⇒ It is important to note when considering constructive trusts in the present context to appreciate that the role it plays here does not tell us anythng about its functions in other areas of the law → the constructive trust is a term of no fixed abode and its meaning can differ in different contexts.

⇒ It order to claim an equitable interest in land under the rubric of a constructive trust, the essence of the matter is that the legal owner and the claimant (i.e. the person claiming an equitable interest in the land) must (expressly or impliedly) share a 'common intention' that the claimant should have some interest in the land. This common intention must have been relied on by the claimant to their detriment.

• In other words, it is effectively a trust that arises by operation of law where it would be unconscionable (i.e. unfair) for a person (A) who holds an asset to deny the beneficial interest of another person (B) in the asset.

⇒ Such constructive trusts do not need to be in, or evidenced in, writing (Law of Property Act 1925, section 53(2)).

⇒ See the cases of Pettit v Pettit [1970], Gissing v Gissing [1971], and Lloyds Bank v Rosset [1990].

⇒ More recent cases include Geary v Rankine [2012] and James v Thomas [2007].

⇒ Perhaps the most difficult issue is where the legal owner has responsibility for and meets all the mortgage payments, but is only in a position to do so because the other partner is meeting other household expenses, such as utility bills, maintenance, etc.

• In other words, can someone who contibuted to household expenses claim an equitable interest in the property they are supporting?

⇒ A strict application of Lord Bridge's approach in Lloyds Bank v Rosset [1990] would mean that such contributions are insufficient to establish a proprietary interest. In other words, contributing to household expenses would not be enough to establish a constructive trust.

⇒ However, the law remains unclear as to whether a non-owning party can establish a common intention constructive trust by financial contributions to the household economy (other than the mortgage payments).

⇒ Where there is express agreement, that will usually be determinative (Goodman v Gallant [1986]) i.e. if it expressly stated how people will share the beneficial (i.e. equitable) interest then that will usually be determinative.

⇒ The contribution approach

• Previous case law had meant where property is purchased in joint names and they both contribute to purchase price, the property is held to be owned in proportions approximating to each partner’s contribution (Walker v Hall [1984]).
• This approach was rejected by the court of appeal in Midland Bank v Cooke [1995] and later by the House of Lords in Stack v Dowden [2007].
• I.e. Where the non-owning party has established a common intention constructive trust by contribution to the purchase price or where joint tenants have made unequal financial contributions, the amount of the contribution is not determinative of the share (thus it does not operate in the same way as the resulting trust).

⇒ Whole course of dealings

• Midland Bank v Cooke [1995] → "the duty of the judge is to undertake a survey of the whole course of dealing" and not just "confine itself to the limited range of acts of direct contribution of the sort that are needed to found a beneficial interest in the first place"
• In Oxley v Hiscock [2004] → it was said that contribution to the purchase price did mean that the non-owning partner (i.e. the person who does not have a legal interest) had established a beneficial interest, BUT the extent of which remained had to be determined by what the court considered fair.

⇒ The courts, it appears, do not need much evidence of reliance and detriment to support a constructive trust of a shared home. Contributions to the household economy, in the form of payment of bills, maintenance etc. will suffice: Grant v Edwards [1986].

⇒ In the case of proprietary estoppel where the property at issue is not the shared home, the evidence of detriment may be examined more closely: Jennings v Rice [2002].

• In the case of a claim in proprietary estoppel, the detriment suffered will raise an equity, which will be satisfied by a remedy proportionate to the detriment. This will not necessarily be in the form of a proprietary interest (Jennings v Rice [2002]) i.e. it could be in the form of monetary damages.

⇒ Finding a common intention is often artificial as the reality is that people do not usually discuss these matters when property is acquired as they do not anticipate their relationship coming to an end.

⇒ Some other helpful legal resources on constructive trusts:

• Tubervilles Solicitors
• Uni Study Guide