“We need trustees for sale because you changed your house!”

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P and D owned land as 50/50 TiCs. P applied to have s 66G trustees appointed to sell it: [1]

D resisted, claiming this breached an oral agreement: [2]

P’s claimed $1M in damages to be paid from D’s share. D XC’d around $350K: [4] – [9]

P and D bought the land to build 2 dwellings of the same value for their respective families: [10] – [11], [99]

They agreed on how the development would go: [8], [12]

D, who controlled a building company, would cause the work to be done: [13], [14]

An architect was engaged by D before commencement: [22]

Following a QS estimate, D’s firm issued a quote for $985K to build based on the plans: [25]

P and D faced challenges obtaining finance: [31]

In May 2017 D, having opposed pulling out of the arrangement, sold their home to finance the project: [34]

D changed the construction materials in D’s house, increasing costs (and, we infer, building quality). P did not agree: [35], [95]

P and D entered into a new contract with D’s building company to do the same work, but for $860K…: [38]

The changed price was to show serviceability to possible lenders: [39]

Construction progressed but the finances were exhausted before completion. P suspected D spent the money on other projects D’s company was working on: [43]

In 2019, further money was borrowed: [44], [45]

Later in 2021 further finance was obtained, and an OC issued: [47], [48]

The land was subdivided: [50]

Negotiations for apportioning costs failed: [49], [52]

P commenced these proceedings and brought defect proceedings: [53]

The Court reviewed the principles relating to the making of s 66G orders: [54] – [58]

A s 66G order might not be made where a contract stands in the way. 4 questions arise, including whether there’s an agreed “exit strategy”: [57], [58]

D said there was an agreement for one subdivided property to pass to each of P and D on completion, with an accounting for costs to follow – this exit strategy, D said, prevented a s 66G order: [65], [66]

No term explicitly prohibited appointment of s 66G trustees: [92]

The Court found the “exit strategy” D contended for would only apply if construction proceeded pursuant to the plans. As D amended their home (with the use of different construction materials) construction did not proceed pursuant to the plans, and so the exit strategy failed: [93], [94], [95]

Regarding onus: it was not for P to prove entitlement to a s 66G, but for D to disprove. D failed: [98] – [100]

After dealing with issues flowing from P putting forward 1 (and not the required 2) trustees, and for seeking unusually generous compensation, the orders were made: [106], [107]

D failed to establish entitlement to any additional funds: [109]

Trustees were appointed, with an account to follow, with costs to be paid from the corpus. D’s XC was dismissed with costs: [135], [136]

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