Ardley Allen v Joan Elizabeth Webster

Where co-owners acquire a home in joint names, equity starts from equal beneficial ownership. That position may change if a later common intention is objectively manifested by words or conduct. The resulting shares must be assessed by reference to the parties’ common intention at the time of change. A court should not determine the proportions solely by calculating mortgage contributions made after that date. Where one party’s interest crystallises when contributions cease, its value may be fixed as a monetary amount at that time, leaving the eventual percentage dependent on the later sale value. An order for sale may be required where one co-owner would otherwise be kept out of the value of the crystallised interest without good reason.

The parties bought a property in their joint names in 1988, intending to hold it equally. The Appellant left the property in 1990. The Respondent closed their joint account in 1992, after which the Appellant ceased contributing to the mortgage and repairs while the Respondent continued paying the mortgage.

The County Court found that the parties’ common intention changed in 1992 and declared beneficial ownership as 92% to the Respondent and 8% to the Appellant. It declined to order a sale. The Appellant appealed, challenging the finding of changed intention, the method of quantifying his interest, and the refusal to order a sale. The central issues were whether the common intention changed and how the Appellant’s interest should be quantified.

1. Appeal partly allowed. The finding that the parties’ common intention changed in 1992 was upheld. The Respondent’s closure of the joint account, the Appellant’s cessation of contributions and the Respondent’s assumption of mortgage payments were sufficient facts from which a changed intention could be inferred. Ground 1 therefore failed.
2. The Recorder’s calculation of an 8% interest by reference to the proportion of mortgage payments made over the whole period was impermissible. It amounted to a resulting-trust analysis and failed to focus on the common intention existing when the beneficial interests changed.
3. The Appellant’s interest crystallised in 1992, when his contributions ceased. On the available evidence, the appropriate inferred value of the property in 1992 was £74,000, making the Appellant’s crystallised interest £37,000. That was a monetary entitlement, not a fixed percentage. Its eventual percentage would depend on the sale price.
4. The refusal to order a sale was also erroneous. Without a sale or payment, the Appellant would remain out of his money indefinitely, with no interest and without the benefit of future property-price increases. Pursuant to sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996, the Respondent was allowed three months to pay £37,438.53. Failing payment, the property was to be sold with all expedition.
5. The remaining costs issues were reserved for further argument.

• High Court, Chancery Appeals: Appeal from the order of Recorder Maguire dated 13 March 2023, consequential on the judgment dated 9 March 2023. The appeal was partly allowed and the order varied.