Ritesh Surana & Anor v Ruchi Surana

Claims concerning title to immovable property in England are ordinarily governed by English law and fall within the jurisdiction of the English courts. In deciding whether England is the appropriate forum, the court must consider the jurisdictional gateway, whether there is a serious issue to be tried, and the interests of justice, including the location of the property, evidence, parties, governing law, enforcement and any risk of irreconcilable judgments.

A common intention constructive trust may arise where the parties expressly agree that property is registered in one person’s name for the benefit of others and those others rely on the agreement, including by contributing to the purchase price. The beneficial shares are assessed by reference to the whole course of dealing. An account of profits remains discretionary where it could interfere with related foreign proceedings.

The claim concerned a property in Hounslow bought in 2007 in the defendant’s name and subject to a mortgage in her name. The claimants alleged that it had been agreed that the defendant would hold the property for them because they could not obtain a mortgage themselves. They sought declarations of equal beneficial ownership and accounts of rental profits.

All parties were Indian nationals resident in India. Related divorce and property proceedings were pending in India, and the defendant did not attend the English trial. The court therefore had to determine whether service was valid, whether England was the appropriate forum, which law governed the property and whether the alleged constructive trust and accounting claims were established.

1. Service and jurisdiction. The defendant had received and acted on the proceedings, had instructed English solicitors, had participated in earlier stages and had been given further opportunities to participate. The court retrospectively authorised service by post and email under CPR 6.15. The practical effectiveness of service justified that order.
2. Forum and governing law. The claim satisfied the relevant property and constructive-trust gateways in Practice Direction 6B. There was a serious issue to be tried. England was clearly and distinctly the appropriate forum. The property was immovable land in England, the relevant transaction and evidence were substantially connected with England, English law governed the dispute under the lex situs principle, and any judgment would require enforcement in England. The Indian proceedings did not seek a declaration determining ownership of the English property, so there was no material risk of irreconcilable judgments.
3. Constructive trust. The parties had agreed that the property and mortgage would be placed in the defendant’s name solely because the claimants could not obtain a mortgage. The claimants would manage the property and receive its benefits. Their financial contributions to the deposit and expenses constituted detrimental reliance. This satisfied the requirements of a common intention constructive trust, including on the more restrictive approach described in Lloyds Bank v Rosset.
4. Beneficial shares. The whole course of dealing showed that the claimants were the real beneficial owners. The defendant’s later conduct, including receiving rent while seeking to surrender her interest, supported the conclusion that she had no beneficial share. A declaration was therefore made that she held the property on bare trust for the claimants in equal 50% shares.
5. Accounts. The defendant was ordered to account to Mr Shetty for his share of the rental profits. No account was ordered in favour of Mr Surana because that discretionary remedy could interfere with the ongoing Indian maintenance and financial proceedings. Mr Surana could rely on the English findings in India.