CO OWNERSHIP

Part 1

Samuel Sabastian Modified by S.K. Runglall

1
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

2
 Co-ownership: Creation

Express : Implied:
Property Conveyed to 2 or More By operation of Law
IE Legal Estate : H&W IE Legal Estate: H
Equitable Estate: H & W Equitable Estate : H & W

Co-ownership: Types

Joint Tenancy Tenancy in Common

THE ONLY LEGAL FORM OF OPERATES in EQUITY ONLY

CO-OWNERSHIP Tenants (Co-Owners) Own the whole
Tenants(Co-Owners) own the whole property subject to notional share at
Property v Notional Share Ownership severance
3
 Joint Tenancy
THE ONLY LEGAL FORM OF
CO-OWNERSHIP
NTK
CO Ownership??? PRE 1925=Legal estate = JT + TIC

4 Unities Used to be by trust for sale – now trust of land

Possession LPA 1925 s 34 (1) AMENDED ABOVE

Interest  TLATA 1996 s1: “any trust of property which consists

Time of or includes land.”

Title  Trustees hold legal title NTK

+ JUS ACRESCENDI  Ts name is on the deeds and entered at LR

=Right of survivorship
 Beneficiaries have the enjoyment
 Minors cannot hold a legal estate in the land:
s.1(6)LPA 1925 4
 Beneficial joint tenancy or beneficial tenancy in
common?
 A joint tenancy requires the 4 unities
 Possession – no physical division

 Interest – all JTs must have the same interest

 Time – all JT’s must acquire title at the same time

 Title – all JTs must have acquired their interest by the same
conveyance 5
 Co-ownership: Types

Joint Tenancy Tenancy in Common

Undivided but Notional separate

Right of Survivorship v shares

 Joint Tenancy = Joint Owners hold P on Trust for themselves & other Joint Tenants
(Statutory Trust)
 MAX 4
s 34(2) LPA 1925- Max of 4 tenants + Statutory Trust for others

 Legal estate of JT =CANNOT be severed

v Equitable Estate (under Goodman v Gallant)= JT become Holders of Equal Shares

6
Applied & Approved in Stack v Dowden
Trusts of Land
 Must look at the:

legal estate separately from

the beneficial interests

7
Legal Estate
 Maximum of 4 may hold
 if conveyed to more than 4 – first 4 named

 LPA 1925 s. 34(2); s. 34(2)TA 1925

 Must be joint tenancy

 Right of survivorship
 S. 1(6) LPA 1925: “A legal estate is not capable of

subsisting or being created in an undivided share in

land or of being held by an infant” (i.e. it is not
possible to sever the joint tenancy in the legal estate)
8
 Legal Estate
 Land conveyed to A,B,C,D,E and F

A B C D

Legal Owners: ABCD= Joint Tenants

9
 Legal Estate
 C dies: right of survivorship

A B D

Legal Owners: ABD= Joint Tenants

C`s Legal Title absorbed by ABD

10
Scenario Question for Quick Reflection
Legal Owners: ANZF= Joint Tenants
In 2007 five friends, Alf, Nero, Zia, Flo, and Hadiya who was about to celebrate her 18th birthday in 6 months, bought
a holiday cottage in Norfolk with the aim that they could all use it at various times of the year for short breaks and
holidays. They all contributed equal amounts and the transfer was to all of them “as joint tenants”. Title was
registered at The Land Registry.

In 2008 Flo moved abroad. She wrote to Alf, Nero, Zia and Hadiya and asked if they thought it would be a good idea
to sell the property and, if they thought it was, whether they could send her share of the money to her new address.
They heard nothing more from Flo until they were informed that she died in 2009. In 2010 Nero got married and not
long afterwards he sold his share to Zia.

In 2012 Hadiya needed to raise money for her business and she offered her share to Alf and Zia. Alf and Zia accepted
the offer but before they could pay Hadiya she died of a heart attack, leaving all her property to her brother.

In 2013 Alf mortgaged his share to Big Bank PLC. He has now fallen behind with the mortgage repayments and both
he and Big Bank PLC would like to sell the holiday cottage. Zia objects to the sale.

Answer BOTH parts (a) AND (b)

(a) Trace the devolution of the legal estate and equitable interests in the holiday cottage.
(b) Explain whether Alf and Big Bank PLC can insist on a sale of the holiday cottage. 11
 Beneficial Interests
 Beneficial joint tenancy
Legal Owners:
ABCD= Joint Tenants
A B C D
Beneficial Title=
ABCDEF

A B C D E F
12
 Beneficial Interests
 Beneficial joint tenancy: C dies
Legal Owners: ABD= Joint
Tenants
A B D
Equitable Title:
Depend on JT v TIC

EQUITABLE JT
JT – Right of survivorship

EQUITABLE TIC A B D E F
TIC- Notional share
Can be given…
13
 Doctrine of commorientes
NTK

 Where two or more joint tenants

Legal Owners: AB= Joint
Tenants die at the same time, and it is not
In equity= Joint Tenants possible to determine who died first
AB Dies I accident

If B is younger Order of seniority

A shares pass to B  Eldest presumed to die first

B`s heirs would receive  s.184 Law of Property Act 1925

14
 Tenancy in Common
EXISTS ONLY IN EQUITY v Legal JOINT TENANCY

 ONLY Unity of Possession

 No U.O. TIME
 No U.O. Title
 No U.O. Interest

 Notional share + NO Right of Survivorship

I.e. Tenants = Trustees = Own Whole Property until Division by sale

15
 Beneficial Interests
Legal Owners: ABCD=
 Tenancy in common:
Joint Tenants
(ie @ LAW)

EQUITABLE TIC
(ie In equity)
A B C D
ABCDEF= Undivided
shares (notional shares)

A B C D E F

16
Beneficial Interests
 Tenancy in common: C dies

A B D

A B X D E F
X takes beneficially under C’s will or by the
rules of intestacy 17
 Beneficial Interests
 Tenancy in common: C sells his share to X

A B C D

A B X D E F
acquires ET
only

C remains a trustee until he retires or dies -No impact on Legal Estate(JT) 18

 Creation of TIC in Equity
(A) Express Declaration
(A.1) Unregistered Land (A.1) Registered Land
(In Conveyance)
Transfer Form:
-”to be held in undivided shares) Option to hold on trust as JT or TIC
+ Extent of Equitable Int
Or Any Word Suggesting Division (CAN BE EQUAL OR UNEQUAL)

 Payne v Webb: “in Equal Shares” Or NEW DECLARATION form after Purchase
 Lewen v Dodd: “Equally”
 Heath v Heath: “share and share alike”
 Peat v Chapman: “to be divided
between“ 19
 Effect of Express Declaration of TIC
Goodman v Gallant
Express Declaration: CONCLUSIVE(except if set aside for fraud or undue influence)

applied : Pankhania v Chandegra (2012)

(NTK)
(A) Can be Varied by Subsequent agreement : Goodman v Gallant

Approved in: Stack v Dowden

(B) Can be affected by Proprietary Estoppel by later Representations

Clarke v Meadus (2010)

20
Goodman v Gallant [1986] Fam 106

 1978 Mrs Goodman & Mr

Gallant buy Mrs G’s former Held (CA):
matrimonial home  Cannot go behind express
‘upon trust for themselves as joint declaration of trust
tenants’  i.e. Mrs G entitled to 50% of
property value, not to an
 1983 separate enhanced share on basis of
contribution
 Mrs G claims she pays 75% Mr G
25%
 Position supported by Law 21
 Application to declare shares
 No Express Declaration
“Equity Follows the Law”

Scenario 1: At Death of a Joint Tenant

Right of Survivorship Applies

Scenario 2: At Severance of a Joint Tenant

Law: Joint Tenants own the whole Property Equally
Equity: Division Equally

NOTE: Above presumed Except when Unfair & Inappropriate & not intended by
the parties Then TIC despite all requirements of JT

Exception: Family Homes = Joint Tenants22

 Equity Presumes TIC despite all requirements of Joint Tenants of
Legal Estate
1. Unequal Contribution
At Law: Joint Tenant
In Equity: TIC
Bull v Bull
Lake v Gibson
2. Business (Commercial) Partners
At Law: Joint Tenant
In Equity: TIC
Re Fullers Contract
Lake v Craddock
3. Mortgagees
At Law: Joint tenant
In Equity: TIC
4. Other Circumstances
Malaysian Credit Ltd v Jack Chia MPH Ltd(1986) –(Next slide) 23
 When Equity Presumes TIC despite all requirements of Joint Tenants of
Legal Estate
4. Other Circumstances Malaysian Credit Ltd v Jack Chia MPH Ltd(1986)
Case: (NTK)
Joint Tenants of Leasehold Business Premises

At Law: Each Entitled to the Whole of the Property

If Equity Follows the Law at Severance: Equal Shares

BUT: (1) Joint tenants Occupied Separate and unequal areas

(2) Rent & Outgoings divided as per

At Severance Tenant Occupying Smaller Area Claimed order for sale of lease + equal share of proceeds

“such cases are not necessarily limited to purchasers who contribute unequally, to Co-Mortgagees and to Business
Partners. There are other circumstances in which Equity may infer that the beneficial interest is intended
to be held by the grantees as Tenants in Common. One such case is where the grantees hold premises for their
several (ie separate) individual business purposes” 24
Lord Brightman
Severance of beneficial joint tenancy
 Survivorship can be useful …
 unmarried couples
 … but often seen as unfair
 Possible to turn a JT into a TiC
 Not the legal estate
 LPA 1925 s 36(2)
25
Severance of beneficial joint tenancy
 Must sever inter vivos
 not by will: Gould v Kemp (1834) 2 My &

Kemp 304

 Severance must take place in equal shares

 Nielson-Jones v Fedden [1975] Ch. 222

 Problems for solicitors (Notice of severance not served)

 Carr-Glynn v. Frearsons [1998] 4 All ER

225 26
 Beneficial Interests
 C has severed his share –the others remain JTs

Legal Estate
(JT) A B C D

Beneficial
Interest A B D E F C

5/6th-JT 1/6th-TIC

27
Methods of Severance of beneficial joint tenancy

A. Williams v Hensman (1861) 1 John & H. 546

(the common law methods):

1. JT acting upon his own share

 Sale, lease, mortgage, contracting to sell
 Fraud - First National Securities Ltd v Hegerty [1985] QB 850
2. Mutual agreement
 Burgess v. Rawnsley [1975] Ch 429
3. Mutual conduct: Re Denny (1947)
28
 First National Securities Ltd v Hegarty
[1984] 3 WLR 769
1-JT acting on his own share –(+fraud)

 House in joint names of H and W

 H forged her signature on mortgage
application
 Held this severed the joint tenancy so
her share free of mortgage

29
1. Mutual Agreement

Burgess v Rawnsley [1975] Ch 429

 Mr Honick (a widower) and Mrs Rawnsley (a
widow) met at a scripture rally in Trafalgar
Square
 They became close friends and bought as joint
tenants the fee simple to the house of which Mr
Honick had hitherto been a tenant
 However, they later fell out

 It was orally agreed that Honick should buy out

Mrs Rawnsley’s interest for £750
 Before matters could finally be resolved, Honick
died

 HELD: The oral agreement (though not an

enforceable contract as no writing) had been
30
sufficient to sever the joint tenancy
Burgess: Oral declaration – sever?

L Denning minority view that severance can be effected by oral declaration

BUT

 Sir John Pennycuick:

‘Where one tenant negotiates with another for some rearrangement of interests, it
may be possible to infer for the particular facts of a common intention to sever,
even though the negotiations break down’
‘an un-communicated declaration by one party to the other or indeed a mere
verbal notice by one party to the other clearly cannot operate as severance’

31
Methods of Severance
4. Forfeiture - Unlawful Killing
 Re Crippen [1911] P 108
 Forfeiture Act 1982

5. Merger of interest

6. Operation of Law
 Bankruptcy
 Divorce (not simply a divorce petition though)
 Inheritance
 Unintended methods of severance of the beneficial joint
tenancy

 Forfeiture - Unlawful Killing

 Re Crippen [1911] P 108
 Forfeiture Act 1982 – the rules of forfeiture can be modified
in the interests of justice but rarely exercised, not even where
the ‘killer’ is convicted of voluntary manslaughter instead of
murder on the grounds of diminished responsibility: Chadwick v
Collinson [2014] EWHC 3055

 See also Henderson v Wilcox [2015] EWHC 3469 (Ch) where the
mentally ill perpetrator of the murder of an equitable joint tenant
could not benefit from her death; severance of the murderer’s
equitable joint tenancy automatically occurred (though this did not
preclude the killer from benefiting under a discretionary trust
should the trustees decide to exercise their discretion in his favour)
Severance by Written Notice

7. Severance by written notice

 LPA 1925 s36(2)

 Notice to all other JTs
 Must be intended to take immediate effect
 Re Draper’s Conveyance [1969] 1 Ch 486

 Harris v Goddard [1983] 1 WLR 1203

 Gore & Snell v Carpenter (1990) 60 P&CR 456

 Notice intended to take immediate effect

Re Drapers Conveyance
[1969] 1 Ch 486
 H & W buy pty as joint tenants  Severance effected by s17
application & affidavit
 W divorce: decree nisi
(court order stating date on which marriage will end unless good
reason not to grant divorce is produced)
 i.e. in lifetime of H

 S17 MWPA(Married Women`s Property Act)  H’s estate entitled to half share
application for order sale property as tenants in common

 Affidavit in support: W ask that ‘property

may be sold and that the proceeds may be
distributed equally’= TIC

 H stay in possession, died. 35

 Notice intended to take immediate effect

Harris v Goddard CA [1983]

1 WLR 1203
 Prayer in divorce petition: ‘that such order
may be made by way of transfer of
property/ settlement of property … in
respect of the former matrimonial home …
as may be just’

 H died following car accident

 Notice ‘must be desire to sever which is

intended to have the statutory
consequences’

 Not sufficient here – mere desire to do so

at some point in future

 Pty pass by survivorship to W

36
 Notice intended to take immediate effect

Gore Snell v Carpenter [1990] 60 P & CR

456
 H & W own 2 properties
 Held: written ‘proposal’
 Marriage breakdown
does not amount to a
 Negotiate over notice
ownership properties  i.e. not intended as
 Extended notice of severance,
correspondence merely part of
 Draft ‘notice’ produced negotiations
 H commit suicide
 Does survivorship
operate?
37
 MUST COMPLY with s196

Severance by Written Notice

 Must comply with s196

 LPA 1925 s196(1)

 In writing
 Either s196(3) or (4)(Next slide)
 No requirement for a signature
 e-mail???
Severance by Written Notice
 LPA 1925 s196(3)
 Notice must be “left at” the last known
place of abode etc.
 Physically left at
 Delivery by ordinary post will suffice
 No requirement that addressee has to
receive it
 Kinch v. Bullard [1999] 1 WLR 423
Kinch v. Bullard [1999] 1 WLR 423

 Mr and Mrs J – JTs of house - split up

 Mrs J has cancer

 4/8/95: Mrs J sol serves notice of severance on Mr J by first

class post
 5-6/8/95: Mr J has a severe heart attack – taken to hospital
 7/8/95: Postman delivers the letter
 Mrs J destroys it as no longer wants to sever
 15/8/95: Mr J dies
 6/1/96: Mrs J dies
 Kinch v. Bullard [1999] 1 WLR 423
 S196(3) LPA 1925 – notice is sufficiently served if it is ‘left at the last known
place of abode or business in the UK’ of the person to be served

 Held: Neuberger
 JT was severed
 On facts service good – even if addressee did not actually receive it
 No requirement for 196(3): recorded delivery alternative in s196(4)
 Cannot change mind once notice ‘given’ i.e. delivered to premises
 When the notice has not been received the addressee (but not the sender) can
claim severance
 Although may be possible to change mind and withdraw while still in post i.e.
before delivery, if communicate change of mind but this is ‘a tentative view’
LPA 1925 s196(4)

 Registered post
 Recorded or special delivery
 Provided that not returned as undelivered
 Re 88 Berkeley Road, London, NW9 [1971] Ch 648

 “service shall be deemed to be made at the time at which

the registered letter would in the ordinary course be
delivered”
 Noon next delivery day? Not when PO attempts to deliver

it
 WX Investments Ltd. v. Begg [2002] EWHC 925 (Ch)
Re 88 Berkley Rd
[1971] Ch 648
 E & G JTs at No 88
 G’s solicitor sent E recorded
delivery notice to sever
 E out, so G signed for receipt of
letter
 G died
 E said not seen letter
 Held: severed

43
Written Notice: e-mail
 When is notice by e-mail “left at” the
property for the purposes of s196(3)?
 When it is on the screen (in writing)?
 When it is printed out?
 Laptop but not at the last known address?
 Questions

1. A, B, C, D and E buy Sky View. Who owns the

legal title? If B dies, what will happen to the legal
title and why?
2. If A sells his beneficial share, what will happen to
his legal title?
3. How, if at all, will E become a legal owner?
4. If A, B, C, D and E own the equitable estate as
joint tenants, what will happen should any of
them die? Would the position be different if they
were beneficial tenants in common?
 Questions

5. When A, B, C, D and E buy Sky View,

what is the starting point in determining
how the beneficial estate is held?
6. If they are beneficial joint tenants at the
outset, do they always need to remain
so?
7. Which is the most reliable method of
severance?
Example exam question
In 2014 five friends, Alf, Nero, Zia, Flo, and Hadiya, bought a holiday cottage in Norfolk with the aim that
they could all use it at various times of the year for short breaks and holidays. They all contributed equal
amounts and the transfer was to all of them “as joint tenants”. Title was registered at The Land Registry.

In 2015 Flo moved abroad. She wrote to Alf, Nero, Zia and Hadiya and asked if they thought it would be a
good idea to sell the property and, if they thought it was, whether they could send her share of the money
to her new address. They heard nothing more from Flo until they were informed that she died in 2016. In
2017 Nero got married and not long afterwards he sold his share to Zia.

In 2019 Hadiya needed to raise money for her business and she offered her share to Alf and Zia. Alf and
Zia accepted the offer but before they could pay Hadiya she died of a heart attack, leaving all her property
to her brother.

In 2020 Alf mortgaged his share to Big Bank PLC. He has now fallen behind with the mortgage repayments
and both he and Big Bank PLC would like to sell the holiday cottage. Zia objects to the sale.

Answer BOTH parts (a) AND (b)

(a) Trace the devolution of the legal estate and equitable interests in the holiday cottage.
(b) Explain whether Alf and Big Bank PLC can insist on a sale of the holiday cottage. (next week)