L2 - Co-Ownership & trusts of land (rev notes)

Question 1

Two types of co-ownership

Answer 1

Joint tenancy (JT) = co-owners own the whole together, not regarded as having shares or treated as separate owners => can’t deal separately with the property + right of survivorship (no severance by will)

Tenancy in common (TIC) = co-owners have separate shares of the co-owned estate/interest, which they can deal w/ individually as they please

Question 2

Only JTs can be created at law

Answer 2

LPA 1925, s1(6): “A legal estate is not capable of subsisting or of being created in an undivided share in land or of being held by an infant”

=> **only JTs are capable of subsisting at law, TIC only possible in equity*

Question 3

No severing a JT at law

Answer 3

= LPA 1925 s36(2): “No severance of a joint tenancy of a legal estate, so as to create a tenancy in common in land, shall be permissible”

=> severance still possible in equity : creates TIC, each former JT entitled to equal shares = Goodman v Gallant (1986), approved by HL in Stack v Dowden (2007)

Question 4

Conveyance to several ppl operates as conveyance to JTs at law

Answer 4

= LPA 1925, s34(2) : at law, any conveyance to several people operates as a conveyance to grantees (the 1st four named and of full age if there are more) as joint tenants, even if expressed to be as TIC, on trust for themselves (and others)

Question 5

Necessary conditions for a JT - 4 unities

Answer 5

time : interests of all co-os should vest = be acquired at the same time

title : co-os should all acquire title by the same means (eg. from same document)

interest : interests of all the co-os should be identical (same nature, duration and extent)

possession : all co-os entitled to possession of the whole land (so no co-ownership if one can say ‘this pt of the land is mine alone’)

Question 6

Conditions for JT - other than 4 unities (2)

Answer 6

• no more than 4 JTs at law = Trustee Act 1925 s34(2) => if more than 4 named, property vests in first for listed, who hold on statutory trust for themselves and others
• legal estate cannot be held by anyone under 18 (even as JT) = s1(6) LPA 1925

Question 7

Relevance of intention of the parties

Answer 7

4 unities = necessary but not sufficient requirements to get a joint tenancy in equity (instead of a tenancy in common) – what you get will depend on intention of the parties

Question 8

JT or TIC - express declaration - conclusiveness

Answer 8

An express declaration as to the nature of the beneficial interest in the property is conclusive = Goodman v Gallant (1986), affirmed by HL in Stack v Dowden (2007)

Question 9

JT or TIC - express declaration - formalities

Answer 9

declaration of a trust of land must comply w/ s53(1)(b) LPA 1925 = be evidenced in signed writing to be enforceable

+ conveyance must use words of severance = words indicated intention that Os should be regarded as having shares in the property ≠jointly owning the whole

Question 10

JT or TIC - no express declaration

Answer 10

equity generally follows the law (JT) except if sitº where court considers csq of JT (survivorship) too unfair to presume it was intended by the parties = presumption of TIC instead (except in family home cases = presumption of JT)

Question 11

JT or TIC - presumption of TIC

Answer 11

3 sitºwhere TIC presumed (bcs survivorship too unfair to presume that was what the parties intended)

• unequal contributions to purchase of non domestic property = Lake v Gibson (1729)
• partnership property : right of survivorship seems inappropriate btw business partners, even where contributed equally to purchase price = Re Fuller’s Contract
• Security for a Loan L where 2 or more ppl lend money secured by same mortgage -> security held as TIC = Morley v Bird (1798)

/!\ not limited to those 3 sitº, possible for court to presume TIC in other circumstances = Malaysian Credit v Jack Chia MPH

Question 12

JT or TIC - Family homes & presumption of JT

Answer 12

Lady Hale in Stack v Dowden : In family home cases, where there is no express declaration “it should be assumed that equity follows the lawand that beneficial interest reflects the legal interests in the property” [54]

=> starting point = presumption of joint tenancy at law and in equity

Question 13

Severance of a JT

Answer 13

= converting JT into TIC (eg to avoid right of survivorship / bcs co-os want to deal w/ shares separately rather than the estate as a whole)

/!\ no severance of JT at law (prohibited by s34(2) and 36(2) LPA 1925) but possible to sever in equity

Question 14

4 methods of severance

Answer 14

• notice in writing = introduced by s36(2) LPA 1925, as amended by TLATA 1996
• mutual agreement = Williams v Hensman
• an act of one of the JTs operating upon his own share = Williams v Hensman
• course of dealing sufficient to show the interests were mutually treated as constituting TIC = Williams v Hensman

Question 15

Severance - notice in writing (4)

Answer 15

• must be served to all JTs = by leaving it at or posting it to their last known address, by registered or recorded delivery = s196(3) LPA 1925
• notice effective once it has been served in one of those ways, even if JT doesn’t in fact receive it = Re 88 Berkeley Road NW9 (1971)
• severance becomes effective from the moment the notice is ‘left’ at the relevant premises rather than when JT actually reads it = Kinch v Bullard
• notice must show intention that there be severance immediately = Harris v Goddard

Question 16

Severance - act of a JT operating upon his own share

Answer 16

= disposing of one’s interest in the property in such a way as to separate it from the joint property => Alienating it (sale, mortgage – also bankruptcy)

• Sale: severance bcs destroys unity of title (P doesn’t share w/ other Co-os)
  /!\ severance takes place in equity as soon as there is a specifically enforceable contract to sell
  /!\ no severance at law => JT can dispose of pt of interest in equity but continues to hold legal estate on trust – can only cease to be a trustee by releasing his interest to fellow JTs or by retiring from the trust = Trustees Act 1925, s39
• Mortgage : JT acting alone (without consent of other JTs) can only mortgage his interest = severs the JT – eg in First National Securities v Hegarty, husband forging his wife’s signature on mortgage documents severed JT
• Bankruptcy : if one of the JTs goes bankrupt, bankruptcy laws transfer his interest to TIB – not a voluntary act but still severs JT

Question 17

Severance - mutual agreement

Answer 17

= ag of all the JTs, express or inferred from conduct

Leading case = Burgess v Rawnsley (1975) : oral ag by one JT (A) to purchase another JT (B)’s share effected severance, bcs parties thinking in terms of ‘shares’

/!\ ag doesn’t have to be legally enforceable (eg bcs doesn’t comply w/ formalities) = Hunter v Babbage

/!\ JT cannot be severed by will (where the other party has not ag to it) - in Re Wollnough: will making = evidence of a mutual agreement to severe, what effected the severance was the agreement

Question 18

Severance - course of dealing showing that the interests of all were mutually treated as TIC

Answer 18

Only obiter views expressed by CA on this category :

Sir John Pennycuick VC : includes ‘negotiations which, although not otherwise resulting in any agreement, indicate a common intention that the joint tenancy should be regarded as severed’
/!\ ‘mere verbal notice’ by one party to the other cannot operate as severance

≠ Lord Denning MR : “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 held in common” = wider defº, seems to cover unilateral declaration by one party wishing to sever
/!\ doesn’t fit great w/ requirements of mutual behaviour in Williams v Hensman

Question 18

Severance - forfeiture as a result of homicide

Answer 18

If one JT kills the other, right of survivorship can’t operate (bcs killer would benefit from crim act) = general principle in the Estate of Hall (1914) case

But under Forfeiture Act 1982 s2, court has power to modify effect of forfeiture if unlawful killing was not murder (applied in suicide-pact case where one survived, but not in DR case)

Question 19

Protecting an interest after severance

Answer 19

Severance must be noted on the title (to avoid any attempt by survivor at concealing it)

• URL: memorandum of severance is endorsed on the original conveyance to the joint tenants
• RL: tenant who has severed should ensure that a restriction is placed on the title register

Question 20

Relationships btw co-owners (4)

Answer 20

Governed by TLATA 1996 bcs co-owned land always subject to a trust of land

• one co-o can’t sell the property (transfer the legal estate) ag will of the other – except by obtaining order for sale from court under TLATA s14
• co-os don’t have the right to exclude each other = Bull v Bull (discussed in A textbook at 379)

+ Under TLATA : co-os have interest in the land itself + statutory right to occupy under s12 – Ts have power to balance btw interest of Bs if several have right to occupy, but doesn’t really help where Ts are also Bs – can be resolved by court under s14

Question 21

Ending co-ownership (3)

Answer 21

≠ways to end co-ownership :

partition = divide premises btw co-os, so that each becomes sole owner (legally and beneficially) of pt of the land  by ag btw co-os or by Ts (with Bs’ consent) under s7 TLATA

sale of the property and division of proceeds – by ag or pursuant to court order under s14

Union of the interests in one of the co-owners
- on death : last survivor becomes solely entitled by right of survivorship
- by agreement : co-os to ag that one acquires the interests of the others = release of BI in JT, assignment of BI in TIC

/!\ both assignment and release = dispositions of BI under s53(1)(c) LPA 1925 = must be made in signed writing (confirmed in Hudson v Hathaway)