Council property – Weekly tenancy – Doctrine of estoppel – Council transferring property to defendant and mother under right to buy – Defendant claiming to be beneficial joint tenant on mother’s death – Administrators of estate seeking order for sale – Whether very unusual circumstances rebutting presumption of beneficial joint tenancy – Application granted
In 1984, the defendant’s mother was granted a weekly tenancy of a council property that she occupied with her son, the defendant. In 1985, she was offered the right to buy the property at a discount under the Housing Act 1985. The defendant was party to both the mortgage and the transfer.
The transaction was completed in 1989 and both mother and son executed a charge in favour of the council with joint and several liability. The entry in the proprietorship register contained a restriction that no disposition by one proprietor of the land (being the survivor of joint proprietors) under which capital money arose was to be registered except under an order of the court (the form 62 restriction).
No documentary evidence was provided to identify the source of the mortgage payments, which had initially been made in cash. However, after April 2003, the mortgage was paid by standing order from the mother’s joint bank account with her daughter, which had been opened that year. The mother’s pension and attendance allowance were paid into that account from which the utility bills were also paid.
Improvements were made to the property about which the defendant had not been consulted. His mother had also consulted a solicitor and, according to the attendance note, had informed him of her wish to leave her estate to her daughter and the defendant in equal shares. However, no will had been drafted to that effect. The house represented the entirety of the mother’s estate and the defendant continued to live there after her death in 2005.
The mother had died intestate. Two of her children took out letters of administration and applied for an order for sale of the property on the basis that the defendant had no beneficial interest in it. The defendant contended, inter alia, that the property belonged to him as beneficial joint tenant and was his by right through the doctrine of survivorship.
Held: The application was granted.
Under the new approach advocated by the majority of the House of Lords in Stack v Dowden[2007] UKHL 17; [2007] 18 EG 153 (CS) (which applied to not only to cohabiting couples but any domestic relationship, including that between mother and son), the court was under a duty to ascertain the parties’ shared intentions, actual, inferred or imputed, in the light of their conduct. Only in very unusual circumstances would the beneficial interest be different from the legal interest.
Each case turned on its own facts and, in determining the parties’ intentions, the court might consider a wide range of factors. including how the parties had arranged their finances and their individual characters and personalities.
In the present case, the property had been acquired in a very different context from that of the normal cohabiting couple. All the factors pointed to very unusual circumstances and indicated strongly that the parties did not intend their shares in the property to be equal, or for the right of survivorship to be invoked.
However, the fact that the property had been conveyed into joint names, that the defendant was jointly and severally liable under the mortgage, that he was occupying the property at the time of the acquisition and had contributed to the mortgage led to the conclusion that he was intended to have some beneficial interest.
On a strictly arithmetical (resulting trust) basis, it was difficult to justify a beneficial interest of more than 25%. However, under the new approach advocated by the Law Commission, the court was required to take a holistic approach in order to ascertain what shares were intended. On that basis, recognising the subjectivity and uncertainty of the task, the parties were to be taken to have intended that the defendant should have a one-third beneficial interest in the property.
Finally, balancing the wish of the administrators to sell the property for the benefit of the estate and the wish of the defendant to live in the property, it was appropriate to make an order for sale to be postponed for six months.
Tim Hirst (instructed by Cadmans, of Cleckheaton) appeared for the claimants; Simon Stevenson (instructed by Read Dunn Connell, of Bradford) appeared for the defendant.
Eileen O’Grady, barrister
