Implied Trusts of the Home Flashcards
Where do Implied Trusts of the Home apply?
This area focus on cohabitees as not covered under Matrimonial Causes Act or Civil partnership act – have to rely on trust law.
- s53(1)(b) LPA 1925 – trusts of land must be formalised (proven by signed writing by person capable of declaring the trust). People tend not to think of these things in real life
- s53(2) LPA 1925 – implied trusts are immune to formalities of s53(1)(b) LPA 1925 – this is what the courts have used to get around the requirement.
Two Legal Owners
Scenarios where Implied Trusts of the Home apply
- Both joint tenants; if one dies, the other inherits; at law they are equal owners of that land; equity treats it the same way so presumption of 50/50 ownership
a). Rebut presumption of 50/50 Ownership
- Sometimes, following a break up, 1 party will say they are owed more than 50%. Have to convince court of this
b). Quantification Question
- If do convince the court, they then decide on the split
One Legal Owner
Scenarios where Implied Trusts of the Home apply
- Friends, couple etc, bought property together, but one on legal title. Presumed to have 100% beneficial interest.
a). Acquisition question
- Have to demonstrate you have an interest in the land
b). Quantification question
- Only then will court look at quantification
Rationale behind Stack v Dowden / Jones v Kernott
Joint Legal Owners
Joint legal owners – Equity follows the law
- Legal title held by A and B so Equitable title held by A and B
Stack v Dowden (2007)(HL) & Jones v Kernott(2011)(SC)
- This presumption is rebuttable, but have to produce compelling evidence why not 50/50
- Trying to ascertain common intention of parties – if it is to divide 50/50, court will go with that
- If common intention is not to divide 50/50, court can then go on to quantification
- Look at common intention at point of acquisition OR later as the relationship changes (ambulatory) (may not be an intention to share the property at beginning of relationship)
Fowler v Baron
Finding Common Intention
Implied Trusts of the Home
- Traditional relationship, man works, woman takes care of family, man argued worth more than 50% of home and court refused – intention was that you share 50/50. It’s irrelevant that you paid for the mortgage.
Stack v Dowden [2007]
Finding Common Intention
Implied Trusts of the Home
- Look at everything to Infer Common Intention (ascertain what they want):
- Contributions to home
- Discussions between parties – informal and formal
- Nature of relationship – do they act like a married couple
- Outgoings – who pays utilities, food?
- Personalities of the parties
- Any children?
- Finances – who pays for the deposit, the mortgage
- Lady Hale made it clear that the presumption will not be rebutted lightly in cases of join ownership.
- Party seeking the rebuttal must produce the relevant evidence.
Stack v Dowden [2007]
Facts of the Case
Finding Common Intention
Implied Trusts of the Home
Dowden had contributed much more; didn’t have a quasi-matrimonial relationship (no shared accounts); Stack had bank statements sent to his parents house etc
Court decided that they didn’t tend to share things 50/50; Dowden contributed much more. Therefore, rebuttal successful
Jones v Kernott [2011]
Facts of the Case
Finding Common Intention
Implied Trusts of the Home
- Woman was a mobile hairdresser, man ice cream salesan; had a close relationship when they were together.
- Mutual parting and then 10 years later sued for a piece of the property that they had lived in together. Court decided at the time he left, intention was to share 50/50.
- However, he had been gone for a long time – stopped paying for mortgage, outgoings etc, anything to do with children.
- They also cashed in joint insurance policy and split 50/50. He used it to put money down on a new asset. Court said it was this and not paying for anything allowed him to afford the new property, and so once he had done this his interest in the home diminished over time.
- She is still paying money into the home every month so her share increases and his diminishes.
- Common intention has changed over time so rebuttal of presumption is successful
Jones v Kernott [2011]
Principles for Joint Ownership Legal Cases
Implied Trusts of the Home
- Equity follows the law – therefore, presumed joint tenants
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Presumption can be displaced by evidence that:
- The common intention of parties was different at time of acquisition
- Although presumption could not be rebutted at time of acquisition, parties later formed a differed common intention
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Common intention is to be deduced objectively from conduct. Court considers what each party would reasonably have understood to be the intention of the other. Examples of conduct listed in Stack v Dowden
- Contributions to home
- Discussions between parties – informal and formal
- Nature of relationship – do they act like a married couple
- Outgoings – who pays utilities, food?
- Personalities of the parties
- Any children?
- Finances – who pays for the deposit, the mortgage
- Where presumption rebutted by such evidence, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to quantification of their shares, the court will impute common intention having regard to the whole course of dealing between them in relation to the property
- Each case will depend on the facts. Financial contributions are relevant, but there are many other factors (as above)
Jones v Kernott [2011]
Principles for Sole Legal Ownership Cases
Implied Trusts of the Home
- Starting Point is different as the non-legal owner does not appear to have any interest in the property
- First question is was it intended for the non-legal owner to have any beneficial interest in the property at all?
- If so, the second question is to quantify that interest. As with joint legal ownership, this requires an objective assessment of their common intention
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Common intention is to be deduced objectively from conduct. Court considers what each party would reasonably have understood to be the intention of the other. Examples of conduct listed in Stack v Dowden
- Contributions to home
- Discussions between parties – informal and formal
- Nature of relationship – do they act like a married couple
- Outgoings – who pays utilities, food?
- Personalities of the parties
- Any children?
- Finances – who pays for the deposit, the mortgage
- If evidence shows a common intention to share beneficial ownership, but it is not possible to infer parties intentions as to precise shares, court will impute ‘fair shares’ in light of whole course of dealing between the parties.
Ways to acquire an interest in a property when not the sole legal owner
- Way to acquire an interest is on resulting or constructive trust
- purchase money resulting trust (traditional way)
-
common intention constructive trust (more common today)
- Express common intention constructive trust (ECICT)
- Inferred common intention constructive trust (ICICT)
Bull v Bull [1955]
Purchase Money Resulting Trust
Acquiring an Interest when not the Sole Legal Owner
Implied Trusts of the Home
- Traditional way of establishing interest in piece of land not on legal title of
- Mother provides part of money but not on title
- Court states have to contribute to the deposit or the mortgage
NO LONGER USED IN CONTEXT OF FAMILY HOME
Lasker v Lasker
Purchase Money Resulting Trust
Acquiring an Interest when not the Sole Legal Owner
Implied Trusts of the Home
Purchase money trusts are still appropriate where the primary purpose for acquiring property is commercial
Lloyds Bank v Rosset
Express Common Intention Constructive Trust
Acquiring an Interest when not the Sole Legal Owner
Implied Trusts of the Home
- There must be an express agreement or understanding present (will own it together not just live in it together)
- Should be at time of acquisition, but can exceptionally be at a later date.
- Don’t need explicit technical instructions – objective standard – on hearing the discussion, would a reasonable person understand the parties had agreed to own the land together
- Case law is very inconsistent: -
- Clough v Killey - “Everything’s 50:50” - sufficiently clear
- Hammond v Mitchell – “Half yours” - sufficiently clear
- Walsh v Singh – 1 party said the other party’s financial future was secured – insufficient
- If there’s any reference to shares, that should be sufficient to demonstrate express agreement (however, nothing definite, based on opinion)
- Cannot say with absolute certainty one way or another
Eves v Eves
Excuses
Express Common Intention Constructive Trust
Acquiring an Interest when not the Sole Legal Owner
Implied Trusts of the Home
Where the legal owner had intentionally deceived the other party the court says that implies they believed the other party had an interest in the home as otherwise, they wouldn’t lie.
very young woman (18) moved in with older man and asked why she wasn’t on the legal title as she felt insecure – “your too young”
