Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Filter by Categories
Allocation
ASB
Assured Shorthold tenancy
assured-tenancy
Benefits and care
Deposits
Disrepair
Homeless
Housing Conditions
Housing law - All
Introductory and Demoted tenancies
Leasehold and shared ownership
Licences and occupiers
Mortgage possession
Nuisance
Possession
Regulation and planning
right-to-buy
secure-tenancy
Succession
Trusts and Estoppel
Unlawful eviction and harassment
29/11/2007

Constructive Trust and Proprietary Estoppel again

In James v Thomas [2007] EWCA Civ 1212, the Court of Appeal fine-tuned some points on constructive trust and proprietary estoppel, with reference to shares in property. To note from Sir John Chadwick’s main judgment:

A constructive trust can arise some years after the purchase of the property by the sole title holder alone. There is no requirement for the claimed beneficial interest to arise at the time of purchase. However, in this situation, without an express post-acquisition agreement, the Court will be slow to to infer an agreement from conduct alone.

Contribution to mortgage capital repayment per se is not necessarily enough to infer agreement to a beneficial interest.

It is not necessary for a specified share or part of the property to be mentioned in an assertion that a beneficial interest in the property would be given by the defendant to the claimant. It is sufficient that the property at issue is identifiable, pace Lissimore v Downing [2003] 2 FLR 308.

The judgment is also worth reading when considering what kinds of acts and statements, in what kind of context, will not give rise to a constructive trust or an estoppel.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

23 Comments

  1. gareth everson

    dear sir or madam,

    my mother signed a deed of assignment of her beneficial interest in her house in 2000 to my sister and myself. does that mean my sister and i are owners of her house since the above deeds were signed?

    Reply
  2. Nearly Legal

    Gareth,

    Short answer – no.

    For the long answer, I strongly recommend getting a solicitor’s advice on your position, as these can be very complicated situations.

    Reply
  3. modou

    what are the similarities & differernces between Constructive trusts & proprietary estoppel then?

    Reply
  4. Nearly Legal

    modou, the point about being a law student is that you are supposed to be able to do your own thinking and research. In addition, if you are trying to get someone else to do your work for you, it helps if you are not so bleeding obvious about it.

    Reply
  5. K

    In spite of their different names, there are no differences between Trusts.

    The Recognition of Trusts Act 1987 does not make any comparisons between the different types of trusts, the Act does not differentiate nor does the Act distinguish in any way the meaning of Trust as between cestui que trusts, charitable trusts, constructive trusts, corporate unit trusts, Discretionary trusts, family trusts, fixed trusts, excepted trusts, private trusts, public trading trusts, revocable trusts, secret trusts, Testamentary trusts, expressly created trusts, resulting trusts, exempt trusts or any other types of trusts.

    The Recognition of Trusts Act of 1987 refers to all Trusts. P. 118 c.14 “This Act binds the Crown” 3 (3)

    The Hague Convention [1985] on the Law applicable to Trusts and on their Recognition entered into force in the United Kingdom on 1st January 1992 and as such, the Recognition of Trusts Act 1987 was enacted to incorporate the said Hague Convention into UK domestic law.

    Reply
  6. Nearly Legal

    K, I appreciate that you are trying to be helpful, but proprietary estoppel isn’t a trust, it is an equitable remedy.

    There are in any case plenty of differences between kinds of trusts. The Recognition of Trusts Act deals with cross-national recognition of trusts, that is all.

    Reply
  7. Joe

    Is there an actual advantage to picking estoppel over a CT or vice versa?

    When it comes to Rule 1 Rosset Constructive Trusts (express bargain) and estoppel, both can arise under the same basic situation:

    1) a representation or promise
    2) a reliance on said representation
    3) a detriment due to said reliance

    I understand that an estoppel can be invoked under less certain circumstances than Rule 1 CTs, and that a constructive trust can be invoked in circumstances such as in Grant vs Edwards or Eves vs Eves, where there was no real ‘representation’ involved.

    My dilemma is such, in the following scenario, what advantage does B have in picking Estoppel over a CT?

    A and B meet and fall in love, A asks B to move into a house, which A had bought a year earlier with savings. A says to B, ‘This house is as much yours as mine’, in moving into the house B gives up his/her job, which included a free flat. Within a month, A and B have split up, and B wishes to claim his/her interest.

    Obviously it is unconscionable for B to be left with nothing, seeing as how he has effectively fulfilled the tripartite test, but how shall he proceed, is it easier to secure a victory over A in court with estoppel then with CT?

    Reply
  8. Nearly Legal

    Joe. I had set out a lengthy response, but then I came to strongly suspect that you are a student looking for an answer to an essay question. Three things suggest this. Your example would be very unlikely to be sufficient to give rise to a proprietary estoppel or a constructive trust of type 1 or type 2. Secondly, in the unlikely event that B had a case, B could plead both CT and PE in the alternative, so your final question is by the by. The last thing that suggests this is that you appear not to have actually read the case that this report is about.

    But, as I’m feeling generous, you could have a look at Powell v Benny [2007] – there is a report elsewhere on this blog – on the possible advantages of CT over PE in terms of award. Beneficial interest v minimum award required to do justice (mere equity).

    If I’m wrong, I do apologise.

    Reply
  9. Joe

    NL,

    Don’t get me wrong, I was simply looking for an answer to a question too simple to be answered plainly by any textbook, if you feel that that is not what you have designed this site for I apologise, but at the same time I am hurt that you pessimistically jump to the conclusion I am a student looking for an easy ride. I felt that although this article and my question were not linked that I could benefit from someone’s knowledge and I feel that I put enough effort into my question to portray that I am not looking for an easy answer, but am simply looking to be put straight. The example was simply something I attempted to put together to satisfy both CT and PE, and if you would check the calendar, you would see that we are pretty much smack bang in the exam season, and so this is the point where one has to get every little fact and doctrine straight and simplified in one’s mind, in order to juggle the bigger picture in the exam.

    On the other hand, you gave me precisely the answer I was looking for, and I thank you for it. I shall try not to be more obvious next time.

    Thanks,

    Joe

    (Keele University Law School)

    Reply
  10. Nearly Legal

    Joe,

    You draw the wrong conclusion. I’m happy to help if someone is upfront – ‘I’m a student and I’m having trouble with x/understanding y’ would work a lot better with me than ‘mysterious’ requests to elaborate.

    I thought your example looked like an essay or exam question, hence the bristling. If you put it together, fair enough, although it would make me worry that you need to have another look at what would constitute both a promise and detrimental reliance.

    Good luck.

    Reply
  11. Joe

    Well, my aim was to fulfill a number of goals with the example, namely that there was an agreement as to share beneficial ownership, but leaving shares unstated (something like what basically happened in Drake v Whipp), making the detriment to B as huge as I could think of – a loss of job and also any other place to stay (surely making it unconscionable for B to be left with nothing), and proving that he relied on A’s representation, by making him quit the job in the first place.

    But in any case, that is a moot point, and I have already the answer (and very useful case) – my example was only just that, and example.

    And besides, I am quite a proud person, and while coming out and saying ‘I’m a student and I’m having trouble with x/understanding y’ seems to be easy, it is easier and less of a sacrifice to not admit I was stuck…

    Again, thanks for your help, and your provision of an excellent procrastination tool, I am enjoying reading your archives.

    Joe

    Reply
  12. Joe

    Sorry to post again, but I think I understand, so here we go:

    If we have a situation where both CT and PE can be claimed, CT is there to work out the beneficial owners and respective shares, whereas PE is to satisfy equity in regards to the claimant’s detriment.

    So [incredibly] basically, CT will satisfy equitable title, whereas PE will satisfy the sacrifice made by the claimant.

    I also see what you mean by not understanding detriment and promise – in Benney vs Powell, P was denied effectively put £20,000 worth of work into the house, but he did not NEED to in order to become a beneficiary in H’s trust (had his will been valid). Thus in my example, had A said that the house was theirs on the condition that B decorates the house and looks after the children, then that would be a detrimental reliance, should A g back on his/her promise.

    I’ll leave you alone now, you have actually helped a lot, and it is appreciated…

    Reply
  13. Nearly Legal

    I’ve deleted an exchange of comments here as being frankly a waste of bandwidth, adding nothing of any value or interest.

    Reply
  14. June

    I am 52 years old and have lived with my parents all of my life. My mother died many years ago and my father (who is 93 and owns our home) has recently had to go into a residential care home. My brother and I have got an LPA jointly and independently. Because of my fathers savings, he has to pay for his care but when his savings have gone the local authority can put a charge against the property. I have recently spent £20,000 to improve the property and been told thet I need to apply to the Court of Protection to ‘acquire an interest in the property’. What steps should I take in order to get the local authority to ignore the value of the property? I have looked after my dad for many years and never claimed attendance allowance or other help from the local authority so it seems unfair that they can have an interest in my home.

    Reply
  15. NL

    June,

    we can’t comment or advise on individual’s situations or problems via this blog, I’m afraid. I would strongly suggest seeking advice from a solicitor, probably one that has a specialism in community care or trust of land issues. You can find legal aid specialist solicitors via the link at the top right of this site, and also check if you are eligible for legal aid.

    Reply
  16. Bob

    I’m a rather mature law student who can’t quite get to grips with something so wondered if you could help!

    I can’t really see what the difference is between Proprietary estoppel and Constructive trusts. Can you point me in the right direction?

    My essay is on the effects of Yeoman’s Row has on proprietary estoppel but I feel that I should also have an understanding of constructive trust as it is mentioned in many of the judgements leading up to YRM v C

    Reply
  17. dave

    @Bob: this is obviously a difficult academic question and, in Yeoman’s Row, on one view the HL begin a process of dissociation. The earlier remarks that they were similar etc must now be treated with caution. There is so much written about the similarities and contrasts in academic journals that you just need to take your pick; or just read about it in one of your textbooks which contain a good summary of the issues.

    Reply
  18. Bob

    Thanks Dave, I actually think I’ve read too much! As you say there is so much in the text books and many often contradict each other or indeed offer no opinion on how one out ways the other, instead focussing on each of them individually.

    Thanks for your help

    Kind Regards

    Reply
  19. Jellyjam

    Hello.

    I am a law student and I am having great difficulties in differentiating between estoppel and constructive trusts. Is there a journal which you could recommend to me which explains the differences please?

    I’m also confusing myself as to whether it is possible to use both constructive trusts and estoppel as a defence. Can this be the case?

    I understand if you do not wish to answer my query because you may feel that I’m not working hard but I have been reading and I’m really struggling to get to grips with this subject. I hope you can help.

    Many thanks.

    Reply
    • NL

      There are plenty of articles and books on the topic – but chose something very recent as the position and arguments have changed over the last couple of years. Time for some research skills exercise. You could also have a look at some of the other CT and Proprietary estoppel cases on this blog – look at the actual judgments.

      I’m afraid we can’t answer questions by law students like this. Partly because if we did we would never get anything else done and partly because figuring this sort of issue out is an important part of learning the complexity of how the law works.

      Reply
      • Jellyjam

        That’s quite alright. Thank you so much for taking your time out to answer my question though. I will do some more research into the topic.

        Reply
  20. Shameer

    I may be asking something that may seems stupid however, a yes or no answer would be appreciated to minimise the waste of your time. Is the main difference between a Constructive Trust (CT) and Proprietary Estoppel (PE) that PE requires a reliance on an assurance (unilateral) to the detriment of that person relying, whereas a CT requires an understanding between the two parties, not merely unilateral conduct? Also for a CT there must be financial contributions made to the purchase of the home, in general anything less will not be considered. Whereas, in a case of PE there is no need for financial contributions to the home but merely, the detrimental act in reliance of the assurance (apologies for any tautology).

    Many thanks,

    Shameer

    Reply
    • NL

      And just a few lines above, I’d said ‘we can’t answer questions by law students’.

      Sorry Shameer – not wholly directed at you, and I appreciate you have at least thought about it, but I’ve had quite a few emails with questions recently as well.

      So for clarity, WE ARE NOT GOING TO ANSWER ANY STUDENT QUESTIONS ABOUT PROPRIETARY ESTOPPEL AND CONSTRUCTIVE TRUST. It is not what we are here for and if we started, believe me, we would get nothing else done.

      And with that, I’m closing comments on this post. I wish I’d called it something different…

      Reply

Leave a Reply (We can't offer advice on individual issues)

This site uses Akismet to reduce spam. Learn how your comment data is processed.