Family property disputes expose risks of informal financial arrangements

A £2 million family property dispute concerning a residential property is set to proceed to a High Court trial if not resolved by settlement, following the court’s refusal to grant a freezing injunction sought by the mother at the pre-trial hearing. 

Moya Montgomorie, the mother, sought a freezing injunction to prevent the sale of a property worth £1 million registered in the names of her son and daughter-in-law. She claims that the property was to be transferred to her in partial repayment of loans (totalling approximately £1 million) advanced to her son over a number of years. The son, Jason Minns, and his wife Stephanie, dispute these allegations on the basis that the loans received were gifts.

The dispute reflects a wider and increasingly common feature of modern property litigation, where informal family financial arrangements collide with the strict legal framework governing ownership. It also highlights the way in which Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) claims arise in practice, and the evidential and procedural difficulties that follow when legal title and beneficial ownership do not align. The case therefore offers a broader lens through which to examine the operation of TOLATA claims, the role of common intention constructive trusts and proprietary estoppel in determining beneficial ownership, and the practical difficulties created by undocumented family financial arrangements.

How TOLATA disputes arise in practice

TOLATA disputes typically involve the existence of informal financial arrangements between parties, often family members, where significant sums are transferred on the basis of trust and goodwill rather than pursuant to any legal documentation. In the case of Moya Montgomerie, those arrangements existed between mother and son. These arrangements are typically oral, with little or no written record setting out the terms. Even where both parties accept that payments were made, the legal character of those payments is often in dispute. This creates evidential fragility, meaning that the court is required to determine intention and purpose retrospectively, often on incomplete and competing accounts.

More commonly, TOLATA claims arise in the context of unmarried couples, where there is no automatic legal framework governing property division on separation, unlike married couples which are governed by established family law. However, as a result of rising property prices, increasing reliance on parental funding – often referred to as the “Bank of Mum and Dad” – is changing the landscape, with larger intergenerational transfers creating greater scope for dispute.

These financial arrangements frequently begin as informal support, commonly characterised as gifts or temporary assistance. Over time, however, repeated or more substantial transfers of money can blur that initial characterisation. What begins as familial generosity can later be reframed by one party as a loan, or as financial contributions made on the basis of an understanding that property ownership would follow. The absence of clear definition is often what allows disputes to emerge years later.

In practice, disputes of this nature are almost always triggered by relationship breakdown. So long as trust remains intact, there is little incentive for either party to formalise or challenge arrangements. Once that relationship deteriorates, however, the absence of documentation becomes critical, and the court is left to resolve disputes that are as much about credibility and recollection as they are about legal principle.

Proprietary estoppel, common intention constructive trusts, and equitable intervention

Where claimants assert a beneficial interest in property, despite being excluded from the legal title, their claims are often framed through the principles of common intention constructive trust or proprietary estoppel. While both serve to prevent unconscionable outcomes where one party has acted to their detriment based on an informal understanding, they operate on different legal triggers and offer different remedial results.

A common intention constructive trust may arise where there is evidence of a shared intention that the property would be held jointly, or in defined shares, together with contributions made in reliance on that understanding. This intention may be express (based on specific discussions) or inferred from conduct (traditionally through direct contributions towards the purchase price or mortgage).  The claimant must then show they acted to their significant detriment in reliance on this shared belief. Once established, the court identifies the specific share of the property the parties intended, or what is fair in light of their whole course of dealing. 

Proprietary estoppel similarly requires an assurance by the legal owner upon which the claimant reasonably relies and which results in substantial detriment, after which the court considers whether it would be unconscionable for the legal owner to renege on what was promised.

In practice, however, establishing these claims remains exceptionally difficult. Courts must assess whether any assurance was sufficiently clear, and not simply a vague statement of intent, whether reliance can genuinely be established and is referable to the property, and whether detriment is made out on the evidence. Where arrangements are informal and undocumented, these questions become highly inferential, further increasing uncertainty.

Freezing injunctions: high threshold and judicial caution

The case also illustrates the difficulties claimants face when seeking freezing injunctions in TOLATA proceedings. A freezing order is one of the most draconian forms of interim relief available, restricting a party’s ability to deal with or dispose of their assets prior to final determination of the dispute.

To obtain such relief, a claimant must show three primary grounds: (1) a good arguable case, (2) a real risk that assets will be dissipated or put beyond enforcement and (3) justice and convenience (essentially that the hardship to the defendant is outweighed by the need to protect the claimant). The threshold is deliberately high because of the serious impact these orders can have on defendants.

In disputes of this nature, where evidence is often contested and documentation is limited, satisfying that threshold is particularly challenging. Courts will not grant freezing orders on the basis of allegations alone and will expect clear evidence of risk, such as dishonesty, concealment, or steps taken to frustrate enforcement. There must be solid evidence of dissipation, not just a subjective fear that the defendant is untrustworthy.

In this case, the court was not satisfied that such a risk existed and therefore refused the injunction sought. Without clear evidence of an imminent risk or deliberate concealment, the court will not issue a freezing order. That outcome reflects the general judicial reluctance to deploy freezing relief in circumstances where the evidential foundation is uncertain.

Practical implications for practitioners

For practitioners, the dispute reinforces the importance of early intervention and clear documentation in property-related family financial arrangements. The central preventative measure remains clarity at the point of transfer. Where funds are advanced without formal structure, disputes are significantly more likely to arise. In these circumstances, the court will be required to reverse engineer the parties’ intentions, perhaps years after the fact, which itself is inherently unpredictable.

It is therefore essential that advisers encourage clients to record the nature of any financial contribution, whether as a gift, loan, or contribution intended to create a beneficial interest. Even relatively simple written agreements or exchanges or emails can materially affect the evidential position years later.

Practitioners should also be alert to the need to manage expectations within families at the outset. Although such conversations are often difficult, they are frequently the only reliable way of preventing ambiguity that later gives rise to litigation.

From a dispute resolution perspective, early settlement (often via mediation) should be actively considered. The financial and emotional burden arising from TOLATA litigation can be substantial, and the evidential uncertainties mean that outcomes are rarely straightforward. The costs associated with disclosure and document preparation will likely be considerable, so emphasis should be placed on reaching an early settlement before these costs make settlement mathematically impossible.  

Conclusion

Ultimately, disputes of this nature illustrate the tension between informal family arrangements and the formal requirements of property law. While equity provides mechanisms to recognise beneficial interests beyond legal title, those mechanisms depend heavily on evidence, intention, and clarity of understanding.

As property values continue to rise and intergenerational financial assistance becomes more common, TOLATA disputes are likely to remain a recurring feature of property litigation. The key lesson for both practitioners and clients is that clarity, documentation, and early legal advice are essential in avoiding disputes that are, once they reach court, inherently uncertain and often deeply contentious. The best way to win a TOLATA dispute is to ensure it never starts!