Guided by Thorner v Major & Others
Abstract
The
current paper will seek to analyze the decision of Thorner v Major & others in extenso.
In analyzing this Appellate decision the writer will address an array of
issues, these will include but not limited to; a summary of the facts of the
case, what proprietary estoppel is, what (remedial) constructive trust is, the
differences and similarities thereof of the two, their applicability to the
case, Lord Scott’s previous decisions relating to the two doctrines and lastly
the writer will critique/concur with Lord Scott of Foscote
Summary of the case
The
facts of the case are straightforward, David the nephew to Peter, for about
thirty years did substantial work with no pay on his uncles farm and on many
occasions his uncle who did not have a wife or child kept on making implied
assertions that David would one day inherit the farm, this included the giving
him an insurance policy bonus titled for my death duties[1]
and remarks such as put this documents here so that when he is gone David would
not have a hard time locating them[2].
Peter’s representation’s consistent of these oblique remarks from time to time.
Peter however, died with no will. His personal representatives denied David’s
equitable title to the Steart farm. The Trial Court found in favor David on the
basis of proprietary estoppel, the Court of Appeal reversed the ruling and
lastly the honourable House of Lords affirmed the Trial Court’s decision. The
bone of contention is brought about by a particular statement made by Lord
Scott of Foscote[3]
is the bone of contention. He was of the isolated opinion that the doctrine of
proprietary estoppel should be limited to cases of representations that are
unconditional and of future benefits and lastly accommodative of unforeseen
consequences via a remedial constructive trust[4].
What is Proprietary estoppel?
This
is the doctrine of equity that intervenes to mitigate harsh rules of statutory
requirements and creates an interest in land[5].
The criterion for the doctrine is four fold; there must be an assurance giving
rise to an expectation in the claimant that he would receive an interest in
land, reliance on the assurance, detriment and lastly unconscionable conduct if
the assurer were to go back on his word[6].
All the Lords except Lord Scott were of the unanimous view that indeed a basis
for proprietary estoppel had been established by David. The passive assurances
that peter gave David had met the threshold, David had worked for 30 years for
no pay and did not pursue other work activities: this constituted detrimental
reliance and lastly the fact that the executors of Peter’s estate denied peters
title to the land was unconscionable conduct.
The
best illustration of this doctrine is to be found in the decision of Gillet v
Holt[7]. A
man named Gillet met Holt when he was 12 at a golf spa and became his caddie,
he worked for over 38 years and on separate occasion Holt hinted to Gillet that
all his property would one day be his, Gillet had even moved into one of the
properties. Holt had Gillet’s name in his will but later revoked the will and
tried to eject Gillet from the property in favor of another person. Gillet
moved to Court on the basis of proprietary estoppel and the court of second
instance found that the claim was meritorious. Holt had made assurances, as a
result Gillet relied on them and moved into one of his properties and further
he did not pursue any other opportunities as and when they arose, he also
worked for low pay for 38 years, as a result the Court, L.J Walker presiding,
held that it would be unconscionable for Holt to be allowed to go back on his
word. The judge further noted that when considering the doctrine the matter
must be looked at in the round, a broad approach the writer notes.
Constructive
trusts
It
is in fact that constructive trusts have existed for more than two centuries[8].
It has evolved to a point of inexactitude, it is a trust imposed by law when
justice and good conscience requires, further it is founded upon the broad
principles of equity[9].
It may occur regardless of any party’s intent; the law imposes an obligation on
a party to hold specific property for another. The principle of unjust
enrichment lies at the heart of constructive trust. It occurs in instances
where someone may obtain money illegally or by fraud the law imposes on him an
obligation to hold the money for the rightful person for example secret profits[10].
It also mostly applies to matrimonial and cohabitation cases
In
the decision of Baumgartner v Baumgartner[11]a
couple moved in together to a house bought by the man in his own name, the
woman provided the man with her pay packet and the man used this money to buy
furniture and pay off mortgage. Upon breakdown of their relationship the woman
argued that she had a share in the house the man denied asserting his sole
legal title. The court ruled that the test in applying a constructive test is
that ‘is it unconscionable not to impose a trust?’ which the court found in the
positive and imposed a constructive trust asserting the woman’s share in the
house title.
Remedial constructive trust
According
to Roscoe pound the view that constructive trusts and remedial constructive
trusts were different was erroneous[12],
this is because constructive trusts was functionally speaking, a remedy[13].
Judge Deane, ruling on whether a constructive trust was a remedial or an
institutional opined that it is a remedial institution[14]thus
a remedial constructive trust is when a constructive trust is used as a remedy.
The
elements of the doctrine are that it must be the remedy of last resort,
potential impact of the remedy on third parties must be considered[15]it
must be unconscionable to not impose the constructive trust[16],
the legal title holder insistence on his title must be unfair.
Application
of the Doctrine of remedial constructive trust to the case of Thorner v Major and others. It must be
noted that the doctrine does not strictly apply. David relied on Peter’s representation
and worked unpaid for many years, Peter passed without leaving a will, now his
personal representatives are denying David’s equitable title and this is
unconscionable putting into mind the sacrifice David put in and his reliance.
Is it a remedy of last resort? Given the complexities of the case, the fact
that David has worked for over 30 years unpaid and he did not pursue any other
opportunities, a remuneration may be ordered but how exactly does the court
start calculating remuneration for 30 years and take into mind that the farm
size kept on changing over the years. It is therefore posited that this is an
appropriate remedy of last resort. What is its potential impact on 3rd
parties? Given the fact that David had no wife and no children there seems to
be no serious 3rd parties that need be consulted. Does the principle
of unjust enrichment apply? The personal representatives have denied David’s
equitable title and whoever will stand to benefit whether it’s a closer next of
kin than David will benefit unjustly this is because David has worked for 30
years on the assurances of inheriting the farm, it is even recorded in the case
that he greatly contributed to the improvement of the farm, thus for another
party to enjoy the fruits of David’s labour would be an insult to justice,
however unjust enrichment is not the rationale for this type of constructive
trust It is therefore posited that as at now the personal representatives hold
land in trust for David.
Similarities between Constructive
Trust and Proprietary Estoppel
The
two doctrines overlap each other as the same facts may give rise to recognition
of a constructive trust or an award of proprietary estoppel. This has led to
the enquiry of whether there is any substantive difference between the two doctrines.
However, it is not unusual for a claimant to have two claims on the same facts[17]
Differences
Lord
Hope deciding in Stark v Dowden[18]stated
that the two doctrines are different in approach and outcome. He eloquently
asserted that proprietary estoppel consists of asserting a mere equitable claim
against the conscience of the true owner, satisfied by the minimum award that
necessitates justice whereas in a constructive trust consists of establishing a
beneficial owner and the size of his beneficial interest.
Under
a constructive trust I becomes binding when a common intention is acted upon
and ay bind third parties with shares in the property whereas proprietary
estoppel becomes binding only after a court awards it.
Lord Scott
Lord
Scott referred to the remedial constructive trust as being more of an
appropriate remedy because the oblique remarks were in his view shaky in order
to establish a claim under proprietary estoppel because what would be required
according to some scholars are unequivocal and definite assurances not oblique
remarks. This is to not dispute the test which is what the effect of the
assurances on the plaintiff mind ’? The fact that constructive trust may be
used as a remedy for proprietary estoppel is beyond doubt[19].
Lord
Scott in Cobbe v Yeoman's Row Management
Ltd[20]
stated that for a basis of estoppel to succeed it must be clear, clarity in the
object being estopped and clarity as to the interest in the specific property.
And further that we should look at the expectations of the landowner who is
being estopped and not just the claimant who has been unconscionably denied, so
for Lord Scott to prefer constructive trust over proprietary estoppel in the
matter he was probably influenced by the school of thought that does not see or
want proprietary estoppel to be some sort of penicillin for equity, a remedy
for all claimants without legal title, this would curb the flood gates.
Lord
Scott in essence was moving away from the flexible approach to proprietary
estoppel and tried to curtail it, he is of the view and this is evident in his
previous decisions that statutory formal rules of creating property rights are
certain and estoppel had gone too far.
Critique of Lord Scott
The
essence of estoppel is to remedy unconscionability and not a means of enforcing
contract or agreements as such it is illogic to require the same amount of
certainty in both fields. The owl of Minerva spreads its wings and flies at
dusk, estoppel is considered after the conduct has already occurred. So for
estoppel to remain effective as a remedy it must remain flexible[21]
Bibliography
Books and Articles
1. Z.
M. Al-Aqaileh, The English Law Doctrine
of Proprietory estoppel, Journal of Sharia and Law, U.A.E university
2. J. Poole, Casebook
on Contract Law, 8th edn (2006) , Oxford Press
3. R.
Pound, ‘The Progress of the Law
1918-1919’ (1920) 33 Harvard Law Review
4. M. Brian, ‘What Exactly is a Remedial Constructive Trust?
5. R.
Pearce & W. Bar, The Law on Trusts
and Equitable Obligations, Oxford Press, 5th edn, 2006
Cases
1.
Thorner
v Major & others
2. Hussey v Palmer
(1972) 3 All E.R. 70 (CA)
3. Boardman v Phipps,
P.192;
4. Rhodes v Macalister
(1923) 29 Com. Case. 19
5. Muschinski v Dodds
(1985) 160 CLR 583 (H.C.A)
6. John Alexander’s Clubs Pty Ltd v
White City Tennis Club Ltd [2010] HCA 19
7. Basham -v- Basham
[1986] 1 WLR 1498
8. Walton v Walton
9.
Gillet
v Holt
Internet sources
https://www.youtube.com/watch?v=dF8SphIbtsE
[1] P.
7, Thorner v Major & others
[2] P.
2, Thorner v Major & others
[4] P.
14,
[5] Z.
M. Al-Aqaileh, The English Law Doctrine of Proprietory estoppel, Journal of Sharia and Law, U.A.E university, p.1
[6] J.
Poole, Casebook on Contract Law, 8th
edn (2006) , Oxford Press, P. 165
[7] [2001]
Ch 210
[9] Lord
Denning in Hussey v Palmer (1972) 3
All E.R. 70 (CA)
[10]
Lord Phips, Boardman v Phipps, P.192;
See also Lord Scruton, Rhodes v
Macalister (1923) 29 Com. Case. 19
[11] (1987)
164 CLR 137
[12] R.
Pound, ‘The Progress of the Law 1918-1919’
(1920) 33 Harvard Law Review 420, 420-421.
[13]
M. Brian, ‘What Exactly is a Remedial
Constructive Trust?’ P.8
[14] Muschinski v Dodds (1985) 160 CLR 583
(H.C.A)
[15] John Alexander’s Clubs Pty Ltd v White City
Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR
[16]
Ibid note 11
[17]
R. Pearce & W. Bar, The Law on Trusts
and Equitable Obligations, Oxford Press, 5th edn, 2006, P.334
[18] [2007]
UKHL 17
[19]
QC Edward Nugee in Basham -v- Basham
[1986] 1 WLR 1498
[20]
[2008] UKHL 55
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