1. The great grandfather (passed away in the 1934) owned a piece of land in Sai Kung and his 3 sons W, K and F inherited it and became co-owners. When W (being the eldest son) passed away in the 1999, his son and daughter inherited his interest in the land. W’s grandson claimed interest in the land, suggesting that since the 1970s there had been a common understanding amongst the elders of the family, in particular W, K and F that he could use and own the land when he reached the age of 18 and, in reliance on this common intention, he carried out various building works in the land, including the erection of a one storey building.
    
2. The husband purchased the subject property in his own name in 1988. Later in the same year his wife came to Hong Kong from mainland China and the property has become their matrimonial home. The husband and the wife had discussion of adding the wife’s name to the property but the husband refused, saying that it would be troublesome and cause expenses. Later, the couple divorced. The wife claimed that she should have half interest in the property because it was the common intention.
    
3. A gentleman and a lady cohabited and intended to get marry. The house was purchased in the name of the gentleman only, but the gentleman told the lady that the house would be their home and it would be in his name only until the lady reached the age of 21. The lady did not make payment for the house, but she did various works in the house and garden. She claimed interest in the house after they split up.
    
4. A gentleman was cohabitating with a lady who was divorcing her husband. The gentleman told the lady that he would not add the lady’s name to the property because it might affect her matrimonial proceedings with her husband. Later, the lady argued that it was intended that she would have interest in the property.
    

“(1) Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary.

(2) Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the plaintiff regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (i) the common intention, (ii) the plaintiff’s detrimental reliance on their common intention, and (iii) the unconscionability of the property owner departing from it.

(3) The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

(4) Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

(5) In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, §§2.3-2.4, Cheung JA identified two situations where a common intention constructive trust may arise.

(a) The first is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such an agreement or arrangement can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.

(b) The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property, and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust”.

1. Contribution to the purchase price or mortgage payment of the property (by the party whose name has not been put to the property) shall be relevant for inferring the common intention. It can also be considered as detrimental reliance of the common intention. Further, such contribution may also give rise to a resulting trust, which we hope to discuss in another article.
    
2. Nonetheless, the Court has said that financial contributions are relevant but there are many other factors which may enable the Court to decide the share of beneficial ownership. For the present purpose, it may not be necessary to refer to such factors and it suffices to say that the Court will take a holistic approach and consider various factors relevant for establishing the parties’ intention for the purpose of a constructive trust.
    
3. Payment of household expenses by one party (whose name has not been put to the property) to enable the other party (whose name is put to the property) to pay mortgage instalments may be sufficient to establish indirect contribution to the property. It can support the inference of common intention.
    
4. Common intention constructive trust usually arises in domestic/matrimonial home context. Different considerations may apply if, for example, the subject property was purchased for investment purpose, even if the purchasers had familial relationship.