Boyd v Thorn

The appeal concerned a dispute over real property held by the appellants as tenants-in-common. The respondent sought orders under section 66G of the *Conveyancing Act 1919* (NSW) for the appointment of trustees for sale of the property, following findings that the first appellant had engaged in unconscionable conduct and breached fiduciary duties. The second appellant was joined to the proceedings after these findings were made. The appeal was heard by Macfarlan and Leeming JJA, and Emmett AJA.

The primary legal issues before the court were whether the second appellant could challenge the respondent's standing to apply for orders under section 66G of the *Conveyancing Act 1919* (NSW), and whether the findings of breach of duty and unconscionability made against the first appellant were binding on the second appellant. The court also considered whether the costs of litigation could be ordered to be paid to an incumbrancer out of a co-owner's share of the proceeds of a section 66G sale, and whether co-owners should share the costs and expenses of such a sale when the sale was necessitated by the wrongful acts of one co-owner.

The court determined that the second appellant was not bound by the findings of unconscionable conduct and breach of fiduciary duty made against the first appellant, as the second appellant had not been a party to the earlier proceedings and did not have a sufficient privity of interest. The court applied the principles of issue estoppel, noting that the second appellant did not have a legal interest in the outcome of the earlier proceedings nor did they later acquire a legal interest affected by an estoppel connected to those proceedings. The court also considered the principles regarding the allocation of costs in section 66G sale proceedings, particularly where the sale is prompted by the misconduct of one co-owner.

The appeal was allowed in part, with order 6b made on 22 September 2016 being set aside. The remainder of the appeal was dismissed. The costs of the appeal were allocated between the parties, with Mrs Boyd to pay Mrs Thorn’s costs referable to ground 1, Mrs Thorn to pay Mr Boyd’s costs referable to ground 2, and Mr and Mrs Boyd to be jointly and severally liable for Mrs Thorn’s costs referable to ground 3.