NR v AB & Ors

In financial remedy proceedings, a company that owns property legally and beneficially does not hold it on trust for a spouse merely because family funds financed the purchase or the property was used as the matrimonial home. A constructive trust requires an agreement or common intention involving the legal owner, supported by detrimental reliance where applicable. An informal licence may nevertheless constitute a nuptial settlement where it makes continuing provision for the parties or their children. The court may vary that licence under section 24(1)(c) of the Matrimonial Causes Act 1973, while respecting third-party rights and applying the section 25 needs-based assessment.

The former wife sought financial remedy orders following the dissolution of her marriage. The husband’s mother, sister and a family company were joined because the wife claimed that two London flats, legally owned by the company, were beneficially owned by the husband or held for him on trust.

Alternatively, she contended that the parties’ occupation of the flats constituted a nuptial settlement capable of variation under section 24(1)(c) of the Matrimonial Causes Act 1973. The central issues were the husband’s resources, the beneficial ownership of the flats, the existence and scope of any nuptial settlement, and the appropriate needs-based financial provision.

1. The constructive-trust claim failed. The legal owner was BCO Limited, and there was no agreement, arrangement or common intention between the husband and the company that the flats were to be held for his exclusive benefit. The husband’s role in arranging the purchases, his representations to the wife, and his payment of outgoings did not establish the necessary agreement or detrimental reliance.
2. The resulting-trust claim also failed. The purchase monies were genuine, unsecured and interest-free loans from pooled family funds. The husband had only an undivided one-third interest in those funds. Board minutes and trustee correspondence supported the company’s legal and beneficial ownership.
3. The court applied the principles discussed in Stack v Dowden [2007] UKHL 17 and Prest v Petrodel Resources Ltd & Others [2013] UKSC 34. The fact-sensitive approach in Prest v Petrodel Resources Ltd & Others did not assist the wife because the husband neither owned nor controlled the company.
4. An informal licence to occupy may be a nuptial settlement where it makes continuing provision for one or both spouses, with or without provision for their children. The licences relating to 18SPM and 18A were therefore capable of variation under section 24(1)(c) of the Matrimonial Causes Act 1973. The court could not transfer property beneficially owned by the company.
5. The court accepted the husband’s revised proposal: rent-free occupation of 18SPM and 18A, subject to agreed conditions; a £2 million lump sum for the wife’s income needs; £25,000 for a vehicle; child maintenance of £15,000 per child per annum; educational costs; and security of £400,000. Further drafting and costs issues were reserved.

First-instance determination in the High Court (Family Division). No appeal history was stated in the judgment.