Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549

The determination of beneficial interests of joint tenants in common in equity.

Facts

Two persons leased a property for the purposes of their separate businesses. The parties pre-determined the areas of occupation of the premises as 2,306 square feet for one and 3,614 square feet, dividing the rent, service charges and other invoices accordingly. A dispute arose as to their beneficial interests in the property.

Issues

The question arose as to whether the parties are beneficially entitled to the business premises as joint tenants in common in equal shares or as joint tenants in common in unequal shares.

Decision/Outcome

The Court upheld the principle that, in the absence of an express agreement in equity, the presumption is that joint tenants at law are to be treated as tenants in common in equity of the beneficial interest. However, this presumption of joint tenancy in equity can be displaced when the circumstances indicate (1) unequal purchase contributions, (2) unequal loans or mortgages, (3) business partnerships, and any other circumstances in which equity may infer unequal beneficial interests. On the facts, the Court overturned the Court of Appeal, and held that, the parties are beneficially entitled in unequal shares on the basis of their separate commercial interests, their pre-determined separate areas of occupation, and divisions of liabilities for rent and service charges in unequal shares. Based on these circumstances, the Court rebutted the ordinary presumption and held that the parties are tenants in common in equity holding the beneficial interests in unequal shares to be divided in proportion with each business premises’ allocated areas (3,614 and 2,306 square feet respectively).