Co-ownership and Joint Tenancies Law

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Questions and Answers

What happens to the share of a deceased co-owner in a tenancy-in-common?

The share passes according to what is specified in their will.

What key unity is required in a co-ownership arrangement?

The only required unity is the unity of possession.

How has the presumption of co-ownership changed under modern law compared to common law?

The presumption has shifted in favor of a tenancy-in-common instead of a joint tenancy.

What must be included in the language of a disposition to create a joint tenancy?

Specific wording such as 'as joint tenants' or a clear intent indicating a joint tenancy. Signup and view all the answers

Who are the entities that, when granted property, will create a joint tenancy regardless of the presumption?

Executors, administrators, trustees, and mortgagees. Signup and view all the answers

What is necessary for a co-tenancy to be created in the first place?

There must be a 'disposition' such as a conveyance or a transfer via will. Signup and view all the answers

Can dispositions be made orally, according to modern legal standards?

Yes, dispositions do not necessarily need to be in writing, especially for leasehold interests of three years or less. Signup and view all the answers

What constitutes a 'disposition' in the context of co-tenancies?

A disposition can include a conveyance, transfer, or will. Signup and view all the answers

What is the main legal significance of the time of execution of documents affecting land interests?

It has no legal significance except in cases involving at least two unregistered interests. Signup and view all the answers

How do registered interests differ from unregistered interests in terms of legal status?

Registered interests are 'legal' in nature, while unregistered interests are 'equitable'. Signup and view all the answers

Under what conditions can a claimant seek compensation for deprivation of an interest in land according to s 188?

A claimant can seek compensation if deprived due to fraud, incorrect registration, errors, or negligence by the registrar. Signup and view all the answers

What is the limitation period for claiming compensation under s 188C?

The limitation period is 12 years from the time the affected party knew or ought to have known about the deprivation. Signup and view all the answers

What role do unregistered interests play within the Torrens system?

They serve as equitable interests, although their status under the Torrens system differs from that under common law. Signup and view all the answers

What is the prima facie rule concerning unregistered equitable interests?

The prima facie rule states that the first in time prevails unless there is some disentitling conduct. Signup and view all the answers

What happens to the rights of a claimant once the State compensates them for deprivation?

The State is subrogated to the rights of the claimant against any other person related to the deprivation. Signup and view all the answers

Can personal injury claims be lodged under the compensation provisions of s 188?

No, compensation cannot be sought for personal injury under s 188. Signup and view all the answers

What specific knowledge did Arcape have regarding the trust property Lot 3?

Arcape had knowledge that they received the trust property and held Lot 3 on trust for the council. Signup and view all the answers

Why was the argument made by Say-Dee regarding the first limb of Barnes v Addy rejected by the court?

Say-Dee's argument was rejected because mere information could not amount to trust property and lacked confidentiality. Signup and view all the answers

What role did the Title Search play in Arcape's understanding of Lot 3?

The Title Search revealed that the Garners remained the registered proprietors of Lot 3, confirming their trust relationship. Signup and view all the answers

How did the Queensland Court of Appeal establish the existence of a resulting trust in the case discussed?

The court deemed that the Garners held Lot 3 on a bare trust upon payment of the purchase price, indicating a resulting trust by operation of law. Signup and view all the answers

What was the significance of the surveyors peg in relation to Lot 3?

The surveyors peg clearly marked the area of Lot 3 designated for the council, signifying its importance in establishing trust. Signup and view all the answers

What was Say-Dee's claim regarding the confidential information held by the Joint Venture?

Say-Dee claimed that the information indicated surrounding property purchases could lead to council approval, constituting trust property. Signup and view all the answers

Describe the court's view on the confidentiality of the information in Say-Dee's case.

The court found that the information was not confidential since Say-Dee was already aware of the council's rejection and the reasons behind it. Signup and view all the answers

What implication does knowing receipt of trust property have on the first limb of Barnes v Addy?

Knowing receipt can enliven the first limb of Barnes v Addy, which pertains to receiving and being chargeable with trust property. Signup and view all the answers

What is the significance of 'knowingly receiving trust property' under the in personam exception?

It establishes liability for third parties who breach a trust by receiving trust property in a manner inconsistent with the rights of the beneficiary. Signup and view all the answers

What are the two limbs of the Rule in Barnes v Addy?

'First Limb' involves receiving trust property, and 'Second Limb' entails assisting in a dishonest and fraudulent design by the trustees. Signup and view all the answers

According to Atkinson J in Tara Shire Council v Garner, what constitutes sufficient knowledge for the First Limb of Barnes v Addy?

Sufficient knowledge includes actual knowledge, willfully shutting one's eyes, recklessly failing to inquire, and knowledge of circumstances indicating the facts. Signup and view all the answers

In Tara Shire Council v Garner, what is indicated about property held on constructive trust?

It suggests that a party who retains trust property while knowing it violates a beneficiary's rights is holding that property on constructive trust. Signup and view all the answers

What level of knowledge is unnecessary to establish liability under the first limb of Barnes v Addy?

Knowledge that merely places a person 'on inquiry' is insufficient to establish liability. Signup and view all the answers

What case established the classification of knowledge relevant to the First Limb of Barnes v Addy?

The classification was established in Baden v Societe Generale. Signup and view all the answers

What role does honest and reasonable inquiry play in determining knowledge under the First Limb of Barnes v Addy?

It serves as a benchmark to assess whether an individual acted with the necessary diligence and awareness required by the law. Signup and view all the answers

How does the court's view on constructive trust influence third parties receiving trust property?

It places an obligation on them to understand their legal position and the rights of beneficiaries when they knowingly receive such property. Signup and view all the answers

What is the significance of the rule in Walsh v Lonsdale in relation to equitable estates?

It establishes that equity considers what ought to be done when formal requirements under statute have not been fully met. Signup and view all the answers

In the context of competing equities, how do equitable estates differ from mere equities?

Equitable estates take priority over mere equities, as established by the Phillips v Phillips approach. Signup and view all the answers

Why could Specific Performance not be relied upon in Tanwar Enterprises v Cauchi?

Specific Performance could not be relied upon because the vendors did not contribute to the purchaser's inability to complete the contract. Signup and view all the answers

What is meant by 'mere equities'?

Mere equities refer to rights emanating from a property right that are essentially personal and do not constitute actionable claims. Signup and view all the answers

What approach did Lord Chancellor Westbury advocate for resolving priority disputes between competing equities?

He advocated for distinguishing between Equitable Estates and mere Equities, with Equitable Estates having priority. Signup and view all the answers

How do the courts generally approach competing equities according to the Better Equity principle?

Courts consider the merits of the competing equities, with the better equity taking priority. Signup and view all the answers

What remedy may become available when there is a significant compliance with formal requirements despite lack of strict adherence?

Specific Performance may become available as a remedy. Signup and view all the answers

What two crucial issues were identified in the case of Phillips v Phillips regarding the exercise of power of sale?

The issues were whether the exercise of power of sale constituted fraud and the priority between MLC Nominees' equitable right and Hotel Terrigal's interest. Signup and view all the answers

Study Notes

Co-ownership

There is no right of survivorship in co-ownership.
The deceased co-owner's share passes according to their will.
Co-owners can dispose of their share without impacting the nature of ownership.
The only essential unity in co-ownership is the unity of possession.

Creation of Joint Tenancies and Tenancies-in-Common

A statutory presumption in favour of a tenancy-in-common exists under the Property Law Act 1974 (Qld).
The presumption applies to both legal and equitable interests.

When the Presumption Does Not Apply

A joint tenancy will be created if there is specific wording or clear intent indicating a joint tenancy, such as the use of words like "as joint tenants" or "jointly".
The presumption does not apply to grants made to executors, administrators, trustees, or mortgagees.
The presumption also doesn't apply to grants of property for a business partnership.

Requirement of a 'Disposition'

A co-tenancy can be created through a disposition, which can include a conveyance or transfer via will.
Dispositions do not necessarily need to be in writing.
Leasehold interests of three years or less can be created orally.

Creation of Equitable (Beneficial) Tenancies-in-Common

Registered interests are considered legal in nature.
Unregistered interests are considered equitable in nature.
The time of execution of the documentation effecting a transfer, lease, or other interest in land, does not have any legal significance except in circumstances involving at least two unregistered interests.

Compensation Scheme

Compensation is available from the State if a person is deprived of an interest in land or suffers other loss or damage, through no fault of their own.
Deprivation can arise due to fraud, incorrect title creation, incorrect registration, errors in indefeasible title, tampering with the freehold land register, loss or destruction of documents, negligence or misfeasance of the registrar, or the exercise of a power by the registrar without connection to the person.
Compensation cannot be sought for personal injury.
There is a 12-year limitation period for seeking compensation, starting when the party knew or ought to have known the relevant circumstances.
The State is subrogated to the rights of the claimant against any other person concerning the deprivation, loss, or damage.

Unregistered Interests under the Torrens System

Unregistered interests have a role under the Torrens system as equitable interests.
The first in time prevails rule applies to unregistered interests, unless there has been disentitling conduct.

Knowing Receipt of Trust Property / Assistance in Breach of Trust under the In Personam Exception

The courts are willing to apply the in personam exception in situations where a registered proprietor has breached a trust by knowingly receiving trust property or assisting in a fraudulent design.
This is based on the two limbs of Barnes v Addy.

The Rule in Barnes v Addy

There are two instances where a third party can be held liable for breach of trust:
- Receiving and becoming chargeable with some part of the trust property (First Limb).
- Assisting with knowledge in a dishonest and fraudulent design of the trustees (Second Limb).

The First Limb

A person who knowingly receives and retains trust property inconsistently with the beneficiary’s rights is deemed to hold that property on constructive trust.
Knowledge required for the first limb includes:
- Actual knowledge
- Wilfully shutting one’s eyes to the obvious
- Wilfully and recklessly failing to make inquiries an honest and reasonable person would make.
- Knowledge of circumstances indicating the relevant facts to an honest and reasonable person.

The Rule in Walsh v Lonsdale

If the formal requirements under statute have not been strictly complied with, an Equitable Estate may be inferred if:
- Most of the formal requirements have been satisfied.
- Specific Performance is available as a remedy.
The rule states that "Equity regards done as ought to be done".

Competing Equities

There have been two main approaches to resolving disputes involving competing equities:
- Phillips v Phillips/Latec Approach: Dividing into Mere Equities and Equitable Estates, with Equitable Estates taking priority.
- Barry v Heider/Rice v Rice/Breskvar v Wall/Issa v Owens Approach: Considering the Merits of the Competing Equities, with the better equity taking priority, alongside some variations.

Equitable Estates take priority over Mere Equities

Equitable Estates are considered to have stronger rights than Mere Equities when it comes to priority disputes.
In Phillips v Phillips, the court held that considering the nature of each equity could resolve priority disputes.
This was affirmed in Latec v Hotel Terrigal.
In Latec v Hotel Terrigal, the court considered a situation where:
- An exercise of power of sale was questioned for fraud.
- The priority between two competing equitable interests was at stake.

Mere Equities

Mere Equities represent rights stemming from a property right, but they are essentially personal, such as the right to sue or access to equitable remedies.
Mere Equities can also include beneficial interests such as constructive trusts.

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Description

This quiz covers the principles of co-ownership, including the creation of joint tenancies and tenancies-in-common under property law. Explore concepts such as the lack of survivorship rights in co-ownership and the statutory presumption favoring tenancy-in-common in Queensland. Test your knowledge on how these legal constructs influence property rights and dispositions.