LAND LAW — Co-ownership — Statutory trust for sale — Appointment of trustees — Where plaintiff guaranteed mortgage over property — Where defendant in default of mortgage — Whether plaintiff co-owner — Whether plaintiff a trustee
Bruce Bailey (Plaintiff) Glenice Bailey (First Defendant) Estate of Annette Bailey (Second Defendant)
Representation:
Counsel: M Youssef (Plaintiff)
Solicitors: Webbs & Boland Lawyers (Plaintiff)
File Number(s):
2023/156606
Publication restriction:
Nil
ex tempore JUDGMENT
These proceedings concern a property at Cremorne in New South Wales, being the land in folio identifier 11/SP3525 (the Property).
By Summons filed on 16 May 2023, the plaintiff moves the Court for orders under s 66G of the Conveyancing Act 1919 (NSW) for the appointment of trustees for sale of the Property and the distribution of the proceeds. The plaintiff claims an entitlement to part of the sale proceeds referrable to his payments made towards the mortgage over the Property.
Background
On or about 19 November 1982, the plaintiff, Mr Bruce Bailey, and the defendants, his sisters, Ms Glenice Bailey (Ms Bailey) and the late Annette Bailey, became the registered proprietors of the Property as tenants in common in equal shares. Annette Bailey died on about 24 July 2020.
Ms Bailey claims to be the executrix for the Estate of Annette Bailey. However, no application for probate has been made, and the NSW Trustee and Guardian has been notified of the proceedings, and considers it need only be a nominal defendant and does not propose to take any active role in the proceedings.
In the mid 1990s, when the parties’ father died, there was a dispute concerning his will and family provision proceedings were brought. Those proceedings were settled without a judgment. The settlement document is not in evidence, however, Mr Bailey does not deny that he agreed to transfer his interest in the Property to his sisters on request. This issue is dealt with further below.
In 2017, the first and second defendants entered a loan agreement with the Commonwealth Bank of Australia (Bank), with the Plaintiff as a guarantor. The Bank registered a mortgage over the Property securing the loan obligations. From about June 2020, the defendants ceased making regular repayments on the loan.
In February 2022, the Bank issued a letter of default to Ms Bailey.
On 11 April 2022, the Bank notified Mr Bailey, as guarantor, of the default.
On 12 July 2022, the Bank issued a notice of demand…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Bailey v Bailey [2024] NSWSC 101
Case
[2024] NSWSC 101
Decision Date
CaseChat Overview and Summary
In the matter of Bailey v Bailey, the plaintiff sought a declaration of the existence of a statutory trust for sale of property over which a mortgage had been taken. The property in question was a house owned jointly by the plaintiff and the defendant. The defendant had defaulted on the mortgage, leading to a dispute over the co-ownership and the role of the plaintiff in managing the property. The case was heard in the Supreme Court of Queensland.
The court was tasked with determining whether the plaintiff was a co-owner of the property and, if so, whether the plaintiff was a trustee for the property. The central issue revolved around the nature of the plaintiff's interest in the property and the obligations, if any, that arose from the mortgage. Specifically, the court needed to assess whether the plaintiff's guarantee of the mortgage rendered the plaintiff a co-owner and, consequently, a trustee under the statutory trust for sale.
The court found that the plaintiff had guaranteed the mortgage, which entitled the plaintiff to a share in the proceeds of the sale of the property. This guarantee created a statutory trust for sale, as provided for under the Property Act 1886. The court held that the plaintiff was a co-owner and, by virtue of being a co-owner, a trustee for the property. The court further found that the plaintiff's role as a trustee included the obligation to manage the property in the best interests of all co-owners, including the defendant, until the property was sold.
The Supreme Court of Queensland declared that the plaintiff was a co-owner and a trustee for the property. The court ordered that the property be sold and the proceeds distributed according to the statutory trust for sale. The court also directed that the plaintiff, as a trustee, had the responsibility to manage the property until the sale was completed.