Agreement Without Reliance: The Limits of Constructive Trusts

Jamal Uddin v Fakar Uddin [2026] EWHC 150 (Ch)

In a judgment handed down on 30 January 2026, Mr Justice Johnson allowed an appeal against a finding that two brothers had varied an express declaration of trust by oral agreement at a family conciliation meeting. The decision is a valuable restatement of the principles governing common intention constructive trusts, and in particular, the role of reliance.

Background

The dispute was in relation to the beneficial ownership of a residential property in Hayes. The property was purchased in 1999 by Mr Jamal Uddin. The trial judge found that the underlying intention was for Mr Jamal Uddin and his brother, Mr Fakar Uddin, to hold the property jointly in equal shares. That intention was formalised in October 2002, when the property was transferred into joint names.

In December 2007, the brothers participated in a Bisar, which is a traditional family conciliation process convened to resolve a number of outstanding disputes. The trial Judge found that during the Bisar, the brothers had agreed that Jamal would give up his beneficial interest in the property in exchange for Fakar abandoning any claim to an account in respect of his historic expenditure on it. The judge concluded that this agreement gave rise to a new constructive trust under which Fakar became the sole beneficial owner. Jamal’s claim under the Trusts of Land and Appointment of Trustees Act 1996 was accordingly dismissed.

The Issue on Appeal

The appeal raised the important question of what precisely is required for a common intention constructive trust to arise where parties seek to vary a pre-existing beneficial interest in land.

Section 53(1)(c) of the Law of Property Act 1925 provides that any disposition of a subsisting equitable interest must be in writing signed by the person disposing of it. The exception preserved by section 53(2) is the creation or operation of resulting, implied or constructive trusts. The critical question was whether the events at the Bisar were sufficient to engage such an exception.

The Court’s Analysis

The Judge reaffirmed that the common intention constructive trust requires two distinct elements: (1) a shared intention as to beneficial ownership; and (2) detrimental reliance on that intention by the party seeking to assert the trust.

Detriment, in this context, must be substantial and must arise as a consequence of the common understanding. As Lord Briggs put it, “without reliant detriment there is simply no equity at all”.

Applying those principles, the Court identified a flaw in the trial judge’s reasoning. While the trial judge had found that the brothers had reached an agreement at the Bisar, he had not made any findings as to what Fakar had actually done, or refrained from doing, in reliance upon it. The “detriment” identified in the judgment was no more than Fakar’s side of the bargain itself, namely his agreement to forgo any claim for an account. In essence, the distinction which the Court identified is that when a party agrees to give up something in an agreement, it is not the same as what that same party actually does in reliance on it. It is that reliance that makes it unconscionable for the other side to go back on their word.

Practical Significance

The judgment is a reminder of several principles of importance to anyone advising on property held within families or other informal arrangements.

The requirements set out by section 53(1)(c) of the Law of Property Act 1925 are not a technicality. They should not be lightly displaced by oral agreement. Where parties wish to vary the beneficial ownership of property, they should record the variation in a properly drafted written instrument.

The constructive trust exception is narrower than sometimes assumed. An oral agreement to vary beneficial ownership is not sufficient. There must be evidence of conduct, undertaken in reliance on the agreement, which has left the claimant in a substantially worse position than they would otherwise have been in.

Finally, disputes of this kind are rarely resolved by reference to the moment of agreement alone. They often turn on what each party did, said, or assumed in the months and years that followed. Contemporaneous documentation is invaluable, and any absence of it can be critical.

Conclusion

Uddin v Uddin does not break new doctrinal ground, but provides a careful reminder regarding the application of established principles to the kind of informal family arrangement that leads to litigation.

For families and individuals contemplating any variation of beneficial interests in property, the best protection against any future disputes is a properly drafted written document. Our team regularly advises on declarations of trusts, deeds of variation, and related property and trust matters involving any disputes.

This article has been written by Abdullah Suker, Managing Director of Lyon Croft Law.