Joint tenancy — Notice of severance — Service — Law of Property Act 1925 section 196 — Notice served by post and intercepted by wife before husband received it — Whether notice served — Whether joint tenancy severed
In 1987 Mr and
Mrs J acquired a freehold property as beneficial joint tenants and occupied it
as their matrimonial home. By 1994 Mrs J, who had been diagnosed as terminally
ill with cancer, was contemplating divorce proceedings. In order to avoid the
doctrine of survivorship operating on her death, Mrs J decided to sever the
joint tenancy of the property. In June 1995 Mrs J’s solicitors served a divorce
petition on Mr J. On August 4 1995 a notice of severance was prepared and sent
by ordinary first-class post, addressed to Mr J at the property. On the weekend
of August 5 and 6, Mr J suffered a serious heart attack and was admitted to
hospital; he died on August 15. By August 7 the notice was delivered at the
property; it was removed and destroyed by Mrs J, before Mr J had notice of it,
because she had changed her mind about severing the joint tenancy. In January
1996 Mrs J died. The plaintiff executors of Mr J issued proceedings against the
executors of Mrs J seeking, inter alia, a declaration that they were
entitled to a one-half beneficial share of the property or the proceeds of its
sale; they also sought the determination of the court as to whether the posting
and subsequent delivery at the property of the notice was effective to sever
the beneficial joint tenancy.
the declaration they sought. The natural meaning of section 196(3) of the Law
of Property Act 1925 is that if a notice can be shown to have been left at the
last known abode or place of business of the addressee, then that constitutes
good service, even if the addressee does not actually receive it. Having regard
to section 36(2), once the sender has served the requisite notice the deed is
done and cannot be undone. Once the procedure has been set in train and the relevant
notice has been served, it is not open to the giver of the notice to withdraw
it.
The following
cases are referred to in this report.
88
Berkeley Road, NW9, In re [1971] Ch 648; [1971] 2
WLR 307; [1971] 1 All ER 254
Holwell
Securities Ltd v Hughes [1974] 1 WLR 155;
[1974] 1 All ER 161, CA
Newborough
(Lord) v Jones [1975] Ch 90; [1974] 3 WLR
52; [1974] 3 All ER 17, CA
Sharpley v Manby [1942] 1 KB 217; [1942] 1 All ER 66; 166 LT 44
Van
Haarlam v Kasner Charitable Trust (1992) 64
P&CR 214; [1992] 2 EGLR 59; [1992] 36 EG 135
Wandsworth
London Borough Council v Atwell (1995) 27
HLR 536; 94 LGR 419; [1996] 1 EGLR 57; [1996] 01 EG 100, CA
These were
summary proceedings brought by the plaintiff executors seeking a declaration
that they were entitled to a one-half beneficial interest in a freehold
property or the proceeds of its sale; the plaintiffs also sought the
determination of the issue as to whether a severance notice had been duly
served on the addressee of the notice.
Michael
Waterworth (instructed by Willett & Co, of Bury St Edmunds) appeared for
the plaintiffs; John Waters (instructed by Graham & Oldham, of Ipswich)
represented the defendants.
Giving
judgment, NEUBERGER J
said: This is the hearing of an appeal by the plaintiffs against an order of
Master Dyson. It raises an intriguing point relating to service of notices,
although it arises out of rather sad facts.
By a
conveyance of March 23 1987, Bryan Johnson and his wife, Sheila Johnson,
purchased the freehold of 16 York Road, Martlesham Heath, Ipswich (the
property), in fee simple as beneficial joint tenants. They occupied the
property as their matrimonial home.
It appears
that, by 1994, Mrs Johnson was considering whether or not to begin divorce
proceedings. Possibly triggered by the fact that she had been diagnosed as
terminally ill with cancer, Mrs Johnson consulted solicitors at the end of June
1994, and one of the matters she discussed with them was severing the joint
tenancy of the property. In the absence of such severance, the doctrine of survivorship
would have applied, so that, on Mrs Johnson’s death, the whole legal and
beneficial ownership in the property would have vested in Mr Johnson: see
subsection (1) of section 36 of the Law of Property Act 1925 (section 36).
However, the proviso to subsection (2) of section 36 provides:
where 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 …, and thereupon the land shall be held in
trust on terms which would have been requisite for giving effect to the
beneficial interests if there had been an actual severance.
The effect of
the service of a notice of severance by Mrs Johnson on Mr Johnson would,
therefore, have been that, on the death of Mrs Johnson, the legal title to the
property would have vested in Mr Johnson, but he would have held the beneficial
interest on trust in equal shares for himself and on the trusts of the will of
Mrs Johnson.
For some time
thereafter, Mrs Johnson took no further steps in relation either to the
severance of the joint tenancy or to the divorce. However, in June 1995, her
solicitors served a divorce petition on Mr Johnson, to which he filed an
answer. Meanwhile, on July 31 1995, Mrs Johnson instructed her solicitors to
prepare and serve on Mr Johnson a notice of severance of the joint tenancy of
the property. On August 3 1995, the solicitors prepared a notice of severance
(the notice), which Mrs Johnson signed on the same day. The notice was then
sent by ordinary first-class post to Mr Johnson, under cover of a letter dated
August 4, in an envelope addressed to him at the property, which still remained
the matrimonial home.
During the
weekend of August 5/6 1995 Mr Johnson suffered a serious heart attack, and he
was admitted to hospital on August 7. Meanwhile, either on August 5 or August
7, the postman put the notice through the letter box at the property. Mrs
Johnson picked it up and destroyed it. This was presumably because she had come
to the conclusion that, in view of his serious heart attack, Mr Johnson was
likely to predecease her, and that it would therefore be she, rather than he,
who would benefit if the tenancy were not severed. Mr Johnson died in hospital
on August 15 1995. Thereafter, nothing of relevance happened until Mrs Johnson
died on January 6 1996.
On November 5
1997 the plaintiffs, who are the executors of Mr Johnson, issued these
proceedings against the defendants, who are the executors of Mrs Johnson. The
writ and statement of claim seek two substantial heads of relief, of which only
the first is relevant. It is a declaration that the plaintiffs are entitled to
a one-half beneficial share of the property or the proceeds of sale thereof. On
January 29 1998 the plaintiffs issued a summons for the determination of the
issue as to whether the ‘posting to and subsequent delivery at the property’ of
the notice ‘was effective to sever the beneficial joint tenancy’. In the event
of it being determined that severance was effected, then the plaintiffs
effectively seek the declaration I have set out above. The summons came before
Master Dyson, who, perhaps understandably, thought the case was unsuitable for
summary judgment.
As these are
summary proceedings, it is not open to me to make any findings of fact, except,
perhaps, where I am satisfied that no further evidence could be available (a
point which is potentially relevant in the present case because the two main
protagonists are dead). Mr Johnson spent the night of August 4/5 with his son
(by an earlier marriage), who, as I understand it, has said that his father
visited the property on the morning of August 5 and saw the notice. However,
that is denied by the
the assumption that it is not correct. Further, the defendants contend, and the
plaintiffs are content that I should assume for the purpose of this summons,
that the notice was not served until August 7, and that, by that time, Mrs
Johnson had changed her mind about wanting to sever the joint tenancy, because
she appreciated that her husband was likely to predecease her.
In the light
of the provisions of section 36(2) of the 1925 Act, the question as to whether
or not the joint tenancy was severed depends on whether Mrs Johnson ‘gave’ the
notice to Mr Johnson. As a matter of ordinary language, at least on the
assumptions I am currently making, the notice was not ‘given’ to Mr Johnson,
because he never received it. In order to justify the contention that the
notice was in fact given to Mr Johnson, the plaintiffs rely on section 196 of
the Law of Property Act 1925 (section 196). Subsection (1) stipulates that any
notice given under the 1925 Act ‘shall be in writing’; subsection (2) deals
with service of notices on a lessee or mortgagor. Section 196(3) and (4) are in
the following terms:
(3) Any
notice … shall be sufficiently served if it is left at the last-known place of
abode or business in the United Kingdom of the … person to be served, or, in
case of a notice required or authorised to be served on a lessee or mortgagor,
is affixed or left for him on the land or any house or building comprised in the
lease or mortgage …
(4) Any
notice required or authorised by this Act to be served shall also be
sufficiently served, if it is sent by post in a registered letter addressed to
the … person to be served, by name, at the aforesaid place of abode or business
… and if that letter is not returned through the post-office undelivered, and
that service shall be deemed to be made at the time at which the registered
letter would in the ordinary course be delivered.
Section 196(6)
excludes the operation of the section ‘to notices served in proceedings in the
court’.
The
plaintiffs’ case relies on section 196(3) and is as follows. First, the
last-known place of abode of Mr Johnson, until his death on August 15 1995, was
his actual abode, namely the property. Second, the notice was left at the
property, because it was posted through the letter box and remained on the mat,
albeit that Mrs Johnson shortly thereafter removed and destroyed it. Third, in
those circumstances, the requirements of section 196(3) are satisfied, and the
notice was duly served. In this connection, it is right to point out that there
is no distinction between ‘serving’ in section 196 and ‘giving’ in section
36(2): see Re 88 Berkeley Road NW9 [1971] Ch 648 at pp652E–653A (per
Plowman J) and Holwell Securities Ltd v Hughes [1974] 1 WLR 155
at p158F (per Russell LJ) and p161H (per Lawton LJ).
On behalf of
the defendants, it is contended, none the less, that the notice was not validly
‘served’ or ‘given’, and that therefore the joint tenancy was never severed. As
the case developed, a number of arguments were put forward on behalf of the
defendants.
First, it was
contended that, reading section 196(3) and (4) together, it is not open to the
plaintiffs to rely upon section 196(3) if the notice was sent by post, unless
it was sent by registered post (which includes the alternative of sending by
recorded delivery in the light of the Recorded Delivery Service Act 1962). I do
not accept that argument. As a matter of ordinary language, section 196(3)
provides that service of a notice ‘at the last-known place of abode or
business’ of the addressee is good service, and there is no suggestion that it
matters how that service is effected, ie whether it is by the giver of the
notice, his agent, courier service, ordinary post, recorded delivery or
registered post or some other method. Provided that it can be established that,
irrespective of the identity of the person who delivered the notice to a
particular address, it was delivered to that address, then the notice has been
validly served at that address, provided that it is the addressee’s last known
abode or place of business.
Section 196(4)
is a separate and additional provision. It provides, in the first place, that
if a notice is served by registered post or recorded delivery, then, even if it
can be shown not actually to have been delivered at the relevant premises, the
notice will none the less be deemed to have been served at the premises, unless
returned undelivered. Second, it provides that (assuming that it is not
returned undelivered) a notice sent by registered post or recorded delivery is
deemed to have been served at the time when it would, in the ordinary course of
post, have been delivered. The use of the word ‘also’ near the beginning of
section 196(4) appears to me to emphasise that, far from being intended to be a
provision cutting down the generality of section 196(3), it is intended to be
an additional provision.
Although
concerned with a different statutory provision, namely section 53 of the Agricultural
Holdings Act 1923, it appears to me that the reasoning of MacKinnon LJ (with
whom Goddard LJ and Asquith J agreed) in Sharpley v Manby 166 LT
44 is difficult, if not impossible, to reconcile with this first argument of
the defendants.
Second, it is said
on behalf of the defendants that, as a matter of general principle, it is not
enough for the plaintiffs to show that the notice was left at the property by
the postman if the defendants can establish that Mr Johnson never actually
received it. In other words, the defendants’ contention is that section 196(3)
raises a presumption, but not an irrebuttable presumption, that serving an
appropriately addressed notice on the appropriate premises results in service
of the relevant notice.
On the face of
it, comparison between section 196(3) and section 196(4) could be said to give
some support to this argument, in that the latter subsection could be said to
deem service to have occurred irrevocably, whereas the former subsection does
not do so. However, in my judgment, that is not a good point. Section 196(4)
deems service on the premises to have taken place if the requirements of
sending by registered post and non-return by the Post Office are satisfied,
even if it can be shown that physical service did not in fact take place on
those premises. Section 196(3), on the other hand, requires it to be
established that physical service did in fact take place on the appropriate
premises before any deemed service can arise.
It appears to
me that the natural meaning of section 196(3) is that if a notice can be shown
to have been left at the last-known abode or place of business of the
addressee, then that constitutes good service, even if the addressee does not
actually receive it. Although frequently cited as conclusive authority on the
point, there is room for argument that Re 88 Berkeley Road NW9 does not
actually establish this proposition. Although the passage in the judgment of
Plowman J at pp652E–653A appears to be in point, it was actually concerned with
section 196(4), because the notice in that case was served by recorded delivery
(see p651B) and, therefore, the case is at least arguably distinguishable. It
is fair to say, however, that the decision appears to have been treated by the
Court of Appeal as authority for the proposition that a notice served in
accordance with section 196(3) was validly served, even if it could be shown
never to have come to the attention of the addressee: see Wandsworth London
Borough Council v Atwell [1996] 1 EGLR 57 at p58L. Further, it is
hard to see why the reasoning of Plowman J should not apply to section 196(3)
as much as to section 196(4).
Quite apart
from this, it appears to me that it is not sensibly possible for the defendants
to distinguish the decision of the Court of Appeal in Lord Newborough v Jones
[1975] Ch 90 on this point. In that case, the Court of Appeal held that a
notice pushed under the door personally by the landlord was validly served even
if it did not come to the addressee’s attention (eg because it went under the
linoleum or was eaten by a dog). That case was concerned with section 92(1) of
the Agricultural Holdings Act 1948, which provided that any notice was validly
served under that Act ‘if it is delivered to [the relevant person] or left at
his proper address, or sent to him by post in a registered letter’. Russell LJ
said at p94E–F:
if served by
leaving at the proper address of the person to be served, …[the notice] must be
left there in a proper way; that is to say, in manner which a reasonable
person, minded to bring the document to the attention of the person to whom the
notice is addressed, would adopt. This is, to my mind, the only qualification
(or gloss, if you please) proper to be placed on the express language of the
statutory provision.
Third, it was
contended on behalf of the defendants that the fact that Mrs Johnson changed
her mind and no longer ‘desire[d] to sever the joint tenancy’ by the time that
the notice might otherwise have been said to have been ‘given’ (ie by the time
that the notice arrived at the
argument is based on the language of section 36(2). Assuming that the notice
was validly ‘given’ pursuant to section 196(3), the giving of the notice only
occurred when it was actually delivered to the property, and at that time Mrs
Johnson no longer ‘desire[d] to sever the joint tenancy’. Accordingly, it is
said that the statutory precondition for the giving of a valid notice was not,
at the date it was given, satisfied, because at that date Mrs Johnson did not
have the necessary ‘desire’.
In my
judgment, this argument is not correct. The function of the relevant part of
section 36(2) is to instruct any joint tenant who desires to sever the joint
tenancy how to do it: he is to give the appropriate notice (or do such other
things as are prescribed by the section). Clear words would be required, in my
judgment, before a provision such as section 36(2) could be construed as
requiring the court to inquire into the state of mind of the sender of the
notice. Once the sender has served the requisite notice the deed is done and
cannot be undone. The position is the same as with a contractual right to
determine a lease, which normally entitles either party, or both parties, to
serve notice to determine the lease if it desires to put an end to the term.
Once the procedure has been set in train and the relevant notice has been
served, it is not open to the giver of the notice to withdraw the notice, and I
have never heard it suggested that a change of mind before the notice is given
would render it ineffective.
I reach this
conclusion based on the proper construction of section 36(2). However, it
appears to me that it is also correct as a matter of policy. If it were
possible for a notice of severance or any other notice to be ineffective
because, between the sender putting it in the post and the addressee receiving
it, the sender changed his mind, it would be inconvenient and potentially
unfair. The addressee would not be able to rely confidently upon a notice after
it had been received, because he might subsequently be faced with the argument
that the sender had changed his mind after sending it and before its receipt.
Further, as I have already mentioned, it is scarcely realistic to think that
the legislature intended that the court could be required to inquire into the
state of mind of the sender of the notice in order to decide whether the notice
was valid.
I am inclined
to think that the position would be different if, before the notice was
‘given’, the sender had informed the addressee that he wished to revoke it. In
such a case, it appears to me that the notice would have been withdrawn before
it had been ‘given’. After all, as is clear from the reasoning at first
instance and in the Court of Appeal in Holwell Securities Ltd [1973] 1
WLR 757 at pp761H–762E, [1974] 1 WLR 155 at pp158B–159A and pp160G–162D, a
notice sent by post is not ‘served’ in accordance with section 196(3) until it
arrives at the premises to which it has been addressed. Accordingly, it seems
to me that while the notice is still in the post it has not been given, and,
until it is given, the sender has, in effect, a locus poenitentiae
whereby he can withdraw the notice, but only provided his withdrawal is communicated
to the addressee before the notice is given to, or served on, the addressee. I
should emphasise, however, that this is no more than a tentative view.
Fourth, it is
said that, in the present case, the notice was not ‘left’ at the property
within the meaning of section 196(3). Assuming that before the notice was
actually posted through the letter box Mrs Johnson had decided that she would
pick it up and destroy it, and bearing in mind that she was the person whose
notice it was, it is said that the notice was never really ‘left’ for Mr
Johnson at the property. In my judgment, that argument is wrong as a matter of
principle and would be inconvenient to apply in practice.
So far as the
principle is concerned, it seems to me that, by putting the notice in the post,
Mrs Johnson effectively left it to the Post Office to serve the notice on her
behalf. One therefore has to ask oneself whether the person who was, in effect,
appointed by Mrs Johnson to serve the notice acted in accordance with the test
propounded by Russell LJ in Newborough. In my judgment, by posting the envelope
containing the notice, and addressed to Mr Johnson at the property, through the
letter box of the property, the postman served the notice in accordance with
that test. I do not think that it is right to test the matter by reference to
what Mrs Johnson thought or intended, because she left it to the Post Office to
serve the notice. Accordingly, subject to any other arguments, once the notice
was posted through the letter box, it had been ‘served’ in accordance with
section 196(3), and therefore ‘given’ in accordance with section 36(2), and, as
I have mentioned, such a notice cannot be ‘un-served’ or ‘un-given’.
So far as
convenience is concerned, I consider that, if section 196(3) is satisfied, once
it is shown that the relevant document was bona fide delivered to the
last-known place of abode or business of the addressee, then, although it might
lead to an unfair result in an exceptional case, the law is at least simple and
clear. On the other hand, if the court starts implying exceptions into the
clear and simple statutory procedure, confusion and uncertainty could result.
Thus, if by picking up the notice after it was posted through the front door of
the property Mrs Johnson might have prevented the notice being ‘served’,
problems could arise. Would there be a maximum time within which Mrs Johnson
would have to pick up the notice before it would be held to be validly served?
Would it make any difference if Mr Johnson had seen the envelope containing the
notice on the mat? What if Mrs Johnson had picked up the notice and had kept it
but not destroyed it? What if she had picked up the notice intending to destroy
it but had changed her mind? What if she had picked up the notice and tried to
destroy it, but Mr Johnson had seen her doing it, or had seen and read the
imperfectly burnt notice?
The defendants
also rely on the unusual feature of this case; that the person who physically
got the notice and, indeed, who destroyed it, was the very person who sent it,
namely Mrs Johnson. It can be said to be one thing for a sender to be entitled
to assume that he has given a notice to the addressee if he serves it at the
property, even if a third party picked up the notice and filed it away or
destroyed it: as between the sender and the addressee, one can see good policy
reasons as to why such a risk, like the possibility of the dog eating the
notice, should be that of the addressee and not that of the sender. However,
there is obviously a powerful argument for saying that the position should
surely be different where it is the sender herself who has picked up the notice
and filed it away or destroyed it.
It is not so
much that the facts of this case cause me concern: if the defendants, as the
executors of Mrs Johnson, are effectively ‘landed’ with the consequences of Mrs
Johnson having served the notice, that does not seem to me to be a particularly
unfair result, particularly bearing in mind the extent to which equity tends to
lean against joint tenancies: see the discussion in Megarry & Wade The
Law of Real Property, 5th ed at p427). However, I am concerned that, if it
could be said that the notice in the present case was validly served, unfair
advantage could be taken of an addressee by the sender of a notice if the
sender (or his agent) had some means of access to the notice after it was
served in accordance with section 196 but before the addressee actually saw it,
and this resulted in the notice being destroyed or hidden without the addressee
ever becoming aware of it. Accordingly, I was at one time attracted by the
proposition that some sort of qualification should be imposed on the provisions
of section 196, so as to exclude from the concept of valid service a case where
the sender has, in effect, intercepted the notice before it was received by the
addressee, thereby somewhat extending the qualification or gloss laid down by
Russell LJ in Newborough.
On reflection,
however, I think it neither appropriate nor desirable to impose such a further
qualification on the plain words of section 196(3). First, as a matter of
general principle, the court should be slow to imply qualifications into a
statutory provision, particularly when that provision is clear and simple in
its effect and is intended to have practical consequences. Second, it does not
seem to me that a conclusion in favour of the plaintiffs in the present case
should lead to any unfair abuse. In the present case, it is Mr Johnson or, more
accurately, his executors who wish to allege that the notice delivered by Mrs
Johnson was validly served in the light of section 196(3). There is no
potential for abuse in that context. If, however, it was the defendants, the
executors of Mrs Johnson, who were seeking to allege that the notice was
validly served, then it seems to me that it would be open to the plaintiffs, as
executors of Mr Johnson, to contend successfully that, despite the apparent
applicability of section 196(3), valid service had not been effected. In my
judgment, it would not have been open to the defendants
on the instant facts, because it cannot be right for a sender of a notice, who
had intentionally taken steps to ensure that it did not in fact come to the
attention of the addressee, to contend that it was served on him. In other
words, whatever section 196 provides, it could not be relied on by the sender
of a notice as an engine of fraud. The very purpose of serving a notice is to
convey information, with legal consequences, on the addressee: it cannot be
right that the sender of a notice can take positive steps to ensure that the
notice does not come to the attention of the addressee, after it has been
statutorily deemed to have been served and then fall back on the statute to
allege that service has none the less been effected.
In reaching
this conclusion, I have not overlooked the decision of Harman J in Van
Haarlam v Kasner Charitable Trust [1992] 2 EGLR 59, where he held
that a notice sent in accordance with section 196(3) to the addressee’s home
was validly served, even though the sender knew that the addressee was in
prison at the time: see p62B. It seems to me that it is one thing for the
sender of a notice to take advantage of a statutory provision, such as section
196(3), simply to effect service, while merely knowing that the addressee will
not for some reason be at his place of abode or business when the notice is
served there or, indeed, for some time thereafter. Any well advised potential
addressee who is to be absent from the premises can normally make arrangements
for someone to be on the premises, or to visit the premises from time to time,
for the purpose of collecting, and where necessary opening, incoming mail. On
the other hand, it is quite another thing for the sender of a notice to go
through the steps envisaged by section 196 for the purpose of effecting
service, but thereafter to take positive steps calculated to ensure that the
addressee of the notice does not actually receive it. In such a case, it
appears to me that, while there is nothing to prevent the addressee from
relying on section 196, and therefore from contending that service has been effected
in accordance with its terms, the same is not true of a sender of a notice who
(particularly after deemed service) has taken positive steps to thwart its
ultimate purpose, namely to be served on the addressee.
A final
argument raised by the respondents relied on comparing the provisions of
section 196 with the provisions of Ord 65 r 5(1) and Ord 10 r 2(a) and (b) of
the Rules of the Supreme Court 1965 as amended. Even in the absence of section
196(6), it seems to me quite illegitimate to rely upon differently worded
provisions contained in the Rules of the Supreme Court when construing a
statutory provision, particularly one enacted some 40 years before the rules
came into effect.
Accordingly,
because the notice was left at the last-known abode of Mr Johnson by the
postman putting it through the letter box of the property in the normal course
of post on August 7 1995, it was validly served in accordance with section
196(3), and, subject to one point, the fact that the sender, Mrs Johnson,
having decided to do so, picked up the notice and destroyed it when it arrived,
does not alter this conclusion. The one qualification to this conclusion is
that it would not be open to Mrs Johnson to contend against Mr Johnson (unless
he were content to accept it) that the notice was validly served in these
circumstances if, as a result of her implementing the decision, Mrs Johnson
thereby ensured that Mr Johnson never saw, or even knew of, the notice.
In these
circumstances, given that the plaintiffs, as executors of Mr Johnson, wish to
contend that the notice was validly served, and that it is the defendants, as
executors of Mrs Johnson, who deny that service of the notice was effected, I
conclude that the notice was validly served, and that the plaintiffs are
entitled to the declaration they seek.
