Unmarried couple – Cohabitees purchasing family home in joint names – No express declaration of beneficial interests – Respondent providing major part of purchase price – Parties keeping finances separate – Court awarding respondent 65% of beneficial interest – Whether respondent proving common intention that beneficial shares should be other than equal – Appeal dismissed
The parties were a cohabiting couple who purchased a house in 1993 as joint registered proprietors. The conveyance on the Land Registry form contained no declaration of trust as to the beneficial interests, but did include a declaration that the survivor could give a good receipt for capital moneys arising from a disposition of all or part of the property. The parties funded part of the £190,000 purchase price for the property by a loan of £65,000, secured by a mortgage for which they were jointly and severally liable and by two endowment policies: one in joint names and one in the respondent’s sole name. The remainder of the price came from the proceeds of sale of another property registered in the respondent’s sole name and savings from the respondent’s building society account. Following the purchase, each party made lump sum repayments off the mortgage loan. The appellant took responsibility for the mortgage interest and joint endowment policy premiums, while the utility bills were all in the respondent’s name. The parties kept separate bank accounts and made a series of separate investments and savings. They went on to have four children together.
The parties separated in 2002 and the appellant moved out. In subsequent county court proceedings, he sought, and was granted, an order for the sale of the property and an equal division of the proceeds. On an appeal by the respondent, an order was made that the proceeds should be divided as to 65% to the respondent and 35% to the appellant to reflect their respective contributions to the purchase price and the upkeep of the property. The appeal court held that the declaration as to the receipt for capital moneys could not be taken as an express declaration of trust, and that it could not be relied upon to draw an inference as to the parties’ intentions in circumstances where they had not understood its significance. The appellant appealed.
Held: The appeal was dismissed.
(1) In determining a couple’s beneficial interests in a property held in joint names, in the absence of an express declaration as to the beneficial interests, the applicable principles of law were the same whether or not the couple in question were married, although the inferences to be drawn from their conduct might be different: Bernard v Josephs [1982] Ch 391 applied. In case of a joint legal ownership, the starting point was to assume that equity followed the law and that there was also joint beneficial ownership. Accordingly, a conveyance into joint names indicated both a legal and beneficial joint tenancy unless and until the contrary was proved.
(2) In proving the contrary, the presumption of resulting trust, under which shares were held in proportion to the parties’ financial contributions to the acquisition of the property, was not a rule of law: Pettitt v Pettitt [1970] AC 777 applied. Instead, the court would seek the result that reflected what the parties must, in the light of their conduct, have intended: Oxley v Hiscock [2004] EWCA Civ 546; [2004] 3 WLR 715 applied. The burden was upon the joint owner who claimed to have something different from a joint beneficial interest to prove that that was so, and in what way. That was not a task to be lightly embarked upon, and in joint names cases it was unlikely to lead to a different result unless the facts were very unusual. It could not be the case that thousands of transfers into joint names were vulnerable to court challenge merely because the owners may have contributed unequally to their purchase. Many factors other than financial contributions might be relevant in ascertaining the parties’ true intentions, including how the parties had arranged their finances and their individual characters and personalities.
(3) In the instant case, the respondent had shown that the parties had intended something different. Not only had the respondent made a much greater financial contribution to the acquisition of the property but the parties had kept their finances strictly separate, and the only regular expenditure to which the appellant had committed himself was the interest and premiums on the property. Those factors made the case a very unusual one; few unmarried couples who had lived together for so long and had children together would have kept their financial affairs as rigidly separate as had the parties in the instance case. That was indicative that they had not intended their shares to be equal, and still less that they had intended a beneficial joint tenancy with the right of survivorship should one of them die. The respondent had made a good case for having a 65% share.
Lucy Theis QC, Francis Wilkinson and Miriam Shalom (instructed by Attiyah Lone) appeared for the appellant; Christopher Lundie and Emily Saunderson (instructed by Walter Jennings & Son) appeared for the respondent.
Sally Dobson, barrister
