Trusts of the Family Home

Question 1

Types of Trusts ?

Answer 1

• Express -> parties must have express intention in writing.
  -> Paul v Constance [1977]
  -> s.53(1) LPA 1925
• Resulting -> whoever paid for the land
• Constructive

Question 2

Gissing v Gissing [1971]

Answer 2

• L Diplock:
  -> Beneficial interest must be based on a trust.
  -> To work out the beneficial owner, you need to work out the trust

Question 3

conclusiveness of Express Trusts?

Answer 3

• Goodman v Gallant [1986] -> if express trust supported by evidence, then it is conclusive and there is no need to consider a constructive trust.
• Stack v Dowden [2007] -> loosely upset Goodman, ‘unless varied by subsequent agreement’ (not explained).
• Pankhania v Chandegra [2012] -> clarifies law, confirms that rules established in Goodman are the ones that should be followed.

Question 4

Purchase Money Resulting Trust ?
what is it?

Answer 4

• ‘Old sidekick to the express trust’ (Benjamin Douglas)
• Beneficial interest goes to person(s) who paid for the property as tenants in common in proportion to their contribution.
• Subject to the counter-presumption of advancement.

Question 5

Purchase money resulting trust
cases

Answer 5

• Pettit v Pettit [1970]
  -> L Upjohn: resulting trusts not automatic but there is a presumption of intention. In absence of provable intention, equity steps in. Easily rebutted by ‘circumstances of evidence’.

Criticisms:
-> Pettit v Pettit [1970] -> L Upjohn: conscious choice not to apply presumption (though not overruling it); L Diplock: attack on implied/presumed intention - should be disregarded because rooted in archaic social circumstances.
-> Gissing v Gissing [1971] -> L Reid: resulting trust, when viewed alongside modern budgeting, is arbitrary.
-> Jones v Kernott [2012] -> L Walker & L Hale: common intention may change over time.

Question 6

Constructive trusts?
cases

Answer 6

• Paragon Finance plc v DB Thackeray & Co. [1999]
  -> Millet LJ: CT arises whenever equity thinks it should arise.
• Beatty v Guggenheim Exploration Co. (1919)
  -> Cardozo J: crux of CTs is the notion of good conscience. Unconscionability a necessity.

Question 7

Historical foundations of Common Intention Constructive Trusts

Answer 7

• Gissing v Gissing [1971]
  -> Requirements for CICT: 1. Objective common intention; 2. Detriment.
  -> Judges will look for evidence to infer ‘actual intention objectively manifested’, therefore inbuilt flexibility.
• Hussey v Palmer [1972]
  -> L Denning -> slightly different: no need to prove something is unconscionable, but rather just that it is unfair.
• Eves v Eves [1975]
  -> CICT = ‘latest progeny’ of equity (L Denning).
• Muschinski v Dodds (1985) (Australian case)
  -> ‘Proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ and ‘the formless void of individual moral opinion’’ (Deane J).
  -> Denning said to look at common intention -> not a matter of willy-nilly decision-making.

Question 8

CICT from Express Agreements ?

Answer 8

Lloyds Bank pls v Rosset [1991]
- 2 types of CICT: 1. Express agreements (based in common intention) supported by detrimental reliance; 2. Implied, where the court must look at the conduct of the parties, from which both common intention and detriment arise.
- Technically not overruled by Stack v Dowden (Privy Council) but essentially superseded.

Question 9

CICT from Inferred Intention ?
cases

Answer 9

• Stack v Dowden [2007]
  Test: 1. Presumptions that equity follows the law and beneficial ownership is the same as legal ownership;
  2. Is there evidence of common intention to displace the presumptions?;
  3. Quantify by looking at the common intention or possibly what is fair.
  L Neuberger dissented -> dislike of the CICT but ultimately same outcome reached.
• Law Commission, Sharing Homes, A Discussion Paper, para 4.27: prefer the ‘holistic approach [where] undertaking a gurney of the whole course of dealing between the parties and taking account of all conduct which throws light on the question of what shares were intended’.

E.g. applied Stack v Dowden

• Laskar v Laskar [2008] -> illustrated the similarity between CICT and resulting trusts.
• Fowler v Barron [2008] -> unusual circumstances = presumption rebutted.
• Jones v Kernott [2012] -> reference to Oxley v Hiscock [2005]: where parties did not intend joint tenancy at onset or changed their original intention but it isn’t possible to ascertain by evidence or inference what their actual intentions were, ‘the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property’.

Question 10

Boundary between CICT and Resulting Trusts?

Answer 10

• Stack v Dowden [2007] -> can still use resulting trust when there is a commercial transaction.
  -> L Walker: ‘may still have a useful function in cases where two people have lived and worked together in what has amounted to both an emotional and a commercial partnership.’
• Laskar v Laskar [2008] -> CICT can apply beyond intimate and cohabiting couples, extended to people living in domestic home.
• Jones v Kernott [2012] -> resulting trusts are not to be used in familial contexts.
• Marr v Collie [2017] -> uses somewhat circular logic (need context to establish intentions and vice versa) but essentially saying to look at what a reasonable person in the position of the parties would do. When in doubt use a CICT

Question 11

Interference or Imputation?

CICT

Answer 11

Stack v Dowden [2007]
i.e - inferred intention: was really there and is objectively found; imputed intuition: wasn’t there but was objectively found. You can infer but cannot impute.

• Jones v Kernott [2012] -> can only impute when quantifying, what can’t infer.
  -> Theoretical distinction to show robustness of the process rather than actually changing anything.

Question 12

Detriment?

CICT

Answer 12

• Grant v Edwards [1986]
  -> ‘[W]here there has been no written declaration or agreement […] the plaintiff […] must establish a common intention […] acted upon by her, that she should have a beneficial interest in the property. […] equity will not allow the defendant to deny that interest and will construct a trust to give effect to it’.
• Hudson v Hathaway [2023]
  -> Still need detrimental reliance -> most likely that some conduct was foregone.
  -> Detriment - paid for mortgage expenses and did not pursue claims against his assets or child support claims.

Question 13

Sole name cases

CICT

Answer 13

• 1st thing other party must do is acquire a share in the property, 2nd quantify it.
• Strict reading of precedent = use Lloyds Bank v Rosset [1991], because leading authority for sole name cases BUT in Jones v Kernott [2012] L Walker and L Hale cited Abbott v Abbott [2007] and tried to say joint and sole name cases ruled by same regimes but from different starting points.
• Hudson v Hathaway [2023] -> supports idea that Lloyds Bank is overruled. CA enduring use of same principles from Abbott v Abbott.

Question 14

Joint names cases

CICT

Answer 14

• Acquisition question already answered by presumption of joint tenancy.
• Issue of quantification -> extent of the share.
• Later cases didn’t lay down massively express rules but principles.

Question 15

Step by Step order for establishing trust?

Answer 15

1. Is there express intention?
   (Yes) 2. Is there signed writing
   (Yes) 3. Express trust (Goodman v Gallant)
   (No) 3. Is there detrimental reliance?
   (Yes) 4. Expres agreement constructive trust (Lloyd’s Bank v Rosset)
   (No) 4. go to step 4. evidence of intention to displace
   No 2. is it commercial or domestic?
   (Commerical) 3. Resulting trust (Laskar v Laskar)
   (Domestic) 3. Presumption that equity follows the law (Stack v Dowden)
2. Is there evidence of intention to displace the presumption?
   Yes 5. CICT (stack v Dowden, Jones v Kernott)
   No 5. beneficial ownership same as legal title