Constructive trust

WHEN A MARRIAGE ends in divorce the marital property is shared up between the spouses according to the law and based on precedents. Even if the name of one party were not on the title to a property the court would award a share.

The question is how should property be shared when the parties are unmarried. They do not have the law that married couples have on their side. Nonetheless, if the party who has no paper title could show bills and a tangible contribution to the building of a house, he or she may be awarded a share by way of a trust.

This is often done by applying a constructive trust, or resulting trust. A constructive trust is created and deemed to exist where property is vested in someone in circumstances where the law considers that it is inequitable for him to assert full ownership over it (Halsbury’s Laws of England 4th ED.

Vol. 48 at para. 585.), while a resulting trust is created by operation of law and is deemed to exist where an intention to create the trust was expressed, but not effected, or where someone places the trust property in another person’s name without a clear expression of intent that he is to hold it in trust for that person. (Halsbuy’s Laws of England para 599)

The party who has no paper title to the property in issue will have the task of proving to the court that he or she made a contribution to the purchase of the property. It is especially essential for that person to have bills and other documents to show that he or she contributed financially, or has actually contributed personally in the building of the house. For example, carrying building material to the site, mixing cement or some other undertaking.

In such a situation the applicant would approach the court for a declaration that the legal and equitable estate in the property is held in trust. This is instructive in the case of Patterson and Frederick v Spencer (SVGHCV2013/ 0062). In that matter the subject property was registered jointly in the claimants name and the defendant claimed that she contributed to the construction of the dwelling house.

The other party denied, claiming that he and his daughter held a legal and equitable estate in the property. The learned judge, Henry, J., stated that the “determination of this issue involves consideration of the factual reality surrounding the acquisition of the subject land and construction of the dwelling house.

According to the claimants, the defendant had no share in the property and as expected the defendant maintained that she had an interest. There were no bills to show expenses and it was a matter of whom the judge believed.

The first claimant and the defendant had at some point in time a common- law relationship and she claimed that she had at some point contributed financially and with actual construction of the house by taking material and passing concrete.

Anyone wishing to establish a beneficial interest to property through a constructive or resulting trust must demonstrate that there was, (1) a clear agreement or declaration that the party owns a beneficial interest in property, (2) provide a part of the purchase price, or (3) show that the parties had a common intention that she would own an interest in the property [Burns v Burns (1984) 1 All E.R.244 a 250]. On a balance, the judge gave both parties credit for making significant contributions to acquisition of the first house in issue. Their efforts collaboratively completed the house because they needed somewhere to live. Hence the property was held in trust and the defendant held a one tenth share.

● Ada Johnson is a solicitor and barrister-at-law. E-mail address is: exploringthelaw@yahoo.com