Goodman v Gallant

An express and comprehensive declaration of trust in a conveyance conclusively defines the beneficial interests in the property or its proceeds. Resulting, implied and constructive trust principles cannot contradict it unless the instrument is first rectified or rescinded for fraud or mistake.

Where two persons are expressly declared to hold as beneficial joint tenants, severance converts that interest into a tenancy in common in equal shares. Sections 34 to 36 of the Law of Property Act 1925 provide conveyancing machinery and do not alter the nature or extent of beneficial interests.

The plaintiff and defendant bought a house from the plaintiff’s former husband. The conveyance declared that they held the property on trust for themselves as beneficial joint tenants.

After the plaintiff gave notice severing the joint tenancy, she sought a declaration that she owned three quarters of the beneficial interest and the defendant one quarter. The registrar held that they held equal shares, and Mr Justice Hollis dismissed her appeal.

The central issue before the Court of Appeal was whether evidence of the parties’ alleged intentions and contributions could displace the express declaration of beneficial joint tenancy, and whether severance produced equal shares.

1. Appeal dismissed. Lord Justice Slade delivered the judgment of the court. The conveyance expressly declared the parties’ beneficial interests. In the absence of rectification or rescission, that declaration conclusively determined their rights.

2. Sections 34 to 36 of the Law of Property Act 1925 may impose a trust for sale as a matter of conveyancing machinery. They do not define, enlarge or reduce the beneficial interests in the proceeds of sale. Accordingly, an express declaration of those interests is not redundant.

3. Where no express declaration exists, a claimant may rely on resulting, implied or constructive trust principles. But those principles have no room to operate against a comprehensive express declaration. The court followed Wilson v Wilson [1963] 1 WLR 601, and treated the reasoning in Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886 as confirming that conclusion.

4. A beneficial joint tenancy between two persons carries the ordinary incident that severance creates a beneficial tenancy in common in two equal shares. The words in this conveyance could not be construed as preserving unequal interests after severance.

5. The court disapproved the contrary reasoning in the majority judgments in Bedson v Bedson [1965] 3 AER 307 and Lord Denning MR’s observations in Bernard v Josephs [1982] Ch 391. It held that authorities concerning joint legal ownership without an express declaration were distinguishable.

The plaintiff had disclaimed any claim for rectification. The registrar and judge had therefore correctly held that, following severance, the parties were beneficially entitled in equal shares. The appeal was dismissed with costs, subject to the order delaying enforcement until sale of the dwelling-house.

• Court of Appeal: dismissed the plaintiff’s appeal and affirmed that the parties held equal beneficial shares after severance.
• High Court, Family Division: Mr Justice Hollis dismissed the plaintiff’s appeal from the registrar’s order on 28 June 1985.
• Principal Registry: Mr Registrar Turner declared on 22 November 1984 that the parties held the property on trust for themselves in equal shares.