In Stack v Dowden [2007] UKHL 17, at [49], Baroness Hale said that ‘[n]o-one now doubts that … an express declaration [of trust] is conclusive unless varied by subsequent agreement or affected by proprietary estoppel’. It might reasonably be observed that the authority cited for that proposition, the decision of the Court of Appeal in Goodman v Gallant [1986] Fam 106, did not actually say that, but rather, at 110H–111A, that if there is an express declaration of trust which comprehensively declares the beneficial interests there is ‘no room for the application of the doctrine of resulting, implied or constructive trusts unless and until the conveyance is set aside or rectified’ and, as per the decision of the House of Lords in Pettitt v Pettitt [1970] AC 777, the severance of a beneficial joint tenancy results in a tenancy in common in equal shares.

Be that as it may, since 2007 it has generally been regarded as trite law that an express declaration is conclusive unless rectified, rescinded, varied by subsequent agreement or affected by proprietary estoppel.

In Pink v Lawrence (1978) 36 P&CR 98, the Court of Appeal had earlier emphasised that:

‘where there is an express declaration of trust, the doctrine of constructive trusts cannot be referred to to contradict the expressly declared trust. The doctrine of constructive trusts is one which applies in circumstances where there is no declared trust.’

The decision in Stack v Dowden necessarily therefore posed important questions as to what kinds of ‘subsequent agreement’ will suffice to displace a prior express declaration of trust and whether a subsequent agreement capable of giving rise to a common intention constructive trust will do so.

Many appear to have taken the view, reflected in the judgment of ICC Judge Barton in Re Iqbal [2024] EWHC 49 (Ch), that one express declaration could only be superseded by another express declaration, complying with the statutory requirement in the Law of Property (Miscellaneous Provisions) Act 1989, s 2 (i.e. the requirement for signed writing). The rationale underpinning such a view is not difficult to follow, given the powerful public policy arguments in favour of clarity, certainty and finality, for the benefit of both the owners of the property and third parties such as potential creditors. After all, as Ward LJ memorably and forcefully observed when admonishing conveyancing solicitors in Carlton v Goodman [2002] EWCA Civ 545, at [44], an express declaration is intended to ‘be conclusive and save all argument’. Given that the decision in Hudson v Hathway [2022] EWCA Civ 1648 provides that a simple email can satisfy the requirements of the 1989 Act and there is no requirement for a formal legal document endorsed with a ‘wet ink’ signature, it might be said, it is not a lot to ask of those who have expressly declared their intentions once to do so again if their intentions change.

Nevertheless, in the recent case of Re Cynberg [2024] EWHC 2164 (Ch), the contrary view was firmly and clearly taken by James Pickering KC, sitting as a deputy High Court judge, who dismissed the appeal of two trustees in bankruptcy, Ann Nilsson and Edward Thomas, against the earlier decision of District Judge Wilkinson that Collette Cynberg had acquired the beneficial interest of her former husband, Stuart Cynberg (who had later been made bankrupt), pursuant to an agreement which did not satisfy the statutory requirements but did, in the view of both judges, give rise to a common intention constructive trust.

Mr and Mrs Cynberg purchased the subject property, in their joint names, in 2001 and declared in the Form TR1, at box 11, that they were to hold the property on trust for themselves as joint tenants. They married in 2003 and had two children, born in 2006 and 2008, before finally separating in 2009. Following their separation, they agreed orally that Mr Cynberg disavow all his interest in the property, provided Mrs Cynberg agreed to leave it to the children in the event of her death. Thereafter, she bore sole responsibility for all outgoings relating to the property, including the mortgage repayments and, having received a bequest from her late mother in around 2014, funded minor works of improvement to the property. They eventually divorced in March 2018. In June 2018, HM Revenue and Customs petitioned for Mr Cynberg’s bankruptcy and he was declared bankrupt in October 2018. The appellant trustees in bankruptcy were appointed in March 2019. They asserted that Mr Cynberg had retained a 50% interest in the property, which had vested in them. Mrs Cynberg disagreed and issued proceedings, which were resolved in her favour when District Judge Wilkinson gave judgment in November 2023, finding that she held the whole beneficial interest under either a common intention constructive trust or as a result of proprietary estoppel.

The appellant trustees appealed on four separate grounds. Ground 1 raised an issue of principle, namely whether an express trust could be displaced by a common intention constructive trust. Grounds 2 to 4 inclusive attacked the district judge’s findings in relation to various matters in issue. Permission to appeal was granted on the latter grounds but refused on ground 1, when Trower J considered the matter on paper. The appellants renewed their application for permission to appeal on ground 1 and that application was listed to be heard at a ‘rolled up’ hearing. After hearing argument, like Trower J before him, James Pickering KC refused the appellants permission to appeal on ground 1. He dismissed the appeal on grounds 2 to 4 inclusive.

In his judgment, the deputy High Court judge gave detailed consideration to four cases decided after Stack v Dowden but before the instant case: Clarke v Meadus [2010] EWHC 3117 (Ch); Pankhania v Chandegra [2012] EWCA Civ 1438; Bahia v Sidhu [2022] EWHC 875 (Ch); and Re Iqbal.

In Clarke v Meadus, Warren J had allowed an appeal against the decision of a Master to strike out a claim to a beneficial interest in a property pursuant to a constructive trust in respect of which there was an express declaration of trust, on the basis that they ‘did not address the question [of] whether a constructive trust might have arisen after that date to displace the express trusts declared’, adding: ‘Nothing in Stack v Dowden or Goodman v Gallant can be read as suggesting that this is not possible: it all depends on the facts.’

In Pankhania v Chandegra, it was asserted that a constructive trust arose at the time of the purchase, notwithstanding an express declaration in different terms. At [13], Patten LJ held that, in the circumstances, there was ‘no need for the imposition of a constructive or common intention trust … nor any possibility of inferring one’. He also stated, at [22], that it was ‘always open to [the parties] to have executed a deed varying their beneficial interests’.

In Bahia v Sidhu, Joanna Smith J expressed much the same view as would ultimately be expressed by James Pickering KC in Re Cynberg. However, since the central issue in Bahia v Sidhu was as to whether an express trust could be overridden by a prior equity, and not a subsequent one, her comments were obiter dicta.

It follows that Re Cynberg is the first substantive decision in which a determination has been made, as part of the ratio decidendi, on the question of what kind(s) of subsequent agreement will suffice to displace a prior express declaration of trust. The answer is said to be that an oral agreement which inevitably does not satisfy the statutory requirement for signed writing but does give rise to a properly constituted constructive trust will suffice.

There is no possibility of the higher appellate courts opining further on the question, in this case, because pursuant to the Access to Justice Act 1999, s 54(4), a refusal of permission to appeal after an oral hearing is final and not susceptible to challenge on any further appeal.

The remaining grounds, 2 to 4, were dismissed on the basis that the district judge’s findings of fact were upheld, and indeed firmly endorsed, by the deputy High Court judge.

Whether this case is a welcome development or not will probably depend on the extent to which one sees recent developments in the law of constructive trusts as positive.

On one hand, if express declarations of trust can be displaced other than by signed writing, then there is clearly far greater scope for disputes as to the beneficial ownership of property than if they cannot. If these arguments lead to litigation, the resulting cases may be costly, due to the inherent uncertainties in resolving what people agreed orally or what agreements can be inferred from or imputed by reference to their conduct. Equally, it could undermine the position of third parties, as here, where the trustees in bankruptcy will have less to distribute to Mr Cynberg’s creditors than had the court simply looked to the TR1.

On the other hand, if a purpose of equity is to protect against unconscionable consequences of a strict application of the law, continued expansion of it to protect someone like Mrs Cynberg is necessary. This position can be reinforced by the judge’s observation, at [60]:

‘Following the separation, Mrs Cynberg began paying the entirety of the mortgage repayments; but on the Trustees’ case she only received 50% of the benefit of those payments in terms of increased equity, with the benefit of the other 50% going to Mr Cynberg. In my judgment, this was a significant detriment suffered by her; moreover, the idea that some 15 years after stopping paying anything towards the mortgage Mr Cynberg could turn around and claim half of the equity in the Property (not that he ever did) would seem to be wholly unconscionable and (to use the expression used in Guest v Guest [2022] UKSC 27) gut-wrenching.’

Finally, as a footnote, it is worth noting that an unusual feature of this case was that Mr and Mrs Cynberg were married but separated a number of years before Mr Cynberg’s bankruptcy, during which time they failed to initiate proceedings for ancillary relief (as it was then known). This is a reminder, if any is needed, of the importance of resolving financial remedy proceedings promptly after separation. In this case, the judge noted, at [59], that had Mrs Cynberg done so it was highly likely she would have obtained the whole beneficial interest in the property.

However, for parties who are unwilling to take this step, another procedural route is available under the Married Women’s Property Act 1882, s 17, which allows either spouse, whilst still married, to apply to the court for summary determination of their ownership of property. Clearly this would have been more expensive than simply agreeing with Mr Cynberg to enter into a written agreement evidencing their new ownership but may be an option if the spouse is unwilling or unable to engage. A similar power exists in respect of civil partners under the Civil Partnership Act 2004, s 66, and may also be exercised within three years of divorce (pursuant to the Matrimonial Proceedings and Property Act 1970, s 39) and by engaged-but-unmarried couples within the three years following the end of their engagement (pursuant to the Law Reform (Miscellaneous Provisions) Act 1970, s 2(2)).