4. Trusts of Family Home

Question 1

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

Answer 1

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

Question 2

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

Answer 2

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 3

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

Answer 3

At or (rarely) after the conveyance

Question 4

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 4

Their expectation and the detriment actually suffered

Question 5

When does a common intention constructive trust arise, and what are the two criteria a claimant must establish?

Answer 5

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 (rather than just reside in it), such that the claimant should have an equitable interest, and
2. Claimant relied to their detriment

Question 6

What must a claimant show to establish express common intention?

Answer 6

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 7

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

Answer 7

If the excuse would cause a reasonable person to conclude there is some legitimate desire for not having two owners, otherwise an excuse for no joint ownership will be taken as evidence of common intention (eg. ‘you’re too young’/’it will prejudice your divorce’

Question 8

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

Answer 8

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 9

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

Answer 9

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

Question 10

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

Answer 10

Yes, unless there is fraud or mistake

Question 11

In the quantification stage, what is the Lady Hale approach?

Answer 11

Take an holistic approach, not necessarily requiring direct financial contributions.
Consider:
contributions, discussions, nature of the relationship, outgoings, children, financial arrangements
Do NOT make moral judgements, considerations should only relate to the parties’ use of the property.

Question 12

For CICTs, when may the court impute what it considers to be fair shares?

Answer 12

ONLY for the quantification stage and
ONLY for ICICTs
Use Lady Hale factors

Question 13

What is the approach of proprietary estoppel remedies re: C’s expectation.

Answer 13

MAY satisfy C’s expectation but may also just try to compensate for the loss of that expectation (or provide no remedy at all).
Must NOT exceed C’s expectation