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    I am finding this extremely difficult. Please help I would really appriciate it more than you imagine!

    *Roxanne and Oliver bought a house together but it was registered in Roxannes sole name so Oliver's ex-wife could not make a claim against it. Roxanne provided £25,000 for the deposit and took out a mortgage of £225,000
    *Oliver paid for all living costs and carried out renovations while the couple lived together. This allowed Roxanne to pay the mortgage. Oliver and Roxanne never married. Their relationship broke down and six months ago Oliver moved out of the house.
    * Roxanne has now sold the house for £400,000 and after clearing the mortgage £250,000 was paid into her account (Her bank account was overdrawn by £10,000 at the time.) Roxanne has bought a flat using £200,000 from the proceeds of sale. The flat is registered in her sole name. Roxanne also spent £30,000 to renovate the flat and £5,000 on a painting as a gift for her parents. Leaving £5,000 in her account.

    Roxanne has written to Oliver telling him he is entitled to nothing because the property was in her sole name.

    Fully explain and the relevant law and advise Oliver if he is entitled to any of the proceeds of sale of the house. On the assumption that he is, explain how this amount will be quantified, how and from whom he can recover the money and what action, if any, he can take to bring about a sale of Roxanne’s flat.


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    As a disclaimer, the problem question you've given has a lot of overlap with the material i covered last year and what I am covering this year - I can only vaguely recall the requirements for a family home constructive trust, and my current course is focused more on RTs in the context of apparent gifts/failing trusts , and CTs in the context of mutual wills, secret trusts, Rochefoucauld v Boustead and Pallant v Morgan.

    (Original post by thelawstudent1)
    *Roxanne and Oliver bought a house together but it was registered in Roxannes sole name so Oliver's ex-wife could not make a claim against it. Roxanne provided £25,000 for the deposit and took out a mortgage of £225,000.
    Legally, R has legal title to the house. This is because formalities require, for O to have a beneficial interest, signed writing under s.52(b) LPA 1925. However, s.52(2) LPA allows an exemption from formalities if there is a CT/RT.

    SO, as soon as it said 'bought together' you should be thinking about potentially a constructive trust (because of the family home context, see Hale in Abott v Abbott, confirming Stack v Dowden), but that would require there to be a joint mortgage, joint occupation etc under Jones v Kernott. This is clearly not satisfied here, so next you should be thinking about a case like Paul v Constance, to see if you can overcome the lack of formalities to impose an express trust, despite formalities, but that case has been doubted (and is in conflict with other judgments, e.g. Richards v Delbridge), and thus that route is unlikely.

    Therefore, you need to look for another way to get around the fact that they have deliberately not complied with the formalities that would have been needed.

    *Oliver paid for all living costs and carried out renovations while the couple lived together. This allowed Roxanne to pay the mortgage. Oliver and Roxanne never married. Their relationship broke down and six months ago Oliver moved out of the house.
    Here you are able to latch onto a specific reason for why a trust should be imposed - O paid for all living costs and carried out renovations which ENABLED R to continue to pay the mortgage, to continue gaining a beneficial interest in the property. This could be used as a basis for proprietary estoppel, but as that claim is less certain in outcome to a trust claim, it would be better to impose a CT.

    As I said before, I can't recall the exact requirements for a CT, but I believe it requires some kind of inducement, detriment and a common intention. These all seem to be fulfilled - inducement by agreeing to purchase the property together, which then convinced O to act to his detriment in renovating the property and paying living costs, plus common intention as the only reason why no formalities was to stop O's wife having an interest.

    If CT, likely 50/50 because purchased together - the intent was for joint ownership. If not, then contributions, and the fact that this is the same as would have been under an RT is irrelevant (see Neuberger in Stack v Dowden or Gallarotti v Sebastienelli).

    O has now moved out so, as a side note, no claim for actual occupation upon R selling the house.

    * Roxanne has now sold the house for £400,000 and after clearing the mortgage £250,000 was paid into her account (Her bank account was overdrawn by £10,000 at the time.) Roxanne has bought a flat using £200,000 from the proceeds of sale. The flat is registered in her sole name. Roxanne also spent £30,000 to renovate the flat and £5,000 on a painting as a gift for her parents. Leaving £5,000 in her account.
    Roxanne has written to Oliver telling him he is entitled to nothing because the property was in her sole name.
    Sold, so State Bank of India v Sood ensures that O's beneficial interest is overreached, going to the proceeds instead. R had a duty to get the best price possible (Downes v Graybrook; Buttle v Saunders), but assuming so, £200,000 each if 50/50 under CT. Cleared mortgage, leaving £250,000 so £125,000 each.

    Paid into a bank account, which doesn't allow tracing: Foskett v McKeown UNLESS both innocent sources (Clayton's Case) but not here. The account was overdrawn, which usually means a dissipation that can't be claimed back: Bishopsgate v Homans, UNLESS paying back a debt which was taken to purchase another asset, or loan was secured on the purchase of another asset. Neither, but because R also has an interest in the fund (Liew), attribute £10,000 to R share.

    This leaves £115,000 to R, and £125,000 to O. R then buys a flat for £200,000, registered in her own name but using proceeds of sale, uses £30,000 to do up the house, £5,000 on a painting and £5,000 left.

    This brings in the rules on evidential uncertainty. It is impossible to tell exactly which parts of R's dissipations of the trust money are attributable to which part of the fund, as every unit is identical. In this case, Roscoe v Winder is departed from, and look to the rules on evidential uncertainty. The rule when there is a balance left is that you start from the balance (Re Hallett's Estate), and if there was an investment and no balance, B has the investment (Re Oatway). The issue is when both are present, as here, as although Rimer J in Shalson v Russo suggested B can 'cherry pick', Turner v Jacob suggested B must start from the balance. However, Turner did not refer to Shalson and L&O prefer Shalson for its advantages for Bs.

    Assuming Shalson is correct, B can pick between the investments to get the best possible outcome for proceeds. O could claim a proportion of the flat, worth £125,000 (so 5/8 of the flat), attributing the other disbursements to R. Would largely depend on the value of the painting and the property now. Also, court may find it unfair to attribute the entire cost of improvement to R when O also benefits, meaning O may have to account for £15,000 of the improvements in his share.

    As for forcing a sale of the house, I can't remember but I would think it would be under TOLATA - I'm at least sure there are sections (I think s.19?) allowing Bs to force the T to retire, and also allowing them to force a sale. I'm not sure on that point, however.

    Hope that helps.
 
 
 
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