Lee & Anor v Lee & Anor

A notice of severance of a beneficial joint tenancy may be rectified, even though it is a unilateral instrument, where it fails to record the maker’s specific intention. The claimant must provide convincing evidence of that intention, identify a flaw in the document rather than merely an erroneous assessment of consequences, and show precisely what the document should have said. There must also be an issue capable of being contested between the parties, notwithstanding their consent and any fiscal consequences. Rectification may address a client’s mistake as to the effect of words used in a document, where the document does not record the intention actually held when it was executed.

The claimants, executors of William Gorwyn Lee’s estate, sought rectification concerning the family farm. A notice of severance dated 31 January 2007 referred only to one registered title, although the deceased and Rosemary Lee intended to sever their beneficial joint tenancy in the whole farm so that their wills could operate as planned for the benefit of their son, Benjamin Lee.

The claim initially sought rectification of a later deed of variation. It was amended to focus on the notice of severance. The issues were whether the notice could be rectified, whether the transfer of subsequently registered land should be construed or rectified, and whether the deed of variation could independently cure the problem.

1. Rectification of notice of severance. The court ordered rectification of the notice of severance. A notice under section 36 of the Law of Property Act 1925 may be rectified although it is capable of being given unilaterally. Here, it had been signed by both joint tenants and could also be regarded as recording an agreement between them.
2. Applicable conditions. The requirements identified in Racal Group Services Ltd v Ashmore [1995] STC 1151, as summarised in Giles v Royal National Institute for the Blind [2014] EWHC 1373, were satisfied: there was convincing evidence of the parties’ true intention; the notice contained a flaw and failed to give effect to that intention; the specific intention to sever the whole farm was established with precision; and there was an issue capable of being contested between the parties.
3. The case was distinguished from Alnutt v Wilding [2007] EWCA Civ 412. The parties did not intend to execute a notice severing only the land expressly identified. They intended the words used to sever the joint tenancy in the whole farm. Their mistake concerned the effect of the document, which did not record their actual intention, rather than a mere mistake about the legal or fiscal consequences of an intended document.
4. The land later registered under title CL245397 was held on trust for the deceased and the first claimant as tenants in common. The reference to joint tenants in the transfer was construed in its context as an obvious slip. Alternatively, the transfer would have been rectified.
5. The alternative claim to rectify the deed of variation failed. The deed could not create the half share which depended on an effective severance before death. The court noted, without deciding its application here, that a post-death variation may in some cases reproduce the effect of a prior severance.