The grounds to oppose the making of such an order are limited; they include where such an order would be inconsistent with a proprietary right, or a contractual or fiduciary obligation or an equitable or conventional estoppel. Hardship or unfairness are not sufficient grounds to support opposition to such an application.
In the case of Eva Joy Ambus v Lee Ellen Buchanan [2022] NSWSC 1628; Eva Joy Ambrus made an application for the appointment of a trustee for sale which was opposed by all of the other 13 property holders
Ms Ambus owned a 1/56th share of a 120 hectares property that borders Mount Warning National Park. There were 13 others owners, each holding varying percentages. Ms Ambus purchased her share from one of the other landholders Mr Donkin, who was the 7th defendant in the proceedings.
The property was held by the owners for multiple occupancy purposes and each “owner” had the exclusive use of an area that was referred to as their sphere of influence.
At the time the community was establish in 1982 the original owners prepared a document that was referred to as the Derrilin Policies. This was a five page document that set out certain agreed decision making procedures and other matters affecting the community. One of these policies stated that there was to be no sale of the whole of the property unless there was unanimous consent to the sale. A second matter was there was to be no sale of an existing share without the agreement of the other owners. This last policy was in practice ignore by community members. Ms Ambrus denied ever receiving this document.
In 2012 Ms Ambrus and Mr Donkin had a falling out that related to the terms of her purchase and because this dispute was not resolved Ms Ambrus started the proceedings.
The defendants submitted that if the sale was allowed to proceed they would suffer extreme hardship because they had established their homes on their respective spheres of influence and made reference to the fact that the plaintiff held only a 1/56th share. His Honour rejected this argument.
The defendants also claimed that Ms Ambrus owed them a fiduciary duty and applying for the sale breached that duty. His Honour found that no such duty arose in the circumstances of this case.
Other arguments were raised relating to Ms Ambrus “buying into” a community and that there was an expectation that she would not force a sale of the whole property. His Honour rejected this and pointed out that Ms Ambrus purchased land and did not buy into a community.
Other arguments relating to promissory estoppel and unconscionable benefit were similarly rejected by the court.
His Honour ordered that a trustee should be appointed to sell the property with power to determine any claims made by any party for an allowance, out of the proceeds of sale of the property for any increase in the value of the property attributable to improvements and repair effected by that party. The amount was not to exceed the amount expended by the party in effecting those improvements and repairs.
