• In the case of Pascoe v Turner 1979 1 WLR 431 it was held that expenditure of money on reliance on the encouragement and acquiescence of another party may create a proprietary estoppel.

Facts of the Case

  • The claimant was a businessman who had invested money in the purchase of private and commercial property.
  • The defendant was a widow with an invalidity pension and a modest amount of capital.
  • The parties became friends and she helped him in small ways with his business adventures.
  • In 1963 D moved into C’s house as C’s housekeeper.
  • In 1964 they began to live together as man and wife and in 1965, C took D to see another house and asked her if she liked it.
  • C bought the house and they continued to live there as man and wife.
  • C gave D a housekeeping allowance, but she used her own money to buy her clothes.
  • D collected some rents for C and was allowed to keep as part of them to supplement the housekeeping allowance.
  • In 1973 C began an affair with another woman.
  • D, unaware of this affair went away for a short holiday and in her absence, C moved into the house with his new mistress, they did however remove themselves before D’s return.
  • Immediately after D’s return, C visited her and assured her that the house was hers and everything in it.
  • D stayed on in the house and in reliance upon C’s declaration that he had given her the house and its contents, she spent money on redecorations, improvements and repairs.
  • C knew that she was improving the property which she thought to be hers.
  • Although C said that he had put the transfer of the house into his solicitors’ hands, he never had done so.
  • There was no conveyance and nothing in writing.
  • In April 1976, C wrote to D giving her two months’ notice to determine her licence to occupy the house.
  • D refused to leave, and C proceeded an action for the possession in the County Court.
  • The judge dismissed the action holding that C and made a gift to D of the contents of the house and that the beneficial interest in the house had passed to D under a constructive trust to be inferred from the words and conduct of the parties.

Issues in Pascoe v Turner 1979 1 WLR

  • Could D compel C to uphold his promise of the house as D had already spent money on improvements and repairs.
  • Could D remain living in the house.

Held by Court of Appeal

  • The appeal was dismissed.  

Orr, Lawton and Cumming-Bruce L.JJ.

  • The appeal was dismissed, since there were no documents supporting C’s statement that he had given the house to D and the gift had not been perfected and in, 1973, D occupied the house under a licence revocable at will; that, although a trust could not be inferred from the circumstances, the circumstance between 1973 and 1976, when C encouraged or acquiesced in D’s improvement  of the house in the belief that the property belonged to her, gave rise to an estoppel and the minimum equity to do justice to D, was to compel C to give effect to his promise by ordering him to execute a conveyance of the property to D.