TRUSTS OF LAND AND PROPRIETARY ESTOPPEL ... - Support

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TRUSTS OF LAND1. In both life and death 1 disputes commonly arise regarding the beneficial interest inland. We are concerned here with a party claiming as against a sole proprietor abeneficial interest in land, or, in respect of co-ownership, disputes regarding theirrespective shares. In either case, the matter is resolved by reference to express orimplied (i.e. a constructive) trusts.The Express Trust2. Parties often record the beneficial interests in land in signed writing 2 pursuant toLaw Property Act 1925 s53(1)(b). Indeed, it is well settled that unless rescinded onthe grounds of fraud or mistake, or rectified, such written declarations of trust areconclusive as between the parties for all time, and the court will not consider parolevidence to contradict it 3 .3. It has been suggested however that a declaration of trust could be subject tovariation by subsequent agreement (perhaps even an informal agreement) orproprietary estoppel 4 .The Implied Trust4. In the absence of such a declaration, a common intention constructive trust willneed to be established.5. The law since Lloyds Bank plc v Rosset 5 has “moved on”, and the modernapproach of the Court is now governed by the opinion of Baroness Hale in Stackv Dowden.1 Contentious matters concerning co-ownership of land sometimes arise only on death. These are not dealtwith in this paper, but include: (1) whether a beneficial joint tenancy had been severed before death; (2)whether a severable half share should be ordered to retained by the deceased co-owner’s estate pursuant tos9 of the Inheritance (Provisions for Family and Dependants) Act 1975 or under s421A of the InsolvencyAct 1986; and (3) whether, upon the death of a tenant in common, the property ought to be sold.2 Commonly achieved by filling in the appropriate boxes on the TR1 form or by separate declaration oftrust.3 Pettitt v Pettitt [1970] AC 777; Gissing v Gissing [1971] AC 886; Goodman v Gallant [1986] Fam106; Huntingford v Hobbs [1993] 1 FLR 736; Stack v Dowden [2007] 2 AC 432.4 See Lewin on Trusts, 18 th Ed., Para 9-55; and Stack v Dowden at para [49]2
6. Baroness Hale explained that the task for the Court is“…to ascertain the parties’ sharedintentions, actual, inferred or imputed, with respect to the property in light of their whole course ofconduct in relation to it.” 6 For these purposes she endorsed the adoption of a “holisticapproach”, undertaking a survey of the whole course of dealing between the partiesand taking account of all conduct which throws light on the question what shareswere intended 7 .7. In divining that common intention, the majority of the House of Lords were ofthe view that, at least in the domestic context 8 , the resulting trust analysis does notoperation as a starting legal presumption. It was said: “Many more factors thanfinancial contributions may be relevant to divining the parties' true intentions” 9 , “although it may(in an updated form which takes account of all significant contributions, direct or indirect, in cashor in kind) happen to be reflected in the parties’ common intention.” 108. Instead, the starting point is the presumption that equity follows the law, asBaroness Hale explained 11 :“Just as the starting point where there is sole legal ownership is sole beneficial ownership,the starting point where there is joint legal ownership is joint beneficial ownership. Theonus is upon the person seeking to show that the beneficial ownership is different from thelegal ownership. So in sole ownership cases it is upon the non-owner to show that he hasany interest at all. In joint ownership cases, it is upon the joint owner who claims to haveother than a joint beneficial interest.”9. There are thus two hurdles to overcome: “first, was it intended that the parties shouldshare the beneficial interest in a property …; and second, if it was so intended, in whatproportions was it intended that they share the beneficial interest?” 125 [1991] 1 AC 1076 Para [60]7 Para [61]8 i.e. in respect of matrimonial or quasi-matrimonial property. However this phrase is not limited to claimsbetween co-habitees in a sexual relationship, but can extend to other domestic relationship, such as motherand son: Adekunle v Ritchie, unreported, 17th August 2007 (Leeds County Court, John Behrens QC)9 Baroness Hale at Para [69]; and see also her opinion in Abbott v Abbott [2007] UKPC 53 at Para [4].10 Lord Walker at Para [31], who described his authoritative opinion as an ‘extended footnote’ to that ofBaroness Hale. It was on this point that Lord Neuberger gave a dissenting opinion.11 at Para [56]12 As set out by Baroness Hale in the later case of Abbott v Abbott at Para [4].3
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