COHABITATION ANSWERWhenever ownership of a family home is disputed, determination of proprietary rights becomes imperative. (Wong 1998) The Matrimonial Clauses Act 1973 empowers courts to deal with disputes between spouses on the breakdown of marriage. It does not, however, apply to cohabiting couples. Thus, in the absence of legal co-ownership or an express declaration of trust (GOODMAN V GALLANT - such a declaration must conform to s53(1)(b) of the Law of Property Act 1925), cohabitants will have to establish an equitable interest in the property. The analyses equity are primarily: 1) PROPRIETARY ESTOPPEL; 2) IMPOSTITION OF A RESULTING TRUST; AND 3) IMPOSITION OF A CONSTRUCTIVE TRUST.

1) PROPRIETARY ESTOPPEL

The modern test for proprietary estoppel is laid down in RE BASHAM:

If a person, A, has acted to his detriment on the birth of a belief, which was known to and encouraged by another person, B, cannot insist upon his strict legal rights if to do so would be inconsistent with As belief. Edward Nugee QC

RE BASHAM was affirmed in GILLET V HOLT, where the claimant had, over 40 years, worked as a farm hand to the defendants estate in reliance on the assurance that he would inherit the property. Here it was held that there was sufficient detriment to constitute an estoppel in the claimants favour. THORNER V MAJOR tells us that this detriment must be sufficient to shock the conscience of the court.

The court in GILLET V HOLT did, however, advocate the use of the de minimis principle, i.e. equity will do no more than is absolutely necessary to satisfy the estoppel. This principle is evidence in JENNINGS V RICE, where the court felt it only necessary to grant a land charge in favour of the claimant over the disputed property, and in the recent Northern Irish case of MULHOLLAND V KANE where Deeny J noted that whilst the claim is worth in the region of 500,000, an award of only 100,000 is minimum necessary to do equity. Thus, as WONG and HAYTON note, the de minimis awards of estoppel, combined with evidential difficulties may deter a claimant seeking to use proprietary estoppel as a method of establishing a share in a property. However, it must be noted that the great advantage of this method, is that it does not require direct financial contribution to establish a share.

2) IMPOSITION OF A RESULTING TRUST

A cohabitant may assert the existence of a purchase price resulting trust in his favour, so as to recognise the acquirement of an equitable interest in the property which is proportional to his or her own direct financial contribution. That equitable interest is held on trust for the contributor, as it was held in WESTDEUTSCHE LANDESBANK GIROZENTRALE V ISLINGTON BC (BROWNE-WILKINSON LJ). Lord Browne-Wilkinson essentially upheld the traditional position of DYER V DYER, simply that the trust of a legal estate results to the man who advances the purchase money. This may be rebutted with evidence to suggest a different intention of the contributor, but may no longer be done so under the presumption of advancement, which was abolished under s199 of the Equality Act 2010. The main advantage of a resulting trust to a cohabitant is that it is awarded on a quid pro quo basis the claimant gets back what they put it, though usage of resulting trust principles have been seriously doubted by STACK V DOWDEN AND JONES V KERNOTT.

3) IMPOSTION OF A CONSTRUCTIVE TRUST

According to GISSING V GISSING, a person whose name is not on the register of title may acquire an equitable interest in a property under a constructive trust. There must be evidence of an agreement (expressed or inferred) or common intention that the person is to have a beneficial interest in the property at the time of acquisition. Additionally, the equitable owner must have acted on this understanding to his detriment.

In LLOYDS BANK V ROSSET, the defendant had made indirect contributions in the form of supervising building works and doing some redecoration on the husband's property. She attempted to resist the bank's claim on the grounds that, following Williams & Glyn's Bank v Boland, the bank was bound by her equitable interest under a constructive trust since they had failed to obtain her consent to the mortgage. Lord Bridge expressed the view that the detriment could be some material alteration in a partys position in the case of an express agreement, but in the case of an inferred agreement some direct contributions to the purchase price of the property, either initially or by way of some contribution to the mortgage installments, would be necessary. However, Baroness Hale in STACK V DOWDEN suggests (obiter dicta) that Lord Bridge set the hurdle too high in certain aspects and cites the Law Commission discussion paper Sharing Paper in support of her argument.

The leading case as regards the interests of cohabiting couples is JONES V KERNOTT, however it must be noted that this case concerned a couple who bought a house in their joint names. Where this is the case then the following principles apply:

1) Equity follows the law and the couple are joint tenants in law and in equity.2) This position may be rebutted by showing:a. The parties had a different common intention at the time they acquired the homeb. They later formed the common intention that their respective shares would change3) Common intention is to be deduced objectively from their conduct following Lord Diplock in GISSING v GISSING a. STACK V DOWDEN suggests that such evidence may be:i. The relationship between the partiesii. The financial set up of the partiesiii. Whether they owed a responsibility to childreniv. How outgoings are paid. Etc.4) Where it is evidenced that the couple did not intend an equitable joint tenancy, or that their original common intention had changed, the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property CHADWICK LJ OXLEY v HISCOCK a. whole course of dealing is to be given a broad interpretation as regards ascertaining the parties actual intentions.5) In such a case where the home is put into one name only, the starting point is different:a. There is no presumption of joint beneficial ownership.b. Was it intended that the other party would have any beneficial interest at all?c. What is that interest? Evidence of common indention should be deduced objectively from their conduct.i. If the evidence suggests beneficial ownership, but not what proportion, the court will proceed along the lines discussed in STACK V DOWDEN and OXLEY V HISCOCK.