Implied trusts Flashcards
In what three situations do resulting trusts arise?
- Where a transfer on trust wholly or partially fails but the property has been transferred to the trustee
- Where a person gratuitously transfers property to another person
- Where a person pays all or part of the purchase price for an asset
When do automatic resulting trusts arise?
These arise where there has been some sort of failure in the creation of a transfer on trust. They are effectively a default position which returns the beneficial interest to the settlor.
When do presumed resulting trusts arise?
These arise in situations where a transfer is gratuitous and there is no evidence that the transferor intended to receive the property as a gift.
What are common intention constructive trusts (CICTs)?
A CICT arises when two or more people agree that an asset should be beneficially owned in a certain way, but fail to formally document that agreement.
What is the starting point regarding joint legal owners in relation to CICTs?
Under Stack v Dowden (1970), the starting point is that equity follows the law therefore joint legal owners are presumed to be equitable joint tenants.
What is the two step approach in joint legal ownership cases established in Jones v Kernott (2011)?
- Rebutting the presumption that equity follows the law-heavy burden requiring unusual facts
- Quantification-if the C succeeds in rebutting the presumption, it is necessary to quantify the interest of the parties taking into account the whole course of conduct.
Describe the case of Stack v Dowden (2007) in relation to CICTs.
FACTS: the couple were in a relationship for 27 years and raised 4 children together. Whilst they purchased their shared home in joint names and both contributed to the deposit and mortgage, they otherwise kept their finances rigidly separate and maintained financial independence.
HELD: this was held to be indicative that they did not intend a beneficial joint tenancy or to have equal shares of the house. Ms Dowden was awarded a 65% share and Mr Stack a 35% shares.
What is the two step approach in sole legal ownership cases in relation to CICTs?
- Establishing an interest-best evidence will be express agreement e.g. ‘half yours’ or ‘50:50’, and has the person relied on this to their detriment?
- Quantification-express agreement will be best evidence, if not possible the Court may impute an intention for fair shares
What is proprietary estoppel?
Proprietary estoppel is an equitable doctrine which enables a person to informally acquire property (or personal rights).
Its objective is to prevent unconscionable conduct and enables the Court to do justice by modifying the parties’ strict legal rights.
What are the three main elements of a proprietary estoppel claim?
- An assurance made to the C that the C has or will acquire a right in property owned by the D
- Reliance by the C on the assurance-causal link between the assurance and reliance
- Detriment to the C in consequence of their reliance-this can include expenditure, provision of services without payment and other quantifiable financial detriment
What are the range of remedies that can be awarded for proprietary estoppel?
The range of remedies which have been awarded include orders directing a D to transfer ownership of property to the C, hold property on trust for the C and grant the C a right over the property, or pay a sum of money to the C.
What principles should guide the Courts in deciding what remedy to award in proprietary estoppel cases?
Guest v Guest (2022) identified the principles which should guide the Courts in deciding what remedy to award:
-the remedy should never exceed the C’s expectation
-the simplest way to remedy the unconscionability constituted by the repudiation is to hold the promisor to the promise
-in cases where this would not be appropriate, the Court must award a remedy which does justice between the parties
-if there is more than one appropriate remedy available, the Court should allow the D to choose which one of those remedies should be awarded to the C
