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Cohabitation: you may not get back what you put in to a property

Case summary – Carry v Liston

In many cohabitation breakdowns the couple disagrees over their entitlement to the property in which they have been living. Sometimes the concept of proprietary estoppel is used as an argument for deciding on the division of property or compensation. The recent case of Carry v Liston, however, shows that proprietary estoppel cannot be relied on for the transfer of legal title under Jersey law. Yet again this highlights the precautionary role a cohabitation or equity agreement has to play when purchasing property as a non-married couple.

Ms Carry and Mr and Mrs Liston were neighbours. Between their two plots of land lay a small strip of land which was owned by Ms Carry. Mr and Mrs Liston used that part of the land and treated it as their own, including growing trees and shrubs on the land and its ongoing maintenance.

Amongst other things, Mr and Mrs Liston tried to use a remedy known as “proprietary estoppel” in order to suggest that they had acquired the legal ownership of this strip of land by virtue of the number of years they had enjoyed it without interruption. They argued that Ms Carry had acquiesced to their ownership of the land by allowing them to treat it as their own for a number of years and therefore the land should be transferred into their names.

The court rejected this assertion on the basis that the doctrine of proprietary estoppel does not exist in Jersey law in relation to the transfer of title. This is due, in part, to the fact that it is incompatible with the Jersey Law doctrine of “possession quadragenaire” as well as the custom of purchasers swearing an oath before the court. Possession quadragenaire is the common law principle that where a person has uninterrupted enjoyment of land for a period of 40 years, that person will acquire the title to that land.

The court ruled out the suggestion that following a claim for proprietary estoppel, the court can or should transfer property to the claimant as a remedy. However, the court did not appear to specifically rule out the suggestion that damages could be claimed rather than a transfer of title.

What is proprietary estoppel?

Proprietary estoppel is an equitable remedy where a court will not grant a judgment or other legal relief to a party who has not acted fairly. In order to demonstrate proprietary estoppel, a party must demonstrate that:

  1. the claimant has been given a clear assurance that they will acquire a right over property;
  2. they reasonably rely on the assurance;
  3. they act substantially to their detriment on the strength of the assurance; and
  4. it would be unconscionable to go back on the assurance.

What does this mean?

This case reaffirms that the remedy of proprietary estoppel cannot be used in Jersey law when it comes to the transfer of legal title. The court does, however, appear to leave the door open for an argument that equitable estoppel of some other kind may apply in respect of a claim for damages.

In cohabitation situations, it is often very difficult for a non-legal owner of a property to have any recourse against a legal owner of a property if the relationship breaks down unless there is an equity (or cohabitation) agreement. Proprietary estoppel may, in certain circumstances, allow a non-legal owner to claim back some compensation by way of damages where they were promised an interest in a property in return, for example, for mortgage contributions or paying for home improvements, and where they have reasonably relied on that promise to their detriment. However, case law in this area remains uncertain.

Having a cohabitation or equity agreement is the safest way for non-legal owners of property to protect their rights. We would encourage anyone in this situation to seek advice from our family law team at the earliest opportunity by telephoning us on: +44 (0) 1534 632248 or email: family@viberts.com.

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