Source: http://www.familylawweek.co.uk/site.aspx?i=ed1008
Timestamp: 2018-04-23 07:36:29
Document Index: 23421289

Matched Legal Cases: ['art 7', 'art 8', 'art 7', 'art 8', 'art 7', 'art 8', 'art 8', 'art 7', 'art 8', 'art 3', 'art 7', 'art 16', 'art 31', 'art 35', 'art 28', 'art 8', 'art 8', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 7', 'art 8', 'art 15', 'art 12']

Family Law Week: Constructing an application to get a result in trusts
Constructing an application to get a result in trusts
Byron James provides a family lawyer's guide to the procedure for making trusts of land claims under the CPR
Byron James, Pupil, 29 Bedford Row
Constructive and resulting trusts are becoming an increasingly common aspect of most family practitioners' work. This article will seek to provide guidance on the procedure involved in issuing an application in respect of one of these more 'organic' forms of trust, a subject that, whilst less fashionable than a discussion of principle, is still nevertheless of first importance.
This article will be structured in three parts: the first will deal with some introductory points in respect of issuing a s14 application; the second will deal with two important decisions that need to be taken into account before issuing and the third contains some procedural checklists in respect of Part 7 and Part 8 applications.
Section 14 TLATA – a précis
Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 ("TLATA 1996") is the successor to s.30 of the Law of Property Act 1925 ("LPA 1925"). The LPA 1925, s 30 allowed for the trust for sale to be executed and the property sold; an application under TLATA can include a wider range of uses: the court are able to make such orders as it thinks fit as to the exercise by the trustees of any of their functions or the nature or extent of the beneficiaries' interests [1]. It is this latter point, coupled with the court's power to order or prevent the sale of a property, that is of most relevance in respect of constructive and resulting trusts.
1) Some introductory points
The following general points should be borne in mind in respect of s.14, TLATA applications:
An application under s.14 may be made by any person who is a trustee of land or has an interest in property subject to a trust of land [2];
A trust of land is defined to include a mixed trust comprising both land and personal property [3];
A person with an interest in the property does not need to be one of the original beneficiaries under the trust, it could, for instance, be a trustee in bankruptcy;
An application may also be made under s 14 in relation to a trust of proceeds of sale of land [4];
The statutory checklist (TLATA 1996, s 15) does not provide the court with any discretion to adjust beneficial interests; beneficial interests are instead to be determined and declared according to 'the established principles of trust law' [5].
An application under TLATA falls outside those defined as 'family proceedings' [6]. This therefore has the consequence of TLATA applications being governed not by the Family Proceedings Rules ("FPR") but rather by the Civil Procedure Rules 1998 ("CPR").
2) Tactical considerations
Before issuing a s.14 application, there are two considerations that one should bear in mind: the first is to decide which court the claim should be commenced in and the second involves deciding which procedural route is most appropriate.
High or County Court?
It is possible to commence proceedings in either the High Court or the County Court [7]. Significantly, district judges (including district judges of the Principal Registry ("PRFD")) have jurisdiction to hear and dispose of proceedings under s.14 [8]. This therefore allows the applicant party to make an early tactical decision; most practitioners would agree that the 'choice' of tribunal could prove determinative in certain cases. Irrespective of the varied character of judges at any level, one can certainly say, for instance, that the perspective of a chancery judge will be different to a family judge: the types of case they see, day in day out, will be different, their own practices, prior to becoming a member of the judiciary, will have been different. There are, potentially, numerous aspects to a case upon which one would want a sympathetic judicial ear, the most obvious example being whether one is seeking to resist or establish a trust. Without wishing to be unfair to any tribunal, or indeed assert any kind of blanket rule, it is probably right to say that the sympathies of a family judge will be more highly tuned to the pleas of the potentially homeless than the more commercially aware chancery judge. Such a decision is therefore of first importance and certainly deserves careful thought.
There are other factors which one should be mindful of in respect of the tribunal sought. The discrepancy in costs between the High and County Court is not as wide as some might think; whilst costs might often be higher in the High Court than the County Court it is a non sequitur to say that they must be so. The typical High Court case will often be more complex, thus more likely to require more time, involve more senior counsel and more detailed expert opinion. However these factors will not apply to every case; the costs will follow the nature of the case rather than where it is tried.
PRFD judges will rarely transfer out of the PRFD in TLATA cases if there is at least some 'family law' element to the case. Since the new appointment of circuit judges at the Gee Street Courthouse, it is noticeably no longer de rigeur for non-care/ancillary relief work to be transferred either up or across. This therefore means that if one makes a decision to issue out the Registry there is a good chance that it will stick there. It should be noted however that transfers remain possible and there are certainly some judges at the Registry whose propensity to transfer is greater than others.
The 'family' element of the case is also of importance if one is to issue out of the High Court; a decision will need to be taken as to whether the application is made to either the Chancery or Family Division. It might be that the facts of the case only really justify an application to one of the divisions but if a choice is possible, then the practitioner will have to make a tactical decision as to which division is most appropriate (see above). It should also be noted that the court will also expect practitioners to be familiar with 'The Chancery Guide',
There are also geographical limitations, more applicable to those cases outside of London, to the issuing of an application. An applicant cannot expect a defendant to answer a claim outside of their 'jurisdiction' nor is it open to the applicant party to issue outside of the jurisdiction containing the relevant property. Therefore, if one is to issue out of a regional County Court then it should be issued out of the County Court which has geographical jurisdiction for the parish where the property is situated; the County Court Index is used to determine which court has geographical jurisdiction.
I should state as a final caveat to this part of the article that despite best intentions and thoughtful tactics, the practitioner, as ever, will always be at the mercy of the judge that first deals with the application. The matter can be transferred upwards, downwards or between divisions, with arguments to the contrary falling upon deaf ears. This, simply, is the nature of litigation; one should always be conscious of explaining such things to the client beforehand, otherwise they might be feeling defeated before the application has really even begun.
The second fundamental decision that one needs to take is in respect of whether one opts for the Part 7 or Part 8 procedural route.
Part 7 represents the 'general procedure' that is applicable qua applications under the CPR. The 'alternative procedure', so termed by the CPR, is represented by Part 8, and mainly [9] involves "a question which is unlikely to involve a substantial dispute of fact" [10]. It is in this difference that the two procedural codes are separated: Part 8 procedure does not require a defence to be drafted [11], default judgment is not available [12] and the claim will be automatically be treated as if allocated to the multi-track [13].
Contrary to the opinion of some practitioners, the writer does not necessarily agree that the route of Part 7 or 8 can be forecast by the content of the title (of the disputed property). Whether the property is held in joint names or not, there is clear potential for substantial dispute of fact; the outcome could be dependant upon, inter alia, a conversation they have had, some money that they have paid out or some development work done to the property, all of which could be factually in dispute.
The extent to which there is a substantial dispute of fact will depend case to case and will ultimately be decided, at least initially, by the judgement of the practitioner. The main dispute will inevitably concern either agreements or contributions, these being the mainstay of most s.14 applications. Initially one will seek to establish that the agreement and/or contributions were made and subsequently the extent to which these are either valid or have impacted upon the ownership/purchase of the disputed property. The first of these enquiries is factual; the second based more on principle and interpretation. Where the balance lies between these two is clearly something that a view will need to be taken on.
A practitioner might opt for the Part 8 route because of costs reasons; whilst the hearing is likely to be similar in length under each of the codes, the pre-trial litigation is likely to be significantly shorter not least because matters are not delayed by exchanges of pleadings. Irrespective of costs, however, there nevertheless remains a tactical element to the decision that needs to be made.
If one makes an application under either the wrong procedural route entirely or one that a judge thinks inappropriate, the defendant can apply, or the court can of its own motion under its general case management powers (see CPR, Part 3), for the case to be determined according to a different procedure.
3) Procedural Checklists
(To assist with the digestion, I have decided to put the guide in checklist form)
Part 7 Applications – a procedural guide
The Claim Form should be submitted using Form N1;
The content of the Claim Form must comply with CPR Part 16.2(1), this requires a concise statement of both the nature of the claim and the remedy that the claimant seeks;
The Particulars of Claim must be contained in or served with the Claim Form (CPR r. 7.4(1)(a));
If not, then it must be served within 14 days after service of the Claim Form (CPR r. 7.4(1)(b)). In addition to this, the claimant must state on the Claim Form that the particulars of claim 'will follow' (CPR 16.2(2));
The content of the Particulars of Claim must comply with the requirements set out in CPR 16.4 which requires both a concise statement of the facts upon which the applicant relies and a statement of the interest that the applicant seeks to assert;
Both the Claim Form and the Particulars of Claim must be served on the defendant no later than 4 months after issue of the claim (CPR 7.4(2) and 7.5(2)) although the claimant may apply for an order extending the period of time within which the Claim Form may be served (CPR 7.6(1));
Where a Claim Form has been issued against a defendant, but has not yet been served on him, the defendant may serve a notice on the claimant requiring him to serve the Claim Form or discontinue the claim within a period specified in the notice (CPR 7.7).
The Defence must comply with the requirements of CPR 16.5, which states that he must set out what is admitted, denied, and what the defendant is unable to admit or deny and wishes the claimant to prove;
The defendant may file an optional Acknowledgment of Service within 14 days of service of the Particulars of Claim (CPR 10.3(1)).
If this is not done, then the Defence must be filed within 14 days of service of the Particulars of Claim (CPR 15.4(1)(a)). Following this, the Defence must be filed within 28 days of service of the Particulars of Claim (15.4(1)(b));
Upon the filing of the Defence, the Court will send both parties an Allocation Questionnaire (CPR 26.3(1)) (Form N150);
The Allocation Questionnaire requires a party to set out details of proposed witnesses, experts (if any), estimated length of trial, costs to date, estimated costs to end of trial, and proposed directions;
The completed Allocation Questionnaire must be filed with the court no later than the date specified in it, which shall be at least 14 days after the date when it is deemed to have been served on the parties (CPR 26.3(6));
The parties may not by agreement vary the date for filing the completed Allocation Questionnaire (CPR 26.3(7));
Upon receipt of the Allocation Questionnaire, a 'procedural judge' (usually a District Judge) will 'allocate' the claim to one of three 'tracks' – 'small claims', 'fast' or 'multi' (CPR 26.5 – 26.9). Almost all TLATA 1996 claims are allocated to the 'multi-track';
If the claim is allocated to the 'fast track' the District Judge is likely to make directions as to disclosure of documents (CPR Part 31), service of witness statements, expert evidence (CPR Part 35) and will fix the trial date or a trial 'window' of not more than 3 weeks (CPR 28.2(2)). Standard directions are set out in CPR Part 28 PD;
If the claim is allocated to the 'multi-track' the claim is likely to be listed for a Case Management Conference (CPR 29.2(1)).
Part 8 Applications – a procedural guide
The Claim Form should be submitted using Form N208;
The content of the Claim Form must comply with CPR r. 8.2, which requires a concise statement of the nature of the claim, any declarations as to beneficial interest that the claimant seeks and the legal basis of the claim (i.e. whether a constructive trust and/or proprietary estoppel is being relied upon);
The claimant must also file any written evidence upon which he intends to rely when he files his Claim Form (CPR 8.5(1));
There is therefore no need to draft separate Particulars of Claim; the claimant's evidence must be served on the defendant with the Claim Form (CPR 8.5(2));
The claimant may, within 14 days of service of the defendant's evidence on him, file and serve further written evidence in reply (CPR 8.5(5) and (6));
The defendant must file and serve an Acknowledgment of Service (N210) within 14 days after receipt of the Claim Form and written evidence (CPR 8.3(1));
The defendant may, in his Acknowledgment of Service, indicate that he objects to the use of the CPR Part 8 procedure because, for example, he states that there is a substantive dispute as to fact (CPR 8.8);
If the defendant does not file an Acknowledgment of Service at all or within time he may attend the hearing of the claim but may not take part in the hearing without the permission of the court (CPR 8.4);
The defendant must file his written evidence and serve it on the claimant when he files his Acknowledgment of Service (CPR 8.5(3) and (4));
The claim is then automatically treated as being allocated to the multi-track (CPR 8.9(c)) and the court will fix a date for a Case Management Conference.
Costs – relevant to both codes
The court has the power to take into account pre-action conduct in making any order for costs (CPR 44.3(5)(a)) and in determining the quantum of those costs (CPR 44.5(3)(a)(i))) whether or not there is a pre-action protocol in respect of those proceedings;
The practitioner should also be mindful of Part 36 offers: which afford a cost protective environment for the making of offers; for example, it is implicit in Part 36 offers that if the Claimant accepts the Defendant's Part 36 offer, the Defendant will pay the Claimant's costs. It is therefore a misnomer for Part 36 offers to include a 'no order for costs' provision, a surprisingly regular occurrence which undermines the cost protection element of Part 36 offers; practitioners should therefore be aware to avoid this mistake.
The writer would like to thank Christopher Wagstaffe for his helpful assistance with this article.
1. TLATA 1996, s.14(2).
2. Ibid. s.14(1)
3. Ibid. s.1(1)(a).
4. Ibid. s.17(2).
5. Lowson v Coombe [1999] CH 373
6. Matrimonial and Family Proceedings Act 1984, s 32.
7. TLATA 1996, s 23(3); CPR, Part 7 Practice Direction, para 2.
8. Practice Direction (Family Proceedings: Allocation and Costs) 22 April 1999 [1999] 1 WLR 1128.
9. There are rare occasions when Part 8 can be otherwise used; for example, claims under the Inheritance (Provision for Family and Dependants) Act 1975 (CPR, r.57.16(1))
10. CPR r. 8.1(2)(a)
11. CPR, Part 15(1)
12. CPR, Part 12
13. CPR, r. 8.9(c)