Assessed Research Exercise in Law of Property - Case Study Example

Assessed Research Exercise in Law of Property ASSESSED RESEARCH EXERCISE IN LAW OF PROPERTY Titus Rock Manickam Order No. 289961 21 April 2009 Table of Contents Introduction.3 What are the current legal and beneficial interests in the house.3 Could Joe and Tina enforce sale of the house.5 Separate piece of research...6 Explain precisely in relation to A(i) and A(ii)8 Conclusion..10 Bibliography...11 ASSESSED RESEARCH EXERCISE IN LAW OF PROPERTY Introduction In 1995, Ann, Brenda and Claire, all in their early twenties, decide to pool their resources to buy a house together in order to get on the 'property ladder'. The freehold of a house was bought and registered in the joint names of the three of them. But there was no declaration of the beneficial interests that they were to hold. The purchase price was provided as to 5% by Ann, 7% by Claire and 9% by Brenda. The remaining 79% was provided by a mortgage loan. They moved in and contributed equally to household expenses and the mortgage instalments. In 2000, Brenda was killed in a car accident and all her property passed to her parents, Joe and Tina. Ann and Claire remained in the house and continued to make the mortgage payments between them. The nature of their relationship changed. In 2005 they became registered civil partners. In 2007, following the death of Ann's sister, Ann's niece, Nora, now aged 8, came to live with them. They have now heard that Joe and Tina want the house to be sold. I am a trainee in the firm of solicitors consulted by Ann and Claire. My principal has asked me to research the relevant law and report to the principal on the legal principles and relevant case and statue law as to: a) What are the current legal and beneficial interests in the house, and b) On the basis that Joe and Tina have an interest in the house, whether they could enforce a sale of the house. What are the current legal and beneficial interests in the house After Brenda's untimely death in 2000, the current legal and beneficial interests in the house are Ann and Claire. Brenda's parents, Joe and Tina, now have her properties but there is no mention about the house. Do Joe and Tina have any claim on the house Joe and Tina do not pay Brenda's share of the mortgage instalments although they have reportedly expressed the view that they want the house sold obviously to recover Brenda's share in the property. The roots of the problem lies in the absence of organized thinking on the part of Ann, Claire and Brenda on the action to be followed in case they are left in a position where either one of them or all of them are unable to pay the mortgage instalments. This is just one part of the problem. The bigger problem is the lack of planning about their respective rights in the property. The women have a close relationship based on love and understanding and have given little thought to the possibility of separation or the legal consequence of one of them dying or the claims of creditors on the shared home. In order to deal with the inadequacies of the current law, there is the attempt to devise a scheme which would operate to identify and quantify the parties' beneficial interests in circumstances where no express arrangements have been made. This scheme is based on an objective assessment of the economic value of the contributions made by each party sharing the home. The contributions which would qualify are to be widely defined. The court would then be able to define and declare the parties' interests by reference to the contributions made. The scheme is not intended to give the court the discretion to adjust or to re-allocate property rights. Notwithstanding the current law's position, as joint tenants, Ann, Claire and Brenda have equal share in the house. With the death of Brenda, the survivors, Ann and Claire, take over the property (Joint Tenancy). On the basis that Joe and Tina have an interest in the house, whether they could enforce a sale of the house Besides Brenda's parents' interest in the property, there is also another member, Nora, Ann's niece, who has come to stay with Ann and Claire following the death of Ann's sister in 2007. Thus, Nora too becomes a potential legal and beneficial interest in the house. Coming back to Ann and Claire, the position of Joe and Tina assume importance owing to their reported wish to have the house sold. In the event they pursue the issue in court, Ann and Claire may have something to worry about as Brenda had lived with them five years between 1995 when the house was purchased and 2000 when she died in the accident. Also, Brenda's share of 9% of the initial amount makes her the highest contributor of the three women's own funds. From 2000 onwards, after Brenda's death, Ann and Claire have continued to pay the mortgage instalments equally between them. In the eyes of the law, Joe and Tina may not have any part in the property. However, the court can pass charging orders which will pose to be a liability for Ann and Claire (Charging Orders). The court's opinion as regards Joe and Tina's position is important. This is because of the absence of any express will from Brenda as to what and who must receive her share in case of any contingency. Nonetheless, the law only recognizes the survivors as joint owners of the house property in the event of the death of one of the partners. Hence, it may not be possible for Joe and Tina to enforce sale of the house property (Joint Tenancy). Separate piece of research, unconnected to the above facts, on the cases in the last twelve years that have concerned severance of a joint tenancy The properties of a joint-estate are derived from its unity, which is fourfold; the unity of interest, the unity of title, the unity of time, and the unity of possession. In other words, joint-tenants have one and the same interest accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession. It is on these principles that many other consequences and incidents to the joint-tenant's estate depend. Joint tenancy is at this day so far from being favored, that the courts think themselves justified in exercising their ingenuity against it. In most instances it operates contrary to the opinion and intent of the parties. Even in deeds, therefore, the inconvenience of joint tenancy has induced the courts to seize on any expression which indicates an intention to give a separate interest to each. Galbraith vs. Galbraith, 3 S. & R. 392. Bambaugh vs. Bambaugh, 11 S. & R. 191. Independently of the words creating the estate, there certainly are cases in which equity will consider joint tenants as tenants in common; and one of these cases is where a purchase of land is made by two persons with a view of expending large sums in the improvement of it. Duncan vs. Forrer, 6 Binn. 193. An important decision which emphasizes the significance of an express declaration of beneficial entitlement and the limited effect of severance is Goodman v Gallant. In 1978, Mrs. Goodman and Mr. Gallant who were living together purchased a property which happened to be Mrs. Goodman's former matrimonial home. In the conveyance, they declared that they held the property 'upon trust for themselves as joint tenants'. In 1983 the couple separated. Mrs. Goodman served a written notice of severance on Mr. Gallant. This was followed by an application to court seeking a declaration as to their respective interests. Mrs. Goodman claimed that as she had paid three-quarters of the purchase price of the property, she should now be entitled to three-quarters of the beneficial interest in the house. The Court of Appeal held that Mrs. Goodman could not go beyond the express declaration of trust. On severance of the beneficial joint tenancy, the parties would thereafter hold as beneficial tenants in common two equal shares. Mrs. Goodman was bound by the terms of the trust to which she was a party. She could not claim an enhanced beneficial interest on the basis of her financial contribution to the purchase of the land having been greater than Mr. Gallant's. Let me quote an example. A and B are joint registered proprietors of the freehold interest in a shared home. C, their daughter, aged 30, lives with them. She has a beneficial interest in the home (a one-tenth share) by virtue of constructive trust. If A and B sell their legal estate to D for 200,000, C's beneficial interest will be "overreached". She can no longer occupy the house. She can, however, claim her share in the proceeds of sale, amounting to 20,000 from A and B. In Midland Bank plc v Dobson, a house was purchased in the husband's sole name. The court found no common intention that the property be shared beneficially between them, and no financial contributions attributable to the wife could be established. She therefore had no interest in the property, and the mortgagee seeking enforcement of sale of the property was entitled to obtain possession (Law Commission) So long as individuals do not wish to enter into the commitment of marriage, there will be problem for those determining future legislative policy. Marriage is a status which is easily identifiable and therefore facilitates legislative control of its consequences. The same cannot be said for informal living arrangements such as 'cohabitants' or 'common law' spouses. There is no common law marriage known to English law. Further definitional difficulties are caused where a same sex couple live together. Fitzpatrick v Sterling Housing Association [2001] 1 AC 27 (Law Commission). Explain precisely, in relation to A (i) and A (ii), what was your research strategy and how you carried out the research, explaining the database searches that you made My work began with the case of Ann, Claire and Brenda. I took up the matter from the time Brenda met with an accident and died. The legal implications of joint tenancy picks up the issue from the time Brenda dies. The property now passes into the hands of Ann and Claire. There is no mention if they have the property registered as joint tenants in their names now. However, as long as they have good relations with each other, they do have to worry over what happens to the property. They subsequently strengthen their bonds by registering as civil partners in 2005. Now Brenda's parents, Joe and Tina, cause concern by expressing feelings that they want to have the house sold. At this point, I made some online research and discovered the sites: Commentaries on the Laws of England in Four Books (Sir William Blackstone) and Trusts of land and third parties (Paul Todd). I found that Joe and Tina's chances of enforcing a sale of the house were remote. Having convinced myself that the matter was going on well, I then turned my attention to question A (ii). I found it somewhat difficult to close in on cases pertaining to severance of joint tenancy. Nevertheless, I painstakingly continued to make my research and got the required number of these cases. I found that the law was quite user-friendly so long as the people concerned kept themselves updated and met the requirements of the law. It was only in the event the people concerned did not act in a timely manner that the provisions of law posed problems. For instance, upon the death of Brenda, it is not mentioned if Ann and Claire had the property registered as joint tenants in their names, although it is mentioned that they were equal partners in paying the mortgage instalments. Nonetheless, as long as their relationship was strong they did not have to worry. It was only if things turned sour and they wanted to grab a greater share in the property that the question of some problems arose. In fact, the issue of Ann's 8-year old niece, Nora, coming to stay with Ann and Claire on Ann's sister's death, does not appear to pose any problem with Claire although the issue of beneficial interest for Nora with the property must be present. Then there is the issue of doing a separate piece of research, unconnected to the above facts, on the cases in the last twelve years that have concerned severance of a joint tenancy. This part was harder to accomplish as I could not find detailed cases. Nevertheless, I continued to rummage through the sites and found the required number of cases. There is the problem concerning persons who are not related but who live together for mutual support or caring. They may or may not be related, but their financial affairs become somewhat inextricably intertwined. It is difficult to define this group but the difficulty does not detract from the reality of the problem. Hence, it is prudent to leave the matter the way it is. Conclusion The harmonious coming together of Ann, Claire and Brenda and purchasing a property under joint names gets somewhat jarred with the untimely death of Brenda. There is also the issue of Brenda's parents, Joe and Tina, adding an element of suspense with their idea of trying to get the house sold. It is difficult to predict how the court will interpret this event. It depends on what they are able to get from what Brenda has left. However, the property appears to be safe in the hands of Ann and Claire. The second part of research unconnected to the above facts, on the cases in the last twelve years that have concerned severance of a joint tenancy, was difficult. However, this too was handled by me. Bibliography: Charging Order, http://www.hmcourts-service.gov.uk/infoabout/enforcement/charging/index.htm Enforcement of judgments - England and Wales, http://ec.europa.eu/civiljustice/enforce_judgement/enforce_judgement_eng_en.htm Joint Tenancy, Law Essays UK, http://www.law-essays-uk.com/essaysamples/landlawessay/tenancy.php Law Commission, Sharing Homes, 2002, http://www.lawcom.gov.uk/docs/sharing_homes.pdf Paul Todd, Trusts of land and third parties, http://www.landlaw.org.uk/ Robin Pearson and Sarah Allen, Occupational rights - protecting the lender, 22.10.2007, http://www.wragge.com/published_articles_2845.asp Sir William Blackstone, Commentaries on the Laws of England in Four Books, Vol. 1[1753], The Online Library of Liberty, http://oll.libertyfund.org/option=com_staticxt&staticfile=show.php%3Ftitle=2140&chapter=198712&layout=html&Itemid=27 Read More