#17125 - Trusts Of The Family Home - Irish Trusts

INTRODUCTION:

• Originally, the rule was Dyer v. Dyer, “the beneficial interest of a legal estate results to the man who advances the purchase money of that estate”. Thus, as Hanbury and Martin noted, the beneficial interest of the property is constructed under a presumed resulting trust.

• Historically, there had been no specific set of rules surrounding the assessment of property rights of cohabitees- Pettitt v. Pettitt, recognised the need for legislation in this area in the 1970’s. Where using the orthodox purchase money resulting trust approach, they rejected to devise resolution principles in the court. This brings us to the legislation in the area.

• With the recent advancements in legislation Family Law Act 1995 & Family Law (Divorce) Act 1996, the courts have significant discretion when dealing with property and cohabitees. While these Act refer to the married cohabitants, the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 also brings this into play for those unmarried cohabitants whom are considered to be qualified.

• Under these Acts, the court can adjust property entitlements, however, they can only do so where a cohabitant is qualified and financially dependant on foot of the relationship.

WHERE EQUITY COMES INTO THE MIX:

• There are many equitable rules which are still applicable in certain family disputes:

1. Disputes involving married couples outside the realm of judicial separation/divorce.

   1. Oman v. Oman [2019]; where a dispute arises with the creditor of one of the spouses.

   2. Relationship ended on the death of one of the spouses and there is a dispute concerning what property constitutes the deceased’s estate, EN v. RN [1992].

2. Disputes arising outside the realm of marital breakdown or where the cohabitant is not qualified under the act and is not financially dependent under the Act also.

3. Disputes involving other family members.

- The Irish extended resulting trust approach is a simple contributor friendly approach whereby, the courts look to direct and indirect contributions towards the purchase price, and deal with it on the basis of you almost get what you put in.

- Biehler notes however that the difficulty which arises here under the Irish approach centre around the, “assessing [of] the worth or suitability of the various types of contributions which can be made”

Direct Contributions:

• This is where the direct contributions by a party, clearly represents their beneficial interest, by the means of a presumed resulting trust.

• C v. C; The spouses purchased a family home in the husband's name although the wife made a direct contribution to the purchase price by paying the deposit and some mortgage repayments – after the marriage the wife claimed that she was entitled to a 50% interest in the property.

  • Held that, when a wife makes payments towards the purchase price of a house in the sole name of the husband then the husband becomes a trustee for her of a share in the house proportionate to the size of her contributions. Irrespective as to who’s name the property is in.

  • Quite a generous application of the doctrine of resulting trust in relation to the contribution to mortgages which is a payment to a third party and not to the purchase price directly and has been affirmed in both W v. W, where the beneficial interest is proportionate to the contributions “more flexible contributor approach” here so to speak by Finlay P. & McC v. McC.

Indirect Contributions:

• These types of contributions are where the ambiguity that Biehler was speaking about lies.

• McC v. McC; tricky situation here where you didn’t contribute to the mortgage, but you did pay for other family expenses, while the mortgage was being paid.

  • Uncertainty here some cases said this type of payment made by the contributory should get a proportionate share, others have disagreed and said that there would need to be some element of a prior agreement by the parties to create an estoppel.

  • This again is another example of the court taking the more friendly approach to contributors when it stated that you can get a share from an indirect contribution.

  • Biehler commenting; “While the attitude of the Supreme Court in McC v. McC in relation to the issue of indirect contributions was evidence of a shift towards pragmatism, relief for the [applicant] remained dependant on the fact that she has made a financial contribution to the acquisition of the property, and no cognisance is taken of her work in the home”.

  • This case introduced the de minimis principle, whereby trifling contributions will be not welcomed by the court.

• R v. R; Earlier case, where the court was willing to say that the parties where both earning the same amount and paying the tax liability to joint advantage, the court will compare the gross salaries and what they contribute to work out how much both parties were to be credited.

• GNR v. KAR; Here the husband had expensive tastes which the wife did not approve of, she was quite cheap and minimalistic.

  • In court she successfully argued that some of his salary was being diverted off into things he liked and not into the family kitty.

  • He was able to credit a percent of the portion he had put in.

• These cases sometimes aren’t clear cut as regards to what contributions were made to the family kitty and it creates some mathematical questions for the court which is not in their job description.

• The logical way to approach things is to look at the net income of either spouse.

• Work in the family home by a non-earning claimant, courts have been quite strict here finding it overall sexist and wrong.

• First day in the case of RK v. MK, it was decided that work in the family home was not to be regarded when deciding the beneficial interests of the parties.

• BL v. ML, (pre-Act, needed to contract to joint ownership it wasn’t automatic). This was almost an experiment from Barr J. whereby it was stated that you don’t get anything under a resulting trust for work in the family home.

  • Considered the fact the Art. 41 of the Constitution stated that the mothers place was in the home and therefore they should get a resulting trust.

  • However, this decision was reversed by the Supreme Court as it was discriminatory and would’ve been problematic in the foreseeable future for giving to those staying at home and not to those who do not.

• However, one has to recognised that unpaid work in the other parties business will amount to an economic contribution to the value of the work done. – EN v. RN.

• Improvements; The Irish courts here approach the area of improvements to the home with caution and have been quite strict in the way they consistently refuse to hold a resulting trust for a party whom has paid for improvements, unless with the exception of the party having the ability to show an agreement between the parties that there would be recompensed for making these improvements.

• NAD v. TD; strict approach taken by Barron J, where they were building a house on the site, improving the site, it was held that there was no presumption of resulting trust so no share was to be given unless there was something expressed and agreed between parties, then one could rely on proprietary estoppel.

• Reaffirmed recently in the case of CF v. JDF, [2006] whereby the court held that the family home is the family home it does not extend to include things in proximity to the family home, farm in this case.

• Mortgages & Resulting Trusts; contributions made to the repayment of the mortgage, regardless of whether the money borrowed represented the purchase price, can now generate a trust.

• EN v. RN: claimant contributed to the improvement and money had been borrowed for the improvements and unpaid work contribution, thus paying off the mortgage through improvements and a resulting trust was generated.

The English Common Intention Constructive Trust:

• In England the consensus of judges in these cases are a lot more restrictive and thus there are stricter...