Equity & Trusts: Olga and Marcus' Property Rights Under the Law

This case study delves into the property dispute between Olga and Marcus, focusing on their rights under Equity and Trust law. Initially, they planned to jointly purchase a house, but Marcus' poor credit rating led to the legal title being solely in Olga's name. Despite this, Marcus contributed significantly to the property by maintaining it, paying for improvements like central heating and a conservatory, and covering half of the mortgage payments. The analysis considers the implications of the Law of Property Act 1925, equitable interests, and the potential for a constructive or resulting trust in favor of Marcus. The discussion references relevant case law, such as Dearle v Hall and Armory v Delamirie, to support the arguments. Furthermore, it explores the concept of adverse possession and the remedies available to Marcus. The alternative scenario of joint ownership is also examined, highlighting the legal implications and responsibilities of joint tenants. This document is available on Desklib, where students can find more solved assignments and past papers.

Running head: EQUITY AND TRUST
Equity and Trust
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Answer to question A:................................................................................................................2
Answer to question B:................................................................................................................6
References:...............................................................................................................................11

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Answer to question A:
The “Law of Property Act 1925” is the Parliamentary act which was introduced to
low down the number of legal estates to two and enable the transfer of interest in land easy
for the purchasers1. The general principles to the legal estates, equitable interest and powers is
the easement right or privilege in the land for the equitable interest of an estate. A
conveyance to the purchaser of the legal estate in the land should overreach any form of
equitable interest and power impacting the estate whether or not the property holder has the
notice of conveyance for the powers conferred under the “Settled Land Act 1925”.
The current case study is based on Olga and Marcus that had planned to purchase a
house in their joint names. However, due to the poor credit rating of Marcus they were
advised to hold the legal title of the house in the name of Olga. The property was bought for
the purchase price of £300,000 out of which £200,000 was inherited by Olga from her aunt
while the rest was funded from the mortgage loan. Following the purchase of the house both
Olga and Marcus lived together. Marcus also maintained the house and garden, paid for the
central heating that were to be installed and also paid for the construction of conservatory. As
noticed in the case study Marcus also contributed half of the mortgage payment in his sole
name.
As evident in the case of “Dearle v Hall (1828)” the English common law rule
provides an explanation to the determination of priority between the competing equitable
claims to the same asset2. The rule vividly explains that where there is an equitable owner of
the asset rationales to dispose the equitable interest the equities will be held equal among the
claimants. The rule stated in the case of “Dearle v Hall” has generally been treated
1 Drahos, Peter. A philosophy of intellectual property. Routledge, 2016.
2 Bridge, Michael. Personal property law. OUP Oxford, 2015.

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controversial ever since it was introduced3. Nevertheless, this has not prohibited the rule from
being extended to the rule that regulates the priority interest in the property such as rights
under the contracts that are considered important in the modern age of commerce.
The English “Property Act 1925” provides under the equitable interest and things in
action that the subject of execution relating to disentailing of assurance or the executing the
testamentary power that is conferred by the act, a required interest shall result in equitable
interest4. In other words, the act confers an entailed interest till the extent the property is
affected would transfer the legal interest from time after time on those persons that are
successfully entitled to as their heirs.
According to the English “Property Act 1925” a mortgage of the asset in the form of
fee shall be capable of being affected by law either in the form of demise relating to the
absolute terms of years or may be subjected to the provision for cesser on redemption or in
terms of the charges of deed that is expressed in the form of legal mortgage5. The act
provides that the first mortgage would possess the similar right of possess of documents in
the form of security included in the mortgage fee. Without the prejudice to the provision of
the act with respect to the legal and equitable powers every power of mortgage and lend the
money on mortgage of the estate in the form of fee would be construed as the power to
mortgage based on the terms of years or by way of the legal mortgage.
3 Jackson, Paul, and David C. Wilde, eds. Property law: current issues and debates. Routledge, 2018.
4 Dratler Jr, Jay, and Stephen M. McJohn. Intellectual Property Law: Commercial, Creative and Industrial Property. Law
Journal Press, 2018.
5 Means, Gardiner. The modern corporation and private property. Routledge, 2017.

4EQUITY AND TRUST
Applying the principles of English “Property Act 1925” it is evident that the property
was bought following the contributions made by Marcus on mortgage6. Without any
prejudice to the provision of the act, Marcus dwelt in the property ever since it was
purchased. He also paid for the construction of conservatory, central heating and half of the
mortgage instalments from bank. Every power on the mortgage construes a legal and
equitable rights on the mortgage for Marcus. As stated by the law property bought through
mortgage would have the same right of possession of documents as Marcus security was
included into the mortgage fee.
Part VI of the act states that a person to whom any form of power together with the
interest or not is provided by in the form of release of deed or contract shall exercise the
power. Nevertheless, there are disclaimers of the powers as well7. A person to whom any
power is conferred together with the interest may not be provided with any deed to disclaim
the power and the disclaimer would not be exercising or joining in the implementation of
power. On event of such disclaimer, powers might be used by a person to whom the powers
are conferred in the instrument creating the power8. Here in the current situation of Marcus
his current credit rating is poor which prevented him from jointly holding the property with
Olga. However, while creating the instrument a contrary was expressed where Olga was
assigned the title of the property.
To further justify the situation of Marcus and Olga reference to the situation of
“Armory v Delamirie (1722)” has been made to represent the English property law and the
6 Berkowitz, Daniel, Chen Lin, and Yue Ma. "Do property rights matter? Evidence from a property law enactment." Journal
of Financial Economics 116.3 (2015): 583-593.
7 Jackson, Paul, and David C. Wilde. The reform of property law. Routledge, 2018.
8 O’Loughlin, Darragh R., and Niall J. English. "Prediction of Henry’s Law Constants via group-specific quantitative
structure property relationships." Chemosphere 127 (2015): 1-9.

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rights of finder. Reference to this case has been made in order to justify that the possession as
the valuable property right and along with the evidence of ownership9. The court of law
passed by its judgement by stating that both Armory and Delamirie had the rights on the
property despite the fact that none of them was the actual owner of the property. The verdict
of the court held that each of them had the right of possession which is enforceable against
each person except those that has the right of possession10. The actual owner of the jewel was
not treated as relevant; the court of law here was only concerned with those that had the
better right to hold the property. The priority of the right to possession explains that the finder
has the better right that possess the better title to the property and hence Armory had the full
right to the jewel.
The plaintiff here Marcus had the property right in the house despite the fact that he
did not legally held the title of the property due to his poor credit rating but contributed to
half of the house mortgage11. In addition to this Marcus also contributed towards the
construction of conservatory and central heating. The priority of rights relating to possession
explains that Marcus has the equal title to the property and together with Olga, Marcus is also
the true owner of the property despite the fact the title of the property was not conferred in
the name of Marcus.
Though Marcus does not have the legal title to registered to his name or acquire an
absolute ownership of the property, yet Marcus would have the ownership of the property
would enable him to keep it as all however the rightful owner and subsequently may also
9 Burn E, G CheshireJ Cartwright, Cheshire And Burn's Modern Law Of Real Property (Oxford University Press 2016)
10 Berger, Christian. "Property Rights to Personal Data?–An Exploration of Commercial Data Law." Zeitschrift fuer
Geistiges Eigentum/Intellectual Property Journal 9.3 (2017): 340-355.
11 Cooke E, Modern Studies In Property Law (Hart Pub 2015)

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maintain the trover. Similarly, in the case of “Tulk v Moxhay” the principles of equity is
explained12. The court of law passed the verdict in favour of the plaintiff and also granted the
plaintiff with the injunction to confine the defendant from violating the covenant. The court
of law noticed that if any agreement has been made in the contract rather than the covenant,
then it may be treated as enforceable. Consequently, the covenant was considered as
enforceable in terms of equity when the plaintiff sought an injunction as opposed to the
damages. The court of law held that the case stands based on the proposition that the vertical
privity is not needed relating to the burden of the covenant to run at equity.
The plaintiff here Marcus can obtain an injunction to restrain the defendant Olga here
from the violation of the property rights. The agreement between Marcus and Olga should be
treated as contract rather than considering it as covenant which is enforceable by Marcus. The
current situation of Olga and Marcus provides that there is no documentary evidence relating
to the title for Marcus. An adverse possession is applicable in the situation of Marcus as the
legal applicable principles since Marcus does not has legal title to the piece of property13.
Marcus attempts to claim his legal ownership depending upon the history of possession of a
property. Marcus being the equal owner of the property has the right of recovering the
possession of their house from the possession of Olga with the help of legal action of
ejection.
Answer to question B:
In the alternative situation if the property was jointly owned by Olga and Marcus in
their respective joint names they would be held as the joint owners of the property. Given the
12 Eliot GR Ashton, The Mill On The Floss (Penguin Books 2018)
13 Gullifer LS Vogenauer, English And European Perspectives On Contract And Commercial Law(Hart Publishing 2017)

7EQUITY AND TRUST
property was jointly owned by them both would be legal owners of the property14. The term
joint ownership signifies that two or more people are treated as the legal owners of the
property. Typically, the joint owners are held liable for the entire payments for any amount of
loans taken on the property and decision regarding the property that are made by the all the
joint owners. In the current situation it is noticed that Olga and Marcus held the property
jointly and also took the mortgage from bank to finance the purchase of property. Both Olga
and Marcus would be treated as the joint liable for the entire payment of loans because of the
joint loans secured on the property and the decisions made on the property would be jointly
taken.
Historically, the legal owners of the property are represented on the title deeds but this
is presently true for the unregistered land. If this is the situation, the deeds of the title would
normally be held on the lender given that there is a loan on the property15. The cohabitants are
usually treated as the joint owners of the property based on the legal terms of joint tenants in
terms of law and has nothing to do with the rented property. Similarly, in the current situation
of Olga and Marcus they would be treated as legal owner of the house because they would
have been legally entitled to the title of the deed. As the house was on loan the title of the
deed would normally remain vested in the hands of lender.
Evidently in the situation of Olga and Marcus having the property registered under
their as joint owners they would be treated as the cohabitants who are joint owners that are
referred in the legal terms as the joint tenants based on law16. This implies that both Olga and
14 McMahon, Michael. "The law of the land: property rights and town planning in modern Britain." Land Rent, Housing and
Urban Planning. Routledge, 2018. 87-106.
15 Cooper, S. A. A. "Discretion in property law: a study of judicial correction of registered title." Legal Studies 38.1 (2018):
1-23.
16 Duncan, William D., et al. "Property Law Review-Final Report-Property Law Act 1974 (Qld)." (2018).

8EQUITY AND TRUST
Marcus implies that each would hold the title of possession to the whole of land and right to
occupy it. An important consideration for the joint owners is that cohabitants that are the joint
legal owners of the property does not necessarily have the same benefits or interest which is
better known as equitable interest to which they would be entitled to receive given the
property is sold. They are either treated as beneficial joint tenants or the tenants in common
that are better known as equitable or beneficial tenants in common.
On noticing that the cohabitants are treated as the beneficial joint tenants, then it
implies that they both would be entitled to the equally share the property value17. If any one
of them dies, then the entire of the beneficial interest would be owned by the survivor. Since
Olga and Marcus have decided to own the property jointly in their name then they would be
treated as beneficial cohabitants with both having the entitlement to equal shares of value of
the house. If any of them between Olga and Marcus dies the entire beneficial interest would
be owned by Olga or Marcus.
According to the presumption of the House of Lords while resolving the disputes
regarding the beneficial interest of each of the join tenants in domestic cases, the starting
point represents the presumption that a house jointly purchased by the cohabitants in the form
of cohabitants18. This is because their family home is beneficially owned by each Olga and
Marcus with each is entitled to equal shares. In such a situation, the presumption originates
due to the domestic cases purchasing the property in their joint names indicating an emotional
and economic commitment to the joint enterprise. Due to the practical difficulty of assessing
the respective contributions to the property over the longer period of cohabitation, the
17 Walsh, Rachael, and Lorna Fox O’Mahony. "Land law, property ideologies and the British–Irish relationship." Common
Law World Review 47.1 (2018): 7-34.
18 Worthington, Sarah. "Revolutions in Personal Property: Redrawing the Common Law's Conceptual Map." (2018).

9EQUITY AND TRUST
presumption does not originate in the situation of investment purchases of purchasing the
property for letting off.
Being the joint owners or in other words the beneficial joint tenants, the purchasers
would possess the equal right to the entire property19. The joint owners of the property are not
allowed to pass the ownership of the property in their will. The joint ownership of the
property is equally applicable to the freehold and the leasehold properties and does not mean
that the property owner would only have the tenancy of the property.
Under the alternative arrangement in the situation of Olga and Marcus both the parties
own the entire property as one legal person and each of them are entitled to the equal,
exclusive right in the property and the proceeds of sale is eventually responsible for any
amount of the liabilities that would arise out of its ownership20. On noticing that the property
is sold they would have to be signed by all the owners to make it valid.
The sales money from the joint ownership of the property can be paid to each of the
joint owners in the form of sum or can also be paid in divided manner upon the joint request
of the owners21. This kind of ownership is usually common in a way the property was held by
the married couples and those that are having the long standing relationship and where both
the parties are contributing financially to the costs and expense either by purchasing the
property or by maintaining or repairing and paying the contributions for the mortgage
repayments.
19 Blandy, Sarah, Susan Bright, and Sarah Nield. "The dynamics of enduring property relationships in land." The Modern
Law Review 81.1 (2018): 85-113.
20 Manji, Ambreena. "Land Law." Great Debates in Gender and Law (2018): 49.
21 Bevan, Chris. "The doctrine of benefit and burden: reforming the law of covenants and the numerus clausus
“problem”." The Cambridge Law Journal 77.1 (2018): 72-96.

10EQUITY AND TRUST
Property that are held in this manner can be only sold based on the consent of the joint
owners22. If there is any change in the situation leading to one of the joint owners to sell while
the other refuses to do so then it would be necessary at this stage to sever the joint tenancy so
that it can covert the tenancy in common than the person that holds the property would be
ultimately able to sell the property. On the other hand, it is very much common for the
married couples and civil partners to hold the property as the joint tenants. There may be
situations where the married couples would prudently own the property either for planning of
tax or where the spouse might face unlimited personal liability23. It is also advised that the
people should go for tenancy in common where one party purchases the property out of the
assets that are owned before marriage or prior to the commencement of the present
relationship. Where the parties are not married it is very much better for them to hold the
property as the tenants in common either in equal shares or under any shares which they
deem appropriate.
As evident in the current situation of Olga and Marcus, if the house was originally
held in their joint names then both Olga and Marcus would have the same rights on the
property and each would have equitable interest on the house24. They would be held as co-
owners of the property or the joint owners in common where both the parties together would
be owning the entire property as the one legal person with the undivided right on the
property. Furthermore, both Olga and Marcus wold be held equally responsible relating to
any amount of liabilities that originated from the joint ownership of the property.
22 Bridge, Michael, et al. The law of personal property. Sweet & Maxwell, 2017.
23 Dratler Jr, Jay, and Stephen M. McJohn. Intellectual Property Law: Commercial, Creative and Industrial Property. Law
Journal Press, 2018.
24 May, Christopher. "Book review: the end of ownership: personal property in the digital economy by Aaron Perzanowski
and Jason Schultz." LSE Review of Books(2016).

11EQUITY AND TRUST

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References:
Berger, Christian. "Property Rights to Personal Data?–An Exploration of Commercial Data
Law." Zeitschrift fuer Geistiges Eigentum/Intellectual Property Journal 9.3 (2017): 340-355.
Berkowitz, Daniel, Chen Lin, and Yue Ma. "Do property rights matter? Evidence from a
property law enactment." Journal of Financial Economics 116.3 (2015): 583-593.
Bevan, Chris. "The doctrine of benefit and burden: reforming the law of covenants and the
numerus clausus “problem”." The Cambridge Law Journal 77.1 (2018): 72-96.
Blandy, Sarah, Susan Bright, and Sarah Nield. "The dynamics of enduring property
relationships in land." The Modern Law Review 81.1 (2018): 85-113.
Bridge, Michael, et al. The law of personal property. Sweet & Maxwell, 2017.
Bridge, Michael. Personal property law. OUP Oxford, 2015.
Burn E, G CheshireJ Cartwright, Cheshire And Burn's Modern Law Of Real
Property (Oxford University Press 2016)
Cooke E, Modern Studies In Property Law (Hart Pub 2015)
Cooper, S. A. A. "Discretion in property law: a study of judicial correction of registered
title." Legal Studies 38.1 (2018): 1-23.
Drahos, Peter. A philosophy of intellectual property. Routledge, 2016.
Dratler Jr, Jay, and Stephen M. McJohn. Intellectual Property Law: Commercial, Creative
and Industrial Property. Law Journal Press, 2018.
Dratler Jr, Jay, and Stephen M. McJohn. Intellectual Property Law: Commercial, Creative
and Industrial Property. Law Journal Press, 2018.

13EQUITY AND TRUST
Duncan, William D., et al. "Property Law Review-Final Report-Property Law Act 1974
(Qld)." (2018).
Eliot GR Ashton, The Mill On The Floss (Penguin Books 2018)
Gullifer LS Vogenauer, English And European Perspectives On Contract And Commercial
Law(Hart Publishing 2017)
Jackson, Paul, and David C. Wilde, eds. Property law: current issues and debates. Routledge,
2018.
Jackson, Paul, and David C. Wilde. The reform of property law. Routledge, 2018.
Manji, Ambreena. "Land Law." Great Debates in Gender and Law (2018): 49.
May, Christopher. "Book review: the end of ownership: personal property in the digital
economy by Aaron Perzanowski and Jason Schultz." LSE Review of Books(2016).
McMahon, Michael. "The law of the land: property rights and town planning in modern
Britain." Land Rent, Housing and Urban Planning. Routledge, 2018. 87-106.
Means, Gardiner. The modern corporation and private property. Routledge, 2017.
O’Loughlin, Darragh R., and Niall J. English. "Prediction of Henry’s Law Constants via
group-specific quantitative structure property relationships." Chemosphere 127 (2015): 1-9.
Walsh, Rachael, and Lorna Fox O’Mahony. "Land law, property ideologies and the British–
Irish relationship." Common Law World Review 47.1 (2018): 7-34.
Worthington, Sarah. "Revolutions in Personal Property: Redrawing the Common Law's
Conceptual Map." (2018).