Chattey v Farndale (1998) 75 P&CR 298

Facts

  • The dispute arose from a property transaction involving Mr. Chattey and Mr. Farndale.
  • The property was purchased in Mr. Farndale’s name.
  • Mr. Chattey claimed a beneficial interest, citing his financial contributions and an alleged oral agreement to share ownership equally.
  • At trial, evidence included financial arrangements and communications between the parties.
  • Mr. Farndale denied any agreement and asserted sole ownership.
  • The trial judge found in Mr. Farndale’s favour, determining that Mr. Chattey failed to provide sufficient evidence of a clear intention to share beneficial ownership.
  • Mr. Chattey appealed to the Court of Appeal.

Issues

  1. Whether a constructive trust could be established based on financial contributions and alleged oral agreement.
  2. Whether there was clear and mutual intention between the parties to share beneficial ownership of the property.
  3. Whether the claim could succeed under either constructive trust or proprietary estoppel doctrines.

Decision

  • The Court of Appeal upheld the trial judge’s decision, finding in favour of Mr. Farndale.
  • It determined that Mr. Chattey’s financial contributions were, without more, insufficient to demonstrate a mutual intention to share the property.
  • The Court required clear and unequivocal evidence of an agreement or understanding to create a constructive trust and found none.
  • The Court concluded that the evidence did not meet the threshold for either a constructive trust or proprietary estoppel.

Legal Principles

  • A constructive trust will only be imposed by law where there is clear and mutual intention to share beneficial ownership.
  • Financial contributions to the purchase or expenses, without explicit evidence of intention, do not suffice to create a constructive trust.
  • The absence of written documentation increases the evidentiary burden on a claimant seeking to demonstrate intention for a constructive trust.
  • Constructive trust and proprietary estoppel are distinct doctrines: the former requires intention to create a trust, the latter focuses on detrimental reliance on a promise or assurance.
  • Courts safeguard property rights by declining to infer trusts based on ambiguous or speculative evidence.

Conclusion

The Court of Appeal in Chattey v Farndale (1998) 75 P&CR 298 confirmed that constructive trusts require clear, unequivocal evidence of mutual intention, and financial contributions alone are inadequate to establish beneficial ownership absent explicit agreement.

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