Trusts of the Family Home (Common Intention Constructive Trusts) and Proprietary Estoppel Flashcards
what is the presumption with regards to equitable ownership of land?
it is presumed that beneficial ownership of land mirrors legal ownership
(in the absence of evidence to the contrary)
in what 2 cases would disputes as to how beneficial ownership of land arise between cohabitees?
(thus claiming a common intention constructive trust)
(1) legal title is registered under the name of both properties - so there is a presumption that they own it as equitable joint tenants - but this does not reflect how equitable ownership should be held
(2) legal title is registered in the name of only one party - so he is the sole equitable owner - but another party claims beneficial interest
how can this issue as to claiming equitable ownership of land where it is presumed to reflect legal ownership be resolved?
by creating an express trust of the land - evidenced by signed writing
completing the TR1 form allows this as there is a box to fill out if the owner wishes to create a trust
but a TR1 is not required - so the issues here arise
what is a common intention constructive trust?
what are the steps the court considers when a party claims that a CICT exists? (2)
CICT = a mechanism to determine beneficial ownership of cohabitees when no express trust exists
steps to such claims:
(1) establishing / disproving an equitable interest
(2) quantifying the equitable interest
what is the presumption where legal title is held by 2 parties?
equitable title will be held as joint tenants (to reflect legal title being held as joint tenants)
this is regardless of the initial contributions to the purchase price
how can the presumption that equitable title is held as joint tenants be rebutted?
parties must have objectively had a common intention to hold the property other than as joint tenants
(heavy burden, requires unusual facts)
how is a common intention to hold property other than as joint tenants established? what are examples of considerations?
common intention is deduced objectively from the whole course of conduct of the parties
the court seeks to establish the actual intention of parties first (whether express or implied)
examples of evidence:
- actual intention of parties like advice or discussions they had
- unequal contributions to purchase price / mortgage /deposit = this is not enough alone to show common intention BUT is important if there is no actual intention
- purpose the parties acquired the house (e.g., x bought home but only included y as legal owner to get good mortgage and intended home to pass by her will)
- nature of relationship between parties and whether they have children
- how the parties arranged other finances and divided them (e.g., couple keeping finances rigidly separate throughout the relationship indicated they did not intendd to hold home as JT)
at what point does the common intention to hold equitable title as other than JT have to be had?
either:
- at the time of acquisition
or
- can be formed at a later date =
e.g., couple jointly paid for a house funded by a mortgage in both their names but separated and one party finished mortgage payments, lived there for 14 years, and was solely responsible for expenses and the children which allowed the other party to buy another home => intention when acquiring was to hold as JT but common intention later changed rebutting the presumption when they were separated
what is the presumption when legal title is held by one person?
the legal owner is also the sole equitable owner
how can someone establish a common intention constructive trust to show they have equitable interest where another party is the sole legal owner? (2 requirements)
non-legal owner must establish:
(1) the parties had a common intention for the non-legal owner to acquire beneficial interest
AND
(2) they relied on this to their detriment
what are the 2 ways to show that parties had common intention that a non-legal owner would have equitable ownership?
what are some examples of each?
(1) express common intention =
statements or discussions on shared OWNERSHIP not only on shared occupation =
- ‘half yours’ ‘we share 50:50’ indicate common intention
- ‘this is a family home’ or ‘this benefits both of us’ or ‘you will be looked after’ are insufficient
legal owner provided an excuse as to why their partner is not registered legal owner = e.g., ‘you are too young’ showed evidence that he intended to otherwise register the non-legal owner
(2) if there is no express common intention, the court can infer it by looking at the whole course of conduct =
- courts tend to look at who made the most financial contributions (even if the non-legal owner made sacrifices)
- indirect financial contributions - e.g., paying family expenses so that the legal owner can pay mortgage OR making substantial contributions in labour and money to the property which increased its value
what are / are not examples of detrimental reliance to show a CICT of a solely owned house?
detrimental reliance includes conduct which the non-legal owner could not reasonably have been expected to embark on unless they had an interest in the house
examples = heavy DIY improvements, renovations to the house, substantial payments of expenses and mortgage
not examples = decorating and buying furnishings, giving up work to look after children, being the ‘traditional housewife’
if presumptions on equitable title are rebutted, how does the court quantify a claimant’s beneficial interest?
(1) If there is evidence of actual express common intention as to the shares (agreement/ discussions), this must be conclusive
2) if not = the court must strive to infer the common intention via holistically looking at whole course of conduct (financial factors usually carry greatest weight - e.g., who contributed to mortgage / expenses)
3) As a last resort, the court can impute an intention for ‘fair shares’ in light of the ‘whole course of dealing’- if no actual intention (agreement/ discussions), then financial factors carry greatest weight)
what is proprietary estoppel?
equitable doctrine which enables a person to informally acquire rights in a property to prevent unconscionable conduct
it is a cause of action - it can be claimed
but the court has discretion to award it and to select the remedy
what are the 4 elements of proprietary estoppel?
(1) D made an assurance to C relating to property
- must be property related = not e.g., that C will be financially secure
- does not have to be express but must be clear
- court ascertains how D’s words would have been reasonably understood by C in the context
(2) C relied on the assurance = ‘but for’ causation between assurance and action
(3) detriment to C resulting from reliance
(4) it would be unconscionable for D to resile from the assurance = D’s behaviour shocks the conscience of the court
