Binions v Evans [1972] Ch 359

• Defendant was allowed to have a lifelong rent-free lease by X but that the agreement could be determined with not less than 4 weeks notice. This was described in the contract as making Defendant a tenant at will.

• X then sold the house in which Defendant lived to Plaintiff, “subject to” the lifelong lease, for which Plaintiff paid a reduced price. Plaintiff then tried to have Defendant evicted - gave notice and claimed, after her continued occupation beyond the 4 weeks, that she was trespassing.

• CA denied Plaintiff’s claim, holding that Defendant was entitled to reside in the house until her death.

  • CA held that purchasers with notice take property as constructive trustees for their person subject to whose right the property is sold. 

  • It held that contractual descriptions were inconclusive and that Plaintiff undertook a constructive trust to allow Defendant’s residence there, due to the words “subject to”.  

Lord Denning MR

In these circumstances, this court will impose on the plaintiffs a constructive trust for her benefit: for the simple reason that it would be utterly inequitable for the plaintiffs to turn the defendant out contrary to the stipulation subject to which they took the premises.

• A purchaser can take “subject to” the other party’s right either expressly (where the contract so provides) or impliedly. 

• In either case a constructive trust can be imposed. 

• NB other judges worked on the basis that Defendant was a tenant for life and therefore there was no need for a constructive trust.