ALHILFI & Anor v HUSSAIN & Ors

Permission to amend a statement of case introducing a new claim is governed by the law as it stands. The court applies the first limb of Rule 24.2: the proposed claim must have a real, rather than fanciful, prospect of success. The court may resolve short legal issues and reject obviously unsustainable pleaded facts, but must avoid a mini-trial.

A common intention constructive trust based on an oral agreement requires an agreement sufficiently certain to identify the relevant property or property interests. Future property may be covered, but it must be identifiable with reasonable precision. Where essential terms remain uncertain or are left for future agreement, reliance, detriment and unconscionability cannot found the trust.

The claimants applied to amend their particulars of claim. One claimant sought proprietary relief concerning shares and interests in properties, relying principally on an alleged oral agreement giving him a beneficial interest and on a common intention constructive trust. The defendants opposed that part of the amendment, arguing that the pleaded case was incoherent and had no real prospect of success.

The court considered whether the proposed constructive trust claim was sufficiently coherent factually and legally, including whether the alleged agreement identified the relevant properties with sufficient certainty and whether an oral agreement could support a constructive trust despite the absence of a formal agreement.

1. Amendment test. The application introduced a new claim and therefore had to be tested under the first limb of Rule 24.2. The court applied the principles summarised in Easy Air v Opel Telecom [2009] EWHC 339 (Ch). The proposed claim had to be realistic and more than merely arguable. The court could resolve short legal issues and reject obviously unsustainable pleaded facts, but could not conduct a mini-trial or determine contentious factual disputes.
2. Constructive trust. Following the summary in Dowding v Matchmove Ltd [2017] 1 WLR 749, a common intention constructive trust based on an express agreement requires an agreement as to ownership, reliance, detriment, and circumstances making it unconscionable for the defendant to deny the claimant’s ownership.
3. There was no difficulty in principle in a landowner agreeing to confer a beneficial interest without complying with Law of Property (Miscellaneous Provisions) Act 1989, section 2, where the agreement was sufficiently clear and detriment was suffered. James v Thomas [2007] EWCA Civ 121 supported that conclusion.
4. Whether an oral agreement intended to be followed by a formal agreement could found a constructive trust depended on the parties’ intentions and would usually be a matter for trial. However, the agreement still had to attain sufficient certainty or completeness. Herbert v Doyle [2010] EWCA Civ 1095, in its analysis of Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752, supported that approach.
5. The pleaded agreement failed that requirement. The document relied upon did not identify the properties, and the categories of future or otherwise unidentified property were vague. The oral agreement therefore lacked the certainty required for a binding contract and, even assuming a lower threshold, for a constructive trust. The constructive trust amendment had no real prospect of success and permission was refused for it. Permission was granted for the remaining non-objectionable amendments.

not stated in the judgment.