Declaration

Paul v Constance (1977) where Constance separated from his wife, the defendant, began living with the plaintiff as man and wife in 1967.  Constance received £950 as damages for personal injuries in 1973, and he and the plaintiff decided to use it to open a deposit account, which because they were not married was put in the name of Constance alone.  On many occasions both before and after the deposit Constance told the plaintiff that the money was as much hers as his.  After Constance’s death, it was held by the Court of Appeal that in the context of their relationship these words could properly be construed as equivalent to a declaration of trust by Constance of the monies in the account for both Constance and the plaintiff in equal shares.  Constance died intestate (without leaving a will) and the money in his account transferred, under the Laws of Intestacy to his wife.  It was held that although the wife was indeed the legal owner of the money, she was to hold part of it on a constructive trust for the plaintiff. Equity raised the constructive trust in this case because in all the circumstances which included evidence of the intention of the husband when opening the account, it would have been unfair and unconscionable to deny the plaintiff the right to ‘her’ share of the money. It should be kept in mind that to impose such an interest deprives the common law owner of the legal title to his strict rights.  The common law title cannot be usurped lightly.  Therefore, in order to establish that an equitable interest does in fact exist the court will require strong evidence that it was intended for the property to be owned in this way.  The phrase ‘beneficial ownership’ may be used as an alternative for ‘equitable interest’.