Paragraph 5

Question 1

What does the new model constructive trust aid?

Answer 1

The new model constructive trust has aided third parties in licences.

Question 2

Where were licences originally controlled?

Answer 2

Originally, licenses were only controlled within contract law, failing to protect third parties but equity has developed a remedy to solve this.

Question 3

Binions v Evans (1972)

Answer 3

In Binions v Evans (1972), it was held by Lord Denning that by promising to allow the claimant to remain in the home in exchange for the significant discount, the defendants had caused a constructive trust to arise.

Question 4

Unconscionable?

Answer 4

In these circumstances it would be unconscionable for the court to allow the defendants to rely on their strict legal right to evict her as the claimant had a mere license to remain on the land.

Question 5

Re Sharpe (1980)

Answer 5

Also, in Re Sharpe (1980) a constructive trust was imposed on the claimant as she had lent money to her nephew for a house on the understanding that she could live there for the rest of her life, however, he become bankrupt. Thus, the aunt had a contractual right of the occupation in the property until the loan was repaid to her.

Question 6

Criticism?

Answer 6

However, this is restrictive as a license will only give rise to a constructive trust where the conscience of a third party is affected (Habermann v Koehler (1996).

Question 7

Therefore?

Answer 7

Therefore, equitable remedies have been made available to protect people who have an equitable proprietary interest despite being a party of a license.