Wall v Munday – Case Focus

The recent appeal case of Wall v Munday [2018] EWHC 879 (Ch) has provided a useful update in relation to properties co-owned as both joint tenants and tenants in common.

Bryan Wall and Christine Munday married in 1969 and divorced in 1974. During that marriage, they bought a house (7 Wellsmoor Gardens) as joint tenants. Following their separation in 1973, Christine moved out the house and commenced divorce proceedings. Whilst there were discussions in relation to the house following their divorce, there was no formal settlement reached and Bryan continued to live there until his death in 2015. During this time, he continued to pay the mortgage (redeeming this in 1990) and insured, maintained and improved the house. As the house was owned as joint tenants, Christine filed a death certificate at the Land Registry and the legal ownership of the house passed to her entirely by survivorship. It was the beneficial ownership of the house that was the subject of the claim made by Alan Wall (the Personal Representative for Bryan)

The judge at first instance determined that there had been no binding agreement between Bryan and Christine in relation to the house as part of their divorce proceedings. However, he did find that the mutual dealings between Bryan and Christine meant that the joint tenancy was severed by the end of 1975 and from that point onwards the house was owned as tenants in common. The impact of this was that 50% of the house was beneficially owned by Bryan and fell into his Estate. The other 50% would fall to Christine, the judge finding that the conduct of the parties had not demonstrated a common intention to vary their respective shares in the house.

Alan appealed this decision and argued that Bryan’s Estate should have 86% of the beneficial interest with Christine having 14%. His argument was that the conduct of the parties following their divorce had operated not only to sever the joint tenancy but also to vary their respective beneficial shares from 50:50 to 86:14. The appeal judge had to determine whether the judge’s reasoning in reaching his decision was correct.

The basis of the decision at first instance was based on the well-known case of Jones v Kernott (together with Barnes v Phillips). The principals taken from these was that the judge could draw inferences from the conduct of the parties that they had the common intention to vary their respective beneficial shares but such conduct must have been observed or observable by the other party i.e. the judge did not need to take into account any intention of Bryan or Christine that had not been communicated to the other.

The judge found that whilst it was clear to both parties that Bryan was solely responsible for the payment of the mortgage, the insurance and the maintenance of the house. This was in circumstances where the mortgage continued to remain a joint liability. However, the burden of these payments (together with the benefit that Bryan received from the house) could be addressed by way of an accounting exercise on the sale of the house. Moreover, the judge found that there was no mutual conduct between the parties (or conduct observable by either Bryan or Christine) nor any agreement from which common intention to vary the beneficial shares could be adduced. The appeal judge found that the lapse of time from Christine leaving the house to anyone attempting to resolve the ownership of the house together with the complete lack of communication between the parties was indicative of the absence of mutual conduct or the relevant common intention.

Ultimately, the appeal judge found that the judge at first instance had not erred in his reasoning and the appeal was dismissed. The beneficial ownership of the house is therefore to be split equally between Bryan’s Estate and Christine. This case highlights the importance of the ensuring that both the legal and beneficial ownership of a co-owned property is addressed by both owners at the appropriate time and wherever possible, documented. This will avoid a situation such as that that has arisen in Wall v Munday.

A separate appeal by Alan Wall in relation to costs was allowed.

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