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The Development of the Law in Cohabitation Cases Since Stack v Dowden

John Wilson barrister, 1 Hare Court’s detailed review of the Development of the Case law in Cohabitation Claims since Stack v Dowden.

John Wilson, barrister, 1 Hare Court

1. This article is the first in a series of quarterly updates on the law of cohabitation.   In order to put this and future updates into perspective it is helpful to take a long view back at the developments in the law, as it affects cohabitation claims, from Stack –v- Dowden onwards.   There have been numerous developments in different aspects of the law and very many reported decisions.   Each such decision has to be viewed against its own factual matrix as decisions in this area are highly "fact specific".   This article:

• Sets out, in summary, the areas in which there have been developments identifying the relevant cases;
• Recaps the legal position as it was as a result of the decision in Stack–v- Dowden;
• Deals in more detail with the various areas of development in the law.

Areas of development in the law
2. Application of Stack v Dowden

(i) Abbott –v- Abbott [2007] UKPC 53 (26 July 2007)
(ii) Laskar –v- Laskar [2008] EWCA Civ 347
(iii) James –v- Thomas [2007] EWCA Civ 1212 
(iv) Morris –v- Morris [2008] EWCA Civ 257
(v) Holman –v- Howes [2007] EWCA Civ 877
(vi) Fowler –v- Barron [2008] EWCA Civ 377 
(vii) Q –v- Q [2008] EWHC  1874 Fam
(viii) Webster –v- Webster [2009] 1 FLR 1240
(ix) Mirza –v- Mirza [2009] 2 FLR 115
(x) Qayyum –v- Hameed [2009] 2 FLR 962
(xi) Walsh –v- Singh [2010] 1 FLR 1658
(xii) Thomson –v- Humphrey [2010] 2 FLR 107
(xiii) Amin –v- Amin [2009] EWHC 3356 (Ch)
(xiv) Kernott –v- Jones [2010] EWCA Civ 578

3. Imputation or Inference

(i) Abbott –v- Abbott [2007] UKPC 53 (26 July 2007)
(ii) James –v- Thomas [2007] EWCA Civ 1212
(iii) Kernott –v- Jones [2010] EWCA Civ 578

4. Investment properties

(i) Laskar –v- Laskar [2008] EWCA Civ 347
(ii) Adekunle –v- Ritchie [2007] EW Misc 5 (EWCC)
(iii) Amin –v- Amin [2009] EWHC 3356 (Ch)

5. Proprietary Estoppel

(i) Negus –v- Bahouse [2008] 1 FLR 381
(ii) Yeoman's Row –v- Cobbe [2008] 1 WLR 1752
(iii) Thorner –v- Majors [2009] 2 FLR 405
(iv) Powell –v- Benney [2007] EWCA Civ 1283
(v) Negus –v- Bahouse [2008] 1 FLR 381
(vi) Holman –v- Howes [2007] EWCA Civ 877
(vii) Herbert –v- Doyle [2008] EWHC 1950 (Ch)
(viii) Q –v- Q [2008] EWHC  1874 Fam
(ix) Stallion –v- ASH & Stallion [2009] [2010] 2 FLR 78
(x) MacDonald & Bannigan –v- Frost [2009] EWHC 2276 (Ch)
(xi) Gill –v- Woodall & RSPCA
(xii) Cook –v- Thomas [2010] EWCA Civ 227 (an appeal on the facts)
(xiii) Henry –v- Henry [2010] UKPC 3
(xiv) Lester –v- Woodgate [2010] EWCA Civ 199
(xv) Ashby –v- Killduff [2010] EWHC 2034 (Ch)

6. Equitable Accounting

(i) Wilcox –v- Tait [2007] 2 FLR 871
(ii) Young –v- Lauretani [2007] 2 FLR 1211
(iii) Murphy –v- Gooch [2007] 2 FLR 934
(iv) Re Barcham (In Bankruptcy) [2008] EWHC 1505 (Ch)
(v) Amin –v- Amin [2009] EWHC 3356 (Ch)

7. Creditors and the family home

(i) Close Invoice Finance Ltd –v- Pile [2009] 1 FLR 873
(ii) Re Haghighat (A Bankrupt) [2009] 1 FLR 1271
(iii) National Westminster Bank Plc –v- Rushmer [2010] 2 FLR 362

8. Undue Influence

(i) Wallbank & Wallbank –v- Price [2008] 2 FLR 501
(ii) Hewett –v- First Plus Financial Group Plc [2010] EWCA Civ 312
(iii) Smith –v- Cooper [2010] EWCA Civ 722

9. Miscellaneous

(i) Staden –v- Jones [2008] EWCA Civ 936
(ii) Wallbank & Wallbank –v- Price [2008] 2 FLR 501
(iii) De Bruyne –v- De Bruyne & Others [2010] EWCA Civ 519
(iv) Miller Smith –v- Miller Smith [2010] EWCA Civ 1297
(v) Baker –v- Rowe [2010] 1 FLR 761
(vi) Ashby –v- Killduff [2010] EWHC 2034 (Ch)

The legal position in the wake of Stack –v- Dowden
10. The ratio of this case is difficult to summarise, not least because of the divergence of views between Lord Neuberger and the majority of the House.  It is also important to bear in mind that:

(i) Stack –v- Dowden was a case where the property in question was held in joint names so that the first stage of the enquiry dictated by Lord Bridge in Lloyds Bank –v- Rosset [1991] AC 107: "was there an intention that the parties share ownership of the property?" was not in issue;

(ii) Stack –v- Dowden concerned a property that was acquired by the parties prior to the introduction of the TR1 Land Registry form so it was not a case where, as in so many cases involving properties in joint names acquired after 1st April 1998, there was an express declaration of trust on the face of the transfer;

(iii) Much of the jurisprudence settled by Lloyds Bank plc –v- Rosset [1991] AC 107 remains in place so that it is necessary to have an understanding of Rosset when advising on a cohabitation claim.

Lloyds Bank plc –v- Rosset
11. Under Rosset the House of Lords set down a two stage enquiry:

(i) Was there a common intention for the ownership of the property to be shared?
(ii) If so, what was the parties' common intention as to the quantum of shares?

There was also a need for the claimant to establish detrimental reliance.  It was important to keep the above two stages of enquiry separate.  At the first stage , whilst it was relatively easy to infer an intention to share ownership where the legal title was shared, where the property was in the sole name of one party Lord Bridge held that the common intention to share ownership might be established either:

(a) By express discussions evidencing an agreement or understanding (Rosset I); or
(b) By drawing inferences from conduct (Rosset II).

The necessary conduct, in Lord Bridge's view consisted of direct contributions to the purchase price of the property, whether initially or by assuming liability under a mortgage and / or by payment of mortgage instalments.  It was, he said, "extremely doubtful whether anything less will do".   This was a strict test.   However, this first stage of the enquiry was not in issue in Stack v Dowden because in Stack the property was in joint names.
The majority view in Stack –v- Dowden
12. The majority came to the following conclusions:

(1) Just as the starting point where there was sole legal ownership was sole beneficial ownership, the starting point, in the domestic context, where there was joint legal ownership, was joint beneficial ownership.    The onus was on the party contending that the beneficial interests were divided otherwise than as the title showed to demonstrate this on the facts.  A conveyance of a domestic property into joint names indicated both legal and beneficial joint tenancy, unless and until the contrary was proven.

(2) In identifying the extent of the parties' beneficial interest in a property, the court was seeking 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 (note that this is stage two of the Rosset enquiry as stage one is not usually engaged where the property is in joint names).

(3) In the context of homes conveyed into the name of one party only, a more flexible approach to quantification of an established beneficial interest had emerged; curiously, in the context of homes conveyed into joint names, but without an express declaration of trust, the courts had sometimes reverted to the strict application of the principle of resulting trust.   The approach to quantification in cases in which the home was conveyed into joint names should certainly be no stricter than the approach to quantification in cases in which it had been conveyed into the name of one only and to the extent that cases such as Walker –v- Hall [1984] 1 FLR 126, Springette –v- Defoe [1992] 2 FLR 388 and Huntingford –v- Hobbs [1993] 1 FLR 736 held otherwise they should not be followed.  When quantifying an established beneficial interest, the court should take a wide view of what contributions were to be taken into account (note again this is stage two of the "Rosset enquiry"), while remaining sceptical of the value of alleged improvements that were really insignificant, or elaborate arguments, suggestive of creative accounting, as to how the family finances were arranged.

(4) In a joint names case, the questions were not simply "what is the extent of the parties' beneficial interests?" but "did the parties intend their beneficial interests to be different from their legal interests?" and "if they did, in what way and to what extent?"  There were differences between sole and joint names cases when trying to divine the common intentions or understanding between the parties, including the fact that the decision to put the property into joint names would almost always have been a conscious decision.

(5) The burden would be on the person seeking to show that the parties had intended their beneficial interests to be different from their legal interests, and in the ordinary domestic case it would be difficult to establish to the court's satisfaction that an intention to keep a sort of balance sheet of contributions existed or should be inferred or imputed to joint owners.  The domestic context was very different from the commercial world.  Many factors other than financial contributions were likely to be relevant.  Ultimately, cases in which joint legal owners would be taken to have intended that their beneficial interests should be different from their legal interests would be very unusual.

(6) Stack –v- Dowden was a very unusual case in that, although the couple had cohabited for a long time and had four children together, they had kept their financial affairs rigidly separate.  This was strongly indicative that they did not intend their share, even in the property in joint names, to be held equally.  Ms Dowden had made good her claim for 65% of the property, having contributed far more to the acquisition of the house than Mr Stack

The minority view in Stack –v- Dowden
13. It is important to stress that Lord Neuberger's view is not the law insofar as it is in conflict with the view of the majority1.  Lord Neuberger argued for a stricter more "Chancery based" approach which would lead to greater certainty and clarity in the law.  The approach should be the same in the commercial context as it was in the domestic context albeit that the different factual circumstances could lead to different results.  Where cohabitants had made different contributions to the purchase price of a property, the beneficial ownership, in the absence of relevant evidence to the contrary, would be held in the same proportions as the contributions to the purchase price under a resulting trust, because, given that the presumption of advancement did not apply, this was the practical and most consistent approach.   If there was other relevant evidence enabling the court to deduce the intention of the parties, the resulting trust could be rebutted and replaced by a constructive trust.  Such an intention could be express or inferred, but not imputed.  Where the resulting trust presumption applied at the date of acquisition, only subsequent discussions, statements or actions which could fairly be said to imply a positive intention to depart from the apportionment would justify a change in the way in which the beneficial interest was held.

The linguistic argument around the words "impute" and "infer" may have considerable significance.   Lord Neuberger identified the difference thus at paragraph 126:

"An inferred intention is one which is objectively deduced to be the subjective actual intention of the parties, in the light of their actions and statements.  An imputed intention is one which is attributed to the parties, even though no such actual intention can be deduced from their actions and statements and even though they had no such intention.  Imputation involves concluding what the parties would have intended whereas inference involves concluding what they did intend."

14. It is not, however, clear that Baroness Hale, who gave the main speech for the majority, differed in substance from Lord Neuberger's conclusion as to the court's task.  Although she referred to "actual, inferred or imputed" at paragraph 60 she said at paragraph 61, having referred to the Law Commission's Discussion Paper on Sharing Homes (which suggested a holistic approach to quantifying a beneficial share with the court undertaking a survey of the whole course of dealing between the parties and taking into account all conduct which throws light on the question of what shares were intended):

"That may be the preferable way of expressing what is essentially the same thought for two reasons.  First, it emphasises the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended.  Second, therefore, it does not enable to the court to abandon that search in favour of the result which the court itself considers fair.  For the court to impose its own view of what is fair upon the situation in which the parties find themselves would be to return to the days before Pettitt –v- Pettitt [1970] AC 777 without even the fig leaf of section 17 of the Married Women's Property Act 1882."

15. The above statement chimes with the need for the court to infer rather than impute an intention.  The extent to which the courts have subsequently purported to impute an intention is dealt with below.  Fortunately, the very recent case of Kernott –v- Jones [2010] EWCA Civ 578 suggests that "imputation" has been kicked into the long grass.

16. If the court is entitled to impute a common intention it can insert its own views as to what the parties intended even though, as a matter of fact, that was never their intention.  The court could, therefore, impose its own view of what would be fair.

17. It is difficult, when reading paragraphs 60 and 61 of her speech together to know what Baroness Hale meant by "imputation".  It is perhaps unfortunate that in subsequent cases the mantra "actual, inferred or imputed" has been adopted by the Courts without much analysis of what that is intended to mean.  Taking matters slightly out of turn in Kernott –v- Jones [2010] EWCA Civ 578 Rimer LJ was moved to say at paragraph 77 – with somewhat forced politeness – after analysing Baroness Hale's opinion on this point:

"As for Baroness Hale's statement in [60] that the court must or can also look for the parties' imputed intention, I do not, with the greatest respect, understand what she meant."

The House of Lords was plainly intending to discourage cohabitation disputes where the title was in joint names.   However, there was a strong argument for saying that Stack –v- Dowden itself was not an exceptional case.   Furthermore, Baroness Hale, at paragraph 69 of her judgment set out a non-exhaustive list of the factors which might persuade a court to conclude that the beneficial interests should not follow the legal title.  Potentially, therefore, there was plenty of ammunition for litigation going forward.

18. Stack was concerned with stage two of the Rosset enquiry and so anything said on stage one was strictly obiter.  However, they did indicate that Lord Bridge's test, summarised above, was too narrow and potentially productive of injustice.  The law, they said, had moved on.

19. Fortunately, the Privy Council was able to consider stage one only a few months later in Abbott –v- Abbott [2007] UKPC 53 (26 July 2007).  Abbott was an appeal from the Eastern Caribbean Court of Appeal where there is no statutory ancillary relief regime operating on divorce and property disputes are resolved under the general law of property and trusts.   The case concerned the beneficial ownership of a former matrimonial home in the husband's sole name.   The Eastern Caribbean Court of Appeal relied heavily on Lord Bridge's dicta as a reason for strictly limiting the wife's claims.  The Privy Council followed up on their disapproval (as Law Lords) of the narrow Rosset test and concluded that the court had 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."   In other words, Rosset II has been significantly widened.  There was, however, also a concern that the way in which the Board dealt with the point in Abbot tended to blur the distinction between stage one and stage two of the Rosset enquiry2.

The application of Stack –v- Dowden

The application of Stack in subsequent cases
20. In Holman –v- Howes [2007] EWCA Civ 877 was one of the earliest applications of Stack by the Court of Appeal.  Citing the speech of Baroness Hale Lloyd LJ stated at paragraph [30] that the Court's inquiry should be directed to what was intended between the parties or, if that cannot be identified directly, what they must be taken from their conduct to have intended.  "It is not for that which the court considers fair."   This was a case where attempts were made to rely on "post-acquisition" matters as part of the whole course of dealings in relation to a property as indicating the necessary common intention to share ownership.   The legal owner of the property, a man, had left the property in 1980 and the woman had then been solely responsible for its upkeep and did not pursue claims for maintenance in respect of the parties' daughter.   The Court of Appeal declined to take these matters into account (at paragraph [32]):

"With the benefit of Stack v Dowden to assist, it seems to me that the matters sought to be relied on can be seen as plainly irrelevant to this particular inquiry.  To take them into account would be to go back to the impermissible question of what the court considers fair."

In other words, inference but not imputation was necessary.

21. In James –v- Thomas [2007] EWCA Civ 1212 the property was in the man's sole name when the woman moved in with him.  She gave him £5,000 to enable him to pay a tax bill and worked with the man in carrying out some remedial work to the property as well as assisting him in his business.  Over the years they carried out extensive renovation to the property funded by the man's business.  Planning applications were in joint names and both were involved in the hands-on aspects of the work.    The man had observed that such works would benefit both of them and that the woman would be well provided for on his death.  Some years later the relationship broke down, the woman moved out and their business partnership was dissolved.  She relied on the doctrines of constructive trust and proprietary estoppel to establish a beneficial interest in the property.  In cross-examination the man conceded that in fairness the woman was entitled to some interest in the property.   The judge dismissed the woman's claim and the Court of Appeal upheld that judgment.

22. The Court of Appeal rejected the judge's contention that a constructive trust could only arise at the time of acquisition of the property.  The common intention necessary to found a constructive trust could be formed at any time before during or after the acquisition of a property.  A constructive trust could therefore arise some years after the property had been acquired by and registered in the sole name of one party.  However, in the absence of an express post-acquisition agreement, the court would be slow to infer from conduct alone that the parties intended to vary existing beneficial interests established at the time of acquisition.   These observations by Sir John Chadwick at paragraphs [23]  - [25] are of increasing significance as parties attempt to get round the strictures of Stack by relying on post-acquisition activities (e.g. renovations or extensions) to alter the beneficial interests favourably for them.  Frequently, there is an absence of the necessary post-acquisition agreement / common intention necessary to vary the existing beneficial interests.

23. The Court of Appeal also confirmed that a common intention as to beneficial shares in a property could be inferred from evidence of the parties' conduct during the whole course of dealings in relation to the property.  Perhaps surprisingly the court concluded that this woman's contributions / conduct did not give rise to the inference of a common intention to share ownership3.

24. The Court of Appeal  also accepted that the assurance that the woman relied upon – "this will benefit us both" – meant no more than the improvements to the property would improve the quality of the couple's life together. The representation that she would be well provided for out of his estate on his death dealt with the position after his death and not with current beneficial interests.   She had not acted to her detriment: the true position was that she had worked with the man in the business and helped with the improvements because she and he were making their lives together.   Furthermore, the man's concession as to "fairness" could not govern the result and neither could the court's sense of what would be fair.   The CA relied upon paragraph [61] of Baroness Hale's speech: (see paragraph [38])

"it is not for the court to abandon the search for the result which reflects what the parties must, in the light of their conduct, be taken to have intended in favour of the result which the court itself considers fair."

25. In Fowler –v- Barron [2007] EWCA Civ 377 the man and woman had a relationship over 23 years which began when the man was 47 and the woman 17.  They had two children, and five years into their relationship, they purchased a property in joint names as a family home.  There was no declaration of trust but the survivor could give valid receipt for capital money.  The man paid the deposit and other capital towards the purchase of the property from the proceeds of his previous home and, although the mortgage was in joint names, he always paid it out of his pension.  The woman used her income for herself and the children and the man paid everything else.  The trial judge (the case took place before Stack in the Lords) rejected the woman's claim for a beneficial interest in the property and declared the man as the sole beneficial owner.  The Court of Appeal allowed her appeal.  Following Stack it held that the relevant technique in such cases was the common intention constructive trust, rather than the resulting trust.  In concentrating on the parties' financial contributions, rather than their shared intentions, the judge had erred in principle and the CA had to intervene and reach its own conclusions.

26. As a matter of law, a presumption of joint beneficial ownership arose from the fact that the parties were joint legal owners.  Without any declaration of trust the onus to rebut the presumption was on the individual asserting that the property was owned other than in equal shares.  In determining whether the presumption arising from the transfer into joint names had been rebutted, the court must in particular consider whether the facts were inconsistent with the inference of a common intention to share the property in equal shares, to an extent sufficient to discharge the civil standard of proof on the person seeking to displace the presumption.  The emphasis was on the parties' shared intentions.

27. For the purpose of determining the parties' shared intentions about beneficial ownership of the property the court must consider the whole of the parties' relationship so far as it illumined their shared intentions about the ownership of the property, drawing any appropriate inferences.  The conduct that the court would take into account included, but was not limited to, financial contributions made towards the acquisition of the property.  If the parties had made unequal contributions to the cost of acquiring their home, it was obvious that there was a thin dividing line between the case in which the parties' shared intention was properly inferred to be ownership of the home in equal shares, and the case in which the parties' shared intention was properly inferred to be unequal shares.   Importantly, the man could not rely on his secret intention that the woman should only benefit in the event of his death.  It was not evidence of the parties' shared intention.  Similarly, the fact that man did not understand the legal effect of putting the property into joint names was not relevant.

28. Fowler –v Barron is an important case in that it applies Stack fairly strictly and emphasises the need for something exceptional to rebut the presumption created by putting the property into joint names.   It can be seen as attempting to close the door (or at least narrow the opening) left by the lengthy list of potential factors set out by Baroness Hale at paragraph 69 of her speech.  Indeed, there have been academic doubts (now echoed by the Court of Appeal  in Kernott –v- Jones) as to whether Stack itself was an exceptional case warranting the rebuttal of the presumption.  It is also important to bear in mind, when considering Fowler –v- Barron that the court was concerned with the second stage of the Rosset enquiry so that the range of factors that could be taken into account was wider than would have been the case at stage one, notwithstanding the widening of the categories at that stage by Abbott –v- Abbott (which was not, apparently, cited to the Court of Appeal ).

29. In Morris –v- Morris [2008] EWCA Civ 257 the CA allowed a man's appeal against an order granting the woman a beneficial interest in a farm.  In doing so, it echoed and approved the conclusions reached in James –v- Thomas.   For there to be a common intention constructive trust and for a beneficial interest to arise thereunder the court has to be satisfied that the parties each had the intention communicated to each other that, notwithstanding the paper title (this case was concerned with a farm in the man's late mother's name) and notwithstanding the absence of writing there should be a disposal of a beneficial interest in land to the claimant woman.   Whilst, see James –v- Thomas, the court can find that a beneficial interest is subsequently acquired by reason of conduct alone, the court should be slow to infer from conduct alone that the parties intended to vary existing beneficial interests established at the time of acquisition.  Such a constructive trust would be "a rare bird" – see paragraph 20 of the judgment.  The CA reminded itself of what Baroness Hale said at paragraph [61], albeit reminding themselves that Baroness Hale was concerned with the second question that Rosset poses ("what is the extent of the beneficial interest?").  Sir Peter Gibson said at paragraph 23:

"The authorities make it clear that a common intention constructive trust based only on conduct will only be found in exceptional circumstances.  The evidence in the present case seems to me, with respect to the judge, to be wholly inadequate to establish any such common intention."

30. The Court of Appeal also held that the conduct relied upon by the woman in Morris did not have to lead to the conclusion that she was acquiring an interest in land.  Again, echoing James –v- Thomas the Court of Appeal  held that the court should be cautious before finding that the activities of a wife or cohabitant can only be explained on the footing that she believes that she was acquiring an interest in land.   As to "fairness" see paragraph 30:

"For these reasons it seems to me that, with all respect to the judge, he was beguiled by the submissions made to him into believing that he could produce what he regarded as a reasonable or fair result in favour of the claimant.  I am afraid that he did not have that luxury.  The law would be in a hopelessly unsatisfactory state if that were the basis on which decisions in this area were made.  The court's approach must always be principled.   The court must be satisfied that the requisite tests have been satisfied with sufficient certainty and any inferences must be founded on findings of fact which can be sustained."

31. Morris is an important appellate case.  For some reason it does not appear to have been reported whilst many first instance cases find their way into the law reports.  It deals with an issue that is likely to arise with increasing frequency as a party whose name is not on the title deeds (and may not have been around when the property was purchased) seeks to establish a post-acquisition change in the beneficial interests or, conversely, where a party who shares legal title seeks to show an expansion in his / her share of the beneficial interest attributable to post-acquisition contributions.   This decision reinforces the CA's stance in James –v- Thomas and makes it clear that the task will be an uphill one.

32. In Q –v- Q [2008] EWHC  1874 Fam the brother and father of a husband claimed in ancillary relief proceedings that the matrimonial home, which was in the name of the brother, remained the property of the brother and father and did not belong to the husband and wife.  The spouses had reached an agreement whereby the father moved out of the property and they would sell their assets including their former matrimonial home in order to raise money for the renovation of the property which would become their home and they would become the beneficial owners.   Although draft transfers were prepared, so that the brother could transfer the property to the husband, they were never executed.  The property had originally been in the father's name and he had transferred it out of his name to avoid inheritance tax.   Black J found that whether one considered the matter on a constructive trust analysis or on the basis of proprietary estoppel, the beneficial ownership in the property belonged to the husband and wife.  There had been an agreement entered into by all the parties and the husband and wife had acted upon it to their detriment.  The shared intentions were clear from the terms of the agreement.  Whether the husband and wife had established a proprietary estoppel or a constructive trust the minimum award necessary to do justice in the case was for the property to belong either to the husband or to the husband and wife.  Furthermore, the father's claim that he had retained the beneficial ownership in the property even after transferring legal title to the brother could not be pursued because, in effect, the father was pleading an illegal purpose and under the presumption of advancement the transfer by the father to his son was presumed to be a gift.  In reaching her conclusions Black J relied upon Baroness Hale's comments at paragraph [60].

33. Webster –v- Webster [2008] EWHC 31 Ch was another 1975 Act claim.  The man and woman had lived together for 27 years and had two children.  The family home had been registered in the man's sole name.  They kept separate bank accounts and the man paid the mortgage throughout.  The woman paid at least some of the bills for furnishings, services and the children's clothes and food.  Both worked but the man's income was considerably larger than the woman's.   The man died suddenly, intestate, at the age of 54.  The woman claimed a beneficial interest in their home and a beneficial interest in company shares vested in the man's sole name.  She accepted that there had been no express discussions as to the beneficial interests each were to have but claimed that the property had been regarded as by both of them as joint property.  At the time of the hearing the property was worth about £160,000 with a mortgage of just under £12,000. 

34. HHJ Behrens took the view that a considerable degree of caution was needed when considering uncorroborated evidence of evidence of events that took place over 20 years ago (see also the words of caution in James –v- Thomas) given that the other party to the transaction was dead.  The fact that there had been no express discussions as to beneficial interests, that the woman's financial contributions to the family budget had been considerably less than the man's, that there had been no formal commitment to the relationship by the man, and the degree of caution needed, it was impossible to impute (sic) to the man and woman a common intention that the property was to be held as beneficial joint tenants, or any common intention that the woman should have any interest in the shares.  However, the indirect contributions made by the woman would lead to an inference that she had some interest in the family home, assessed at between 33% and 40%.

35. The court was influenced in coming to its decision by Oxley –v- Hiscock [2004] EWCA Civ 546 and James –v- Thomas [2007] EWCA Civ 1212

36. In Mirza –v- Mirza [2009]  EWHC 3 (Ch) the facts are, again, complicated.  The husband and wife lived in a property owned by the husband's middle brother pursuant to an assured shorthold tenancy.   The middle brother was the only financially astute and successful member of the family.  In divorce proceedings the wife alleged that the tenancy agreement was a sham and that the husband was the real beneficial owner of the property but that he had concealed this ownership in order to be able to claim housing benefit.    A declaration was made in favour of the middle brother.  It was not credible that the husband could have saved the amounts of money required to acquire an interest in the property.   As a matter of fact the court did not accept that the boasts he had made about his financial situation were sustainable.  The evidence supported the contention that the middle brother, who was wealthy in his own right, had made the capital investments and was the sole beneficial owner of the property.  In coming to that conclusion Stephen Smith QC (sitting as a Deputy High Court Judge) relied upon Stack v Dowden and James –v- Thomas.

37. In Qayyum –v- Hameed & Another [2009] EWCA Civ 352 the factual background is relatively complex.  The property was transferred from the wife's name into joint names on the husband's innocent misrepresentation that a freezing order obtained against him would prevent him from using monies to pay legal costs.  The wife argued, when faced with a charging order, that she was the sole beneficial owner of the property and that she had been induced into transferring the property into joint names on the basis of the husband's misrepresentation, albeit innocent.   That argument was not accepted in bankruptcy proceedings.  Her appeal was dismissed. 

38. The judge had been entitled to conclude that there had been an agreement between the husband and wife that involved transferring the property back into joint names. There was sufficient detriment to the husband in the agreement to satisfy the requirements of a constructive trust (the husband had taken responsibility for a mortgage as part of the arrangements).   Therefore, subject to the issues of mistake and misrepresentation, it would have been unconscionable to have left the husband saddled with the liabilities under the mortgage without the promised property interest.   The fact of the innocent misrepresentation by the husband did not prevent the creation of a common intention constructive trust.  In those circumstances, notwithstanding the innocent misrepresentation by the husband a common intention constructive trust arose. 

39. As time has passed the decisions of the courts can be seen to be moving towards an orthodoxy based upon the decision in Stack that acknowledges the reasoning of the House of Lords whilst taking a fairly strict line on exceptions to the presumption that equitable title follows the legal title.  Thus, in Thomson –v- Humphrey [2010] 2 FLR 107 Warren J adopted a classical, and it is submitted, correct approach to the law as it now stands.  

40. In Thomson –v- Humphrey when the man and woman began their relationship the man lived in his own property and the woman lived in rented accommodation.  After a time the man purchased a property ("the original property") for the woman and her children to live in.   The woman gave up her part-time job on the basis of the assurances from the man that he would look after her.   Subsequently, the couple decided that the woman and her children should join the man in his home.  Before this happened the man tried to get the woman to sign a "living together" agreement, acknowledging that she would have no interest in either the property she was about to move into or any future property.  She refused but moved in anyway.  Some time later the man sold the original property and purchased a new property as a "family home" for himself, the woman and her children.  The woman acted as housekeeper, did a little work for businesses belonging to the man, and helped to manage various development projects at the new property.  When the relationship eventually broke down, the woman asserted a beneficial interest in the new property on the basis that there had been a common intention that she should have a share, or that the value of the original property which had been purchased for her use, was to be taken as her contribution to the new property.

41. Warren J dismissed her application.  In doing so he applied Stack strictly.  It was not a matter of fairness.  A claimant who sought to establish a beneficial interest as against the holder of the legal title must show that it was intended that she should have a share, and must then establish the extent of that share.  The task of the court 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 the property.  Wherever reliance was placed on an actual agreement as to beneficial ownership, it was only if the claimant had acted to her detriment that she would be able to establish a right.

42. The man's instructions to his solicitor to draft the "living together" agreement, and his attempt to get the woman to sign it, made it clear that at that stage the man did not intend the woman to have any beneficial interest in his home, or in any future "family" home and a heavy onus was on the woman to show that this clear intention had changed by the time of the actual acquisition of the new property.  It was not possible to infer from the fact that the agreement was not signed that the man recognised that the woman already had an interest in the original property, or was intended to have an interest in a future property.  In any event the woman was unable to establish sufficient detriment.  At paragraph [95]:

"But even if it is wrong to say that there is no agreement giving rise to a common intention that the claimant was to own the Long Stratton property, I do not consider that the matters relied on here amount to sufficient detriment to allow her to assert that claim.   The detriment was essentially giving up her job and leaving her home, effectively losing employment prospects.  I am afraid that I cannot attach much weight to that in the context of her circumstances at the time.   She had a poorly paid part-time job with no prospects.  The giving up of a job is referable, in my judgment, not to an expectation that she would own or have a share in the property, but to the assurance that she would be looked after.  Now, that may or may not be an assurance that she now regards as having been breached, but even if she does, I am not satisfied that her move can be seen as having been in any way in reliance on the prospect of ownership of the property."

43. Thomson –v- Humphrey represents a return to the traditional orthodoxies as expressed in Rosset and modified by Stack.   Warren J's lucid judgment is one that practitioners should consider carefully before advising in any case where there is likely to be loose reliance on generalised representations and, perhaps, insubstantial detriment.   It needs to be considered alongside Kernott –v- Jones (see below).

44. In Walsh –v- Singh [2009] EWHC 3219 (Ch) the female claimant (a barrister) again failed to establish a beneficial interest in property owned by her former partner.  Again, the claimant carried out works in making a property habitable and, indeed, was instrumental in finding the property eventually purchased by the man, in his sole name and from his resources.     At paragraph 19, after outlining some of the works carried out by the woman, HHJ Purle QC, sitting as a Deputy High Court Judge, said:

"Overall, though, these works were explicable by her wish to live at Vale Cottages, and said nothing about ownership."

45. Her claim in respect of a field and paddock also failed as these were not owned by Mr Singh but were owned by his SIPP.   The claimant had paid £7,500 to Mr Singh in connection with the fields and £25,000 to him in respect of the paddock.  Mr Singh said that these were loans which in the case of the £7,500 he had repaid and in respect of the £25,000 he acknowledged were repayable with the interest.  The judge accepted that they must have been loans as otherwise the SIPP arrangements would have been ineffective.

46. An important element of her case was that she had given up the Bar at Mr Singh's request to concentrate on an equestrian business.   The judge accepted that she had given up the Bar and that she had been motivated by her wish to devote herself to the development of the Vale Cottages property, especially once the additional fields had been acquired.   She said that she would not have given up her career if she had not been told that "half of everything we were doing was mine."    The judge did not accept her evidence.  At paragraph 35:

"Nevertheless, I do accept that she gave up the Bar so as to devote more time to the horse side of the business.  She was willing to do this because she was engaged and planning to get married to Mr Singh, and saw her future life with him.   ... [36]... I have no doubt that it was a joint decision (to give up the Bar), which suited both of them.  It suited Mr Singh to have Miss Walsh on the premises running an equestrian business, and it suited Miss Walsh because she preferred to be working with horses than be at the Bar.  She was successful at the Bar, but the life was pressured and she preferred to be around horses."

47. The learned judge rejected her claims for a beneficial interest in the property (see paragraphs [38] to [60]4.

48. Perhaps the most important case, post Stack is the very recent Court of Appeal decision in Kernott –v- Jones [2010] EWCA Civ 578.   In that case it was common ground that when the man left the woman they had an equal beneficial interest in the home that she continued to occupy and maintain.  The parties surrendered a joint policy and divided the proceeds and the man used his half to put down a deposit on a new property.   It was common ground that the woman had no interest in the new property.  The man provided little by way of maintenance for the parties' children and did not contribute to the mortgage or any of the outgoings associated with the former family home.   In May 2006, some 12 years after the parties separated, the man sought his half share of the property and in March 2008 he purported to sever the beneficial joint tenancy.   It was common ground between the parties that if the man had sought his half share at the time of separation he would have been entitled to it.   However, the trial judge concluded that he was entitled to look at the whole course of dealings post separation and at the fact that the man had made no contribution to the property post separation.  He concluded that the man's share had been reduced by the time of trial to 10%.    Mr Strauss QC, sitting as a Deputy High Court Judge, heard the man's appeal and upheld the trial judge.   He concluded that he was entitled, following the words of Baroness Hale at paragraph [60] of Stack to "impute" a common intention even though that was not an intention that either party actually had.  

49. The Court of Appeal by a majority allowed the man's appeal.  This case is likely to be one of the most important post Stack decisions.  It is rumoured to be heading for the Supreme Court.   It brings some much needed clarity to the law.    If it is upheld in the Supreme Court, it will render the mantra "actual, inferred or imputed" obsolete.    Whilst accepting that there was considerable force in Lord Neuberger's minority view, the CA reminded itself that this was not the law.   Wall LJ, as he was at the time of the hearing of the appeal, identified the critical question (see paragraph [57]) as being whether he "infer" from the parties' conduct since separation a joint intention that, over time, the 50 – 50 split would be varied so that the property is currently held 90% by the woman: "Presumably, if the beneficial interests are "ambulatory" and the ambulation continues in the same direction, the appellant's interest in the property will at some point be extinguished."  At paragraph [58]:

"This is a point which I have considered anxiously, and at the end of the day I simply cannot infer such an intention from the parties' conduct.  In my judgment, the conveyance into joint names, following Stack –v- Dowden created joint beneficial interests, and the parties agreed that when they separated they had equal interests.  There has to be something to displace those interests, and I have come to the conclusion that the passage of time is insufficient to do so, even if, in the meantime, the appellant has acquired alternative accommodation, and the respondent has paid all the outgoings.  In my judgment, the appellant has a 50% interest in the property, and both the judge and the deputy judge were wrong to conclude otherwise."

50. Rimer LJ, having revisited what Baroness Hale said at paragraphs [60] and [61] of her speech, he said at paragraph [72]:

"All that Baroness Hale said might, therefore, suggest that a bid by a joint purchaser to establish a greater beneficial interest than a joint interest will involve the steepest of climbs, usually resulting in a failure to attain the summit."

51. And at paragraph [74]:

"I suspect that Stack may be regarded by trial judges as presenting something of a challenge.   I am not sure, with respect, what is to be made of the emphasis by Baroness Hale and Lord Walker that Stack was an exceptional case.  The unequal contributions to the purchase in that case would not, I would think, be unusual and it was that fact that appears to have influenced Lord Hope.  The `context' to which Baroness Hale referred may be unusual.  I do not know, but the fact in every case will be different and each case has to be decided on its own facts."

52. Rimer LJ's scepticism about whether Stack was an exceptional case echoed the academic views about that conclusion.  In paragraphs [76] and [77] he submitted the words "actual, inferred or imputed" to a rigorous analysis.  Since an inferred intention is also, by definition, an actual intention, "actual" must be a synonym for "express".   He had far greater difficulty in attempting to work out what "imputed" was supposed to mean.   He said, at paragraph [77]:

"As for Baroness Hale's statement in [60] that the court must or can also look for the parties' imputed intention, I do not, with the greatest respect, understand what she meant.   It is possible that she was using it as a synonym for inferred (cf such use by Lord Pearson in Gissing –v- Gissing [1971] AC 886 at 902G – H), in which case it adds nothing.  If not, it is possible that she was suggesting that the facts in any case might enable the court to ascribe to the parties an intention that they neither expressed nor inferentially had: in other words, that the court can invent an intention for them.  That, however, appears unlikely, since it is inconsistent with Baroness Hale's repeated reference to the fact that the goal is to find the parties' intentions, which must mean their real intentions.  Further, the court could and would presumably only consider so imputing an intention to them if it had drawn a blank in its search for an express or an inferred intention but wanted to impose upon the parties its own assessment of what would be a fair resolution of their differences.  But Baroness Hale's rejection of that as an option at paragraph [61] must logically exclude that explanation.  In his dissenting speech, Lord Neuberger at [125] to [127] advanced an apparently comprehensive demolition of the "imputation" theory.   I recognise that those paragraphs cannot be invoked as support for the view that Baroness Hale's unexplained use of the word "imputed" was not intended to mean what it might be read as meaning.  But if she was using the word in its ordinary meaning, it is in my view also difficult to see how the imputing to the parties of a non-existent intention can stand with her emphasis that the burden of rebutting the presumed joint beneficial interest is heavy and that, only in very unusual cases, will it be discharged.   That is because, if the "imputing" of an intention is open to trial judges, they could in principle do it in every case in which an assessment of the relevant history reflects an unequal contribution to the purchase.  I accordingly do not myself interpret Stack as having intended to enable the courts to find, by way of the imputation route, an intention where none was expressly uttered nor inferentially inferred."

53. Rimer LJ agreed with Wall LJ that there was no evidence to displace the 50 – 50 beneficial interests.   At paragraph [84] he noted that Ms Jones might perhaps question the fairness of an outcome which leaves her with the same 50% she had in 1993.  However, he said, fairness can only be assessed by reference to the principles which govern these disputes. 

54. The decision of the majority of the CA in Jones –v- Kernott exposes fault-lines in the reasoning of the House of Lords in Stack.   In particular, is there any room for imputation and a court imposed decision based upon subjective assessments of fairness?  Further, was Stack such an unusual or exceptional case?    If the case does go to the Supreme Court these issues are likely to require further ventilation and, it may be, the decision of the House of Lords in Stack may need to be revisited.  While the outcome of Kernott has been subjected to professional criticism it does underline the fact that any reform will ultimately have to come from the legislature.  That, however, seems unlikely at the present time.

Inferred or imputed intention
55. Since deciding upon the structure of this article, the decision of Kernott –v- Jones discussed in preceding paragraphs has been published.   The difficulty arose from the use by the majority of the House of Lords of the mantra "actual, inferred or imputed" in respect of the necessary common intention.   The mantra was repeated in subsequent cases, including Abbott, although in the majority of the cases – mostly set out above, whilst repeating the mantra, the courts were clearly looking for an inferred intention rather than an imputed one.   The fault lines were opened up by the decision in the lower courts to impute an intention in the case of Jones –v- Kernott.   Rimer LJ's elegant analysis of the difficulties with imputation at paragraph [77] of his judgment suggests that practitioners should steer clear of imputation and should not pin their clients' hopes on the courts being persuaded to impose a decision that may be regarded as subjectively fair but which, as at the same time, unprincipled.  If the matter does return to the Supreme Court it is unlikely that "imputation" will be endorsed as to do so would be to create greater uncertainty in an area that is already uncertain enough.

Investment properties
56. The first major inroad into the principles set out in Stack came in Laskar –v- Laskar [2008] EWCA Civ 347.   The Court of Appeal, with Lord Neuberger presiding, held that the presumptions as to ownership of jointly owned property enunciated in Stack applied to a family property occupied by cohabitants but not to commercial property or property purchased as an investment.  Note that Laskar was not itself a case concerning cohabitants so that we do not know what would transpire if cohabiting couples purchased an investment property in joint names with unequal contributions to the purchase price.
57. The Court of Appeal held that it was not right to apply the Stack reasoning to a case where the primary purpose in purchasing a property was for investment or capital appreciation.  Even though the parties' relationship was familial (in this case mother and daughter).  Even if the Stack presumption had applied it would have been rebutted because the parties had kept their finances separate and the property had not been purchased primarily as a home for either party.   Thus, in the absence of any relevant discussion between the parties, their respective beneficial shares should reflect the size of their contributions.  In other words a resulting trust analysis applied in the absence of anything that could give rise to a constructive trust in different shares.   On the facts of this case, in any event, a division of two thirds to the mother (recognising her contribution by way of right to buy discount) and one third to the daughter was a fair one.

58. In fact, the problem had already arisen in August 2007 in the County Court case of Adekunle –v- Ritchie [2007] EW Misc 5 (EWCC).    In that case a mother and son had purchased a property in joint names but with no express declaration of trust as to ownership.   HHJ Behrens concluded that this case was also an unusual one within the parameters set out in Stack.   The mother had contributed 50% of the acquisition price by way of right to buy discount and thereafter mother and son had contributed equally to the mortgage etc until her death in 2003 with the son contributed solely thereafter.   HHJ Behrens concluded that the starting point for the son's share was 25% but that taking a holistic approach that share should be quantified, albeit with all the qualifications as to the subjectivity of the quantification, at 33%.  Lord Neuberger approved the decision in Adekunle in Laskar. In Amin –v- Amin [2009] EWHC 3356 (Ch) there was discussion of Laskar and Adekunle at paragraph 273 concluding that, in the circumstances of that case, the Stack approach should prevail.

Proprietary Estoppel
59. In Stack the House of Lords moved away from a further assimilation between proprietary estoppel and constructive trust whilst accepting that there was a significant overlap between the two concepts.    In many of the cases in which Stack has been considered (and highlighted above) the courts have felt constrained to consider remedies under both doctrines.  

60. In looking at post-Stack developments it is not satisfactory to take a strictly chronological overview of the cases.  This is because there have been two important House of Lords decisions dealing with proprietary estoppel, one of which considered the doctrine in a commercial context (Cobbe –v- Yeoman's Row Ltd [2008] 1 WLR 1752) and one that looked at the doctrine in a more "domestic" context (Thorner –v- Majors [2009] 2 FLR 405).  In grappling with the applicability of doctrines of proprietary estoppel, therefore, the practitioner should first look to these two cases and, of the two, should concentrate primarily on Thorner –v- Majors.

61. Cobbe caused some consternation when it was published (see for example "Proprietary Estoppel: an oasis without palm trees (or water?)" by John Wilson in Family Law Week on 11th February 2009).    It was an essentially commercial case concerned with negotiations in relation to certain properties, which negotiations were marked "subject to contract".   At the last minute, Yeoman's Row "moved the goalposts".  Mr Cobbe cried foul and at first instance and in the Court of Appeal, the courts found that there was a proprietary estoppel.     The House of Lords disagreed:  both parties were well-versed in commercial matters, everything was "subject to contract" and, ultimately, a gentlemen's agreement wasn't worth the paper it wasn't written on.   Etherton LJ (who had been the original first instance judge in the case), in a lecture to the Chancery Bar Association described the case as a "jurisprudential milestone in the development and application of the doctrine of proprietary estoppel".

62. Lords Scott and Walker cited with approval the dicta of Deane J in the Australian case of Muschinksi –v- Dodds (1985) 160 CLR 583.  Although Deane J was speaking of constructive trusts, their Lordships observed that his remarks were equally germane in the context of proprietary estoppel.  Deane J said:

"The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice.  As an equitable remedy it is available only when warranted by established equitable principles or the legitimate processes of legal reasoning, by analogy, induction and deduction, starting from the conceptual foundations of such principles... Under the law of this country – as I venture to think under the present law of England ... proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party "ought to win" ... and the `formless void' of individual moral opinion..."

63. It is not enough to show that a person has behaved unconscionably.  One must, in addition, provide a coherent formulation of the content of the estoppel or of the proprietary interest that the estoppels was designed to protect.   One must show that all three of the necessary ingredients to create a proprietary estoppel are present, namely:

(i) A representation or assurance by the owner of land to the claimant that the claimant has acquired or will acquire rights in respect of that property;
(ii) Detrimental reliance or change of position by the claimant in reliance thereon; and
(iii) Unconscionable conduct by the owner in denying the claimant's rights.

64. In relation to the first element the House of Lords emphasised that the representation needed to be referable to "a certain interest in land" (see by way of contrast, Lissimore –v- Dowling [2003] 2 FLR 208 where references to a woman being "the Lady of the Manor" did not qualify as a sufficiently precise representation)5.   The importance of the content of the representation is discussed further in a consideration of the post-Stack cases, some of which have been touched upon above.     All three elements must be present.   Equitable estoppel is "not a sort of joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side" (per Lord Walker at paragraph [46]).

65. Lord Walker was assisted with the taxonomy of proprietary estoppel adopted by Gray & Gray in Elements of Land Law at paragraph 10.189.  The authors identified three overlapping categories, namely (1) the "imperfect gift" cases, (2) the "common expectation" cases and (3) the "unilateral mistake" cases.  Most cohabitation claims will fall into the second category.  But, per Lord Walker, expectations must be more than hopes.   There is often a distinction between the commercial scenario, where the parties all have the benefit of specialist lawyers, and the domestic situation where no one turns to legal advice until hopes or expectations are dashed.   A business man is usually hoping, with the benefit of legal advice, to secure a contract.  In the domestic setting the claimant is usually expecting to get an interest in immovable property often for long-term occupation as a home. "The focus is not on intangible legal rights but on the tangible property which he or she expects to get.  The typical domestic claimant does not stop to reflect (until disappointed expectations lead to litigation) whether some further legal transaction (such as a grant by deed or the making of a will or codicil) is necessary to complete the promised title" (per Lord Walker at paragraph [68]).

66. An interesting aspect of the case was Lord Scott's obiter treatment of s.2 of the Law of Property (Miscellaneous Provisions) Act 1989.   This Act, like s.53 of the Law of Property Act 1925 requires interests in land to be evidenced by writing although it excepts interest created under resulting, implied and constructive trusts.  Neither statute makes reference to proprietary estoppel although it was always assumed that the exemption also applied to such interests (see e.g.  Yaxley –v- Gotts [1999] 2 FLR 941).  At paragraph [29] Lord Scott concluded, obiter, that proprietary estoppel could not be prayed in aid in order to render enforceable an agreement that statute had declared to be void.  Practitioners should therefore consider, when faced with a claim for rights based on a proprietary estoppel but not backed up with any written evidence, the dicta of Lord Scott.  Lord Walker, something of an expert on proprietary estoppel who gave the leading judgment in Yaxley –v- Gotts, did not think it necessary or appropriate to consider this issue.   When considering this issue the practitioner should also consider the following cases:

(i) Kinane –v- Mackie-Conteh [2005] EWCA Civ 45;
(ii) Herbert –v- Doyle [2008] EWHC 1950 (Ch);
(iii) Hutchison & Others –v- B & DF Limited [2008] EWHC 2286 (Ch);
(iv) Brightlingsea Haven Ltd & Another –v- Morris & Others [2008] EWHC 1928 (QB)
(v) The observations of Lord Neuberger at paragraph [99] of Thorner v Majors (discussed below) in which he highlighted the importance, in Cobbe, of the contractual backdrop to the dispute.

67. In his address to the Chancery Bar Association Etherton LJ said, in closing:

"This is not an area of law in which the courts have yet managed to weave together the various strands in a coherent manner.  Perhaps most curious of all, in policy terms, is that the House of Lords has relaxed the requirements for a constructive trust in the form of the CICT ("common intention constructive trust"), by the decision in Stack, while at the same time restricting, perhaps severely, the doctrine of proprietary estoppels.  From a conventional equity perspective, this is counter-intuitive.  It might be said that they have shot the wrong beast.  Proprietary estoppel, with its traditional requirements of a clear representation and detriment or change of position and the remedy restricted to the minimum to do justice, has usually been considered a more reliable and certain instrument for remedying unconscionable conduct than the rather fluid concept of the constructive trust.  The attractiveness of proprietary estoppel is not undermined, but rather enhanced, by the wide discretion of the Court as to the choice of appropriate remedy (proprietary or personal) which makes it a particularly appropriate and sensitive tool for achieving justice."

68. It is fair to say that Lord Walker, in Thorner –v- Majors (below) deprecated the above "apocalyptic" remarks at paragraph [31] of his speech.   However, he did make it clear at paragraph [67] of his speech that he had some difficulty with Lord Scott's views in Cobbe that proprietary estoppel is a sub-species of promissory estoppel.  However, he did not feel it appropriate to develop this point.

69. Thorner –v- Majors [2009] UKHL 18 was a farming / wills case.  It involved the not uncommon scenario of a man working for no pay on a farm in the expectation, fostered by the deceased, that the farm would be left to him.   It was a case where the deceased was a man of few words and elliptical comments.   The trial judge found that the deceased's words and actions, although indirect, were based on an unspoken mutual understanding and had been reasonably understood to amount to an assurance that the claimant would inherit the farm and that a proprietary estoppel had been established.   The Court of Appeal, whilst accepting the judge's findings of fact and the inferences that he drew from them, allowed the estate's appeal on the basis that the judge had not found that the deceased's assurance had been intended to be relied upon, or in other words had been intended as a promise.  The House of Lords allowed the claimant's appeal. 

70. In order to establish a proprietary estoppel the relevant assurance must be "clear enough".  What amounted to sufficient clarity was hugely dependent on context: the effect of words or actions must be assessed in their context.  Unlike the interpretation of a written contract, which was a matter of law, the interpretation of an oral contract was a matter of fact (possibly inference from primary fact) rather than one of law, on which the parties' subjective understanding of what they were agreeing was admissible.  It would be quite wrong to be unrealistically rigorous when applying the "clear and unambiguous" test; at least normally, it was 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.

71. In the unusual circumstances of the case, involving taciturn and undemonstrative men, the judge had been entitled to find that the deceased's assurances had constituted sufficiently clear representations to establish proprietary estoppel.   If the deceased's statements were reasonably understood by the claimant as an assurance that the claimant would inherit the farm, and the claimant reasonably acted on that understanding, to his detriment, then the deceased's intentions in making those statements were not germane.  The judge's factual finding that it was reasonable for the claimant to have relied on the deceased's representations carried with it an implicit finding that it was reasonable for the claimant to take the representation as intended by the deceased to be relied upon.  It might be that there could be exceptional cases in which, even though a person reasonably relied on a statement, it would be wrong to conclude that the statement-maker was estopped, because he could not reasonably have expected that the person so to rely, but such cases would be rare and this was not one of them.

72. Whilst it was necessary that the assurance given to the claimant should relate to identified property owned (or perhaps about to be owned) by the representor, there was no real uncertainty in this case as to the property referred to.  Both the deceased and the claimant had been aware that the extent of the farm was liable to fluctuate, and there was no reason to doubt that their common understanding had been that the assurance related to whatever the farm consisted of at the deceased's death, as would have been the case had the deceased made a specific devise of the farm in a will, barring any restrictive language.  This situation was quite different from an assurance of general "financial security".  It would represent a regrettable and substantial emasculation of the beneficial principle of proprietary estoppel if the principle was artificially fettered so as to require the precise extent of the relevant property to be strictly defined in every case.

73. It should be noted that Lord Scott felt that the case was better considered in the context of a remedial constructive trust by reason of the inherently conditional position of a representation as to inheritance prospects which lay in the future, although he was alone in that view.   In his speech, Lord Scott cited with apparent approval the decision of Edward Nugee QC in Re Basham (deceased) [1986] 1 WLR 1498 although in other recent cases Re Basham has been doubted.   Lord Walker preferred not to express a view on whether Re Basham had been correctly decided.

74. Negus –v-Bahouse [2007] EWHC 2628 (Ch)  (external link) was an appeal in a 1975 Act case.  The claimant had been the deceased's cohabitee.   The deceased committed suicide and did not provide for her in his will.  She claimed a beneficial interest in the property they shared as well as claim under the 1975 Act.   The deceased persuaded her to give up her job and move in with him saying that she would have a roof over her head if she did so.   Her claim for an equitable interest failed.   She had not established that the statements made by the man amounted to a grant of a beneficial interest in the property.  Remarks that if anything were to happen to the man she would have a roof over her head were insufficient to enable the court to spell out a specific agreement, arrangement or understanding as regarded either a development property or the property that they had occupied as their home.   Her claim under the 1975 Act, however, was successful.

75. In Powell –v- Benney [2007] EWCA Civ 1283 the claimants sought ownership of two properties owned by the deceased relying on proprietary estoppel and constructive trust.     The claimants had befriended the deceased in 1992 and looked after him, performing numerous tasks for him to assist him in managing his day to day affairs such as purchasing food for him and cooking for him and helping him with medical attention when he was ill.  In 1993 he told them he was going to leave his properties to them and he reiterated this in 1994 to them and to others.    He also let them use his properties for giving music lessons and conducting Bible studies.  In 2000 he wrote on a piece of his paper his intention to leave the properties to the claimants.  This piece of writing was not found until after his death.  At Christmas 2000 the deceased went to live with the claimants for four months after the pipes froze and burst in his home.   He died in July 2003.

76. The claimants' claim largely failed.   The learned judge concluded that detriment was an essential ingredient of proprietary estoppel and that there was very little by way of detriment suffered (see paragraphs [12] to [14] of the decision in the Court of Appeal).   The limited detriment found by the judge could be compensated by the payment of £20,000.   The Court of Appeal upheld the trial judge's decision.  The claimants' expectations were out of all proportion to the detriment which they suffered so that the judge could properly recognise that their equity should be satisfied in another and more limited way.

77. In Q –v- Q [2008] EWHC  1874 Fam  already referred to above Black J (as she then was) found that the husband and wife's case that they were beneficially entitled to the property in which they had lived and which they had spent considerable sums on refurbishing could be made out using either the route of constructive trust or proprietary estoppel and, so far as the latter remedy was concerned, the minimum equity to satisfy their claim was the transfer either to the husband or to the husband and wife of the entirety of the beneficial interest in the property.   She handed down her judgment on the same day that Cobbe was decided and so, unsurprisingly, there is no reference to that decision in her judgment.

78. Gill –v- Woodall & RSPCA [2009] EWHC B34 (Ch) was a much reported case in which a daughter challenged her mother's will in which she left the entirety of her farm to the RSPCA.   It was decided after both Cobbe and Thorner.  She claimed that there was a want of knowledge and approval on the part of her mother when she executed the will and that she was acting under coercion or pressure when she did so.  Her alternative claim was in proprietary estoppel based upon an assertion that she expected to inherit the farming business which expectation was encouraged by her parents and that she acted to her detriment (see paragraphs [522] and [523] of the judgment as well as paragraph [537]) in reliance on that encouraged expectation.   In a lengthy judgment running to 84 pages and 553 paragraphs James Allen QC, sitting as a Deputy High Court Judge, agreed that the will should be set aside and dealt with the claim in proprietary estoppel at paragraph 501 onwards.   He began by preferring the well-known formulation of the principles of proprietary estoppel by Oliver J in Taylors Fashions Ltd –v- Liverpool Victoria Trustees Company Ltd [1982] QB 133 to that of Edward Nugee QC in Re Basham [1986] 1 WLR 1498.   

79. He summarised the conclusions of the House of Lords in Thorner –v- Majors at paragraphs [513] onwards.  He found himself satisfied that the claimant relied upon the assurances made to her, both express and implied and direct and indirect and that she had suffered substantial detriment.  As to satisfying her equity, the learned judge felt that it should be satisfied by giving her the farm (see paragraphs [546] onwards):

"The Court must consider the nature and extent of the relief to be granted to the Claimant.  The expectation created and encouraged by Mr and Mrs Gill, in particular Mrs Gill, was that the Claimant would inherit the whole farm which the Court is satisfied included the farming business carried on therefrom and its assets.  The expectation was clear, certain and not extravagant given that the Claimant was the only child of Mr and Mrs Gill, that there were no other persons with a claim to their bounty, the Claimant's relationship with both of her parents, but in particular Mrs Gill, which was loving, caring and close, that all three of them were fully aware of the tradition in Yorkshire Farming families of the Farm and the farming business being passed on to the next generation and that the Farm and the farming business carried on therefrom were the only assets of Mr and Mrs Gill available to be disposed of by their wills."

80. He further concluded that this expectation was not out of proportion to the detriment suffered by the claimant.

81. Two other cases where the court has recently considered and quantified the minimum equity to satisfy an estoppel are Henry –v- Henry [2010] UKPC 3 and Porntip Stallion –v- Albert Stallion Holdings (Great Britain) Limited and Lilibeth Stallion [2010] 2 FLR 78.

82. In MacDonald & Brannigan –v- Frost [2009] EWHC 2276 (Ch) the claimants were the daughters of the deceased and claimed an equitable interest in their late father's estate. They relied upon a clear and unequivocal promise or assurance by their parents that they would organise their affairs so that "whatever happened, the estate of the survivor of them" would pass to their daughters in equal shares.  They said that in reliance on this assurance, first made in 1986 and repeated on numerous occasions they agreed to make payments of £100 per month to their parents as a contribution towards their living expenses.   Unfortunately, the claimants' mother died and their father remarried and left his estate to his new wife and, in the event of his new wife predeceasing him, left his estate to his grandchildren and step-grandchildren, thereby disinheriting his daughters.    In her judgment, Geraldine Andrews QC considered Cobbe and Thorner and concluded that Thorner was to be taken as the leading modern authority.    She emphasised the need to consider proprietary estoppel and constructive trusts as two separate doctrines and also cast doubt on the decision in Re Basham.

83. The claimants claim failed.  Whilst the deceased had made the representations and the daughters had acted in reliance upon them, he made no clear assurances after he remarried in 1999.   The payments that the daughters made were not fostered by any specific promises made to them.  By the time he remarried and certainly by the time he died regardless of what may have been said in the past, his circumstances had changed to such an extent that it was not unconscionable for him to leave his house to his wife, who was also his principal carer.

84. In Lester & Hardy –v- Woodgate & Woodgate [2010] EWCA Civ 199 the Court of Appeal had to consider a neighbour dispute arising out of the use of a few yards of pedestrian access.  The case centred on the destruction of a ramp and the use of the disputed land by the defendants for parking.  This limited pedestrian access to the claimants.   The claimants sought a mandatory injunction for the reinstatement of the ramp and to prevent further parking.  The defendants, in their defence, relied on the fact that destruction of the ramp and the extension of the parking area had taken place when the claimants' predecessors owned the property and the predecessors had acquiesced in the works.  Thus the defence was based on proprietary estoppel and the doctrine of laches.   The trial judge held that the claimants were estopped by their predecessors' acquiescence.   The claimants appealed.  

85. This case is useful to practitioners as it contains an examination of the doctrine of laches and of the distinction between defences based on laches and those based on equitable estoppel.   Patten LJ referred to the recent House of Lords decision of Fisher –v- Brooker [2009] UKHL 41 in which their Lordships endorsed the judgment of Sir Barnes Peacock in Lindsay Petroleum Company –v- Hurd (1874) KR 5 PC 221 at page 239 where he said:

"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine.  Where it would be practically unjust to give a remedy, either because a party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material.  But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable.  Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy."

86. At paragraph 25 Patten LJ considered equitable estoppel generally.   Estoppels are generally defensive.   By contrast, in cases of proprietary estoppel, the equity can be satisfied, where appropriate, by the grant of permanent property rights over the estate of the person bound by the estoppel which therefore binds his successors in title and are capable by their very nature of being enjoyed by the successors in title of the promise.

87. Whilst the defence in laches may be more limited that a defence based on estoppel by acquiescence or proprietary estoppel, the Court of Appeal held that the trial judge was entitled to find that the defendants had made out their defence and the appeal was accordingly dismissed.  The trial judge had allowed the claimants common law damages in the sum of £10 for actionable nuisance.   The Court of Appeal allowed the cross-appeal in respect of these damages.  Since the defendants' defence had been based on both equitable estoppel and laches the effect of the estoppel was to bar not merely the grant of an equitable remedy but also the enforcement of the legal right itself so that the continued use of the car parking space could not constitute an actionable nuisance and no action for damages could lie.

88. In Ashby –v- Killduff [2010] EWHC 2034 (Ch) there was an interesting illustration of the use of proprietary estoppel to provide a remedy.   Mr Ashby had been a married MP whose homosexual relationship with Dr Killduff was uncovered by the Sunday Times.  He lost a highly publicised three week libel action.  In order to protect himself against liability for costs and damages he sold his flat to Dr Killduff – the two had bought adjoining flats so as to give the semblance of being neighbours rather than lovers.   Mr Ashby then rented his own flat for the equivalent of the mortgage payments on Dr Killduff's mortgage, Dr Killduff having purchased it for a slight undervalue using the £28,000 odd he had received in libel damages and costs and a £60,000 mortgage.  Mr Ashby, after his divorce used his share of the net proceeds of sale to purchase four off-plan flats in Manchester, three in his name and one in joint names with Dr Killduff.  When Dr Killduff ended their relationship Mr Ashby's claims that the sale of his flat followed by the rental by him of it through an assured shorthold tenancy agreement were sham transactions.  Those claims failed.   However, Mr Ashby also laid claim to an interest in the flat on the basis of renovation works that he had carried out on it.  The trial judge refused to take into account historic expenditure by Mr Ashby on the flat.  

89. However, he took a different approach to the sum of £10,000 spent by Mr Ashby on lighting and flooring in March 2005, only six months or so before the parties separated.  Dr Killduff was already unhappy with the relationship and had been thinking of ending it since 2003.  The probability was that, at the time when this expenditure was incurred, Dr Killduff knew that he was going to bring the relationship to an end and was waiting for the right time to do so.  While waiting, he not merely did not take any steps to deter Mr Ashby from making the expenditure on improvements but participated in the choices of products which were made.   The learned Judge was quite satisfied that Mr Ashby believed the relationship between the two of them (and his continued occupation of the flat) to be secure at this time and, had he known what the real state of the relationship was, he would not have expended the money on improvements and Dr Killduff would have known this:

"[70] In these circumstances, it seems to me that it would be unconscionable for the court not to intervene, if it has the power and it is just to do so ...

[72] I do ... find it possible to accept that there was an implied representation by Dr Killduff that he continued occupation of the property by Mr Ashby was assured and the expenditure on the improvements would result in an improvement of living arrangements from which Mr Ashby would continue to benefit.  It is clear that the expenditure of £10,000 on improvements constituted a detriment to Mr Ashby and it would be unconscionable for Dr Killduff to retain the benefit...

[73] In these circumstances it seems to me that the court has a discretion to determine how the equity can best be satisfied in order to avoid the unconscionable result which would otherwise prevail.  It seems that the claim is to be satisfied by the minimum award necessary to do justice (Crabb –v- Arun District Council [1976] Ch 179, 198)."

90. The Judge did not accept an argument that Mr Ashby should be entitled to remain in the flat for life but rather that he should either have a monetary award or the right to remain there for a defined period of time.   He deferred a final decision pending further submissions.

Equitable Accounting
91. In Stack Baroness Hale stated that equitable accounting claims were now governed by the Trusts of Land and Appointment of Trustees Act 1996 ("TLATA") and in particular, sections 13 and 14.    That broad view has been challenged in two cases in particular: in French –v- Barcham [2008] EWHC 1505 (Ch) it was held that when the claimant was the trustee in bankruptcy who neither had a right to occupy or a desire to occupy then one had to fall back on traditional equitable principles governing equitable accounting, although the result was unlikely to be different.   More recently, in Amin –v- Amin & others [2009] EWHC 3356 (Ch) Warren J at paragraphs [283] to [304] of his judgment considered Baroness Hale's analysis as to the applicability of TLATA in cases involving equitable accounting.  He considered s.13(6) of TLATA which states that where an entitlement of a beneficiary to occupy has been excluded or restricted, the conditions which may be imposed on a beneficiary occupying the land include payment of compensation to the beneficiary who has been excluded.  However, "excluded or restricted" in s.13(6) must be read, he said, as meaning excluded or restricted under s.13(1).  He held that the court could only make an order for the payment of compensation under the section if (and only if) the claimant could establish that his right to occupy had been excluded or restricted by the trustees.  In fact the claimant had left the relevant property voluntarily.  At paragraph 289:

"It will be a matter of fact and degree in any particular case whether there has been an exclusion in the statutory sense.  However, whatever does or does not amount to exclusion, the exclusion must be by the trustees.  S.13 gives the trustees as a body the power to exclude a beneficiary.  If one or two or more trustees physically excludes a beneficiary, that exclusion is not effected pursuant to the power conferred by s.13; it does not therefore, in my judgment fall within s.13(6) so as to enable the trustees to impose conditions as to the payment of compensation and does not therefore engage the court's powers under s.14(2)(a)."

92. In other words the assessment of the claim for an equitable account will not be governed by TLATA but by traditional equitable principles in such circumstances.  Again, the result is unlikely to be very different.  Amin is an important (and very lengthy) decision but it does repay reading when the practitioner has a case where the extended family has been involved in acquiring numerous properties and working in various businesses with one another.  The case raises many more issues than those limited to equitable estoppels but it is not possible to set the facts out in any great detail.  For more information see Equitable Accounting: A further qualification to Stack v Dowden by John Wilson in Family Law Week on 28th March 2010.

93. Other important cases involving equitable accounting are Murphy –v- Gooch [2007] 2 FLR 934, Young –v- Lauretani [2007] 2 FLR 1211 and Wilcox –v- Tait [2007] 2 FLR 871. 

Undue Influence
94. Goodman –v- Gallant [1986] 1 FLR 513 made it clear that where there is an express declaration as to the beneficial interests in a property (and the TR1 is an express declaration of trust) then that will normally be conclusive of those interests in the absence of fraud, duress or common mistake.   Unfortunately, practitioners sometimes overlook the need to consider whether or not an express declaration of trust / TR1 has been obtained by, in particular, undue influence.  A consideration of whether or not there has been undue influence should be part of every conscientious practitioner's check-list.  The leading authority remains Royal Bank of Scotland –v-Etridge (No 2) [2001] 2 FLR 1364 ("Etridge").  There have been three recent cases of interest in this area. 

95. In Wallbank & Wallbank –v- Price [2008] 2 FLR 501 Lewison J rejected a claim by a wife that she had signed a document stating that she revoked any rights to the disposal of the matrimonial home, on the basis that her two daughters should receive her half share, had been procured by undue influence.  He found that there had been no evidence of wholesale physical abuse or of overt acts amounting to coercion and the relationship had not been one of dominance and subordination.  The transaction by which she severed the joint tenancy in equity and conferred relatively modest financial benefits on the two daughters was not one that called for an explanation, being reasonably accounted for on the ground of ordinary motives.

96. In Hewett –v- First Plus Financial Group Plc [2010] EWCA Civ 312 (external link) the jointly owned matrimonial home was occupied by the husband, the wife and the children of the family together with the wife's mother.  The husband persuaded the wife to join with him in a re-mortgage of the property to provide security for his credit card debts, promising, on their children's lives, to pay the increased mortgage instalments.  The consent of the wife's mother was also required but the husband forged this.   Unbeknown to the wife when she signed the charge, the husband was having an affair with another woman, which was to lead in due course to his separation and divorce from the wife.  Following the husband's bankruptcy, the wife acquired his beneficial interest for £1, but was unable to keep up the mortgage repayments.  The mortgagee sought possession.  The judge concluded that the mortgagee, having failed to comply with the relevant (Etridge) guidelines, had constructive notice of any undue influence or misrepresentation by the husband;  but that no such undue influence or misrepresentation had been established, as the wife had exercised her own free will in financial decision-making and had signed the charge to rescue the family from a tight financial situation.   The wife appealed on the question whether the husband's failure to disclose the fact of his affair amounted to an abuse by the husband of the trust and confidence reposed in him by the wife.

97. Her appeal was allowed.   The Court of Appeal decided that a finding of undue influence did not depend, as a necessary pre-requisite, upon a conclusion that the victim had made no decision of her own, or that her will and intention had been completely overborne.  A conscious exercise of will could be vitiated by undue influence.   Further, it would be wrong to confine a husband's obligation of candour and fairness when proposing a risky transaction to his wife to cases in which the wife meekly followed her husband's directions without question.   The purpose of an obligation of candour was that the wife should be able to make an informed decision (with or without the benefit of independent advice) properly and fairly appraised of the relevant circumstances.

98. Briggs J, giving the judgment of the Court, held that it had never been part of the proof of undue influence that, but for the relevant abuse of trust, the impugned transaction would not have been entered into; the right to set aside the transaction arose because of the equitable wrong constituted by the abuse of confidence was part of the process by which the victim's consent to the transaction had been obtained.    The question whether the husband's affair was a material fact calling for disclosure was not to be decided by asking the hypothetical question whether disclosure would have led the wife to a different decision, but by an objective test: best addressed by asking whether a solicitor consulted by the wife about the charge would have thought it relevant to know that the husband was, while asking for her unqualified trust, at the same time conducting a clandestine affair.  

99. The wife had reposed a sufficient degree of trust and confidence in the husband to give rise to an obligation of candour and fairness.  The husband's affair had plainly been a material fact, calling for disclosure; by deliberately concealing the affair while seeking to persuade the wife to agree to re-mortgage the matrimonial home, the husband had breached his duty of fairness and candour, exercising undue influence sufficient to vitiate the re-mortgage transaction as between them.  In deciding how to deal with his indebtedness the wife had needed to balance the reliability of the husband's promise to support the family by making sure that the increased mortgage instalments were duly paid, against the risk that a failure on his part would lead to the loss, not merely of his, but also of her, beneficial interest in the property.   Her decision had been based on her assumption that he was as committed as she was to the marriage, to the family and to the preservation of their home life in the future.

100. In coming to their decision the Court of Appeal were much influenced by the words of Lord Eldon in Huguenin –v- Baseley (1807) 13 Ves Jun 273

"Take it that she (the plaintiff) intended to give it to him (the defendant): it is by no means out of the reach of the principle.  The question is, not, whether she knew, what she was doing, had done, or proposed to do, but how the intention was produced."

These words had been relied upon by Ward LJ in Daniel –v- Drew [2005] EWCA Civ 507 (external link) a case heavily relied upon at first instance here.   The Court of Appeal also drew on Lord Nicholls comments at paragraphs [35] and [36] of Etridge:

"[35] Inaccurate explanations of a proposed transaction are a different matter.  So are cases where a husband, in whom a wife has reposed trust and confidence for the management of their financial affairs, prefers his interests to hers and makes a choice for both of them on that footing.  Such a husband abuses the influence he has. He fails to discharge the obligation of candour and fairness he owes a wife who is looking to him to make the major financial decisions.

[36] At the same time, the high degree of trust and confidence and emotional interdependence which normally characterises a marriage relationship provides scope for abuse.  One party may take advantage of the other's vulnerability.  Unhappily, such abuse does occur.  Further, it is all too easy for a husband, anxious or even desperate for bank finance, to misstate the position in some particular or to mislead the wife."

101. It needs to be borne in mind that in this case the bank had to accept that it had constructive notice of the husband's wrong-doing – it knew that the re-mortgage was designed to secure payment of the debts owed by the husband rather than the husband and wife jointly.  The trial judge concluded that the bank did nothing thereafter which came anywhere near compliance with the Etridge guidelines (see paragraph [15] of the judgment). That is unlikely to be the situation case in most cases.

102. A more interesting case is that of Smith –v- Cooper [2010] EWCA Civ 722.  Ms Cooper was, by reason of her mental capacity, incapable of conducting proceedings and was represented by the Official  Solicitor.  In 2001 she had purchased a bungalow, Fifty Farm, in her sole name for £84,400 using most of the proceeds of her divorce settlement.  Mr Smith had emerged from his divorce with about £100,000.  A relationship developed and Mr Smith moved into Fifty Farm.  In about July 2004 Ms Cooper transferred Fifty Farm into joint names so that they held it as beneficial joint tenants.  At the same time they bought a small piece of adjacent land which cost £9,000 provided by Mr Smith.  This too they held as beneficial joint tenants.

103. In January 2006 they bought Rose Cottage and this was also placed in their joint names as beneficial joint tenants.  The bulk of the price had been provided by a remortgage of Fifty Farm.   A great deal of work had to be done to Rose Cottage before it was fit for occupation.  They eventually moved into the property in September 2006 but separated in November 2006 when Mr Smith moved out.  Ms Cooper sought to set aside the gift of half of Fifty Farm and also the declaration of a joint tenancy in relation to Rose Cottage on the grounds of Mr Smith's undue influence.

104. The Judge held that the presumption of undue influence applied but held that it had been adequately rebutted by Mr Smith.  Ms Cooper had argued that Mr Smith had a position of ascendancy over her and that the transactions were not readily explicable by the relationship between the parties.  She had given him half of Fifty Farm which was her major asset at the time of the gift in 2004.  As against that Mr Smith had put £9,000 plus costs of £750 into buying the adjoining land and subsequently paid the mortgage in respect of the acquisition of Rose Cottage.  The trial judge found that there was a presumption of undue influence on the basis that Mr Smith had acquired a position of influence over Ms Cooper and the transaction called for an explanation.  However, he concluded that there was a benefit to Ms Cooper and that it was not manifestly to her disadvantage.  She received Mr Smith's commitment to buy the adjoining land, to join in the mortgage application and to provide the balance of the purchase cost of Rose Cottage from his own resources.  He also relied on the fact that Ms Cooper had legal advice, which he termed "independent" from the solicitor who was retained on behalf of both parties in relation to these transactions.  The Court of Appeal did not regard this as independent legal advice.

105. The Court of Appeal held that the trial judge was correct in concluding that there was presumed undue influence but that he did not appreciate "the full force" of that finding:

"[65] He approached the case on the basis that it would be sufficient for Mr Smith to show that there was a reasonable explanation for the transaction or that it was not manifestly to Miss Cooper's disadvantage.  The phrase "manifest disadvantage" was used in National Westminster Bank –v- Morgan [1985] AC 686 in relation to the anterior question, whether the presumption applies or not.  It was explained in Etridge as being equivalent to, though less satisfactory than, the Allcard –v- Skinner (1887) 36 Ch D 145 formula.  It is not relevant to the second stage of rebutting the presumption.  Indeed, it is not sufficient for that purpose to show that there was no disadvantage to the party in the position of the present defendant: see Etridge at paragraph 12 ...

[66] It seems to me that the judge asked himself the wrong question at this stage of the analysis.  He did not consider whether Mr Smith had discharged the burden of proving that Miss Cooper entered into the transaction of her own free will, independently of, and not in any way as a result of, the influence that Mr Smith was in a position to exercise over her.  If he had posed that question, an answer favourable to Mr Smith could not have been found by reference to the advice given (by the parties' solicitor), as I have already explained...

[70] ... the burden is on Mr Smith, once the presumption is established, of demonstrating that she made her decisions not only understanding their effect but as a matter of her own free unconstrained will, not subject to the effect of his influence or her dependence upon him.  That is not something which, as it seems to me, Mr Smith began to demonstrate."

106. The Court of Appeal found that the transfer of Fifty Farm into joint names had been procured by undue influence so that this transaction was voidable and ought to be set aside.    That undue influence also flowed into the acquisition of Rose Cottage.   What is particularly interesting about this case is the Court's consideration of the effects of setting aside the transactions for undue influence.  Counsel for Miss Cooper drew the Court's attention to the decision in Cheese –v- Thomas [1994] 1 WLR 129.  In that case, the Court of Appeal had held that in setting aside a transaction under which both parties had made a financial contribution to the acquisition of an asset from which both were intended to benefit, the court was concerned to achieve practical justice for both parties.   If the transaction was to be set aside the claimant has to return what he / she received as well as the defendant giving back what he / she received.  "There has to be a giving back and taking back on both sides."

107. In other words, on setting aside the transaction for undue influence the Court has to give consideration to achieving practical justice by way of restitution.  The decisions in Smith –v- Cooper and in Cheese –v- Thomas are commended to practitioners dealing with these problems.

Creditors and the family home
108. In Close Invoice Finance Ltd –v- Pile [2009] 1 FLR 873 H and W jointly owned the matrimonial home worth about £390,000 with a mortgage of about £113,000.  The property was occupied not only by H and W but also by a mother aged 76, one adult child and one child aged 17, attending technical college full-time.   There was a judgment creditor of the husband and wife jointly for about £319,000.  The judgment creditor obtained a charging order in respect of the home.  If the judgment debt had been against only one of the co-owners, the creditor would have had to seek an order for sale of the co-owner's share under TLATA and the court would have been required, under s.15 of that Act to take into account a number of wide-ranging factors, including the interests of all those living in the property.  However, because the co-owners both owed the same debt and had the same judgment against them, the creditor applied to enforce the charging order under CPR r.73.10 and alternatively under s.14 of TLATA.  The creditor argued that under r.73.10 the court did not need to take into account the welfare or needs of those in occupation.  By the hearing date the amount still owed was about £150,000.  H was unemployed; W was undergoing treatment for breast cancer and was suffering from stress and depression.   H and W initially resisted an order for sale on any terms; during the hearing they accepted that there would have to be an order for sale but sought to persuade the court that possession should be postponed for just over a year.

109. HHJ Purle QC granted an order for possession but suspended it for just over a year.  The creditor was entitled to apply under r.73.10 of the CPR irrespective of TLATA.  Nonetheless, the creditor could, if necessary, rely on s.14 of TLATA because under s.14 any person with an interest in property subject to a trust could make an application to the court and the creditor, as an equitable charge, had an interest in the property which was held on trust for H and W.  In the exercise of the court's discretion under r.73.10 the court had to take into account the provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 and must apply the discretion compatibly with the European Convention rights to respect for private and family life and home and the enjoyment of possessions.  The power to enforce a charging order was compatible with the European Convention, but the court must apply its discretion in a way that gave due respect to the right of all those living in the property – not just the debtors – to respect for their family life and their home, such respect to be weighed against the rights of the creditor not to have to wait indefinitely for payment or to have no means of enforcing its security.  Therefore the same considerations effectively had to be taken into account under r.73.10 as under TLATA.  It would be somewhat capricious, even senseless, if the interests of the elderly mother and children would have to be taken into account if either the husband or wife owed a debt, but in this case would not have to be taken into account as they both owed the debt.  Taking all the factors in account there should be a postponement of possession for over a year.

110. In Re Haghighat (A Bankrupt) [2009] 1 FLR 1271 the only asset in the husband's bankruptcy was the matrimonial home, worth about £375,000 but subject to a charging order for £242,000 in favour of judgment creditors.  The creditors were owed in addition about £53,000 and the Legal Services Commission was owed £70,000 and there were bankruptcy costs of about £206,000.  About four years after the bankruptcy order was made the trustee in bankruptcy sought a possession order against the husband, the wife and the three adult children, the eldest of whom was a seriously disabled vulnerable adult.  He had congenital quadriplegic cerebral palsy with learning disability and epilepsy, was doubly incontinent, with no speech and little comprehension, used a wheelchair and had to be carried between his bed and his chair, and the shower.  He required continuous care.  H and W applied under s.33 of the Family Law Act 1996 asking the court to refuse an order for possession on the basis that the circumstances of the case were exceptional within s.336(5) of the Insolvency Act 1986 (applicable to W) and s.337(6) (applicable to H).  The trustee argued that the possession should be made, and deferred only for a period of 3 to 6 months, as the local authority would be obliged to house the family once it was homeless, although there was evidence that this would involve considerable disruption to the family in the short term.  It was accepted by all parties that if the property were sold there would still be a substantial shortfall in the bankruptcy.   The property itself was an ongoing liability for the trustee until sold, consuming about £350 p.a. in ground rent.  There was no evidence of any conduct by W contributing to H's bankruptcy; W had no capital or income of her own and was living on benefits.

111. An order for possession, deferred for three years, was made, or, if sooner, 3 months after the disabled child ceased ceased to reside permanently at the property.  These were exceptional circumstances within ss.336(5) and 337(6) being outside the usual "melancholy consequences of debt and improvidence".  The vulnerable adult's particular needs, and by extension W's needs, arose from the vulnerable adult's unusual medical condition, and  pointed to the vulnerable adult  and his carer, the wife, being allowed to stay in the property as long as the wife wished to care for him at home.  Having established exceptional circumstances, the court was to decide for itself under s.336(4) the weight to be attached to the various considerations, with a view to making an order that was just and reasonable having regard to those considerations, no one consideration being preponderant.  The ordered postponement would allow the local authority to make provision for the eldest child and the wife to be rehoused in suitable accommodation and for an orderly change to be effected in the care arrangements for the child.

112. In National Westminster Bank Plc –v- Rushmer [2010] 2 FLR 362 the matrimonial home was occupied by the husband and wife and their two children.  It was owned jointly by the husband and wife.  Having obtained judgment against the husband for just under £1 million with interest at 8%, the bank obtained a final charging order over his interest in the matrimonial home, plus another final charging order over his interest in a jointly owned investment property.  Almost a year later the bank applied for a forced sale of the matrimonial home under s.14 of TLATA.  If both properties were sold, the wife's half share in the proceeds was expected to be about £600,000.  When contemplating a forced sale under s.14, the court had to consider, under s.15, inter alia: the intentions of the persons who had created the trust; the purposes for which the property was being held; the welfare of any minor occupying the property as his home; and the interests of any secured creditor.  An order was made for a forced sale, on the basis that the wife would be able to acquire an adequate home in the same locality with the money she would receive on the sale of both properties, and that the interests of the two children, then aged 7 and 11, in remaining in the property did not outweigh the injustice to the bank if it were to be kept indefinitely out of its money until the youngest child grew up.  However, the order was suspended for two years to allow the husband to pursue certain legal claims on condition that the wife made monthly payments to the bank of 8% of the value of the husband's half share in the matrimonial home.  The husband failed to prosecute his legal actions (and was eventually made bankrupt) and the wife failed to keep up the 8% payments.  She applied to vary the original order relying on the fall in the property market.  The bank cross-applied for possession.  The bank succeeded.  On appeal Arnold J refused a further suspension of the order for sale.

113. He rejected the wife's arguments based on Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 ("the European Convention").  The Court's discretion under s.15 of TLATA had to be exercised compatibly with the rights under the European Convention of those affected by an order for enforcement.  However, it would ordinarily be sufficient for this purpose for the court to give due consideration to the factors specified in s.15.  This would ordinarily enable the court to balance the creditors' rights, including rights under Article 1 of the First Protocol, with the Article 8 rights of those affected by an order for sale.  Whilst there might be cases in which the court would be obliged to consider explicitly whether an order was proportionate interference with the Article 8 rights of those affected, this would not always be necessary and had not been necessary in the present case.

114. In Staden –v- Jones [2008] EWCA Civ 936 following the father's divorce from the mother, he entered into a written agreement that provided for the mother to convey her half-share in the former matrimonial home to the father on the basis of his undertaking that the mother's interest would "devolve" to the couple's daughter when the property was eventually sold.   The father's solicitors confirmed in writing to the mother that under the agreement the daughter would eventually receive either the mother's half-share in the property or half of the net proceeds of sale.   The father remarried but continued to live in the property, eventually transferring the property into the joint names of himself and his second wife "in consideration of natural love and affection".  On the father's death, intestate, the second wife argued that she held the entire beneficial interest in the property; the daughter claimed a half share in the property.   The judge rejected the daughter's claim, concluding that the written agreement had been an executory agreement, not a binding declaration of trust and it was a contract to make a will enforceable by the mother, but not the daughter as the daughter was a mere volunteer.  On appeal the daughter argued that the agreement established a constructive trust, rather than a contract to make a will, and the father had been in breach of trust when he transferred the property into the joint names of himself and the second wife.

115. The Court of Appeal allowed her appeal.  Reading the written agreement as a whole it was clear that the parties' intention had been that the property should be kept for the daughter, even though it was not to be transferred to her in the event of the father's death.  The daughter was to have a beneficial interest, subject to the father's right to occupy the property if he wished to do so, and the father had no right to dispose of the property for his own benefit.  Reading the solicitor's letter and the written agreement together, the written agreement could fairly be interpreted as using the word "devolve" in the sense of "transfer".   The principle in Bannister –v- Bannister [1948] 2 AER 133 that a party could not rely on the absolute nature of a conveyance to himself for the purpose of defeating a beneficial interest which, according to the true bargain between the parties, belonged to another, applied even if the bargain between the parties arose out of a contractual agreement that could, on the face of it, be enforced by a person other than the intended beneficiary.  Note that this case was one concerning a remedial constructive trust rather than a common intention constructive trust and is not of great relevance in the context of cohabitation claims.  The same can also be said of De Bruyne (below).

116. In De Bruyne –v- De Bruyne & Others [2010] EWCA Civ 519 a dispute as to beneficial ownership of certain assets arose in ancillary relief proceedings.   H's father was an inventor and much of the family fortune derived from his invention of Araldite glue. In 1971 the father created an irrevocable trust in America in respect of shares in his company, Techne.   The trust created a discretionary trust of both income and capital during the father's wife's lifetime for the benefit of a class of people including his wife and all his descendants.  There were subsequently other trusts including two children's trusts and subsidiary companies.   H had two children from his first marriage and triplets from his marriage to his second wife, five in all.

117. Eventually the father decided to wind up the 1971 trust and substitute a regime that would give him effective control of the Techne shares and the business.   In November 1991 there was therefore a rearrangement of the shares and trusts.   He had to persuade the other beneficiaries to do as he wished.  He persuaded his sister by giving her and her son property and money.   He persuaded his wife by improving her pension provision.  He persuaded his son, the husband, by a promise to establish a trust for his five children.  By these means he achieved the winding up of the 1971 trust.   His five children, for whom he purported to be acting thereby lost at least the chance of benefits under the 1971 trust.   He obtained the winding up of the 1971 trust at least in part on the basis of a promise to settle 257 shares on his five children.  The judge found that when the 1971 trust was wound up there was an obligation on the husband to settle those 257 shares on his children.  That obligation could have been enforced by his father, his mother or his aunt who were all parties to the agreement.  In the circumstances, he found that a constructive trust arose in favour of the five children.

118. For her part, the wife said that the transaction whereby the shares were transferred to the five children was a sham arrangement.  She also appealed against the judge's conclusion that there was a constructive trust.  The Court of Appeal had to consider Lloyds Bank plc –v- Rosset [1991] 1 AC 107 and Stack –v- Dowden [2007] 2 AC 432.  The basis of her appeal was as follows:

(i) All the children were minors in 1991 (the youngest was only 2) and it is artificial in the extreme to attribute to them and their father an agreement or common intention that the shares should be held on trust for them once released from the earlier settlement, given that they were both actually and legally incapable of having any effective intention or understanding in relation to the ownership of the shares;

(ii) The children did not act to their detriment in reliance on the common intention.  There was, it was argued, no detrimental reliance by the children.  They did nothing consciously in response to the relevant 1991 letter.  In any event they were only discretionary beneficiaries under the 1971 settlement and therefore had no necessary expectation of benefit;

(iii) The judge should not have used a remedial constructive trust

119. Although the court agreed with much of this logic and deprecated the use of a remedial constructive trust it nevertheless concluded that the judge got it right. At paragraph [49]:

"The authorities dealing with common intention constructive trusts provide only one example of a situation in which equity will impose a trust upon the owner or transferee of property based on the circumstances in which the property is acquired or dealt with.    For a trust to be created the court has to be satisfied that it would be unconscionable for the legal owner to assert his legal interest in the property to the exclusion of the alleged beneficiaries.  The fiduciary obligation which that involves arises most obviously in an express trust where the property is held under the terms of a trust instrument in which the interests of the beneficiaries are clearly identified.   In such cases the trustee either receives the property subject to the beneficial interests created by the instrument of transfer or, in the case of an express declaration of trusts, subjects property already owned by him to those interests.  In the case of a constructive trust, the obligation is imposed upon him as a result of his unconscionable conduct."

120. There were, found the Court of Appeal, a number of situations where equity will hold the transferee of property to the terms upon which it was acquired by imposing a constructive trust to that effect.  Such cases do not depend on some form of detrimental reliance in order to rebalance the equities between competing claimants for the property.  They concentrate instead on the circumstances in which the transferee came to acquire the property in order to provide the justification for the imposition of a trust (e.g. secret trusts and mutual wills).   "In neither case does the intended beneficiary rely in any sense on the agreement (he may not even be aware of it) but, in both cases equity will regard it as against conscience for the owner of the property to deny the terms upon which he received it (see generally Rouchefoucauld –v- Boustead [1897] 1 Ch 196 and Bannister –v- Bannister [1948] 2 AER 133).

121. The wife's appeal was dismissed.

122. In Miller Smith –v- Miller Smith [2010] EWCA Civ 1297 the husband and wife bought a very expensive property in joint names as beneficial joint tenants.   Unfortunately, the marriage broke down and the man moved out.  The wife did not accept that the marriage had broken down and there were defended divorce proceedings.  The property was worth somewhere between £12 million and £14 million but it was subject to a currency mortgage which was standing at about £7 million.  The monthly payments varied between £13,000 and £22,000 and were being met by the husband.   The husband was rising 70 and the wife was 44.    Ancillary relief proceedings could not progress whilst there was a defended suit outstanding.  The husband sought an order for sale of the property relying on, essentially, the powers within ss.14 and 15 of TLATA.   The wife resisted sale on the basis that there was an issue as to whether the marriage had broken down and, consequentially, as to whether the purpose for which the trust was established had come to an end, there was no power to order interim sales of property in ancillary relief proceedings and the court had deprecated the use of TLATA proceedings when ancillary relief proceedings were ongoing or contemplated and, in any event, the husband could afford to meet the mortgage – he received a one off payment of £1.2 million before tax the month before the hearing for an order for sale.  The trial judge made an order for sale and the wife appealed to the Court of Appeal.

123. Dismissing her appeal the Court of Appeal held that a court confronted with an application under TLATA between separated spouses should embark upon the discretionary exercise by asking itself whether the issue raised by the application could reasonably be left to be resolved within an application for ancillary relief following divorce.  Because it was much more desirable that an issue about the sale of the matrimonial home should be resolved within an application for ancillary relief, the court would, at this threshold stage, have particular regard to the question whether, within a time-frame tolerable in all the circumstances, the parties would become able to apply for ancillary relief.  Furthermore, it was hard to conceive that an order for sale would reflect a proper exercise of the discretion if, at first sight, there appeared to the court to be any measurable chance that, on an application for ancillary relief made within that time frame, the wife would be able to preserve his or her occupation of the home by securing an outright transfer of ownership or a variation of the trust for sale.

124. The husband's application crossed the threshold and had not been made prematurely: the parties had separated over 18 months prior to the hearing before the judge, and the husband had issued his petition more than a year previously; by defending the divorce petition, the wife had obstructed the grant of the decree nisi for more than 6 months; any ancillary relief applications were unlikely to be determined within another year.  Given the size of the outgoings on the home being funded by the husband, the time frame until possible determination of the parties' ancillary relief applications did not represent a tolerable delay.  Furthermore, there was no measurable chance that the wife would secure transfer of the property into her sole name, or that the ancillary relief court would confer on her a life interest in the property.

125. The judge had been under a duty to consider the purposes for which the home was held under s.15(1)(b) of TLATA, and had been entitled to conclude that the purpose in this case, to provide a home for both parties, was a purpose that the property could never again serve, even though the irretrievability of the breakdown of the marriage would also fall for consideration by the judge hearing the divorce petition.  The Judge had power to order vacant possession for the purpose of ordering a sale of the property under TLATA without being required to reach the conclusion that an occupation order should be made against the wife.

126. In Baker –v- Rowe [2010] 1 FLR 761 there had been contested ancillary relief proceedings between a husband and wife.   The wife's daughter and her former husband intervened on the basis of claims that they had a beneficial interest in the former matrimonial home.   The daughter's claim to be beneficially entitled to the whole of the property subject to the husband's right to continue to occupy the property for the rest of his life (he was 98 and the wife was 99) was upheld.  She obtained an order for costs against her former husband and he appealed that order.   The Court of Appeal upheld the costs order.  The general rule as to costs in ancillary relief proceedings set out in r.2.71(4)(a) did not apply to the issue of costs between the interveners, because the proceedings were not "ancillary relief" proceedings for the purposes of that rule (see Judge –v- Judge); the proceedings brought by the interveners in this case were proceedings for rival declarations regarding beneficial interests in a property and were related to, but not for, ancillary relief.  The rule that costs were to follow the event did not apply either, for these proceedings were family proceedings, and under r.10.27(1)(b) the general rule was disapplied.  The true position was that no general rule was applicable.  However, even in cases were no general rule applied, the fact that one party had been unsuccessful and must therefore usually be regarded as responsible for the generation of costs would often be the decisive factor in the exercise of the judge's discretion as to costs.  There had been potent reasons why the district judge had ordered the son-in-law to pay the daughter's costs and his decision would therefore be upheld.

Where real property is registered in joint names but there is no express declaration of the trusts of the beneficial interests
127. The presumption is that equity follows the law and it is for the claimant to prove to the contrary.    Shared beneficial ownership is assumed and the real issue is quantification.  How strong is the presumption?  Paragraph [66] per Baroness Hale:

"... cases in which the joint legal owners are held to have intended that their beneficial interests should be different from their legal interests will be very unusual  (emphasis added)"

128. Was Stack an exceptional case?6    Recent cases would suggest not.

129. One must ascertain the common intention as to the nature and extent of each parties' share.   Post Kernott it would seem that this can be inferred but cannot be imputed.  How should the parties' shared intention be ascertained?  Per Stack at paragraph [62] adopting the Law Commission formula in Sharing Homes (2002) paragraph 4.27 by:

"... adopting what has been called a "holistic approach" to quantification, undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which throws light on the question of what shares were intended."

130. See paragraph [69] for a list of factors identified by Baroness Hale.

Where real property  is registered in one name
131. The Court will have to conduct the full two-stage enquiry.  See Thomson –v- Humphrey [2010] 2 FLR 107.   The onus is on the non legal owner to establish that there was a common intention to share the beneficial ownership.  The standard of proof is the usual civil standard.  In practical terms such a common intention will be established through either a constructive trust or through proprietary estoppel (resulting trust theory, apart from Lord Neuberger's approach, is not particularly favoured).

132. Under constructive trust theory the common intention to share the beneficial ownership can be inferred (query imputed) from:

(i) Express discussions evidencing an agreement or understanding (Rosset I); or
(ii) By drawing inferences from conduct (Rosset II).

Express discussions
133. Must be pleaded in detail (H v M (Property: Beneficial Interests) [1992] 1 FLR 229.  Much will depend on credibility (see Cox –v- Jones [2004] 2 FLR 1010 for an example of this).  Strong evidence is required:

- See Thomson –v- Humphrey [2010] 2 FLR 107 – evidence of actual discussion found to be "sparse in the extreme" and the claim failed
- See Walsh –v- Singh [2010] 1 FLR 1658 evidence as to alleged express discussions about shared beneficial ownership was "not convincing" and the claim failed

Common intention evidenced by conduct
134. Strict test set down by Lord Bridge in Rosset doubted by the HL in Stack.   Abbott suggests a liberalisation but is this really a stage two case?  Was it in reality a case on quantification and not the initial establishment of shared beneficial ownership?

135. Subsequent cases do not make it clear exactly what conduct will be considered as evidence of shared ownership and which will not.  Some recent cases suggest that a claimant's contributions may be characterised as having been motivated by expectations of a personal relationship rather than expectations of ownership (see Walsh –v- Singh; Thomson –v- Humphrey and Morris –v- Morris).   Per Warren J in Thomson –v- Humphrey:

"Although the law may have moved on from Lloyds Bank plc –v- Rosset and Another [1991] 1 AC 107 and although it is not possible to lay down a clear line between what is and is not sufficient, I am clear that the matters relied on in the present case cannot give rise, in any sense, to the intention that the claimant should have an interest in [the property]."

Establishing an interest by post acquisition conduct alone
136. Sir John Chadwick in James –v- Thomas stated that a constructive trust may arise after the transfer of a property into a sole name.  However, a claimant will face an uphill struggle to establish this on conduct alone (see in particular Morris –v Morris).

Detrimental reliance
137. One must also establish the further element of detriment / change of position and this detriment / change of position must occur after the common intention as to shared ownership has been formed (Churchill –v- Roach [2002] EWHC 3230 (Ch).  For modern authorities see Gillett –v- Holt [2000]  EWCA Civ 66 (external link) (a proprietary estoppel case).   For a modern illustration of detriment see Holman –v- Howes [2007] EWCA Civ 877 .  Contrast the per curiam findings of no detriment in James –v- Thomas [2007] EWCA Civ 1212 and Thomson –v- Humphrey.

Quantifying the beneficial interests in sole name cases
138. In the absence of express agreement (by discussions) as to the parties' respective shares in the beneficial ownership, the court in a sole registration case will infer (impute?) an agreement to the parties.

The parties' respective shares are to be ascertained by undertaking a survey of the whole course of dealing between them in relation to the property and taking account of all conduct which sheds light on the question what shares of the property were intended.

Proprietary estoppel: what sort of representation is required?
139. The representation must relate to a particular entitlement (present or future) in respect of the particular property in question (see Yeoman's Row and Thorner –v- Majors).  A promise of future personal support (unrelated to an entitlement in respect of a particular property) will not suffice (see Lissimore v Downing [2003] EWHC B1 Ch (external link) and Churchill –v- Roach [2004] 2 FLR 989]

140. A representation will not give rise to a remedy if it is uncertain in its content.  Practitioners must therefore take great care in recording evidence of the representation alleged and in pleading it in the claim.  The cases are not easy to reconcile (see Wayling –v- Jones [1995] 2 FLR 1029 Holman v Howes [2007] EWCA Civ 877 Negus –v- Bahouse [2008] 1 FLR 381 and James –v- Thomas [2007] EWCA Civ 1212.

Quantifying the entitlement under proprietary estoppel
141. The range of relief is different to that provided by constructive trust.  The court's obligation is to seek the minimum equity required to do justice between the parties (see Crabb –v- Arun DC [1976] Ch 179 see also Stallion –v- ASH [2009] EWHC 349).  The court has a discretion as to the manner in which the equity can be satisfied.  It is not limited to declaring (and realising) beneficial ownership but may award some other type of relief or even monetary compensation (in Holman –v- Howes the woman was given the right to live in a property for as long as she wished.   Sometimes the result will be the same in proprietary estoppel as it would have been in constructive trust (see Q –v- Q [2008] EWHC  1874 Fam

142. There has been a lot of judicial activity in this area over the last three years.   This article has looked beyond the interpretation of Stack to other developments, particularly in the realm of proprietary estoppel.   It is hoped that future articles will be significantly shorter!

1 As the  Court of Appeal was careful to remind itself in the recent case of Kernott –v- Jones [2010] EWCA Civ 578

2 Note that Rebecca Bailey-Harris, in lectures we gave recently for Lime Legal, has cast doubt on whether this was in fact a "first stage" case in that the property in question was built on land gifted to the man and the wife, the wife paid instalments towards the mortgage and the man admitted in cross-examination that the wife had an interest in the property so that, if she is right, a lot of commentators (me included) have given too much weight to it.

3 For similar more recent decisions see Walsh –v- Singh, Morris –v- Morris and Thomson –v- Humphreys all discussed below

4 See also Walsh –v- Singh (Costs) [2010] EWHC 1167 (Ch) for the costs judgment in this case

5 See also Lord Neuberger's explanation of the importance of a "certain interest in land" in the quasi-contractual context of Cobbe at paragraph [92] to [100] of Thorner v Majors

6 See Fowler –v Barron, Kernott –v- Jones