deals with the appointment of trustees for sale in situations where property is held in co-ownership and the co-owners cannot agree on the sale of the property. This section allows one or more co-owners to apply to the Supreme Court of New South Wales for the appointment of trustees to sell a property or properties. The trustees manage the sale process, ensuring a fair and equitable outcome for all parties involved.

Key points and details

Here are some key points and details about Section 66G:

1. Purpose: The primary purpose of Section 66G is to provide a legal mechanism for resolving disputes among co-owners regarding the sale of jointly owned property.
2. Application: Any one or more of the co-owners can apply to the Supreme Court of NSW for the appointment of trustees for sale. This application is typically made when co-owners are unable to reach an agreement on selling the property. The co-owners will each suggest to the court appropriate orders tailored to the situation, and the court will make its own determination on orders.
3. Trustees for Sale: Once appointed by the court, the trustees take over the responsibility for the sale strategy and the sale process. The trustees’ role includes setting a fair market price after valuation, engaging an agent to market the property and overseeing the completion of the sale.
4. Court’s Discretion: The court has discretion in appointing the trustees and will consider factors such as the interests of all co-owners, the value of the property, and any other relevant circumstances.
5. Proceeds Distribution: After the sale, the proceeds are distributed among the co-owners according to their respective shares in the property, after deducting any sale expenses and the trustees’ fees.
6. Legal Process: The process under Section 66G involves legal procedures and court hearings, where each co-owner’s interests and arguments are heard and considered by the court before trustees are appointed.
7. Benefits: Section 66G provides a structured and impartial method for resolving disagreements among co-owners, ensuring that the sale of the property proceeds fairly and efficiently, even in contentious situations.

Our firm will supply Trustees, and also, suggest a lawyer if you do not already have a lawyer for a Section 66G application.

Case studies

Case Study 1: Family Dispute

Background: Sarah and Michael inherit a family home from their deceased parents. They initially agree to sell the property, but disagreements arise over the sale price and timing.

Application of Section 66G: Sarah files an application under Section 66G with the Supreme Court of NSW, seeking the appointment of trustees. The legislation stipulates trustees rather than trustee.  Sarah argues that Michael is delaying the sale process and not cooperating in setting a reasonable sale price. We consent to act as Trustees.

Outcome: The court reviews the evidence presented by Sarah and Michael. Considering the deadlock between the co-owners and the need to resolve the matter swiftly, the court appoints two trustees from our firm. The trustees listen to the parties, consider the orders of the court, select an agent and strategy for sale, obtains a fair market value, and oversees the sale. After deducting expenses and the trustees’ fees, proceeds are distributed to Sarah and Michael according to their ownership shares.

Case Study 2: Investment Property Dispute

Background: John and Jane jointly own an investment property as tenants-in-common. Jane wants to sell the property to reinvest in another opportunity, but John wants to retain ownership.

Application of Section 66G: Jane applies to the Supreme Court under Section 66G, arguing that John’s refusal to sell is hindering her financial plans and causing financial strain. We consent to act as trustees.

Outcome: The court considers the evidence and determines that John’s refusal to sell is unreasonable and detrimental to Jane’s interests. Trustees for sale are appointed by the court. The trustees sell the property at market value and distributes the proceeds after deducting expenses. John receives his share of the proceeds, and Jane reinvests her share as planned.

Case Study 3: Co-ownership Dispute in Commercial Property

Background: Peter and John jointly own a commercial property used for their business operations. They have a falling out over business decisions and are unable to agree on continuing to operate from the property.

Application of Section 66G: Peter files an application under Section 66G, arguing that John’s actions are jeopardising the business and that the property should be sold.

Outcome: The court reviews the evidence and finds that Peter’s concerns are justified. Trustees are appointed by the court. The Trustees facilitate the sale of the property, ensuring both Peter and John receive their respective shares of the sale proceeds.

Process to Obtain Orders under Section 66G

Getting the court to agree to appoint trustees for sale under Section 66G of the Conveyancing Act 1919 (NSW) involves a legal process that requires careful consideration and justification. Here’s an outline of the process:

(1) Application: One or more co-owners (applicants) file an application with the Supreme Court of New South Wales. The application must include:

• Details of the property in question.
• Reasons why the appointment of a trustee for sale is necessary (eg inability to reach agreement, deadlock).
• Evidence supporting the need for a trustee appointment (eg communications showing disagreements, attempts at resolution).
• Consent from proposed Trustees, if any. Call us.

(2) Court Proceedings: The court will schedule a hearing to consider the application. At the hearing:

• Both parties (co-owners) may present their arguments and evidence.
• The court may ask questions to clarify issues or seek additional information.

(3) Court’s Discretion: The court has discretion in deciding whether to grant the application for the appointment of trustees for sale. Factors considered by the court may include:

• The nature and extent of the disagreements between co-owners;
• Whether attempts have been made to resolve the dispute amicably;
• The financial implications and fairness to all parties; and/or
• Any other relevant circumstances affecting the co-ownership and proposed sale.

(4) Appointment of Trustees: If the court approves the application, it will issue orders appointing trustees for sale. The orders will typically specify:

• The appointed trustees’ responsibilities and powers.
• The process for marketing and selling the property.
• Distribution of sale proceeds after deducting expenses and trustees’ fees.

(5) Execution: The trustees then manage the sale process in accordance with the court’s orders. The trustees ensure the property is sold at a fair market price and that proceeds are distributed appropriately among the co-owners.

Considerations

• Legal Representation: It is advisable for applicants and co-owners to seek legal representation to navigate the court process effectively.
• Evidence: Strong evidence supporting the need for trustees’ appointment can strengthen the application’s chances of success.
• Court’s Role: The court acts impartially to resolve disputes and ensure fairness in the sale of jointly owned property.

In summary, while the process involves legal steps and court proceedings, the outcome depends on the specific circumstances presented and the court’s assessment of the situation.

Please call David Levi on 0418 602 466 with any questions or a chat. Our firm will consent to act as trustees in most situations and also, suggest a lawyer if you do not already have a lawyer for a Section 66G application. David Levi is a Registered Liquidator. We have extensive experience in Section 66G appointments.