Warren v Whittaker

1. [1]

   These proceedings were commenced by summons filed on 15 January 2026.

2. [2]

   In broad terms, they concern two related matters. First, the plaintiffs seek orders pursuant to s 66G(1) of the Conveyancing Act 1919 (NSW) (the Act) for the appointment of trustees for the sale of a property situated at Old Barrenjoey Road in Avalon, New South Wales (Property). Second, the summons seeks orders for the winding up of a partnership known as the Jaycrest Partnership (Partnership). The Property is an asset of the Partnership.

3. [3]

   It is only necessary to provide a very brief factual background in relation to the matter. The Partnership was formed in 1991 between the first plaintiff (Jacqueline), third plaintiff (Montgold Pty Ltd), second defendant (Greenlyn Pty Ltd) and the late Gloria Whittaker (Gloria). The individual parties, Jacqueline, the second plaintiff (Russell) and first defendant (Barry) are the children of Gloria. The partners acquired the Property in June 1991.

4. [4]

   Gloria passed away in February 2022, with probate being obtained in July 2022. Pursuant to Gloria’s will her one quarter interest in the Property passed in equal shares to Jacqueline, Montgold Pty Ltd and Greenlyn Pty Ltd by specific bequest. Notwithstanding that bequest, a transmission application was made in November 2022 transferring the Property to, Jacqueline, Russell and Barry, as executors of their late mother’s estate.

5. [5]

   The parties are now in agreement that trustees should be appointed for the sale of the Property and that the Partnership should be wound up. They have agreed to orders and notations giving effect to this agreement.

6. [6]

   There remain three areas of disagreement in relation to the orders which these reasons resolve. The parties’ present position of substantial, but not complete, agreement has only recently been reached, and after each party has filed their evidence in the proceedings.

Costs

1. [7]

   The plaintiffs seek an order that their legal costs of the proceedings be paid out of the proceeds of sale of the Property. The defendants seek an order that the costs of both parties be paid from those proceeds.

2. [8]

   The plaintiffs seek that order on the basis of what they characterise as the defendants’ unreasonable conduct, which they say invited the litigation. They submit that the summons makes clear that one of the partners died in February 2022 and that, almost four years later, the partnership has still not been wound up. The plaintiffs contend that they were required to commence these proceedings only after years of “foot-dragging” by the defendants.

3. [9]

   The defendants rely upon the usual position in proceedings seeking relief under s 66G of the Act and for the winding up of partnerships. They contend that there is nothing in their conduct that warrants any departure from the usual costs order. They submit that negotiations between the parties as to a buyout occurred during 2022, 2023, 2024 and 2025.

4. [10]

   The principles in relation to costs in s 66G proceedings are well understood. They were summarised by Williams J in Eva Joy Ambrus v Lee Ellen Buchanan (No 2) [2023] NSWSC 5 at [4]-[6]:

5. [11]

   It is important to remember, as Darke J explained in Stibbard-Leaver v Leaver [2021] NSWSC 65 at [5], as extracted by Williams J, that a co-owner is ordinarily under no obligation to seek to avoid a need to bring a s 66G application. Co-owners have no obligation to negotiate the dissolution of their co-ownership.

6. [12]

   The principles governing costs in proceedings for the winding up or dissolution of a partnership are broadly to similar effect. The costs of proceedings consequent upon, and necessary for, the dissolution should be paid out of partnership assets unless there is a good reason for making some other order: see Slim v Kabra [2006] NSWSC 837 at [8].

7. [13]

   Affidavit evidence has been filed on behalf of both the plaintiffs and defendants. It appears from that evidence that the only significant asset of the partnership is the Property, together with money in the National Australia Bank Mona Vale branch.

8. [14]

   The evidence on both sides recounts considerable correspondence and discussion between the parties over a number of years about the sale of the Property. I have considered that material. Having done so, I am not satisfied that there has been any conduct on behalf of the defendants that warrants the costs order sought by the plaintiffs. The Court is in no position to conduct a mini trial as to who is responsible for the fact that proceedings had been commenced. There is no reason, in my view, for the Court to depart from the general principles set out above.

9. [15]

   The costs of both parties should be paid out of the proceeds of sale.

Payment into Court or a controlled monies account; and whether the orders be final

1. [16]

   The parties are in dispute as to where the net proceeds of sale of the Property should be paid. The plaintiffs contend that the net proceeds should be paid into Court, whereas the defendants contend that they should be paid into a controlled monies account under the joint control of both parties.

2. [17]

   To some extent, this issue seems to be related to the third dispute, namely whether the orders made should be final orders in the sense that, apart from granting liberty to apply to the trustees and the parties should the need arise, there should be no future listing date.

3. [18]

   Neither of these two remaining issues could be described as overly substantive.

4. [19]

   Both parties agree that there should be a grant of liberty to apply should the need arise.

5. [20]

   It seems to me that, absent agreement between the parties that the net proceeds should be paid into a controlled monies account, they should be paid into Court. The plaintiffs do not agree to the net proceeds being paid into a controlled monies account. The monies should therefore be paid into Court.

6. [21]

   In circumstances where the monies are to be paid into Court, there will inevitably need to be an application, even if by consent, for the proceeds to be paid out. There is therefore some utility in standing the proceedings over to a date in the future, rather than just leaving the parties to exercise the liberty to apply. Whilst an appearance, if necessary, will come at a small cost, the court will be able to monitor the progress of both the sale and the winding up. There is of course nothing to prevent the parties agreeing to vacate that date should it become unnecessary or extend it should the need arise.

7. [22]

   The final orders to be made are thus a slightly modified version of the orders proposed by each party.

8. [23]

   The Court orders that:

   1. (1)

      Order pursuant to s 66G(1) Conveyancing Act 1919 (NSW) that Timothy Paul Heesh and Peter Kernan (Trustees) be appointed jointly and severally as trustees for the sale of land situated at X Old Barrenjoey Road, Avalon in the State of New South Wales being all the land in Folio Identifier X/X (Property).

   2. (2)

      Order that the Property be vested in the Trustees subject to any encumbrances affecting the entirety of the Property but free from any encumbrances affecting any undivided share or shares therein, to be held by the Trustees upon the statutory trust for sale under Div 6 of Part 4 of the Conveyancing Act 1919 (NSW).

   3. (3)

      Order that the Trustees cause the Property to be sold by private treaty or by auction.

   4. (4)

      Order that the Trustees be paid for their services as trustees out of the proceeds of sale of the Property.

   5. (5)

      Order that the Trustees are authorised to charge at a rate not exceeding:

   6. (6)

      Order that the Trustees may, at their discretion:

   7. (7)

      Order that the Trustees pay out of the proceeds of sale of the Property:

   8. (8)

      Order that the parties’ legal costs in relation to this application be paid out of the proceeds of the sale of Property.

   9. (9)

      Order that the Trustees pay the net proceeds from the sale of the Property after payment of amounts referred to in paragraph 7 and 8 above, into Court.

   10. (10)

       Grant liberty to the parties and the Trustees on three days’ notice setting out the relief sought including in respect of the execution of the statutory trust for sale.

   11. (11)

       List the proceedings for further directions on 21 August 2026.

   12. (1)

       That the Jaycrest Partnership is terminated.

   13. (2)

       That the Jaycrest Partnership be wound up in accordance with s. 39 of the Partnership Act 1892 (NSW) and be completed following the sale of the Property.

   14. (3)

       To do all things necessary to realise the assets of the Jaycrest Partnership.

   15. (4)

       To retain the accounting practice Mann Judd to do all things necessary to finalise the accounting and taxation matters of the Jaycrest Partnership.

   16. (5)

       That the proceeds of sale of the Avalon Property held pursuant to Order 9 and the assets of Jaycrest Partnership be paid as follows: