Resulting trusts and common intention

Abstract Although the resulting trust has played a lessening role as an appropriate mechanism for determining beneficial ownership of the family home, recent case law has seen a re-emergence of the doctrine in cases involving the purchase of property as a business venture or investment. Significantly, in these cases, the courts have ruled out a holistic or broad brush approach (taking into account a range of factors) in assessing the parties equitable shares in favour of a purely mathematical calculation based on the parties’ respective financial contributions towards the purchase price. This approach, however, will not necessarily apply in all cases involving investment property as the Privy Council decision in Marr v Collie [2018] AC 631 has demonstrated. Much will still turn on the parties’ common intention in deciding whether to apply a resulting trust solution or, alternatively, an approach based on constructive trust principles. Apart from the investment context, it is now also clear that the resulting trust will be the preferred option where there is a lack of close relationship between the parties. Here too, the courts have excluded the determination of beneficial ownership under a common intention constructive trust and applied an arithmetical calculation of the parties’ respective beneficial shares despite the domestic context of the transaction.