Ex-husband forced to sell joint properties despite objecting: Beware of section 66G

07 SEP 2018

 

In the recent case of Myers v Clark (2018) NSWSC 1029, the Court granted the wife’s request to sell two properties jointly owned by the divorced couple and ordered the appointment of trustees for the sale of two properties in Londonderry, NSW, despite the husband making mortgage repayments on the properties in lieu of child support.

Snapshot

The Plaintiff (Ms Myers) commenced proceedings in June 2017 seeking an order pursuant to Section 66G(1) of the Conveyancing Act 1919 (NSW) for the appointment of trustees for the sale of two properties and accompanying land, an application was also sought for Ms Myers’ legal costs to be paid out of the proceeds of the sale of the properties.

The Defendant (Mr Clark) and Ms Myers were formerly married, prior to their separation in 2002 they acquired a property in Londonderry, however separated shortly after. Despite the separation, the couple built a home on the property where Ms Myers resided for 12-18 months, after this time Mr Clark occupied the home with his second wife. Ms Myers and Mr Clark divorced sometime after, however did not seek property orders in combination with their Family Law proceedings.

The property was subdivided into 6 lots, completed in 2016. 4 of the lots were sold and the two remaining lots (one of which Mr Clark still resided with his second wife) were still jointly owned by Mr Clark and Ms Myers as tenants in common.

The Take Away

Section 66G of the Conveyancing Act is a valuable property management tool for situations where co-owners are in a dispute regarding the sale of a property. Per section 66G, the Court allows an owner to apply to appoint a trustee for the sale of the property and effectively forcing the sale of the property. The funds from the sale are kept in trust and distributed between relevant parties following orders made by the Court. A section 66G order is only refused in special circumstances, such as prior agreement between parties not to sell a property unless both parties agree.

What happened?

Mr Clark resisted the sale of the properties on the basis that it was unconscionable on Ms Myers’ behalf to seek relief which would directly financially impact on himself, in regards to mortgage repayments and other repayments made regarding the property. Ms Myers’ denied this was unconscionable as an agreement had been made that Mr Clark would make payments pertaining to the property to offset any child support payments owing to Ms Myers.

What the Court decided

The Court held the sale of the property was not unconscionable, due to the drawings of the parties’ joint home loan account without Ms Myers’ knowledge, for Mr Clark’s personal use. The drawings from the joint accounts were not related to the subdivisions and caused increasing interest and loan repayments which if not for Mr Clark’s personal use, would not have occurred. The court found the proceeds from the sale of the 4 subdivided lots was discharged by the increased borrowing of Mr Clark from the joint account.

The Court made orders to Ms Myers, being: two trustees appointed to the sale of the two properties, Ms Myers’ legal costs to be paid from the proceeds of sale and for Mr Clark to bear his own costs of the proceedings and payment of the trustees from proceeds of the sale.

For more information about how we can assist you with any Family Provisions Act or Wills & Estates disputes please contact Grant Butterfield on (02) 4626 5077 or gbutterfield@marsdens.net.au.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

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