Conveyancing – Joint Ownership Amongst Families: Where The Circumstances In Which An Expressed Declaration of Trust Can Be Set Aside

A recent case of Pankhania –v- Chandegra [2012] EWCA CIV 1438 the Court of Appeal considered an appeal from the trial judgment which had found that the legal and beneficial ownership of a property was solely in the name of Mrs Chandegra despite the fact when the property was originally purchased in 1987 in the joint names of Mrs Chandegra and her nephew (the appellant), there was an express Declaration in the transfer documentation registered at the Land Registry whereby they held the beneficial interest as tenants in common in equal shares between them.

Evidence was heard at first instance as to the respective parties’ intentions.  The deposit had been provided by Mrs Chandegra’s brother but the property had been bought by Mrs Chandegra and Mr Pankhania in their joint names in order to secure the required mortgage finance which made up the majority of the purchase property.

Mrs Chandegra’s brother had lived in the property for a number of years until his death and after his death Mrs Chandegra lived at the property.  At the first instance Judgment, the trial Judge considered the laws relating to constructing implied and resulting trusts in the context of joint ownership of property.

On the basis that the Judge found what where the parties’ intentions at the time property was purchased, he held there was sufficient contrary intention to defeat beneficial joint ownership from these facts and the parties’ respective behaviours, and, on that basis he held that Mrs Chandegra was entitled to the beneficial interest in the property.

On appeal it was held that the express Declaration of Trust was conclusive unless it could be set aside, varied or rectified.  Only limited circumstances may a Declaration of Trust be set aside and a constructive, implied or resulting trust asserted instead.  There were no submissions by either party in this case that the arrangements constituted a sham or that there had been fraud, mistake or undue influence.  On that basis, the provisions of express Declaration of Trust were held to stand.

The case, whilst it is helpful, is not ground breaking.  It does serve as a timely reminder that parties purchasing property in joint names should ensure that their intentions as to the beneficial ownership are accurately reflected in the transfer declaration, and, where relevant, an express Declaration of Trust.

For further information, please contact our Wills, Estate Planning & Trusts team at our Sevenoaks office on 0132 440855.