Unmarried couple

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Date added: 17-06-26

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Parties whether married or unmarried may contribute to the purchase of a home for themselves, but subsequent events may give rise to a dispute when a relation break up as to the ownership of the property. The problem above is for us to advise Anne upon whether Brian has any claim to a beneficial interest in the family home and how large that share might be as Anne and Brian, who are unmarried put the legal estate of the house in Brian’s name and no written declaration of trust for their oral agreement that they are joint tenants in equity. If Anne and Brian are married couple, then under the Matrimonial Causes Act 1973 the court has wide discretionary powers to order the distribution of the couple’s property disregard who owns the property legally or equitably. English law does not presume “community of ownership” of land even when two adults have lived together in a stable relationship for a long period of time. The solution for cohabitees who are neither married nor in a civil partnership to gain statutory protections would be to write down and legally agree how they intend to share the property, the principle stated in Pettit v Pettit. The express trusts of land are subject to additional formalities as prescribed in Section 53(1)(b) Law of Property Act 1925. The statutory prescription is that, in order for an express trust of land to be enforceable, the declaration of trust muts be evidenced in writing, which is signed by settlor. However, problem often raised as they do not make a written declaration of trust as the situation faced by Anne and Brian in the question. In absence of statutory protection under the Matrimonial Causes Act 1973 and express trust for Anne, the court is, therefore in effect, looking backwards at what Anne and Brian decided about the property and determine what the property interest would be for Anne under equity. Where the legal title to property has been conveyed in the name of one party only, and his partner wishes to claim a beneficial interest, the claimant is required to establish the existence of a common intention constructive trust. The presumptions of resulting trust and advancement will not be readily adopted in order to quantify the interests of the parties because such presumptions have outlived their usefulness in this context. Lord Diplock in Gissing v Gissing replaced the presumptions with “common intention constructive trusts”. The effect is that where the legal title is vested in the name of one party, where in this case, legal title is vested in name of Brian, the inference is that equity follows the law and Brian with the legal title is prima facies solely entitle to the equitable interest. If the party without the legal title, Anne wishes to claim an interest in the property, she bears the legal burden of proving that both parties had an intention to give Anne an interest in the property which was relied on to her detriment. The existence of a common intention may be express or implied by reference to the circumstances of each case. The court is required to interpret the surrounding facts with a view to ascertaining the intentions of the parties with regard to a share in the home. According to Lord Bridge in Lloyds Bank plc v Rossett, a case where the property has been registered in the name of one of the parties only, there are two types of common intention constructive trust, which Rosset 1 and Rosset 2 (express agreement plus detriment reliance OR substantial direct financial contribution to purchase). Lord Bridge explained Rosset 1 that to establishing a beneficial interest under a constructive trust is to establish that prior to the acquisition of the home (or exceptionally at some later date), the legal owner and the claimant reached “an express agreement, arrangement, or understanding” to share the beneficial ownership of the home. Provided that the arrangement was expressed in discussion between the parties, it does not matter that the terms were imprecise and that the parties’ recollection of the express agreement is “imperfect”. In addition to proving that there was an express agreement or arrangement, the claimant must also show that she acted to her “detriment” or significantly altered her position in reliance on the agreement. Rosset 2 is where no evidence of detrimental reliance upon an express agreement, arrangement, or understanding to share, the parties “common intention” to share must be inferred instead from their conduct. However, inferring a common intention from contributions to the purchase price, was criticized because it failed to take into account non-financial contributions, such as to the running of the home. This is different with the judgment in Gissing v Gissing that contributions other than financial can create an interest in the home. In Stack v Dowden, Lady Hale said that there is undoubtedly an argument for saying, as did the Law Commission in Sharing Homes, A Discussion Paper, para 4.23, that the observations, which were strictly obiter dicta, of Lord Bridge of Harwich in Lloyds Bank plc v Rossett have set that hurdle rather too high in certain respects. The “common intention” in express trusts must be to “share the home”, not just to share their lives. Thus, the claimant in Thomas v Fuller-Brown carried out extensive building work on the defendant’s house and agreed that this was in return for her keeping him would not help to establish an interest in family home as there is no discussion of him having half share. Furthermore, the common intention between the parties must be “expressed”, as in Springette v DeFoe, Dillon LJ said that the it is not enough that the parties happened to be thinking on the same lines in her uncommunicated thoughts. Nevertheless, some criticisms received as this has not deterred the courts from interpreting express statements according to uncommunicated thoughts of the persons making them, sometimes in ways that seem entirely inconsistent with the actual words employed. In Grant v Edwards and Eves v Eves, the claimants established beneficial interest in the defendant’s lad even though the expressed understanding between the parties in each case was that the defendant had no intention of placing the claimant’s name on the legal title. In Grant v Edwards, the defendant explained that he did not want to place the claimant’s name on the title because it might prejudice matrimonial proceedings pending between the defendant and his wife. In Eves v Eves, the defendant explained that he would not be placing the claimant’s name on the legal title as she was too young. In both cases, the courts held that the express “explanations” were, in reality, “excuses” and that they therefore constituted express evidence of an unspoken understanding between the parties that the claimant was entitled to a beneficial interest in the land. Simon Gardener has criticized this type of reasoning: If I give an excuse for rejecting an invitation to what I expect to be a dull party, it does not mean that I thereby agree to come: on the contrary, it means that I do not agree to come, but for one reason or another I find it hard to say outright. It could then be suggested that the fact that one party lies is explicit evidence that there is no intention to share the family home. Therefore, Anne able to establish her beneficial interest as there is expressed common intention that they orally agreed joint tenant in equity. Once an express common intention is found, the person seeking to establish the existence of a constructive trust must prove that she relied on that agreement to her detriment. The facts that that Anne had pay maintenance for their children, remains in the house and pays for all the outgoings and also undertakes extensive renovation and maintenance work on the house, paying for the materials and doing the manual work herself, whether or not these would amount to detrimental reliance? In Grant v Edwards, Browne-Wilkinson VC stated, following Fox LJ in Midland v Dobson, that mere common intention is not by itself enough, the claimant has also to prove that she has acted to her detriment in the reasonable belief by so acting she was acquiring a beneficial interest. There are two main barriers to proof of detrimental reliance. The first is to demonstrate that the claimant has suffered a detriment. On one view, the claimant who gives up a career to care for a home and children has been liberated from the need to work, has enjoyed the delight of daily contact with her children, and has lived rent free for several years in a house that is legally owned by someone else. Browne-Wilkinson VC was alert to these obstacles in Grant v Edwards, when he held that setting up house together, having a baby and making payments to general housekeeping expenses may all be referable to the mutual love and affection of the parties and not specifically referable to the claimant’s belief that she has an interest in the house. However, their Lordships decided that Mrs Grant had acted to her detriment and granted her a half-share in house. Nourse LJ described detrimental reliance as “conduct on which the woman could not reasonably be expected to embark unless she was to have an interest in the home”. The second barrier the claimant will face, assuming a detriment has been established, is to prove that the detriment was suffered as a causal consequence of the express arrangement between the parties. As Browne-Wilkinson VC mentioned, referring to Eves v Eves, there has to be link between the common intention and the acts relied on as a detriment. Therefore, Anne may rely on both Rosset 1 and Rosset 2 to establish that she having beneficial interest over the family home property as Anne pays the whole cost of the house with money given by her father would be considered that it is direct financial contribution to purchase price under Rosset 2 regardless there is any common intention. Besides , Anna may also establish beneficial interest under Rosset 1 as Anne and Brian agree that they are joint tenants in equity amounted to “common intention” and it is “expressed” by oral agreement. Further, two main barriers to proof of detrimental reliance mentioned by Nourse LJ also is not a problem for Anne as she doing manual work for the renovation of home. This may constitutes as “conduct on which woman could not reasonably be expected” as manual work is something should expected done by man. As stated in Stack v Dowden, there is a two-stage procedure the courts approach the question, establishing a beneficial interest is stage one and stage two is to establish the size of that interest. Therefore, since we have already proved stage one that Anne has beneficial interest in the family home, the further we have to prove for stage two is to quantify the interest or shares in the property. The size of the shares is determined according to the terms of the express trust, if they ever created one as stated in Goodman v Gallant, this has been confirmed in Clough v Killey that when the parties expressly agree on beneficial shares, provided there is some detrimental reliance, that understanding will almost certainty be enforce by the courts. In the absence of any express trust, the question of quantification depends upon the facts of the case. If the non-legal owner has established some interest under a constructive trust by either of the Rosset types, but there is no evidence that the parties expressly agreed the size of their respective shares, it falls to the court to identify the shares that they probably intended, on the basis of “a survey of the whole course of dealing between the parties relevant to their ownership and occupation of the property”, as stated in Midland Bank v Cooke. This can include such matters as labour, housework, childcare and so on. This, however received criticism as represents a departure from the inflexible approach laid down in Burns v Burns, in which May LJ held that the court was only entitled to take into account direct financial contributions. The fact that Anne and Brian orally agreed that they are joint tenant in equity, but it is only an agreement to share, but in unspecified proportions. In Oxley v Hiscock, Chadwick LJ stated that it must not be accepted that the answer is that each is entitled to the share which the court considers fair having regard to the whole course of dealing between them in relation to the property. This includes arrangements which they make from time to time in order to meet the outgoings, i.e. housekeeping, mortgage contributions, council tax and utilities, which have to be met if they are to occupy the property as a home. The court is simply imputing a common intention as to the parties’ respective shares on the basis of that which, in the light of all the material circumstances, including the acts and conduct of the parties after the acquisition is shown to be fair and reasonable. The main argument that Anne might makes is that Brian has totally no shares in the house as they make an oral agreement when Brian moves out of their house, that as he does not plan to pay any maintenance for their children, and renounces any claim that he might have to the beneficial ownership of the house. Therefore, the issue here is whether or not the common intention can change over the time? Whether an initial common intention as regards the allocation of the beneficial interest can be considered to have changed over time was considered in Jones v Kernott. In this case, a couple had purchased a house which was conveyed into their joint names. They lived together for 8 years before separated. It was accepted that, at that time, they held the property beneficially in equal shares, there being insufficient evidence to rebut the presumption that their beneficial interests followed the legal title. The claimant continued to live in the house with their children, whilst the defendant had acquired alternative accommodation and made no further contribution towards the acquisition of the property. The claimant assumed sole responsibility for paying the mortgage, and for repairs and improvements of the property. The defendant severed the joint tenancy at the point when the claimant asserted that their beneficial interests were no longer equal. The Supreme Court held that, after their separation, the common intention of the parties had changed. Lady Hale and Lord Walker at para 5.1 stated that the starting point is that equity follows the law and they are joint tenants both in law and equity. The presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change. Their common intention is to be deduced objectively from their conduct, and if it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they should own the property, the court will then considers the fair shares having regard to the whole course of dealing between them in relation to the property. However, Lady Hale also mentioned that each case will turn on its own facts, and financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended or fair. Therefore, it is confirmed in Jones v Kernott case that the parties’ initial common intention as to the allocation of the beneficial interest had changed at the time Brian moves out and make an oral agreement renounces any claim that he might have to the beneficial ownership of the house. Even though the common intention had change when Brian made the oral agreement to give up the shares of the house, however there is another problem for court to consider whether the family home now belongs completely to Anne or some little shares still remains with Brian. In Stack v Dowden, Baroness Hale at para 69 stated that some of the factors to be taken into account, such as legal advice at the time of purchase, discussions between the couple, the reason they chose a joint tenancy, the reason they bought the house, who paid for the mortgage, separate or joint finances, who paid household expenses, the characters and personalities of parties to show true intentions, extension or substantial improvement to the house. She also mentioned that an arithmetical calculation is not so important in deciding the shares of family home property. According to Baroness Hale in Stack v Dowden at para 69, ‘in law, “context is everything” and the domestic context is very different from the commercial world’. This is hard to square with recent decision in which courts have proceeded on the assumption that there is prima facie no substantial difference between domestic and business contexts when deciding fair shares under a constructive trust, e.g. Gallarotti v Sebastianelli, a case of two friends living together. If Anne able to show that she has the beneficial interest of the family home property, she needs to show further that the common intention had changed when Brian moves out from the property and family home belongs completely to her. From my view, I think Anne able to argue and claims that she owned the whole shares of the property regardless any agreement made between Brian and her, as (i) she paid for the whole purchase price of the property, (ii) she remains in the house and pays for all the outgoings, including taking care of their three children, (iii) she also undertakes extensive renovation and maintenance work on the house, paying for the materials and doing the manual work herself that it should be done by man normally, (iv) no fact to show in question whether any contributions made by Brian before he leaves the home. Even if he did makes any contributions for their home, for his three children, we may still able to argue that he stayed in the house for 5 years, but left everything to Anne for 18 years and stop paying anything afterwards. It is unfair to Anne if Brian able to get any shares as he did not contributes any to the purchase price and he never contributes anything to the house, to their children in the period of 18 years he disappears. Despite the best efforts of the judges in the House of Lords and Supreme Court, there remains much uncertainty as to when the presumption that the beneficial interests should follow the legal interests will be rebutted. Although the presumption is to be rebutted in exceptional circumstances, such as in case of Stack v Dowden and Jones v Kernott. It is however, uncertain what makes a case exceptional and so allows the use of the holistic inquiry by reference to a myriad of factors, the significance of those factors being unclear. The sound of reforming the law became stronger after the case Pamela Curran v Brian Collins as the judge blasts ‘sexist laws’ that left woman destitute after split from partner. Judge Sir Nicholas Wall said that women tended to lose out in most cases under the current system. Lord Justice Toulson also described the current law as ‘unfair’, however, judge should follow the laws instead of ‘sympathy of human’. Therefore, although unmarried couples believe that they are protected by common law as if they were a wife or a husband should still record each party’s intentions in a legally binding document at the outset. There are some attempts to reform the law, such as Lord Lester’s Cohabitation Bill, Law Commission Report (2008), Inheritance(Cohabitants) Bill been suggested in 2012 and the Cohabitation Rights Bill in 2013. Sir James Munby has also urged that reform is ‘desperately needed’. However, the parliament remain the law unchanged even after so many reforms and bills been suggested.
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