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					      Co-ownership

       Cameron Stewart
(thanks to Jim Helman and Shae
  McCrystal – errors are mine)

           (c) Cameron Stewart
                Joint Tenancy

 In a joint tenancy each of the joint tenants has an
   entitlement to the whole property. There is no
   distribution of any particular share of the
   property to any of the joint owners and no joint
   owner can say that any part of the property
   belongs to that joint owner.
The 2 features that characterise a joint tenancy and
   separate it from a tenancy in common are:
• The four unities
• •The right of survivorship
                      (c) Cameron Stewart
                Unity of title

• The interests of joint tenants must be created
  in the same instrument or dealing. It is not
  possible to create a joint tenancy between co-
  owners who acquire their interests by
  separate instruments or dealings. The creation
  of interests by separate instruments or
  dealings results in the creation of a tenancy in
  common.

                     (c) Cameron Stewart
                Unity of title

• The interests of joint tenants must be created
  in the same instrument or dealing. It is not
  possible to create a joint tenancy between co-
  owners who acquire their interests by
  separate instruments or dealings. The creation
  of interests by separate instruments or
  dealings results in the creation of a tenancy in
  common.

                     (c) Cameron Stewart
           Unity of possession
• This requires that the co-owners be entitled to
  possession of the whole property, to be
  enjoyed together with the other co-owners.
• There is no claim for any particular part of the
  land.




                     (c) Cameron Stewart
               Unity of time
• This requires that the interests of all joint
  tenants vest at the same time. This is usually
  satisfied if the interests are created at the
  same time.




                     (c) Cameron Stewart
              Right of survivorship
• This is an essential feature of a joint tenancy. If there is no right
  of survivorship then there cannot be a joint tenancy. If a joint
  tenant dies then the property remains in the ownership of the
  other joint tenants because they have always been entitled to
  the whole property.
• Rather than saying that a surviving joint tenant has acquired the
  interest of the joint tenant who died, it is perhaps more correct
  to say that the interest of the joint tenant who dies has been
  extinguished. The interest of a deceased joint tenant is no
  interest at all, and there is nothing that forms part of the estate
  of the deceased joint tenant.
• The right of survivorship in the surviving joint tenant cannot be
  defeated by the joint tenant who dies leaving his or her interest
  by will.
                              (c) Cameron Stewart
              Corporations?
• Section 25 of the Conveyancing Act provides
  that Corporations can hold interests as joint
  tenants. If the company is dissolved then the
  right of survivorship comes into effect.




                    (c) Cameron Stewart
                Who dies first?
• Section 35 Conveyancing Act provides that where
  it is impossible to tell, the older person dies first
  and the younger dies second.
• There are exceptions to the section.
   – Only applies to title to property.
   – Only raises a presumption, rebuttable by evidence
     that the deaths occurred in a particular order, not
     according to seniority.
   – Only applies where the death of the person is known
     to have occurred, and is not presumed.

                        (c) Cameron Stewart
               Who dies first?
• In Hickman v Peacey [1945] AC 304 a basement
  air raid shelter was blown up by a high explosive
  bomb. At the time of the explosion there were
  five persons in the shelter as follows:-
  (1) Mabel Price-Jones, 52, the occupier of the house;
  (2) her daughter;
  (3) Elizabeth Sarah Parke, 70, housekeeper for Randolph
    Grosvenor;
  (4) Randolph Grosvenor, 73, the first testator; and
  (5) Edward Grosvenor, 66, the second testator

                       (c) Cameron Stewart
                 Who dies first?
• The difficulty in the case occurred because the Will of
  (4) left property to (5) if he were “surviving at the date
  of my decease” and also to (3). The Will of (5) left
  property to (1), (2) and (3) if they survived him.
• The Court was asked to determine whether under the
  English Law of Property Act 1925 the deaths occurred
  “in order of seniority”. Cohen J at first instance held
  that there was no evidence that they died
  simultaneously and that they must be presumed to
  have died in order of seniority. The Court of Appeal
  reversed this decision, holding that their deaths were
  simultaneous

                         (c) Cameron Stewart
                   Who dies first?
• The matter was then heard by the House of Lords. The
  House of Lords held:
   ... that in the absence of such evidence (that is, evidence to show
       whether any of the deceased had survived the others) they had
       died in circumstances rendering it uncertain which of them
       survived the other or others within the meaning of s184 of the
       Law of Property Act 1925 and that accordingly in the
       administration of their estates by the executors of the
       respective Wills, the younger of the deceased should be
       deemed to have survived the elder.
   An inference, drawn from the facts, that they died simultaneously
       would not make the section inapplicable and in any case would
       not be justified on the facts disclosed.



                             (c) Cameron Stewart
                Presumed dead?
• Halbert v Mynar [1981] 2NSWLR 659
• Charaus was made on presumption of death only. The
  Grant stated “Deceased presumed to have died: On or after
  7th June 1972.”. It was necessary to apply to the Court for
  leave to distribute the Estate and for directions as to those
  parts of the Will that should be complied with in those
  directions.
• John Charaus was married once only to Emily Charaus in
  about 1939 there being one child of the marriage, Blanka
  Olga, born on 2 June 1945. Blanka married Mirek Mynar on
  3 April 1971.
• On 7 June 1972, John Charaus and Blanka disappeared and
  have not been seen or heard since.

                          (c) Cameron Stewart
                Presumed dead?
• Waddel L J found that s.35 did not apply where one of the
  deaths is presumed under the Common Law. He said:
• It is unlikely that the legislature intended the Section to
  determine arbitrarily the order of death of persons whose
  deaths may have been separated by many years.
• As John Charaus and Blanka disappeared in June 1972 and
  Emily Charaus (John’s wife) died in October 1973, it is
  difficult to see how the Court could have come to a
  conclusion that he was presumed to have died between
  June 1972 and October 1973 when there was no evidence
  before the Court that he had died at all and the Grant of
  Probate of his Will was made on the presumption of death
  after a period of 7 years from June 1972 elapsed.

                          (c) Cameron Stewart
            Tenancy in common
• In contrast to a joint tenancy, a tenancy in common has
  the co-owners owning interests in the land in
  proportion to their interest. If co-owners are tenants in
  common in equal shares then they each own a one half
  interest in the property.
• If they own unequal shares then they own the property
  in the proportions they are stated as holding in the
  property. Eg: three quarters/one quarter.
• The share of a tenant in common is said to be an
  “undivided” share. It is a separate share but not a
  physically divided share.

                        (c) Cameron Stewart
      Creation of Co-ownership
• Before the Conveyancing Act 1919 the
  common law presumed that a conveyance to
  two or more persons created a joint tenancy.
  This presumption could be displaced by
  specific words such as “a one half interest to
  each of A & B” , “to be divided equally” “to my
  five sons equally”
• Rentoul v Rentoul [1944] VLR 205

                    (c) Cameron Stewart
      Creation of Co-ownership
• Equity preferred tenancy in common
  – Unequal contribution to purchase price
  – Unequal contribution to mortgage liability
  – Unequal contribution to business assets – the
    right of survivourship has no place amongst
    merchants

• Resulting Trusts
• Equity follows the law on a 50:50 input

                      (c) Cameron Stewart
                   Creation
• Section 26(1) of the Conveyancing Act provides
  that:
• In the construction of any instrument coming into
  operation after the commencement of this Act a
  disposition of the beneficial interest in any
  property whether with or without the legal estate
  to or for two or more persons together
  beneficially shall be deemed to be made to or for
  them as tenants in common, and not as joint
  tenants.

                     (c) Cameron Stewart
          Delehunt v Carmody
• In Delehunt v Carmody (1986) 161 CLR 464
  Francis Carmody and Ethel Delehunt contributed
  equally to the purchase price of a property that
  was registered only in the man’s name. They
  agreed that the land would be owned in equal
  shares and that at some time in the future it
  would be put in both names. The matter came
  before the Court after Francis Carmody died
  intestate and letters of administration were
  granted to Heather Carmody, his estranged wife.

                     (c) Cameron Stewart
          Delehunt v Carmody
• At first instance Wooton J held that there was
  a trust and that Francis Carmody held the
  property upon trust for himself and Ethel
  Delehunt as joint tenants in equity. On appeal,
  the Court of Appeal disagreed and found that
  there was a trust but that it was a trust for the
  parties in equal shares as tenants in common.



                     (c) Cameron Stewart
         Delehunt v Carmody
• The matter then came before the High Court
  to consider the question “that the Court of
  Appeal erred in holding that s.26 of the
  Conveyancing Act 1919, as amended (NSW)
  displaced the equitable presumption that
  where two persons advance equally the
  purchase monies for a property they hold as
  equitable joint tenants”.

                   (c) Cameron Stewart
           Delehunt v Carmody
• Gibbs CJ:

• It would be indeed surprising if the rules of equity
  required the courts to follow a rule of the
  common law that no longer existed and in doing
  so to reach a result which equity generally tried
  to avoid. However the doctrines of equity are not
  so inflexible. If equity follows the law, it will
  follow the rules of law in their current state.
                      (c) Cameron Stewart
       Real Property Act 1900
100 Registered co-tenants
(1) Two or more persons who may be registered as
  joint proprietors of an estate or interest in land
  under the provisions of this Act, shall be deemed
  to be entitled to the same as joint tenants

Inconsistency?
“registered” as joint tenants or registered as “joint
  proprietors”

                     (c) Cameron Stewart
      Rights between Co-owners
• Right to Possession
• Because co-owners have unity of possession,
  each is entitled to occupy the whole land and
  there is no concept of trespass by one co-owner
  against another. However, if one co-owner ‘ousts’
  the other co-owner (and we will see what this
  means later) such that they deny a co-owners
  right to possess the property, they can bring an
  action in trespass seeking repossession of the
  property - claiming that they have been ejected.

                     (c) Cameron Stewart
       Rights between Co-owners

• It also follows that one co-owner cannot grant a right
  of possession to another person that would exclude
  the right to possession held by all the other co-owners.
  So if for example one co-owner grants a lease, this
  would not prevent the other co-owners from exercising
  their right to possession unless they were also parties
  to the lease. In this situation the co-owner has only
  given the tenant the right of possession that they
  themselves have – and that is a right to possession
  which is shared with the other co-owners.

                        (c) Cameron Stewart
     Rights between Co-owners

• Right to Value of Repairs / Improvements
• Where one co-owner voluntarily undertakes
  repairs or improvements to a jointly owned
  property they cannot force the other co-
  owners to contribute to those repairs or
  improvements unless they have reached
  agreement on the repairs or improvements
  first.

                   (c) Cameron Stewart
        Rights between Co-owners
• In Leigh v Dickeson (1884-1885) LR 15 QBD 60, a co-owner who
  was in possession of jointly owned property expended monies
  on repairs. The co-owner then sought a contribution to the cost
  of those repairs from his co-owner. The court refused to grant
  the request finding that there was no duty on co-owners to
  repair their property – and that they could, if they chose, allow
  the property to decay. The court said that if one co-owner makes
  a purely voluntary payment, then the other co-owners are under
  no legal obligation to reimburse them – even though the value
  of their property is increased. To find otherwise would allow one
  co-owner to force the other to expend monies against his or her
  will. Note Lindley J at 69: “Tenancy in common is a tenure of an
  inconvenient nature, and it is unfit for persons who cannot agree
  among themselves”.          (c) Cameron Stewart
        Rights between Co-owners
• Cotton, LJ:
  As to the claim for improvements, it has been urged that no
  tenant in common is entitled to execute improvements upon
  the property held in common, and then to charge his co-
  tenant in common with the cost. This seems to me the true
  view, and I need not further discuss the question as to
  improvements. As to the question of repairs, it is to be
  observed that when two persons are under a common
  obligation, one of them can recover from the other the
  amount expended in discharge or fulfilment of the common
  obligation; but that is not the position of affairs here: one
  tenant in common cannot charge another with the cost of
  repairs without a request, and in the present case it is
                             a request.
  impossible even to imply(c) Cameron Stewart
       Partition and adjustment
• The only remedy for the improving co-owner
  would be to apply for an order of partition forcing
  the sale of the property
• The court of equity would intervene in order to
  make an adjustment of the property in favour of
  the co-owner that spent money improving the
  property.
• However, while the co-ownership exists, there is
  no remedy and no right to get a contribution
  towards the cost of improvements without an
  agreement beforehand.

                      (c) Cameron Stewart
            Equity is defensive
• The High Court in Brickwood v Young (1905) 2 CLR
  387 per Griffith CJ at 396 noted that the equity
  operates defensively – ie – it only arises at the
  end of the co-ownership as a defence against the
  other co-owners asserting their rights to their
  pre-existing legal share without adjustment.
  Equity steps in to prevent the co-owners who did
  not contribute to the value of the repairs and
  improvements from taking the increased value of
  the property without having contributed to the
  cost of those repairs and improvements.

                     (c) Cameron Stewart
              Equity is defensive
• Brickwood v Young (1905) 2 CLR 387 per Griffith CJ at
  396:
  The principle appears to be that the making of
  permanent improvements by one tenant in common in
  sole occupation gives rise to an equity attaching to the
  land, analogous to an equitable charge created by the
  owners for the time being, but enforceable only in the
  event of partition or a distribution of the value of the
  land amongst the tenants in common. There can be no
  reason why such a charge should not run with the land
  in favour of purchasers from the person originally
  entitled to it.

                        (c) Cameron Stewart
             Equity is defensive
• In Brickwood co-owned land was compulsorily
  acquired by the State. In distributing the value of the
  estate one co-owner of the property sought
  contribution from the other 3 co-owners for the value
  of improvements done by that co-owners predecessor
  in title:
• Ie A B and C own land; B does renovations. B sells his
  portion to D. On sale of the whole or partition, D can
  get a contribution for the value of the improvements
  carried out by B. Why given that D didn’t pay for them?
  Because presumably the price D paid for the land was
  increased by the value of the improvements that B did
  – so D in effect purchased B’s equity
                        (c) Cameron Stewart
    What does the improver get?
• Upon sale of the property subject to co-
  ownership, the improving owner is entitled to
  recover either the cost of the improvements
  undertaken to the property OR the increased
  value of the land attributable to those
  improvements – whichever is the LESSER
  amount



                    (c) Cameron Stewart
                  Boulter v Boulter
• Boulter v Boulter (1898) 19 LR (NSW) Eq 135 per Simpson CJ at 137:
• Where an owner of an undivided interest in land spends money on
  improving the property so that on a sale .. it fetches an enhanced
  price, a Court of Equity in dividing the proceeds of sale will not
  allow the other co-owners to take their shares of the increased
  price without making an allowance for what has been expended to
  obtain that increased value … This course of action cannot inflict
  any injustice on the other co owners, for it takes nothing out of
  their pockets, it only prevents them putting into their pockets
  moneys obtained by the expenditure of another person, unless they
  recoup him such expenditure. In no case can the co-owner who has
  improved the property obtain more than his outlay, though such
  outlay may have trebled the value of the property. And, on the
  other hand, the increase in the price obtained is the limit of what
  he can receive, though his actual outlay may be far larger.


                             (c) Cameron Stewart
       McMahon v Public Curator of
             Queensland
• McMahon v Public Curator of Queensland [1952]
  St R Qd 197 Macrossan C.J. referred to Leigh v
  Dickeson and said:
• ... It is clear, I think from this, that the amount to
  which a co-owner making improvements may be
  entitle against another co-owner in taking the
  accounts in a partition action, is limited to the
  actual cost of the improvements, and if the
  present value of the increment to the property is
  less than the actual cost of the improvements, he
  is further limited to that present value.

                       (c) Cameron Stewart
                    Squire v Rogers
• Squire v Rogers (1979) 39 FLR 106 : Squire and Rogers were co-
  tenants of land in Darwin under a perpetual lease. The lease
  required that in one year there be buildings on the land of a total
  value of not less than $15,000.00. In June 1963 Rogers left Australia
  and voluntarily left the land in the occupation of the Squire with the
  expectation that Squire would spend the money necessary to
  comply with the covenant contained in the lease. Squire did so by
  constructing flats and other improvements and carried on a
  business of providing accommodation in flats, rooms and caravans
  and by letting caravan sites. Much was destroyed by Cyclone Tracy
  but then Squire rebuilt. Rogers returned to Australia in 1976 and
  commenced proceedings for the sale of the estate of the appellant
  and the respondent and that an account be taken.




                              (c) Cameron Stewart
                Squire v Rogers
• The defendant estimated that he had spent $100 000
  on the property over the course of the 14 years. An
  independent valuation estimated that the
  improvements had only improved the value of the land
  by $15 000 – so when the property was sold, he was
  entitled to take $15 000 out of the proceeds before the
  remainder was divided between the two co-owners. He
  received nothing for his other $85 000 from his co-
  owner. There is also an interesting aspect of this case
  relating to rents and profits from co-owned land which
  we will return to when we look at entitlement to rents
  and profits.


                        (c) Cameron Stewart
                 Mortgage Payments
• Improvements are not limited to physical improvements and can include
  mortgage payments because mortgage payments increase the equity in
  the property and the amount available for distribution
• HW – if you want mortgages payments on dissolution then you must do
  equity
• In Ryan v Dries [2002] NSWCA 3 (6 February 2002) the Court of Appeal
  considered issues of accounting in respect of occupation, accounting in
  respect of repairs, maintenance, and outgoings, including mortgage
  repayments. Hodgson JA at [70] said:
• If a co-owner makes a claim for contribution to mortgage payments in
  reliance purely on a legal right, with no reliance on equitable principles,
  then it would seem that the co-owner is not seeking equity and is not
  required to do equity. However, if the co-owner does rely on equitable
  principles in making such a claim, in my opinion the co-owner is seeking
  equity and is required to do equity, no less than if allowance for
  improvements was being sought


                                 (c) Cameron Stewart
            Occupation Rent
• If one co-owner goes into occupation of the
  property they are not obliged to pay rent or
  an occupation fee to the other co-owners. This
  is because co-owners are seised of the entire
  estate and each has a present right to
  possession of the whole property (along with
  any other co-owner who chooses to occupy it
  as well).

                    (c) Cameron Stewart
               Occupation Rent
• Luke v Luke 36 SR (NSW) 310, John Luke died leaving
  his estate subject to a life tenancy in favour of his
  widow with the remainder to his two daughters in
  equal shares as tenants in common. John Luke’s widow
  died in 1915 and Laura, one of the daughters, died in
  1920. From that date until the trial in 1936, Ada (the
  other daughter) occupied the property. In 1929, Ada
  was removed as a trustee of the estate and the Public
  Trustee appointed. In 1932, Ada Luke became a
  bankrupt and in the case before the Court an order was
  sought that the Public Trustee be authorised to sell the
  real estate and that Ada Luke be charged an occupation
  rent.

                        (c) Cameron Stewart
               Occupation Rent
• Long Innes C J in Eq. cited the matter as follows:
   The conclusion to which I have come is that the
     contention that the defendant Ada Luke should be
     charged with an occupation rent in this case is neither
     supportable on principle, nor established by authority,
     and that , in fact, the balance of authority is to the
     contrary.
   I make the order for sale as asked, and declare that the
     defendant Ada Luke is not chargeable with an
     occupation rent.

                         (c) Cameron Stewart
                Occupation Rent
• Three exceptions
   – the co-owners have contractually agreed amongst
     themselves that the occupying co-owner will pay a fee;
   – One of the co-owners has been excluded from the
     property through an ‘ouster’
   – One of the co-owners has voluntarily expended money on
     repairing or permanently improving the co-owned
     property and has been in occupation during that time. If
     they seek a contribution from the other co-owners
     towards the repairs or permanent improvements, the
     extent of this contribution will be reduced by an
     occupation fee covering their occupation of the property

                         (c) Cameron Stewart
                     Ouster
• An ouster will occur when one co-owner
  physically excludes or threatens to physically
  exclude another of the co-owners. An ouster
  must be wrongful and suggest that there is a
  denial of the excluded persons title and right to
  possession of the property. Exclusion will amount
  to ouster where one party leaves due to violence
  or threats of violence; or where one party asserts
  that the other has no proprietary interest in the
  property. No ouster occurs where one co-tenant
  makes life difficult or uncomfortable for the other

                      (c) Cameron Stewart
                       Ouster
• Biviano v Natoli (1998) 43 NSWLR 695 – Ms Biviano and Mr
  Natoli bought a house together in 1979 and lived in the
  house until October 1992. In Oct 1992 they had an
  argument, there were threats made, and Mr Natoli left. Ms
  Biviano then got an Apprehended Violence Order under the
  Crimes Act 1900 which prevented Mr Natoli from occupying
  the premises. Mr Natoli subsequently took court action
  seeking the sale of the house and an occupation rent from
  the time of the AVO. Ms Biviano defended the action
  claiming a. that she was the full owner of the house
  (denying Mr Natoli was a co-owner) and in the alternative
  b. that there had been no ouster entitling him to an
  occupation fee.


                        (c) Cameron Stewart
                       Ouster
• The court dismissed the first argument and found that
  they were tenants in common of the fee simple. With
  respect to the issue of ouster, the court said:

  The true nature of ouster is that it constitutes a
  trespass by one co-tenant of another co-tenants rights
  in respect of the property … ‘an express denial of the
  title and right to possession of fellow tenants brought
  home to the latter openly and equivocally’ would
  clearly amount to an ouster (per Beazley JA at 701
  (Powell JA and Stein J in agreement)

                        (c) Cameron Stewart
                            Ouster
• The court held that court order AVO did not constitute ouster.
  Because Mr Natoli was not wrongfully excluded from the property
  but was excluded pursuant to a statutory order, Ms Biviano had not
  trespassed on Mr Natoli’s rights to the property. His lack of access
  to the property came through a lawful AVO
• The court found that if Mr Natoli could not lawfully have sustained
  an action in ejectment against Ms Biviano, she could not have
  wrongfully excluded him.
• However there was an ouster in the case. The court found that an
  ouster occurred when Mr Natoli lodged his claim for sale of the
  house and she defended the action by alleging that he had no title
  to the property. This action amounted to a denial of his proprietary
  interest in the property and was an ouster – so she had to pay an
  occupation rent for the period from the date of the court action.



                             (c) Cameron Stewart
     Claim for mortgage payments
• Foregeard v Shanahan (1994) 35 NSWLR 206 – Co-owners of 50% of
  land.
• She was in sole occupation for 9 years (judge notes – she ‘installed
  her paramour’).
• During that time she made all the mortgage payments on a jointly
  owed mortgage.
• He sought a partition to sell the house.
• She raised 50 % of the mortgage payments as a defensive equity in
  partition.
• Her defensive equity was reduced by 50% of the rent the property
  would have fetched over those nine years as an occupation fee –
  this amount exceeded the mortgage payments – he sought the
  extra
• He was denied on the basis that the occupation rent claimed
  cannot exceed the defensive equity raised.

                             (c) Cameron Stewart
         Claim for mortgage payments
Headnote says:
(2) (By Meagher JA with whom Mahoney JA agreed; Kirby P dissenting) In common law partition and similar
      cases, the rights of one co-owner against another co-owner of real property, when one has been in
      occupation and the other has not, include:
       (a) the payment of an occupation fee by the co-owner in possession but only where:
               (i) the other co-owner has been excluded from occupation; or
               (ii) the owner in occupation claims an allowance in respect of improvements
       (b) the entitlement to an allowance in favour of a co-owner in occupation who effects improvements
            (which is more than mere repairs and maintenance) is for the lesser of the value of the enhancement
            of the property and the cost of effecting the repairs, where the non-occupying owner seeks an
            occupation.
(3) Accordingly, in determining the rights of joint tenants for the purposes of making orders pursuant to the
      Conveyancing Act 1919, s 66G, where one owner has left the jointly owned property but has not been
      excluded from occupation:
       (a) insurance premiums and expenses for pest control incurred by the occupying co-owner cannot be
            claimed as improvements which are recoverable from the other owner;
       (b) an occupation fee should be charged to any occupying owner but the fee should not exceed the value
            of improvements made by the occupying owner; and
(c) an allowance should be made in favour of the owner making mortgage repayments, water and council rates,
      but such allowance arises from a claim for contribution for payments made by one debtor of a debt jointly
      owed and not because of the co-ownership of real estate.

                                               (c) Cameron Stewart
     Calculation of occupation fee
• What are you paying an occupation fee for? The
  occupation fee is to occupy the portion of the property
  that the co-owner does not own. So, if one co-owner
  has 50% of the property, then they have to pay half the
  value of the occupation (because you don’t have to pay
  to occupy your half). Equally, if the co-owner owns 1/3
  of the house, then they have to pay an occupation fee
  for their occupation of the other 2/3 of the property.
  An occupation fee is generally calculated by reference
  to the open market rental for the property – So, if a co-
  owner owns 60% of the property, their occupation fee
  will be 40% of the market rent.


                        (c) Cameron Stewart
                 Rents and Profits
• In equity, an account for profits lies as part of a suit for
  partition.
• There is also an argument that the equity court can still
  exercise an inherent jurisdiction for an account between
  co-owners. If this jurisdiction still exists then the court can
  order only an account of those profits received from third
  parties. The fact that one co-owner has had a greater
  benefit from actual occupation of the property does not
  found an action.
• In an action for an account of profits, a claim for the cost of
  improvements will be dealt with by the court making an
  order for the whole of the cost of the improvements made
  to earn the income.

                           (c) Cameron Stewart
             Rents and Profits
• The general rule is that each co-owner is
  entitled to share in the rents and profits of the
  property in accordance with the size of their
  respective shares in the property. (1/3 share =
  1/3 rents and profits).




                     (c) Cameron Stewart
            Rents and Profits
• Rees v Rees [1931] SASR 78, four brothers
  owned a farm in equal shares as tenants in
  common. Two of the four brothers farmed the
  land and sought an order that they were
  entitled to the whole of the produce from the
  land and the money derived from that
  produce and that they were not liable to
  account for any portion thereof to the
  defendants.
                   (c) Cameron Stewart
                  Rents and Profits
• The point raised by the defence in the present action; that in
  farming the land the plaintiffs did so as trustees for themselves and
  the defendants, is dealt with in the note in Lindley on p. 37, “nor
  can one co-owner, by leaving the management of the property in
  the hands of the other, impose upon him an obligation of a
  fiduciary character.” The authority cited for this proposition is
  Kennedy v de Trafford, [1897] A.C. 180 (see especially per Lord
  Herschell at p. 189), which is cited by Collins M.R. in In re Biss,
  *1903+ 2 Ch. 40, at p. 57, for the statement that “tenants in
  common do not stand in a fiduciary relation to each other.” There is
  nothing in the circumstances of the present case giving rise to any
  such relationship concerning the management of the farm or the
  produce thereof, and it seems clear that the plaintiffs were entitled
  to the declarations and order for which they asked.



                              (c) Cameron Stewart
                   Rents and Profits
• Back to Squire v Rogers (1979) 27 ALR 330. - The plaintiff sought an
  account of the rent earned from structures built:
• The court agreed with claim for rent but if one party voluntarily
  improves the land, and those improvements earn rents or profits,
  you are only entitled to those rents and profits IF you are prepared
  to pay for a share of the improvements (per Deane J (Brennan and
  Forster JJ in agreement) at 348):
      In my view, *the plaintiff+ is … only entitled voluntarily to adopt the
      benefit of the improvements [the rents and profits] by claiming and
      receiving one-half of any profit resulting from their use at the price of
      being liable to contribute to, or make an allowance in respect of, their
      cost over and above the amount included in the restricted allowance
      to which the defendant was independently entitled to on partition or
      sale. If she accepts the benefit of the profit earned, she must bear her
      share of the burden of earning it.



                                (c) Cameron Stewart
                Rents and Profits
• Conclusion: the plaintiff couldn’t be made to pay for the
  improvements beyond the fact that the defendant got a
  $15 000 property adjustment to account for the
  increased value of the land (remembering that he spent
  $100 000);
• She could not then also seek to collect the rent and
  profits that flowed from the improvements.
• Plaintiff was entitled to a one-half share of the rent from
  the caravans for 14 odd years because the caravans stood
  on unimproved land BUT she wasn’t entitled to a share of
  the rent from the boarding rooms that the defendant had
  constructed unless or until she forked out for the cost of
  building them.           (c) Cameron Stewart
                     Rates
• Section 560 of the Local Government Act
  provides that co-owners are jointly and
  severally liable for the payment of rates. Also
  applies where there are lessees.




                     (c) Cameron Stewart

				
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