Concurrent interests 2018 PDF

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LAND LAW - CONCURRENT INTERESTS

TABLE OF CONTENTS Summary.......................................................................................................................................................2 Textbook........................................................................................................................................................4 Successive and concurrent interests..............................................................................................................................4 Tenancy in common/joint tenancy.................................................................................................................................4 Trusts of land..................................................................................................................................................................9

Cases............................................................................................................................................................10 malayan credit v jack chia-mph..................................................................................................................................10 facts..............................................................................................................................................................................10 held.............................................................................................................................................................................. 10 judgment......................................................................................................................................................................10 Nielson-Jones v Fedden.............................................................................................................................................11 Facts.............................................................................................................................................................................11 Held.............................................................................................................................................................................. 11 Judgement...................................................................................................................................................................11 Burgess v Rawnsley....................................................................................................................................................12 Facts.............................................................................................................................................................................12 Held.............................................................................................................................................................................. 12 Judgment..................................................................................................................................................................... 12 Harris v Goddard........................................................................................................................................................13 Facts.............................................................................................................................................................................13 Held.............................................................................................................................................................................. 14 Judgments.................................................................................................................................................................... 14 Gore and Snell v Carpenter........................................................................................................................................14 Facts.............................................................................................................................................................................14 Held.............................................................................................................................................................................. 14 Judgments.................................................................................................................................................................... 14 Kinch v Bullard...........................................................................................................................................................15 Facts.............................................................................................................................................................................15 Held.............................................................................................................................................................................. 15 Judgments.................................................................................................................................................................... 15

Articles.........................................................................................................................................................16 Thompson..................................................................................................................................................................16 Pritchard....................................................................................................................................................................16 Thompson..................................................................................................................................................................17 Pritchard (Nielson-Jones review)................................................................................................................................17

SUMMARY Statutes Statute LPA 1925 s 184

Provision Where multiple joint tenants die in a single incident the oldest is presumed to have died first

LPA 1925 s 36(2)

Notice in writing is required to sever joint tenancies of legal estates vested in the joint tenants beneficially

Applications Re Bate – Jenkins J held that this provision applies even where there is evidence that the two people died at the same time Hickman v Peacey – deceased persons were killed by a bomb, but HL held that the section still applied (Viscount Simon LC dissenting – a rule that where it is uncertain which horse passed the finish line first the prize goes to the younger horse doesn’t mean that in a dead-heat the prize can’t be shared)

Cases Subject Words of severance rebut presumption of joint tenancy

Case Robertson v Fraser

Equitable presumptions of tenancy in common

Malayan Credit v Jack Chia-MPH

Methods of severing joint tenancies

Williams v Hensman

Held Lord Hatherley LC: “anything which in the slightest degree indicates an intention to divide the property must be held to abrogate the idea of a joint tenancy, and to create a tenancy in common”. Words like “participate”, “amongst” and “respectively” indicate such intention. Lord Brightman: where premises are held as joint tenancy at law for holders’ several individual business purposes, it can still be a tenancy in common in Equity (though it is not partnership property) – thus the three classes of Equitable exceptions are fluid

Treatment Arguable that choice of words is likely random and not a sign of intention.

Lord Brightman placed much emphasis on the unequal contribution of both parties – would the outcome be different if it had been equal? (seems arbitrary to answer in the affirmative)

Sir John Pennycuick in Burgess said Page-Wood VC: three methods exist to that the importance of agreement sever joint tenancies: is that it evinces the common intention of parties; it seems that it 1. Act operating on severer’s can be subsumed under the third share head, although he just says that 2. Mutual agreement 3. Course of dealing suggesting of the third head is wider than the second. intention

NielsonJones v Fedden

Walton J: a unilateral declaration cannot sever because 1) it would eliminate the need to convey to trustees and 2) s36(2) would be pointless/restrictive. S36(2) only applies to real and not personal property – proceeds of sale cannot be severed by writing

Burgess v Rawnsley

Harris v Goddard

Gore and Snell v Carpenter

Kinch v Bullard

Denning: A unilateral declaration can sever as long as it is communicated to the other party. S36(2) applies to real and personal property because: 1. (Denning) It would be absurd to create an anomaly 2. (Pennycuick) The language of the statute suggests that the framers contemplated that writing was already sufficient to sever interests in personal property 3. (Browne) The purpose of the provision was to declare a new method of severance, not distinguish between realty and personalty – but if the anomaly does exist, it should be corrected ASAP Lawton LJ: the three methods in Williams v Hensman are still valid; notice by writing per s36(2) must evince present and not future intention to sever Negotiations are not the same as course of dealing – a course of dealing is where parties over the years treat the interest as tenancy in common and not joint Notice is ‘given’ for the purpose of S36(2) when it is delivered to the last known place of abode of the intended recipient (per S196) and it is unnecessary that he read/received it.

Lawton LJ says that these methods are still valid after 1925 because s36(2)’s reference to ‘other methods’ includes them Rejected by Burgess v Rawnsley and Harris v Goddard

Articles Author Thompso n

Idea Joint tenancies are often created in family homes because solicitors asked the parties whether they wanted the other to have the house if one died. Parties didn’t usually contemplate equal division of proceeds upon sale. This warrants abolishing the beneficial joint tenancy. Many people are attracted by the idea of survivorship and they should be able to get it without having to draft a will – unsuccessful marriages shouldn’t dictate the law and aggrieved parties should be able to sever anyway

Pritchard

Treatment

TEXTBOOK SUCCESSIVE AND CONCURRENT INTERESTS -

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Successive interests don’t include leases because: o Lessor doesn’t lose the fee simple absolute in possession and this interest is not postponed until lessee’s interest lapses o (Most important) Successive interests are subject to statutory regulation allowing land to be sold free from these interests, and the value of leases requires land not to be sold free of them Concurrent interests: joint tenancy and tenancy in common (eg. co-ownership of the family home – increasingly common) Legal regulation o Controversial because traditionally wealthy families owned land subject to complex settlements, but this is difficult for purchasers (especially if interests involve people unborn or children) o Solution: overreaching o 19C reforms made overreaching available in all situations involving successive interests (was controversial because land was still seen as the basis of power and wealth so families didn’t like it when their interests in land was converted to an interest in a fund) o 1925 legislation introduced overreaching into concurrent interests to solve problems for buyers in case of tenancies in common: scheme dictates that legal title must be held by joint tenants so that a small and diminishing number of people can sell. Joint tenants hold land on trust for coowners (equitable joint tenants or tenants in common) and have a power to sell, where they become trustees of sale o Trust of sale was controversial because the beneficial interests were really in the proceeds of future sale rather than in land – particularly controversial for family homes. o Trust for sale replaced by trust of land by the TLATA

TENANCY IN COMMON/JOINT TENANCY -

Do we need both tenancy in common and joint tenancy?

o No   

Problems arise in determining which type was created and whether there has been severance Preference for joint tenancy introduced survivorship where it is not intended Equitable joint tenancy is unnecessary:  No reason why a share under a tenancy in common shouldn’t be left by will  Survivorship is harmful when relationships break down  Legal complexity is expensive (litigation costs)

o Yes  



Distinctions

Tenancy in common has to be retained (can’t insist on survivorship and unity of interest) Legal joint tenancy is valuable:  Crucial to 1925 scheme for clarifying title  Sale is easier and less expensive Equitable joint tenancy is preferred in family home cases, showing that survivorship is intended in most cases

Joint tenancy Each owns the whole rather than a share of it – Dixon J: “they are jointly seised for the whole estate they take in land and no one of them has a distinct or separate title” Thus upon death interest doesn’t pass to survivors because they already have an interest in the whole – but this is somewhat artificial because each joint tenant is entitled to a share of the income, and to a share of the interest upon severance, and no join tenant can enter into transactions binding the whole even though he is said to own the whole. Includes right of survivorship (when one joint tenant dies, survivors are entitled to property rather than it passing to heirs) – most important characteristic

Tenancy in common Each owns an undivided share (undivided because they don’t each own part of the land)

Does not include right to survivorship

Difficulty: when a single incident kills multiple joint tenants, who died first? Law presumes that the oldest died first (arbitrary but certain) Subject to the four unities Only subject to the first unity (unity of possession) All shares must be of the same size and nature Shares can be of different sizes (unity of interest) Obligations are shared – joint tenants of a lease Obligations can be separate are each liable for the entire rent to landlord In the case of gifts in wills where a donee dies Such a gift fails as to the portion before testator – a gift in joint tenancy becomes a gifted to the predecessing donee

Advantages

When does it exist?

gift to survivors Survivorship is suitable for many relationships such as spouses in the ownership of family homes Better for purchasers – interests do not increase in number upon death of a joint tenant Presumed in common law whenever the four unities are satisfied subject to expressions of contrary intention

Flexibility – shares can be whatever size and not subject to survivorship Suitable for some relationships (eg. business partners) where survivorship would be inappropriate Exists by default where a unity is absent (even where parties intended a joint tenancy)

(Thus joint tenancies will never be imposed if intention is otherwise, but will be if intentions are not clear) Partners in a business (survivorship is inappropriate) – the property must be acquired in the course of business not just by business partners Mortgagees who together lend money on a mortgage (treated like business partners) – reference to a ‘joint account’ doesn’t oust the presumption (Re Jackson) Unequal contribution (objection to equal shares) – shares determined by a resulting trust analysis. This doesn’t apply to family homes Parties expressly provide for it/use language suggestive of it (words of severance) – courts are quick to interpret anything “which in the slightest degree indicates an intention to divide the property must

Equity presumes it in certain specific circumstances:

Four unities

be held to abrogate the idea of a joint tenancy” (Hatherley LC) Unity of possession – each co-owner must be entitled to possession of the whole Unity of interest – each joint tenant must have interests of the same nature (eg. all interests for life) and quantum (each entitled to equal share) Most problematic: people may want shares of different sizes on severance to reflect the size of their contribution, while still wanting survivorship Unity of title – interests must derive immediately from the same title (eg. deed/will), so that transfer of title severs it Unity of time – each joint interest must vest at the same time (a gift to children at 21 fails) but this does not apply to gifts by will or conveyances to uses (trusts).

Methods of severance (usually because relationship (eg. marriage) broke down or the joint tenancy was created by a testator who doesn’t reflect donees’ wishes)

Since concurrent interests always take effect under a trust this unity arguably has no place left in modern law and can be discarded Acts operating on the joint tenant’s Old forms (Williams v share – a form of unilateral Hensman – severance by one joint tenant that Page-Wood severs his own share but leaves the others as joint tenants of theirs (if VC) A,B and C are joint tenants and C transfers to D, then A and B are joint tenants of 2/3 share; if C transfers to A, then A and B are joint tenants of 2/3 and A is owner of the other 1/3) Mutual agreement: equity allows this to sever even if none of the unities has been shattered (agreement must be of all joint tenants) Burgess v Rawnsley – writing is not required. However this contradicts the requirement of writing for creating interests in land Nielson-Jones v Course of Fedden – course of dealing – dealing is based on most controversial: implied agreement to sever. Rejected by Burgess v Rawnsley –

New form: Section 36(2) – notice in writing to sever joint tenancies in legal estates in equity.

Advantages:

Limitations:

common intention and not agreement is required (now the accepted position) Lord Denning in Burgess – a unilateral declaration by one party to the other is sufficient; rejected in Nielson-Jones because it would contradict the first head requiring actual transfer of property An agreement to sell/actual sale doesn’t suffice because parties may intend to be joint tenants in proceeds. Davis v Smith – agreement to divide proceeds suffices This is useful because it allows unilateral severance without having to transfer to trustees Makes other joint tenants aware of intention Simple: the law shouldn’t create too many hurdles to severance as it is always possible with legal advice Joint tenants must hold the legal estate beneficially (appears to require the same person to hold legal estate and beneficial

interests – trustee and beneficiary cannot be different people). There’s good reason to require trustees and beneficiaries to both have notice but not that they be the same person. Applies only to land (‘legal estate’) – if proceeds from sale are held on joint tenancy it cannot be severed by written notice (this may have led Denning to try to recognize unilateral declarations as effective in equity in Burgess) What suffices as written notice? Express declaration to sever joint tenancy suffices, but Re Draper held that declaration requesting sale and division of proceeds suffices. Public Policy - one joint tenant murders another joint tenant – murderer shouldn’t profit from survivorship (this is not restricted to joint tenancy – he also can’t benefit from victim’s will) Forfeiture Act allows courts to depart from this when the conviction isn’t murder (eg. Re K – conviction was manslaughter by a wife of an abusive husband) TRUSTS OF LAND -

TLATA 1996 establishes a trust of land regime that incorporate most concurrent and successive interests When is there a trust of ...