In conclusion, Reggie would be able to claim the land if he can prove that in 1979, there was a ‘new’ adverse possession and the 12 years of limitation period had passed (1979-1993) for Amanda. As for the island, Reggie would have title to it as although Phil may still have island and land on the shore under his name in the Land Registry, he could not bring an action to recover the property as the twelve years from the date (1965 - 1993) on which the right of action is over. Therefore, the island would have been adverse to Reggie, and so is the land on the shore.
Q.2
To determine how the proceeds of sale of the property should be divided, it is essential to look at the law on co-ownership in particular, joint tenancy and tenancy in common.
From the information given, we are told that Arnie, Bruiser, Carmen and Dominique all contributed equally to the purchase price and the house is transferred into their joint names. This shows that it is a joint tenancy as the four unities are present, which are the unity of possession, unity of interest, unity of time and lastly, unity of title. Also, there were no sign or words that amounted to severance such as ‘equally’, ‘in equal shares’, ‘amongst’ ‘divided’, and ‘participated’. Thus, the right of survivorship jus accrescendi would operate in this joint tenancy. So, initially, Arnie, Bruiser, Carmen and Dominique are holding the property jointly for the benefit of four of them and it is important to note that the maximum number of trustees is four. For a joint tenancy to exist in equity there must be all four unities and no words of severance. If lack of one of any four unities or there is any words of severance, the court will treat the co-ownership as tenancy in common in equity.
Secondly, in case where one of the above parties decides not to continue the survivorship, this can be done through severance. There are three ways in which the joint tenancy may be severed and they are; an act which is operating upon his own share, by mutual agreement and any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common. Severance can be done by written notice. So, in the case where Bruiser decided to take out a mortgage on the property behind the other’s backs is considered as acting upon his own share and furthermore, a mortgage affects a severance. Thus, this has ‘destroyed’ the unities of title. Therefore, it would be that Arnie, Carmen and Dominique together would hold three fourth of the legal estate as joint tenants while Bruiser will hold one fourth share as a tenant in common. Another minor point is that forges another constituted fraudulent and Bruiser would have committed a criminal offence.
When Arnie agrees in writing to sell his beneficial interest in the property to Dominique and the agreement is duly executed, this severs Arnie’s share by shattering the unity of title. Therefore, this amounted to a severance where there was a mutual agreement between Arnie and Dominique. Hence, the legal estate will remain as before, but Dominique will now hold his equitable interest in two capacities. He will hold the one fourth share which he bought from Arnie as a tenant in common, and, together with Carmen, he will hold the remaining two fourth share as a joint tenant while Bruiser will also hold one fourth of the share as tenancy in common and Arnie has none.
Meanwhile, Carmen had asked Dominique if she will buy her share in the house and through the information given, we are being told that their negotiation got ‘heated’. So, assuming that there was a course of dealing between them, this would then constitute to ‘..a course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common” between Carmen and Dominique which in result amounted to severance. This would then make Dominique himself having three fourth of the share altogether while Bruiser having one fourth of the share as tenancy in common. However, on the other hand, if there was no severance, in regards to Carmen’s share, of which she is still a joint tenant, her interest would disappear and go by right of survivorship upon her death and Dominique alone is the only survivor left. Unlike tenancy in common, in joint tenancy, the joint tenant cannot leave his or her share by will or allow it to pass on intestacy. Thus, Manuela will not be able to get Carmen’s share in the legal estate.
Lastly, the bankruptcy of a joint tenant will sever the equitable joint tenancy. Thus, when Dominique is declared bankrupt and her trustee in bankruptcy becomes entitled to all her property, which simply means that whilst Dominique has got three fourth of the share in the house, his equitable interest are vested upon his trustee who have “all the powers of an absolute owner” but only “for the purpose of exercising their power of trustees”. This is because bankruptcy vest Dominique’s property in the trustee in bankruptcy and this clearly affects a severance.
To sum up, Dominique will wholly own the legal estate while his equitable interests in the legal estate will be vested upon his trustee in bankruptcy and Bruiser has one fourth of the share as tenancy in common. Both Manuela and Arnie will own nothing.
Q. 3
To answer this question, it is important to distinguish between a lease and a licence. A lease is an interest in land and a licence is merely a personal permission to do something that would otherwise be a trespass. A lease offers security of tenure for an agreed term upon agreed conditions by giving rise to statutory protection for the tenant while a licence will not which makes it less secure.
The essentials of a lease are that it is for a term certain granted in consideration of a periodic payment and exclusive possession which is necessary but not sufficient. The relationship of Andrew, Boris and Carmen with each other can determine if they are tenants or licensees. From the information given, we are told that they are friends and went along together to see Lilian, this shows they intent to live together. Although to seek to insist upon the right to introduce new occupiers into the property may create a licence, the provision in the agreements to share the shared room with Lilian or whoever she may licence to occupy the rooms left in the flat seemed to be unrealistic because the box room was unbelievably cluttered and small, plus, the flat was in fact a three bedrooms flat. Thus, the three friends jointly share exclusive possession of the flat, even under the terms of separate, but contemporaneous ‘licence agreement’, it is likely that their unity of possession will give rise to joint tenancy under a lease. This is because they have demonstrated the ‘four unities’ of possession, interest, title and time which are necessarily present in a joint tenancy. Their ‘licence agreements’ were interdependent and must be read together. With all the requirements of a tenancy satisfied, the written agreements Lilian asked the three to sign which stated that it was a licence need not necessarily be a licence, but a lease. This can be supported with the fact that the three friends were able to sort out between themselves which bedrooms they will occupy. This had contradicted term (a) in their ‘licence agreements’. Also, in this case, the three friends’ and Lilian’s relationship did not fall within the ‘Facchini categories’ but was of landlord and tenant and not that of licensor and licensee.
If Lilian had decided to take the refresher course in aromatherapy, it may have been a licence and they will not have exclusive possession of the flat. In results, no tenancy can exist if the tenant does not have the right of exclusive possession. Exclusive possession gives the tenant a right to keep out strangers including the landlord, but because Lilian would be in and out the house throughout the week, they would not be able to keep her out. Lilian’s retention of key and the reservation of right to enter the premises at any time would constitute a licence. However, we are told that Lilian’s knowledge of aromatherapy remained unrefreshed and did not move in, thus, this means that the three would be able to enjoy exclusive possession of the whole flat except the box room.
Therefore, Andrew, Boris and Carmen have a joint tenancy of the whole flat excluding the box room.
Q.4
A legal mortgage is a convey of an interest in land or other property to secure the repayment of a debt. Where the legal mortgage is of land, it must be by deed. An equitable mortgage is one which passes only an equitable estate or interest.
Mortgagees can enforce their rights which is the ability to recover their money should the mortgagor default on the mortgage through suing the mortgagor’s covenant to repay, the right to possession, the power of sale, the right to appoint a receiver and the right to foreclosure. These rights are available to both legal and equitable mortgagees.
A mortgage is approved to secure a loan. A mortgagee can sue the mortgagor on his personal covenant for repayment of loan and interest. Usually, the mortgagee does not do this, it being preferable to utilize his more favourable position as a secured creditor. If the mortgagee has secured a sale of the property and the proceeds of sale are inadequate to discharge the debt, the mortgagee can pursue a personal remedy against the mortgagor in respect of the balance. The availability of a personal action against the mortgagor is also useful to the mortgagee is where he is unable to pursue his rights as a secured creditor because a third party has rights in the property with priority to his.
The most common way in which a mortgagee will impose his security is an action for possession, by making a sale of the property. Taking possession by the mortgagee is a right and not a remedy. The mortgagee will only be entitled as of right to possession of the mortgaged property if there was default. The court has the discretional power to defer the proceedings or on making an order for possession, suspend execution of the order or postpone the date for delivery of possession. If there had been no default, the payment scheduled must be such as will meet the normal repayments and such additional sum as is necessary to clear the arrears within a reasonable period. The Administration of Justice Act 1970 will apply to all mortgages generally used to finance the purchase of a home.
The power of sale and the power to appoint a receiver are two principle statutory remedies; both apply by section 101 of the Law of Property Act 1925 to every mortgagee whose mortgage is by deed. So, every legal mortgagee has these powers, and an equitable mortgagee enjoys them if his mortgage is by deed.
The power of sale occurs the moment the contractual date for redemption has passed. However, it does not become applicable until one of the three events occurs where default in payment has been made for three months after service of notice of repayment, where some interest under the mortgage is in debts for two months after becoming due and when there has been a breach of some other provision in the mortgage other than the payment and interest. Even if the power of sale has not become exercisable, the purchaser will have good title, but the mortgagee will then be liable in damages to the mortgagor. Although a mortgagee is not a trustee of his statutory power of sale, he must act in good faith and take reasonable care to get a fair and reasonable price in all the conditions. This shows a duty arising in equity consequently of the relationship of mortgagor and mortgagee. A mortgagee, whose mortgage is not by deed, does not have the statutory power of sale, but the court may order a sale through application.
Once the contractual date for redemption has passed, a mortgagee, whose mortgage is by deed, has the statutory power to appoint a receiver of the income of the mortgaged property. This power is not to be implemented until the power of sale has become exercisable. A receiver is considered to be the agent of the mortgagor, thus, is solely responsible for the receiver’s act or defaults, unless the mortgage otherwise provides. Therefore, a mortgagee, who wishes to gain profit from land, will generally appoint a receiver rather than take possession of the land himself because if he allocates a receiver, he avoids liability on the basis of wilful default. After paying various expenditures and his own commission, the receiver must apply any money received by him in payment of the interest due under the mortgage, in writing, if directed by the mortgagee, towards the discharge of the principal money. A mortgagee whose mortgage is not by deed may apply to the court for the appointment of a receiver.
Foreclosure is a court procedure whereby the mortgagor’s estate is vested in the mortgagee as soon as the contractual date for redemption has passed. It involves the foreclosure nisi and the foreclosure absolute. The former requires the mortgagor to repay the money borrowed, and so transfer the mortgage, within a set period,(normally six months). Failure to do so will lead to the foreclosure being made absolute. The court has power to order sale instead of foreclosure and will generally do so unless it appears that the value of the property is equal to the mortgage debt. By the equitable remedy of foreclosure equity takes away from the mortgagor the very interest which it has created, the equity of redemption. Therefore, foreclosure is the mortgagee’s counterblast to the mortgagor’s equity of redemption. This remedy is available only on application to the court. This is a harsh remedy and is rarely used nowadays.
In conclusion, a mortgagee’s interest can be protected through enforcing their right to sue the mortgagor’s covenant to repay, right to possession, right to sale as well as appoint a receiver and foreclosure.
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Section 15(1) Limitation Act 1980
Powell v. McFarlene (1979) 38 P&CR 452
Section 17 Limitation Act 1980
Schedule 1, Para 1 Limitation Act 1980
Schedule 1, Para 8 Limitation Act 1980
Powell v. McFarlene (1979) 38 P&CR 452
Schedule 1, Para 8(1) Limitation Act 1980
Wilson v. Martin Executors (1993) 24 EG 119
Classic Statement by Bramwell LJ in Leigh v. Jack (1987) SE & D 264 62
Seddon v. Smith (1877) 36 LT 168
Animus possidendi means the intention to (adversely) possess the land of another.
The Mayor and Burgesses of London Borough of Hounslow v. Minchinton (1997) 74 P&CR 221
Buckinghamshire County Council v. Moran [1990] Ch 623; principle applied in Lodge v. Wakefield City Council [1995] 2 EGLR 124
BP Properties Ltd. v. Bucklet (1987) 55 P&CR 337
Cf Bath and North East Somerset DG v. Nicholson [2002] 10 EG 156(CS)
Colchester Borough Council v. Smith and Others [1991] 1 All ER 29
Skipton Building Society v. Clayton (1993) 25 HLR 596
Section 70(1)(g) Land Registration Act 1925
Strand Securities Ltd. v. Casewell [1965] Ch 958
Securities v. Vaughan [1988] 3 WLR 1025
Bull v. Bull [1955] 1 QB 234
Lewen v Cox (1599) Cro Eliz 695 (78 ER 931); Right d Compton v. Compton (1808) 9 East 267 (103 ER 575)
Brown v. Oakshot (1857) 24 Beav 254 (53 ER 355); Re Davies [1950] 1 All ER 120
Campbell v. Campbell (1792) 4 Bro CC 15 (29 ER 755); Richardson v. Richardson (1845) 14 Sim 526 (60 ER 462)
Peat v. Champman (1750) 1 Ves Sen 542 (27 ER 1193)
Robertson v. Fraser (1871) LR 6 Ch App 696
Section 34 (2) Law of Property Act 1925
Sir William Page Wood V-C in Williams v. Hensman (1861) a J & H 546 (70 ER 862)
Cray v. Willis (1729) 2 P Wms 529 (24 ER 847)
Section 36(2) Law of Property Act 1925
York v. Stone (1709) 1 Salk 158 (91 ER 146); Cedar Holdings Ltd. V. Green [1981] CH129 ; First National Securities Ltd. v. Hergerty [1985] QB 850 at pp 854, 862
Wright v. Gibbons (1949) 78 CLR 313
Sir William Page Wood V-C in Williams v. Hensman (1861) I J&H 546 (70 ER 862)
Section 6(1) Trust of Land and Appointment of Trustees Act 1996
Re Rushton [1972] Ch 197 at p 203
Prudential Assurance Co. Ltd v. London Residuary Body [1992] 2 A.C 386
Somma v. Hazelhurst [1978] 1 W.L.R 1014
Antoniades v. Villiers [1990] 1 A.C 417
Street v. Mountford [1985] A.C 809
Addiscombe Garden Estates Ltd v. Crabbe [1958] QBD 514
Radaich v. Smith (1959) 101 CLR 209 HC of A
Duke v. Waynne [1990] 1 W.L.R 766 reported with Aslan v. Murphy [1990] 1 W.L.R 766
Obsorn’s Concise Law Dictionary, Ninth Edition. Sweet & Maxwell, p.256
Section 2, Law of Property Act 1925
Rudge v. Richards (1873) L.R. 8 C.P. 358 and Palk v. Mortgage Services Funding Plc [1993] Ch. 330 at 337 per Sir Donald Nicholls V.-C.
Williams and Glyn’s Bank Ltd v. Boland [1981] A.C. 487
Four Maids Ltd. V. Dudley Marshall (Properties) Ltd. [1957] Ch.317 at 320, M.Haley (1997) 17 L.S. 483
Section 36 of the Administration of Justice Act 1970 and Royal Trust Co Canada v. Markham [1975] 1 WLR 1416 CA
Section 8(2) of the Administration of Justice Act 1970.
Payne v. Cardiff R.D.C [1932] 1 K.B. 241
Section 103 of Law of Property Act 1925
Section 104 of Law of Property Act 1925
Kennedy v. De Trafford [1897] A.C 180 and Cuckmere Brick Co. Ltd. v. Mutual Finance Ltd [1971] Ch. 949
Palk v. Mortgage Services Funding Plc
Downsview Nominees Ltd. v. First City Corporation Ltd [1993] A.C 295
Section 91 of Law of Property Act 1925
SS 101(1)(iii) and 109(1) of the Law of Property Act 1925
Refuge Assurance Co Ltd. v. Pearlberg [1938] Ch 687 CA
Section 109 of Law of Property Act 1925
Section 37 of Supreme Court Act 1981 and Meaden v. Sealey (1849) 6 Hare 620
Twentieth Century Banking Corporation Ltd. v. Wilkinson [1977] Ch. 99
Section 91 of Law of Property Act 1925
SS 88(2), 89(2) of Law of Property Act; Section 34(3) of Land Registration Act 1925
Palk v. Mortgage Services Funding Plc [1993] Ch. 330 at 337 per Sir Donald Nicholls V.-C.
