Williamson v Sheikh

Where legal title to a property is held in one name, the resulting presumption of sole beneficial ownership may be rebutted by evidence of the parties’ common intention. The court must ascertain that intention from the parties’ dealings and must not substitute its own view of fairness. An unexecuted draft declaration of trust may be powerful evidence of the parties’ actual intention where it was left unsigned because they considered the formal deed unnecessary, rather than because it did not reflect their agreement. Agreed beneficial shares need not be adjusted merely because the legal owner later pays the mortgage, where those payments were contemplated when the shares were agreed.

Miss Williamson and Mr Sheikh lived together in a property whose legal title was registered solely in Mr Sheikh’s name because Miss Williamson was under age. Miss Williamson paid the deposit and claimed an agreed beneficial interest. Before completion, solicitors prepared a draft declaration of trust providing for her to receive the first £10,000 of net proceeds and 60% of the balance, but it was not executed.

The County Court, applying the findings of Mr Recorder Maw, accepted that Mr Sheikh had persuaded Miss Williamson that the deed was unnecessary and declared the agreed beneficial shares. Mr Sheikh appealed, challenging reliance on the draft deed, the treatment of his mortgage payments, the consideration of the parties’ age disparity, and the fairness of the trial in light of his learning disability.

The appeal was dismissed. Dyson LJ gave the leading judgment, with which Lloyd and Ward LJJ agreed.

1. The presumption that sole legal ownership carries sole beneficial ownership was rebutted. The court’s task was to ascertain the parties’ common intention, not to impose its own assessment of what would be fair. The approach stated in Stack v Dowden [2007] UKHL 17 was applied.
2. The Recorder was entitled to treat the unexecuted draft declaration of trust as powerful evidence of the parties’ actual intention. The findings showed that the deed was not left unsigned because it failed to reflect their agreement. It was not executed because Mr Sheikh persuaded Miss Williamson that their trust and confidence made a formal deed unnecessary. In those circumstances, a detailed examination of subsequent contributions was unnecessary.
3. Mr Sheikh’s mortgage payments did not require an adjustment to the agreed beneficial shares. The payments covered a relatively short period and the parties must be taken to have contemplated that, while Miss Williamson was still young, Mr Sheikh would make the mortgage payments. The agreed division therefore incorporated that arrangement.
4. The Recorder’s findings of fact, made after hearing both parties, could not properly be reopened. The parties’ age disparity was relevant when assessing whether Miss Williamson had been pressured, and taking it into account did not amount to age discrimination. Mr Sheikh’s learning disability had not prevented him from presenting his case effectively or receiving a fair trial.

The order was: appeal dismissed.

1. Court of Appeal (Civil Division): dismissed Mr Sheikh’s appeal.
2. Lincoln County Court: Mr Recorder Maw found that Miss Williamson had the beneficial interests claimed and treated the draft declaration of trust as evidence of the parties’ agreement.