Proprietary estoppel – the common intention constructive trust’s underutilised cousin?

His Majesty’s Government recently released their consultation document, ‘A fairer end to relationships: consultation document’. While it deals with divorce, it also proposes giving automatic property rights to cohabitants of over three years. 

If and until the law is reform, cohabitees (and adoptive/blood relatives) have far fewer property rights compared to married spouses and civil union partners. To deal with this, the common intention constructive trust (under the Trusts of Land and Appointment of Trustees Act 1996) seems to have stepped up to fill the gap. But is it the only weapon currently in a cohabitant or family member’s arsenal?

Proprietary estoppel is a remedy that essentially stops people going back on their promises in relation to property. But how similar is this doctrine to that of constructive trusts? Is the doctrine of proprietary estoppel being underutilised? The same facts could potentially give rise to a claim under both doctrines. 

Constructive trusts

A common intention constructive trust can arise when there has been a ‘common intention’ between the parties that the beneficial ownership of the property is different to the legal ownership. Essentially, the premise is that the property may be officially registered a certain way but that the property is ‘actually’ owned in a different way. This can occur when property is in the sole name of a person but another person claims a share, or in joint names and the shares/percentage splits are in dispute. 

The seminal case is that of Jones v Kernott [2011] UKSC 53. However, the legal principles have been moulded by more recent cases, such as Hudson v Hathaway [2022] EWCA Civ 1648. In summary, the legal test is for a common intention constructive test is:

i. The law will presume that the legal interest and beneficial interests are the same;

ii. That presumption can be displaced by showing;

1. that the parties had a different common intention at the time when they acquired the property; or
2. that they later formed the common intention that their respective shares would change.

iii. The parties’ common intention is to be deduced objectively from their conduct:

iv. In cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property;

v. Each case will turn on its own fats. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended or fair; and

vi. There must be some kind of detriment.

Proprietary estoppel 

This doctrine typically consists of asserting an equitable claim against the conscience of the ‘true’ owner of property. It acts to alleviate the unfairness that would be caused by insisting on strict legal rights. 

In summary, the principles of proprietary estoppel were most recently set down by the Supreme Court in Guest v Guest [2022] UKSC 27. The court needs to determine if an ‘equity’ has arisen and how to satisfy it. For a propriety estoppel claim to arise, there needs to be:

1. A clear assurance, representation or promise by the promisor; 
2. The promisee acted in reliance on the promise; 
3. The promisee suffered detriment as a result of this reliance; and
4. And that it would be unconscionable for the promisor to resile from the promise. 

The remedy under property estoppel can be more flexible compares to constructive trusts. While constructive trusts involve defining the ownership & beneficial interests in property,  the aim of the remedy in promissory estoppel is to fulfil the claimant’s expectation of what they were promised, rather than compensating them for the exact monetary value of their detriment. 

The court has discretion to choose a different remedy that awarding an interest in the disputed property (like a cash equivalent) if it is necessary to avoid an unfair outcome. For example, it might be unfair to force an immediate sale of the farm to a child if their parents are still living there. 

Due to this wide discretion, this could result in multiple different potential remedies, such as a beneficial interest in the property, a lump sum, a life interest or even an outright transfer of the property. 

Discussion 

While there is overlap between the two doctrines, they are separate concepts. the main difference is that a beneficial interest in property can be enforced against third parties. A proprietary estoppel claim is inchoate until the court does something about it. 

Proprietary estoppel claims tend to arise more in families, often between generations. A common occurrence is when an older generation promises property to a younger generation (e.g. promising to put it in their will or give it to them during their lifetime) and the younger generation act in a certain way on the reliance that the promise will come true. However, there could be times where there was a common intention as to how certain property was ‘truly’ supposed to be owned, making a constructive trust claim a potentially more viable option. 

Constructive trust claims also often arise in divorce proceedings in relation to third parties. Often a spouse will argue that property in their name actually (at least partially) belongs to their parents, and therefore their ex-spouse does not have an entitlement. The opposite is often true; a spouse will argue that property in the name of a third party actually (at least partially) belongs to their ex-spouse, and therefore they do have an entitlement to that property. While not impossible, it seems that it will be unlikely that scenarios like this will lead to a simultaneous claim in proprietary estoppel.

That being said, a common fact scenario in relation to constructive trust claims is disputes between cohabitants. Since non-married (or non-civil union) partners have no automatic property rights (at the moment), long duration relationships that involve home ownership often result in claims as to who has contributed to the property and who is the ‘true’ owner, or what the ‘correct’ share of ownership is. If has have been a promise and reliance, a cohabitant could potentially be able to argue proprietary estoppel as well.

Conclusion

Disputes between (ex)romantic partners and family members can be difficult at the best of times. While constructive trust claims and proprietary estoppel claims tend to be more common in different common fact scenarios, litigants are potentially not utilising all the tools in the toolbox if they fail to plead both. 

While not always, there will likely be times where the particular case fall neatly into the legal tests of both doctrines. Depending on the particular fact scenario, one particular doctrine might be the stronger case, but there will likely be little to lose by pleading both. While it is impossible to predict what will happen after disclosure from the parties, let alone what might actually come out at trial, arguing both doctrines could provide a form of insurance depending on how the case progresses.

If and until the government carries out its reforms in relation to cohabitating couples, there will likely be more constructive trust and promissory estoppel claims in future. Even if the reforms do go ahead, these two doctrines may yet still have significant application. 

29th Jun 2026

Tom Gilchrist

Call 2018 (2016 - New Zealand)