Corin and Another v Patton

(1990) 92 ALR 1

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(Judgment by: Brennan J)

Corin and Another
vPatton

Court:

Judges: Mason CJ

Brennan JDeane J
Toohey J
McHugh J

Case References:
Allen v Snyder - [1977] 2 NSWLR 685
Anning v Anning - (1907) 4 CLR 1049
Bahr v Nicolay (No 2) - (1988) 78 ALR 1; 164 CLR 604
Barry v Heider - (1914) 19 CLR 197
Bentley v Mackay - (1851) 15 Beav 12
Brunker v Perpetual Trustee Co (Ltd) - (1937) 57 CLR 555
Burgess v Rawnsley - [1975] Ch 429
Callaghan v Callaghan - (1841) 8 Cl & F 374; 8 ER 145
Chan v Cresdon Pty Ltd - (1989) 64 ALJR 111
Charles Marshall Pty Ltd v Grimsley - (1956) 95 CLR 353
Cope v Keene - (1968) 118 CLR 1
Cray v Willis - (1729) 2 P Wms 529; 24 ER 847
Currey v Federal Building Society - (1929) 42 CLR 421
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) - (1982) 40 ALR 1; 149 CLR 431
Donaldson v Donaldson - (1854) Kay 711; 69 ER 303
Ellison v Ellison - (1802) 6 Ves Jun 656; 31 ER 1243
Ex parte Pye - (1811) 18 Ves Jun 140
FCT v Clarke - (1927) 40 CLR 246
Fletcher v Fletcher - (1844) 4 Hare 67; 67 ER 564
Freed v Taffel - [1984] 2 NSWLR 322
Gissing v Gissing - [1971] AC 886
Golding v Hands - [1969] WAR 121
Grainge v Wilberforce - (1889) 5 TLR 436
Hawkesley v May - [1956] 1 QB 304
Heid v Reliance Finance Corp Pty Ltd - (1983) 154 CLR 326; 49 ALR 229
J & H Just (Holdings) Pty Ltd v Bank of New South Wales - (1971) 125 CLR 546
Kekewich v Manning - (1851) 1 De GM & G 176; 42 ER 519
Kenworthy v Ward - (1853) 11 Hare 196; 68 ER 1245
Lyons v Lyons - [1967] VR 169
McNab v Earle - [1981] 2 NSWLR 673
Milroy v Lord - (1862) 4 De GF & J; 264 45 ER 1185
National Trustees, Executors and Agency Co of Australasia Ltd v Boyd - (1926) 39 CLR 72
Nielson-Jones v Fedden - [1975] Ch 222
Norman v FCT - (1963) 109 CLR 9
O'Regan v Commissioner of Stamp Duties - [1921] St R Qd 283
Olsson v Dyson - (1969) 120 CLR 365
Partriche v Powlet - (1740) 2 Atk 54; 26 ER 430
Patzak v Lytton - [1984] WAR 353
Public Trustee v Commissioner of Stamp Duties - [1925] NZLR 237
Re Earl of Lucan Hardinge v Cobden - (1890) 45 Ch D 470
Re Lashmar Moody v Penfold - [1891] 1 Ch 258
Re Rose Rose v IRC - [1952] Ch 499
Re Wilks Child v Bulmer - [1891] 3 Ch 59
Richards v Delbridge - (1874) LR 18 Eq 11
Scoones v Galvin and Public Trustee - [1934] NZLR 1004
Stonehouse v Attorney- General BC - (1961) 31 DLR (2d) 118
Strong v Bird - (1874) LR 18 Eq 315
Taylor v DCT - (1969) 123 CLR 206
Tierney v Halfpenny - (1883) 9 VLR (Eq) 152
Tooheys Ltd v Commissioner of Stamp Duties - (1960) 60 SR (NSW) 539
Vandervell v Inland Revenue Commissioners - [1967] 2 AC 291
William Brandt's Sons & Co v Dunlop Rubber Co Ltd - [1905] AC 454
Williams v Hensman - (1861) 1 J & H 546; 70 ER 862
Williams v Lloyd - (1934) 50 CLR 341
Wright v Gibbons - (1949) 78 CLR 313

Hearing date: 5 September 1989
Judgment date: 9 April 1990

Canberra

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Judgment by:
Brennan J

The circumstances out of which this appeal arises and the principal authorities which elucidate its solution are set out in the joint judgment of the Chief Justice and McHugh J. I need not repeat the facts nor the full citations, but I should state briefly what I perceive to be the effect of those authorities.

A proposed transferee of Torrens title land in New South Wales does not acquire an estate or interest in the land merely by the delivery to him of a registrable transfer (whether with or without the relevant certificate of title) or by lodging the instrument (whether with or without the relevant certificate of title) for registration. Section 41(1) of the Real Property Act 1900 (NSW) provides:

No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.

Although a proposed transferee of land has no legal estate or interest in the land to be transferred prior to registration of the transfer, he may acquire an equitable estate or interest "by reason of some fact or circumstance which a court of equity regards as binding the legal owner in conscience to hold the property upon trust for the [transferee]": per Kitto J in Olsson v Dyson ( 1969) 120 CLR 365 at 375. Section 41, "in denying effect to an instrument until registration, does not touch whatever rights are behind it" : Barry v Heider ( 1914) 19 CLR 197, per Isaacs J at 216. It is for this reason that a purchaser under a contract of sale of land under the Real Property Act has an equitable estate or interest in the land corresponding with the protection which equity gives to rights acquired under the contract : Bahr v Nicolay (No 2) ( 1988) 164 CLR 604 at 612, 645- 6 ; 78 ALR 1 ; Chan v Cresdon Pty Ltd ( 1989) 64 ALJR 111 at 117 ; 89 ALR 522 at 531-2. The source of that estate or interest is the contract, not the transfer. Where, as in the present case, a registrable transfer of land under the Real Property Act is delivered voluntarily to enable the proposed transferee to secure registration, there is no fact or circumstance on which a court of equity might fasten as binding the conscience of the donor to hold the land on trust for the transferee. Equity neither compels an owner of property who intends to give it to another to do anything to perfect the gift nor impresses the property with a trust which the owner did not intend to create : Milroy v Lord ( 1862) 4 De GF & J 264 at 274-5 ; 1145 ER 1185 at 1189-90 ; FCT v Clarke ( 1927) 40 CLR 246 at 283-4. When Turner LJ in Milroy v Lord spoke of a "valid and effectual" voluntary settlement, he was speaking of a settlement which was effective to pass to the intended donee title to the intended gift, and his observation that there is no equity to perfect an imperfect gift relates to the absence of an equity to compel the donor to vest or to procure the vesting of title in an intended donee.

Equity awaits the vesting in the donee of title to the property given before it lends its aid to getting the property in; it does not assist the donee to get in the title. Isaacs J in Anning v Anning ( 1907) 4 CLR 1049 said (at 1063):

... a gift to be valid must be complete, or in other words, the intention of the donor must have been perfectly effectuated so far as the nature of his property admits. Otherwise the gift must fail, because without the aid of a Court of Equity the donees are unable to make out a title to the property, and equity will not lend its aid to complete a title unless the donees can show they have in the meantime given consideration, or done what is equivalent to consideration by acting upon the presumed gift, because there is nothing unconscientious in a donor in refusing at any stage to perfect a mere bounty. In Callaghan v Callaghan [( 1841) 8 Cl & F 374 at 401 ; 8 ER 145 at 156], Lord Cottenham said 'Courts of Equity do not decree specific performance of incomplete gifts'. The rule was laid down in the clearest terms in the leading case of Kekewich v Manning [( 1851) 1 De GM & G 176 ; 42 ER 519].

On the other hand, if the donor has carried out his intention so far as the nature of the property will allow, equity will then exercise its jurisdiction to assist the donee in getting in the property.

When a donor's intention to make an immediate gift of property is established and the nature of property is such that title to it can be passed by the acts of the donor and donee without the intervention or consent of a third party, an inquiry as to the passing of title is answered by determining whether the donor has done all that is necessary on his part to vest title in the donee and whether the donee has accepted the gift. But when the nature of the property is such that the passing of title to it depends on the registration of an instrument of transfer or on some other act of a third party, an inquiry into the passing of title is more complex. An intention to give and an intention to accept being established, three distinct but related questions then arise: (i) has the donor done what is necessary on his part to make the gift effectual? (ii) when does title pass from the donor to the donee? and (iii) can the donor recall the gift after he has done what is necessary on his part to make the gift effectual but before the title passes to the donee? The single question "Is the gift complete?" conflates these three questions, and one must be careful to understand the sense in which completeness is used. Thus, in Anning v Anning, Griffith CJ expressed this view (at 1057):

... in the case of shares in a company which are only transferable by an instrument of transfer lodged with the company, I think that the donor has done all that is necessary on his part as soon as he has executed the transfer. So, in the case of a gift of land held under the Acts regulating the transfer of land by registration, I think that a gift would be complete on execution of the instrument of transfer and delivery of it to the donee. If, however, anything remains to be done by the donor, in the absence of which the donee cannot establish his title to the property as against a third person, the gift is imperfect, and in the absence of consideration the court will not aid the donee as against the donor. But, if all that remains to be done can be done by the donee himself, so that he does not need the assistance of the court, the gift is, I think, complete.

His Honour's description of a gift as "complete" refers to the donor's completion of doing what is necessary on his part to make the gift effectual; "complete" in this context does not connote that title has vested in the donee but connotes that there is nothing more for the donor to do to enable title to be so vested. On the other hand, Isaacs J (at 1063) described a gift as complete when "the intention of the donor [is] perfectly effectuated so far as the nature of his property admits". His reference to Re Earl of Lucan; Hardinge v Cobden ( 1890) 45 Ch D 470 at 474, makes it clear that completeness of a gift, as his Honour used the term, connotes that the title intended to pass has passed.

In most cases where the completeness of a gift is in issue, the matter in dispute arises between the donor and the donee or persons claiming through them. Such a dispute is resolved by answering the first and third questions: did the donor do all that was necessary on his part to make the gift effectual and, if the donor (or the person claiming through him) purported to revoke the gift before the title passed to the donee, would the purported revocation be valid? In this case, however, we are concerned with completeness in the sense of the passing of a title to the property intended to be given. That is because Mr Patton's claim is not made through either Mrs Patton or Mr Corin but on the strength of his own title as a joint tenant. The issue is whether, at the time of Mrs Patton's death, Mr and Mrs Patton were joint tenants so that Mr Patton's interest was enlarged on her death and he took by survivorship (not by transfer or devise) the entire fee simple estate in the land.

The joint tenancy of Mr and Mrs Patton in the subject land was severed prior to Mrs Patton's death only if she succeeded in alienating her share or, at least, in divesting herself of a proprietary interest in it : Williams v Hensman ( 1861) 1 J & H 546 ; 70 ER 862 ; Partriche v Powlet ( 1740) 2 Atk 54 ; 26 ER 430. (I agree with the Chief Justice and McHugh J that the mere manifestation of an intention to sever is insufficient to sever a joint tenancy and that the approach taken in Burgess v Rawnsley [ 1975] Ch 429 at 439, should not be adopted in Australia.) Therefore the question is whether, by delivering a registrable transfer of her interest to Mr Corin, Mrs Patton divested herself of that interest in the land or, at least, of some proprietary interest in the land. As s 41 precludes the conclusion that any legal estate or interest passed from Mrs Patton to Mr Corin on delivery of the instrument of transfer, the question is whether any equitable estate or interest passed.

The argument that Mr Corin acquired an equitable estate or interest in the land when Mrs Patton delivered the instrument of transfer rests on the proposition that the instrument of transfer was registrable and could be registered without any further act on Mrs Patton's part. The weight of authority supports the view that a transfer executed by a registered proprietor in registrable form and delivered to a proposed transferee may be registered after the death of the transferor (Tierney v Halfpenny ( 1883) 9 VLR (Eq) 152 and National Trustees, Executors and Agency Co of Australasia Ltd v Boyd ( 1926) 39 CLR 72 at 84 ; Brunker v Perpetual Trustee Co (Ltd) ( 1937) 57 CLR 555 at 585) although, in Cope v Keene ( 1968) 118 CLR 1 at 7, Kitto J (with whom McTiernan J agreed) thought that a memorandum of transfer executed by the registered proprietor ceased to be a registrable instrument on the death of the registered proprietor. For reasons which will appear, it is not necessary to determine this question. Let it be assumed for present purposes that a transfer in registrable form can be registered under the Real Property Act after the death of the registered proprietor without re-execution by, or consent of, the personal representative of the deceased registered proprietor.

Even so, it is doubtful whether Mrs Patton, by mere delivery of a registrable transfer, had done all that was necessary on her part to effect a transfer of an estate or interest in the land to Mr Corin. She took no step to secure the production of the relevant certificate of title either by requesting the bank to produce the certificate of title or by authorising Mr Corin to apply to the bank to produce it. The appellants submit that it was not necessary for her to take any step to secure production of the relevant certificate of title because Mr Corin was himself entitled as mortgagor under s 96 of the Conveyancing Act 1919 (NSW) to have the certificate of title lodged to allow registration of the transfer. For the reasons given by the Chief Justice and McHugh J, I agree that s 96 is of no assistance to the appellants. However, it may be that, without production of the relevant certificate of title, Mr Corin could have prevailed upon the Registrar-General to dispense with its production and to proceed to register the transfer: see ss 36(6)(b)(ii) and 38 of the Real Property Act and the discussion of earlier provisions by Dixon J in Brunker, at 601- 4. Or it may be that Mr Corin, merely as proposed transferee, could have prevailed upon the bank to produce the relevant certificate of title to allow registration of the transfer. But speculation as to the likelihood of Mr Corin's obtaining of a favourable exercise of discretion by either the Registrar-General or the bank is relevant to the question whether Mrs Patton had done all that was necessary on her part to complete the gift, and this case can be resolved without finally determining the answer to that question. It is sufficient to note that it is doubtful whether Mrs Patton had done all that was necessary on her part to allow Mr Corin to be registered as proprietor of the interest intended to be given. But we are not concerned with Mr Corin's right to secure registration nor with Mrs Patton's right to prevent registration; we are concerned with the state of title to the interest intended to be given at the time of Mrs Patton's death. At that time, clearly enough, no favourable exercise of discretion had been obtained and, without the production of the relevant certificate of title, the transfer could not then have been registered.

In Brunker, the three questions earlier identified are mentioned (though not in precisely the same terms) by Dixon J who distinguished between them and stressed the importance of identifying the question relevant to the particular case. After referring to the well-known statement in Milroy v Lord that to make a voluntary settlement effectual the settlor must have done what was necessary to transfer the property, his Honour said (at 602):

But, in applying that test to the present question, care must be taken to keep in mind what that question exactly is. It is not whether the intending donor has divested himself of his estate or interest in the land, or has done all that lies in his legal power to do so. For obviously it was within his legal power himself to cause the immediate registration of the transfer. The question is whether by his acts he has placed the intended donee in such a position that under the statute the latter has a right to have the transfer registered, a right which the donor, or his executors, cannot defeat or impair ( emphasis added).

In Cope v Keene, at 12, Taylor J recalled the admonition by Dixon J to take care in keeping in mind precisely what the relevant question is and in Taylor v DCT ( 1969) 123 CLR 206 at 213, that statement by Dixon J (together with the passage following it) was cited with approval by Barwick CJ, Taylor and Menzies JJ. In each of these cases the issue was whether a registered proprietor had effectively and beyond recall given land to a voluntary transferee. In Brunker it was held that the purported gift failed because the registered proprietor had not delivered the instrument of intended transfer to the intended transferee and (by Rich and Dixon JJ) because the instrument was not in registrable form. In Cope v Keene, the purported gift also failed because the registered proprietor had not delivered the instrument of intended transfer to the intended transferee. And in Taylor v DCT, executors successfully resisted a claim by the Deputy Commissioner against property which had come into their hands as assets in the estate of a deceased taxpayer and which, they contended, had been distributed to the beneficiaries without notice of the Deputy Commissioner's claim. It was held that the executors had done all that was necessary on their part to make the distribution effectual and that the executors could not prevent registration of the beneficiary as registered proprietor. In none of these cases were the parties other than alleged donor or donee or a claimant through donor or donee; none was concerned with the question of the time of the passing of title to the land the subject of the gift or purported gift as distinct from the question whether the donor had done all that was necessary on his part to effect the gift or had done so beyond recall.

However, the opinion expressed by Dixon J in Brunker as to what was necessary to be done on the part of an intending donor to make a gift of land under the Real Property Act effectual is instructive on the question whether any estate or interest passes prior to registration of a transfer. The opinion his Honour there expressed was accepted in the later cases. In Cope v Keene, Kitto J (at 6- 7) stated what was necessary to be done:

What this involved is shown by the judgment of Dixon J in Brunker v Perpetual Trustee Co (Ltd) [ at 599-605]. It involved at least that the memorandum of transfer should be delivered to the appellants by or on behalf of the testator with the intention on his part of there and then parting with it and with the property in it so that the appellants should be entitled as against him to cause the instrument to be registered. It probably involved also that the appellants should be enabled to produce or require the production of the certificate of title to the Registrar-General to have a memorial of the transfer entered upon it.

See, to the same effect, Taylor J at 12-13 and Taylor v DCT, at 213-14. Thus, at the forefront of the steps necessary to be taken by an intending donor of land under the Real Property Act stands the delivery of an instrument of transfer to the intending donee with the intention of there and then parting with it and the property in it. The reason such a delivery is necessary is that the intending donor then "has no legal title to recall it or prevent its use by the donee for any purpose allowed by law including registration and no equity upon which an injunction or any other relief administered by the Court of Chancery would be granted": per Dixon J in Brunker, at 604-5. Delivery of the memorandum of transfer with the requisite intent by the donor to the intended donee, coupled with the donee's ability to produce or to require the production of the certificate of title, puts the intended gift beyond recall by the donor and enables the donee to obtain title to the estate or interest transferred.

The foundation of this view is not that the donee acquires an equity to compel the donor to take any step to facilitate registration nor that the donee acquires any equitable interest in the land. According to Dixon J (at 599-600), the right of the donee to seek registration of his instrument of transfer is founded on the Real Property Act:

Being a volunteer, an intended donee cannot obtain equitable remedies against the donor compelling him to give legal effect to his intention to give. The deceased manifested no intention to constitute himself a trustee of the land for the appellant, and the memorandum of transfer is not, and cannot produce the effect of, a declaration of trust. The appellant is, therefore, the owner of neither a legal nor an equitable estate in the land. But, under the system of the Real Property Act, a transferee may be in a position by registering an instrument to obtain a legal estate, although prior to registration neither the legal nor any equitable estate was vested in him. If that system allows a volunteer to acquire an indefeasible right to the registration of an instrument in his favour, then, although it would remain true that before registration he had neither a legal nor an equitable estate in the land, yet he would be entitled to a right of a new description arising under the statute, and by its exercise he could vest the legal estate in himself.

The true question in the present case appears to me to be whether the appellant acquired a right of this nature which the deceased or his executor could not intercept or defeat.

The right to registration, as Dixon J saw it (at 600):

... would not depend upon the doctrines or remedies of a court of equity, and, pending actual registration, the transferee could not be considered entitled to an equitable interest any more than to a legal interest in the land. It might appear anomalous, but the anomaly would be no obstacle to the existence of the right.

In the same case, Latham CJ appears to have excluded a right arising in equity, for he cited (at 585) a passage from a joint judgment in Currey v Federal Building Society ( 1929) 42 CLR 421 at 431, which stated that a

transferee's " 'right to be registered as proprietor arises from the fact that she is the transferee of the registered proprietor under a proper instrument, and it depends upon nothing else' ".

Upon this analysis, a right to registration, the effective exercise of which is essential to the vesting of title to the gifted land, is a statutory right dependent (at least) on delivery of a registrable transfer. That statutory right is confined by s 41 and, unlike a purchaser's contractual right, gives rise to no equitable estate or proprietary interest. As I read the cases, the only passages which might be construed as acknowledging an equitable estate or interest between the time of delivery of a registrable transfer and its registration which depends solely on delivery of the transfer are to be found in the judgments of Windeyer J in Norman v FCT ( 1963) 109 CLR 9 at 28-9, and in Olsson v Dyson, at 386-7. Perhaps his Honour intended to assign to equity no greater role than preventing retraction of what he has given by a donor who has done all in his power to complete the gift of land. However that may be, the orthodox view, being founded on the judgment of Dixon J in Brunker, denies the existence of an equitable estate or interest in the interregnum between delivery and registration.

It does not seem to me that any anomaly arises from the orthodox view. To the contrary, to press equity into service to create an equitable estate or interest where there is no equitable estate or interest arising from contract or from any conduct on the part of the donor is to take equity beyond its proper realm of acting in personam and to give equity a role not of circumventing but of overriding s 41 of the Real Property Act.

In the present case, let it be assumed that Mrs Patton delivered to Mr Corin a registrable transfer with the intention of parting with it and the property in it so that Mr Corin might be registered as proprietor of an estate in fee simple as tenant in common with Mr Patton and let it be further assumed that Mr Corin was thereby enabled to require production of the relevant certificate of title to allow registration of the transfer: on those assumptions Mrs Patton had done all that was necessary on her part to make the transfer effective and the transfer was not revocable by her prior to registration. On those assumptions, the elements of an effective gift summarised by Kitto J in Cope v Keene are fulfilled and Mr Corin would have acquired a right under, but subject to, the Real Property Act to have the transfer registered. Yet, at the time of Mrs Patton's death the transfer had not been registered and (in the absence of a certificate of title or a dispensation from production) was not then able to be registered. In those circumstances, it cannot be said that any title to the estate or interest in the land intended to be given by Mrs Patton had passed to Mr Corin. It follows that, prior to her death, Mrs Patton had not divested herself of her estate or interest in the land. She remained a joint tenant; she did not hold her estate or interest as trustee for any person. On her death, Mr Patton took by survivorship and his enlarged estate may be registered under s 101 of the Act. On Mrs Patton's death, Mr Corin's assumed statutory right to registration became valueless for the estate which he was intended to take was then extinguished.

It is unnecessary to consider the effect of s 24 of the Conveyancing Act, for the only way in which severance of the joint tenancy could have occurred is on registration of an instrument transferring Mrs Patton's interest in the land. None was registered.

The appeal should be dismissed.