Common intention, express declarations and proprietary estoppel Flashcards
(9 cards)
Modifying an express declaration of trust: the position pre-Stack
longstanding position was express declaration of trust in land was conclusive and couldnt be supplanted except by a subsequent express declaration in writing pursuant to s 53(1) LPA 1925 - no debate equity would intervene in the past as if in writing it was settled
Pettitt v Pettitt - Upjohn LJ - express dec in writing = settled beneficial interests in ladn for all time - cannot be changed except by subsequent declaration
Goodman v Gallant - no issue as to conclusiveness of an express trust unless subsequent declaration in writing - good for conveyancers - if dealing with purchasers of a family home as only deal with what is in writing but not for ppl living in home if not written it down
Making an express declaration of trust in land – the TR1 and JO forms
An express declaration of trust as to the beneficial interests in land must, - in writing, pursuant to s 53(1)(b) LPA 1925.
In practice, when cohabitants are purchasing land – or when receiving land as a gift – the option to execute an express declaration of trust is put forward to the incoming proprietors mid-way through the conveyancing process.
Solicitors and conveyancers will ask incoming proprietors if they want to expressly declare their beneficial interests in the property by completing Panel 10 of the TR1 form, or a separate JO form.
Valid completion of either of these will effectuate an express declaration as to the share of the beneficial interests in the property.
Completion of either is not, compulsory, but there has been a push amongst legal practitioners towards recommending an express declaration to clients as strongly as possible.
A valid declaration can also be made subsequently, at any point after the completion of the conveyance of land.
This change took place after the House of Lords’ ruling in Stack v Dowden.
‘[U]nless varied by subsequent agreement’: the case law post-Stack
Pankhania v Chandegra - ruled that beneficial shares under an express declaration of trust may be modified, but must be done through a deed of variation, and the suggestion that a contrary intention could be inferred or imputed ‘was misplaced.’ - an express declaration could not be modified except by subsequent deed – informal arrangements not made in writing would not suffice.
Gaspar v Zaleski - common intention constructive trust can be used to modify an existing beneficial interest under an express declaration – CICT can override express but obiter dicta
‘[U]nless varied by subsequent agreement’: expanding the scope
Nilsson v Cynberg -
Mr and Mrs bought property in joint legal and beneficial title
2 children and married 5 years later, 2009 Mr = affair and separation. he moved out and agreed in conversation that Mrs would wholly take property so long as she left it to their children in her will - she bore full financial and non financial resp of home
8 years later = divorce proceddings and divroce formalised 4 years alter - no effect on prop and still reg jointly
Mr = declared bankrupt and trustees in bankruptcy claimed that his beneficial interest under express declaration was now vested in them
Held: the express declaration of trust made in 2001 could be varied either by common intention constructive trust or proprietary estoppel (ie both), owing to the common intention of the parties from January 2009 onwards and Mrs Cynberg’s detrimental reliance on those promises made by Mr Cynberg. Consequently, Mrs Cynberg held a full beneficial interest in the home and the trustees in Mr Cynberg’s bankruptcy were held not to have an interest in one half of the home.
The importance of written dispositions of an interest in land pursuant to s 53(1)
Hudson v Hathway
Mr H (C) and Ms H (D) purchased home together 2007 joint legal title but no express declaration made and not married
2009 Mr left Ms and moved with another woman, next 2 years Mr contributed to mortgage greater than Ms, Ms remained in home with their two sons
2011 = enviro disaster so difficult to sell jome - over next 20 months shared emails to discuss finances
2013 Mr said in email she can have all proceeds to house sale
2015 Mr ceased contributing to house and Ms took full responsibility
Ms sold property and said entitled to all proceeds but Mr wanted half
great emphasis on written dispositions
Proprietary estoppel
equitable remedy by which a court will intervene to prevent a legal owner from reneging on their promise to a non-legal owner to confer in that non-owner an interest in their property. We look specifically at estoppel in land. Stop legal owner from going back on promise
The requirements for proprietary estoppel - Gillet v Holt
Assurance made by the legal owner to the non-owner, in the form of representation or acquiescence.
Reliance on this assurance by the claimant.
Detriment suffered on the part of the claimant as a consequence of reliance on that assurance.
necessary that the party making the assurance intended that the assurance be acted upon, per Thorner v Major
The differences between proprietary estoppel and a CICT:
Lord Hope - Stack v Dowden - “Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the ‘true’ owner.
estoppel = minimum award e.g. money they lost etc to remedy it but CICT = identifies beneficial interest and then quantifies it
Both rely on detrimental reliance, but they differ in approach and outcome.
Whilst estoppel is concerned with identifying the claimant’s detrimental reliance on a legal owner’s representation or acquiescence, and estopping that legal owner from reneging on either, a CICT is concerned solely with ascertaining the parties’ beneficial interests.
Perhaps the greatest difference is that where estoppel will only act to enforce the legal owner’s representation or acquiescence to the claimant based on their actual intention – express or inferred – a CICT has greater jurisdiction also to impute an intention as to the quantification of the claimant’s beneficial interest, once the existence of the claimant’s interest itself has been established.
range of remedies for estoppel but CICTs the only action = finding beneficial interest
remedy awarded can range from an estate in the land, to a mere right to occupy or even a simple monetary award. The remedy will be determined on the facts, based on the legal owner’s representation or acquiescence, and the extent of the claimant’s detrimental reliance.
Moreover, a CICT once found has retrospective effect, and dates back to the moment from which the common intention of the parties can be established, as happened in Jones v Kernott.
Proprietary estoppel, however, only comes into effect from the date of the court’s award – it has no retrospective force.
Proprietary estoppel in action: Guest v Guest [2022] 3 WLR 911
defendants, husband and wife owned a dairy farm, from which they promised substantial amount to eldest son upon their death - son worked on farm for 30 years and low wages and living in farm cottage with family (suffered detriment)
father and son fell out and father cut son out of will, son moves out and finds work and accom elsewhere
son claims beneficial interest in farm and cottage by way of proprietary estoppel - 1st judge awarded limp sump payment composed of 50% after tax of the market value of the farming business and 40% after tax of market value of farm itself - required aprents to sell farm inter vivos rather than pass it down to sons after death
parents appealed and CoA upheld ruling
SC - ruled that the purpose of a remedy in proprietary estoppel was to deal with the unconscionability constituted by the promisor repudiating his promise, and that the normal starting point when choosing the appropriate remedy would be to assume that the simplest way to remedy the unconscionability would be to hold the promisor to the promise.
the appropriate reward would be either
- (i) by an award to the claimant of a reversionary interest under a trust of the farm, with the defendants having a life interest in the meantime, or
- ii), in order to provide a clean break, an appropriate monetary payment, discounted to compensate for accelerated receipt, to be paid immediately, it being for the defendants (the parents) to choose between those two alternative forms of relief, and that, if the defendants chose a discounted monetary payment and the parties could not agree on an appropriate amount, the case would be remitted to a judge of the Chancery Division for determination.
Returning to Nilsson v Cynberg: CICTs and proprietary estoppel
‘Rhetorically, why should an express declaration of trust be capable of being overridden by way of a subsequent equity arising by way of a proprietary estoppel, but not by a subsequent equity arising by way of that very similar beast, a common intention constructive trust?’
Is it truly correct that we can both: (1) describe CICTs and proprietary estoppel as indistinguishable, especially considering the variation in potential outcomes, and; (2) that the CICT is equally capable of overriding an express declaration of trust as a remedy by way of proprietary estoppel?
Helen Brander, ‘Express Declarations of Trusts of Land and Later Informal Agreements’ (2024) 6 Private Client Business 242:
- ‘it is remarkable how recent cases have often preferred to rely on a half- sentence of Lady Hale, in what may be an obiter dictum, as more compelling than binding decisions of the Court of Appeal (and earlier decisions of the House of Lords on which they were based), and how little regard is sometimes paid to statutory requirements like those of the Law of Property (Miscellaneous Provisions) Act 1989.’
