CONSTRUCTIVE TRUST OR PROPRIETARY ESTOPPEL CHOOSE YOUR WEAPON Copyright Jane Drew. February 2005 - All rights reserved. No part of this document may be copied or used without the written permission of the author.

·        It is often difficult to define the way through a tangle of cases concerning the beneficial rights in property of unmarried couples. 

 1.   IS THE PROPERTY IN JOINT NAMES?

 2.   IS THERE ANYTHING IN WRITING?

·        The first question to consider is was there an express agreement?

·        Is it recorded on the face of the Land Registry TR1? (Post 1998)?

      The standard forms of transfers give 3 boxes to tick, depending on whether the property was to be held as joint tenants, tenants in common in equal shares or otherwise as specified by the joint proprietors.

      It is the writers view that once the box is ticked an express trust of land is created which will comprehensively declare the beneficial interests in the property and its proceeds of sale unless and until it is varied by those who are competent to vary it, or it is rectified or set aside on the grounds of fraud or mistake.

·        If the TR1 is pre-1998 are there any other clues from entries appearing on the Official Copy of the Register?

·        Tenancy in Common restriction:

“No disposition by one proprietor of the land (being the survivor of joint proprietors and not being a trust corporation) under which capital money arises is to be registered except under order of the Registrar or of the court”.

·        No tenancy in common restriction.

·        If there is an agreement reached between the parties and effectively recorded in writing (as by a declaration of trust contained in the conveyance or in a separate document) that will prevail until is varied.

·         In unregistered conveyancing the declaration of beneficial interests on the face of the conveyance is incapable of variation in the absence of fraud or mistake: see Goodman v Gallant [1986] 1FLR 513

·        Look very carefully at any documentary evidence such as the conveyancing file or any contemporaneous notes, letters or court papers- e.g. Children Act 1989 statements.

 

IF THE PROPERTY IS IN ONE NAME ONLY OR IF THERE IS NO EXPRESS DECLARATION OF TRUST

 

IF THERE IS NOTHING IN WRITING DID THE CLAIMANT MAKE A CONTRIBUTION?

 

·        (a) Resulting Trust.

·        Where a property is purchased in one name alone with contribution to the purchase price from both or more than one party, a resulting trust will be presumed to effect the inferred common intention that the parties should share in the equity of the property in accordance with their contribution: see Pettit v Pettit [1970] Appeal Cases 777 and Gissing v Gissing [1970] 3 WLR 355.   

·        Where therefore property is acquired with contributions from other parties than the legal owner this is always the first possibility where there is no written declaration. See Lowson v Coombes [1999] 1 FLR 799.  

     A decision to register the property in the name of the cohabitant to avoid a claim by a wife (which was never made) did not deprive a husband from a declaration that he was the beneficial owner of the property occupied by the cohabitant.   

·        This Court of Appeal case approved and followed the case of Tinsley v Milligan [1993] 2 FLR 963 and distinguished the case from Tinker v Tinker [1970] 2 WLR 331. 

·        See Carlton v Goodman [2002] 2FLR 259.

     G and C acquired the property in joint names. No discussion or agreement between them about beneficial interest. Apart from joining in the mortgage application and signing contract, C took no part in conveyancing and did not pay anything to property at the time or the mortgage until G died. HELD C held on trust for G’s estate subject to equitable accounting for payments made after G’s death.      

  Continued