(Modern Land Law post alert. Some readers may be disturbed by graphic scenes of real property disputes).

There may be some points of interest for Land Law students in a Court of Appeal judgment handed down last month: in particular, with regard to co-owned real property beyond the ‘family home’ context.[i]

Williams v Williams [2024] EWCA Civ 42 was about rights in Cefn Coed Farm, near Neath. It was uncontroversial that this had been held at law by a married couple and one of their sons: Lloyd Williams (father, now dead); Catherine Williams (mother); Lloyd Dorian Williams – who were registered as proprietors – as joint tenants. The dispute was about the structure of their holding in equity. There was no express declaration as to how the equitable interest should be held, so were they joint tenants or tenants in common? This mattered, because they needed to know whether or not survivorship had occurred (given that Lloyd Williams was dead).

Given how much attention has been garnered by ‘the big cases’ on co-ownership, Stack v Dowden and [2007] UKHL 17, [2007] 2 AC 432 and Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776, students may be ‘programmed’ to jump in favour of joint tenancy in equity here. Certainly, there are suggestions there that this should be the answer in ‘quasi-matrimonial home’ cases.

Here, though, the judge at first instance went for TICs in equity, and the appeal against this failed. Why? Nugee LJ gave the leading judgment (and the other two judges agreed – to the relief of law students everywhere, who are also cheering the relatively short judgment: this is no Guest v Guest).

Nugee considered just what was said in this context in Stack and Jones. There was Lady Hale’s statement (Stack, 58) that:

“at least in the domestic consumer context, a conveyance into joint names indicates both legal and beneficial joint tenancy, unless and until the contrary is proved.”

And the approach from a slightly different direction, in Jones, in which Hale and Walker started from the resulting trust v. constructive trust analysis debate. This is not the same as JT v TIC in equity, but the focus on contribution found in the RT analysis does have an affinity with one justification for equity’s preference for a TIC – that unequal contributions make a JT undesirable, or not what we can imagine parties would generally intend.

One strand of argument in Williams was about the applicability of a presumption of equitable joint tenancy, when there was a legal JT, and no express declaration of equitable interests, to a non-‘domestic couple’ context. Nugee noted that some of Lady Hale’s statements did seem to take the presumption of equitable JT beyond the domestic context, but thought that there was a significant difference.

It is useful to be reminded, at 53., that the JT/TIC issue is not simply a matter of intoning ‘equity follows the law’ – there are, as Walker and Hale stated in Jones [19], other reasons for the strong preference for a JT in equity in the ‘couple home’ context. In their words,

‘a challenge to the presumption of beneficial joint tenancy is not to be lightly embarked on’,

because

‘If a couple in an intimate relationship (whether married or unmarried) decide to buy a house or flat in which to live together, almost always with the help of a mortgage for which they are jointly and severally liable, that is on the face of things a strong indication of emotional and economic commitment to a joint enterprise.”

The fact that this justification is tied to that particular context means that it needs re-examination for fact situations outside that type of domestic setting and intimate partnership. Here, although Cefn Coed was a place to live, it was very much a farming business. Nugee noted [55] that

‘However close they were as a family, the relationship between Dorian and his parents cannot be equated to that between a married or unmarried couple.’

They were business partners, making decisions, including this property purchase, for commercial reasons. This, then made the trial judge’s decision to prefer the old equitable idea that, in business cases, co-owners don’t intend survivorship, and thus that they will hold as TICs in equity. This is reconciled with the Stack/Jones statements by saying [63] that there is some presumption that the starting point, even in commercially-inflected cases is JTs in equity, but it is not too hard to make out a case for TIC, in those cases (unlike the situation in couple-home cases):

‘Where such property is acquired for business purposes, the Court will very readily assume that survivorship, and hence joint tenancy, was not intended.’

A strong point here is that, while putting property in joint names

‘no doubt … raise[s] a powerful inference that the legal owners were intended to be beneficially interested in the property’’, 

the next step, the presumption that this means the equitable interest is held as a JT, is weaker, because the only available structure for a legal title is JT, so no real choice has been made here. ‘In those circumstances, the inference that they thereby intended a beneficial joint tenancy with its right of survivorship rather than a tenancy in common seems to me likely to be in many contexts a much weaker one, and in the case of land bought for business purposes one that is easily and normally displaced by the presumption that such property is intended to be held in common.’

Also worth noting, for students, is the useful explanation, at 49, of why it is not always going to be necessary, in answering a problem question involving co-ownership, to discuss the structural JT/TIC/severance issues:

…[the right of survivorship] is not usually an issue in most cases of the Stack v Dowden type. Most such disputes are disputes between two co-owners who are still alive and whose relationship has broken down, and in such circumstances if there is any possibility of a beneficial joint tenancy one or other of the parties is very likely to be advised to serve a notice to sever any joint tenancy that exists, something that can be done very simply. The dispute will almost always therefore not be about whether they own the property equally as joint tenants or equally as tenants in common, but whether their shares are equal or not.

All in all, a case which does a bit of clarifying of this area, up to a point, and which might be finding a place on my reading list next year.

 

GS

11/3/2024

 

Image: some mud. I think it is a safe bet that there would be some mud on the farm in question. Photo by Matt Seymour on Unsplash

[i] No doubt there will be some more considered discussions of this. For early comments, see, e.g., this, which also considers the constructive trust v. resulting trust issue.