Land Law, Supervision Five
Jesus College, part 1B cal1966, please do not redistribute this work. We work very hard to create this website, and we trust our visitors to respect it for the good of other students. Please, do not circulate this work elsewhere on the internet. Anybody found doing so will be permanently banned.
1a) The first thing to do is to establish what, if any, sort of trust was created upon the purchase of the property. As there is no evidence of an express trust, if one exists then it must be implied. The Law of Property Act 1925, s. 53 (2) gives effect and enforceability to implied trusts (whether resulting or constructive) even if they are not evidence in writing. As they both contributed monies to the purchase price, in the absence of any contrary evidence, equity assumes that they both intended to gain some beneficial interest in the property. This means that a trust must exist with the both of them as trustees (as the house was conveyed to them in their joint names) and both of them as beneficiaries (as they both contributed to the purchase price).
The question then arises over whether the trust existing is resulting or constructive. Under the ruling in Dyer v Dyer (1788), where purchasers contribute money in unequal proportions there is the presumption of a resulting trust. Although this proposition is rebuttable, M would have to show that A and B intended something different. B would have little trouble, in the absence of other evidence, to rebut this assertion by M.
The constructive trust is aimed at the prevention of unconscionable behaviour on the part of the one of them trustees. As there was no claim or suggestion of any untoward behaviour on the part of either A or B then this would further add to the theory that the trust is a resulting one.coba bar sebabaw orba bak inba foba ba:
Where the purchase money is paid in unequal proportions, equity assumes "bargains and not gifts", and that the contributors are tenants in common. Furthermore, in the case of Cowcher v Cowcher (1972) per Bagnall J, a resulting trust was presumed to arise, in the proportions to which the contributions were made. Under these authorities on the facts of this case a resulting trust would be inferred in the favour of both A and b as tenants in common, with both A and B as legal joint tenants (there can be no legal tenancy in common under the LPA 1925, s 1(6).
But does it matter that B borrowed the money he contributed to the purchase price from his father? Equity still treats borrowed money as a contribution which raises a presumption of a resulting trust in favour of the contributor rather than the lender. If this were not the case, banks and building societies would have a beneficial interest in millions of homes throughout Britain - this is both undesirable and impractical so equity applies this rule to avoid the problem. However, under the authority of Gissing v Gissing (1971), if M could show that A had helped B in his repayments to his father than the contributions may serve to increase A's overall beneficial entitlement. B would need to be able to rebut this assertion. Under the facts presented however, we still have the situation where A and B are equitable tenants in common, with their shares being proportionate to the purchase money they advanced (namely, A has a 5/8 interest and B a 3/8 interest).
The next question arises over what happens to A's share when he dies. Under a tenancy in common there is no right of survivorship; this means that A's 5/8 share passes according to the terms of his will. Therefore, assuming that his will is legitimate, his share passes to M. cal1966, please do not redistribute this hypothesis. We work very hard to create this website, and we trust our visitors to respect it for the good of other students. Please, do not circulate this hypothesis elsewhere on the internet. Anybody found doing so will be permanently banned.
As no severance is possible of a joint tenancy in a legal estate under the LPA 1925, s 36(2), legal title also passes to M. This means that the legal title is held by B and M as a joint tenancy for the benefit of B as to a 3/8 share and M as to a 5/8 share.
But is M allowed to claim an occupation rent for B being in sole possession of the house? As tenants in common B and M hold undivided shares - while they hold a proportion of the beneficial interest in the land they have no right to a physically demarcated piece. This means that neither B nor M could point to a certain area of the property as theirs and charge a rent for the occupancy of it. Equally neither could deny the other access to the house. If B wishes to remain in sole occupancy then he may be wise to come to some formal arrangement with M to keep her from realising her right in the land (a lease of M's share perhaps).
1b) Again, although there is no signed written evidence (LPA 1925, s. 53 (1)(b), thus ruling out an express trust), the fact that both A and B contributed to the purchase money of their house means that some form of trust is created. This is because equity assumes, in the absence of any contrary evidence, that people do not behave altruistically and expect some sort of return for their investment. Having ruled out an express trust under s. 53(1)(b) we turn to implied trusts: where the legal title is held in the name of both the contributing parties then a resulting trust is presumed to exist. (Had legal title been conveyed to A or B alone then a constructive trust may have arisen under the authorities of Grant v Edwards (1986) and Gissing v Gissing, per Lord Diplock (1971).)coad adr seadadw orad adk inad foad ad.
Having established a resulting trust in favour of A and B we now need to decide whether A and B are equitable joint tenants or equitable tenants in common. Where the parties have contributed money in equal shares towards the purchase price, under the authority in Wilson v Wilson (1969) there is the presumption that an equitable joint tenancy was intended to be created. Although this rule has been criticised for being too arbitrary, it still stands and remains good law.
Thus A and B are legal and equitable joint tenants (legal tenancy in common can not occur under the LPA 1925, s. 1(6)).coba bar sebabaw orba bak inba foba ba:
So what happens when A dies? In joint tenancy the whole interest in the land is vested in all of the joint tenants at the same time. Although they have separate rights enforceable against each other, against everyone else they are in the position of one single owner. As they have no individual share in the land it is impossible, under the authority of Gould v Kemp (1834), to leave an equitable joint tenancy interest in a will. Under the same authority it is also impossible to sever such an interest by will. This is because the interest disappears at the moment of death and "passes" at that moment to the other equitable joint tenants; a will only arises at the moment after death, after the beneficial interest has been lost.
In this case therefore A's equitable right cannot pass to M in his will as it has already been lost under the right of survivorship to B. B thus owns the whole equitable interest. But what happens to A's legal interest? Under the LPA, s. 36(2), no severance of a joint tenancy of a legal estate is permissible. As there thus can be no legal tenancy in common (confirmed in the LPA 1925, s. 1(6)) the right of survivorship must also apply at law, meaning that B now has the whole legal title - M has no title because A had no legal or equitable title to leave in his will. Thus B has the whole legal and equitable title, creating unity of administration and beneficial enjoyment. It also means that he holds the fee simple absolute in possession and M has no claim to the title. Thus M has no grounds for claiming an occupancy rent and B can resist such a claim. cal1966, please do not redistribute this work. We work very hard to create this website, and we trust our visitors to respect it for the good of other students. Please, do not circulate this work elsewhere on the internet. Anybody found doing so will be permanently banned.
However, if my assumption of the right of survivorship applying at law is invalid and the A's legal title does pass to M under his will, B and M would be legal joint tenants (there can be no legal tenancy in common - see above). However, as the sole beneficiary under such a trust (a bare trust), B would be able to direct the trustees to do anything he wished, under the authority in Saunders v Vautier (1841). Thus B could even compel M to convey the legal title to him alone. In either of these scenarios, B could become the sole legal and equitable owner of the property.
1c) A and B have expressly transferred the property to them both as joint tenants in law and equity. This express agreement serves to rebut the assumption under the maxim of "equity assumes bargains and not gifts" that the contributors take title a) as tenants in common and b) with shares proportionate to the purchase money advanced by each.
The question arises whether their hazy recollection of land law is accurate enough to mean that the conveyance was valid. As was seen in the case of Hussey v Palmer (1972) the courts are able to go behind the express words of the parties if they need to. For a joint tenancy to be valid there must exist the four unities - possession, interest, title and time. As the conveyance occurred and transferred title into both A and B's joint names the unities of title and time are satisfied; as long as there was no physical dividing of the land, the unity of possession is also present; the unity of interest is met by the fact that A and B hold the same interest in the extent, nature and duration of the interest. Thus A and B meet the characteristics of an equitable joint tenancy and we have already established (see above) that there can only be legal joint tenancy.
So the legal title is held jointly for them both, and no notice is paid to the monetary shares that the pair contributed. As seen above, when A dies, there exists the right of survivorship, meaning that the whole property interest (both legal and equitable) will be vested in B, as A merely drops out of the picture. There can be no severance by will (under the authority of Gould v Kemp (1834)) so the part of A's will purporting to leave the property interest to M is invalid, as there is no interest to leave. This also means that M has no right to charge B and occupancy right; you cannot charge a rent for something you have no legal title to.
1d) The answer to the last part of the question would differ according to which of the pair was the older. Under the LPA 1925, s.184, where it is uncertain which of the parties survived the other, the younger is deemed to have outlived the older. Thus the younger party (in this case) takes a complete share of the property both at law and in equity (see why M cannot inherit in q. 1b, above) at the moment of the elder's death. Upon his death (the younger's) the property (provided there are no further joint tenants - in this case there are not) then passes to his estate, to be divided according to his will or under the rules of probate.
Thus if A was older than B he would be deemed to have died first under s. 184. As there can be no severance by will (Gould v Kemp), A's will leaving his share to M is irrelevant as his interest would have already disappeared through the right of survivorship. Thus when B died it would be in his estate that the property would be disposed of.
Alternatively, if B was older than A his beneficial interest would disappear at the moment of death under the right of survivorship and s.184. Thus A would own the entire beneficial interest and it could then pass to M under the terms of his will.
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