Drake v Whipp
Court of Appeal
Citations:  1 FLR 826;  2 FCR 296; (1996) 71 P & CR D32.
Drake and Whipp were a cohabiting couple. Whipp bought a barn in his own name to convert into their family home. Drake contributed 40% of the total purchase price, while Whipp contributed the rest. Drake contributed a small portion of the money required to convert the property and 30% of the total labour required. The pair had a joint bank account, and though Whipp was the main earner Drake contributed to household expenses.
The couple later separated. Drake sought a declaration that she had a share in the equitable title to the barn. The first instance judge held that she only had a 19% share under a resulting trust based on her direct contributions to the purchase price and conversion costs. Drake appealed.
- Was Drake entitled to a larger share of the barn?
The Court of Appeal held in Drake’s favour. The couple had a common understanding that Drake would share in the equitable title, as shown by her contribution to the purchase price. This gave rise to a constructive trust. Taking into account all Drake’s contributions, the correct share under this trust was 1/3rd.
This Case is Authority For…
There are two ways of constituting a constructive trust:
- The parties had an agreement, arrangement or understanding based on express discussions that they would share in the equitable title.
- Even in the absence of an express agreement, the parties’ conduct evidences a common intention to share in the equitable title. The relevant conduct is direct contribution to the purchase price, either initially or to later mortgage payments.
In both cases, the party seeking to assert their title must have relied on the agreement or common intention to their detriment or by altering their position.
In either case, a constructive trust of property can arise even if the parties have not reached any agreement as to their respective shares.
If there is no agreement as to the parties shares, the court will try to infer the parties’ intended shares by reference to factors such as the property’s intended purpose, direct contributions to the purchase, indirect contributions such as paying household expenses, contributing labour.