Reform Criticized Application of Property Law

Reform is long overdue of the much criticized application of property law to cohabitants who share a family home (both married and unmarried, opposite and same sex). As it stands and the community on a whole becomes more diverse, we realize the laws of property law somewhat conflicts with the more informal relationship of cohabitants, as even the same sex relationships possess a more stronger footing that that of the latter. Married couples divorcing have legislation such as the Matrimonial Causes Act, whereas females have rights to reallocation of family property. Same sex relationships retain the Civil Partnership Act 2004 ss.6567. But in issues of cohabiters, the criticisms of resulting trust and constructive trust which currently govern the allocation of rights in the unmarried family homeranging from the concerns of property lawyers to the critiques of family lawyers and feminist legal scholars rage on as we know it.

The refusal of a legislative action up to this point has lead to a great deal of confusion, injustice and uncertainty in this area as we will exam further. The doctrine of a Resulting Trust was an unsatisfactory way in which to handle these cases.

The strict hands of the law in property as we can see exampled in cases such as Gissing v Gissing, would seem unfair to a spouse, as there was an absence of an Express Declaration, as so required by the LPA 1925 s. 53(1) (b), an express declaration of trust will be conclusive. The judges in the case were at odds in their decisions individually in the case, the inference of an intention was not easily, thus could not be evidence by the claimant. Her claims of a full beneficial interest in the first instance also gave some rise to question her interest and if she should fall under a resulting trust. The laws of property were conclusive of at law.

The earlier case of Pettit v Pettit, a husband was held not to hold any beneficial interest in the property, governed by the law of S.17a Married Women’s Property Act 1882. But more specifically his actions were held to be non sufficient, “improvements to the home will not suffice” It was held that, the acts done could not result in a beneficial interest because (i) as per Lord Reid, Lord Morris or BorthYGeist and Lord Hodson, a husband was not entitled to an interest in his wife’s property merely because he had done in his leisure times jobs which husbands normally did (ii)per Lord Reid, the improvements carried out were nearly all of an ephemeral character (iii)per Lord Morris of BorthYGest & Lord Diplock, there was no justification of imputing to the spouses a common intention in the property in respect of the work that he did per Lord Upjohn, in the absence of any agreement with his wife, could have no monetary claim against her and since no estoppel or mistake was suggested he could have no charge on or in interest in her property Evidenced in these cases the issue were settled by way of legislation put in place for that of married couples.

However the reliance on these devices used to give interest seemed to also give rise to some confusion on the backbone of the decisions in these cases of married couples. In the absence of a clear intention, by way of inference by the courts, the other solution would be to look at the monies in at the time of acquisition of property

The directions given from the higher courts became a major issue in the lower courts when dealing with the issues of partners left with nothing, which could depend not on the strict laws of divorce. Constructive Trust doctrine was used to grant interest in property to cohabiters, the resulting trust could be used widely as the judge seen fit. “In strict law she has no claim on him whatever. She is not his wife. He is not bound to provide a roof over her head. He can turn her into the street she is not entitled to any maintenance from him herself. All she can do is go to the magistrates and ask for an affiliation order against him on footing that she is a “single woman”: and get an order for him to pay maintenance for the children…such is the strict law. A few years ago equity would not helped her. But things have altered now. Equity is not past the age of child bearing. One of her latest progeny is a constructive trust of a new model” Therefore the requirements of an oral expression assurance as evidence of a common intention evolved to the inference of the court as to intention from the general conduct of the parties. Taking it further was that to infer common intention about ownership by way of assuming that the parties ‘would have done’ had they thought about it.

With all things in law the uncertainty is always present, for law is not absolute as the latter will prove. The Constructive Trust wide usage was further expanded by the issue of the nature of conduct in which a claimant could give rise to a common intention sufficient enough. The cases often seen where parties contributed a fair amount of time to care for the family home and care of such, but had gotten no promised interest or made no direct contribution to purchase price, which would result in a resulting trust. But some courts used their discretion in determining cases, by way of inferring a common intention by inference from conduct of partners, that being performance of everyday domestic duties. What this did is show the courts clear ability to use the constructive trust, in situations where parties shared properties under cohabitation performance regular duties and infer a common intention. It became a discretionary tool for the courts.

As it seemed the courts had found some certainty and had adopted the views of Lord Denning in Eves v Eves, after toying with inferring a common intention from a broad range of ‘conduct’, Lloyd’s v Rosset held that probably nothing less than ‘direct contributions to the purchase price’ would suffice tot infer a ‘common intention’ to share property (per Lord Bridge). His reasoning behind such a backward approach was that arrangements to share household duties were intrinsically different from that of an arrangement to share ownership of said property. He left out however the grave importance of the indirect contribution to the relationship/household, agreements between parties it get payments to mortgage paid by one and expenses of the home taken by the other. The latter being of a substantial amount. The courts have also been faced with case of an exceptional nature, for example that of Le Foe v Le Foe, where it was held in cases as such there should be a more Holistic Approach taken. This approach is heavily drawn from the principles laid out in the Rosset case.

Since Rosset, courts have tried to make strides to bring some resolution to the confusion to these case issues. The approach was to view the whole course of dealings between them in relations to the property and determine interest with a consideration given for some contribution to purchase price. We cannot bring cohabitants into the discretionary needsbased jurisdiction of the Matrimonial Causes Act 1973; but if they have contributed—how much? Not many pennies, perhaps, given the figure in Midland Bank v Cooke. The attempts made by the court were another avenue of discretion under the doctrine of a constructive trust, further blurring the lines between constructive and resulting trust. In more recent times and case the court of appeal in Oxley v Hiscock had determined that both parties had some form of beneficial interest in the relevant property: the main question was how to decide on quantum in the absence of any Express Declaration or actual common intention. The facts of the case deemed it rare, the court of appeal had to adopt the approach of three cases in quantifying the interest of the individuals involved. It was determined that the powers of the discretion by the courts determine the fairness having taken into account the whole course of dealing.

The issue at hand was of that of property being in joint names at conveyance. At what point was to determine what and how much the beneficial interest would be if any, the court of appeal rejected the arguments of the earlier courts and laid out a specific set of guidelines. Baroness Hale in Stack v Dowden stated, “the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended” The majority reasoning in the case was that different rules should apply in the context of the family home The burden was to prove that jointly owned property is not the same in equity, the underlying reasoning was that financial contributions to the purchase price, backed by the facts of their financial situation during the course of their relationship gave question to their intention. There was no pooling of funds etc. The house’s view was that it would first have to decide the intention of the parties, which would have been examined by the financial and nonfinancial contributions.

Baroness Hale in her address to the court laid out a further list of factors outside that of financial contributions that may be of relevance when defining the parties’ true intentions:

• Any advice or discussions at the time of the transfer which cast light upon their intentions then
• the reason why the home was acquired in their joint names
• The reason why (if it be the case) the survivor was authorized to give a receipt for the capital moneys
• the purpose for which the home was acquired
• the nature of the parties relationship
• Whether they had children for whom they both had responsibility to provide homehow the purchase was financed, both initially and subsequently
• how the parties arranged their finances, whether separately or together or a bit of both
• how they discharged to outgoings on the property and their household expenses

It was further stated that the mathematical calculations to whom paid what may become less of significance. The facts were that of an unusual nature and the defendant and the defendant was successful in gaining a common intention of the party that was different from an equal share in property.

After the decision in Stack v Dowden which seemed to clarify the way in which the courts should assess beneficial interest in the family home jointly purchased, in both names. It also gave useful, somewhat clear information as to the type of contribution qualifying to bring about a common intention constructive trust in the circumstances as well. The assumption is this: equity follows the law, in cases where there is a joint ownership; the burden of proof is on that partner to prove that they own more than just beneficial interest. Which the HL in Stack v Dowden affirmed, a transfer in both names indicates something greater than just each party intended beneficial interest. Partners are held to have equal beneficial interest until proven otherwise. This is proven by using the so called Holistic approach, by taking into consideration the course of dealings in the determining shares in property. Even though, the House of Lords have been somewhat careful in doing so.

The courts it seems will forever be in turmoil with the issues as it seems, when dealing with cohabitees. The issues they face at the breakdown of a relationship, the most conducive solution being that of a Constructive Trust, will continue to have its issues and perils.

Proprietary Estoppel

In passing this doctrine was mentioned as a way of this doctrine combining with that of constructive trust. Lord Hope reluctantly made mention, but clearly made the distinction that the proprietary Estoppel was an “equitable claim against the conscience of the true owner” Therefore it is a claim of simply equity. In saying this, the award would be a bare minimum in doing justice, leaving the party with nothing more than reward of cash. On the flip side, the common intention constructive trust was a more lucrative tool in determining true beneficial ownership and beneficial size in interest.

The courts seem to be a far ways away from reaching a point where they can merge the two doctrines. The requirements of evidence and burden of proof aside, as it appears the courts hold a greater element of discretion in terms of choice of remedy are more developed in estoppel doctrine: the courts hold a greater ability to mould the outcome in a way to not seem unconscionable. Whereas the constructive trust doctrine limits parties to equitable entitlements only, based inquiries of each parties position as it pertained to the property in order to determine the exact quantum of beneficial interest.

Therefore as shown in the essay, the courts at the end of the day and by majority cases, still seem to base there decisions widely on that of direct financial contributions. That party which puts more into the property undoubtly will have a more evidenced beneficial interest in said property. The courts have in some cases used property law and other forms of legislation to come to their decisions, but within the content of each case it tends to come back more to the idea that if you and a spouse/partner obtain some property it will more beneficial to you in the end to have contributed in a direct way, that in the event of you relationship ending that which you have put in over the course of that relationship will obtain a beneficial interest in said property.

Current law as it is uncertain and will continuously result in injustice to parties involved. The inconsistency with the results in the application or rules and outcome of cases are a clear indication that there need be some reform and as things progress, it’s faster becoming the case. The many contributions by different judiciaries and freedom of courts, as evidenced, have left the state of affairs in a whirlwind and have actually made the situation more confusing over the years. Parliament has/must realize that the home is that of personal nature and cannot be governed by these laws of property or business. As we would see in contract law, a signing of a contract between partners is not recognized, because it is not seen to be an intention to create legal relations. Relationships are so more based on trust and understanding, therefore the last thing on ones mind at inception is that of their rights to property and beneficial interest. Some suggested reforms have been that of Legislation by parliament; if not some kind of direct legislation to curve the problem in these specific cases, make some adjustments to that of the current ones. For example, that of the MCA 1973. If there is a refusal by parliament to address the issue directly and it is seen as too tedious to amend current legislation, then let there be some guidelines/schemes attached to the doctrine of Resulting and Constructive Trust. If a case comes to the court then the judiciary can have some checklist where they can look towards and better determine a case i.e. how long have the parties been in the relationship, presence of kids things of such a nature.