Roderick Mackay Sutherland in Trustee of the Property of Kerrie Nisic aka Kerrie Tsaprounis, a Bankrupt v Eugina Tsaprounis

[2014] NSWSC 1255

Supreme Court

New South Wales

Medium Neutral Citation:

Roderick Mackay Sutherland in Trustee of the Property of Kerrie Nisic aka Kerrie Tsaprounis, a Bankrupt v Eugina Tsaprounis [2014] NSWSC 1255

Hearing dates:

9 September 2014

Decision date:

09 September 2014

Jurisdiction:

Equity Division

Before:

Young AJA

Decision:

1.Order pursuant to section 66G of the Conveyancing Act 1919 ("the Act") that

(a)Daniel Civil of Level 4, 55 Hunter Street Sydney NSW and

(b)Geoffrey McDonald of Level 9, 255 Macquarie Street, Sydney NSW ("the Trustees") be appointed Trustees for Sale of the real property comprised in Certificate of Title Folio Identifier 56/B/10131 together with all improvements erected thereon and known as 61 Seymour Parade, Belfield in the state of New South Wales ("the Property").

2.Order that the Property be vested in the Trustees subject to any encumbrances affecting the entirety of the Property but free from encumbrances, if any, affecting any undivided share or shares therein, to be held by the Trustees on statutory trust for sale under Division 6 or Part IV of the Act.

3.Order that the Defendants deliver to the Trustees all the documents of title in respect of the Property within their possession within seven (7) days.

4.Order that the Trustees sell the Property by public auction or by private treaty (as the Trustees deem appropriate) at the best price available.

5.Order that the Trustees be empowered to:

(a)Appoint agents, valuers, solicitors and/or conveyances as required to sell the Property;

(b)Make all necessary adjustments of rates and taxes on settlement of sale of the Property;

(c)Deduct from the proceeds of sale of the Property, the commission and other expenses of any real estate agent employed by the Trustees;

(d)Deduct from the proceeds of sale of the Property, the remuneration and expenses of the Trustees relating to the sale of the Property;

(e)Deduct from the proceeds of sale of the Property, the legal expenses of an relating to transferring the Property to the respective purchasers;

(f)Deduct from the proceeds of sale of the Property, the legal expenses in respect of the sale including (without limitation) valuation fees, insurance premiums and all other out of pocket expenses;

(g)Deduct from the proceeds of sale of the Property, legal expense, if any, of and relating to these proceedings;

(h)Pay the net balance of the proceeds of sale of the Property, between the following parties in equal one third shares:

(i)The Bankrupt Estate of Kerrie Nisic;

(ii)Eugina Tsaprounis; and

(iii)Suzy Tsaprounis.

6.Order that the Trustees be authorised to charge remuneration at the usual professional rates charged by Jirsch Sutherland from time to time.

7.The Trustees be at liberty to seek the advice of the Court on any matter arising from their appointing or these orders.

8.Order that the Defendants give vacant possession of the Property to the Trustees within 28 days.

9.The costs of the plaintiff may be deducted from the proceeds of sale.

10.Stay all of the above orders until 9 October 2014 and in amplification of Order 8 a writ of possession may issue on or after 7 November 2014.

Catchwords:

REAL PROPERTY - Co-owners - Statutory power of sale - Application by bankruptcy trustees of one co-owner - Whether bankruptcy trustees ought be appointed as trustees of sale - whether costs of trustess relevant when considering the appointment of a trustee in bankruptcy as trustee for sale - whether mortgagee ought be notified

Legislation Cited:

Conveyancing Act 1919 (NSW)

Cases Cited:

Dixon v Roy (1991) 5 BPR 11655
Harb v Harb [2010] NSWSC 1251
Ngatoa v Ford (1990) 19 NSWLR 72
Re Fettell (1952) 52 SR (NSW) 221

Category:

Procedural and other rulings

Parties:

Roderick Mackay Sutherland as Trustee of the Property of Kerrie Nisic aka Kerrie Tsaprounis, a Bankrupt (plaintiff)
Eugina Tsaprounis (first defendant)
Suzy Tsaprounis (second defendant)

Representation:

Counsel:
Mr A Spencer (plaintiff)
Mr B Levet (first defendant, second defendant)
Solicitors:
Mathews Folbigg Pty Ltd (plaintiff)
Simmons and McCartney (first defendant, second defendant)

File Number(s):

2014/00110868

Publication restriction:

None

Judgment

1. This is an application by the trustee in bankruptcy of one co-owner of residential property in Belfield. The defendants are the other two co-owners.

1. The plaintiff needs to realise all the bankrupt's property for the best price he can get, and so needs to be able to sell the whole of the property, and for that purpose needs to have trustees for sale appointed. It is far preferable commercially for trustees in bankruptcy to take this attitude, rather than what has happened in some regrettable cases in the past, to sell the bankrupt's interest to a loan shark.

1. Under s 66G of the Conveyancing Act 1919 (NSW) each co-owner has the right to approach the court for partition or sale, and although the word "may" is used with respect to the court's powers under the section, except in very special cases, any applicant/co-owner is entitled to an order under the section almost as a right, see, for instance, Re Fettell (1952) 52 SR (NSW) 221 and Ngatoa v Ford (1990) 19 NSWLR 72. I need not go further because after sensible discussion between counsel, the parties have agreed on a consent order. However it is still a matter for the court to consider the appropriateness of the trustees. In the instant case one of the proposed trustees is a partner of the trustee in bankruptcy.

1. In another connection, I have said in Dixon v Roy (1991) 5 BPR 11, 655 that as the trustee must be impartial between the co-owners it is inadvisable for trustees to retain the same solicitor, and it would be inadvisable, where there is a dispute between the co-owners, that a trustee be appointed who would be perceived to be partial to one party or the other.

1. Mr A Spencer of counsel, who appeared for the plaintiff, recognised that he would be asked questions about the appointment of the trustee in bankruptcy's partner, and so referred me to the decision of Brereton J in Harb v Harb [2010] NSWSC 1251, where his Honour analyses the obligations and duties of a trustee, and indicates that there would not be a problem in this area even if the trustee in bankruptcy himself was appointed as one of the trustees. See also the decision of Davies J in Rambaldi v Woodward [2012] NSWSC 434. I agree with that view.

1. The other matter that impinges on whether the partner of the trustee in bankruptcy should be appointed is cost. No matter who is the trustee, it will be a commercial person, and will be entitled to remuneration. The hourly rate for partners in one of the leading firms of liquidating accountants, as is the present plaintiff, may well bill at $550 an hour for a partner, and proportionately less for lower ranking members of staff. If a trustee company were appointed there would be a statutory rate of commission plus expenses, and it would usually be useful to know, when considering the appointment of a trustee in bankruptcy, whether the estate would be saved by having him appointed rather than a less expensive operator. One would also have to be careful to make sure that there weren't any extra expenses, such as often occurs when there is a 'Chinese wall', or the like, in a solicitor's office, where the clerk on one side of the wall charges the client to confer with the clerk on the other side of the wall. However in the present case the parties are agreed that the appointment be made, and that the hourly remuneration rates of the plaintiff should be permitted, so that I need go no further.

1. I should note that, whilst it is not mandatory, it is good practice to notify any mortgagees of the making of the application. Those mortgagees will in any event have to be contacted for a payout figure and it may be that despite the fact that their interest is preserved under the order, they may be affected by the order.

1. Accordingly, I make orders 1 to 8 in the summons. Order that the costs of the plaintiff be deducted from the sale of the proceeds of sale. By consent I stay all of those orders until 9 October 2014, and in amplification of order 8, order that a writ of possession may issue on or after 7 November 2014.

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Decision last updated: 12 September 2014