Revision Note: CO-OWNERSHIP:JOINT TENANCY & TENANCY IN COMMON (SEVERANCE)

Co-ownership is a term used to describe those forms of interest in which two or more persons are
simultaneously entitled to possession in the same property. There interests in land are concurrent rather than
consecutive. They take effect behind a trust of land under the Trust of Land & Appointment of Trustees Act
1996. There are two main types of joint holding under a trust of land; a joint tenancy and a tenancy in common.

A joint tenancy is created either expressly i.e. where the parties expressly agree to a joint tenancy, or
impliedly i.e. where the four unities of time, title, interest and possession are present &/or equal contribution
to purchase price has been made &/or this presumption of a joint tenancy is not rebutted by countervailing
equitable presumptions i.e. 1) when words of severance are used in the document; "to be divided between":
Peat v Chapman. 2) When property is bought jointly for commercial/business purposes: Re Fullers Contract. 3)
When two parties purchase property with a joint mortgage: Malayan Credit v Jack Chia. Words of severance will
operate as a strong indication that a joint tenancy is not intended.

A tenancy in common is created either expressly i.e. where the parties expressly agree to a tenancy in common or
impliedly i.e. where only the unity of possession is present &/or unequal contributions have been made towards
the purchase price &/or the presumption of a joint tenancy is rebutted by words of severance.

A joint tenancyhas two main features. First, under this type of share-holding, the co-owners are regarded as one
composite body where "each holds everything and yet holds nothing." Second, and more importantly, a joint
tenancy is characterized by the `right of survivorship.' This follows logically from the concept of a `single
composite body' whereby on the death of one component of the body, the interest simplydevolves on the
surviving components. Moreover, a joint tenant cannot dispose of his interest by will. The right of survivorship
will take precedence over any attempted disposition by will. A joint tenant may nevertheless dispose or sever his
interest inter vivos (in his lifetime).

A tenant in common, on the other hand, only has the unity of possession (as without that there is no co-
ownership). Second, under this type of share-holding, the co-owners have physically undivided yet
mathematically divided shares (e.g. 70% -30%). These shares may be disposed of inter vivos or through a will.

Severance is the process whereby a joint tenant is enabled to separate his notional share of the ownership of
the land from that of the other joint tenant's, so that in relation to his share, he ceases to be a joint tenant but
becomes a tenant in common. As Dillon J stated in Harris v Goddard : "Severance...is the process of separating
off the share of a joint tenant, so that the concurrent ownership will continue but the right of survivorship
will no longer apply . The parties will hold separate shares as tenants in common". The onus of proof is on the
party seeking to establish that severance has in fact taken place.

From the outset it should be noted that there are two limitations on severing a joint tenancy. First, severance
will be effective only on the equitable interest of the co-owners. The only form of holding in law is a joint
tenancy which may never be severed; s 36(2) LPA 1925. Second, severance must be affected inter vivos and
cannot be by means of a will. There are five primary methods recognized by which the interest of a joint
tenant may be severed. In many cases, there may be an overlap between the different methods and one or
more may be pleaded as alternative justifications for establishing that severance has taken place. The methods
are;
1)Written notice (s 36(2) LPA 1925)
2) Under Williams v Hens man per Page Wood VC •
3) Severance by a court order
4) Homicide
5) Severance by merger of interests

1) Written notice, s 36(2) LPA 1925:

This is a unilateral means of severing the joint tenancy. There is no prescribed method or form for the notice. As long
as the notice is'written' and ‘served’ on all the joint tenants, it will be effective provided it evinces ‘an immediate
and unchanging intention to sever that joint tenant’s interest’.

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  Re Drapers Conveyance;the notice was found to exist within documentation forwarded by the wife (amidst
divorce proceedings) to the court seeking sale of the jointly owned property and equal division of assets.
The demand was seen as an unchanging, unequivocal declaration of an intention to sever.
 Gore & Snell v Carpenter; there must an intention to serve a document as a ‘notice of severance’. A
couple decided to divorce and the husband's solicitor drafted a separation agreement including a clause
severing the joint tenancy. He advised the husband to send an independent severance notice but the
husband refused to do so. Ord J held ‘it is in my judgment a question of intention ...it is argued
fortheexecutors that the proposed separation agreement put forward amounted to a s 36(2) notice. It will
be recalled that the proposed agreement expressly refers to severance, but that was only part of the deed
and the deed wasnever accepted. It was put forward…not in isolation but as part of a package of proposals,
and was not intended… and therefore did not take effect as an (independent) notice under s 36(2).”
 Harris v Goddard: a husband and wife decided to divorce. The wife’s petition for divorce sought “such
order bemade" in relation to the matrimonial home as “may be just”. The Court of Appeal held that
the divorce petition did not evince an intention to effect an immediate transformation in the nature
of the beneficial interest but merely illustrated a “desire” that this should be done at some time
during the course of the proceedings. It did not constitute a notice under s 36(2).
 Quigley v Masterson; statements made in court proceedings by one joint tenant that she owned a
fifty percent of the share with the other were seen as effective to sever the joint tenancy between
them.
 Kinch v Bullard : the courts have equated ‘giving notice’ under s 36(2) with ‘serving notice’ under s
196(3) & (4) LPA 1925 . Thus provided the s 36(2) notice is delivered by hand or delivered by
ordinary post to the last known address of the other joint tenants, the notice is validly given. In this
case, after duly posting a notice, the wife intercepted and destroyed the letter upon hearing of her
husband’s (who was a joint tenant with her in the property) death. Neuberger J held that once the
letter was delivered, it took effect under s36 (2) and could not be retracted. There was no
requirement that the letter be actually read by the recipient.
 Re 88 Berkley Road ; if the notice is simply posted to the last know place of residence or business by
registered post or recoded delivery service, it will be effective from the moment it is sent out and
need not have been actually delivered at the address. However, if it is returned by the post office
undelivered, it will not be effective.
 Quigly v Masterson : a notice will never be effective if it is sent at an incorrect address.
 Chadda v HMRC : a written notice which had been signed and communicated to the other joint
tenant was misplaced. The existence of such a document was proven by producing in court a soft
copy of the draft of the notice in the computer data base of the law firm that had formulated the
notice. The court held that severance had taken place. The judge was ready to make such an
inference on the basis that the conduct of the parties over the years strongly indicated that it was
highly probable that all assets between them had been duly divided.
 It is not clear whether a notice by text or e-mail will be effective under the provisions of s 196(3) &
(4). So far, despite the growing importance of electronic transactions in our daily life, English courts
have taken a conservative approach to the matter. Some academics suggest that if the sender of a
text message or an e-mail can show that his notice was received and read, severance may be
deemed to have taken place. However, without any case law on the matter, the question of whether
such a notice would be effective remains unsettled.

2)Williams v Hensman;
In Williams v Hensman, Page Wood VC recognized three ways in which a joint tenancy may be severed and
converted into a tenancy in common; ‘an act of any one of the persons interested operating upon his own share’,
‘mutual agreement’ and a ‘course of dealing’ between the joint tenants also known as mutual conduct.
(a) An act of any one of the persons_ operating upon his share;
This occurs when one equitable joint tenant seeks to deal with ‘their share’ of the land, so manifesting an
intention no longer to be a part of the joint tenancy. The ‘act’ in this regard must be a legally enforceable one so
any conveyance must be made at least by an enforceable contract under s 2 LP(MP)A 1989. Any oral (and
therefore unenforceable) contract for a conveyance will not be effective as severance under this head.
(i) Sale or contract of sale of the joint tenant's share to a thirdparty; the ‘act’ of sale or merely a contract
for sale (actual sale need never take place) have the effect of severing the conveying joint tenants share.

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The conveyance must comply with at least the formality of a contract. Additionally, since it is the
disposition of an equitable interest, it must be affectedby compliance with s 53(1) (c) LPA 1925.
(ii) Sale or contract for the sale of his share to another existing JT; the ‘act’ of sale or merely a contract for
sale (actual sale need never take place) have the effect of severing the conveying joint tenants share. The
conveyance must comply with at least the formality of a contract.
(iii) Mortgage: if it is an execution of a joint mortgage by all the JT's, then it will not be considered an act of
"any one person" and therefore will not affect a severance.Only if one of the joint tenants mortgages his
share will it be seen as ‘an act’ operating to detach his share from that of the other joint tenants. If the joint
tenant fraudulently tries to mortgage the entire Interest under the joint tenancy (rather than just his own),
it will operate to sever his interest only, which will then be bound by fraudulent transaction. The interest of
the other joint tenant's will remain unaffected; First National Securities v Hegerty .
(iv) Involuntary alienation: under the Insolvency Act 1986, a bankruptcy order has the effect of severing the
bankrupt joint tenant's interest.
(v) Commencement of litigation: commencement of litigation pertaining to the joint tenancy has the effect of
severing the litigating claimants share irrespective of the outcome of the proceedings; Harris v Goddard.

(b) Mutual agreement& (c) Mutual conduct;

 Burgess v Rawnsley ;Burgess is the leading authority on severance by mutual agreement and mutual
conduct. It establishes that severance can be affected by an oral or written agreement between all the
joint tenants.If written, it need not be on a specifically enforceablecontract; Hunter v Babbage. The
agreement may be express i.e. a mutual agreement but may also be inferred from the course of dealing
between the parties i.e. mutual conduct.In Burgess, H& R bought property jointly and H was expecting
to marry R. After a year, it became clear to H that R would not marry him and so sought to buy her
share in the property. To this effect the parties agreed on a price of £750. R then demanded more
money (£1000) after which H let the matter go. R moved out and H took care of the properly and all
outgoings. Upon H’s death (3 years later), his daughter B claimed ahalf share of the property on the
grounds that severance had been affected by mutual agreement. Notably, Lord Denning MR and Sir
John Pennycuickconcluded that severance had occurred on the basis of the mutual agreement
between the parties, but in obiter statements, each gave a different interpretation to what could
constitute a mutual conduct sufficient enough to sever the joint tenant’s interests. They emphasized
that ‘the significance of an agreement is not that it binds the partiesbut that it serves as an indication of
a common intention to sever’. It is clear then that the essential requirement for severance by mutual
agreement is that the joint tenants actually reach an appropriate agreement in relation to the beneficial
ownership of the land.The problem arises when there is no such mutual agreement but only
inconclusive negotiations.
Inconclusive negotiations and discussions may also be sufficient to affect severance but under the
third head, namely mutual conduct. There is often a fine line which divides a finding that
negotiations were mutual but inconclusive and that there was a unilateral oral declaration of
severance rather than any mutual course of dealing. In Burgess, Sir John Pennycuick was of the firm
opinion that mutual conduct included ‘negotiations which although not otherwise resulting in any
agreement, indicate a common intention that the joint tenancy should be regarded as severed’…
further he stated ‘I do not doubt myself that where one tenant negotiates with another for some
rearrangmenet of interests, it may be possible to infer from the particular facts a common intention
to sever, even though the negotiations break down’. Lord Denning, on the other hand, was more
concerned to demonstrate that severance could be supported even if there had been no conclusive
agreement on the basis that the course of dealing of the parties ‘clearly evinced an intention by both
parties that the property should henceforth be held in common’…and for him it was equally
sufficient if…’one party made it clear to the other that he desires that they should no longer be held
as joint tenants’.It is the later part of Lord Denning’s statement which has been the target of
immense criticism. The difficulty with this approach is that it seems to suggest that a mere
unilateral statement of intention by a joint tenant, provided it is communicated to the others, is
sufficient to sever. This interpretation has been declared as being ‘inconsistent with the
requirement of mutuality inherent in both methods’ and has generally been regarded as untenable
and unsupportable on a reading of Pagewood VC statements in William v Hensman which clearly
state the need of a ‘common intention’.

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  Nielson-Jones v Fedden; the case was cited with approval by Sir John Pennycuick and Browne LJ in
Burgess. It was held there in that any course of dealing between parties must be mutually
suggestive that they wish to hold their shares as tenants in common. The unilateral declaration of
the husband that he wished to sever the joint tenancy thereby failed to achieve severance as it was
not unequivocal enough for a s36 notice and was not a common or mutual understanding with his
wife who was a joint tenant with him to constitute a ‘course of dealing’ required by the law.
 Gore and Snell v Carpenter; Judge Blackett referred to Sir John Pennycuicks statements in Burgess
and reiterated his words that ‘a declaration by one party to another or indeed a verbal notice by
one party to the other clearly cannot operate as severance’.
 McDowell v Hirschfield Lipson &Rumney; also approved Sir John Pennycuicks statements in
Burgess.
A mutual course of conduct or course of dealing which evinces an intention that joint tenants
considerthemselves tenants in common may also be found in other acts between the co-owners.
 Gore & Snell v Carpenter; where the joint tenants have held long-term assumptions about their
ownership of land, a course of dealing may be found "where over the years the parties have dealt with
their interests in the property on the footing that they have interests in common and not as joint".
 Greenfield v Greenfield; physical division of land may indicate mutual conduct between the parties that the
joint tenancy is severed. The court however was firm in their opinion that physical division of land is not
necessarily inconsistent with the finding of a joint tenancy.
 Re Woolnough ; the execution of mutual wills by all the joint tenants is sufficient indication of a
course of dealing whereby each considers themselves a tenant in common and therefore free to
dispose of their share thru a will. It will no doubt be an effective method of severance.
 Barton v Morris ; where the joint tenants use the property for a business partnership, it may suggest
a course of dealing indicative of a severance of the joint tenancy.

3) Severance by a court order, the court issues an order severing the joint tenancy.

4) Severance by homicide; of one joint tenant by the other displaces the operation of the right of
survivorship, thus severing the joint tenancy.

5) Severance by merger of interests; where a joint tenant buys the share of the other remaining joint
tenants.