Wright v Gibbons

Wright v Gibbons (1949) 78 CLR 313

Co-ownership of property and whether a deed transferring a joint tenancy to one of the other joint tenant severed the tenancy.

Facts

Three sisters, the Gibbons,  jointly owned a property and subsequently two sisters tried to sever the tenancy by creating and registering a document where they transferred their interests to each other. The tenancy was thus presumed to become a tenancy in common. When the two sisters who had transferred their interests later died, the remaining sister sought to invalidate this earlier presumption, claiming that a joint tenancy had endured.

Issues

When a joint tenant alienates their interest to another party, does this operate to sever the original joint tenancy.

Decision/Outcome

The High Court found against the Gibbons sister, and held that where a joint tenant transfers their interests to a third party, the third party becomes a tenant in common of the property, rather than a joint tenant. Moreover, this is so regardless of whether the joint tenant transferred their entire interest or part of it. Thus, the effect of registration of the transfer of a joint tenancy interest is to sever the tenancy, making both parties tenants in common in cases with two joint tenants, or in circumstances with three or more joint tenants, then it is the tenant who has had their interest severed that becomes a tenant in common alone, whilst the others retain their status as joint tenants. The implication of this is that the effect of a joint tenant dying is that their interest is thus extinguished whilst the remaining joint tenants experience a proportionate enlargement of their interests.