An owner holds a present interest that is legal
A worked RES examination question on legal equitable interests, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
An estate is being administered eighteen months after the death, the delay caused by a dispute over a bank account abroad. The deceased's daughter has been granted letters of administration, and the house is still registered in her late father's name. A cousin, named in the will as taking a half share of the proceeds, has nothing recorded against the title or anywhere else, and has begun to wonder whether he holds anything at all.
Consider the following statements.
- (i) The daughter's authority is proved by the grant of letters of administration.
- (ii) The cousin holds an interest in the house although he is on no register.
- (iii) The cousin is the registered owner of a half share of the house.
- (iv) Neither interest depends on the register for its existence.
The answer, and why
Answer: A
The rule. An owner holds a present interest that is legal — the name on the title. A beneficiary holds a present interest that is equitable, proved by a trust deed, a grant of probate or letters of administration, or an order of court, rather than by the register. Neither interest waits on registration for its existence.
Why A is correct. (i), (ii) and (iv) state the position. The daughter's authority comes from the grant; the cousin holds an interest although no register names him; and neither interest depends on the register. (iii) is false — the house is still in the deceased's name and the cousin is registered as owner of nothing.
The other options.
- B and D carry the false (iii), which is the natural reading for anyone who equates holding an interest with being on the title.
- C drops the true (i).
Exam note. "Owner" and "beneficiary" are not loose descriptions here. They are separated by *where the interest is proved* — the register or the document — and (iii) is written to blur exactly that line.
More on Legal equitable interests
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