The first question that arises in the case is the nature of ownership in the property

The first question that arises in the case is the nature of ownership in the property. As A, B, C and D have bought the house by contributing to the purchase price equally, they have become joint tenants as per the decision in Malayan Credit Ltd v Jack Chia-MPH Ltd. In that case, the court has held that where parties contribute equally to the purchase of the property, joint tenancy is presumed. Joint tenancy is a co-ownership of a property, which involves the four unities of title, interest, possession and time. In other words, the joint tenants will hold the same interest, under the same document, which is vested in them at the same time. A, B, C and D purchased the house at the same time, and have the same interest in the property. As such, each of the four is entitled to possession of the joint tenancy.

Joint ownership involves a right of survivorship for the joint owners. This means that when one of the joint owner dies, his interest is acquired by the other joint owners. The joint owners cannot dispose of their interest in the property through a will or upon their death.

C was 17 at the time of purchase of property. As C was a minor, he cannot own legal estate in land. The LPA 1925, Section 1(6) provides that a minor cannot hold legal estate in land. However, a minor can be an owner in equity and have a beneficiary interest in equity. The others will hold the legal estate in trust for themselves as well as for C. The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) is also relevant here. Under Section 1 of TOLATA 1996, when two or more people own land concurrently there is a creation of trust of land. This means that the rights of ownership are divided between the legal owners (also trustees) and the beneficial owners. This also has relevance to the severance of interest. In a joint ownership, legal estate cannot be held in tenancy in common or severed. But the beneficial interests can be held in tenancy in common and is severable. Therefore, now it is to be seen if severance of beneficial interest is effected under the facts of the case.

In this case, there is no express declaration as to how the parties intend to hold the beneficial interest and this will have implications on the severance of joint tenancy. The rule is that equity follows the law and if the legal estate is intended to be held as joint tenants, the equitable interest is also presumed to be held as joint tenants. In such cases, severance of the joint tenancy can be effected by certain methods. It can be severed through a joint tenant acting on his own share, such as by contracting to sell the property. In this case, A has offered to sell the property to B & C or offered that they sell the property and he obtain the proceeds. This is not a conclusive contract. As such, it cannot operate to sever the joint tenancy.

A joint tenancy can be severed by mutual agreement. However, negotiations for the agreement must have been concluded and agreement made between all the existing beneficial joint tenants. In this case, when A, C and D discussed their desire to have separate and distinct shares in the future, they did not conclusively agree on the matter and nothing was put in writing. Therefore, this does not have the effect of severing the joint tenancy.

The LPA 1925, section 36(2) allows joint tenant to alienate their share by a unilateral act, provided that the act is final and irrevocable. However, the severance of beneficial interests in the property can only be done inter vivos, and not by Will. Thus, B’s Will and A’s Will does not have the effect of severing the joint tenancy.

Joint tenancy can be severed when one of the joint owners mortgages his interest in the property to secure a loan. In 1996 B took out a loan in order to purchase a sports car. This loan was secured on the property by means of a charge against B’s interest. This has an effect of severance of joint tenancy as far as B’s share is concerned. The interest of the others is still held in joint tenancy.

If the property is sold, B’s interest will devolve on E as per will. D and C will get the remaining interest in the property under the right of survivorship.

Table of Cases

Bibliography

MacKenzie J, Textbook on Land Law (16th Edition Oxford University Press 2016)