Parrott v Parkin

A vessel’s registration in one person’s name establishes legal ownership but does not, without more, determine the beneficial ownership. Where one party provides the purchase money and legal ownership is vested in another, a resulting trust is presumed unless displaced by proper evidence of a contrary intention. An agreement to allocate different assets after a relationship ends does not necessarily show that the contributor intended to make a gift at the time of purchase. For property held in one cohabitee’s sole legal name, a constructive trust may arise from an express agreement supported by detriment or, where there was no such agreement, from direct financial contributions. Non-financial work may affect the proportions of an established beneficial interest but cannot alone create it.

Linda Marie Parrott claimed that Mark Trevor Parkin held the motor yacht UP YAWS on trust for her absolutely, together with possession and sale orders. Parkin accepted that he was the registered owner and asserted sole beneficial ownership. Alternatively, he claimed an equal beneficial interest arising from the parties’ dealings concerning their home, 6 Long Drive.

The court considered the parties’ beneficial interests in 6 Long Drive, their arrangements concerning an earlier vessel, DUTY FREE B, and the acquisition of UP YAWS. The central issue was whether Parrott’s provision of £73,000 towards the purchase price created a beneficial interest which had been displaced by agreement or gift.

1. 6 Long Drive. Applying Lloyd’s Bank plc v Rosset [1991] 1 AC 107, the court found no express agreement before acquisition that the house would be shared beneficially. However, the £3,000 gift from Parkin’s father was treated as a contribution by Parkin to the purchase price. That contribution, together with detriment, justified a constructive trust in his favour. His payments for rent, utilities and insurance were not proved to be direct mortgage contributions. His work improving the property could not itself create the trust, although it was relevant to the proportion of an established interest.
2. Earlier vessel. The parties had agreed that Parrott would become sole legal and beneficial owner of 6 Long Drive, while Parkin would become sole legal and beneficial owner of DUTY FREE B. The additional borrowing secured on the house operated as a buy-out of Parkin’s beneficial interest in the house.
3. UP YAWS. Parkin was the legal owner. Under the resulting-trust principles stated in The Venture [1908] P218, Parrott’s provision of £73,000 presumptively gave her a beneficial interest to that extent. The court also considered the guidance in Midland Bank plc v Cooke [1995] 4 All ER 562 and Oxley v Hiscock [2004] 2 FLR 669.
4. The evidence that Parkin was named as registered owner, and later statements about dividing the assets, did not prove that Parrott intended to make a gift of the £73,000 or waive her beneficial interest. Parrott therefore had an approximately 55% beneficial interest, to be expressed as 64 shares. Possession did not follow because Parkin remained legal owner. Further orders were reserved.

Not stated in the judgment.