Common intention constructive trust

Where title is in the sole name of one person (such as a husband) another person (such as his wife) can only claim a beneficial interest in the property where this was the common intention of the parties.

In Gissing v Gissing ([1971] AC 886, HL) title to the matrimonial home was in the husband’s name. He paid all of the deposit and mortgage installments and there was no evidence that the wife contributed to other household expenses. She paid for her own clothes and those of her son. Husband and wife had separate bank accounts and savings. When he left the matrimonial home, the husband told his wife that the property was hers. She claimed that she was beneficially entitled to one half of the interest in the home. The House of Lords rejected her claim. There was no evidence of a common intention that she should have a beneficial interest in the property.

Lord Diplock’s judgment pointed out that where title is in the name of one spouse the other can only claim a beneficial entitlement by showing that this was their common intention at the time of acquisition. This can be proved by express agreement or by subsequent words or conduct that suggest that there was an earlier agreement. Exceptionally, the original intention that only one person should own the home might have been replaced by a later agreement that each party was to have a beneficial entitlement.

This common intention needs to be made enforceable by some contribution made by the person whose name is not on the title. The common intention is only binding on the holder of the legal title if the other person has made some contribution to the purchase price or mortgage installments or (Lords Reid and Diplock thought) a material contribution to the household economy. Otherwise the declaration of trust will be unenforceable because of a failure to record it in writing.

If the person with no legal title can surmount this hurdle then the size of the beneficial interest has to be decided. Again, express agreement would be relevant. Failing that, it may be possible to infer the intention from the subsequent words or conduct of the parties. If that doesn’t settle matters then the principle that equality is equity might be invoked. There need not have been any common intention as to the size of their respective beneficial interests. Their intention may have been to leave this to be determined in the light of overall contributions over the course of the relationship.

Lord Diplock accepted that the idea of an imputed intention that he had raised in Pettitt did not represent the law.

Michael Lower

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