Is There a Way to Resolve a Property Dispute Concerning the Disposal of a Property if a Joint Owner Is Reluctant to Sell?

Disputes over the disposal of jointly owned properties are not uncommon and can arise in numerous situations. If, for example, a couple splits, one party may not want to sell the jointly owned property.  Alternatively, a party may have inherited a share in a property in a Will or have put money into an investment property, and there is resistance to making a disposal by joint owners.

Co-ownership, therefore, can lead to difficulties when one party wants to sell while the other party does not. In such a situation, it is possible to approach the NSW Supreme Court to ask for the property to be sold. This involves the Court appointing a “trustee to sell” the property and then distributing the proceeds of the sale among the owners. These applications are usually granted unless there are special circumstances which preclude the sale of the property such as contractual terms requiring unanimous consent among the owners. This statutory remedy is found in Section 66G Conveyancing Act 1919 (NSW).

Section 66G Conveyancing Act 1919 (NSW)

Section 66G assists a party wishing to sell a property, but where a co-owner is reluctant to cooperate. The Court’s power is discretionary, but an order is usually made “of right” unless to do so would be considered “inequitable”. For example, a limit to the discretion to refuse to make an order is where such an order would be inconsistent with a proprietary right or a contractual or other obligation. In Ngatoa v Ford (1990) relief was refused under s66G because the parties had a contract between them limiting the ability of the parties to dispose of their interest.

However, general hardship or unfairness, in the sense of disadvantaging another owner, is not a basis for refusing an application. Establishing inequitable grounds can be difficult, which means most applications are successful.

Once the property or properties have been sold, the monies raised are deposited in a trust before being distributed among the co-owners. The amount they receive will be based on their contributions made towards the property.

The issue of contributions

When an application under s66G is made, the issue of the relative financial and other contributions of the joint owners may need to be considered.  

Being a co-owner does not necessarily mean that each owner will have contributed equally to the property’s cost and upkeep. Contributions can include, for example, mortgage repayments, insurance, taxes and property improvements.

Suppose one co-owner has made more significant contributions than others. In that case, it will be necessary to ensure that when the sale of a property is ordered and completed, each co-owner receives a fair share of the proceeds.

What does the Court say?

In Myers v Clark (2018), the NSW Supreme Court granted a request to sell two properties owned by a divorced couple. The Court ordered the appointment of trustees to sell the properties in Londonderry, NSW.

With her former husband, Mr Clark, Ms Myers had bought two properties in 2002 shortly before they separated. The property was divided into six lots, of which four were sold. The two remaining lots remained jointly owned. Although the couple subsequently divorced, they did not seek property orders during their family law proceedings. On one lot they had built a house where Mr Clark later lived with his new wife. The parties had a joint loan account to pay for the subdivision costs.

In 2017, Ms Myers made an application to the NSW Supreme Court to appoint a trustee to sell the properties. Mr Clark resisted the proposed sale. He argued that it was “unconscionable” because of the financial impact on him. He had been making all the mortgage repayments and had thus made a greater financial contribution. Ms Myers denied that it was unconscionable as the agreement between them was that the mortgage repayments were in place of child support payments. Moreover, it was found that he had improperly used funds from the mortgage loan account.

The Court granted Ms Myer’s application to appoint a trustee to sell both properties. Because of Mr Clark’s improper use of the mortgage account and, despite his claim of having made the greater financial contribution, the Court decided that there would be equal sharing of the sale proceeds. Ms Myer’s legal costs were to be paid from the sale with Mr Clark having to bear his own legal costs.

Are Section 66G applications usually successful?

This case demonstrates the power of s66G to force the sale of a property where joint owners of a property fail to cooperate on an agreed course of action.

Section 66G applications, if properly prepared, are usually successful. Even where one or more parties object to the “forced” sale, s66G gives the Supreme Court the power to disregard any of the objections raised by the co-owners and appoint a trustee to give effect to a sale.

The Court’s power is discretionary, but the circumstances in which the Court would refuse to grant an order under s66G is limited.  Each application for the sale of a property is considered on a case-by-case basis. Orders will usually be made to sell a property unless the Court believes it would be inequitable to do so.

An order would be denied when it is inconsistent with a proprietary right, or contractual or fiduciary obligation. The Court will not refuse an application on the basis of hardship or unfairness claimed by a co-owner reluctant to sell. As a result, only a minority of applications are refused.

Contact our Property Dispute Lawyers, Sydney, NSW

If you find yourself in a property dispute and require assistance, please contact the experts at Szabo & Associates Solicitors on 02 9281 5088, or complete the online contact form.