4. Trusts of Family Home

Question 1

Does the equitable interest have to be held in the same form as the legal interest?

Answer 1

No

Question 2

How is this presumption that equity follows the law with regard to an equitable interest in the absence of a declaration of trust rebutted in cases involving the family home?

Answer 2

Using evidence that the parties intended otherwise, either before or after the purchase.

Question 3

What is required for a declaration of trust where legal title is only in the name of one party, and what does it provide?

Answer 3

Declaration of express trust in favour of non-legal owner must be evidenced in writing, and this gives the non-legal owner an enforceable beneficial interest

Question 4

At what time can the declaration of trust where legal title is only in the name of one party be made?

Answer 4

At or after the conveyance

Question 5

Where proprietary estoppel arises in the context where legal title is only in the name of one party, what will the claimant’s remedy depend on?

Answer 5

Their expectation and the detriment actually suffered.

A constructive trust may be imposed on property, such as a house in A’s name that is occupied by A and B as a shared home, to give effect to A and B’s express or inferred common intention (whether at the time of the purchase or subsequently) that B should have a beneficial interest therein, so leading B to act to her detriment in reliance on that intention, this making it unconscionable to allow A to deny B any interest by pleading the lack of the necessary written formalities for a valid declaration of trust or contract.

Question 6

What is a common intention constructive trust, when does it arise, and what are the two criteria?

Answer 6

A constructive trust which arises when claimant attempts to assert an equitable interest in the family home. Claimant must establish:

1. Parties had an express or inferred common intention to own the property, such that the claimant should have an equitable interest, and
2. Claimant relied to their detriment

Question 7

What must a claimant show to establish express common intention?

Answer 7

Actual discussions between the parties, relating to ownership of the property, leading the claimant to this belief. Discussions of a “life together” are not sufficient.

Question 8

In the context of express common intention, when will the court allow the legal owner to give an excuse?

Answer 8

If the excuse would cause a reasonable person to conclude there is some legitimate desire for not having two owners. See example the “excuse” given actually gives rise to a common intention instead of negating it.

Question 9

In what four situations can the court infer a common intention?

Answer 9

1. Direct contribution to purchase price
2. Mortgage payments
3. Payment of household expenses to enable legal owner to make mortgage payment
4. Substantial renovations to the property

Note how this is different from a resulting trust in the property which requires the money to directly fund the purchase, and where options 2-4 would not suffice.

Question 10

What equitable interest is presumed where there is no declaration of trust, and why?

Answer 10

A joint tenancy, because equity will follow the law and a joint tenancy is the only way to hold a legal interest jointly

Question 11

Is a declaration of trust conclusive even if the owners did not make equal contributions?

Answer 11

Yes, unless there is fraud or mistake