To sever or not to sever? That is the question

Background

Angela and John Dunbabin had been married for more than 60 years.  They had four sons, Michael, Timothy, Simon and Adam.  In 1983 they bought a property known as 29 Beverley Place, Springfield, Milton Keynes.  At the time of purchase the property was not then in an area of compulsory land registration and so it was unregistered land and remained as such until 2021.

The property was conveyed to Angela and John jointly, although the conveyance was silent as to their respective beneficial interests.  However, it did contain a declaration by them that either of them could give a valid receipt for capital money arising on a disposition of the land.  It is settled law that this could not be treated as an express declaration of a beneficial joint tenancy but the (rebuttable) presumption is that equity follows the law and that therefore the joint legal owners hold on trust for themselves as joint tenants in equity.  There was no suggestion within the proceedings that the presumption should not apply.

In 2003 Angela and John executed so-called “mirror” wills, that is wills that were in the same terms but without an intention to engage a mutual wills obligation.  The wills were prepared by Terry Oldfield, a professional will writer.  Broadly speaking, the wills provided for (1) the appointment of the surviving spouse as executor with Michael and Simon being executors in default, (2) legacies of £1,000.00 each to the five named grandchildren, (3) the trust of the family home for the surviving spouse for life with the remainder upon trust for such of the 4 sons as should survive the deceased, and (4) the residue to the surviving spouse or in the event of the second death as an accretion to the remainder of the property trust.

In 2008 they executed fresh mirror wills in slightly differing terms.  The provisions as regards the appointment of executors was the same and there was a property trust similar to that in the 2003 wills, albeit the trust property was described in different terms and the residue was to be held on trust for the surviving spouse and in default such of the four sons as should survive the deceased.  The gifts to the grandchildren were omitted.  In this respect, Angela and John also signed an explanatory letter addressed to their children explaining that they did not wish to keep going back to have their wills remade every time there was a new grandchild or great grandchild.

Both Angela and John spent their last years in a care home rather than living at the property.  Angela died on 27 December 2016.  No grant of probate was obtained in relation to her estate.  On 24 November 2019 John then made a new will.  Again this was prepared by Terry Oldfield.  The will appointed Simon as sole executor and gave 75% of his residuary estate to him, the rest being shared amongst the other sons.  John died on 4 April 2020.  A grant of probate was obtained by Simon in relation to his estate on 2 May 2020.

Following Angela’s estate the whole legal estate in relation to the property belonged to John by rights of survivorship.  Upon his death, the legal estate passed to Simon as his executor and he arranged to register the title of the property into his sole name on 6 January 2021.  In March 2021 the property was sold at a sale price of £500,000.00.

One of John’s sons, Michael had pre-deceased him.  Michael had died on 24 November 2019.  He left behind his wife, Victoria and their son, Sam who were both named executors in Michael’s will and duly obtained a grant of probate in relation to his estate.

The proceedings

Timothy, Adam, Victoria and Sam (“the claimants”) issued proceedings in June 2021 against Simon.  The claim was supported by witness statements from Adam and also Terry Oldfield.  Simon filed a witness statement in opposition to the claim.

The main issue in the proceedings related to the beneficial interests of Angela and John in the property.  The claimants say that in making their 2003 wills Angela and John severed the joint tenancy which is presumed to have arisen on the conveyance to them in 1983 so that thereafter they held the legal title upon trust for themselves as joint tenants in common in equal shares.  If correct, the result would be that when Angela died her half share in the property would have passed according to the terms of her will rather than automatically to John by rights of survivorship.  As such, her half share would be divided equally between the four sons (including the estate of Michael).

Simon, on the other hand, said that there was no severance of the joint tenancy and so the entire beneficial interest in the property passed to John on Angela’s death and 75% of that together with the residuary of John’s estate to him following John’s death in accordance with the terms of his will executed in November 2019.

As the claimants were asserting that the tenancy had been severed, they bore the burden of proof, on the balance of probabilities, in relation to the proceedings.

The law of severance

Since 1925 a joint tenancy may only be severed in equity in one of the following ways:

• In the same manner as a joint tenancy of personal estate could have been severed prior to 1926, i.e. (1) an any of any one of the persons interested operating upon his own share may create a severance as to that share, (2) by mutual agreement or (3) by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common;
• By notice in writing to the other joint tenant(s);
• By the act of some third party;
• By the acquisition of another estate in the land; and
• By unlawful killing.

The grounds for the claim

The claimants relied upon three of the above methods in support of their claim.

Firstly, they alleged that Angela and John had signed notices of severance.  They relied on Mr Oldfield’s evidence that (1) he recalled a conversation with them when he recommended they should sever the joint tenancy and that although he had not retained a copy of the notices he had found a note on his record card for Angela and John that a notice of severance had been signed and (2) if they had not accepted his advice he would not have included the property trust clause in either the 2003 or 2008 wills. 

In opposition, Simon asserted that no severance document had been found following his father’s death, that Mr Oldfield had told him in May 2020 that nothing had been registered and so there could not have been a severance and his father had told him after his mother’s death that they had not signed any severance.

Secondly, they alleged that Angela and John agreed to sever the joint tenancy, whether they signed a notice or not.  They relied on a number of indications including the use of “mirror” wills by their parents, Mr Oldfield’s evidence that they had agreed to do so, the terms of the 2003 and 2008 wills and John’s 2019 will which sought to give away “my share” in the property and the terms of the explanatory letter which they had written after execution of the 2008 wills referring to “half of the house”.

In opposition, Simon again sought to rely upon what his father had told him after his mother’s death and further that everything in his parents’ lives was jointly owned and not severally.

Thirdly, the claimants asserted, for the same reason as the second ground, that there had been a course of conduct sufficient to show that the interests of all were mutually treated as constituting a tenancy in common.

Simon opposed the claim on the same grounds as that for ground number 2.

Court’s findings

Considering each of the grounds for the claim, His Honour Judge Matthews concluded as follows.

1. That the physical absence at trial of a notice of severance was not fatal to the claim that severance had been effected by such a notice – it was simply a question of fact as to whether the court was satisfied on the evidence that the notice had in fact been signed.  The notice was just one sheet of paper and could easily have been misfiled or even accidentally destroyed.  He said that Mr Oldfield’s statement that there could not have been a severance because there was nothing registered with the Land Registry was easily explicable by the mistaken assumption that the property concerned was registered land.  As to John’s statement to Simon following his mother’s death, the judge said that he had no doubt that John may well have said something of the kind to Simon but he would have been a very elderly man remembering something that may or may not have happened many years before.  His evidence was hearsay and could not be tested in the same way as the evidence of life witnesses. Taking all the above matters into consideration, the judge said he was in no doubt that, on the balance of probabilities, Angela and John did sign a notice of severance which cannot now be found.
2. That the evidence in the case was more than sufficient to satisfy him that, on the balance of probabilities, Angela and John did agree at the time of making their 2003 wills to sever the beneficial joint tenancy to their house.
3. That this was a case where either there was an intention to sever or there was not.  There was no reason here to express an agreement in principle but to hold back from implementation of it.  The evidence satisfied him that there was a course of conduct (in particular, the making of the “mirror” wills) which showed that each party made clear to the other that they desired their property should no longer be held jointly but be held in common.

Judgment

In all the circumstances, the judge found that the beneficial joint tenancy of the property was severed before the death of Angela in 2016 and that thereafter the property had been held by them on trust for themselves as beneficial tenants in common.  As a result, on Angela’s death her half share of the property passed under her will.  During John’s lifetime he had a life interest in that half share but on his death it passed to their four sons in equal shares.

Conclusion

This claim highlights as with many other cases how important it is to treat all documents relating to your estate with the utmost care and ensure that they are kept in a safe and secure place so that they cannot be accidentally destroyed or thrown out and to assist your executors with being able to administer your estate in a succinct manner and in accordance with your wishes upon your death.