Co ownership case list - a quick lost to some of the leading cases PDF

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a quick lost to some of the leading cases ...

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Co ownership case list Goodman v Gallant [1986] Fam 106 Court of Appeal The claimant, Mrs Goodman, had a 50% beneficial interest in the matrimonial home. Her husband held the legal title. He left the home and five years later Mrs Goodman developed a relationship with the defendant Mr Gallant who moved into the house. Two years later they entered negotiations to purchase Mr Goodman's half share in the house. No formal valuation was undertaken but it was estimated the house was worth £17-18,000. Mr Goodman agreed to convey the property to them for £6,700. The purchasers' declaration of trust stated that they held the property as joint tenants. Mrs Goodman later gave notice to sever the joint tenancy. She later sought to argue that she held 75% of the beneficial interest based on the fact that she already owned 50% of the beneficial interest and contributed to the purchase of the remainder. Held: Mrs Goodman was only entitled to 50% of the beneficial ownership. In the absence of fraud or mistake, the declaration of trust was conclusive as to the parties respective ownership rights. The extent of the parties relative contributions was irrelevant. Pankhania v Chandegra [2012] EWCA Civ 1438 Court of Appeal In July 1987 the claimant's uncle had wished to purchase a property but was not eligible for a mortgage. The claimant, aged 19, agreed to help purchase the house on behalf of his uncle. The uncle paid the deposit and the house was conveyed to the claimant and defendant who was the uncle's sister. The remainder of the purchase price was provided by mortgage taken out by the claimant and defendant. There was an express declaration of trust to the effect that the claimant and defendant held the beneficial interest in equal shares as tenants in common. The intentions of parties were that the uncle would eventually live in the property and they would sell their shares to him. The defendant married and lived in the property and paid the mortgage but this was not intended to be a long term arrangement. However, she later changed the locks and refused entry to the claimant and refused to sell to the uncle. She claimed that it was always her intention to use the house as her

matrimonial home. The uncle died in 2003 and the claimant then started making payments on the mortgage. The claimant then sought an order for the sale of the property and division of the net proceeds of sale in equal shares. The trial judge found for the defendant and refused to order sale. The claimant appealed as the judge had made no mention of the express declaration of trust. Held: The order for sale was granted and the division of the proceeds in equal shares was ordered.

Mummery LJ: "In the absence of a vitiating factor, such as fraud or mistake, as a ground for setting aside the express trust or as a ground for rectification of it, the court must give legal effect to the express trust declared in the transfer. In the absence of such claims the court cannot go behind that trust. The understanding that the property was to be the defendant's matrimonial home, the fact that the claimant never actually lived there, and the fact that he had no involvement in the property other than lending his name to the purchase of the property for the purpose of obtaining a loan on mortgage from the Market Harborough Building Society in 1987 have never been coupled with any counterclaim by the defendant to set aside or to rectify the express trust."

Stack v Dowden [2007] 2 AC 432 House of Lords Ms Dowden and Mr Stack were co-habitees. They purchased a house in their joint names but made no declaration as to entitlement of the beneficial interest in the property. The purchase price of £190,00 came from £129,000 of MS Dowden’s savings and sale of her previous property. The remainder came from an interest only mortgage and two separate endowment policies. Mr Stack paid the mortgage instalments totalling £27,000, Ms Dowden paid £38,000. Ms Dowden paid the majority of the utility bills. They had separate bank accounts and made separate investments. The parties then separated and Mr Stack brought an action for sale of the property and distribution of the proceeds in equal shares.

Held: The starting point for determining beneficial interests where the legal title was held jointly is that beneficial interest will also be held jointly. This presumption may be displaced where there is evidence that this was not their intention. Baroness Hale “In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.” “This is, therefore, a very unusual case. There cannot be many unmarried couples who have lived together for as long as this, who have had four children together, and whose affairs have been kept as rigidly separate as this couple's affairs were kept. This is all strongly indicative that they did not intend their shares, even in the property which was put into both their names, to be equal (still less that they intended a beneficial joint tenancy with the right of survivorship should one of them die before it was severed.) Before the Court of Appeal, Ms Dowden contended for a 65% share and in my view she has made good her case for that.” Midland Bank v Cooke [1995] 2 FLR 995 Court of Appeal The matrimonial home was conveyed into the sole name of Mr Cooke. The purchase price of £8,500 was funded by a mortgage of £6,450 taken out in the name of Mr Cooke (Mrs Cooke was a student at the time and had no income) £1,000 of the purchase price came from a wedding gift from Mr Cooke's parents to both of them the remainder was provided out of Mr Cooke's savings. Mrs Cooke later worked as a teacher but did not directly contribute to the mortgage payments. She did discharge many of the house hold bills. She also had undertaken substantial improvements, alterations and decoration of the house. Mr Cooke later re-mortgaged the house to secure his business debts. The bank asked Mrs Cooke to sign a consent form postponing any interest that she held to the bank. Mr Cooke failed to keep up with the payments and the bank

sought possession of the property. Mrs Cooke claimed to be entitled to a beneficial interest in the property and claimed that she had signed the consent form under undue influence. The trial judge held that Mrs Cooke had a beneficial interest in the property amounting to 6.47% and the consent form had been obtained by undue influence. Mrs Cooke appealed contending that the trial judge had been wrong on the quantification of her interest. Held: Mrs Cooke was entitled to 50% of the beneficial interest.

Lord Justice Waite: "I would therefore hold that positive evidence that the parties neither discussed nor intended any agreement as to the proportions of their beneficial interest does not preclude the court, on general equitable principles, from inferring one"

"The general principle to be derived from Gissing v Gissing and Grant v Edwards can in my judgment be summarised in this way. When the court is proceeding, in cases like the present where the partner without legal title has successfully asserted an equitable interest through direct contribution, to determine (in the absence of express evidence of intention) what proportions the parties must be assumed to have intended for their beneficial ownership, the duty of the judge is to undertake a survey of the whole course of dealing between the parties relevant to their ownership and occupation of the property and their sharing of its burdens and advantages. That scrutiny will not confine itself to the limited range of acts of direct contribution of the sort that are needed to found a beneficial interest in the first place. It will take into consideration all conduct which throws light on the question what shares were intended. Only if that search proves inconclusive does the court fall back on the maxim that "equality is equity"."

Gissing v Gissing [1971] AC 886 House of Lords

Mr & Mrs Gissing divorced after 31 years of marriage. The legal title of the matrimonial home vested in Mr Gissing alone. Mrs Gissing claimed to be entitled to half of the beneficial interest. The purchase price of £2,695 was provided by a mortgage of £2,150, a loan of £500 taken out by the husband and the remainder came from his own money. Mrs Gissing provided £220 towards furniture and laying a lawn. Mr Gissing paid the mortgage installments and loan installments. He also gave Mrs Gissing an allowance to pay for the running costs of the house. They had separate bank accounts. She used her money to purchase clothes for herself and their child and some household expenses. Held: Mr Gissing held the house absolutely. Mrs Gissing had no beneficial interest in the property. There was no evidence of a common intention that she was to share in the beneficial interest of the house. Her contributions were not sufficient to infer a common intention.

Lord Diplock:

"A resulting, implied or constructive trust—and it is unnecessary for present purposes to distinguish between these three classes of trust—is created by a transaction between the trustee and the cestui qui trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui qui trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui qui trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land... On what then is the wife's claim based? In 1951 when the house was purchased she spent about £190 on buying furniture and a

cooker and refrigerator for it. She also paid about £30 for improving the lawn. As furniture and household durables are depreciating assets whereas houses have turned out to be appreciating assets it may be that she would have been wise to have devoted her savings to acquiring an interest in the freehold ; but this may not have been so apparent in 1951 as it has now become. The court is not entitled to infer a common intention to this effect from the mere fact that she provided chattels for joint use in the new matrimonial home; and there is nothing else in the conduct of the parties at the time of the purchase or thereafter which supports such an inference. There is no suggestion that the wife's efforts or her earnings made it possible for the husband to raise the initial loan or the mortgage or that her relieving her husband from the expense of buying clothing for herself and for their son was undertaken in order to enable him the better to meet the mortgage instalments or to repay the loan. The picture presented by the evidence is one of husband and wife retaining their separate proprietary interests in property whether real or personal purchased with their separate savings and is inconsistent with any common intention at the time of the purchase of the matrimonial home that the wife who neither then nor thereafter contributed anything to its purchase price or assumed any liability for it, should nevertheless be entitled to a beneficial interest in it." Lloyds Bank v Rosset Lloyds Bank v Rosset [1989] Ch 350 House of Lords Mr Rosset became entitled to a substantial sum of money under a Swiss Trust fund. He wished to use the money to purchase a family home. Mrs Rosset found the property in question which was a derelict farmhouse requiring extensive modernisation and improvements. Mr Rosset liked the farmhouse and purchased it with money from the Swiss trust fund. In accordance with the terms of the trust fund, the property was conveyed into Mr Rosset's name alone on 17th Dec 1982. Mr Rosset arranged an overdraft facility with Lloyds Bank of £15,000 to cover the improvements needed for the farmhouse this overdraft was secured by a charge on the property which was registered on 7th Feb

1983. Mrs Rosset made no financial contribution to the purchase price but carried out supervision of the builders, planning of the renovation works and a substantial amount of redecoration of the farmhouse. Mrs Rosset was allowed into possession of the property prior to exchange of contracts to commence the renovation. The overdraft limit was later raised to £18,000 and this was exceeded. The bank then commenced proceedings for possession. Mrs Rosset sought to defeat the possession by claiming to be entitled to a beneficial interest under a constructive trust which became an overriding interest under s.70(1)(g) by reason of her occupation.

Held: Following Abbey National Building Society v Cann, the relevant date for actual occupation to protect an interest for the purposes of s.70 (1) (g), is the date of the transfer not the date of registration. In any event Mrs Rosset did not have an interest in the house arising from a constructive trust as there was insufficient evidence that there was a common intention that she would take a share in the beneficial interest and given that Mr Rosset had provided the whole purchase price and cost of renovations her efforts in supervising the builders and redecoration were insufficient. Lord Bridge:

"The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner

entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel."

"It was common ground that Mrs. Rosset was extremely anxious that the new matrimonial home should be ready for occupation before Christmas if possible. In these circumstances it would seem the most natural thing in the world for any wife, in the absence of her husband abroad, to spend all the time she could spare and to employ any skills she might have, such as the ability to decorate a room, in doing all she could to accelerate progress of the work quite irrespective of any expectation she might have of enjoying a beneficial interest in the property."

James v Thomas

James v Thomas [2007] EWCA Civ 1212 Court of Appeal Mr Thomas was the sole registered proprietor of ‘The Cottage’ in which Miss James claimed a beneficial interest. The Cottage originally belonged to Mr Thomas’ parents. He inherited a one third share in the property on their death. He then brought the remainder shares from his siblings. At the time of acquiring the house he did not know Miss James. It wasn’t until three years later that he formed a relationship with her. Miss James moved into The Cottage in May 1989. Mr Thomas was an agricultural building and drainage contractor. He ran his business form The Cottage. Miss James had undertaken considerable amount of work in the business without payment. She had also given Mr Thomas £5,000 from her divorce settlement for him to pay off a tax bill, she had undertaken work on The Cottage and had provided work which lead to the acquisition of a piece of adjoining land. He had made assurances to her that she would be “well provided for” in the event of

his death, that the work she had undertaken would benefit both of them and he had redrafted his will in her favour. In Feb 2004 the relationship broke down and she moved out of The Cottage. Held: She was not entitled to a beneficial interest. The assurances given were insufficient to found a claim of common intention constructive trust. Sir John Chadwick: “it is, to my mind, at least as likely that the observation "this will benefit us both" (in relation to improvements to the property) was intended to mean - and was understood at the time to mean - that the improvements would have the effect that the property in which they were living as their home would be more comfortable and more convenient: or, to put the point another way, that the improvements to the property would be reflected in an improvement to the quality of their life together. It is, I think, unreal to suggest that an observation in those terms, made in that context, was intended or understood to be a promise of some property interest, either present or in the future. Nor, as it seems to me, can it be said that the observation "this will benefit us both", when made in the context of a discussion of matters relating to the business, was intended or understood to be a promise of some property interest in The Cottage. Given that the outgoings of both parties were funded by the receipts of the business -and that, from about 1999, the business was carried on in partnership - there is no reason to think that the observation "this will benefit us both" (in relation to the business) was more than a statement of the obvious: what was of benefit to the business was of benefit to both Mr Thomas and Miss James, for whom the business was their livelihood. The second of the assurances said to have been relied upon was that "He told her that in the event of his death 'you will be well provided for'". I find it impossible to see that as a representation that Miss James was to have a present proprietary interest in the property - or as a representation that she would have a proprietary interest in the property during Mr Thomas's lifetime. It was, as it seems to me, a representation as to what the position would be after Mr Thomas' death. And it must, I think, be seen as a representation made on the basis of a common assumption that the parties would still be living

together when that eventuality occurred. It is most unlikely to have been intended or understood as a representation that, if Miss James predeceased Mr Thomas, a share in the property would devolve through her estate (to whoever might be the beneficiary under her will or intestacy). And, as it seems to me, it is most unlikely to have been intended or understood as a representation that, if the parties were not living together at Mr Thomas' death, she should, nevertheless, have provision out of his estate. There is no reason to give the assurance that, in the event of Mr Thomas' death, Miss James would be well provided for, any wider meaning than that he intended to make a will in her favour. And, as the judge found, that was indeed his intention.”

Tinsley v Milligan [1993] 3 WLR 126 House of Lords The Claimant and Defendant were lovers. Together they purchased a property from which they jointly ran a business by letting out the rooms in the house. It was agreed that the house was to be registered in the name of the Claimant alone. This was so that the Defendant would be able to fraudulently claim social security benefits which would go into their joint bank account. The relationship broke down and the Claimant sought possession of the house asserting full ownership. The Defendant sought a declaration that the property was held on trust for both of them in equal shares. The Court of Appeal applied the public conscience test and held that it would be an affront to the public conscience to allow the Claimant to keep the whole interest in the house. The Claimant appealed to the Lords. Held: The House of Lords rejected the public c...