Unmarried couple acquiring ocean-going boat – Money found by defendant male partner – Boat registered in his name – Claimant contending for beneficial half-share on basis of various declarations on his part – Whether defendant had constituted himself trustee – Maxim equality is equity applied
The claimant was a widow who, from 1982 to 1996, enjoyed an intimate relationship with the defendant, a married man of considerable private means. On several occasions during the relationship the defendant announced the intention of setting up home with the claimant, but, although he was frequently absent from the matrimonial home, his marriage remained intact at all material times. In 1993 the defendant told the claimant that he would divorce his wife and use the proceeds of the sale of the matrimonial home to buy a house for the claimant and a boat for them to share and sail around the world for an indefinite period. The parties co-operated in locating a suitable boat and negotiating with sellers. Eventually the defendant paid £172,000 on the purchase of Butterfly, which the parties renamed Edwardiann Castle so as to incorporate their own names. Without any prompting from the claimant, the defendant stated (wrongly) that, since the claimant did not possess a master’s certificate, he alone could be registered as owner of the boat. The claimant gave up her rented flat and used the boat as her main residence. The defendant continued to spend much of his time with his wife. In a letter sent in June 1996, the defendant promised that his absences would shortly cease and that the boat would be theirs to share so that they could live together.
Towards the end of 1996 the claimant, having lost patience, demanded her share of the boat’s value and had the boat arrested. The boat was sold and half the proceeds were deposited with solicitors pending the outcome of High Court proceedings taken by the claimant, who claimed to be entitled to a half-share on the footing: (a) that the defendant had expressly constituted himself trustee of the boat for himself and the claimant; or (b) that, applying the principles in Lloyds Bank plc v Rosset [1991] 1 AC 107, a constructive trust had arisen in her favour. The defendant contended that the boat, having been bought as a leisure item, was never intended to serve as a permanent home, and that his references to “our boat” and “living together” were to be understood accordingly. In the course of his judgment, the judge observed that the evidence of the claimant was to be preferred on all factual matters on which they disagreed.
Held: The claimant was entitled to a half-share of the proceeds of sale.
1. It was common ground that an express trust of personalty did not have to be evidenced in writing and could be declared without using the word “trust” or like expressions: see, for example, Paul v Constance [1977] 1 WLR 527, where the oft repeated statements that “the money is as much yours as mine” were sufficient to create a trust. That the defendant intended the claimant to understand that she had a beneficial interest could be gathered, above all, from: (1) his repeated use of the word “our” when referring to the boat; (2) an assurance given by him that her “security” was her interest in the boat; and (3) the fact that he felt bound to give some kind of explanation (albeit absurd) as to why he alone could be registered as owner.
2. Given that a substantial share was intended, although not expressly quantified, it was appropriate to apply the maxim equality is equity and hold that the shares were equal.
3. While the claimant had suffered detriment in giving up her flat, it would not have been possible to determine the appropriate size of her share by applying constructive trust principles.
Robert Leonard (instructed by Morlings, of Maidstone) appeared for the claimant: Philomena Harrison (instructed by Barfields, of Croydon) appeared for the defendant.
Alan Cooklin, barrister
