Trust – Will – Beneficial interest – Claimants contending deceased held property on trust for siblings – First defendant claiming deceased sole beneficial owner – Whether claimants establishing existence of trust – Claim dismissed
In 1930, the deceased acquired a property in his sole name. He obtained a bank loan and loans from his brother and sisters, which were subsequently repaid. The deceased moved to Australia in 1951. He made occasional visits to the UK but did not occupy the property again; it was instead occupied by one or more of his siblings. Despite a number of abortive attempts by his siblings to purchase the property, the deceased was the sole registered proprietor when he died in January 1985.
A draft declaration of trust had been drawn up indicating how the deceased intended to allocate the proceeds of sale of the property among the siblings, but he had not entered into any formal agreement. By a will dated September 1982, the deceased left minor amounts to his siblings. However, the nurse who had cared for him in his final years was named as the residuary legatee.
The claimants were two nephews of the deceased. The first defendant was the sole executor of the deceased’s estate. The claimants contended that the circumstances of the acquisition by the deceased were such that the court should find that he had purchased the property subject to a constructive trust either in favour of his siblings or the last survivor of them, or in favour of the siblings, now, in effect, of their deceased estates, in equal shares. The first defendant claimed that the deceased was the sole beneficial owner of the property.
Held: The claim was dismissed.
The claimants had failed to discharge the burden of proving that the deceased had held the property, on its acquisition and subsequently, on either of the trusts alleged.
Where land was acquired in the sole name of an acquiring party, the burden of proof was on the non-acquiring party to show that there was some agreement, either express or to be inferred from the parties’ conduct at the time of the acquisition, that the beneficial ownership of the property was to be shared between them: Stack v Dowden [2007] UKHL 17; [2007] 2 WLR 831; [2007] 18 EG 153 (CS) applied.
The court should adopt a two stage approach in determining whether such an agreement had been established by considering whether there had been some bargain, promise or tacit common intention between the parties at the time of the acquisition and, if so, whether the claimants had subsequently acted in a manner that was detrimental to them and referable to what had happened on acquisition: Grant v Edwards [1986] Ch 638 considered.
The documentary evidence at the time of the purchase showed that the deceased had provided the entire purchase price. Moneys advanced by way of loan were not, without more, to be treated as contributions to the purchase price of property giving the lender a beneficial interest in that property: Re Sharpe (a bankrupt) [1980] 1 WLR 219 considered.
In the present case, it was not possible to discern the extent of the beneficial class under the alleged trust, which was a prerequisite of the establishment of a trust. The deceased’s actions following the purchase were inconsistent with the existence of such a trust.
The fact that, after its purchase, the property was used as a dwelling and as an assembly point for the deceased’s family did not assist the claimant’s case since the law did not recognise a concept of family property: see per Mustill LJ in Grant at p 651.
Furthermore, there was no evidence that any of the siblings had acted to their detriment in reliance upon any agreement or understanding with the deceased that they would have an interest in the property: Gillett v Holt [2001] Ch 201 distinguished.
Jonathan Seitler QC and Judith Bryant (instructed by Moore & Blatch, of Southampton) appeared for the claimants; Katharine Holland (instructed by Penningtons, of Basingstoke) appeared for the first defendant; the second and third defendants did not appear and were not represented.
Eileen O’Grady, barrister
