The law of equity and trust

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Equity and Trusts Part I Introduction  The law of equity and trust govern the administration of justice in courts.  Equity denotes fairness in deciding any given matter, in this case, property ownership and sharing.  Trust law governs situations in which someone or people entrusted someone else to take care of their affairs.1 53 Cross Street  The property in question and arising ownership issues raise concerns about the application of equality and trust law.  Denver’s interests are not clearly protected because of the absence of a binding agreement, hence the question about his share in the property.  He would have entered a declaration of trust to establish how the investment property in Sheffield is owned within the framework of the Trustee Act 2000 to protect his interests.  Denver is to rely on constructive trust to assert his interest and claim his share of the property.2  As evidenced in Lloyds Bank plc v Rosset, the constructive trust can be anchored on his direct contribution to the purchase of the property.3  The fact that Denver spends £10,000 on repairs can be used to affirm his interests in the said property and contribution to appreciation in its value. Constructive trust comes into

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Trustee Act 1925.

Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776.

Lloyds Bank plc v Rosset t[1991] 1 AC 107 at 133

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play here because he invested in repairs based on the belief that he held shares in the property to the detriment of his finances, the £10,000.4  The equity and trust law has some weaknesses when addressing issues of ownership arising from unregistered interests in a property.  However, in the event that Denver can prove his contribution to purchase, renovation, and other actions he undertook that affirms his interests in the said property, the law of the principle of equity can be invoked in avowing the existence of the constructive trust.

Swettenham Cottage  The basic legal equation of Swettenham Cottage is joint ownership between Denver and Petra, implying that documentation of each of the party’s contribution to purchase is critical to determining the share Denver can get.  Swettenham Cottage can also be considered a matrimonial property because Denver and Petra lived there as husband and wife.  The law of equity requires that Petra be compensated for her sacrifice to take care of children at the expense of her job. In James v Thomas, the court of appeal established that a cohabitant performed unpaid manual work in the partner’s business, thereby effectively contributing mortgage payment.5 The same rule can be invoked in this case to infer that Petra contributed to the payment of the mortgage during the time she had taken a break from work to take care of the children.  Petra also paid for the decoration of the children's bedroom, underpinning her interests in the property.

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Smith v Bottomley [2013] EWCA Civ 953 James v Thomas [2007] EWCA Civ 1212; Adekunle v Ritchie [2007] 2 P & CR DG 20

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 Petra is likely to raise concerns about the contribution of her payment for decorating children's bedroom to the appreciation of the property's value.

For the sake of fairness, when deciding the case, the court would look at the following factors: a) Presence of underage children and their needs. b) The earning of Denver and Petra and their duties during the marriage or civil partnership and in the future. c) The standard of life during the marriage. d) The value of the property.  Until she can present documentation on the amount she spent, it will be hard to establish an exact figure on what each party would be entitled to.

Conclusion  Denver can claim a share in the sale of 53 Cross Street, but this is subject to proof of his contribution to purchase and quantification of the impact of the repairs he performed on the property's value.  For a start, he can claim 25% of the shares based on the contribution to the purchase.  Denver is not entitled to twice the amount of Petra because Petra took a joint mortgage to pay for the £100,000 balance of the purchase price.  Although she did not pay an equal amount to the end, they two agreed that she takes care of children, a task that can be quantified to affirm her contribution to payment indirectly by allowing Denver to work fully as she took care of children. Also, she paid for the decoration of the children bedroom, contributing to the appreciation of the property's value.

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Bibliography Primary Sources Statutes Trustee Act 1925 Case Laws Adekunle v Ritchie [2007] 2 P & CR DG 20.

James v Thomas [2007] EWCA Civ 1212.

Lloyds Bank plc v Rosset [1991] 1 AC 107.

Smith v Bottomley [2013] EWCA Civ 953.

Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776.