Although a family law decision, the case of Ely v Robson concerning the rights of two cohabitees in a property is important in terms of constructive trusts and proprietary estoppel, demonstrating how binding agreements can arise in even informal circumstances.
On the facts, it was decided that the parties had an understanding of their interests which were that the Claimant would be entitled to the property for life with the remainder 80% for his heirs and 20% for the Respondent cohabitee, who could then continue to live in the property until the death of her mother and aunt who also resided there. It was found that the Claimant acted to his detriment relying on that understanding, and that he held the property on constructive trust for himself and the Respondent. Both parties were found to have acted consistently with the terms of that agreement. It was considered that it would have been unconscionable for the Respondent to assert anything different, and accordingly was estopped from doing so.
Following the couple’s separation in 2007, the parties met informally to try and resolve matters. Following the discussions, Ely’s solicitor wrote setting out the terms of agreement and, in the later court proceedings, contended that a settlement agreement had been reached in the terms of the letter. In short, Ely would hold the property on trust for himself for life with the remainder 80% for his heirs and 20% for Robson. Robson could continue to live in the property until the death of her mother and aunt.Robson disputed any such agreement had been reached .... The Court of Appeal dismissed Robson’s appeal and ruled that the oral agreement was binding. The court acknowledged that .... the parties had acted in accordance with the ‘agreement’.