Pascoe v Turner

An informal promise to give land does not itself perfect a gift or establish a constructive trust. A proprietary estoppel may nevertheless arise where the legal owner encourages or knowingly acquiesces in another person’s detrimental expenditure and labour in reliance on an assurance that the property is theirs.

The court must examine all the circumstances and grant the minimum equity needed to do justice. The remedy must provide effective protection and may require the owner to perfect the promised gift where a lesser remedy, such as a personal licence, would leave the claimant’s expected security and enjoyment inadequately protected.

The plaintiff sought possession of a house occupied by the defendant, with whom he had formerly lived. The deputy circuit judge dismissed the possession claim and declared that the plaintiff held the house on trust for the defendant and that its contents belonged to her.

The plaintiff appealed. The Court of Appeal considered whether the evidence established a trust, whether the plaintiff was estopped from asserting his legal title, what relief was required to satisfy any resulting equity, and whether the contents had been transferred by gift. The defendant had improved and repaired the house using a substantial part of her limited capital after the plaintiff repeatedly assured her that the house and its contents were hers.

Appeal dismissed, save that the order below was varied. Cumming-Bruce LJ delivered the judgment of the court.

1. The plaintiff’s oral declarations did not create an express trust of the house. Nor did the parties’ words and conduct provide a basis for inferring a constructive trust. Subject to the proprietary estoppel arising from later events, the declarations amounted only to an imperfect gift which equity would not perfect.

2. A proprietary estoppel arose from the plaintiff’s encouragement and acquiescence. The defendant believed the house had been given to her and, with the plaintiff’s knowledge, encouragement and advice, expended a substantial part of her remaining capital and her own labour on repairs and improvements. Proprietary estoppel of this kind gives rise to a cause of action and may be used as a sword rather than merely as a shield.

3. The court had to consider all the circumstances and determine the minimum equity required to do justice, having regard to the detriment caused by the legal owner’s encouragement and acquiescence. Although the defendant’s expenditure was modest when compared with expenditure in some earlier cases, it was substantial relative to her limited resources. Her purchase of furnishings and the arrangement of her affairs on the footing that the property was hers formed part of the relevant circumstances.

4. A lifetime licence would not adequately satisfy the equity. It would not be registrable as a land charge, could leave the defendant vulnerable to a purchaser for value without notice, and would impair her ability to finance future repairs by charging the property. It would also expose her quiet enjoyment to interference by the plaintiff, whose conduct demonstrated a continuing determination to evict her.

5. Effective protection required security of tenure, quiet enjoyment and freedom to repair and improve the house. The plaintiff was therefore required to perfect the promised gift. The declaration of a constructive trust was revoked and replaced by a declaration that the fee simple was vested in the defendant. The plaintiff was ordered to execute a conveyance at his expense.

6. The gift of the contents was complete. The defendant already possessed them as bailee when the plaintiff clearly declared that they were hers. Her later return of some items did not invalidate the original gift.

1. Court of Appeal: Dismissed the plaintiff’s appeal, but revoked the declaration that he held the house on trust. It declared the fee simple vested in the defendant and ordered the plaintiff to convey it to her. Leave to appeal to the House of Lords was refused.
2. Camborne and Redruth County Court: The deputy circuit judge dismissed the plaintiff’s possession claim and declared that he held the house on trust for the defendant and that the contents belonged to her.