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When will the court find a common intention and detrimental reliance in constructive trust cases? Emma Knight of 13 Old Square Chambers says the recent ruling in Curran v Collins is a reminder that claimants need to produce evidence capable of establishing detrimental reliance.
Curran v Collins  EWCA Civ 404,  All ER (D) 01 (May)
The parties’ relationship broke down and the defendant excluded the claimant from a residential property. He denied that she had any claim to any of the three properties in which they had spent time together. In each case, the defendant had bought the property in his sole name. He also denied that the claimant had a half share in a business. The claimant brought proceedings, claiming that there was an agreement or understanding that she should have a half share in the properties. Her claim was dismissed. The Court of Appeal, Civil Division, dismissed the claimant’s appeal on its facts.
What was the background to the case?
P and B were in a relationship for over 30 years, during which period they spent time together in various residential properties registered in the sole name of B (the properties) and lived together for eight years. A kennels business was run from one the properties (the business) and, from 1994, the parties bred Airedale terriers (the dogs).
In about 1986, B declined to register P as joint proprietor of one of the properties on the basis that it would be too expensive to have to pay for an additional life insurance policy (the excuse). In 1992, B made a will leaving his estate to P on his death (the will).
At trial, P’s claim for a share in the dogs was undisputed, however, B successfully defended P’s claim for a share in the properties and the business following the judge’s findings that:
What were the legal issues that the Court of Appeal had to decide in this appeal?
The overarching issue for the Court of Appeal to determine was whether the judge was right to conclude that there was no evidence of a common intention to share the properties, and that P had suffered no detriment such that her claim should fail. The grounds of appeal specifically required the court to consider whether the judge was wrong to:
Why did these issues arise?
In the context of common intention constructive trust cases, this case was unusual. The parties hadn’t lived together for much of the relationship and, in light of the judge’s findings that P had contributed nothing, financially or otherwise, to the properties, P’s claim rested on whether the excuse and/or the will constituted sufficient evidence of a common intention. At trial, the parties were agreed that, even if P successfully demonstrated a common intention, she had to overcome the additional hurdle of showing detrimental reliance. During the course of the appeal, P abandoned her attempt to argue that detrimental reliance was not a necessary ingredient of her claim. P raised the specific grounds of appeal outlined above in an attempt to undermine and overturn the judge’s findings that she had no interest in the properties or the business.
What were the main legal arguments put forward?
In the course of the appeal, no serious challenge was made to the legal principles upon which the case had been decided. The parties were agreed that, in order to establish a common intention constructive trust, P had to show a common intention and detrimental reliance. Accordingly, the legal arguments focused on each ground of the appeal.
What did the Court of Appeal decide, and why?
The Court of Appeal unanimously dismissed P’s appeal. Arden LJ methodically dealt with and dismissed each ground of P’s appeal. She found no basis for criticising the judge’s approach to the evidence and/or her findings of fact.
Lewison LJ reached the same conclusion by concentrating on the legal analysis underpinning the judge’s decision. He restated the need for P to establish both a common intention and detrimental reliance and referred to two earlier successful ‘specious excuse’ cases (namely Eves v Eves  1 WLR 1338,  3 All ER 768 and Grant v Edwards  Ch 638,  2 All ER 426). He distinguished them on the basis that, in those cases, the excuse:
To what extent is the judgment helpful in clarifying the law in this area? What practical lessons can those advising take away from the case?
The grounds of appeal were very specific to this case and so the importance of the decision in that regard is limited to underlining the court’s reluctance to go behind a trial judge’s assessment of the evidence and findings of fact.
The real significance of this case lies in Lewison LJ’s comments on the legal principles which were applied to this case. At first blush, the legal principles upon which this case was decided do not accord with the oft cited principles set out in Stack v Dowden  2 AC 432,  2 All ER 929 and Jones v Kernott  1 AC 776,  1 All ER 1265 (in which the words ‘detrimental reliance‘ do not even appear) and yet they were largely uncontested by the parties and endorsed by the Court of Appeal.
Grant v Edwards (which was cited but was not overruled by Stack v Dowden and Jones v Kernott) offers an explanation for this apparent anomaly—common intention and detrimental reliance are required in every common intention constructive trust case, but, very often, the evidence which gives rise to the inference of a common intention (such as financial contributions), will also demonstrate detrimental reliance such that the distinction between the two elements becomes unimportant. In a case such as the instant case, where there is said to be direct evidence of the common intention (the excuse) which does not, in and of itself, demonstrate detrimental reliance, there needs to be separate evidence of this in order to show that it would be unconscionable to deny the beneficial interest asserted.
Accordingly, this case serves as a useful reminder that, in, admittedly rare, cases of this nature, claimants will need to be careful not to overlook the need to produce evidence capable of establishing detrimental reliance.
Interviewed by Nicola Laver.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
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