Family Property

 No concept of community of family property in English law, i.e. husband and

wife / civil partners don’t automatically own half each of family home / other
assets.
 If relationship comes to end, courts can make property adjustment orders,
making one party transfer their interest to other.
 Basis of court order is to assess parties’ future needs and try to accommodate
them.
 Cohabiting partners treated differently: who owns property and in what
proportion is of crucial importance as there is no power to order a transfer
from one party another; necessary to discover who owns what (if house is in
joint names, held as joint tenants, usual inference will be parties own half
each).
 Various questions may arise:
1. If house is in one party’s name (“Y”) but other (“X”) has made
a contribution to purchase price, should X not be bale to claim
an interest in the house?
2. What sort of contribution by “X” is sufficient to merit a claim?
3. Assuming “X” is found to have an interest, how does one
quantify it?
 Answers to these are supplied by: resulting and constructive trusts, and
proprietary estoppel when appropriate.
 NOTE: what if “X” transfers assets to “Y”? e.g. through a sale or a
gift, and there is no evidence of “X’s” intention?  there are
presumptions known as presumptions of resulting trusts and
advancement, these help determine nature of the transfer.

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CHAPTER 1 Overview of Resulting Trusts

 Resulting trusts are a type of implied trusts.

 These are implied where person transfers property or money to another in
circumstances where it is unclear who owns beneficial interests.
 Transferee holds property or money on resulting trust for transferor.
 X transfers property to Y but unclear who is to own beneficial interest; Y
holds property on resulting trust for X, who has the equitable interest;
basically equitable interest “jumps” back to (or may never leave) the settlor
(effectively the last person who owned the given property should be deemed
to continue to be its owner).

Girozentralle v Islington

FACTS: during rate capping of local government finances, a number of local

authorities turned to unorthodox ways or raising capital to avoid this legislative
control. Islington Council contracted with claimant bank for what was in effect a loan,
but formally an interest rate swap (it had a speculative element). Such agreements
were deemed ultra vires and accordingly void. Bank sought return of monies
advanced pursuant to void agreement and compound (not just simple) interest. At that
time, it was not possible to obtain compound interest except where remedy was
proprietary. Bank argued though monies paid towards a void contract were held on
resulting trust for payer.

HELD: all agreed there could not be a resulting trust because trusteeship requires
consequence of recipient to be affected. Since the council did not know of the ultra
vires problem when they entered into the agreement, there could be no trust. The
outcome followed from applying the presumptions of resulting trusts. An automatic
resulting trust arose when an express trust failed to dispose of the whole equitable
interest, which was not the case here. A presumed resulting trust, which was relevant
here, arose when transferor could be presumed to have intended to create a trust rather
than an outright transfer. On the facts, the bank had intended to part with the money
so the presumption of resulting trust was rebutted.

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 A resulting trust arises in two sets of circumstances:

1. Voluntary transfer / purchase money cases (i.e. presumed trust

cases): where A makes a voluntary payment to B or pays (wholly or in
part) for the purchase of property vested in either B alone or in their
joint names, here a presumption arises that A did not intend to make a
gift to B the money or property is held on trust for A (if sole
provider of the money) or in case of joint purchase by them both in
shares proportionate to their contributions.

 NOTE: presumption may be rebutted by either:

a) A counter-presumption of advancement; or
b) Direct evidence of A’s intention to make an outright
transfer (though necessary to consider whether
evidence is admissible in court).

2. Incomplete disposal of trust’s equitable interest (i.e. automatic

resulting trust): arises where an express trust has failed to dispose of
the whole equitable interest.

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CHAPTER 2 Voluntary Transfer / Purchase Money Cases

 This arises where X transfer’s property, which he owns, to Y for no

consideration.
 May be presumed X intended Y to hold property on resulting trust for X.
 Equitable interest remains with X, the settlor, but the legal title is transferred
to Y to be held as trustee.
 Presumption of resulting trust may arise where X provides purchase money for
property to be purchased in the name of Y or in both their names, so in
purchase money cases, X buys new property and arranges for seller to convey
property straight to Y instead, but it’s presumed that X intended Y to hold
resulting trust for X (as they provided purchase money).
 NOTE: this is strange, as obvious inference to draw would be X intended to
make an outright gift, but there is a historical reason for the presumption, i.e.
in 16th centaury it was common for people to convey property in this way as a
means of avoiding taxation and undesirable inheritance laws, so whenever
person conveyed property without consideration, it was presumed he intended
a resulting trust for himself.
 Presumption of resulting trust not applicable when parties closely related, e.g.
when father transfers property to his child; where equity regards transferor (X)
as being under obligation to provide for transferee (Y), counter presumption of
advancement is applied  the presumption of X intending a gift to Y.

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ACTIVITY 1 Structure for Voluntary Transfer Cases

 Three stages when determining what happens to property in a voluntary

transfer or purchase money case.

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1. The Presumption of Resulting Trust
1.1 Voluntary Transfers

 X transfers property to Y without consideration being supplied by Y, no

evidence as to X’s intention when making transfer.

Thavorn v Bank of Credit

FACTS and RATIO: resulting trust was found to exist where a woman opened a
bank account in favour of her infant nephew. In 1981 Mrs Thavorn opened an
account with £20k in her nephew’s name. She directed the bank that she alone
was to operate the account. Lloyd J said in these circumstances there was no
evidence to rebut the presumption of a resulting trust: “there was not the slightest
evidence on which I could hold that, by opening the account in his name, she
intended to transfer any beneficial interest to him during her lifetime”. The bank
was liable to pay damages when they paid money into his current account.

QUESTION: what were the aunt’s motives, if they were fraudulent could she still
benefit from the presumption?

 NOTE: the presumption has limitations:

1. Only applied in absence of evidence of X’s intentions;

2. May be rebutted; and
3. Less likely to apply if property in question is realty.

 Section 60(3) of the Law of Property Act 1925 “in a

voluntary conveyance a resulting trust for the grantor shall not
be implied merely by reason that the property is not expressed
to be conveyed for the use or benefit of the grantee”

 General view is that it is possible for there to be a

resulting trust, but there must be some additional factor,

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 e.g. the fact the parties were strangers would point to a
resulting trust.

1.2 Purchase money cases

 If X purchases property in the name of Y, there is a presumption that X

intended Y to hold on a resulting trust for X.

Abrahams v Trust in Bankruptcy of Abrahams

FACTS: Mr and Mrs Abrahams joined National Lottery syndicate. Each person
became a member and each members weekly contribute was £1. Membership was
15 in total. There were no written rules, nor any formal meetings of the members.
Mrs A left her husband later. At the early stage after their parting, Mrs A
continued to pay £1 a week as her membership of the syndicate and a further £1
per week for her husband. Later, after a row with Mrs A, Mr A refused to repay
Mrs A for subscriptions paid on his behalf. Nevertheless, Mrs A continued to
make £2 per week contributors for herself and her husband. There was no secrecy
about the amount and extent of her contribution and no syndicate member
objected. Mrs A intended that if there should be any substantial wills, she would
be entitles to two shares rather than one. Mr A was declared bankrupt later. The
syndicate won X amount. Mr A’s trustee in bankruptcy claimed Mr A’s one-
fifteenth share.

HELD: Mr A held his share on resulting trust for Mrs A. There was no intention
of gift to rebut the presumption of resulting trust. Thus, Mr A’s share belonged in
equity to Mrs A, and was not available for Mr A’s creditors. There was little or no
evidence to rebut the presumption of resulting trust in favour of Mrs A.

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 Parrott v Parkin

FACTS: X and Y purchased a yacht, registered in X’s name even though Y had paid
55% of purchase price.

HELD: X was holding yacht on trust for Y, no evidence of gift.

COMMENT: case showed the presumption applied to a chattel, i.e. a yacht.

 Where cohabitees contribute to purchase of a house with intention of living

there together, but house is to be transferred into sole name of one cohabitee,
applying resulting trust principles there is a presumption the person whom to
the house is transferred holds the legal title on a resulting trust for their partner
and themselves (both being providers of purchase money) in equity; under the
resulting trust, each would have an equitable interest in the house
proportionate to their contributions; NOTE: in a resulting trust, “you get what
you paid for”.

Curley v Parkes

RATIO: payment must be part of the purchase price (not, say, legal fees etc.) and it
must be made at the time of the initial purchase. Payment of the whole or part of the
deposit or any other contribution to the purchase price at the time of the purchase will
qualify. Many purchases are funded by a mortgage loan which is gradually repaid in
monthly instalments; payment of mortgage instalments and other outgoings after the
date of the purchase will not give rise to resulting trust.

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  NOTE: if unmarried couples split up, courts may have to determine ownership
of their former home, but courts are moving away from using resulting trusts
as means of determining shares of cohabitees in the home, recent cases have
been decided on basis of constructive trusts instead.
 Resulting trusts have a part to play where parties buy property as an
investment rather than a home for themselves.

Laskar v Laskar

FACTS: a mother and daughter bought a house together, which they let to tenants.
The value of the house was £79k but was bought at a discount of £50k owing to
mother’s previous occupation as a secured tenant. The daughter paid £3k, and £43k
came from a mortgage loan, and the mother paid remainder. The daughter claimed a
joint beneficial interest in the property.

HELD: generally where members of family purchased property in their joint names,
there would be a presumption of equal interest, but that this would not apply where
property was purchased as an investment when the beneficial interest would reflect
their respective contributions to the purchase price by virtue of a resulting trust
analysis. Consequently, the mother’s discount was reflected in her interest. Since the
mortgage loan was taken out in their joint names and they were jointly and severally
liable for repayment they had an equal interest to the extent of the mortgage loan. The
court said the daughter should have a one-third beneficial interest and this was
thought to be a fair result.

COMMENT: not argued the presumption of advancement applied, and the Court
suggested that that was correct, apparently because the daughter was over 18 and
managed her own financial affairs.

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2. The Presumption of Advancement (Gift)

 In some circumstances starting point is not presumption of resulting trust but

rather presumption of advancement, i.e. gift.
 Where the parties are related, the presumption of a resulting trust may be
overridden by a “presumption of advancement”.
 This is a nineteenth century rule under which a man who gives property to his
fiancée, wife or children is presumed to do so by way of a gift, unless a
contrary intention can be found.
 The presumption is a narrow one: it only applies to gifts by husbands, fiancés
and fathers; not to gifts by wives, or mothers; nor does it apply to gifts to
grandchildren or co-habitants.
 IN SHORT: the presumption of advancement applies in three situations:
1. When father makes voluntary transfer or purchases in name of his
child, the child may be an infant or an adult but must have been born to
parents who were married to each other;
2. When a person in loco parentis makes a voluntary transfer or purchases
in the name of a child; a person is in loco parentis if he has taken on a
father’s responsibility to provide financially for the child.

Bennet v Bennet

FACTS: concerned a transaction between a mother and her son and the presumption
of advancement in equity. The mother wanted to help her son who was in some
financial difficulty. Consequently, she gave him £300 in the way of loan.
Unfortunately, the son went bankrupt anyway and could not pay his debts. The trustee
in bankruptcy tried to claim what was left of his money.

ISSUE: the mother argued there could not be a presumption of advancement, as he

had only loaned her son the money and this sum of £300 should be returned to her.
the question was whether there was a presumption of advancement between the
mother and son or if the money was held on a resulting trust for the mother.

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HELD: the money she had given his son was a loan to help him deal with his
financial difficulties. Additionally, in equity, there was said to be no presumption of
advancement between mother and her child, as there was no moral obligation for a
mother to provide for her child. This could only be a father or a male figure. The £300
sum was held on a resulting trust for the mother as a consequence.

3. When a husband makes a voluntary transfer or purchases property in

the name of his wife and where a finance makes a voluntary transfer or
purchases in the name of his fiancée.

Pettitt v Pettitt
*?
FACTS: a woman purchased a matrimonial home for herself and her husband to live
in out of her own sums and conveyed the home into her own name. They cohabited
the home together, during which the husband made alterations and improvements to
the home. Following their divorce, the former husband claimed that he had a
beneficial interest in the home as his contributions to the property increased its value.

ISSUE: whether a spouse could claim an equitable interest in a matrimonial home in

which they had no legal interest, by virtue of their decorations and improvements to
the home, to entitle them in a share in the proceeds of sale of property.

HELD: improvements made to the home did not entitle the husband to an equitable
interest in the property. The voluntarily undertaken improvements and decorations of
a family home served the purpose of making “the home pleasanter for their common
use and enjoyment”. In the context of a family home, the court cannot impute an
implied common intention between spouses that regular and/or leisure undertakings to
decorate a home can alter existing proprietary rights in the home; the conduct of the
spouses does not give rise to such an intention and it was only claimed after
matrimonial difficulties occurred. The court dismissed an argument there is a
presumption to treat payments made from a husband to a wife as advancements
as being out-dated and motivated by policy concerns of a different social era. The
husband thus had no equitable interest in the matrimonial home.

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  The presumption of advancement, i.e. gift, may be rebutted easily in the
appropriate circumstances.

McGrath v Wallis

FACTS: a father (who was unemployed at the time) and son both provided some of
the purchase money to buy a house. The house was conveyed into the son’s name
alone at the request of the mortgage provider, who did not lend to people of the
father’s age. When the father died, the son claimed the father’s contribution to the
purchase price was a gift to him by reason of the presumption of advancement.

HELD: argument was rejected. The reason for the house being in the son’s sole name
was a technicality; it was not a gift, and so presumption of advancement was rebutted.

COMMENT: generally there is presumption of advancement when father purchases

property in the name of his child but its weak, it has been described as “a judicial
instrument of last resort” and can be rebutted by slight evidence, it would apply on if
there was no other evidence.

 NOTE: presumptions of resulting trust and advancement just allocate evidence

burden of proof; they are just a starting point and hold good only pending facts
to the contrary.

3. Rebutting the Presumptions of Resulting Trust and Advancement

 Surrounding circumstances at the time of transaction might suggest

appropriate presumption should be rebutted.
 Strength of the evidence needed to rebut depends on those circumstances.
 Evidence a gift or loan was intended would rebut a presumption of resulting
trust.
 Evidence X intended to retain some power over property suggests a resulting
trust.

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  More likely to be a resulting trust if X and Y are strangers than family
members.
 Explanation as to why property was put into Y’s name could exclude
presumption of advancement (McGrath v Wallis).

Marshal v Crutwell

FACTS and RATIO: a husband (H) in poor health converted his bank account to a
joint account, giving his wife (W) power to draw cheques. W did subsequently draw
on the account for household expenses, but always at H’s direction. On H’s death, W
claimed the balance of the account by right of survivorship, but judge said H had
never intended to give W ownership. On the evidence, the joint account was solely for
convenience and created no presumption of advancement.

Warren v Gurney

FACTS: the appellant, at that time single, was engaged to be married to her present
husband. In that year her father bought a house called “Fairview” and paid £300 for it.
The conveyance was taken in the name of the appellant though the father retained the
title deeds that were still in his possession at the time of his death. The appellant
claimed to be entitled as the owner of “Fairview” to the possession of the title deeds.
The respondents, executors of the will of the appellant’s father, denied the appellant
was the owner of “Fairview” and contended she was a trustee of the property of her
father.

HELD: though obvious inference was that property was a gift for daughter’s
wedding, the father had retained the title deeds until his death, and there was actually
evidence the father intended his son-in-law to repay the cost of the house too.

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(where a parent “helped out” with the purchase of a family home for a child,
only to regret having done when child’s marriage or relationship ends)

Loosemore v McDonnell

FACTS: father helped son and daughter-in-law financially to purchase home and at
the time father confirmed he claimed no interest in the money and no wish to secure
money by way of charge over property. The son and daughter-in-law divorced and
father sought to claim presumption of resulting trust.

HELD: insufficient evidence to allow resulting trust presumption, and so the

presumption was actually rebutted. The father-in-law confirmed he claimed no
interest in the money, and had no wish to secure money by a charge over the house,
this was clear evidence a gift, and not a loan, was intended, since if a loan is intended
it should be evidenced.

 NOTE: claimants attempting to rebut relevant presumption may produce in

evidence only acts done and statements made AT, or BEFORE, the time of the
transactions, not subsequent ones.

Shephard v Cartwright

FACTS: father caused shares in a company to be allocated for himself, the wife and
his three children. At all material time, the father was in control of the family’s
financial concerns and the divisions were created for to reduce the amount of tax
payable on dividends declared over those shares. The wife and children at all material
time consented to the arrangement, including executing the power of attorney to
facilitate the withdrawal of money. Dividends from the shares allocated with the
children were treated as their income. It was argued on behalf of the father’s estate, in
resisting the children’s claim to be entitled to the money, the father’s conduct showed
an intention not to vest beneficial interests with the children. This being so, the money
was thus kept under a resulting trust in favour of the father.

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HELD: claim was rejected. There was nothing in the father’s conduct that was truly
inconsistent with the presumption. The facts adduced did not rebut the presumption of
advancement. The father could not resort to the help of his subsequent treatment of
the shares and dividends; neither could he rely on the fact the children signed
documents at their father’s instruction plainly without understanding what those
documents’ meant. As a consequence, the father’s executors were required to hold the
shares on trust for the children to give effect to the presumed advancement.

JUDGEMENT: “acts and declarations of the parties before or at the time of the
purchase, or so immediately afterward as to constitute part of the transaction, are
admissible in evidence either for or against the party who did the acts or made the
declaration [...] but subsequent declarations are admissible only against the party who
made them, and not in his favour”.

COMMENT: this decision in Shepard can be contrasted with that in Warren v

Gurney, whereby the court took the retention of the title deeds and document headed
“my wish” which purported to leave the house divided between his three daughters to
rebut any presumption of advancement in favour of the appellant. The difference
between these two cases is difficult to isolate in the abstract, it only is really by
considering the evidence presented to the judge one may consider them.

(OBITER- where property is put into a solicitor’s name perhaps more likely a
resulting trust as opposed to a gift)

Fowkes v Pascoe

FACTS: Mrs Baker transferred property into the joint names of herself and her
daughter-in-law’s son by the daughter-in-law’s second marriage. There was a close
relationship between Mrs Baker and her daughter-in-law, which was not diminished
when the daughter-in-law remarried. She regarded the children of the second marriage
as being members of her family (i.e. like her grandchildren). When Mrs Baker died,
the question arose as to whether the son held the property on resulting trust for Mrs
Baker’s estate.

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HELD: the presumed resulting trust (transfer without consideration) had been
rebutted on evidence that actually the transfer was a gift.

(remitting dividends may be evidence of a resulting trust – but actually it may

not be held as such, categorically though)

Lord Grey v Lardy Grey

FACTS and RATIO: the court held a conveyance of real property from a father to
his adult son created the presumption of advancement. This presumption was not
rebutted when the son allowed the father to receive the rents from the land. Such
conduct was treated as an “act of reverence and good manners”.

CHAPTER 3 Incomplete Disposal of a Trust’s Equitable

Interest

 Resulting trusts of this type arise where:

1. Settlor transfers property to trustees on trust; but

2. Does not dispose of all or part of his equitable interest (e.g. because the
declared trusts are void or do not exhaust the trust fund).

 Trustees will hold the property on a result trust for the settlor.

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ACTIVITY 2 Examples of a Failure to Dispose of Equitable Interest

Reasons why attempted trust might not dispose of equitable interest

Example

1. There is a gap in the beneficial ownership because the trust does not name a
beneficiary who attains a vested interest.

2. Attempted trust lacks certainty of objects.

3. Attempted trust does not define beneficial interests with sufficient certainty.

4. Attempted trust offends the rules against perpetuity.

5. Attempted trust offends the beneficiary principle.

NOTE: for a resulting trust there has to be an initial TRANSFER OF

PROPERTY to another ON TRUST.

a) Trusts which fail because of uncertainty of subject matter

regarding whole of trust property cannot lead to a resulting
trust, as nothing is transferred away from settlor.

b) Dispositions where there is no certainty of intention to create a

trust do not involve also a transfer to another ON TRUST).

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CHAPTER 4 Constructive Trusts

Question 2 specimen
Question 6 on both past papers

 Constructive trusts play vital role in family property disputes, when

determining ownership of family home.
 Disputes usually arise when marriage or civil partnership breaks up.
 Determination of ownership of beneficial interest is only the first stage; court
has wide powers to make property adjustment orders under the divorce/
annulment legislation.
 No such jurisdiction exists for unmarried couples, who’s entitlement is
determined by the law of trusts.
 NOTE: the fact the legal title to property is vested in one party (Y) does not
mean that Y also owns the entire beneficial interest.
 Question: how is it decided whether X has an equitable interest?  by virtue
of a resulting trust, a direct contribution to the purchase price is likely to
provide X with an interest consistent with the contribution.
 When dealing with cohabitees’ rights though courts prefer to use constructive
trusts.
 A common intention constructive trust is a means of attaining a beneficial
interest in a property by a cohabiting claimant.

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ACTIVITY 1 Constructive Trusts of the Family Home

1 Legal ownership in both names

 Where parties purchase home in their joint names, legal title will be held as
joint tenants.
 Question: what about beneficial (equitable) interest?
 Express declaration of trust: to be enforceable, must be evidenced in
writing to satisfy Section 53(1)(b) of the Law of Property Act 1925; if
parties hold as tenants in common, their respective proportions will
inevitably be stated (this is conclusive in absence of fraud or mistake); if
equitable interests are expressed to be held as joint tenants, in absence of
fraud or mistake this is conclusive; parties will have equal shares in sale
proceeds if property is sold.
 Trusts not expressly declared

Stack v Dowden

FACTS: defendant bought a house in her sole name in which the parties lived
together as husband and wife, they had four children. The defendant, who throughout
their time together earned more money than the claimant made all the payments due
under the mortgage and paid the household bills. The parties did a great deal of work
in improving the house and in 1993 it was sold for three times the figure the
defendant had originally paid for it. The parties then bought another property, which
was conveyed into their joint names, as their family home. Over 65% of the purchase
price was paid out of funds from a building society account held in the defendant’s
sole name, funds which included the equity liquidated from the sale of the previous
house. The balance of the purchase price was provided by a loan secured by a
mortgage in the parties’ joint names and two endowment policies, one in their joint
names and one in the defendant’s sole name. The claimant paid the mortgage interest
and the premiums due under the endowment policy in their joint names and the
defendant paid the premiums due under the endowment policy in her sole name. The

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parties kept separate bank accounts and made separate savings and investment. Over
the course of their years in the house together the mortgage loan was paid off by a
series of lump sum payments of which the defendant provided just under 60% of the
capital. The parties separated in 2002 and the claimant left the property while the
defendant remained there with the children.

HELD: the House of Lords held in such a case, in which property was conveyed into
joint names without any express declaration of trust, the presumption was the
parties intended a joint tenancy in equity, as well as at law. To rebut this
presumption, the party seeking to show the beneficial interests were different
would need to prove the parties held a common intention to that effect. In
determining whether the parties had such a common intention, their whole
course of dealing regarding the property should be looked at; financial
contributions were only one factor. On the facts of the case, Mrs Dowden had
discharged this onus and the parties were tenants in common in shares of 35% to Mr
Stack and 65% to Ms Dowden. In determining the beneficial interests in property
in the absence of any express declaration of trust, the starting point was that
equity followed the law. Thus if the property is in the sole name of one person,
the law presumes there is no trust. If the property is in joint names, the starting
point is there is an equitable joint tenancy mirroring the legal joint tenancy. The
onus was on the person arguing the beneficial ownership differed from the legal
ownership to prove it.

Baroness Hale said in deciding whether the property was held on the terms of
a trust that differed from the legal title, the search was “to ascertain the parties’
shared intentions, actual, inferred or imputed, with respect to the property in the
light of their whole course of conduct in relation to it”. There were “differences
between sole and joint names cases”. In a joint-names case, it was clear the parties
intended a trust and the question was on what terms. In a sole-name case, the party
alleging a trust would first need “to surmount the hurdle of showing that she had
any beneficial interest at all”.

Baroness Hale went on to describe the proper approach to quantifying

beneficial interests after the hurdle of showing that a trust was intended had been

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surmounted, and accordingly she said many factors were relevant, including: any
advice taken or discussions at the time of transfer; why the acquisition had been
in joint names; the nature of the parties’ relationship; whether they had children
whom they were both obliged to house; how the purchase was financed; and how
the parties arranged their other finances. Taking all of these factors into account,
Baroness Hale said that “cases in which the joint legal owners are to be taken to
have intended that their beneficial interests should be different from their legal
interests will be very unusual”.

Baroness Hale considered it possible that Mr Stack had had a beneficial

interest in the house purchased by Ms Dowden in 1983, on the basis of some
evidence—albeit “rather slim and unsatisfactory”—that he had made a financial
contribution to its acquisition. Calculating their respective contributions to the
purchase of the second house on this basis, she found that the maximum contribution
Mr Stack could have made was 36% to Ms Dowden’s 64%. Given “the nature of the
parties’ conduct and attitudes towards their property and finances”, and the
“rigid separation of their finances”, it was clear that they had not intended “their
shares, even in the property that was put into both their names, to be equal”.
Given this attitude, Ms Dowden was said to had made out her case for a 65 % share.

2 Legal estate in the name of one party only

 There is a presumption the sole legal owner also owns the entire equitable
interest UNLESS there is an express declaration the legal owner holds on trust
for another.
 A claimant asserting he has an equitable interest has various options:

i. Resulting trusts

 Where X has made direct contributions to the purchase of an

asset bought in the name of Y, X acquires an equitable interest
under a resulting trust (if the presumption of advancement does
not apply).

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  Size of the equitable interest reflects the proportion of purchase
price contributed.
 NOTE: constructive trusts are more appropriate to determine
the equitable interests of cohabitees in a property purchased as
their home (Stack v Dowden)

ii. Common intention constructive trusts

 A claimant will obtain an equitable interest if:

a) There was a common intention between the parties both

were to have an interest; and
b) The claimant acted to her detriment owing to that
common intention.

Lloyds Bank v Rosset

FACTS: A semi-derelict farmhouse was put in H’s name. The house was to be the
family home and renovated as a joint venture. H’s wife, W, oversaw all of the
building work. W had been led to believe the property was to be acquired without a
mortgage. However, H did acquire the property with a mortgage registered in his sole
name. H fell into arrears on the mortgage and the mortgagee bank sought repossession
in lieu of money owed by H under the mortgage. W sought to resist an order for sale
in favour of the mortgagee, inter alia, because of her equitable interest in the property
that she claimed granted her an overriding interest on grounds of actual occupation.

HELD: W had acquired no equitable interest in the property. Lord Bridge’s speech
laid out two criterions for a common intention constructive trust to be formed. There
must be:

22
1. A common intention: this test fell into two halves and so created two distinct
forms of common intention constructive trust.

a) common intention based on agreement: “evidence of express

discussions between the partners, however imperfectly remembered
and however imprecise their terms may have been.”

 Grant v Edwards
 FACTS: Mr Edwards, the defendant, purchased a
house. The house was conveyed into Mr Edwards
name and that of his brother. Mr Edwards had told
the claimant, Mrs Grant who was pregnant with his
child, that her name should not be added to the legal
title as it may affect her divorce. A deposit was
provided by Mr Edwards alone and the remainder
was raised by two mortgages. Mr Edwards paid the
mortgage instalments for the first mortgage. There
was some dispute as to repayment of the second
mortgage. Mrs Grant though made substantial
contributions to the housekeeping that enabled Mr
Edwards to meet the mortgage instalments.
 HELD: Mrs Grant was entitled to half of the
beneficial interest under a constructive trust. There
was a common intention that she was to have a
share in the property. She had acted to her detriment
by making substantial contributions to the
household expenses that would not have done unless
she had believed she would have an interest in the
house.
 Curran v Collins
 FACTS: the claimant, Ms Curran, and the
defendant, Mr Collins, were in a relationship and
shared a common interest in breeding dogs. The
defendant had purchased various properties over a

23
 period of time in his sole name, including one called
The Haven. Their relationship ended and the
claimant sought a share in The Haven.
 HELD: the giving of an excuse why the claimant’s
name is not on the title does not necessarily
constitute an express common intention the claimant
has an equitable interest. Mr Collin’s “excuse” did
not indicate a common intention that Ms Curran had
an equitable interest.
 JUDGEMENT: “Not only did the parties have no
express agreement about sharing the ownership of
the properties, but also, on Mr Collins’ case, he
made it expressly clear to her that the property
purchases were his alone. That was sufficient to
negate any reasonable belief in any common
intention. However, there was one exception to this
and that arose out of an episode at the time of the
purchase of the Feltham house. Ms Curran raised
the subject of her having a share of the property
with Mr Collins and he told her that it was too
expensive for her name to be on the property
because it would involve paying the premia for two
life insurance policies (“the Excuse”). On Ms
Curran’s case this statement was impliedly made on
the basis that Mr Collins accepted that, but for the
expense, she should be an owner of the properties.
The judge rejected this argument and found that Mr
Collins had made the statement to avoid any
embarrassment over his refusal to make Ms Curran
a co-owner and that accordingly it was sufficient to
exclude any shared intention that Ms Curran should
have an interest in the property.”
 COMMENT: unlike Grant v Edwards, the Feltham
property was not bought as a family home,

24
 moreover the excuse in this matter was also
different. The excuse in Grant v Edwards was a
positive assertion the property would have been
acquired in joint names but for the excuse; the
excuse here was a negative representation, i.e. the
house will not be bought in joint names because of
the expense of doing so.

b) common intention based on conduct: “where there is no evidence to

support a finding of an agreement or arrangement to share […] courts
must rely entirely on the conduct of the parties both as the basis from
which to infer a common intention to share the property beneficially
and as the conduct relied on to give rise to a constructive trust. In this
situation direct contributions to the purchase price by the partner who
is not the legal owner, whether initially or by payment of mortgage
instalments, will readily justify the inference necessary to the creation
of a constructive trust […] doubtful whether anything else will do”.

 The court will infer a common intention from direct

contributions to the purchase price (e.g. mortgage); doubtful
whether courts will infer a common intention from any other
contribution.
 Non-financial acts, e.g. looking after the family, will not lead to
the inference.
 Payment of household expenses other than the mortgage, would
not also lead the court to infer a common intention to share
ownership of the house.
 NOTE: if payments are substantial and made pursuant to an
agreement the parties will share the mortgage and expenses
equally with one paying the mortgage and the other general
household expenses, payment of household expenses may only
then be regarded as an indirect contribution to the purchase
price.

25
 Le Foe v Le Foe

 FACTS: H and W separated. During the time they

were married a number of properties were acquired
in succession with the aid of mortgages in H’s
name. Both parties worked, although H earned more
than W. The court found the family economy
depended for its function on W’s earnings. W made
substantial contributions from her resources to pay,
inter alia, mortgage arrears and future payments. H
later embarked on a deceitful subterfuge to strip the
majority of the equity out of the matrimonial home
to leave W for a much younger woman. H
borrowed, by way of a mortgage, more than he
could possibly repay. He fell into arrears with the
repayments and a suspended possession order was
obtained. W presented a petition for a judicial
separation and ancillary relief. Possession of the
property was claimed. Question in issue concerned
W’s interest in the matrimonial home.

 HELD: by virtue of W’s indirect contributions to

the mortgage, it was entitled to infer the parties
commonly intended that W should have a beneficial
interest in the former matrimonial home. Taking
into account the conduct of the parties and in
particular the capital contributions made by W, the
court decided they commonly intended that W
should have a 50% share in the property. Whether
an indirect contribution to the mortgage will suffice
to draw the necessary inference was a key question.
Argued the words direct contributions were not
meant to apply to such a situation. The wife
acquired a beneficial interest here because the

26
 husband would not have been able to pay the
mortgage had she not taken responsibility for the
household expenses.
 COMMENT: this view was supported, though
obiter, by the House of Lords in Stack v Dowden
and the Privity Council in Abbott v Abbot.

2. Detrimental reliance: “once a finding to this effect is made it will only be

necessary for the partner asserting a claim to a beneficial interest against the
partner entitled to the legal estate to show they acted to their detriment or
significantly altered their position in reliance on the agreement to give rise
to a constructive trust or a proprietary estoppel.” In short, detrimental reliance
requires the party claiming an equitable interest by way of constructive trust to
also show they acted to their detriment in reliance on the common intention.

 NOTE: in Grant v Edwards, the claimant’s substantial contribution to

household expenses (other than the mortgage) and bringing up the children
were held to amount to sufficient detriment.

 Two definitions of detriment were given in Grant v Edwards:

a) A narrow definition: “conduct on which the woman could not

reasonably be expected to embark unless she was to have an
interest in the house”.

 Under narrow definition doubtful whether care of the

family would be a significant alteration of her position; she
would look after the family anyway regardless of the
existence of an agreement to share ownership of the
property.

27
  Meeting some of the household bills may be sufficient if
the payments were substantial and pursuant to the common
intention.
b) A wide definition: “any act done by her to her detriment relating
to the joint lives of the parties is sufficient detriment to qualify.
The acts do not have to be referable to the house”.

 Under wide definition case of family would indeed be a

significant alternation of her position though.

 NOTE: suggested by Lord Walker in Stack v Dowden that Lord Bridge’s

approach may be out-dated; later approved by Baroness Hale in the Privity
Council case of Abbot v Abbot; however, Lord Walker’s stance was obiter as
Stack v Dowden was not a case of a sole legal owner and Abbott v Abbott was
not binding; later Court of Appeal cases Morris v Morris and James v
Thomas suggest that Lord Bridge’s approach is still used in cases where the
legal title is in the sole name of the one party though.

 If an equitable interest under a contractive trust has been established the

question arises as to how the courts will quantify that interest, the court will
look at the whole course of dealing between the parties to ascertain what
shares were intended; it will take into account all factors (including indirect
contributions).

 Midland Bank v Cooke

 FACTS: a husband and wife received a wedding present of

£X from the husband’s parents, which was used towards the
purchase price of a house for £X. As the money was a gift
to both the husband and wife, it was deemed the wife had
contributed half of the purchase price of the house.

28
  HELD: she had contributed to the purchase price, and this
was conduct that could give rise to a common intention by
conduct. Mrs Cooke fit the Rosset criteria for a common
intention by conduct since her contribution was directly to
the purchase of the house, and that would count as conduct
from which to infer an agreement. A direct contribution to
the purchase price also meets the Rosset criteria for
detrimental reliance.

 Stack v Dowden

 COMMENT: regarding how to determine the extent of a

claimant’s beneficial interest under a constructive trust: the
size of each party’s share will be what was said or agreed at
the time the property was acquired; where there is no
evidence of such discussion, each party entitled to share
which the court considered the parties indented each to
own, having regard to the whole course of dealing between
them regarding the property. In considering the course of
dealing: the court will consider advice and discussions at
the time of the purchase, the purpose for which the house
was acquired and the nature of the relationship, whether
resources were pooled, contributions to mortgage
payments, payment of outgoings e.g. council tax and
utilities, repairs, insurance and payment for improvements.

 Jones v Kernott

 FACTS: an unmarried, co-habiting couple, Mr. Kernott

and Ms. Jones, purchased a home with a mortgage in joint
names. The couple co-habited the home and contributed to
its expenses for eight years, after which Mr. Kernott left the
property and made no further contributions. Ms. Jones

29
 remained in the property with their children and paid all
further expenses towards the acquisition of the property.

 ISSUE: the question arose as to the beneficial interests that

each party had in the property, in light of its registration
under joint names as well as their ensuing conduct in
relation to it.

 HELD: if a property is purchased in joint names for a

couple, there is a presumption their beneficial interests in
the property coincide with their legal estate. The Supreme
Court emphasised the presumption is reflective of a
couple’s joint venture to purchase a property, underpinned
by an emotional and economic relationship of trust that
does not hold each party separately account financially.
However, this presumption can be rebutted (albeit with a
high threshold) by means of evidence concerning
subsequent conduct in relation to the property, by e.g.
unequal contributions to the acquisition of the property
under a mortgage. It was deduced that “objectively from
[the parties conduct” following from the initial joint
registration, there could be no presumption of joint
beneficial ownership in a family home. Accordingly, Mr.
Kernott and Ms. Jones were said to hold differing beneficial
shares in the property that were reflective of their respective
contributions to the house. Overturning the Court of
Appeal’s previous decision, this was determined to be 10%
for Mr. Kernott and 90% for Ms. Jones.

30
 Gallarotti v Sebastianelli

 FACTS: G and S were friends. They had each gone to

England from Italy. G and S shared rented accommodation
and then bought a flat. This was a platonic arrangement.
They were happy to share until they were ready to buy
homes of their own. The title was in S’s name. G and S had
an express agreement they would be equal beneficial
owners. This agreement was conditional on G contributing
more than S to the mortgage repayments since S made a
larger contribution than G on the down payment. G did
make some contributions but did not pay as much as S did
towards the mortgage; the disparity was significant. The
conditional element of the express agreement was not
satisfied. The friends later fell out and G sought a
declaration as to the extent of his beneficial interest.

 HELD: the terms of the express agreement showed “the

parties were concerned their ultimate shares in the flat
should […] represent their contributions to it”. The court
inferred the 50:50 sharing agreement came to an end and
was replaced by an inferred agreement their beneficial
ownership should reflect their financial contributions.
Accordingly, S had a 75% beneficial interest and G had
25%. It was implausible to suggest that S would have
wanted to make a substantial gift to G when they were two
flat sharers who were not a family unit but just lived
together for convenience.

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ACTIVITY 2 Constructive Trusts in a Commercial Setting

Banner Homes Group v Luff Developments

FACTS: The defendants, Luff Development, acquired a site that would be suitable
for developing property on. Before this acquisition, the defendants made an
agreement with the claimants, Banner Homes Group, that they could develop this site
as a joint venture. While there were many conversations and proposals between the
companies, no written agreement was concluded. However, the defendants changed
their mind about the agreement they had made with the complainants, but did not tell
them in case they made a rival offer before they acquired the site.

ISSUE: the trial judge had dismissed the constructive trust claim based on the fact
that there was no signed and written agreement between the parties. Banner Homes
Group appealed this decision and the issue in the case was whether this agreement
amounted to a constructive trust.

HELD: under equity it would not be right for the defendants to be the sole beneficial
owner for the joint venture. The fact that the Luff Development did not want to
inform the complainants indicates a prior agreement. Chadwick LJ affirmed Pallant v
Morgan and explained the how it would come into play. It was said the Pallant v
Morgan equity would be invoked where the defendant has acquired property in
circumstances where it would be inequitable to allow him to treat it as his own – there
are two requirements that have to be satisfied:

1. There should be an arrangement / understanding that one party (Y) will

try to buy property and that if he succeeds, the other party (X) will
obtain some interest in it; when the property is acquired, X believes the
arrangement still holds good, though.

32
 2. X should do or refrain from doing something in reliance on the
arrangement, and X’s act or omission confers a benefit on Y or is
detrimental to X’s ability to acquire the property.

Both these requirements were held to be present. First, there was a clear arrangement
that Luff Development should acquire a property and that Banner Homes Group
should have an interest in it. Secondly, Banner Homes Group had acted in reliance on
that arrangement to its detriment because they had kept out of the market and not bid
for the property. This decision not to compete for the purchase of the site obviously
conferred an advantage of Luff Development because it acquired the site more
cheaply (though not necessary to prove both detriment to one party and advantage to
the other; either would suffice).

CHAPTER 5 Proprietary Estoppel

 Equitable interest may be created without usual formalities through a

constructive or resulting trust.
 Proprietary estoppel is another method by which one may become entitled to
an equitable interest in property in the absence of appropriate formalities.
 The aim of the award in a proprietary estoppel case is to do what is necessary
to avoid an unconscionable result.
 The size of the award depends on all of the circumstances including the
expectation that has been encouraged and the detriment that has been suffered.
 Regard has to be had to the proportion between the expectation, on the one
hand, and the detriment on the other.
 This need for proportionality means that while the expectation aroused cannot
be ignored, it may not always be fully satisfied.

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 Pascoe v Turner

FACTS: the claimant and defendant lived together in a house owned by the claimant.
They were not married but lived as if they were. Later the claimant met another
woman and left the defendant. He told her she could have the house but never
formally transferred the title. She remained in the house and spent money on
redecoration and improvements in the belief that she owned the house. He was aware
of her expenditure and belief but did nothing to prevent either. Later he brought an
action seeking to evict her. She entered a defence and a counter claim.

HELD: she could remain in the house and was entitled to have the title transferred to
her through proprietary estoppel. He was estopped from denying her an interest in the
house after they had effected improvements etc. in reliance on his assurance the house
was hers. He (the legal owner) had stood by and said nothing while she carried out
home improvement works, although contrary to Section 53(1)(b) of the Law of
Property Act 1925, there was no written evidence of a declaration of trust in her
favour, equity would not allow him to deny his assurances when he actually had
allowed the claimant to act to her detriment.

 NOTE: proprietary estoppel may be used as a cause of action (so actually is a

sword!); but it’s not a remedy in itself, but raises an “estoppel equity”, at
which point the court decides which remedy will satisfy that equity, i.e. there
are two stages:

1. One considers whether proprietary estoppel has given rise to “equity”;

and afterwards …

2. One decides which remedy will satisfy the equity.

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1 Establishing the Equity

 Legal owner must have behaved in a manner whereby the claimant believes
they have, or will get, some rights regarding the property (the “expectation”),
and so the claimant has acted to his detriment in consequence of this belief,
such that it would be unconscionable for the legal owner to insist on their
strict legal ownership.

 Behaviour may be in the form of:

i. Active assurance

 Inwards v Baker

 FACTS: father encouraged his son to build a bungalow on

his land. The son built it at his own expense using mainly
his own labour. The house was completed and the son
moved in and he remained there. Later the father died and
left all his property to his partner, who brought proceedings
seeking to remove the son from the property.

 HELD: the son was entitled to remain in the property. His

expenditure of money on the land at his father’s
encouragement raised an equity that was satisfied by
granting a licence for life.

ii. Passive assurance (i.e. where legal owner stands back and lets the
claimant act to his detriment in the belief he is entitled to an interest in
the property)

35
 Gillet v Holt

 FACTS: the claimant, Gillett, worked on Holt’s farm. Holt

persuaded Gillett to abandon plans for college and to work
for him instead. Holt stated several times that on his death
the farm would be left to the claimant. The relationship
between them subsequently soured and Holt executed a will
in which the claimant did not receive the farm. After an
investigation into how they were running the farm, the
claimant was dismissed and subsequently claimed a
proprietary estoppel.

 ISSUE: Proprietary estoppel allows the claimant to claim

an interest in land if the landowner makes a promise that
the claimant will acquire an interest and the claimant acts to
his detriment in reliance upon this. Argued there had
actually been no irrevocable promise made by Holt who
was free to change his mind if his circumstances changed. It
was also alleged there was insufficient evidence of any
detriment to the claimant.
 HELD: there was no need for the defendant to do anything
additional to make his promise irrevocable. In view of the
promises made, reliance was presumed. The court pointed
out that actually the three elements of the doctrine are often
interwoven and so are not separate. Whether there is a
mutual understanding depends on all the factors. Detriment
is not a narrow or technical concept and need not be
financial. Gillett had been denied the opportunity of
bettering himself by leaving school. Therefore, he had
suffered a detriment in reliance upon Holt’s promise.

36
 Thorner v Major

 FACTS: The claimant had worked on the defendant

estate’s farm for over a decade without pay, believing that
he would inherit the land when the defendant died. While
the defendant once gave the claimant a bonus stating that it
was for his “death duties”, he never explicitly told the
claimant he would inherit. Under the original will, the
property would have passed to the claimant, but the
defendant retracted this will and died intestate. The
claimant argued he should inherit the property due to
proprietary estoppel.

 ISSUE: whether proprietary estoppel can arise in the

absence of an explicit representation of proprietary interest.

 HELD: possible for a representation to be made by conduct

alone, so long as that conduct conveys the message to a
reasonable person sufficiently clearly that the claimant was
to have a proprietary interest in the land. This was to be
determined by all relevant circumstances, including the
context of any representations or conduct, the relationship
between the parties and their understanding of the context.
In most cases where the message behind the conduct is
somewhat ambiguous, the House of Lords thought this
would not normally act to defeat proprietary estoppel. On
these facts, the conduct gave a sufficiently clear
representation of proprietary interest to give rise to
estoppel. Lord Neuberger articulated the test as follows: “it
is sufficient for the person invoking the estoppel to
establish that he reasonably understood the statement
or action to be an assurance on which he could rely”.

37
 NOTE: the claimant must act to his detriment in reliance on the assurance
(there must be a casual connection between the assurance and the detriment),
however the promises relied on don’t have to be the sole reason for the
claimant acting to his detriment, but must be a reason (onus being on the
claimant to show the causal connection as a matter of fact).

 Question: what amounts to detriment? Detriment could take many

forms, e.g. financial and personal detriment (Gillett v Holt), or
improving the legal owner’s land (Inwards v Baker); even looking
after an elderly person in exchange for a promise they would leave the
house to the carer, but this must be beyond “what was called for by
natural love and affection”

 Re Basham

 FACTS: the claimant looked after the deceased, her

stepfather, in reliance on his assurance that she would
inherit the house he lived in, paid for by the claimant’s
mother. The deceased did not have the opportunity to
make a will.

 HELD: “where the belief is that A is going to be given

a right in the future, it is properly to be regarded as
giving rise to a species of constructive trust, which is
the concept employed by a court of equity to prevent a
person from relying on his legal rights where it would
be unconscionable for him to do so.”

38
 Greasley v Cooke

 FACTS: Miss Cooke had started to work as a live-in

maid for a Mr Greasley. After 10 years she began to
cohabit with one of the sons. She lived at the property
for many years and looked after both the son and his
mentally ill sister. She had received assurances that she
would be able to live at the property for the rest of her
life. She sought a declaration that she was entitled to
live at the property rent-free for the rest of her life. She
succeeded in the Court of Appeal.

 ISSUE: whether there was a causal link between the

promises made to her and her actions in staying at the
property – would she have done so anyway?

 HELD: once it is shown that the promises were

intended to influence the judgment of a reasonable
person then the causal link is presumed to exist. The
onus is then on the defence to show there had been no
causal link.

39
2 Satisfying the Equity

2.1 What remedies are appropriate?

 Remedy should be the minimum to satisfy the equity, i.e. to award the
appropriate minimum remedy to do justice (varies on the facts of each case).

Jennings v Rice

FACTS: concerned J’s claim to some or all of R’s estate. R was a wealthy widow
who died intestate. For many years, J had worked for free for R even sleeping on the
sofa in her home rather than at his own home. R encouraged J to believe that he
would receive a substantial sum under the terms of her will. Despite this, she died
intestate.

HELD: At first instance, J was awarded £200k calculated by reference to the cost that
would have been incurred had she paid for the care he gave her. J appealed on the
basis that the promises made to him had lead him reasonably to expect a more
generous share of her estate. The English Court of Appeal upheld the award at first
instance.

 NOTE: where claimant and defendant reached a mutual bargain, and A and B
regard the expectation as basically equivalent to the detriment, the court may
well fulfil the expectation whatever it may be; though where claimant’s
expectations are uncertain, or not focused on specific property, don’t reflect
defendant’s assurance, or bear no relation to the amount of detriment, the

40
 court may take the claimant’s expectations as a starting point but will consider
other factors:

1. Unconscionability;

 Including misconduct by claimant and defendant.

2. Alteration of defendant’s finances;

3. Financial obligations owed by defendant to others;
4. Effect of taxation;
5. Benefits defendant has derived from the situation;
6. Benefits claimant has derived from the situation;

 E.g. rent-free accommodation.

7. Whether proposed remedy is practical;

 E.g. court will not compel people to live together when this
may be the last thing they want to do.

8. Proportionality, i.e. is the remedy proportional to the detriment

suffered?

 NOTE: focus must though still remain on what is faire and proportionate
between the parties.

Joyce v Epsom and Ewell

FACTS: a supermarket chain built a store near J’s property (at that time J’s property
was owned by his predecessor H). An access road was built from the public highway
to the supermarket on land to the rear of J’s property privately owned by the Council.
During the procedure leading to the grant of planning consent for the supermarket, H
was given to understand by the Council that he would have an easement over the
private road from the rear of his property to the public highway. The supermarket
built a new fence and gate at the rear of H’s property and H moved the garage on his
property to make use of this access point and built a new drive between the access and

41
the garage. H then used the private road as envisaged. J was now the owner of H’s
property. He was a developer intending to develop his property (perhaps jointly with
neighbouring properties). He relied on proprietary estoppel to claim the formal grant
of an easement in terms that would allow the access to serve the joint development of
his property and the neighbouring properties. The Council denied that there was an
estoppel but they did not (in their pleadings) deny that if there were an estoppel then
the benefit of it would pass to J.

HELD: the proprietary estoppel claim failed at first instance because the judge
thought that, while the central elements of proprietary estoppel were present, the
Council had done nothing that was unconscionable. It allowed J to use the access
point. It was simply refusing to make a formal grant. There was nothing
unconscionable in this refusal.
On appeal, J successfully argued that the formal grant of the easement was the
only response that was fair and proportionate as between the parties (the English
Court of Appeal’s re-casting of ‘the minimum equity to do justice to the claimant’
following Jennings v Rice).

 Davies J: “that leaves the final question: what does equity require in order
to do justice to the claimant? Although the not unfamiliar phrase ‘the
minimum equity to do justice to the claimant’ was used by the judge, and
deployed in argument before us, the overall focus has to be on what is fair
and proportionate as between the parties”.

Moreover, Davis LJ thought actually this case was regarding mutual understanding.

 Davies J: “[this is] a case of mutual understanding, even if falling short of

a contractual bargain”.

The fact that J was, in fact, being allowed to use the road was no answer to the claim.

 Davis LJ: “the fact that the Council had not thus far sought to prevent [H]
(or his successors after him [J]) from using the road does not address what
his entitlement was or the issue of unconscionability arising from the

42
 Council’s initial conduct at the time and then its subsequent resiling from
its position.”

The fact that time had elapsed between the assurance and the proceedings did not
mean that J was only entitled to a lesser relief than that which would have been
available had the proceedings been brought earlier.

 Davis LJ: “[its] both counter-intuitive and unprincipled that an apparent

right arising and exercised in reliance on the assurance given […] has
become something of a ‘lesser right’, and the equity arising has somehow
diminished, simply by virtue of [lapse of time].”

The formal grant should be limited to use of the present single dwelling on the
property and not for any more extensive purpose.

 Davis LJ: “[H] clearly was concerned about potential devaluation of his
property by the scheme. There is, however, nothing to show […] that he
engaged in any grandiose access works near the rear gates compatible with
potential future development. Moreover, there is also nothing to show [H]
had at any time any expectation of future development […] or had in
mind, or had any wish for, any vehicular right of way more extensive than
one serving a sole dwelling house […] That the claimant himself is a
developer, harbouring development plans, is nothing to the point: he
cannot be in any better position than [H].”

Davis LJ also decided that there was no requirement for the representor to know of
the acts of detrimental reliance of the representee.

 Davis LJ: “this was a case of encouragement, on which there was in fact
detrimental reliance. It was known what [H] intended to do. It is not an
invariable requirement in a case of this particular kind – indeed it is
contrary to the flexible approach which the more recent authorities
establish – that the person encouraging necessarily must know just what

43
 the person encouraged may have actually done in reliance on the
encouragement.”

CHAPTER 6 Proprietary Estoppel and Constructive Trusts

 There’s considerable overlap between constructive trusts and proprietary

estoppel.
 However, constructive trusts are based on common intention, whereas
proprietary estoppel stems from reliance on an assurance by the owner.
 Albeit detriment is a core element of both, the detriment required is different.

 Proprietary estoppel  more willingness to accept non-financial acts,

e.g. caring for elderly or giving up a secure tenancy (provided these
were done in reliance on the assurance and not acts which claimant
would anyway have done).

 No discretion over the remedy when a constructive trust is proved though.

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