Ring out the Old!
Thursday 12th January 2012
It is surprising that with so many Acts passed annually parliament cannot find the time to address some basic areas where the law has either become obsolete or failed to keep up with modern life and social habits.
The task of reviewing old, outdated or complicated laws which have often become strewn with anomalies is given to the Law Commission. Their reports make for some interesting reading (for sad lawyers anyway) as they normally give a very good summary of the existing law, the problems with it and their proposals for reform. Often the report is accompanied by a draft bill, to be put before parliament.
Despite the good and thoughtful work they produce, it is surprising the number of their reports which gather dust on the shelf, sometimes for years. Under a recent change in the law the Lord Chancellor is now required to report to parliament annually on which proposals have been implemented and which not. Some of the proposals currently not going forward are fairly esoteric and attract little publicity, such as detailed rules relating to trusts. Others are very much in the public eye and impact directly on issues of huge public concern. Among these are proposed changes to the law of homicide, which had become hopelessly obscure and outdated over the centuries, the law on proof of criminal conspiracies (too difficult in some cases) and rules on accessories to crime.
One of the most significant recent reports is the proposal for changes on jointly owned property in cases of cohabitation. Here, the unsatisfactory nature of law has been highlighted over several decades, not least by the rise in the number of couples who choose to cohabit without marrying. When it comes to married couples the courts have for many years had the power to vary the legal ownership of property owned by one party or the other by making a Property Adjustment Order. However, this power does not apply where the parties are not married. In that case the court has had to resort to the law of trust to determine the ownership of property, usually a house.
English law distinguishes between the legal ownership, i.e. who owns the freehold (usually who has the registered title at the Land Registry in their name) and the beneficial ownership, i.e. who is entitled to the money on a sale or the rents if a property is leased out. Problems often come to court where a property is in one name but the other party alleges that they are entitled to a share in the property. This can either be because there is an express agreement on how the shares are to be divided or because the court can infer a share by reason of their conduct. The courts tend to term this a constructive trust. Alternatively, a party may claim a share because they have contributed to the purchase price or the mortgage (a resulting trust). If the property is held in joint names there is a presumption that it is 50:50. This however is itself often challenged by evidence that the parties had a different intention, either at the time the property was bought or subsequently.
This all makes for huge uncertainty and for difficult and costly disputes, with parties trying to produce records or evidence of what was done or paid for many years previously. A recent Supreme Court decision has provided some guidance but still leaves a rump of cases where the court will be throw back on trying to infer an intention on the part of the parties for which in reality there is little evidence either way.
For anyone buying a house jointly with a partner there is no fool proof way of removing all the uncertainty. Most conveyancing solicitors these days will advise the parties to be specific as to how they want to hold the property and to set this out in a document (a declaration of trust). This helps, providing the intention is clearly expressed. The problem though remains that over many years intentions can change, opening the door to litigation.
The Law Commission want to give the court powers similar to, but more limited than, the courts on divorce to enable them to vary ownership as the interests of justice demand without recourse to the law of trust. It remains to be seen whether government and parliament will find the time to implement what will be a very worthwhile piece of legislation.