Trusts Of The Family Home

Question 1

How can you determine the beneficial ownership of a home through informal means? What do you need to show ideally?

Answer 1

s.53 LPA 1925 requires conveyances of land and interests in land to be in writing but does not affect creation or operation of resulting, implied or constructive trusts.

Question 2

Which case confirmed that trusts in the family home are not determined on resulting trust principles?

Answer 2

Jones v Kernott [2011]

Question 3

What do you need to show equitable proprietary estoppel?

Answer 3

(1) promise/assurance
(2) detrimental reliance
(3) extent of the interests

Question 4

Which case is authority for the fact that the assurance in estoppel has to relate to the ownership of the property, not just assurances that “you’ll never want for anything”?

Answer 4

Lissimore v Downing [2003]

Question 5

For an equitable proprietary estoppel claim can the detrimental reliance include things like domestic duties?

Answer 5

Yes

Question 6

In which case did an estoppel arise where an assurance was made to a lodger that he would always have a home for life? What was the detrimental reliance in this case? What does the case also demonstrate?

Answer 6

Campbell v Griffin [2001]
Caring for elderly.
Demonstrates that court has wide discretion as only awarded £35,000 sum instead of the house for life.

Question 7

In which case was an estoppel created when the ex-partner said “the house is yours and everything in it” and she spent money doing up the house?

Answer 7

Pascoe v Turner [1979]

Question 8

In which case was an estoppel established where a gardener did increasing duties for free for an elderly lady after her assurance that “the house will all be yours one day”? What did the court award?

Answer 8

Jennings v Rice [2002]

Estoppel was created but financial award rather than right to live in the £1m property

Question 9

Which case established then when assessing whether a common intention constructive trust exists you examine the position differently depending on whether there is sole or joint legal ownership? What are the starting positions?

Answer 9

Stack v Dowden [2007]
Sole - 100% sole beneficial ownership
Joint - 50:50 joint beneficial ownership

Question 10

In which case did Baroness Hale [para 69] suggest that a holistic approach needs to be taken when assessing whether a common intention constructive trust exists? What sort of things did she suggest the court could consider?

Answer 10

Stack v Dowden [2007]
Consider: advice or discussions about how holding ownership, reasons why the home was acquired, whether the parties had children together, how the parties arranged their finances.

Question 11

What were the brief facts and outcome of Stack v Dowden [2007]?

Answer 11

Joint legal owners of house with joint mortgage but all other finances kept separate. HL held that unequal contributions to property purchase price and throughout so held 65:35 split of proceeds.

Question 12

What were the key outcomes from Stack v Dowden [2007] judgement?

Answer 12

(1) confirmed that equity follows the law except where there are unusual circumstances
(2) onus is on the party claiming that the situation is different to prove why they should have more beneficial ownership
(3) take holistic approach to assessing
(4) case turns on its facts
(5) search for parties actual, inferred or implied intentions

Question 13

What were the facts in Jones v Kernott [2011]?

Answer 13

Joint name and purchase of mortgage but relationship breakdown and around 14 yr gap since Mr K stopped contributing to payments and brought litigation.
UKSC held that joint ownership of property until he moved out, so intentions had changed. Mr K awarded 10% share in property and Ms J 90% as unusual circumstances justified move away from 50:50 position.

Question 14

What are the important outcomes of Jones v Kernott [2011]?

Answer 14

(1) Confirmed that equity follows the law unless unusual circumstances
(2) confirmed diminished importance of resulting trusts
(3) confirmed search for intention
(4) confirmed holistic approach
(5) confirmed that each case turns on its facts

Question 15

What are the stages of assessing a common intention constructive trust?

Answer 15

(1) starting presumption (100% if sole legal owner or 50:50 if joint legal owners). Up to party claiming otherwise to show unusual circumstances exists
(2) look for common intention - but includes inferring from conduct or imputing (consider what is fair here)

Question 16

What is inferred intention according to Lord Neuberger in Stack v Downden [2007]?

Answer 16

‘objectively deduced to be the subjective actual intention of the parties, in light of their actions and statements’

Question 17

What is imputed intention according to Lord Neuberger in Stack v Dowden [2007]?

Answer 17

‘attributed to the parties, even though no such actual intention can be deduced from their actions and statements’

Question 18

What did the case of Geary v Rankine [2012] demonstrate?

Answer 18

The importance of showing unusual circumstances in order to justify a departure from the usual position at law when considering common intention constructive trusts.
Partner bought a guest house registered in sole name but Ms helped with running.

Question 19

In which case did the judge feel that the fact that the mortgage was in one party’s name because of the greater likelihood of getting a mortgage was sufficiently unusual circumstances to move away from sole beneficial ownership presumption under a common intention constructive trust and award a 10% share to the ex-partner in the home?

Answer 19

Thompson v Hurst [2012]

Question 20

In which case did the court depart from a presumption that the barn was held in sole beneficial ownership due to the partner’s financial contribution to the renovations to award a 25:75 split of proceeds?

Answer 20

Aspden v Elvy [2012]

Question 21

Which case demonstrates that there is still some judicial confusion about how to apply the common intention constructive trust tests? What happened?

Answer 21

Barnes v Phillips [2015]
CA dismissed an appeal against a previous decision where the judge imputed intention of 85% share to woman and 15% to man but without finding that parties intentions changed from 50:50 (which is the first hurdle)

Question 22

If you have joint owners what is the process for assessing whether a common intention constructive trust could exist?

Answer 22

(1) start with position of legal ownership
(2) look for unusual circumstances to justify a departure from this
(3) If yes, look for the parties’ intentions - considering the whole course of dealings
(4) determine the parties’ shares based on intention - actual, inferred or imputed

Question 23

If you have a sole legal owner what is the process for determining the existence of a common intention constructive trust?

Answer 23

(1) have to establish some interest in property

(2) demonstrate the extent of that interest

Question 24

Prior to Stack v Dowden what was the leading case on sole ownership cases concerning common intention constructive trusts and what was its position?

Answer 24

Lloyd’s Bank v Rosset [1991] - needed financial contribution to purchase price or mortgage to show an interest in the property

Question 25

Can you rely on spoken assurances and demonstrating detrimental reliance to establish a common intention constructive trust in sole ownership cases?

Answer 25

Yes

Question 26

Which case is authority for the fact that where you rely on an oral statement for a common intention constructive trust you still need to show detrimental reliance?

Answer 26

Curran v Collins [2015]

Question 27

Which case demonstrates that ordinary home improvements to the property of a sole legal owner will not be sufficient to demonstrate an interest for a common intention constructive trust?

Answer 27

Pettitt v Pettitt [1970]

Question 28

Which case held that where the work undertaken on the property in sole legal ownership could be explained in other means (in this case by virtue of the fact that the partner was an unemployed builder who did not pay rent) this will not be sufficient to establish an interest?

Answer 28

Thomas v Fuller-Brown [1988]

Question 29

Are indirect contributions likely to be sufficient for establishing an interest in a solely owned home for a common intention constructive trust? What is the authority for this?

Answer 29

Yes - Lord Hope in Stack v Dowden [2007] suggested that making improvements that add significant value to the home and a complete pooling of resources and time would be sufficient. E.g. would include paying for bills so that other can pay mortgage

Question 30

Are domestic contributions sufficient to establish an interest in a solely owned home for a common intention constructive trust? What is the authority?

Answer 30

``` Burns v Burns [1984] - housework and things referable to the relationship not sufficient, needs to relate to the property. Law Commission (2006) suggested that domestic contributions 'count for nothing' ```

Question 31

What are the problems with the current law on trusts of the family home?

Answer 31

- people believe the common law marriage myth will protect them - law is complex, uncertain, expensive and not designed for family circumstances - often results in unjust outcomes - has inadequate regard for children of co-habitants

Question 32

What were the Law Commission's (2007) proposals?

Answer 32

- introduce a statutory scheme - possibility of opting out of statutory scheme - to be eligible must be cohabitants living together in same property for any period of time before or after having a child together or living together 2-5 years for the statute to apply - entitlement would depend on qualifying contribution - one party must make a contribution that enables the other to retain an economic advantage, do not get protection just by virtue of living time - time bar for claims, only bring up to 2 years after separation

Question 33

What are the arguments against the need for reform in this area?

Answer 33

- people should have freedom to choose whether to formalise relationship and benefit from statutory protection (e.g. Marriage or civil partnership provisions) - respect for their rights to choose the above

Question 34

What are the arguments for the need for reform in this area of law?

Answer 34

Jones v Kernott [2011] - old law and outdated for a new problem (rising prevalence of cohabiting couples)

Question 35

What provisions offer protection for couples that have formalised their relationship?

Answer 35

Married couples - Matrimonial Causes Act 1973 Civil partners - Civil Partnership Act 2004 Niche provisions also available for engaged couples

Question 36

What did the court suggest cohabiting couples should do before moving in together in Carlton v Goodman?

Answer 36

Agree and record how the beneficial interest is to be held

Question 37

In the case of a cohabiting couple moving in together what could they do to formalise the arrangement to avoid litigating in this area after a break up?

Answer 37

Make a contract - s.2 LP(MP)A 1989 requires signed writing | Make a living together agreement specifying how they will hold the beneficial interest and organise payments