Matrimonial home — House in names of husband and wife as beneficial joint tenants — Breakdown of marriage — Wife applying for ancillary relief — Property adjustment order — Draft consent order — Husband died before final order agreed — Whether joint tenancy severed at date of husband’s death — High Court holding that joint tenancy had been severed — Accordingly half net proceeds of sale belonged to husband’s estate
A property at 213 Hallbridge Road, South Woodham Ferrers, Chelmsford, Essex, was registered in the joint names of a husband and wife. They separated in 1984 and the marriage was dissolved in 1988. The wife applied for ancillary relief and following negotiations, a draft agreement was prepared in December 1989 to the effect that the property was to be sold forthwith and the sale proceeds divided, thus severing the joint tenancy. The husband died before that agreement was finalised. The question arose whether the wife was entitled to the whole beneficial interest in the property by surviving the deceased or whether the joint tenancy had been severed prior to his death so that a half-share in equity belonged to the husband’s estate.
Held The joint tenancy was severed by the agreement made in December 1989.
1. An act of any joint tenant operating upon his own share might create a severance as to that share: see Williams v Hensman (1861) 1 J&H 546.
2. The right of each joint tenant was a right by survivorship only in the event of no severance having taken place of the share which was claimed. Each one was at liberty to dispose of his own interest in such manner as to sever it from the joint fund — losing at the same time his own right of survivorship.
3. If a dealing as tenants in common were found as a fact, it was not material whether that was done in ignorance of the existence of a joint tenancy. A joint tenancy was a right which any one of the joint tenants might determine when he pleased. If all continued to deal on the footing that their interests were severed then it would be inequitable to treat it as a joint tenancy. That was not confined to cases where, although there had been no express agreement to sever, an agreement was to be inferred. It also included cases where what was to be inferred was that the parties had mutually treated their interests as a tenancy in common in ignorance that they were really joint tenants.
4. What made it inequitable not to treat the joint tenancy as severed was that it would be unfair for the other joint tenants to take the interest of a joint tenant by survivorship. That joint tenant might have severed unilaterally at any time if they had not already treated the tenancy in effect as severed.
5. It mattered not whether the agreement which included or implied an agreement for severance was specifically enforceable. The significance of an agreement was not that it bound the parties, but that it served as an indication of a common intention to sever, something which it was indisputably within their power to do: see Burgess v Rawnsley [1975] Ch 429.
6. The correct inference from the affidavit evidence in the present case on the balance of probabilities was that there was an agreement for severance in December 1989. That agreement was never enforced as such and the result was that the property was held by the wife, for herself, and the deceased’s estate in equal shares.
John Robson (instructed by Palmers, of South Woodham Ferrers) appeared for the executors; Ann Brownlow (instructed by Colemans, of Chelmsford) appeared for the wife.
