Family Homes and beneficial interests

Question 1

What is the nature of the beneficial interest where there is an express declaration of trust. (3 key cases)

Answer 1

The declaration of trust is conclusive as to nature of the benficial interests in the property:

Pettitt v Pettitt [1970] AC 777 (HL) 813

Gissing v Gissing [1971] AC 886 (HL) 905 (Lord Diplock):

• ‘Where the trust is expressly declared in the instrument by which the legal estate is transferred to the trustee or by a written declaration of trust by the trustee, the court must give effect to it.’

Goodman v Gallant [1986] 1 All ER 311 (CA) 314

• If, however, the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of the doctrine of resulting, implied or constructive trusts unless and until the conveyance is set aside or rectified; until that event the declaration contained in the document speaks for itself.’

Question 2

What is the first step where there is no express declaration.

Answer 2

Distinguish between joint names and sole name cases:

• ‘Joint names’ cases: where the parties are co-owners of the relevant interest (e.g. A and B are joint tenants of a legal fee simple estate)
• ‘Sole name’ cases: where just one party holds the relevant interest (e.g. just A holds a legal fee simple estate)

Question 3

Outline the starting point and key questions in a joint names case

Answer 3

The starting point: A and B are joint tenants in equity (or tenants in common in equal shares).

But this ‘starting point’ can be displaced.

First question: did the parties have a common intention that is inconsistent with the starting point (and did one of the parties rely on this to his/her detriment)?

Second question: if so, what is the nature of their respective equitable interests?

Question 4

What is/why is there judicial confusino with regards the starting point in joint names cases

Answer 4

Point of confusion: is the starting point equitable joint tenancy, or tenenacy in common in equal shares:

In Stack and Jones Law Lords asserted that the ‘starting point’ in a joint names case is an equitable joint tenancy, at least if the joint tenants are a couple in an intimate relationship occupying the property as their home.( although note in Jones that both Lord Kerr and Lord Wilson referred to equal shares -a contractiction in terms since joins tenants do no have share, equal or otherwise; they jointly own the whole.

Better view is alhtough in initmate domestic scenarios the starting point is JT, it is submitted hat in some cse a TIC in equal shares is more preferable (e.g. a group of friends) - note that the justification given to the starting point in Jones applied only to couples in an intimate relationship.

Question 5

in joint names cases what is the first question to ask when considering whether the starting point can be displaced.

What is the nature of the common intention?

Answer 5

Question: Did the parties have a common intention that is inconsistent with the ‘starting point’ (and, if so, did the claimant rely on the common intention to his/her detriment)? - Jones v Kernott

Nature of intention:

• Objective Gissing v Gissing [1971] (HL)
• Express or inferred (not imputed) Jones v Kernott

Question 6

in Joint names cases what is the second question?

Answer 6

Second question

If the parties had a common intention that is inconsistent with the starting point, what is the size of each party’s share?

Although Courts should look to the actual or inferred intentions of the parties but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, “the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property” (enables an imputed intent)

Question 7

In sole names cases what is the starting point and the key questions to ask when asessing whether the starting point can be displaced?

Answer 7

A is solely beneficially entitled (i.e. A does not hold the legal estate on trust and, therefore, B does not have an equitable interest).

But this ‘starting point’ can be displaced.

First question: did the parties have a common intention that B would have an equitable interest (and did B rely to her detriment on this common intention)?

Second question: if so, what is the nature of their respective equitable interests?

Question 8

In sole name cases what is the first question?

Answer 8

First question: did the parties have a common intention that B would have an equitable interest (and did B rely to her detriment on this common intention)?

The intention might be express or inferred.

Question 9

By whom, and in what cases are the factors relevant to determining an inferred common intention to rebut the starting point.

Answer 9

The factors that may be relevant when determining whether it is possible to infer a common intention include the factors outlined by Baroness Hale in Stack at para 69

Question 10

What case suggests that in sole-name cases, unless an express declaration of intent is given, only direct contributions to the purchase price determine the existence and shares of the common intentino constructive trust?

Answer 10

Lloyds Bank v Rosset [1991] 1 AC 107 (HL) 132–33 (Lord Bridge)

Question 11

What is the second question to ask in sole-name cases?

WHat does Graham-York v York say regard this question.

Answer 11

If the first question in answered in the affirmative, the next question is: what is the nature of the parties’ respective equitable interests?

Graham-York v York

… It is essential, in my judgment, to bear in mind that, in deciding in such a case what shares are fair, the court is not concerned with some form of redistributive justice.

the judge[was right to have] focused on the relevant consideration, which was the extent of Miss Graham-York’s contribution, both financial and non-financial, in relation to the property which was their family home for many years.

Question 12

Is detrimental reliance on the common intention required in order for a common intention constructive trust to arise?

Answer 12

• The pre-Stack cases suggest yes: ( Grant v Edwards, Lloyds Bank v Rossett)
• Garnder and Etherton have suggested that is/ought no longer to be reuiqred:
  
  • detrimental reliance not mentioned in Jones

Question 13

Does the approaches set out in Stack and Jones apply only in the context of family homes.

Answer 13

Marr v Collie [2017] 3 WLR 1507 (PC):

‘49 The Board does not consider, therefore, that Laskar’s case is authority for the proposition that the principle in Stack v Dowden (that a conveyance into joint names indicates legal and beneficial joint tenancy unless the contrary is proved) applies only in “the domestic consumer context”. Where a property is bought in the joint names of a cohabiting couple, even if that is as an investment, it does not follow inexorably that the “resulting trust solution” must provide the inevitable answer as to how its beneficial ownership is to be determined.