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Cases on proprietary estoppel and constructive trusts continue to proliferate. In Uglow v Uglow [2004] EWCA (Civ) 987 the Court of Appeal accepted that in cases of proprietary estoppel the assumptions made by the parties at the time the representation is made are important.
In 1976 the claimant left the farming partnership of which he was a member and entered into partnership with his great uncle, the testator. The testator told him that he would inherit the farm. The trial judge inferred that that was on the basis that 'all went well' with the partnership.
All did not go well and the parties agreed to abandon the partnership in 1984. Each then farmed separate parts of the estate. The testator granted his great nephew a tenancy for which he was to pay a rent, although, in fact, he never did. In 1999 the testator made a will leaving the farm to another member of the family. The great nephew claimed the farm on the basis of proprietary estoppel.
The Court of Appeal agreed with the trial judge that the claim failed.
It was likely that each side had entered the partnership on the assumption that it would continue until death and did not expressly consider what would happen if things did not work out. Certain conduct on the part of the great nephew would make it conscionable for the testator to modify his testamentary plans and assurances (for example, if the great nephew had left the country and abandoned the partnership).
The assurance had to be regarded as qualified by the need to take account of events unforeseen and not expressly considered in 1976. The scope of the court's enquiry was not limited to what would have been unconscionable for the testator to have done in 1976, but would take account of subsequent events affecting his conscience.
Constructive trusts arise in circumstances that are similar to proprietary estoppel. They are imposed where one person has acted to his detriment in reliance on a common understanding.
If the court finds that there is a case of proprietary estoppel, relief is at its discretion and it will award what it thinks fair in all the circumstances. Where there is a constructive trust the agreement of the parties governs the matter.
In one of the most recent decisions, Oxley v Hiscock [2004] 3 All ER 703, Lord Justice Chadwick conducted an extensive review of the authorities. He pointed out that there are many cases where the parties agree that each party should have some beneficial interest in the property; but do not go on to agree exactly what the extent of the respective shares should be.
In such cases, when approaching the question of the quantification of the claimant's beneficial interest, it is necessary to take a proprietary estoppel approach and award the parties what the court thinks is fair taking into account all circumstances of the case. 'Each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property,' said Lord Justice Chadwick.
In Oxley v Hiscock, the Court of Appeal found that the parties (who had made unequal contributions to the cost of purchasing a property) had not agreed the amount of share that each party was to have. On that basis, the correct question for the court was: 'What would be a fair share for each party having regard to the whole course of dealing between them in relation to the property?'
In the case Cox v Jones [2004]EWHC 1486, Mr Justice Mann followed this approach. One of the points at issue in the case was whether the claimant had an interest in a property purchased in the respondent's sole name.
The claimant had devoted a great deal of time and energy to finding and renovating a property that was bought in the sole name of her partner. The court found that there was an express arrangement between the couple that she was to acquire an interest in the property but no clear agreement as to the share that she should have. Weighing the time and effort put in by the claimant against the substantial financial contribution made by the defendant, it was appropriate to award her a 25% interest in the property.
Cases alleging undue influence in relation to lifetime gifts also seem to be on the increase. Lord Justice Mummery said in Pesticcio v Niersmans [2004] EWCA Civ 372: 'With the increase in home ownership and the rising value of residential property more people have more property to dispose of in their lifetime and on death and more people expect to benefit substantially from inheritance. As people live longer, the inheritors have to wait longer. There is, however, the unwelcome prospect that the longer the wait, the greater the risk that even a modest estate will be seriously diminished by the high cost of care in the old age or infirmity of the home owner, and by the impact of inheritance tax on death. The elderly and infirm in need of full time residential care are vulnerable to suggestions that they should dispose of the home to which they are unlikely to return. In my view, these social trends are already leading to a renewed interest in the law governing the validity of lifetime dispositions of houses, both in and outside the family circle, by the elderly and the infirm.'
In Randall v Randall EWHC 2004, Vale v Armstrong [2004] EWHC 1160 Ch and Macklin v Dowsett [2004] EWCA Civ 904, the court set aside lifetime gifts on the basis of presumed cases of undue influence.
In both these cases, the court commented on the conduct of the solicitors involved in the transactions. In Randall, the court emphasised how important it is for a solicitor to be clear on whether he acts for donor or donee. In Vale v Armstrong, the court commented on the importance of establishing the full circumstances of the transaction, the relationship between the parties and the donor's expertise and experience of property matters.
Allardyce v Roebuck and Others [2004] 3 All ER 754 is a case on testamentary options to purchase. Mr Justice Rimer declined to find that time was of the essence. It is always a question of construction whether or not strict timely compliance is required.
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