Trusts and the Family Home
*-When cohabiting couples (unmarried couples) separate, property law principles are applied
to determine ownership of the former family home.
--Note: The UK does not recognise couples being in a common law relationship.
*-The main issue with trusts and the family home is where does the beneficial interest lie
given the fact that they are an unmarried couple not recognised by law and therefore, still
governed by ordinary law (i.e. if property in sole name then all beneficial interest lies with
the person named).
-The couple could enter into an express declaration of trust written up based on formalities of
a trust (i.e. s.53(1)(b) LPA 1925), but this commonly does not occur in a relationship.
Determining Beneficial Ownership Through Informal Means
*-Even when the legal interest is in a sole name, the equitable interest may show that the
beneficial interest also lies in the other person in the relationship.
--There are three ways to determine beneficial ownership through informal means:
1) Resulting trusts (not that important/relevant- s.53(2) LPA 1925)
2) Proprietary Estoppel (Exists, but isn’t seen very often)
3) Common Intention Constructive Trusts (s.53(2) LPA 1925): Most used to determine
equity in the breakdown of a relationship in a family.
1) Resulting Trusts
*-Presumption of resulting trust base don Dyer v Dyer (1788) however, the relevance of
resulting trusts in the context of family home is diminishing:
Stack v Dowden [2007]: In the case of beneficial ownership of a familial home, under sole or
joint legal owners, of a married or unmarried couple, there is is no presumption of resulting
trust arising from a contribution to the purchase price or mortgage (reaffirmed in Jones v
Kernott [2011]).
-However:
Laskar v Laskar [2008]: Held that the presumption of resulting trust still arises where
property had been purchased as an investment and not as a family home.
2) Proprietary Estoppel (Equitable)
*-Proprietary Estoppel: Protects a person who has acted in reliance of an expectation that
they will receive an interest in the landowner’s land or an estate in fee simple.
--Proprietary estoppel allows the court to award interest in land as a remedy against a land
owner who has conducted himself in such a way that it would be unconscionable for him to
assert his strict legal right to deny the claimant any entitlement because it had not been
appropriately created.
*Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982]: Recast the old criteria and
said was too strict. They said that fundamentally proprietary estoppel is not about preventing
fraud in conveyances of land but is about unconscionability.
Held (Legal Principle): Criteria to determine where a proprietary estoppel has arisen:
*-When cohabiting couples (unmarried couples) separate, property law principles are applied
to determine ownership of the former family home.
--Note: The UK does not recognise couples being in a common law relationship.
*-The main issue with trusts and the family home is where does the beneficial interest lie
given the fact that they are an unmarried couple not recognised by law and therefore, still
governed by ordinary law (i.e. if property in sole name then all beneficial interest lies with
the person named).
-The couple could enter into an express declaration of trust written up based on formalities of
a trust (i.e. s.53(1)(b) LPA 1925), but this commonly does not occur in a relationship.
Determining Beneficial Ownership Through Informal Means
*-Even when the legal interest is in a sole name, the equitable interest may show that the
beneficial interest also lies in the other person in the relationship.
--There are three ways to determine beneficial ownership through informal means:
1) Resulting trusts (not that important/relevant- s.53(2) LPA 1925)
2) Proprietary Estoppel (Exists, but isn’t seen very often)
3) Common Intention Constructive Trusts (s.53(2) LPA 1925): Most used to determine
equity in the breakdown of a relationship in a family.
1) Resulting Trusts
*-Presumption of resulting trust base don Dyer v Dyer (1788) however, the relevance of
resulting trusts in the context of family home is diminishing:
Stack v Dowden [2007]: In the case of beneficial ownership of a familial home, under sole or
joint legal owners, of a married or unmarried couple, there is is no presumption of resulting
trust arising from a contribution to the purchase price or mortgage (reaffirmed in Jones v
Kernott [2011]).
-However:
Laskar v Laskar [2008]: Held that the presumption of resulting trust still arises where
property had been purchased as an investment and not as a family home.
2) Proprietary Estoppel (Equitable)
*-Proprietary Estoppel: Protects a person who has acted in reliance of an expectation that
they will receive an interest in the landowner’s land or an estate in fee simple.
--Proprietary estoppel allows the court to award interest in land as a remedy against a land
owner who has conducted himself in such a way that it would be unconscionable for him to
assert his strict legal right to deny the claimant any entitlement because it had not been
appropriately created.
*Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982]: Recast the old criteria and
said was too strict. They said that fundamentally proprietary estoppel is not about preventing
fraud in conveyances of land but is about unconscionability.
Held (Legal Principle): Criteria to determine where a proprietary estoppel has arisen:
