Manolete Partners PLC v Mukitur Rahman & Ors

In a sole-ownership case, equity follows the law unless the non-owner proves a different common intention, supported by detrimental reliance. Common intention may be express or inferred objectively from the parties’ words and conduct. The court must consider the whole course of dealing with the property, including financial and non-financial circumstances.

Detrimental reliance remains essential. It need not be financial, but it must be substantial. Marriage, homemaking, childcare and ordinary family work do not automatically amount to detriment. Unsupported assertions and unexplained financial records may fail to establish either a common intention or reliance.

The claimant, an assignee of claims arising from the liquidation of a company formerly controlled by the first defendant, held a judgment debt secured by charging orders over three properties registered in his sole name. It sought orders for sale.

The first defendant took no part. His wife claimed a 50 per cent beneficial interest in each property under common intention constructive trusts. She accepted that any such interest would not prevent sale and sought a nine-month postponement to purchase the claimant’s interest. The issues were whether the parties had the alleged common intentions and, if so, whether she had acted to her detriment in reliance on them.

1. The court held that the starting point in each case was sole beneficial ownership because the properties were legally owned by the first defendant. The wife therefore had to establish both a different common intention and detrimental reliance.

2. Common intention could be express or inferred objectively from words and conduct. The relevant inquiry was the parties’ whole course of conduct in relation to each property, including the purpose of acquisition, financing, financial arrangements and household contributions. The wife failed to prove a 50 per cent common intention for any property. Her evidence was unsupported, internally inconsistent and undermined by limited disclosure.

3. Detrimental reliance remained necessary even where an express agreement was alleged. It was not confined to financial expenditure, but had to be substantial and was assessed as part of the broader question whether repudiation would be unconscionable. The alleged payments towards 18 Dove Close were not shown to be contributions to its purchase. Homemaking, childcare, alleged restaurant work and household payments were either unsupported or insufficiently established.

4. Marriage itself was not shown to constitute detriment merely because it involved foregoing an opportunity to marry someone else. Nor did ordinary family work constitute detriment on the evidence.

5. Orders for sale were appropriate. The court would hear the parties on the timetable if they could not agree.