Certainty of Subject Matter
It involves what it was that the settler intended to give the beneficiary. In this particular case, the uncertainty of subject matter arises when we need to find what bulk actually means. The identification of the subject matter is not needed when the trust is created but at the time the trust comes into being or effect.
Re Golay’s Will Trusts (1965) a gift of a “reasonable income” succeeded because, because taking into account all circumstances, it was clear that it was to be reference to the previous standard of living of the beneficiary. In contrast, trust have failed in Palmer v Simmonds(1954) where the subject matter was anything ‘the bulk of my estate’ and “anything that is left” in Re Jones(1898). Similarly in Re London Wine Company(1986), the trust failed for uncertainty as it was not clear which particular bottles of wine form the subject matter of the trust.
Thus conveyance has failed where phrases such as “bulk of my estate” or “anything that if left is used”. Thus the trust fails because of uncertainty.
Q3.
What was the purpose of the Land Registration Act 2002. Has it succeeded in achieving its aims?
Answer
The main aim and purpose of the system of registration title is to eliminate the reliance on title deeds and to evade the need for the repeated examination of the same title by establishing and maintaining an official register which accurately records all the current details relevant to any land from a conveyance viewpoint. When the title of the land has been investigated and analysed, it is recorded in the register; and the registered title thereby created effectively constitutes a new title that replaces and supersedes the previous documentary title. As a result, the register should provide a prospective purchaser of land with an accurate record of the relevant details relating to that land.
Hence, there are two types of conveyancing: Unregistered conveyancing and registered conveyancing.
In England and Wales some registration of title took place on a voluntary basis pursuant to the Land Registry Act 1862 and the Land Transfer Act 1875. The Land Transfer Act introduced compulsory registration of title but only in respect of dealing in London, the principle of compulsory registration throughout England and Wales was established by the Land Registration Act 1925, and that act remained in force for nearly 80 years.
The Land Registration Act 2002 received the on the it is a statute passed by the , which describes its purpose as an Act to make provision about land registration; and for connected purposes.
The principle objective is that the register of title should be "a complete and accurate reflection of the state of the title to at any given time thus to create the necessary legal framework in which the registered conveyancing can be can be conducted electronically. A joint project has now automated many of its functionas which can be assessed online. A system of e-conveyancing would eliminate the current three-stage, paper-based, process applicable to any transaction in registered land, involving the execution of a formal document, its lodgement with the registry and then the registration itself. Instead most transactions and also contracts for such transactionas would be executed electronically by registration. The transaction would be effected and the intended interest created or transferred, only by the single-stage, dematerialised, process of registering the transaction electronically and until registration the transaction would have no effect. In other words, the current ‘registration gap’ between a transaction and its registration would be eliminated and along with it disputes as to the effect of the transation during the ‘registration gap’.
The LRA 2002 made some major changes to the laws regulating the registered land. The major changes made and the purpose is discussed below
Leases
Under LRA 2000, the matters capable of registration will now include
- a lease for more than seven is granted
- a legal lease with more than seven years unexpired is transferecd
- leases of any length granted to take effect in possession more than 3 months after the date of grant
These changes in leases will substantially trigger the number of commercial leases on the register. The main motive is the registration of all leases granted for a term of more than three years.
Destruction of documents
Land and charge certificates have been abolished. Any document currently filed in land registry can be returned by application. After 13th October 2003 such certificates will not constitute the evidence of title. Only the information on the public register would do so. Existing certificates can be returned by application or destroyed.
Addressed for Service
Many registered titles have out of date information relating to proper names and the Act allows up to three addresses for service on the title to be noted on the register. It is now possible for the register of title to be changed without production of a land or charge certificate. Proprietors will only become aware of any actual or proposed change upon receipt of written notice from HM Land Registry, which will in the first instance rely upon the information supplied to it on the proprietor's application for registration. Failure to respond to a notice could have serious adverse consequences. Proprietors must therefore ensure that their addresses for service at HM Land Registry are up to date and that they give prompt notice of any change.
Open Register
General access to the register and other information is another objective of the Land Registration Act 2002, namely to make the property market more transparent, although the right is subject to excemptions relating to documents or information of a commercial sensitive nature: Land registration rules 2003, rr.136 et seq.
Until relatively recently, there was no general right of access to the register, although with the authority of the registered proprietor a prospective purchaser could inspect the register relating to the land in question. However, the land registration act 1988 started the process towards an open register; and under the Land Registration Act 2002 any person may now inspect and make copies of the register of title, any document kept by the registrar which relates to an application to him and the register of cautions against first registration:ibid.,s.66(1). The right of inspection therefore extends to leases filed at the Land Registry and charges.
Voluntary First Registration
In order to ensure with the objective of ensuring that the register is as comprehensive and conclusive as possible, LRA 2002 enables franchises, sporting rights and leases with more than seven years unexpired at the date of application to be voluntarily registrable.
Adverse Possession
The act is known for the changes it has made to the rules regulating adverse possession in relation to registered land. The act provides that anyone who occupies registered land without permission from the owner and treats it as his own for 10yrs is entitled to apply to be registered as owner.
The act, which is the result of the contribution made by the joint work of the Law Commission and the Land Registry, has been regarded as more potentially far reaching than the great property reform the LRA 1925 legislation. The Act paved way for the introduction of electronic conveyancing in replacment of the traditional paper-based manual procedure and replaces all existing legislation relating to land.
And in relation to adverse possession, the effect of this new regime will make registered land virtually squatter-proof and clients owning unregistered properties are advised to consider applying to the Land Registry for voluntary registration to take advantage of this.
Compulsory requirement to register leases of 7 years or more is likely to have the major impact in practice. Dealings with leases is one of the most common type of property transaction and this new requirement has gained public criticism, as it inevitably involve more bureaucracy and increased costs. However, the Government's view is that the advantage of a more transparent system will outweigh the extra work and expense.
Thus the LRA 2002 has completely replaced the law for land registration. Together, the new Act and Rules govern the role and practice of Land Registry. In short, The Land Registration Act 2002 achieves the following: it simplifies and modernises land registration law and is the first major overhaul of the land registration system for 75 years; it makes the register a more complete picture of a title to land - showing more fully the rights and interests affecting it and it provides a framework for the development of electronic conveyancing.
Q4.
a) What are the similarities and differences between Constructive Trusts and Proprietary Estoppel.
Answer
The law of trusts is ample and complicated; trusts are written instruments that give title to or an interest in real estate. Trust is considered to be one of the most innovative and complicated contributions to the English legislative system and their success has led some jurisdictions to incorporate trusts into their .
Trusts can be confusing and intimidating, as there are so many different types of trusts; the most common among them includes express trusts, resulting trusts and constructive trusts. Here we are most concerned with constructive trusts.
Constructive trusts arise by the operation of the law instead of being created intentionally and expressly. A court creates it whenever a person who, in fairness, should not be permitted to retain it holds title to property. It is usually results because of express trustee’s (the person appointed bylaw to execute a trust) disloyalty or other breach of trust and it is also created where no express trust is created but property is obtained or retained by other conduct. As In Muschinski v Dodds (1995) Deane J held that’s constructive trust ‘arises irrespective of intention’. So it is like remedial institution and its existence depends on the court order. The court employs the constructive trust to compel the defendant to convey the title of the property to the plaintiff.
However constructive trusts doesn’t have any clear definition, the statements are criticized as being too general. According to Carl-Zeiss Stiftung v Herbert Smith & Co. (1969] 2 Ch. 276 p.300, Edmund Davies L.J ‘English law provides no clear and all-embracing definition of a constructive trust. Its boundaries have been left perhaps deliberately vague, so as not to restrict the court by technicalities in deciding what the justice of a particular case may demand’. Thus the term constructive trust is left very vague may be to give a just solution.
(1995) 9 Trust Law International 35 at 38, Lord Millet said that ‘at present the language of constructive trust has become such a fertile source of confusion that it would be better if it were abandoned.
Proprietary Estoppel
Estoppel is a legal doctrine recognised both at and in . Curzon - Dictionary of Law defines ‘Estoppel as a rule of evidence (and not a cause of action) preventing a person from denying the truth of a statement he has made previously, or the existence of facts in which he has led another to believe. The laws may estopp actions and protect a party who would suffer detriment if:
-
The has done or said something that gives another party to believe
- The plaintiff relied and acted on that understanding.
- that expectation were false and leeading to the partys detriment
Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 in which Lord Denning pointed out that: "If parties to a contract, by their course of dealing, put a particular interpretation on the terms of it on the faith of which each of them to the knowledge of the other acts and conducts their mutual affairs, they are bound by that interpretation just as much as if they had written it down as being a variation of the contract. There is no need to inquire whether their particular interpretation is correct or not or whether they were mistaken or not or whether they had in mind the original terms or not. Suffice it that they have, by their course of dealing, put their own interpretation on their contract, and cannot be allowed to go back on it.
The three main types of Estoppel current in English law are , , and . Here we are concerned with Proprietary Estoppel.
Proprietary is where one party allows or make it clear in statement to another to believe that he owns land, or has an interest in land, and carry out work on the strength of that knowledge. Traditionally the courts of could be petitioned to remedy such situations. In modern practice the courts have wide discretion on how to give effect to Estoppel rights, but it remains uncertain whether a right that arises from proprietary Estoppel is a proprietary, or a personal right. This is because if the successor has an interest in land then he is capable of binding in title. In it’s clear that a proprietary Estoppel can be noted on the register from the moment it arises and, if adequately noted, will bind successors in title. Initially proprietary Estoppel was available only for disputes arising from the title to real property, it has now gained acceptance in other areas as well. Almost all proprietary Estoppel cases involve land but the doctrine can operate where the belief concerns personal property: Re Basham [1986] 1 WLR 1498.
Case law (in particular, Ramsden v Dyson (1866) LR 1 HL 129, 170, per Lord Kingsdown, and Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133, 151H-152A, per Oliver J) shows that, in determining whether or not proprietary estoppel operates in a case, the court will look for three elements:
(i) A believed that he had or was going to have a right in or over B’s property;
(ii) B created or encouraged the belief; and
(iii) A acted in reliance on the belief.
The doctrine of proprietary estoppel was first observed in a speech by Lord Cranworth in Ramsden v Dyson that ‘if a stranger begins to build on my land supposing it to be his own, and I perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a Court of Equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own’.
Proprietary Estoppel operates in this case as the defendant knew of the plaintiff's mistaken belief and knowingly or purposely allowed to believe that the plaintiff had any rights in the land Wilmot v Barber
In Wilmott v Barber (1880) 15 Ch D96, Fry J considered that five elements had to be established before proprietary estoppel could operate:
- the plaintiff must have made a mistake as to his legal rights;
- the plaintiff must have done some act of reliance;
- the defendant, the possessor of a legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff;
- the defendant must know of the plaintiff's mistaken belief; and
-
the defendant must have encouraged the plaintiff in his act of reliance
Consructive Trusts and the Propriety Estoppel share some similarities and differences. We wouldfirst discuss the similarities between the two before we move on to the differences.
Similarities
It’s apparent that two broadly similar principles underpin both equitable doctrines. And both exist to prevent the misappropriate or unconsionable use of the title. The similarities have gone unnoticed until the 1980’s. The cases were dealt separatly both had lines of cases on their own. The most significant similarity is that both has common intention as they both look at the intentions of the parties and the way the claiment has acted upon those intentions.
In Grant v Edwards [1986] Ch 638, the vice-chancellor suggested that: in other cases of this kind, useful guidance may in the future be obtained from the principles underlying the Law of Proprietary Estoppel which are closely akin to those laid down in Gissing v Gissing (1971) AC 886. In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or her detriment in reliance on such belief. In both, equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner be defeating the common intention. The two principles have been developed separately without cross-fertilisation between them: but they rest on the same foundation and have on all other matters the same conclusions.’
According to the judgement of Mummery J in Scottish & Newcastle PLC v Lancashire Mortgage Corp. Ltd [2007] EWCA Civ 684 at para.56: ‘The Proprietary Estoppel arising in this case coincides with or overlaps the concept of a constructive trust whether the label attached to the situation is proprietary Estoppel or constructive trust, the effect is the same’. Various judicial statements and cases suggest that the constructive trust and the Proprietary Estoppel are almost interchangeable.
Differences
There are similarities but they are different too, it’s rather like saying that two legal rules are similar because they are based on preventing injustice for example both consider the intentions but acquiescence has been developed only within the estoppel framework.
Sir Andrew Park, sitting as a judge in the Chancery Division of the High Court, is reported as having said in Lalani v Crump Holdings Ltd [2007] 08EG 136 that:
While there was an affinity between the two types of claim for a beneficial interest, a common intention trust tended to focus upon the current state of affairs, whereas proprietary estoppel was concerned with promises to do something in the future that would change the pre-existing situation. Moreover, the remedies available to the court were different.
In Stack v Dowden [2007] 2 WLR 831 at para.37 Lord Walker commented that in Yaxley v Gotts he had given some encouragement to the approach which emphasizes the similarities between the two concepts, but: I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and ‘common interest [sic]’ constructive trusts can or should be completely assimilated. Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the ‘true’ owner. The claim is a ‘mere equity’. It is to be satisfied by the minimum award necessary to do justice, which may sometimes lead to no more than a monetary award. A ‘common intention ‘constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests.
Q 4(b)
A and B who are married, bought a house in 1995. The house was transferred into A’s name only. Last year A and B split up. B is seeking to claim a share in the house. Advice B.
Answer
Certain problems tend to arise in situations where a husband and wife or other cohabitees purchase a property together. When the house is conveyed to all the properties then no difficulty may arise, as it will be conclusive proof of joint ownership. Similarly, if any beneficial interests, for instance favouring the wife, are mentioned in the deeds of title, this will also be conclusive evidence of the wife’s interest in the property. Problems arise when; the house is conveyed into the name of one only party, it is usually the husband. The issue arises as to whether the wife has any interest in the property or not. One way in which the wife may acquire an interest would be if the husband held it on trust for her.
However, because this would be a trust for land, S53 (1) (b) Law of Property Act 1925 states that it would have to be evidenced in writing. This would not, therefore, protect a wife in a situation in which she and her husband had conveyed the house into his name only but with an oral agreement that he would hold a share of the property on trust for her.
S53 (2) LPA 1925 states that the formality requirements do not apply to Constructive and Resulting Trusts. Thus an oral agreement between a husband and wife whereby the former agrees to hold property on trust for the latter will give the wife an interest in the land if a resulting or a constructive trust can be identified.
Both constructive and resulting trusts arise by Operation of Law.
CONSTRUCTIVE TRUSTS
The current position is that the courts will only impose a constructive trust if two conditions can be fulfilled.
Firstly, there must be evidence of a Common Intention by the parties to have shared interests in the property. This is defined in Lloyd’s Bank v Rosset (1991) as follows: ‘The first and fundamental question which must always be resolved is whether, independently of any reference to be drawn from the conduct of the parties in the course of sharing a house as their home and managing their affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement…reached between them that the property is to be shared beneficially. The finding of an agreement…to share in this sense can only, I think, be based on evidence of shared discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.’
In Lloyd’s Bank v Rosset the courts refused to infer a common intention from an agreement to renovate a house together. On the other hand in Eves v Eves (1975) and Grant v Edwards (1986) it was held that an excuse made by one spouse to another as to why the house had not been conveyed into joint names show a common intention.
The intention must have been communicated between the parties in order for it to be common: Springette v Defoe (1992). However, in Midland Bank Plc v Cooke and Another (1995) the courts were prepared to infer a common intention from all the surrounding circumstances even where the parties themselves had never given any thought as to the ownership of the property. Waite LJ reasoned as follows:
‘There will inevitably be numerous couples, married or unmarried, who have no discussions about ownership and who, perhaps advisedly, make no agreement about it. It would be anomalous, against that background, to create a range of home buyers who were beyond the pale of equity’s assistance in formulating a fair presumed basis for the sharing of beneficial title, simply because they had been honest enough to admit that they never gave ownership a thought or reached any agreement about it.’
Secondly, the claimant must show that they have acted to their detriment in reliance on the common intention. Direct or indirect contributions in money or money’s worth to the cost of the property will suffice: Grant v Edwards. Other examples include: refraining from seeking repayment of a loan or interest on a loan RISCH v MCFEE (1991); a payment to the other party thereby enabling them to pay the mortgage on the property Stokes v Anderson (1991); acting as the other party’s unpaid business assistant and supporting him in his business ventures Hammond v Mitchell (1991). In Lloyd’s Bank v Rosset on the other hand, the act of decorating and supervising the renovation were not sufficient as these were regarded as acts that any wife would have undertaken. The test therefore seems to be whether the claimant undertook some action which they would not have undertaken but for the common intention.
RESULTING TRUSTS
In the absence of any common intention, there may still be a Presumed Resulting Trust of an interest in the property in favour of the party whose name the house is not registered. There is a presumption of a resulting trust in favour of A whenever A transfers property to B without B providing any consideration in return: Re Vinogradoff (1935). The presumption is rebuttable by evidence of a contrary intention, that is, an intention on the part of A to make a gift to B.
Therefore if A and B both pay contributions to the mortgage of a property which is conveyed into the name of B only, then A will hold B’s contribution on resulting trust for A, subject to a contrary intention. However, it is clear that the contribution must be in money or money’s worth: Button v Button (1968).
Where there is a transfer of the legal estate from husband to wife, a Presumption of Advancement arises that is, there is a presumption that the husband intended to make a gift. However, cases like Pettitt v Pettitt (1970) show that the strength of this presumption has weakened to such an extent that in reality the courts look to the actual intention of the parties as evidence from all the relevant circumstances.
Lloyd’s Bank v Rosset makes it clear that contributions to the purchase price of the house or to the mortgage must be Direct. This involves a more restrictive approach than that adopted in earlier cases such as Burns v Burns (1984) where Indirect Contributions where held to suffice. It is now clear that while such contributions are enough to give rise to a constructive trust (which requires a common intention) they will not give rise to a resulting trust (which does not require a common intention).
SUBSTANTIAL IMPROVEMENTS
Where the claimant has made a Substantial Improvement to the property in question, this can give rise to an interest in the property even though the contribution is indirect. This is due to S37 of the Matrimonial Proceedings and Property Act 1970, which states:
‘ It is hereby declared that where a husband or wife contributes in money or money’s worth to the improvement of real of personal property in which the proceeds of sale which either or both of them has or have a beneficial interest, the husband or wife so contributing shall, if the contribution is of a substantial nature and subject to any agreement between them to the contrary express or implied, be treated as having then acquired be virtue of his or her contribution a share or an enlarged share, as the case may be, in that beneficial interest of such an extent as may have been agreed or, in default of such agreement, as may seem in all the circumstances just to any court before which the question of the existence or extent of the beneficial interest of the husband or wife arises (whether in proceedings between them or any other proceedings).’
BIBLIOGRAPHY AND REFERENCES
- AN INTRODUCTION TO LAN D LAW
SIMON GARDNER, 2007
ROGER J. SMITH, FIFTH EDITION, 2006
S H GOO, 2ND EDITION, 1997
NIGEL P. GRAVELLS, 3RD EDITION, 2004
- LECTURER NOTES AND HANDOUTS by LECTURER SEAN BRENNAN