Tolmie v Taylor & Anor

In a sole-name domestic property case, the claimant must displace the presumption that beneficial ownership follows legal ownership. The court examines any actual common intention, whether an intention can be inferred from the parties’ conduct, detrimental reliance, and the intended beneficial shares.

Shared domestic expenditure and general assurances do not establish a beneficial interest without evidence connecting them to ownership and reliance. Proprietary estoppel likewise requires an assurance or acquiescence, reasonable reliance and detriment.

Under Insolvency Act 1986, s 423, a transaction may be impeached where putting assets beyond a creditor’s reach or prejudicing the creditor’s interests was a substantial purpose, even if it was not the sole or dominant purpose.

The claimants were trustees of the Nicholas Savage Foundation and had obtained an unpaid money judgment against Pia Taylor or Massey. They sought to enforce that judgment against assets held or controlled by her husband, Dennis Massey.

The trial concerned whether funds transferred to Mr Massey, the balance of a bank account, part of the value of a car and sums used for his legal costs were beneficially owned by Mrs Massey. Mr Massey alleged a pre-existing beneficial interest, a gift of the proceeds of sale of property, constructive trust, and proprietary estoppel. The central issues were the ownership of the proceeds, whether any gift was liable to be set aside, and the consequences for the remaining assets and legal costs.

1. Beneficial ownership. This was a sole-name domestic case, so the presumption that beneficial ownership follows legal ownership applied. Mr Massey bore the burden of showing an actual common intention, an intention inferred from the parties’ conduct, and detrimental reliance. No actual agreement, arrangement or understanding was proved. The evidence did not establish a significant financial contribution, an inferred intention, or detriment of the necessary kind. Mr Massey therefore acquired no beneficial interest in the properties or their proceeds.
2. Proprietary estoppel. The alleged assurances and reliance were materially the same as those advanced for the constructive trust claim. They did not establish an assurance or acquiescence, reasonable reliance and detriment sufficient to make it unconscionable for Mrs Massey to assert sole ownership.
3. Gift and insolvency legislation. An inter vivos gift requires a voluntary transfer by the true owner with full intention that the property should not return. Mrs Massey’s continuing access to the funds was inconsistent with that intention. The alleged gift was therefore not proved. Alternatively, any gift would have been set aside under s 423 of the Insolvency Act 1986, because moving the proceeds out of reach of the judgment creditors or prejudicing their interests was a substantial purpose. It need not have been the sole or dominant purpose, applying JSC BTA Bank v Ablyazov [2019] BCC 96.
4. Consequences. Mrs Massey was the 100 per cent beneficial owner of the proceeds. Applying the rule that, in a mixed fund, a trustee is treated as spending his own money first, the remaining balance in Lloyds Account 660 belonged solely to Mrs Massey. The sums paid from her funds towards Mr Massey’s legal costs constituted a debt owed by him to her. The car was beneficially owned as to 95/195ths by Mrs Massey.

The judgment describes earlier default judgments and enforcement orders in the same proceedings. This was the trial of the claim concerning assets held or controlled by the second defendant. No appeal history is stated.