Common intention constructive trust again

Where title to property is in the name of A and B claims a beneficial interest under a common intention constructive trust then there must either be express agreement coupled with an appropriate form of detrimental reliance or (if there is no express agreement) then there must be direct contributions to payment of the purchase price (either at the time of acquisition or by paying mortgage installments).

In Lloyds Bank plc v Rosset ([1991] 1 AC 107, HL) a husband bought property to be the matrimonial home. He provided the purchase price. He borrowed money from the bank to fund renovation works. The wife made no contribution to the purchase price or to the mortgage installments. The marriage broke down. The husband did not keep up with the mortgage repayments and the bank sought to enforce the mortgage. The wife claimed that she had a beneficial interest under a common intention constructive trust. The claim failed because there was no evidence of an express agreement that she should have a share. So even if there had been detrimental reliance by her there would still be no constructive trust. In any event, she had not done enough to show detrimental reliance.

Lord Bridge of Harwich emphasised that where title to property is in the name of A and B claims a beneficial interest under a common intention constructive trust then there must either be express agreement coupled with an appropriate form of detrimental reliance or (if there is no express agreement) then there must be direct contributions to payment of the purchase price (either at the time of acquisition or by paying mortgage installments). The express agreement must usually have been reached before the date of acquisition of the property.

Michael Lower

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