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Introduction
Lecture 1
Property A learning types of interests, property B starting how those interests interact with one another. How they compete or coexist? Learn Torrens system in detail and how it affects priorities in land . Problem solving and application also form objectives.
1. Express Trust
When: 1. inter vivos While alive (between the living) 2. After death through a will (does not take effect until you die) Who: Trustee legal owner, the person with the proprietary interest at law. Beneficiaries persons holding the beneficial interest in the property, equitable owner. How :
By transfer - transferring legal title to the trustee in order to hold that property on trust for the beneficiaries. By declaration - declare yourself as the trustee. Expressed trust MUST BE IN WRITING and signed EITHER WAY (Requirement of the PLA S53 (1) (b))
53. Instruments required to be in writing (1) Subject to the provisions hereinafter contained with respect to the creation of interest in land by parol(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;
How : 1. Trust is Presumed by the law 2. Trust is Imposed by the law Who: Trustee holder of legal title. Beneficiaries holding equitable title. The party the law is trying to protect for policy. (frequently both parties are unaware that a trust exists, not deliberately created by someone, its all automatic). Types :
Resulting Trusts
Presumed by operation of law the title can split up in equitable and legal. Which interest are better legal or equitable? equity is the true situation and meant to prevail in court there are complicating factors for instance o equitable relief is discretionary and may be trumped where o You come with unclean hands or o Youre a volunteer or third party interests. o The Torrens System which sets up a whole set of priorities. When: Arise in circumstances such when equity presumes (despite transfer of legal title to one person) that the transferors intention was for some/all of the equitable title to be held/retained (by transferor himself or another person)
PRESUMPTION OF RT arises Resulting Trust arises because equity infers or persumes where its assumes - purchasers does not intend to make a gift. -----> three steps in answering a RT question: First: does one of the circumstances giving rise to the presumption of RT exist? Second: two ways of rebutting. Lastly: If Presumption of Advancement exists, need to consider if there is evidence of a contrary intention to that presumption? Can PoA be rebutted by evidence to the contrary, that the person does not intend to gift? Eg it evidence it was intended as sale or loan. CIRCUMSTANCES WHICH GIVE RISE TO PRESUMPTIONS OF RESULTING TRUST: Named by Gibbs J in Calverly v Green 1984 PURCHASE MONEY RTs 1. Legal title holder not paid the purchase price. 2. Legal title holders dont hold legal title in same proportions to which they contributed toward purchase price in both these cases there is a mismatch between who paid the money for the purchase price and who holds legal title or the proportion of that. GRATACIOUS TRANSFER (not in course) 3. A full or partial transfer to someone who is a volunteer.
Some people think these premsumptions have no place in todays law, read Murphy J in Calvain v Green: lay people would be astounded it exits
Example 1: A has full legal title but only paid half if the PP. equity will presume that B has a 50% therefore A holds the full title in trust for himself AND B in equal proportions. A is a trustee. Example 2: legally joint owners notionally sharing a third of legal title. Equity will presume they intend to hold in the proportions that they contributed to PP. RT arises to that affect. (can say they are all trustees dont have to say which for who) Example 3: B is a volunteer received the land gratuitously therefore equity will presume that B is holding the legal title on trust for A. A is presumed to have intended to retain legal title because there is no money involved. REBUTTING PRESUMPTIONS OF RESULTING TRUSTS (2 ways) Evidence Of Contrary Intent (to that of the PoRT). - Produce evidence that the transferor actually intended to pass equitable title o either make a gift of the title, o make gift of money to purchase title or o Loaning money nothing to do with title
Must be ACTUAL intent o not implied (no reasonable person test). o Have to be expressed in word or conduct that infers that intent. MUST BE IN REFERENCE TO THE INENTION AT THE TIME OF THE PURCHASE OR TRANSFER. The onus is on the party trying to rebut the PoRT , the gift receiver
Presumption of Advancement - Refutes RT - Need circumstances shown where equity will presume that a gift to advance the receivers interests. - There are recognized circumstances. (Re Deane J in Calvern v Green) works on the basis of categories. (usually where rship of support) *husband to wife (gender biased) - law presumes the intent of a husband is to advance a wifes interest - not vice versa and not defactos (CvG judgment by mason and dean JJ), - Inclusive of female financs as well, has been a case. - Love and affection NOT relevant - Not recognized between de factos (Cummins) o Brennan & Mason JJ Not marrying suggest want to maintain control of individual assets, therefore to reflect not recog de factos. o J Gibbs prepared to recognize *parent to child (changed from father to child since Calverly v Green) - Not from child to parent REBUT Evidence Of Contrary Intent (To PoA) o Evidence you dont intend to make gift
he is paying off the mortgage repayments plus 9k for PP from his previous house. Both jointly liable for the mortgage ( notional $9000)
HC Held:
Murphy J took the stance that the resulting trust was outdated and should be scrapped. Mason and Brennen JJ (majority Dean J agreed) PoRT because both held an equal legal title but contributed unequally contributions to PP. Mortgage repayments not count towards PP liability under loan counts as contribution towards PP by that amount Also stated that the presumption was not rebutted by presumption of ADV because they werent married, furthermore no evidence contrary to the intent of a RT, that is no evidence C intended to gift. PoRT no evidence of contrary intent: his contributing more not evidence of gift No PoA: not extend to defactos. not marrying allows indepence of assets Calc of contributions to the purchase price: o o o Mr C contributed $9000 to PP Both are contributing their liability under the mortgage, each contribute a further $9000. Therefore out of total contributions she is providing only one third
The majority hinted that contributions after purchase may lead to constructive trust. Gibbs CJ part of minority but better reasoning for problems: He describes the 3 circumstance giving rise to RT presumptions. BUT he says that money has to be provided by the purchaser in his character as such not as a loan or repayment of something. Whoever liable for loan is the real contributor. PoA o applies to not father but in position of locos parentes eg guardian. o Confirms authorities denied PoA when the wife makes the purchase for husband. o PoA will not work in cases of siblings (sisters), nephews or grandchildren. o We dont want these categories to freeze in time. He was prepared to accept defacto relationships. PoA exists is it rebutted? Look at intent AT THE TIME IT WAS PURCHASED. Found PoA rebutted o on evidence that G had no intent to confer beneficial interest to C. C made no suggestion on putting it on both names until the bank gave him a hard time giving him a loan in his own name Therefore the RT holds just like majority Legal title 50-50 notionally, in equity Mrs G 1/3 and Mr C2/3
Facts:
Barrister who didnt pay tax for 45 years at the bar and owed million dollars to ATO.
He had assets amounting to $250,000 He and separated wife had purchased the matrimonial home in 1970 registered as joint tenants. Ms C had paid a contribution of 76% towards the purchase price 1987 Mr C transfers his legal title (gratuitously) to Ms C so she hold 100% of the legal title 2000 declares bankruptcy &his property devolves automatically to the appointed trustee in bankruptcy The trustee in bankruptcy challenges the transactions in 1987 to get proceeds
HC Held: Sackville J
Any presumption of RT that may have arisen was rebutted that their actual contrary intent was to take the house as JT at law and Equity. (evidence of contrary intent) Her share is untouchable by creditors
Constructive Trusts
Imposed by operation of law to prevent legal title holder from acting unconscionably. splits equitable and legal title.
Two circumstances 2 TYPES well be looking at: 1) Common intention CT 2) Boomgartner CT / Joint venture CT / remedial CT. All containing a component of unconscionability. (also where specifically enforceable contract for sale or imperfect gifts )
Common Intention CT
Elements of Common Intention CT 3 components 1. Actual Common Intent (CI) Intention= must be that the claimant had/would had an equitable interest in land Actual = must be expressed or inferred (cant be imputed (assigned)). o From: Real actual words or inference from actual words of conduct o Cant use reasonable person test (imputed) Timing = expressed before or after the property purchase if they develop the ci way after the purchase. 2. Detrimental Relience on CI Claimant has changed his position somehow on the basis of relying on the common intent. 3. Unconscionability IN THE CIRCUMSTANCES FOR THE LEGAL TITLE HOLDER TO DENY AN EQUITABLE INTEREST ON THE PART OF THE CLAIMENT. GENERALLY WHERE elements 1 AND 2 ARE SATISFIED THE CIRCUMSTANCES HAVE TO MADE IT UNCONSIONABLE FOR THAT DENIAL TO TAKE PLACE. However there are special circumstances which make it more like to be unconscionable or unlikely. IF ALL SATISFIED CLAMIENT WILL HAVE AN EQUITABLE INTEREST.
CICT - The court RECOGNISES a CT to protect somebody who has relied . The court is considering giving up a career, becoming a homemaker/housekeeper, raising children becomes more and more a detrimental reliance. (Donas and Donas) argument you would have done those things anyway out of love and affection.
between the two of them was to pass to the woman if she married him or if he died. The relationship broke down before either of those things happened.
Held:
She couldnt establish equitable interest because the common intent/understanding between them was not fulfilled for her to have the equitable interest.
Facts:
A unit in torquey. He bought house she planted tree painted balcony and purchased household items when living with him for 7 years till he died.
Held:
This women fell well short of the necessary determinant required for a common intention constructive trust. As she benefited from free accommodation and she didnt really pay for anything substantial this was not considered determinant of the type we are talking about. A disappointed expectation is not enough to amount to detrimental reliance.
Facts: 1939 Annie Ryan moves into cottage with her mother behind the local cinema and was employed there as the cinema cleaner which was run by a happily married Mr O. 2 decades later after the passing of Mrs O, Mr O moved into the cottage as a boarder with Annie and her mum. In 1962 Annies mum dies and (7 years following) the cinema and cottages will be sold to a small company GJ Coles who want to knock it down to make a supermarket. So Mr O suggests he buys a house for the two of them IF she took care of him for the rest of his life and after he died the house would be hers for the rest of her life. This all eventuated for the two years leading up to his death. Nothing in his will for her.
Held:
No RT she hasnt contributed to PP J Holland: the defendant had relied upon a CT and the deceased and his executive after his death became bound in equity to hold the legal title to the subject property on trust for R and are bound to permit the R to occupy the property rent free during her life for as long as she desired. Elements of CICT 1. Common intent Intent = life estate This case involves an EXPRESSED not inferred arrangement. Mr O clearly proposed the arrangement. Its an expressed common intention in the form of an (mutual) agreement between them before the purchase. The property was even purchased to give effect to that intent. COMMON INTENTION RT CAN EXIST REGARDLESS OF WHEN THE COMMON INTENTION IS FORMED, BEFORE OR AFTER PURCHASE. (obiter) 2. It is found that the claimant acted to her detriment in relying on this CI. She satisfactorily argued that she was induced by this agreement not to find her own home and find herself a permanent job because she instead had to act as a house keeper etc. 3. It would be unconscionable for the legal title holder to deny Rs equitable interest. Having himself created that understanding and having allowed detrimental reliance upon in it would be unconscionable for O to deny its effect. Executer stands in shoes of deceased You have to state what type of equitable interest has been established. Can only get the equitable interest intended In this case she didnt receive a fee simple but a life estate.
Wives argued even though they were imputed the trustee couldnt get 100% of proceeds because each wife held a 50% equitable fee simple interest already before the transfers took place by CI.
Timing: when does CT arise Three views 1. CT arises automatically when elements satisfied independent of court order (court gives effect only) Parson v Mc Bain for CI (for JV not clear) 2. A remedy that the court grants and doesnt exist until court declares it (can deem it to come into operation of judgement or retrospectively) 3. Even if criteria satisfied court chooses another remedy(Boumelhelm case) Justice Dean mushinski - There does not need to have been order before equity can recognise the prior existence of a CT, judges have a lot of flexibility to adjust the existence of the trust (not independent of court order) where competing equitable and common law claims are involved a declaration of CT by way of remedy can properly be so framed so that the consequences of its imposition are opperativeas of date of judgement or formal court order or some other specified date. A bet each way, want flexibility where third parties are involved.
Joint Venture or Baumgartner Constructive Trust (AKA Remedial CT or Unconscionable Retention of Benefit CT)
Different creature: - (Remedial v institutional) from the other CI because it is imposed (Cf merely recognised by the court when it arises due to certain circumstances, merely gives effect to the pre-existing intention
which is why it can be known as institutional CT because it arises from its own esteem) by the court as a remedy. - CI outcome is get what was intended, JV based on contributions to JV
Elements of Baumgartner CT: 1. Joint venture requires some endeavor or relationship of some kind setting out together to do something. 2. Pooling of resources or contributionspayments to the purchase price, later payments to improve the land,mortgage repayments, household expenses are all relevant. Non financial resources, child rearing, house keeping and labour 3. JV ends without blame If analyzing a situation where the JV hasnt ended yet assume that they will. (doesnt refer to affairs need to see cases.) 4. UnconscionabilityIt would be unconscionable to retain the benefit in all the circumstances. ( this CT is imposed regardless of what the parties indented at the start if you can make up the elements.)
Made observation that the relationship was not always placid, no CT but a conditional gift with a condition he failed to fulfill. therefore a personal action (not proprietary) lay against Dodds, should not effect his equitable title. No unconscionability, retention of benefit must be inconsistent with original agreement or purpose. Although parties ceased to persue common purpose at the start the unfairness doesnt amount to unconsciounable. (dig at Mason& Dean) the flexible remedy of the CT is not so formless as to place proprietary rights in the discretionary disposition of a court acting according to vague notions of what is fair. Cant give proprietary rights to vague notions of justice not up to courts discretion to merely label something unfair and call it a CT. Dean and Mason JJ A JV CT existed. **Dean J: Failed JV analysis M entitled to a payment as an equitable contribution on the basis of joint and several liability as debtors. He owes her a debt for the amount he promised to pay and didnt. Where both parties contributed to a JV and it fails without attributable blame to either parties and where the contributions to the JV were made in such circ that it wasnt intended the other party should enjoy then each party should have their contributions made to them. (Not gift to other party but for purpose of the JV) To allow one party to retain the benefit it would be unconscionable. o Parties must first pay off joint debts incurred o Then each party get out respective contributions o Residue is to be divided in equal shares Suggests that perhaps retention is be inconsistent with original agreement or purpose. Not only for commercial scenarios but extends to domestic ones (here both) Cant change legal title just on fairness There was a removal of the assumed basis of the arrangement between them when the joint project was abandoned. Analogis to a commercial venture. Requirement you return capital after debts have been paid. Preclude him from asserting or attaining his half ownership to the extent of where it would be unconscionable to do so. The fact that CT predominantly remedial (cf institutional= rship governed by law) o Remedial = weopon it can impose /discretionary? Mason J Inequitable for him to retain the interest without crediting to M for the contributions she made.
Gibbs CJ equitable charge, no trust, but willing to go with Deans to uphold the CT. Cant have CT just because its not fair. M is entiteled to an equitable contributions, shes entitled to sue for a debt in equity as secured by an equitable charge over the property. But was prepared to go with Dean J. - RT rebuted by evidence of contrary intent She intended he have a half share at the time of the purchase held because he was expected to pay for improvements (conditional gift) - CICT because usually someone who doesnt appear on the legal title trying to claim equitable interest here its the vice versa. Any proceeds would firstly go toward paying any debt, then too various recognized contributions and any surplus to be split 50-50%
Facts:
Office romance, Leo who has had two prior marriages and Frances who was already married with two children. F moves in with L and defactos for 6 years. They had a child. A year after they began living together Leo purchases land, paid from own funds plus a mortgage, legal title under his name alone and he took out a loan to build the house. F objected several times that her name was not on title, L essentially responded that they werent married and the loan was under his name. his says im doing this for all of us; the harder I work the sooner Ill have it paid off and the better we will be in the future. L told firend that the lender wouldnt allow it because no marriage, theres no need to have both names on the paper because F knows its both our house once its built. L says Home was hers if they get married. She would gave him her pay packet every week which to use for household expenses and mortgage repayments. (lower court considered as pooling of resources) She changed her name to his surname by deed poll. The relationship ended she took furniture with her. She sought a declaration from the court to say that she owned part the title in equity.
HC Held:
The HC stated you cannot impute a common intent from a reasonable person type of scenario what someone in Leos shoes would have thought the conversation meant.
Its unconscionable to retain the benefits after the substratum of a joint venture collapses, thus the proportion of contributions should be restored to the parties that made them. Mason willson & deans jj: Just because no CI to pass beneficial interest not essential. Using trust to circumvent unconscionable conduct. Unconscionable where parties pooled their resources for the purposes of their joint relationship and one of the purposes of that rlship was to secure accommodation. Once that fails unconscionable for one party to walk away with the contributions. Elements of Baumgartner CT: Imposed regardless of the parties intent 1. Joint venture Long term stable relationship as a family. No commercial element like in Mishinski v Dodes completely domestic type relationship. Building house together as defacto couple. 2. Pooling of resources or contributions earnings and his proceeds of sale of previous land being pooled together of resources for joint venture purposes, that is with a view to cover the expenses of living together as a family. The fact that the earnings werent split between them was noted. Land was purchased and house was built for the benefit of and for the purpose of furthering their relationship. Labour/child rearing Dean J left open Payments to improve the land after purchase, mortgage repayments etc Related to the acquisition to the property (direct or indirectly)
3. JV ends without blame Relationship breakdown= everyone has clean hands as far as the law is concerned. Reprehensible behavior. 4. Unconscionability Mentioned the comments on the phone were uncon. Assertion that it was his sole property to the exclusion of any interest at all of the respondent. Amounts to unconscionable which attracts the intervention of equity and the imposition of a constructive trust. Start with 50-50 then take contributions to overall relationship and determine distribution ADJUSTMENTS TO COMPENSATION TO BE TAKEN INTO ACCOUNT:
Surplus 45- 55 split imposed as opposed to 50-50 in machinski. Special allowance made for francis that she took three months off to have her child and the earnings she forwent during those three months adding it to her ledger. Court made allowences for him for the furniture she took and he kept making mortgage repayments after the relationship ended and got credit for that. This was slightly nullified by the fact that he had free accommodation there after the end of the relationship where as she had to find another place. Proceeds from the previous home also added to the ledger on his side.
Total $ 400,000 payments by parents which went somewhat to purchase of Dundas and somewhat to the development of the building. Son had full legal title Son went bankrupt Mortgagee secure loan over property Dundas property for security of his business debts\ John legal title, charges by creditors and parents contributors
NSW SC? Held: Legal doesnt reflect contributions of PP. for 19% by parents on PoRT, Presumption of Advancement but rebutted. JUSTICE WARD PARAGRAPHS IN READING GUIDE ALL TRUSTS COVERED IN THIS CASE**** Joint Venture Constructive Trusts - Judge reiterates Dean J in Mshinskis. WAS THERE A JOINT VENTURE? Did they make acquisitions and contributions together to the dunda property. D argued it was a loan only by pointing out past loans and the mothers affidavit agreement to loan to her son. As well as a deed of charged which apparently evidenced loans to the sons business not for aquasition. Held: this did not evidence that the parents would loan such a huge amount which required an increase on the family home mortgage three times despite being pensioners. Inconceivable that they would do that unless they expected an interest in that land. Therefore he excepted the evidence the father gave of the conversation saying they would gain ownership of one of the duplexes and the affidavit for a loan was attributed to nothing more than the mothers poor English. JV = on the balance of probabilities. Words not require to show the nature or the precise nature/extent/size of the equitable interest intended (even for a COMMON INTENTION CT). POOLING Judge didnt think the half- half ratio according to the agreement with father was artificial and more applicable to the earlier loans. HOW MUCH CONTRIBUTED? FAILURE OF JOINT VENTURE WITHOUT ATTRIBUTABLE BLAME Creditors argued venture didnt really fail because he voluntarily declared bankruptcy therefore can attribute blame. Justice ward -
in domestic relationships the court doesnt look at whos to caused the end of a relationship its off limits. The element actually means that it doesnt end due to some wrongful conduct of the party that seeks the imposition of the constructive trust. If it is wrongful for the party asking leading to the end of the JV may affect the final element, the third element is RELATED TO unconscionability. Issue of bankruptcy Bankruptcy ended JV, no longer possible to get credit for supplies anymore once bankruptcies been declared.
UNCONSCIONABILITY TEST: Change in circumstances has to be so outside the contemplation/intention of the parties at time of entering jv, it may not be unconscionable to retain benefits. In bankruptcy cases - Trustee in bankruptcy stands in place of the sons and he is denying the parents there rights, therefore that would be unconscionable. EXISTS BUT BEFORE AWARDING CONSIDER IF APPROPRIATE REMEDY Issue Should the court exercise discretion in imposing a CT even if elements exist Justice ward (due to batherst v city council; HC says you must always consider a lesser remedy as a possibility first, eg equitable charge, damages other than CT. to prevent claimant from gaining an unfair priority over other equally deserving creditors. Consider third parties legitimate claims. Timing was then explored Parsons v McBains trusts exists from the time all elements are made out. However Mshinski trust only operates from the date the court gave orders (different types of CT) o J ward noted that J dean was hesitant in awarding that order less the legitimate claims of third parties be adversely affected and ordered that CT only be awarded from date of judgement. So you can figure out which trusts applies then the timing of the interest. o Its not clear whether the existence of a potential third party creditor interest would cause a CT to not arise at all or impose it but from the date of the order and if the creditors interest arose earlier they get priority. o CT withdraws assets from the general body of creditors which isnt fair to them. o 2 cases mentioned that take priority of the creditors into account o No guidance on what unfair priority means when you have equally deserving third parties. o Certain factors might be contra to the imposition of a CT or give a lesser remedy Are there any matters which call upon the protection of creditors as opposed to the prospective beneficiary of a CT. The creditors physical materials that had been used on the land.
No evidence of title searches by creditors The lack of clarity of exactly how much the contribution was. As a result J ward decided for the parents contributions in excess of the 19% to purchase price there would be a recognised an equitable lien of the dandas property which arises at the time you made the contribution and it would be effected by the various equitable charges by the creditors which would rank according to the dates of each of the contributions. (in this case was not made in one lump sum) instead of a JV CT. MAJOR DIFFERENCE IN GETTING A LIEN AS OPPOSED TO A CT IS THAT IF THE PROPERTY BOOMED IN PRICE OVER TIME WITH A CT YOU WOULD RECEIVE YOUR PERCENTAGE OF THE WHOLE THING MEANS YOU GET MORE THAN JUST WHAT YOU CONTRIBUTED. Lien arising at time of each contrabution
Resulting Trust
Proprietary Estoppel
Three Types of Estoppels Common Law Estoppel o o o representations regarding EXISTING facts not intentions or representations for the future used as a shield not as a sword (defence and basis of a claim)
o o
Sword or shield (defence and basis of a claim) Sword: need a rep that induced an assumption and reasonable reliance on the assumption and unconscionable to depart from Famous case made this waltons which established he elements Types include: Promissory estopple Any legal interest Only recently used as a sword Proprietary estopple (FOCUS) Representations involving land Always used as a sword REQUIREMENTS: Need a land owner who1. Encourages Induced/creates or encourages an expectations in another that they will have or acquire a proprietary interest. 2. Reasonable reliance to detriment /changed their position on basis of the expection 3. Unconscionable to resile
Facts:
In 1931, father owns land, tells Jack Baker that he can build a bungalow on his land and he can stay indefinately. The will not altered to reflect the fathers new promise to his defacto wife, Mrs Inwards . Defacto wife children fall out and he is asked to vacate the land and rent backpay It being a personal relationship, there is no contract and no formalities have been complied with. There is no part performance (because Jacks conduct is not unequivocally referable to The existence of the agreement)
Held ENCOURAGEMENT/ALLOWANCE OF EXPECTATIONS/ASSUMPTION Father allowed directed him to think that if he expended his money in building the bungalo on the land he would be able to stay there for all his life Allowing him to think the expectation REASONABLE RELIANCE TO DETRIMENT (change of position basis of expectation)
Jack had spent time, money and labour on the land, hiring people to help him construct the house
UNCONSCIONABILITY Inequitable to allow this expectation to be defeated. Successor stand in place of father, unconscionable for father to deny also unconscionable for them
As all elements are satisfied there is an (mere) equity (a propriety right) in Jack and the court has to work out how best to satisfy that equity in this case an irrevocable interest for right. 3 prop interest Legal Equtable Mere equities (can be non prop also) TYPES OF EQUITIES: Weaker then equitable interest and therefore different priority rules apply. o o If a third party comes along before you get to court to establish your interest you might miss out Even if established your interest in court how that equity is satisfied its at the courts discretion whether they make the promise good and giving your full interest or equitable compensation.
Equity of redemption = strongest proprietary interest = right to redeem a mortgage after youve paid it off and right to have it transferred back to you. Equity of rectifications = right to have a contract corrected propriety when regarding leases because it attaches to the leasehold interest. Equity to set aside a fraudulent transactions = arguments whether personal right or proprietary. Remedies are discretionary: Expectation relief Expectation damages Reliance damages The minimum relief that makes things just
In proprietary estopple the equity that founded the relief obtained was founded in an assumption as to the future acquisition of ownership of property
Assumptions induced by representations upon which there has been in fact been detrimental reliance by the plaintiff. Three representations in the form of a promise by the parents on which Robert reasonably relied to his detriment (14years of labour, giving up his job, financing and divorcing his wife). And it would be unconscionable for his parents to now resile. This gives him an equity which the court has to decide what the relief will be (not necessarily an interest in the property). In this case on prima facie appropriate relief to make good the promise CT over equitable fee simple in that promised land . However for estopple remedy is discretionary and the court decided that before a constructive trust is imposed to protect a full equitable fee simple the court should consider having regard to the issues to the litigation there is an appropriate equitable remedy that falls short of the imposition of a trust. Here two readons not to give him a CT 1. There had been other proceedings regarding the partnership 2. The brother was not blame worthy not responsible for the parents wrong doing, pursuant to his own interest in the land therefore because of an innocent third party being effected by a CT. they declined to recognise an equitable interest but gave robert the next best thing. Expectation damages whats the value of the land you were promised and will impose equitable charge to secure expectation damages.
VSCA Held Nettle J the minimum relief is not applicable to proprietary estopple cases but to promissory estopple. Therefore as in Giumelli prima facie for proprietary estopple appropriate remedy is fulfilment of whatever has been represented to be your interest in the promise. Because equitable proprietary interest has been recognised the court needs to impose remedial trust. The detrimental reliance that supports an equitable estopple need not constitute consideration; doesnt have to be expenditure of money of financial disadvantage.
Neither does the deteriment need to correspond to the value of the interest of the expected land. Prima facie to make the promise good of a proprietary estopple gives way to the following ind circumstances: o expectation is uncertain (ABS v Baumhel = misunderstood what had gone on and the size of the claim was uncertain about the actual dollar figure.) o Innocent third parties may suffer. (gimeli) o Where equity might be satisfied in different or a more limited way o Expectation is all out of proportion of detriment suffered o Shouldnt go beyond preventing unconscionable way o Consider if equity satisfied in more limited way Prima facie Susie entitled to a quarter of the proceeds. Huge rise in the value of the property therefore parents argued calc as at the time of the divorce but plus interest, a value between this and the current value was determined! New value disproportionate to her detriment and given he suffering caused the parents. And it was a gratuitous promise. Dismissed relevance of length of the marriage rates of divorce are high and yet made no conditions attached, to disproportion. Determinet suffered is a kind that involves life changing discisions with irreversible consequences with a profoundly personal nature. Substantial deteriment but not necessarily financial in nature She had a child much earlier than she normally would have therefore affected her career The fact if shed moved to city as she desired she would have obtained capital gains on that property. The equity raised by parents could only be satisfied by substantial fulfilment of the assumption on which the respondents actions were based. Agreed to give her 600 000 $ (between 400 000 1mil between divorce and sale) Different to Gemeli because there was no innocent third parties involved she could have gotten CT on property had the land not been sold.
ABS V BOUMHEL Alternative claim of prop estopple by encouragement argued the minimum equity to protect the parents was the imposition of a CT relying on Gemali similar to common intention constructive trust something of a covergance between them.
parents intent of acquiring one of duplex after sub division take place. This had also been an encouragement and making an representation in the mind of the parents by son. Common intention CT interest should not pass to parents until such time as the duplex was finished and the sub div had occurred = this is rejected because the parents made the expenditure in the expectation of the interest they would receive which makes out a proprietary estopple action or if thats any different they have made out the CICT action prima facie rolling them into one. But court declined a CT because of innocent third parties involvement either under CICT or PE.
Criticism RT are outdated but here to stay Where as common intention trust might be diminishing. But it has some use still in fraud cases where the only way to get around the fraud is to prove common intention.