Property analysis: Discussing the judgment in Culliford and another v Thorpe, Simon Painter, partner and head of property litigation at Bircham Dyson Bell, and Helen Fry, a solicitor in the firm’s litigation and dispute resolution department, say the case provides an example of how the doctrines of common intention constructive trust and proprietary estoppel can be successfully argued in the 21st century.
What are the practical implications of this case?
The overriding concern with equity in cases such as this requires, according to HHJ Paul Matthews (sitting as a judge in the High Court), a more pragmatic approach. That includes a flexible reading of the authorities. For example, the suggestion in Lloyds Bank plc v Rosset  1 AC 107,  1 All ER 1111, that anything short of joint mortgage payments is unlikely to give rise to a common intention constructive trust is rejected, on the basis that ‘the world has moved on since then’.
The decision emphasises the danger of taking an overly ‘contractual’ approach to claims rooted in equitable principles. The claimants raised a series of evidential and technical issues – for example, arguing that a misunderstanding on the defendant’s part regarding the extent of his own property invalidated his agreement with the deceased to pool their assets – which did not go to the underlying issue of unconscionability, and those arguments did not find favour with HHJ Matthews.
The judgment also provides an example of a modern approach to some of the evidence. The absence of conventional documentary evidence relating to the refurbishment works the defendant had carried out, for example, was not considered to be detrimental to his case, given that ‘in the modern world, few people [keep receipts]’. Evidence derived from Facebook played a particularly interesting role, with the defendant successfully relying on chat messages and relationship status updates to document his relationship history with the deceased. However, the limitations of evidence from social media was also apparent, in that the claimants’ evidence derived from Facebook updates regarding the deceased’s final years (including his renovation projects) was given little weight.
What was the background?
The deceased and the defendant were in a relationship from 2010 until the deceased’s death in December 2016. To start with, the defendant was largely financially dependent on the deceased, living with him in his Weston-super-Mare property rent-free.
After his father’s death in 2012, however, the defendant believed – mistakenly, as it turned out – that he had inherited significant assets from him, including property. Believing their financial positions to have equalised, the couple agreed that the time had come for them to ‘join forces properly’, sharing their properties and other assets. They decided to embark on an extensive refurbishment of both the Weston property (which they planned to rent out) and the property the defendant believed he had inherited (which they planned to live in), with the majority of the work undertaken by the defendant himself.
The deceased died intestate in December 2016. The claimants (the deceased’s siblings and the personal representatives of his estate) instigated possession proceedings in respect of the Weston property, having been denied entry by the defendant. The defendant counter-claimed for a declaration of interest in the Weston property by virtue of a common intention constructive trust and/or proprietary estoppel.
What did the court decide?
HHJ Matthews found that the defendant’s counter-claim succeeded on both fronts, and that he was accordingly the beneficial owner of 50% of the Weston property.
HHJ Matthews concluded that the facts of the case – namely the ‘joining forces’ discussion and the extensive renovation works subsequently undertaken by the defendant – fulfilled the criteria for both a common intention constructive trust (an agreement or arrangement to share the property in question, and detrimental reliance on that agreement by the party asserting a beneficial interest) and proprietary estoppel (an assurance made to the party asserting a beneficial interest, and detrimental reliance on it).
He emphasised that the two doctrines spring from the same source, and both have at their heart the question of unconscionability – that is, the question of whether it would be inequitable to deny the claiming party a share. In this case, focusing on the underlying question of unconscionability led to the clear conclusion that the defendant was entitled to a share of the Weston property.
A common intention constructive trust having been established, it was held that the Weston property was to be treated as having been held by the deceased on trust for himself and the defendant in equal shares. It was accordingly not necessary for HHJ Matthews to delve into the debate surrounding the proper remedy in cases founded solely on proprietary estoppel, namely, whether the sums awarded should satisfy the claiming party’s expectation, or merely compensate him for his detrimental reliance on it. HHJ Matthews indicated, however, that had he needed to decide the point, he would have taken the former (more generous) approach.