Trust of Family Home

Question 1

Forms of Ownership of family homes?

Answer 1

1. Joint ownership : legal interest and beneficial interest
2. Sole ownership: legal owner may hold property on trust for other
3. Regimes dealing with separating couples:
   - Married/civil partnership: Family court has wide redistributive powers under MCA 1973
   - Unmarried (cohabiting) - ordinary principle of trusts law

Question 2

Express trust of family home

Answer 2

Express trust must comply with s53(1)(b) of LPA 1925
(usually in case of co-proprietors)

Question 3

Resulting trust of family home

Answer 3

1. Only contributions towards the purchase price count (conveyancing fees, stamp duty or other bill does not give rise to resulting trust)
2. Only contributions made at the time of purchase count: the deposit (exchange of contract) or completion price. Mortgage payment after purchase does not result in resulting trust
3. Resulting trust only recognise monetary contributions

Question 4

Presumption of Common intention constructive trust of joint owned family home

Answer 4

For joint ownership, if there is no express trust, it is presumed that there is a common intention constructive trust and each partner’s beneficial interest in the home is equal.
A partner claiming a larger share must provide evidence of common intention and that they relied on that intention to their detriment

Question 5

How to quantify beneficial interest in case of constructive trust of joint owners?

Answer 5

Presumption: equal shares
1. In case of clear agreement of sharing which partner relied to their detriment, beneficial interest will be as agreed
2. Intention have changed over time: that change must be supported by detrimental reliance
3. Absence of clear agreement, court require evidence of intention and detrimental reliance, then survey the whole course of dealing to quantify the share.

Question 6

Factors to be taken in surveying the whole course of dealing

Answer 6

1. advice or discussion at time of purchase
2. reasons why home was transferred to joint names
3. nature of partners’ relationship
4. whether they have children or responsibility to provide a home
5. how the purchase was financed, initially and subsequently
6. how partners arrange their finance;
7. how they discharge outgoing on the home and other household expenses

Question 7

Common intention constructive trust in case of sole owner

Answer 7

No presumption of constructive trust.
Claiming party must prove:
1. common intention
2. detrimental reliance: need not consist of expenditure of money (pay mortgage or improvement to the home), but it has to be substantial (domestic contribution : giving up a job to look after children)

Question 8

How to prove common intention in Common intention constructive trust in case of sole owner?

Answer 8

1. Express common intention (typically oral) agreement or understanding
2. Inferred common intention:
   (a) direct contribution to the purchase price or
   (b) significant contribution to mortgage payment falling due after the purchase
   (serve to prove detrimental reliance as well)

Question 9

How to quantify the beneficiary shares in constructive trust in case of sole ownership?

Answer 9

1. If parties agree on the shares, their agreement will be respected.
2. Court decides having regard to the whole course of dealing

Question 10

Implied trust by Proprietary estoppel

Answer 10

Proprietary estoppel from going back on promise in the relation to property:
1. Estoppel must be established
2. Estoppel must be satisfied (remedies)

Question 11

What are 3 elements to establish a claim on Propriety estoppel?

Answer 11

1. Assurance:
2. Detriment
3. Reliance

Question 12

Forms of assurance in proprietary estoppel?

Answer 12

(a) active: legal owner tells
(b) passive: conduct by claiming party suggest they they think they have beneficial interest, legal owner knows but remain silent

Question 13

Things that amount detriment of claiming party in proprietary estoppel:

Answer 13

1. Spending money on refurbishing a home or improving property
2. working without adequate remuneration
3. giving up a job and move to a new area
4. looking after someone who is gravely ill

Detriment to claiming party must be weighed against any benefit they obtain (e.g. live rent free vs move to new area)

Question 14

The steps by court to decide on remedy in case of proprietary estoppel

Answer 14

1. Estoppel established
2. hold legal owner to their assurance
3. Burden on legal owner to prove that ensuring assurance would be out of proportion to the detriment sustained by claiming party
4. If assurance involved the transfer of property on the legal owner death, court may order to transfer while owner still alive, but generally require discount on accelerated receipt.
5. Any remedy available, asking whether remedy would do justice to the parties and whether it would cause injustice to third parties.

Question 15

Key difference between common intention constructive trust and proprietary estoppel

Answer 15

1. Common intention: if established guarantees the claiming partner a beneficial share in the home. Only used to establish present interest in property (when 2 partners share a house together) not future interest.
2. Estoppel: gives the court discretion to decide on remedy (may be more than beneficial share - such as transfer of entire freehold or much less).

Question 16

Circumstances where claiming party in proprietary estoppel may be barred from obtaining a remedy

Answer 16

1. He who comes to equity must come with clean hand: if such party conduct is inequitable or unconscionable
2. Delay defeats equity: unreasonable delay in bringing the claim