Cusick v Savage [2008] NSWSC 212 | Case summary

6209/07 MICHELLE CUSICK v AARON JOHN SAVAGE JUDGMENT 1 These proceedings initiated by summons filed on 21 December 2007 arise in unusual circumstances. 2 The plaintiff and the defendant were formerly parties to a domestic relationship within the purview of the Property (Relationships) Act 1984. The plaintiff brought proceedings under that Act seeking orders adjusting interests in property. The proceedings were commenced in the District Court of New South Wales upon which relevant jurisdiction is conferred by s 134(1)(g) of the District Court Act 1973. The parties reached a compromise and certain consent orders were made by the District Court at Bathurst on 9 March 2007. 3 The orders included orders concerning a residential property at Bathurst of which the plaintiff and the defendant are registered as proprietors as joint tenants. Among those orders were (a) an order requiring the defendant to pay the plaintiff within 56 days a sum of $73,000 (Order 1); (b) an order for the payment of interest on that sum if not duly paid (Order 2); (c) an order requiring the plaintiff, upon payment of the sum of $73,000, to transfer to the defendant the whole of her interest in the residential property; and (d) an order that, simultaneously with that transfer, the defendant discharge the mortgage over the property (Order 4). 4 Order 9 was as follows: "In the event that the Defendant fails to comply with terms of paragraphs 1, 2 and 4 hereto each party take all necessary steps and execute all necessary documents to cause the property situate at and known as 4 O'Connell Place Bathurst being the whole of the land contained in Certificate of Title Folio Identifier 120/249576 be sold by public auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the President of the Real Estate Institute of New South Wales or his nominee and that the proceeds of the sale be disbursed as follows: a Payment of Agent's commission and advertising expenses and legal expenses of the sale; b Discharge of Mortgage to Bank of Western Australia Limited Mortgage Registration No 7551501; c The sums due and accruing to the Plaintiff in accordance with paragraphs 1 and 2 hereto; d Balance to the Defendant." 5 There were also orders of a machinery and consequential kind for the doing by the parties of all things necessary to give effect to the substantive orders. 6 The evidence adduced by the plaintiff shows that the defendant has not made the payment of $73,000 or done any of the other things required of him by Orders 1, 2 and 4. This is despite requests and co-operation by the plaintiff. 7 The plaintiff apprehends that, as matters now stand, Order 9 and the other orders of the District Court concerning sale of the property cannot be implemented. Order 9 requires that "each party take all necessary steps and execute all necessary documents" to cause the property to be sold by public auction. It is, clearly enough, necessary that each party be actively involved in this. Although provision is made for an auctioneer to be chosen by a third party if the parties do not agree (and there is also provision for the Registrar of the District Court at Bathurst to sign documents in default of action by a party), steps such as instructing the auctioneer, giving authority to sell and instructing a solicitor to act on the sale are not covered. In theory, the plaintiff might perhaps go back to the District Court on a continuing basis to seek specific orders that particular steps be taken as and when the need for such steps arises. But that is scarcely a satisfactory approach and it may be that, following the making and entry of the final orders of 9 March 2007, the District Court is functus officio: R v Frazer [1977] 2 NSWLR 867 at 874-5. 8 The plaintiff has therefore approached this court with a view to obtaining separate relief calculated to carry the District Court orders into effect. The summons and supporting affidavit have been served on the defendant who has neither appeared nor sought to take any part in the proceedings. The proceedings were heard in his absence. 9 The matter was pursued by the plaintiff initially by way of a claim for an order for the sale of the property, with rule 27.1 of the Uniform Civil Procedure Rules 2005 put forward as the basis for the making of such an order. But because that rule applies only where there are already on foot in this court (otherwise than in the Common Law Division) proceedings for possession of land, that basis was not pressed. 10 Mr M G Y Wong of counsel, who appeared for the plaintiff, eventually resorted to an alternative prayer in the plaintiff's summons and sought the appointment of trustees for sale under s 66G of the Conveyancing Act 1919. Jurisdiction under that section is exercisable only by the Supreme Court. 11 It is, in the circumstances, appropriate that an order appointing trustees for sale be made. The plaintiff - one of two co-owners - has reached an impasse in her attempts to have the property sold in the way the District Court ordered. Sale by trustees for sale will at least see the property realised and proceeds received. 12 There is then, however, the question of application of the proceeds. Under s 66F(1) of the Conveyancing Act, the statutory trusts upon which the net proceeds of sale are to be held following sale by trustees for sale are such "as may be requisite for giving effect to the rights of the co-owners". These rights are the parties' rights "as co-owners", that is, the rights they enjoy in the property subjected to the order for the appointment of trustees for sale: Re Fettell (1952) 52 SR (NSW) 221; Permanent Trustee Co Ltd v Commissioner of Stamp Duties (1986) 4 NSWLR 652. 13 If, in the present case, this means that the statutory trusts would cause the net proceeds of sale to be disposed of to the parties in equal shares, the effectuation of the statutory trusts would not lead to the result contemplated and required by the District Court orders. But two statutory provisions may combine to enable this court to make orders ensuring that the net proceeds are applied so as to give effect to those orders. 14 The first is s 13 of the Property (Relationships) Act: "All courts having jurisdiction under this Act shall severally act in aid of and be auxiliary to each other in all matters under this Act." 15 The other statutory provision is s 66G(6) of the Conveyancing Act: "In relation to the sale or partition of property held in co-ownership, the court may alter such statutory trusts, and the trust so altered shall be deemed to be the statutory trust in relation to that property." 16 The relevant concept of acting in aid of and being auxiliary to another court has been explored in cases involving like statutory provisions concerning insolvency and matrimonial causes. A provision empowering a court to "act in aid of" another court confers "a jurisdiction to give aid" (Ayres v Evans (1981) 39 ALR 129 at 133 per Fox J) and "creates new remedies for enforcing existing rights" (Hall v Woolf [1908] HCA 74; (1908) 7 CLR 207 at CLR 212 per Griffith CJ). 17 This court is a court having jurisdiction under the Property (Relationships) Act (see s 9 of that Act). It may, by virtue of s 13 of the Act, deploy its general jurisdiction in aid of the District Court by exercising such power as s 66G(6) of the Conveyancing Act may create to require application by the trustees for sale of the net proceeds of sale in a way that will cause the District Court orders to be carried into effect. 18 Does s 66G(6) allow the court to vary the statutory trusts so as to produce that result? The power conferred by s 66G(6) has been considered in a number of cases. In Re Fettell (above), it was said that the provision exists "to deal with the facts of particular cases" and "to work out the respective rights of the parties as co-owners". In Forgeard v Shanahan (1994) 35 NSWLR 206, Kirby P observed that the provision cannot be used to give effect to personal claims that one party has upon the other. Thus, a claim for damages made by one party against the other, being "a claim arising out of the position of the defendants as contracting parties rather than as co-owners", cannot be recognised in an adjustment of the statutory trusts: Whitehead v Whitehead [2002] NSWSC 486; (2003) NSW Conv R 56-045. 19 Orders made under the Property (Relationships) Act are, of their nature, orders "adjusting the interests of the parties in" the "property of the parties": s 20(1). Those orders accordingly affect the rights of the parties in respect of relevant property. They are not the source of merely personal rights. Whether or not the orders actually shape what s 66F(1) calls "the rights of the co-owners", they do form a basis for specific alteration of the statutory trusts to ensure that the adjustment of interests in property, as already ordered, is carried into effect. 20 This court will act in aid of the District Court in respect of the orders of 9 March 2007 by making orders under s 66G which appoint trustees for sale of the Bathurst property and cause the net proceeds of sale to be applied in the way those orders contemplate. 21 The appropriate orders will include orders to the following effect: 1. Order that [persons] be appointed trustees of the whole of the land in Folio Identifier 120/249576 pursuant to s 66G of the Conveyancing Act 1919 and that that property be vested in those trustees to be held by them upon the statutory trusts for sale altered, however, so that (a) in determining the net proceeds of sale referred to in s 66F(2)(a) of the Conveyancing Act 1919, allowance shall be made for any costs and expenses of obtaining vacant possession of the land; and (b) such net proceeds shall be applied in giving effect to Order 9 of the orders made on 9 March 2007 by the District Court of New South Wales, General List, Bathurst Registry in case number 1/2007. 2. Order that the said trustees are empowered to take such action as they think fit to obtain vacant possession of the land in order that it may be sold by them with vacant possession. 3. Order that the defendant deliver to the said trustees within fourteen days after service on him of a sealed copy of these orders any certificate of title held by him in respect of the said land. 4. Order that the defendant pay the plaintiff's costs of the proceedings. 5. Grant to each party and to the trustees liberty to apply on seven days' notice. 22 There are, however, two matters that will require attention before orders can be made. 23 The first arises from the fact that the plaintiff has filed consent to act as trustee by one person only. That person is a Bathurst solicitor not retained by either party, who is therefore independent and in other respects suitable to be appointed. In view of s 66G(3), however, at least two persons must be appointed, except where the appointee is a trust corporation. It may be that another solicitor from the same firm could act as co-trustee. 24 Second there is the matter of the trustees' remuneration. It is desirable that some provision be made in that regard in the court's orders: see Grizonic v Suttor [2006] NSWSC 1359; Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2006] NSWSC 83. 25 I shall stand the matter over so that these aspects may be attended to. **********

Cusick v Savage

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Judgment (10 paragraphs)

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