A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names was because she was involved in divorce proceedings and that, if the property were acquired jointly, this might operate to her prejudice in those proceedings. The title was in the defendants’ names with no express evidence of agreement her to have a beneficial interest. She had to establish a common intention acted upon by her, that she should have a beneficial interest. Equity would then not allow the defendant to deny that interest and would construct a trust to give effect to it. Two matters were need for a constructive trust. A common intention that each should have a beneficial interest. Without express words intention can be inferred from circumstances. The claimant has acted to his detriment on the basis of that common intention, with a sufficient link between the common intention and the conduct relied upon. This requires there to have been conduct on which the claimant could not reasonably have been expected to embark unless he was to have an interest in the property. (Browne-Wilkinson): ‘I suggest that in other cases of this kind, useful guidance may in the future be obtained from the principles underlying the law of proprietary estoppel which in my judgment are closely akin to those laid down in Gissing v Gissing [1971] A.C. 886. In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or her detriment in reliance on such belief. In both, equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner by defeating the common intention. The two principles have been developed separately without cross-fertilisation between them: but they rest on the same foundation and have on all other matters reached the same conclusions.’
Mustill LJ said: ‘(1) The law does not recognise a concept of family property, whereby people who live together in a settled relationship ipso facto share the rights of ownership in the assets acquired and used for the purposes of their life together. Nor does the law acknowledge that by the mere fact of doing work on the asset of one party to the relationship the other party will acquire a beneficial interest in that asset.
(2) The question whether one party to the relationship acquires rights to property the legal title to which is vested in the other party must be answered in terms of the existing law of trusts. There are no special doctrines of equity, applicable in this field alone.
(3) In a case such as the present the inquiry must proceed in two stages. First, by considering whether something happened between the parties in the nature of bargain, promise or tacit common intention, at the time of the acquisition. Second, if the answer is ‘Yes,’ by asking whether the claimant subsequently conducted herself in a manner which was (a) detrimental to herself, and (b) referable to whatever happened on acquisition. (I use the expression ‘on acquisition’ for simplicity. In fact, the event happening between the parties which, if followed by the relevant type of conduct on the part of the claimant, can lead to the creation of an interest in the claimant, may itself occur after acquisition. The beneficial interests may change in the course of the relationship.)
(4) For present purposes, the event happening on acquisition may take one of the following shapes. (a) An express bargain whereby the proprietor promises the claimant an interest in the property, in return for an explicit undertaking by the claimant to act in a certain way. (b) An express but incomplete bargain whereby the proprietor promises the claimant an interest in the property, on the basis that the claimant will do something in return. The parties do not themselves make explicit what the claimant is to do. The court therefore has to complete the bargain for them by means of implication, when it comes to decide whether the proprietor’s promise has been matched by conduct falling within whatever undertaking the claimant must be taken to have given sub silentio. (c) An explicit promise by the proprietor that the claimant will have an interest in the property, unaccompanied by any express or tacit agreement as to a quid pro quo. (d) A common intention, not made explicit, to the effect that the claimant will have an interest in the property, if she subsequently acts in a particular way.
(5) In order to decide whether the subsequent conduct of the claimant serves to complete the beneficial interest which has been explicitly or tacitly promised to her the court must decide whether the conduct is referable to the bargain, promise or intention. Whether the conduct satisfies this test will depend upon the nature of the conduct, and of the bargain, promise or intention.
(6) Thus, if the situation falls into category (a) above, the only question is whether the claimant’s conduct is of the type explicitly promised. It is immaterial whether it takes the shape of a contribution to the cost of acquiring the property, or is of a quite different character.’
Mustill LJ continued: ‘(7) The position is the same in relation to situations (b) and (d). No doubt it will often be easier in practice to infer that the quid pro quo was intended to take the shape of a financial or other contribution to the cost of acquisition or of improvement, but this need not always be so. Whatever the court decides the quid pro quo to have been, it will suffice if the claimant has furnished it.
(8) In considering whether there was a bargain or common intention, so as to bring the case within categories (b) and (d) and, if there was one, what were its terms, the court must look at the true state of affairs on acquisition. It must not impute to the parties a bargain which they never made, or a common intention which they never possessed.
(9) The conduct of the parties, and in particular of the claimant, after the acquisition may provide material from which the court can infer the existence of an explicit bargain, or a common intention, and also the terms of such a bargain or intention. Examining the subsequent conduct of the parties to see whether an inference can be made as to a bargain or intention is quite different from examining the conduct of the claimant to see whether it amounts to compliance with a bargain or intention which has been proved in some other way. (If this distinction is not observed, there is a risk of circularity. If the claimant’s conduct is too readily assumed to be explicable only by the existence of a bargain, she will always be able to say that her side of the bargain has been performed.)’
Nourse LJ, Sir Nicolas Browne-Wilkinson V-C, Mustill LJ
[1986] 1 Ch 638, [1986] 2 All ER 426, [1986] 3 WLR 114, [1986] EWCA Civ 4, [1986] Fam Law 300, [1987] 1 FLR 87
Bailii
England and Wales
Citing:
Cited – Gissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
Cited – Pettitt v Pettitt HL 23-Apr-1969
A husband and wife disputed ownership of the matrimonial home in the context of the presumption of advancement.
Lord Reid said: ‘These considerations have largely lost their force under present conditions, and, unless the law has lost its . .
Cited – Crabb v Arun District Council CA 23-Jul-1975
The plaintiff was led to believe that he would acquire a right of access to his land. In reliance on that belief he sold off part of his land, leaving the remainder landlocked.
Held: His claim to have raised an equity was upheld. The plaintiff . .
Cited by:
Cited – Stoeckert v Geddes (Appeal No 66 of 1998) PC 13-Dec-1999
PC Jamaica The claimant claimed against the estate of her former partner. Though not married they had lived together for many years, and she claimed there had been an express understanding that she would receive . .
Cited – Roy Green v Vivia Green PC 20-May-2003
PC (Jamaica) The claimant sought a declaration that he was entitled to one half of the marriage assets on divorce. They had each acquired various properties and assets both in Jamaica and the USA. The judge at . .
Applied – Equity and Law Home Loans Ltd v Prestidge CA 1992
A house was bought in the name of one partner in an unmarried couple. It was subject to a mortgage, and the non-owner contributed a capital sum. The landowner later remortgaged for a larger sum, but without the partner’s consent. The landowner then . .
Cited – Lloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
Cited – Hyett v Stanley and others CA 20-Jun-2003
The couple had lived together at the property without being married for several years. The house was held in the man’s sole name, and after his death she sought a half share in it. It was established that she had been told she should have a half . .
Cited – Yaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
Cited – Wayling v Jones CA 2-Aug-1993
The plaintiff and defendant were in a homosexual relationship. The plaintiff worked for the defendant for nominal expenses against his repeated promise to leave the business to him in his will. A will was made to that effect, but the defendant sold . .
Cited – Oxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .
Cited – Stokes v Anderson CA 1991
The claimant had made two payments, amounting together to andpound;12,000, towards the acquisition of the one half share of the defendant’s ex-wife in the net equity (valued at andpound;90,000) in a house in which the claimant and the respondent . .
Cited – Springette v Defoe CA 1-Mar-1992
Property was purchased in joint names, but with no express declaration of the beneficial interests. The couple had lived together for a short time as joint tenants of the local authority. They were able to purchase at a substantial discount from the . .
Cited – Midland Bank v Cooke and Another CA 13-Jul-1995
Equal equitable interest inferrable without proof
The bank sought to enforce a charge given by the husband to secure a business loan. The property was purchased from the husband’s and his family’s resources and the loan, and was in his name. There had been no discussion or agreement between husband . .
Cited – Banner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
Cited – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Cited – Strover and Another v Strover and Another ChD 10-May-2005
Insurance policies had been taken out by the partners in a firm. The surviving family of one and the remaining partners contested ownership. The policy was held in part for the benefit of the family. The premiums had been paid from partnership . .
Cited – Strover and Another v Strover and Another ChD 10-May-2005
Insurance policies had been taken out by the partners in a firm. The surviving family of one and the remaining partners contested ownership. The policy was held in part for the benefit of the family. The premiums had been paid from partnership . .
Cited – Van Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Cited – Tackaberry and Another v Hollis and others ChD 13-Nov-2007
A house had been purchased in 1982 by one member of a large family. Other family members now disputed whether the land was held in trust for them. A constructive trust was asserted.
Held: The claimants had failed to establish that a . .
Cited – Jones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
Cited – Lloyds Bank plc v Rosset CA 13-May-1988
Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of . .
Lists of cited by and citing cases may be incomplete.
Family, Trusts
Updated: 27 January 2022; Ref: scu.182238