London Borough of Brent v Johnson & Ors

A local authority acquiring land for community facilities with public funding may hold the land beneficially for its statutory purposes, even where the project has charitable purposes and was promoted by a community organisation. Charitable purposes do not, without more, establish a charitable trust. An intention to create a trust must be shown.

A resulting trust requires an actual contribution to the purchase price. A Pallant v Morgan equity requires a sufficiently clear pre-acquisition arrangement or understanding, reliance, and circumstances making it inequitable for the acquiring party to retain the property inconsistently with that arrangement. Proprietary estoppel likewise requires a sufficiently clear assurance, reasonable reliance and detriment. Promissory estoppel cannot be used to create a beneficial interest in land.

The claimant local authority acquired Bridge Park in 1982 for £1.8 million, using its own funds and grants from public bodies. The project had been promoted by the Harlesden Peoples Community Council, an unincorporated association, which sought to establish a community-managed centre.

The defendants claimed beneficial interests under resulting and constructive trusts, proprietary estoppel, promissory estoppel and estoppel by convention. They also argued that the property was held on charitable trust. The proceedings arose after the first defendant applied for a restriction against the registered title to prevent the claimant’s proposed redevelopment and sale of part of the site.

The central issues were whether the defendants had standing to protect any proprietary interest and whether the claimant was the sole legal and beneficial owner.

1. Disposition. The claimant was declared to be the sole legal and beneficial owner of Bridge Park. The defendants were restrained from making any application to register a restriction against the property.
2. Standing. An unincorporated association has no legal personality and cannot itself hold a beneficial interest under an implied resulting or constructive trust. The first defendant had no sufficient interest to apply for a restriction on behalf of the association. The second defendant could not acquire an interest which the association did not own. The purported transfer was therefore ineffective.
3. Resulting trust. The grants were made to and received by the claimant for the acquisition and development project. They were not contributions made by the association to the purchase price. Since the association made no actual contribution to the acquisition cost, no resulting trust arose.
4. Constructive trust. The only potentially relevant doctrine was a Pallant v Morgan equity. It required a pre-acquisition arrangement or understanding that the acquiring party would obtain the property and that the other party would obtain an interest in it. No such sufficiently clear arrangement existed. The proposed lease and possible future purchase of the freehold were aspirations, not binding or sufficiently certain arrangements. The proposed amended case therefore disclosed no reasonably arguable constructive trust.
5. Proprietary estoppel. The defendants failed to establish any credible assurance by the claimant that the freehold, or a lease with an option to purchase it, would be granted. They also failed to establish relevant detriment causally linked to any assurance. The community’s involvement in developing the project did not amount to detrimental reliance giving rise to a proprietary interest.
6. Alternative estoppels. Promissory estoppel operates defensively and cannot itself create a cause of action or beneficial interest. It also requires an existing legal relationship. No such relationship was shown. Estoppel by convention failed because there was no sufficiently precise shared assumption, relevant reliance or unconscionability.
7. Charitable trust. The fact that land is acquired or used for charitable purposes does not establish a charitable trust. The prior question is whether the owner intended to hold the land on trust. The transfer deed and contemporaneous documents showed acquisition by the claimant under its statutory powers, without an intention to create a trust. The property was therefore held beneficially by the claimant for its statutory purposes.
8. The injunction was reformulated so as to restrain the defendants, rather than the Registrar, from making further applications to register restrictions.

1. High Court (Chancery Division): earlier interlocutory decisions included [2019] EWHC 681 (Ch) and [2019] EWHC 2217 (Ch). Those decisions concerned the defendants’ pleaded private and charitable trust arguments.
2. High Court (Chancery Division): the defendants’ appeal concerning the charitable trust arguments was allowed by Birss J in [2020] EWHC 933 (Ch), resulting in the Attorney General being joined and taking a neutral position.
3. High Court (Chancery Division): after trial, the present judgment declared the claimant sole legal and beneficial owner and granted the amended injunction.