Equity and Trusts - Case Study Example

Equity and Trusts Table of Contents Table of Contents 2 Introduction 3 Discussion 3 Conclusion 9 References 10 Introduction In the referred case scenario, based on law of real property, David and Victoria used to live together since the year 1990. During the year 1991, David purchased a bigger house without mortgage. Thus, the legality of the real estate was in the name of David. The house required certain decoration along with renovation and in this respect, the task was undertaken by Victoria as David lacked time due to work pressure. Contextually, Victoria as assigned with renovation, hired builders and made necessary arrangements in relation to supplies of building materials. During the year 1992 and 1993, they had children and in the year 2002, David left Victoria and the house. In this regard, David stated that Victoria might use the house till the children have grown up. Moreover, Victoria was assigned with the responsibility of house maintenance and payments of household bills. During the year 2012, David claimed for the house and in this respect, Victoria made a claim of half of the property. In this context, the essay tends to advice David based upon the fact that whether Victoria has any claim to the house in support with UK law cases. Discussion Law of real property has been developed in the constitution of England and Wales with the objective of protecting the rights, equity along with legality in relation to property. The law ensures that the rights along with the interests in relation to property are transferred in accordance with equality as well as legitimately. Real property is dealt in legal manner through contractual deeds or contracts. The English property law provides the owners with ample opportunity to enjoy the benefits that are derived from the purchased estates1;2. It has been recognised from the case scenario that the estate was bought by David without any mortgage. In this respect, the estate belongs to David and contextually, David is the legal owner of the house. David and Victoria used to live together and they have children too. David also made a promise that he will look after Victoria. However, there was no contractual agreement among David and Victoria. Thus, without the formation of the agreement, Victoria would not be liable for demanding a part of the estate. But, Victoria was allowed to live in the house till growing up their children3. Additionally, Victoria was liable to pay the household bills and was also assigned with the task of house maintenance after David left Victoria and the house. In this context, it can be affirmed that Victoria has been residing in the house for a long time period. Respectively, Victoria has certain rights over the estate of David in accordance with the Law of Property Act 1925 under section 1304;5. In the provided case, it can be viewed that David and Victoria was living as unmarried couple, which is also termed as cohabitation couple. According to the English law, both David and Victoria are not liable for enjoying property rights as applicable in England and Wales. It can be stated that the cohabitation relation existing between David and Victoria came to an end as both of them lived apart for a long time period. In this regard, with the end of their cohabitation relation, both David and Victoria will not be held liable for sharing property as well as money. This is owing to the reason that there does not lay basic law relating to provide benefits to the partners under cohabitation relation in the constitution of England and Wales6. It can be apparently viewed that the partners have been living apart for in excess of five years and eventually, the relationship ended. In the UK, cohabitation couples are provided with legal rights as provided to married couples as well as civil partners7. In this regard, from the referred case, it can be identified that David and Victoria have been living together as cohabiting partners. In the UK, cohabiting partners are required to develop cohabiting agreement with the intention of forming a valid deed. The agreement specifies the rights based on which the assets will be divided amid the partners in the case of separation or death. In this regard, the absence of cohabitation agreement as identified from the case scenario ensures that the one who owns individual property is liable to retain them. Contextually, as David possess the estate in his name, so he will be liable for the possession of the property8;9. In the UK, there exist ‘Matrimonial Act 1973 section 24(1)(b)’, based on which married couples along with civil partners are provided with the right of claiming share to the property in case of divorce10. In this context, from the case scenario, it is identified that David and Victoria resides together as cohabiting partners, thus, the law will not be applicable in this case. Contextually, Victoria is not liable to claim to the property of David. From the case scenario, it has been apparent that the property was purchased based on constructive trust law and David was the sole legal owner of the property. In this regard, Victoria did not make any financial contribution in the property. Subsequently, Victoria will not be liable to claim for the share on the property11. The law of detrimental reliance - promise (Eves v Eves) can be applied in the case provided. According to this law, the claimant of any property should produce a legal agreement, presenting the rights towards claiming for the property. Victoria, as identified from the case scenario, did not possess any legal agreement and thus, she is illegible to claim to David’s property12. According to the provided case scenario, it can be affirmed that the case is typically based upon the law of equity and trust. Additionally, the case can be recognised to fall under the English law of family homes. Conceptually, the law of equity implies to a system of balancing the regulation on the basis of which rules are made with the intention of ensuring that fair results are derived in specific circumstances. In the English law, equity is identified as a mean of ascertaining that unfairness in specific cases are not demonstrated on strict applications of common law. Equity also ensures that judgements are made on the ground of substantive principles and accordingly able to judge the consciences of individuals. Moreover, judgements should be made based on procedural rules. Contextually, equity is adopted in the English law with the aim of ensuring that proper judgements are made on the part of both the parties involved in the case13. Based on the concept of equity, English trust law has been developed with the intention of protecting assets owned by one individual and used for the benefit of another individual. Trust also signifies the procedure on the basis of which assets such as money, property and investment are managed for other individuals14. In the referred case, the law of equity and trust is also applicable appropriately as David facilitated Victoria to use the house for residential purpose till growing up of their children. It can be affirmed in this context that Victoria has been residing in the house under trust and can be recognised as a trustee owing to the reason that she was allowed to reside in the house for the benefits of the children who are identified as beneficiary. Specially mentioning, the provided case can be determined based upon express trust as David intended Victoria to live in the house till their children have grown up. Contextually, David as a settler has developed an express of trust for offering benefits to the children and Victoria. In this regard, according to English trust law, Victoria as a trustee is entitled with the tasks of seeking that the children are provided with the benefits of residing in the house till their maturity i.e. up to the age of 18 years and might share the property beneficially as in the case of [Stack v Dowden [2007] UKHL 17]15. Additionally, in case of express trust, the trustee is not authorised to use the trusted property for personal benefits as identified in the legal case of [Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12]16. Thus, Victoria is not eligible to claim half of the property owned by David as in the case of [Milroy v Lord (1862) 4 De GF & J 264]17;18. In this respect, the referred case can be recognised to fall under the law of equity and trusts. This can be justified with reference to the fact that during their relationship, David intended to protect as well as look after Victoria in future. In this regard, Victoria is eligible to claim for the property as applicable in the case of [Paul v Constance [1977] 1 WLR 527]19. Conclusion From the above discussion, it can be comprehended that there are various laws and rules that are applicable in this referred case, which include Law of Property Act 1925, detrimental reliance, Matrimonial Act 1973, cohabitation agreement along with Equity and Trusts Law. It can be apparently observed that according to the Law of Property Act 1925, David was the sole owner of the estate. In this context, David was legally the owner of the house as there was no contractual agreement formed between Victoria and David. Accordingly, based on the principles of cohabitation, the partners are not entitled to share their properties along with other assets in an equitable manner as applicable in the case of joint property and funds. Specially mentioning, Matrimonial Act 1973, constructive trust law and detrimental reliance is not applicable in the case of David and Victoria, due to the existence of cohabitation relationship between them and lack of agreement or evidences of joint ownership of property. Equity and trusts law is applicable in England and Wales where an individual uses another property for certain benefits. Equity and trusts law also implies that individuals are treated in a fair manner. Subsequently, in this case, the intention with which Victoria was allowed to reside in the house is much clear and thus, she possess no rights in claiming half of the property of David. Moreover, it can be concluded that Victoria does not possesses the right to claim to the house due to the termination of cohabitation partnership amid them. References BAILII, ‘United Kingdom House of Lords Decisions’ [1996] (Uploads) accessed 8 February 2014. Bastows, ‘Common Law Husband/Wife’ [n.d.] (Uploads) accessed 8 February 2014. Citizen Advice, ‘Living Together and Marriage: Legal Differences’ [2014] (Uploads) accessed 8 February 2014. Crown, ‘Law of Property Act 1925’ [n.d.] (Uploads) accessed 8 February 2014. Crown, ‘Law of Property Act 1925’ [2009] (Uploads) accessed 8 February 2014. Crown, ‘Trusts and Taxes’ [2013] (Uploads) < https://www.gov.uk/trusts-taxes> accessed 8 February 2014. Crown, ‘Law of Property Act, 1925’ [1925] (Uploads) accessed 8 February 2014. Crown, ‘Matrimonial Causes Act 1973’ [2000] (Uploads) accessed 8 February 2014. Douglas Gillian, Julia Pearce and Hilary Woodward, ‘A Failure of Trust: Resolving Property Disputes on Cohabitation Breakdown’ [2007] (Uploads) accessed 8 February 2014. Great Britain: Law Commission, Cohabitation: The Financial Consequences of Relationship Breakdown; a Consultation Paper (Overview). (The Stationery Office, 2006). Harper John, ‘Principles of Equity’ [2011] (Step Journal) accessed 8 February 2014. Hart Publishing, ‘The Basic Tension of Property Law’ [2013] (Uploads) accessed 8 February 2014. House of Lords, ‘Stack v Dowden [2007] UKHL 17’ [2007] (Uploads) accessed 8 February 2014. Hudson Alastair, Equity and Trusts. (Routledge, 2013). Insite Law, ‘Chapter Ii: Types and Uses of Express Trusts, Past and Present’ [2014] (Uploads) accessed 8 February 2014. Maclaren Warner, ‘Unmarried Couples Rights / Cohabiting Couples. [n.d.] (Uploads) accessed 8 February 2014. Moffat Graham and Gerard M. D. Bean, Trusts Law: Text and Materials. (Cambridge University Press, 2005). West Lyndsey, ‘Cohabitants and Constructive Trusts after Jones v Kernott’ [2013] (Uploads) accessed 8 February 2014. Read More