Geary v Rankine

In a sole-name property case, a claimant must establish an actual shared intention that beneficial ownership be shared. That intention may be express or inferred objectively from conduct, but it cannot be imputed merely because the parties ran a business together or because one party worked without wages.

A partnership may be inferred from conduct, including in a family relationship. However, sole-trader accounts, an absence of profit-sharing, no holding out as a partner, and conduct inconsistent with shared business liabilities may justify finding that no partnership existed. Even if a partnership exists, property used for its business is not thereby partnership property, particularly where one party acquired it alone before the partnership began.

The appellant and respondent cohabited and operated a guesthouse business. The respondent bought the guesthouse with his own savings, initially as an investment to be managed by another person. The appellant later moved to Hastings and worked substantially in the business.

After their relationship ended, the appellant claimed a beneficial interest in the freehold and alleged that the parties had been business partners. HHJ Hollis in the Hastings County Court rejected both claims. On appeal, the appellant challenged the findings that there was no partnership and no subsequent common intention that she should share the beneficial ownership of the freehold.

1. Appeal dismissed. The judge was entitled to find that the parties were not business partners. Although a family or quasi-family relationship does not prevent a partnership, and an agreement may be inferred from conduct, the objective evidence pointed the other way. The accounts treated the respondent as a sole trader, there was no sharing of profits, no joint bank account, and no holding out of the appellant as a partner. Her entitlement only to money requested from the respondent, and the respondent's wish to keep her free from business liabilities, were inconsistent with partnership.

2. In any event, a partnership in the business would not itself make the freehold partnership property. A partner may own premises from which the partnership trades. The freehold was acquired with the respondent's money before any possible partnership and its appearance in sole-trader accounts did not alter that conclusion.

3. Applying Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53, the legal title was the starting point. In a sole-name case, there is no presumption of joint beneficial ownership. The claimant must first prove an actual common intention, express or inferred objectively, that she should have a beneficial interest. Only then does the question of the extent of that interest arise.

4. A shared intention to run a business together did not establish an intention to share the separately acquired freehold. The evidence that the respondent retained the business in his sole name and gave no commitment to provide the appellant with an interest supported the judge's finding that his intention never changed. The appellant had not shown reliance on any representation or conduct indicating a changed common intention.

• Court of Appeal (Civil Division) — dismissed the appellant's appeal.
• Hastings County Court — HHJ Hollis rejected the claims for a beneficial interest in the freehold and for an account as a business partner.