S2.1 Resulting and Constructive trusts

Question 1

Will the presumption of advancement apply to mothers to children?

Answer 1

Officially the presumption of advancement does not apply to transfers from mother to child.

Many of the cases that say so date back a long time (though there have been some recent cases where transfers have been presumed to be on resulting trust). The presumption arose out of an attitude that fathers have a moral, social and legal responsibility to provide for their children. Though few would doubt that mothers are under a similar moral, social and legal obligation, that legal obligation does not extend to equity. Given the change in social attitudes towards property, family and bringing up children, do you think there is any justifiable basis for not applying the presumption to mother-child transfers? Consider that grandparents have been found to be in loco parentis to the donee where the father was dead and that subsequently the transfer was a gift. A stepfather was found to be in loco parentis by virtue of the loving relationship between him and his stepson (re Paradise Motor Co). On that basis, I think the courts would potentially apply the presumption in cases of single mothers. In re Cameron Lindsay J explained that he felt the presumption ought to apply to transfers from both parents. In Laskar Neuberger LJ discussed the presumption of advancement. Counsel had not argued it and the judge agreed they shouldn’t have – so obviously his comments were strictly obiter. But he said that the presumption would not apply because the daughter was over 18 and financially independent; not because this was a mother-child transfer.

Does this suggest some liberalisation of the view that it only applies to transfers from fathers? If Neuberger LJ didn’t think it could apply to mother-child transfers, why mention it at all?

Question 2

Re Cameron

Answer 2

Lindsay LJ explained that he thought the presumption of advancement ought to apply to transfers from both parents.

Question 3

Laskar

Neuberger LJ about the presumptuion

Answer 3

Discussed the presumption of advancement.

Counsel had not argued it, so comments were strictly obiter. But he said the presumption of advancement would not apply because the daughter was 18 and financially independent, not because it was a mother-child transfer.

This might suggest liberalisation. If Neuberger LJ did not think it could apply to mother-children transfers, then why did he mention it?

Question 4

What intention is usually needed for a resulting trust?

Answer 4

Presumed intention = most likely intention in the circumstances. It is very similar to imputed intention. The difference is a presumed intention only arises where there is no evidence to the contrary.

Question 5

What intention is required for a constructive trust?

Answer 5

much more wide-ranging and may arise regardless of any intention at all, or they may arise because of the actual or implied intention of all the parties, not just the transferor.

Question 6

What is the effect of a resulting trust?

Answer 6

On the transfer, the beneficial interest, will result back to the transferor.

Question 7

When will a presumption of a resulting trust arise?

Answer 7

Where there is a transfer of property, but the transferor’s intentions as to the disposal of the equitable interest are unclear.

OR

There is a presumption of a gift of the beneficial ownership under the presumption of advancement.

Question 8

What is the traditional approach of the courts in resulting trusts?

Answer 8

Where there is a transfer, the courts:

1. Look at the circumstances surrounding the transfer
2. decide whether it was a:
   
   1. presumption of a resulting trust, or
   2. presumption of advancement.
3. If one of the presumptions applies, the courts will look to see if evidence to rebut

If Presumption of resulting trust: if rebutted, it is an outright gift

If presumption of advancement: if rebutted, it is a resulting trust

Question 9

What is the more recent approach of the courts (privy council)

Answer 9

Instead of the presumption being the starting point, they should be the last resort.

Look at the intention of the parties first.

It is only in the absence of any effective intention that you then look and apply the relevant presumption of intention and gift

Question 10

Lord Briggs in

Gany Holdings v Khan

[2018] UKPC

Answer 10

Recent movement away from starting with a presumption and looking to see whether there is evidence to rebut it, to starting with a search for evidence of intention and using presumptions only if there is none.

This is because:

• The historic restrictions on the admissibility of evidence has been removed
• Forensic tools are more readily available.

Question 11

Marr v Collie [2017] UKPC

Answer 11

Took a similar approach to the Khan case before. But this was in 2017, and the Khan case was in 2018!

Question 12

When will a resulting trust arise?

Answer 12

(1) Property is transferred from settlor to trustees on an express trust but some or all of the equitable interest in the property is not disposed of.
(2) A voluntary transfer of property from one person to another or into the joint names of the transferor and another.
(3) A person contributes all or part of the purchase price of property and title to that property is put in the name of another or into their joint names.

Question 13

Vandervell v IRC

Answer 13

Example of where resulting trust because Property is transferred from settlor to trustees on an express trust but some or all of the equitable interest in the property is not disposed of.

Facts: This is the situation where the Royal College of Surgeons granted an option to repurchase the shares, which was granted to trustees, but Vandervell as the settlor had not specified who the beneficiaries of that trust should be, so there was a resulting trust in favour of Vandervell.

Question 14

Lohia v Lohia [2001]

Answer 14

s60(3) which says that a RT shall not be implied by reason that the property is not expressed to be conveyed for the use or benefit of the grantee:

This case held: that effect of 60(3) is that there cannot be a presumed resulting trust on a voluntary transfer of land.

Criticism:

Why should there be such a large difference between a voluntary transfer of land and a voluntary transfer of any other property?

Question 15

National Crime Agency v Dong

[2017]

Answer 15

In relation to s60(3)

The judge assumed that there can be the presumption of a resulting trust in the case of land.

He said he had heard very limited submissions but there shouldn’t be a difference between real and personal property and the section was not intended to make any substantive changes to the law.

Really we await a decision of a higher court. But this is the most recent decision.

Question 16

Where is there a presumption of advancement (a gift) in two situations?

Answer 16

1) transfer from a father to his child or someone to whom he is loco parentis. From father only.
2) transfer from husband to wife

Question 17

Laskar v Laskar

Answer 17

Alternate presumption of advancement (a gift) in two situations:

1. transfer from a father to his child or someone to whom he is in loco parentis; from father only, not from mother. This is because the presumption developed at a time when only fathers were under an equitable obligation to support their children.
2. IT APPLIES REGARDLESS OF THE AGE OF THE CHILD.

Applies regardless of the age of the child - will apply where there is a transfer from father to a child who is an adult. That was made clear in the case of Laskar v Laskar, but the presumption is weaker where the transfer is made to a child who is capable of maintaining his/herself.

Question 18

s 2(1) Law Reform (Miscellaneous Provisions) Act 1970

Answer 18

Alternate presumption of advancement (a gift) in two situations:

transfer from a husband to his wife.

It also applies to engaged couples – only male engaged person to female. This extension is a result of s 2(1) Law Reform (Miscellaneous Provisions) Act 1970 and Mossop v Mossop.

Question 19

Mossop v Mossop

Answer 19

Alternate presumption of advancement (a gift)

1. transfer from a husband to his wife.
2. It also applies to engaged couples – only male engaged person to female. This extension is a result of s 2(1) Law Reform (Miscellaneous Provisions) Act 1970 and

Mossop v Mossop [1988] 2 WLR 1255

Question 20

When does the presumption of advancement apply?

Answer 20

1. where outright transfer or in joint names,
   
   1. e.g. father puts property into joint names of father and child
   2. or joint names of husband and wife

Question 21

Criticism of the presumption of advancement

Answer 21

1. Sexist
2. unjustifiably limited coverage

There is a section to deal with its abolition: Section 199 Equality Act 2010 – prospective abolition of the presumption of advancement, not yet in force.

Question 22

Can the presumptions of a resulting trust and of advancement be rebutted by evidence of a contrary intention?

Answer 22

Yes.

They are only presumptions, and can be rebutted by evidence of transferor’s actual intention. Or they don’t even come into play if there is actual intention.

• The courts will look at all the facts and circumstances surrounding the transfer or acquisition of the property, loking for evidence of intention that rebuts the presumption.

Question 23

Pettitt v Pettitt

(Husband + Wife)

Answer 23

In the context of a house acquired for joint occupation, the presumption of advancement is today considered as an instrument of last resort and is easily rebutted with slight evidence to the contray.

Lord Reid -

“in the absence of evidence to the contray effect, a contributor to the purchase-price will acquire a beneficial interest in the property”.

In the context of the acquisition of land, it is clear that a presumed resulting trust will arise in favour of a contributor to the initial purchase price.

This was reiterated in Gissing v Gissing

Question 24

McGrath v Wallis

CA

Answer 24

In the context of a house acquired for joint occupation, the presumption of advancement is today considered as an instrument of last resort and is easily rebutted with slight evidence to the contray.

Facts: House was purchased by father and son in the son’s sole name for the occupation of both; the purchase in the son’s name only was to maximise their chances of getting a mortgage loan. CA held: the presumption of advancement was rebutted by evidence that the father had intended to retain an interest in the ownership of the house.

Question 25

Can a resulting trust arise because of an actual (not presumed intention)

Answer 25

Yes No reason why we cannot give effect to the fact that the transferor actually intended to retain beeneficial ownership of the property: Hodgson v Marks ( CA)

Question 26

Hodgson v Marks CA

Answer 26

No reason why a resulting trust cannot arise because of an actual, rather than presumed, intention to that effect. No reason why we can’t give effect to the fact that the transferor actually intended to retain beneficial ownership of the property. **Facts:** case where court felt it couldn’t presume a resulting trust because it was land and s.60(3), but nevertheless found a resulting trust on the basis of the intention of the parties.

Question 27

What happens if there is a resulting trust determining the ownership of property?

Answer 27

(3) A person **contributes** all or part of the **purchase price** of property and title to that property is put in the name of another or into their joint names. In (3) above shares in the beneficial interest will be proportionate to contributions to the purchase price. Shares of beneficial owners are equal = equaitable joint tenancy Shares of beneficial owners are unequal = euitable tenancy in common **Under a resulting trust, the shares are always proportionate to the contribution. If the parties intend any other contribution, they must establish a constructive or express trust.**

Question 28

If someone contributes to the purchase price of property, is there a presumed resulting trust?

Answer 28

Yes

Question 29

When does someone "contribute" to the purchase price givign rise to a resulting trust?

Answer 29

A resulting trust requires a direct contribution to the purchase price. 1. Cash contribution 2. Borrowed money is prima facia the direct contribution of the borrowers. If more than one borrower, then it is taken as contributing that borrowed money in equal shares.

Question 30

Harwood v Harwood [1991] CA

Answer 30

**_What do we mean why ‘contributing’ to the purchase price. What will give rise to the resulting trust?_** A resulting trust requires a *direct* contribution to the purchase price: **Borrowed money** is prima facie the direct contribution of the borrower(s), if more than one borrower is taken as contributing that borrowed money in equal shares.

Question 31

Elithorn v Poulter

Answer 31

_Borrowed money is prima facie the direct contribution of the borrower(s)_ In most cases the money will be borrowed from the bank, but it’s not necessary, the same rule applies wherever the borrowing is from. This is subject to evidence to the contrary. So the borrower prima facie gets a proportionate interest, but may not if there is evidence to rebut that presumption: Carlton v Goodman

Question 32

Carlton v Goodman

Answer 32

_Borrowed money is prima facie the direct contribution of the borrower(s)_ The borrower prima facie gets a proportionate interest, but may not if there is evidence to rebut that presumption: **Facts:** Woman joined in mortgage simply to facilitate it because the purchaser did not earn enough, she was never intending to repay anything. Therefore the borrowed money was not in any way her contribution because the evidence rebutted it. Again, we are presuming that borrowed money is the contribution of the borrower, but the parties may have expressly agreed otherwise: that although the parties are jointly liable under the mortgage deed, one of them only is going to take responsibility for repaying the loan. That agreement can only be effective if there is a constructive trust.

Question 33

Huntingford v Hobbs CA

Answer 33

Any agreement otherwise will be effective, if at all, under a constructive trust:

Question 34

Curley v Parkes [2004] EWCA

Answer 34

**Unless the mortgage repayment agreemenet made before the mortgage was entered into, payment of the mortgage instalments on a property, will not give rise to the presumption of resulting trust.** When it comes to borrowed money, all about who is under the obligation to repay, it is not about who actually makes the repayments. Has been held that: **Payment of mortgage instalments when under no liability will not be sufficient will not give rise to an interest under a resulting trust. This is because the theory is that the resulting trust arises once and for all at the moment the property is acquired so that anything that takes effect after that moment is irrelevant to a resulting trust. Payment of mortgage instalments - which would usually be because of an agreement between the parties, cannot give rise to an interest under a resulting trust but can give rise to an interest under a constructive trust.**

Question 35

Barrett v Barrett

Answer 35

When it comes to borrowed money, all about who is under the obligation to repay, it is not about who actually makes the repayments. Has been held that: **Payment of mortgage instalments when under no liability will not be sufficient will not give rise to an interest under a resulting trust.** This is because the theory is that the resulting trust arises once and for all at the moment the property is acquired so that anything that takes effect after that moment is irrelevant to a resulting trust. Payment of mortgage instalments - which would usually be because of an agreement between the parties, cannot give rise to an interest under a resulting trust but can give rise to an interest under a constructive trust.

Question 36

Springette v Defoe CA

Answer 36

A reduction of the purchase price through the status of a party will give that party a commensurate interest **Facts:** – Claimant was a council tenant for 11 years, got 41% reduction in the price. Was regarded as her contribution, and therefore got a 41% share of the beneficial ownership under a resulting trust, again subject to any contrary intention UNLESS EVIDENCE TO THE CONTRAY - Laskar v Laskar

Question 37

Drake v Whipp

Answer 37

A possibility, although there is not strong evidence, is that there property is bought in a state where it requires work to be done and that without that work the property is not habitable, not usable, then it is possible that paying for the costs of work on that property to make it habitable or usable can be regarded part of the acquisition cost of the property. **Facts:** A barn had been brought for conversion to a home. Decision at first instance was based on a resulting trust, judge took into account contributions towards the cost of the barn and contributions to the conversion cost. The court of appeal based its decision on a constructive trust.

Question 38

In the case of borrowed money, it is about who is under the obligation to pay - not who makes the repayments. What are the three situations to which it has been held:

Answer 38

1. Payment of mortgage instalments when under **no liability** will not be sufficient will not give rise to an interest under a resulting trust. 2. A reduction of the purchase price through the status of a party will give that party a commensurate interest (Springette v Defoe) 3. Payment of the costs of initial work on the property may be sufficient: Drake v Whipp

Question 39

What are the recent movements in relation to resulting/constructive trusts?

Answer 39

The lack of flexibility is good for commercial property. When it comes to the family home, courts move away from resulting trusts and are using constructive trusts. This is so even with other property brought by a couple - not just a family home, but investments by a couple where a resulting trust becomes less important because of lack of flexibility.

Question 40

How many types of constructive trusts are there?

Answer 40

1. An institutional constructive trust ( or substantive contructive trust or proprietary constructive trust) 2. A remedial constructive trust An institutional constructive trust is recognised in English law, a remedial constructive trust is not.

Question 41

Where can we find the definition of an institutional constructive trust?

Answer 41

Lord Browne-Wilkinson in **Westdeutsche Landesbank v Islington [1996]**

Question 42

Lord Browne-Wilkinson in Westdeutsche Landesbank v Islington [1996]

Answer 42

Defines institutional constructive trust. 1. Arises by operation of law 1. It arises automatically. 2. The court has no discretion.

Question 43

What circumstances give rise to an institutional constructive trust?

Answer 43

General approach is Lord Millett in Paragon Finance v Thackerar

Question 44

Lord Millett in Paragon Finance v Thackerar

Answer 44

1. A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of the property to assert his beneficial interest in the property and deny the beneficial interest of another. **This is far too general a proposition. The underlying basis =** unconscionability. However, in English law, courts cannot impose a constructive trust whenever they want to on the basis of unconscionability. It is a open list, but someone seeking a constructive trust must fit within one of the situations which at present exist.

Question 45

Difference between an institutional constructive trust and a remedial constructive trust

Answer 45

The difference is judicial remedy. ## Footnote A remedial constructive trust is a remedy that is imposed by the court. So, no constructive trust is in existence until the court says so. It is at the discretion of the court. Not only at the discretion of the court whether a constructive trust is imposed, but its exact effect is also at the discretion of the court. **A remedial constructive trust has no conenction with the intention of the parties or their necessary connection.** It is a remedy used by the courts to prevent unconscionable conduct.

Question 46

Lord Browne-Wilkinson, *Westdeutsche Landesbank v Islington* *Concerning Remedial constructive trust*

Answer 46

A remedial constructive trust is a judicial remedy giving rise to an enforceable equitable obligation: The extent to which it operates **retrospectively** to the **prejudice of third parties** lies in the **discretion** of the court.”

Question 47

Is a remedial constructive trust really a trust?

Answer 47

Not in the normal way, it is just a way of varying property rights. It is a proprietary remedy which is used to redistribute property so the person on whom a remedial constructive trust is imposed will never be requireed to take on the role of a trustee, they will just be required to transfer the property to someone else.

Question 48

Are remedical constructive trusts recognised in English Law?

Answer 48

Lord Browne-Wilkinson in *Westdeutsche Landesbank v Islington* Does not recognise it.

Question 49

What cases suggest that there was an imposition of a remedial constructive trust?

Answer 49

1. Lyus v Prowsa Developments 2. Ashburn v Arnold Arguably these cases seem to be more decided on the basis of a remedial constructive trust than an institutional constructive trust.

Question 50

Will remedial constructive trusts be recognised in the future?

Answer 50

**It should be, it is useful addition** 1. Lord Browne-Wilkinson in Westdeutsche Landesbank v Islington 2. Lord Scott in Thorner v Major **No** 1. Nourse LJ in *Re Polly Peck International (No 3).* 1. *​*He thought that since the remedial constructive trust is about varying property rights, that should be for Parliament to do, not the courts. **Therefore, we have to wait and see.**

Question 51

Situations where a constructive trust will be imposed

Answer 51

1. Cases in which a purchaser of property has agreed to recognise the interest of another in the property but then attempted to go back on that agreement. 2. Other cases to be considered include constructive trusts imposed on the profit made by a fiduciary in breach of duty (nothing to do with intention but all about unfair benefit: idea of unconscionability) and the recipient of trust property transferred in breach of trust 3. Common intention constructive trust

Question 52

Bannister v Bannister

Answer 52

Old lady sold two cottages to her brother-in-law at below market value on an oral understanding that she could live rent free in one of them for her life. Brother in law tried to rely on the absence of writing, court was prepared to impose a constructive trust because of his conduct, because the original intention of the parties was that he would be bound by her interest and then tried to go back on it.

Question 53

Lyus v Prowsa Developments

Answer 53

Purchaser of registered land agreed to be bound by an unregistered minor interest. Court imposed a constructive trust on him when he tried to rely on the absence of registration under the LRA.

Question 54

Ashburn Anstalt v Arnold CA.

Answer 54

Purchaser of land agreed to be bound by a contractual licence. Contractual licence is not a proprietary interest which cannot bind a purchase but the view of the CoA obiter was that a constructive trust can be imposed on a purchaser to prevent him going back on his agreement.

Question 55

Re Rose, *Pennington v Waine*, probably secret trusts.

Answer 55

Cases where the courts seek to give effect to intention despite failure to comply with formalities. All of these the underlying basis is ultimately unconscionability, that it would not be fair if a constructive trust were not imposed on the landowner.

Question 57

Where did the common intention constructive trust develop?

Answer 57

Primarily in the context of ownership of the family home.

Question 58

**The common intention constructive trust stems from two HoL decisions in the early 1970s:**

Answer 58

***Pettitt v Pettitt*** [1970] AC 777 ***Gissing v Gissing*** [1971] AC 886 Both of which concern the family home. There have been significant developments in more recent years in two cases.

Question 59

**_When will a common intention constructive trust arise: what are the requirements?_**

Answer 59

The courts look for evidence that it was the common intent of the parties to share beneficial ownership and that the intent has been acted on by the party claiming an interest to his or her detriment.

Question 60

Lord Bridge in Lloyds Bank v Rosset

Answer 60

identified two ways in which a common intention constructive trust can be established: (i) where there is evidence of an agreement, arrangement or understanding that the property is to be shared beneficially; sometimes referred to as an **“express bargain”.** (ii) where there is no direct evidence of an agreement arrangement or understanding etc and it is necessary to infer a common intention from the circumstances and the conduct of the parties. This is usually referred to as an **“implied bargain”**

Question 61

For a common intention constructive trust, will the court impute intention?

Answer 61

The court will not impute an intention. The court will look for inferred or implied intention

Question 62

Can an interest can be acquired by means of a constructive trust at some time after the property was initially acquired?

Answer 62

there is little case law on this.

Question 63

James v Thomas CA

Answer 63

Can an interest be acquired by means of a constructive trust at some time after the property was initially acquired? CoA decision. Mr Thomas was already the owner of the property when he entered into a relationship with Miss James. The view was expressed that it would be possible for her to acquire an interest, but it would be very difficult and would require exceptional circumstances. On the facts, the claim failed.

Question 64

Geary v Rankine CA

Answer 64

Can an interest be acquired by means of a constructive trust at some time after the property was initially acquired? CoA: again the court suggested that it is possible to acquire an interest some time after acquisition, but again the claim failed on the facts.

Question 65

Aspden v Elvy

Answer 65

Can an interest be acquired by means of a constructive trust at some time after the property was initially acquired? a claim did succeed in this case, where the claimant spent money on substantial improvements to the property. BUT this case was very unusual!

Question 66

Yaxley v Gotts

Answer 66

Y planned to buy a converted property and refurbish it. He approached Gotts for a loan. Gotts said that he would buy the property himself but Y could have the ground floor flat if he did work on the other flats. Y agreed. The property was actually bought by Brownie’s son, Alan. Y did the work without knowing this. Was imposed on basis of constructive trust. clearly a purely commercial situation, but common intention constructive trust applied.

Question 67

Parris v Williams [2008] EWCA

Answer 67

Agreement between friends: P to purchase 2 flats; P and W to have 1 each. W could not contribute to the purchase or borrow money as he was subject to an individual voluntary arrangement. P paid just over £9,000 and the balance of £119,000 was borrowed both properties bought in Parris’ name. Flats were rented out and the rent was used to pay the mortgage payments and some of the outgoings. W did some decorating and paid some of the maintenance payments. Purely commercial with use of common intention trust because of agreement and because W had complied with agreement, CoA enforced agreement by means of a common intention constructive trust.

Question 68

Is a common intention constructive trust applicable in commercial situations?

Answer 68

Following Yaxley v Gotts and Parris v WIlliams = yes. However, significnat developments have led some judges and commentators to say that it is no longer suitable in a commercial setting. **Arden LJ** in Crossco No.4 said this. But despite this, in more recent years, the common intention constructive trust has still been considered: Geary v Rankine (CA)

Question 69

*Geary v Rankine* [2012] EWCA

Answer 69

A woman claimed an interest in a guesthouse bought by her partner. Claim failed because the court said there was no common intention. But the CoA took the view that the common intention constructive trust was available although it might be a little bit more difficult to establish than in family home cases.

Question 70

Marr v Collie [2017] Recent PC decision.

Answer 70

This concerned the purchase of investment property by a couple. The court did use a common intention constructive trust. This case is support that common intention constructive trust remains relevant for commercial property and although Marr v Collie concerned a couple, there seems to be no good reason why it should be limited to couples and why it shouldn’t be available whatever the relationship between the parties. **Facts:** orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed formula, the details of which were to be agreed later. The defendant’s agent was successful, but when the parties failed to agree on the details of division the defendant retained the whole of the land for himself.

Question 71

Pallant v Morgan equity principle

Answer 71

the use of a constructive trust in a commercial setting in the line of cases based on the *Pallant v Morgan* equity where there is an unenforceable agreement to embark upon a joint venture which involves the acquisition of an identified plot of land by one of the parties to the agreement for the benefit of both. This seems to be related to the common intention constructive trust.

Question 72

Requirements for the Pallant v Morgan equity

Answer 72

it applies where you’ve got: **LUVP** 1. an agreement between two or more persons, 2. an agreement which is unenforceable, 3. and an agreement between them to embark upon a joint venture 4. which involves acquiring and then exploiting an identified plot of land.

Question 73

Banner Homes v Luff

Answer 73

Pallant v Morgan equity, endorsed in Yeoman's Row (HL): **Facts:** A commercial joint venture case. There was an informal agreement between Banner and Luff, that Luff would acquire property from a third party for the benefit of both of them. The agreement did not amount to a contract because there were terms yet to be agreed, but it had the effect that Banner did not consider bidding for the property itself. Luff had second thoughts about the joint venture before the purchase but did not tell Banner. CA Held: Luff held half the shares in the joint venture company on constructive trust for Banner. **Lord Justice Chadwick** affirmed Pallant v Morgan and explained the elements where equity would come into play; **PAID** 1. There is a **pre**-acquisition agreement 1. although not always contractually enforceable. 2. The arrangement contemplates that one party will take steps to **acquire** a property on the basis that the other will also acquire an interest in it 1. acquiring party has not **informed** the other that it does not intend to honour the agreement. 3. The non acquiring party has, because of the arrangement, refrained from taking an action (such as bidding for property itself) which is either **detrimental** to it or which gives the acquiring party an **advantage**. Where these three conditions are satified, "it would be inequitable or unconscionable to allow the acquiring party to retain the property for himself". These conditions were met in Banner Homes. Banner acted to his detriment in reliance on the arrangement with Luff by staying out of the market .

Question 74

Crossco No.4

Answer 74

**Most cases treat the Pallant v Morgan equity as a form of common intention CT.** **Majority of CA:** Accepted the above. But Etherton LJ in Stack v Dowden and Jones v Kernott rejected this and viewed the P v M equity as being based on a breach of fiduciary duty. Banner Homes was firmly based on a common intention constructive trust, namely a constructive trust of the kind enunciated in Gissing v Gissing (1971) AC 886 HL, Gissing cited, Cobbe v Yeoman's Row Management Ltd (2008) UKHL 55, (2008) 1 WLR 1752 followed. Cases subsequent to Banner Homes might mean that common intention constructive trusts could be limited in future to family cases, but the position was not so clear as to make it possible for the Court of Appeal to hold that Banner Homes could not stand with higher authorities and to treat Banner Homes as not binding, Stack v Dowden (2007) UKHL 17, (2007) 2 AC 432 and Jones v Kernott (2011) UKSC 53, (2011) 3 WLR 1121 considered (see paras 122, 129-130 of judgment). Applying the requirements for a common intention constructive trust, the critical question was therefore whether J's conduct had been unconscionable, Banner Homes followed and Pallant applied. The judge had been right to conclude that J were not guilty of unconscionable conduct such as to raise an equity against them. The alleged constructive trust was one under which J were precluded from exercising the break clause so as to terminate C's right to remain on the ground floor. On the facts, the judge had rightly found that there had never been any assurance by J that the break clause would not be operated in that way. The problem that had arisen for C was not due to any unconscionable conduct on J's part but to C's own carelessness in not checking the terms of the lease. J had not known that C had been labouring under a misapprehension as to the terms of the lease, so their conduct could not have been unconscionable and the judge had been right to dismiss the claim (paras 109-113, 130-132). There were other insuperable difficulties in the way of a constructive trust based on the February discussions. The judge had been entitled on the facts to find that no agreement had been reached in February. The absence of agreement on critical parts of the commercial deal could show that there had never been a common intention to enter into a legal commitment: the parties' conduct showed that neither side had wished to commit themselves until agreement was reached on the extent of the demise of the ground floor; further, both sides had intended that all aspects of the demerger should be embodied later in formal contractual documentation (paras 98-108). (2) (Obiter) Banner Homes was invoked where parties had been in commercial negotiations over the acquisition of property but negotiations had failed so that there was no legally enforceable agreement. The advantage of Etherton L.J.'s reinterpretation of the case law was that it would restrict the number of cases in which Banner Homes could be used. That would be consistent with developments in the law of proprietary estoppel (para.133). (3) (Per Etherton L.J.) The Banner Homes constructive trust was not properly analysed as a common intention constructive trust. The authorities on common intention constructive trusts concerned disputes where a couple had purchased property as a family home. The jurisprudence in that area was driven by specific factual and policy considerations that had not applied to Banner Homes and did not apply in the instant case. Instead, the cases in which the Pallant equity was said to have arisen could be explained by the existence and breach of fiduciary duty. They could therefore be seen as cases where, pursuant to the constructive trust, the court deprived the defendant of the advantage obtained in breach of trust; on that basis, the instant appeal failed, Banner Homes and Pallant considered (paras 85-96). **Summery:** Although there were advantages in restricting the constructive trust described in Banner Homes Holdings Ltd (formerly Banner Homes Group Plc) v Luff Developments Ltd (No2) (2000) Ch 372 to family home property disputes, the reasoning in that case was firmly based on a common intention constructive trust and it remained binding in respect of commercial property disputes in the absence of Supreme Court authority to the contrary.

Question 75

Pettitt v Pettitt Gissing v Gissing

Answer 75

There is no doctrine of family property under English law the courts do not have the ability under English law to determine ownership of a family home by use of their discretion. That was made very clear in both above cases

Question 76

In the case of a domestic purchase, is a resulting trust or a common intention constructive trust more relevant?

Answer 76

The resulting trust has become irrelevant. The courts no longer use the resulting trust to determine ownership of the family home. They only use common intention constructive trust. The courts have introduced more flexibility in relation to whar can give rise to a common intention constructive trust and how the courts quantify shares under this. _But only in context of a family home_

Question 77

What did Lord Denning try and fail to create?

Answer 77

create a law of family property by means of what he called Lord Denning’s “new model” constructive trust which he was prepared to impose whenever it was fair to do so, but it never caught on as other judges were not prepared to use it .

Question 78

_Does a lack of the law of family property cause problems?_

Answer 78

Not cause a problem where a couple are married and then divorced, or have entered into a civil partnership which has then dissolved, because the courts do have a statutory power to redistribute property on divorce or dissolution.

Question 79

How do we draw the line between domestic and commercial purchases?

Answer 79

It would seem from the case law that two factors are relevant: 1. The relationship between the parties and 2. The type of property they have purchased and the reason for that purchase.

Question 80

* Jones v Kernott* [2011] UKSC 53, * Aspden v Elvy* (HC) [2012]

Answer 80

Both cases involved actions of the parties after separation.

Question 81

Jones v Kernott [2011] UKSC 53

Answer 81

involved actions of the parties after separation. **Facts:** property was acquired while they were a couple.The question was what was the beneficial ownership some years after they’d separated.

Question 82

Aspden v Elvy

Answer 82

the acquisition of the property and all relevant events in relation to that property occurred some years after that couple had ceased to be a couple. The fact that the parties are a couple mean that it’s regarded that’s efficient from the relationship point of view – a domestic purchase.

Question 83

Gallarotti v Sebastianelli [2012] EWCA

Answer 83

The CoA referred to a purchase by very good friends as more domestic than commercial. Having said that, the outcome of the case was that the CoA did not think that they intended to share ownership equally. They did determine ownership by contributions to the purchase price, although the court was a little bit more flexible than under a resulting trust. This case was decided upon **constructive trust** principles. Whilst the Court of Appeal in Gallarotti considered that they were to apply constructive principles and did not suggest that they were applying a resulting trusts type approach to quantification, the case demonstrates, akin to the approach taken in Laskar, a readiness to focus on financial contributions in quantifying the beneficial interests of parties who are not in a familial relationship, but whose relationship falls short of a formal commercial arrangement. Conclusion In conclusion, both Gallarotti and Laskar indicate that, whilst a formal accounting exercise is likely to be eschewed in the context of property purchased between parties who are not formal business partners, financial contributions are likely to be the key consideration in quantifying the beneficial interests between parties who are not members of the same family unit.

Question 85

Laskar v Laskar [2008] EWCA

Answer 85

**Categorisation problems:** **Facts:** Purchase of a mother’s council house by the mother and her daughter. *Laskar v Laskar* [2008] EWCA Civ 347 - Purchase of a mother’s council house by the mother and her daughter. The CoA took the view that the new approach was inapplicable because the property had primarily been purchased as an investment. After the purchase, as intended by both parties, the mother moved to live with another daughter and the property was let out. Held: concluded that it would not be right to apply Stack to this case as the property had not been purchased as a home but as an investment. He added that, had Stack applied, he would have found that the presumption had been rebutted on the facts. Given the absence of any discussion, Lord Neuberger fell back on the resulting trust. **Lord Neuberger held:**"it would not be right to apply Stack v Dowden to such a case as this, where the parties primarily purchased the property as an investment... even where the relationship is a familial one". Lady Hale was content to say that while resulting trusts are innapropriate to the family home, whether they were appropriate in other cases is unclear.

Question 86

Goodman v Gallant

Answer 86

An express declaration as to the beneficial interest will be conclusive unless there is fraud or a mistake. recently confirmed; Pankhania v Chandegra [2012] EWCA. BUT an express trust of land must comply with with s 53(1)(b) LPA 1925 – must be evidenced in writing to be enforceable.

Question 87

Pankhania v Chandegra [2012] EWCA

Answer 87

Recently confirmed Goodman v Gallant, that: An express declaration as to the beneficial interest will be conclusive unless there is fraud or a mistake. BUT an express trust of land must comply with with s 53(1)(b) LPA 1925 – must be evidenced in writing to be enforceable.

Question 88

What has to happen for an express declaration to be conclusive?

Answer 88

An express trust of land must comply with with s 53(1)(b) LPA 1925 – must be evidenced in writing to be enforceable.

Question 89

Springette v Defoe CA

Answer 89

The mere fact that the legal title is put into the joint names of the parties does not amount to an express declaration of trust of the equitable interest

Question 90

Could you have a valid contract dealing with the beneficial ownership?

Answer 90

Unlikely because there would need to be: 1. intention to create legal relations and 2. need writing to comply with s.2Law Property Miscellaneous Provisions Act 1989. Rare that there is a valid contract. Rare that there is a valid contract.

Question 91

One issue in which there is no clear answer: what if you have an express declaration of trust in writing so it is valid at the time the property is acquired. Is that effective for all time, or can it be overridden at a later date by a common intention constructive trust?

Answer 91

There is no agreement on this: **Lady Hale** in **Stack v Dowden:** suggested that it is possible that the express declaration can be overriden at a later date. **Simon Gardner** in **Understanding Goodman v Galland** put forward the view that the effect that an express declaration of trust is basically a compromise of claims at the time of acquisition. It is a question of construction as to whether it is also meant to replace future claims or not. But most recent comments in: **Arif v Anwar =** view of judge that once express trust is created, you can only change beneficial ownership by assigning part of it which would need to be in writing because of s.53(1)(c)LPA1925. **This remains open.**

Question 92

Stack v Dowden [2007] UKHL

Answer 92

Where there is legal title in joint names, there is a _presumption of an equitable joint tenancy_ in cases of a family home! Confirmed in **Jones v Kernott** and there will be a common intention constructive trust (Jones v Kernott)

Question 93

Jones v Kernott

Answer 93

Not only do we have a presumption of equitable joint tenancy in family home cases: Stack v Dowden. But this case puts forwards the view that: the mere fact of putting legal title into joint names of parties creates a common intention constructive trust.

Question 94

Why did the House of Lords in Stack v Dowden make such a big difference in the law? i.e. justification

Answer 94

The judgment in Jones v Kernott best explains this: * **Lord Walker and Baroness Hale:** said that a purchase in joint names is a strong indication of an emotional and economic commitment to a joint enterprise, and the parties are unlikely to have intended that their ownership is determined by their contributions over the years. * **Lord Collins** expressed the view that that it must have been a conscious decision to put the property into joint names and you therefore would have expected the parties to specify if their shares were to be anything other than joint.

Question 95

What are the similarities between Stack v Dowden and Jones v Kernott?

Answer 95

Both Stack v Dowden and Jones v Kernott involve the purchase of a home via co-habiting couples. ## Footnote The whole discussion by the SC in Jones v Kernott was on the premise that they were dealing with a purchase of a house or flat by a couple for their joint occupation. But this approach has not been limited to purchase by a couple. The presumption of an equitable joint tenancy was applied to the purchase of a home by a parent and child – mother and son – in Adekunle. This was approved by the CoA in Lasker v Lasker. It is just a presumption of an equitable joint tenancy.

Question 96

When does the stackv dowden presumption apply?

Answer 96

Presumption applies to a purchase of a house or flat by a couple for their joint occupation: *Jones v Kernott*. It may also apply to the purchase of a home by a parent and child: *Adekunle v Ritchie* 21/8/09; *Laskar v Laskar*.

Question 97

Adekunle

Answer 97

Presumption of stack v dowden may also apply to the purchase of a home by a parent and child:

Question 98

Can the stack v dowden presumption be rebutted?

Answer 98

The presumption can be rebutted by evidence to the contrary, but there will be a heavy burden to do so: Stack v Dowden. ## Footnote The mere fact that they have contributed unequally will not rebut the presumption of an equitable joint tenancy. According to HoL in Stack v Dowden, there is a very heavy burden in rebutting the presumption of the equitable joint tenancy – that it will be unusual that the presumption can be rebutted.

Question 99

Jones v Kernott. Rebutting Stack v Dowden presumption

Answer 99

There must be evidence of an intention to share other than equally. Very clear statement by SC in Jones v Kernott that you need evidence from which it is possible to imply an intention to share other than equally. Need either an express agreement that shares should not be equal, or need to be able to imply from the conduct of the parties that they had a common intention to have shares other than equal. Can’t impute an intention – fairness is irrelevant.

Question 100

What is the most important factor in rebutting the stack v dowden presumption?

Answer 100

Whether the parties kept their finances separate: Stack v Dowden

Question 101

Stack v Dowden SC Facts

Answer 101

_Presumption of equitable joint tenancy was rebutted. Was rebutted by the fact that parties had always kept their finances rigidly separate. Sufficient to rebut presumption._ Cohabiting couple, together since 1975. Ms Dowden bought house in 1983 with aid of mortgage loan; she paid mortgage and all outgoings; Mr Stack may have contributed something to the account from which the deposit was paid. Had 3 children. He did some work on the house. House in question bought with money from her account (including the proceeds of sale of the first house) and a mortgage loan. Transferred into joint names. He paid interest on mortgage loan and endowment premiums; loan paid off in lump sums by both. All savings and investments (apart from the house) kept rigidly separate as was responsibility for outgoings. Ms Dowden succeeded in claim for 65%. SC **said in this case: that one can only rebut presumption in rare cases – could be argued that couples keeping finances separate is not that exceptional or unusual, but this was sufficient on the facts of the case. Jones v Kernott confirmed that keeping finances separate would be very relevant in rebutting the presumption. ​**

Question 102

Adekunle

Answer 102

**_Judge in Adekunle suggested would be easier to rebut presumption in case of parent and child than in the case of a couple._** **Facts:** Purchase by mother and son in joint names under right to buy provisions. Primary purpose of purchase was a home for M; joint names because M had no job and could not fund mortgage on her own. Discount was more than 50%; each contributed equally to the mortgage repayments. Separate finances. M had 9 other children with whom she was on good terms and no reason to believe she would want all her property to go to S. She kept finances separate, made significantly different contributions, and important factor in eyes of judge was that this mother had other children as well, was on good terms with them, and no reason why she would want to give al lof her property to one particular son.

Question 104

Laskar v Laskar

Answer 104

Joint purchase by mother and daughter under the right to buy provisions because mother could not afford it on her own. Financial affairs separate; primarily bought as an investment; M had other children and no reason to think this daughter to receive more; contributions significantly different. Purchase by parent and child. View was that presumption did not apply at all, because was not a domestic purchase. Even if presumption did apply, it was rebutted for the same reasons as in Adekunle

Question 105

Fowler v Barron.

Answer 105

Cohabiting couple bought in joint names. Had a family; joint liability under mortgage. Woman paid nothing to acquisition costs; used her income to pay for some household expenses e.g. gifts, clothing, holidays, school trips. Had made mutual wills which suggested believed each had an interest to leave. No other substantial assets. Presumption of equitable joint tenancy not rebutted on facts. Couple regarded finances and income as pooled. Had separate accounts. Woman had contributed very little to household. But evidence was that they regarded all the money as ‘theirs’. So there was nothing to rebut the presumption of an equitable joint tenancy.

Question 106

Do courts recognise an ambulatory constructive trust (where change of intention)?

Answer 106

yes: ## Footnote **Jones v Kernott** Barnes v Phillips Montalto v Popat [2016]

Question 107

Jones v Kernott Facts

Answer 107

The courts have recognised an ambulatory constructive trust where a change of intention will be recognised: Couple had separated after 8 years together during which they had shared expenses nothing to rebut presumption of equitable joint tenancy. For the next 14 years Mr Kernott contributed nothing to the expenses of the property and very little to the maintenance of their children. They cashed in and split a life insurance policy and Mr Kernott used his share to buy himself a property. He could not have paid for the new property if he had had to contribute to the shared one. There was sufficient evidence that their intentions had changed. View was that Mr K’s interest had crystallised at the moment of their separation.

Question 108

Barnes v Phillips [2015] EWCA

Answer 108

. Similar case to Jones v Kernott. After their purchase of a home Mr Barnes had purchased properties as business investments in his own name. He got into debt and the home was re-mortgaged to cover those debts. He received a sum of money from the re-mortgage equal to 25% of the value of the property. One month after the re-mortgage the relationship ended. After a while Mr Barnes ceased contributing to the mortgage repayments. CoA inferred a common intention to vary their interests at the moment of separation. This was supported by the fact that Mr B from that moment ceased contributing to mortgage repayments.

Question 109

Can the court recognise an ambulatory constructive trust where the couple has not seperated?

Answer 109

There is no good reason why not. **Lady Hale in Stack v Dowden suggested** that if one party pays for an extension or some other significant improvement to the property, this may show a change of intention. but it will always be looked at in the context of the whole relationship between the parties.

Question 110

Where there is a sole legal ownership, what is the first thing the person must establish?

Answer 110

That they have an equitable interest in the property. They must establish this by means of a common intention constructive trust. There are many cases with dicta stating that a resulting trust is irrelevant in this context because it is too inflexible. * Even if the non-legal owning party has made a substantial contribution, which would give rise to an interest under a resulting trust, the court will still use the common intention constructive trust.

Question 111

What is required for a common intention constructive trust?

Answer 111

1. Common intention of the parties 2. Detrimental reliance **Lord Bridge** in **Lyolds bank v Rosset** said that there were two ways of establishing intention: express or implied bargain.

Question 112

How many ways can we establish a common intention of the parties?

Answer 112

**Lord Bridge** in **Lyolds bank v Rosset** said that there were two ways of establishing intention: express or implied bargain.

Question 113

With the evidence of a common intention / express bargain. Can there be an oral agreement?

Answer 113

There needs to be an express discussion. It is possible there might be an express agreement that claimant will get a beneficial interest (or so he is told), but if this is not in writing, this is not enforceable (S53(1)(B) LPA). But what we could have is a very clear express agreement that is not in writing, this would be sufficient to show a common intention

Question 114

Eves v Eves CA

Answer 114

**Common intention CT/ Express bargain = intention** Legal owner told his partner that he would have put house on their joint names, had she been 21 but she was only 20. This was irrelevant, but she did not know that. Court found an express bargain, an express common intention that the parties would share beneficial ownership.

Question 115

Grant v Edwards CA.

Answer 115

**Common intention CT/ Express bargain = intention** ## Footnote The legal owner told his partner that she should not be on the legal title because it would cause her prejudice in her divorce proceedings. Court found an express bargain, an express common intention that the parties would share beneficial ownership. Specifically refereed to by lord bridge in Llyods v Rosset as an express bargain, and the case of Eves v Eves

Question 116

Hammond v Mitchell

Answer 116

**Common intention CT/ Express bargain = intention** For tax reasons and in connection with his pending divorce. Legal title in his name only because tax reasons and his divorce. Court found an express bargain, an express common intention that the parties would share beneficial ownership.

Question 117

When looking at common intention CT/Express bargain= intention. Do the courts look at the actual intention of the legal owner or the apparent intention?

Answer 117

Arguably, that there was never a common intention and that legal owner had no intention at all of sharing ownership of the property. But the legal owner was judged by his apparent intention. By what he led his partner to believe. And the way the cases are explained is that there must have been a common intention to share ownership because otherwise there was no need for an excuse. But it is an inventive approach, stretching the idea of common intention when in reality it is not a common intention.

Question 118

Curran v Collins [2015] EWCA

Answer 118

Legal owner told his partner that the legal title was put in his name only because it would be cheaper because they would only need one life assurance policy. **Lewison** LJ discussed the effect of “an excuse” as to why one party does not appear on the legal title: "There are, two cases in which a specious excuse has been held to give rise to the inference of a constructive trust. However, these cases are **fact-sensitive and need to be carefully examined."**

Question 119

What were the fact sensitive issues in Eves v Eves and Grant v Edward that Lewison LJ in Curran v Collins spoke about?

Answer 119

Lewison JL referred to Eves v Eves and Grant v Edwards. He pointed out about Eves v Eves and Grant v Edwards, was that in both cases, at time of the purchase, the parties were living together, they had children, they were buying a family home and arguably the most important point: there was a positive statement by the legal owner that the property would otherwise have been brought in their joint names.

Question 120

Facts of Curran v Collins

Answer 120

at time of purchase, Ms Curran did not intent to move in with Mr Collins and at no point did Mr Collins say that legal title would be put into joint names if it were not for the costs. In this case, the claim of a Constructive trust failed.

Question 121

Springette v Defoe

Answer 121

The parties must have actually discussed the issue (in relation to express bargain) ## Footnote Not enough that the parties both have the same intention in their minds, they have to have discussed it**. Lord Steyn put it:**'our *law* of *Trusts does not allow* the effect of a *property right* by *telepathy*'

Question 122

Midland Bank Ltd v Dobson

Answer 122

Detrimental reliance on the common intention: It is essential that the claimant has acted to his/her detriment or significantly altered his/her position in reliance on a belief that he/she was thereby acquiring a beneficial interest. This may seem basic but obviously, the acts must come after the evidence of common intention because otherwise it cannot be reliance on the common intention. **If agreement comes later, and discussion on things before, this is not right. Lots of mistakes in PQs**

Question 123

Grant v Edwards

Answer 123

The courts will assume that acts were done in reliance on such a belief or common intention if they are sufficiently detrimental e.g. Show detrimental acts, reliance will be assumed. **Facts:** Claimant made a substantial contribution to household expenses, kept house and brought up the children. Owner could not otherwise have paid the mortgage. There are financial contributions, acts which are **referable to acquisition to house** because she allowed her partner to pay the mortgage instalments. Result: she got a half share**. Significant financial contribution is a sufficient detrimental act.**

Question 124

Eves v Eves

Answer 124

The courts will assume that acts were done in reliance on such a belief or common intention if they are sufficiently detrimental e.g. Show detrimental acts, reliance will be assumed. **Facts:** Woman cleaned the house, carried out extensive decorative work, broke up concrete in front with a 14lb sledgehammer and disposed of the rubble, did other acts in the garden e.g. turfing, replacing an old shed with a new one. Here there was not a financial contribution, but she did acts relating to the property which added value to the property which workman would otherwise would have been paid to do. She got a ¼ share.

Question 125

What is similar about Grant v Edwards and Eves v Eves?

Answer 125

In both these cases are acts of significant value which relate to the property AND this is where sexism comes in, they were acts that woman were not expected to do out of mere love and affection, they were the type of acts that women would do only where expectation of gaining an interest in the property.

Question 126

Midland Bank v Dobson.

Answer 126

In cases where the claim of an interest failed, it was because the court took the view that the acts would have been done anyway out of love and affection or a desire to live in pleasant surroundings **Facts:** Woman kept house, decorated, bought household items. These were regarded as acts she would have done anyway simply for love and affection or desire to live in comfortable surroundings. The claim failed. Decorating added little value to property, not of substantial nature, unlike in Eves v Eves.

Question 127

Lloyds Bank v Rosset.

Answer 127

In cases where the claim of an interest failed, it was because the court took the view that the acts would have been done anyway out of love and affection or a desire to live in pleasant surroundings. THe claim was said to be "so triffling as to be almost de minimis" **Facts:** Overseeing of builders, decorating. What was said here was obiter because it was not an express bargain but implied. But view that the acts would have been sufficient anyway. These acts were referred to acts the wife would have done anyway even without common intention and the point was made that the acts were of “trifling value” in comparison to the house.

Question 128

Where is the line drawn between Eves v Eves and Midland Bank v Dobson and Lloyds bank v Rosset.

Answer 128

In all three cases, there are some work on property done by claimant, is the difference between how substantial the work was and how much value was done to the property or is it to do with what you would normally expect from a woman? What if it had been a male partner who had broken up concrete with a 14lb sledge hammer, is that the type of work a man does round the house – can a man cannot claim and interest. The court narrowed down on this point that a woman was wielding a sledge hammer. The court combines: are the acts sufficiently detrimental so you can assume they have been done on reliance of getting an interest.

Question 129

Is there a minimum level of detriment if we can prove reliance?

Answer 129

There is some indication in Grant v Edwards that the courts would be willing to be flexible when it comes to the detriment required. There are two judgments in Grant v Edwards: * **Mustill** LJ - **Contractual analysis.** We should look at the bargain - at the agreement between the parties. * So if there is an express agreement between the parties as to what the claimant should do in return for acquiring an interest, then the claimant need only comply with that bargain. So if the bargain is: give up work for 5 years and look after children until school age and in return you will get an interest in the property. Whatever is agreed, however little, this will be sufficient according to lord Mustill. Normally there will not be an agreement like this. But Mustill envisioned inferring a bargain from the conduct of the parties. Again, if you can infer a bargain, the person need only comply with the terms of that bargain to acquire an interest. How willing the courts are to infer a bargain is open to doubt. Mustill only discussed a situation where there was a bargain between the parties, he did not discuss situation where there was a promise on which the other party acts to his/her detriment. * Browne Wilkinson discusses this. He says useful guidance is found in **proprietary estoppel cases** where, his suggestion was that possibly any act to the detriment of the claimant, relating to the joint lives of the parties may be sufficient. He suggested it might include setting up a home together, paying general household expenses or having a baby. But he **suggested** this analogy, he did not make a decision on the point because it had not been argued.

Question 130

How to establish an implied bargain common intenion constructive trust?

Answer 130

This is more difficult to establish. The courts look at: 1. acts of the claimant in the light of the whole court of dealing between the parties 2. and they look at this for evidence of common intention.

Question 131

For an implied bargain, will the courts infer/imply or impute intention?

Answer 131

They will only infer or imply a common intention but will not impute a common intention. There must be evidence to support a common intention.

Question 132

midland bank v Cooke

Answer 132

Has been a criticisied case showing that the courts will invent a common intention in some circumstances. Here the parties told the court that they did not have a common intention, but the court nonetheless found evidence of a common intention.

Question 133

Are the courts restrictive in their approach to find an intention?

Answer 133

The courts have, in the past, taken a restrictive approach as to what acts will be regards as sufficient to show a common intention. It may be that the courts are becoming, or will become more flexible. One of the area where the courts have taken a restrictive approach relates tot indirect financial contributions. More recent dicta in stack v dowdon suggests the courts should be more generous. What we have in nearly every case is that the courts have an idea that a particular act is sufficient or not, so they look at sufficient acts done by the parties. It is unclear how far this will be adopted, but there is one sentence in Jones v kernott by Baroness hale, just one sentence which is being relied upon to say that the courts should look at the whole conduct of the parties. So not just identifying particular acts as sufficient/insufficient, but look at the whole acts done by the parties. This seems to have been adopted in Geary v Rankine, although the claim failed. It seems to have been adopted in Aspden v Elyy. But the actual outcome in both these cases would have been the same whether traditional approach or “whole conduct” approach. But if the courts do fixate on this one sentence and go for whole conduct approach, some of the cases we will look at might become irrelevant.

Question 134

Bernard v Josephs [1982] Ch 391, CA.

Answer 134

Implied bargain CT. It is irrelevant whether or not the parties are married except that inferences from conduct may be different if there is not the same commitment as marriage. The strength of their relationship is relevant, so if couple with same commitment as marriage, it is much easier to make inferences from their conduct and more difficult where there is a loose relationship.

Question 135

Lloyds Bank v Rosset.

Answer 135

A contribution that would give rise to a resulting trust is sufficient for a common intention

Question 136

Would borrowed money which would not give rise to a resulting trust give rise to an implied bargain constructive trust?

Answer 136

Yes - Huntingford v Hobbs - The courts will give effect to an agreement as to whose contribution borrowed money is:

Question 137

Huntingford v Hobbs

Answer 137

The courts will give effect to an agreement as to whose contribution borrowed money is.

Question 138

Lord Diplock, Gissing v Gissing

Answer 138

Actual repayments of a mortgage loan may also be taken into account for common intention implied bargain

Question 139

Lightfoot v Lightfoot-Brown

Answer 139

Actual repayments of a mortgage loan may also be taken into account (Lord Diplock, Gissing v Gissing) but only if both parties know of any repayment **Facts:** an ex husband paid a substantial amount off the mortgage loan without his ex wife’s knowledge did not give rise to a common intention express trust.

Question 140

Should indirect financial contributions to the purchase price give rise to a CT?

Answer 140

Against: * Lord Bridge in *Lloyds Bank plc v Rosset* doubted that anything less than direct contributions would be sufficient for an implied bargain constructive trust. Here: paying of mortgage instalments would be sufficient for an implied bargain CT. This was applied by CA in Ivin v Blake For There is some authority in favour of in direct contribution being sufficient. There are a number of dicta pre-dating Lord Bridge in Lloyds Bank v Rosset. Dicta to the extent that indirect contribution is sufficient if it is relatable to the property. * Dicta that payments of household expenses can be sufficient if they are “referable to the acquisition of the property”: Lords Pearson and Diplock in *Gissing v Gissing*, Fox LJ in *Burns v Burns* [1984] Ch 317. By referable to acquisition – seems to mean that They can be linked to the repayment of the re- mortgage, for example – they enable the repayment of the mortgage. * Le Foe v Le Foe * Comments in Stack v Dowden * Comments by the HL, comments that the courts ought to take a more relaxed approach. Lord Walker expressed the view that lord bridge in Lloyds Bank plc v Rosset was probably not correct, but more importantly, the law had moved on since Lloyds Bank plc v Rosset and should move on further such that a broad view should be taken on household expenditure. **Baroness hale expressed the view** that the hurdle to establish a beneficial interest was perhaps to high. We cannot with any certainty say that indirect contribution is sufficient, can arguably say they should be and can point to Stack v Dowden and comments in Jones v Kernott that you should look at the whole conduct of the parties to argue that in the future, the courts may well consider indirect contributions to be sufficient.

Question 141

Ivin v Blake

Answer 141

**Working a low wage will not be sufficient to create a CT** A woman worked unpaid in her mother’s business. The profits of the business were used for the deposit for and legal expenses of a purchase and made that purchase possible. CA held: she did not have a share of the beneficial ownership because her contribution had been indirect. Clear authority, but actual discussion of issue and list of authorities in this case were very limited. Showing that indirect financial contributions are not enough

Question 142

James v Thomas

Answer 142

* Woman moved into partner’s home and worked in family business. The profits of this business were used in paying off mortgage loan, the view taken by CA in this case was that she worked in the business because the parties were dependant on that business for payment of all their outgoings. She again did not get a share. Indirect financial contributions was not sufficient to raise a CT. To an extent, we can disregard James v Thomas. The case where: the property was already owned by her partner before she moved in with him and started working on the business. Acquiring an interest in such situations is very difficult and requires exceptional circumstances. Could dismiss James v Thomas on that basis and say that it is very difficult in those circumstances, but different if those parties acquire the property together.

Question 143

Le Foe v Le Foe

Answer 143

H paid the mortgage, service charges and outgoings; W paid for day to day domestic expenditure. She earned less but the judge had no doubt that the family economy depended on her earnings. **First instance decision.** Contributions from wife to day to day expenditure, husband paid mortgage and various outgoings. J**udge had no doubt that family economy depended on her earnings, not just husband couldn’t pay mortgage without her contribution, but they, as a family spent such an amount of money that her contribution was essential.** The judge in this case relied on dicta in Gissing v Gissing expressing the view that lord bridge in Lloyds Bank plc v Rosset was too restrictive in approach and also took the approach that what lord bridge was actually saying, was that only exceptionally would something less than a direct contribution be sufficient.

Question 145

Section 37 Matrimonial Proceedings and Property Act 1970

Answer 145

With a resulting trust, it was suggested that if you buy a property and it needs renovation at that moment, payment of those renovations might be seen as the acquisition cost of the property. Paying part of acquisition cost of property will be sufficient to gain an interest. But what if you cannot see the payment/renovations as part of the acquisition cost, such as renovations which take place after acquisition. There is not a problem for spouses or civil partners because there is a statutory provision: section 37 MPPA 1970. Section 37 Matrimonial Proceedings and Property Act 1970 applies where a spouse makes a substantial contribution in money or money's worth to the improvement of property in which either or both have a beneficial interest. The spouse will get a share or enlarged share in the property unless there is an agreement otherwise. The share will be as agreed or what is fair. See also s 65 Civil Partnerships Act 2004 appliable to civil partner.

Question 146

Aspden v Elvy.

Answer 146

Barn originally acquired by Mr A _before he cohabited_ with Mrs E. They then separated and It was transferred into her sole name when they separated. Some 10 years after their separation Mr A contributed £65–70,000 to its conversion at a time when he was living in a caravan. At this time he was living in a caravan, the contribution was a significant part of his assets. The judge took the view that he could not have intended to have made a gift of this money. It was possible to infer from his contribution, that he hoped to live in and have an interest in the property and also that Mrs Elvy knew of this. The case was treated as involving an unmarried couple, even though they had been separated for 10 years.. A constructive trust did arise where claimant contributed a substantial sum for conversion of a barn, it was, an unusual case.

Question 147

Are non-financial constirbutions sufficient to have a CT?

Answer 147

Insufficient (unless within section 37 MPPA 1970)

Question 148

Burns v Burns

Answer 148

**Contributing to the household expenses will not be enough to create a resulting trust** A woman had for 17 years made a substantial contribution to the household. She had looked after the children and home, done decorating, paid the rates and phone bill and purchased chattels such as a washing machine. This case is always cited to show the law is unfair. Held: she got nothing, when the parties separated. Because you could not say that her acts were done only as a result of an intention of acquiring an interest in the property. **Although:** such contributions to family expenses will not give rise to a presumption of a resulting trust, they may, if substantial, constitute sufficient dertiment to lead to the imposition of a constructive trust.

Question 149

Pettitt v Pettitt

Answer 149

Man spent money and labour on redecoration and minor improvements (a wardrobe, ornamental well, brick wall, lawn and patio). The woman was the legal owner, claim by her husband. Held: he failed to acquire an interest. View expressed even acts done by Janet Eves would not be sufficient of an implied bargain constructive trust.

Question 150

Re Densham

Answer 150

For quantification of the shares, if there is an express agreemet as to the share, this will be enforced.

Question 151

Gallarotti v Sebastianelli

Answer 151

Purchase by two friends in S’s name; he paid more of the initial cost but it was agreed that the parties would have equal shares and G would contribute a greater share of the mortgage repayments. G did not. The court took the view that the agreement as to equal shares did not apply in the circumstances. The agreement was conditional on G making a larger contribution to the mortgage repayment.

Question 152

What happens if there is no agreement of shares?

Answer 152

the courts will look at the whole course of dealing between the parties in relation to the property: a “holistic” approach. ## Footnote The HL in Stack v Dowdon and SC in Jones v Kernott. Adopted an approach already taken in sole legal ownership cases, this is referred to as the holist approach which requires the courts to consider the whole court of dealings between the parties in relation to the property. The CA in Graham v York emphasised it was only the course of dealing IN RELATION TO THE PROPERTY which is relevant.

Question 153

Graham v York

Answer 153

**Quantification of shares, it is only the course of dealings in relation to the property which is relevant.** a couple where the relationship between them had been abusive. CA said the fact relationship was abuse was totally irrelevant to determining shares. All that was relevant was the conduct of the parties in relation to the property.

Question 154

Jones v Kernott SC Quantification approach

Answer 154

Dicta that same approach will apply in both sole and joint legal ownership cases. According to the SC, they should see if there is: 1. Evidence of intention of the parties 1. Looking at whole course of dealing, can the courts infer or imply the intention of the parties as to their respective shares 2. If there is evidence of intention, this is conclusive. 1. This is conclusive even if the courts think it is unfair. The courts cannot substitute the intention of the parties. **If it is impossible to infer the intention of the parties:** 1. Then, the court will “impute to the parties the intention of a reasonable and just person” – Jones v Kernott wording. This means the courts will decide what is fair in all the circumstances. 2. Lord Kerr in Jones v Kernott did not like the wording of the majority and thought he should make clear that this was all about fairness.

Question 155

Jones v Kernott two stage approach

Answer 155

If there is evidence of the intention of the parties that will be conclusive and the court cannot substitute its view of what is fair; but if the court cannot infer an intention from the evidence, it will impute to the parties the intention of a reasonable and just person:

Question 156

Does the Jones v Kernott 2 stage test have problems?

Answer 156

* Fairness – a discretionary approach, does not seem to be consistent with property law and property law rights. * In theory this two stage approach seems to be clear, it is difficult to see if the courts are actually using this two stage approach. * Implying or inferring something from the facts can sometimes be very difficult to distinguish imputing something from the facts – there is a very thin line. In this situation, we look at the same facts for both: * Whole course of dealing between the parties * We then infer or impute and intention from these facts. * In fact, even the SC in Jones v Kernott did not agree, 3 members of the SC inferred an intention from the facts. The other two members said it was impossible to infer an intention but they reached exactly the same conclusion as the majority on the basis of fairness. Moreover, some judges appear to be jumping the first stage: *Aspden v Elvy* judge looked to see if express agreement to shares, and when there was not, he went to what is fair without inferring an intention as to the parties, without trying,

Question 157

Waite LJ, Midland Bank Plc v Cooke

Answer 157

sole legal owner, this is the beginning of this “holistic approach” for quantification, or the first explanation of the holistic approach. _What is the relevant factors and the holist approach?_ It will take into consideration all conduct which throws light on the question what shares were intended.

Question 158

Baroness Hale, Stack v Dowden Relevant factors

Answer 158

Many more factors than financial contributions may be relevant to divining the parties’ true intentions. These include: **COPRA FD** * any advice and **discussions** * **purpose** the home was acquired * nature of **relationship** * **childrent** * how purchase was **financed** * how they **arranged** their finances * how they discharged **outgoings** Despite the range of factors identified as relevant by Baroness Hale. In most recent cases, it has been primarily the financial contributions of the parties which have determined their shares. This is true in Stack v Dowdon, Jones v kernott,

Question 159

In relation to quantification of shares, do the courts take a broad view or a restrictive one of financial considerations?

Answer 159

They take a broad view: 1. They do not limit themselves by looking at financial contributions for a resulting trust. Other financial contributions will be regarded as relevant. In practice financial contributions seem to be of primary importance. However, the courts take a more flexible approach than with a resulting trust, taking into account payment of household expenses and significant improvements to the property and looking broadly at contributions over the years.

Question 160

Grant v Edwards

Answer 160

Most important factor was that the balance of insurance moneys received after a fire were paid into a joint account. Also initial intention of the parties that the property be joint property and substantial contributions to household expenditure. This was a sole legal title case and in determining the shares of the parties, the most important factor was that insurance money received after a fire was paid into a joint account, but this fact was looked at with the background of some evidence that the parties did intend the property to be joint property and substantial contributions to household expenditure. The court awarded the claimant a half share of the beneficial ownership.

Question 161

Midland Bank Plc v Cooke

Answer 161

The house was in H’s sole name. The purchase price had been provided as follows: £1,000 from H; £1,100 as a wedding gift from H’s parents; £6,500 mortgage borrowing. W had paid only household outgoings (and there was insufficient evidence as to whether this enabled H to pay off the mortgage) and for maintenance and improvements. There had been no discussions as to beneficial ownership so it was an implied bargain case. The CA started by taking the view that the wedding gift was a gift to both of them. Because of this, the wife therefore had made a direct contribution to the purchase price of the wedding gift: £550. This direct contribution was enough to give rise to an implied bargain common intention constructive trust. However, her share was not limited to this contribution, she was award a half share. The relevant factors were: W had brought up 3 children, carried out full or part time work, paid household bills, taken joint liability under 2 second mortgages. These factors combined with the factor that they were married. Judge thought the marriage was a relevant consideration, made the judge believe that their intention was to share everything equally. This is an extreme case. Concerned husband and wife, legal title in H’s sole name

Question 162

Barnes v Phillips.

Answer 162

Cost of bringing up children relevant.

Question 163

Drake v Whipp.

Answer 163

Significant contributions to the property will be relevant. Not only payment for improvement but also any manual labour provided. The parties had bought a barn for conversion and the CA took into account: not only contributions to the **purchase** of the barn and the **costs** of its conversion, but also contributions of **labour** to its conversion, contributions to **general household expenditure** and who took care of the **housekeeping**. This is a CA case. Judge at first instance decided case on resulting case, CA decided it based on a constructive case.

Question 164

Cox v Jones

Answer 164

There had been no direct contributions to the purchase price. The court looked at what the claimant had foregone (put barrister’s practice on hold) and what she had contributed non-financially (managed work on the house renovation project). Comments in stack v Dowden make it clear that these considerations are relevant.

Question 165

Lord Diplock, Gissing v Gissing

Answer 165

made it clear that what the courts are looking for is what the parties normally contribute and if for example, a female partner gave up work for a period to look after children, this will basically be ignored, she will be assumed to have contributed the same amount as when she was in work. The courts have even indicated that they will simply assume in some cases that contribution in expenditure is equal:

Question 166

Oxley v Hiscock CA

Answer 166

Ms Oxley contributed 22% to the cost of acquiring the family home, and this is the share of ownership she would have acquired under a resulting trust. But the CA held on a constructive trust, she was entitled to 40% even though there never had been a discussion as to what the share she would have.

Question 167

Jones v Kernott

Answer 167

couple separated, he moved out. SC took the view that the interests of the parties crystallised at the moment of separation because from the moment they separated. Mr Kernott no longer contributed to the house costs. Therefore, the view was that any increase in value of property after separation, should belong to Jones. Therefore his share was half the value of the property, at the time of separation. ## Footnote *Slightly different approach in Barnes v phillips*

Question 168

Barnes v Phillips

Answer 168

couple, initially equitable joint tenancy, but then they separated. This time, the court started with equal shares but then altered these shares, taking into account financial considerations from the moment of the change of intention. They then decided what would be fair shares. Factors taken into account: the parties had re- mortgaged their property. Mr Barnes had received 25% of the value of the property pursuant to that re-mortgage, this was taken into account. Secondly, the respective contribution of parties to mortgage repayments and contributions to the costs of raising their children. Therefore, although the courts started with 50/50 shares, they believed that Phillips should receive 85% of the beneficial property.

Question 169

**Baroness hale in Stack v Dowden suggested** thought what type of context was important?

Answer 169

A couple who are marred are more likely to intend to share everything than an unmarried couple. She also suggested that those who put the property in their joint names are more likely to share everything than look at precise contributions.

Question 170

Springette v Defoe

Answer 170

**A mathematical ca;culation based on direct contribution may occassionally be relevant.** Mature couple who both contributed substantially to the purchase of the property*.* Both parties came to the purchase already owning substantial assets, no evidence of common intention to share assets equally. They both had equally ownership in mind, but never spoken about and telepathy is not enough. The case was explained as "a part pooling of resources by a middle aged couple already established in life whose house-purchasing arrangements were clearly regarded by the court as having the same formality as if they had been the subject of a joint venture or commercial partnership”. CA decision, rare resulting trust cases in the case of a family home. Its facts are important. The assumption was that they went into the purchase, having significant assets both intending to keep the significant assets, they were not intending to make a gift to the other.

Question 171

Difference between domestic and commercial context

Answer 171

* In a dometic context, the presumption is that if a couple purchases a home in joint names, the courts assume they intend to share ownership. * In a commercial context, it is asusmed that neither intended to make a gift, and both intend to get out what they put in and that the doctrine of surivivorship does not operate.

Question 172

In a commercial context, is the presumption of a resulting trust?

Answer 172

Traditional position where commercial property is purchased in joint names: equitable tenancy in common with shares determined by means of a resulting trust.Where the purchase is in one name only any contributor could establish an interest relying on a resulting trust. Generally partners will not intend the doctrine of survivorship will not operate. The presumption of advancement might apply, such as business operation by father and child. Might start with presumption of advancement but can rebut this. In most cases in the past, concerning purchase of commercial property, the resulting trust has been the primary means of obtaining ownership. There can also be a common intention constructive trust too.

Question 173

In a commercial context, can there be a common intention constructive trust?

Answer 173

Generally, in a commercial setting, there is an express agreement between the parties – an express bargain common intention constructive trust. We are looking at some clear agreement between the parties to share beneficial ownership. This will depend on the context:

Question 174

Montalto v Popat

Answer 174

Generally, in a commercial setting, there is an express agreement between the parties – an express bargain common intention constructive trust. We are looking at some clear agreement between the parties to share beneficial ownership. This will depend on the context: **Facts:** joint legal title case involving a couple; references to “our business” considered more significant that references to “our house”. This was a commercial purchase by a couple, references to “our business” was seen as showing an express intention of showing ownership, if parties brought a house and referred to “our house”, this is not sufficient for ownership, but “our business” was shown to be sufficient to show an intention to share ownership.

Question 175

*Laskar v Laskar*, Lord Walker in *Stack v Dowden*.

Answer 175

Some authority that that the presumption of an equitable joint tenancy where property is bought in joint names does not apply to a commercial purchase, however close the relationship between the parties: ## Footnote Lord Walker in Stack v Dowden = Presumption of equitable joint tenancy does not apply in commercial transactions, you apply the constructive trust. Alternative ground in Laskar v Laskar was that even if presumption applied, it would be easy to rebut. Clear dividing line between domestic and commercial purchases where the purchasers were in the join name, commercial: start with applying a resulting trust. Domestic: presumption of equitable joint tenancy.

Question 176

Marr v Collie [2017]

Answer 176

(Appeal from the Bahamas concerning the purchase of investment property by a couple in their joint names) purchase by a couple for investment, relationship broke down, question as to the beneficial ownership. Judge at first instance, relied upon Laskar v Laskar and said there was no presumption of an equitable joint tenancy, instead there was a presumption of a resulting trust which had not been rebutted on the facts. The CA took same basic approach but held that the presumption for a resulting trust had been rebutted on the facts. The decision of the PC: was that the judge had inadequately considered the actual intentions of the parties. Therefore, the case was remitted to the judge for further considerations. But the problem with the case was the reasoning. Before Marr v Collie: the courts always started with one of two presumptions: the starting point was either: 1. Presumption of equitable joint tenancy (domestic cases) 2. Presumption of a resulting trust (commercial cases). Therefore, the first question of the court was: is this domestic or commercial, this determines which presumption applies and then the question has been: has the presumption been rebutted on the facts? Marr v Collie took a completely different approach, the PC analyses Stack v Dowden, Jones v Kernott and Laskar v Laskar and concluded that the principle in Stack v Dowden can apply to investment property. However, this is the first point of lack of clarity, when they referred to principle in Stack v Dowden, this is not a presumption of an equitable joint tenancy. Instead the court said: what is important in the intention of the parties. That intention could be for an equitable joint tenancy and putting the property into joint names is some evidence of an intention for an equitable joint tenancy.

Question 177

What is Marr v Collie saying?

Answer 177

What they seem to be saying is: putting into joint names, with other evidence, when commercial property may have the effect of there being an equitable joint tenancy, because it may show an intention to that effect, so this means that there is automatically a common intention constructive trust. If the PC is simply saying that there can be an equitable joint tenancy of investment property, if this is the intention of the parties, that does not say anything new. Where there are concerns over the judgment of the PC, is that the PC has to say about the approach the courts should take. Para 54 of the judgment seems to suggest that the courts will not start with a presumption and then see if it is rebutted. Instead, the courts will look to see if there are evidence of the parties intentions, to give rise to a common intention constructive trust. Only if there is no evidence of intention will they fall back on a presumption. Referring to this “reverse approach” at the start of this lecture, this is a different approach. What is unclear is if there is no evidence of intention, which presumption will be used as a fall back presumption in a commercial case? Looking at end of para 54, it says a resulting trust solution MAY provide the answer. But this is unhelpful because unclear if fall back on equitable joint tenancy, do we need to categorise the case, is it a resulting trust? _Couples?_ The caseinvolved a couple but is it limited to purchases by a couple? There is no indication in the judgment that it is. But on the other hand, it is unlikely that a non couple would intend an equitable joint tenancy. Strictly, PC is not binding. But the member of the board are the case as those that decided Stack v Dowden and Jones v kernott so we cannot ignore it. It might encourage litigation because if we do not start with a presumption (this will be ownership unless otherwise), is it about showing evidence, it will be worth talking a risk and going to court

Question 178

What is the rationale of a resulting trust?

Answer 178

1. Presumed intention of the parties 2. intention of the transferor 3. lack of intention to make a gift 4. retention of ownership 5. Unjust enrichment 6. Automatic resulting trusts

Question 179

What is the traditional approach in relation to trusts in the commercial situation?

Answer 179

Traditional approach: make use of a resulting trust, but a constructive trust can arise if the intention of the parties are so, and there can even be an equitable joint tenancy if that is the intention of the parties.

Question 180

What happens to quantification of shares in the commercial situation where there is a resulting trust?

Answer 180

Shares will be proportionate to contributions to the purchase price

Question 181

What happens to quantification of shares in the commercial situation where there is an equitable joint tenancy?

Answer 181

The shares will be "equal"

Question 182

What happens in the commerical situation to the quantification of shares where: There is a commen intention constructive trust, but there is no equitable joint tenancy?

Answer 182

Normally, there will be an express agreement (as to the shares each party will acquire), which will be enforced (Paris v Williams). If there is not an express agreement (which will be rare - but might occur particuarly if a couple was making a commercial acquisition). In theory, there is no reason why a court will not imply or infer an agreement as to shares. Arguably, there would need to be strong evidence, maybe stronger than in a family context. It is likely, that relevant factors to imply an agreement will be: 1. Financial contributions 2. Significant contributions by way of labour.

Question 183

How might the two-stage approach in Jones v Kernott be applied in the commercial situation?

Answer 183

In the family context, in quantifying shares, in absence of express agreement the 2 stage approach will be used, (1) implying intention of parties and if this is not possible (2) giving a fair result. You could say that fairness, is vague for a commercial situation, but the courts do have to reach a conclusion as to shares and if there is no evidence of intention, fairness is all that is left. It is arguable that in a commercial context, fairness requires the courts to determine the shares, looking solely at the contributions of the parties.

Question 184

Laskar v Lasker view about an agreement in a commercial situation.

Answer 184

Note the view in *Laskar v Laskar* that in the absence of an agreement otherwise, the shares will be calculated as under a resulting trust. Where there is a commercial acquisition, shares will be calculated as under a resulting trust. This might be restrictive because it only takes into account direct contributions to the purchase price. Arguably, contributions to work on the property, improvements, whether contribution is financial or by way of labour, should be taken into account. But we do not have the background about do they have children, did they keep finances separate, like we do in the family home.

Question 185

Difference between express, resulting and constructive trusts

Answer 185

Constructive trusts are imposed by the court as a consequence of the conduct of the party who becomes a trustee. Automatic resulting trusts are used to explain gaps in beneficial ownership. Presumed resulting trust are not imposed as a responce to the conduct of the trustee, but to give effect to the implied or inferred intentions of the owner. Express trusts arise to give effect to the actual intention of the owner.

Question 186

Lord Browne- Wilkinson in *Westdeutsche Landesbank v Islington*

Answer 186

" A resulting trust is not imposed by law against the intentions of the trustee (As is a constructive trust), but gives effect to his presumed intention".

Question 187

Jones v Kernott SC

Answer 187

In relation to the family home, the SC indicated that where a cohabiting couple acquires a family home in **joint names,** the starting point for evaluating beneficial ownership is that the property should be treated as owneed jointly, in absence of other evidence, rather than in proportion to the parties' fianncial contribution.

Question 188

Does the Jones v Kernott principle apply in situations other than the family home?

Answer 188

In **Marr v Collie -** decision of the PC, suggestes it does!.

Question 189

Marr v Collie

Answer 189

**Facts:** close personal relationship, which broke down. They disputed assets including the home where they lived together and some investment assets to which they had made unequal financial contributions. The PC said it was simplictic to assume that the principle (that a conveyance into joint names indicated legal and beneficial joint tenancy unless the contrary is proved) applied only in the domestic consumer context. **This case strongly suggests that the purchase in joint names should be treated as part of the evidence of intention to enjoy the beneficial interest jointly.**

Question 190

s199 of the Equality Act 2010

Answer 190

This would abolish the presumption of advancement with prospective effect. The presumption of advancement might be abolished not because it is outmoded, but it might be in because of the European Convention on Human Rights. But it is not yet in force.

Question 191

When does the presumption of advancement apply?

Answer 191

1. Father and child 2. Husband and wife

Question 192

When does the presumption of advancement not apply?

Answer 192

1. Mother and child 1. If a mother transfers property voluntarily to her child, the counter-presumption of a resulting trust will apply. 2. Wife and husband

Question 193

Are there other situations where a presumption of advancmenet is active?

Answer 193

It does not apply between same sex marriages (no case). Not cohabiting partienes, man or mistress, no presumption between siblings etc.

Question 194

Pettitt v Pettitt

Answer 194

The HL acknowledged that the presumption of advancement between husband and wife had reduced in significance. Lord Reid suggested that the only reasonable basis for the presumptin had been the economic dependence of wives, and that given the changes in social circumstances "the strength of the presumption must have diminished".

Question 195

What is the difference between a presumed resulting trust and an automatic resulting trust?

Answer 195

Presumed automatic trusts help to interpret ambiguous transactions. Automatic resulting trusts explain who owns property where there appears to be a gap in the beneficial ownership

Question 196

When is a constructive trust imposed?

Answer 196

Lord Browne - Wilkinson identified a constructive trust as a trust "which the law imposed on [the trustee] by reason of his unconscionable behaviour"

Question 197

What is the difference between an institutional constructive trust and a remedial constructive trust?

Answer 197

**Institutional CT =** a trust which is brought into being on the occurence of specified events, without the need for the intervention of the court The courts do not impose a trust, rather, it recognises that the beneficiary enjoys a pre-existing proprietary interest in the trust property. The court has no discretion to decide whether or not not the property is subject to a trust.

Question 198

What is Pallant v Morgan equity?

Answer 198

**Court intervene to enforce informal agreements.**

Question 199

Stack v Dowden

Answer 199

A couple lived together for many years and had children. Ms Dowden had purchased the family house, using savings and a mortgage. Ms Dowden paid all the mortgage repayments and Mr Stack helped with the improvements. Title to the house was in joint names. The parties kept their fiannces completely seperate during the relationship. On the breakdown, Mr Stack sought an order for sale and equal division. CA and HL decided that Mrs Dowden would get 65% and Stack the rest. Baroness Hale concluded that Ms Dowden had successfully rebutted the strong presumption of joint beneficial ownership created by the fact that title of the family home was in joint names. The couple kept their affairs "rigidly separate" and Ms Dowden had contributed more than Mr Stack.

Question 201

Abbott v Abbott

Answer 201

Lady Hale was at pains to point out that Lord Bridge's analysis in Rosset was outdated and ought not be followed strictly.

Question 202

Re Diplock

Answer 202

Facts: the mortgage loan taken out in joint names of the parties, but the parties agreed that the man alone would pay the repayments and this agreement was effective, the loan was regarded as his contribution to the purchase price. When presumption of resulting trust, doesn’t matter who actually pays the loan, but tis is who is obligated to pay it. But under a CT, the courts will take into account actual repayments of borrowed money. If someone not under obligation to pay, if they pay full or part of loan, this might be enough to show the common intention. A lump sum is sufficient, if party pays 10% off this would be sufficient for implied **bargain constructive trust. Regular and substantive repayments would be enough** (Diplock). But an odd instalment is probably not sufficient.