Land - Trusts & Coownership - Cases (3)

Trust
Midland Bank v Cooke (1995) CA
- Matrimonial home purchased by way of mortgage, money from husband and a wedding gift from Husband’s parents; Wife originally not on legal title; band commenced proceedings for monies due under the mortgage and possession in default; Wife claimed her consent to the mortgage procured by Husband’s undue influence; whether Wife had a beneficial interest in the property arising from her half share of the wedding gift from Husband’s parents; Quantifying beneficial interest under a resulting trust; whether Wife entitled to a half beneficial interest in the property
- The court would do this by looking at the whold course of dealing between the parties relevant to their ownership and occupation of the property and would not be confined solely to the financial contributions of the parties where the circumstances suggested that some other agreement as to shares in the property was appropriate: Apply broad brush approach even for resulting trust case
- This is a controversial decision because it is at variance with a range of established authorities, esp. the HL decision in Rosset
- Cooke in essence reaches 3 conclusions:
(i) where a partner in a matrimonial home not on the legal title established an equitable interest through direct contribution to the purchase price of the property the court would (in the absence of express evidence of intention) assess the proportions the parties were to be assumed to have intended for their beneficial ownership by looking at the whole course of dealing between them relevant to their ownership and occupation of the property and would not be bound solely to the financial contribution of the parties when the circumstances suggested that some other agreement as to shares in the property was appropriate. This conclusion is out of line with Bull v Bull and Sekhon v Alissa. It is submitted that the better view is that the non-owning party who makes a direct contribution to acquisition will have a share in the beneficial interest proportionate to her financial contribution
(ii) The court concluded that the presumed intention of the parties could be sufficient to bring about an enlargement of the claimant’s beneficial interest. This conclusion is out of line with Rosset
(iii) The case demonstrates that a spouse not on the legal title can acquire a beneficial interest in a house through a share of a wedding gift used to assist in acquiring the matrimonial home, and that such a contribution to acquisition will rank as a DIRECT one. This is IN LINE with McHardy & Sons v Warren
- Rebuttable presumption: Parent’s gift is to the couple, not the child of the parent

Lloyds Bank v Rosset (1990) HL
- Express constructive trust (with common intention)
- Title to registered land in Husband’s name alone; Wife made no financial contribution to acquisition; H without W’s knowledge secured a loan from the bank to renovate the property which was secured by a charge on the property; prior to completion of the sale the vendors allowed the purchasers and their builders to start the renovation work; W made a ‘work contribution’; subsequently H defaulted on the mortgage and the bank commenced proceedings for possession and sale; W resisted bank’s claim arguing that she had a beneficial interest that ranked as an overriding interest under s70(1)(g) LRA 1925; whether the relevant date for determining; actual occupation; for the purposes of para (g) was the date of completion of the transaction or its registration; whether W’s ‘work contribution’ gave rise to a beneficial interest
- This is a leading authority on the establishment of a beneficial interest by resulting and constructive trust by a party not on the legal title. Four key points should be noted:
(i) HL regard direct contributions (to the purchase price initially or by payment of mortgage instalments) by the non-owning spouse to the acquisition of the property as giving rise to a constructive trust. This is contrary to the establishment principle that such a contribution gives rise to a PURCHASE MONEY RESULTING TRUST.
(ii) In reality only a contribution to the purchase price or an express common intention were sufficient to establish a beneficial interest in property
(iii) HL has an unsympathetic view of the W’s ‘work contribution’: as a contribution to a property costing over $70,000 it was ‘so trifling as to be almost de minimis’ (an opposite end of the spectrum to Cooke v Head)
(iv) This decision confirmed Abbey National Building Society v Cann in holding that the relevant date for ascertaining actual occupation for the purposes of s70(1)(g) LRA 1925 was the date of completion of the transaction not the date of completion of the transaction not the date of its subsequent registration

Goodman v Carlton (Vajpeyi v Yusaf)
* I cannot find Goodman v Carlton, if you can find info on it, do let me know.

Vajpeyi v Yusaf [2003] All ER (D) 128 (Sep), (Approved judgment) is a recent case in which the claimant, who had given the defendant money to buy a house, failed in her claim to recover the house under a resulting trust. The court held that the money had been given as a loan and the defendant’s obligation to the claimant was completely discharged by repayment of the loan.

Le Foe v Le Foe (2001)
- A wife had made indirect financial contributions which enabled her husband to pay the mortgage. The mortgagee was seeking possession of the house, but the first instance court showed a greater willingness to regard indirect contributions as triggering a share: ‘… the family economy depended for its function on [the wife’s] earnings. It was an arbitrary allocation of responsibility that [the husband] paid the mortgage… whereas [the wife] paid for day-to-day domestic expenditure.’
- Follow Prestige