The Law Relating to Constructive Trust

When a party makes some contribution toward the intrinsic value of property in circumstances where it can be implied that by doing so he would acquire some equitable interest in the property trust will be implied.&nbsp.This is the guiding principle behind the imposition of a constructive trust.

In Springette v Defoe, Lord Justice Dillion was of the opinion that ‘the common intention of the parties must, in my judgment, mean a shared intention communicated between them. It cannot mean an intention which each happened to have in his or her, own mind but had never communicated to the other.’

The Lords appeared to be divided on the issue of communication of intentions in Springette’s case. In fact, Lord Steyn indicated that in the absence of communication in respect of the vesting of any beneficial interest in the property in question was not conclusive. The court is required to look for evidence of that intention by reference to the corresponding contributions of the relevant parties.3 Moreover, Lord Justice Chadwick maintained that ‘the court must do its best to discover from the conduct of the parties whether any inference can reasonably be drawn as to the probable common understanding about the number of their respective shares upon which each must have acted in doing what each did.’4

An older case, Gissing v Gissing offers a comprehensive understanding of the nature of a constructive trust and the manner in which it will arise at law. The facts and circumstances of this case lend itself to the development of the law regarding intention and the interpretation of intention.

Gissing v Gissing was a case where the legal title to the matrimonial home was held in the husband’s name only. The court fell to decide whether or not the husband held the legal title as trustee for both himself and his wife. And if the court was satisfied with the fact that the husband was a trustee, how were the beneficial interest in that property, fall to be divided.&nbsp.&nbsp.