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Coownership And Family Property Notes

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Land 7- Family Property and Coownership Family Property Express trusts Goodman v Gallant [1986] Fam 106: P and D shared a tenancy, expressly stating that it was a joint tenancy. When D left, CA held that their express agreement gave each a 50%
share. Slade LJ: "If...the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of the doctrine of resulting implied or constructive trusts". Resulting and 'Common Intention' Constructive Trusts Gissing v Gissing [1971] AC 886: The wife did not contribute anything to the purchase price nor the mortgage. She did however contribute to the cost of furnishing the house. It was discussed that if her household contributions meant that the husband was unable to pay the mortgage then she would have an interest. HL held that the wife had made no contribution to the purchase of the home from which they could infer that she was intended to have a share. The majority held that the courts had no power to just distribute family property according to what was 'just'. Rather a constructive trust could only arise on the basis of common intentions. Lord Diplock's comments reflect that he took a broader approach (see below). Lord Diplock: "A resulting, implied or constructive trust - and it is unnecessary for present purposes to distinguish between these three classes of trust - is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. and he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land." Lloyds Bank v Rosset [1991] 1 AC 107: The house was purchased solely with funds from a trust fund and placed in X's name. Unbeknown to D, his wife, X took out a mortgage on the house and when he defaulted the bank, P, claimed for repossession. D resisted on the basis that she had an overriding beneficial interest. HL held that D had no overriding interest and found in favour of the banks. Lord Bridge: He reiterated that the courts could not allocate property according to what was just, but rather a trust could arise in response to the common intention of the parties

that both would have a beneficial share in the property. The court may infer the common intention of a beneficial interest from the conduct of the parties. "Direct contributions" to the purchase price of the mortgage will "readily justify the inference...but I doubt whether anything less will do". This narrows the Gissing decision in terms of how the trust can be evidenced (direct financial contributions to the purchase price only). Midland Bank v Cooke [1995] 4 All ER 562; (1996) 112 LQR 378, [1997] Conv 66: A home had been bought in D's name but P contributed 6.5% of the purchase price. Although it had never been discussed by the parties, the court inferred an implied an agreement that P should have a share in the house, though that agreement was silent as to quantum (Gardner: unsurprising since there was never any agreement, whether express or implied). Therefore the court imputed an intention that the house should be split 50:50 on "general equitable principles. Waite LJ: "When the court is proceeding, in cases like the present where the partner without legal title has successfully asserted an equitable interest through direct contribution, to determine (in the absence of express evidence of intention) what proportions the parties must be assumed to have intended for their beneficial ownership, the duty of the judge is to undertake a survey of the whole course of dealing between the parties relevant to their ownership and occupation of the property and their sharing of its burdens and advantages. That scrutiny will not confine itself to the limited range of acts of direct contribution of the sort that are needed to found a beneficial interest in the first place. It will take into consideration all conduct which throws light on the question what shares were intended. Only if that search proves inconclusive does the court fall back on the maxim that 'equality is equity'." Stack v Dowden [2007] 2 All ER 929; (2007) 123 LQR 511, [2007] Conv 456, [2007]
CLJ 517: P and D owned a house in both of their names whose mortgage was paid off 65% by D and 35% by P. It was accepted by the parties that both had a beneficial sharethe question was the size of respective shares. P tried to claim 50% of the house. HL awarded him 35%. HL held that where a domestic property is conveyed into both cohabitants' names without a declaration of trust, there is a prima facie presumption that both the legal and beneficial interests in the property were joint and equal. The burden of evidence was on the party trying to rebut the presumption. Such a party had to prove that the parties had held a common intention that their beneficial interests be different from their legal interests, and in what proportions. In order to discern the parties' common intention the court should look at the parties' whole course of conduct in relation to the property and the law was no longer limited to looking at direct financial contributions (i.e. it has moved on from the doctrine of resulting trust). However, it would be hard to rebut the prima facie presumption. The presumption was rebutted on the unusual facts of the case (D over the course of the marriage had always contributed far more money in every respect of family life than P, including paying household bills etc). Lord Hope: In cases where single legal ownership is assumed, the burden is on the party claiming to have a beneficial interest. In cases of assumed joint legal ownership, the onus is on the party claiming that the shares of ownership are not to be equal.

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