Proprietary Estoppel And Constructive Trusts

Specifies that trusts can be made if they follow the requisite formalities, ie. there is a formality requirement. English land law has struggled to cope with informality.

Constructive, resulting and implied trusts do not need to be in writing. See the case of Hodgson v Marks.

...inchoate until it is crystallised by the courts.

...when the detriment is incurred.

Unlike promissory estoppel, it can be used to create a cause of action. It is an equitable remedy which will operate to prevent the legal owner of the property from asserting their strict legal rights when this would be inequitable. There are three required elements as set out in Taylor Fashions Ltd v Liverpool Victoria Trustees (1982); 1) representation/assurance, 2) an act of detrimental reliance, 3) unconscionable denial of the claimant's right.

Can be implied when there is no declaration of trust, when the trustee has induced another to act to their detriment in the belief that doing so will allow them to generate a beneficial interest in the land. Best case to demonstrate this is Gissing v Gissing. It overlaps with proprietary estoppel because both require a detriment and involve an assessment of unconscionability.

Cobbe argued that YR had encouraged him to incur great expense and time in obtaining planning permission. Agreement was reached in principle, that C would help YR to secure planning permission and then they would transfer the land to him in exchange for £12m. After this C would develop houses and sell them. Anything that was earned over £25m would be halved with YR. YR refused to go through with the transfer.

C made a claim for proprietary estoppel (also constructive trust, breach and unjust enrichment). He was only successful in his claim for unjust enrichment as YR had utilised his services and benefited from them and failed to pay. House of Lords held that there had never been any expectation to receive property, only the right to sell and to obtain planning permission. Therefore no proprietary right was ever created and, thus, there can be no case for proprietary estoppel.

Claimant believed that he would inherit the farm when its owner died. He had worked unpaid on the farm for over 30 years. Based on non-explicit but obvious communication with the owner he had formed the assumption that he would inherit it. Upon the death of the owner, the farm passed on via statute but not to the claimant. The claimant engaged the equitable doctrine of proprietary estoppel.

Held that it did not matter whether the promise was clear and unequivocal, as is a requirement for promissory estoppel. Proprietary estoppel can only operate on identified property which can fluctuate in value. HoL allowed claimant to inherit property.

J worked 30 years as a gardener/odd job man for X. Payments stopped, but J was told ‘he would be all right one day’. X died. J claimed estate from R, the administrator. Proportionality was essential between expectation and detriment in deciding how to satisfy an equity based on proprietary estoppel. X awarded £200k; value of house. Estate at £1.2m or house at £450k too much. LJ Aldous; 'The task of the court is to do justice. The most essential requirement is that there must be proportionality between the expectation and the detriment.'

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North East Property Buyers; sell property for X£, and in return you shall be granted an assured shorthold tenancy. Promises made; you shall not be evicted if rent is paid. Transaction carried through, and estoppel is satisfied. Reliance/detriment. NEPB have to take out a mortgage with Southern Pacific. NEPB go down, and Southern Pacific want the property. Land registration issues arise in this situation. Question; does S116 operate to create an estoppel, before the mortgage?Lord Collins;The purpose of section 116 of the 2002 Act was to make it clear that the rights which arose after detrimental reliance were proprietary even before they were given effect by the court.S116 is subject to the priority rules in the 2002 Act, and takes the matter no further. It also begs the question as to when “the equity arises as an interest capable of binding successors in title” and probably assumes that it first arises (as it usually does) as against the legal owner who is estopped or who is bound by the equity.

A couple cohabited a property, the claimant having given up a secure tenancy to move in with her partner. The couple had no explicit discussion as to the ownership of their home.

Could the defendant be estopped from denying his cohabitee’s interest in having a secure home for life?

Yes. An equity in proprietary estoppel does not need to arise from a recognised proprietary interest; it may be from a personal interest. £28,500 awarded. Unconscionability assessments involve balancing expected benefits and detriment.

Told woman she was not on deeds because she was younger than 21. She had helped do up the place (with a 14lb sledgehammer) whilst pregnant. Claim accepted: Given 1/3. Would not have done the work unless she thought she would get an interest.Denning cites Gissing; A resulting, implied or constructive trust is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land. Mr Eves conduct was a recognition that she was entitled to a share in the house, equivalent in some way to a declaration of trust; not for a particular share, but for such share as was fair in view of all she had done and was doing for him and the children and would thereafter do. I think, be most inequitable for him to deny her any share in the house. The law will impute or impose a constructive trust by which he was to hold it in trust for them both

The husband was a sole legal owner. Wife did housework, paid for utilities. Burns gave her a living allowance. Not entitled to a beneficial interest.Fox LJ the facts do not justify the conclusion that the property was acquired by the joint efforts of the parties. She lived with him for 18 years as man and wife, and, at the end of it, has no rights against him. But the unfairness of that is not a matter which the courts can control. It is a matter for Parliament. Fox LJ (rejected by Lord Bridge in Rosset): Four ways of getting an interest: Paid towards purchase; Paid towards mortgage; Paid towards deposit; Paid bills to allow husband to pay the mortgage. However, Burns was rich and didn’t need help- seems unfair.

House in Mr. Rosset’s name, becoming legal owner. In order to buy property, couple get mortgage from Lloyd’s Bank. Money is also taken from Swiss family trust. Trust say no wife on tenancy. Rosset spends a whole lot of time and effort on this task. Rosset argues that she has an interest in property, and wins in CoA, loses in HL. Lord Bridge establishes principle of constructive trusts. The fundamental question is whether, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement to share in this sense can only be based on evidence of express discussions between the partners, however imperfectly remembered and imprecise Usually easy to establish express common intention. Usually not on deeds due to deception. Eves v Eves; under 21, not on title deedsGrant v Edwards; not on title, because it will effect divorce settlementCourt apply a ‘but for’ test; But for excuse, female partner would have been on title deeds. Courts are not finding a true common intention, it’s a judicial construct. ‘But for’ deception, there would be common intention. This was the position until Curran v Collins.

Young love. Couple marry. Contributions to mortgage made, unequally and individually. Keep separate bank accounts, separate savings & investments. Are these facts sufficiently unusual to disturb the presumption as to equality? HL/SC say that this situation is unusual. It is unusual for parties to not pool their income together. Miss Dowden had paid a greater share of the property, and could demonstrate this, showing she paid 65%. This is what she received. Stack v Dowden leaves the position of imputation uncertain.

The parties' relationship broke down and the defendant excluded the claimant from a residential property. He denied that she had any claim to any of the three properties in which they had spent time together. D had bought property in his sole name. He also denied that C had a half share in a business. The claimant brought proceedings, claiming that there was an agreement or understanding that she should have a half share in the propertiesClaim was dismissed on facts. Agreed with trial courtMs Curran did not act in any way to her detriment in reliance on the Excuse or at all. On this appeal Ms Curran does not pursue any argument either that the judge should not have made any such finding or that detrimental reliance is not required in law.Lewison LJ: [I]t cannot be right that the giving of a reason why someone is not on the title deeds inevitably leads to the inference that it must have been agreed that they would have an interest in the property. If one who is not versed in the difference between legal and beneficial ownership asks to be on the deeds and is told “No”, the more usual inference would be that they would have understood that they were not to become owners or part owners of the property.

53 Instruments required to be in writing.(1)Subject to the provision hereinafter contained with respect to the creation of interests in land by parol— (a)no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law; (b)a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will; (c)a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will. (2)This section does not affect the creation or operation of resulting, implied or constructive trusts.

(2) This section does not affect the creation or operation of resulting, implied or constructive trusts.

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With resulting, you get back what you paid. Withconstructive, they look at if one owns half of the property, or 60% etc.