THE REFERENCE

1.1 On 14 November 1990 the then Attorney General, the Honourable J R A Dowd QC, referred to the Commission a reference to inquire into and report upon:

(a) whether and in what respect the law relating to the unilateral severance of a joint tenancy should be altered; and

(b) any related matter.

BACKGROUND TO THE REFERENCE

1.2 The Reference arose under the Commission’s Community Law Reform Program. The Program allows the Commission to give preliminary consideration to proposals for law reform made by members of the legal profession and the community at large and, where it is thought appropriate, to seek a suitable reference from the Attorney General on matters raised by the proposals.¹

1.3 The current reference arose from correspondence received from Professor J Wade expressing concern in relation to the difficulties involved in the unilateral severance of joint tenancies especially in the context of estranged couples holding property as joint tenants.

THE PROBLEM

1.4 Frequently in the context of marriage and de facto relationships couples own real property as joint tenants. If one tenant dies the property automatically passes to the surviving tenant. On the breakdown of the relationship, one party may try to end the joint tenancy to prevent the property passing to his or her estranged or former spouse by survivorship. However, due to the cumbersome and complex means to unilaterally end a joint tenancy and effect property settlements this process may take between one and four years to complete. If age or terminal illness intervene, a severance may not be effected.

1.5 The problem has been highlighted in three reported cases in New South Wales² in which unilateral severance was attempted as a means of preventing property passing by survivorship to an estranged spouse. In each case a joint tenant had executed a transfer to sever the joint tenancy but died before registration of the transfer under the Real Property Act 1900 took place. The Court held in each case that unilateral severance of the joint tenancy had not occurred because there was no registration of the transfer. The deceased joint tenant’s share consequently passed to the surviving joint tenant.

THE PURPOSE OF THIS PAPER

1.6 The purpose of this paper is to examine whether the law relating to unilateral severance of a joint tenancy should be changed to provide a speedy and effective way to unilaterally sever a joint tenancy. It will consider firstly the current law relating to joint tenancy and unilateral severance and then canvass some methods by which reform may be achieved. The views expressed in this Discussion Paper do not represent the Commission’s final recommendations and are made for the purpose of encouraging comments and suggestions from interested persons or groups.

2. McNab v Earle [1981] 2 NSWLR 673; Freed v Taffel [1984] 2 NSWLR 322; Corin v Patton (1990) 64 ALJR 256; (1990) 92 ALR 1; (1988) 13 NSWLR 10; (1988) 13 NSWLR 15.