England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BOURNEMOUTH COUNTY COURT
Mr Recorder Stewart Patterson
Claim No: 7BH00195

		Royal Courts of Justice Strand, London, WC2A 2LL
		23/10/2008

Lord Justice Rimer :

1. This appeal by Julian Parris, the defendant to the claim, is against an order of 7 November 2007 made by Mr Recorder Stewart Patterson in Bournemouth County Court. The claimant, and respondent to the appeal, is Albert Williams. The dispute relates to the beneficial ownership of a flat in Hampshire. The Recorder made a declaration that Mr Parris held it on trust for Mr Williams absolutely and gave directions for its sale with vacant possession. He refused Mr Parris's application for permission to appeal but Sir John Chadwick granted limited permission on the papers on 20 February 2008; and Mr Parris, who was represented by Mr Glen, has sought to renew a further ground of appeal that Sir John refused.

A. The facts, the issue and the Recorder's conclusion

Preliminary

2. In the 1980s Mr Williams acquired control and became a director of Antelope Technical Applications Limited ("ATA") and later persuaded Mr Parris to join him there. Mr Parris acquired a shareholding in ATA equal to Mr Williams's and also became a director. ATA merged with Tridex Products Limited, the merged company becoming known as Antel Tridex Limited ("AT"). AT did not prove to be successful but in the meantime the friendship between Mr Williams, Mr Parris and their respective families had flourished.
3. In the 1990s Mr Williams ran into financial difficulties and on 23 September 1994 entered into an individual voluntary arrangement ("IVA") with his creditors.
4. In 1998 Mr Parris was living at Flat 3 Normandy Court, Warsash, Hampshire. Normandy Court is a small block of flats. He became friendly with Mr and Mrs Brookfield, who owned Flats 1 and 6. Those two flats were adjacent, had two kitchens and two front doors but no dividing wall and had been occupied as one flat. Flat 1 was a two-bedroom flat and was a little larger than Flat 6, a one-bedroom flat. Mr Parris was offered the opportunity of buying both Flats 1 and 6 and he discussed with Mr Williams the possibility that they could buy them together. His plan was that they could be separated into two self-contained flats, which would add value, and let. Mr Williams, however, was unable to contribute to the purchase or to borrow money on mortgage because he was still subject to the IVA, as Mr Parris knew.
5. Despite this last consideration, Mr Williams's case was that they agreed to proceed with the purchase of the flats as a joint venture. Mr Parris would buy them, but on the basis that Flat 6 would belong beneficially to him, Mr Williams, who intended to leave it to his granddaughter. His case was that the purchase of both flats was to be financed by a mortgage loan, with the mortgage instalments being paid by AT. Mr Parris's case, by contrast, was that once it was clear that Mr Williams could not contribute to the purchase, he went ahead on his own in buying the flats: Mr Williams was to have no interest in them.
6. Mr Parris did buy both flats in his own name. The issue at the trial was whether Mr Williams was beneficially entitled to Flat 6. Mr Parris denied he had any such interest, claiming to be the sole beneficial owner of both flats. The Recorder directed himself as follows:

"2. [Mr Williams] has to prove, on a balance of probabilities, that there was an agreement between the parties that the property in question [Flat 6] should be held by [Mr Parris] for the benefit of [Mr Williams]. Further, [Mr Williams] must show that, in pursuance of that agreement, he acted to his own detriment in a way which was substantial, not merely trivial."

7. In short, Mr Williams's case was that he was entitled to his claimed interest in Flat 6 under a common intention constructive trust.

The purchase of the flats

8. Mr Parris bought the two flats in 1998, with completion taking place on 16 September 1998. Each flat had a separate title number. On the advice of Mr Cooke, an independent financial adviser, different solicitors were used, and separate mortgage finance was raised, for each purchase. The price of Flat 1 was £64,000. Mr Parris used his credit card to pay the deposit of £1,000, and a mortgage loan of £62,137 was raised from Woolwich Plc. The balance payable on completion was £3,711.61. The price of Flat 6 was also £64,000, in respect of which a deposit of £1,000 was also paid (again by use of Mr Parris's credit card) and a mortgage loan of £57,960 was raised from Abbey National Plc. The balance payable on completion was £3,420. Each mortgage was for the purpose of residential occupation, not for a "buy to let". Abbey National made it clear that it expected a party wall between Flats 1 and 6 to be erected between the exchange of contracts and completion of the Flat 6 purchase. Woolwich also required Mr Parris's solicitors to notify it when the wall was reinstated before providing the funds for completion.

Events subsequent to the purchase

9. Despite the mortgagees' requirements, both purchases were completed without the party wall having been built. It was erected later although there was a dispute as to when. Mr Williams said it was erected shortly after completion. His case was that he paid half the cost of the work, decorated both flats from top to bottom, paid half the costs of other items necessary to set the flats up and paid the annual maintenance charge in respect of one of the flats. Save that Mr Parris admitted that Mr Williams did half a day's painting in the flats – which he said he did as a friend – he denied that Mr Williams made any other contribution to the setting up of or payment in respect of the flats. Mr Parris's case was that it was he who did and paid for everything. He said that following the purchases he moved into the two flats with his girlfriend, who also occupied them for a short while with her two children. He said, and the Recorder accepted this, that the dividing wall was built in April 1999, some seven months after completion of the purchases.
10. Following the building of the dividing wall, Mr Parris moved out of the flats and both were then let, the rent being used to pay the mortgage instalments on both flats and other outgoings. Mr Parris was alone responsible for arranging the lettings through agents, managing the lettings and for dealing (either in person or through contractors) with the cleaning of the flats between lets.
11. As to whether there was any agreement that Mr Williams should have an interest in one of the flats, the Recorder heard evidence going both ways. Mr Williams's evidence was that he and Mr Parris agreed at the outset that each was to have one flat. Mr Cooke, the financial adviser, gave evidence, and the Recorder accepted it, that Mr Parris told him that the flats were being bought in his, Mr Parris's, name because of Mr Williams's IVA but that each was to have a flat, which they had agreed on the basis of a handshake. Mr Williams's son-in-law, Mr Baker, and his wife also gave evidence that this was a joint venture, with the intention that Mr Williams's flat would ultimately go to their daughter. Because, however, of the Bakers' personal interest in the matter, the Recorder viewed their evidence with caution.
12. Mr Halliwell, a director of an electrical company, installed a new meter in Flat 1 and also said that the purchase was a joint one. He said Mr Williams was painting the new dividing wall when he arrived to do the work. His understanding was that Flat 1 was designated for Mr Parris. Mr Vass provided finance for vehicles owned by AT. His impression was that the flats were jointly owned by Mr Williams and Mr Parris. Mr Wheatcroft, an AT employee, carried items, including paint, to and from the flats; he said this was always at the behest of Mr Williams and his evidence was that it was common knowledge at AT that the flats were jointly owned. The Recorder accepted Mr Wheatcroft's evidence but said it amounted to little more than gossip and anyway appeared to have derived from Mr Williams.
13. By contrast, Donna Sinclair, Mr Parris's partner, supported Mr Parris's case that there was no agreement that Mr Williams should have an interest in either flat. Mr Northie, another AT director, gave evidence that he had never heard Mr Williams claiming to have an interest in them. Mr Dixon of Normandy Court Management Association, the management company of Normandy Court, confirmed that Mr Parris was the registered shareholder of three shares in the company and that the company's records showed Flats 1, 3 and 6 to be registered in his name: but that evidence was of course consistent with the trust arrangement that Mr Williams was asserting.
14. Having referred to this and certain other evidence, the Recorder turned to consider what, if any contributions, in cash or kind, Mr Williams had made to the purchase. This was relevant primarily to the question of whether he had acted to his detriment in reliance on the claimed agreement, but the Recorder also regarded it as relevant to whether there was an agreement between Mr Williams and Mr Parris in the first place.
15. As to the construction of the party wall in April 1999, Sean Green gave evidence that he did the work, and did so on Mr Parris's instructions, who also paid him, and he produced his invoice for £750. Mr Williams's evidence was that he paid his half of this in cash but this was a late addition to his case and the Recorder did not believe it. He found that Mr Parris paid for the new wall.
16. As for painting the flats, Mr Williams said that he spent three days painting both. Mr Parris, by contrast, said that Mr Williams spent just half a day painting them. The Recorder accepted that Mr Williams "by and large" decorated the flats and said it would have taken him "a lot longer than half a day" (which counsel appeared to agree amounted to a finding of two days' work). He regarded it as:

"32. … quite plausible that the parties were accepting that, while he [Mr Williams] could not contribute financially, he would contribute by carrying on this work. The work was not simply what might have been required to keep the property in good order as time went by; it was in order to set the property up as two flats."

17. Mr Halliwell's evidence was that he was told to invoice the parties separately for his electrical work and that whereas Mr Williams paid his invoice, Mr Parris did not pay his. By contrast, Mr Parris said that Mr Halliwell only did very little work and was not told to invoice separately: he was to be paid by a set off against rent he owed AT, from which he rented part of its factory. There was no paper evidence of any payment to Mr Halliwell. The Recorder found that the electrical works were not extensive and rejected the evidence that Mr Halliwell invoiced separately for them, also rejecting Mr Williams's evidence that he made any contribution to these costs.
18. In 2001 Heritage Property Maintenance Limited carried out work to Flats 1, 3 and 6. They sent Mr Parris their invoice for £1,118.60 on 22 October 2001. Mr Parris gave Mr Williams a copy with an accompanying document, the latter being an account of money spent by Mr Parris on behalf of Mr Williams. They included two tickets for football matches for which Mr Parris had paid and he wanted to be reimbursed. The document also said "Repairs. Heritage invoice enclosed. Need to speak about this one." That included work done by Heritage at Flat 6. The Recorder regarded that as evidence that Mr Williams had an interest in the flats and found unconvincing Mr Parris's explanation that the amount was going to be paid by setting off money owed to AT. Mr Williams wrote a note on the bottom reading either "Pay" or "Paid maintenance and 50% Heritage." Since the invoice related to three flats, the Recorder could not understand Mr Williams's reference to 50% (nor can I) but regarded this as genuine evidence of an intention to pay; and found that Mr Williams probably did pay half this invoice.
19. The note also referred to maintenance payments. The Recorder found that these were paid annually by Mr Parris in respect of Flats 1, 3 and 6 and that the annual charge for each flat during the years 2000 to 2004 was £420. Mr Parris's note included this: "Al [Mr Williams] £420. I paid in January 2002." Mr Parris made a maintenance charge payment in January 2002 of £1,260 (3 x £420). The Recorder asked why Mr Parris would have brought this to Mr Williams's attention unless with a view to his paying his share. Mr Williams proved, by the production of cheques and counterfoils, the payment of two sums of £420 in July and August 2004. Although these payments were only a week apart, the Recorder found that they were clearly maintenance payments. He further found that a cheque for £400 dated 28 December 2002, one drawn on Mrs Williams's account, was also for maintenance, the counterfoil recording it as "Maintenance flat in Warsash." He accepted that the £20 difference was explained by some small transaction between the parties. He found as a fact that "all the maintenance payments due from 2000 to 2003 are covered by payments appearing to be made by Mr Williams to Mr Parris."

The Recorder's conclusion and order

20. The Recorder's conclusion was as follows:

"43. I have reached the conclusion that in the happy atmosphere which prevailed in 1998 an informal agreement was reached between the parties that the flats should be purchased by Mr Parris on the basis that they would have an equal interest. This would take the form of each one having one flat in due course. The flats had separate numbers at the Land Registry and were separated within a year or so of the purchase. Mr Williams was hoping to pass his on to his granddaughter. He supplied what he could, labour to begin with, later some money, and undoubtedly maintenance charges. As relations soured, Mr Parris developed the view that Mr Williams was detrimental to the company, that he was spending money and not contributing, while drawing a salary and expenses. Mr Parris had to support the company out of his own money. He certainly took out a further loan, which is documented, to inject money into the company. This was charged against Flat 1, which was certainly his own flat. He began to think that Mr Williams had not contributed to the flats either, any more than he was contributing to the company, as he, Mr Parris, had full responsibility for them, financially and otherwise. He no doubt by this time resented the idea of Mr Williams benefiting from them. Hence, when Mr Williams wrote to him in 2005, having mentioned the matter at a meeting, first he ignored the matter and, later, refuted the claim, believing that without documentation it could not be substantiated. And anyway, he thought Mr Williams did not deserve to benefit from the flat. Perhaps he believed he was not entitled to.

44. As to the application of the law, first I have reached the conclusion that there was an agreement between the parties that Flat 6 should be held in trust for Mr Williams. Secondly, I do consider it unconscionable, having accepted Mr Williams' help in decoration, but, much more particularly, having received the maintenance payments year by year, thereby inducing Mr Williams to think that he did have an interest in the property, that he should now go back on the agreement.

45. Finally, I do not consider the contribution by way of work and maintenance payments made by Mr Williams to be trivial. It is sufficiently substantial to justify the claim.

46. As to proportionality, this has to be seen in light of the fact that Mr Parris was receiving the rents and, so far as can be ascertained, although no audit has been done of this, the rents actually covered the outgoings that he was making, so that he was not spending vast amounts of his own money on the properties, either for maintenance or mortgage payments."

21. By his order the Recorder declared that Mr Parris held Flat 6 on trust for Mr Williams absolutely and ordered a sale of it, giving directions for the sale. He directed the net proceeds, after payment of the costs of the sale and the discharge of the Abbey National mortgage, to be paid to Mr Williams. He ordered Mr Parris to pay Mr Williams's costs of the action. He refused permission to appeal.

B. The appeal

22. Sir John Chadwick gave Mr Parris a limited permission to appeal. He pointed out that the Recorder had found (paragraph 43) that the flats were purchased in 1998 on the basis that Mr Williams and Mr Parris would have an equal interest in the then undivided unit. He suggested that this would have justified a finding that each party was entitled to an equal beneficial share in each of the two flats after the unit was divided in 1999. But the Recorder in fact found that Mr Williams was entitled to the whole beneficial interest in Flat 6. Sir John was of the view that there was no evidence on which the Recorder could find that any agreement as to such a partition of the beneficial interests was made. He said the first sentence in paragraph 44 was not supported by any finding to that effect. He also pointed out that the Recorder did not couple the declaration as to Mr Williams's entitlement to Flat 6 with any requirement that he should acknowledge that he no longer had any interest in Flat 1. The outcome was that Sir John gave permission to Mr Parris to appeal so that he:

"… can seek either a declaration that [Mr Williams's] interest in Flat 6 is limited to a one half beneficial share (with the recognition that, on that basis, [Mr Williams] remains entitled to claim a one half beneficial share in Flat 1); or a declaration that the order as made should be varied to include a declaration that [Mr Williams] acknowledges that he has no beneficial interest in Flat 1."

23. When the appeal came before us, neither counsel was attracted by an outcome in which each party might end up with an equal beneficial interest in each flat. Whilst Mr Williams's pleaded case was that he was entitled to an equal beneficial interest in both flats, his case as opened to the Recorder was that he was entitled to Flat 6 absolutely, as the Recorder found. It was agreed between counsel that, if the Recorder was in principle right to uphold Mr Williams's claim, the claim should be satisfied by an order in the form he made; and it was recognised that it would follow that Flat 1 would belong beneficially exclusively to Mr Parris. We were therefore not troubled with arguments directed to the points that had concerned Sir John. The argument was instead directed to a renewal of Mr Parris's application for permission to appeal on ground 2 of his Appellant's Notice, upon which we had argument from both sides. At the end of the hearing, we gave permission to appeal and reserved our judgment on whether to allow or dismiss the appeal.
24. Mr Glen, for Mr Parris, does not challenge the Recorder's finding of fact that there was an agreement or understanding between the parties at the outset that they were (in effect) each to have a beneficial interest in one of the flats. But any such agreement or understanding was made against a background in which Mr Parris was going to, and did, buy both flats in his own name; and a bare oral promise to confer upon another a beneficial interest in land will not give rise to a trust because of the absence of writing sufficient to satisfy section 53(1) of the Law of Property Act 1925. Nor will such an agreement or understanding be enforceable in equity because equity will not assist a volunteer. Mr Glen accepted, however, that the absence of any such writing might not prevent Mr Williams from establishing an interest in Flat 6 by way of a common intention constructive trust (see section 53(2)). But he said that the facts found by the Recorder did not establish such a trust in this case.
25. The starting point for a consideration of whether any such constructive trust has arisen was, Mr Glen said, the principle expressed by Lord Diplock in Gissing v. Gissing [1971] AC 886, at 905B:

"A resulting, implied or constructive trust – and it is unnecessary for present purposes to distinguish between these three classes of trust – is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.

This is why it has been repeatedly said in the context of disputes between spouses as to their respective beneficial interests in the matrimonial home, that if at the time of its acquisition and transfer of the legal estate into the name of one or the other of them an express agreement has been made between them as to the way in which the beneficial interest shall be held, the court will give effect to it – notwithstanding the absence of any written declaration of trust. Strictly speaking this states the principle too widely, for if the agreement did not provide for anything to be done by the spouse in whom the legal estate was not to be vested, it would be a merely voluntary declaration of trust and unenforceable for want of writing. But in the express oral agreements contemplated by these dicta it has been assumed sub silentio that they provide for the spouse in whom the legal estate in the matrimonial home is not vested to do something to facilitate its acquisition, by contributing to the purchase price or to the deposit or to make some other material sacrifice by way of contribution to or economy in the general family expenditure. What the court gives effect to is the trust resulting or implied from the common intention expressed in the oral agreement between the spouses that if each acts in the manner provided for in the agreement the beneficial interests in the matrimonial home shall be held as they have agreed."

26. Gissing concerned a dispute as to proprietary rights between former spouses in relation to the former matrimonial home, but like principles apply to a case such as the present, in which there was an oral agreement between two friends that each should have an interest in the land being bought in the name of one of them. Mr Glen's point, however, was that for a constructive trust to arise in such a case it is essential that the party claiming the benefit of the trust should be able to show not merely that there was an agreement between him and the legal owner that he should have a beneficial interest, but also that he had acted under that agreement in the manner provided for in the agreement. That, he said, is what Lord Diplock said in the last quoted sentence; and Mr Glen referred us to Midland Bank Plc v. Dobson [1986] 1 FLR 171 by way of a decision of this court on that point. Mr Glen's point was that the evidence before the Recorder was that it was no part of the agreement or understanding between Mr Williams and Mr Parris that Mr Williams was expected or required to do anything. It followed that the acts that the Recorder found he had performed were not acts he was required to perform under the agreement and so their performance was ineffective to enable him to establish the claimed constructive trust.
27. I must refer to Dobson's case. Mr and Mrs Dobson lived in a house held by Mr Dobson and his mother as joint tenants. The house was bought in 1953 with the assistance of a mortgage loan which was repaid by 1970, all the repayments having been made by Mr Dobson. Mrs Dobson senior died in 1971, whereupon Mr Dobson became by survivorship the sole legal owner of the house. In 1979 he charged it to the bank to secure a loan. He defaulted and the bank sought possession. Mrs Dobson resisted the claim on the grounds that she had a beneficial interest to which the charge was subject and that her consent to the charge was given in circumstances in which it was not binding on her. The judge agreed with her on both grounds. The bank appealed to this court.
28. The judge had found as a fact that, from 1953, Mr and Mrs Dobson had a common intention that they should share whatever beneficial interest Mr Dobson had in the house. This court was not prepared to interfere with that finding, there being evidence to support it. But the court held that the mere fact that Mr and Mrs Dobson had this common intention was not by itself sufficient to give her the claimed beneficial interest: any such case was defeated by section 53(1) of the Law of Property Act 1925. Fox LJ said, at 175D, that:

"Something more was necessary, namely circumstances which brought into operation the saving provisions of s.53(2) and created a resulting, constructive or implied trust of the interest. That would only occur if the agreement between the parties was that Mrs Dobson was to do something to her detriment in pursuance of the agreement. Equity will act on the conscience of a trustee and compel him to give effect to the trust. That explains the reference by Viscount Dilhorne to 'breach of faith' [a reference to a passage in his speech in Gissing at [1971] AC 886, at 900, which I respectfully suggest may perhaps have read more into the passage than it justified]. But equity will not come to the aid of a mere volunteer.

In my opinion the existing law is stated in the speech of Lord Diplock in Gissing v. Gissing [1971] AC 886, at p. 905, as follows [and Fox LJ then cited the same passage that I have cited]. …

It is the same principle which is stated by Brightman J (with whom Browne LJ agreed) in Eves v. Eves [1975] 1 WLR 1338, where, after observing that the defendant clearly led the plaintiff to believe that she was to have some undefined interest in the property and her name was only omitted from the conveyance because of her age, he said at p. 1345:

'This, of course, is not enough by itself to create a beneficial interest in her favour; there would at best be a mere "voluntary declaration of trust" which would be "unenforceable for want of writing": per Lord Diplock in Gissing v. Gissing [1971] AC 886, 905.

If, however, it was part of the bargain between the parties, expressed or to be implied, that the plaintiff should contribute her labour towards the reparation of a house in which she was to have some beneficial interest, then I think that the arrangement becomes one to which the law can give effect.' "

29. Fox LJ then considered whether Mrs Dobson had "acted to her detriment by reason of the common intention as to joint ownership of" the house. She made no direct contribution to the purchase price, nor was there any agreement or understanding that she should. She did use part of her earnings for household expenses, including the purchase of domestic equipment, but it was not suggested that she did so in reliance upon any understanding as to joint ownership of the house. She also did some ordinary periodic decorating but Fox LJ saw no reason to suppose that was because of any arrangement that she would do so on account of a common intention as to joint ownership. It was the sort of work that members of a family do in a house. Fox LJ concluded, at 177E to F, that Mrs Dobson did not show:

"… that she was induced to act to her detriment upon the basis of a common intention of ownership of the house or that there was otherwise any nexus between the acquisition of the property and something provided or foregone by Mrs Dobson."

The result was that he held that the judge had been wrong to find that she had a beneficial interest in the house. Hollis J and O'Connor LJ agreed with him.

30. Mr Glen's submission was, therefore, that absent some express agreement at the time of the formation of the common intention as to what it was that Mr Williams was to do in order to earn his beneficial interest, his claim to have acquired such an interest must fail. It mattered not that he might in fact, as the Recorder held, have acted to his detriment in reliance on the agreement. Unless he did what he did pursuant to the express terms of that agreement, his case must fail. We were referred to the transcript of Mr Williams's cross-examination, and I need only say that apart from confirming that he and Mr Parris agreed to go ahead together with the purchase, on the basis that the flats would be converted into two and he would have one flat and Mr Parris the other, Mr Williams disclaimed that at that stage there was any agreement to the effect that he was to make either a financial or any other contribution towards the acquisition of the flats. All that appears to have been agreed was that Mr Parris would go ahead and arrange for the finance to purchase the flats.
31. Mr Dubbery, for Mr Williams, advanced a succinct response to this submission. The Recorder found that Mr Williams painted the flats, as well as making the various payments I have described in respect of them, that he did so in reliance on the original agreement and that what he did amounted to detrimental reliance sufficiently substantial to entitle him to enforce his claim to a beneficial entitlement to Flat 6. He accordingly found Mr Williams's claim established in accordance with the direction he gave himself in paragraph 2 of his judgment (quoted in paragraph [6] above), despite the absence of any finding that the original agreement amounted to the making of any sort of bargain providing for the doing of anything by Mr Williams. Mr Dubbery's submission was that the Recorder directed himself entirely correctly and that Mr Glen's narrow submission as to what needs to be proved in an express agreement case of the present sort is wrong. Mr Dubbery said that his submission was supported by the decision of the House of Lords in Lloyds Bank Plc v. Rosset and Another [1991] 1 AC 107.
32. In my judgment Mr Dubbery is correct. I recognise that the second quoted paragraph from Lord Diplock's speech in Gissing, the passage that Fox LJ quoted in Dobson from Brightman J's judgment in Eves and also Fox LJ's own quoted observations in Dobson may be read as lending support to Mr Glen's submission. But the discussion of this topic in subsequent authorities, both in this court and in Rosset in the House of Lords, points compellingly away from the notion that the applicable principle is as narrowly circumscribed as Mr Glen submitted. On the contrary, it supports the way in which the Recorder identified the relevant principle.
33. I refer first to Grant v. Edwards [1986] Ch 638, a decision of this court in which both Gissing and Dobson were cited. It was a case in which, like Eves (and this case), there was an express common intention that the plaintiff was to have at least some proprietary interest in the property, although it was not bought in her name (see 649A and E, per Nourse LJ). There was no suggestion (any more than there was in Eves or in this case) that at the time of the expression of the common intention the plaintiff agreed to do anything in exchange for her interest. There was, therefore, no bargain between the parties. In such a case, in order for the plaintiff to make good her claim to a beneficial interest, Nourse LJ said, at 647C to D:

"Here the court does not have to look for conduct from which the intention can be inferred, but only for conduct which amounts to an acting upon it by the claimant."

34. In that context Nourse LJ referred to Eves. He quoted the same passage from Brightman J's judgment as Fox LJ had quoted in Dobson. The plaintiff in Eves had failed to establish her interest at the trial, but her appeal was allowed by this court. Nourse LJ's explanation of that decision is inconsistent with any notion that an express bargain must be proved at the time of the expression of the common intention. He said, at 648E:

"About that case the following observation may be made. First, as Brightman J himself observed, if the work had not been done the common intention would not have been enough. Secondly, if the common intention had not been orally made plain, the work would not have been conduct from which it could be inferred. That, I think, is the effect of the actual decision in Pettit v. Pettit [1970] AC 777. Thirdly, and on the other hand, the work was conduct which amounted to an acting upon the common intention by the woman.

It seems therefore, on the authorities as they stand, that a distinction is to be made between conduct from which the common intention can be inferred on the one hand and conduct which amounts to an acting upon it on the other. There remains this difficult question: what is the quality of conduct required for the latter purpose? The difficulty is caused, I think because although the common intention has been made plain, everything else remains a matter of inference. Let me illustrate it in this way. It would be possible to take the view that the mere moving into the house by the woman amounted to an acting upon the common intention. But that was evidently not the view of the majority in Eves v. Eves [1975] 1 WLR 1338. And the reason for that may be that, in the absence of evidence, the law is not so cynical as to infer that a woman will only go to live with a man to whom she is not married if she understands that she is to have an interest in their home. So what sort of conduct is required? In my judgment it must be conduct on which the woman could not reasonably have been expected to embark unless she was to have an interest in the house. If she was not to have such an interest, she could reasonably be expected to go and live with her lover, but not, for example, to wield a 14-lb sledge hammer in the front garden. In adopting the latter kind of conduct she is seen to act to her detriment on the faith of the common intention."

35. Nothing in Nourse LJ's judgment supports Mr Glen's submission as to the applicable law. Nor in my view does Mustill LJ's judgment support it: quite the reverse (see his example (c) at 652C and his comment on it at 653C). I will not cite from his judgment, but will cite from that of Sir Nicolas Browne-Wilkinson V-C, which is also directly contrary to Mr Glen's submission. He opened his judgment, at 654D, by saying:

"If the legal estate in the joint home is vested in only one of the parties ('the legal owner') the other party ('the claimant'), in order to establish a beneficial interest, has to establish a constructive trust by showing that it would be inequitable for the legal owner to claim sole beneficial ownership. This requires two matters to be demonstrated: (a) that there was a common intention that both should have a beneficial interest; (b) that the claimant has acted to his or her detriment on the basis of that common intention."

36. Sir Nicolas nowhere suggested that it was a pre-condition that, in an express agreement case, it was necessary that the agreement should prescribe what it was that the claimant had to do. Nor did he apparently regard either of the authorities upon which Mr Glen relied as supporting such a proposition. He referred to them thus, at 656A:

"But as Lord Diplock's speech in Gissing vv. Gissing [1971] AC 886, 905D and the decision in Midland Bank Plc v. Dobson (unreported) make clear, mere common intention by itself is not enough: the claimant has also to prove that she has acted to her detriment in the reasonable belief that by so acting she was acquiring a beneficial interest.

There is little guidance in the authorities on constructive trusts as to what is necessary to prove that the claimant so acted to her detriment. What 'link' has to be shown between the common intention and the actions relied on? Does there have to be positive evidence that the claimant did the acts in conscious reliance on the common intention? Does the court have to be satisfied that she would not have done the acts relied on but for the common intention, e.g. would not the claimant have contributed to household expenses out of affection for the legal owner and as part of their joint life together even if she had no interest in the house? Do the acts relied on a detriment have to be inherently referable to the house, e.g. contribution to the purchase or physical labour on the house?

I do not think it is necessary to express any concluded view on these questions in order to decide this case. Eves v. Eves [1975] 1 WLR 1338 indicates that there has to be some 'link' between the common intention and the acts relied on as a detriment. In that case the acts relied on did inherently relate to the house (viz. the work the claimant did to the house) and from this the Court of Appeal felt able to infer that the acts were done in reliance on the common intention. So, in this case, as the analysis of Nourse LJ makes clear, the plaintiff's contributions to the household expenses were essentially linked to the payment of the mortgage instalments by the defendant: without the plaintiff's contributions, the defendant's means were insufficient to keep up the mortgage payments."

37. This court's judgments in Grant did not therefore interpret any of the decisions in Gissing, Eves and Dobson as establishing the narrow principle for which Mr Glen contended. On the contrary, those judgments supported for the approach the Recorder adopted in the case before us. Neither counsel in fact referred us to the decision in Grant. But even if it might be said that there was an element of tension between the approaches adopted by this court in Dobson and Grant, the later decision of the House of Lords in Rosset, upon which Mr Dubbery placed primary reliance, puts the correct principle beyond doubt.
38. Mr Rosset purchased a house in November 1982 in his name. He bought it with money provided by a trust fund of which he was a beneficiary. It became the matrimonial home. He charged it to secure a £15,000 overdraft which he arranged for the purpose of carrying out some renovation works. He and his wife were let into possession before completion of the purchase. Much later he failed to satisfy the bank's repayment demand and the bank sought possession. Mrs Rosset resisted the claim. She had made no financial contribution to the purchase but claimed that she and her husband had agreed that it was to be jointly owned; she also claimed that, in reliance on that agreement, she had made a sufficiently significant contribution in kind to the acquisition of the house by the work she had done to it so as to give rise to a constructive trust under which she could assert a beneficial interest in the house. The trial judge rejected Mrs Rosset's case that there was any agreement, arrangement or understanding between the spouses that she was to have an interest in the house. He nevertheless found that her part in the renovation works was sufficient to give her a beneficial interest, the extent of which he referred to an inquiry. He arrived at that conclusion by a finding that the renovation works were agreed to be a joint venture between the spouses, and that Mrs Rosset acted to her detriment in doing what she did in reliance on that agreement.
39. There were issues in the case apart from that as to whether Mrs Rosset had established a beneficial interest in the house. But on that issue the House of Lords unanimously rejected her claim. The only reasoned speech was delivered by Lord Bridge of Harwich, with whom all their Lordships agreed. He said, first, at [1991] 1 AC 107, 131G:

"On any view the monetary value of Mrs Rosset's work expressed as a contribution to a property acquired at a cost exceeding £70,000 must have been so trifling as to be almost de minimis. I should myself have had considerable doubt whether Mrs Rosset's contribution to the work of renovation was sufficient to support a claim to a constructive trust in the absence of writing to satisfy the requirements of section 51 of the Law of Property Act 1925 [sic: probably means section 53] even if her husband's intention to make a gift to her of half or any other share in the equity of the property had been clearly established or if he had clearly represented to her that that was what he intended. But here the conversations with her husband on which Mrs Rosset relied, all of which took place before November 1982, were incapable of lending support to the conclusion of a constructive trust in the light of the judge's finding that by that date there had been no decision that she was to have any interest in the property. The finding that the discussions 'did not exclude the possibility' that she should have an interest does not seem to me to add anything of significance."

40. Lord Bridge went on to say that those considerations led him to the conclusion that the judge had been wrong to hold that Mr Rosset held the house as a constructive trustee for himself and Mrs Rosset and on that ground he would allow the bank's appeal. He then said that the House had had "elaborate submissions as to the test to be applied to determine the circumstances in which the sole legal proprietor of a dwelling house can properly be held to have become a constructive trustee of a share in the beneficial interest in the house for the benefit of the partner with whom he or she has cohabited in the house as their shared home." He declined to engage in an exhaustive analysis of the law by way of addition to the many already to be found in the authorities cited to the House, but he did however then say this, at [1991] 1 AC 107, 132D:

"I do, however, draw attention to one critical distinction which any judge required to resolve a dispute between former partners as to the beneficial interest in the home they formerly shared should always have in the forefront of his mind.

The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.

In sharp contrast with this situation is the very different one where there is no evidence to support a finding or an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as to the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do." (Emphasis supplied)

41. Lord Bridge then explained that the leading cases in the House of Lords were Pettit v. Pettit [1970] AC 777 and Gissing, which both demonstrated situations in the second of his two categories. Examples of cases in the first category were Eves and Grant; and it is apparent that he regarded them as rightly decided.
42. There is in my judgment no doubt that in the passage I have quoted, starting at [1991] 1 AC 107, 132D, Lord Bridge was, with the agreement of all their Lordships, identifying basic points of principle, albeit that what he said was strictly obiter. What he said was advanced by way of express guidance to trial judges. The first type of case he identified was a case such as this one; and he made it plain that, once a finding of an express arrangement or agreement has been made, all that the claimant to a beneficial share under a constructive trust needs to show is that he or she has "acted to his or her detriment or significantly altered his or her position in reliance on the agreement …". That amounts to solid support for the approach reflected in Grant and for the way in which the Recorder directed himself in the present case. It implicitly rejects any suggestion that might be derived from Lord Diplock's remarks in Gissing or from the decision in Dobson that it is necessary to show that the arrangement or agreement involved the making of something in the nature of a bargain between the parties, and that the claimant has performed his part of that bargain.
43. Mr Glen submitted that this was an illegitimate reading of what Lord Bridge had said. His point was that, given that there was a finding by the trial judge that there was no arrangement or agreement between Mr and Mrs Rosset that they were to share beneficially in the house, the point that has arisen in the present case simply did not call for decision by the House in Rosset and so Lord Bridge did not need to focus on the particular point that Mr Glen argued before us. His submission was that we should therefore not read anything in Rosset as impliedly disagreeing with what Mr Glen submitted was the different sense of what Lord Diplock had said in the passage in his speech in Gissing.
44. I respectfully disagree with Mr Glen. It is unfortunate that, contrary to the requirements of Practice Direction (Judgments: Form and Citation) [2001] 1 WLR 194, paragraph 3.1, the only report of the decision of the House of Lords in Rosset that counsel put before us during the argument was that in [1990] 1 All ER 1111. That of course does not include any report of counsel's argument, nor even a list of the cases cited to the House other than those referred to in Lord Bridge's speech. Counsel ought properly to have referred us to the report in the official Law Reports in [1991] 1 AC 107, from which I have cited. That report includes a summary of counsel's arguments, covering almost 15 pages. Central to the arguments advanced was: (i) by counsel for the bank, that it was essential to demonstrate that the arrangement or agreement relied upon included the type of bargain for which Mr Glen contended before us, with reliance being placed on, amongst other case, Dobson, said to be "a clear expression of the 'bargain' theory"; and (ii) by counsel for Mrs Rosset, that it was not necessary for any such bargain to be established, and all that needed to be shown was a common intention that the claimant should have a beneficial interest and that the claimant had carried out acts in reliance on that common intention.
45. Thus Mr Glen was repeating to us the same argument as that advanced by the bank to the House of Lords in Rosset over 18 years ago. Whilst Lord Bridge made no express reference in his speech to this aspect of the rival arguments, it is in my view impossible to read his statements of principle at [1990] 1 AC 107, 132, as doing other than rejecting the bargain theory. He expressed himself in a way that left no scope for its continuing existence. This court has, unsurprisingly, subsequently applied the principle that he explained as applying to express arrangement or agreement cases: see Crossley v. Crossley [2006] 2 FLR 813, at paragraphs [10] and [29], per Sir Peter Gibson delivering the judgment of the court.
46. I therefore reject the primary basis on which Mr Glen challenged the Recorder's decision in this case. In my judgment the Recorder directed himself correctly. In case he was wrong in that challenge, Mr Glen also submitted (i) that the Recorder was anyway wrong to make the findings he did as to the financial contributions Mr Williams made towards the expenditure in respect of the flats; and (ii) if that was wrong, that Mr Williams's contributions, including the contribution in kind by way of the painting of the flat over some two days, were anyway too insignificant to amount to sufficient detriment to entitle him to establish the claimed constructive trust.
47. As to the former submission, I propose simply to say that I was entirely unconvinced by it and Mr Glen did not begin satisfy me that there is any basis upon which this court can or should re-open the Recorder's findings of fact as to Mr Williams's contributions. As to the second submission, I recognise, as did the Recorder, that in any given case the claimed acts of reliance may be too trifling to enable the establishment of the claimed constructive trust: Rosset shows that. Whether in any particular case the claimed acts of detriment are or are not sufficient is essentially a matter of judgment for the judge concerned to decide the matter. That will involve a consideration of all the circumstances.
48. In this case there is no doubt that Mr Parris has made a materially greater financial contribution to the flats than Mr Williams has. He paid out something over £9,000 on the original purchases as well as paying £750 for the party wall and whatever the cost of the electricity meter. He also paid his share of the Heritage bill and of the maintenance charges. In addition, he has been responsible for the administration involved in letting the flats. As regards the servicing of the mortgages and the payment of outgoings other than maintenance charges, it appears that they have been met out of the rents from the lettings, although the picture as explained to us was imprecise. Mr Williams's contribution appears to have been confined to some two days' painting work, plus his contribution to the Heritage bill and the maintenance charges that the Recorder found he had made. The value of the painting work was unquantified, but cannot be rejected as of no material value; and Mr Williams's financial contributions totalled something over £2,000 in all.
49. Mr Williams has, therefore, put in materially less than Mr Parris. But the Recorder rejected the suggestion that his contributions were trivial and he found as a fact that they were sufficiently substantial to justify his claim, that is that they amounted to sufficient detriment to entitle him to set up the claimed constructive trust. In my judgment that was an assessment that the Recorder was fully entitled to make and there is in my view no basis upon which this court can or should question it. I would reject this challenge to his decision as well.
50. The result is, therefore, that I consider that there is no ground for overturning the Recorder's decision. I would dismiss the appeal.

Lord Justice Moore-Bick

51. I agree.