Trusts of the Family Home

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Trusts of the family home

Acquiring or quantifying a property right which has been created informally (i.e. not legally)

Resulting trust:

• Money must be towards the house; proportions in ratio of contribution

  • Curby v Parker – contribution to solicitor’s fees at the time of acquisition could not form a resulting trust

  • Mumford v Astil – discount against council housing qualifies as a contribution

  • Midland Bank v Cook – 5% contribution; judge urged counsel to go down constructive trust route

  • Stack v Dowden majority confirmed that resulting trust is not the most appropriate method in a family home situation – it is too rigid

Common intention constructive trust:

• A common intention on which they have relied to their detriment

  • LLoyds Bank v Rossett: per Lord Bridge, suggested there are 2 ways to establish common intention and doubts whether anything else will do

    • Express assurances - verbalising the common intention of co-ownership. This is an imperfect art, but needs to go beyond (usually) a lifetime tenancy, and needs to go to the legal ownership of the property. A statement that can be objectively assessed to do this

    • Inferred common intention through direct contributions to acquisition - though this is also evidence of a resulting trust, in this context they can be used as evidence of a common intention of co-ownership, and they can also be the detriment required

      • Eves v Eves: assurances that weren’t meant as to beneficial ownership (in this case that she wasn’t old enough to go on the legal title but he would’ve put her on if she were). equity

      • Burns v Burns – 19 years’ homemaking found no intention as no financial contribution or express assurance

      • Oxley v Hiscock – (orthodoxy) indirect contributions must be accompanied by express assurances

        • Le Foe, however, substantial indirect contributions to the mortgage founded inference per Nicholas Mostyn QC

      • Stack v Dowden criticised (obiter) the categorisation; a “wide” view is that mortgages drag out the process of house buying until after transfer -> though Lord Bridge is not technically overruled

        • “the requirement for direct contributions to establish a common intention constructive trust, in the absence of evidence of a shared understanding based on express discussions, is very definitely being undermined” Luke Barnes, 3 Doc Johnson’s Buildings

  • Stack v Dowden per Lady Hale, added the third category of inferred intention from parties’ whole course of conduct (in QUANTIFICATION case)

    • Jones v Kernott seems to extend this to the imputation of intention, however Capehorn v Harris & Barnes v Phillips has suggested imputation will not stand

    • Naturally inference may bleed into imputation via judicial discretion & fact finding

  • What is detriment?

    • Lloyds Bank v Rossett – decorating wasn’t sufficient

Quantifying the share:

• Acquisition:

  • Express assurances reflected

  • Inferred: 30-70%

    • Lord Kerr in Jones v Kernott suggests a fair quantification can be imputed, but Lady Hale doubted this & sticks to a posteriori inference

• Quantification (rebutting the strong presumption of beneficial joint tenancy):

  • Abbey National v Stringer – 100% equity on mother’s side

  • Jones v Kernott – 50:50 to 90:10

    • This may cause an issue for 3^rd parties i.e. creditors – how would they infer such an extreme incompatibility between law & equity?

Can Stack v Dowden be applied to acquisition cases?

• Technically Stack is not binding precedent on acquisition cases – though lower courts will not be permitted to ignore it

• Abbott v Abbott Lady Hale & other judges of Stack use the principle in an acquisition case (PC)

• Capehorn v Harris & Barnes v Phillips CA using Stack in acquisition

Is the law relating to trusts of the family home coherent?

The case law surrounding the family home documents a shifting judicial approach when giving expression of parties’ intentions in both sole-name and joint-name disputes. The development of the common intention constructive trust has led to heavy-weight changes in co-ownership and will be analysed as a response to the changing tide of social perceptions regarding ‘value’, something which is no longer restricted to cold, hard cash. The criticism of doctrinal incoherence levied against these recent trends must also be visited; as the broadening of judicial discretion in this area poses challenges at both technical and policy level. The lack of explicit machinery has been seen as an affront to legal certainty whilst other commentators have focused on the paternalistic danger of blurring the line between inference and imputation. Indeed the general consensus that developments have left the area in an uncomfortable hybrid between family law and land law is at the core of the debate. It will be suggested, however, that such interdisciplinary blending should not be viewed with knee-jerk hostility but rather as a pubescent judicial innovation urged by changing family models.

The historical development of co-ownership in the matrimonial setting may be seen as an illuminating comparison to emerging cohabitation principles. The courts were given wide discretionary powers under the Matrimonial Causes Act 1973 to make property adjustment orders where previously spousal rights were governed by trust principles. Sections 25(f) and (g) take into account non-financial contributions and the conduct of the parties. The Law Commission’s 1978 report advocated a statutory presumption of a beneficial joint tenancy in matrimonial property based on a “joint enterprise view of marriage” (Douglas, 2004, p. 106) and, despite the corresponding Bill failing to pass, this view has been consolidated by the court’s use of the 1973 Act. Amidst growing social pressure the Commission expanded their remit to unmarried couples in 2002 and again in 2007. Though Parliament has not taken the opportunity to make statutory machinery...

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