Last updateTue, 24 Feb 2015 5pm

University of Greenwich

University of Greenwich

Mark Pawlowski examines the presumption of a resulting trust where assets are owned by a company

In what circumstances is it open to a claimant to argue successfully that assets vested in the legal ownership of a company belong to them beneficially, relying on the presumption of a resulting trust? The point has been considered recently by the High Court in NRC Holdings Ltd v Danilitskiy [2017], which raises new issues surrounding the applicability of the presumption in cases involving the ownership of company assets. Until now, the leading case on this topic has been Prest v Petrodel Resources Ltd [2013], a decision of the Supreme Court, which merits initial consideration.

Mark Pawlowski considers the case for accepting backwards tracing as part of English law

In Bishopsgate Investment Management Ltd (in liquidation) v Homan [1994], the Court of Appeal held that the equitable remedy of tracing did not extend to tracing through an overdrawn bank account, whether it was already overdrawn at the time the relevant money was paid into it or which was then in credit but subsequently became overdrawn by subsequent drawings.

Mark Pawlowski summarises how a non-owning cohabitant can obtain capital provision under the Children Act 1989

In the typical case, a non-owning cohabitant will seek to claim a beneficial interest in their partner’s house by relying on a constructive trust based on either an express or inferred common intention between the parties that ownership of the property was to be shared. Assuming a common intention (coupled with the necessary detrimental reliance) is established, the task of the court is then to assess the actual proportions in which the parties intended to hold the property by reference to what they expressly agreed or, failing that, by a process of inference or imputation from the surrounding circumstances. This approach stems from the combined effect of the House of Lords’ rulings in Lloyds Bank plc v Rosset [1990] and Stack v Dowden [2007] and the Supreme Court decision in Jones v Kernott [2012].

Sandra Clarke examines the factors that determine a contract for the disposition of an interest in land

The recent Court of Appeal decision in Rollerteam Ltd v Riley [2016] adds to the decided cases surrounding s2(1), Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989), a provision that has required considerable judicial interpretation. This article considers the main aspects of the section that have required consideration.

Mark Pawlowski asks whether there is scope for giving effect to informal land agreements by applying the doctrine of proprietary estoppel

In Yeoman’s Row Management Ltd v Cobbe [2008], Lord Scott indicated that an agreement to acquire an interest in land which did not comply with s2(1) of the Law of Property (Miscellaneous Provisions) Act (the 1989 Act) could not be saved by the application of proprietary estoppel. Although s2(5) of the 1989 Act expressly makes exception for ‘resulting, implied or constructive trusts’, it significantly makes no reference at all to proprietary estoppel. In the words of Lord Scott:

Mark Pawlowski highlights some of the pitfalls associated with mutual wills that may have consequences on relationship breakdown

Mutual wills arise where two parties (usually husband and wife) make identical wills, pursuant to a legally binding agreement, in each other’s favour on terms that the survivor will not revoke their will without the consent of the other. Revocation will normally give rise to a claim for breach of contract during the joint lives of the parties. However, where one party has died, and the survivor revokes their will, the estate of the deceased can no longer maintain an action for breach of contract. In that scenario, an equitable constructive trust for the benefit of those entitled under the deceased’s estate is imposed on the survivor from the time of the other party’s death, in order to prevent an equitable fraud. A fraud would arise if the survivor goes back on the mutual agreement and seeks to take the benefit of the property in a way that is inconsistent with the agreement that it was to be dealt with in a particular way for the benefit of the ultimate beneficiary; see, for example, Charles v Fraser [2010].

Mark Pawlowski discusses the case law on testamentary trusts for useless or capricious purposes

The notion that a trust may fail because it serves no useful purpose or reflects merely the whim or fancy of the testator seems to fly in the face of testamentary freedom and, in particular, the testator’s right to dispose of their estate in whatever manner they choose, subject only to the court’s control over illegal or immoral conditions and the making of reasonable financial provision for their family and dependants. So how have the courts grappled with these two competing aspects of public policy?

Mark Pawlowski analyses when a lease can be terminated using surrender by operation of law

A surrender is the process by which a tenant gives up their leasehold estate to their immediate landlord. The lease is essentially destroyed by mutual agreement. An express surrender of a term of more than three years must be made by deed: s52(1) of the Law of Property Act 1925 (the 1925 Act). Otherwise, the express surrender must be in writing: s53(1)(a) of the 1925 Act.

Mark Pawlowski asks whether political activities should be charitable

Charities are becoming more political in character and less concerned with symptomatic relief. The concept of charity today is one of public campaigning, lobbying and self-promotion. But to what extent has charity law reflected this increasingly important role? The writer suggests that it may be time to review the scope and significance of the legal principle that political activities are not charitable.

Is a sub-trust a disposition for the purposes of s53(1)(c) of the Law of Property Act 1925? Mark Pawlowski and James Brown assess the current position

Suppose a legal owner (A) declares themselves a trustee of property in favour of an intermediate trustee (B) who (in turn) declares themselves a trustee for a beneficiary (C). Does the sub-trust in favour of C trigger a requirement of signed writing under s53(1)(c) of the Law of Property Act 1925? That section, as we know, applies to dispositions of subsisting equitable interests so the question is whether a declaration of a sub-trust falls to be characterised as effecting a ‘disposition’ of B’s equitable interest under the head trust. Surprisingly, there is no easy answer to this question.

Mark Pawlowski questions the usefulness of legal fictions in leasehold law

A recurring concern among legal practitioners is the fear of uncertainty in our law. One obvious consequence of uncertainty is that it may become difficult (or even impossible) to predict with any degree of accuracy whether or not a given claim is likely to meet with success. Harman J in Campbell Discount Company Ltd v Bridge [1961], at 459, put it neatly: ‘the process of robust over-simplification may lead, if followed far enough, to palm-tree justice’. The days of the portable palm tree are not yet with us, but there is a growing tendency among the judiciary to latch on to a variety of legal abstractions as a means of disguising the inherently subjective nature of their decisions.

Mark Pawlowski explores the rules governing liability of joint tenants and their guarantors for rent under the lease

Where a lease is granted to more than one person, it may be important to decide whether they are liable to the landlord individually or collectively for the rent. Moreover, if a guarantor is made a party to the lease, are they guaranteeing the liability of just one or all the tenants named in the lease? If the guarantor discharges the liability to pay rent to the landlord, can they recover the amount from the defaulting tenants?

Mark Pawlowski explains the court’s power to relieve an unlawful killer from forfeiture of their victim’s estate

The common law rule of public policy, which prevents a person who has unlawfully killed another from profiting from that death, is intended to act as a disincentive to criminal activity and to reflect public conscience. At the same time, the Forfeiture Act 1982 is intended to militate against the strict application of this rule by giving the court power to grant relief to persons found guilty of unlawful killing (other than murder) from forfeiture of their inheritance and other similar rights. This article examines the forfeiture rule and comments on several cases that explored the nature and scope of relief currently available under the 1982 Act.

Mark Pawlowski looks at a landmark ruling on how an agent who has taken advantage of a bribe or received a secret commission in breach of their fiduciary duties holds the amount received

FHR European Ventures LLP v Cedar Capital Partners LLC [2014] is a landmark case on unauthorised profits, not least because the court has taken the opportunity to sweep away almost 200 years of judicial and academic debate as to whether a principal has a proprietary remedy in cases where their agent has taken a bribe or received a secret commission in breach of their fiduciary duties.

Mark Pawlowski examines to what extent it is possible to make a deathbed gift of land

Essentially, three conditions must be satisfied for an effective donatio mortis causa of land. First, the gift must have been made in contemplation of death meaning ‘not the possibility of death at some time or other, but death within the near future, what may be called death for some reason believed to be impending’: Re Craven’s Estate [1937] at 426. Secondly, the gift must be intended by the donor to be conditional on death. The effect of this requirement is that the gift remains revocable by the donor at any time prior to their death. Thirdly, the donor must part with dominion over the property before their death – in other words, there must be a parting with the donor’s ability to control the property: Birch v Treasury Solicitor [1951].

Mark Pawlowski examines a recent case on the meaning of tenant’s fixtures in the context of a disputed claim to commercial plant and machinery

In the recent case of Peel Land and Property (Ports No 3) Ltd v TS Sheerness Steel Ltd [2013], the court was asked to consider whether certain large items of plant and machinery installed by the tenant in a steel mill were to be regarded as fixtures belonging to the landlord or, alternatively, as chattels or tenant’s fixtures capable of removal by the tenant. The judgment of Morgan J is of particular interest in its analysis of the legal distinction between chattels and fixtures and the acknowledgement that, although objects may start out as being chattels built into a building’s structure, they may nevertheless become in law part and parcel of the land and removable as tenant’s fixtures.

Mark Pawlowski considers the Court of Appeal’s decision in Pankhania v Chandegra, which discusses whether express declarations of trust are conclusive

It is accepted as established law that, where the parties execute a trust expressly declaring their respective beneficial interests in property, this will be conclusive of the parties’ common intention as at the time of the declaration in the absence of fraud, misrepresentation, undue influence or mistake permitting a party to rescind or rectify the trust: see, for example, Wilson v Wilson [1969], where the declaration of trust was rectified on grounds of mistake. In most cases, therefore, this means that the size of the parties’ respective shares upon acquisition will be determined according to the terms of their express trust regardless of their actual contributions to the purchase of the property.

Mark Pawlowski and James Brown consider a recent ruling on proprietary relief for a secret commission acquired by an agent for securing the purchase of a property

It is trite law that a fiduciary is not entitled to profit from a breach of their fiduciary duty. If they do make an unauthorised profit by use of their position as a fiduciary, the beneficiary’s primary remedy is a personal one involving the fiduciary’s duty to account for the profit in equity (see Target Holdings Ltd v Redferns [1996]). Although an equitable account may suffice in most cases, the difference between a personal and proprietary remedy may be crucial where the fiduciary is insolvent, or where the secret profit has been invested by the fiduciary in an asset that has increased in value, or where the asset in question has been passed on to a third party. A proprietary remedy permits the beneficiary to follow the assets (or trace their value into identifiable substitutes), unless they pass into the hands of a bona fide purchaser for value without notice of the claimant’s proprietary interest (see Foskett v McKeown [2000]).

Mark Pawlowski considers some potentially far-reaching implications arising from recent case law on ownership of the family home

The Supreme Court ruling in Jones v Kernott [2011] has gone some way towards clarifying the correct approach in identifying the parties’ common intention in joint ownership cases in circumstances where it is not possible to deduce their shared intentions from their own express words or conduct. In these limited circumstances it is now open to the court to assess the parties’ respective beneficial shares by reference to a yardstick of fairness. In the result, the Supreme Court restored the order of the trial judge giving the claimant, Ms Jones, a 90% beneficial share in the home in preference to the majority view of the Court of Appeal, which favoured an equal division of the equity reflecting the parties’ joint legal ownership at the time of acquisition.

Mark Pawlowski asks whether a spouse or unmarried partner can acquire a beneficial share in property by relying on the owner’s informal declaration of trust

As far as I am aware there have been only two reported English cases where a claimant has argued for a beneficial share in property based on an oral declaration of trust: Rowe v Prance [2000] and Paul v Constance [1977]. This is, perhaps, not surprising in view of the fact that such a claim is more likely to prove successful in the context of a declaration of trust of personalty because of the evidentiary requirements imposed by s53(1)(b) of the Law of Property Act 1925 in relation to declarations of trust of land.

Mark Pawlowski considers the rights of a lender when faced with an unlawful tenant on the mortgaged premises

Most mortgages contain a prohibition on the borrower entering into tenancies of the mortgaged property without the prior approval of the lender. Indeed, if title to the property is registered, it is customary for the exclusion of the mortgagor’s powers of leasing (contained in s99 of the Law of Property Act 1925) to be noted on the register of the property. What then is the position of a tenant who has been granted an unauthorised tenancy of the premises in breach of the mortgage deed? Is he obliged to vacate if the landlord defaults on the mortgage and the lender seeks possession?

Mark Pawlowski asks whether a spouse or unmarried partner can acquire a beneficial share in property by relying on the owner’s informal declaration of trust

As far as I am aware there have been only two reported English cases where a claimant has argued for a beneficial share in property based on an oral declaration of trust: Rowe v Prance [2000] and Paul v Constance [1977]. This is, perhaps, not surprising in view of the fact that such a claim is more likely to prove successful in the context of a declaration of trust of personalty because of the evidentiary requirements imposed by s53(1)(b) of the Law of Property Act 1925 in relation to declarations of trust of land.

The Starglade case casts light on the meaning of dishonesty in the context of accessory liability, as Mark Pawlowski discusses

The meaning of the word ‘dishonesty’, in the context of the liability of a third party who has assisted in a breach of trust, has been the subject of considerable judicial scrutiny over the past few years. In Royal Brunei Airlines Sdn Bhd v Tan [1995], Lord Nicholls used the word in an objective sense as meaning not acting as an honest person would in the circumstances. An element of subjectivity, however, was inevitable in this formulation since honesty could only be assessed properly in light of what a person actually knew at the relevant time given their own personal attributes, intelligence and experience.

Mark Pawlowski provides an update on Jones v Kernott and its consequences for constructive trusts and the home

Is it open to a court to attribute to co-owners of a family home an intention to vary their equal beneficial shares following the parties’ separation where one party continues to live in the home and assumes sole responsibility for its continuing acquisition and maintenance? This was the specific issue addressed by the Court of Appeal in the recent case of Kernott v Jones [2010] where mixed views were expressed by their Lordships as to the correct approach in identifying the parties’ common intention in such circumstances.