Bernard v Josephs

Joint names do not, without more, establish equal beneficial shares in a home. The court must infer the parties’ common intention from the conveyance, their contributions and financial arrangements, and the surrounding circumstances. The inquiry is broad rather than purely mathematical. The nature and intended permanence of an unmarried relationship may affect the inferences drawn. Contributions up to separation, and sometimes later events, may be considered, although post-separation payments are ordinarily dealt with by equitable accounting rather than by altering the basic shares. Under section 30 of the Law of Property Act 1925, sale may be ordered once the common purpose has ended, subject to appropriate postponement or an agreed equitable buy-out.

The parties acquired a house in joint names with a joint mortgage while living together. They separated after about 18 months. The defendant remained in occupation and later lived there with his new wife. The claimant sought a declaration that she owned one half and an order for sale under section 30 of the Law of Property Act 1925.

The deputy High Court judge declared equal beneficial ownership, ordered sale with vacant possession after four months, and made equitable adjustments for contributions and post-separation mortgage payments. The defendant appealed, arguing that he owned a larger share and that no sale should be ordered. The central issues concerned the ascertainment of beneficial shares and the appropriate order after the common purpose of the co-ownership had ended.

Appeal dismissed, subject to substitution of the order reached on the appeal. The Court of Appeal accepted that the parties’ basic beneficial ownership was equal and that the first-instance judge had correctly made equitable adjustments. The opinions state the buy-out amount inconsistently: Lord Denning MR and Lord Justice Griffiths refer to £6,000, while Lord Justice Kerr records £5,000. The formal order recorded dismissal of the appeal and no order as to costs save legal aid taxation.

1. Beneficial shares. The conveyance is the starting point. An express declaration of beneficial shares is ordinarily conclusive. Without one, the court must examine all the evidence to infer common intention. Contributions towards acquisition are important, but the inquiry is broad and is not a strictly mathematical exercise. Joint names, joint mortgage liability, pooled resources and the parties’ conduct supported equal ownership here.
2. Relevant timing and relationship. Lord Denning MR and Lord Justice Kerr treated the parties’ position at separation as important, while Lord Justice Griffiths stressed that intention at acquisition is crucial and that later evidence should not automatically be excluded. All accepted that the nature and intended permanence of an unmarried relationship may affect the inferences drawn. The court must not assume that every cohabiting couple intended the same commitment as spouses.
3. Equitable accounting. Post-separation mortgage payments, rents, improvements and exclusive occupation do not automatically alter the basic shares. On sale or buy-out, the court should make appropriate credits and debits, including credit for net mortgage payments and an occupation rent for use of the other party’s share. The defendant’s payments therefore justified accounting adjustments, not a larger basic ownership share.
4. Sale. The first-instance order for sale was justified under section 30 of the Law of Property Act 1925 once the common purpose had ended. The wider question whether sale could be refused or indefinitely postponed against a non-occupying beneficiary was not finally decided, because the parties adopted a buy-out solution on appeal.

• Court of Appeal: dismissed the appeal, subject to the substituted arrangement allowing the defendant to buy out the claimant’s interest, failing which the property was to be sold with vacant possession.
• High Court, Chancery Division: declared that the parties held the beneficial ownership in equal shares and ordered sale with vacant possession after four months, subject to equitable accounting.