Equitable severance by mutual agreement

An oral (unenforceable) agreement whereby joint tenants agree that one of them is to acquire the other’s interest is an equitable severance. It is a mutual agreement and may sometimes (depending on the facts) be a course of conduct. A mutual agreement need not be specifically enforceable. Mutual agreement and course of conduct are separate methods of severing a joint tenancy.

In Burgess v Rawnsley ([1975] Ch 429, CA (Eng)) H and Mrs R bought a property as beneficial joint tenants. Mrs R orally agreed to sell her interest in the house to H but then refused to proceed because she wanted a higher price than that originally agreed. The Court of Appeal held that the joint tenancy had been severed. The oral agreement was a mutual agreement to sever even though the agreement could not be enforced (because neither written nor recorded in writing). Lord Denning MR thought it possible that there had also been a severance by course of conduct but the other members of the Court of Appeal disagreed. Mutual agreement and course of conduct are separate methods of severing a joint tenancy.

Lord Denning MR doubted that Nielson-Jones v Fedden had been correctly decided but the other members of the Court of Appeal did not find it necessary to consider this point.

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