The would be applicable. A constructive trust is

Thegiven question provides several issues which need to be examined and analysed. Themain issue in the case is whether Una is entitled to be a co-owner of theproperty Donal and Celia sold, or alternatively, if she is entitled tohalf-share of the proceeds of sale of the property. Accordingly, the givenfacts will be assessed below to determine the validity of Una’s co-ownershiprights.

 Co-ownershipis a concept whereby two or more people are concurrently entitled to legaland/or beneficial title to an estate in land and may arise from either afreehold or leasehold estate as set out in the Land of Property Act1.Moreover, co-ownership is held by trustees, who are considered the legalowners.  The aforementioned property is registeredunder  in Celia and Donal’s name,therefore, making them the legal owners. Una, the beneficiary, paid Celia’sshare of the mortgage in response to Donal’s promise of making her a co-owner. However,as Una’s payments were not made at the point of purchase, no changes were madeto the entry on the land register and Donal and Celia remained the legalowners.

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 ForUna’s claim to succeed, an equitable interest must first be established. Anequitable interest can be defined as ‘An ownership right in property thatresults from actions or ideas, fairness and justice rather than from a strictlegal ownership.’2This may result from an express or implied trust. The facts of the case showthat Donal and Una did not have an express trust, therefore an implied trustwould apply to the situation. These trusts come in two forms, resulting andconstructive.

A resulting trust will arise when one person pays all or part ofthe purchase price of property, but it is conveyed into the name of the other.However, since Una did not make any payments at the point of purchase, thistype of trust would not apply and therefore, a constructive trust would beapplicable. A constructive trust is often used today to replace the resultingtrust, a means of recognising a beneficial interest in the home in the absenceof an express or statutory trust. Tobegin with, an express declaration of trusts will be conclusive in deciding thebeneficial interests.

However, since this element is absent, Una may be able toclaim a share of beneficial interest under the rules laid down in Lyods Bank v Rosset3.In order to do so, Una would be required to present an express agreement and adetriment suffered by her or a common intention. For an express agreement tosuffice, it must relate to sharing the ownership of the property and not simplyliving together as demonstrated in the case of Otway v Gibbs4.According to the fact of the case, when Donal said, “We’ll be co-ownerrs”, hemade a promise to Una that if she shared the mortgage repayments, property Bwould be half hers. This could suffice to an express agreement.  Once the agreement is established, there mustbe evidence that Una suffered a detriment as a result of reliance on thatagreement. In the case of Grand v Edwards5,it was held that Mrs Grant was entitled to half of the beneficial interestunder a constructive trust as she acted to her detriment by making substantialcontributions to the household expenses which she would not have done unlessshe believed that she would have an interest in the house.

Similarly, Una lefther secure tenancy, commenced payment of the mortgage instalments, in additionto incurring house expenses in reliance on Donal’s promise to make her aco-owner. Therefore, her contributions were substantial and she suffered a lossas a result of the property being sold without her prior knowledge or without obtaininghalf of the proceeds of sale.  Furthermore,Una may also be able to depend on the fact that Donal and herself had a commonintention. This is often used when there is no evidence of an expressagreement.

In such situation, the court may be able to infer a common intentionto share the ownership of the property. Originally, in Lloyds Bank v Rosset6,the court stated that only the contribution of money to the purchase pricewould show the necessary intention. However, this ruling was subsequently foundto be too narrow in the case of Stack vDowden7,where Lady Hale stated that a common intention to share the ownership of theproperty could be actual, inferred or imputed, based on significantcontributions to the acquisition of the property in cash or in kind. This waslater on reconfirmed in the case of Jonesv Kernott8.  Oncea common intention to share ownership has been established, the court willdecide the size of the parties shares according to what is fair, having regardto the whole course of dealings between the parties in relation to the propertyas was shown in the case of Oxley vHiscock9 , whereHiscock paid more than Oxley and therefore, received a larger share of theproceeds of sale.  Nowthat we’ve established a constructive trust where Donal and Celia are the trusteesand Una is the beneficiary, this means that according to s.6(1) of The Trustsof Land and Appointment of Trustees Act10,the trustees have ‘all the powers of an absolute owner’. However, s.

6(5)11states that ‘trustees shall have regard to the rights of beneficiaries’. On topof that, s.11(1)12states that the trustee should consult the beneficiaries ‘so far aspracticable’. As Una did not leave the property before the sale, Donal andCelia cannot argue that it was impracticable for them to consult her.Therefore, it could be said that Donal and Celia were in breach of their dutyas trustee.  Moreover,another issue arising from the case is whether Una has the right to remain inthe property.

Since the property was sold to a third party, the most suitableapproach to be taken would be to prove that Una has an overriding interest. Anoverriding interest is an interest found in registered lands that binds thirdparties although they are not on the register. These interests are set out ins.

29(2)(a)(ii) of the Land Registration Act13.Beneficiaries could defeat the interests of the purchaser provided a) they hadan interest in land b) they actually occupied the land and c) no enquiry hadbeen made to them. Furthermore, the interest must not be overreached.

 Before1980, equitable interests under a trust for sale could not give rise to anoverriding interest. However, the case of Williams & Glyn’s Bank v Boland14changed that as interests under a trust for sale may now give rise to anoverriding interest. Applying it to the case in hand, we could say that it isclear that Una has a beneficial interest under a constructive trust in theproperty that her and Donal used to share, meaning, she has an interest in the land. Priorto 1971, the courts interpreted ‘actual occupation’ as a term of law.

However,the case of Hodgson v Marks15established that actual occupation meant ‘mere physical presence’, which can beestablished as the facts of the case demonstrate that Una lived in the propertyand was in actual occupation at the time of the disposition. Additionally, itis necessary to show manifest physical presence and a continuing intention tooccupy. It could be argued that it was quite obvious that Una showed both whenshe refused to leave the property when Donal asked her to.  Furthermore,another element to be satisfied when examining whether a client has an overridinginterest is whether enquiry was made. Since Balwinder and Rafi did their ownconveyancing, it is reasonable to assume that they checked the register andrelated documents. However, if that enquiry was done, they would havediscovered the existence of the beneficiary, Una.

 Moreover,overreaching is a concept intended to facilitate safe and simpler conveyancing,and takes place when the payment of the purchase or mortgage is made to twotrustees, its purpose is to protect purchasers and mortgagees when there areequitable interests in which they are unaware, since they only deal with legalowners. Additionally, overreaching also protects owners of beneficial interestsin order for them to at least get their share of value of the property, and ifthey don’t, they can sue the legal owners for breach of trust in order toobtain it, meaning, Una may be able to sue to get her share of the proceeds ofthe sale. This was demonstrated in the case of State Bank of India v Sood16,where overreaching took place irrespective of the payment of capital moniesunder a conveyance.  Possible Outcomesfor Una: SinceUna established an overriding interest, that would mean that Balwinder and Rafitook the property regardless of her interest. However, since it wasoverreached, her beneficial interests would be converted from proprietyinterests into financial interests. Therefore, she will be requested to leavethe property and should be given her share of the value of property.

If that isnot done, she may sue Donal and Celia, being the legal owners for breach oftrust in order to receive her share.  Inother terms, as Donal and Celia did not consult Una, it would be a breach ofs.11 of TOLATA. However, this will not necessary mean that they would be ableto sue for breach of trust as ‘the consultation rules are of little effect’17according to Roger Smith.

 Withregard to the dividends of the shares, where the terms of the express agreementare clear, the court will not normally depart from them. However, since theyweren’t, given the facts of the case, it appears that Celia paid the mortgagefor seven years between from 2003-2010 with a total of £26,250, whereas Unapaid the mortgage from 2010-2017 with an equal total of £26,250 and Donal paiddouble this amount as he paid the mortgage between from 2003 and 2017.Therefore, it is possible for the court to quantify the shares to 25:25:50 toCelia, Una and Donal respectively. However, it is worth noting that as Una paidfor household expenses, this will also be taken into account by the court asshown in Midland Bank v Cooke and another18, whereby that both direct and indirect financial contributions wereconsidered. Anotherpossible remedy for Una would be propriety estoppel.

Propriety estoppel is anequitable remedy which prevents a person who made a promise to someone on land,upon which that person relied to their detriment. This remedy also binds thirdparties and therefore, may bind Balwinder and Rafi in relation to the property.In order for a propriety claim to be successful, three elements need to befulfilled; assurance, reliance and detriment.

Donal promised Una that theproperty would be half hers if she shared the mortgage repayments, meaning thather interest in land should have been foreseen. On top of that, she relied onthat promise as she acted on the faith of expectation, which was set out ins.116 of the LRA19,by repaying the mortgage and finally, she suffered detriment as she left hersecure tenancy and suffered financial loss to repay Celia’s share of themortgage.             Bibliography:  1.     Smith, Roger. Property Law. 7th ed. Pearson,2013.

2.     McFarlane, B., Hopkins, N.

andNield, S. Land Law. 1sted. Oxford University Press, 2017.