Land Concepts: Equitable Doctrines

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The videos are intended to show the subtle
differences between constructive trust and proprietary estoppel. Before going into the details, we would first
summarize the similarities between the two: First, the claimant must to the knowledge
of legal owner have acted in the belief that the claimant has, or will obtain an interest
in the property. Second, the claimant must have detrimental
reliance on the common intention or assurance. Finally, we should bear in mind that equity
acts on the conscience of the legal owner to prevent him from acting in an unconscionable
manner by defeating the common intention Indeed, Lord Walker in Stack v Dowden, once
made a comment about the distinction of the two. He said that the 2 doctrines were almost indistinguishable
but could not/should not be completely assimilated. Thus, to differentiate the 2, four main differences
were categorized , they are Common intention and assurance
Range of contributions Onus of proof
Range of remedies available Common intention and assurance
When considering the differences between intention and assurance, the latter is often said to
have a wider range. Lord Diplock in Gissing v Gissing required
common intention to induce the claimant to act to his own detriment that by doing so
he would be acquiring a beneficial interest. Such intention can be evidenced by express
discussion OR inferred from conducts of the parties. The intention must be bilateral. For assurance, it could be unilateral. No express promise is needed and mistake of
one party on the legal owner’s acquiescence or passive conduct are considered as well. Assurance is often used as a sword in domestic
or family cases. The next difference is range of contributions. Again, constructive trust includes a narrower
range of contribution. Lord Bridge’s view of “extremely doubtful
whether anything less than direct financial contribution will do” is controversial. Luckily, in [Ip Man Shan], it is confirmed
that this view is only tentative such that payment certainly suffice to be count as contribution. The more liberal view expressed in [Stack
v Dowden], later applied in [Mo Ying] is that personal labour for improvement of trust property,
when considered against the background and whole course of dealing, can be sufficient
contribution for constructive trust especially if they are done at legal owner’s request. When they are done in the absence of express
agreement, claimant would have to establish the causal link between the said intention
and the work done. Proprietary estoppel acknowledges a broader
range of contribution including intangible elements of domestic commitment and endeavour. It could be established without express agreement
or at the request of the legal owner. The causal link between alleged detrimental
act and the common intention or assurance is essential to both constructive trust and
proprietary estoppel. In [Chan Qun Yuk v Kwan Siu Mui], the apprentice
said she would have been loyal to masseur even without masseur promise of giving her
the property, similarly in [Mo Ying], the wife believed that she would have some beneficial
interest by being the wife of the legal owner. Both cases failed because the claimant destroy
evidence of linkage between the contribution and the promise. The third difference is on onus of proof. Similarly, the onus for proving constructive
trust is heavier. Claimant is required to prove acts done in
reliance of the agreement, especially in cases of an agreement of shared ownership but act
is not done at request of the promisor. Onus on the claimant to prove acts done were
in belief of an interest in the house. Proprietary estoppel is more plaintiff-friendly
because of the presumption of reliance once assurance is established. Legal owners need to disprove that there was
no reliance. The final difference is on remedies available. Constructive trust is concerned with identifying
the true beneficial owner of the property, and the size of their beneficial interests. The effect is retrospective, so as to say
that it starts from the moment the facts which gave rise to it, meaning the detrimental reliance
on the common intention, took place. However, the claim in proprietary estoppel
is a mere equity, which is to be satisfied by the minimum award necessary to do justice,
as established in the case of Crabb. The judge would have the discretion to award
various kinds of remedy, such as monetary compensation, a licence, tenancy, or sometimes
a beneficial interest in the property. Here is a brief comparison on equitable doctrines,
namely constructive trust, proprietary estoppel, resulting trust and presumption of advancement. As a starting point, equity follows the law–
the legal title will determine the beneficial interest in the house. Therefore, we would look at who holds the
legal title first. There is no need for claimants under RT and
PE to have a legal interest in order to argue the presumptions apply. Note that for PA to be invoked, the claimant
must be a legal owner. For CT, the first hurdle laid down in Stack
v Dowden relates to the legal title. If the property is in the sole name of the
defendant, the claimant needs to prove that it is intended for he or she to have beneficial
interest. In joint name cases, the first hurdle will
be passed. It was established in Stack v Dowden that
the court would take a holistic approach to assess whether there is a common intention
to share the property, either by evidence of express discussion or inference or imputation
throughout the whole course of dealing. The presumption of advancement can be displaced
if there is evidence that no gift was intended. In PE, the focus is on defendant’s assurance
giving rise to an expectation that the claimant would have an interest in land. Even if the claimant has a unilateral expectation,
the court will still considered it as assurance if the defendant unconscionably encouraged
such belief. Next, we would look into the significance
of financial contribution of the claimant in each equitable doctrine. In proving CT, direct contribution to the
purchase price is a clear indicator of detriment suffered by the claimant. Home improvements and household spendings
will also count. On the other hand, in finding detriment in
PE, it is not necessary for the claimant to contribute financially to the property, although
expenditure on the improvement to the land counts. Various non-financial detriment has been recognised
as giving rise to equity, including domestic commitment with no wages received and allowing
herself to get pregnant. Financial contribution to the purchase price
will give rise to a presumption of resulting trust. According to Dyer v Dyer, the equitable shares
will be determined by the proportion of the parties’ contribution to the purchase price. Deposit and mortgage will also count. If a person qualifies for a discount on purchase
price, this will be regarded as a contribution too. Generally, payment of household bills, providing
furnishings and home improvements will not count, as seen in Petitt v Petitt. However, according to Burns v Burns, substantial
household spending will count if the contributions had been necessary to allow the mortgage payments. Under PA, there is no need for the claimant
to contribute anything to the property as it is a gift. We would now compare the nature of the parties’
relationship in each case. For RT, the mathematical calculation of beneficial
shares would apply in commercial context. Lord Neuberger, however, in his minority judgment
in Stack v Dowden, supports the use of RT in cases of co-habitants. PA can only be invoked if the property is
a gift from a parent or who stands in loco parentis to the child. It could also be a gift from husband to wife. CT is applicable in domestic context, which
includes co-habitants. There is no restriction to the parties’
relationship in raising PE. But according to Western Fish Products, an
estoppel could not be raised to prevent a statutory body exercising its statutory discretion
or performing its statutory duty. The remedy provided under RT, PA and CT would
be beneficial interest in the land. If succeed, the claimant would get back what
he or she paid for or gifted with or expected. There is a wide range of remedies available
under PE that court will grant on a case-to-case basis. It could be an irrevocable license, legal
estate, monetary compensation or right of way. We can see it is a more flexible doctrine.

 

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