Section 66 of the Conveyancing Act 1919 (NSW) provides a mechanism for one of multiple co-owners of real property to force a sale of the property in circumstances where one or more other co-owners are not cooperating with a sale. The mechanism operates by having the Court appoint trustees and vest the legal ownership of the property in those trustees, referred to as statutory trustees.

Section 66 is also commonly invoked in two specific situations:

1. Where one co-owner becomes bankrupt, and the property vested in a bankruptcy trustee who intends to realise the property for the benefit of creditors.
2. Where a creditor of a co-owner has a charge over that co-owner’s interest in the property, but not another co-owner’s property (section 66F defines co-ownership to include an incumbrancer).

It is common that owners seeking the appointment of statutory trustees will propose registered liquidators (and/or registered trustees in bankruptcy) to the task. They are indeed well suited to the task given the role is analogous to the role of a receiver.

In the case of a bankruptcy trustee, the trustee in bankruptcy may seek his or her own appointment as statutory trustee (together with a colleague). In Weston (Trustee) v Sanna [2020] FCA 830, Markovic J declined a request from a creditor to have a different insolvency practitioner from another firm appointed together with the trustee in bankruptcy. Markovic J inferred that the appointment of the bankruptcy trustee together with a colleague from the same firm would be more cost-effective (at [101]).

Conversely, in Coshott v Prentice [2014] FCAFC 88, the Full Court overturned an order appointing a bankruptcy trustee as sole statutory trustee because section 66G required two appointees. In doing so, the Full Court commented (without deciding the issue) that it would be prudent for the Federal Court to not appoint the trustee in bankruptcy as one of the statutory trustees having regard to a requirement of independence.

Despite it being commonplace, section 66G does not require the appointment of a registered liquidator and/or a registered trustee in bankruptcy. Insolvency practitioners can, at times, be an expensive choice. Experienced insolvency practitioners can charge high hourly rates. On top of that, they will also need to pay to engage solicitors and pay the real estate agent’s fees.

A cheaper alternative is to appoint a solicitor and a real estate agent as the two statutory trustees, given they will need to be engaged in any event. In a recent Supreme Court of NSW decision, a lender proposed to do just that: appoint a solicitor and a real estate agent as the two statutory trustees. In Gemi Investors Pty Limited v Cetin [2023] NSWSC 1099, Williams J accepted the proposed suitability and made the orders sought.