Co-Ownership & Trusts

Question 1

S. 184 LPA 1925

Answer 1

If two people who own as joint tenants die, the person who dies first…their equity in the property will vest. We assume that the older of the two died first.

Question 2

S. 34(2) LPA 1925.

Answer 2

The legal ownership will always be held as joint tenants, you can only have a maximum of four legal owners/trustees.

If you tried to transfer legal ownership to more than four people, then legal ownership will vest in the first four that you have named.

Question 3

S 1(6) LPA 1925

Answer 3

If you are a minor then you cannot be a legal owner (NB can own in equity). You must be 18 or over to be a legal owner. You can still get an equitable interest in the land, an enjoyment, but you can’t be a legal owner.

Holding the legal estate as joint tenants. S. 1(6) LPA 1925

Question 4

s. 196 (4) LPA 1925

Answer 4

You are serving the notice under the LPA 1925 s. 196 (4).
By registered post/recorded delivery. s. 196 (4)
To last known abode/place of business. s. 196 (4)
Not returned by post office as undelivered. s. 196 (4)
If these are done correctly, it is considered to be proper notice.

s. 196(3) Notice “shall be sufficiently served if left at the last known abode or place of business in the United Kingdom of the …person to be served…” CASE: Kinch v Bullard [1999] 1 WLR 423.

Question 5

KINCH V BULLARD

Answer 5

A and B held as joint tenants at law and in equity
A served valid notice of severance on B by ordinary post. B had heart attack.
When noticed delivered, B out so A picked up letter.
Be then died.
Was notice valid served under s. 196(3) LPA 1925? Yes, it was. The court took a strict interpretation.

Question 6

RE 88 BERKLEY ROAD

Answer 6

A and B held as joint tenants at law and in equity.
A served valid notice of severance on B by registered post.
When notice delivered, B out so A signed for it and never gave it to B. A then died.
Had the notice been served?

Question 7

HARRIS V GODDARD

Answer 7

Husband and Wife were again joint tenants
Wife petitioned for divorce asking that “such order may be made” as was just.
Husband died and his executors claimed that there had been severance.
If there was no valid notice of severance, then the wife got the lot.
The court said no severance. She wasn’t showing a clear intention to sever now

Question 8

RE Drapers Conveyance:

Answer 8

Notice of severance. Unilateral (i.e., do not all have to agree)

Husband and wife were joint tenants at all and in equity.
Wife issued court proceedings asking for court order matrimonial home to be sold and proceeds divided up.
Held writ + affidavit amounted to valid notice of severance.
This was a procedure of dividing up the matrimonial home without getting divorced

Question 9

STACK V DOWDEN [2007] 2 AC 432

Answer 9

If land is bought as a family home and no express declaration about ownership of the equitable interest… Joint tenancy of equitable interest rebutted by showing both parties intended to hold the equitable interest as tenants in common.

Question 10

Methods of severance

Answer 10

Notice s.36(2) LPA 1925 - (Single beneficiary can sever unilaterally).

Alienation - (Single beneficiary can sever unilaterally).

Homicide - (Single beneficiary can sever unilaterally).

Mutual Agreement/Conduct - (All beneficiaries must agree)

Question 11

s. 36(2) LPA 1925

Answer 11

Notice of severance - in writing, immediate, and correct service.

Question 12

s. 53(1)(b) LPA 1925

Answer 12

Creation of Express Trust of Land must be evidenced in writing.

Question 13

s. 52 LPA 1925

Answer 13

Creation of Express Trust of Land involves a conveyance/transfer to trustees.

Question 14

Re King’s Will Trust [1964] 1 Ch 542

Answer 14

T in his will gives land to X & Y to hold on trust of land for B
X & Y are also appointed as T’s executors under the will
T dies- land vests in X & Y as PRs
X and Y assent the land to selves as trustees to deal with it in capacity of trustees

Question 15

s. 34 TA 1925

Answer 15

No more than 4 Trustees.

Question 16

s. 34(2) TA 1925

Answer 16

Takes effect as transfer to first 4 named

Question 17

s. 6 TOLATA 1996

Answer 17

General powers of trustees

Question 18

s. 6 (1) TOLATA 1996

Answer 18

“all the powers of an absolute owner”

Question 19

s. 6 (5) TOLATA 1996

Answer 19

Duty to “have regard to the rights of the beneficiaries”

Question 20

s. 6 (6) TOLATA 1996

Answer 20

Duty to not contravene “any rule of law or equity”

Question 21

Rodway v Landy [2001]

Answer 21

Winding up medical partnership
One partner wanted sale other wanted partition
Court held could divide up occupation between partners – used s13

Question 22

s. 14 TOLATA 1996

Answer 22

Any person with an interest in property which is subject to a trust of land can apply to the court under Section 14.

The court can make such orders as it thinks fit.
This is important for implied trusts.
About the trustees exercising their functions
Declaring the nature or extent of a person’s interest in land subject to a trust.

The court can make such orders as it sees fit - sale, retention, retention for a limited period of time, etc.

When the court makes an order under section 14 it has to take into account factors listed under section 15 which come from preexisting case law.

Question 23

s. 7 TOLATA 1996

Answer 23

Partition - The trustees can do this if the beneficiaries are of full age and absolutely entitled. This is a way of bringing the trust to an end.

Question 24

s. 8 TOLATA 1996

Answer 24

Only applies while you have an express trust of land. We are not looking at co ownership here where two people buy a house together. An express trust is drawing up a will, and naming trustees and who equal shares.
Express private TOL - settlor can restrict trustees powers - example, by requiring consents before trustees can exercise their powers.

Question 25

S. 11 TOLATA 1996

Answer 25

Consultation Requirement

Applies to both express and implied trusts.
Does apply to the co ownership examples we have looked at.
When the trustees exercise their powers, they have a duty to consult with the beneficiaries who are fully age and beneficially entitled to an interest in possession.
Consult beneficiaries of full age and beneficially entitled to an interest in possession - if you have an interest in remainder, reversion, or you are not of full age, the trustees don’t have to consult you.
It does not say obtain consent, it just said “consult.”

once the trustees have consulted, then if practical, they have to give effect to the wishes of the beneficiaries. They are saying if it is practical to do so…then comply with their wishes. Why? Being a trustee is an onerous position.

Question 26

Section 12 & 13

Answer 26

BENEFICIARIES OCCUPATION RIGHTS

Look out for this question. One wants to sell, and one wants to carry on living there. If this is the case, you need to see if this beneficiary has the right to occupy the trust land.

1) The beneficiary must have an interest in possession. If it is just a beneficiary in remainder, there is no right to occupy.
2) Second thing is you need to show is that the purpose of the trust was to make the land available for occupation.

Question 27

Barclay v Barclay

Answer 27

Trust of bungalow for 5 beneficiaries.
Settlor left instructions to be sold and proceeds was to be divided amongst the 5 beneficiaries.
The court said that despite that one of the beneficiaries was trying to occupy and prevent the sale…section 12 and 13…the purpose of the trust was not to make the bungalow for occupation; it was to be sold.
Should the trustees sell or not? They were trying to figure out what to do.
The court ordered sale because the trust left instructions for the sale and the money to be divided. This was an express trust in the trust instrument. Sometimes it is not clear, however.

Question 28

Edwards v Lloyds TSB

Answer 28

Purpose of trust.

Lenders order for sale postponed as children of relationship needed a home.
A lender in this case, applied to the court for an order of sale.
The couple had defaulted on the mortgage.
The court postponed the order of sale because the children of the family needed a home for a short period of time.

Question 29

Jones v Challenger [1961]

Answer 29

Court ordered sale of matrimonial home as after divorce purpose of trust ended.

Question 30

Bedson v Bedson

Answer 30

Trust property bought both as matrimonial home and as H business premises
Two purposes and since business premises still ongoing, so there was no order for sale.

The court will decide on the facts presented to it.

An equitable joint tenants can sever by:
Sale
Mortgage
NB formalities s.53(1)(c) LPA 1925

Question 31

Goodman v Gallant

Answer 31

You look to see if there is an EXPRESS DECLARATION - Conclusive. If they did say how they wish to hold the equitable interest, that is conclusive. You don’t go any further.

Question 32

Re Woolnough

Answer 32

Mutual Wills. Usually happen between husband and wife…and sometimes siblings. They know that if one of them dies, they want to leave everything they own to the survivor, but maybe something to the children after the other partner dies. Everything for the spouse for their lifetime, and then after everything goes to the children.
that says it is the act of entering into a mutual will. The partners are acting if they have shares. Because if they are joint tenants you don’t need to have separate wills.

So if wills are made, then they are acting if they have an undivided share. That is why the act of having separate wills is acting as tenants in common with undivided shares.

Question 33

Burgess v Rawnsley

Answer 33

Elaine and John, and the legal estate in land was transferred to them as beneficial joint tenants. If one dies, the survivor would get the lot. But this time E and J are not married.

Elaine ten agrees to buy John’s share of the house. This is an agreement - an oral agreement; they even agree the price. Critically, there is no binding contract because to create a binding contract you need writing. This was pre LP(MP)A. No valid enforceable estate contract, but the court said that didn’t matter because they agreed in principle that this sale would happen. This was effective to severe the joint tenancy in equity.

There was a statement in orbiter …(not binding) Lord Denning: if the court had not found severance by mutual agreement, then what happens in this case…could be enough to severe by conduct.

To sever a joint tenancy by conduct, you don’t have to have an agreement express or implied; it is enough to have a course of dealing that one partner or the other makes it clear …..

“need not amount to an agreement, express or implied for severance. it is sufficient there is a course of dealing in which one party makes it clear to the other that their shares should not longer be held jointly but held in common. “ - Denning.

Question 34

Alienation

Answer 34

s.53(1)(c) LPA - only if by signed writing. If you want to transfer an existing equitable interest, it needs to be done inside writing. This will not affect the legal ownership.

Question 35

R v Cleaver

Answer 35

Forfeiture clause. You can’t profit from your own crime. Homicide is one of the methods of severance.

You can’t severe the joint tenancy in the legal estate, but it will severance the joint tenancy in equity.

Forfeiture Act 1982

Question 36

Williams Glyn Bank v Boland

Answer 36

When Sch 3 para 2 - an interest in land, proprietary right, and actual occupation
If it is a registered title, the buyer is only bound if the interests affecting land are on the register or unregistered interest with override Sch 3 LRA 2002 para 2 (Rights of persons in actual occupation)

Question 37

S.10(3) TOLATA 1996

Answer 37

Obtain consent of parent or guardian if person is under 18 and there is a provision in an EXPRESS trust (S.8 TOLATA)

Question 38

Laskar v Laskar

Answer 38

The presumption that the legal and beneficial interests of a domestic property conveyed into joint names were, in the absence of an agreement between the parties, joint and equal applied to a family home occupied by cohabitants. The presumption did not apply to commercial properties or to property purchased as an investment even where the purchasers belonged to the same family.

Question 39

City of London Building Society v Flegg

Answer 39

The risk is here the buyer will buy subject to the equitable interest unless the buyer does what? Overreaching by appointing a second trustee.