Banner Homes Group Plc v Luff Developments Ltd & Anor [2000] EWCA Civ 18 (28 January 2000)

Banner Homes Group Plc v Luff Developments Ltd & Anor [2000] EWCA Civ 18 (28 January 2000)

No constructive trust arose in favour of Banner Homes because the parties' arrangement was always subject to the execution of a formal shareholders' agreement, and both parties reserved the right to withdraw until such agreement was signed. Banner did not act to its detriment in reliance on any arrangement, as it did not forgo a concrete opportunity to acquire the site independently. Equity cannot convert a qualified arrangement, where withdrawal is reserved, into an unqualified trust obligation.

Citation
[2000] EWCA Civ 18
Parties
Appellant: Banner Homes Group PLC; First Respondent: Luff Developments Limited; Second Respondent: Stowhelm Limited
Jurisdiction
England and Wales
Judgment Date
28 January 2000
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From Chancery Division
Outcome
Appeal dismissed
Legal Topics
Constructive Trusts, Joint Ventures, Proprietary Estoppel, Unconscionability, Remedies in Equity
Equity Property Law Trusts Constructive Trusts Joint Ventures Proprietary Estoppel Unconscionability Remedies in Equity

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Parties

Banner Homes Group PLC

Appellant

Luff Developments Limited

First Respondent

Stowhelm Limited

Second Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From Chancery Division

Legal Issues

  1. 1 Whether a constructive trust arose in favour of Banner Homes over shares in Stowhelm Limited following the breakdown of joint venture negotiations with Luff Developments Limited.
  2. 2 Whether the conduct and representations of Luff gave rise to an equity in favour of Banner Homes despite the absence of a concluded contract.

Ratio Decidendi

No constructive trust arose in favour of Banner Homes because the parties' arrangement was always subject to the execution of a formal shareholders' agreement, and both parties reserved the right to withdraw until such agreement was signed. Banner did not act to its detriment in reliance on any arrangement, as it did not forgo a concrete opportunity to acquire the site independently. Equity cannot convert a qualified arrangement, where withdrawal is reserved, into an unqualified trust obligation.

Court Disposition

Appeal dismissed

Orders

  • No constructive trust declared in favour of Banner Homes over shares in Stowhelm Limited.
  • No order for specific performance or equitable relief granted to Banner Homes.