When two first-time homebuyers rely upon a financial donation from family members, the equality of shared ownership can become displaced, despite individual perceptions of common intention and the partnership of marriage.
When two young newlyweds entered into a mortgage of their family home, it was not without a significant cash contribution from the groom’s parents, while this gift was bestowed upon the couple after the bride’s parents had covered the costs of the wedding, and therefore implied equal investment into their committed relationship.
At the time of conveyance, the deeds fell under sole title in favour of the groom, and no assumptions were otherwise made than it was their home, and that both parties were joint occupants and thus entitled to equal benefits.
A few years after the purchase, the nature of the mortgage altered, and was now liable under the terms of an acquiring bank, at which point the wife was asked to sign away any beneficial interest she held in favour of the new mortgagee.
Her agreement to this request was given (albeit under visible duress) so that the husband could continue to run his business, while the family (now with three children) could remain in secure occupation.
After re-mortgaging the property a number of years later, the wife took the opportunity to have her name included within the title, and thus became a legal tenant-in-common.
When the business began to fail and the mortgage fell into unrecoverable default, the bank sought to repossess; at which point, the wife challenged the order on grounds that any relinquishing of interest had not been of her volition, rather that her now estranged husband’s undue influence led her to act against her will and under marital obligation.
In the first hearing, the judge found in favour of the wife on the grounds described, before going further to explain that while her collective time and monies invested into the home during the course of their marriage could not translate into an equal half-share of the property, it did result in a six percent stake hold, arising from her half-share entitlement of the cash gifted by the groom’s parents at the point of purchase; therefore, under those circumstances, any repossession order could not stand.
When challenged by the bank and the wife in the Court of Appeal, the principle of shared equity was given greater consideration, along with the equitable maxim ‘equality is equity‘; which on this occasion, was not relied upon.
Instead, it was agreed that the wife’s actions, first dismissed as non-contributory, were embraced as wholly acceptable despite no verbal agreements between the couple as to whether or not the home was equally divisible to begin with, while the court reminded the parties that:
“[W]here the partner without legal title has successfully asserted an equitable interest through direct contribution, to determine (in the absence of express evidence of intention) what proportions the parties must be assumed to have intended for their beneficial ownership, the duty of the judge is to undertake a survey of 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.”