Co-ownership 2

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  • Created by: Nikki
  • Created on: 17-04-16 19:56

Common intention trusts of the family home

Parties are free t arrange for themselves exactly what their respective interests in the property should be (provided they satisfy the relevant formality requirements)

Llyds Bank v Rossett --> claim for beneficial share in the property can be framed, and requirements proved in either of 2 ways

(1) express discussion with legal owner, through which it was agreed that C was to ahve an interest in the property, followed by a separate act of detrimental reliance by C on the expectation so created

(2) direct contribution by C to purchase of house, which both supports an inference that the parties intended C as to have an interest in the property and constitutes the necessary detrimental reliance

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Common intention proved by express discussion

Eves v Eves; Grant v Edwards --> in neither case was there anything we would typically call an agreement

Courts' treatment of detrimental reliance requirement poses similar problems -->

  • 2 options for courts
    • apply DR requirement strictly and look for conduct which C would not have engaged in had he not believed that he had an itnerest in the home --> requirement would almost never be satisfied
    • protect those whose names do not appear on legal title by pretending there is DR where there is none --> fairer results but further fictions
  • courts have taken latter routed --> watered down DR to point where thre is no need to show true reliance
    • in G v E Nouse essentially undermined his own test by being very generous in his interpetation of G's contributions
    • Brown-Wilkinson VC --> indirect contributions to mortgage payments which provide 'a sufficient link between the detriment suffered by the claimant and the common intention'
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Common intention inferred from conduct

C simly needs to show that he made a direct contribution to purchase of property, either trhough providing some part of the initial lump sum payment, or by payign some of the mortgage instalments or indeed by virtue of a discount of the purchase price to which C was entitled --> no need to further prove DR

3 important points to make about C proving common intention in this way:

(1) courts prepared to infer common intention to share beneficial interest even wehre C's direct contributions are only minor

(2) where C has not made any direct contribution to purchase, suggestion of Lord Bridge in Rosset that no other form of conduct can support an inference of such common intention --> even the most substantial indirect contributions will give C nothing

(3) if courts are serious that constructive trust of the type set down in Rosset must be based on parties' common intention to share beneficial ownership, it should follow that where it is proved taht there was no common intention thent here should be no such trut, irrespect of what contributions C may have made

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Quantification of beneficial shares

Once common intention to share has been proved by either method the courts must quantify the respective shares

Midland Bank v Cooke --> all sorts of other factors and conduct can be taken into account in determining what the extent of the interest should be

CA endorsed this approach in Oxley v Hiscock --> confirmed it also applies where C's beneficial share is proved through express discussion but  not agreement was reached on exact division of beneficial interest --> 'whole course of dealing between them in relation to the property'

Debate about imputing intentions to parties

Why cling to intention even where we know such intentiosn are non-existent?
(1) where parties real intentions can be discovered, court has no power to replace these with some other solution which it considers more fair
(2) even where their intentions cannot be discovered the question is not 'what would be the fair outcome' but rather 'waht would the parties, as fair and reasonable people, have intended had they turned their minds to it?

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Joint legal ownership

  • where legal title to land which is bought and used as parties' home is put in their joint names, the presumption is that the beneficial interest also be held jointly 
  • onus on party who is claiming greater interst to show a common intention that the beneficial shares be divided other than equally
  • C's greater financial contribution is not sufficient in itself
  • 'holistic' view of parties actions and dealings --> broader financial dealings, arragnments and contributions 
  • courts start with strong presumption that parties are tob e joint beneficial owners --> looking for evidence in parties' dealings taht is sufficeint to dispalce this presumption
  • if indications form parties' dealings and contributions are mixed,, and so give no clear message that joint beneficial ownership was not intended, then the beneficial interest will follow the legal title and be held jointly
  • Stack and Jones --> degree of separation in finanaces and property holdings
  • where there is no such evdience that the parties regarded, and so intended to keep, their financial interests and property holdings separate, the cours have held that the presumption of joint beneficial ownerhsip is nto displaced even where C contributed the entirety of the purchase price
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Inferred and imputed intentions

Jones v Kernott --> court clarified the following points
(1) where parties' genuine intentions extend to precise beneficial shares each is to have in teh home then these will be conclusive
(2) to extent that these genuine intentions fails to determine the parties' beneficial shares, ti will sometimes be permissible for the court to impute the relevant intention
(3) when identifying what intention should be imputed to the parties the court should bear in mind the whole course of dealing between the parties, and hence should consdier more than the parties' respective financial contributions to the purchase of the property

Court less clear about whether imputation ispossible in every case where parties genuine intentions are absent or unclear, but suggestion appears to be no --> led to imputation only once they have determined that the parties genuinely intended their beneficial shares to be otehr than relative to their legal interests in the property

Arbitrariness of only introducing imputation at second stage? --> if question at both statges is what the parties did intend, then it akes no sense to say that certain fators are relevant at only second stage

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Context

Stack v Dowden marks shift in law for 1 further reason --> suggests that diff rules apply in domestic context from rules that apply elsewhere

Where land is registered in joint names, the starting point we take depends on whether the context is domestic or non-domestic -->

  • domestic cases --> presumption that parties are joint beneficial owners
  • SC in Jones 00> in other cases presumption of resulting trust will apply, meaning that the parties are presumed to have beneficial shares proportinoate to their respective contributions to the purchase property 
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Evaluation of common intention constructive trust

Criticisms

  • (1) although Rosset principles state that such a trust is dependent on proof of common intention and detrimental reliance, it is clear that the court have found trusts where one or both of these elements is or are absent 
  • (2) even with liberties taken by courts in applying Rosset rule, they cannot do justice across the board
  • (3) women tend to bear the brunt of the injustice --> form of indirect sexual inequality 
  • (4) corruption fo trust law principles in these cases

Principle problem is that there is no consensus as to basis on which beneficial shares in family home should be awarded

Arguable that courts are in this position because they have tried to assimilate two types of cases of common intention which cannot be assimialted

Once we admit that intentions don't ahve to be genuine, what is gained by framing them in terms of common intention?

LC (2007) report aimed at partial reform of this area of law
- unable to give alternative to Rosset principles
- recommended giving court broad discretion to grant financial relif when an unmarried cohabiting couple separates where they have children and, perhaps, where the couple has lived together for a min peirod fixed by Parliament
- govt not inclined to take reforms forward

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