Common Intention Constructive Trust

A common intention constructive trust is the device the courts use to work out who owns the beneficial interest in a home when the legal title does not reflect the parties' real understanding, most often between unmarried cohabitants. The Supreme Court in Jones v Kernott explained that where a house is bought in joint names without an express declaration of trust, the case concerns 'the correct approach to calculating beneficial interests in property where the legal title to the property is held in joint names by an unmarried couple but there is no express statement of how it is to be shared.' The starting presumption in joint-names cases is that equity follows the law, so the parties hold as joint tenants in law and in equity unless that presumption is displaced.

The presumption of equal beneficial ownership can be displaced by showing 'that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change,' with that common intention 'to be deduced objectively from their conduct.' Where a home is instead bought in one party's sole name, the analysis starts from a different point: the non-owning claimant carries the burden of establishing 'some sort of implied trust, normally what is now termed a "common intention" constructive trust,' the very phrase used in the earlier House of Lords case of Lloyds Bank v Rosset [1991] 1 AC 107. The Supreme Court in Kernott noted that the divergence between the older authorities on this point — contrasting Gissing v Gissing [1971] AC 886 'with Lloyds Bank v Rosset [1991] 1 AC 107' — over whether courts may infer or must instead impute an intention has been one of the main sources of difficulty in this area of law, and that the couple's intentions can also be 'ambulatory,' changing over time as their circumstances change.