Can of co-owner force the sale of property in Queensland?

Often people – including family members – will decide to buy property together.  But what happens when one of them decides that they want to sell?  Section 38 of the Property Law Act (Qld) provides that a court can on the application of any of the co-owners appoint  trustees of the property and vest the property in the trustees, to be held by them to sell the property.  That means that a court can appoint two people to sell a property, where one of the owners refuses to sell. 

The subsequent provisions of the Property Law Act then go to the way in which the property is to be sold, including the right of the co-owners to bid at the sale. 

It has been found that there is “practically speaking no defence” to such an application (Goodwin v Goodwin [2004] QCA 50). 

In the recent Queensland Supreme Court decision of McPaul v Massignani and Anor [2023] QSC 98, Chief Justice Bowskill considered an application for the appointment of statutory trustees to sell a property in circumstances where the outcome would result in quite significant disruption and disadvantage to the owner who did not want to sell. 

Very briefly, two sisters had decided to purchase a 20ha property at Numinbah Valley, substantially using the proceeds of an estate that they had together received.  The concept was that one family would ultimately take the existing home, with the other to stay in a granny flat until a house was built at the rear of the property which was to be jointly funded. 

After buying the property, the sisters obtained planning advice in relation to potentially subdividing the property and learned that it could not be subdivided.  The sister who was to live in the “new” home decided that in those circumstances, she should sell her interest in the property.  The sister who did not wish to sell opposed that on the basis that there had been an agreement to live in the property long term with an estoppel arising because she and her family acted in reliance upon the assumption and the expectation of long term ownership by disrupting their lives and moving into the property.

Her Honour found that the evidence did not support a finding that there was anything said or done by the sister who wished to sell that would give rise to a right for equity to intervene in the sale of the property.  It was found that far more clear and unequivocal language would be required to achieve that.  The discussions regarding the length of time that they would own the property were not intended to have legal effect in the sense of preventing any one from exercising a right to sell the property. 

As a result, statutory trustees were appointed for the sale of the property.

This decision underpins how important it is for people proposing to buy property together to take advice and consider steps to be taken if one of them wants to – or has to – sell.  There can be other circumstances which might result in a forced sale, for example if an owner was bankrupted or if they passed away. 

For advice in respect of co-ownership of properties and remedies if ownership arrangements breakdown, contact Peter Muller at peterm@qbmlaw.com.au or Jessica Murray at jessicam@qbmlaw.com.au or Megan Hanneman at meganh@qbmlaw.com.au