Property – Co-habitees – Equitable interest – Respondent seeking order for sale of English property in which she lived with appellant former partner – Appellant claiming beneficial interest in foreign property owned by respondent – Court ruling that appellant not entitled to interest in foreign property — Whether judge erring in law – Case remitted for rehearing — Appeal allowed
The respondent was a widow who lived in a substantial property that was her former matrimonial home. It was free of mortgage and the respondent was self-supporting. In 1992, she met the appellant, who had a property subject to a mortgage. They decided to live together in the respondent’s property. The appellant divorced in 1993 and the parties became engaged but never married. When the property required renovation, it was transferred into the parties’ joint names but charged with payment to the bank of a loan of £25,000. The appellant was to make the mortgage repayments. The parties also executed a deed of trust to hold the beneficial interest in the property as to two-thirds of the gross value to the respondent and one-third, less the outstanding mortgage, to the appellant. If the parties ceased to live together, each was to have an opportunity to buy out the other or the home was to be sold and the proceeds divided in accordance with their beneficial interest therein.
The respondent was Polish and her parents lived in Poland. In 2002, they purchased land in Poland for the respondent on which they built a house that the respondent and the appellant subsequently lived for a short time in 2006. They then separated. Following the separation, attempts by each party to buy out the other’s interest in the English property failed and the respondent sought an order for its sale with the proceeds of sale to be divided equally.
The appellant did not oppose the sale but brought a counterclaim seeking declarations that there had been an express agreement to hold the Polish property in equal shares or a common intention to do so. The appellant sought an order for the immediate sale of the Polish property or the respondent to pay his contribution towards the purchase of and cost of building that property, totalling £58,500, the first payment of £6,000 being made in March 2004. The respondent argued that the appellant had merely agreed to lend her father £15,000 to put a roof on the property.
The court found that: (i) the appellant had no interest in or entitlement to the Polish property; (ii) the English property should be sold forthwith; and (iii) the net proceeds paid to the parties in equal shares. The appellant appealed.
Held: The appeal was allowed.
The court’s judgment had been flawed since the recorder had failed to make any adequate finding as to the use made of the payment of £6,000 in March 2004. That payment could infer a common intention and the recorder had given no reason why that conclusion should not have been drawn. Irrespective of whether or not the £15,000 paid in July 2004 was a loan, it had been used to facilitate the erection of the roof. However, the recorder had failed to conclude whether that was sufficient, whether on ordinary equitable principles or by virtue of section 37 of the Matrimonial Proceedings and Property Act 1970, to give an interest in the land. Further, he had made no finding as to the use to which a payment of £12,000 had been put, which also could support the appellant’s case.
Accordingly, the matter should be remitted to a different county court judge for reconsideration of the effect, if any, of the payments of £6,000, £15,000 and £12,000 on the claim for a beneficial interest in the Polish property.
The court would also grant a stay of execution of the order for the sale of the English property pending the outcome of the counterclaim in respect of the Polish property. In order for justice to be done, their matters should be resolved together so that, if the appellant did have an interest in the Polish property, he had to be bought out when the English property was sold.
Per curiam: This case required a realistic assessment by each party of the likely outcome. It was, therefore, a paradigm case for mediation. It would be foolish to spend another four days in the county court.
Clifford Darton (instructed by Bennett Griffin LLP, of Worthing) appeared for the appellant; Richard Drew (instructed by Rosemary E Hensby Solicitors, of Worthing) appeared for the respondent.
Eileen O’Grady, barrister