Russo v Russo

Texts Cited: J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, LexisNexis, 2015)
P Herzfeld & T Prince, Interpretation (3rd Ed, LawBook Co, 2024)

Category: Principal judgment

Parties: Paul Russo (Plaintiff; Cross-Defendant)
Daniel Russo (Defendant; Cross-Claimant)

Representation: Counsel:
T Alexis SC and S Speirs (Plaintiff)
J Young (Defendant)
Solicitors:
Di Girolamo Lawyers (Plaintiff)
Gavel & Page Lawyers (Defendant)

File Number(s): 2024/179353

Publication restriction: Nil

JUDGMENT

1. Before the Court is an application by the plaintiff, Mr Paul Russo (Paul), for the appointment of a trustee for sale pursuant to s 66G of the Conveyancing Act 1919 (NSW) of the properties at 3 and 3A Neptune Street, Revesby NSW 2212, being the whole of the land contained in folio identifier 1/1265230 and 2/1265230 respectively (the properties) each of which is owned by Paul and the defendant, Mr Daniel Russo (Daniel), as tenants in common in equal shares. The properties were created by the subdivision of a parcel of land originally purchased by Paul and Daniel as tenants in common in equal shares in 2015 (the land). Daniel resists the application on the basis that it constitutes a breach of a term of an oral agreement between them in relation to the development of the land. Without intending any disrespect, I shall refer to the parties by their first names.

2. In addition, Daniel has also brought a cross-claim alleging a failure on the part of Paul to contribute his share of the development costs to the tune of $335,392.12 (being one half of the amount of $670,784.23, which Daniel says he advanced for the development). Paul denies that he is liable to contribute this amount on the basis that Daniel has failed to establish that those amounts were contributed towards payment of the costs of the development.

Evidence

3. Paul relied on his affidavits dated 18 December 2024 and 13 May 2025, and was cross-examined. He also relied on an affidavit of Mr Warwick Williams, a licensed real estate agent and the proposed trustee, dated 13 October 2025 and Mr Nicholas Girolamo dated 13 October 2025 giving evidence of the good character of Mr Williams, which were admitted without objection. Daniel relied on his affidavits dated 7 April 2025 and 31 October 2025 and was cross-examined. No adverse credit findings were sought.

Pleaded claims

4. In the amended statement of claim (ASOC) Paul seeks an order for the appointment of Mr Williams to act as the trustee to sell the properties. The relief claimed in the ASOC also includes the payment to the plaintiff of $1,041,532.33 out of the net proceeds of sale of the properties by way of damages, but in the plaintiff’s outline of submissions filed before the hearing, this further claim was not pressed.

5. The ASOC at [5] pleads that in about April 2015 Paul and Daniel orally agreed to:

(1) purchase the [land] as joint tenants;

(2) equally share the cost to subdivide the [land] into two parcels of land and to hold those two parcels as equal tenants in common;

(3) build a house and swimming pool on each parcel of land of equal value;

(4) equally share the cost to build a detached house and swimming pool on each of the subdivided parcels of land;

(5) that (sic) Paul and his family living in one of the detached houses;

(6) that (sic) Daniel and his family living in the other detached house.

6. The ASOC at [6A] also pleads that another oral agreement was made by Paul and Daniel in about April 2015 (referred to as the ‘collateral contract’) in which they agreed to share equally in the cost of building the two houses financed by way of a loan which would be mortgaged over both houses and would be solely administered by Daniel, and in consideration for Daniel building Paul’s house (and Daniel’s house) Paul would enter into a building contract with Touchstone Building (NSW) Pty Ltd (Touchstone), and Daniel warranted to Paul that he would complete the building of Paul’s house and Daniel’s house. Touchstone was a building company of which Daniel was the sole director and shareholder.

7. In the defence to the ASOC (Defence), Daniel admits that there was an oral agreement (referred to as the ‘development agreement’) between the parties in or about April 2015 which included the terms pleaded in the ASOC at [5] but the collateral contract pleaded in the ASOC at [6A] is denied. The Defence also pleads that the following were further terms of that development agreement:

8. that each party was to become registered proprietor of the lot in which it was agreed he would reside (Defence, [6(b)]);

9. that each party shall share equally in the cost of developing the two lots up to and including the issue of an occupation certificate except to the extent a party desired to include additional features in their lot, the additional costs of which shall be borne by that party (Defence, [6A(a)]);

10. the parties shall enter into a building contract with Touchstone obliging Touchstone to perform a portion of the work required for the development, being the work specified in the quotation issued by Touchstone dated 16 March 2016 (Defence, [6A(b)]);

11. the development shall, to the extent possible, be funded by way of a bank loan obtained by the parties secured over the lots of both parties (Defence, [6A(c)]).

12. It follows from the pleadings that while the parties agree that in around April 2015 they entered into an oral agreement for the subdivision of the land and the construction of two dwellings on each sub-divided parcel, there is significant disagreement as to the terms of that agreement.

13. By his cross-claim, Daniel claims that Paul is indebted to him under the agreement pleaded in the Defence at [6A(a)] in the amount of $335,392.12 being 50% of amounts totalling $670,784.23 which Daniel says were amounts he ‘advanced’ for the purpose of the development and seeks an order for payment of that amount and damages. He also seeks, apparently in the alternative, an account under Pt 46 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

Background

10. On 14 May 2015, Paul and Daniel entered into a contract to purchase the land, then contained in a single folio identifier 250/752013, for $950,000 (Land Contract). Paul and Daniel are both licensed builders with considerable experience in the construction industry and Daniel is Paul’s nephew. The vendor under the Land Contract was a member of their extended family.

11. The purpose of the purchase was to subdivide the land and develop it into two detached dwellings each having a swimming pool, with each of them taking one in which they could live with their respective families (the project). Unfortunately, the project encountered a number of difficulties leading to disagreements and ultimately the falling out of the parties.

12. It is not in dispute that in around April 2015, Paul and Daniel had a conversation regarding the basis on which the development would proceed, resulting in a binding contract between them. However, they each give different versions of the conversation in their affidavit evidence.

13. Paul deposed that in April 2015 shortly after they inspected the land, they had a conversation to the following effect:

Daniel: I think it’s worth $950,000. We can split the deposit $47,500 each.

Paul: Well before we decide to buy it we need to agree on what we are going to build and the cost of the building works.

Daniel: I can build the two houses. They will be the same with a swimming pool each. My company Touchstone can do the works.

Paul: We will need to fund the build.

Daniel: We could get a construction loan, and I will personally guarantee the works.

Paul: Your dad still has some money of mine so he can put that in my share of the deposit.

Daniel: I’m sure he’d do that.

Paul: And there will be a building contract that you and I enter into with Touchstone.

Daniel: Yes.

Paul: And you will guarantee the works. You will administer the funds we borrow so I want you to personally guarantee that I get my house built.

Daniel: That is fair enough. I personally guarantee that I will build and finish your house for the contract price.

Paul: Ok then we have a deal.

14. Daniel denied that a conversation in that form occurred. He deposed that he and Paul agreed to offer $950,000 to the vendor but said this occurred by text messages rather than in a conversation (although he no longer has copies of the text messages). While Daniel accepted in his affidavit evidence that he and Paul had a conversation in around April 2025 regarding their intentions for the construction of two dwellings on the land, he deposed that the conversation was to the following effect:

Daniel: We had previously flagged discussing details around funding and since neither of us have enough capital to get this deal on foot, I am prepared to use my own residence as security for any loan, but in terms of any and all costs associated with the purchase, construction, repayment of loans et cetera, the intent is we would be 50/50 all the way.

Paul: Yes that would be the understanding and arrangement.

Daniel: Obviously, if one of us put [in] more than the other along the way, they would be paid back and we will reconcile all costs and ensure our outlay was 50/50 between us.

Paul: Yes, if we are agreeing 50/50, then that follows.

Daniel: Any issue using Touchstone, my building company, as the builder?

Paul: Yes makes perfect sense and is preferred. And at the end of the build we will own one lot each to do with as we please yeh?

Daniel: Exactly, we each end up with a property we own for ourselves. But Touchstone needs to control the works the subject of any contract or scope agreed, so things can be managed, like time and cost and there can be accuracy with costs and the like.

Paul: Of course.

15. Paul does not dispute Daniel’s evidence that these words were said but does not detract his evidence of the conversation set out at [13] above, on which he was not cross-examined.

16. I note the following points about the two different versions of the conversation. First, the two versions are not inconsistent with each other. Secondly, Daniel’s version omits any reference to what would be built on the land for which each would bear the cost 50:50 whereas Paul’s version identifies that the two dwellings would be the same together with a swimming pool. It is highly unlikely that Paul and Daniel would agree to share the cost of the project on a 50:50 basis without discussing what it was they were committing to. Thirdly, each version omits several of the elements of the pleaded oral agreement set out at [5] above suggesting that neither is a complete record of their discussion.

17. At the commencement of the hearing Mr Alexis SC, senior counsel for the plaintiff, accepted that because Paul did not contest that the conversation included the words set out at [14] above, the oral agreement of the parties includes a term that at the end of the build and the subdivision of the land into two separate titles, each of them would become the registered proprietor of one subdivided lot (T6.46 to 7.18).

18. Although the Land Contract stated that the deposit was $95,000, the settlement sheet discloses that only $47,500 was paid as a deposit. Stamp duty on the Land Contract of $38,240 was paid. Daniel deposed that he arranged for the stamp duty to be paid through what he said in his evidence was a borrowing of that amount from his father, Joseph, but this is disputed by Paul.

19. Around the time of the discussions regarding the proposed purchase, Paul noticed from the sewerage services diagram included in the contract that the sewer line ran to the far left of the land (ie on the boundary with a neighbouring property) which meant that once the land was subdivided either he or Daniel would have a parcel affected by the sewer line. Paul deposed that he had a discussion with Daniel in which they agreed that Paul would take the lot which would be affected by the sewer line to be known as 3 Neptune Street (No 3) and Daniel would take the other lot to be known as 3A Neptune Street (No 3A). Paul’s evidence, which I accept, is that he agreed to Daniel taking the lot without the sewer line because Daniel was, in his words, ‘putting all this together’.

20. On 26 May 2015, Paul and Daniel obtained a loan approval from the ANZ Bank for $1,100,000 to complete the purchase of the land and settlement under the Land Contract occurred on 25 June 2015. After paying the amount due on settlement, $156,917.14 sourced from the loan proceeds was paid into a joint account with the ANZ Bank in the name of Paul and Daniel (ANZ Joint Account). The difference between the loan advance and the $156,917.14 paid into the account is $40,505.80 and Daniel was unable to explain in his evidence what happened to it. The most likely explanation is that it funded the payment of stamp duty on the Land Contract. The first transaction on the ANZ Joint Account was a payment by Daniel of $48,000 to his father by a cheque drawn on the joint account which he deposed was a repayment of the loan previously made by his father for the stamp duty (a matter disputed by Paul). This issue is dealt with below in relation to the cross-claim.

21. Daniel accepted in cross-examination that he made all the transactions on the ANZ Joint Account except for a payment of $7,000 to Paul for his son’s christening on 29 February 2016 (T112.1).

22. In June 2015, Daniel engaged Mr Simon Georges of Development Design Pty Ltd (Development Design), a firm of architects, to prepare architectural plans for the project. Daniel deposed to a conversation with Mr Georges and Paul to the following effect (emphasis added):

Daniel: We have an intent to build a duplex. We have acquired a site. We want to put in two four-bedroom detached duplexes, with a pool. 2 levels, with a modern design; and need an architect.

Mr Georges: I can assist you with that. Assuming both duplexes are exactly the same, I can do it for about $22,000. That would include drafting the plans and submission to Council. This is for one set of plans, any changes or multiple versions et cetera will likely cost extra.

Daniel: That sounds fine.

Paul: Yes, no problem with that.

23. Daniel asserts that he ultimately paid an extra $7,000 to Development Design for the architectural plans as a result of changes requested by Paul to his dwelling, but I am not satisfied on the evidence that this is established. The evidence does not establish how much was paid to Development Design for the architectural plans. Further, while Development Design issued architectural plans for the construction of the two dwellings on the land on 3 December 2015, these plans are not in evidence except for a single page showing the first-floor plan (CB 291). While there are some differences between the first floor of each dwelling on that page, the evidence does not indicate how that came about. To the extent there are differences on that particular page, they do not appear to be material, and this is borne out by Daniel’s email of 14 November 2016 set out below.

24. On 4 December 2015, Daniel sent the architectural plans issued by Development Design on 3 December 2015 to a quantity surveyor, Andres Cora, requesting a ‘cost summary’ for the project. Shortly afterwards, Mr Coras provided an estimate of the cost for demolition of the existing dwelling and construction of the new dwellings based on the architectural plans of $981,853 (including GST). There is nothing in this estimate to suggest that there was any material difference between the two dwellings. Daniel subsequently provided this cost estimate to the Canterbury Bankstown Council in connection with the development application.

25. On 16 March 2016, Daniel issued to Paul on Touchstone’s letterhead a quotation for the demolition of the existing dwelling and garage on the land and the construction of a ‘detached dual occupancy’ and two swimming pools on the land for a total cost of $985,000 (including GST). The quotation states that it is based on the plans prepared by Development Design. Again, there is nothing in this quotation to suggest that the two dwellings were not the same.

26. On 3 April 2016, Paul and Daniel entered into a building contract with Touchstone (First Building Contract). The First Building Contract was a standard form home building contract published by NSW Fair Trading for work over $20,000. The total contract price was $985,000 (including GST).

27. It is sufficient to refer to the following provisions of the contract:

28. Clause 1 (headed ‘contract documents’) identifies the plans and specifications for the work to be done under the contract as: (a) architectural plans prepared by Development Design dated 3 December 2015 (of 37 pages), and (b) structural drawings prepared by Structerre Engineers dated 1 February 2016 for No 3A (of 18 pages) and 1 March 2016 for No 3 (of 17 pages). These architectural plans and structural drawings are taken to form part of the contract (cl 1) but are not in evidence (apart from one page of the architectural plans showing the first-floor plan as noted above). They are the same plans and drawings on which the construction certificate was issued on 15 December 2017 which identifies that the two sets of drawings prepared by Structerre Engineers were for each separate dwelling.

29. Clause 1 also states that ‘any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by each party to the contract’.

30. Clause 8 provides: ‘the work will be complete when the contractor has finished the work in accordance with the contract documents and any variations, there are no omissions or defects that prevent the work from being reasonably capable of being used for its intended purpose, any damage of the kind referred to in clause 19 has been repaired, and all rubbish and surplus material has been removed from the site’.

31. Clause 9 contains warranties by the contractor, including that ‘the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract’.

32. Clause 12 requires the owner to pay the contract price by ten progress payments, totalling $985,000, each itemised for a particular category of work.

33. Clause 13 deals with the procedure for variations to the contract, and is set out later in these reasons.

34. On 27 April 2016, Canterbury Bankstown Council issued a development consent for the project (described in the construction certificate as the demolition of all existing structures and the construction of detached dual occupancy dwellings, inground swimming pools and the subdivision of the land).

35. Also, on 27 April 2016, Daniel provided to Paul a document described as a ‘quotation report’ setting out a detailed breakdown of the cost of the individual components of the works to be completed pursuant to the First Building Contract. The total cost (including GST) is $496,754. I infer that this was the estimated cost of each dwelling and associated swimming pool pursuant to the First Building Contract, which is confirmed by Daniel’s subsequent email dated 14 November 2016 set out below. While that would result in the total cost of the two dwellings being $993,508 rather than $985,000, the likely explanation of the difference is that the quotation report is a more detailed breakdown of the cost. Paul’s evidence (admitted without objection) was that it was agreed at this time that both houses would be identical, built as brick veneer and have a swimming pool, which I accept as it is consistent with Daniel’s email of 14 November 2016 set out below.

36. Following the obtaining of the development consent, Paul and Daniel engaged a mortgage broker, Mr Robin Richardson of Property Capital Pty Ltd, to apply on their behalf to the ANZ for a construction loan. In the course of the ANZ’s consideration of the application it obtained a valuation of the land from a valuer, Mr Nick Dobell of Herron Todd White (Sydney) Pty Ltd dated 6 July 2016. Each dwelling is valued on an ‘as if completed’ basis at $1.5 million. This is then discounted to reflect that the properties are on the one title, which appears to be a misunderstanding on the part of the valuer that there is no subdivision contemplated. The relevance of the valuation for present purposes is that it is predicated on the two dwellings being the same.

37. Ultimately by late September 2016, the ANZ indicated that it would not approve a construction loan because it was not satisfied that the borrowers would be able to service the loan. The mortgage broker’s attention then moved to alternative financiers and an application was made to RAMS in October 2016.

38. In connection with this application to RAMS, Daniel sent an email to the mortgage broker on 14 November 2016 enclosing an estimate of the cost of construction of one of the two houses, which I infer from its date is the same as the estimate referred to at [29] above. This email stated (emphasis added):

Hi Robin,

please find attached my breakdown for the construction of one of the two houses at 3 Neptune st Revesby. Please note that they are going to be identical in cost so apply this amount twice.

Please contact me if you require anything else.

Check the numbers before you send it!!!

33. The loan application to RAMS was also unsuccessful and in late 2016 Daniel had a number of discussions with Paul about how they would fund the construction of the two dwellings. Paul’s evidence, which I accept, is that (a) he suggested that they should sell the land with the benefit of the development consent because he thought based on a real estate agent’s advice they could sell the land for about $1.6 million and therefore make a profit of about $200,000 each; (b) Daniel rejected this idea because he and his wife wanted to live in No 3A, and proposed that he would sell his home in Albert Street, Revesby and put the surplus, after paying off the mortgage, into the development, which Paul ultimately agreed to.

34. In March 2017, Daniel listed his house in Albert Street, Revesby for sale and in around May 2017, a contract for sale was entered into. Settlement occurred in around July 2017, at which time Daniel deposited $541,195.88 from the sale proceeds into the ANZ Joint Account.

35. On 17 July 2017, Daniel obtained a quote from a supplier for the installation in No 3A of wall panels using the Ritek system, which he forwarded to Paul. Paul deposed that he then had a conversation with Daniel in which he objected to Daniel making this change because it would involve a ‘full concrete structure’ rather than the brick veneer under the current design and this would result in a significant increase in the cost of building Daniel’s house. Daniel says that Paul’s evidence regarding this conversation is ‘incorrect’, but does not give evidence contradicting that Paul objected to the proposed change due to the increased cost. I prefer Paul’s evidence on this issue. The change to incorporate the Ritek system required the inclusion of a suspended concrete slab for No 3A and Daniel instructed Structerre Engineers to prepare amended structural drawings, which they did.

36. Following the engagement of another mortgage broker, Mr Julian Finch of Finch Financial, Westpac issued a loan approval to Paul and Daniel on 20 September 2017 for a facility under which Westpac would advance $1,090,000 to refinance the ANZ facility plus a further $360,000 to fund construction of the two dwellings. Paul and Daniel took up this facility to refinance the existing ANZ facility on 17 October 2017, although drawings under the new $360,000 facility for construction did not start until June 2018, and the total amount ultimately advanced by Westpac was $345,000 rather than $360,000.

37. On 31 October 2017, Structerre Engineers sent revised drawings to Daniel and on 2 November 2017 Development Design sent revised the architectural plans to Daniel for construction purposes. There is no evidence that any of these plans were sent to Paul.

38. On 14 November 2017, a new building contract was entered into by Paul and Daniel with Touchstone (Second Building Contract) again using the NSW Fair Trading standard form. It states the total cost to be $860,000 (including GST). The only differences between this contract and the First Building Contract are first, that the total cost has reduced from $985,000 to $860,000 and second, the gross amounts attributed to identified works in the schedule of progress payments are also different which explains the reduction in the total cost (although there is no differentiation as between the two dwellings). Importantly, the description of the ‘contract documents’ in clause 1 is the same as in the First Building Contract, ie the architectural plans and structural engineering plans referred to are identical in both contracts, and hence the work to be performed by Touchstone under the contract remained the same as under the First Building Contract.

39. In cross-examination, Daniel confirmed that the specification of the work to be performed by Touchstone under the Second Building Contract remained the same as under the First Building Contract and explained the reason for reducing the total cost from $985,000 to $860,000. The relevant exchange was as follows (emphasis added):

Q. You in your affidavit tell us at court book page 66 paragraph 123 that the building contract that I've just taken you to, that's the April 16 contract, was not the contract that was used?

A. No.

Q. I think what you wished to have the Court accept is that the same contract was used, the numbers were changed, it was redated and that's the contract that became the building contract, is that right?

A No, it was fully signed and executed, a completely separate contract.

Q. If you turn to page 336, the--

A. From my recollection.

Q. --contract for all intents and purposes appears to be identical, save an except for a change to the contract amount--

A. Yep.

Q. --you'll see on 339 the price is now 860,000?

A. That's correct.

Q. But you'll notice that apart from that change on 342 down at the bottom, the contract details remain the same, is that right?

A. Yes, yes, we're still building the same thing.

Q. On 343 you've got the contract documents, the DA plans and the engineer's details that I mentioned a moment ago, do you see that? Nothing's changed there?

A. No.

Q The only other thing that's changed is what we see on page 351. We have the same milestones with respect to the ten progress claims, but each of those amounts have been adjusted downward so as to achieve a reduction of price to 860,000, is that right?

A. Correct.

Q. The reason that was done, there's no secret about this I suggest, is that you needed to show Westpac who you were trying to borrow money from, but the build was actually going to be less or within the sort of margin that they had been told it would cost, is that right?

A. That's the servicing capability that we had at the time.

Q. But you reduced the price so as to show the bank that you didn’t need as much money, correct, and that was relevant to serviceability, correct?

A. Correct.

Q. I gather wearing Touchstone's building hat, you regarded in November 2017 before construction got underway that $860,000 as provided for in this form of contract was a fair price to complete both detached houses to completion?

A. Yes.

Q. That's why you provided this contract to the bank for the purpose of getting a loan, correct?

A. Correct.

40. On 29 November 2017, a policy of insurance was issued to Touchstone for the works, with the insured amount as $800,000. Two separate certificates of insurance were issued for No 3 and No 3A stating the ‘contract amount’ as $400,000 for each dwelling.

41. On 15 December 2017, a construction certificate for the demolition and construction works was issued. The architectural plans and structural engineering drawings identified in the certificate are the original versions referred to in the First Building Contract and Second Building Contract. Later in December demolition commenced.

42. On 31 May 2018, Daniel sent Paul an email attaching a budget to finish each dwelling. The email stated that ‘You will notice that my side is $40k more but that is due to me not having windows yet! I need to review this as it is too expensive. Let me know if [I’ve] missed anything??’. Paul responded by email correcting the figure for plumbing and Daniel responded that he would change it.

43. From June 2018 to February 2019 drawings were made under the Westpac construction facility and used to pay payment claims issued by Touchstone under the Second Building Contract. By February 2019 the total amount advanced by Westpac under the construction facility was $345,000, but the construction of the two dwellings was not complete. This resulted in Paul and Daniel having rather terse discussions as to how the completion of the construction work would be funded, and there are text messages in early March 2019 between them in which Paul seeks ‘proof’ from Daniel that the borrowed money has been spent on construction costs for the project rather than other aspects of Touchstone’s business. Daniel failed to provide such ‘proof’ to Paul’s satisfaction, and this resulted in a breakdown in their relationship which has continued to the present time.

44. In June 2019, Touchstone entered into a loan facility with Savoy Investments Pty Ltd (Savoy) for $170,000 which, according to Daniel, was sourced by Mr Finch (the mortgage broker now acting for Daniel) and used for the purpose of the development. According to Daniel, this loan was refinanced on 19 September 2020, when a loan agreement was entered into by his father, Joseph, in favour of Daniel and Paul for $260,000. Paul denies that his signature appearing on the copy of this loan agreement in evidence is genuine and disputes that he is a party to the loan agreement. Ultimately, nothing turns on the genuineness of this loan agreement for the purposes of the present proceedings.

45. On 23 October 2019, Westpac issued a default notice to Paul and Daniel for the non-payment of a mortgage instalment of $10,197.84. Around this time, Mr Finch was engaged to seek to refinance the Westpac and Savoy facilities. In connection with an application made to one possible lender, Mr Finch sent an email to Daniel on 14 December 2019 which stated: ‘The build has to be finished this time, so please use the money for the purpose it is being borrowed’. This email is consistent with the complaint made by Paul to Daniel previously that part of the borrowed monies had not been used for the development but rather for other aspects of Touchstone’s business.

46. On 5 March 2021, Touchstone was deregistered.

47. On 10 September 2021, Paul and Daniel refinanced the outstanding debt to Westpac of around $1.41 million by a loan from Pepper Finance Corporation Ltd (Pepper) in the amount of $1,530,000 and Pepper was granted a mortgage over the land.

48. On 13 May 2022, a final occupation certificate was issued for the development.

49. On 27 May 2022, Daniel and Joseph met with Paul to discuss the reconciliation of the accounts for the project. Daniel provided a spreadsheet to Paul at this meeting setting out what he says are the amounts contributed by each of them to the project (Spreadsheet). There is a dispute regarding what was said in the discussion. Daniel sent an email to Paul and Joseph shortly after the meeting setting out what he considered to be the outcome of the meeting and the email concluded: ‘If any party disagrees with the summary of the agreement please reply in writing before the transfer of the properties happens’. No agreement was reached as Paul responded on the next day by an email stating: ‘In relation to our meeting last night after some thought overnight and comments that were made I am not agreeing to the conditions of this email’.

50. On 12 September 2022, a plan of subdivision was registered to subdivide the land into two lots. Lot 1 in that plan is for No 3A and Lot 2 in that plan is for No 3. Each lot is registered in the names of Paul and Daniel as tenants in common in equal shares.

51. On 19 September 2022, the solicitor acting for Daniel and Paul in relation to the subdivision sent them an email setting out the steps necessary to achieve a partition of the two lots, No 3 to Paul and No 3A to Daniel. The solicitor’s email states that it is necessary for stamp duty purposes for each of them to obtain a valuation from a registered valuer of their respective lot. The email correspondence continued until 23 February 2023 but ultimately the documents required for a partition to occur were not forthcoming. One of the sticking points appears to have been that while Paul did provide a valuation for No 3, Daniel did not provide a valuation for No 3A.

52. Further discussions ensued by text and email in 2023 and 2024 but were unsuccessful in resolving the dispute, which centred on determining what amount Paul was required to pay to Daniel to reflect a 50:50 sharing of the overall expenses of the project, and Paul commenced these proceedings on 15 May 2024.

53. On around 23 August 2025, Paul made a claim under the builder’s home warranty insurance policy regarding alleged defects in the construction by Touchstone of No 3, including that the construction is incomplete, which claim was still outstanding at the date of the hearing.

The claim under s 66G of the Conveyancing Act

Principles

54. Section 66G(1) of the Conveyancing Act provides:

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.

55. ‘Co-ownership’, as defined in s 66F(1), means ‘ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common’, and ‘co-owner’ has a corresponding meaning.

56. It is not in dispute that while the making of an order in favour of a co-owner for the appointment of trustees for sale under s 66G(1) of the Conveyancing Act is discretionary a co-owner is entitled to such an order almost as of right unless on settled principles it would be inequitable to allow the application: Tory v Tory [2007] NSWSC 1078 at [42]; Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36]; Myers v Clark [2018] NSWSC 1029 at [84]. Importantly, general notions of hardship and/or unfairness is not a proper ground for the refusal of relief: Ngatoa v Ford (1990) 19 NSWLR 72 at 77; Hogan v Baseden (1997) 8 BPR 15,723.

57. Although the class of situations the presence of which would justify a refusal to grant an order under s 66G is technically not closed (Ngatoa v Ford at 77), common examples of situations where such orders will be refused include (as accepted in Cain v Cain [2007] NSWSC 623; 13 BPR 24,963 at [10]):

58. Where the plaintiff’s conduct constitutes an estoppel against the sale: Woodson *(*Sales) Pty Ltd v Woodson *(*Australia) Pty Ltd (1996) 7 BPR 14,865 at 14,718-14,719.

59. Where the making of the order would be inconsistent with a fiduciary obligation, or a proprietary/contractual right (such as a covenant not to sever): Williams v Legg (1993) 29 NSWLR 687 at 693; Grizonic v Suttor [2004] NSWSC 137; (2004) 12 BPR 22,797 at [8].

60. Where the legal title is held by trustees and the trust instrument contains its own procedure for sale: Stephens v Debney (1959) 60 SR (NSW) 468.

61. The parties were in agreement that it is the situation referred to in (2) which is relevant in the present case. In relation to whether the making of the order would be contrary to a contractual obligation, Mr Alexis SC relied on the observations of Mason P said in Hogan v Baseden at 15,723 that this would require the Court to address at least four questions:

It would not be a proper exercise of the power to decline relief under s 66G of the Conveyancing Act to refuse an application on grounds of hardship or general unfairness: see Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068; Ngatoa v Ford (1990) 19 NSWLR 72 at 75. It follows that in the unhappy event that the parties are unable to settle their differences then the making of an order appointing trustees for sale seems inevitable unless the respondent could establish a legally binding agreement not to put her out of occupation of her home, or circumstances that would ground some estoppel to similar effect. On either issue the court would need to address at least four questions: first, whether anything that was said on the particular topic was intended to have legal effect; second, whether any arrangement or understanding (if legally effective) it was intended to apply in the circumstances which happened following the breakdown of amicable relations between the parties; third, whether any agreement or understanding was subject to a condition that the respondent would dispose of her remaining interest in the property in any particular way upon her death; fourth, whether the rights (if any) of occupancy reserved to the respondent under such arrangement (if it existed) were in the nature of a life estate or a right of residence terminable upon the respondent vacating occupancy for any reason.

Plaintiff’s submissions

59. Paul says that there is no reason which would justify the Court’s refusal to make an order appointing trustees for sale under s 66G, in circumstances where it is submitted that Daniel’s evidence ‘at best might support a submission of inconvenience’, which the authorities establish is not a valid reason.

60. Paul submitted that at its highest, the contractual obligation said to preclude the making of an order under s 66G was the term of the oral agreement that at the end of the build and the subdivision of the land into two separate titles, each of the parties would become the registered proprietor of the subdivided lot which it was agreed he would reside. It is necessary to ask the four questions identified by Mason P in Hogan v Baseden in the passage set out earlier, in particular whether the term was intended to apply in the circumstances which happened following the breakdown of amicable relations between the parties.

61. It was submitted that there was no arrangement or understanding regarding ownership of the two lots that was intended to apply in the event of a breakdown of relations, and nothing was said in the relevant discussions between the parties which would prevent them from exercising their statutory rights under s 66G if the project did not go according to plan or if there was some breakdown in relations between them. Further, the arrangement between the parties was predicated on the costs of the project being shared equally, and the sharing of those costs having produced a house and a swimming pool on each parcel of land of equal value which had not occurred. Nor was anything said by the parties which would amount to an agreement against the severance of co-ownership (such as a provision of the kind referred to by Ball J in Forest v Nix [2012] NSWSC 493).

62. Paul accepted that the Court retains a discretion to make an order under s 66G on terms which will allow Daniel to bid for No 3A pursuant to s 66I and would not oppose such a term in the present case.

Defendant’s submissions

63. Daniel submitted that in addition to the contractual term referred to in [60] above, it was also a term in the development agreement that he and Paul would share the equally the cost of the developing the two lots up to and including the issue of an occupation certificate except to the extent a party desired to include additional features in their lot, the additional costs of which shall be borne by that party. On this basis, it is said that an order appointing trustees for sale over No 3A would be inconsistent with Daniel’s contractual right to become the registered proprietor of No 3A.

64. In closing submissions, counsel for Daniel made essentially three points. First, it is for the plaintiff to plead and prove the ways in which it was said that the development had not gone according to plan, in particular the two properties were not of equal value, and he had not done so; the mere existence of some differences between the two properties does not automatically equate to a difference in value.

65. Secondly, it was submitted that the evidence established an agreement which precludes the making of an order for sale under s 66G, being an agreement for a transfer of No 3A to Daniel and No 3 to Paul subject to an accounting to address the matters in dispute, namely (as Paul put it in cross-examination) ‘the funds that were put in plus the funds from the construction loans’ which had not been shown to have been used for the development.

66. Thirdly, it was submitted that the existence of this agreement was accepted by Paul in cross-examination (T92.10ff):

Q. You understood that it was necessary for you to obtain that finance so that you could become registered proprietor of number 3, correct?

A. Correct.

Q. --and Joseph would become registered proprietor of number 3A, correct?

A. Incorrect, it’s not Joseph.

Q. Sorry, thank you, Daniel would become owner of number 3A, correct—

A. Correct.

Q. --as per the agreement, correct?

A. Correct.

Q. That was the position all the way up to obtaining the subdivision of the two lots into numbers 3 and 3A, correct?

A. Correct

Q. It’s indeed the position today that once you’ve resolved the issues between yourself and Daniel and yourself and Joseph you want to complete the process of you obtaining ownership of lot 3 and Daniel obtaining ownership of lot 3A as per the original agreement, correct?

A. Well, all depends on the resolution of today.

Q. The resolution of today relates to your dispute with Daniel about how much he contributed to the property, correct?

A. Which I’ve been asking for since 2018.

Q. And only the amount he contributed to the property, correct?

A. No, and in relation to the construction funding which--

Q. Which is contribution to the property, correct?

A. Yes, so there’s the funds put in and then the--

…

A. So it’s the funds that were put in plus the funds from the construction loans that I haven’t seen any bank statements or accounting done.

Issues for determination

67. The parties were in agreement that the issues for determination are:

68. What are the terms of the agreement between the parties for the development of the subject property (including any variation(s) made during construction)?

69. Does that agreement prevent the appointment of trustees for sale under s 66G of the Conveyancing Act?

70. Assuming the appointment of trustees for sale, what further relief, if any, ought to be granted?

71. At the hearing I raised the question whether the making of an order for partition rather than sale under s 66G(4) should be considered. Mr Young, counsel for the defendant, did not seek an order for partition, and Mr Alexis SC, senior counsel for the plaintiff, submitted that an order for partition was not open because the mortgagee registered on title (Pepper) was not a party and its consent to a partition had not been sought by the defendant.

72. In addition, I consider that the defendant having not met the plaintiff’s application for the appointment of trustees for sale with a counterclaim for partition, the making of an order for partition is not open to the court: Segal v Barel (2013) 84 NSWLR 193; [2013] NSWCA 92 at [25]. For these reasons, the question of whether an order for partition should be made does not arise.

Principles to be applied in finding the terms of an informal contract

70. The parties relied on the following summary of the approach to be taken in determining the terms of an informal contract (ie one which is entirely oral or partly oral and partly to be implied from conduct) by Peden J in Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437 at [33]-[36]:

Where parties agree that they entered into a contract and the issue is the terms of that contract, the Court must ascertain the objective intention of the parties, that is, the intention of the parties as outwardly manifested by their words and conduct, not each party’s unspoken subjective intention: see eg Toll *(*FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

Where a contract is entirely oral, or partly oral and partly to be inferred from conduct, the Court must consider all the relevant circumstances when determining the terms of the agreement, including both pre-contractual and post-contractual conduct as a matter of fact: see eg County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7]–[8], [17]–[27] (Spigelman CJ); Lawrence v Ciantar [2020] NSWCA 89 at [114] (Bathurst CJ, Meagher and Gleeson JJA agreeing); Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232 at [35] (Stern JA, Kirk JA and Basten AJA agreeing).

The plaintiffs must satisfy the civil standard of proof, requiring “actual persuasion” of the occurrence or existence of the fact in issue: see eg Singh v AKM Investments Group Pty Ltd [2024] NSWCA 268 at [44]–[47] (Gleeson JA, Bell CJ and Stern JA agreeing).

Where a dispute concerns an oral agreement, the appropriate considerations involved in factual findings concerning what was agreed were recently set out by Payne JA (Leeming and Adamson JJA agreeing) in Turner v Richards [2025] NSWCA 83 at [58]–[60]. Without seeking to depart from the principles detailed in that judgment and those cited therein and above, some key matters are:

(1) Human memory is fallible and worsens with time and the intervention of disputes: see Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce); see also Watson v Foxman (1995) 49 NSWLR 315 at 318–319 (McLelland CJ in Eq). It is possible for witness testimony to be honest, credible, but wrong: see eg discussion in Mark J Steele, “Witness Preparation and the Corruption of Evidence in Civil Proceedings” (2023) 42(2) Civil Justice Quarterly 148.

(2) Available objective evidence is likely to be the most reliable basis for determining matters of credit. Further matters relevant include the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding: see also John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94] (Hammerschlag J, as his Honour then was); ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [27]–[29] (Bell P, Bathurst CJ agreeing).

71. I have also had regard to my own summary of the relevant principles in Highfields Australia Pty Ltd v Advanced Motor Dealers Group Pty Ltd *(*Receiver and Manager Appointed) [2023] NSWSC 1458 at [108]-[116], which it is not necessary to repeat here.

72. In relation to the relevance of post-contractual conduct, the following observations of Campbell JA (with whom Basten JA and Sackar J agreed) in Lym International Pty Ltd v Marcolongo [2011] NSWCA 303; (2011) 15 BPR 29,465 at [141]-[143] are apposite (emphasis added):

There is a vast difference between the task that is involved in interpreting a wholly written contract, and the task involved in finding what has been agreed in a contract that is not wholly in writing. The difference between those tasks in itself makes a vast difference between the circumstances in which post-contractual conduct can be relevant for the respective tasks.

Where there is a contract that is wholly in writing, there is no doubt what the contract is — it is the writing. The task of interpretation is ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using the words in that writing. The admissibility of evidence for interpreting a wholly written contract is decided by reference to whether it is able to assist in ascertaining the meaning that the bystander who knows all the relevant surrounding circumstances would understand from the parties using those words. Save in the case of post-contractual events providing retrospectant evidence of a surrounding circumstance that was known to the parties at the time of contracting, the view favoured in this court is that post-contractual conduct cannot assist in that task, and thus is not admissible, or if admitted cannot legitimately be used in that task: the cases cited by McColl JA in County at [161] ([118] above).

By contrast, the task in ascertaining what are the terms of a contract that is not wholly in writing is quite different — the task is finding as a fact what the parties have agreed. A range of post-contractual conduct could be relevant to ascertaining what the parties have agreed. For example, their conduct in carrying out the contract could itself be objective evidence of what they had agreed, an admission of one of the parties could assist in ascertaining what they have agreed, and business records created to record or report on the contract rather than carry it out could also assist in that task.

What were the terms of the development agreement?

73. For the reasons given below, I find that in April 2015 Paul and Daniel entered into an agreement to acquire and develop the land on the following terms (development agreement):

74. to purchase the land for $950,000 as equal co-owners;

75. to subdivide the land into two separate parcels to be held as tenants-in-common in equal shares;

76. to build on each parcel a detached house and a swimming pool which would be the same;

77. to enter into a contract with Daniel’s building company, Touchstone, for it to undertake the building work;

78. to share the cost of purchasing and subdividing the land and building each house and swimming pool equally, funded by a loan secured by a mortgage over the land and on each parcel once subdivision occurred for which they would be liable equally; and

79. that at the end of the build and the subdivision of the land into two parcels on separate titles, each of them would become the registered proprietor of one of the two parcels, being No 3 in the case of Paul and No 3A in the case of Daniel.

80. The term in (1) reflects the evidence which Paul and Daniel gave of their conversations prior to entering into the Land Contract. While the ASOC pleads that they agreed to acquire the land as joint tenants, a statutory declaration signed by Paul on 18 June 2019 records that they purchased the land as tenants in common in equal shares and it is more likely that the intention was that they would be equal co-owners without differentiating as to the type of co-ownership when they entered into their oral agreement.

81. The terms in (2) and (5) reflect what is accepted, on the pleadings, was their agreement and is consistent with the evidence of their discussions and their conduct.

82. Terms (4) and (6) reflect the substance of the relevant part of Daniel’s evidence regarding the conversation in April 2015 set out at [14] above which Paul does not dispute. In particular, ‘at the end of the build’ are words attributed by Daniel to Paul in that conversation and in context is a reference to the construction of the two houses (each with a swimming pool) under a building contract to be entered into by Paul and Daniel with Touchstone.

83. This leaves term (3) which differs from the term pleaded in the ASOC set out earlier, and admitted by Daniel, that the agreement was that they would ‘build a house and swimming pool on each parcel of land of equal value’. I consider that their agreement in April 2015 was to build a detached house and a swimming pool on each parcel which would be the same rather than of equal value for the following reasons.

84. First, it reflects Paul’s version of the conversation at [13] above and, while Daniel denies that conversation, I accept Paul’s version because it is consistent with Daniel’s evidence of the conversation he had with the architect, Mr Georges of Development Design, in mid-June 2015 set out at [22] above. The term is also consistent with Daniel’s version of his conversation with Paul in April 2015 at [14] above that ‘in terms of any and all costs associated with the purchase, construction, repayment of loans et cetera, the intent is we would be 50/50 all the way’. It would only make sense for the two of them, both experienced builders, to agree to bear the construction costs ‘50-50 all the way’ if the two dwellings were expected to be the same and hence the cost of each would be the same.

85. Secondly, while Daniel admitted on the pleadings that the oral agreement was that they would build a house and swimming pool on each parcel of equal value, there is nothing in the evidence to suggest that in the period up to the signing of the First Building Contract with Touchstone that Paul and Daniel had discussed or agreed that each house and swimming pool to be constructed would be of equal value. The discussion in the conversation set out at [14] above is in terms that all costs, including construction costs, would be ’50:50 all the way’ and this is confirmed by Daniel’s email of 14 November 2016, that what was to be built would be ‘identical in cost’.

86. Thirdly, the Court is not bound to act on the admissions made by parties and should not do so where there is reason to doubt their correctness: Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87 at [154]-[160]. For the above reasons, I consider that there is reason to doubt the correctness of the admission by Daniel that it was a term of the development agreement that each house and swimming pool would be of equal value. In this regard, the following observations by Dawson J in Banque Commerciale SA (in liq) v Akhil Holdings Limited (1990) 169 CLR 279 at 296-297; [1990] HCA 11 are apposite (see also at 286-287 per Mason CJ and Gaudron J):

[M]odern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings.

81. I consider that the relevant parts of the affidavits of Paul and Daniel, which were filed after the pleadings closed and admitted without objection, raise fresh issues about the terms of the development agreement.

82. However, this is not the end of the matter because as contemplated by term (4) of the development agreement, the parties entered into the First Building Contract with Touchstone around one year later, on 3 April 2016. I infer that this building contract varied term (3) of the development agreement as to what was to be built: it was now agreed that they would build, through Touchstone, two detached houses each with a swimming pool in accordance with the architectural plans and structural drawings forming part of the First Building Contract (and from 14 November 2017, the Second Building Contract), for a total cost of $985,000 (reduced from 14 November 2017 to $860,000), to be shared by them equally. Hence, from April 2016 there were two contracts binding on Paul and Daniel regarding the project: the development agreement and the First Building Contract which implemented one of its terms, with the latter being replaced by the Second Building Contract from 14 November 2017.

83. As noted earlier, it appears that the two houses to be constructed under the First Building Contract were not exactly the same, but they were sufficiently similar that Daniel represented to the mortgage broker in the email sent on 14 November 2016 that each house and swimming pool would be ‘identical in cost‘, which is consistent with the quotation for the cost of the works under the First Building Contract which he provided to Paul on 27 April 2016. Daniel’s email to the mortgage broker was intended to be used to raise finance for a construction loan for the construction of the two houses (each with a swimming pool). Hence, the email should be treated as reflecting Daniel’s understanding of what the First Building Contract required Touchstone to construct on the land.

84. When Paul and Daniel entered into the First Building Contract, they varied term (3) of the development agreement in that they were now party to a contract which specified precisely what they agreed to build on each parcel. There is no evidence to suggest that any other term of the development agreement was varied by their execution of the First or Second Building Contract.

85. Under the First and Second Building Contract, cl 1 requires variations of the contract (including the plans and specifications for work to be done under it) to be in writing signed by each party to the contract and cl 13 deals with how variations to the work to be done or materials to be used under the contract are to occur. Clause 13 provides relevantly:

Variations

The work to be done or materials used under this contract may be varied:

at the request of the owner, or

at the request of the contractor: If the necessity for the variation is due to the fault of the contractor the owner will not be liable for any increase in the contract price; or

…

Procedure for variations

Before commencing work on a variation, the contractor must provide io the owner a notice ln writing containing a description of the work and the price (including GST). If not otherwise specified the price will be taken to include the contractor's margin for overheads, supervision and profit. The notice must then be signed and dated by both parties to constitute acceptance.

If the time for completion will be delayed by the variation the contractor must include in the notice an estimate of the additional time required. Any extension of time must be dealt with in accordance with Clause 7.

The requirement for variations to be in writing does not apply where, if the work were not to be done promptly there is likely to be a hazard to the health or safety of any person or to the public or to be damage to property and the work could not be done promptly if the variation had to be put in writing before commencing the work.

Variations shall be subject to the overall conditions of this contract.

Adjustment of contract price

The cost of deletions from the contract will be deducted from the contract price. The price of any variation specified in the notice signed and dated by both parties will be added to the contract price,

Any adjustment to the contract price due to an agreed variation will be taken into account at the time of the next progress payment or paid as agreed by the parties.

86. It follows from these provisions that if either Paul or Daniel wanted to instruct Touchstone to construct something different from what was contained in the architectural plans and structural drawings forming part of the building contract, they both needed to issue a request in writing to Touchstone, and the variation, once agreed, would need to be in writing signed by each party to the contract. At the time of making the request, an issue would have arisen as to whether the variation would result in an increase in the cost and, if so, how that increase was to be borne by Paul and Daniel as between themselves. There is no evidence that either Paul or Daniel took advantage of cl 13, although clearly, as experienced builders, they would have been aware of its presence in the contract. This is significant for two reasons.

87. First, Daniel contends that the development agreement should include a term that the parties would bear equally the cost of developing the two lots except to the extent a party desired to include additional features in their lot, in which event the additional costs would be borne by that party. The evidence does not establish an express term to this effect was agreed or discussed by the parties or should be inferred from their conduct.

88. As to whether such a term should be implied into the development agreement, there is some uncertainty as to the correct approach to be taken in light of the High Court’s decision in Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39: see P Herzfeld & T Prince, Interpretation (3rd Ed, LawBook Co, 2024) at [27.150]-[27.160]. The position appears to be that it is necessary to ask whether the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case, and in addition the term must be so obvious that it goes without saying, is capable of clear expression and does not contradict any express term: Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15 at 572-573; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422 and 442; Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588; [2000] HCA 25 at [46]-[47].

89. In circumstances where the parties contemplated that the two houses (each with a swimming pool) would be the same, and would be constructed pursuant to a building contract in standard form incorporating a detailed mechanism for the making of variations to the construction work and cost of that work, an implied term of the kind suggested was not necessary for the reasonable and effective operation of their agreement. Further, such a term is not so obvious that it goes without saying because any change to the design was not simply a matter to be resolved by saying that the party who desired the change would bear the cost; they had a joint obligation to Touchstone in respect of the building cost and to the lender in respect of the funding. The latter is particularly significant because from the beginning it was clear that obtaining construction finance was going to be difficult, and any increase in the building cost would be difficult to fund. Paul’s reaction to Daniel’s decision to vary the design of No 3A to incorporate the Ritek system bears this out.

90. Secondly, cl 13 is significant because there is no evidence that Daniel took advantage of that provision to vary the specification of the work under either the First or Second Building Contract to enable the Ritek system to be used for No 3A. Indeed, despite arranging for new architectural plans and structural drawings to be issued allowing for the use of the Ritek system for No 3A, the Second Building Contract adopted the original architectural plans and structural drawings in the specification of the work to be done under it. It follows in my view that the construction of No 3A was not in accordance with either the development agreement or the First or Second Building Contract.

91. While in principle the development agreement could have been varied to change the nature of the dwellings to be built on the land by an oral agreement supported by consideration, I am not satisfied on the evidence that this occurred to enable the Ritek system to be used for No 3A. The cross-examination of Paul set out at [66] above does not establish any such oral agreement. At most, the evidence indicates that Paul entered into negotiations with Daniel from around 2022 to see if their dispute could be resolved amicably, and it could not.

Does the development agreement prevent the appointment of trustees for sale?

92. There is no term of the development agreement which expressly precludes one co-owner making an application under s 66G for the appointment of trustees for sale. What the defendant relies on is term (6) of the development agreement which he says is inconsistent with the making of such an order.

93. Under term (6) it was agreed that at the ‘end of the build’ Paul and Daniel would each become the registered proprietor of the parcel which it was agreed that he would take. However, that term is predicated on the house on each parcel being constructed in accordance with the building contract entered into with Touchstone. That follows from term (6) itself which applies ‘at the end of the build’ which is to be construed as a reference to the construction of each house and swimming pool under the building contract referred to in term (4). It is also necessary to construe term (6) in this way to give the development agreement a businesslike construction on the assumption that the parties intended to produce a commercial result: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]. In my view, the agreement of each party to permit the other to become the registered proprietor of the parcel it was agreed they would take would only make commercial sense, in circumstances where they were each bearing the cost of construction (including liability for the finance to fund the construction) 50:50, if the houses to be built were those identified in, and were constructed in accordance with, the building contract entered into by them with Touchstone.

94. However, as events turned out, the two houses were not built in accordance with the First or Second Building Contract because the construction of No 3A does not reflect the architectural plans and structural drawings forming part of those contracts. It follows that term (6) of the development agreement is not enlivened and does not preclude the appointment of trustees for sale under s 66G.

95. That the two houses are substantially different as a result largely of the use of the Ritek system for the construction of No 3A is confirmed by the following evidence given by Daniel in cross-examination:

Q. But you told me not even five minutes ago that from the available funds, which you’ve agreed was over $1.2 million there was more than enough to build these two detached houses at Revesby to completion, correct?

A. It should have been.

Q. The reason there wasn’t is because not all of the available funds were used to build they houses. They were used to fund other Touchstone projects and other Touchstone expenses, correct?

A. Incorrect.

Q. The other reason is you changed the way in which you built the house that you were proposing to occupy, number 3A, correct?

A. Correct.

Q. Can I just run through those changes? Each of these houses were to be of brick veneer construction, weren’t they?

A. In the original DA submission.

Q. And in your original discussions with the architect which you refer to in your affidavit you speak about the two houses being the same and being built with brick veneer construction, don’t you?

A. Early on, yes.

Q. You changed the form of construction on number 3A so instead of having a timber frame with a brick veneer wall your walls on the ground floor were constructed out of concrete, correct?

A. Ritek.

Q. Maybe so but concrete was used to build the wall?

A. A modular panel, yep.

Q. The first floor of number 3A is a suspended concrete slab, isn’t it--

A. It is.

Q. --whereas in number 3 it was a suspended timber floor--

A. Yes.

Q. --consistent with brick veneer construction, correct?

A. Correct.

Q. Then the first floor of your place, number 3A, also has solid concrete walls, doesn’t it?

A. On the exterior.

Q. The first floor of your uncle’s house continues the brick veneer construction, correct?

A. Correct.

Q. The patio on the first floor on your place is concrete consistent with the concrete suspended slab?

A. Of course, of course.

Q. The patio on Paul’s place is suspended timber, correct?

A. Correct.

Q. So the form of construction for your house is substantially different to the way in which Paul’s house was constructed; is that right?

A. That’s right.

96. That the construction of No 3A was not in accordance with either the First or Second Building Contract was brought about by Daniel through his control of Touchstone, and this amounted to a breach by him of the development agreement.

97. The submissions made by counsel for Daniel proceeded upon an assumption that it is incumbent on Paul to plead and prove that he is entitled to the s 66G order. However, that assumption is not correct. Rather, the authorities make plain that where (as in the present case) the parties are tenants in common in equal shares over the properties, it is incumbent upon the defendant, being the co-owner who opposes the making of an order under s 66G, to establish why that order should not be made: Chalhoub v Chalhoub [2005] NSWSC 572 at [17]-[18], cited in Pascoe v Dyason [2011] NSWSC 1217 at [7] (the latter cited with apparent approval in Ferella at [36]). If the defendant cannot establish that there is an obligation on Paul which precludes an order under s 66G being made (and, in my view, he has not), then there is no impediment to the making of such an order.

98. I also do not accept the criticisms made by counsel for Daniel of the manner in which Paul pleaded his case (even if only to make an onus, rather than pleading, point). Throughout the hearing, the parties accepted that because the development agreement was an informal contract, the Court’s task is to determine what the terms of the agreement were. In so doing, the Court needs to come to its own conclusion, having regard to all of the relevant circumstances, about the precise content of the agreement, and is not constrained by the pleadings for the reasons given earlier.

99. If I am wrong in the conclusion reached above as to term (3) of the development agreement, and the relevant term is, as agreed on the pleadings, that the parties would build a house and swimming pool on each parcel of equal value, the position would be the same. Again, term (6) is predicated on term (3) having been met and there is no evidence to establish that the house and swimming pool on each parcel are of equal value.

100. For these reasons, the development agreement does not preclude the appointment of trustees for sale under s 66G, and Paul is entitled to such an order.

What further relief should be granted?

101. Section 66I provides that ‘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’. In closing submissions, counsel for Daniel has indicated that should an order under s 66G be made, the Court should, pursuant to its discretion under s 66I, make those orders on terms allowing him to bid for No 3A without paying a deposit and not requiring possession to be given before completion. I accept that submission.

102. In addition, I consider that it is necessary to make orders for an account to determine the extent to which each co-owner has incurred expenditure on improvements which have increased the value of the land for which each has a right of contribution in equity: Leigh v Dickeson (1884) 15 QBD 60 at 67; Squire v Rogers (1979) 39 FLR 106 at 125-126; Maio v Sacco [2009] NSWSC 413; (2009) 14 BPR 27,591 at [5]-[6]. That is an equitable right which arises on the sale of a property in co-ownership following the appointment of trustees for sale under s 66G and is separate from the claim in contract the subject of the cross-claim. While an order for an account to determine such an allowance is necessary is not relief granted under s 66G, it is incidental to the making of an order under s 66G because it is usual to have an enquiry of this kind to ensure that one co-owner does not unfairly benefit from the making of improvements by the other co-owner which have increased the value of the property: Leigh v Dickeson at 67.

103. Further, if either co-owner has paid an amount in respect of a debt for which he is jointly liable with the other (such as a mortgage instalment or rates or land tax levied on the land) then prima facie he would have a right to require the other to contribute a rateable amount under the equitable doctrine of contribution: Forgeard v Shanahan (1994) 35 NSWLR 206; (1994) 18 Fam LR 281 at 224.

104. While, for reasons which follow, Daniel has failed on his claim in contract under the cross-claim largely because of a failure to produce records to substantiate the claim, he maintained in cross-examination that he does have records to substantiate at least some of the expenses incurred in building the two dwellings (T124.30). This is not a situation where the evidence establishes that due to poor record-keeping the accounting would be unlikely to produce a meaningful outcome (in contrast to Myers v Clark at [178]). In my view, Daniel should be allowed the opportunity to produce such records (or other admissible evidence of the claimed expenditure) as part of the accounting process.

105. I will hear the parties on the form of orders to give effect to the accounting process. This will not delay the sale which will necessarily take some time, particularly as the appointment of trustees for sale cannot be made without further evidence and submissions, for reasons which follow.

Conclusion

106. While I have accepted the plaintiff’s submission that trustees for sale of the two properties should be appointed under s 66G, the evidence before the Court does not permit the making of orders for this purpose. Under s 66G(3)(a), where the proposed trustees are individuals there must be at least two of them and the present application is for the appointment a single trustee, Mr Williams. This appears to be an oversight on the part of the plaintiff, and was not addressed at the hearing. There will need to be further evidence including the consent of at least one further proposed trustee and evidence as to their fitness for the role: Anson v Anson [2004] NSWSC 766 at [75]. I note that it is common for solicitors or accountants to be nominated, given the nature of the duties undertaken by trustees for sale.

107. There is a further issue with the proposed appointment of Mr Williams, which is that he states in his affidavit that he proposes to charge for his work as trustee at a commission rate of 1.5% for each property, and the proposed orders for his appointment include authorising payment of such commission from the proceeds of sale. It is not immediately apparent that a commission rate of this amount is appropriate for the role of a trustee for sale of the two properties (as opposed to a real estate agent acting for the trustees on the sale). If the plaintiff wishes Mr Williams to be appointed, there will need to be further submissions as to why it is appropriate to allow him remuneration at this rate.

The cross-claim

108. Under the cross-claim Daniel contends that Paul is indebted to Daniel for 50% of the total amount of $670,784.23 which was ‘advanced’ by Daniel for the purposes of the development which Paul is obliged to share equally under the terms of the development agreement and in breach of the development agreement he has failed to do so. These amounts (of which Paul’s 50% share is $335,392.12) are identified in paragraph 4 as follows:

109. an amount of $47,500 said to have been paid by Joseph as a loan to Paul and Daniel in respect of the deposit paid under the Land Contract;

110. an amount of $61,153 paid by Daniel in the period from 27 April 2016 to 13 July 2017 ‘by way of loan for the development’ as a result of the parties’ failure to obtain a construction loan;

111. an amount of $542,195.88 paid by Daniel on 18 July 2017 out of the proceeds of sale of the Revesby property ‘by way of loan for the development’, again as a result of the parties’ failure to obtain a construction loan; and

112. a further $19,935.35 paid by Daniel on 18 July 2017.

113. For the reasons that follow, I find that Daniel has failed to establish his entitlement to any of the amounts he sought in the cross-claim.

The $47,500 amount

110. It is not in dispute that Daniel paid half of the deposit specified in the Land Contract, in the amount of $47,500. The dispute relates to the remaining $47,500. Daniel’s pleaded case is that (a) this was paid to the vendor with funds provided by his father, Joseph, by way of a loan to Paul and Daniel, although in cross-examination Daniel said it was a loan to Paul only, and (b) this ‘loan’ was repaid when Daniel drew a cheque for $48,000 on the ANZ Joint Account on 14 July 2015.

111. Rather confusingly, Daniel deposed in his first affidavit that this cheque was in repayment of another loan made by his father for the stamp duty on the Land Contract which was $38,240 and sought in cross-examination to explain the discrepancy between the two amounts as a payment of interest on the loan (of some 400%). As Mr Alexis SC put to Daniel in cross-examination, the most likely explanation for the payment of the stamp duty is that it came out of the surplus of $40,505.80 from the ANZ loan after payment to the vendor of the amount due on settlement of $902,577.06. While Daniel did not accept this was so, there is no other explanation for what happened to the surplus of the ANZ loan.

112. In Daniel’s cross-examination regarding the source of the $47,500 said to have been paid as the other half of the deposit, the following exchange took place:

Q. You know don’t you that your uncle says that when your father Joseph paid the deposit of $47,500 he did so from money that he, Joseph, was holding on behalf of Paul from their parents' estate? You know he says that, don’t you?

A. He says that.

Q. Is this right, that if your father paid the $47,500 on behalf of Paul, he was either using Paul's funds from the estate, that's one possibility, is that right?

A. No.

Q. I know you don’t agree with it, but Paul says that was the source of the funds and--

A. That's what he says, yeah.

Q. Can you just accept that's one possibility?

A. One possibility, but by father wasn’t the executor.

Q. In any event, the other basis upon which the money might be paid by your father was as a gift from him to Paul, which is unlikely?

A. Unlikely.

Q. Or as a loan from him to Paul?

A. Sure.

Q. That's the more likely?

A. More likely.

…

Q. But the basis of how that amount of money that Joseph paid was paid as between he and his brother is a matter between he and his brother, isn't it?

A. Yeah, it's got nothing to do with me.

Q. In your cross-claim, have I understood correctly that you were treating the payment as a loan from your father to Paul that you are trying to recover?

A. Can you repeat that?

Q. In your cross-claim, am I correct to understand that you are treating the payment as a loan from your father to Paul?

A. A loan from my father to Paul? No.

Q. What is it? The first element of your cross-claim is based on your father paying $47,500 as the deposit on behalf of Paul, aren’t you?

A. That's what it says there.

Q. But it must follow that this is a loan from your father to Paul that you're trying to recover as the first element of your cross-claim, correct?

A. Incorrect.

Q. Do you accept that it is a loan from your father to Paul, as you would see it?

A. No.

Q. Can you explain to me how you say you're entitled to half of an amount of money that was paid by your father to Paul for the deposit?

A. I don't have an answer.

Q. One thing that it's clearly not is a contribution that you made yourself to Paul for the deposit, is it?

A. No.

113. There are a number of difficulties with Daniel’s claim in respect of the $47,500. First, the evidence contained in the settlement sheet referred to earlier indicates that the only amount paid to the vendor in respect of the deposit was $47,500, and it is not in dispute that this amount was paid by Daniel. Secondly, there is no evidence to support the making of a loan by Joseph to Paul (or to Paul and Daniel) of $47,500. Joseph did not give evidence (although he was in Court during the hearing) and there is nothing in writing to support the existence of any such loan. Thirdly, while there is a debit to the ANZ Joint Account of $48,000 and a cheque butt with Joseph’s name on it as the payee, this does not provide any explanation for the payment. Fourthly, Daniel could not explain in his evidence how it was that this amount could be a contribution he made to the project.

114. For these reasons, Daniel has not established that Paul has an obligation to pay 50% of this amount.

The $61,153 amount

115. The claim for 50% of the amount of $61,153 is made of the basis that it is the total of Daniel’s contributions to the project in the period between 27 April 2016 to 13 July 2017, comprising 22 amounts itemised in the Defence at [16(a)]. The only evidence for these payments having been made is the Spreadsheet referred to earlier which describes the amounts as either ‘loan from Dan’, ‘transferred from ANZ account’ or ‘transferred from James’ but without any further explanation or any documentary support. The reference to ‘James’ appears to be to Daniel’s brother who was not involved in the project.

116. Daniel deposed that he commenced preparing the Spreadsheet in May 2016 to record when he or Paul made an injection or withdrawal of funds for the purposes of the project, and continued doing so until 10 February 2021. The Spreadsheet was admitted subject to a limitation under s 136 of the Evidence Act 1995 (NSW) that it is only evidence that it had been created by Daniel and not the truth of its contents, because it is self-serving and entirely conclusionary in nature. Little weight can be given to the document as its contents (in particular, its characterisation of the various entries as contributions by Daniel to the project) were not corroborated by any documentary records: Re Wetherill Park Holdings [2021] NSWSC 282 at [21].

117. That conclusion is reinforced by the presence of significant errors and mischaracterisations by Daniel in creating the Spreadsheet, which came to light during his cross-examination as follows:

Q. Can I then examine the next element, the $61,153? That's based I think on paragraph--

A. That figure's incorrect.

Q. --16A of your defence, and if you turn to 16A of the defence you'll see that you set out a table on page 18 or 19 of the court book of various amounts seemingly paid on various dates totalling that sum, 61,153--

A. What are we looking at now, sorry?

Q. I'm looking at page 18 and 19 of your defence.

A. Yep.

…

Q. When you examine the entries in paragraph 16A of your defence against your spreadsheet, they seem to be recorded in the spreadsheet with entries "Loan from Dan" or "Transfer from James", do you see that?

A. Yes.

Q. We know don’t we that what James was actually doing was repaying into the joint account money that was advanced to him and was spent, for example, on the purchase of a car, correct?

A. It was probably excess money coming back, yep.

Q. I think I asked you earlier, was James ever contributing to the funding of the development and you said no?

A. No.

Q. In truth, this was James repaying moneys that had been paid to him from the joint account, correct?

A. Yes.

Q. In relation to Touchstone, Touchstone was also repaying to the joint account moneys that had been advanced to that company from time to time, is that not so?

A. Can you repeat the question?

Q. What I want to suggest just to try and cut through this, is that you've treated these amounts as contributions that you have made when in fact the money according to the bank statements was being paid by Touchstone to the joint account?

A. One and the same.

Q. I'm sorry?

A. Well, it's money from the Touchstone account I used as a day to day account, because I was the sole operator of that.

Q. You drew no distinction between whether it was you operating the account or your building company was operating the account?

A. No.

Q. But it's clear isn't it, when you look at how you've treated that in your spreadsheet you've assumed that moneys that were paid by Touchstone back to the joint account which were moneys that it borrowed from time to time, you've treated them as if they're your own contributions to the development, haven't you?

A. Yes.

118. In this evidence, Daniel accepts that many of the items making up the amount of $61,153 recorded in the Spreadsheet were in fact the repayment of monies previously advanced by way of loan to third parties (including Touchstone and his brother, James). For example, Daniel paid $25,000 to James from the ANZ Joint Account on 15 December 2016. There is no evidence at all, either from the Spreadsheet or documentary records, as to how much of the payments by Touchstone or James (or Daniel) were further ‘contributions’ to the project and how much were merely repayments of payments previously made from the ANZ Joint Account by Daniel, and thus no way to determine whether Paul had actually received a benefit from Daniel making a contribution which funded expenses of the project.

119. Further, given that Daniel had control over the day to day operation of the ANZ Joint Account and used it for the purpose of making payments unrelated to the project, even if the items making up the amount of $61,153 did constitute further injections of funds by Daniel or his related entities, it is not established that they have been applied to the construction of the two houses under the development agreement (such that those funds could be considered costs of the project to which Paul would be liable as to half).

120. For these reasons, Daniel has not established that Paul has an obligation to pay 50% of this amount.

The $542,195 amount

121. Daniel claims 50% of the amount of $542,195.88 shown in the Spreadsheet as a contribution by Daniel from the sale of his Revesby property, which he corrected in his evidence as being $541,195.88 representing the amount transferred to the ANZ Joint Account on 18 July 2017 from the proceeds of sale of that property.

122. While it is not in dispute that this amount was transferred to the ANZ Joint Account on that day there is a dispute as to the extent to which any of it was spent on the project. Daniel confirmed in cross-examination that he included this amount in the Spreadsheet on the assumption that all of the money was spent on the construction of the two houses. However, I am not satisfied that this assumption has been established.

123. It is clear from Daniel’s evidence in cross-examination that significant portions of that sum were spent on Daniel’s personal expenditure unrelated to the project (including meals and petrol) or on amounts which are completely unverifiable (such as purported cash payments by Daniel to tradespeople for which there are no records). In circumstances where Daniel has made a blanket claim for 50% of the amount of $541,195.88 and has not made any attempt to establish by admissible evidence how much of it was used for the project, I am not satisfied that he has discharged his onus of proving that this amount (or any part of it) was spent on the project.

124. Hence, Daniel has not established that Paul has an obligation to pay 50% of this amount.

The $19,935.35 amount

125. Daniel claims 50% of the amount of $19,935.35, which is described in the Spreadsheet as ‘a loan from Dan amount’ on 18 July 2017. Daniel accepted in cross-examination that it was not an amount he actually contributed to the project. He gave the following explanation of this claim in cross-examination:

Q. Finally, can I deal with the last element of your cross-claim which is the $19,935.35? Do you see that?

…

Q. --16C of your defence on page 19, you'll see that you've put a date 18 July 2017 next to that number $19,935, do you see that?

A. Yes.

Q. We have closely examined the joint ANZ Bank account that was operating at this time, and in particular in July 2017 and we have been unable to find any deposit or contribution by you into that joint account of $19,935.35 or anything like it?

A. Yes.

…

Q. Can you tell us how you contributed that sum of money to the development if we don’t find it in the joint bank account?

A. So when I sold my house we ended up with 580,00 in like by the time - at this 20 Albert Street. And then because my house was being used as security at 20A Albert Street at the time, they garnished an amount of money to $19,935 and then left me with $541,000, and there was some money that I also used for my own personal effects, but, yeah. This is a number that comes up that--

…

A. Yeah, so the only, the only - this is a, this is a banking thing that, that occurred. And then there was a release of that - of the--

Q. Garnishee order?

A. Yeah, no, no it was a, it was a release of the - what do you call it, the security when we went to Westpac, there was like a release of, of the security off, off 20A Albert Street, so this, this--

Q. The question is how did that money--

A. --money.

Q. --find its way into this project?

A. I have no idea.

Q. The point is, you're putting it into the project--

A. Yeah, yeah.

Q. --sorry, you're putting it into your spreadsheet as if it is a contribution from you--

A. Yeah.

Q. --to the project, but the question you're being asked is, how did that come about? The mere fact that there was a garnishee notice and the money is then withheld--

A. It's not a--

Q. --doesn’t bring it into this project?

A. Sorry, your Honour, it wasn’t a garnishee notice, no.

Q. Security then?

A. Yeah.

Q. Whatever it was. But the point is, how does it come into this project, by reason of it being withheld from your sale of your other property?

A. Yeah.

Q. How does it come into this project?

A. It's probably an error, to be honest, yeah.

126. Daniel’s acceptance that the inclusion of a claim for 50% of this amount was ‘probably an error’ reflects several problems with the claim. First, there is no evidence which establishes that the ANZ in fact charged him $19,935.35 on the sale of his Revesby property or, if it did, on what basis it did so. Secondly, there is no evidence to suggest that such an amount is properly attributable as a cost of the project.

127. For those reasons, Daniel has not established an entitlement to 50% of this amount.

Conclusion

128. As I have found that Daniel has not discharged his onus of demonstrating his entitlement to any of the four amounts claimed in the cross-claim, it follows that prayers 1-3 of the cross-claim should be dismissed.

129. As noted earlier, the cross-claim also sought an account under Pt 46 of the UCPR. Very little time was spent on this claim either in written or oral submissions and the basis on which it was put was not explained beyond a submission that any issue concerning the evidentiary support for the amount claimed under the cross-claim was capable of being addressed by orders for an account under Pt 46.

130. The Court may order an account under r 46.2(1) of the UCPR or in its equitable jurisdiction. A plaintiff who seeks the remedy of an account must prove that the defendant is an accounting party, and that the plaintiff is entitled to some (uncertain) sum from the defendant: Hancock v Rinehart [2015] NSWSC 646 at [338]. However, it is not enough for the plaintiff to show that he might be owed some money by the defendant: J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane’s Equity*:* Doctrines & Remedies (5th ed, LexisNexis, 2015), [26-085].

131. No submissions were made as to why Paul is an accounting party in the relevant sense, and in circumstances where it was Daniel rather than Paul who administered and controlled the funds used for the project and Daniel’s claim against Paul is for a debt claimed for breach of a contractual obligation to bear costs equally, it is not clear why Paul is properly regarded as an accounting party; the purpose of the account appears to be merely to show that Daniel may be owed some money by Paul. Further, to order an account would be to permit Daniel to re-agitate the same issues which have already been the subject of evidence and a hearing. For these reasons and bearing in mind that the making of an order for an account is discretionary, it is not appropriate to order an account under r 46.2 of the UCPR.

132. I note that the claim for an account under the cross-claim is quite different from the accounting process I have addressed above in relation to the appointment of trustees for sale under s 66G.

Costs

133. As Daniel failed on the cross-claim there is no reason why the usual rule that costs follow the event should not apply to the cross-claim.

134. Despite Paul’s substantial success in relation to his application under s 66G, it is well-established that in an application under s 66G, the default position is that costs of all parties are paid out of the proceeds of sale in the same proportions as their proportionate interest in the land, on the basis that those costs are an incident of the dissolution of the co-ownership: see eg Kardos v Sarbutt *(*No 2) [2006] NSWCA 206 at [28]; Chow v Chow *(*No 2) [2015] NSWSC 1348; (2015) 18 BPR 35,385 at [8]; Chetwynd v Rose [2021] NSWCA 193 at [120]. I see no reason to depart from this position, noting that this is not a case where either party’s conduct was so unreasonable as to cause unnecessary costs to be incurred (cf eg Lewin v Lewin [2019] NSWSC 380; (2019) 19 BPR 39,225) at [42]). If either party seeks a different order as to costs, this can be addressed in the short minutes of order referred to in order 2 below.

Conclusion and orders

135. For the above reasons: (1) the plaintiff has succeeded in his application for the appointment of trustees for sale under s 66G, but further submissions and evidence are required as to the proposed trustees, the form of orders for the sale under s 66G and the accounting process to determine the allowances to be given under the principles of equitable contribution; (2) the cross-claim should be dismissed with costs.

136. The orders of the Court are:

137. The cross-claim filed on 10 October 2024 is dismissed with costs.

138. Direct the parties within 21 days of today’s date to bring in short minutes of order providing for the further conduct of the proceedings.

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