AIMS

 To introduce the fundamental concepts and principles

relating to:
 the different forms of co-ownership at law and in
equity
 the use of trusts within co-ownership of land
 the rights, powers and duties of co-owners of land

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Co-ownership 2 - The Trust

Trusts of Land
Operation of the Trust
Trustees
Co-ownership: Creation

Express : Implied:
Property Conveyed to 2 or More By operation of Law: Statutory
( Max 4 legal owners)

Powers of Trustees
Limits:

S6(1) TLATA (1) Sec 10- Consent of Ben

All the powers of an absolute (2)Sec 11- Consultation

owner “so far as practicable” and “so far as consistent
with the general INTEREST of the Trust” 3
Retirement of Trustees
1-By deed
 Provided two or more remain

2-TLATA 1996 s19-Removal by Beneficiaries

if all agree and sui juris (legal capacity)

NOTE: If no trustees
 Court may appoint or substitute (TA 1925 s41(1)
 “whenever it is expedient”
Rights of Beneficiaries
1- Section 12 TLATA 1996
Right to occupy land by Ben

Section 13 Limits (TLATA 1996)

Restriction of right to occupy

 Trustees - reasonableness
 Some not all

 Beneficiary in occupation may be required to pay outgoings or rent

to other beneficiaries
Operation of sections 12 and 13 TLATA 1996 –
Rodway v Landy [2001] CA Civ 471

 R & L were doctors in joint practice

 R sought to wind up the partnership and run a sole practice

 HC and CA: R&L held surgery as a TiC

 TLATA 1996 s.12: right to occupy
 TLATA 1996 s.13: restrict each other’s occupation – divide the
partnership and run as two separate practices
Sec 6(1)- Allows T to deal with P as Absolute owner

LIMIT- Sec 11(1)TOLATA- Wishes of the Beneficiaries

 TLATA s11(1)

 “so far as practicable”

 Trustees should consult beneficiaries of full age entitled to an
interest in possession
 “so far as consistent with the general interests of the
trust”
 Trustees should give effect to the wishes of the majority (according
to value)
Disputes between Ben

Section 14 Application to court(TLATA 1996 )

Any person interested may apply

 to compel the trustees to exercise their functions [s14(2)(a)]
 for a declaration as to the extent of their beneficial interest

in the property [s14(2)(b)]

 Court may make such order as it thinks fit

Note: Often the dispute concerns sale of the trust property

Disputes over property
 Much of the case law concerns the old law – trusts for sale and the LPA 1925 s30

Pre 1925- ”Trusts for sale” – primary purpose was sale
 Sale ordered unless there was a collateral purpose
 Re Mayo [1943] Ch 302- Trust held by Mr Mayo, Miss Mayo and another – held for Mrs Mayo and thereafter for son & daughter – Son made sec 30 App


Now- trusts of land – no presumption in favour of sale
 TLATA 1996 s4
 Ts have a power to postpone sale “despite any provision to the
contrary”
s14 application when there exists a Collateral Purpose
 Abbey National Plc v Moss (1994) 26 HLR 249

 Mr and Mrs Moss - JTs of their house

 1981: Mr M died – Mrs Moss sole proprietor
 Mr and Mrs L go to live with Mrs Moss
eto

 Mrs Leto (daughter) gets Mrs Moss to transfer the house into joint names

On condition that house not sold during Mrs Moss’s lifetime

 Mrs Leto grants a mortgage to AN by forging Mrs M’s signature

s14 application when there exists a Collateral Purpose
 Abbey National Plc v Moss (1994) 26 HLR 249

 1986: Mrs L and her mother quarrel

 Mrs M evicted
 Mrs L makes no repayments – tries to sell house
 Mrs M back in house – L family emigrate
 AN seek sale (application under s30)
 CA: A collateral purpose – to provide Mrs M with a home for life
Re Buchanan-Wollaston’s Conveyance [1939] Ch 738

 4 owners of land with sea views purchased (as joint tenants) the strip of land
separating all of their houses from the sea, such that their view of the sea would
remain unrestricted

 Each of the owners entered into a deed of covenant preventing 1 owner from selling
without the consent of the others

 Could 1 of the owners (1 of the 4 trustees) obtain a court order sell the land? NO

 The purpose of the trust (to provide an unrestricted sea view) would be undermined
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Jones v Challenger [1961] 1 QB 176

 1956:
Mr and Mrs C purchase 10-year lease of matrimonial
home
 1959:
Parties divorce – Mrs J (formerly C) sought sale

Sale ordered – collateral purpose had ended

Re Evers’ Trust [1980] 1 WLR 1327

 M & W purchase house to live in with their child and W’s 2 children from
an earlier marriage

 M leaves - wants sale of house

 Court refused to order sale until youngest child is 16 – purpose still

subsisting
Similar to a Harvey or Mesher order on divorce
TLATA 1996 section 15
Matters to which the court is to have regard
 s15(1)
(a) The intentions of the persons who created the trust;
(b) The purposes for which the property is held;
(c) The welfare of any minor who occupies or might reasonably be expected to occupy the land
as his home
(d) The interests of any secured creditor

 s15(3)
 Circumstances and wishes of beneficiaries of full age, having regard to the majority in terms
TLATA 1996 ss14 and 15

Has the law changed?

 No –
TSB Bank v Marshall [1998] 2 FLR 769

 Yes - “Treat the old authorities with caution”

Mortgage Corporation v. Shaire [2001] Ch 743 per Neuberger J

 Little change in practice

 Bank of Ireland v. Bell [2001] 2 FLR 809

Exercise of court’s discretion under s14 and 15

Sale will often be ordered to meet the needs of 3rd parties:

Begum v Issa Unreported Nov 5, 2014

 The needs of a creditor will often prevail:

Fred Perry (Holdings) Ltd v Genis [2015] 1 P& CR Chancery Div

 Sale ordered – there was a significant presumption in favour of sale at request of creditor
 Primacy should be given to commercial factors
 But is this what TLATA intended?

 Again seems to ignore equal priority which is supposed to be given to the criteria in section 15
Edwards v Edwards [2010] EWHC 652 (Ch)

 S14 application by Bank of Scotland for an order of sale of the matrimonial home

 Mr E is 77 yrs old and no evidence of ill-health

 No children to consider – grandchildren are now also over 18 yrs old
 Couple are estranged and Mr E is also pursuing Mrs E for damages due to fraud

 Mrs E had forged Mr E’s signature on a mortgage

 Bank have an equitable charge over Mrs E’s 50% share in the property – make s14 application for sale

 Order granted for possession and sale by the Bank

“the beneficiary of an equitable charge such as the bank is as much a beneficiary of the Trust referred
to in s.15 of TLATA as is the innocent co-owner, such as Mr Edwards”

 But Court delayed the order for possession and sale for four months to allow for a sale
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Begum v Issa Unreported Nov 5, 2014, High Court (Judge Behrens)

 Married couple with two children

 The family home was in joint names

 Mr Issa (the husband), acting alone, transferred the property by sale to his brother
(it seemed Ms Begum’s signature on the transfer was forged)

 The brother’s registered title was subject to Ms Begum’s overriding equitable interest

 Section 12 of the Trusts of Land and Appointment of Trustees Act 1996 meant that

both Ms Begum and the brother, as beneficiaries, had a right to occupation 19

Begum v Issa Unreported Nov 5, 2014, High Court (Judge Behrens)

 Sections 13(1) and 14 gave the court power to exclude one co-owner (here the brother) from occupation on terms
which may include the making of payments

Where the court makes such an order it must take into account the matters set out in section 15
 The judge had regard to the intention of Ms Begum to occupy the property and the welfare of the two children
(one of whom was disabled and who would find any move especially disruptive)

 On the other hand, it had to have regard to the brother’s intention to achieve a return on his investment in the
property
 The balance was struck by making an order for sale postponed for twelve months

 This delay would allow Ms Begum time to find another suitable home

 The brother was entitled to have Ms Begum make a contribution to the mortgage instalments paid by the
brother 20
Exercise of court’s discretion under s14 and 15

Begum v Hafiz [2015] EWCA Civ 801

 Mother and 2 sons owned house as TICs in equal shares

 Dispute arose and High Court granted right of pre-emption (first chance to buy)
to one of sons at price determined on valuation evidence provided to court; if option
not exercised in 6 weeks, property to be sold with liberty for all beneficial owners to
bid
 On appeal by other son, CA upheld HC order:
 Court had discretionary power under section 14 to make such an order – whilst “unusual”, judge
was entitled to act as she did
 But section 14 does not entitle the court to direct a sale of one beneficiary’s interest to another
Trusts of Land
 Insolvency
TLATA does not apply [s15(4)]
Insolvency Act 1986 s335A applies

Factors to be taken into account

 Interests of the creditors
 Conduct of the spouse or former spouse
 Needs and resources of the spouse
 Needs of any children
 All circumstances apart from the needs of the bankrupt
Trusts of Land: Bankruptcy

After one year

 “unless the circumstances of the case are exceptional, the interests of
the bankrupt’s creditors outweigh all other considerations.”

Exceptional cases
 Re Holliday [1981] Ch 485
 Declared himself bankrupt in order to defeat his wife’s divorce claim
 Postponement for 10 years
Exceptional Case

Re Bremner [1999] 1 FLR 912

 Mr B: stroke, hernia, high blood pressure, and cancer

 6 months to live

 Cannot take his circumstances into account……………………………

 Mrs B had to care for him – could take this into account

 Postponement until 3 months after Mr B’s death

Trusts of Land

How they come to an end:???

1. Partition of the land

2. Property comes into the hands of a single joint tenant
(survivorship) or tenant in common (purchase etc)
3. Sale of the property to a single third party
A reminder about the fragile nature of beneficial
interests

May be overreached

 If there are two or more trustees or a trust corporation

 Curtain Principle operates

LPA 1925 ss.2 and 27
 Learning Outcomes
 After completing this lecture you should be able to:
 Give a legal definition of co-ownership
 Explain the relationship between co-ownership and trusts of land
 Differentiate between co-ownership at law and in equity
 Determine the nature of co-ownership at law and in equity
 Apply the rules of survivorship to a joint tenancy at law or in equity
and determine the consequences of their application
 Apply the rules of severance to a joint tenancy in equity and
determine the consequences of their application

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