A couple lived together as man and wife and bought a property for use as a guest house business to be run as a partnership. The conveyance executed by both of them included an express declaration that they held the property upon trust for themselves as beneficial joint tenants. It was bought for andpound;40,000, of which the man contributed andpound;900. There was no written partnership agreement, but profits and losses were shared equally. The woman kept the partnership’s books and accounts. Her draft accounts showed the property as an asset of the partnership. Rates were shown as a partnership outgoing, as was interest on a temporary bank loan. The woman died intestate and there was a dispute between the estates. The man said that he took the property as the survivor of a joint tenancy. The woman’s mother, as administratix, said that the joint tenancy had been severed or alternatively that the proper inference was that the property should be treated as a partnership asset.
Held: The man succeeded: ‘For the plaintiff, Mr Jennings advanced the case in favour of severance in two ways. He accepted that the onus of severance lay on the plaintiff, but he pointed out that equity leans in favour of tenancies in common. He observed, and I accept, that, in a case such as this, the evidence of the defendant must be viewed with caution . . In short, the third of these three modes of severance is by any course of dealing sufficient to intimate that the interests of the joint tenants were mutually treated as constituting a tenancy in common . .
Mr Jennings’ alternative formulation was closely related. It was that from the matters I have just mentioned the inference to be drawn is that the parties agreed that the property should be treated as a partnership asset. So treating the property gives rise to the presumption of severance mentioned in Lindley on Partnership, 15th ed. (1984), p. 77: ‘where jointly owned property is brought into partnership, and thereafter constitutes a partnership asset, a severance will be presumed, since the right of survivorship has no place in a partnership.’
I shall consider the two claims in that order.
To my mind the evidence established clearly that when the express declaration of joint tenancy in the conveyance was executed by the parties in mid-August 1979 they both knew what the effect of that joint tenancy would be, and they both intended that the property should automatically accrue to the survivor on the death of the first to die. I accept the evidence of Miss Malthouse, the solicitor who acted for the parties on their purchase, concerning what passed between her and Miss Barton and the defendant on this topic prior to completion . . . Again, it is plain from the evidence that from the outset the parties hoped and intended that the farmhouse would be used by them as a guest house, and indeed, they took over one booking from their vendor. They planned to carry on such a business there together, with the house also being their home . . .
Further, I think it is clear that when the draft accounts were discussed with Mr Howells [their accountant] in January 1981 nothing was said to suggest that the inclusion of the property in the partnership accounts would alter or was intended to alter in any way the existing arrangements agreed between the parties regarding the property when it was acquired in 1979.
In those circumstances . . . I do not accept that . . . Miss Barton’s inclusion of the property in the draft accounts as I have mentioned, and the defendant’s awareness of this, showed an intention on her part, let alone the defendant’s part, that henceforth the property was to be held as tenants in common . . . That would have represented a fundamental change in the parties’ intention from what was expressed when the property was bought . . . Nor . . . am I able to accept the plaintiff’s alternative formulation. With the parties’ intention being as I have mentioned, I can see no justification for treating that intention as defeated by such evidence as there is of an intention that the property should be a partnership asset. There may well be some inconsistency between those two intentions, but I am unable to regard the evidence that the property should be an asset of their joint venture as evidence of an intention superseding or affecting the intention that the survivor should by right of survivorship take the property. In truth so far as Miss Barton and the defendant were concerned, the partnership and the accounting records kept of the partnership business were formalities necessary because of tax considerations: receipts and expenditure were recorded and profits and losses were arrived at and formally split between them. But really, as Miss Barton said to her solicitor, Miss Malthouse, on one occasion, they did not have a business relationship.
In my judgment, therefore, on the evidence before me, it is not established that at any time before Miss Barton’s death Miss Barton or the defendant, or either of them, intended to treat the property as no longer held by them as beneficial joint tenants.’ Equity leans in favour of tenancies in common.
Nicholls J
[1985] 1 WLR 1257
England and Wales
Citing:
Cited – Burgess v Rawnsley CA 15-Apr-1975
. .
Cited – Williams v Hensman 10-Jun-1861
A fund of money was bequeathed on trust to be invested so as to generate an income payable to A ‘the principal to go to her children at her death’.
Held: The will created a joint tenancy. The court set out three ways in which a joint tenancy . .
Cited by:
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .
Lists of cited by and citing cases may be incomplete.
Equity, Company
Updated: 12 November 2021; Ref: scu.238853