Detrimental Reliance - Land Law PDF

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Detrimental Reliance If a common intention has been evidenced by either of the routes taken above, the issue of detrimental reliance is fairly easy to find. What counts as detriment? Express common intention (i.e. where there is evidence of a common intention through discussions that lead the courts to a finding of common intention). In these circumstances, detriment can take many forms; i.e. Eves v Eves and Ungurian v Lesnoff (1990), in which the claimant carried out ‘extraordinary’ work(!) about the house. It can also include financial matters (i.e. paying bills or settling other household expenses provided it relates to the promise - note the distinction from the decision in Rosset). Consequently, in this context, detriment does not mean harmful (although, of course, it will cover harmful effects as well). Finally, as is evident, the detriment suffered need not, but often does, relate to the property itself (i.e. spending one’s life savings in a car, because the claimant relied on the promise and thought that they had a home for life based on the promise that ‘you will never have to find another house’. a. Direct Contributions In these type of cases (i.e. Rosset - even though no constructive trust was found on the facts), detriment is satisfied by the fact of the payments themselves. In this way, therefore, the payments that give rise to the constructive trust initially also serve the role of detriment. Quantifying the Share in Resulting Trusts and Constructive Trusts If the claimant is granted an equitable right to ownership under an implied trust, the legal owner will now be a trustee holding the property on trust for themselves and the equitable co-owner. It is, of course, a statutory trust according to the LPA 1925 and now TOLATA 1996 (i.e. a trust of land). Since there is only the unity of possession, they will hold at equity as tenants in common. As such, the next question becomes, what is the size of their respective shares? a. Resulting Trusts Finding the share under a resulting trust is quite straightforward. The quantity of the share is in direct proportion to the amount of the purchase price contributed (i.e. 25% contributed, 25% of the (current) value). a. Constructive Trusts Almost by definition, the finding of the amount of the share the claimant is awarded is more difficult to apportion. Two different ways of calculating it are available, a. the expectation that arises from the common intention itself; or b. an amount that compensates for the detriment suffered by the financial contribution made to the payments. Joint legal ownership Where there or two (or more) legal title holders but the question of beneficial shares is unresolved. Here, the parties both have equitable interests (as they are both trustees and hold on trust for themselves), but there is disagreement over the quantification of their shares. Stack v Dowden (2007) and Jones v Kernott [2009] Rebutted the presumption that, in the absence of agreement, the 50/50 rule (joint tenants) is rebuttable, ‘in exceptional circumstances’.

This common intention can be found at the time the property was acquired jointly or later as the parties’ relationship changes. As such, what can start as a joint tenancy (at equity) can, over time, change into unequal shares (i.e. become a tenancy in common with unequal shares (even though in neither Stack nor Kernot was the issue discussed in this way, but only as to the permitting of unequal shares when the property appeared to be held jointly in equity). In Stack, the majority of the purchase price came from Stack and much of the mortgage repayments. D. paid slightly more of the latter as well as the majority of the utility bills. They had separate bank accounts and made separate investments. They separated and S brought an action for the property to be sold and for the proceeds to be distributed in equal shares. Two points are to be noted, 1. As noted, the presumption of equity following the law as regards the equitable interest is now held to be rebutable in certain exceptional circumstances. 2. That such rebuttals arise from the inference of the common intention of the parties. This common intention is no longer static (i.e. at the time of acquisition), but can change during the course of the relationships between the parties What is specifically interesting is that this common intention is to be found by looking at the relationship as a whole and not necessarily in relationship to the property; i.e. how the parties have organised their finances and other aspects of the relationship (i.e. paying for the children’s upkeep, etc.). In the words of Lady Hale, ‘context is everything’. (However, it is be noted, that these changes apply only to domestic and not commercial relationships.) Lloyds Bank v Rosset or Stack v Dowden? Rosset still applies to sole owner cases (i.e. where a party is claiming a beneficial interest). Stack applies where they already have a joint tenancy at equity and it is a question of what share each party is to be allocated....