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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Hudson v Hathway [2022] EWHC 631 (QB) (21 March 2022) URL: http://www.bailii.org/ew/cases/EWHC/QB/2022/631.html Cite as: [2022] EWHC 631 (QB) |
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Appeal No: 11BS018C |
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE COUNTY COURT SITTING AT BRISTOL
HIS HONOUR JUDGE RALTON
B e f o r e :
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LEE HUDSON |
Appellant (Claimant) |
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- and – |
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JAYNE HATHWAY |
Respondent (Defendant) |
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(instructed by Veale Wasbrough Vizards) for the Appellant
Mr Michael Horton QC and Mr Guy Holland (instructed by Ashtons Legal) for the Respondent
Hearing date: 10 February 2022
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Crown Copyright ©
Mr Justice Kerr :
Introduction and Summary
Outline Facts
The Judge's Decision
"was not saying no to such claims in principle but was entertaining the concept of unwinding their financial affairs. That, it seems to me, was a significant change in position. It cannot be said that Mr Hudson would have refused making some payment to Ms Hathway even if the court might have decided that no payment should be made."
Issues, Reasoning and Conclusions
The issues in the appeal
To establish her sole beneficial ownership, must the defendant have acted to her detriment or changed her position in reliance on the agreement?
Summary of appellant's submissions
"an agreement or understanding amounting to an intention as to the basis on which the beneficial interests would be held", which may be "express … or inferred, and must normally be supported by some detriment, to justify intervention by equity".
"There has to be some conduct detrimental to the cestui que trust, even if only in the sense of an irrevocable change of legal position, which is referable to the common intention proved and undertaken on the footing of the grant of the beneficial interest claimed."
"For a common intention constructive trust to arise, the parties must have had a common intention to share the property beneficially, upon the faith of which the claimant then acts in reliance to her detriment. The common intention by itself is not enough for the constructive trust to arise. Otherwise s 53(1)(b) of the 1925 Act would be meaningless. It is the detrimental reliance that makes it unconscionable for the defendant landowner to resile from their otherwise unenforceable agreement."
Summary of respondent's submissions
"The existence of a continuing common intention, that Ms Cowlam hold an 80% beneficial interest in the Property, is not … the end of the matter, in the determination of her beneficial interest. Such a beneficial interest … does not arise as an express trust, since it is not supported by a signed writing in compliance with section 53(1)(b) of the Law of Property Act 1925, but can only arise by virtue of the application of constructive trust principles. Those principles …. require, in circumstances where the beneficial interest is not to follow the legal interest, that the party asserting a constructive trust interest different to the legal interest, in reliance upon a common intention, must show that he, or she, has acted in reliance upon that common intention in such a way as to render it inequitable that he, or she, not obtain the intended interest. Although the focus of attention in both Stack and Jones v Kernott was on the proof of the common intention, whether by agreement, or imputation, there is nothing in either authority to abrogate the requirement of reliance, or the requirement that such reliance render it inequitable that the party asserting the trust be deprived of his or her intended interest."
Reasoning and conclusions on the first issue
"…. the following are the principles applicable in a case such as this, where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage, but without any express declaration of their beneficial interests. (1) The starting point is that equity follows the law and they are joint tenants both in law and in equity. (2) That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change. (3) Their common intention is to be deduced objectively from their conduct:
'the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words and conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party: Lord Diplock in Gissing v Gissing [1971] AC 886, 906.'"
"Recent cases, including Jones v Kernott, have tended not to comment on the role of detriment in crystallising the constructive trust, but instead focus on factors which establish the common intention, possibly because such factors might also constitute the necessary detriment."
"was a decision in a business context. The judge did not decide whether detriment is needed in the domestic consumer context, but we consider that the need for detriment is axiomatic in order to affect the conscience of the party denying the interest of the party who incurs the detriment".
"In matrimonial cases it may not be difficult, once the intention is established, to find conduct on the part of a spouse reasonably clearly referable to the creation of his or her beneficial interest in the property. But this was an arm's length arrangement between men of business and it is to be expected that there would be spelt out in some way the conduct or contribution anticipated as the quid pro quo for the creation of the beneficial interests claimed."
"[t]he common intention by itself is not enough for the constructive trust to arise. Otherwise s 53(1)(b) of the 1925 Act would be meaningless. It is the detrimental reliance that makes it unconscionable for the defendant landowner to resile from their otherwise unenforceable agreement."
If some detrimental reliance or change of position is necessary, did the defendant sufficiently act to her detriment or change her position in reliance on the agreement?
Summary of appellant's submissions
Summary of respondent's submissions
Reasoning and conclusions on the second issue
Conclusion