Co-ownership II

Question 1

What is the starting point for Co-ownership II?

Answer 1

An instance where A is the sole title holder.

The court must decide whether co-ownership should be implied in favour of B the cohabitee who has no claim as a beneficial joint tenant or tenant-in-common.

Question 2

What is B claiming?

Answer 2

That they have an entitlement to the proceeds of sale.

Question 3

Who has made the law in this area? Why

Answer 3

It is judge-made.

Under co-ownership II the parties are not married - there are distinct rules for married couples.

Question 4

What are implied trusts?

Answer 4

Trusts which arise without formalities. Through the operation of law (resulting trust) or through the imposition of the courts (constructive).

Question 4

What was the significance of Abbott v Abbott?

Answer 4

The constructive trust is more useful than the resulting trust for co-ownership.

Question 5

How do resulting trusts work?

Answer 5

If B makes a direct contribution, they have an equitable interest in the estate proportionate to what they put in.

There won’t be a resulting trust if B’s direct contribution is a gift - the presumption of advancement.

Question 6

What forms can a direct contribution take?

Answer 6

1. contributions directly towards the purchase price.
2. entitlements which lower the cost of the land - Oxley v Hiscox.
3. Making contributions which add something permanent to the land and substantially increase the value of the land.

Question 7

What was the issue with Hosking v Michaelides?

Answer 7

Spending £29,000 on a swimming pool did not actually increase the value of the land.

Question 8

What was the court’s initial view of indirect contributions?

Answer 8

The court would not initially take account of indirect contributions.

Question 9

How about today?

Answer 9

The relevance of indirect contributions is very limited.

Lloyds Bank v Rossett - constructive trusts give rise to a presumptive 50/50 split.

There must be a direct contribution in order for a constructive trust to arise.

Question 10

What does the court need to find for a beneficial entitlement under a constructive trust to arise?

Answer 10

1. There is a genuine common intention to share.

2. The claimant has relied on that common intention to their detriment.

Question 11

What are the two ways in which the common intention to share can be evidence?

Answer 11

1. Arising from something the defendant said to the claimant.
2. It could be implied from B’s direct contribution.

Question 12

What is the first main case on intention to share?

Answer 12

Eves v Eves - A had lied to B about having her name on the title deeds.

The court found that this was indicative of an intention to share.

Question 13

What is the second main case on intention to share?

Answer 13

Grant v Edwards - A told B it would be inadvisable to have her name on the title as it would prejudice her divorce proceedings, but this was a lie - it would have no effect.

A’s lie was indicative of a common intention to share the property.

Question 14

What is the problem in Eves v Grant?

Answer 14

How are the statements indicative of an intention to share? It sounds like it should be the exact opposite.

But for these statements, B would have insisted that her name appear on the title deeds as well as A’s.

Had A not lied to B, they would be co-owners.

Question 15

What do the decisions in Eves and Grant say about remedial constructive trusts?

Answer 15

The court played a counter-factual and used its discretion.

Question 16

What was the result in Midland Bank v Cooke?

Answer 16

Mr C purchased the house in his name using his money, mortgage and £1,100 from a wedding present.

The CA found that £550 was her direct contribution and she was awarded a 50% share under a constructive trust.

Mrs C had waived her rights as an actual occupier and therefore suffered a detriment and had also taken time off work for child-raising.

Question 17

Why was Midland Bank v Cooke a bit controversial?

Answer 17

The Cookes were married so the CA did not need to find a constructive trust in the way they did.

It created a situation where you could directly contribute a small amount and be entitled presumptively to 50% but could indirectly contribute a lot and receive beneficial title to nothing.

Question 18

What did the courts find with regard to intention to share in Stack v Dowden?

Answer 18

All of the affairs being kept separate and the unequal nature of the payments, meant that there was no intention to share.

Question 19

What did the HL say in Stack v Dowden?

Answer 19

After establishing beneficial entitlement;

The court will look at the whole course of the parties’ dealings in order to quantify their entitlements. This can include taking indirect contributions into account.

Question 20

What did the SC find in Jones v Kernott?

Answer 20

Until 1993 when K moved out, the presumptive split was 50%.

But when he left the house it wasn’t reasonable to assume that the parties intended that K should have a significant part of the increased value.

The split was 90/10 - allowing for the mortgage repayments and building work of K.

Question 21

What was similar between Stack v Dowden and Jones v Kernott?

Answer 21

They both take into account the course of dealing.

Question 22

What are the two ways to determine entitlement?

Answer 22

1. Direct contribution.

2. Words expressing intention to share.

Question 23

How does Jones v Kernott go further than Stack v Dowden?

Answer 23

If the court can’t work out what shares were intended, the court should ask what the parties’ intentions as reasonable and just people would have been.

Lord Wilson said that the court should be inferring, not imputing intentions.

Question 24

What has been the problem with imputation?

Answer 24

The High Courts have had difficulty imputing intention based on reasonableness.

The direct contribution (or not) may be down to chance, and neither Stack nor Kernott have dealt with this problem.