L1 - Informal acquisition (1) : trusts of the home Flashcards
Express trust of the home
- trust of land = must be evidenced in writing : s53(1)(b) LPA 1925
- Goodman v Gallant : an express declaration of trust is conclusive as to how parties’ BI are held
RT ≠ CT - determining shares in property
RT : Bs share strictly proportional to amount of B’s contribution at time of acquisition
CT : court has much more freedom – Q = what was the common intention of the parties (evidenced and not presumed)
RT ≠CT : evidence justifying finding of trust
RT : only financial contribºmade at time of acquisition (incl lb to repay mortgage) = laskar v laskar
/!\ ≠ paying mortgage instalments later: later contribºdon’t count
CT : can arise from later contribº, or even no financial contribºby one of the partners as long as there is :
(i) evidence of common intention that the family home be held on trust
(ii) detrimental reliance on that common intention
Sole name cases (SN)
= one of the 2 has legal title alone
=> Qº= does legal O hold on trust for C and himself / is C entitled to share of BI, and if so, what is the size of C’s share ?
Joint name cases (JN)
= partners hold on statutory trust for themselves = LPA 1925, ss34(2) and 36(1)
=> court presumes a JT in equity unless there is evidence of a contrary intention
SN cases - starting point
“the starting point where there is sole legal ownership is sole beneficial ownership” (Lady Hale in Stack v Dowden)
=> presumption, burden to displace on person claiming share of BI
Co-ownership at law
Co-owners of a legal estate can only hold it as joint tenants
=> Hold on statutory trust for themselves = s36(1) LPA 1925
No TIC at law
= s1(6) & s34(2) LPA 1925
2 ways of holding BI :
= as joint tenants (JT) or tenants in common (TIC)
Holding as JT
= both owning the whole interest, indiv not entitled to a specific share, when one dies ownership remains w/ survivor
Holding as TIC
= entitled to notional individual shares in the property => which they can transfer and will pass with their estates on death
3 ways for TIC to come into existence
(1) Equitable presumption that purchasers who make unequal contribºto purchase price intend to hold as TIC (can be rebutted by evidence of intention to hold as JT + /!\ no longer applies in family home context)
(2) Express declaration of intention to hold as TIC made at time of acquisition (otherwise, ‘equity follows the law = JT)
(3) severance = turning JT into TIC
Presumption of RT (reminder)
= where A transfers rights to B or contributes to purchase price of smth to which B gets title: rebuttable presumption that A did not intend to part w/ BI (or whole of it)
(Lord BW in Westdeutsche)
SN - Requirements for a CICT (2)
= Lord Diplock in Gissing v Gissing :
(i) an agreement, and
(ii) detrimental reliance on the agreement
/!\ simply establishing ag not enough bcs s53(1)(b) LPA 1925: trust of land must be evidenced in writing => need for more to trigger s53(2) exception w/ imposition of a CT = hence DR requirement
Authorities for detrimental reliance as a separate requirement
= Hudson v Hathaway (2022) for joint names and O’Neill v Holland (2022) sole names
SN - requirements for a CICT - agreement can be (2)
express or inferred from conduct
SN - requirements for a CICT - express agreement
“any agreement, arrangement or understanding reached between [the parties] that the property is to be shared beneficially” (Lord Bridge in Lloyds Bank v Rosset)
SN - requirements for a CICT - agreement inferred from conduct
Inferred from conduct : conduct involving reasonably direct contributions to the cost of acquiring the property
=> contribº to purchase price, mortgage instalments, but also indirect contribº eg paying other expenses to facilitate mortgage repayments (Burns v Burns)
Lord Denning’s interpretation of Gissing
= authorising new kind of CT “whenever justice and good conscience require it”
=> to be applied “in cases where the legal owner cannot conscientiously keep the property for himself alone, but ought to allow another to have the property or the benefit of a share in it” = Hussain v Palmer (Lord Denning quoted)
2 decisions illustrating CA’s approach under Denning
- Eves v Eves (1975) : woman made no financial contribution but lots of manual work in restoring house and garden + looked after partner and cared for children = enough for a CT acc to Lord Denning
- Hall v Hall (1982) : woman made no direct payments towards cost of acquisition but paid for furnishings, brought a car and contributed to housekeeping expenses = again enough for Lord Denning
SN - change of approach - 2 cases
Burns v Burns and Lloyds Bank v Rosset
SN - Burns v Burns - MP
CA emphasised need for agreement involving money payment referable to acquisition of property
=> substantial contribº to housekeeping expenses not enough unless clear intention that contribution meant to enable other partner to pay mortgage instalments
SN - Burns v Burns - situation & outcome
Situation: unmarried couple lived together for 19y, man legal O of house, provided initial deposit + paid mortgage instalments, woman at 1st stayed at home to care for children, then undertook paid work and used salary to pay domestic bills + equipment for the house and clothes for children etc, also redecorated
= would have been plenty enough for Lord Denning’s approach BUT CA closely followed principles originally laid out by Lord Diplock in Gissing, esp need for agreement
in this case:
- financial contributions small and not referable to acquisition
- no evidence of common intention she should have a share
- decorating work didn’t help (bcs view of HL in Pettitt v Pettitt)
- performance of domestic duties: court rejected Lord Denning’s dicta that it could be taken into account (neither supported by precedent nor consistent with principle)
SN Lloyds Bank v Rosset - MP
Lord Bridge draws “sharp” distinction btw express ag and ag implied from conduct cases :
- express ag cases : evidenced by express discussions btw partners, “however […] imprecise their terms”, then look at conduct to see if there has been any detrimental reliance
- ag implied from conduct cases: court must rely entirely on conduct of the parties to infer common intention to share and reliance
=> only ‘direct contribution to the purchase price’ is sufficient acc to Lord Bridge
/!\ reasoning criticised by HL in Stack v Dowden
SN - Criticism of Lord Bridge in Stack v Dowden
- Lord Walker : doubted if took full acc of view expressed in Gissing v Gissing + suggested that “the law has moved on”
- Lady Hale: also said the law had moved on “in response to changing social and economic conditions” + suggested Lord Bridge may have ‘set the hurdle’ rather too high when considering contributions necessary to give rise to CICT
SN - quantifying shares
≠ RT: size of shares depends on intention of the parties, not necessarily proportionate to financial contribution
=> Guidance by Lord Diplock in Gissing :
- express ag btw parties as to size of shares is conclusive
- if no express ag, court might infer intention from conduct of the parties => take into acc any contribution made by B at the outset + during relº
- if no intention as to size of share can be inferred, court can find that the parties had intended non-owner to have a share, leaving size to be determined later
- last resort = maxim ‘equality is equity’ : half shares
JN - FH - starting point
= presumption of JT
in family home cases: presumption that “equity follows the law” = JT at law & in equity
=> unless express provision concerning BI or rebutted by evidence of contrary intention
= Lady Hale in Stack v Dowden
JN - FH - Stack v Dowden - reasoning behind reform
= idea that entitlement to shares in family home should not depend solely on size of financial contributions (Lord Neuberger dissenting w/ RT approach)
JN - FH - Stack v Dowden - reasoning behind reform - Lady Hale quote
“these days the importance to be attached to who paid for what in a domestic context may be very different from its importance in other contexts or long ago […] In law, context is everything, and the domestic context is very different from the commercial world. Each case will turn on its own facts. Many more factors than financial contributions may be relevant in divining the parties’ true intentions”
JN - FH - rebutting presumption of JT
Presumption can be rebutted by evidence of contrary intention = showing that “the parties did intend their beneficial interest to be different from their legal interests and in what way” (Lady Hale in Stack at [68])
Burden is on party seeking to displace presumption
/!\ a heavy burden acc to Lord Walker at [14] and Lady Hale at [68]
JN - FH - quantifying shares - approach
Lady Hale at [60] summaried new approach to quantifying shares under CICT :
“the search is to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole conduct in relation to it”
JN - FH - quantifying shares - relevant factors
Lady Hale at [60]: Many factors other than financial contribution are relevant, including :
- advice or discussions at the time of transfer
- purpose for which the house was acquired
- nature of the parties’ relationship
- whether they had children for whom they both had responsibility to provide a home
- how the purchase was financed (initially and subsequently)
- how the parties arranged their finances (separately or together or both)
- how they discharged the outgoings on the property and their other household expenses
JN - FH - Changing intentions
= Jones v Kernott : possible for the parties’ intentions to change during life of the trust => change in intention can rebut presumption of JT / result in a change in each party’s share in the property
JN - FH - Changing intentions - relevant factors
Factors relevant for court to infer that parties’ intentions had changed (here) :
* length of time since separation + fact Mr K showed no interest in the house during that time
* v substantial financial contributions made by Ms J, esp in 14y since separation
* division of proceeds of insurance policy + Ms Jones’s assumption of financial resp for the house, which had enabled Mr K to buy a new house for himself
inferring or imputing intention
Difference explained by Lord Neuberger in Stack:
- inferred intention = “objectively deduced from the subjective actual intention of the parties in light of their actions and statements”
- imputed intention = “attributed to the parties” even though no such intention can be deduced from their conduct
inferring or imputing intention - ≠btw judges in Jones v Kernott
Lord Walker & Lady Hale : preferable to infer intention of parties regarding size of shares, but where not possible to do so, permissible to impute intention instead – imputation as a last resort
≠Lord Kerr and Lord Wilson : possible to impute intention at a slightly earlier stage, as soon as becomes clear that trying to infer intention is going to be too diff
Effect of Stack and Jones on sole name cases :
/!\ “considerable uncertainty” (A quoted) about effect of Stack v Dowden and Jones v Kernott on 1st stage of sole-name process
=> follow Burns v Burns = consider financial contributions to cost of acquisition only, or adopt Stack = ‘whole course of conduct in relation to the property’ ?
Presumption of RT (applicability)
Presumption of RT no longer applies in ordinary domestic cases = Stack v Dowden – see Lord Walker at [33] and Lady Hale at [58]-[60]
BUT still applies in commercial cases , incl cases where parties both in a relº and business partners (see Lord Walker at [32] in Stack, at [31] in Jones)
