Does Land Law enforce inequality? A discussion on Lloyds Bank PLC v Rosset.
The law always has always been subject to criticisms, some culminating in reform, some remaining merely academic opinion. Members of the judiciary when hearing cases, note pitfalls in the law and through their power to create common law, endeavour to rectify mistakes and errors. The rules on constructive trusts are no exception to this matter. The law was vague, until the judgement handed down by Lord Bridge in Lloyds Bank PLC v Rosset created the acquisition test. The test was established in a relatively modern time, yet has been subject to claims that it is inextricably sexist and commercial and thus excludes nonpropertied partners.
Constructive trusts and the acquisition test.
Constructive trusts confer on a party a proprietary interest, even though they do not hold the legal title. The courts were faced in the Rosset case with the question of whether, in the absence of an express agreement, Mrs. Rosset’s domestic contributions, were satisfactory to conclude a common intention was present. The court held against Mrs. Rosset and laid out the acquisition test, stating that to establish a constructive trust in property, the person seeking to show an interest must establish that prior to acquisition there was a mutual agreement for common ownership. Direct contributions to the purchase price by the person seeking to show a benefit should be adduced as evidence, and it is highly doubtful whether less will do. The test meant that despite her domestic contributions, Mrs. Rosset held no interest in the property. Subject to this outcome, a vast amount of criticism has arisen claiming the decision excludes women and is inappropriately commercial in a family setting.
The criticisms.
Feminist legal scholars argue that the test not only excludes nonpropertied partners, but due to the link between the sexual division of labour and women’s economic position, those partners are mainly female. Many studies have concurred that the familial division of labour places women in the home setting, thus they are excluded from the labour force and this affects their ability to acquire property. Even when women are economically active, sociologists have deduced that they take part in more ‘emotion work’ such as nursing, which is of a lower pay. It could be argued that Lord Bridge’s test is a prime example of the law enforcing inequality, leading to the conclusion that ‘a woman’s place is often in the home, but if she stays there, she will acquire no interest in it.’ (J Eekelaar) Is this however still the case? Young and Willmott found a transition towards a ‘symmetrical family,’ where women and men share equal roles, and if this is the case, it could be argued that women no longer suffer economically to such a degree as in the past. And if so, Lord Bridge’s test would have no bearing on excluding primarily women. The Office for National Statistics found in 2013 that the percentage of women ages 16 to 64 in employment had increased from 53% in 1971 to 67% whereas the percentage of men had fallen to 76% from 92%. However, the World Bank Gender Data Portal found that women in most countries earn only 60 to 75% of mens wages, thus we can see how despite women’s increased employment, they would still earn less and be excluded from purchasing property, supporting the argument that Lord Bridge’s test is sexist.
Leading on from this argument is the criticism that the test ‘reveals the inextricable solid tug of money,’ (Lord Woodhouse, Hoffman v Hoffman) and simply paints a commercial gloss over a family dispute, so excludes those who may not be able to contribute towards the purchase price. Prioritising money in this way has been seen in law as widely inappropriate and the Law Commission
agreed that the law established was ‘not ideally suited to the typical informality of those sharing a home.’ The alternative is to follow parties’ subjective intentions and ignore monetary contributions which has been noted as ‘inappropriate, since the relationship between the parties is not one in which they would deal with each other by organised thinking,’(Gardner) and it is indeed true, that many parties are not thinking of their requisite shares when they decide to share a home.
The subsequent cases- Is Rosset and its criticism still relevant?
Stack v Dowden demonstrates a shift from consideration of purely monetary contributions and thus a deviation away from Lord Bridge’s test and its criticism. Lady Hale held that when analysing a share of beneficial interest, a judge must look at the entire course of conduct, not simply direct financial contributions. She also laid out a number of other factors for consideration, which reduced the commercial element of Lord Bridge’s test via the consideration of the more domestic elements that led to acquisition. However, despite being heard after the ruling in Stack v Dowden, the judge in Thomson v Humphrey noted the need to revert back to Lord Bridge’s test.
Varying attempts made to reduce the exclusion of non propertied partners, and the commercial gloss of Lord Bridge’s test has indeed been tackled by the Supreme Court justices, yet it remains that the position currently held is unclear. Cases are still being distinguished from Stack and despite the criticism, the acquisition test from Rosset is still being followed. It must therefore be summarised, that a clear Supreme Court case is needed to clarify the law and remove all vagaries. For the time being, lower courts must struggle applying the varying criteria with lengthy and costly trials pursuant till an appeal is successfully made as high as the Supreme Court. Even when a case reaches that level, it remains to be seen whether the justices will make any successful progress, as when Jones v Kernott came to the court, they merely affirmed Stack v Dowden, despite prevalent confusion and following of Rosset.