Key takeaway

The High Court of England and Wales has revisited the principles governing constructive trusts in Uddin v Uddin [2026] EWHC 150 (Ch), overturning a County Court decision which had treated an informal family arrangement as sufficient to alter beneficial ownership of property.

The judgment illustrates that where parties seek to rely on oral agreements to change beneficial interests, equity will only intervene in limited circumstances. A shared understanding, even if clearly established, will not be enough on its own. What is required is evidence that the party seeking to rely on that agreement acted on it to their detriment in a way that is both real and substantial.

What was the background to Uddin v Uddin?

The dispute concerned two brothers and a residential property in Hayes. The property was acquired in 1999 and, although it was initially registered in one brother’s sole name due to mortgage constraints, the common intention was that it would be owned equally. That position was later formalised when the property was transferred into joint names, supported by an express declaration of trust confirming equal beneficial ownership.

Overtime, disagreements arose in relation to the property, including contributions towards costs and its use by family members. In 2007, the brothers attended a family conciliation meeting at which a potential resolution was discussed. It was said that one brother agreed to transfer his beneficial interest to the other, who in turn would abandon claims relating to expenditure on the property.

That arrangement was never formally documented. As with many informal property ownership arrangements, the absence of clear written terms later became central to the dispute.

Matters became further complicated when a purported transfer of the property into sole ownership was later found to be forged, and the register was corrected to restore the original joint ownership position. The issue also highlights the importance of being alert to property fraud risks, particularly where title documents or ownership records are changed.

Why at first instance court found a constructive trust

At first instance, the court found that the discussions at the conciliation meeting gave rise to a new constructive trust in favour of one brother. The reasoning was that both parties had relied on the shared understanding to their detriment: one by agreeing to give up his interest, the other by agreeing to forgo claims for reimbursement.

On that basis, the court concluded that the arrangement was sufficient to alter the beneficial ownership of the property.

The High Court’s approach

On appeal, that reasoning was not upheld. The High Court identified a fundamental issue in the way the concept of detriment had been applied.

What are the requirements for a ‘constructive trust’?

A constructive trust of this nature requires both a common intention and detrimental reliance. The existence of an agreement does not remove the need to establish that reliance, nor does it lower the threshold for what counts as detriment.

The High Court drew a clear distinction between entering into a bargain and acting in reliance on it. Agreeing to give something up as part of a reciprocal arrangement is not, without more, evidence of detrimental reliance. It is simply the consideration for the agreement. The relevant question is whether the party seeking to rely on the trust then took steps, or refrained from acting, in a way that left them materially worse off because they believed the arrangement would be carried through.

Why detrimental reliance matters in constructive trust claims

Detrimental reliance cannot be established by pointing to the terms of the agreement itself. The focus must be on what followed, what was done in reliance on the shared understanding, and whether that conduct resulted in a real disadvantage.

The High Court also noted that the first instance decision had concentrated on establishing that an agreement had been reached, without properly addressing whether there had been any meaningful reliance on that agreement. In addition, the analysis had focused on what one party had agreed to give up, rather than on whether the other party had suffered detriment as a result of relying on the arrangement.

On the facts, there was no clear finding that the party asserting sole ownership had acted in a way that left him substantially worse off. In the absence of such evidence, the basis for a constructive trust was not made out.

How section 53 of the Law of Property Act 1925 applies to beneficial interests

The decision sits within the framework of section 53 of the Law of Property Act 1925. As a general rule, a disposition of an existing equitable interest must be in writing and signed. Constructive trusts operate as an exception to that requirement, but only where the necessary elements, common intention and detrimental reliance, are properly established.

The requirement for writing cannot be avoided simply by pointing to an informal agreement. Without clear evidence of reliance and resulting detriment, the statutory formalities will apply.

What was the outcome in Uddin v Uddin?

The appeal was allowed. The court indicated that the matter may need to be remitted to determine whether there was sufficient evidence of detrimental reliance, or alternatively to proceed on the basis that the parties retained equal beneficial interests, with any further issues to be resolved by way of sale or accounting.

Practical lessons for informal property and family ownership arrangements

Although the case concerned a residential property, the issues will be familiar in many family and business contexts, including farming arrangements. Informal discussions and assumptions about ownership are common, particularly where relationships are close and longstanding.

This decision is a reminder that such arrangements carry real risk. Equity will not readily give effect to informal bargains unless the requirements for a constructive trust are clearly met.

Where disputes arise within families, parties may also wish to consider mediation in family disputes before positions become entrenched.

How to protect changes to beneficial ownership in property

Where beneficial interests are intended to change, the safest course remains to record that intention clearly and formally. Without that, the parties may find that, when the relationship breaks down, the court is left to determine ownership after the event, often at significant financial and personal cost.

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Please contact the dispute resolution team at Barnes Law for advice on trusts disputes.

Authored by Yulia Barnes.