§ 11.7 a.m.
§ The Solicitor-General (Sir Peter Rawlinson)
I beg to move, in page 1, line 11 to leave out "or was".
For the convenience of the House, Mr. Speaker, we could, perhaps, discuss with this Amendment the following two Amendments:
In page 1, line 11, at end insert:(2) The foregoing provisions of this section shall apply with the necessary modifications in relation to a conveyance by the personal representatives of the survivor of joint tenants as they apply in relation to a conveyance by such a survivor.
§ In Clause 2, page 1, line 15, after "vendor", insert "or by his personal representatives ".
§ The Solicitor-General
I remind the House about Clause 1 of the Bill, which was introduced by the hon. Member for Leicester, North-West (Sir B. Janner), whose name appears with mine on the Notice Paper in support of these Amendments. This useful Measure, of which Clause 1 claims the most important part, deals with a difficulty in conveyancing practice which has been experienced for some time. Section 36 of the Law of Property Act, 1925, provided that every legal estate vested in joint tenants is held upon trust for sale. Therefore, there ought to be two trustees to convey the property and to receive the purchase money.
Where there was only one survivor it was seen that a difficulty arose. This was attempted to be dealt with by the Law of Property (Amendment) Act, 1926. That provided that the Law of Property Act, 1925, should not affect the right of a survivor to deal with the legal estate as if it were not held on trust for sale. That was an attempt to deal with the difficulty, but it was not satisfactory because the purchaser could not know 795 whether the joint tenancy had in fact been severed in equity before the survivor became solely entitled.
The object of this Bill, which after Second Reading received the support of all hon. Members in the Committee, is to enable the survivor to sell without appointing a second trustee for the sale.
By Clause 1 the last survivor could deal with the estate if he were solely or beneficially interested, because by the Clause a conveyance by a survivor as a beneficial owner would be good enough to protect the purchaser against any trusts affecting the purchase money, for example, where the joint tenancy had been severed before and there was only one survivor.
These Amendments are essentially drafting Amendments and are designed to make it clear that the personal representative of the surviving joint tenant can make a good title in exactly the same way as the survivor himself could have done. The problem clearly also faces a personal representative of a survivor and he has powers which in such circumstances are joint and several. In these circumstances it was thought that there should be given much clearer effect to what is clearly the intention of the promoters of the Bill that the personal representative should be in the same position as the survivor.
The Bill as originally drafted with the words "or was" in line 11 was an attempt to deal with this situation. However, on reflection it has been thought that it is not very satisfactory to depend, for this result of putting the personal representative in the same position as the survivor, on the expression "or was". It seemed to be too vague and it seemed better to spell out exactly what was required.
The Amendments accordingly provide for the deletion of the words "or was" and for the insertion of the words of the second of the three Amendments. The third of the three Amendments is consequential, as it is clearly necessary after the word "vendor" in Clause 2 to insert the words "or by his personal representative", bringing Clause 2 into line with Clause 1 in this respect.
For those reasons, I put forward these Amendments to put beyond doubt the obvious intention of the promoters of the 796 Bill, which was to see that the position of personal representatives is made perfectly clear, namely that they are in the same position as joint survivors.
§ Sir Barnett Janner (Leicester, North-West)
I offer my very sincere thanks to the right hon. and learned Gentleman and his law officers for the helpful manner in which they have acted at every stage of the consideration of this intricate subject.
You would not find it difficult, Mr. Speaker, but the average person who has not studied the law would find it very difficult to understand this matter. Consequently, it is not easily explainable to the House, but hon. Members can rest assured that an anomaly in respect of joint tenancies which must be remedied is being put right by the Bill. The Law Society has played a prominent part in this problem, whose complexity shows how people are misled when they are invited to believe that the law of property is so simple that it requires a person of no knowledge or of only slight knowledge of it to deal with conveyancing matters.
The points with which we are specifically dealing in these Amendments were raised in Standing Committee by my hon. Friend the Member for Deptford (Mr. Silkin), who made it clear that the Bill would be improved if certain words were inserted in the text. We recognise that a host of actions can effectively sever a joint tenancy in equity Some of our friends within and outside the House who are critical ought to tell us what that means. Only lawyers understand the significance There are circumstances which should place an intending purchaser in the position of knowing that a severance had occurred and that he was being asked to take a conveyance on the basis that the surviving joint tenant was the beneficiary entitled. It is with a view to making that as clear as possible, where it is possible to make it clear, that these Amendments are introduced, and I commend them to the House.
§ Mr. Graham Page (Crosby)
I do not want in any way to obstruct the passage of this admirable Bill, but we ought to be careful that we get it right at the outset. The legislators in 1925 and 1926 failed to do so, and the hon. Member 797 for Leicester, North-West (Sir B. Janner) is now trying to put the matter right, as they failed to do as long ago as that.
I am a little worried about the wording of these Amendments. My first concern is about the words "with the necessary modifications" in the new subsection (2), but there is a more important criticism which goes to the root of these Amendments. Clause 1 was intended to deal with the survivor of a joint tenancy selling, but it is obviously necessary to go a little further than that and to give his personal representatives the right to sell when the survivor dies. I was under the impression that as the law stood personal representatives would have had the right to sell without appointing another trustee, but this makes it quite clear that they can.
The whole basis of Clause 1 when the survivor sells is that he is selling as beneficial owner and that he states that he is selling as beneficial owner, which in law are words of art introducing certain legal assumptions. Personal representatives would not be selling as beneficial owners and these words would not appear in the conveyance by the personal representatives, so that that part of Clause 1 would not take effect.
In order to bring Clause 1 into operation, therefore, the personal representatives will be required to make a statement—I presume in the conveyance itself, but at any rate a statement signed by themselves—to say that the deceased survivor of a joint tenancy was solely and beneficially interested. It will not be easy for the personal representatives to make that statement. It means, to start with, that there will have been no mention of any severance of the joint tenancy on the conveyance to the joint tenants. If there is such a memorandum, the personal representatives of the survivor will not be able to say that the surviving joint tenant was beneficiary entitled.
There may be many occasions when the personal representatives will not know one way or the other whether there has been a severance or whether the joint tenancy existed at the date of death. There can be a severance of the joint tenancy by one of the joint tenants mortgaging his share or assigning his share. That would create a severance of the joint tenancy. Even a contract to assign or charge his undivided share 798 would cause a tenancy in common—a severance of the joint tenancy. If one joint tenant gives notice to the other joint tenant that he wishes to sever under Section 36 of the Law of Property Act, severance would come about.
How are the personal representatives of the surviving joint tenant to know whether any of those things have happened? They are not speaking of something which their testator did. They have to speak of something which the other joint tenant did not do. They may have no knowledge of whether he assigned his share or charged his share or agreed to sell his share or agreed to charge it. They will be put into some difficulty under the Clause in making the necessary statement that the surviving joint tenant was beneficiary entitled.
However, with that criticism, I think it right to provide for the case where the personal representatives are able to say that in all honesty and with a knowledge of the past history of the property. The Amendment will provide for cases in which the personal representatives know the history of the property and the history of the joint tenants, but it is very limited, because on many occasions they will be afraid to make the statement when they have not got the facts relating to the first joint tenant who died.
§ Dr. Alan Glyn (Clapham)
The Amendment seems to be sensible, but I should like to ask one or two questions. If one of the owners has parted, either by mortgage or by some other act, with the tenancy—in other words, if there has been what I understand to be an act of severance—am I correct in saying that one of the joint tenants has, by an act unknown to the other, alienated to some extent his share either by a mortgage or by some form of a deed, or a promise to sell or in consideration of something else? Am I correct in saying that it then becomes a tenancy in common? Under Section 36 of the Law of Property Act the Amendment would not then apply, because it applies only so long as they are joint tenants. Am I correct in that? If one of the joint tenants has done something to alienate, as far as I understand it, the Amendment would not apply. I should be grateful if the hon. Member for Leicester, North-West (Sir B. Janner) would 799 make this point clear. I do not think that it affects the value of the Amendment.
§ Sir B. Janner
May I reply to the hon. Gentleman by intervention now, because I believe I have no right to reply to him directly later? The intention is that, where it is not clear that there has been a severance or where that cannot be ascertained, the position of the title should not be impaired. Cases where it is known or where it can be ascertained would be outside the scope of this. It is intended that, where it is not known that the title has been given over to somebody else, the title should not be a bad one.
§ Mr. John Silkin (Deptford)
The Amendments are designed to meet a point I raised in Committee and on which I felt strongly. My point was that there might be occasions when severance would take place—there are, I believe, five possibilities of severance taking place without the survivor of the joint tenants being aware that it has taken place—but when it might be possible that the purchaser was aware of the severance. In such circumstances I did not think that it was justifiable that he should be able to take advantage of the Clause.
This is a balance. All of us want to make conveyancing procedure as simple as we can. We want to make it as fair as we can. Although I accept what the hon. Member for Crosby (Mr. Graham Page) said, namely, that severance might occur and that a purchaser might take advantage of it, whereas as the law stands today he would not be able to, I am not sure that that is a bad thing. On the contrary, provided that there is good faith in the purchase, I think it is right that the inquiries to be made by 800 a bona fide purchaser should be as few and as simple as possible. I am a member of a profession which is sometimes derided because it is said that we try to make things more complicated. On this occasion we are trying to make them more simple.
The main advantages of the Amendments are these. First, if there is a case of severance of which the survivor of a joint tenancy is aware, that will be endorsed by a note or memorandum. In that event, the Clause will not take effect. The second point deals with one which I raised specifically in Committee, which was the case where the joint tenant who was not the survivor had become bankrupt, a fact which was well known to the intending purchaser but not to the survivor of the joint tenants. I will not detain the House by saying how this might arise. Suffice it to say that it could arise. The Amendment clearly and unequivocally prevents the operation of the Clause in such a case. I am very satisfied that this is so. This leaves only those cases of unintentional severance—
§ Mr. Graham Page
I am not sure that the hon. Gentleman is speaking to the right Amendment. He is referring to the proposed proviso to the Clause. As I understand it—I stand to be corrected, Mr. Speaker—this Amendment is not under discussion at this moment.
§ Mr. Silkin
As I understand it, Mr. Speaker, we are taking the first three Amendments on the Notice Paper together.
§ Mr. Speaker
No. I am sorry if there has been some confusion. My understanding will have to govern the matter. We are discussing the first and third Amendments in page 1, line 11, and the Amendment in page 1, line 15.
§ Mr. Eric Fletcher (Islington, East)
I seek your guidance, Mr. Speaker. Am I right in thinking that we shall have a separate debate on the second Amendment in page 1, line 11?
§ Mr. Speaker
Certainly, if the House wishes. I have to wait to hear if anybody proposes that we should have a multiple debate. As far as I know, we shall have a separate debate.
§ 11.30 a.m.
§ Mr. Silkin
In those circumstances I entirely agree with the hon. Member for Crosby, but it does happen, as I think, he is aware, that the interplay of arguments in fact overlap the whole of these groups of Amendments. In the circumstances, perhaps I can delay a little of my fire until later in the proceedings.
§ Mr. Fletcher
Might I say a word before we part with these Amendments, because I am sure, as the hon. Member for Crosby (Mr. Graham Page) and other hon. Members have indicated, it is important that we should try to get this right and, I hope, put this Bill in a form in which we all understand what is being done as a consequence of these Amendments.
I think that is the more important, because this Bill did not have a Second Reading debate and I do not think that the particular point raised by these Amendments was really canvassed in any detail in Committee. Therefore, I am anxious to make sure that I understand it, and I hope that either the Solicitor-General or perhaps my hon. Friend the Member for Leicester, North-West (Sir B. Janner) will have another opportunity, with the leave of the House, to try to elucidate what still seems to me to be in doubt.
As I understand it, this Bill and these Amendments are designed primarily to protect purchasers who have acquired transfers of property from a survivor of two or more joint tenants. It has been indicated that there may be circumstances in which neither the surviving joint tenant himself and still less his personal representative know when a sale takes place whether the other joint tenant has taken some steps to produce a severance. There will obviously be some circumstances in which such facts are known, and that situation is dealt with in an Amendment which we have yet to discuss.
If we apply our minds to those cases in which there is nothing on the title and nothing on the documents to indicate whether the severance has taken place but there may unknown to the survivor have been a severance brought about by the other joint tenants, the question that I think the House would like to be clear about is this. Are we right in thinking that it is the intention 802 of the Bill in those circumstances to legislate so as to give the purchaser a good title if he takes a conveyance from the survivor conveying as beneficial owner, and in the case of the legal personal representatives if they convey not as beneficiary owners, which they obviously cannot be, but following a recital that the survivor was the beneficial owner at the time of his death? If I am right in thinking that, I suppose that it follows that there may be cases in which while a purchaser acquires a good title under this Bill the interest of the other joint tenant or, indeed, perhaps the interest of some third party who has acquired some right either by contract or charge from the other joint tenant will be defeated.
§ Mr. Graham Page
I do not think that is altogether quite as the hon. Gentleman has expressed it. He will, of course, have a right against the proceeds of sale in the hands of the personal representatives. We are not by this Bill depriving the chargee of the half share of his right to the money and which can still go against the proceeds of sale.
§ Mr. Fletcher
When I said "defeated", I meant defeated in the sense that he will not be able to set aside the title which the purchaser has acquired by the conveyance. Where as at present he would have some rights against the property itself as a result of this Bill, if he had acquired some rights unknown to the survivor or, indeed, perhaps known to the survivor but not recorded. While we are by this Bill giving very sensible protection to the purchaser, the rights of the other joint tenant or perhaps of a third party to acquire the rights from him will be reduced in the sense that in future they will not be able to dispute the title which the purchaser has acquired, but they will be restricted to such rights as they may able to exercise against the proceeds of sale.
I think that it is important that that position should be clearly understood. In saying that, I do not for a moment dissent from the proposition that the major interest should be to secure the validity of the title to property and thereby to simplify conveyancing, but I think that the House should be aware of the inferential consequences as a result of these Amendments.
§ Dr. Alan Glyn
I think that the hon. Member has made the position much clearer. Would he agree that all that is happening is that the benefit that the new owner has got is an unfettered title and absolute right? Would he not also agree, as I think the House should be aware, that anyone who has acquired a right, in some sort of mortgage or anything else, has no right or a very substantially reduced right because he cannot take action against the property where the money is. All that he can do is to try to trace the people involved in the distribution of the money.
§ Mr. Fletcher
That is what I was trying to say and my impression is that the position is as the hon. Member has stated.
§ The Solicitor-General
I must not have made it clear to the hon. Member for Deptford (Mr. Slikin) that I was dealing with just these three Amendments which really relate to the condition only of the personal representative. They are to make clear that the personal representative should not be in any difficulty, and I shall explain why he might have been if we have not, as I believe we have now done, made it quite clear that he stands in the same position as the joint survivor.
The hon. Member for Islington, East (Mr. Fletcher) is right. This is a Bill which is a complicated matter and which did not receive a Second Reading debate, although we had a very useful period in Committee. All hon. Members who have spoken—of which only one apart from myself is not a member of that branch of the profession which deals with these matters—do so with a very high degree of hesitation. Clause 1 is to ensure that the last survivor can deal with the estate if he is solely and beneficially interested because the conveyance by the survivor as beneficial owner will be good enough to protect the purchaser against any trusts.
The position of the personal representative is this. On the death of the sole surviving joint tenant and the appointment of the personal representative, the whole interest in the title of the land vests in the personal representative, who can freely dispose of the land in the course of his duties and administration and, unlike trustees, he, as the 804 sole surviving personal representative, can by himself give a valid receipt. That appears in Section 27 of the Law of Property Act, 1925.
On the other hand, the sole surviving joint tenant whose joint tenancy has been severed in equity—I touch on this matter now, although we will be coming to the question of severance more in the next Amendment—has lost his right of survivorship, and on his death the property vests in his personal representatives as trustees and, therefore, the personal representatives are in the same difficulty as the survivor. It was to make it quite clear that the personal representative gets from the Bill the same advantage that is given to the surviving joint tenant, that these Amendments have been moved.
§ Amendment agreed to.
§ Mr. Jeremy Thorpe (Devon, North)
On a point of order. With respect to the Solicitor-General, I interrupt the debate to ask you if you could help us, Mr. Speaker. On Wednesday I asked for your guidance as to what would be the position of this House if on Friday, a day on which it was not possible to move the Adjournment of the House, the House learned of the sentences in the Rivonia trial.
You will recall, Mr. Speaker, that the Leader of the House yesterday gave an undertaking that he would discuss with the appropriate Minister the possibility of making a statement at the appropriate moment. Since we have now heard the verdict in that case, about 10 minutes ago—which is that life sentences have been passed on all the accused, who have been convicted—may I ask whether application has been made by the Foreign Secretary for leave to make such a statement today?
§ Mr. Speaker
The hon. Gentleman cannot intervene like this, in the middle of an Order of the Day. To do so is quite wrong and improper.
§ Mr. A. Fenner Brockway (Eton and Slough)
Further to that point of order. Might I ask you for an assurance that, if a statement is not made today, one will at least be made on Monday?
§ Mr. Speaker
Not now, and I could not give that assurance. There is no machinery for it to be given now.
§ Mr. Fletcher
Further to that point of order. Would you give the House the benefit of your guidance on this point, Mr. Speaker? Are hon. Members right in thinking that should a Minister of the Crown wish to make a statement on this matter, as was promised on Wednesday, it would be possible for him to make such a statement this afternoon or at 4 o'clock, if not earlier?
§ Mr. Speaker
I shall have to consider the position if and when an application is made. We must continue our consideration of the Bill now.
§ The Solicitor-General
I beg to move, in page 1, line 11 at the end to insert:Provided that the foregoing provisions of this subsection shall not apply if, at any time before the date of the conveyance by the survivor—The words which I am moving to be inserted in the Clause are in the nature of a proviso. To put the matter shortly, the words provide that a purchaser cannot rely on this Clause if a memorandum of severance—and here we come to the subject of severance which we were inadvertently discussing before—has been endorsed on the original conveyance to the joint tenants or if the severance results from a bankruptcy which has been registered and of which the purchaser has notice.
- (a), a memorandum of severance (that is to say a note or memorandum signed by the joint tenants or one of them and recording that the joint tenancy was severed in equity on a date therein specified) had been endorsed, on or annexed to the conveyance by virtue of which the legal estate was vested in the joint tenants; or
- (b) a receiving order in bankruptcy made against any of the joint tenants, or a petition for such an order, had been registered under the Land Charges Act 1925, being an order or petition of which the purchaser has notice, by virtue of the registration, on the date of the conveyance by the survivor.
There should be clearly in the Bill some protection for the interests of those deriving title from a beneficial joint tenant whose interest has been severed. This matter was discussed by my hon. Friend the Member for Crosby (Mr. Graham Page) and the hon. Member for Deptford (Mr. Silkin), among others, in Committee, and reference has been made to it today.
The effect of the Amendment—because, in my recommendation to hon. 806 Members, what was pointed out by the hon. Member for Deptford in Committee was completely correct—is that a purchaser will not be able to claim the protection of this Clause if a memorandum of severance is endorsed on the original conveyance. The second part of the proviso applies, if the beneficial joint tenancy has been severed as a result of a bankruptcy and the bankruptcy petition has been registered. That in many ways speaks for itself, as the hon. Member for Deptford pointed out in Committee.
It is right to emphasise that where the title to land is registered the law has for long been that provided there is no restriction on the register, the sole surviving joint tenant is entitled to deal with the land on the footing that he is solely and beneficially entitled, but a registered joint tenant who severs the beneficial joint tenancy may at any time have a restriction entered. The effect of that is to cancel the power of the sole survivor to deal freely with the land.
Bankruptcy was also discussed in Committee. That must, technically, sever a beneficial joint tenancy, and the petitions and receiving orders in a bankruptcy are registrable as land charges, as all hon. Members who have taken part in the debate will appreciate. It is obviously desirable that this principle should apply so as to protect the interests of beneficial joint tenants.
Having considered what was said in Committee, along with the remarks made this morning, I recommend that this proviso, which I hope sets the matter out with reasonable clarity, will satisfy hon. Members that these matters should be dealt with in the Bill. As has been pointed out, it is important that we should get the Measure right and I hope that this will be regarded as an improvement on the original Bill, with respect to the hon. Member for Leicester, North-West (Sir B. Janner).
§ Sir B. Janner
Having heard the opinion of a learned counsel in the matters, may we consider the opinions of persons who are in the solicitors' profession and who have occasion to deal with these points quite often; on whom responsibility for not dealing with them rests, much to the relief of learned counsel. 807 There is no doubt that my hon. Friend the Member for Deptford (Mr. Silkin) has assisted considerably by pointing these out to the House thus enabling us to adjust the position. After all, a solicitor who is not sufficiently diligent, knowing there to have been a severance, to have advised his client that an endorsement should be put on the document will find himself in difficulties. One who did not examine the necessary records to find out whether there was a receiving order which affected the title would also find himself in considerable difficulty.
But a layman could not be expected to understand. A lot of nonsense is spoken in various places about a layman with no legal training being able to deal with a position like this, and I am quite certain that if people really appreciated what was involved they would understand it to be a highly technical matter, affecting immobile property. Even while we are debating, hon. Members on both sides are raising points which disturb them in relation to wording, and quite rightly; we should have made fewer court cases if everything was clear cut.
In the circumstances, it is very important that the memorandum should be endorsed on the appropriate document as and when the position is known, and it is also very important that a proper inquiry should be made with regard to receiving orders in bankruptcy before a transfer is complete. I am grateful to the Solicitor-General for having produced this Amendment.
§ Dr. Alan Glyn
Am I correct in thinking that this is not necessary when receiving orders are not registered? If they are registered, it would be tantamount to a fraud if the purchaser were given a clear title, because he has been given proper notice with the note that the order in bankruptcy has been registered as a charge under the Land Charges the order in bankruptcy has been registered, in which case the prospective purchaser would get a good title.
With regard to paragraph (a) of the Amendment, the correct endorsement of the memorandum of severance may or may not have been made, and there are two points which I should like to have cleared up. If it has been endorsed, 808 once again it would be quite wrong, and a fraud, if the prospective purchaser were to take in spite of notice. Presumably these paragraphs will operate only if the notice has been made clear and, as far as I can see, cannot cover any transactions that have not been registered. If it were a registered title, presumably these notices should have been registered on the deeds. I am not quite sure about this, but that strikes me as the probable position. We are not trying to make it easier to perpetuate fraud, but to make sure that, in reasonable circumstances, a prospective purchaser gets good title, with remedy not against the purchaser, but against someone else.
§ Mr. Silkin
I feel a little diffident, Mr. Speaker, that with your indulgence and that of the House I appear to be having two bites at the cherry, but I am comforted by the thought that I am in fairly distinguished company in having spoken to the wrong Amendment; that it has occurred in my own profession and also in the other branch of the law. Having made the most of the points I wished to on this Amendment a few minutes ago, I propose only to deal as well as I can with what the hon. Member for Clapham (Dr. Alan Glyn) has said.
I think that he is wrong in saying that it would be a fraud to take a conveyance where a receiving order in bankruptcy, for example, has been registered under the Land Charges Act, because the doctrine of notice is that of notice actual or constructive. It may very well be that we are dealing with a case where a layman might take a property, and if he were to do this he might not know that he should make the appropriate searches. I hasten to say that I cannot imagine that any solicitor would not, in those circumstances, make the appropriate searches, but there might be occasions when an ordinary purchaser might not have done so. Therefore, I do not think that the question of fraud arises—
§ Dr. Alan Glyn
I think that the hon. Gentleman is quite correct, but I was thinking of what he said earlier. I think that anyone who embarked on such a transaction without getting the advice of someone in the hon. Member's profession would be most unwise.
§ Mr. Silkin
I would endorse what the hon. Gentleman has said on that. 809 I talk without the book, but I think that it is right that a receiving order might not be registered, but this is a question of balance. We want the purchaser to have as simple a part as possible in collecting good title. That was the purpose of the 1926 legislation which we are now only trying to put right. In Committee, I suggested other words—perhaps more global words—than those in the Amendment but, on examining the Amendment, I felt that it covered everything I had in mind, and for those reasons I was very happy to be associated with it.
§ Mr. Graham Page
In order to apprecite the intention of the Amendment one has to look at the first line of Clause 1, which refers to Section 36(2) of the Law of Property Act, 1925. That subsection deals only with joint tenancies that have been severed, so that all we are really thinking of in Clause 1, and this proviso which amends it, is the case where joint tenants of a legal estate are tenants in common beneficially and the other parties are not aware of that fact.
Section 36 is very relevant when we are considering this Amendment, and subsection (2) states:No severance of a joint tenancy of a legal estate, so as to create a tenancy in common in land, shall be permissible, whether by operation of law or otherwise, but this subsection does not affect the right of a joint tenant to release his interest to the other joint tenants, or the right to sever a joint tenancy in an equitable interest whether or not the legal estate is vested in the joint tenants…It goes on to say how one joint tenant can bring about a severance by notice to the other joint tenant, and then we have the paragraph that was added under the Law of Property (Amendment) Act, 1926:Nothing in this Act affects the right of a survivor of joint tenants, who is solely and beneficially interested, to deal with his legal estate as if it were not held on trust for sale.So the Law of Property (Amendment) Act, 1926, dealt with the case where there are, in fact, joint tenancies but, in conveyancing the difficulty is that one cannot tell whether or not they are joint tenancies.
The Bill therefore proposes to set the purchaser's mind at rest on that, provided that there is no memorandum endorsed 810 on the conveyance of the joint tenants that there has been a severance since they acquired the property. But the Amendment still does not deal with the problem which was raised by the hon. Member for Deptford (Mr. Silkin) in Committee. What is the position if there is no memorandum endorsed on the conveyance to the joint tenants and there is no receiving order registered and yet the purchaser is aware that there has been a severance?
To take, for example, paragraph (b) which deals not only with a receiving order in bankruptcy but with a petition. I think that I am right in saying that it is unusual for a petition to be registered as a land charge. When it becomes a receiving order it is automatically registered by the Official Receiver.
§ Sir B. Janner
The answer to that point is in the Clause, in the wordsof which the purchaser has notice".
§ Mr. Page
To get the matter right, perhaps I may be allowed to read the whole of the paragraph which says that ifa receiving order in bankruptcy made against any of the joint tenants, or a petition for such an order, had been registered "—and if there is such a receiving order then obviously a survivor cannot sell as a beneficiary—under the Land Charges Act 1925, being an order or petition of which the purchaser has notice…Does that mean that if it is not registered and yet he has notice of it he will be unable to take a good title from the surviving joint tenant? I am not sure from the wording of the Amendment whether that is the case.
Let us consider cases which may arise quite apart from bankruptcy. The prospective purchaser may know, or perhaps ought to know if he has taken ordinary steps to know, that there has been a severance. In practice it is for the purchaser to draft the conveyance from the survivor of the joint tenants and in drafting it one presumes that he would put in a recital to say that the vendor is beneficially entitled to the whole of the property. He would draft the conveyance so that the vendor sells as beneficial owner. Must he go further and ask for a specific requisition whether the vendor can convey as beneficial owner or sign 811 a document in which there is a recital that he is wholly beneficially entitled?
I do not know to what extent the purchaser is still under obligation to use ordinary diligence to discover whether or not there has been severance. Can he rely entirely on the fact that there is no memorandum of severance on the conveyance and that whatever he may know and whatever inquiry he may have made in the normal way does not matter? Can he take it as gospel truth, if there is no memorandum of severance on the conveyance, that he can take the conveyance from the surviving joint tenant? I hope that that will be the case. It would simplify conveyancing. I hope that that is the effect of the proviso now being moved.
§ Dr. Alan Glyn
A point has been made on the words in paragraph (b)of which the purchaser has notice".I construe that as being constructive notice. In other words, if the thing has been registered and he has gone through the normal process of search he must have had notice. I hope that my hon. Friend will clear that up.
§ Mr. Page
As I read the Amendment it meansof which the purchaser has notice, by virtue of the registration…If he has notice by any other means than registration he is not bound by that notice. If, on the other hand, it is registered but not personally noticed he has had constructive notice of it which will bind him in law.
§ Mr. Fletcher
I am not happy about this last point. If that interpretation is correct I should have thought that the words were unnecessary and that it would have been sufficient for the proviso to protect the position in which either a receiving order in bankruptcy or a petition had been filed and registered. If the position is that that is to be the operative event which is to prevent Clause 1 coming into effect, and if it is the view that such registration produces constructive notice, I find it very difficult to understand what is the value in the Amendment of the last two lines.
If they are left in the Bill at all, the courts will presumably have the task of trying to give some meaning to them, because 812 the courts will not think that Parliament has put in words which are merely otiose. I invite the Solicitor-General to consider the matter because it may be sowing the seeds of trouble for some future date.
§ Dr. Alan Glyn
I am in entire agreement with the hon. Member on this point, but it seems to me that although the last two lines may well be unnecessary, and particularly the wordsof which the purchaser has noticeI do not think that this destroys the earlier words because it is pretty clear that there must be registration.
§ Mr. Fletcher
The answer may possibly be, and I speak with some hesitation, that there is some virtue to be found in the last few wordson the date of the conveyance by the survivor.It may well be that the material question is the date on which the purchaser has notice. While I support the Amendment and I think that it will be very valuable for all future cases, I am inclined to think at present that it may produce considerable inconvenience when we come to consider Clause 2 and the retrospective part of the Bill.
§ The Solicitor-General
I do not share the anxieties and concern of the hon. Member for Islington, East (Mr. Fletcher). I should have thought that the language of the proviso makes it clear. Always in any complex matter the criticism can be made that in discussing or reciting it one is not being very simple. I do not pretend that this is simple, but I hope that it is clear. What it sets out to say is that where there is no memorandum or petition the purchaser gets a good title under the Bill whatever he may know.
If there has been any severance the joint tenant has to make sure that there is a memorandum of severance. The moral therefore is that if one has severed one must make sure that one has endorsed that severance on the original conveyance. I think that on reflection the House will agree that it is right that that should happen. If a person does not bother to do it or seek to do it and the memorandum does not appear he must suffer the consequences.
With regard to the date, I think the hon. Gentleman's reply to my hon. 813 Friend's intervention was indeed correct. As he says, the words are:… on the date of the conveyance by the survivor.I hope the House will think that this is a sensible way of dealing with the matter of severance which is, indeed, a difficult matter and has caused problems with some of which this Bill seeks to deal. I suggest that the insertion of the proposed proviso in Clause 1 will be of assistance and will make the matter much clearer to a prospective purchaser.
§ Sir B. Janner
I think that by this time the House will be satisfied that the matter has been dealt with fully. There is only one point that I should like to add. The onus of placing a notice of severance on the document rests with the person who has the benefit of that severance, and consequently he could not be heard to complain if the notice were not placed in the manner suggested.
Secondly, I cannot imagine any official receiver failing to do what he is asked to do or what it is assumed he will have done by virtue of this proviso—that is, to register the fact that a receiving order has been made. I hope that will allay any misgivings in the minds of those who have raised the question. We want to make the position clear, instead of persons having to incur a considerable amount of expense in appointing new trustees.
§ Amendment agreed to.
Further Amendment made: In line 11, at end insert:
(2) The foregoing provisions of this section shall apply with the necessary modifications in relation to a conveyance by the personal representatives of the survivor of joint tenants as they apply in relation to a conveyance by such a survivor.—[The Solicitor-General.]