Implied Trusts of the Home

Question 1

What are the two situations which concern implied trusts of the home?

Answer 1

1. When the home is registered in both names but there is no express declaration of trust;
2. Where one party has legal interest and the other claims beneficial interest.

Question 2

Why do the issues around implied trusts of the home not affect married couples or civil partners?

Answer 2

Married couples are protected under the Matrimonial Causes Act 1973.
Civil partners are protected under the Civil Partnership Act 2004.

Question 3

In what one instance will a married couple be affected?

Answer 3

When a mortgagee is trying to repossess the home to set off the loan.

Question 4

What is the only question for the court when it is clear that both parties have legal interest?

Answer 4

The size of the beneficial interest.

Question 5

What will the court look for first if the home is registered in both names?

Answer 5

The court will look for an express declaration to follow (Pettit v Pettit), which is in signed writing in accordance with s53(1)(b) LPA 1925 (Gissing v Gissing) so that it may be enforceable.

Question 6

Which authority do the courts revert to if there is no express declaration of trust?

Answer 6

ICICT in Lloyds Bank v Rosset

Question 7

What is the first presumption under Stack v Dowden?

Answer 7

Equity follows the law ie if the house was mortgaged jointly the beneficial interest shall also be held jointly (although they may be severed to create a 50-50 tenancy in common).

Question 8

How may the presumption ‘equity follows the law’ be rebutted?

Answer 8

If the person claiming can show that the initial intention was a different apportionment or that subsequently they had changed their minds, using either express or inferred proof viewed objectively. Specifically, financial contributions alone is not enough to rebut.

Question 9

What is the starting point for the court before rebutting the presumption ‘equity follows the law’?

Answer 9

50-50 split for joint owners and 100-0 split for sole legal owner.

Question 10

How likely is it that a 50-50 split may be rebutted?

Answer 10

Very unlikely (Fowler v Barron).

Question 11

Why did the court decide Stack v Dowden was an unusual case?

Answer 11

The wife had contributed a large proportion financially and their finances had been kept apart rigidly.

Question 12

How was the home apportioned in Stack v Dowden?

Answer 12

65/35 in favour of Ms. Dowden.

Question 13

What five points did Baroness Hale and Lord Walker confirm in Jones v Kernott?

Answer 13

1. Starting point is equity follows the law and partners are joint tenants in law and equity;
2. The presumption can be displaced either by showing an initial different intention or a subsequent change;
3. Common intention is to be deduced from conduct, whether conscious or not (per Diplock in Gissing v Gissing, and Hale in Stack v Dowden);
4. Where it is clear intention is different but there is no direct evidence the court will grant what is fair having regard to the whole course of dealing with the property (per Chadwick LJ in Oxley v Hiscock)
5. Each case will depend on its own facts.

Question 14

What were the relevant factors Baroness Hale thought fit to include in deciding partners’ shares in Stack v Dowden (9 factors)?

Answer 14

1. Financial contributions, taken nominally but also proportionately ie how much could each reasonably pay
2. Advice of discussions at time of purchase
3. The reasons why the home was acquired in joint names
4. Why the home was acquired
5. The nature of the parties’ relationship ie mercenary or marital
6. Children
7. How the purchase was financed, both initially and subsequently
8. How the parties arranged their finances
9. Household expenses

Question 15

In Fowler v Barron, the man had paid the deposit, all the mortgage payments, and direct outgoings. Was he able to rebut the 50-50 presumption?

Answer 15

No

Question 16

In Adekunle v Ritchie how was the mother able to rebut the 50-50 presumption over her son who were joint tenants?

Answer 16

The home was bought for her and she had intentions to benefit all her sons with her only asset.

Question 17

According to Laskar v Laskar in what situation does Stack v Dowden not apply?

Answer 17

When the property is bought as an investment.

Question 18

What is the starting presumption when the property is registered in only one name?

Answer 18

That person shall have the entire beneficial interest (Gissing v Gissing; Stack v Dowden; Jones v Kernott)

Question 19

According to Lloyds v Rosset how may the presumption against the registered owner having beneficial interest be rebutted?

Answer 19

If there has been express declaration of shared ownership, not shared occupation eg “our house” etc

Question 20

What other way, given in Jones v Kernott by Baroness Hale and Lord Walker, could the presumption against the whole beneficial interest going to the legal owner be rebutted?

Answer 20

The courts may impute objectively from the parties’ conduct if the evidence shows there were to be different shares, but not what those shares were.

Question 21

What does the method employed in Jones v Kernott tell us about using resulting trusts to find parties’ shares?

Answer 21

There is no need to use resulting trust principles.

Question 22

What did Lord Bridge say was necessary to find an ICICT?

Answer 22

In Lloyds Bank v Rosset, Lord Bridge said only direct contributions to the purchase price, either initially or by mortgage payment, would grant a beneficial interest in the property.

Question 23

In addition to paying for the purchase price of the house what did Fox LJ say in Burns v Burns would show a contribution?

Answer 23

Payments for family expenses which allows the mortgage to be paid by the other.