Kelly, R (on the application of) v London Borough of Hammersmith & Fulham

Judicial review is unsuitable for determining a disputed beneficial interest where the issue requires evidence, disclosure and cross-examination. In the absence of an express declaration of trust, beneficial shares are prima facie assessed by reference to the parties’ contributions, including a right-to-buy discount which contributes to the property’s value. Administrative guidance on charging for residential accommodation supplements, but does not replace, the general law of equitable interests. A local authority may protect a potentially enforceable debt by retaining a caution while the beneficial-ownership issue remains unresolved, provided its decision is not irrational or unlawful.

The claimant sought judicial review of the local authority’s decision not to apply for the vacation of a caution registered against her property. The caution secured the authority’s position concerning charges for residential accommodation provided to her deceased mother under the National Assistance Act 1948.

The claimant asserted that her mother had held the legal title on trust for her alone. The transfer document contained no express declaration of beneficial ownership. The central issues were whether the authority had acted unlawfully by retaining the caution and whether judicial review was an appropriate procedure for resolving the disputed beneficial interest.

1. Application dismissed. The authority’s decision not to vacate the caution was lawful. The claimant’s case was misconceived and the authority was awarded its costs.
2. Section 56 of the Land Registration Act 1925 provided the more appropriate procedure for challenging the propriety of a caution. That procedure would permit determination of the beneficial-ownership issue through disclosure, affidavits, oral evidence and cross-examination. Judicial review was confined to reviewing the lawfulness of the authority’s decision and was not a vehicle for the court to resolve disputed facts.
3. The guidance in paragraphs 7.009 to 7.014A of the Charging for Residential Accommodation Guide supplemented the general law concerning equitable interests. It did not replace the rules governing the existence or extent of beneficial ownership.
4. In the absence of an express declaration of trust, the principle in Springette v Defoe [1992] 2 FLR 388 applied. Beneficial shares were prima facie proportionate to direct or indirect contributions, subject to sufficient specific evidence of a different common intention.
5. A right-to-buy discount was not a contribution to the purchase price, but it was a contribution to the value of the property. On the material before the authority, the discount attributable to the mother prima facie represented a 5/12 beneficial interest. The claimant’s mortgage payments supported a 7/12 interest, but did not establish that the mother had no beneficial interest.
6. The evidence did not make it irrational for the authority to retain the caution. The authority had identified a plausible beneficial interest, remained willing to reconsider its position on further evidence, and was entitled to protect the interests of local taxpayers pending agreement or adjudication.
7. For costs, the late acknowledgment of service and late skeleton argument had no causal connection with the costs incurred. The claimant had brought a misconceived claim and was ordered to pay the authority £5,628.