Jacobsen v Spoljaric

1. [1]

   Before the Court for determination is what may loosely be described as the making of final orders giving effect to payment of out proceeds of the sale of a property consequent upon orders previously made by the Court pursuant to s 66G of the Conveyancing Act 1919 (NSW) (CA).

2. [2]

   The property concerned is a property at Mount McDonald Road, Wyangala Dam in New South Wales (Property).

3. [3]

   Represented before the Court this morning are the plaintiff and the trustees for sale. There is no appearance by the defendant this morning. Indeed, there has been no engagement at all by the defendant with these proceedings. I am satisfied on the evidence presented before me that the defendant has been well and truly on notice of the existence and progress of the proceedings, and, perhaps more importantly, of the fact that the matter is being determined essentially on a final basis, before me today. In the circumstances, notwithstanding the non-appearance of the defendant, I am satisfied that I should proceed with the hearing today.

4. [4]

   The authorities in this regard - namely proceeding with a hearing in the absence of a party - were recently considered by Griffiths AJ in Take Off Opportunities Pty Ltd as trustee for The Clear Runway Trust v Susan Quinn Pty Ltd as trustee for The Susan Amelia Quinn Trust [2025] NSWSC 231 at [14]-[18]. These paragraphs are in the following terms:

Relevant Background

1. [5]

   It is necessary to understand a little about the factual background in order to understand the final orders that I propose to make. The following summary suffices for present purposes.

2. [6]

   In October 2012, the plaintiff and the defendant commenced a de facto relationship.

3. [7]

   In late January 2014, pursuant to a contract entered into on or about 16 December 2013, the plaintiff and the defendant purchased the Property. The purchase price was $390,000. The plaintiff contributed $159,000. The parties were recorded on the title to the Property as tenants in common, 40% to the plaintiff and 60% to the defendant.

4. [8]

   It appears that by about September 2014, the relationship between the plaintiff and the defendant was breaking down. An apprehended domestic violence order was granted against the defendant in favour of the plaintiff on 15 November 2014. It appears that, as early as 30 September 2014, the plaintiff and the defendant had agreed to sell the Property. Unfortunately, that agreement did not ever come to fruition.

5. [9]

   In or about July 2015, the plaintiff and the defendant separated, although, at least for the initial period, they continued to cohabit under the one roof at the Property.

6. [10]

   In November 2015, the plaintiff ceased living at the Property. At all material times thereafter, she has been denied access to the Property, including for the purposes of collecting her personal belongings. The defendant has secured access to the Property by various means, including locks and chains.

7. [11]

   On 3 May 2016, a contract for the sale of the Property was prepared. In late June/early July 2016, an offer was received for the purchase of the Property. The plaintiff was prepared to accept that offer, but the defendant did not agree.

8. [12]

   On or about 31 October 2017, an offer for $445,000 was received for the Property. Again, the plaintiff agreed to sell at that price, but, again, the defendant refused to sign any contract for the sale at that price.

9. [13]

   On 3 May 2022, the plaintiff’s solicitor wrote to the defendant seeking the defendant’s agreement to sell the Property or to buy out the plaintiff. No response was received to that offer. The offer was repeated again by letters dated 7 July 2022 and 14 October 2022. Again, there was no response from the defendant.

10. [14]

    The proceedings were commenced on 9 June 2023. Substituted service orders were subsequently made in relation to the defendant, which have been complied with.

11. [15]

    On 30 November 2023, Peden J made orders for the appointment of trustees for sale of the Property pursuant to s 66G of the CA. Relevantly, order 4 made by Peden J required the defendant, by no later than 8 December 2023, to give vacant possession of the Property to the trustees.

12. [16]

    Vacant possession was not provided by the defendant by 8 December 2023, or at all. On 18 December 2023, the trustees filed a motion for a writ of possession, which was granted on 2 January 2024.

13. [17]

    The defendant was evicted from the Property on 6 March 2024.

14. [18]

    On 4 June 2024, the plaintiffs filed an application to the New South Wales Civil and Administrative Tribunal (NCAT) in relation to the defendant’s personal property that had been left at the Property. On 11 September 2024, orders were made by NCAT allowing the trustees to sell and dispose of the defendant’s personal property. This subsequently occurred.

15. [19]

    It would appear that it was not until earlier this year that the Property was able to be marketed for sale. A contract for the sale of the Property was subsequently entered into, selling the property for $675,000. On 5 June 2025, the sale of the Property completed. An amount of a little over $570,000, being the net proceeds from the sale of the Property, is currently held by or on behalf of the trustees.

16. [20]

    It is against this general background that the trustees moves to the Court, by a motion filed on 30 May 2025, for orders approving its past and future remuneration and expenses. The plaintiff also seeks orders for the final distribution of the moneys presently held by or on behalf of the trustees.

Distribution of Proceeds

1. [21]

   Several issues arise for the Court’s consideration in relation to the payment out of the proceeds presently held. I deal with each of them in turn.

2. [22]

   First, the trustees have remitted to the Australian Taxation Office an amount of $60,750 on account of the defendant’s foreign resident capital gains withholding liability. I was informed that from January of this year, it is necessary for a withholding certificate to be provided to the Australian Taxation Office in respect of any sale of land. Because of the defendant’s non‑engagement with the process of sale, the defendant did not provide to the trustees a withholding liability certificate, and, as such, the trustees were required to remit that amount - $60,750 - to the Australian Taxation Office. I am satisfied in the circumstances that the trustees’ conduct was appropriate and accordingly the amount of $60,750 should be deducted against the defendant’s share of the net proceeds.

3. [23]

   The plaintiff seeks an order that the defendant pay out of his share of the proceeds, an occupation rent for the period after the plaintiff left the Property, until the defendant left the Property.

4. [24]

   As I have set out above, the plaintiff left the Property on or about 1 November 2015 in circumstances where her relationship with the defendant had broken down. She has thereafter been excluded from the Property. The defendant was not evicted until 6 March 2024.

5. [25]

   The calculation of the occupation rent is based on a market rent valuation that has been obtained.

6. [26]

   The law in relation to the circumstances in which an occupation rent will be ordered was set out by the Court of Appeal in Callow v Rupchev [2009] NSWCA 148. At [71], the Court of Appeal stated:

7. [27]

   The present case is, in my view, such a case and accordingly an occupation rent is properly chargeable against the defendant’s interest. The total of the occupation rent from 1 November 2015 to 6 March 2024 is $68,920.64.

8. [28]

   The plaintiff seeks an order that the defendant pay the plaintiff’s costs on an indemnity basis from the defendant’s proceeds of sale. This submission is essentially based on the defendant’s conduct prior to the commencement of the proceedings in which, it would appear, the defendant initially agreed for the Property to be sold, but thereafter failed to in fact agree to sell the Property and in fact rejected a number of offers that had been made for the purchase of the property.

9. [29]

   In Stibbard-Leaver v Leaver [2021] NSWSC 65, Darke J stated at [5]:

10. [30]

    I am not satisfied in the circumstances of this case that the costs order sought by the plaintiff should be made. I do not regard the behaviour of the defendant prior to the commencement of the proceedings as providing a basis for a costs order against the defendant in favour of the plaintiff, let alone an order that those costs be paid on an indemnity basis. Once the proceedings were commenced, from the plaintiff’s perspective, the proceedings largely proceeded by way of an undefended matter. It is clear, as set out below, that additional costs have been incurred by the trustees (both professional costs of the trustees and legal costs) by the reason of the defendant’s conduct, but I am presently concerned with the plaintiff’s costs.

11. [31]

    In the circumstances, in my view, the appropriate order as to the plaintiff’s costs is that the usual order apply, namely that the costs of the proceedings be paid out of the proceeds of sale.

12. [32]

    The original order made by Peden J on 30 November 2023 included an order (order 8) that the trustees are authorised to charge, at their hourly rate, a total sum not exceeding $10,000 plus GST without the leave of the Court.

13. [33]

    The costs in fact incurred by the trustees have greatly exceeded that amount. I am satisfied on the evidence before me that this, in large part, is due to the conduct of the defendant since the proceedings were commenced, as I have summarised above.

14. [34]

    The trustees have put before me considerable evidence as to the costs that they have incurred to date and will likely incur in the final wrapping up of the matter.

15. [35]

    It is, of course, true the Court has a broad discretion in approving the remuneration to be paid to trustees for sale of land. The law in this regard was relevantly summarised by Campbell J in Anson v Anson [2004] NSWSC 766 at [75]-[78] as follows:

16. [36]

    I am satisfied on the evidence before me, that I should approve the trustees’ remuneration in the amount sought by the trustees. In relation to the trustees' proposed future costs, I note that the amounts included in the evidence for future trustees’ costs of $5,500 and future legal costs of $5,500 are upper estimates, and the order that I propose to make would be to approve remuneration up to those amounts.

17. [37]

    As set above, it appears to me on the evidence that a large reason why the trustees’ costs have exceeded the initial estimate that formed the basis of the order made by Peden J was because of the conduct of the defendant. As set out above, the defendant;

18. [38]

    Further, it appears that the defendant’s former lawyer also placed a caveat on the title to the Property which the trustees were required to deal with at their costs, which resulted in the trustees authorising an amount to be paid to the defendant’s former lawyer on account of professional services provided.

19. [39]

    It seems to me that, in the circumstances, a significant proportion of the trustees’ costs and disbursements should be charged against the defendant’s interest in the proceeds. It is perhaps a little difficult to work out precisely what amount should be so charged.

20. [40]

    The plaintiff’s submissions helpfully contained a table summarising the trustees’ costs into various components. Having regard to this table, it seems to me that the following items should be charged against the defendant’s share;

21. [41]

    In relation to the general conveyancing and tax advice costs, it seems to me that it is appropriate that the defendant be charged, out of his share of the proceeds, with the additional costs that have been incurred by reason of his conduct. The original estimate set out in the order of Peden J was for $10,000. I was informed by the solicitor for the trustees that this figure related only to the trustees’ costs, and not to any disbursements, including legal costs. I was further informed by the trustees’ solicitor that an allowance of approximately $5,000 for legal costs would ordinarily be the case in relation to a s 66G sale. In these circumstances, I propose to allow an amount of $15,000 on account of what would ordinarily be expected to be incurred in relation to a s 66G application. The costs actually incurred in the present case, being $61,749.92, less the $15,000 ordinarily incurred, should, in my view, be charged against the defendant’s interest.

22. [42]

    Additional insurance costs were also incurred by reason of the delay experienced by the trustees in selling the Property by reason of the defendant's conduct, which necessitated the application to the Court for a writ of possession and also the application to NCAT. It seems to me that the additional insurance costs are due to the defendant’s conduct and accordingly should be charged against the defendant’s interest in the proceeds.

23. [43]

    One further item that needs to be considered is the application of legal fees of $34,570.25. These are the trustees’ legal fees in relation to the motion filed 30 May 2025 seeking approval of the trustees’ remuneration. It seems to me that a proportion of these costs should fall to the defendant’s account and a proportion should be part of the ordinary costs of administration. This is because it is likely that there would have needed to be a hearing, albeit quite brief, approving the trustees’ final remuneration. The present application, and the evidence in support of it, has been made more extensive by reason of the defendant’s conduct set out above.

24. [44]

    It is difficult in the circumstances to be precise at to what allowance should be made for the costs that would ordinarily be incurred in approving the trustees’ remuneration. The solicitor for the trustees has informed me, on instructions, that ordinarily something in the order of $10,000 would likely be incurred in legal fees and approving the trustees’ final remuneration. Adopting a broad-brush approach, this seems to me to be an appropriate figure. Accordingly, of the $34,570.25, the sum of $24,570.25 should be charged against the defendant’s share. The remaining $10,000 should form part of the ordinary costs and expenses of sale and be borne by the parties consistent with their respective interests in the property. The short minutes of order should provide for this distribution.

Orders

1. [45]

   This seems to me to deal with the significant matters raised by the parties during the course of the hearing this morning. I will direct the parties to agree short minutes of order giving effect to what I have set out above and providing for the payment out of the proceeds presently held by the trustees.

2. [46]

   In circumstances where the defendant has thus far not engaged in any way with the proceedings or the sale, it seems likely that the defendant will not cooperate in the payment of his share of the proceeds of sale. In these circumstances, it seems to me that it would be appropriate for the trustees to seek to communicate with the defendant, via the email address that has previously been used in relation to the substituted service orders, notifying the defendant of the proceeds of sale that are available should he provide bank account details to the trustees. If the defendant does not engage and provide a bank account to the trustees, then, in my view, the trustee should, after the expiry of a period of, say, 28 days, pay the proceeds of the defendant’s share into court, where upon that the trustees will cease to have any further role and can retire.

3. [47]

   The orders of the Court are:

   1. (1)

      Direct the parties to agree short minutes of order to give effect to these reasons and provide them to my chambers.