Land Property Rights

A number of prominent cases concerning land and property rights, which have mainly involved women, have been addressed throughout the previous few decades. The above scenario states fundamental principles within the rule of law that have been raised in past cases. In consequence, this paper will be considering various different outcomes of important court decisions, along with the relevant Acts and law that accompany such proceedings. In the scenario, it appears that John, the trustee want to sell Fairview Cottage, however Mary, the beneficiary objects to this.

Following this, considerations will be given to the given scenario, and what advice should be given in such circumstances.

Land law recognises two forms of property ownership, which have been defined as legal ownership and beneficial or equitable ownership. Beneficial ownership concerns a person's right to live in and use the property, along with the right to any financial gains when the property is sold. The result of beneficial ownership can, therefore, significantly affect the sale of a property.

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The issues concerning beneficial interest were highlighted in Turton v. Turton (1988), during which the Court agreed on the notion that beneficial interests were dependent upon the intent of both parties when purchasing the property. In Walker v Hall (1988), LJ Nourse stated, “It must always be remembered that the basis on which the court proceeds is a common intention, usually to be inferred from the conduct of the parties; that the claimant is to have a beneficial interest in the house. In the common case, where the intention can be inferred only from the respective contributions, either initial or under a mortgage, to the cost of its acquisition, it is held that the house belongs to the parties beneficially in proportions corresponding to those contributions” (As quoted in Family Law Week, 2007).

In order to establish a beneficial interest the claimant needs to prove “a resulting trust by showing that it would be inequitable for the legal owner to claim a sole beneficial ownership” (Privy-council.org.uk, 1999).

A resulting trust is where ones share of the property is proportionate to their contribution made. It Arises due to the intention of the parties. In the case of Drake v Whipp (1995) 28 HLR 531, Peter Gibson LJ stated that it is crucial to distinguish between the different types of trusts. He argued that the distinction was of ‘crucial importance in deciding the size of the claiments size' in terms of contributions made. The case of Bull v Bull [1955] 1 QB 234 shows the intention of the parties can be determined by the contribution made. In this case Lord Denning in the Court of Appeal stated that the share of the property should be ‘in his or hers respective contribution' and also explains that each of the parties is entitled to the ‘possession of the land' if they gave a respective contribution. Peter Gibson LJ in Curley v Parks [2004] EWCA Civ 1515 further explains that only contributions made at the time are relevant. Later contributions are not relevant for a resulting trust.

In this scenario, Mary has contributed 50% of the purchase price. The contributions were made with the intention of the property being used as a family home for the couple and their 3 children. Thus she has an equitable/beneficial interest under a resulting trust. It is also obvious that the contribution was made at the time of purchase, so a resulting trust will be applicable for Mary.

Once its established somebody has a equitable/beneficial interest i.e a resulting trust, it is also important to note if they are in actual occupation, if so then their interests will be overriding. There is no stautory definition of what is meant by actual occupation. Actual occupation was defined by Lord Wilberforce in Williams & Glyn's Bank Ltd. v. Boland [1981] as ‘some physical presence with some degree of permanence'. This was further confirmed by Lord Oliver in Abbey National Building Society v Cann and Another [1991] 1A.C. 56 where he further stated the emphasis on the degree of permanence. Lord Oliver also discussed when the claimant must be in actual occupation. He said ‘actual occupation required to support such an interest as a subsisting interest must exist at the date of completion of the transaction giving rise to the right to be registered'. The House Of Lords also said that purchaser is bound by all overriding interests, thus giving more rights to the current occupier. The case of Ferrishurst Ltd v Wallcite Ltd [1991] further indicates the necessities for an overriding interest. Once an overriding interest is shown then he/she will have greater rights.

In this scenario Mary ‘lives at Fairview Cottage' which indicates that she lives there with a ‘degree of permanance'. She also fulfils Lord Oliver's criteria because she still lives at Fairview Cottage along with her children. Once actual occupation and beneficial interest are proven then a overriding interest will be present and Mary's rights will be greater than any other persons. The Land Registration Act 1925 (LRA) confirms this, where it states. “The rights of every person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and rights are not disclosed”.

Another important topic to discuss is the issue of overreaching. In City of London v. Flegg (1988), the court ruled “that the Fleggs had no interest in the house once the payment had been paid to the Maxwell-Browns, since their interest had been overreached” (Todd, 1996). In this case, Mr and Mrs Flegg claimed a beneficial interest in the property by virtue of s.70(1)(g) of the LRA 1925. According to Todd (1996), this “... decision would probably be different today, following the enactment of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), because overreaching would no longer occur.” Now, overreaching would only occur where the money is paid to atleast two trustees. Overreaching doesn't occur where the money is only paid to 1 trustee as seen in Williams & Glyn's Bank Ltd. v. Boland (1981). This led to Lord Wilberforce making the following statement;

‘a husband or a wife (in each actual case a wife) who has a beneficial interest in the matrimonial home, by virtue of having contributed to its purchase price, but whose spouse is the legal registered owner, has an 'overriding interest' binding on a mortgagee' (Wilberforce, 1980. As quoted by Mary Rose Plummer, 2007).

In this scenario it is possible a potential purchaser may be able to overreach Mary's interest if money is paid to atleast two trustees. However, it is unlikely that Mary's interests will be overreached as there is only 1 trustee i.e. John.

The rights of an occupant are dependant upon their legal status in relation to both the ownership of the given property and the other party. Individuals that are either married or registered in a civil partnership, according to British law, are automatically entitled to occupancy rights. In consequence, even when a spouse is not mentioned in the title deeds, he or she still has a right to live in the matrimonial home, as stated by the Family Law Act 1996. S.30(1) (FLA) , where the spouse can occupy house if owned by other spouse. However, this right is dependant upon where a divorce or dissoluteness of a civil partnership doesn't occur.

In consequence, therefore, a person who is not on the title deeds, does hold certain occupancy rights. S. 31(10)(a) FLA 1996 states that matrimonial home rights are minor interests. For a minor interest to be protected, it must be registered by entry on the register of a notice. A notice is defined by the LRA 2002. An entry of a notice will protect the interest from any subsequent purchasers. If a notice isn't registered then ones right/interest may become void.

As the property is legally owned by her spouse, Mary has the right to occupy it. In order to occupy the house however, she must register this right, by submitting a notice on the register. . It can also be argued that her interest as a spouse is only a minor interest, in relation to this a minor interest must also be registered under S. 29 LRA 2002. If this interest is not registered then it will not be binding.

In addition, not only is Mary physically present, but she also holds clear occupancy rights, which include the right to exclude all those who do not hold the same rights. Fairview Cottage is clearly a matrimonial home, which was bought with the intention of being inhabited by both spouses, along with any existing or future children, of whom all would have a beneficial interest within the property.

The fact that Mary is married to John, that they have three children, and has an equitable interest in the property as that she contributed financially towards the purchase of the property is clearly in Mary's favour as stated in Family Law Week 2007 where it said “If you are married or in a civil partnership, your spouse or civil partner cannot sell the family home without your permission, even if your name is not on the title deeds”

In addition, when considering the circumstances outlined within the given scenario, it is evident that Mary and John bought the house as a matrimonial home in which they intended to raise their family. As the couple are still legally married the house is still the family home, so the intention is still ongoing.

S.14 of TOLATA 1996 lets anybody who has any type of interest in trust property to make an application for sale. In practicality, Mary can apply to the court to prevent John selling the house, or John can apply for the court to grant permission for sale. Even a potential purchaser wishing to buy the house can apply. As outlined in TOLATA 1996, matters referring to determining an application in accordance with section 14 are dependent on are stated in S.15;

• S.15 (1)(a) The intention of the individuals in attaining the property.

• S.15 (1)(b) The purposes or reasons for purchasing the property.

• S.15 (1)(c) The welfare of legal occupants, including children.

The intentions of John and Mary when purchasing Fairview Cottage, as this paper has clearly demonstrated, was to provide a matrimonial home, which indicates that both had a common intention. The issue of matrimonial home is further discussed in S30 Family Law Act 1996, whereby a spouse has the right to occupy a property is he/she has a beneficial interest. Mary successfully fulfils this criteria. As S.15 (1)(a) and S.15 (1)(b) are still in existence, the court are likely to find in favour of Mary. They should prevent John from forcing a sale upon her.

In addition to this, and in reference to the third factor S.15 (1)(c), the interest of the children is also and seen as an important consideration when considering beneficial applications. In the case of Re Evers' trust [1980], LJ Omerod stated that it is important to underlay the importance of intention of the trust. In this scenario it was to prvide a family home. He further states that if the children are not mature it would be wrong to order a sale. This is further reiterated in the case if Williams JW v Williams MA [1976]. Therefore in this scenario, if the children are young, then the court is likely to find in favour of Mary, though if the children are mature then that fact should aid John. The ages of the children are unknown. Also, it is not sure what age is considered as ‘mature' (it could be 18 or 21). If any of the kids are under 18, then a ruling in favour of Mary is likely. However, Judge Wroath in the case of TSB Bank plc v Marshall & Others [1988] stated that even if the children are considered as adults, the courts may not take this issue into consideration when deciding on the sale of a property.

Article 8 of the Human Rights Act (1998) states, “Everyone has the right for his private life and family life, his home and his correspondence,” which infers that children, who are profoundly affected by change brought about by parental disputes such as that portrayed within the given scenario, are protected by law. However the courts are not as likely to consider this in practicality. The courts are more likely to consider S.15 TOLATA 1996. However, as John is the legal owner/trustee of Fairview cottage, it is possible for him to sell under S14 TOLATA 1996 whereby the courts can grant him an application for sale. The courts in doing so would consider the factors listed in S.15 TOLATA 1996, to determine what action to take.

In conclusion, it is evident that Mary has equitable interest of the property. An equitable interest together with actual occupation gives her an overriding interest. If she has this overriding interest then her position as a beneficiary would be even stronger, as her interests would override the interests of any other persons. However it is possible a potential purchaser may be able to overreach her interest. This is only applicable to where money is paid to two trustees, in this scenario John is the only trustee so it is unlikely that this will occur. If John wishes to evict Mary then he must apply under S. 14 TOLATA 1996. The courts will then consider the factors in S. 15 and any other factor it wishes to make a decision in regarding the sale. However, as outlined above it is unlikely that John will be successful. Although John is legally the sole proprietor of Fairview Cottage, the circumstances surrounding the purchase of the property strongly indicate that Mary is in a stronger legal position. The matrimonial status of the couple, for example, the fact that Mary significantly contributed towards financing the project, the original intentions of setting up a matrimonial home, and the presence of children, all indicate Mary's right to beneficial ownership.