"Tenant" claims beneficial interest/constructive trust

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  • "Tenant" claims beneficial interest/constructive trust

    Please could someone help with this? I have written it in a theoretical way as it is easier for me to focus on what I am trying to query

    It is too long to go on one post so I have had to split it into three separate posts. I hope this is allowed and that no one minds me doing this.
    I know the three posts together will take some time to read and digest and I am so grateful to anyone willing to bear with me
    Thank you so much


    • A and B are a married couple
    • A has sole ownership of a mortgaged property ("The Property") which A owned before meeting B
    • A had some years previously, owned The Property jointly on an endowment mortgage with A’s first spouse, E
    • When A & E divorced, A bought E’s share of The Property with a 100% endowment mortgage in A’s sole name
    • A & B live together at A’s property before marrying. They then jointly buy another home in a different area and move out of The Property
    • A lets The Property to D who has a written, signed residential tenancy agreement
    • D later leaves The Property. D has not looked after The Property; it is very dirty and very badly decorated.
    • A decides not to re-let it but instead decides to redecorate The Property at minimum cost in order to sell it asap
    • On A’s behalf, B contacts:
    a] A’s mortgage lender to let the lender know that the residential let permit is no longer needed as A intends to sell The Property asap
    b] the council to let them know that the tenant, whose rent was paid via benefits has left and also to ascertain the council tax position as A intends to sell The Property asap
    c] two local estate agents to arrange valuation appointments at B's convenience as A cannot drive and is unable to visit The Property without B's help

    • After A and B start to do some work on The Property, C, who is A's older sibling, offers to finish the redecoration at no cost to A but as a favour as A is a close relative and C cites how difficult it is for A to get to The Property as opposed to C who lives nearby
    • A is reluctant as A and C have not been close and A feels a little uneasy about C's offer
    • C persists and A realises that C will not give up and go away so A agrees to accept C's 'favour' only on condition that the work is finished within a specified period
    • A gives C licence to enter The Property to carry out redecoration and hands a set of keys to C
    • C does no work on The Property, so A asks C to return the keys and remove any tools or other items that may belong to C

    • C subsequently tells A that C has changed the locks because C was worried that A's former tenant may still have keys and may enter The Property without permission
    • A tells C that C had no right to do this without A's permission
    • A reminds C that C only had licence to enter The Property to refurbish it and A requests that C send the keys to A
    • C asks A to give C another chance
    • A refuses as A has lost rental income and also been prevented from selling The Property due to C's non performance of C's 'favour' to A

    • C, (who it is later discovered has assumed that The Property must at some stage have been transferred into A & B’s joint ownership) without querying ownership of The Property, asks B for another chance
    • B, who controls A & B's joint bank account and deals with their finances complains that A & B have a lot of household and personal outgoings which need to be paid for and therefore they cannot afford to lose the rental income and they need to sell A’s property to pursue their own plans
    • C tells B that C will compensate A & B for A’s rental loss during the agreement period, by making monthly non-returnable cash compensation payments in lieu of rent at the amount previously paid by D
    • C also offers to make extra, returnable payments to B during the agreement period in the event that A & B experience any cash-flow problems connected with their personal bank overdraft

    • B agrees with C that :
    a] if C does the required work (which changes from simple redecoration to minor refurbishment at the insistence of C) at a good standard, in the required time (which changes from 4 weeks to 3 months), as specified by B to be later agreed by A, then The Property will be put on the market with the aim of selling it as soon as possible
    b] The amount of the selling price would then be dispensed in the following order:
    1) redemption of the mortgage (£w)
    2) the amount between the mortgage redemption amount (£w) and a specific amount (£x) to be retained by A, the specific amount £x decided by taking into account current market value of The Property and similar local properties (around £y)
    3) from the amount left above £x, the payment of all selling costs, all conveyance costs, all disbursements, all legal costs, all taxes, and any other associated and incremental costs
    4) any residual net profits left after 1) 2) and 3) above have been paid, to be paid by A to C
    • B makes it quite clear to C that A will not agree to anything unless B promises to do the work in the time agreed
    • C agrees that if the work is not completed by the end date, then A will sell The Property and C will get nothing
    • C agrees to provide a set of keys to A
    • All of this is agreed verbally

    • During the agreement period C makes erratic payments of irregular amounts into A & B's joint bank account so B, unbeknown to A and without A's authority, draws up a schedule to remind C of when C should make the payments and how much they should be
    • Included on this schedule are the payments in lieu of rent already paid, the address of The Property and B's promise to C
    • The written schedule of compensation payments in lieu of rent does not include the stipulation about the time limit for C to do the work
    • The written schedule of compensation payments in lieu of rent is not signed by B or C
    • A is told nothing by B or C about the written schedule of compensation payments in lieu of rent

    • Just before the agreed time period is up, C contacts A and says that C has done some of the work but due to C’s own commitments C has been unable to complete the work
    • A tells C that A & B will do the work themselves if C cannot commit the time to the job and that their agreement is terminated
    • C reminds A that the promised refurbishment is being done at C's own expense whilst C still has to make a living and C bullies A into agreeing a time extension to the agreement instead of terminating it

    • Just before the time extension period is up, C contacts A and says that C has been very ill and has not had chance to finish the work C started
    • C makes A feel sorry for C and A is subsequently manipulated into agreeing another extension period
    • After the second agreed time extension period is up, A contacts C to say that A & B are going to visit The Property to check the work before choosing an estate agent to help A sell The Property and that they need The Property keys as the set C promised to send A had never materialised
    • C refuses to hand over the keys and refuses A & B access to A's property unless a fresh agreement is made
    • C threatens to continue to obstruct A & B's attempts to access The Property and to prevent A from selling The Property unless A and C make a new agreement

    • C accuses A & B of trying to sell The Property “behind (C’s) back”. C makes it clear from the ensuing argument that C had deliberately misrepresented C’s true intentions when the agreement was made and that C had really intended to:
    a] ignore the agreed time limit in which the work had to be completed
    b] refrain from doing the agreed work in the agreed time
    c] prevent A from selling The Property for as long as possible to maximise C’s profits in a rising market
    • A & B make it clear to C that this was NOT as agreed and that the time limit was the whole basis on which the agreement was made
    • A tells C that A would not have consented to any agreement which was not time limited, that no reasonable person would have agreed to sit back and wait for as long as the other party wished so that the other party could maximise their own profits whilst the value of their own share decreased with inflation
    • A tells C that C’s intention was not the common intention that had been agreed and that C’s intention was nonsense as it would mean that C could effectively prevent A from selling The Property for 20 or 30 years or however long C wished and that nobody in their right mind would have agreed to that.
    • C argued that if C performed the work required in the time required as agreed, then A may sell The Property but fail to give C any of the profits
    • A said that if C had honoured C’s part of the agreement and C performed the work required in the time required, then A would of course honour A’s promise as per the agreement and had never intended to do otherwise
    • A, B and C enter A’s property A & B see that C has not done the promised work on The Property
    • Mail addressed to A and to A & B at The Property has been opened. A tells C that C has no right to open mail addressed to someone else and says that C should not do this again. C agrees to forward any future mail to A
    • C assaults B then demands that B leaves so that A and C can discuss the matter
    • B leaves

    • C repeats C's threats that unless C and A make a fresh agreement then C will:
    a] obstruct A from selling A's property
    b] harm B
    • A and C argue and C assaults A
    • A and C make a new verbal agreement in place of all previous agreements
    • The new agreement is more beneficial to C than the one just ended
    • The new agreement is less beneficial to A than the one just ended
    • A makes it quite clear that A will not agree to anything unless B promises to do the work in the time agreed
    • A and C agree that if the work is not done by a specified date (which is exactly one month later), then A will sell A's property and C will get nothing
    • All of this is agreed verbally
    Last edited by legallysane; 17-10-2009, 04:02 AM. Reason: minor error

  • #2
    Part two


    • A few days later, C contacts A to say that C is worried that when A sells The Property A will sell it for a low price to get rid of it quickly. A truthfully denies that this is A’s intention
    • C demands that the agreement is put in writing by A, and sent to C who will then take it to C’s solicitor so that C’s solicitor can rewrite it as C the way C wants it written
    • A says that A is quite happy to have the agreement in writing and checked legally but will only if it remains as per the verbal agreement. A does not agree to C having the agreement changed and rewritten the way C wants it
    • C becomes abusive and A tells C that C’s demand to rewrite the agreement in C’s own way is unreasonable
    • A questions why C would want to do this and C replies that C trusts A but does not trust B
    • A says that if C trusts A that is sufficient. A realises during the discussion between A and C that C had presumed The Property was jointly owned by A & B
    • A explains to C that A is the sole owner of The Property

    • During the one month new agreement period, A regularly contacts C to check C's progress in the performance of C's part of the new agreement and each time A does this, C assures A that work is progressing on The Property
    • During the one month new agreement period, A regularly reminds C of the specified date for completion of the work on The Property and C agrees that C understands this
    • Three days before C is due to complete the agreed work, A phones C to check the progress of C's work on A's property to and reminds C that there are only three days left for C to complete the work as per the new agreement
    • C assures A that the work is almost finished and that The Property is "97% ready" for A to sell
    • C tells A that C is actually at The Property as they speak and that C is "just finishing off the kitchen"
    • A tells C that A is very pleased to hear this as it means that A can now choose an estate agent to help A sell A's property
    • C’s tone of voice suddenly and C informs A that C's solicitor would be writing to A to tell A that C had an absolute right to decide how much A's property would be sold for
    • A, bewildered by C's sudden declaration, tells A that the amount The Property will sell for is determined by market demand, that The Property will sell for whatever a purchaser is prepared to pay for it
    • C tells A that C is "backing out" of their latest agreement and was "going back" to the previous, terminated agreement
    • A tells C that A consents to the termination of this latest agreement but will not agree to "going back" to any previous agreement as C had let A down once too often; that all agreements had been terminated as this one now was and that no more agreements would be made
    • A reminds C that The Property belongs solely to A, not to C and that C had only been allowed access to The Property to refurbish it
    • C’s language becomes very offensive and abusive and C tells A that The Property now belongs to C as C has the keys, is a rent paying tenant and that any monies already paid to B was rent
    • A tells C to leave The Property immediately, return the keys to A and send to A, a valid, truthful invoice for any work already performed
    • C refuses; laughs manically and shouts; “See you in court!” ending the call abruptly
    • A few days later A goes to the CAB for advice. They tell A that C sounds like a “control freak” and ask A if C is being treated for mental health problems. A does not know the answer. CAB advises A to see a solicitor asap
    • Two days after this, A receives a letter from C’s solicitor asserting C’s tenancy claim.
    • The letter from C’s solicitor also states that C is entitled to all proceeds above £x from the sale of The Property
    • The letter from C’s solicitor also states that A owes C £z for work C had allegedly done on The Property at least 16 years earlier before A divorced E. This allegation is wholly untrue and the first time such a claim has been made known to A

    • In response, A seeks legal advice.
    • In a letter to C’s solicitor, A’s solicitor refutes C’s claims and requests that The Property keys be provided to A immediately.
    • A’s solicitor points out that C has breached and revoked all agreements by C’s own admissions and was not entitled to rely on any agreement, nor does C have any cause for action
    • A’s confirms that A is prepared to offer C a payment as a goodwill gesture but in order to work out how much this should be, would need immediate, unrestricted access to The Property to have it valued and prepared for sale
    • There is no response to this letter
    • A’s solicitor writes again to C’s solicitor stating that due to the lack of progress, A had no alternative but to seek possession of The Property
    • A is advised to take a locksmith to The Property, obtain access and change the locks
    • A & B do this and whilst the locksmith works on the locks, A & B took internal photographs and video footage of The Property which not only has not been decorated, refurbished or improved in anyway; it is actually in a worse state than when they last saw it. All the fireplaces and bathroom fixtures and fittings have been dismantled and most of the kitchen fixtures and fittings removed and missing. The toilet pan is in the bath; the kitchen ceiling has a huge hole in it and appears to be collapsing.
    • The property has gone from being filthy with horribly décor to being uninhabitable. There is also miscellaneous rubbish everywhere
    • Valuation appointments are made with three estate agents, the first one scheduled for six days later
    • Two days later, B goes alone to The Property to clear up as much as possible before the first valuation appointment
    • Whilst B is waiting for the estate agent to arrive, C arrives at The Property and attempts to break in via the front door, Unable to break in, C shouts through the door, demanding that B let C in. B refuses
    • C then goes to the back of The Property and kicks the rear gate down, breaking it
    • B calls the police but when they arrive, they explain that as it is a civil matter there is little they can do but ask C to stay away. They ask B to call them again if C returns to The Property

    • Four days later B goes alone (A is unable to attend) to The Property for the first valuation appointment but the locks have been changed again
    • B decides to go to the local police station to report this and ask advice
    • At this point C phones A and threatens to kill B if either B or A goes near The Property again
    • A immediately notifies the police who say there is nothing they can do as the threat has been made through a third party
    • The police tell B that they can do nothing about the locks being changed again or B being prevented from accessing The Property as C has told them that C is the legal tenant and there is no reason to disbelieve C, despite B showing them documents and correspondence to demonstrate otherwise
    • C has also told the police that A owes C £y
    • A Land Registry B136 restriction notice addressed to A at The Property address is produced by C’s solicitor. A’s solicitor advises A that any objection to the LR notice would lead to a very expensive fight
    • This alarms A who assumes that A’s solicitor is advising A not to object. A’s solicitor later verbally advises A that any objection to the LR notice, is not important anyway as C has claimed that C is a residential tenant and that the restriction applied for therefore has little significance

    • At A’s request, A’s solicitor tells C’s solicitor to stop making compensation payments in lieu of rent
    • B asks A & B’s bank not to accept any deposits into their account from C
    • The bank explains that if C makes cash payments there is nothing they can do to stop this and if C continues to do this after being told not to, then C does so at C’s own risk anyway
    • The bank explains that if A & B should not attempt to return cash payments into their account to C because there is no way that A & B can be sure of the source anyway and there is always the possibility that they may not be made by C
    • A asks B to close their account and open a new one so that C would not know the new account number and be unable to continue to make compensation payments in lieu of rent. B refuses as they would lose the special terms of their account that they had become gained by virtue of the age of the account

    • A, via A’s solicitor and makes several offers to C in order to resolve the situation many of which would be more beneficial to C than all of the terminated agreements but C refuses to consider any of them
    • A & C’s father tries to mediate without success. He states that C was very abusive and out of control and that C had screamed that C’s only motive for C’s conduct about The Property was to “destroy” B because C does not like the way that B treats A
    • A & C’s father concludes that C is “crazy”
    • A’s solicitor then telephones A to say that he is regrettably withdrawing from the case as, following an off-the-record conversation with C’s solicitor, he fears for his family’s safety
    • A’s solicitor implies that C’s solicitor is also in fear of C
    • A, knowing that C has associated with local gangsters albeit without C coming to the attention of the police, asks A’s solicitor if C’s solicitor has “had a gun held to his head or something”? A’s solicitor replies, “something like that”


    • #3
      Part three


      • Under the circumstances, A feels reluctant to pay A’s outstanding legal fees. Following a discussion with the overseeing partner at the law firm of A’s solicitor, during which the off-the-record issue is not mentioned, A raises the topic of the Land Registry notice and queries the advice of A’s solicitor
      • The overseeing partner tells A that they should have not agreed to take the case on in the first place as “it is not our area”
      • A quotes the law firm’s Terms & Conditions but the overseeing partner just keeps repeating, “it is not our area”
      • The overseeing partner tells A that the firm is waiving the outstanding fees

      • In despair and fearful of C’s threats to kill B, A withdraws from the situation hoping that C will soon see sense and then the situation will be resolved
      • By this time, general fear of C by other family members together with C’s smear campaign against A & B and a general dislike of B, has alienated most of A’s family from A

      • A finds the situation so disturbing that A cannot discuss it without becoming very distressed
      • A verbally trusts The Property to F and G, A’s adult children from A’s marriage to E
      • The problem enters stalemate for 4 years (during which A & B move home and change their address twice) until A & B separate and later A divorces B.
      • Following their separation, A opens a new bank account in A’s sole name and tries to keep up the mortgage on The Property. B pays child support for H and J who are the non-adult children of A and B (and who live with A) but does not maintain A, who takes over all household bills
      • A knows via family members that C is aware of A’s circumstances
      • A had no access to A & B’s joint bank account and has never seen sight of any compensation payments in lieu of rent that C may have made
      • Since opening a bank account in A’s sole name, A has never received any compensation payments in lieu of rent from C or anyone else
      • A’s mortgage lender for The Property is brought up to date about the situation. The lender confirms that no third party payments towards A’s mortgage account have ever been made by a third party nor would they be accepted by a third party

      • A goes through all household documents and notifies all authorities of A’s new circumstances. As a result of this, A’s latest address is recorded on the Title Register by the Land Registry
      • Three weeks later, A receives another B136 notice from the Land Registry. This time, A immediately objects and at the same time objects to the previous notice
      • In A’s objection letter A offers willingness to involve a mediator to resolve the matter
      • Subsequently an offer is made by A to C via family members but this is refused by C
      • The objection to the latest application is accepted and the application (by C) is cancelled as C fails to substantiate C’s claim

      • After several months, A still has no financial order re A & B’s divorce, by now has an increasingly large divorce bill to pay and is struggling to keep up the mortgage payments on The Property
      • Also, before their separation, B had manipulated A into surrendering A’s endowment policies connected to The Property by promising to reinvest them for a higher return. B will not account for the proceeds which meant that A would be unable to pay the 100% capital amount repayable in the near future
      • A is under enormous stress due to the circumstances of the divorce and the nature of A & B’s relationship and after discussions with A’s solicitor, GP, counsellor, mortgage lender, other advisors and friends, it is obvious that dealing with the problem of The Property is too stressful for A on top of everything else and that it is apparent that in light of C’s past conduct, C would continue to prevent A from selling The Property
      • The general consensus is that the best thing to do would be to allow the mortgage lender to take possession of The Property and effectively sell it for A, as C would not be able to bully and threaten the mortgage lender. It is agreed that allowing the situation to continue otherwise is much more stressful and harmful to A’s health and wellbeing (which in turn affects H and J) than the resulting CCJ and six-year bad credit record

      • When the mortgage lender follows procedures and sends notice to The Property, C becomes aware of the impending repossession and approaches F about it
      • F, who is not easily cowed is fearful of A suffering further stress and agrees to act as mediator but C repeatedly harasses and attempts to intimidate F into agreeing a settlement that would enrich C but be unfair to F and G to whom A promised A’s interest in The Property
      • During F’s attempts to help resolve the situation, The Property is repossessed by the mortgage lender
      • A finds out the extent of C’s bullying of F and to protect F from further distress tells F to withdraw and refuse to negotiate anymore with C as, after a year of counselling and therapy, A now feels strong enough to stand up to C
      • A then receives a heavy-handed letter from C’s new solicitor who has clearly believed C’s lies
      • A cannot afford any more legal advice but is A’s income is slightly over the Legal Aid limit
      • The Property remains unsold

      I welcome and truly appreciate any comments/advice

      1. How can A be sued by C when C not only failed to perform C’s part of any of the agreements made, valid or invalid anyway, but has effectively prevented A from performing A’s part of any agreement? How can A be sued for something A has not done because A has been effectively denied the opportunity to do that which C is suing A for not doing ?
      If the conditions required to enable defendant to perform his obligations under a contract do not yet exist, how can claimant sue? Is this possible?

      2. As the first restriction - "No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court" - is still on the Title Register, does this effectively amount to a constructive/implied trust?

      3. What does this actually mean in plain English? (in words of less than one syllable!)
      "Stipulations in a contract, as to time or otherwise, which according to rules of equity are not deemed to be or to have become of the essence of the contract, are also construed and have effect at law in accordance with the same rules"

      4. If a claim to beneficial interest in property by constructive or implied trust is based on deceit and conduct following a terminated agreement i.e:
      a. Agreement made under duress – threats from claimant
      b. Agreement induced by false promise made by claimant
      c. Claimant failed to perform within agreement period
      d. Claimant subsequently prevented performance by defendant following agreement period[/I]
      how does the defendant defend this?
      Does he/she merely point out the invalid agreement(s) or do they need to detail events afterwards too?

      5. If existence of an alleged debt is disputed, can the limitation law be used anyway if the debt is denied? Does it only apply if there actually was a debt? How should a very old (at least 16 years) “debt” that never existed anyway be defended/disputed? Should the Limitation Act be used at all?

      Thank you for your time. I apologise again for the length of this


      • #4
        Does this beat the record for the longest ever posted question?
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...


        • #5
          Originally posted by theartfullodger View Post
          Does this beat the record for the longest ever posted question?

          Probably, The only sense I can make of it is that it uses a lot of the alphabet.

          However, on point 5, the statute of limitations should bar any action there.
          As for the rest of it, has this really been going on for sixteen years?
          I offer no guarantee that anything I say is correct. wysiwyg


          • #6
            I had a go at reading it - there are two many issues each intertwining some other issue and joined here there and everywhere.

            What it boils down to, all the personal conflicts evaded, is:-

            1. Is there a debt?
            2. Is that debt now legally enforceable?
            3. Has any payment actually been made which extends the six year limitation act?

            Even if 1 is true, I suspect because it has been going on 16 years and no-one has sued on it, and assuming that 3 is true, then under 2, there is not a debt that can be legally enforced.

            Obviously if the mortgagees repossess and sell, they will remit any balance to whoever is on the mortgage deed and no-one else.


            • #7
              Wow - I have read through all of that with a sort of macarbre interest.

              The story is so long and complex that it is, I'm afraid, pretty unsuitable for getting a reasonable answer on an internet forum.

              I am not a lawyer but would make the following overall points.

              Whole rafts of the story are going to be entirely irrelevant to the legal situation.

              I suggest that the more qualified members of the board might like to answer the questions at the foot of the post as these are largly factual questions independant of the story.

              The answer to question 1 is - C can sue for whatever he likes - that dosn't mean it has any merit and it may well get thrown out even before it gets to court.


              • #8
                Is it possible for you to go into more detail on the problem rather than the short summary?


                • #9
                  Jeffrey - I reckon this is one for you to get stuck into (or rather stuck on probably!!!!!)


                  • #10
                    I'm waiting for the sequel to find out what the rest of the alphabet do. My money is on the fact that at one point C throws a magic ring into a volcano.

                    Seriously though, lost the plot so can't advise.


                    • #11
                      By my computation, the answer is : the bald builder did it, in the scullery, with the loofah.

                      Seriously, I think this poster is having a laugh. He needs to pay for a consultation with a lawyer. It's a bit cheeky to expect people to plough through all this and answer it in detail. Unless Jeffrey is feeling exceptionally mellow when he next visits, I can imagine what his response will be!
                      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations


                      • #12
                        Originally posted by davidjohnbutton View Post
                        Jeffrey - I reckon this is one for you to get stuck into (or rather stuck on probably!)
                        Not a chance unless someone pays. Far too long. sorry.
                        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                        4. *- Contact info: click on my name (blue-highlight link).


                        • #13
                          I think it needs someone with a Phd in Algebra to answer.
                          I also post as Moderator2 when moderating


                          • #14
                            Legallysane: which one of the parties are you (or is it an examination question)?
                            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                            4. *- Contact info: click on my name (blue-highlight link).


                            • #15
                              Originally posted by jeffrey View Post
                              Not a chance unless someone pays. Far too long. sorry.
                              Same here, and I'm not even qualified


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