CICT and Proprietary Estoppel

• Common Intention Constructive Trust

  Where there is joint legal ownership of the home, but no express declaration of the parties' respective beneficial shares, the initial presumption is of joint and equal beneficial ownership. This presumption will be rebutted only exceptionally and through the common intention constructive trust.
• Proprietary Estoppel


  Where there is sole legal ownership of the home, the initial presumption is of sole beneficial ownership. A claimant may use a resulting or constructive trust both to establish the existence of a beneficial interest (the primary acquisition question) and to quantify his or her share (the secondary quantification question).
• Common Intention


  Can be expressed or implied. For the secondary quantification question, may also, in limited circumstances, be imputed.
• Constructive Trusts


  • Describes the circumstances in which property is subjected to a trust by operation of law
  • Do not need to be in writing as they are exempted from the operation of Law Property Act 1925 s 53(1) (b), by s 53(2)
  • Mere denial of an informal arrangement or understanding is of itself generally insufficient, since equity will not assist a volunteer
  • Either the owner must be unjustly enriched or the claimant must have acted to their detriment
• Constructive Trusts and Proprietary Estoppel

  Both rely upon a promise which has been relied upon and a detriment due to the reliance of the promise
• Constructive trust and proprietary estoppels are ways of enforcing a promise made by a landowner to a claimant being informal
• Joint Names Cases


  Where a property is registered at the land registry in both parties' names
• Sole Name Cases


  Where a property is registered at land registry in one of the two parties names only
• Presumption in Sole Name Case

  It is presumed that the property is also owned beneficially on a sole basis
• Jones v Kernott (2012)


  • An unmarried, co-habiting couple, Mr. Kernott and Ms. Jones, purchased a home with a mortgage in joint names. The couple co-habited the home and contributed to its expenses for eight years, after which Mr. Kernott left the property and made no further contributions. Ms. Jones remained in the property with their children and paid all further expenses towards the acquisition of the property.
• The Supreme Court upheld that, if a property is purchased in joint names for a couple, there is a presumption that their beneficial interests in the property coincide with their legal estate
• A party who seeks to argue that the legal title does not reflect the beneficial ownership, has the burden of proving it
• Common Intention Constructive Trust


  • That the parties has a shared common intention that the beneficial interest in the property would b held otherwise than in accordance with the legal title AND
  • That in reliance upon that intention they acted to their detriment
• Two Stages of Intention in Sole Name Case

  1. Has the C established that the parties had a shared common intention to share the property beneficially at all?

  2. If the court is satisfied that the parties had that common intention: how should the parties respective beneficial interests be quantified?
• Express Common Intention


  Can only be based on an: "...agreement, arrangement or understanding reached between them that the property is to be shared beneficially.
• Inferred Common Intention


  Based on the parties conduct: "In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust.
• Rossett Test Cases


  • Geary: Must be common intention - Running a business will not suffice as common intention. Unless it is clear on the facts that there is a common intention to share.
  • Grant: Reliance on a lie
  • Drake: Financial considerations will be sufficient for DR
  • La Foe: Indirect contributions will not suffice
  • Culliford: Building work - substantial detriment
  • Thompson: Detriment must be real
• Quantification


  When not expressed, the court is entitled to allocate a share by considering the entire course of dealing between the parties with respect to the property
• In the absence of a financial contribution to the property, a CICT based on conduct alone will ONLY be found in EXCEPTIONAL CIRCUMSTANCES
• James v Thomas (2007)


  • Cohabiting couple, C had undertaken manual labour work associated with the D's business. C contended that this was conduct from which the court should infer a common intention to share the property.
• Pillmoor v Miah (2019)


  • The couple ran a family shop together. The evidence of financial contributions to the property was unclear. The case was run on the basis that a common intention to share the property should be inferred from their conduct in relation to the business.
• Dobson v Griffey (2018)


  • Cohabiting couple living on a farm in Devon. Farm was purchased in D's sole name with a mortgage in his name. C alleged that prior to the purchase, an agreement had been reached that she would share in the property and that she relied on agreement to her detriment by carrying out various renovation and improvement works.
• Common intention constructive trust (CICT)

  A route for cohabiting couples to find beneficial interest in property by establishing a common intention, since they cannot rely on the Matrimonial Causes Act to split their assets
• The development of CICT has firmly established the basis of common intention of the parties, but the courts define common intention differently in respect of different tests used
• Some argue that the development of CICT has increased the need for parliamentary reform due to the uncertainty of the paragraph 69 factors in deciding fairness as to the quantification of the beneficial interest
• Proprietary estoppel


  A principle that can also be used by cohabiting couples to establish a beneficial interest in property, similar to CICT
• Similarities between CICT and proprietary estoppel

  In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property; the claimant must have acted to their detriment in reliance on such belief; equity acts on the conscience of the legal owner to prevent them from acting in an unconscionable manner by defeating the common intention
• Differences between CICT and proprietary estoppel

  A trust establishes that the claimant has a share in the equitable ownership of the property, whereas proprietary estoppel generates a mere equity that needs to be satisfied but need only be done so by the minimum required to do justice; the claimant's right arises as soon as they have acted in their detriment under a CICT, whereas a proprietary estoppel must "mature" or 'crystallise' in the form of a court award; an interest under a trust is an entitlement, not a discretionary award
• The flexibility of proprietary estoppel makes it unpredictable, whereas CICT is more certain. Combining CICT and proprietary estoppel could have larger, knock-on economic consequences, such as detrimental effects on mortgagees who may not be able to predict whose rights they will be bound by.
• There is a serious problem with transparency and overlap between CICT and proprietary estoppel, but they perform different functions and there is no guidance on how they could be brought together.
• The common intention constructive trust (CICT) is a route for cohabiting couples to find beneficial interest of the property by establishing a common intention since they cannot rely on the Matrimonial Causes Act to split their assets
• CICT will be established upon a finding of "common intention" creating a property right


  Proprietary estoppel functions as a backstop for unconscionable conduct where a common intention cannot be shown or where a benefit under a trust is not an appropriate remedy
• Hayton has recognised a serious problem with transparency and overlap between CICT and proprietary estoppel
• Land law requires clear rules in order to ensure certainty and efficiency
• There are strong similarities between CICT and proprietary estoppel, and they do overlap, but in the end they perform different functions
• There is no guidance on how CICT and proprietary estoppel could be brought together, what the remedies would look like and what the organising element would be
• The courts' rigid approach to CICT by looking at financial contribution to establish common intention is inaccurate
• The courts' attempt to look at the 'whole relationship' to prove common intention is also inaccurate
• The 'whole relationship' approach adapts remedial constructive trust, making the constructive trust based on discretion rather than evaluation, resulting in high judicial subjectivity and nullifying common intention
• The financial contribution approach does not give effect to common intention because despite the lack of financial contribution to the property there might have been common intention of beneficial interest to the parties