Proprietary Estoppel & Constructive Trust claims are not Contentious Probate claims. These claims are discussed in detail in my book, the ‘Contentious Trusts Handbook’, published by the Law Society in 2020.
A ‘Proprietary estoppel’ claim typically consists of asserting an equitable claim against the conscience of the ‘true’ owner. The claim is a ‘mere equity’. It must be satisfied by the minimum award necessary to do justice, which may sometimes lead to no more than a monetary award.
By contrast, a ‘common intention’ constructive trust claim, involves identifying the true beneficial owner or owners, and the size of their beneficial interests.
English law provides no clear and all-embracing theory of constructive trusts.
The boundaries have been left perhaps deliberately vague so as not to restrict the Court by technicalities in deciding what the justice of a particular case might demand.
There are established categories of circumstances in which it has been held that a constructive trust will arise. The categories are not closed. The categories include constructive trusts arising from:
(i) impugned transactions/payments (without a prior fiduciary relationship);
(ii) a prior fiduciary relationship; and
(iii) a prior agreement or understanding.
The constructive trust is not a rigid doctrine. Instead it is deliberately built on a flexible, high level principle of ‘good conscience’.
The current orthodoxy in English law for constructive trusts is whether a proprietary interest exists is not dependent on property per se, but rather when:
(a) it is unconscionable to deny the beneficial interest of another; or
(b) if there is fraud.
For a ‘common intention’ constructive trust to arise, the parties must have had a ‘common intention’ to share the property beneficially, upon the faith of which the claimant then acts in reliance to his/her detriment.
It is the ‘detrimental reliance’ that makes it ‘unconscionable’ for the defendant landowner to resile from their otherwise unenforceable agreement.
The court has no power to impute an ‘agreement’ or ‘common intention’ to the parties based upon what it considers would have been fair or reasonable.
When the court is considering what the parties actually intended, it looks at the objective phenomena available for consideration, and not into their minds themselves.
The assessment is thus an objective rather than a subjective one.
Pleading these claims in association with a Contentious Probate claim is often a sign of desperation. That is because these cases are highly fact-sensitive, and most fail at trial. Thus, they are perceived to be ‘high costs’ claims of last resort which are pregnant with litigation risk. That is why during the first CMC in such cases, a judge is likely to order a stay for ADR, i.e. Mediation without consent.