Trusts Flashcards
Harris v Goddard
Per Dillon
“Severance… is the process of separating off the share of a joint tenant, so that the concurrent ownership will continue but the right of survivorship will no longer apply”.
Greenfield v Greenfield
The burden of proof is on the person seeking to establish that the joint tenancy has been severed.
Section 36(2) LPA 1925
1) Severance by notice in writing to other joint tenants or
2) by pre 1926 methods of severance
2) = Refers to Williams v Hensman
A joint tenancy can be severed in 3 ways:
1) an act of any of the parties can create a severance as to that share
2) joint tenancy may be severed by mutual agreement
3) any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.
Bedson v Bedson
On severance the beneficial joint tenancy becomes a beneficial tenancy in common in undivided shares and the right of survivorship no longer obtains. f
Goodman v Gallant COA
Upon severance each joint tenant takes an equal share in the land or its value, irrespective of the contributions of the joint tenants to the original purchase price.
Burton v Camden LBC [2000]
As a joint tenant, you cannot transfer to another tenant because each already owns the whole.
Claimant, burton and her friend H were joint tenants of a tenancy granted by the Camden LBC, H had decided to move on and the idea was that B should become the sole tenant of the tenancy and in order to affect that H executed a deed of release, she purported to release to B her legal rights under joint tenancy. Council objected to this arrangement and argued that this release from H to be was an assignment of H’s interest which under relevant housing legislation was ineffective. B argued that there was no assignment because H had nothing to assign. Lord Nicholls said that legal concept relied upon by B, he believed that this concept is not applicable in reality. Majority of HOL upheld view of the council. Lord Millet stuck by orthodox view, agreed that H had nothing to assign so if the end result was that B was the sole owner of the tenancy that can only be achieved by H and B together transferring the assignment to B.
Bathurst v Scarborow [2004] EWCA
Equity presumes that in certain situations there is a presumption that co - ownership takes the form of tenancy in common.
Partnership assets is one.
However, as in this case, the presumption was held to be rebutted where the partners demonstrated a clear intention that the partnership property was to be held beneficially as joint tenants.
Stack v Dowden [2007] UKHL
HL
Where property id transferred to the parties as joint tenants at law, the traditional equitable presumption is reversed: even though the parties made unequal contributions to the purchase price, they are presumed to be joint tenants in equity. (Tihs presumption is rebutable, as seen in stack v dowden). This is unlikely to occur in commercial situations (Hale).
Legally tenants are joint tenants. In equity, there was a presumption of tenants in common. However, HL in Stack v Dowden stated that tenants were joint tenants, reversing the orthodox position, but only in certain situations.
1) Where parties are co-owners/joint tenants of legal estate (not apply on facts of Tizard/Boland)
2) The Law Lords were not precise in equity; one presumption is that co-owners are joint tenants in presumption half share if severance occurred. Or co owners are tenants in common with equal shares.
a. Not clear if beneficial ownership is held by tenants in common by equal shares or joint tenants. The better view is joint tenants, which position taken in Jones.
b. Jones v Kernott [2011] UKSC 53, [2012] AC 776
3) Unlikely to apply in commercial situation, confined to family context, but only where legal title is co-owned.
parties unmarried cohabitees, family home transferred into joint names of both parties. Parties were legal joint tenants of legal estate but how did they own equitable interest? No declaration of trust in transfer setting out equitable ownership but they contributed to purchase price in unequal shares. Orthodoxy, would have led to presumption of tenants in common.
Baroness Hale said – “Just as starting point, where sole legal ownership is joint beneficial ownership”.
If joint tenants of legal ownership there is a presumption of joint ownership of equitable ownership. Traditional equitable presumption has been reversed, even though unequal contribution they are presumed to be joint tenants in equity. Presumption is rebuttable in unusual cases.
Goodman v Gallant
the severance notice must manifest an intention that severance takes place immediately, from moment of notice the joint tenancy ceases and is replaced by a tenancy of common.
The notice declared:
1) Desire to sever
2) Immediately to sever
“I hereby give you notice of my desire to sever as from this day the joint tenancy and equity of and in [blackacre] now held by you and me as joint tenants both at law and in equity shall now belong to you and me in equal shares”. - an appropriate form of words indicating the required intention to sever immediately.
Re Draper’s Conveyance [1969] 1 Ch
So notices in writing does not have to be irrevocable as long as it notes the desire too severe immediately.
Startng legal proceedings can sever joint tenancy.
No requirement that the notice is signed.
Criticised because a notice must be irrevocable whereas, until an order had been made, the proceedings could have been withdrawn (Nielson-Jones v Fedden). Issue of whether notice has to be irrevocable is still unclear.
Husband and wife in joint tenancy in law and equity, parties divorced and wife started issued a summons and an affidavit. This summons ordered court to sell house and proceeds of sale to be distributed by their according interest. Court held: ex-husband died before order was made. Husband estate said severance, wife says no. Court held: affidavit amounted to notice in writing to husband. Criticised on basis that if you have effective notice, the notice must be irrevocable and it was said that the summons and affidavit could be withdrawn so it is not irrevocable. But this has been approved by COA in later cases.
Harris v Goddard [1983]
Lack of immediacy to sever.
A notice in writing which expresses a desire to bring about a result at some time in the future is not a notice in writing within s36(2). Moreover, a notice in writing which shows no more than a desire to bring the existing interest to an end is not good notice, it must be a desire to sever which is intended to have statutory consequences.
Also, the revocable nature of court proceedings is simply a factor for the court to consider.
A husband and wife were joint tenants of the matrimonial home. The marriage broke down and the wife petitioned for divorce. The prayer of the petition asked ‘that such order may be made [pursuant to section 24 of the Matrimonial Causes Act 1973] by way of transfer of property and/or settlement of property and/or variation of settlement as may be just’. Three days before the hearing of the petition, the husband was injured in a car accident and he died a few weeks later. The husband’s executors sought a declaration that the prayer of the divorce petition had been effective to sever the joint tenancy of the matrimonial home.
Re 88 Berkeley Road [1971] Ch
Where notice is set by registered or recorded post there is no requirement that it should have been delivered at the relevant address, unless it is “returned by the post office”, it is deemed to have been validly given. s196(4).
If the letter is sent by registered post, the letter will be deemed served upon posting
held that where notice is sent by registered post then there is no requirement that it should actually be delivered at the actual address. If you use registered post it is deemed to be validly given.
‘Notice in writing’ in s 36 of the Law of Property Act 1925 is to be interpreted in accordance with s 196 of the same Act, such that it is effective whenever it would usually have been delivered, had the wife not intercepted it
Kinch v Bullard
provided that s36(2) notice is delivered by hand or ordinary post t the last known address of the other joint tenant(s), the notice is validly given. = s196(3)
Notice had been given to tenant’s address but notice had been intercepted by person giving notice because person giving notice had changed their mind, as result, not received by another joint tenant. Nevertheless, the notice in writing was effective too severe the tenants due to reasoning in Re 88 Berkeley Road. This occurred in two above cases.
Williams v Hensman
3 forms of severance specified in Williams v Hensman
1) Act of one of the joint tenants operating on his own share
2) Mutual agreement
4) Course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common
Nielson-Jones v Fedden [1975] Ch
Severance held not to have taken place because the written notice dealt with use, rather than ownership, of the proceeds of sale.
Criticised Re Draper’s Conveyance because courts reliance on summons and affidavit which could be revoked. But in Harris v Goddard, the revocable nature of court proceedings is one factor for the court to consider.
involved marriage breakdown, parties negotiated future home, parties agreed that the family home should be sold in order to provide funds to fund the husband, it was clear parties did not intend that the new house belonged to the husband. Was this agreement to sell the house and use it constituted severance. Held: no, negotiations and agreement as to the sale of property say nothing about severance, sale of family home proceeds could well be subjected to joint tenancy. Could be criticised because did the parties really think a joint tenancy should be the outcome? Unlikely either wanted to subject themselves to the survivorship doctrine and perhaps lose everything as they just had a divorce. Judge said that an unenforceable agreement could not effect severance this misunderstands the significance of the agreement.
Burgess v Rawnsley [1975] Ch
“Mutual agreement” and “course of dealings”.
An agreement to sell her share is sufficient for severance. There was either an agreement or at very least a course of dealings.
Honick, the plaintiff’s father, and Rawnsley became friends. In 1967 they contributed in equal shares to the purchase of the fee simple of a house: Honick had been the tenant of the ground floor flat in the house and the first floor flat had become vacant. The property was conveyed to Honick and Rawnsley as joint tenants at law and in equity. However, the parties had different intentions as to their future relationship and Rawnsley never moved into the house. There was evidence that the parties orally agreed that Rawnsley would sell her share in the house to Honick for £750; but she later refused to agree to sell at that price. When Honick died, the plaintiff claimed that the joint tenancy had been severed because of an agreement to sell her share. She claimed no severance. Trial Judge and COA held severance occurred. Argued on case of Neilson v Fedden that no conduct is sufficient unless irrevocable. In this case the agreement was revocable so Rawnsley argued no severance. Rejected by COA Browne said in response that agreement had to be enforceable.
Hunter v Babbage
A mutual agreement need not amount to a valid contract. Where negotiating the court endorsed Burgess v Rawnsley that the significant of an agreement is not that it binds the parties but that it serves as an indication of common intention to sever
joint tenants husband and wife, negotiated what would happen to home when divorced, parties had not finalised an agreement, agreement was there would be unequal shares but not agreed. One party died. Court decided that parties had clearly agreed to sell property and get proceeds so this was sufficient to sever the property. It is agreement which is evident of intention.
Lord Denning thought that a course of dealing was something that happens on the way to the mutual agreement (negotiations), even if they do not get to point of agreement they might meet requirements of course of dealing if it becomes clear that interests falls short of agreement.
John Pennycuick disagreed with Denning, on the facts there was an agreement and once this was accepted, but if there has been no mutual agreement he was not pursued on the facts that there was a course of dealing sufficient too severe. If there had been no agreement (under 2nd category of burgess criteria) he wouldn’t have thought that there was a course of dealings. But he just talks in the negative and does not clarify what a course of dealing is. Therefore, there is a lack of clarification in Hunter v Babbage
Bull v Bull
A mother and her son purchased a house, with the son contributing more than the mother and the son becoming the sole legal owner
It was agreed that the mother would occupy 2 rooms of the house only
Following a disagreement, the son wished to have his mother leave the house, and so sought to sell the house. Could the mother occupy the house pending sale?
Property held on trust by the son for both himself and his mother
Presumption of sale under the trusts for sale system, now replaced by the trusts of land system, presumed sale
Lord Denning – occupation was allowed by the mother pending sale – added fairness to the trusts for sale system
Barclay v Barclay
The testator was the owner-occupier of a bungalow. He was later joined there by one of his sons, the defendant. By his will, the testator directed that the bungalow be sold and the proceeds divided between his two sons and three daughters-in-law. He expressly created a trust of sale. Nothing was done until ten years later, when the plaintiff, one of the daughters-in-law, proceeded to administer the estate: in particular, she sought possession of the bungalow with the intention of selling it and dividing the proceeds son, who was living in property, said that he had a right to occupy until it was sold. The defendant claimed a right to occupy based on Bull v Bull. First instance judge agreed. The COA Lord Denning, made a distinction, in Bull v Bull and Boland and flegg, the prime reason for purchase of property was that they should occupy, so they should have a right to occupy. In Contrast the trust of sale was created expressly so the property would be sold, in this case, there was no right of occupation.
Chan Pui Chun v Leung Kam Ho [2003]
suitability must involve a consideration of natural and physical characteristics of property but also personal characteristics, circumstances of the beneficiary.
There needs to be a match between the person and property. If the land was farming land and the beneficiary could not farm you would say that he was not suitable because the land required, the skills in agriculture.
Rodway v Landy [2001]
concerned property which comprised doctor’s surgery and living property, co-owned by two doctors who fell out but couldn’t decide what to do with property, applied to court under section 14. Court held exercise you power under section 13, this power includes power to partition the land.
The court refused to order a sale of the practice premises as requested by one of them but instead divided up the property into different areas of occupation.
