Land law - Co-ownership- Implied Trust PDF

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Lecture 4

Land Law – Co-ownership: Implied Trust Cases:        

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Overreaching  Overreaching is different from overriding o Overriding relates to land registration and overreaching relates to co-ownership  Means that if the purchaser gives the money to two or more trustees, then the beneficial interest is overreaching meaning the purchaser takes free of these interests  Find trustee, give them the money and purchaser does not need to worry about any beneficiary  With overreaching, the purchaser can just get on and ignore any beneficial interest that is outstanding  Only type of interest that can be overreached are those on that exist in a trust for land  Key point: overreaching only exists when there are two or more legal trustees  Moneys have to be paid to all the trustees and give the receipt  Any decision by a court under TOLATA under a dispute for beneficiaries under a trust; beneficiary can’t claim their interests have been overreached when court gives a decision or failure to pay mortgage  Beneficiaries can only sue trustee for breach of trust not purchaser o Compensation through monetary value  Sole or single owner, overreaching does not exist Implied Trusts  Implied trusts are implied by courts  Come into existence when there is a sole legal owner who think they are holding it in trust for themselves but someone else does something for the property to become a beneficiary o Courts decide that person has done enough to become a beneficiary o E.g. someone buys a flat for themselves and meets someone; the other partner moves in and live happily; after 20 years, they cannot stand each other and want to sell the flat, technically there is only one owner, but can their partner claim a beneficial interest? Courts look at it – if partner has done something in regard to the property and if it is sufficient then implied trust is there  If court decides the other person is a beneficiary, they can only be a tenant in common as the 4 unities are lacking and never legal trustees

Lecture 4  

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S.53(2) This section does not affect the creation or operation of resulting, implied or constructive trusts Overreaching cannot imply; in theory the purchaser gives the money to the single trustee and moves in, the other partner or ex-partner says I’m not moving, I got a beneficial right to be here How to gain an interest? 1. Resulting trust: where someone gives money or percentage of money towards the purchase of the land (borrowing money from a friend?) o Court will hold that the legal trustees hold the property on trust for themselves and the person who lent the money o Possible to argue it was a gift – but it is rarely the case o Proportion of the amount of money given for the purchase will be the same when property is sold o Money is evidence of the intention that the parties who are not on the register have an implied trust o Lightfoot v Lightfoot Brown, even though monies were provided, the court found that on the evidence that no intention to acquire an interest existed and so no resulting trust was held to exist. (no interest to create beneficial trust) 2. Constructive trust: when money that Is relating to the property after it has been purchased o Key aspect is whether there was a common intention between the parties that they should have such an interest; once it is found, they look at detrimental reliance o Leading case is Lloyd’s Bank v Rosset [1991] o Heavily criticized but remains the law o Husband and wife decide to buy a farmhouse o Mr. Rosset was getting the money from a trust account and told his wife she can’t be on the title because the people who he was getting the money from didn’t want her to o Mrs. R helped renovate the house and supervised; house was built Mr. R remortgaged the property and defaulted on the payments o Mortgage company repossessed the property o Mrs. R made the argument that she had a beneficial interest in the property and therefore her right to remain in the property was trumped o Question was were there a common intention between parties that Mrs. R should have a common interest o Lord Bridge said no there isn’t any constructive trust o Laid down rules/laws o No implied trust due to the fact that how do they find common intention o First way: was there any express agreement, understanding or arrangement between the parties before or after the purchase?  Look at the words used

Lecture 4 o In previous cases, courts accepted doing things or renovating house as informal things o Lord Bridge: only evidence outside an agreement that will count as an evidence is the solid tug of money for down payment or mortgage and nothing else o Money is the evidence of an intention that the parties agreed that the claimant should have a beneficial interest o How do you quantify the shares? o Two tests: first is how much they expected? Second: Quantify Shares with Joint Tenants o Always 50/50 until these cases o Courts said it can change o Law is that 50/50 is rebuttal having looking at the relationship between the parties o Segal v Prasmon...