The law of property act of 1925 is among the Acts that were designed as part of the integrated legislative program initiated by Lord Chancellor Lord Birkenhead between the year 1921 and 1925 (Beale Jr. 1907). This piece of legislation primarily concerns itself with the transfer of property. In law, the word property is synonymous with the word land. There are many reasons that explain why land is the most fundamental kind of property in society. The provisions relating to the law of property are principally concerned with the transactions on matters of land, most prominently leases and deeds. Still to this day the law of property act of 1925 is a critical aspect of the law of England. The Law of property act explains that a person’s interest in land can either be governed by title or by equitable features. The principal difference between title ownership and equitable interest is that the title owner is the holder of the legal instruments evidencing the ownership of the property. This paper seeks to explain the controversies surrounding sections 53 (1) (b) and 53 (1) (c) of the law of property act of 1925.
Fundamentally, the controversies surrounding these sections stem out of the inconsistencies in their provisions. The sections tend to contradict each other with regard to what they say on the transactions and deeds, as well as leases of land and other forms of permanent property (Schnebly 1926). The act handles matters of co-ownership and subsequent dealings upon the end of the owners' partnership. The cases dealt with under this act are mainly cases involving people who previously purchased a piece of property jointly. It handles as well cases involving situations where married couples are wrangling over ownership and interest in property. Related to such cases are situations where people get involved with one another in marriage or such like relationships after one of them had already accumulated and developed property. Perhaps, such cases become more complicated in situations where the incoming spouse contributes to the enhancement of the property. This is a common scenario where the property involved is a building, a house or a home.
In order to comprehend the inconsistencies in the sections, it is imperative to state them as they are worded in the authentic document. Section 53 (1) (b) states that: a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will; section 53 (1) (c) states that: a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorized in writing or by will (Steven 2012). It is clear that from the provisions of the two sections, subsection (b) considers any oral declaration of trust of land legally unenforceable. On the other hand, subsection (c) considers legally invalid any oral disposition of equitable interests. Subsection 53 (1) (b) further states that the declaration itself need not be in writing. Hence, which is required to be in writing is evidence that the declaration was made and is legally enforceable. On the contrary, subsection 53 (1) (c) states that the declaration itself must be in writing.
It is worth observing that in the occurrence that there is a case involving oral declarations of trust and oral dispositions of equitable interest, the two subsections can be used independently to conduct the defense of either side; that is, the defendant and the plaintiff. This is because both provisions are legally actionable yet contradictory. This is a case of absolute absurdity as it entails contradictions within the same constitution. According to the constitution, any law that is inconsistent with the highest law of the land, that is the constitution, shall be null and void to the extent of its inconsistency (Sloan 2011). It, therefore, becomes a subject of disagreement, when it comes to considering what should be done in the event that the constitution contradicts itself. There is substantial case law that can illustrate the controversy surrounding these particular sections of the law of property act of 1925.
Conversely, before embarking on the detailed case law illustrations, it is critical to comprehend the concept of trusts and equitable interests. Typically under the law of property, there are agreements that govern the relationships of various parties that are related to the property (Bradgate & Fidelma 2007). A trust of land is a legally binding agreement where the court appoints a trustee to maintain ownership of property, usually land, fort the benefit of another party. The party for whose benefit the land or property is held is referred to as the beneficiary. The trustee can be appointed by the beneficiary or the court depending on purpose, as well as circumstance of the trust. For instance, it is worth taking note of the fact that in the occasion that the beneficiary is an individual who has not attained majority age, the court will assign a trustee to handle the property on their behalf (Bradgate & Fidelma 2007). Nevertheless, it is noteworthy that the beneficiary can either be an individual or a corporation. For there to exist a trust, there should be a conveyance of trust property to the selected trustees with observation of the legal procedures.
When a person has the legal title of property, it does not automatically mean that it is only such a person that is entitled to the rights and use of such property. It is even possible that there are other parties that have more interest in the land than the legal holder. Equitable interest is the interest that is associated with those parties that have rights to the land but do not have the legal title of the property (Dixon 2002). In a trust, the beneficiary in the case has an equitable interest. It is for this reason that equitable interest is said to be legally stronger than the legal interest. An example can be used to exemplify this. Take a company that wants to buy land or accumulate its property. The company may not want to reveal its identity. For this reason, the company may elect to use a trustee. In this case, the shareholders of the company will choose an individual to purchase the land in his or her name. Typically, the legal interest will stay put in the hands of the persons that made the purchase. On the other hand, the equitable interest will rest with the company. Hence, in such a case, the equitable interest overrides the legal interest of the property.
The subsection 53 (1) (b) tends to eliminate the need for formalities in the making of the trusts and establishing of the subsequent interests (Drobng & Bar 2004). This subsection can be explained by the rule in the case of Walsh v Lonsdale. In this case the defendant, Lonsdale, entered into an agreement with the plaintiff, Walsh, where it was orally agreed that Walsh would lease his mill out to Lonsdale on the agreement that Lonsdale pays the rent according to turnover. It was further orally agreed that the tenant was to pay a minimum rent of some specific amount every period, whether there were returns or not. The tenant, Mr. Lonsdale moved in and started operating the mill four months prior to the agreed period. The crucial issue came up when Mr. Walsh came charging him for rent in advance. The court held that Mr. Walsh was right in his claim and thus, he won the case. The judgment was based on the doctrine of equity that states that: it is considered done, that which ought to be done.
The case was the base of the row that there is no much need for formalities in the cases dealing with trusts and equitable interest or rather in dealing with property involving equitable and legal rights (Gibbons 2012). In contemporary legal practice, such a provision and judgment are considered void since the legal framework provides for written and verifiable contracts. The substance of common law to some extent clashes with the doctrines of equity. However, it is a matter of law that whenever equity and common law conflict, equity prevails. When there are two statues or sections that are inconsistent with one another, the one that is verifiable at common law prevails.
One issue that makes the inconsistency between the two sections more pronounced is the fact that the section 53 (1) (b) has provisions that promote unverifiable claims (Williams 2002). Oral declarations may be unverifiable especially if they are executed in the absence of legally valid witnesses and due procedures. The court usually finds it difficult to handle claims that cannot be verified. As much as civil cases do not require evidence beyond reproach, it is necessary to have substantial proof. In the case, of stoke v Anderson; an unmarried couple came together after Mr. Stoke had separated with his wife. His efforts to get back with his wife had proved futile. He thus decided to buy the share of the home belonging to his former wife. When Miss Anderson moved into the home, Mr. Stoke had asked her to contribute 12000 pounds in return of which, she would own a share of the property. Even so, the share that Miss Anderson would be entitled to was not specified. However, the 12000 pounds were used to fund the mortgage through which Mr. Stoke had bought his former wife’s share of the property. Further, Miss Anderson had spent 2500 pounds in constructing an extension. In court, their case, which fell under the quantification of shares docket, was held that Miss Anderson was entitled to 25% of the property. This case illustrates one of the major pitfalls of subsection 53 (1) (b). Had the provision of subsection 53 (1) (c) prevailed, the whole property would have been found to be fully belonging to Mr. Stoke.
The controversies as well point to the fact that under the two sections, valuation of jointly owned property is difficult and can pose serious challenges. The valuation problem is brought by the fact that in most cases, property owned by a couple constitutes the property acquired before the marriage and that which was bought in the course of the marriage (Hudson 2010). It is a matter of lawful contention whether or not to consider the time of acquisition of such property. Courts do not have a specific framework that should tell them whether to consider the time during which such property was procured or subsequent conduct of the interested parties. This was illustrated in the case of Gissing v Gissing. In the case, Mr. and Mrs. Gissing had been married for sixteen years. Before they had gotten married, the man had purchased the home. Upon marriage, the wife committed some funds to the development and maintenance of the lawn. Upon their decision to get divorced, the wife sued for a share of the property. Therefore, it was held that the property fully belonged to Mr. Gissing. The presiding judge attributed this decision to the fact that marriage was irrelevant as to who had an interest in the property. The legal interest held by Mr. Gissing was the only interest that was deemed binding. Had there been a written disposition of the equitable interest, then the property could have been considered for apportionment under subsection 53 (1) (c). Such controversial cases are the result of the inconsistent provisions of sections 53 (1) (b) and 53 (1) (c) of the Law of Property Act 1925.
The most prominent, perhaps land mark, case in the controversy of sections 53(1) (b) and 53(1) (c) of the Law of Property Act 1925 is the case of Grey v IRC (Priest 2006). The case, which involved, the trustees of the grandsons of Grey, Grey himself and the internal revenue commission is one case that has for a considerably long time been a point of reference under judicial precedents. In the case, Mr. Grey, who had wealth which he intended to transfer to his six grandchildren as the principal beneficiaries, did not want to pay stamp duty and hence preferred an oral transfer agreement. He went to the trustees of the children and asked them to maintain the possessions on behalf of the grandchildren. The man argued that the contract was not in written form and hence could not attract stamp duty as it was not a disposition of equitable interest. The trustees did a letter to the Internal Revenue commission informing them how had been instructed to hold the property that was meant for the advantage of the grandchildren of Mr. Grey. The internal revenue commission officers argued that a disposition of the equitable interest could be effected through an oral declaration. They later argued that the written correspondence between the trustees and the internal revenue commission was a written agreement and that it constituted legal disposition of the equitable interest (Ong 2007).
In the Grey v IRC case, it was held by the court that both arguments given by the IRC officers were legally valid. The first argument was considered valid under section 53 (1) (b). From this perspective, the argument was based on the fact that the oral declaration was verifiable and hence amounted to a legally binding and actionable transfer or disposition of equitable interest. The second argument that later on relied upon the letter was based on the section 53 (1) (c) provision (Hepburn 2001). The court identified the letter as a written agreement since the trustees had drawn the letter with the consent and under the instruction of Mr. Grey who was the transferor of the interest. Such controversies result in legal ambiguities. The ambiguities in the legal dealings may cause serious pitfalls and unforeseen disturbances in the justice system. It is worth noting that after the revenue commission identified the transfer as a written one, stamp duty, which Mr. Grey was seeking to evade, was declared payable. As such, it is worth saying that the controversy and inconsistency with the provisions of the law of property act of 1973 encourage such unacceptable conducts as tax evasion in the community (Goo 2004).
In conclusion, it is noteworthy that the controversy surrounding the provisions of sections 53 (1) (b) and 53 (1) (c) of the Law of Property Act 1925 is due to the inconsistency in their provisions. Legally, clauses relating to the equal subject matter in the legal framework should be consistent with each other (Ostrow 2012). It is for this reason that the cases relating to trusts and equitable interest in property are rampant in the history of the law of property. The inconsistencies in the Act are the causes of such legally unjustifiable acts as tax evasion. Additionally, operating under a legal system with such inconsistencies leaves very important matters to the discretion of the judges. Discretion amounts to subjectivity in the legal framework. Rationally, the legal system of any country ought to be the most objective of all systems. This is to say that for justice to be achieved in the face of equality there ought to be objectivity. Objectivity in the legal system calls for consistency in all sections of its acts. The use of discretion among the judges should only be allowed in the incident that there is no statute governing the case at hand. It is recommended that the inconsistency in the sections should be addressed in favor of the written agreements.
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