Joint name case: quantifying the beneficial interest by reference to the whole course of conduct

Hapeshi v Allnatt ([2010] EWHC 392) concerned a dispute as to the ownership of property bought in the joint names of a mother and her son M. There was an agreement that another son, K, was to have a beneficial interest in the property (para. 42). There had been no express agreement that the mother, M and K would hold as beneficial joint tenants. Although there was an express agreement that the mother and M were to hold as beneficial joint tenants, the judge thought that the mother (who spoke no English) had not understood the idea and that the property was actually held by them as tenants in common (para. 47). The mother and M died and the court had to decide how the beneficial ownership was to be divided between K and the estates of the mother and M. The judge referred to Stack and, based on an assessment of the whole course of conduct, decided that the mother’s estate was entitled to 50% of the equity, and that K and M’s estate were each entitled to 25% of the equity. Megarry & Wade’s explanation of the current law as to when a common intention constructive trust can arise (Megarry & Wade (2008) para. 11-025) was quoted with apparent approval (para. 18). This passage suggests that a common intention constructive trust can be inferred from the parties’ whole course of conduct. The finding at para. 42 seems to mean, however, that (in relation to the primary question as to the existence of a constructive trust) there was no need to rely on the whole course of conduct in the present case.

Michael Lower

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