#10427 - Land Co Ownership - Land Law

TRUSTS: acquisition 3 types of trust: express, resulting and constructive - differ in their method of creation and their intention. Supervision 5 EXPRESS TRUSTS Actual intention, subject to compliance with formality requirements in s.53(1)(b) of LPA 1925. If the parties specific shares is express too, this is conclusive, if not, then constructive/resulting principles are applied. Oral agreements/promises binding for constructive/ implied trusts - s.53(2) LPA 1925 Eves v Eves. R E S U LT I N G T R U S T S ! Most common resulting trust is purchase money trust --- if A contributes to property in B's name, a trust arises since it is assumed that A did not intend to gift the money. Each party receives a share proportionate to their share of the purchase money. Remedial constructive trust --- judicial remedy giving rise to an enforceable equitable obligation: the extent to which it applies retrospectively, is up to the court. Scope of purchase money resulting trust --- also applies where the parties purchase the land in their joint names and there is no express declaration of trust regarding the parties' respective shares. The resulting trust then determines their shares based on their financial contributions. Practical difference between resulting/constructive trusts relates to the quantification of their respective shares. Resulting trust usually used in commercial context - Stack v Dowden removed the application of the resulting trust where the property in question is a home. Q U A N T I F I C AT I O N Jones v Kernott [2011] laid down the approach for quantifying a constructive trust: 1. starting point is 50:50 because equity follows the law, 2. presumption can be displaced by showing that (a) parties had a different common intention at the time of acquisition, or (b) later formed the common intention that their respective shares should change. 3. Common intention is to be deduced objectively from their conduct, 4. In those cases where it is clear that the parties either (a) did not intend a joint tenancy from the outset, or (b) had changed their original intention but it is not possible to ascertain what their actual intention was as to the quantification of shares, 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 (imputing). 5. Each case will turn on its facts, financial contributions are relevant but there are many other factors which may enable a court to decide which shares were intended. CONSTRUCTIVE TRUSTS Broadest and least clear category of trust - Paragon Finance v DB Thakerar & Co [1999] suggest it arises "whenever the circumstances are such that it would be unconscionable for the owner of the property...to assert their own beneficial interest in the property and deny the beneficial interest of another" Institutional constructive trust --- arises by operation of law as from date of the circumstances under which it arises. SOLE LEGAL OWNER Jones v Kernott diminished the role of the resulting trust, with Lord Walker suggesting the constructive trust should be used. If there is a single legal owner, then it is a common intention constructive trust --- focus is on the parties' conduct, which included, as seen in Gissing v Gissing and Stack v Dowden household bills; day-to-day expenses; indirect contributions. Any indication that the parties' wished to share the home would be inferred as common intention. There is no presumption of equal shares in sole name cases. JOINT LEGAL OWNERS Conveyance to joint owners is conclusive to the existence of a trust. Equity follows the law therefore joint tenants are also joint beneficial interest holders - starting point is 50:50, as held in Stack v Dowden. This presumption can then be rebutted by evidence of common intention. A C Q U I S I T I O N - FA M I LY H O M E Application of resulting and constructive trusts must be understood in light of Stack v Dowden [2007] and Jones v Kernott [2011]. Both cases concerned the quantification of shares in a property that had been purchased in joint names by a cohabiting couple with no express declaration of their respective shares. The court kept 2 distinct circumstances in which resulting and constructive trusts could be claimed - (i) sole legal ownership where the legal title is with one person alone, and (ii) joint legal ownership with no declaration of respective beneficial interests. In the former case, C must first establish that there is a trust and that he is entitled to an interest. In the former, joint legal ownership is conclusive as to the existence of a trust, so the only concern is quantification.