S v J & Ors

In disputes between cohabitees concerning beneficial ownership of property held in one party’s name, the claimant must establish a common intention that the other party should have a beneficial interest. That intention is determined objectively from the parties’ words and conduct. Financial contributions may be important, but the court must consider the whole course of dealing relating to the property.

Where the parties intended to share a property but did not determine their respective shares, the court may infer or impute an intention from the evidence. It must not simply impose its own view of fairness or redistribute property to compensate for relationship misconduct. Any apportionment must reflect the parties’ dealings and contributions concerning the property.

The applicant sought declarations under section 17 of the Married Women’s Property Act 1882 concerning the beneficial ownership of four London properties acquired or held during a relationship with the first respondent. The parties were unmarried, and the court therefore could not use the discretionary financial remedies available under the Matrimonial Causes Act 1973.

The applicant claimed sole beneficial ownership of Falcon House and Rutland Gate, sole beneficial ownership of Queen’s Gate by the respondent, and an 82:18 beneficial division of Westbourne Terrace. The respondent alleged an agreement to pool the properties equally. The central questions were whether the respondent had acquired an interest in Falcon House and how the parties’ beneficial interests in Westbourne Terrace should be quantified.

1. The application for declaratory relief was allowed in substantial part. The applicant was declared the sole legal and beneficial owner of Falcon House. The parties were declared beneficial owners of Westbourne Terrace in shares of 82% to the applicant and 18% to the respondent. Liability for the primary loan was apportioned 71% to the applicant and 29% to the respondent.
2. For a property held in one party’s sole name, there is no presumption of joint beneficial ownership. The person claiming an interest must establish a common intention to share beneficial ownership, acted upon to that person’s detriment. The intention may be express or inferred objectively from conduct.
3. In relation to Falcon House, the respondent made no financial contribution to acquisition or mortgage payments. The alleged written agreement was unsigned in its contemporaneous form, and the later document relied upon was found to be simulated. The evidence did not establish any common intention to share the property. The legal and beneficial ownership therefore followed the applicant’s legal title.
4. In relation to Westbourne Terrace, the parties had a common intention to share beneficial ownership and each acted to detriment: the applicant provided security over her two properties and the respondent assumed liability for the restructured mortgage debt. There was no agreement for equal shares. The evidence supported an inference, or alternatively an imputation, that their interests should reflect their respective contributions to the financial restructuring.
5. The court rejected any purely redistributive approach. Even if it had been necessary to determine the shares by reference to fairness, the relevant fairness was confined to the whole course of dealing concerning the property. Relationship abuse and financial disadvantage could not justify discretionary redistribution.

The court made consequential directions concerning sale and application of funds, rent, and an indemnity concerning the tenant’s deposit. Further implementation directions were left to be arranged.

This was a first-instance determination in the High Court (Family Division). The judgment does not state any appeal from an earlier decision in the present proceedings.