| TRUST OF LAND — Dwelling house — Joint interest — Secure tenant of home rented from local council exercising right to buy — Property conveyed to tenant and daughter in joint names — Mortgage taken out in joint names — Mortgage payments made out of rental income on property — No agreement as to respective beneficial interests — Whether beneficial interest followed legal ownership
Laskar v Laskar; [2008] WLR (D) 39
CA :Tuckey LJ, Lord Neuberger of Abbotsbury and Rimer LJ: 7 February 2008
The presumption that the legal and beneficial interests of a domestic property conveyed into joint names were, in the absence of an agreement between the parties, joint and equal applied to a family home occupied by cohabitants. The presumption did not apply to commercial properties or to property purchased as an investment even where the purchasers belonged to the same family.
The Court of Appeal so held when allowing the appeal of the claimant, Rini Laskar against the decision of Judge Levy QC in the Central London County Court on 7 February 2007, that the claimant had a 4.28% share in a property owned jointly by the claimant and the defendant, Zubera Laskar, and increasing the claimant’s share to 33%.
LORD NEUBERGER OF ABBOTSBURY said that the defendant and her husband were tenants of the property, owned by the local council, since before their daughter, the claimant, was born. While the claimant was at university the defendant applied for the secure tenancy to be transferred into her sole name because her husband had left. As the sole tenant she exercised her right to buy the property under Pt V of the Housing Act 1985. She could not afford to fund the purchase herself so she agreed with the claimant, who by then had an income of her own, to buy the property together under s 123 of the 1985 Act. The property was transferred into their joint names. The loan secured on the property as a mortgage was also in joint names. It was anticipated that the property would be let out and the income used to service the mortgage. Immediately after the purchase the defendant moved out to live with another daughter, and the property was let out. The defendant managed the property. She kept the rent, paid for the repairs and met the mortgage payments. There was later a serious falling out between the parties. The claimant started proceedings for a declaration of her interest in the property. The judge assessed the financial contribution the claimant had made to the property at 4.28% of its value. It was argued for the claimant that the house was owned jointly in equal shares both legally and beneficially. In Stack v Dowden [2007] 2 AC 432 it was held that where a domestic property was conveyed into the joint names of cohabitants without any declaration of trust prima facie both the legal and beneficial interests were joint and equal. The burden of proof was on the party seeking to establish that the beneficial interests were not equal. It was not clear to his Lordship that the principle in Stack v Dowden applied to a case where the parties were a mother and daughter living independent lives. The purchase was not to provide a home for them. The claimant did not live there at the time of the purchase. It was mainly an investment. It was midway between the cohabitation cases and the position of commercial properties. It was not right to apply Stack v Dowden where the primary purpose of the purchase was as an investment even where there was a family relationship. The presumption of advancement could apply to a mother and daughter, but the presumption that the mother intended to make a gift to the daughter could easily be rebutted: see Pettitt v Pettitt [1970] AC 777. The presumption was easily rebutted where a child was living independently, as in this case where the defendant also had other daughters and a son. If the presumption of equality in Stack v Dowden was rebutted, trust principles applied. In the absence of agreement the shares were held according to the contribution each party had made to the purchase price. On the facts the discount on the purchase price was attributable only to the defendant for her long residence as a secure tenant. The mortgage should be treated as an equal contribution of each party. The claimant had accordingly made a contribution of 33% of the value of the property.
TUCKEY and RIMER LJJ agreed.
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