HHJ Willans. Dispute with third parties regarding the ownership of two properties and whether they should be treated as matrimonial property.

Background

The Respondent Husband and SB (the brother of the Respondent Husband) purchased a property (‘No11’) in 1983; they registered as legal owners and there was no statement of beneficial interest. SB’s case was that he was sole contributor and that RH was named a legal owner for tax reasons only, there being no intention for him to share a beneficial interest in the property. The Respondent Husband was removed from the title deed in 2013.

The Respondent Husband purchased a second property (‘No22’) solely in 1985. Both properties were purchased before the marriage of the Applicant Wife and the Respondent Husband in 2005.

In 2009, PT (the sister of the Respondent Husband) was joined onto the title for No22 in order to re-mortgage the property. Again, there was no statement of beneficial interest.

In 2014, the Applicant Wife moved into No22; property costs were met by having lodgers. The Applicant Wife contributed to improvement works on the property before she moved in but this was not material and the works were largely funded from the rental income. SB had lived abroad. He returned around the same time the W moved into No22 and the Respondent Husband was removed from the title deed for No11.

There was confusion and contradictory evidence in this case, including in respect of when exactly the Applicant Wife moved into No22 and when the couple separated. It was found that the parties had to have separated between 2014–2017; divorce proceedings commenced in 2017 and financial proceedings in 2019.

The dispute was over the ownership of these properties, considering the parties’ intentions at the time of changes in legal ownership, and the Respondent Husband’s beneficial interest as a result of the same.

Outcome – No22

The Applicant Wife’s case was that the Respondent Husband was solely entitled to this property despite his sister being named on the legal title. It was found that there was no intention that PT acquire any beneficial interest in No22 when she was added to the title and the Respondent Husband was solely entitled to this property. In making this finding, reference was made to PT’s oral evidence candidly acknowledging she did not intend to have an interest in 2009 as well as to the fact that this was the Respondent Husband’s only property in 2009 and the family, whose support was elsewhere described as ‘gratuitous’, would not have considered the implications for the Respondent Husband were PT considered to have a 50% beneficial interest without making any financial contributions to the property and given she owned her own property. This conclusion was further supported by PT’s lack of involvement in improvement works (her approval was not sought) and management of the property as well as PT’s lack of interest in the property and the absence of any attempts on her behalf to protect her interest during possession proceedings.

Outcome – No11

The Applicant Wife’s case was that the Respondent Husband did have a beneficial entitlement to this property despite making no contribution except enabling SB to obtain relief on interest. It was submitted on her behalf that this was by virtue of the Respondent Husband being named on the title at the point of acquisition and that the later change in legal title was to distance him from ownership of the property and protect it from any claim by her in financial remedy proceedings.

Regarding ownership at the point of acquisition, on which the comments are technically obiter, the wife could not rebut SB’s account of why the property was acquired in this way and it was unclear why the Respondent Husband would have had an interest. Additionally, it would have been inconsistent with the findings regarding PT’s lack of interest in No22 to consider the Respondent Husband to have obtained a 50% interest in No11 for simply providing a tax benefit and the inclusion of the Respondent Husband on the legal title was found to have been plausibly explained by SB.

Regarding beneficial ownership following the change in legal title in 2013, it was found that even if this change was enacted to protect the property from claims by the Applicant Wife, ‘B might just as well have been seeking to protect his own property from a fear of an unjustified claim by AW as from a justified claim’ but that, in considering all of the evidence, the change in 2013 was a step taken to make official the beneficial reality in respect of that property.