Chapter 10 Self-Test Questions

'Recognizing informal arrangements relating to property has been controversial.'

True.

False.

Which of the following need to be evidenced in writing?

Express trusts of land.

Constructive trusts of land.

Resulting trusts of land.

All trusts of land.

'The common intention constructive trust is essentially an express trust, as it relates to the common intentions of the parties.'

True.

False.

What is proprietary estoppel?

Where a defendant has acted unconscionably, they will hold property on trust for the claimant.

Where a defendant makes an assurance to the claimant, they will be bound to honour that assurance.

Where a defendant makes an assurance to the claimant that they will acquire an interest in property and the claimant has relied on this to their detriment, the claimant may acquire a beneficial interest in the property.

Where a defendant makes an assurance, they owe a fiduciary duty to personally account for the losses caused by the assurance.

Where property is registered in the name of one party, what presumptions apply?

It is presumed that there is an equitable interest in the property as Equity prevails over the law.

It is presumed that the registered owner also holds the equitable interest.

It is presumed that there is no equitable interest and the registered owner holds the beneficial interest.

No presumptions apply.

'If property is registered in the name of both parties, it is straightforward for a claimant to argue that the beneficial interest should be apportioned differently from the presumed 50:50 division.'

True.

False.

If the parties have an express common intention, which of the following factors must the court consider in assessing the apportionment of the beneficial interest?

How the couple arranged their finances.

Whether the couple have children.

The purpose for which the property was acquired.

None of the above.

What is problematic with considering the imputed common intention of the parties?

It is dangerously close to the remedial constructive trust.

It often leads to results which the parties would not have intended had they considered the apportioning of the beneficial interest.

It allows the court to impose a solution on the parties which is contrary to what the evidence shows that they actually intended.

It does not consider the actual intentions of the parties (whether express or inferred) but what the court thinks the parties would have intended had they considered the apportioning of the beneficial interest.

'The common intention constructive trust is a far better mechanism than the resulting trust in relation to identifying the beneficial interest in property.'

True.

False.

What is required in order to recognize a joint venture constructive trust?

There must be an express agreement between the parties that the claimant will acquire an interest in the property. This agreement can be made after the acquisition of the property.

There must be an express agreement between the parties that the claimant will acquire an interest in the property. This agreement can be made before the acquisition of the property.

There must be an enforceable contract between the parties before the acquisition of the property.

There must be an enforceable contract between the parties and the parties must be formally recognized as business partners.

The parties have an oral agreement to create a joint venture constructive trust. Prior to the acquisition of the property, the defendant informs the claimant that they no longer intend to honour the arrangement.
What is the consequence?

A constructive trust will still arise.

The defendant will be liable for breach of contract.

A constructive trust will not arise.

The defendant will be liable for breach of trust.

'If the parties are anticipating the creation of a formal contract, a joint venture constructive trust will arise to protect their interests in the event of a breach in the interim.'

True.

False.

'Proprietary estoppel is virtually identical to the common intention constructive trust.'

True.

False.

How does proprietary estoppel differ from the joint venture constructive trust?

The joint venture constructive trust identifies the true beneficial owner. A claim in proprietary estoppel creates a mere equity.

The joint venture constructive trust does not relate to unconscionability, whereas proprietary estoppel does.

The joint venture constructive trust exists from the date that property is acquired. If a trust is recognized due to proprietary estoppel it exists from the date that the assurance was made to the party acting to their detriment.

Proprietary estoppel alters the legal rights of the parties whereas the joint venture constructive trust relates to equitable proprietary interests.

How does proprietary estoppel operate?

Proprietary estoppel is a sword by which property rights can be created and acquired.

Proprietary estoppel acts as a shield by preventing the defendant from denying a particular state of affairs.

Proprietary estoppel is both a shield and a sword.

Proprietary estoppel renders the defendant personally liable for breaching an obligation.

How does proprietary estoppel differ in commercial and domestic contexts?

Proprietary estoppel cannot apply in commercial contexts.

In a commercial context, if there is an agreement 'subject to contract', there is no role for proprietary estoppel.

In a domestic context, there is a relationship of trust and confidence.

Equitable principles do not apply in commercial contexts.

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