Case No: B2/2005/0279
Neutral Citation Number: [2005] EWCA Civ 1581
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BRENTFORD COUNTY COURT
HER HONOUR JUDGE WAKEFIELD
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Wednesday, 21st December 2005

Before :

THE RT HON LORD JUSTICE MAY
and
THE RT HON SIR PETER GIBSON
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Between :

	CROSSLEY	Appellant	
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	CROSSLEY	Respondent	

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(Transcript of the Handed Down Judgment of
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Simon Calhaem (instructed by Messrs Lloyd Brennand) for the Appellant
Paul Steven Crossley, the Defendant, did not appear and was not represented

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Judgment
Sir Peter Gibson:
1.	This is the judgment of the court, to which we have each contributed. 
2.	This is an appeal by the claimant, Mrs Corinna Crossley, with permission of Chadwick LJ, against the decision and order of Her Honour Judge Wakefield in the Brentford County Court on 28th January 2005.  The judge decided that the beneficial interest in a property at 16 Epworth Road, Isleworth was held in equal shares between the claimant and the defendant, Paul Steven Crossley.
3.	The defendant, who has acted in person in these proceedings, did not attend the hearing of the appeal.  He twice sought an adjournment by letter very shortly before the hearing.  He gave various reasons for wanting an adjournment, including that he was trying to arrange gratuitous representation.  May LJ refused an adjournment.  He considered that the defendant had had ample time to make arrangements for his representation and other matters.  The defendant has, apparently, a history of failing to attend court hearings.  
4.	The appellant is the defendant’s mother.  She brought the proceedings under the Trusts of Land and Appointment of Trustees Act 1996.  The legal title to the property at Isleworth is registered in the joint names of the appellant and the defendant.  The appellant sought a declaration that she was the sole beneficial owner.  That was resisted by the defendant.  Mr Alan Crossley, now deceased, was the appellant’s husband and the defendant’s father, and the property was transferred to him, the appellant and the defendant when it was purchased in 1988.
5.	Where property is conveyed into the names of two or more transferees but the beneficial interests in the property are not declared and the court is asked to determine the nature and extent of those interests, the court frequently faces a difficult task, as the cases in this area of the law amply demonstrate.  The amendment in 1997 of the Land Registration Rules 1925 to require, in the case of a transfer to joint proprietors, a compulsory declaration of trust by the transferees, specifying the nature and extent of those interests, should obviate that difficulty, but the amendment has not affected earlier transfers such as that in the present case where the difficulty remains.
6.	In this case the court’s task has been rendered the more difficult by the absence of basic documents which ordinarily the court would expect to see, particularly when the transfer occurred less than 20 years ago, when the transferor was a local authority, when the transferees had solicitors acting for them, when a building society provided the major part of the consideration for the transfer by way of a mortgage loan and when an endowment policy was effected with another institution and was linked, the judge said, to the transfer (or, more accurately, as we would infer, linked to the mortgage).  And yet, despite the judge’s request to see the transfer, no copy of it has been found, we are told, nor has the judge’s request to see the policy been met.  We have to say that these failures seem to us as surprising as they are unsatisfactory.  We also find it surprising that the conveyancing file of the transferees’ solicitors was also said to be unavailable.  It is, we think, likely that those solicitors, whether or not aware of the advice of Bagnall J in Cowcher v Cowcher [1972] 1 WLR 425 at 442 to take the instructions of transferees as to the beneficial interests in the transferred property, would have done so when the defendant was at that time only 18 and was undertaking substantial liabilities under the mortgage as well as under the policy.
7.	The difficulty for the judge was compounded by the fact that the defendant was not represented and that he appeared in person.  It is unfortunate that the judge did not have legally qualified assistance from the defendant’s side which would have been desirable in relation both to the evidence and to the law.  The appellant did have the benefit of Counsel, Mr Calhaem, who appears before us as he did below, but he has complained of misunderstandings by the judge of his submissions.  He has told us that the judge had no skeleton argument from him save for one limited to the presumption of advancement, which the judge requested.  That presumption, applicable to a gift by a father (but not a mother) to his child, seems to us of little significance in this case.  The absence of a skeleton may have contributed to those misunderstandings.
8.	The judge set out the facts as follows:
“5.	The claimant and her late husband occupied the property as tenants of the local authority.  They made enquiries as to purchasing under the “Right to Buy” scheme and, on or about 14th July 1988, the property was purchased and conveyed into the joint names of the claimant, Mr Alan Crossley and the defendant.  
6.	The Landlord’s Offer Notice had been dated 10th December 1986 and was addressed to Mr Alan Crossley, Mrs Corinna Crossley, Mr Thomas Frederick Crossley, who I understand to be the brother of the defendant, and Mr Paul Steven Crossley.
7.	The market value as at 1st July 1986 was stated to be £56,500 and a discount for an eight year period was set at 38 percent.  The offer price was, therefore, £35,030 and the eventual purchase price was £35,051.28 at the time of the transfer two years later.
8.	The transfer document did not apparently set out the purchasing parties’ respective beneficial interests.  I have asked to see a copy of the transfer, but it has not been forthcoming.
9.	The purchase price was paid in part by a deposit of £10,022.80, supplied from the joint resources of the claimant and Mr Alan Crossley, with the balance being borrowed from Citi Bank Savings under the terms of an interest only mortgage loan, taken out in the names of the claimant, the defendant and Mr Alan Crossley.  The present mortgagee is the Chelsea Building Society, but I have no further information as to the term of the loan or loans, or whether the difference simply reflects a change of name of the mortgagee rather than a new loan.
10.	Apparently, an endowment insurance policy, linked to the mortgage, was taken out with Lincoln Financial Group on the life of the defendant.  I have not seen a copy of the policy document and the policy may now have lapsed.  The defendant has not responded to requests from the claimant to give authority to Lincoln Financial Group to release any details of the terms of the policy to the claimant’s solicitors.
11.	At the time of the purchase of the property, the defendant was aged 18 and was living at the property with his parents.  Two older children lived elsewhere.  The claimant was then aged 59 and is now 74.  Mr Alan Crossley died in 1997, intestate.  
12.	In August 1998, the defendant married and took his wife to live at the property.  They lived there with the claimant until the birth of their first child in August 2002.  By that time, relations between the claimant and the defendant had seriously deteriorated.  The defendant’s wife also has a difficult relationship with the claimant.  The claimant remains living on her own in the property, which is currently valued at £250,000.  Sadly, hostility between the parties is now such that they would not even look at each other during the course of the proceedings in court.”
9.	The issues which the judge had to determine were (a) whether the defendant had any beneficial interest in the property; and (b) if so, what were the nature and extent of that interest.  The judge said that the relevant principles of law were clear.  She stated them as follows:
“Where property is purchased with money provided by A and B, but is conveyed into the names of A, B and C, a resulting trust would normally arise by which C would hold the share of the property on trust for A and B.  That is, there is a presumption that A and B did not intend to make a gift to C.  Where, however, there is contrary evidence of the intention of A and B, or where a presumption arises as to there being a gift to C, no such trust would automatically arise.
Between a father and a son there is a presumption of advancement if the former buys property and puts it into the name of the latter.  That is to say, on the face of it the property would be a gift.  But the presumption of a resulting trust and the presumption of advancement can be rebutted by evidence of the actual intention of the purchaser.  The court should always strive to determine the intention of the purchaser rather than rely on any presumptions.”
The judge referred to Pettitt v Pettitt [1970] A.C. 777 as to the presumption of advancement, and quoted from the judgment of Lord Phillips MR in Lavelle v Lavelle [2004] EWCA Civ 223 and from Kyriakides v Pippas [2004] EWHC (Ch.) 644.  Lord Phillips in Lavelle said that where one person transfers the legal title of the property that he owns or purchases to another without receipt of any consideration, the effect will depend on his intention:  “In these cases equity searches for the subjective intention of the transferor”.  In Kyriakides v Pippas, it was said that, where there is no declaration of trust, the court puts itself in the position of a jury and considers all the circumstances of the case, so as to arrive at the purchaser’s real intention.  After referring to Lavelle, Gabriel Moss QC, sitting as a High Court Judge, said:
“I suspect the position we have now reached is that the courts will always strive to work out the real intention of the purchaser and will only give effect to the presumptions of resulting trust and advancement where the intention cannot be fathomed and the “long-stop” or “default” solution is needed.”
10.	The judge also quoted the well known passage in Lord Bridge’s opinion in Lloyds Bank v Rosset at page 132 relating to constructive torts:
“The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially.  The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of expressed discussions between the parties, however imperfectly remembered and however imprecise their terms may have been.  Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.
In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust.  In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust.  But, as I read the authorities, it is at least extremely doubtful whether anything less will do.”
11.	The judge said that the two primary areas of factual dispute were: (a) the intentions of the appellant, the defendant and Mr Alan Crossley at the time of the purchase; and (b) what contributions the defendant had made to purchasing the property or servicing its mortgage.
12.	The judge stated that counsel for the appellant had initially said that there was no evidence of any agreement at the time of the purchase, but that subsequent evidence resulted in counsel accepting that this was not so.  There was some evidence.  There is an unpersuasive ground of appeal which argues that the judge was wrong here.  The appellant’s evidence was that there had been a positive agreement at the time that the defendant would have no interest in the property.  The ground of appeal is unpersuasive because the judge expressly referred to this part of the appellant’s evidence.  The judge no doubt correctly understood the initial submission to be that there was no evidence to support the proposition that there was an agreement that the defendant should have an interest in the property.
13.	The judge reviewed the appellant’s written and oral evidence.  The appellant said that it was never envisaged that the defendant would be entitled to a share of the property.  She said that he was simply helping his parents obtain a mortgage.  “By using his name we were giving him a little bit of extra incentive, a bit of responsibility.  By putting his name on the mortgage we were hoping he would think: I might get something out of it.”
14.	In his evidence, the defendant said that there was “no way I would just use my name as responsibility,” when it had been suggested to him that he was merely to have a nominal presence as joint owner and joint mortgagor.  In response to the judge’s question as to what occurred at the time of the discussions about the purchase of the property, the defendant said that Alan Crossley, the appellant and the defendant went to solicitors in Enfield, and that after a chat with the solicitor “it was agreed that we was going to buy the house”, that the solicitor shook his hand and congratulated him on now being a householder, and that in the pub after that his father said “This, son, will be yours one day.” 
15.	The judge had said (paragraph 4 of her judgment) that her decision was based in part on her assessment of the credibility of the witnesses with the relevant documents.  She found as follows:
“It is clear to me from the oral answers of the claimant, that it was the common intention of all three prospective purchasers, those intentions expressed and to be presumed from their conduct at the time of the purchase, that the defendant would acquire a beneficial interest in the property.
I do not accept what the claimant said in her witness statements as to pre-purchase discussions to the effect that the defendant was not to obtain any beneficial interest in the property.
In the absence of any contrary intention, I find that the intended share at the time was one third.  The defendant had a one third legal interest and at least a one third responsibility for the mortgage, the mortgagors, in fact, almost certainly being jointly and severally liable for the whole of the debt.  He was, it would appear, also liable to pay all the contributions to the endowment policy.”
16.	The judge said that it was accepted that, upon Mr Alan Crossley’s death, his share of the beneficial interest would pass to the surviving joint tenants in shares equivalent to their existing interests.  So the defendant now held a 50% beneficial interest.  This result was (wrongly in our judgment) said to arise from Mr Crossley’s intestacy.  If it was indeed a beneficial joint tenancy, the appellant and the defendant, in the absence of a severance of the joint tenancy, had identical interests in the property.
17.	The judge then said that it was not necessary to make findings about contributions after the purchase.  She held nevertheless that the defendant had made no contributions between 1988 and 1999.  After that he made interest payments on the mortgage totalling £5,370.60 between 1999 and 2003.  In the same period, the claimant paid £2,214.48.  
18.	There are two grounds of appeal, in addition to the unpersuasive third ground, to which we have referred, that the judge mischaracterised counsel’s submissions as to the appellant’s evidence.   The first other ground is that the judge should have preferred the appellant’s evidence to that of the defendant on credibility grounds.  It is said that the defendant’s poor credibility was not properly considered and that the judge gave inadequate reasons.  Four evidential matters are referred to.  Three of them were distinctly peripheral.  The fourth, concerning the defendant’s claim that he had made greater contributions than the judge found, was expressly dealt with by the judge.  The judge said in terms that she had to judge the witnesses’ credibility and there is the clear inference that she did so.  We have no doubt but that she took account of the matters now raised.  In our judgment, this ground provides no proper basis for allowing an appeal.
19.	The third ground of appeal, as it is advanced in Mr Calhaem’s written submission, is a (somewhat confused) mixture of two different points.  These are:
a)	if the judge was correct to reject the appellant’s evidence as to the agreement or understanding at the time of purchase, she should have applied the presumption of a resulting trust to the effect that the appellant and her husband held the entire beneficial interest to the exclusion of the defendant.  The judge was wrong to say that the presumptions of advancement and resulting trust balance each other out.
b)	if the judge was correct to reject the appellant’s evidence as to the agreement or understanding at the time of purchase, she should have decided that the parties acquired the property without specifying their respective beneficial interests, such that they must have intended that each should have a fair share at the appropriate time, to be judged by reference to the whole course of dealing over the years and in particular their respective financial contributions.  
20.	Mr Calhaem submitted orally that the judge had found that the defendant’s financial contributions were small and limited to the period 1999 to 2003.  The appellant by contrast (or her husband) had contributed the entire purchase price and all the mortgage interest payments between 1988 and 1999.  The fair apportionment of the beneficial interest should give it entirely to the appellant – something of a leap this, in the face of the fact that the defendant assumed obligations under the mortgage and the endowment policy and made a majority of the mortgage repayments after 1999.  Mr Calhaem gave no convincing answer to our question as to what on this view happened to Mr Alan Crossley’s share upon his death, both technically and when he had told the defendant that one day the property would all belong to him.
21.	We are quite unpersuaded that the judge was wrong to reject a presumption of resulting trust.  The presumption yields to the intention of the parties, upon which the judge made findings of fact.  We do not consider that those findings of fact are amenable to appeal, if they were made within a framework of correct legal principle. 
22.	Mr Calhaem submitted that the judge was under a duty to evaluate the evidence as to whether there was an agreement, arrangement or understanding between the transferees on the beneficial ownership of the property.  He argued that the judge did not carry out that duty and failed to give reasons for preferring the evidence of one party to that of the other.
23.	We accept that in a case such as this the judge had to consider whether there had been any agreement, arrangement or understanding reached between the transferees as to the beneficial ownership of the property.  That, as Lord Bridge said in Lloyds Bank plc v Rosset [1991] 1 AC 107 at 132, was the first and fundamental question which must always be answered.  However, in paragraphs 23-30 the judge did consider the evidence relating to this point and, whilst she expressed her conclusion in terms of intention, more appropriate to a case where the question was whether the presumption of advancement or a resulting trust was rebutted, rather than in terms of an agreement, arrangement or understanding as to the beneficial interest being acquired, her conclusion was plainly that there was a common communicated understanding that the defendant would acquire a beneficial interest.
24.	We also accept that, as this court held in Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 at 383, to which Mr Calhaem referred us, a judge should give reasons for his conclusions.  In the present case the judge has adequately explained her reasons for her conclusion.  She has not accepted the appellant’s evidence in her witness statements as to pre-purchase discussions that the defendant was not to have a beneficial interest, and the reason for that is expressed to be the appellant’s oral evidence.
25.	We think it worth quoting a little more fully than the judge did what the appellant said.  Her evidence in chief included these exchanges after she had said that the use of the defendant’s name was to give him “a little bit of interest and initiative”:
“Q.	Can you remember what was discussed between you and your husband in relation to this?
A.	In relation to this it was that we should pull all together and to carry on and pay for the mortgage.  He also disliked the idea of owing money to the bank.
Q.	Sorry, who was to pay the mortgage?
A.	Us.
Q.	Who is ‘us’?
A.	All of us, my husband, myself and my son.
Q.	Did you have a discussion with [the defendant] about this?
A.	We had a discussion al[l] together.
…
Q.	But you say that it was the case that you would all be making financial contributions?
A.	I suppose.
Q.	How was he going to see that money back?
A.	On my death I suppose.”
26.	In answer to question from the judge the appellant said that she and her husband, in putting the defendant’s name on the mortgage, were giving him a little bit of responsibility.  These exchanges then followed:
“JUDGE WAKEFIELD:  	Again I need to ask you: how does putting his name on the mortgage give him a bit of responsibility?
A	Because he was putting his name, by putting his name on the mortgage, we was hoping he would think ‘Oh, I might get an interest out of it.  I might get something out of it’.
JUDGE WAKEFIELD:	Did you talk to him about that at the time?
A.	Yes, yes, several time[s]”
27.	In the light of that evidence the judge was entitled to reject the appellant’s written evidence of an agreement that the defendant would take no beneficial interest.  The appellant’s oral evidence suggesting that the defendant was to see his contributions back on her death is consistent with the notion that the defendant would take beneficially by survivorship.
28.	The judge’s conclusion that there was a common understanding that the defendant was to acquire a beneficial interest in the property was, in our judgment, one that she was entitled to reach on the evidence.  In Stack v Dowden [2005] EWCA Civ 857 Chadwick LJ observed in paragraphs 17 and 25 that in a case where the property has been transferred into joint names, it can usually be taken for granted that each was intended to have some beneficial interest in the property.  Add to that the fact that the defendant was made liable with the appellant and Mr Alan Crossley for the mortgage and was apparently liable to pay all the contributions to the linked endowment policy on his life.  It would have required convincing evidence to deny to the defendant any beneficial interest in the property, and such evidence was lacking.
29.	The judge can be criticised for failing expressly to consider what Lord Bridge in Rosset made clear needs to be considered once the relevant agreement, arrangement or understanding is found to exist, viz. whether the person asserting a claim to a beneficial interest acted to his detriment or significantly altered his position in reliance on that agreement, arrangement or understanding.  However, we think that such detrimental reliance can be inferred from the defendant’s undertaking of joint and several liability under the mortgage as well as his apparent acceptance of liability under the related policy.  It follows that the defendant can claim a beneficial interest in the property under a constructive trust.
30.	The more troubling question is the quantum of the defendant’s interest.  Chadwick LJ, in granting the appellant permission to appeal, found difficulty in seeing how the judge proceeded from holding that the defendant had a beneficial interest in the property to concluding that there was a beneficial joint tenancy.  Mr Calhaem complains that the judge, although referred to the decision of this court in Oxley v Hiscock [2005] Fam 211, did not do what Chadwick LJ said in paragraph 69 should be done when answering the question of the extent of the parties’ respective beneficial interests in the property.  Mr Calhaem has also drawn our attention to what Chadwick LJ said in Stack v Dowden at paragraph 26, that there is no reason in principle why the approach to that question should be different, in a case where the property is registered in the joint names of cohabitees, from what it would be if the property were registered in the sole name of one of them.
31.	In Oxley v Hiscock Chadwick LJ began his summary of the law in paragraphs 68 and 69 of his judgment as follows:
“I have referred, in the immediately preceding paragraphs, to “cases of this nature”.  By that, I mean cases in which the common features are: (i) the property is bought as a home for a couple who, although not married, intend to live together as man and wife; (ii) each of them makes some financial contribution to the purchase; (iii) the property is purchased in the sole name of one of them; and (iv) there is no expressed declaration of trust.  In those circumstances the first question is whether there is evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial share in the property.  In many such cases – of which the present is an example – there will have been some discussion between the parties at the time of the purchase which provides the answer to that question.  Those are cases within the first of Lord Bridge’s categories in Lloyds Bank plc v Rosset.  In other cases – where the evidence is that the matter was not discussed at all – an affirmative answer will readily be inferred from the fact that each has made a financial contribution.  Those are cases within Lord Bridge’s second category.  And, if the answer to the first question is that there was a common intention, communicated to each other, that each should have a beneficial share in the property, then the party who does not become the legal owner will be held to have acted to his or her detriment in making a financial contribution to the purchase in reliance on the common intention.
In those circumstances, the second question to be answered in cases of this nature is “what is the extent of the parties’ respective beneficial interests in the property?”  Again, in many such cases the answer will be provided by evidence of what they said and did at the time of the acquisition.  But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have – and even in a case where the evidence is that there was no discussion on that point – the question still requires an answer.  It must now be accepted that (at least in this court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.”
32.	The fact that the judge did not determine what was the fair share to which the defendant was entitled having regard to the whole course of dealing and that she specifically held that it was unnecessary to make any findings as to the parties’ post-purchase contributions to the mortgage and other outgoings suggests to us that the judge was of the view that the parties had reached an agreement, arrangement or understanding not only that the defendant should have a beneficial interest but that the defendant should take a specific beneficial interest.  Where the parties have reached a consensus on the beneficial interests in the property, the court will give effect to it, unless there is very good reason for not doing so, such as a subsequent renegotiation (see Mortgage Corporation v Shaire [2001] Ch 743 at 750 per Neuberger J).  The task of determining the fair share having regard to the whole course of dealing in accordance with Oxley v Hiscock, need only be performed in the absence of an agreement, arrangement or understanding as to the nature and extent of the respective beneficial interests of the parties.  As Chadwick LJ said at paragraph 66 what the court is doing when performing that task is to supply or impute a common intention as to the parties’ respective shares in circumstances in which there was in fact no common intention.  Where a common intention has been found in the agreement, arrangement or understanding of the parties, that is unnecessary.
33.	With some hesitation we have concluded that the judge was entitled to reach that conclusion on the material before her.  First, as the judge pointed out, the legal estate had been transferred to the defendant as well as Mr Alan Crossley and the appellant.  They were joint tenants of that legal estate, and in the absence of evidence to the contrary the equitable interests would follow the legal interests.  Second, the judge also pointed out that the transferees undertook joint and several liability under the mortgage.  That too suggests a beneficial joint tenancy of the property on which the mortgage had been secured.  Third, the defendant’s evidence, recorded by the judge, that Mr Alan Crossley told the defendant after the visit to the solicitors to complete the purchase that the property would be his one day, again suggests that Mr Alan Crossley was of the view that the defendant would take the property one day and would do so by survivorship.  The defendant had siblings and Mr Alan Crossley died intestate, so that the likelihood is that as a result of the transfer into joint names it was expected that the defendant alone would own the property eventually by surviving his parents.  Fourth, the appellant herself was of the view that the defendant would recover his contributions to the purchase and would do so on her death.  Again, this is consistent with the surviving joint tenant taking on the death of the survivor of the joint tenants.
34.	For these reasons we conclude that the judge’s decision that there was a beneficial joint tenancy can be supported.  We dismiss this appeal.