Graham-York v York [2015] EWCA Civ 72
In the recent Court of Appeal decision in Graham-York v York [2015] EWCA Civ 72 guidance was given in connection with the determination of the beneficial interests in a property held by only one party in an unmarried relationship.
The Facts
The case concerned an unmarried couple, Miss Graham-York, and her partner Norton York. They had lived together from 1979 until Mr York’s death in 2009. The property in which they lived was solely owned by Mr York, he bought it in 1982. After his death, Miss Graham-York stayed at the property. The issue arose when the mortgagee brought proceedings against Mr York’s estate for arrears of mortgage and seeking possession. Judgment was made in favour of the mortgagee. Only then did Miss Graham-York apply to join the proceedings, seeking a beneficial interest and resisting the repossession.
Miss Graham-York asserted common intention constructive trust and priority over the mortgage by virtue of her already occupying the property when her late partner took out the mortgage to which she was not a party.
The Findings
At trial, HHJ Diana Faber found that Miss Graham-York had a 25% beneficial interest in the house. The findings made were as follows:
1. The relationship between Miss Graham-York and Norton York was one characterised by the Miss Graham-York’s vulnerability and Mr York’s proclivity for violence and controlling nature;
2. All of the witnesses were unreliable;
3. Miss Graham-York worked from 1976 to 1985 as a singer and although the Judge could not make findings as to the amount of her earnings, these were found to have been given to Norton York;
4. The property was purchased in Norton York’s sole name in 1982 with a mortgage of which Miss Graham-York had knowledge;
5. Miss Graham-York’s income from 1976 to 1985 materially assisted in the purchase of the property;
6. The property was remortgaged in 1990 on an interest only basis and Miss Graham-York had knowledge of this fact;
7. After 1985 Miss Graham-York’s earnings were limited so that even if she did make a contribution post 1985, this did not amount to much;
8. Norton York had a number of business interests in which Miss Graham-York had no involvement;
9. No findings were made as to the income generated by Norton York;
10. There was no express agreement as to the beneficial interests but since Miss Graham-York’s income contributed to the family income before and at the time of the purchase, a common intention could be inferred in line with para 61 of Stack v Dowden;
HHJ Diana Faber in light of the above determined the beneficial interest for Mrs Graham-York to be 25%, and that the repossession would still take place. The proceeds of sale were to discharge the mortgage and costs of sale, before then providing for the 25% share to Miss Graham-York, the remainder to the estate pending contested probate proceedings between Miss Graham-York and Mr York’s son, Adrian.
The Appeal
Miss Graham-York appealed on two grounds:
1. The Judge erred in finding that her interest was not equal to that of the late Mr York; and
2. The Judge erred in finding that her share should be paid to her after the repayment of the mortgage owed by the late Mr York.
Miss Graham-York’s beneficial interest
In dismissing the Appeal, the Court of Appeal referred to what it described as the most authoritative guidance in these types of case, that given by Lord Walker and Lady Hale in Jones v Kernott [2011] 1 AC 776, and in particular the Supreme Court guidance in sole name cases, found at paragraphs 51 – 52 of that judgment.
Here, the Court of Appeal found (at [22]) that the court is not concerned with redistributive justice (for Miss Graham-York). It went on to say that it is not for the court to perform a task akin to compensation by redistributing property between the parties.
Crucially, the Court of Appeal referred to Miss Graham-York as being, “entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property“. The enquiry into fairness is therefore confined to a consideration of the whole course of dealing in the property – no other considerations such as the relationship, length of cohabitation, contribution in bringing up the couple’s child come into play.
Potential traps
Moore-Bick LJ helpfully set out 4 potential traps to look out for when approaching such cases:
1. There is no starting point of equality in sole name cases (Oxley v Hiscock at [38]);
2. The suggestion of equality being the only fair outcome in a case such as this, in light of the substantial contributions by the woman Oxley, is quite hopeless;
3. The judicial evaluation of the “fair share” is not one in which there is only one right answer, therefore the appellate court should only interfere if the outcome falls outside the ambit of reasonable decision making;
4. The length of the cohabitation should not be permitted to lead the argument astray.
The case also reminds us of that of another unmarried couple, again who did not jointly own the property in which they lived. In Thompson v Hurst [2012] EWCA Civ 1752 the Court of Appeal were effectively asked to hypothesize about what might have been IF the parties had transferred the property into their joint names. IF the property was in joint names, the Court of Appeal said, then the couple would be in a Stack and Jones scenario raising a presumption of equal shares (unless rebutted by evidence of intention, actual or inferred objectively ascertained). But they did not. Again, the Court of Appeal were focussed on what actually happened and the course of property dealings between the couple.
Conclusion
What this case further illustrates is the fact that relying on the law in relation to cohabitees and property interests is not for the faint-hearted. In short, cohabitees do not have the same rights as married couples. The notions of ‘fairness’ and ‘equality’ as might prevail in the divorce courts are not necessarily the same as they might appear when unmarried couples seek to claim interests in property when their relationships come to an end. As a cohabitee claiming a beneficial interest in a property owned by the other party, the court will look only at the course of dealings in respect of the property itself, and not the relationship as a whole. It matters not that it has been a long term relationship, and that children have been born – it is all about the property dealings.
Protect yourself
You can take steps to protect against such a situation occurring. At Paradigm Family Law we can advise on your options. Don’t leave it to chance, call or email us if you and your partner are planning to moving in together, buying a house or planning a family – get protected. Speak to our family law experts, James or Frank on 0845 6020422 or email us at [email protected] today and ask about a free initial consultation.
