Deck 7: Interests in the Family Home; and Constructive Trusts

Question 1

Which of the following statements is false in relation to intervention of equity in the family home and the devices it employs?

A) Many co-habiting couples do not think about their property entitlements on the breakdown of the relationship, so do not enter into express trusts, and equity must fill the gap.
B) The operation of resulting trusts is based on the rebuttable presumption of the purchase money resulting trust, and may be of considerably reduced importance in the modern day.
C) Equity, through a variety of mechanisms, provides rights akin to marriage to non-marital heterosexual and same-sex cohabitants.
D) Proprietary estoppel, while similar in requirements to a constructive trust, differs in the range of remedies available to meet the cause action (equity) established through the doctrine.

Answer 1

C

Question 2

If you had to advise an unmarried couple how best to protect their claims to their shared home, which of the following actions would you suggest they take?

A) Make sure they have both contributed to the purchase price of the property
B) Make a written declaration of trust
C) Make sure that both of their names appear on the legal title to the home
D) Rely on mutual assurances that each will be entitled to the property if the relationship breaks down between them.

Answer 2

B

Question 3

On what basis did the Supreme Court in Jones v Kernott [2012] 1 AC 776 find that Mr Kernott was entitled to only a 10% share in the Thundersley home that had been purchased in joint names with Mrs Kernott in 1985?

A) Their Lordships were able to infer an intention from Mr and Mrs Kernott's words and deeds that the share was to be less than the original presumption of equal shares.
B) 10% was considered a just and fair outcome on the facts, in the absence of any common intention as to how the shares should be altered evidenced by Mr and Mrs Kernott.
C) Their Lordships felt able to impute an intention, in the absence of any express or inferred intention, that both Mrs and Mrs Kernott had intended to crystallise their interest when they separated in 1993 and tried to sell the home. 10% was the fair outcome in the circumstances.
D) Advancing part of the purchase money to the legal owner, with the intention that it would later be repaid with interest.

Answer 3

C

Question 4

What does it mean, following Jones v Kernott [2012] 1 AC 776, that the courts can now impute an intention a common intention to share the family home?

A) The court consider all the evidence, and construct a common intention from evidence of the oral conversations and conduct of the parties.
B) The court decides what the parties would have intended, if they had thought about it and awards a share of the home which is fair in all the circumstances.
C) The court presumes that the beneficial interest will be held in equal shares, unless a contrary intention is demonstrated by the parties.
D) The court looks to what the parties have orally agreed between themselves expressly and gives effect to that.

Question 5

Sindy and Ken are legal joint tenants of their home, but have not declared the nature or extent of their beneficial entitlements to the home. The property was purchased in 2008 through a 100% mortgage loan, and both Sindy and Ken paid the deposit equally. Throughout their time in the home, the couple kept separate bank accounts and paid the bills separately. The majority of the household bills were paid by Sindy, and in the last two years, Sindy has paid all outgoings on the property as Ken was unemployed.
Ken and Sindy have now separated, citing irreconcilable differences, and both wish to sell the property. Sindy wishes to know the likely extent of her entitlement to the proceeds of sale

A) Equitable entitlement follows legal entitlement, so that Sindy and Ken are joint owners of the equitable title. Sindy is therefore entitled to a 50% share.
B) Sindy is entitled to a greater share of the property than 50%, as her payments of the household outgoings demonstrate a common intention to acquire a beneficial interest in the home and it will provide the necessary detriment to allow her to acquire an interest.
C) Sindy may be entitled to a greater share on the proceeds of sale than 50%, as she may rely on the fact that the couple kept their finances separate while living together, and she has met the outgoings on the property for the last two years.
D) Sindy is entitled to an equal share of the property, as she and Ken advanced the deposit in equal shares.

Question 6

Which of the following statements is false in relation to nature of constructive trusts?

A) So called 'remedial' constructive trusts cannot be used to create an interest in property, merely to protect pre-existing property rights by giving a remedy.
B) An interest arising by means of what is termed an 'institutional' constructive trust is capable of gaining priority over a purchaser where the purchaser buys the interest after the creation of the interest.
C) While there is no coherent theory unifying the enforcement of constructive trusts, they all imposed to satisfy the demands of justice and good conscience in transactions.
D) English law currently does not recognise the 'remedial' constructive trust.

Question 7

Which of the following is not a situation in which a constructive trust may be employed?

A) To allow an interest to bind a purchaser of registered land where the purchaser's conduct reveals acceptance of the defendant's particular interest, such as through paying a lower purchase price for the property, even though the interest is not protected by entry on the register.
B) To give the purchaser an immediate entitlement in equity to property sold under a specifically enforceable contract.
C) To found an interest in the family home whenever justice and good conscience require it.
D) To enforce mutual wills against the survivor of a commonly executed will.

Question 8

Constructive trusts are often employed to prevent someone benefitting from a crime. Which of the following is not a situation in which a trust will be implied

A) A is a named beneficiary in B's will. A murders B. A is not entitled to benefit under B's will.
B) C murders her father and mother, D and E. D & E did not make a will. C cannot claim to the estate of D&E under the intestacy rules, but neither can her son, F.
C) G obtains property by theft from H. G will be compelled by constructive trust to hold the property for H.
D)I obtains property from J&K, by aiding and abetting J&K to commit suicide. I will forfeit the property by means of a constructive trust

Question 9

Which of the following statements best describes the requirements for the Pallant v Morgan equity?

A) There must be a binding contractual arrangement that one party would acquire property on the basis that the other party would have interests in it and that arrangement was not carried out.
B) Where the parties had entered in to an understanding between themselves to share property and the court felt it would be unconscionable to allow one party to ignore this understanding.
C) There must be a pre-acquisition arrangement or understanding that one party will acquire property on the basis that the other party will have interests in it and there was some form of detrimental reliance by the non-acquiring party, either by suffering detriment or granting the acquiring party an advantage.
D) There must be a pre-acquisition arrangement or understanding that one party will acquire property on the basis that the other party will have interests in it and there must have been some form of consideration given by the non-acquiring party for equity to intervene.

Question 10

English law has yet to fully embrace the concept of a remedial constructive trust. Which of the following statements best explains why this might be so?

A) There is uncertainty as to the remedy awarded through a remedial constructive trust.
B) The courts have traditionally favoured certainty and predictability as to when a constructive trust arises over a broad discretion to vary property rights.
C) Remedial constructive trusts in other jurisdictions arise to prevent unjust enrichment, whereas in English law unjust enrichment is viewed as a common law action.
D) The remedial constructive trust is part of the law of the USA and Canada, so those cases only have persuasive authority in England and Wales.