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Co-Ownership & Trusts (Rights, Duties and Powers within a trust…

- - - - Under the common law courts, the trustee did no wrong as he is the legal owner and the beneficiary has no right to complain
      - Under the chancery courts, it is unconscionable that the trustee accepted a gift for the beneficiary and used it for himself.
- - - - Failure of formalities/registration
      - Being carved out of an equitable estate
  - - - Does the person creating the estate or interest have a legal estate or interest themselves
      - Have any formality requirements been fulfilled
      - Have any registration requirements been fulfilled
- - - - The entire trust own the land together meaning each person in a sense, owns everything
      - No tenant is treated as owning any particular part of the land
      - Right of survivorship applies, meaning shares in the estate continue to be held by the remaining tenants and cannot be passed on
      - 4 Unities must be present for a joint tenancy
        
        Possession
        
        Each tenant has equal right to occupy the land
        
        Interest
        
        Tenants must have equal interest in the land
        
        Title
        
        Tenants must receive share through the same instrument
        
        Time
        
        Each tenant must take their share at the same time
    - - Tenants treated as co-owners of separate shares of the trust even though it has not been separated out amongst them
      - Only unity required is possession
      - Right of survivorship does not apply
      - Tenancies in common cannot be legal rights, but merely equitable ones
      - Number of legal owners is limited to 4 under s34(2) Trustee Act 1925, and is limited to first 4 named over the age of 18
  - - - An express declaration is conclusive under Goodman v Gallant [1986]
      - If no words to the contrary, presumption is made that it is a joint tenancy
      - However, in business transaction, tenancies in common can be assumed in scenarios where partners bought the land as a partnership asset
        
        If business partners pay unequal shares the there is a tenancy in common and the contribution will be reflected in level of interest
- - - - A JT assigns their share to another, thus removing their stake in the trust
    - - Valid contract to sever entered into by all JT's causes severance, assuming it satisfies s2 LP(MP)A 1989
    - - Severance by any course of dealing is sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common - Williams v Hensman
    - - New method introduced under s36(2) LPA 1925
      - Notice must be of intention to sever immediately - Harris v Goddard
      - There is a suggestion in the section that notice in writing can only be given when the same people of the trust are both the trustees and the beneficiaries, but this is likely to be construed widely
- - - - Must act in beneficiaries' best interests
      - Exercise powers for their proper purpose
      - Must not put themselves in a position of conflict
  - - - No right to occupy if the land is deemed unsuitable for the beneficiary under Chan v Leung [2002]
    - - Can exclude beneficiaries from having the right to occupy, or impose reasonable conditions on the right
        
        An occupation rent payable to the other beneficiaries may be payable under Dennis v McDonald
      - In exercising power to exclude or restrict, trustees must have regard to:
        
        Intention of the settlor
        
        Purpose for which the land is held
        
        Circumstances and wishes of beneficiaries who would otherwise be entitled to occupy the land
      - Cannot exclude someone who is already in possession without approval - s13(7) TLATA
  - - - Trustees must first obtain the consent of all the beneficiaries s7(3)
  - - - Intention of the person who created the trust
      - Purpose of which the trust is held under
      - Welfare of any minor who occupies or might reasonably be expected to occupy any trust land as a home
      - The interests of any secured creditor of any beneficiary
- - - - Even if beneficiary in occupation of the land - City of London Building Society v Flegg [1988]
  - - - But trustees may be liable for breach of trust