Toby Bishop summarises Re. Kashinath Bhusate (deceased)  EWHC 2362 (Ch) in which Chief Master Marsh delivered welcome guidance for estates, trusts and property lawyers on three issues: (1) whether the inferred and imputed common intention constructive trust analysis extends beyond the domestic consumer context to matters following an intestacy; (2) what the limitation period is for a spouse’s claim to a statutory legacy and capitalised life interest and the date from which time runs; and (3) the way in which the court approaches a defendant’s strike out and summary judgment application in Part 8 proceedings.
A claim relying on a common intention constructive trust often leads to a long and expensive inquiry into the whole course of parties’ dealings. In this dispute Toby’s clients abridged that process by striking out the claims.
Mr Bhusate was the registered proprietor of a house in Golders Green when he died on 28 April 1990. He was survived by 6 children (the Ds), C claims to be his third wife (a matter for resolution later, if it remains live). Letters of administration were granted to C and another on 12 August 1991. C marketed the house for sale between June 1992 and August 1994, but then withdrew it. C took no other steps in the administration, but continues to live in the house. C issued her claim in November 2017.
The Chief Master identified the 3 iterations of C’s claim to a beneficial interest in the house :
– Case 1: C is the sole beneficial owner by virtue of facts and matters pleaded including: she and her son were the sole occupants from September 1990, there was no agreement as to the distribution of the estate, the Ds only requested an occupation rent from C once (in 1993), there was an offer in 1994 which C alleges was less than her entitlement at that time;
– Case 2: a common intention should be inferred or imputed from the same facts that C is the sole beneficial owner by virtue of a resulting or constructive trust;
– Case 3: a common intention should be inferred or imputed that C’s and the children’s joint interests in the house crystallised in 1994, or some other date, in proportion to their contributions (being their shares in the estate), giving rise to a resulting or constructive trust such that C and her son, D6, alone enjoyed the benefit of any subsequent increase in value.
In the alternative C claimed a widow’s statutory legacy and capitalised life interest each with interest running at 6%.
C’s son, D6, pleaded a counterclaim and part 20 claim in which he expressly admitted C’s claim and did not oppose the relief she sought, but went on to plead that if C’s claim failed he and C alone were the sole beneficial owners by virtue of a constructive trust or a proprietary estoppel.
C’s application for permission to bring her 1975 Act claim 25 years out of time remains to be determined as a preliminary issue.
Approach to application in Part 8 proceedings
The requirements of CPR 16.5 will be applied to Part 8 claims by analogy where it is just to do so [15 and 39] (see also the Chief Master’s recent judgment in Gregory v. Moore  EWHC 2343 (Ch) at para 10, in which John McLinden QC appeared for the applicants). It is perfectly proper for a part 8 claim form to provide only a brief summary of the basis of the claim with a fuller explanation and evidence in the witness statement. However, it is essential the defendant must be able to understand the core facts and the relief sought (Prudential Assurance v. HMRC  EWCA Civ 376 at para 20).
A part 8 claim should be complete at the point of issue, when considering whether C has shown reasonable grounds for bringing a claim (CPR 3.4(2)(a)) it is appropriate to take the claim form and witness statements together. When considering whether a claim has a real prospect of success (CPR 24) the court will have regard to C’s evidence in support and any other evidence available or reasonably likely to become available .
It was not open to C to assert the beneficiaries had any choate interests in the house. She had not pleaded or evidenced an assent or appropriation [37-39]. An appropriation to herself would have offended against the self-dealing rule (see Kane v. Radley-Kane  Ch 274) .
There was no basis to conclude that a resulting trust arose (Westdeutsche Landesbank Girozentrale v. Islington LBC  A.C. 669, HL) .
It is impossible for a party to plead two inconsistent factual narratives, here C’s and D6’s contradictory versions of their own intentions alleged to have been held in common with the other Ds (Clarke v. Marlborough Fine Art  1 WLR 1731 at para 23) [65 and 71]. A party may not equivocate, but must elect which facts found their cause of action.
Over the past 11 years the analysis of implied common intention constructive trusts in the joint names domestic consumer context has evolved (see Stack v. Dowden  UKHL 17;  2 AC 432; Jones v. Kernott  UKSC 53;  1 AC 776; Marr v. Collie  UKPC 17;  3 WLR 1507, see also the former President’s 2017 keynote speech). The Chief Master decided that analysis does not extend to matters arising following an intestacy. It cannot be said there is a developing area of jurisprudence which might apply Jones v. Kernott beyond a domestic relationship because the starting point is the statutory provisions which apply on an intestacy (sections 46 and 47 of the AEA 1925). It remains open to establish a constructive trust on conventional principles relying on an oral or written agreement .
Limitation in respect of a widow’s claim
Section 22 of the Limitation Act applies to a spouse’s claims to a statutory legacy and capitalised life interest and as a result those claims will be statute barred after 12 years. In a claim to an interest in the residuary estate, time would not run until the PR was in a position to distribute the residue (see In Re Loftus, decd; Green v. Gaul  EWCA Civ 1124 at para 28). That postponement does not apply to a spouse, because they are not a residuary legatee, instead their claim is to a statutory legacy and capitalised life interest arising under the AEA 1925 [54 and 70].
Toby was led in this case by Richard Wilson QC of Serle Court and instructed by Alexa Payet at Bolt Burdon Solicitors. Toby specialises in estates, trusts and property disputes.