Author - Fong Ka Kei
Introduction
The question addressed here is whether the need to show detrimental reliance in making a common intention constructive trust claim is a significant problem in family home cases. What is detrimental reliance in this context? What role does it play? Does the detrimental reliance requirement give rise to any difficulties?
What is detrimental reliance?
Detrimental reliance is concerned with the issue of reasonable expectation (Nourse LJ in Grant v Edwards). Conduct is detrimental if it is “conduct on which [the claimant] could not reasonably have been expected to embark unless she was to have an interest in the house”. Detrimental reliance can be in the form of both financial contributions and the devotion of onerous labour to a joint venture ( Chan Pui Chun v Leung Kam Ho, [2002] BPIR 723).
Role of detrimental reliance in common intention constructive trust claims
Detrimental reliance is required in acquiring beneficial interests in property by way of a common intention constructive trust. For a constructive trust to arise, apart from the initial intention to share the equitable entitlement in their property (Grant v Edwards), evidence must show that the common intention has been detrimentally relied on. (Lloyds Bank v Rosset). Detrimental reliance involves some “change of position” by the claimant (Burns v Burns).
Problem 1: Ambiguity of the detrimental reliance test
The detrimental reliance test is ambiguous, rendering criticism of the concept “almost impossible” (A Lawson, ‘The Things We Do for Love: Detrimental Reliance in the Family Home’ (1996) 16 Legal Studies 218).
The problem with the test in family home cases is that an objective approach may leave limited room for individual differences. It may also reinforce traditional stereotypes and lead to somewhat arbitrary determinations by the court. There can be a gap between the judicial notion of detrimental reliance and the parties’ own perceptions of their behaviour and motives, (A Lawson, ‘The Things We Do for Love: Detrimental Reliance in the Family Home’ (1996) 16 Legal Studies 218).
Nourse LJ, in Grant v Edwards, notes that “although the common intention has been made plain, everything else remains a matter of inference”. Female claimants who wish to acquire beneficial interests in the property must demonstrate that they “did much more than most women would do” (Cooke v Head, [1972] 1 W.L.R. 518 at 519) and not something regarded by the judges as “the most natural thing in the world for any wife” (Lloyds Bank v Rosset).
This ambiguity has harshly denied many long-serving mothers and homemakers of their beneficial entitlement. Think, for example, of the wife in Burns v Burns who bore and reared two children by her partner contributed financially and provided household services to the family home. Intriguingly, women are not reasonably expected to demolish or construct buildings (Eves v Eves) or to repair the property (Cooke v Head).
Problem 2: What is the causal link between detrimental reliance and the acquisition of an interest in property
It is unclear as to how closely the detriment has to be causally linked to the common intention to share the property.
Lord Hope of Craighead in Green v Green at [12] noted such requirement:
“There must be a sufficient link between the common intention and the conduct which is relied upon to show that the claimant has acted on the common intention to [her] detriment.”
In other words, the claimant needs to show that her change of position was “referable to” the earlier bargain or agreement on which beneficial entitlement is relied upon (Chan Pui Chun v Leung Kam Ho). In order for a constructive trust claim to succeed, the claimant must have been “induced” by the owner to act to his or her detriment (Gissing v Gissing, at 905G-H). Eves v Eves provides that some link has to be established, but it remains unclear how close the link has to be.
The lack of clarity was recognised by Browne-Wilkinson VC in Grant v Edwards. The causal link requirement may lead to the “failure of innumerable trust claims” by throwing “almost insuperable obstacles in the way of those who had failed to clarify at a sufficiently conscious mental level the motivations and implications of their day-to-day actions” (Gray, Kevin J., and Susan Francis. Gray. Elements of Land Law, (5 th ed), (Oxford, 2009) at 887).
For example, beneficial interest claims in family property have been rejected on the ground that the claimant carried out her work “because she was part of the family” (Phillip Lowe (Chinese Restaurant) Ltd v Sau Man Lee, an unreported decision of the English Court of Appeal). Intensive efforts to ensure the completion of the work of renovation of the family home were not detrimental reliance because the female claimant was only “extremely anxious that the new matrimonial home should be ready for occupation” (Lloyds Bank v Rosset).
Detrimental reliance remains significant
Despite the problems just mentioned, detrimental reliance remains critical in constituting a common intention constructive trust in family home cases, as it justifies the intervention of equity.
First, the need for detrimental reliance is closely consonant with the equitable maxim that equity will not assist a volunteer (Austin v Keele, (1987) 10 NSWLR 283). In addition, the claimants’ detrimental reliance can be seen as “acting upon” an agreement which attaches an equity to the same and warrants imposing a constructive trust as justice and good conscience require it (Hussey v Palmer).
Conclusion
Detrimental reliance is a crucial and judicially recognised element in constituting a common intention trust. Nonetheless, the above evaluation illustrates how problems arise in family home cases due to its inherent ambiguity and the lack of clarity as to the nature of the requisite causal link between the common intention and detriment. These problems may lead to unfair and inconsistent results.