Slater v Simm

A beneficial interest in land is determined by the parties’ arrangements and intentions at the time of acquisition, subject to any effective later disposition. A later dishonest statement about ownership does not, without more, prevent a claimant establishing an earlier beneficial interest. Although a disposition of an existing equitable interest ordinarily requires writing under section 53(1)(c) of the Law of Property Act 1925, an informal arrangement may give rise to an implied or constructive trust within section 53(2), so that the statutory writing requirement does not apply.

The claimant, as administrator of the estate of Wakako Nishida, sought declarations concerning the beneficial ownership of three Hampstead properties acquired during the deceased’s relationship with the defendant. The parties had executed declarations of trust concerning two properties, while the third was registered solely in the deceased’s name and lacked a formal declaration.

The defendant claimed interests arising from his financial contributions. The claimant contended that he had acquired or surrendered interests through later arrangements and that his subsequent failure to disclose two properties in divorce proceedings prevented him from asserting ownership. The court had to determine the parties’ beneficial interests and the effect of the informal arrangements and later conduct.

1. Number 77. The declaration of trust dated 2 March 2001 definitively governed the parties’ respective interests. It recorded their contributions and provided for their interests as tenants in common, subject to the specified deductions. The defendant conceded that the property should be sold, and an order for sale would be made.
2. Number 114. On the balance of probabilities, the defendant had orally agreed to sell his interest for £100,000 and had received that sum. The arrangement was evidenced by payments into his account, the solicitor’s attendance note and related correspondence. Although section 53(1)(c) of the Law of Property Act 1925 ordinarily requires a disposition of an existing equitable interest to be in writing, the arrangement made the defendant subject to an implied or constructive trust. It was therefore governed by section 53(2), which is not subject to the writing requirement. The defendant had no remaining interest.
3. Number 35. No definitive arrangement or declaration of trust had been made. The beneficial interest therefore depended on the parties’ direct or indirect contributions at acquisition. The defendant’s contribution entitled him to an interest limited, on his own case, to £25,000 in the net proceeds after sale and repayment of the mortgage.
4. The defendant’s false answers in his later divorce proceedings did not prevent him establishing that interest. The relevant intention was that existing when the property was acquired. This was materially different from Tinkner v Tinkner, where the property had been put in the wife’s name with the relevant intention concerning creditors. The case was instead governed by the reasoning applied in Tinsley v Milligan: the defendant could establish his beneficial interest without explaining the later reason for the property being registered solely in the deceased’s name.
5. The court declined to refer the defendant’s conduct to the Attorney General for investigation. The final conclusions were that he had no interest in number 114, that his interest in number 77 was governed by the declaration of trust, and that his interest in number 35 was limited to £25,000.

First-instance decision. The judgment records no prior appellate decision.