General Principle:
The Court of Appeal gives an unusual judicial support of the necessity and breadth of detrimental reliance in establishing a constructive trust in sole ownership cases.
Name:
O’Neill v Holland [2020] EWCA Civ 1583
Facts:
Between 2000 and 2012, Ms. O'Neill resided at 53 Worsley Road in Bolton with her unmarried boyfriend, Mr. Holland, and their kids for 12 years. O'Neill's father gave Holland the house's registered legal ownership in 2008 in exchange for nothing. The transfer was initially supposed to go into the couple's shared names. But once O'Neill believed his fabrication that she couldn't obtain a mortgage, Holland became the only owner. O'Neill left the home in 2012 when the couple's relationship ended. On the grounds that the property had been bought to serve as a family home for her and her family, her claim to a half share in 53 Worsley Road under a common purpose constructive trust was successful at first instance. Holland was successful in her appeal because it was determined that O'Neill had overlooked her actions that had been detrimental to her.
Ratio:
The necessity for and existence of detriment prompted a second appeal to the Court of Appeal. After reviewing the authorities (at [27-37]), Henderson LJ (with whom David Richards and Nugee LJJ agreed) concluded that detrimental reliance was clearly established as an essential legal ingredient of successful claims to acquire a beneficial interest under a common intention constructive trust in sole ownership cases - despite the fact that it had not been in issue in leading cases such as Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53. The court held that O'Neill's adverse reliance should be established objectively and may be found in the judge's factual findings. It existed as a result of (at [69]): her agreement to the property being transferred into Mr Holland's sole name, when the previous intention had been for a transfer into joint names; and the primary factor that caused Ms O'Neill to give her consent was Mr Holland's false representation that (in effect) he would otherwise be unable to obtain a mortgage. In this sense, even though O'Neill's loss was not immediately pecuniary, she had missed an opportunity to acquire a property interest.
Application:
The current law In O’Neill v Holland [2020] EWCA Civ 1583 the Court of Appeal offers an interesting judicial endorsement of the importance and scope of detrimental reliance in establishing a constructive trust in sole ownership cases.
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