Revenue and Customs Prosecution Office v Deprince & Ors Rev 1

Substantial payments towards a property do not, without more, establish a beneficial interest under a common-intention constructive trust. The inquiry is objective and concerns what was said or done indicating an intention, at or by acquisition, to confer a beneficial interest. Uncommunicated subjective intentions are irrelevant. Payments made from trust, affection or an expectation of a shared home may be insufficient where the evidence does not show an intention to grant such an interest. Proprietary estoppel also requires representations capable of founding the estoppel; later payments or general statements may fall short. Enforcement of a confiscation order may be a lawful and proportionate interference with private and family life where the alleged beneficial interest fails.

Mitzie Deprince claimed a beneficial interest in The Orchid, based on payments towards its construction and mortgage, and relied on common-intention constructive trust and proprietary estoppel. Holman J, in a judgment dated 19 May 2006, rejected the claim after finding both spouses’ evidence vague, unreliable and self-serving, and finding no express agreement or common intention.

She appealed to the Court of Appeal. She argued that her later contributions supported an inferred common intention existing at acquisition and that subsequent conduct supported proprietary estoppel. She also sought permission to raise Convention arguments based on delay in confiscation enforcement. The central issues were whether the evidence established a beneficial interest and whether the proposed Convention ground was arguable.

Appeal dismissed unanimously. The Court of Appeal upheld the refusal to find a beneficial interest. Permission to introduce the Convention ground and permission to appeal to the House of Lords were refused.

1. Common-intention constructive trust. The inquiry was objective. The court had to identify, by ordinary objective standards, something said or done in the parties’ relationship indicating an intention, at or by acquisition, to give the claimant a beneficial interest. An uncommunicated subjective intention was irrelevant, applying the approach in Gissing v Gissing [1971] AC 886. Rix LJ considered that Holman J had erred to the extent that he relied on Mr Deprince’s subjective intentions, but held that the conclusion was independently supported by the evidence. Lloyd LJ agreed, reading the critical finding as a conclusion from the evidential review.
2. The alleged routes to a constructive trust failed. No express agreement or arrangement could be accepted because the spouses’ accounts differed and the judge rejected both. Contributions could support an inference in an appropriate case, but the evidence here did not establish an intention existing at acquisition. The court accepted that substantial payments had been made, but found that they were made from trust and affection, and in expectation of a shared home, rather than pursuant to an understanding that a beneficial interest was being granted. The late claim, the sister’s occupation and mortgage payments, and the uncertain accounts of mortgage funding reinforced the conclusion.
3. Proprietary estoppel. Without evidence of an intention to share the beneficial interest at acquisition, later conduct or general statements made it especially difficult to establish representations capable of founding an estoppel. The evidence fell far short of the representations illustrated by Gillett v Holt [2001] Ch 210. The proprietary-estoppel case therefore failed.
4. Convention ground. The proposed Articles 6 and 8 arguments based on delay were not arguable. The later 18-month delay principally concerned Mr Deprince, the property would in any event have had to be sold to satisfy the confiscation order, and enforcement was a lawful and proportionate response. Sir Anthony Clarke MR recorded initial doubts about the objective inference but concurred in the result.

• Court of Appeal (Civil Division): Appeal dismissed. Permission to introduce the Convention ground and permission to appeal to the House of Lords refused.
• High Court of Justice, Queen’s Bench Division, Administrative Court: Holman J rejected the claim to a beneficial interest in The Orchid in a judgment dated 19 May 2006.