Land Law Common Intention Constructive Trusts Summary
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Course
Land Law
Institution
University Of Oxford
Detailed and comprehensive Summary of topic: Common Intention Constructive Trusts. Includes cases, legislation, main rules and academic opinions.
Essential!!
Notes: Common Intention Constructive
Trusts
Express Declaration
Express declaration of trust is conclusive: Goodman v Gallant (case approved in Stack v
Dowden)
Common Intention Constructive Trusts
Joint Names: where A and B are co-owners of the relevant interest i.e. joint tenants at law
Single Names: where just one party holds the relevant interest
Onus is always on the party trying to show that the equitable interests are different from the
legal interests: Stack; Jones
Joint Names
o Starting Point: A and B are joint tenants in equity (or tenants in common in equal shares)
o In both Stack and Jones their Lordships asserted that starting was an equitable joint
tenancy, at least if the parties are a couple in an intimate relationship occupying a
property as a home
No support for starting point necessarily being a joint tenancy in equity
rather than a tenancy in common
i.e. friends purchase house together
1. First Question: did the parties have a common intention that is inconsistent with the
starting point (and did one of the parties rely to his detriment (Controversial point)?
o Can have a common intention at the time of purchase or subsequently (Jones v
Kernot)
o May be inferred or express (Stack; Jones), but may not be imputed (Jones)
o Assessed objectively: “the relevant intention of each part is the intention which was
reasonably understood by the other party to be manifested by that party’s words
and conduct” (Gissing Lord Diplock)
o Relevant factors for inference (Stack Baroness Hale [69]):
i. Advice or discussions at time of transfer
ii. Reason why property was acquired in joint names
iii. Purpose for which property was acquired
iv. Nature of the parties’ relationship
v. Whether they had children
vi. How the purchase was financed
vii. How the parties arranged their finances
viii. How they dealt with expenses
o Stack: cases where parties intended different equitable interests will be rare
2. Second Question: If so, what is the nature of their respective equitable interests?
a. Did the parties have an actual common intention, express or inferred, as to the
shares?
, b. If not, each party is entitled to that share which the court considers fair having
regard to the whole course of dealing between the parties ( Jones v Kernot)
o Take a broad approach to ‘whole course of dealing’ including considering
factors relevant for inference at first stage: Jones v Kernot Lord Walker and
Baroness Hale
Stack v Dowden [2007]
D and C purchased house in joint names, 65% of purchase price came from D and the
balance came from joint mortgage; parties kept separate financial affairs
Held: joint names prima facie legal and beneficial interests equal; onus lay with party seeking
to establish that equity should not follow the law: needed to prove common intention that
beneficial interests be different from legal interests; look at whole course of conduct
o On facts: factors were strongly indicative that the parties had not intended their
shares in the property to be equal; D has 65% share
Lord Walker: abandon resulting trust; “I am now rather less enthusiastic about the notion
that proprietary estoppel and ‘common interest’ constructive trusts can or should be
completely assimilated”; proprietary estoppel = asserting equitable claim against true owner,
satisfied by minimum equity necessary to do justice; common intention constructive trust =
identifying true beneficial owners and size of interests
Baroness Hale: “the presumption of resulting trust is not a rule of law”, law has moved on
from resulting trust: “The search is to ascertain the parties’ shared intentions, actual,
inferred or imputed, with respect to the property in the light of their whole course of
conduct in relation to it”; “many more factors than financial contributions may be relevant to
divining the parties’ true intentions”; cases in which parties intend beneficial interest to be
different will be unusual; on facts: “very unusual case”
Lord Neuberger (dissents): “… the law of resulting and constructive trusts is flexible enough
to deal with problems such as those thrown up by cases such as this, and it would be a
disservice to the important causes of certainty and consistency if we were to hold
otherwise”; “intention may be express (although not complying with the requisite
formalities) or inferred, and must normally be supported by some detriment, to justify
intervention by equity. It would be in this way that the resulting trust would become
rebutted and replaced, or (conceivably) supplemented, by a constructive trust”; no imputed
intention – contrary to Gissing, uncertain and subjective
Jones v Kernott [2011]
C and D purchased property in joint names; C contributed part of purchase price with
balance from mortgage and D also paid for some household expenses; parties separated; C
remained in property and paid mortgage; D and C cashed in life insurance policies, enabling
D to buy home of his own
Held: starting point for family home in joint names ‘equity follows the law’; search for actual
intentions, objectively assessed; when clear had intention to have different shares but not
clear what shares: could impute intention
o On facts: possible to infer that after D left the property parties formed a new plan
such that D’s interest in the property crystallised; C would have sole benefit of any
capital gain in joint property
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