Whether Gill Can Claim the Flat Under Implied Trust - Essay Example

Brief facts Don and Gill are father and daughter. Gill began relationship with Bob and decided to live together. Don, Gill and Bob together purchased a flat. Don paid 15% of the price money and remaining 85% was paid by Gill and Bob together by securing loan. The title of the flat was conveyed in the name of Don alone. 2. Don often promised Gill that she would inherit all his property after his death, and he reiterated his statement before his death. After some time Don became sick and started living with Gill and Bob. Both Gill and Bob cared him during his old age. Don made a will much earlier to his promise, leaving all his property to charity. Gill was not aware of this will. Don died without altering his will to give effect to his promise to inherit his property to his daughter Gill. 3. Gill and Bob were thought of buying other property in their name. But they decided to live in the same flat, which is in the name of Don. When Don promised that Gill would inherit all his property Bob has paid the remaining installments of the loan amount from legacy, which he received after the death of his aunt. He also spent on re-decoration and re-fittings of the flat out of his legacy. Now three issues arisen out of the facts stated above they are 1. Whether Gill can claim the flat under an implied trust 2. Whether Gill can make a proprietary estoppel claim in respect of Don's promise to leave his property to her, 3. Whether Bob could make any claim regarding the flat if he and Gill separated. These issues can be dealt as following: 1. Whether Gill can claim the flat under an implied trust The answer is yes. Gill can claim the flat under an implied trust. The remedy to these issues lies in the law of Property. The law provides for rights over property. Those rights are legal and equitable rights. Trust creates equitable rights. Common law recognizes legal rights. Equitable rights are also enforceable in common law but they are enforceable in personam, i.e. they are enforceable against only a particular person i.e. particular trustee. Whereas legal rights on a property are rights in rem, which are enforceable against any one.1.1 The statute classifies the interest in the property as commercial and family interest. The commercial interest in property is derived generally by buying and selling of the property, such transaction is registered under the law thereby creates legal right over the property. The family interest is the equitable interest like life interest in the property such interest is created by family settlements or formal testimonies like will.1.2 Co-ownership: The Law of Property Act, 1925 provides for Co-ownership. When two or more persons hold interests in a property their ownership over the property is said to be co-ownership and each of them are called tenants. The term tenant used in this statute differs from that used in lease. Under the co-ownership each tenant has the right to live on or share in the property during his or her lifetime. This co-ownership is of two types - Joint tenancy and Tenancy in common. In case of death of any of co-owners his/her interest is devolved to the surviving tenant. Joint tenancy: In joint tenancy the ownership of the property is retained upon all tenants as single ownership. They are not entitled to devolve their share in the property by will but the law permits to dispose it during lifetime. Tenancy in Common: When two or more persons hold the property in common such ownership is Tenancy in common. In this category the tenants are treated as individual landlords to the extent of their respective share. Though they are treated as individual landlords their right in the property is an undivided share and they are entitled to the extent of their share only but not the property itself. Joint tenancy and the Tenancy in common are created either expressly or impliedly1.3. Trust and Co-ownership: In Co-ownership either by Joint Tenancy or Tenancy in Common, the property is brought in the name of single person but all the tenants pay the purchase money. The very intention of the tenants in paying the purchase money is to share the ownership of the land. But this fact is rebuttable. Therefore to overcome this defect and to protect the tenants the equity imposes trust on the person on whose name the property is bought. And such person act as trustee of the interest of rest of the tenants1.4. Williams & Glyn's Bank v Boland1.5 Answer to issue 1. The present case falls within the ambit of Co-ownership of the property since Don, Gill and Bob paid the price money. In fact Don paid only 10% of price money of the flat in issue but the flat was conveyed on his name as agreed by all three parsons. By this transaction, tenancy in common is created. Don, Gill and Bob hold the undivided share in the flat. Equity imposes trust on Don. Don acts a trustee of the interest in the property of Gill to the extent of her share. Therefore Gill has a clear claim on the flat under implied trust. The claim of Gill under implied trust can be relied on the following decided case law: Drake v Whipp 2: In this case the court of appeal has allowed not only the amount of share spent on a property whose money price was paid by both partners of cohabitating couple but also allowed the money spent for food and other house hold expenses.1 Brief facts: Mr W and Mrs. D cohabitating couple purchased barn for 61,254. Mrs D contributes 40% and Mr W paid 60% of the purchase money. Barn was conveyed on the name of Mr W alone. They also spent an additional amount of 129,536 of which Mrs D paid 10% and Mr W paid 90%. Subsequently Mr D formed relationship with another lady which made Mrs W to leave the barn. Mrs W claimed before the country court her share in barn to the extent of the money she contributed to the Property. The country court allowed her petition for 19.4% and ordered to pay 43,650. The court of appeal went further and enhanced the relief and ordered to pay 75,000 on the grounds that i) there was an evidence of common intention between the parties to share the beneficial interest in the property. ii) Mrs D has relied on Mr W and contributed. While deciding the issue the court has enlarged the relief taking into the consideration of the amount spent by Mrs D for food and other household expenses.2 2. Whether Gill can make a proprietary estoppel claim in respect of Don's promise to leave his property to her Yes. Gill can make a proprietary estoppel claim in respect of Don's Promise to leave his property to her. The law provides for claim under estoppel under three heads i) estoppel by representation, where one person asserts the truth of a set of facts to another ii) promissory estoppel, where one person makes a promise to another, but there is no enforceable contract; and iii) proprietary estoppel, where the parties are litigating the title to land. It is closely related to the doctrine of constructive trust. These three are also called as reliance-based estoppels. In Proprietary estoppel one has to prove that i) one party represents that he or she is transferring an interest in land to another, but what is done has no legal effect, or ii) merely promises at some time in the future to transfer land or an interest in land to another, and iii) knows that the other party will spend money or otherwise act to his or her detriment in reliance on the supposed or promised transfer.3 In the present case Gill can claim the property under proprietary estoppel if she can prove that i) Don often promised Gill that she would inherit all his property after his death. ii) After some time Don became sick and started living with Gill and Bob, Don reiterated his statement just before his death. iii) Gill allowed him to say with her and cared him through out his old age acting upon the promise made by Don and believing that she would inherit all the property of Don after his death. Gill has to further prove that she is not aware of the will Don made long back leaving all his property to charity or Gill has made a mistake as to her legal rights over her father's property by not ensuring that the previous old will is modified to the effect it was promised by her father as to leave his property to her. And iv) Don knew that Gill spend money and acted to her detriment in reliance on the promised inheritance of the property. The claim of Gill can be relied on the following decided cases: Dillwyn v Llwellyn"4: In this case a father promised a house to his son. The son took possession and spent a huge sum of money and developed the property. The father never actually transferred the house to the son. After the death of his father, the son claimed to be the equitable owner. The court ordered the testamentary trustees to convey the land to him.4 Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd 5: It was held that "it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment".5 Moorgate Mercantile Co Ltd v Twitchings 6: It was held that "encouragement can be by words or conduct. This is less stringent than the requirements for a declaration of trusteeship. A statement as to future intent will suffice, even where the property is not as yet identified".6 Inwards v Baker 7: Court of Appeal held that the estoppel was held binding not on the father, who had died several years before the case arose, but on the trustee under his will. In this case the son was allowed to remain in a bungalow of his father for the remainder of his life. Relying on the promise of his father the son spent money on the property. The same ratio was applied in Dodsworth v Dodsworth and Matharu v Matharu.8 3. Whether Bob could make any claim regarding the flat if he and Gill separated Yes. Bob could make claim regarding the flat if he and Gill separated. Bob can claim under constructive trust. Constructive trust can be established by proving the direct contribution to purchase money or by making mortgage installments. The other elements involved in this constructive trust are any agreement arrangement or understanding reached between the parties to share the property beneficially. Such agreement etc need not be in writing. Sec 53(2) of Land Property Act, 1925 exempts from written agreements in case of constructive trusts. Bob has paid mortgage amount, spent on repairs, renovation of kitchen believing that he would have beneficial interest in the property. Circumstantial evidence of their conduct indicates their intention to share the property, which further proves the existence of constructive trust. Bob's claim can be relied on the following decisions of the court of appeal. Drake v Whipp 2. This case is explained supra. Grant v Edwards 9: Grant and Edwards were unmarried couple living together. A house was purchased in the name of Edwards and his brother. Grant paid part of mortgage amount, household expenses, provided housekeeping and brought up the children. In 1980 the couple separated, and Grant claimed a beneficial interest in the property. The Court of Appeal held that there was common intention that Mrs. Grant should have beneficial interest in the property. Mrs Grant had relied to her detriment on the common intention. Therefore, she was entitled to a half share on a resulting or constructive trust. Eves v. Eves 10: Janet and Stuart Eves purchased a house jointly with an intention to live together. The house was conveyed into Stuart Eves' name alone and he provided the entire purchase money. However, he promised Janet that he would have put the house into their joint names when she becomes 21. Believing him, she did a lot of heavy work on the house which was in a very bad state and do it up. On the breakdown of the relationship, dispute arose as to the claim of Janet. The court of appeal held that Stuart Eves had the legal estate on trust for him self and Janet and allowed the claim of Janet to the extent of one-quarter. Parrott v Parkin11: In this case Mr. Parkin and Miss Parrot lived formed relationship and purchased a property. Both parties paid purchase money, but the property was registered in the name of Mr. Parkin. After some time they separated. Miss Parrot claimed interest in the property. the Queens Bench Division (Admiralty Court) has held that i) Mr. Parkin is the legal owner and ii)Miss Parrot is entitled for beneficial interest in the property to the extent of purchase money paid. Here the rule of constructive trust is applied. Research Strategy The research work is on the practical skill of a lawyer assigned a job of preparing a report to give opinion to clients on the practical issues rather than theoretical. This job requires thorough research on subject. Textbooks to find the statute law and Internet for latest cases laws are the vital sources of this research. Therefore first I have selected to read books on practical skills of lawyers. I started my research from library for Textbooks on legal research, skills of lawyers and other law books. I have scanned several books. I studied couple of books, selected one book "Skills for Lawyers (1997/98)" published by Jardans Publisers, I also made research on net on this subject. I have analyzed all the three issues. I spent couple of days reading several textbooks on law of trust, law of contract, law of succession and land law. I have found the proper remedy to the issues lie in property law. I read several books and selected one Text Book "The Law of Real Property (1997)", in which the subject is dealt with precisely, which made me easy to fix the answers with in the word limit. I made researched on issues over Internet. I searched on Google search engine. I searched on the topic "Implied Trust" I read several web pages on the subject from various sources. I gathered relevant information from various sources, put at one place and framed the final answer to the first question i.e. "Whether Gill can claim the flat under an implied trust" For decided cases I made research on Internet. I searched for recent case laws on "Law of Property Act, 1925." In my search I found several cases I scanned through these case laws and I found "Drake v Whipp" is appropriate case law supporting the answer to the question. I made research over Internet on topic "Proprietary Estoppel". I found several sites giving information on the subject. I have collected the information both from Text Books and from on line. I have consolidated the information and constructed the reply to the second question, taking the information from both Text Book and Internet sources. I searched for decided cases. Studied different decided cases and found Dillwyn v Llwellyn, Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd, Moorgate Mercantile Co Ltd v Twitchings, Inwards v Baker, Dodsworth v Dodsworth, Matharu v Matharu are the authorities for supporting the argument on the second issue i.e. "Whether Gill can make a proprietary estoppel claim in respect of Don's promise to leave his property to her". I made research to find the law and authorities to justify the claim of Mr. Bob regarding the flat if he and Gill separated. I found in my research that Mr. Bob has a claim under constructive trust. Then I confirmed my answer to the question and started further research on constructive trust. I have collected relevant information on constructive trust. And framed the conclusions on the claim. I have researched once again on Law of Property Act, 1925 on this topic and found relevant provision to support the arguments. I researched over Internet for the earlier decision of the courts of appeal on this issue. In this process I have studied various cases laws from different web sites. Out all the cases laws I found Drake v Whipp, Grant v Edwards, Eves v. Eves are the relevant authorities supporting the argument on the subject. I found Parrott v Parkin is the recent case of 2007 supporting the argument in favour Bob. Foot Notes 1.1 Lord Temple man and Professor Cedric D Bell, The Law of Real Property (1997) p.34 1.2 Lord Temple man and Professor Cedric D Bell, The Law of Real Property (1997) p.42 1.3 Lord Temple man and Professor Cedric D Bell, The Law of Real Property (1997) p.115 1.4 Lord Temple man and Professor Cedric D Bell, The Law of Real Property (1997)p.124 1.5 Williams & Glyn's Bank v Boland [1980] 3 WLR 138. 2. Drake v Whipp [1996] 1 FLR 826 Source: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_d/drake_w.htm 3. "Halsbury's Laws of England, Vol 16(2), 2003." 4. Dillwyn v Llwellyn (1862) 4 De G.F.& J. 517 C.A. Source: http://webjcli.ncl.ac.uk/articles5/todd5.html 5. Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB133 Source: http://www.bailii.org/ew/cases/EWHC/Ch/1979/1.html 6. Moorgate Mercantile Co Ltd v Twitchings [1975] QB225 Source: http://www.lostmyshirt.co.uk/moorgate_mercantile.htm 7. Inwards v Baker [1965] 2 Q.B. 29, C.A. 7 Source: http://webjcli.ncl.ac.uk/articles5/todd5.htm 8. Dodsworth v Dodsworth (1973) 228 EG 1115 and Matharu v Matharu (1994) 26 HLR 648 Source: http://webjcli.ncl.ac.uk/articles4/todd4.html 9. Grant v Edwards [1986] 2 All ER 426 Source: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_g/grant_e.htm 10. Eves v. Eves: [1975] 3 All ER 768; Court of Appeal Source: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_e/eves_e.htm 11. Parrott v Parkin [2007] EWHC 210 Source: ttp://www.lexis.com Bibliography: 1. Lord Temple man and Professor Cedric D Bell - The Law of Real Property (1997) 2. Jordans, Skills for Lawyers (1997) 3. Halsbury's Laws of England, Vol 16(2), 2003." 4. Butterworths, New Law Journals Other references: a) http://www.lawcom.gov.uk b) http://www.lawreports.co.uk c) http://www.britishcouncilonline.org d) http://www.hmso.gov.uk e) http://cc.msnscache.com/cache.aspxq=6371460523180&lang=en-IN&mkt=en-IN&FORM=CVRE6 f) Macmillan, Law of Succession (2006) g) http://en.wikipedia.org/wiki/Estoppel#Proprietary_estoppel Read More