Chia Hevedi v Havin Hevedi

A claimant seeking beneficial ownership of property registered in another person’s sole name must prove an express or inferred common intention, together with detrimental reliance where required. The court determines common intention objectively from the parties’ words and conduct and their whole course of dealing with the property. Sole legal ownership ordinarily carries a presumption of sole beneficial ownership.

A statutory declaration may operate prospectively as a declaration of trust, but it does not retrospectively create a trust where no earlier trust or common intention has been established. Declaratory relief remains discretionary and requires reliable evidence, proper participation by affected persons and an assessment of whether a declaration is appropriate.

The claimant sought declarations that he was the sole beneficial owner of two Sheffield properties and of a Turkish bank account held in the defendant’s name. He alleged that the properties and money had been placed in the defendant’s name under an arrangement connected with his financial difficulties and intended bankruptcy.

The defendant’s defence was struck out and she did not attend trial. Interested-party judgment creditors attended in relation to one property. The claimant relied on his own evidence, documents and statutory declarations signed by the defendant in August 2023. The central issues were whether trusts or common intentions had been established, whether there had been detrimental reliance, and what effect the statutory declarations had.

1. Properties and bank account. The claimant failed to prove that either Sheffield property or the Turkish Trust Account was held for him. The presumption that the defendant, as sole legal owner, was also sole beneficial owner was not displaced.
2. Common intention constructive trust. The court applied the principles in Stack v Dowden and Jones v Kernott. The relevant intention was that objectively communicated or reasonably understood from the parties’ words and conduct. The claimant’s evidence was internally inconsistent, lacked documentary support and did not establish any common intention that he retained the entire beneficial interest.
3. Detrimental reliance. Consistently with Hudson v Hathway and Gillett v Holt, detrimental reliance remained necessary. The evidence of expenditure on refurbishment was sparse, inconsistent and insufficient to establish substantial detriment.
4. Resulting trust. The claimant could not rely on a separate resulting-trust analysis for 53 East Road. His own evidence treated the properties and bank account as part of one alleged arrangement, and the evidence did not establish the necessary source or intention.
5. Statutory declarations. The declaration concerning 3 Endcliffe Grove Avenue was effective prospectively as a declaration of trust. Neither declaration had retrospective effect. The declaration concerning 53 East Road was signed after the property had been sold, when the defendant no longer had an interest capable of being declared on trust.
6. Illegality and relief. The court considered the approach in Patel v Mirza and Kliers v Schmerler, but held that illegality should not deprive the claimant of relief otherwise available. No declaration was made for the Turkish Trust Account, both because the claimant failed to prove ownership and because the relief sought and pleaded case were materially confused and the defendant was absent.
7. Orders. The claimant obtained a declaration that he had been the sole beneficial owner of 3 Endcliffe Grove Avenue since 11 August 2023. That declaration did not affect the pre-existing charge of MTF (NH) Limited or the interested parties’ pre-existing charge. The claims concerning 53 East Road and the Turkish Trust Account failed.