Legal Updates

Unequal Financial Contributions to Property Purchase by Unmarried Couple

The case concerns the much debated issue of the ownership and shares in real property between unmarried couples making unequal financial contributions to the purchase of the property.

Mrs Oxley purchased a council property through the Right to Buy Scheme as the sole tenant. However, the purchase was fully financed by the defendant from the proceeds of the sale of the property he owned. He took a charge over the property to secure his contribution of £25,200.

The defendant was abroad working for the majority of 1990 but on his return at the end of the year he lived with Mrs Oxley at the property. During all periods of leave from his work abroad, the defendant lived with the claimant. In 1991, the property was sold for £65,000, and the net proceeds were invested in another property, which was registered in the defendant's sole name. From this point, the claimant and her children, and the defendant lived together in the newly acquired property. At the beginning of 2001 the property was sold, free of motgage, for £232,000, and shortly after this Mrs Oxley and Mr Hiscock separated. A dispute ensued as to the rightful ownership of each party in respect of the sale proceeds from property.

The claimant sought a declaration that she was entitled to an equal half share in the property on the basis that it was always the parties' intention that they should share equally in that property. The judge found in favour of the claimant and granted an order that she was entitled to an equal share of the slae proceeds, and refused the defendant leave to appeal, on the basis that there was no real prospect of success.

The defendant sought leave to appeal, resulting in the recent application decision by the Court of Appeal. There was no express agreement between the parties and the court held that where there is no express agreement between the parties, the court must look at the "whole course of dealing between the parties relevant to their ownership and occupation of the property and their sharing of its burdens and advantages". The defendant argued that the judge's findings that there existed between the parties a long-term plan, were not sufficient to rely upon because the approach adopted by the County Court was too wide. There would therefore be a real prospect of success in an appeal, where the correct approach was taken.

The Court of Appeal accepted the appellant's arguments and accordingly granted the defendant permission to appeal, stating that "there is an arguable case." The Court of Appeal will hear the full case and it seems likely that the approach to ascertaining ownership of property in such circumstances will be clarified.

© RT COOPERS, 2004. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.