In such circumstances it is not uncommon, particularly where there are complex business dealings and landholdings or one party is trying to block the sale or division of the co-owned property, for an application to be made to the Victorian Civil and Administrative Tribunal for the sale or physical division of the land or goods among the co-owners. 

When such orders are made by VCAT it becomes imperative that the parties to the dispute co-operate in the process of sale or division of the co-owned property as the costs and expenses of the sale and/or division can quickly mount and be realised against the co-owned property. 

Such circumstances were exemplified in the matter of Ganitis v Ganitis (Building and Property) (2014) VCAT 1293. 

In this matter, Mrs and Mr Ganitis were the co-owners of residential property which VCAT had ordered, pursuant to section 228 of the Property Law Act 1958, be sold and the proceeds of that sale be distributed between Mr and Mrs Ganitis. 

However, in order to process the sale of the land, the real estate agent sought Mr and Mrs Ganitis to sign an exclusive sale authority. 

However, the pair refused to sign. As consequence, costs were incurred in an unsuccessful sale of the land and the question then turned to whether Mr and Mrs Ganitis should be responsible for costs of the unsuccessful sale.

Section 232 of the Property Law Act 1958 provides, among other things, authority for VCAT to order that the costs of sale be met by one or more of the co-owners or from the proceeds of sale. 

Further, VCAT determined that the meaning of the word "sale" ought to be construed so as to include the "act of selling" such that VCAT is empowered to make an order for costs arising out of an aborted or unsuccessful sale. 

Mr Ganitis claimed that he ought not be responsible for the costs of the attempted sale because, while he had opposed an order for the sale of the land, he did consent to the ordering of the sale of the land by VCAT and did nothing to prevent the sale of the property at any time thereafter. 

However, VCAT determined that the actions of both Mr and Mrs Ganitis – that is, failing to execute the exclusive sale authority – prevented the land from being sold, and as such both Mr and Mrs Ganitis were liable for the costs of the unsuccessful sale of the land, to the sum of $5126.69. 

This case provides an example of why parties to such disputes, once orders are made for the sale or division of property, should comply with those orders to avoid becoming liable for the costs associated with a failed sale, ultimately depriving the parties of proceeds they would otherwise receive from the sale of the property. 

Disclaimer: Readers should seek independent legal advice as this article is for information purposes only. Matt Barkla is an associate at Beck Legal, Bendigo.