The Court of Appeal has upheld a ruling that former partners who bought a London home together as joint tenants but later separated now own the property as tenants in common with an 85% to 15% split.
The court rejected an appeal by Kenneth Barnes, who had claimed that it had not been open to a Central London County Court judge to impute an intention to change the share of the beneficial interest in the property, and that the calculation arrived at was plainly wrong.
Barnes and Denise Phillips bought the property on Leyland Road, London, for £135,000 with a mortgage in January 1996 and, during the course of the relationship, Barnes purchased other properties as an investment.
However, he suffered debt problems and, in May 2005, the shared home was remortgaged, with around £65,000 going solely to Barnes to pay off his debts.
The relationship broke down shortly after, and Phillips commenced proceedings seeking a declaration under section 14 of the Trusts of Land and Appointment of Trustees Act 1996.
In February 2014, Judge Madge declared that they held the beneficial interest as tenants in common in shares of 85% in favour of Phillips and 15% in favour of Barnes, the property at that stage considered to be worth around £500,000.
Upholding that decision, Lloyd Jones LJ held that the weight of evidence supported the inference that the parties had intended to alter their shares in the property at the point of the remortgage, which was entered into for the “sole benefit” of Barnes, “in order to pay off debts which he had incurred in his personal capacity”.
Virtually all of the £65,000 – nearly 25% of the equity at that stage – went to Barnes for his personal use, leading Judge Madge to conclude that the common intention at that point was that the share should be 75%-25%.
Lloyd Jones LJ also supported the judge’s decision to make a further 10% adjustment on the basis of mortgage payments over the years since.
Barnes v Phillips Court of Appeal (Longmore, Lloyd Jones and Hayden LJJ) 23 October 2015
Michael Horton for the appellant
Mark Simeon Jones (instructed by Dodd Lewis, Blackheath) for the respondent
