The Court of Appeal has just delivered a stark reminder in the judgment of Graham-York v York that the purpose of the Trusts of Land and Appointment of Trustees Act 1996 is not to offer ‘redistributive justice’.
Miss Graham-York lived with her partner, Norton Brian York at 17 Marlborough Road, London from 1986 until his death in 2009. They were not married. The property was purchased and registered in his sole name. In 1990 he took a mortgage against the property, secured by a charge in favour of Leeds Building Society.
After his death, possession action was taken by the bank. Miss Graham-York joined proceedings against Norton York’s estate seeking a declaration of a 50% beneficial interest in the property. She claimed that her 50% interest arose out of a constructive trust giving effect to the common intention of her and Norton York to own the property equally. She claimed that the bank was bound by her interest, which overrode the mortgage created in 1990, because she was already in actual occupation by that time.
The trial judge ruled that the house should be sold. Miss Graham-York would receive 25% of the net proceeds of sale that should be paid to her after the Leeds Building Society’s interest had been discharged.
Miss Graham-York appealed the decision. Lord Justice Tomlinson gave the leading judgment in the Court of Appeal, and arrived at the same conclusion as the trial judge. The judgment bears out the fact sensitive enquiry in to the issues of common intention and contributions in TLATA claims.
Lord Justice Tomlinson referred to Stack v Dowden as the starting point for determining common intention. Where there is evidence of direct financial contribution to the property the Court is likely to infer common intention, although is not obliged to only look only at financial contributions (Oxley v Hiscock).
Looking at the parties’ conduct objectively, the trial Judge found that there was a common intention that the beneficial interest in 17 Marlborough would be shared. However, there was not enough evidence for the judge to determine in what proportions they intended to hold the interest. The Court of Appeal cited the case as one that Lord Walker and Lady Hale in Jones v Kernott envisaged would arise frequently.
Lord Justice Tomlinson held that trial Judge was correct in answering the question as to how the beneficial interest should be split by referring to the decision in Oxley v Hiscock: “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” [2005 Fam 211 para 69].
Lawyers for Miss Graham-York argued that it was fair for her to receive 50% of the property because she had suffered years of domestic abuse from Norton York throughout the relationship. Though the Court of Appeal was sympathetic to the plight of Miss Graham-York, it was held that the Court’s role was not concerned with redistributive justice. The Court is concerned with the conduct of the parties in relation to the property. These words were emphasised in the judgment. The Court of Appeal gently criticised the trial judge for not expressly including them in her formulation, although she reached the right decision.
Perversely, Miss Graham-York’s evidence about the abusive nature of her partner persuaded the Court that it was less likely that it was their common intention to hold the property equally because he was of such a controlling nature.
Miss Graham-York’s lawyers conceded at appeal that her interest did not override the mortgage. She was unsuccessful arguing that the mortgage debt should be discharged out of Norton York’s share of the property only. The Court held that Miss Graham-York had had the benefit of the mortgage money, and had not pleaded equity of exoneration so should pay the debt out of her share.
Miss Graham-York’s case is an example of how it is possible to be led astray, as the Court of Appeal put it, by the various factors that constitute the fact finding exercise. The length of the relationship, happiness of the union, and mercenary considerations are all recognised features of the domestic context from which common intention can be inferred or imputed. However, this case reminds practitioners not to lose sight of how these features must be connected to the property, which is at the centre of the judicial enquiry.