CHAPTER 9

ENGLISH LAND LAW

CO -OWNERSHIP

Semple Piggot Rochez • 173B Cowley Road • Oxford OX4 1UT

www.spr-law.com
CONTENTS
Introduction ............................................................................ 1

Types of co-ownership ............................................................ 1

Joint tenancy ........................................................................... 2

Tenancy in common ................................................................ 4

Tenancy by entireties and coparcenary .................................... 8

Severance of joint tenancy ....................................................... 8

Creation of co-ownership ...................................................... 12

Termination of co-ownership ................................................. 15

 Chapter 9

Land Law

CO-OWNERSHIP
R EADING PATH:
Gray & Gray: Chapter 8.

1. INTRODUCTION
This is always a popular area for examination. Students will
see that Gray & Gray link co-ownership directly for trusts for
reasons which will become obvious. Remember that the
device of the strict settlement, which created successive
estates in land, was traditionally used as a way of holding
property. The strict settlement was the result of the social
aspirations of an earlier era in which individuals wanted to
ensure that family property was retained within the family
without giving any particular member unfettered powers of
disposal.

Since the Trusts of Land and Appointment of Trustees Act

1996, new strict settlements under the Settled Land Act
cannot be created.

Changing social conditions have resulted in the strict

settlement commonly being replaced by co-ownership,
whereby two or more individuals own the property at the
same time. In the contemporary context of sexual equality,
the working wife’s contribution to the mortgage scenario and
the modern emphasis on equality of living arrangements,
successive property holding is no longer appropriate. As
Gray & Gray suggest, concurrent ownership of land has
become the new expression of the change in social
conditions.

2. TYPES OF CO -OWNERSHIP
There are four different types of co-ownership, namely:

씰 joint tenancy

씰 tenancy in common

씰 tenancy in entireties

씰 coparcenary.

Before looking at these in detail please note that, since 1925, a

legal estate can only be held by way of joint tenancy. Section
1(6) of the Law of Property Act 1925, provides that there can
be no tenancy in common at law. However, in equity, both
modes are still possible. Therefore, if persons wish to hold
land by way of a tenancy in common, they can simply

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arrange to hold the legal estate jointly and upon trust for
themselves as tenants in common (or in undivided shares).

Conveyancing convenience was the reason for the change in

1925. Conveyancing is much simpler if there is no possibility
of legal estates being conveyed in undivided shares. The
purchaser needs only to deal with those names that appear
on the title.

3. JOINT TENANCY
The whole basis of joint tenancy is that each joint tenant is
entitled to the whole of the property. They do not have
shares in land because together they make up the owner of
the estate which is regarded as one single estate. It can be
disposed of only as a single entity by the joint tenants acting
together in relation to it – i.e. they are regarded in law as being
one composite person. As Gray puts it, each of the joint
tenants ‘holds everything and yet holds nothing’.

One of the very important elements of joint tenancy is the fact

that none of the joint tenants owns shares in the property. If
the joint owners do own shares in the property, they will not
be regarded as holding as joint tenants but as tenants in
common, albeit only in equity. An example is where property
is said to be held by the parties in equal shares. This will be
sufficient to indicate that the property is held on a tenancy in
common. It follows therefore that one joint tenant cannot
dispose of any interest in the land by will as he has nothing to
dispose of.

CHARACTERISTICS OF A JOINT
TENANCY
R IGHT OF SURVIVORSHIP
One of the distinguishing characteristics of joint tenancy is the
operation of the right of survivorship or ius accrescendi.
Simply put, this means that where there is a joint tenancy, and
one of the joint tenants dies, the surviving joint tenant
becomes the sole owner of the property. The deceased joint
tenant’s personal representative or heirs cannot make a claim.
For example, suppose that A, B and C are joint tenants, then
when A dies, B and C will be left entitled as joint tenants; and
when B dies, C will be solely entitled. In the end all property
held in joint tenancy will resolve itself into land held in sole
tenancy if it is not disposed of before that.

An illustration of the application of the doctrine of

survivorship can be seen in the case of RE DENNIS [1995] 3 All
ER 171 . Here, a husband and wife owned two properties as
beneficial joint tenants. In September 1982, the husband
committed an act of bankruptcy and a bankruptcy petition
was presented in December. In February 1983, the wife died
leaving her property to her two children. In May 1983, a
receiving order was made, and in November 1983 the
husband was adjudicated bankrupt. The bankrupt’s trustee in

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bankruptcy sought the court’s determination as to whether

the beneficial joint tenancy had been severed before the wife’s
death.

On appeal, it was held that the title of the trustee in

bankruptcy related back to the date when the act of
bankruptcy occurred even though the bankrupt was only
adjudicated a bankrupt at a much later date. Thus, the act of
bankruptcy in September 1982 caused a severance of the
joint tenancy and therefore the wife’s share passed under her
will on her death and was not available to the creditors.

Advantages of the right of survivorship

The survivorship principle has a number of advantages:

씰 It makes conveyancing simple

If P wishes to purchase property, and the legal estate has

been conveyed to A, B and C, P does not have to trace
the devolution of the individual shares of A and of B and
of C; all he need do is look for disposals by A, B and C
jointly or else for the death of A, if it is only B and C
who are claiming to be entitled to convey the legal estate
to P.

씰 It is convenient for trustees

On the death of a trustee, it is not necessary to recover

the share of that trustee from his personal
representatives and then vest it in the surviving trustees
or in the surviving trustees with a new trustee. The legal
estate automatically vests in the surviving trustees.

씰 Indestructibility of survivorship

Survivorship takes precedence over any testamentary

disposition made by the deceased joint tenant.

씰 An estate planning device

In the case of a married couple, the property will

automatically vest in the survivor upon the death of the
other. Consequently, it is a simple and cost-effective
estate planning device.

씰 Protection of the property from unsecured creditors

Upon the death of a joint tenant, the property

automatically vests in the remaining joint tenants. A
consequence of this is that, if the deceased joint tenant
had creditors, the creditors have no claim on the
property. This has been criticised.

THE FOUR UNITIES

In order for there to be a joint tenancy, the four unities must
be present. These are the unities of:

씰 possession

씰 interest

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씰 time

and

씰 title.

씰 Unity of possession

Joint tenants are only such if they are entitled to

possession of the same parcel of land. If they are not so
entitled then there is no co-ownership, and they can only
be neighbours. If only one person is entitled to
possession of an area of land that is several ownership,
not co-ownership.
씰 Unity of interest
Because joint tenants hold one estate, it follows that they
must all be entitled to the same interest, for example, in
fee simple, or for a term of 90 years, or for their joint
lives, or the life of one of them. The co-owners cannot
dispose of their interest by themselves as individuals
because they do not own the whole estate: THAMES
GUARANTY LTD v CAMPBELL [1984] 2 All ER 585.

씰 Unity of time
The interests of joint tenants must all vest at the same
time.
씰 Unity of title
Joint tenants must derive their interests from the same
legal act – i.e. all must claim under the same conveyance
to them.

4. TENANCY IN COMMON
The distinction between joint tenancy and tenancy in common
is that in the case of a tenancy in common, the co-owners
hold the land in ‘undivided shares’. The important difference
is the presence of the word shares, as it is only in the case of
a tenancy in common that there are any distinct shares at all.

In the case of a tenancy in common, the right of survivorship

does not apply. On the death of one co-owner, his share
(which is already fixed in terms of its quantum) will pass to his
next of kin either under the intestacy rules or in accordance
with his will.

The only unity that must exist in the case of a tenancy in

common is the unity of possession. There is co-ownership
only if both owners have rights entitling them both to
possession of the whole parcel of land concurrently.

As the owners in the case of a tenancy in common have

separate property rights, there is no need for unity of title,
time or interest. The co-owners can also have unequal shares
in the property.

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Think Point 1
If you own property together with your spouse, friend
or co-habitee, take a look at the document of title and
consider the circumstances of your case and the type
of co-ownership you possess. Do you think that it is
suitable for you?

LIABILITIES AS BETWEEN TENANTS

IN COMMON
OCCUPATION AND USE
Before 1925, tenants in common were entitled to the
possession as well as to the use and enjoyment of the whole
of the land. This right has survived the changes of 1925: the
imposition of the trust of land of the legal estate has not
affected the right of a person to possession if he is entitled to
an undivided share behind the trust.

It is now clear that no action will lie against a co-owner merely

because he has exclusive occupation of one part rather than
another, provided that he does not occupy more than his
‘just share and proportion’. In JACOBS v SEWARD (1872) LR 5
HL 464, the court held that there was no claim in trespass
where one tenant in common had cut grass from a part of the
property. But if one co-owner excludes or ousts another from
the property then an action in trespass is available: BULL v
BULL. Alternatively, the injured co-owner could rely on a claim
in nuisance, or on a claim of voluntary waste where the action
of the co-owner in possession is such as to damage or
devalue the property.

R ENTS FROM A STRANGER

Where a tenant in common is not in occupation, he may be
entitled to a share of the rents and profits derived from a
stranger in proportion to his share in the property (see
HENDERSON v EASON (1851) 17 QB 710).

PROFIT DERIVED FROM THE LAND

In HENDERSON v EASON , Parke B decided that, where a tenant
in common makes a profit by his own efforts in cultivating the
land, he need not account to the others for it. The reasoning
appears to be that, since he would not be liable to account in
the case of a loss, he should not be liable to account if he
makes a profit.

However the decision in HENDERSON implies that there could still

be some cases where there could be a liability to account to the
other tenants in common – for example, where the profit made

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devalues the land because the profit was derived from mining
the land.

R ENT OBLIGATIONS BETWEEN TENANTS

A co-owner is not obliged to pay rent to his fellow owners if,
in fact, he is in occupation and they are not: JONES v JONES
[1977] 2 All ER 231.

However, this general rule applies only where the non-

occupying co-owner has voluntarily chosen not to occupy
the property. This may be because he has alternative
accommodation. In DENNIS v McDONALD [1981] 1 WLR 810 ,
Purchas J held that one co-owner had caused the other to
leave by threatening violence towards her. Consequently, it
would be unreasonable to expect the latter to occupy the
premises under those circumstances.

There are numerous exceptions to the general rule to be

found in the cases ending with CHHOKAR v CHHOKAR [1984]
FLR 313. In CHHOKAR it was said that the court would impose
a rent obligation between co-owners where the imposition of
such an obligation would be fair. The Court of Appeal
suggested that ‘fairness’ was the appropriate test, and Gray
argues that the position may now be that there is a rental
obligation between co-owners. See also RE PAVLOU [1993] 3 All
ER 955 on this point which is considered later in this chapter.

The quantification of the rent appears to be on the basis of

the detriment suffered by the ousted co-owner as suggested
by the Court of Appeal in DENNIS v McDONALD.

L IABILITY FOR REPAIRS AND

IMPROVEMENT
The general rule governing whether there is an obligation on
the part of other co-owners to compensate a co-owner who
has spent his own money on repairs or improvement of the
property is stated in LEIGH v DICKESON (1844–85) 15 QBD 60.
In this case, it was held that the co-owner who has incurred
such expenditure cannot demand repayment from the others
unless there has been an agreement between them, or the
repairs were carried out at their express or implied request or
pursuant to an obligation to a third party.

The co-owner who has incurred expenditure in this manner

does, however, have an ‘equity’ which allows him to make a
claim against the proceeds of sale where the value of the
property has been increased because of the repairs or the
improvement (see LEIGH v DICKESON and RE JONES [1893] 2 Ch
461).

The measure of compensation appears to be the increase in

value consequent upon the improvements or repairs as
suggested in PARKER v TRIGG (1884) WN 27. There are,
however, other authorities, such as RE JONES, which suggest
that the measure of compensation is the amount of the actual
expenditure.

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Think Point 2
Which do you think is the more appropriate measure of
compensation when a co-owner has expended monies
on repairs? Why?

It should be noted that where the repairs are only in the

nature of ordinary maintenance it is unlikely that the co-owner
will have a claim (see McMAHON v PUBLIC CURATOR OF
QUEENSLAND [1952] St R Qd 197 ).

The issue of rental obligations and expenditure incurred on

co-owned property was recently considered in RE PAVLOU
[1993] 3 All ER 955. In this case, the respondent husband and
wife were the joint legal and beneficial owners of their
matrimonial home. They separated in January 1983 and the
wife was left in sole occupation of the home. Thereafter, the
wife paid the mortgage instalments and the costs of repair and
improvements to the home. The husband was adjudicated a
bankrupt in March 1987. This had the result of severing the
beneficial joint tenancy in the property and, as such, the
home was owned by them as beneficial tenants in common.
The trustee in bankruptcy sought a declaration as to the
beneficial interests in the home, an order for possession and
an order for sale. It was agreed that the orders for possession
and sale should be granted but the wife argued that she was
entitled to reimbursement for her expenditure on the
property.

It was held that the guiding principle in cases of beneficial joint

tenants and beneficial tenants in common is that neither party
can take a benefit resulting from an increase in value of the
property without making an allowance for what had been
spent by the other which had caused the increase in value.
Thus, on an order for sale, the proportions in which the
property was to be divided between the parties had to take
account of such an allowance. The wife was therefore entitled
to either one half of the increase in value of the property
(resulting from her improvements and repairs) or one half of
her actual expenditure, whichever was the less. The wife was
also entitled to credit for one half of the increase in the value
of the equity of redemption which had resulted from her
mortgage repayments from the date the husband left the
property.

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Further, the court would order payment of an occupational

rent not only where the co-owner who left had been ousted
by the other co-owner, but also in any other case in which it
was necessary in order to do equity between the parties.
Where the property was the matrimonial home and the
marriage had broken down, an occupational rent would
normally be payable as, in most cases, the co-owner who left
would not normally be allowed back into occupation.
However, if the tenant in common left the property voluntarily
and he or she would be welcome back into the property, it
would not normally be fair or equitable to order payment of
an occupational rent. On the facts of the case, the wife was
prima facie liable to pay an occupational rent from March
1986, when she had presented a petition for divorce.

S ALE
As regards the decision whether or not to sell the co-owned
property, you should refer to Chapter 10.

5. TENANCY BY ENTIRETIES
AND COPARCENARY
These types of co-ownership are now more or less extinct
and so I do not propose to deal with them here.

6. SEVERANCE OF JOINT
TENANCY
Although no joint tenant has a distinct share in the estate,
anyone can sever his interest from the others and hold an
undivided share. If there are four joint tenants, each has a
potential one quarter share and can obtain it by severing his
interest in the joint tenancy in equity. Section 36(2) of the Law
of Property Act 1925 makes it clear that there can be no
severance of a joint tenancy of the legal estate.

If one severs his interest, the others continue to hold jointly.

For example, if A, B and C were joint tenants and A severed
his share, A would have a one third share and B and C would
jointly have a two thirds share. On the death of C, A would
still be entitled to his one third share but B would be entitled
to the two thirds share under the right of survivorship.

It should be noted that the result of the severance will be

equal shares, irrespective of the contributions towards the
purchase price made by each of the co-owners, unless there
is an agreement to the contrary.

The various methods of severance involved the destruction

of a unity. No severance of the joint tenancy of a legal estate
is possible since 1925 (remember that at law a joint tenancy is
the only type of co-ownership which can exist), but the
methods are still applicable in equity and will effect a
severance of the joint tenancy existing under the trust of land.

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The 1925 legislation has also made provisions in relation to

the joint equitable interest.

We shall now look at each of the different ways of severing

the joint tenancy in equity.

S EVERANCE UNDER S.36 OF THE

LAW OF PROPERTY A CT 1925
Section 36(2) of the Law of Property Act 1925 allows the joint
tenant to sever the joint tenancy in equity by giving the other
joint tenants notice in writing of the desire to sever.

This provision, although it appears to be a convenient method

of severance because it can be made unilaterally, is limited
because:

씰 it applies only where land is held jointly, and so does not

apply once the land has been sold and the trust property
has become money

씰 it applies only where the same people are the trustees

and the beneficiaries (i.e. where they are beneficial joint
tenants), and so if land is held by A and B on trust for B
and D, D cannot use this method of severance.

The notice in writing must evince an intention to sever

immediately. Such notice can be given in legal proceedings
although in HARRIS v GODDARD [1983] 1 WLR 1203 (matrimonial
proceedings) where Mrs Harris issued a petition claiming an
order ‘by way of transfer of property and/or settlement of
property and/or variation of settlement’, the Court of Appeal
held that this did not effect a severance. This was because, in
effect, she was asking the court to make an order in the future
severing the interest rather than showing an intention to do
so herself with immediate effect.

The notice in writing can take the form of a writ or originating

summons. In RE DRAPER’S CONVEYANCE [1969] 1 Ch 486 , an
application by a wife for a declaration under the Married
Women’s Property Act 1882 was sufficient to amount to
written notice within the section, and thus severance had
occurred. HARRIS and DRAPER may seem a little difficult to
reconcile. The essence is that the writing to be treated as the
notice must show an intention that with immediate effect the
parties are to be seen as having separate, distinct shares in
the property.

Finally, it should be noted that the notice in writing must be

served on all the joint tenants. See the case of RE 88 BERKELEY
ROAD LONDON NW9 [1971] Ch 648 . This issue was recently
considered in KINCH v BULLARD [1998] 4 All ER 650. Here, a
husband and wife acquired a property in 1987 as their family
home. In 1994 the wife contemplated divorce proceedings
and consulted solicitors to discuss the severance of the joint
tenancy. In June 1995, the wife filed a petition for divorce and
in July instructed her solicitors to serve a s.36 LPA 1925
notice to sever the beneficial joint tenancy. On the 3rd of
August 1995, the notice was signed by the wife and sent by

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first class post to her husband on the 4th of August. On the

weekend of 5th and 6th of August, the husband suffered a
heart attack and was hospitalised. The wife picked up the
letter with the notice and destroyed it either on the 5th or 7th
of August. The wife concluded that her husband would
predecease her which he did. The claimants claimed to be
entitled to a beneficial share of the property which depended
on whether the notice had been served. The court decided
that in accordance with s.36, the notice had been properly
served on the husband notwithstanding that the wife tore up
the notice before he could read it. Section 196 of the Law of
Property Act 1925 provides various ways in which a notice
can be served. Section 196(3) provides that it will be
effectively served if ‘left at the last known place of abode or
business’ of the intended recipient.

Accordingly, the husband’s executors were entitled to the

declaration that the notice had been validly served and the
husband’s beneficiaries were entitled to a share in the
property. Her failure to inform the husband that the notice
had been withdrawn was also significant. The court did
suggest that the case might have been decided differently if
the addressee (the husband) had been notified that the notice
to sever had been withdrawn. (Question: do you think this
would/should have made a difference?) As it had not been
withdrawn, the notice to sever was valid.

W ILLIAMS V H ENSMAN METHODS

OF SEVERANCE
Apart from providing for severance by written notice, s.36(2)
of the Law of Property Act 1925 further provides that the
joint tenant ‘may do other such act or things which would
have been effectual to sever the tenancy in equity’. These
other acts or things could consist of one of the three types of
severance specified in WILLIAMS v HENSMAN (1861) 1 John & H
546 . These are:

ACTS OF A JOINT TENANT OPERATING

UPON HIS OWN SHARE
If one joint tenant alienates his interest, his joint tenancy is
severed. The alienee takes an undivided share since he has
no unity of title with the remaining joint tenants. Since 1925,
such alienation is by assignment of the equitable interest. An
alienation by operation of law has the same effect. For
example, if the joint tenant becomes bankrupt, so that his
interest passes to the trustee in bankruptcy, the trustee will be
entitled to an undivided share. Remember that the joint tenant
cannot transfer his interest in the legal estate, for to do so
would be contrary to s.36(2).

The same rule applies to partial alienations – for example, by

lease of his equitable interest or a mortgage of it.

In equity, a specifically enforceable contract for the transfer of

an interest in land is treated as the transfer of it (the WALSH v
LONSDALE doctrine). So, making a contract for alienation will
sever a joint tenant’s interest and create an undivided share.

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Further, if land was held for A, B and C for their joint lives and
then for D in remainder, there were two estates in the land
(the estate for the joint lives, and the remainder in fee simple).
But if B acquired D’s remainder, B’s interest in the joint
tenancy is merged in the remainder and causes a severance of
his interest in the joint tenancy.

M UTUAL AGREEMENT
If those with joint interests have a common intention to hold
in shares, then they will do so. An agreement amongst them to
this effect would bring about a severance.

Such an intention may be implicit in an agreement between

them and it will not matter if the agreement is unenforceable
because it is not evidenced in writing (as previously required
under s.40 of the Law of Property Act 1925) or, presumably,
if it is void as not satisfying s.2 of the Law of Property
(Miscellaneous Provisions) Act 1989. What is essential is that
the agreement shows a common intention that the joint
tenants are thereafter to have separate shares in the property.
An extreme example of this method of severance is found in
BURGESS v RAWNSLEY [1975] 3 All ER 142 , where the Court of
Appeal held that an oral agreement by one joint tenant to sell
her share to the other had effected a severance. The
reasoning appears to be that the parties were thinking in terms
of shares and it was irrelevant that the agreement was in fact
unenforceable for want of writing. However, where there
have only been mere negotiations with no express agreement
to sever, this would not amount to severance: GORE v
CARPENTER (1990) 61 P & CR 456.

See also NEILSON JONES v FEDDEN [1975] Ch 222 as to the

extent of the agreement required.

ANY COURSE OF DEALING WHICH

SHOWS THAT THE INTERESTS OF ALL
ARE MUTUALLY TREATED AS
CONSTITUTING A TENANCY IN
COMMON
In BURGESS v RAWNSLEY, the court discussed when a course
of dealing between the joint tenants might be sufficient to lead
to an inference of an intention to sever. Lord Denning was
firmest. He stated that any course of dealing or negotiation,
not amounting to an agreement, that shows an intention by
both that they should hold separate shares would be
sufficient to cause a severance. Browne LJ did not express an
opinion on this. Sir John Pennycuick was more cautious. He
stated that it could be possible to infer a common intention to
sever from negotiations even though the negotiations broke
down and led to no agreement. See also McDOWELL v
HIRSCHFIELD LIPSON & RUMNEY AND SMITH [1992] 2 FLR 126.

This method of severance would appear to be limited as

suggested in BURGESS. It seems that it is insufficient to have an
uncommunicated declaration by one joint tenant. Neither is it
sufficient that there is a declaration by the joint tenant to a
third party: GREENFIELD v GREENFIELD (1979) 38 P & CR 570 .

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It would seem also that an oral notice would not be effective

to sever under this head.

The issue of severance was considered in HUNTER v BABBAGE

[1994] EGCS 8. The Court decided that the joint tenancy had
been severed by a draft agreement which was drawn up in
December 1989. It was irrelevant that the agreement which
implied or included an agreement for severance was not
specifically enforceable. The significance of the agreement was
not that it bound the parties but that it served as an indication
of a common intention to sever.

S EVERANCE BY KILLING
One other method of severance would appear to result from
one joint tenant unlawfully killing another joint tenant. In this
situation the right of survivorship does not apply otherwise
the survivor would benefit from the fruits of his crime (see IN
THE ESTATE OF HALL [1914] P 1 and CLEAVER v MUTUAL RESERVE
FUND LIFE ASSOCIATION [1892] 1 QB 147 for the general
principle).

Although most other jurisdictions appear to accept that the

homicide is the severing event, Gray argues that this is the
wrong approach. His reasoning seems to be that the act of
severance must strictly occur before the death – so to say
that the killing is the severing event is in effect to put the cart
before the horse!

A better view might be that the killing is not the severing event
but that, because of the act of killing, the surviving joint tenant
will hold the legal estate with the provision that the killer
cannot benefit under the estate of the deceased.

This theory rests on the concept of the constructive trust and

equity’s intervention to prevent unjust enrichment. However,
what the precise form of the constructive trust is in cases like
this is still open to question. You should also consider the
effect of the Forfeiture Act 1982.

7. CREATIONOF CO-
OWNERSHIP
Ideally, when creating co-ownership, people should devise or
convey the property to persons as joint tenants upon an
express trust for, say, C, D and E jointly or in undivided
shares equally (or whatever proportions are desired). It is
then clear that not only is the property held in co-ownership
but also what type of co-ownership is involved. The
commonest case is where spouses or cohabitants (H and W)
purchase a property together and it is transferred to, for
example, ‘H and W as joint tenants in trust for H and W as
tenants in common in equal shares.’

Where this has not been done, established principles of

equity determine the type of co-ownership.

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LACK OF A UNITY
If one of the four unities is missing there can be no joint
tenancy. Obviously, if the unity of possession is missing as
well, there can be no co-ownership at all.

W ORDS OF SEVERANCE
If the conveyance to the individuals involved contains words
of severance, then this would indicate that the individuals
were intended to take separate shares in the property. For
instance to ‘A and B equally’ would make them tenants in
common. Other examples of words of severance include
words like ‘between’, ‘in shares’, ‘amongst’, ‘respectively’ – it
is always a question of intention. In these cases the parties
with the power to do so have made their intention clear. Effect
is given in equity to this intention.

UNEQUAL PURCHASE MONEY

If two or more persons contribute in unequal shares to the
purchase of property, equity presumes the intention to be
that they are to have shares in the property as tenants in
common with shares in proportion to their respective
contributions. If the contributions are equal, a joint tenancy in
equity is likely to be presumed.

Remember, however, that this is merely a presumption and

that the court is at liberty to conclude that the intention of the
parties was that they should hold equal shares in the
property notwithstanding that the parties had made unequal
contributions to the purchase price. In SAVILL v GOODALL
(1993) 25 HLR 588 , the Court of Appeal decided that, on the
facts of the case, where an ordinary sensible couple declare
an intention to own the property jointly they can only be
taken to intend that they shall own it equally. This was
notwithstanding that the parties had contributed unequally to
the purchase price. A similar conclusion was reached in
CLOUGH v KILLEY (1996) 72 P&CR 122.

P ARTNERSHIP ASSETS
Partners are business people and equity presumes that
business persons, on a venture together, do not intend that
the survivor will scoop the whole pool and be left the sole
owner of the business. Accordingly, land held as a
partnership asset is presumed to be held as tenants in
common by the partners.

This principle extends beyond partners to those carrying on

any kind of undertaking with a view to profit (see LAKE v
CRADDOCK (1732) 3 P Wms 158).

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 Chapter 9

LOANS ON MORTGAGE
If two persons advance money together on a mortgage which
is made to them jointly then, in equity, they are entitled in
undivided shares. However, as with the previous rules, this is
only a presumption.

B USINESS TENANTS
In MALAYAN CREDIT LTD v JACK CHIA MPH LTD [1986] AC 549 ,
the Privy Council held that there was a beneficial tenancy in
common of a business lease of premises. It was noted that the
earlier categories of presumptions, where equity leans in
favour of a tenancy in common, are not necessarily
exhaustive. The test is whether the circumstances lead to an
inference that a tenancy in common rather than a joint
tenancy was intended.

T HE L AW OF PROPERTY A CT 1925
AS AMENDED BY THE T RUSTS OF
LAND AND APPOINTMENT OF
T RUSTEES ACT 1996
It should be noted that s.36(1) of the Law of Property Act
1925, as amended by the Trusts of Land and Appointment of
Trustees Act 1996, provides that, ‘where a legal estate is
beneficially limited to or held in trust for any persons as joint
tenants, the same shall be held in trust’. So, s.36 covers the
case of a conveyance ‘to A and B’, or ‘to A and B on trust for
C and D’ or ‘to A on trust for C and D’.

The effect of dispositions to tenants in common is provided

by s.34 of the Law of Property Act 1925 as amended. This
states that, ‘where … land is expressed to be conveyed to
any persons in undivided shares and those persons are of
full age, the conveyance shall… operate as if the land had
been expressed to be conveyed to the grantees… as joint
tenants in trust for the persons interested in the land’.

The overall effect is that wherever land is held in law or equity

(or both) by more than one person there will be a trust. If it
has not been declared expressly by the parties themselves, it
will be imposed by statute. Indeed, the only case today where
there will not be a trust is where one, adult person holds the
whole estate in law and equity – i.e. where he is the beneficial
owner. A sole legal owner cannot hold in trust for himself
alone. The trust will be a trust of land and subject to the
Trusts of Land and Appointment of Trustees Act 1996. This is
considered in the next chapter.

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 Chapter 9

8. TERMINATION OF CO -
OWNERSHIP
A co-ownership can be terminated by:

씰 partition

씰 the union of the property in one joint tenant

or

씰 the conveyance of the property to a single third party.

If any one of these applies then the co-ownership will be

terminated or extinguished. Please look up the relevant details.

Revision
You should now revise the material in this chapter
carefully before attempting the Self-assessment Test..

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 Chapter 9

CASES REFERRED TO IN THIS

CHAPTER
M AJOR CASES
RE DENNIS 1995

JACOBS v SEWARD 1872

HENDERSON v EASON 1851

JONES v JONES 1977

DENNIS v McDONALD 1981

CHHOKAR v CHHOKAR 1984

LEIGH v DICKESON 1884–85

RE PAVLOU 1993

HARRIS v GODDARD 1983

RE DRAPER’S CONVEYANCE 1969

RE 88 BERKELEY ROAD, LONDON NW9 1971

WILLIAMS v HENSMAN 1861

BURGESS v RAWNSLEY 1975

HUNTER v BABBAGE 1994

GORE v CARPENTER 1990

NEILSON JONES v FEDDEN 1975

CLEAVER v MUTUAL RESERVE FUND LIFE ASSOCIATION 1892

SAVILL v GOODALL 1993

YOUNG v McKITTRICK

McDOWELL v HIRSCHFIELD, LIPSON & RUMNEY AND SMITH

1992

KINCH v BULLARD 1998

O THER CASES
GREENFIELD v GREENFIELD 1979

IN THE ESTATE OF HALL 1914

THAMES GUARANTY v CAMPBELL 1984

RE JONES 1893

McMAHON v PUBLIC CURATOR OF QUEENSLAND 1952

BULL v BULL 1955

MALAYAN CREDIT LTD v JACK CHIA MPH LTD 1986

PARKER v TRIGG 1884

WALSH v LONSDALE 1882

CLOUGH v KILLEY 1996

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 Chapter 9

S ELF-ASSESSMENT TEST
QUESTION 1
What are the four unities that must be present in order for
there to be a joint tenancy?

QUESTION 2
What new method of severance did s.36 of the Law of
Property Act 1925 create?

QUESTION 3
Sarah, Kathy and Brian were tenants in common of a house
which they had bought together in equal shares. Not long
after moving in they started to argue with each other. Kathy
spent £1,000 of her own money renovating the kitchen and
claims that the others should now pay their share. Sarah puts
a lock on the door to her room and moves out. She claims
rental from the others. Kathy and Brian tell her that such an
arrangement is unacceptable to them. Advise Brian.

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 Chapter 9

S PECIMEN ANSWERS TO S ELF-

ASSESSMENT T EST
QUESTION 1
In order for there to be a joint tenancy the four unities must
be present, namely: unity of possession, interest, time and
title.

Unity of possession: The alleged joint tenants are only joint

tenants if they are all entitled to possession of the same parcel
of land. If they are not, there is no co-ownership, and they
can only be neighbours. An area of land in which there are
boundaries (whether vertical or horizontal) is described as
owned in severalty and is not the subject of co-ownership at
all.

Unity of interest: Because the joint tenants hold one estate, it

follows that they must all be entitled to the same interest, for
example, in fee simple, or for a term of 90 years, or for their
joint lives, or the life of one of them.

Unity of time: The interests of the joint tenants must all vest
at the same time.

Unity of title: All of the alleged joint tenants must derive their
interests from the same legal act – i.e. all must claim under the
same conveyance to them.

QUESTION 2
Section 36(2) of the Law of Property Act 1925 allows the joint
tenant to sever the joint tenancy in equity by giving the other
joint tenants notice in writing of such desire. This provision,
while seeming at first glance to be a convenient method of
severance as it can be made unilaterally, is a limited one. It
applies where land is held jointly, and so does not apply once
the land has been sold and the trust property has become
money. It only applies where the same people are the trustees
and the beneficiaries. So, if land is held by A and B on trust
for B and D, D cannot use this method of severance as the
wording of the section does not permit it.

It should be noted that the notice in writing must evince an

intention to sever immediately, although it can be given in
legal proceedings. In HARRIS v GODDARD [1983] 1 WLR 1203
(matrimonial proceedings), Mrs Harris issued a petition
claiming an order ‘by way of transfer of property and/or
settlement of property and/or variation of settlement’. The
Court of Appeal held that this did not effect a severance. Mr
Justice Stockdale took a similar approach in McDOWELL v
HIRSCHFIELD, LIPSON & RUMNEY AND SMITH [1992] 2 FLR 126 .

It is also clear that the notice in writing can take the form of a
writ or originating summons. In RE DRAPER’S CONVEYANCE
[1969] 1 Ch 486 , an application by a wife for a declaration
under the Married Women’s Property Act 1882 was sufficient
to amount to written notice within the section and thus

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 Chapter 9

severance had occurred. Although HARRIS and DRAPER may

seem difficult to reconcile, the point is that to be effective the
notice must show an intention that the joint tenants are
immediately to have distinct, separate shares in the property.
A notice asking the court (at some future hearing) to make an
order bringing about severance is not sufficient.

The notice in writing must also be served on all the joint

tenants (RE 88 BERKELEY ROAD, LONDON NW 9 [1971] Ch 648).
In KINCH v BULLARD [1998] 4 All ER 650, the wife contemplated
divorce proceedings and consulted solicitors to discuss the
severance of the beneficial joint tenancy of their family home.
On the 3rd of August 1995, the notice was signed by the wife
and sent by first class post to her husband on the 4th of
August. On the weekend of the 5th and 6th of August, the
husband suffered a heart attack and was hospitalised. The
wife picked up the letter with the notice and destroyed it either
on the 5th or 7th of August. The wife concluded that her
husband would predecease her which he did. The plaintiffs
claimed to be entitled to a beneficial share of the property
which depended on whether the notice had been served. The
court decided that the notice had been properly served on
the husband notwithstanding that the wife tore up the notice
before he could read it. The notice had been properly served
in accordance with s.196 (3) of the Law of Property Act
1925, having been left at the last known abode of the
husband. Accordingly, the husband’s executors were entitled
to the declaration that the notice had been validly served and
the husband’s beneficiaries were entitled to a share in the
property. The court did suggest that the case might have been
decided differently if the addressee (the husband) had been
notified that the notice to sever had been withdrawn. As it
had not been withdrawn, the notice to sever was valid.

QUESTION 3
A co-owner is not obliged to pay rent to his fellow owners if
he is in fact in occupation and they are not: JONES v JONES
[1977] 2 All ER 231.

That general rule applies only where the non-occupying co-

owner has chosen voluntarily not to occupy the property.
This may be because he has alternative accommodation. In
DENNIS v McDONALD [1981] 1 WLR 810 , Purchas J held that
one co-owner had caused the other to leave by threatening
violence towards her and it would not be reasonable to
expect her to occupy the premises under those
circumstances.

It would, however, appear that there are numerous

exceptions to the general rule culminating in CHHOKAR V
CHHOKAR [1984] FLR 313, where it was said that the court
would impose a rent obligation between co-owners where the
imposition of such an obligation would be fair. The Court of
Appeal suggested that ‘fairness’ was the appropriate test.
Gray argues that the position may now be that there is a
rental obligation between the co-owners.

The question that arises here is whether the others will have
to pay rent to Sarah as she demands. This is ultimately a

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 Chapter 9

question of fact, and it may centre upon whether the court

considers the arguments between them to be of such a nature
and character that they can be regarded as sufficient to force
Sarah to move out. In the event that the answer to that
question is in the negative, it may be that there is still an
obligation to pay rent if the court thinks that it is fair and just
to do so, in accordance with the test laid down in CHHOKAR v
CHHOKAR. What can be said is that in this case it is likely to
be a question for the court to decide on the facts.

The issue of occupational rent was considered recently in RE

PAVLOU [1993] 3 All ER 955. Here, the court decided that it
would order payment of an occupational rent not only where
the co-owner who left had been ousted by the other co-
owner, but also in any other case in which it was necessary
in order to do equity between the parties. Where the property
was the matrimonial home, and the marriage had broken
down, an occupational rent would normally be payable as in
most cases the co-owner who left would not normally be
allowed back into occupation. However, if the tenant in
common left the property voluntarily and he or she would be
welcome back into the property, it would not normally be fair
or equitable to order payment of an occupational rent. On the
facts of the case, the wife was prima facie liable to pay an
occupational rent from March 1986, when she had presented
a petition for divorce.

As regards the claim for payment of a share of the repair

costs, the general rule as to whether there is an obligation to
compensate a co-owner who has expended his or her own
money on the repairs or improvement of the property on
behalf of the other co-owners is as stated in LEIGH v
DICKESON (1884-85) 15 QBD 60 . In that case, it was held that a
co-owner who has incurred expenditure in this way cannot
demand repayment from the others unless there has been an
agreement between them or it was carried out at their express
or implied request, or pursuant to an obligation to a third
party.

It should also be noted that in YOUNG v McKITTRICK 267 III

App 267 , it was stated that a request or agreement will not be
implied merely from the making of improvements or repairs
which were necessary.

The co-owner who has incurred expenditure in this manner

does, however, have an ‘equity’ which allows him to make a
claim against the proceeds of sale where the value of the
property has been increased because of the repairs or the
improvement (see LEIGH v DICKESON and RE JONES [1893] 2 Ch
461 ). The measure of compensation appears to be the
increase in value as a result of the improvements or repairs as
suggested in PARKER v TRIGG (1884) WN 27. There are however
other authorities, one of which is RE JONES, which suggest
that the measure of compensation is the amount of the actual
expenditure.

In RE PAVLOU [1993] 3 All ER 955, it was held that the guiding

principle in cases of beneficial joint tenants and beneficial
tenants in common is that neither party can take a benefit
resulting from an increase in value of the property without

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 Chapter 9

making an allowance for what has been spent by the other

which has caused the increase in value. Thus, on an order for
sale, the proportions in which the property was to be divided
between the parties had to take account of this fact. A party
who had expended money on the property was therefore
entitled to the lesser of either one half of the increase in value
of the property (resulting from her improvements and repairs)
or one half of her actual expenditure, if that was less than the
increase in value.

It appears that minor refurbishments are to be disregarded

completely on the ground that they are merely in the nature
of ordinary maintenance and thus do not constitute a
permanent improvement of realty.

Thus in this case the question whether Kathy is able to claim a

share from the others rests on whether there was an
agreement for the work to be done and the expenses to be
shared, or whether there is an obligation to a third party to do
the repairs. If there has been no agreement, or there is no
such obligation, then she would not be entitled to claim
against the others immediately. However, in the event that the
property is sold, and if there is an increase in value which is
attributable to the repairs done by her, then she has an equity
to claim against the proceeds of sale.

It is likely that the quantum which she gets will be based on

the increase in value and not the actual expenditure. It should
be noted that the amount which she spent was only £1,000:
if the court regards this as normal maintenance which does
not increase the value of the property then she would be
unlikely to get anything back.

Copyright © Semple Piggot Rochez Ltd 2003

LLB_Land_Ch09(06/03)

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