constructive trusts

joint name cases

where conveyance is made into joint names, the conveyance is conclusive to the existence of a trust. when 2+ people own land, trust automatically arises

goodman v gallant

express declaration of trust is conclusive

3 key stages (for problem qs)

1. starting point of analysis

2. parties having common intention inconsistent with starting point and whether one of parties relied on this to their detriment

3. size of each parties share

stack v dowden

baroness hale - ‘the starting point where there is joint legal ownership is joint beneficial ownership’

jones v kernott

lord walker and baroness hale - ‘the presumption is that the parties intended a joint tenancy both in law and in equity’

jones v kernott reasons for assuming joint tenancy

1. buying home together shows serious joint commitment - strongly suggests they intend to own it jointly and equally

2. courts reluctant to look into finances to change ownership shares as in real life, people don’t track who paid for what formally so hard to establish

different common intention

presumption of joint tenancy in equity can be rebutted

stack v dowden

baroness hale - rebutting jt in equity is ‘not a task to be lightly embarked upon’ and ‘cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual’

how presumption can be rebutted:

1. that parties had a different common intention at time of acquisition, or

2. later formed common intention that respective shares would change

ambulatory constructive trust, stack

baroness hale - ‘the parties intentions may change over the course of time, producing… an ambulatory constructive trust’

gissing v gissing

‘relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that partys words and conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party’

stack v dowden - common intention can be…

• actual (express, although not necessarily declaration of express trust, just some discussions of how they wanted to hold property in equity)

• inferred (from parties course of conduct - broad range of factors considered)

• imputed (not at this stage, though)

jones v kernott - imputed intention

not possible at stage of whether parties have common intention inconsistent with starting point

hudson v hathaway

detrimental reliance - ‘the common intention by itself is not enough for the constructive trust to arise… it is the detrimental reliance that makes it unconscionable for the defendant landowner to resile from their otherwise unenforceable agreement’

ways of assessing common intention of parties as to size of shares

• direct evidence/inference

• if genuine intention not found, what court considers ‘fair’ with regard to whole course of dealing between parties in relation to property

(can be imputed at this stage)

oxley v hiscock

chadwick lj - ‘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’

sole name cases

conveyance to one of the parties only - a is the sole legal owner

example - 2 people living together, but house was bought in the name of only one of them, so they are sole legal owner

b can claim that:

• constructive house has arisen

• a holds on trust for a and b as beneficiaries

3 key stages (applying in pq)

• starting point

• does b have beneficial interest in property (acquisition stage)

• size of parties respective beneficial interests (quantification stage)

lloyd bank v rosset approach to proving common intention

either agreement/arrangement/understanding plus detrimental reliance on the agreement, OR

if no express agreement, inferred common intention but only from direct financial contributions (which is also evidence of detrimental reliance)

lloyds bank v rosset detrimental reliance, express agreement

• whether claimant relied on agreement to detriment

• to be assessed objectively

• leading case: grant v edwards, nourse lj - ‘conduct on which [someone] could not reasonably have been expected to embark unless [they] was to have an interest in the house’

lloyds bank v rosset detrimental reliance, no express agreement

inference on the basis of contributions to purchase price/mortgage instalments will suffice to establish detrimental reliance

criticisms

• direct contributions only - too harsh

• law should move on

• difficult to establish express discussion in a regular relationship, as people don’t usually talk about their possession

abbott v abbott

should look at whole course of dealings between parties and not just direct financial contributions - should consider other contributions, eg paying bills/supporting household

stack v dowden/jones v kernott approach to proving common intention

inferring a common intention of parties with wider factors than in rosset approach

stack, lord walker - ‘the law has moved on’ (justification)

stack/jones advantages

removes need for having to search for specific express proof for an express agreement

domestic conducts will become relevant for inferring constructive trust. means that it is more fair if there is one partner who is contributing significantly more in terms of household labour but not as much financially

quantification stage

what would be fair having regard to the whole course of dealing between the parties in relation to property

thompson v hurst and graham v york

mostly focus on financial contributions and whether parties have pooled their money

resulting trust

a pays for (wholly/in part) for purchase of property which is vested either in b alone or in joint names of a and b

presumption that a did not intend to make a gift to b and therefore money will be held on trust for a or, most commonly, by a and b in shares proportionate to their contribution

DIFFERENCE BETWEEN RESULTING AND CONSTRUCTIVE

start with resulting but apply constructive trust if there is evidence of other monetary contributions after purchase/discussions about ownership, etc

relationship/family home usually uses constructive trust

after establishing, resulting trusts are also significantly less likely to change in terms of beneficial interest, as they’re very backwards looking

problematic aspects

• recognises financial contributions only

• unclear regarding if mortgage payments should be taken into account

carlton v goodman

more flexible approach then neuberger in stack v dowden, arguing that later contributions should matter as common intentions can evolve

resulting trust in family home, stack v dowden

walker - ‘case about beneficial ownership of a matrimonial or quasi-matrimonial home… the resulting trust should not in my opinion operate as a legal presumption’

hale - ‘doctrine of resulting trust has conceded much of its field of application to the constructive trust’

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 commercial partnership

laskar v laskar

mother and daughter purchase property as investment = resulting trust

use of a resulting trust vs constructive depends on the intention of parties when buying property, not just the familial relationship

marr v collie

in cases where it is a family home context and ‘they have not formed any intention as to beneficial ownership but had, for instance, accepted advice that the property be acquired in joint names, without considering or being aware of the possible consequences of that, the resulting trust solution may provide the answer’