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Land law > Trust of land (coown) > Flashcards

Trust of land (coown) Flashcards

1
Q

INTRO-Remember what is trust of land?

A

A trust of land separates the legal title of the land from the equitable ownership rights

Trusts happen with coownerships

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2
Q

INTRO-what is the legal title held by?

A

trustees -no enjoyment rights but rather fiduciary duties and powers of management and disposition over land - for those beneficiares

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3
Q

INTRO-what are beneficiares?

A

beneficiaries ie those entitled to equitable ownership rights -equitable ownership which confers on the beneficiaries of the trust equitable title to the land and rights of actual enjoyment in the land.

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4
Q

INTRO-what are trustees and beneficiares usally?

A

same people

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5
Q

INTRO-what is the trust machinery used to give effect to?

A

used to give effect to both successive and concurrent enjoyment rights in land

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6
Q

INTRO- where are the trusts defined?

A

s1 TLATA 1996 - as being any trust of prop which consists of either express or implied created whether arising before or after 1 jan 1997 - unlike TRUST FOR SALE - trustees under trust for land have no duty to sell but merely a power to do so.

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7
Q

TRUST OF LAND-Trusts of land over again?

A

expressed

implied: resulting / constructive

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8
Q

TRUST OF LAND- when do these trusts arise- already gone over but short terms?

A

ARISE THROUGH THE ABOVE - a trust only exists in cases of coownership

express- self decl by legal owner that it is being held on trust , or land conveyed to another be held on trust- conform with formalities under s.53 1 b - they must be ev in writing- if satisfied= conclusive but rebut if fraud

implied trusts- do not need formalilites
resulting- legal owner may be required to hold land on trust for those who contributed to the purchase of the land - share being proportionate to contrib- rebut r t if did not intend to acquire a beneficial interest e.g gift/loan

constructive- arise by expressed- beneficial ownership shared/inferred- by conduct contrib towards price of prrop whether intitally ongoing or payment of mortage so other factors etc - stack conduct - all following det rel

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9
Q

TRUST OF LAND- who will be trustees in unreg land?

A

will be those named on the title deeds

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10
Q

TRUST OF LAND- who will be trustees in reg land?

A

trustees will be on the proprietorship part of the Land Register.

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11
Q

what are the types of coownership?

A

where two or more people are entitled to possess and enjoy the property at the same time - there are 2 types -regulated by the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).

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12
Q

what are the 2 types?

A

The equitable title of co-owners under trust can either be

joint tenancy
tenancy in common

Typically in modern conveyancing where an Express Declaration of Trust is used, (e.g TR1 Box 11), the co-purchasers will expressly declare a trust in their own favour and expressly declare that they hold the land on trust for themselves, either as tenants in common or joint tenants of the equitable title. This is conclusive either way.
(Note also use of optional form JO by Registry)

Goodman v Gallant (1986)
Roy v Roy (1996)
Pankhania v Chandengra (2012)

Clarke v Meadus (2010)
(exceptional case where express declaration of trust overruled by use of a proprietary estoppel argument based on unconscionability)

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13
Q

OWNER-what are the types of coownership?

A

where two or more people are entitled to possess and enjoy the property at the same time - there are 2 types -regulated by the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).

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14
Q

OWNER-what are the 2 types?

A

The equitable title of co-owners under trust can either be

joint tenancy
tenancy in common

Typically in modern conveyancing where an Express Declaration of Trust is used, (e.g TR1 Box 11), the co-purchasers will expressly declare a trust in their own favour and expressly declare that they hold the land on trust for themselves, either as tenants in common or joint tenants of the equitable title. This is conclusive either way.
(Note also use of optional form JO by Registry)

Goodman v Gallant (1986)
Roy v Roy (1996)
Pankhania v Chandengra (2012)

Clarke v Meadus (2010)
(exceptional case where express declaration of trust overruled by use of a proprietary estoppel argument based on unconscionability)

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15
Q

OWNER-points of the two types?

A

All co-owned legal titles can only ever be held on a legal Joint Tenancy.

As to whether a Joint Tenancy or Tenancy in Common arises, is only relevant when considering the status of how the equitable title to the land is co-owned. The real financial value of the land lies in the equitable ownership thereof.

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16
Q

JT-what is joint ten?*

A

co owners togev as single legal entity- holding whole property as one single owner, with no seperate shares in propert

) there will always be a joint tenancy in relation to the legal title, Ss.34 and 36 LPA 1925. (First named transferees on transfer to be registered as legal proprietors/be the trustees, up to a maximum of the first four, S.34 (2) Trustee Act 1925).

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17
Q

JT-what must you need to amount to a joint tenancy? *

A 
4 Unities of Title : must be present
P.I.T.T.:
Possession
Interest 
Title 
Time
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18
Q

JT-what is meant by possesion?

A

Each joint tenant is entitled to possession of the whole as the others. Each joint tenant can occupy each and every part of the land. None, as a general rule can exclude the other from the land or any part.

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19
Q

JT-what is meant by interest?

A

Each joint tenant is entitled to the whole, and the interest of each joint tenant co-owner must be the same in extent, nature and duration, e.g both A and B in equity must co-own a freehold estate.

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20
Q

JT-what is meant by title?

A

This means that the interest of each joint tenant must vest at the same time.

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21
Q

JT-what is meant by time?

A

This means all joint tenant must acquire their title in the same way, usually by taking the same conveyance/transfer.

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22
Q

JT-what do you also have with joint tenancy?*

A

since single owner togev, no sep share that may deal independantly with others , instead each has potentional to claim seperate share through process of SEVERANCE - in equity only -Gould v Kemp

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23
Q

JT-what do you also have with joint tenancy 2?*

A

The doctrine of Ius Accrescendi applies – ‘right of survivorship’. This means if any one joint tenant dies, the joint tenant(s) remaining automatically inherit the equitable title to the land without the need for any further conveyance etc- there is no share for his heirs to inherint just joint ten - the last joint owner when all died will becomes sole owner at which coownership will cease

-This means a joint tenant can not leave his interest in the property to another in their will. Neither will their interest in the land form part of their estate should they die intestate. It will simply pass to the other joint tenants. If there is only one other joint tenant, they become solely entitled to the land and can leave it in a will should they wish. Where both joint tenants die together in circumstances where it is impossible to determine which one died first, it is presumed the eldest died first and thus the property will form the estate of the youngest under s.184 Law of Property Act 1925

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24
Q

TIC-what is tenancy in common?

A

cowoners hold a distinct, individual, althoughas yet undivided , share in prop - undivided meaning not poss to say which part of prop the shares relate to , share often reflects intial contrib to purchase price

There is still unity of possession and no physical division of the land.

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25
Q

TIC-what does ten in common require?

A

only unity of posses, although others may be present

26
Q

TIC-what happens since t i c have seperate although undivided share in prop?

A

he can deal with share in his lifetime e.g selling or mortgaging it

27
Q

TIC-what does not op in t i c?

A

right of survivorship, share will pass in accordance to will if no will the rules governing intestacy. the shares of any remaining t i c will remain unaffected by death (unless they inherited shre of deed in ten in common

28
Q

TICJT-what would suggest t in c compared to jt?

A
  • However even where the four unities are present there are exceptional circumstances when a joint tenancy but rather a tenancy in common in ‘shares’ will apply in relation to the equitable title:
  • i) where no express beneficial declaration of equitable entitlement exists and words of severance in the conveyancing documents exists, e.g a Transfer to A and B in ‘equal shares’. The words shares suggests a tenancy in common, separate equitable shares.

where two or more persons purchase property together but they contribute towards the purchase price in unequal shares, (either together at the time of purchase -resulting trust), or through later contributions, (constructive trust), a tenancy in common will be presumed in equity.

(iii) Where business partners co-purchase property as part of a commercial or trading arrangement between themselves, it is presumed that they are tenants in common, Lake v Craddock (1732), Malayan Credit Ltd v Jack Chiu MPH Ltd [1986] AC 549.

29
Q

SEVERENCE- what is severance?

A

instead each has potentional to claim seperate share through process of SEVERANCE

you cannot sever jt - s.36 2 lpa 1925 but u can sever a jt in equity to create a tenancy in comon

30
Q

SEVERENCE- why do we want severance?

A

to escape the operation of the right of suvivorship. whilst in joint tenant has no share in land that he can pass to a chosen successor, a tenant in comon does.

31
Q

SEVERENCE- how can we severance?

A 
-written notice - By giving written notice to all the remaining joint tenants, S.36(2)LPA and S.196(3) and (4) LPA.
S.36(2) LPA; S.196(3) and (4)
Harris v Goddard 
Re Draper’s Conveyance 
Kinch v Bullard 
Re 88 Berkley Road
  • act operating on your own share-A joint tenant ‘acting on his own share’; ‘mutual agreement to sever’; ‘any course of dealing sufficient to intimate that the interests of all were to be treated as a tenancy in common’.
  • mutual agreement

-mutual conduct-Burgess v Rawnsley
Greenfield v Greenfield
McDowell v Hirschfield Lipson and Rumney
Barton v Morris (

-homicide
all recognised as effective modes in williams v hensman

– Breaking of the unity of interest, e.g where a beneficial joint tenant of a lease

  • A joint tenant’s bankruptcy, Re Dennis [1981] 2 All.E.R 140.
  • A joint tenant entering into a contract of sale of ‘his share’.
  • A joint tenant mortgaging the property and forging his co joint tenant’s signature, First National v Hegerty (1985) ; Ahmed v Kendrick (1987) 56 P & CR.
32
Q

SEVERENCE- when does severance happen?

A

muts happen during lifetime of severing tenant- not possible to sever by will as will does not take effect till after death of person to whom it relate re caines

  • may be possible by execeution of mutual wills showing a common intention to sever - see mutual conduct
33
Q

SEVERENCE- what is -written notice?

A

-

34
Q

SEVERENCE- what is - act operating on your own share-?

A

-

35
Q

SEVERENCE- what is mutual agreement?

A

-

36
Q

SEVERENCE- what is mutual conduct?

A

-

37
Q

SEVERENCE- what is homicide?

A

-

38
Q

TLATA-what were trusts affecting land treated as under lpa?

A

as ‘trusts for sale

39
Q

TLATA-where are trusts for sale defined?>

A

s.205 1 xxix lpa 1925- where key feature was trustees had duty to sell the trust prop. didnt have to be done immediately since trustees had power to postpone sale.
This created theoretical difficulties as to the nature of beneficial rights behind the trust, (see Re Mayo [1943] Ch 302) therefore the law was reformed by TOLATA 1996.

40
Q

TLATA-what did duty to sell mean?

A

where dipute arose btw concurrent owners as to whether the land should or should not and a subsequent appl was made to court under s.30 lpa to request ct order to settle dispute, the court would be presdiposed towards ordering a sale

beneficiares under trust for sale did not have right to occupy the trust prop since their interests were seen as restin in purchase moneies rather than land itself

as social att changed the trusttes had a duty to sell ebcame inapprop - motivated to replace trusts for sale with new type of trust which was not focused upon underlying duty to sell= trust of land- came into force after jan 1 1997 trust for land

41
Q

TLATA-the effect of tlata optiona?

A

-

42
Q

TLATA-what does tolata provide?

A

TOLATA provides a statutory framework which provides the basic rights, liabilities and duties of trustees, beneficiaries and other parties concerned with any trust of land.

43
Q

TLATA-sumary of provision for tolata?

A

(i) A single unified regime of ‘trusts of land’ as from January 1997 exists in relation to all co-ownership scenarios, irrespective of whether the trust is a trust establishing consecutive or concurrent beneficial equitable entitlement.
(ii) The statutory regime of ‘trusts of land’ applies to any description of trust, whether express, resulting or constructive.
(iii) All pre-existing trusts for sale are converted into Trusts of Land.
successive and conc mainly apply to trust of sale
(iv) A dispute resolution system is set up by the TOLATA to resolve co-ownership disputes.
(v) Trustees of land are no longer under a duty to sell the land.
(vi) Beneficiaries have a statutory right to occupy the land (S.12(1)).

44
Q

TRUSTEES- appoint ment of trustess

A

who appoints?- trustees can be appointed by other trustees under provisions s,36 trustee act - ct has power to appoint , beneficiares who act unamiously and capacity can appoint udner s,19 tlaya- all these provisions are subject to any express clause in trust doc

who can be appointed- anyone who sui juris - willing to act - trustees can also be beneficiaries under trust hw role is trustess- so duties and respons it brings disticnct from beneficial enjoyment they derive from being equitable title holders

number of trustees- max 4 can hold legal title - trust of land can exist with 1 but a min of two trustees to give valid reciept and for overrreaching

formalities- must be appointed by deed

removal- trustee can retire s.36 ta howver need consent of co trust and cant if only 1 trustee remains, beneficiaries can remove trustee s.19 meeting same requiements for appointment this shoudl be done by deed- if trustee dont wanna on own wont stop being ben trust uner land but if beneficial interest dispose stil a trustee

45
Q

TRUSTEES- starting point of powers of trustees?

A

trustees of land all the powers of an absolute owner - s.6 1

46
Q

TRUSTEES-what are the powers?

A

(i) S.6(1) declares that ‘for the purpose of exercising their functions as trustee, the trustee have in relation to the land subject to the trust all the powers of an absolute owner’, (i.e they can sell, lease or mortgage the land, but must act together in concert).

](ii) S.6(5) declares that in exercising their powers the trustees shall have regard to the rights of the beneficiaries.

(iii) S.6(1) gives the trustees the power to sell the land but not a duty.
#

(iv) S.6(3) provides the trustees with the power to purchase any legal estate in England and Wales.
(v) S.8 permits a Settlor to restrict or limit the trustees powers in any formal Trust Deed.
(vi) The trustees right to deal with the property in the manner of an absolute owner can also be qualified by an express requirement of consents to the exercise of any power.

(vii) S.6(2) entitles the trustee to terminate their trusteeship and the trust by forcing a transfer of the legal estate which they hold to the beneficiaries.
(viii) S.9(1) Trustees can delegate any of their powers by power of attorney to any beneficiary under the trust of full age.

(ix) Trustees have a duty to ‘consult’ the beneficiaries of the trust as far as practicable when exercising their functions relating to the land subject to the trust and give effect to their interests where the same are consistent with the general interest of the trust, see, Waller v Waller [1967] 1 WLR 45, but note however the power of overreaching, see City of London Building Society v Flegg [1988] AC 54.
(x) By S.13 trustees are empowered to exclude/restrict a beneficiaries right to occupy the land and hence overturn their prima facie right of occupation under S.12. Any beneficiaries remaining can be required to pay the excluded beneficiary compensation. All the beneficiaries in one go however cannot be excluded. Further the trustees are empowered to impose reasonable conditions on the beneficiary’s right to occupy the land.

47
Q

TRUSTEES-what about court in relation to powers?

A

(xi) S.14 TOLATA states that the court has a wide jurisdiction to make orders relating to the trust of land. S.14(2) states;
‘On an application for an order under this section the court may make any such order :
Relating to the exercise by the trustees of any of their functions,… [including the relieving of consents/duties to consult]…, or
Declaring the nature or extent of a person’s interest in the property subject to the trust of land as the court thinks fit.

48
Q

TRUSTEES-note on courts?

A

Notes:
S.14 allows the court to intervene with any dispute surrounding the function of the trust. The most common dispute is usually ‘what to do with the land’ , some people want sale others do not.
Any person who is either a trustee, or has an beneficial interest under the trust, a chargee, a mortgagee or a trustee in bankruptcy of a beneficiary can apply to the court here.

(iii) The court cannot remove trustees, S.14(3).
(iv) S.15(1) provides a Menu of factors the court must take into account in exercising its jurisdiction under S.14, viz:
(a) The intentions of the parties who created the trust
(b) The purposes for which the property is subject to the trust is held.
(c) The welfare of any minor who occupies the
property as his home
(d) The interests of any secured creditor.

49
Q

TRUSTEES-relevant case law on courts?

A

(Relevant case law, see, Mortgage Corporation v Shaire [2001] Ch 743, per Neuberger J, Re Buchanan-Wollaston’s Conveyance [1929] Ch 738; Jones v Jones [1977] 1 WLR 430; Wilkinson v Chief Adjudication Officer [2000] 2 FCR 82; Bank of Ireland v Bell [2001] 2 FLR 809, TSB Bank Plc v Marshall [1998] 39 EG 208). Chun v Ho (2001); Finch v Hall (2013), Putnam v Taylor (2009)

50
Q

TRUSTEES-what must trustee do with these powers?

A

under duty to excercise reasonable care or skill as in reasonable in circum. if special knowl up it

51
Q

TRUSTEES-how are powers curtailed?

A

-

52
Q

TRUSTEES-what abotu delegation of trustees powers?

A

jointly delegate powers to beneficiaes enetitled to an interest in possesion in teh trust of land

53
Q

BEN-rights to beneficiares?

A
  • consulation- s.11 when t excercise powers
  • consent
  • occupation conerning under trust for sale pre tlata and post tlata
  • they can make appl to court - s 14 tlata e.g settle dispute to ben as to wehther land should be sold or not or resolve disputes over trustees allocation of rights to occupy
54
Q

BANK-what about bankruptcy?

A

Bankruptcy automatically severs any beneficial joint tenancy which may exist and assigns to the trustee in bankruptcy of the relevant beneficiary his equitable share in the land.
The trustee in bankruptcy can then apply under S.14 for an order for sale of the property. However the court has to have regard to factors in S335A Insolvency Act 1986 rather than the normal S.15 TOLATA menu of factors, (Sched.3 TOLATA).

55
Q

BANK-insolv act?

A

S.335A Insolvency Act 1986 states that the bankruptcy court on hearing the trustee in bankruptcy’s application shall make an order [in relation to the land]…as it thinks just having regard to :

56
Q

BANK-as it thinks just having regard to :?

A

The interests of the bankrupt’s creditors
Where the application is made in respect of land which is a dwellinghouse which is or has been the home of the bankrupt or the bankrupt’s spouse or former spouse-
The conduct of the spouse or former spouse so far as contributing to the bankruptcy
(ii) The need and financial resources of the spouse or former spouse and
(iii) The needs of any children and
(c) all the circumstances of the case other than the needs of the bankrupt.

These provisions allow the court to mitigate the effects of bankruptcy on the family home.

57
Q

BANK-Exception contained in S.335A(4)

A

S.335A(4) provides that where… [the trustee in bankruptcy makes…].. his application more than a year after the commencement of the bankruptcy ‘the court shall assume unless the circumstances are exceptional that the interests of the creditors outweigh all other considerations’.

58
Q

BANK-ec cases?

A

‘Exceptional circumstance’ :
See, Re Holiday [1981] Ch 405; Re Gorman [1990] 1 WLR 606; Judd v Brown [1998] 2 FLR 360; Re Raval [1998] 2 FLR 718; Re Lowrie [1981] 3 All.E.R 353; Harrington v Bennet (2000) Ch D, Claughton v Charalambous [1999] 2 FLR 1, Re Bremner [1999] 1 FLR 912; Barca v Mears (2005) 2 FLR 1 Art 8 ECHR (2005) Conv.161, Jackson v Bell [2001] EWCA Civ 387, Donohoe v Ingram [2006] EWHC 282 (Ch), Nicholls v Lan [2006] EWHC 1255.

59
Q

BANK-dean case?

A

Lawrence Collins J considered overall effect of section 335A in this case. He summarised the position as follows:-

(i) The presence of exceptional circumstances is a necessary condition to displace the presumption that the interests of creditors in bankruptcy outweigh all other considerations, but the presence of exceptional circumstances does not prevent court making a sale order;
(ii) Typically the exceptional circumstances relate to the personal circumstances of one of the joint owners such as a medical condition;
(iii) The categories of exceptional circumstance are not to be categorised or defined and the court should make a value judgment after looking at all the circumstances;
(iv) The circumstances must be truly exceptional, meaning ‘outside the usual melancholic consequence of debt’;
(v) It is not uncommon for a partner with children to be faced with eviction in circumstances in which the sale will not produce enough to buy a comparable home in the same neighbourhood or elsewhere. Such circumstances cannot be described as exceptional;
(vi) Creditors still have interest in order being made even if value of property swallowed up in costs.

60
Q

BANK-other bankruptcy cases?

A

Everitt v Budham (2009)
Held: The mental state of the bankrupt’s spouse was sufficiently exceptional as to justify a further postponement of sale beyond the one year grace period.
Barca v Mears (2004)
Application made to postpone sale for more than one year because of special educational needs of son. Court refused postponment but made comments on interaction between Article 8 ECHR ‘right to respect for privacy and family home etc’.

61
Q

BANK-what was the suggestion made for high ct?

A

Suggestion was made by the High Court that the presumption of sale in favour of creditors after one year might contravene Article 8 ECHR, if no proper balance was struck between rights of creditors and those affected. Thus the judge suggested a shift in emphasis be adopted in S.335 applications to ensure Article 8 compatability. This could be achieved in considering what was exceptional by giving proper consideration without the usual presumption of bias in favour of creditors.

62
Q

BANK-what case law hasnt adopted such approach?

A

Despite this analysis subsequent case law has not adopted such an approach:-
Donoghue v Ingram (2006)
Here court paid mere lip service to idea that S.335A might have to be ECHR compliant.
No exceptional circumstances found.
Nicholls v Lan (2006)/Ford v Alexander (2012)
No incompatability between ECHR and S.335A! Proportionality is built in to S.335A!
It will indeed be rare for an Article 8 defence to succeed in S.335A applications.

Land law (10 decks)

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