Trust and Trustees (Unmarried Partners and Property Ownership)

How Edward Could Claim the Extra £250,000

Introduction

It is a common phenomenon to find couples living together living together for an indefinite period of time before they can marry. Some of these couples will end up not marrying even after the long time they have spent living together. However, our main concern is about property ownership and division when these couples separate or fail to marry. It should be understood that despite the time duration taken by these couples while leaving together, the law still treats every individual as a separate individuals when matters of property arises (News, 2013). This therefore means that these people lack guaranteed rights and responsibilities when their relationship comes to an end. It is therefore advisable that people be extra keen when buying property either jointly or on their own while in relationships to avoid problems when it comes to claiming and sharing such properties incase their relationship ends.

The following is an outline on what Edward (a client having problems on sharing of property after they broke up his spouse) could do while observing some set rules and regulations while making a claim on proceedings of property sold by his spouse. Edward’s case is that type where both spouses contributed towards acquisition of the property but only one of them is the owner. The situation further gets complicated when Lucy marries another person and they proceed to purchase some property which they jointly register it in their names. At the same time, Lucy is experiencing some financial problems which she informs Edward when he claims for more cash from the proceeds.

Edward has the right to claim a share in the proceeds obtained from selling the house despite the fact that he is not a joint owner of the property. This is following the fact that Edward contributed in one away or the other during the bringing up of that house. We learn that him being a self-employed builder he had to sacrifice his time from the beginning of 2012 to the end of 2013 while constructing the house. He additionally pent £200,000 of his savings for all costs incurred during the construction period. After this he continues contributing equally to all household expenses.

The general rule on property division demands that property in ownership of one spouse, in a cohabiting relationship, is not subject to division with the other spouse incase the two part ways. This is basing on the fact that cohabiting couples are treated as separate individuals. The individual whose name this property was registered retains full ownership of the property. However, an allowance s provided when the other partner may have contributed financially like paying for mortgages, renovations or took part in its purchase. In this case any formal or informal agreements between these two partners on how the property was to be shared are used. If, in any case, these agreements show that the property was intended to be owned jointly, then it is the mandate of these spouses to make arrangements on how they will share their property. The other partner could be forced to pay the amount the other partner contributed towards the purchase or maintenance of the property. For Edwards’s case, Lucy observes these by paying him back his £200,000 plus an additional £50,000 for as compensation for resources lost during the construction period. This does not go well with Edward who feels that he should have received half of all the cash obtained from selling the property, something I agree on basing on some reasons (Unmarried Couples Rights, 2016).

The law of equity is one way of claiming fairness in division of property pertaining unmarried spouses when they terminate their relationship. Through the law of equity, a spouse is offered various special exceptions to rules concerning property sharing cohabiting couples with one spouse in ownership of the property. All these exceptions are derived from unjust enrichment which is a claim filed by one of the spouses claiming unfair division of property after their break up. It is through this unjust enrichment that the other spouse could demand for additional compensation or equal sharing of property previously owned by the other spouse. However, there are several things to be observed before claiming an unjust enrichment against another spouse (Neyers, McInnes, & Pitel, 2004).

There are various things to be observed when claiming an unjust enrichment against your spouse. For one to make a successful unjust enrichment claim against the other spouse, they should be able to show three of the following to a court of law. One, the spouse should show a gain obtained by the other spouse from the property or proceeds of the property. Secondly, he or she should also be able to show a loss or losses incurred by him or her on the property. They should also be able to show that both clients contributed in one way or the other towards the property. And lastly they should be in a position to justify that there is no legal reason for the other spouse to enjoy gains from the property or losses pertaining to the property. After ensuring that the other spouse’s circumstances meet the above mentioned condition, he or she can then comfortably claim an unjust enrichment against their spouse (Bits of Law, 2015).

Proving unjust enrichment claim against could at times be difficulty when there is proven agreement or universal partnership between the partners concerning ownership of the property. Like in the case of Edward, Lucy and Edward had not entered into entered into any form of agreement concerning property division and ownership. During registration of their house, Lucy comfortably registers it in her name with no restrictions. However, Edward is still entitled to claim the extra £250,000 from proceeds obtained after Lucy sold the house. This could be achieved basing on the following reasons (Neyers et al., 2004).

To start with, Lucy and Edward are like married couples given the fact that they had stayed together for more than two years. This is evidenced by the fact that they had been staying earlier own together before they developed the idea about getting a home, which then took two years. Therefore, basing on Family Law Act of British common law, these two individuals were like married couples and share legal rights just like other married couples. Among these rights include; the right to 50% share of property, debts, and even inheritance of a spouse’s property. It should however be understood that property acquired before they started having a relationship are not subject to this unless the other spouse contributed in ways of skill, finances or any other way (News, 2013).

Basing on the provisions of the family law act, Edward is entitled to a fifty percent share of proceeds of sale of their property. It is therefore a rightful thing for him to demand an extra £250,000 in addition to the earlier amount. The property in question was also obtained when the two were in a relationship. This is in full support of Edward’s claim on the fifty percent share in the house despite the fact that it was registered in the name of Lucy. Furthermore both the two individuals contributed in equal amounts towards the house. Lucy was responsible for purchasing land on which the house was house was set up while Edward was responsible for its construction, each spent £200,000.

The common law also offers Edward the chance to claim damages suffered after the sale of the house. For instance, Edward used his savings in the construction of the house. He also quit his job for two good years, which was an agreement between the two, in order to foresee the building of their house. However, when it comes to selling this property, Lucy fails to consult him, goes on to sell the building and does the unimaginable by giving Edward a quarter of the proceeds from the sale of the building. Compensation of £50, 000 is not sufficient for compensations for time lost and profit during the two years Edward did not report to work (Papworth, 2013).

A court of law could make various orders depending on claims of spouses presented before them. Taking Edward’s case as an example, the court could order compensation of losses accrued during the time of construction resulting from the sale of property. This would mean that Edward might get the extra £250,000 he is demanding for depending on agreements or conditions the two had. The court could also do the unimaginable by demanding that Lucy builds Edward a new and similar house on land similar to that on which the two had constructed their building. This however, would be the hardest to be achieved given the fact that Lucy is currently experiencing financial constraints.

Injunctions could another option offered by the court of law. However, Edward will have to meet several requirements before injunctions to stop operations pertaining to the sale of the house. With these injunctions, Lucy would be barred from completing or engaging in activities related to the sale of the house, finalizing buying of her new house, and even clearing her debts using proceeds from the sale of the house. For Edward to succeed in obtaining an injunction against Lucy, he should be able to justify to the court that his claim is a serious question to be tried. More so he should prove that compensation offered by his spouse is not adequate to cover all the losses suffered (Anderson, 2013). He should therefore insist and with evidence that during the two years he was out of work he lost a lot of money that is not close to the £50,000 offered by Lucy as his compensation.

There are several types of injunctions that could be considered by a court of law during the hearing of Edward’s case. One such injunction would be search orders, which basically is an interim but mandatory injunction aimed at preserving evidence from destruction by the defendant. This type of an injunction is exercised without notice and could be used to stop any transactions while holding evidence for the case before Edward arrives from China. The other type of injunction that could be applied is the freezing injunction. This is also applied without notice with the main aim being to stop the defendant from getting rid of money or assets before judgment is made (Freezing orders, 2016). For Edward’s case, this could be a boost given the fact that Lucy is married at the moment and could be tempted to transfer the remaining cash to his husbands account in order to deny or claim spending it on all expenses incurred by her businesses.

The law holds that property owned by one spouse is subject to division if it was acquired by spouses who had constructive trust. Constructive trust could include common intentions for benefit from the property, direct contributions to the property, indirect contributions, and conduct developed in the course of their stay. In this scenario Edward is only required to express the constructive interest behind his claim. One way of justifying this would include providing evidence on receipts, invoices and any transactions done during the construction of their house. The other would support offered during the process of buying the piece of land and registration in the name of Lucy. Lastly the claim on constructive trust may be developed on the fact that the two agreed to build a home for themselves and continued contributing on household requirements in equal capacities, a proof for they both shared common intentions for benefit from the property (Unmarried Couples Rights, 2016).

Liability of strangers is crucial when it comes to matters of property ownership and breach of trust. The same could also be used by Edward in his pursue for an additional pay from proceeds obtained on the sale of the house. As we know, Jamie is a stranger in this case and takes part in buying a house with Lucy from funds obtained from the sale of the other house. Through the law, there are two grounds on which strangers could be held liable for their actions with trustees. Such grounds include; involving themselves in deals with property from breach of contract or having an involvement with dishonest assistance in association with a breach of trust. In this case, Jamie could qualify for liability on grounds of his involvement with property breach of trust. (Hudson, 2007).

I this case, Jamie should be held liable for involvement in the purchase of their new home. Bearing in mind that Edward had not been consulted about on the sale of their previous home Jamie still allows Lucy to go ahead and purchase a new home. It makes the matters worse by having this property registered in joint ownership of Jamie and Lucy, something that was not the case during Edward’s time. It therefore means that Edward has been bared out of the new property acquired by Lucy from money obtained from the sale of their previous house. The fact that Jamie has knowledge of the breach of trust between Lucy and Edward qualifies him to be personally liable for the loss of property or trust between the two (Bits of law, 2015). Jamie might therefore take part in refunding Edward basing on this claim.

Jamie is an opportunist who like other opportunists would not allow golden chances to pass them. He quickly seizes the opportunity when it presents itself that Lucy was willing to sell their previous house and buy a new one. He avoids questioning about Edward (the person responsible for building the house) on whether he could claim extra cash when offered the £250,000. What Jamie did was convenience Lucy and has the new house registered in both their names despite the fact that he did not contribute even a coin. Ironically, Edward who contributed equally with Lucy in the older house was never involved in the ownership of the property. Basing on this, Lucy and Jamie owe Edward.

Trustees are endowed with the responsibility of protecting all property entrusted to their care and distributing all benefits obtained from such properties. Trustees are not expected to use the trust property for their sole benefit or any other person who is not a beneficiary. They are also not expected to fail to take action when breach of trust is being committed by another person among other things. A trustee may therefore be held liable in the case where the trustee goes against their expectations, neglect their duties or walk away with the property without consent of the other (Hudson, 2007). The same case applies to Lucy who is left in the ownership of a house when Edward leaves for China.

Lucy should be held liable for breach of trust following her acts of neglecting her duties and going against her expectations. Breach of trust is observed when Lucy sells their house without the consent of Edward and yet they both contributed equally towards the house and have been in a relationship for more than two years. She also goes ahead to use the proceeds obtained for her sole gains. She uses some of the cash obtained for paying losses and expenses of her business (a significant amount of about £225,000 payment to her bank). While referring to the duties of a trustee it is against the law for a trustee to walk away with property without informing the other party or using it for self-gains (Hudson, 2007).

Including Jamie as a co-owner of the newly acquired house is against duties and expectations of a trustee. Any trustee is not expected to use trust property for the benefit of other people who are not beneficiaries to the property. Jamie is a stranger in this case, but he might have convinced Lucy towards the purchase of the new building worse enough registering it in their names. Sixty percent of proceeds from the sale of the house (£600,000) are used in the purchase of the new house. By doing so, Lucy goes against the law on the duties of and expectations of a trustee. She should therefore be held liable for breach of trust between her and Edward and be responsible for losses encountered by Edward (Hudson, 2007).

Any person occupying a fiduciary position is expected to act in good faith always. They are therefore not expected to generate profit or benefits for his or her self or a third person without the consent of their informed principal. Failure to observe this may land this individual into liabilities of fiduciaries which are similar to those of trustees. The individual my then be held accountable of all actions committed and any resulting impacts to the other part. If there may be losses suffered by the other part from such actions, he or she may be asked to compensate them (Hudson, 2007).

Lucy fails to meet expectations of a person holding fiduciary position. She puts her self-interest before everything during the sale of their house. As observed in early scenarios she does not involve Edward during the sale of their house and her inclusion of Jamie, a second party, when purchasing the other house. Her actions of using some of the proceeds obtained to pay some of her company’s losses and liabilities are also against the fiduciary duties (Hudson, 2007).

Conclusion

It is apparent that Edward is right to claim an additional £250,000 payment from Lucy of the proceeds basing on some if not all considerations aforementioned above. We learn that Lucy during the sale of her older home and purchase of the new one violated some rules and regulations regarding property ownership and sharing. She failed to observe some critical steps like informing Edward before selling their property, one of the contributors of breach of trust between them. Her ignorance on rules governing property ownership among cohabiting couples that have stayed for more than two years together could also have contributed significantly. This might have been the reason as to why she offers Edward a quarter of the proceeds rather than half as stipulated by the Common Law of British Columbia.

From my point of view, Edward is entitled to an extra £250,000 to complete the fifty percent right in division of property by married couples. The same rule applies to couples who have stayed more than two years together even when not married. All is required of him is filing a claim to demand for this. He could also claim unjust enrichment against Lucy for her acts that resulted into unfair division of their property. Through his lawyer, Edward might claim compensation from Lucy on the basis of breach of trust between him and Lucy through fiduciary and trustee liabilities. Liabilities to strangers (which he would use against Jamie) could also offer an upper hand in Edward’s claim.

Division of Family Home in England and Wales for Unmarried Cohabiting Couples

A man and woman living together in a stable sexual relationship but not yet married are often referred to as c law cohabiting spouses. These spouses as we know have limited laws protecting them in terms of property ownership, liabilities, and rights. However, when it comes to England and Wales these spouses are viewed in a different perspective. In England and Wales these spouses are protected by the common law of British Columbia and hence their name common law spouses. This rule stipulates that couples who live together for at least two years also have same legal rights like those who are married. Thanks to the efforts that resulted from uncertainties on what really qualified marriage (Fairbairn, 2016).

Unmarried couples in England and Wales still lack protection from the court when break ups occur. Despite the fact that a court of law takes into account the circumstances and history of their relationship in ensuring fair division of assets, everyone still has the right to maintain all their acquired property. Courts still find difficulties in determining on proper division of properties in the cases where there are no clear circumstances. All in all, solutions on division of property are reached basing on some provisions in the law.

The general rule on property ownership holds that property registered by one spouse is not subject to sharing or division in case the two separate. However, this rule does not apply in all circumstances pertaining to their marriage. For instance, if by any case, there were agreements between the two spouses on division of property. The same rule does not apply to property acquired by both spouses but registered one spouse’s name (Unmarried Couples Rights, 2016).

The family law act holds differently when it comes to property ownership by cohabiting spouses with at least two years in their relationship. Through provisions of the family law act these spouses are given same legal rights as married spouses. Among these rights is the 50/50 division of property in case they break up. Therefore, a house or household property acquired during their relationship might end up being divided in equal amounts between them. However, this rule does not apply to scenarios where property was acquired one spouse before they entered into a relationship (Papworth, 2013).

A spouse has no legal rights to claim shares in property they found their other spouse already in possession even if they may contribute to it in one way or the other. Take for instance, a lady move into a house owned by a man, even if she may contribute to paying mortgages or paid in other form. Such ways may include staying back at home to look after children or paying for household expenses. This is owing to the fact that there is no law or provision regarding rights for personal maintenance even she might have offered financial support for over  five years during their relationship. However, they could enter into an agreement or the other spouse in ownership of the property voluntary agrees to share with the other (Unmarried Couples Rights, 2016).

Cohabiting spouses in joint ownership of family home have a fifty percent legal right claim according to English law. Despite the fact that one of the couples might have contributed more than the other, both couples are entitled to 50:50 share of the property. However, there are provisions for spouses who had entered into a legal agreement on how they were going to share their property. In this case, spouse with the highest contribution might be entitled to more than half ownership of the property. A spouse may also challenge against the 50:50 share rule, something that might not be that easy or very much expensive (Papworth, 2013).

Division of Family Home in the Republic of Ireland following Civil Partnership Certain Rights and Obligations Act 2010

The law in Ireland is clear on the differences between a family home and that of a shared home. According to the civil partnership and certain rights and obligations act 2010 a shared home is any dwelling or place of stay that civil partners stay. A family home on the other hand refers to a place of residence to a married couple. Ordinarily most family homes are registered in the name of both spouses. This has been achieved owing to the fact that it is among the conditions of mortgage used to when buying homes. For the few homes owned by one spouse, there are no restrictions or payment of stamp duty or registration fees during the process. The same applies to shared homes that are in the sole name of one spouse (Family and shared homes, 2016).

The Family Home Protection Act of 1976 offers protection for family homes owned by married couples through amendments made by the Family Law Act of 1995. Shared homes are also offered protection just like the case in family homes. This protection denies a spouse the ability to sell, mortgage or lease their family home without the consent of the other. It is there possible for a spouse or a civil partner to apply for court orders to restrict the other partner from using their family or shared home for self-gains (Fairbairn, 2016).

On separation of spouses, whether they were married or civil partners, there is need for agreements on who will be left to occupy the home. In case the two fail to agree the court could intervene to help with a property adjustment order. in this order the court will spell out the right person to live in their home and the given time they may live there. The court will also outline the person with ownership rights and how much each partner owns with regard to their house. In most cases the spouse living with children would be given the home to leave in as opposed to the other (Family and shared homes, 2016).

 

References

Fairbairn, C. (2016). “Common law marriage” and cohabitation (Rep. No. 03372). House of Commons Library.

Hudson, A. (2007). Liability for dishonest assistance in a breach of fiduciary duty. Journal of International Trust and Corporate Planning, 14(1), 23.

News, C. (2013). Common-law couples as good as married in B.C. Retrieved December 31, 2016, from http://www.cbc.ca/news/canada/british-columbia/common-law-couples-as-good-as-married-in-b-c-1.1413551

Neyers, J. W., McInnes, M., & Pitel, S. G. (2004). Understanding unjust enrichment. Hart Publishing.

Papworth, J. (2013, March 09). Why a cohabitation agreement is essential for non-married couples. Retrieved December 31, 2016, from https://www.theguardian.com/money/2013/mar/09/cohabitation-agreement-essential-non-married-couples

Anderson, M. (2013, May 05). Damages are not an adequate remedy: go directly to injunction. Retrieved December 31, 2016, from https://ipdraughts.wordpress.com/2013/05/04/damages-are-not-an-adequate-remedy-go-directly-to-injunction/

Family and shared homes. (2016, February 8). Retrieved December 31, 2016, from http://www.citizensinformation.ie/en/birth_family_relationships/separation_and_divorce/family_home.html

Unmarried Couples Rights. (2016). Retrieved December 29, 2016, from http://www.sheppersonssolicitors.com/unmarried-couples-rights.html

Bits of law. (2015, August 13). Retrieved December 31, 2016, from http://www.bitsoflaw.org/trusts/management/revision-note/degree/proprietary-personal-remedies-against-third-partie

Freezing orders: a quick guide. (2016). Retrieved December 31, 2016, from http://uk.practicallaw.com/6-205-5417

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