Ghalayini v Ghalayini

The plaintiffs, siblings Christopher Ghalayini and Diana Katsiaras (formerly Ghalayini), have brought these proceedings against the first defendant, their father Michael Ghalayini, and the second defendant, the Registrar-General for New South Wales, seeking to prevent Michael from severing a joint tenancy in the property bearing Land Title Reference X/XXX and situated at X Martin Street, Roselands, New South Wales (Roselands property).

For convenience, I will refer to members of the Ghalayini family by their first names without intending any disrespect or over-familiarity.

Unfortunately, Christopher, Diana and Michael have fallen into dispute over whether Michael made an agreement with Christopher and Diana not to sever their joint tenancy in the Roselands property. Christopher and Diana assert that there is such an agreement. Michael denies any such agreement. The Registrar-General has entered a submitting appearance so submits to the making of any orders or the giving or entry of judgment in respect of the claim, save as to costs.

At the hearing, only the affidavits of Christopher and Diana were read and a short cross-examination of Diana was conducted. No affidavits of Michael were read. There was no challenge to any of the evidence given by Christopher and Diana.

For the reasons set out below, I have found that Christopher, Diana and Michael did make an agreement not to sever the joint tenancy in the Roselands property. I will make appropriate orders in accordance with that finding.

Michael is now 74 years old (T4). Michael worked as a train guard for many years and then as a cleaner.

Michael was married to his late wife, Joumana Ghalayini.

Joumana worked as a cleaner and operated a canteen for profit at a local school.

Michael and Joumana had three adult children: in descending age order, Richard Ghalayini, Diana and Christopher.

Diana is married to Louie Katsiaras.

In about November 1988, Michael and Joumana acquired a property in Culburra Beach, New South Wales (Culburra Beach property) as joint tenants.

In about December 1998, Michael and Joumana acquired a second property in Cambridge Gardens, New South Wales (Cambridge Gardens property), also as joint tenants.

In about 2013, Michael and Joumana separated but continued to spend considerable time with each other.

Following their separation, in 2013 the Cambridge Gardens property was transferred to Joumana and the Culburra Beach property was transferred to Michael.

On 18 August 2019, Joumana died.

On 4 December 2019, probate of Joumana’s will was granted by the court. Michael was appointed as the executor under Joumana’s will. Joumana’s will is not in evidence.

For short periods after the death of Joumana, Michael resided at different times with Diana and her family in Kingsgrove, with Christopher and his family at Jordan Springs and at Michael’s own residence being the Culburra Beach property.

On 20 December 2019, the Cambridge Gardens property was transferred to Michael under Joumana’s will.

Shortly after Joumana died, while Michael was staying with Christopher and his family, Michael said to Christopher words to the following effect:

In about December 2019, Diana and Michael had a conversation in a mix of English and Arabic. Diana and Michael are both fluent in English and Arabic. The conversation took place in words to the following effect:

In about January 2020, Diana and Michael had a conversation in words to the following effect:

In about January 2020, Diana, Michael and Louie had a conversation in words to the following effect:

In about January 2020, Diana and Michael had a conversation in words to the following effect:

On 26 February 2020, Michael transferred the Culburra Beach property to Christopher. The transfer records Michael’s receipt of $400,000 in consideration.

On 23 March 2020, Michael transferred the Cambridge Gardens property to Natalie Lorence and Zachary James. The transfer records Michael’s receipt of $680,000 in consideration.

In around March 2020, Michael was actively looking for a house to buy, often accompanied by Diana to open house inspections. Christopher also contributed significantly to the process of purchasing the Roselands property.

Christopher, Diana and Michael all inspected the Roselands property. At the time of their inspection, the Roselands property was a fully renovated bungalow with a newly built granny flat.

In about March 2020, Christopher, Diana and Michael had a conversation in which Michael said words to the following effect:

I infer from this statement that the “involvement” Michael may have needed was a financial contribution from each of Christopher and Diana towards the purchase price of the new property.

In about March 2020, Christopher and Michael had a conversation in words to the following effect:

The reference to “Rania” in this conversation was to Michael’s proposed new wife. There is no evidence of Rania’s surname or when Michael and Rania agreed to marry.

In about March 2020, Christopher, Diana and Michael had a conversation in words to the following effect:

In March 2020, Christopher, Diana and Michael drove to see a solicitor in Dee Why. On their way, they had a conversation in words to the following effect:

There is no evidence as to whether any meeting did take place with a solicitor in Dee Why or, if such a meeting did occur, what took place during it.

Before the exchange of the contract of sale for the Roselands property, Christopher, Diana and Michael had a conversation in words to the following effect:

In April 2020, Christopher and Michael had a conversation in words to the following effect:

Diana gave evidence of a similar conversation that occurred sometime prior to settlement of the Roselands property, albeit with differences as to who spoke the similar words, in words to the following effect:

On 15 April 2020 at 8:35pm, Diana sent an email to Brendan Sedrak (a solicitor from Legal One in Parramatta), copied to Michael, Christopher and Niki Trimmis of Wealth3 (an adviser to Diana: T5), which stated:

As reflected in this email, in cross-examination Diana said that Niki was someone she was having conversations with about the Roselands property, Niki had proposed that the purchase of it be as tenants-in-common, with 80% in Michael’s name and 20% between Christopher and Diana, and Diana wanted some guidance from Niki in the coming days (T5).

On 16 April 2020 at 12:03pm, Mr Sedrak sent an email to Diana, in reply to her email of 15 April 2020, which stated:

On 16 April 2020 at 1:03pm, Diana responded by email to Mr Sedrak, copied to Michael, Christopher, Niki and others, which stated:

On 16 April 2020, the contract of sale for the Roselands property was exchanged, having been executed by Christopher, Diana and Michael (T4–5). The contract of sale is not in evidence, which is extremely strange as this case centrally concerns that very transaction.

On a date sometime between the exchange of the contract of sale for the Roselands property on 16 April 2020 and settlement on 20 May 2020, most likely on 18 May 2020, Christopher, Diana and Michael held a meeting with Mr Sedrak. At the meeting with Mr Sedrak, he advised Christopher, Diana and Michael that they could purchase the Roselands property as joint tenants with the effect that the Roselands property would remain in the ownership of their family by survivorship.

At some time after the meeting with Mr Sedrak, Christopher, Diana and Michael had a conversation in words to the following effect:

Prior to the completion of the purchase of the Roselands property, Christopher, Diana and Michael had a conversation in words the following effect:

Christopher and Diana then each transferred $60,000 to the trust account of Legal One for the settlement of the Roselands property.

On 19 May 2020 at 11:52am, Mr Sedrak sent an email to Christopher, Diana and Michael which stated (emphasis in original):

On 19 May 2020 at 12:06pm, Christopher sent an email to Mr Sedrak, Diana and Michael in response to Mr Sedrak’s email at 11:54am, which stated:

On 19 May 2020, also at 12:06pm, Diana sent an email to Mr Sedrak, copied Christopher and Michael, in response to Mr Sedrak’s email at 11:54am, which stated:

Given that Mr Sedrak had asked for joint instructions whether the purchase of the Roselands property would proceed as joint tenants or tenants-in-common, these two emails did not address his request in terms.

On 19 May 2020 at 4:57pm, Mr Sedrak sent a further email to Christopher, Diana and Michael which stated:

Sometime after Mr Sedrak’s first email of 19 May 2020, Christopher and Michael had a conversation in words to the following effect:

On 20 May 2020 at 8:41am, Mr Sedrak sent another email to Christopher, Diana and Michael which stated:

On 20 May 2020 at 8:48am, Christopher sent an email to Mr Sedrak, Michael and Diana which stated:

On 20 May 2020 at 9:03am, Diana and Michael exchanged the following text messages:

On 20 May 2020 at 10:17am, Michael sent an email to Mr Sedrak which stated:

On 20 May 2020, settlement of the purchase of the Roselands property took place for a purchase price of $1,105,000, with Christopher, Diana and Michael becoming the registered proprietors as joint tenants.

Diana and Christopher each paid $60,000 towards the purchase price of the Roselands property, with the balance of $985,000 being paid by Michael.

It appears that Michael and Rania have now married, although the date on which they did so is not in evidence.

Before the marriage of Michael and Rania, Michael said to Diana words to the following effect:

On 3 December 2024, Michael completed a Transfer Severing Joint Tenancy in relation to the Roselands property and made an accompanying statutory declaration requesting that the Registrar-General record the Transfer Severing Joint Tenancy on the title to the Roselands property. The statutory declaration included the following statement:

The statutory declaration also identified Christopher and Diana as the other joint tenants of the Roselands property.

On 18 December 2024, Christopher received a letter dated 10 December 2024 from NSW Land Registry Services, which attached the Transfer Severing Joint Tenancy lodged at NSW Land Registry Services affecting the Roselands property. The letter advised Christopher that the Transfer Severing Joint Tenancy will sever the tenancy between Michael and Christopher and that if Christopher did not lodge a court order stopping NSW Land Registry Services from registering the Transfer Severing Joint Tenancy before 9 January 2025, it would be registered, and the joint tenancy would then be severed.

On 27 December 2024, Diana received the Transfer Severing Joint Tenancy from NSW Land Registry Services.

On 23 December 2024, Christopher and Diana commenced these proceedings by filing the summons.

On 6 January 2025, the proceedings came before Ball JA at which time orders were made for the service of evidence and submissions, and interlocutory injunctions were granted in the following terms:

On 3 February 2025, the proceedings came before Hammerschlag CJ in Eq, when further orders were made for the service of evidence and the preparation of the proceedings for trial before me, as well as the continuation of interlocutory injunctions in the following terms:

This case involves the application of legal principles relating to joint tenancy, severance of a joint tenancy, the operation of s 97 of the Real Property Act 1900 (NSW) (RPA) and restraint on the severance of a joint tenancy based on an alleged contract said to have been supported by consideration. The applicable legal principles are outlined below.

The legal principles concerning joint tenancy are well established.

These principles, together with the language and theory which frequently attends their application, could today be fairly described as archaic. In Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; [2015] HCA 2, French CJ, Hayne, Bell and Gageler JJ observed at [47] (references omitted):

In a similar vein, in Corin v Patton (1990) 169 CLR 540, Deane J at 572–3; [1990] HCA 12, stated that:

The RPA does not alter the key incidents of joint tenancy as determined by the common law and any other relevant statute: Wright v Gibbons (1949) 78 CLR 313, Latham CJ at 324, Rich J at 326, Dixon J at 328; [1949] HCA 3; Freed v Taffel [1984] 2 NSWLR 322, Helsham CJ in Eq at 324. The RPA preserves the common law of joint tenancy under the descriptor “joint proprietors” and “joint proprietorship of a registered title is in the nature of a joint tenancy, at least until it is severed”: Cassegrain, Keane J at [115], and see also French CJ, Hayne, Bell and Gageler JJ at [53].

In Wright v Gibbons, Latham CJ at 323 distilled the key incidents of joint tenancy into a single paragraph:

For present purposes, it is settled law that:

Relevantly, a joint tenancy may be severed unilaterally, including by a transfer from one joint tenant to themselves, under s 97 of the RPA. This provision is designed to facilitate severance without necessarily alienating the respective interest to a third party.

Section 97 of the RPA provides as follows (emphasis added):

A unilateral transfer lodged in accordance with s 97 of the RPA does not effect severance, either at law or in equity, until it is registered. The severance occurs by operation of statute and is contingent upon registration: McCoy, Brennan J at [27].

The moment of registration is distinct from when the transfer is lodged. When the transfer is lodged, the Registrar-General is required under s 97(5) of the RPA to give notice to all other joint tenants of the lodgment of the dealing for registration, and at this stage it is only a “proposed severance”.

In Goyal v Chandra (2006) 68 NSWLR 313; [2006] NSWSC 239, Brereton J at [15]–[29] extensively considered the position – and the general lack of authority – with respect to contractual or equitable constraints on the right of a joint tenant to sever a joint tenancy.

In Goyal, Brereton J considered, without deciding, that an agreement between joint tenants not to sever could be enforceable and operate as a restraint upon severance by imposing an obligation in equity not to do so. In that case, a husband transferred property he solely owned to himself and his wife as joint tenants. Both the husband and the wife had previously contributed funds to the renovation of the property and availed themselves of the advice of a solicitor as to the nature and consequences of joint tenancy. It was contended by the husband in that case that there existed an understanding between the parties, implicit if not explicit, that the joint tenancy would be left intact, so that the survivor would take the property on the other’s death. The primary claim advanced was one in estoppel. Both the husband and wife had individual loans secured by their interest in property, with each guaranteeing the debt of the other, presumably to negate what has been called the “gamble of the tontine”: Corin v Paton, Deane J at 573. Unfortunately, the wife fell ill and, being unable to meet her repayment obligations, the husband met those obligations in her stead. The relationship later deteriorated and the pair separated. The wife sought to sever the joint tenancy by unilateral transfer pursuant to s 97 of the RPA and the husband sought to restrain that transfer from being registered.

I note that Goyal was a case for interlocutory relief which – in the unique circumstances of that case, where the matter was headed for “inevitable” proceedings under the Family Law Act 1975 (Cth) in any event – was ultimately declined for want of utility and so the comments of Brereton J are strictly obiter. Nevertheless, his Honour made several useful observations, including the following (emphasis in original):

James v Barker [2009] NSWSC 725 is authority for the proposition that a joint tenant may bind themselves to deal with their interest only in a particular way — namely, by leaving it to pass by way of survivorship to the other. In this case, it was contended that two joint tenants entered into an agreement not to sever the joint tenancy or sell the property with the mutual intention being that the property would pass to the survivor and, ultimately, provide a home for their son. Claims in estoppel and constructive trust were pleaded as alternatives to the claim in contract. The promise not to sever the joint tenancy was expressed orally and colloquially as between family members, being an agreement that the relevant property “will never be sold” with the mutual intention that it remain in the family and pass to their son. Tamberlin AJ was satisfied that such a contract existed and found for the plaintiff on that basis, without considering the estoppel and constructive trust arguments. In doing so, at [27]–[28], his Honour quoted with apparent approval the comments of Brereton J as expressed in Goyal at [23] and [26], which are both extracted above.

The proposition that a joint tenant could be restrained from severing by virtue of an agreement or assumption that it would not be severed was also considered by White J in Burton v Prior [2015] NSWSC 295. While such an agreement or assumption was not supported by the evidence in that case, his Honour considered the proposition without any explicit disapproval before proceeding to, appropriately, distinguish Goyal – which was cited in support – on its facts.

Very recently, in Smith v Smith [2025] NSWSC 287, Meek J considered the same proposition, again without any hint of disapproval, in an application for urgent injunctive relief – which was ultimately granted – and stated at [12]:

Before the High Court’s judgment in Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39, the principles regarding inferences arising from express terms, as distinguished from implications giving rise to implied terms, of a contract were summarised in three Victorian Court of Appeal decisions, the first being Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190, by Santamaria, Kyrou and Ashley JJA at [176]–[179] (references omitted):

Those principles were applied in Uren v Uren [2018] VSCA 141, by the same judges comprising the bench in Grocon (Santamaria, Kyrou and Ashley JJA) at [61]–[62].

Further guidance on the process involved in inferring an express term of a contract was provided in Regreen Asset Holdings v Castricum Brothers [2015] VSCA 286, in which Warren CJ, Kyrou and McLeish JJA said at [74]:

In Realestate.com.au, different remarks were made by members of the High Court on the notion of there being “inferred terms” of a contract.

Kiefel CJ and Gageler J at [15]–[25] set out the process by which the terms of a contract are ascertained and the role of inferences and implications (referring to the approaches of Deane J in Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15 and Dawson and Toohey JJ in Breen v Williams (1996) 186 CLR 71; [1996] HCA 57), emphasising at [15] that:

In reference to the approach taken by Deane J in Hawkins, Kiefel CJ and Gageler J then stated at [22] (references omitted):

In a separate judgment delivered in Realestate.com.au, Gordon J considered that while the rights and liabilities of the parties to a contract are determined objectively, there is a difference in approach between a formal written document comprising the contract and an informal contract (at [43]–[45]). At [45]–[47], Gordon J identified the relevant approach when a court is confronted with an informal contract, as follows (references omitted):

Gordon J said that the judgment of Deane J in Hawkins is to be approached with caution because it was decided before the “ascendancy of the objective theory of contract” (at [50]). Gordon J rejected rigid classifications of “express”, “inferred”, or “implied” terms stating that “whether the description “inferred” or “implied” is correct depends entirely on what “inferred” or “implied” is intended to convey” (at [73]).

In their joint judgment in Realestate.com.au, Edelman and Steward JJ also emphasised the objective theory of contract and proceeded to identify “two very basic errors”, stating at [83] (references omitted):

The first error identified by Edelman and Steward JJ is that there is no third category of contract terms known as an “inferred term”, stating that a contract term is either expressly stated or implied through conduct and surrounding circumstances (at [84]). Edelman and Steward JJ said that the process of inference is important in determining the existence of express and implied terms, and the process of drawing inferences identifies express terms or the content of an implication (at [85]).

The second error according to Edelman and Steward JJ is that “[i]t is not analytically right” to say that there is a separate category of informal contracts; that is, contracts that are not entirely evidenced in a written form are not governed by different rules (at [86]).

Drawing all these variations of expression of principle together, the common elements in the separate judgments in Realestate.com.au are that what the parties are taken to have agreed is to be objectively discerned by analysing their words and conduct in all the circumstances in which they occurred and deciding what a reasonable person would take them to mean. In doing so, inferences may be drawn as part of those circumstances.

It is trite law that – other than a promise formalised and executed by way of deed – a promise will lack contractual force unless it is supported by consideration. Consideration is, after all, an “essential requirement” of contract formation: Beaton v McDivitt (1987) 13 NSWLR 162, Kirby P at 168.

Consideration is the price paid in return for the promisor’s promise; it is the price for which that promise is bought. This was expressed with simplicity by Dunedin LJ in Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847, at 855, where his Lordship, quoting Sir Frederik Pollock, Pollock on Contracts, 8th ed, 175, referred to consideration as the:

To constitute good consideration, the promisee must either incur some detriment or obligation, or confer some benefit, generally upon the promisor: Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 459; [1954] HCA 20, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ, quoting Shadwell v Shadwell (1860) 9 CB (NS) 159; 142 ER 62, Erle CJ and Keating J at 68.

The law does not inquire into the adequacy of the consideration paid so as to bind the promisor; the oft-cited phrase is that “consideration must be sufficient but need not be adequate” and it is notorious that a peppercorn may suffice as good consideration if that is the price stipulated by the promisor in return for their promise: DPP (Vic) v Le (2007) 232 CLR 562; [2007] HCA 52, Kirby and Crennan JJ at [116], citing Carter and Harland, Contract Law in Australia, 4th ed (2002), 112 [323]. See Evans v Davantage Group Pty Ltd (2019) 291 FCR 663; [2019] FCA 884, where Beach J at [68] refers to the “pithy peppercorn principle” and quotes Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87, Somervell LJ at 114. See also Woolworths Ltd v Kelly (1991) 22 NSWLR 189, where the rationale for the law’s refrain in this regard was considered by Kirby P at 193–4.

It is beyond argument that such a price may take “the form of an act, forbearance or promise”: Beaton, Kirby P at 168; Australian Woollen Mills, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ at 456–7, 461; Woolworths, Kirby P at 193–4, Samuels JA at 206, Mahoney JA at 221–22.

It follows that consideration for a promise may very well be given in the form of “promises made by the opposite party” or parties, as the case may be: Chief Commissioner of State Revenue v Dick Smith Electronic Holdings Pty Ltd (2005) 221 CLR 496; [2005] HCA 3, Gummow, Kirby and Hayne JJ at [79], citing Chitty on Contracts, 29th ed (2004), 217 [3-004].

It is wholly uncontroversial that mutual promises can constitute sufficient consideration: Perry v Anthony [2016] NSWCA 56, Beazley P, Gleeson JA and Emmett AJA at [26], citing Dunlop Pneumatic Tyre Co, Dunedin LJ at 855.

Finally, between the promise and the price paid for it, there must subsist “the relation of a quid pro quo”. That is, the consideration must be given in response to, and in exchange for, the promise: Australian Woollen Mills, Dixon CJ, Williams, Webb, Fullagar and Kitto JJ at 456–57. From this, two propositions arise:

Christopher and Diana submit that they entered into a binding contract with Michael not to sever their joint tenancy in the Roselands property absent the agreement of all joint tenants. They seek an injunction to prevent Michael from further acting to sever the joint tenancy, giving proper effect to the agreement between the parties.

Christopher and Diana rely on the principles considered in Goyal and applied in James as providing the basis on which one joint tenant can be restrained from acting to sever a joint tenancy when they have entered into an agreement not to do so. Christopher and Diana expressly eschewed relying on any estoppel or unconscionability as the basis for their claim (T16).

Christopher and Diana say that the agreement formed between them and Michael was made orally through a series of conversations they had in advance of the settlement of the Roselands property. They advance the case that the consideration for the agreement lies in the exchange of promises between them, citing the reliance on Sir Frederik Pollock as quoted by Dunedin LJ in Dunlop Pneumatic Tyre Co that such an exchange can be good consideration, as well as the contribution of Diana to the purchase price of the Roselands property.

In essence, Christopher and Diana contend that Michael’s generally unrestricted common law right to deal with his interest in the Roselands property – specifically, to effect a severance of the joint tenancy – is restricted pursuant to an enforceable contract between them.

The effect of the relief sought is that, assuming Michael predeceases them, absent Christopher and Diana’s consent to the severance or some other curial intervention, Michael’s interest in the Roselands property will be extinguished upon his death. His interest in the Roselands property will not pass to the benefit of his estate, and the interests of Christopher and Diana in the Roselands property will be correspondingly enlarged.

In summary, Christopher and Diana submit that, although nobody ever said in clear terms that “we will never sever the joint tenancy”, they mutually agreed with Michael that the Roselands property should “remain in the family” and they would all take the property as joint tenants on that basis to “protect” and “secure” the asset for the benefit of Michael’s children. Christopher and Diana say that it must necessarily be inferred in that agreement that any severance of the joint tenancy would subvert that purpose and therefore they were all bound not to sever the joint tenancy.

Michael submits that there is no evidence that Christopher, Diana and he agreed that none of them could sever the joint tenancy in the Roselands property absent the agreement of the others and certainly no agreement not to sever arose in or about March 2020 (as stated in the summons), prior to the parties entering into any contract to purchase the Roselands property on 16 April 2020. Michael also submits that there was no discussion or agreement after the exchange but prior to settlement of the Roselands property on 20 May 2020. Michael says that in any event it was too late by that time for such an agreement because the parties had already contracted to purchase the Roselands property and so any such agreement would be unsupported by consideration.

Michael says that it was not until 19 and 20 May 2020 that Christopher, Diana and he agreed to purchase the Roselands property as joint tenants, being on the eve or day of settlement, and that they had all already signed as purchasers without any such agreement.

Michael argues that there is no evidence that Christopher or Diana discussed with Michael not severing the joint tenancy or that any promise not to do so was given by Michael to them or by them to Michael. Michael submits that whatever might have been the uncommunicated intention and understanding of Christopher and Diana arising from the Roselands property being purchased under a joint tenancy, their case fails to distinguish between an agreement to purchase the Roselands property as joint tenants (which existed and was performed) and a further and separate agreement by those joint tenants not to sever the joint tenancy. Michael submits that the former agreement does not encapsulate the latter and to the contrary, it was an inherent feature of acquiring the Roselands property as joint tenants that each tenant would possess, as a result of that transaction, an unfettered right to bring the joint tenancy to an end at any time. Michael says that if the exercise of the right to bring the joint tenancy to an end at any time was to be constrained, a separate agreement needed to be entered into and supported by consideration, which does not exist.

Michael argues that there was no consideration given by either of Christopher or Diana in support of any purported, but unevidenced, promise by Michael not to sever the joint tenancy. Michael submits that the contribution paid of $60,000 each by Christopher and Diana towards the purchase price of the Roselands property was the consideration for the acquisition of the interest they received, not with respect to an agreement not to sever the joint tenancy. Michael emphasises that the agreement concerning the joint tenancy arrangement arose after the parties had signed the contract of sale pursuant to which they had promised to pay, and were liable to pay, the purchase price of $1,105,000. Michael says that in those circumstances Christopher and Diana were performing their existing obligation to pay the purchase price which could not be good consideration for the further purported but un-evidenced promise by Michael not to sever the joint tenancy, citing Stilk; Musumeci, Santow J at 738; and Young v Smith [2015] NSWSC 400, Sackar J at [43].

Michael characterises statements made by him such as “I want to make sure my assets and money goes to [my children]”, “[t]his is to protect the assets we obtained and to keep these for my kids” and “[m]y assets will be going to my kids” as only statements of intention to which he was not contractually bound because there was no consideration. Michael says that he was free to revoke his intention at any time as circumstances changed, in the same way he might revoke a will made by him.

Finally, Michael says there is no evidence that either Christopher or Diana promised to Michael not to sever the joint tenancy as the consideration for any purported promise from Michael not to do the same.

Christopher and Diana submit that if the parties had in mind the particular outcome of keeping the Roselands property in their family and if Michael’s “promises” are instead to be characterised as unenforceable statements of intention then the entry into the joint tenancy did not achieve that outcome. They say that it is only the entry into the joint tenancy and the requirement of its maintenance that achieves that outcome.

The two essential issues in these proceedings are whether Christopher, Diana and Michael entered into an agreement not to sever the joint tenancy in the Roselands property and whether such an agreement was supported by good consideration.

I commence my consideration of those issues for determination by emphasising that none of Christopher, Diana or Michael are lawyers. It is abundantly clear that during the course of all of their numerous communications they did not have more than a rudimentary understanding of the difference between holding property interests as joint tenants or as tenants-in-common until shortly before settlement of the Roselands property on 20 May 2020. Throughout the relevant events, they clearly had little to no idea of how the archaic features of joint tenancy operated until this was explained to them by Mr Sedrak on 18 and 19 May 2020.

It is accepted by all of them that at no stage was there an express agreement in precisely communicated terms that none of them could sever the joint tenancy. But that does not end the analysis because what is put by Christopher and Diana is that it can be inferred amongst the matters which were expressly agreed with Michael that none of them could sever the joint tenancy.

As set out above, there was no written agreement preventing any party from unilaterally severing the tenancy without the consent of the other parties. Applying the common approach of the different judgments in Realestate.com.au, it is necessary for me to objectively decide what Christopher, Diana and Michael agreed by analysing their words and conduct in all the circumstances in which they occurred and deciding what a reasonable person would take them to mean, drawing inferences as part of those circumstances.

The progression of the essential chronology of the unchallenged communications and conduct between the parties can be summarised in the following way:

Objectively assessed, this series of oral and written communications and the conduct between Christopher, Diana and Michael leading up to the settlement of the purchase of the Roselands property indicate that they shared an intention to become registered proprietors as joints tenants for the explicit purpose of ensuring the Roselands property would “remain in the family” by way of survivorship and be protected from Michael’s proposed new wife Rania obtaining any ownership interest. The reference to “family” was obviously to Michael and his children given Michael’s repeated reference to protecting his assets for “my kids”.

The evident reason for all of Christopher, Diana and Michael in seeking legal advice was to understand how best to structure the property ownership in order to meet that purpose of keeping the Roselands property within their family. The parties’ inquiry into the differences between tenants-in-common and joint tenants and their subsequent decision to purchase the property as joint tenants, demonstrates a clear and mutual understanding that the Roselands property was intended to stay in the family. They acted on the understanding that entering a joint tenancy was the legal means by which the Roselands property would remain within the family and be protected against any claim by Rania. This mutual agreement and the actions taken to implement it demonstrate that the parties entered into a binding arrangement based on their shared intent.

In can be inferred that this express purpose could only be fulfilled by the agreement that none of the parties would be able unilaterally to sever their joint tenancy in the Roselands property. This was fundamental to achieving the intended outcome of keeping the Roselands property within the family. This agreement to maintain the joint tenancy was crucial to ensuring that the Roselands property would pass to Michael’s children through survivorship, as intended by the parties.

Michael’s expression of wanting to keep his assets “for my kids” goes beyond a mere expression of future intention by him because it is made in the context of Christopher, Diana and Michael all then agreeing to enter into a transaction of acquiring the Roselands property to which they all made financial contributions. This factual context is very important in the present case because it emphasises that Michael’s statements were said with the intention on the part of all of the parties to create legal relations between them.

Additionally, while Richard is not a party to these proceedings, the discussions between Christopher, Diana and Michael concerning how Richard would eventually receive his “fair” share in the Roselands property are telling in several respects as to the terms of their agreement and their intention to be bound by it.

Bearing in mind that the ultimate question in cases of this kind is what reasonable people with knowledge of the background circumstances then known to the parties would be taken by their words and conduct to have agreed, the overwhelming conclusion is that each of Christopher, Diana and Michael understood this would be the last time that Michael would be free to alienate or devise his interest in the Roselands property.

It appears that Richard was not included in this arrangement as he was going through a divorce and there were concerns that his former spouse may make a claim over the Roselands property. In these circumstances, each of Christopher, Diana and Michael understood and agreed that upon Michael’s death, it would be a matter for Christopher and Diana to ensure that Richard received his “fair” share in the property, less Christopher and Diana’s respective contributions to the purchase price. This demonstrates an understanding by each of Christopher, Diana and Michael – not only of their decision to take the property as joint tenants and the right of survivorship that would be enjoyed by each of them – but also that the ultimate consequence of their agreement was that they could not sever the joint tenancy.

Based on the objectively assessed conduct and statements of the parties, I conclude that an agreement existed as at 20 May 2020 between Christopher, Diana and Michael, under which they all agreed not to sever the joint tenancy. This agreement not to sever the joint tenancy was integral to the fulfillment of the parties’ shared purpose. Without that agreement, the shared purpose could not be achieved.

Although Christopher and Diana asserted in the form of declaration sought in the summons that the agreement was made in about March 2020, it is clear to me that the agreement was not finally formed until just before the settlement of the Roselands property on 20 May 2020, when they all agreed that they should hold their interests in the Roselands property as joint tenants.

Applying the principles in Dunlop Pneumatic Tyre Co, the agreement not to sever the joint tenancy is supported by the mutual exchange of promises, which constitutes good consideration. As outlined above, the reciprocal obligations are evident from the parties’ shared intention to preserve the joint tenancy and ensure the Roselands property remained within their family.

To ensure that the express purpose was met, it can be inferred that Michael’s promise was that he would not sever his aliquot share of the joint tenancy. This commitment was made to ensure that the Roselands property would remain within the family and pass to his children by way of survivorship. In exchange, it can also be inferred that Christopher and Diana promised not to sever their respective aliquot shares of the joint tenancy, thereby preserving the ownership structure necessary to fulfill the shared intention of all parties. This reciprocal exchange of promises forms the primary consideration for the agreement.

This mutual exchange of promises created reciprocal obligations, reflecting a sufficient “quid pro quo” of the sort described in Australian Woollen Mills. Michael benefits from Christopher and Diana’s commitment to maintain the joint tenancy as it ensures that his children will inherit the Roselands property by way of survivorship. In return, Christopher and Diana benefit from the security provided by the joint tenancy, which ensures their continued ownership of the Roselands property and the benefits that flow from that ownership.

Each party also incurs a detriment by mutually forgoing the exercise of certain rights. Specifically, by agreeing not to sever their aliquot shares, each party sacrifices the ability to dispose of their interest in the Roselands property without the consent of the other joint tenants. This mutual forbearance represents a limitation of each party’s right that they would otherwise have. This mutual forbearance ensures that the Roselands property will pass according to the right of survivorship, in keeping with the parties’ shared objective.

An exchange of mutual promises is distinguishable from a unilateral promise with future intent, which lacks reciprocal obligations and could allow one party to unilaterally sever the joint tenancy without the consent of the other parties. In contrast, the promises made by each party to maintain the joint tenancy and keep the Roselands property within the family resulted in binding obligations, supported by valid consideration. The agreement formed a legally enforceable contract, ensuring that the joint tenancy would not be severed.

Each party gave further consideration for the agreement not to sever the joint tenancy through each joint tenant’s financial contribution to the purchase price, being $60,000 each for Christopher and Diana, with the balance from Michael. These contributions were made in accordance with the agreement to maintain the joint tenancy and were important in their decision to enter the contract of sale. The financial contributions are therefore further consideration, reinforcing the binding agreement to maintain the joint tenancy as intended.

It is important to distinguish between the agreement not to sever the joint tenancy and the formal contract of sale of the Roselands property. The agreement not to sever the joint tenancy was a binding commitment with enforceable obligations regarding the ownership structure for the Roselands property. This agreement not only outlined the parties’ mutual intention to maintain the joint tenancy but also limited their ability to sever the tenancy without unanimous consent. This mutual understanding was separate from the contractual obligation created by the contract of sale, which only addressed the acquisition of the Roselands property. While the contract of sale formalised the transaction and the parties’ intent to hold the Roselands property as joint tenants, the agreement not to sever the joint tenancy constituted a distinct promise supported by its own consideration. The financial contributions to the purchase price by each of Christopher, Diana and Michael further solidified the commitment to uphold the joint tenancy, as they were made with the mutual understanding that the joint tenancy would not be severed. Therefore, the agreement not to sever the joint tenancy, in combination with the financial contributions, provided sufficient and independent consideration.

In closing, I consider that Michael’s reliance on the principle that a promise to perform an existing legal duty is not good consideration does not apply in the facts of this case.

As is made clear in Wigan, the existing duty of the promisors (Christopher and Diana) must be to the promisee (Michael). The existing duty of Christopher and Diana to pay the purchase price under the contract of sale was owed to the vendors of the Roseland property, not to Michael.

Given that on 3 December 2024, Michael took the step of seeking to sever the joint tenancy of the Roselands property by lodging the Transfer Severing Joint Tenancy with the Registrar-General, which he contractually obliged himself not to do, it is appropriate that an injunction be granted that prevents him from taking any further step in that process. It is also appropriate to issue an injunction to the Registrar-General that prevents it from registering the Transfer Severing Joint Tenancy.

In light of the fact that Michael has been unsuccessful in the proceedings, he should also pay the costs of Christopher and Diana, as well as those of the Registrar-General.

For the reasons set out above, I propose to make the following orders: