It is what it says

Posted: 16th November 2012

terraces housesWhere parties of full age and capacity executed a declaration of trust stating that a residential property was owned by them in equal shares as tenants in common, the burden of proving that the document was ‘a sham’ and did not reflect the parties’ true intentions was a heavy one, the Court of Appeal has ruled.

In refusing to grant the claimant an order for the sale of the property, a county court judge had upheld the defendant’s plea that she was its sole legal and beneficial owner. That was despite the explicit terms of the declaration of trust which was signed by the parties upon the property’s acquisition in 1987.

In upholding the claimant’s appeal and directing that the property be sold and the proceeds divided equally between the parties, the Court of Appeal ruled that the defendant had failed to displace the burden of proving that the declaration of trust was an ‘expedient sham’ and that the parties had intended at the time of the purchase that she should be the property’s sole owner.

There was no suggestion that the declaration of trust could be set aside on grounds of mistake, fraud or undue influence and the court ruled that, in the absence of convincing evidence that the arrangement was a sham, the parties were bound by the legal consequences of the document they had signed.