Corin & Anor v Patton

[1988] HCATrans 327

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S82 of 1988

B e t w e e n -

JOHN JEFFREY CORIN and

JUDITH JONES

Applicants

and

RONALD JOHN PATTON

Respondent

Application for special leave

to appeal

MASON CJ

WILSON J TOOHEY J

Corin

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 DECEMBER 1988, AT 2.21 PM

Copyright in the High Court of Australia

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MR D.M.J. BENNETT, QC:  May it please the Court, in this matter

I appear with my learned friends, MR P.E. KING

and MS M.C. WALKER, for the applicant. (instructed

by Smallwood Cathcart)

MR D.L. DAVIES:  May it please the Court, I appear for the

respondent. (instructed by Mervyn J. Cathers & Co)

MR BENNETT:  Your Honours, I have prepared an outline of

submissions which I hand to the Court.

MASON CJ: Yes, Mr Bennett?

MR BENNETT:  Your Honours, this case raises novel and important questions of real property law.

MASON CJ: They are not so novel, are they, because in your

first paragraph you refer to a number of decision

in which the question has been considered?

MR BENNETT:  Yes, Your Honour. It was not quite put the way

I put it in the submissions in those cases which is

why the ones which were decided the other way went

wrong.

Your Honours, it is my respectful submission that

onceyou have the provision in the CONVEYANCING ACT that

a person may convey to himself, one is simply looking

at the wrong field of inquiry to look, as the courts

below appear to have done, at the cases on imperfect

gifts as the appropriate source of law. And the novel

part of this case is the extent to which, when one is

looking at a conveyance from oneself to oneself one

applies rather different principles in determining

whether it is completely constituted. We analyse it

this way -and we have set it out under the heading, "Correctness of Decisions Below" - one can convey to oneself that applies to property which, of course, is defined so it includes legal and equitable estates.

A conveyance of a legal estate held in joint tenancy

to oneself effects a severance at law. Logically,

therefore, a conveyance in equity of an interest in

joint tenancy to oneself effects a severance in equity.

Now, here what was attempted to be done was to

convey to an outside trustee on trust for oneself

so the legal estate of the joint tenant is conveyed to

the trustee; the equitable estate is conveyed to

oneself. The former transaction failed, the legal

estate transaction, because there was no registration

before her death; it was incomplete under the REAL

PROPERTY ACT because of non-registration and a failure

to hand over the certificate of title; it was incomplete

in equity because of the absence of valuable consideration.

Let that be accepted.

It does not follow that the conveyance of the

equitable estate from herself to herself was incomplete

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because that was the real purpose of the transaction.

The only purpose of the whole matter was to effect a

severence of the joint tenancy and, of course, it is

far more important to severe it in equity than at law.

And that was achieved by the conveyance to herself

of the equitable estate pursuant to section 24 of the

CONVEYANCING ACT.

The Court of Appeal said that was incomplete because it could have been recalled by her. There was

no valuable consideration rendering it enforceable in equity and it had the same statutory defects as the conveyance of the legal estate. The fallacy with

that, we submit, is this: first of all, there is a

real problem of meaning in saying that she could recall

the transaction. We say she could not have. She

certainly could have reconveyed to herself and undone

it in that way but that would not have undone the

transaction in so far as its effect was concerned

because the true effect of the transaction was the

severence of the joint tenancy. If the transaction

was sufficient to achieve that, it is quite irrelevant

to say "but she could have undone it by making a

reverse conveyance or a reverse transfer the other way".

TOOHEY J:	Mr Bennett, it is commonplace under the Torrens system for persons who contract with a registered
proprietor to claim to have an equitable estate or an
unregistered interest. The situation here is, as you put it, of the registered proprietor purporting to deal with an equitable estate, although she herself is
the registered proprietor, What is this estate that
she is dealing with that somehow derives from her
registered interest?
MR BENNETT:	She has, Your Honour, the whole legal and equitable

estate in her half. She can deal with either the legal

or the equitable or both. What she attempted to do was

to convey the legal estate to a trustee and the equitable

estate back to herself.

TOOHEY J: She attempted to convey a registered interest in the

land, did she not?

MR BENNETT: Yes.

TOOHEY J: Or her registered estate?

MR BENNETT:  To the trustee, and on trust for herself which means

that she was conveying the equitable estate to herself.

If it had been to a third party, if she had conveyed to

the trustee on trust for a third party, that would have

been a separate conveyance of the legal and equitable

estates; the legal to the trustee, the equitable to

the beneficiary. This, we submit, is the same when one
bears in mind section 24 which permits conveyance to

oneself of legal or equitable estates. And it is that

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aspect of the characterization of it which was not

focused on by the courts below. They looked upon it

as being, in effect, a gift to the trustee which was imperfectly constituted. We submit that may well be

right in relation to the conveyance of the legal

estate but it is simply an area of analysis, it has

nothing to do with conveying to yourself.

MASON CJ:  Mr Bennett, before the statutory provision enabling

a party to convey to him or herself was introduced,

how did a transaction of this kind operate?

MR BENNETT:  The statute of uses would have executed the use

and there would have been either a resulting trust

because of no consideration or, in this case, an

express trust, either of which would mean the statute

would execute the use and the property would not pass,

therefore, there would be no severence of the

jointure.

MASON CJ:  Why is it that since the CONVEYANCING ACT was

introduced with this provision you treat the transaction
as giving rise to a transfer of the beneficial state to

the beneficiary, thereby giving it an operation at law

and in equity different from what it had before?

MR BENNETT:  Because, Your Honour, a transfer of one's interest

as a joint tenant is one of the ways in which a

severence is effected and we say that the provision

of the CONVEYANCING ACT saying you can convey to
yourself means that it is now open to a joint tenant
to sever the joint tenancy at law or in equity by an

appropriate conveyance to himself or herself.

In WRIGHT V GIBBONS, of course, where there were

three joint tenants, a conveyance by A to Band B to A

of their respective one-thirds, in other words, a

cross-conveyance in consideration of each other was

held to be sufficient and that is at least

as meaningful as a conveyance to oneself bearing in

mind that there is no legal difference between the

third which each of them had so, we would submit,

it simply follows from that line of authority.

I can hand Your Honours the cases we have

referred to in the first paragraph.	I have a bundle
of them.

MASON CJ:  Yes. Coming back to that, Mr Bennett. I should have

thought myself that it may well be that what happens

is that there is a transfer of the entirety of the
transferor's interest to the trustee and the trustee,

in effect, having acquired the entirety of the

transferor's interests, holds the legal estate himself

and the equitable estate for the beneficiary but it

does not operate as a distinct transfer of the legal

estate to the trustee and a distinct transfer of the

equitable estate to the beneficiary.

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MR BENNETT:  Your Honour, that is one of the issues which would have to be determined.

MASON CJ: What authority have you got to deny that view of the

transaction?

MR BENNETT: Certainly the Canadian case, Your Honour, and to a

lesser degree, the decision of Justice Murray in the

Family Court in BADCOCK V BADCOCK. Can I just show

Your Honour the Canadian case first because that

puts it rather more clearly?

MASON CJ: Yes, certainly.

MR BENNETT: It is RE MURDOCK AND BARRY, 64 DLR (3d) 222. That

concerned a Canadian provision which was to the same

effect as section 24 of the CONVEYANCING ACT.	At page
228, Mr Justice God.man, at about line 6, says:

I am of the opinion, for the above reasons, that the wording of s. 42 of the CONVEYANCING

AND LAW OF PROPERTY ACT is such that it

enables a joint tenant to sever a joint

tenancy by a conveyance to himself without

resorting to the old cumbersome method

involving the use of a deed to uses requiring

the participation of a third person or to a

conveyance by the joint tenant to a third

person who, in turn, might reconvey the

property back to such joint tenant.

And then over the page, in the middle of page 229,

against the word "expressed" in the left-hand margin,

His Honour said:

Even if the conveyance in question were not deemed

tobe a severance of the joint tenancy pursuant to the provisions of s. 42 ..... the declaration of intention in the affidavit, coupled with the

execution and registration of the deed would,

in my opinion, have effectively estopped her

from claiming by survivorship any ..... As she

had by the conveyance precluded herself from	claiming by survivorship any interest .....
such act she destroyed the joint tenancy.

As previously indicated, a joint tenant

can unilaterally sever the tenancy by a

conveyance to a third party. As a matter of common sense, as well as law, it seems to me

that the execution and registration of a deed

by a joint tenant conveying her interest in joint

property to herself in like manner as she could

have done to another person and as provided by

s. 42 of the CONVEYANCING AND LAW OF PROPERTY ACT,

for the purpose of carrying out the expressed

intention of effecting a severance, should be

no less effective in severing the joint tenancy .....

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In view of the novel nature of, and the

lack of authorities dealing with the

problem ..... I do not think it is a proper

case for costs.

WILSON J: There is an emphasis there, of course, _on

registration, Mr Bennett.

MR BENNETT:  Yes, Your Honour. But the proposition I was

defending at the moment was the proposition that a
conveyance to oneself severs a joint tenancy. In

this case I have got to establish the second

proposition and extending that to the equitable

estate.

BADCOCK V BADCOCK is the only other case I

will remind Your Honours of. It is a decision

of Justice ltirray reported only in (1979) FLC 90-723.

Her Honour, there, had to deal with a case where

there was a deed of trust. It was simply a

deed of trust. There was a transfer in the deed of

trust. The transfer transferred her interest as

joint tenant to a third party to hold as

tenant in cormnon; a deed of trust said it was held

on trust back for her.

At page 78,895, in the second column, Her Honou

says this, half-way down the page:

The only authority cited by the husband's

counsel for the proposition that the joint

tenancy has not been severed was that of

GOLDING V HANDS -

that is one of the three West Australian cases - and

that is referred to. And then after citing a passage

from that case, Her Honour says:

But the passage from BRUNKER's case referred

to by the learned Judge contrasted an

unregistered transfer which purported to

value. There is no suggestion here (nor was effect a gift as opposed to one made for there in GOLDING's case) of any gift at all -

and that is the point which we make to distinguish MILROY V LORD , ANNING V ANNING, BRUNKER V PERPETUAL TRUSTEE, and that line of cases. This is not a case

of a gift, it is a case of someone attempting to
create a new situation in relation to the joint

tenancy by entering into a transaction in which,

really, she is the only person affected.

TOOHEY J:  I am still having trouble coming to grips with this

notion, Mr Bennett. If the registered proprietor

of land transfers the registered estate - perhaps th

begs the question - executes a transfer of the

registered estate to someone who is to hold that lan

on trust for the transferor, your proposition seems

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to be that in some way the registered proprietor, absent registration, has conveyed the equitable estate in the land.

MR BENNETT:	To himself, yes.
TOOHEY J:	To himself.
MR BENNETT:	And one can test it this way, Your Honour:

implicit in Your Honour's question and the question

Your Honour the Chief Justice asked me earlier is

the assumption that if the conveyance to the trustee

falls or is ineffective or imperfectly constituted,

that must carry with it the subsidiary trust engrafted

on that. But when one looks at the purpose of the

exercise, what this registered proprietor was concerned

about, what she was attempting to do, was not - her

principal objective was not to give the trustee a

legal estate. That was an incidental objective. Her

real objective was to deal with the estate in such a

way that true ownership would not be affected but the

joint tenancy would be severed. That was what she was

trying to do.

Now, if one applies that to the situation where

there is a conveyance of the legal estate which is

imperfectly constituted and a conveyance of the

equitable estate to herself which is, why, one asks,

should one say that the second part fails when the

primary intention is to transfer that equitable

estate? That is really what she wanted to do.

It is a question of some importance, Your Honours,

because there have been, as Your Honours see, a number

of cases where this sort of issue has been discussed.

Where one has a deathbed situation and a joint

tenant with whom the dying person is at arm's length and the person wishes to sever the jointure quickly,

there is a problem and this is, in that sense, a typical case of that problem arising. The three

Western Australian cases all go the other way to

Justice Murray's decision and they are all single

justice decisions and, in my respectful submission,

this is a case under, apart from anything else, section 35AA(2) of the JUDICIARY ACT where this

Court's decision is necessary,to deal with differences

in single judge decisions elsewhere in Australia.

Now, the other problem ~lth the way the Court

of Appeal put it was the Court of Appeal said there

is no one who could complain about non-implementation.

There was no consideration, so who could enforce it

in equity? My answer to that is that where one is

dealing with a conveyance from oneself to oneself,

that is a meaningless concept. It is an irrelevant

concept to determine whether it has been properly

consistituted. The question is not whether she, in
her capacity as transferee, could undo the transaction,

the question is whether she, in her capacity as transferor,

could undo it. And if I am right in saying that it had

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the relevant effect on the joint tenancy, it could not

be undone. It could be reversed but it could not be

undone. And, for the same reason, we submit

consideration is irrelevant.

The only reason for consideration was to rebut

the presumption of a resulting trust which existed

under the old law but there is simply no need for

that in relation to this sort of conveyance. A

conveyance from oneself to oneself, we would submit,

hardly needs consideration. The statutory deficiencies,

again, only affect the legal position, not the position

in equity.

There is a subsidiary point in the case which I have referred to in paragraph 17 and that is the

question - and if I succeed on that, it would not

matter that I failed on the main question. That

concerns the question of whether the bank's

willingness expressed after the death of the
deceased to lodge the certificate of title for
registration of the transfer effects it and the
subsidiary question, whether section 96(2) of the

CONVEYANCING ACT which permits one to require a

mortgagee to produce a certificate of title makes

the failure to hand it over irrelevant. In other words,

the fact that at the time of death those matters

had not been attended to does not mean that the

estate would not have been in a position to procure

registration because the bank could have been made

to hand over the certificate of title and, in any

event, there was evidence that it was willing to do

so.

That was a matter on which His Honour

Mr Justice McLelland made some findings but it was

argued before the Court of Appeal that the Court of Appeal did not need to decide it because it decided

the matter on the other questions.

I remind Your Honours, in relation to the questions

generally in this case, that Mr Justice McLelland,

at page 4, line 23, said:

Each of these contentions raises unresolved

and difficult questions of law.

Mr Justice Hope, at page 13, at point 3, said:

The case involves a number of questions

some of which appear to have been settled and

some of which are as yet unresolved.

There is a direct authority my way in the Canadian case

but, in my respectful submission, bearing in mind the

importance of the issue, and the very basic nature of

the law involved, in one sense, the question whether and

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how the doctrines of severence of joint tenancy are

affected by the ability to convey to oneself under

section 24 of the CONVEYANCING ACT, in my respectful

submission, it is a case in which special leave

should be granted.

MASON CJ:  Mr Bennett, was the submission made to the Court of

Appeal that the transaction involved a transfer of

the equitable estate by the transferor to herself?

MR BENNETT:  I am informed, Your Honour, it was not put in

that way but certainly - - -

MASON CJ:  I think that really means it was not put, does it not?

My experience tells me that when a question of that

kind is answered in the form you have answered it, that

it means the submission was not put.

MR BENNETT: Well, it wasrot put in the form I have put it,

certainly. What was put was that on the basis of

all these cases there was sufficient which had been
done to sever the joint tenancy in equity and reliance

was placed on the - - -

MASON CJ: That is a different submission, is it not?

MR BENNETT: Yes. It certainly included the paragraph 17

submission. But, Your Honour, it is a submission which,

in my respectful submission, amounts, really, to a

different legal approach to identifical fact situation.

It is not the sort of submission which - it is more a

method of putting an argument than an independent

submission of law and, in any event, it could not

have meant any different in the evidence, of

course. It is the sort of submission which arises

when the issues are refined.

MASON CJ: ·No, I was mainly motivated to ask by the fact that

the Court of Appeal judgment contained no reflection

of a consideration of the submission which, after all,

is your principal submission here.

MR BENNETT: Yes, that is so, Your Honour, except - well, I am

told MURDOCK AND BARRY was referred to and MURDOCK

AND BARRY, of course, expressly talks in terms of a

conveyance to oneself. So, in that sense the matter

was before the court, but the main argument was based

on BADCOCK rather than MURDOCK AND BARRY.

TOOHEY J:  Because if you were arguing the substantive appeal,

Mr Bennett, at least in relation to the point that

you have just put to us, would cases like ANNING and

BRUNKER and those cases arise?

MR BENNETT:  They arise on the way the Court of Appeal dealt

with it. They arise on the clause 17 argument.

They do not arise squarely on the central way I put the argument except to distinguish them and to show

how dicta,in those cases, can be used to support the

argument I put. But my main argument is that a

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conveyance from oneself to oneself is in a different

area of inquiry to a gift and for that reason the

results are distinguishable. May it please the Court

MASON CJ: Yes, we will hear from the respondent.

MR DAVIES:  If Your Honours please. Your Honours, Mr Bennett

said it was a novel argument. It is a novel argument.

It was not put to the Court of Appeal.	The Court of
Appeal case was argued simply -

MASON CJ: It is novel in that sense: it was not put to the

Court of Appeal.

MR DAVIES:  It was not put to the Court of Appeal, Your Honour,

and it is novel because it really is without any

authority. The case of MURDOCK AND BARRY makes it

very clear that the court there was dealing with the

position where the joint tenancy had been effectively

severed because there had been registration of the

relevant transfer. The position is otherwise in

this case and that is the way the Court must look at it

here, in my submission.

The notion that the transferor can deal with the

equitable or legal estate or both is contrary to

what this Court said, I think, in DKLR HOLDINGS.

In my submission, the judgment in that case makes it
clear that one does not speak of every item of

property as having two estates which may be dealt with,

one or the other. It is only when one gets to the

position where a trust is properly constituted that
there is a legal estate in the trustee and an equitable

estate in a beneficiary, and that position was never

reached in this case.

Your Honours, the transaction between the deceased

and the trustee here was clearly in the nature of a

gift. To that extent it was on all fours with the

decision in MILROY V LORD which has been consistently

followed ever since it was decided. The facts were	in no sense significantly different and it was held
in that case that it was a gift and that being -

MASON CJ: Your case, basically, is if you look at page 10

of the application book and at the form of the

transfer, that the transfer attempted to vest in the
trustee the entirety of the legal and equitable

estate?

MR DAVIES: Yes, Your Honour.

MASON CJ: And as. in the circumstances, it was not a completely

constituted trust, the transfer was ineffective?

MR DAVIES: That is so, Your Honour.

MASON CJ: And did not carry the equitable estate to the transferor

pursuant to the transfer?

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MR DAVIES: That is so, Your Honour.

MASON CJ:  Now, what do you say in response to Mr Bennett's

submission that having regard to the provisions of

the CONVEYANCING ACT you can treat the transfer as

involving a vesting separately and distinctly of the

legal and the equitable estate in the trustee and

the beneficiary respectively?

MR DAVIES:  Your Honour, I say that it is inconsistent with

DK.LR HOLDINGS. It involves some theoretical

transfer to the trustee of the equitable estate and

then back to the transferor without any movement

of the legal estate whatever which is a novel

submission and is inconsistent with DK.LR; that

until such time as the legal estate was transferred,

the beneficiary, the transferor, could never have
back the equitable estate pursuant to the trust.

The only movement that could have taken place here was the equitable estate to the trustee and it is

our case that that never happened because the trust

was not fully constituted.

Not only was the test in ANNING VANNING not

followed or not complied with because the donor had

not done everything in her power, but there was no

valuable consideration enabling the trustee to

enforce it quite apart from that and if the trustee

had no right to enforce it, then there was nothing

that could be done to prevent the recall oE the

transaction by the transferor and that is what

Sir Owen Dixon made clear in BRUNKER's case.

Those are my submissions if Your Honours please.

MASON CJ: Thank you. Yes, Mr Bennett?

MR BENNETT: If Your Honour pleases. Your Honours, if one looks

at the wording of the transfer on page 10, first of

all, at line 14, the transfer is:

"In consideration of and pursuant to the

terms of a Deed of Trust ..... of even date ..... "

So transfer must be read as incorporating by

reference those terms. Those terms, having recited

that:

The beneficiary is the registered proprietor

as joint tenant with her husband -

and -

The beneficiary desires a severing of the

joint tenancy -

and -

The beneficiary has contemporaneously herewith

executed a ..... Transfer.

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The transfer of the legal estate was nothing more than a means to an end. What was being done here

was to effect as much of the transfer without actually

passing with the real ownership as would sever the

joint tenancy, and, in my respectful submission,

there is no difficulty in reading into that a transfer

of the equitable estate. And nothing in DKLR is

inconsistent with that.

Under the CONVEYANCING ACT one could have a

transfer or conveyance which says, "I transfer

the beneficial interest in the property to myself" or,

"I declare myself trustee of the property for myself."

That is now meaningful although it would not have been before under the CONVEYANCING ACT and we submit it has

the effect on the joint tenancy.

MILROY V LORD is not quite consistently followed

in all respects in the later cases but I will not go

into the controversy about that at this stage. If

Your Honours please.

MASON CJ:  The Court will grant special leave to appeal in

this matter.

MR DAVIES;	Your Honour, will Your Honours just hear me on one aspect of costs without attenpting to canvass Your Honours)
decision? Since the question tnat was argued today
was never put in the court below, are Your Honours
prepared to order that the applicant should pay the
costs of the appeal in any event?

MASON CJ: What do you say about that, Mr Bennett?

MR BENNETT:  Your Honour, I submit that is a matter to be dealt

with on th e hearing of the appeal. The Court will

then better to be able to determine exactly what

was put in the Court of Appeal.

MASON CJ:  Do you want to say anything in reply to that, Mr Davies?

MR DAVIES:  No, Your Honour.

MASON CJ: The Court is not disposed to make any order conditioning

the grant of special leave to appeal on costs. The matter of costs can be dealt with at the hearing of the appeal.

MR DAVIES: If Your Honour pleases.

AT 2.55 PM THE MATTER WAS ADJOURNED SINE DIE

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