Nigel Fox & Anor v Marcus Nathan Bent & Ors

A common intention constructive trust may arise for the benefit of a minor where the relevant agreement is made by an adult acting on the minor’s behalf. The minor need not have participated personally in forming the common intention or in acting in reliance on it.

Detrimental reliance remains essential. It must be the beneficiary’s detriment, but it may occur through an agent, parent or representative acting on the beneficiary’s behalf. An appellate court should not interfere with findings of fact or evaluative findings of detriment unless the decision is unsupported by the evidence, unreasonable, plainly wrong or vitiated by an identifiable flaw in reasoning.

The appellants were trustees in bankruptcy of Marcus Bent. They appealed against an order of Insolvency and Companies Court Judge Jones dated 13 July 2023, which declared that a Surrey property registered in Mr Bent’s name was held on constructive trust for his daughter, Aliyah Bent.

The property had been purchased in 2006 after Mr Bent and Kelly Clark separated. The trial judge found that Mr Bent and Ms Clark had agreed that Mr Bent would purchase the property and hold it for their daughter, with Ms Clark acting on her daughter’s behalf. The property was consequently excluded from the bankrupt estate.

Permission had been granted on grounds concerning detrimental reliance. Permission was renewed on a factual ground, and an amendment was sought concerning the capacity of a minor to participate in a common intention. The central issues were whether agency could satisfy the requirements of common intention and detrimental reliance, and whether the trial judge’s factual and evaluative findings could be disturbed.

1. Outcome. The application for permission to appeal on the factual ground was refused. The amendment application was allowed. The appeal on the remaining grounds was dismissed.
2. Minor beneficiary and common intention. A common intention constructive trust can arise where the agreement is made between two adults of full capacity and one adult acts on behalf of a minor who is intended to benefit. The minor is treated as party to the agreement through that agency. The reasoning in De Bruyne v De Bruyne was distinguishable because the children in that case were not represented in the relevant transaction.
3. Detrimental reliance. Detrimental reliance must be that of the person claiming the beneficial interest. However, a minor may rely through a parent or other agent acting on the minor’s behalf. The trial judge had found that Ms Clark acted for Aliyah when agreeing the arrangement, accepting it and changing their living and financial position in reliance on it.
4. Evaluation of detriment. The trial judge was entitled to find substantial detriment by considering the settlement of Aliyah’s housing rights, the abandonment of alternative financial provision, and the life and housing decisions made in reliance on the agreement. Benefits received through occupation of the property and financial provision did not eliminate the finding of detriment. The balancing exercise was one for the trial judge.
5. Appellate restraint. An appeal court must not retry factual or evaluative issues. It may interfere only where the finding is unsupported by the evidence, one which no reasonable judge could have reached, unreasonable, plainly wrong, or affected by an identifiable flaw such as a gap in logic, inconsistency or failure to consider a material factor.
6. The property therefore remained held on trust for Aliyah and did not form part of Mr Bent’s bankruptcy estate.

• High Court, Chancery Appeals. On 20 August 2024, Mr Justice Edwin Johnson refused permission to appeal on the factual ground, allowed the amendment application, and dismissed the appeal on the remaining grounds.
• Insolvency and Companies Court. Insolvency and Companies Court Judge Jones ordered on 13 July 2023 that the property was held on constructive trust for Aliyah Bent and dismissed the trustees’ claim for possession and sale.