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Implied Trusts Of The Home Notes

GDL Law Notes > GDL Equity and Trusts Notes

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E&T: Implied Trusts of the Home Introduction

- Disputes over shared home ? implied trusts relevant. disputes when beneficial ownership not clear:

1. property in names of both parties but no declaration of beneficial interests; or

2. property in name of 1 party only, but other party claims beneficial interest. situations giving rise to claims: breakdown of relationship. 3rd party claims: mortgagee seeking to enforce security; bankruptcy trustee wishes to claim home to meet bankrupt's debts. divorce/dissolution of civil partnership: statutory powers to reallocate property rights. Matrimonial Causes Act 1973: married couples. Civil Partnership Act 2004: civil partnerships - registered same sex civil partners. but many situations not covered by statute ? trust principles apply. trust principles apply to:

1. unmarried heterosexual couples.

2. claim by third party: e.g. mortgagee.

- Starting point: equity follows the law - Stack v Dowden [2007, HoL]; Kernott v Jones [2011, SC]. joint legal owners ? 50%
UNLESS: 1. different shares intended (Stack v Dowden) - v. unusual; 2. common intention changes (Kernott v Jones).

non-legal owner ? 0%
UNLESS: claims share under implied trust.

- Express declaration of trust conclusive: Pettitt v Pettitt [1970] ([Ld Upjohn]) - but problematic: unrealistic: most people do not take precautions. must comply with s53(1)(b) LPA 1925: evidenced in writing. vs. s53(2) LPA: implied trusts exempt - Gissing v Gissing [1970] ([Ld Diplock]).

Issue 1: Establishing an Interest (where legal ownership in 1 name only).

- Claim by non-legal owner: must be based on existence of trust - [Ld Diplock] (in Gissing v Gissing). implied trust: some situations where inequitable for legal owner to claim full beneficial ownership - needed to overcome s53(1)(b) LPA 1925 formalities.

Resulting Trust: original method - very certain, but inflexible.

- Contribution to original purchase price of property: traditional purchase money RT. rationale: presumed intention of contributing party (equity presumes bargain). interest in proportion to contribution: generally set at date of acquisition. Bull v Bull [1955]: mother contributed to purchase of house in son's sole name; both lived there; son tried to evict mother ?
CoA: [Ld Denning]: RT - son + mother equitable tenants in common.

- Contribution to mortgage: more problematic ? only RT if made/agreed at time of purchase?

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