Posts Tagged ‘establishment’

Establishing a common intention constructive trust

June 16, 2016

In Fung Oi Ha v Fung Pui On ([2016] HKEC 1272, CFI) the title to a family home was in the father’s name. In 2005, the father assigned the home into the names of himself and his son as joint tenants. In 2011, the father and son assigned the home into the son’s sole name. The son gave no consideration for either of these assignments. One of the daughters brought proceedings seeking a declaration that she had a beneficial interest under a common intention constructive trust. There was no express agreement that she was to have an interest. The daughter relied on the fact that, since taking up employment, she had over many years given a large proportion of her salary to her mother and this money had been used to discharge the outgoings and expenses of the property. She had also  looked after the father since his first stroke in 2003. The daughter’s claim failed.

Recorder Lisa K Y Wong SC considered whether the common intention could be inferred. She commented on the difference in approach between Lord Bridge in Rosset (only contributions to purchase price or mortgage installments will do) and Fox LJ in Burns v Burns (any payments  referable to the acquisition of the house will do, including contributions to household expenses that allow the other party to meet the mortgage payments) (at [78]). In fact, the judge took a broader view: a holistic review of the whole course of dealing applying the factors identified by Baroness Hale in paragraph 69 of Stack v Dowden should be undertaken ([90] – [94]). This did not help the plaintiff, in this case:

‘Given the multifactorial nature of the question of intention, just as there are cases where the proof of financial contributions by one who is not the legal owner or in excess of one’s share of legal ownership may readily justify the inference of an intention to share beneficial ownership, there would conceivably be instances where the establishment of financial contributions does not support the inference of a common intention to share beneficial ownership. I am inclined to think that this present case is just such an instance.’ ([100]).

Context is relevant: this was not a claim by a spouse to a share in the matrimonial home ([101]):

‘The relationship with which I am concerned is that between parents and children in what appears to be a conventional Chinese family practising traditional family values … I daresay, in a lot of these cases, the parents (and probably the children too) would be taken aback if they be told that, even in the absence of an express agreement or understanding, the children’s contributions could be used to support the inference of an intention to share the beneficial interest of the parents’ property (which may be the parents’ only shelter in old age) if such contributions should happen to be applied toward the mortgage payments of the property.’ ([102]).

The plaintiff failed and was ordered to give up possession of the property to her brother.

Michael Lower