Grant v Edwards [1986] Ch 638

Facts

• The case involved a cohabiting couple: the defendant purchased a house in his name (and his brother’s), excluding the claimant, Mrs. Grant, from the legal title.
• The defendant told Mrs. Grant her name was omitted from the title to avoid adverse effects on her ongoing divorce proceedings.
• The defendant paid the mortgage; Mrs. Grant contributed significantly to household expenses.
• Upon separation, Mrs. Grant sought a beneficial interest in the property, claiming a constructive trust arose from their arrangement.
• Mrs. Grant’s contributions to household expenses were deemed substantial, exceeding what would normally be expected and helping to meet the mortgage payments.

Issues

1. Whether a constructive trust could arise where one party is excluded from the legal title but there is evidence of a common intention to share ownership.
2. Whether a “specious excuse” for excluding a party from legal title is sufficient evidence of common intention to share a beneficial interest.
3. Whether indirect financial contributions and other forms of detrimental reliance by the claimant could establish a beneficial interest in the property.

Decision

• The Court of Appeal found that a constructive trust could be established if two conditions were met: existence of a common intention to share ownership, and the claimant’s detrimental reliance on that intention.
• The defendant’s excuse for omitting the claimant from the title was held to evidence a common intention.
• Mrs. Grant’s substantial contributions to household expenses, which enabled the defendant to pay the mortgage, were considered detrimental reliance.
• The court ruled that a specious excuse provided sufficient evidence of a shared understanding between the parties, supporting the claimant's beneficial interest.

Legal Principles

• A constructive trust may arise without direct financial contribution if there is an objectively inferred common intention for shared ownership and detrimental reliance by the claimant.
• A “specious excuse” for excluding a person from a legal title can evidence such common intention.
• Detrimental reliance may include indirect contributions, such as substantial household expenses that help cover the mortgage obligations.
• The test for constructive trust claims remains fact-sensitive, requiring demonstration of both elements: common intention and detriment.

Conclusion

Grant v Edwards [1986] Ch 638 confirmed that a constructive trust and beneficial interest in property may arise from a shared intention—demonstrated by even a specious excuse—joined with significant detrimental reliance, including indirect financial contributions, thereby expanding equitable protection for non-titled parties in cohabiting relationships.