Advanced Materals Flashcards
What is a mortgage?
A mortgage is a charge over land given in exchange for a loan;
It grants a proprietary interest in the land which takes effect as specific remedies available for default on loan
What are the two types of mortgage in relation to ownership?
Acquisition mortgage: money is lent pre-ownership to buy the property
Mortgage for finance: post-ownership loan
What are the two types of mortgage repayment?
Repayment mortgage: each payment is part interest and part capital
Endowment mortgage: recurring payments are interest-only and whole capital is paid back at the end of the term
What are the formality requirements for a legal mortgage?
Deed (s52 LPA 1925)
Registration (s4 LRA 2002/s27.2.f LRA 2002)
How can an equitable mortgage arise?
Walsh v Lonsdale formality failure + s2 LPMPA compliant contract
Equitable mortgage of equitable interest (s53.1.c LPA)
Deposit of title deeds + s2 LPMPA compliant contract
Fraud/forgery in co-ownership
Proprietary estoppel
Why does it matter whether a mortgage is legal or equitable?
Affects the available remedies
Legal mortgage is automatically binding, while equitable mortgages require protection
Structure for Mortgage Questions
1) Legal or equitable - formalities
2) Clogs or fetters?
3) Unconsionable terms?
4) Lender remedies
5) Mortgagor strategies
6) Undue Influence
7) Priority (if multiple)
Mnemonic device for mortgage question structure
Lucy
Climbs
Up
Lucy’s
Monument
Upwards
Prettily
What are three examples of clogs/fetters?
Options to purchase
Collateral advantages
Postponement of ability to redeem
What is mortgage redemption?
Ability to clear the charge on the land upon repayment of the mortgage
What is a clog/fetter?
Anything that prevents redemption or renders it value-less
Samuel v Jarrah Timber 1904
Facts: A limited company borrowed money, using their stock as a security subject to the lender having the option to purchase the stock at a 60% discount. Court ruled the option to purchase was void, although even the judges seemed to not like their own conclusions.
Significance: Option to purchase as a clog to redemption - commercial scenario.
Reeve v Lisle 1902
Facts: Mortgage of a ship (commercial), and when mortgagor was not in a position to repay, he negotiated more time with an option for the lender to buy the ship (at their discretion) and enter into a business partnership with the mortgagor. When the lender exercised the option, the mortgagor did not comply so they brought an action for specific performance or breach of contract. Question for the court was whether the sale option was a separate transaction (as they were on separate documents) or part of the mortgage. Court ruled sufficient time had passed between the two documents, the conditions of the discussion were different enough, that they were two separate transactions.
Significance: Option to buy not a clog/fetter on redemption if separate transaction/circumstances.
Bradley v Carritt 1903
Facts: Tea company mortgaged shares for a loan, promising the lender that they would always be their broker. Once they paid off the mortgage, the tea company changed their broker, and the lender sued. Was found to be a clog/fetter since it impeded redemption by continuing to bind the mortgagor after paying off the loan.
Significance: Once a mortgage, always a mortgage. Indefinite exclusivity is a clog/fetter.
Biggs v Hoddinott 1898
Facts: Hotel mortgaged to a brewer with an exclusivity agreement during the term of the mortgage. Court found that since it was limited to the term of the mortgage, it did not clog redemption or grant the lender unfair advantage. Both parties negotiated on equal footing.
Significance: Exclusivity agreements can be valid if fair and contained to the length of the mortgage.
Kreglinger v New Patagonia 1914
Facts: Woolbrokers lent money for up to five years, and agreed for full five years the mortgagor would give them first refusal on sheepskins and a cut of sales. The sheepskin deal was found to be collateral to the mortgage and did not affect redemption.
Significance: Example of collateral agreement being upheld
What will the court consider when deciding to strike down a clog/fetter?
The extent to which it was connected to the mortgage
If lender has an additional advantage over a vulnerable borrower
Is the collateral advantage contained to the mortgage term
Commercial vs domestic context
Is the collateral advantage unconscionable
Fairclough v Swan 1912
Facts: Mortgage of a leasehold. Final mortgage payment due six weeks before end of lease. Court found the mortgagor was entitled to redeem earlier, as otherwise redemption would be fettered/valueless.
Significance: Something which makes redemption valueless is a fetter.
Multiservice v Marden 1979
Facts: Mortgage interest linked to value of Swiss franc, which unforeseeably tripled over the term. Court found it was not a clog to redemption as both parties were of equal bargaining power.
Significance: Court won’t rewrite an unreasonable but fair contract.
Paragon Finance v Nash 2002
Facts: Mortgagor fell into interest arrears and lender tried to possess. The mortgage had included a variable interest clause, and mortgagor tried to argue that the rates set were unfair as were not in line with market rates. Court found that the rates were not grossly unfair.
Significance: Variable rates don’t have to match market rates. Bar for grossly unfair is quite high.
What are a lender’s remedies in case of unpaid mortgage?
Possession
Sale
When can a lender take possession?
Technically, any time once the mortgage has begun -s95(4) LPA 1925
In reality, only after a serious default
Four Maids v Dudley Marshall 1957
Facts: A mortgage contained a provision saying that as long as interest payments were up-to-date, the money would not be called in before a certain date. Mortgagor fell into capital (but not interest) arrears and the lender made a summons for possession. By the time the hearing occurred, mortgagor was in arrears of both interest and capital. Court held that the possession was valid but required notice.
Significance: Lender has right of possession any time after execution of mortgage unless a term (express or implied) of the mortgage limits that.
Does a lender need a court order to take possession?
No, but it is recommended
Does a lender need to take possession before selling?
Not strictly, but unusual to sell without possessing first
Power of sale may be __________ ___________ in mortgage deed
Expressly limited
s101 LPA 1925
Gives the mortgagee the power of sale (among others)
When does the power of sale arise (unless limited by mortgage deed)?
When mortgage monies become due
Payne v Cardiff 1932
Facts: Leasehold became charged with a fee similar to a mortgage. Once instalments became due, the lender was entitled to sell the premises.
Significance: Power of sale is exercisable when an instalment of the mortgage money becomes due.
How to determine when mortgage monies become due
Either legal date for redemption has passed (6 months into term) OR
If repayment mortgage, payment of capital has become due
When is the power of sale exercisable?
Any of the following (s103 LPA 1925):
3 months default on capital following notice to repay
Interest unpaid for 2 months
Other breach of mortgage terms
s103 LPA 1925
Stipulates when power of sale is exercisable
What happens if a lender exercises their power of sale and sells the land for more than the remaining loan amount?
Excess is returned to the mortgagor (S105 LPA 1925)
s105 LPA 1925
Money arising from mortgagee’s sale goes first to pay for costs of sale, then to discharge mortgage, then any residual goes to mortgagor
Can the lender accept any offer on the property when exercising power of sale?
No - must obtain a proper price/best price reasonably obtainable
If house prices are going up, is the lender allowed to wait to sell?
Yes - timing of sale is up to lender
What can a mortgagor do to fight possession?
If residential, can apply for postponement under s36 Administration of Justice Act 1970
Can request postponement to allow mortgagor to sell on their own
National & Provincial Building Society v Lloyd 1996
Facts: Commercial context. Estate agent defaulted on interest-only/endowment mortgage, but appealed against the order for possession with an affidavit stating he intended to sell the properties and pay off the debt within 12 months. Was granted a suspension, lender appealed. Court ruled that their discretion to suspend to allow mortgagor to sell did not require the sale to be in a short time, only a “reasonable period”, determined on the facts of each case. However, the affidavit was found not to be enough evidence that the mortgagor would be able to pay back the sums, as it was only evidence of intent to put the property on the market.
Significance: No hard limits on when you need to be able to pay back the mortgage re: postponing possession, but do need clear evidence.
C&G v Krausz 1997
Facts: Possession was delayed four times with new mortgage payment terms, and mortgagor defaulted every time. Fifth warrant for possession fell due and mortgagor had turned down an offer on the house for £65k, believing it to be worth £90k (debt was about £83k). Tried to suspend again saying he’d found a buyer. Court found that they could suspend the order again but it looked like funds were insufficient to discharge the mortgage debt.
Significance: Order for possession won’t be suspended if mortgagor’s sale is unlikely to discharge the debt.
What can a mortgagor do to fight power of sale?
Apply to sell themselves (s91 LPA 1925)
s91 LPA 1925
Allows mortgagor to apply to sell themselves
If there are multiple legal mortgages on a property, how do they rank?
By date of registration
If there are multiple equitable mortgages on a property, how do they rank?
By date of creation
What is security of tenure?
Term used to describe the statutory protections afforded to tenants when a lease ends allowing them to remain in possession until removed by court order
What is a lease (two levels of operation)?
A proprietary right/estate in land - s1.1.b LPA 1925
A contractual relationship between landlord and tenant
What is the statutory definition of a lease?
Term of years absolute
Auth: s1(1)(b) LPA 1925
What is the statutory definition of a “term of years absolute”?
A term of years (including one year or a fraction of a year)
Either in possession or in reversion
Whether or not at rent
Subject or not to another legal estate
Auth: s205(1)(xxvii) LPA 1925
s205(1)(xxvii) LPA 1925
Defines a term of years absolute
What does “in possession” mean?
Tenant physically possesses land
What does “in reversion” mean?
Land is occupied by another, e.g. subtenant
What are the formality requirements for a lease over 3 years but not more than 7 years?
A Deed is required
What are the formality requirements for a lease over 7 years?
Deed (s52 LPA 1925)
Substantive registration (s27(1) LRA 2002)
What are the required formalities for assignment of a legal lease?
Deed (s52 LPA 1925)
If 7+ years: Substantive registration (s27(1) LRA 2002) (or s4 LRA 2002 if lease unregistered with 7+ years to run)
If you are the leaseholder of an informal short lease (less than 3 years) and you assign it, do you need a Deed?
Yes
Auth: Crago v Julian
Crago v Julian 1992
Facts: Married couple lived in a flat let on a weekly tenancy. Couple divorced, verbally agreed to transfer tenancy to wife. Landlord then served notice to quit on wife, which was valid because tenancy had not been transferred by Deed.
Significance: Assignment of a weekly tenancy must be by Deed.
What are the required formalities for assignment of an equitable lease?
In writing, signed by the assignor
Auth: s53(1)(c) LPA 1925
What are the required formalities for creation of a sublease?
Same as creation of a lease
What is the authority for security of tenure for business leases created after 15 Jan 1989?
Landlord and Tenant Act 1954
Can the Landlord and Tenant Act (LTA) be excluded in the terms of a lease?
Yes
What is a covenant?
A promise made by one party to another, which is a binding obligation
_____________ is only permitted if there is an express clause in the lease saying so
Forfeiture
What is forfeiture?
A landlord’s right to terminate the lease for breach
Can covenants be implied by law?
Yes
What tenant covenants can be implied by statute?
Obligation to maintain the property in a “tenant-like manner”
s11(2) LTA 1985
Lessee must use the premises in a tenant-like manner
Warren v Keen 1954
Facts: Landlord tried to recover from tenant costs of repairing damp damage, as mistakenly believed tenants had an implied covenant to keep the flat “wind and water tight”. Court found the tenant’s only implied covenant was to use and maintain property in a tenant-like manner, and the damage was from fair wear and tear, so landlord could not recover the costs.
Significance: tenant must maintain property in a tenant-like manner (“residual tenant liability”).
What is assignment of the freehold reversion?
When the landlord sells the freehold interest to another
What are the formalities for an assignment of the freehold reversion?
Deed of Transfer (TR1, s52 LPA 1925) and registration (s27 LRA 2002)
What is the technical name for when the landlord sells the freehold interest to another?
Assignment of the freehold reversion
What is an assignment of the lease?
When the tenant sells the leasehold interest to another
What are the formalities for an assignment of the lease?
Deed of assignment (s52 LPA 1925)
Registration if lease is registered (s27 LRA 2002) or if lease is unregistered but more than 7 years remaining (s4 LRA 2002)
When does an assignment of a lease need to be registered?
If the lease is already registered (s27 LRA 2002) OR
Lease is unregistered but has more than 7 years remaining (s4 LRA 2002)
What is an old lease?
Lease created before 1st January 1996
What is a new lease?
Lease created on or after 1st Jan 1996
What is the default position for old leases and transfer of covenants post-assignment?
Original parties of the lease remain bound based on privity of contract
How can the original tenant of an old lease attempt to reclaim money from an assignee tenant?
1) Indemnity (express or implied) or
2) Common law rule in Moule v Garrett
Moule v Garrett 1872
Facts: Claimant assigned a lease to someone, who assigned it further to the defendants. Both assignment vehicles included express covenants from assignee to indemnify assignor. Current tenant breached covenant to repair, landlord recovered damages from original tenant, question was whether you could chain the indemnities. Court said yes.
Significance: Assignee of a lease (under old law) is under an obligation to indemnify the original lessee against breaches of covenant.
What does it mean for a covenant to “touch and concern the land”?
Affects landlord in their capacity as a landlord and affects a tenant in their capacity as tenant.
s141 LPA 1925
Makes the collection of rent and related forfeiture/re-entry enforceable
Makes the above enforceable by the owner of the reversion, even if the right arose prior to the transfer
S142 LPA 1925
Lessor’s covenants with reference to the subject-matter of the lease run with the reversion
What does LTCA stand for?
Landlord & Tenant (Covenants) Act 1995
What is a s17 notice?
A notice of intention to recover unpaid rent, under s17 LTCA 1995
When must a s17 notice be issued?
Within 6 months of charge becoming due
If issuing a s17 notice to an old tenant, then will the rent be the same or greater than they paid?
If there was a contractual price variation in place when they were a tenant, then that will apply
If the rent has changed unforeseeably, then the change does not apply (s18 LTCA 1995)
If a former tenant is served a valid s17 notice then they are entitled to ask for an _________ ___________
Overriding lease
Auth: s19 LTCA 1995
s17 LTCA 1995
Governs notices to former tenants for rent recovery/recovery of any fixed charge unpaid by current tenant
s18 LTCA 1995
Where former tenants can be served with a s17 notice, they are not liable to pay for any unforeseeable variation in the charge
s19 LTCA 1995
Gives a former tenant the right, after having been served a s17 notice, to an overriding lease
What is an overriding lease?
Makes the former tenant a sub-landlord of the headlease, and current tenant is a sub-tenant.
Allows former tenant to collect rent directly and/or enact forfeiture
Structure for leasehold covenant questions
1) Old law or new law
2) Breach of landlord covenant: has burden passed to new landlord? Has benefit passed to new tenant? Remedy?
3) Breach of tenant covenants: has burden passed to new tenant? Has benefit passed to new landlord? Remedy?
Which remedies are available to a landlord for breach of tenant covenants?
1) Damages (statutory limitations under s18 LTA 1927 and the Leasehold Property (Repairs) Act 1938)
2) Specific performance (unusual)
3) Injunction
4) Debt action for unpaid rent
5) Commercial Rent Arrears Recovery
6) Forfeiture
What is forfeiture?
A legal right in land of the landlord’s arising expressly from the legal lease
s1(2)(e ) LPA 1925
Right of entry is a legal right
Forfeiture is _________ _________ _____ an equitable lease
Automatically implied into
Auth: Shiloh Spinners v Harding 1973
Shiloh Spinners v Harding 1973
Facts: Leasehold of a mill was assigned, including several covenants around protection of the premises. Tenant demolished part of the premises, breaching covenant. Landlord sought possession, tenant disputed the right of re-entry/forfeiture. Court held that forfeiture was exercisable in equitable leases/assignments.
Significance: Forfeiture rights are automatically implied into equitable leases.
What is the process for forfeiture?
1) Check for forfeiture clause
2) Check that a breach has taken place
3) Ensure right to forfeit has not been waived
4) Follow formal requirements
5) Forfeit using appropriate method
6) Consider position re: relief
What can happen if proper forfeiture process is not followed?
The landlord can be liable for trespass
How does a landlord waive the right to forfeit?
Landlord is aware of breach AND
Landlord (or agent) performs some unequivocal act recognising continued existence of lease (e.g. accepting rent)
Central Estates (Belgravia) v Woolgar 1972
Facts: Tenant was running a brothel, breached an immorality clause. Landlord knew but the agent didn’t, agent requested next round of rent, thus affirming the lease and waiving the forfeiture right.
Significance: Example of waiver of forfeiture right.
London & County v Wilfred Sportsman 1971
Facts: Overdue rent on adjoining flats, re-entry rights aros while the reversion was changing hands.
Significance: Assignee landlord can forfeit even if right of re-entry arose prior to assignment.
What are the formality requirements for forfeiture due to rent breach?
Lease typically excludes the need for a formal demand
No formality requirements if 6 or more months of arrears
Otherwise: s146 LPA 1925 notice
s146 LPA 1925
Governs right of re-entry/forfeiture and notice requirements
What are the requirements of a s146 LPA 1925 notice?
Must specify the breach
Must allow a reasonable time after issue of notice to remedy the breach
If seeking compensation, must request it in the notice
What is a reasonable time to remedy?
For an irremediable breach: 14 days’ notice
For a remediable breach, depends on nature, generally 3-6 months
Rugby School v Tannahill 1935
Facts: Tenant breached covenant not to use the premises for illegal/immoral purposes (was operating a brothel). Subsequent notice to quit did not require her to remedy the breach or compensate in money, since it was a breach incapable of remedy.
Significance: Negative covenants may not be capable of remedy (judges dissented on whether this was an always or a sometimes). If incapable of remedy, then the notice to quit does not need to request remedy to be valid.
Patel v K&J Restaurants 2010
Facts: Lease included covenants against use of premises for illegal/immoral purposes, and prohibiting the tenant from sharing occupation. Police informed tenant that one of the flats was being used as a brothel, but tenant took no action. Landlord then tried to forfeit for breach of covenant, but tenant then evicted the relevant sub-tenant. Court ruled that while there had been a breach of covenant, relief from forfeiture could be granted based on proportionality.
Significance: Relief from forfeiture, morality clauses
What happens if correct s146 procedure is not followed?
Proceedings are invalidated
What are the methods of forfeiture?
1) Court action for possession (preferred)
2) Peaceable re-entry
Billson v Residential Apartments 1992
Facts: Tenants breached covenant by altering the property without consent.
Significance: Tenants can still apply for relief from forfeiture after a landlord peaceably re-enters, provided landlord did not have a court order.
When is peaceable re-entry not an option?
Occupied residential properties
s7 - Protection from Eviction Act 1977
s6 Criminal Law Act 1977
Using or threatening violence to secure entry to a premises (without lawful authority) is a criminal offence
When might a tenant be granted relief from forfeiture due to rent breaches?
If it is clear that the tenant can pay, they will be granted relief:
Up until date of a court order (automatic)
Up to 6 months after court order/peaceable re-entry (discretionary)
s138/139 County Courts Act 1984
Governs court order for peaceable re-entry and relief from peaceable re-entry
When might a tenant be granted relief from forfeiture due to non-rent breaches?
Can apply up to date of execution of s146 notice (by peaceable re-entry or court order)
No rights after court order
After peaceable re-entry, can apply within a reasonable time
Ropemaker v Newhaven
Facts: Lease included covenant against using premises for illegal/immoral purposes, or any purpose apart from a high class restaurant/night-club. Found there was overwhelming evidence of prostitution and the managers of the subleases were aware of it. Head landlord tried to forfeit head lease, but headtenant was granted relief from forfeiture due to the value of the lease, the disproportionate loss forfeiture would cause, the fact that the immoral use had ended and the subtenant would not be renewed, and nothing they did would change the stigma attached to the club. Also head tenant’s sole director was in poor health.
Significance: Court granted relief for breach of immoral use covenant
Marylebone v Tesco
Facts: Covenant restricted the use of premises to grocers, wine, spirit, and beer merchants. Breach of covenant claimed when Tesco started selling newspapers, magazines, etc. Tried to argue relief from forfeiture, was not granted since it was a clear breach, and had wilfully traded in breach of covenant for over a year. Court also considered that it would be difficult to police the covenant against them in future.
Significance: Relief from forfeiture is a discretionary remedy - court considers many factors.
What is joint tenancy?
When multiple parties (up to 4) are treated as a single owner of the whole property (no shares)
What is required for joint tenancy?
Four unities (possession, interest, time, title)
Authority: AG Securities v Vaughan
What is the right of survivorship?
If one joint tenant dies, their interest dies with them rather than being passed through will/intestacy
Auth: Re Caines deceased
Does severance affect both legal title and equitable title?
No - legal title can only be joint tenancy. Severance only operates on equitable title.
s1(6) LPA 1925
Legal estate cannot exist in a share of land - i.e. legal title must be joint tenancy
s36(2) LPA 1925
Legal interest cannot be severed
Equitable interest can be severed by notice in writing
What is the result of severance?
Equal shares per person as tenants in common (beneficial interest)
Legal title remains joint tenancy
Does severance require the elimination of any joint tenancy?
No, can operate severance on one party and leave remaining parties in JT
Goodman v Gallant 1986
Facts: Couple purchased a house in sole name of husband, but was agreed between them that wife would have a half share in the beneficial interest. Couple separated, husband transferred the freehold to wife and new partner as beneficial joint tenants. Dispute over whether wife now owned 3/4s of beneficial interest (her original half plus half husband’s share). Court found that when the freehold was transferred, she was named as joint tenant with new partner, so she had half beneficial interest.
Significance: Where a conveyance into joint names expressly declares the parties as joint tenants, then on severance a tenancy in common of equal shares is created.
What are the methods of severance?
Written notice
Other acts/things
Mutual agreement
Mutual conduct
Physical division of land
What are the requirements for written notice of severance?
Irrevocable, immediate intention to sever (Re Draper’s Conveyance)
Correctly served on all beneficial JTs (Kinch v Bullard)
Re Draper’s Conveyance
Facts: Husband and wife bought house as joint tenants, later divorced. Wife applied for order of sale, with proceeds to be divided equally between herself and husband. Order was granted but husband died while still living at the house. Question was whether the wife had severed - her application for order of sale was found to be an irrevocable, immediate intention to sever.
Significance: Example of severance by written notice.
Harris v Goddard 1983
Facts: Married couple getting divorced. Application for divorce included hoping for a transfer or settlement of the property. Husband was killed in a car accident before the divorce was finalised. Question was whether severance had occurred - court said severance had not occurred as the wording was not immediate enough.
Significance: Written severance requires immediacy.
Kinch v Bullard 1999
Facts: Husband and wife, wife was considering divorce so sent a notice of severance by post. Husband was admitted to hospital before receiving it, and wife changed her mind and destroyed it. Court found that notice had been validly served under s196 LPA and was irrevocable.
Significance: Severance is irrevocable.
s196 LPA 1925
How to serve a notice (e.g. to place of last abode, etc)
What other acts/things can amount to severance?
Unilateral act operating on own share
Total alienation - give interest to another
Patrial alienation (e.g. mortgage)
Involuntary alienation (e.g. bankruptcy)
Specifically enforceable contract to alienate
Maybe - commencement of litigation
Williams v Hensman 1862
Facts: Money on trust for 8 children was invested. One child asked for an advance on their share, the other 7 indemnified the trustee against claims for any shortfall from the advance. Had the effect of severing the joint tenancy into tenancy-in-common.
Significance: Example of severance through “other acts”
First National Securities v Hegerty 1985
Facts: Husband and wife in joint tenancy. Husband took out a mortgage on the home, forging wife’s signature. Husband left the country, lender pursued charge over house, wife petitioned for divorce. Court found that applying for the mortgage was a unilateral act upon husband’s own share, and so severance occurred then. Order for sale was permitted, but wife was entitled to half.
Significance: Unilateral act (of fraud) as severance.
Re Gorman 1990
Facts: Married couple, joint tenancy. Husband became bankrupt, lender began proceedings. Wife payed arrears and continued to pay instalments. Later, husband applied for an order for sale, contending that they had severed and were tenants in common. Judge ruled that wife was sole beneficial owner. Husband successfully appealed.
Significance: Bankruptcy is involuntary alienation.
Nielson Jones v Fedden
Facts: Married couple break up, agree to sell the marital home so husband can buy a smaller house. Wife signed a memo authorising sale and proceeds from it to be used towards a new house. Both corresponded about their respective share of proceeds from the sale. Husband died before sale completed, wife sought declaration that she was solely entitled to the house by survivorship. Court agreed that the memo did not sever, and conduct did not indicate final severance.
Significance: Unilateral declaration of intention does not sever a joint tenancy.
Burgess v Rawnsley
Facts: Man and a woman bought a house together as JTs. Man bought it intending to marry the woman, the woman thought they were just going to be roommates. Never moved in together, agreed verbally that man would buy out woman. Woman backed out, man died, and woman tried to claim house by survivorship. Court ruled agreement to buy her out was severance.
Significance: An oral agreement of one JT selling his interest to the other JT is severance, but the sale agreement is not enforceable.
Gore and Snell v Carpenter 1990
Facts: Husband and wife divorcing, husband committed suicide. While negotiating divorce, had agreed one house would go to wife and one to husband but not conclusive. Husband never served severance notices, despite lawyer’s advice. Court found that no severance had occurred, as agreements between them were not final, and severance can only be effected by unilateral dealings with a third party.
Significance: Intention to sever is not severance. Negotiations are not severance until final. Severance by dealing only occurs with third party, or other JT if finalised.
Davis v Smith 2011
Facts: Married couple negotiating divorce with solicitors. Agreed to sell the house and divide mostly equally, taking into account an endowment policy. Both were advised to serve notices of severance, but neither had when one of the couple died. Judge found that the parties had a common intention to sell the house and divide equally, they knew they were both advised by solicitors, and knew that they would be dividing assets equally.
Significance: Severance by mutual conduct. Court should concentrate on words, actions, and knowledge between the parties, not between a party and their solicitor.
Greenfield v Greenfield
Facts: Brothers bought freehold as joint tenants and converted into two maisonettes. Court found that conversion and separate occupation was not inconsistent with joint tenancy. Burden to prove severance was on the plaintiff, and she failed to do so.
Significance: Separation of land can be severance but depends on whether it’s inconsistent with joint tenancy.
What does TOLATA stand for?
Trusts of Land and Appointment of Trustees Act 1996
What is an ordinary dispute?
A dispute over joint tenancy where no parties are bankrupt
s14 TOLATA
Allows trustees to apply for court order
s15 TOLATA
Lists matters which court will consider when deciding application for court order
When applying s15 TOLATA, whose interests do courts generally favour?
Secured creditors
Jones v Challenger
Facts: Married couple getting divorced. Severed interest, so were tenants in common. Wife moved out, husband stayed in house. Wife applied for an order for sale - was granted since the trust no longer served its purpose (matrimonial home). Wife should be allowed to realise her half of the investment (otherwise was receiving no benefit).
Significance: One of two trustees for sale can insist on the execution of the trust for sale if that will not defeat the purpose of the trust and he is a person whose voice should be allowed to prevail.
Re Ever’s Trust
Facts: Man and common law wife bought a house as JTs. They had one child together and two children from previous relationship lived with them. When splitting, they failed to agree on a sale. When deciding on the order for sale, court considered the interests of the children as the underlying purpose of the trust, and said it depends on the circumstances at hand.
Significance: Children’s interest considered as part of purpose of trust.
Mortgage Corporation v Shaire
Facts: Lender applied for possession due to mortgage arrears, but children still lived in the house. Court reasoned that post-TOLATA, interests of children were a factor in deciding the order.
Significance: Example of court being nice to children re: mortgage/JT dispute.
Fred Perry v Genis
Facts: Husband sold counterfeit goods, resulting in claimant getting a charge over husband’s property. Claimant applied for order for sale, despite the fact that husband, his wife, and children were living in the house. Court considered whether the interest of children outweighed interest of secured creditor, and decided that since the creditor was pursuing their legitimate interest after husband’s wrongdoing, that was weighted more heavily.
Significance: Example of court being mean to children re: mortgage/JT dispute.
What is the authority for joint tenancy disputes in bankruptcy?
Insolvency Act 1986
When applying for a court ordered sale under the Insolvency Act, how does the first year of bankruptcy differ from later years?
First year, court considers the interest of creditors, conduct of spouse, needs of children, etc
After first year, the interest of creditors outweighs everything unless very exceptional circumstances
Barca v Mears
Facts: Bankrupt husband, him and his wife had a child with special needs. Creditor trying to make an order for possession. Tried to argue extraordinary circumstances and breach of ECHR. Court still prioritized creditor.
Significance: We all suffer under capitalism.
Re Bremner 1999
Facts: Husband was bankrupt and had six months to live. Wife challenged order for sale in order to care for husband. Court found they were exceptional circumstances under the Insolvency Act.
Significance: Capitalism can be delayed but not stopped.
Other than severance, how to terminate co-ownership?
Sale
Partitioning of land
Merger
Survivorship
Structure for joint tenancy questions?
- Explain imposition of trust and deal with formalities
- On the initial acquisition of the property, who has legal title and who has equitable title, and how?
- Work chronologically through the question, looking for severance and survivorship
- Has a dispute arisen? TOLATA vs Insolvency Act
- Third party purchaser/overreaching?
What is a positive covenant?
A covenant requiring action - must do something
What is a negative covenant?
A covenant prohibiting something - cannot do something
Is a freehold covenant an equitable or legal interest in land?
Equitable
What are the formalities for freehold covenants?
Signed writing (s53(1)(a) LPA 1925) and/or Deed
What is a dominant tenement?
The tenement benefitted by/made more valuable by the covenant
What is the servient tenement?
The tenement made less valuable/serving the covenant
If a freehold covenant is negative, do we use law or equity?
Equity
If a freehold covenant is positive, do we use law or equity?
Law
Tulk v Moxhay 1848
Facts: Covenant to keep free the land in Leicester Square. Phrased positively but really a negative covenant not to build, was deemed binding on successors.
Significance: Authority for burden of negative covenants passing in equity.
What is required for the burden of a freehold covenant to pass at equity?
Must be a negative covenant
Must accommodate the dominant tenement
Original parties must have intended the burden to run
Must follow applicable notice rules for registered or unregistered land
What does it mean to “accommodate the dominant tenement”?
Must benefit the land
Must touch and concern the dominant land
Must have sufficient proximity
What are the notice rules for a freehold covenant on registered land?
Notice on charges register to bind purchasers (s32 LRA 200)
Otherwise, not bound and cannot be an overriding interest
What are the notice rules for a freehold covenant on unregistered land?
Requires a class D(ii) land charge to bind third party purchaser
P&A Swift v CES 1989
Facts: Parent company guaranteed subsidiary’s lease, and was liable for outstanding rent. Was found to touch and concern the land.
Significance: Covenant must touch and concern the dominant land for the burden to pass at equity. Rent touches and concerns.
Cosmichome v Southampton CC 2013
Facts: Land formerly owned by BBC and was subject to a covenant confining use of the land to BBC broadcasting, but the restriction could be lifted on payment of a development charge. Also contained right of pre-emption, where local authority had first refusal on buyback. BBC sold the land, notified the council, who did not respond. Court found the covenant did not pass, as it did not benefit the dominant/adjoining land.
Significance: Covenant must accommodate the dominant tenement for burden to pass at equity.
Bailey v Stephens (1862)
Facts: Someone cut down a tree they weren’t supposed to.
Significance: Dominant and servient tenements (for easements and covenants) must be proximate to one another.
s79 LPA 1925
Covenants relating to the land will bind successors in title, if covenant was made after commencement of the LPA 1925
Implies the intention of original parties to allow the burden to run
Morrells of Oxford v Oxford United 2000
Facts: Oxford United FC were purchasing land that once belonged to a pub, and as such was subject to a covenant prohibiting licenses premises within half a mile of the pub. The covenant did not include words expressly binding successors, but other covenants in the same agreement did. Court found that the absence of words in this covenant, where present in other covenants, conveyed an intention not to bind successors.
Significance: s79 LPA binds successors unless contrary intention expressed. Contrary intention does not need to be explicit.
What is required for the benefit of a freehold covenant to pass at equity?
Must touch and concern the land
Successor covenantee must have legal or equitable estate in the land of the original covenantee
Must pass through annexation, assignment, or scheme of development
What are the types of annexation of freehold covenant?
Express annexation - words making it clear the benefit passes
Implied annexation - implied by court
Statutory annexation - s78 LPA 1925
Federated Homes v Mill Lodge Properties
Facts: Two parcels of land subject to an original covenant that no more than 300 houses could be built on them, ended up being owned by same company. One had successive chains of assignment, the other did not. Court found that since the covenant touched and concerned the land, it ran with it and was annexed to every part of the land.
Significance: A restrictive covenant which touches and concerns the land annexes the benefit of the covenant to the covenantee’s land.
Roake v Chadha 1984
Facts: Language of the covenant specifically said that the benefit did not pass unless expressly assigned. Court found that complied with s78 LPA 1925 - the Act only implies where silent.
Significance: s78 LPA annexes covenant to land unless clear intention otherwise
Crest Nicholson v McAllister 2004
Facts: Home owner tried to enforce a covenant. Court found that the dominant land was not sufficiently identifiable from the original conveyance, so the covenant had not annexed to the land.
Significance: Dominant tenement must be identifiable in the originating Deed.
How does assignment of a freehold covenant work?
Assignment does not glue the covenant to the land
The covenant must be assigned at each stage of the chain of successive assignments
Miles v Easter
Facts: Land with a covenant was split up . Court found no evidence that the benefit had been either assigned or annexed to the land.
Significance: Authority for chain of assignment
What are the requires for assignment of a freehold covenant?
The benefit of the covenant must be assigned each and every time the land is sold
Benefitted land must be properly identifiable
Assignment must coincide with conveyance
Must comply with s53 LPA 1925
What is a scheme of development?
Where a single vendor laid a housing estate into plots, all subject to similar covenants
What are the requirements for a scheme of development to pass benefit of freehold covenants?
Restrictions must intend to benefit all land sold
Area of scheme must be clearly defined
Claimant and defendant derive title from common vendor
Elliston v Reacher 1908
Facts: Scheme of development with covenant not to use as a hotel. Covenant was found to run with the land.
Significance: Authority for scheme of development covenants.
What are the remedies for breach of freehold covenant?
Injunction
Specific performance (if positive)
Damages
Declaration/modification by court
Wrotham Park v Parkside 1974
Facts: Land sold to a developer subject to a covenant requiring prior approval of layout. Broke the covenant, built houses, covenantee sued. Covenant was found to be enforceable, but injunction (i.e. demolition) would be unfair, so damages awarded instead. Damages equated to a reasonable sum to relax the covenant, so 5% of profits.
Significance: Damages in lieu.
What are the differences in remedy for freehold covenants between common law and equity?
Common law: damages more likely
Equity: Court is more discretionary
How can a freehold covenant be extinguished?
Express agreement
Implied agreement (long usage)
Common ownership
When would a court modify or discharge a negative freehold covenant?
If the covenant is obsolete, impeding reasonable use, or the person with the benefit would suffer no loss
Does the burden of a positive freehold covenant transfer at common law?
Generally, no, unless a workaround is in use
Austerberry v Oldham 1885
Facts: A road was subject to a covenant of repair. Was later declared a street, which moves the maintenance responsibility to the inhabitants. Court found the covenantee could not enforce the covenant - does not pass the burden of positive covenants.
Significance: Positive covenants don’t typically bind successors.
What are the workarounds to pass the burden of a positive freehold covenant in common law?
Sue the original covenantor under s79 LPA 1925
Chain of indemnity covenants
Forced re-covenant
Enlarge a long lease into freehold
Mutual benefit and burden rule
What is a forced re-covenant?
Servient land cannot be sold unless the dominant land consents, with the condition that new servient owner re-covenants
Becomes a contractual right of enforcement
s40 LRA 2002
Allows entry onto land registry restrictions relating to dispositions of registered land
s153 LPA 1925
Allows a lease with at least 200 years left to run (with no rent) to be converted into a freehold
What does it mean to enlarge a long lease into a freehold?
Leases of at least 300 years, with at least 200 years left (with no rent) can be converted into a freehold
What is the mutual benefit and burden rule?
Allows enforcement of a payment obligation for a connected benefit
What is required for the mutual benefit and burden rule to work?
1) Correlated benefit and burden
2) Hypothetical element of choice
3) Benefit and burden were conferred in or by same transaction
Halsall v Brizell 1957
Facts: Buyers of plots covenanted to contribute to the cost of repairs of sewers used by owners of all the plots. Was found to be binding.
Significance: Mutual benefit and burden rule: burden of positive covenants will pass if associated with a benefit, and would be unfair for successor to reap benefit without burden.
How does the benefit of a positive freehold covenant pass at common law?
Express assignment (s136 LPA 1925)
Implied assignment (P&A Swift v CES 1989)
s136 LPA 1925
Allows assignment of covenants in writing
What is required for implied assignment of a positive freehold covenant to work?
Must touch and concern the land
Original parties must have intended the benefit to run
At time of covenant, covenantee had legal estate
At time of enforcement, successor holds a legal estate
Potentially, dominant land needs to be clearly identified
Smith and Snipes Hall Farm v River Douglas 1949
Facts: Land prone to flooding, covenantor promised to do some work to prevent flooding and maintain it for all of time. Was found to touch and concern the land, with intent to bind future successors. Note: the benefit passed, but the burden (the covenantor) remained the same party throughout.
Significance: Example of implied assignment of benefit (“for all time”).
Structure for freehold covenant questions
- Introduction – define land (dom v serv), parties (cov and cov), formalities for creation, explain issue
- If negative covenant: do the burden and benefit each pass in equity?
- If positive covenant: do the burden and benefit each pass in common law?
- Conclude – remedies
- Any other issues (e.g. discharge, modification)
Facts: A limited company borrowed money, using their stock as a security subject to the lender having the option to purchase the stock at a 60% discount. Court ruled the option to purchase was void, although even the judges seemed to not like their own conclusions.
Significance: Option to purchase as a clog to redemption - commercial scenario.
Samuel v Jarrah Timber 1904
Facts: Mortgage of a ship (commercial), and when mortgagor was not in a position to repay, he negotiated more time with an option for the lender to buy the ship (at their discretion) and enter into a business partnership with the mortgagor. When the lender exercised the option, the mortgagor did not comply so they brought an action for specific performance or breach of contract. Question for the court was whether the sale option was a separate transaction (as they were on separate documents) or part of the mortgage. Court ruled sufficient time had passed between the two documents, the conditions of the discussion were different enough, that they were two separate transactions.
Significance: Option to buy not a clog/fetter on redemption if separate transaction/circumstances.
Reeve v Lisle 1902
Facts: Tea company mortgaged shares for a loan, promising the lender that they would always be their broker. Once they paid off the mortgage, the tea company changed their broker, and the lender sued. Was found to be a clog/fetter since it impeded redemption by continuing to bind the mortgagor after paying off the loan.
Significance: Once a mortgage, always a mortgage. Indefinite exclusivity is a clog/fetter.
Bradley v Carritt 1903
Facts: Hotel mortgaged to a brewer with an exclusivity agreement during the term of the mortgage. Court found that since it was limited to the term of the mortgage, it did not clog redemption or grant the lender unfair advantage. Both parties negotiated on equal footing.
Significance: Exclusivity agreements can be valid if fair and contained to the length of the mortgage.
Biggs v Hoddinott 1898
Facts: Woolbrokers lent money for up to five years, and agreed for full five years the mortgagor would give them first refusal on sheepskins and a cut of sales. The sheepskin deal was found to be collateral to the mortgage and did not affect redemption.
Significance: Example of collateral agreement being upheld
Kreglinger v New Patagonia 1914
Facts: Mortgage of a leasehold. Final mortgage payment due six weeks before end of lease. Court found the mortgagor was entitled to redeem earlier, as otherwise redemption would be fettered/valueless.
Significance: Something which makes redemption valueless is a fetter.
Fairclough v Swan 1912
Facts: Mortgage interest linked to value of Swiss franc, which unforeseeably tripled over the term. Court found it was not a clog to redemption as both parties were of equal bargaining power.
Significance: Court won’t rewrite an unreasonable but fair contract.
Multiservice v Marden 1979
Facts: Mortgagor fell into interest arrears and lender tried to possess. The mortgage had included a variable interest clause, and mortgagor tried to argue that the rates set were unfair as were not in line with market rates. Court found that the rates were not grossly unfair.
Significance: Variable rates don’t have to match market rates. Bar for grossly unfair is quite high.
Paragon Finance v Nash 2002
Facts: A mortgage contained a provision saying that as long as interest payments were up-to-date, the money would not be called in before a certain date. Mortgagor fell into capital (but not interest) arrears and the lender made a summons for possession. By the time the hearing occurred, mortgagor was in arrears of both interest and capital. Court held that the possession was valid but required notice.
Significance: Lender has right of possession any time after execution of mortgage unless a term (express or implied) of the mortgage limits that.
Four Maids v Dudley Marshall 1957
Gives the mortgagee the power of sale (among others)
s101 LPA 1925
Facts: Leasehold became charged with a fee similar to a mortgage. Once instalments became due, the lender was entitled to sell the premises.
Significance: Power of sale is exercisable when an instalment of the mortgage money becomes due.
Payne v Cardiff 1932
Stipulates when power of sale is exercisable
s103 LPA 1925
Money arising from mortgagee’s sale goes first to pay for costs of sale, then to discharge mortgage, then any residual goes to mortgagor
s105 LPA 1925
Facts: Commercial context. Estate agent defaulted on interest-only/endowment mortgage, but appealed against the order for possession with an affidavit stating he intended to sell the properties and pay off the debt within 12 months. Was granted a suspension, lender appealed. Court ruled that their discretion to suspend to allow mortgagor to sell did not require the sale to be in a short time, only a “reasonable period”, determined on the facts of each case. However, the affidavit was found not to be enough evidence that the mortgagor would be able to pay back the sums, as it was only evidence of intent to put the property on the market.
Significance: No hard limits on when you need to be able to pay back the mortgage re: postponing possession, but do need clear evidence.
National & Provincial Building Society v Lloyd 1996
Facts: Possession was delayed four times with new mortgage payment terms, and mortgagor defaulted every time. Fifth warrant for possession fell due and mortgagor had turned down an offer on the house for £65k, believing it to be worth £90k (debt was about £83k). Tried to suspend again saying he’d found a buyer. Court found that they could suspend the order again but it looked like funds were insufficient to discharge the mortgage debt.
Significance: Order for possession won’t be suspended if mortgagor’s sale is unlikely to discharge the debt.
C&G v Krausz 1997
Allows mortgagor to apply to sell themselves
s91 LPA 1925
Facts: Married couple lived in a flat let on a weekly tenancy. Couple divorced, verbally agreed to transfer tenancy to wife. Landlord then served notice to quit on wife, which was valid because tenancy had not been transferred by Deed.
Significance: Assignment of a weekly tenancy must be by Deed.
Crago v Julian 1992
Lessee must use the premises in a tenant-like manner
s11(2) LTA 1985
Facts: Landlord tried to recover from tenant costs of repairing damp damage, as mistakenly believed tenants had an implied covenant to keep the flat “wind and water tight”. Court found the tenant’s only implied covenant was to use and maintain property in a tenant-like manner, and the damage was from fair wear and tear, so landlord could not recover the costs.
Significance: tenant must maintain property in a tenant-like manner (“residual tenant liability”).
Warren v Keen 1954
Facts: Claimant assigned a lease to someone, who assigned it further to the defendants. Both assignment vehicles included express covenants from assignee to indemnify assignor. Current tenant breached covenant to repair, landlord recovered damages from original tenant, question was whether you could chain the indemnities. Court said yes.
Significance: Assignee of a lease (under old law) is under an obligation to indemnify the original lessee against breaches of covenant.
Moule v Garrett 1872
Makes the collection of rent and related forfeiture/re-entry enforceable
Makes the above enforceable by the owner of the reversion, even if the right arose prior to the transfer
s141 LPA 1925
Lessor’s covenants with reference to the subject-matter of the lease run with the reversion
S142 LPA 1925
Governs notices to former tenants for rent recovery/recovery of any fixed charge unpaid by current tenant
s17 LTCA 1995
Where former tenants can be served with a s17 notice, they are not liable to pay for any unforeseeable variation in the charge
s18 LTCA 1995
Gives a former tenant the right, after having been served a s17 notice, to an overriding lease
s19 LTCA 1995
Right of entry is a legal right
s1(2)(e ) LPA 1925
Facts: Leasehold of a mill was assigned, including several covenants around protection of the premises. Tenant demolished part of the premises, breaching covenant. Landlord sought possession, tenant disputed the right of re-entry/forfeiture. Court held that forfeiture was exercisable in equitable leases/assignments.
Significance: Forfeiture rights are automatically implied into equitable leases.
Shiloh Spinners v Harding 1973
Facts: Tenant was running a brothel, breached an immorality clause. Landlord knew but the agent didn’t, agent requested next round of rent, thus affirming the lease and waiving the forfeiture right.
Significance: Example of waiver of forfeiture right.
Central Estates (Belgravia) v Woolgar 1972
Facts: Overdue rent on adjoining flats, re-entry rights aros while the reversion was changing hands.
Significance: Assignee landlord can forfeit even if right of re-entry arose prior to assignment.
London & County v Wilfred Sportsman 1971
Governs right of re-entry/forfeiture and notice requirements
s146 LPA 1925
Facts: Tenant breached covenant not to use the premises for illegal/immoral purposes (was operating a brothel). Subsequent notice to quit did not require her to remedy the breach or compensate in money, since it was a breach incapable of remedy.
Significance: Negative covenants may not be capable of remedy (judges dissented on whether this was an always or a sometimes). If incapable of remedy, then the notice to quit does not need to request remedy to be valid.
Rugby School v Tannahill 1935
Facts: Lease included covenants against use of premises for illegal/immoral purposes, and prohibiting the tenant from sharing occupation. Police informed tenant that one of the flats was being used as a brothel, but tenant took no action. Landlord then tried to forfeit for breach of covenant, but tenant then evicted the relevant sub-tenant. Court ruled that while there had been a breach of covenant, relief from forfeiture could be granted based on proportionality.
Significance: Relief from forfeiture, morality clauses
Patel v K&J Restaurants 2010
Facts: Tenants breached covenant by altering the property without consent.
Significance: Tenants can still apply for relief from forfeiture after a landlord peaceably re-enters, provided landlord did not have a court order.
Billson v Residential Apartments 1992
Using or threatening violence to secure entry to a premises (without lawful authority) is a criminal offence
s6 Criminal Law Act 1977
Governs court order for peaceable re-entry and relief from peaceable re-entry
s138/139 County Courts Act 1984
Facts: Lease included covenant against using premises for illegal/immoral purposes, or any purpose apart from a high class restaurant/night-club. Found there was overwhelming evidence of prostitution and the managers of the subleases were aware of it. Head landlord tried to forfeit head lease, but headtenant was granted relief from forfeiture due to the value of the lease, the disproportionate loss forfeiture would cause, the fact that the immoral use had ended and the subtenant would not be renewed, and nothing they did would change the stigma attached to the club. Also head tenant’s sole director was in poor health.
Significance: Court granted relief for breach of immoral use covenant
Ropemaker v Newhaven
Facts: Covenant restricted the use of premises to grocers, wine, spirit, and beer merchants. Breach of covenant claimed when Tesco started selling newspapers, magazines, etc. Tried to argue relief from forfeiture, was not granted since it was a clear breach, and had wilfully traded in breach of covenant for over a year. Court also considered that it would be difficult to police the covenant against them in future.
Significance: Relief from forfeiture is a discretionary remedy - court considers many factors.
Marylebone v Tesco
Legal estate cannot exist in a share of land - i.e. legal title must be joint tenancy
s1(6) LPA 1925
Legal interest cannot be severed
Equitable interest can be severed by notice in writing
s36(2) LPA 1925
Facts: Couple purchased a house in sole name of husband, but was agreed between them that wife would have a half share in the beneficial interest. Couple separated, husband transferred the freehold to wife and new partner as beneficial joint tenants. Dispute over whether wife now owned 3/4s of beneficial interest (her original half plus half husband’s share). Court found that when the freehold was transferred, she was named as joint tenant with new partner, so she had half beneficial interest.
Significance: Where a conveyance into joint names expressly declares the parties as joint tenants, then on severance a tenancy in common of equal shares is created.
Goodman v Gallant 1986
Facts: Husband and wife bought house as joint tenants, later divorced. Wife applied for order of sale, with proceeds to be divided equally between herself and husband. Order was granted but husband died while still living at the house. Question was whether the wife had severed - her application for order of sale was found to be an irrevocable, immediate intention to sever.
Significance: Example of severance by written notice.
Re Draper’s Conveyance
Facts: Married couple getting divorced. Application for divorce included hoping for a transfer or settlement of the property. Husband was killed in a car accident before the divorce was finalised. Question was whether severance had occurred - court said severance had not occurred as the wording was not immediate enough.
Significance: Written severance requires immediacy.
Harris v Goddard 1983
Facts: Husband and wife, wife was considering divorce so sent a notice of severance by post. Husband was admitted to hospital before receiving it, and wife changed her mind and destroyed it. Court found that notice had been validly served under s196 LPA and was irrevocable.
Significance: Severance is irrevocable.
Kinch v Bullard 1999
How to serve a notice (e.g. to place of last abode, etc)
s196 LPA 1925
Facts: Money on trust for 8 children was invested. One child asked for an advance on their share, the other 7 indemnified the trustee against claims for any shortfall from the advance. Had the effect of severing the joint tenancy into tenancy-in-common.
Significance: Example of severance through “other acts”
Williams v Hensman 1862
Facts: Husband and wife in joint tenancy. Husband took out a mortgage on the home, forging wife’s signature. Husband left the country, lender pursued charge over house, wife petitioned for divorce. Court found that applying for the mortgage was a unilateral act upon husband’s own share, and so severance occurred then. Order for sale was permitted, but wife was entitled to half.
Significance: Unilateral act (of fraud) as severance.
First National Securities v Hegerty 1985
Facts: Married couple, joint tenancy. Husband became bankrupt, lender began proceedings. Wife payed arrears and continued to pay instalments. Later, husband applied for an order for sale, contending that they had severed and were tenants in common. Judge ruled that wife was sole beneficial owner. Husband successfully appealed.
Significance: Bankruptcy is involuntary alienation.
Re Gorman 1990
Facts: Married couple break up, agree to sell the marital home so husband can buy a smaller house. Wife signed a memo authorising sale and proceeds from it to be used towards a new house. Both corresponded about their respective share of proceeds from the sale. Husband died before sale completed, wife sought declaration that she was solely entitled to the house by survivorship. Court agreed that the memo did not sever, and conduct did not indicate final severance.
Significance: Unilateral declaration of intention does not sever a joint tenancy.
Nielson Jones v Fedden
Facts: Man and a woman bought a house together as JTs. Man bought it intending to marry the woman, the woman thought they were just going to be roommates. Never moved in together, agreed verbally that man would buy out woman. Woman backed out, man died, and woman tried to claim house by survivorship. Court ruled agreement to buy her out was severance.
Significance: An oral agreement of one JT selling his interest to the other JT is severance, but the sale agreement is not enforceable.
Burgess v Rawnsley
Facts: Husband and wife divorcing, husband committed suicide. While negotiating divorce, had agreed one house would go to wife and one to husband but not conclusive. Husband never served severance notices, despite lawyer’s advice. Court found that no severance had occurred, as agreements between them were not final, and severance can only be effected by unilateral dealings with a third party.
Significance: Intention to sever is not severance. Negotiations are not severance until final. Severance by dealing only occurs with third party, or other JT if finalised.
Gore and Snell v Carpenter 1990
Facts: Married couple negotiating divorce with solicitors. Agreed to sell the house and divide mostly equally, taking into account an endowment policy. Both were advised to serve notices of severance, but neither had when one of the couple died. Judge found that the parties had a common intention to sell the house and divide equally, they knew they were both advised by solicitors, and knew that they would be dividing assets equally.
Significance: Severance by mutual conduct. Court should concentrate on words, actions, and knowledge between the parties, not between a party and their solicitor.
Davis v Smith 2011
Facts: Brothers bought freehold as joint tenants and converted into two maisonettes. Court found that conversion and separate occupation was not inconsistent with joint tenancy. Burden to prove severance was on the plaintiff, and she failed to do so.
Significance: Separation of land can be severance but depends on whether it’s inconsistent with joint tenancy.
Greenfield v Greenfield
Allows trustees to apply for court order
s14 TOLATA
Lists matters which court will consider when deciding application for court order
s15 TOLATA
Facts: Married couple getting divorced. Severed interest, so were tenants in common. Wife moved out, husband stayed in house. Wife applied for an order for sale - was granted since the trust no longer served its purpose (matrimonial home). Wife should be allowed to realise her half of the investment (otherwise was receiving no benefit).
Significance: One of two trustees for sale can insist on the execution of the trust for sale if that will not defeat the purpose of the trust and he is a person whose voice should be allowed to prevail.
Jones v Challenger
Facts: Man and common law wife bought a house as JTs. They had one child together and two children from previous relationship lived with them. When splitting, they failed to agree on a sale. When deciding on the order for sale, court considered the interests of the children as the underlying purpose of the trust, and said it depends on the circumstances at hand.
Significance: Children’s interest considered as part of purpose of trust.
Re Ever’s Trust
Facts: Lender applied for possession due to mortgage arrears, but children still lived in the house. Court reasoned that post-TOLATA, interests of children were a factor in deciding the order.
Significance: Example of court being nice to children re: mortgage/JT dispute.
Mortgage Corporation v Shaire
Facts: Husband sold counterfeit goods, resulting in claimant getting a charge over husband’s property. Claimant applied for order for sale, despite the fact that husband, his wife, and children were living in the house. Court considered whether the interest of children outweighed interest of secured creditor, and decided that since the creditor was pursuing their legitimate interest after husband’s wrongdoing, that was weighted more heavily.
Significance: Example of court being mean to children re: mortgage/JT dispute.
Fred Perry v Genis
Facts: Bankrupt husband, him and his wife had a child with special needs. Creditor trying to make an order for possession. Tried to argue extraordinary circumstances and breach of ECHR. Court still prioritized creditor.
Significance: We all suffer under capitalism.
Barca v Mears
Facts: Husband was bankrupt and had six months to live. Wife challenged order for sale in order to care for husband. Court found they were exceptional circumstances under the Insolvency Act.
Significance: Capitalism can be delayed but not stopped.
Re Bremner 1999
Facts: Covenant to keep free the land in Leicester Square. Phrased positively but really a negative covenant not to build, was deemed binding on successors.
Significance: Authority for burden of negative covenants passing in equity.
Tulk v Moxhay 1848
Facts: Parent company guaranteed subsidiary’s lease, and was liable for outstanding rent. Was found to touch and concern the land.
Significance: Covenant must touch and concern the dominant land for the burden to pass at equity. Rent touches and concerns.
P&A Swift v CES 1989
Facts: Land formerly owned by BBC and was subject to a covenant confining use of the land to BBC broadcasting, but the restriction could be lifted on payment of a development charge. Also contained right of pre-emption, where local authority had first refusal on buyback. BBC sold the land, notified the council, who did not respond. Court found the covenant did not pass, as it did not benefit the dominant/adjoining land.
Significance: Covenant must accommodate the dominant tenement for burden to pass at equity.
Cosmichome v Southampton CC 2013
Facts: Someone cut down a tree they weren’t supposed to.
Significance: Dominant and servient tenements (for easements and covenants) must be proximate to one another.
Bailey v Stephens (1862)
Covenants relating to the land will bind successors in title, if covenant was made after commencement of the LPA 1925
Implies the intention of original parties to allow the burden to run
s79 LPA 1925
Facts: Oxford United FC were purchasing land that once belonged to a pub, and as such was subject to a covenant prohibiting licenses premises within half a mile of the pub. The covenant did not include words expressly binding successors, but other covenants in the same agreement did. Court found that the absence of words in this covenant, where present in other covenants, conveyed an intention not to bind successors.
Significance: s79 LPA binds successors unless contrary intention expressed. Contrary intention does not need to be explicit.
Morrells of Oxford v Oxford United 2000
Facts: Two parcels of land subject to an original covenant that no more than 300 houses could be built on them, ended up being owned by same company. One had successive chains of assignment, the other did not. Court found that since the covenant touched and concerned the land, it ran with it and was annexed to every part of the land.
Significance: A restrictive covenant which touches and concerns the land annexes the benefit of the covenant to the covenantee’s land.
Federated Homes v Mill Lodge Properties
Facts: Language of the covenant specifically said that the benefit did not pass unless expressly assigned. Court found that complied with s78 LPA 1925 - the Act only implies where silent.
Significance: s78 LPA annexes covenant to land unless clear intention otherwise
Roake v Chadha 1984
Facts: Home owner tried to enforce a covenant. Court found that the dominant land was not sufficiently identifiable from the original conveyance, so the covenant had not annexed to the land.
Significance: Dominant tenement must be identifiable in the originating Deed.
Crest Nicholson v McAllister 2004
Facts: Land with a covenant was split up . Court found no evidence that the benefit had been either assigned or annexed to the land.
Significance: Authority for chain of assignment
Miles v Easter
Facts: Scheme of development with covenant not to use as a hotel. Covenant was found to run with the land.
Significance: Authority for scheme of development covenants.
Elliston v Reacher 1908
Facts: Land sold to a developer subject to a covenant requiring prior approval of layout. Broke the covenant, built houses, covenantee sued. Covenant was found to be enforceable, but injunction (i.e. demolition) would be unfair, so damages awarded instead. Damages equated to a reasonable sum to relax the covenant, so 5% of profits.
Significance: Damages in lieu.
Wrotham Park v Parkside 1974
Facts: A road was subject to a covenant of repair. Was later declared a street, which moves the maintenance responsibility to the inhabitants. Court found the covenantee could not enforce the covenant - does not pass the burden of positive covenants.
Significance: Positive covenants don’t typically bind successors.
Austerberry v Oldham 1885
Allows entry onto land registry restrictions relating to dispositions of registered land
s40 LRA 2002
Allows a lease with at least 200 years left to run (with no rent) to be converted into a freehold
s153 LPA 1925
Facts: Buyers of plots covenanted to contribute to the cost of repairs of sewers used by owners of all the plots. Was found to be binding.
Significance: Mutual benefit and burden rule: burden of positive covenants will pass if associated with a benefit, and would be unfair for successor to reap benefit without burden.
Halsall v Brizell 1957
Allows assignment of covenants in writing
s136 LPA 1925
Facts: Land prone to flooding, covenantor promised to do some work to prevent flooding and maintain it for all of time. Was found to touch and concern the land, with intent to bind future successors. Note: the benefit passed, but the burden (the covenantor) remained the same party throughout.
Significance: Example of implied assignment of benefit (“for all time”).
Smith and Snipes Hall Farm v River Douglas 1949
