Constructive Trust Flashcards
When do constructive trusts arise?
Constructive trusts arise in any situation when an owner of property either ignores/interferes with the rights of another person with an interest in that property.
No formalities are required.
Unconscionable conduct by the trustee/s triggers a constructive trust.
What are the rebuttable presumptions following Stack v Dowden?
A sole legal owner is presumed to be a sole beneficial owner.
Joint legal owners are presumed to be equitable joint tenants.
Sole legal ownership cases - what is the two-stage test that applies when determining common intention?
- C must show that there was a common intention/agreement that they should have a beneficial interest.
- Detrimental reliance on that intention.
Does unequal contribution to the purchase price suggest that the property is held in unequal beneficial shares?
Even those who have contributed to the purchase price in unequal shares, will not automatically be deemed to hold unequal beneficial shares if the property is held as joint tenants. They will need to evidence a contrary intention.
What is the difference between a constructive trust and a resulting trust?
Constructive trusts: put right a moral wrong. Arise by operation of law, not dependent on intention.
Resulting trusts: fix a failed intention. Return the beneficial ownership back to the settlor.
When does the doctrine of proprietary estoppel apply?
Applies when:
C can show a promise/assurance (on the part of the legal owner) that they are to have a share in the family home.
C relied on the promise to their detriment.
The promise can be active/passive.
Common intention constructive trust inferred from conduct - requirements:
Express/inferred agreement to share the property
Detrimental reliance - generally there must be financial detriment e.g. paying part of the purchase price, contribution to the initial deposit, mortgage payments
