W4 - Family Property Flashcards
In what ways can a resulting trust arise?
Westdeutsche Landesbank
1) Voluntary transfer of property without evidence of intention
2) Voluntary transfer of purchase money
Voluntary transfer of property: case?
Thavorn v Bank of Credit
Voluntary transfer of property: how?
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.
Limitations of voluntary transfer of property
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
Voluntary transfer of purchase money
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)
What else does the voluntary transfer of purchase money principle apply to?
1) Lottery syndicates (Abrahams)
2) Chattels (eg yachts - Parrott v Parkin)
What is the saying for voluntary transfer of purchase money?
“You get what you pay for.”
Stack v Dowden
Recent cases have applied constructive trusts rather than resulting trusts to determine the shares of cohabitees in a home.
Laskar v Laskar
Resulting trusts will be useful where the property is bought as an investment.
Loosemore v McDonnell
Father-in-law confirmed that he claimed no interest in the money paid towards the purchase money of home. Thus, clear evidence of gift.
Shephard v Cartwright
Evidence must be from before/at the time of the transaction, not subsequent statements/acts.
Fowkes v Pascoe
If under the solicitor’s name, it is presumably a resulting trust, not a gift (obiter)
s60(3) LPA 1925
If the trust property is realty, the presumption of a resulting trust is less likely to apply.
Presumption of advancement (gift)
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)
s199 Equity Act 2010
s199 Equity Act 2010 will abolish the presumption of advancement after the date of commencement of this act, but not before.
Sekhon v Alissa
No presumption of advancement was found between mother and daughter as this is within the scope of the presumption of advancement.
McGrath v Wallis
Presumption of advancement can be rebutted if:
There is an explanation of the property being put in the sole name.
Marshall v Crutchwell
Presumption of advancement can be rebutted if:
The transfer of a bank account was for convenience, not as a gift.
Warren v Gurney
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.
Shephard v Cartwright
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.
What happens if there is an incomplete disposal of a trust’s equitable interest?
There will be a resulting trust in favour of the settlor/testator’s estate.
When does a constructive trust occur?
When it would be unconscionable for the owner of the property to assert beneficial interests in the property (Paragon Finance).
Stack v Dowden; Jones v Kernott
Constructive trusts are more appropriate to determine equitable interests of cohabitees in a property purchased as their home.
How do you establish a common intention constructive trust?
There must be common intention and detrimental reliance (Lloyds Bank v Rosset)
What types of common intention to share ownership are there?
1) Express common intention
2) Inferred common intention
Grant v Edwards
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.
Currant v Collins
A specious excuse/explanation will not necessarily constitute an express common intention.
Lloyds Bank v Rosset (inferred common intention)
Contributions to the purchase price or mortgage payments may allow the court to infer a common intention.
“…doubtful whether anything less will do”
Le Foe v Le Foe
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.
Stack v Dowden (inferred common intention)
Court must look at all circumstances to work out intentions.
Lloyds Bank v Rosset (detrimental reliance)
Claimant must significantly alter position in reliance on the agreement
Substantial contribution to household expenses and raising children may be sufficient.
How do courts assess size of interest in constructive trusts? (Midland Bank v Cooke)
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.
How do courts assess size of interest in constructive trusts? (Stack v Dowden)
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.
Jones v Kernott
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.
Galarotti v Sebastianelli
Applied the approach in Jones v Kernott.
Banner Homes
Constructive trust was established by applying the Pallant v Morgan equity.
Pallant v Morgan equity
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.
Proprietary estoppel gives rise to equity if…
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.
How can assurance as to the rights of the property be given?
1) Active
2) Passive
Active assurance
Legal owner assures the claimant that they are entitled to an interest in the property. (Pascoe v Turner)
Passive assurance
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
Gillett v Holt (passive assurance)
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.
Thorner v Major
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.
Detrimental reliance
There must be a causal connection between the reliance and the assurance.
Gillett v Holt (detrimental reliance)
Financial or personal detriment
Inwards v Baker
Improving the legal owner’s land
Re Basham
If between relatives, it must go beyond what is ‘called for love and affection’
Southwell v Blackburn
Assisting (paying for mortgage) and supporting the legal owner in pursuit of a career amounted to detrimental reliance.
Greasely v Cooke
Claimant looking after the family including a mentally ill member amounted to detrimental reliance.
Joyce v Epsom
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.
