Crossley v Crossley

Where property is transferred into joint names without an express declaration of beneficial interests, the court must first determine whether the parties shared a communicated understanding about beneficial ownership. A resulting trust or presumption of advancement yields to the parties’ proved intention.

A claimant relying on a common-intention constructive trust must have acted to their detriment or significantly altered their position in reliance on the understanding. Undertaking joint and several mortgage liability may satisfy that requirement.

If the parties agreed both the existence and extent of their beneficial interests, the court ordinarily gives effect to that agreement. The court determines a fair share from the whole course of dealing only where no agreement, arrangement or understanding fixes the respective shares.

A mother brought proceedings under the Trusts of Land and Appointment of Trustees Act 1996, seeking a declaration that she was the sole beneficial owner of a property registered jointly in her name and that of her son. The property had originally been transferred into the joint names of the mother, her husband and their son. The transfer contained no available declaration of their beneficial interests.

The Brentford County Court found a common intention that the son should acquire a beneficial interest. It concluded that the three transferees held as beneficial joint tenants, so that following the father’s death the mother and son had equal beneficial interests.

The mother appealed. The principal issues were whether the judge had properly found a common communicated understanding and detrimental reliance, and whether she had been entitled to find a beneficial joint tenancy without assessing a fair allocation from the parties’ whole course of dealing.

1. The appeal was dismissed. The county court judge was entitled to find that the parties shared a communicated understanding that the son would acquire a beneficial interest. The mother’s oral evidence supported participation by all three transferees in paying the mortgage and indicated that the son expected to recover his contributions upon her death. The judge adequately explained why she rejected the mother’s written account that the son was to have no interest.

2. The presumption of a resulting trust yielded to the parties’ actual intention. In a joint-name transfer it can ordinarily be inferred that each legal owner was intended to have some beneficial interest. The son’s assumption of mortgage obligations and apparent liability under the linked endowment policy reinforced that inference. Convincing contrary evidence would have been required to exclude him from beneficial ownership, and none existed.

3. The judge should expressly have considered whether the son acted to his detriment or significantly altered his position in reliance on the common understanding, as required by Lloyds Bank plc v Rosset [1991] 1 AC 107. Nevertheless, detrimental reliance could be inferred from his undertaking joint and several mortgage liability and his apparent acceptance of liability under the related policy. He therefore acquired a beneficial interest under a constructive trust.

4. The fair-share exercise described in Oxley v Hiscock [2005] Fam 211 is required only where no agreement, arrangement or understanding establishes the nature and extent of the parties’ respective interests. Where the parties have reached a consensus, the court gives effect to it unless there is a very good reason not to do so, such as a subsequent renegotiation.

5. The finding of a beneficial joint tenancy was supportable. The equitable interests presumptively followed the joint legal estate. Joint and several mortgage liability, the father’s statement that the property would ultimately belong to the son, and the mother’s evidence that the son would recover his contributions on her death all supported an intention that the survivor should take the property. The resulting equal beneficial interests of the mother and son were therefore upheld.

1. Court of Appeal (Civil Division): By [2005] EWCA Civ 1581, dismissed the mother’s appeal and upheld the declaration that she and her son held equal beneficial interests.

2. Brentford County Court: Her Honour Judge Wakefield decided on 28 January 2005 that the property was beneficially held in equal shares by the mother and son.