Proprietary estoppel, constructive trust and co-habiting couples

The courts have often been asked to look at cases where property has been bought by an unmarried co-habiting couple to act as their family home. Where the property is bought in the name of just one of them then equity might still decide that the other has a beneficial or equitable entitlement under either a resulting or constructive trust. In constructive trust cases, there is a need to decide on the size of the parties’ respective beneficial entitlements. It is now established that in the absence of an express agreement between them on this issue then the court has regard to the whole course of conduct during the relationship. On what legal / conceptual foundations is this approach supported?

In Oxley v Hiscock [2005] Fam. 211 CA (Eng) Chadwick LJ reviewed the answers to this question that had been given in earlier cases.  One possible explanation is that:

‘the court treats what has taken place while the parties have been living together in the property as evidence of what they intended at the time of the acquisition.’ (at 247).

The problem with this is that in these cases the evidence is that no agreement had been reached at all.

The alternative is that:

‘The court makes such order as the circumstances require in order to give effect to the beneficial interest in the property of the one party, the existence of which the other party (having the legal title) is estopped from denying.’ (at 247)

This is a proprietary estoppel approach. Chadwick LJ did not reach a conclusion as to which explanation was to be preferred but he said:

‘But, as I have said, I think that the time has come to accept that there is no difference in outcome, in cases of this nature, whether the true analysis lies in constructive trust or in proprietary estoppel.’ (at 247)

Proprietary estoppel does indeed seem to be one thread or approach that runs through cases like this.

Michael Lower

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