Law of Property - Implied and Resulting Trusts

Implied Co-ownership

• Implied trusts are exceptions to the Law of Property Act 1925, section 53(1)(b) and (2).
• A declaration of trust respecting land or an interest in land must be evidenced in writing, signed by someone with the capacity to declare the trust, or in a will.
• Implied trusts relate to interests acquired in purchased property, typically a family home, but separate from the Matrimonial Causes Act 1973.
• Family courts have wide powers to adjust property rights during divorce.
• Implied trusts help determine how joint owners split their interests.

Resulting Trusts

• Resulting trusts arise from the case of Dyer v Dyer (1788).
• This situation occurs when one party contributes the full purchase price of property.
• There is a presumption that the contributor retains the beneficial interest in the property, unless rebutted.
• The typical traditional position is that A and B both contribute to the purchase price, although the title is only in A's name.
• B's interest is directly related to their contribution.
• Pettit v Pettit (1970): a party contributing to the purchase price gains an equitable interest in the property and the quantity of interest is proportional to the contribution.

Dyer v Dyer (1788)

• Mr Dyer paid the full purchase price of properties in Wiltshire.
• The properties were registered in joint names of himself, his wife, and eldest son.
• His wife predeceased him, then Mr Dyer died, leaving the properties to his youngest son.
• The youngest son sought to take possession, arguing a resulting trust in his father's favor.

Contribution to the deposit

• Financial contribution to the deposit is sufficient to give rise to a share in a co-owned property.
• Gissing v Gissing (1971): Mortgage payments are enough financial contribution to evidence a common intention to share ownership.
• Curley v Parkes (2004): Mortgage payments alone are insufficient to establish a resulting trust.
• Laskar v Laskar (2008): Mortgage repayments are evidence of a contribution to the purchase price.

Constructive Trusts

• Constructive trusts are the most effective and versatile type of trust for establishing interests in family homes.
• A claimant can establish an interest in a family home by demonstrating a shared intention and detrimental reliance.
• Eves v Eves (1975): Substantial improvements to a property can establish a constructive trust.
• Grant v Edwards (1986): Significant financial contributions to a property can establish a constructive trust.

Stack v Dowden [2007]

• This case emphasized the importance of considering the whole course of dealings when determining the interests of co-owners.
• Rebuttable presumption of equal shares in a jointly named property.
• Courts should consider all circumstances in a given case.
• Parties' actions demonstrate their intentions.

Jones v Kernott [2011]

• Common intention can change over time.
• Equitable shares determined by parties' conduct.
• Whole course of dealings considered.

Overreaching

• Overreaching is a mechanism that allows purchasers of land to avoid or "overreach" equitable interests.
• There needs to be at least two trustees to complete a successful overreaching.
• City of London Building Society v Flegg [1988]: Payments must be made to at least two trustees.

TLATA 1996

• This Act clarifies situations when trusts arise, and clarifies the duties of trustees and beneficiaries, in situations where co-ownership is involved.
• When a co-owner is bankrupt, the trustee in bankruptcy has duties to "get in, realise, and distribute" assets for the benefit of creditors.
• The trustee in bankruptcy takes the assets subject to the rights of other co-owners.