Thompson v Hurst

Where property is conveyed into one cohabiting party’s sole name, an intention to buy jointly does not trigger the legal presumption applicable to joint legal ownership. The claimant must first establish an implied trust and a common intention to share beneficial ownership, proved by objectively ascertained express or inferred intentions. If a beneficial interest is established but intended proportions are not, the court determines fair shares from the whole course of dealing in relation to the property. An appellate court should not disturb that assessment unless the judge made an error of principle or the result was plainly wrong.

The parties had lived together in the property and raised their children there. The respondent alone purchased the property from the local authority in 2001, after mortgage advice indicated that the appellant’s employment history made him unsuitable for the loan. Following the breakdown of their relationship, the appellant sought a declaration of beneficial ownership.

District Judge Spencer found that the appellant had a 10 per cent beneficial interest and the respondent a 90 per cent interest. The appellant argued that their intention to purchase jointly required an equal-share approach, or alternatively that the apportionment was plainly wrong. The central issues were whether the joint-ownership presumption applied despite the sole legal title, and whether the assessment of the parties’ respective beneficial shares could be disturbed on appeal.

Appeal dismissed. Etherton LJ gave the leading judgment, with which Lewison and Thorpe LJJ agreed.

1. Where legal title is placed in joint names, Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53 establish a presumption of joint beneficial ownership and equal shares, subject to objectively ascertained actual or inferred intention. That presumption does not apply where, as here, the property was conveyed into one party’s sole name.
2. In a sole-name case without an express declaration of trust, the claimant must first establish an implied trust, normally a common intention constructive trust, and must show an intention that the claimant should have a beneficial interest at all. If a common intention to share beneficial ownership is established but the intended proportions cannot be ascertained, the court determines the fair shares having regard to the whole course of dealing in relation to the property. This approach was consistent with Oxley v Hiscock [2005] EWCA Civ 546 and was explained in Chapman v Jaume [2012] EWCA Civ 476.
3. The District Judge was entitled to infer a common intention that the appellant should have some beneficial interest. There was no cross-appeal against that finding. She then correctly assessed fairness by considering the respondent’s purchase discount, mortgage and other financial contributions, the parties’ household contributions, and their respective work on improvements. Her conclusion that the appellant’s share was 10 per cent was careful and was neither based on an error of principle nor plainly wrong.
4. An appellate court should be slow to interfere with primary factual findings, inferences and conclusions on fairness. The same restraint applies to the assessment of beneficial shares.

Lewison LJ additionally observed that, even on a joint-name analysis, the parties’ unusually separate finances would not necessarily have produced equal shares, applying the reasoning in paragraph [92] of Stack v Dowden. That observation was unnecessary to the disposal. The appeal was dismissed.

• Court of Appeal (Civil Division): Appeal from the decision of District Judge Spencer in Middlesbrough County Court dated 9 September 2010; appeal dismissed.
• Middlesbrough County Court: Declared that the appellant held a 10 per cent beneficial interest and the respondent a 90 per cent beneficial interest in the property.