Turner v Jacob

A constructive trust or proprietary estoppel requires more than a parent purchasing a property to provide a child with a home and describing it as a house bought for the child. There must be an agreement, arrangement, representation or understanding that the claimant will acquire an interest, together with reliance and detriment where required. Proprietary estoppel is concerned with unconscionability assessed in all the circumstances, and any remedy must be proportionate to the expectation and detriment. A court cannot impose a remedial constructive trust merely because it would be fair to do so. In tracing through mixed accounts, the claimant’s interest is limited by the lowest intermediate balance, subject to the rules governing investments and dissipated balances.

The claimant sought possession of a freehold property occupied by the defendant, his stepdaughter. The defendant counterclaimed for a beneficial interest in the property, relying on common intention constructive trust, proprietary estoppel and tracing. She alleged that her mother had purchased the property for her, that assurances had been made to that effect, and that money previously held for her had been applied towards the purchase. She also claimed the return of personal chattels. The central issues were whether the evidence established an agreement, representation or unconscionable reliance sufficient to affect the property, whether trust money could be traced into it, and what orders should follow.

1. Clarkfield. The claim to beneficial ownership failed. The evidence established that the deceased had bought the property to enable the defendant to leave an unsafe marital home, but not that she intended to make an outright gift or had agreed that the defendant would own it.
2. Constructive trust. The approach in Lloyds Bank v Rosset [1999] AC 107 required an agreement, arrangement or understanding that the property was to be shared beneficially, followed by reliance or detrimental alteration of position. The statement that the deceased had bought a house for the defendant was factually accurate but fell far short of that requirement.
3. Proprietary estoppel. The doctrines of constructive trust and proprietary estoppel overlap, but the defendant had not established a representation, reliance or circumstances making it unconscionable to require payment for the property. The court must consider all the circumstances, and the remedy must be proportionate to the expectation and detriment. The court had no power to impose a remedial constructive trust simply as a matter of discretion.
4. Tracing. The defendant was beneficially entitled to £75,000 arising from the earlier Fleetwood transaction, but the lowest intermediate balance in the mixed accounts was £10,339.21. That sum remained traceable through successive accounts. The rules did not establish that it had been applied to Clarkfield. If it had been invested in property, the first relevant property was Merry Acres, not Clarkfield. The resulting-trust claim therefore failed.
5. Other property and orders. The defendant failed to prove gifts of the tea service, spoons or crystal animals. Certain accepted items were to be returned, including the dressing tables and mirrors if still held by the claimant. The court would make an order for possession of Clarkfield and hear the parties on the precise form of order.

First-instance decision. No prior appellate decision is stated in the judgment.