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Supperstone v Hurst and Another [2005] EWHC 1309 (Ch)

Appeal against determination of respective sizes of parties’ beneficial interests in property dismissed.

Supperstone v Hurst and Another [2005] EWHC 1309 (Ch)

Chancery Division: Michael Briggs QC, sitting as a deputy judge of the High Court (15 June 2005)

Summary
Appeal against determination of respective sizes of parties' beneficial interests in property dismissed.

Background
This was an appeal by the wife against a declaration by the registrar that the property in question, the matrimonial home since 1984, was beneficially owned in equal shares by the trustee in bankruptcy and the wife. The husband had been declared bankrupt in 2001, following an unsuccessful proposal for a voluntary arrangement ('IVA'); in connection with the IVA proposal, the husband and wife had made written statements to the effect that their beneficial interests in the property were 50/50, even though the transfer of the property to them contained no express declaration as to their beneficial interests. At the hearing before the registrar, both the husband and wife contended strenuously that, on a precise calculation of their respective contributions to the purchases of the property and the previous matrimonial home, it was now appropriate to maintain that the beneficial interest of the trustee in bankruptcy amounted to no more than 15 per cent.

It was common ground between the parties that the husband and wife each owned beneficial shares in both their matrimonial homes, and that their respective beneficial interests arose under a constructive rather than express or resulting trust; the only issue, therefore, was the respective sizes of their beneficial interests as tenants in common. It was agreed that the relevant legal principles could safely be extracted from the judgment of Chadwick LJ in Oxley v Hiscock [2004] EWCA Civ 546, [2004] 3 WLR 715, which proposed that, where a property was held by two or more individuals on a constructive trust, the size of the parties' respective beneficial interests in the property was to be determined by (1) any oral or written agreement between them, when the property was purchased or at any time subsequent to the purchase, (2) their common intention inferred from their conduct at the time the property was purchased or at any time subsequent to the purchase of the property, or (3) what the court considered to be fair, having regard to the whole course of dealings between them in relation to the property.

The wife challenged the registrar's finding of equality of beneficial interests on the basis that (1) he had made factual errors in analysing the sources of contributions made to the purchase price of the property, and (2) he had given far too little weight to the disparity between the husband's and wife's respective contributions to the purchase price and excessive weight to their written statements in 2001.

Judgment
Held, dismissing the appeal, that it was unreal to suppose that, without any discussion between each other, the husband and wife came simultaneously, at the time of the purchase of the property, to have the same intention as to its beneficial ownership. This was, therefore, a case in which the size of the parties' respective beneficial interests fell to be determined on the basis of what appeared to the court to be fair, having regard to all the parties' conduct with reference to the property, both at the time of and subsequent to its purchase.

Further, the registrar was correct to describe the written statements made by the husband and wife in 2001 as a compelling factor in his assessment of what was fair; and it would have been very unfair if the wife had now been able to obtain a determination from the court that her interest exceeded 50 per cent, in view of her written statement to the husband's creditors in 2001 that she and her husband were equal beneficial owners in the property.

Read the full text of the judgment here