De Lorenzo v De Lorenzo

The ownership of shares by members as tenants in common

On the one hand, the gift and bequest of a parcel of shares to the children "as tenants in common in equal shares" reflects precise legal language and would ordinarily be construed in accordance with what was described by a very strong Full Court constituted by Herring CJ, O'Bryan, Dean, Sholl and Adam JJ in Re McIlrath, decd [1959] VR 720 at 724, as the "settled rule of construction" that words which have acquired a technical legal meaning as words or terms of art in the law should prima facie be given their strict and technical meaning. The respondent relied on that proposition, which has added force bearing in mind that the will has been prepared by a lawyer who is presumed to know the technical meanings of words of legal import. As the primary judge said at [11], tenancy in common is a concept well known to the law.
However, the position may be somewhat more nuanced than what was said by his Honour at [16] that there is no inhibition to the shares being owned by the siblings as tenants in common in equal proportions; I return to this below.
Nor would I regard what was said in [17] concerning registration not being necessary for transmission of ownership as a complete statement of the position (and I doubt the primary judge intended it to be understood as such). Membership of a company turns on registration, and requires entry of the member's name on the register required to be kept under the Corporations Act 2001 (Cth): ss 231, 168(1)(a) and 169. It may also be necessary (for example, in cases of fraud) to distinguish between registration and an entitlement to registration - see the examples in P Davies and S Worthington, Principles of Modern Company Law (9th ed, Sweet & Maxwell, 2012), pp 985-987. None of this is to deny that the beneficial ownership of a share may be assigned without registration, which I suspect is all the primary judge intended to convey.
In all cases, the company's constitution will be important. That is not only because it has effect as a contract between each member and each other member and the company (Corporations Act, s 140), but also because of s 1070A, which relevantly provides: "Nature of shares and certain other interests in a company or registered scheme (1) A share, other interest of a member in a company or interest of a person in a registered scheme: (a) is personal property; and (b) is transferable or transmissible as provided by: (i) the company's, or scheme's, constitution; or (ii) the operating rules of a prescribed CS facility if they are applicable; and (c) is capable of devolution by will or by operation of law. (2) Paragraph (1)(c) has effect subject to: (a) in the case of a company: (i) the company's constitution (if any); ... (3) Subject to subsection (1): (a) the laws applicable to ownership of, and dealing with, personal property apply to a share, other interest of a member in a company or interest of a person in a registered scheme as they apply to other property; and (b) equitable interests in respect of a share, interest of a member in a company or other interest of a person in a registered scheme may be created, dealt with and enforced as in the case of other personal property."
Thus the company's constitution may regulate the circumstances in which members hold shares as tenants in common. Noting the subordination of subsection (3) to subsection (1), the effect of s 1070A is to import the ordinary rules governing ownership of and dealing with shares, but subject to the constitution.
Shares in private companies constitute a chose in action. I do not see how s 1070A(1)(a) could alter that. The classic statement is that of Lord Greene MR in Re VGM Holdings Ltd [1942] Ch 235 at 241: "A share is a chose in action. A chose in action implies the existence of some person entitled to the rights which are rights in action as distinct from rights in possession, and, until the share is issued, no such person exists. Putting it in a nutshell, the difference between the issue of a share to a subscriber and the purchase of a share from an existing shareholder is the difference between the creation and the transfer of a chose in action."
There are strongly worded statements in legal literature that there cannot be a legal tenancy in common of a chose in action. For example, Halsbury's Laws of Australia states that "[a]t law choses in action can only ever be the subject of joint ownership, but in equity both types of co-ownership are available": Vol 19, "Personal Property", para [315-300]. Interestingly, Halsbury's Laws of England is more circumspect: "As regards choses (or things) in action, it would, however, seem that ownership in common can ordinarily exist only in equity": (5th ed 2013), Vol 80, "Personal Property", para 830. Both passages cite Re McKerrell [1912] 2 Ch 648.
Further, one specialised text states: "It has long been the position that there cannot be a legal tenancy in common over choses in action: the only form of legal co-ownership is joint tenancy. This is confirmed by twentieth-century authority and is accepted by virtually everybody": R Smith, Plural Ownership (Oxford University Press, 2005), p 209.
The citations are to Coke upon Littleton at 198a and Re McKerrell.
Re McKerrell is a first instance Chancery decision. It commences unpropitiously with Joyce J's statement "I may be wrong, but I do not feel any doubt about this case" and contains an expressly obiter statement concerning the effect of an assignment with creditors by one of two persons insured under a life assurance policy. Joyce J said that the assignment could not be effective at law: "There is no assignment under the Judicature Act, and before the Act it is clear that there could not have been a tenancy in common of a legal chose in action, although I need not decide upon that ground." His Lordship's reference was to s 25(6) of the Judicature Act 1873 (UK), whose New South Wales counterpart is s 12 of the Conveyancing Act 1919 authorising the legal assignment of debts and choses in action. Nothing else in the judgment bears upon the proposition for which the decision is cited in Halsbury's Laws of Australia and Halsbury's Laws of England and Plural Ownership.
The primary judge did not enjoy the benefit of submissions on this question of principle. In the parties' written and oral submissions in this Court, it was accepted that there could be a tenancy in common of shares. The passages referred to above were drawn to the parties' attention shortly after judgment on the appeal was reserved, and the parties were invited, if they wished, to supply further submissions. They did so, on 20 October 2020.
The applicants submitted that the impossibility of the legal title to shares being held by tenants in common supported their construction, for two reasons. The first was that since shares could always be held in equity as tenants in common, if that was what the opening words of cl 10 meant, then the declaration in the second half of the clause would never have work to do. The second was that the inability to hold choses in action as tenants in common at law meant that it was "inappropriate to attribute to the testatrix an intention that the shares be held in co-ownership", but rather her intention was "to divide or sever the shares into separate parcels, rather than to create any form of co-ownership".
The respondent contended that: 1. it was not necessary to determine whether shares could be held as tenants in common; 2. there was an established practice of holding shares as tenants in common; 3. Re McKerrell was demonstrably wrong as a universal proposition, bearing in mind the position concerning copyright; 4. Re McKerrell should not be applied to shares, which could be held on a tenancy in common by reason of s 1070A of the Corporations Act and ss 26 and 27 of the Conveyancing Act, and 5. on any view of the matter, the shares could be held on trust for the three siblings as tenants in common, and doing so would maximally achieve the testatrix's intention.
By further submissions dated 5 November 2020, pursuant to leave but on the basis that, so it was said, the respondent's submissions had exceeded the leave granted, thereby entitling the applicants to a right to be heard further, either orally or in writing, the applicants maintained that the Court should not decide whether shares could be held at common law on a tenancy in common. Perhaps inconsistently with what had initially been put in writing, but consistently with the respondent's written submissions, they said that "the Court should proceed on the basis that a tenancy in common in respect of shares is possible at least in equity, which is common ground between the parties". They reiterated what had previously been put as to the declaration having no contingent operation if the respondent's construction were upheld, and maintained that the declaration was inconsistent with the possibility that the corporate constitution might bar a tenancy in common.
The question of principle is important, with potentially far-reaching consequences. Although there was no evidence of this, I would accept the respondent's submission that decisions such as Lewin v Lewin [2019] NSWSC 380 (see at [17] and [25]-[26]) and Neilan v Neilan [2019] NSWSC 66 (see at [1] and [6]) sustain an inference that the practice of holding shares as tenants in common "is a practice that is not rare in Australia". Moreover, the question was not raised at first instance, and has not been the subject of debate in this Court, even in written submissions, and both parties have submitted that this Court need not and should not resolve it. In the circumstances, a cautious approach is warranted. Conscious of the limitations necessarily flowing from the way the point has arisen, I proceed on the following basis.
First, I am persuaded that the proposition that a chose in action cannot be held by tenants in common is not universally true. For centuries, copyright has been co-owned by tenants in common. Lindgren J explained in Seven Network (Operations) Ltd v TCN Channel Nine Pty Ltd (2005) 146 FCR 183; [2005] FCAFC 144 at [20] that: "Although the circumstances may indicate otherwise, ordinarily co-owners of copyright hold as tenants in common, not as joint tenants: Lauri v Renad [1892] 3 Ch 402 at 412-413; Cescinsky v George Routledge & Sons Ltd [1916] 2 KB 325; Prior v Lansdowne Press Pty Ltd [1977] VR 65 at 68; Prior v Sheldon (2000) 48 IPR 301 at [79]. In the absence of the consent of the other co-owner, one co-owner is neither entitled to do an act comprised in the copyright, nor to grant a licence to a third party to do such an act, and the non-consenting co-owner is entitled to an injunction against the infringing co-owner or putative licensee: Lauri v Renad at 413; Cescinsky at 329-320."
Edmonds J, although dissenting in the result, agreed with this aspect of Lindgren J's reasons (at [114]), as did, more recently, the joint judgment of a Full Court comprising Greenwood, Charlesworth and Burley JJ in Chhabra v McPherson as Trustee for the McPherson Practice Trust [2019] FCAFC 228 at [74]. See M Vitoria et al, The Modern Law of Copyright and Designs (4th ed, LexisNexis, 2011), Vol 1, pp 965-967.
But copyright may be different from company shares. While s 196 of the Copyright Act 1968 (Cth) resembles s 1070A insofar as it provides that copyright is personal property which is transmissible by assignment, by will and by operation of law, s 196(2) goes on to confirm the divisibility of copyright, so that an assignee may receive only some of the exclusive rights, perhaps limited geographically or temporally. There has also been a long historical tradition of copyright, at common law and under statute, being divided - see the discussion of the 17th and 18th century "congers" in I Alexander, Copyright Law and the Public Interest in the Nineteenth Century (Cambridge University Press, 2010), p 20.
Secondly, practical considerations favour the proposition that a chose in action may not be held by co-owners as tenants in common. Take a simpler example of a chose in action, namely, a bank account. How at law are co-owners who are tenants in common to enjoy the property? The operation of a joint bank account is readily understood - both customers can make withdrawals, with the survivor taking the remaining balance, as described in Russell v Scott (1936) 55 CLR 440 at 450-451; [1936] HCA 34. But how would a bank account co-owned by tenants in common, whether in equal or unequal shares, operate? How could both co-owners enjoy the whole of the co-owned property?
As will have been seen from the reasons of Lindgren J reproduced above, it is desirable not merely to assert that a chose in action may be held by tenants in common, but also to explain what that means. How would three tenants in common owning a parcel of shares exercise the right to inspect company documents? To be given notice of general meetings? To appoint a proxy to vote on their behalf? To apply for leave to commence proceedings under s 237 of the Corporations Act? The answers to those questions need not necessarily be the same; consider by way of analogy that an equitable assignor of part of a debt may apply for a winding up order without joining the assignee, but must join the assignee if bringing an action to recover the assigned debt, as Lord Hoffmann explained in Parmalat Capital Finance Ltd v Food Holdings Ltd [2008] UKPC 23; [2009] 1 BCLC 274 at [6]-[8]. It may be possible to derive answers to those questions, perhaps by analogy to what has been established in relation to copyright, but this was entirely unexplored.
Thirdly, as presently advised authority is scant. Little can be taken from what was said in Re McKerrell. I respectfully think that the more cautious formulation in Halsbury's Laws of England is more accurate than what is said in Halsbury's Laws of Australia. I also consider that any analysis of the issue must turn on statute. The Corporations Act regulates the ability to own and deal with shares, and, more generally, the United Kingdom and New South Wales have adopted divergent paths concerning the holding of property by tenants in common, following the enactment of the Law of Property Act 1925 (UK) and ss 66F and 66G of the Conveyancing Act 1919 (NSW) in 1930. Insofar as reliance might be placed upon Coke upon Littleton, that was written centuries before the rise of the joint stock company, and there is no reason to think that universal statements about choses in action continue to apply to Australian shares, many aspects of which have been governed by statute.

Construction of cl 10 of the will

It is not necessary to answer any of the questions mentioned above in order to resolve this appeal, and for the reasons already given, it is inappropriate to do so. I have concluded that the primary judge was correct to dismiss the summons.
The respondent fairly acknowledged that no construction of the clause would reconcile all aspects of its meaning. I agree. That of course does not stand in the way of the Court imputing to the clause that which, even slightly imperfectly, best accords with the effect which the testatrix is taken to have intended. In Re Pulbrook; Pulbrook v Pulbrook (1937) 37 SR (NSW) 345 at 351, Jordan CJ said that in cases of ambiguity it was legitimate to have regard to what a testator was likely to have intended. A similar point was made by Barton J in Clerk v Equity Trustees Executors and Agency Co Ltd (1913) 15 CLR 625 at 632; [1913] HCA 8: "On the words as they stand it is obvious that there is an ambiguity; and an ambiguity may be solved by reference to the context, and, where it is not solvable by other means, it is proper to resort to the more reasonable construction."
Barton J went on to observe at 633 that the construction he favoured represented: "a view which certainly does no violence to the words used, and which is conformable to the reasonable treatment of the clause, because, whatever is done, some words have to be disregarded."
Griffith CJ reasoned to similar effect at 630, Gavan Duffy J agreed in the result, as did Isaacs J for slightly different reasons.
The principle in Re Pulbrook and Clerk is sufficient to resolve the question of construction.
First, it is plain that the testatrix did not intend for her children to own the shares in the companies jointly, so that unless the joint tenancy were severed, the survivor would succeed to them in their entirety. The use of the term "tenants in common" is inconsistent with that.
Secondly, an equal interest in the parcels of shares in DLHCR and DLA may be achieved by the three executors holding the shares on trust for themselves as tenants in common in equal shares. That substantially accords with the language of the will. True it is that it does not give full weight to the words that Jo-Ann "is to receive more of such shares"; however, it is to be borne in mind that the overriding testamentary intention manifested throughout the will is equality of distribution of the shares to all three children, and that the words on which the appellants focus are qualified by the words "so as to achieve the intent of this Clause".
Thirdly, that construction gives work for the declaration in cl 10 to do, in the event that the corporate constitution prevented co-ownership of shares. Such a declaration might facilitate a solicitor drafting a will involving a bequest of shares in a private company without needing to check the constitution, as well as guarding against the possibility of a subsequent change to the constitution having an unintended impact on the operation of a bequest.
Fourthly, there is force in the appellants' submission that the declaration in the second half of the clause presupposes the transmission of a legal interest in each of the shares to one of the siblings. But it is going altogether too far to impute an intention that Jo-Ann was to receive both of the shares, and her brothers none. I respectfully agree with what the primary judge said at [15]. To reiterate, the words upon which Jo-Ann places reliance are qualified by the concluding words "so as to achieve the intent of this Clause". The natural way of reading those words is to achieve an intent of parity or equality, as is plain from the opening words of the clause, and is confirmed by most of the other clauses in the will. It would be quite inconsistent with the closing words to construe the clause so as to give the entirety of the shares to Jo-Ann. That would be to impute an intention to the testatrix whereby her shares were to be divided equally amongst her three children, except in the case of shares in any companies in which she owned one or two shares, in which case the entirety of the shareholding, irrespective of its value, would pass to Jo-Ann.
It is to be borne in mind that when the will was drafted, there were precisely two shares held by the deceased, but it could not be known at the time of her death how many shares would have been issued in DLHCR and DLA. I see no rational basis for imputing a testamentary intention to benefit the deceased's children differentially, depending upon the happenstance that more shares have, or have not, been issued.
For those reasons, while there should be a grant of leave, the appeal should be dismissed. There is no reason for costs not to follow the event.
WHITE JA: Clause 10 of the deceased's will is set out in the reasons for judgment of Leeming JA. It was common ground that the reference in that clause to clause 9 should have been to clause 10.
As Leeming JA observes, it was common ground that the deceased owned two shares in each of De Lorenzo Hair and Cosmetic Research Pty Ltd and De Lorenzo Australia Pty Ltd. As Leeming JA states (at [10]), this Court was told that the companies' shareholding was that each of De Lorenzo Hair and Cosmetic Research Pty Ltd and De Lorenzo Australia Pty Ltd held 100 shares in the other company. Christopher held 100 shares in each company. A cousin, Anthony, held 101 shares in each company, and the deceased held two shares in each company. Each share was fully paid and of par value of one dollar.
Contrary to the submissions made on appeal, the deceased's shareholding was not de minimis. It was potentially valuable as it had the potential to break any deadlock between Christopher and Anthony.
The object of construction of a will is to give effect to what can be ascertained, having regard to admissible extrinsic evidence, the testatrix intended by the words she used (Fell v Fell (1922) 31 CLR 268 at 273-274; [1922] HCA 55; Perrin v Morgan [1943] AC 399 at 406, 416). The intention of the testatrix is to be determined from the language of the will read in the light of the circumstances in which it was made. The Court is entitled to sit in the "testatrix's armchair" to understand the language she employed (Hatzantonis v Lawrence [2003] NSWSC 914, [7] ff (Bryson J)).
Prima facie, technical legal words and expressions used in a will are to be given their technical meaning (Winter v Perratt (1843) 6 Man & G 314; 134 ER 914). This is particularly so if the will has been professionally drawn.
Clause 10 provides that the deceased's shares in the two companies were to be given to her three children as tenants in common in equal shares. It also makes provision for how the shares are to be divided if "in the division of such shares in accordance with the terms of this Clause … the shares are not divisible by three".
Although partition of property held by tenants in common was not an available remedy at common law (Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) 177 CLR 635 at 644; [1993] HCA 45) statute has long provided the remedy of partition, that is, division, of property held in co-ownership (other than chattels) by court order (Conveyancing Act 1919 (NSW) s 66G(1)).
The will does not direct the division of shares between the named beneficiaries. It recognises the availability of the statutory remedy of partition and declares how such a partition is to be effected if the shares are not divisible by three.
Partition (that is, division) in accordance with clause 10 of the will could readily be effected under s 66G by the court's ordering the co-owners to vote in favour of a share split of the ordinary shares on issue from shares to a par value of one dollar to, say, a par value of one cent. Such a share split would not affect the members' entitlement to vote, nor to receive dividends, nor their return on a winding-up. Article 37 of the company's constitution incorporates table A of schedule 3 of the Companies (New South Wales) Code. Article 37 provides: "Alteration of capital 37. The company may by resolution - … (c) subdivide all or any of its shares into shares of smaller amount that is fixed by the memorandum but so that in the subdivision the proportion between the amount paid and the amount (if any) unpaid on each such share of a smaller amount is the same as it was in the case of the share from which the share a smaller amount is derived; …"
In Beck v Henley [2014] NSWCA 201; 11 ASTLR 457 the deceased left two "A" class shares and one "B" class share in a private company to two residuary beneficiaries. This court upheld the decision of the primary judge that, under the principle in Saunders v Vautier (1841) Cr & Ph 240; 41 ER 482, one of the beneficiaries was entitled to call for a transfer of half of the shares over the other beneficiary's opposition. To give effect to that right the primary judge (Slattery J) held that the trustee who was the registered holder of the shares was required to transfer the successful plaintiff's share of the "A" class shares to him and "would be required to vote on behalf of [the] estate at a general meeting of [the company] to split the 'B' class shares to facilitate the transfer of 50 per cent of the 'B' class capital to [the plaintiff]. [He] would be justified in transferring [the defendant's] 'A' and 'B' class … shares to her on the same basis" (Michael Victor Henley; In the Estate of Hedy Jadwiga Weinstock and Leo Arie Weinstock [2013] NSWSC 975; 10 ASTLR 1 at [127]).
These orders were upheld on appeal to this court.
Because of the availability of the statutory remedy of partition, there is no inconsistency between the gift of the shares to Vincent, Christopher and Jo-Ann as tenants in common in equal shares and the declaration as to how the division of such shares should be effected if the shares are not divisible by three. The intent of the clause is that all three children should share the benefits attaching to the shares as nearly as possible equally, but on a division of the shares, Jo-Ann should receive more of such shares than Vincent or Christopher to achieve that intent. Both the intent of equal ownership, and approximately equal division, so far as possible, would be achieved by a splitting of the shares on partition.
Because one of the co-owners, Christopher, and the executors and trustees of the will (Vincent, Christopher and Jo-Ann), who are also the beneficiaries of the gift in clause 10, would between them command a majority of the voting power in both companies, I see no reason that a court acting under s 66G(1) could not order the parties to vote in favour of a share split in order to achieve a partition, if that were necessary.
Of course, the parties are not bound to partition the shares. They can enjoy the shares at least as equitable tenants in common for so long as they all wish. I find it unnecessary to decide whether the legal title to shares held by co-owners must be held by them as joint tenants, or whether the legal title to the shares can be held as tenants in common. There is no dispute that the equitable title to shares held in co-ownership can be held by the co-owners as tenants in common, as Santow J held in Rule v Mallon [2000] NSWSC 346; (2000) 10 BPR 18,005. (See also Re Wood Trading Co Ltd (1927) 28 SR (NSW) 106 at 116-117 and F C Hutley "Conveyancing Act 1919 - 1938 (NSW), s 26 - Application to Choses in Action" (1939) 13 ALJ 230" in relation to the application of s 26 of the Conveyancing Act.)
Section 1070A of the Corporations Act 2000 (Cth) is quoted by Leeming JA (at [18]). Section 1070A(3)(a) provides that subject to s 1070A(1) the laws applicable to ownership of personal property apply to a share as they apply to other property. Section 1070A(1) provides that a share is personal property and is transferable or transmissible as provided by the company's constitution and is capable of devolution by will or by operation of law.
In Helmore's Commercial Law and Personal Property in New South Wales (10th ed, Lawbook Co 1992) by Carter, Lane, Tolhurst and Peden, the learned authors said (at 58): "Personal estate may be owned not only in severalty, that is to say, by single persons, but also jointly, or in common, by two or more persons. Joint ownership and ownership in common of personal estate differ from one another in like manner as joint tenancy and tenancy in common of real estate, and are in general subject to the same rules as joint tenancy and tenancy in common."
The learned authors stated that there can be no ownership in common at law of a chose in action (at 61): "A may owe $100 to B and C jointly, or A may owe $50 to B and $50 to C, but A cannot owe $100 to B and C in such a way that B and C alone may have an assignable or severable interest. In equity however, there may be ownership in common of a chose in action, and on the death of one, the deceased's share may, in equity, belong to the representatives instead of accruing beneficially to the survivor (citing Re McKerrell; McKerrell v Gowans [1912] 2 Ch 648.)"
There is no dispute that legal title to personal chattels can be held by co-owners as tenants in common, although the statutory remedy of partition is not available. The statutory remedy of partition is available in the case of shares (Beck v Henley at [40]). It is at least arguable that the effect of s 1070A(3)(a) is to enable the legal title to shares to be held in co-ownership either as joint tenants or tenants in common.
Like Leeming JA, I see no need to decide whether the legal title to shares held in co-ownership can only be held by the co-owners as joint tenants, even though equitable ownership will be held by them as tenants in common.
As Leeming JA observes, the suggested principle that choses in action can only be the subject of joint ownership and not ownership as tenants-in-common, appears to be derived from Coke's Commentary upon Littleton. The relevant passages are at sections 314-316 (also referred to as sections 197a-198b). The passage in Coke on Littleton at s 314 does not support the proposition that shares could not be held by co-owners as tenants-in-common. Of course, Coke was not concerned with the co-ownership of shares. But at s 314 he considered how tenants-in-common of lands they held in fee, who gave the land to a man in tail or let it to one for a term of life, for a certain rent, a pound of pepper, and a hawk or a horse, could recover, if the rent, the pound of pepper, and the hawk (or horse) were not paid or delivered. In the case of the rent or the pound of pepper, the two tenants-in-common were to have "two assises", but for the hawk (or horse) but one assise. This was because the rent or the pound of pepper could be divided between them and each was only entitled to a half of the rent or a half of the pound of pepper, but as to the hawk (or horse) which could not be severed, there should be but one assise in which they sued jointly. Similarly, in a case of damages for trespass, they should sue jointly (section 315) (Charles Butler (ed), Commentary upon Littleton (J & W T Clarke, 19th ed, 1832); see to same effect Henry Cary (ed), A Commentary on the Tenures of Littleton (Saunders and Benning, 1829) at p 390-392)
A share is a chose in action because it is the member's right to enforce the terms of the contract between the member and the company contained in the company's constitution. Prima facie, it is a right which cannot be severed between separate co-owners in the same way as a covenant to pay rent or to deliver a pound of pepper. The right to vote, must be exercised by only one of the co-owners. Typically, the company's constitution will provide that the right to vote is to be exercised by the first named co-owner. In the present case, the Articles provided that: "In the case of joint holders the vote of the senior who tenders a vote, … shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members."
It might be doubted that Coke on Littleton is authority for the proposition that a chose in action cannot be held by co-owners as tenants in common. Coke's commentary rather suggests that a co-owner of a chose in action, where co-ownership is held in common, can sue for his or her several claim if the subject matter of that claim is divisible, but otherwise, the tenant-in-common must join his or her co-owners in the suit (Blackborough v Graves (1673) 1 Mod Rep 102; 86 ER 765; Commonwealth Bank of Australia v McDonald [2000] NSWSC 553; 10 BPR 18,111 at [42]-[43]).
On analysis, it might be found that the issue is not whether a chose in action can be held by co-owners as tenants in common, but how the chose in action is to be enforced, and whether joinder of the other co-owners is necessary for enforcement of the chose in action. If the latter is the correct view, then there should be nothing to preclude the holding of both the legal and equitable interest in shares by co-owners as tenants-in-common.
However, as Leeming JA also concludes, it is not necessary to decide this question.
I agree with the primary judge that where clause 10 refers to the "intent of this clause" that intent was to bring about an equal share of ownership of the shares by each beneficiary so far as possible.
I agree with Leeming JA that the applicant should be granted leave to appeal. The appeal should be dismissed with costs.

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Cases Cited (21)

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