Trust of land (coown)

Question 1

INTRO-Remember what is trust of land?

Answer 1

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

Trusts happen with coownerships

Question 2

INTRO-what is the legal title held by?

Answer 2

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

Question 3

INTRO-what are beneficiares?

Answer 3

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.

Question 4

INTRO-what are trustees and beneficiares usally?

Answer 4

same people

Question 5

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

Answer 5

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

Question 6

INTRO- where are the trusts defined?

Answer 6

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.

Question 7

TRUST OF LAND-Trusts of land over again?

Answer 7

expressed

implied: resulting / constructive

Question 8

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

Answer 8

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

Question 9

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

Answer 9

will be those named on the title deeds

Question 10

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

Answer 10

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

Question 11

what are the types of coownership?

Answer 11

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).

Question 12

what are the 2 types?

Answer 12

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)

Question 13

OWNER-what are the types of coownership?

Answer 13

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).

Question 14

OWNER-what are the 2 types?

Answer 14

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)

Question 15

OWNER-points of the two types?

Answer 15

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.

Question 16

JT-what is joint ten?*

Answer 16

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).

Question 17

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

Answer 17

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

Question 18

JT-what is meant by possesion?

Answer 18

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.

Question 19

JT-what is meant by interest?

Answer 19

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.

Question 20

JT-what is meant by title?

Answer 20

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

Question 21

JT-what is meant by time?

Answer 21

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

Question 22

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

Answer 22

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

Question 23

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

Answer 23

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

Question 24

TIC-what is tenancy in common?

Answer 24

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.

Question 25

TIC-what does ten in common require?

Answer 25

only unity of posses, although others may be present

Question 26

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

Answer 26

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

Question 27

TIC-what does not op in t i c?

Answer 27

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

Question 28

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

Answer 28

• 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.

Question 29

SEVERENCE- what is severance?

Answer 29

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

Question 30

SEVERENCE- why do we want severance?

Answer 30

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.

Question 31

SEVERENCE- how can we severance?

Answer 31

-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.

Question 32

SEVERENCE- when does severance happen?

Answer 32

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

Question 33

SEVERENCE- what is -written notice?

Answer 33

-

Question 34

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

Answer 34

-

Question 35

SEVERENCE- what is mutual agreement?

Answer 35

-

Question 36

SEVERENCE- what is mutual conduct?

Answer 36

-

Question 37

SEVERENCE- what is homicide?

Answer 37

-

Question 38

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

Answer 38

as ‘trusts for sale

Question 39

TLATA-where are trusts for sale defined?>

Answer 39

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.

Question 40

TLATA-what did duty to sell mean?

Answer 40

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

Question 41

TLATA-the effect of tlata optiona?

Answer 41

-

Question 42

TLATA-what does tolata provide?

Answer 42

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.

Question 43

TLATA-sumary of provision for tolata?

Answer 43

(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)).

Question 44

TRUSTEES- appoint ment of trustess

Answer 44

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

Question 45

TRUSTEES- starting point of powers of trustees?

Answer 45

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

Question 46

TRUSTEES-what are the powers?

Answer 46

(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.

Question 47

TRUSTEES-what about court in relation to powers?

Answer 47

(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.

Question 48

TRUSTEES-note on courts?

Answer 48

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.

Question 49

TRUSTEES-relevant case law on courts?

Answer 49

(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)

Question 50

TRUSTEES-what must trustee do with these powers?

Answer 50

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

Question 51

TRUSTEES-how are powers curtailed?

Answer 51

-

Question 52

TRUSTEES-what abotu delegation of trustees powers?

Answer 52

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

Question 53

BEN-rights to beneficiares?

Answer 53

• 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

Question 54

BANK-what about bankruptcy?

Answer 54

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).

Question 55

BANK-insolv act?

Answer 55

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 :

Question 56

BANK-as it thinks just having regard to :?

Answer 56

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.

Question 57

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

Answer 57

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’.

Question 58

BANK-ec cases?

Answer 58

‘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.

Question 59

BANK-dean case?

Answer 59

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.

Question 60

BANK-other bankruptcy cases?

Answer 60

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’.

Question 61

BANK-what was the suggestion made for high ct?

Answer 61

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.

Question 62

BANK-what case law hasnt adopted such approach?

Answer 62

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.