In the absence of any express agreement, arrangement, or understanding between the parties that the property is to be shared beneficially, upon which a party relies to his detriment, a constructive trust may arise where such common intention can be found from the conduct or mutual dealings between the parties. However, such conduct must amount to a direct contribution to the purchase of the property.

An unmarried couple, having lived together for 18 years, bought a house to live in with their four children. The lady contributed more than 50 per cent of the purchase monies, with legal title being registered in their joint names. No declaration of trust was made indicating how the beneficial interest should be held. Upon the relationship breaking down, the House of Lords affirmed that where there is a joint tenancy at law, the starting point is to assume a beneficial joint tenancy (ie equal shares). However, taking into account all dealings between the parties (especially the fact that they had always kept their financial affairs separate), the lady was deemed to be entitled to a higher than 50 per cent share in the house.

The quantum of a beneficial interest under a constructive trust should be calculated with regard to the whole course of dealing between the parties and not merely by reference to the actual financial contributions.