EXAM NOTES - Implied Trusts of the Home

Question 1

general structure to ITH answers

Answer 1

1. property in joint names or one party’s name
2. Express declaration of shares?
   FOR EACH DATE THAT SOMETHING IMPORTANT HAPPENS:
   3.Presumed resulting trust?
3. Lloyds v Russet – ICICT?
4. Lloyd’s v Russet – ECICT?
5. Size of share – Stack v Dowden

Question 2

Preliminaries?

Answer 2

• if married: Matrimonial Causes Act 1973
• if express declaration of trust: Pettitt v Pettitt usually binding but must comply with s53(1)(b) LPA 1925 as declaration of trust in land - signed writing
• if no express declaration, maybe an ITH requiring no formalities s53(2)
• equity follows the law Jones v Kernott

Question 3

what’s the general rule if the property is in joint names?

Answer 3

• both have beneficial interest
• presume 50-50 split Jones v Kernott, Stack v Dowden because equity follows the law
• very difficult to rebut Fowler v Barron

Question 4

how can the general rule about joint names be rebutted

Answer 4

1) different shares intended at outset
2) intentions change later
o Consider all factors – Adekunle v Ritchie (purpose was buying a home for the mother so no intention for son to have an equal share)
o If it is clear they either initially or subsequently intended different shares but unclear what, courts decide a fair share Oxley v Hiscock

Question 5

how can the court decide different shares were intended at the outset in a joint-name property?

Answer 5

eg finances are rigidly separate Stack v Dowden

but unequal payments insufficient to be an indication Folwer v Barron

Question 6

what if the property is in one person’s name?

Answer 6

Jones v Kernott

1. Can C establish an interest in the property?
2. What is the size of that interest?

Question 7

what is the general rule about presumed resulting trusts?

Answer 7

Stack v Dowden (obiter) and Abbott v Abbott - PRTs are generally inappropriate for family homes
Laskar v Laskar more appropriate for business ventures and investments, but could be applied if there is a commercial element to the family home

Question 8

what is required to find a PRT?

Answer 8

• C makes a contribution to the cost at the outset eg Bull v Bull; mother helped son buy a house

Question 9

how do later contributions relate to PRTs

Answer 9

• Cowcher v Cowcher later contributions are usually disregarded
• if later contributions are anticapated they may or may not suffice
• – Tinsley v Milligan they suffice
• – Samad v Thompson don’t suffice

Question 10

what is the general rule about joint gifts?

Answer 10

• Midland Bank v Cooke presumption they are shared equally

Question 11

what is the rule about anticipated future payments and resulting trusts?

Answer 11

• A payment that is anticipated the outset may give rise to an interest under a resulting trust – Tinsley v Milligan.

Question 12

what are the different kinds of constructive trusts?

Answer 12

Lloyds v Rosset

• inferred common intention constructive trust
• express common intention constructive trust

Question 13

what is required for an ICICT

Answer 13

Lloyds v Rosset

• inferred common intention constructive trust
• direct financial contribution by C
• Morris v Morris inferring ICICT solely on basis of conduct will only happen in ‘exceptional circumstances’

Question 14

What is likely to constitute a direct financial contribution for ICICTs?

Answer 14

• Lloyds v Rosset - payments for deposit or mortgage, including mortgage payments after purchase
• Stack v Dowden - renovation work that adds significant value to the property
• Burns v Burns - paying bills but ONLY if so significant that it enables the partner to pay the mortgage

Question 15

is the test for financial contributions becoming more flexible in ICICTs?

Answer 15

• Lloyds v Rosset very rigid
• Stack v Dowden - said Lloyds v Rosset was too rigid
• Abbott v Abbott whole course of conduct should be considered
• but James v Thomas - hard, heavy work for a long time did not constitute ‘exceptional’ circumstances and satisfy the requirements for a financial contribution

Question 16

What does not constitute a financial contribution for ICICTs?

Answer 16

• Burns v Burns giving up work/study to look after children
• Burns v Burns paying normal bills
• Gissing v Gissing household expenses
• James v Thomas working in the family business
• Lloyd v Rosset children’s expenses

Question 17

what is the rule about DIY/renovation work for finding a financial contribution in ICICTs?

Answer 17

• Pettitt v Pettitt DIY won’t count
• Thomas v Fuller-Brown substantial renovation unlikely to count
• Stack v Dowden - renovation work only counts if it adds significant value

Question 18

what is required for an ECICT?

Answer 18

Lloyds v Rosset

• agreement towards ownership
• detrimental reliance

Question 19

what constitutes agreement for the purposes of an ECICT?

Answer 19

• agreement towards ownership eg everything is 50/50 Clough v Killey
• or everything ‘half yours’ Hammond v Mitchell

Question 20

when must agreement towards ownership exist for ECICTs?

Answer 20

• Lloyds v Rosset intention must be at time of acquisition or exceptionally at a later date
• but Clough v Killley and Hammond v Mitchell – allowed later

Question 21

what does not constitute agreement towards ownership for ECICTs

Answer 21

• agreement about shared accomodation or promises as to comfort or quality of life James v Thomas
• promise that people will be ‘looked after’ Thompson v Humphrey - not about the property
• promise to ‘share the family home’ not specific enough - no reference to their relative shares Lloyds v Rosset

Question 22

how does excuse relate to ECICTs?

Answer 22

• amounts to acknowledgement that the other party has a beneficial interest
• Eves v Eves - child too young to go on the deeds
• Grant v Edwards - it will prejudice your divorce
• consider from the point of view of a reasonable bystander

Question 23

how does the concept of detrimental reliance work for ECICts

Answer 23

• conduct must be such that it is otherwise inexplicable without that party expecting to get a share of the house

Question 24

what does not count as detrimental reliance?

Answer 24

• giving up work to look after the kids – not detrimental reliance Thomson v Humphrey
• Supervising workmen – not detrimental reliance Lloyds v Rosset
• Paying bills/mortgage – could be detrimental reliance if it enables the other party to pay the mortgage Grant v Edwards
• Renovating the property – Eves v Eves only if of a serious nature

Question 25

does working for the partner’s business count as detrimental reliance

Answer 25

• can do Hammond v Mitchell even if the C is receiving payment, so long as this is less than the market rate
• but this may be attributed to wanting a better quality of life rather than due to an expectation of acquiring a property interest James v Thomas

Question 26

how is the size of each party’s shares calculated

Answer 26

Stack v Dowden – take a holistic approach/the whole course of conduct between the parties
o Applies to ICICT claims Abbott v Abbott and to ECICT claims Holman v Howes
- consider a range of factors
- Webster v Webster non-legal owner unlikely to get as much as 50%

Question 27

what factors should be considered for deciding size of share

Answer 27

Stack v Dowden - FONDFP

• Financial contributions – if joint mortgage in joint names, likely to be 50-50 split unless demonstrable initial or subsequent joint intention differently
• who pays Outgoings? E.g. insurance/repair costs
• Nature of their relationship; equivalent to being man and wife? Children together?
• Discussions between the parties
• Finances – pooled or separate? Pooled = more likely to be even shares in the house
• Personalities – very vague; usually a way for the court to punish husbands who run away from wives