Introduction
The case of Eves v Eves [[1975] 1 WLR 1338] establishes significant principles relating to constructive trusts and the acquisition of beneficial interests in property. The core concept concerns situations where a legal owner of property is deemed to hold that property, not solely for their own benefit, but also for the benefit of another person, despite the latter not being explicitly named on the title deed. This occurs most commonly in domestic contexts where a couple, not legally married, make joint efforts towards acquiring or improving a home and one partner makes an excuse for not putting the other on the legal title. The technical principles at play are rooted in equity and fairness, which allow courts to impose a constructive trust in circumstances where it would be unconscionable for a legal owner to deny the other party their share of the property. Key requirements include an objective intention to share the property's benefits, detrimental reliance on that intention by the non-legal owner, and the unconscionability of denying the non-legal owner their beneficial interest. Eves v Eves provides a clear illustration of how the courts will not be deterred by claims of subjective intention where a valid objective intention can be inferred.
The Facts of Eves v Eves
The case involved an unmarried couple, identified in the judgment as Mr. Eves and Ms. Eves, who began cohabiting in 1968. They had a daughter together, and soon after, purchased a house using funds provided solely by Mr. Eves. The property was registered in Mr. Eves's sole name. Critically, Mr. Eves gave Ms. Eves an excuse for not including her on the title, claiming that he would have done so had she been 21 years old. In the following years, the couple had another child. During the course of their cohabitation, Ms. Eves contributed significantly to the refurbishment of the property, undertaking much of the manual labour to renovate the house. In 1972, Mr. Eves left Ms. Eves and subsequently married another woman. Ms. Eves then sought to claim a share of the property based on her contributions and Mr. Eves's representation that he would have put her on the title if it wasn't for her age.
The Court of Appeal's Decision
The Court of Appeal, led by Lord Denning MR, held that Ms. Eves had acquired a beneficial interest in the property. This was a significant departure from previous cases like Lloyds Bank plc v Rosset which heavily emphasised direct financial contribution to the purchase or mortgage of a property in assessing whether an equitable interest existed. The court did not need to find a formal agreement between the parties. Instead, they inferred a common intention through Mr. Eves’s conduct and words. They found that the “specious excuse” made by Mr. Eves, that he would have put Ms. Eves on the title if she was over the age of 21 was, in essence, an acknowledgement by Mr. Eves that Ms. Eves was entitled to have her name on the title. Moreover, the judge found that the work that Ms. Eves carried out to the property was clear evidence of a shared intention to benefit from the property, making it unconscionable for Mr Eves to deny her an equitable share of the property.
The court imposed a constructive trust. This meant that while Mr. Eves remained the legal owner, he was deemed to hold the property not only for himself but also for Ms. Eves's benefit. The court quantified Ms Eves’s interest in the property as 25% reflecting all the manual labour she carried out in the renovation of the property. This is a significant point because it goes to the underlying nature of a constructive trust, which is not based on financial contributions alone. While Ms. Eves made no financial contribution to the purchase or mortgage of the house, her significant contribution to the renovation and clear reliance on Mr. Eves’s representation were sufficient to establish an equitable interest.
Establishing a Constructive Trust
The legal principles of establishing a constructive trust as set out in Eves v Eves and further developed by cases that followed are as follows:
Common Intention
The courts must find a common intention to share a beneficial interest. This common intention does not have to be an explicit agreement, it can be inferred from the parties’ conduct. This can include both statements made by one or both parties but also inferred from a wide range of facts, including for example, evidence of financial contributions, improvement works undertaken and/or an explanation (albeit false) for not including the non-legal owner’s name on the title to the property.
The objective intention is important. Mr. Eves could not say, "I never intended to put the property in joint names" because, as Lord Denning points out, he is "judged by what he told her and what he led her to believe, and not by his own secret intentions". This distinction between the objective and subjective intention is key. It demonstrates how equity values the appearance of fairness, instead of internalised private intentions, which cannot be discovered and are therefore of limited value in the determination of a legal issue.
Detrimental Reliance
The non-legal owner must demonstrate that they have acted to their detriment in reliance of the common intention. While financial contribution is a key factor in proving reliance, non-financial contributions are also relevant, particularly in domestic cases. For instance, Ms. Eves contributed her time, labor and effort towards improving the property. This shows that she undertook action that she would not have taken were it not for her belief that she had an interest in the property.
Unconscionability
Finally, the courts must find it unconscionable for the legal owner to deny the other party a beneficial interest. This element serves as the moral underpinning for the court's decision to impose a constructive trust. It emphasizes the courts’ view that it should not permit individuals to benefit from the efforts of another, only to later deny that other a corresponding right to a share in the property. The requirement of unconscionability prevents the courts from interfering in every case where the law is not followed and indicates a minimum threshold for judicial intervention in property matters.
Distinguishing Eves v Eves from Other Cases
Contrasting Lloyds Bank plc v Rosset
A key case to understand Eves v Eves is Lloyds Bank plc v Rosset [[1991] 1 AC 107], a case which created a greater emphasis on express agreements (even if imperfect or imprecise) as well as direct financial contributions to the mortgage or the purchase price. The ruling in Rosset was particularly problematic because it imposed onerous requirements for establishing common intention, that resulted in a number of claimants with arguable claims failing. After all a legal system cannot simply impose solutions based solely on ‘what seems fair’, because if so then it is simply a discretionary mechanism of law, which is incompatible with the principle of the rule of law itself. Rather, all legal mechanisms must have a sound legal reasoning behind them.
Rosset was criticised by academic commentary for setting the bar for claims too high, and many believe that it was based on a distorted view of the realities of how property agreements between non married parties are often informally formed. It is widely held that in most such cases there will rarely be direct conversations about shared ownership but in many instances agreements will be inferred from behaviour and actions undertaken by both parties.
The difference between Eves and Rosset is that the former recognised that a constructive trust could be inferred from a wide range of facts, including a false explanation for not adding a person to the title, as well as the non-legal owners behaviour, whereas the latter case only accepted very narrow methods for showing common intent which included express agreements or direct financial contributions to the mortgage or purchase price.
Distinguishing Curran v Collins
The Court of Appeal decision in Curran v Collins [[2015] EWCA Civ 404] highlights the differences between a valid “specious excuse” and a simple statement of ownership with an accompanying rationale. In Curran, the claimant could not reasonably believe that the parties had a common intention to share the property. Unlike in Eves, there was no representation that the property was intended to be shared by both parties, nor was there any evidence that she relied on anything Mr. Curran said or did to her detriment, other than her choice to be in a relationship with Mr Curran. The court pointed out the absence of evidence showing that she had undertaken significant responsibilities for the property that were not simply part of a normal relationship. In that regard, Curran has limited the scope of cases that can be compared to Eves v Eves.
Implications of Eves v Eves
The ruling in Eves v Eves holds considerable importance in the area of land law, and has given rise to much commentary and has had a direct influence on cases that have followed. Eves v Eves provides an exception to the rule that the law should not interfere in the private arrangements of individuals, and highlights that in property matters, an equitable approach must be applied and that the courts would intervene when one party tries to unfairly exclude the other from what is truly a shared asset. This approach is rooted in the idea that a Court should not uphold unconscionable or unethical behaviour, or in some cases where people are using the law to cause undue detriment to another party.
Eves v Eves was also notable for its recognition of non-financial contributions in establishing a beneficial interest in land. In many traditional situations financial contributions to a property, would always be the defining criteria of ownership however, the court recognised that in domestic situations, non-financial labour and assistance can hold the same value as financial contributions to mortgages and other purchase related costs. As such, it is an important recognition of non-financial contributions in a family setting and is thus a seminal decision in this area of law.
Finally, the case shows the courts will not allow legal arguments to obscure a claimant’s case where it is apparent they are being treated unfairly. This is particularly true in family cases where unequal power dynamics between the parties, would result in injustice. Therefore, even though Mr. Eves had not intended to make a joint investment, the court was able to construct an agreement based on his actions, rather than solely his words, which he tried to maintain was reflective of his private intentions.
Conclusion
Eves v Eves continues to be a significant case in English property law. It demonstrates how a constructive trust can be implied in instances of informal domestic arrangements. It shows the courts taking an equitable approach based on fairness. The case highlights the importance of an objective intention to share the benefits of a property. Additionally, it illustrates how significant non-financial contributions can be when assessing equitable interests. While the legal principles developed in Eves v Eves have been further clarified in later case law, including Lloyds Bank plc v Rosset and Curran v Collins, the case remains a foundational authority in understanding constructive trusts and beneficial interests in English property law. It serves as a constant reminder that actions and representations carry as much weight as formal legal agreements.
