Dudley Heslop v Mona Heslop & Anor

For a resulting or constructive trust, the applicable law is ordinarily the legal system with which the arrangement is most closely connected. The presumption that beneficial ownership follows the legal title may be displaced by evidence of a different common intention, assessed objectively from the parties’ conduct and the whole course of dealing. Financial contributions are relevant but are not conclusive.

A joint tenancy may be severed by alienation of a joint tenant’s interest, without notice to the other joint tenant. Once beneficial joint tenants are severed, they hold equal shares as tenants in common, despite unequal contributions to the purchase price.

The claimant, the executor of his late mother’s will, brought two Part 8 claims concerning the beneficial ownership of a house in Jamaica. He alleged that his mother had provided the purchase monies, that the inclusion of the second defendant as joint tenant was mistaken, and that later transfers had given interests to him and the first defendant.

The second defendant contended that £100,000 transferred to the deceased had belonged to her and had been used towards the purchase. The court had to determine the applicable law, the parties’ beneficial ownership when the property was acquired, and whether the joint tenancy was subsequently severed.

1. Governing law. The applicable law was the system most closely connected with the arrangement said to give rise to the trust. The reasoning in Lightning v Lightning Electrical Contractors and Martin v Secretary of State for Work & Pensions supported that approach. The court applied English law because the relevant relationship was based in England, there was no analogous connection with Jamaican succession law, and neither party relied on or proved Jamaican law. The Recognition of Trust Act 1987 did not alter the result.
2. Beneficial ownership. The starting point was that equity followed the legal interest. That presumption could be displaced by proof of a different common intention at acquisition or a later change of intention. Intention was to be deduced objectively from conduct, considering the whole course of dealing. The court found that the £100,000 transferred by Jennifer was held for her on a bare trust, was used directly or indirectly towards the purchase, and was neither a loan nor a gift. The surrounding documentary and other evidence showed that Mrs Hylton intended co-ownership reflecting that contribution. The property was therefore held beneficially by Mrs Hylton and Jennifer as joint tenants.
3. Severance. The transfer executed on 3 April 2012 was an alienation of Mrs Hylton’s interest and therefore severed the joint tenancy. The parties thereafter held the property as tenants in common in equal shares.
4. Alternative tracing claim. If the finding of joint beneficial ownership had been wrong, Jennifer would alternatively have had a proprietary tracing claim in respect of her misapplied money. That alternative did not require quantification because the primary finding resolved the claims.