Large Group 5

Question 1

What is a resulting trust?

Answer 1

A resulting trust arises when property is transferred to someone who has not provided consideration, and the court presumes that the person holding the property is holding it on trust for the person who transferred it. The equitable interest “results” or jumps back to the transferor.

Question 2

What are implied trusts, and when do they arise?

Answer 2

Implied trusts are trusts that arise not through written or express words, but through the courts’ interpretation in certain situations, typically property disputes. There are two types: resulting trusts and constructive trusts.

Question 3

What is the presumption of a resulting trust in the context of voluntary transfers?

Answer 3

In voluntary transfers (e.g., when property is given without payment), the law presumes that the person receiving the property holds it on trust for the transferor, unless there is evidence to rebut this presumption.

Question 4

How does Section 53(2) of the Law of Property Act 1925 relate to implied trusts?

Answer 4

Section 53(2) of the Law of Property Act 1925 states that implied trusts, including resulting and constructive trusts, do not require written evidence to be enforceable, unlike express trusts which do need to be in writing.

Question 5

What is the significance of the case Re Vandervell’s Trusts (No.2) in relation to resulting trusts?

Answer 5

The case Re Vandervell’s Trusts (No.2) confirmed that when a gift is made without all legal formalities being completed, the property results back to the settlor under a resulting trust unless a contrary intention is shown.

Question 6

What is the rule regarding voluntary transfers of land and Section 60(3) of the Law of Property Act 1925?

Answer 6

Section 60(3) of the Law of Property Act 1925 states that a resulting trust will not automatically arise from a voluntary transfer of land, and the court will look for evidence of the transferor’s intention.

Question 7

What is a purchase money resulting trust?

Answer 7

A purchase money resulting trust arises when one person pays part or all of the purchase price for property that is put into another person’s name. The person who paid the purchase price is presumed to have an equitable interest in the property proportionate to their contribution.

Question 8

What is the significance of the case Curley v Parkes in purchase money resulting trusts?

Answer 8

Curley v Parkes established that only payments made at the time of the property purchase give rise to a resulting trust. Payments made after the purchase, such as mortgage payments, do not create an equitable interest under a resulting trust.

Question 9

What is a constructive trust, and when does it arise?

Answer 9

A constructive trust is imposed by the court when it would be unconscionable for the legal owner of the property to deny another person an interest. It often arises in cases of cohabitation where there is a common intention for both parties to share the property, and one party acts to their detriment in reliance on that intention.

Question 10

What is a common intention constructive trust?

Answer 10

A common intention constructive trust arises when two parties have a shared intention that both will have an interest in the property, and one party relies on that intention to their detriment. Common intention can be express or inferred from the conduct of the parties.

Question 11

How is an express common intention established in a constructive trust?

Answer 11

An express common intention is established through explicit discussions or agreements between the parties, often before or at the time of the property purchase, indicating that both parties will share the ownership.

Question 12

What is the significance of Lloyds Bank v Rosset in constructive trusts?

Answer 12

Lloyds Bank v Rosset is a leading case on constructive trusts. It established that an express common intention can be based on explicit discussions, while an inferred common intention can only arise if the claimant made a direct financial contribution to the purchase or mortgage of the property.

Question 13

What does detrimental reliance mean in the context of a constructive trust?

Answer 13

Detrimental reliance means that the claimant has acted to their detriment, relying on the common intention to share the property. This can involve direct financial contributions, such as paying part of the purchase price or mortgage, or non-financial contributions, such as giving up a career to support the household.

Question 14

How are indirect contributions treated in constructive trusts, as per the case Le Foe v Le Foe?

Answer 14

In Le Foe v Le Foe, the court recognised that indirect financial contributions, such as paying household expenses that enable the legal owner to pay the mortgage, can contribute to a constructive trust, even if the claimant did not make direct payments towards the property.

Question 15

What is the role of the court in quantifying a beneficial interest under a constructive trust?

Answer 15

Once a constructive trust is established, the court quantifies the claimant’s beneficial interest by looking at the whole course of dealings between the parties, including financial contributions and other relevant factors. If there is no express agreement, the court will infer a fair division of the property.

Question 16

What is the significance of Stack v Dowden in quantifying interests under a constructive trust?

Answer 16

Stack v Dowden emphasised that when quantifying beneficial interests in a constructive trust, courts must look at the whole course of dealings between the parties, including the nature of their relationship, how they managed their finances, and the purpose of the property.

Question 17

What modifications did Jones v Kernott introduce to the principles in Stack v Dowden?

Answer 17

Jones v Kernott modified the principles in Stack v Dowden by recognising that the parties’ intentions regarding their beneficial shares can change over time. The court can adjust the share of the property based on changes in the parties’ contributions or circumstances.

Question 18

What is proprietary estoppel, and how does it relate to property ownership?

Answer 18

Proprietary estoppel arises when one party has been led to believe they will acquire an interest in property, relies on that belief to their detriment, and it would be unconscionable for the legal owner to deny that interest. It often leads to the court granting an equitable interest in the property to the claimant.

Question 19

What are the three key elements required to establish proprietary estoppel?

Answer 19

To establish proprietary estoppel, the claimant must prove:

• An assurance: The legal owner assured the claimant they would have an interest in the property.
• Reliance: The claimant relied on that assurance.
• Detriment: The claimant suffered detriment as a result of relying on the assurance.

Question 20

What is the significance of the case Jennings v Rice in proprietary estoppel?

Answer 20

Jennings v Rice established that the court has wide discretion in awarding remedies for proprietary estoppel. The remedy must be fair and proportionate, balancing the claimant’s expectations and the detriment they suffered. The court may award the property, a right to live in it, or financial compensation.

Question 21

What is the rebuttable presumption in the context of resulting trusts?

Answer 21

The presumption of a resulting trust can be rebutted if there is evidence that the transferor intended to make a gift. If the transferor intended for the recipient to own the property outright, there will be no resulting trust.

Question 22

What is the presumption of advancement, and how does it differ from a resulting trust?

Answer 22

The presumption of advancement applies in certain relationships, such as between a parent and child or husband and wife, where the law assumes that a gift was intended. In these cases, the presumption of a resulting trust does not apply, and the recipient is presumed to own the property unless proven otherwise.

Question 23

How has the presumption of advancement been affected by modern developments?

Answer 23

The Equality Act 2010 was intended to abolish the presumption of advancement in certain contexts, but this provision has not yet come into force. As a result, the presumption of advancement still applies but is increasingly subject to criticism and judicial limitation.

Question 24

What is the difference between express trusts and resulting trusts?

Answer 24

An express trust is created when the settlor explicitly declares their intention to create a trust, and it must comply with formalities (such as being in writing for land). A resulting trust arises by operation of law, typically when the court presumes that the transferor did not intend to make a gift.

Question 25

What does ‘unconscionability’ mean in constructive trust cases?

Answer 25

Unconscionability refers to situations where it would be unfair or unjust for the legal owner of property to deny the other party’s beneficial interest. Constructive trusts are often imposed in these situations to prevent the legal owner from taking advantage of their position.

Question 26

What is the relationship between common intention and detrimental reliance in constructive trusts?

Answer 26

To establish a constructive trust, there must be evidence of a common intention between the parties to share the property. Detrimental reliance occurs when one party relies on that common intention to their detriment, such as by contributing financially or making significant sacrifices.

Question 27

How does the court infer common intention in cases of constructive trusts?

Answer 27

Common intention can be inferred from the conduct of the parties, such as when both parties contribute to the purchase price or mortgage payments. The court will look at the overall conduct of the parties to determine whether there was a shared intention to own the property jointly.

Question 28

How does proprietary estoppel differ from a constructive trust?

Answer 28

Proprietary estoppel and constructive trusts both arise in property disputes, but proprietary estoppel focuses on situations where one party has been led to believe they would have an interest in property and relies on that belief to their detriment.

A constructive trust arises when the parties share a common intention to own the property, and one party acts to their detriment based on that intention.

Question 29

What is the relevance of the case Gissing v Gissing to constructive trusts?

Answer 29

Gissing v Gissing confirmed that for a common intention constructive trust to arise, the parties must have a shared intention to jointly own the property, and the claimant must have made direct or indirect contributions towards the purchase or mortgage. This case clarified the need for a clear basis for inferring common intention.

Question 30

What is the two-stage test for proprietary estoppel, as seen in Thorner v Major?

Answer 30

The two-stage test for proprietary estoppel, as established in Thorner v Major, requires:

1. Assurance: The legal owner made an assurance or led the claimant to believe they would have an interest in the property.
2. Reliance and detriment: The claimant relied on this assurance and suffered detriment as a result.

Question 31

What are the possible remedies in cases of proprietary estoppel?

Answer 31

Remedies in proprietary estoppel cases can vary depending on the circumstances. The court has discretion to award the claimant an equitable interest in the property, financial compensation, or other remedies that balance the claimant’s expectations with the detriment suffered.

Question 32

What is the impact of indirect contributions in cases of constructive trusts?

Answer 32

Indirect contributions, such as paying household expenses while the legal owner pays the mortgage, may be considered when establishing a constructive trust.

However, the court will only recognise these contributions if they are substantial and reflect a shared intention to jointly own the property, as established in Le Foe v Le Foe.