Land Law – Past Paper Question 2 PDF

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Past Paper question answered - used paper from 2018-2019....

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Land Law – Past Paper Question To what extent does the case of Lloyds Bank v Rosset [1991] 1 AC 107 represent the current law on the property rights of couples? Should it? Lloyds Bank v Rosset [1991] is an important land law case that draws on the beneficial rights of couples owning property together. In this case a wife assisted in renovating a family home whose legal title vested solely in the husband’s name. Mr. Rosset (the husband) had bought this house with his family trust money, which has insisted on sole ownership as a condition of using that money. Mr. Rosset has secured a loan against the property from the complainant, Lloyds Bank. Although, Mrs. Rosset had helped in the building and decorating of the property, Mr. Rosset defaulted on his payments and the complainants sought repossession of the property. The main issue in this case was concerned with whether Mrs. Rosset has beneficial interest in the house and if she was entitled to stay in the property under s.70(1)(g) of the Land Registration Act 1925, which states that if a person is in actual occupation of the property and has an equitable interest under a trust, would be able to claim an overriding interest. The complainants argued that Mrs. Rosset did not have rights over the property and her renovations did not allow equitable interest to arise. It was held that the defendant did not have beneficial interest in the property nor for the renovations; she had only helped with the physical building and redecorating of the house. There was no discussion or agreement between Mr. Rosset and Mrs. Rosset regarding the ownership of the property and without and express agreement, there could be no beneficial interest for the common intention needed to form a constructive trust. Mrs. Rosset’s work on the house was not enough to form an equitable interest. Thus, Lloyds Bank were successful. For 17 years the judgment of Rosset was followed by the courts amongst other couples and break down of relationships regarding property owned by a sole owner. This meant that any contribution, other than financial contributions, would not amount to an equitable interest in the property. Furthermore, if there was no express declaration of common intention constructive trust based on the TR1 form, there would be no beneficial interest shared amongst the individual in the couple who is not the owner of the property, this came to be known as the Rosset test. However, in Stack v Dowden, Lord Walker and Baroness Hale made criticisms of the Rosset test. In Stack, an unmarried couple, having lived together for 18 years, bought a house to live in with their four children. The lady contributed more than 50% of the purchase money, with legal title being registered in the joint names. No declaration of trust was made indicating how the beneficial interest should be held. Upon the relationship breaking down, the House of Lords affirmed that where there is a joint tenancy at law, the starting point is to assume a beneficial joint tenancy, i.e. equal shares. However, taking into account all the dealings between the parties especially the fact that they always had their financial affairs separate, the lady was deemed to be entitled to a higher than 50% shares in the house. The principle coming from this case was that the quantum of beneficial interest under a constructive trust should be calculated with regard to the whole course of dealing between the parties and not merely by reference to the actual financial contributions. This principle, decided after Rosset, proves the principle in Rosset wrong. Instead of looking at financial contributions alone, Stack sets the precedent that whole course of dealings should be evaluated.

Furthermore, in Jones v Kernott, an unmarried couple co-habiting, Mr. Kernott and Ms. Jones, purchased a home with a mortgage in joint names. The couple co-habited the home and contributed to its expenses for eight years, after which Mr. Kernott left the property and made no further contributions. Ms. Jones remained in the property with their children and paid all further expenses towards the acquisition of the property. The question arose as to the beneficial interest that each party had in the property, in light of its registration under joint names as well as their ensuing conduct in relation to it. The Supreme Court upheld that, if a property is purchased in joint names for a couple, there is a presumption that their beneficial interests in the property coincide with their legal estate. The Court placed emphasis that the presiding presumption is reflective of a couple’s joint venture to purchase property together, underpinned by an emotional and economic relationship of trust that does not hold each party separately account financially. However, albeit with a high threshold, this presumption can be rebutted by evidence concerning subsequent conduct in relation to the property, such as unequal contributions to the acquisition of the property under a mortgage. In this case, the Court deducted that “objectively from the parties’ conduct” following from the initial joint registration, there can be no presumption of joint beneficial ownership in a family home. Accordingly, the Court held that each of Mr. Kernott and Ms. Jones hold differing beneficial shares in the property that are reflective of their respective contributions to the house. Overturning the Court of Appeal’s previous decision, this was determined to be 10% for Mr. Kernott and 90% for Ms. Jones. This again goes against the Rosset test. Jones and Stack prove that the law is moving on from Rosset. However, as deducted from the facts of Jones and Stack, these cases involved joint tenancy and a breakdown of a relationship occurs. Whilst in Rosset, the Court was concerned with sole owners and then a breakdown of a relationship, and where beneficial interest stands then. When looking at single owner cases the Courts referred to cases such as Eves v Eves and Grant v Edwards. In both these cases, where the parties who had cohabitated were unmarried, the female partner had clearly been led by the male partner to believe, when they set up their home together, that the property would belong to them jointly. In Eves the male partner had told the female partner that the only reason why the property was to be acquired in his name alone was because she was under 21 and that, but for her age he would have has the house put into their joint names. He admitted in evidence that this was simply an “excuse”. Similarly, in Grant the fame partner was told by the male partner that the only reason for not acquiring the property in joint names was because she was involved in divorce proceeding and that, if the property were acquired jointly, this might operate to her prejudice in those proceedings. Although in Stack Lord Walker stated that Lord Bridge’s observations were justified in the 1990s but that the “law has moved on”. However, despite this Stack can be distinguished from Rosset as it was a case involving two legal owners and not single legal owners and a person claiming beneficial interest. In regard Lord Walker’s criticism was forceful obiter dicta and did not repeal Rosset. Rosset which as a House of Lords case, must be repealed by a later case of equal authority i.e. the Supreme Court, must be according to the doctrine of stare decisis, still be seen as the leading case on constructive trust claims regarding single legal owner properties. However, to conclude, I would like to point out that although due to the doctrine of stare decisis, Rosset may still be the leading case for constructive trust claims for single legal owner properties, not many couples in this day and age actually own property under one

name. With women having their own financial status and income as well as a more equal view on property ownership, there is a very low percentage of couples owning property under one name. Therefore, I would like to agree with Lord Walker when he states that the law is moving on....