Land Law Essay Help: Express Bargain Constructive Trusts

Land Law Cases referred to in this section:
 Gissing v Gissing (1971) AC 886
Stokes v Anderson (1991) 1 FLR 391
Springette v Defoe (1992) 2 FLR 388 at 394H
Eves v Eves (1975) 1 WLR 1338
Hammond v Mitchell (1991) 1 WLR 1127
Chan Pui Chan v Leung Kam Ho (2003) 1 FLR 23
Grant v Edwards (1986) Ch 638
Savill v Goodall (1993) 1 FLR 755
Oxley v Hiscock (2004) 3 WLR 715

Express bargain constructive trusts are based on situations where the parties have reached an express bargain that one party will take a share in the beneficial ownership of the land. These trusts can be contrasted with implied bargain constructive trusts, which are based on inferences drawn from conduct.

The express agreement must be supported by some change of position on the part of the party who stands to receive a share in the beneficial interest. An agreement which 'fails to provide for anything to be done' is 'merely a voluntary declaration of trust' and is 'unenforceable for want of writing' (Gissing v Gissing, supra). The party claiming a share must be able to adduce clear evidence that the parties have 'orally declared themselves in such a way as to make plain Stokes v Anderson (1991) 1 FLR 391 their common intention that the claimant should have a beneficial interest in the property' (). Such evidence must be based on actual discussions that took place, not simply on the fact that the parties were thinking along the same lines - 'our trust law does not allow property rights to be affected by telepathy' (Steyn LJ in Springette v Defoe (1992) 2 FLR 388 at 394H).

Where there is an EXPRESS BARGAIN constructive trust, the change of position required may be found not only in direct contruibutions to the purchase price of the property but also in indirect contributions to the family expenditure such as domestic work, child rearing and contribution to the joint household expenses. Established cases where there was an indirect contribution include physical labour towards a renovation project (Eves v Eves (1975) 1 WLR 1338) and participation in commercial activities initiated or undertaken by the party's partner (Hammond v Mitchell (1991) 1 WLR 1127). It is still not clear exactly what will and will not count as a change of position but it is clear that the scope is quite wide and may include instances of self-imposed disadvantage, such as in Chan Pui Chan v Leung Kam Ho (2003) 1 FLR 23, involving one party giving up their political career.

Where there is an express agreement is in place, the requirement of referability between the conduct and agreement is presumed. In Grant v Edwards (1986) Ch 638, the man paid for the mortgage contributions, whereas the woman paid for the household expenditure. Without the woman's contribution, the man would have 'insufficient to keep up the mortgage payments' and her payments were 'essentially linked to the payment of the mortgage instalments'. The court found an inference that the woman would not have made such payments 'were it not for her belief that she had an interest in the house'.

Note however that there are two issues to consider in any constructive trust question - first whether the trust exists and second, what portion of the property the receiving party is entitled to. Where there is an express agreement as to the portion, no further investigation is necessary (Savill v Goodall (1993) 1 FLR 755). Where however the express agreement between the parties failed to define the size of the shares, the court must discover what is 'fair having regard to the whole course of dealing between [the parties] in relation to the property' (Oxley v Hiscock (2004) 3 WLR 715). Note that the shares awarded may be disproportionate to the actual contribution made by the claimant to the acquisition of property.

See also...
Proprietary Estoppel
Promissory Estoppel
Implied Trusts
Resulting Trusts
Constructive Trusts
Implied Bargain Constructive Trusts

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