Property Law: Assignment 1 2002/2003.

Amandeep Singh Gahunia.

LLB 2nd Year.

    Despite Augusta not being party to any valid express declaration of trust, she may establish a beneficial interest by proving a constructive or resulting trust. By contributing her savings of £25,000, Augusta has acquired an equitable interest in ‘Old House’, which is registered under the name of Wilson. The fact that another person, Augusta, has established an equitable interest means that in equity the property is co-owned. Thus, a trust of land is in existence where Wilson holds ‘Old House’ on trust for himself and Augusta in equity; there is one trustee of the land and two co-owners in equity. Therefore, as Wilson is the only trustee, Savequick Bank cannot rely on overreaching to give them priority over any equitable owners, with the bank being bound by Augusta’s equitable interest according to the rules of registered land (to be discussed later), which the bank might have not discovered due to its informal nature.

    As stated before, no express trust exists although the facts in question seem able to fit into the requirements of both a resulting and constructive trust. By contributing to the purchase price of ‘Old House’, Augusta can claim an equitable interest in Wilson’s property, despite her name not being registered alongside his. This resulting trust arises from the ‘common intention’ of Wilson and Augusta that she should have an interest in the property through part provision of the purchase price. This is further re-inforced as the contribution was made for acquisition not repairing of property, and as they moved into the property together on 2nd February 1996, there was a common intention for joint ownership. Augusta’s financial contribution were not simply used in running of the household, but actually enabled Wilson to purchase the property, giving rise to her direct interest in the property. Consequently, despite Augusta having contributed less to the purchase price, the conduct of the two persons and their true intentions means that her share can be expanded into a larger, perhaps fifty percent, share. 

    Yet, a resulting trust might not exist if it can be established that the money was given to Wilson by way of gift or loan. Wilson may have given an assurance to Augusta that she had a share in the property, and if she relies on this to her detriment (spending her life savings), Wilson cannot deny the interest promised. Hence, Augusta can be the beneficiary of a constructive trust, and be entitled to an equitable interest in ‘Old House’, with her interest equivalent to what she had been promised and deprived of. It can be presumed that, with all her life-savings invested, she was offered a ‘home for life’, which should generate a fifty percent share, despite her contribution to the purchase price being less than his. The above analysis provides that Augusta may claim an interest in the property belonging to Wilson through either a resulting or constructive trust, notwithstanding the differences between the two in regards to payments and promises, due to the common intention between the two persons. The equitable interest established by either of the two trusts highlights that Wilson and Augusta’s co-ownership in equity takes the form of a tenancy in common. This is because one of the four unities of a joint tenancy is lacking, for example in this scenario there is no unity of interest; Augusta’s equitable interest was of a lesser extent in relation to money paid.

    With the basic principle that a purchaser takes the land subject to any existing, even undiscoverable, overriding interests, Augusta may have what constitutes a overriding interest even if does not appear on the register as a registrable interest or a minor interest. Augusta’s factual situation is capable of being an overriding interest under her right of actual occupation (2nd February 1996-7th February and 15 March 1996 onwards) of the land, consequently giving her a proprietary right binding automatically on the land. Thus, Savequick bank after lending money to the registered proprietor Wilson by way of mortgage, the proprietary rights of Augusta in actual occupation of the land affects the bank through overriding interest. She has a equitable proprietary right in the land, as opposed to any inherently personal right, where legal title is vested in another. From the facts provided, it can be presumed that Augusta’s proprietary right was not substantively registered elsewhere under the land registration system and not excluded as a overriding interest by other statutes, thus this proprietary right is an overriding interest. 

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    However, Savequick bank will argue Augusta was not in ‘actual occupation’ of the land at the time the mortgage from the bank was executed, her occupation of the land was, for a period of time, temporary and there was no “degree of permanence and continuity which would rule out mere fleeting presence”.  Augusta might not be able to reprieve herself with the fact that Wilson, as her agent on the relevant land, gave her the necessary measure of occupation, this has been previously shown in regards to the presence of builders, a relative and a child at the request of the ...

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