Goyal v Chandra

[2006] NSWSC 239

Reported Decision: 68 NSWLR 313

New South Wales

Supreme Court

CITATION:	Goyal v Chandra & Anor [2006] NSWSC 239
HEARING DATE(S):	1 March 2006, 3 March 2006
JUDGMENT DATE :	3 March 2006
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	03/03/2006
DECISION:	Paragraphs [50] - [52]
CATCHWORDS:	CONVEYANCING – Land Titles under Torrens System – Joint Tenancy and Tenancy-in-Common – Severance – Agreement not to sever joint tenancy – whether void as restraint on alienation – effect on transfer of one joint tenant’s interest to self as tenant-in-common – held that such transfer does not sever equitable joint tenancy where there is obligation not to sever. FAMILY LAW – Family Law Act 1975 – Property – interlocutory application to restrain severance of joint tenancy – inutility of injunction given ability of survivor and estate to continue adjustive property proceedings after death under s 79(8).
LEGISLATION CITED:	Conveyancing Act 1919 (NSW), s 66G Family Law Act 1975 (Cth), ss 4(1), 75(2), 78, 79 Property Law Act 1974 (QLD), s 38 Real Property Act 1900 (NSW), ss 97(1), 12A(3)
CASES CITED:	Anderson v O'Donnell (2000) 10 BPR 18,501; [2000] NSWSC 895 Baumgartner v Baumgartner (1987) 164 CLR 137 Birmingham v Renfrew (1937) 57 CLR 666 Costello v McGufficke (1987 NSWSC Cohen J unreported, BC8701270) Dillwyn v Llewelyn (1862) 4 De GF & J 517; [1861-73] All ER Rep 384; (1862) 45 ER 1285 Freed v Taffel [1984] 2 NSWLR 322 Ngatoa v Ford (1990) 19 NSWLR 72 Olliver v Olliver (1978) 4 Fam LR 360 Parry v Sullivan (1979) 9 RFL (2d) 349 Ramsden v Dyson (1866) LR1HL 129; (1866) 12 Jur NS 506; (1866) 14 WR 926 Re Buchanan-Wollaston's Conveyance; Curtis v Buchanan-Wollaston [1939] Ch 738 Re Permanent Trustee Nominees (Canberra) Ltd v Coral Sea Resort Motel Pty Ltd [1989] 1 QdR 314 Schaefer v Schuhmann [1972] AC 572 Scott v Briggs (1991) 14 Fam LR 661 Williams v Hensman (1861) 70 ER 862 Williams v Legg (1993) 29 NSWLR 687 Young v Lalic [2006] NSWSC 18
PARTIES:	Satish Kumar Goyal (P) Malti Chandra (D1) Warwick Watkins in his capacity as Registrar-General of the Department of Lands (D2)
FILE NUMBER(S):	SC 01671/06
COUNSEL:	AP Lo Surdo (P) Ms K Day (P) J Armfield (D)
SOLICITORS:	Peter Kemp Solicitors (P) LD Ryan, Solicitor for the Registrar-General (D1 & D2)

- 20 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

BRERETON J

Friday 3 March 2006

1671/06 Satish Kumar Goyal v Malti Chandra & Anor

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiff Satish Kumar Goyal (to whom I shall refer as Dr Goyal), and the first defendant Malti Chandra (to whom I shall refer as Dr Chandra), are husband and wife, and are the registered proprietors as joint tenants of the property situate at and known as 158 Georges River Road, Kentlyn in the State of New South Wales, being the land comprised in Folio Identifier 2/508648. Until December 2005, Dr Goyal and Dr Chandra occupied the Kentlyn property as their matrimonial home. Dr Chandra left the property in December 2005, and Dr Goyal continues to reside there. On 9 February 2006, Dr Chandra executed a transfer of her interest in the property to herself, pursuant to Real Property Act 1900 (NSW), s 97(1), the effect of which upon registration would be to sever the joint tenancy and convert it into a tenancy in common in equal shares. As required by Real Property Act, s 97 the Registrar General served on the other joint tenant, Dr Goyal, notice pursuant to Real Property Act, s 12A(3), of his intention to register that transfer. Dr Goyal has applied to the Court for an order restraining the registration of that transfer. The case is given acute and tragic urgency by the circumstance that Dr Chandra is in hospital, apparently terminally ill, and, so I am informed, liable to die at any moment.

2 The background to the application may be summarised as follows. Dr Goyal first acquired the Kentlyn property in 1987, when he paid for the land in cash. At about the same time, he borrowed money from the State Bank of New South Wales, which he applied to build a house on the property. He lived there with his then wife, not Dr Chandra, until they separated in or about 1995 or 1996, when he borrowed $400,000 on the security of the property to pay his first wife by way of property settlement consequent upon their separation and divorce.

3 In June 1999, Dr Goyal and Dr Chandra were married. In August of that year, they decided to undertake renovations to the Kentlyn property. They joined in contributing funds of each of them to the costs of those renovations: Dr Goyal to the extent of about $50,000, and Dr Chandra between $75,000 and $100,000. Thereafter they cohabitated in the property.

4 It was a couple of years later, in 2001, that the property came to be transferred to Dr Goyal and Dr Chandra as joint tenants. In May 2001, Dr Chandra obtained some advice from a solicitor, Mr Mullally, and suggested to Dr Goyal that the property be transferred into their joint names as husband and wife. Dr Goyal then also sought some advice from the same solicitor, when they attended together on Mr Mullally and obtained advice as to the consequences of the property being held in joint tenancy. Further advice was obtained about refinancing the existing loan on the property.

5 It will be necessary to return in a little more detail to the advice that was received from Mr Mullally, but Dr Goyal says that he transferred the property into joint tenancy on an understanding, which he believed he shared with Dr Chandra, that the result would be that the joint tenancy would come to an end only on the death of either of them, and in that event the other would succeed to the property by survivorship. The existing loan was duly refinanced by individual loans to each of Dr Goyal and Dr Chandra of $175,000 each, for which each was to be separately responsible, but with each guaranteeing to the bank the other's debt. It was also mutually understood, so Dr Goyal says, that each would separately meet their respective obligations to the bank in respect of their two separate loans.

6 Dr Goyal repaid his loan to the bank in 2001. In early 2002, Dr Chandra was diagnosed with cancer of the breast. By December 2003, Dr Chandra was apparently seeking to have Dr Goyal assume the repayments of her loan, and in the course of conversation on that topic, according to Dr Goyal, made a statement to the effect that the house would be Dr Goyal's after her death. From January 2004, Dr Chandra did not make repayments in respect of her loan, which went into default, and the mortgagee bank made a demand on Dr Goyal as guarantor. Dr Goyal - he says, in order to save his home - has since met Dr Chandra's obligations to the bank.

7 The matrimonial relationship deteriorated from January 2004, culminating with Dr Chandra leaving the home, as I have said, in early December 2005. On 9 February 2006, Dr Chandra executed a transfer pursuant to Real Property Act, s 97(1), which was then lodged with the Registrar General for registration. As he was required to do by s 97, the Registrar General on 16 February 2006 notified Dr Goyal of the proposed severance of the joint tenancy. The notice provides that if Dr Goyal has not lodged a court order stopping the Registrar General from registering the dealing severing the joint tenancy within 30 days from the date of the letter (namely by 18 March 2006), the Registrar General will register it, and the joint tenancy will then be severed.

8 On 1 March 2006, Dr Goyal obtained leave to file a summons and notice of motion claiming a declaration that Dr Chandra holds her interest in the Kentlyn property upon constructive trust for Dr Goyal, an order that she transfer to him all her right, title and interest in the property, and consequential relief. By notice of motion filed by leave at the same time, he sought injunctions: (1) restraining Dr Chandra from taking any action to register the transfer, and (2) restraining the Registrar General from registering the transfer. It is on those paragraphs of the notice of motion that Dr Goyal moves today.

9 At the commencement of the hearing today, Dr Goyal obtained leave to file an amended summons for the purpose of making clear what had been expressed on the application for ex parte relief, namely, that the relief claimed in the summons was sought, not only pursuant to the general law but, so far as the declaration was concerned, pursuant to Family Law Act 1975 (Cth), s 78 and, so far as the order for transfer was concerned, also pursuant to s 79 of that Act.

10 I declined to grant ex parte relief on 1 March, in circumstances where it seemed to me then, as it still seems to me now, that the potential imminent death of Dr Chandra would have resulted in the ex parte order effectively finally determining the rights of the parties. Thus, had the order been granted and Dr Chandra died before the matter could be determined, it might well be that the transfer could not thereafter be registered, there never would be a severance of the joint tenancy, and her rights, if any, in that respect would have been completely defeated without any sort of hearing on the merits of her case at all.

11 On an application such as the present for what is, in effect, an interlocutory injunction, the question is whether there is a sufficiently serious question to be tried for final relief as to justify the grant of an interlocutory injunction, having regard to the balance of convenience. However, where on such an application a question of law arises, the prevailing view is that that question should be decided, unless the court considers that there are good reasons for not doing so - such as because there has been too little time to undertake research, or because the question of law might ultimately be affected by the facts. This case has given rise to what I have found to be a difficult question of law, but because the practical effect of the outcome might well be final in any event, I think I ought to try as best I can to determine it. I have been assisted in that regard by the helpful submissions of Mr Lo Surdo and Mr Armfield, who have appeared for the parties. I should note that the Registrar General this morning attended and filed an appearance submitting to such order as the Court might make save as to costs.

12 I turn first then to consider whether there is a serious question to be tried for final relief. In addressing this question it is important to appreciate that what the plaintiff has to establish is not simply an equitable interest in the land which might sustain an injunction restraining the defendant from alienating or encumbering her interest in the land. If all that were required were for the plaintiff to show that he had an equitable interest greater than fifty per cent, there would unquestionably be a serious question to be tried. The circumstance that the plaintiff owned the land outright before the transfer to the parties as joint tenants, and over and above that made contributions to some of the improvements, would plainly give rise to at least an arguable case that he had made disproportionately greater contributions to the property than the defendant, such as might result in the imposition of a constructive trust of the type described in cases such as Baumgartner v Baumgartner (1987) 164 CLR 137, although there would no doubt also be a question whether the presumption of advancement prevailed.

13 However, any such equitable interest of the plaintiff, even if it extended to 100% of the property, would not be defeated by a legal severance of the joint tenancy. The result would simply be that the parties, who had up to that point held as legal joint tenants for themselves beneficially as equitable tenants-in-common in shares proportionate to their contributions, would be converted into legal tenants-in-common for themselves as equitable tenants-in-common in shares proportionate to their contributions. Such a case would not be sufficient to justify an injunction restraining the severance of the joint tenancy. Thus, the plaintiff must go further, and establish some equitable obligation on the part of the first defendant to not sever the joint tenancy, or put in slightly different words, to deal with her interest as joint tenant in a particular way upon which the plaintiff is entitled to insist.

14 Ultimately, what this case is concerned with is, in substance, the first defendant's beneficial interest, whatever its quantum might be, in the property. If there is a joint tenancy, then upon the death of the first defendant her beneficial interest will pass to the plaintiff by survivorship. If there is not a joint tenancy, it will fall into her estate and pass under her will or on intestacy, as the case may be. It is for that reason that Mr Lo Surdo argues that not only would the Court find that there was a case, and a seriously arguable one, for the imposition of a Baumgartner trust, but also that the parties acquired and held the property with the common intention that they would hold it indefinitely as joint tenants, and not sever the joint tenancy, so that come what may the survivor would take. In other words, it is said that there was 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. Mr Lo Surdo contends that the first defendant took and held her interest in the property as a joint tenant subject to an equitable obligation that she would not sever the jointure but would leave it intact, so that if she were the first to die, the property would thereupon return to Dr Goyal absolutely.

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) 70 ER 862 (at 867) [emphasis added]:

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 .

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.

17 The first case which suggests that it is possible to impose such a constraint is Parry v Sullivan (1979) 9 RFL (2d) 349 a decision of the British Columbia Supreme Court. There, the plaintiff and the deceased had been married in 1966 and the matrimonial home was owned and occupied by the now deceased husband. Following marriage they lived in the home until he left in 1972. They entered into a separation agreement in 1973, which provided amongst other things that the husband would convey the matrimonial home formerly held by him alone to the plaintiff wife and himself as joint tenants. In December 1975 the husband severed the joint tenancy without the wife's knowledge, a matter which she did not discover until after the husband's death in 1977, whereupon she sought a declaration that she was the sole owner of the matrimonial home. McKinnon J found that there was no evidence suggesting that the parties really intended to have the property conveyed so as to create ownership as tenants-in-common, but some evidence, in addition to the agreement itself, from which it could be inferred that the parties intended that the ownership would be as joint tenants so as to create a right for the survivor.

18 McKinnon J further found that the inescapable inference was that the husband, then in poor health, was telling the wife that she was likely to have the benefit of the property arising by survivorship. It seems that the Court found that that amounted at least to an implicit contractual term in the separation agreement (at 352):

There is no doubt that the husband has the legal right to sever the joint tenancy and indeed he did exercise it when he executed the severance on 18 December 1975. Having the power to do so does not extend to him the right to commit a breach of his contract with the plaintiff. The separation agreement contained a specific covenant whereby the property was to be owned in joint tenancy and that covenant carries with it an implied term that the joint tenancy would continue until otherwise agreed by the parties.

19 In my view, the true explanation of the statement that while the husband had, and had exercised, the legal right to sever the joint tenancy he was not entitled to commit a breach of his contract with the wife in that the husband was entitled to sever the joint tenancy at law, but not in equity. In other words, while the legal joint tenancy might be severed so that they thereafter held as tenants-in-common at law, they remained, pursuant to the original underlying agreement, joint tenants in equity.

20 This is analogous to the consequences which equity imposes in the context of mutual wills. Equity recognises that a person who makes a will - even the survivor who dies taking the benefit of his or her partner’s corresponding will - remains free at law to revoke the will instrument made as part of the original mutual wills agreement, but though he or she can revoke that will, nonetheless, equitable obligations attach to the property which passes under it, so that rather than being held on the terms of the new will, that property is held on the terms of the original mutual wills. Those consequences are substantially equivalent to the consequences which McKinnon J afforded to the legal severance of a joint tenancy, when there was an underlying agreement which required preservation of the jointure: the legal right could be exercised, but it did not effect a severance of the equitable joint tenancy. This analysis is supported by the view that the relief granted was a declaration that the plaintiff was entitled to ownership of the matrimonial home; reflecting that the beneficial entitlements had not been affected by the legal severance.

21 Mr Armfield, to whose diligent researches in the short time available I am indebted for drawing my attention to these cases, also referred me to Anderson v O'Donnell (2000) 10 BPR 18,501; [2000] NSWSC 895, a judgment of Windeyer J. It will be necessary to return to this case when coming to the facts of the present case, but for present purposes what is significant is that his Honour entertained an argument that there was an agreement not to sever a joint tenancy without any suggestion that there could not be such an agreement. Although the support that it lends to the proposition that it is possible so to fetter a joint tenant’s ability to sever is faint, it is nonetheless some support, particularly when added to Parry v Sullivan.

22 Further support for that view can be derived from the line of cases which recognise that there are “defences” to applications for the appointment of trustees for sale under Conveyancing Act 1919 (NSW), s 66G. The authorities are assembled and analysed in Needham J’s masterly judgment in Ngatoa v Ford (1990) 19 NSWLR 72, which was adopted by the Court of Appeal in Williams v Legg (1993) 29 NSWLR 687, particularly at 691-692. Other intermediate appellate authority on this topic may be found in the Full Court of the Supreme Court of Queensland in Re Permanent Trustee Nominees (Canberra) Ltdv Coral Sea Resort Motel Pty Ltd [1989] 1 QdR 314, and in Re Buchanan-Wollaston's Conveyance; Curtis v Buchanan-Wollaston [1939] Ch 738. In Re Permanent Trustee Nominees (Canberra) Limited, it was held that an agreement between co-owners, that neither of them would, except after twelve months’ prior notice to the other, make an application under the equivalent of s 66G, was not void as amounting to a restraint on alienation. Kelly SPJ said that such a covenant did not come within the notion of a restraint on alienation as generally understood in the cases, "in that the property is still fully alienable and the covenant goes only to the procedure whereby this may be brought about under s 38 of the Property Law Act" 1974 (QLD).

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; [1861-73] All ER Rep 384; (1862) 45 ER 1285 and Ramsden v Dyson (1866) LR1HL 129; (1866) 12 Jur NS 506; (1866) 14 WR 926 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 (1987, NSWSC, Cohen J, unreported; BC8701270). 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 in Land Law, 5th ed [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.

30 It is then necessary to return to the facts. Unsurprisingly, in the present circumstances, the evidence is in short scope.

31 I have already referred to the disparate contributions which the parties had made to the property up to 2000, following which, in December 2000, Dr Chandra and her children (of her previous marriage) moved into the extended house. In about May 2001, Dr Chandra said to Dr Goyal that her solicitor, Mr Mullally, had suggested that she take over half the mortgage payments on the house, in exchange for a half interest, and reference was made to the possibilities of the parties holding either as joint tenants or as tenants-in-common. Dr Goyal responded that he did not understand the legal terms, and suggested that he see Mr Mullally with Dr Chandra, so that Mr Mullally could explain the difference between joint tenancy and tenancy-in-common.

32 Arrangements were then made for both parties to see Mr Mullally, which they did about two weeks later. He saw them together and, according to Dr Goyal, Mr Mullally said this:

Since this is your second marriage and you each have children from previous marriages, I suggest that a joint tenancy is the way to go. That way, whoever survives the other by 30 days gets the house automatically so that there is no fighting between the kids. The surviving spouse is then free to sell the house or deal with it as he or she pleases.

33 Dr Goyal says he responded that he was happy with that arrangement, but had a loan of $350,000 secured on the property. Mr Mullally said that part of the mortgage debt could be transferred to Dr Chandra, so that they would have the loan split $175,000 each, each guaranteeing the obligations of the other. According to Dr Goyal, he said that he was happy to proceed to transfer the property into joint tenancy on that basis, and Dr Chandra responded, " We can proceed then."

34 The parties then spoke to a bank manager and the loan was, apparently, split in the manner which had been proposed. In October 2001, Dr Goyal executed the transfer of the property into joint tenancy, he says on the understanding that he and Dr Chandra both intended that the joint tenancy would end only upon the death of either, and that neither would or could sever the joint tenancy by any unilateral action. Also, he says, he understood it to be their common intention that Dr Chandra would meet her obligations to the bank under the loan agreement to be executed by her.

35 A significant additional fact is that, following her diagnosis with breast cancer in about January 2002, Dr Chandra in December 2003 is alleged to have said to Dr Goyal, "After I die, this house is going to be yours, why don't you take over the loan and I will transfer the title to your name?". At that time, Dr Goyal did not act on that representation, but said that he would help with the payments, though Dr Chandra must pay her own loan. Nonetheless, when the bank did make a claim on him as guarantor, he paid all arrears outstanding by Dr Chandra to the bank, and has since continued to meet her obligations to the bank. It is not possible to find reliance in this, because Dr Goyal was bound by the guarantee which he had given to do no less than what he ultimately did in respect Dr Chandra's obligations to the bank. Nonetheless, the statement attributed to her, "After I die, this house is going to be yours" is an acknowledgement by her of the underlying assumption on which at least Dr Goyal acted at the time of the transfer of the property into joint tenancy, that the house would be his after Dr Chandra's death.

36 In Anderson v O’Donnell, the facts were that the parties, a daughter and her mother, attended on a law clerk to sign documents by which they took title as joint tenants. The clerk told both of them that they would be co-owners as joint tenants, and that that meant that each could not deal with her share without the other's consent and could not leave the unit to anyone else; the parties expressed assent to that arrangement. Windeyer J rejected the argument that there was an agreement, and said:

Accepting that the advice which I have described was given by the clerk in the solicitor's office, there could be no doubt that the advice was wrong insofar as it stated that the share in the unit could not be dealt with without the consent of Mrs Anderson but the question was whether or not there was an agreement which would bind either party to it, if that advice turned out to be wrong, as it clearly was.

His Honour further said:

I do not think, however, there has been an agreement made out between the parties that severance would not take place under any circumstances if severance was available. It was not a term of the written contract and I do not think there was a collateral agreement to that effect. The fact that two people accept advice does not necessarily mean that they have contracted to act and continued to act in a particular way if that advice turns out to be incorrect. I am of the view that no contract or collateral agreement has been made out, unfortunate though it may turn out to be in the circumstances of this case.

37 Mr Lo Surdo did not put his case on the basis of agreement, but rather on the basis of an estoppel, although I do not think that he precisely used that word. The argument was that Dr Chandra knew of the basis upon which Dr Goyal was prepared to and did transfer an interest to her, and knowing of that basis was bound in equity not to deal with the interest which she took, otherwise than in accordance with it.

38 The conversations referred to above, at the time of the transfer and at the time of the dispute about responsibility for Dr Chandra’s loans, are evidence that Dr Chandra knew of and encouraged (1) an expectation on the part of Dr Goyal that he would succeed to her interest in the property and (2) reliance to his detriment on that expectation by transferring his property into joint tenancy.

39 There are in the context of this case two circumstances additional to those conversations which, to my mind, have significance for the resolution of this question. The first is the history of the prior ownership of the property. Dr Goyal had, after all, acquired it outright at the outset. He had then acquired it again, or at least an interest in it, by paying out his first wife by way of property settlement; and he had then contributed to the further improvements of it. Having already in effect twice purchased the property, it might be thought improbable that he would be prepared to part with an interest in it on terms that his new wife – who had children of a previous relationship - was to be at liberty to deal with it in such a manner as could result in him losing his home, or having yet again to buy it back from her estate. The second factor is his significantly greater overall proportionate contribution to it, from prior ownership and from improvements made early in his marriage to Dr Chandra.

40 On the other hand, on any view Dr Chandra herself invested money in the property by contributing her own funds to the improvements, by taking out a separate loan and by herself making payments or repayments of that loan for some time until Dr Goyal assumed responsibility for it under the guarantee; but although it might be thought that she would not likely incur that expenditure if she were not to have the capacity to recover it, that has to be seen in the context that then she might well have been the survivor, and recovered not only that expenditure but the whole property.

41 Were it necessary to decide the question of fact on a final basis at this stage, the plaintiff would encounter the considerable difficulty that the most significant evidence is that of conversations, Dr Chandra’s version of which is not known, and may never be, so that the claim is one easily made and impossible to disprove and which the court would therefore subject to the closest scrutiny. But I am satisfied that there is a serious question to be tried, that Dr Chandra knew of and encouraged an expectation on the part of Dr Goyal that if he transferred an interest as joint tenant to her, she would not, at least without his prior agreement, sever the joint tenancy by a voluntary act, and also that she knew of and encouraged Dr Goyal’s reliance on that expectation in effecting the transfer, that it would in the circumstance be unconscionable for her to depart from that state of affairs, and accordingly that she was bound in equity to leave the joint tenancy intact.

42 It is sometimes said in applications for interlocutory injunctions that one consideration is whether damages would be a sufficient remedy. Properly understood, the real question is whether final injunctive relief would be declined because damages would be a sufficient remedy; if it can be seen at the interlocutory stage that that would be so, then an interlocutory injunction would be declined.

43 In my view, it is quite clear that final specific relief would not be refused in a case such as the present on the basis that damages were a sufficient remedy. The interest at suit is one in land in respect of which damages are almost never a sufficient remedy. Moreover, it is the longstanding home of the plaintiff, and damages would not be a sufficient remedy for disturbing him from that home.

44 That leaves for consideration the balance of convenience.

45 It is necessary at this point to return to the nature of the proceedings in this Court. Although the case has been conducted substantially as a suit in equity it must not be overlooked that this is, in fact, a matrimonial cause within the definition of that term in s 4(1) of the Family Law Act. Matrimonial cause means, amongst other things:

Proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them being proceedings arising out of the marital relationship or ... in relation to the divorce of the parties, the annulment of the marriage or their legal separation.

46 These are proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them arising out of the marital relationship. I have explained, in Young v Lalic [2006] NSWSC 18, how this Court retains jurisdiction in matrimonial causes. Nonetheless, it remains the case that, ultimately, these parties and their property are going to be subject to the discretionary property adjustment regime provided by the Family Law Act, s 79. Whether they choose to continue to litigate that issue in this Court or in the Family Court is probably ultimately a matter for them. Section 79 authorises the adjustment of the interests of the parties to a marriage in their property having regard to their respective contributions, financial and non-financial, direct and indirect, to the acquisition, conservation and improvement of their property and to the welfare of their family, and having regard also to the factors referred to in s 75(2), which are essentially concerned with the respective present and future needs and means of the parties.

47 Section 79(8) provides that where, before property adjustment proceedings are completed, a party to the marriage dies, those proceedings may be continued by or against the legal personal representative of the deceased party. Proceedings under s 79 having been instituted by the summons filed herein, such proceedings can be continued after the death of Dr Chandra by and against her estate. Ultimately, an order made under s 79 in the discretionary property adjustment jurisdiction will work to alter any existing legal and equitable interest which may be recognised by any declaration that might be made in the proceedings.

48 Accordingly, all that the grant or refusal of an injunction would determine is the starting point for the s 79 proceedings. If an injunction is granted, Dr Goyal may be able to establish that he is beneficially entitled to the whole of the property, whereas, if there is a severance of the joint tenancy, the starting point will be that each party will have their respective equitable interests in the property, which may never have to be precisely quantified in an application under s 79. If there were not a severance, and Dr Chandra were to die so that the whole of the equitable interest were to vest in Dr Goyal, that would not prevent Dr Chandra's estate from claiming an adjustment in its favour under s 79. Whichever is the starting point makes not the slightest difference to the outcome of the s 79 proceedings, which depend not on any starting point, but on identifying the pool of property available for division, and the respective contributions and means and needs of the parties. In such proceedings it is not necessary first to determine the existing beneficial interests of the parties [Olliver v Olliver (1978) 4 Fam LR 360, 365; and see also Scott v Briggs (1991) 14 Fam LR 661, 670 (NSWCA)].

49 It is essentially for that reason that it seems to me that injunctive relief in the present case ultimately achieves no significant utility. It will simply, in the last moments of the life of the first defendant, frustrate what she, apparently, wishes to achieve, and at the same time not ultimately advantage the plaintiff, in the inevitable s 79 proceedings.

50 On the balance of convenience, therefore, I do not see that declining interlocutory relief would occasion prejudice to Dr Goyal which is outweighed by that to Dr Chandra which would be created by granting it. For those reasons, I am disposed to decline to grant the injunction sought.

51 The notice of motion filed on 1 March 2006 is dismissed.

52 I order that the plaintiff pay the defendant’s costs of the motion.

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