A Common Intention Trust in the Oxley vs Hiscock - Case Study Example

 The case of “Oxley v Hiscock” The case of Oxley v Hiscock1 is a significant one in that it establishes the fact that a common intention trust is a strong basis for distribution of assets under a trust, however such allocations are to be made on the basis of proportionate representation through investment. In this way, it is therefore a good development because it helps to establish the division of the assets in a trust with a greater degree of fairness. It has also been helpful in establishing the need for fairer distributions of assets of trusts which must take into account the changing social equations of the day, where the traditional institution of marriage has begun to shed its conventional form and cohabitation has become more common. In the case of disputes over shared property, the case of Oxley v Hiscock has served to consolidate the principles of the common intention trust and the extent of proprietary estoppel that may be exercised by the contending parties. Summary of the case: The case concerned a couple Ms Oxley and Mr. Hiscock, in reference to a property that was purchased by them, to which Ms Oxley had contributed about a 35% share while the major burden of the investment was borne by Mr. Hiscock out of his own savings and the proceeds of another home they had owned together. Ms. Oxley and her children lived in the new home with Mr. Hiscock and the couple had cohabited together for many years, although the sole title owner was Mr. Hiscock. This was a case in which no trust declarations had been made, however there was evidence available to lead to an inference of common intention for both parties to enjoy beneficial shares in the property, although the extent of these beneficial shares were not specified. At the lower Court, the Judge found evidence to indicate the existence of a common intention trust and inferred an equal beneficial share in the property. However, this was appealed by Mr. Hiscock on the grounds that he had made a larger contribution to the property in question and allocating the beneficial interests on an equal 50:50 basis was unfair to his interests. At the Court of Appeal, the Court examined the issues and framed two salient issues to be examined where there is no express declaration of trust: (a) the existence of a common intention trust based upon the expressed intent of the parties to share beneficial interests and (b) the extent of the beneficial interests that could be attributed to each party. In arriving at its determination, the Court also examined the case of Springette v Defoe2, where the proceeds of a sale had been allocated in proportion to the investment made by the parties in the property. When a party does not assume legal ownership of a property, he or she will be construed to have acted in his/her own detriment, in making contributions based upon a common intention and therefore the beneficial interests of such parties was also to be preserved3. The Court therefore stated that in determining beneficial interests it was important to take into account the “whole course of dealing” in regard to the property, including all contributions such as mortgage payments or expenses incurred on the property for maintenance, etc rather than merely the purchase price and based upon what would be considered fair after taking all factors into consideration, the Court should arrive at its decision. On this basis, the beneficial shares in the case of Oxley v Hiscock were set at 40% to Ms Oxley and 60% to Mr Hiscock. The importance of this case: One of the salient aspects raised by this case is the issue of cohabitation, and the rights accruing to partners under this arrangement, especially where traditional institutions of marriage are disappearing and where common intention trusts must be inferred3a. Under traditional marriage institutions, a wife is entitled to beneficial interests in a property which may have been purchased entirely by her husband, however in the case of Oxley, Judge Chadwick held; “It does not follow from the fact that parties live together in a house that they both regard as their home that they share the ownership of that house equally.”4 It is in regard to the distribution of beneficial interests that the case has established an important precedent, that each party will have a share in accordance with what is fair as per their entire dealings on the property. For example, in the case of M v M5 which involved a marital relationship, the man was the sole breadwinner while the woman was the one with the sole responsibility for bringing up the children, one of whom had special needs. However, the Court held that in a distribution of assets after their separation, the common intention trust when evaluated from the perspective of the parties’ entire dealings in regard to the property, attributed an equal importance to the wife’s contribution in taking care of the children. Therefore, the Court ordered an equal distribution of their assets with neither party being entitled to a larger share. In the case of Cox v Jones however, Jones owned both properties of the couple, a flat and a mill, but while distributing the assets on the basis fo a common intention trust, the Court awarded Miss Cox the flat and a one fourth beneficial share in the mill in consideration of her evidence regarding the entire dealings on the property. The case of Oxley has also corroborated the fact that the expression of intent will constitute the formation of a common intention trust. “The finding of an agreement to share …can only…be based on evidence of expressed discussions between the parties, however imperfectly remembered and however imprecise their terms may have been.”6 In the case of Crossley v Crossley, the question was to determine the existence of a common intention trust to transfer beneficial interest in a property between a mother and her son. Peter Gibson relied upon the statement of Chadwick L.J7 that where joint title existed, a common intention trust granting beneficial interest could be taken for granted.8 He also clarified that a Court will support the distributions under a common intentions trust – “where the parties have reached a consensus on the beneficial interests of a property, the court will give effect to it…”9 However, the most important evidence that served to establish the existence of a common intention trust was the father’s words to the effect that all of it would belong to the son some day. Thus, in conclusion it may be stated that the case of Oxley is a good development in common intention trusts because it has served to establish common tenancies in unequal shares, and also a distribution of assets in terms of unequal shares that will be determined on the basis of each party’s contribution and role in regard to the entire dealings on the property. Bibliography * Craig, Jane, 2004. Family case briefing [online] Available at: http://www.manches.com/text/practices/family/article.php?id=44 * Crossley v Crossley (2005) EWCA * Lloyds Bank plc v Rosset (1991) 1 AC 107 at 132 * Moffat, Graham Trusts Law: texts and Materials Fourth edition, Butterworths * M v M, [2004] EWHC 688 * Oxley v Hiscock (2004) EWCA 546 * Stack v Dowden (2005) EWCA Civ 857 * Springette v Defoe. 24 HLR 552, [1992] 2 FCR 561 * Worwood, Anna, 2004. Does cohabitation equate to marriage? The Lawyer.com [online] available at: http://www.manches.com/practices/family/article.php?id=51 Read More