Land - Trusts & Coownership (1)
The flow of the coming posts follows Dr Simon Coldham's Revision Course in Apr & May 2006 in Hong Kong. Thanks for his lecture, I finally start to understand what Land Law is about...
1. In 1998 Mr. Norton, who had three sons studying in London, decided to buy a flat for them to live in. He paid the whole of the purchase-price and the flat was registered in their names (Mark, Luke and John) as beneficial joint tenants. In 2000 Mark got married, moved out and sold his interest in the flat to John. In 2001 Luke wrote to John offering to sell him his interest in the flat. John accepted the offer in principle, but they had still not agreed on a price when Luke was killed in a climbing accident. Luke left his estate to Mark and John equally. Disputes have now arisen between Mr. Norton, Mark and John as to (i) who owns the flat, (ii) who is entitled to occupy the flat, and (iii) whether the flat should be sold.
* Separate legal estate and beneficial interests
Effect of 1998 conveyance?
- M, L and J hold legal estate on trust (trust of land) for themselves
- M, L and J are joint tenants (at law & in equity)
- Mr. Norton has no beneficial interest as it is a pure gift
2000 M sells to J
- There is severance: only occur in equity, the sold joint tenant part becomes tenant in common
- John: tenant in common 1/3 from M’s sale
joint tenant 1/3 original
- Luke: joint tenant 1/3 original
2001 L writes
- There is only agreement in principle, no agreement on price
- If there is no severance (because it doesn’t fall into any of the 4 methods)
- After L’s death, right of survivorship operates on L’s death (because of joint tenant), M & J hold the legal estate on trust for J as sole beneficial owner
- If there is severance (arguing that agreement in principle can be interpreted as mutual agreement)
- There is no sale of interest (L is dead before the conveyance)
- But mutual agreement can lead to severance
- If it is severed, L’s interest becomes Tenant in Common (1/3) and J’s interest becomes Tenant in Common as well (2/3)
- After L’s death, no right of survivorship but split equally between M & J
- M & J hold the legal estate for themselves as Tenants in Common: M getting 1/6 – half of L’s estate; J getting 5/6 – his own, M’s, and half of L’s estate
Court’s decision factors in occupation and order of sale
- TLATA s15(1)(a): Express trust
- TLATA s15(1)(b): implied coownership trust
- Purpose of Mr. Norton may no longer exist (bought a flat for 3 sons to live in during their studies) unless purpose is interpreted as the purchase of the flat is for any of the son who survives
- TLATA s15(3): beneficiaries’ wishes will be considered (majority may prevail)
- Court may encourage J to buyout M
- TLATA s12: Court may order J have the right to occupy
- TLATA s13(5), (6): Court may order J to pay pro-rata occupational rent and expense to M as compensation
- TLATA s14, 15: Court may order sale and split the proceeds according to percentage of share
1. In 1998 Mr. Norton, who had three sons studying in London, decided to buy a flat for them to live in. He paid the whole of the purchase-price and the flat was registered in their names (Mark, Luke and John) as beneficial joint tenants. In 2000 Mark got married, moved out and sold his interest in the flat to John. In 2001 Luke wrote to John offering to sell him his interest in the flat. John accepted the offer in principle, but they had still not agreed on a price when Luke was killed in a climbing accident. Luke left his estate to Mark and John equally. Disputes have now arisen between Mr. Norton, Mark and John as to (i) who owns the flat, (ii) who is entitled to occupy the flat, and (iii) whether the flat should be sold.
* Separate legal estate and beneficial interests
Effect of 1998 conveyance?
- M, L and J hold legal estate on trust (trust of land) for themselves
- M, L and J are joint tenants (at law & in equity)
- Mr. Norton has no beneficial interest as it is a pure gift
2000 M sells to J
- There is severance: only occur in equity, the sold joint tenant part becomes tenant in common
- John: tenant in common 1/3 from M’s sale
joint tenant 1/3 original
- Luke: joint tenant 1/3 original
2001 L writes
- There is only agreement in principle, no agreement on price
- If there is no severance (because it doesn’t fall into any of the 4 methods)
- After L’s death, right of survivorship operates on L’s death (because of joint tenant), M & J hold the legal estate on trust for J as sole beneficial owner
- If there is severance (arguing that agreement in principle can be interpreted as mutual agreement)
- There is no sale of interest (L is dead before the conveyance)
- But mutual agreement can lead to severance
- If it is severed, L’s interest becomes Tenant in Common (1/3) and J’s interest becomes Tenant in Common as well (2/3)
- After L’s death, no right of survivorship but split equally between M & J
- M & J hold the legal estate for themselves as Tenants in Common: M getting 1/6 – half of L’s estate; J getting 5/6 – his own, M’s, and half of L’s estate
Court’s decision factors in occupation and order of sale
- TLATA s15(1)(a): Express trust
- TLATA s15(1)(b): implied coownership trust
- Purpose of Mr. Norton may no longer exist (bought a flat for 3 sons to live in during their studies) unless purpose is interpreted as the purchase of the flat is for any of the son who survives
- TLATA s15(3): beneficiaries’ wishes will be considered (majority may prevail)
- Court may encourage J to buyout M
- TLATA s12: Court may order J have the right to occupy
- TLATA s13(5), (6): Court may order J to pay pro-rata occupational rent and expense to M as compensation
- TLATA s14, 15: Court may order sale and split the proceeds according to percentage of share
posted by pompom at 3:18 AM
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