Rowland v Blades

Where unmarried parties acquire property in joint names without an express declaration of trust, the starting point remains that equity follows the law and that they hold beneficially as joint tenants. That presumption may be displaced by objectively ascertainable common intention, having regard to the parties’ words, conduct and the whole course of dealing.

Unequal financial contributions do not by themselves establish unequal beneficial interests. Nor may the court impose a fairer outcome contrary to the parties’ objectively established intention. Under the Trusts of Land and Appointment of Trustees Act 1996, an occupation rent may be ordered where one co-owner unreasonably excludes or restricts the other’s occupation. The amount should do justice between the parties with regard to the statutory considerations and the evidence of reasonable market value.

Dr Rowland and Ms Blades, an unmarried couple, acquired a country house in joint names. Dr Rowland paid the purchase price and associated acquisition costs. The conveyancing documents recorded their choice to hold as joint tenants, but the transfer was initially executed without the relevant declaration-of-trust box being completed.

After the relationship ended, Dr Rowland claimed sole or unequal beneficial ownership, relying on his financial contributions and an alleged intention that the property would ultimately pass to his daughter. He also claimed an occupation rent because Ms Blades principally used the property and restricted his use with his new partner. Ms Blades maintained that they were beneficial joint tenants and that no occupation rent was payable.

The issues were the parties’ beneficial interests and whether compensation for occupation was payable.

1. Beneficial interests. The parties held the property as beneficial joint tenants. The conveyance into joint names was a conscious decision made after they had received and signed a form explaining joint tenancy, tenancy in common and declarations of trust. Dr Rowland’s email confirmed that their intention was to purchase as joint tenants. Neither party changed that position before completion.

2. The court applied the approach in Stack v Dowden and Jones v Kernott. The relevant intention was the intention reasonably understood from the parties’ communicated words and conduct. Dr Rowland’s private, uncommunicated intentions concerning his daughter could not alter the common intention. The fact that he paid the whole purchase price, and that the parties did not pool their finances, did not overcome the clear contemporaneous evidence of joint beneficial ownership.

3. The parties’ later conduct did not establish any variation of their beneficial interests. The expenditure on maintenance and structural works was explicable by their respective use of and interest in the property. There was no express agreement, detrimental reliance or sufficiently clear conduct from which a changed common intention could be inferred. Dr Rowland was not entitled to a credit for expenditure because no evidence showed that it increased the property’s capital value.

4. Occupation rent. The court applied sections 12–15 of the Trusts of Land and Appointment of Trustees Act 1996. The statutory task was to do justice between the parties with regard to the statutory considerations, including the trust’s purposes and the parties’ circumstances and wishes. Ms Blades’ restriction that Dr Rowland could not use the property with his new partner was unreasonable and amounted to effective exclusion from weekend use. Compensation was therefore payable from 1 November 2009 to 30 October 2015, when the relationship with the new partner had ended.

5. The occupation rent was assessed under section 13(6) by reference to reasonable open-market value for the relevant weekend use, adjusted to reflect Ms Blades’ 50 per cent beneficial interest. The sum payable was £59,958.

6. The defendant succeeded on the principal issue. The claimant was ordered to pay 90 per cent of the defendant’s costs, subject to detailed assessment, with an interim payment on account of £100,000. The occupation-rent liability could be set off against that payment.