Can the creation of a common intention constructive trust be inferred from conduct alone?

In Morris v Morris ([2008] EWCA Civ 257) Mrs Morris argued that she was beneficially entitled to a share in the assets of the farming partnership business carried on by her husband and his mother. Mrs Morris’ claim was based on common intention constructive trust and proprietary estoppel. There was no express agreement between Mrs Morris, on the one hand, and her husband and mother-in-law on the other. She argued that, after Stack, the common intention constructive trust could be inferred from her conduct. The conduct that she relied upon was the fact that she did substantial unpaid work in her husband’s business. Mrs Morris also carried on her own, separate horse riding school at the farm. She invested money in the improvement of the land to accommodate this business. She relied on her work and the payment for these works as the basis for inferring the common intention constructive trust.

The English Court of Appeal unanimously held that Mrs Morris’ contributions were not evidence of a common intention to share beneficial ownership of the farming business and its assets. The financial contributions were explained by her desire to develop her own horse riding business. The lack of any express assurance was also fatal to the proprietary estoppel claim. The judgments in the Court of Appeal are significant because they stress that the courts are reluctant to infer a common intention from conduct alone ([23] Sir Peter Gibson and [36] May LJ). Sir Peter Gibson suggests (at [26]) that the common intention can only be inferred from conduct where the alleged agreement is the only explanation of the conduct. This must be too stringent a test; the true test must be whether the alleged agreement is the most likely explanation for the conduct.

Michael Lower

 

Advertisements

Tags: , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: