Ghalayini v Ghalayini

[2025] NSWSC 451

Supreme Court

New South Wales

Medium Neutral Citation:

Ghalayini v Ghalayini [2025] NSWSC 451

Hearing dates:

15 April 2025

Date of orders:

12 May 2025

Decision date:

12 May 2025

Jurisdiction:

Equity - Real Property List

Before:

McGrath J

Decision:

Declaration made that the plaintiffs and first defendant agreed not to sever the joint tenancy.

Injunctions granted to restrain the first defendant from severing the joint tenancy and the second defendant from registering the transfer to sever the joint tenancy.

Catchwords:

REAL PROPERTY – Torrens title – Joint tenants – unilateral severance of joint tenancy – where defendant father and two plaintiff children purchase property as joint tenants – where transfer severing joint tenancy lodged with Registrar-General by father – application by children to restrain registration – where agreement not to sever the joint tenancy – HELD – parties reached agreement not to sever joint tenancy and father restrained from severing joint tenancy

CONTRACTS – Formation – Consideration – mutual promises not to sever joint tenancy good consideration

Legislation Cited:

Real Property Act 1900 (NSW), s 97

Family Law Act 1975 (Cth)

Cases Cited:

Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424; [1954] HCA 20

Beaton v McDivitt (1987) 13 NSWLR 162

Breen v Williams (1996) 186 CLR 71; [1996] HCA 57

Burton v Prior [2015] NSWSC 295

Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; [2015] HCA 2

Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87

Chief Commissioner of State Revenue v Dick Smith Electronic Holdings Pty Ltd (2005) 221 CLR 496; [2005] HCA 3

Cohen v Cohen (1929) 42 CLR 91; [1929] HCA 15

Corin v Patton (1990) 169 CLR 540; [1990] HCA 12

DPP (Vic) v Le (2007) 232 CLR 562; [2007] HCA 52

Dunlop Pneumatic Tyre Co Ltd v Selfridge and & Co Ltd [1915] AC 847

Freed v Taffel [1984] 2 NSWLR 322

Gould v Kemp (1834) 2 My & K 304; 39 ER 959

Goyal v Chandra (2006) 68 NSWLR 313; [2006] NSWSC 239

Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190

Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15

James v Barker [2009] NSWSC 725

McCoy v Caelli [2008] NSWSC 986

Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723

Perry v Anthony [2016] NSWCA 56

Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39

Regreen Asset Holdings v Castricum Brothers [2015] VSCA 286

Roscorla v Thomas (1842) 3 QB 234

Shadwell v Shadwell (1860) 9 CB (NS) 159; 142 ER 62

Smith v Smith [2025] NSWSC 287

Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168

Wigan v Edwards (1973) 47 ALJR 586

Williams v Hensman (1861) 1 J & H 546; [1861] 70 ER 862

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1

Woolworths Ltd v Kelly (1991) 22 NSWLR 189

Wright v Gibbons (1949) 78 CLR 313; [1949] HCA 3

Young v Smith [2015] NSWSC 400

Category:

Principal judgment

Parties:

Christopher Ghalayini (First Plaintiff)
Diana Katsiaras (Second Plaintiff)
Michael Ghalayini (First Defendant)
Registrar-General of New South Wales (Second Defendant)

Representation:

Counsel:
A G Rogers (First and Second Plaintiffs)
A J Macauley (First Defendant)
Submitting appearance (Second Defendant)

Solicitors:
Vinden Lawyers (First and Second Plaintiffs)
John S Gibson & Associates (First Defendant)
Office of the Registrar-General (Second Defendant)

File Number(s):

2024/00477616

Publication restriction:

Nil

JUDGMENT

INTRODUCTION

1. The plaintiffs, siblings Christopher Ghalayini and Diana Katsiaras (formerly Ghalayini), have brought these proceedings against the first defendant, their father Michael Ghalayini, and the second defendant, the Registrar-General for New South Wales, seeking to prevent Michael from severing a joint tenancy in the property bearing Land Title Reference X/XXX and situated at X Martin Street, Roselands, New South Wales (Roselands property).

2. For convenience, I will refer to members of the Ghalayini family by their first names without intending any disrespect or over-familiarity.

3. Unfortunately, Christopher, Diana and Michael have fallen into dispute over whether Michael made an agreement with Christopher and Diana not to sever their joint tenancy in the Roselands property. Christopher and Diana assert that there is such an agreement. Michael denies any such agreement. The Registrar-General has entered a submitting appearance so submits to the making of any orders or the giving or entry of judgment in respect of the claim, save as to costs.

4. At the hearing, only the affidavits of Christopher and Diana were read and a short cross-examination of Diana was conducted. No affidavits of Michael were read. There was no challenge to any of the evidence given by Christopher and Diana.

5. For the reasons set out below, I have found that Christopher, Diana and Michael did make an agreement not to sever the joint tenancy in the Roselands property. I will make appropriate orders in accordance with that finding.

RELEVANT FACTS

The Ghalayini family

6. Michael is now 74 years old (T4). Michael worked as a train guard for many years and then as a cleaner.

7. Michael was married to his late wife, Joumana Ghalayini.

8. Joumana worked as a cleaner and operated a canteen for profit at a local school.

9. Michael and Joumana had three adult children: in descending age order, Richard Ghalayini, Diana and Christopher.

10. Diana is married to Louie Katsiaras.

Culburra Beach property and Cambridge Gardens property

11. In about November 1988, Michael and Joumana acquired a property in Culburra Beach, New South Wales (Culburra Beach property) as joint tenants.

12. In about December 1998, Michael and Joumana acquired a second property in Cambridge Gardens, New South Wales (Cambridge Gardens property), also as joint tenants.

Separation of Michael and Joumana and property transfers

13. In about 2013, Michael and Joumana separated but continued to spend considerable time with each other.

14. Following their separation, in 2013 the Cambridge Gardens property was transferred to Joumana and the Culburra Beach property was transferred to Michael.

Death of Joumana and transfer of the Cambridge Gardens property to Michael

15. On 18 August 2019, Joumana died.

16. On 4 December 2019, probate of Joumana’s will was granted by the court. Michael was appointed as the executor under Joumana’s will. Joumana’s will is not in evidence.

17. For short periods after the death of Joumana, Michael resided at different times with Diana and her family in Kingsgrove, with Christopher and his family at Jordan Springs and at Michael’s own residence being the Culburra Beach property.

18. On 20 December 2019, the Cambridge Gardens property was transferred to Michael under Joumana’s will.

Late 2019: Conversation between Christopher and Michael

19. Shortly after Joumana died, while Michael was staying with Christopher and his family, Michael said to Christopher words to the following effect:

I would like to remarry.

December 2019: Conversation between Diana and Michael

20. In about December 2019, Diana and Michael had a conversation in a mix of English and Arabic. Diana and Michael are both fluent in English and Arabic. The conversation took place in words to the following effect:

Michael:   I’d like to sell the properties your mother and I owned and buy a new house.

Diana:   That sounds good. Christopher and I can help you look.

January 2020: Conversations between Diana and Michael

21. In about January 2020, Diana and Michael had a conversation in words to the following effect:

Michael:   I want to remarry. I’m feeling a bit lonely.

Diana:   It’s so soon after mum died. Can we talk about this with Louie.

Michael:   I don’t have anyone in mind yet. It’s just what I think I want to do.

22. In about January 2020, Diana, Michael and Louie had a conversation in words to the following effect:

Louie:   Michael we are worried about you rushing into a marriage straight after the passing of Jo.

Michael:   I know Louie, but I still love my children and I’m going to protect them and myself when I do get married. I want to make sure my assets and money goes to them. When I buy a new house, it needs to be set up so it goes to my kids.

Diana:   That’s important dad. If you died after you remarried, all you [sic] and mum’s hard work would not come to your children.

Michael:   I agree, I’m going to protect against this.

23. In about January 2020, Diana and Michael had a conversation in words to the following effect:

Diana:   Dad, what are you doing to protect the house you are going to buy so it is left to your children? You are about to buy a house with money raised from selling your other houses.

Michael:   I know, I will put something in place.

Diana:   We should see a lawyer.

Michael:   Yes, let’s do that.

February 2020: Sale of Culburra Beach property

24. On 26 February 2020, Michael transferred the Culburra Beach property to Christopher. The transfer records Michael’s receipt of $400,000 in consideration.

March 2020: Sale of Cambridge Gardens property

25. On 23 March 2020, Michael transferred the Cambridge Gardens property to Natalie Lorence and Zachary James. The transfer records Michael’s receipt of $680,000 in consideration.

March 2020: Michael’s proposed purchase of the Roselands property and conversations between Christopher, Diana and Michael

26. In around March 2020, Michael was actively looking for a house to buy, often accompanied by Diana to open house inspections. Christopher also contributed significantly to the process of purchasing the Roselands property.

27. Christopher, Diana and Michael all inspected the Roselands property. At the time of their inspection, the Roselands property was a fully renovated bungalow with a newly built granny flat.

28. In about March 2020, Christopher, Diana and Michael had a conversation in which Michael said words to the following effect:

My budget is $(cannot recall) and I may need both your involvement with the purchase.

29. I infer from this statement that the “involvement” Michael may have needed was a financial contribution from each of Christopher and Diana towards the purchase price of the new property.

30. In about March 2020, Christopher and Michael had a conversation in words to the following effect:

Christopher:   Dad, I suggest that we have a family meeting to discuss how we can protect the property in the event that Rania decides to leave you.

Michael:   I agree. What steps do we need to take? Please then organise and I will follow your direction.

Christopher:   I will organise a meeting with Diana and we can make sure we are all on the same page.

Michael:   Okay.

31. The reference to “Rania” in this conversation was to Michael’s proposed new wife. There is no evidence of Rania’s surname or when Michael and Rania agreed to marry.

32. In about March 2020, Christopher, Diana and Michael had a conversation in words to the following effect:

Diana:   Dad, you are getting close to buying a house and we need to have a plan to secure the house in case you remarry.

Michael:   I agree.

Christopher:   Let’s go and see a lawyer. I know a solicitor in Dee Why we can see.

33. In March 2020, Christopher, Diana and Michael drove to see a solicitor in Dee Why. On their way, they had a conversation in words to the following effect:

Diana:   Dad, you know why we are going here and what we are doing?

Michael:   Yes, I know, I am trying to protect my and your mum’s hard work if I remarry. This is to protect the assets we obtained and to keep these for my kids.

34. There is no evidence as to whether any meeting did take place with a solicitor in Dee Why or, if such a meeting did occur, what took place during it.

April–May 2020: Purchase of the Roselands property and conversations between Christopher, Diana and Michael

35. Before the exchange of the contract of sale for the Roselands property, Christopher, Diana and Michael had a conversation in words to the following effect:

Michael:   We need to buy the house together. I want your names on the title to the house because this is to be yours when I die.

Diana:   We are still waiting for the lawyer’s view on how best to own the house.

Christopher:   For now we should all sign the contract but we do not need to say if we will be joint tenants or tenants-in-common. We can see what the lawyer says.

Diana:   We also want to pay something for the house.

36. In April 2020, Christopher and Michael had a conversation in words to the following effect:

Christopher:   Richard is getting divorced and he should not go onto the title because his wife may claim part of the house. Diana and I will hold one third for him.

Michael:   I understand. That makes sense.

37. Diana gave evidence of a similar conversation that occurred sometime prior to settlement of the Roselands property, albeit with differences as to who spoke the similar words, in words to the following effect:

Michael:   The assets I want to protect at some point need to be distributed fairly to the three of you equally (minus the $60,000 you each put in).

Christopher and Diana:   I agree.

38. On 15 April 2020 at 8:35pm, Diana sent an email to Brendan Sedrak (a solicitor from Legal One in Parramatta), copied to Michael, Christopher and Niki Trimmis of Wealth3 (an adviser to Diana: T5), which stated:

Hi Brendan,

Our offer for $1,105,000 has been accepted today for [the Roselands property]. We are going tomorrow at 4pm to sign and pay our 0.25% deposit ($2,762.50).

Niki suggested we purchase as tenants in common 80/20, with my father, Christopher and I.

However, we will need guidance from Niki which is the best way.

History on this property, previously passed in at auction for the price of $1,160,000.

They agreed tonight for $1,105,000. Early settlement was discussed, I said only in [sic] the instruction from my solicitor (you). If all good on your end, we are happy to settle earlier.

I have passed on your details to Marshalino (real estate agent). Could you please advise any further information you are needing from me/us.

I will notify you tomorrow once we have signed and what next steps to take.

Many thanks and talk soon.

39. As reflected in this email, in cross-examination Diana said that Niki was someone she was having conversations with about the Roselands property, Niki had proposed that the purchase of it be as tenants-in-common, with 80% in Michael’s name and 20% between Christopher and Diana, and Diana wanted some guidance from Niki in the coming days (T5).

40. On 16 April 2020 at 12:03pm, Mr Sedrak sent an email to Diana, in reply to her email of 15 April 2020, which stated:

Hi Diana,

Thank you for reaching out. Hope you’ve been keeping well and safe. More than happy to assist you, Chris and Michael.

Our fees for this Contract review will be $250.00 plus GST. Please confirm you are happy for us to proceed to carry out the review.

41. On 16 April 2020 at 1:03pm, Diana responded by email to Mr Sedrak, copied to Michael, Christopher, Niki and others, which stated:

Hi Brendan,

As per our telephone conversation, we are happy for you to proceed.

42. On 16 April 2020, the contract of sale for the Roselands property was exchanged, having been executed by Christopher, Diana and Michael (T4–5). The contract of sale is not in evidence, which is extremely strange as this case centrally concerns that very transaction.

43. On a date sometime between the exchange of the contract of sale for the Roselands property on 16 April 2020 and settlement on 20 May 2020, most likely on 18 May 2020, Christopher, Diana and Michael held a meeting with Mr Sedrak. At the meeting with Mr Sedrak, he advised Christopher, Diana and Michael that they could purchase the Roselands property as joint tenants with the effect that the Roselands property would remain in the ownership of their family by survivorship.

44. At some time after the meeting with Mr Sedrak, Christopher, Diana and Michael had a conversation in words to the following effect:

Christopher:   Dad, I suggest we take the legal advice and proceed with the joint tenancy. The lawyer also suggested that you have a prenup.

Michael:   Okay, so long as mum’s and my hard work are protected, I am happy.

45. Prior to the completion of the purchase of the Roselands property, Christopher, Diana and Michael had a conversation in words the following effect:

Diana:   Brendan says the house needs to be in our names as joint tenants.

Michael:   Yes, that is what we will do.

Christopher:   When you remarry, you will also need a financial agreement with your new wife.

Michael:   Yes, I will do this too. My assets will be going to my kids.

Diana:   On this basis, I will pay $60,000 towards the house too.

46. Christopher and Diana then each transferred $60,000 to the trust account of Legal One for the settlement of the Roselands property.

47. On 19 May 2020 at 11:52am, Mr Sedrak sent an email to Christopher, Diana and Michael which stated (emphasis in original):

Thank you all for your respective time throughout yesterday. Settlement is on track for tomorrow.

We note that Chris and Diana have deposited their funds into trust and I understand Michael has deposited his funds this morning.

As discussed in my conversation yesterday afternoon with Niki Trimmis and Diana, following Niki’s comments in respect to the ownership, that the ownership is suggested to be as joint tenants. We note originally ownership of the property was to be 80% Michael and 20% Chris and Diana.

The differences between joint tenants and tenant in common is, as follows:

Joint Tenants

If you own the property as joint tenants, you will each own the property equally and when one of you dies, the survivors are entitled to the whole property. For example, if Chris were to pass away, his share of the property will transfer to Diana and Michael by way of survivorship.

Tenants in Common

If you own the property as tenants in common, when one of you dies, that party’s share forms part of their estate. For example, if Diana were to pass away, her share of the property would go to her estate, and she could have [sic] that share to her family in her will.

Ultimately, purchasing as joint tenants means that if one of you were to die, then the surviving joint tenants are entitled to the whole property.

We note one concern you have is in relation to the effect of relationships have on property ownership. You should discuss with us Binding Financial Agreements.

Please confirm in writing that your joint instructions are to proceed with this purchase and settlement tomorrow, as joint tenants, so that I may finalise the Transfer.

Please feel free to give me a call to discuss.

48. On 19 May 2020 at 12:06pm, Christopher sent an email to Mr Sedrak, Diana and Michael in response to Mr Sedrak’s email at 11:54am, which stated:

Happy and acknowledged

49. On 19 May 2020, also at 12:06pm, Diana sent an email to Mr Sedrak, copied Christopher and Michael, in response to Mr Sedrak’s email at 11:54am, which stated:

I’m happy with the below.

50. Given that Mr Sedrak had asked for joint instructions whether the purchase of the Roselands property would proceed as joint tenants or tenants-in-common, these two emails did not address his request in terms.

51. On 19 May 2020 at 4:57pm, Mr Sedrak sent a further email to Christopher, Diana and Michael which stated:

Hi Michael, Diana and Chris,

I note my conversations with Michael and Diana and the responses to my below email from Chris and Diana are to proceed with the ownership being recorded as joint tenants.

Michael, please confirm that you are happy to proceed as joint tenants or if you want to us to proceed as tenants in common as to 80/20 share.

52. Sometime after Mr Sedrak’s first email of 19 May 2020, Christopher and Michael had a conversation in words to the following effect:

Christopher:   Dad, the house needs to be as joint tenants so it comes to the kids when you die. This is what we have been discussing.

Michael:   Yes, I agree.

Christopher:   We need to tell Brendan, and you especially.

53. On 20 May 2020 at 8:41am, Mr Sedrak sent another email to Christopher, Diana and Michael which stated:

We are at settlement day!

Can I please have your final written instructions regarding the ownership?

Further, we note we are holding the settlement funds in our trust account. In order to apply these funds in PEXA to settle your purchase, we need your written authority to apply the funds in our trust account to PEXA to complete your purchase.

54. On 20 May 2020 at 8:48am, Christopher sent an email to Mr Sedrak, Michael and Diana which stated:

Great to hear Brendan.

Dad, Bredan [sic] needs a response from yourself to proceed.

55. On 20 May 2020 at 9:03am, Diana and Michael exchanged the following text messages:

Michael:   Good morning Brendan. I am authorised you [sic] to go ahead and proceed with the joint tenants contract. Thanking you for your work. Michael Ghalayini

Diana:   You need to email him.

Michael:   Can you e-mail my message to Brandon [sic]. Thanks

Diana:   No. Brendan needs a reply from you via email not txt. You need to go to email press reply and write the reply.

Michael:   Done

Diana:   Ok. Congratulations

56. On 20 May 2020 at 10:17am, Michael sent an email to Mr Sedrak which stated:

I am authorized you [sic] to go ahead with the joint tenants contract.

Thanking you for your work.

Michael Ghalayini

57. On 20 May 2020, settlement of the purchase of the Roselands property took place for a purchase price of $1,105,000, with Christopher, Diana and Michael becoming the registered proprietors as joint tenants.

58. Diana and Christopher each paid $60,000 towards the purchase price of the Roselands property, with the balance of $985,000 being paid by Michael.

Marriage of Michael and Rania

59. It appears that Michael and Rania have now married, although the date on which they did so is not in evidence.

60. Before the marriage of Michael and Rania, Michael said to Diana words to the following effect:

Rania and I have signed a pre-nuptial agreement. I have told her about the [Roselands property] being owned as joint tenants and that it is going to my kids.

December 2024: Transfer Severing Joint Tenancy Executed and Served

61. On 3 December 2024, Michael completed a Transfer Severing Joint Tenancy in relation to the Roselands property and made an accompanying statutory declaration requesting that the Registrar-General record the Transfer Severing Joint Tenancy on the title to the Roselands property. The statutory declaration included the following statement:

I am not subject to any legal constraint which would prevent me severing the joint tenancy.

62. The statutory declaration also identified Christopher and Diana as the other joint tenants of the Roselands property.

63. On 18 December 2024, Christopher received a letter dated 10 December 2024 from NSW Land Registry Services, which attached the Transfer Severing Joint Tenancy lodged at NSW Land Registry Services affecting the Roselands property. The letter advised Christopher that the Transfer Severing Joint Tenancy will sever the tenancy between Michael and Christopher and that if Christopher did not lodge a court order stopping NSW Land Registry Services from registering the Transfer Severing Joint Tenancy before 9 January 2025, it would be registered, and the joint tenancy would then be severed.

64. On 27 December 2024, Diana received the Transfer Severing Joint Tenancy from NSW Land Registry Services.

Proceedings commenced and interlocutory injunctions granted

65. On 23 December 2024, Christopher and Diana commenced these proceedings by filing the summons.

66. On 6 January 2025, the proceedings came before Ball JA at which time orders were made for the service of evidence and submissions, and interlocutory injunctions were granted in the following terms:

…

7.   Order that the First Defendant be restrained until 5pm on 20 February 2025 from proceeding with, or making, any application to sever the joint tenancy in relation to the property bearing Land Title Reference [X/XXX] and known as [X] Martin Street, Roselands, New South Wales.

8.   Order that the Second Defendant be restrained until 5pm on 20 February 2025 from:

(i)   doing any thing, or taking any step, which has, or may have, the effect of severing the joint tenancy in respect of the Property;

(ii)   registering Transfer Severing Joint Tenancy AU654699.

…

67. On 3 February 2025, the proceedings came before Hammerschlag CJ in Eq, when further orders were made for the service of evidence and the preparation of the proceedings for trial before me, as well as the continuation of interlocutory injunctions in the following terms:

…

5.   Without admissions, against the plaintiff extending the usual undertaking as to damages, the first defendant is restrained until further order from proceeding with, or making, any application to sever the joint tenancy with respect to Land Title Reference [X/XXX]and known as [X] Martin Street, Roselands, New South Wales.

6.   Order that the second defendant be restrained until further order of the Court from:

(i)   from doing anything, or taking any step, which has, or may have, the effect of severing the joint tenancy in respect of the said Property; or

(ii)   registering Transfer Severing Joint Tenancy AU654699.

LEGAL PRINCIPLES

68. This case involves the application of legal principles relating to joint tenancy, severance of a joint tenancy, the operation of s 97 of the Real Property Act 1900 (NSW) (RPA) and restraint on the severance of a joint tenancy based on an alleged contract said to have been supported by consideration. The applicable legal principles are outlined below.

Joint tenancy and severance

69. The legal principles concerning joint tenancy are well established.

70. These principles, together with the language and theory which frequently attends their application, could today be fairly described as archaic. In Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; [2015] HCA 2, French CJ, Hayne, Bell and Gageler JJ observed at [47] (references omitted):

In Wright v Gibbons, Dixon J described joint tenancy as “a form of ownership bearing many traces of the scholasticism of the times in which its principles were developed”. And as his Honour’s discussion of the writers shows, the “pedantic, needlessly subtle” thinking of that time was often compressed into maxims: especially “nihil tenet et totum tenet” (he holds nothing and he holds the whole) and “per my et per tout” (for nothing and for everything). But, as Wright v Gibbons demonstrates, those maxims cannot and must not be treated as constituting a complete or wholly accurate description of the legal nature of a joint tenancy.

71. In a similar vein, in Corin v Patton (1990) 169 CLR 540, Deane J at 572–3; [1990] HCA 12, stated that:

The traditional law relating to severance has, at least since Blackstone, commonly been seen as deducible from the four unities – time, possession, title and interest – which are hallmark inhabitants of the institution of joint tenancy. Where all four unities are present in a multiple holding of land, there is joint tenancy. If one or other of them be absent, there ordinarily is not. The “captivating appearance of symmetry and exactness” (Challis’s Law of Real Property, 3rd ed. (1911), p. 367) of this traditional ritual cloaks some obscurity of precise meaning, some overlapping between the unities and some conceptual difficulties about the essential character of joint tenancy.

72. The RPA does not alter the key incidents of joint tenancy as determined by the common law and any other relevant statute: Wright v Gibbons (1949) 78 CLR 313, Latham CJ at 324, Rich J at 326, Dixon J at 328; [1949] HCA 3; Freed v Taffel [1984] 2 NSWLR 322, Helsham CJ in Eq at 324. The RPA preserves the common law of joint tenancy under the descriptor “joint proprietors” and “joint proprietorship of a registered title is in the nature of a joint tenancy, at least until it is severed”: Cassegrain, Keane J at [115], and see also French CJ, Hayne, Bell and Gageler JJ at [53].

73. In Wright v Gibbons, Latham CJ at 323 distilled the key incidents of joint tenancy into a single paragraph:

The interests of each joint tenant in the land held are always the same in respect of possession, interest, title and time. No distinction can be drawn between the interest of any one tenant and that of any other tenant. If one joint tenant dies his interest is extinguished. He falls out, and the interest of the surviving joint tenant or joint tenants is correspondingly enlarged.

74. For present purposes, it is settled law that:

1. The “four unities” of joint tenancy – possession, interest, title and time – provide that each joint tenant must have: a right of exclusive possession; the same interest; acquired their interest by the same instrument; and acquired their interest at the same time: Wright v Gibbons, Latham CJ at 323. A “joint tenancy is severed when one of the unities of title, interest or possession ceases to exist”: Freed v Taffel, Helsham CJ in Eq at 325.

2. Joint tenants own the whole of a property together; each joint tenant has only a potential or “aliquot” share and “[f]or all purposes of alienation, each is seized of, and has a power of alienation over that share only which is [their] aliquot part”: Wright v Gibbons, Brennan J at 331.

3. A joint tenancy may be severed in a number of ways, as explained in the oft-cited judgment of Page Wood VC in Williams v Hensman (1861) 1 J & H 546; [1861] 70 ER 862 at 867:

A joint tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund — losing, of course, at the same time, his own right of survivorship. Secondly, a joint tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested.

4. Severance of a joint tenancy may occur at law or in equity: Corin v Patton, Mason CJ and McHugh J at 548–50. A legal alienation is not necessary “[b]ut there must be an actual alienation in equity if not at law, as distinct from a mere intention or proposal to alienate, before a severance occurs”: McCoy v Caelli [2008] NSWSC 986, Brennan J at [18].

5. A mere declaration of intention to sever – written or oral – does not sever the joint tenancy: Corin v Patton, Mason CJ and McHugh J at 546–8, Brennan J at 565–6.

6. It has always been the law that a joint tenancy may be severed and converted into a tenancy in common by agreement as between all joint tenants: Wright v Gibbons, Latham CJ at 322–3.

7. A transfer of the interest of one joint tenant to a third party fractures the unities of title and time with respect to the transferee and severs the joint tenancy. If there were originally only one other joint tenant, the effect of such a transfer is that the joint tenancy is severed altogether and the transferee and continuing proprietor will hold as tenants-in-common. If, however, there were originally three joint tenants, and one transfers their interest to a third party, the joint tenancy is severed with respect to the transferor, the transferee would hold a one-third interest as a tenant-in-common, and the two continuing joint tenants would hold their two-third share jointly as between themselves: Wright v Gibbons, Latham CJ at 323.

8. A key incident of a joint tenancy is that, unless the joint tenancy is severed, each joint tenant enjoys a right of survivorship. The law of survivorship provides that upon the death of a joint tenant their interest in the property is extinguished, it does not pass to the benefit of their estate and the interest of the surviving joint tenant/s is “correspondingly enlarged”: Wright v Gibbons, Latham CJ at 323; see also Gould v Kemp (1834) 2 My & K 304; 39 ER 959 at 962; Corin v Patton, Mason CJ and McHugh J 546–7 quoting Williams v Hensman at 867.

9. In addition to a right of possession, other conventional incidents of property ownership attach to a joint tenancy, including that each respective joint tenant’s interest is inherently alienable. Generally, a joint tenant is entitled to deal with their interest inter vivos as they see fit, albeit with the consequence that any such alienation will effect a severance of the joint tenancy denying themselves, and their respective joint tenant/s, their right of survivorship: see Wright v Gibbons, Latham CJ at 322–3, Dixon J at 329–31.

Section 97 of the RPA

75. Relevantly, a joint tenancy may be severed unilaterally, including by a transfer from one joint tenant to themselves, under s 97 of the RPA. This provision is designed to facilitate severance without necessarily alienating the respective interest to a third party.

76. Section 97 of the RPA provides as follows (emphasis added):

97 Severance of joint tenancy by unilateral action

(1)   Registration of a transfer by a joint tenant of the joint tenant’s interest in the land that is the subject of a joint tenancy to himself or herself severs the joint tenancy.

(2)   If a joint tenancy is proposed to be severed by unilateral action by one joint tenant, the Registrar-General may require the person who proposes to sever the joint tenancy to provide the Registrar-General, before recording the instrument that severs the joint tenancy, with—

(a)   the names and addresses of the joint tenants or, if the addresses are unknown, evidence of the efforts made by the person to locate the addresses of the joint tenants, and

(b)   a statement that the person is not aware of any limitation or restriction on his or her capacity or entitlement to sever the joint tenancy (arising, for example, from the capacity in which the person holds an estate or interest in the land concerned or from a private agreement).

(3)   The Registrar-General may require the person who proposes to sever a joint tenancy to provide additional information concerning—

(a)   other persons who may be affected by the severance of the joint tenancy, and

(b)   any limitation or restriction on the capacity or entitlement of the person to sever the joint tenancy, and

(c)   any other matter that the Registrar-General considers appropriate.

(4)   The Registrar-General may require any information provided for the purposes of this section to be provided by statutory declaration or verified in a way approved by the Registrar-General.

(5)   The Registrar-General must give notice of the lodgment of a dealing for registration or recording that may sever a joint tenancy to all joint tenants in the joint tenancy (other than any joint tenant who executed the dealing, or on whose behalf the dealing was executed). Section 12A (2) and (3) applies to and with respect to a notice given under this section.

(6)   Despite subsection (5), the Registrar-General is not required to give notice of the lodgment of a dealing for registration or recording that may sever a joint tenancy to a joint tenant in any of the following circumstances—

(a)   if the proposed severance is to arise from the recording of a court order made in proceedings to which the joint tenant is a party,

(b)   if the proposed severance is to arise from the registration of a transfer pursuant to a writ in respect of an interest of any of the joint tenants,

(c)   if the dealing concerned is witnessed by the joint tenant and the dealing indicates that the joint tenancy is to be severed,

(d)   if the dealing is accompanied by a written acknowledgment by the joint tenant that he or she has received legal advice as to the effects of the severance of the joint tenancy,

(e)   if the proposed severance is to arise out of registration following an application under section 90.

77. A unilateral transfer lodged in accordance with s 97 of the RPA does not effect severance, either at law or in equity, until it is registered. The severance occurs by operation of statute and is contingent upon registration: McCoy, Brennan J at [27].

78. The moment of registration is distinct from when the transfer is lodged. When the transfer is lodged, the Registrar-General is required under s 97(5) of the RPA to give notice to all other joint tenants of the lodgment of the dealing for registration, and at this stage it is only a “proposed severance”.

Restraints on severance

79. In Goyal v Chandra (2006) 68 NSWLR 313; [2006] NSWSC 239, Brereton J at [15]–[29] extensively considered the position – and the general lack of authority – with respect to contractual or equitable constraints on the right of a joint tenant to sever a joint tenancy.

80. In Goyal, Brereton J considered, without deciding, that an agreement between joint tenants not to sever could be enforceable and operate as a restraint upon severance by imposing an obligation in equity not to do so. In that case, a husband transferred property he solely owned to himself and his wife as joint tenants. Both the husband and the wife had previously contributed funds to the renovation of the property and availed themselves of the advice of a solicitor as to the nature and consequences of joint tenancy. It was contended by the husband in that case that there existed an understanding between the parties, implicit if not explicit, that the joint tenancy would be left intact, so that the survivor would take the property on the other’s death. The primary claim advanced was one in estoppel. Both the husband and wife had individual loans secured by their interest in property, with each guaranteeing the debt of the other, presumably to negate what has been called the “gamble of the tontine”: Corin v Paton, Deane J at 573. Unfortunately, the wife fell ill and, being unable to meet her repayment obligations, the husband met those obligations in her stead. The relationship later deteriorated and the pair separated. The wife sought to sever the joint tenancy by unilateral transfer pursuant to s 97 of the RPA and the husband sought to restrain that transfer from being registered.

81. I note that Goyal was a case for interlocutory relief which – in the unique circumstances of that case, where the matter was headed for “inevitable” proceedings under the Family Law Act 1975 (Cth) in any event – was ultimately declined for want of utility and so the comments of Brereton J are strictly obiter. Nevertheless, his Honour made several useful observations, including the following (emphasis in original):

[15]   Neither counsel has been able to refer me to any case in which a joint tenant has been restrained from severing the joint tenancy. In what Helsham CJ in Eq, in Freed v Taffel [1984] 2 NSWLR 322 at 324 described as the locus classicus for the common law rules as to severance, Page Wood VC said, in Williams v Hensman (1861) 1 J & H 546 at 557; 70 ER 862 at 867:

“A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place and the share which is claimed under the jus accrescendi. Each one is at liberty to dispose of his own interest in such manner as to sever it from the joint fund — losing, of course, at the same time his own right of survivorship.” (Emphasis added.)

[16]   However, neither the Vice Chancellor in that case, nor — with two possible exceptions to which I shall come — in any case since revealed by the limited researches that all involved have been able to undertake so far — has it been considered whether that principle is one which may be constrained by agreement or by some equitable obligation falling short of agreement.

…

[23]     It seems to me that if one co-owner, and it matters not for present purposes whether he or she be joint tenant or tenant-in-common, binds himself or herself to deal with his or her interest only in a particular way — namely, by transferring it or devising it, or leaving it to pass by way of survivorship to the other — that is not a restraint on alienation. The property itself remains alienable. The owner undertakes a personal obligation to deal with it only in a particular way. Anyone who enters into a contract for sale does that. Any owner of land who creates in another an equitable interest by way of proprietary estoppel does that. Such an agreement or arrangement is not void as a restraint on alienation. It follows that an agreement not to sever a joint tenancy is similarly not void as a restraint on alienation.

[24]     The analogy with mutual wills has further significance. Such arrangements not uncommonly involve spouses who are also co-owners of land. In such a case, the two testators may make mirror wills, leaving their estate (including their interest as tenants-in-common in real estate) property to the other if the other survives, but if not, to descendants. If the first to die does so leaving his or her will unrevoked, so that the survivor takes under that will, then the survivor is not at liberty to deal with her or his estate except in accordance with the terms of the mutual wills as originally made: equity imposes on the survivor, who receives property under the will of the first to die, an obligation to deal with that property upon the terms on which it was received. One consequence of that is that the property is not available, at least for some purposes, in the estate of the survivor: see Schaefer v Schuhmann [1972] AC 572, a decision of the Privy Council on appeal from this Court.

[25]     Mr Armfield argued that the mutual wills doctrine depends on agreement, and that, absent agreement, there was no room for its application by analogy in the present context. I do not accept that submission. Although in Birmingham v Renfrew (1937) 57 CLR 666, it is clear that there was an agreement to make mutual wills, equitable interests analogous to those which arise in the mutual wills context can arise in circumstances which fall short of agreement. Although many of the well-known proprietary estoppel cases such as Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285 and Ramsden v Dyson (1866) LR 1 HL 129 arise inter vivos, such estoppels can sometimes operate against a deceased estate for the benefit of a survivor. While Schaefer v Schuhmann was a case of contract and not of estoppel, the same principles apply where an interest is acquired by proprietary estoppel rather than by contract: see, for example, Costello v McGufficke (Cohen J, 21 July 1987, unreported). And it is only necessary to resort to proprietary estoppel where something less than a contract is relied on for asserting an interest in property.

[26]     Usually, property held in joint tenancy stands outside the scope of the equitable obligation imposed in the mutual wills context, because property so held is not regarded as part of the subject matter of the agreement, passing as it does by survivorship and not under the wills. But there does not seem to be any reason in principle why an interest held by a co-owner jointly should not be capable of being dealt with in this manner, just as one held by a co-owner in common with another, if the joint tenants so agree, or if they reach some arrangement or understanding short of agreement which nonetheless gives rise to an equitable obligation to the same effect. In such circumstances, equity will enforce the obligation by disregarding a severance of the legal joint tenancy.

[27]     Mr Armfield has also referred me to what has been written by Professor Butt (P Butt, Land Law, 5th ed (2006), Sydney, Lawbook Co) at 238 [1461], where the author, referring to Parry v Sullivan and Anderson v O’Donnell says:

“… There is authority that such a transfer does not sever if it is in breach of a contract not to sever. However, it seems difficult on principle to see how the agreement not to sever can deprive the joint tenant of the power to deal with his or her interest in the land; and so here too the joint tenancy should be severed, leaving the severing party liable in damages for breach of the contract not to sever.”

[28]     The answer to Professor Butt’s proposition, in my opinion, is this: first, the agreement not to sever does not deprive the joint tenant of the power to deal at law with his or her interest in the land, but imposes an obligation in equity not to do so. Secondly, if, before being restrained, one joint tenant deals with his or her interest inconsistently with the agreement, the dealing is valid to create or to change the legal interests, but it does not affect the equitable interests (except in favour of a bona fide purchase for value without notice): equity gives effect to the agreement, as in Parry v Sullivan. If the intervention of equity is sought before the dealing takes place, then, it seems to me, equity can restrain the dealing.

[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.

82. James v Barker [2009] NSWSC 725 is authority for the proposition that a joint tenant may bind themselves to deal with their interest only in a particular way — namely, by leaving it to pass by way of survivorship to the other. In this case, it was contended that two joint tenants entered into an agreement not to sever the joint tenancy or sell the property with the mutual intention being that the property would pass to the survivor and, ultimately, provide a home for their son. Claims in estoppel and constructive trust were pleaded as alternatives to the claim in contract. The promise not to sever the joint tenancy was expressed orally and colloquially as between family members, being an agreement that the relevant property “will never be sold” with the mutual intention that it remain in the family and pass to their son. Tamberlin AJ was satisfied that such a contract existed and found for the plaintiff on that basis, without considering the estoppel and constructive trust arguments. In doing so, at [27]–[28], his Honour quoted with apparent approval the comments of Brereton J as expressed in Goyal at [23] and [26], which are both extracted above.

83. The proposition that a joint tenant could be restrained from severing by virtue of an agreement or assumption that it would not be severed was also considered by White J in Burton v Prior [2015] NSWSC 295. While such an agreement or assumption was not supported by the evidence in that case, his Honour considered the proposition without any explicit disapproval before proceeding to, appropriately, distinguish Goyal – which was cited in support – on its facts.

84. Very recently, in Smith v Smith [2025] NSWSC 287, Meek J considered the same proposition, again without any hint of disapproval, in an application for urgent injunctive relief – which was ultimately granted – and stated at [12]:

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 is arguable that it is unconscionable for the second to act contrary to the expectation or assumption, and that equity may preclude the second party from severing the joint tenancy: see, for example, Goyal v Chandra (2006) 68 NSWLR 313; [2006] NSWSC 239 (Goyal v Chandra). It is unclear to me whether, in this case, the plaintiff contends that there is an actual agreement between the parties or her claims are, as intimated in Goyal v Chandra, supportable either by equitable estoppel or perhaps by the imposition of a constructive trust.

Terms of the agreement

85. Before the High Court’s judgment in Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39, the principles regarding inferences arising from express terms, as distinguished from implications giving rise to implied terms, of a contract were summarised in three Victorian Court of Appeal decisions, the first being Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190, by Santamaria, Kyrou and Ashley JJA at [176]–[179] (references omitted):

[176]   It has been observed that the line between inference and implication will not always be easy to draw. However, the distinction between the two processes is set out in Deane J’s judgment in Hawkins v Clayton. After concluding that a contract existed between a testatrix and her solicitors in relation to the preparation, execution and safe custody of her will, Deane J considered what the terms of that contract were. He observed that the contractual terms upon which the will remained in the safe custody of the solicitors were left “largely unarticulated by the parties”. In those circumstances, he identified two “stages”, which he said may well overlap, for the ascertainment of the relevant terms. The first stage was described as “essentially one of inference of actual intention”, and entailed an inquiry as to “what, if any, are the terms which can properly be inferred from all the circumstances as having been included in the contract as a matter of actual intention of the parties”. The second stage was described as “one of imputation” and entailed an inquiry as to “what, if any, are the terms which are, in all the circumstances, implied in the contract as a matter of presumed or imputed intention”.

[177]   In Byrne v Australian Airlines Ltd, Brennan CJ, Dawson and Toohey JJ drew a similar distinction between the inference of contractual terms and their implication in circumstances where there was no formal contract between the parties. They relevantly stated:

In those cases the actual terms of the contract must first be inferred before any question of implication arises. That is to say, it is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention.

[178]   McHugh and Gummow J similarly stated that, where a contract was not in writing and was oral or partly oral, or it appeared that the parties had not reduced their agreement to a complete written form, courts should exercise caution and avoid an automatic or rigid application of the conditions in the BP Test. They then relevantly stated:

In such situations, the first task is to consider the evidence and find the relevant express terms. Some terms may be inferred from the evidence of a course of dealing between the parties. It may be apparent that the parties have not spelled out all the terms of their contract, but have left some or most of them to be inferred or implied.

[179]   Similarly, in Breen v Williams, Dawson and Toohey JJ stated that where there was no formal agreement, the actual terms of the contract would have to be inferred before any question of implication could arise.

86. Those principles were applied in Uren v Uren [2018] VSCA 141, by the same judges comprising the bench in Grocon (Santamaria, Kyrou and Ashley JJA) at [61]–[62].

87. Further guidance on the process involved in inferring an express term of a contract was provided in Regreen Asset Holdings v Castricum Brothers [2015] VSCA 286, in which Warren CJ, Kyrou and McLeish JJA said at [74]:

As the process of inferring a term of a contract is informed by the parties’ communications and course of dealing, evidence of their pre-contractual conduct is admissible on the question of whether a particular term is to be inferred. On the other hand, the admissibility of evidence of pre-contractual conduct for the purpose of establishing that a term should be implied into a contract is more complicated.

88. In Realestate.com.au, different remarks were made by members of the High Court on the notion of there being “inferred terms” of a contract.

89. Kiefel CJ and Gageler J at [15]–[25] set out the process by which the terms of a contract are ascertained and the role of inferences and implications (referring to the approaches of Deane J in Hawkinsv Clayton (1988) 164 CLR 539; [1988] HCA 15 and Dawson and Toohey JJ in Breen v Williams(1996) 186 CLR 71; [1996] HCA 57), emphasising at [15] that:

In a case such as this where the terms of an agreement between the parties have not been articulated, those terms must be ascertained by reference to the parties’ words and conduct. The words and conduct of each party must be understood by reference to what the words and conduct would have led a reasonable person in the position of the other party to believe. The ultimate question is what reasonable people with knowledge of the background circumstances then known to both parties would be taken by their words and conduct to have agreed.

90. In reference to the approach taken by Deane J in Hawkins, Kiefel CJ and Gageler J then stated at [22] (references omitted):

The approach taken by Deane J should not distract attention from the full enquiry as to the rights and liabilities of the parties, which in the first place has regard to their words and conduct — here their conduct in particular — taking account of all the circumstances in which they took place. In focusing attention on the distinction between an inference and an implication his Honour should not be understood to be limiting that enquiry. His Honour himself said that it was necessary to have regard to the “circumstances disclosed by the evidence”.

91. In a separate judgment delivered in Realestate.com.au, Gordon J considered that while the rights and liabilities of the parties to a contract are determined objectively, there is a difference in approach between a formal written document comprising the contract and an informal contract (at [43]–[45]). At [45]–[47], Gordon J identified the relevant approach when a court is confronted with an informal contract, as follows (references omitted):

[45]   The first task is to consider the evidence and to find the relevant terms of the contract. Ascertaining the terms is a question of fact. The issue is not one of interpretation, because there are no definitive words to interpret; “we are here concerned not with construing a contract but with evidence as to what the terms of a contract were”…

[46]   … In making factual findings of a term or terms of such a contract, the evidence of witnesses as to words written or spoken by the parties (and their knowledge of relevant matters at the time of the contract) must be weighed alongside the objective surrounding facts (which are undisputed or which are established by other objective evidence) and also with the apparent logic of events. It may be difficult in this process to distinguish between terms of the contract based solely or centrally upon words used by the parties and those based only in part on those words but also upon surrounding facts and the logic of events.

[47]   The task is to ascertain what the words and conduct of the parties would have conveyed in all the circumstances to a reasonable person who had the knowledge reasonably available to the parties. The essential question is whether the parties’ conduct — what was said and not said and the evident commercial aims and expectations of the parties in the context of what they knew — reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent to be legally bound in some particular respect.

92. Gordon J said that the judgment of Deane J in Hawkins is to be approached with caution because it was decided before the “ascendancy of the objective theory of contract” (at [50]). Gordon J rejected rigid classifications of “express”, “inferred”, or “implied” terms stating that “whether the description “inferred” or “implied” is correct depends entirely on what “inferred” or “implied” is intended to convey” (at [73]).

93. In their joint judgment in Realestate.com.au, Edelman and Steward JJ also emphasised the objective theory of contract and proceeded to identify “two very basic errors”, stating at [83] (references omitted):

It is fundamental to the objective theory of contract, which is “in command of the field” of contract law, that a contract cannot exist without communication. The subjective views of the parties are irrelevant: “having it in your own mind is nothing”. The terms of a contract — express or implied — therefore arise from the communication between the parties, understood in context, including by drawing inferences to identify the implied content of communication. Although the distinction between express and implied terms can be fine, it has long been accepted that there is a particular test to be applied for the recognition of an implied term. The distinction cannot be ignored. Once these matters are appreciated, two very basic errors are exposed.

94. The first error identified by Edelman and Steward JJ is that there is no third category of contract terms known as an “inferred term”, stating that a contract term is either expressly stated or implied through conduct and surrounding circumstances (at [84]). Edelman and Steward JJ said that the process of inference is important in determining the existence of express and implied terms, and the process of drawing inferences identifies express terms or the content of an implication (at [85]).

95. The second error according to Edelman and Steward JJ is that “[i]t is not analytically right” to say that there is a separate category of informal contracts; that is, contracts that are not entirely evidenced in a written form are not governed by different rules (at [86]).

96. Drawing all these variations of expression of principle together, the common elements in the separate judgments in Realestate.com.au are that what the parties are taken to have agreed is to be objectively discerned by analysing their words and conduct in all the circumstances in which they occurred and deciding what a reasonable person would take them to mean. In doing so, inferences may be drawn as part of those circumstances.

Consideration

97. It is trite law that – other than a promise formalised and executed by way of deed – a promise will lack contractual force unless it is supported by consideration. Consideration is, after all, an “essential requirement” of contract formation: Beaton v McDivitt (1987) 13 NSWLR 162, Kirby P at 168.

98. Consideration is the price paid in return for the promisor’s promise; it is the price for which that promise is bought. This was expressed with simplicity by Dunedin LJ in Dunlop Pneumatic TyreCo Ltd v Selfridge & Co Ltd [1915] AC 847, at 855, where his Lordship, quoting Sir Frederik Pollock, Pollock on Contracts, 8^th ed, 175, referred to consideration as the:

Act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.

99. To constitute good consideration, the promisee must either incur some detriment or obligation, or confer some benefit, generally upon the promisor: Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 459; [1954] HCA 20, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ, quoting Shadwell v Shadwell (1860) 9 CB (NS) 159; 142 ER 62, Erle CJ and Keating J at 68.

100. The law does not inquire into the adequacy of the consideration paid so as to bind the promisor; the oft-cited phrase is that “consideration must be sufficient but need not be adequate” and it is notorious that a peppercorn may suffice as good consideration if that is the price stipulated by the promisor in return for their promise: DPP (Vic) v Le (2007) 232 CLR 562; [2007] HCA 52, Kirby and Crennan JJ at [116], citing Carter and Harland, Contract Law in Australia, 4th ed (2002), 112 [323]. See Evans v Davantage Group Pty Ltd (2019) 291 FCR 663; [2019] FCA 884, where Beach J at [68] refers to the “pithy peppercorn principle” and quotes Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87, Somervell LJ at 114. See also Woolworths Ltd v Kelly (1991) 22 NSWLR 189, where the rationale for the law’s refrain in this regard was considered by Kirby P at 193–4.

99. It is beyond argument that such a price may take “the form of an act, forbearance or promise”: Beaton, Kirby P at 168; Australian Woollen Mills, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ at 456–7, 461; Woolworths, Kirby P at 193–4, Samuels JA at 206, Mahoney JA at 221–22.

100. It follows that consideration for a promise may very well be given in the form of “promises made by the opposite party” or parties, as the case may be: Chief Commissioner of State Revenue v Dick Smith Electronic Holdings Pty Ltd (2005) 221 CLR 496; [2005] HCA 3, Gummow, Kirby and Hayne JJ at [79], citing Chitty on Contracts, 29^th ed (2004), 217 [3-004].

101. It is wholly uncontroversial that mutual promises can constitute sufficient consideration: Perry v Anthony [2016] NSWCA 56, Beazley P, Gleeson JA and Emmett AJA at [26], citing Dunlop Pneumatic Tyre Co, Dunedin LJ at 855.

102. Finally, between the promise and the price paid for it, there must subsist “the relation of a quid pro quo”. That is, the consideration must be given in response to, and in exchange for, the promise: Australian Woollen Mills, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ at 456–57. From this, two propositions arise:

1. past or precedent consideration is generally insufficient to support a subsequent promise: Cohen v Cohen (1929) 42 CLR 91, Dixon J at 96; [1929] HCA 15; Roscorla v Thomas (1842) 3 QB 234, Denman LCJ at 236–7; and

2. a promise to do no more than what one is legally bound to do – or to simply “perform an existing legal duty” owed by the promisor to the promisee – may be unenforceable for want of consideration: Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723, Santow J 738–39, citing Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1, Glidewell LJ at 11, and Stilk v Myrick (1809) 2 Camp 317; 170 ER 1168, Ellenborough LCJ at 318–19. As stated in Wigan v Edwards (1973) 47 ALJR 586, by Mason J at 594 (cited in Musumeci at 738-9), the principle is expressed in this way:

… The general rule is that a promise to perform an existing duty is no consideration, at least when the promise is made by a party to a pre-existing contract, when it is made to the promisee under that contract, and it is to do no more than the promisor is bound to do under that contract. The rule expresses the concept that the new promise, indistinguishable from the old, is an illusory consideration. And it gives no comfort to a party who by merely threatening a breach of contract seeks to secure an additional contractual benefit from the other party on the footing that the first party’s new promise of performance will provide sufficient consideration for that benefit.

SUBMISSIONS

Submissions of Christopher and Diana

105. Christopher and Diana submit that they entered into a binding contract with Michael not to sever their joint tenancy in the Roselands property absent the agreement of all joint tenants. They seek an injunction to prevent Michael from further acting to sever the joint tenancy, giving proper effect to the agreement between the parties.

106. Christopher and Diana rely on the principles considered in Goyal and applied in James as providing the basis on which one joint tenant can be restrained from acting to sever a joint tenancy when they have entered into an agreement not to do so. Christopher and Diana expressly eschewed relying on any estoppel or unconscionability as the basis for their claim (T16).

107. Christopher and Diana say that the agreement formed between them and Michael was made orally through a series of conversations they had in advance of the settlement of the Roselands property. They advance the case that the consideration for the agreement lies in the exchange of promises between them, citing the reliance on Sir Frederik Pollock as quoted by Dunedin LJ in Dunlop Pneumatic Tyre Co that such an exchange can be good consideration, as well as the contribution of Diana to the purchase price of the Roselands property.

108. In essence, Christopher and Diana contend that Michael’s generally unrestricted common law right to deal with his interest in the Roselands property – specifically, to effect a severance of the joint tenancy – is restricted pursuant to an enforceable contract between them.

109. The effect of the relief sought is that, assuming Michael predeceases them, absent Christopher and Diana’s consent to the severance or some other curial intervention, Michael’s interest in the Roselands property will be extinguished upon his death. His interest in the Roselands property will not pass to the benefit of his estate, and the interests of Christopher and Diana in the Roselands property will be correspondingly enlarged.

110. In summary, Christopher and Diana submit that, although nobody ever said in clear terms that “we will never sever the joint tenancy”, they mutually agreed with Michael that the Roselands property should “remain in the family” and they would all take the property as joint tenants on that basis to “protect” and “secure” the asset for the benefit of Michael’s children. Christopher and Diana say that it must necessarily be inferred in that agreement that any severance of the joint tenancy would subvert that purpose and therefore they were all bound not to sever the joint tenancy.

Submissions of Michael

111. Michael submits that there is no evidence that Christopher, Diana and he agreed that none of them could sever the joint tenancy in the Roselands property absent the agreement of the others and certainly no agreement not to sever arose in or about March 2020 (as stated in the summons), prior to the parties entering into any contract to purchase the Roselands property on 16 April 2020. Michael also submits that there was no discussion or agreement after the exchange but prior to settlement of the Roselands property on 20 May 2020. Michael says that in any event it was too late by that time for such an agreement because the parties had already contracted to purchase the Roselands property and so any such agreement would be unsupported by consideration.

112. Michael says that it was not until 19 and 20 May 2020 that Christopher, Diana and he agreed to purchase the Roselands property as joint tenants, being on the eve or day of settlement, and that they had all already signed as purchasers without any such agreement.

113. Michael argues that there is no evidence that Christopher or Diana discussed with Michael not severing the joint tenancy or that any promise not to do so was given by Michael to them or by them to Michael. Michael submits that whatever might have been the uncommunicated intention and understanding of Christopher and Diana arising from the Roselands property being purchased under a joint tenancy, their case fails to distinguish between an agreement to purchase the Roselands property as joint tenants (which existed and was performed) and a further and separate agreement by those joint tenants not to sever the joint tenancy. Michael submits that the former agreement does not encapsulate the latter and to the contrary, it was an inherent feature of acquiring the Roselands property as joint tenants that each tenant would possess, as a result of that transaction, an unfettered right to bring the joint tenancy to an end at any time. Michael says that if the exercise of the right to bring the joint tenancy to an end at any time was to be constrained, a separate agreement needed to be entered into and supported by consideration, which does not exist.

114. Michael argues that there was no consideration given by either of Christopher or Diana in support of any purported, but unevidenced, promise by Michael not to sever the joint tenancy. Michael submits that the contribution paid of $60,000 each by Christopher and Diana towards the purchase price of the Roselands property was the consideration for the acquisition of the interest they received, not with respect to an agreement not to sever the joint tenancy. Michael emphasises that the agreement concerning the joint tenancy arrangement arose after the parties had signed the contract of sale pursuant to which they had promised to pay, and were liable to pay, the purchase price of $1,105,000. Michael says that in those circumstances Christopher and Diana were performing their existing obligation to pay the purchase price which could not be good consideration for the further purported but un-evidenced promise by Michael not to sever the joint tenancy, citing Stilk; Musumeci, Santow J at 738; and Young v Smith [2015] NSWSC 400, Sackar J at [43].

115. Michael characterises statements made by him such as “I want to make sure my assets and money goes to [my children]”, “[t]his is to protect the assets we obtained and to keep these for my kids” and “[m]y assets will be going to my kids” as only statements of intention to which he was not contractually bound because there was no consideration. Michael says that he was free to revoke his intention at any time as circumstances changed, in the same way he might revoke a will made by him.

116. Finally, Michael says there is no evidence that either Christopher or Diana promised to Michael not to sever the joint tenancy as the consideration for any purported promise from Michael not to do the same.

Submissions in reply of Christopher and Diana

117. Christopher and Diana submit that if the parties had in mind the particular outcome of keeping the Roselands property in their family and if Michael’s “promises” are instead to be characterised as unenforceable statements of intention then the entry into the joint tenancy did not achieve that outcome. They say that it is only the entry into the joint tenancy and the requirement of its maintenance that achieves that outcome.

CONSIDERATION

118. The two essential issues in these proceedings are whether Christopher, Diana and Michael entered into an agreement not to sever the joint tenancy in the Roselands property and whether such an agreement was supported by good consideration.

119. I commence my consideration of those issues for determination by emphasising that none of Christopher, Diana or Michael are lawyers. It is abundantly clear that during the course of all of their numerous communications they did not have more than a rudimentary understanding of the difference between holding property interests as joint tenants or as tenants-in-common until shortly before settlement of the Roselands property on 20 May 2020. Throughout the relevant events, they clearly had little to no idea of how the archaic features of joint tenancy operated until this was explained to them by Mr Sedrak on 18 and 19 May 2020.

120. It is accepted by all of them that at no stage was there an express agreement in precisely communicated terms that none of them could sever the joint tenancy. But that does not end the analysis because what is put by Christopher and Diana is that it can be inferred amongst the matters which were expressly agreed with Michael that none of them could sever the joint tenancy.

Was there an agreement not to sever the joint tenancy?

121. As set out above, there was no written agreement preventing any party from unilaterally severing the tenancy without the consent of the other parties. Applying the common approach of the different judgments in Realestate.com.au, it is necessary for me to objectively decide what Christopher, Diana and Michael agreed by analysing their words and conduct in all the circumstances in which they occurred and deciding what a reasonable person would take them to mean, drawing inferences as part of those circumstances.

122. The progression of the essential chronology of the unchallenged communications and conduct between the parties can be summarised in the following way:

1. In late 2019 and early 2020 respectively, Michael told each of Christopher and Diana of his intention to remarry, sell the Culburra Beach property and the Cambridge Gardens property, and buy a new property.

2. In January 2020, in response to concerns expressed by Louie and Diana that Michael’s assets might not pass to his children should he remarry, Michael told them that he would “protect them” when he got married, make sure that his “assets and money goes to them” and put something in place with the assistance of a lawyer to “protect the house” he was going to buy so it is “left to [his] children”. In these conversations, Diana repeatedly expressed her desire that Michael take steps to create that protection, asking Michael what steps he was taking and saying that it was “important”.

3. In March 2020, Christopher and Diana were both involved in helping Michael to find a new property, including by inspecting the Roselands property. During this process, Michael said to them that he might need their involvement in view of his budget, which I have inferred was a request for Christopher and Diana to contribute financially to the purchase price.

4. In March 2020, Michael then agreed to have a meeting with Christopher and Diana to discuss how to protect the new property from any claims from Michael’s proposed new wife, Rania. At that meeting, Christopher suggested that they all go to see a lawyer, the purpose of which Michael agreed was to “protect the assets [he and Joumana] obtained and to keep these for my kids”. Christopher emphasised in these conversations that they “make sure we are all on the same page”, being the protection of the property to ensure that it stays within their family.

5. In April 2020, Michael said to Christopher and Diana that he wanted them to buy the new property together and that he wanted “your names on the title to the house because this is to be yours when I die”. In response, Christopher said that they should all sign the contract and get advice from the lawyer about whether they should be joint tenants or tenants-in-common and Diana said that they wanted to pay something for the house.

6. On 16 April 2020, the exchange of the contract of sale for the Roselands property took place.

7. Most likely on 18 May 2020, Mr Sedrak gave oral legal advice to Christopher, Diana and Michael that they could purchase the Roselands property as joint tenants so it would remain “in the ownership of their family by survivorship”.

8. Before the settlement of the Roselands property, in a conversation between Christopher, Diana and Michael, Michael agreed with Christopher’s suggestion that the Roselands property should be acquired as joint tenants and stated that “my assets will be going to my kids”. In light of this, Diana said that she would contribute $60,000 towards the purchase price. Both Christopher and Diana then each paid $60,000 towards the purchase price.

9. On 19 May 2020, Mr Sedrak then gave written advice by email to Christopher, Diana and Michael – apparently confirming oral advice given the day prior – on the essential features of joint tenancy and tenants-in-common, in response to which they all agreed to proceed with the settlement of the Roselands property on the basis that they would be joint tenants. In conversation after the advice, Michael agreed with Christopher’s statement that they should purchase the Roselands property “as joint tenants so it comes to the kids when you die”.

10. On 20 May 2020, the settlement of the purchase of the Roselands property occurred with Christopher, Diana and Michael becoming the registered proprietors as joint tenants.

123. Objectively assessed, this series of oral and written communications and the conduct between Christopher, Diana and Michael leading up to the settlement of the purchase of the Roselands property indicate that they shared an intention to become registered proprietors as joints tenants for the explicit purpose of ensuring the Roselands property would “remain in the family” by way of survivorship and be protected from Michael’s proposed new wife Rania obtaining any ownership interest. The reference to “family” was obviously to Michael and his children given Michael’s repeated reference to protecting his assets for “my kids”.

124. The evident reason for all of Christopher, Diana and Michael in seeking legal advice was to understand how best to structure the property ownership in order to meet that purpose of keeping the Roselands property within their family. The parties’ inquiry into the differences between tenants-in-common and joint tenants and their subsequent decision to purchase the property as joint tenants, demonstrates a clear and mutual understanding that the Roselands property was intended to stay in the family. They acted on the understanding that entering a joint tenancy was the legal means by which the Roselands property would remain within the family and be protected against any claim by Rania. This mutual agreement and the actions taken to implement it demonstrate that the parties entered into a binding arrangement based on their shared intent.

125. In can be inferred that this express purpose could only be fulfilled by the agreement that none of the parties would be able unilaterally to sever their joint tenancy in the Roselands property. This was fundamental to achieving the intended outcome of keeping the Roselands property within the family. This agreement to maintain the joint tenancy was crucial to ensuring that the Roselands property would pass to Michael’s children through survivorship, as intended by the parties.

126. Michael’s expression of wanting to keep his assets “for my kids” goes beyond a mere expression of future intention by him because it is made in the context of Christopher, Diana and Michael all then agreeing to enter into a transaction of acquiring the Roselands property to which they all made financial contributions. This factual context is very important in the present case because it emphasises that Michael’s statements were said with the intention on the part of all of the parties to create legal relations between them.

127. Additionally, while Richard is not a party to these proceedings, the discussions between Christopher, Diana and Michael concerning how Richard would eventually receive his “fair” share in the Roselands property are telling in several respects as to the terms of their agreement and their intention to be bound by it.

128. Bearing in mind that the ultimate question in cases of this kind is what reasonable people with knowledge of the background circumstances then known to the parties would be taken by their words and conduct to have agreed, the overwhelming conclusion is that each of Christopher, Diana and Michael understood this would be the last time that Michael would be free to alienate or devise his interest in the Roselands property.

129. It appears that Richard was not included in this arrangement as he was going through a divorce and there were concerns that his former spouse may make a claim over the Roselands property. In these circumstances, each of Christopher, Diana and Michael understood and agreed that upon Michael’s death, it would be a matter for Christopher and Diana to ensure that Richard received his “fair” share in the property, less Christopher and Diana’s respective contributions to the purchase price. This demonstrates an understanding by each of Christopher, Diana and Michael – not only of their decision to take the property as joint tenants and the right of survivorship that would be enjoyed by each of them – but also that the ultimate consequence of their agreement was that they could not sever the joint tenancy.

130. Based on the objectively assessed conduct and statements of the parties, I conclude that an agreement existed as at 20 May 2020 between Christopher, Diana and Michael, under which they all agreed not to sever the joint tenancy. This agreement not to sever the joint tenancy was integral to the fulfillment of the parties’ shared purpose. Without that agreement, the shared purpose could not be achieved.

131. Although Christopher and Diana asserted in the form of declaration sought in the summons that the agreement was made in about March 2020, it is clear to me that the agreement was not finally formed until just before the settlement of the Roselands property on 20 May 2020, when they all agreed that they should hold their interests in the Roselands property as joint tenants.

Was there good consideration for the agreement not to sever the joint tenancy?

132. Applying the principles in Dunlop Pneumatic Tyre Co, the agreement not to sever the joint tenancy is supported by the mutual exchange of promises, which constitutes good consideration. As outlined above, the reciprocal obligations are evident from the parties’ shared intention to preserve the joint tenancy and ensure the Roselands property remained within their family.

133. To ensure that the express purpose was met, it can be inferred that Michael’s promise was that he would not sever his aliquot share of the joint tenancy. This commitment was made to ensure that the Roselands property would remain within the family and pass to his children by way of survivorship. In exchange, it can also be inferred that Christopher and Diana promised not to sever their respective aliquot shares of the joint tenancy, thereby preserving the ownership structure necessary to fulfill the shared intention of all parties. This reciprocal exchange of promises forms the primary consideration for the agreement.

134. This mutual exchange of promises created reciprocal obligations, reflecting a sufficient “quid pro quo” of the sort described in Australian Woollen Mills. Michael benefits from Christopher and Diana’s commitment to maintain the joint tenancy as it ensures that his children will inherit the Roselands property by way of survivorship. In return, Christopher and Diana benefit from the security provided by the joint tenancy, which ensures their continued ownership of the Roselands property and the benefits that flow from that ownership.

135. Each party also incurs a detriment by mutually forgoing the exercise of certain rights. Specifically, by agreeing not to sever their aliquot shares, each party sacrifices the ability to dispose of their interest in the Roselands property without the consent of the other joint tenants. This mutual forbearance represents a limitation of each party’s right that they would otherwise have. This mutual forbearance ensures that the Roselands property will pass according to the right of survivorship, in keeping with the parties’ shared objective.

136. An exchange of mutual promises is distinguishable from a unilateral promise with future intent, which lacks reciprocal obligations and could allow one party to unilaterally sever the joint tenancy without the consent of the other parties. In contrast, the promises made by each party to maintain the joint tenancy and keep the Roselands property within the family resulted in binding obligations, supported by valid consideration. The agreement formed a legally enforceable contract, ensuring that the joint tenancy would not be severed.

137. Each party gave further consideration for the agreement not to sever the joint tenancy through each joint tenant’s financial contribution to the purchase price, being $60,000 each for Christopher and Diana, with the balance from Michael. These contributions were made in accordance with the agreement to maintain the joint tenancy and were important in their decision to enter the contract of sale. The financial contributions are therefore further consideration, reinforcing the binding agreement to maintain the joint tenancy as intended.

138. It is important to distinguish between the agreement not to sever the joint tenancy and the formal contract of sale of the Roselands property. The agreement not to sever the joint tenancy was a binding commitment with enforceable obligations regarding the ownership structure for the Roselands property. This agreement not only outlined the parties’ mutual intention to maintain the joint tenancy but also limited their ability to sever the tenancy without unanimous consent. This mutual understanding was separate from the contractual obligation created by the contract of sale, which only addressed the acquisition of the Roselands property. While the contract of sale formalised the transaction and the parties’ intent to hold the Roselands property as joint tenants, the agreement not to sever the joint tenancy constituted a distinct promise supported by its own consideration. The financial contributions to the purchase price by each of Christopher, Diana and Michael further solidified the commitment to uphold the joint tenancy, as they were made with the mutual understanding that the joint tenancy would not be severed. Therefore, the agreement not to sever the joint tenancy, in combination with the financial contributions, provided sufficient and independent consideration.

139. In closing, I consider that Michael’s reliance on the principle that a promise to perform an existing legal duty is not good consideration does not apply in the facts of this case.

140. As is made clear in Wigan, the existing duty of the promisors (Christopher and Diana) must be to the promisee (Michael). The existing duty of Christopher and Diana to pay the purchase price under the contract of sale was owed to the vendors of the Roseland property, not to Michael.

Conclusion

141. Given that on 3 December 2024, Michael took the step of seeking to sever the joint tenancy of the Roselands property by lodging the Transfer Severing Joint Tenancy with the Registrar-General, which he contractually obliged himself not to do, it is appropriate that an injunction be granted that prevents him from taking any further step in that process. It is also appropriate to issue an injunction to the Registrar-General that prevents it from registering the Transfer Severing Joint Tenancy.

142. In light of the fact that Michael has been unsuccessful in the proceedings, he should also pay the costs of Christopher and Diana, as well as those of the Registrar-General.

ORDERS

143. For the reasons set out above, I propose to make the following orders:

1. Declaration that the first defendant, the first plaintiff and the second plaintiff (Parties) entered into an agreement in or about May 2020 that the Parties would purchase the property bearing Land Title Reference X/XXX and known as X Martin Street, Roselands, New South Wales (Property) as joint tenants and would not sever the joint tenancy without agreement of all Parties.

2. Order that the first defendant be restrained from proceeding with, or making, any application to sever the joint tenancy in relation to the Property.

3. Order that the second defendant be restrained from:

1. doing anything, or taking any steps, which has, or may have, the effect of severing the joint tenancy in respect of the Property; and

2. registering Transfer Severing Joint Tenancy AU654699.

4. The first defendant is to pay the costs of the first plaintiff, the second plaintiff and the second defendant of the proceedings.

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Decision last updated: 12 May 2025