Week 6 - Co-ownership Termination & Property Law Act 1958 Part IV Div 2
• Spouses can seek an order from Family Court under s 79 Family Law Act 1975 (Cth). ‘Domestic
partners’ can seek a court order under Property Law Act, Part IX. In the absence of those provisions,
co-owners can apply to Vic Civil and Administrative Tribunal (VCAT) under Property Law Act, Part IV,
Div 2.
• Parties to action
s 226
• VCAT may divide co-owned land in proportions that di er from the co-owners’ entitlements, and may
order compensation for any discrepancy
s 230
• Other matters VCAT may order e.g. independent valuation, that property be sold at auction and etc
s 232
A. Upon Sale or Division
Co-owners can bring an application for an order for sale or division of co-owned land.
s 225
At that time, VCAT can “make any order it thinks t to ensure that a just and fair sale or division …
occurs. However, sale and division of proceeds is preferred to physical division.
ss 228 & 232
Sale and division of proceeds is preferred to physical division
s 229
an
Is it really
improvement
1. Compensation or reimbursement and improvements
or d anage
s 233(1)(a)
VCAT may order:
that compensation or reimbursement be paid or made by a co‑owner to another co‑owner or other
co‑owners.
s 233(2)(a)
In determining whether to make an order under subsection (1), VCAT must take into account the
following - any amount that a co-owner has reasonably spent in improving the land or goods.
Case law
May only claim the lesser of [cost or increased value to property].
• Occupying co-owner can claim for improvements only on division/sale
• Allowance for improvements is the lesser of
The cost of the improvements; or
The increased value of the property resulting from the improvements
• The allowance made by the non-improving co-owner is proportionate to his/her share in the property
• Improvements are expenditures which increase the value of the property
2. Compensation or reimbursement for maintenance or insurance costs
s 233 (1)(a)
VCAT may order:
that compensation or reimbursement be paid or made by a co‑owner to another co‑owner or other
co‑owners.
s 233 (1)(c)
that an adjustment be made to a co-owner’s interest in the land or goods to take acount of amounts
payable by co-owners to each other during the period of co-ownership.
s 233(2)(b)
In determining whether to make an order under subsection (1), VCAT must take into account the
following - any costs reasonably incurred by a co‑owner in the maintenance or insurance of the land or
goods.
3. Compensation or reimbursement for rates, mortgage repayments or other outgoings
s 233 (1)(a)
VCAT may order:
that compensation or reimbursement be paid or made by a co‑owner to another co‑owner or other
co‑owners.
s 233 (1)(c)
that an adjustment be made to a co-owner’s interest in the land or goods to take account of amounts
payable by co-owners to each other during the period of co-ownership.
s 233(2)(c)
In determining whether to make an order under subsection (1), VCAT must take into account the
following - the payment by a co-owner of more than that co-owner's proportionate share of rates
(in the case of land), mortgage repayments, purchase money, instalments or other outgoings in respect
of that land or goods for which all the co-owners are liable.
4. Compensation or reimbursement for damage to property
s 233 (1)(a)
VCAT may order:
that compensation or reimbursement be paid or made by a co‑owner to another co‑owner or other
co‑owners.
s 233(2)(d)
In determining whether to make an order under subsection (1), VCAT must take into account the
following - damage caused by the unreasonable use of the land or goods by a co-owner.
5. Compensation or reimbursement for occupation rent
s 233 (1)(a)
VCAT may order:
that compensation or reimbursement be paid or made by a co‑owner to another co‑owner or other
co‑owners.
s 233(2)(e)
In determining whether to make an order under subsection (1), VCAT must take into account the
following - whether or not a co‑owner who has occupied the land should pay an amount equivalent to
rent to a co-owner who did not occupy the land (subject to s 233(3))
s 233(3)
FERRET
OSEIoccupy
HEY
6. Claim for rents and pro ts from third party
s 233(1)(b)
Henderson
VCAT may order:
that One or more co-owners account to the other co-owners in accordance with section 28A.
s 28A
“Accounting” relates to one co-owner receiving more than their just or proportionate share.
ITTIS28AI
B At Any Time
TIC
Co-owners can also bring an application for an order for accounting for rent or pro ts at any time (while
co-ownership continues).
s 234 B
s 28A
“Accounting” relates to one co-owner receiving more than their just or proportionate share.
s 234
Henderson v Eason
• It held that the statute referred to rents and pro ts received from a third party and not to fruits of coowner’s own labour. It is assumed that this rule continues to apply to other statutory provisions for
accounting between co-owners for rents and pro ts, e.g. s 28A PLA.