Purchase of property – Beneficial interests – Purchase by divorced couple with view to reconciliation – Respondent husband later moving out – Judge finding parties holding equal beneficial shares in property – Whether appellant wife entitled to larger share on basis of subsequent events – Whether respondent estopped from denying appellant’s right to live in property indefinitely – Appeal allowed in part
The appellant and the respondent divorced in 1978. A year later, the respondent sought a reconciliation and a property was purchased for £77,000 for the parties’ joint occupation; the appellant paid at least £31,000 towards the cost of the acquisition. Although, on exchange of contracts, the documentation showed the appellant as the sole purchaser, completion took place by way of a transfer into the respondent’s sole name. In 1980, the respondent moved out of the property but the appellant and their daughter remained in occupation. The daughter eventually moved out.
In 2000, the appellant applied for a declaration that she was beneficially entitled to the entire property. The respondent counterclaimed for: (i) a declaration that he held the property on trust for the two of them in equal shares; and (ii) an order for sale. The judge found that both parties had made a substantial contribution towards the purchase and had a common intention that it was to be a joint and equal venture. He concluded that the respondent held the property on trust for himself and the appellant in equal shares. The judge further found that the respondent had represented to the appellant that, regardless of whose name the property was in, she could live in it for as long as she wished, even if the relationship failed. He concluded that, for the time being, he would not make an order for sale, but left open the possibility that the respondent could request a further order if changed circumstances made a more compelling case for a sale.
The appellant appealed on the grounds that: (i) the judge ought to have awarded her a larger beneficial share, having regard to the course of dealing between the parties, including her assumption of the obligations of ownership of the property and the fact that she had refrained from pursuing any maintenance payments from the respondent under matrimonial law; and (ii) she was entitled by reason of estoppel to a more secure right of occupation. The respondent cross-appealed against the refusal of an order for sale, challenging the judge’s findings of fact as to his representations to the appellant.
Held: The appeal was allowed in part; the cross-appeal was dismissed.
(1) The court had to consider the parties intentions or, if they could not be identified directly, what, from their conduct, the parties must have intended; the court could not simply according to what it considered to be fair. The judge had found the existence of a communicated common intention whereby each of the parties was to have a beneficial interest and that the transaction had been regarded as a joint and equal venture, although subject to a proviso that the appellant could remain at the property for as long as she wished even if the respondent moved out. Although the court was required to survey the entire course of dealing question, including the intended shares, the matters relied upon by the appellant were not capable of throwing light on that question: all post-dated the acquisition and none was indicative of any agreement between the parties, either in the past or later. After the respondent left the property, there had been no dealings between the parties and each had acted unilaterally. To take into account the matters raised by the appellant would be to return to the impermissible question of what the court considered to be fair: Stack v Dowden [2007] UKHL 17; [2007] 2 WLR 831 applied; Oxley v Hiscock [2004] EWCA Civ 546; [2004] 3 WLR 715 considered. Accordingly, the beneficial shares found by the judge should not be disturbed.
(2) The judge had been entitled to make his fining with regard to the respondent’s representations to the appellant. On the judge’s findings of fact, the ingredients of estoppel had been made out: the respondent had made a representation to the appellant, which the appellant had intended to, and did, rely upon to her detriment, in that she had agreed to proceed with the purchase and had committed a substantial amount of her savings. Although a finding of estoppel would not always mean that the promise had to be made good, and the court was required to determine the minimum equity needed to do justice between the parties, on the unusual facts of the instant case, equity did demand that the respondent’s assurance should be made good. The appellant had been persuaded to attempt a reconciliation in circumstances where it was at least foreseeable that the reconciliation would not work, leaving the appellant and her daughter in need of housing, in the daughter’s case until adulthood but in the appellant’s case indefinitely, while the respondent would be able to move back to his other property. A declaration would be made that no order for sale should be made against the will or without the consent of the appellant.
The appellant appeared in person; Ms Tracey Angus (instructed by Hughes Fowler Carruthers) appeared for the respondent.
Sally Dobson, barrister
