Joint ownership – Beneficial interests – Unmarried couple – Parties purchasing holiday home in joint names without declaration of trust – Claimant paying whole of purchase price – Parties’ relationship ending – Defendant excluding claimant from property – Claimant claiming beneficial ownership of entire property – Whether parties having common intention of joint beneficial ownership – Whether defendant liable to pay claimant occupation rent – Claim allowed in part
On 31 March 2009, the claimant and the defendant, then an unmarried couple in their fifties, caused a large country house known as Tadmarton House, Lower Tadmarton, near Banbury in Oxfordshire to be conveyed into their joint names with no declaration of trust. They used it as a holiday and weekend home. The price was £1,550,000. The parties maintained separate bank accounts and they never pooled their resources. The claimant paid the whole of the purchase price and all the other costs associated with the acquisition. Not long afterwards, the relationship began to break down when the claimant formed a liaison with another woman.
The claimant contended that he and the defendant acquired the property on the basis that it was to be entirely his in equity, or alternatively, that the property later became entirely, or mostly, his in equity. Although the relationship broke down in the latter part of 2009, there were times thereafter when the parties’ relationship was partially rekindled and there were occasions when they both spent time at the property together, but primarily it was the defendant who continued to use the property from late 2009 until 2018. On that basis, the claimant also claimed an occupation rent from the defendant who maintained that the parties intended to create and to maintain a beneficial joint tenancy and that there was no basis for the imposition of an occupation rent.
Held: The claim was allowed in part
(1) The starting point was that equity followed the law and thus the parties were to be taken as joint-tenants in equity. That was a presumption which was not to be lightly dismissed because it was how both parties were likely to see their relationship developing. However, the presumption could be displaced by showing that the parties had a different common intention when the property was first acquired or that they formed a different common intention at a later date, providing that there was detrimental reliance. The relevant intention of each party was the intention which was reasonably understood by the other party to be manifested by that person’s words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. Each case would turn on its own facts. The search was to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it: Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2012] 1 AC 776; [2011] PLSCS 264 followed.
Factors other than financial contributions which might be relevant to divining the parties’ true intentions included: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the purpose for which the home was acquired; the nature of the parties’ relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both initially and subsequently; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses. The express or inferred common intention would usually also determine the size of the shares of the co-owners. The court should give effect to the intention thus discovered. If there was no evidence to that effect, the court might impute an intention so as to ensure that the co-owners obtained that share which the court considered fair having regard to the whole course of dealing between them and the property.
(2) The present case was not the typical domestic case. Although the parties were in a relationship at the time of acquisition, the property was not bought as a family home in which they were to live together on a full-time basis. It was a weekend retreat. Whilst they were still together as a couple, the parties spent time together at each other’s properties and time together at the disputed property but they had independent lives and their circumstances were not the typical domestic circumstances of a cohabiting couple buying a quasi-matrimonial home with the assistance of a mortgage. The claimant provided the whole of the purchase price. There was no mortgage and no financial contribution at all from the defendant to the acquisition of the property. The parties never pooled resources or had a joint bank account either before or after the date of acquisition. However, if the court could ascertain the parties’ shared intentions, to be deduced objectively from their words and their actions, then whatever the fairness of the ensuing result, it was not open to the court to impose a solution upon the parties in contradiction to those intentions.
The key to understanding joint tenancies and tenancies in common was always to consider the legal estate separately from the equitable interest. The only intention discernible to the defendant or reasonably understood by her to be manifested by the claimant’s words and conduct at the material time was a common intention to own the property as beneficial joint tenants.
(3) An occupation rent might be ordered in any case where that was necessary to do broad justice or equity between the parties, applying the statutory principles derived from sections 12-15 of the Trusts of Land and Appointment of Trustees Act 1996, having due regard to the intentions of the parties as creators of the trust and the purposes for which the property was held. On the court’s findings the defendant unreasonably excluded the claimant and thereby had the exclusive use of the property every weekend for six years. As she was a beneficial joint tenant, the figures had to be adjusted accordingly but the appropriate calculation was 6 years x 52 weeks x 3 (days) x the appropriate daily rate x 50%. Accordingly, the occupation rent or compensation payable under section 13(6) of the 1996 Act was £59,958. That figure did justice between the parties, giving due regard to the relevant statutory considerations and the findings of fact.
Paul Dipré (instructed by Direct Access) appeared for the claimant; Thomas Roe QC and Simon Lillington (instructed by Direct Access) appeared for the defendant.
Eileen O’Grady is a barrister
