Proprietary estoppel: genuine belief but no assurance

McGuiness v Preece ([2016] EWHC 1518 (Ch)) concerned a son’s claim to land owned by his parents. The parents had established a family business in which their four children worked. The parents transferred the business into a company set up for the purpose. The parents were the majority shareholders until they were bought out by the children when the father decided to retire. The parents retained in their own name the title to the land on which the business was carried on. The father died and ownership of the land passed to his wife. She then died leaving the land to her daughter. One of the sons claimed to have an interest in the land, relying on proprietary estoppel and / or a common intention constructive trust. The claim failed.

Newey J. accepted that the son had a genuine belief that he had or was to have an interest in the land. The claim failed, though, because nothing said or done by or on behalf of the father was a ‘clear enough’ (Thorner v Major) assurance. From a constructive trust perspective, there was no assurance or agreement. Newey J. was sympathetic to the argument that the sale of the business (without the land) was the subject of a contract and so there was no room for equity to play a part. For the sake of argument, however, he was prepared to assume that the contractual context did not preclude reliance on proprietary estoppel and the common intention constructive trust ([79]).

Michael Lower

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