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When does someone have a legitimate constructive trust claim?- the main legal principles, by Eugene Duhovnikoff BA/LLB

The claimant must show[1]:

(a) contributions, direct or indirect to the property in question;

(b) the expectation of an interest in the property;

(c) that such expectation is reasonable; and

(d) that the defendant should reasonably expect to yield the claimant an interest.

 

Furthermore in the case of a de facto union, the claimant does not start from a presumptive half share but rather from nothing. A de facto claimant must demonstrate first a case for an interest and then what that interest should be. The interest must broadly reflect the contributions. Arithmetical precision will generally be unattainable and is in any event not necessary.

The Court must, however, do its best to reflect in the assessed shares the value of the claimant’s contributions. [2] The contributions are assessed in the following way:

[3] “... by contributions to assets one is not referring to those contributions to a common household that are adequately compensated by the benefits the relationship itself confers.

The contribution must manifestly exceed the benefits. ... Further, the contributions need not be in money; they may be in services or in any other respect. But there must be a causal relationship between the contributions and the acquisition, preservation or enhancement of the defendant’s assets ... .”

If the abovementioned criteria are not filled satisfieda a proprietary claim based upon constructive trust would fail.

 


[1] Lankow v Rose[1995] 1 NZLR 277 (CA).

[2] Ibid at 295.

[3] Ibid at 282.

 

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