Nigel Cole and Marie Forbes of Verisona, together with Clifford Darton QC and George Woodhead of Selbourne Chambers, have successfully assisted their client in obtaining a Judgment from the Court of Appeal which protects his beneficial interest in a property.
The case relates to a jointly owned property, purchased by father and son. As part of the purchase process, an X was entered into section 11 of the TR1 stating that the parties held the property as tenants in common in equal shares. The father (Defendant/Respondent) successfully argued both at the County Court and High Court, that this did not reflect the parties intention and that in fact there was no express declaration as to how the beneficial interest in the property was to be held. The Judge in the County Court found that there was no joint intention that the parties would hold the beneficial interest in the property equally and as the Respondent had paid the mortgage and raised the deposit, 100% of the beneficial interest vested in him and whilst the Claimant/Appellant was a legal owner, he had no share in the value of the property. The consequence of this was that despite being on the mortgage and a legal owner, the Claimant would never have a financial interest in the property.
This left the Claimant with a legal entitlement in the Property and no beneficial interest, notwithstanding that to the outside world, such as mortgage companies, he was a home owner. As a result the Claimant was unable to purchase another property with the assistance of a mortgage or claim additional benefits as he was seen to own half a property, despite the fact that the County Court and High Court said that he had no financial (beneficial) interest in it.
On the second appeal the Court of Appeal held that the TR1 could not be rectified on the facts because the Trial Judge in the County Court had not found a “continuing common intention” for the TR1 to contain no declaration of beneficial ownership, but only an absence of agreement or indeed discussions between the purchasers as to such ownership. This means that there was no agreement that the Claimant would not benefit, just that there was no agreement at all as to his share of the beneficial interest in the property.
The Court of Appeal therefore upheld the declaration in the TR1 that the Claimant owned 50% of the property both legally and beneficially and as such, is entitled to benefit from the property as and when it is sold.
This decision is likely to be of considerable interest to both practitioners and anyone who co-owns a property or indeed is about to purchase one with someone else.
Whilst this appeal was successful, it has taken two appeals to get to this point. It is essential that co-owners consider how the beneficial interest in a property is held and to be on the safe side, any agreement should be clearly recorded.