Rhoden v Joseph

Transfer — No declaration of trust — Whether resulting trust to transferor — Whether express or implied agreement — Whether purpose of trust unfulfilled — Declaration that property held under tenancy in common in equal sharesThe parties formed a relationship in 1980 and the defendant, who was then the registered proprietor of a 99-year lease of a flat, transferred her legal interest into both their names by a transfer of August 21 1981. That transfer contained no express declaration of trust. In the following years the flat was mortgaged to secure borrowings and the plaintiff carried out certain works of repair and improvement. The relationship ended in 1986 and the plaintiff claimed a half-share in the proceeds of the sale on the basis of an express agreement, arrangement or understanding. The defendant contended that in the absence of a declaration of trust the plaintiff’s claim is limited to a proportion commensurate to his contributions to the mortgage and qualifying improvements he made or paid for; futher that the transfer should be set aside as it was made in contemplation of marriage or a permanent relationship, which was never fulfilled, that it was procured under undue influence or, alternatively, was unconscionable to be set aside in equity. Held The plaintiff was entitled to a declaration that the flat was held on trust for the parties as tenants in common in equal shares; order for sale granted. The evidence showed there was an express agreement, arrangement or understanding as to the beneficial ownership of the flat. Both parties accepted that the flat was to be “theirs” and that the plaintiff wanted security for his mortgage contributions liability for which was joint and several and works of improvement; further, the conveyancing solicitors proceeded on the basis that half the value of the flat was being transferred. Marriage or a permanent relationship was not, on the evidence, a definite condition of the purpose of the transfer. If there was a purpose it was to provide security to both parties and this was fulfilled. However, if the purpose of the transfer was not fulfilled, there would be a resulting trust as to a 23% share for the plaintiff’s contributions. There was no undue influence by the plaintiff. Neither was this a case where equity would intervene under the “poor and ignorant” principle to relieve the defendant from the consequences of her deed. Grant Armstrong (instructed by Keith Hall Juviler & Co) appeared for the plaintiff; and Christopher Nugee (instructed by Arnold Fooks Chadwick) appeared for the defendant.