Strickson v Boyd

A court may find a constructive trust where the parties’ arrangement, viewed objectively, gives one party the beneficial interest and the other undertakes substantial obligations in reliance on it. Assumption of mortgage and life-insurance payments, together with care and support obligations, may constitute detriment. Relief may properly reflect the whole beneficial interest where it would be unconscionable to deny the claimant the benefit of the arrangement. A right-to-buy transaction is not thereby void merely because the property is later disposed of prematurely: the Housing Act 1985 provides a statutory recoupment mechanism for the discount.

The claimant, appointed receiver for her mother, sought possession of a council flat so that it could be sold to fund the mother’s residential care. The defendant, the claimant’s brother, had arranged with their mother that he would fund the discounted purchase of the flat, pay the mortgage and life-insurance premiums, care for her, and allow her to live there for life.

The Huddersfield County Court dismissed the possession claim, declared the defendant absolutely entitled to the beneficial interest subject to the agreed rights and obligations, ordered conveyance of the legal title, and made a costs order. The claimant sought permission to appeal, principally challenging the factual findings and the characterisation of the arrangement.

1. Application dismissed. There was no viable challenge to the judge’s findings of fact. Although the evidence could theoretically have supported a different construction, the findings actually made were reasonably open to him.
2. The judge was entitled to characterise the arrangement as a constructive trust under which the mother held the whole beneficial interest for the defendant. The defendant’s detriment included moving from rent-free occupation to responsibility for the mortgage and life-insurance premiums, as well as living with and caring for his mother. The court found no arguable error in the judge’s treatment of timing, unconscionability, or detrimental reliance.
3. The conclusion that it would be unconscionable to deny the defendant any relief, and that a 100 per cent beneficial interest was appropriate, was tenable on the facts. Nothing in Hussey v Palmer or Lloyds Bank v Rosset made that conclusion inappropriate.
4. The argument that the transaction was void as a fraud on the right to buy was not pursued. In any event, the Housing Act 1985 provided for recoupment by the local authority of part of the discount following premature disposal. That statutory consequence did not invalidate the arrangement.
5. Following the mother’s death, the claimant could obtain only reversal of the costs order, which would require judgment in her favour. The application was therefore dismissed, with no order as to costs.

• Court of Appeal (Civil Division): Permission/application to appeal from the Huddersfield County Court was dismissed.
• Huddersfield County Court: HHJ Finnerty dismissed the possession claim, declared the defendant’s beneficial entitlement, ordered conveyance of the legal title, and ordered the claimant to pay costs subject to a 75 per cent limitation.