Despite the redistributive powers granted to courts in matters related to divorce, there is a limited statutory regime that offers adequate governance of financial consequences on cases. Therefore, the majority agrees that the current form of constructive trust in family affairs remains unsatisfactory. In this regard, the constructive trust in family law is associated with risk of injustice posed by the litigants. Tension between legal objectives arises when the courts attempt to combine various principles of law to provide justice. Also, a huge amount of legal waste is generated when judicial manipulation is applied to ensure fairness in justice delivery.
According to Gardner, a constructive trust is a form of trust created by a court due to lack of declaration of trust. This happens when a person who has acquired property has an equitable right to transfer it to another party to whom it rightfully belongs to, on the foundation that acquisition of it is unjust and would wrongfully enrich the person if allowed to retain it. Court of law and court of equity were the court systems used in the 1870’s that was before the Judicature Acts. Equity would create a personal obligation on the legal owner even after identifying him as the legal owner to avoid acting in line with the just right of others and unconscionable behavior.
Links between the requirements for equity and legal rules are predominantly in land law. Over the years, many statutes have required that land trusts and transactions be in written documents. If equity was to fail to recognize all declared land trusts (including those not in writing) then that would form unacceptable uncertainty. Therefore, the strict rules created a way that requires more than an oral declaration of trusts. When common intention constructive trust arises what is required is the willingness by two (or more) people that one of them will own the land on for both of them. The question of what portion of the interest each party has frequently arises where two unmarried people have a common intention constructive trust. Where the two parties are married, the constructive trust is not important, since they live together. If the is a divorce the family court has powers to in dividing all the assets. If one of the spouses is declared, bankrupt their beneficial share of the property transfers to the bankruptcy trustees. However, in the case of relatives or two friends, constructive trust is of importance, where one party wishes to buy out the other or if the property is to be sold. Constructive trust is also achievable on an oral agreement between parties involved. The parties have to agree on shares of respective parties, or their intentions can be concluded from their actions. Where the claim is not because of the words just actions occurring after property acquisition, it is difficult to develop a constructive trust. Where the parties are joint owners of a property, but they have never put into writing the percentage of their respective interest then the question of constructive trust arises.
Proprietary estoppels are an additional remedy by equity. Just like common constructive trust, it is applicable where a person is damaging himself in the belief that he has a right in the property. Although both proprietary estoppels and constructive trusts are from equity, there have differences. In proprietary estoppels, a common intention is not necessary. In propriety estoppel, the court decides what remedy is right for a case. A court may decide that a property to be shared among parties or the property owner to pay the other party the money they spend, or allow the other party to remain in the property.
A constructive trust comes about when the remedial trust arises from the intention of a person attempting to create a trust that is imposed by the law to prevent justice. From a historical perspective, the constructive trusts have been imposed by courts from various scenarios. Therefore, the context law has been imposing constructive trusts as part of their attempts to remedy the injustices caused by the Family Law Act.
Through joint efforts, the constructive trusts pertain to wealth creation and the nature of the relationships needs to be from joint ventures. Another requirement is that there must be a link between the claimant contribution services and wealth created. Such contribution needs to be in services and that claimant needs to establish the proportion of wealth attributable to his/her efforts. Furthermore, the law on family trust stipulates that there must be a link between the aggrieved spouses’ efforts and the disproportionate accumulation of the wealth. For the courts to establish whether unjust enrichment has taken place, the claimant must establish that their cohabiting spouse has been enriched in one form or the other. Such can occur when one spouse works long hours away from home while the other stay at home to take care of the children and other family members.
According to Hudson, both the constructive trust and propitiatory estoppel take into account several common grounds. It has been established that the constructive trust and estoppel works such that they coincide by creating a proprietary interest by stimulating a contract between the parties concerned. In addition, it was demonstrated in the case of Lloyds v Rosset that the constructive trust operates where there is an agreement and arrangement between the concerned groups.
According to Hudson, the courts need to consider the extent by which they consider the unconscionability approach in considering in the property to the claimant of the defendant. The law on constructive trusts has led to the development of the principles of good conscious, as was evident in the case of Lloyd Bank v Rosset. In this case, the courts demonstrated that the tests set out in Rosset were not appropriate and decided to explore an alternative appropriate principle. Confusion is likely to be caused when the courts pretend to apply a test. In order to make them at unison, it would require that either of the doctrines would be altered accordingly. To achieve such a progress, the courts must analyze the changes accordingly or admit that such changes are impossible. The recent trend in the law is to develop a legal approach that tends to avoid unconscionability by seeking agreements between the parties and taking a survey between the dealings of the parties. This concept was coined in Stack v Dowden in an attempt to provide fairness and supply the parties with common intention where necessary.
In the court ruling of Oxley v Hiscock, the judges combined the general legal concept based on constructive trusts that apply as demanded by the principle in estoppel and the constructive trusts of the common law. In their bid to provide fairness to the concerned parties, the courts deviated from the previous rulings. The approach the judges used in the ruling in Van Laetham v Brooker also combined the similar approach to deliver justice. The judges used their deep understanding of the principle of trust of homes in relation to the constructive trusts.
The common principles in Stack v Dowden also provided enough evidence for the real change in law. This case that got much attention in the media and it provided an opportunity for to tidy up the law relating to trusts of homes. What was clear from the speeches of the judges is that none of the principles constitute a hard and fast rule as they were principles for the guidance of subsequent courts when disposing of the precise circumstances before them. However, such principles provided a sustainable framework that can easily be used by the courts to decide future cases. The framework demonstrates the desire by the senior court judges to provide clear guidance to the subordinate courts in dealing with the dilemma of relief.
The family law and the property law exhibit some differences between them in dealing with the property rights. In family law applications, the courts are empowered to examine all the concerned parties’ needs and circumstances, together with their housing needs and children in giving justice to the overall family welfare. According to Hudson, the family law does not need to apply the strict criteria as evident in property law and cases such as Lloyd Bank v Rosset. The reason for flexibility in family law is that they are dealing with the most intimate and psychological fraught aspects of human life that require some legal flexibility. Such would instigate the fear of introducing too much formalism into the human life. In this regard, the family courts will be acting on the basis of very different progressive decisions to take care of the rights of the spouse who had some equitable interest in the matrimonial home and other minority interests related to the case.
The manner in which the English courts deal with the trust of homes reveals that there exist different forms of justice at play. Such courts only provide that only one person who has contributed to the purchase of the property is entitled to take the rights in it in the event of relationship break up. This awards result from the recognition that the rights of property is entitled to the legal owner.
In distributing the liability between the parties, the beneficiaries might continue against any trustee in connection to the breach of trust and the endured misfortune. In addition, no individual trustee ought to be at risk for any default that outcomes independently from another trustee. The remedies for the breach of trust are identified by the case that requests the trustee to restore the first property that framed part of the trust refund. Additionally, the case can be laid against the trustee to pay cash or give property of identical worth to the sum lost to the trust fund.
One of the greatest applications of the principle of Stack v Dowden [2007] is evident in Holman v Howes. In this case, the courts demonstrated that inference and not imputation is necessary in handling trust and family home affairs. In addition, the courts demonstrated that common intentions as of beneficial shares in a property could be inferred from the evidence of the parties involved in the legal tussle. Similar application of Stack v Dowden is also evident in Fowler v Barron [2007]. In this case, the courts demonstrated that it is significant to consider the whole of parties in the relationship as illuminated in their shared intentions concerning the ownership of property. In addition, this case applies the principle in Stack fairly and strictly by recognizing the need for something exceptional to rebut the presumption created by joint ownership of the property.
The other important case that applies the Stack principle is Jones v Kernot [2010]. This case provided the clarification to the law that the law that can be applied in subsequent cases. The courts created the notion that it is impossible to devise a rigid framework for the ascertainment and quantification of beneficial interests in shared home that can operate fairly. The implication of Jones is that the courts lack statutory regulation on how to split the property when the couples are not legally married. Despite making headways in Stack v Dowden, the courts left many questions unanswered. In this regard, the long awaited judgments in Jones v Kernott will have far reaching implications for unmarried persons cohabiting as couples provided they make no arrangement in relation to their shares in the property. The current law after Jones v Kernott unfavorable combination of the previous doctrine as it demonstrated that the law is meant to be uncertain. The law demonstrates that it is impossible to devise a rigid framework that can be used to ascertain and quantify beneficial interest among couples. In addition, it is uncomfortable combination with the doctrine of propriety estoppel in relation to promises or future promises that are not be dealt with. In this regard, it will not be necessary to have a clear and unequivocal promise whether express or implied, for the proprietary estoppel to suffice.
In conclusion, the law of equitable trust has undergone a massive evolution. Such revolution has been inspired by the fact that the current form of constructive trust in family affairs remains unsatisfactory. For the courts to establish an equitable ownership in the family home, reliance had to be placed in the constructive trust to establish where the common intention lies. In this regard, Stack v Dowden brought a radical change in the administration of justice as it illustrated that the constructive trust was no longer necessary.
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