McGuinness v Preece & Ors

Proprietary estoppel requires an assurance that is sufficiently clear in its factual context, reasonable reliance on that assurance, and detriment resulting from the reliance. General encouragement, expressions of future benefit and ambiguous statements do not suffice. A constructive trust based on common intention similarly requires an agreement, arrangement or understanding that the claimant will acquire a beneficial interest, together with detrimental reliance. A gift of a chattel requires delivery of possession. Where land is occupied and used by a business, adverse possession may be attributed to the business owner rather than an individual worker.

The claimant, David McGuinness, claimed ownership of part of a family business site and beneficial interests in the wider site through proprietary estoppel and constructive trust principles. He also claimed separate land, a grandfather clock and a vintage lorry. The defendants disputed those claims and counterclaimed for mesne profits in relation to the company’s occupation of the land.

The principal issues were whether David or another family member had acquired part of the site by purchase or adverse possession; whether statements and conduct by his father created an enforceable assurance or common intention concerning the site; whether the estoppel or trust claims extended to separate land; and whether title to the clock and lorry had passed to David.

1. Plot 3. The evidence did not establish that David, his grandfather or his father had purchased Plot 3. The use of the plot for the family business, together with fencing arranged and paid for by Fred, indicated that any adverse possession was Fred’s. David therefore failed to establish title to Plot 3.
2. Proprietary estoppel. The relevant assurance must be sufficiently clear in context. The court applied the approach in Thorner v Major [2009] UKHL 18, including the need for practical and contextual assessment. Statements about selling the business, sorting out the land later, pensions, deeds, or working for the family did not amount to a clear assurance that the Yard would be transferred to the children. In any event, David had not shown detrimental reliance.
3. Constructive trust. The evidence did not demonstrate an agreement, arrangement or understanding that David would acquire a beneficial interest in the Yard, nor detrimental reliance of the kind discussed in Lloyds Bank plc v Rosset [1991] 1 AC 107. The proprietary estoppel and constructive trust claims therefore failed.
4. The claims did not extend to the Whitfield Road land. It was separate from the Yard, had not been used by the business and had been jointly owned by Fred and Edith.
5. Chattels. Applying In re Cole [1964] Ch 175, the grandfather clock had not been delivered and the alleged gift was ineffective. The evidence did, however, establish that David bought the Morris lorry, so an order for its delivery up was made.
6. The claim otherwise failed. Declaratory relief was granted in accordance with the defendants’ counterclaim, and the court considered it appropriate to order payment of a specified sum for mesne profits against the company.