The recent case of Culliford v Thorpe should come as a word of warning to unmarried cohabiting couples with shared property interests.
The case concerned an informal agreement between cohabiting same-sex partners to share a property in Weston-super-Mare. Title to the property was registered in only one of their names (Mr Rodney Culliford), who purchased the property before the relationship began. His partner, Mr Jocelyn Thorpe, later moved into the property, which the parties occupied as their home. During the course of the relationship, Mr Culliford verbally agreed with Mr Thorpe that the property was to be shared between them; however, this agreement was never documented in writing, and legal title to the property remained in Mr Culliford’s sole name.
Unfortunately, in 2016, Mr Culliford died without leaving a will. His estate was tasked with administering his assets, which included the property. Relations between Mr Thorpe and Mr Culliford’s personal representatives broke down, resulting in a court claim for possession being brought against Mr Thorpe, requiring him to move out of the property. The estate claimed that Mr Thorpe did not have any beneficial interest in the property – and thus no right to remain in occupation – rather, they said Mr Thorpe only lived in the property because Mr Culliford had permitted him to do so. In other words, the estate argued that Mr Thorpe was only a licensee of the property, and that the licence permitting him to occupy the property had now been terminated by the estate. He, therefore, remained in occupation as a trespasser.
Mr Thorpe defended the claim, asserting that he had a beneficial interest in the property on the basis of a verbal agreement with Mr Culliford. In particular, Mr Thorpe argued that Mr Culliford had told him that it was ‘time to join forces’ and 'what's mine is yours, and what's yours is mine', which he said evidenced Mr Culliford’s intention to share the equity in the property with him equally. In reliance on this agreement, Mr Thorpe spent roughly £30,000 helping to renovate the property.
It is possible to acquire an equitable share in a property in this way, even where you are not named on the deeds/legal title as an owner. In the context of a cohabiting couple, this is most commonly achieved by asserting what is known as a ‘common intention constructive trust’. A common intention constructive trust can be created without the need to document or sign anything. This type of trust, put very simply, may be created where both parties intended to share the property, but where they did not document this formally. As you can imagine, these cases are very fact specific, and what was said or understood between the parties, however imperfectly remembered and, however, imprecise the terms of their agreement may have been, will be critical. While these sorts of cases are commonly dealt with by the court, this case is unusual, because Mr Culliford (the owner of the property and party to the alleged discussions) had died, so he was not able either to confirm or deny what Mr Thorpe claimed had been said between them.
For this reason, Mr Culliford’s personal representatives disputed the alleged agreement between Mr Culliford and Mr Thorpe. They claimed that it would ‘open the floodgates’ to allow post-mortem evidence of secret agreements between parties to govern property rights. They remarked that Mr Culliford had not mentioned the alleged agreement to them, which indicated that no such discussion had taken place. However, the court found that the personal representatives were in no position to dispute the agreement – they were not a party to the conversation; they had not lived with the parties; and as regards whether or not Mr Culliford mentioned the agreement to them, this had been none of their business (it was noted by the court that Mr Culliford’s personal representatives had similarly not been aware of Mr Culliford’s HIV diagnosis, or that he had experienced difficulties with debt). The only matter of import was whether or not, on the evidence before the court (which largely consisted of Mr Thorpe’s witness testimony), there had, as a matter of fact, been an intention to share the property, and the court found that there had been such an intention. In reaching this decision, the court described Mr Thorpe as a “clear, straightforward, indeed transparent witness, [who] made no attempt to spin his evidence, or to make up what he did not know or remember”.
Although the court is often circumspect when dealing with self-serving claims made after the death of the person best able to refute them, Mr Thorpe came across as a reliable and believable witness. The fact that Mr Thorpe had also spent considerable sums renovating the property helped to support his case, as such expenditure was found to be consistent with an agreement to share the property.
Lessons from the case
Anyone in Mr Thorpe's position should seek to document any verbal understanding/agreement reached about the extent of their share in the property. Unless there is something in writing, the door is left open for your partner (or, as in this case, their estate) to dispute your interest in the property. Such disputes can incur considerable legal costs and be very stressful for those involved.
The best way to avoid a potential disagreement is to document your agreement in a 'declaration of trust', which will need to be signed by both parties.