WC: 3750 SRN: 1910249
Module: LH Equity, Trusts, Wills & Formalities
Student Number: 1910249
Word count: 3750
Question 2:
In Stack v Dowden [2007] UKHL 17, Lord Neuberger favoured the ‘resulting trust solution’.
In light of the problematic ways in which common intention constructive trusts law has
developed, Lord Neuberger’s approach would, at least, have produced consistency and
certainty in the law.
With reference to relevant law and academic opinion, to what extent do you agree with this
statement?
,WC: 3750 SRN: 1910249
As cohabiting couples are increasingly becoming part of society1, the development of
common intention constructive trusts (CICT) law to clarify common law’s principal method2
of redistributing the beneficial ownership of property upon relationship breakdown is
fundamental. The requirements for establishing a CICT have developed since its effective
origins3 in the decisions of Pettit v Pettit4 and Gissing v Gissing5, departing from the
operation of other equitable interventions - requiring either express intention with detrimental
reliance6 to trigger an institutional constructive trust 7, or financial contributions to the
property acquisition or mortgage8, similar to a resulting trust9 (RT) – to a more flexible
approach. Following the decision in Stack v Dowden10, the CICT is now premised upon
finding a common intention based either on parties’ evidence of express discussions11, or
inferred or imputed12 from their whole course of conduct. Lord Neuberger criticised the use
of imputed intention in determining the allocation of the parties’ beneficial interests as being
wrong in principle13, requiring the judge to engage in an uncertain exercise in construing a
hypothetical intention. Yet, the difference between inferring and imputing a common
intention is insignificant in practice considering that neither reflects the actual subjective
1
Law Commission, Sharing Homes (Law Com No 278, 2002), para 1.21
2
Simon Gardner, ‘Rethinking Family Property’ [1993] 109 LQR 263, 263
3
Graham Virgo, The Principles of Equity & Trusts (4th edn, OUP 2020), 303
4
[1970] AC 777
5
[1971] AC 886
6
Lloyds Bank v Rosset [1990] UKHL 14, [1991] 1 AC 107
7
Virgo (n3), p. 317
8
Rosset (n 6)
9
Brian Sloan, “Keeping up with the Jones case: establishing constructive trusts in ‘sole legal owner’
scenarios” [2015] 35(2) Legal Studies 226, 229
10
[2007] UKHL 17, [2007] AC 432
11
Lord Bridge in Lloyds Bank plc v Rosset [1991] 1 AC 107, 132
12
Stack (n10), [60] per Baroness Hale
13
Ibid, [105]-[107] per Lord Neuberger
, WC: 3750 SRN: 1910249
intentions of parties. While Lord Neuberger favoured the RT solution in which non-financial
contributions cannot establish an interest in the property, this approach limited judicial
flexibility and risked injustice for non-money earners, particularly women14. On the other
hand, the wide scope for inferring intention from a non-exhaustive list of factors15 (“Hale-
factors”) along with imputed intention suggests the current CICT approach is a façade for the
backdoor introduction of a remedial constructive trust, allowing the court to distribute
property according to fairness. Despite Lady Hale’s obiter discussing expanding non-
financial contributions, direct financial contributions continue to be the determining factor in
cases16, demonstrating the inconsistency of the courts in applying the current CICT in
practice. Moreover, the insincere use of intention has led to uncertainty following the
extension of the CICT into the commercial realm17. In light of this criticism, this essay argues
that Lord Neuberger’s approach, in which imputed intention is prohibited and inferred
intention is restricted to financial contributions, would produce consistency and greater
certainty in the law in comparison to the CICT. However, the RT approach may be
inapplicable in society today due to being discriminatory18. Therefore, the most coherent
solution is that Parliament should be compelled to provide legislation for the division of
assets of cohabiting couples upon separation.
The foundation of the CICT
14
Simone Wong, ‘Property Rights for Home Sharers’ in Susan Scott-Hunt and Hilary Lim (eds)
Feminist Perspectives on Equity and Trusts (Taylor & Francis Group, 2001), 335
15
Stack (n10), [69] per Baroness Hale
16
Graham-York v York [2015] EWCA Civ 72, [2016] 1 FLR 407
17
Marr v Collie [2017] UKPC 17, [2018] AC 631
18
A Blackham, ‘The Presumption of Advancement: A Lingering Shadow in UK law’ (2015) Trusts
and Trustees, Vol 21, 1.
Module: LH Equity, Trusts, Wills & Formalities
Student Number: 1910249
Word count: 3750
Question 2:
In Stack v Dowden [2007] UKHL 17, Lord Neuberger favoured the ‘resulting trust solution’.
In light of the problematic ways in which common intention constructive trusts law has
developed, Lord Neuberger’s approach would, at least, have produced consistency and
certainty in the law.
With reference to relevant law and academic opinion, to what extent do you agree with this
statement?
,WC: 3750 SRN: 1910249
As cohabiting couples are increasingly becoming part of society1, the development of
common intention constructive trusts (CICT) law to clarify common law’s principal method2
of redistributing the beneficial ownership of property upon relationship breakdown is
fundamental. The requirements for establishing a CICT have developed since its effective
origins3 in the decisions of Pettit v Pettit4 and Gissing v Gissing5, departing from the
operation of other equitable interventions - requiring either express intention with detrimental
reliance6 to trigger an institutional constructive trust 7, or financial contributions to the
property acquisition or mortgage8, similar to a resulting trust9 (RT) – to a more flexible
approach. Following the decision in Stack v Dowden10, the CICT is now premised upon
finding a common intention based either on parties’ evidence of express discussions11, or
inferred or imputed12 from their whole course of conduct. Lord Neuberger criticised the use
of imputed intention in determining the allocation of the parties’ beneficial interests as being
wrong in principle13, requiring the judge to engage in an uncertain exercise in construing a
hypothetical intention. Yet, the difference between inferring and imputing a common
intention is insignificant in practice considering that neither reflects the actual subjective
1
Law Commission, Sharing Homes (Law Com No 278, 2002), para 1.21
2
Simon Gardner, ‘Rethinking Family Property’ [1993] 109 LQR 263, 263
3
Graham Virgo, The Principles of Equity & Trusts (4th edn, OUP 2020), 303
4
[1970] AC 777
5
[1971] AC 886
6
Lloyds Bank v Rosset [1990] UKHL 14, [1991] 1 AC 107
7
Virgo (n3), p. 317
8
Rosset (n 6)
9
Brian Sloan, “Keeping up with the Jones case: establishing constructive trusts in ‘sole legal owner’
scenarios” [2015] 35(2) Legal Studies 226, 229
10
[2007] UKHL 17, [2007] AC 432
11
Lord Bridge in Lloyds Bank plc v Rosset [1991] 1 AC 107, 132
12
Stack (n10), [60] per Baroness Hale
13
Ibid, [105]-[107] per Lord Neuberger
, WC: 3750 SRN: 1910249
intentions of parties. While Lord Neuberger favoured the RT solution in which non-financial
contributions cannot establish an interest in the property, this approach limited judicial
flexibility and risked injustice for non-money earners, particularly women14. On the other
hand, the wide scope for inferring intention from a non-exhaustive list of factors15 (“Hale-
factors”) along with imputed intention suggests the current CICT approach is a façade for the
backdoor introduction of a remedial constructive trust, allowing the court to distribute
property according to fairness. Despite Lady Hale’s obiter discussing expanding non-
financial contributions, direct financial contributions continue to be the determining factor in
cases16, demonstrating the inconsistency of the courts in applying the current CICT in
practice. Moreover, the insincere use of intention has led to uncertainty following the
extension of the CICT into the commercial realm17. In light of this criticism, this essay argues
that Lord Neuberger’s approach, in which imputed intention is prohibited and inferred
intention is restricted to financial contributions, would produce consistency and greater
certainty in the law in comparison to the CICT. However, the RT approach may be
inapplicable in society today due to being discriminatory18. Therefore, the most coherent
solution is that Parliament should be compelled to provide legislation for the division of
assets of cohabiting couples upon separation.
The foundation of the CICT
14
Simone Wong, ‘Property Rights for Home Sharers’ in Susan Scott-Hunt and Hilary Lim (eds)
Feminist Perspectives on Equity and Trusts (Taylor & Francis Group, 2001), 335
15
Stack (n10), [69] per Baroness Hale
16
Graham-York v York [2015] EWCA Civ 72, [2016] 1 FLR 407
17
Marr v Collie [2017] UKPC 17, [2018] AC 631
18
A Blackham, ‘The Presumption of Advancement: A Lingering Shadow in UK law’ (2015) Trusts
and Trustees, Vol 21, 1.
