England's dreaming equity, trust and conscience - alastairhudson.com

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Trusts of homesThe law on trusts of homes in Canada is based on a notion of unjust enrichment but itis a notion of unjust enrichment which includes within the enrichment receiving theservices of a housekeeper from a spouse which is deemed to be unjust if that spousedoes not receive an equitable interest in the home. These ideas of enrichment and ofinjustice in the Canadian law on the home are entirely different from the Englishnotion of unjust enrichment based on the list of unjust factors in the RestitutionResearch Resource.No comparator to proprietary estoppel – e.g. Baker v BakerUnjust enrichment in the English sense of the term (that is, without any meaningfulnotion of “injustice”) offer no comparator to proprietary estoppel. In proprietaryestoppel the claimant bases a claim on her detrimental reliance on the defendant’srepresentation. The remedies provided by proprietary estoppel are, seemingly, entirelyat the court’s discretion, and consequently can range from mere monetarycompensation through to transfer of the absolute title in land. A good example of whatequity is able to do through proprietary estoppel is given by Baker v Baker. In thatcase, an elderly man who needed sheltered accommodation more than he needed aproprietary right in the home he had bought with his son and daughter-in-law inTorquay, was awarded an amount of money adequate to acquire him an annuity to payfor that sheltered accommodation. English unjust enrichment has no mechanism eitherfor identifying an enrichment in the hands of the son and daughter-in-law, nor does ithave a mechanism to give that elderly man what he needs. Frankly, unjust enrichmentis not particularly good when it comes to helping people.The root of the problem…The root of the problem is the insistence of unjust enrichment theorists that the claimis based on an unjust enrichment. This is in truth a very brittle notion. Put simply, ifthe enrichment is earned by one person due to an unjust action perpetrated by adifferent person, then literally it seems that neither person can be liable for restitution.In company law terms, it would be comparatively easy to organise that one companyin a group makes the enrichment through the action of another group company. Thedoctrine of separate corporate personality would prevent both companies bearing theliability for one another’s involvement in the unjust act. So, how do we prevent anunconscionable benefit being taken by this group of companies? Answer: by using theequitable notion of unconscionability to hold that enrichment on constructive trust.Ultimately, it will always come down to a need for principles based on morality.Is there one doctrine of constructive trusts or are there many doctrines ofconstructive trusts?The trust itself is a fiction. We deem certain rights into existence. The company too.What is important is that we understand why these fictitious devices are said to comeinto being. Trusts and companies are not naturally occurring phenomena. Rather, theyare cultural phenomena. So it is pointless saying that constructive trusts are tooincoherent when the trust itself is an artificial construct.14www.alastairhudson.com | © professor alastair hudson
(B) BRIGHT-LINE DEVELOPMENT IN LLOYDS BANK V ROSSETThe retreat from Lord Bridge’s test in Lloyds Bank v RossetTo do this, let us consider the “bright-line development” which is suggested by LordBridge in Lloyds Bank v Rosset.The troublesome notion of common intentionGissing v. Gissing [1971] AC 886; [1970] 3 WLR 255Lloyds Bank v Rosset [1991] ACStack v Dowden [2007] UKHL 17, [2007] 2 WLR 831Cases only concerned with money: the balance sheet casesSpringette v. Dafoe (1992) HLR 552; [1992] 2 FLR 388Huntingford v. Hobbs [1993] 1 FLR 936Cases concerned to undertake a survey of the whole course of dealing: the familyassets casesHammond v. Mitchell [1991] 1 WLR 1127Midland Bank v. Cooke [1995] 4 All ER 562Cases concerned with avoiding unconscionability in general termsJennings v Rice [2002] EWCA Civ 159, [2003] 1 P&CR 100Cox v Jones [2004] 3 FCR 693, [2004] EWHC 1486Crossley v Crossley [2005] EWCA Civ 857Turner v Jacob [2006] EWHC 1317 (Ch)Cases concerned with fairness and with supplying the common intentionOxley v Hiscock [2004] 2 FLR 669, [2004] Fam Law 569, per Chadwick LJ:‘… what the court is doing in cases of this nature, is to supply or impute acommon intention as to the parties’ respective shares (in circumstances in whichthere was in fact no common intention) on the basis of that which, in the light ofall the material circumstances (including the acts and conduct of the parties afterthe acquisition) is shown to be fair … and it may be more satisfactory to acceptthat there is no difference in cases of this nature between constructive trust andproprietary estoppel.’Drake v Whipp [1996] 1 FLR 826Thompson, ‘Constructive trusts, estoppel and the family home’, (2005) Conv. 1Gardner (2004) 120 LQR 541.Hudson, Equity & Trusts, 2007, p. …Stack v Dowden [2007] UKHL 17, [2007] 2 WLR 831The problem with this test in Oxley is that it is pointlessly fictitious. This is not a testbased on common intention at all. The court is not looking for the parties’ commonintention – i.e. a meeting of minds which only the parties themselves can reach – butrather is supplying that common intention. The court is making that common intentionup.15www.alastairhudson.com | © professor alastair hudson
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Page 24 and 25: THE LEGAL CONSCIENCEIs it possible
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England's dreaming equity, trust and conscience - alastairhudson.com

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