Lightfoot v Lightfoot-Brown

A common intention constructive trust requires a shared intention that property is to be shared beneficially. That intention may be express, even if imprecise, or inferred from conduct. It must be communicated or manifested between the parties, and the claimant must act to their detriment in reliance on it. Direct contributions to the purchase price or mortgage instalments may support the inference, corroborate intention, evidence reliance, or help quantify an interest. Payments alone do not create an equitable interest without a qualifying common intention. Oxley v Hiscock [2004] 3 All ER 703 did not remove the communication requirement for establishing a trust. An appellate court will not disturb findings based partly on oral evidence and credibility unless the trial judge was clearly wrong.

Mr Derek Lightfoot appealed from an order dated 16 April 2004 by Mr John Martin QC, sitting as a deputy High Court judge in the Chancery Division, dismissing his claim to a declaration that he held a 50 per cent beneficial interest in Mitchelswood Farm, registered in the name of his former wife, Mrs Lightfoot-Brown.

The property had been transferred to Mrs Lightfoot-Brown under a 1996 consent order. Mr Lightfoot relied on alleged discussions about restoring joint ownership, mortgage payments totalling approximately £65,000, and improvements to the property. He argued that the trial judge had applied an overly demanding test and had failed to apply Oxley v Hiscock [2004] 3 All ER 703. The central issue was whether a common intention constructive trust could be inferred from the parties’ conduct.

Lady Justice Arden delivered the leading judgment. Auld LJ and Wilson J agreed. The application to re-amend the grounds and the appeal were dismissed.

1. The claimant had to establish an agreement, arrangement or understanding that the property was to be shared beneficially. Under Lloyds Bank plc v Rosset [1991] AC 107, this could arise from express discussions, even if imprecise, or be inferred from conduct. Where there was no express discussion, direct contributions to the purchase price, including mortgage instalments, could readily support the inference. The expenditure had to be referrable to the acquisition, and the claimant had to act to their detriment in reliance on the common intention.
2. The common intention had to be communicated or manifested between the parties. Communication did not require express words. It could be established from words or conduct which reasonably manifested the relevant intention. Oxley v Hiscock [2004] 3 All ER 703 had not removed that requirement when determining whether a trust existed. It had addressed the absence of communication only in relation to the size of the parties’ respective beneficial shares. Direct contributions might establish that each party was to have some beneficial interest without necessarily fixing proportionate shares. The principle was consistent with Gissing v Gissing [1971] AC 886.
3. The trial judge had considered both express agreement and inference from conduct. His reference to Springette v Defoe [1992] 2 FLR 388 did not impose a requirement of express verbal communication. The regular payments were reasonably explained as connected with maintenance and Mr Lightfoot’s continued occupation. The £41,000 payment and the improvements were made in the expectation of remarriage, and there was no agreement that Mr Lightfoot would retain an interest if remarriage did not occur. The payments therefore did not establish a common intention constructive trust. Contributions could have several evidential functions, including those identified in Grant v Edwards [1986] Ch 638, but they did not themselves create an equitable interest.
4. Because the decision depended partly on oral evidence and credibility, the Court of Appeal would not interfere unless the judge was clearly wrong: Assiscurazioni Generali SpA v Arab Insurance Group (BSC) [2003] 1 WLR 577. The judge was entitled to reach his conclusion. The application was refused and the appeal was dismissed with costs summarily assessed.

• Court of Appeal (Civil Division): [2005] EWCA Civ 201. Application to re-amend the grounds refused; appeal dismissed with costs summarily assessed.
• High Court of Justice, Chancery Division: Order dated 16 April 2004 by Mr John Martin QC, sitting as a deputy judge, dismissing the claim for a declaration of beneficial ownership.