Chaudhary v Chaudhary [2013] EWCA Civ 858

Facts

• The dispute concerned a property purchased solely in the defendant’s name.
• The claimant, brother to the defendant, asserted a right to a share in the property, citing financial support provided for its purchase and later improvements.
• The defendant acknowledged receiving financial assistance but contended these were loans rather than contributions conferring ownership.
• The court was required to determine whether financial transactions and subsequent conduct evidenced a common intention to share ownership.

Issues

1. Whether the claimant’s financial contributions and conduct established a shared intention to share ownership of the property.
2. Whether direct monetary payments are required, or if non-financial conduct and the relationship context can also evidence a common intention constructive trust.
3. Whether the claimant acted to their detriment in reliance on a shared intention.
4. How the court should determine the extent of the claimant’s beneficial interest in the absence of formal agreement or precise quantification of financial contributions.

Decision

• The Court of Appeal reaffirmed that direct monetary contributions are not strictly required to establish a common intention constructive trust.
• The court found that conduct such as making improvements, managing the property, and foregoing other opportunities may evidence both a shared intention and detrimental reliance.
• The family relationship between the parties, and the presence of informal understandings, were considered relevant factors in assessing intention and reliance.
• The allocation of beneficial interests should be determined by an overall assessment of all circumstances, not limited to exact financial transfers.

Legal Principles

• Constructive trusts can arise where common intention is inferred from conduct, not solely clear financial contributions.
• Detrimental reliance required for a constructive trust is not restricted to monetary payments and may include actions taken or opportunities foregone based on shared understanding.
• All relevant circumstances, including family relationships, non-financial acts, and informal agreements, must be considered to reach a just outcome.
• Beneficial shares are to be assessed contextually, without rigid formulas, to reflect the parties’ actual dealings and intentions.

Conclusion

Chaudhary v Chaudhary confirms that in property disputes, courts will infer common intention and ownership shares from the broader context of conduct, reliance, and relationship, rather than relying exclusively on direct monetary payments or formal agreements.