England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL.
Appeal by defendant from order of
His Honour Judge Granville Slack
dated 21st May, 1974; at Edmonton County Court.

		Royal Courts of Justice.
		15th April 1975.

Revised.

THE MASTER OF THE ROLLS: In 1966 there was a Scripture Rally in Trafalgar Square. A widower, Mr. Honick, went to it. He was about 63. A Widow, Mrs. Rawnsley, also went. She was about 60. He went up to her and introduced himself. He was not much to look at. "He looked like a tramp", she said. "He has been picking up fag ends." They got on well enough, however, to exchange addresses. His was 36 Queen's Road, Waltham Cross, Hertfordshire. Hers was 74 Downton Avenue, Streatham Hill, London, S. W. 2. Next day he went to her house with a gift for her. It was a rose wrapped in a newspaper. Afterwards their friendship grew apace. She was sorry for him, she said. She smartened him up with better clothes. She had him to meals. She went to his house: he went to hers. They wrote to one another in terms of endearment. We were not shown the letters, but Counsel described them as love letters.

A few months later Mr. Honick had the opportunity of buying the house where he lived at 36 Queen's Road, Waltham Cross. He had been the tenant of it for some years, but his wife had died and his married daughter had left; so that he was alone there. He talked it over with Mrs. Rawnsley. He told her that the owner was willing to sell the house to him for £800. Mrs. Rawnstey said she would go half shares: she would have the upper flat and he the lower flat.

On 2nd December 1966 a contract was signed by which the owner agreed to sell the house to Mr. Honick. It must be noticed that it was to Mr. Honick alone. The price was £850: Mrs. Rawnsley paid the deposit. A little later Mr. Honick went to his solicitor and instructed him to have the property conveyed into the joint names of himself and Mrs. Rawnsley. The reason for the joint names was, as the Judge found, because Mr. Honick "firmly believed that he was going to marry Mrs. Rawnsley and that it was to be the matrimonial home. "I have no doubt whatever", said the Judge, "that that was his reason for purchasing the house in joint names."

But although he was minded to marry Mrs. Rawnsley, it is clear that she was not minded to marry him. She said - and the Judge accepted her evidence - that he had never mentioned marriage to her and that she never contemplated marriage. She was minded to join in the purchase and pay half so as to have a place of her own, namely, the upstairs flat, whilst he occupied the lower flat.

On 23rd January 1967 the conveyance was executed. It was made to both Mr. Honick and Mrs, Rawnsley (the purchasers) "to hold the same unto the Purchasers in fee simple", together with this express declaration of trust:-

"the Purchasers shall hold the said property upon trust to sell the same with power to postpone the sale thereof and shall hold the net proceeds of sale and other money applicable as capital and the net rents and profits thereof until sale upon trust for themselves as joint tenants."

So the legal estate was held jointly. So were the beneficial interests.

Mr. Honick paid for the property by cheque on his own banking account. But Mrs. Rawnsley gave evidence (which the Judge accepted) that she paid him £425 in four instalments for a half share.

Their expectations were, however, not fulfilled: Mr. Honick's hope of marriage failed; Mrs. Rawnsley would not marry him. Her hopes for the flat upstairs failed: he would not let her have it. He stayed on in the house alone; but they still went to see one another and remained good friends.

In July 1968, being disappointed in his hopes of marriage, Mr. Honick wanted Mrs. Rawnsley to sell him her share in the house. He came to an agreement with her, as he thought, to buy it for £750. He went to his solicitor and said to him "Mrs. Rawnsley is not going to marry me, but she has agreed to take £750 for her interest." He handed the conveyance to the solicitor for him to draw up the necessary document. The solicitor thereupon wrote to Mrs. Rawnsley on 1st July 1968 this letter:

"Dear Mrs. Rawnsley. re 36 Queens Road, Waltham Cross.

Mr. Honick called to see us today stating that you are agreeable to convey to him your interest in this property for the sum of £750.0.0. Will you please confirm that this is so and we will then finalise the matter and ask you to call upon us to collect those moneys and to sign the final Deed."

Next day, however, Mrs. Rawnsley went to the solicitors and said she was not willing to sell. She was not satisfied with £750 but wanted £1,000. Mr. Honick told his daughter that Mrs. Rawnsley was going "to ask a thousand which he was not going to pay."

A few days later Mr. Honick went to the solicitor and told him to leave things as they were. He asked for the conveyance back and got it. From that time onwards things went on as before, with Mr Honiok in his house alone, and she in hers; but both visited one another, being quite friendly. He paid all the rates and outgoings of his house. This went on for three more years until he died on 26th October 1971.

Now Mr. Honick's daughter has taken out letters of administration to his estate. She claims that as administratrix she is entitled to a half share in the house. But Mrs. Rawnsley claims that it belongs to her for her own benefit. It has been sold for some £5,000. So that there is a considerable sum of money in dispute.

Now there is no doubt that the legal estate in the house is vested in Mrs. Rawnsley alone. Since 1925 a legal joint tenancy cannot be severed. So on Mr. Honick's death, the legal estate survived to Mrs. Rawnsley alone. The question is who is entitled to the beneficial interest in the house? The Judge held that the legal estate is held by Mrs. Rawnsley on trust for herself and Mr. Honick's estate in equal shares. But Mrs. Rawnsley claims that she is entitled to the whole beneficial interest.

There are two points in the case. Was there a resulting trust? If both parties had contemplated marriage - and the house was taken in joint names with that object - then when that object failed, there would be a resulting trust for them according to their respective contributions to the purchase price. That is half and half. See Essery v. Cowland (1884) 26 Ch D 191, and Ulrich v. Ulrich (1968) 1 W.L.R. 185. Such would be the position if both parties had contemplated marriage. But what is the position when one contemplates marriage and the other does not? That is the position here. Mr. Honick contemplated marriage and that the house should be the matrimonial home. His contemplation failed. Mrs. Rawnsley did not contemplate marriage. She contemplated that they would live in it as separate flats, she upstairs and he downstairs. Her contemplation also failed. She said in evidence:

"I mentioned the upper flat but he was a man of his own laws. He made it clear that I wasn't going into that house, and that possession was 9/10ths of the law."

It is plain that the object of each failed. Each has a different object in view, but each failed. What then is the position? I think it is the same as if the common object of both had failed. In my opinion there is a resulting trust in favour of the two of them, according to their respective contributions. That is half and half. But I would not like to put my decision on this ground alone. So I proceed to consider the other ground.

Secondly, was there a severance of the beneficial joint tenancy? The Judge said:

"I hold that there has been a severance of the joint tenancy brought about by the conduct of the defendant in asking £750 for her share which was agreed to."

In making that statement the Judge made a little slip. She did not ask £750. But it was a slip of no importance. The important finding is that there was an agreement that she would sell her share to him for £750. Almost immediately afterwards she went back upon it. Is that conduct sufficient to effect a severance?

Mr. Levy submitted that it was not. He relied on the recent decision of Mr. Justice Walton in Nielson Jones v. Fedden (1974) 3 W.L.R. 583, given subsequently to the judgment of the Judge here. Mr. Justice Walton held that no conduct is sufficient to sever a joint tenancy unless it is irrevocable. Mr. Levy said that in the present case the agreement was not in writing. It could not be enforced by specific performance. It was revocable and was in fact revoked by Mrs. Rawnsley when she went back on it. So there was, he submitted, no severance.

Mr. Justice Walton founded himself on the decision of Mr. Justice Stirling in Re Wilks (1891) 3 Ch 59. He criticized Hawkesley v. May (1956) 1 Q.B. 304, and In re Draper's Conveyance (1969) 1 Ch. 486, and said they were clearly contrary to the existing well established law. He went back to Coke upon Littleton and to Blackstone's Commentaries. Those old writers were dealing with legal joint tenancies. Blackstone said (II p. 180).

"The properties of a joint estate are derived from its unity, which is four-fold: the unity of interest, the unity of title, the unity of time and the unity of possession .... an estate in joint tenancy may be severed and destroyed by destroying any of its constituent unities.";

and he gives instances of how this may be done. Now that is all very well when you are considering how a legal joint tenancy can be severed. But it is of no application today when there can be no severance of a legal joint tenancy; and you are only considering how a beneficial joint tenancy can be severed. The thing to remember today is that equity leans against joint tenants and favours tenancies in common.

Nowadays everyone starts with the judgment of Sir William Page Wood, Vice Chancellor (afterwards Lord Hatherley) in Williams v. Hensman (1861) 1 J. & H. 546 at page 557, where he said:

"A joint tenancy may be severed in three ways:- in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share.... Secondly, a joint tenancy may be severed by mutual agreement. And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the contest have been effected, as happened in the oases of Wilson v. Bell (1843) 5 Irish Equity Reports 501 and Jackson v. Jackson (1804) 9 Vesey Junior's Reports 591."

In that passage Lord Hatherley distinguished between severance "by mutual agreement" and severance by a "course of dealing". That shows that a "course of dealing" need not amount to an agreement, expressed or implied, for severance. It is sufficient if there is a course of dealing in which one party makes clear to the other that he desires that their shares should no longer be held jointly but be held in common. I emphasise that it must be made clear to the other party. That is implicit in the sentence in which Lord Hatherley says: -

"it will not - .. suffice to rely on an intention, with respect to the particular share, declared only behind the backs of the other persons interested."

Similarly it is sufficient if both parties enter on a course of dealing which evinces an intention by both of them that their shares shall henceforth be held in common and not jointly. As appears from the two oases to which Lord Hatherley referred of Wilson v. Bell and Jackson v. Jackson.

I come now to the question of notice: Suppose that one party gives a notice in writing to the other saying that he desires to sever the joint tenancy. Is that sufficient to effect a severance? I think it is. It was certainly the view of Sir Benjamin Cherry when he drafted section 36(2) of the Law of Property Act 1925.. It says in relation to rea estates:

"Where a legal estate(not being settled land) 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 or do such other acts or things as would, in the case of personal estate, have been effectual to sever the tenancy in equity and thereupon under the trusts for sale affecting the land, the net proceeds of sale and the net rents and profits until sale, shall be held upon the trusts which would have been requisite for giving effect to the beneficial interests if there had been an actual severance."

I have underlined the important words. The word "other" is most illuminating. It shows quite plainly that, in the case of personal estate one of the things which is effective in equity to sever a joint tenancy is "a notice in writing" of a desire to sever. So also in regard to real estate.

Taking this view, I find myself in agreement with the decision of Mr. Justice Havers in Hawkesley v. May (1956) 1 Q.B. at pages 313-4, and of Mr. Justice Plowman in Re Draper's Conveyance (1969) 1 Ch. 486. I cannot agree with Mr. Justice Walton that those cases were wrongly decided. It would be absurd that there should be a difference between real estate and personal estate in this respect. Suppose real estate is held on a joint tenancy on a trust for sale and is sold and converted into personal property. Before sale, it is severable by notice in writing. It would be ridiculous if it could not be severed afterwards in like manner. I look upon section 36(2) as declaratory of the law as to severance by notice and not as a new provision confined to real estate. A joint tenancy in personal estate can be severed by notice just as a joint tenancy in real estate.

It remains to consider the decision in Nielson Jones v. Feddon (1974) 3 W.L.R. 583. In my view it was not correctly decided. The husband and wife entered upon a course of dealing sufficient to sever the joint tenancy. They entered into negotiations that the property should be sold. Each received £200 out of the deposit paid by the purchaser. That was sufficient Furthermore there was disclosed in correspondence a declaration by the husband that he wished to sever the joint tenancy: and this was made clear by the wife. That too was sufficient.

I doubt whether Re Wilks (1891) 3 Ch 59 can be supported. A young man who had just become 21 applied to the Court to have one third of a joint fund paid out to him. He died just before the application was heard. Mr. Justice Stirling held that, if he had died just after, there would have been a severance: but, as he died just before, there was not. Ironically enough too, the delay was not on his side. It was the delay of the Court. Nowadays I think it should have been decided differently. The application was a clear declaration of his intention to sever. It was made clear to all concerned. There was enough to effect a severance.

It remains to apply these principles to the present case. I think there was evidence that Mr. Honick and Mrs. Rawnsley did come to an agreement that he would buy her share for £750. That agreement was not in writing and it was not specifically enforceable. Yet it was sufficient to effect a severance. Even if there was not any firm agreement but only a course of dealing, it clearly evinced an intention by both parties that the property should henceforth be held in common and not jointly.

On these grounds I would dismiss the appeal.

LORD JUSTICE BROWNE: I agree that this appeal should be dismissed, but only on the second of the two grounds on which the County Court Judged based his decision.

The case raises two questions. First, was the County Court Judge right in holding that the express trust in the conveyance was displaced and Mr. Honick and Mrs. Rawnsley became tenants in common instead of joint tenants. He based his decision on this point on the ground that Mr. Honick's intention and purpose in having the house conveyed to himself and Mrs. Rawnsley as joint tenants was that he contemplated that he was going to marry her and the house would be their matrimonial home, and this intention and purpose were never carried out. He held that this result followed even though Mrs. Rawnsley never contemplated marrying Mr. Honick. The second point is that, even if the County Court Judge was wrong on the first point, was he right in holding that the joint tenancy had been severed?

As to the first point, the Judge found in his judgment that:

"The plaintiff" –

that is the daughter of Mr. Honick –

"says her father firmly believed he was going to marry her and that the house would be the matrimonial home, and I have no doubt whatever that was his reason for purchasing the house in joint names. I accept the defendant's evidence that he never mentioned marriage to her and that she never contemplated marriage, but was minded to join in the purchase, so as to have a place of her own namely the upstairs flat, whilst he occupied the lower flat."

The Judge's findings of fact are amply justified by the evidence; and I note also that Mr. Juniper, who was the solicitor who acted in this matter, said he did not recollect Mr. Honick ever saying anything to him about marriage until July 1968. The Judge also found that in fact Mrs. Rawnsley had provided half of the purchase price of the house. The Judge's conclusion was

"Accordingly I find that the conveyance was taken in joint names in contemplation by the deceased"

- that is Mr. Honiok -

"that the house would be the matrimonial home. In these circumstances I need only refer to Ulrich v. Ulrich 1968 1 W.L.R. 180 "

- to which my Lord has already referred.

It is clear that where a person creates a trust for a charitable purpose or in contemplation of a particular event and that purpose fails or that event does not happen, there is a resulting trust in favour of the settlor. My-Lord, the Master of the Rolls, has already referred to Underhill on Trusts at pages 133 and 136.

The same would also apply where two people join in creating a trust, both having the same purpose or contemplating the same event. The resulting trust in such a case is for each settlor in proportion to the amount he or she put into the trust. The dictum in Ulrich's case, to which my Lord has referred, was dealing with that situation.

I understood Mr. Mummery to be arguing at one stage of his argument that the trust in this case was created solely by Mr. Honick, because the contract for the purchase of the property was made in his name, even though the conveyance was in joint names. However, I understood him at another stage — I may have misunderstood him — to say that he could not say that Mr. Honick was the sole settlor in this case because Mrs. Rawnsley brought in her half share of the purchase money. Further, it is clear from the evidence and from the note made by the solicitor which appears on page 40 of the documents that the suggestion of a joint tenancy had been made before the contract. In my view - whether or not I correctly understood Mr. Mummery's attitude - both Mr. Honick and Mrs. Rawnsley were settlors in this case. The position in this case is therefore that one settlor created the trust in contemplation of an event which never happened and for a purpose which failed — that was Mr. Honick — but he never told the other settlor that this was his purpose, and she did not join in the trust in contemplation of that event nor for that purpose. Mr. Mummery says that her purpose in joining in the trust was only to get the upstairs flat for her own occupation and that that purpose also failed. In view of the terms of the conveyance and the solicitor's note to which I have already referred, I cannot draw the inference that that was her purpose.

As I understand it, the basis for this sort of resulting trust is that the purpose for which the trust was created has wholly failed. Underhill on Trusts at page 136 uses the phrase "total failure of consideration", and that phrase is also used by Mr. Justice Vaisey in the case of In re Ames Settlement 1946 Ch. 217 at page 223. It may be, as my Lord said in the course of the argument, that the phrase "total failure of consideration" in this context has not the same meaning as it has in the context of contract; but it seems to me impossible to say that there has been a total failure of consideration or that the trust has failed where a trust is created by two people and where there is a failure of a purpose for which one of them created the trust but which he did not communicate to the other party and which the other did not share. I have already said that on the facts I am not satisfied that Mrs. Rawnsley's purpose was to get the upstairs flat for her own occupation. But even if this is wrong, I agree with Mr. Levy that this sort of resulting trust only arises when both parties have a common purpose which fails. In my judgment, therefore, the County Court Judge came to a wrong conclusion on the first point.

As to the second point, that is the severance point, the County Court Judge dealt with this point in one sentence in his judgment, and we are told that according to the shorthand notes taken by both solicitors, a substantial part of that sentence was not included in his judgment as delivered orally. The one sentence as it appears in his original judgment was:

"I hold that there has been a severance of the joint tenancy brought about by the conduct of the defendant in asking £750 for her share which was agreed to"-.

The words which we are told did not appear in the shorthand note are "in asking £750 for her share which was agreed to." But I think we must take it that the County Court Judge found as a fact that Mrs. Rawnsley did agree to sell her share to Mr. Honick for £750 and then went back on it. It appears from the Judge's note and from what Mr. Mummery told us that this was his submission to the County Court Judge, and it seems to me clear that the Judge accepted it.

The first question, therefore, is whether that finding of fact can be supported. I am bound to say that the evidence about any such agreement seems to me to have been most unsatisfactory. There was no evidence to support the Judge's statement that it was Mrs. Rawnsley who asked for £750 (or any other sum) for her share, as Mr. Mummery frankly accepts. The Evidence came from three witnesses and from two documents. Mr. Juniper, the solicitor, referred to the letter to which my Lord has already referred of 1st July 1968. Mr. Juniper said:

"Mr. Honiok told me that the defendant was not going to marry him, but had agreed to take £750 for her interest. Defendant called on 2nd July and said she was not willing to sell."

And in cross-examination he said:

"She was adamant she didn't want to sell."

The plaintiff said that her father had told her that he had offered £700 for her share and she had refused. "He said she'd been to her solicitors - she was in July 1968 going to ask £1,000 which he was not going to pay." The defendant herself, according to the Judge's note, said:

"In Juniper's presence Honick offered me £750 for the flat. I didn't want to sell."

The Judge's note did not contain any record of Mrs. Rawnsley's cross-examination about this, but Counsel were able to produce their notes which did add something. According to Mr. Mummery's note of Mrs. Rawnsley's evidence in chief, she said this:

"July 1968 Honick told her Juniper wanted to see her. Honick offered £750 for the flat. She said to Mr. Juniper she did not want to sell. Mr. Juniper repeated to Mr. Honick that she did not want to sell."

Mr Levy's note of his cross-examination of Mrs. Rawnsley was:

"Mr. Honick first offered me back my money. I did not want it. The contract was for me to have the upper flat. I did not mention the figure of £1,000. I had not agreed to sell. I had not agreed."

The two contemporary documents are the letters of 1st and 2nd July 1968 which are in the documents. The first one, of 1st July, was addressed to Mrs. Rawnsley at the Waltham Cross address, and it seems reasonable to suppose that what happened was that Mr. Juniper became doubtful whether she would get the letter at that address and he then wrote the letter of 2nd July in substantially the same terms addressed to her at her own address at Streatham Hill. However, before that letter was sent off - and it is marked "not sent" - Mrs. Rawnsley came in and saw Mr. Juniper; and he made the note "Mrs. Rawnsley says she is not willing to sell." It seems to me that those contemporary letters at least show that Mr. Honick thought that Mrs. Rawnsley had agreed to sell. But unfortunately Mr. Juniper's note is ambiguous: it might mean either that Mrs. Rawnsley was saying she never agreed to sell, or it might mean that she had agreed to sell and had gone back on it later - which was Mr. Mummery's submission. Whether or not there was an oral agreement between Mr. Honick and Mrs. Rawnsley was, of course, a question of fact. Unsatisfactory as the evidence seems to me, I have after much hesitation come to the conclusion that we shtuld net be justified in upsetting the County Court Judge's finding of fact on this point.

Mr. Levy conceded, as is clearly right, that if there had been an enforceable agreement by Mrs. Rawnsley to sell her share to Mr. Honick, that would produce a severance of the joint tenancy; but he says that an oral agreement unenforceable because of section 40 of the Law of Property Act 1925 is not enough. Section 40 merely makes a contract for the disposition of an interest in land unenforceable by action in the absence of writing. It does not make it void. But here the plaintiff is not seeking to enforce by action the agreement by Mrs. Rawnsley to sell her share to Mr. Honick. Hs relies upon it as effecting the severance in equity of the joint tenancy. An agreement to sever can be inferred from a course of dealing — see Baron Lefroy in Wilson v. Bell (1843) 5 Irish Eq. Reports 501 at page 507, and Mr. Justice Stirling in Re Milks 1891 3 Ch 59 -and there would in such a case ex hypothesi be no express agreement but only an inferred, tacit agreement, in respect of which there would seldom if ever be writing sufficient to satisfy section 40. It seems to me that the point is that the agreement establishes that the parties no longer intend the tenancy to operate as a joint tenancy and that automatically effects a severance. I think the reference in Megarry and Wade in The Law of Real property, third edition, pages 418 and 419, to specifically enforceable contracts only applies where the suggestion is that the joint tenancy has been severed by an alienation by one joint tenant to a third party, and does not apply to severance by agreement between the joint tenants. I agree with Mr. Mummery that section 40 ought to have been pleaded, but I should be very reluctant to decide this case on a pleading point.

The result Is that I would uphold the County Court Judge's judgment on his second ground, namely, that the joint tenancy was severed by an agreement between Mrs. Rawnsley and Mr. Honick that she would sell her share to him for £750. In my view her subsequent repudiation of that agreement makes no difference. I would dismiss the appeal on this ground.

This conclusion makes it unnecessary to consider the important and difficult questions of what the effect of negotiations not resulting in an agreement or of a mere declaration would have been, and, in particular, the problem raised by the decision of Mr. Justice Plowman in In re Draper's Conveyance (1969) 1 Ch. 486, and of Mr. Justice Walton in Nielson-Jones v. Fedden and Others. Further, if the evidence and the conclusion that there was an agreement in this case are rejected, I doubt whether there was enough evidence in this particular case as to a course of dealing to raise the question of the application of Lord Hatherley's third category. I therefore prefer not to express any final opinion on these points. My Lord has dealt with them in his judgment and I have the advantage of knowing what Sir John Pennycuick is going to say about that aspect of the case. I agree with both of them that Lord Hatherley's third category is a separate category from the second category. I agree also that the proviso to section 36(2) of the Law of Property Act 1925 seems to imply that notice in writing would, before 1925; have been effective to sever a joint tenancy in personal property. It is clear that section 36(2), as Sir John Pennycuick is going to point out, made a radical alteration in the previous law by introducing the new method of severance by notice in writing, and that cases before 1925, in particular Re Wilks (1891) 3 Ch. 69, must now be read in the light of this alteration. I agree that an uncommunicated declaration by one joint tenant cannot operate as a severance.

In my judgment, the appeal should be dismissed on the second ground relied on by the County Court Judge.

Sir JOHN PENNYCUICK: I agree that this appeal should be dismissed.

The learned County Court Judge based his conclusions upon two grounds, namely, (1) that the property was conveyed to Mr. Honick and Mrs. Rawnsley in the contemplation by Mr. Honick (but not conmunicated to or agreed by Mrs. Rawnsley) that they would marry, (2) that the joint tenancy if created was severed by agreement between Mr. Honick and Mrs. Rawnsley whereby Mr. Honick was to buy her out for £750. I shall consider these two grounds in the same order.

(1) I do not think the Judge's conclusion upon the first ground can be supported. Where a person makes a disposition in contemplation of an intended marriage, then, even if the disposition is not expressed to be conditional upon the marriage taking place, if the marriage does not in fact take place, there is no doubt that he is entitled to have the settlement set aside upon the ground that the purpose of the disposition has failed. That is plain common sense and it is not necessary to go into the technicalities of marriage as a consideration. The position would no doubt be the same where two persons make a single disposition of property held by the two of them in contemplation of an intended marriage and then the marriage does not in fact take place. But where two persons make a disposition and one only of them makes it in contemplation of an intended marriage, then there is no common purpose, and, in the absence of a common purpose and at any rate in the absence of a communication by the one having the purpose, I do not see any principle upon which the former could claim to set aside the disposition. Mr. Mummery stresses that Mr. Honick had by virtue of his contract with the vendor the entire equitable interest in the property; and that, he having been the sitting tenant, the contract price was presumably far below the open market value, so that in substance he made the major contribution. But these circumstances are irrelevant in the present connection. Upon completion the purchase price was provided in part by Mr. Honick and in part by Mrs. Rawnsley, and their relevant beneficial interests depend wholly upon the express terms in the conveyance. I recognise that Mrs. Rawnsley's own expectation was defeated in that in the event Mr. Honick did not allow her to occupy her intended part of the house, namely the upper floor. But the common purpose was not to occupy the house as two tenements but as a single tenement, the accommodation being shared in a particular manner. I do not myself think that one can treat the purpose of Mrs. Rawnsley in making the settlement as having failed in any relevant sense so as to enable Mr. Honick or his personal representative to treat the settlement as avoided.

(2) It seems to me, however, that the Judge's second ground was a valid one. It is not in dispute that an agreement for severance between joint tenants effects a severance. This is the rule 2 propounded by Vice Chancellor Sir W. Page Wood in the case of Williams v. Hensman (1861) 1 Johnson & Hemmings 546 at page 557. The words he uses are contained in one sentence: "Secondly, a joint tenancy may be severed by mutual agreement." For a clear and full general statement as to severance of a joint tenancy see Halsbury's Laws of England, third edition, volume 32, page 335. In the present case the Judge found as a fact that Mr. Honiok and Mrs. Rawnsley at the beginning of July 1968 agreed upon the sale by her to him of her share at the price of £750. The evidence upon which that finding was based appears to be rather weak and the learned Judge misstated from whom the proposal originated. But the Judge heard Mr. Juniper and the evidence of Mr. Honick's statement to him, which evidence was agreed to be admissible; and he heard Mrs. Rawnsley herself. I do not think this Court would be justified in holding that the Judge's finding was so contrary to the weight of evidence that it should be set aside. Lord Justice Browne has reviewed the evidence in detail and I will not go over the ground again. Once that finding of fact is accepted, the case falls squarely within rule 2 of Vice Chancellor Page Wood. It is not contended that it is material that the parties by mutual consent did not proceed to carry out the agreement. Rule 2 applies equally, I think, whether the agreement between the two joint tenants is expressly to sever or is to deal with the property in a manner which involves severance. Mr. Levy contended that in order that rule 2 should apply, the agreement must be specifically enforceable. I do not see any sufficient reason for importing this qualification. The significance of an agreement is not that it binds the parties; but that it serves as an indication of a common intention to sever, something which it was indisputably within their power to do. It will be observed that Vice Chancellor Page Wood in his rule 2 makes no mention of specific enforceability. Contrast this position where severance is claimed under his rule 1 by reason of alienation by one joint tenant in favour of a third party. We were referred to a sentence in Megarry and Wade's Law of Real property, third edition, page 418, where, under the heading of "Alienation in equity", it is said: "In equity .... a specifically enforceable contract to alienate creates an equitable interest in the property even though the legal act of alienation has not taken place." That statement has, I think, no application to an agreement between the two joint tenants themselves. The only other authority relied on by Mr. Levy on this point is a sentence in the old Irish case of Wilson v. Bell (1843) 5 Irish Equity Reports 501 at page 507, where it is said "it is settled, that an agreement to sever will in equity amount to a severance; and as this is personal property, there is no doubt that even a parol agreement would be sufficient for that purpose." I think that sentence is altogether inadequate to support Mr. Levy's contention.

Mr. Mummery advanced an alternative argument to the effect that even if there were no agreement by Mr. Honick to purchase Mrs. Rawnsley's share, nevertheless the mere proposal by Mr. Honiok to purchase her share would operate as a severance under rule 3 in Williams v. Hensman. That rule is stated by Vice Chancellor Page Wood in the following terms:

"And, in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. When the severance depends on an inference of this kind without any express act of severance, it will not suffice to rely on intention, with respect to the particular share, declared only behind the backs of the other persons interested. You must find in this class of cases a course of dealing by which the shares of all the parties to the content have been effected, as happened in the cases of Wilson v. Bell and Jackson v. Jackson."

I do not doubt myself that where one tenant negotiates with another for some re-arrangement of interest, it may be possible to infer from the particular facts a common intention to sever even though the negotiations break down. Whether such an inference can be drawn must I think depend upon the particular facts. In the present case the negotiations between Mr. Honick and Mrs. Rawnsley, if they can be properly described as negotiations at all, fall, it seems to me, far short of warranting an inference. One could not ascribe to joint tenants an intention to sever merely because one offers to buy out the other for ,£X and the other makes a counter-offer of £Y.

We were referred to a long series of authorities going back to Partriche v. Powlett (1740) 2 Atkyns 54 and culminating in the conflicting decisions of Mr. Justice Plowman in In re Draper's Conveyance (1969) 1 Ch. 486; and Mr. Justice Walton in Neilson-Jones v. Fedden and others (1974) 3 W.L.R. 582. Once it has been determined that an agreement was made, as in the present case, anything more one may say on this line of authorities must necessarily be obiter; but I think it may be helpful to state very shortly certain views which I have formed in the light of the authorities.

(1) I do not think rule 3 in Vice Chancellor Page Wood's statement is a mere sub-heading of the rule 2. It covers only acts of the parties, including, it seems to me, negotiations which, although not otherwise resulting in any agreement, indicate a common intention that the joint tenancy should be regarded as severed.

I do not overlook the words which I have read from Vice Chancellor Page Wood's statement, namely, that you must find a course of dealing by which the shares of all the parties to the contract have been affected. But I do not think those words are sufficient to import a binding agreement.

(2) Section 36(2) of the Law of Property Act 1925 has radically altered the law in respect of severance by introducing an entirely new method of severance as regards land, namely, notice in writing given by one joint tenant to the other.

(3) Pre-1925 judicial statements, in particular that of Mr. Justice Stirling in the case of Re Wilks (1891) 3 Ch. 69, must be read in the light of this alteration in the law; and, in Particular, I do not see why the commencement of legal proceedings by writ or originating summons or the swearing of an affidavit in those proceedings, should not in appropriate circumstances constitute notice in writing within the meaning of section 36(2). The fact that the plaintiff is not obliged to prosecute the proceedings is I think irrelevant in regard to notice.

(4) Perhaps in parenthesis, because the point does not arise: here the language of section 36(2) appears to contemplate that even under the existing law notice in writing would be effective to sever a joint tenancy in personality: see the words "such other act or thing". The authorities to the contrary are rather meagre and I am not sure how far this point was ever really considered in relation to personalty before 1925. If this anomaly does exist, and I am afraid I am not prepared to say positively that it does not exist, the anomaly is quite indefensible and should be put right as soon as possible.

(6) An uncommunicated declaration by one party to the other or indeed a mere verbal notice by one party to another clearly cannot operate as a severance.

(7) The policy of the law as it stands today? having regard particularly to section 36(2), is to facilitate severance at the instance of either party, and I do not think the Court should be over zealous in drawing a fine distinction from the pre—1923 authorities.

(8) The foregoing statement of principles involves criticism of certain passages in the judgments of Mr. Justice Plowman and Mr. Justice Walton in the two cases cited. Those cases, like all other cases, depend on their own particular facts, and I do not myself wish to go on to apply these obiter statements of principle to the actual decisions in these cases.

Finally, I would say that if, contrary to my view, there was a resulting trust in this case, I should have no doubt that, on the particular facts in the case, the resulting trust would be for Mr. Honick and for Mrs. Rawnsley in equal shares. I was referred to the case of Robinson v. Preston 4 Kay & Johnson 505. The circumstances of the present case are I think plainly such as to take this case out of the general principle laid down in that case as applicable apart from particular circumstances. I would dismiss the appeal.

Appeal dismissed with costs. Leave to appeal to the House of Lords refused.