Eves v Eves

A constructive trust may arise although the claimant made no financial contribution to the purchase price. It is sufficient that the legal owner led the claimant to believe that she would have a beneficial interest and that, under an express or inferred arrangement, she materially acted to her detriment in improving the property.

An assurance alone is an unenforceable voluntary declaration of trust. Equity can give effect to the arrangement where the claimant's labour was contributed in reliance on the promised interest. The extent of the beneficial interest depends on the arrangement and the circumstances; it need not be one half.

The claimant and defendant cohabited, had children and jointly selected a house. The defendant bought it in his sole name after telling the claimant that it would have been bought in joint names but for her age. That explanation was untrue.

After the purchase, the claimant undertook substantial work to repair the dilapidated house and garden. When the relationship ended, she claimed a beneficial interest. The Vice-Chancellor dismissed the claim, holding that no sufficient link had been proved between the earlier arrangement and her subsequent work.

The claimant appealed. The central issue was whether the defendant's assurance and the claimant's labour supported an inferred arrangement giving her a beneficial interest.

1. The appeal was allowed unanimously. The defendant held the legal estate on trust for sale, beneficially as to one quarter for the claimant and three quarters for himself.

2. Brightman J, whose reasoning Browne LJ expressly accepted, treated Gissing v. Gissing [1971] AC 886 as the correct approach. A representation that a person will have an interest in land does not, standing alone, create an enforceable beneficial interest. It is no more than a voluntary declaration of trust lacking the required writing.

3. However, equity could give effect to an arrangement, express or implied, under which the claimant was to contribute labour towards repairing a home in which she was to have a beneficial interest. The defendant's false explanation for sole ownership supported the inference that she was intended to have a proprietary interest. The scale and nature of her work made it proper to infer that it was done under that arrangement and in reliance on that interest.

4. Lord Denning MR also regarded the circumstances as making it inequitable for the defendant to deny any share. Browne LJ agreed that the necessary link between the assurance and the claimant's activities should be inferred.

5. The court inferred a quarter interest rather than a half interest. The detailed administration of that interest was left for further application. Brightman J indicated that a sale should ordinarily be postponed while the defendant maintained the mortgage and met the children’s maintenance obligations.

• Court of Appeal: Allowed the claimant's appeal and substituted a declaration that the defendant held the property for the parties in shares of one quarter and three quarters. Leave to appeal to the House of Lords was refused.
• High Court (Vice-Chancellor): On 10 April 1974, dismissed the claimant's claim to a beneficial interest.
• County Court: The proceedings began in the county court but were removed because the value of the property was outside that court's jurisdiction.