Co-Ownership Flashcards
Stack v Dowden
constructive trusts - family home
Appeal dismissed; the property was in held beneficially in unequal shares
The presumption that where there is a joint tenancy in law there is a joint tenancy in equity is rebutted by the fact that the couple kept their finances completely separate.
Baroness Hale: The starting point where there is sole legal ownership is sole beneficial ownership: [56]
In the domestic consumer context, a conveyance into joint names indicates both legal and beneficial joint tenancy, unless and until the contrary is proved: [58]
Mr Stack (C) and Ms Dowden (D) had home in their joint names, they were not married but cohabited as a couple with their children in the home
C and D had contributed unequally to the purchase price of the home, with D contributing 65%
Later on, C and D separated and C left the property while D remained there with the children
C sought an order for sale of house and equal division of proceeds amongst him and D, while D argued that beneficial interest should be divided by the relative contribution of the parties
The High Court granted the order for equal division but D appealed and subsequently the Court of Appeal allowed D’s appeal and ordered net proceeds to be divided 65% to 35% in D’s favour
C thus appealed to the House of Lords
Goodman v Gallant
the conclusiveness rule
It is likely that the principle in this case would apply to the modern doctrine of common intention constructive trust developed in Stack v Dowden such that the common intention constructive trust does apply where cohabiting parties have made an express declaration of trust as to their shares in the property???
The parties were joint tenants and the sale proceeds were held in equal shares.
*Rule 1: express declaration of trust is conclusive as to beneficial entitlement
cannot ‘go behind it’ and go back to what position would have been if the declaration had not been made
= unless document is a sham/fraudulent or procured by undue influence, or there is some estoppel
*Rule 2: if the equitable joint tenants eventually want to sever and become tenants in common, their shares will be equal
Mr Gallant moves in with Mrs Goodman, and they ‘buy out’ her former husband’s interest in the property
The property is conveyed to their joint names at law. By now, Mrs Goodman has invested around 75% of the property’s value
*Their express declaration of trust à JT in equity
*Mrs G then severs (breaks off) her share in equity – was it 75% or 50% (she wnated to go back to the default position)
Jones v Kernott [2011] UKSC 53
NO LEGAL CO-OWNERSHIP MEANS NO TRUST
Baroness Hale:
Where a couple buys a place for cohabitation in joint names without an express declaration of their beneficial interests, the presumption is that equity follows the law and they are joint tenants in law and equity
The presumption could be displaced by showing
(a) that the parties had a different common intention at the time when they had acquired the home OR
(b) that they had later formed a common intention that their respective shares would change
Common intention is to be deduced objectively from words and conduct, examples of relevant evidence is given in Stack v Dowden at [69]
Held; The parties owned the property in unequal shares, with the woman (C) holding 90% and the man holding 10%.
Their intentions had changed since they separated.
*One point discussed in the case: sole legal owner presumed to have all of the beneficial ownership => When the family home is in the name of one party only, there is no presumption of joint beneficial interest
C and D were an unmarried couple cohabiting a property they bought in their joint names
They later separated with the woman (C) remaining in the house with the children
They agreed to cash in the life insurance policy they both contributed to and share the proceeds, with the man (D) using his proceeds to put down the deposit for to purchase a home for himself
C commenced action for declaration that she owned the entire beneficial interest in the property, while D sought to sever the joint tenancy
It was accepted by the parties that at the time of separation that they held the property in equal shares
Kinch v Bullard [1999] 1 WLR 423 (Ch)
severance - written notice - s 196(3) LPA
Notice to sever had been effective.
see s 196(3)
A husband and wife were joint tenants of matrimonial home and in the process of divorcing
The wife, who was terminally ill, sent a notice of severance to her husband by ordinary first-class post
The letter was delivered to the husband before seeing it, the husband had a serious heart attack
Realising that she was now likely to outlive her husband, the wife destroyed the letter
The husband died and wife died a few months latter
An action was brought by the parties’ executors to determine whether notice had severed the joint tenancy
Re Draper’s Conveyance [1969] 1 Ch 486
Written notice 36(2) LPA - communicates immediate intention to sever
It did communicates immediate intention to sever => severance was effective.
The summons coupled with the affidavit that supported it effected the severance.
C holds beneficial interest in any proceeds of sale on trust for herself and estate of the deceased as tenants in common in equal shares.
Was joint tenancy severed before C’s husband died?
The wife (C) issued summons for an order that the house she held as joint tenant in equity with her husband be sold, and proceeds distributed equally between her and then
The husband died before order was granted
C now claims that she is entitled in equity to the entire property as the sole surviving joint tenant
Harris v Goddard
Written notice 36(2) LPA - communicates immediate intention to sever
The joint tenancy was not severed. Distinguished from Re Draper on the grounds that did not communicate an immediate intention to sever
Wife petitioned for divorce, writing to the court requesting for an order under the Matrimonial Causes Act 1973 ‘that such order may be made by way of transfer of property and/or settlement in respect of the former matrimonial home’
Her husband was killed in an accident
Question arose whether the petition had severed the joint tenancy
Re 88 Berkeley Road [1978] Ch 648 (Ch)
severance - written notice - s 196(4) LPA
Held: The court held that by virtue of s.196(4) of the LPA 1925, the notice had been received and the joint tenancy had been severed
The joint tenants lived at the same address. R sent notice to sever the joint tenancy to G, and signed for the letter herselg. G denied ever having seen the letter, which the court accepted as true. The question for the court was whether you could sever a joint tenancy by notice if that notice was never actually received by the other tenant
Williams v Hensman
severance - acting on one’s share
note that the judges in the case discuss severance methods and the mutual agreement one is derived from this case
The JT was severed.
The joint authorization to invest severed the tenancy, though only partially. While the authorization did not sever the interests of the five children from each other, it did sever their interests from the three minor children, thereby individualizing their shares and inheritance rights. This reasoning rested on the notion that any act demonstrating an intention to treat separate interests constitutes severance, regardless of awareness of legal consequences.
A mother bequeathed money in trust for her eight children, stipulating that it be invested in stock to provide an annuity for one child, followed by distribution of the principal among the remaining children upon her death. Three of the children were minors at the time. The beneficiaries jointly authorized the trustee to invest the fund in a mortgage.
If a joint tenancy existed, did the children’s actions (joint authorization and individual dealings with the trust) sever it, altering their inheritance rights?
Gould v Kemp (1834) 2 My & K 304
severance by will?
CAN NEVER SEVER JT BY A WILL
Burgess v Rawnsley [1975] Ch 429 (CA)
severance - mutual agreement
(Lord Denning MR, obiter at 439) – suggests unilateral communication sufficient, but this has been doubted:
*‘a “course of dealing” need not amount to an agreement, expressed or implied, for severance. It is sufficient if there is a course of dealing in which one party makes clear to the other that he desires that their shares should no longer be held jointly but be held in common. I emphasise that it must be made clear to the other party.’
= seems inconsistent with the strictness of the writing requirement
= use with caution => Davis v smith is a better authority
HELD: discussions amounted to mutual agreement to sever
A house was bought by D and C’s father with each providing half of the purchase price
D orally agreed to to sell her share in the house to C’s father but she subsequently refused to sell
C’s father died leaving C as his administratrix
C claimed that the joint tenancy had been severed in equity, D claim that house was hers by survivorship
Davis v Smith [2011] EWCA Civ 1603
course of dealings - severance
Severance was effected
The man and the woman’s estate were entitled to equal shares in equity of the property
A couple was going through divorce and agreed that the property they held as joint tenants in equity should be sold and to divide the proceeds equally.
Both parties had been advised by their respective solicitors to serve a notice of severance of the joint tenancy but neither had done so when the woman died suddenly. no final agreement reached
Re K [1986] Ch 180 (CA)
relief thorugh forfeiture
The court modified the forfeiture rule, under the Forfeiture Act 1982, to allow the widow to retain the property. Note: the court cannot modify the rule in cases of murder, but this was a case of manslaughter so the rule could be modified!
= Court noted there are infinite varieties of manslaughter – in granting relief, noted tragic accident, nature of relationship leading up to the event, fact not financially motivated o killing him.
K was threatening her husband with his shotgun, which discharged and killed him. K was convicted of manslaughter. She was also a joint tenant of the family home, thus became sole owner on her husband’s death (under the right of survivorship i.e. jus accrescendi). However, the issue for the court was forfeiture: forfeiture provides that a person cannot benefit by unlawfull killing another.
Gray v Barr
relief through forfeiture
‘deliberate, intentional or unlawful violence or threats of violence’ negates relief
Despite the decision of the jury, Mr Barr had clearly committed manslaughter. It would be against public policy to relieve him of the consequences of his crime.
The defendant’s wife had been having an affair with another man. The defendant, armed with a shotgun, went to the man’s farm to look for his wife. He entered the house and found the man standing at the top of the stairs. The man told him that the wife was not there. While this was true, the defendant did not believe him and demanded to explore the property to see for himself. When he got to the top of the stairs, he fired a ‘warning shot’ at the ceiling to scare the man off. This instead prompted the man to try to grapple with him. In the struggle, the defendant shot and killed the man by accident. A jury ultimately acquitted the defendant of both murder and manslaughter.
The man’s widow and father sued the defendant as the administrators of the man’s estate for negligence in causing the man’s death. His wife also sued as a dependant under the Fatal Accidents Act. The defendant claimed indemnity from an insurer under a policy which indemnified him against causing accidental injury. The insurer argued that his claim should barred as contrary to public policy.
Ninian v Findley [2019] EWHC 297 (Ch)
relief through forfeiture
Relief granted to widow who had reluctantly assisted with husband’s travel to assisted-dying facility at his request.
Factors: nature of relationship, degree of moral culpability, nature and gravity of offence, fact that the deceased’s intentions were unambiguous and clearly recorded, whether offence was financially motivated, position of those who would otherwise inherit.
Morgage Corp v Shaire [2001]
TOLATA
Reasoning:
Given these shares, Neuberger J declined to order a sale immediately, holding that s. 15 of TLATA did not require the courts to order sale by default unless there were strong reasons to the contrary. Unlike the jurisdiction to order a sale of trust property that was replaced by s. 15—that is, s. 30 of the Law of Property Act 1925—there was no presumption that the interest of a party seeking sale should be given more weight than any of the other factors listed in s. 15(1) of the Act. How much weight should be given to each factor listed in s. 15(1) in each particular case was a matter for judicial discretion. The courts could also take other relevant factors into account in a particular case.
Wider considerations:
the court has greater flexibility than heretofore, as to how it exercises its jurisdiction on an application for an order for sale… There are certain factors which must be taken into account: see section 15(1) and, subject to the next point, section 15(3). There may be other factors in a particular case which the court can, indeed should, take into account. Once the relevant factors to be taken into account have been identified, it is a matter for the court as to what weight to give to each factor in a particular case.’
= it is a matter for the courts to decide what weight will be allocated to each factor. more discretion in applying the tolata factors than in the overruled s 30 TOLATA.
- Neuberger J held that Mrs Shaire and Mr Fox had held their legal title on trust for themselves as tenants in common, with Mrs Shaire having a 75 per cent share and Mr Fox having a 25 per cent share. However, Mortgage Corporation had a valid charge over the whole of Mr Fox’s share. It also had a valid charge over part of Mrs Shaire’s share, since the mortgage that had previously affected her share had been paid off using her money.
- Neuberger J declined to order a sale immediately, but invited the parties to reach an agreement whereby Mrs Shaire could remain in the house while paying the mortgagee an amount equivalent to its share in the property, including interest. He held that if Mrs Shaire were unable to make payments to this extent, an order for sale would be appropriate. This was because while the house was purchased as a family home, the purpose of providing a family home for Mrs Shaire and her son could be fulfilled even if the property were sold. While it would be ‘a real and significant hardship’ for her ‘to have to leave her home of nearly a quarter of a century’, the hardship would not be ‘enormous’, since her share of the proceeds of sale would be enough to enable her to acquire a smaller home. In addition, her son was not a minor
the freehold title to a house in London. The house was previously co-owned by Mrs Shaire and her husband, who had separated in 1980. From 1986 onwards, it was occupied by Mr Fox, Mrs Shaire, and Mrs Shaire’s son. In 1987, Mr Shaire joined in a conveyance of title into the joint names of Mrs Shaire and Mr Fox, and was paid £15,000 for his share. Mrs Shaire and Mr Fox borrowed £43,750 from a bank on the security of a mortgage to complete the purchase and pay off the previous mortgage.
In 1990, Mr Fox forged Mrs Shaire’s signature on a document purporting to grant a charge over the house to Mortgage Corporation, securing a debt of £118,000. Part of the money was used to redeem the earlier mortgage and the charge in favour of Mortgage Corporation was duly registered. Mrs Shaire had no knowledge of the charge and discovered its existence only in 1992, after Mr Fox’s death.
In 1994, the Mortgage Corporation brought an action seeking possession of the house. Both parties agreed that even if Mrs Shaire had not known of the charge, the mortgagee had a valid charge over Mr Fox’s share in the house. The mortgagee asked the court to order a sale of the house under s. 15 of the Trusts of Land and Appointment of Trustees Act 1996 (TLATA) and to grant an order for possession pursuant to this order for sale.
