Unmarried couple — Family home — Cohabitees purchasing property in joint names — Appellant providing major part of purchase price — Whether parties holding property as joint tenants in equity — Whether parties having right to proceeds of sale in equal shares — Appeal allowed
The county court made an order in proceedings brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 in respect of a dwelling-house registered in the joint names of the appellant and the respondent. The property had been transferred to the parties in 1993. The purchase price of £190,000 had been funded by: (i) a mortgage of £65,000, for which the parties were jointly and severally liable; (ii) the proceeds of sale of another property registered in the sole name of the appellant in the sum of £67,000; and (iii) savings of £58,000 from the appellant’s building society account. The transfer contained no words of trust, but para 2 set out a declaration by the purchasers that the survivor of them would be entitled to give a valid receipt for capital money from a disposition of all or part of the property.
The respondent argued that the property had been transferred to the parties subject to an express trust, and that they had therefore held the beneficial interest in the property as joint tenants in equity. Since the appellant had served notice of severance in November 2002, it was common ground that any joint tenancy would have come to an end at that time. The respondent maintained that the parties had held the property as beneficial tenants in common in equal shares. The judge granted the declaration sought and made an order for sale.
The appellant appealed, arguing that the net proceeds of sale should be divided in the ratio of 65% to the appellant and 35% to the respondent, to reflect their respective contributions to the purchase price and upkeep.
Held: The appeal was allowed.
A declaration as to the power of the surviving party to give a valid receipt did not constitute a declaration of the trusts upon which he or she would hold the proceeds of sale: Huntingford v Hobbs (1992) 24 HLR 652 and Harwood v Harwood [1991] 2 FLR 274 applied. Re Gorman [1990] 1 WLR 616 considered.
A conveyance into joint names that contained no declaration of the beneficial interests did not lead necessarily to the conclusion that the parties were entitled beneficially in equal shares. However, it was open to a person claiming a share in the property to rely upon a constructive trust arising out of the common intention of the parties as to what their respective shares should be.
Where a property had been transferred into joint names, it could be assumed that each was intended to have some beneficial interest in the property. Based upon the conduct of the parties, the court had to infer their common understanding as to the amount of their respective shares, even though that understanding might not have been expressly stated. Each party was entitled to the share that the court considered to be fair having regard to their dealings in relation to the property: Oxley v Hiscock [2004] EWCA Civ 546; [2004] 3 WLR 715 applied and Springette v Defoe (1993) 65 P&CR 1 considered.
In the present case, no inference could be drawn from the declaration in para 2 of the transfer deed as to the parties’ common intention, because it had not been established, either on the facts or in evidence, that both parties understood the significance of the declaration. It was impossible to conclude that their shares should be equal, since that would fail to give proper weight to the appellant’s financial contribution to the purchase of the property. The net proceeds of sale would be divided in the ratio of 65% to the appellant and 35% to the respondent.
Alan Barton (instructed by Walter Jennings & Son) appeared for the appellant; Francis Wilkinson (instructed by Attiyah Lone) appeared for the respondent.
Eileen O’Grady, barrister
