trusts of the family home

Gissing v Gissing 1971

Lord Diplock states that if you want to work out who is the beneficial owner of the land you need to work out whether there is a trust

Types of trusts

1. express trusts

2. resulting trusts

3. constructive trusts

pre 19th century

if there is an existing trustee, there is an express trust. If there is no express trust, there is a resulting trust (ownership goes to whoever pays the money in proportion to how much they pay)

20th century

more people could own land (women and working class) — the presumption of advancement gave women more rights

presumption of advancement

Husbands intended to give gifts to their wives or children when they put things in their name

express trust

parties have an express intention (by word or conduct) to create a trust

- requires signed writing

Goodman v Gallant 1986

an express trust is conclusive

Lady Hale, Stack v Downden 2007

"No one now doubts that such an express declaration of trust is conclusive unless varied by subsequent agreement or affected by proprietary estoppel"

purchase money resulting trust

Beneficial interest goes to the person or persons who paid for it as tenants in common in proportion to what they paid.

- can be rebutted by circumstances in evidence

Lord Upjohn in Pettitt v Pettitt 1970

'all resulting trusts which arise simply from equitable presumptions, may be rebutted by parol evidence.'

criticisms of the presumption of advancement

Lord Reid - it is based on the premise that women were economically dependant on their husbands and this is no longer the case so, the courts should adapt

Lord Diplock's criticism of the presumption

the presumptions are based on 'inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era.'

Lord Reid Gissing v Gissing

argues that couples are very likely to pool their resources. If the husband mostly pays for the mortgage/house expenses and the woman mostly pays for shopping and food expenses the husband gets all the titles to the one asset they have and the wife gets nothing. if the wife uses her income to pay for things which contribute to the house this should be considered.

Constructive Trust

arises whenever equity thinks it should arise based on things that are unconscionable

- requires a common intention supported by a detrimental reliance

Lord Justice Millet, Paragon Finance PLC v DB Thakerar & Co 1990

"A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another."

Lord Bridge, Lloyd Bank Plc v Rosset 1991

there are two types of CICT:

1. when there is an express agreement and a detrimental reliance

2. when there is an implied agreed based on the words and conduct of the parties

Stack v Dowden 2007

Facts: S and D were an unmarried couple they purchase a property and where D paid 65% and S 35%. The house was the only joint asset and they did not combine their income

Decision: there was evidence to suggest that the intention was not for equity to follow the law so rather than a 50-50 split there is a 65-35 split

equity follows the law

it assumes the beneficial title is the same as the legal title (50/50 split)

how do you rebut the assumption that equity follows the law

-you must find evidence that suggests the intention was otherwise

- The burden is on the other party to prove that equity does not follow the law

stages to answering questions on trust of family

Step 1. The starting presumption is that equity follows the law and the beneficial ownership is the same as the legal ownership

Step 2. Is there evidence of the common intention to displace the presumption?

Step 3. Quantify it also by looking at common intention/what is fair

Fowler v Barron 2008

Facts: F and B were in a 23 year long relationship. They buy a property and put it in both their names and have mutual wills where they leave each other everything they had. The man pays for all the expenses for the house and the woman pays all other expenses

Decision: applying Stack v Dowden, there is no proof that they intended to rebut the assumption that equity follows the law

Lord Hope and Lord Walker in Stack v Dowden

You can still use the resulting trust when there is a commercial transaction

Jones v Kernott

Facts: they cohabitated for years and C paid most of their initial costs and D supported with some payments before leaving when the relationship broke down, years later when the house increased in value, D tried to claim 50%

Decision: where it is clear that the parties' intentions have changed over time, the court may infer or even impute a new common intention (90/10 split)