Barracks v Barracks & Anor

Standard transfer wording stating that a survivor may give a valid receipt for capital money does not, without more, establish a beneficial joint tenancy. A clear intention to create that trust is required. Where the evidence shows separate beneficial entitlement, the parties hold as tenants in common.

A joint tenancy may be severed by an effective alienation of a share, by written notice under section 36(2) of the Law of Property Act 1925, or by mutual agreement to treat the interests as separate shares.

The claimant sought a declaration and recovery of his deceased grandmother’s beneficial interest in a residential property. The claimant contended that his grandmother and her son held the beneficial interest as tenants in common in equal shares. The first defendant argued that they had held it as joint tenants, so that the whole interest passed to him on his mother’s death.

The dispute required consideration of the original 1986 transfer, a 1993 mortgage and transfer, the grandmother’s pleadings in related 1995 proceedings, and subsequent negotiations concerning a purchase of her share.

1. Claim succeeded. The claimant was entitled to his grandmother’s 50 per cent beneficial interest. The first defendant was ordered to pay the claimant’s costs, subject to detailed assessment if not agreed.
2. The transfer wording stating that the survivor could give a valid receipt for capital money did not create a beneficial joint tenancy. Applying Huntingford v Hobbs [1993] 1FLR 736, the wording did not amount to a declaration of trust. There was no evidence that either beneficial owner had turned their mind to creating a joint tenancy.
3. The parties therefore held the beneficial interest as tenants in common from 1986. The evidence, including the parties’ conduct and later documents, confirmed an intention that each should have a separate 50 per cent share.
4. Alternatively, any joint tenancy would have been severed in 1993. The mortgage transaction involved Mr Barracks Senior raising capital against his half-share, and the transfer deed expressly declared the parties to hold as tenants in common in specified shares. The approach in First National Security v Heggarty [1984] 1 All ER 139 was applied.
5. The grandmother’s pleading in the 1995 proceedings constituted written notice to sever under section 36(2) of the Law of Property Act 1925, applying Re Drapers Conveyance [1960] 1 Ch 486. Further, the later negotiations evidenced a mutual agreement to treat the beneficial interest as held in separate shares. That agreement would have severed any subsisting joint tenancy.