Section 66G explained - resolving co-ownership conflicts under the Conveyancing Act 1919 (NSW)

Co-ownership of a property can be advantageous, however, disagreements between co-owners can lead to complex and often protracted legal disputes. Section 66G of the Conveyancing Act 1919 (NSW) provides a mechanism through which disputes between co-owners can be resolved in circumstances where they cannot agree on the sale or management of a property.

What is section 66G and how does it operate? 

Section 66G allows a co-owner of a property, regardless of their ownership percentage, to apply to the Supreme Court of New South Wales for orders appointing a trustee to manage the sale or partition of property.

A section 66G application effectively provides an out for co-owners who cannot remain in an untenable joint ownership situation and is typically relied on in situations where:

• co-owners disagree on the sale or management of the property

• one co-owner wishes to sell, but the other does not

• there is a dispute over an inherited property

• there is a breakdown in the relationship between co-owners or one co-owner has vacated the property.

Under section 66G, the court has the power to:

• appoint trustees to hold the property on trust for statutory sale or partition

• vest the property in the appointed trustees, subject to existing encumbrances

• ensure the proceeds of sale are distributed among the co-owners according to their respective shares.

Application process

A co-owner wishing to force the sale of a property can file an application in the Supreme Court seeking the appointment of trustees. The primary consideration in such application is whether the co-ownership arrangement has become inequitable or impractical. In determining that question, the Court will assess the relationship between the co-owners and any existing agreements in relation to the property.

If satisfied that an order under s 66G should be made, the Court will then appoint independent trustees to manage the sale or partition of the property. The trustees will then oversee the sale of the property and distribute the proceeds of the sale to the co-owners.

Considerations

A section 66G application is an effective method of resolving co-ownership disputes in New South Wales as it offers:

• a clear and structured path forward for co-owners in dispute

• impartiality and transparency throughout the sale process through the appointment of independent trustees

• minimisation of conflict between the co-owners by removing the co-owners from the decision making process.

However, some considerations before making a s66G application are:

• Costs: The trustees will incur costs which will be paid out of the sale proceeds of the property. There are also legal costs associated with making an application.

• Control over the sale: Once appointed, the trustees will take control of the sale of the property, and the co-owners will not be in a position to make decisions on the sale.

If you are co-owner in a dispute with another co-owner and are considering a section 66G application, please contact our Dispute Resolution & Advisory team.

 Author: Ella Glynn Yosef

Supporting partner: Adam Cutri

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.