Gore & Snell v Carpenter (1990) 60 P & CR 456

Facts

  • Mr. and Mrs. Carpenter jointly owned several properties.
  • Following marital disagreements, they engaged in negotiations through legal representatives to divide their assets.
  • Draft agreements were exchanged, all marked ‘subject to contract’, detailing proposed divisions of the properties.
  • Some terms were agreed upon, but no finalized or signed agreement was ever reached.
  • Mr. Carpenter passed away before any final agreement was concluded.
  • The question arose whether the negotiations and draft documents sufficed to sever the joint tenancy, which would have prevented Mrs. Carpenter from inheriting Mr. Carpenter’s share automatically.

Issues

  1. Whether negotiations and draft agreements labeled ‘subject to contract’ can sever a joint tenancy in property.
  2. Whether the parties had demonstrated a clear intention to end joint ownership of the properties in the absence of a signed, binding agreement.

Decision

  • The Court of Appeal determined that the drafts and negotiations marked ‘subject to contract’ did not sever the joint tenancy.
  • The phrase ‘subject to contract’ indicated that the parties did not intend to be legally bound until a formal agreement was executed.
  • The joint tenancy remained intact, and Mrs. Carpenter inherited Mr. Carpenter’s share under the right of survivorship.

Legal Principles

  • Severance of joint tenancy requires clear and final agreement; mere negotiations or drafts labeled ‘subject to contract’ do not suffice.
  • The phrase ‘subject to contract’ is a strong indication that parties do not intend legal obligations until a final signed agreement is in place.
  • To end joint ownership by mutual agreement, there must be unequivocal evidence and compliance with formal requirements, typically a signed written agreement.

Conclusion

The case establishes that property owners wishing to sever a joint tenancy must execute a signed, binding agreement; negotiations or drafts explicitly marked ‘subject to contract’ will not sever joint ownership, and the right of survivorship remains unless and until a formal agreement is completed.

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