Экзамен зачет учебный год 2023 / Sparkes, A New Land Law

derive from one document of title and (if you accept Blackstone’s fourth unity) at the same time, and it must not have been broken by a severance.

Tenancy in common arises if the beneficiaries hold by several titles or by several rights. Unity of interest is lacking if the co-owners hold unequal shares, for example if A holds 1/4 and B holds 3/4 absolutely. Contribution trusts are commonly unequal, and so the parties must take as beneficial tenants in common.108 Another method is to use words of severance, for example as beneficial tenants in common or in equal shares.109

Another method is assignment of the beneficial interest of a joint tenant, which breaks the single equitable title. The continuing beneficiaries trace their title from the creation of the joint tenancy, but those joining later trace title from the assignment and cannot come on board as joint tenants.110

3.Limited co-ownerships

[16.20] Limited co-ownerships arise when what is shared is an equitable interest created by a will or settlement, such as a shared life interest, pre-1997 entail or other interest under a trusts of land. These are analysed below.111

H. IMPLIED CO-OWNERSHIP

1.Co-ownership implied from contribution

[16.21] Joint tenancy is implied from equal contributions. In medieval law, joint tenancy simplified the collection of feudal payments, so it was preferred at common law, and the presumption in favour of it survived112 long after this reason had become obsolete.113 It continues to apply where property is purchased with equal contributions,114 or under a common intention to give equal interests.115 Survivorship is an equal chance, so there is nothing inequitable in giving all to the longest liver.116 Tenancy in common is implied from unequal shares, reflecting unequal contributions or a common intention to give shares which are unequal.117 It would be unfair to create a lottery on the life of fellow beneficiaries,118 to give a larger contribution to a longer liver.119 In this case equity favours the tenancy in common, and prevails over the contrary legal rule.

108Williams & Glyn’s Bank v. Boland [1981] AC 487, HL.

109See below [16.42].

110See below [16.44].

111See below [18.09].

112Blackstone’s Commentaries vol 2, 186.

113Staples v. Maurice (1774) 4 Bro Parl Cas 580, 2 ER 395, HL.

114Morley v. Bird (1798) 3 Ves 628, 30 ER 1192; Cowcher v. Cowcher [1972] 1 WLR 425, 430F, Bagnall J.

115Bernard v. Josephs [1982] Ch 391, 403G, Griffiths LJ.

116Lake v. Gibson (1729) 1 Eq Cas Abr 290, 21 ER 1052; Aveling v. Knipe (1815) 19 Ves 441, 34 ER 550.

117Bull v. Bull [1955] 1 QB 234, CA; Williams & Glyn’s Bank v. Boland [1981] AC 487, HL; City of London BS v. Flegg [1988] AC 54, HL; Abbey National BS v. Cann [1991] 1 AC 56, HL.

118Partriche v. Powlet (1740) West t Hard 4, 26 ER 430; Gould v. Kemp (1834) 2 My & K 304, 39 ER 959; Burgess v. Rawnsley [1975] Ch 429, 438, Lord Denning MR.

119Lake v. Craddock (1733) 3 P Wms 158, 24 ER 1011.

2.Joint business ventures

[16.22] A tenancy in common is also implied in those business ventures where the gamble involved in survivorship is inappropriate. Joint lenders are presumed to advance money as tenants in common,120 even if there is a joint account clause binding the borrower.121 Again, survivorship has no place in a business partnership, where people carry on a business in common and share profits,122 and hence the statutory rule that partnership property123 is held in a beneficial tenancy in common. Examples occur when land is used for farming,124 land speculation,125 or for a club,126 but not from joint holding of land or sharing rental income.127

The equitable presumption of a tenancy in common was extended to other joint ventures,128 in Malayan Joint Credit v. Jack Chia129 a suite of business offices let on a joint lease was divided so that A occupied 3,614 square feet and B took 2,306 square feet. Although closely analogous to existing categories, the absence of profit sharing and absence of purchase money meant that the Privy Council had the stretch the existing equitable rules when it found a tenancy in common in the proportions 3614:2306.130 Further extensions may occur in future. Factors considered included the separate commercial interests, an agreement in advance about space allocation, an agreement to divide the rent and service charge, separate invoicing of the deposit, and actual division of rent and service charge payments.131

I.CREDITORS ACQUIRING BENEFICIAL INTERESTS

1.Mortgage by assignment

[16.23] A mortgage of an equitable interest in land is made by assigning it to the lender, who becomes an equitable co-owner. Thus if T1 and T2 hold land on trust for A and B as beneficial co-owners, A alone cannot touch the legal estate,132 but he can transfer his beneficial interest to a lender as security for a loan. The form is an assignment of the interest being mortgaged, with a provision for reassignment on

120Edwards v. Fashion (1712) Prec Ch 332, 24 ER 156 (words of severance anyway).

121Re Jackson (1887) 34 Ch D 732; Steeds v. Steeds (1889) 22 QBD 537, 541; LPA 1925 s 111; LRA 2002

s 56.

122Partnership Act 1890 s 1(1).

123Partnership Act 1890 ss 20–21; Limited Liability Partnership Act 2000; Barton v. Morris [1985] 1 WLR 1257.

124Jeffreys v. Small (1683) 1 Vern 217, 23 ER 424; Morris v. Barrett (1829) 3 Y & J 384, 148 ER 1228; but Ward v. Ward (1871) LR 6 Ch App 789 (farming as joint tenants).

125Dale v. Hamilton (1846) 5 Hare 369, 67 ER 955; Darby v. Darby (1856) 3 Drew 495, 61 ER 992; Re Hulton (1890) 62 LT 200.

126Brown v. Dale (1878) 9 Ch D 78; Megarry & Wade (6th ed), [9.093–9.096].

127Partnership Act 1890 s 2(1).

128Lake v. Gibson (1729) 1 Eq Cas Abr 290, 21 ER 1052; on appeal Lake v. Craddock (1733) 3 P Wms 158, 24 ER 1011.

129[1986] AC 549, PC; JE Martin [1986] Conv 354.

130At 560F.

131At 561.

132Even if A and B are also trustees.

redemption of the loan,133 Writing is required whatever form of property is held in the trust.134 If the loan is not repaid, the lender could sell the equitable interest which is mortgaged,135 but the real remedy is to apply for an order for sale of the legal estate.

2.Fraudulent mortgage by one co-owner

[16.24] One co-owner may be tempted to defraud the other by arranging for a friend to forge the other’s signature on a mortgage. If husband and wife are joint owners or a matrimonial home, H may induce his new girlfriend to masquerade as his wife when mortgaging the house. Such a forgery has no effect on the legal estate, but does mortgage H’s beneficial interest. Husband and wife are left holding the legal estate jointly on trust for the lender and wife. Just this happened in Ahmed v. Kendrick.136 A failed attempt to mortgage a legal estate operates as a valid mortgage of the equitable interest under a statutory all-estate clause: a mortgage or conveyance is effectual to pass any estate or interest held by the conveying parties.137 Hence if A purports to transfer or mortgage a legal estate vested in A and B, only the beneficial interest actually held by A will pass. The beneficial interest under a trust of land is clearly an interest in the land,138 but the law was the same under a trust for sale before 1997.139 Otherwise an innocent purchaser could be severely prejudiced.

A problem may remain where the mortgage takes the form of a contract to mortgage. Cedar Holdings v. Green140 held that specific performance should not be ordered of a contract for an equitable charge so as to prejudice a third party title. The point was not expressly disapproved in Boland,141 but the Court of Appeal which decided Green misunderstood the equitable position. A mortgage is executed once the money is lent, a fact which greatly reduces the defences to specific performance. Later cases have avoided the difficulty by relying on a well-known exception where hardship is caused to the third-party lender.142

133Ex p Kensington (1813) 2 V & B 79, 35 ER 249 (stocks).

134LPA 1925 s 53(1)(c); notice must be given to the trustees to secure priority; ss 85–87 (forms of mortgages of legal estates) do not apply.

135LPA 1925 s 102.

136[1988] 2 FLR 22; Bankers Trust Co v. Namdar [1997] EGCS 20, CA; A Dunn [1996] Conv 371.

137LPA 1925 s 63; Bridges v. Harrow LBC [1981] 2 EGLR 143, 145 (tree roots); Deen v. Andrews [1986] 1 EGLR 262, Hirst J; Kijowski v. New Capital Properties (1990) 15 Con LR 1 (not benefit of NHBC agreement); Boots the Chemist v. Street [1983] 2 EGLR 51, 52 (right to rectify); Brackenbank Lodge v. Peart (1994) 67 P & CR 249 257–258, Russell LJ (soil passed with grazing); Bank of Ireland v. Bell [2001] 2 FLR 809; R Probert [2002] Conv 61.

138TLATA 1996 s 3.

139Williams & Glyn’s Bank v. Boland [1981] AC 487, 507G, Lord Wilberforce; Thames Guaranty v.

Campbell [1985] QB 210, 239, Slade LJ; Ahmed v. Kendrick [1988] 2 FLR 22, 28D–E; Re Ng [1998] 2 FLR 386.

140[1981] Ch 129, CA.

141[1981] AC 487 HL.

142Thames Guaranty v. Campbell [1985] QB 210, 235, 239G–240H, Slade LJ; JE Adams [1985] Conv 165; Ahmed v. Kendrick [1988] 2 FLR 22, 28 (left open).

3.Severance by mortgage etc

[16.25] A mortgage of a beneficial interest or an attempt at a fraudulent mortgage of a legal estate severs just as much as an outright assignment.143 For example, in First National Securities v. Hegerty144 the husband forged his wife’s signature on a mortgage of a matrimonial home held by the couple as beneficial joint tenants. Acting as a charge on the husband’s beneficial interest, this caused a severance.

An involuntary transfer also effects a severance of the beneficial interest.145 A charging order enforcing a debt against the share of a beneficial co-owner would also sever.146 If a family home is held by beneficial joint tenants and a debt is incurred by one party alone, (say H, since insolvent husbands figure more often in the cases) a charging order affects only H’s beneficial interest.147

4.Bankruptcy and its severing effect

[16.26] Any beneficial interest held by a bankrupt passes to the trustee in bankruptcy,148 thus converting a beneficial joint tenancy to a tenancy in common. Bankruptcy has no direct effect on the holding of the legal estate.149

Pre-1986 a bankruptcy order was backdated in its effect to the act of bankruptcy which precipitated the proceedings. Hence, if a person died without having been adjudicated bankrupt in his lifetime, a severance would nevertheless occur if he became bankrupt posthumously. This happened in Re Dennis, a case which only reached the Court of Appeal in 1995.150 Dennis committed an act of bankruptcy in September 1982 (before 1986) leading a creditor to submit a petition in bankruptcy in December of that year and to the adjudication of his bankruptcy in November 1983. According to the Elizabethan principle of relation back,151 this dated from the act of bankruptcy in September 1982, and caused a severance at that date. Meanwhile his wife died in February 1983 and did so as a tenant in common. Her share she left to her children by will, and it evaded the clutches of the trustee in bankruptcy, who could claim only Dennis’ beneficial share.

The Insolvency Act 1986 abolished relation back.152 In Re Palmer153 a solicitor stole money from his firm to such an extent that his liabilities would make him insol-

143York v. Stone (1709) 1 Salk 158, 91 ER 146; Denne d Bowyer v. Judge (1809) 11 East 288, 103 ER 1014 (conveyance by 3 of 5 joint tenants severed interest of 3 at law); Williams v. Hensman (1861) 1 John & H 546, 70 ER 862; Re Pollard’s E (1863) 3 De G J & Sm 541, 557–558, 46 ER 746; Re Sharer (1912) 57 SJ 60.

144[1985] QB 850, CA; Ahmed v. Kendrick (1987) 56 P & CR 120; not a sham where the lender is a complicit party: Penn v. Bristol & West BS [1995] 2 FLR 938.

145Eg appointment of an equitable receiver: Hills v. Webber (1901) 17 TLR 513, CA; or a voluntary arrangement: Johnson v. Davies [1999] Ch 117, CA.

146Irani Finance v. Singh [1971] Ch 59, CA.

147First National Securities v. Hegerty [1985] QB 850, 854, Bingham J; J Price [1989] Conv 133.

148Thomason v. Frere (1809) 10 East 418, 103 ER 834; Re Gorman [1990] 1 WLR 616, Vinelott J; Lee v. Lee [1998] 1 FLR 1018.

149Re Solomon [1967] Ch 573; it is a ground for removal as a trustee.

150[1996] Ch 80, CA; L Tee [1996] CLJ 21.

151[1996] Ch 80, 89–104, Millett LJ; Ex p Smith (1800) 5 Ves 295, 31 ER 595; Smith v. Stokes (1801) 1 East 363, 102 ER 141; Morgan v. Marquis (1853) 9 Exch 144, 156 ER 62.

152IA 1986 s 278.

153[1994] Ch 316, CA; M Haley [1995] Conv 68; L Tee [1995] CLJ 52; Abergavenny’s case (1607) 6 Co Rep 78b, 77 ER 373.

vent. He died in November 1990 before he could be sued by his creditors. In 1991 his executors applied for an insolvency administration order, which was held to apply from its date and not to be backdated. Hence the interest in Palmer’s matrimonial home had passed by survivorship to his wife and his creditors had no claim to it.154 Survivorship applies when a joint tenant dies after 1986 and none of the joint tenants has faced a bankruptcy petition at the moment of his death.

5.Charging orders

[16.27] Under a trust of land, the debt of a beneficiary can be charged on the equitable interest under the trust though not on the legal estate.155 A beneficial interest under a trust of land can be overreached, and so too can a mortgage or charging order affecting it. In particular a charging order is registrable.156 To allow registration of a land charge or caution “cuts right across the system of conveyancing.”157

6.Priority of claims

[16.28] Priority of mortgages of equitable interests of land is decided primarily by the order of notices received by the trustees, who constitute in a sense a register.158 The rule in Dearle v. Hall159 had always applied to personalty and choses in action. In 1925160 it was extended to apply to a mortgage of any equitable interest in unregistered land,161 including all beneficial interests under trusts of land, and formerly encompassing trusts for sale,162 strict settlements and rights in capital money.163 Since 1987 it has also applied to registered land.164 An experiment with a minor interests index to record dealings with beneficial interests in registered land was abandoned.165

Dearle v. Hall governs priority between two competing dealings after the creation of the trust,166 such as mortgages, charges,167 assignments, settlements, and transfers by operation of law.168 According to United Bank of Kuwait v. Sahib,169 it does not

154SI 1986/1999, sch 1 part II para 12, appeared to provide to the contrary, but these regulations were ultra vires the IA 1986.

155TLATA 1996 s 3.

156Perry v. Phoenix Assurance [1988] 1 WLR 940; JE Martin [1988] Conv 286; now confirmed by TLATA 1996 sch 3 para 12. Nor is notice to the trustees needed.

157At 945B, Browne-Wilkinson V-C.

158Ward v. Duncombe [1893] AC 369, 393, Lord Macnaghten.

159(1828) 3 Russ 1, 38 ER 475; Foster v. Cockerell (1835) 3 Cl & Fin 456, 6 ER 1568 HL; EC Firth (1895) 11 LQR 337; J de Lacy [1998] Anglo-American 87.

160LPA 1925 s 137 (some parts amend the law of personalty); J Howell [1993] Conv 22.

161Lee v. Howlett (1856) 2 K & J 531, 69 ER 893; Re Richards (1890) 45 Ch D 589, Stirling J.

162Gresham Life Assurance Society v. Crowther [1915] 1 Ch 214, CA.

163LPA 1925 s 137(1); reversing Ward v. Duncombe [1893] AC 369, 389–390.

164LRA 1986 s 5.

165LRA 1925 s 102(2). Existing entries at the end of 1986 are treated as a notice to the trustees and an indemnity is provided.

166LPA 1925 s 137(10).

167Rhodes v. Allied Dunbar Pensions Services [1987] 1 WLR 1703, 1707.

168LPA 1925 s 137(1), (10).

169[1997] Ch 107, 118, 120 (Sogenal’s equitable mortgage against Kuwait Bank’s charging orders); this point was not argued on appeal; AJ Oakley (1996) 112 LQR 215; Scott v. Lord Hastings (1858) 4 K & J 633, 637–638, 76 ER 633.

apply to the competition between a mortgage and a later charging order. Chadwick J thought that notice should not promote a judgment creditor who had been content to advance credit without any security.

Between mortgages the main issue is the order by which notices are received by the trustees. However a lender with notice of a prior mortgage at the time of making his loan170 cannot sneak priority by giving the first notice to the trustees.171 Notice secures priority, and ensures that the trustees meet the claim.172 It is not necessary to create a valid mortgage between the parties.173 If the mortgage relates to a legal estate in land, notice is unnecessary and does not give any priority.174

Notice to secure priority must now be in writing.175 Oral notice is sufficient to protect the lender against payment by the trustee to the borrower, but written notice is necessary to secure priority against a later lender. It must be served on the trustees. It is advisable to serve notice on all trustees, since the statute refers to “trustees” in the plural, though it also continues the effect of the old rules about notices. Once given a notice continues its effectiveness following the death or retirement of any trustee. If notice was given to a single trustee who then retired, continuing effect for the notice was dependent upon communication between them,176 but the trustee receiving notice is now required to deliver it to the custody of all trustees.177 An alternative (and superior) procedure is to indorse notice on the trust instrument notices of dealings.178 Any person affected may seek production of the trust instrument.179

J.SEVERANCE

[16.29] Severance is the process of converting a joint tenancy into a tenancy in common.180 It is encouraged both by equity181 and also as a matter of legislative policy.182

170Later notice is irrelevant: Mutual Life Association Society v. Langley (1886) 32 Ch D 460, 486, Cotton

LJ.

171Re Holmes (1885) 29 Ch D 786; Rhodes v. Allied Dunbar Pension Services [1989] 1 WLR 800, 806, Nicholls LJ.

172Ward v. Duncombe [1893] AC 369, 392, Lord Macnaghten; Hodgson v. Hodgson (1837) 2 Keen 704, 48 ER 800.

173Ward v. Duncombe [1893] AC 369, 392, Lord Macnaghten.

174Wiltshire v. Rabbits (1844) 14 Sim 76, 60 ER 285; Union Bank of London v. Kent (1888) 39 Ch D 238, CA; Assaf v. Fuwa [1955] AC 215, PC; HWR Wade [1955] CLJ 32.

175LPA 1925 s 137(3).

176Ward v. Duncombe [1893] AC 369, HL; Re Phillip’s Trusts [1903] 1 Ch 183; Lloyds Bank v. Pearson

[1901] 1 Ch 865.

177LPA 1925 s 137(8).

178S 137(4)–(6). Or a trust corporation can be appointed to receive notices and its appointment indorsed: s 138. For the pre-1926 law see: Phipps v. Lovegrove (1873) LR 16 Eq 80; Hill v. Peters [1918] 2 Ch 273, 278.

179LPA 1925 s 138(9)–(11); this reverses Low v. Bouverie [1891] 3 Ch 82.

180HW Wilkinson (1984) 134 NLJ 63.

181Burgess v. Rawnsley [1975] Ch 429, 438D, Lord Denning MR; Partriche v. Powlet (1740) West t Hard 4, 26 ER 430; Gould v. Kemp (1834) 2 My & K 304, 39 ER 959.

182Burgess v. Rawnsley [1975] Ch 429, 448B, Sir John Pennycuick.

1.Severance restricted to beneficial interests

[16.30] Lord Birkenhead’s prohibition of severance of a joint tenancy of the legal estate,183 merely serves to confirm the possibility of severing the equitable interests.184 A transfer to A and B to hold the freehold estate as joint tenants on trust for themselves as beneficial joint tenants, which is followed by a severance, will leave A and B still holding the legal estate as joint tenants but on trust for themselves as beneficial tenants in common. The implied trust continues.185

When a marriage or relationship deteriorates the first step should often be a severance,186 but care is needed because a notice of severance can inflame passions and lead to the flinging of pots and pans and the slamming of doors.187 A tenancy in common should always be used for business property. A person may also wish to sever if, as Jekyll MR once said, he “has an ill opinion of his own life”.188

Severance destroys survivorship, since it converts an existing joint tenancy to a tenancy in common, the parties thenceforth holding undivided shares as tenants in common,189 and necessarily in equal shares.190 Severance must occur during the lifetime of the joint tenant,191 with no effect being given to an attempt to sever by will,192 though the Law Commission has recommended a change in this rule.193

Can a joint tenancy be made unseverable? This was once achieved by a tenancy by entireties between husband and wife, “the most intimate union known to law.”194 New creations were prohibited after 1882 and those few left in 1925 were converted to normal joint tenancies.195 An attempted revival by Lord Denning MR in Bedson v. Bedson196 was contrary to authority197 and heretical.198 Tailor-made co-ownerships could achieve something similar, but there are many taxation traps.199

2.Severance on the legal title

[16.31] Where land is vested in beneficial joint tenants, the survivor becomes solely entitled, thus:

183LPA 1925 ss 1(6), 36(2)–(3).

184S 36(2).

185Ali v. Sandwell MBC (1990) 60 P & CR 374, 375.

186Despite McDowell v. Hirschfield Lipson & Rumney [1992] 2 FLR 126, 129H.

187Re 88 Berkeley Road, London NW9 [1971] Ch 648, 651E.

188Cray v. Willis (1729) 2 P Wms 529, 22 ER 453.

189Harris v. Goddard [1983] 1 WLR 1203, 1210, Dillon LJ.

190Nielson-Jones v. Fedden [1975] Ch 222, 228D, Walton J.

191Apart from unlawful killing and claims by dependants.

192Carr-Glynn v. Frearsons [1999] Ch 326, CA; Swift d Neale v. Roberts (1764) 3 Burr 1488, 1496, 97 ER 941; Gould v. Kemp (1834) 2 My & K 304, 309, 39 ER 959; Littleton’s Tenures, [287]; Coke on Littleton [185b]; Blackstone’s Commentaries vol 2, 184; L Tee [1995] Conv 105, 111–113.

193Law Com WP 94 (1985).

194Challis, Real Property (Butterworths, 3rd ed by C Sweet, 1911), 377.

195Married Women’s Property Act 1882 s 1; LPA 1925 sch 1 part VI.

196[1965] 2 QB 666, 678B.

197At 690E, Russell LJ; RE Megarry (1966) 82 LQR 29; S Roberts (1966) 29 MLR 334.

198Radziej v. Radziej [1967] 1 WLR 659 at first instance; Re Draper’s Conveyance [1969] 1 Ch 486, 492E–494B; Cowcher v. Cowcher [1972] 1 WLR 425; IA Saunders (1973) 37 Conv (NS) 270, 272; Harris v. Goddard [1983] 1 WLR 12093, 1208F–H.

199Penn v. Bristol & West BS [1995] 2 FLR 938.

to A and B in fee simple as joint tenants on trust for A and B as joint tenants;

When A dies:

To B in fee simple on trust for B in fee simple to B in fee simple.

The position is quite different is a severance occurs before A’s death. The end result in that case is

to B in fee simple as joint tenants on trust for A’s personal representatives and B as tenants in common.

The ultimate beneficiaries of A’s share will be those named in his will or entitled as his next of kin on his intestacy. In this second case the survivor (B) is not in a position to sell, but only to overreach by the appointment of a second trustee.

So although severance affects the equitable title it has an important impact on the legal title. It is important that the change is recorded on the legal title by the endorsement of a memorandum of the severance on the conveyance which passed the land to the beneficial joint tenants or, if title is registered, by entry of a restriction.

The survivor can now sell and give a receipt for the purchase money, unfettered by the former trust. If title is registered, the two appeared on the register as proprietors without any restriction to bite on death, so B is able to sell on proof of A’s death.

3.Effect of severance

[16.32] Severance of the beneficial joint tenancy creates a tenancy in common, with quite different conveyancing procedures following death. Legal title vests in the sole surviving co-owner, since legal co-owners are necessarily joint tenants, but the undivided beneficial share of a deceased tenant in common passes under his will or under his intestacy – immediately to his personal representatives, and ultimately to his successor nominated by will or to his next of kin on intestacy. The trust continues and an overreaching sale is required by two trustees, the survivor needing to appoint an additional trustee in order to achieve this. Proper conveyancing practice is to mark the severance on the legal title, in registered land by applying to the registrar for a joint proprietor restriction,200 or if title is unregistered by endorsing a memorandum on the title deed creating the beneficial joint tenancy.

4.Hidden severance: registered land

[16.33] If no restriction is entered following a severance, registration confers full powers of disposition on the surviving proprietor. A good title is obtained by a purchaser as if the survivor is really beneficially entitled on death. Informal acts not notified to him have no effect on a purchaser, unless they happen to create overriding interests.201

200See above [13.36].

201LP (Joint Tenants) A 1964 has no application where title is registered: s 3 (as amended by LRA 2002 sch 11). Honesty is not required: see below [20.45]. But a purchaser might be bound by the severed share of a person in occupation: G Ferris & G Battersby [1998] Conv 168, 183–184.

5.Hidden severance: unregistered land

[16.34] If unregistered title deeds show a conveyance to beneficial joint tenants but no trace of a memorandum of severance, the purchaser is left unsure whether the case is one of beneficial joint tenancy (example 1 above – survivor can sell) or of tenancy in common after a hidden severance (example 2 above – second trustee required). It is impossible to prove the negative that no severance has occurred, but a purchaser is protected by being able to assume a beneficial survivorship if the three conditions of the Law of Property (Joint Tenants) Act 1964202 are satisfied.

(1) Conveyance by beneficial owner

[16.35] The seller must be expressed to convey as beneficial owner or the conveyance must recite that he is so entitled.203 Before 1995 the necessary statement would usually have been included in the conveyance in order to trigger the beneficial owner covenants for title. If for some reason they were missing from a pre-1964 conveyance, a written statement could be obtained afterwards from the seller or his personal representative.204 After 1995, covenants for title are triggered by the words “with full title guarantee”205 so that an extra statement is required to bring into play the protection of the 1964 Act. Protection is also provided where a survivor of beneficial joint tenants dies and it is his personal representatives who are selling.206

(2) No bankruptcy registration

[16.36] Bankruptcy passes the beneficial interest to the trustee in bankruptcy and so works a severance. A purchaser is required to obtain a clean land charges search.207

(3) No memorandum of severance

[16.37] Protection is removed if there is a memorandum of severance endorsed on the conveyance to the beneficial joint tenants.208 This requirement is concerned with the protection of purchasers and failure to endorse the memorandum does not remove the validity of the notice of severance as between the joint tenants – even under an express clause.209

The 1964 Act imposes no duty of diligence to discover a severance beyond checking for a memorandum. In the first edition of this work210 it was stated that:

202P Jackson (1964) 30 Conv (NS) 27; PH Kenny and A Kenny (1980) 80 LSG 1473, 1475.

203LP (Joint Tenants) A 1964 s 1(1).

204S 2. The Act applies retrospectively from the start of 1926.

205See above [11.60].

206S 1(2). The pre-1995 covenants for title trigger “as personal representatives” was not sufficient.

207S 1(2)(b), as amended by IA 1985.

208LP (Joint Tenants) A 1964 s 1(2)(a).

209Grindal v. Hooper discussed immediately below.

210P Sparkes NLL (1st ed), 317.

“Honesty is a requirement,211 and it would not be safe to take title if the buyer knows of a severance. In such a case he should insist on an overreaching conveyance.”

That may in fact have been over dogmatic of the law as it stood in the time, but it has turned out to be correct. When the beneficial joint tenancy between S and V in Grindal v. Hooper212 was severed by V’s notice, this was not, as the express terms of the conveyance required, endorsed on the conveyance. After V died, Sheila Hooper conveyed the unregistered title to Brian Hooper (who knew of the severance) for £600. Title derived from Brian was not absolute, as they would have done if rather they held a half share on trust for V’s executors. In other words the 1964 Act had not protected Brian because he was not an honest purchaser without notice.

K. METHODS OF SEVERANCE

[16.38] Severance converts a beneficial joint tenancy into a beneficial tenancy in common. Unilateral severance occurs by the act of one joint tenant without the concurrence of the others, either by:

1.written notice under section 36 of the Law of Property Act 1925; or

2.a disposition destroying one of the unities.

If there are more than two joint tenants, it is only a partial severance, which slices off the share of the person causing the severance but leaves the joint tenancy intact between the other beneficiaries.213 Mutual severance must involve the agreement or conduct of all the joint tenants and leading to a complete severance. Methods are:

1.a written agreement to sever; or

2.a course of conduct showing a mutual intention to sever.

The present law is clearly unsatisfactory. The Law Commission suggested almost 20 years ago that214 there should be a statutory formulation of a single method of severance by written notice, and that a gift by will should suffice.

1.Written notice

[16.39] The possibility of effecting severance of a beneficial joint tenancy by written notice was first enacted in 1925:

“[W]here a legal estate . . . is vested in joint tenants beneficially, and any tenant desires to sever the joint tenancy in equity, he shall give to the other joint tenants a notice in writing of such desire . . .”.215

211S 4(1) incorporates the LPA 1925 definition of purchaser in s 205(1)(xxi), that is a purchaser in good faith for valuable consideration.

212[2000] Times February 8th, John Jarvis QC.

213Littleton’s Tenures, [294]; Williams v. Hensman (1861) 1 John & H 546, 70 ER 862 (mortgage authorised by 8 children, 5 adults and 3 minors; effect was {5/8ths to the adult children as joint tenants} and {3/8ths to the minors as joint tenants} with a tenancy in common between those two interests); Napier v. Williams [1911] 1 Ch 361; Bedson v. Bedson [1965] 2 QB 666, 689D, Russell LJ.

214Law Com WP 94 (1985), [16.11–16.14]; L Tee [1995] Conv 105.

215LPA 1925 s 36(2); minor textual amendment by TLATA 1996 sch 2 para 4; this method is not available to joint tenants for life under a strict settlement.