Consequences of Co-Ownership

Severance

• The law of severance allows the parties to break out of JT to become TiC

  • This is usually to escape survivorship as you do not want the other parties to get your interest

  • Cannot sever by will, must sever before death (Gould v Kemp)

• Most cases are a dispute over whether a severance has occurred

  • There is a sense in such cases that the joint tenancy is unfair (Williams v Hensman and Burgess v Rawnsley)

  • In these cases, they repeat the idea that the law favours the certainty of a joint tenancy, but equity favours the fairness of a tenancy in common

• Common Law Severence:

  • Williams v Hensman (1861)– a deceased’s estate was invested in a mortgage fund and co-owned by children as JTs. Some of children died: if joint tenancy then goes to the survivours; if TiC then goes to the dead children’s estates.

  • Per Page-Wood VC, three ways to sever:

    • Act On Your Own Share

    • Mutual Agreement

    • Mutual Conduct

  • [Also now:]

    • Statutory Severance (s. 36 (2) of LPA) and

    • Severence by Unlawful Killing (Crippen)

• 1) Statutory Severance under s.36(2) LPA

  • Written notice sent to the written address of the property that is the subject of the severance (s.196 LPA 1925)

  • It needs to be delivered, but not necessarily read (Re 88 Berkley Road)

  • Once served, a notice to sever cannot be revoked

    • Kinch v Bullard (1998) – wife thinking husband would pre-decease her destroyed the letter severing tenancy. Held that this was still effective.

  • Unclear what ‘written’ requires (does email count?)

  • A will is not sufficient, but muitual wills are (Williams v Hensman)

  • The written notice does not need to be formal – any written communication which indicates an immediate intention to sever will count

    • Smith v Davis (solicitors correspondence re divorce)

    • Quigley v Masterson (letter in relation to Court of Protection)

  • But this intention must be immediate

    • A divorce petition alone does not convey immediate intention: Harris v Goddard.

    • Divorce proceedings that that have an application for immediate order of sale is effective (Re Draper’s Conveyance).

• 2) “An act operating on your own share”

  • Joint tenant undertakes a legally binding act which severs their share.

    • Total alienation (disposition of share to a third party) under s.53(1)(c_ LPA 1925.

    • Partial alienation such as taking out an equitable mortgage (First National Securities v Hegerty)

    • Involuntary alienation, e.g. bankruptcy (Re Gorman)

  • Needs to be written to ensure it is legally binding

  • Leases could amount to severance (have done so in Australia) but could hold that everyone has ability to share in rent so no severance.

• 3) “By mutual agreement…”

  • An agreement amongst all the existing joint tenants to bring the joint tenancy to an end.

  • Previously inconclusive negotiations (including failure to agree on price) were not sufficient: Nielson-Jones v Fedden.

    • Burgess v Rawnsley disagreed as no specifically performable contract is required, merely evidence of intention. Thus, negotiations may be sufficient to sever.

  • Hunter v Babbage [1994] – reaching an agreement to deal with a property in a way that involves severance is sufficient.

• 4) “…or course of conduct”

  • Burgess v Rawnsley – no agreement but the course of conduct (negotiations to sell) implied intention.

    • Cannot pinpoint the agreement, but can say that all the joint tenants have behaved in such a way as to demonstrate that it was severed. Evidence/fact driven.

  • Putting up a property for sale is not sufficient to constitute severance, but doing so with the clear intention to sever (i.e. one party receives ‘lion’s share’ of sale) is sufficient: Davies v Smith [2011]

  • Used by courts if cannot find another better way.

• 5) Unlawful killing

  • Clearly encompasses murder and manslaughter (Re Crippen). The policy here is to prevent the surviving joint tenant from benefitting from their wrong, no reason not to extend it beyond murder and manslaughteret

TOLATA 1996

• Trustees Powers; s.6 and s.7 TOLATA 1996

  • Have all of the powers of an absolute owner.

  • Where beneficiaries are sui juris then they may given written instructions for the appointment of new trustees. No obligation to appoint new trustees.

  • S.9 allows trustees to delegate their powers.

  • S.12/13 gives...

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