Louison v Stewart

JurisdictionGrenada
JudgeCorbin Lincoln, M.
Judgment Date29 September 2015
Neutral CitationGD 2015 HC 13
Docket NumberGDAHCV 2014/0360
CourtHigh Court (Grenada)
Date29 September 2015

High Court

Corbin Lincoln, M.

GDAHCV 2014/0360

Louison
and
Stewart
Appearances:

Mr. Benjamin Hood of Counsel for the claimant

Ms. Deborah St Barnard of Counsel for the defendant

Trusts - Constructive trust — Whether the motor vehicle was an unconditional gift to the claimant — Whether the claimant held the motor vehicle in trust for the defendant — Whether there was a common intention to create constructive trust.

Corbin Lincoln, M.
1

Nelson Louison is a businessman and a consultant for Consolidated Contractors Company. Margaret Stewart is employed with the Government of Grenada. Mr. Louison and Ms. Stewart were involved in an intimate and what appears to have been a tumultuous relationship for approximately 10 years.

2

During the course of the relationship Mr. Louison provided financial support to Ms. Stewart. The relationship came to an end sometime around April or May 2014 when Ms. Stewart obtained a protection order against Mr. Louison.

3

On 31st July 2014, a few months after the relationship was terminated, Mr. Louison commenced this claim against Ms. Stewart. At the heart of the claim is a 2008 Nissan X-Trail motor vehicle (“the motor vehicle”) registered in the name of Ms. Stewart. Mr. Louison states that he purchased the motor vehicle and seeks, inter alia,:

  • (1) A declaration that Ms. Stewart holds the motor vehicle on trust for him;

  • (2) A declaration that he has a beneficial interest in and is the beneficial owner of the motor vehicle;

  • (3) An order that Ms. Stewart deliver up possession of the motor vehicle to him and sign the requisite documents to effect a transfer of registration to him.

4

At the case management conference, the parties agreed that the sole issue for determination is whether the motor vehicle was an unconditional gift to the Ms. Stewart or whether she holds it on trust for Mr. Louison. The parties agreed further that this matter could be disposed of summarily without the need for a full trial.

THE CLAIMANT'S CASE
5

Mr. Louison contends that he fully financed the purchase of the motor vehicle at the cost of EC$65,000.00. He contends that the presumption of advancement which applies between husbands and wives or intended husbands and wives does not apply in this case as they were not married and there is no evidence that they intended to marry. He contends further that they cannot be classed as unmarried co-habitants.

6

Mr. Louison submits that a resulting trust was created when the motor vehicle was registered in the name of Ms. Stewart. A resulting trust is created by operation of law [Halsbury's Laws of England, 4th Edition, Volume 48 paragraph 597] where, inter alia,

  • (1) property is purchased in the name or placed in the possession of a person ostensibly for his own use, but really in order to effect a particular purpose which fails; or

  • (2) if property is purchased in the name or placed in the possession of a person without any intimation that he is to hold it on trust, but the retention of the beneficial interest by the purchaser or disposer is presumed to have been intended.

7

The presumption of a resulting trust can rebutted by showing that a gift was intended but in this case there was no intention to give Ms. Stewart the motor vehicle as a gift. The onus is on Ms. Stewart to prove that Mr. Louison intended the motor vehicle as a gift and she has failed to show any evidence to rebut the presumption of a resulting trust.

THE DEFENDANT'S CASE
8

Ms. Stewart contends that the motor vehicle was an unconditional gift. She states that she contributed $15,000.00 towards the purchase of the motor vehicle. Ms. Stewart submits that:

“The presumption in law is that where a husband or intended husband or intimate partner purchases property in the sole name of his wife/ intimate partner or transfers property into her sole name he does so as an absolute advancement or gift to her.”

9

I note that Ms. Stewart cites Halsbury's Laws of England 4th edition paragraph 612 in support of this submission. A copy of paragraph 612 was not exhibited. A copy of paragraph 611, which deals with transactions between husband and wife, was however exhibited and highlighted. Paragraph 611 only refers to a presumption of advancement between husband and wife and an intended husband and an intended wife. There is no reference in that paragraph to the presumption extending to intimate partners.

10

Ms. Stewart submits that: “The presumption of an advancement of gifts can be rebutted if there is evidence to the contrary. Further, if there is some contrary intention at the time, that the benefit is for the purchaser, then the property is deemed in equity to be held on a resulting trust for the purchaser.”

11

Ms. Stewart submits further that the common intention of the parties at the time of the purchase of the vehicle must be considered and that extrinsic aids may be used to ascertain the intention. [ ChinaCash Inc. v. Light Year Partners LLC and another, BVIHCVAP2010/032] Having regard to all the evidence it is clear that the motor vehicle was an unconditional gift.

THE GOVERNING LAW
12

The law on resulting and constructive trusts has a long and, in my view, a complex history. In the often cited landmark case of Gissing v. Gissing [1970] 2 All ER 780 Lord Diplock explained the resulting, implied and constructive trust in this way: [ibid page 790]

“A resulting, implied or constructive trust -and it is unnecessary for present purposes to distinguish between these three classes of trust -is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.”

13

This formulation of the creation of a resulting, implied or constructive trust thus requires an examination of the conduct of the trustee to determine whether the trustee has so conducted herself that it would be inequitable to allow her to deny the cesqui que trust a beneficial interest.

14

Mr. Louison submits that a presumption of a resulting trust arises in this case. It is well established however that the presumption of a resulting trust is not a rule of law. The equitable presumptions of intention are “no more than a consensus of judicial opinion disclosed by reported cases as to the most likely inference of fact to be drawn in the absence of any evidence to the contrary”. [Lord Diplock in Pettitt v. Pettitt [1970] AC 777, at 823H]

15

In Stack v. Dowden [2007] UKHL 17 Baroness Hale noted:

“Equity, being concerned with commercial realities, presumed against gifts and other windfalls (such as survivorship). But even equity was prepared to presume a gift where the recipient was the provider's wife or child. These days, the importance to be attached to who paid for what in a domestic context may be very different from its importance in other contexts or long ago. As K Gray and S F Gray, in Elements of Land Law, 4th edition 2005, point out at p 864, para 10.21:

In recent decades a new pragmatism has become apparent in the law of trusts. English courts have eventually conceded that the classical theory of resulting trusts, with its fixation on intentions presumed to have been formulated contemporaneously with the acquisition of title, has substantially broken down…. Simultaneously the balance of emphasis in the law of trusts has transferred from crude factors of money contribution (which are pre-eminent in the resulting trust) towards more subtle factors of intentional bargain (which are the foundational premise of the constructive trust)…. But the undoubted consequence is that the doctrine of resulting trust has conceded much of its field of application to the constructive trust, which is nowadays fast becoming the primary phenomenon in the area of implied trusts.” (Emphasis mine).

16

Historically, a significant number of cases in the area of implied trusts, like Gissing v. Gissing, involved property disputes between married couples. While the principles of law are the same whether the couple is married or not the inferences to be drawn from their conduct may be different. [ibid per Baroness Hale at paragraph 40]. In this case the parties were never married.

17

Stack v. Dowden involved a property dispute between an unmarried couple who were cohabiting. The case concerned property which was conveyed in the joint names of the parties but in the course of her judgment Baroness Hale also addressed cases where property is conveyed in the sole name of one party. She stated: [paragraph 56]

“… the starting point where there is sole legal ownership is sole beneficial ownership…The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership. So in sole ownership cases it is upon the non-owner to show that he has any interest at all.”

18

Lord Hope noted [paragraph 5] that

“The advantage of this approach is that everyone will know where they stand with regard to the property when they enter into their relationship. Parties are, of course, free to enter into whatever bargain they wish and, so long as it is clearly expressed and can be proved, the court will give effect to it. But for the rest the state of the legal title will determine the right starting point. The onus is then on the party who contends that the beneficial interests are divided between them otherwise than as the title shows to demonstrate this on the facts.”

19

Stack v. Dowden was explained and approved in Jones v. Kernott [2012] 1 All ER 1265 where...

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