Aspden v Elvy

In a sole-name case, a claimant seeking a beneficial interest must establish an implied trust, normally by proving an objectively assessed common intention. That intention may arise or change after acquisition and may be inferred from the parties’ whole course of dealing, including substantial financial and physical contributions to later works. If the parties’ shares are not ascertainable, the court assesses what is fair in that context.

Proprietary estoppel requires an assurance or representation, reasonable reliance and substantial detriment. The remedy must be principled and proportionate to the claimant’s expectation and detriment.

The claimant and defendant were former cohabitants. The claimant was the registered proprietor of Outlaithe Farm, including Outlaithe Barn, acquired in 1986. In January 2006 he transferred Outlaithe Barn to the defendant, who became its registered proprietor. The parties later converted the barn into a dwelling.

The claimant alleged that he retained or acquired a beneficial interest through a common intention constructive trust and, alternatively, proprietary estoppel. He had carried out substantial labour and contributed approximately £65,000 to £70,000 towards the conversion. The defendant contended that the transfer was outright and that the payments were gifts. The central issues were whether the claimant acquired an interest after the transfer and, if so, its extent.

1. Outcome. The court declared that Outlaithe Barn was held by the defendant as to 75% for herself and 25% for the claimant.
2. Under the approach in Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2011] 3 WLR 1121, a claimant whose name is absent from the proprietorship register must establish an implied trust, normally a common intention constructive trust. The parties’ intention is objectively assessed from their words and conduct.
3. A common intention may arise or change after acquisition. Although the court is cautious before inferring a variation of existing beneficial interests from conduct alone, substantial expenditure and work on a property may support that inference. The relevant assessment must consider the whole course of dealing.
4. The transfer in January 2006 was intended to transfer the claimant’s entire legal and beneficial interest in Outlaithe Barn. The later contributions were nevertheless not gifts. Their scale, the claimant’s expectation of living in the barn, and the defendant’s knowledge of that expectation justified inferring a common intention that he should acquire an interest.
5. There were no express discussions fixing the claimant’s share. The court therefore imputed an intention by reference to what was fair having regard to the whole course of dealing. A 25% interest represented a fair return for the claimant’s financial contribution and labour.
6. Alternatively, proprietary estoppel was established. The defendant encouraged the claimant to undertake the works and invest substantial sums, knowing that he expected to live in and have an interest in the barn. An equity consequently arose. Applying Thorner v Major [2009] 1 WLR 776 and Jennings v Rice [2003] 1 P & C R 8, a 25% share was proportionate to the expectation and detriment.

The proceedings were commenced in the County Court in March 2011, transferred to the High Court, and tried over three days in April 2012. No appeal decision is stated.