Are the constructive trust rules affecting co-owned housing based on the common intention of the parties - Essay Example

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While there are several principles and methods for the imposition of the constructive trust the common intentions of the parties is specifically applicable to co-owned housing disputes. …
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Are the constructive trust rules affecting co-owned housing based on the common intention of the parties
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Download file to see previous pages First and foremost, intimate relations are based on trusts and this is particularly important where “individual autonomy” is ceded in reliance and trust on the perpetuation of shared goals and objectives.3 Secondly, the rules applicable to constructive trusts recognize that the intimate bond can be broken and equity will intervene to ensure that one party is not unjustly enriched to the detriment of the other.4 Thus the rules of constructive trust are designed to interpret and affect co-owned housing in circumstances where factual evidence contradicts the legally documented ownership of the house in question. The courts do not automatically interpret the mere existence of a relationship at time the house is acquired as evidence of co-ownership. The courts are guided by the concept of unconscionability and refer to the common intentions of the parties in determining what is conscionable or unconscionable. The main idea is to determine whether the common intentions of the parties are sufficiently made out to justify a claim to co-ownership against the legal title to real property.5 Thus it is argued that the rules of constructive trusts affecting co-owned housing are based on identifying the common intentions of the parties. This paper demonstrates how the courts have relied on the identification of the common intentions of the parties to determine whether or not it would be unconscionable to enforce ownership by reference only to the legal title. The first part of this paper therefore examines and analyses the doctrinal basis of constructive trusts and the second part of this paper demonstrates how the common intentions of the parties forms the basis by which co-owned housing is interpreted under the rules of constructive trusts. The Doctrinal Basis of Constructive Trusts The result of a court finding the existence of a constructive trust is twofold. First the court may order that one party compensate another or that one party “convey a particular right” to another.6 It is this characterization of the constructive trust that has given way to criticisms that the constructive trust is no more than a fiction created by the courts and is not comparable to an express trust. More specifically it is argued that the constructive trust is confusing and with an unclear doctrinal basis because it interprets entirely personal matters relative to property and thus does not follow a clear and concise doctrine.7 Despite the criticisms about the nature and doctrinal basis of the constructive trust, it is based on a sound doctrine: the equitable distribution of property.8 As Hudson explains, the constructive trust serves a practical purpose. It provides a means by which the courts may imply a trust so that “justice is done on the facts before” the courts “on the basis of preventing unconscionable conduct”.9 It therefore follows that constructive trusts are not based on a doctrine that facilitates random distribution of property. Rather, the constructive trust is applied “to ensure that an ethical notion of good conscience is maintained in English law.”10 The House of Lords puts the doctrinal basis of the constructive trusts in its proper perspective by noting the equity has always focused on the conscience.11 Hudson argues that constructive trusts are imposed: ...on the basis of the defendant knowing of some factor which affects her conscience in ...Download file to see next pagesRead More
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