Trusts - Trusts of the Family Home & Proprietary Estoppel

Does a 'common law marriage' exist for co-owners who are not married?

No- no statutory provisions to allocate ownership fairly

What is the statutory discretion about land on divorce/dissolution of a marriage?

To allocate ownership fairly between parties

How can the legal title to land be held?

Sole legal owner or as joint tenants

How can the legal owner hold the legal title to land?

As full legal & beneficial owner, on trust for : a sole beneficiary, more than 1 beneficiary as joint tenants, more than 1 beneficiary as tenants in common in equal or unequal shares.

What is the cause of disputes over co-ownership?

When the legal title is not representative of the beneficial ownership of the property.

When do disputes over co-ownership of the home tend to arise when there is a sole owner?

When the legal title is registered to a sole legal owner, but the other person claims a beneficial interest in the property

When do disputes over co-ownership arise when there are joint owners?

Where legal title is registered as joint owners, but there is no declaration as to their beneficial interest & it is claimed that the parties are NOT beneficial joint tenants.

What if there is an express trust over the land?

This determines the beneficial interests in the property

How can equitable ownership be specified?

On the TR1 transfer form needed to transfer legal title to the land - it has a provision to specify equitable ownership.

Do purchase money resulting trusts apply to trusts of the family home?

NO

What kind of trust might the court imply about the family home in absence of an express trust?

Common intention constructive trusts

What do courts consider when implying a common intention constructive trust?

Common intention, beyond financial contributions, holistic approach

How can the common intention be demonstrated?

Expressly based on statements as to ownership or impliedly, determined objectively based on the circumstances

What is the starting presumption about equitable ownership if no express/clear specification on it?

It mirrors the legal ownership - sole legal owner is sole beneficial owner, joint legal owners are equitable joint tenants.

What does an individual seeking to establish beneficial interest in a sole legal ownership case need to establish to show they have acquired an interest under a common intention constructive trust?

A common intention that they should have a beneficial interest + detrimental reliance upon that intention.

What does an individual seeking to establish that they are not beneficial joint tenants need to show?

Rebut the presumption, referring to common intention of the parties + detrimental reliance on that common intention.

What does the court consider in determining the actual intention of the parties?

The whole course of conduct

How does the court determine intention?

Express intention, if none infer an intention, if not they will impute an intention for fair shares based on the whole course of conduct.

What is the starting point of equitable interest in ALL family home cases?

Equity follows the law

How is the legal title held by cohabitees?

As legal joint tenants

What is the presumption of equitable ownership for cohabitees who purchase home in joint names & do not specify their respective equitable entitlements?

They are equitable joint tenants

What must be shown to rebut the presumption that cohabitees are equitable tenants in common?

Strong evidence hat they were intended to be anything other than joint tenants in equity

What is the 2 step approach to joint legal ownership cases?

Rebut the presumption - did parties have a common intention to hold property OTHER than as joint tenants?

Did C act in their detriment in reliance on that common intention, then quantify - if parties are tenants in common, in what proportions?

What can be evidence that parties had a shared intention not to hold as equitable joint tenants?

Advice/discussion between parties indicating intention, reason legal title was registered in particular names, purpose parties acquired the house for, nature of relationship, whether they have kids, how the house was financed, how parties arranged other finances/responsibility for household expenses

Who has the burden to rebut the presumption for joint ownership cases?

The party seeking to rebut it to adduce the relevant evidence.

What are the most important factors in determining parties intention in joint ownership cases?

Express agreements/discussions, in absence of these, financial factors

How is detrimental reliance shown?

Conduct which is otherwise inexplicable, act done reliant on the parties common intention that their interests should be other than joint

What factors are considered in quantifying the interests of the parties?

Whole course of conduct, express agreements/discussion, in absence of this then financial factors

What were the key elements of stack v dowden which were indicative that they did not intend a beneficial joint tenancy or equal shares?

Finances kept very separate, separate bank accounts & savings, contributed to deposit & mortgage (unequally), had 4 kids & were together for a long time

Are unequal financial contributions alone enough to rebut the presumption of joint tenancy?

No - further evidence is required.

Was a man who paid all the deposit, all mortgage payments & all direct outgoings able to rebut the presumption of joint beneficial ownership?

No

What is the starting presumption about equitable/beneficial ownership in cases where there is a sole legal owner?

That the sole legal owner is the sole beneficial owner unless there is an enforceable trust over the property

What is the two step process for assessing the beneficial interest in sole legal ownership family home cases?

Establishing the interest - did the parties have a common intention for the non-legal owner to acquire a beneficial interest, has that person relied on this to their detriment

If an interest is established what is the quantum of that interest as a proportion of the property?

What are the 2 traditional routes to a common intention constructive trust?

Express common intention as to shared ownership + detrimental reliance by non-legal owner

OR

Inferred common intention from parties' conduct + detrimental reliance

What should courts consider when ascertaining intention?

The whole course of conduct

What does the non-legal owner need to show to establish an equitable interest?

Demonstrate a common intention for them to acquire an interest in the land

What is the best evidence of common intention?

Express agreement/discussions regarding ownership of the house (not merely about occupation)

Give examples of words that indicate ownership?

Half yours, 50/50

Give examples of words that are insufficient for ownership?

Family home, benefit both of us, you will be looked after'

How can excuses be used as evidence of intention?

To show why one partner may not be jointly registered as legal owner, but NOT if used to avoid an argument.

How does the court infer common intention in sole legal ownership cases?

Have regard to the whole course of dealing

What cannot be used to infer common intention as to ownership?

Household duties, staying at home to look after children, contributing to bills, doing repair/maintenance around the house

What can be taken into account to infer common intention as to ownership?

Indirect financial contributions e.g. to family expenses, which enable the other party to pay the mortgage, substantial improvements which significantly added value to the property

What is detrimental reliance?

Conduct which is otherwise inexplicable not expected to be done unless they have an interest in the house, any act done to their detriment relating to the joint lives of the parties

Give examples of what CAN be detrimental reliance?

DIY work, renovations, payment of substantial expenses, contribution to family resources, caring for kids

Give examples of what is NOT detrimental reliance?

Decorating, giving up work to look after children, looking after the family as a 'traditional wife'

How does the court quantify the size of the non-legal owner's interest once a common intention constructive trust is established?

Following express intention, OR infer the common intention OR impute an intention for fair shares in light of the whole course of dealing.

When is imputation permissible?

Only at quantification stage

What is proprietary estoppel?

An equitable doctrine that allows a person to informally acquire property rights

- objective is to prevent unconscionable conduct.

- It is a cause of action and a defence

What types of rights can the court award in proprietary estoppel cases?

can award either a personal right or a property right, including rights under a trust.

What are the 2 common types of estoppel?

Assurance case - one party assures another that they have or will acquire a right in relation to property, leading to detrimental reliance

Acquiescence case - A incorrectly believes they have a right in land owned by B, and acts to their detriment. B is aware of their mistake but does not correct them

In what caselaw has proprietary estoppel been found?

Pascoe - C told D 'the house is yours' on many occasions - in reliance, D spent a significant amount of £ repairing and improving the house - held that D had an equity in the house by way of proprietary estoppel

Greasley - D was assured she could live in house for life - to her detriment, she looked after C and family for 27 years with no pay and based on these assurances - D established proprietary estoppel

What are the three main elements of a proprietary estoppel claim?

1) An assurance made to the claimant.

2) Reliance by the claimant on the assurance.

3) Detriment to the claimant due to reliance.

n.b. C must also show that it would be 'unconscionable' for D to resile from the assurance

What is required for an assurance to qualify in proprietary estoppel?

The assurance must promise the claimant has or will acquire a right in property owned by the defendant.

Can an assurance be implied, or does it have to be express?

- can be inferred from context and indirect communication

- but it must be 'clear enough' - highly dependent on the context in which it is made

e.g., C worked on his cousins farm for almost 30 years without payment - he was told things only relevant to someone who was going to have a continuing involvement in the farm following death - held that there was an assurance

Is an assurance by D that C will always be financially secure an assurance giving an interest?

No, as it does not relate to specific property of D's

What is the second element of a proprietary estoppel claim?

- Reliance by the claimant on the defendant's assurance.

- There must be a sufficient link between the defendant's assurance and the claimant's detrimental conduct

- but assurance does not have to be the sole cause of the claimant's detrimental conduct

What was the outcome of Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd regarding reliance?

The claim failed because the claimant would have acted the same way regardless of the assurance.

What did the Court of Appeal conclude about the claimant's reliance in Wayling v Jones?

The claimant relied on D's assurance and would have left if he knew it would not be honored - there was reliance

What is the presumption the court will make about detriment and reliance?

- if D makes an assurance and C acts in a detrimental way, is assumed that there was reliance by C

- if this presumption applies, D must prove that C did not rely on the assurance

What is the third element of a proprietary estoppel claim?

Detriment to the claimant as a consequence of reliance on the defendant's assurance.

What are examples of detriment?

- financial loss

- allowing D to make choices on C's behalf

- passing up on opportunities to better themselves/live better - e.g. education, employment, business opportunities

What was the outcome of the Southwell case regarding detriment?

giving up a secure rented home that she had spent £20,000 on furnishing, based on the defendant's assurance that they could live in his home - a detriment

What is the role of countervailing benefits in assessing detriment?

They can be considered when determining if the claimant's reliance was detrimental.

What must be considered for a proprietary estoppel claim to succeed even if assurance, reliance, and detriment are established?

Whether it would be unconscionable for the defendant to dishonour the assurance.

i.e. it 'shocks the conscience of the court'

n.b it is rare for cases to fail when assurance, reliance and detriment are established

What scenario has failed for want of unconscionability?

- A and B assured C and D that they would give them the cottage.

- D spent money on improvements but was later asked to leave cottage

This was not unconscionable despite detrimental reliance because:

- D lived rent free for 15 years and used cottage minimally

- was employed and able to pay for their own accommodation

- woman trying to recover cottage was desperate and on benefits

What types of remedies can a court award in proprietary estoppel cases?

- transferring ownership,

- holding property on trust,

- granting property rights (e.g. easement)

- granting personal right e.g. licence

- paying a sum of money.

What principle did the Supreme Court establish regarding remedies for proprietary estoppel?

The remedy should never exceed the claimant's expectation and most obvious way to fulfil C's aim is to award a remedy which satisfies the expectation or award monetary sum in place

- if there is more than one remedy available, should let D choose which should be awarded to C

What are common situations where fulfilling the expectation would not be appropriate?

- Defendant no longer owns the property,

- D goes back on the assurance early, or

- Fulfilling the expectation causes hardship to third parties.

- Fulfilling expectation would enforce co-habitation

- The detriment is shorter than both parties anticipated (eg you can have my mansion if you nurse me for my life, then dies 2 weeks later - should not receive the whole mansion)