Trusts and the Family Home: Legal Problem Question

Question

Anna and Ben, an unmarried couple, decided to live together in a house purchased in 2018
for £200,000, with the legal title registered solely in Ben’s name. Ben paid the £50,000
deposit, and both took out a joint mortgage, though only Ben was legally liable for
repayments. At the time of purchase, Ben told Anna, “This house is ours, but it’s in my name
for tax reasons.” Anna, relying on this, contributed £30,000 towards renovating the kitchen
and bathroom and paid household bills, enabling Ben to cover the mortgage. There is no
written evidence of Ben’s statement. In 2023, they separated, and Ben now claims Anna has
no interest in the house. The house is now worth £300,000.

Advise Anna on whether she has a beneficial interest in the house under any equitable
principles, and if so, how her interest might be quantified.

Model Answer

Analysis

To determine if Anna has a beneficial interest in the house, we must consider equitable
mechanisms applicable to sole legal owner cases: express trust, resulting trust, common
intention constructive trust (express or inferred), and proprietary estoppel.

1. Express Trust

An express trust requires a declaration of beneficial interests by the legal owner, evidenced
in writing and signed, İn s 53(1)(b) Law of Property Act 1925 . Ben’s oral statement, “This
house is ours, but it’s in my name for tax reasons,” suggests shared ownership, but without
written, signed evidence, an express trust is unenforceable. Anna cannot claim under this
mechanism.

2. Resulting Trust

A resulting trust is presumed when a non-legal owner makes direct contributions to the
purchase price, implying the legal owner holds the property on trust proportional to
contributions (Springette v Defoe [1992]). Anna’s £30,000 for renovations and household bill
payments are not direct contributions to the purchase price (e.g., deposit or initial mortgage
liability), as rights crystallize at purchase (Curley v Parkes [2004]). Stack v Dowden [2007] and
Jones v Kernott [2011] note resulting trusts are outdated for family homes, favoring
constructive trusts. Anna is unlikely to succeed under a resulting trust.

3. Common Intention Constructive Trust

Per Lloyds Bank v Rosset [1991], a constructive trust in sole owner cases requires a common
intention (express or inferred) and detrimental reliance. No writing is needed (s 53(2) LPA
1925).
Express Common Intention:

Common Intention: Ben’s statement, “This house is ours, but it’s in my name for tax
reasons,” is an assurance implying shared ownership, akin to “excuse cases” (Eves v Eves
[1975], Grant v Edwards [1986], Hammond v Mitchell [1991]). It is objectively assessed
(Jones v Kernott [2011]) and satisfies the first element.

Detrimental Reliance: Anna’s £30,000 for renovations and household bill payments, which
freed Ben’s funds for the mortgage, constitute detrimental conduct, as they are actions she
wouldn’t reasonably undertake without expecting an interest (Grant v Edwards). This
satisfies the second element.

Conclusion: Anna can claim a beneficial interest under an express common intention
constructive trust.

Inferred Common Intention:

If the court finds no express agreement, intention can be inferred from conduct (Rosset).
Anna’s household bill payments are indirect financial contributions, enabling mortgage
payments (Le Foe v Le Foe [2001]). Stack v Dowden and Jones v Kernott support broader
factors (e.g., finances, relationship) to infer intention. Her £30,000 renovation contribution
may also infer intention (Aspden v Elvy [2012]). These contributions double as detrimental
reliance (Midland Bank v Cooke [1995]).

Conclusion: Anna could also claim under an inferred constructive trust.

Quantification:Ben’s statement implies equal shares, but if unclear, Stack v Dowden and
Jones v Kernott guide quantification. Courts deduce intention from conduct (e.g., Anna’s
contributions, joint mortgage, relationship). If intention cannot be deduced, courts impute a
fair share based on the whole course of dealing (Aspden v Elvy). Given Anna’s significant
contributions and reliance, a court might award 40-50% of the beneficial interest, reflecting
her financial and indirect support.

4. Proprietary Estoppel

Proprietary estoppel requires: (1) assurance, (2) detrimental reliance, and (3) denial of rights
(Pascoe v Turner [1979]).

Assurance: Ben’s statement is an assurance of shared ownership.

Detrimental Reliance: Anna’s £30,000 renovations and bill payments are detrimental.

Denial: Ben’s claim that Anna has no interest triggers estoppel.

Remedy: Unlike constructive trusts, estoppel aims for minimum justice, balancing
expectation and detriment (Jennings v Rice [2002]). Remedies could include a share (e.g.,
40%), occupancy (Greasley v Cooke [1980]), or monetary compensation. A court might award
a proportional share or compensation for Anna’s £30,000 and contributions.

Conclusion

Anna is most likely to succeed under an express common intention constructive trust, as
Ben’s assurance and her detrimental reliance (£30,000 renovations, bill payments) establish a
beneficial interest. Alternatively, an inferred constructive trust or proprietary estoppel could
apply, based on her contributions. Her share is likely 40-50%, quantified per Stack v Dowden
and Jones v Kernott, considering her contributions and the parties’ course of dealing. She
should pursue a constructive trust claim for a clearer ownership interest, with estoppel as a
fallback for a flexible remedy.

Trusts and the Family Home: Legal Problem Questions and Answers

1. Express Trust

Question

Clara and David, an unmarried couple, purchased a house in 2020 for £250,000, registered
solely in David’s name. At purchase, David orally told Clara, “This house belongs to both of us
equally.” Clara contributed to household expenses but not the purchase price. There is no
written evidence of David’s statement. In 2024, they separated, and David claims Clara has
no interest. Advise Clara on whether she has a beneficial interest under an express trust.

Answer

An express trust requires a legal owner to declare beneficial interests, evidenced in writing
and signed, per s 53(1)(b) Law of Property Act 1925 (Chapter 3). David’s oral statement, “This
house belongs to both of us equally,” suggests a shared beneficial interest. However, without
written, signed evidence, the express trust is unenforceable. Clara’s household expense
contributions do not create an express trust, as they do not meet the formalities
requirement. Clara cannot claim a beneficial interest under an express trust. She should
explore other equitable mechanisms, such as a constructive trust or proprietary estoppel.

2. Resulting Trust

Question

Emma and Frank, cohabitants, bought a flat in 2019 for £180,000, registered in Frank’s sole
name. Emma contributed £40,000 to the deposit, while Frank paid £30,000 and took out a
mortgage. Emma later paid household bills but not mortgage repayments. In 2023, they
separated, and Frank claims Emma has no interest. Advise Emma on whether she has a
beneficial interest under a resulting trust.

Answer

A resulting trust is presumed when a non-legal owner makes direct contributions to the
purchase price, implying the legal owner holds the property on trust proportional to
contributions (Springette v Defoe [1992]). Emma’s £40,000 deposit is a direct contribution,
suggesting Frank holds the flat on resulting trust for her in proportion to her contribution
(£40,000 of £70,000 total deposit = ~57%). This presumption is rebuttable by evidence of a
gift or loan (Curley v Parkes [2004]), but no such evidence is indicated. Emma’s later
household bill payments are not direct contributions, as rights crystallize at purchase. Stack v
Dowden [2007] and Jones v Kernott [2011] note resulting trusts are outdated for family
homes, but they remain relevant here as Emma’s contribution was significant. Emma likely
has a ~57% beneficial interest under a resulting trust, though courts may prefer a
constructive trust analysis.

3. Common Intention Constructive Trust (Express)

Question

Grace and Henry, an unmarried couple, purchased a cottage in 2021 for £300,000, registered
in Henry’s sole name. Henry told Grace, “This is our home, but it’s in my name to avoid legal
complications.” Relying on this, Grace spent £25,000 renovating the garden and contributed
to mortgage payments. There is no written evidence of Henry’s statement. In 2024, they
separated, and Henry denies Grace’s interest. Advise Grace on whether she has a beneficial
interest under an express common intention constructive trust.

Answer

Per Lloyds Bank v Rosset [1991], an express common intention constructive trust requires: (1)
an express agreement for shared ownership, and (2) detrimental reliance. No writing is
needed (s 53(2) LPA 1925).
Common Intention: Henry’s statement, “This is our home, but it’s in my name to avoid legal
complications,” is an assurance implying shared ownership, akin to “excuse cases” (Eves v
Eves [1975], Grant v Edwards [1986]). It is objectively assessed (Jones v Kernott [2011]).

Detrimental Reliance: Grace’s £25,000 garden renovations and mortgage contributions are
significant actions she wouldn’t undertake without expecting an interest (Grant v
Edwards).Grace can claim a beneficial interest under an express constructive trust. If the
agreement doesn’t specify shares, courts quantify per Stack v Dowden [2007] and Jones v
Kernott [2011], considering contributions and conduct. Grace’s significant contributions
suggest a 40-50% share.

4. Common Intention Constructive Trust (Inferred)

Question

Isabel and James, cohabitants, bought a house in 2020 for £220,000, registered in James’s
sole name. Isabel contributed £15,000 to the deposit and paid household bills, enabling
James to cover the mortgage. There was no express agreement about ownership. In 2023,
they separated, and James claims Isabel has no interest. Advise Isabel on whether she has a
beneficial interest under an inferred common intention constructive trust.

Answer

Per Lloyds Bank v Rosset [1991], an inferred common intention constructive trust arises
when intention is deduced from conduct, also serving as detrimental reliance.

Common Intention: Isabel’s £15,000 deposit is a direct contribution, inferring a shared

intention (Midland Bank v Cooke [1995]). Her household bill payments are indirect financial
contributions, freeing James’s funds for the mortgage, further inferring intention (Le Foe v Le
Foe [2001], Stack v Dowden [2007]).

Detrimental Reliance: The £15,000 deposit and bill payments are detrimental, as Isabel
wouldn’t contribute without expecting an interest.Isabel can claim a beneficial interest.
Quantification per Stack v Dowden (para 69) and Jones v Kernott [2011] considers
contributions and conduct, likely granting Isabel a 20-30% share, reflecting her deposit and
indirect support. Domestic contributions alone (e.g., housework) would not suffice (Burns v
Burns [1984]).

5. Impact of Stack v Dowden and Jones v Kernott

Question
Kate and Liam, an unmarried couple, purchased a house in 2019 for £260,000, registered in
Liam’s sole name. Kate contributed £20,000 to renovations and paid utility bills, enabling
Liam to pay the mortgage. Liam once said, “We’ll share everything one day,” but there was
no clear agreement on ownership. In 2024, they separated, and Liam denies Kate’s interest.
Advise Kate on how Stack v Dowden [2007] and Jones v Kernott [2011] impact her claim for a
beneficial interest in a sole legal owner case.

Answer

Stack v Dowden [2007] and Jones v Kernott [2011], though joint owner cases, provide obiter
dicta for sole legal owner cases. The presumption is that the sole legal owner (Liam) is the
sole beneficial owner, rebuttable by the non-owner (Kate) proving a beneficial interest (Stack,
para 56).

Acquisition: Kate must show a common intention, deduced objectively from conduct (Jones v
Kernott, para 51). Stack (para 69) lists factors: contributions, finances, relationship. Kate’s
£20,000 renovations and utility bill payments (indirect contributions, Le Foe v Le Foe [2001])
infer intention, satisfying Rosset’s inferred trust criteria (Curran v Collins [2015]). Liam’s
vague statement, “We’ll share everything one day,” may not suffice as an express agreement.

Quantification: If a beneficial interest is established, Stack/Kernott guide quantification.

Courts deduce intention from conduct; if unclear, they impute a fair share based on the
whole course of dealing (Aspden v Elvy [2012]). Kate’s contributions suggest a 20-30%
share.Kate can claim an inferred constructive trust, with Stack/Kernott broadening Rosset’s
approach to consider her contributions holistically. Imputation applies only at quantification,
not acquisition.

6. Proprietary Estoppel

Question

Mia and Nathan, cohabitants, lived in a house purchased in 2020 for £200,000, registered in
Nathan’s sole name. Nathan told Mia, “This house will be yours one day.” Relying on this, Mia
spent £10,000 on repairs and cared for Nathan’s elderly mother, saving care costs. In 2023,
they separated, and Nathan seeks to evict Mia. Advise Mia on whether she has a claim under
proprietary estoppel and the potential remedy.

Answer

Proprietary estoppel requires: (1) assurance, (2) detrimental reliance, and (3) denial of rights
(Pascoe v Turner [1979]).
Assurance: Nathan’s statement, “This house will be yours one day,” is an assurance of a
future interest.

Detrimental Reliance: Mia’s £10,000 repairs and caregiving for Nathan’s mother are
significant detriments, undertaken expecting an interest (Jennings v Rice [2002]).

Denial: Nathan’s attempt to evict Mia triggers estoppel.Mia can claim proprietary estoppel.
Unlike constructive trusts, which establish ownership, estoppel provides flexible remedies to
achieve minimum justice (Stack v Dowden [2007]). Remedies may include a share (e.g., 20-
30%), occupancy (Greasley v Cooke [1980]), or compensation proportional to detriment
(Jennings v Rice: £200,000 awarded, not full house value). Given Mia’s contributions, a
monetary award (~£10,000-£15,000) or a modest share is likely, balancing her expectation
and detriment.