Clarke v Meadus

An express declaration of trust does not make beneficial interests immutable. Later promises or representations may give rise to a proprietary estoppel capable of overriding those interests. On a summary judgment or strike-out application, the court must assume pleaded facts that are not plainly unsustainable and must not conduct a mini-trial. Detriment is assessed as part of the broad inquiry into whether it would be unconscionable for the promisor to resile. The court must consider the whole history, including benefits received and the nature and extent of the claimant’s change of position. Such evaluation, and the resulting equity, will ordinarily require a trial.

The appellant claimed the entire beneficial interest in Bonavista, property registered in the joint names of herself and her mother. She relied alternatively on proprietary estoppel and a constructive trust, alleging repeated promises that the property would ultimately pass to her. In 1996, inheritance-tax planning arrangements transferred a half share to her and declared express trusts concerning the property. She later alleged further assurances, reliance, care and expenditure, and the sale of her Kent home.

The Master granted summary judgment on the proprietary-estoppel claim and struck out the constructive-trust claim. The appellant appealed and sought permission to re-amend her pleading. The central issues were whether the express trusts precluded either equitable claim, whether detriment and reliance could properly be determined summarily, and whether the proposed additional assurance was arguable.

1. Appeal allowed. The orders granting summary judgment and striking out parts of the Amended Particulars of Claim were set aside.
2. The relief sought was not defective merely because it appeared to claim more than might ultimately be awarded. In a proprietary-estoppel claim, the court can mould the remedy once the facts are established. A claim for alternative shares and further relief was sufficient to permit consideration of a lesser equity.
3. An express declaration of trust does not prevent a later proprietary estoppel from arising. If the alleged post-1996 assurance was made, relied upon through the sale of the Kent property, and resulted in legally recognised detriment, the appellant had a well-arguable claim to an interest beyond her existing half share.
4. The Master had not properly analysed the alleged detriment. The question was not suitable for summary determination because it involved disputed evidence, the appellant’s change of position, unpaid care and time, financial expenditure, and benefits connected with the property. The assessment had to consider the whole history and whether it was unconscionable for the respondent to resile from the promises.
5. The 1996 transactions did not necessarily satisfy or extinguish the earlier promises. They could be viewed as part of tax planning consistent with the promised eventual transfer of the remaining share. The appellant’s case became stronger once she had sold her Kent home and irrevocably committed herself to Bonavista.
6. The constructive-trust claim should also proceed. Although the availability of a remedial constructive trust remained a matter for determination at trial, the authorities did not make the claim legally impossible, and it was inappropriate to strike it out where the proprietary-estoppel claim was arguable.
7. Permission was granted to re-amend the pleading in the form proposed. Costs, including the costs consequences of the amendment and the appeal, were left for further submissions.

• High Court (Chancery Division): allowed the appeal from the Master’s order dated 7 April 2010, set aside the summary judgment and strike-out orders, and permitted re-amendment.