Severance and Ending Co-ownership Cameron Stewart Thanks to Jim Helman and Shae McCrystal – errors are mine

Severance of Joint Tenancy A joint tenant can change the nature of their co-ownership from joint tenancy to tenancy in common. This will not terminate the co-ownership, (unless the method used to change the nature of the ownership involves divesting of the interests) it will simply change the nature of the co-ownership from joint tenancy to tenancy in common.

Unilateral Severance of Joint Tenancy The unilateral severance of the joint tenancy deprives the other co-owners of the right of survivorship to the portion of the land that is severed, but equally the severing co-owner loses the right of survivorship with respect to a portion of the land now belonging to the other joint tenants. There is no duty not to sever- co-owners are not fiduciaries With consideration Voluntary

Ways to sever One joint tenant alienates his or her share inter vivos, with or without the consent of the other joint tenants. They can do this by transferring their interest to a third person, to themselves, by declaring a trust over their interest or by transferring the interest to a trustee to hold on trust for someone else or themselves.

Ways to sever Old System Land - s 30 of the Conveyancing Act 1919 (NSW) states that where a person causes the unilateral severance of a joint tenancy in old system land, notice of the unilateral severance must be given to the other co-tenants as soon as practicable, although a failure to do so will not invalidate the severance. Torrens Land – s 97 of the Real Property Act 1900 (NSW) requires the Registrar General to notify the other joint tenants of the lodgement of a dealing that may sever the joint tenancy.

Public Trustee of the ACT v Hall [2003] ACTCA 27 A surviving co-tenant (Hall) tried to argue that a unilateral severance undertaken by his former wife in respect of their co-owned property was ineffective because she had severed the joint tenancy in breach of her obligations to him as co-joint tenant. In effect, Hall argued that joint tenants were in a fiduciary relationship and if one co-tenant tried to sever the co tenancy without notice or consultation, they would be severing in breach of that relationship. The ACT Court of Appeal unanimously rejected that argument citing long established principles that joint tenants are not in a fiduciary relationship and are entitled to unilaterally pursue their own interests by severing the joint tenancy without giving notice to, or getting permission from, their co-owner.

Ways to sever – alienation to self A simple way of unilaterally severing a joint tenancy is to alienate the land to yourself. The CA s 24 empowers a person to assume property to himself or herself. In order to make this effective to sever the joint tenancy, it must comply with the legal requirements and equity WILL NOT perfect an incomplete severance.   Old System Land – To alienate the land to oneself under old system land, the severing joint tenant had to use a valid deed. Torrens – To alienate land to oneself, the severing joint tenant must register a transfer of the interest to themselves.

McCoy v Caelli [2010] NSWSC 1233 Valerie McCoy was Peter Caelli’s mum Peter was married to Yasmin Peter had a drug problem and low self esteeem Valerie bought a house for them both to live in at 1 Tuffins Lane Port Macquarie They were registered as joint tenants Valerie provided all the funds for the purchase In 2007 Peter was diagnosed with prostate cancer He saw a solicitor in July 2008 and instructed him to sever the joint tenancy and wrote a will leaving his interest to Yasmin and his son He died in August 2008 The transfer was lodged 3 days after his death

McCoy v Caelli [2010] NSWSC 1233 Was there a severance? There was none in law Could there be one in equity? McNab v Earle [1981] 2 NSWLR 673; Freed v Taffel [1984] 2 NSWLR 322 These cases say that in cases of self alienation, actual alienation is required

McCoy v Caelli [2010] NSWSC 1233 As a matter of principle and authority, the first defendant’s submission that the issue is to be resolved by reference to the test for a perfected gift is misplaced where a person purports to transfer property to himself or herself. Even in Corin v Patton, counsel for the donee accepted that the rationale for the gift rules was inapplicable in the context of a unilateral transfer (at 562). The rationale behind the perfected gift doctrine is that equity intervenes to bind the conscience of the donor as against the donee (who must necessarily be a different person to the donor) because it would be inequitable to allow the donor to resile from the gift once a certain point is reached in the transaction. Equity prevents a donor from resiling by imposing a trust over the property in favour of the donee pending the vesting of legal title. In that way, equity looks to intent over form in that context. That is made clear from Corin v Patton (see paras [39]-[40] above). It would be absurd to suggest that equity would bind Mr Caelli’s conscience to prevent him from resiling from the “gift” to himself, or that he held the property on trust for himself pending registration. Such a proposition would also be contrary to McNab v Earle and Freed v Taffel. 46 In my view, the outcome of this case is determined by McNab v Earle and Freed v Taffel. It is clear from those cases that Mr Caelli’s execution of the transfer, making of the bequest in his will and giving of instructions to his solicitor to lodge the transfer for registration did not alienate his interest at law or in equity.

Incomplete gifts of land Equity does not assist a volunteer Milroy v Lord (1862) 4 De G F & J 264 at 274; (1862) 45 ER 1185 at 1189 The first limb of Milroy v Lord: do everything necessary to be done: Corin v Patton (1990) 169 CLR 540 The second limb of Milroy v Lord: assignor has done all that is necessary to be done to render the assignment binding on the assignor Costin v Costin (1995) NSW Conv R 55-811

Corin v Patton (1990) 169 CLR 540 Mr and Mrs Patton owned land as joint tenants. Mrs Patton was terminally ill and, on the assumption that she would die before her husband, the land would have passed to her husband automatically upon her death in accordance with the principle of survivorship She did not want this to happen so she executed three documents – a transfer to her property of her share, a trust and will were she left her estate to the children The transfer had not been registered Had she done everything necessary to be done? No – she did not authorise the bank to uplift the CT to Corin for the purpose of registering the transfer

Costin v Costin (1997) NSW Conv R 55–811 Costin snr makes an initial attempt to sever a joint tenancy in relation to Torrens title land by an assignment of his interest to his son. Costin snr handed over an appropriate transfer document as well as giving written instructions to the solicitors who held the certificate of title to release it to the assignee. The solicitors refused to do so because they believed that they needed the authority of both the joint tenants to release the certificate of title to the assignee. Costin snr later changed his mind and assigned his interest to a second son and the second son was duly registered as co-owner of the property. The first son argued that there had been an effective equitable assignment to him and that the second son held the interest in the property on trust for the first son. The court held the assignment to the first son was ineffective.

Severance – grant of mortgage over share A legal mortgage by the joint tenant under general law constitutes alienation because the mortgage transfers the legal title to the mortgagee. This has the effect of breaking the co-ownership because the mortgagee becomes the owner. On the other hand, a Torrens mortgage does not constitute alienation, because a mortgage of Torrens title land operates as a charge only and not as a transfer of the interest mortgaged. Interestingly, if the mortgaging joint tenant dies before the other, the charge ceases to be effective because the interest over which the mortgage was granted has ceased to exist (right of survivorship – surviving JT takes all); Alternatively - If the non mortgaging JT dies, the mortgage then applies to the whole of the interest owned by the surviving joint tenant. Ie – the whole estate will then be encumbered by the mortgage.

Severance – grant of mortgage over share In Lyons v Lyons [1967] VR 169 the Court considered a claim by the executors of the estate of William Lyons that they were entitled to an interest as tenant in common with Hazel Lyons as a result of a severance of the joint tenancy by the conduct of the applicant and her late husband or by agreement or by William granting a mortgage over his estate and interest in the land to Adelaide Gray. After considering the issues, the Court held that where land is held under the Victorian equivalent of the Real Property Act a joint tenancy is not severed by a mortgage given by one of the joint tenants and the mortgagee’s security in the land lapses if the mortgagor dies before the surviving joint tenant.

Guthrie v ANZ Banking Group Ltd (1991) 23 NSWLR 672 – Mr and Mrs Guthrie were joint tenants in a fee simple of Torrens Land. Mr Guthrie gave a guarantee over the indebtedness of a company he was involved in, and to secure the guarantee, he gave the ANZ Bank a mortgage over his portion of the property. Subsequently, the Guthries marriage broke down, and in the divorce proceedings it was determined that Mr Guthrie would ‘release’ his share of the property to Mrs Guthrie so that she would become the sole owner. The question for the court was whether or not the charge over Mr Guthries share in the joint tenancy survived the release of his share to Mrs Guthrie

Guthrie v ANZ Banking Group Ltd (1991) 23 NSWLR 672 – Where judgment is given against one of two joint tenants and afterwards that one releases to the other before execution such release shall not bar the creditor’s execution, whereas if the releasing joint tenant had died before the execution the survivor holds the land discharged of any execution. The reason for the distinction is that in the former case the releasee derives title from the release…. (per Meagher J at 680) So the answer is – yes it did – a mortgage will travel with an inter vivos release to the other joint tenant. In his judgment, Justice Priestley notes that this outcome was necessary to ensure that a joint tenant would not have a simple mechanism to frustrate creditors – giving someone a statutory charge and defeating it simply by surrendering their share of the property to their joint tenant.

Severance – lease Whereas English authority favours the view that a lease granted by one joint tenant constitutes alienation, Australian authority tends to favour the view that a lease suspends rather than severs the joint tenancy. Here, the joint tenancy revives upon the ending of the lease: Lyons v Lyons Obiter – Wright v Gibbons (1949) 78 CLR 313 per Dixon J at 330: “One joint tenant for an estate in fee simple may grant a lease of his equal share and during the lease the jointure is suspended and there is a temporary severance”.

Ways to sever – agreement Where all of the parties to a joint tenancy agree between themselves to sever the joint tenancy, equity will enforce the agreement although it is ineffective to sever the joint tenancy at law. In contract terms, each joint tenant agrees to give up their right of survivorship in consideration for agreement of the others to give up theirs – thus all parties have provided consideration for the agreement. Agreement to sever a joint tenancy can appear in a formal document, an informal document or an oral agreement. The elements of specific performance do not have to be present. As long as equity can distil an intention to sever from the parties agreement, it will enforce the severance. The necessary intention to sever from an agreement can be found in agreed terms that demonstrate that the parties were treating the property as if it had distinct and divided shares – which is inconsistent with a continued right of survivorship.

Ways to sever – agreement Gould v Kemp (1834) 39 ER 959 – A and B were joint tenants. B purported to dispose of B’s interest in the estate under B’s will (which would be ineffective to sever the joint tenancy). However before B died, A and B entered into and agreement that A would, after B died, honour the terms of B’s will. This would be an agreement between the parties that demonstrates that they agreed to treat the property as if it had distinct shares.

Ways to sever – sale to each joint tenant Wright v Gibbons (1949) 78 CLR 313 three sisters, Olinda Gibbons, Ethel Rose Gibbons and Bessie Melba Gibbons were registered as joint tenants in land at Hobart. By a Memorandum of Transfer Ethel Rose Gibbons transferred to Olinda Gibbons her one- third share and Olinda Gibbons transferred to Ethel Rose Gibbons her one-third share in the land. Upon registration the Certificate of Title was endorsed to show that the three owners were registered as tenants in common in equal shares. Bessie Melba Gibbons who survived both Olinda and Ethel Rose, approached the Court for a declaration that the Memorandum of Transfer did not sever the joint tenancy and that she became solely entitled to the land as proprietor. The matter came before the High Court on appeal and the Court held that the Transfer did effect a severance of the joint tenancy and that Olinda, Ethel Rose and Bessie Melba were tenants in common upon registration of the Transfer.

Severance by conduct Course of conduct – If you can’t show an actual agreement about severance, you may be able to show a course of conduct which demonstrates that all parties were acting on a commonly held belief or assumption that they had distinct shares in the property and therefore they were tenants in common. You have to show a course of conduct engaged in by all of the joint tenants that intimates that ‘the interests of all were mutually treated as constituting a tenancy in common’.

Severance by conduct Butt gives the following examples: Continuously dividing the income from jointly owned property; Division of the proceeds of the sale of the property between the co-owners (before settlement has terminated the jt) The creation of ‘mutual wills’ which devise the interests in the jointly held property in an agreed manner – ie all co-owners make wills at the same time, leaving the property to the same people. While you have nothing to pass in your will if you are not the final survivor, equity will enforce the agreement evidenced by the mutual wills if the final survivor changes his will after benefiting from the survivorship

Severance by conduct Williams v Hensman (1861) 70 ER 862, Sarah Creak died leaving £4,000.00 to her trustee to fund a legacy of £200.00 per year for a Mrs Hensman and providing for the principal sum to be divided between Mrs Hensman and eight children on her death. The question for determination by the Court was whether the joint tenancy created by the gift in the Will had been severed by the various events that occurred following the death. Vice-Chancellor Sir W. Page Wood found that parties had entered into deeds and arranges their affairs in ways which were not reconcilable with a joint tenancy:

Severance by conduct Vice-Chancellor Sir W. Page Wood: ....there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been effected, as happened in the cases of Wilson v Bell and Jackson v Jackson.

Severance by conduct Burgess v Rawnsley [1975] 1 Ch 429 a property was purchased by a Mr Honick and a Mrs Rawnsley. While the property was purchased by Mr Honick in his name, the purchase price was paid by Mr Honick and Mrs Rawnsley equally. The house consisted of 2 flats, an upstairs flat and a downstairs flat, with Mr Honick occupying the downstairs flat. It was Mrs Rawnsley’s intention that she would occupy the upper flat. Shortly after the Contract was signed Mr Honick instructed his solicitor to have the property conveyed into the joint names of himself and Mrs Rawnsley and this occurred.

Severance by conduct At this point the legal estate and the beneficial interests were both held as joint tenants. The following summary of the facts is set out in the judgment of Lord Denning, M R: ... In July 1968, being disappointed in his hopes of marriage, Mr Honick wanted Mrs Rawnsley to sell him her share in the house. He came to an agreement with her, as he thought, to buy it for £750. He went to his solicitor and said to him “Mrs Rawnsley is not going to marry me, but she has agreed to take £750 for her interest.” He handed the conveyance to the solicitor for him to draw up the necessary document.

Severance by conduct The solicitor thereupon wrote to Mrs Rawnsley on July 1, 1968, this letter: Dear Mrs. Rawnsley. re 36 Queens Road, Waltham Cross. Mr. Honick called to see us today stating that you are agreeable to convey to him your interest in this property for the sum of £750. Will you please confirm that this is so and we will then finalise the matter and ask you to call upon us to collect those moneys and to sign the final deed. Next day, however, Mrs Rawnsley went to the solicitors and said she was not willing to sell. She was not satisfied with £750 but wanted £1,000. Mr Honick told his daughter that Mrs Rawnsley was going “to ask a thousand which he was not going to pay. A few days later Mr Honick went to the solicitor and told him to leave things as they were. He asked for the conveyance back and got it. From that time onwards things went on as before, with Mr Honick in his house alone, and she in hers; but both visited one another, being quite friendly. He paid all the rates and outgoings of his house. This went on for three more years until he died on October 26, 1971.

Severance by conduct Considering the law and earlier cases at some length, Lord Denning came to the following conclusion: ... I think there was evidence that Mr Honick and Mrs Rawnsley did come to an agreement that he would buy her share for £750. That agreement was not in writing and it was not specifically enforceable. Yet it was sufficient to effect a severance. Even if there was not any firm agreement but only a course of dealing, it clearly evinced an intention by both parties that the property should henceforth be held in common and not jointly.

Severance by court order A court has no inherent jurisdiction to adjust property rights, but it may effect a severance as a result of a court order that affects the property: clearest example is eg Family Law Act 1975 (Cth); Property Relationships Act 1984 (NSW). These orders are generally made in the context of a breakdown in family relationships and the courts exercise statutory power to adjust property rights. If one party dies before a court order can be given legal effect through a transfer, equity will compel the finalisation of the court orders as equity will not permit a court order to be frustrated.

Severance by operation of law Under the Bankruptcy Act 1966 (Cth), the property of a bankrupt person vests in the trustee-in-bankruptcy, and if the bankrupt person holds property as a joint tenant, the transfer of the bankrupt’s notional share to the trustee-in-bankruptcy, automatically severs the joint tenancy and converts the co-ownership to tenancy in common.

Severance by merger Severance also occurs where one of the joint tenants acquires a further estate in the land different from the existing estate. This breaks the unity of interest. ie A and B are joint tenants of a life estate. If A subsequently acquires the fee simple remainder of the estate, then A’s life estate merges with the fee simple remainder and there is no unity of interest between A and B.

Severance by unlawful killing If a joint tenant unlawfully kills another, the perpetrator cannot benefit as a survivor. This is an aspect of a broader principle that a person may not benefit from their crime. Thus if A and B hold property as joint tenants, and A kills B, then A holds legal title as survivor, subject to a constructive trust in favour of him/herself and B’s estate as tenants in common

Severance by unlawful killing Permanent Trustee Co Ltd v Freedom From Hunger Campaign (1991) 25 NSWLR 140 that “the public policy rule was said not to disqualify the killer from benefiting from the victim’s property unless the killing was done with the intent to bring about a benefit”.

Severance by unlawful killing Troja v Troja (1994) 33 NSWLR 269, held that irrespective of the mitigating factors, a person who kills another should not benefit from that crime. In this case a wife who killed her husband while in a state of depression brought on by the husband's conduct could not benefit from the joint tenancy she held with her husband. In response to this strict line taken by the courts the NSW Forfeiture Act 1995 was enacted. The legislation gives the Supreme Court power to modify the effect of the forfeiture rule following unlawful killing if “justice” so requires, but murder (as opposed to manslaughter) is excluded from the operation of the Act. Estate of Fitter and the Forfeiture Act 1995 [2005] NSWSC 1188 – forfeiture can be imposed without conviction

Effect of severance on co-ownership Where there is more one joint tenant, severance by one joint tenant will not affect the joint tenancy of the remaining joint tenants. Instead the severing joint tenant will hold with the remaining joint tenants as a tenant in common.   Let's look at some examples: X and Y are joint tenants of land, and X transfers her interest to Z The effect is that Z and Y become tenants in common of half shares A, B and C hold as joint tenants and A transfers her share to D The effect is that D holds a one-third share as tenant in common with B and C, and B and C hold the two-thirds share as between themselves as joint tenants. Thus the survivor of B and C would take the whole of the two-thirds share, but B and C would be unaffected by D's death, and D would be unaffected by the death of B or C.

Effect of severance on co-ownership A, B and C hold as joint tenants. A transfers her interest to B and B transfers her interest to A. C does not participate. The effect of the first conveyance (from A to B) is that B held a one-third share as tenant in common, and B and C held the remaining two-thirds share as joint tenants. The effect of the second conveyance - B conveying to A the interest that B held as a joint tenant with C - was to sever the joint tenancy between B and C. Thus A, B and C held equal shares as tenants in common. These were the facts of Wright v Gibbons (1949) 78 CLR 313.  

Bringing Co-Ownership to an End Co-ownership may be terminated in any one of the following ways: All but one of the joint tenants has died (or has been murdered by another co-owner), possibly leaving the surviving co-owner with the entire estate; One of the co-owners may buy or otherwise acquire the interests of all of the other co-owners; All of the co-owners may transfer the property to a single third-party; All of the co-owners agree to divide the property into their respective shares; or If the co-owners cannot agree to divide the property into their respective shares, there is a statutory procedure for court ordered sale or physical partition of the land involving the creation of separate titles to the land. (Conveyancing Act 1919 NSW s 66G).

Partition Section 66G(1) which provides: Where any property (other than chattels) is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.

Section 66G(7) Where property becomes subject to such statutory trust for sale: (a) in the case of joint tenancy, a sale under the trust shall not of itself effect a severance of that tenancy, (b) in any case land shall be deemed to be converted upon the appointment of trustees for sale unless the court otherwise directs.

66H Trustee on statutory trusts for sale or partition to consult persons interested So far as practicable trustees on the statutory trust for sale, or on the statutory trust for partition, shall consult the persons of the age of eighteen years or upwards and not subject to disability for the time being beneficially entitled to the income of the property until sale or partition, and shall, so far as consistent with the general interest of the trust, give effect to the wishes of such persons, or, in the case of dispute, of the majority (according to the value of their combined interests) of such persons, but a purchaser shall not be concerned to see that the provisions of this section have been complied with

Partition The scheme provides that the court may appoint trustees over the property, and the property in the estate will vest in the trustees for the purposes of partition or sale of the property. In the vast majority of cases the court will make an order for partition or sale on application by a co-owner unless there is some reason in law or equity that suggests that the sale is inappropriate (interest of a third party would be prejudiced; applicants conduct raises an estoppel etc). However the court will not refuse to order partition or sale just because one co-owner does not want it to happen or argues that it will cause them hardship or be unfair. The presumption under the legislation is in favour of the sale of the property (and a co-owner may be given a chance to buy it) over partition because partition involves physically dividing the land and creating new titles – a process that may be inconvenient or decrease the value of the land overall.

Partition It is important to note subsection (1A). This provides for proceedings to stay on foot even if the co-owner who has commenced the proceedings dies during the course of the proceedings. The section is expressed to apply “despite, in the case of a joint tenancy, the rule of survivorship.” Trustees for sale appointed by the Court have certain obligations: • To sell at the best price possible, usually after obtaining a valuation. • To sell the property expeditiously, given the obligation to obtain the best price

MacDiarmid v MacDiarmid [1957] 74 WN (NSW) 170 Brereton J at 171: It seems to me that the entire object of s 66G is to enable the whole fee simple to be dealt with by the trustee for sale subject only to encumbrances affecting the whole and I, therefore, lean strongly to the view that the position brought about by the making of a vesting order is the same as where a trustee appointed by will is therein directed to sell the testator's real estate. The beneficiary has no interest in the realty but only in the proceeds of sale. Accordingly, I construe s 66G(7)(b) as meaning that any proprietary rights the defendant may have had other than rights, if any, as a tenant under the (NSW) Landlord and Tenant (Amendment) Act 1948 were converted in a right to receive his share of the proceeds.

Abbott v Pegler (1980) 1 BPR 9267 Powell J : As to the first, it is, in my view, clear that, upon the trustees becoming registered as the proprietors of the subject land, they took title free from any estate, interest or right which might thitherto have entitled Mr Abbott to occupy or remain in possession of the land ... and the rights of Mr Abbott became, instead, a right to have the trustees execute the statutory trust and, if the property was sold, a right to receive his rightful share in the proceeds – indeed, the more correct view may be that, since the order itself operated as a conversion as from the date of the order ... Mr Abbott thereafter had no estate, interest or right to occupy or remain in possession of the subject land ... even though the title to the subject land did not vest in the trustees until registration of the order.

Hughes v Egger (No 2) [2005] NSWSC 323 The Court said at [15]: At least from the time the order appointing trustees for sale under s 66G of the Conveyancing Act is registered, the land is vested in the trustees, and the rights of the parties are converted into a right to compel due performance of the trust and to share in the proceeds of sale in accordance with their beneficial interests.

Application of Richard Albarran; Harb v Harb [2010] NSWSC 1251 Trustee had exchanged contract for sale with Borvac P/L Two co-owners (the Harbs) wished for the sale to be rescinded as they thought it was undervalue Trustee wished to complete as he was worried about mounting costs

Application of Richard Albarran; Harb v Harb [2010] NSWSC 1251 Brereton J The trust upon which a s 66G trustee holds land is one to sell the land. The trustee is bound to give effect to that trust, unless removed by the Court. It may well be that, had the Harbs sought termination of the appointment of the trustee prior to his effecting a sale, the Court would have acceded to their application. However, a sale having been effected, the interests of a third party, namely the purchaser, Borvac, have now intervened. Borvac has itself incurred liabilities and expended funds – including on stamp duty in connection with its proposed purchase. As a result of the contract, Borvac is now the beneficial owner, and is a bona fide purchaser for value of the property. No basis upon which the trustee, as vendor, would be entitled to rescind or terminate the contract without Borvac’s consent – which has been obtained – is apparent.

Problem Mattie and Becky were married for 10 years. Mattie was 32 and Becky was 36. They were joint tenants of a mansion in Erina Valley which was registered under the Torrens system. They had two children, Max and Jazmyn. Unfortunately Mattie and Becky’s relationship had fallen apart and Becky suspected the Mattie had begun an illicit affair with a workmate. Becky had also received further bad news regarding her health. She had contracted a rare disease which was likely to prove fatal to her over the long term.  

Problem Becky was worried that when she died Mattie would marry his lover and the children would miss out on their inheritance. Becky decided that she would like to set up a trust of her interest in the house for her children. She decided to do this secretly as she was worried that Mattie would ‘go bonkers’ should he find out. She secretly created a trust of her interest in the house in favour of the children, with her brother Peter as trustee. She signed a transfer in which she assigned her interest in the house to Peter.

Problem All the documents were forwarded to her solicitor, Cameron, who also had possession of the Certificate of Title. Cameron was badly organised and hadn’t sent the documents to Land and Property Information for processing. Meanwhile, Mattie discovered Becky’s secret plot and was enraged. It was unclear what happened next but Mattie and Becky’s bodies were later found in a car wreck. One theory was that Mattie had killed himself and Becky by driving into a tree. Another was that they had just had a car accident due to Mattie’s excessive speeding. In their wills Mattie had left everything to his mistress, Vanessa, and Becky had left everything to the two children in equal shares.

Problem (a) Will Max and Jazmyn receive Becky’s interest in the property via the proposed trust? (b) Who would get the house if the proposed trust was unsuccessful and the car accident was found to be an accident caused by speeding? c) Would your answer to (b) be different if it could be proven that Mattie had purposefully killed himself and Becky?