#19936 - Pq Map Co Ownership I - Land Law

Express Co-ownership

Where two or more people hold the legal title to the freehold or leasehold. They are legally and beneficially entitled to the land and its value.

Common PQ question will be that:

1. One of the joint tenants has died;

2. There has been a conveyance, one of the parties argue that they are tenants in common and therefore own a greater share of the equitable interest. How to divide land in equity?

3. Rebutting the presumption (equity follows law (Stack), so B must rebut the equitable join tenants presumption.

Joint tenancies vs tenancies in common

• At Law, always joint tenants. At law = your right to the title in the land.

• At Law, express co-owners CAN ONLY EVER BE 4 joint tenants (PA 1925, s 36(1)).

  • Max 4 joint tenants (s34(2)), no existence of shares. (if more than 4, the first 4 that are named will be the tenants)

• In Equity, they can be either joint tenants or tenants in common. If they are tenants in common, they will have distinct and quantifiable shares. No limit to number of equitable owners.

  • Usually, equitable owners are tenants in common via severance of their joint tenancy.

• The imposition of a trust Co-Owners of legal estates are trustees (often to themselves) to the legal title under a statutorily imposed trust of land (s34 & 36 LPA 1925)

Step 1: Establishing a Joint Tenancy

1. Have the parties specified an equitable tenancy in common?

Land Registry Conveyancing Form

• Option to tick ‘equitable tenancy in common’ on LR conveyancing form.

• Normally conclusive, irrespective of later events Goodman v. Gallant (1986).

• There must be no room for the use of resulting or constructive trusts (Taylor v Taylor 2017)

• Exception: where there is clear unconscionability to justify a departure from the express declaration on grounds of proprietary estoppel (Clarke v. Meadus (2010)

2. If they haven’t, there is a presumption for equitable joint tenancy (equity follows the law (Stack)

Stack v Dowden

• Presumption: legal & equitable joint tenants.

• If co-owners want their beneficial entitlements in the land to be dealt with as shares, they have to make it clear that want to be tenants-in-common.

• In the absence of an express declaration of equitable interest/ words of severance, presumption is that ‘equity follows the law’.

3. Displacing the presumption

Severence - severance can be mutual or unilateral

• Mutual: All equitable joint tenants become equitable tennats in common. All have their share.

• Unilateral: Only the severing party gets a share, the rest stay as equitable joint tenants.

Express Severence (s36(2) LPA 1925): must be a provision of notice in writing to the other co-owner expressing a desire to sever.

1. Provision of notice must be in writing to the other co-owner

Kinch v Bullard [1999]:

• Principle: Delivery to the address suffices as communication of notice. Receipt not needed.

• Wife sent severance notice to husband, but collected it before he saw it. Held that severance had occurred.

Notice can take many forms:

• Quigley v. Masterson (2011): an application to the Court of Protection also qualified.

• In matrimonial breakdown cases, the notice will usually appear in the divorce petition.

Gould v Kemp (1834): Can’t effect severance in a will. Survivorship operates immediately on a joint tenant’s death

White v White (2001):Ineffective written notice severance

• The property had been conveyed expressly to three people as equitable joint tenants and there had been an oral agreement not to sever.

• An attempted severance by written notice (under s36(2)) was held ineffective because the oral agreement supported the original declaration of the owners as joint tenants.

2. Desire (Intention) to sever must be expressed in language of shares

Harris v Goddard [1983]: Language of shares

• Principle: Clear intention to sever must utilise the language of shares

  • Dividing in a way that ‘may be just’ held to not constitute severance.

  • Since severance didn’t occur, Mrs H retained the right of survivorship.

• Point: Just a few words ( “may be just” versus “will be equal”) could be the difference between an equitable joint tenancy having been severed or not.

Gore & Snell v Carpenter (1990):

• Principle: Suggestion is not tantamount to intent to sever. Suggestion that they should keep 1 house each (language of shares) uncertain.

Survivorship rule: C doesn’t want D to inherit the rest of deceased’s property via survivorship rule. C therefore wants to prove that D & D severed, so C inherits D’s share.

Implied (Common Law) Severance (LPA s36(2)): Achieved by doing ‘such other acts or things as would ... have been effectual to sever’

Williams v Hensman (1861): 4 instances where implied severance can occur without a written declaration:

1. By acting on your own share

• When an equitable JT manifests an intention to no longer be part of the joint tenancy. The very action of dealing with one’s own share thereby severs that share.

• E.g.: selling their shares to a third party, mortgaging it, or going bankrupt (property vested in the trustee in bankruptcy Re Dennis (1992) --> bankruptcy shows it need not be voluntary.

2. By mutual agreement

• When all JTs agree among themselves to terminate the joint tenancy. Must be all JTs. (Wright v Gibbons 1989). They need not act on the agreement to effect severance (Hunter v Babbage (1994)).

• Agreement needn’t be in writing, & intention to sever can be inferred from conduct: Burgess v Rawnsley [1975]. It can’t merely amount to an agreement to use the property some way (Nielson-Jones v. Fedden (1975)). E.g. talking about how to divide the land post-breakup.

3. By entering into a course of dealing/mutual conduct

• Severance because a co-owner treated his interest as a share. The dealings can break down.(Gore & Snell v Carpenter). Entrapment: A asks B how much to buy him out, B answers, severance occurred.

• E.g.: A asks people how much they would pay for his share. Manifesting tenancy in common. Common examples: physical partition of the land so that each co-owner is barred from the others portion.

4. By murdering one of the other joint tenants

• If one joint tenant murders the other he is unable to benefit from the right of survivorship. s2 Forfeiture Act 1982. Rule based on public policy & also applies to manslaughter – Chadwick v. Collinson (2014).

4. Quantification (presumption of equal shares: what is the share distribution)

1. Equal share presumption (Stack)

• Irrespective of contributions. Why: families don’t organise their finances by way of balance sheet (Kernott).

2. Rebutting the Presumption If so, this turns into the quantification question

• Hale in Stack: rebutting must consider the “whole course of dealing”, direct + indirect contributions (holistic).

• To rebut the presumption, it must either be shown that:

1. the parties had a “different common intention” upon acquisition of the home or

2. a common intention (formed after acquisition) that their shares were to change (Jones v Kernott).

• Court looking for the intention of the parties to reflect their rebuttal (of equal share split).

  • Stack: separation of finances

  • Kernott: long time since relationship end, cashing out insurance policy & K stopped paying mortgage.

• See cases facts and factors taken into account in cases below

Step 2: What happens when co-ownership ends?

Co-owners in dispute: how do courts adjudicate? Pressure from creditors.

1. Parties (including 3rd parties) can seek a court order in their favour compelling land to be sold/retained/sale postponed. S14, Trusts of Land and Appointment of Trustees Act, 1996.

• Court will ‘declare the nature or extent of a person’s interest…’) Decision will be binding.

• Trustees of land: anyone who is an express CO/holds legal title.

• Person with an interest in the land: mortgage lender/ anyone who has equitable interest

2. The court has a very wide discretion, though it must consider the following factors: TOLATA, s15(a)(b)(c)(d):

1. The intention of the person(s) who created the trust: original intention for the property purchase

2. The purposes for which the property is held: current purpose why A&B keep the house, now.

3. The welfare of any minor in occupation/ who might reasonably be expected to occupy the property.

   • Edwards v Lloyds [2004]: Sale postponed for 5 years, immediate sale would be ‘unacceptably severe’ on the welfare of the 2 children

   • BUT: White v White [2003] moving to a smaller house did not count as diminished welfare.

4. The interests of any secured creditor (gives mortgage lenders a right to have...