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You are here: BAILII >> Databases >> The Law Commission >> SHARING HOMES [2002] EWLC 278(2) (01 November 2002) URL: http://www.bailii.org/ew/other/EWLC/2002/278(2).html Cite as: [2002] EWLC 278(2)

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PART II

THE CURRENT LAW

Introduction

2.1      This project is concerned with homes which are "owner-occupied", in the sense that the legal estate^[1] in the shared home is vested in one or more of those who are sharing its occupation.^[2] In this Part we will explain the current principles affecting the ownership and occupation of the shared home, with particular reference to the ways in which a person can establish an interest in the property. We have already identified the circumstances in which problems typically arise. Although the primary question which must be asked in each case is a simple one - "Who owns the home?" - the answer itself can be extremely complex. It will frequently involve reference to principles of the law of trusts, which is particularly difficult for lay persons to understand.
2.2      In this Part we shall first outline the law relating to trusts of land. This provides the basic principles for determining the rights of those sharing homes as between themselves as well as in relation to third parties such as purchasers and mortgagees (paras 2.4 to 2.40). We shall then explain the advantages of declaring an express trust and the extent to which current law encourages parties to do so (paras 2.41 to 2.52). Finally, we shall summarise the rules of implied trusts and proprietary estoppel which are applied by the courts in the absence of any express arrangement having been made.
2.3      It may assist if we briefly explain the terminology used in this Part:

(1) An express trust is created where a person either expressly declares that he or she holds property on trust for another or transfers the property to another expressly subject to a trust. While no particular words are required to create a trust, it is usually very clear that a trust has been created.

(2) An implied trust is not expressly created, but arises by means of implication from particular circumstances. It can take one of two forms, a resulting trust or a constructive trust:

(a) A resulting trust is implied (or "presumed") where a person purchases property in the name of another, or where a person makes a direct financial contribution to the acquisition of property in the name of another.

(b) A constructive trust is implied to give effect to the "common intention" of persons, typically where there is an agreement, arrangement or understanding between them that a property should be shared beneficially on which agreement one person relies to his or her detriment.

(3) Proprietary estoppel is a doctrine applicable where a person has been encouraged or allowed to believe by an owner of land that he or she has certain rights in or over it. That person then acts to his or her detriment in reliance on this belief. If it is unconscionable for the owner to deny the claimant the rights in question, the court may grant relief to give effect to the expectation which has been engendered. The relief may or may not comprise the grant of an interest in property.

Trusts of land

2.4      The trust is a device providing for the division of ownership of property into two components: legal title and beneficial ownership.^[3] In the case of land, legal title can be definitively ascertained (where title registration has been effected) by reference to the land register. Those persons who hold the legal title ("the registered proprietors") are the trustees of the land. There cannot be more than four. They are given wide powers, to sell, to lease, or to mortgage the land.
2.5      The law imposes strict fiduciary duties on trustees. In particular, the trustees are not permitted to benefit from the exercise of their powers - not, at least, in their capacity as trustees. The benefits of the trust must be deflected to the beneficiaries:

(1) if land is sold, the proceeds of sale must be divided between the beneficiaries in accordance with their respective beneficial interests.

(2) if land is leased, the rental income must likewise be divided between the beneficiaries.

Example 1.

2.6      A and B have had title to a home transferred to them. There is an express trust declaring that they are "to hold the land for the benefit of C and D in equal shares." A and B are therefore the trustees, and C and D the beneficiaries, of the trust. When A and B sell the house for £300,000, they must pay the proceeds of sale to C and D, as to £150,000 each. If A and B let the house to a tenant, one half of the rent would be paid by them to C and one half to D.
2.7      Where land is jointly owned, it is likely that the persons who are sharing, or at least some of them, are both trustees and beneficiaries. While they cannot benefit from the trust in their capacity as trustees, they can take the benefits to which they are entitled as beneficiaries. Despite the apparent artificiality of the exercise the same rules are to apply as when the identity of the individuals who are trustees and beneficiaries is different. Again, the beneficial interests dictate the shares of each person in the property which the home represents.

Example 2.

2.8      E and F have had title transferred to them. There is an express trust declaring that they hold the land for the benefit of E (who put up more capital towards the purchase) as to two-thirds and F as to one-third. When they sell the house for £300,000, E is entitled to £200,000 and F is entitled to £100,000. Any rental income would be divided in the same proportions.
2.9      The trust of land was the subject of a consultation exercise and Report by the Law Commission relatively recently,^[4] leading to the enactment of the Trusts of Land and Appointment of Trustees Act 1996.

Legal and beneficial ownership of the shared home

2.10      It now appears to be the position that legal or beneficial co-ownership of land will always take effect behind a trust.^[5] While statute has not made express provision to that effect,^[6] the House of Lords has accepted that a trust should be implied in all cases of co-ownership.^[7]
2.11      Co-owners of land can be either joint tenants or tenants in common. The legal estate can only be held as joint tenants. Beneficial ownership can either take the form of a joint tenancy or a tenancy in common.

Legal title- joint tenancy

2.12      Where land is conveyed to two or more persons they will take the legal estate as joint tenants. Since 1925, joint tenancy has been the only form of co-ownership recognised at law.^[8] There is a statutory limit of four co-owners at law, and where an attempt is made to convey into more than four names, only the first four named will be the joint tenants. They will then hold the legal estate on trust for themselves and any other co-owners whose names do not appear on the title.
2.13      The most important element of joint tenancy is the right of survivorship. On the death of one joint tenant, his or her interest passes to the remaining joint tenant or joint tenants. Survivorship operates as a highly convenient means of ensuring a transmission of the property without the necessity of making a will. Indeed, a joint tenancy cannot pass by will or on intestacy, as it does not form part of the deceased's estate.
2.14      The right of survivorship is "ideal for trustees".^[9] The trust property, in this case the home, will pass automatically to the surviving trustee (or trustees) who has then the appropriate power to deal with it. There is no need for the surviving trustee or trustees to have recourse to the personal representatives of the deceased trustee. They will, of course, continue to be bound by the obligations imposed on them by the trust of land.
2.15      As the legal estate can only be held on joint tenancy, it is not possible for joint tenants to "sever" their interests in the legal estate and convert them into tenancy in common.^[10]

Beneficial ownership - joint tenancy or tenancy in common

2.16      Beneficial ownership may be as joint tenants or tenants in common. If they are joint tenants, the right of survivorship applies on death so that the interest of the deceased will pass automatically to the surviving joint tenant or joint tenants. The beneficial interest of the deceased will thereby cease and any purported testamentary disposition will be ineffective. This has potentially serious consequences for the relatives of the deceased who may have expected to benefit from the deceased's interest in the shared home on their death. For this reason, many persons sharing homes may prefer to hold the property beneficially as tenants in common.
2.17      If the persons sharing the home are tenants in common, they are said to hold the land "in undivided shares", each having a distinct share in the property which is (as yet) not divided among the tenants. No tenant in common has a particular "right" to any particular physical "part" of the land. In the event of the property being sold by the trustees, the proceeds of sale will be divided among the tenants in common in accordance with their respective shares in the equity.

The right of severance

2.18      Severance is the process whereby a joint tenancy is converted into a tenancy in common. It can only be effected with regard to the beneficial ownership, as it is not possible for there to be a tenancy in common of a legal estate. The effect of severance is to confer on the person whose interest is severed a "share" quantified according to the number of joint tenants immediately prior to the severance taking place. Thus, if two persons have held their home as joint tenants beneficially, on severance they will each obtain a half-share. They cannot claim a larger share by reference to the contributions they might have made respectively to the property.^[11]
2.19      The methods by which severance can take place are as follows:

(1) in the same manner as a joint tenancy of personalty could have been severed prior to 1926, that is to say^[12]

(a) by an act of any of the persons interested "operating upon his own share";^[13]

(b) by mutual agreement;^[14]

(c) "by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common";^[15]

(2) by notice in writing to the other joint tenants;^[16]

(3) by the act of a third party;^[17]

(4) by the acquisition of another estate in the land;^[18]

(5) by homicide.^[19]

Goodman v Gallant

2.20      An important decision, which emphasises the significance of an express declaration of beneficial entitlement and the limited effect of severance, is Goodman v Gallant.^[20] In 1978, Mrs Goodman and Mr Gallant, who were living together, purchased a property (Mrs Goodman's former matrimonial home). In the conveyance, they declared that they held the property "upon trust for themselves as joint tenants". In 1983, by which time the couple had separated, Mrs Goodman served a written notice of severance on Mr Gallant. This was followed by an application to court seeking a declaration as to their respective interests. Mrs Gallant claimed that as she had paid three-quarters of the purchase price of the property, she should now be entitled to three-quarters of the beneficial interest in the house.
2.21      The Court of Appeal held that Mrs Goodman could not go behind the express declaration of trust. On severance of the beneficial joint tenancy, the parties would thereafter hold as beneficial tenants in common in two equal shares. Mrs Goodman was bound by the terms of the trust to which she was a party. She could not claim an enhanced beneficial interest on the basis of her financial contribution to the purchase of the land having been greater than Mr Gallant's.
2.22      We support the robust approach of the court in Goodman v Gallant. We believe that those sharing homes should be given every encouragement to stipulate expressly for their beneficial entitlement. If that is to be the case, it is essential that courts strictly enforce declarations of trust which have been freely and fairly made by the parties.

Resolution of disputes between trustees and beneficiaries

2.23      Sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996 provide a ready means for the resolution of disputes concerning trusts of land. Any person who is a trustee of land, or who has an interest in any property which is subject to a trust of land or the proceeds of sale of land, may apply to the court for an order to regulate the exercise by the trustees of any of their functions. Alternatively, they may seek a declaration as to the nature or extent of a person's interest in property subject to the trust.^[21] In response to such an application, the court has a discretion to make such order as it thinks fit. This may include an order that the trustees sell the property and distribute the proceeds as directed.
2.24      In exercising this statutory jurisdiction, the court is obliged to have regard to:

(1) the intentions, if any, of the person(s) who created the trust;

(2) the purposes for which the property subject to the trust is held;^[22]

(3) the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home; and

(4) the interests of any secured creditor of any beneficiary.^[23]

2.25      Although section 14 replaced the jurisdiction vested in the court pursuant to section 30 of the Law of Property Act 1925, the principles to be applied are not the same. In cases under section 30, the normal rule was that, save in exceptional circumstances, the wishes of the person wanting a sale would prevail. The interests of children and families in occupation were treated as secondary.^[24] However, the replacement of trusts for sale with the "less arcane and simpler"^[25] trusts of land presaged a change in the treatment of applications by the court. It has been held that section 15 changed the law and that the court has greater flexibility as a consequence.^[26] As a result, the authorities on section 30 have now to be treated with caution and in many cases they are unlikely to be of great assistance.^[27]
2.26      There is one very important restriction on the court's powers under section 14. It can declare existing rights. But it cannot adjust or vary them. It is a statutory jurisdiction which is much more limited than that exercisable on divorce pursuant to the Matrimonial Causes Act 1973.^[28] However, the court does have considerable scope in terms of the order which it decides to make. The early signs are that the courts will use their statutory power with greater imagination than was perhaps the case under section 30.^[29] Where, however, a creditor is not receiving proper recompense for being kept out of his money, this is a powerful consideration in favour of ordering a sale.^[30]

Dealings with third parties

2.27      The existence of the trust governs the relationship between the joint owners and third parties who come to deal with the land. Where two persons hold the legal estate on trust for themselves or others, a conveyance of that estate executed by both of those persons will be effective to "overreach" the beneficial interests. The beneficial interests will then be detached from the land and attached to the proceeds of sale which will be held on trust from the date of completion by the former legal owners. The device of overreaching attempts to combine fairness to the beneficiaries with conveyancing facility for the third party purchaser or mortgagee. It is a highly convenient means of dealing with transactions entered into by the trustees of the land.
2.28      Trustees of land will overreach the rights of beneficiaries under the trust provided that they comply with the statutory requirements set out in the Law of Property Act 1925.^[31] These provide that the proceeds of sale or other capital money "shall not be paid to or applied by the direction of fewer than two persons as trustees, except where the trustee is a trust corporation".^[32] Where two or more persons apply to be registered as joint proprietors, the Land Registry will place a restriction on the register and thereby alert any purchaser to the need to deal with a minimum of two trustees.^[33] Where payment is duly made to two trustees, the purchaser will take free of the interests of beneficiaries behind the trust even though the beneficiaries are in occupation of the land and have not been consulted about the transaction.^[34]

Example 3.

2.29      A and B are joint registered proprietors of the freehold interest in a shared home. C, their daughter, aged 30, lives with them. She has a beneficial interest in the home (a one-tenth share) by virtue of constructive trust. If A and B sell their legal estate to D for £200,000, C's beneficial interest will be "overreached". She can no longer occupy the home. She can, however, claim her share in the proceeds of sale, amounting to £20,000, from A and B.
2.30      The doctrine of overreaching presupposes, in most cases,^[35] that there are at least two trustees of the land. If there is only one trustee, it will not operate, and case law has had to intervene to remedy the failure of the property legislation to address the effect of dealings with the legal estate by a single trustee. It seems that a purchaser of the legal title will not be bound by the beneficial interest unless:

(1) where the title to land is registered, the beneficial interest appeared on the register^[36] or, despite its absence from the register, it took effect as an overriding interest. Typically, this will involve the beneficiary being "in actual occupation", or in receipt of rents and profits, at the time of completion of the purchase.^[37]

(2) where title is unregistered, the purchaser had notice (actual, constructive or imputed) of the beneficial interest at the time of completion of the purchase. In other words, the purchaser is not a bona fide purchaser of the legal estate for value without notice of the trust.^[38]

Example 4.

2.31      E is the registered proprietor of the legal estate in a home which he shares with F. By virtue of constructive trust, F has a beneficial interest amounting to one-third. E mortgages the legal estate in favour of a bank without informing F. The bank may be bound by F's interest, which they have not overreached, provided that F is in actual occupation (or in receipt of rents and profits) of the land. If F was aware that E was negotiating a mortgage advance, F will not be able to assert priority over the bank.

Occupation of the shared home

2.32      Rights of occupation in the shared home may arise:

(1) where the person has a beneficial interest under a trust of land; and/or

(2) where the person has "matrimonial home rights" pursuant to Part IV of the Family Law Act 1996.

2.33      Where a person who is sharing the home with its legal owner has no beneficial interest under a trust of land (and has not been granted exclusive possession of any part of it), they are likely to be no more than a licensee. Unless they can claim "matrimonial home rights", they will have no effective security in the home.^[39]

Where a person has an interest under a trust of land

2.34      Where a person is a beneficiary under a trust of land, their right to occupy the property held on trust seems now to be derived largely, if not exclusively, from statute. The Trusts of Land and Appointment of Trustees Act 1996 confers on a "beneficiary who is beneficially entitled to an interest in possession in land subject to a trust of land" a right to occupy the land at any time.^[40] The right applies only if at that time:

(1) the purposes of the trust include making the land available for his occupation;^[41] or

(2) the land is held by the trustees so as to be so available.^[42]

2.35      There is no right of occupation if the land is not available (as where it has been let) or if it is unsuitable for occupation by the beneficiary (as where the property is not of a residential character, or is not fit for habitation).^[43]
2.36      The right of occupation is subject to the power that is given to the trustees to exclude or restrict the right in certain circumstances. First, trustees of land have a power to impose reasonable conditions on any beneficiary in relation to his occupation under the statutory power outlined above.^[44] Secondly, the trustees are given the power to exclude or restrict the entitlement to occupy under the statutory power.^[45] Thirdly, although the Act does not set out all of the factors to which the trustees are to have regard when exercising their powers,^[46] it does specify the intentions of the person who created the trust, the purposes for which the land is held, and the circumstances and wishes of each of the beneficiaries who are entitled to occupy the land under the statute, or would have been if he or she had not been excluded by the trustees when they had exercised their powers on a previous occasion.^[47] Fourthly, where one or more beneficiaries have been excluded or restricted by the trustees in exercise of their powers, the Act specifies conditions which they may impose on the beneficiary^[48] in occupation.^[49] Finally, the Act^[50] severely restricts the circumstances in which trustees may exclude any person who is already in occupation of the land, whether or not that person occupies by virtue of an entitlement under the Act.^[51] This safeguard protects not only a beneficiary but, for example, that beneficiary's spouse, partner or child.

Matrimonial home rights

2.37      The refusal of the House of Lords^[52] to recognise that a spouse who had no beneficial interest in the matrimonial home could assert a right to occupy the property against purchasers or mortgagees of the legal estate^[53] led to the enactment of the first Matrimonial Homes Act in 1967. This measure, and its successors,^[54] put the "deserted wife's equity" on a statutory footing and provided registration machinery whereby the spouse could assert their rights against third parties. It should be noted, however, that since 1967 there has been a highly significant change of practice in that most spouses have the legal title to their home vested in their joint names and both enjoy rights of occupation under the trust of land. The statutory rights have therefore decreased in importance.

Orders regulating occupation of the shared home

2.38      If a dispute arises between co-owners as to the right to occupy, it may be resolved by the trustees exercising their statutory powers or by the court pursuant to section 14 of the Trusts of Land and Appointment of Trustees Act 1996^[55] or Part IV of the Family Law Act 1996.
2.39      Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 applies where there is a trust of land. Any person who is a trustee, or who has an interest in property which is subject to the trust of the land or its proceeds of sale, may make the application. Part IV of the Family Law Act 1996, which was enacted principally to provide protection from domestic violence,^[56] applies only in relation to dwelling-houses but is not restricted to cases where there is a trust. Part IV is much more detailed than section 14, and it has been judicially suggested that where both jurisdictions are available to the court, it should approach the matter primarily in the context of the former.^[57] The jurisdiction of the court under Part IV is wide. The court may regulate occupation by means of a variety of orders. In broad terms, those who are entitled to occupy (including those with matrimonial home rights) are in the strongest position, but substantial protection is also conferred on those who have no entitlement as such but who have been married to, or have been cohabiting with, an entitled person (and even a non-entitled person).^[58]
2.40      We believe that the trust of land offers a machinery for the establishment of beneficial interests in land which is both coherent and flexible. Its integrity has the confidence of practitioners, and the Trusts of Land and Appointment of Trustees Act 1996 provides a means of resolving disputes between those who share homes which is efficient and workable. An effective balance is achieved between the need to protect those with beneficial interests who are occupying the shared home and the need to ensure that dealings with the property can be expeditiously and conveniently effected.

Encouraging formal arrangements

2.41      We have already emphasised how important it is for those who are intending to live together to discuss their mutual rights and obligations in the shared home and to make express provision. If a person wishes to obtain an interest in the shared home, he or she should insist upon an express trust being declared in their favour. A declaration of trust must be evidenced in writing and signed by some person who is able to declare such a trust - usually the legal owner.^[59] This will provide security. Not only will the beneficiary have the right to occupy the home, they will also obtain a financial stake in the property.
2.42      The Court of Appeal has recently re-emphasised, in very strong terms, the importance of purchasers executing an express declaration of their beneficial entitlement:

I ask in despair how often this court has to remind conveyancers that they would save their clients a great deal of later difficulty if only they would sit the purchasers down, explain the difference between a joint tenancy and tenancy in common, ascertain what they want and then expressly declare in the conveyance of transfer how the beneficial interest is to be held because that will be conclusive and save all argument. When are conveyancers going to do this as a matter of invariable standard practice? This court has urged that time after time. Perhaps conveyancers do not read the law reports. I will try one more time: ALWAYS TRY TO AGREE ON AND THEN RECORD HOW THE BENEFICIAL INTEREST IS TO BE HELD. It is not very difficult to do.^[60]

2.43      The Land Registry now requires a declaration of trust where land is to vest in persons as joint proprietors, whether on an application for first registration, on a transfer of land with registered title, or on an assent to vesting of land in persons entitled under a deceased's estate. The statutorily prescribed form requires the intending proprietors to state whether they hold on trust for themselves beneficially as joint tenants, as tenants in common or on any other trusts.^[61]
2.44      We realise that it is much easier to ensure that express trusts are created where the home is being purchased. Purchasers will be encouraged by their legal advisers to make express provision concerning their beneficial interests in the property - indeed a failure to advise in such terms may leave a solicitor vulnerable to a professional negligence action.^[62] At paras 2.48 to 2.52 below, we will outline the law relating to express trusts.
2.45      Problems are much more likely to occur where one person owns a house into which another comes to live. In this latter situation, it is relatively rare for the parties to make an express declaration of their respective beneficial entitlements. It is unusual for such persons to seek legal advice at such a time, and there is no occasion equivalent to registration of the title to the property following a purchase which would afford an opportunity to advise those sharing the home of the advantages of making formal provision.
2.46      Where no express declaration of trust has been made, any person who wishes to claim an interest in the home must do so by reference to the law of implied (resulting or constructive) trusts or the doctrine of proprietary estoppel. This area of the law is difficult, and the principles, which have been developed by decisions of the courts, are not as clear as they might be. The scheme which we devised, and which we explain in Part III, was intended to provide a more satisfactory, fairer and objectively certain means of ascertaining and quantifying beneficial entitlements to the shared home than the current law.
2.47      We outline the current law which applies where the parties have failed to make an express declaration of beneficial entitlement in paras 2.53 to 2.112 below.

Express trusts

2.48      A declaration of trust is conclusive of the beneficial entitlements of those who are parties to the relevant transaction, save where:

(1) the trust is set aside on the ground of fraud^[63] or mistake^[64] or is later rectified; or

(2) the parties did not assent to the terms of the declaration.^[65]

Construing the declaration

2.49      The true meaning of any declaration of trust is a matter of construction. The forms of words most usually encountered are considered below.

(1) The legal estate may be held by A and B on trust "for themselves as joint tenants beneficially". In such a case, A and B will hold as joint tenants in equity. In the event of that joint tenancy being severed, A and B will hold the legal estate on trust for themselves as tenants in common in equal shares.^[66]

(2) A declaration "that the transferees are entitled to the land for their own benefit and that the survivor of them can give a valid receipt for capital moneys arising on a disposition of land" has been held to be conclusive evidence of the parties' intention to hold as joint tenants beneficially.^[67] Where, however, there is no reference to the parties being entitled to the land "for their own benefit", the remaining words are not conclusive and in themselves comprise neither an express declaration of beneficial joint tenancy nor a statement indicating equal entitlement as tenants in common.^[68]

(3) Where the legal estate is declared to be held on trust for the persons entitled as tenants in common in equal (or otherwise expressly stipulated) shares, that will be conclusive of their respective beneficial entitlement.^[69]

(4) Where a transfer or conveyance of the legal estate into joint names is declared to be upon trust "for themselves as beneficial joint tenants in common in equal shares", the parties will be treated as tenants in common beneficially.^[70] The ambiguity of the declaration is resolved in such a way that survivorship does not apply unless that is the clearly expressed intention of the parties.

2.50      An express declaration is not conclusive of beneficial entitlement in so far as those who were not parties to the transaction are concerned. It cannot bind those who are not privy to the trust. Thus where a house was transferred into the names of A and B for themselves as beneficial joint tenants, B's parents, who had contributed more than half the purchase price, were still able to assert an interest by virtue of resulting trust.^[71]
2.51      An express declaration is not conclusive where it has not been executed.^[72] However, such a document may well assist the court in determining what the intentions of the parties were at the time of acquisition of the shared home, and may therefore be of significant evidential weight where a party is making a claim of entitlement pursuant to an implied, resulting or constructive trust.
2.52      We consider that it is desirable to encourage parties to make express declarations of beneficial entitlement wherever possible. The requirement of HM Land Registry that those who purchase land as joint proprietors should stipulate their beneficial interests is an extremely useful development which should reduce the scope for dispute. It is essential, in order to reward those who make proper provision, that courts continue rigorously to enforce express declarations of trust.

Implied trusts and proprietary estoppel

2.53      Many persons who share homes have never made an express declaration setting out their beneficial entitlement in the home. In such cases, the rules of implied trusts and the doctrine of proprietary estoppel have been applied by the courts in an attempt to ensure that justice is done.

Implied trusts

2.54      Implied trusts may be "resulting" or "constructive". Both arise by operation of equity. The general rule is that although a trust of land may be declared orally, it will be unenforceable unless it is evidenced in writing.^[73] However, the statutory formality requirements do not affect the creation or operation of implied, resulting or constructive trusts, and so no written evidence to establish the existence of such a trust is necessary.^[74] As we shall see, however, proving beneficial entitlement pursuant to an implied trust is not straightforward and may give rise to profound evidentiary difficulties.
2.55      A further problem, at least in terms of its effect on the exposition of the relevant principles, is caused by confusion between the various kinds of informally created trusts. In this paper we will refer to resulting and constructive trusts generically as "implied trusts". However, while there is extensive debate as to the precise nature of resulting and constructive trusts, the two are generally accepted to comprise separate and distinct doctrines.^[75] In particular, the appropriate method of quantification of beneficial entitlement may depend on the type of trust concerned.^[76]

The resulting trust

2.56      Where the legal estate is conveyed into the name of one party following the payment of some, or all, of the purchase price by another, the presumption of resulting trust holds that beneficial ownership results to the paying party.^[77] Where a resulting trust takes effect, the share obtained by the contributor will be proportionate to the share of the purchase price provided. Thus, where A and B join together, each paying half the capital necessary to fund the purchase of property which is transferred into the name of A alone, the presumption of resulting trust would apply so that A would hold on trust for A and B as to one-half each.
2.57      The true doctrinal basis of resulting trust is currently a matter of some dispute.^[78] One view is that it is based on the presumed intention of the parties.^[79] It has been claimed, however, that it is the absence of intention (to pass the beneficial interest in the property to the transferee) which is material.^[80] Whichever view is adopted, the presumption of resulting trust is rebuttable by any evidence of actual contrary intention. Evidence of any intention inconsistent with an intention that the contributor of money was to take a beneficial interest will suffice.^[81] This may take the form of evidence that the payment was by way of gift or of loan, or the presumption of advancement may neutralise the imposition of a resulting trust.

Intention to make a gift or a loan

2.58      The presumption of resulting trust can be rebutted where the person benefitting from the payment establishes that the payer intended to make a gift or a loan. In the latter case, the creditor would have recourse to the debtor by way of an action of debt. Even where the loan is secured on the debtor's land in the form of a mortgage, the creditor would not obtain a beneficial interest in the property as such.

Presumption of advancement

2.59      The countervailing presumption of advancement may arise where the party into whose name the property is transferred is the child or the wife of the transferor. The transaction is treated as one of gift unless it can be shown that the transferor intended otherwise.^[82] The presumption of advancement does not apply where property is purchased by a mother for her child,^[83] nor to a purchase of property in the name of a husband funded by his wife.^[84] Unsurprisingly, it does not apply as between an unmarried couple living together as husband and wife.^[85]
2.60      The presumption of advancement is now viewed as being somewhat anachronistic.^[86] A majority of the House of Lords has stated that it would rarely have decisive effect in modern conditions,^[87] and it has more recently been described as "a judicial instrument of last resort".^[88] The gender bias of advancement is widely thought to contravene Article 5 of the Seventh Protocol to the European Convention on Human Rights in its assertion of the equality of spousal rights and responsibilities.^[89]

The current role of the resulting trust

2.61      The resulting trust is based on the premise that a person is unlikely to have paid for property altruistically, without some expectation of return by way of beneficial interest. Traditionally, the only contributions which would give rise to the presumption were those at the date of acquisition of the property. The modern reliance on mortgage finance has led to a corresponding diminution in the importance of the resulting trust, as parties have sought to argue, for example, that contributions to the mortgage repayments have conferred on them an equitable interest in the home, and use of resulting trust reasoning is now relatively uncommon:

[I]t is probably best nowadays to regard the resulting trust as applicable only in those relatively rare cases where there is no available evidence of the parties' actual intentions, but contributions of cash have been channelled directly towards the initial purchase of realty.^[90]

The constructive trust

2.62      The constructive trust "is not capable of precise definition and is continually developing."^[91] In general terms, a constructive trust arises where it would be unconscionable for the legal owner of property to deny the beneficial interest of another.^[92] Where disputes arise between those sharing homes, it is the so-called "common intention" constructive trust to which resort is frequently made in an attempt to determine the parties' respective rights and to analyse whether those rights are binding in any respect on third parties, such as mortgagees and purchasers.^[93] The particular kind of conduct which is likely to give rise to such a constructive trust was considered at length by Lord Bridge in the leading decision of the House of Lords, Lloyds Bank plc v Rosset.^[94]

Lloyds Bank v Rosset

2.63      A married couple had purchased a property with the aid of mortgage finance and an injection of capital from the husband's family trust. The property was transferred into the husband's sole name. The question arose, in possession proceedings brought by the mortgagee, whether the wife had acquired any interest in the home. She contended that there had been an agreement between herself and her husband that the property was to be jointly owned, and that in reliance on that agreement she had made a significant contribution in kind to its acquisition by actively participating in renovation works.
2.64      The problem, a familiar one in such circumstances, was that of informality. No agreement having been committed to writing, there was a conflict of evidence between the spouses (who were divorced by the time of the hearing) both as to what had been said and what had been done. As a consequence, the court had to search for the parties' "common intention":

The question the judge had to determine was whether he could find that before the contract to acquire the property was concluded they had entered into an agreement, made an arrangement, reached an understanding or formed a common intention that the beneficial interest in the property would be jointly owned. I do not think it is of importance which of these alternative expressions one uses.^[95]

2.65      On the facts, Mrs Rosset failed to establish an interest in the property. She could not establish that there had been an agreement, arrangement or understanding that she should obtain a beneficial share in the home. Indeed, such evidence as there was supported the view that it was never intended that she should have an interest. The acquisition of the property in the husband's sole name was clearly a deliberate action which the trustees of Mr Rosset's Swiss family trust had insisted upon in order to protect their investment.
2.66      In setting out the principles on which he decided that Mrs Rosset had failed to establish an interest in the property by virtue of constructive trust, Lord Bridge drew a "critical distinction" between what have respectively come to be known as cases of "express", and cases of "inferred", common intention:

The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.

In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. ^[96]

Express common intention

2.67      Where a claim is based on "express" common intention, there must be evidence of express discussions between the parties. The intention to be established is not merely an intention to share occupation of the property, but an intention to share its beneficial entitlement (or its 'equity').
2.68      Two examples of cases of "express common intention", both concerning unmarried cohabiting couples, are given by Lord Bridge in Rosset.^[97] In Eves v Eves,^[98] the male partner told the female partner that the property would be acquired in his name alone because she was under 21. He implied that had she been older it would have been put into their joint names. In Grant v Edwards,^[99] the man told the woman that the only reason for the property being acquired in his name^[100] was her continuing involvement in divorce proceedings which might be prejudiced in the event of a joint purchase. In neither of these cases was there a true "common intention", in that the man did not really wish to share the property beneficially with the woman, but a constructive trust was nevertheless imposed, apparently to ensure that the woman obtained the share which the man led her to believe she could have had.^[101]
2.69      Where the court finds an express common intention, it must then go on to look for conduct by the claimant acting upon that intention, the so-called "detrimental reliance". That conduct may, but need not, involve financial expenditure by the claimant.^[102] In Grant v Edwards,^[103] the claimant made significant contributions to the expenses of the joint household such that the defendant could pay the instalments on the mortgage. In Eves v Eves,^[104] the claimant acted upon the statement by the legal owner by decorating the downstairs of the house, painting the brickwork, demolishing a shed and erecting a replacement, and wielding a 14lb sledgehammer to break up the concrete covering the front garden. Although she did not make any financial contribution to the purchase of the property, she was able to assert a beneficial interest arising by virtue of a constructive trust.

Inferred common intention

2.70      According to Lord Bridge in Rosset, a common intention will only be inferred where there is a direct financial contribution to the purchase price of the property by means of an initial capital payment or payment of mortgage instalments: "it is at least extremely doubtful whether anything less will do."^[105] In such cases, the conduct evidenced by the payments performs a dual role in establishing the common intention and providing the detrimental reliance. Not only does this emphasise the obvious overlap between the constructive trust based on the parties' inferred common intention and the resulting trust,^[106] it can also give rise to confusion in identifying the element of detriment.

Detriment

2.71      The claimant must have acted to their detriment in reliance upon the parties' common intention, whether express or inferred, in the reasonable expectation that an interest would be acquired in the property.^[107] Once a common intention has been established, the court must look for detrimental reliance. The burden then lies on the legal owner to show that an act, or a series of acts, was not referable to the claimant's belief that he or she has an interest in the house. Acts "referable to the mutual love and affection of the parties" will be so classed. No interest will therefore be acquired if the claimant would have performed the acts in any event.
2.72      The extent to which acts unrelated to the acquisition or improvement of property will satisfy the requirement for detriment is uncertain.^[108] Detriment has been interpreted broadly as including "any act done by [the claimant] ... to her detriment relating to the joint lives of the parties."^[109] Whilst noting that Eves v Eves^[110] indicates that there has to be some link between the common intention and the acts relied on as a detriment, Browne-Wilkinson V-C, in his judgment in Grant v Edwards^[111] expressly left open the question of what that link needs to be. In particular, he posed (but left unanswered) the question of whether the acts relied upon as a detriment must be inherently referable to the property (such as contributions to the purchase of physical labour on the house).^[112] Nourse LJ, in the same case, went further by commenting that, although the conduct required "can undoubtedly be the incurring of expenditure which is referable to the acquisition of the house, it need not necessarily be so".^[113]
2.73      However, in Layton v Martin,^[114] Scott J suggested that "contributions to the acquisition or preservation of specific property" were essential. Moreover, in Burns v Burns,^[115] May LJ took a very restrictive view of the type of conduct which will suffice, saying that a claim must fail in the absence of financial contributions to the acquisition of the property. But this view does not sit comfortably with Lord Diplock's assertion in Gissing v Gissing^[116] that what is required is for the claimant to do something to facilitate the acquisition of the property, either by way of direct financial contribution or "some other material sacrifice by way of contribution to or economy in the general family expenditure".^[117]
2.74      The more liberal approach in Gissing v Gissing^[118] seems to have carried the day, as the House of Lords accepted in Lloyds Bank plc v Rosset^[119] that once an express common intention has been established, it will only be necessary for the claimant "to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement".^[120] Nevertheless, the precise limits of the concept of detrimental reliance remain somewhat unclear.^[121]

Burns v Burns

2.75      In Burns v Burns^[122] the female claimant and the male defendant set up home together in 1961, and two years later a house was purchased for their joint occupation and that of their two children. The house was conveyed into the sole name of the defendant. The purchase price and the mortgage instalments were paid by the defendant. As the claimant stayed at home to look after the children, she did not take up paid work until 1975. From then, she used her earnings to pay the rates and the telephone bills and to pay for certain fixtures, fittings and other items of personal property. When the relationship broke down, the claimant argued that she had obtained a beneficial interest in the property by virtue of a constructive trust. Although she had taken his name, the parties never married.
2.76      There was no evidence of any discussion between the parties when the house was initially acquired in 1963 to indicate an express common intention that the claimant should have a share in it. None of the later expenditure by the claimant was referable to the acquisition of the house. Nor could the claimant's homemaking services be relevant, as they were not contributions of a financial kind. As Fox LJ put it:

[T]he mere fact that parties live together and do the ordinary domestic tasks is, in my view, no indication at all that they thereby intended to alter the existing property rights of either of them.^[123]

2.77      It should not be thought that the reasoning of Burns v Burns is founded on the fact that the partners were unmarried. Indeed, the principles concerning the assertion of a beneficial interest in property are neutral of status.^[124] In Midland Bank plc v Dobson^[125] a house was purchased in the husband's sole name. The court found no common intention that the property be shared beneficially between them, and no financial contributions attributable to the wife could be established. She therefore had no interest in the property, and the mortgagee seeking enforcement of sale of the property was entitled to obtain possession.^[126]

Developments since Rosset

2.78      Authority subsequent to Rosset has appeared to doubt Lord Bridge's requirement that the bargain must have occurred at or before the date of the acquisition of the property. Indeed, earlier case law did not impose such a limitation,^[127] and it now seems clear that the court can look to an agreement, arrangement or understanding subsequent to the acquisition of title to the property.^[128]
2.79      Recent case-law has also questioned Lord Bridge's suggestion that where a claim is based upon "inferred" common intention it should require a "direct" contribution to the purchase price (whether initially or by way of payment of mortgage instalments). In Le Foe v Le Foe,^[129] the wife had not made any such "direct" contributions. However, Nicholas Mostyn QC (sitting as a Deputy High Court Judge) noted that "the family economy depended for its function on W's earnings. It was an arbitrary allocation of responsibility that H paid the mortgage, service charge and outgoings, whereas W paid for day-to-day domestic expenditure."^[130] This "indirect" contribution was held to be sufficient detriment to furnish a beneficial interest pursuant to a constructive trust. The judge found support in the words of Lord Diplock in Gissing v Gissing:

It may be no more than a matter of convenience which spouse pays particular household accounts, particularly when both are earning, and if the wife goes out to work and devotes part of her earnings or uses her private income to meet joint expenses of the household which would otherwise be met by the husband, so as to enable him to pay the mortgage instalments out of his moneys this would be consistent with and might be corroborative of an original common intention that she should share in the beneficial interest in the matrimonial home and that her payments of other household expenses were intended by both spouses to be treated as including a contribution by the wife to the purchase price of the matrimonial home.^[131]

Quantification of beneficial entitlement

2.80      The quantification of a beneficial interest arising under an implied, resulting or constructive trust has caused considerable difficulty. There are two competing objectives which may arise for consideration. The first, loosely based on the concept of resulting trust, is that the claimant should obtain a share commensurate to the value of the contribution which has been made. The second, equally loosely based on the doctrine of constructive trust, is that the court should give effect to the parties' common intention in so far as that is ascertainable.
2.81      It is logical that where the interest is claimed by virtue of a resulting trust, quantification should be conducted by arithmetical assessment of the contribution and by calculation of the proportionate entitlement to the equity, as this correlates with the strict monetary principle which underpins the doctrine. Although this appears straightforward, calculation can be complicated, particularly where the contribution is not by way of cash injection. The courts have had difficulties in giving due credit for contributions as varied as payments due under a mortgage agreement and entitlement to a discount under the right to buy legislation.
2.82      Where the interest is claimed by virtue of a constructive trust, based on the parties' common intention, it would seem similarly logical to quantify the share according to what the parties intended. Unfortunately, the evidence may not support this simple logic. It may be, for instance, that although it is clear that the parties have a common intention to share the property beneficially, it is not possible to ascertain what their respective shares were intended to be. In those circumstances, the court may revert to a contribution-based assessment,^[132] or alternatively quantify the interest according to what is "fair and just". ^[133]

Midland Bank v Cooke

2.83      The logical distinction between quantification being based on resulting or constructive trust was cast in doubt by the decision of the Court of Appeal in Midland Bank plc v Cooke.^[134] Mr and Mrs Cooke married in 1971 and moved into a house which had been conveyed into the sole name of the husband. The purchase price of £8,500 (and costs) was provided as to £6,540 by way of a mortgage (the instalments of which were subsequently met exclusively by Mr Cooke), as to £1,000 out of Mr Cooke's personal savings, and as to the remainder (£1,100) by gift from the husband's parents. The judge at first instance held that Mrs Cooke had a beneficial interest in the home on the following basis. The gift from her parents-in-law was a gift to both spouses jointly. Applying the resulting trust analogy, her share was to be calculated by dividing the purchase price of the property by the amount attributable to the gift to her, an overall percentage of 6.47%. This method of quantification had support from earlier decisions.^[135]
2.84      The Court of Appeal took a different view. The duty of the judge was to survey the whole course of dealing between the parties relevant to the ownership and occupation of the property and their sharing of its burdens and advantages. The scrutiny was not to be restricted to an analysis of direct financial contributions, but would take into consideration "all conduct which throws light on the question what shares were intended".^[136] The court was not bound to deal with the matter on the strict basis of the trust resulting from the cash contribution to the purchase price, but was free to attribute to the parties an intention to share the equity in different proportions. Although the wife had made no further financial contributions to the acquisition of the property,^[137] the court held that she was entitled to a half share in the equity to give effect to the parties' common intention. As has been noted:^[138]

The odd result of this is that a person who has made a small monetary contribution may end up with a substantial share in the property on the basis of the parties' common intention, whereas one who has made no contribution at all obtains nothing, regardless of any common intention.

Drake v Whipp

2.85      In Drake v Whipp,^[139] an unmarried couple joined in the purchase of a barn which they intended to convert into a dwelling-house for their joint occupation. The property was conveyed into the sole name of Mr Whipp. The purchase price of £61,254 was met as to £25,000 by Mrs Drake and as to the remainder by Mr Whipp. Conversion works totalling £129,536 were then carried out, only £13,000 of which were contributed by Mrs Drake, although both parties put in many hours of their own labour into the property. Shortly after the barn conversion was completed, the couple's relationship broke down and litigation ensued.
2.86      The Court of Appeal considered that there had been a clear common intention that the property be shared beneficially. It accordingly applied constructive trust principles to quantify the parties' respective shares and approached the matter broadly, looking at the parties' entire course of conduct together. Mrs Drake obtained a share of one-third of the equity of the house.
2.87      It may seem incongruous that Mrs Drake, who made a financial contribution amounting to 19.4% of the total expenditure on the property, should obtain a smaller share than Mrs Cooke whose equivalent contribution was 6.47%.^[140] The decisions show that this method of quantification is essentially arbitrary, as it is notoriously difficult to ascertain what the parties' necessarily unrecorded "common intention" really was.

Proprietary estoppel

2.88      Where there are difficulties in establishing a constructive trust, the doctrine of proprietary estoppel may be of assistance. It has wide application, but its boundaries are uncertain and its effects not entirely clear. While the doctrine may operate to confer property rights in the shared home on a claimant, the court may give it effect in other ways, as we will see below. Indeed, the courts have been reluctant to provide an exact definition of proprietary estoppel, preferring to retain the flexibility to develop the jurisdiction.^[141]
2.89      An attempt was made in the late nineteenth century to lay down a definitive test for proprietary estoppel. In Willmott v Barber^[142] Fry J set out criteria which have come to be known as the "five probanda".^[143] However, this test has since been found lacking as it is inadequate to deal with many situations in which proprietary estoppel can arise,^[144] and the trend in more recent cases has been towards a "broader approach"^[145] based upon considerations of whether it would be unconscionable to permit the assertion of the owner's strict legal rights:^[146]

(T)he fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round.^[147]

2.90      Notwithstanding the problems of definition, it is possible to identify certain elements as essential to any finding of proprietary estoppel. Megarry & Wade summarise these elements as follows:^[148]

(1) An equity arises where—

(a) the owner of land (O) induces, encourages or allows the claimant (C) to believe that he has or will enjoy some right or benefit over O's property;

(b) in reliance upon this belief, C acts to his detriment to the knowledge of O; and

(c) O then seeks to take unconscionable advantage of C by denying him the right or benefit which he expected to receive.

(2) This equity gives C the right to go to court to seek relief. C's claim is an equitable one and subject to the normal principles governing equitable remedies.

(3) The court has a wide discretion as to the manner in which it will give effect to the equity, having regard to all the circumstances of the case and in particular to both the expectations and conduct of the parties.

(4) The relief which the court gives may be either negative, in the form of an order restraining O from asserting his legal rights, or positive, by ordering O either to grant or convey to C some estate, right or interest in or over his land, to pay C appropriate compensation, or to act in some other way.

2.91      Proprietary estoppel does not automatically bestow on C enforceable rights in relation to O's land. It gives rise to an equity to which the court will seek to give effect. The range of possible remedies is diverse. At one end of the spectrum, personal rights are granted, such as a mere licence.^[149] At the other end, property rights such as tenancies,^[150] easements,^[151] beneficial interests under a trust,^[152] or even an outright transfer of O's interest in the property^[153] may be ordered.^[154]
2.92      It is often stated that the court has a discretion as to the means by which to give effect to the equity arising by proprietary estoppel. This discretion is not, however, unqualified. The court is obliged, as far as possible, to meet the expectation which has been encouraged, or to ensure that C is compensated in circumstances where that is not equitable or practicable.^[155] The court will not give C a greater right or interest than they believed they had or had expected to receive.^[156] In addition, the court will order relief amounting to less than the expectations of C where circumstances have changed so as to make it inappropriate to satisfy those expectations in full.^[157]
2.93      The court will have regard to the conduct of the parties in determining what relief is appropriate in the circumstances. Thus in Pascoe v Turner,^[158] the court took account of O's ruthlessness in attempting to evict C from the house by any possible means, and ordered an outright transfer of the house to C rather than merely giving her a licence to live there for the rest of her life.^[159]
2.94      Although the question is not definitively settled, it seems that an equity arising by estoppel may bind a third party who acquires the land affected by it. Where title to land is registered, an equity arising by estoppel may be protected by entry on the register as a result of which a purchaser of the land will be bound. It is, however, unlikely that such an equity will in fact be protected by registration, as the claimant will rarely have realised the need to register their right. In such circumstances, protection may still be forthcoming in so far as the claimant was in actual occupation (or in receipt of rents and profits) at the date of the relevant transfer.^[160] Where title to the land is unregistered, an equity arising by estoppel is binding on a donee (irrespective of notice)^[161] and on a purchaser with notice of it.^[162]
2.95      Proprietary estoppel is potentially of considerable importance where a person is seeking to claim an interest in a home shared with another in whose name legal title is vested. The most obvious situations in which estoppel may apply are where the claimant has made improvements to the home, or has made non-monetary sacrifices in the interests of the relationship.^[163] Although some claimants may have enforceable contractual rights against each other, an equity may arise by estoppel in circumstances where there is no valid contract — perhaps because a gift was intended,^[164] or the essentials for a valid contract were absent,^[165] or because the contract was void for uncertainty.^[166] Furthermore, the court has much greater discretion in satisfying an equity arising by estoppel than it does when enforcing a contract, as the rights of the parties are not fixed at the time when C acts to their detriment, but may be varied by the court to take account of subsequent events.^[167]

Campbell v Griffin

2.96      In Campbell v Griffin,^[168] the claimant, a single man, commenced living with a Mr and Mrs Ascough, a retired couple in their late seventies, as their lodger (paying £10 a week for a room in their house) in 1978. As the couple became increasingly frail, the claimant assumed the role of a carer, cleaning the house, maintaining the garden, helping with shopping, and preparing meals, although he continued to pay rent until about 1992. By this date, they were treating the claimant as a son, and they made assurances that he had a home for life. Mr Ascough did make a codicil to his will leaving the claimant (inter alia) a life interest in the house, but this failed as he predeceased his wife and she took by survivorship. Mrs Ascough could not at that time make any disposition in the claimant's favour as she suffered from dementia and lacked testamentary capacity.
2.97      The Court of Appeal, having found that an equity had arisen in favour of the claimant, again considered the minimum required to do justice to the claimant. While the assurance was that he obtain a life interest, this was, in the view of Robert Walker LJ, "disproportionate": it was not so compelling as to demand total satisfaction, and it did not take account of the effect on other persons with claims on the Ascoughs' estate. An order that the estate pay the claimant a sum of £35,000 (payment to be charged on the property) was made.

Jennings v Rice

2.98      In Jennings v Rice,^[169] the claimant had known Mrs Royle, a widow, since 1970 when he worked for her as a part-time gardener. Over the course of many years he became her carer, running errands, and doing work in the home. Although she no longer paid him for his services from the mid 1980s, she had made vague promises that she would see him right and that her house would be his one day. For the last three years of her life (she died in 1997), and following a burglary of her house, the claimant spent nearly every night on the sofa in Mrs Royle's sitting room to provide her with some security- he did have a house of his own. Despite the promises she had made, Mrs Royle died intestate.
2.99      The Court of Appeal held it to be essential that in assessing the value of the claimant's equity there should be proportionality between the expectation which had been generated and the detriment which had been suffered. While the claimant may have expected to receive the house (valued at £435,000) from Mrs Royle, that was not proportionate to the detriment. The decision of the judge at first instance to award a sum of £200,000 as the minimum necessary to satisfy the equity was upheld.
2.100      Both these cases highlight the flexibility offered by proprietary estoppel in its response to particular factual circumstances. The doctrine is not restricted by the necessity to establish a "common intention" that the property be shared beneficially or a direct financial contribution to its acquisition such as is required to prove beneficial entitlement pursuant to a constructive or resulting trust. Indeed, the administrative inconvenience of imposing a trust of land was commented upon in Campbell v Griffin.^[170] However, this inflexibility inevitably causes some uncertainty and unpredictability, as it is difficult for the parties to know the extent of their rights without going to court.

Proprietary estoppel and the constructive trust

2.101      There are many similarities between the doctrine of proprietary estoppel and the "common intention" constructive trust, as explained by Browne-Wilkinson LJ in Grant v Edwards:

In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or her detriment in reliance on such belief. In both, equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner by defeating the common intention. The two principles have been developed separately without cross-fertilisation between them: but they rest on the same foundation and have on all other matters reached the same conclusions. ^[171]

2.102      The House of Lords further acknowledged the assimilation of constructive trust and proprietary estoppel in the land-mark decision of Lloyds Bank plc v Rosset, Lord Bridge referring loosely to the acquisition of a beneficial interest by way either of a constructive trust or a proprietary estoppel.^[172] Since then, there have been several judicial statements to similar effect.^[173] One distinguished commentator has argued that as the claimant must establish the same criteria for each, any remaining distinction is in consequence illusory:

Surely, it is time the courts and counsel moved beyond pigeon-holing circumstances into constructive trusts and proprietary estoppels and looked at this basic principle of unconscionability underlying both concepts.^[174]

2.103      Professor Hayton has acknowledged that the "apparently vague standard" of unconscionability may leave a "grey penumbra of uncertainty" surrounding the law, but he considers that the parties "have only themselves to blame"^[175]- as they could have expressly regulated their own affairs. He believes that third parties should not be bound by any equity enjoyed by the claimant unless it would be unconscionable for the former to assert his strict legal rights over the latter.
2.104      However, differences do remain between proprietary estoppel and the constructive trust:

(1) According to orthodox doctrine, the common intention constructive trust is thought to result from a frustrated bargain between the parties, whereas proprietary estoppel is based on the notion of frustrated expectation.^[176] It may be, however, that very little now turns on this difference of emphasis.^[177]

(2) Where a claim to a constructive trust is made, at least where there has been no "agreement, arrangement or understanding" between the parties that the property be shared beneficially, the courts require proof of direct contributions by the claimant to the purchase price.^[178] But where a claim is made in proprietary estoppel, detrimental actions need not entail financial expenditure.^[179] The real test is whether the detriment is sufficiently substantial such that it would be unconscionable to allow the assurance to be disregarded.^[180]

(3) A beneficial interest under a constructive trust arises as soon as the claimant acts to his detriment in reliance on the "agreement, understanding or arrangement" with the defendant. However, it has been traditionally considered that the "equity" arising from proprietary estoppel must mature in the form of a court award in order to constitute a property interest.^[181]

(4) Although the court retains an element of "discretion" in relation both to proprietary estoppel and constructive trust, this discretion appears to be wider where estoppel is concerned.

Criticisms of the current law

2.105      The principles applicable by the courts where no express declaration of trust has been made have frequently been criticised as unsatisfactory.

"Common intention" constructive trust

2.106      "Common intention" has been described as a "myth".^[182] It is certainly difficult to explain every decided case on the basis of the parties' intention being "express" or "implied", and there is ample evidence of courts taking an inventive approach to the facts and discovering a common intention where none in truth exists.^[183] The parties may never have discussed the matter save in the most general terms, and they may well have been under some misconception as to the rights conferred on them by virtue of their status (married or otherwise) pursuant to the general law. In realtion to at least some of the cases, the astute comment of one critic is certainly justified:

"The necessary common intention can be either express or implied, but it is supposed to be real, and not invented by the judge. However, it seems clear that this rule has little connection with judicial practice. Agreements are in reality found or denied in a manner quite unconnected with their actual presence or absence."^[184]

The relevance of contributions

2.107      We have seen how the doctrines of resulting and constructive trust may operate so as to confer an interest consequent upon a contribution being made to the acquisition of the property. However, the principles which govern this area are by no means clear or easy to apply. Whilst it seems that a qualifying contribution must be financial in nature, it remains unclear whether it must be directly referable to the acquisition of the property, or, indeed, when a contribution is direct or indirect.^[185] It does not seem satisfactory to us that the way in which the parties sharing the home have agreed to administer their household budget should have a decisive effect on whether the house is to be treated as beneficially owned by one or both of them. In some cases, the allocation of financial responsibility could even be deliberately contrived to the advantage of the party with legal title.

Discrimination against home-makers

2.108      The decision in Burns v Burns^[186] highlights the difficulty faced by those who have shared a home for a long time but who cannot establish the requisite "common intention" nor prove a "financial" contribution as they have been occupied full-time at home, possibly bringing up children. A strong argument can be made to the effect that the current law discriminates against those who do not earn income from employment.^[187]

The quantification of beneficial entitlement

2.109      The case law indicates that the principles of quantification are uncertain, with decisions being made which are (not entirely surprisingly) inconsistent and difficult to reconcile. In Midland Bank plc v Cooke,^[188] the court found that the wife of the legal owner had acquired a beneficial interest in the matrimonial home pursuant to a common intention constructive trust. The method of quantification of that interest adopted was wide-ranging, the court finding that the wife had acquired a one-half share in the equity although she had made a financial contribution of less than one-twelfth to the acquisition of the property. This case is difficult to reconcile with Drake v Whipp,^[189] where a much greater financial contribution resulted in a far smaller beneficial interest.

The unpredictability of estoppel

2.110      The unwillingness of the courts to define precisely the scope of proprietary estoppel means that the doctrine is flexible and can be developed as appropriate. However, the corollary is that certain elements of the doctrine remain unclear and that it is difficult to predict when it will operate. For example, there is currently debate regarding the concept of unconscionability, as well as the definition of detrimental reliance. Furthermore, the extent to which proprietary estoppel and the common intention constructive trust overlap remains a difficult issue.^[190]

The litigation consequences

2.111      The lack of coherent principle does not assist parties or their lawyers in attempts to arrive at a compromise.^[191] The emphasis on the parties' "common intention" has compelled the courts to examine closely evidence of conversations between the parties, sometimes over many years, which were unlikely at the time to have appeared to be significant in terms of acquisition of proprietary entitlement. The nature of the resulting forensic exercise has been well described as a "painfully detailed retrospect":^[192]

The primary emphasis accorded by the law in cases of this kind to express discussions between the parties ("however imperfectly remembered and however imprecise their terms") means that the tenderest exchanges of a common law courtship may assume an unforeseen significance many years later when they are brought under equity's microscope and subjected to an analysis under which many thousands of pounds of value may be liable to turn on fine questions as to whether the relevant words were spoken in earnest or in dalliance and with or without representational intent.^[193]

2.112      The current requirements for establishing the existence of an interest under a trust are not ideally suited to the typical informality of those sharing a home. We feel that to demand proof of an intention to share the beneficial interest in the home can be somewhat unrealistic, as people do not tend to think about their home in such legalistic terms. The emphasis on financial input towards the acquisition of the home fails to recognise the realities of most cohabiting relationships. Finally, and importantly, the uncertainties in the present law can cause lengthy and costly litigation, wasting court time, public funding and the parties' own resources.
2.113      In order to deal with the criticisms of the current law, we attempted to devise a scheme to determine whether a person had a beneficial interest in the shared home (and if so, to quantify that interest) although there had been no express declaration of beneficial entitlement. It would be open to the parties to "contract out" by making express provision.
2.114      In Part III, we set out the scheme which we devised, and we explain why we concluded that this is not a satisfactory means of reforming the law. We shall return to the principles of implied trusts and proprietary estoppel in Part IV when we consider whether there is scope for judicial development of the principles currently applied which may lead to greater clarity, greater fairness, and greater certainty.

Note 1    That is, the freehold interest (the fee simple absolute in possession) or the leasehold interest (the term of years absolute).     [Back]

Note 2    Where the legal estate is vested in a person who is not currently occupying the home, the arrangement is likely to take the form of a tenancy or a licence pursuant to which the occupiers are paying rent to the owner. The implications of such an arrangement in relation to a home are already under consideration by the Law Commission: see Renting Homes 1: Status and Security (2002) Law Com No 162.    [Back]

Note 3    “Beneficial ownership” is sometimes referred to as “equitable ownership”. For purposes of clarity of exposition, we shall use the former term in this Paper.    [Back]

Note 4    See Transfer of Land: Trusts of Land (1989) Law Com No 181.     [Back]

Note 5    For full discussion, seeMegarry & Wade - The Law of Real Property, (6th ed 2000) paras 9-051et seq.    [Back]

Note 6    See Law of Property Act 1925, s 36(1); Settled Land Act 1925, s 34(1).    [Back]

Note 7    “Since [the Law of Property Act 1925]..., undivided shares in land can only take effect in equity, behind a trust for sale upon which the legal owner is to hold the land”: Williams & Glyn’s Bank Ltd v Boland [1981] AC 487, 503, per Lord Wilberforce. See also City of London Building Society v Flegg [1988] AC 54, 77, per Lord Oliver of Aylmerton.    [Back]

Note 8    Law of Property Act 1925, ss 1(6), 34(1), 36(2); Settled Land Act 1925, s 36(4).    [Back]

Note 9    Megarry & Wade, para 9-003.    [Back]

Note 10    See para 2.18 below.    [Back]

Note 11    Goodman v Gallant [1986] Fam 106. See further para 2.20 below.    [Back]

Note 12    According to Sir Page Wood V-C in Williams v Hensman (1861) 1 J & H 546, 557.     [Back]

Note 13    Thus an alienation (in whole or in part) of the joint tenant’s interest (eg sale, lease or mortgage) may effect severance: see generallyMegarry & Wade, paras 9-038et seq.    [Back]

Note 14    The agreement need not be specifically enforceable: Burgess v Rawnsley [1975] Ch 429, 444, 446.    [Back]

Note 15    A unilateral statement by one joint tenant made orally in the course of negotiations will not suffice: Burgess v Rawnsley above, 448, per Sir John Pennycuick (cf Lord Denning MR, 439).    [Back]

Note 16    Law of Property Act 1925, s 36(2).    [Back]

Note 17    The classic instance is the bankruptcy of the joint tenant: see, eg, Re Gorman [1990] 1 WLR 616.    [Back]

Note 18    The so-called doctrine of merger, now of dubious application: seeMegarry & Wade, para 9-048.    [Back]

Note 19    Severance would ensure that the killer did not benefit from the crime by means of survivorship. The court has a statutory discretion to relieve from the consequences of the forfeiture rule save where the applicant has been convicted of murder: Forfeiture Act 1982, s 2(4)(b).    [Back]

Note 20    [1986] Fam 106.    [Back]

Note 21    Trusts of Land and Appointment of Trustees Act 1996, s 14(2).    [Back]

Note 22    This refers to the purposes subsisting at the time the application comes before the court: Rodway v Landy [2001] Ch 703, 711, per Peter Gibson LJ.    [Back]

Note 23    Trusts of Land and Appointment of Trustees Act 1996, s 15(1). See also the additional factors which must be considered with regard to certain specific applications:ibid, s 15(2).    [Back]

Note 24    In re Citro (Domenico) (A Bankrupt) [1991] Ch 142; Lloyds Bank plc v Byrne & Byrne [1993] 1 FLR 369.    [Back]

Note 25    Mortgage Corpn v Shaire [2001] Ch 743, 757, per Neuberger J.    [Back]

Note 26    Ibid, 758, per Neuberger J; Bank of Ireland Home Mortgages Ltd v Bell [2001] 2 FLR 809, 816, per Peter Gibson LJ.    [Back]

Note 27    Mortgage Corpn v Shaire above, 761, per Neuberger J.    [Back]

Note 28    See further paras 5.8 - 5.11 below.    [Back]

Note 29    See, for instance, the order proposed by Neuberger J in Mortgage Corpn v Shaire [2001] Ch 743, 764et seq.    [Back]

Note 30    Bank of Ireland Home Mortgages Ltd v Bell [2001] 2 FLR 809, 816, per Peter Gibson LJ. Where the application under s 14 is made by the trustee in bankruptcy of one of those sharing the home, somewhat different considerations apply: Trusts of Land and Appointment of Trustees Act 1996, s 15(4); Insolvency Act 1986, s 335A.    [Back]

Note 31    Law of Property Act 1925, s 2(1)(ii).    [Back]

Note 32    Law of Property Act 1925, s 27(2).    [Back]

Note 33    Land Registration Act 1925, s 58(3); Land Registration Act 2002, s 44.    [Back]

Note 34    City of London Building Society v Flegg above.    [Back]

Note 35    The exceptions being the trust corporation and the sole personal representative, acting as such: see Law of Property Act 1925, s 27(2).    [Back]

Note 36    Land Registration Act 1925, ss 54, 58; Land Registration Act 2002, ss 42, 44.    [Back]

Note 37    Land Registration Act 1925, s 70(1)(g); Land Registration Act 2002, Sched 1, para 2, Sched 3, para 2; Williams & Glyn’s Bank Ltd v Boland [1981] above; Abbey National Building Society v Cann [1991] 1 AC 56.    [Back]

Note 38    Caunce v Caunce [1969] 1 WLR 286; Kingsnorth Finance Ltd v Tizard [1986] 1 WLR 783. The decisions take a radically different view of the burden of inquiry imposed on the purchaser. Tizard attempts to equate inquiry in unregistered conveyancing with that expected in registered conveyancing as a result of the decision inBoland.    [Back]

Note 39    Although the provisions of the Protection from Eviction Act 1977 concerning due process and notices to quit apply to licensees, those licensees who share accommodation with the licensor who is occupying it as his or her only or principal home are specifically excluded: s 3A, inserted by Housing Act 1988, s 31.     [Back]

Note 40    Section 12(1).    [Back]

Note 41    Or for the occupation of beneficiaries of a class of which he is a member, or of beneficiaries in general.    [Back]

Note 42    Section 12(1).     [Back]

Note 43    Ibid, s 12(2).    [Back]

Note 44    Trusts of Land and Appointment of Trustees Act 1996, s 13(3). These include conditions requiring the beneficiary to pay any outgoings or expenses in respect of the land, and to assume any other obligations in relation to the land or to any activity which either is or is proposed to be conducted on the premises: ibid, s 13(5). The statutory power has been interpreted broadly so that trustees may divide a building subject to a trust of land between those beneficiaries who are entitled to occupy and also require the beneficiaries to share the costs of the works effecting the division: Rodway v Landy [2001] Ch 703, 715.    [Back]

Note 45    Ibid, s 13(1). This power is exercisable only where two or more beneficiaries are entitled to occupy under the statutory power. It cannot be used to exclude all the beneficiaries so entitled: Rodway v Landy [2001] above, 702. Nor can it be used either unreasonably to exclude any beneficiary’s entitlement to occupy land, or to restrict any such entitlement to an unreasonable extent.    [Back]

Note 46    It is implicit that the trustees should have regard to all the circumstances that are relevant in the particular case.     [Back]

Note 47    Ibid, s 13(4).     [Back]

Note 48    Or beneficiaries.    [Back]

Note 49    The conditions may require compensation of the excluded beneficiary.    [Back]

Note 50    Ibid, s 13(7).    [Back]

Note 51    Ibid, s 12.    [Back]

Note 52    National Provincial Bank Ltd v Ainsworth [1965] AC 1175.    [Back]

Note 53    The famous "deserted wife's equity" (see Bendall v McWhirter [1952] 2 QB 466) which met its demise in National Provincial Bank Ltd v Ainsworth above.    [Back]

Note 54    Following amendments largely contained in the Matrimonial Homes and Property Act 1981, and consequent upon the Law Commission’s Third Report on Family Property (1978) Law Com No 86, the legislation was consolidated in the Matrimonial Homes Act 1983.    [Back]

Note 55    See para 2.23 above.    [Back]

Note 56    The statutory reform of regulation of the occupation of the family home in cases of domestic violence was consequential upon the recommendations of the Law Commission: Family Law: Domestic Violence and Occupation of the Family Home (1992) Law Com No 207.    [Back]

Note 57    Chan v Leung (unreported) 30 November 2001, HH Judge McGonigal, sitting as a Deputy Judge of the High Court.     [Back]

Note 58    For further details, see S M Cretney & J M Mason, Principles of Family Law (6th ed 1997) pp 244 - 265.    [Back]

Note 59    Law of Property Act 1925, s 53(1)(b). The requirement of writing does not apply in the case of implied, resulting or constructive trusts:ibid, s 53(2). See para 2.54 below.    [Back]

Note 60    Carlton v Goodman [2002] EWCA Civ 545 at [44], per Ward LJ. The use of the upper case for emphasis is that of the judge.    [Back]

Note 61    Land Registration Rules 1925, rr 19(1), 98, Sched 1, as inserted by Land Registration Rules 1997, r 2(2).    [Back]

Note 62    See Walker v Hall [1984] 5 FLR 126, 129, per Dillon LJ, 136, per Lawton LJ; Springette v Defoe [1992] 2 FLR 388, 396, per Sir Christopher Slade.    [Back]

Note 63    “Fraud” would appear to include “actual” undue influence: see CIBC Mortgages Plc v Pitt [1994] 1 AC 200, 209, per Lord Browne-Wilkinson.     [Back]

Note 64    “Mistake” is difficult to establish, and will not enable parties who have failed to read the relevant documents and have signed them nevertheless to contend that they are not bound by their contents: Pink v Lawrence (1978) 36 P & CR 98.    [Back]

Note 65    Wilson v Wilson [1963] 1 WLR 601; Bedson v Bedson [1965] 2 QB 666; Pettitt v Pettitt [1970] AC 777, 813, per Lord Upjohn; Re John’s Assignment Trusts [1970] 1 WLR 955; Leake v Bruzzi [1974] 1 WLR 1528; Pink v Lawrence above; Goodman v Gallant [1986] Fam 106.    [Back]

Note 66    Goodman v Gallant above. See para 2.20 above.    [Back]

Note 67    Re Gorman (A Bankrupt) [1990] 1 WLR 616, 621, 623 - 624, per Vinelott J.    [Back]

Note 68    Harwood v Harwood [1991] 2 FLR 274, 288, per Slade LJ; Huntingford v Hobbs [1993] 1 FLR 736, 741, per Sir Christopher Slade; Mortgage Corpn v Shaire above, 752 - 3, per Neuberger J.    [Back]

Note 69    See, for example, Hembury v Peachey (1996) 72 P & CR D46 (nine-tenths/one-tenth shares).    [Back]

Note 70    Martin v Martin (1987) 54 P & CR 238; cf Joyce v Barker Bros (Builders) (1980) 40 P & CR 512.    [Back]

Note 71    City of London Building Society v Flegg above. See paras 2.53et seq.    [Back]

Note 72    Robinson v Robinson (1977) 241 EG 153, 155. Note, however, Roy v Roy (1991) [1996] 1 FLR 541, in which the Court of Appeal held that where title had been transferred into the names of purchasers “as joint tenants in law and equity”, pursuant to a conveyance which was executed only by the vendor, the burden fell on the purchaser seeking rectification of the register to establish that the parties’ intentions were not truly represented by the words of the transfer.    [Back]

Note 73    Law of Property Act 1925, s 53(1)(b).    [Back]

Note 74    Law of Property Act 1925, s 53(2).    [Back]

Note 75    Megarry & Wade, para 10-009; Snell’s Equity (30th ed 1999), paras 9-02et seq.     [Back]

Note 76    See further paras 2.81 et seq below.    [Back]

Note 77    Dyer v Dyer (1788) 2 Cox Eq 92.    [Back]

Note 78    SeeEnglish Private Law, P Birks (ed), paras 4.249-4.256.    [Back]

Note 79    Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 708, per Lord Browne-Wilkinson;Megarry & Wade, para 10-009.    [Back]

Note 80    R Chambers, Resulting Trusts (1997); P Millett, “Restitution and Constructive Trusts” (1998) 114 LQR 399, 401.    [Back]

Note 81    Megarry & Wade, para 10-009.    [Back]

Note 82    Thus it can itself be rebutted by evidence of contrary intention: Stock v McAvoy (1872) LR 15 Eq 55; Gross v French [1976] 1 EGLR 129; McGrath v Wallis [1995] 2 FLR 114, 122, per Nourse LJ. For a recent case where the presumption of advancement was not displaced, see Harwood v Harwood [1991] 2 FLR 274, 294, per Slade LJ    [Back]

Note 83    Bennet v Bennet (1879) 10 Ch D 474, 478, per Sir George Jessel MR; Sekhon v Alissa [1989] 2 FLR 94.    [Back]

Note 84    See Mercier v Mercier [1903] 2 Ch 98;Snell’s Equity, para 9-12.    [Back]

Note 85    Lowson v Coombes [1999] 1 FLR 799, cf Cantor v Cox (1975) 239 EG 121.    [Back]

Note 86    It has been discussed most recently in relation to transfers of property wholly or partly motivated by illegality: Tinsley v Milligan [1994] 1 AC 340. For proposals to modify current effect of illegality, see Illegal Transactions: The Effect of Illegality on Contracts and Trusts (1999) Law Com Consultation Paper No 154.    [Back]

Note 87    Pettitt v Pettitt [1970] AC 777, 793, per Lord Reid, 811, per Lord Hodson, 824, per Lord Diplock; see also Gissing v Gissing [1971] AC 886 at 907, per Lord Diplock.    [Back]

Note 88    McGrath v Wallis [1995] 2 FLR 114, 115, per Nourse LJ.     [Back]

Note 89    Written Answer, Hansard (HL) 21 April 1998, vol 588, col 197.    [Back]

Note 90    K J Gray & S F Gray, Elements of Land Law (3rd ed 2001) p 670.    [Back]

Note 91    Snell’s Equity, para 9-38.    [Back]

Note 92    The constructive trust has been employed in a multiplicity of situations, in many cases as a means of imposing a liability to account on a miscreant, although there has been a relatively steadfast refusal to develop constructive trusts as a purely remedial device. For example, where a trustee makes a profit as a result of being a trustee, in the absence of agreement to the contrary, the trustee is deemed to hold that profit on constructive trust for the beneficiaries of the trust. Likewise, where a vendor enters into a specifically enforceable contract for the sale of land, the vendor is deemed to hold the property on constructive trust for the purchaser. And in certain circumstances, the survivor of the authors of mutual wills will hold property on constructive trust for an intended beneficiary.     [Back]

Note 93    The “common intention” constructive trust is unusual in that in the cases listed above the constructive trust is imposed without regard to the parties’ intentions. The earlier major decisions are Pettitt v Pettitt above and Gissing v Gissing above.    [Back]

Note 94    [1991] 1 AC 107.    [Back]

Note 95    Ibid, 127, per Lord Bridge of Harwich.    [Back]

Note 96    Ibid, 132.    [Back]

Note 97    Ibid, 133.    [Back]

Note 98    [1975] 1 WLR 1338.    [Back]

Note 99    [1986] Ch 638.    [Back]

Note 100    And that of his brother.    [Back]

Note 101    This point is convincingly made by S Gardner, “Rethinking Family Property” (1993) 109 LQR 263, 265: “the fact that the men’s statements were excuses ... does not mean that the men were thereby acknowledging an agreement whereby the woman should have a share.”    [Back]

Note 102    Grant v Edwards [1986] Ch 638, 647, per Nourse LJ.    [Back]

Note 103    Ibid.    [Back]

Note 104    [1975] 1 WLR 1338.    [Back]

Note 105    [1991] 1 AC 107, 133.    [Back]

Note 106    Grant v Edwards [1986] Ch 638, 652, per Mustill LJ; Lloyds Bank Plc v Rosset [1991] 1 AC 107, 133.    [Back]

Note 107    Megarry & Wade, para 10-026.    [Back]

Note 108    Indeed there has even been scope for argument over whether a particular act is or is not referable to the acquisition of the property (see Winkworth v Edward Baron Development Co Ltd [1986] 1 WLR 1512, where the House of Lords held that a payment to reduce the overdraft of a company that had purchased a property used by the parties as their matrimonial home was not referable to its acquisition).    [Back]

Note 109    Grant v Edwards [1986] Ch 638, 657, per Sir Nicolas Browne-Wilkinson V-C.    [Back]

Note 110    [1975] 1 WLR 1338.    [Back]

Note 111    [1986] Ch 638.    [Back]

Note 112    Ibid, 656.    [Back]

Note 113    Ibid, 647.    [Back]

Note 114    [1986] 2 FLR 227, 237.    [Back]

Note 115    [1984] Ch 317.    [Back]

Note 116    [1971] AC 886.    [Back]

Note 117    Ibid, 905.    [Back]

Note 118    Ibid.    [Back]

Note 119    [1991] 1 AC 107.    [Back]

Note 120    Ibid, 132, per Lord Bridge.    [Back]

Note 121    See A Lawson, “The things we do for love: detrimental reliance in the family home” (1996) Legal Studies 218.    [Back]

Note 122    [1984] Ch 317.    [Back]

Note 123    Ibid, 331, citing Pettitt v Pettitt [1970] AC 777, 826, per Lord Diplock.    [Back]

Note 124    See, for instance, Gissing v Gissing [1971] AC 886, 904, per Lord Diplock (“whether spouse or stranger”). Although see footnote 140 to para 2.87 below.    [Back]

Note 125    [1986] 1 FLR 171.    [Back]

Note 126    See alsoLloyds Bank plc v Rosset, above, for another example of a wife whose non-financial contributions did not secure her a beneficial interest in the matrimonial home.    [Back]

Note 127    Gissing v Gissing [1971] AC 886, 906, per Lord Diplock; Bernard v Josephs [1982] Ch 391, 404, per Griffiths LJ; Austin v Keele [1987] 10 NSWLR 283, 290, PC, per Lord Oliver.    [Back]

Note 128    See Stokes v Anderson [1991] 1 FLR 391, cited with approval in Mortgage Corpn v Shaire [2001] Ch 743, 750, per Neuberger J.    [Back]

Note 129    [2001] 2 FLR 970, noted M P Thompson [2002] Conv 273.    [Back]

Note 130    [2001] 2 FLR 970, 973.    [Back]

Note 131    [1971] AC 886, 907 - 8.    [Back]

Note 132    See, eg, Crisp v Mullings [1976] 2 EGLR 103; Walker v Hall [1984] 5 FLR 126; Young v Young [1984] FLR 375; Springette v Defoe [1992] 2 FLR 388; Huntingford v Hobbs [1993] 1 FLR 736.    [Back]

Note 133    Midland Bank plc v Cooke [1995] 4 All ER 562; Drake v Whipp [1996] 1 FLR 826.    [Back]

Note 134    [1995] 4 All ER 562.    [Back]

Note 135    Springette v Defoe [1992] 2 FLR 388, 393, per Dillon LJ: Since... it is clear in the present case that there never was any discussion between the parties about what their respective beneficial interests were to be, they cannot, in my judgment, have had in any relevant sense any common intention as to the beneficial ownership of the property... The presumption of a resulting trust is not displaced.    [Back]

Note 136    [1995] 4 All ER 562, 574, per Waite LJ, following Gissing v Gissing [1971] AC 886, 908, per Lord Diplock and Grant v Edwards [1986] Ch 638, 657, per Sir Nicolas Browne-Wilkinson V-C.    [Back]

Note 137    There was evidence that the wife had assumed liability under the mortgage and that she had possibly effected improvements to the property, but neither seems to have been fully explored by the Court of Appeal. See note by S Cretney [1995] Fam Law 675.    [Back]

Note 138    Megarry & Wade, para 10-029.    [Back]

Note 139    [1996] 1 FLR 826.    [Back]

Note 140    It may be, as Megarry & Wade states at para 10-029, fn 78, that the fact that the parties in Cooke were married (but were not inDrake v Whipp) was a significant (and distinguishing) factor. See also Waite LJ in Cooke above, 576.    [Back]

Note 141    Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133, 148, per Oliver J; Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, 103, per Robert Goff J.    [Back]

Note 142    (1880) 15 ChD 96, 105 - 106.    [Back]

Note 143    (1) The claimant must have made a mistake as to his legal rights. (2) The claimant must have expended money or “done some act” on the faith of this mistaken belief. (3) The owner of the land must know of the existence of his own right which is inconsistent with the right claimed by the claimant. (4) The owner must know of the claimant’s mistaken belief. (5) The owner must have encouraged the clamaint in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right.    [Back]

Note 144    For example, where the claimant has made no mistake as to his or her legal rights, but has been encouraged by the owner of the land as to his or her future expectations.    [Back]

Note 145    Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265.    [Back]

Note 146    Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd above.    [Back]

Note 147    Gillett v Holt [2001] Ch 210, 225, per Robert Walker LJ.    [Back]

Note 148    Para 13-001.    [Back]

Note 149    Inwards v Baker [1965] 2 QB 29.    [Back]

Note 150    Griffiths v Williams above; Watson v Goldsbrough [1986] 1 EGLR 265; JT Developments Ltd v Quinn (1990) 62 P&CR 33.    [Back]

Note 151    Crabb v Arun District Council [1976] Ch 179.    [Back]

Note 152    Holiday Inns Inc v Broadhead (1974) 232 EG 951.    [Back]

Note 153    Dillwyn v Llewelyn (1862) 4 De GF&J 517, 45 ER 1285; Pascoe v Turner [1979] 1 WLR 431; Voyce v Voyce (1991) 62 P&CR 290; Durant v Heritage [1994] EGCS 134; Lim v Ang [1992] 1 WLR 113.    [Back]

Note 154    The grant of such a property right will not be retrospective, but will operate from the date of execution of the court’s order: Griffiths v Williams [1978] 1 EGLR 121, Williams v Staite [1979] Ch 291, 300.    [Back]

Note 155    See generally E Cooke, “Estoppel and the Protection of Expectations” (1997) LS 258, S Gardner, “The Remedial Discretion in Proprietary Estoppel” (1999) 115 LQR 438.    [Back]

Note 156    Watson v Goldsbrough [1986] 1 EGLR 265; Dodsworth v Dodsworth (1973) 228 EG 1115 (where C had expected to be allowed to occupy the property for life, the court was careful to avoid the creation of a strict settlement).    [Back]

Note 157    Burrows v Sharp (1989) 23 HLR 82.    [Back]

Note 158    [1979] 1 WLR 431.    [Back]

Note 159    See also, Crabb v Arun District Council above (where C was awarded a right of way over O’s land, the court did not require C to pay anything in return because O had rendered C’s land sterile for several years by its high-handed conduct).    [Back]

Note 160    Land Registration Act 1925, s 70(1)(g). It is thought that an equity arising by estoppel is a “right” which subsists “in reference to” the land for the purposes of the Land Registration Act 1925. But see now Land Registration Act 2002, s 116. See also Lee-Parker v Izzet (No 2) [1972] 1 WLR 775, 780, per Goulding J; Singh v Sandhu (unreported), 4 May 1995 (CA); Locobail (UK) Ltd v Bayfield Properties Ltd (unreported), 9 March 1999, Lawrence Collins QC; Lloyd v Dugdale [2001] EWCA Civ 1754; cf Haberman v Koehler (1996) 73 P &CR 515.     [Back]

Note 161    Voyce v Voyce (1991) 62 P & CR 290, 294, 296.    [Back]

Note 162    Inwards v Baker above; ER Ives Investment Ltd v High [1967] 2 QB 379, 400, 405; Lloyds Bank Plc v Carrick [1996] 4 All ER 630, 642.    [Back]

Note 163    Unlike direct financial contributions, these situations do not give rise to a resulting trust.    [Back]

Note 164    Dillwyn v Llewelyn (1862) 4 De GF & J 517, 45 ER 1285; Inwards v Baker above.    [Back]

Note 165    Crabb v Arun District Council above. See P Millett (1976) 92 LQR 342 refuting the contrary suggestion in P Atiyah (1976) 92 LQR 174.    [Back]

Note 166    Holiday Inns Inc v Broadhead above, 987. See also, Ramsden v Dyson above, 170; Plimmer v Wellington Corpn (1884) 9 App Cas 699, 713; Lee-Parker v Izzett (No 2) above.    [Back]

Note 167    The court is not bound to assess financial damages on a contractual basis, but maintains “a more flexible approach designed to achieve justice between the parties”: Baker v Baker [1993] 2 FLR 247, 258, per Roch LJ.    [Back]

Note 168   [2001] EWCA Civ 990.    [Back]

Note 169   [2002] EWCA Civ 159.     [Back]

Note 170    Per Robert Walker LJ: [The grant of a life interest to Mr Campbell] would produce a situation of a trust of land (under the Trusts of Land and Appointment of Trustees Act 1996) which would probably involve disproportionate legal expenses (including trustees’ remuneration) and might well lead to further disputes (especially in relation to Mr Campbell’s keeping the property in good repair and condition).    [Back]

Note 171    Grant v Edwards [1986] Ch 638, 656, per Browne-Wilkinson LJ.    [Back]

Note 172    [1991] 1 AC 107, 132.    [Back]

Note 173    Burrows v Sharp (1991) 23 HLR 82, 90, per Dillon LJ; Birmingham Midshires Mortgage Services Ltd v Sabherwal (2000) 80 P & CR 256, 263, per Robert Walker LJ;Yaxley v Gotts [2000] Ch 162, 176, per Robert Walker LJ.    [Back]

Note 174    D Hayton, “Equitable Rights of Cohabitees” [1990] Conv 370, 378.    [Back]

Note 175    Ibid, 385.    [Back]

Note 176    Lloyds Bank plc v Rosset above.    [Back]

Note 177    Gray & Gray at p 758.    [Back]

Note 178    Lloyds Bank plc v Rosset above at 132 - 3, per Lord Bridge.    [Back]

Note 179    Greasley v Cooke [1980] 1 WLR 1306; Re Basham [1986] 1 WLR 1498; Gillett v Holt [2001] above, 232, per Robert Walker LJ.    [Back]

Note 180    Jones v Watkins (unreported) 26 November 1987 (CA), cited in Gillett v Holt above, 226.    [Back]

Note 181   Megarry & Wade, para 13-028.    [Back]

Note 182    N E Glover & P N Todd, “The Myth of Common Intention” (1996) 16 Legal Studies 325.    [Back]

Note 183   S Gardner, “Rethinking Family Property”(1993) 109 LQR 263, 265.    [Back]

Note 184   Ibid, 264.    [Back]

Note 185    See, for instance, Le Foe v Le Foe above, para 2.79.    [Back]

Note 186   See paras 2.75 - 2.76 above.    [Back]

Note 187   See further White v White [2001] 1 AC 596 at para 5.10 below.    [Back]

Note 188   See at paras 2.83 - 2.84 above.    [Back]

Note 189    See paras 2.85 - 2.86 above.    [Back]

Note 190    See paras 2.101 - 2.104 above.    [Back]

Note 191   R Mnookin and L Kornhauser, “Bargaining in the Shadow of the Law: The Case of Divorce” [1979] 5 Yale LJ 950.     [Back]

Note 192    Hammond v Mitchell [1991] 1 WLR 1127, 1129, per Waite J     [Back]

Note 193    Ibid, 1139.    [Back]