Constructive trusts and benefit fraud

An excellent article in the Solicitors Journal

Is well worth a read, if you have a problem involving benefit fraud and property problem with something held in somebody else’s name.

The Court of Appeal judgment in O’Kelly v Davies clarifies the law.

In that case the property was initially owned in the joint names of
the claimant and defendant, who lived in the property together. The property was then transferred into the sole name of the defendant.

This was done, as the judge said, ‘the better to enable the [defendant] to make fraudulent claims for benefit’.

Nevertheless, the judge found that the claimant was beneficially entitled under a common intention constructive trust. The defendant appealed on the grounds that the claimant had relied upon the parties’ unlawful agreement to assert his interest.

The Court of Appeal rejected this submission – the finding of a constructive trust arose not from the unlawful agreement but from the common intention of the parties as inferred from their conduct: Tinsley v Milligan [1994] 1 AC 340 applied.

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