Archive for the ‘course of conduct’ Category

Quantifying the beneficial interest: Constructive v resulting trust

April 28, 2011

Once the Court has found that there is a common intention constructive trust, the Court can find that the parties’ intentions as to quantum can best be discovered by looking at the whole course of dealings between them.

In Drake v Whipp¬†((1996) 28 H.L.R. 53, CA (Eng)) an unmarried couple bought a barn as their family home. Each contributed financially to the purchase price and to the much larger cost of converting the barn into a home. They also devoted substantial amounts of personal time and labour to the work. Each took care of certain household bills. Title to the property was in the male defendant’s name. It had been found at first instance that there was a common intention that each would have a beneficial interest. The Court of Appeal took the view that this meant that the relationship should be thought of in terms of constructive rather than resulting trust. It held that in this case the beneficial interests should be quantified by looking at the entire course of conduct between the parties. The plaintiff was awarded a one third share (which exceeded what she would have received under a resulting trust approach).

Michael Lower

Agreement in principle not enough to sever

December 26, 2010

An agreement in principle to sever a joint tenancy is not enough to amount to a mutual agreement or a course of conduct.

In Gore and Snell v Carpenter ((1990) 60 P & CR 456) a husband and wife owned two houses as joint tenants. They agreed in principle that they would have one of the houses each (and end the joint tenancies). A draft separation agreement included a clause severing one of the joint tenancies but this agreement was part of a package of proposals. Final agreement on the proposals had not been reached by the time of the husband’s death. Judge Blackett-Ord held that there had been no severance. It is a question of intention in each case (at 464). In this case, the parties had come close to agreeing but had not agreed. There was no course of conduct. This requires both parties to commit themselves to a severance but the wife never had.

Agreeing to make mutual wills can sever a joint tenancy

December 21, 2010

An agreement to make mutual wills concerning property that the parties held as joint tenants can sever the joint tenancy.

In Re Wilford’s Estate ((1879) L.R. 11 Ch.D. 267) two sisters held certain property as joint tenants. They mutually agreed that they would each make wills leaving the property to the surviving sister and after her death to a niece. It was held that this was a dealing by each of the sisters with her half ‘share’ in the property. It is an example of severance by course of conduct.

Equitable severance by mutual agreement

December 18, 2010

An oral (unenforceable) agreement whereby joint tenants agree that one of them is to acquire the other’s interest is an equitable severance. It is a mutual agreement and may sometimes (depending on the facts) be a course of conduct. A mutual agreement need not be specifically enforceable. Mutual agreement and course of conduct are separate methods of severing a joint tenancy.

In Burgess v Rawnsley ([1975] Ch 429, CA (Eng)) H and Mrs R bought a property as beneficial joint tenants. Mrs R orally agreed to sell her interest in the house to H but then refused to proceed because she wanted a higher price than that originally agreed. The Court of Appeal held that the joint tenancy had been severed. The oral agreement was a mutual agreement to sever even though the agreement could not be enforced (because neither written nor recorded in writing). Lord Denning MR thought it possible that there had also been a severance by course of conduct but the other members of the Court of Appeal disagreed. Mutual agreement and course of conduct are separate methods of severing a joint tenancy.

Lord Denning MR doubted that Nielson-Jones v Fedden had been correctly decided but the other members of the Court of Appeal did not find it necessary to consider this point.