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Ownership of the Family Home: the Common Intention Constructive Trust or Proprietary Estoppel?

Author - Austin Chan Tsz Him


Rival doctrines for dealing with ownership of the family home

When it comes to disputes about the ownership of the family home, two equitable doctrines come into play, namely the common intention constructive trust (CICT) and proprietary estoppel (PE). The two doctrines are similar in important respects; it has even been argued that any distinction between the CICT and PE is “illusory” (D. Hayton, ‘Equitable rights of co-habitees’, [1990] Conveyancer and Property Lawyer, 370). The CICT, however, offers claimants advantages that PE does not.


The similarities

A CICT can be established where the claimant can prove that there was an agreement (express or inferred) as to beneficial ownership and detrimental reliance by the claimant on that agreement. A successful PE claim requires the claimant to prove that the legal owner made a representation or assurance to the claimant that the claimant had, or would acquire, some right over the property. Again, there must be detrimental reliance by the claimant. Unconscionability, and the consequent right to bring a claim in PE, arises when the maker of the assurance seeks to resile from it.


This comparison makes plain the structural similarities between the two doctrines. According to Sir Nicolas Browne-Wilkinson V-C (as he then was), the doctrines ‘rest on the same foundation’ (Grant v Edwards). Grant v Edwards and Eves v Eves could be said to illustrate this proposition.


PE as an “easier” route

The law of PE has adapted its formal requirements to fit the family home context. Southwell v Blackburn and Liden v Burton show the requirement for an assurance being interpreted in a way that is sympathetic to the family home context.


In Greasley v Cooke ([1980] 3 All ER 710), the English Court of Appeal established a presumption of reliance where the assurance was intended to influence the recipient or would have influenced a reasonable recipient. This is potentially of great importance in cases where the relationship between the parties might otherwise be enough to account for the detriment incurred by the recipient of an assurance.


In these respects, it may be easier to establish a PE claim than to succeed with a CICT claim. CICT has, [1] nevertheless, certain advantages in terms of remedies.


The CICT advantage

As Lord Walker explained in Stack v Dowden, a PE claim is a ‘mere equity’ whilst in the CICT claim, the court identifies ‘the true beneficial owner’ and ‘the size of their beneficial interests’. These advantages of the CICT claim reflect its institutional character.


In the case of PE, however, equitable relief is at the court’s discretion. As Lord Denning remarked, ‘Equity is displayed at its most flexible’ (Crabb v Arun DC). Flexibility is a double-edged sword since it also brings uncertainty for the claimant who may merely get a monetary award or a license instead of obtaining a proprietary interest in the family home, which is the claimant’s main concern.


Extra hurdle for PE: Proportionality

Further, although the courts generally attempt to satisfy the expectation generated by the assurance, there is a requirement of proportionality between the relief sought by the claimant (i.e. expectation) and the detriment suffered by the claimant (Jennings v Rice). This means that the claimant’s expectation may not always be fully satisfied. The CICT has no proportionality requirement.


Conclusion

All in all, although it is easier to meet the requirements for a PE claim than to establish a CICT, the CICT provides claimants with the certainty of a beneficial share in the ownership of the family home. PE suffers from the uncertainty explained above.


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