Unmarried couple — Properties registered in sole name of one party — Break up of relationship — Whether property held on trust for other party absolutely — Whether interest in property to be apportioned in equal shares — Claim allowed in part
The claimant and defendant were an unmarried couple. They cohabited in the defendant’s flat for three months before the claimant moved out, although their relationship continued. Over the next 18 months, attempts were made to find a house in the country. In 1999, The Mill was purchased for £480,000, of which the defendant borrowed £450,000 by way of mortgage. The property needed extensive renovation and the claimant said that she assumed the role of managing and co-ordinating the work, including the identification and sourcing of materials. She claimed that she did this on the understanding that the property was to be a joint home and that she was to have a half-share in it.
At the same time, an opportunity arose for the claimant to purchase a London flat. She experienced difficulties in raising sufficient funds for the purchase and so the defendant acquired it in his sole name. The defendant claimed that he had acquired it for himself as an investment. However, the claimant argued that he had purchased it as a nominee for her, because his income was sufficient to obtain a mortgage. The claimant provided £7,500 of the deposit and the defendant provided £6,750. Each party claimed that the money was a loan from the other. The claimant maintained that the flat was held by him on trust for her absolutely. The relationship finally came to an end in 2001.
Held: Claim allowed in part.
On the facts, the claimant’s belief that she would have an interest in the flat was entirely reasonable. There was a clear arrangement that the defendant would hold as trustee and not hold beneficially. That was the underpinning of the whole arrangement and it was made before the acquisition. There was an understanding that the flat would be bought for the claimant and, on that understanding, she acted to her detriment when she stopped trying to fund the purchase. In the circumstances, it was inequitable for the defendant to seek to claim it for himself and he therefore held it on constructive trust for the claimant absolutely: Banner Homes Group plc v Luff Developments Ltd [2000] 2 All ER 117 considered and applied.
On the evidence, there was an express arrangement between the claimant and the defendant that she was to have a share in The Mill but no indication of what that share should be. Bearing in mind that the foundation of the right in this case was constructive trust or proprietary estoppel, the interest had to be fair, having regard to the whole course of dealing between the parties in relation to the property: Oxley v Hiscock [2004] EWCA Civ 546 considered.
Scientific analysis was impossible in these cases and the court had to form an overall assessment. In the circumstances, 25% was a proper figure for the claimant’s share, reflecting everything that she had contributed but giving due weight to the defendant’s own considerable contributions.
Michael Roberts and Shelly White (instructed by Reynolds Porter Chamberlain) appeared for the claimant; Michael Ashe QC and Constance Mahoney (instructed by Lake Jackson) appeared for the defendant.
Eileen O’Grady, barrister
