Coownership Flashcards
INTRO-when do you use co ownership?
land owned by more than 1 person= must be a trust in land
INTRO-what is meant by trust?
coownership takes place through “medium of trust device”= the trust of land
INTRO-what does trust do?
separates legal title of land from equitable ownership rights
INTRO-what is the legal title held by?
trustees= named paper owners of land - trustees and beneficaries are often the same people
INTRO-what is equitable ownership?
trustees hold land just for beneficiaries who are entitled to equitable rights
INTRO-what are the 3 types of trusts?
expressed
resulting
constructive
no matter what form of coownership
EXPRESSEDT- what is an expressed trust? requirements
where legal owners of prop declare they hold prop just for specified beneficaries, it can be created through conveyance of land or a declaration of trust
- must be an intention to create the trust- legal owner must make it clear that intends to hold prop for beneficary
- decl of trust
EXPRESSEDT- what must an expressed trust be in?
must be evidenced in writing, signed by parties declaring trust will make it valid according to s.53 (1)(b)
cases:
smith
roche
terms-iles v iles
EXPRESSEDT- when does dot typically happen?
Typically when 2 or more people co-purchase or otherwise co-acquire land, a Deed of Transfer Form TR1 if the land is already a registered title or if an unregistered title triggering first registration Form FR1), is executed.
EXPRESSEDT- what is tri/fr1?
Thus, E.g TR1/FR1 is the Deed which assigns the title to be sold (e.g freehold) from the Seller to the Purchasers, (see Megarry and Wade pp. 241-242).
EXPRESSEDT- box 10?
On the form (Box 10) the Declaration of Trust will be executed, declaring that the Co-Purchasers hold the land, as trustees, on trust for either themselves (as Joint Tenants/Tenants in Common) or in some other fashion or for some other people (e.g for X for life remainder to Y).
EXPRESSEDT- what does expressed trusts override?
principles of resulting/constructive trusts
EXPRESSEDT- when can expressed trusts ONLY override?
The Declaration of Trust will, in the absence of undue influence, fraud or duress be ‘conclusive’ as to the equitable ownership position, see Goodman v Gallant
EXPRESSEDT- d.o.t conclusive?
goodman v gallant
extenet of shareholding set out in d.o.t-conclusive-pankhania case
EXPRESSEDT- what must you do in exam?
if you have expressed trust use it first - if yes 50%= joint tenants - if dec of trust conveys shares = tenants in common
EXPRESSEDT- what if there is no expressed trust?
law will imply beneficial interest entitlement from conduct.- parties failed to state extent of their ownership in conveyence
EXPRESSEDT- situations of no expressed trust? + cases?
- parties= commerical parties
- where parties intend to operate seperately from premises
- unequal contrib to purchase price
- where circum indicate tenancy in common more approp
- land conveyed in 2 name of more than 1 person and no express dec how owners how ownership is divided, the law raises a presumption of joint tenancy
EXPRESSEDT- so when there is no express trusts what is the next best option?
resulting trusts
constructive trusts
RESULTING T-when do resulting trusts arise?
arise by operation of law/equity and are exempt from any formality requirement of writing, S.53(2) LPA 1925.
Resulting trusts arises through a direct contribution to the purchase price and the beneficial interest which arises is in exact proportion to the amount contributed. Ie if a person contributes 10% of the purchase price they will hold 10% of the beneficial interest. As this is a 10% share of the beneficial interest this can only ever be held as a tenant in common.
RESULTING T- e.g of resulting trust?
person contrib 10% of purchase price = hold 10% of beneficial interest. 10% share= this can only be held in tenant in common
RESULTING T-what can you not have with resulting trusts?
full equitable ownership - bull v bull
RESULTING T-what case caters for resulting trust?
re vandervell’s trust (no.2) - 2 categories :
- automatic resulting trust
- presumed resulting trust
RESULTING T-what is an automatic resulting trust?
Where a Trust does not exhaust/establish an equitable interest..
- convey has to be on trust but forgot to put ben- so equity has to go somewhere he equals to eq owner= resulting trust kicks in - owner hold resulting trust for settlor- therefore eq title in land -merchant
RESULTING T-e.g of automatic resulting trust?
E.g Where land (say a freehold) is conveyed by A to B ‘on trust’…but which does not say for who! Here a resulting trust by operation of law kicks in, to establish that B holds on a resulting trust for ‘A’ (the Settlor), Merchant Taylor’s Co. v A.G - A therefore has the equitable title to the land.
RESULTING T-what are the presumed resulting trusts?
(b) Purchase of Land in Another’s name
land transferred to - a but b contributes towards purchase price -Trust in favour of the person providing the purchase money (i.e B) to the extent of his or her contribution, in equity, Dyer v Dyer
meaning the person that makes the contribution will take a share in the equitable ownership of the property in proportion to their contribution
RESULTING T-what is the presumption?
In these situations it is presumed that the person did not intend to make a gift of the property or money unless there is a clear intention that they did so intend. In such circumstances a resulting trust arises and the transferor or the person making the contribution retains or takes a share in the beneficial interest.
RESULTING T-what can rebut the presumption?
Evidence of a Loan or Gift of the money can rebut this Presumed Resulting Trust, see, Fowkes v Pascoe (1875) - that a gift was intended. This is known as the presumption of advancement.
If there exists evidence that a gift was intended, this will rebut the presumption of resulting trust and the transferee will be absolutely entitled to the property and the transferor will not be entitled to any share in the beneficial ownership
RESULTING T-Evidence of the Presumption of Advancement ?
In certain relationships it is presumed that a gift was intended unless there is evidence that the transferor intended to retain an interest.
Moate v Moate - (presumed gift in equity from Husband to Wife, Parent to Child).
Tinsley v Milligan - presumed gift in eq - husband wife parent to child
RESULTING T-when can a presumption of advancement be displaced?
The presumption of advancement may be displaced if there is evidence that no gift was intended
CONSTRUCTIVE T- what are constructive similar with resulting trusts in?
arise by operation of law and are exempt from any formality of writing to be enforceable, S.53(2) LPA.
CONSTRUCTIVE T-broad terms of constructive trusts?
Constructive trusts can be imposed by the court so as to award co-ownership shares to the land in equity behind a trust in favour of a claimant ’wherever justice and good conscience require it’.
e.g - if a gives boyf mortage after purchase prop/capital improvements= constructive trust- a claim land in equity
CONSTRUCTIVE T-what is the constructive trust device?
‘to award an equitable share of the land in favour of a party (A) who has to his or her detriment relied upon an common intention with the landowner (B) that he or she (A) will acquire an interest in the land of B’.
CONSTRUCTIVE T-what are constructive trusts based on?
based on a common intention rather than a mathematical formular as to proportion of contribution
CONSTRUCTIVE T-what is the courts role based on constructive trusts?
The courts role is to seek to give effect to the common intention when considering how beneficial ownership is held
CONSTRUCTIVE T-cases for courts seek?
Midland Bank v Cooke [1995] 4 All ER 562
Jones v Kernott [2011] UKSC 53
Stack v Dowden
CONSTRUCTIVE T-when are constructive trusts applied?
trusts that may be implied in the absence of a declaration of trust, where the trustee has induced another to act to their detriment in the belief that if they do so act to their detriment they would acquire a beneficial interest in the land (Gissing v Gissing
CONSTRUCTIVE T-what do constructive trusts overlap?
resulting trusts- coth contrib but rt more mathematical this is more shares in ct more factors = greater contrib
prop estoppel- require det, owner cant deny exist of b
also However Resulting Trusts tend to operate where ab initio land is purchased in one person’s name and another, at that time, contributes to the acquisition costs.
i
CONSTRUCTIVE T-foundation of ct?
come from Gissing v Gissing
- Inducement- legal owner of the land induced the claimant to believe they would be entitled to a share in the ownership.
2. Claimant must act to their detriment
CONSTRUCTIVE T-2 ways of inducement?
i) Express agreement
ii) Contribution to the acquisition-where e.g B owns land, A moves in with B sometime thereafter and A then contributes towards the costs of the property (e/g mortgage payments or capital improvements works), and then A claims a ‘share’ of the land in equity.
CONSTRUCTIVE T-what is meant by c must act to det?
eg by contribution to purchase price.
CONSTRUCTIVE T-who reaffirmed the approach of constructive?
Restatement of principles underpinning constructive trusts
-Lloyds Bank v Rosset- requirements =
common intention-that both parties should have a beneficial interest in the property
and detriment- ) that A acted to his or her detriment on the basis of that common intention so that it would inequitable for A to deny B an interest.
CTCOM-common intention to share beneficialy aproach?
-Lloyds Bank v Rosset- drew distinction between express and inferred
CTCOM-common intention expressed?
requires evidence of express discussions between the parties which demonstrates that the property is to be shared beneficially -HSBC Bank Plc v Dyche -, Lloyd’s Bank v Rosset
Hammond v Mitchell - quote on slide
CTCOM-what comes about in the absence of an expressed common intention?
inferred common intention
CTCOM-what is common intention inferred when would it happen?
-was of the opinion that only a substantial contribution to the purchase price would suffice,Can be inferred from A regularly contributing to/paying the mortgage or making a cash contribution to acquisition costs-lloyds,stack,abbot
(Loans and gifts of money from A to B, will not suffice here as evidence of a ‘common intention to share’, -Spence v Brown (1988) Risch v McFee [1991]Stokes v Anderson
-(b) May be inferred from the parties ‘whole course of conduct in relation to the property’, E.g substantial improvement works , -
Stack v Dowden, Midland Bank v Cooke [1995],Hussey v Palmer
-No common intention can be inferred where the legal owner was unaware of the contribution
Lightfoot v Lightfoot-Brown
-
CTCOM-where does difficulty arise in expressed common intention?
Difficulty arises with ‘excuse’ cases
Eves v Eves [1975] 1 WLR 1338
Grant v Edwards [1986] Ch. 317 638
Rowe v Prance
CTCOM-what must a show after common intention has been satisfied?
detrimental reliance
, A must then show that she or she relied on that intention/agreement to his or her detriment. Detriment here means an ‘irrevocable change of position’ and be of a kind which A could not reasonably have been expected to make unless he or she was to have an interest in the land.
RELIED, IRREOVACBLE CHANGE, WOULDNT MAKE UNLESS INTEREST (BENFICIAL INT)
CTDET-what will not suffice as det reliance?
A, carrying out normal domestic duties like washing, cleaning, housework, shopping paying domestic bills will not amount to ‘detrimental reliance’, so as to generate an equitable interest, see, Burns v Burns [1984] Ch 317.
CTDET-examples of det reliance?
However paying direct mortgage contributions to the purchase price, or carrying out substantial capital improvement works will suffice, see,
Ungurian v Lesnoff [1990] Ch.206, Maharaj v Chand [1986] AC 898; Chun v Ho [2002] EWCA Civ.
CTDET-when does eq interest happen?
The equitable interest under any such constructive trust crystallises at the time of A’s detrimental reliance’ on the agreement, whenever that time is. The court then on hearing the evidence latterly, declares the equitable interest in favour of A under/imposes the constructive trust.
See Bernard v Josephs
QUANTIFYBEN- quantifying beneficial interest?
Where there is an express common intention, the claimant should be entitled to share of the equitable ownership based on what share was intended.- dont worry e.g - EQUAL SHARE 50/50
Where the parties have not expressly agreed the size of A’s share but there is a general common intention to share the land, coupled with acts on A’s part of detrimental reliance, the court will award a ‘fair share’ in favour of A under the Constructive Trust which is deduced from all relevant circumstances and acts on the part of A, Stack v Dowden HL (above).
where parties have common intention inferred - cts will asess in fair share
QUANTIFYBEN-what would the court do before?
Previously the court would ascertain the size of A’s share in such instance by an equitable accounting exercise, looking at that behaviour on the part of A which amounted to ‘substantial contributions to the purchase price’, Lloyd’s Bank v Rosset
QUANTIFYBEN-what do the courts do nowadays?
‘survey and examine the entire course of conduct between the parties so as to determine the appropriate size of A’s share’ under the Constructive Trustee, Oxley v Hiscock (2007) per Chadwick L.J, Midland Bank v Cooke [1995] 4 All.E.R 562; Drake v Whipp [1996] IFLR 826.
more flex approach-Where the common intention is inferred, the court is required to make an assessment by undertaking a survey of the whole course of dealing between the parties:
QUANTIFYBEN-when can quantifying beneficial interest also happen?
Quantifying the beneficial interest where legal title is in joint names
QUANTIFYBEN-what is Quantifying the beneficial interest where legal title is in joint names? presumption?
Where legal title is held jointly between A and B but no express declaration of trust has declared the beneficial equitable ownership, the normal presumption - if joint legal ownership is there joint benef interest
QUANTIFYBEN-quote for presumption?
equity follows the law’ and the equitable title is deemed held jointly also. Thus when sold, the proceeds would be in equal shares, Stack v Dowden HL (above).
QUANTIFYBEN-what happened in stack?
In Stack v Dowden however, in the same instance Mrs Dowden sought to depart from this normal presumption as to the equitable title. Baroness Hale found for Ms. Dowden and awarded her a larger share of the property on the basis that Ms Dowden on the evidence could demonstrate a ‘contrary intention’, to rebut the normal equitable rule.
she got more based on contrib so not equal?
QUANTIFYBEN-so what does stack tell us in rebutting presumption?
that the parties true intentions which might rebut the normal presumption of equality would include
QUANTIFYBEN-how do they examine true intentions?
examining financial contributions; advice and discussions had; reasons as to why the home was acquired in joint names; how the parties arranged their finances and the parties personalities and characters.
QUANTIFYBEN-what if true intentions cant be estab?
Where it can not be established what the parties actual intentions were, it is possible to infer intentions as to the share holding: -Jones v Kernott
CONSTRUCTIVE T-when can constructive trusts also arise?
- Constructive trusts tend to arise, in ‘subsequent acquisition situations’, where e.g B owns land, A moves in with B sometime thereafter and A then contributes towards the costs of the property (e/g mortgage payments or capital improvements works), and then A claims a ‘share’ of the land in equity.
- Where the parties are married and divorcing, the court has a unique statutory jurisdiction under S.24 Matrimonial Causes Act 1973 to make property adjustment orders after divorce, to rearrange and award property rights to former spouses.
- In cases where former cohabitants/partners have parted and a dispute arises over the ownership of the land, where the land is solely registered in the name of B, claimant A can claim a share of the land under a Constructive trust if A can show that there was an express or implied common intention (between A and B) to share the land beneficially and that A has acted to his or her detriment in relying on the agreement.
CONSTRUCTIVE T-cases for constructive trusts in all?
Fowler v Barron - ct Driver v Yorke - not every direct contrib= ct Lightfoot v Lightfoot-Brown James v Thomas Adekunle v Ritchie Abbot v Abbot Jones v Kernott Hapeshi v Allnatt [2010] Thompson v Humphrey [2009]
EXTRA: what will a sometimes do with constructive trust and prop estoppel
claimant A will plead both doctrines in support of any claim for the award of an equitable share of the land.
See also 2007 Law Commission Report No.307, Hughes, Davis, Jacklin [2008] Conv.197, ‘Statutory Property Order’ Reform proposal to replace implied trusts, contract and estoppel arguments’.
