W4 - Family Property

Question 1

In what ways can a resulting trust arise?

Answer 1

Westdeutsche Landesbank

1) Voluntary transfer of property without evidence of intention
2) Voluntary transfer of purchase money

Question 2

Voluntary transfer of property: case?

Answer 2

Thavorn v Bank of Credit

Question 3

Voluntary transfer of property: how?

Answer 3

There is a presumption that Y holds the property on resulting trust for X if:

1) X transfers property to Y;
2) No consideration is given; and
3) There is no evidence of X’s intention when making the transfer.

Question 4

Limitations of voluntary transfer of property

Answer 4

1) Does not apply to transfer of land (s60(3) LPA)
2) Presumption only applies in the absence of evidence of X’s intentions.
3) Presumption of advancement

Question 5

Voluntary transfer of purchase money

Answer 5

There is a presumption of a resulting trust from Y to X equivalent to the percentage of contribution to purchase price if:

1) X contributes to the purchase price of property;
2) Property is put in Y’s name;
3) Payment is made at the time of the acquisition of property (Curley v Parkes)

Question 6

What else does the voluntary transfer of purchase money principle apply to?

Answer 6

1) Lottery syndicates (Abrahams)

2) Chattels (eg yachts - Parrott v Parkin)

Question 7

What is the saying for voluntary transfer of purchase money?

Answer 7

“You get what you pay for.”

Question 8

Stack v Dowden

Answer 8

Recent cases have applied constructive trusts rather than resulting trusts to determine the shares of cohabitees in a home.

Question 9

Laskar v Laskar

Answer 9

Resulting trusts will be useful where the property is bought as an investment.

Question 10

Loosemore v McDonnell

Answer 10

Father-in-law confirmed that he claimed no interest in the money paid towards the purchase money of home. Thus, clear evidence of gift.

Question 11

Shephard v Cartwright

Answer 11

Evidence must be from before/at the time of the transaction, not subsequent statements/acts.

Question 12

Fowkes v Pascoe

Answer 12

If under the solicitor’s name, it is presumably a resulting trust, not a gift (obiter)

Question 13

s60(3) LPA 1925

Answer 13

If the trust property is realty, the presumption of a resulting trust is less likely to apply.

Question 14

Presumption of advancement (gift)

Answer 14

There is a presumption of advancement instead of resulting trust if:

1) X is Y’s father (Bennet v Bennet)
2) X is Y’s loco parentis (Bennet v Bennet)
3) X is Y’s husband/fiancé (Pettitt v Pettitt)

Question 15

s199 Equity Act 2010

Answer 15

s199 Equity Act 2010 will abolish the presumption of advancement after the date of commencement of this act, but not before.

Question 16

Sekhon v Alissa

Answer 16

No presumption of advancement was found between mother and daughter as this is within the scope of the presumption of advancement.

Question 17

McGrath v Wallis

Answer 17

Presumption of advancement can be rebutted if:

There is an explanation of the property being put in the sole name.

Question 18

Marshall v Crutchwell

Answer 18

Presumption of advancement can be rebutted if:

The transfer of a bank account was for convenience, not as a gift.

Question 19

Warren v Gurney

Answer 19

Presumption of advancement can be rebutted if:

Father purchased a house in his daughter’s name but he retained title deeds and there was evidence that the father intended his son-in-law to repay the cost of the house.

Question 20

Shephard v Cartwright

Answer 20

Only acts/statements that occurred at the time of transaction are admissible as evidence to rebut the presumption of advancement.

Evidence of illegal or fraudulent motives cannot be used to rebut the presumption.

Question 21

What happens if there is an incomplete disposal of a trust’s equitable interest?

Answer 21

There will be a resulting trust in favour of the settlor/testator’s estate.

Question 22

When does a constructive trust occur?

Answer 22

When it would be unconscionable for the owner of the property to assert beneficial interests in the property (Paragon Finance).

Question 23

Stack v Dowden; Jones v Kernott

Answer 23

Constructive trusts are more appropriate to determine equitable interests of cohabitees in a property purchased as their home.

Question 24

How do you establish a common intention constructive trust?

Answer 24

There must be common intention and detrimental reliance (Lloyds Bank v Rosset)

Question 25

What types of common intention to share ownership are there?

Answer 25

1) Express common intention

2) Inferred common intention

Question 26

Grant v Edwards

Answer 26

Express common intention

Legal owner telling the claimant her name would’ve been on the legal title if it did not prejudice her divorce proceedings.

Question 27

Currant v Collins

Answer 27

A specious excuse/explanation will not necessarily constitute an express common intention.

Question 28

Lloyds Bank v Rosset (inferred common intention)

Answer 28

Contributions to the purchase price or mortgage payments may allow the court to infer a common intention.

“…doubtful whether anything less will do”

Question 29

Le Foe v Le Foe

Answer 29

HC felt able to infer common intention from an express agreement that one party will pay mortgage repayments and the other party handles other substantial household expenses.

Question 30

Stack v Dowden (inferred common intention)

Answer 30

Court must look at all circumstances to work out intentions.

Question 31

Lloyds Bank v Rosset (detrimental reliance)

Answer 31

Claimant must significantly alter position in reliance on the agreement

Substantial contribution to household expenses and raising children may be sufficient.

Question 32

How do courts assess size of interest in constructive trusts? (Midland Bank v Cooke)

Answer 32

A mathematical calculation based on proportion of purchase price is not the correct approach for constructive trusts.

Court will look at the whole course of dealing.

Question 33

How do courts assess size of interest in constructive trusts? (Stack v Dowden)

Answer 33

Size of each party’s share should be what they intended (explicitly/inferred) at the time the property was acquired.

If there is no evidence of the above, the court will decide what the parties intended to own, considering the whole course of dealing.

Question 34

Jones v Kernott

Answer 34

If the interest was unquantifiable, each party would be entitled to the share which the court considered fair having regard to the whole course of dealing.

Question 35

Galarotti v Sebastianelli

Answer 35

Applied the approach in Jones v Kernott.

Question 36

Banner Homes

Answer 36

Constructive trust was established by applying the Pallant v Morgan equity.

Question 37

Pallant v Morgan equity

Answer 37

1) Pre-acquisition arrangement/understanding that one party will take steps to acquire the property; and that the other party will obtain an interest in that property.
2) Non-acquiring party had not been informed by the acquiring party before the acquisition that he no longer intends to honour the agreement/understanding.
3) In reliance on the agreement, the non-acquiring party omitted/did something which confers an advantage on the acquiring party or a detriment on the non-acquiring party.

Question 38

Proprietary estoppel gives rise to equity if…

Answer 38

1) The legal owner behaves in such a way that the claimant believes he has, or will get, some rights in relation to the property and;
2) The claimant acted to his detriment in consequence of this belief.

Question 39

How can assurance as to the rights of the property be given?

Answer 39

1) Active

2) Passive

Question 40

Active assurance

Answer 40

Legal owner assures the claimant that they are entitled to an interest in the property. (Pascoe v Turner)

Question 41

Passive assurance

Answer 41

Legal owner stands back and lets the claimant act to their detriment in the belief that he is entitled to an interest in the property.

Gillett v Holt; Thorner v Major

Question 42

Gillett v Holt (passive assurance)

Answer 42

G worked for H from childhood for nearly 40 years. G worked for little pay. G refused offers of alternative employment because H repeatedly assured G that he would leave his entire estate to him.

Question 43

Thorner v Major

Answer 43

Similar facts to Gillett, but owner never stated that he intended the claimant to inherit the farm. The claimant was led to believe through oblique remarks that the claimant would inherit the farm on the farmer’s death.

Question 44

Detrimental reliance

Answer 44

There must be a causal connection between the reliance and the assurance.

Question 45

Gillett v Holt (detrimental reliance)

Answer 45

Financial or personal detriment

Question 46

Inwards v Baker

Answer 46

Improving the legal owner’s land

Question 47

Re Basham

Answer 47

If between relatives, it must go beyond what is ‘called for love and affection’

Question 48

Southwell v Blackburn

Answer 48

Assisting (paying for mortgage) and supporting the legal owner in pursuit of a career amounted to detrimental reliance.

Question 49

Greasely v Cooke

Answer 49

Claimant looking after the family including a mentally ill member amounted to detrimental reliance.

Question 50

Joyce v Epsom

Answer 50

Remedy for proprietary estoppel is flexible and should be the minimum to satisfy the equity.

Focus must be on what is fair and proportionate as between the parties.