Farrer v Australian Securities and Investment Commission

Judgment 1This is a claim under s 66G of the Conveyancing Act 1919 by a co - owner of land for the appointment of trustees of the land on the statutory trusts for sale and for orders under s 66I. 2The second plaintiff, Angela Kathleen Farrer, and the fourth defendant, Wooli Investments Pty Ltd (formerly Sophocles Investments Pty Ltd) ( Wooli ) are the registered proprietors of land at 47 Riverside Drive, Wooli, as tenants in common in equal shares. 3The other defendants are: (a)The Australian Securities and Investment Commission ( ASIC ) is the first defendant. It was joined at a time when Wooli was de - registered and the ownership of the property was vested in ASIC: s 601AD Corporations Act 2001. Wooli was reinstated after this proceeding commenced. (b)William Haggard, one of the directors of Wooli, is the second defendant; (c)Janet Ada Haggard, the third defendant, is the ex or estranged of William Haggard. 4Section 66G of the Conveyancing Act relevantly provides: 66G Statutory trusts for sale or partition of property held in co - ownership (1) Where any property (other than chattels) 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, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition. (1A) Subject to this section, on the death of a co - owner, any proceedings by or against the co - owner under subsection (1) (whether instituted before or after the commencement of this subsection) survive against or for the benefit of the estate of the deceased co - owner despite, in the case of a joint tenancy, the rule of survivorship. ... (4) If, on an application for the appointment of trustees on the statutory trust for sale, any of the co - owners satisfies the court that partition of the property would be more beneficial for the co - owners interested to the extent of upwards of a moiety in value than sale, the court may, with the consent of the incumbrancers of the entirety (if any), appoint trustees of the property on the statutory trust for partition, or as to part of the property on the statutory trust for sale, and as to part on the statutory trust for partition, but a purchaser shall not be concerned to see or inquire whether any such consent as aforesaid has been given. ... (6) 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. (7) Where property becomes subject to such statutory trust for sale: (a) in the case of joint tenancy, a sale under the trust shall not of itself effect a severance of that tenancy, (b) in any case land shall be deemed to be converted upon the appointment of trustees for sale unless the court otherwise directs. (8) This section applies to property held in co - ownership at the commencement of the Conveyancing (Amendment) Act 1930 and to property which becomes so held after such commencement. 5"Co - ownership" means ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common: s 66F(1). Whilst the word "may" indicates a discretion, a co - owner is entitled to an order for sale "almost as of right": Callahan v O'Neill [2002] NSWSC 877 at [8]; Hogan v Baseden (1997) 8 BPR 15, 723. 6That being so, the parties have agreed to consent orders appointing statutory trustees for sale and vesting the property in those trustees. 7In addition, the parties have agreed that an order should be made under s 66I permitting Wooli to purchase the property on the basis that it be permitted to set - off its entitlement to the net proceeds of sale instead of paying the same and on the basis that Wooli be relieved from paying a substantial deposit. Section 66I provides: 66I Right of co - owners to bid at sale under statutory power of sale (1) On any sale under a statutory trust for sale the court may allow any of the co - owners of the property to purchase whether at auction or otherwise on such terms as to non - payment of deposit, or as to setting off or accounting for the purchase money or any part thereof instead of paying the same, or as to any other matters as to the court seems reasonable. (2) A co - owner, with a right to purchase shall not, without the leave of the court, be entitled to act as trustee in connection with the sale. 8The evidence satisfies me that the discretion under those sections should be exercised. 9Only two matters remain in contest. (a)the amount of the deposit that Wooli should be ordered to pay under s 66I on its purchase of the property; (b)costs as between the plaintiffs and the second defendant, Mr Haggard.