CONSTRUCTIVE TRUSTS
BASIC INTRODUCTION
⇒ 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].
OTHER CONTRIBUTIONS TO PROVE A CONSTRUCTIVE TRUST
⇒ 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).
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Bottom of Form
DIVISION OF THE PROPERTY
⇒ 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.
BASIC INTRODUCTION
⇒ 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].
OTHER CONTRIBUTIONS TO PROVE A CONSTRUCTIVE TRUST
⇒ 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).
Top of Form
Bottom of Form
DIVISION OF THE PROPERTY
⇒ 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.
