King, Asplin, and Nugee LJJ. Family farm. No dispute that applicant/appellant and his parents acquired the property on trust for themselves as equal co-owners. Absent express declaration, did they hold as joint tenants or tenants in common?

The applicant, Lloyd Dorian Williams, brought an action against two of his siblings who were executors of his father’s estate, saying that he was entitled to ownership of two Welsh farms, Crythan, and Cefn Coed. He asserted that the farms had been contributed to a partnership between him and his parents so that on the death of his parents the farms passed to him; or alternatively that he had a claim in proprietary estoppel.

At first instance, HHJ Jarman KC, sitting as a High Court judge, dismissed the claims. In particular, he found that Cefn Coed, which had been bought by the parents and the applicant in joint names with no express declaration of beneficial ownership, had been held by them as tenants in common in equal thirds.

If joint tenants, on Mrs Williams’s death Mr Williams Snr and the applicant thereafter held as joint tenants in equal shares until Mr Williams Snr severed the tenancy (something he did on legal advice when his solicitor identified that a form A restriction on the title was there erroneously given the lack of express declaration in the purchase documentation itself). On his death, Cefn Coed would be held by the applicant and Mr Williams’s estate as tenants in common in equal shares.

If tenants in common, Mrs Williams’s share passed to Mr Williams under her Will. When Mr Williams severed the tenancy, the property was owned as to two-thirds by Mr Williams and one-third by the applicant, and the survivorship rule had not place.

Lewison LJ granted permission to appeal on the basis that the starting point following Stack v Dowden was that a purchase in joint names indicates a joint tenancy. (Permission was not granted on other grounds; see [2023] EWCA Civ 1465.)

Held (per Nugee LJ):

The beneficial interest will follow the legal interest if there are no circumstances to displace this: Stack v Dowden considered. The principle that the onus is on the person seeking to show that the beneficial ownership is different from the legal ownership is not confined to the domestic context.

Where land is bought and transferred into joint names, there will always be a background to the purchase and other surrounding circumstances that shed light on the context in which the purchase took place. And in this area of law ‘context is everything’ as Lady Hale said in Stack v Dowden at [69]; see also Marr v Collie [2017] UKPC 17, [2018] AC 631 at [54] per Lord Kerr.

Here, purchase was a commercial decision made by the partners for the benefit of the partnership business by replacing the uncertainties of rent and other obligations owed to a landlord with the greater predictability of mortgage payments. The farm was acquired for business purposes.

Jones v Kernott and Stack v Dowden have not undermined the principle that property acquired in joint names for business purposes would be presumed to be held beneficially as tenants in common rather than as joint tenants with the accidents of survivorship. Given that only way to hold legal title is as a joint tenant, the presumption of equal beneficial joint tenancy that follows is much weaker in the business context, so that in the case of land bought for business purposes it is easily and normally displaced by the presumption that such property is intended to be held in common.

The fact that the mortgage was entered into jointly between the applicant and his parents did not say anything about the beneficial interests as when a joint charge is given to secure a borrowing, the borrowing should also be joint.