Michael Parker v Thomas Parker-Bowyer & Ors

A common intention constructive trust may arise where the parties agree that a transfer of land is subject to a continuing beneficial interest, the claimant relies on that agreement, and suffers detriment. A Rochefoucauld-type constructive trust may arise without detriment where the transfer was made on the basis that the recipient would hold the property for another and it would be inequitable to rely on statutory formalities to deny that arrangement. The evidence must establish the agreement and the beneficial interest with certainty; constructive trusts of land should not rest on slender inferences. A prior document stating that the transferor has no further interest does not necessarily preclude a trust, particularly where it was not a relevant conveyance or declaration by the trustee.

Michael Parker claimed that his son, Thomas Parker-Bowyer, held a house on constructive trust for him following a transfer in November 2019. He alleged that the transfer was made to facilitate inheritance-tax planning and refinancing, while preserving his lifetime beneficial interest, control, use, responsibility for outgoings and ability to develop the property. Thomas denied any such agreement and maintained that the transfer was an outright gift.

The claimant also sought relief concerning chattels and alleged conversion. Thomas counterclaimed for an energy bill, an injunction and damages for trespass. The court determined the trust, energy-bill and trespass issues. The chattels claim remained to be disposed of proportionately.

1. Constructive trust. The court found that Mike and Tom agreed that the House would be transferred subject to conditions preserving Mike’s lifetime beneficial interest and control. The conditions included replacement financing in Tom’s name, Mike’s provision of income to service the loan and maintain the House, and Mike’s continuing responsibility for development, upkeep, use and income generation: [124], [140]-[142].
2. Common intention trust. The agreement, Mike’s reliance on it and his detriment established a common intention constructive trust. His detriment included being unable to dispose of the House or his former equity in it: [1986] Ch 638, applied at [144].
3. Rochefoucauld trust. Alternatively, a constructive trust arose because the transfer was made on the basis that Tom would hold the House for Mike during his lifetime. It would be inequitable for Tom to rely on the absence of writing to defeat the agreed interest. The evidence was substantial and convincing, and sufficiently certain: [145]-[146].
4. The statutory declaration stating that Mike had no further interest did not prevent the trust. It was not made by the trustee and was not a relevant conveyance containing an express declaration of beneficial interests: [143].
5. There was no binding agreement requiring Mike to pay the £24,000 energy bill. Alternatively, the pleadings and evidence did not establish a contractual basis, so that claim was dismissed: [147]-[150].
6. Mike was entitled to carry out the works serving Babs Park by reason of the constructive trust and its conditions. No trespass remedy therefore arose: [151]. Tom was declared to hold the House on trust for Mike on the terms found. The chattels claim was left for proportionate case management, with ADR encouraged: [152]-[154].