W10 | Non Consensual Trusts, Resulting and Constructive Trusts

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Questions and Answers

Why might individuals register property in another person's name?

To prove ownership without financial risk

To simplify property management

To ensure property remains in the family

To avoid tax and obtain benefits (correct)

What is a legal implication of relying on one's own act of illegality?

It establishes a valid trust in any circumstance

It strengthens a claim to ownership of the property

It does not allow a person to claim a trust based on illegality (correct)

It can be used to claim property in future disputes

In the case of Nelson v Nelson, what motivated the mother to register property in her children's names?

To protect her assets from creditors

To facilitate a sale of the property

To set up a trust for her children's future

To qualify for a Department of Defence benefit (correct)

What was the criminal action taken by the mother in the Nelson v Nelson case?

Fraudulently denying interest in other property Signup and view all the answers

What principle does a presumption of advancement refer to?

An assumption that property is a gift between certain relationships Signup and view all the answers

What is the primary means by which an equitable interest in land is commonly proven?

By a contractual promise from the legal owner Signup and view all the answers

In the case of Robert, what was the parents' role in the context of the constructive trust claim?

They were alleged to hold the property on constructive trust for Robert. Signup and view all the answers

What key factor undermined Robert's claim to the Promised lot in his lawsuit against his parents?

His decision to marry against his parents' wishes. Signup and view all the answers

What type of trust is established to address situations where only one party holds property despite contributions from another party?

Constructive Trust Signup and view all the answers

Why might families and spouses not usually have contractual agreements regarding property?

They assume ownership based on relationships. Signup and view all the answers

In the context of resulting trusts, which of the following does NOT qualify for establishing such a trust?

Subsequent mortgage payments Signup and view all the answers

What is the legal significance of a constructive trust in family property cases?

It allows for the recognition of informal contributions as valid claims. Signup and view all the answers

What outcome occurred in the lower court regarding Robert's claim to the Promised lot?

The court found that the parents were indeed in constructive trust for Robert. Signup and view all the answers

In the Calverley Green case, Mr. Calverley claimed a larger share of the property based on which of the following principles?

Proportional Contribution Theory Signup and view all the answers

Which of the following best represents a reason for seeking equitable relief in property disputes?

To remedy situations where legal titles do not reflect true intentions. Signup and view all the answers

What must occur if one partner in a mortgage agreement pays off a debt for the other partner?

The other partner must reimburse the amount paid. Signup and view all the answers

Which type of trust protects individuals who have made financial contributions towards a property?

Resulting Trust Signup and view all the answers

What does equitable estoppel prevent in property law contexts?

It prevents parties from denying their obligations to others if it would be unjust. Signup and view all the answers

In family property disputes, which principle is applied when equity dictates a fair division of property despite legal ownership?

Constructive Trust Signup and view all the answers

In Calverley Green, how much total was borrowed by Mr. Calverley and Mrs. Green from the bank?

$18,000 Signup and view all the answers

Which of the following statements best describes resulting trusts?

They primarily protect initial financial contributions to property. Signup and view all the answers

Study Notes

Resulting Trusts and Illegality

It is common for people to put property in other's names to avoid taxation or receive benefits, e.g., parents buying property and registering it in a child's name to get a first homeowner grant.
A person cannot rely on their own illegal actions to claim ownership of property, e.g., if they put property in someone else's name to avoid tax, they cannot use that illegality to argue they have a resulting trust over the property.

Nelson v Nelson

A mother registered property in her son and daughter's names to obtain a Department of Defense benefit for another property.
The mother had to claim she had no interest in any other property to get the benefit, which was fraudulent.
The first property was sold, and the daughter claimed 50% of the proceeds.
The question is whether the mother could rely on her own illegality to rebut the presumption of advancement.

Constructive Trusts

Constructive trusts and equitable estoppel can both be used to prove an equitable interest in land.
In family or relationship cases, it is difficult to prove a contractual agreement for an interest in land.

Giumelli v Giumelli

Brothers worked on their parents' farm for little or no wages.
Parents promised to give one brother a lot of land after subdividing it.
The brother built a house and orchard on the promised lot but left when his parents disapproved of his wife.
The brother sued his parents, arguing that they held the property on constructive trust for him or that they were estopped from denying his interest in the land.
The court held that the parents held the lot on constructive trust for the brother, but he was not entitled to the legal title.

The Baumgartener Case

Recognizes financial and non-financial contributions to the pooling of resources in relationship-based property ownership.
It can be unconscionable to allow only one person in the relationship to hold the property while the other has no entitlements.

Resulting Trusts Cont.

Only apply to initial financial contributions to property, such as cash and mortgage liability.
They don't apply to subsequent mortgage payments or non-financial work like care.
Constructive trusts cover these situations.
Resulting trusts protect the interests of people who have provided money and are liable for a mortgage.

Calverley Green

Two partners in a de facto relationship bought a house.
One partner contributed the deposit and made all mortgage repayments, while they were both jointly liable for the loan.
When the partners separated, one partner argued that they owned the property as joint tenants, resulting in a 50/50 share of the sale proceeds.
The other partner argued that, in equity, their contributions gave them a larger share of the property.
The court agreed with the latter, finding that the partner who made the larger financial contributions had a greater interest in the property.

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Description

Test your understanding of resulting trusts, their relation to illegality, and key cases like Nelson v Nelson. Explore how illegal actions affect property claims and equitable principles such as constructive trusts. This quiz examines practical implications of these legal concepts.