Judgment
At first instance, the Judge rejected Geary's claim. She appealed.
The Court of Appeal dismissed the appeal, [1] holding that the legal title was solely in Rankine's name and so the burden of establishing a constructive trust was on Geary. The relevant question was whether there was a common intention for Geary to have a beneficial interest in the property, applying Jones v Kernott [2011] UKSC 53, which must be determined objectively from the parties' conduct. Geary had shown there was a common intention to run the business together, but it was not correct to therefore reach a conclusion of a common intention that the property in which the business was run, bought by only one of them, would if so belong to both of them. The judge at first instance had not erred in probing the evidence and concluding there was no constructive trust.
Lewison LJ's summative paragraph reads:
22. What Mrs Geary was saying was that the common intention was that she and Mr Rankine would run the business together, but in my judgment it is an impermissible leap to go from a common intention that the parties would run a business together to a conclusion that it was their common intention that the property in which the business was run, and which was bought entirely with money provided by one of them, would belong to both of them. In addition, Mrs Geary's own evidence makes it clear to my mind that Mr Rankine had no intention that she should have an interest in the property itself. First, as I have said, her evidence was, as was his, that he would refuse to recognise her unless she got divorced. She did not get divorced until 2002, some six years after the acquisition. That refusal to recognise her is in my judgment inconsistent with an intention on his part that she should have a beneficial interest in the property. I might add that his given reason, namely that he feared that her husband might make a claim on the property, is a perfectly rational reason even if it might not have been given effect. Second, Mrs Geary's evidence was that as the years went by she asked what security she had for her and her son and that Mr Rankine either said the business should remain in his sole name or was non-committal. Those passages are also, in my judgment, inconsistent with an intention on Mr Rankine's part that Mrs Geary should have a beneficial interest in the freehold of Castle View.
A constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts have mostly been used where people have left money in a will, or created family settlements, charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investment, especially in unit trusts and in pension trusts. Although people are generally free to set the terms of trusts in any way they like, there is a growing body of legislation to protect beneficiaries or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and Charities Act 2011.
Stack v Dowden [2007] UKHL 17 is a leading English property law case from the House of Lords case concerning the division of interests in family property after the breakdown of a cohabitation relationship.
Lloyds Bank plc v Rosset[1990] UKHL 14 is an English land law, trusts law and matrimonial law case. It specifically deals with the translation into money of physical contributions from a cohabitee or spouse, under which its principles have been largely superseded.
Gissing v Gissing [1970] UKHL 3 is an English land law and trust law case dealing with constructive trusts arising in relationships between married couple. It may no longer represent good law, since the decisions of Stack v Dowden and Jones v Kernott.
Re Rose[1952] EWCA Civ 4 is a case in English trusts law and English property law. It established that if a donor has done everything that can be expected of him to transfer legal title, but the transfer is delayed by the routine operation of the law then the gift is still effective. This is sometimes called the "Re Rose principle", or the "every effort rule".
Hussey v Palmer [1972] EWCA Civ 1 is an English trusts law case of the Court of Appeal. It concerned the equitable remedy of constructive trusts. It invokes the equitable maxim, "equity regards the substance and not the form."
Ladd v Marshall [1954] EWCA Civ 1 is an English Court of Appeal judgment, which established the criteria for the Court to accept fresh evidence in a case on which a judgement has already been delivered.
Constructive trusts in English law are a form of trust created by the English law courts primarily where the defendant has dealt with property in an "unconscionable manner"—but also in other circumstances. The property is held in "constructive trust" for the harmed party, obliging the defendant to look after it. The main factors that lead to a constructive trust are unconscionable dealings with property, profits from unlawful acts, and unauthorised profits by a fiduciary. Where the owner of a property deals with it in a way that denies or impedes the rights of some other person over that property, the courts may order that owner to hold it in constructive trust. Where someone profits from unlawful acts, such as murder, fraud, or bribery, these profits may also be held in constructive trust. The most common of these is bribery, which requires that the person be in a fiduciary office. Certain offices, such as those of trustee and company director, are always fiduciary offices. Courts may recognise others where the circumstances demand it. Where someone in a fiduciary office makes profits from their duties without the authorisation of that office's beneficiaries, a constructive trust may be imposed on those profits; there is a defence where the beneficiaries have authorised such profits. The justification here is that a person in such an office must avoid conflicts of interest, and be held to account should he fail to do so.
English land law is the law of real property in England and Wales. Because of its heavy historical and social significance, land is usually seen as the most important part of English property law. Ownership of land has its roots in the feudal system established by William the Conqueror after 1066, and with a gradually diminishing aristocratic presence, now sees a large number of owners playing in an active market for real estate.
Jones v Kernott [2011] UKSC 53 is a decision by the UK Supreme Court concerning the beneficial entitlement to a co-owned family home under a constructive trust. The court ruled there was a 90:10 split of ownership in favour of the main child-caring partner who contributed 80% of the equity to the home in which she lived. The non-resident partner had also ceased to pay bills and maintenance for the children for a considerable time.
Bristol & West Building Society v Henning [1985] EWCA Civ 6 is an English land law case that holds a person can consent to give up the right to an overriding interest in land, that will bind third parties, such as banks, that purchase a property. Although dealing with unregistered land, it is equally applicable in the case of registered land and now falls under the Land Registration Act 2002.
Hodgson v Marks[1971] EWCA Civ 8 is an English land law case concerning the right of a person with an equitable interest in a home to remain in actual occupation, even if a bank has a charge and is seeking repossession.
Eves v Eves [1975] EWCA Civ 3 is an English land law case, concerning constructive trusts of the family home.
Midland Bank plc v Cooke [1995] is an English land law case, concerning constructive trusts; and at first instance proven undue influence in law as to a secured business loan and later refinance.
Oxley v Hiscock[2004] EWCA 546 is a widely-reported English land law and family law case, concerning cohabitants' constructive trusts and their quantification in a home's equity value.
Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd[2011] EWCA Civ 347 is an English trusts law case, concerning constructive trusts. Sinclair was partially overruled in July 2014 by the UK Supreme Court in FHR European Ventures LLP v Cedar Capital Partners LLC.
Binions v Evans[1972] EWCA Civ 6 is an English land law and English trusts law case, concerning a constructive trust of land which will often be irrevocable whilst the occupier is in occupation as opposed to a licence to occupy — and/or a tenancy at will which is similar save that without transfer of the underlying property it can be revoked without cause. The case hinged on the fact there was an agreement specifying the existing occupier was to remain.
FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.
Byers v Saudi National Bank[2022] EWCA Civ 43 is a decision of the English Court of Appeal in the long running litigation between the liquidators of SAAD Investments Company Limited and various parties relating to the alleged defrauding of the insolvent company by one of its principals.
