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Tenants in common and co-owner is a deregistered company.

Discussion in 'Legal Issues' started by superAndrew, 28th Jan, 2016.

  1. superAndrew

    superAndrew Member

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    50/50 ownership split on qld land. One owner is a deregistered company (deregistered in 1995) that hasn't paid any of the rates and hasn't had any involvement with the property nor has it ever used the property. The other is an individual who has been paying all the rates but hasn't really used the land.

    Land was transfered to both parties by previously deceased owner. Deregistered company cannot be contacted and the other owner does not know who they are.

    Could a claim for adverse possession be appropriate in this case?
     
  2. Rugrat

    Rugrat Well-Known Member

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    Uni assignment?
     
  3. superAndrew

    superAndrew Member

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    I wish!
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    what does the title show?

    When a company is de-registered its assets vest in ASIC because of s601AD Corporations Act.
    CORPORATIONS ACT 2001 - SECT 601AD Effect of deregistration

    So ASIC is the co-owner.

    You can apply to the supreme court (or the other owner can) and appoint a trustee to the property so that it can be sold.
     
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  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    One of the reasons why company ownership and trust ownership can be problematic if estate plans are not up to date AND part of a will etc. Someone forgets to pay the ASIC fee, update the company details with successive Directors, address etc..... Records are with some old accountant who dies. So the trust gets forgotten. Company lapse with ASIC...dereg in time.

    Then grandpa dies with no estate plan etc or his spouse acquires an interest she has no idea about. . Next thing a co-owner cant deal with their land etc. Court asks if its a company or trust asset and nobody knows. So Court refuses to act until its ascertained. A legal nightmare with mega legal costs to fix it.

    I would argue that the deceased's will could explain who the beneficial owner was / is. A law firm somewhere assisted with the transfer.
     
  6. superAndrew

    superAndrew Member

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    The title says:

    Company PTY LTD and John Smith as tenants in common in equal shares are now registered proprietors in fee simple.

    I have contacted ASIC and they say the options are to apply for a transfer (which is unlikely to succeed since we can only argue that John Smith has been paying all the rates) or apply to purchase the share from ASIC. They also said applying for adverse possession might be a simpler and cost effective way.

    What kind of court and legal fees would you be looking at for applying to the supreme court to force the sale?
     
  7. JDM

    JDM Well-Known Member

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    I'm not going to check the legislation but off the top of my head one owner can't claim adverse possession against a co-owner in any states of Australia that I know of. I am happy to be corrected on this point.

    I also believe payment of the outgoings can amount to a constructive trust enabling the party that has been paying the outgoings to recover a greater portion of any sale proceeds, however once again this is from memory and may be wrong or have changed since the distant uni assignment I recall had some of these facts.

    As mentioned, the assets of the disssolved company vest with ASIC and you must deal with them as the co-owner. The director/s of the dissolved company may also be able to apply to ASIC to have the company reinstated.

    I am dealing with a very similar situation in London at the moment and we have decided it is easier to have the old director reinstate then sell the property than it is to deal with the Crown (or ASIC if it were in Australia). Depending on the arrangements, this may also be an option for you. You should be able to obtain details of the director/s from an ASIC search.
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    JDM's idea is good - apply to have the company reinstated.

    Otherwise a supreme court action to appoint a trustee - I would think cost $20k upwards plus $10k for the trustee.
     
  9. superAndrew

    superAndrew Member

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    Yes we got the details of the former directors and have been trying to contact them for some time but haven't been successful. The company was deregistered 21 years ago so most likely their contact details have changed or they could be deceased.

    How would you go about doing that? Are there any options to do that without the former directors?
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    What about the shareholders?
     
  11. superAndrew

    superAndrew Member

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    The directors are the shareholders.
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I don't think you will be able to resurrect without their involvement.
     
  13. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Or their beneficiaries if they are deceased. All of which would be required by Court / ASIC etc.

    Just reminded me of a client who many years back was contacted by a law firm in UK who made enquiries about his family. They had called him out of blue and they advised he was the sole identified remaining family of some distant relative who died with a will that left it to his Father who had died after the UK person. This law firm specialised in tracing beneficiaries and making a fee from it. They found him through Ancestry.com Almost like a Nigerian scam he had to pay their fees but on completion. Had to prove to court his family lineage and proof his father was same person in the will. He inherited a modest but valuable outer London property and modest cash + shares.
     
  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes if the shareholders have died then the shares of the company should have been passed on.

    Perhaps you could do a search on the shareholders for death notices. Then distribution notices. There will be a contact person listed.
     
  15. superAndrew

    superAndrew Member

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    Would the trustee take care of the sale of the property? Can these fees be deducted from the proceeds of the sale?
     
  16. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    That's typically what occurs if a sale is possible. Like liquidators its a case of "who will pay me" must be addressed. If the issue of sale is difficult they may want fees paid upfront. Then just like a liquidator appointment, the parties will be captive to fees that are typically on the high side of a bargain. Add to the professional costs the court and listing fees, gazette ?? etc and need for diligence.

    The more assistance that can be given in identifying and tracing the chain of ownership the cheaper it will be and may assist to demonstrate the trustee will get paid on sale.
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes and probably yes. I suggest you speak to a professional trustee before doing anything. I can put you in touch with one that I have spoken to about this issue before.
     
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  18. superAndrew

    superAndrew Member

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    Thanks Terry, yes please DM me the details of the trustee.
     
  19. superAndrew

    superAndrew Member

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    What is the usual process to apply to the supreme court?
     
  20. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I am not sure as I have never done one, but it would be a summons or a statement of claim.