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Law Notes Land Law Notes

Common Intent Constructive Trusts Notes

Updated Common Intent Constructive Trusts Notes

Land Law Notes

Land Law

Approximately 987 pages

Land Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB land law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

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In the family home – the “common intent” constructive trust

The express agreement constructive trust

Basis

  • Lloyds Bank plc v Rosset [1991]:

    • Lord Bridge:

      • This arises where at some time before acquisition

        • 1. There has been any agreement/understanding reached between then that the property is to be shared beneficially.

        • 2. AND C has relied on this to her detriment in order to give rise to proprietary estoppel or a constructive trust.

Requirements

  • Evidence of agreement?

    • Lloyds Bank plc v Rosset [1991]:

      • Lord Bridge:

        • Cases of Eves v Eves where H made excuse to W that would have put house into joint names had W not been under 21

          • = evidence of agreement for beneficial interest but sole name legal ownership.

    • Criticism of reasoning + responses

      • Gardner: Excuses don’t provide evidence of agreement if merely excuses – shows only that one party is not agreeing with another.

        • Glover and Todd: BUT we’re looking at objective intentions here – whether excuses etc. would lead reasonable person to believe from utterances that H was declaring himself trustee.

        • Mee: agreement can be inferred where understanding that will share beneficial ownership, but H convinces W that there is some technical reason why they can’t be legal owners.

          • i.e. H is not allowed to profit from his deception and W’s detrimental reliance that whatever the legal situation, they will share the house.

  • Detrimental reliance

    • Grant v Edwards [1986]:

      • Nourse LJ:

        • Response to agreement requires conduct on which the woman could not reasonably have been expected to embark unless she was to have an interest in the house.

      • Browne Wilkinson VC:

        • Reference to estoppel will be helpful here.

    • Midland Bank v Cooke [1995]:

      • Waite LJ:

        • Court won’t give effect to conduct and expenditure which could happen in any family life( E.g. decoration and household expenses)

          • And call it detrimental reliance.

  • A promise of rights in the future is enforceable?

    • Hammond v Mitchell [1992]: H said after the buying of a bungalow in his own name; “don’t worry about the future, because when we are married [the house] will be half yours anyway, and I’ll always look after you and [our child]”

      • Waite J:

        • In relation to the bungalow there was express discussion which, although not directed with any precision as to proprietary interests,

          • was sufficient to amount to an understanding at least that the bungalow was to be shared beneficially.

        • She acted to her detriment in that she gave her full support on two occasions to speculative ventures secured on the entire bungalow property

          • An indebtedness to which the house and land were all committed up to the hilt

      • Herring: controversial, because it looks like a promise relating to rights in the future, rather than being agreements to share in the present

    • James v Thomas [2007]: H became sole beneficial owner when he bought his siblings’ shares in a house by way of a mortgage. Later, he met W and they lived together as man and wife. H and W both worked on improvements to the house. said “these improvements will benefit us both” and “if I die you will be well provided for” to W. H then died.

      • Chadwick LJ

        • There is no reason to think that the observation “this will benefit us both” (in relation to the business)

          • was more than a statement of the obvious: what was of benefit to the business was of benefit to both H and W, for whom the business was their livelihood

        • As for “you will be well provided for”

          • That is not a representation that W was to have a present proprietary interest in the property —

            • or as a representation that she would have a proprietary interest in the property during Mr Thomas's lifetime.

          • It was, as it seems to me, a representation as to what the position would be after H’s death if they were still living together.

  • When must the agreement take place?

    • Lloyds Bank plc v Rosset [1991]:

      • Lord Bridge:

        • This arises where at some time before acquisition, or exceptionally at a later date

          • There has been any agreement/understanding reached between then that the property is to be shared beneficially.

    • James v Thomas [2007]: H became sole beneficial owner when he bought his siblings’ shares in a house by way of a mortgage. Later, he met W and they lived together as man and wife. H and W both worked on improvements to the house. said “these improvements will benefit us both” and “if I die you will be well provided for” to W. H then died.

      • Chadwick LJ

        • If the circumstances so demand, a constructive trust can arise some years after the property has been acquired by,

          • and registered in the sole name of,

            • one party who (at the time of the acquisition) was the sole beneficial owner

          • But, as the cases show, in the absence of an express post-acquisition agreement,

            • a court will be slow to infer from conduct alone that parties intended to vary existing beneficial interests established at the time of acquisition.

        • The judge here determined that there was no such express agreement.


The inferred agreement constructive trust

Basis

  • Lloyds Bank plc v Rosset [1991]:

    • Lord Bridge: This arises where

      • 1. There is no agreement or arrangement to share beneficially

      • 2. But court can infer from conduct of parties a common intention to share the property beneficially

        • and this was relied on to give rise to a constructive trust.

          • For this, you’re going to need some contribution by C to the purchase price or repayment of mortgage payments.

  1. “Interest” Issue – was it intended that the parties should share the beneficial interest in the property?

  • Joint names may get you over the first hurdle w/o need for other evidence

    • Stack v Dowden [2007]:

      • Baroness Hale:

        • It is common ground that a house being in joint names will be sufficient to get over this hurdle

          • and establish that both had some beneficial interest.

  • But what about where the house is in one name alone? Do you need direct financial contributions?

    • ...

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