Free Law Dissertations - A Resulting Trust Can Be Negated By Evidence Of An Intention Of Gift,
A resulting trust can be negated by evidence of an intention of gift, presumption of advancement or evidence of the contribution being a loan.
PRESUMPTION OF GIFT OR LOAN
There was no intention of gift or loan to Andrew and Beatrice as it was agreed that the £70,000.00 would be in return for their promise that Andrew and Beatrice would take her in when she could not look after herself.
PRESUMPTION OF ADVANCEMENT
The presumption of advancement does not apply to mothers and their children.
CONSTRUCTIVE TRUST
Catherine has another option in this scenario, she could claim an implied constructive trust. In order for a constructive trust to arise, there needs to have been a ‘common intention’ that beneficial ownership of the property was to be shared. In this case, it was agreed between Andrew, Beatrice and Catherine that Catherine would be entitled to stay at Grange House when she could no longer look after herself. In the leading case of Lloyds bank v Rosset, Lord Bridge discussed the difference between the express and inferred ‘common intention’. It would be very difficult in this case to claim that there was express intention, as it must be proved that there was express intention to share in the equity of the property and not just the occupation. Fortunately, Catherine’s direct contribution to the purchase price of Grange House means that the court will infer common intention.
Catherine must then prove that she acted to her detriment by relying on the common intention. This can be shown by her giving up Rose Cottage. It would be up to Andrew and Beatrice to prove in court that Catherine’s actions were not done in reliance on their agreement.
Once Catherine’s beneficial ownership is established, she has a right of occupation under s.12 Trusts of Land and Appointment of Trustees Act 1996.
Catherine’s remedies will depend on which implied trust she chooses to claim under. Under the resulting trust, if Catherine were to agree to the sale of Grange House, she would be entitled to 70% of the sale proceeds. This would equate to £175,000.00 if the house was sold for £250,000.00. Under the constructive trust, the courts would look to give effect to the common intention of the parties. Thus the court could grant an injunction preventing the sale of Grange House and allow Catherine to reside there indefinitely.
Rose Cottage
Ian has acquired an equitable interest in Rose Cottage under the law of proprietary estoppel.
Proprietary estoppel operates here as Catherine, the legal owner of Rose Cottage assures Ian that he will receive rights in her property and Ian, in reliance of this assurance, acts to his detriment.
Traditionally, proprietary estoppel required the satisfaction of the five ‘probanda’. However, courts have been reluctant to follow such rigid guidelines and more often follow the more general principles of assurance, reliance and detriment.
