Bannister v Bannister [1948] 2 All ER 133
Constructive trust of land; oral agreement to allow vendor to occupy a house rent free.
Facts
Ms Bannister inherited two cottages upon the death of her husband including the one in which she lived. She sold both cottages to her brother-in law for at least £150 less than market value after he gave an oral undertaking that she could remain living in her cottage rent free, for as long as she wished. Her brother in law then sought to evict her from the cottage.
Issues
Ms Bannister claimed she held a beneficial life interest in the cottage which arose as soon as her brother in law gave the oral undertaking that she could remain in the property rent free, for as long as she wished. Mr Bannister claimed there was no valid trust over land because it had not been evidenced in writing, as required under s53(1)(b) Law of Property Act 1925. He also claimed that his purchase of the two cottages had not been fraudulent and he was, therefore, entitled to insist on the true construction of the conveyance as having transferred both legal and equitable title to him.
Decision/Outcome
Mr Bannister held the cottage on constructive trust for Ms Bannister who held a life interest in the property, and could remain there rent free. Ms Bannister only agreed to sell the property at an undervalue because of the undertaking that she could remain there. It would be fraudulent of Mr Bannister to insist on the absolute character of the conveyance to defeat Ms Bannister’s life interest, and a valid trust of land had been created despite it not having satisfied the formality requirements of s53(1)(b) Law of Property Act 1925.
Updated 20 March 2026
This case summary remains legally accurate. Bannister v Bannister [1948] 2 All ER 133 is still good law and continues to be cited as a leading authority on constructive trusts arising from oral undertakings in land transactions. The principle that a constructive trust can arise to prevent fraudulent reliance on the absence of written formalities remains well established and has been affirmed in subsequent case law, including Lyus v Prowsa Developments Ltd [1982] and later authorities on constructive trusts of land.
The statutory reference to s53(1)(b) of the Law of Property Act 1925 is correct; that provision remains in force and unchanged. The relevant exemption for constructive trusts is found in s53(2) of the same Act, which the courts applied in this case. That provision also remains in force. Readers should note that this case concerns a life interest arising under a constructive trust, a proprietary concept that should be distinguished from the more commonly litigated common intention constructive trusts arising in cohabitation disputes, which are governed by a distinct line of authority developed primarily through Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53.
