Frederick Rix v Lisa Mahony & Ors

Judgment 1The plaintiff, Frederick George Rix, seeks orders in relation to a share of the proceeds of sale of a property in Rosebery, New South Wales (the Property). The plaintiff and his wife, Mavis Harriett Rix, acquired the Property in 1975. Mrs Rix passed away in 2010. Their daughter, Lisa Jane Mahony, is the first defendant and her husband, Dennis Anthony Mahony, is the second defendant (to whom I will refer jointly as "the defendants"). 2The Property was sold on 28 July 2011 pursuant to an order under section 66G of the Conveyancing Act 1919 made by Forster J: Rix v Mahony [2009] NSWSC 675 (the Earlier Proceedings). The trustees appointed to sell the Property, the third and fourth defendants, hold the sale proceeds. 3By Further Amended Summons filed on 25 July 2011, the plaintiff seeks a declaration that he is entitled to 50% of the gross proceeds of the sale of the Property. The plaintiff alleges that Mrs Rix held a 25% beneficial interest in the Property as a joint tenant with him and upon her death, he, as the surviving joint tenant, became seized of the whole of their joint interest in the Property. In the alternative, the plaintiff seeks a declaration that he is entitled to 25% of the gross proceeds of the sale. 4The defendants claim that as a consequence of Forster J's judgment in the Earlier Proceedings the issue of the nature and extent of the plaintiff's interest in the Property is res judicata or, alternatively, the plaintiff is estopped from contending that a joint tenancy existed between himself and Mrs Rix . The defendants also claim that any beneficial interest the plaintiff and Mrs Rix held in the Property was held as tenants in common and not as joint tenants and any interest held by Mrs Rix did not vest in the plaintiff upon her death. The defendants concede that if the plaintiff is successful in his alternative claim for 25% of the gross proceeds of sale of the Property the declaration sought in prayer 4(a) of the Further Amended Summons should be made with an order that the trustees account to the plaintiff for those proceeds. Background 5On 26 September 1975 the plaintiff and Mrs Rix acquired the Property for $39,500 as joint tenants. The plaintiff and Mrs Rix lived in the Property from early 1975 until 2009 but their relationship declined after the plaintiff was charged with a number of criminal offences in 1990. It appears that by early 1992 the plaintiff and Mrs Rix considered themselves to be "separated", although still living in the Property. 6In early 1983 the defendants were looking to purchase a property but, on the plaintiff's suggestion, decided to construct a second storey on the Property and they subsequently resided in that part of the Property. The defendants funded that construction and the plaintiff and Mrs Rix and the defendants reached agreement that in recognition of that funding a portion of the legal title to the Property would be transferred to the defendants. There was controversy about the terms of that agreement that is referred to later. In any event by Registered Transfer dated 15 July 1983 the plaintiff and Mrs Rix transferred a four fifths share in the Property to themselves as joint tenants and as tenants in common with the defendants to whom the remaining one fifth share in the Property was transferred for the stated consideration of $27,000. 7In early 1993 the defendants established a business in respect of which they had difficulty obtaining a loan facility. They approached the plaintiff for assistance and advised him that the only way that they could borrow the required funds was "if we have the house in our names". On 19 February 1993 the plaintiff and Mrs Mahony signed a document in the following terms: TO WHOM IT MAY CONCERN This is a personal agreement between Frederick George Rix and Lisa Jane Mahony. The agreement is that as of todays date, four people own twenty-five percent each of the [Property]. These people being Frederick George Rix, Mavis Harriett Rix, Dennis Anthony Mahony and Lisa Jane Rix. As of Monday, February 22, 1993, the fifty percent shares of Frederick George Rix and Mavis Harriett Rix will be signed over to Lisa Jane Mahony, this being for the purpose of Lisa and Dennis to obtain a loan to start their business. I have agreed to sign this declaration stating that I owe Frederick George Rix either of the following, that being of his choice. a) The price of $150,000.00 being for his share of the [Property] paid at his request: or; b) That if any or all of the above listed four (4) wishes to sell the [Property] each receives his/her twenty-five percent value of the home. I do this in good trust. 8By Registered Transfer dated 11 March 1993 the plaintiff and Mrs Rix, as transferors of the four fifths share, and Mr and Mrs Mahony, as transferors of the one fifth share, transferred the Property as to a three quarter share to Mrs Mahony and a one quarter share to Mr Mahony for "Nil" consideration. 9By will dated 14 January 2009 Mrs Rix left the whole of her Estate to her son and Mrs Mahony as tenants in common in equal shares. Earlier Proceedings 10The plaintiff commenced the Earlier Proceedings in 2008 against Mr and Mrs Mahony in which he claimed a 25% beneficial interest in the Property and a beneficial interest in the business that had been established by Mr and Mrs Mahony and operated through corporate entities that they owned and controlled. Mrs Rix was joined as a defendant shortly before the trial but took no part in the proceedings. Forster J heard the Earlier Proceedings on 14, 15 and 16 July 2009. On 14 July 2009, His Honour ordered that all questions pertaining to the rights and obligations of Mrs Rix in relation to any of the other parties be decided separately from and after the trial of all other questions raised in the proceedings. 11Forster J dealt with the controversy in respect of the terms of the agreement that was reached in 1983 when the defendants funded the construction of the second storey to the Property. The plaintiff had claimed that the defendants' entitlement to a portion of the legal estate was dependant upon the amount of the construction costs. The plaintiff claimed that the parties agreed that they would work out a percentage basis having regard to the value of the Property. The defendants claimed that their equity in the Property was to be measured by reference to the cost they would incur and that it was agreed in advance that this would be one third to the plaintiff, one third to Mrs Rix and one third jointly to the defendants. 12There was also conflicting evidence in relation to the content of the 1983 Transfer. The defendants claimed that they remonstrated with the plaintiff about the form of the Transfer only to be told that the reason for it recording only a one fifth interest, as opposed to a one third interest, was to save on stamp duty. They claimed that notwithstanding the content of the Transfer the plaintiff agreed that they were entitled to a one third share of the Property. His Honour rejected the plaintiff's claim that he had agreed with the defendants that a one fifth share was "fair". 13His Honour found that at the time of the registration of the Transfer in 1983 in accordance with the agreement reached between the parties "the registered proprietors held the beneficial interest in the property on trust as to a 1/3rd interest for Mr Rix, a 1/3rd interest to Mrs Rix and a 1/3rd interest to Mr and Mrs Mahony between them": at [30]. 14There was also evidence before Forster J in relation to Mr and Mrs Mahony paying various debts owed by the plaintiff. His Honour held that in addition to the thirty three and a third percent which he considered Mr and Mrs Mahony had "earned" by paying for the extensions to the Property, they also acquired a 16% of 18.3% interest by virtue of paying those debts, meaning their interest amounted to either 49.3% or 51.6% of the Property. His Honour rounded that figure to 50%: at [42]. 15His Honour then dealt with the effect of the Transfer dated 19 February 1993 and concluded that there was little doubt that it was intended that Mr Mahony to whom a one quarter share of the Property was transferred at law was to hold that share for himself absolutely: at [53]. His Honour referred to the position of Mrs Mahony being more complicated noting that she was entitled to a one quarter share in the beneficial ownership of the Property prior to the transfer to her of the legal title of the three quarter interest. His Honour noted that the issue that arose was "how the additional one half share (belonging as to 1/4th share to Mr Rix and to the other 1/4th share to Mrs Rix) should be treated": at [54]. 16His Honour was satisfied that the presumption of advancement as between the plaintiff and Mrs Mahony did not apply and was satisfied that the plaintiff had made it clear that he expected Mrs Mahony to hold his beneficial interest in the Property on a continuing trust for him. His Honour also referred to the presumption of advancement as between Mrs Rix and Mrs Mahony but said that he was in no position to determine and did not determine whether that presumption had been rebutted. His Honour noted again that Mrs Rix did not take part in the proceedings and that "the determination of the question of her interest in the property has been postponed to a later hearing": at [59]. His Honour said that he was in "no position to determine, one way or another, the state of her interest in the property": at [59]. 17On 22 July 2009 Mrs Rix wrote a letter to the Court advising that she "did not wish to participate in these proceedings" and "would like it made known to the Court that it is my intention not to pursue this matter as it is my belief I can come to a mutual arrangement with my daughter, Lisa, and my son-in-law, Dennis, that will not involve the Court". 18Forster J's judgment delivered on 24 July 2009 included the following: [62] In light of the foregoing, I am of the opinion that: (a) Mr Mahony holds his 1/4th legal interest beneficially for himself; and (b) Mrs Mahony holds her 3/4 legal interest upon trust: (i) as to a 1/4 interest in the property upon trust for Mr Rix; and (ii) as to a 1/4 interest in the property for herself absolutely. [63] I make no finding as to the manner in which Mrs Mahony holds the remaining 1/4 interest in the property, and in particular whether she holds it for herself absolutely or in trust for Mrs Rix or in some other way or in some other proportion. 19His Honour rejected the plaintiff's claim for a beneficial interest in the defendants' business and referred to the hope that the parties would be able to agree on the mechanics of how their financial relationship should be disentangled. His Honour said: [69] At the same time, I expressed the hope that some agreement may be reached between Mr and Mrs Mahony and Mrs Rix in relation to Mrs Rix's interest in the subject property, particularly given the continuing closeness between Mrs Rix and her daughter, Mrs Mahony. 20His Honour then stood the proceedings over for further directions on a date to be arranged with his Associate. On 25 August 2009 his Honour heard further argument in relation to the orders that should be made together with the application for the sale of the Property pursuant to s 66G of the Conveyancing Act . His Honour made a declaration that Mrs Mahony "holds her three-quarter legal interest" in the Property "as to a one-quarter interest" on trust for the plaintiff. His Honour made orders for the appointment of the trustees, the vesting of the Property in the trustees and for the sale of the Property. There was no mention in the ex tempore reasons of Mrs Rix's interest in the Property and there was no reference to the letter that Mrs Rix had written to the Court. These Proceedings 21The plaintiff commenced these proceedings on 17 March 2011. They were heard on 19 and 20 September 2011 when Mr W Washington, of counsel, leading Mr BBP Palmer, of counsel, appeared for the plaintiff and Mr G Kennett SC, leading Ms F Ramsay, of counsel, appeared for the defendants. Res Judicata 22The defendants submitted that although Forster J made the Order on 14 July 2009 for the separate trial of Mrs Rix's rights in relation to the Property, final orders were made on 25 August 2009 without returning to the separate question. It was submitted that in those circumstances and taking into account the nature of the orders made by Forster J without reference to the nature of Mrs Rix's interest in the Property, the issues in relation to the size and nature of the plaintiff's beneficial interest in the Property are res judicata and he is now precluded from contending that he is other than the sole beneficial owner of a 1/4 interest in the Property. It was submitted that the outcome for which the plaintiff contends in these proceedings is inconsistent with Forster J's adjudication of the plaintiff's interest in the Property in the Earlier Proceedings. 23Mr Washington submitted that there is no issue of res judicata because in the Earlier Proceeding the plaintiff only sought declaratory relief in respect of his interest in the Property and made no claim regarding Mrs Rix's interest. It was also submitted that at the time of the Earlier Proceeding Mrs Rix was still alive and Mr Rix had no standing to agitate his claim for a 50% interest in the Property arising from the right of survivorship and consequently it is reasonable for the plaintiff to now make that claim. It was submitted that there was no issue in respect of the plaintiff's entitlement to the additional one-quarter interest of the Property as the survivor to a claimed joint tenancy. This has not been previously decided. 24This is not a situation in which a judicial determination directly involving an issue of fact or of law disposes once and for all the particular issue, so that it cannot afterwards be raised between the same parties or their privies: Blair v Curran (1939) 62 CLR 464 per Dixon J, as his Honour then was, at 531. I am satisfied that Forster J did not decide the issue of Mrs Rix's interest in the Property. Nor could he decide the issue now raised by the plaintiff that only arises by reason of Mrs Rix's death. His Honour did not decide on what basis Mrs Mahony holds that 1/4 interest in the Property that is additional to her own 1/4 interest and the 1/4 interest that he decided Mrs Mahony held on trust for the plaintiff. The explicit statement in paragraph [63] of his Honour's judgment that he made no finding as to whether Mrs Mahony holds that interest "for herself absolutely or in trust for Mrs Rix or in some other way or in some other proportion" combined with the limited declaratory relief that was made in the Orders of 25 August 2009 supports the finding that there is no res judicata in respect of the plaintiff's present claim in consequence of Mrs Rix's death. The fact that there was an order made under s 66G of the Conveyancing Act for the sale of the Property does not change that position. The plaintiff is not precluded from bringing the proceedings on the basis of res judicata. Anshun Estoppel 25Mr Kennett submitted that the appropriate time for the plaintiff to have contended that he held a joint 50% interest in the Property with Mrs Rix was in the Earlier Proceedings and that in accordance with the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 the Court should find that the plaintiff is now estopped from litigating that issue. In support of this submission Mr Kennett also relied upon the following passage of what the Vice-Chancellor, Sir James Wigram, said in Henderson v Henderson (1843) 67 E.R. 313 (referred to in Anshun at 598): The Court requires the parties to...litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. 26Mr Kennett submitted that questions of whether a joint tenancy existed between the plaintiff and Mrs Rix were very closely 'bundled up' with the interests that were litigated in the Earlier Proceedings. It was submitted that the present proceedings arise from similar events to those considered by Forster J and the plaintiff could have sought a declaration that he held his interest in the Property as a joint tenant with Mrs Rix. It was submitted that if he had done so, the parties would have had the benefit of Mrs Rix being available to give evidence in respect the alleged joint tenancy. Mr Kennett contended that it was unreasonable, in the Anshun sense, for this issue to now be raised, not having been raised before Forster J. 27Mr Washington repeated his submission that as Mrs Rix was still alive at the time of the Earlier Proceedings the plaintiff had no standing to agitate his claim for a 50% interest in the Property arising from the right of survivorship. That is so but Mr Kennett's submission is that the plaintiff could have sought a finding in the Earlier Proceedings as to the nature of the estate that he held - either as a joint tenant or otherwise. That would have been a matter in respect of which he did have standing. The plaintiff's entitlement to a larger share of the Property is dependent upon a finding that he and Mrs Rix held their respective interests in the Property as joint tenants. There is no doubt that such a declaration could have been sought but at the time of the Earlier Proceedings the focus of the parties was different. It is Mrs Rix's death that has given rise to the issues in this litigation. 28I am not satisfied that it is unreasonable for the plaintiff to bring these proceedings. The plaintiff is not estopped from bringing these proceedings. Joint Tenancy? 29The plaintiff submitted that from the date of the purchase of the Property he and Mrs Rix were joint tenants and that notwithstanding a transfer away of the legal estate, there remained an equitable estate in an undivided share in the Property of himself and Mrs Rix as joint tenants. It was submitted that on Mrs Rix's death on 20 October 2010 the plaintiff succeeded to her undivided equitable one-quarter share in the Property. 30The defendants submitted that the existence of a legal joint tenancy between the plaintiff and Mrs Rix prior to the 1993 Transfer is irrelevant. It was submitted that the question that now arises is whether the equitable interests that arose upon the Transfer, by way of resulting trust over Mrs Mahoney's interest in the Property, include an interest held by the plaintiff and Mrs Rix as joint tenants. It was submitted that an affirmative answer to that question would require a finding that when the plaintiff and Mrs Rix transferred their four-fifths legal interest in the Property to the defendants they each intended whatever equitable interest they retained to be held upon a joint tenancy. 31The defendants submitted that the correct approach is to ask what interests were created by the operation of equitable principles when the transfer of the legal interest took affect. The particular question is whether an equitable joint tenancy arose as between the plaintiff and Mrs Rix at that time. It was submitted that the particular equitable interests that predated the transfer are not relevant or no longer present at the time of the transfer of the legal estate to the defendants. The defendants submitted that there has been a disposition by the plaintiff and Mrs Rix of an equitable interest and that equity will follow the law, being s 26 of the Conveyancing Act , and accordingly their beneficial interest is held as tenants in common and not as a joint tenants. 32In this regard the defendants relied upon the decision in Delehunt v Carmody (1986) 161 CLR 464. In that case the respondent Mrs Carmody was the widow of Mr Carmody from whom she had been estranged for forty-one years at the time of his death in 1980. At the time of his death Mr Carmody and Miss Delahunt (to whom I will refer as "the appellant" although she had died before the determination of the appeal in the High Court and the administrator of her estate conducted the appeal) had been living together "as man and wife" for thirty-one years. The deceased and the appellant had contributed equally to the purchase price of the property in which they lived, although the deceased was the registered proprietor. This was done on the basis of an express oral agreement that they would own the property in equal shares and that it would be put in their joint names in due course. The deceased died intestate and letters of administration were granted to the respondent and the property was transferred into her name. The respondent made a demand on the appellant to vacate the property. The appellant lodged a caveat and the respondent commenced proceedings for its removal. The appellant, by cross-claim, sought a declaration that the respondent held the property on trust for her absolutely. 33At first instance a declaration was made that the deceased held the property on an express trust for himself and the appellant in equal shares although the question of whether the property was held as joint tenants or tenants in common was not discussed. The Court of Appeal allowed the respondent's appeal and held that before his death, Mr Carmody held the property on trust for himself and the appellant as tenants in common in equal shares on the basis that s 26 of the Conveyancing Act displaced the equitable presumption that when two persons advance equally the purchase price of a property they hold it as equitable joint tenants (the equitable presumption). That section provides, subject to some exclusions, that the disposition of the beneficial interest in any property (with or without the legal estate) to or for two or more persons, is deemed to have been made to or for them as tenants in commons and not as joint tenants. 34The issue before the High Court was whether the Court of Appeal had erred in concluding that the section displaced the equitable presumption. In tracing some of the history of the equitable presumption Gibbs CJ, with whom Wilson, Brennan, Deane and Dawson JJ agreed, said at 470: At common law in England before the reform of the law of property in 1926, if land was conveyed to two or more persons a joint tenancy of the legal estate was created, unless either one of the four unities (of estate, time, possession and interest) was absent, or words of severance were employed: see Megarry and Wade, Law of Real Property , 5 th ed. (1984), pp 424-425, where it is explained that the presumption at law in favour of a joint tenancy had its origins in the fact that in earlier times a joint tenancy was preferable to a tenancy in common, both to feudal lords and feudal tenants and conveyancers. In this respect equity did not follow the law - in general, equity preferred tenancies in common, probably to give effect to the maxim "equity is equality". 35The Chief Justice referred to the distinction that equity drew between circumstances where there had been equal contributions to the purchase price and where there had been unequal contributions to the purchase price. In the former the purchasers took their beneficial interest as joint tenants and in the latter they took as tenants in common: at 471-472. His Honour observed that the position in New South Wales had changed since the enactment of s 26 of the Conveyancing Act so that purchasers who contribute equally to the purchase price take the beneficial interest as tenants in common: at 472. 36The Chief Justice was satisfied that (apart from the effect of s 26 of the Conveyancing Act ) where a resulting trust was raised in favour of purchasers who had contributed equally to the purchase price, they would be equitable joint tenants. However his Honour said, at 473, that "slight circumstances" would have been enough to indicate that it was intended that there should not be a joint tenancy and that: Equity had a dislike for joint tenancies, because their effect was to make the ultimate ownership of the property depend on the chance of survivorship, and, in the words of Snell's Principles of Equity, 28 th ed. (1982), at p. 37: "There is here no equality except, perhaps, an equality of chance." It would be indeed surprising if the rules of equity required the courts to follow a rule of the common law that no longer existed and in doing so to reach a result which equity generally tried to avoid. However the doctrines of equity are not so inflexible. If equity follows the law, it will follow the rules of law in their current state. Where, as a result of following the law, a beneficial joint tenancy would formerly have been created, now a beneficial tenancy in common will (in New South Wales) come into existence. In other words, although s. 26 of the Conveyancing Act has no direct application to the present case, its indirect effect is to require it to be held that there was a resulting trust for the purchasers in an interest of the same kind as that which would have resulted if the land had been conveyed to them at law, i.e. as tenants in common. Of course if these views are wrong, and if it was only when there was a conveyance to purchasers who had contributed in equal shares that equity presumed that there was a joint tenancy, the result would be the same, for equity would then favour at tenancy in common and the beneficiaries would hold as tenants in common accordingly. 37In the present case the defendants submitted that there must be evidence (and there is none) of an intention to create a joint tenancy in order to rebut the equitable presumption in New South Wales that conferral of an interest in which a trust is created results in the creation of a tenancy in common. 38The plaintiff submitted that after the Transfer in 1993, Mrs Mahony held her three-quarter legal estate on trust absolutely for herself as to one-quarter and as to the balance on trust for the plaintiff and Mrs Rix. It was submitted that the equitable interest that the plaintiff and Mrs Rix had was retained by them at the time of the transfer of the legal estate and that such equitable estate, not being disposed of, was held by them, as they had held the legal estate, as joint tenants. Accordingly it was submitted that s 26 of the Conveyancing Act has no application because there was no disposition of any beneficial interest in the Property and accordingly there is no presumption of a tenancy in common. 39This submission is not dissimilar to that made in D.K.L.R. Holding Co. (No. 2) Pty Ltd v Commissioner of Stamp Duties (New South Wales) (1982) 149 CLR 431. In that case a company, 29 Macquarie (No. 14) Pty Ltd (29 Macquarie), transferred certain land to the appellant, D.K.L.R. Holding Co. (No. 2) Pty Ltd , that executed a deed poll declaring that it would hold the land on trust for 29 Macquarie. The questions before the High Court related to the amount of stamp duty payable on the transfer and the deed poll. One of the appellant's submissions was that no duty was payable because the property comprised in the declaration of trust in the deed poll was no more that the bare legal estate. Gibbs CJ addressed this submission at 442-443 as follows: The property comprised in the declaration of trust was the entire property in the land in question. Before the transfer was executed 29 Macquarie was the legal owner of the land; it had the whole right of property in the land, but had no separate equitable estate in it, for its equitable estate was absorbed in the legal estate. Assuming, as we must, for the purposes of the case, there was an effective transfer of the fee simple to D.K.L.R., the latter company then became obliged to hold the land for the benefit of 29 Macquarie. However, the property as to which the trust was declared - the property comprised in the declaration - was the whole right of property in the land, and not the bare legal estate, for it was not until the declaration of trust became operative that any separate equitable estate was created. 29 Macquarie did not transfer to D.K.L.R. the bare legal estate; indeed it could not declare itself a trustee for itself, and then transfer the bare legal estate to another. ... Before the transfer there had been no severance of the legal and equitable interests in the land. It was only when the declaration of trust took effect, which of course was immediately after the transfer, that there was a severance of the legal and equitable interests. 40Aickin J addressed the submission at 463-464 as follows: In my opinion this argument is based upon a fundamental misconception as to the nature of legal and equitable interests in land or other property. If one person has both the legal estate and the entire beneficial interest in the land he holds in entire and unqualified legal interest and not two separate interests, one legal and the other equitable. If he first holds the legal estate upon trust for some other person and thereafter that other person transfers to him the entire equitable interest, then again the first-named person does not hold two separate interests, one the legal and the other the equitable estate; he holds a single entire interest - he is the absolute owner of an estate in fee simple in the land. The equitable interest merges into the legal estate to comprise a single absolute interest in the land. It is a fundamental principle of both the common law and of equity that the holder of an estate in fee simple cannot be a trustee of that fee simple for himself for what he holds is a single estate, being the largest estate in land known to the law. ... It is true that the common intention of both parties to the transfer was that no beneficial interest should be held by D.K.L.R. That fact excludes any possibility of rebutting the ordinary inference that resulting trust arose in favour of the transferor 29 Macquarie but it does not deny that what was transferred was the entire interest in the land. It is of the nature of a resulting trust that it arises when the entire interest is vested in the transferee and at the very moment it becomes so vested. 41Brennan J addressed this submission at 473-474 as follows: However, it was submitted that the property transferred was the bare legal estate, and that 29 Macquarie remained throughout the beneficial owner of the land. This conclusion was said to follow from the fact that it was the common intention of transferor and transferee that, upon the transfer, D.K.L.R. should hold the land in trust for 29 Macquarie. Yet the interest which 29 Macquarie had after the transfer was not the same as it had before. Before the transfer it did not hold legal and equitable estates in the property: it held the legal estate alone. There was no equitable estate, for a person cannot be trustee for himself alone. ... An equitable interest is not carved out a legal estate but impressed upon it. It may be convenient to say that D.K.L.R. took only the bare legal estate, but that is merely to say elliptically that 29 Macquarie transferred to D.K.L.R. the property in respect of which D.K.L.R. had declared that it would be trustee. 42Having regard to the findings in the Earlier Proceedings it is clear that the legal estate in the Property was transferred to the defendants, one quarter to Mr Mahoney and three quarters to Mrs Mahoney. It was at the time that the legal estate was transferred that the resulting trust arose pursuant to which Mrs Mahony was found to hold one-quarter of the interest in the Property on trust for the plaintiff: at [62]. I am not satisfied that I should accept Mr Washington's submission that the presumption of a tenancy in common does not arise in this case because the beneficial interest remained with the plaintiff and Mrs Rix and all that was transferred to the defendants was the bare legal estate. 43It is necessary to decide what the plaintiff and Mrs Rix intended in respect of their beneficial interests in the Property at the time of the Transfer of the legal title to the defendants. I agree with the defendants' submission that the fact the plaintiff and Mrs Rix held their legal estate in the Property as joint tenants prior to the transfer of the Property to the defendants does not mean that their equitable interests in the Property must have been held as joint tenants. It will depend upon their intentions at the time of the transfer of the legal estate. 44On the basis of the agreement between the plaintiff and Mrs Mahony evidenced in the document of 19 February 1993 Forster J determined that the plaintiff had rebutted the presumption of advancement in favour of Mrs Mahony but left open the question of that presumption in respect of Mrs Rix. The plaintiff relies upon three matters in support of a submission that the presumption of advancement between Mrs Rix and Mrs Mahony is rebutted. The first is the letter to the Court of 22 July 2009 in which Mrs Rix indicated that she believed that she could come to a mutual arrangement with Mrs and Mr Mahony in respect of her interest in the Property. It was submitted that this is not a statement of a person who has made a gift of the Property but a statement of one who has an interest in respect of which she intends to come to a mutual arrangement. This is a statement made twenty-eight years after the transfer. 45The plaintiff also relied upon the evidence of Mrs Mahony found in her affidavit sworn on 8 April 2011 as follows: 64. Shortly before 14 January 2009 my mother and I had the following conversation: Mavis: "I believe that I should make a will to prevent your father trying to get more of the house; I want you and Mark to be looked after. Whatever my share, I will leave to you and Mark." Me: "The only solicitor that I know locally is Pryor Tzannes & Wallis and I'll make a call and organise a meeting." 46The plaintiff also relied upon the terms of Mrs Rix's will. 47These statements are made many years after the transfer in 1993. Therefore they may be used only as admissions against interest: Calverly v Green (1984) 155 CLR 242. Albeit that the parties did not debate the interesting question as to whose "interest" it was against which an admission might be made, it was not suggested by the defendants that this evidence could not be relied upon to rebut the presumption of advancement. It is not necessary to decide this issue because of the conclusion I have reached in relation to the balance of the issues in the case, however if these statements are admissible I agree with the plaintiff's submissions that they evidence Mrs Rix purporting to deal with her interest in the Property in favour of both her son and Mrs Mahony. Accordingly I would agree with the plaintiff's submissions that this evidence is capable of rebutting the presumption of advancement in favour of Mrs Mahoney. 48The plaintiff also relied upon the following passage of Professor Peter Butts' book Land Law, 6 th Ed (Law Book Co, 2010) (footnotes omitted) in support of the submission that he and Mrs Rix held their beneficial interests in the land as joint tenants: The four unities [1405] So close is the relationship between joint tenants, that to create a joint tenancy requires the presence of four unifying characteristics - the so-called "four unities". They are the unities of title, interest, possession and time. 49It was submitted that the plaintiff and Mrs Rix maintained a unity of interest as they are identical in nature. They started with a legal estate as joint tenants, simultaneously disposing of the legal but, it was submitted, not the equitable interest by the Transfer of 11 March 1993. It was submitted that there was a unity of time with interests being created on the same day as the divesting of the legal, but not of the equitable title. Similarly it was submitted there remained a unity of title (referred to sometimes as a unity of estate: see Delehunt v Carmody at 470 per Gibbs CJ) with both commencing with the legal and equitable title and simultaneously disposing of the legal but not the equitable title. It was submitted that as both the plaintiff and Mrs Rix continued to occupy and possess the Property, the unity of possession was maintained. 50It was submitted that in the circumstances of the late Mrs Rix having been a joint tenant with the plaintiff; the presumption of advancement having been rebutted; the four unities having been preserved; there having been no determination of Mrs Rix's rights or obligations in the Earlier Proceedings; and Mrs Rix having affected no action that the law would regard as a severance of the joint tenancy, the plaintiff is entitled to declaratory relief to the effect that he has validly succeeded to his late wife's interest by survivorship leading to his having a one-half equitable interest in the Property from the moment of the death of the late Mrs Rix. 51The defendants relied upon the conversation contained in Mrs Mahony's affidavit of 11 August 2011 between herself and Mrs Rix shortly after the agreement of 19 February 1993 was signed. That conversation was in the following terms: Mrs Mahony: Dad made me sign some paper to record that I held a 1/4 share for you and a 1/4 share for him in my name. Did you know anything about this? Mrs Rix: No. I would never have made you do that. He didn't talk to me. If he had I wouldn't have signed it. Mrs Mahony: I've signed it mum because you know what he's like and he would have made things very difficult. I can't tell Dennis. He would kill me. 52The defendants submitted that the agreement of 19 February 1993 is expressly an agreement between the plaintiff and Mrs Mahony. It was also submitted that the conversation referred to above between Mrs Mahony and Mrs Rix shortly after the agreement of 19 February 1993 was signed was inconsistent with her having any knowledge of the arrangement prior to the Transfer. It was also submitted that the 19 February 1993 agreement demonstrates an intention on the part of the plaintiff himself not to create a joint tenancy. In this regard reliance was placed on the paragraph that provides that "four people own twenty-five percent each" of the Property. It was submitted that having regard to the balance of the Agreement (in which Mrs Mahony acknowledges that she owes the plaintiff either the price of $150,000 being "for his share" of the Property or that in the event that any of the four people wishes to sell the Property each receives his or her 25% value of the Property) it is clear that the plaintiff was seeking to put in place an arrangement under which he could require his daughter to "buy out" a specified share being "his share" of the Property with no reference to Mrs Rix. 53The agreement of 19 February 1993 is some evidence of what the plaintiff intended. He and Mrs Mahony agreed that as of that date, some weeks before the actual Transfer of the Property, the plaintiff, Mrs Mahoney, Mr Mahoney and Mrs Rix "each" owned 25% of the Property. The intention as expressed was that each had their own separate as opposed to joint interest and Mr Rix was free to sell "his share" for $150,000 should he wish to exercise that "choice". 54The defendants submitted that only "slight circumstances would have been enough to indicate that it was intended that there should not be a joint tenancy": Delehunt v Carmody at 473. The defendants also relied upon the following passage in Abela v Public Trustee [1983] 1 NSWLR 308 at 315 per Rath J: In the case of husband and wife, joint tenancy, in favouring longevity, is usually achieving the object for which it was created; but once the matrimonial relationship has broken down the original purpose of the joint tenancy is at an end, and a common intention of severance may more readily be inferred from a course of conduct. 55The defendants submitted that this principle would apply in the reverse and in circumstances in which a matrimonial relationship has broken down it would be more readily inferred that there was no mutual intention that the right of survivorship was to be created. 56The plaintiff completed a Pension Claim on 17 March 1993 (Ex 2). He was cross-examined in relation to that document as follows (tr 16-18): Q. ...you will see as part of question two, it says 'your marital status' a third of the way down the page? Can you see that? A. Yes. Q. Then there are several boxes and you have ticked the box that says 'separated'? A. Yes. Q. So may we take it then that you regarded yourself as separated at the time you filled in this document? A. It is hard to, yes, I would say, I would have to, can I just read, widowed, divorced, separated, yes I would have to say yeah. Q. Just below that, you see where it says 'your home address'? A. Yes. Q. You have filled in an address in Beaconsfield? A. That's correct. Q. Were you living at that address? A. Temporarily. Q. I should make it clear I am asking you about the time you filled in this form, March 1993? A. For a very short time. ... Q. I see, but you were living there for a short time? A. A week when I filled this in. When I filled this in there was, possibly, at the most it would be a week. ... Q. About half way down the left column, you see it has "his or her date of birth" and then "date of separation" do you see that? A. I have the date, yes. Q. Against date of separation you filled in 1.1.92. A. That's correct. Q. So was that the truth? A. It would be. 57On 17 February 1993, Mrs Rix lodged a "Statement" with the Department of Social Security that included the following (Ex 1): I wish to advise the Department that I no longer reside with my husband, Frederick Rix. We separated in June 1991. I lodged my claim for age pension in March 92 and believe that I put myself as being married. I was not aware that I should have stated we were separated. I wish the Department to correct my status + adjust my payments accordingly. I understand that I must notify the Department of any change in my circumstances within 14 days. 58I am satisfied that the plaintiff and the late Mrs Rix regarded themselves as "separated" at the time of the Transfer of the Property to the defendants. The defendants submitted that it would be an "odd" result to find that each of the plaintiff and Mrs Rix intended to create a right of survivorship in circumstances where the original purpose of a joint tenancy was at an end. 59It appears that Mrs Rix signed the Transfer in ignorance of the written agreement between the plaintiff and Mrs Mahoney dated 19 February 1993. The conversation between Mrs Mahoney and Mrs Rix suggests that she would not have required Mrs Mahoney to sign a document recording, as she was informed, that Mrs Mahoney held a quarter share for the plaintiff and a quarter share for Mrs Rix in her name. There may have been a number of reasons why Mrs Rix would not have required her daughter to sign such a document. It may have had nothing to do with any appreciation of quarter shares or otherwise. It may simply have been the case that Mrs Rix was happy to assist her daughter and son-in-law without the need for any further formality than was necessary to enable their names to be registered on the title so they could obtain the funding for the new business. However it is evidence of Mrs Rix's resistance to any co-operation with the plaintiff particularly in relation to the Property. This evidence supports the conclusion that it is probable that as at February 1993 Mrs Rix would not agree to holding and did not intend to hold her interest in the Property as a joint tenant with the plaintiff. 60I am satisfied that having regard to this conversation and the terms of the 19 February 1993 Agreement between the plaintiff and Mrs Mahoney, together with the fact that the plaintiff and the late Mrs Rix were separated, the irresistible conclusion is that they intended to hold their interests in the Property separately and not jointly. 61The plaintiff is not entitled to the 50% share in the proceeds of sale of the Property. However there is no issue that he is entitled to the 25% share of the proceeds of sale of the Property. Orders 62The plaintiff is entitled to a declaration in respect of his alternative claim for 25% of the gross proceeds of the sale of the Property adjusted according to prayer 4(a) of the Further Amended Summons. He is also entitled to an order that the trustees account to him for that 25% of the gross proceeds as adjusted. The Further Amended Summons is otherwise dismissed. If the parties are unable to agree on a costs order I will hear argument on 16 November 2011 when the matter is listed for the making of final orders.