Trusts Of Land, Joint Tenancy, Tenancy In Common

(a) Can Freda sell Large Farm to Rupert in spite of Josie's opposition and, if so, what procedure should she follow?

There are two forms of co-ownership: a Joint Tenancy which can exist at law or in equity; and a Tenancy in Common which can exist in equity only. This means that the legal estate in property is always held on a joint tenancy 1, but the equitable estate can be either a joint tenancy or a tenancy in common. The effect of a joint tenancy is that all the co-owners are treated as a single collective owner, and when one joint tenant dies their interest automatically passes to the other joint tenants by survivorship. This means that a joint tenant's interest in property can not pass under a will. A tenant in common's interest in the equitable estate however, can pass under a will.

The fact that in his will, Noel, gave the farm to Bertrand (B), Clarence (C), Diana (D), Eric (E) and Freda (F) jointly satisfies all of the criteria for a joint tenancy in equity. Although there is no limit to the number of joint tenants of the equitable estate, the legal estate may be held by a maximum of 4 joint tenants. This however, will not be a problem here, as C was only 16. This means that he was regarded in law as a child2 and therefore can not hold a legal estate in land .3

So, the initial position when Noel dies was that the legal estate was held jointly by B, D, E and F, and the equitable estate was held jointly by all 5 of them. When E assigned his interest in the property to Zoe this served as a severance of the joint tenancy by alienation. This remained severed even when the interest was re-assigned to E. The position at this point was that B, D, E and F were still joint tenants of the legal estate, but E was a tenant in common of one fifth of the equitable estate, and B, C, D and F were joint tenants of the remaining four fifths.

When D sold her share to F this again served to sever D's equitable interest by alienation. The result of this was that B, E and F held the legal estate jointly, E and F each held one fifth as tenants in common and B, C and F held the remaining 3 fifths as joint tenants.

The result of the deaths of B, C and E was that E's one fifth interest in the equitable estate passed to Josie under his will as he held this as a tenant in common. However, as B and C were joint tenants, their equitable interest can not pass by will or intestacy and instead pass automatically to F as the sole surviving joint tenant. The entire legal estate also passes to F by virtue of the joint tenancy. So, now F holds the legal estate and four fifths of the equitable estate, and Josie holds the remaining one fifth. This means that F is holding the farm on a trust of land for herself and Josie, so she must take Josie's interest into account before she can dispose of the property to Rupert.

As a trustee F has a duty to act in the best interests of the beneficiaries of the trust i.e. herself and Josie. However, were there is a conflict between the wishes of the beneficiaries a trustee should act in accordance with the wishes of the majority in value 4. Here this would be herself, so she is able to give effect to her own wish to sell the farm to Rupert.

Josie's beneficial interest in the farm is a minor interest. A minor interest can be overreached in a sale by two or more trustees to a bone fide purchaser of the legal estate for value. In order to do this F would need to appoint another trustee before the sale to Rupert. However, when a minor interest in land is coupled with actual occupation, as it is here, that interest becomes overriding 5. The result of this is that the interest can not be overreached and any buyer will take subject to it. This could cause serious problems for Rupert and he would be unlikely to buy the farm without written confirmation from Josie that she would vacate the farm on completion of the sale. Josie's interest would then be in the proceeds of sale rather than the farm.

F should therefore try to convince Josie to agree to the sale, or should try to find another buyer who will be willingly to buy the farm subject to Josie's overriding interest.

(b) (1) To what extent will the sale be affected by the rights of Annabel and Tom?

A trust of land is any trust of property which consists of or includes land 6. A trust of land can be express, implied, resulting or constructive. In order to create an express trust of land, a declaration of the trust must be proved in writing 7. It would seem that Noel did not comply with these requirements and so there is no express trust of land. However, in situations were a trust is not completely constituted, for example, were the settler has not effectively declared himself trustee of the property the courts will compel the completion and execution of the trust if it was created for valuable consideration 8. Marriage can constitute valuable consideration for this purpose. By this method it may be possible for Annabel and Tom to claim that they have a beneficial right to the part of the farm which they occupy.

Even if it had not been Noel's intention to create a trust in favour of Annabel and Tom it may be possible for them to claim that there is a constructive trust. This would be on the basis that it would inequitable now to allow F to assert full beneficial rights over the part of the farm in dispute. This could be shown through the principle of the doctrine of proprietary estoppel. This occurs when one party believes that they have an interest in the land, due to an act or omission by another other party, and so that first party spends money on the land or otherwise acts to their detriment. Here Annabel and Tom believed that they had an interest in the land due to Noel purporting to give them the land, and they have spent money on building a house on the land. F will therefore be estopped from denying the existence of such a trust.

If Annabel and Tom can show that one of these trusts exists, which I strongly believe that they will, they have the right as sui juris beneficiaries to have the trust ended and the trust property transferred to them. They will be able to enforce this right either against F or against Rupert if he purchases the farm. F will need to renegotiate the sale of the farm to Rupert excluding the land to which Annabel and Tom are entitled.

(2) To what extent will the sale be affected by the rights of Bill?

There are two types of adverse possession: the discontinuance of the paper owner and the ouster of the previous owner 9. 'Possession' for the purpose of adverse possession means more than mere occupation. It means having control and management of the land and acting as the owner. The person claiming to have adverse possession otherwise known as the 'squatter' must also have 'animus possidendi' which means an intention to possess. This intention to possess has been interpreted as factual possession coupled with an intention to exclude all others .10

Here it would seem that Bill has adverse possession of Long Meadow by ouster of previous owner, given that he has been using the land the graze his animals, has built buildings on it, and it would also seem that he has animus possidendi given that he is using the land and has removed the access to the farm. If he has had adverse possession for 12 years or more then F will be unable to bring any action against him for recovery of the land 11, as the original title to Long Meadow will have been extinguished .12

F should find out exactly when in 1991 Bill took possession of Long Meadow and started using it as his own, to see if the 12 year limitation period has expired. If it has not expired then she will be able to bring an action against Bill to regain possession of the land. Whether or not the 12 year limitation period has expired Bill's interest in the land will be an overriding interest 13and Rupert will take subject to it if he buys the farm. Again, Rupert will be unlikely to agree to this so F should try to regain possession of Ling Meadow if the limitation period has not expired, or renegotiate a new price for the sale of the farm which doesn't include Long Meadow if it has expired.

  1. Law of Property Act 1925 s1(6)[^ Return]
  2. Family Law Reform Act 1969 s1(1)[^ Return]
  3. Law of Property Act 1925 s1(6)[^ Return]
  4. Trusts of Land and Appointment of Trustees Act 1996 s11(1)[^ Return]
  5. Land Registration Act 1925 s70(1)(g)[^ Return]
  6. Trusts of Land and Appointment of Trustees Act 1996 s1(1)[^ Return]
  7. Law of Property Act 1925 s53(1)(b)[^ Return]
  8. Donaldson v Donaldson (1854) Kay 711[^ Return]
  9. Treloar v Nute (1976) 1 WLR[^ Return]
  10. Buckinghamshire CC v Moran (1990) Ch 623[^ Return]
  11. Limitation Act 1980 s15(1)[^ Return]
  12. Limitation Act 1980 s(17)[^ Return]
  13. Land Registration Act s70(f)[^ Return]

Bibliography

Books
Gray's Elements of Land Law (2nd Edition)
MacKenzie & Phillips: Textbook on Land Law (9th Edition)
Megarry & Wade: The Law of Real Property (6th Edition)
Megarry's Manual of the Law of Real Property (7th Edition)

Legislation
Family Law Reform Act 1969
Land Registration Act 1925
Law of Property Act 1925
Limitation Act 1980
Trusts of Land and Appointment of Trustees Act 1996

Cases
Buckinghamshire CC v Moran (1990) Ch 623
Donaldson v Donaldson (1854) Kay 711
Treloar v Nute (1976) 1 WLR

Websites
Butterworth's Lexis Nexis Direct online
Halsbury's Laws Direct online
Westlaw UK online

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