INFERRED COMMON INTENTION CONSTRUCTIVE TRUST

Circumstances under which court is prepared to infer are very limited; court must rely entirely on the conduct of the parties both as basis to infer common intention to share property beneficially and the conduct intended to give rise to a constructive trust. In the case of Rosset, Lord Bridge identified two questions that needed to be asked:

a) Was there a contribution to the purchase price?

b) Was there a contribution to the mortgage payments?

o Doubted that anything less than contributing to purchase price or mortgage payments would suffice

o Would be assumed that the contributor wouldnt have made the contribution unless they were expecting to obtain some ownership of the property Court simply tries to establish from all of the available evidence that there was a genuine agreement or understanding between the parties as to the allocation of the beneficial interest. As said in Jones v Kernott, an inferred intent is an actual intent, albeit one that can be deduced objectively from the parties’ conduct.

Despite the fact Baroness Hale, in the case of Stack v Dowden criticised Rosset by saying it

‘’may have set the hurdle too high in certain respects’’, and Lord Walker also expressing how he thought the time had come to take a wide view of what is capable of counting as a contribution towards the acquisition of a home, the case of Morris v Morris made it clear that the Rosset rules remained in place.

Resulting or constructive trust?

In Midland Bank v Cooke the man put in his savings, took out a mortgage and the

remainder of the purchase price of the property was made up of a gift his parents gave to the couple. Question was if woman had contributed to the purchase price; she clearly did in the form of half the gift.

• Mrs Cook had signed a form forgoing any rights in the property against the bank, but this was before the house was transferred in the joint names of Mr and Mrs Cook

• She argued that her signature signing away was obtained under undue influence and secondly she was entitled to half of the house.

• Court reasoned that as she had established an interest in the house based on her contributions, the court was entitled to look at all the circumstances to give effect to this common intention; court was free to allocate (if an intention could be found) interests to the parties different from the original shares

o Direct contribution = AN interest in the property = court entitled to look at the full course of dealings between the parties to give effect to their true COMMON INTENTIONS

o Such scrutiny not limited to acts of direct contribution

o The court is not bound to deal with the matter on the strict basis of the trust arising from the cash contribution to the purchase price, and is free to

attribute to the parties an intention to share the beneficial interest in some different proportions

• If you can establish an inferred constructive trust, must be able to show some detrimental reliance

o Pearson Stevens say where the constructive trust is inferred, the fact you have contributed to the purchase price is almost always sufficient to show detrimental reliance

• Common intention was found, and then proportion of shares were deduced In the case of Drake v Whipp Gibson LJ stated that ‘’in the case of a family home, a beneficial interest is often asserted on behalf of a spouse or partner who has contributed towards the purchase of the home. In such a case, the nature and extent of the interest in the property will depend on whether the parties had a common intention to share the interest in the home, either expressly or in some cases by implication, in which case, provided there is detrimental reliance, a constructive trust will be imposed. Where there is no finding of such a common intention, but there has been a contribution to the

purchase price, beneficial ownership will arise by means of a resulting trust.’’

Determining the shares of the parties (quantification)

Once youve established intention, you need to quantify the interest

In Le Foe upon the judge deciding that the claimant was entitled to A share, the issue now was what share and how much she would get. Referred to Midland Bank case, he adopted more holistic global approach and ordered her 50% of the value

In Oxley v Hiscock Chadwick conflates resulting trusts, constructive trusts and estoppel.

Couple weren’t married but lived together for about 20 years, and had both contributed various sums of money to the purchase price of various properties and both had been instrumental in the paying off of mortgages. She argued she was entitled to a half share as the intention had always been that the property would be jointly owned.

• Having regard to the whole course of dealing between parties people would be given a share proportionate to their input

• Once youre in over the threshold, the course looks at the course of dealings between the parties from which they will infer the share to which people would have a common intention

• Court is using orthodox trust tools to decide what the parties get, but Chadwick in this case feels he can do what is fair based on the course of dealings between the parties

• He also went on to say there is no difference in outcome whether the true analysis lies in a resulting trust or proprietary estoppel

o “The time has come to accept that there is no difference in outcome, in cases of this nature, whether the true analysis lies in constructive trust or proprietary estoppel”

o This is simply untrue. A constructive trust is an institutional right in property whilst estoppel is remedial

Thompson says in the present case although the basis of the quantum was on the courts perception of fairness, it corresponded exactly with her financial contribution to the estate. Court of appeal in fact actually just worked out the interest on a resulting trust analysis

• End up awarding her an amount proportionate to her contribution which is what she would be entitled to under a resulting trust analysis

• Also notes the two things arent the same as the constructive trust can only properly operate in the context of acquiring property while estoppel can also operate in regard to easements for example. In the case of a constructive trust, the effect of the imposition is to enforce the agreement already made by the parties but with estoppel the court will simply give a remedy which is appropriate

• Concludes that the judgment from Oxley unfortunately lost the opportunity to restate the law in a more principles manner; role of constructive trust seems to have been eliminated and replaced by a trust on the principle of fairness

3) CONVEYANCE OF LEGAL TITLE INTO JOINT NAMES – NO DECLARATION AS TO THE