Agreement in principle not enough to sever

An agreement in principle to sever a joint tenancy is not enough to amount to a mutual agreement or a course of conduct.

In Gore and Snell v Carpenter ((1990) 60 P & CR 456) a husband and wife owned two houses as joint tenants. They agreed in principle that they would have one of the houses each (and end the joint tenancies). A draft separation agreement included a clause severing one of the joint tenancies but this agreement was part of a package of proposals. Final agreement on the proposals had not been reached by the time of the husband’s death. Judge Blackett-Ord held that there had been no severance. It is a question of intention in each case (at 464). In this case, the parties had come close to agreeing but had not agreed. There was no course of conduct. This requires both parties to commit themselves to a severance but the wife never had.

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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.