Sandhu v Sandhu

Quantifying beneficial interests is an overall evaluative exercise. Where the parties’ intended shares are unclear, the court must consider the whole course of dealing, including capital contributions, mortgage payments and other relevant circumstances. The assessment is not rigidly arithmetical. A mistake in calculating one contribution does not require appellate interference if the corrected figures and the wider evidence still support a reasonable overall evaluation. A mortgage raised in one party’s name is not necessarily that party’s exclusive contribution. The approach reflected the principles discussed in Jones v Kernott [2011] UKSC 53 and Stack v Dowden [2007] 2 AC 432.

The respondent father claimed a beneficial interest in a family property registered in the sole name of his son, the appellant. The trial judge rejected the son’s case that he owned the property outright and assessed the beneficial interests at 70 per cent for the father and 30 per cent for the son.

Permission to appeal was limited to quantification. The appellant argued that the judge had wrongly treated an £80,000 mortgage on the property as part of the father’s contribution. He also sought to adduce a bank statement as further evidence. The central questions were whether the error affected the 70 per cent assessment and whether the additional evidence should be admitted.

1. Procedural appointment. Following the father’s death, Gus Sandhu was appointed to represent his estate pursuant to Rule 19.8 of the Civil Procedure Rules 1998.
2. Further evidence. The application to adduce the appellant’s bank statement was refused. No adequate explanation was given for the failure to locate it with reasonable diligence before trial. The document also raised further questions and would not necessarily have assisted the appellant.
3. Applicable approach. The judge’s approach, based on Jones v Kernott [2011] UKSC 53, was correct in principle. The court must make an overall assessment of the parties’ assumed intentions by considering the whole course of dealing, including financial contributions. As explained by reference to Stack v Dowden [2007] 2 AC 432, the exercise is not rigidly mathematical.
4. Correction of the calculation. The judge had confused two separate mortgages. The £80,000 mortgage on the property was not part of the funds released from Starfield Road. The appropriate starting point for the father’s direct contribution was therefore about £61,000 rather than £87,800 to £100,000.
5. Overall evaluation. The correction did not require the 70 per cent assessment to be altered. The property mortgage could not be treated as an exclusive contribution by the appellant: it cost him nothing from 1991 to 2000, and payments after 2009 came from rental income in which the father was at least partly beneficially interested. At least £40,000 was therefore properly brought into account, alongside the other dealings between the parties. The trial judge’s overall evaluation remained eminently reasonable. The appeal was dismissed.

1. Court of Appeal (Civil Division): On 6 October 2016, dismissed the appeal and refused the application to adduce further evidence.
2. Central London County Court: Her Honour Judge May QC assessed the beneficial interests in the property at 70 per cent for the father and 30 per cent for the appellant son in a decision dated 25 September 2014.