Plaintiff v Defendant

EQUITY - Maxims - Equity will not assist a volunteer - Corin v Patton [1990] HCA 12; (1989) 169 CLR 540 - Blackett v Darcy [2005] NSWSC 65; (2005) 62 NSWLR 392

1 The critical issue in these proceedings is whether the beneficial entitlement to proceeds of sale of Unit 27, 185 Barkly Street, St Kilda, Victoria[1] ("the premises") lies with the plaintiff, Igo Norbert Mischel in his capacity as Executor of the Estate of the late Maria Mischel, or the defendant, Mischel Holdings Pty Ltd, a company now in liquidation.

2 By an originating motion between parties, dated 14 November 2011, the plaintiff seeks, among other things, declarations that:

(a) the joint ownership of the premises by Maria Mischel and the defendant was severed prior to her death; and

(b) $357,000 of the proceeds of sale of the premises, being half of the sale price, is held in trust by the defendant for the Estate of Maria Mischel; alternatively,

(c) an amount equalling half of the net proceeds of sale, after costs and repayment of bank loans, is held on trust by the defendant for the Estate of Maria Mischel.

3 Maria Mischel was born in Poland in 1917 and died on 15 August 2011 at the age of 94. Her husband, Jan Mischel, died in 1989, leaving Maria Mischel and her two surviving sons, Igo Mischel and Henry Mischel.

4 In 1988, Maria Mischel owned an apartment, Flat 7 at 21 Dickens Street, Elwood, Victoria, which she sold to Henry Mischel. Maria Mischel lent Henry approximately $140,000 from the proceeds of the sale of the Dickens Street property to assist him in his business affairs. Later, she lent a further $67,500 by way of various payments to Henry Mischel directly and, at his direction, to others, including his brother Igo Mischel, as repayment of debts to those people. Henry Mischel's evidence is that although his mother did not specify a date for the repayment of these loans, she did, nonetheless, remind him of his debt to her from time to time. These loans from Maria Mischel to Henry Mischel are not documented and it is not entirely clear now whether Maria Mischel thought that she was lending money to Henry Mischel personally for use as he thought fit in his business affairs or whether she thought she was lending the money to a company or companies associated with Henry.

5 In February 1989, Igo Mischel and his family moved from Melbourne to Surfers Paradise in Queensland. Igo Mischel's evidence was that after his father's death towards the end of 1989, his mother became more reliant upon him and, at some time in 1994, relocated to Surfers Paradise, where she could be closer. In early 1999, Igo Mischel returned to Melbourne to enhance his income earning prospects and to be closer to his children. After he returned to Melbourne, Maria Mischel told him that she also wanted to return to Melbourne so that she could be closer to him and to the rest of her family.

6 In about August 2000, Maria Mischel returned to Melbourne and moved into the premises as a rent paying tenant from a third party who then owned the premises. After living in the premises for a period of time, Maria Mischel told Igo and Henry Mischel that she would like to settle in Melbourne and that if the premises became available to be purchased, she would like to buy, but would need financial help. Igo and Henry Mischel discussed their mother's request, but Igo was not able to assist financially because of his divorce.

7 As time went on, the premises did come onto the market, in 2001. Maria Mischel was then about 85 years old, but in good health and mentally astute. The evidence indicates that she then needed accommodation of the type provided by the premises, at least for some years to come.

8 Maria and Henry Mischel discussed buying the premises. She asked Henry whether the loans she had previously made to him could be used to help her with the purchase, as she did not otherwise have the financial capacity or ability to obtain and service a mortgage for this purpose. Henry told his mother that he would help her purchase the premises and that he would arrange finance through Mischel Holdings Pty Ltd, the defendant company.

9 Arrangements for buying the premises were discussed between Igo and Henry Mischel, and they agreed on a proposal which they would both explain to their mother. The proposal agreed between Igo and Henry was that their mother and Henry would own the premises in equal proportions and both be registered on the Certificate of Title as proprietors. It was further agreed that the premises would be used as security for one or more mortgages, if necessary, and that Henry would be responsible for these mortgages. Igo Mischel said that it was his suggestion that Maria and Henry be registered on Title as joint tenants, rather than tenants in common. Igo Mischel was then a practising solicitor. As the proposal was ultimately implemented, it was Mischel Holdings Pty Ltd, the defendant company, rather than Henry which was registered on Title as a joint tenant.

10 Both Igo and Henry Mischel then explained the proposal to their mother. Igo said to his mother, "Henry will own half [of the premises] and you will own half [of the premises] as a result of money you earlier lent to Henry. There will be a mortgage or mortgages [over the premises], which you as a registered proprietor would also have to sign", or words to that effect.[2] Igo explained further that, "You won't have to make the mortgage repayments because that is going to be Henry's responsibility. If the premises are sold at some later stage you would receive half of the value [of the premises] because the repayment of any mortgage would come first from Henry's share of the sale price".[3] Continuing, Igo said to his mother that, "If you pass away without selling the premises, your share will automatically pass to Henry".[4] Igo says that his mother understood and agreed to these arrangements.

11 Henry told Igo Mischel that he would approach the then owner of the premises and if the owner agreed to sell, he would organise finance through the Commonwealth Bank of Australia. The premises were subsequently purchased and Maria Mischel and Mischel Holdings Pty Ltd, the defendant company, both became registered as proprietors of the premises, as joint tenants.

12 Igo Mischel, who was a practising solicitor at the time the premises was purchased, handled the purchase. His evidence is that the proprietorship of the premises, that is, Maria Mischel and Mischel Holdings Pty Ltd as joint tenants, was adopted because it was his understanding, based on discussions with both Maria and Henry Mischel, that it was agreed between them that if their mother passed away without the property being sold, Henry would keep the property by way of survivorship. Igo Mischel did, however, emphasise in his evidence that on the basis of the conversations he had with Henry and with his mother to which reference has been made, and other similar conversations, it was his understanding that if the premises was ever sold before Maria Mischel's death, his mother would be entitled to half the sale price, with any mortgage repayment to come first from Henry's share of the sale price.

13 Having regard to the evidence as to Maria Mischel's good state of physical and mental health when the premises was purchased, one can readily understand that Maria Mischel's need for apartment-type accommodation would not abate on the sale of the premises during her lifetime and that she would then be looking for another similar property. The latter was emphasised by the evidence of Henry Mischel that his mother said to him in the course of discussions in relation to arrangements to purchase the premises that, "I'm never going into a nursing home".[5] Consistently with this concern on the part of Maria Mischel, was Igo Mischel's evidence that the issue of his mother's entitlement in the premises was a topic of discussion between Maria and Igo on numerous occasions up to and including the last night prior to her death at the Alfred Hospital, just before he left her for the night.

14 Igo Mischel returned to live permanently in Surfers Paradise on 21 January 2009. His evidence is that, whilst he came back to Melbourne on 31 January 1999, it was always his intention to eventually return to Surfers Paradise for the remainder of his life. Shortly after he did return to Surfers Paradise, Henry Mischel called to say that he was worried about their mother's health and personal safety living alone. Henry Mischel said that he was concerned that he was not able to look after her to the extent needed and that he thought she would be better looked after in an aged care facility. Igo and Henry then discussed the necessity for her to sell her share in the premises to be able to enter such a facility. Henry said that he would fund the move to an aged care facility, which meant, as Igo understood it, that he would buy his mother's half share of the premises and that the money would be used to "buy her into a good facility".[6] Igo agreed with Henry that their mother would be better off in an aged care facility, but he also told Henry that he believed that she would not agree to such a move as he had previously discussed this option with her, as well as an option of having a permanent carer living with her. Igo said that she had rejected both those options.

15 Notwithstanding the discussion with Igo, Henry Mischel broached the subject with Maria Mischel and, according to Igo Mischel's evidence, this, combined with some other issues, caused a "huge fight" between them.[7] During a telephone call between Igo and Maria following these discussions with Henry, she told Igo of Henry's suggestion, about which she was very distressed and upset. She felt that she was being moved into an aged care facility against her wishes and she was deeply suspicious of Henry's motives.

16 At the time of these discussions, Igo Mischel said that his mother's mind was "still totally sharp",[8] and she saw no reason why she should be moved into an aged care facility. On more than one occasion, subsequently, she said to Igo, "I own half of this apartment. Henry can't sell [the premises] without my signature. He is treating me as if I was already dead and he owned the place. Nobody will force me out of here unless I choose to leave and agree to sell. If I agree to sell, I expect to receive my share of the sale price", or words to that effect.[9] As a result of these discussions, Igo and Maria made a "pact",[10] at her insistence, that as long as she was mentally competent, Igo would never support the idea of her being moved into an aged care facility against her will.

17 For approximately nine years, from August 2000 until Igo left for Surfers Paradise in 2009, Igo was Maria Mischel's confidante and carer, visiting her twice a week, listening to her complaints and attending to her medical and optical appointments and shopping needs. On his departure from Melbourne, Henry and Igo arranged for a "Baptcare package" for their mother. This was a home help service provided by the Baptist Church to enable Maria Mischel to live at home and have care assistance and home help without needing to move to an aged care facility. Igo remained in close weekly telephone contact with his mother from Surfers Paradise.

18 Nevertheless, as time progressed, it became clear that Maria Mischel's care needs could not be relied upon to be addressed by other family members and that she was not prepared to move into an aged care facility or to have a permanent live-in carer. Consequently, in late March and early April 2011, Igo Mischel started to broach the subject with his mother of her moving to Surfers Paradise where he could look after her and she would be close to him. During some initial discussions, she expressed concern at not having the immediate funds to purchase in Surfers Paradise, to which he replied, "Don't worry about it. I'll borrow some money to make up the shortfall and you will fix me up later", or words to that effect.[11] As a result of these discussions, Maria allowed Igo to search for and buy a suitable property on the basis that she would repay any funds which he advanced from the proceeds of sale from "her equity" in the premises.[12]

19 Igo subsequently spoke with Henry Mischel by telephone and explained what was happening and the arrangements agreed between Igo and their mother. Henry agreed that their mother needed to move out of the premises for her wellbeing and safety, and that the premises needed to be sold. Igo said that Henry told him that he thought it was wrong to move their mother to Surfers Paradise at the age of 94 and that it was more appropriate for her to move into an aged care facility. Igo said that he told Henry that their mother refused this option and, consequently, there was no other choice other than for Igo to look after her again and that this would only be possible in Surfers Paradise.

20 Following on from these discussions, on 18 May 2011 Igo Mischel found, after consulting with Maria Mischel by telephone, a suitable property, being Unit 35, at 2940 Gold Coast Highway, Surfers Paradise ("the Surfers Paradise property"). On this basis, Igo Mischel purchased the Surfers Paradise property in his mother's name on a 30 day settlement contract. This property is a one bedroom apartment situated approximately 100 metres away from Igo Mischel's residence at Surfers Paradise. Settlement of the Surfers Paradise property took place, as scheduled, on 17 June 2011. As Maria Mischel did not have sufficient readily available funds for settlement of the purchase of that property, it was agreed that Igo would provide the shortfall in her funds to enable settlement to proceed. The Defendant submits that the evidence demonstrates Maria Mischel provided approximately 80% of the purchase price of the Surfers Paradise property from her then available funds.[13] The evidence of Igo Mischel in cross examination was, howver, to the effect that Igo Mischel provided approximately $30,000 of bridging finance to enable settlement of the Surfers Paradise property to proceed (the total consideration being approximately $205,000), and the balance of the consideration was paid by Maria Mischel.[14]

21 Igo Mischel was in Melbourne, on or about 31 July 2011, following the settlement of the purchase of the Surfers Paradise property on 17 June 2011. He then discussed with Henry the progress of the sale of the premises. Henry said that the settlement of the sale was due on 29 August 2011 and that Maria Mischel was to receive $357,000, being her free and clear proceeds from the sale of the premises. On this basis, Igo Mischel went, the next day, to the Acland Street, St Kilda, branch of the Westpac Bank, where his mother banked. Igo told the bank that there were proceeds from her sale of the premises that would be forthcoming. Using Igo's Power of Attorney for his mother, he then opened a separate Deeming Account in her name by depositing $50 in cash. Igo said that he did this in order to keep the proceeds from the sale of the premises completely separate from her general banking, for the purpose of keeping things "nice and clear" for Centrelink and her pension.[15]

22 Following settlement of the purchase of the Surfers Paradise property, Igo and Maria Mischel agreed a schedule for her move to Surfers Paradise. It was planned that she would leave Melbourne on 14 August 2011 following the renovation of the Surfers Paradise property after it was vacated by the then existing tenants. Maria Mischel subsequently became ill and on or about 24 July 2011 she was admitted to the Alfred Hospital in Melbourne. Arrangements were made for the removal of her belongings in mid-August 2011 in anticipation of her recovery from surgery which took place in late July or early August. However, due to Maria Mischel's illness, the anticipated removal of her belongings on 10 August 2011 did not take place. Igo Mischel paid the removalist's tax invoice on behalf of his mother. These charges were payable because of the late cancellation of the move due to Maria Mischel's then state of health.

23 Maria Mischel died five days later[16] at the Alfred Hospital. Igo Mischel was with her the previous night and said in his evidence that even at this time, she was anxious to assure him that he should not worry about any debt she owed. He said that his mother did not like owing anyone any money, even her own sons, notwithstanding that she freely lent or gave her money to her sons when they had needed it in the past. In particular, Igo said that his mother said to him, "The Melbourne unit will settle any day and I will pay you back straight away".[17] Igo says that he responded: "Don't worry about it. It's all under control. Henry has organised for you to receive your share on the 29th August [2011]. Just look after your strength, so I can get you moved to Surfers [Paradise]", or words to that effect.[18]

24 The defendant contended that both Igo and Henry Mischel were unreliable witnesses.[19] It was said of Igo's evidence that it is self-serving, as he is the sole beneficiary of his mother's estate.[20] It is, of course, the position that many plaintiffs are in this position, which means, simply, that their evidence is to be exposed to the usual testing process, including cross-examination and its veracity tested having regard to other oral and documentary evidence. Consequently, I am of the opinion that this submission with respect to the evidence of Igo Mischel is to be treated and considered in the usual way and that there is no basis to discount it on the basis of such a general assertion.

25 In relation to the evidence of Henry Mischel, much was made on behalf of the defendant of previous and unrelated civil proceedings in which Henry or companies with which he is or was associated were involved and a criminal conviction for obtaining financial advantage by deception against him personally in which serious allegations were made against Henry or these companies.[21] In the context of a general attack on the credit of Henry Mischel on this basis, I am of the opinion that, again, his evidence is to be treated in this proceeding in the usual way subject to the usual testing process to which reference has been made.

26 A more particular attack was made on the evidence of Igo and Henry Mischel on the basis that the premises were mortgaged in 2005 and 2011 for substantial amounts of money and that these transactions were not referred to by Igo or Henry Mischel in their written or oral evidence. In general terms, the defendant's position with respect to these mortgages was that they were for such substantial amounts that it could not be the case that Maria Mischel did think that there would be any proceeds flowing from the sale of the premises and, consequently, evidence as to the agreement or agreements with respect to the co-ownership of the premises as advanced by the plaintiff should not be accepted.[22] In my view, for the reasons discussed in more detail below, it does not necessarily follow that the realisable value of land and the "equity" available to the owners of that land necessarily has any relevance to the nature of any co-ownership.

27 In the present circumstances, were Maria Mischel and the defendant the holders of a registered Torrens title in the premises as tenants in common, it could not be said that any of the mortgages and supporting guarantees which were entered into could affect that position. Rather, depending on when the land was sold, the commercial consequence may simply have been that there was no "equity" left in the property which would yield funds for either of the co-owners. Consequently, the defendant's submissions in this respect must, in my opinion, be treated as directed to contradicting the plaintiff's claims with respect to any agreement between the plaintiff and the defendant company. Finally, in terms of evidentiary matters generally, it is noted that the plaintiff served a Notice of Intention to Adduce Evidence of Previous Representations under s 67(1) of the Evidence Act 2008 (Vic) and rule 5 of the Evidence Regulations 2009 (Vic) for the purposes of ss 63(2) of the Evidence Act 2008 (Vic) as a result of the evidentiary constraints imposed by the death of Maria Mischel.

28 Turning now to the mortgages, reference was made initially to the first and second mortgages of the premises to the Commonwealth Bank of Australia for the total sum of $387,500 which Maria Mischel signed on or about January 2002.[23] The evidence of Henry Mischel in relation to this mortgage is that as both his mother and the defendant were registered proprietors of the premises, the Bank required that they both be named in the mortgage as mortgagors, but with the defendant noted as the borrower, with Maria and Henry both as guarantors. Having regard to a lender's need to take an effective security over jointly owned property, this arrangement is unsurprising.[24]

29 On or about 31 May 2005, Maria Mischel again signed a mortgage over the premises, this time to secure advances to Ballantyne Chambers Pty Ltd in the sum of $1.4 million by way of, among other securities, a further mortgage to the Commonwealth Bank of Australia.[25] The mortgage was structured in a similar way to the first mortgage to the Commonwealth Bank of Australia in that it was a mortgage by both co-owners, together with personal guarantees by Henry Mischel limited to $1.4 million and Maria Mischel limited to $520,000.[26] Ballantyne Chambers Pty Ltd was a company associated with Henry Mischel.

30 In March 2011, Maria Mischel also executed a mortgage of the premises, this time to secure advances of $1 million to Zigmo Australia Pty Ltd. Zigmo Australia Pty Ltd was a financier from which Henry Mischel and his associated companies borrowed money for the purpose of raising capital.[27] This mortgage, which was similarly structured to the previous mortgages in that it involved a mortgage by both co-owners and personal guarantees, was ultimately set aside as a result of consent orders made in proceedings in this Court.[28]

31 The defendant contended that it was implausible to suggest that between April and August 2011, Maria Mischel would have had any expectation that she had an unencumbered right to half the proceeds of sale of the premises. It was emphasised that Maria had executed two mortgages to the Commonwealth Bank of Australia over the premises for $387,000 and $1.4 million, respectively, and also signed two guarantees to the Commonwealth Bank of Australia for $387,000 and over $500,000. Additionally, there was liability under the mortgage to Zigmo Australia Pty Ltd. These facts are, it is said, totally inconsistent with her having reached the alleged agreement on purchasing the premises and, in 2011, continuing to have an expectation of funds flowing to her on its sale. It was contended that, objectively, there could have been no such expectation on the part of Maria Mischel and that the only evidence to the contrary were "convenient" recollections of oral discussions by Igo and Henry Mischel that their mother had such an expectation.[29] Further, it was submitted that whether or not Maria Mischel participated in the sale of the premises is irrelevant in this respect and that the evidence indicates that the sale was managed by Henry Mischel and, to a lesser extent, by Igo Mischel.

32 The defendant also contended that the purchase of the Surfers Paradise property was a separate and independent matter, and not relevant to the issues with respect to the premises.[30] Maria Mischel funded 80% of the purchase price of the Surfers Paradise property, the evidence being that Igo Mischel provided the remaining 20% as bridging finance on the basis that he would be repaid from the proceeds of the sale of the premises.[31] On the basis of the 80% funding from Maria Mischel, it was submitted by the defendant that the Surfers Paradise property purchase was not dependent upon the sale of the premises; noting also that it occurred before the sale of the premises was settled and that this purchase did not require prior settlement of the sale of the premises.[32] Neither, the defendant contends, was the opening of a separate bank account in Maria Mischel's name on 1 August 2011 with a $50 deposit by Igo Mischel relevant.[33] It was noted that on and from 4 January 2011, he had a Power of Attorney from Maria Mischel and could easily have banked the proceeds of sale into his mother's account or into his own account in trust for her. For reasons discussed in more detail below, I am of the view that these contentions do not detract from the position put by the plaintiff with respect to the ownership of the premises and the agreement and arrangements with respect to the proceeds of its sale. They are consistent with the position argued for by the plaintiff and the fact that Maria Mischel was able to fund a significant part of the purchase price of the Surfers Paradise premises does not detract from the agreement alleged by the plaintiff with respect to the premises.

33 Finally, the defendant contended that the objective evidence indicates that Henry and Maria Mischel were, until her death, of the view that each of the Commonwealth Bank of Australia and Zigmo Australia Pty Ltd had substantial security over the premises, well in excess of her half interest.[34] It was noted that after her death, the Zigmo Australia Pty Ltd transactions were declared void ab initio, but that there is no evidence to suggest that Maria Mischel was aware of this.[35] Additionally, the defendant made reference to a number of aspects of the proceedings by which these transactions were set aside as being factors which militate strongly against the evidence of Henry Mischel being accepted with respect to the arrangements and agreements with respect to the premises.[36] It was also submitted by the defendant that Igo Mischel's evidence should not be accepted without third party or documentary evidence which corroborates his evidence. It was said that apart from his self-interest in the outcome of the proceedings, a matter which has been referred to previously, he demonstrated a propensity to assist Henry Mischel to avoid legal obligations, in particular acting as a sole director of Henry Mischel's company, Mischel & Co Pty Ltd, while Henry Mischel was the controlling mind of the company. The evidence of Igo Mischel was that he had no involvement or "participating function" in that company, although he was its sole director between 1997 and 2001.[37] The evidence of Henry Mischel was that he could not recall when he or Igo Mischel became a director of Mischel & Co Pty Ltd, but did not dispute the contents of the historical company search which was tendered in evidence. The company search indicates that Henry Mischel has been a director since 1 February 2001, and Igo Mischel was a director between 30 July 1997 and 12 July 2004.

34 However bleak the possibility of the sale of the premises yielding funds to Maria Mischel may have seemed at various times as a result of the mortgages which had been granted relying on that property as security, the fact of the matter is that when the premises were sold, proceeds were available for the plaintiff as anticipated - to the extent of 50% of the actual sale price of the premises.

35 It is not entirely clear on the evidence whether the mortgage with respect to Ballantyne Chambers Pty Ltd or the mortgage with respect to Zigmo Australia Pty Ltd was secured on properties other than the premises, though in the former case the evidence does indicate that another property, being Unit 7 at 105 Barkly Street, St Kilda, was also part of the security. In some respects, this uncertainty is addressed by production of the mortgages as registered, but it is not clear whether there were other collateralised security arrangements which would explain the willingness of lenders to discharge securities on settlement of the sale of the premises so that it yielded funds as anticipated. Perhaps Maria Mischel knew of these arrangements, but there is no evidence in this respect. The evidence is that she remained mentally alert until her death and so it is possible that she did. In any event, again for reasons discussed further below, the fact of financial dealings with land subject to co-ownership does not necessarily affect the nature of that co-ownership.

Unity of possession and whether consideration given for co-interest

36 The common law presumption in favour of joint tenancy is rebuttable if any one or more of the "four unities" of possession, interest, title and time is absent.[38] More particularly:[39]

"A joint tenancy is characterised by the co-owners enjoying the 'four unities' - possession, interest, title and time. Unity of possession means that each co-owner is as much entitled to possession of any part of the property as the other co-owner or co-owners.[40] The interests of the joint tenants must also vest in them at the same time ('unity of time'), by the same deed, will or other instrument ('unity of title'), and they must all have the same type of interest ('unity of interest'). Joint tenants are said to hold aliquot shares and to hold 'per mie et per tout'.[41] The discussion in Wright v Gibbons[42] reveals that this expression could mean either 'for nothing and yet for everything' or 'for half and yet for everything'. However, the sense in which it is in fact used is that no joint tenant has any distinct share in the land, but together the joint tenants are seised of the whole property".

37 The plaintiff contended that there was no unity of possession and that, consequently, the four unities required for a joint tenancy were lacking. In this respect, it was said that the arrangements described in the evidence of Igo and Henry Mischel that their mother, alone, was to live at the premises indicate that there was never any intention that the defendant, a company, would have an equal right to possession as against Maria; and the same would appear to apply with respect to Henry, as the company's agent or otherwise. On this basis, it was submitted that, in equity, Maria Mischel and the defendant held the whole of the premises on trust subject to Maria's life interest (in possession) with a remainder interest in favour of both parties as joint tenants. Further, it was said that Maria's interest and that of the defendant, that is the co-ownership interest, was limited to the remainder interest so that, at best, there was a potential unity of possession only arising on the death of Maria Mischel; though such unity of possession would appear to require resort to deeming or the law in relation to fractions of time at the point of Maria's death. Continuing, it was said that on this event, simultaneously with unity of possession arising, Maria's interest would pass by survivorship to the defendant. Alternatively, it was submitted that Maria and the defendant held the whole of the premises on trust for Maria for her life, with the remainder held on trust for the defendant.

38 On the other hand, the defendant's general position was that, in view of the registered title of the premises being Maria Mischel and the defendant as joint tenants at law, absent any contribution by Maria Mischel to the purchase of the premises, she would not, as a volunteer, be assisted by equity in any way. Consequently, on her death the whole of the legal and equitable interest in the premises would pass to the defendant. The defendant's general position does not, however, necessarily resolve this or other issues. It is well established that the conveyance of property to parties jointly does not of itself rebut the equitable presumption of a tenancy in common as a conveyance in this form does not identify the beneficial ownership of the conveyees[43] - and the same applies to a transfer of land under the Transfer of Land Act 1958 (Vic). Additionally, the defendant's general position relies on the contention that Maria Mischel was a volunteer; a position which I do not accept for reasons discussed further below.

39 As a matter of law, it is quite clear that the defendant had a right to possession of the premises, subject to the possessory rights of Maria Mischel, at all relevant times; even though this right was not exercised. Further, in terms of legal title, it should not be overlooked that the proprietorship in the premises as registered in the Torrens system register was of Maria Mischel and the defendant as joint tenants. Consequently, they enjoyed indefeasible title as joint registered proprietors in fee simple under the provisions of the Transfer of Land Act 1958 (Vic).[44] This position in terms of legal title does not, however, prevent parties agreeing a contrary position, for example, that one of the parties would not seek to exercise possessory rights, which may or may not go to the state of the title to a property in equity. An agreement of this kind, if recognised in equity as relevant to the state of the title, would eliminate one of the "four unities" - possession.

40 There are many authorities of long standing which reaffirm the dislike of joint tenancies in equity because of the arbitrary manner in which the right of survivorship operated.[45] The position in this respect was discussed and reaffirmed by Gibbs CJ in Delehunt v Carmody[46] in the context of a purchase of property where both purchasers contributed equally in the payment of the deposit and the instalments of purchase price:[47]

"When a purchase is made in the name of one of two or more persons who contributed to the purchase price, and the relationship between the parties does not give rise to a presumption of advancement, the property will be held on a resulting trust for the persons who paid the price. Quite clearly, where the contributions to the purchase price have been made in unequal shares the property will be held on a resulting trust for the contributors as tenants in common in proportion to the amounts which each contributed: Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 246-7, 258; [1984] HCA 81; 56 ALR 483. There seems to be no authority which decides the precise question whether, when a resulting trust was raised in favour of purchasers who had contributed to the price in equal shares, the beneficial interest of the purchasers would have been that of joint tenants or of tenants in common. However, it would seem to follow, by analogy with the case where a conveyance is made to all the contributors, that (apart from the effect of s 26 of the Conveyancing Act) they would be equitable joint tenants, and this conclusion is accepted as correct in Hanbury and Maudsley, Modern Equity, 12th ed (1985), at 254 and Ford and Lee, Principles of the Law of Trusts (1983), at 966. It would further seem to accord with principle that if there were an express trust in favour of A and B who had contributed equally to the purchase price of the property the subject of the trust, equity, again following the law, would have held (before the amendment effected by s 26) that A and B took beneficially as joint tenants. In either case slight circumstances would have been enough to indicate that it was intended that there should not be a joint tenancy. 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 28th ed (1982), at 37: 'There is here no equality except, perhaps, an equality of chance.'"

41 In the present circumstances, an agreement between Maria Mischel and the defendant company made in circumstances where Maria provided full consideration for the purchase of her half interest in the premises would, in my view, provide a sufficient circumstance to indicate that it was intended that there should not be a joint tenancy because the result of such an agreement would be to eliminate one of the "four unities", namely, possession. In this respect, the critical question is whether or not Maria Mischel did give full consideration for the purchase of a half interest in the premises by releasing an indebtedness of equivalent value from Henry Mischel to her. The answer to this question requires the drawing of inferences from such of the evidence that does exist.

42 Although it is not clear whether Maria Mischel thought that the company to which she advanced funds for the purpose of assisting Henry Mischel's business activities was any particular company, Henry's evidence supports the view that it was Mischel Nominees Pty Ltd.[48] Henry's evidence was also that Maria was not his creditor personally.[49] The evidence does not, however, go further than that Mischel Nominees Pty Ltd was ultimately wound up.[50] Thus, there is no evidence which establishes that this company was wound up prior to the acquisition of the premises. Also, on the evidence as it stands, Henry Mischel's bankruptcy is of no relevance - the evidence being that the advances by his mother were not to him personally.[51]

43 Consequently, on the basis of the evidence as it stands, Maria Mischel had lent the sum of $207,500 to a company or companies associated with Henry Mischel; on Henry's evidence, to Mischel Nominees Pty Ltd. Further, there is no evidence that establishes that any supervening liquidation of this or any other company, or Henry's bankruptcy, meant that his sum was not payable but unpaid at the time the premises was acquired. In other words, on the evidence, this debt to Maria was then still alive. The defendant sought to cast doubt on this position on the basis that Igo Mischel did not know the precise amount of the indebtedness.[52] He was not, however, a party to the advances, the agreement or agreements between his mother and Henry, so his lack of detailed knowledge does not, in my view, affect the position. Rather, his honesty in this respect is an indication of the veracity of his evidence. In any event, Henry was not cross-examined on his evidence that Maria had lent him the sum of $207,500 in about 1988 and it is a position maintained by Igo in his oral evidence, even though the latter could not be precise as to amount. In light of this evidence, it does not follow that because Henry Mischel borrowed moneys to fund the entirety of the purchase price of the premises, that Maria did not contribute the sum of $207,500 to purchase the premises. Rather, for the reasons indicated, the evidence establishes the contrary - that she did make this contribution.

44 It is, nevertheless, the defendant's contention that Maria Mischel was a volunteer with respect to the purchase of the premises and, it follows, in relation to any agreement with respect to her exclusive possession. On this basis, the defendant argues that the plaintiff's case must fail as it relied on the intervention of equity - and, as it was put, equity will not assist a volunteer. On the basis of the evidence already considered, I am of the opinion that the evidence does not establish this position. Nevertheless, even if supervening liquidation or bankruptcy rendered recovery of the advances made by Maria Mischel impossible as a result of the extinguishment of indebtedness by these processes, I do not accept that the result is that Maria is to be treated as a volunteer in the present context.

45 It is clear on the evidence that Henry Mischel continued to acknowledge an obligation of indebtedness to his mother and that she remained of the view or understanding that such an obligation subsisted. On this basis, the plaintiff contends that Maria provided consideration for her share of the purchase price of the premises and is not to be regarded as a volunteer.

46 At the outset it is important to consider the nature of the equitable maxim that "equity will not assist a volunteer". Thus, in Corin v Patton,[53] Mason CJ and McHugh J said:[54]

"Of course, it would be a mistake to set too much store by the maxim. Like other maxims of equity, it is not a specific rule or principle of law. It is a summary statement of a broad theme which underlies equitable concepts and principles. Its precise scope is necessarily ill-defined and somewhat uncertain."

47 More particularly, in Conlan (as liquidator of Oakley Acquisitions Pty Ltd) & Ors v Registrar of Titles & Ors,[55] Owen J considered the meaning of "volunteer" in this context:[56]

"The texts seem to define the term 'volunteer' by asking who is not a volunteer. Put at its simplest, a person is not a volunteer if he or she has provided valuable consideration in a common law sense or, alternatively, is within the scope of marriage consideration: HG Hanbury, Modern Equity: Principles of Equity (8th Edition) 1962, page 131; PT Pettit, Equity and the Law of Trusts (1966), page 50."(emphasis added)

48 On this basis, the question arises whether Maria Mischel gave consideration for her share of the purchase price in a "common law sense". In this respect, Henry Mischel's unchallenged evidence is that:

(a) after the advances were made by Maria Mischel from 1988 onwards Maria from time to time reminded Henry of her debt to her;[57]

(b) in 2001 Maria asked Henry whether the loans that she had previously made to Henry could be used to help her buy the premises;[58] and

(c) Henry said to Maria that the property would be acquired and that the company [the Defendant] would make repayments on the mortgage but she would have a half share in the apartment free and clear 'as repayment of my loans'.[59] (emphasis added)

49 Consideration in the relevant sense is the act or promise provided by the one party, the promisee (in this case Maria), as the price of the other's promise.[60] In this context, the law recognises, as good consideration, a promise not to pursue a claim notwithstanding that in truth the claim does not have a legal basis. Thus, in Miles v New Zealand Alford Estate Co, Brown LJ said:[61]

"... the reality of the claim which is given up must be measured, not by the state of the law as it is ultimately discovered to be, but by the state of the knowledge of the person who at the time has to judge and make the concession. Otherwise you would have to try the whole case to know if the man had a right to compromise it ..." (emphasis added)

50 On the evidence, Maria Mischel plainly believed that the moneys were still owing to her. The consideration that she provided in relation to Henry Mischel's promise to arrange and finance the purchase of the premises was to give up her claim for repayment of the sums she had advanced. In the circumstances, it does not matter that the promise was provided by Maria Mischel to either Henry or Mischel Nominees Pty Ltd, and the countervailing promise was provided by Mischel Holdings Pty Ltd. Maria provided consideration in the form of giving up her right for repayment of her advances, the loans, with respect to whichever person or entity to which any obligation applied or had applied. This is good consideration at common law and accordingly she could not be regarded as a volunteer from the perspective of the equitable jurisdiction. The authorities indicate that the safeguards which apply in relation to the compromise of a doubtful claim is that the party who relies upon the surrender of a claim must have a reasonable and honest belief in the claim and did not knowingly conceal from the other party any fact that might affect its validity.[62]

51 For these reasons, I am satisfied that the equitable title to the premises was co-ownership by Maria Mischel and the defendant as tenants in common because of the absence of the entitlement of the defendant to possession of the premises as a result of the agreement between the parties in this respect.

52 The question whether or not Maria Mischel is to be regarded as a volunteer also arises with respect to subsequent dealings in relation to the premises and the proceeds of sale. In this context, it is helpful to refer to the note of caution sounded by Young CJ in Eq in relation to the application of the maxim:[63]

"[31] It must always be remembered that the rule that equity does not assist a volunteer is not a complete statement of the law and is only relevant if the donee requires the assistance of a court of equity in order to gain the property. Where the donee has gained the property (at least where he or she has not done so illegally), then there is usually no equity in the donor to recover back the money; see Djordjevic v Djordjevic [1999] NSWSC 1223 at [103]."

(b) the defendant used half of that loan facility for the purpose of repaying the advances which had been made by Maria Mischel, the loans, and half to contribute to the acquisition of the premises; and

(c) Maria Mischel utilised the moneys advanced to her in repayment of her advances, the loans, to facilitate the acquisition of her share of the premises.

Consequently, neither Henry Mischel nor the defendant gave Maria Mischel a half interest in the premises - as it was not his or its to give. The vendor sold the premises to the defendant and Maria Mischel. The moneys borrowed by the defendant were either gifted in part to Maria Mischel (and that gift was completed) or used to repay debts owing to Maria by Henry (or associated corporate entities). Maria then used those moneys to acquire her interest. Whether the provision of the moneys by the defendant to Maria Mischel is regarded as repayment of the loan funds originally advanced by Maria Mischel to Henry or alternatively whether it is regarded as a gift, the gift has been complete. Consequently, even if Maria Mischel were to be regarded as a volunteer, she does not require the assistance of equity to gain her property, the title (and of which she was the registered proprietor in the Torrens system registry). So if her status was as a volunteer, it is irrelevant in this context in the sense that it would not provide a basis for the application of the maxim nor affect the abhorrence of equity for joint tenancy in the present circumstances.

54 On the basis of the principles discussed and the position of equity with respect to joint ownership, the plaintiff contended that the unequal contribution made by the plaintiff and the defendant to the purchase price of the premises was a sufficient circumstance to indicate that the parties intended that there should not be a joint tenancy.[64]

55 Accepting, on the basis indicated previously, that Maria Mischel was not a volunteer and contributed to the purchase price of the premises to the extent of $207,500 which was 54% of the purchase price of the premises, there is, in my view, a circumstance sufficient to indicate an agreement between the parties, operative in equity with respect to title to the premises, for ownership other than on the basis of joint tenancy subject to survivorship.

56 The funding by Henry Mischel of the entirety of the purchase price by way of a mortgage from the Commonwealth Bank of Australia is not inconsistent with this position because $207,500 of the funds advanced on the security of that mortgage were, in effect, paid to Maria Mischel, who used those funds to meet her contribution to the purchase price of the premises. It is also consistent with this position that the evidence was that she would enjoy her half share in the premises free and clear from the repayment of Henry Mischel's loans, they being matters of his concern being the means of repaying indebtedness to his mother and funding his contribution to the purchase price of the premises.

57 The fact that the premises was mortgaged to the Commonwealth Bank of Australia in the name of both Maria Mischel and the defendant company is also consistent with this position as it is reasonable to assume that the only basis upon which the Commonwealth Bank of Australia would have advanced funds secured on the premises would have been on the basis of a mortgage of the entirety of the legal and equitable interests in the premises, a position which was achieved by its mortgage.[65]

58 Further, for the reasons to which I now turn, the fact that the parties agreed, what might be termed, partial survivorship in favour of the defendant is not inconsistent with this position because, as emphasised in Delehunt v Carmody,[66] any circumstance which indicates that the parties have agreed a position at odds with survivorship simpliciter is indicative of co-ownership other than joint tenancy at law.

59 In the alternative, the plaintiff contends that the agreement between the parties at the time of purchase of the premises, namely that the proceeds of the sale of that property, if occurring during Maria Mischel's lifetime, would be divided equally between the parties was a sufficient indication that a tenancy in common was intended. In this respect, reference was made to the commentaries and examples of manifestations of intention of this type cited in Butt's Land Law:[67]

"Words of severance are any words indicating an intention to create individual (albeit undivided) shares. Examples include: 'a one-half interest to each of' A and B;[68] 'to be divided amongst [a number of persons] in equal shares';[69] 'to be divided between' A and B;[70] 'to be distributed amongst A and B in joint and equal proportions';[71] 'to my five sons equally'.[72]

Other indications that a tenancy in common was intended included a provision in the document creating the co-ownership that capital or income advanced to a child beneficiary for maintenance and education should be debited against that child's share on eventual distribution of the property. This showed an intention to treat each child's share as distinct from the others, necessarily creating a tenancy in common and not a joint tenancy.[73]"

This is consistent with the statement of Gibbs CJ in Delehunt v Carmody[74] to which reference has already been made. True it is that the sale proceeds are money, personalty, not realty. Nevertheless, the sale proceeds clearly represent the value of the beneficial ownership in the premises and so it follows that an agreement to apportion entitlement to sale proceeds must have implications in this context in terms of manifesting an intention to divide and apportion the beneficial interest in the realty in a manner inconsistent with the concept of joint tenancy.

60 Although this issue was argued by the plaintiff as an alternative in support of its contention for a tenancy in common in the premises in equity, it is consistent with a finding that unequal contributions to acquisition of the premises produce a tenancy in common in unequal shares and, consequently, a trust whereby the parties as joint tenants at law, consistently with their Torrens title registration, hold the premises in trust for themselves as tenants in common.[75]

61 As discussed previously, the defendant challenged this position, contending that the evidence did not support an agreement between the parties to divide the sale proceeds as claimed by the plaintiff. I am, however, of the opinion that the evidence of Igo and Henry Mischel and the steps which they took with respect to bank accounts, removal arrangements and the funding of the shortfall on the Surfers Paradise property establishes the position argued for by the plaintiff. Although Maria Mischel did finance approximately 80% percent of the purchase of the Surfers Paradise property initially, this evidence does not of itself support the defendant's contention that this purchase was unconnected with and not reliant upon the sale of the premises. A natural inference from this evidence and the need for funding from Igo Mischel is that Maria Mischel's financial resources would have been exhausted without the proceeds from the sale of the premises. Thus, in a real and practical sense, the transactions were dependent upon each other. I have already indicated that the self interest and credit issues raised by the defendant in relation to the evidence of Igo and Henry do not mean that their evidence is not to be considered and evaluated in the usual way. The self interest point raised against Igo has been dealt with already. Other credit issues raised do not, on any view, detract from their evidence which was given in a balanced way. The witnesses conceded matters when recollection of matters or details was unclear and otherwise presented a very cogent and understandable account of the latter years of Maria Mischel's life, her accommodation needs, her financial assistance to Henry and concern at indebtedness to Igo. The failure on Igo and Henry's part to mention mortgages of the premises is not, in my view, significant in all the circumstances in relation to substantive matters or credit - particularly as the sale of the premises did yield surplus proceeds as anticipated. Neither do I think that Igo's assistance to Henry in holding a directorship of one or more of the companies with which Henry is or was associated was significant in the present circumstances. The same applies, in my view, in relation to Igo's recollection of dates of meetings and visits to Melbourne.

62 Finally, mention should be made of the fact that Maria Mischel died prior to the settlement of the sale of the premises. Whilst the defendant sought to attach some significance to this fact, it does not, in my opinion affect the position argued for by the plaintiff. When an enforceable contract for the sale of land is entered into, the consequence, in equity, is that the purchaser acquires at that time the fee simple estate in equity, the vendor's interest at the same time being converted into a lien over the land sold for the balance of the purchase price.[76] Consequently, from the perspective of equity, Maria Mischel's death occurred after the beneficial sale of the premises and, consequently, at a time when the agreement to apportion the sale proceeds had come into effect. This position is not affected by the passing of the legal estate in the premises by survivorship on her death because the holder of that estate, the defendant, does so subject to her beneficial interest in the proceeds of sale[77] - now, of course, part of her deceased estate.

63 It is clear that a joint tenancy may be severed by agreement or by conduct.[78] Although severance by conduct has been characterised merely as evidence of an agreement to sever, the "weight of authority supports [the latter] as having an independent existence".[79]

64 I turn now, particularly, to severance by agreement. It is clear from the authorities that a joint tenancy may be severed in equity by agreement between all the joint tenants henceforth to hold as tenants in common.[80] This includes a situation where the joint tenants agree that:

(a) they each hold an equal, one-half share in the property (a moiety); and

(b) the property is to be sold and the proceeds of sale divided accordingly.[81]

It is the agreement between the parties to "split" their property that is determinative of an intention to sever, as emphasised by the Queensland Court of Appeal in Sprott v Harper.[82]

65 Equity regards the parties as tenants in common as soon as the agreement to sever is made, even though the legal title remains in them as joint tenants, and even though the agreement contemplates the occurrence of future events.[83] For example, an agreement to sell and divide the proceeds of sale of the property between the joint tenants normally severs the joint tenancy in the absence of the actual sale or division of the proceeds. Thus, Professor Butt observes:[84]

"It seems not to matter that the contemplated events might never in fact occur; for example, an agreement between husband and wife joint tenants that each henceforth is entitled to 'a one-half' interest in the property severs the joint tenancy immediately, even though the agreement provides for sale of the property only on the remarriage of either of them or on one giving the notice at some future time that a sale is required."

If a co-owner dies before the legal title is altered to reflect the changed status, the beneficial ownership, equity will compel the survivor to hold the deceased's undivided interest on trust for the persons entitled under the deceased's will.[85] Where that interest has been sold, the proceeds of sale of that interest will be held on trust for the person beneficially entitled.

66 The position is unaltered if the agreement to sever would not be specifically enforceable.[86] Nevertheless, it would appear that the absence of valuable consideration as an obstacle to the seeking of relief by way of specific performance is unlikely to be an obstacle because valuable consideration for an agreement to sever is to be found in each party's agreement to relinquish his or her interest as joint tenant, including the right of survivorship.[87] In the present circumstances, even if there remained an issue as to whether Maria Mischel took her interest in the premises as a volunteer, the registration of her interest and the interest of the defendant as joint tenants in the Torrens system register would appear to give her a valuable right in circumstances where the defendant had not previously challenged her beneficial entitlement on the basis of this view as to the provision and nature of valuable consideration.

67 The weight of authority now indicates, in my view, that an oral agreement to sever a joint tenancy will suffice.[88] The Victorian decision of McInerney AJ in Lyons v Lyons[89] is, however, authority for the proposition that writing is required. Nevertheless, in Pfeiffle v Pfeiffle,[90] the Full Court overruled Lyons v Lyons[91] on the issue of the time at which severance occurs when future events are contemplated by the agreement because, according to Kaye J,[92] that decision was inconsistent with the decision of the English Court of Appeal in Burgess v Rawnsley.[93] The decision in Lyons v Lyons[94] is also inconsistent with the decision in the English Court of Appeal in Burgess v Rawnsley[95] and, in my view, ought not to be followed or, alternatively, should be constrained to its facts, which, critically, concern the incomplete mortgage of a co-owner's interest. The above authorities, and my views on these authorities, are helpfully summarised by Butt in the following terms:[96]

Some authorities hold that severance by course of conduct is a sub-branch of severance by agreement, the only difference being the basis on which the agreement is proven - the agreement is inferred from the conduct and dealings of all the parties.[97] On this view, conduct falling short of agreement does not sever the joint tenancy.[98] But another - and, it is thought, better - view is that severance by course of conduct is a ground of severance independent of severance by agreement.[99] (emphasis added)

68 In any event, even if writing were a requirement to evidence an agreement to hold divisible interests in joint property, the doctrine of part performance would, in my view, apply to enable the agreement to be given effect in spite of the lack of writing.[100] Further, depending upon the circumstances, an equitable estoppel may arise which would prevent another joint tenant from resiling from the position that there had been an agreement to sell and to designate entitlements in the sale proceeds from the subject property.[101]

69 A joint tenancy may also be severed in equity by a course of conduct by all joint tenants from which a commonly held belief or assumption that the interests are held in undivided shares without a right of survivorship may be inferred. Entry into a contract of any sale of the subject property by all joint tenants does not sever the joint tenancy, but, rather, converts the joint interest in land to a joint interest in the sale proceeds;[102] the effect of the sale merely being to convert the joint interest from realty to personalty. Nevertheless, actions such as paying the sale proceeds into their separate bank accounts or otherwise unequivocally designating separate entitlements to the sale proceeds on receipt demonstrate that the joint tenants regarded themselves as entitled to separate portions.[103]

70 I turn now to further consider and apply these principles with respect to severance by agreement and by conduct in the present circumstances.

71 The agreement between Maria Mischel and Henry Mischel on behalf of the defendant was an ongoing one for the sale and division of the proceeds of sale of the premises if and when Maria Mischel decided she wanted or needed to sell the premises in her lifetime. Accordingly, it follows, in my view, that either the joint tenancy was severed immediately after the premises was acquired or at the time when Maria Mischel decided to put the agreement into effect by taking steps to sell the premises and obtain a division of the proceeds of sale as agreed. The evidence in support of this agreement is provided by the written and oral evidence of both Igo and Henry Mischel. Henry Mischel was not cross-examined at all about the events of 2011, save for it being put to him that his mother was not aware of the sale of the premises. This suggestion he rebutted in some detail. Similarly, Igo was not cross-examined at all about his discussions, save for a brief inquiry in relation to the events of 14 August 2011.[104] In any event, I am satisfied that the 'objective evidence' relied upon by the Plaintiff supports the plaintiff's contention the joint tenancy was severed by conduct. This evidence is Maria Michel's execution of a contract of sale for the Surfers Paradise property (through her attorney) on 18 May 2011, the execution of a contract of sale for the premises (through her attorney) on 29 May 2011 (11 days later), the opening of a separate bank account (through her attorney) in Maria Mischel's name on 1 August 2011 for the purpose of receiving her share of the settlement proceeds of the premises, and the collection and relocation of Maria Mischel's belongings from the premises to the Surfers Paradise property on 5 August 2011, prior to her passing on 15 August 2011.

72 If there is in fact a requirement for an agreement to sever the joint tenancy to be in writing as a result of the requirements of s 126 of the Instruments Act 1958 (Vic), then I accept the plaintiff's contention that the sale of the premises in combination with the designation of separate entitlements (or moieties) to the premises and the proceeds of sale; the purchase of the Surfers Paradise property with a loan from Igo Mischel (to be repaid from Maria Mischel's share of the sale price of the premises); and the opening of an account to receive the designated share of the proceed of sale of the premises amount to sufficient acts of part performance so that the agreement is efficacious and enforceable in equity to sever the joint tenancy at law.

73 In terms of severance by conduct, I am of the view that Maria and Henry Mischel (the latter on behalf of the defendant) showed by their conduct that they regarded themselves as each entitled to a moiety or equal half-share in the premises and the proceeds of sale, even though the financing of the purchase was by Henry Mischel utilising a secured advance from the Commonwealth Bank of Australia, having regard to the contribution of at least half the purchase price at the outset by Maria Mischel as discussed previously. Additionally, Henry Mischel declared, as early as December 2010 (in an inventory of assets and liabilities provided by him to the Court in respect to an application for freezing orders against him in these proceedings), a divided interest in only one half of the premises.[105] For her part, Maria Mischel, through her attorney Igo Mischel, purchased the Surfers Paradise property in May 2011 and took a loan from Igo that could only be repaid from her share in the proceeds of sale of the premises and on 1 August 2011; and a new and separate bank account was opened into which her half-share of the sale price was to be paid.

74 In my view, these events at least constitute "a general dealing, sufficient to manifest the intention to divide the whole".[106] Again, the fact that the advance of funds from the Commonwealth Bank of Australia, which were secured by way of the first mortgage of the premises, were to be deducted from the defendant's half-share of the proceeds of sale makes no difference to this position. As discussed previously, it is merely a reflection of the fact that Maria Mischel had contributed her half-share of the purchase price at least in full. Equity would regard her as having an equitable interest in that portion of the proceeds of sale which reflected her contribution.[107]

75 For the preceding reasons, I am satisfied that as at the date of her death, Maria Mischel was entitled to a half-share of the proceeds of sale of the premises either because she was, at the time she acquired an interest in the premises, a tenant in common in equity as to one-half share, or because any joint tenancy was severed by agreement or conduct prior to her death, with the result that she thereupon became beneficially entitled to the half-share of the proceeds of sale of the premises. There will be orders in favour of the plaintiff to give effect to these reasons.

76 I reserve the question of costs to enable the parties to consider these reasons and make submissions on that issue.

[1] Being the land more particularly described in Certificate of Title Volume 10451 Folio 073.

[2] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 27.

[3] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 28.

[4] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 28.

[5] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 20.

[6] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 35.

[7] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 37.

[8] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 38.

[9] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 38.

[10] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 39.

[11] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 46.

[12] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 46.

[13] Outline of Submissions of the Defendant (21 June 2012), paragraph 28.

[15] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 51.

[17] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 55.

[18] Affidavit of Igo Mischel sworn 22 December 2011, paragraph 55.

[19] Outline of Submissions of the Defendant (21 June 2012), paragraph 7.

[20] Outline of Submissions of the Defendant (21 June 2012), paragraph 9.

[21] Outline of Submissions of the Defendant (21 June 2012), paragraph 31 (set out below, see footnote 36).

[22] See, eg, Outline of Submissions of the Defendant (21 June 2012), paragraphs 19-25.

[23] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 25 (the first mortgage to CBA securing $336,500 and the second to CBA securing $51,000).

[24] See Tyler Young and Croft, Fisher and Lightwood's Law of Mortgage (2nd Aust ed, 2005, Lexis Nexis Butterworths), 788 [37.6].

[25] See Exhibits 14 (Mortgage of Land between Mischel Holdings Pty Ltd and Commonwealth Bank of Australia) and Exhibit 15 (Commonwealth Bank of Australia letter of offer dated 31 May 2005).

[26] Exhibit 15 (Commonwealth Bank of Australia letter of offer dated 31 May 2005).

[27] Exhibit 13 (Affidavit of Henry Mischel dated 7 February 2011 (filed in proceeding number S CI 2009 10897)). There is no direct evidence that Henry Mischel was ever a director or shareholder of Zigmo Australia Pty Ltd. Henry Mischel states that he is a director of Mischel & Co Pty Ltd, Mischel Holdings Pty Ltd, Ballantyne Chambers Pty Ltd and Mischel & Co Advisory Pty Ltd (see Exhibit 12 (Affidavit of Henry Mischel sworn 21 December 2010, paragraph 1)).

[28] In Supreme Court of Victoria Proceeding No. 2011 1569 (Mr Gloss Pty Ltd & Anor v Henry Mischel & Ors), the Honourable Justice Bell ordered by the consent on 20 October 2011, among other things, that the mortgages in favour of Zigmo Australia Pty Ltd over the premises (mortgage no. AH853236D) and two other properties are void ab initio and unenforceable.

[29] Outline of Submissions of the Defendant (21 June 2012), paragraph 23.

[30] Outline of Submissions of the Defendant (21 June 2012), paragraph 28.

[31] See above, paragraph 20.

[32] Outline of Submissions of the Defendant (21 June 2012), paragraph 28.

[33] Outline of Submissions of the Defendant (21 June 2012), paragraph 29.

[34] Outline of Submissions of the Defendant (21 June 2012), paragraph 30.

[35] See above, paragraph 30.

[36] In the Outline of Submissions of the Defendant (21 June 2012), it was submitted as follows:

"31. Factors which militate strongly against Henry Mischel's evidence of the original arrangement being accepted are as follows:

(a) He was convicted of 47 counts of obtaining financial advantage by deception in 1993;

(b) In August 2010, he conceded liability in the Mr Gloss proceedings in respect of extremely serious allegations that were made against him as set out in the Further Amended Statement of Claim. In particular, 51(b)(2), 52(b)(2), 53, 54, 55, 56, 57, 68 & 59 allege unauthorised transfers of funds from the Plaintiffs' account into the Mischel & Co Pty Ltd account. These allegations are allegations of misappropriation of funds, in respect of which liability was conceded by Henry Mischel and Mischel & Co Pty Ltd in August 2011;

(c) Mr Gloss Pty Ltd and Knowledge Services Pty Ltd also commenced a proceeding against Henry Mischel, his companies and Zigmo Australia Pty Ltd alleging that various loans and securities granted to Zigmo were granted fraudulently in order to defeat creditors in breach of section 172 of the Property Law Act. Again, these allegations were of the utmost seriousness in nature. In October 2011, each of Mr Mischel, Zigmo and his companies consented to Orders being made in that proceeding which declared all of the Zigmo securities (whenever and whomever they were signed), void ab initio, the relief sought in the claim; and

(d) Mr Henry Mischel has a propensity to prepare documents favouring his position and maintaining them to be the truth until it becomes impossible to maintain the truthfulness of the documents prepared."

[38] See Young, Croft and Smith, On Equity (Lawbook Co, 2009), 594 [8.390]; and Butt, Land Law (6th ed, Lawbook Co, 2010), 228 [14 14]. While the common law preferred joint tenancy because the effect of survivorship was to limit the number of persons from whom feudal obligations were due, equity preferred tenancy in common, regarding survivorship as "odious": see Gray and Gray Land Law (5th ed, OUP, 2009), 937, [7.4.54] and [7.4.55].

[39] Young, Croft and Smith, On Equity (Lawbook Co, 2009), 594 [8.390].

[40] See, eg, Blackstone's Commentaries, Bk II p 182.

[41] Wright v Gibbons [1949] HCA 3; (1949) 78 CLR 313, 330; ;and Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471, 479 [19].

[42] [1949] HCA 3; (1949) 78 CLR 313.

[43] See Harpum, Bridge and Dixon, Megarry and Wade, the Law of Real Property (7th ed, Thomson Sweet and Maxwell, 2008), 500-1, [13-026].

[44] See, particularly, s 42 of that Act.

[45] Young, Croft and Smith, On Equity (Lawbook Co, 2009), 596 [8.410]. While the common law preferred joint tenancy because the effect of survivorship was to limit the number of persons from whom feudal obligations were due, equity preferred tenancy in common, regarding survivorship as "odious": see Gray and Gray Land Law (5th ed, OUP, 2009), 937, [7.4.54] and [7.4.55].

[46] [1986] HCA 67; (1986) 161 CLR 464.

[47] [1986] HCA 67; (1986) 161 CLR 464, 472-3.

[51] The Statement of Affairs of Henry Mischel dated 22 September 1993 (Exhibit 7) does not list Maria Mischel as a personal creditor of Henry Mischel. The absence of Maria Mischel as a personal creditor of Henry Mischel was relied upon by the Plaintiff as evidence that Maria Mischel did not lend monies to Henry Mischel personally. While Henry Mischel admits in his Statement of Affairs that he is unable to give full and complete details of his financial affairs as a consequence of his incarceration, the Statement of Affairs is relevant to the extent that it supports Henry's evidence during the course of this proceeding that Maria Mischel was not his creditor personally. In addition, the Statement of Financial Affairs does not evidence that Mischel Holdings Pty Ltd was placed into liquidation on or about the date of Henry Mischel's bankruptcy in 1993. While the Statement of Affairs states that two companies of Henry Mischel had been placed into receivership by 22 September 1993, no disclosure is made of Mischel Holdings Pty Ltd or its liqudation.

[52] See Defendant's Supplementary Submissions (25 June 2012), paragraphs 4 and 5; referring in this respect to Transcript, p 49.07 - .19.].

[53] [1990] HCA 12; (1989) 169 CLR 540.

[54] [1990] HCA 12; (1989) 169 CLR 540, 557

[55] [2001] WASC 201; (2001) 24 WAR 299.

[56] [2001] WASC 201; (2001) 24 WAR 299, 338 [203].

[57] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 12.

[58] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 18.

[59] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 20.

[60] Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract ("Cheshire and Fifoot") (9th Austn ed, Lexis Nexis Butterworths, 2008), 175-6,[4.10].

[61] (1886) 32 ChD 266 (CA), 291; and see Cheshire and Fifoot, 192 [4.25]; and Carter Peden and Tolhurst, Contract Law in Australia (5th ed, Lexis Nexis Butterworths, 2007), 137 [6.51], [6.52].

[62] See Cheshire and Fifoot, 192-4, [4.26]; and Contract Law in Australia, 137-8, [6.52], [6.53].

[63] Blackett v Darcy [2005] NSWSC 65; (2005) 62 NSWLR 392, 397; and see Young, Croft and Smith, On Equity (Lawbook Co, 2009), 734-737, [11.160]-[11.180].

[64] See Delehunt v Carmody [1986] HCA 67; (1986) 161 CLR 464, 472-3 (Gibbs CJ); Gray and Gray, Land Law (5th ed, OUP, 2009), 939 [7.4.59]; and Burn and Cartwright, Cheshire and Burn's Modern Law of Real Property (17th ed, OUP, 2006), 456.

[65] And having regard to the difficulties for a mortgagee in mortgaging a partial interest in co-owned property; see Tyler, Young and Croft, Fisher and Lightwoods Law of Mortgage (2nd Aust ed, 2005, Lexis Nexis Butterworths), 788 [37.6].

[66] [1986] HCA 67; (1986) 161 CLR 464 (Gibbs CJ); and see Burn and Cartwright, Cheshire and Burn's Modern Law of Real Property (17th ed, OUP, 2006), 461.

[67] Butt Land Law (6th ed, Lawbook Co, 2010), 228 [14 14]; and see Burn and Cartwright, Cheshire and Burn's Modern Law of Real Property (17th ed, OUP, 2006), 461; and Harpum, Bridge and Dixon, Megarry and Wade, The Law of Real Property, (7th ed, Thomson Sweet and Maxwell, 2008), 496-7 [13-017], [13-018].

[68] Pfeiffle v Pfeiffle (1989) 13 Fam LR 692, 707-713.

[69] Payne v Webb (1874) LR 19 Eq 26.

[70] Peat v Chapman [1750] EngR 166; (1750) 1 Ves Sen 542; 27 ER 1193.

[71] Ettricke v Ettricke [1767] EngR 95; (1767) Amb 656; 27 ER 426.

[72] Rentoul v Rentoul [1944] VicLawRp 40; [1944] VLR 205. For other examples, see Megarry and Wade, Real Property, para [13-017].

[73] Corin v Patton [1990] HCA 12; (1990) 169 CLR 540, 573 per Deane J.

[74] [1986] HCA 67; (1986) 161 CLR 464. 472-3 (Gibbs CJ).

[75] And see Allan v Snyder [1977] 2 NSWLR 685 and Shepherd v Doolan [2005] NSWSC 42.

[76] A position which applies with respect to both general law land and land under the operation of the Torrens system: see Lysaght v Edwards (1876) 2 CLD 499; and Barry v Heider [1914] HCA 79; (1914) 19 CLR 197; and see CCH Victorian Conveyancing Law and Practice 17-050 to 17-090.

[77] See D. Mendes da Costa, "Co-ownership under Victorian Land Law", (1962) 3 MULR 307; and see Walton v Forsyth (1984) NSW ConvR 55-214.

[78] Williams v Hensman (1861) 1 J & H, 557-558; 70 ER, 867, applied in Corin v Paton [1990] HCA 12; (1990) 169 CLR 540, 546-547. See also Butt, Land Law (Lawbook Co 2010, 6th ed), 248-61, [14 57]-[14 86].

[79] Saleeba v Wilke [2007] QSC 298, [36] (Chesterman J); Public Trustee v Pfeiffle [1991] VicRp 3; [1991] 1 VR 19, 35 (Ormiston J) (also cited as Pfeiffle v Pfeiffle (1989) 13 Fam LR 692 (VSCFC), 707 (Ormiston J)).

[80] Wright v Gibbons [1949] HCA 3; (1949) 78 CLR 313, 322.

[81] Public Trustee v Pfeiffle [1991] VicRp 3; [1991] 1 VR 19, 24 (Kaye J); 31-32 (McGarvie J); 35 (Ormiston J); Pfeiffle v Pfeiffle (1989) 13 Fam LR 692 (VSCFC), 696 (Kaye J); 702-703 (McGarvie J); 707 (Ormiston J).

[82] [2002] ANZ ConvR 54; [2000] QCA 391; and see also Dr Kristy Richardson and Kate Galloway, "Severing a joint tenancy: A Queensland analysis" (2009) 16 Australian Property Law Journal 245, 248, citing Sprott v Harper [2002] ANZ ConvR 54, [10]:

"... the dominant factor in determining that there was a mutual intention to sever the joint tenancy was the agreement reached between Mr and Mrs Harper to split their property and designate their entitlement".

[83] Public Trustee v Pfeiffle [1991] VicRp 3; [1991] 1 VR 19, 24 (Kaye J); 31-32 (McGarvie J); 35 (Ormiston J); Pfeiffle v Pfeiffle (1989) 13 Fam LR 692 (VSCFC), 696 (Kaye J); 702-703 (McGarvie J); 707 (Ormiston J).

[84] See Butt, Land Law (6th ed, Lawbook Co, 2010), 247 [14 80] citing Pfeiffle v Pfeiffle (1989) 13 Fam LR 692 (VSCFC).

[85] See, for example, Dominicus v Spano (1998) 9 BPR 16,279.

[86] Burgess v Rawnsley [1975] Ch 429 (CA), 446; Magill v Magill (1993) NSW ConvR 55-663, 59,795.

[87] Corin v Paton [1990] HCA 12; (1990) 169 CLR 540, 574 (Deane J); see also Butt Land Law, (6th ed, Lawbook Co, 2010), 257-8 [14 78].

[88] Burgess v Rawnsley [1975] Ch 429 (CA); and see Butt Land Law (6th ed, Lawbook Co, 2010), 257-8, [14 78].

[89] [1967] VR 160, 171.

[90] (1989) 13 Fam LR 602 (VSCFC).

[91] [1967] VR 160.

[92] See Public Trustee v Pfeiffle [1991] VicRp 3; [1991] 1 VR 19, 28 (Kaye J); Pfeiffle v Pfeiffle (1989) 13 Fam LR 692 (VSCFC), 700 (Kaye J).

[93] [1975] Ch 429 (CA).

[94] [1967] VR 160.

[95] [1975] Ch 429 (CA).

[96] Butt, Land Law (6th ed, Lawbook Co, 2010), 259 [14 82]

[97] Re Wilks [1891] 3 Ch 59, 64; McLean, "Severance of Joint Tenancies" (1979) 57 Can Bar Review 1, 16.

[98] Lyons v Lyons [1967] VR 169, 172; Nielson-Jones v Fedden [1975] Ch 222, 231; Tompkins Estate v Tomkins (1992) 86 DLR (4th) 759; Saleeba v Wilkie [2007] QSC 298 [36].

[99] Burgess v Rawnsley [1975] Ch 429; Public Trustee v Pfeiffle [1991] VicRp 3; [1991] 1 VR 19, 35; Pfeiffle v Pheiffle (1989) 13 Fam LR 692, 707; Sprott v Harper [2000] QCA 391, [7]-[8]; On v On [2002] NTSC 18, [17]-[25]; Scott v Scott [2009] NSWSC 567, [102] (no agreement to sever, but severance by course of conduct).

[100] See Lyons v Lyons [1967] VR 160, 171; and see JC Williamson Ltd v Lukey and Mulholland [1931] HCA 15; (1931) 45 CLR 282.

[101] Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387.

[102] Re Allingham [1932] VicLawRp 66; [1932] VLR 469; Abela v Public Trustee [1983] 1 NSWLR 308, 314; contra Crescendo Management Pty Ltd v Westpac Banking Corp Ltd (1989) 19 NSWLR 40, 46 (McHugh JA).

[103] Butt Land Law, (6th ed, Lawbook Co, 2010), 259-60 [14 82].

[105] Affidavit of Henry Mischel sworn 11 November 2011, paragraph 39; and see Ex HM-8 (Inventory of Assets and Liabilities).

[106] Crooke v De Vandes (1805) I J & H 546, 561; [1861] EngR 701; 70 ER 862, 868; and see Butt Land Law, (6th ed, Lawbook Co, 2010), 260 [14 84].

[107] Mushinski v Dodds [1985] HCA 78; (1985) 160 CLR 583; Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137.