Lecture 7/8: Co-ownership and Trust (Matrimonial Property) Flashcards
Co-ownership
When different persons hold interests and rights concurrently in the same land
Joint Tenancy
Usual case: Matrimonial Property
Where 2 or more parties hold the property without any words of severance, no indication to describe the proportion of ownership of each owner –> all of the co-owners own the whole interest of the property
Characteristics of Joint Tenancy
- Right of survivorship: arises upon death of any party, his interest auto passes on to other surviving co-owners to become holders of title, despite any provisions in his will and his will will not have any effect
- -> Title will vest in wife and son when husband dies - The 4 Unities
- 1. Unity of Possession: Each of the ST has the right to possess any part of the land –> X has no right to exclude Y & Z to enter any part of the property
- 2. Unity of Interest: Same type of interest & duration of estate and lease title
- 3. Unity of Title: Joint tenancy derived from the same instrument (e.g. document of sale of the matrimonial property)
- 4. Unity of Time: Title must vest in tenants at the same time
Problems of JT
How to divide shares in JT when there is a break up?
- Enforceability of pre-nuptial agreement
- Parties draw up an agreement and spells out the formula as to how the property should be divided in the event the marriage breaks down
- However, Singapore courts do not want to recognise pre-nuptial agreements as people would merely treat marriage as contractual –> courts will take a more conservative approach
- So it is best for married couples to decide if they want to be a TIC/JT upon purchase of the property
Matrimonial Property: Women’s Charter Section 112
How to divide up the matrimonial property in JT as there are no shares specified?
- S112: Law to refer to for division of matrimonial property when divorced –> division of matrimonial assets, sale of such assets, proceeds of sales –> in the proportion that the court decides and thinks is just and equitable
- Duty of the court to look at the matter in totality & take into account all circumstances and look at the extent of both financial and non-financial contribution made by each party
Application of Law of Trust: Equity’s Intervention –> Resulting Trust
- Where property is purchased by ONE person and placed in name of ANOTHER
- Contribution by BOTH spouses, but property in the name for only ONE of them (generally for tax purposes)
Then the beneficial interest in the trust results back to the TRANSFEROR = Doctrine of Trust = Resulting Trust, as equity does not presume gifts, and no free gift to the recipient –> rights of the property should result back to the person who PAID for it
Dyer v Dyer (1788):
Law: the clear result of all the cases without a single exception, is that the trust of the legal estate, whether taken in names of purchasers and others jointly or in the name of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advances the purchase money
–> however, just a presumption and resulting trust can be rebutted by circumstances in evidence
Establishing a Resulting Trust (Relied on the one who PAID)
2-stage analysis pertaining to the existence of a resulting trust
- First stage: Involves the search of transferor’s actual intention –> if an actual intention can be discerned
- Sitiawah Bee Bte Kader v Rosiyah Bte Abdullah: Law: A gift or an express trust/sale was intended, then no question of a resulting trust arises, and the property will be a gift and not a resulting trust –> recipient, therefore, has the right to property as there was evidence that the transferor’s intention was to gift the property to the recipient - Second Stage: No intention can be discerned
- Lau Siew Kim v Yeo Guan Chye Terence: Law: in such circumstances, the law presumes a resulting trust if the transaction cannot be explained as a gift or sale of property –> intention to be a gift is not clear, then the property will result back to the transferor who paid the purchase price
Modern Authority on the Resulting Trust
Westdeutsche Landesbank Girozentrale v Islington Borough Council
- Under existing law, a resulting trust arises where A makes a voluntary payment to B or pay (wholly or in part) for the purchase of the property which is vested either in B alone, or in the joint names of A & B.
- There is a presumption that A did not intend to make a gift to B, the money or property is held on trust for A if he is the sole provider of the money or in the case of a joint purchase by A & B, in shares proportionate to contributions –> only a presumption and can be rebutted - For a resulting trust to arise, proof of payment of the purchase price is crucial. This is because where the money is used for purchase of property in the name of B was provided by A, there is a prima facie implication of a resulting trust to establish that he provided the entire purchase price of the property at the time of purchase
- In cases where only a proportion of price was provided by A then only a proportionate interest can be claimed in terms of presumption
Common Law vs Equity Stance
Common Law: recognised B as the owner as recipient B is reflected in the title as the owner
Equity: Created the Doctrine of Resulting trust whereby if ingredients are fulfilled and the case can be made to by A who has the burden of establishing that he had paid for the property with proof/evidence of payment and did not intent to make it a gift to B –> equity’s interpretation was that B is holding it as a resulting trust for A, as such title will result back to A –> but this is a presumption that can be rebutted
Countering the Presumption of Resulting Trust: Presumption of Advancement
Relied on by the recipient and claimed that in the situation of loco parentis, where the transferor/provider of the money or property is under an equitable obligation to support and owes a duty to take care of recipient or make provision for the person to whom the property is conveyed
- PA can be relied on by the recipient to show the property purchased was meant to be a gift to recipient —> recipient rebutted the PRT –> recipient entitled to keep his gift
Strength of PA
- Nature of relationship: obligation that one party has towards another or the dependency between parties
- State of Relationship: the better the state, the higher the chance of it being a gift –> PA will succeed
Solution: Unilateral Deed of Severance
Prepared by X and serves the legal document on Y that X wants to severe the JT and converted to TIC
Modes of servering the JT: Section 53(5) LTA: Unlteral Deed of Severance: Diaz v Diaz –> Deed is not registered
–> instrument of declaration, approved form, severed on another JT, instrument must be registered
Tenancy in Common
JT can be severed to a TIC, done by a unilateral deed & registered to show that JT has been severed to avoid problems of JT
TIC arises whenever land is limited to 2 or more persons and words of severance are used to spell out each person’s shares/proportion –> TIC has the right to leave behind shares in will & will will be recognized and be reflective as he has already brought an end to rights of survivorship
The presumption under S53(2) of LTA: persons registered as TIC are presumed to hold in equal and undivided shares
Characteristics of TIC
- No rights of survivorship
- Only unity of possession
- Can covert to JT (Section 53(3) of LTA)
Equity’s intervention affecting JT
Did not favour the right of survivorship –> took away the right of JT to leave behind share in will (not recgonised) –> unfair when there is unequal financial contribution in purchase of property
Equity favours TIC: according to contributions to purchase price
Malayan Credit Ltd v Jack Chua
- Equally treat persons as TIC rather than JT
- Where land is bought by business partners –> right of survivorship has no place in business
- When 2 or more purchased land with money provided by them in unequal shares –> equitable distribution distribution of shares according to how much they have paid
