Property Law: Resulting Trusts And Constructive Trusts Problem

2992 words - 12 pages

Throughout this report I will try to discuss and critically examine the facts of the case concerned, while doing this I will observe and identify the points which arise on each of the parties and come to a conclusion in whether any beneficial rights in the houses may be claimed by Rachel and Jane and how the size of their shares will be calculated.

Part A (i) (a): Jane

In order to establish express bargain constructive trust there must be an agreement or understanding between the legal owners and non-legal owners to share the equitable interest; the non-legal owners relied on that agreement and acted to their detriment. This is the Lord Bridge's criteria that Jane will need to satisfy using the case of Lloyds Bank plc v Rosset

Where the common intention is founded on express discussions then the existence of such discussions must be clearly established as Lord Steyn stated in Springette v Defoe 'Our law does not allow property rights to be affected by telepathy'. Therefore Jane will have to establish an express discussion.

Creation of the express trust must comply with s53 (1) (B) Law of Property Act 1925 which requires evidence in writing. It will, however be enforceable because constructive trusts are exempted under s53 (2) .

According to Rosset, if Jane is to establish any interest in the property she must bring herself within one of the following categories. First she must show that the legal owner has made an express promise to her that she should have an interest and that she has relied on that promise to her detriment, as in Eves v Eves , Grant v Edwards and Babick v Thompson . Ahmed's words of assurance "in the near future when we marry the house will be yours" count for this purpose.

The payment of the decoration might have been relevant if the couple had been married. There is every chance that Jane could have relied on s37 of the Matrimonial Proceedings and Property Act 1970 to establish a beneficial interest by way of improvement expenditure. However, this is not the case, and it is doubtful whether contributing to the costs of improving a house that is already purchased can, without any agreement to the contrary, give rise to an equitable interest (Bank of India v Mody ). Ahmed had already purchased the house before she moved in however the most important question to ask is 'Whether knowingly or unknowingly , he has allowed or encouraged another to assume to his detriment'(Tailors Fashion Ltd v Liverpool Trustees Co Ltd ).

Claimant must show that he has changed his position in reliance on the representation made by the owner of the land according to the case of Re Basham . This can be physical labour towards renovation of the home as in Eves v Eves , so Jane redesigning interior can count for this purpose.

There must also be a casual link between the representation and the change of positions. There is no casual link between Jane leaving her career interests and Ahmed's assurance as this was made after she had already...

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