Burton v Prior [2015] NSWSC 295

Supreme Court New South Wales

Medium Neutral Citation: Burton v Prior [2015] NSWSC 295 Hearing dates: 12 March 2015 Date of orders: 12 March 2015 Decision date: 12 March 2015 Jurisdiction: Equity Division - Duty List Before: White J Decision: Plaintiff's notice of motion filed 12 March 2015 be dismissed with costs. Catchwords: JOINT TENANCIES – plaintiff and defendant hold property as joint tenants – application by plaintiff for an interlocutory injunction to restrain the defendant from severing the joint tenancy – claim by plaintiff that the defendant agreed not to sever the joint tenancy or is estopped from severing the joint tenancy – no evidence of any agreement – no evidence of detrimental reliance by the plaintiff – held, dismissing the application, that there was no serious question to be tried Legislation Cited: Conveyancing Act 1919 (NSW) Cases Cited: Williams v Hensman (1861) 1 J & H 546 at 557; 70 ER 862 Goyal v Chandra [2006] NSWSC 239; (2006) 68 NSWLR 313 Category: Procedural and other rulings Parties: Maria Therese Burton (Plaintiff) John David Prior (Defendant) Representation: Counsel: A Autore, solicitor (Plaintiff) C J Boyd, solicitor (Defendant)

Solicitors: Autore & Associates (Plaintiff) C J Boyd Solicitors (Defendant) File Number(s): 2014/267512

Judgment 1. HIS HONOUR: By notice of motion (wrongly called a summons) filed in Court today the plaintiff seeks an order pending final determination of the proceedings that the defendant be restrained from severing a joint tenancy between the plaintiff and him on land at Erskineville. She also seeks an order prohibiting the registration by the Registrar-General of a transfer severing the joint tenancy and consequential relief. 2. The proceedings were commenced on 11 September 2014. In those proceedings the plaintiff seeks an order pursuant to s 66G of the Conveyancing Act 1919 (NSW) that the Erskineville property be sold and that the proceeds be distributed "on the basis of just and equitable distribution". Whilst the sale of the property pursuant to an order for sale under s 66G of the Conveyancing Act would not of itself sever the joint tenancy, which would continue in the proceeds of sale, the division or distribution of the proceeds as sought by the plaintiff would do so. Hence, it is curious that the plaintiff seeks an order restraining the registration of an instrument to sever the joint tenancy. 3. It appeared from the submissions of the solicitor for the plaintiff that the relief might be being sought because it is thought that in some way the severance of the joint tenancy might adversely affect the plaintiff's claim to a beneficial interest in the property arising apparently, it is said, from a constructive trust arising from her contributions made to the property, and also, according to her affidavit, from her contributions to her relationship with the defendant. Whatever may be the merits of that claim, they will not be affected by the severance of the joint tenancy. 4. The only practical significance of the severance that might arise would be if one or other of the parties were to die. It is now agreed that the parties have completely fallen out and are at loggerheads. It does not appear that either would suffer any relevant detriment if the joint tenancy is severed. One might doubt that either would want his or her share of the property to pass on death to the survivor. 5. Be that as it may, the application is made and the question is whether or not the plaintiff can demonstrate that there is a serious question to be tried that an agreement was made between the parties that the joint tenancy would not be severed, or that the plaintiff has adopted an assumption that the joint tenancy would not be severed and has acted upon that assumption such that it would be unconscionable for the defendant to depart from the assumption. 6. The evidence read on this application does not show that. The evidence of the plaintiff is to the effect that when the Erskineville property was acquired the parties jointly consulted a solicitor who advised them that a joint tenancy was suitable for couples who purchased real estate. The plaintiff deposed that the parties trusted the solicitor and accepted the advice and became joint tenants, a joint mortgage account was established, and payments to an architect were made from the joint mortgage account. The plaintiff deposes that she signed a joint mortgage and other related purchase documents in the belief that she was in a committed relationship with the defendant (a matter which I might add is not relevant to the present question) and that she did so in the belief that the property was being purchased jointly for their joint purposes and that the mortgage would be repaid from their joint moneys. 7. This does not go close to establishing an agreement or assumption that the joint tenancy would not be severed. The right of a joint tenant includes a right of survivorship only in the event of no severance having taken place. A joint tenant is at liberty to dispose of his or her interest in a manner that severs the joint tenancy. On doing so the joint tenant will lose his or her own right of survivorship (see, for example, Williams v Hensman (1861) 1 J & H 546 at 557; 70 ER 862 at 867). There was no evidence to which I was referred from which it would appear that the plaintiff adopted any assumption as to the ability of the defendant to sever the joint tenancy. 8. I was referred to the decision of Brereton J in Goyal v Chandra [2006] NSWSC 239; (2006) 68 NSWLR 313. There his Honour said (at [29]): "[29] For those reasons — which, in the urgent circumstances of this case, are necessarily abbreviated — I would also hold that where there is not a complete agreement, nonetheless on the principles of equitable estoppel, where one joint tenant has an expectation that he or she will acquire by survivorship the interest of the other and acts on that expectation to his or her detriment, and the other is implicated in the creation of the expectation and encourages the reliant activity of the first, then, at least ordinarily, it will be unconscionable for the second to act contrary to the expectation or assumption, and equity may preclude the second from severing the joint tenancy, either by equitable estoppel or by imposing a constructive trust, the underlying elements of which in this field are substantially the same. The result is such that I would hold that there is a legal basis for the claim which the plaintiff advances." 1. His Honour included in that statement of principle the element that reliance on the expectation encouraged in one joint tenant that he or she would acquire property by survivorship must be adopted in circumstances where that person will suffer detriment if the expectation encouraged is not adhered to. 2. The circumstances of Goyal v Chandra were quite different from the present case. There Dr Goyal had acquired the relevant property before he and Dr Chandra married. After they were married renovations were made to the property to which each contributed funds and the property was subsequently transferred to Dr Goyal and Dr Chandra as joint tenants. In that case Dr Chandra had executed a transfer of her interest in the property to herself, the effect of which upon registration would be to sever the joint tenancy and convert it into a tenancy in common in equal shares. That was done in circumstances in which she was terminally ill. The case was heard against the background that she was liable to die at any moment. 3. The evidence included evidence that Dr Goyal took steps to his detriment by way of assuming repayments of a loan which it would otherwise have been Dr Chandra's obligation to make, in circumstances where representations had been made to him to the effect that the house would be left to him after her death. 4. There are simply no similar facts in the present case. There is no element of detriment to the plaintiff that has been demonstrated if the severance were to proceed. I do not consider that there is a serious question to be tried that there was an agreement not to sever the joint tenancy, nor any seriously arguable case based upon principles of estoppel that would preclude the defendant from registering the transfer severing joint tenancy. 5. The notice of motion also sought a declaration that upon registration of the transfer severing joint tenancy the defendant would hold on trust for the plaintiff's benefit the share of the land held by him as tenant in common with the plaintiff to which the plaintiff is allegedly entitled as a beneficiary of a constructive trust. That relief is not appropriately sought by notice of motion. 6. I will hear the parties as to whether leave should be given to amend the summons accordingly and I will make directions for the further progress of the matter. 7. I order that the plaintiff's notice of motion filed 12 March 2015 be dismissed with costs.