Cambridge BA: Resulting & Constructive Trusts Exam Paper

In 2018, Alice and Bob purchased a house for £400,000 as joint tenants. Alice contributed £300,000 from her inheritance, while Bob contributed £100,000 from his savings. The property was registered in both names with no declaration of beneficial interests. During the purchase process, Alice told Bob 'don't worry about the unequal contributions - we're in this together and it's our home.' Bob gave up his secure tenancy and moved in, spending £50,000 on home improvements and paying all household bills for three years. In 2020, Alice began a relationship with Charlie. Without consulting Bob, she secretly transferred her legal title to Charlie for £1. Charlie knew about Bob's contributions and residence but believed Alice owned the entire beneficial interest. Alice has now moved out to live with Charlie, who seeks possession of the property. Bob, who remains in occupation, claims he has acquired a beneficial interest exceeding his original 25% contribution. Charlie argues that any interest Bob might have had was overridden when Alice validly transferred her rights to him. Advise the parties on their respective beneficial interests and the likelihood of Charlie obtaining possession.

David, a successful businessman, has been in a relationship with Emma for eight years, though they never married. In 2019, David purchased a luxury apartment for £800,000, registered solely in his name. David told Emma: 'This will be our home together, and I want you to feel completely secure here.' Emma, a freelance artist with irregular income, moved in and gave up her rented studio. She contributed £30,000 from selling her artwork towards furnishing the apartment and spent considerable time renovating the property, adding a custom art studio worth £40,000. Emma also managed David's social media business for three years without payment, significantly increasing his profits. In 2021, David borrowed £200,000 from Falcon Bank, secured by mortgage over the apartment. The bank's surveyor noted Emma's obvious occupation and studio, but the bank made no inquiries about her interest. Emma was not informed of the mortgage. David has now defaulted on the loan, and Falcon Bank seeks possession. Meanwhile, David has left Emma and begun cohabiting with Fiona. Emma claims a beneficial interest in the apartment and seeks to resist the bank's possession claim. She also argues that David holds his increased business profits on constructive trust for her. Assess Emma's claims and the likely outcome of Falcon Bank's possession proceedings.

"The modern law of resulting trusts lacks coherent theoretical foundation, oscillating inconsistently between presumed intention and unjust enrichment rationales." Critically evaluate this statement with reference to the academic debate and recent judicial developments.

Analyse the extent to which the decisions in Stack v Dowden and Jones v Kernott have successfully resolved the difficulties in establishing and quantifying beneficial interests in the family home, or whether they have created new uncertainties.