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Durham Law Review Volume VI Part 1 February 2021 [2021] D.L.R 1 Durham Law Review [2021] BUILDING A NEW FOUNDATION FOR TRUSTS OF THE FAMILY HOME: THE CASE FOR UNJUST ENRICHMENT. Zachary Salmon 2 Durham Law Review [2021] Table of Contents INTRODUCTION ................................................................................................................... 4 CHAPTER 1 .............................................................................................................................. 7 Evaluating the Current Approaches and Critiquing the Proposed Solutions .......................................7 Introduction ....................................................................................................................................................7 The Resulting Trust ........................................................................................................................................7 The Common Intention Constructive Trust ...................................................................................................9 Contemporary Solutions in Trust of the Family Home Disputes.................................................................. 14 Conclusion .................................................................................................................................................... 18 CHAPTER 2 ............................................................................................................................ 19 Contrasting the Approaches to Unjust Enrichment in England and Canada ..................................... 19 Introduction .................................................................................................................................................. 19 Unjust Enrichment in England and Wales – Enrichment ............................................................................. 19 Unjust Enrichment in Canada – Enrichment ................................................................................................ 22 The Canadian ‘Joint Family Venture’ approach ............................................................................................ 23 Unjust factor v Absence of basis / Absence of juristic reason ........................................................................ 25 Conclusion .................................................................................................................................................... 28 CHAPTER 3 ............................................................................................................................ 29 Unveiling the Proposed Approach ..................................................................................................... 29 Introduction .................................................................................................................................................. 29 Coverage of the New Approach .................................................................................................................... 29 Joint Title Disputes ....................................................................................................................................... 30 Sole Title Disputes ........................................................................................................................................ 33 a) Enrichment .......................................................................................................................................... 33 b) At the Claimant’s Expense ................................................................................................................... 35 c) Absence of Juristic Reason .................................................................................................................. 36 d) Quantifying the Interest ....................................................................................................................... 37 e) The Remedial Constructive Trust ....................................................................................................... 38 Conclusion .................................................................................................................................................... 40 CONCLUSIONS ..................................................................................................................... 41 BIBLIOGRAPHY ................................................................................................................... 43 3 Durham Law Review [2021] Acknowledgements I would like to thank my supervisor, Chris Bevan, and my tutor, Andy Hayward, for their continuous support and invaluable insights. 4 Durham Law Review [2021] INTRODUCTION he family home is unique. It is often the owner’s most valuable asset, and it is the subject of strenuous debate upon relationship breakdown.1 Despite its importance, T the law has not yet provided a convincing and coherent basis for ascertaining who has an interest in the family home, and how such an interest should be quantified. This has left the area of trusts of the family home, ‘complicated and difficult to apply’.2 The conflicting doctrines in this area, (the Resulting Trust (RT) and the Common Intention Constructive Trust (CICT)) prioritise different criteria (monetary contributions, and common intention, respectively), and have been argued to apply to different contexts (domestic or commercial). This has left the law ‘unduly complex, arbitrary and uncertain’ for cohabitants, who wish to acquire or have their beneficial interest in the property quantified.3 As Sir Terence Etherton lamented, what is ‘sorely needed’ is a ‘coherent legal framework across the boundaries of trusts, estoppel and restitution’.4 This dissertation will propound such a coherent framework, as it will be based upon consistent and easily applicable policies, and will reject a case-by-case analysis based upon specific facts and doing justice, which ‘has not worked well so far’.5 In Chapter 1, this dissertation will critique how a beneficial interest in the family home can be acquired and quantified under the current law. This will demonstrate why a new approach is needed, and which issues require resolution. Then, some of the contemporary solutions to these issues will be analysed to demonstrate their lack of suitability. Two contemporary solutions shall be investigated for this purpose: enhanced familialisation, and Gardner’s ‘materially communal’ approach. 1 Law Commission, Sharing Homes (Law Com No 278, 2002), 1.8 2 Ibid, vii 3 Ibid, 1.1 4 Terence Etherton, ‘Constructive Trusts and Proprietary Estoppel: The Search for Clarity and Principle’ [2009] 73 Conv. 104 5 Ibid 5 Durham Law Review [2021] Once the flaws have been exposed in the current law, and in the proposed solutions, the discussion will turn to the English and Canadian approaches to Unjust Enrichment (UE). Chapter 2 will provide a basis from which this dissertation’s proposed approach will develop, and it will identify and evaluate the benefits of, and the main differences between, the Canadian and English approaches. Building on the critique and discussion of the previous chapters, Chapter 3 will propose a new approach for acquiring and quantifying a beneficial interest in the family home. Chapter 3 will demonstrate why this proposed approach is not only applicable in trusts of the family home cases, but also why it is better than the current law, or the proposed solutions, conceived thus far. Before an examination of the current law is undertaken, this dissertation’s proposed approach will briefly be outlined. First, a distinction will be made between joint title and sole title disputes. In a joint title dispute, as both parties have an equal legal interest in the property it is argued that both parties should have an equal beneficial interest,6 as putting a property into joint names is argued to be ‘a strong indication of emotional and economic commitment to a joint enterprise’.7 However, if the parties expressly declare their respective beneficial interests, then those shares should be conclusive. In contrast, a flexible approach will be taken in sole title disputes. An interest in such cases will be acquired and quantified not through intention, but through a modified and mixed version of English and Canadian UE. This approach will view all contributions towards the property as incontrovertibly enriching, and therefore incapable of being subjectively devalued. If any enrichment from these contributions is found to be at the claimant’s expense, then the claimant will be able to recover the total enrichment, rather than merely their loss suffered. 6 Terence Etherton, ‘Constructive Trusts: A New Model for Equity and Unjust Enrichment' [2009] CLJ 265, 282 7 Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776, [19] 6 Durham Law Review [2021] Finally, for the enrichment to be unjust, it is proposed that an ‘absence of juristic reason’ approach should be accepted into English law. This would raise a presumption that any contribution is unjust, unless it is explicable on the grounds of gift, contract, etc. If these three stages are satisfied, then the interest of the non-titled party will be quantified through a ‘value- surviving’ analysis of the effect of their contributions on the parties’ respective financial positions. Once quantified, such an interest will be converted into a proportionate share of the property, held on a remedial constructive trust. Due to the constraints of
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