Section 66G : How Property Disputes are Resolved
3 December 2025 in Property Dispute Lawyers | 5 min read | skip to FAQsThis article examines co-owned property disputes, specifically when one party wishes to sell and the other refuses to sell their shared property. Section 66G of the Conveyancing Act can be used to settle these disputes. We also examine the principles for determining how the proceeds of sale or partition should be divided between the parties.
Section 66G and the Appointment of a Trustee
Disputes often arise when co-owners of a property disagree on the property’s future. In particular, when one party wants to sell and the other does not. Where there is no agreement in place and parties are not able to come to a commercial arrangement for the sale, one party can apply to the Supreme Court under Section 66G of the Conveyancing Act 1919 (NSW). This provision grants the Court the authority to appoint a trustee responsible for impartially overseeing the property’s sale when a consensus cannot be reached.
Section 66G of the Conveyancing Act
Section 66G of the Conveyancing Act 1919 (NSW) enables property that is held in co-ownership to have trustees appointed to hold the property in a statutory trust for sale or partition upon application. Under this section, the proceeds of sale are often split in accordance with the proportion of the property which each party owns by the trustees. This means that when one party owns half of the property, and the other party owns the other half, then the proceeds of sale will be split between them equally.
Challenging a 66G application
Following a Section 66G application, unless deemed inequitable, the court usually issues an order for the appointment of a trustee. The significance of this is that it demonstrates that the courts strongly lean toward enforcing the sale even if one party objects. Establishing “inequitable” grounds to counter the application is challenging and requires strong evidence. In the case of Tory v Tory, the Supreme Court of NSW stated that an application to appoint a trustee will only be denied when it is ‘inconsistent with a proprietary right, or contractual or fiduciary obligation’. For instance, the existence of a co-ownership deed that specifically excludes Section 66G’s application could be grounds for inequity.
Other Issues in Deciding the Division of the Proceeds of Sale
In deciding the distribution of the proceeds of the sale, the courts also take into account any value increase brought about by one co-owner’s expenditures. For instance, if the property value has risen due to investments like renovations, the co-owner making the contribution should be reimbursed. This equitable accounting process extends to various types of contributions, such as mortgage repayments, home insurance payments, council and water rates and rent when one co-owner exclusively occupies the property and is known as the equitable doctrine of contribution.
The Equitable Doctrine of Contribution
In considering how to divide proceeds of sale from a section 66G order, the NSW courts have followed the equitable doctrine of contribution, as in Forgeard v Shanahan (1994) 35 NSWLR 206 (at 224 citing Mushinski v Dodds (1985) 160 CLR 583). This states that, regardless of two co-owners having equal ownership of a property, whichever party that has contributed more towards the property may be entitled to more of the proceeds of sale. These contributions may be in the form of mortgage repayments, council rates and insurance premiums.
An example of the NSW courts application of the equitable doctrine of contribution can be found in the matter of Foundas v Arambatzis [2020] NSWCA 47. In this case, the appellant initially received all funds for a sale of land and was subsequently ordered to pay the respondent half of the funds. This order was appealed successfully upon the basis that the appellant successfully proved their contribution of 51.3 per cent of total acquisition costs of the property. Therefore, the Court ordered that the appellant was entitled to this proportion of the proceeds.
The Court concluded that it is was reasonable to consider the parties’ contributions to the purchase (Foundas v Arambatzis [2020] at [83]).
What Occurs when a 66G Application Results in the Sale of Co-owned Property?
Upon a successful sale of property under Section 66G, the net sale proceeds are placed in trust, awaiting distribution among the co-owners. As discussed this distribution aligns with each co-owner’s contributions, including any allowance for payment of encumbrances. In addition, the legal costs incurred by the co-owner initiating the Section 66G application are generally deducted from the sale proceeds.
Costs involved in a Section 66G application
Initiating a Section 66G application will involve expenses, largely from Trustee fees and related expenses. Typically, these fees are deducted from the property’s equity, effectively reducing the eventual proceeds each co-owner receives from the sale.
Given these financial considerations, it is important to explore alternative dispute resolution methods, such as mediation. This approach, whether between the co-owners themselves or through legal representation, can mitigate the need for court intervention and its associated costs. The property dispute lawyers at BSM Sydney Lawyers work hard to successfully negotiate and mediate to avoid the need for the costs involved in litigating a 66G application. In simple terms, we work hard to avoid court to save our clients stress, time and money.
How can BSM Sydney Lawyer assist you?
Handling property disputes, especially where properties are jointly owned by family or friends, can be highly stressful. Brander Smith McKnight’s property dispute lawyers can ensure you understand your rights in relation to your property. Our approach in the first instance involves negotiating to reach a mutually agreeable solution through negotiation, mediation and other alternative dispute resolution techniques. Where that fails, our experienced lawyers will initiate a section 66G application to be heard in the Supreme Court and represent you through this court process.
To avoid legal disputes altogether, our lawyers can also draft co-ownership deeds at the time of purchase, ensuring a clear understanding of each party’s responsibilities concerning the property, including potential sale mechanisms. Contact the property disputes lawyers at BSM law firm Sydney for a free 20 minute consultation.
FAQs
What is a 66G Application?
A 66G application is an application to the Supreme Court when co-owners of a property disagree on the future of the shared property. This usually occurs when one party wants to sell and the other doesn’t and they are unable to reach a compromise agreement. 66G refers to the relevant section of the Conveyancing Act 1919 (NSW) that deals with this legal problem.
BSM Property Lawyer Sydney have extensive experience with property disputes and 66G applications.
What is the Usual Outcome with a 66G Application?
Typically, the Supreme Court appoints a trustee who impartially oversees the sale of the property. It is very unusual for the challenge of a 66G application to be successful. The Court usually leans strongly in favour of selling the property.
BSM Property Dispute Lawyers Sydney recognise this fact and work hard to negotiate and avoid costly litigation for our clients.
Can 66G Applications ever be Successfully Challenged?
Challenges are rarely successful. It requires proving that the sale of the property is ‘inequitable’ such as if there is a co-ownership deed that specifically excludes a Section 66G application.
BSM Sydney Lawyers offer a free 20 minute consultation and can advise you of your prospects for success in this area.
How are Funds from the Sale of a 66G Property Distributed?
When a property is sold under Section 66G, the trustee places the funds in trust awaiting the distribution between the co-owners. The legal costs, including the expense of the trustee, is usually deducted from the share of the party that initiated the 66G application. Other considerations are rates and rent if one party occupied the property and if one party funded improvements such as renovations that increased the value of the property. In NSW, the courts have ordered balances to be paid to each party upon the sale of land based upon their respective contributions rather than equal ownership of the property. This is known as the equitable doctrine of contribution.
What is the Equitable Doctrine of Contribution?
The equitable doctrine of contribution is a legal principle that has been applied to some 66G sales of property in NSW. It states that regardless of two co-owners having equal ownership of a property, the party that has contributed more towards the property may be entitled to more of the proceeds of sale. This amount should be commensurate with the amount that they have contributed.
BSM Lawyer Sydney has offices are conveniently located in Sydney CBD, Parramatta, Sutherland, Shellharbour and Wollongong.
About the Author
Elizabeth DonoghueBachelor of Laws with First Class Honours I Bachelor of Business I Graduate Diploma of Legal Practice I Admitted to the Supreme Court of NSW & the High Court of Australia
View profileElizabeth holds a Bachelor of Business and a Bachelor of Laws with First Class Honours from the University of Wollongong. Elizabeth achieved outstanding results across both of her university degrees and was recognised with the Dean's Merit Award for academic excellence. She has a Graduate Diploma of Legal Practice from the College of Law and is admitted to practice as a legal practitioner in the Supreme Court of NSW and the High Court of Australia. Elizabeth works in construction and property dispute law. She is known for her passion for law, strong organisational and communication skills, meticulous attention to detail and proactive approach to her work. Elizabeth has extensive knowledge and experience of legislation relating to property disputes. She has worked on several matters that involved 66G.
