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From 1988 – 2019, Ms Norton and Rex Gardner were in an on-off relationship and had two children together.
In 1998, they bought a property – ‘Blindman’s Lane’ – in joint names, the purchase price being funded principally by a joint mortgage. The deposit was a joint gift from Mr Gardner’s father and the final completion monies were paid from the joint account to which they had both contributed.
In 2001, Blindman’s Lane was sold and ‘Bay Tree Cottage’ was purchased, this time in Rex Gardner’s sole name, because – Ms Norton then understood – her poor credit rating meant that she could not be on the mortgage or, it followed, the legal title. The balance of the purchase monies derived from the sale proceeds of Blindman’s Lane.
Both properties were bought and occupied as family homes.
The judgment, which rewards reading, can be found here.
The legal principles
The law in this area is to be found in the House of Lords (now Supreme Court) decisions in Stack v Dowden (2007) and Jones v Kernott (2011) and the relevant principles deduced from them are as follows:
1. ‘Just as the starting point where there is sole legal ownership is sole beneficial ownership, the starting point where there is joint legal ownership is joint beneficial ownership. The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership. So in sole ownership cases it is upon the non-owner to show that he has any interest at all. In joint ownership cases, it is upon the joint owner who claims to have other than a joint beneficial interest.’
2. The court will determine this by ascertaining ‘the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.’
Pausing there, Mr Gardner had the burden of proving that Blindman’s Lane was beneficially his alone and Ms Norton of proving that she had a share (and, if so, its extent) in Bay Tree Cottage.
3. Where there is an express agreement as to the beneficial ownership – ‘however imperfectly remembered and however imprecise their terms may have been’ – the court will give effect to it.
4. ‘Each case will turn on its own facts. Many more factors than financial contributions may be relevant to divining the parties’ true intentions. These include: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired; the nature of the parties’ relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both initially and subsequently; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses. When a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays for what may be very different from the inferences to be drawn when only one is owner of the home. The arithmetical calculation of how much was paid by each is also likely to be less important. It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally. The parties’ individual characters and personalities may also be a factor in deciding where their true intentions lay. In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.’
5. The claimant must have acted to their detriment in reliance upon the common intention, to justify the intervention of the court.
The judgment
In his judgment, HHJ Monty KC confirmed his broad acceptance of Ms Norton’s evidence: ‘In general, Ms Norton struck me as doing her best to recall events which mainly took place a long time ago.’ In contrast, ‘I found Mr Gardner to be much less satisfactory as a witness’, describing his evidence on various aspects of his defence as ‘wholly incredible’, ‘clearly untrue and embarrassing’, before concluding: ‘Overall, I found Mr Gardner to be an untruthful witness. I do not accept his evidence, where it differs from that of Ms Norton, unless it is corroborated by a contemporaneous document or is plainly on balance likely to be correct – and those instances were few and far between. In particular, in relation to the crucial questions of ownership, I prefer Ms Norton’s version of events.’
The Judge found that Mr Gardner had failed to discharge the burden of proving that Blindman’s Lane was owned other than jointly and equally, meaning that money of which Ms Norton was the joint owner had been rolled over into the purchase of Bay Tree Cottage. Establishing detriment was straightforward: her half share of Blindman’s Lane alone was sufficient.
As to why Bay Tree Cottage was purchased in Mr Gardner’s name: ‘I am satisfied that Ms Norton was not told the truth – indeed, she was lied to – by Mr Gardner over whether she could be an owner…. I am also entirely satisfied that there was an express discussion between Mr Gardner and Ms Norton to the effect that she was not going to be a mortgagor or on the title because of the supposed (in fact, non-existent) problems with her credit rating but that did not affect the understanding and agreement between them that the property was in fact owned by them both, just as Blindman’s Lane had been.’
Conclusion
Given the facts and the law, why did Mr Gardner defend all the way to trial a claim he was very likely to lose, with the result that his own share of Bay Tree Cottage will now be largely consumed in legal costs, his own and Ms Norton’s? Only he can answer that question, but the truth may be found in comments made by Baroness Hale in Stack v Dowden, salutary advice applicable to all litigants in highly charged disputes, particularly those arising from relationship breakdowns:
‘In family disputes, strong feelings are aroused when couples split up. These often lead the parties, honestly but mistakenly, to reinterpret the past in self-exculpatory or vengeful terms. They also lead people to spend far more on the legal battle than is warranted by the sums actually at stake. A full examination of the facts is likely to involve disproportionate costs. In joint names cases it is also unlikely to lead to a different result unless the facts are very unusual.’
Author: John Melville-Smith