The statement made by Mustill L. J in Grant v Edward (1986),1 raises difficult, but absorbing issues. The courts have frequently expressed the view that it desirable, for the transfer of the property to contain express declaration of trust concerning the beneficial interest. Nevertheless, in reality, this is not always the case. It is frequently encountered, as is always seen in this area of law, that couples do not formulate their intentions at the time of the conveyance and purchase of the property, but consider the matter only when their relationship has dissolved.
Thus, the law in this area is widely regarded as unsatisfactory. The Existing Law It has been suggested that Lloyd's Bank v. Rosset2 removed all doubt and conflict produced by earlier authorities as to when and how one could acquire a beneficial interest in the matrimonial home. 3 However, the case is leveled with criticism. Lord Bridge distinguishes between two completely different types of cases:
First Category – the establishment of a constructive trust can be demonstrated by the existence of a common intention between the parties that the ownership of the land was to be shared. Furthermore, the intention to be established is not merely an intention to share occupation of the property, but an intention to share beneficial entitlement. Trying to understand the reasoning behind Lord Bridge's requirement for 'express' discussion is confusing.
Clearly he has gone beyond his intentions and narrowed the possibility of claiming an interest and added to the entrenched criticism of the 'common intention constructive trust'. 4 One is left to wonder how Lord Bridge justifies this approach? Since he is attempting to clarify the law, it would seem appropriate that previous authorities would be the basis of his decision, as he describes in Eves v. Eves5 and Grant v. Edwards6 outstanding examples of the existence of express common intention.
In considering both cases, the facts would suggest that there was no real agreement between the parties to share the ownership of the property concerned. The approach of requiring 'express discussion' would leave constructive trust arising in no domestic circumstances. In considering the scope of detrimental reliance required to establish a constructive trust if there was an express common intention that the ownership of the land was to be shared, it is evident that Lord Bridge has advocated a narrow standard.
Lord Bridge's other requirement is for the 'express discussion' to occur "prior to acquisition. " Subsequent authority to, Lloyd's Bank v. Rosset7 has expressed a similar view to the extent that a court can look to an agreement, arrangement or understanding after acquisition to the property. 8 Second Category – where there is no express agreement between the parties, both the common intention and the claimant's reliance must be inferred from the parties conduct. Such a conduct must satisfy a high evidentiary requirements i.
e. financial contribution. Lord Bridge declared that Mrs. Rosset's contribution to the decoration of the property in question "could not possibly justify" the inference of a common intention. Even though Lord Bridge does not rule out the possibility of a lesser contribution in his criteria (he only casts doubts on whether less will suffice), he is clearly not willing to infer a common intention to share the ownership of land from conduct other than a direct contribution to the purchase price.
Lord Bridge's criteria are called into inquiry with reference to what previous authorities was the basis for this narrow approach? Both cases held that the level of contribution was sufficient so as to infer a common intention. In Grant v. Edwards, the claimant had made a substantial contribution to housekeeping expenses, which was held to be sufficiently so as to infer a common intention. Nevertheless and in total disregard to these outcomes, Lord Bridge concluded that the conduct of neither of the claimants had been sufficient to infer a common intention.
Therefore, it can be concluded that "Lord Bridge considers little reference to take an individual view of the circumstances of each case to decide whether it is just to grant a beneficial interest",9 rather the contribution must be direct, no form of indirect contribution however substantial will constitute grounds for a beneficial interest. In Burns v. Burns10, the claimant was only denied a beneficial interest because she had not in fact made any such indirect contributions. Consequently, it appears Lord Bridge does not appreciate Lord Diplock's statement11
The nature of Lord Bridge's second category begs the question of his intentions. The exclusion from a share to a beneficial interest for a person whose contributions are indirect clearly will have prejudicial ramifications. The courts should be concerned in striking a balance between claims of minor contributions and substantial contributions. Therefore, to adopt Lord Bridge's approach of searching for 'artificial' common intentions and to completely disregard substantial indirect contribution indicates a lack of understanding to the practicality and reality of the needs of modern cohabitants.
Perhaps the claimant should rely on 'proprietary estoppel. ' The distinction between estoppel and constructive trust is blurred, as found in Lloyd's Bank v. Rosset. However, it is not extinct, and requires only that "it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment. "12 Remaining problems & uncertainties in the law Legal implications can arise where couples cohabit together outside marriage. In some cases, rights and obligations can come into existence without either party realizing it.
"The law governing property rights of cohabitants has been widely criticized for its inadequacy and inconsistency. Perhaps the most serious flaw of the current law governing the allocation of property after the breakdown of an unmarried partnership 13 Complexities surround the fact that legislation to date has no significance to relation other than marriage. Subsequently, ordinary equitable rule of law applies, which demands that the acquisition of property in land be made by written agreement, deeds, or contracts. 14 Cohabitants do not always see this.
In conclusion to this matter, constructive, resulting and implied trust of land do not therefore require they're to be a written agreement between the parties when acquiring property. 15 These rules have been seen in Lloyd's Bank v. Rosset. The effect of this is a sense of prejudice against the party not earning an income and bias towards the person who is. Furthermore, these strict rules are not in line with the reality of modern cohabitation and as a consequence their application becomes inconsistent. There may be said to be two main reasons for this problem surrounding the application of these rules, as are outlined by one critic:
There may be a marked degree of informality in the way the parties have arranged their shared private life. A relationship based upon trust does not provide national environment for express discussion about legal formalities. "16 The Law Commission Paper17 indicated the concern of land and a plan of action in the law governing property rights of cohabitants. The report attempts to address these problems by devising a scheme that would determine when a person who was not the owner of the home obtained an interest in it, and also what values of that share would be.
The conclusion from this report is that we are not closer to an equitable solution in solving inherent complexities in this area of law. The reason for the Commission's failure was that they were unwilling to grasp the extent of the social changes without society: thousands of people are cohabiting outside marriage today. However, the Commission tried to apply their view of the law, which can lead to unfairness; this is because it lacks structure and coherence. There is no confidence in a solution of this report, so much so that the Commission, who are aware of the problems, is reluctant to make further proposals in this area.
So what problems with the law has the Law Commission highlighted? The problems are rooted in the judicial approach of trying to lay down a uniform strategy for the determination of beneficial interest in the home. Extensive variations exist in the approach from one precedent to another, each trying to maintain a sense of justice for those claiming, while at the same time not wishing to depart from arguably outdated precedent. Arguably, both cannot succeed. Furthermore, where couples are in a same-sex cohabiting relationship, the law imposes no commitment or obligation upon them.
In the event of death, sickness or separation, therefore, legal remedies are uncertain and complex. Moreover, it is not stated in law, that in the event of selling the 'Family Home' the defendant should not be able to avoid representation and that as such the claimant's interest should be binding a third party, without notice in the case of unregistered land, or as an overriding interest under Schedule 3, s. 29 (3) (a) (ii),18 if the claimant is in actual occupation.