Supreme Court New South Wales

• Medium Neutral Citation: John Allan Batty v Sharon Doherty and Anor [2013] NSWSC 1441
• Hearing dates: 27 September 2013
• Decision date: 27 September 2013
• Jurisdiction: Equity Division
• Before: Slattery J

Decision

A Court annexed mediation ordered and direction given.

• Catchwords: REAL PROPERTY - application for appointment of trustees for sale Conveyancing Act 1919 s 66G - property owned by six siblings in equal shares - whether service of the Summons on all co-owners proved - one of the co-owners bankrupt - whether, and if so how, the trustee in bankruptcy should be joined as a party - outstanding dispute between the parties in relation various property related payments made by two of the co-owners - potential promissory estoppel claim by one of the co-owners.
• Legislation Cited: Conveyancing Act 1919 s 66G
• Cases Cited: Re Debney (1959) SR (NSW) 471; Ngatoa v Ford (1990) 19 NSWLR 72; Williams v Legg (1993) 23 NSWLR 687.
• Category: Interlocutory applications
• Parties: Plaintiff: John Allan Batty; First Defendant: Sharon Doherty; Second Defendant: Jeannie Batty
• Representation: Counsel: Plaintiff: P Nagle; Second Defendant: T Flaherty; Solicitors:
• File Number(s): 2013/8559
• Publication restriction: No

EX TEmpore Judgment

1 This matter was last before me in the Applications List on 13 September 2013. On that occasion Mr Nagle appeared for the plaintiff but there was no appearance for any of the defendants. I adjourned the matter for two weeks. Today, the second defendant, Ms Jeannie Batty appeared in person. But after standing the matter down, the Court has been much assisted by Mr Flaherty of counsel appearing on a pro bono basis for her at short notice today. The Court appreciates that assistance. The pro bono work done by the legal profession is often the only way that justice can be done between parties to some proceedings.

2 Mr Flaherty and Mr Nagle, who appears for the plaintiff, have had a chance to talk through the further directions to be given in these proceedings. As a result of those discussions, a general consensus has been reached.

3 Some short comments about the background to this case and the need for its rapid resolution with the assistance of the lawyers concerned are necessary at this point.

4 Mr Nagle brings an application under Conveyancing Act 1919 s 66G on behalf of three of six owners of a country property in Gulgong New South Wales ("the Property"). The Property is a small rural property which valuation evidence indicates is worth approximately $200,000. The certificate of title, which was tendered today, shows that the Property is in the name of the six co-owners who are members of the Batty family and children of the late James Allan Batty who bequeathed the property to them in his will. They hold the Property as tenants in common, as to one-sixth share each. Their first names are: John, Sharon, Jeannie, James, Robert and Stephen.

5 The Property is not mortgaged. A solicitor is prepared to be a trustee for the sale. In those circumstances I see no need to appoint more than one trustee for sale.

Parties and service

6 These proceedings were commenced by John seeking to represent as agent Robert, James and Stephen. Sharon and Jeannie were joined as defendants. The evidence appears to establish that Robert and Stephen, at least by affidavit, consent to the orders. I am told that Sharon also does. But James has been made a bankrupt and his trustee in bankruptcy has not, I am told, communicated a position in relation to those proceedings back to the plaintiff.

7 All co-owners of property the subject of a claim under Conveyancing Act s 66G must be joined as parties to the proceedings. Otherwise the trustee for sale may have difficulty in enforcing the orders against them. There is no point in making orders against less than the full numbers of those co-owners. So they must all be joined, as plaintiffs or defendants.

8 Mr Nagle also needs to join James' trustee in bankruptcy as a party to the proceedings. If Conveyancing Act s 66G orders are made there will be a fund to distribute to James' trustee in bankruptcy. I would be surprised if it was not in the trustee's interest to indicate some consent to the orders being made. But the trustee has not so far consented to acting as a plaintiff, therefore he needs to be joined as a defendant. A Summons which indicates he is going to be joined as a defendant and Conveyancing Act s 66G orders pursued against him as the representative of James' interests must be served upon him. Proof of service on him will be required on the next occasion.

9 Secondly, it is necessary for Mr Nagle to prove that Sharon has been served with notice of these proceedings.

Outstanding issues between the parties

10 There are two kinds of issues between the parties which will need to be resolved before the Court can consider whether it will make Conveyancing Act s 66G orders. Once these are resolved there may be few defences available to the claim: Re Debney (1959) SR (NSW) 471, Ngatoa v Ford (1990) 19 NSWLR 72 and Williams v Legg (1993) 23 NSWLR 687.

11 The first group of these issues relate to payments which both John and Jeannie allege that they have made on account of Council rates, insurance and mortgage payments for the Property. On a Conveyancing Act s 66G application this Court is not appropriately equipped to deal with those claims. But if that is all that is in issue between the parties, and if this cannot be resolved by agreement, the Court may order (with consent), the proposed trustee for sale himself or some other nominated person to be appointed as an expert to determine those matters. A net distribution can be made after Conveyancing Act 66G orders have been made.

12 The second group of issues is a more complicated. Mr Flaherty informs me that his client may allege a promissory estoppel against the making of Conveyancing Act s 66G orders on the basis that the deceased promised her that she could continue to occupy the Property if she made mortgage payments, which she says she did after his death. It is surprising that this claim had been not been made before the estate was distributed. That may provide some arguable defence on the part of the other parties. But whether or not that is right, it is important that the Court now direct the parties either, to resolve that dispute and defer the Conveyancing Act s 66G orders, or get on with making and executing Conveyancing Act s 66G orders so the property can be vacated and sold.

13 There is a public interest in this matter being resolved. The parties have been in dispute for a number of years. I can see from the evidence that there have been apprehended violence orders taken out by some family members against others. There has been an assault between family members. The unresolved situation of this property is at least, it seems to me, one of the reasons why these events have occurred. That is why the Court is particularly grateful for the assistance of Mr Nagle and Mr Flaherty in now moving the matter forward. It seems to me the appropriate strategy is to take advantage of the Court annexed mediation service, to see if the first and second group of issues can be resolved quickly. If they can be resolved, then Conveyancing Act s 66G orders can be made by consent.

14 Mr Flaherty has indicated that he seeks a delay of some six months so his client can fix the house up and prepare the Property for sale, before orders are made. But it seems to me that more needs to be done, and more quickly than that. I am minded to adjourn the matter only for two weeks to 15 October and make the directions. In that two weeks what will need to be achieved is both John and Jeannie will have to put forward their claims, so they can be considered at the Court annexed mediation.

15 When the matter comes before me, on 15 October 2013, the parties will adopt one of three courses: (1) either the two groups of claims will be resolved and Conveyancing Act s 66G orders can be made by consent; or (2) the claims remain unresolved and the Court will have to provide some mechanism for them to be resolved before a Conveyancing Act s 66G application is heard; or (3) the Court will allow for the two outstanding areas of dispute to be resolved after Conveyancing Act s 66G orders are made.

16 The value of the Property is estimated at $200,000. If one divides this six ways each of these parties is only entitled to about $30,000. Thus it is of the highest priority that the parties should attempt to resolve their differences by agreement as soon as possible and avoid eroding the value of the Property with legal contests.

17 With that background, therefore, I will make the following orders:

(1) Direct the plaintiff and the second defendant to serve on one another by 5pm 2 October 2013 their points of claim in the proceedings.

(2) Direct the plaintiff and the second defendant to serve on one another by 5pm 8 October 2013 their defences to the points of claim.

(3) Order a Court annexed mediation in these proceedings to take place if possible before 15 October 2013.

(4) Liberty to apply.

(5) Adjourn these proceedings to 15 October 2013 at 9.30am for mention before Slattery J.

Decision last updated: 30 September 2013