JENNIFER YALCINKAYA v METIN HASSAN & Anor

In disputes over beneficial ownership of land, legal title is the starting point, but a party asserting different beneficial ownership bears the evidential burden. An oral arrangement may give rise to a constructive trust where the parties intended an immediate trust and it would be unconscionable for the legal owner to deny the agreed interest. Proprietary estoppel may also operate despite statutory writing requirements where the arrangement is complete, reliance is reasonable, and substantial detriment has resulted. The court must fashion the minimum equity necessary to avoid an unconscionable result. A party seeking the benefit of a bargain must perform any outstanding obligation forming part of it.

The claimant and first defendant had conducted an informal property investment arrangement involving five residential properties. The claimant contended that three properties were hers and that the defendant acted only as her agent. The defendant contended that the properties formed part of a joint venture, later dissolved by agreement when the claimant moved permanently to Turkey.

The court also determined the claimant’s related possession claim against the second defendant, who occupied one property under a tenancy granted by the first defendant. The central issues were beneficial ownership, the effect of the later oral dissolution agreement, statutory writing requirements, proprietary estoppel, and the relief required to satisfy any equity.

1. Disposition. The claimant’s claims were dismissed, save that the first defendant was ordered to pay her £7,000 plus interest. The court reserved the form of relief on the counterclaim, the interest rate and period, the remaining order, and costs.
2. Beneficial ownership and burden. Registered legal ownership was the starting point. The burden lay on the first defendant to establish a different beneficial ownership of properties registered in the claimant’s name, and to establish that the claimant’s admitted beneficial interest in 14 Kashmir Road had been transferred or relinquished.
3. Oral arrangement and constructive trust. The court found that the parties had operated a joint property venture and later agreed in 2006 or 2007 that the first defendant would retain beneficial ownership of 14 Kashmir Road, 33 Kashmir Road and 38 Highcombe. The arrangement was not merely an agency relationship. A common-intention constructive trust could arise in a quasi-commercial setting where the parties intended the trust from the outset and it would be unconscionable for the legal owner to deny the agreed interest.
4. Statutory formalities. Sections 53 and 54 of the Law of Property Act 1925 did not prevent the court giving effect to the arrangement through constructive trust principles. The arrangement concerned the creation or disposition of equitable interests rather than a contract for the sale of land. The court considered that section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 likewise did not apply. Even if it did, the case fell outside the restriction identified in Cobbe v Yeomans Row because the agreement was complete, immediately binding, and not intended to await a formal contract.
5. Proprietary estoppel. The first defendant established assurance or representation, reasonable reliance, and substantial detriment. It would be unconscionable to permit the claimant to resile after receiving substantial capital sums and allowing the defendant to treat the properties as his own for many years. The claimant was therefore estopped from asserting beneficial interests in the three remaining properties.
6. Relief. The case was not far short of a contract, so the defendant’s expectation should ordinarily be fulfilled. Equity nevertheless required him to pay the unpaid £7,000 forming part of the same bargain, together with interest.

First-instance judgment. The County Court possession proceedings were transferred to the High Court and consolidated with the claimant’s High Court proceedings by order of Master Teverson dated 29 January 2021.