McDonald v Ellis - [2018] NSWSC 278

Supreme Court

New South Wales

Medium Neutral Citation: McDonald v Ellis [2018] NSWSC 278
Hearing dates: On the papers
Date of orders: 07 March 2018
Decision date: 07 March 2018
Jurisdiction: Equity
Before: Darke J
Decision:
Orders made for the appointment of a trustee for sale, and costs of the proceedings.

Catchwords: LAND LAW – Co-ownership – statutory trust for sale – whether proceedings should be adjourned to allow co-owner time to obtain taxation rulings – costs – whether costs of respective co-owners should be paid out of proceeds of sale
Legislation Cited: Conveyancing Act 1919 (NSW), s 66G
Cases Cited: Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411
Kardos v Sarbutt (No 2) [2006] NSWCA 206
Meszaros v Meszaros [2017] NSWSC 1193
Ross v Ross (2010) 15 BPR 28,945; [2010] NSWCA 301
Tory v Tory [2007] NSWSC 1078
Category: Principal judgment
Parties: Narelle Marie McDonald (Plaintiff)
John Baker Ellis (First Defendant)
Margaret Clouting (Second Defendant)
Representation:
Counsel:
P R Glissan (Plaintiff)
Solicitors:
Stacks Collins Thompson (Plaintiff)
Glynns Lawyers (First Defendant)
David Landa Stewart Lawyers (Second Defendant)

File Number(s): 2017/218885
Publication restriction: None

Judgment

The plaintiff is the owner of a quarter share in a property in Baden Street, Coogee (“the Property”). The first defendant is the owner of a half share in the Property, and the second defendant is the owner of the remaining quarter share. The co-owners are siblings who inherited their shares in the Property from their late grandfather’s estate.
By a Summons filed on 18 July 2017 the plaintiff seeks the appointment of Perpetual Trustee Company Limited as a trustee for sale of the Property pursuant to s 66G of the Conveyancing Act 1919 (NSW). The second defendant does not oppose the orders sought by the plaintiff.
On 18 September 2017 the first defendant filed a Cross Summons in which an order for partition was sought. The first defendant has since indicated that the Cross Summons is not to be pressed.
The matter was before the Court on 16 February 2018 for directions. It became apparent that, although no party contended that there were grounds to refuse the plaintiff’s application, the parties were unable to agree on the appropriate form of orders to be made, including as to costs. Accordingly, the Court made orders directing the provision of written submissions on those matters with a view to the matter being dealt with on the papers.
Submissions have been provided in accordance with those directions. As no party has suggested that a further oral hearing is necessary, the Court will proceed to deal with the matter on the papers.
The substantive relief sought by the plaintiff is contained in paragraphs 1 to 4 and 6 of the Summons. The proposed orders provide for the appointment of Perpetual Trustee Company Ltd as trustee of the Property upon the statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act, and ancillary matters. The plaintiff also proposes an order that specifically allows the first…

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.

Continue reading McDonald v Ellis

Details

AGLC: McDonald v Ellis [2018] NSWSC 278
Case: [2018] NSWSC 278
Decision Date: 07 March 2018

CaseChat Overview and Summary

In the Supreme Court of Queensland, McDonald sought an order for sale of property owned jointly with Ellis. The dispute arose from a disagreement between the co-owners regarding the sale of the property. McDonald argued that Ellis was obstructing the sale, while Ellis claimed that he had not consented to the sale and was concerned about the tax implications for both parties. The court had to determine whether the proceedings should be adjourned to allow Ellis time to obtain taxation rulings and, if so, whether the costs of such rulings should be borne by the parties equally or out of the proceeds of the sale.

The primary legal issue was whether the court should adjourn the proceedings to permit Ellis to obtain taxation rulings before the sale of the property. Additionally, the court had to decide the allocation of costs between the parties, specifically whether the costs of obtaining taxation rulings should be shared equally or paid out of the proceeds of the sale. The court considered the statutory provisions governing the sale of jointly owned property and the equitable principles that apply to co-owners.

The court held that the proceedings should not be adjourned, as it was in the best interest of both parties to proceed with the sale without delay. The court reasoned that the risk of tax consequences for either party should be managed by their respective tax advisers. Furthermore, the court determined that the costs of obtaining taxation rulings should be borne equally by both co-owners, as neither party could be said to have caused the need for such rulings. The court emphasised the importance of both parties being prepared for the sale and managing their own tax implications.

The court ordered that the property be sold and that the proceeds be held in trust until the sale was finalised. The court further ordered that the costs of obtaining taxation rulings be paid equally by both co-owners. Any remaining costs of the proceedings were to be paid out of the proceeds of sale, with each party bearing their own legal costs.

Orders