Quigley v Masterson [2011] EWHC 2529 (Ch) raised the classic severance dispute. P, one of two former joint tenants, died. P's daughter, Q, argued that the joint tenancy had been severed before P died so that his share of the property passed to his estate. M, the surviving joint tenant, argued that there had been no severance so that she became solely entitled to the property by survivorship. However, the rather unusual circumstances produced a twist in the tale.

P and M lived together from 1978 until 2001, when their relationship broke down and M moved out of the house of which they were joint tenants at law and in equity. From 2003 P's mental health started to deteriorate; and in March 2008 a consultant psychiatrist found that he was unable to manage his affairs. Since P was no longer able to grant a power of attorney, Q applied to the Court of Protection for a financial order, authorising her to sell the house and to divide the proceeds between P's estate and M. Subsequently, Q and M, unable to agree who should be appointed as P's deputy, each made an application for appointment. In February 2009 the court ordered that M should have conduct of the sale of the house but that Q should be made P's deputy for P's other property and affairs. A formal more detailed order, appointing Q as P's deputy, was made in March 2009, one week before P died.

Following P's death M applied to have the registered title to the house updated to reflect her view that, by virtue of the operation of survivorship, she was now sole proprietor both at law and in equity. Q objected on the ground that the equitable joint tenancy had been severed so that P's share would pass to his grandchildren under his will. The Deputy Adjudicator to HM Land Registry held that there had been no severance but he granted limited permission to appeal to the High Court.

It will be recalled that the proviso to section 36(2) of the Law of Property Act 1925 identifies four methods of severance: notice in writing and the three methods identified in Williams v Hensman (1861) 1 J. & H. 546, namely an act of any one joint tenant operating upon his own share, mutual agreement and any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. At various stages Q advanced three arguments that the equitable joint tenancy between P and M had been severed.

First, Q argued that in 2002/3, before P's health deteriorated, P's solicitors, acting on P's instructions, twice purported to sever by notice in writing. M questioned the service (rather than the substance) of the notices. The first notice was sent to M's former solicitors, who no longer had authority to accept it on her behalf; and there was no evidence that M had received the notice personally. The second notice misspelled M's name and was addressed to “Accommodation Services” at the university where M was working as a cleaner. It was uncertain whether the second notice had ever been posted but in any event it was held that M's workplace as an employee of the university could not be treated as her “last-known place of business” within the meaning of section 196(3) of the Law of Property Act 1925; and there was clear evidence that M had not received the notice personally. Both notices were therefore held to be ineffective and that decision was not challenged on appeal.

Secondly, it was argued that from 2008 onwards (if not before) there was a common understanding between P (and/or Q) and M that the house was owned by P and M in equal shares (and therefore as tenants in common); and that the reiteration of that common understanding throughout the Court of Protection proceedings constituted a “course of dealing” sufficient to sever the joint tenancy. The proposition that P and M each owned a 50 per cent. share in the house was asserted or acknowledged in Q's initial application to the Court of Protection, in M's acknowledgment of service, in Q's solicitors' response to the Court's specific question, in M's witness statement and in M's application to the Court to be appointed as P's deputy. However, Henderson J. upheld the Deputy Adjudicator's rejection of this argument. P himself lacked capacity to participate in an effective course of dealing; and prior to Q's appointment as P's deputy she had no authority to act for, or speak on behalf of, P. Moreover, her appointment could not without more retrospectively ratify her previous acts and statements; and there were no acts or statements in the brief period following her appointment and before P's death that could constitute a course of dealing sufficient to sever the joint tenancy.

The third argument for severance was the twist in the tale: it was not canvassed before the Deputy Adjudicator but was prompted by Henderson J. during the course of the High Court hearing. It was suggested, by analogy with the decision of Plowman J. in Re Draper's Conveyance [1969] 1 Ch. 486, that M's own application to the Court of Protection in January 2009 constituted a notice in writing and/or an act operating upon her own share. Henderson J. held that, read in conjunction with M's earlier assertions/acknowledgments that P and M each owned a 50 per cent. share in the house, the application was “the clearest evidence” that M was treating the joint tenancy as severed. Moreover, although M's application was not served on P in any of the ways specified in section 196 of the Law of Property Act 1925, and although it first came to the attention of Q at a time when she had no authority to act on P's behalf, Henderson J. held that Q should be treated as having been “given” notice when the Court of Protection made its first order in February 2009 and Q thereby acquired sufficient authority to receive the notice on P's behalf.

Henderson J. was prepared to overlook some arguable obstacles to his conclusion. The formal order appointing Q as P's deputy was not made until March 2009. Moreover, it required Q to give security and therefore provided (i) that the order was not to become effective until one month after it was made and (ii) that Q must not discharge any functions until the security was in place. Although P died before the one-month period had elapsed and before Q provided the required security, Henderson J. concluded (at [35]):

That passage and the decision in Quigley v Masterson demonstrate a welcome willingness on the part of the courts to find that a joint tenancy has been severed where the relationship between the former joint tenants has ended and the continuation of the joint tenancy and the operation of survivorship would be regarded as no longer appropriate in the circumstances.