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Law Notes Property B Notes

Co Ownership And Priority Problem Notes

Updated Co Ownership And Priority Problem Notes

Property B Notes

Property B

Approximately 56 pages

These exam notes were used to achieve a High Distinction in Property B at Monash University, and include problem question notes and a separate document including content and suggestions for policy question answers. The notes cover all course content as of the exam year and include clear and easily usable exam problem structures.

The notes are easily navigated as include clear and comprehensive lists of contents and page numbers.

The author of these notes has never scored less than a High Di...

The following is a more accessible plain text extract of the PDF sample above, taken from our Property B Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Co-ownership

  • A joint tenancy (JT):undivided shares, right of survivorship

  • A tenancy in common (TIC): same interest shared in distinct shares

Introduction

There is an issue of co-ownership. Here, [eg Y wants to prove joint tenants/X wants to prove TiCs and reason why they want to prove]. The position at both law and at equity must be considered to decide the rights of the parties.

Position at law

Position at law

At common law there is a presumption for joint tenancies, which is applied by the Torrens system legislation.

Torrens system

The Transfer of Land Act 1958 (Vic):

  • S 30(2) provides that if two or more persons are registered as joint proprietors, they are deemed to be entitled as joint tenants (JTs). This deeming provision may be rebutted by evidence a JT was not intended.

  • S 33(4) has the effect that if a document granting a mortgage (or any other interest in land including leases, transfers) is lodged for registration they are deemed to be entitled as JTs unless the document states otherwise. This deeming provision may be rebutted by evidence that a JT was not intended.

Registration as JTs conclusively determines the nature of their interests as far as third parties are concerned. However, even under legislation, the parties can establish they hold as TICs between themselves: Calverley

To decide if the presumption of a JT is rebutted, common law must also be considered. [Remember that adverse possessors may not be registered so only CL rules will apply]

Common law

The common law presumes a JT as long as the four unities are present and the document establishing the co-ownership contains no words of severance.

Four unities

  1. The unity of possession means that each co-owner is entitled (along with the other co-owners) to possession of the whole property.

    1. One party is not permitted to exclude the other or sue another for trespass

    2. However destruction of the property or exclusion may mean remedies arise

  2. The unity of interest requires that the interest of each tenant must be the same in nature, extent and duration.

    1. Eg both must have life estates, fee simple, lease for the same period of time

  3. The unity of title requires that all the tenants have derived their interests from the same document/instrument or same act.

    1. Document: lease/contract/registrable transfer etc

    2. Act: eg adverse possession

  4. To show unity of time, the interests of all the tenants must vest at the same point in time.

    1. Exceptions: a JT may arise even where the unity of time does not exist where:

    • the interest is conveyed to a trustee for beneficiaries [the concept of trust still means there is unity of time]

    • any disposition in a will.

Words of severance

If the instrument that creates the co-ownership uses words of severance (words indicating an intention to hold in distinct shares), the parties will be TICs rather than JTs.

  • Examples: ‘among’, ‘between A and B’, ‘to A and B respectively’, ‘to A and B to share and share alike’, ‘in equal shares’, ‘amongst’ or ‘respectively’.

If there are contradicting expressions used (eg ‘share and share alike as JTs’), a rule of construction provides that:

  • the first words will prevail in a deed

  • the last words will prevail in a will

Conclusion: position at law and consequences

[Note if JT/TIC; whether right of survivorship and note effects will be considered at end of analysis]

To decide overall whether a JT or TIC applies, the position in equity must be considered, since it will prevail.

Position in equity

Position at equity

Is there a presumption of a TIC?

Equity will normally follow law, but there are certain situations where equity will presume a TIC.

  • Per Malayan Credit, the accepted situations may not be an exhaustive list.

To show a TIC, the unity of possession is required. As above, this unity is/is not present.

  1. Where 2 or more persons make unequal contributions to the purchase price of land

In such case, parties are presumed in equity to hold as TICs in proportion to their contributions (Robinson v Preston; Bull v Bull).

  • ‘Contributions’ will include assuming joint liability under a mortgage: Calverley

  • The presumption of a TiC does not arise where a conveyance to the parties expressly declares their beneficial interests in the property (Goodman v Gallant)

  • This is subject to the presumption of advancement (see ‘resulting trusts’ for relevant relationships). However, a presumption of advancement can be rebutted by evidence of actual intention to the contrary at the time of the transfer or purchase. [Note evidence]

  1. Where 2 or more persons advance money as mortgagees (equally or not)

In such case, equity will presume a TIC despite the position at law (Re Jackson). This is because mortgagees usually lend money as an investment and it is unlikely that co-owners would expect to forgo their money if they died before it was repaid.

  • A mortgagor who deals in good faith with a mortgagee is entitled to assume that one mortgagee can give a valid receipt for the money: PLA s 112-113. If one of two or more mortgagees gets the money of another mortgagee, he or she holds it on trust for the other mortgagee or (after death) their personal representative.

  1. Where 2 or more persons as partners acquire property for a business venture

In such case equity will presume a TIC despite the position in law (Lake v Craddock). This is because it is unfair to permit the principle of survivorship to operate in an undertaking designed to produce a profit, since the partner who died first would lose all his investment

  1. Where 2 or more persons hold land for their separate business purposes

In such case equity will presume a TIC despite the position at law (Malayan Credit).

  • This will be more clearly the case where the grantees divide up the premises into distinct parts and pay shares of rent and connected costs proportionately (Malayan Credit).

  1. Courts may find other...

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