Question 3 Zone A&B 2009

Co-ownership(problem)
The first issue at hand is to determine how the 4 of them are holding the property. What
this means is determining whether they are Joint Tenants or Tenants in Common. These
are the only 2 methods of holding the property that exists. In a co-ownership situation,
there will be the legal ownership and the equitable ownership.

The legal ownership or legal title refers to the owners who are reflected on the
title of the property. On the facts we are told that the land was conveyed in the
names Andrew, Belinda, Cindy and Davina. As such all 4 of them will be the
legal owners
S.1(6) LPA25 states that a tenancy in common cannot exist at law all 4 of them
will be joint tenants at law.
Provided the 4 unities are present, there is a presumption that equity follows the
law. This will mean that the equitable ownership will also be held as joint
tenants between the four of them.
However this presumption can be displaced by a counter presumption arising
from specific facts which result in the existence of a Joint tenancy causing
hardship.
OTF - none of these factors exist. Further we are told that the title was conveyed
to all 4 of them. If this was an express conveyance to them as joint tenants (we are
not told) then the express intentions of the parties will be upheld and they will be
beneficial joint tenant Goodman v Gallant.
If there was no indication how they were to hold the property when it was
conveyed to them, then the original presumption of equity follows the law will
stand and they will be beneficial joint tenants as well.

2007 Andrew decided to emigrate to Australia sold his interest in Seaview to Edna

The issue here is whether Andrews actions have resulted in severance of the joint
tenancy and if so what is the effect of this severance.
There are 4 methods of severance 1 statutory method(s.36(2)LPA25) and 3
common law methods (Williams v Hensmann; Page Wood VC)
On the facts the relevant discussion would be the first method in Williams v
Hensman An act operationg on his own share. What this means is that the
equitable co-owner seeks to deal with his share of the land so manifesting an
intention no longer to be part of the joint tenancy. The very act of dealing with the
share severs the joint tenancy. OTF Andrew sold his share to Edna. This will
result in severance provided the sale is a valid and enforceable one.
This results in Edna owning Andrews as TIC and Belinda, Cindy and Davina
owning the remaining as JTs

Belinda wrote to Cindy and Davina to tell them that she was urgently looking for
someone to buy her share

Once again the issue is whether this has severed the joint tenancy that is in
existence. The statutory method of severance found in s.36(2) LPA25 states that
the equitable joint tenant may give notice in writing to the other joint tenant about
his intention to sever the joint tenancy. OTF we see that Belinda wrote to Cindy
and Davina.
However, Harris v Goodard states that the notice in writing must contain a clear
and unequivocal intention to sever. On the facts, it would seem that this is not
present as Belinda merely wrote to say that she was urgently looking for someone
to buy her share. As such there will not be severance as per s.36(2) LPA25
We must next consider the possibility of severance occurring by one of the other
common law methods. There will be no mutual agreement or mutual conduct as
well as there was no agreement reached at all. Then we are told that Belinda had
changed her mind anyway.

2008 Cindy ran into financial difficulty and offered to sell her interest to Davina.

This could be severance by way of mutual agreement one of the methods in

Williams v Hensman. Mutual agreement is where the joint tenants have agreed
to terminate the joint tenancy. This agreement need to be in any specific form nor
must it be legally enforceable.
OTF issue: is there an agreement on the facts between Cindy & Davina. It is
argued that they had come to an agreement in principle that Davina would buy
Cindys share. They were only concerned with the terms of the sale (price etc).
This is because the question states that they were only deciding on the terms when
Cindy died.
A mere agreement in principle will result in severance according to Lord Denning
in Burgess v Rawnsley. There is no need for a full and final agreement. However
in the case of Gore, Snell v Carpenter, the courts held that only a full and final
agreement wherein the parties no longer reserve the right to rescind will suffice
for severance to take effect under this limb.
There seems to be two very different opinions on the matter. Although the
decision in Burgess is somewhat criticized as being to lenient it is still good law
on its facts and the courts may decide according to it.
If the courts decide to follow Burgess v Rawnsley the agreement between Cindy
and Davina will amount to severance. As a result of the severance the beneficial
ownership of the property will stand at
o Edna - - TIC
o Cindy - TIC
o Belinda and Davina - - JT

When Cindy died and left her estate to her brother Frank her share will pass to
him
o Edna - TIC
o Frank - TIC
o Belinda and Davina - JT

We are now told that Belinda now wants Seaview to be sold but Davina does not
want to sell. Whenever there is a co-ownership situation a automatic trust is
imposed on the property with the legal owners holding the property on trust for
the equitable owners. As such if there is a dispute between the parties then there
the dispute will be governed by the Trust of Land and Appointment of Trustees
act 1996 (TOLATA96)
S.14 TOLATA provides that any person, trustee or beneficiary may apply for an
order concerning the property including for an order for sale. In deciding such an
application, the court must have regard to the factors as laid down in s.15
TOLATA.
OTF Davina prefers to stay in the property. However this os a weekend cottage.
Meaning that they all have their own homes. In such a situation there seems to be
no pressing factor (eg children, Business purposes etc) for the courts not to order
sale. The court will usually order sale and the proceeds of sale will be divided
according to the shares they own. Belinda is so advised.
The proceeds of sale will be divided as such
o Edna
o Frank
o Belinda and Davina should receive each unless there are exceptional
circumstances where the courts may give one party more that 50% of the
JT. Baroness Hale Paragraph 69 of Stack v Dowden, However this will
only be in exceptional circumstances. OTF unlikely.

If the courts do not follow Burgess v Rawnsley and decide according to Gore.
Snell v Carpenter, then there will be no severance between Cindy and Davina.
Upon Cindys death, the principle of jus accresendi will apply and Frank will not
inherit any portion of Seaview via Cindys will. The beneficial ownership will
stand as follows
o Edna - TIC
o Belinda and Davina - JT.

The discussion as to the dispute will be the same as above and the division of
proceeds of sale will vary accordingly.

Prepared by
Daniel Abishegam