Equity and Trusts - Lecture 8: Constructive Trusts and Family Home

Overview

• Focus on constructive trusts related to family homes.
• Distinction between sole name and joint names cases.
  • Sole name: One legal owner, co-owner seeks to establish interest.
  • Joint names: Property conveyed into joint names; presumption of joint tenancy in equity.

Key Legal Principles

• Equity follows the law: Presumption of joint tenancy applies if property is in joint names.
• Presumption in Joint Names Cases:
  • Beneficial interest presumed to follow legal ownership.
  • Strong presumption in favor of equal ownership regardless of financial contributions.

Key Cases

Stack v Dowden

• Key case setting the approach for joint names.
• Financial contributions don't automatically dictate share proportions.
• Presumption of equitable joint tenancy; dissension from Lord Neuberger.

Jones v Kernott

• Illustrates change in common intention over time.
• Ms. Jones contributed deposit and lived in property; Mr. Kernott moved out.
• Supreme Court upheld 90-10 split favoring Ms. Jones, recognizing change in common intention.

Adekunle v Ritchie

• Joint purchase by mother and son.
• Court found a 1/3 beneficial interest for son.
• Stack approach could apply but easily rebutted if parties' finances are separate.

Laskar v Laskar

• Joint purchase by mother and daughter for investment not family home.
• Stack presumption does not apply; joint enterprise should expect shares based on contributions.

Marr v Collie

• Long-term relationship with joint property investments.
• Privy Council argued search for intention is key, not solely context (commercial vs. domestic).

Rebutting the Stack Presumption

• Scenario 1: Different intention from the outset.
  • Stack v Dowden: Unequal financial contributions were evidence of separate intention.
• Scenario 2: Change in common intention over time.
  • Jones v Kernott: Demonstrated change after financial settlement and living arrangements.

Additional Cases

• Fowler v Barron: Difficult to rebut presumption even with unequal contributions.
• Ellithorne v Poulter: Large financial contributions not enough to rebut presumption.
• Tandon v Tandon: Written declaration of trust, even unexecuted, can rebut presumption.

Conclusion

• Stack presumption applies mainly in family contexts; clear intention is key.
• Key Points Recap:
  1. Conveyance into joint names presumes joint equitable ownership.
  2. Unequal contributions insufficient to rebut presumption.
  3. Rebut presumption by showing different initial intention or change over time.
  4. No presumption in purely commercial contexts; shares follow contributions.
  5. In mixed domestic and commercial contexts, intention remains critical.

Next Steps

• Future lectures will focus on resulting trusts, constructive trusts, and estoppel claims.