LAW AND SOCIETY
Context is Everything: The Application of the Common Intention Constructive Trust to Family Homes Ng Shu Wen, University College London
Introduction In BMM v BMN decided on 29 May 2017, the High Court of Singapore applied the resulting trust analysis to a family home in a situation where the marriage between parties was found to be void.1 Mr BMM had purchased the property in contention in his sole name in 1997, before he met Mrs BMN in early 1998 while she was married. Mrs BMN filed for divorce in 1999 and was granted the decree nisi in respect of her divorce on 8 July 1999. Mrs BMN realised she was pregnant with twins whom she thought Mr BMM had fathered. Mr BMM later proposed, knowing that Mrs BMN was pregnant, and the parties married in the US on 23 November 1999. In 2001, Mr BMM transferred the property to be held by Mrs BMN and himself as joint tenants. He maintained that this transfer was effected only because he could enjoy discounted interest rates in respect of his mortgage loan by naming Mrs BMN (a Singapore citizen) as a registered co-owner of the property. Despite the records however, Mr BMM remained solely responsible for the mortgage payments at all times and claimed to have clarified with Mrs BMN that he would remain the Property’s sole beneficial owner. Mrs BMN however, claimed that the transfer was made because he had wanted to provide her with some security should anything happen to him, whose job required frequent overseas travel. Critically, the parties never stayed in the Property. In 2004, the family relocated in the US where Mrs BMN filed divorce proceedings the following year. In 2008 while the divorce proceedings were ongoing, Mr BMM discovered that the parties’ marriage was invalid as Mrs BMN had not obtained the decree absolute at the time of their marriage. Mr BMM successfully applied to the US courts to have their marriage annulled. It was later discovered that Mr BMM was not the biological father of the twins. As the US courts had declared the marriage void in May 2009, the US courts did not need to rule on division of matrimonial assets and maintenance. Parties agreed that Mrs BMN could not obtain ancillary
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1
BMM v BMN [2017] SGHC 131; [2017] 4 SLR 1315.
relief pursuant to a nullity of marriage.2 Accordingly, the parties’ dispute over the Property could only be resolved under the law of property and trusts. In holding that Mr BMM beneficially owns the entirety of the Property, the High Court applied the instructive case of Chan Yuen Lam v See Fong Mun3 which affirmed Lord Neuberger’s minority approach in Stack v Dowden4 and the limited utility of the common intention constructive trust approach in Singapore. On the unique facts of BMM v BMN, we agree that the High Court was correct in finding that Mr BMM had held the full beneficial interest of the Property. What we would like to discuss is that the case of BMM v BNM nonetheless presented a fact matrix that could be potentially challenging to reconcile with justice using the strict resulting trust analysis provided for in Chan Yuen Lam v See Fong Mun.
The English Approach In two landmark cases,5 the apex court of the United Kingdom applied the common intention constructive trust in displacing the ratio of beneficial interest derived from the presumption of a resulting trust in properties held jointly by co-habiting couples. This was a marked departure from established case law that had aligned beneficial interests in the family home with that of commercial property. Before Stack v Dowden, the default position for family homes was provided for in Lloyds Bank plc v Rosset6 and Pettitt v Pettitt.7 On this approach, contributions to the costs of running a household and improvements 2 Under Chapter 4A of the Women’s Charter (Cap 353, 2009 Rev Ed), which applied only to marriages dissolved or annulled with effect from 2011. 3 Chan Yuen Lam v See Fong Mun [2014] SGCA 36; [2014] 3 SLR 1048. 4
Stack v Dowden [2007] UKHL 17; [2007] 2 AC.
5 The House of Lords decision in Stack v Dowden (ibid) and the Supreme Court decision in Jones v Kernott [2011] UKSC 53; [2012] 1 AC 776. 6
Lloyds Bank plc v Rosset [1990] UKHL144; [1991] 1 AC 107.
7
Pettitt v Pettitt [1970] AC 777.