TERMINATION OF CO-OWNERSHIP

Question 0

What is Severance?

Answer 0

Severance is destroying one of the four unities to convert a Joint Tenancy into a Tenants in Common.

Question 1

What are the three ways a Joint Tenancy can end?

Answer 1

1. Conversion into tenancy in severalty
2. Severance (by conversion into a Tenants in Common)
3. Partition or sale under s37-42 PLA

Question 2

What are the three methods of Severance?

Answer 2

Williams v Hensman:

1. By alienation
2. By Mutual agreement of parties
3. By Course of conduct that is sufficient to indicate there is severance.

Question 3

Alienation.

How do you get Alienation at law?

Answer 3

Under s59 of the Land Title Act. This codifies the position in Corin v Patton: a joint tenant may unilaterally sever the joint tenancy by the registration of a transfer signed by the owner.

Question 4

What are the requirements for Alienation under s59 Land Title Act?

Answer 4

1. The registered owner must register the transfer (Lennon v Bell and Corin v Patton)
2. (2) the document must be given to all other joint tenants
3. (3) On registration, the registered owner (new owner) holds as tenant in common with other registered owners.

Thus severance is only effected on registration.

Question 5

What must be done to register the transfer?

Corin v Patton

Answer 5

Corin v Patton
In this case Mrs Patton was dying. She was married to Mr P and held her interest in Joint Tenancy.
However, Mrs P did not want Mr P to have her share of the property.
She purported to transfer her share to her brother, thus ending the joint tenancy and the right to survivorship.
Mrs P signs a transfer but she did not arrange for the Certificate of Title (COT) to be reproduced by the mortgagee.
A certificate of title is necessary for a transfer of title.

Court held: not everything that needed to be done was done to effect the transfer. Therefore there was no effective transfer.
Mrs P must register the transfer of that share under s182 Land Titles Act.

Question 6

What are the requirements for s59?

Answer 6

The transfer must be registered
Lennon v Bell
This deals with s59.
Mrs Lennon was seriously ill. The daughter had her power of attorney and she signs a copy. She send a copy to Mr Lennon’s solicitors, but Mrs Lennon dies and then the application is lodged for registration.
She did not comply with s59 (there was no registration), therefore no severance. This was not a case of a gift (which is where s200 applies).

Question 7

What is the relevance of s200 PLA?

Answer 7

This is in the circumstances of a gift.
The donor has the capacity to make the gift by giving CLEAR AND EXPRESS intention to the registrar of titles that they want to certificate to BE MADE AVAILABLE for the transfer.
In doing this, it is deemed to be effective transfer.

Question 8

How can parties transfer so as to effect severance?

Answer 8

1. By cross transfer where one joint tenant transfers his/her interest to another: Wright v Gibbons
2. A joint tenant can transfer his/her interest to a stranger
3. Alienation in equity (specifically enforceable agreement to transfer)
4. Transfer by way of gift: Corin v Patton
   5: Transfer to a trustee to sever joint tenancy

Question 9

What is the authority for Cross transferring to sever Joint Tenant?

Answer 9

Wright v Gibbons
In this case, there were three joint tenants. Of the three, two did not like the third and wished to keep their joint tenancy but sever with the third.
They purported to do a cross transfer.

Court held: This was not sufficient to create a new tenancy. The interests are not all being created at the same time. This is because the transfer from A to B is registered as one transfer and then from B to A is registered as the next one. So the unity of time is not present.
As a result, the whole joint tenancy was converted into a tenancy in common.

Question 10

How does one alienate in Equity?

Answer 10

1. A specifically enforceable agreement of contract but is not registered subject to s36 of the PLA
2. In the case of a gift, it must be complete in accordance with s200 PLA: the assignor must have done everything necessary to effect the transfer - Milroy v Lord
3. A contract signed by all the joint tenants: Re Allingham

Question 11

What are the cases for Partial Alienation (under alienaable in equity)?

Answer 11

1. Lyons v Lyons
2. Frieze v Unger
3. s58(2) Bankruptcy Act

Question 12

What is the case Lyon v Lyon about?

Answer 12

In this case, under old system of land, when a person took out a mortgage, the certigicate of title was taken so as to have security. The bank therefore had title.
In the new Torrens system, the COT is not taken, but a charge is put over the property, which upon default, the Bank has the right to sell.
Nevertheless under the new system the person still holds the COT, so there is no transfer of that.

In this case, there was only a charge on the land by the bank (S72 LTA), there was no transfer of title, therefore the Joint Tenancy was preserved.

Question 13

What is the relevance of Frieze v Unger

Answer 13

A lease only suspends the joint tenancy for the time of the lease.
In this case, a lease was granted. It is a lesser interest than that of the title. If the title is ownership, and the lease is the lesser interest, then this does not destroy the unity of interest.

Question 14

What is the relevance of s58(2) Bankruptcy Act?

Answer 14

This is essentially involuntary alienation.
Where a person goes bankrupt, the property they have is involuntarily transferred to a trustee. This vests title of the property in the Trustee, which consequently severs Unity of Title.

Question 15

How can there be severance by Mutual Agreement?

1

Answer 15

1. By a specifically enforceable agreement between ALL joint tenants, in Equity, so long as it complies with s11 of PLA.
   All parties must sign it

Question 16

How can there be severance by Mutual Agreement?

2

Answer 16

Mutual wills severance

Question 17

How can there be severance by Mutual Agreement?

3

Answer 17

Formal Agreements.
Re Pozzi: the parties must register it, otherwise, if one party dies, the joint tenancy and property would go to the other partner.

Question 18

How can there be severance by Mutual Agreement?

4

Answer 18

Informal agreementst: Scott v Harperr
In this case, a couple was separated. They had signed a basic agreement as to settlement, but the wife sought a greater share but parties did not agree. She died and left her estate to her daughter. This would not be possible if there was still a joint tenancy
Held: the agreement had concluded. They were discussing what share they would get. Therefore, there was severance in equity at the date, therefore she could transfer her estate to her daughter

Question 19

Can there be severance by Conduct?

Answer 19

Yes: Abela v Public Trustee.
In this case, there was a consent order made in divorce proceedings between joint tenants.
The husband died after the dissolution of the marriage however the proceeds of sale were not to be released until further order of the court.
Severance by Mutual agreement was found
The judge concluded that severance by conduct “may also be affected by the conduct of the joint tenants not evidencing an agreement to sever, but showing a common intention that the joint tenancy shall be severed.

Question 20

What is Severance by Course of Conduct?

Answer 20

Severance may occur by any course of dealing sufficient to intimate that the interest of ALL were mutually treated as constituting a tenancy in common.
When this is the case, a course of dealing must be found by which the shares of all parties have been affected: Williams v Hensman

Question 21

Magill v Magill

Answer 21

Two brothers owned the land as joint tenants.
One brother, Francis M, died in 1991 and the other died in 1992.
A declaration was sought as to whether earlier correspondence between the brothers and their solicitors constitute a mutual course of dealign such as to constitute a severance of the joint tenancy.
Court held: There must be a common intention that the joint tenancy should be severed. Therefore there must be a clear indication by each party that in their minds, severance had occurred.
In this case, it was the intention of both that they wished to sever joint tenancy.

Question 22

What other way can there be severance?

Answer 22

By Homicide!
Where there are more than three joint tenant’s, the MURDERED co-owner’s interest will be held on constructive trust by the murderer for the other tenants: Jurovich’s case. The murderer holds this as a tenancy in common.
Re stone for basic principle that there is no severance at law.

If there are two joint tenant’s, then it will be held by the murderer on construct trust for the victim’s estate.

Question 23

How can a tenancy in Common be terminated?

Answer 23

1. Conversion into a tenancy into Severalty; or

2. By partition or sale under ss37-42 PLA

Question 24

How does a person sever by partition?

Answer 24

s38(1) one or more co-owners can apply to the court to appoint a statutory trust for the Partition.
The court appoints trustees of the property and vests in them, tittle so that they can effect the sale or partition.

s37B: the function of trustees is to effect a physical division of the land.

Question 25

Does a court have to order a statutory trust for sale?

Answer 25

No:

s38(4) - a court can order a partition if good reasons can be shown why the property should be partitioned and not sold

Question 26

What is an example of s38(4) where it was better to sell than partition?

Answer 26

Re Darby
In this case, the courts held that if they divided the property, it would lose it’s commercial value so they held it was better for a statutory trust of sale.

Question 27

What is the relevance of Panzutti v Trask?

Answer 27

Any owner of real property, no matter how small may be his/her share, may apply under the provision for an order of partition.
The test to be applied is:
Whether a sale of the property and a distribution of the proceeds would be more beneficial than an order for partition.

Question 28

How does a person sever by sale?

Answer 28

One or more parties can make an application under s38(1) PLA.
S37A, the property is held on trust for sale.

Question 29

What considerations do the courts consider when an application for sale or partition is made?

Answer 29

1. Nature of land
2. Number of parties
3. Accents or disabilities of some of those parties
4. Whether it’s beneficial for parties.
   In Pannizutti v Trask, there are economic benefits and emotional considerations
5. Vindictiveness in seeking sale rather than partition: Schnytzer v Wielunski - the size and shape of land meant land was readily capable of partition into separate ownership
6. Interest of majority of co-owners.

Question 30

Does the court have a jurisdiction to reject an application for sale or partition?

Answer 30

Yes they do: Re Permanent Trustee Nominees v Coral Sea Resort Motel.
However: Nullagine Investments
Decision of the HC where it said a contractual provision expressly prohibiting an application for the partition or sale of land should be looked at with a strict approach.
A right of first refusal does not preclude parties from applying for a sale, not even if procedure set out in contract has not been complied with.