Taylor v Taylor & Anor

Where land is conveyed to co-owners on an express trust as beneficial joint tenants, that declaration determines the beneficial ownership unless affected by fraud, mistake, rectification or another vitiating factor. A resulting-trust presumption based on contributions yields to evidence of a different common intention. A later change in beneficial shares requires agreement together with the requirements of a common intention constructive trust, including detrimental reliance in a business-property case. A signed notice of severance under section 36(2) of the Law of Property Act 1925 converts a beneficial joint tenancy into a tenancy in common in equal shares.

The claimant and the first defendant, father and son, acquired a hotel and campsite as joint legal proprietors. The claimant asserted that he held four fifths of the beneficial interest because of his greater financial contribution. The defendants contended that the claimant and the first defendant had agreed to hold the property equally.

The dispute arose within proceedings for dissolution and winding up of a partnership operated by the parties. The court was directed to determine beneficial ownership only; the question whether the property should be sold was not argued. The central issues were the effect of the declaration in the transfer, the resulting-trust presumption, the subsequent notice of severance, and whether the alleged agreement could create or vary a constructive trust.

1. Beneficial ownership on acquisition. The transfer form stated that the claimant and first defendant were to hold the property on trust for themselves as joint tenants. That was an express declaration of trust. The transferors’ signature was sufficient for section 53(1)(b) of the Law of Property Act 1925; the purchasers’ signatures were unnecessary. The conveyance was made pursuant to the purchasers’ solicitor’s instructions.
2. The declaration was conclusive unless impeached for fraud, mistake, rectification or another vitiating factor. No such case was established. The resulting-trust presumption arising from unequal contributions therefore yielded to the express documents and the parties’ agreement to acquire equal rights.
3. Effect of severance. The claimant’s signed notice, served on the first defendant, operated under section 36(2) of the Law of Property Act 1925 to sever the beneficial joint tenancy. The parties thereafter held the property as tenants in common in equal shares. The notice also supplied signed written evidence of the original declaration if such evidence had been required.
4. Constructive trust alternative. Independently, the court found an agreement that the property would be held equally, on which the first defendant relied by contributing money and working in the business. That agreement excluded the resulting-trust presumption and would give rise to a common intention constructive trust. In business property cases of this kind, detrimental reliance remains necessary. No later agreement giving the claimant four fifths was proved, and there was no detrimental reliance by him.
5. The court declared that the claimant and first defendant held the legal estate on trust for themselves as tenants in common in equal shares. Any consequences of equitable accounting in the partnership dissolution were left open.

First-instance determination of beneficial ownership within partnership-winding-up proceedings. The judgment states that the issue of sale was reserved for later consideration.