Land - Trusts & Coownership - Cases (1) - updated1
Severance
Methods of severance:
1. Alienation
2. Mutual agreement (even oral ones) – Burgess v Rawnsley (1975)
- Burgess demonstrates that severance of an equitable joint tenancy can be effected by a course of dealing (no. 3 below). CA unanimously held that an oral agreement between two joint tenants for one to buy the other’s share was sufficient to demonstrate an intention by them that the beneficial joint tenancy ought to be severed even though the agreement was unenforceable because of non-compliance within s40 LPA 1925 (repealed)
- The significance of the agreement was not that it bound the parties, but that it served as an indication of a common intention to sever
- Since the joint tenancy had been severed the house was not R’s by survivorship. Rather, she held it on trust for herself and the coowner’s estate in equal shares.
3. Course of dealing (if insufficient mutuality or finality, no severance) – Gore and Snell v Carpenter
- In Gore & Snell case, for mutual agreement to sever a joint tenancy, the agreement must be accepted by all parties [draft separate agreement not formalized before husband died]
4. Notice in writing (intention to sever with immediate effect) – LPA s36(2), Harris v Goddard
- Harris case is a leading authority on severance of an equitable joint tenancy by notice in writing. By virtue of s36(2) LPA 1925 an equitable joint tenancy can be severed by a joint tenant giving written notice to the other joint tenants. Any form of written notice will suffice provided it is given to all the other joint tenants and it shows a sufficient wish to effect an immediate severance. An unequivocal intention is sufficient.
- Here a mere prayer in a divorce petition relating to the former matrimonial home was held NOT to be a notice of a desire to sever the joint tenancy because there was deemed to be NO sufficient IMMEDIATE intention to receive a specific share. Rather it was simply a request for the future.
Goodman v Gallant
- If two persons have held their home as joint tenants beneficially, on severance they will each obtain a half-share. They cannot claim a larger share by reference to the contributions they might have made respectively to the property.
- An important decision, which emphasises the significance of an express declaration of beneficial entitlement and the limited effect of severance. In 1978, Mrs Goodman and Mr Gallant, who were living together, purchased a property (Mrs Goodman’s former matrimonial home). In the conveyance, they declared that they held the property “upon trust for themselves as joint tenants”. In 1983, by which time the couple had separated,
Mrs Goodman served a written notice of severance on Mr Gallant. This was followed by an application to court seeking a declaration as to their respective interests. Mrs Gallant claimed that as she had paid three-quarters of the purchase price of the property, she should now be entitled to three-quarters of the beneficial interest in the house.
- The Court of Appeal held that Mrs Goodman could not go behind the express declaration of trust. On severance of the beneficial joint tenancy, the parties would thereafter hold as beneficial tenants in common in two equal shares. Mrs Goodman was bound by the terms of the trust to which she was a party. She could not claim an enhanced beneficial interest on the basis of her financial
contribution to the purchase of the land having been greater than Mr Gallant’s.
Methods of severance:
1. Alienation
2. Mutual agreement (even oral ones) – Burgess v Rawnsley (1975)
- Burgess demonstrates that severance of an equitable joint tenancy can be effected by a course of dealing (no. 3 below). CA unanimously held that an oral agreement between two joint tenants for one to buy the other’s share was sufficient to demonstrate an intention by them that the beneficial joint tenancy ought to be severed even though the agreement was unenforceable because of non-compliance within s40 LPA 1925 (repealed)
- The significance of the agreement was not that it bound the parties, but that it served as an indication of a common intention to sever
- Since the joint tenancy had been severed the house was not R’s by survivorship. Rather, she held it on trust for herself and the coowner’s estate in equal shares.
3. Course of dealing (if insufficient mutuality or finality, no severance) – Gore and Snell v Carpenter
- In Gore & Snell case, for mutual agreement to sever a joint tenancy, the agreement must be accepted by all parties [draft separate agreement not formalized before husband died]
4. Notice in writing (intention to sever with immediate effect) – LPA s36(2), Harris v Goddard
- Harris case is a leading authority on severance of an equitable joint tenancy by notice in writing. By virtue of s36(2) LPA 1925 an equitable joint tenancy can be severed by a joint tenant giving written notice to the other joint tenants. Any form of written notice will suffice provided it is given to all the other joint tenants and it shows a sufficient wish to effect an immediate severance. An unequivocal intention is sufficient.
- Here a mere prayer in a divorce petition relating to the former matrimonial home was held NOT to be a notice of a desire to sever the joint tenancy because there was deemed to be NO sufficient IMMEDIATE intention to receive a specific share. Rather it was simply a request for the future.
Goodman v Gallant
- If two persons have held their home as joint tenants beneficially, on severance they will each obtain a half-share. They cannot claim a larger share by reference to the contributions they might have made respectively to the property.
- An important decision, which emphasises the significance of an express declaration of beneficial entitlement and the limited effect of severance. In 1978, Mrs Goodman and Mr Gallant, who were living together, purchased a property (Mrs Goodman’s former matrimonial home). In the conveyance, they declared that they held the property “upon trust for themselves as joint tenants”. In 1983, by which time the couple had separated,
Mrs Goodman served a written notice of severance on Mr Gallant. This was followed by an application to court seeking a declaration as to their respective interests. Mrs Gallant claimed that as she had paid three-quarters of the purchase price of the property, she should now be entitled to three-quarters of the beneficial interest in the house.
- The Court of Appeal held that Mrs Goodman could not go behind the express declaration of trust. On severance of the beneficial joint tenancy, the parties would thereafter hold as beneficial tenants in common in two equal shares. Mrs Goodman was bound by the terms of the trust to which she was a party. She could not claim an enhanced beneficial interest on the basis of her financial
contribution to the purchase of the land having been greater than Mr Gallant’s.
posted by pompom at 9:44 PM
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