England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM COUNTY COURT
HIS HONOUR JUDGE McKENNA
5SY 00347

		Royal Courts of Justice Strand, London. WC2A 2LL
		23/11/2007

Sir John Chadwick :

1. This is an appeal from an order made on 6 July 2006 by His Honour Judge McKenna sitting in the Birmingham County Court in proceedings brought by the appellant, Miss Sharon James, against Mr Peter Thomas. In those proceedings Miss James claimed a beneficial interest in a property known as The Cottage of which Mr Thomas is registered as the sole proprietor.

The underlying facts

2. The property, which is in the village or hamlet of Wirsall, near Whitchurch in Shropshire, was formerly owned by Mr Thomas' parents. They had purchased it in 1965. On the death of his mother in 1984, the beneficial ownership of the property passed to Mr Thomas and his three siblings. During 1985 Mr Thomas purchased the beneficial shares of his brother and sisters. He funded that purchase with the assistance of a loan from Barclays Bank plc secured by a mortgage. As a result of that purchase he became the sole beneficial owner. On 27 March 1986 he was registered at HM Land Registry as proprietor with title absolute under Title No CH256950.
3. It is common ground that Miss James had no part in the acquisition of the property by Mr Thomas in 1985 and 1986. Indeed, it was, I think, common ground - and the judge so found - that at that time, the parties had not met. They formed a relationship in May 1989. Then, or shortly thereafter, Miss James moved into The Cottage to live with Mr Thomas. They lived there together until February 2004. By that time the relationship had run its course. Miss James moved away to live elsewhere.
4. During the period of their relationship the parties had lived together as man and wife. In 1989 Mr Thomas was in business as an agricultural building and drainage contractor: a business which he carried on as a sole trader from his home at The Cottage. From about 1990 Miss James worked with him in the business without remuneration. Her evidence - as to which there was no real dispute and which (in any event) the judge accepted - was that she drove a tipper, dug trenches, picked up materials, laid concrete, tarmac and gravel and generally undertook (alongside Mr Thomas) the manual work associated with a business of that nature. Their household, living and personal expenses were paid out of a current account at Barclays Bank in the sole name of Mr Thomas. That account also served as the bank account for the business. From about 1999 the business was carried on as a partnership between the parties. By that time Miss James was no longer working in the business on a full time basis - she was devoting more of her time to her equestrian interests - but she continued to be involved in book-keeping and paperwork. In February 2002 the account was re-designated under their joint names. In June 2005 the partnership was dissolved by notice served by Miss James.
5. At the outset of the relationship - in 1989 - Mr Thomas received the sum of £5,000 from Miss James. That money came from a divorce settlement on the termination of an earlier marriage. Mr Thomas used the money to pay a tax bill. There was a dispute between the parties as to whether that money was received by Mr Thomas by way of gift (as he alleged) or by way of loan (as Miss James alleged). The judge did not find it necessary to resolve that issue. In the circumstances that it was not suggested that the money was paid by Miss James in order to acquire any interest in the property, he did not need to resolve it in the context of these proceedings.
6. Soon after Miss James moved into The Cottage a small parcel of adjoining land became available for acquisition. It was acquired, as an accretion to the curtilage of The Cottage, and transferred into Mr Thomas' sole name in August 1991. The judge was, I think, mistaken in thinking that the acquisition took place in 1994; but nothing turns on that. No money changed hands: the consideration took the form of work in kind for the vendors - specifically, the erection of a gateway and the relocation of a water trough - carried out by Mr Thomas and Miss James, working together in the business.
7. It was, I think, common ground that during the course of the relationship between the parties extensive works of renovation were carried out at the property. The judge noted that a number of planning applications were submitted in respect of those works by an architect; and that those applications were made in the joint names of Mr Thomas and Miss James. Both Mr Thomas and Miss James were involved - on a hands-on basis - in carrying out the works. The works were funded from income generated by the business and with the use of materials surplus to the needs of the business.
8. In 1999 and, again, in 2003 Mr Thomas gave instructions to solicitors for the preparation of a will under the terms of which the bulk of his estate would be left to Miss James. But, as he put it in evidence, he "simply did not get around" to executing either of the wills which had been prepared pursuant to those instructions.

These proceedings

9. These proceedings were commenced on 5 April 2005 by the issue of a claim form in the Shrewsbury County Court. The claim was brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. Miss James sought a declaration that the property was held by Mr Thomas on trust for the two of them in equal shares or (in the alternative) in such shares as the court might determine; an order that the registered title be transferred into joint names; and an order that the property be sold and the proceeds of sale distributed in proportion to their respective shares. After a trial, at which both Miss James and Mr Thomas gave evidence, the judge dismissed those claims.
10. In her particulars of claim, dated 24 March 2005, Miss James had put her claim under three heads. First, it was said (at paragraph 20) that she had acquired a beneficial interest in the property by way of resulting trust: in that she had made direct or indirect contributions to the repayment of the mortgage, to improvements to the property and to the acquisition of the adjoining field. The judge noted, at paragraph 3 of his judgment, that the claim to a beneficial interest by way of a resulting trust had been abandoned by her counsel during the course of the trial. The judge made no findings as to the existence, or otherwise, of a resulting trust. A claim on that basis for the claim has not been revived in the grounds of appeal. I need say no more about it.
11. Second, it was said (at paragraph 21 of the particulars of claim) that Miss James acquired a beneficial interest in the property by way of constructive trust. It was said (a) that the parties had a common understanding or common intention that she should have a share in the property; or (b), in the alternative, that a common intention that she should have a share was to be inferred from the conduct of the parties. The matters which were said to evidence such common understanding or common intention were those pleaded earlier in the particulars of claim, at paragraphs 1 to 18. Those matters included assurances said to have been given to Miss James by Mr Thomas; and what are described in the particulars of claim as "the near Herculean labours of the Claimant" in relation to the improvement of the property and the acquisition of the adjoining field. The same matters were relied upon as a basis for inferring a common intention.
12. The judge found that there was no sufficient evidence to support a claim based on a common understanding or common intention. At paragraphs [53] and [54] of his judgment he said this:

"[53] The difficulty with [the submissions made on behalf of the Claimant], as it seems to me, is that a Constructive Trust can only arise when land is purchased for the use of two or more persons, only one of whom is registered as the legal owner. It does not seem to me that the Claimant can rely on later indirect contributions to the mortgage by her labour as constituting in some way the acquisition of the Property for these purposes.

[54] ... The Claimant and the Defendant did not know each other at the time the Defendant acquired the Property in 1986. As such, the Property was not acquired for joint use. There cannot have been any common intention, whether actual or presumed, that the Claimant should have any beneficial interest in the Property. Moreover, it is not alleged by the Claimant that there were any discussions between the parties either at the time of the acquisition or subsequently to the effect that they had an agreement or an understanding that the Property would be shared. On the contrary, when, on the Claimant's evidence, she raised the issue of putting the Property in joint names, the Defendant was evasive and, she accepted, unwilling."

In so far as paragraph [54] contains findings of fact, those findings are not challenged in the grounds of appeal.

13. Third, it was said (at paragraph 22 of the particulars of claim) that Miss James had acquired a beneficial interest in the property by way of proprietary estoppel. The point was pleaded in these terms:

"22 Further or alternatively, the Claimant has acquired a beneficial interest in the property by way of the doctrine of proprietary estoppel, in that:

(a) the assurances given by the Defendant that she should have some form of interest in the property include: the fact that he assured her at various points 'this will benefit us both' and that in the event of his death 'you will be well provided for'; his suggestion that they should sell up and jointly invest in a new property together; that he had a new will drafted in her favour

(b) in reliance upon these matters and in the belief that she would have a share in the property, the Claimant expended considerable efforts and energy on both the property and business over a period of fifteen years, and also made financial contributions which are set out above

(c) she thereby altered her position to her detriment."

14. The specific assurances to which reference is made in sub-paragraph (a) of that paragraph are pleaded at paragraph 15 of the particulars of claim:

"15 Whenever the parties discussed carrying out improvements to the property and matters relating to the business, the Defendant would say to the Claimant 'this will benefit us both'. He told her that in the event of his death 'you will be well provided for'."

The allegation that Mr Thomas had suggested that they should sell up and jointly invest in a new property is pleaded at paragraph 11:

"11 In or about 1997, the Defendant suggested to the Claimant that they should sell the property after completing the works, and jointly invest in another property. This suggestion was rejected by the Claimant and it was not pursued."

And the reference to the preparation of a new will is taken from paragraph 17:

"17 In or about 2003 the Defendant gave instructions to solicitors that his will should be altered so that the property was to be left to the Claimant in the event of his death. A will was so drafted but was never signed by the Defendant."

15. That assurances to the effect pleaded in paragraph 15 of the particulars of claim had been given was not in dispute. At paragraph 17 of his defence Mr Thomas had accepted that he probably would have made a comment at some time to Miss James to the effect that the work undertaken at the property would be of benefit to them; and that he did tell Miss James on one occasion that she would be provided for in the event of his death. But it was denied that those remarks had any relevance to Miss James' entitlement to a beneficial share of the property. Nor was it in dispute that Mr Thomas had given instructions that his will be altered, as pleaded in paragraph 17 of the particulars of claim. Paragraph 19 of the defence was in these terms:

"19 Paragraph 17 [of the particulars of claim] is admitted. The reason the will was not signed was because the Claimant terminated the relationship in October 2003."

16. The judge rejected Miss James' evidence that Mr Thomas had offered to sell the property and invest the proceeds in another property. He said this:

"[40] More significantly are the disputes between the parties as to whether or not the Defendant offered to sell the Property and invest the proceeds in another property. The Claimant says he did, the Defendant denies this saying there was no way in which he would have sold the family home. If another property were to be bought it would be in addition to and not in substitution for the Property.

[41] On this issue I have to say that I much prefer the evidence of the Defendant than that of the Claimant. It seems to me inconceivable that the Defendant, having lived in the Property virtually the whole of his life and having gone to the trouble of acquiring the interests of his siblings in it, and having expended so much time and effort (partly with assistance from the Claimant) in improving it and establishing his business at it, he would simply suggest that it be sold and the proceeds reinvested in another property."

There is no challenge to that finding of fact.

17. The judge addressed the claim based on proprietary estoppel at paragraph [55] of his judgment:

"[55] What of the assurances which are relied on as evidence of the parties' common intention and/or that the Claimant should be entitled pursuant to the doctrine of Proprietary Estoppel? As it seems to me, the assurances that works done to the Property would benefit both the Claimant and the Defendant and the assurance that, on the Defendant's death, the Claimant would be well provided for, are insufficiently specific to give rise to an Estoppel. They are not expressed in terms which enable any objective assessment to be made of what is being promised. Words to the effect that 'this will benefit us both' are insufficient, reasonably to be understood, to mean that the Defendant was going to transfer a specific interest in the Property to the Claimant. Equally, words to the effect of 'you will be well provided for' in the event of the Defendant's death are similarly insufficient to establish a belief that the Claimant would obtain a specific interest in the Property. So far as the drafting of the two wills in 1999 and 2003 are concerned, if anything, they tend to confirm that the parties did not consider that the Claimant had a present interest in the Property at the times they were prepared."

And at paragraph [56] he said this:

"[56] As for the suggestion made by the Claimant and denied by the Defendant, that the Defendant suggested that they should sell up and jointly invest in a new property again, as it seems to me, this suggestion even, if it had been made, confirmed' that the Defendant believed that he owned the Property both legally and beneficially to the exclusion of the Claimant."

The issues raised by the grounds of appeal

18. Miss James appeals to this court with permission granted on 14 November 2006 by Lord Justice Jonathan Parker. In granting permission he noted:

"The proposed appeal faces difficulties on the facts. Nevertheless the grounds of appeal raise arguable issues. In particular, it is arguable that (as contended in ground 5) in paragraph 55 of his judgment the judge took too restricted an approach in apparently proceeding on the basis that in order to support a proprietary estoppel/constructive trust a representation must be specific as to the extent of the beneficial interest intended to be conferred."

At ground 5 in the grounds of appeal annexed to the appellant's notice filed on 27 July 2006 it is asserted - correctly in my view - that: "As a matter of law, an estoppel or constructive trust may arise in circumstances where the legal owner has assured the claimant that he or she has or will obtain a beneficial interest in the property, even though the extent of that interest is not specified". It is said that the judge erred, at paragraph [55] of his judgment, "in holding that assurances, for the purposes of a claim in proprietary estoppel or constructive trust, must be of a specific interest in a particular property". The relevant question, in this context, is whether, in referring - as he did, in paragraph [55] - to "a specific interest in the Property", the judge is to be taken to have held that it was necessary to find an assurance (or assurances) which were specific as to the extent of the interest which Miss James was to have; or whether he appreciated that it would be sufficient to find that she had been led to think that she would have some beneficial share (albeit unqualified) in the property.

19. Before addressing that question it is convenient to note the other grounds of appeal. It is said, under ground 1, that the judge erred in holding (at paragraphs [53] and [54] of his judgment) that "a common intention constructive trust can only arise where the relevant common intention is formed at the time the property which is alleged to be subject to the trust is acquired"; and, at ground 2, that he erred in holding (in paragraph [54]) that "a common intention constructive trust can only come into existence when there is evidence of discussions between the parties to the effect that they had an agreement or understanding that the property would be shared". It is said that, as a matter of law, the common intention may be formed at any time before, during or after the acquisition of the property; and that the common intention may be inferred from evidence of the parties' conduct during the whole course of their dealings in relation to the property. For my part, I would accept each of those propositions of law. The relevant question is whether, on a true analysis of his judgment as a whole, the judge did (as contended) fail to recognise and give effect to those propositions.
20. It is said, under ground 3, that the judge failed adequately to consider whether there was evidence from which it could be inferred that the parties had a common intention that Miss James should have an interest (the extent of that interest being unspecified) in the property; and whether Miss James had acted to her detriment in reliance on that common intention in circumstances rendering it inequitable for Mr Thomas to deny her that interest. Under ground 4 it is said that the judge erred in holding that the assurances to which I have referred (pleaded at paragraph 15 of the particulars of claim) were insufficiently specific to give rise to a proprietary estoppel or constructive trust. It is said that those assurances, taken with other undisputed evidence, provided ample support for the conclusion that the parties had a common intention that Miss James should have a beneficial interest in the property (albeit unspecified in extent).
21. Ground 6 does not, I think, add anything of substance to the earlier grounds. It is said that, if the judge had properly applied the law to the undisputed evidence and his findings of fact he would have found that Miss James was entitled to such share of the property as was fair, given the whole course of dealing between the parties. Ground 7 contains the assertion (which would be made good if the appeal on the earlier grounds were to succeed, but not otherwise) that the judge erred in failing to order a sale under the 1996 Act. Ground 7 is a challenge to the judge's order that Miss James pay Mr Thomas' costs: but, again, on the facts in this case, that challenge could only succeed if the appeal on the earlier grounds were to succeed.
22. By a respondent's notice filed on 1 December 2006, Mr Thomas seeks to uphold the judge's conclusion in paragraph [55] of his judgment on the ground that - if it be held that his reference in that paragraph to "a specific interest in the Property" does betray an error of law - he was, nevertheless, correct in his conclusion that assurances given by Mr Thomas to the effect that Miss James would "be well provided for" in the event of his death and that the works to the property "would benefit them both" could not found a constructive trust or provide the basis of a proprietary estoppel. It is said that that was the conclusion which he would have been bound to reach on a correct understanding of the law, given the findings of fact which he had made.
23. In summary, therefore, the issues which this Court needs to address are these:

(1) Did the judge fail to recognise and give effect to any of the following propositions of law: (i) that the common intention necessary to found a constructive trust (or to provide a base for proprietary estoppel) may be formed at any time before, during or after the acquisition of the property; (ii) that such common intention may be inferred from evidence of the parties' conduct during the whole course of their dealings in relation to the property: or (iii) that an estoppel or constructive trust may arise in circumstances where the legal owner has assured the claimant (or led him or her to believe) that he or she has or will obtain a beneficial interest in the property, even though the extent of that interest is not specified?

(2) (a) Did the judge fail adequately to consider whether there was evidence from which it could be inferred that the parties had a common intention that Miss James should have an interest (the extent of that interest being unspecified) in the property; in particular, should he have held that the assurances pleaded at paragraph 15 of the particulars of claim (taken with other evidence) were sufficiently specific to give rise to proprietary estoppel or a constructive trust? If so, (b) should the judge have held that Miss James had acted to her detriment in reliance on that common intention in circumstances rendering it inequitable for Mr Thomas to deny her that interest?

Did the judge err in law?

24. Taken out of context, the judge's observation (at paragraph [53] of his judgment) that "a Constructive Trust can only arise when land is purchased for the use of two or more persons, only one of whom is registered as the legal owner" provides powerful support for the submission that he misunderstood the law in this field. In the first place, the observation (as a generality) is plainly incorrect: a constructive trust can arise in circumstances where two parties become joint registered proprietors. But that, of course, is not this case. More pertinently, if the circumstances so demand, a constructive trust can arise some years after the property has been acquired by, and registered in the sole name of, one party who (at the time of the acquisition) was, beyond dispute, the sole beneficial owner: Gissing v Gissing [1971] AC 886, 901D-E, Bernard v Josephs [1982] Ch 391, 404E-F. But, as those cases show, in the absence of an express post-acquisition agreement, a court will be slow to infer from conduct alone that parties intended to vary existing beneficial interests established at the time of acquisition.
25. The judge was plainly correct, on the facts in this case, to hold that there was no common intention, at or before the acquisition of the property by Mr Thomas in 1985 or 1986, that Miss James should have some beneficial share: as he found, the parties had not then met. It follows that, unless the judge is to be taken to have accepted (notwithstanding his apparent rejection of that proposition in the observation at paragraph [53] to which I have just referred) that, as a matter of law, it would be sufficient to establish that such an intention arose in or after 1989, there would have been no purpose in going on to consider whether the evidence did establish a common intention that Miss James should have a share. But, plainly, he did consider that question. He referred, in terms (at paragraph [54]), to the absence of an allegation by Miss James that "there were any discussions between the parties either at the time of the acquisition or subsequently to the effect that they had an agreement or an understanding that the Property would be shared" [emphasis added]. To my mind, notwithstanding the observation in paragraph [53] which (taken alone) suggests otherwise, the better view (when the judgment is read as a whole) is that the judge did recognise that there was a need to consider (in relation to constructive trust as well as in relation to proprietary estoppel) whether the parties formed a common intention, in or after 1989, that Miss James should have a beneficial share in the property. Accordingly - although not without hesitation - I reject the submission that the judge erred in law in the first of the three respects summarised in paragraph [23(1)] above.
26. There is force, also, in the submission that the judge failed to recognise that, as a matter of law, a common intention that Miss James should be entitled to a beneficial share in the property might be inferred from evidence of the parties' conduct during the whole course of their dealings in relation to the property. Powerful support for that submission is found in the second sentence of paragraph [53] of the judgment: where the judge observed that Miss James could not rely on later indirect contributions to the mortgage (from the fruits of her labour in the business) "as constituting in some way the acquisition of the Property". The real question, in this context, was whether Miss James could rely on the use of partnership monies (or, perhaps, receipts of the business at a time when she was not a partner) to fund payment of instalments due under the mortgage as evidence of an agreement, understanding or intention (made or reached after 1989) that she should have a beneficial share in the property. The judge did not ask himself the question in those terms. But if he had asked himself that question he would have been bound to conclude, on the facts in this case, that the answer must be "No".
27. Although it is possible to envisage circumstances in which the fact that one party began to make contributions to capital repayments due under a mortgage might evidence an agreement that that party was to have a share in the property, the circumstances of this case are not of that nature. On the facts found by the judge, the only source of funds to meet Mr Thomas' commitments under the mortgage, as well as all other household and personal expenses, was the receipts of the business. While the parties were living together they were dependent on the success of the business to meet their outgoings. It was not at all surprising that, in the early days of their relationship, Miss James should do what she could to ensure that the business prospered. That is not to undervalue her contribution; which, as Mr Thomas recognised, was substantial. But it is to recognise that what she was doing gives rise to no inference that the parties had agreed (or had reached a common understanding) that she was to have a share in the property: what she was doing was wholly explicable on other grounds.
28. For those reasons, although I find it impossible to be confident that the judge did appreciate that he had to consider whether any (and if so what) inferences as to common intention should be drawn from the parties' conduct in relation to the property - and so impossible to be confident that the judge did not err in law in that respect - I am not persuaded that his error (if he were indeed in error) in the second of the three respects summarised in paragraph [23(1)] above was material in the circumstances of this case.
29. The submission that the judge failed to recognise that an estoppel or constructive trust may arise in circumstances where the legal owner had assured the claimant that he or she has or will obtain a beneficial interest in the property (albeit that the extent of that interest is not specified) is based on the premise that, when the judge used the phrase "a specific interest in the Property" in paragraph [55] of his judgment, he intended to refer to an interest which was defined not only by its nature (for example, "a share in the proceeds of sale") but also by its quantum (for example, "a one third share in the proceeds of sale"). I am not persuaded that that was the judge's intention. The phrase is not to be taken out of context: it must be read in the light of the judgment as a whole.
30. The judge directed himself as to the law at paragraphs [44] to [49] of his judgment. He referred to observations of mine in Oxley v Hiscock [2004] EWCA Civ 546, [68], [69]; [2005] Fam 211, 246B-H. In the course of those observations I emphasised the distinction between "the first question" - "whether there is evidence from which to infer a common intention, communicated by each to the other, that each shall have a ' beneficial share in the property" - and "the second question" - "what is the extent of the parties' respective beneficial interests in the property". It is clear - from paragraph [46] of his judgment - that the judge recognised that important distinction. I find it impossible to accept that he intended, by the use of the phrase "a specific interest in the Property" in paragraph [55] of his judgment, to disregard it.
31. The more likely explanation for his use of the phrase "a specific interest in the Property", as it seems to me, is that the judge had in mind the observations of His Honour Judge Norris QC, sitting as a judge of the High Court, in Lissimore v Downing [2003] 2 FLR 308, 312-313, at paragraph [12], to which he referred at paragraph [48] of his judgment. As the judge put it (ibid), Judge Norris' review of the cases on proprietary estoppel had led him to conclude that, as a basic rule, "the representations made by A, or the assurance provided by A, or the expectations of B (known to and encouraged by A), must relate to some specific property, or to some part of A's property". On the facts in Lissimore v Downing the need to be satisfied that the representations related to specific property was of importance, in that the defendant was the owner of a large country estate. Judge Norris held that unspecific statements made by the defendant that "she [the claimant] would never want for anything", or that "he would take care of her", or that "he had looked after his other girlfriends and she would not be different" did not found a proprietary estoppel. He said this (ibid, 315, [18]):

"... Such statements do not on their face relate to any specific property, they plainly do not amount to a representation which binds the whole of Mr Downing's property, and they are not expressed in terms which enable any objective assessment to be made of what is being promised. In this last respect they are to be contrasted with statements made to unpaid or underpaid workers or business partners, encouraged to work on because they would be 'treated right', and for whom a commensurate reward could be objectively assessed."

32. There would be force in the criticism that the phrase "a specific interest in the Property" does not accurately express or reflect the "basic rule" which Judge Norris identified in the Lissimore case: in that there is an obvious distinction between "a specific interest in the Property" and "an interest in specific property". There would be force, also, in the criticism that, on the facts in the present case (in contrast to the position in the Lissimore case), there would be little or no difficulty in identifying the specific property to which representations made by Mr Thomas were intended to relate. Indeed, in referring to "a specific interest in the Property" the judge gave a clear indication that that was not the matter which concerned him. Those are not the criticisms which are advanced by the claimant, through her counsel, on this appeal. As I have said, the challenge to paragraph [55] of the judgment is that the judge failed to recognise that an estoppel or constructive trust may arise in circumstances where the legal owner had assured the claimant that he or she has or will obtain a beneficial interest in the property, albeit that the extent of that interest is not specified. For my part, I do not think that that challenge is made out.

Should the judge have held that the assurances given by Mr Thomas (taken with other evidence) were sufficiently specific to found proprietary estoppel or a constructive trust?

33. The first of the assurances said to have been relied upon - as pleaded at paragraph 15 of the particulars of claim - is that "whenever the parties discussed carrying out improvements to the property and matters relating to the business, the Defendant would say to the Claimant 'this will benefit us both'". It must be kept in mind that that was said by Mr Thomas at a time when he and Miss James were living together at the property as man and wife; and in circumstances in which (on the evidence) there was no reason for either of them to doubt that they would continue to do so for the foreseeable future. In that context it is, to my mind, at least as likely that the observation "this will benefit us both" (in relation to improvements to the property) was intended to mean - and was understood at the time to mean - that the improvements would have the effect that the property in which they were living as their home would be more comfortable and more convenient: or, to put the point another way, that the improvements to the property would be reflected in an improvement to the quality of their life together. It is, I think, unreal to suggest that an observation in those terms, made in that context, was intended or understood to be a promise of some property interest, either present or in the future. Confirmation that it was not so intended - and was not understood to be so intended - is found in the judge's observation (in the final sentence of paragraph [54] of his judgment) that "when, on the Claimant's evidence, she raised the issue of putting the Property in joint names, the Defendant was evasive and, she accepted, unwilling".
34. Nor, as it seems to me, can it be said that the observation "this will benefit us both", when made in the context of a discussion of matters relating to the business, was intended or understood to be a promise of some property interest in The Cottage. Given that the outgoings of both parties were funded by the receipts of the business -and that, from about 1999, the business was carried on in partnership - there is no reason to think that the observation "this will benefit us both" (in relation to the business) was more than a statement of the obvious: what was of benefit to the business was of benefit to both Mr Thomas and Miss James, for whom the business was their livelihood.
35. The second of the assurances said to have been relied upon was that "He told her that in the event of his death 'you will be well provided for'". I find it impossible to see that as a representation that Miss James was to have a present proprietary interest in the property - or as a representation that she would have a proprietary interest in the property during Mr Thomas's lifetime. It was, as it seems to me, a representation as to what the position would be after Mr Thomas' death. And it must, I think, be seen as a representation made on the basis of a common assumption that the parties would still be living together when that eventuality occurred. It is most unlikely to have been intended or understood as a representation that, if Miss James predeceased Mr Thomas, a share in the property would devolve through her estate (to whoever might be the beneficiary under her will or intestacy). And, as it seems to me, it is most unlikely to have been intended or understood as a representation that, if the parties were not living together at Mr Thomas' death, she should, nevertheless, have provision out of his estate. There is no reason to give the assurance that, in the event of Mr Thomas' death, Miss James would be well provided for, any wider meaning than that he intended to make a will in her favour. And, as the judge found, that was indeed his intention.
36. The judge did not find it necessary to address the question whether Miss James acted upon the assurances to her detriment. That is understandable, given that he held that the assurances were not sufficiently specific to found proprietary estoppel or constructive trust. In the circumstances that I share that view, I, too, find it unnecessary to address the question of reliance. But, for completeness, I should add that the factors which lead to the conclusion that the assurances were not intended or understood as a promise of some property interest lead, also, to the conclusion that it would be unreal to think that Miss James did what she did in reliance on such a promise. The true position, as it seems to me, is that she worked in the business, and contributed her labour to the improvements to the property, because she and Mr Thomas were making their life together as man and wife. The Cottage was their home: the business was their livelihood. It is a mistake to think that the motives which lead parties in such a relationship to act as they do are necessarily attributable to pecuniary self-interest.
37. In the course of argument we were taken to an interchange, in the course of Mr Thomas' oral evidence, between the judge and the witness:

"JUDGE McKENNA: It is a question of quantification only. Is that what you are saying? You accept that the claimant is entitled to a share in the property by virtue of what she has contributed to the business and/or the improvements made to the property, but you disagree with her on how much. That is what you are saying, really. A. Legally I have no idea about how I stand with the property at all. I haven't a clue. All I'm saying is she did work in the business. There was the £5,000 for the tax. She is----

Q. Looking at it fair-mindedly she is entitled to something. A. Yes, but I do not think it is fair that I should lose my business and my home to----"

The judge had that interchange in mind when he came to deliver judgment. He said this, at paragraph [37]:

"I was . . . struck by [Mr Thomas'] concession, made expressly in ignorance of the legal position, and very much contrary to his interest, that he felt by virtue of her contribution to the business and the work done on the Property, the Claimant was entitled to an interest - where he was at odds with the Claimant was as to the extent of that interest...."

It is said that the judge ought to have reflected Mr Thomas' own view of what would be fair in an order recognising that Miss James was entitled to a share in the property and quantifying that share.

38. In my view the judge was right to resist that obvious temptation. It would have been a much happier outcome if the parties had been able to agree, at the end of their relationship, what financial provision should be made for Miss James to reflect her contribution to the business and to the improvements to The Cottage. But that seems to have proved impossible. Miss James will be entitled, as a partner, to a share in the partnership assets after taking accounts. Her interest in the property (if any) must be determined by applying principles of law and equity which (however inadequate to meet the circumstances in which parties live together in the twenty-first century) must now be taken as well-established. Unless she can bring herself within those principles, her claim in the present case must fail. As Baroness Hale of Richmond observed in Stack v Dowden [2007] UKHL 17, [61]; [2007] 2 WLR 831, 851 D-E it is not for the court to abandon the search for the result which reflects what the parties must, in the light of their conduct, be taken to have intended in favour of the result which the court itself considers fair.

Conclusion

39. I have no doubt that the judge was entitled to hold that the assurances on which Miss James relied in these proceedings (whether on their own or taken with other evidence) were insufficient to found a claim based on constructive trust or proprietary estoppel. I would accept that there is force in the criticisms that she has made of the terms in which the judge expressed his understanding of the law; but I am satisfied that, applying the correct principles, the claim could not succeed. I would dismiss this appeal.

Lord Justice Wilson: I agree.

Lady Justice Smith: I also agree.