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Express trusts - a cautionary tale

A properly executed deed of trust is generally conclusive of the beneficial rights subsisting under a trust of land.

 The law permits few exceptions to this general rule - rescission for fraud or mistake, or rectification to give effect to the intentions that the parties had at the date of the transaction, but which were only imperfectly expressed or not at all. 

A recent departure from the general rule is provided by Clarke v Meadus [2010] EWHC 3117. Although only an appeal from an order striking out the claimant’s claim, the issue was whether supervening events could override an express declaration of trust. 

The claimant (C) and the defendant (M) are daughter and mother respectively. In 1996, they executed a declaration of trust over land in equal shares. C alleged that, shortly thereafter, M executed a will leaving her 50% share of the property to C. She contended that, in reliance on further assurances about her inheritance of M’s half share, she sold a house and moved into the subject property. 

In 2006 M changed her will and left her half share to C’s sister. C brought a claim alleging proprietary estoppel and a ‘remedial’ constructive trust.

At first instance, the claim was struck out, the court holding that the express trust was conclusive. 

C’s appeal was allowed. Her claim turned on her alleged change of position post-1995. If she could prove her ‘bargain’ claim, the terms of the express declaration of trust could be overridden by proprietary estoppel. It did not follow that C had no claim until M’s promise had been resiled from. And although its star had waned in recent years, it would be wrong to bar C’s ‘remedial’ constructive trust claim. 

The case (which is yet to go to trial) illustrates the resurgence of proprietary estoppel as a head of claim and provides a cautionary tale that express trusts may not be the last word on the parties’ respective rights. 

Derek Kerr / 4th Feb 2011


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