Resolving Property Disputes in NSW
There are many circumstances where joint property ownership is the most practical approach to entering the real estate market, whether with a spouse, relative or business partner. However, over time circumstances can change and whether from a breakdown of relationship or simply diverging priorities, disputes can arise over the management, selling of, or buying out the co-owners’ share in a property. In such situations where the parties cannot come to an agreement, it may become necessary to appoint a Statutory Trustee to break the deadlock and handle the selling of the property as an independent third party. This article provides greater detail regarding appointing a Statutory Trustee in New South Wales under Section 66G of the Conveyancing Act 1919 (NSW).
The Application
The application process under NSW legislation requires an application to be filed with the Supreme Court by one or more co-owners seeking the appointment of a trustee. Under NSW proceedings the primary consideration in the application is whether the co-ownership agreement has become inequitable or impractical. This will be assessed against the relationship between the co-owners and any existing agreements in relation to the property.
The Court has discretionary powers to deal with matters under section 66G, allowing each application to be heard on a case-by-case basis. An order will generally be made due to each co-owner’s legal right to realise an interest in the property, otherwise known as the order being made ‘as of right’, unless it is inequitable or impractical to do so.
Case law suggests a party will need to demonstrate making the order would be inconsistent with a property right, or a contractual or fiduciary obligation. Hardship or unfairness is not a sufficient basis for the Court to refuse making an order. There is also a high burden of evidence required to prove an order would be inequitable.
Instances of an application being rejected or deferred include Capolingua v Da Silva (2016) where the parties had signed a deed specifying they would not seek to exercise rights of sale under the provision unless the property had been marketed for a period of one year. In this instance, the application was adjourned to allow the condition to be satisfied. In Ngatoa v Ford (1990) the Court refused the application as the co-owners had a deed limiting their ability to dispose of their interests in the property where a forced sale under s66G of the Act would have breached the contractual obligation.
More recently, in Rance v Dempsey (No 5) [2026] NSWSC 270, the Court confirmed that only genuine proprietary or contractual rights can resist an s66G order. A claimed “quasi proprietary” right under the Succession Act — contingent and not yet exercised — was insufficient. The Court held that such a disputed, contingent right did not justify refusing a statutory trust for sale, and trustees were appointed. This case reinforces that unless a co owner can point to a real, enforceable legal right preventing sale, the Court will generally grant the order.
Once the Court order has been made, the property immediately vests in the trustee, who will take steps to sell it. Unlike in Queensland, where the Court may order additional specifics including directions concerning valuations, method of sale, reserve price and timeframes for sale, in NSW the Court has significantly less explicit powers that would otherwise allow them to explicitly direct the sale process. Once the Court Order is made, the trustee will take full control over the sale of the property and make the distribution of proceeds to the co-owners. Statutory trustees can also partition (subdivide) the property, however, this is less common given smaller property sizes and zoning restrictions.
Considerations
A section 66G application can provide a clear and efficient method of resolving co-ownership disputes as it offers transparency and impartiality throughout the sale of property, while minimising conflict through removing the co-owners from the decision-making process. However, there are two key considerations before making a s66G application that parties need to be aware of:
Costs: The process will incur costs, this includes those incurred by the trustees for their time managing the process and the hiring of relevant professionals, and the legal costs associated with making an application. The proceeds distributed to co-owners are after the deduction of associated encumbrances, trustee fees and legal costs.
Control: Once appointed, the trustee takes full control of the sale of the property, and the co-owners do not have the ability to make any decisions on the sale. Furthermore, the applying co-owner cannot unilaterally withdraw their consent once the trustees are appointed and overturning the appointment is an exceptionally difficult task, not to mention costly in itself.
An application for a statutory trustee under section 66G is not a tool for a mere disagreement or difference of opinion. It is a last resort for when all communications and relationships have broken down between the co-owners, and an outcome is not possible without intervention. Parties considering the appointment of a statutory trustee need to be aware of the steps and costs involved, and their lack of control once the application is accepted.
How can QSAS help?
Whatever your situation and wherever you are located, the QSAS team can help you find the right solution to resolve you or your client’s property dispute. Contact us today to find out more about the options that may be available to you and for a confidential, no obligation consultation.