Wall v Munday [2018] EWHC 879 (Ch) sheds light upon the importance of addressing property affairs and in particular co-ownership, when a co-owner is faced with circumstantial changes affecting parties’ ownership rights.
A married couple held freehold property as joint tenants. Following a fall out and divorce, Munday left the property. There were discussions about the property, but no formal steps were taken to deal with its ownership.
Wall treated the property entirely as his own by insuring, maintaining, improving, letting out and paying off the mortgage. Wall passed away intestate and Munday filed a death certificate at the Land Registry for transfer of the legal title into her sole name under the doctrine of survivorship.
Wall’s personal representative challenged Munday’s claim.
Proceedings were commenced against on grounds (1) An informal settlement during the divorce proceedings to vest Munday’s ownership to Wall subject to consideration; (2) A severance of the joint tenancy in equity by course of mutual dealings; and (3) a variation of the parties’ shares in the property.
At first instance, the claim of an informal agreement was rejected. The judge held that the beneficial co-ownership had been severed. Notwithstanding, severance of the joint tenancy by mutual conduct, the judge was not satisfied that there was sufficient evidence of a common intention to vary the parties’ shares in the property from the default position. The judge found that the parties retained the property in equal ownership on the basis that “[t]he conduct must have been conduct observed or observable by the other party and [he is] to take no account of intentions of one not communicated to the other.”
With regards to the apportionment of shares, the judge took into account the following:
- Both parties were aware Wall undertook all payments for mortgage, insurance and maintenance of the property;
- Both parties were aware that Wall was managing and letting out the property in order to undertake that burden; and,
- The legal liability of the mortgage remained through a joint liability.
On appeal to the High Court, it was argued Wall’s estate should retain 86% as there was an intention to vary the beneficial interest of the property; and that the judge had erred in making his decision as he did not consider the whole course of dealings after repayment of the mortgage.
Judge Paul Matthews held that the judge at first instance was entitled to say he could not infer from the conduct of the parties that there was a common intention to vary the parties’ shares on the property. Upon reading the judgment, he found that the judge had, in fact, considered the whole course of dealings was adduced to him. This part of the appeal was dismissed.
If you share co-ownership of a property, regardless of your relationship or circumstances, we strongly urge you to formalise your arrangements and keep them under review if and when your circumstances change. Please contact Inderjit Gill or any other member of our Dispute Resolution Team should you need to discuss co-ownership issues.
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