‘In The Alternative’: Proprietary Estoppel in Cohabitation Cases - The Impact of the Decision in Blackburn v. Southwell

Tue, 31 Mar 2015

Last summer the case of Southwell v Blackburn came before the Court of Appeal. The subject of the appeal was the correct application of the equitable remedy of proprietary estoppel within the context of a cohabiting couple. Judgment was handed down on 16th October 2014 (reported under [2014] EWCA Civ 1347) and was subsequently described in the national press as a ‘landmark ruling’ in relation to the rights and entitlements of unmarried couples when their relationships come to an end. This article examines whether the decision has in fact moved the law on in such seismic terms.

The Facts: Ms. Blackburn’s claim related to a property in Droitwich that was occupied by the parties as their home for between 9 and 10 years.

The Property was purchased in Mr. Southwell’s sole name at a price of £240000 and was funded by the sale proceeds of his previous property (purchased before the parties ever met) totalling £140000, and a mortgage of £100000 also taken out in his sole name.

Ms. Blackburn had been living in Manchester with her two daughters in a property rented from a housing association and left that property to move in with Mr. Blackburn.

During the entire period that the parties occupied the property, Mr. Southwell discharged all payments in relation to the mortgage, the utilities and the council tax. Ms. Blackburn paid the bill for the telephone landline and paid for a proportion of the grocery shopping.

Mr. Southwell also funded all repair and renovation work to the property.

It was this set of facts that led the press to portray the case as an award made in favour of a party who made no meaningful contribution to acquisition or maintenance costs of the subject property.

The Claim: The initial claim brought by Ms. Blackburn asserted that she had acquired a 50% share in the property on the basis of a constructive trust founded upon an express common intention. She claimed that Mr. Southwell had promised her that she would be an equal owner of the property and that her name would subsequently be added to the legal title.

In the alternative, Ms. Blackburn claimed that Mr. Southwell has represented to her that she would have a home for life, and that she acted to her detriment in leaving her rented accommodation in Manchester, on which she claimed to have spent between £15000 and £20000 in improvements.

The First Instance Decision: The judge at first instance expressly rejected the claim for a constructive trust but upheld the claim for a proprietary estoppel. He found that the requirements of representation (the ‘home for life’), detrimental reliance (the move from Manchester) and unconscionable denial or repudiation of the initial assurance (the exclusion of Ms. Blackburn from the property after their relationship ended) were all made out.

The judge compensated Ms. Blackburn with a monetary award of £28500, which represented the sum of £20000, which Ms. Blackburn had spent on her home in Manchester adjusted for inflation.

The Appeal: The appeal focused upon three specific elements of the judgment:

i)         The representations made by Mr. Southwell lacked the required specificity to engage the doctrine of proprietary estoppel, in that the judge made no attempt to define what was meant by providing her with a “secure home” and Mr. Southwell cannot have intended that she should be provided with a home irrespective of whether the relationship continued to subsist or not;

ii)        The judge was wrong to find that Ms. Blackburn had suffered a detriment in moving from her home in Manchester as any such detriment was outweighed by the various benefits that she received during the course of the relationship;

iii)       Consequently, the judge was also wrong to find that Mr. Southwell acted unconscionably in denying Ms. Southwell the benefit that she expected to receive, given the benefits that Ms. Blackburn had already been provided with during the course of the relationship.

A Court of Appeal consisting of Lord Justice Tomlinson, Lord Justice McFarlane and Lady Justice Macur rejected all three grounds.

The Judgment: The first ground was rejected on the basis that the judge’s findings that Mr. Southwell had said “she would always have a home and be secure in this one”, that “he was taking on a long-term commitment to provide her with a secure home” and that “he led to her to believe that she would have the sort of security that a wife would have” were inconsistent with the suggestion that the assurance provided was for the provision of accommodation for Ms. Blackburn only for as long as the relationship subsisted.

The ‘meat’ of the Court of Appeal’s analysis of the required elements of proprietary estoppel was however, based around the second ground. The Court accepted that detriment must be assessed at the point at which the party who provided the assurance seeks to go back on it and that it must therefore be assessed and evaluated over the course of the relationship (Gillet v. Holt 2001 Ch [2010], Thorner v. Major [2009] 1 WLR 776). The judge at first instance had referred to the fact that Ms. Blackburn had undoubtedly benefited during the relationship, but also referred to the fact that “the benefits flowed both ways. I do not think she needs to give credit for them”. The judge did not specify what those benefits were but the Court of Appeal referred to the fact that Ms. Blackburn supported Mr. Southwell in his career during which time his earnings and pension provision increased and that the property increased significantly in value while she shouldered the major housekeeping activities. The fact that Ms. Blackburn would have been paying rent had she remained in Manchester and was relieved of that responsibility as a result of moving to live with Mr. Southwell was said to be no more than “an inherent and intrinsic element in the Respondent’s decision to rely upon the Appellant’s assurance of security”.

The Court also acknowledged that there may be cases where circumstances, which would seem to give rise to an equity, would not do so when viewed in light of the whole course of the relationship up to the point when the promisor seeks to go back on his assurance, but reiterated that, particularly within the context of a quasi matrimonial relationship, the detriment suffered need not be financial (see Davis v. Davis [2014] EWCA Civ 568) and its evaluation “is not an exercise in financial accounting”. The judge at first instance was right to concentrate on the causal link between the assurance and the detriment – the benefits that subsequently flowed in both directions, were no more than “incidents of the relationship while it successfully subsisted rather than direct consequences of reliance upon the promise as to security”.

It followed that the third ground must also fail on the basis that if the assurance given was provision of ‘a home for life’ and Ms. Blackburn acted to her detriment in reliance upon that assurance, it is that detrimental reliance makes the promise irrevocable and renders its repudiation unconscionable. On this basis, Ms. Blackburn was not required to demonstrate that the circumstances in which she was ‘excluded’ from the property were in and of themselves, unconscionable.     

Conclusions: It is difficult, from a lawyers’ perspective, to view the case as a seismic shift in the manner in which cohabitees’ property rights are dealt with in instances where a constructive trust cannot be established, but it does underscore the importance of pleading proprietary estoppel in the alternative when launching a claim for a beneficial interest in property. The judgment highlights two clear bases upon which evidence that would not assist in establishing a claim for a constructive trust could be of crucial importance in establishing a proprietary estoppel:

i)         The nature of the representation that Ms. Blackburn would have a secure home for life was sufficient to form the basis of an enforceable equity but could in fact be seen as a contra-indicator that she was to have a beneficial share in the property - if she were intended to be a co-owner no such assurance would be necessary. 

ii)        The generalised nature of the contributions provided by Ms. Blackburn in terms of supporting Mr. Blackburn in his career and taking on the majority of the housework would have been insufficient as evidence of an inferred common intention that she was to have a beneficial interest in the property, but they were taken into account when the Court came to weigh detriment against benefit for the purposes of establishing an enforceable equity by way of proprietary estoppel.

On a more general note, practitioners should be wary of expecting the court to conduct a detailed quantitative evaluation of detriment versus benefit within the context of a relatively lengthy cohabiting relationship.

Written By Ashley Wynne

Ashley Wynne was counsel for the Appellant in the case of Blackburn v. Southwell.

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