Drake v Whipp

A cohabitee’s beneficial interest in a home is governed by a constructive trust where the evidence establishes a common intention that the property be shared and the claimant acts to her detriment in reliance on it. The parties need not have agreed the precise proportions. Once that interest is established, the court may determine its extent broadly from the parties’ whole course of conduct. Direct purchase contributions, labour, household expenditure, joint accounts and the parties’ shared purpose may all be relevant. A resulting trust based on presumed intention is not the appropriate framework where actual common intention and detrimental reliance are established. Shares need not correspond mechanically to direct financial contributions.

Mrs Drake and Mr Whipp cohabited and bought a barn as their intended home. The legal title and conveyance were placed in Mr Whipp’s sole name. Mrs Drake contributed to the acquisition and conversion, and both parties contributed labour and household resources. After separation, she sought a declaration of a beneficial interest and an order for sale or payment.

At Halifax County Court, His Honour Judge Walker treated the arrangement as a resulting trust and awarded Mrs Drake 19.4%, calculated from the parties’ total expenditure. The Court of Appeal had to decide whether the evidence instead established a constructive trust and, if so, how the beneficial shares should be assessed.

1. Appeal allowed. The evidence established a common understanding that the property was being acquired as the parties’ shared home and that Mrs Drake was to have a beneficial interest. Her direct contribution and reliance were sufficient to engage the constructive trust doctrine.
2. A common intention as to the existence of a beneficial interest does not need to specify the parties’ exact shares. The court relied on the principles stated in Gissing v Gissing [1971] AC 886 and the guidance in Lloyds Bank plc v Rosset [1991] 1 AC 107. The argument that the parties had to agree their precise proportions was rejected.
3. The resulting trust analysis advanced at trial was inappropriate once a common intention to share beneficially and detrimental reliance had been established. The court therefore declined to determine the appeal on the footing that shares depended only on purchase-price contributions.
4. In assessing the quantum of a constructive-trust interest, the court may adopt a broad-brush approach and consider the parties’ entire course of conduct. Relevant matters included the direct financial contributions, their shared purpose in acquiring the property as a home, their respective labour in converting it, the joint account and its funding, Mrs Drake’s payment of food and household expenses, and her housekeeping. The court considered the guidance in Grant v Edwards [1986] Ch.638, and the examples of non-proportionate shares in Eves v Eves [1975] 1 WLR 1338.
5. Applying that approach, Mrs Drake’s fair share was one third. Mr Whipp was declared trustee for himself and Mrs Drake in the proportions of two thirds and one third. Unless he paid £75,000, the property was to be sold. The formal order allowed the appeal with costs here and below, directed legal aid taxation, and provided for interest at 8 per cent from 19 April 1994. A first tranche of £43,000 was to be paid within six weeks, with the balance and interest payable three months later.

1. Court of Appeal (Civil Division) — In [1995] EWCA Civ 25, the appeal was allowed. The beneficial shares were varied to one third for Mrs Drake and two thirds for Mr Whipp.
2. Halifax County Court — His Honour Judge Walker treated the property as subject to a resulting trust and awarded Mrs Drake a 19.4% interest based on total expenditure.