Common Intention To Share Ownership Of Land (Institutional Constructive Trusts)

Front 1

Pettit v Pettit

Back 1

Wife inherited the house and husband does some decorating work. They sell the house and buy another with the proceeds. The house is placed solely in the wife's name. Husband tries to claim interest in property due to the work he did on the first house. this fits with the traditional model of presumed purchase price resulting trust. But in this case, a resulting trust was not established. But Lord Diplock said that in cases of couples living together, what should be examined is their common intention.

Front 2

Gissing v Gissing

Back 2

Married couple and the property was in the husband's name. The wife mane contribution to the furniture and landscaping. After they moved in, she became pregnant and became a stay at home mother. He ran off with another woman 10 years later. Question was whether the wife had any interest in the property. Can't use the resulting purchase price trust because her contribution (of looking after the children so as to enable him to work and pay off the mortgage) came about after the property was purchased. Court looked to intention instead and asked whether it was possible to impute intention? Court liked the idea of common intention trust but court couldn't figure out how to create one so again the wife was unable to produce enough evidence. Parliament responded to this problem and created family rights. But remember this legislation doesn't cover married couples.

Front 3

Stack v Dowden

Back 3

Unmarried couple living outside london. The woman was an engineer and the breadwiner. The man did some work round the house. They had 4 children. They sold the house at 3 times the original value and buy a new house in central london which is put in both their names. The money from the sale of the first house was used to purchase the second. The woman paid off the capital mortgage whereas the man payed the interest off. The woman claimed she was owed more than 50% share of the second home. This was the first time the law lords identified that what we are dealing with is not a resulting trust (but a constructive trust) because the purchase price presumed resulting trust presumes the trust reflects the purchase price contributions. But the common intention constructive trust begins with the presumption that they begin with 5050 interests. Evidence of common intention is then used to modify the presumption. Also the court expressly acknowledged that contributions after the purchase may be taken into account in cases of constructive trust. Also court said the contributions 'in kind' can be taken into account not just the money (not the case with resulting trusts). Having formally recognised the common intention constructive trust, the court used it to rebut the presumption of 5050 interests (see quote)

Front 4

Jones v Kernott

Back 4

1) starting point is that equity follows the law and they are joint tenants in both equity and law.

2) the presumption can be displaced by showing:

a) the parties had a different common intention that their respective shares would change

b) that they later formed the common intention that their respective shares would change

3) their common intention is deduced objectively from their conduct

4) in those cases where it is clear that either a) that the parties did not intend joint tenancy at the outset, if (b) had changed their original intention, but it is not possible to ascertain direct evidence or by inference that their actual intention was as to the shares in which they would own property, the answer is that each is entitled to the shares which the court considers fair having regard to the whole course of dealings between them in relation to the property.

5) Each case will turn on its facts. Financial contributions are relevant but there are many other factors which might enable the court to decide what shares were either intended in case (3) or fair (as in case 4).

Front 5

Dicta in Jones v Kernott for case where the property is in one person's name

Back 5

This case is not concerned with a family home which is put into the name of one party only. The starting point is different. The first issue is whether it was intended that the other party have any beneficial interest in the property at all. If he does, the second issue is what that interest is. There is no presumption of joint beneficial ownership. But their common intention has once again to be deduced objectively from their conduct. If the evidence shows a common intention to share beneficial ownership but does not show what shares were intended, the court will have to proceed as at para 51(4) and (5) above.