Oxley v Hiscock

Where unmarried cohabitants acquire a home in one name without an express declaration of trust, the court must first determine whether they communicated a common intention that each should have a beneficial share. A direct financial contribution will often support that inference and establish detrimental reliance.

If the parties did not agree the size of their shares, the shares are not fixed mechanically by their initial contributions. The court must determine a fair share from the whole course of dealing concerning the property, including contributions to acquisition, mortgage and other ownership or household outgoings. The analysis reaches the same practical result whether expressed as constructive trust or proprietary estoppel.

Oxley v Hiscock concerned the proceeds of sale of a home bought in the appellant’s sole name by an unmarried couple who lived there together. Both had made substantial contributions to its acquisition. The respondent claimed a beneficial half share under section 14 of the Trusts of Land and Appointment of Trustees Act 1996.

Her Honour Judge Hallon in the Bromley County Court accepted that the parties intended that each would have a beneficial share and, after considering their pooled resources and conduct, declared that they held the proceeds equally. The appellant contended that, absent a communicated agreement on proportions, the respondent’s interest was limited to her financial contribution. The central issue was how the respective shares should be quantified where a common intention to share existed but no share proportions had been agreed.

1. Appeal allowed. Chadwick LJ, with whom Mance and Scott Baker LJJ agreed, set aside the equal-share declaration. The respondent was entitled to 40%, not 50%, of the proceeds of sale.

2. In a sole-name case of this kind, the first question is whether the parties had a communicated common intention that each should have a beneficial share. That intention may arise from discussions before acquisition or, where there was no discussion, may readily be inferred from each party’s financial contribution. A non-owner who makes such a contribution acts to his or her detriment in reliance on that intention. This was a constructive-trust or proprietary-estoppel case, rather than one confined to a resulting trust based solely on contributions.

3. The second question is the extent of the shares. Where there is no evidence of agreement about their proportions, the court must determine the share that is fair having regard to the whole course of dealing in relation to the property. Relevant matters include direct contributions and arrangements for mortgage payments, council tax, utilities, repairs, insurance and housekeeping. Springette v Defoe [1992] 2 FLR 388 did not require a strictly proportionate resulting-trust calculation. The approach in Midland Bank v Cooke [1995] 2 FLR 915, as developed in Drake v Whipp [1996] 1 FLR 826, governed the assessment.

4. The county court judge had correctly found a shared beneficial interest, but asked the wrong question when treating the parties’ later conduct as showing that they intended equal shares. She gave undue weight to their treating the house as their joint home and to an earlier property which had not been jointly owned. The respondent’s direct contribution was materially smaller. Treating the parties as having contributed equally to the mortgage-funded balance, in light of their pooled resources and shared burdens, produced a fair division of 60% to the appellant and 40% to the respondent.

• Court of Appeal (Civil Division): Allowed the appeal in Oxley v Hiscock [2004] EWCA Civ 546, set aside the equal-share declaration, and declared that the respondent was entitled to 40% of the sale proceeds. Each party was to bear their own appeal costs.
• Bromley County Court (Her Honour Judge Hallon): In proceedings under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, declared that the parties were equally entitled to the proceeds of sale and ordered a further payment to the respondent.