Court Orders and Complications

In this article we explore how the specific orders made by a Court when appointing statutory trustees to sell real property can either simplify or greatly complicate the actual appointment processes and results.

As outlined within previous articles, there are several reasons why a dispute may arise between the beneficiaries of a deceased estate (named or otherwise) or during property settlements between separated couples.

If those disputes reach a stage whereby one party applies to a Court for the appointment of statutory trustees, then the specific orders sought and made, are of critical importance.

Common court orders sought

In Queensland, the application to Court for the appointment of statutory trustees is made pursuant to Section 38 of the Property Law Act 1974 (Qld) or Section 37 of the Property Law Act 2023 (once that Act commences). In general, the key orders sought in the application are as follows:

• The named parties (Statutory Trustees) (for QSAS, this would be Andrew Brian Weatherley and Matthew Graham Flowers) are appointed as statutory trustees for the sale of the property.

• The Statutory Trustees be entitled to charge reasonable professional fees in accordance with a set schedule (in certain circumstances a cap of those fees can be set).

• Outline the powers of the Statutory Trustees (although the Act does provide for this) such as:

  • execute any document necessary for the purposes of performing their duties and carrying out the order;

  • retain solicitors, counsel, accountants or other agents for the purpose of performing their duties and carrying out the order;

  • do all other things necessary and incidental to the carrying out of the order; and

  • apply to the Court for orders or directions relating to the performance of their duties.

• Set out how the sale proceeds of the Property be applied including:

  • In satisfaction of the Statutory Trustees’ costs of care, preservation, and realisation of the Property (including any costs included in obtaining vacant possession);

  • In satisfaction of the Statutory Trustees’ professional fees;

  • In satisfaction of secured debts owed by the parties secured by the property;

  • Costs of and incidental to the application of each party; and

  • How final balance is to be paid (including into Court if need be).

Complications

In our experience, significant complications and cost can be added to the appointment and property sale process when the applicant or respondent (or the Court) try to accommodate other desires into an order. Often the wording is a bit unclear, terms are not defined, and the practical implications (and hurdles) are not thought through.

An often-added order relates to providing one of the parties (either applicant or respondent) an exclusive opportunity to purchase the property from the Statutory Trustees at a market value and on terms the Statutory Trustees consider appropriate by a certain deadline. In theory, this is a reasonable request, however some practical implications to consider are:

• Sale

  • A clear definition of sale or offer needs to be included. Does it mean enter an unconditional contract or does it mean the settlement of such a contact.

• Deadline

  • A clear and reasonable deadline should be set. Is the deadline set sufficient for either finance to be obtained or for a contract to be entered into and settlement to occur.

• Vacant Possession

  • A clear and reasonable deadline for any occupying party to vacate the property is needed. How does the interaction of that date fit with any deadline for an offer or sale of the property to that party i.e. is it realistic.

• Insurance

  • There may be issues with insurance coverage obtained by the Statutory Trustees if they do not have possession of the property i.e. there may be a risk the property may not be covered if one of the parties continues to occupy the property.

• Market Value/Valuation

  • The use of clear and defined terms should be used in the order. A Statutory Trustee cannot identify market value without being able to at least obtain an independent site seen valuation from a reputable property valuer. If access is not provided, such a valuation cannot be obtained. It also means the Statutory Trustee is unable to properly consider any offer that may be put forward by the occupant.

• Directions

  • Ensuring the wording in the Order is sufficiently clear that the Statutory Trustee and not just the parties, are entitled to apply for directions. This issue was present in a recent matter, which was resolved, however, it created an unnecessary delay in filing the direction application.

Other issues for consideration may include:

• Professional fees- Where a statutory trustee decides to act for a fixed fee, it may be worth including a mechanism that allows for both parties to mutually agree to an increase in fees before an application to court is made.

• Costs of originating application- The costs of the initial application are often noted to be as agreed between the applicant and respondent or assessed on a standard basis but with no deadline for this to be resolved. It would be prudent for a deadline to be set, to avoid unnecessary delays in the parties resolving the matter of costs and distribution of funds.

How can QSAS help?

Given our experience in undertaking these appointments, we are well placed to assist with preparing a draft order and ensuring any complications are kept to a minimum. The easier the process, the less the cost and better the result for everyone.

Wherever you’re located, the QSAS team can help you find the right solution to resolve your (or your client’s) property dispute. Contact us today for a confidential, no-obligation consultation to find out more about the options that might be available and how a statutory trustee appointment may assist.