Goodman v Gallant [1986] Fam 106

Key point
  • The doctrine of constructive trusts cannot be used to contradict an expressly declared trust
Facts
  • C and her husband were joint beneficial tenants in their home
  • C and D together purchased C’s husband’s interest, with the conveyance declaring that they held the property “upon trust to sell … until sale upon trust for themselves as joint tenants.”
  • C issued a notice to sever her share and sought a declaration that she held a ¾ interest in the house
  • Counsel for C argued that upon severance of a joint tenancy the parties’ shares are not necessarily equal but depends on their intentions
  • D argued that they owned the house as joint tenants and thus held the sale proceeds in equal shares
Held (Court of Appeal)
  • The parties were joint tenants and the sale proceeds were held in equal shares
Slade LJ

Effect of express trust

  • Where there is an express declaration of trust which declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of resulting or constructive trusts unless and until the declaration is set aside or rectified: p. 111

Equal shares upon severance of joint tenancy

  • It is of the very nature of a joint tenancy that, upon a severance, each takes an equal aliquot share according to the number of joint tenants: p. 118
  • It would no doubt be possible for a trust in terms to provide that the beneficial interests of two parties should be equivalent to those of joint tenants unless and until severance occurred, but that in the event of severance their interests should be otherwise than in equal shares: p. 119
  • In the current case the words of the conveyance show a beneficial joint tenancy, with all its incidents, including those relating to the effect of severance: p. 119
Commentary
  • It is likely that the principle in this case would apply to the modern doctrine of common intention constructive trust developed in Stack v Dowden such that the common intention constructive trust does apply where cohabiting parties have made an express declaration of trust as to their shares in the property
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