Rupert Chapman

In the case of Graham-York v York [2015] EWCA Civ 72 the Court of Appeal has considered the proper approach to the quantification of beneficial interests since the Supreme Court’s judgment in Jones v Kernott. The appellant, Miss Graham-York had lived with a Mr York until his death in a property purchased in his sole name and continued to live there after his death. The property was subject to a mortgage and when it fell into arrears the provider sought to enforce those arrears against Mr York’s estate. They succeeded in an application for possession, whereupon the appellant sought to be joined to the proceedings and to claim a constructive trust which she asserted took precedence over the mortgage. The Circuit Judge gave the Miss Graham-York a 25% share of the net proceeds of the property after payment of the mortgage. She appealed both the unequal distribution and the order that the mortgage charge should take precedence over her own interest.

On appeal the Court of Appeal held that;

  • In sole name cases, where there is no express agreement as to the extent of the beneficial interests the claimant is entitled to the share which is fair, having regard to the whole course of dealing between the parties in relation to the property – it is only dealings connected to the property that are relevant.
  • There is no starting point of equality in such cases, each being fact-specific.
  • The length of the relationship in itself should not distract from analysis of the course of dealings between the parties in relation to the property and in particular the financial contributions to it.
  • There is no one right answer to this question and so the appellate court should be slow to interfere.
  • The equity of exoneration was potentially available to the appellant in order to avoid liability under the mortgage as she was not a party to it (on the basis that the loan had not been for joint benefit), however she had raised the issue too late for this to be considered.

Rupert Chapman