Raymond Loveridge v Ian Loveridge
[2013] NSWSC 1752
•15 November 2013
Supreme Court
New South Wales
Medium Neutral Citation: Raymond Loveridge v Ian Loveridge [2013] NSWSC 1752 Hearing dates: 15 November 2013 Decision date: 15 November 2013 Before: Kunc J Decision: Order for sale granted
Catchwords: REAL PROPERTY - Tenancy in common - Proceedings for sale - Whether agreement prevented exercise of discretion in favour of plaintiff - Conveyancing Act 1919 (NSW), s 66G Legislation Cited: Conveyancing Act 1919 (NSW) Cases Cited: NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681 Category: Principal judgment Parties: Raymond Loveridge (Plaintiff)
Ian Loveridge (Defendant)Representation: Counsel: Mrs M. Bridger (Plaintiff)
Mr E.A. White (Defendant)
Solicitors: Slater & Gordon Lawyers (Plaintiff)
Michael James O'Kane (Defendant)
File Number(s): 2013/284826 Publication restriction: No
EX TEMPORE Judgment
HIS HONOUR: This is an application brought in the Applications List by the plaintiff for orders under s 66G of the Conveyancing Act in relation to the sale of a property at Concord of which the plaintiff and the defendant are tenants in common in equal shares.
The plaintiff and defendant came into the property with their sister as beneficiaries of their late mother's estate. On 20 March 2008 the plaintiff and the defendant entered into an agreement to purchase their sister's interest. In order to do so they jointly borrowed $350,000, $300,000 of which was to be paid to their sister for her share of the property and $50,000 to be used for legal fees, stamp duty and costs associated with the transfer of the property and its maintenance as agreed between them.
There are three provisions of the agreement of particular relevance:
D. The purpose of this agreement is to set out the rights and entitlements of each of the parties to the use of the property and in relation to the cost of maintaining the property and noting that Ray and Ian will each have the right to live in the property and propose to do so. ...
3. Ray and Ian shall each have the right to occupy the property for their life or until the property is sold by agreement or order of the Court, but subject to the terms of this agreement. ...
7. In the event of an intractable dispute between the parties that results in the parties no longer wishing to or being able to continue with this arrangement, Ian shall have the right to continue to reside in the house and Ray shall vacate the house on the following basis:-
a. Unless otherwise agreed, Ray shall have a period of one year to vacate the property after notification from Ian of an intractable dispute between the two of them.
b. Ray shall have the ability to use his equity in the property to finance the purchase of other suitable accommodation and Ian shall do all things and sign all documents necessary for that to occur but shall not be responsible for any payments or costs associated therewith.
c. From the date that Ray vacates the property Ian shall be liable for all outgoings in relation to it including the payment of the mortgage.
The authorities concerning the application of s 66G are conveniently set out in the judgment of Hallen AsJ (as his Honour then was) in NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681 at paras [35] to [44]. The principles are well known, in particular that a co-owner is entitled to an order under s 66G "almost as of right".
However, that entitlement is qualified by principles which are set out in that judgment to the effect that the Court may not exercise its discretion to make an order under s 66G if to do so would be inconsistent with contractual or equitable rights which one party may have against the other in relation to their interest in the property.
It was submitted for the defendant that this is just such a case.
There is force in that submission. The parties, by their written agreement of 20 March 2008 in the sections which I have set out above, have made provision for what was to occur in the event of an intractable dispute. It is common ground that such an intractable dispute has occurred and that the plaintiff has exercised his right to vacate the premises in the manner contemplated by clause 7 of the agreement. That having occurred, there is no suggestion that the defendant has done anything contrary to the provisions of clause 7. In particular, I am informed that the defendant has assumed responsibility for all outgoings in relation to the property, including the payment of the mortgage that the plaintiff and defendant took out to buy out their sister's share.
Nevertheless, effect must also be given to the precise provisions of clause 3, which admits of the possibility of sale of the property by agreement or order of the Court "but subject to the terms of this agreement". I would have been inclined to find in favour of the defendant if the plaintiff was in fact receiving or otherwise had the benefit of the various provisions set out in clause 7 in the agreement. However, the plaintiff has been unable to obtain the benefit of clause 7(b) of the agreement insofar as he has not been able to use his equity in the property to finance the purchase of other suitable accommodation. The evidence discloses that he has been unable to obtain that finance because the lender which he approached was not prepared to allow him to use the property as security in circumstances where he was only one of two co-owners. That inability takes matters outside the terms of the agreement and into so much of clause 3 as recognises that otherwise the property is able to be sold by agreement or order of the Court.
The result is that the agreement between the plaintiff and defendant, in the events which have happened, does not raise a contractual right or equity in the defendant as would dissuade the Court from exercising, as it almost invariably always does, its discretion in favour of the orders sought in the summons.
The orders of the court are:
(1) Orders in accordance with paragraphs 1 and 2 of the summons.
(2) Order the defendant to pay the plaintiff's costs of 14 October 2013 and 4 November 2013.
(3) Otherwise the costs of the parties are to be paid on the usual basis out of the proceeds of sale.
Decision last updated: 27 November 2013
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