PROPERTY LAW

CO-OWNERSHIP
PROBLEM QUESTION

Question-1
In 2008, Tim and Tina decided to live together as an experiment before getting
married. They purchased a semi-detached house, of registered land, in the centre
of town with the aid of a 90 per cent mortgage from the Steady Building Society.
The rest of the purchase price was provided by Tim out of his savings. The house
was conveyed to Tim alone, as Tina does not have a full-time job. Tim had an
excellent job in the construction industry and Tina had no need to work. She
stayed at home from where she did occasional work as a dressmaker, the money
from which she used to pay for holidays. In 2009, with the construction industry
in decline, Tina’s income was useful to help pay the mortgage and Tim often said
that he did not know how they would meet their commitments if Tina gave up
dressmaking. Later that year, however, Tim inherited enough money from his
uncle to pay off the mortgage and the couple decided to get married, as Tina was
now pregnant. They had a tropical wedding costing several thousand pounds but,
on their return, they found that Tim’s employer had gone into liquidation and he
was unemployed. Despite the birth of their child, Tina took on more dressmaking
to meet the mounting bills. Unfortunately, Tim’s attempt to start his own business
has failed and he owes the bank several thousand pounds. He is now bankrupt
and his trustee in bankruptcy is pressing for the house to be sold.
Advise Tina.

Ans: In this scenario, a lot hinges on whether Tina owns a portion of the house, or, to
put it another way, if she has any equitable interest in it. Tina might be able to thwart her
husband's bankruptcy trustee's request to sell the property if she can prove that she has
an "ownership interest" in it. The property is transferred into Tim's sole name at the time
of purchase. The purchase is funded by a cash deposit and a mortgage. Since Tim will
be the only legal owner of the property, he pays the entire cash deposit, and a mortgage
is established with him. There is no written express declaration of trust in Tina's favor;
the title is only registered in his name. So, it is evident that Tim was the legal and
equitable owner of the land at the time of the acquisition. There is no formal or implied
co-ownership, and there is no land trust. In these circumstances, Tina must rely on a
line of authority that originates from the House of Lords' historic Pettitt v. Pettitt (1970)
case, which has since been revised by Stack v. Dowden (2007), and the most recent
ruling in the Supreme Court in Jones v. Kernott (2011).

This body of decisions has demonstrated that a non-legal property owner may assert an
equitable ownership interest in another person's property. A person may claim an
equitable interest in property belonging to another provided they can show a common
intention that this was to be the case, according to Pettitt and a related House of Lords
ruling in Gissing v. Gissing (1971). Either resultant trust, as in Curley v. Parkes (2004)
and Laskar v. Laskar (2008), or constructive trust, as in Grant v. Edwards (1986) and
Abbott v. Abbott, may be used to accomplish this.

It's been debatable for as long as anyone has had the right to claim land that belongs to
someone else. A person could only demonstrate an interest in the property via one of
two methods, according to the House of Lords' ruling in the case Lloyds Bank v. Rosset.
A third option, outlined in Stack v. Dowden and upheld in Kernott, has since been added
to this. First, as in Eves (1975), Grant v. Edwards, and Babic v. Thompson, the claimant
may demonstrate that the legal owner had expressly promised her that she should have
an interest and that she had relied on that promise to her harm (1998). Although a
constructive trust allows for the emergence of such an interest, the facts seem to
exclude Tina from proving her claim. Tim's praise of her dressmaking in his words of
thanks may or may not count towards this goal. Second, if the claimant actively
contributes to the house's purchase price, she may be able to prove an interest. If Tina
made a contribution at the time of purchase, the size of her interest will be in proportion
to her payments (likely a resulting trust; see Curley v. Parkes; however, take note that
Kernott suggests resulting trusts are inappropriate in the context of domestic homes);
alternatively, if contributions were made later, the share can be equivalent to the share
she and Tim agreed she should receive as compensation for making the payments, or
even that which is fair in the circumstances (Crossley v Does she have a stake in going
down this "payment" path?

We are informed that Tina does make these payments, and Lord Bridge in Rosset
acknowledges that such an interest may result from mortgage repayments. As
previously mentioned, the court now seems to be able to quantify this "payment
interest" either by going the conventional route of awarding a proportionate share in the
property (Drake v. Whipp (1995)) or on the theory that the parties had a shared intention
as to the size of the claimant's interest (or what is fair in the absence of that intention -
Kernott), with the payments being the trigger for it (Cooke (1980); Oxley). We would
need to know if Tina and Tim ever discussed the issue of ownership share in order to
calculate Tina's share. If they haven't, the court will follow Jones v. Kernott and use a
comprehensive (and hence unexpected, Aspden v. Elvy (2012)) approach to
quantification that takes into consideration all interactions with the property and can
depend on both an imputed and an implied intention.

Yet, Tina may be able to rely on Stack v. Dowden and Jones v. Kernott even if she is
unsuccessful using any of these two "conventional" methods. In Jones v. Kernott, the
Supreme Court held that a person may prove a shared intention by looking at all of the
parties' interactions with one another over the property. A constructive trust may
develop even in the absence of an express pledge (route 1) or payment toward the
purchase price (route 2) if the parties' overall interactions and attitudes toward the
property suggest a shared goal regarding ownership. It is crucial to keep in mind that
whereas imputation is allowed at the process's quantification step, it is not allowed at
this, the "acquisition" stage. The parties must demonstrate a sincere purpose, even if it
is just suggested, that their equitable interests would differ from the legal interests. This
is undoubtedly a more flexible strategy. Unfavorable reliance must still exist, but this can
also be demonstrated by the facts of the parties' interaction. Once more, using a holistic
approach and, if necessary, an imputed intention, the size of the share can be
determined.

Tim, the legal owner, shall hold the property on trust for himself and Tina as tenants in
common in the determined shares if Tina can prove her interest in the manner
described above. Of course, there is only one land trustee, thus there is no room for
abuse (Williams and Glyn's Bank v. Boland, 1981). According to s. 29 of the LRA 2002,
the standard norms of registered conveyancing, any buyer may very well be bound by
Tina's interest. According to Abbey National BS v Cann (1991), Tina will have an
overriding interest under para 2 of Sched 3 to the LRA 2002 if she is in discoverable
actual occupation of the property at the time of any sale to the purchaser or if, while in
occupation, the purchaser is aware of her interest, much like Williams and Glyn's Bank
v. Boland.

Nevertheless, Tina's problems do not end there. Tim's whole property, including the title
to the house, passes to the bankruptcy trustee when he declares bankruptcy. We've just
established that the trustee is unable to sell the property right away. In such cases, the
trustee will ask the court to issue a sale order pursuant to TOLATA 1996 Section 14. If
such an application is made, the court will have to weigh Tina's claims against the
claims of the creditors (assuming she doesn't object to the sale), and s 335A of the
Insolvency Act 1986, which was added to that Act by Sched 3 to the TOLATA, provides
a list of the factors the court must take into account (as required by s 15(4) of the
TOLATA), provides a list of the factors that the court must take into account. In any
case, the court will only allow a deferral of sale for one year unless there are
"extraordinary circumstances" (art. 335A (3) of the Insolvency Act 1986 and see
Nicholls v. LAN (2006)). They include her interests and any children. One year is the
most Tina may hope for if a postponement is ordered, possibly to allow her a chance to
find another home regardless of the size of her share. There are no extraordinary
circumstances in this case (for a refusal to postpone in Re Harrington (2001) and
guidance on how the court should handle unusual situations while upholding human
rights, see Barca v. Mears (2004)). In conclusion, Tina will have an interest, but a court
will probably eventually mandate the sale. Naturally, Tina's interest will be satisfied out
of the sale profits before those proceeds are allocated and will not be subject to that of
Tim's creditors. As stated earlier, the exact sum will depend on how the court
determines her part.

Question-2
Carrie, a rich widow, is the registered proprietor of a large house in London.
Recently, at a friend’s party, she met Simon, an 18-year-old student, and, after a
passionate affair of a few weeks, she invited him to live with her. Simon accepted.
Being a proud man, Simon insisted that he share the expenses of running the
house and, over the next few months, he paid the occasional bill and even paid
for the cost of having the house redecorated both inside and out. Simon was a
little concerned that, because of the difference in age, Carrie would soon tire of
his charms and he repeatedly asked her about the future. Last year, after one
particularly splendid dinner together, Carrie told Simon: ‘What’s mine is yours!’
Next day, thinking that his future was secure, Simon spent his life savings on a
sports car. Unfortunately, unknown to Simon, Carrie was paying school fees for
her five children and, two months ago, she had to take out a mortgage with the
Harrow Building Society to cover next year’s fees. The building society visited the
property when Simon was on a field trip abroad and Carrie executed the
mortgage that day. The building society registered its charge at the Land Registry
the day after he returned. Carrie has now met someone more her own age and
has immigrated to Australia. The building society is seeking possession of the
property in order to realise its security.
Advise Simon.

Ans: This inquiry relates to the acquisition of beneficial interests in another person's
property and whatever repercussions, if any, that ownership may have on a third party
—in this case, a mortgagee. Concisely, the building society, who has a stake in the
property and a power of sale under s. 101 of the LPA 1925 as a result of its fully
registered mortgage, is in conflict with Simon, who must assert an equitable right of
ownership to it. So, it is imperative to determine if Simon has such an interest and, if so,
whether the building society is obligated by it. If the building society is obligated, there is
no chance that the property will be sold with vacant possession unless a court
application is made pursuant to Section 14 of the TOLATA 1996 (see Bank of Baroda v.
Dhillon (1998) and Bank of Ireland v. Bell (2001)). In any case, Simon would be entitled
to the cash equivalent of his interest before the building society could be paid.

The rules developed in Pettitt v. Pettitt (1970), formalized by the House of Lords in
Stack v. Dowden (2007), and affirmed by the Supreme Court in Jones v. Kernott must
be applied if Simon is to have an interest in the property (2011). There is neither an
express written declaration of Carrie's trust in Simon nor an express conveyance to
Simon as owner. The rule of constructive or resultant trusts is his sole remaining hope.
In this regard, Stack and Kernott clearly state that a person claiming an equitable
interest in property must be able to demonstrate either some contribution to the
purchase price of the property, which would raise a resulting trust in their favor (see
Laskar v. Laskar (2008), though Stack and Kernott question the appropriateness of
using resulting trusts in the context of domestic homes), or must demonstrate some
express oral assurance that they were to have an interest in the property. On the basis
of the known facts, it is obvious that Carrie was the only legitimate owner of the property
at the time Simon and Carrie met. Simon is therefore unable to follow the next trust path
to an equitable interest.

So, it would seem that Simon should rely on the law of constructive trusts: either he
must assert an express promise together with a harmful reliance or he must rely on the
parties' entire course of conduct. Are decorating expenditures important in this case? A
case is obviously made out if Simon can demonstrate that he invested his cash in
upgrades in exchange for a pledge or agreement to share in the property's ownership.
Nevertheless, there is no proof for this, and the statements Carrie does make about it
come after Simon makes a purchase. According to such specific assertions, such an
expenditure was not possible. There is no trust.

It is a question of construction as to whether Carrie's eventual vow to Simon will satisfy

the Stack and Kernott standards. First, there is a question of intent: did Carrie mean for
Simon to have a stake in the property when she said, "What's mine is yours" following a
passionate dinner? On the other hand, no decision has disputed the right of the specific
promisee to rely on a statement made by the property owner about ownership of the
property if a reasonable person would have thought that was what they were doing
(see, for instance, Eve's v. Eves (1975)). In our case, we are unsure of what Carrie
intended, but a logical person in Simon's position would probably interpret this as a
guarantee regarding the ownership of the shared house. This would also be consistent
with the basic logic of Stack, which was upheld in Kernott, which contends that a court
shouldn't be overly formulaic in its search for a shared aim. Simon can argue that the
pertinent promise was made on this basis, and it is evident from the circumstances that
he relied on that guarantee.

Yet, there is still a difficulty with this. According to some cases, the harm incurred as a
result of the promise must be connected to the subject property, as in Gissing and
Christian v. Christian (1981). Another perspective, however, is that it does not matter
that the actual harm sustained was not property-related as long as the harm was
preferred to the promise, that is, was brought about by it. If a promise has been made
and relied upon, rather than because the property has been paid for, then it should not
matter how the promisee suffers a loss because whether or not it is related to the
property, they have still spent money that they would not otherwise have done,
according to Stack again. Unless there is a clear understanding of the share (Crossley
v. Crossley, 2005), the court will determine the magnitude of any interest that results
from this (Oxley v. Hiscock, 2004). In fact, the court is permitted to assume a purpose
(where it is not possible to indicate one) with regard to quantifying the appropriate
portion, and this may well take into consideration Carrie's departure from the property,
as the Supreme Court made explicit in Kernott (as was relevant in Kernott itself).

In the event that Simon does have a stake, how does he stand with the buyer
mortgagee? There can be no overreaching because Carrie is the sole trustee and
Harrow clearly did not pay the money to two land trustees when it provided the funds. If
Simon can prove an interest that prevails under Sched 3, Paragraph 2 of the LRA 2002,
the building society may be subject to Simon's interest under Section 29 of that Act.
First, as we have just established, Simon must be interested in land. Second, the
customer must be aware of his interest or his discoverable genuine occupation.
According to the circumstances, given that the property serves as his primary
residence, we should anticipate that there would be some indication of his presence,
making his occupation known to a fairly cautious buyer conducting the customary
inquiries. Although we cannot be certain, he would not be eligible for an overriding
interest under Sched 3 of the 2002 Act if his occupation were to be determined to be
undetectable.

Lastly, Simon must actually be working at the relevant time. Based on Abbey National
BS v Cann (1991), it is likely that the mortgage's creation, which was confirmed in
Barclays Bank v Zaroovabli (1997), is the critical moment under the LRA 2002.
However, you should also take note of Lewison J's remarks in Thompson v Foy (2009).
So, we must assess whether Simon was actually engaged in a discoverable
employment when the accusation was made. This seems to be established based on
the evidence listed above.

Hence, Simon was in discoverable real occupation of the property at the time the
mortgage was created and has an interest under a constructive trust. He has an
overriding interest against the building society as a result and takes precedence over it
under Chapter 3, Paragraph 2 of the LRA 2002: Section 29 of the LRA 2002. It must
request a sale order from the court in accordance with Section 14 of the TOLATA since
it is unable to gain vacant possession through its regular mortgagee rights. Even if this
is approved, it is unlikely that it would get its money back in full because Simon's
interest has priority and he must be compensated first from any sale proceeds.
According to Alliance & Leicester v. Slayford (2001), the building society might go after
Carrie personally for the mortgage obligation and declare her bankrupt.

Question-3
Alfonso, Bertie, Clive, Denny and Ernie are all trainee solicitors in London and
they decide to buy a house together. All contribute equally to the purchase price
and the house is conveyed to ‘Alfonso and Bertie as joint tenants in law and in
equity’. Several months later, Bertie is made redundant and forges Alfonso’s
signature to a mortgage made with the Easy Loan Bank. At the same time,
Alfonso agrees in writing to sell his interest in the property to Ernie and the
agreement is executed. Meanwhile, Clive has plans to marry and asks Denny
whether he will buy his share in the house. Denny is very keen but disputes the
price. Before they can come to an agreement, Clive is killed in a road accident,
leaving all his property to his fiancée, Wilma. Very soon after, Ernie becomes
entangled in a City deal that goes badly wrong and, owing many millions, is made
bankrupt. Before Ernie is formally adjudged bankrupt, Denny commits suicide,
leaving all his property to the Battersea Dogs’ Home. Ernie’s trustee in
bankruptcy, Wilma, the Dogs’ Home, Bertie and Denny’s next of kin all claim an
interest in the property.
What is your advice?

Ans: This inquiry relates to the law of severance. An equitable joint tenancy might
become an equitable tenancy in common through the process of severance. The only
type of co-ownership that is permitted by law under the LPA 1925 is joint tenancy. This
joint tenancy is valid and irrevocable. In other words, when we discuss severing the joint
tenancy, we mean to do it in an equitable manner.

There are both statutes and common law rules governing severance. Unless it appears
they have promised not to, as in White v. White (2000), an equitable joint tenant may,
pursuant to section 36(2) of the LPA 1925, give written notice to the other joint tenants
of their intention to sever, which actually results in a severance in equity. For examples,
see Burgess v. Rawnsley (1975) and Kinch v. Bullard (1999). Similarly, Williams v.
Hensman (1861), a case establishing common law, states that severance may happen
in one of three ways: first, when one joint tenant performs "an act operating on their own
share" (such as selling his interest); second, when one joint tenant dies; and third, when
both joint tenants die. Furthermore, by "mutual conduct" (where the party's conduct is of
a kind sufficient to evince an intention no longer to be part of a joint tenancy), which acts
to sever the shares of all those agreeing, even if the agreement is never carried out or is
actually unenforceable - Burgess). Second, where joint tenants agree to sever by
"mutual agreement"

The TOLATA 1996 land trust has Alfonso and Bertie as the joint tenant trustees of the
legal estate holding for the equitable owners (under Section 35 of the LPA). Who are
the legal proprietors, and are they tenants in common or joint tenants? Even if it is
explicitly stated in the transfer that Alfonso and Bertie are joint tenants, this conveyance
is only conclusive amongst the parties to it (1986). Thus, Clive, Denny, and Ernie are
not exempt from the law of resultant and constructive trusts. There is no question that
Clive, Denny, and Ernie will be entitled to claim a portion of the equitable ownership by
virtue of their contribution to the purchase price of the land at the time of acquisition,
following Dyer v. Dyer (1788), Pettitt v. Pettitt (1970), and Curley v. Parkes (2004). In
actuality, the five parties are joint tenants because they each made an equal
contribution to the purchase price. As a result, Alfonso and Bertie hold the property in
their capacity as land trustees on behalf of Alfonso, Bertie, Clive, Denny, and Ernie, who
are all joint tenants in equity.

(a) Bertie’s Attempted Mortgage to the Easy Loan Bank

Bertie and Alfonso work together as a trustee for the legal title. Hence, he cannot deal
with the legal title on his own, and a mortgage to the bank is not possible without
Alfonso's consent. Each transfer of the legal title requires the sincere consent of both
legal owners. According to First National Securities v. Heggarty, forging the other legal
owner's signature is insufficient to establish a mortgage of the legal title (1984). But in
light of Ahmed v. Kendrick (1987), Banker's Trust v. Namdar (1997), First National Bank
v. Achampong (2003), and Section 63 of the LPA 1925, Bertie's attempted mortgage will
be enough to mortgage to the bank the interest that Bertie does control, or his equitable
interest. Without a doubt, Bertie separates his portion of the equitable interest as a
result of this mortgage of his equitable interest, which Hensman refers to as "an act
working on his own share." Despite being mortgaged to the bank, he is now a tenant in
common of one-fifth. The remaining four-fifths are still held jointly by the other owners.
Alfonso and Bertie continue to have the legal title as previously.

(b) The Transfer by Alfonso

Alfonso's written agreement to sell his equitable interest in the property to Ernie is
enforceable (see section 2 of the Law of Property (Miscellaneous Provisions) Act 1989).
As Bertie would have needed to approve, this is not an agreement to sell the legal title.
As mentioned above, this is a move that affects only his portion of Hensman and will
end Alfonso's interest in the joint tenancy. Hence, Alfonso's equitable portion passes to
Ernie upon execution of the contract. Alfonso and Bertie currently own the property in
trust for Ernie as tenant in common of one-fifth, Bertie as tenant in common of one-fifth
(but mortgaged), and Clive, Denny, and Ernie as joint tenants of the remaining property.

(c) Mutual Agreement or Mutual Conduct

It's unclear if Clive and Denny's conversations result in any termination of their joint
tenancy. Denny is eager to acquire, but it appears that there has been no "mutual
agreement" within Hensman over a price. This probably inhibits separation by consent.
Can the discussions between Clive and Denny constitute to severance by "mutual
behavior," which is a series of dealing between the parties that shows a desire to hold
as tenants in common, assuming that mutual agreement is inapplicable in this case?
This is ambiguous because it is difficult to understand why a failed attempt to agree (as
in this case) should be viewed as an agreement to break even when there isn't one. If it
were conceivable, there would be very little distinction between mutual agreement and
mutual conduct. Nonetheless, it is evident from reading Lord Denning's decision in the
Burgess case that he does make the suggestion that discussions amongst joint tenants
may result in severance. In essence, the solution will rely on the particulars of each
case. Because of the probable overlap with mutual agreement, the inference in our case
is that severance has not taken place. So, the situation is still as it is in (b) above.

(d) The Right of Survivorship

After Clive passes away, he and Denny and Ernie become joint tenants of the remaining
third of the property. He hasn't severed his stake; therefore, Denny and Ernie are
entitled to it under the rule of survivorship. According to Gould v. Kemp (1834),
survivorship takes precedent over testamentary dispositions, hence the fact that he left
Wilma his property by will is meaningless. Alfonso and Bertie own the property in trust
for Ernie as tenant in common of one-fifth, Bertie as tenant in common of one-fifth (but
subject to a mortgage), and Denny and Ernie as joint tenants of the remaining property.

(e) Ernie’s Bankruptcy and the Suicide

It is obvious that a bankrupt's property does not become vested in the trustee in
bankruptcy until he or she is legally pronounced bankrupt under the Insolvency Act (as
applied in situations quite similar to ones in Re Dennis (1992)). Naturally, at that point,
the bankrupt's property is alienated (that is, transferred) in a way that causes the rupture
of any joint tenancy to which he may be a party; this is truly an act working on his own
share, albeit an unintentional one. But, in our example, Ernie has not been declared
bankrupt when Denny passes away and gives his property to the Dogs' Home, thus
there has been no severance between the two remaining joint tenants. Sadly, Ernie now
owns Denny's shareholding as a result of the right of survivorship. In other words, when
Ernie is declared bankrupt, he actually is the only joint tenant left alive. As a result, all
the assets included in the joint tenancy have accrued to him and will be turned over to
the bankruptcy trustee for the purpose of paying creditors.

In conclusion, Alfonso and Bertie are considered the rightful owners of the property
holding as joint tenant trustees in equity in the following ways: for Ernie as tenant in
common of one-fifth, which will pass to the trustee in bankruptcy; for Bertie as tenant in
common of one-fifth, but as mortgaged to the bank; and for Ernie as owner of the
remainder, having succeeded to the shares of Clive and Denny under the right of
survivorship. Also, the trustee in bankruptcy receives this to distribute to the debtor's
creditors.

Question-4
In 2010, Jim and his wife, Amy, who had separated, bought a restaurant for
£600,000. Their finances were, of course, kept separate and they each contributed
equally to the price. The property was held in their joint names but the transfer
did not record the beneficial interests. The business ran successfully but, later,
the strain of working with her estranged husband proved too much for Amy and
she left. She then wrote to Jim, saying that she would like to have the business
sold so that she could realise her share of it, especially as she now had a son by
her new partner, Don, and she wished to make provision for him. Jim was
reluctant to agree to this, as he felt that the business was doing well.
Advise Amy on whether she has an interest in the restaurant and, if so, in what
share. In addition, you are asked to advise her on any procedures that she would
need to follow in order to enforce a sale if Jim persists in refusing to agree to
one.

Ans: Jim and Amy will possess the legal estate as joint tenants in accordance with
section 34(2) of the Law of Property Act of 1925 (LPA 1925), which states that when
land is transferred to co-owners who are of legal age, they must be joint tenants. Then,
the issue becomes whether they hold the equity's beneficial interests as tenants in
common or as joint tenants. If they hold as joint tenants, neither will have a distinct
share, and survivorship will take effect, ensuring that the beneficial interest will
automatically transfer to the survivor upon the death of the first. If they are tenants in
common, then they do have individual shares that may be sold, for example, and which
will be included in their estate upon death.

We are informed that the beneficial interests were not recorded in the transfer, thus we
must use equitable standards. Even though Jim and Amy were still married when they
purchased the restaurant, there are no words of severance suggesting a distinct stake,
and hence a tenancy in common. It is suggested that because Jim and Amy are
separated, their relationship is commercial and not domestic, and as a result, they will
be tenants in common and each have a separate share because there is an equitable
presumption against a joint tenancy where there is a relationship of a commercial
character, such as partnership property (Re Fuller [1933]). However, they each paid an
equal portion of the purchase price, which by itself suggests a joint tenancy. The ruling
in Stack v. Dowden [2007], which stated that the courts could determine that there is a
beneficial tenancy in common even when there is a declaration that they hold the title as
joint tenants, will not apply in this case because it was made clear that it dealt with
"people living together in an intimate relationship" rather than, in Lady Hale's words,
"commercial men," as she put it. Here, Amy and Jim are no longer together, so the
relationship must be seen in a business context.

Since there is no way to know for sure, the answer must be that it could be either, even
though in my opinion a tenancy in common is still the more likely scenario. Whatever
the case, there doesn't seem to be any justification for their beneficial interests to differ.
Since there is no way to know for sure, the answer must be that it could be either, even
though in my opinion a tenancy in common is still the more likely scenario. Whatever
the case, there doesn't seem to be any justification for their beneficial interests to differ.
The issue at hand is whether Amy's letter to Jim expressing her desire to sell the
company amounted to a severance of any joint tenancies. There is nothing to sever if
Amy and Jim are tenants in common because Amy already owns a separate share.
But if the property is held as joint tenants, the question is whether Amy has severed her
interest by writing in her letter that she wants to sell the company so she can get her
share of the proceeds. A joint tenancy in equity may be terminated under section 36(2)
of the LPA 1925 by written notice to the other joint tenants. Under section 196(3) of the
LPA 1925, a notice is considered properly served if it is placed at the intended
recipient's last-known address. Amy would be wise to serve Jim a formal notice of
separation that complies with section 196(3) of the LPA 1925 since this appears more to
be the beginning of conversations between them than a notice of termination. This
would protect her position, for instance, if Jim passed away before discussions were
finished. The next concern is what steps Amy would have to take if Jim refused to
consent to a sale since he believes the company is doing well. Amy may only apply to
the court, which has discretion, as she has no authority to demand a sale.

Any party interested in the trust may apply to the court for an order, which may, for
example, be for a sale or sanctioning what would otherwise be a breach of trust, under
Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TLATA). There
is no doubt that Amy is both a trustee and a beneficiary in this case because the word
"any person interested" covers trustees, beneficiaries, remaindermen, and secured
creditors of beneficiaries. According to Section 15, the following factors must be taken
into account by the courts when resolving disputes: (a) the settlor's intentions; (b) the
purposes for which the property is held on trust; (c) the welfare of any minor who
resides on the property or who could reasonably be expected to do so; and (d) the
interests of any secured creditor of any beneficiary.

It should be emphasized that these criteria are not in any particular order of priority. (c)
is not applicable here since, while Amy has a kid, who is presumably a minor, there
appears to be no intention of his occupying the property as his home, especially
because there appears to be no dwelling facility. Neither is a sale pursued by a creditor,
such as a mortgagee, as would have been required under (d). Thus, the only relevant
criteria are (a) and (b), which are equivalent because Amy and Jim are the settlors, as
they established the trust and determined why the property was to be held on trust - in
this case, for it to be run as a restaurant.

Land was purchased by four co-owners in Re Buchanan-Wollaston's Conveyance

[1939] Ch 738, CA to stop it from being developed. Later, only one wished to sell; the
others didn't. The court declined to impose a sale order since the initial goal was still
met. Based on this, Jim would have a compelling argument to reject Amy's request to
sell the restaurant since, in his opinion, there is no justification for doing so. Since
section 15 of the TLATA specifically mentions the purposes for which property was
acquired, it is argued that this decision, which predates the TLATA and was based on
its predecessor, section 30 of the LPA 1925, is still sound precedent and can be used in
this case.

Amy will need to provide her agreement to a sale if she wants to ensure that she gets
her entitlement if she can't force a sale because she will still be Jim's joint tenant in law.
assuming she does not want to wait that long, she can sever her joint tenancy
(assuming that is what she has) in equity by selling it to someone else, such as Jim,
since this is one of the fair means of severance outlined in Williams v. Hensman (1861),
and she will be given the sale profits.

Question-5
Sam, Ben, Ed and Sue, who worked at a firm of City of London solicitors as
litigators, bought ‘The Nest’ in 2012 to provide a home for themselves while they
were working at the firm. They remembered their Land Law and were registered
as joint owners of the property in law and equity. A restriction was entered on the
register, at the insistence of Sam, providing that ‘The Nest’ could not be sold
without his written consent.
In 2013, Ben was short of money and so he sold his interest in ‘The Nest’ to Sue.
Ben later died, leaving ‘all my rights’ in ‘The Nest’ to his girlfriend, Nesta. Later
that year, Ed decided to leave the firm and work for a country firm of solicitors as
a conveyancer, which he thought would be less stressful. He orally agreed with
Sam and Sue that Emma, a mutual friend, would ‘take my place’ but Ed died
before the agreement could be formalised. Ed died intestate, leaving only a
brother as a close relative. It is now 2017 and Emma has moved into ‘The Nest’.
Sam and Emma have quarrelled and Sam says that Emma should leave the
property. Meanwhile, Emma, Nesta and Sue all want the property to be sold but
Sam refuses his consent. Advise the remaining parties on:
(a) Who now holds the legal title to the property;
(b) Who now has a beneficial interest in the property;
(c) Whether Emma can be required to leave the property;
(d) Whether Emma, Nesta and Sue can insist that the property is sold.
Ans: When land is transferred to co-owners who are of legal age, they must be joint
tenants1 and there can only be four of them, according to section 34(2) of the LPA
1925. Sam, Ben, Ed, and Sue will therefore acquire the legal title to "The Nest," and it is
obvious that they are all of legal age as a minor cannot own a legal estate in land (s.
1(6) LPA 1925). Section 36(2) of the LPA 1925 states that because the land is owned
by joint tenants, it must be kept on trust, which means it must be regulated by the Trusts
of Land and Appointment of Trustees Act 1996 (TLATA). The next step is to determine
how the trust's beneficial interests will be held. Tenants in common and joint tenancy
are the options. The fact that they were declared joint tenants in both law and equity
when the property was transferred to them is crucial. A tenancy in common would have
been more suitable in this case as there is no clear link between them other than their
employment, suggesting that they may not have recalled their Land Law revision very
well. As a consequence, the beneficial interest, which need not have occurred, as well
as the legal estate, which will apply under the theory of survivorship.

Under section 40(2) of the LRA 2002, which states that a restriction can prevent the
making of an entry in respect of any disposition, the restriction that the property cannot
be sold without Sam's approval has been recorded on the register. As a result, if the
property is sold without Sam's approval, the actual transfer will be legitimate but the new
owners will not be able to register as such, thereby preventing any transfer. A joint
tenancy can be severed in equity by the act of one joint tenant "operating on his own
share" because this destroys one of the four unities - that of title. Ben sold his interest in
"The Nest" to Sue in 2013, which resulted in a severance of his interest under one of
the rules outlined in Williams v. Hensman (1861). Despite the fact that he technically
has no share, it appears that the act of selling or making another disposition creates a
severance.

The peculiar situation is that Sue now retains her stake as a joint tenant with Sam and
Ed while also being a tenant in common of the part she purchased from Ben. However,
Ben's legal joint tenancy is unaffected and will pass to the remaining joint tenants, Sam,
Sue, and Ed, by survivorship upon his demise. Ben left "all his rights" in the property to
Nesta in his will, however this is meaningless since, according to section 3(4) of the
Administration of Estates Act of 1925, a joint tenant's interest ends with death, hence
Ben has no "rights" to leave. Sam and Sue and Ed had verbally agreed that Emma will
"take his place." Given that the agreement does not have to be a specifically
enforceable contract (Burgess v. Rawnsley [1975]), even though it is not formalized, it is
likely that Ed has severed his beneficial joint tenancy (Williams v. Hensman). As a
result, Emma assumes Ed's portion as a tenant in common, and Sam and Sue get Ed's
share of the legal estate upon his passing. The following concern is if Emma can be
made to leave the premises.

Beneficiaries who are entitled to an interest in possession in the land are given a right of
occupancy under Section 12 of the TLATA 1996, provided that the trust permits it.
However, no right of occupation exists if the land is inaccessible or unfit for the
beneficiary in question to occupy. The house was first bought as a residence for the four
original joint tenants when they were all employed by the same London-based
company, but the only thing we know about Emma is that she is a "mutual friend." It
may be claimed that the land is therefore unfit for her to live on.

Even if she continues to reside there, the trustees may limit or exclude her right to
occupy under section 13 of the TLATA, provided that this authority is not used
arbitrarily. The objectives for which the land is held on trust, which, as indicated above,
do not appear to involve Emma's occupation, are one of the matters that the trustees
must give consideration to when exercising their powers to restrict or exclude the right
to occupy under Section 13(4). There doesn't appear to be any reason why the trustees
couldn't kick her out of the house, but according to section 13(7), no one who is
occupying the property—whether or not they are doing so in accordance with section 12
—may be evicted without their permission or a court order. Section 13(8) allows the
court to consider the factors listed in section 13(4) when considering whether to evict a
tenant.

If Emma is to be permitted to remain, or at the very least while awaiting a court

judgment requiring her to go, restrictions may be put on occupation, and section 13(5)
lists examples: paying expenses and adhering to commitments, such making sure that
any planning licence is adhered to. As a result, Emma could be required to pay council
tax as well as her share of the gas and electricity bills. Finally, Sam and Sue are the
only remaining trustees who can consent to a disposition of the land in accordance with
section 10(2) of the TLATA. There are no other trustees. Section 11 of the TLATA
stipulates that all beneficiaries have the right to be consulted by the trustees when
determining whether to sell, and that the trustees must give regard to the majority's
decisions. However, if Sam continues to refuse, a court application pursuant to section
14 of the TLATA is required, as the restriction entered on the register means that any
disposition requires his consent. Any individual with an interest in the trust may submit
an application, and this includes trustees and beneficiaries. Sue, Sam, and Emma are
included, but Nesta, who has no stake in the land, is not.
The important factor in this case is (b): the reasons for which the property is held on
trust. Section 15 of the TLATA lays forth criteria that courts must take into consideration
when resolving disputes. It is suggested that, using the analogy with section 11, and
giving effect to the wishes of the majority, the property should be sold since only one of
the original four owners, Sam, still wishes for it to be held for its original purpose. It must
be stressed, however, that this will be at the court's discretion.