Corin and Another v Patton

(1990) 92 ALR 1

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(Judgment by: Toohey J)

Corin and Another
vPatton

Court:

Judges: Mason CJ
Brennan J
Deane J

Toohey JMcHugh 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:
Toohey J

At all material times the respondent and his wife, Annette Patton, were the registered proprietors as joint tenants of an estate in fee simple in land at Belrose in New South Wales.

Mrs Patton died on 17 July 1984. Anticipating her death, she took steps aimed at severing the joint tenancy and benefiting her children. These steps involved the execution of three documents, each prepared by a solicitor and dated 12 July 1984.

1.

Mrs Patton transferred to her brother John Jeffrey Corin, the first appellant, her estate and interest as joint tenant in the land "In consideration of and pursuant to the terms of a Deed of Trust between the Transferor and Transferee of even date".

2.

The parties to the deed of trust referred to in the transfer were Mrs Patton and Mr Corin. By that deed Mr Corin declared that he held an interest in the land as tenant in common with Mr Patton "UPON TRUST for the beneficiary". The beneficiary was identified as Mrs Patton; she retained the power to appoint a new trustee during her lifetime.

3.

The third document was a will in which, subject to specific bequests of jewellery, Mrs Patton left her estate to her children in equal shares. The transfer had not been registered at the time of Mrs Patton's death.

The mechanics of a transfer and deed of trust seem to have been inspired by those held effective in In the Marriage of Badcock ( 1979) 5 Fam LR 672. The question before the court is whether the steps taken by Mrs Patton were effective to sever the joint tenancy with her husband so that she might devise an interest as tenant in common in the land to her children. To answer the question, reference to some other facts is necessary. These facts are detailed in the judgment of Mason CJ and McHugh J and, in this judgment, need only be mentioned in summary form. At the time of execution of the transfer, the land was mortgaged to the State Bank of New South Wales. The mortgage was unregistered but the bank held the certificate of title to the land by way of security. Before her death Mrs Patton took no steps to procure production of the certificate for registration of the transfer to Mr Corin. There were later developments concerning the bank and production of the certificate but they were some months after Mrs Patton's death and do not bear upon the issue to be resolved, except perhaps as throwing light on the bank's willingness to produce the certificate for registration of the transfer had Mrs Patton asked it to do so.

The means by which a joint tenancy may be severed have been stated on a number of occasions. A passage in the judgment of Page Wood V-C in Williams v Hensman ( 1861) 1 J & H 546 ; 70 ER 862 is often cited in this regard. The passage appears in the judgment of Mason CJ and McHugh J. A more succinct statement is that of Stirling J in Re Wilks; Child v Bulmer [ 1891] 3 Ch 59 at 61-2:

A joint tenancy may unquestionably be severed either (1) by a disposition made by one of the joint owners amounting at law or in equity to an assignment of the share of that owner; or (2) by mutual agreement between the joint owners.

There is no inconsistency between the proposition of Page Wood V-C and that of Stirling J so long as it is accepted (as it was by Stirling J) that agreement between joint tenants may be express or implied from a course of conduct.

For the purposes of the present appeal, the starting point must be the existence of Mrs Patton and her husband as the registered proprietors as joint tenants of land under the provisions of the Real Property Act 1900 (NSW) (the Act). As Baalman observed in the first edition of The Torrens System in New South Wales ( 1951) p 331:

With regard to land under the RP Act, whatever relations may be set up between the joint tenants by dispositions dehors the register, their registered estates can be severed only by some dealing amounting to an assignment, which results in an alteration of the register-book.

The same proposition, with some change in language, appears in the second edition of the work, edited by Woodman and Grimes, (1974), p 351.

Mr Baalman's observation is undoubtedly correct, having regard to the terms of s 41(1) of the Act which 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...

The question in the present appeal is not whether there was severance of the registered estates, for clearly there was none. A consistent line of authority has held that, notwithstanding the language of the Act and other Torrens system statutes, an unregistered transfer may give rise to rights and obligations in equity. These in turn may constitute an equitable estate in the land. The application of equitable principles to land under the Torrens system was established as early as Barry v Heider ( 1914) 19 CLR 197 and has been accepted since: see for instance J & H Just (Holdings) Pty Ltd v Bank of New South Wales ( 1971) 125 CLR 546 ; Heid v Reliance Finance Corp Pty Ltd ( 1983) 154 CLR 326 ; 49 ALR 229.

But there is no neat equation between legal and equitable interests on the one hand and registered and unregistered instruments on the other. An instrument of transfer is not effectual of itself to vest in the transferee either a legal or an equitable estate in the land: see Latham CJ in Brunker v Perpetual Trustee Co (Ltd) ( 1937) 57 CLR 555 at 581. Where, however, there is a transaction for value which is recorded in a contract followed by an instrument of transfer or which is recorded in the transfer itself, there will result an equitable interest in the land commensurate with the transferee's ability to obtain specific performance of the contract: see Bahr v Nicolay (No 2) ( 1988) 78 ALR 1 ; 164 CLR 604 at 612, 645-6. But where the transaction is not for value, the transferee acquires no estate in the land merely by force of execution and delivery of the transfer. Other considerations apply, for instance whether there has been a completed gift. It will be necessary to return to this matter later.

The answer to the question posed earlier in these reasons is not necessarily to be found in principles of equity. And while decisions relating to the efficacy of gifts may provide an analogy, too much emphasis on equitable principles and on those decisions tends to obscure what is at issue in the present appeal. Mrs Patton did not purport to make a gift to Mr Corin. She purported to transfer to him an interest which he would hold in trust for her. The persons in conflict are not donor and donee. The issue is not whether Mr Corin could enforce the transfer against Mrs Patton; rather it is whether that transfer had any consequences for what would otherwise be Mr Patton's right to be registered by survivorship as the registered proprietor of an estate in fee simple in the land.

Ordinarily, severance of a joint tenancy will be effected by the alienation by one joint tenant of his or her interest to a stranger though it may be effected by a transfer by joint tenants to themselves as tenants in common as in Wright v Gibbons ( 1949) 78 CLR 313. In approaching the Act, it must be borne in mind, as Dixon J pointed out in Wright v Gibbons, at 333, that "the interests of each joint tenant [fall] within the general statutory principle that all lands and all interests therein lie in grant". By the terms of s 41(1), it is upon registration of an instrument that the estate or interests specified in the instrument passes and, in terms of the Act, until registration the estate or interest of the transferor remains undisturbed. If the questions raised by this appeal turned solely upon the language of the Act, it would be enough to say that, the transfer executed by Mrs Patton remaining unregistered, there had been no alienation of her interest as joint tenant and accordingly, upon her death, her interest passed by survivorship to her husband. And, in the end, it is by reference to the Act that the appeal must be disposed of.

Where a transfer is by way of gift, the courts have imported the learning of Milroy v Lord ( 1862) 4 De GF & J 264 ; 45 ER 1185 that equity will not assist a donee by perfecting an imperfect gift . Milroy v Lord was relied upon in Anning v Anning ( 1907) 4 CLR 1049 and later in Brunker. The respondent argued that Mrs Patton had not done all that was necessary on her part to divest herself of her interest as joint tenant and that, in particular, she had not taken the steps required by s 96(2) of the Conveyancing Act 1919 (NSW) empowering her to call upon the bank to produce the duplicate certificate of title to the Registrar-General to enable the transfer to Mr Corin to be registered. More basically, the view of the Court of Appeal was that Mr Corin had not acquired a right to have the transfer registered "which the deceased... could not intercept or defeat". This is the language of Dixon J in Brunker, at 600, a test that was approved in Taylor v DCT ( 1969) 123 CLR 206.

However, the circumstances of the present case are different from those in the gift cases. There was no intention on the part of Mrs Patton that Mr Corin should have a beneficial interest in the land and no expectation on his part that he would have one. Indeed, by the deed of trust he was to hold whatever interest he acquired in trust for Mrs Patton so that once she divested herself of her registered estate in the land as joint tenant she would nevertheless be beneficially entitled to an interest as tenant in common. Some 11 years before Milroy v Lord was decided, Sir John Romilly MR, in Bentley v Mackay ( 1851) 15 Beav 12 at 18 ; 51 ER 440 at 442, observed:

In all cases where the legal owner intends voluntarily to part with property in favour of other persons, the court requires everything to be done which is requisite to make the legal transfer complete; for if anything remains to be done, this court will not be made an instrument for perfecting it (emphasis added).;

The failure of Mrs Patton to deliver the certificate of title to Mr Corin or to procure its production is not, in all the circumstances, crucial to the outcome of this appeal. Only one certificate is issued in the case of a joint tenancy. Baalman, 2nd ed, p 353, notes:

Now, except when formally requested, or in unusual circumstances such as the bankruptcy of a joint tenant or sale of his interest pursuant to a writ, it is not the practice to issue separate certificates of title upon severance of a joint tenancy. The transfer or other instrument effecting the severance will normally be registered by recording in the Register a single memorial specifying the present proprietors of the respective shares.

As a result of amendments made to the Act in 1970, even tenants in common no longer receive separate and distinct certificates of title as a matter of course. The Registrar is empowered to issue separate certificates of title in the circumstances mentioned in s 100(2).

The point is that, from the very nature of a joint tenancy, one joint tenant does not have a separate certificate of title reflecting his or her interest. Ordinarily there will be no certificate in the possession of one joint tenant which he or she is in a position to deliver to a proposed transferee, whether for value or otherwise. And so, to encompass delivery of the certificate in the steps required of a joint tenant seeking to sever the joint tenancy may be to make a somewhat unreal demand, even when the land is not encumbered.

When the land is encumbered, whether by registered or unregistered mortgage, the certificate of title will ordinarily be in the possession of the mortgagee. In those circumstances, a joint tenant seeking to sever the joint tenancy can do no more than call for production of the certificate to enable registration of the transfer of the joint tenant's interest. Section 96(2) of the Conveyancing Act entitles a mortgagor "to have the relevant certificate of title... lodged at the office of the Registrar-General" to permit registration of an authorised dealing by the mortgagor. At the same time, s 38(1) of the Real Property Act contemplates that a dealing may be registered without production of the certificate of title; the Registrar may refuse to register a dealing in its absence but he is not obliged to do so.

So, failure by Mrs Patton to call upon the bank to produce the certificate of title for registration of the transfer to Mr Corin is not, in all the circumstances, of great moment. One would not have expected her to do so until a date had been fixed for registration of the transfer. To place great emphasis on this failure is, I think, to overlook the realities of the situation and conveyancing practice.

None of this is to suggest that notice by one joint tenant to another is sufficient to sever a joint tenancy. For the reasons given by Mason CJ and McHugh J, the statement by Lord Denning MR in Burgess v Rawnsley [ 1975] Ch 429 at 439, should not be taken as representing the law in New South Wales. See also the note on Burgess v Rawnsley in (1976) 50 Australian Law Journal 246.

But the question still remains. Did Mrs Patton effect a severance of her interest as joint tenant such as to divest Mr Patton of the right to be registered as sole proprietor of the land by survivorship? On Mrs Patton's

death Mr Corin was in possession of a transfer of her interest in the land. Mrs Patton's death did not preclude registration of the transfer if it was otherwise registrable : Brunker, at 585, where relevant authorities are noted; cf Cope v Keene ( 1968) 118 CLR 1 at 7. The authorities relating to the completeness of gifts throw little if any light on Mr Corin's position because he did not ask for the assistance of the court to procure registration of the transfer. He did not need the assistance of equity "in getting in the property": Isaacs J in Anning, at 1063. Neither Mrs Patton nor her executors (admittedly Mr Corin was one of the executors) placed any obstacle in the way of registration. But he took no step to register the transfer nor, it would appear, to procure production of the certificate of title to enable him to do so. (For the reasons given by Mason CJ and McHugh J, s 96(2) of the Conveyancing Act would not have been available to Mr Corin.) What now stands in the way of registration is the declaration of McLelland J that Mr Patton "is solely entitled by survivorship to an estate in fee simple" in the land in question. Of course, in a sense, the declaration begs the question so far as this appeal is concerned for it is the declaration that is under attack.

In Brunker, at 602, Dixon J identified the question before the court as whether the intending donor, by his acts, "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". The question in the present appeal is not, I think, whether Mrs Patton, by her acts, placed Mr Corin in such a position that under the Act he had a right to have the transfer registered, a right which Mrs Patton could not recall. A transferee may present a transfer for registration; he does not need the concurrence of the transferor to do that, though he will require the certificate of title unless the Registrar is prepared to dispense with production.

But the point is that the transfer had not been registered at the time of Mrs Patton's death, whatever the reason. At the moment of her death Mr Corin held a transfer. It was not a transfer for valuable consideration, notwithstanding the reference to a deed of trust. As Hope JA in the Court of Appeal said of the contrary proposition:

If it were correct, every transfer of land to a person expressly agreeing to be a trustee would be for valuable consideration, and every agreement to enter into such a transaction would also be for valuable consideration. In my opinion this is not and never has been the law. There would have been no need for the enunciation of the principle in Milroy v Lord if it were.

While I have said that I do not think the question to be answered is whether Mrs Patton placed Mr Corin in such a position that he had a right to have the transfer registered, a right that she could not recall, I agree with the conclusion reached by the Court of Appeal in that regard, namely, that he did not have such an unqualified right. Possession of the certificate of title aside, Mrs Patton could have recalled the transfer and taken steps, by caveat or injunction, to prevent its registration.

The decision of the Supreme Court of Canada in Stonehouse v Attorney- General BC ( 1961) 31 DLR (2d) 118 is not truly in point. There a husband and wife owned property as joint tenants and before her death the wife transferred her interest to her daughter by a previous marriage. The transfer was registered but, for the purposes of a claim against the Assurance Fund, it was necessary to consider the position of the parties immediately before registration. Ritchie J, delivering the judgment of the court, held that there had been an effective severance of the joint tenancy at the time of transfer. The decision turned, however, on the language of a provision of the Land Registry Act 1948 of British Columbia, not dissimilar to s 41(1) of the Act save that it is prefaced with the words "Except as against the person making the same, no instrument...". Thus, registration of a transfer, whether made for consideration or not, may be enforceable against the transferor. Such a broad operation cannot be given to s 41(1) of the Act.

The real point is that the transfer to Mr Corin had not been registered at the time of Mrs Patton's death. There was no transaction that equity would enforce; there was a transaction that had not been consummated. There had been no divesting by Mrs Patton of her interest as joint tenant. Her registered title remained intact. And not only her registered title. The language of Aickin J in DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) ( 1982) 149 CLR 431 at 463 ; 40 ALR 1 at 26, is apposite here:

If one person has both the legal estate and the entire beneficial interest in the land he holds an entire and unqualified legal interest and not two separate interests, one legal and the other equitable.

On Mrs Patton's death the Registrar-General was empowered, on application, to register Mr Patton as proprietor of an estate in fee simple in the land pursuant to s 101 of the Act. In practice what is required is a Notice of Death: see Baalman and Wells , Land Titles Office Practice, 4th ed (1980), p 65. While there is no change in the registered title of the surviving joint tenant until endorsement on the certificate of title by the Registrar-General, no question of priority of interest arises. To say that a voluntary transfer in registrable form can be registered after the death of the transferor is not to say that the transferee has a right which prevails over other interests. In any event, the transfer to Mr Corin has not been registered. As Latham CJ observed in Wright v Gibbons, at 324: "The Real Property Act does not alter the law with respect to joint tenancy. It leaves the incidents of joint tenancy standing as they are determined by the common law and any other relevant statute." On Mrs Patton's death, her interest survived to Mr Patton. He therefore became entitled by survivorship to an estate in the land. McLelland J's declaration gives effect to that position. None of this is affected by s 24 of the Conveyancing Act whereby a person "may assure property to himself, or to himself and others". There was no assurance from Mrs Patton to herself or to herself and others.

The appeal should be dismissed.