Graham-York v York & Ors

Where a family home is held in one cohabitant’s sole name, there is no presumption of equal beneficial shares. If an intention to share ownership is established but the proportions cannot be ascertained, the court must assess the fair shares by examining the whole course of dealing in relation to the property. Fairness is not redistributive justice or compensation for abusive conduct. The assessment is evaluative, with no single correct answer, and an appellate court should interfere only if it falls outside reasonable decision-making. Mortgage enforceability and equity of exoneration are distinct questions. Exoneration is fact-sensitive, depends on presumed intention, and must be properly pleaded and proved.

The appellant had lived with the deceased for many years in a property registered in his sole name and mortgaged to the Building Society. After the deceased’s death, the appellant claimed a beneficial interest arising from a common intention constructive trust and resisted possession proceedings.

Following a five-day trial, Her Honour Judge Faber found that the appellant held a 25% beneficial interest. She ordered possession and sale, with the Building Society paid first from the net proceeds. The appeal challenged both the valuation of the beneficial share and the order that it was subject to the mortgage. The central issues were whether the appellant was entitled to 50% and whether she could claim an equity of exoneration.

1. The appeal was dismissed on both issues. The Court of Appeal unanimously upheld Judge Faber’s order.
2. For a family home registered in one cohabitant’s sole name, the court must first determine whether the parties objectively intended to share beneficial ownership. If so, but the proportions cannot be ascertained, the court must assess the fair shares by reference to the whole course of dealing in relation to the property. The court applied the guidance in Jones v Kernott [2011] 1 A.C. 776 and Oxley v Hiscock [2005] Fam 211. The joint-ownership reasoning in Stack v Dowden [2007] 2 A.C. 432 did not create a presumption of equality in a sole-ownership case.
3. The enquiry was not an exercise in redistributive justice or compensation for abusive conduct. Financial and non-financial contributions, including domestic contributions, had to be assessed as part of the parties’ dealings concerning the property. There was no single correct percentage. The 25% assessment was within the ambit of reasonable decision-making, and substitution of a different percentage would amount to impermissible appellate tinkering.
4. The enforceability of the mortgage against the appellant and the allocation of the mortgage burden between the beneficial owners were distinct questions. The first had been resolved by concession, including the concession that the Building Society was subrogated to the earlier charge. An equity of exoneration might arise where borrowing was solely for the principal debtor’s benefit, but it depended on presumed intention and the facts. The judge was wrong to treat the appellant’s non-party status as preventing the equity, but the claim had been raised too late, was unpleaded, and lacked findings or evidence establishing it. The evidence instead indicated that the borrowing benefited the household. The appellant’s 25% interest was therefore subject to the mortgage.

• Court of Appeal (Civil Division). The court dismissed the appeal on the valuation of the beneficial interest and on the alleged equity of exoneration.
• Central London County Court. Her Honour Judge Faber found a 25% beneficial interest, ordered possession and sale, and directed that the Building Society be paid from the net proceeds before the appellant received her share.