Til death us do part: joint tenancy and the trustee in bankruptcy

Our talk today considers the issues facing a trustee in bankruptcy when attempting to ascertain the extent or existence of a bankrupt's interest in real property. \ud \ud We will highlight issues which a trustee might reasonably encounter in ascertaining the extent of property available for distribution to creditors. We will consider two elements in particular in light of the recent decision of the High Court in Cummins (a bankrupt) v Cummins, and the Federal Court in Anderson v Peldan. Both cases involved an examination of joint tenancy. Joint tenancy is one way\ud for two or more co-owners to hold their estate in common. It will only arise where there is a unity of time, title, possession and interest between co-owners, and then only where there is an intention to hold as such (Property Law Act Qld provides for a presumption in favour of tenancy in common). The joint tenancy provides each co-owner the right to survivorship - upon the death of an owner that owner's estate is extinguished and the estate of surviving co-owners are enlarged proportionately to the extent of the deceased's estate. This occurs irrespective of the deceased’s testamentary wishes. \ud \ud Anderson v Peldan concerned the severance by an insolvent of joint tenancy held by the insolvent and his elderly spouse and whether the severance before death is capable of being a “transfer of property” in terms of s121 of the Bankruptcy Act