Purser v Purser (No 2)

[2024] NSWSC 700

Supreme Court

New South Wales

Medium Neutral Citation:

Purser v Purser (No 2) [2024] NSWSC 700

Hearing dates:

On the papers

Decision date:

07 June 2024

Jurisdiction:

Equity - Real Property List

Before:

Peden J

Decision:

Vary order 5 of the orders made by Peden J on 15 May 2024 to include a new order 5(f), which will read: “f. Payment of the balance to Laura Purser and Glenn Ian Purser as to 50% each”

Catchwords:

LAND LAW — Co-ownership — Severance of joint tenancy — Where co-owners have not formally severed joint tenancy — Where co-owners’ respective shares of the Property not determined — Whether joint tenancy severed unilaterally by deed or by course of conduct

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 12, 24, 66G

Real Property Act 1900 (NSW), s 97

Cases Cited:

Application of Richard Albarran; Harb v Harb [2010] NSWSC 1251

Federal Commissioner of Taxation v Everett (1980) 143 CLR 440

McNamee v Martin as Financial Manager for John Boden McNamee [2021] NSWSC 568

Norman v Federal Commissioner of Taxation (1963) 109 CLR 9

Purser v Purser [2024] NSWSC 611

Texts Cited:

B Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Co)

G Tolhurst, The Assignment of Contractual Rights (2nd ed, 2018, Hart)

Category:

Consequential orders

Parties:

Laura Purser (Plaintiff)
Glen Ian Purser (Defendant)

Representation:

Counsel:
S Hill (Plaintiff)

Solicitors:
Higgins Lawyers (Plaintiff)
Roberts & Co Solicitors (Defendant)

File Number(s):

2023/00458015

Publication restriction:

Nil

JUDGMENT

1. On 15 May 2024, I delivered the principal Judgment in these proceedings: Purser v Purser [2024] NSWSC 611.

2. The principal judgment concerned an application by the plaintiff, Laura Purser, for, inter alia, orders under s 66G Conveyancing Act 1919 (NSW), for the appointment of trustees for sale of a property in Glen Davis. Ms Purser and her husband, the defendant, Glen Purser, co-owned the property as joint tenants.

3. I made orders appointing two trustees for the sale of the property, on terms. I also ordered the proceeds of sale of the property to be applied in a particular order of priority. However, because the parties were joint tenants, and the joint tenancy had not been severed, I was unable to determine the appropriate division of the net proceeds as between the parties. Further, Mr Purser had consented to the trustee sale, but not the division of the net proceeds, and it was appropriate to allow him an opportunity to be heard on that issue.

4. Accordingly, I gave the parties leave to address the Court on the issue of the appropriate division of the proceeds of sale, with the issue to be dealt with on the papers if appropriate. That issue now falls to be determined.

5. Ms Purser submits any joint tenancy has been severed, either pursuant to a deed entered into after the principal judgment, or by conduct of the parties. She seeks an order that the net proceeds of sale be divided 50/50 between her and Mr Purser, after being applied in accordance with the existing priority regime.

6. Mr Purser seeks an order that the net proceeds be held on trust, pending the parties’ agreement or an order of the Federal Circuit and Family Court. As an alternative, he seeks an order that the proceeding be adjourned to 1 August 2024, presumably to allow Federal Circuit and Family Court proceedings to be commenced.

Has the joint tenancy been severed?

7. There was no formal severance of the joint tenancy pursuant to s 97 Real Property Act 1900 (NSW). However, Ms Purser submits any joint tenancy has now been severed, either pursuant to a deed, or by conduct of the parties.

Severance by deed

8. Upon the appointment of trustees for sale under s 66G, the parties’ interest in the property is converted from an interest in real property into a right to have the trust for sale properly performed, and to share in the eventual proceeds of sale in proportion to their interests: Application of Richard Albarran; Harb v Harb [2010] NSWSC 1251 at [16]-[19] (Brereton J).

9. On 28 May 2024, Ms Purser entered into a deed poll, under which she purported to assign her interest in the “proceeds of sale” to herself, as both assignor and assignee. Relevantly, the deed contained the following terms:

1. Recital F records that “The Assignor wishes and intends to assign her interest in the Proceeds of Sale as joint tenant to herself as Assignee on the terms provided in this deed”.

2. Clause 1 provides:

The Assignor assigns, transfers and sets over to the Assignee absolutely, and the Assignee accepts the assignment of, all of the Assignor’s legal and equitable rights, title and interest in the Proceeds of Sale, free from all encumbrances, as and from the date of the Deed (the Assignment).

3. Clause 2 provides that the assignment is “for consideration of $100.00.”

4. Clause 3 provides:

The Assignor irrevocably severs the joint tenancy in the Proceeds of Sale and for the intent that hereafter, Glen Ian Purser and Laura Purser only hold any interest in the Proceeds of Sale as separate and equal tenants in common.

5. Clause 4 provides:

The Assignor shall, whenever requested by the Assignee, do or cause to be done anything reasonably requested to further and more satisfactorily assure the Assignor’s obligations under this Deed, or to perfect the assignments referred to in this Deed.

10. On the same day, Ms Purser sent a letter to Mr Purser, notifying him that she had assigned her interest in the proceeds of sale to herself, and attaching the relevant deed. The letter was apparently sent in accordance with s 12 Conveyancing Act, which relevantly provides:

Any absolute assignment by writing under the hand of the assignor … of any debt or other legal chose in action, of which express notice in writing has been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action, shall be, and be deemed to have been effectual in law … to pass and transfer the legal right to such debt or chose in action from the date of such notice …

11. Ms Purser submits that, by taking these steps, she has effectively severed the joint tenancy in respect of the parties’ interests in the proceeds of sale.

12. In support of this submission, she refers only to the decision of Sackar J in McNamee v Martin as Financial Manager for John Boden McNamee [2021] NSWSC 568 (McNamee v Martin). In that case, the plaintiff attempted to sever a joint tenancy in respect of a debt by assigning her rights to herself, using a deed poll which included near identically worded clauses to the deed entered into by Ms Purser. After reviewing the plaintiff’s submissions concerning relevant authorities, his Honour concluded the plaintiff’s purported assignment was effective to sever the joint tenancy in respect of the debt, at least in equity.

13. By parity of reasoning, it is suggested by Ms Purser that her deed effectively severed the joint tenancy in respect of the parties’ interests under the trust for sale. However, I do not accept this submission, for the following reasons.

14. In McNamee, his Honour did not give detailed reasons for, and acknowledged that there may be “some doubt” about, his conclusion regarding severance of the joint tenancy. He explained that the plaintiff had therefore “appropriately” sought alternate relief, which his Honour also granted. Furthermore, his Honour’s decision has not been subsequently cited. In these circumstances, I do not take the issue of whether it is possible to unilaterally sever a joint tenancy in respect of a chose in action by assignment to oneself to be settled.

15. No submissions were made on this point by Ms Purser beyond referring to McNamee. For instance, no submissions were made on the significance (or lack thereof) of the fact that the chose in action at issue in McNamee was a legal chose, whereas the chose in action in this case is an equitable chose. Nor were any submissions made on the issue of whether it is possible, as a matter of logic and law, for a beneficiary under a trust to assign their own beneficial interest to themselves. True it is that, under s 24 Conveyancing Act, “a person may assure property to himself or herself”. However, no submissions were made as to the relevance, if any, of this section to the present case.

16. There is also an additional issue in this case, which arises out of the fact that the Glen Davis property is yet to be sold by the trustees for sale. The deed entered into by Ms Purser speaks of Ms Purser’s “rights, title and interest” in the proceeds of sale. Because the property has not been sold, however, there are as yet no proceeds of sale to speak of. As such, there may be an issue with the deed attempting to assign future property, as distinct from a present right to future property: see generally G Tolhurst, The Assignment of Contractual Rights (2nd ed, 2018, Hart Publishing) at [4.31], [6.17].

17. There are also issues with Ms Pursers use of s 12 Conveyancing Act. It is well-known that, while s 12 refers to the assignability of “legal choses in action”, the section also captures equitable choses: see eg Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 at 447 (Barwick CJ, Stephen, Mason and Wilson JJ). However, s 12 does not apply to parts of choses in action: see eg Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 29-30 (Windeyer J). Here, Ms Purser cannot transfer the whole of a chose in action, in respect of which she is only a joint tenant. As a result, s 12 is of no assistance.

18. Furthermore, s 12 requires notice to be given to the “debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim such debt or chose in action”. Ms Purser may have given notice to Mr Purser, but there is no indication she has given notice to the individuals who would appear to actually satisfy the aforementioned description, being the statutory trustees for sale.

19. In these circumstances, I am not persuaded the deed has severed the joint tenancy in respect of the parties’ interests under the statutory trust for sale.

Severance by conduct

20. In the alternative, Ms Purser submits that any joint-tenancy has been severed by the conduct of the parties. In support of this submission, Ms Purser points to the fact that Mr and Mrs Purser are now separated and undertaking negotiations concerning a property settlement of their relationship assets.

21. In Scott v Scott [2009] NSWSC 567 at [102], Ward J (as the President then was) found that a joint tenancy had been severed by the conduct of parties, whose intimate relationship had come to an end, in choosing to informally divide their assets between them. This course of conduct was found to be “unequivocally referable to a severance of the joint tenancy”.

22. In affidavit evidence, Mr Purser admits he regards his marriage with Ms Purser as over. As such, he recognises there needs to be a property settlement between the parties, and he hopes this can occur informally, without the need for proceedings in the Federal Circuit and Family Court. In respect of the Glen Davis property specifically, Mr Purser also deposes to his belief that he would be entitled to more than 50% share of the net proceeds of sale in Federal Circuit and Family Court proceedings.

23. I consider Mr Purser’s evidence demonstrates a recognition on his part that the parties are now entitled to separate portions of their jointly held property, including in respect of the future proceeds of sale of the property. Ms Purser is clearly of the same belief. As in Scott v Scott, I consider that both parties’ position is therefore unequivocally referable to a severance of the joint tenancy. I therefore consider that the joint tenancy has been severed by conduct.

Appropriate division of proceeds

24. As noted, Ms Purser seeks orders that the net proceeds of sale be paid 50% to each of the parties. Having found that the joint-tenancy has been effectively severed, I agree that this is the appropriate division of the future proceeds of sale of the property. As the learned author of Butt’s Land Law (7th ed, 2017, Lawbook Co) observes at [6.490]:

Strictly speaking, joint tenants do not have proportionate shares in the land. It might therefore be asked how a joint tenant can convert his or her entitlement in the entire estate or interest into a proportionate share held as tenant in common. But for the purpose of severance a joint tenant is regarded as having a potential share in the land commensurate with that of the other joint tenants. Where there are two joint tenants, that potential share is one-half; where there are three joint tenants, it is one-third and so on. This potential share the joint tenant can deal with unilaterally during his or her lifetime. By so dealing with it, that share may be “severed” from the other shares and converted into an “aliquot” undivided share held in common, not jointly.

25. Mr Purser opposes a 50/50 division on the basis of a belief that he is likely be entitled to a greater share of the net proceeds of sale in proceedings in the Federal Circuit and Family Court. He suggests further that there is a risk that Ms Purser will dissipate the funds to which the Federal Circuit and Family Court is likely to find that he is entitled.

26. However, there is no evidence that any such proceedings have been commenced in the Federal Circuit and Family Court. Nor is there any objective evidence of a risk of dissipation of the funds by Ms Purser. Even if there was, I consider the fact that the property has not yet been sold leaves Mr Purser with sufficient time to take whatever steps he considers appropriate to protect any interest he considers he has. In these circumstances, there is no reason for this Court not to make an order that the proceeds of sale be divided 50/50, after first being applied in accordance with the existing priority regime.

Orders

27. For the above reasons, the appropriate order is as follows:

1. Vary order 5 of the orders made by Peden J on 15 May 2024 to include an order 5(f), which reads: “f. Payment of the balance to Laura Purser and Glenn Ian Purser as to 50% each”.

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Decision last updated: 07 June 2024