Land Law tutorial 3

Frank paids for the motherfuckin flat
Betty didnt fuckin pay a dime
Nothing was fuckin said about the equitable ownership
Joint tenancy for legal ownership
Betty paid some household expenses
Frank wrote to Betty asking her to sell the house, she rejected and go killed in a car crash afterwards,
in her will she said the whole estate goes to her children equally, two months later Frank conveyed flat to poor Bert

Does Betty have any beneficial interest?
Dyer v Dyer rebutted by presumption of advancement? We have to look at circumstantial evidence before using the presumption of advancement as a judicial instrument of last resort (Ip Man Shan Henry)

Lily Cheung support advancement will prevail (in that case husband succeed to rebut it)
Tai Chan Lai v Tai Yuk Ki followed to Lily Cheung
The fact that the flat is bought in joint names will support advancement (Ho Nga Sheung)
If advancement succeed, Betty will get half of the beneficial interest because this is a joint tenancy.
If advancement fail, Betty get nothing because according to Dyer v Dyer, Betty and Frank are legal co-owner and holding the flat on trust for Frank who pays the money.

Equity follows the law (Stack v Dowden), subject to 4 exceptions (not applicable here), JT in law = JT in equity

Did Betty contributed by paying some household expenses?
The contribution was not referable to the acquisition of the property (no evidence says so).

How about using the holistic approach mentioned in Stack v Dowden?
Not enough evidence in this case.

Was the joint tenancy severed? Assuming legal JT and equitable JT
Legal: No notice or instrument
Equity: 3 methods 1) NO act upon 2) NO mutual intention 3) NO mutual course of dealing
In any case, the email suggests that Frank was asking Betty to sell the flat. If Frank intends a TC, he could have sold his share. But he intends it to be a JT because he is asking Betty's permission.

Legal JT severance:
s8: Notice served by a JT on another JT? Defined in s62. Prima facie a presumption of service because Betty replied (she must have received the letter)
The notice must display an intention to sever (Harris v Goddard)
Application: Betty has no immediate intention to sell therefore no severance
Agreement in principle is not sufficient i.e. agreement in condition on (Gore and Shell v Carpenter)
JT cannot be severed by a will. (Chan How Chuen Stephen v Chan Hau Cheong)
The act of selling the flat cannot severed the JT because Betty already died, severance must be in the lifetime of the Betty.
Moving out of the flat cannot constitute an act of severance/physical division is not sufficient (Greenfield v Greenfield)
Different if Betty forces him out because that will show an intention to sever




Also, Betty's will have no effect because JT cannot be severed by a will.
Since JT have right of survivorship, when Betty died, Frank gets all the share.

Assuming legal JT and equitable interest only on Frank
Betty's will have no effect because she has to act on trust for Frank therefore all proceedings will go to Frank.

When can the children have a claim in the flat i.e. legal owners?
When it was legal TC, the children will become the legal owners of Betty's share through the will but they have to act on trust for the beneficiaries

When can the children have a claim in the proceedings?
When it was an equitable TC, the children will become the beneficial owners of Betty's share through the will. Any proceedings will go to them according to the share.

Resulting and constructive trust

How to create a resulting trust?

1) Failure to dispose of beneficial interest

• Where a beneficial interest is not disposed of effectively, a resulting trust will arise in favor of the grantor E.g. Vandervell v IRC

2) Where a trust fails

• Where an express trust fails for any reasons such as no beneficiary under the trust, purpose of the trust is void, trust is void for uncertainty, a resulting trust will arise in favor of the grantor E.g. Re Diplock

3) Purchase in the name of another 

• Where a property is purchased in the name of one but with the money of another and there is no express intention of who the beneficial owner is, a resulting trust will arise in favor of the one that provided the money. (Dyer v Dyer)
• Because equity presumes that it was A's intention that B to whom the legal title is conveyed, should hold it on trust for A.
• Exception: if property is bought in the name of other for an improper or illegal purpose and purchaser disclosed such purpose, a resulting trust would not arise (Yim Bo Ying v Chung Iu Warm)
• This presumption can be rebutted
• E.g. evidence that the property was intended as a gift (Fulltrend v Longer Year)
• Presumption of advancement will rebut the presumption in Dyer v Dyer

Resulting and constructive trust

para 61 of Stack v Dowden

each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to..

This part of judgment support the 2nd hurdle

para 68 of Stack v Dowden
the burden will therefore be on the person seeking to show that the parties did intend their beneficial interests to be different from their legal interests, and in what way. (Implying that equity follows the law)

para 59 of Stack v Dowden
How to rebut the presumption that equity follows the law? Two approaches. The judge prefer the second one which is "Or is it that the contrary can be proved by looking at all the relevant circumstances in order to discern the parties; common intention?"

para 60
Judge emphasize that the present case is in a domestic context

The point is that the majority judges in this case favors a holistic approach in this domestic context as opposed to commercial context

Proprietary estoppel

Why is there proprietary estoppel?
To prevent unconscionable conduct in the situation of an unenforceable land contract.

3 examples of proprietary estoppel

1. Gift intended to the other party but formalities not complied with while the other party already incurred expenses relating to the subject matter in reliance of the giving party (Dillwyn v Llewelyn)
2. No clear express promise but the consistent dealings between the two parties are reasonable to cause the receiving party to believe that some proprietary rights could be acquired (Ramsden v Dyson) (Inwards v Baker)
3. A party mistaken about his proprietary right and acted detrimentally in reliance on the mistake while the other party willfully stood by and allow such detrimental mistake to eventuate. (Ramsden v Dyson)

5 requirements for the 3rd class of proprietary estoppel by Fry J (Willmott v Barber)

1. P must have made a mistake
2. P must have expended some money or must have done some act (not necessarily on D's land) in reliance on his mistaken belief
3. D must know of his own right which is inconsistent with the right mistakenly claimed by P
4. D must know of P's mistaken belief of his rights
5. D must have encourage P in his expenditure of money or in his other acts either directly or by abstaining from asserting his legal right

• The above test is not necessarily determinative though highly authoritative (Blue Haven v Tully)
• The above test seems to be only relevant to cases of mistake and case of acquiescence as in Bestkey v Fine Mansion
• To decide whether to use the test is to see whether the facts of the case resembles the facts of Willmott v Barber
• Burden of proof of the five probanda is on P. Difficult for P to prove D's knowledge

A broader test applicable to all 3 classes (Taylors Fashion) (P.98)

• Whether in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment. (p103 3rd para) 
• "Knowingly or unknowingly" makes the test more flexible than the 5 criterion 

Facts of Taylors Fashion

• There are 28 year lease with an option to renew 14 years at the end (unregistered)
• Failure of registering the option (a proprietary interest) means that the interest is not binding
• There was a mutual mistake and no party is to take advantage of the other

Modern approach: 3 elements of proprietary estoppel (Taylors Fashion) (Thorner v Major)
1) Assurance

• Assurance that led the P to believe that he had or would acquire rights over the land in question
• Assurances can be in the form of a direct and positive promise or a mere abstention from asserting one's right 
• A long standing practice, without more, cannot be an assurance (Keelwalk v Waller)
• Requirement: "the meaning of the words or conduct constituting the alleged assurance is clear and unequivocal" (Thorner v Major)
• A clear promise or representation does not have to amount to a binding contract (Inwards v Baker)
• Even if the contract is void for uncertainty it can still be an assurance (Lim Ten Huan v Ang Swee)
• Silent assurance or self-generated expectation NOT assurance (AG v Humphrey Estate) (difference between silent assurance with abstention from asserting one's right?)
• "Subject to contract" can precludes assurance and proprietary estoppel (AG v Humphrey)
• The key question is whether the parties intend and know that they are free to withdraw from the transaction (right to withdraw reserved?) (Kaisilk v Urban Renewal)

2) Reliance

• P acted in reliance on the assurance
• Key question: whether the representations were calculated to influence the judgment of P? (Birkom Investment v Carr)
• The presumption that P relied on the assurance is for D to rebut not P to prove (Birkom Investment v Carr)

3) Detriment

• Detriment needs not be monetary. 
• Detriment can be in the form of other disadvantages not related to land (P.116.8) : failure to reserve a right of way over the land sold; housekeeping in the family house; abandoning home and job in order to live near the owner; setting up house together, having a baby, making payment to househeeping expense (Grant v Edwards)
• Detriment CANNOT be e.g. allowed to put oil tank and flower pots on the wall for many years (Jones v Stones)
• 
  

**3 elements must be look at together not separately (Gillet v Holt)

Lecture on proprietary estoppel

Argument on whether proprietary estoppel is about mistake or expectation originated from Ramsden v Dyson

Tenant at will: a tenant that can be asked to leave at any time, no fixed period tenancy

Ramsden v Dyson - a tenant believed he was having a long fixed term lease but actually he was only a tenant at will

Crabb case
Lord denning p139

Short of an actual promise, if D, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights
Assurance can include actual promise, if D, by his words or conduct

Requirements for a lease & Distinction between a lease and a license

Distinction between a lease and a license

1. A lease confers an interest but not a license 
2. A tenant (with/without) or a licensee with exclusive possession can sue in nuisance (Hunter v Canary). 
3. Essential test to distinguish lease from license is test of exclusive possession. (Mahuvawalla v Iranee)

Requirements for a lease

1. Exclusive Possession 

-Exclusive possession is the right to use the land to the exclusion of all others, including the grantor himself, albeit temporarily and with some restrictions. (Street v Mountford)
-Exclusive possession distinguished from exclusive occupation - attribute of a tenancy v right of sole occupation. 

Difference: Although having exclusive physical occupation, does not have overall control over the use of, and access to, the premises; Because the occupier can be moved around or landlord have unlimited access to the premises in order to provide services.

How to distinguish?

1. If landlord provides service that required the landlord or his servants to exercise unrestricted access to and use of the premises -> NO exclusive possession -> NOT tenants (Street v Mountford)
2. If occupancy does not require services that leads to unrestricted access to and use of the premises -> Likely to HAVE exclusive possession -> YES tenants (Street v Mountford)
3. It is the inability to resist intrusion by the landlord who requires access to supply the services that is the key. (Antoniades v Villiers). If there is such a contract of service but the service was never supplied, the landlord still reserve the right to access the premise, therefore, it is still NOT tenancy. 

Example of NO exclusive possession:

1. If landlord has a right to introduce other licensees to share the premises at a later date (Somma v Hazelhurst). 
2. A term that allows owner to move the occupier to another room within the house (Crancour v Da Silvaesa). 
3. Was not allowed to see visitors and had to comply with directions of warden. (Westminster v Clarke)

Example of exclusive occupation but NO exclusive possession (P. 387.8)

1. Exclusive use of a bunk in a cubicle
2. Students in university halls of residence
3. Lodgers in hotels or boardinghouses
4. Lodgers in a furnished home or serviced apartments and residents in nursing homes
5. Occupiers who provides domestic service in return and pay minimal payment below economic rent (Barnes v Barratt)

NO exclusive possession means NO tenancy conclusively (Lam Man-Yuen v Lucky)
But Exclusive possession does NOT infer a tenancy conclusively (Lam Man-Yuen v Lucky)

The fact of exclusive possession for a fixed term at a rent gave rise to a tenancy unless special circumstances existed which negative such a presumption (Street v Mountford)

Special circumstances beyond exclusive possession (Exclusive possession already established)
1a) Family arrangement thus NO tenancy (So Ho v Chan Chui Yip)
1b) Fact of family relationship but YES tenancy (Nunn v Dalrymple)

2a) Act of friendship or generosity thus NO tenancy (Street v Mountford)
2b) Act of friendship or generosity but YES tenancy (Ramnarace v Lutchman)

3a) NO tenancy if occupant is an object of charity or a service employee occupant (Street v Mountford) because his possession should be treated in law as someone else's possession.
3b) Occupant in cheap housing provided by housing association is NOT object of charity even if occupant agreed not to have tenancy (Bruton v London)
3c) The ultimate question is whether the occupant's right to exclusive possession is referable to a legal relationship of charitable nature other than a tenancy? NO tenancy if it is (Gray v Taylor)
3d) Possibly YES tenancy if service occupancy is simply incidental to, and not contingent on employment (Facchini v Bryson)

Irrelevant factors in determining lease or not
1) Duration of occupancy (Marchant v Charter)
2) Provision of furniture (Marchant v Charter)
3) Payment for the occupancy is called "rent" (Street v Mountford)
4) Potential application of the LTO (Street v Mountford)
5) Look at whether the requirements of a tenancy are fulfilled.; what the occupancy agreement is called -"lease" or "license" is NOT conclusive (Street v Mountford)
6) Professed intention test in Somma v Hazelhurst REJECTED; look at whether the requirements of a tenancy are fulfilled; whether it is expressly intended to be a "lease" or "license" is NOT conclusive (Street v Mountford)
7) Only relevant intention is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent (Street v Mountford)

Control & exclusive possession
-Have to take account of the surrounding circumstances to determine whether the degree of control enjoyed by the occupier is sufficient to conclude that a right of exclusive possession is granted (Street v Mountford)
-Have to determine whether the terms are unrealistic and shams and are intended to cover up the grant of tenancy (Street v Mountford)
-E.g. In Antoniades v Villers, in the agreement, the landlord reserved a right to authorize someone to share or share the flat with the couple occupiers. The term was unrealistic because the flat was specifically for the residence of a couple.

Definition of a lease

A lease is a legal estate.
Legal estate is defined under s2 of CPO as "a term of years absolute in land"
"A term of years absolute in land" is defined under s2 of CPO as including "a term for less than a year, for a year or years and a fraction of a year and from year to year."

Key words in the definition: 1) Term 2) Of years 3) Absolute

1) What is a "term"?

• The lease must be a definite period instead of indefinite.
• Commencement date of the lease must be certain (One Queen v Chan Siu Lan)
• The maximum duration of the lease must be certain at the date of commencement. (Lace v Chantler)
• (What if duration of lease is not certain but maximum duration is?)

2) What is "of years"?

A lease can be for ANY fixed duration, let it be 999 years or 99 days.
(Can a lease be e.g. every other day for half a year)

3) What is "absolute" ?

A literal interpretation of absolute means that the term of years must not be determinable on any condition. However, since this term is taken from England and aligning with the legislative intention, absolute must also mean a term of years liable to determination by notice, re-entry, operation of law...

4) Application of "term" in different types of lease

• Perpetually renewable lease: A lease which gives the tenant a right to renew the lease at the end of the term on identical terms and conditions. Not likely to be effective unless there are express words to that effect. (Marjorie v Barclay)

• Periodic tenancy: Rule of certainty of term in Lace v Chantler is also applicable (Prudential v London)

Glossary

• Interesse termini: A tenant have no legal estate until he commits the entry. Before that, he merely has the right to take possession in contract.

• Reversionary lease: A lease commencing at a future date.