#5347 - Family Property - Land Law

The acquisition of Beneficial Interests in Family Property

A. EXPRESS TRUSTS

• Goodman v Gallant [1986] Fam 106: D was joint beneficial owner of property with her husband. After splitting from H, P moved in and together they bought out H’s share, then declaring themselves as joint tenants. When they had relationship problems D tried to sever tenancy and claimed that she had a share. Slade LJ:

  • If the conveyance contains an express declaration of trust which declares the beneficial interests in the property or its proceeds of sale there is no room for the operation of resulting or constructive trusts unless and until the conveyance is set aside or rectified; until that event the document speaks for itself.

  • There is a real and important distinction between a conveyance into joint names which contains a declaration of trust of the beneficial interests and a conveyance which contains no such declaration.

  • As there was no claim for rectification or rescission the declaration as to joint shares had to stand.

B. “COMMON INTENTION” CONSTRUCTIVE TRUSTS

• Gissing v Gissing [1971] AC 886: Husband and wife bought matrimonial home, put in the sole name of the husband. Money was raised by mortgage in the husband’s name and from a loan at a company where he worked; the wife having gotten him a job there. Wife paid for furnishings and garden work. Husband left. Held in this case that there was no trust; payments insufficient.

  • Lord Reid:

    • Thinks that the distinction between direct contributions to purchase price and indirect (such as paying bills so that H can meet mortgage payments) might prove unworkable; disapproves.

      • Gives case of joint bank account which meets all liabilities to show difficulties.

      • ‘It cannot surely depend on who signs the cheques’.

    • Admits that where payments are indirect then will be more difficult to quantify the share; does not mean that should assume there is a half share; must make a reasonable estimation.

    • There is a difference between inferring agreement from conduct and imputing an intention to agree to a share where the evidence gives no such ground. If the evidence shows that there was no agreement in fact then that excludes any inference that there was one. Seems unsure as to whether or not the law allows imputation where latter is the case.

  • Viscount Dilhorne:

    • Thought trust could be implied which was either, resulting, constructive or implied.

    • Where there is a common intention as to shares at the time of acquisition will be held to that.

    • However, in many cases no thought is given as to shares; if this is the case then the court cannot create an intention on their behalf. In determining whether there is a common intention then the court can look to the conduct of the parties; payment for furniture alone is not enough.

    • May be possible to discern intention later on e.g. where W starts to make mortgage payments.

  • Lord Diplock:

    • Thinks that resulting, constructive or implied trust arises where inequitable to deny interest i.e. where it appears there was an agreement or common understanding that W should have a share.

    • An express agreement as to shares in land conveyed into the name of only one of them discloses the requisite agreement for imposition of a trust.

    • Relevant intention of each party is that which can be reasonably deduced from words and conduct; not a subjective intention and is for the court to discern what the intention is.

      • Conduct before transfer is stronger than that which follows; different footing.

      • Payments towards acquisition or towards mortgage will be sufficient.

    • Court is essentially looking to ascertain whether there was a common understanding.

  • Lord Morris: Thinks that court has no power to impute but can only glean agreement from the conduct.

  • Lord Pearson: Thought the only basis on which there could be a trust is if she contributed towards the purchase price such as to create a resulting trust; interest is then proportionate to the contribution. Does not think that the contribution needs to be direct.

• Lloyds Bank v Rosset [1991] 1 AC 107: Husband funded acquisition of property in semi-derelict condition. Wife made no contribution to the purchase or the cost of renovation but worked at the site daily for a significant period; issue as to whether this was sufficient to give her a beneficial interest. Lord Bridge:

  • Neither a common intention as to joint venture nor that the house should be shared with family sheds any light with regards to intentions as to beneficial interests is the property.

  • Rejects decision of lower court that the work was such that W could not reasonably be expected to embark upon unless she had a share; quite normal that she wanted to have work done by Christmas.

  • Two ways of giving rise to constructive trust:

    • Express agreement (however imperfect or imprecise) and detrimental reliance, or;

    • Direct contributions to the purchase price, including mortgage payments but little else.

  • Suggested that Eves v Eves & Grant v Edwards were only correctly decided because the female partners acted on the basis of an express representation; if there had not been, would have had no share.

• Oxley v Hiscock [2005] Fam 211: C was in relationship with D; exercised right to purchase council house at a discount with funds provided by D. Then sold property and realized a gain; used to buy larger house again with all funds being provided by D. Both contributed towards maintenance and improvement in belief that each had a beneficial interest (although C ignored advice of solicitor to declare it). After mortgage broke down sought declaration that under s14 TLATA had an interest in half proceeds of sale. Chadwick LJ:

  • To come under first category in Rosset it is not necessary to agree on the extent of the shares.

  • Rejects that Midland Bank v Cooke was wrongly decided but says law has come along since.

    • Does state that not right to assume that the interests are fixed at the time of acquisition.

  • Thinks should accept that actually impute intention as to the respective shares and in that sense might be more satisfactory to accept that there is no difference in cases of this nature between a constructive trust and proprietary estoppel.

• Stack v Dowden [2007] 2 All ER 929: P&D obtained house together; that house was then sold to acquire another larger property after they had children. Approximately 2/3 purchase price was provided by D, the rest being funded by a loan to both parties; conveyed into joint names. Each made contributions to mortgage payments although again P made more. At all times kept separate bank accounts.

  • Lord Hope:

    • Where the parties have dealt with each other at arm's length should start from the position that there is a resulting trust according to how much each party contributed. Then there is the question whether the trust is truly a constructive trust; a more pragmatic approach should be adopted for these kinds of cases.

    • Makes a distinction between cases where conveyed into sole name (starting point is no interest) and those where property is conveyed into joint names (presumption of half interest); each presumption is capable of being displaced by evidence to the contrary.

    • Then took into account the fact that contributions were never equal; financial independence throughout the relationship; also thought that could look at indirect payments.

  • Lord Walker:

    • Casts doubt on the comment in Rosset that nothing less than mortgage payments will do as it seems that the law has moved on since; sets the bar high; doubts compatibility with Gissing.

    • Thinks that in domestic context should use constructive as opposed to resulting trust; still sees a role for resulting trust in commercial contexts or joint ventures.

    • Should take a broad view as to contributions in this case including the indirect i.e. whole course of dealing ; although the court should remain sceptical so as to detect the trivial or insignificant.

    • Doesn’t find the analogy with estoppel helpful as in estoppel are asserting a claim against the conscience of the true owner whereas here are simply identifying the true owners.

  • Baroness Hale:

    • Agrees on sole/joint distinction and that Lord Bridge may have set the bar too high.

    • The search is to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.

    • A holistic approach is preferable for two reasons:

      • Emphasises that search is for what parties must have intended as a result of conduct;

      • Does not enable court to abandon that search for what it regards as fair.

    • Context is everything; domestic is different; each case will turn on its own facts. Consider:

      • Any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names;

      • The reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired;

      • The nature of the parties' relationship;

      • Whether they had children for whom they both had responsibility to provide a home;

      • How the purchase was financed, both initially and subsequently;

      • How the parties arranged their finances, whether separately or together or a bit of both;

      • How they discharged the outgoings and their other household expenses.

    • The above list is not exhaustive; there may also be reason to expect that intentions change.

  • Lord Neuberger: Achieved same outcome (that should have 2/3 share) but on resulting trust analysis; thought that just because...