Barnes v Phillips [2015] EWCA Civ 1056

(Court of Appeal, Longmore, Lloyd Jones LJJ and Hayden J, 23 October 2015)

Property – Unmarried couple – Beneficial ownership – Constructive trust – Change to intention to hold property in equal shares – Finding that the woman held 85% of the beneficial interest – Whether the judge had erred

The man’s appeal from a determination that the woman held an 85% interest in the property they held as tenants in common was dismissed.

The man and woman lived together from 1989 and had two children together. The property was purchased in 1996 using a £25,000 pound deposit and the balance being funded by a mortgage. It was held by them as tenants in common in equal shares.

The man paid the mortgage and some of the bills while the woman paid for the remainder. She worked part-time after the children were born. Major works were carried out to the property to which both contributed. The man purchased a number of other properties as investments in his sole name. When he fell into financial problems the property was remortgaged but the man failed to pay off all of his debts which had been a requirement of the remortgage agreement.

When the relationship broke down the man only continued to make mortgage payments for 8 months and from 2008 onwards the woman had sole responsibility for mortgage repayments and she had sole financial responsibility for the children. She had also funded substantial maintenance works to the property. The property was now valued at approximately £497,500.

The woman initiated proceedings under s 14 of the Trusts of Land and Appointment of Trustees Act 1996. The judge found that the man had not given full and frank disclosure and where the evidence between the parties was in conflict he preferred that of the woman. He held that upon the purchase of the property the parties were joint tenants in law and equity as that was their intention. They both contributed equally to what was a marriage without ceremony. There was no direct evidence that the parties later intended that their respective shares in the property would change or how they would change. There was also no evidence from which their shares could be inferred and, therefore, the court would impute their intention on the basis of what was fair. The judge held that the parties held the property as tenants in common in shares of 85% held by the woman and 15% held by the man. The man appealed.

The appeal was dismissed. It was not the case that the judge had confused inferring with imputation. He clearly had in mind the importance of the distinction. His use of the word impute was deliberate and referred to the second stage of the process outlined in Jones v Kernott. The judgment was missing the first stage of the process of whether a common intention that the shares should change could be inferred but given his in-depth detailing of the Jones v Kernott judgment it was at least strongly arguable that the judge must have concluded that there was such a common intention.

It was open to this court to infer a common intention on the basis of the evidence. In the present case the weight of the evidence supported such an inference. The judge had not erred in his finding of the shares the property were to be held in and it had been open to him to take into account the man's supposed lack of child support payments.

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Neutral citation: [2015] EWCA Civ 1056

Court of Appeal
Civil Division

Royal Courts of Justice
Strand
London
WC2A 2LL

Hearing Date: 23 October 2015



The full judgment is available on the Bailii website:
Barnes v Phillips [2015] EWCA Civ 1056  

See also Gwyn Evans, 'Barnes v Phillips [2015] EWCA Civ 1056: Imputation! Imputation! Imputation!'