O’Dea v O’Dea [2019] NSWSC 1560

O’Dea v O’Dea [2019] NSWSC 1560

Order 3(c)(v) did not require the trustees to make the plaintiffs' proposed adjustments, and the disputed adjustments were not properly treated as adjustments between co-owners in their capacity as co-owners. The trustees were therefore not bound to distribute the proceeds as the plaintiffs sought. However, because the defendant's foreshadowed claims against the trustees were not fanciful, the trustees were justified in retaining an amount reasonably necessary to protect their right of indemnity; on the evidence, $500,000 was sufficient and retention of all remaining proceeds was not reasonably necessary.

Jurisdiction
Australia
Judgment Date
06 November 2019
Procedural Posture
Application Concerning Distribution of Proceeds of Sale Under a Statutory Trust for Sale and Application for Judicial Advice Under S 63 of the Trustee Act 1925 (nsw) / Consequential Orders Following Sale of Property by Trustees Appointed Under S 66 G of the Conveyancing Act 1919 (nsw)
Outcome
Plaintiffs' application for an order directing distribution in accordance with their proposal refused; judicial advice given that trustees would be justified in retaining $500,000 until further order of the Court.
Legal Topics
['statutory Trust for Sale' 'judicial Advice' "trustees' Right of Indemnity" 'distribution of Proceeds of Sale' 'adjustments Between Co Owners']
['equity' 'trusts and Trustees' 'property Law'] ['statutory Trust for Sale' 'judicial Advice' "trustees' Right of Indemnity" 'distribution of Proceeds of Sale' 'adjustments Between Co Owners']

Case Brief

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Procedural Posture

Application Concerning Distribution of Proceeds of Sale Under a Statutory Trust for Sale and Application for Judicial Advice Under S 63 of the Trustee Act 1925 (nsw) / Consequential Orders Following Sale of Property by Trustees Appointed Under S 66 G of the Conveyancing Act 1919 (nsw)

Legal Issues

  1. 1 ["Whether trustees appointed under s 66G of the Conveyancing Act 1919 (NSW) should be directed to distribute sale proceeds in accordance with the plaintiffs' proposed adjustments." 'Whether order 3(c)(v) required the trustees to make adjustments for resale costs, deficiency on resale, costs and other amounts claimed by the plaintiffs.' 'Whether the trustees would be justified in retaining some or all of the remaining proceeds as security for their right of indemnity in relation to potential claims by the defendant.' 'What amount was reasonably necessary for the trustees to retain to protect their right of indemnity.']

Ratio Decidendi

Order 3(c)(v) did not require the trustees to make the plaintiffs' proposed adjustments, and the disputed adjustments were not properly treated as adjustments between co-owners in their capacity as co-owners. The trustees were therefore not bound to distribute the proceeds as the plaintiffs sought. However, because the defendant's foreshadowed claims against the trustees were not fanciful, the trustees were justified in retaining an amount reasonably necessary to protect their right of indemnity; on the evidence, $500,000 was sufficient and retention of all remaining proceeds was not reasonably necessary.

Court Disposition

Plaintiffs' application for an order directing distribution in accordance with their proposal refused; judicial advice given that trustees would be justified in retaining $500,000 until further order of the Court.

Orders

  • ["The plaintiffs' Notice of Motion seeking an order directing the trustees to distribute the moneys held by them in accordance with the plaintiffs' proposal was dismissed." 'Order under s 63 of the Trustee Act 1925 (NSW) that the trustees would be justified in retaining $500,000 until further order of the Court.'...