Understanding Proprietary Estoppel and Constructive Trusts: When Fairness Overrides Formality

Disputes over property ownership often arise where the strict rules of land law don’t quite reflect the reality of people’s lives. Two key legal principles help bridge that gap, Proprietary Estoppel and Constructive Trusts.

Both are rooted in equity and fairness, and both can step in to ensure justice where one person’s expectations, promises, or contributions to a property have been overlooked.

What is a Proprietary Estoppel?

Proprietary Estoppel prevents someone from going back on a promise about land when another person has relied on it to their detriment.

Proprietary estoppel arises when:

1. A promise or assurance is made about rights in land;
2. The person receiving that assurance relies on it;
3. They suffer some form of detriment as a result; and
4. It would be unconscionable for the landowner to go back on their word.

When these elements are met, the court has wide discretion in how to do justice, it might award ownership, financial compensation, or a right to live in the property.

Key Cases: Examples of Proprietary Estoppel

Thorner v Major (2009)

David Thorner worked unpaid for nearly 30 years on his cousin Peter’s farm. Through words and actions including references to “death duties” Peter led David to believe he would inherit the farm. Although Peter later destroyed his will and died intestate, the House of Lords ruled that David had reasonably relied on Peter’s conduct and was entitled to the farm through proprietary estoppel.

Gillett v Holt (2001)

Mr. Gillett devoted his working life to Mr. Holt’s farm after repeated assurances that he would inherit it. When Holt later changed his will, excluding Gillett, the court found this to be unconscionable. Gillett was awarded the farmhouse, land, and compensation.

These cases show how proprietary estoppel can protect individuals in family or agricultural settings where trust and informal promises often replace formal contracts.

What is a Constructive Trust?

Constructive Trusts recognise that someone may have a beneficial interest in property, even if their name isn’t on the title.

These principles are particularly relevant in family disputes, cohabitation breakdowns, and inheritance cases, situations where relationships, not paperwork, define people’s understanding of ownership.

A constructive trust arises when fairness dictates that someone should share in the ownership of property even if the legal title is in another person’s name.

There are two key routes to establishing a constructive trust:

• Express or Implied Common Intention: The parties agree (explicitly or implicitly) to share ownership, and one person acts to their detriment in reliance on that understanding.
• Inferred Common Intention: The court infers an intention to share ownership based on conduct, such as contributions to the purchase price, mortgage, or significant improvements.

Key Cases: Examples of Constructive Trusts

Lloyds Bank v Rosset (1991)

This case established a strict approach only direct financial contributions to the purchase price or mortgage were likely to create a beneficial interest.

Stack v Dowden (2007)

The courts adopted a more flexible, modern approach. Where a home is jointly owned, the presumption is equal shares but this can change if evidence shows otherwise. In this case, due to the couple’s separate finances, the court divided the property 65:35.

Jones v Kernott (2011)

This case confirmed that courts can infer (or even impute) the parties’ intentions from their conduct, particularly when their relationship and financial circumstances evolve over time.

Constructive trusts are therefore crucial in cohabitation disputes providing protection for a partner who has made substantial financial or practical contributions to a property but is not named on the title.

Proprietary Estoppel and Constructive Trusts: Real-Life Scenarios

Scenario 1: Proprietary Estoppel in Action

Sarah gives up her career to care for her elderly mother, who repeatedly tells her, “This house will be yours one day.” When her mother dies, the will leaves the house to Sarah’s brother.

Sarah may claim proprietary estoppel, as she relied on her mother’s assurances, suffered detriment by giving up her job, and it would be unfair for her to be left with nothing. The court could award her the property outright or grant her a share or life interest, depending on what’s fair.

Scenario 2: Constructive Trust Between Unmarried Partners

Alex owns a home in their sole name, but their partner Jordan contributes half of the mortgage and pays for major renovations for ten years. When they separate, Alex insists the property is solely theirs.

Jordan can argue a constructive trust, showing common intention and detriment. Based on cases like Stack v Dowden and Jones v Kernott, the court could recognise Jordan’s beneficial interest perhaps 40% or 50% of the property.

Proprietary Estoppel and Constructive Trusts: Practical Tips for Practitioners

1. Be alert to potential issues in farming families or informal property arrangements consider deeds of trust or statutory declarations where no will is in place.
   
   
2. Refer complex cases involving these issues to the contentious probate or dispute resolution team.
   
   
3. Raise awareness early when advising clients on wills, LPAs, or estate planning, flag potential future disputes arising from informal promises or contributions.
   
   
4. Warn executors if administering an estate that might give rise to such claims, seek specialist advice before distribution, especially if acting as a professional executor.

Conclusion

Both Proprietary Estoppel and Constructive Trusts aim to achieve fairness where the law’s rigid structures fall short.

• Proprietary estoppel prevents injustice where promises about land have been relied upon to someone’s detriment.
• Constructive trusts ensure ownership reflects contributions and shared intentions, not just whose name is on the title deed.

While these doctrines are powerful, they are fact-sensitive and evidence-heavy success depends on detailed proof of promises, reliance, and conduct.

Ultimately, they embody equity’s timeless goal: ensuring fairness prevails over formality.

Call us today to speak with our Proprietary Estoppel and Constructive Trusts Lawyers

To book a fixed-fee appointment or to find out how we can support you, contact Thornton Jones Solicitors today on 01924 290 029. Our experienced dispute resolution team is here to provide clear, practical advice and help you take the next step with confidence, at a pace that feels right for you.

Proprietary Estoppel and Constructive Trusts FAQs

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