Co-ownership - Lecture notes PDF

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1 Co-ownership  Always remember legal title will always be a joint tenancy!  Equitable title can change from joint tenancy to tenancy in common. Introduction: the context of co-ownership o Co-ownership = ownership of land by two or more people simultaneously (entitled to possession of the whole of...

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1 Coowner shi p

 Al waysr ememberl egalt i t l ewi l lal waysbeaj oi ntt enancy! t abl et i t l ecanchangef r om j oi ntt enancyt ot enancyi ncommon.  Equi

I nt r oduct i on:t hecont extofcoowner shi p o Coowner s hi p=owner shi pofl andbyt woormor epeopl esi mul t aneous l y ( ent i t l edt opos s es s i onoft hewhol eoft hel and)–mi ghtal s os eei tex pl ai ned aswher et woormor epeopl ehav econc ur r entr i ght si nt hel and o Wear enotl ook i ngwher epeopl ehav es uc c es s i v er i ght swear el ooki ngat c onc ur r entr i ght s–t hi si sgener al l yaf ami l ys i t uat i on o Coowner s hi pmus tt ak epl ac ebymeansofaTRUST( Tr ustmodel ) o Ev eni fwedon’ thaveanex pr es st r us tat r us twi l laut omat i c al l ybei mpos ed ( Sec t i on34and36LawofPr oper t yAc t1925) o Eas yi l l us t r at i on–t wopeopl edec i det heywantt obuyahous et oget her ,t hey wi l l r egi s t ert hems el v esast hej oi ntowner soft hel egalt i t l e( t het r us t ees )t hen t heyhol dt hatpr oper t yont r us tf ort hemsel v esasbenefic i ar i es,t het r us t ees andbenefi c i ar i esdon’ tneedt obet hes amepeopl e,butof t enbec aus ewear e t al k i ngaboutt wopeopl ei nar el at i ons hi pt heyar et het r us t eesand benefic i ar i es o 4ar east hatwear egoi ngt ot hi nkabout 

Howr i ght sar eac qui r edi nt hepr oper t yt obegi nwi t h-Ac qui si t i onof i nt er es t si nt hehome( wi l l l ear nt hi smor ei nt r ust s)

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Themec hani csofcoowner s hi p–f or msofcoowner shi pand ‘ s ev er ance’ –l ookatj oi ntt enanc yandt enanc yi nc ommon( f or msof c oowner s hi p)

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Thel egalf r amewor kofcoowner s hi p–TOLAT A1996-Howt hel aw deal swi t hc oowner s hi pwhent hepar t ner shi pf al l sapar t

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Howar epur c has er sofapr oper t ywhi c hi scoownedar eaffec t edby t hi st r us tofl andmachi ner y ?

3

2 Themechani csofcoowner shi p •

Howi st hepr oper t yhel datt hes t ar t ?

•

Hasany bodys ev er edt hebenefi c i al i nt er es t ?

Di sput esovert het r ustpr oper t y •

Howwoul dt hec our tdealwi t hadi sput ebet weent hecoowner sort hec oowner sandt hebank ?( TOLAT A1996)

Themechani csofcoowner shi p:t ypesofcoowner shi p: o J oi ntt enanc y o T enanc yi ncommon

T enanc ydoesnotr ef ert oal eas ei tj us tr ef er st ot hehol di ngofl and,y oucanc oown al easehol dorf r eehol d.

Feat ur esofJoi ntTenancy o Canex i s tatl awori nequi t y–ourcoowner scanhol dt hel egalt i t l eandt he benefic i ali nt er es tc anal s obehel dasaj oi ntt enanc y o ‘ Whol l yent i t l edt ot hewhol e’pr oper t y( nev erownadi s t i nc ts har e)–y ouwi t h y ourot herj oi ntt enant sar ewhol l yent i t l edt ot hewhol e,i nt er es ti nt heent i r et y – •

Bur t onvCamdenLBC •

eac hcoownermus tber egar dedasbei ng‘ whol l yent i t l edt o t hewhol e. ’perLor dMi l l et t

•

Hammer smi t handFul ham LBCvMonk: •

Tr ans f erofl andt ot woormor epeopl easj oi ntt enant s ‘ oper at essoast omaket hem ( t hej oi ntt enant s) ,vi savi s dBW t heout si dewor l d,onesi ngl eowner . ’perLor

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Li k et heyhav emer ged,bec omeoneper sonent i t l edt ot hewhol e

o Nev erwr i t eaboutaj oi ntt enanc yt hatBobowns1hal fandAnnaowns1hal f ! ! –t her ei snos uc ht hi sasas har et heyar eent i t l edt ot hewhol epr oper t y o Ex i s t enceoft hef ouruni t i es–PI TT–AGSecur i t i es

3 •

Pos s es s i on–al lt hec oowner sar eent i t l edt opos est hewhol eoft he l and,noonec oowneri sent i t l edt oex c l udet heot herf r om anypar tof t hel and

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I nt er est–r equi r est hecoowner st ohav ei dent i c ali nt er es ti nt hel and i nt er msofnat ur eex t entanddur at i on,onecoownerc an’ thav ea f r eehol dandt heot heral eas ehol d

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Ti me–t heyacqui r et hos er i ght satt hes amet i me

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Ti t l e–t heyder i v et hei ri nt er es t sf r om t hes amedocumentoract

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i fanyoft hes e4uni t i esar eabs entt heyc annotbej oi ntt enant st heywi l l hav et obet enant si nc ommon

o Sur vi vor shi poper at esThi si sani mpor t antf eat ur e,i tr eal l ymak esadi ffer encebet weent het wo t y pesofcoowner s hi p,i twi l lbet het hi ngt hatmak espeopl ewantaj oi nt t enanc yorat enancyi nc ommon. •

Whenonecoownerdi est heyj us tdi s appear ,i nt er msoft hei rl egal ent i t l ementt ot hel andt heyj us tdr opoutoft hepi c t ur eandt he r emai ni ngc oowner / sj us tbec omeent i t l edt ot hewhol ec oowned est at e,bec aus et heywer eal way sent i t l edt ot hewhol et heyj usts t ay wi t hhi sr i ghtbutj us twi t houtt heper sonwhohasdi ed

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Deat hofonecoowner=t hei ri nt er es tex t i ngui shedandr emai ni ngc oowner sbec omeent i t l edt ot hewhol eoft hecoownedes t at e

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Thi smeanst hatt hecoownert hathasdi edc annotl eav et hei nt er es tt o any oneel sei naWi l l becaus eatt hepoi ntatwhi c ht heydi et heydon’ t hav eas har ei nt hepr oper t yt ol eav et osomeoneel s e,t heyar ej us t ones i ngl ebei ngwi t ht heot herc oowner st her ei snoc ar v eabl e i nt er es tt opas st os omeoneel s e

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Sur v i v or s hi phappensaut omat i c al l yatt hemomentofdeat ht hi smeans t her ei snotev enapos s i bi l i t yofaWi l l cr eat i ngas har eandgi v i ngi t ,at t hemomentofdeat hy ouj ustdi s appear

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I fwehav eAnnaandBobandAnnadesl eav i ngheri nt er es tt oChar l i e, s ur v i v or s hi pwi l l meant hatChar l i eget snot hi ngbec aus eatt hemoment

4 ofAnna’ sdeat hBobbecomeswhol l yent i t l edt ot heent i r ees t at ei nt he pr oper t y •

Thi smeanst hatBob’ si nt er es ti swor t hmor et hanbef or ebec aus e bef or ehewasaj oi ntt enantwi t hs omeoneel s e,nowhehasal l ofi tbut hedoes n’ thav eabi ggers har e,wedon’ tus et hewor dshar e! !

Tenancyi nCommon o Onl yex i s ti nequi t y– 

Thebenefi c i al i nt er es ti st heonl yonewhi chc anbehel dasat enanc y i ncommon

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Thel egalt i t l ec annotbeat enanc yi ncommon! !–l egalt i t l ec anonl ybe aj oi ntt enanc y ,abenefic i ali nt er es tc anbeei t heraj oi ntt enanc yor t enanc yi ncommon

o ‘ Shar es ’ 

Eac hc oowneri sent i t l edt oas pec i fi c‘ s har e’i nt hel and

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Eac ht enanti ncommonoft hebenefic i ali nt er es thasas pec i fics har ei n t hel and

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I fAnnaandbobbuyapr oper t yt oget herast enant si nc ommoni n equi t yi tmak esper f ec ts ens et os ayt hatAnnaownshal foft he pr oper t yandBobownshal f

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‘ s har es ’ =‘ undi v i deds har es ’i nt hel and

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i . e.s har esi nt heabst r ac tent i t ywhi c hi st hees t at ei nt hel and

o Uni t yofpos ses s i ononl y–don’ tneedanyot heroft heuni t i es , 

Needuni t yofpos s es s i onot her wi s emak enos ens e

o NO SURVI VORSHI P 

Thi si st her eas onpeopl emi ghtpr ef ert hi st oJoi ntT enanc y

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I ti sfi nef orat enanti nc ommont ol eav et hei rpr oper t yi nt hei rWi l lt o pas st owhoev ert heyappoi nt

5 

Thus ,t het enanc yi nc ommoni samuc hmor eappr opr i at ewa yof hol di ngl andi fy ouar eout si deaf ami l yar r angement–c ommer ci al s i t uat i ons ,f r i endset c .

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I ti sal s omor eappr opr i at ewher et hepar t i eshav econt r i but ed unequal l yt ot hepur c hasepr i c ebec aus et hent hes har er epr esent st he amountofmoneyy ouhav eputi n

Thus ,t hi st enanc yi nc ommoncanbeaf ai r er ,l es sr i s kywayofc oowni ngt he pr oper t ybutt hej oi ntt enanc yi naf ami l ys i t uat i oni sj us ts i mpl er .

Thecommonl awhast r adi t i onal l ypr ef er r edt hi sj oi ntt enanc yi dea,t her ef or et hel egal t i t l e,t hat ’ swhyt hel egalt i t l emus tbehel di naj oi ntt enanc y .Commonl awpr ef er ence f ors i mpl i f y i ngl andhol di ng,t hej oi ntt enanc ysi mpl i fi esl andhol di ngt owar dsones ol e owner .Engl i s hl andl awl ov i ngt hei deat hatwes i mpl i f yl andowner shi pi tf ac i l i t at es c onv ey anc i ng,mak esev er y t hi ngeas i erf orpur c has er s ,mor t gageeset c.

Thel egalt i t l e

LawofPr oper t yAc t1925c odi fiedt hi spr ef er encef orj oi ntt enanc ybyt el l i ngus c l ear l yt hatt hel egalt i t l ec anonl ybehel dasaj oi ntt enanc y .

Legalt i t l ecanonl ybehel dasaJOI NTTENANCY o Notpos s i bl et oc r eat eaTenanc yi nCommonofal egales t at edi r ec t l y–s. 1( 6) LPA1925 •

Thus ,t hi ss ec t i onmak esi tc l eart haty ouc anonl yc r eat et hel egal est at easaj oi ntt enanc y

o Notpos s i bl et os ev ert heJ oi ntT enanc yoft hel egalest at es. 36( 2)LPA1925 •

Bas i c al l y ,cannotc hangei tt oat enanc yi ncommonatal at erdat e

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Thel egalt i t l ewi l l beaj oi ntt enancyandwi l l r emai naj oi ntt enanc y

34( 2)LPA1925 o Max i mum numberoft r us t ees=4-s.

6 •

I fy ouhav e5peopl et r y i ngt obuypr oper t yt oget hert hent hefi r s t4 namedont heconv ey ancebec omet het r us t eeshol di ngt hepr oper t yon t r us tf oral l 5oft hem asbenefic i ar i es–i tcanbef orasmanypeopl eas wantt obec oowner s

Ther ei snowa yar ound,t hel egal t i t l emus tbeaj oi ntt enanc y !

Thebenefici al / equi t abl ei nt er est o Equi t yhasal wa yspr ef er r edt het enanc yi ncommon,i ti saf ai r erwayof hol di ngpr oper t y o Wi t hat enanc yi ncommony ours har ei nt hepr oper t yi sfix ed,y ouknowwhat y ouhav edon’ thav es ur vi v or s hi p,i fy ouhav epai di nmor et hi si sr eflec t edi n y ours har e o Theequi t abl e/ benefic i ali nt er es ti nt hepr oper t ymaybehel dasj oi ntt enanc y ORt enanc yi nc ommon o So,att hes t ar toft het r us t ,howdowek now…. ? •

Legalt i t l ei ss i mpl eal way sj oi ntt enanc y

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Benefic i al i nt er es t ,howdowek now?–t her ear et wos t agest ot hi nk aboutt hebegi nni ngs t ageandt heni fy oudec i dei tst ar t edasaj oi nt t enanc yy ouhav eal at ers t agewhi c has k swhet heri thaschangedf r om J Tt oTC

Toest abl i shwhet hert her ei saJTorTi nCatt hest ar t : o Expr essdecl ar at i on=dec i si v e–i ft hec onv ey ances ay st heyhol dt he pr oper t yasj oi ntt enant st hatwi l l bewhatt heyhol di tas ,i fi tsay st enant si n c ommont hatwi l lbewhatt heyhol di tase. g. •

GoodmanvGal l ant( 1986) ; •

Gi v esust hi sst at ementasaut hor i t y

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‘ …t hepr ovi si oni nt heconveyancedecl ar i ngt hatt he pl ai nt i ffandt hedef endantwer et ohol dt hepr oceedsof sal e‘ ‘ upont r ustf ort hemsel vesasj oi ntt enant s’ ’concl udes

7 t hequest i onoft her espect i vebenefici ali nt er est soft het wo par t i es…’ •

St ackvDowden( 2007) •

Hadt hi sr eaffir medi nt hi scas e

o I fwehav eac onv ey anc eofl andt oBobandAnnawhi c hs t at et hatt heyhol d t hepr oper t yont r us tf ort hems el v esast enant si nc ommont heny ouk nowt hat t heyar ej oi ntt enant soft hel egal t i t l e( becaus et heyhav et obe)andt enant si n c ommoni nequi t ybecaus et hec onv ey anc es ay ss o o Wher easi fi ts ay st hatt heyhol dt hepr oper t yj oi nt l yorasj oi ntt enant st hen y ouwoul dk nowt heyhol dt hel egalt i t l easj oi ntt enant sandt hebenefi c i al t i t l e asj oi ntt enant s

o BUT. . .somet i mesexpr essdecl ar at i onnotconcl usi ve:E. g. o Ci t yofLondonBSvFl egg( 1988)HL–v er ys mal lex c ept i on •

Somet i mesanex pr es sdec l ar at i oni snotconc l us i v e

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Thehous eatt hec ent eroft hedi s put ewasc al l edbl eakhous e

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Thehous ewasc onv ey edi nt ot henamesofahus bandandwi f e

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Thet r ans f ert ot hem,t heconv ey anc et ot hem,dec l ar edt heyhel dt he pr oper t yoft r us tf ort hems el v esasj oi ntt enant s

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Ov erhal foft hepur c hasepr i c ewaspai dbyt hewi f e’ spar ent st he Fl eggs

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TheHLhel dt hatdes pi t et heex pr es st er msoft heconvey anc et he par ent shadabenefic i ali nt er es ti nt hepr oper t ybec aus et hey c ont r i but edt oi t

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I not herwor ds,t hehus bandandwi f ehel dt hepr oper t yont r us tf or t hems el v esont heonehandasj oi ntt enant sandal s oont r ustf ort he par ent sast enant si ncommon

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Sodi dasi tdes cr i bedbutal s ohus bandandwi f eont r us tf orpar ent s bec auset heyc ont r i but edt ot hepur c has epr i c e

o I fnodec l ar at i ont henequi t yf ol l owst hel aw( max i m)i . e.pr es umpt i onofJ T , bec aus eonl yapr es umpt i ont hi sc anbedi s pl ac ed–wek nowt hati nl awt he

8 t i t l ei saj oi ntt enanc yt her ef or et hebenefic i ali nt er es twi l lal s obeaj oi nt t enanc y •

Pet t i t tvPet t i t t( 1970) •

Goodaut hor i t yf ort hi s

o Butt hi spr es umpt i onofj oi ntt enanc yc anbedi s pl acedi n3s i t uat i ons( BUT NB.Fami l yhome)

1.Wor dsofsever ancei nt heconveyance( mak esi tl ookl i k et he par t i esr eal l ymeantat enanc yi nc ommon)=e. g.us eoft hewor d ‘ s har es ’ or‘ di v i dedequal l y ’i nt heconv ey ance–i ft her ear ewor dsonl y appr opr i at ef ort enanc yi ncommont heni twi l l beat enanc yi nc ommon

2.Unequalcont r i but i onst ot hepur chasepr i ce–i ncommer ci al s et t i ngt hi sr ul es t i l l appl i edbutc hangedi nr el at i ont of ami l yhomes Bul lvBul l( 1955) o Thi si saboutf ai r ness o Thel andwasc onv ey edi nt ot henameofoneper s ononl yev en t hough2peopl ehadc ont r i but edt ot hepur c has epr i ce o Theyhaddones oi nunequalamount s , o Cour tofAppealhel dt hatt hi sc r at edat r us twher et henamed per sonhel dt hepr oper t yont r us tf orbot hoft hem ast enant si n c ommoni nequi t y o I ncommer c i als i t uat i on,t hi sr ul es t i l lappl i esbutc hanged r egar di ngf ami l y o NOTEmor er ec entappr oac ht ounequalcont r i but i onst opur c hase pr i c ei nc ont ex toff ami l yhomewher et hecoowner sbr oughtt he hous easaf ami l yhomet oget herandt hei rnamesar eont hel egal t i t l e t her ei sas t r ongpr es umpt i onofaj oi ntt enanc yr egar dl es soft he unequalc ont r i but i onst ot hepur c has epr i c e-y ougos t ar t i ng pr es umpt i onofj oi ntt enanc y ,ohunequalc ont r i but i ont ot hepur chas e pr i c e,ohbutf ami l yhome.Ther ecanbeevi denceofcount er

9 i nt ent i onont hef act swhi chwi l lst i l lmeani t ’ saTC( l ookatwhat par t i est r ul yi nt endedonl yi fevi dencei fst r ong) : ackvDowden( 2007) ; o St o St at edt hatwher epar t i espur chas edt hepr oper t yi nj oi ntnames , f orj oi ntocc upat i onasaf ami l yhomet hent hi sr ai s est he pr esumpt i ont hatt heyhel dt hebenefi c i ali nt er es tequal l yal s o o JonesvKer not t( 2011) o Bestaut hor i t yf ort hi s o Des pi t eunequalc ont r i but i oni fi ti saf ami l yhomei nj oi ntnames y ouar el ooki ngati tbei ngaj oi ntt enanc y o TheSupr emeCour twer eas k edt odet er mi net hebenefic i al i nt er es t si nahous ewhi c hwaspur c hasedbyanunmar r i ed c oupl ewhoi nt endedt hehous east hei rf ami l yhome o Thehous ewasconv ey edi nt ot hei rj oi ntnames,bot hpar t i eson t hel egalt i t l e o Mr sJ onespai dt hedepos i tof£6, 000f r om t hes al eofamobi l e home o Ther es toft hepur c has epr i c ewaspai df orbyanendowment mor t gagei nt hei rj oi nnames o Mr sJ onespai dt hemor t gageoutoft hei rj oi ntr es our c es o MrKer not tpai d£100aweekt ohous ehol dex penses o Year sl at ert heyt ookoutal oanj oi nt l yt oi mpr ov et hepr oper t y o Shes t ar t edwi t ht he£6, 000,t heyhadamor t gagei nj oi ntnames whi c ht heypai dj oi nt l y ,hepai dmoneyf orex pens es o Af t er8y ear si nt hepr oper t yMrKer not tmov edout o Fr om t hi spoi ntonwar dsMr sJ onesl i v edi nt hepr oper t ywi t ht he c hi l dr en,pai dal lt hemor t gageandal lot herhousehol dex pens es her sel f o MrKer not tpai dnot hi ngf ur t hert owar dst heac qui s i t i onoft he hous eori t supk eep,i nf acti ts eemshehar dl ypai dany t hi ng t owar dst hes uppor tofhi schi l dr en o Hes ubs equent l ybr oughtapr oper t yofhi sown

10 o Thecour tnot edhecoul ddot hi sbecaus ehewaspay i ngal most not hi ngt os uppor thi sf or merf ami l y o Theups hotwasi n2006( mov edouti n1993)MrKer not tc l ai med hewasent i t l edt oahal fs har eoft hebenefi c i ali nt er esti nt he home o Mr sJ oness oughtadec l ar at i onf r om t hec our tt hats hewast he s ol ebenefi c i al owneroft hehome o Mos toft hec as ei sc onc er nedwi t hc l ar i f yi ngwhatpr opor t i onof t hebenefic i ali nt er es teac hpar t ys houl dhav e–notourpr i me c onc er nher e o I nJones ,t heSupr emeCour tappr ov edt heHouseofLor ds appr oac hi nSt ac kvDowdenwhi c hs t at edt hatwher epar t i es pur chas edt hepr oper t yi nj oi ntnames ,f orj oi ntocc upat i onasa f ami l yhomet hent hi sr ai sest hepr esumpt i ont hatt heyhel d t hebenefici ali nt er estequal l yal so o I ft hepr oper t yi sac qui r edasaf ami l yhome,c onv ey edi nt oj oi nt names ,t hi smeanst hatwear eex pec t i ngt hatt obehel dasa j oi ntt enanc yandi tdoes n’ tmat t eri ft hepar t i esc ont r i but e unequal l y o But ,i ft her ei sv er ygoodc ont r ar yi nt ent i onont hef ac t st hent hi s mi ghts ugges tt hatac t ual l yat enanc yi ncommoni sact ual l y i nt ended o LadyHal ei nSt ac kvDowdens ai d,andappr ov edi nt hi sc as e, t hi swi l lonl ybet hec as ei nv er yunus ualc i r c umst anc es o Whatt hecour tar el ooki ngati st hef ac tt haty oumadeaj oi nt emot i onal commi t menti nt hebegi nni ngt oaj oi ntent er pr i se s houl ds ugges ts t r ongl yt ot hec our tt hataj oi ntt enanc ywas i ndi cat edev ent houghl at ert her el at i ons hi pf el lapar t ,s oy ou needt ofi ndv er ys t r ongev i denc et hati nt hebegi nni ngt heywer e l ooki ngataTCasopposedt oJ T

11 3.Busi nessr el at i onshi pbet weent hecoowner s– Mal ayanCr edi tvJackChi aMPHLt d( 1986) o I ti sv er yunl i k el yt hati nt hi sc ont ex tt heywoul dwant s ur v i v or s hi pt ooper at emuc hmor el i k el yt owantashar eandbe abl et ol eav ei ti naWi l l o Thepl ai nt i ffanddef endantac qui r edal eas eov erabus i nes s pr emi sesi nor dert opur s ues epar at ebus i nes spur poses o Theyagr eedt hatt hedef endantwoul dhav e60% oft hes pac e andwoul dpay60% oft her ent o Thepr i vycounc i lhel dt hataTCoft hebenefi c i ali nt er es twast o bepr esumedunders uc hc i r c ums t anc es o Bot ht hef actt hatt heywer eengagedi nac ommer c i alent er pr i s e andt hef ac tt hatt heyc ont r i but edunl i k el yi ndi cat edt hatt hey s houl dbeTCi nequi t y o ALLs ugges tat enancyi nc ommont r adi t i onal l y

Wehav el ook edathowt hebenefic i al i nt er esti shel datt hes t ar t ,butbec aus et he benefic i ali nt er es tcanbeaTCorJ Ty oumi ghtwantt ol ookt hr ought hel i f eoft he t r us tands eei fi ts t ar t edasaJ Thasi tatany poi ntbeent r ans f er r edi nt oaTCl at er on?–s oneedt ol ookats t ar tandt hr ought hel i f et i me.

I ft hebenefic i al i nt er es ts t ar t sasaJTi t ’ spos s i bl et oconv er ti ti nt oaTCt hr ough s ev er anc e.

Sever ance o Conv er t i ngj oi ntt enanc yt oat enanc yi ncommoni sapr oc es sk nownas SEVERANCE o NB.I ti sonl ypos s i bl et os ev ert hej oi ntt enanc yi nr es pectoft hebenefici al i nt er es t( c annots ev ert heJ Toft hel egalt i t l e) .

12 Har r i svGoddar d: o ‘ …t hepr oc es sofs epar at i ngofft hes har eofaj oi ntt enant ,s ot hatt he c onc ur r entowner s hi p( c oowner s hi p)wi l lc ont i nuebutt her i ghtofs ur v i v or s hi p wi l lnol ongerappl y .Thepar t i eswi l lhol ds epar at es har esast enant si n c ommon. ’ o Thepr ...