Anderson v O'Donnell [2000] NSWSC 895 | Case summary

1 HIS HONOUR: This is an unfortunate case where mother and daughter have fallen out. The case involves a property, 8/36 Seaview Avenue, Newport. That property is held by the plaintiff daughter and the defendant mother as joint tenants. The property was purchased by the defendant in 1973 and she has continued to reside there ever since. It is clear that she has wished to retain the benefit of living in that property. Her former husband died in 1979. It seems likely that she had little in the way of assets and by 1986 was having difficulty in paying for her normal living expenses and the expenses of the unit. She was considering the possibility of borrowing money under a scheme under which, as I understand it, a home is transferred to a purchaser on the basis that the vendor retains a right to live in the property for his or her life, the sale price being adjusted taking into account of the life expectation of the vendor. 2 In any event, that is not to the point because that did not go ahead and there were some discussions between the defendant and her daughter and then son-in-law Mr Gordon Anderson, under which I find that there was discussed the possibility of borrowing money on the security of the unit, which money could be provided to the defendant to enable her debts to be paid and, it seems, to provide her with the funds to purchase a new motor car. 3 There were discussions between Mr Anderson and the Westpac Banking Corporation, as a result of which a proposal was put forward to borrow $35,000 from the bank on the security of the unit. The bank was only interested in this if that unit was transferred into the joint names of plaintiff and the defendant. Mr Anderson and his wife discussed the amount which they thought they had paid for the benefit of Mrs O'Donnell over prior years and came to a figure of $30,000 for that. For that reason it was determined that a price could be paid for the unit of $65,000, namely, $30,000 representing past consideration, and a further $35,000 which could be borrowed from the Westpac Banking Corporation. It seems that later a valuation was obtained which supported a total price for the unit at that time, namely March 1989, of $130,000. 4 It was arranged that the plaintiff and the defendant would go to see a Mr Millard, solicitor, who was probably the solicitor for Mr Anderson and who had not previously acted for Mrs O'Donnell, but I do not think that matters, and at that time it was far more common for the same solicitor to act for both parties on this type of transaction than would now be the position. 5 Mrs O'Donnell thought that she saw Mr Millard on two occasions. In any event, a contract was prepared which shows Mr Millard as acting for Mrs O'Donnell as vendor, but Mrs O'Donnell and Anderson as acting for themselves as purchasers. I do not place any significance on that aspect of the contract. It was a sale from Mrs O'Donnell to herself and her daughter to hold the property then as joint tenants. In fact the front page of the contract is anything but clear, but there is no doubt that the intention was that the result of the transaction would be that mother and daughter would hold the property as joint tenants. Westpac Banking Corporation approved a loan of $35,000 on the security of the unit. Mother and daughter executed a mortgage on 31 March 1989 to secure the loan. Settlement took place on 14 April 1989, and it is likely that the transfer document was signed some little time before that. 6 A secretary or law clerk employed by Mr Millard attended the parties when they signed the documents. There is little dispute about the conversation which took place. Mrs Anderson said that the lady in question said to both of them "under this arrangement the two of you will be co-owners as joint tenants. Do you understand, Mrs O'Donnell, that this means that you can't deal with your share of the unit without your daughter's consent and you can't leave the unit to anyone else, nor can your daughter. Are you agreeable to that or do you want a day or so to think about it?" According to Mrs Anderson, Mrs O'Donnell said she understood and was agreeable to that. While there may have been some doubt about that, Mrs O'Donnell said in evidence today that she knew that she was transferring the property to herself and her daughter as joint tenants, that this was explained to her, that she knew that the later to die would inherit the whole of the property, and that this was explained to her by a woman in Mr Millard's office. 7 The only amount of money which was paid on the transaction was the sum of $35,000. On the evidence, it seems that this amount was paid to Mrs O'Donnell. At least some part of it was applied to the purchase of a new motor car for her, the figure probably being $13,000. Some of it may have been applied towards the stamp duties and other expenses on the transaction; some of it was certainly applied to discharge liabilities of Mrs O'Donnell to stores and other places. It is more likely than not that some part of it went to Mrs Anderson, but the amount which went to her is not clear. There had been a proposal under which some of it would be invested with Westpac Banking Corporation at a rate which would have been sufficient to make the repayments due under the mortgage. Mr Anderson said he thought that some amount was so paid. Mrs Anderson said it was possible. I cannot decide other than to decide that some amount in some way of the $35,000 went to Mrs Anderson or for her benefit, but what amount it is impossible to determine. 8 Mr and Mrs Anderson divorced in 1992. Up till that time Mr Anderson and Mrs O'Donnell had been on good terms, and to some extent remained friendly afterwards. However, for some reason, the relationship between mother and daughter seems to have deteriorated, perhaps because one of the other children of the defendant thought that what had happened was unfair. In any event, the defendant did take some steps in 1994 to sever the joint tenancy by transferring her interest to her son, but this did not proceed because Westpac Banking Corporation wrote to Mrs Anderson about the matter and she expostulated with her mother who then decided not to go ahead. 9 The matter then stood with the title as it was until 1999. By that time, Mrs Anderson had finished paying off the loan from Westpac Banking Corporation. I should say I do not think that anything in particular turns upon that because the loan from the bank was really made to enable Mrs Anderson to purchase whatever interest she purchased in the property. 10 These proceedings come about as a result of Mrs Anderson having been advised by the Registrar-General, as is the practice, that a document severing the joint tenancy had been lodged for registration. In such circumstances, an opportunity is given to the other joint tenant or joint tenants to object, and in fact they are told the grounds on which it is possible they may be entitled to object, the principal ground of course being that there is an agreement that the joint tenancy will not be severed. It is the same sort of reason which applies when a co-owner applies for the appointment of trustees for sale under s 66G of the Conveyancing Act 1919, one of the few bases to resist such an order being that there is an agreement not to sell or sever. 11 The claim of the plaintiff is put on three grounds. Firstly, that it was a term and condition of the agreement that Mrs O'Donnell would be able to reside exclusively in the unit after transfer, and that it was a term of the agreement that the joint tenancy would not be able to be severed by the defendant without her consent. This agreement is said either to be express arising from the conversation at the solicitor's office which I have set out, or implied from the facts which I have set out as to the defendant's income, her accumulated debts, her wish to remain in the property, and the fact that the unit was transferred to mother and daughter as joint tenants rather than tenants in common at the time the plaintiff being aged 39 and her mother 69 years of age. 12 I will come to the question of the express agreement in a moment, but I should say at this stage that I do not think there is any ground for the implication into the contract at the terms which are said to be implied; they are not necessary for the agreement and I do not think that it could be said that the facts in any way could support such an implication. 13 The second claim of the plaintiff is that there was a collateral contract going with the transfer under which the plaintiff would borrow $35,000 from Westpac Banking Corporation and pay the same to her mother; that $30,000 would be treated as having been paid in the past, and that the plaintiff would pay whatever was payable to Westpac as a result of the $35,000 loan and that the defendant would have the exclusive occupation of the unit but not be entitled to sever the joint tenancy. It is clear of course that the defendant has had the exclusive occupation of the unit and I think it is perfectly clear that it was never intended that Mrs Anderson, as joint tenant, would exercise the right which she would have at law to occupy the unit. 14 The final claim pleaded is a claim in estoppel on the basis that as a result of the agreements reached as to actions to be taken the plaintiff performed her part of the agreement by borrowing, with her mother, the $35,000 and making that available to her mother for the benefit of her mother, and then herself repaying the $35,000 to Westpac Banking Corporation. It is said that as a result of this, and the representation said to have been made by Mrs O'Donnell that if the borrowing took place then the unit would be transferred to herself and her daughter as joint tenants and not be dealt with without the consent of the plaintiff, then the plaintiff, acting on that representation, acted to her detriment in entering into the obligations which she did, and that therefore her mother should be estopped from proceeding to sever the joint tenancy. 15 It is for the plaintiff to establish the agreement made which she claims. In essence, the agreement which she must make out is an agreement not to sever the joint tenancy. Accepting that the advice was given which Mrs Anderson says was given by the clerk in the solicitor's office, there can be no doubt that the advice was wrong in that it was stated that the share in the unit could not be dealt with without the consent of Mrs Anderson. However, the question is whether or not there was an agreement made which would bind Mrs O'Donnell to that if that advice turned out to be wrong. It is clear that at the time it was given, that advice was incorrect, although I am not certain that the present procedure for joint tenancy was at that time available through the Land Titles Office. It was correct that while the title remained as joint tenants then Mrs O'Donnell could not give away her interest by will. 16 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 continue 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. 17 So far as the claim for estoppel is concerned, in my view there is no possible basis for that. It is difficult to see any detriment to the plaintiff in the events which have turned out other than the detriment which otherwise would arise to her if she lives longer than her mother, which is, of course, likely. However, she has obtained a one half share in the property upon payment at the time of, at the most, $35,000. I do not think it could be said that her interest is less than 50 per cent. There is no doubt that her mother agreed to give her that interest upon the payment which was received, but it does not seem to me that she has in any way acted to her detriment in a way which would require any representation if there were a representation to be made good. 18 In coming to this conclusion I should say that I do not accept the evidence of Mrs O'Donnell that what had happened was only brought to her mind when her daughter said to her after leaving the solicitors "You cannot do anything with the property without my consent." She said she was stunned by that. I do not accept that. I accept that the position was made perfectly clear by the solicitor. 19 It is finally necessary to deal with the cross-claim, but only so far as it appears to make a claim for an interest in the property greater than the defendant would hold as tenant in common with her daughter. A lot of the arguments of counsel for the defendant went to a question of unconscionability which, in my view, does not arise as a result of the decision that I have come to on the contractual question. The only matter which would arise is a claim that the interest of Mrs Anderson should in some way be bound with a trust to ensure that the unit is retained for the benefit of her mother during her lifetime. She accepted that was the intention and that no attention had been given to what might happen if the defendant was not capable of caring for herself. 20 It seems to me that is a claim under which the defendant, having denied that there was any agreement made as to non-severance of the joint tenancy, is trying to have the best of both worlds by claiming some benefit which she would not be entitled to either as joint tenant or as tenant in common and which was never agreed to operate if the basis of co-ownership changed. 21 I tried to point out the risk that might arise in this matter if the plaintiff's claim failed, the risk being that there might be a claim for the appointment of statutory trustees for sale. One can only hope that does not happen, but I see no basis on which there could be a contract alleged that the defendant would be entitled to have the right to sole occupation of the unit for life if the interests were altered without consent or that there is any basis to impose a trust of that nature. 22 The orders are as follows:

Anderson v O'Donnell

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Judgment (8 paragraphs)

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