Co-

ownership – Severance
(Adapted from Modern Land Law 11th edn, Martin Dixon; Land Law, Ben McFarlane, Nicholas Hopkins
& Sarah Nield; Textbook on Land Law, Judith-Anne Mackenzie & Mary Phillips; Elements of Land Law,
Gray & Gray; UOL Subject Guide)

Introduction
o Co-Ownership arises in a situation where Two or more people are entitled to simultaneous /
concurrent enjoyment of the land. Two or more people have the rights to ownership over the
same piece of land at the same time.

o Co-Ownership may arise:

Deliberately By Operation of Law

Property conveyed to Implied trust

to 2 people’s name

o Anytime property is held by 2 or more people where will be an Automatic / Statutory Trust that
will be imposed over the property – Section 1 Trust of Land and Appointment of Trustees Act
1996 – TOLATA 1996

o Co-Ownership takes effect behind a Trust (Equitable Interest behind a Trust)

o The property will then be divided into the Legal Title and the Beneficial Ownership

2 tier / title system

LEGAL TITLE – EQUITABLE TITLE / BENEFICIAL

Legal Owners – Beneficial Owners
The land must be separated into the discussion of who holds the:

Legal title and

Beneficial Ownership

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 How do the Co-owners hold the property among themselves – the relationship
between Co-Owners.
There are only TWO (2) significant methods of shared ownership – Dunbar v Plant (1998)

JOINT TENANCY TENANCY IN COMMON

JOINT TENANCY
Lord Browne-Wilkinson in Hammersmith LBC v Monk “In property law, a transfer of land to two
or more persons jointly operates so as to make them, vis-à-vis the outside world, one single
owner”.

o The FOUR unities must be present

o The perfect form of Co-ownership
o Together they own the whole land collectively – 100%. Burton v Camden, Lord Millet
o No separate owners but they are an inseparable group owner – One Group Owner
o Right of Survivorship / Jus Accrescendi
o When a Joint Tenant dies, the interest dies with him
o Cannot leave any interest in the will when he dies. Interest also cannot pass under the rules of
intestacy
o Upon death, the remaining / surviving Joint Tenant will have the interest

Property
The FOUR Unities: PITT

1. Unity of Possession = each co-owner is as much

entitled to possession of the land as any other co-
owner.
Ann Ben
2. Unity of Interest = all co-owners have the same
interest in the land (e.g. freehold estate).
100%
3. Unity of Time = the interests of all co-owners vest
in them at the same time.
Cat Don

4. Unity of Title = all co-owners derive their interests

from the same document or act.
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 TENANCY IN COMMON
o Only unity of Possession is required
o Each co-owner has a separate and defined share in the property
o The share is undivided share – the share is an intangible but real share.
o However the property is Not physically divided.
o The share can be given away upon death – No application of Jus Accrescendi

Property

The FOUR Unities: PITT

1. Unity of Possession
Ann – Ben-
2. Unity of Interest 10% 20%

3. Unity of Time

4. Unity of Title Cat – Don –

40% 30%

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How will the Land be held under co-ownership – Joint Tenants or Tenants In
Common?

2 tier / title system

LEGAL TITLE – BENEFICIAL / EQUITABLE

Legal Owners TITLE – Beneficial Owners

Trustees Beneficiaries

A. Legal Title

• Will always (ONLY) be held as Joint Tenants and never as Tenants In Common – Section 1(6)
LPA 1925, Section 36(2) LPA 1925

• The law does not recognize the Legal Title as TIC – Sec 1(6), Sec 34, Sec 36(2) LPA 1925

• Sec 34 LPA 1925 & Sec 34 Trustees Act 1925 - only a max of 4 people can hold the legal title

• Must be sui juris

B. Equitable / Beneficial Interest (Ownership)

• Can either be held as Joint Tenants or Tenants In Common

• No limit to the number of beneficiaries

• No age limit for the beneficiaries

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How do the courts determine if the Beneficial / Equitable Interest is held as JT or TIC

1. The presence or absence of the FOUR unities - PITT

2. Words of severance found in the document

3. Equity presumes a Tenancy In Common

a. Unequal contribution towards the purchase

Dyer v Dyer; Burns v Burns; Bull v Bull

In Equity, the beneficial interest will be TIC in proportion to their contributions.

Express Declaration

If the property was expressly conveyed to them as Beneficial Joint Tenants, this express
declaration will now mean that the Beneficial Interest is held as Joint Tenancy - Goodman v
Gallant (1986).

Nielson Jones v Fedden (1975)

b. Business properties
Malayan Credit v Jack Chia (1986)

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Severance
Severance is the process through which the land which is being held as JT is converted to become TIC.
Once a Joint Tenant has severed his interest, the principle of survivorship / Jus Accrescendi no longer
operates in relation to his interest as a Tenant In Common.

Harris v Goddard (1983), LJ Dillon.

“Severance is ...… the process of separating off the share of a joint tenant, so that the concurrent
ownership will continue but the right of survivorship will no longer apply. The parties will hold separate
shares as tenants in common”

JOINT TENANCY (JT) TEANACY IN COMMON (TIC)

LAND

Legal Title - Law Beneficial Title - Equity

Joint Tenancy Joint Tenancy

Ann Ben Cath Ann Ben Cath

severs

Beneficial Title - Equity

Joint Tenancy Tenancy In Common

Two Thirds One Third

Ann Ben Cath

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Severance can take place either by:

I. Statute – Section 36(2) LPA 1925

II. Common Law – Williams v Hensman (1861) Page Wood VC

Statute- Section 36(2) Common Law –

LPA 1925 Williams v Hensman

Act of JT operating on his own share MA MC

Beneficial Interest
Joint Tenants

Anne Bertha Cecil Dorothy

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 Unilateral act – Corin v Patton (1990)

- Written Notice MUST state an immediate intention to sever the joint tenancy & not some
time in the future – Harris v Goddard
o Notice Must contain clear and unequivocal intention to sever – Harris v Goddard
o No prescribed form of notice required – Marshall v Marshall (1998)
o Notice need not be signed- Re Draper’s Conveyance (1969)

- Notice must be served / given to ALL the Joint Tenants

For service, Section 196 LPA 1925 requires that it is either sent (correctly addressed; Quigley
v Masterson [2011]), or otherwise left at the joint tenant’s last known place of abode or
business. Personally given to them or using post.

Section 196(3) LPA 1925 ~ so long as it has been delivered / left at the last place of business
or abode.

Registered Post
Section 196(4) LPA 1925 ~ a notice is deemed to have been served if “it is sent by post in a
registered letter” and the letter is not returned to the post office undelivered

Fantini v Scrutton & Ors. (2020) = A notice sent by registered post is deemed to have
arrived on the day it would have done in the normal course of posting unless returned
undelivered:

- Once delivered, the interest of that party is effectively severed

Re 88 Berkeley Road (1971)
Kinch v Bullard (1998)

The notice Does Not actually have to be read by the Joint Tenants & he does not even need
to be aware of the notice

The moment the notice arrives (delivered), it is deemed that the notice is served - Irrelevant
if there is a later change of mind and the notice / letter is revoked or destroyed = the
severance is already effective – Kinch v Bullard

Note: Postal Rule does not apply here

- Must be done during the lifetime of the Joint Tenant

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 - Withdrawing / Revoking the letter of Severance - Kinch v Bullard, Neuberger J (obiter)
Although it is clear that a Section 36 notice cannot be withdrawn after it has been
effectively served, can it be withdrawn before service is effected and, if so, how?

- Service through email

EON UK plc v Gilesports Ltd [2012] Arnold J did not regard an email to be a valid form of
notice for the purposes of Section 196(3) LPA 1925
-
Note: Section 196(5) LPA 1925

A. Act of the Joint Tenant operating on “his own share”

Unilateral act – Harris v Goddard

- Joint Tenant sells their share (to a Third Party or one of the other JT) – Bedson v Bedson

- Joint Tenant mortgages their share – First National Securities v Hegerty (1984)

- The ACT must be a Valid act. There must be a VALID sale or mortgage that has taken place –
compliance of all formalities. The act must be Final and Irrevocable.

- If the transaction has not yet been carried into effect, severance will still occur if the Joint
Tenant entered into a specifically enforceable valid contract for sale or contract to mortgage
– Gould v Kemp. It must satisfies all the formalities - section 2 LP(MP)A 1989

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 B. Mutual Agreement

- ALL the Joint Tenants must have mutually agreed to sever the Joint Tenancy – Wright v
Gibbons (1949); Corin v Patton
The Joint Tenants by acting together may effectively agree inter se to sever their Joint
Tenancy – Re Knowlton & Bartlett (1985)

- The agreement can be either:

In writing, Orally done, Express, Implied

- The agreement need not be in any specific form and neither must it take the form of a
specifically enforceable contract. An informal agreement which shows intention to sever is
sufficient – Burgess v Rawnsley
An informal and flexible mode of severance

- There must be a finality of the agreement. The parties must have come up with a final
agreement to sever – Burgess v Rawnsley

- Mutual Agreement is a question of fact dependent on the circumstances of each case -

Slater v Slater
Davies v Smith (2011) CA

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 C. Mutual Conduct – Course of Dealings

- ALL the Joint Tenants have acted in such a way which shows that they regard themselves as
holding specific shares

- The severance may be effected “by any course of dealings sufficient to intimate that the
interests of all were mutually treated as constituting a TIC”. A course of dealings is
established to show that the parties are dealing with each other with the intention to sever

Hunter v Babbage (1994) – A pattern of dealings between all the Joint Tenants which
although falling short of an agreement to sever, nevertheless indicates an unambiguous
common intention that the JT should be severed

- Inconclusive Negotiations :
Burgess v Rawnsley – Lord Denning “even if there was not any firm agreement” between
the parties their negotiations amounted to a “course of dealings” which had evidenced a
sufficient intention to sever.
“a ‘course of dealings’ need not amount to an agreement, expressed or implied, for
severance. It is sufficient if there is a course of dealing in which one party makes clear to the
other that he desires that their share should no longer be held jointly but be held in
common”
Lord Denning found Mutual Conduct in the context of abortive negotiations for purchase.

But this is dependent upon the facts of each case and if one party negotiates with the other
JT to sever, then there will be the common intention for there to be severance by the
conduct even of the negotiations ultimately breakdown.

Gore & Snell v Carpenter (1990) Blackett-Ord J ~ mere negotiations alone are not the same
thing as “course of conduct”. The courts refused to infer the common intention necessary
for the finding of mutual conduct where there were simply negotiations and there was no
finality or mutuality.
Lord Denning’s view might be considered over-board.

- Davies v Smith (2011) CA

- In the Estate of Heys (1914) – mutual wills

There can also be severance by:

a. Homicide – Re K
b. Bankruptcy – section 335A Insolvency Act 1986

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Trust of Land and Appointment of Trustees Act 1996

TOLATA 1996. Since the property is held as co-owners, there will be a statutory / automatic trust of
land that would be imposed on the land. The Legal Owners will be holding the property as Trustees for
the Equitable Owners.

Section 3 – all equitable owners have an interest in the land

Section 12 – right to occupy the property if it is suitable and available for occupation

Section 13 – right of the T’ee to restrict the beneficiary from occupying

Section 14 – application can be made to the courts in the event there is a dispute with regards to the
sale by the trustee, beneficiary or persons of interest in the property. Court can make an order which it
‘thinks fit’

Section 15 – the relevant criteria / considerations that the courts will take into account when deciding
whether to order sale:

• Intention of the persons who established the trust

• Purpose for which the property is held
• Welfare of any minors who occupies the lad as his home
• Interest of any secured creditors
• Wishes of any of the equitable owners

This is NOT exhaustive and not weighed or ranked in any order of precedence

The courts will look into all the circumstances of the case and consider whether or not in that particular
moment, in that particular circumstances that it is right and proper that an order for sale should be
made – Re Buchanan - Wollastan’s Conveyance

The courts will have to decide, whose voice in equity should prevail – Chhokar v Chhokar

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Criteria – Section 15 TOLATA 1996

Section 15(1)(a) TOLATA 1996 – Intention of the person who created the Trust

Barclay v Barclay (1970)

• The owner (Testator) of the bungalow left his bungalow on trust to be sold after his death
and the proceeds to be divided between 5 members of his family.
• One of the family members was allowed to stay in the property during the Testators lifetime
• He then refused to move out and opposed the sale

Held: the CA attached decisive significance to the Testators intention that the property was
meant to be sold. It was clear that the Testator wanted the house sold and the proceeds
distributed immediately

Section 15(1)(b) TOLATA 1996 – Purpose for which the land was held on trust

The purpose can point towards Sale or towards Restraining Sale

Purpose of the trust

- There is no definition of purpose

- Does not state if the purpose has to be fixed ab initio
- Can be formulated informally
- Purpose can subsequently be varied by agreement between the parties who created the
trust – White v White
- Initial purpose can be destroyed by a fundamental change in the circumstances:

Bankers Trust Co. v Namdar (1997)

Jones v Jones (1977)

Stott v Ratcliffe (1982)

Harris v Harris (1996)
The property is required in order to provide accommodation for the lives of the co-owner or
that of the survivor

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 Bedson v Bedson
The H & W had 3 children living in the flat above a drapers shop. The property was owned by
the H & W in equal shares. The shop was owned by the H alone. The W left the kids and
wanted the whole property sold.
Courts refused sale as the Husband will be turned out from his business. The land had been
purchased for that specific purpose. He had to pay a weekly sum to the wife in recognition
of that.

Family Homes

• Founded on the purpose of providing residential occupation for family members

Williams v Williams
Property was needed for the provision of a family home for the children of the relationship
that had broken down.

• Courts have refused sale or rarely allowed sale so long as the relevant family members
continue to live there in amity. No sale while the purpose remains substantially capable of
fulfilment
Chhokar v Chhokar

• Sale will only be sanctioned where the underlying residential purpose has clearly been
exhausted or frustrated
Jones v Challenger (1961)
The marriage had broken down and thus the order should be granted.

Re Holiday (A Bankrupt)
Where the relationship has broken down irretrievably
Leaving no minor children who still need the house as a base

Where the Parties Covenanted Not to Dispose off the Land unless there is the Agreement of all
the Parties

Finch v Hall (2013)

Re Buchanan – Wollastan’s Conveyance (1939)

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 Section 15(1)(c) TOLATA 1996 – Welfare of any Minors

Even if the family relationship breaks down, the sale can be prolonged if minors need the house
for accommodation

Re Ever’s Trust (1980)

- Cohabiting couple purchased home in Joint Names with a joint legal mortgage
- Parties later separated
- The lady and the children stayed in the house

Held: CA refused for the time being to order sale of the property:

ü Man already had a secure home with his mother

ü There was no present need for him to realize his investment
ü The woman was prepared to accept full responsibility for the outstanding mortgage liability
ü The woman would have found it extremely difficult to re-house herself if the property had
been sold
ü The courts may order sale if the woman remarries or becomes financially independent

Ormrod LJ – the underlying purpose of the trust had been to provide a home for the couple and
their 3 children for the indefinite future. This purpose was still capable of substantial fulfilment.

Ormrod LJ cited with approval what Lord Denning said in Williams v Williams – The court
“nowadays have great regard to the fact that the house is bought as a home in which the family
is to be brought up. It is not treated as a property to be sold, nor as an investment to be realized
for cash”. The modern view!

Browne v Pritchard (1975)

Ormrod LJ – Investment in a home is the least liquid investment that one can possibly make. It
cannot be converted into cash while the children are at home

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 Section 15(1)(d) TOLATA 1996 – Interest of Secured Creditors

This does not rank in any priority to any other considerations.

The dispute between the Creditors and Innocent Co-owners

Mortgage Corporation v Shaire (2001)

Neuberger J – “not…unlikely that the legislature intended to relax the fetters on the courts
exercise of discretion, so as to tip the balance somewhat more in favor of families and against
banks”
He declined to order immediate sale of a family home where it remained possible that the trust
beneficiary whose signature had been forged might be able to service the interest payment on
the outstanding debt

Re Holliday (1981)
If the debt owned is very small and constituted only a fraction of the total market value for the
house, the courts would consider delaying the sale

Edwards v Lloyds (2004)

Co-owner was able to postpone the sale for 5 years even though the application was made by
the mortgagee whose mortgage took effect over more than 50% of the value of the property –
to safe guard the home for the children of the relationship. The welfare of the occupying minor
was made expressly relevant. Courts would more likely postpone sale rather than refuse sale

Note the differing approach

TSB v Marshall (1998)

Sale ordered even though children were staying there as there was no real prospect of the debt
being paid off

First National Bank v Achampong (2004)

Recently the courts have been strongly influenced by the argument that unless an order of sale
is made, ‘the bank will be kept waiting indefinitely for any payment’ which is their share. The
non-consenting owner had priority over the creditors and yet the sale was ordered.

Putnam & Sons v Taylor (2009)

Pritchard Engfield v Steinberg (2004)
Bank of Ireland Home Mortgages v Bell (2001)

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 Other Relevant Factors

The factors mentioned above are not exhaustive

Courts can have regard to other factors which legimately bear upon the sale of the property

Competing needs

Courts to respond in a humane way

1. Mayes v Mayes – co-owner who wants to retain the house is out of work

2. Jackson v Jackson – just and equitable to release the cash shares of an excessively large house,
which being occupied by a single co-owner who is resisting sale

3. Jones v Challenger – the refusal to order sale may severely prejudice the value of the
beneficiaries share or keep his share locked up in the land for an unduly lengthy or indefinite
period

4. Bernard v Josephs – housing shortage may mean that the sale has a disadvantage as the
property ceases to be available as a home for both parties.

5. Bank of Baroda v Dhillon – the existence of OI is irrelevant to the statutory discretion to order
sale.
Halifax Mortgages Services Ltd v Muirhead (1997) – the trust beneficiary will be entitled to first
payment from the sale

6. First National Bank v Achampong – ill-health or disability will lead to the postponement of sale
rather than refusal of sale

7. Bank of Ireland Home Mortgages v Bell (2001) – the hardship caused by being evicted can
often-times be off-set with the fact that they had enjoyed a prolonged period of rent and
mortgage free accommodation

8. Chun v Ho – the property was required until the occurrence of any event such as the completion
of the education of one of the co-owners. The sale can be postponed.

9. Dear v Robinson – wishes of beneficiary was critical

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Summary

a. Only co-owners are in dispute & no children involved - SALE

b. Land purchased as investment - SALE
c. Inequitable to deny the co-owner their share in the capital value - SALE
d. Children living in the property - NO Sale
e. Co-owner wanting sale is not in desperate financial need - NO Sale
f. If all specifically agreed not to sell unless all consent - NO Sale
g. One of co-owners has special reason to remain in occupation - NO Sale
h. One of co-owners behaved inequitably - NO Sale
i. Co-owner resisting sale provided most of original purchase £ - NO Sale

Note:
• The position of the courts could vary
• There is no Duty to sell under Trust of Land
• The co-owners must be properly advised before they purchase property
• Entering a Restriction
• Doctrine of Overreaching
• Under section 14 TOLATA 1996 the courts can re-visit previous application if circumstances
have changed before the sale actually takes place
Dear v Robinson (2001) – a previous order for sale was rescinded because circumstances
had changed and now the Beneficiary no longer wanted immediate sale

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Situation of bankruptcy
When appropriate, the student needs to apply Section 335A Insolvency Act 1986. This will be relevant
if the person applying for the sale in the Trustee is Bankruptcy of the Co-owner who has been declared a
Bankrupt

General
1. When a co-owner (either a legal or equitable co-owner) is made a bankrupt, their assets will
vest in a "Trustee in Bankruptcy". The job of the trustee is to administer the bankrupt’s assets
with the view of paying off all his creditors.

2. He will step into the shoes of the legal or equitable owner - to administer his estate.

3. The trustee will definitely want to sell of the property but naturally the other co-owner will
resist the sale as they would want to continue to stay in that property

4. If the sale is opposed, then the trustee can apply to the courts for a court order for sale and this
will be done under Sec 14 TOLATA 1996.

5. The list of factors in sec 15 TOLATA will not be applicable in this situation.

6. The relevant section will be sec 335A Insolvency Act 1986.

7. By virtue of the Enterprise Act 2002, the action must be brought within 3 years of the
bankruptcy. Otherwise there is a risk that the property can return to the Bankrupt free from the
claims of the creditor.

8. The court will have to balance the needs of:

Innocent Creditors Innocent Co-owners

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Section 335A Insolvency Act 1986
Applies whether or not the co-owners are married or in any personal relationship

Not an exhaustive list of considerations

Section 335A (2)

(a) Interests if the bankrupts creditors

(b) Where the application is made in respect of land which includes a dwelling house which is or has
been the home of the bankrupt or the [bankrupt’s spouse or civil partner or former spouse or former
civil partner]

(i) the conduct of the [spouse, civil partner, former spouse or former civil partner], so far as
contributing to the bankruptcy,

(ii) the needs and financial resources of the [spouse, civil partner, former spouse or former civil
partner], and

(iii) the needs of any children; and

(c) All the circumstances of the case other than the needs of the bankrupt.

The needs of the spouse and the needs of the children

It is only for

Spouse Civil
Partner

Not Unmarried Co-owners

That the needs of Spouse and Children are expressly

mentioned as relevant factors for the courts
consideration

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 All other circumstances
Needs of the children of Unmarried Co-owners can be taken into account by the courts
under this heading

Needs of the bankrupt is not taken into account — Everitt v Budhram (2009)

The courts may then make such orders that it thinks just and reasonable

Time of application
A. Application made within 1 year of the bankruptcy

Courts likely to delay the sale. This is so as to give the innocent occupiers enough time to make
alternative arrangements

B. Application made more than 1 year after the bankruptcy

The interests of the creditors are deemed to outweigh the interests of the resisting co-owners,
unless there are "exceptional circumstances"

Thus highly likely that the courts will order sale in order to satisfy the creditors

Harrington v Bennett (2000)

Application made more than a year and the sale was granted as there were no exceptional
circumstances

Delay Sale Order Sale Unless Exceptional Circumstance

Date declared ONE year since

Bankrupt Just because there are Exceptional
bankruptcy
Circumstances does Not mean that they’d
This is to give the Innocent occupiers postpone the sale.
The chance to make alternate housing
arrangements The court has to exercise their discretion.
The Creditors interest does not necessarily
outweigh other factors

Grant v Baker (2016)

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Summary seen in Dean v Stout (2004) Lawrence Collins J

a. The presumption is that the interest of creditors outweighs all other considerations and the
presence of Exceptional Circumstances is a necessary condition to displace this presumption.
But even if there is Exceptional Circumstances, the courts can still make an order for sale.

b. Exceptional circumstances , typically relate to the personal circumstances of the of joint owner
— mental or medical issues

c. This category of Exceptional Circumstances is not to be categorized or defined — court is to

make a value judgment looking at all the circumstances (looking at all the facts)

d. The circumstances must truly be exceptional. It must be beyond what usually happens when you
are lacking money. Re Citro – it cannot be that you are losing your home.

e. It is not uncommon for partners and children to be faced with eviction or homelessness when
they do not have enough money to buy alternate housing. This will not be considered as
exceptional

f. The creditors can still ask for sale even if the entire proceeds will go towards the expenses of the
bankruptcy. The fact that the entire money will be swallowed up to pay the expenses will not
amount to Exceptional Circumstances.

Thus sec 335A favours the request of the trustee ie SALE if the application is made after 1 year.

It is very difficult to satisfy this test of Exceptional Circumstances

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Grant v Baker – the judge has to hear all the evidence

Begum v Cockerton – person resisting sale bears the burden of proving Exceptional Circumstances

1. Harrington v Bennett (2000) – Sale Ordered

even though the Bankrupt had a purchaser who was going to pay a higher amount than what
the Trustee in Bankruptcy had

2. Begum v Cockerton (2015) – Sale Ordered

even if family was going to lose their home

3. No sale if Occupier was having a serious medical condition

Grant v Baker – (daughter of the Bankrupt was ill)

Claughton v Charalambous (1998) - bankrupt’s spouse is seriously & terminally ill and house
was modified to cater for her illness

Everitt v Budhram (2009) — mental state of the bankrupt's spouse was enough to postpone the
sale to another year but the house needed to be sold after the further one year had elapsed

Martin – Sklan v White (2007) – web of support by neighbours, relatives and school for the kids.
Sale postponed till kid was 18

Nicholls v Lan (2006) – Bankrupts spouse diagnosed as being a paranoid schizophrenic

Re Gorman (1990) – property had been adapted specifically to accommodate an occupants

special housing needs

Barca v Mears (2004) — argued for the sale to be postponed longer than a year due to the special
educational needs of the son. OTF the argument was not persuasive enough to postpone sale. But the
courts made the following observations:

a. Confirmed that Re Citro did assimilate the position of married and unmarried couples (even if
they stood in no relationship at all)

b. The pressure for sale by the trustee was virtually always overwhelming

c. Need to consider the Human Rights Act 1998 & Article 8 ECHR — respect for private and family
life.

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The almost automatic ordering of the sale when the trustee applies after 1 year may contravene the
ECHR. A balance needs to be struck between the creditors' needs and the ECHR.

Thus it should be that in the normal everyday' bankruptcy cases, the creditors interest would outweigh
all other interests. But Exceptional Circumstances must be given proper consideration without the
presumption of bias in favour of the creditors.

But the courts have not been too keen to defend the rights of the innocent co-owners

Donohoe v Ingram (2006) — the courts merely paid lip service to the convention and then decided that
there was no Exceptional Circumstances

Nicholls v Lan (2006) — courts found no incompatibility per se between the IA 1986 and the ECHR

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After their parents died in 2017, Anne, Bertha, Cecil and Dorothy decided to use their inheritance money
to buy a country cottage. The four sisters contributed different amounts towards the purchase of the
cottage. The property was registered in their names as beneficial joint tenants. Dorothy was 15 years old
at that time.

At first, they used the cottage occasionally for weekend getaways and holidays. However in June 2018,
Dorothy had to move to a vocational school near the cottage and so she moved into the cottage. A few
months later her boyfriend, Tony also moved in with her when they discovered that she was pregnant.

In August 2018, Anne was posted abroad and she sold her interest in cottage to Cecil and moved out of
the country.

A few months after Anne left, Bertha started to get restless and wanted to travel the world. She wrote a
few letters to Cecil and Dorothy asking them if they were interested in buying her out and if they were
then they could sit down and come up with a reasonable amount for her interest in the property. Cecil
and Dorothy read the letters and intended to buy Bertha’s interest but never replied the letters and
never met to discuss the sale.

In December 2018, while on a skiing trip, Bertha sent a postcard to the cottage addressed to Dorothy
and Cecil saying, “I have decided to sell my share to someone else since you both are not interested!”
The day the postcard arrived at the cottage, a few hours later, Cecil was killed in a car crash. She had
made a will leaving her property to The Cancer Foundation.

Bertha has returned from her trip and now wants the property sold. Dorothy is refusing sale as she is
still studying and is intending to raise her child there.

Discuss.

If the property were sold, how will the proceeds of sale are divided?

Compiled and prepared by Ms. Sharon Page 25