Gaspar v Zaleski & Ors

A declaration of trust must be construed objectively. Where it sets out the beneficial ownership completely, a prior agreement cannot alter that ownership unless the interests are subsequently varied by deed, common intention constructive trust or proprietary estoppel. In an investment purchase, there is no presumption that the parties are beneficial joint tenants or hold equally. An express agreement about beneficial ownership is determined from the evidence rather than by imputing intention from the parties’ dealings. Proprietary estoppel requires a clear representation concerning the claimant’s existing or future property rights. A statement that a person will not contribute is insufficient to establish that she has renounced an existing beneficial interest.

Isabelle Gaspar claimed a beneficial interest in 28 Stanley Road, which was legally owned by Mido and Antonina Kabbani. A 2008 declaration of trust was executed by the Kabbanis, Mark Zaleski and Ms Gaspar. Mr Zaleski later acquired the Kabbanis’ interests under a 2009 declaration of trust, which did not mention Ms Gaspar.

The dispute concerned the construction of the 2008 deed, the parties’ prior agreement about beneficial ownership, and whether later events created a constructive trust or proprietary estoppel. The court also considered equitable accounting and an order for sale.

1. Construction of the 2008 Trust Deed. The court applied the objective approach to construction stated in Wood v Capita Insurance Services Ltd [2017] UKSC 24. The factual background known to the parties could be considered, but prior negotiations and subjective intentions could not. The deed was imperfectly drafted, but its natural effect was to confer interests on the four named individuals, not merely on the two married couples. The trustees were required to redeem the mortgage, repay the £450,000 contribution to Mark and Isabelle, and divide the remaining profit equally. Isabelle therefore had an interest consisting of £225,000 and one quarter of the profit.
2. The deed completely disposed of the beneficial ownership. The prior agreement was therefore irrelevant to the outcome unless a later constructive trust or proprietary estoppel altered the position. A constructive trust based on an alleged agreement that Isabelle would contribute could not operate simultaneously with the express trust so as to defeat the principle in Goodman v Gallant [1986] Fam 106.
3. Because the purchase was an investment rather than a family home, the presumptions and broad course-of-dealings analysis discussed in Stack v Dowden [2007] UKHL 17 were inapplicable. Consistently with Laskar v Laskar [2008] EWCA Civ 347, there was no presumption of equality. Here, however, the evidence established an express agreement that Mark would provide the £450,000 for both parties and that they would have equal interests.
4. There was no proprietary estoppel. Mark’s purchase of the Kabbanis’ interests could amount to detriment, but there was no clear representation that Isabelle had renounced her share or would transfer it. A statement that she would not contribute, or that she was not interested, did not satisfy that requirement.
5. The court declared that Isabelle had held a beneficial interest since 4 January 2008. An account was ordered to address expenditure, rent and other use of the property. The court also ordered a sale.