Whenever two or more people have a legal or a beneficial interest in real property, there will be a trust of land. Ellison v Cleghorn [2013] EWHC 5 (Ch) concerned a joint venture between friends who purchased a piece of land together as tenants in common in equal shares, with the intention of dividing it in half and constructing houses to live in. One of the friends constructed his house and moved in.
The construction of the other house never progressed beyond the foundations and walls, which were demolished because of problems with the work. The disappointed joint venturer claimed that his friend had built a garage of such a height, and depth, and in such a position that it constituted a serious impediment to his ability to build in the area that was available to him. The owner of the garage acknowledged that there was a problem with its height and depth and reduced both, but his friend was still unhappy about the plot that was left to him.
The parties had never formally divided the plots between them and the land was still registered in their joint names. The disappointed joint venturer asked the court for an order for the sale of both plots and for the proceeds to be divided equally between them. Alternatively, he offered to sell his interest in return for the repayment of his original contribution, plus interest.
The owner of the house and garage sought an order for the transfer of his plot into his sole name. Alternatively, he claimed that any division of the proceeds should reflect the fact that he had constructed a substantial house and garage on his plot at his own expense.
The judge reminded the parties that section 14 of the Trusts of Land and Appointment of Trustees Act 1996 enables the court to direct a partition of land in co-ownership, without the beneficiaries’ consent, with or without payment of equality money. Where the parties are already co-owners of land which they intended at the outset should eventually be divided between them, partition is the direct and natural means of achieving that objective.
The court must take into account the intentions of the parties and strive to do justice between them. The property was acquired for division into two homes. One of the parties had substantially achieved that objective and was not to blame for the difficulties encountered by his friend. The parties had agreed on plots of equal area rather than equal value. Neither was entitled to take steps on their own chosen plot that would significantly adversely affect their agreed objective, nor to insist that one plot should be larger than the other. However, each took the risk that their chosen plot might be worth less than the other and the court was not required to award equality money to equalise the value of two equally sized plots.
The disappointed co-venturer did not complain about the position of the garage until it was built and it would be unjust to ignore the fact that he had allowed his friend to build it where he did. Consequently, the judge ordered a partition of the land without payment of any kind.
Allyson Colby, property law consultant
