V and P make a deal that involves the sale or lease of V’s land to P. The formalities required by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 have not been observed. P nevertheless goes into possession and spends time and money on the land. V eventually withdraws from the deal.
Having no claim for breach of contract, P will try to establish a constructive trust, the operation of such trusts being expressly excluded from the section. As demonstrated in Yaxley v Gott [1999] EGCS 92 (where the parties were engaged on a joint enterprise), the essentials of such a trust are: (i) a clear agreement – which need not amount to a binding contract; and (ii) a claimant who has acted to his detriment in reliance upon that agreement.
On the all-important question of reliance, Yaxley may be usefully contrasted with the refusal to find such a trust in James v Evans [2000] EGCS 95, where the relevant conduct was held to be attributable to local practice, rather than to the terms of the agreement awaiting signature.
The mould-breaking potential of the Yaxley-type constructive trust has recently been demonstrated by Healey v Brown [2002] 19 EG 147 (CS), where the principle was somewhat adventurously applied to give new vigour to equitable doctrines governing mutual wills.
The boundary between a claim based upon such a trust and one based upon estoppel is far from being well defined. Question-spotting law students are advised accordingly.
Related item:
V and P make a deal that involves the sale or lease of V’s land to P. The formalities required by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 have not been observed. P nevertheless goes into possession and spends time and money on the land. V eventually withdraws from the deal.
Having no claim for breach of contract, P will try to establish a constructive trust, the operation of such trusts being expressly excluded from the section. As demonstrated in Yaxley v Gott [1999] EGCS 92 (where the parties were engaged on a joint enterprise), the essentials of such a trust are: (i) a clear agreement – which need not amount to a binding contract; and (ii) a claimant who has acted to his detriment in reliance upon that agreement.
On the all-important question of reliance, Yaxley may be usefully contrasted with the refusal to find such a trust in James v Evans [2000] EGCS 95, where the relevant conduct was held to be attributable to local practice, rather than to the terms of the agreement awaiting signature.
The mould-breaking potential of the Yaxley-type constructive trust has recently been demonstrated by Healey v Brown [2002] 19 EG 147 (CS), where the principle was somewhat adventurously applied to give new vigour to equitable doctrines governing mutual wills.
The boundary between a claim based upon such a trust and one based upon estoppel is far from being well defined. Question-spotting law students are advised accordingly.
Related item:
PP 2000/125
