Introduction:
Co-habitees who separate have traditionally not been afforded the same level of legal protection as divorcing couples. However, recent decisions have made significant steps towards restoring the balance, in particular where co-habitees had settled in long-term relationships.
Whilst Oxley v Hiscock offers a welcome clarification of the development of the law concerning constructive trusts, it also highlights the difficulties in calculating the size of beneficial shares with any certainty in the lack of express discussion between the parties. In following Oxley, the court is now obliged to consider what is “fair” having regard to the whole course of conduct between the parties.
What this case did not do however was to broaden the conditions in which a common intention constructive trust arises. This explanation of the Oxley case has been affirmed in Lightfoot v Lightfoot-Brown by the Court of Appeal where Arden L.J held that “it is in my judgment quite clear that Chadwick L.J did not dispense with the requirement for communication of the common intention when determining whether a common intention constructive trust had arisen. Indeed, the concept of communication of common intention has much in common with the manifestation of intention. An intention to share a beneficial interest in property has to be manifested to give rise to a rival obligation.”
With respect to the first question which the courts must pose to determine whether or not a common intention constructive trusts has arisen, Oxley has changed nothing. The importance of Oxley lies with the secondary question of the extent of the interest once the constructive tryst is established, and it is in this respect only that Chadwick L.J held it unnecessary for the need of communication between the parties – “referring to the decision of Nourse L.J in Stokes v Anderson, Chadwick L.J held that the court may well have to supply the answer to that secondary question by inference from the parties’ subsequent conduct”.
Oxley v Hiscock concerned an unmarried couple who had both, although unequally, contributed to the purchase of the property. Over the years, both Mrs. Oxley and Mr. Hiscock contributed to the maintenance of the property in the belief that they each had a beneficial interest. The judge at first instance concluded that although there had been no express agreement as such, the parties had an intention to share the benefit and burden jointly and equally which meant that each should be entitled to a half share in the proceeds of sale. Mr. Oxley appealed on the grounds of Springette v Defoe. Here, there had been no discussion between the parties as to the extent of the beneficial shares at the time of purchase and so the presumption of a resulting trust had not been displaced. On this basis, he claimed that he was entitled to a share in proportion to his original contribution. The Court of appeal questioned its approach in Springette v Defoe, where it was held that to claim a share of a particular size under constructive trust, the claimant has to prove an express common intention that her share should be of that size. This ruling was however out of line with other authority, most notably Gissing v Gissing, Grant v Edwards, Stokes v Anderson, Midland Bank v Cooke and Drake v Whipp – in these cases it was decided that quantum can be proved by not only express discussion but also by inference from “the whole course of dealing between the parties relevant to their ownership and occupation of the property and their sharing of its burdens and advantages”. The Court of Appeal held that in case such as this one, where there is no express declaration of trust, two questions must be referred to. The first “is there evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial interest in the property?” If this question is answered in the affirmative, then the party who does not become the legal owner will be held to have acted to his or her detriment in making a financial contribution to the purchase in reliance on the common intention. The second is “what is the extent of the parties’ respective beneficial interests in the property?” In cases such as Oxley v Hiscock, where there is no actual evidence of any discussion between the parties as to the amount of the beneficial share which each was to have, each party should be entitled to that share which the Court considers fair having regard to the whole course of dealings between them in relation to the property. Here the Court considered that the whole course of dealing should include “the arrangements to meet all the outgoings (including housekeeping, insurance and utilities as well as mortgage contributions and repairs), taking the step which courts had previously been reluctant to take”.
