Competition - post a photo you've taken of nature >>

Land law constructive implied trust

I have been told that a a constructive trust is a form of implied trust, whereas I thought they where two different types and had different criteria to apply.

Which would the following fall into?
-financial contribution to refurbishment
-expert knowledge for redesign of building

The spouse seeking the trust interest (who may have left possessions behind) also had registered home rights. Would I need to apply the 'reasonable inspection' sched 3 para 2 by the new purchaser?

(edited 13 years ago)

Reply 1

jacketpotato

Constructive trusts wouldn't normally be considered implied trusts. However, the word "implied" can sometimes be used in a vague/ambiguous way to include constructive trusts on the basis that CTs are implied by the court.

The financial contribution could potentially ground a CT but you would usually go for a resulting trust.

Relying on knowledge would be a CT.

You only need to go through the Sch3 para2 test if you are relying on Sch3 para2, because it is about unregistered rights that override nothing else. If something is registered it will bind purchasers.

Reply 2

jjarvis

Original post by jacketpotato

Wouldn't contribution to refurbishment usually lead to a beneficial interest under a constructive trust, if at all? I thought RTs usually resulted only from the acquisition of property where more than one party contributes to the purchase price/mortgage liability (or where a party who is not registered as legal owner contributes the entire purchase price). After the acquisition of the property, I thought the court would usually imply a constructive trust if the criteria in Gissing v Gissing/Grant v Edwards are fulfilled. Though post-Stack, there's been a shift towards implying a constructive trust in domestic property. Still, in this case the money contributed to refurbishing the property is presumably post-acquisition.

Reply 3

joes2

Original post by jacketpotato

Thanks. Would CT count as an unreg. interest where Sch3 para2 could apply? E.g. the new owner saw female clothes but didn't ask the proprietor about other occupants.
Finally, would that leave the ex spouse (with CT interest) to pursue her ex husband for the proceeds or the new owner who didn't make reasonable enquiries ?

Reply 4

jacketpotato

Original post by jjarvis

Yes you are right, I guess I didn't read the word "refurbishment"

Original post by joes2

Could do if it is a right of someone in actual occupation

Reply 5

jjarvis

Original post by joes2

If she satisfied sch 3 para 2, her interest would not be overreached and she would actually be entitled to continue living in the property. If her interest were overreached, she'd have to seek her remedy through the ex-husband.

Reply 6

Brianne

just to clarify on the CT point -
wife's registered home right has priority over the purchaser's interest but its only a minor interest. it cannot be promoted to overriding

wife can also then say she has a CT by showing that she contributed to refurbishment and then this CT interest will become an overriding interest provided sch 3 para 2 is met.

also, it may seem like a stupid question but do both minor and overriding interest have the same effect - ie bind purchasers. if so then why would someone want to upgrade their minor interest, which is protected by notice, to overriding by showing their in actual occ? what would be the point? are overriding interests better..?

thanks

(edited 13 years ago)

Reply 7

jacketpotato

Original post by Brianne

Minor interests need to be registered to bind a purchaser. The notice issue is kind of the point - the person with the right does not know who he should give noice to as the owner could sell the property to anyone. You can't identify purchasers in advance and hence you can't give them notice, hence the point of the category of overriding interests.

There isn't really such a thing as a "minor" interest under the LRA2002, its a historical term. Its just a right, and it will either override or it won't, that the right is of someone in actual occupation or not doesn't affect the nature of the right.