#16446 - Family Property Notes - Property law

12. FAMILY PROPERTY

EXAM QS:

March 2013: essay on critically evaluating the legislative protection afforded spouses AND same sex couples in relation to family property in Ireland- need to mention FHPA 1976, s 3 and 4 in relation to family home, right of veto, consent, Family law act 1995, divorce act, s 56 under succession act 1965 upon death.

Oct 13: Problem Q on existing legislative and equitable protections to spouses under legislation. Fam home in Barrys name. He was having affair. He said to bank his wife was dead to him. Bank took this literally so barry had to sign declaration she was dead. Barry defaulted on mortgage. Bank intends to sell farm and fam home. Never consented.

March 14: Essay: Critically evaluate the legislative protection afforded same-sex couples in relation to the 'shared home' in Ireland. Support your answer with reference to appropriate authority. NOT EQUITABLE.

Sept 15: Critically evaluate the legislative protection afforded spouses and same-sex couples in relation to family

property in Ireland. Support your answer with reference to appropriate authority.

INTRODUCTION

Historically it was common practice for the family home to be registered or legally owned in the name of the husband only – leaving the wife with no legally recognised interest over the property. Homes are given particular protection because of the role that they place in the development and security of family life. In Ireland there are 3 schemes of significance:

1. Resulting trusts

2. Family Home Protection Act 1976

3. Law relating to the division of property on the breakdown on marriage

Equitable Interests – Presumed Resulting Trusts

These trusts arise as a result of direct or indirect contributions to the acquisition of property.

Direct contributions contributions towards the actual purchase of the property e.g. payment of deposit or mortgage. They can be made expressly or through a joint bank acc from which the mortgage is repaid.

CvC a husband and wife purchased their family home in their joint names, financed by a mortgage and a gift and loan from the couples parents. Only 2 mortgage repayments were made before the building society obtained an order for possession. The couple also had loans. The husband left the family home. The wife sought to have the property transferred into her name under s 5 of the Family Home Protection Act 1976. Although Kenny J did not accede to this application, he did clearly enunciate the principles of direct contributions, holding that the wife’s contribution entitled her to a share of ownership, so that the husband held the property on trust for both of them as tenants in common.
HD v JD family home bought in H name but W’s earnings were paid into financial pool out of which mortgage was paid. On separation held that W had equitable interest in the family property. Joint bank account from which the mortgage was repaid.

W v W this approach also accepted by Finlay P.

Indirect contributions contributions that aid the owner in the purchase of property but do not constitute actual contributions to the purchase price. Whether or not indirect contributions give rise to a presumed resulting trust has long been the issue of some controversy in the Irish courts but was finally resolved in the case of McC V McC. Indirect contributions would be paying bills.

Before this Irish Courts had followed Gissing V Gissing where the HOL said you did need a formal written agreement between parties for an indirect contribution to give share in ownership of the property. Adopted a common intention constructive trust. It enables a non-legal owner to claim a share in the family home through a declaration of a beneficial interest in their favour, but has been described as a “Frankenstein doctrine” of judicial creation by Rotherham. The indirect contribution on its own is not enough.

In W v W the Wife claimed she was entitled to the beneficial ownership by means of a resulting trust on the basis of her contribution towards financing the improvement of the property. Court held the wifes claim for a beneficial interest based on contributions was not sustainable. Contributions towards the acquisition of property would give rise to trust. However contributions towards improvements of party would only result in an entitlement on the part of the contributor.

Finlay P held that when a wife contributes to a “general family fund”, she is entitled to an equitable interest in the absence of an inconsistent agreement or arrangement. In that case mortgage repayments relating to the family farm had been paid off partly as a result of her contributions.

McC v McC – a married couple living in Dublin and the H got transferred to Cork. House sold with 1800 left over. W was entitled to 600 as she had put in a third and asked for it to be reinvested in the new property in Cork.

• The house was purchased in Cork and the deposit was paid and the balance was paid for with mortgage, which was deducted from H salary. The 600 was used to purchase furniture. Marriage broke up- W claimed a share of ownership. HC held that the contribution was indirect as it was not a payment of the deposit of mortgage and W was only entitled to the furniture.

• SC said there is no distinction between direct and indirect and on this basis it is clear that both give rise to equitable interest with no agreement being required in this jurisdiction. This case has also shown that contribution of work to a family business may now be accepted more readily as a contribution resulting in beneficial ownership.

Henchy J – where the matrimonial home has been purchased in the name of the H, and the W has, either directly or indirectly, made contributions towards the purchase price or toward the mortgage instalments, the H will be held to be a trustee for the wife of a share in the house proportionate to the wife’s contribution.

Contributions will result in ownership by means of a RT only if they relieve the “owning spouse” of responsibility for the purchase of the property i.e. contributions towards the purchase of the property. Contributions towards improvements are generally not regarded as giving rise to a trust.

As noted by De Londras, thus while the applicant did not succeed in having her contribution recognised by means of a share of equitable ownership under a resulting trust, the decision in McC v McC is of immense importance because it states clearly that direct and indirect contributions are treated in the same manner under the law, neither requires an agreement to give rise to a RT but both can have this effect only if they are contributions towards the purchase of property itself.

De Londras – one of the most implications of McC has been that the contribution of work to a family business may now be accepted more readily as a contribution resulting in beneficial ownership rights by means of a resulting trust. For quite some time, this area of law has been unsettled.

N v N – the wife’s management of flats that the couple let out was taken into consideration in the awarding of a beneficial interest in her favour. There was a distinction between work the wife did in managing bedsitter flats and the work as wife and mother in the home. The income from the enterprise went directly to the payment of the mortgages on the property .

Only contributions recognised as contributing towards the purchase of the property will be said to result in a resulting trust. Contributions to improvements are generally not regarded as giving rise to a trust because the property improved is already owned.

NAD v TD relegated improvements to a separate category. House was built on land which was solely the property of one partner. This shows the limitation. Barron J held that the principles of improvements from W v W continued to apply.

This case followed W v W where it was held that W would have to show she was led to believe that she would be recompensed for contributions to improvements of the property and even still would only be entitled to monies and not a right of equitable claim.

L v L – unpaid work in the home does not count as a contribution to the purchase of the property and does not give rise to a presumed RT. Important case. This begs the question as to why there is a distinction made between unpaid work in the home and unpaid work in the legal owner’s business. The Sct seems to be hindered by their view that the repayment of a mortgage constitutes the “direct” provision of the purchase price of the equity of redemption.

• In this case, the property had been purchased by the H without a mortgage. The property was used as a show home and the H brought guests and clients over while his wife acted as hosts and entertained and cooked for them.

• The wife succeeded in the High Court and Barr J stated that the constitution recognised the work in the home and could be entitled to equitable ownership in the property.

• De londras – the decision was ground breaking – 1^st occasion of irish courts engaged in consideration of article 41.2 in a manner that recognised it as giving real and substantial socio economic entitlements as opposed to being merely an aspirational statement of prevailing values in 1937.

• However, the Supreme Court overruled this on the following grounds:

1. Art 41 of the Constitution was there to protect and not give rights

2. Separation of powers – it was a legislative matter

3. Creating rights for wives and mothers in the home

As de Londras notes, whether or not one spouse’s work within the home gives rise to beneficial interest in the property has long been the focus of significant...