Hughes v Hughes

[2025] QDC 175

DISTRICT COURT OF QUEENSLAND

CITATION:

Hughes v Hughes [2025] QDC 175

PARTIES:

CHERYL ANN HUGHES

(Applicant)

v

SHARRON MAREE HUGHES

(Respondent)

FILE NO/S:

125/24

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

12 November 2025 (ex tempore)

DELIVERED AT:

Brisbane

HEARING DATE:

12 November 2025

JUDGE:

Porter KC DCJ

ORDER:

1.   By Consent, the order of the Court is that $85,425.74 of the $120,601.04 held in the applicant’s solicitors’ trust account be paid to the respondent, and $35,175.30 of the funds held on trust be paid to the applicant. 

2.   No order as to costs.

COUNSEL:

J. Hughes for the applicant

G. Adams for the respondent

SOLICITORS:

Ryan Murdoch O’Regan Lawyers for the applicant

GLR Law for the respondent

1. This hearing arises out of orders made by Judge Jarro for the appointment of statutory trustees for sale of property owned by the applicant and the respondent.  The real property register records the applicant as having a 75 per cent share in the property as tenant in common with the respondent who holds a 25 per cent share or one-quarter interest.  The property was ultimately sold by the trustees.  His Honour’s orders made in February 2024 were for 75 per cent of the net proceeds to be paid to the applicant after, relevantly, the trustees’ costs and the registered mortgage debt, and the balance of 25 per cent of the net proceeds to be held pending further order of the court.

1. That 25 per cent related to the interest of the respondent as registered proprietor as tenant in common.  His Honour made an order for costs against the respondent for resisting the appointment of the statutory trustees. Those costs have been agreed and paid from the remaining 25 per cent share, leaving $120,601.04 which is presently held by the applicant’s solicitors in their trust account. 

1. The matter came on before me today on an application for the disbursal of the remaining funds.  The applicant sought two adjustments to the position which would inure based on the registered interest of the respondent:

(a)     The first was that the respondent pay the whole of the costs of the carrying out of the duties of the trustees;

(b)     The second was that the payment balance of the mortgage should not have been out of the gross proceeds of sale but should have been allocated entirely to the respondent’s share, and that an adjustment for that should now be made.

1. The respondent, for her part, opposed both orders and, also filed extensive material relating to a foreshadowed claim by her that the applicant had held a quarter of the property on constructive trust for her and that that interest could be traced into the net proceeds of sale.  The respondent did not urge that that matter be determined today but it was a matter that was sought to be agitated on pleadings.  In that sense, I have before me all the matters which the two parties presently seek to agitate, not only in respect of the distribution of funds but in respect of rights and liabilities arising out of their joint ownership of the property. 

1. The respondent raised further argument which related to her ouster from the property by a temporary protection order which was made in July 2023. The effect of this order meant that the respondent did not have access to the co-owned property for well over two years.  One could well imagine that if this matter went to pleadings, some adjustment would be sought in respect of that, and, indeed, once the parties started looking at it, one can imagine other matters of adjustment would ultimately be pleaded. 

1. I was able to determine the first point raised by the applicant on the material before me, which was that the respondent should pay the costs not just of the unsuccessful opposition to the appointment of trustees for sale but also the costs of the trustees themselves.  Based on the circumstances and having heard submissions, I reject that argument.  It seems to me that it was inevitable that statutory trustees would have had to be appointed because of the complete breakdown in the relationship of the co-owners.  It is not possible on the material to decide that one or the other person bears all the responsibility for that and, frankly, that is rarely the case. Even if it were, it seems to me the underlying policy of the statutory trust for sale process is to provide a solution to a deadlock between co-owners, and the court should be slow where that solution is availed of to impose the costs of it on one of the co-owners.

1. In all the circumstances, I am not persuaded that this is the sort of exceptional case where the costs of the trust for sale should be borne by one party, whatever might be the position in respect of the unsuccessful attempt to oppose the appointment of a trustee. 

1. The applicant’s argument about the mortgage can be encapsulated in this way.  It is uncontested that the mortgage as between the applicant and respondent was to be the respondent’s obligation.  On sale, the capital amount of the mortgage remained about $206,000, and Mr Hughes submitted, with good reason, that if the mortgage debt was the contribution of the respondent, then, to the extent that capital had not been advanced by way of repayment of the capital of the mortgage, it should come out of the respondent’s share. 

1. There was a strong argument in favour of that approach except for this.  If it were the case that the whole of that sum should be treated as the capital of the respondent, then the respondent provided something like 45 per cent of the purchase price, entitling her to 45 per cent of the capital gain and 45 per cent ownership interest.

1. It is not necessarily as straightforward as that, but complicating the applicant’s argument about the mortgage is the contention by the applicant that the respondent’s 75 per cent interest represented her capital contribution in cash, plus a half-share of the mortgage, which supports the 75/25 split.  The applicant cannot really, at the same time, say that the whole of the mortgage should be laid at the door of the respondent, yet defend the rationality of the 75/25 split.  It seemed to me then that the only way to resolve that conflict would be with a trial. 

1. I suggested to the parties that, looking at the range of issues and difficulties, they might consider accepting as a solution roughly $85,000 of the balance for the respondent and $35,000 of the remaining balance to the applicant as a practical way to resolve their disputes, and thereby avoid the whole of the $120,000 being eaten up by legal costs.

1. The parties were able to agree on that settlement.  By these reasons, I can record the parties’ formal positions, communicated to the court through their legal representatives on instructions, that each will accept the distribution of the net proceeds in the way I proposed (subject to a slight clarification of the amounts) in full satisfaction of all claims they might have against each other arising out of their joint ownership of the property or the causes of action and claims raised in the affidavits filed in this proceeding.  I describe that position in the presence of representatives for both sides, reflecting, as I understand it, the agreement that has been reached.

1. In those circumstances, I order that $85,425.74 of the $120,601.04 held in the applicant’s solicitors’ trust account be paid to the respondent, and $35,175.30 of the funds held on trust be paid to the applicant.  I make no order as to costs of today’s hearing.