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Co-ownership I (UK), Trust - Coggle Diagram
Co-ownership I (UK)
Introduction
- The idea of co-ownership allows two or more people enjoy the ownership of the land simultaneously
- Ownership of land can be in the form of joint tenant (JT) or tenant in common (TIC)
Joint-Tenant - JT:
- A situation where each co-owner is treated as being entitled to the whole of the land. No distinct shares and no single co-owner can claim any greater right over any part of the land than another
- Both have claim to the land fair and square
Principle of jus accrescendi (right of survivorship):
- Unity of possession - possession of the whole land and no physical division of the land / restriction of use
- Unity of title - JT must derive their title from the same conveyancing document
- Unity of interest - interest in the property must be of the same extent, nature and duration
- Unity of time - interest of each JT must arise at the same time
[If any of these is missing, there cannot be a JT of the land]
Tenant in Common - TIC:
- Co-owners have divided shares in the land and each co-owners can point to a precise share of ownership, even though the land is undivided and treated as a single unit
Main difference between JI and TIC: SURVIVORSHIP
- The principle of survivorship operates between joint tenants
- On the death of any one joint tenant, the entire estate co-owned estate "survives to" the remianing joint tenant/tenants
Solihull MBC v Hickin [2012]:
- Facts: D and D's wife (Hickin) rented property from C (Solihull). D moved out leaving D's wife living alone with daughter. When she died daughter claimed the right to take over property.
- SC held: joint tenancy still in existence and D still had rights. Daughter could've taken over property if both D and D's wife died.
- Reinforces the rule that joint tenancy will always vest in survivor / survivor(s) of 2 or more joint tenants irrespective of whether they are still occupying the property
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Trust
Resulting Trusts (RT)
- Created when there's contribution to the purchase price despite the fact that their name is not on the legal title - EI would be proportionate to their contribution to the purchase price
Dyer v Dyer:
- There is presumption that contribution of money to purchase price will give rise to an intention to retain the beneficial interest, even when the property is placed in the name of another party
Bull v Bull:
- Facts: Property was conveyed to the sole name of X and X tried to evict Y from the property.
- Note: both contributed to the purchase price.
- Held: The contribution to purchase price gives rise to an EI in the propery in proportion to contribution. X holds property on trust for himself and Y
Traditional Approach:
- RT only arises when contribution was made at the time of acquisition
Curley v Parkes:
- Where CA denied C's interest in the property as he was only making mortgage repayments (i.e. after the date of the acquisition of the property)
Carlton v Goodman:
- Facts: Parties ha dpurchase da property in a joint names for the sole occupation of one of them - mortgage executed in joint names but only the occupying party paid mortgage
- Held: no RT in favour of defaulting party
- Presumption of an EI may be rebutted (rejected)
Gifts or advancements
Murless v Franklin:
- Presumption of advancement as the money was given by the father to the daughter. It Shifts the burden on the father to show that it was not meant ot be a gift
McGrath v Wallis:
- The presumption may be refuted where the money had been contributed to the purchase price and where occupation of it is to be shared
Loans
Halifax BS v Brown:
- Loan was given by parents to purchase property, property is implied to be jointly owned by the purchaser (i.e. married couple) and not held on resulting trust for the parents
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Constructive Trust (CT)
- Created when the circumstances are such that it would be unconscionable for the owner of the property to deny the beneficial interest of others
- C must share a common intention that C should have some interest in the land, and this intention is relied on by C to their detriment - S 53(2) LPA
Gissing v Gissing:
- Constructive trust aims to produce an equitable outcome where the owner, by his conduct/words have induced C to act to his/her detriment in the reasonable belief that by so acting, he/she was acquiring a beneficial interest in the land
Pettitt v Pettitt:
- Facts: The property was conveyed to the name of a woman (who purchased the property) and allowed a man to live with her. The man made changes to the home. They got separated and the man claimed that he has beneficial interest in the property as his contribution to the property has increased in value
- Held: Improvements do not entitle the man a EI. Voluntary improvements to make the house more pleasant for common use/enjoyment cannot be used to impute a common intention between parties
What gives rise to a constructive trust?
- Is there common intention between parties?
- If yes: either common intention that can be established through expressed agreement / implied common intention
- If no: there is detrimental reliance by non legal owner
Lloyds Bank v Rosset:
- Facts: Husband and wife arranged to purchase a farm and legal title was conveyed to the husband alone. Renovation was a joint venture and supervised by wife. Property mortgaged and repayment could not be met and bank sued for repossession.
- Held: HoL held that there is no EI (Express Interest) for the wife and what she said was not enough to give rise to CT as there was never any express agreement she would have to share, nor any contribution to the purchase price
- Strict approach: the focus on monetary contribution disadvantages the partner that contributes in other ways, i.e. housekeeping and maintenance
Grant v Edwards:
- Facts: D purchased a house but conveyed into the names of his brother and himself. He told C (a woman pregnant with his child) that her name wasn't added to the title as it may affect her divorce. But C made susbtantial contributions to the to the housekeeping which allowed D to repay the mortgages.
- Held: There is common intention for C to have a share in the property. She acted to her detriment by making substantial contributions to the expenses.
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- Establishing common intention through express agreement
Lloyds Bank v Rosset:
- The first fundamental question that be asked is whether at any time prior to the acquisition / exceptionally at some later date, been any agreement, arrangement / understanding reached between them that the property is to be shared beneficially, based on evidence of express discussions between partners
Eves v Eves:
- Facts: Title was in the man's name. The woman made no financial contribution but she made contributions to the renovation. Parties discussed on the possibility of the woman getting a share in the property but that she was too young to have the property in her name.
- Held: This is sufficient to give rise to CT
Grant v Edwards:
- Facts: The name of the woman was not registered as she was in the midst of a divorce.
- Held: The woman had a share given that there is clear evidence on discussion on distribution
- What gives right to implied common intention?
- No evidence of express common intention (i.e. like an express agreement) but the court may infer a common intention to share a beneficial ownership of the house. This can be inferred from the conduct of the parties.
- Lloyds Bank v Rosset: only a direct contribution can be taken into account (BUT this is a restrictive approach. See Oxley v Hiscock)
Oxley v Hiscock:
- Court questioned on how entitlement to constructive trust can be quantified.
- Court found that C had beneficial interest. Even though her share was not equal to the initial cash contributions, her other payments were taken into account.
- Courts must be fair and regard the whole course of dealing between parties in relation to the property
Stack v Dowden:
- Issue arose on percentage of entitlement. If equity follows the law, parties will be entitled to 50% each. But Baroness Hale awarded 65% to D on basis of her contribution
- Many factors were considered other than financial contributions like understanding between parties, reasons for purchase, financial arrangement between parties, how household expenses are discharged
What has been decided?
- Presumption that equity follows law
- Presumption can be rebutted by showing different common intention - may factors taken into account - based on fact
- Where intention is not clear - consider what is fair having regard to the whole course of dealing
Jones v Kernott:
- Facts: When property is purchased in joint names, there's a presumption that beneficial interest coincide with legal estate. This presumption can be rebutted if there's unequal contribution to the purchase of the property.
- Held: Parties holding differing beneficial shares in the property, proportion to their contributions. This allowed 10% for D and 90% for C
What has been decided?
- Agreed with Stack v Dowden where resulting trust have no place in matrimonial properties except when they are business partners
- Intention can be imputed/inferred. What's the difference?
- The fact that insurance policy is called upon for D to buy a new property inferred that the common intention changed - and that C was to have sole benefit