Where a claim requires the determination of ownership of property, the analysis is in constructive trust whereas proprietary estoppel is an equitable claim against the owner of property.
The court has considered a claim in constructive trust between joint legal owners in Anderson v Breakenridge (Central London County Court Claim No G10CL361), where the claimant sought an order for sale of property as a 50% beneficial owner.
The case concerned a property in Leyton, London, purchased by the claimant and the defendant as beneficial joint tenants in December 2007 for £250,000. The purchase was funded largely by a mortgage and a loan of £15,000 from the claimant’s parents which was protected by a restriction on the title.
The parties separated in autumn 2009 and the claimant left the property. The defendant claimed that there were discussions resulting in an agreement in December 2009 that he would become sole beneficial owner of the property responsible for payment of the mortgage and repayment of the loan. The claimant denied any such agreement.
The defendant needed to demonstrate a common intention that he should have the sole beneficial interest in the property and that he had acted to his detriment in reliance on that common intention so that it was inequitable for the claimant to deny him that interest.
The court found that there was an agreement in December 2009 for the claimant to give up any interest in the property. At that time the property was in significant negative equity following the property crash in 2008. A market appraisal assessed its value in November 2009 at £230,000. An e-mail from the defendant to the claimant in December 2009 outlined their options: to sell the property and each repay £10,000-£15,000 or for him to take over responsibility for it and the loan. Consequently, far from abandoning an asset, the claimant was escaping a liability. The claimant acknowledged a conversation about finances which the court decided included the ownership of the property. Later e-mails from the claimant acknowledged the defendant’s ownership of the property.
As for detrimental reliance, a clear overall picture emerged. Taking on the property, in negative equity, and responsibility for the loan in 2009 required effort and acceptance of risk by the defendant. It was substantial and sufficient detrimental reliance on the agreement which rendered it inequitable for the claimant now to deny the agreement. The defendant had also paid the mortgage from 2010 to 2018 which of itself would have been sufficient: Quaintance v Tandan [2012] EWHC 4416 (Ch).
Louise Clark is a property law consultant and mediator
