New South Wales Court of Appeal CITATION: Cetojevic & Anor. v. Cetojevic [2007] NSWCA 33 HEARING DATE(S): 22 February 2007 JUDGMENT DATE: 22 February 2007 JUDGMENT OF: Hodgson JA at 1; Tobias JA at 58; McColl JA at 65 EX TEMPORE JUDGMENT DATE: 22 February 2007 DECISION: Appeal dismissed with costs. CATCHWORDS: TRUSTS - Constructive trust - Whether joint endeavour had broken down - Whether unconscionability established - SUCCESSION - FAMILY PROVISION - Notional estate - Failure to sever joint tenancy - Whether full consideration given - Family Provision Act 1982 s.22 LEGISLATION CITED: Family Provision Act 1982 ss.22, 26, 27, 28 Baumgartner v. Baumgartner (1987) 164 CLR 137 Bryson v. Bryant (1977) 2 NSWLR 584 CASES CITED: Cameron v. Hills, unreported Needham J, 26/10/89 Goyal v. Chandra [2006] NSWSC 239 Muschinski v. Dodds (1985) 160 CLR 583 Wade v. Harding (1987) 11 NSWLR 551 PARTIES: Bogdan Cetojevic and Vukosava Cetojevic - appellants Biljana Cieojevic - respondent FILE NUMBER(S): CA 40294/06 COUNSEL: Mr. M. Willmott SC with Mr. G. McGrath for appellants Mr. J.J. Loofs for respondent SOLICITORS: Stojanovic Solicitors, Liverpool for appellants Brenton Banfield, Campbelltown for respondent LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): ED 5444/03 LOWER COURT JUDICIAL OFFICER: Campbell J LOWER COURT DATE OF DECISION: 26 April 2006 LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWSC 431 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40294/06 SC 5444/03 HODGSON JA TOBIAS JA McCOLL JA Thursday 22 February 2007 CETOJEVIC & ANOR. V. CETOJEVIC Headnote FACTS The subject of the dispute is the proceeds of sale of a Horsley Park property. The property was purchased in 1995 jointly under the names of the appellants and their son Nenad with the help of a bank loan secured by mortgage. It was intended that the three of them would live in the house together, and that when Nenad married, his wife would join them. All three understood the effect of a joint tenancy, and in particular that if Nenad died his share would go to the appellants. The mortgage repayments were generally made by Nenad, with the first appellant also making occasional deposits. In 1997, Nenad married the respondent and together they lived for a period in the respondent's unit. The respondent ceased working shortly prior to the birth of the couple's first child and sold her unit shortly after, paying the net proceeds into the Horsley Park mortgage. In October 2000, Nenad was drowned in a fishing accident. In February 2002, the respondent lodged a caveat on the property title claiming interests pursuant to a constructive trust and also the Family Provision Act 1982. The property was subsequently sold, with $30,000 paid to each of the appellants and the respondent, and the balance put into a joint account. The appellants commenced proceedings seeking all of the net proceeds of sale. The respondent cross-claimed, arguing constructive and/or resulting trust and sought an order under the Family Provision Act 1982. The primary judge held that there was a constructive trust in favour of Nenad's estate for one-third of the proceeds of sale; and also held that, if he was wrong on this, one-third of the proceeds of sale should be made notional estate and an order for provision in such amount be made in favour of the respondent. HELD (dismissing the appeal) (per Hodgson JA, Tobias JA and McColl JA agreeing) (1) The appellants held one-third of the proceeds on constructive trust for Nenad's estate. The joint endeavour undertaken by the parties had broken down because whilst it was contemplated that Nenad would marry and might die, the totality of what occurred including the choice of Nenad and the respondent not to live in the property, the birth of the two children and the respondent ceasing work consequently to look after them, and the respondent selling her own flat and investing the proceeds in the property, constituted a sufficient change of circumstances; and it was unconscionable for the appellants to insist on their strict legal rights and retain a house in excess of their needs while leaving the respondent without any property and with dependent children. (2) (Obiter) In relation to s. 22(1)(b) of the Family Provision Act, adopting Cameron v Hills (Needham J 26/10/1989) and disapproving of Wade v Harding (1987) 11 NSWLR 551, "full valuable consideration" must be determined at the time immediately before Nenad's death. Moreover, the consideration needs to be "given" through a positive act by a third party and not merely an automatic accrual of benefits. Therefore, full valuable consideration was not given for the omission of Nenad to sever the joint tenancy immediately prior to his death, and this omission was a prescribed transaction, thereby making his one-third interest potentially available as notional estate. ORDERS 1. Appeal dismissed with costs. ********** IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40294/06 SC 5444/03 HODGSON JA TOBIAS JA McCOLL JA Thursday 22 February 2007 CETOJEVIC & ANOR. V. CETOJEVIC Judgment 1 HODGSON JA: On 26 April 2006, Campbell J gave his decision in proceedings brought by the appellants against the respondent, claiming a declaration that the appellants were entitled to the whole of the net proceeds of sale of a property at Horsley Park, in which proceedings the respondent had put on a cross-claim seeking an order under the Family Provision Act in respect of the estate and notional estate of her late husband, Nenad Cetojevic, whom I will call Nenad, and also a declaration that she had the benefit of a constructive and/or resulting trust in respect of those proceeds of sale. 2 The primary judge made a declaration to the effect that one-third of the net proceeds of sale were held in trust for Nenad's estate, and ordered the appellants to pay the respondent's costs of the proceedings. CIRCUMSTANCES 3 I will commence with a brief outline of the background circumstances. 4 Prior to June 1995, the appellants were the registered proprietors of a house at Rooty Hill, which was subject to a small mortgage. They were pensioners, but their pension was sufficient to meet the expenses of the mortgage. 5 During the first half of 1995, the appellants and their son Nenad, who was then unmarried, formed a plan that the appellants would sell their house, and that the appellants and Nenad would buy a larger house in which the three of them would live and where, if Nenad married, his wife would also live. 6 In about the middle of 1995, pursuant to this plan, the Horsley Park property was purchased by the appellants and Nenad as joint tenants. The primary judge found that all three of them understood that this meant that if the appellants died the house would go to Nenad, but if Nenad died first the house would go to the appellants; and the primary judge found that this was explicitly discussed between them at the time. 7 This property was purchased for $240,000; and the primary judge found that $143,000 of this came from a loan from the Commonwealth Bank secured by mortgage, and that about $100,000 from the proceeds of sale of the appellants' Rooty Hill property went towards the purchase. The Rooty Hill property had been sold for $133,000. 8 The mortgage payments, amounting to $1,600 per month, were generally made by Nenad. However, in 1997 the first appellant received a compensation payment of $47,500, of which up to about $28,000 may have been paid off the mortgage on the property. The primary judge did not find on the balance of probabilities that this happened, and it was submitted by Mr Willmott SC for the appellants that the evidence really did justify a finding that this amount of money was paid off the mortgage. 9 The primary judge also found that the first appellant made some unquantified cash payments to Nenad, which were to be paid on by Nenad in reduction of the mortgage. It was also found that Nenad sometimes used the mortgage account for withdrawals when payments in excess of requirements had previously been made. 10 On 31 August 1997, Nenad married the respondent, and although the relations between all the parties remained cordial, Nenad and the respondent did not live in the Horsley Park property. It appeared that they lived for a time in a home unit owned by the respondent in Liverpool, this home unit being subject to a mortgage to the St George Bank. 11 Their first child was born in December 1998, the respondent having ceased working shortly before the birth of that child. 12 In February 1999, there was a refinancing of the two mortgages, that is, the Commonwealth Bank mortgage over the Horsley Park property and the St George Bank mortgage over the Liverpool home unit, the two mortgages being refinanced by a single mortgage from the Commonwealth Bank. It appears that around this time, the respondent's home unit was sold and the total proceeds of $105,692.41 were paid off the loan account. The primary judge held that this resulted in a net reduction of the loan account of $44,000. 13 On 29 October 2000, Nenad died as a result of an accidental drowning. This can only be considered a tragedy for both the respondent and the appellants. 14 At the time, the balance of the loan account on the property was $73,500. It appears that Nenad had no substantial assets apart from his interest in the Horsley Park home, which went as a matter of legal title to the appellants by survivorship. There was $23,996 in a CSR superannuation fund, which was paid to the respondent. 15 One matter that unfortunately affected the financial consequences of Nenad's death was that an insurance policy, which had previously been taken out on his life, lapsed shortly before his death when he ceased making the premium payments. The evidence was that this happened without the knowledge of the appellants, who gave evidence that had they known, they would have been prepared to make up these premium payments. 16 A second child was born to the respondent on 4 January 2001. 17 On 28 February 2002, the respondent lodged a caveat on the title of the Horsley Park property, claiming an estate or interest pursuant to a constructive trust and also claiming an interest as a claimant pursuant to the Family Provision Act. 18 It appears that the appellants were unable to keep up the mortgage payments on the Horsley Park property and it was sold in late 2002. 19 From the proceeds of sale, by consent, $30,000 was paid to each of the appellants and the respondent, and the balance was put into a joint account. The evidence was that at the time of the hearing there was something of the order of $480,000 in this joint account. 20 The appellants commenced the proceedings on 24 October 2003, and the respondent put on her cross-claim on 23 December 2003, which was long outside the time limit for commencing proceedings under the Family Provision Act. DECISION OF PRIMARY JUDGE 21 The primary judge considered whether there was any resulting trust affecting the property, and held there was not, because the intention of the parties when the property was purchased was that the property be held beneficially as well as legally as joint tenants. 22 As regards the question whether there was a constructive trust, the primary judge held that this was a case where a joint endeavour had come to an end without attributable fault on anyone's part, and that the beneficial interest in the asset acquired for the purpose of that endeavour should be shared equally. The basis of his holding that the death of Nenad put an end to the joint endeavour, rather than being something contemplated by it, was that the parties never contemplated what was to happen if Nenad were to pre-decease his parents at a time when he was married, when he and his wife had moved away from the house, and when they had young dependent children. On that basis, the primary judge found a constructive trust, having the effect that the estate of the deceased had a one-third interest in the property. 23 Since the primary judge came to that finding, it was not necessary for him to decide the Family Provision Act claim; but he nevertheless did so against the possibility that he was wrong in deciding that there was a constructive trust. 24 The resolution of the Family Provision Act claim required consideration of the relevant parts of ss.22, 26, 27 and 28 of the Family Provision Act, which were set out as follows in the primary judge's judgment at paras 61-69 of that judgment: 61 The designation of notional estate requires there to be, first, a prescribed transaction. Section 22 provides, so far as relevant: "(1) A person shall be deemed to enter into a prescribed transaction if: (a) on or after the appointed day the person does, directly or indirectly, or omits to do, any act, as a result of which: (i) property becomes held by another person (whether or not as trustee), or (ii) property becomes subject to a trust, whether or not the property becomes in either case so held immediately, and (b) full valuable consideration in money or money's worth for the firstmentioned person's doing, or omitting to do, that act is not given. (2) Except as provided in subsections (5) and (6), a prescribed transaction referred to in subsection (1) shall, for the purposes of this Act, be deemed to take effect at the time property becomes held by a person or subject to a trust as referred to in subsection (1)(a). … (4) In particular and without limiting the generality of subsection (1), a person shall, for the purposes of subsection (1) (a), be deemed to do, or omit to do, an act, as a result of which property becomes held by another person or subject to a trust if: (a) … (b) holding an interest in property which would, on the person's death, become, by survivorship, held by another person (whether or not as trustee) or subject to a trust, the person is entitled, on or after the appointed day, to exercise a power to prevent the person's interest in the property becoming, on the person's death, so held or subject to that trust but the power is not exercised before the person ceases (by reason of death or the occurrence of any other event) to be so entitled, … (5) Except as provided in subsection (6), a prescribed transaction involving the doing of, or omitting to do, an act as referred to in subsection (4) (paragraph (f) excepted) shall be deemed to be entered into immediately before, and to take effect on, the death or the occurrence of the other event referred to in that subsection in relation to that act or omission. (6) Where: (a) a prescribed transaction involves any kind of contract, and (b) valuable consideration, although not full valuable consideration, in money or money's worth is given for the disponer's becoming a party to the contract, the transaction shall, for the purposes of this Act, be deemed to be entered into and to take effect at the time the contract is entered into. ..." 62 Here, the relevant prescribed transaction is said to be that Nenad died without having terminated the joint tenancy, and converted it into a tenancy in common. It is clear that a failure to terminate a joint tenancy is the type of conduct which can be a prescribed transaction: Wade v Harding (1987) 11 NSWLR 551 at 556-9. 63 Relevant parts of the Second Reading Speech which led to the introduction of the Act, are set out in Wade v Harding . It shows that preventing a person who is contemplating death from deliberately frustrating a potential claim under the Act by inter vivos transactions was part of the reason for the introduction of notional estate provisions. However, those reasons do not purport to be an exhaustive statement. The words of the statue should be given effect to. 64 In the present case, one would readily accept that this joint tenancy was not entered into for the purpose of deliberately frustrating claims under the Act. However, if a joint tenancy is not initially entered into for a reason connected with evading the operation of the Act, a failure to sever a joint tenancy can still have the effect that the operation of a right of survivorship deprives a worthy claimant of access to an asset which would otherwise be available to meet his or her claim. Not having that happen seems to me within the policy of the legislation. 65 If a prescribed transaction has occurred, section 26 imposes some extra requirements before property can be designated as notional estate. It says, so far as presently relevant: "On an application in relation to a deceased person, the Court shall not, by reason of a prescribed transaction having been entered into, make an order under section 23 or 25 designating property as notional estate unless the prescribed transaction or the holding of property as a result of the prescribed transaction: (a) directly or indirectly disadvantaged the estate of the disponer, an eligible person or, where the disponer was not the deceased person, the deceased person (whether before, on or after death), (b) …, or (c) involved an omission to exercise a right, a discretion or a power of appointment, disposition, nomination or direction which could, at the time the prescribed transaction was entered into or at a later time, have been exercised by the disponer or any other person (whether alone or jointly or severally with any other person) so as to result in a benefit to the estate of the disponer, an eligible person or, where the disponer was not the deceased person, the deceased person (whether before, on or after death)." 66 Section 27 also requires the Court to consider various matters: "(1) On an application in relation to a deceased person, the Court shall not make an order designating property as notional estate of the deceased person unless it has considered: (a) the importance of not interfering with reasonable expectations in relation to property, (b) the substantial justice and merits involved in making or refusing to make the order, and (c) any other matter which it considers relevant in the circumstances. (2) In determining what property should be designated as notional estate of a deceased person, the Court shall have regard to: (a) the value and nature of property the subject of any relevant prescribed transaction or distribution from the estate of the deceased person, (b) where, in relation to any such prescribed transaction, consideration was given, the value and nature of the consideration, (c) any changes over the time which has elapsed since any such prescribed transaction was entered into, any such distribution was made or any such consideration was given in the value of property of the same nature as the property the subject of the prescribed transaction, the distribution or the consideration, as the case may be, (d) whether property of the same nature as the property the subject of any such prescribed transaction, any such distribution or any such consideration could, during the time which has elapsed since the prescribed transaction was entered into, the distribution was made or the consideration was given, as the case may be, have been applied so as to produce income, and (e) any other matter which it considers relevant in the circumstances." 67 I have taken into account the various matters that section 27 refers to. 68 Section 28 also requires the Court to consider other matters: "(1) On an application in relation to a deceased person for an order for provision in favour of an eligible person, the Court shall not make an order designating property as notional estate of the deceased person unless the deceased person left no estate or unless it is satisfied: (a) that the estate of the deceased person is insufficient to allow the making of provision that, in its opinion, should be made, or (b) that, by reason of the existence of other eligible persons or the existence of special circumstances, provision should not be made wholly out of the estate. (2) On an application in relation to a deceased person, the Court shall not make an order designating as notional estate of a deceased person property in excess of that necessary to allow the making of provision that, in its opinion, should be made." Section 28(1) is satisfied in the present case. 69 Section 28(5) imposes an extra hurdle which needs to be overcome by an applicant who can bring his or her application only because an extension of time is granted. It says: (5) On an application in relation to a deceased person, being an application: (a) made pursuant to an order under section 16 allowing the application to be made, or (b) for an order under section 8 for additional provision, the Court shall not make an order designating property as notional estate of the deceased person by reason of a prescribed transaction or a distribution unless it is satisfied: (c) that: (i) the property was the subject of the prescribed transaction or distribution, (ii) the person by whom it is held holds the property as a result of the prescribed transaction or distribution as trustee only, and (iii) the property is not vested in interest in any beneficiary under the trust, or (d) that there are other special circumstances (including, in the case of an application made as referred to in paragraph (a), the incapacity, during any relevant period, of the person by or on whose behalf the application is made) which justify the making of an order so designating the property." 25 The primary judge found that the failure by the deceased to terminate a joint tenancy could be a prescribed transaction, referring to Wade v Harding (1987) 11 NSWLR 551 at 556-9. He said he was not satisfied that there was valuable consideration for the failure to sever a joint tenancy. He found that the requirements of s.28(5)(c) and (d) of the Act were satisfied; and he held that he would extend the time for bringing proceedings, and that he would have designated one-third of the Horsley Park property as a notional estate, and would have awarded it to the respondent under the Family Provision Act. ISSUES ON APPEAL 26 The appellants rely on the following grounds of appeal: 1. His Honour erred in holding that one third (or any part) of the proceeds of sale of the Horsley Park property were held by the appellants on a constructive trust in favour of the Estate of Nenad Cetojevic. (Paras 40-45 of the Judgment) 2. His Honour erred in holding that the intention of the parties to the purchase of the Horsley Park property that the law of survivorship should apply in the event of the death of Nenad Cetojevic was not a reason for departing from the presumption of equality of ownership. (Para 45 of the Judgment) 3. His Honour erred in holding that the parties to the purchase of the Horsley Park property had not formed an intention which covered the circumstances identified in paragraphs 42 and 45 of the judgment. (Paras42 and 45 of the Judgment) 4. His Honour erred in holding that the circumstances as they existed at the time of the death of Nenad Cetojevic were such as to justify the imposition of a constructive trust in favour of the estate of Nenad Cetojevic. (Paras 42 and 45 of the Judgment) 5. Having found a. in paragraph 3 of the judgment that "The proposal which was developed in the first half of 1995 was that the three of them should buy a larger house, that Nenad would be able to live there with them, and that when Nenad eventually married he and his wife would both be able to live there. This plan resulted in the purchase, by the three of them, of a house at 22-24 Felton Street, Horsley Park. " and b. in paragraph 79 of the judgment that there were "unusually close family relationships" during Nenad Cetojevic's life, it was not open to His Honour to hold that the actual expressed intention of the parties that the law of survivorship should apply did not extend to the situation where Nenad Cetojevic died at a time when he: i. was married ii. with his wife, was not residing at the property, and iii. had young dependent children. (Paras 3, 79 and 39 of the Judgment) 6. His Honour erred in holding that the condition to the operation of section 16(3) Family Provision Act 1982 had been fulfilled. (Paras 52 and 53 of the Judgment) 7. His Honour erred in taking into account as 'special circumstances' within section 28(5)(d) matters which did not relate to the reasons why the application was not made within time. (Paras 76 -80 of the Judgment) 8. His Honour erred in holding that Nenad Cetojevic's failure to sever the joint tenancy was a prescribed transaction. (Para 64 of the Judgment) 9. His Honour erred in holding that the failure to sever a joint tenancy, that was not entered into for a reason connected with evading the operation of the Family Provision Act 1982, may nevertheless be a prescribed transaction where it has the effect of depriving a worthy claimant of access to an asset. (Para 64 of tile Judgment) 10. His Honour erred in not finding that there had been full valuable consideration in terms of section 22(1)(b) Family Provision Act 1982 for Nenad Cetojevic's omission to sever the joint tenancy. (Paras 70 and 71 of the Judgment) 11. His Honour erred in failing to find that the arrangement pursuant to which Nenad Cetojevic acquired his interest as joint tenant was "any kind of contract" within section 22(6) Family Provision Act 1982 and hence not entered into within the period of 3 years before death in terms of section 23(b)(i) Family Provision Act 1982. 12. His Honour erred in failing to give any or any adequate reasons as to his consideration of the matters which the Court is required to take into account under section 27 Family Provision Act 1982. (Para 67 of the Judgment) 13. His Honour erred in designating the proceeds of sale as notional estate. (Para 80) 27 The respondent relies on the Amended Notice of Contention that was filed in court today, which contains the following grounds: 1. In addition to the reasons specified in paragraph 45 of His Honour's judgment, the financial and non financial contributions made by the Respondent to the acquisition of the Horsley Park property, as set out in paragraphs 23, 24 and 26 of the judgment, are a further circumstance not contemplated by the parties at the time the Appellants and Nenad Cetojevic purchased the property as joint tenants and a further reason why a constructive trust in favour of the Respondent ought be imposed. 2. The authority of Wade v. Harding (1987) 11 NSWLR 551 should be over-ruled to the extent that it determines that the failure to sever a joint tenancy was not a prescribed transaction, full consideration being received in consequence of "fair equivalent immediately before death" existing as a result of a joint tenant experiencing "what was foregone in not severing the joint tenancy was received by continuing to be a joint tenant', 556F. 3. To the extent that it is now contended that Goyal v. Chandra [2006] NSWSC 239 provides a reason for why Nenad Cetojevic might not have exercised a right to sever the joint tenancy, the factors found by His Honour to substantiate a constructive trust in favour of the Respondent, and the moral and legal obligations owed by Nenad Cetojevic to his wife and children permitted him to exercise such a right. 4. To the extent that Goyal supra determines that ordinarily joint tenants are entitled to raise estoppels against each other to preclude exercising their rights under s66G of the Conveyancing Act 1919, it ought be over ruled. 28 I will consider in turn the two major areas of dispute, namely the question of constructive trust and the questions relating to the Family Provision Act. CONSTRUCTIVE TRUST 29 In relation to the constructive trust question, Mr Willmott submitted that the primary judge erred in finding that this was a case where a joint endeavour came to an end without anyone's fault, or that the circumstances which arose were not circumstances as to which the parties had formed an intention; and he submitted that, in any event, the finding of a constructive trust required in addition the finding that it would be unconscionable for the appellants to rely on their legal rights. Mr Willmott submitted that no such finding was made by the primary judge, and he submitted also that this court should not make such a finding. He referred in particular to Muschinski v Dodds (1985) 160 CLR 583, Baumgartner v Baumgartner (1987) 164 CLR 137, and Bryson v Bryant (1977) 2 NSWLR 584. 30 Mr Willmott submitted that the intention of the parties at the time of acquisition of the property was that, if the deceased married, the deceased and his wife would live in the house; and the circumstance that the deceased and the respondent chose not to live in the house, although the family relations were cordial and they could have done so, could not make the circumstances so different from that contemplated that the joint endeavour could be considered as having broken down. Similarly, he submitted, it must have been contemplated that the deceased and his wife, when he married, would have children. Further, the death of the deceased was explicitly contemplated in discussions made at the time of purchase of the property. Accordingly, there was nothing in the circumstances that happened that was so outside the contemplation of the parties that it could be found that a joint endeavour had broken down. 31 Mr Willmott also submitted that, even if there were such a change of circumstances, the primary judge did not find unconscionability on the part of the appellants; and he submitted that this court should not so find. The appellants had given up their house, which they as pensioners could afford; and in those circumstances it was not unconscionable for them to rely on their rights to retain the house, which had been purchased under the arrangement with the deceased. They had been willing for the respondent and the children to live with them as contemplated originally. Hardship on all parties was partly due to the deceased not keeping up insurance payments without telling the appellants about this. 32 Insofar as the respondent had put $44,000 of her own money into the property, Mr Willmott said this was recoverable by her; and in fact by the payment of $30,000 when the house was sold and subsequent payments, this amount had in fact already been repaid. 33 In all those circumstances, he submitted, it could not be said to be unconscionable for the appellants to rely on their legal rights. 34 I accept that it is insufficient for the establishment of a constructive trust that it be considered inconvenient or unfair that legal rights be relied on. I accept that in the circumstances of this case, it was necessary for the respondent to show both that circumstances had arisen which were so outside the contemplation or intentions of the parties at the time of entry into the joint endeavour that it can fairly be said that the joint endeavour had broken down, and also that in those circumstances it was unconscionable for the appellants to rely on their legal rights. 35 There is force in Mr Willmott's submission that it was contemplated that the deceased would marry and it was certainly contemplated that the deceased might die. Also, although it was not explicitly discussed, the contemplation that the deceased would marry could be taken as involving contemplation that there would be children. However, in my opinion it was open to the primary judge to find that the totality of what happened was so outside what was contemplated by the parties that it can be fairly found that the joint endeavour had broken down. 36 The totality of what happened includes the following. Firstly, the choice of the deceased and the respondent not to live in the house, and the choice of the respondent after the death of the deceased not to live in the house. 37 Secondly, the birth of two children and the respondent giving up employment to look after two children, so that she had the continuing responsibility to support the two children without the income available from full time employment. 38 Thirdly, the respondent selling her own flat, thereby depriving herself of accommodation she might otherwise have, and putting the net proceeds into the subject property. 39 Fourthly, the death of the deceased in those circumstances, leaving the respondent without substantial assets, without employment, two dependent children, and continuing, as had been the case when the deceased was alive, to choose not to live in the subject house. 40 Not only was it in my opinion open to the primary judge to find that this amounted to a sufficient change of circumstances to support a conclusion that the joint endeavour had broken down, it is a conclusion that I would come to myself in these circumstances. 41 Turning to the question of unconscionability, there is force in Mr Willmott's submission that all the matters relating to unconscionability were not squarely addressed by the primary judge, although it must be said that his judgment was an ex tempore judgment. If it be necessary for this court to consider for itself the question of unconscionability, I would come to the view that unconscionability was established. For the appellants to insist on their strict legal rights has the effect of depriving the deceased's estate and the respondent of what they had put into the house, leaving aside for this purpose the $44,000 which could be considered as recoverable, and leaving the respondent without property or substantial assets and with dependent children. 42 Mr Willmott conceded there was no evidence that the appellants could not, with two-thirds of the value of the Horsley Park property, have provided themselves with similar accommodation to the accommodation that had been sold when they entered into the arrangement. As I said previously, it appears that the sale price of their previous property was $133,000 and the purchase price of the Horsley Park property was $240,000. In the absence of any evidence on the matter, it seems to me that an appropriate inference to be drawn would be that with two-thirds of the proceeds of sale of the Horsley Park property, the appellants could have provided themselves with similar accommodation to that which they initially sold. 43 In all the circumstances, it seems to me that it would be unconscionable for the appellants to choose to retain the whole of this large house which was, it would seem, in excess of their needs, so as to deny any interest in the house to the estate and to the respondent. 44 For those reasons I would uphold the primary judge's decision on the question of constructive trust. FAMILY PROVISION ACT 45 As regards the decision under the Family Provision Act, again it is not necessary for this court to decide it, but the matter has been argued and I think it is appropriate for this court to express views on the arguments that have been presented. 46 Mr Willmott put forward a number of arguments in relation to s.22 of the Family Provision Act to the effect that, for a number of reasons, there was not a prescribed transaction in this case. 47 He submitted that the omission to take action to sever the joint tenancy, although it could fall within s 22(4)(b), did not do so in this case, because the deceased did not have a power to sever the joint tenancy, because the appellants could have obtained an injunction to prevent this; and Mr Willmott referred to the decision in Goyal v Chandra [2006] NSWSC 239. He submitted that because the deceased had explicitly arranged with the appellants that if he died first, they would have the benefit of the property, that arrangement having been made in circumstances where the appellants gave up another property which they could afford, the court would grant an injunction preventing the joint tenancy being severed. 48 In my opinion, the matters that I have discussed in relation to the question of constructive trust indicate that, on my view of the matter, an injunction would not have been obtainable in the circumstances of this case, for the very reasons I have given in relation to the existence of a constructive trust. In my opinion, the decision of Goyal v Chandra then does not stand in the way of a finding that the deceased did have a power to sever the joint tenancy and thus prevent the property going by survivorship to the appellants. 49 The next matter relied on by Mr Willmott was that the primary judge did not find that there was not full valuable consideration for the deceased's failure to sever the joint tenancy, this being a finding required by s.22(1)(b) of the Act. He further submitted that the case of Wade v Harding (1987) 11 NSWLR 551 supported the view that in this case there was full consideration, because the reasoning of Young J in that case at p 556 applied clearly to the facts of this case. The passages in question are as follows: If one has to look at the matter immediately before Mrs Macaulay's death, it would seem to me that on the evidence it was an even chance as to who would die first. In actual fact the husband survived the wife for only twenty days. If however one had to make a forecast in June 1986 at the time after the deceased had a stroke but whilst her husband was hale and healthy one would say that the chances of Robert Macaulay surviving would be greater than that of Mrs Macaulay surviving. However if one had to view the matter in May 1986 before the stroke when both apparently were in good health one would take into account that the wife was two years older than the male and discount this against the fact that it is common knowledge that women in Australia live longer than men. Section 22(5) provides that unless a prescribed transaction involves any kind of contract, a failure to sever a joint tenancy is deemed to have happened immediately before death. That transaction did not involve a contract, accordingly one looks at the fair equivalent immediately before death and on the facts of this case what was foregone in not severing the joint tenancy was received by continuing to be a joint tenant. There was thus in my view full valuable consideration in money or money's worth for the omission and accordingly the failure to sever the joint tenancy was not a prescribed transaction within the meaning of s 22. 50 On this matter, I first point to a contrary view taken by Needham J in Cameron v Hills, an unreported decision dated 26 October 1989, in which he made the following comments concerning Wade v Harding: Young J, in Wade v Harding, held that such consideration had been given in that case because "on the facts of this case what was forgone in not severing the joint tenancy was received by continuing to be a joint tenant" (at 556). As I understand his Honour's reasoning, that result followed because the deceased, at the relevant time (that is, immediately before her death) had an equal chance with the joint tenant of benefiting by the ius accrescendi. With great respect to his Honour, I find it difficult to see how a joint tenant, about to die immediately, can be said to have an equal chance of surviving the other joint tenant. The Court must look at the position the moment before death. Whatever may have been the facts in that case justifying the conclusion, there are no such facts in this case. Immediately before the death of this deceased there was no rational prospect of his surviving the defendant. Accordingly, in my opinion, no valuable consideration in money or money's worth was given for the omission of the deceased to sever the joint tenancy. 51 I find the reasoning of Needham J more persuasive than that of Young J; and it does seem to me that since, subject to subs (6) of s.22 to which I will come, subs.(5) requires the matter to be looked at immediately before the death of the deceased, it cannot be said that the deceased immediately before his death had an equal chance of surviving with the other joint tenants. In any event, what s.22(1)(b) requires is consideration of whether full valuable consideration for the act or omission in question, that is in this case the failure to sever a joint tenancy, is not given. It seems to me difficult to see how it can be said that any consideration was given for the actual omission, immediately before death of the deceased, to sever the joint tenancy. 52 The other matter argued in relation to s 22 was an argument based on s.22(6) which applies when a prescribed transaction "involves" any kind of contract. Mr Willmott's submission was that the prescribed transaction in this case involved whatever contract was concerned in relation to the entry into the joint tenancy. 53 In my opinion, that is not the case. It seems to me that the omission to sever the joint tenancy is something quite different from the entry into the joint tenancy; and in my opinion it cannot be said that there was any kind of contract involved in the deceased's failure, just before his death, to sever the joint tenancy. 54 The next matter in relation to the Family Provision Act relied on by the appellants related to the alleged failure by the primary judge to deal with matters in s.27, and particularly s.27(1)(a). There is some force in the submission that that matter was not explicitly addressed by the primary judge. However, the discussion given earlier in this judgment concerning the imposition of a constructive trust does fully take account of the matter dealt with in s.27(1)(a); and in my opinion that does not have such weight as to stand in the way of the order that the primary judge made. 55 The last matter raised by Mr Willmott concerned the granting of an extension of time; and his submission was that, in terms of s.16(3)(b) of the Act, it could not be said that sufficient cause was shown for the application not having been made within the period limited. He submitted in particular that no explanation was given for the delay that occurred between April 2003, when Counsel's advice was received, and December 2003, when the cross-claim was put on. 56 In my opinion, error is not shown in this respect. The primary judge considered the explanation that was given. It was a matter for the primary judge to decide whether this was sufficient cause; and in relation to questions such as this, in my opinion it is appropriate to focus mainly on the actions and omissions of the applicant for relief herself. Showing sufficient cause does of course require evidence about what her legal advisers have done, but it is not in my opinion necessary that every item or aspect of delay by legal advisers be given a full and detailed explanation. 57 For those reasons, I would have upheld the primary judge's decision on the Family Provision Act also; and for all those reasons, in my opinion the appeal should be dismissed with costs. 58 TOBIAS JA: I agree with Hodgson JA. However, as we are departing from the decision of the Chief Judge in Equity in Wade v Harding in relation to the proper construction of s.22(1)(b) of the Family Provision Act, I would wish to add the following further observations. 59 As the respondent points out in its written submissions on the appeal, in Wade v Harding Young J, as he then was, at 555G asked himself the right question when he said, "The inquiry must be then whether the wife's omission to act to prevent the jus accrescendi from coming into force with respect to the jointly held property was one in respect of which full valuable consideration was not given." 60 However, at 556G, his Honour seems to have posed for himself a different question when he said, "The only meaningful way in which one can deal with this transaction is to say did there flow to Mrs Macaulay as the result of her not exercising her right to sever the joint tenancy a fair equivalent for that she would have received had she so severed it?" 61 I agree with the respondent's submission that these two questions are not identical. Asking whether a joint tenant received "fair equivalence" for his or her failure to sever a joint tenancy is not the same as asking whether "full valuable consideration" was not given for that tenant's resistance in exercising his or her right to sever. Furthermore, in my view, it is noteworthy that the legislature has used the expression "full valuable consideration in money or money's worth for … omitting to do" the relevant act "is not given". The words "not given" are obviously used intentionally in contradiction to the words "not received." 62 It seems to me that the forgoing by a deceased person immediately before death of his or her right to sever a joint tenancy with the consequence that the deceased continues to be a joint tenant, is not equivalent to the deceased being given full valuable consideration for failing or declining to sever the joint tenancy. In my view the word "given" in its context was intended by the legislature to refer to consideration that is not only received by the deceased but also is "given" to him or her in the sense of received from some third party. 63 In Young J's view, it is sufficient if the deceased has foregone the severing of the joint tenancy by merely continuing to be a joint tenant with the rights of such a tenant which at all times existed. In my view the deceased's choice to continue to be a joint tenant could not amount to the "giving" of full valuable consideration for his or her failure to sever the joint tenancy in the instant before death. It would, as the respondent submits, be something which is passively and consequentially received or, more accurately continued or maintained. 64 I would add the foregoing observations to those of Hodgson JA in preferring the approach of Needham J in the passages from Cameron v Hills to which his Honour has referred. I therefore join with his Honour in rejecting the approach of Young J in Wade v Harding, which I respectfully consider to be incorrect approach to the construction of s 22(10(b) in the case of a joint tenant. 65 MCCOLL JA: I agree with Hodgson JA and with the additional observations of Tobias JA. 66 HODGSON JA: The order of the court is: appeal dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.