Holman v Howes

Where a property is acquired for joint domestic use and both parties contribute, the court must determine whether they communicated a common intention that each should have a beneficial interest. If so, their respective shares are determined from their discussions and the whole course of dealing. In the absence of evidence fixing the proportions, the court may determine what is fair in the circumstances.

Under sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996, an order for sale is discretionary. The court must weigh the trust’s original intentions and purposes, together with the circumstances and wishes of beneficiaries and relevant creditor interests. An assurance that a beneficiary may remain in the property may justify postponing sale.

The parties, formerly married, acquired a Cambridge property in 1979. The purchase contract was initially in the claimant’s name, but the property was transferred into the defendant’s sole name. Both parties contributed to the purchase, and the claimant occupied the property for more than 25 years.

The claimant alleged that the defendant had promised that the property would belong solely to her. The defendant claimed equal beneficial ownership and sought a sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The claimant also advanced claims concerning an asbestos risk and associated loss.

The central issues were the parties’ beneficial interests, whether the property should be sold, and whether the defendant was liable in relation to the asbestos.

1. The claimant’s case that the property was intended to belong beneficially to her alone was rejected. The contemporaneous documents and the parties’ conduct were inconsistent with that alleged common intention. The evidence instead established a common intention that both parties should have beneficial interests.

2. Applying the approach summarised by the Court of Appeal in Oxley v Hiscock [2005] Fam 211, the property was held for the parties in equal shares. The precise contributions were uncertain, but the parties had treated the purchase as a joint and equal venture and had not maintained records intended to establish different proportions.

3. The defendant’s assurances were relevant to the exercise of the sale jurisdiction. They conveyed that the claimant would be secure in the property and could remain there for as long as she wished. The original purposes of the trust included providing a home for the parties and their daughter and, in substance, securing the claimant’s continued occupation.

4. Sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996 give the court flexibility when deciding whether to direct a sale. The court had to weigh the parties’ intentions, the purposes for which the trust was created, the beneficiaries’ circumstances and wishes, and any relevant creditor interests. The defendant had other assets and did not need an immediate sale to meet his liabilities. Sale would therefore conflict with the trust’s purposes and the claimant’s assured right of occupation.

5. The asbestos claim failed. The defendant had not known of the asbestos or its potential danger when the property was acquired. The claimant had also failed to establish recoverable loss or damage to the stored chattels.

6. The claimant’s claims were dismissed. On the counterclaim, the defendant was declared to hold the property on trust for himself and the claimant in equal shares, subject to the claimant’s exclusive entitlement to occupy it while it remained unsold. The property was not to be sold for the time being, although the defendant could apply for further directions if new facts made a sale more compelling.