Common Core and Property Law - Essay Example

?Property Law Angelina Issue To evaluate Angelina’s share in the property owned jointly with her husband. Whether she would have any right, if the property were to be registered only in her husband’s name. Facts The property in question had been jointly registered in the names of Angelina and her husband Brad. Analysis The Matrimonial Proceedings and Property Act 19701 declares that if a spouse contributes a substantial amount of money or money’s worth to the improvement of real or personal property, then that person acquires a share or an enlarged share in the said property.2 In our problem, Brad has made a contribution of ?360,000 by raising a mortgage amount from the Solent bank. This mortgage amount was with a joint responsibility with his father. Under the provisions of the Law of Property Act 1925, beneficial owners can obtain a court order for putting the trust into effect and directing sale of the property and thereafter division of the sale proceeds. With regard to house properties, the share of the parties will in general be 50% each, due to their joint ownership of the property. However, the court could refuse to grant sale order, if the reason behind the creation of the trust persists. 3 In Midland Bank v Cooke, 4 the Court of Appeal granted a half share to the defendant in the matrimonial home. In the absence of an express agreement, the court opined that the conduct of the parties would be examined in order to determine the intended share of each party. 5 In Stack v Dowden, the House of Lords held that in disputes where the family property was in joint names and in the absence of an express declaration regarding ownership, a beneficial joint tenancy could be presumed.6 Since, the defendant had provided 65% of the amount; Stack was entitled to 35% of the proceeds of the sale.7 In Jones v Kernott, the UK Supreme Court upheld the trial court’s grant of 90% of the property’s sale proceeds to the plaintiff. The defendant, after separation from the plaintiff, had contributed nothing towards the family home or their children.8 Joint ownership of land or a house by two or more individuals automatically generates a trust of land, due to the operation of the law. As a consequence, anyone of these persons can move the court, in order to procure an order for sale of the property. It is left to the court to defer the sale if it were of the opinion that such sale would be contrary to the purpose for which the property had been purchased. 9 In the UK common ownership of property is not transferred automatically between the parties to a marriage. Automatic transfer takes place, only if the parties consent to place the concerned property in their joint names. Such joint ownership can be of the following categories. First, joint tenancy, wherein the survivor of the married couple automatically inherits the share of the deceased spouse. Second, tenancy in common, in which the share in the property is transferred as per the will of the deceased spouse or as per the rules of intestacy.10 As such on the death of a spouse, the remaining spouse automatically derives a portion of the deceased spouse’s estate provided the property is held jointly by them. On the satisfaction of the Spouses Legal Right Share, children and issue become entitled to a share in the property, after the intestate death of a person. In Abbott v Abbott the court granted 50% of the sale proceeds to the wife, as the couple had undertaken joint liability with regard to the repayment of the mortgage on the property. In addition, this husband and wife had arranged their finances entirely in a joint manner.11 The existence of a will executed by the deceased has a significant effect on the legal right of the remaining spouse or children. However, with regard to non – marital cohabitees, there is no such automatic entitlement, unless there is a specific benefit under a will. Conclusion Since Angelina holds the property, jointly with her deceased husband, she will receive half the share of the property, after meeting obligations and liabilities, such as contributions by Brad’s father and aunt. The children’s necessities will also be taken in to consideration while deciding these issues by the court. However the situation would be different if Brad holds the property individually. In that case, Angelina will not get a share in the property, automatically. Evidence of indirect contribution is not sufficient, by itself, to establish a beneficial interest in the property. Its importance is limited to the fact that there is common understanding or agreement in respect of ownership of the property. 12 As such, Angelina cannot get a share in her deceased husband’s property unless she can establish common understanding with her husband, relating to the ownership of the property. Erica Issue Erica’s chief concern is that she would be rendered homeless. Her entitlement is to be determined. Facts Erica at the behest of Brad and Angelina sold her house and commenced to live with the latter. She had been told by this couple that she could stay with them till the end of her life. Analysis In Lloyds Bank plc v Carrick, 13 the defendant induced his sister – in – law to sell her home, pay the proceeds to him and commence to reside in the property that he had taken on lease. The defendant failed to transfer the lease to her, as promise by him. The title to the property was unregistered, and the defendant charged it to the plaintiff. However, while doing so, the defendant failed to notify the plaintiff bank that his sister – in – law was occupying the property. 14 The plaintiff initiated legal action for obtaining possession of the charged property. The court ruled that as the sister – in – law had provided the purchase price to the defendant, she was a bare trustee. This prevented the court from surmising that there was a common intention constructive trust. She had no rights over the property as the lease had not been registered in her name.15 In Griffiths v Williams, a mother had assured her daughter that the latter could live in the former’s house for her entire lifetime. The Court of Appeal ruled that this assurance created estoppel equity.16 The extent of a party’s beneficial interest in a property to whose purchase it had contributed was determined by the court in Oxley v Hiscock. In this case, an unmarried couple had acquired a house in the name of the man. The woman had contributed towards the purchase price. The court established a common intention in her act that gave rise to a constructive trust, instead of just a resulting trust. As a result, she was awarded a 40% share in the property, despite having contributed just 20% of the cost.17 In Hassey v Palmer, the court stated that a constructive trust could be imposed, whenever justice and good conscience were in its favour.18 Thus, in our problem, Erica had been induced by Brad and Angelina to sell her properties and stay with them for rest of her life. Relying on their assurance, Erica sold her properties and started to live with them. An important principle associated with such issues is that of proprietary estoppel. This arises, whenever a person expresses the intention of conveying the right in a property to another, but fails to do so. Thereafter, the other individual relies on this intention or promise and expends money or acts to his detriment. As such, is should be unconscionable to desist from implementing the expectation. This was demonstrated in Inwards v Baker, wherein a son relied on his father’s work to build a house on the land belonging to the latter. Although, the father failed to transfer the said land to his son, the court held that the son could not be evicted from that land.19 Thus, proprietary estoppel emerges from situations in which an individual induces another to assume that he is bestowing upon him rights over his party. Thereafter, the other person relies upon this inducement to act in a detrimental manner. 20 In trusts of the express, resulting and constructive types, interest is created by the parties themselves. This is not the case with proprietary estoppel, which permits an equitable remedy that on occasion enables a party to obtain an interest in the property. Estoppel is founded on the notion that if a party makes a representation that is relied upon by another to his detriment, then the party making the representation cannot deny it a later date. 21 Proprietary estoppel comes into play, when an individual relies upon the assurance of another to act in a detrimental manner. In addition, the detrimental reliance should be sufficiently substantial to attract relief. In Gillett v Holt and Another, the claimant had relied upon the assurance provided to act in a detrimental manner. Accordingly, the Appellate Court permitted the appeal in the main action.22 The court examined the irrevocability of the assurance, detriment, and mutual understanding and reliance. In its ruling, the court deemed it adequate if there was some detriment; and if the claimant had relied upon the promise that would render it unconscionable for the promissor to be released from the promise. In this case, Holt had assured Gillett, when the latter was a child, of a share in the property. He was persuaded to discontinue his studies and work on Holt’s farm.23 The Court of Appeal considered this to be sufficient detriment, as Gillett had foregone the opportunity to educate himself and make alternate provisions. Conclusion Erica at the behest of Brad and Angelina sold her house and commenced to live with the latter. As per the court decisions, she will have the right to stay in the family home and so she cannot be evicted by the other members. In this regard, she can approach the court for redressal. Charles Issue Whether Charles has any interest in the property. Facts Brad’s father Charles had provided the former with monetary assistance to the extent of ?40,000 towards the purchase of the house. Moreover, he had executed a mortgage in respect of the purchased house to an extent of 3, 60,000 along with his son Brad. Analysis A presumed resulting trust arises, whenever a direct contribution is made towards the purchase price of land or property. This resulting trust will ostensibly be proportionate to amount contributed. Thus, in Tinsley v Milligan, the cost of a house was paid via a mortgage raised on the house and the proceeds of the sale of a car jointly owned by the lesbian couple who had purchased the house. It was held by their Lordships that the direct contribution of 50% of the deposit generated a presumption of a resulting trust in favour of Milligan to the extent of a half share in the said house.24 In Goodman v Gallant, the court held that unless there was a declaration of express trust, the party desirous of establishing an interest had to rely on the law pertaining to constructive or resulting trusts.25 Similarly in our problem Brad’s father Charles had made direct contributions to the purchase of the house by his son. This has created a resulting trust in favour of Charles. This issue has made Charles eligible for a share in the property, in proportion to his contribution. Conclusion Brad’s father Charles had provided the former with monetary assistance to the extent of ?40,000 towards the purchase of the house. Moreover, he had executed a mortgage in respect of the purchased house to an extent of 3, 60,000 along with his son Brad, As such there can be a presumption of a resulting trust and Charles is eligible for a share proportionate to the contributions made towards the purchase of the house. Jennifer Issue Whether Jennifer enjoys any right in the property and whether she can compel a sale. Facts After the birth of his second child, Brad had developed a relation with Jennifer and started to live with her. Brad had named her as his beneficiary in his will along with his children. Analysis Unmarried couples do not enjoy the same rights as married couples, with regard to maintenance or their partner’s property. Thus, each partner retains their individual property whilst the jointly owned property has to be divided between the partners. 26 As such, either of the partners can compel sale of the property, in order to realise their share. In the event of the parties having contributed unequally to the purchase of the property, the exact shareholding should be specified and these parties are designated as tenants in common.27 In instances, where the property stands in the name of just one of the parties, the other party does not derive a share in such property unless it can proved that there had been a common intention to provide that party with a share in the property.28 In Grant v Edwards, the Court of Appeal held that the claimant was entitled to half the sale proceeds, due to the common intention to include the claimant’s name in the title deeds.29 In Drake v Whipp, the trial court granted the plaintiff just 19%, whereas the Court of Appeal held that a constructive trust had come into being on account of the common intention. Hence, the plaintiff’s share was increased to a third.30 However, in our problem, there is no need to prove common intention on the part of Jennifer, as Brad had bequeathed half of his share to her. Under the Trusts of Land and Appointment of Trustees Act (TOLATA) 1996, a right of occupation in a property is bestowed upon a person with a beneficial interest in that property. The courts are empowered to regulate this right and even prevent the sale of such property. 31 Section 15 of the TOLATA specifies the various factors that are to be considered by the court, while deciding whether property is to be sold. These are; first, the intentions of the creators of the trust. 32 Second, the purpose for which the said property had been held under the trust. Third, the welfare of any child that either occupies the property in question or who could be reasonably expected to occupy the property, as its home. Fourth, the interests of secured creditors of the beneficiaries. Fifth, the circumstances and wishes of adults who are entitled to an interest in possession. 33 Conclusion Jennifer cannot get a share automatically. She is not the wife of Brad, and is only a living partner of Brad. In the UK cohabitees cannot inherit the estate of the deceased partner. Since Brad had executed a will in favour of Jennifer she can have a claim over the estate of Brad to the extent of her bequeathed share. However she cannot compel sale of the property, as per the discussion and case laws examined above. The court will consider issues like liabilities, such as mortgages, contributions and dependent children before making order for sale. List of References Abbott v Abbott Privy Council Appeal No 142 of 2005. Boele – Woelki, K., 2005. Common Core and Better Law in European Family Law. Intersentia nv. Cohabitees – your rights [online] Available at: [Accessed 24 April 2012]. Constructive Trusts [online] Available at: [Accessed 24 April 2012]. Drake v Whipp (1996) 1 FLR 826. Gillett v Holt and Another [2000] EWCA Civ 66. Global Property Guide, 2011. Inheritance tax and law [online] Available at: [Accessed 24 April 2012]. Goo, S.H., 2002. Sourcebook on Land Law. 3rd ed. Routledge. Goodman v Gallant [1986] Fam 106. Grant v Edwards [1986] EWCA Civ 4. Gray, K, and Gray, S.F., 2007. Land Law. Oxford University Press. Griffiths v Williams [1978] 2 EGLR 121. Hassey v Palmer [1975] 1 WLR 1338. Hitchings, E., ‘Cases Edited by Emma Hitchings Stack v Dowden’, Journal of Social Welfare & Family Law, vol. 28, no. 1, pp. 171 – 190. Hudson, A., 2008. Understanding Equity & Trusts. Taylor & Francis. Inwards v Baker [1965] 2 QB 29. Jones v Kernott [2011] UKSC 53. Law on the Web, 2012. Cohabitation (Living Together Unmarried) [online] Available at: [Accessed 24 April 2012]. Law of Property Act 1925. Lloyds Bank plc v Carrick [1996] 4 All ER 630. Matrimonial Proceedings and Property Act 1970. Midland Bank v Cooke [1995] 4 All ER 562. Oxley v Hiscock [2004] 3 WLR 715. Stack v Dowden [2007] UKHL 17. Thomas, M., 2006. Blackstone's Statutes on Property Law 2006 – 2007. Oxford University Press. Tinsley v Milligan [1993] UKHL 3. Trusts of the family home [online] Available at: [Accessed 24 April 2012]. Trusts of Land and Appointment of Trustees Act 1996. Unmarried Couples Guidance [online] Available at: [Accessed 24 April 2012]. Watt, G., 2007. Todd and Watt’s Cases and Materials on Equity and Trusts. 6th ed. Oxford University Press. Wilson, S., 2007. Todd & Wilson's Textbook on Trusts. Oxford University Press. Read More