23es

Wodzicki vs. Wodzicki [2017] EWCA Civ 95 – the Court of Appeal once again considers Stack vs. Dowden [2007] 1 FLR and Jones vs. Kernott [2012] 1 FLR 45

A property in London was purchased in 1988 by the appellant’s father (G) and registered in the joint names of G and the respondent, G’s second wife. The funds for the purchase of the property were secured by G through a French bank over French property owned jointly by G and the respondent. The French bank was informed that the purpose of the loan was to secure a property for G’s daughter to live in. G died intestate in France in 2010. The appellant lived at the property, spent £5,000 improving it as well as paying all the outgoings. The respondent never visited the property. In 2013 the respondent commenced possession proceedings in respect of the property. The appellant defended and counterclaimed the sole beneficial interest in the property on the basis that her father had promised her the property once he had finished paying the loan in respect of the same and that she was “ready” for the property. The appellant’s claim was brought on the following bases: common intention constructive trust or proprietary estoppel.

At first instance the judge held that the appellant and the respondent held the property as beneficial owners in proportion to which they can contributed to the purchase and up-keep of the property.  The appellant appealed on the basis that she should have been the sole beneficial owner of the property.

There were two limbs to the appellant’s appeal: (1) the adoption of a resulting trust in non-commercial settings had been disapproved of in Stack and that the approach in Jones should have been applied to determine the extent of the beneficial interest pursuant to a common intention trust, (2) the judge should have imputed a common intention that the appellant was the sole beneficial owner as that was the fairest outcome, as per Jones.

The appeal failed. In terms of (1), as the appellant was not the registered owner of the property, it was for her to establish beneficial ownership. The evidence before the judge at first instance was that whilst G had discharged the loan in respect of the property by 1996, he clearly did not feel that the appellant was “ready” for the property. Indeed, the fact that the property had also been registered in the respondent’s name was evidence that G intended her to be joint-owner of the property and that the appellant was not to have sole-ownership. This is a finding of fact that the trial judge could (and did) make. As to (2) above, as the judge had made an actual finding of fact as to how the parties had agreed they would hold the property, he was not therefore then required to impute an intention to the parties based on fairness. Second, the circumstances of this case (property bought for child, held by father and step-mother) was not one where the approach in Jones should be applied (which, it is to be remembered, applied to a co-habiting couple).

This case is interesting as it re-affirms that Jones applies to a very specific set of circumstances; the Courts will not impute a common intention based on fairness easily. As always, the key to getting to the heart of such disputes is context and in the present matter, it was simply unrealistic to suggest that the respondent was willing to gift to the appellant a house that she jointly owned and had never visited.

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