Co-Ownership Flashcards
Joint Tenancy
What are the two characteristics of a JT?
This is the most perfect form of co-ownership. The characteristics of a joint tenancy are:
(a) The Right of Survivorship (jus accrescendi) (b) The Four Unities
Joint Tenancy - The Right of Survivorship
What is The Right of Survivorship?
Each joint tenant owns the whole property jointly and nothing separately: they are not considered as having shares in the property, rather they own the entire estate together.
When one JT dies, his interest in the land ceases + the surviving JTs hold the property among themselves.
If only one owner remaining, then the co-ownership ends and the survivor holds the estate alone.
So right of survivorship takes precedence over a gift of interest by a JT in a will or under rules of intestacy
Joint Tenancy - The Four Unities
Explain the four unities?
(1) Possession: Each co-owner is entitled to possession of the whole premises. A co-owner who evicts another co-owner from the premises is thus liable in trespass.
• Acts that destroy the enjoyment of the property in common can amount to ouster
• S.31 LCLRA states a co-owner can apply to court for accounting adjustments to be made bw the co-owners and the court grants the ousted owner fair rental value for the time they were ousted
(2) Interest: Every JT must have an identical interest in the land. If one co-owner has a freehold interest and another a leasehold, then they don’t hold as JTs. Must have same estates too (life/fee simple)
(3) Title: JTs must have acquired their interests from the same document / set of docs e.g. same will/deed
(4) Time: Rights of each JT must have vested at same time (not required if JT created by will / by use)
Joint Tenancy - Creation
How is a JT created?
Common law presumes a JT exists every time there’s more than one property owner (McDonnell v Jebb)
Can be rebutted in which case a TIC will be said to exist. If co-owners want to ensure the equity in the property will also be held in a JT, advisable they expressly state this by creation of an express trust.
Tenancy in Common
What are the general features of a TIC?
Doesn’t need the four unities, just unity of possession: all co-owners may use all of the land. Until partition, all TICs are entitled to possession of all the property.
Shares are usually, but not necessarily, commensurate to the contributions to the purchase price.
No Right of Survivorship: TICs are entitled to a notional share e.g. ½ which they can dispose of, but the shares are only notional while the property remains undivided. Thus no right of survivorship.
Absence of right of survivorship controversial: can increase co-owners exponentially.
Tenancy in Common - Creation
Explain the creation of a TIC?
A TIC exists where there’s something to indicate the parties intended the presumption of JT won’t operate. To create a TIC, you would ensure either
(i) Four Unities were not present or
(ii) Insert certain words into the disposition, known as “words of severance”, that indicate ownership is to be severed into shares of control e.g. ‘in equal shares’, ‘amongst’, ‘to be distributed amongst them in joint + equal proportions’, etc. have all held to be sufficient.
However, even where words of severance are used they may be overridden by a clear intention to create a JT or if no words of severance are used, a TIC can be created due to an overriding intention of disposition.
Equity: A JT in law is sometimes regarded as a TIC in Equity
How does this function?
A TIC may be said to exist in equity where legal rights are held in JT. In such cases, legal ownership remains undisturbed but the co-owners (JTs in law) hold the prop on trust for the co-owners as TICs in equity.
Equity: A JT in law is sometimes regarded as a TIC in Equity
(a) Unequal Contributions to the Purchase Price
Equity may find the operation of right to survivorship unfair if parties contribute unequally to purchase price. Here, equity treats the parties as TICs in equity and recognises them as holding shares of equitable control, commensurate with the proportions of their contribution.
Equity: A JT in law is sometimes regarded as a TIC in Equity - Commercial Arrangements
Reilly v Walsh [1849]
Equity generally considers commercial co-owners as TICs, even without a formal commercial relationship.
Importantly, equity is concerned to ensure that the relationship bw the parties is described properly as one of a commercial character and wouldn’t be more accurately described as a ‘family relationship’ w a business slant
- Two bros bought commercial property together. One got mentally ill so other took over almost exclusively
- When insane one died, he purported to leave his share of the property to R by his will. R claimed that, as it was a commercial enterprise, the equitable ownership was held in a tenancy in common
- Held bc of the familial relationship between the bros + fact the dead bro played no material role in the business, it was not a relationship of commercial nature as to require intervention of equity
- Rather, the bros were JTs in equity as well as law so the gift in the will had no effect. Bro got 100% (RoS)
Equity: A JT in law is sometimes regarded as a TIC in Equity
(c) Co-Mortgagees
If 2 separate banks granted mortgages over the same property + bc of an oversight they were construed as joint tenants in law, equity intervenes + deems them tenants in common in equity: Pett v Stywaid [1632]
Equity: A JT in law is sometimes regarded as a TIC in Equity
(d) Perceived Intentions of the Parties
Equity is empowered to intervene if the justice of the case requires it. Parties’ intentions usually given effect
Twigg v Twigg [1933]
- Testator directed trustees to hold money on trust for his nephews + nieces w recommendation (not stipulation) that they spend the money on their kid’s education. JT arrangement would’ve been unfair to those with no kids, held they were intended to benefit in equal shares (TIC found).
Rights of Co-Owners - Right to Possess
General rule?
Following on from the unity of possession, no co-owner can exclude another + to do so is trespass. Flowing from this right it must be noted that one co-owner isn’t entitled to exclude another’s reasonable guests/invitees
Rights of Co-Owners - Right to Possess
Bull v Bull [1955]
- Mum + son jointly bought prop but son paid more of original purchase price + took on full legal title to house. Lived there on agreement mum would only occupy 2 rooms. Then fell out: asked M to leave
- Held son was holding the property jointly for mum + him as equitable TICs so couldn’t eject her.
- Significance: any co-owner who attempts to exclude another will be liable in trespass.
Rights of Co-Owners - Right to Possess
Lahiffe v Hecker [1994]
- 4 kids left all their dad’s property as JTs. The property was subsequently severed by them giving rise to a tenancy in common. One daughter held a right of residence in a residential home on the property.
- She began to dictate when her siblings could enter the land + use the property.
- Held her actions breached the rights of the other TICs: Co-owners have right of possession too and could occupy and use it and have a reasonable number of invitees use + enjoy the land too.
Rights of Co-Owners - Right to Possess
Dennis v McDonald [1982]
- P + D lived together in a house held in their joint names. The woman left the home as a result of the man’s violence, and he kept up the mortgage payments.
- The court ordered D to pay as an occupation rent half of such sum as would have been payable on principle of valuation laid down in respect of regulated tenancies;
Rights of Co-Owners - Right to Share in Income
Jones v Jones [1977]
If the property is leased the co-owners are entitled to a share in the income.
- D’s dad bought house for D to live. Moved in on understanding it’d be home 4 life + paid dad ¼ of price.
- Dad died + house vested in P (D’s step-mom) who sued for possession when D refused to pay rent.
- Held D had a 1/4 equitable interest + refused. P then sued for order the house be sold, or payment of rent.
- Held (1) P as tenant in comm can’t claim rent from D (2) P estopped by dad’s conduct from turning D out.
Rights of Co-Owners
(c) Right to Alienate
A C-O has right to sell + money from sale are held in co-ownership. Doctrine of overreaching applies: If a JT
alienates their share it causes a severance but if a TIC alienates their share a buyer simply steps into their place
Severance of Joint Tenancy
What is severance?
Severance is a mechanism to transform a JT into a TIC (allows shares to pass by will or intestacy). It’ll occur in law or equity depending on circs. Doesn’t end the co-ownership, simply changes the nature of it.
Severance of Joint Tenancy - Severance in Law
(i) Alienation to a Third Party
The seller/acting JT severs his ownership from the remaining JTs and the buyer becomes a TIC to the remainder of the JTs: unities of title + time destroyed bw buyer + remaining JTs (Gilbourne v Gilbourne)
The non-acting JTs aren’t affected in relation to one another, as the four unities still exist between them.
Severance of Joint Tenancy - Severance in Law
(ii) Unilateral Dealing
UD: where one JT alienates his ownership to a 3rd party to the use of himself ends JT + creates TIC
Unities of title + time destroyed bw the acting former JT + non-acting JTs and a TIC is now in operation
LRC said it operated unfairly as it was brought about unilaterally by one tenant, so…
S.30 LCLRA 2009: One JT may not sever by unilateral actions unless the other JT(s) give prior written consent to it. Any conveyance/acquisition w/o consent is void at law + equity so the JT remains in force.
Logical to assume that it must be valid, fully informed and freely given consent as w FHPA 1976
S.31 LCLRA 2009: Court has a discretion to dispense of consent if being unreasonably withheld.
Severance of Joint Tenancy - Severance in Law
(iii) Acquisition of an Additional Interest
Where one JT acquires an additional estate in the land, it destroys the unity of interest bw him + other JTs
As 4 unities continue between non-acting JTs, they continue to stand in a joint tenancy in relation to one another, but stand as one in a tenancy in common in relation to the acting joint tenant.
Severance of Joint Tenancy - Severance in Law
(iv) An Act of a Third Party Exercising Statutory Powers
Involuntary severance arises when a creditor gets a judgment mortgage on the land of a joint tenant.
Pre-2009, a judgment mortgage severed the JT on unregistered land (Containercare v Wycherley). NOW:
S.30(3) LCLRA 2009: A judgment mortgage does not sever the joint tenancy on unregistered land or registered land. Irwin v Deasy [2006]: a judgment mortgage never severed the JT on registered land.
S.30(3) LCLRA 2009 also states if the joint tenancy remains unsevered, the judgment mortgage is extinguished on the death the judgment debtor. Thus a judgment mortgagees must move quickly.
Severance of Joint Tenancy - Severance in Equity
Williams v Hensman [1861]
3 ways a tenancy may be severed in equity. Only affects equitable ownership:
(i) Furthering the Mutual Intentions of the Parties
(ii) Individual JT Acting Upon his Own Share
(iii) Course of Dealing
Severance of Joint Tenancy - Severance in Equity - Furthering the Mutual Intentions of the Parties
Burgess v Rawnsley [1975]
- Mr H and Ms R became friends. She felt sorry for him, but he fell in love. Asked her to buy prop w him.
- She believed she’d occupy one floor, him the other; he believed they’d marry + it’d be their marital home
- He only realised after the sale. When he did, he refused to let her live there + offered to buy her out
- She agreed, offered £750 but changed her mind to £1k. Matter not resolved on his death
- She claimed she was now the sole owner on the basis of survivorship.
- Rejected: Held there’d been an equitable severance on the basis of the parties’ mutual intentions for him to buy her out despite the failure to formalise the intentions.
- Legal title vested in her but she held the benefic interest on trust for her+ Mr H’s estate as TICs in equity.
Severance of Joint Tenancy - Severance in Equity - Furthering the Mutual Intentions of the Parties
Byrne v Byrne [1980]
Parties’ mutual intentions may also be evident in their decision to enter a mutual contract for sale of C-O prop:
- Held entering into a mutual contract that’s not yet completed won’t necessarily result in severance in equity, rather court ascertains if the JTs intended for the contract + sale to result in severance or for the JT to continue to exist over the purchase monies.
The LRC has recommended simplifying this to allow them do this by completing a simple deed.
Severance of Joint Tenancy - Severance in Equity - Individual JT Acting Upon his own Share
Tempany v Hynes [1976]
The rule in this case gives an equitable interest to a third party who pays some of the purchase price under a contract to alienate a JT’s interest to him that wasn’t completed. Destroys unity of title.
Severance of Joint Tenancy - Severance in Equity - Course of Dealing
General rule?
Includes negotiations that fall short of an agreement or the way in which the prop has been dealt w by those concerned (Lyall). What’s key is that the course demonstrates the relationship bw the co-owners has been altered to the extent that they conceive themselves as TICs rather than JTs (De Londras).
Severance of Joint Tenancy - Severance in Equity - Course of Dealing
Re Wallis’ Trusts [1889]
- T gave some property to his sons using the words of severance ‘in equal shares’ making them TICs of the property but also made the 2 sons residuary legatees in joint tenancy.
- However sons were paid dividends as residuary legatees in equal shares as were their successors in interest
- Held this is an example of a course of dealing that allowed for the interest in law in JT to be severed in equity. As this is conduct by all parties, exempt from s.30(4) LCLRA 2009 + prior written consent not req
Alienation of Co-Owned Land
How does this operate?
As we saw, all C-Os have a right to alienate their property rights.
If through mutual agreement, the purchase money usually continues to be held in co-own bw the parties
If an individual C-O alienates his right, it’ll result in a severance. If it’s a TIC, buyer simply slips into TIC.
Co-owners can also rent out the property. Rent must be shared. In JT, they take in equal shares. In TIC, it’s commensurate to their share. If one receives more than his entitlement, must repay others.
Possession of Co-Owned Land
How does this operate and what cases speak to it?
As we saw, all C-Os have the right to possess the property as a result of the unity of possession.
Possession is right to use and enjoy the land and also have reasonable no. of invitees (Lahiffe v Hecker).
Any C-O that attempts to exclude another C-O will be liable in trespass (Bull v Bull).
Termination of Co-Ownership
What are the three main ways it can be terminated?
Three main methods: Partition, Sale or Vesting
Termination of Co-Ownership - Partition or Sale
What is a partition and how did it operate pre LCLRA 2009?
Partition is the physical division of the property. Can be done voluntarily by deed or by court order.
Partition Acts 1868 created possibility that a sale could be ordered in lieu of partition
Partition could be sought by any interested party eg co-owner, mortgagee, judgment mortgagee
Pre- LCLRA 2009, there was uncertainty re whether co-owners are entitled to either a partition or a sal.
Termination of Co-Ownership - Partition or Sale - Pre-2009 Uncertainty
First National Building Society v Ring [1992]:
Appeared to suggest that courts had discretion to refuse both applications, especially where 3rd party interests (mortgagee) require exercise of it.
Termination of Co-Ownership - Partition or Sale - Pre-2009 Uncertainty
O’D v O’D [1983
Said partition discretionary remedy+if prop a fam home, usually valid reason to refuse sale
Termination of Co-Ownership - Partition or Sale - Pre-2009 Uncertainty
CF v FF [1986
Court took view the equitable jurisdiction survived the repeal of the previous Partition Act
Termination of Co-Ownership - Partition or Sale - Post-2009 Clarification
How was this area clarified and what case speaks to it?
S.31 LCLRA clarifies the area: Re-confers statutory partitions or sale jurisdiction on the courts and s.31(6) abolishes the courts equitable partition jurisdiction. Court can make a wide range of orders.
Yippi Trading v Costello [2013]: Pub car park dispute, partition refused: interests intertwined. Fact sensitive.
Termination of Co-Ownership - Vesting in a Sole Owner
Cawley v Lillis [2011]
In a joint tenancy, this happens automatically by right to survivorship. In TIC, a co-owner buys another out.
- S.120 SA 1965 precluded a husband convicted of his wife’s manslaughter of the benefit of the assets of her estate that she owned solely, but re the assets they owned jointly, incl. a property in joint tenancy…
- HC held on the death of the deceased the joint assets became vested in the H on a constructive trust as to one-half share for him and one-half share on trust to the benefit of the wife’s estate.
Commorientes: Simultaneous Death
Bradshaw v Toumlin [1784] NI
- This NI case set out the traditional approach in circs where it could not be determined who died first/last
- Held heirs of deceased JTs were held as holding in joint tenancy i.e. presumption of simultaneous death.
- The personal reps of the deceased held the property collectively on trust for the persons entitled under the will or intestacy. While the personal reps held the estate as JTs, it was unclear how the equitable interests were held i.e. by the successors of those dying together.
Commorientes: Simultaneous Death
S.5 Succession Act 1965 and issues arising with it.
Enacted, putting presumption of simultaneous death on a statutory footing
This created some serious issues: a person may not necessarily have one successor. Unclear how the successors held the equitable interest.
Commorientes: Simultaneous Death - Clarity in IE
Re Kennedy [2000]
- Married couple killed after car went off a pier in a storm. Autopsy unable to show who died first.
- Held the s.5 rule applied that they had died simultaneously. Kearns J took the view the burden of proof under s.5 in establishing that one deceased survived the other was on the party asserting it.
- If there’s no certain evidence to show who died first, then s.5 presumption applies. Strict burden.
Commorientes: Simultaneous Death - Clarity in IE
S.5 SA 1965 was amended by the Civil Law (Miscellaneous Provisions) Act 2008 to clarify the situation?
‘Where 2+ persons held a property as joint tenants and die simultaneously, or deemed to have under s.5, then they’re deemed to have held the property immediately before their death as tenants in common in equal shares’
The shares then pass to their respective separate estates. So their estate is severed by statute (De Londras)
