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Saleeba v Wilke

 

[2007] QSC 298

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Saleeba v Wilke [2007] QSC 298

PARTIES:

CHRISTINA DIANA SALEEBA AS EXECUTOR FOR THE LATE JOHN RUDOLF HEDKE (ALSO KNOWN AS JOACHIM RUDOLF HEDKE)
(applicant)
v
JOSEPH HANS WILKE
(respondent)

FILE NO:

BS 398 of 2005

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

19 October 2007

DELIVERED AT:

Brisbane 

HEARING DATE:

9 October 2007

JUDGE:

Chesterman J

ORDER:

Application dismissed

CATCHWORDS:

REAL PROPERTY - GENERAL PRINCIPLES - INTERESTS IN LAND – INCIDENTS - JOINT TENANCY – SEVERANCE - OTHER CASES – where the respondent held property as joint tenant with another – where a dispute had arisen between them – where the respondent made a written offer to sell the property and divide the proceeds equally - where the other co-owner accepted but only after the lapse of the offer – where there was no further evidence of any agreement after the late acceptance - where no further steps were taken to sell the property before the death of the co-owner – whether the correspondence constituted a severance of the joint tenancy – whether at the time of the co-owner’s death the co-owners held the property as joint tenants or tenants in common  whether on the co-owner’s death the respondent held the entire property as sole owner

Abela v Public Trustee (1983) 1 NSWLR 308, applied

Calabrese v Miuccio (No2) [1985] 1 Qd R 17, cited

Corin & Anor v Patton (1990) 169 CLR 540, applied

Lyons v Lyons [1967] VR 169, considered

Magill v Magill NSWCA 40142 of 1993, considered

Public Trustee v Pfeiffle [1991] 1 VR 19, applied

Slater v Slater Eq 1365 of 1986 Equity Division 16 June 1987, considered

Sprott v Harper [2000] QCA 391, applied

Williams v Hensman (1861) 70 ER 862, applied

Wilson v Bell (1843) 5 Ir. Eq. R 501, considered

COUNSEL:

Ms D.A Skennar for the applicant Mr C Jennings for the respondent

SOLICITORS:

Chris Reeve & Co for the applicant Deacons for the respondent

  1. This efficiently and economically argued application requires only an answer to the question whether a joint tenancy was severed during the lifetime of the joint tenants. The applicant is the daughter and executrix of the late John Hedke, one of the joint tenants, who died on 28 June 2004. The respondent, Mr Wilke, is the surviving
    co-owner.
  1. In early 1994 Messrs Hedke and Wilke agreed to buy a residential home unit on Hilton Terrace at Tewantin, Lot 2 on BUP 5923, County of March, Parish of Weyba, for the sum of $100,000.  On or about 16 March 1994 Mr Wilke for himself and his nominee contracted to purchase the unit.  Title to it was duly conveyed to the late Mr Hedke and Mr Wilke as joint tenants, and they became registered proprietors on 16 November 1994.
  1. The applicant seeks a number of declarations but in particular a declaration that at the time of his death Mr John Hedke and the respondent held their respective interests in the home unit as tenants in common in equal shares and, what is to the same effect, a declaration that the joint tenancy of Mr Hedke and the respondent was severed prior to Mr Hedke’s death.
  1. At the time of the agreement both men lived in Melbourne.  It seems that they intended to live in the home unit during the Victorian winter but to let it to holiday-makers in the summer months to produce an income.  What happened in fact was that Mr Hedke lived in the unit from 15 March 1996 until he died.  He occupied two bedrooms and parked his car in the allocated garage.  After 1999 Mr Wilke resided in the unit from time to time.  He occupied the third bedroom.  An agreement that he have the right to occupy the garage appears to have been ignored by Mr Hedke.
  1. Nothing is known about the personal relationship between the co-owners but one may infer that the respondent became irritated with Mr Hedke’s behaviour. He consulted solicitors who wrote to Mr Hedke by letter dated 4 December 2001:

‘… On numerous occasions our client has objected to your conduct and you have chosen to ignore his complaints. 

Resolution of this matter

Our client wishes to resolve this matter quickly and cost effectively. 

Accordingly, Mr Wilkie proposes that:

(1)An independent curb side valuation be obtained from a local real estate agent of your choice from the following panel by Friday, 14 December 2001:

(a)Ray White RE Noosa;  or

(b)LJ Hooker RE Tewantin;  or

(c)Elders RE Tewantin.

(2)The flat be placed on the market for sale with one or more of the above local real estate agents on or before Saturday, 15 December 2001;

(3)The proceeds of the sale be divided equally between you and he.

This offer is open for acceptance until 11 December 2001 after which it will lapse and be incapable of acceptance.

In the event that you do not accept this offer, we are instructed to make the necessary application to the court for the appointment of an independent statutory trustee for the sale of the flat, for consequential orders in relation to the proceeds of the sale, and for costs.’

  1. On 7 December 2001 Mr Hedke consulted Mr Reeve of Chris Reeve and Co, solicitors of Tewantin, in response to the letter. Mr Reeve advised him to accept the proposal and agree to the sale of the home unit ‘as the only way to sort the matter out.’ He also advised Mr Hedke that ‘there was a significant risk that one of the owners would die and that the surviving owner would end up with the whole of the property which was inappropriate.’. Later that day Mr Hedke spoke to an employee of the solicitors who left a note for Mr Reeve ‘that settlement had been postponed to the 14.12.01 and agreed to settle 50-50.’ It is impossible to know what was meant by ‘settlement’.
  1. On 17 December 2001 the respondent’s solicitors wrote again to Mr Hedke:

‘We refer to our letter … dated 6 (sic) December 2001 which contained our client’s final offer to resolve this matter quickly and cost effectively. 

We note that you have not provided us with a response … .  Accordingly … our client’s offer is withdrawn.

We put you on notice that we are instructed to make the necessary application to the court for the appointment of an independent statutory trustee for … sale … .

Should you wish to discuss the matter please contact Matt Daniel …’

  1. By letter dated 18 December 2001, which may have crossed with Mr Daniel’s letter of 17 December, Mr Reeve wrote to Mr Daniel:

‘… In order to avoid further costs and outlays and rancour our client is agreeable to your proposal … and suggests the property is valued by and listed with all three nominated agents.  We look forward to hearing from you soon.’

  1. On 19 December 2001 Mr Hedke rang Mr Daniel. As far as one can make out from the succinct note of the conversation Mr Hedke said he would arrange for a real estate agent to conduct a valuation on the next day, and he expressed his agreement to the proposal because ‘he doesn’t want to incur too many solicitor’s costs’.
  1. Mr Daniel telephoned Mr Reeve. He did not speak to him but left a message that Mr Hedke had rung him, and that he had received Mr Reeve’s letter. On 21 December Mr Reeve attempted to return the call but Mr Daniel was out.  He, too, left a message.  There is no evidence of any further telephonic communication between the solicitors.  There was no further correspondence.
  1. On 7 January 2002 Mr Hedke applied to the Department of Public Works and Housing to be allocated a Government owned house which he might rent, as a matter of priority. He completed a form entitled ‘Application for Priority Housing’. His claim for priority was based upon the assertion that he had been disabled by a stroke and that his home was being sold.
  1. There is no evidence that the home unit was valued by an estate agent or listed for sale. It was not sold. As I mentioned, Mr Hedke continued to reside in it for two more years.
  1. This meagre rehearsal contains all that is known relevant to the question for determination. It comes from exhibit 1, the list of agreed facts prepared by the parties. Is it sufficient to show a severance of the joint tenancy?
  1. ‘Nowadays’ as Lord Denning MR said in Burgess v Rawnsley [1975] 1 Ch 429 at 438, ‘everyone starts with the judgment of Sir William Page-Wood VC in Williams v Hensman …’.  The case is reported at 70 ER 862 at 867.  The Vice-Chancellor said:

‘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 … .  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.  You must find in this class of case a course of dealing by which the shares of all the parties to the contest have been effected, …’

  1. The first described mode of severance requires a co-owner to alienate, or dispose of, some or all of his interest in the jointly owned property. To be effective the property must be effectively alienated in equity. See Corin & Anor v Patton (1990) 169 CLR 540 at 548 per Mason CJ and McHugh J, and at 565 per Brennan J, who said:

‘The joint tenancy … was severed … only if she succeeded in alienating her share or, at least, in divesting herself of a proprietary interest in it.’

  1. Nothing of the kind happened here and if the joint tenancy was severed it must have occurred pursuant to the second or third modes.
  1. Now an agreement between joint tenants to sever their joint tenancy is immediately effective. No doubt for that reason one does not find many reported cases dealing with that phenomenon. Calabrese v Miuccio (No. 2) [1985] 1 Qd R 17 was such a case.  It concerned an agreement to sever the joint ownership of money in a bank account. The point of the decision was that the agreement was effective despite remaining unperformed and being subject to a condition subsequent which failed.
  1. Most of the cases, at least of those to which I was referred, are concerned with whether one can infer or imply an agreement for severance from a contract between joint tenants to sell the property and divide the proceeds. This, at least, is the most common example of a contract with which the cases deal. They occur frequently in the realm of failed marriages and attempts by spouses to readjust their property interests.
  1. There is a discernible trend in Australian authorities that an agreement between joint owners to sell their property and divide the proceeds, whether equally or unequally, gives rise to an inference that there was a further agreement that the joint tenancy be severed immediately on the making of the agreement to sell. The cases, of course, turn upon their own facts and each is concerned with its particular circumstances but there is, I think, a general inclination, demonstrated by the decisions, to reach the result I mentioned. The result may be different if the terms of a particular agreement, or the circumstances in which it was made, demonstrate that the inference should not be drawn.
  1. The cases in this category are thoroughly reviewed and analysed by the judgments in Public Trustee v Pfeiffle [1991] 1 VR 19.  As a consequence of their separation a husband and wife made an agreement, which was approved by the Family Court, to settle their respective property claims.  By their agreement each acknowledged that the other was entitled legally and equitably to a one half interest in each of their properties;  that each of them held their respective interests in the properties upon trust for the terms of the agreement;  and that the properties should be sold upon specified events, whereupon the proceeds of sale should be divided equally.
  1. Kaye J said (25):

‘… There is a line of authority which establishes the following …:  if joint tenants are agreed to a sale and division of the proceeds on the happening of a particular event, then the joint tenancy is immediately severed, notwithstanding that the event had never occurred.’

The cases in the line were Gould v Kemp (1834) 39 ER 959;  Public Trustee v Grivas (1974) 2 NSWLR 316;  McKee v McKee (1986) 10 FAM L.R. 754;  Re Pozzi [1982] Qd. R. 499;  Abela v Public Trustee (1983) 1 NSWLR 308, and Burgess.

  1. McGarvie J said (30):

‘Conscious that survivorship frequently operates unfairly, courts applying principles of equity have lent towards severance and have facilitated it by treating a mutual intention of the parties to sever as sufficient to effect severance in equity:  … .  The mutual intention to sever may be an expressed intention … (underlying intention revealed by agreement) or may be inferred from the conduct and dealings of the parties.  … The mutual intention to sever does not need to be expressed in an enforceable contract … or in any contract ….’

  1. Ormiston J said (35):

‘… I have no doubt that the parties intended to declare that the beneficial interests … were to be held as tenants in common … essentially because … they expressed those interests to be several interests of a kind consistent only with a tenancy in common.  It was sufficient for them to agree that ‘each’ was entitled to a ‘one half interest’ in the two properties.’

  1. In Abela the parties, again estranged husband and wife, after inconclusive negotiations and applications for distributions of property, agreed upon the terms of a consent order that they forthwith join in the sale of their former home at a price not less than a specified minimum and deposit the net proceeds of sale into a bank account to remain there until the parties agreed upon their respective shares or the court fixed it.  The husband died before the order was executed.  Rath J held that the consent order manifesting the parties’ agreement proved that they no longer intended the tenancy to operate as a joint one so that it automatically effected a severance, whether or not the agreement was binding.  His Honour thought (316):

‘The proper inference is that the parties agreed upon an immediate severance of their joint tenancy, leaving to the future only a decision as to their shares.’

  1. What seems to underlie the reasoning in these cases is that the right of survivorship is an essential incident of joint ownership. A sale of their jointly owned property and a division of the proceeds destroys the possibility of survivorship. After the sale none of the co-owners can succeed to the interests of any others who might die. Accordingly an intention to sell has implicit within it an intention to destroy the co-owners’ right to survivorship which is essential to joint ownership.  The agreement to sell is a manifestation of the intention to bring the joint tenancy to an end. 
  1. To apply the analysis provided by the cases one first asks was there an agreement between the co-owners for a sale of the property and a division of the proceeds? If the answer is affirmative one then asks: did the terms of the agreement evince an intention, common to both owners, that the tenancy be severed on the making of the agreement?
  1. The evidence does not, I think, establish an agreement to sell the home unit and divide the proceeds. Certainly there was no formal written agreement to that effect. But equally clearly the parties’ conversations and correspondence do not amount to an agreement, of whatever description, to that end. There was an offer constituted by the letter of 4 December 2001, which to give rise to an agreement had to be by 11 December, and it was not. Even if one infers that time for acceptance was extended by the conversation between Mr Hedke and Mr Daniel on 19 December, or the attempts of the solicitors to contact each other on 19 and 21 December, there is still no evidence of an acceptance of the offer. At most Mr Hedke indicated that he looked favourably on the proposal. Had there been acceptance of the offer there would have been a communication of, or evidencing, that event. There is none in the material.
  1. There is no evidence that the parties settled upon the terms of any agreement. The respondent’s offer was to obtain a valuation from one estate agent chosen by Mr Hedke from the panel of three names submitted.  There is no evidence that he made any such selection.  Indeed his solicitor’s purported acceptance of the offer contained a slight variation, which made it a counter-offer.  He suggested a valuation from all three agents.  There is no indication in the material that one term or the other was agreed. 
  1. If one looks to the conduct of the parties to furnish evidence of an agreement one finds no evidence of the engagement of any agent to value the property, or its listing for sale.
  1. One does not therefore have the raw material to allow for the inference that the parties intended to bring their joint tenancy to an end. I do not overlook the point that one does not need a binding contract, or indeed any contract, to support the requisite intention. However one must have evidence of a mutual intention to sever the joint tenancy. This has most commonly been found in the terms of an agreement to sell. Here the only basis put forward for finding the intention is the desultory exchanges between the parties and their solicitors. These were inconclusive and came to nothing. The exchange says nothing definitive about what the parties intended. If anything one might think from the lack of interest with which the proposal was pursued, the ease with which the two gentlemen continued their accustomed mode of habitation, and the complete failure to do anything required by the proposal, that they were content with the status quo and did not intend any alteration.
  1. One turns then to the third mode by which severance may occur: a course of dealings sufficient to intimate that the interests of all joint owners were mutually treated as constituting a tenancy in common. This ground has given rise to differences of opinion. Some have seen it as a sub-category of the second mode, and as amounting only to an implied, rather than an express, agreement to sever. The implication arises from the conduct of the co-owners with respect to the property. This was the view taken by McInerney AJ in Lyons v Lyons [1967] VR 169 at 171-2 and Walton J in Neilson-Jones v Fedden [1975] 1 Ch 222 at 231, and in Flynn v Flynn (1930) IR 337 at 343. 
  1. Others have seen it as a wholly separate category. This was the view of Ormiston J in Pfeiffle at 35 and of Browne LJ and Sir John Pennycuick in Burgess at 444 and 447 respectively.  The latter said:

‘I do not think rule 3 … is a mere subheading of rule 2.  It covers only acts of the parties, including, … negotiations which, although not otherwise resulting in any agreement, indicate a common intention that the joint tenancy should be regarded as severed.’

Rath J appears to have accepted this view in Abela at 315.

  1. The Court of Appeal appears to have accepted the second opinion. In Sprott v Harper [2000] QCA 391 the Court said (para 7, 8):

‘Counsel have submitted that the question ought to have been decided by reference to the question whether a binding agreement had been reached … .  That however is not necessarily the case.  The test for determining whether parties have by their conduct severed a joint tenancy are wider than this.  The classical statement is that of Page-Wood VC in Williams v Hensman. … The relevant statement recognises that a joint tenancy may be severed in three ways.  … The third is by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. 

…  A severance may occur under the … third way … independently of any intention to achieve such a specific result.  The question is whether one or both of the parties have acted in such a manner as to require an inference of severance to be drawn.  … The real question is whether the parties have acted in a way that the law regards as inconsistent with the maintenance of the joint tenancy.’

  1. This puts the matter rather abstractly, and emphasises objectivity, but does regard the third category as separate and distinct from the second, ‘severance by mutual agreement’. Professor Butt, commenting on the decision, 2001 71 ALJ 6 concluded:

‘All that is required is that the parties, by agreement or conduct, have treated themselves as if they were separate owners of their interests.  That then puts an end to the joint tenancy, and with it the right of survivorship’.

  1. That comment was regarded as the correct distillation of the principle in Sprott by Martin CJ in On (as Administrator of the Estate of On) v On (2002) NTSC 18 (paras 20-21). 
  1. The weight of authority thus supports the third category as having independent existence. I would myself have preferred the other opinion. The point about a course of dealing with the jointly owned property is that it shows how the parties regarded their co-ownership. It is indicative of their intention with respect to it. The course of dealing is important because it allows an inference to be drawn that the parties were in agreement that they should not hold the property as joint tenants. As Browne LJ said in Burgess at 444 ‘an agreement to sever can be inferred from a course of dealing’.  The first authority referred to was Wilson v Bell 5 Ir. Eq. R. 501 which is the case usually advanced for the existence of the third mode.  Sprott unduly emphasises the objective indications of severance.  It is said that severance is a legal consequence, imposed by the law, on certain conduct.  The point is, I think, that the conduct shows what the co-owners must have intended.  The remark that intention is irrelevant must, I think, be understood as referring to a subjective intention.
  1. Moreover this approach, that categories 2 and 3 are both species of the genus agreement, is consistent with the opinion of Lord Hardwicke LC in Partriche v Powlet [1740] 26 ER 430 at 431 that there are only two methods of severance:

‘This is not a severance;  for, first, there is no agreement to this purpose;  secondly, if no agreement, then there must be an actual alienation to make it amount to a severance …’.

The passage was expressly approved by Mason CJ and McHugh J in Corin at 547.

  1. I expect nothing turns on the distinction and I approach the question by reference to what was said in Sprott.  Was there a course of conduct inconsistent with a joint tenancy from which one would objectively infer an intention to hold property as tenants in common?
  1. What is necessary to constitute a course of dealing may be understood from a consideration of some of the cases. Slater v Slater (unreported Supreme Court of New South Wales, 1365 of 1986 Equity Division 16 June 1987) was another matrimonial dispute.  Following dissolution of their marriage the parties’ solicitors corresponded about property.  The husband made an offer:

‘Since it appears that agreement cannot be arrived at … our client proposes that, by consent, the following orders be obtained from the Family Court:

  1. That the joint tenancy in … the former matrimonial home be severed.
  1. That the parties become tenants in common in equal shares.
  1. That your client have exclusive occupation … until … her death or earlier election to vacate.
  1. That on the happening of either of the events … the property be sold and the net proceeds distributed …’

The answer was:

‘We … advise that we are instructed that the terms … are acceptable to our client provided the costs … are borne by your client. …’

  1. No application was made to the court and no consent order was made. Years went by and the husband died. Cohen J rejected an argument that the joint tenancy had been severed by the two letters. His Honour said (p 4):

‘Where a claim is made that the intention by both parties to sever the joint tenancy has been established by negotiation then in my view there must be a clear indication by each party that the severance is regarded by them as having occurred or been brought about.  In effect, whatever else might be required … the creation of a tenancy in common must be acknowledged as having been decided upon so that thereafter, whether the negotiations are concluded or not, the mutual attitude of the parties on this aspect is unchanging.  …  I do not consider that these letters go far enough to establish that the interest was mutually treated by the parties as thereafter constituting a tenancy in common.  The intention was that severance would take place by court order … .   The acceptance by the defendant’s solicitors was conditional … .  …  The reply took the matter no further than indicating that the defendant would, subject to costs, consent to orders being made by the court which would themselves effect a severance and the creation of a tenancy in common.

Further, the dealings must be taken as a whole, and one should look at what follows.  The deceased failed to give further instructions for another three years, and when he did so there was no assumption that the parties agreed on a severance.’

  1. Magill v Magill (Court of Appeal NSW 40142 of 1993 29 August 1996) was a case of brothers who jointly owned properties and disagreed about their continued relationship and the mode by which the joint tenancies might be severed.  One proposed partition and the other the purchase of his brother’s interest or its transfer to his son.  No agreement was reached before one of the brothers died.  Simos AJA (with whom Mahoney P and Beazley JA agreed) said (p 7):

‘… The correct analysis of the correspondence … is that they both wished to sever the joint tenancy and were exploring various means of achieving that result.  …  The parties were at no time contemplating the severance of the joint tenancy … by any other means and in particular … were not contemplating the severance of the joint tenancy by means of mutual recognition or mutual acknowledgment or any mutual agreement other than in respect of agreements or proposed agreements as dealt with in the correspondence. …  Rather the position was that the parties were then in the course of negotiating the bringing of the joint tenancy to an end only by means of the possible sale and purchase of that interest. …  Since no purchase was ever agreed it follows … that there was no severance …’

  1. In Gore and Snell v Carpenter (1990) 60 P & CR 456 Judge Blackett-Ord said (462):

‘Then, was there a course of dealing?  There were negotiations, as I have said, but negotiations are not the same thing as a course of dealing.  A course of dealing is where over the years the parties have dealt with their interests in the property on the footing that they are interests in common and are not joint.  As, for instance, in the case of Wilson v Bell which was referred to by Vice-Chancellor Page-Wood.  But in the present case there were simply negotiations between the husband and the wife and again there was no finality and there was no mutuality.  For severance to be effected by a course of dealing all the joint tenants must be concerned in such a course …’.

  1. The leading judgment in Wilson v Bell (1843) 5 Ir. Eq. R. 501 was given by Lefroy B.  The property in question was residuary personalty left to five beneficiaries.  Over the years the property was the subject of at least two legal proceedings brought to protect their interests.  Some of the co-owners had died but the proceedings were brought by the surviving co-owners and the personal representatives of the deceased.  After the lapse of 18 years only one of the original five co-owners was left alive.  He claimed the whole property.  The claim was entirely inconsistent with the fact that he had been a plaintiff with the personal representatives of some of the co-owners.  Had the property been jointly owned the estates of the deceased co-owners would have had no interest in the suit.  Lefroy B said (508):

‘Here, the personal representative of a deceased party is put to the expense of carrying on a suit for a specific purpose, to have the property divided into five shares and to be decreed entitled to one of them;  this bill, therefore, shows an acting and dealing with the residue, which is quite inconsistent with the notion that the legatees viewed it in any other light than as a property held by them in common … for the personal representative … ought not to have been joined as a co-plaintiff and subjected to the expenses of the suit, unless he was entitled to a share in the property.’

  1. In Burgess Sir John Pennycuick said (447):

‘I do not doubt myself that where one tenant negotiates with another for some rearrangement of interest, it may be possible to infer from the particular facts a common intention to sever even though the negotiations break down.  Whether such an inference can be drawn must … depend upon the particular facts.  In the present case the negotiations … fall … far short of warranting an inference.  One could not ascribe to joint tenants an intention to sever merely because one offers to buy out the other … and the other makes a counter-offer …’.

  1. It is true that in the same case Lord Denning MR expressed the principle more widely. He said (439):

‘… A “course of dealing” need not amount to an agreement, expressed or implied, for severance.  It is sufficient if there is a course of dealing in which one party makes clear to the other that he desires that their shares should no longer be held jointly but be held in common.  I emphasis that it must be made clear to the other party.  …  Similarly it is sufficient if both parties enter on a course of dealing which evinces an intention by both of them that their shares shall henceforth be held in common and not jointly.’

  1. The passage does not represent the law in Australia.  It was expressly disapproved by Mason CJ and McHugh J in Corin at 547-8 by Brennan J at 566.  For that reason Burgess must be regarded with some caution by courts in this country.  In particular if a course of dealing is to be relied upon as establishing a consensus (to use the word employed by Mahoney P in Magill) it must be a course of dealing in which all co-owners participated and the intention to sever to which the course of dealings give rise must be an intention held in common by all the co-owners.  The unilateral acts of one co-owner will not suffice, nor will an intention of that co-owner to bring about the severance, however forcibly expressed to the others.  The course of dealing must be mutual and give rise to a common intention.  To the extent that Sprott suggests that the conduct of one joint owner may effect severance by his conduct I would respectfully think it does not accord with Corin.
  1. When one brings this understanding to the facts of the present case it is apparent that they do not constitute a course of dealing inconsistent with joint tenancy, or manifesting a common intention to sever the joint tenancy. There is nothing here like in Wilson where the co-owners dealt with the property in a manner which was consistent only with their being tenants in common.  So far as the evidence goes the respondent and Mr Hedke dealt with the property in the same way throughout their co-ownership.  Nothing changed with the termination of correspondence in December 2001.  They occupied the home unit as before. 
  1. The weight of authority favours the view that negotiations, which come to nothing, for the purchase of one co-owner’s interest, or its partition, or sale to a third party and the division of proceeds, do not amount to a course of dealing so as to satisfy the third rule. The correspondence does not amount to negotiations. There was a proposal which attracted temporary interest and then lapsed. There is nothing to show an intention to alter the nature of the co-tenancy.
  1. Moreover it is right to look not just at the correspondence and conversations of 2001 but what followed. This point is made by Cohen J in Slater.  In this case the sequel is important.  Neither party acted as though they had agreed to sever the joint tenancy or to sell the home unit and divide the proceeds.  This is, I think, a powerful indication that there was no common intention to bring about a severance.  One must also remember the advice given by Mr Reeve to Mr Hedke of the consequences of not altering the tenancy.  The inference is at least as open that he intended the joint tenancy to remain, by doing nothing, as his lethargic assent to the proposal might indicate an intention to sever.
  1. The applicant’s counsel submitted that the authorities showed an inclination on the part of the courts to conclude that a joint tenancy had been replaced by a tenancy in common. Ms Skennar pointed out that ‘equity leans against joint tenancies’ because of the unfair operation of the right of survivorship and referred to the judgment of Ormiston J in Pfeiffle at 37:

‘… The slightest indication of the holding of separate interests has been considered to point to a tenancy in common …’.

But as Rath J pointed out in Abela at 315 it is now easy to sever a joint tenancy.  Section 59 of the Land Title Act provides a ready facility so that the court is ‘no longer … driven by “minute grounds” to hold a severance to have taken place.’

  1. I agree with his approach, but whether or not one may find severance by reference to ‘minute grounds’, one still must find grounds. There is in this case no evidence of any grounds for a severance of the joint tenancy. The co-owners thought about it, and thought it would be a good idea, but did nothing about putting their idea into effect. They did not agree to sever the tenancy: they did not agree to sell the property to divide the proceeds and they did not act with respect to the property other than they had always done, as joint tenants.
  1. The applicant briefly submitted that the respondent is estopped from denying an agreement to sell the property and the severance of the joint tenancy. The submission founders on several obstacles. No representation that there was an agreement, or that the parties had formed an intention to sever the joint tenancy, is identified in the submission and I cannot see one in the evidence. There is no evidence of detriment suffered by the late Mr Hedke. It is said that he took positive steps to find alternative accommodation and did not take any step to protect his interest. Filling in the application for priority housing does not constitute a detriment. If failing to taking a step to protect his interest in the property was a detriment there is no evidence that his inactivity was in reliance upon anything said or done by the respondent. The evidence is too meagre to allow any such inference. In any event the interests affected by his inertia were not his but those who might succeed to his estate.
  1. The applicant has not made out her claim to relief and the application must be dismissed.
Close

Editorial Notes

  • Published Case Name:

    Saleeba v Wilke

  • Shortened Case Name:

    Saleeba v Wilke

  • MNC:

    [2007] QSC 298

  • Court:

    QSC

  • Judge(s):

    Chesterman J

  • Date:

    19 Oct 2007

  • White Star Case:

    Yes

Litigation History

No Litigation History

Appeal Status

No Status