James v Thomas [2007] EWCA Civ 1212 

Constructive Trust – Proprietary Estoppel – Cohabiting – Beneficial Interest – Common Intention - Property

Facts

The defendant, Mr Thomas, owned the cottage in dispute as the sole registered proprietor of the property. Mr Thomas had inherited this property on the death of his parents; he had subsequently bought the remaining shares from his siblings. Three years later, he had formed a relationship with the complainant, Ms James and she moved into the cottage. He also ran his business from the cottage. The complainant had worked with the defendant for his business without receiving payment. In addition, Ms James had given the defendant £5,000 towards a mortgage repayment for the house. Mr Thomas had made assurances to the complainant that she would be ‘well provided for’ in his will and that the work she carried out on the cottage would ‘benefit them both.’

Issues

The trial judge had dismissed the claim of beneficial interest under Section 14 of the Trusts of Land and Appointments of Trustee Act 1996. The appeal concerned whether the judge had erred and misunderstood when a constructive trust could arise from circumstances.

Held

The appeal was dismissed. It was held that the complainant did not have a beneficial interest in the property, as there was no common intention for a constructive trust to be created nor could there be a claim of proprietary estoppel. The assurances that her work would ‘benefit us both’ and that she would be ‘well provided for’ if something happened to Mr Thomas, were not enough to succeed with a claim for common intention. In addition, her contribution to the mortgage payment was not enough to find common intention for the property.