He said, she said: property ownership when couples separate

Is the difference between common intention constructive trusts and proprietary estoppel illusory?

When couples or cohabitants[1] face financial troubles or the breakdown of their relationship, it may be necessary to determine various rights in regards to shared property. Should co-ownership of the family home be unclear, individuals in cohabitation often seek to claim an interest for themselves. Although The Matrimonial Causes Act 1973 offers statutory guidance after a divorce between (former) spouses, the law is far more flexible when considering the property rights of unmarried cohabitants.

In such circumstances, a non-legal owner may attempt to claim an equitable share in the residence by establishing either a common intention constructive trust, or applying for proprietary estoppel. While Prof. Hayton of Kings College London posits that the differences between the two options are merely ‘illusory’ and advocates for their assimilation into a singular legal doctrine, this essay will argue that the distinctions, while subtle, are important to notice and maintain.


When two legal owners hold property jointly, most disputes – as in Stack v Dowden or Jones v Kernott – adhere to the axiom of equity following the law. If no special circumstances apply, cohabitees are subject to the presumption of equitable joint tenancy, and thus obtain equal shares when the relationship breaks down. This is distinct from cases where there is but one legal owner of the home, and another individual (often the wife or female partner) claims some beneficial interest. While no interest in land can be created or disposed of except by writing as per S.53 of the Law of Property Act 1925, it is presumed uncommon for cohabitees to explicitly state their intentions &/or interests in a written contract. However, common intention constructive trusts are exempted by S.53(2) LPA 1925 from the formality requirement. Should questions of ownership arise, a claimant might therefore demonstrate an equitable interest of the family property, under this constructive trust of common intention.

Unlike an express trust, a constructive trust lacks a widely accepted definition or cohesive element, and may be found in a wide range of scenarios. It is helpful to understand the concept as an institution[2] used by English courts to determine property ownership, in lieu of a doctrine of communal family assets common in America.[3] Hayton explains that if “a party has acted to his or her detriment in reliance upon a common intention that he or she will acquire an interest in a property,”[4] the courts may recognise a trust of common intention. In Paragon Finance, Lord Millett concluded these trusts arise by “operation of law whenever the circumstances are such that it would be unconscionable for the owner of property to assert his beneficial interest,”[5] vis-à-vis the other party seeking a share of the property.

Lloyds Bank plc v Rosset established a framework for determining if such a constructive trust of the family home exists, based on elements of intention resulting in detrimental action. To argue her interest, the claimant must establish that there was a common intention between both parties to share the property, and that she acted to her detriment on the basis of that common intention, so that it would be inequitable for the owner to deny her an interest. [6] If successful, the court then ‘discovers’ her right in a retrospective examination of events, and may award her an equitable interest.

In Lloyds Bank, Lord Bridge determined that Ms Rosset – a woman whose husband was the sole legal owner of the home – was unable to establish such an equity. As she failed to make “direct contributions to the purchase price […] whether initially or by payment of mortgage instalments,” Ms Rosset’s supervision of construction and renovation of the home was not considered a sufficient act to her detriment.[7] However, it is worth noting that the claimant may have been successful in acquiring an equitable interest under the doctrine of proprietary estoppel, which will now be considered.


Like constructive trusts, proprietary estoppel lacks a concrete definition, but can be summarised as a way for a claimant to demonstrate equitable entitlement to property. Following the successful establishment of the equity, the court then has at its discretion a wide range of remedies. Lord Oliver in Taylor Fashions offered an outline of the principles necessary to establish proprietary estoppel.[8] Firstly, the legal owner must induce, encourage or otherwise allow the claimant to believe he has or will enjoy some right or benefit over the property. Secondly, in reliance upon this belief, the claimant acts to his detriment to the knowledge of the owner. Thirdly, the owner must then seek to take unconscionable advantage of the claimant by denying him the right or benefit which they had expected to receive.

Though estoppel is often seen as a defendants ‘shield’ against a claim, proprietary estoppel is an exception where claimants have a ‘sword’ or course of action to rectify an injustice. If the above conditions are met, equity will not then allow the legal owner to deny his assurances of property rights when the claimant has been either actively encouraged or passively permitted to act upon those assurances to their detriment.

Pascoe v Turner illustrates such an example of the court estopping a legal owner from insisting on his strict legal ownership.[9] In this instance, a man repeatedly told his unmarried partner that the house they shared was also hers. She made repairs and decorated the home thus acting to her detriment in reliance on his assurance, whilst he actively encouraged her treat the home as her own. Passive assurance as in Thorner v Major may also satisfy the condition provided it is, as Lord Neuberger formulated, “reasonably understood that the statement or action [is] an assurance on which [the claimant] could rely.”[10]


Trusts of common intention and proprietary estoppel can each provide for an informal creation of equitable property rights, whenever a person has acted detrimentally upon the reliance of a legal owner. As explained above, trusts of common intention must consider if strict assertion of a legal owner’s property rights would be unconscionable. Likewise, in Gillett v Holt Lord Justice Walker argued that the “fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements” of proprietary estoppel.[11] As both doctrines seek to ascertain beneficial interests for non-legal owners by preventing or remedying unconscionable action, it is easy to see that considerable overlap exists.

In fact, a constructive trust may be recognised concurrently with the award of an estoppel remedy in the same case. Such was the situation In Yaxley v Gotts,[12] where the Court of Appeal upheld the entitlement of proprietary estoppel established in a lower court, but went further to apply the principles of Lloyds Bank and establish a constructive trust. In Oxley v Hiscock, Lord Chadwick noted in obiter that it “may be more satisfactory to accept that there is no difference […] between constructive trust and proprietary estoppel.”[13] This supports Hayton’s suggestion that proprietary estoppel and trusts of common intention might be merged into a single doctrine under the unifying premise of equity preventing unconscionable action.

While the difference may seem illusory, in Stack v Dowden Lord Walker responded to Lord Chadwick’s obiter from Oxley v Hiscock. Noting that he was “rather less enthusiastic about the notion that proprietary estoppel and ‘common interest’ constructive trusts can or should be completely assimilated,” Lord Walker asserted several clear distinctions between the two:[14]

Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the “true” owner. The claim is a “mere equity”. It is to be satisfied by the minimum award necessary to do justice,[15] which may sometimes lead to no more than a monetary award. A “common intention” constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests.

As an equitable device, proprietary estoppel may be further distinguished from the common intention constructive trusts in terms of how it is recognised. The latter essentially discovers the existence of a beneficial interest already created by the parties themselves,[16] whereas the successful claim for proprietary estoppel creates an equitable interest in the court itself, the moment a judgment is handed down.

When revisiting the two Lloyds Bank requirements needed for trusts of common intention to succeed – common intention and detrimental reliance – the distinction becomes even more apparent. Proprietary estoppel does not require an explicit intention shared between the parties. Instead, the claimant need only prove that the legal owner induced, encouraged or allowed her to believe she will enjoy some right over the property.

This may have been only an implied or passive assurance, but is enough to satisfy the first requirement of proprietary estoppel given by Lord Oliver above. In contrast, constructive trusts are rooted in the establishment of bilateral consensus between the parties. This alone is not sufficient to establish an equity however, as the claimant must then prove she acted to her detriment in good faith that the property was to be shared. Detriment is an essential element of both constructive trusts and proprietary estoppel, but the detriment required can differ.

When an express statement of common intention is not available, courts review the conduct of the parties. Because direct financial contributions made in support of the property acquisition strengthens the inference of a shared intention, there is little willingness to accept non-financial detriment such as housekeeping as sufficient for trusts of common intention. This complements Lord Bridge’s statements that only limited financial activities constitute detrimental action. This connection between common intention and detrimental reliance may seem reasonable, but might inadvertently disadvantage certain classes of claimants.

For example, women often earn less and may be unable to make large initial deposits when acquiring property: they are more likely to contribute by making smaller payments over time, or by tending to duties and children at home. Proprietary estoppel allows for more flexibility in ascertaining what amounts to detriment, because it does not require a strict financial contribution. In Wilmot v Barbert, Lord Fry noted a claimant need only to have “expended some money or done some act on the faith of that mistaken belief”[17] to establish detrimental reliance. A century later in Grant v Edwards, Lord Browne-Wilkensen suggested that “any act done by her to her detriment relating to the joint lives of the parties qualifies as sufficient detriment to establish a beneficial interest.”[18]

While courts can look at the whole course of dealings when determining common intention,[19] satisfying the relatively narrow requisites for constructive trusts of may be more difficult than those for proprietary estoppel. If courts follow the rules of Lloyds Bank too rigidly, unintentional discrimination of the financially inferior partner may be endemic. Traditional patterns of and attitudes towards home ownership and relationships have been challenged and changed, thanks to the Married Women’s Property Act 1882, the aforementioned Matrimonial Causes Act 1973, and the recent Civil Partnerships Act 2004.

As such, it is essential to allow courts flexibility when determining equitable shares in property and the subsequent remedy, which is a substantial feature of proprietary estoppel. While this doctrine ought not to be invoked merely because “justice and good conscience”[20] seem to require it, “focusing on technicalities can lead to a degree of strictness inconsistent with the fundamental aims of equity.”[21]

Hayton suggests that the differences between trusts of common intention and proprietary estoppel are so insignificant that assimilation of the doctrines under one principle might be warranted. This essay has argued that the differences are far from illusory: the requisite conditions to establish the equity differ in each instance, as do the remedies available to the court. Given the complexities of modern relationships and home ownership, and the subsequent evolution of property rights, the distinct alternative of proprietary estoppel to trusts of common intention is an important one to maintain.

© NaturAdvocate, written March 2013
Mark: 69% (UK) or A- (USA)


Megarry R., Wade W., Harpum C., Bridge S., & Dixon M., The Law of Real Property 8th edition, Sweet & Maxwell, 2012

Pearce R., Stevens J., & Barr W., The Law of Trusts and Equitable Obligtions, 5th edition, Oxford University Press 2010


Crabb v Arun District Council [1976] Ch 179
Gillett v Holt [2001] Ch 210
Grant v Edwards [1986] 2 All ER 426
Haslemere Estates Ltd v Baker [1982] 1 W.L.R. 1109
Lloyds Bank plc v Rosset [1990] 1 All ER 1111
Oxley v Hiscock [2004] EWCA Civ 546
Paragon Finance Ltd v Thakerar [1999] 1 All ER 400 CA
Pascoe v Turner [1979] 1 WLR 431
Pettitt v Pettitt [1970] AC 777
Stack v Dowden [2007] UKHL 17
Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133
Thorner v Major [2009] 3 All ER 945
Wilmott v Barber (1880) 15 Ch D 96
Yaxley v Gotts [2000] 1 All ER 711


Civil Partnerships Act 2004
Married Women’s Property Act 1882
Matrimonial Causes Act 1973
Family Law Act 1996


[1] The Family Law Act 1996 S. 62(1)(a) defines cohabitants as “two persons who are neither married nor civil partners […] but are living as husband and wife or as if they were civil partners.”

[2] Re Polly Peck International Plc (No. 2) [1998] 3 All ER 812 at 823

[3] Pettitt v Pettitt [1970] AC 777 at 795

[4] ‘Equitable rights of cohabitees’ [1990] Conv 370, as described in Megarry & Wade et al, The Law of Real Property 8th edition, Sweet & Maxwell, pg. 424 at 11-023

[5] Paragon Finance Ltd v Thakerar [1999] 1 All ER 400 CA

[6] Lloyds Bank plc v Rosset [1990] UKHL 14 [1991] AC 107

[7] Lloyds Bank plc v Rosset [1990] UKHL 14 [1991] AC 107

[8] Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 at 151

[9] Pascoe v Turner [1979] 1 WLR 431

[10] Thorner v Major [2009] 3 All ER 945 at paragraph 85

[11] Gillett v Holt [2001] Ch 210, [2000] 2 All ER 289 at 225

[12] Yaxley v Gotts [2000] 1 All ER 711

[13] Oxley v Hiscock [2004] EWCA Civ 546 at paragraph 66

[14] Stack v Dowden [2007] UKHL 17 at paragraph 37

[15] Crabb v Arun District Council [1976] Ch 179

[16] Pearce, Stevens, & Barr, The Law of Trusts and Equitable Obligtions, 5th edition, Oxford University Press pg. 339

[17] Wilmott v Barber (1880) 15 Ch D 96 at 105

[18] Grant v Edwards [1986] 2 All ER 426 at 427

[19] Stack v Dowden [2007] UKHL 17 at 455

[20] Haslemere Estates Ltd v Baker [1982] 1 W.L.R. 1109 at 1119

[21] Thorner v Major [2009] 3 All ER 945 at 804

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