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Transcript of Presentation
Further, in looking at the issue where the property was acquired in joint names, co-ownership will be considered.
And lastly, in advising Tessa of selling the house, TOLATA will
be discussed. ISSUES Conclusion CONCLUSION ISSUE ISSUES ISSUES ISSUES Is Olga entitled to a share of the property, under beneficial interest ?
If so, what would the size of the respective share be? Tessa Olga Tessa Olga Tessa might claim her share to the property in relation to either resulting or constructive trust and under principle of proprietary estoppel. However the greater beneficial interest she might be entitled to, would be most likely under common intention constructive trust.
Olga is unlikely to acquire a share of the property relying on constructive trust, unless the court use the approach in Stack v Dowden and prove common intention by indirect contribution.
If proven under joint tenancy, Olga and Tessa will be entitled to half the share of the property, but under tenants in commons they will take notional shares in regards to their individual contribution.
Tessa should seek a buy out of her equitable share in the property. However if that fails, she can apply for a court order of sale under s.14 TOLATA. Introduction What if the flat was acquired in the parties joint name? Law of Property Act 1925 s1 (6) Lord Browne-Wilkinson In order to succeed as joint tenants: Four Unities have to be present: Possession Interest Title Time If Four Unities proven = joint tenant holding equal shares. Trust of Land Law of Property Act 1925 - section 36 (2) Leonard may have declared a trust of land through a DECLARATION. Olga will hold the legal title for them as joint tenants of the beneficial interest. What if express trust was declared? Tenancy in Common Olga wants her own share - Severance The principle of survivorship does not operate. Unity of possession must be satisfied. Both Olga and Leonard would enjoy a "notional" share. - How feasible is Tessa's wish to to sale the London property?
- Does she have an interest in the property to enable the use of s.14 TOLATA?
- What are her chances of success? A Brief Outline Buy Out Conclusion - The most expedient course of action for Tessa would be to seek a buy out of her share in the property rather than an order of sale of the property.
- The courts favour this approach s.14 TOLATA 1996
- Tessa has an equitable interest in the property, so is eligible to apply for a court order of sale. If succeeful under joint tenancy than she is more likely to be entitled to half of the property share. If criteria of joint tenancy are not proven: Edwin and Tessa are co-owners,
but are they s.15 Requirements Under Tenancy in common she might be likely to be entitled to what she brought to the relationship. Joint tenants or (a) The intentions of the person or persons (if any) who created the trust,
(b) The purposes for which the property subject to the trust is held,
(c) The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home, and
(d) The interests of any secured creditor of any beneficiary.
Tenants in common In conclusion •In conclusion Tessa should seek a buy out of her equitable share in the property rather than seek an order of sale under s.14 of TOLATA as this would be the most expedient solution. Tessa's share would depend on the agreement between her and Edwin. •Edwin and Tessa brought a property for the purpose to be their home.
•The purchasing arrangement was:
• Edwin contributed £50,000
• Tessa’s contributed £20,000.
•Edwin took out a mortgage to cover the short fall.
•The house was registered in Edwin’s name alone making him the legal owner of the property. Express agreement to be joint tenants? Type of agreement If they did not specify the type of co-ownership they wish to have the court would examine joint tenancy and its requirements in detail and tenancy in common may arise in equity. Joint Tenancy Law of Property Act 1925 section 1(6) Co-owners of any legal estate are automatically joint tenants and they hold the estate as trustees.
Joint tenancy can subsist in legal estate or equitable or both at the same time. Any transfer of land to joint tenants operates as to make them on single owner, as established in Hammersmith and Fulham LBC v Monk Establishing Joint Tenancy Right of survivorship Presense of the four unities - possession
- title Tessa may be successful in her claim as a joint tenant, provided there was no severence, in which case she would be entitled to 50% share in the "Family Home". Tenancy in Common Co-owners hold distinct shares of the property. Characteristics: No right of survivorship.
Only unity of possession is required. Each tenant is as much entitled to possession as any other as in the case Wight v IRC Equity follows the law, however... Equity’s starting assumption is therefore that joint tenants of the legal estate likewise hold the equitable estate as joint tenants - Pettittt v Pettitt. However, it is displaced by any of a number of contra-indications that, regardless of the mandatory joint tenancy at law, equitable ownership was intended to take the form of tenancy in common - McKenzie v McKenzie. In Edwin and Tessa’s case: where there is a mortgage and where the purchasers contribute unequal proportions towards the purchase of the property, equity presumes the resulting equitable ownership is intended to reflect the contribution - Stack v Dowden. Conclusion - an advice to Tessa whether she has any interest in the property conveyed solely to Edwin
- what is Tessa's share in the property (if any) If Tessa is successful in proving Joint Tenancy - express or implied, she would be entitled to a 50% share in the property. Resulting Trust However, as the contributions of the parties are unequal tenancy in common may arise in equity - Tessa would receive a share proportionate to her contribution, a minimum of £20 000. How to aquire a share of the property By equitable interest
No protection under Martrimonial Causes Act 1973
Primarily under resulting or constructive trust Common intention Express common intention:
Inferred common intention:
Conduct of the parties
Lloyds Bank plc v Rosset (1991): only direct financial contribution
Stack v Dowden (2007):
"hurdle to high" 'holistic approach' - indirect contributions Detriment Olga needs to prove that she acted to her detriment in reliance on a common intention
Grant v Edwards (1986) Shares Starting point: Intention of the parties
Where no intention, fairness or intention?
- Oxely v Hiscock and Stack v Dowden
- Jones v Kernott Conclusion Constructive trust:
Burns v Burns and Rosset - no share
Stack v Downden - inferred common intention by indirect contribution
Law Commission’s proposed reform - A resulting trust is an implied trust that confers a share of beneficial ownership on a person
who has contributed to the acquisition of the property
- interest proportionate to the financial contribution towards the purchase price of the property
- Tessa's share proportionate to £20,000 out of £350,000 total price of the house Constructive Trust Bull v Bull Common Intention Constructive Trust - interest in the property (belonging to Edwin)
- Tessa had acted to her detriment i.e. by paying (Edwin's) mortgage installments (Gissing v Gissing)
- Tessa relied on the expectation in acquiring an interest in the property Establishing common intention constructive trust - any indirect or direct contributions both on the outset as well as during the course of the relationship (Stack v Dowden)
- intention of the parties as to the possible beneficial interests in the property - substantial contributions to housekeeping expenses enabling the other party to pay the mortgage instalments (Burns v Burns) - where a person has obtained an advantage by acting fraudulently or unconscionably or (perhaps) inequitably (Bannister v Bannister) - courts' power of interpretation in deciding upon the shares over the property in relation to the whole course of dealing between the parties ( Oxley v Hiscock ) Overriding Interest - Sch.2 para.3. LRA 2002.
- actual occupation Sch. 1 Clause 2(2) + interest in the property (Williams & Glyn's Bank v Boland) Proprietary Estoppel - satisfied by the minimum award necessary to do justice (i.e. no more than a monetary award)
- Lord Walker's 'mere equity'
- essential elements:
a certain interest
unconscionability Thorner v Major , Cobbe v Yeoman’s Row Management - Tessa's entitlement to the share proportionate to her financial contribution to the purchase price (resulting trust - £20,000)
- Tessa as a beneficiary under constructive trust might be entitled to the share based on her both financial and indirect contributions during the course of the relationship (most preferably)
- Tessa might be entitled to the share based on principle of proprietary estoppel Resulting trust Contribution towords the purchase price
Paying household expences not sufficient
Burns v Burns (1984) Constructive trust Lloyds Bank plc v Rosset (1991)
- Common intention + acted to his/her detriment s.15(1)(a) & (b) •s.15(1)(a)- Through his failure to keep his word to add Tessa to the legal title was detrimental to Tessa as the original intention of creating a joint tenancy never materialised.
•s.15(1)(b) - The property was brought with the purpose of cohabitation, i.e. to share a home. The collapse of the relationship meant that the purpose no longer existed.
- Rawlings v Rawlings s.14(1) – Any person who is a trustee of land or has an interest in property subject to a trust of land may make an application to the court for a order under the section.