Credit where it's due?

Walsh v Singh [2009] EWHC 32 is a fascinating case about constructive trust (CT) and proprietary estoppel (PE), or at least it could have been. First credit goes to HHJ Purle QC, sitting as a judge of the High Court, who has managed the seemingly impossible task of giving judgment in such a case without reference to any authority (beyond Yeoman’s Row v Cobbe, but on the quantum meruit point), despite the case being redolent (at least) of the facts in Lloyds Bank v Rosset, Midland Bank v Cooke, Coombes v Smith, Cobbe (on the estoppel point), Stack v Dowden, Thorner v Major (although probably distinguishable), a possible tinge of Tinsley v Milligan, and I could go on.  That’s not to say that the judge was wrong or that he necessarily applied the wrong principles, but it does make the case eminently appealable.  In fairness to the judge, one might say that CT/PE cases are fact specific and he heard evidence over around seven days, the parties clearly hated each other and the evidence was hardly ad idem, so he had much to sort out; and he did apply a set of principles which broadly correspond to the law.

I’m going to set out the facts and judgment, and then seek to reconstruct the case, identifying some further issues.  In particular, part of the interest in this case comes from the basic problem facing anybody trying to make a claim based on CT and PE as regards detriment when they have been in a loving relationship (although this one seems to have been quite turbulent): how can you show that your acts were done on the basis of gaining an interest in the home as opposed to doing them out of love for your partner? (on this, see in particular Rosset, where, to paraphrase Lord Bridge, it was the most natural thing for a wife to do the acts Mrs Rosset did to get the home ready in time for christmas).  But I’m getting ahead of myself – first, the facts and judgment.

Ms Walsh is a barrister, who began practice in 2000; Mr Singh is a dentist but also “a canny businessman”.  They began living together in 1997, they became engaged in 2001 but subsequently the engagement broke off in 2005.  The property (“the Leire project”) that was the main subject of this dispute was bought in 1999.  The property was bought in Mr Singh’s name only and he paid the entire amount including a mortgage in his name.  The property was bought with the intention of developing it over time into an equine centre (cue amusing jokes about names of horses – ege a stallion, “Pointless”, who lived up to his name by not breeding).  Before the purchase, Ms Walsh’s evidence was that the property was put into Mr Singh’s name because he was paying the mortgage, but that Ms Walsh would have a half share.  That evidence was doubted because Ms Walsh was unsure of the exact words he had used on that occasion.  Subsequently, he promised her “financial security” and that she was entitled to have a joint say in decisions about the home and be clear about decisions made.  Other evidence was that they had engaged on a “joint venture”.  Mr Singh subsequently purchased fields and a paddock for his SIPP.  Ms Walsh assisted with the purchase of both by paying Mr Singh £7500 in respect of the fields and £25000 in respect of the paddock.  That was the evidence on common intention/assurance.  I’m leaving out of the discussion here Mr Singh’s unfortunate conduct in relation to the engagement ring, not dwelt on here but his conduct was “decidedly unattractive” and raised the possibility that his conduct was less than forthright in relation to the properties.

What about detriment?  In addition to the payments for the fields and paddock, Ms Walsh found the property, researched various legal points (a protected tenancy issue and planning permission), contributed to the obtaining of planning permission (in their joint names), and she contributed physically to renovation works, helped him with his other business activities, and, significantly, gave up her promising career at the bar (going part time and then ceasing her practice in August 2004) to run the equine centre.

Ms Walsh claimed a 50% share of the entire property.

HHJ Purle found against Ms Walsh.  He found that the payments for the field and the paddock were loans (as Mr Singh claimed) on the basis that the SIPP arrangements presupposed that Mr Singh was investing his own money as he was entitled to tax relief on his contributions.  Although her conduct was significant, the judge was unable to accept Ms Walsh’s evidence that she was promised or was encouraged to believe that she would have a half share.  He gave 12 reasons for that finding, the most significant of which were all the cash was provided by Mr Singh; they kept their finances separate; there was nothing in writing about the half interest despite Ms Walsh’s concern to have an explicit assurance (“surprising in the case of a person of high intelligence, the more so as she was training to become (and subsequently became) a barrister”); statements to others that she knew that she wouldn’t be entitled to anything if they separated; Mr Singh wouldn’t have promised her anything when all the financial burden and risk was on his side; there was a gentleman’s agreement between them in March 2006 that accepted that Mr Singh owned and controlled all of the property (but would pay Ms Walsh maintenance); all of Ms Walsh’s contributions were referable to their long-term relationship, with the prospect of marriage and not to the acquisition of a beneficial interest; Mr Singh’s contribution were much more significant that Ms Walsh’s.

As regards what the judge referred to as an “implied bargain constructive trust” – surely wrong – he said that Ms Walsh’s strongest point was giving up the bar to run the equine centre but she did that “because she was committed to Mr Singh as her partner and (from April 2001) her fiance, and because she hoped and expected to marry him” (at [59]).  Even though the gentleman’s agreement expressly recognised the significant contribution made by Ms Walsh to the ongoing development of the site and the equine centre, that was insufficient for the same reason.  A quantum meruit claim also failed because she never intended to act for a reward.

Finally, there was a jointly owned villa in Italy which the judge held  (on the basis of English law anyway) was beneficially owned in equal shares because there was nothing to rebut the presumption of  beneficial ownership in equal shares.

I accept that the judge had an awful job in this case disentangling the interests of the parties and also that English law, of course, knows no concept of community/family property etc.  The basis for asserting the claim had to be a CT or PE.  If there was no property-specific assurance about the Leire project, only assertions of “joint venture” etc,  that pretty much deals with the PE issue (see Coombes v Smith). But there did seem to be more than that if one accepts that he said words to the effect that her “home is her home”.  The same is true of the express common intention.  This raises an issue which is kind of left hanging in Thorner: How unclear/ambiguous does a statement have to be before it fails to act as an assurance/representation?  One answer to this, perhaps drawing on Gillett v Holt, is that a lack of clarity can be made up by the extent of the detriment undertaken by the Claimant (?).

But, most significantly, the judge refers to implied bargain CT and simply does not engage with the issue of whether such an intention can be inferred or, as suggested obiter probably by at least two members of the HL in Stack, imputed.  Whether that would, in any event, have assisted Ms Walsh is open to doubt though, bearing in mind her professional status – an imputation must have some basis in fact (or at least, that’s what I think).  But the inference is open to question, raising the prospect of discussion about the thorny issue of the relevance of indirect contributions.  The issue here about Ms Walsh’s direct contributions to the SIPP fund, entitling Mr Singh to tax relief on those contributions, is a bit like the problem in the way of Mrs Rosset as Mr Rosset’s swiss family trustees had explicitly said that Mrs Rosset was not to get a beneficial interest in the property putting the kibosh on her claim to an express CI.  Ms Walsh’s situation is different as she would be claiming an inferred CI and Tinsley v Milligan might be of assistance here.

I could go on (and on – having just prepared my lectures on this).  My point is that none of this was discussed.  Ms Walsh’s situation is like Mrs Burns in Burns v Burns, although perhaps not as extreme.  It raises the question, which equity forces us to ask, as to why people do things.  The answer must be more complex than the rules of equity allow us to think – Ms Walsh may have given up her career at the bar because she loved horses and Mr Singh, but maybe she also gave it up because this was a joint venture, which suggests some form of stake in the project.  Ms Walsh is better equipped to answer that not just because she was involved but also because her first degree was in psychology.  As Baroness Hale said in Stack (at [69]), in law “context is everything”.

Posted in Trusts and Estoppel.

2 Comments

  1. Hello. You seem to know a lot about estoppel so I’m going to ask you this as I’ve spent ages trying to find the cases I need to support a point in a problem question and I just can’t even though I have a vague memory of it being mentioned in a lecture.

    I need a case where someone has looked after someone out of love but also because there’s been an assurance. I remember something about someone looking after an elderly relative but that’s not much to go on so can’t find it.

    Also I’ve read so many cases in the last few days that I can’t find the quote about the fact the assurance doesn’t need to be the only reason C does something just a reason. Any ideas? Think it’s either Gillet or Thorner but then I may also have seen it in an article.

    I’d be really grateful if you can help as I’m totally losing the will to live!

  2. Hi Sassi
    I’m afraid that we don’t help students out with their assessments. Stick with it – I’m sure it will come good in the end. Thanks for what appears to be a compliment about knowing a lot about estoppel, though!

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