Concurrent & Successive Interests Flashcards
(18 cards)
What are the two main forms of co-ownership and what is the difference between the two?
- Joint Tenancy: A and B hold the entire interest with no distinct share, they are essentially one. This is up to 4 people
- Tenancy in Common: Hold land in undivided shares, each holds a share of the co-owned interest, which they can convey to another in life or leave to pass on death
- NOTE, a tenancy in common cannot exist in law due to s1(6) Law of Property Act 1925
What is co-owned is an interest (i.e. fee-simple, lease)
What are the four unities?
- Unity of Possession: Each of them have the entire possession
- Unity of Interest: The parties hold the same rights and interests in the land (i.e. power to convey or grant a lease requires all parties)
- Unity of Title: Their estate must be created by one and the same act (e.g. same grant)
- Unity of Time: Interest must be acquired at the same time
Unity of possession is the only one required for both joint tenancy and tenancy in common, the rest are only required for a joint tenancy
What is the right of survivorship in a joint tenancy?
Swift v Roberts
Where a joint tenant dies, he has no interest that can pass under his will, they simply fall out of the agreement and the other party continues to hold the interest
How does the Law of Property Act 1925 impose trusts?
- S34: Imposes a trust where land is conveyed to tenants in common
- S36: Where a legal estate is conveyed to two parties as joint tenants, a trust of the land is imposed
What are the different positions that the law will take in determining whether the equitable title is held as a joint tenancy or tenancy in common?
- If there is express declaration of either, this will be adhered to (Goodman v Gallant: if there is expressly declared trust this cannot be overriden by constructive trust)
- If there is no express declaration but words of severance (e.g. divided among, in equal shares), tenancy in common
- If there is equal contribution to purchase price, joint tenancy
- If unequal contribution to purchase price, tenancy in common
- Business partnership, tenancy in common (Malayan Credit v Jack Chia-MPH)
What is severance and how might this occur?
Process by where a joint tenancy is converted into a tenancy in common (IN EQUITY, NOT POSSIBLE TO SEVER JOINT TENANCY IN LAW)
Williams v Hensman
1. An act of any one of the persons interested operating his own share can severe that share
2. Mutual agreement (this does not have to be in writing, Burgess v Rawnsley)
3. Course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common (parties conduct themselves as if they are tenants in common, Burgess v Rawnsley) unilateral declaration does not suffice
Fourth method is s36(2) LPA 1925 by giving the other tenants a notice in writing that he plans to do so. This only applies where estate is vested beneficially (holding legal and equitable title as joint tenants)
What are some qualifications to the rules on severance?
- Harris v Goddard: A notice in writing of a desire to sever must be an intention to bring about the result immediately
- Re Draper’s: A court summons for an order of sale and distribution of proceeds constitutes notice in writing
- Gore & Snell v Carpenter: No common intention to sever a joint tenancy can be inferred if the parties have reservations preventing full agreements
What is the effect of an express trust over land?
- This must be evidenced by some writing under s53(1)(b) LPA 1925
- Goodman v Gallant: The express trust will be conclusive of the parties respective beneficial interests in the property
- This means there is no room to argue based on anything that happened before or at the time of the declaration that a CICT has arisen
- However, a subsequent agreement may be able to vary the interest, this does not need to be written it can be a unwritten informal common understanding (Cymberg v Nilsson)
What is a common intention constructive trust?
Where there is no express declaration of the parties interest, one of the parties may claim they have acquired an equitable interest, or larger share of it, under such trust
What is the position of the common intention constructive trust in joint name cases?
Stack v Dowden & Jones v Kernott
* The legal estate will be held on trust for both parties per S34-36 LPA 1925
* In equity, the starting point is that interest is held as joint tenants but this may be displaced.
To assess whether a CICT arises in family home cases ask:
1. Did the parties have a common intention (either express or implied) that is inconsistent with the starting point?
2. If so, did one of the parties rely on this to their detriment? (confirmed to be necessary in Hudson v Hathway)
3. If so, what is the extent of each’s interest?
The starting presumption may be different if the parties are friends or in a relationship other than a romantic one
How do we determine whether parties had a contrary intention to the presumption of a joint tenancy in equity?
Stack v Dowden
* Domestic context is important and many more factors other than financial contributions can be considered
* This includes reasons why the home was acquired in joint names, purpose of the home, nature of the parties relation, children, arrangement of finances
Jones v Kernott
A common intention to depart from the starting point cannot be imputed (i.e. we cannot say what a party in their position should think based on what is fair and reasonable and not on their actual actions)
[69] Baroness Hale
What is the extent of the share that each party will get if a CICT is found in the domestic context?
Jones v Kernott
* Each is entitled to the share which the court considers fair having regard to the whole course of dealings between them in relation to the property
* This should be given a broad meaning, enabling a similar range of factors that would be relevant to ascertaining their intention (i.e. para 69)
Graham-York v York: this is not some form of redistributive justice. It is the whole course of dealings in relation to the property, not their actual lives
Maybe consider whether they have a materially communal relationship or not, i.e. how do they arrange their finances? (Gardner)
How does the position differ in sole name cases?
The starting point is that A holds the legal title and therefore B has no equitable interest because there is no trust
Can we infer a common intention that B would have an interest in the property? Largely still governed by Lloyds Bank v Rosset:
1. Is there an express agreement, arrangment or understanding between the parties that the property be shared beneficially?
2. If not, it seems only direct contributions to the purchase price (either initially or to later mortgage payments) will suffice
However, in many cases Jones v Kernott rules have been followed and not Lloyds Bank, e.g. in Thompson v Hurst Court of Appeal seems to confirm that the rules that should be followed are Jones v Kernott
Lloyds Bank v Rosset is the highest sole name case being a House of Lords decision, but it has been criticised in Stack v Dowden
What is the scope of the common intention constructive trust outside of the family home?
- Kahrmann v Harrison-Morgan: CICT can arise in a commercial context where there is detrimental reliance on an express agreement
- Marr v Collie: CICT can arise between a couple undertaking a commercial venture
- Laskar v Laskar: Eventhough property was purchased by family, the use of the property made it seem more like a commercial investment, therefore there could be no CICT
- Williams v Williams: Where it is concluded a family property was bought for business purposes, equity will assume it is a tenancy in common
NOTE in the commercial context you can only look at financial contributions. Resulting trust analysis may apply
What rights and powers do trustees and beneficiaries have under TLATA 1996?
TRUSTEES
* S6: Trustees of land have all the powers of an absolute owner. In exercising power their power they should have regard to rights of the beneificary
* S13: May exclude or restrict one, but not all, of the beneficiaries from the land. They may impose reasonable conditions upon them in relation to the land, such as paying expenses, if he is entitled to occupation under S12
BENEFICIARIES
* S11: Right of consultation, beneficiary must be consulted and their wishes be given effect to
* S12: Right of occupation if the purpose of the trust include making the land available for occupation or the land is held as to be so available (does not apply if land is either unavailable or unsuitable for occupation)
What power does the court have in making an order under TLATA?
S14: The court can only make an order relating to the exercise of trustee’s function or declaring a persons interest in the land
S15: Matters that should be considered include intentions of those who created the trust, purpose for which property is held, welfare of minors, interests of any secured creditor. Does not apply to bankruptcy
* White v White: Relevant intention of all the persons who created the trust at the time. Purposes may arise informally, but they must be the purposes subject to which the property is held
* Bagum v Hafiz: Purpose is to give the courts wider discretion than trustees. No power to direct one beneficiary to sell or transfer, however they can direct the trustee to do so and then sell to the beneficiary
What is overreaching?
Defence that a third party who purchases the land may be able to raise to say they have taken the land free from any beneficial interest.
S2 Law of Property Act 1925
* C must be a purcahser of a legal estate in the land (giving some value)
* Must comply with s27, i.e. by paying money to either two trustees or a trust corporation
* Beneficial interest will be reached under s2(2)
What does the case law tell us about overreaching?
Williams & Glyn’s Bank v Boland: Bank had not paid money to two trustees, no overreaching. Wife’s actual occupation was therefore overriding
City of London Building Society v Flegg: A disposition by two or more trustees overreaches any beneficial interest in the land, bank’s charge took effect. Did not matter that parties were in actual occupation as this must be paired with a right in order to be overriding
State Bank of India v Sood: If secuirty in land is granted in relation to pre-existing debt, the beneficial interest can be overreached despite no payment
