Interests in the family home: constructive trusts and estoppel compared

AuthorR. J. Smith
PositionFellow of Magdalen College, Oxford
One of the most difficult issues facing the courts in recent decades
has been the sorting out of the property consequences of informal
arrangements regarding ownership and occupation of family homes.
The courts might have taken the view that no rights would be
recognised without clear written evidence, but that harsh approach has
never been adopted. Alternatively, the courts could have developed a
theory that the family home is always (at least in the absence of a
contrary intention) jointly owned. Although it looked as though that
solution might be adopted in the late 1960's, it was rejected in the
leading House of Lords cases of Pettitt v. Pettitt1 and Gissing v.
Gissing2 and it seems unlikely to re-emerge in the near future. In the
absence of either extreme solution, the courts have been struggling to
define the situations when an informal arrangement will give rise to an
interest in the home. I should, perhaps, add that there is generally a
statutory discretion in most countries to allocate property between
husband and wife on divorce: this renders it unnecessary to decide
what their strict property rights are. Some countries have provisions
extending to those who are living together as husband and wife and
also operating in situations other than divorce: the Barbados Family
Law Act, Cap 214, provides an example. It should be remembered,
however, than not even the widest legislation will cover all cases.
Two devices have been employed by the courts. Where both parties
have contributed to the purchase, then the courts have been willing to
infer that there was a common intention that it should be jointly owned
and have given effect to this common intention by way of constructive
trust (sometimes described as a resulting trust). Where the argument
has succeeded, the invariable result is that the claimant (C) has a share
in the land. It may be a half share, or else some other proportion that
better represents the value of the contribution. The second device is
Fellow of Magdalen College, Oxford. The substance of this article was first
delivered in a lecture by the author at the Faculty of
University of the
West Indies, Cave Hill, Barbados, in April 1993.
1 [1970] A.C. 777. See Lord Reid at 793, Lord Hodson at
Lord Upjohn
at 813-815 and Lord Diplock at 823-824.
2 [1971] A.C. 886.
that of proprietary estoppel. If the owner of land (O) makes a
representation that C should have an interest and C acts to his or her
detriment, then the courts may be willing to say that C shall be given
this interest. The courts may, for example, order that C be given the
fee simple, lease or right to reside for life.
The two devices of constructive trust and estoppel developed from
the 1960's to the 1980's without any realisation that they shared
common characteristics. Over the past seven years or so, judges and
commentators have become aware of their overlapping each other.
What I wish to investigate here is whether the two devices really are
the same, and the extent to which the rules applying to them either are
or should be the same.
Before plunging into these issues, we need to consider the current
state of the law on each of
common intention constructive trust and
Ever since
in 1970, the emphasis has been upon
finding a common intention. Such a common intention must be
inferred from the facts: the court has no jurisdiction to impute to the
parties an intention that they never had, even if they might have
formed such an intention had they thought about it. For some time,
it looked as if a broader view might be adopted even after Gissing.
Lord Denning M.R. advocated what has been described as the new
model constructive trust, in reliance upon dicta of Lord Diplock in
Gissing that a trust will be created whenever the trustee has so
conducted himself that it would be inequitable for him to deny to the
cestui que trust a beneficial interest in the land acquired. And he will
be held so to have conducted himself if by his words or conduct he
has induced the cestui que trust to act to his own detriment in the
reasonable belief that by so acting he was acquiring a beneficial
interest in the land.
In a series of cases in the early 1970's,3 Lord Denning M.R.
seized on these words as if they represented a test that could be
applied on a case by case basis. Yet those words cannot be plucked
out of their context: Lord Diplock is doing no more than expounding
3 See in particular Binions v. Evans [1972] Ch.359; Hussey v. Pabner [1972]
1 W.L.R. 1286; Eves v. Eves [1975] 1 W.L.R. 1338.

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