Oral Agreement ? Beware

Ely v Robson [2016] EWCA Civ 774

This was an appeal under the Trusts of Land and Appointment of Trustees Act 1996 by Ms Robson, against an order declaring that Mr Ely her former partner held a property in Poole in Dorset on trust, 20% as to her share and 80% as to his share after an oral agreement reached in a car park.

The parties were in a relationship when they bough the property but purchased it in the sole name of Mr Ely with the assistance of a mortgage. Ms Robson made no contribution to the purchase. The parties moved in and had two daughters together. Ms Robson’s aunt, Vera Ellis moved into the property and from time to time, her elderly mother, Peggy Robson, came to stay.

Once the relationship broke down, Mr Ely asked Ms Robson to move out and issued a claim for possession of the property and Ms Robson defended that claim and counterclaimed that she owned 50% of the property held on trust equally for both.

Mr Ely said that an agreement had been reached in a car park of all places with no slolicitors present. Ms Robson said that was not the case and that she would never have settled for anything less than 50% in any event.

A later solicitors letter from Mr Ely’s solicitors stated:

a) Mr Ely would hold the property on trust for himself for life, with a remainder of 80% to his heirs and assigns and 20% to Ms Robson;

b) that Ms Robson would have the right to occupy the property for as long as either Vera Ellis or Peggy Robson were alive;

c) that after that Mr Ely could sell the property if he so wished.

After Mrs Ellis and Mrs Peggy Robson died, on 24 July 2014, Mr Ely issued a claim for declaratory relief as to the parties shares in the equity in the property and and sought an order for sale on the basis of the 14 August 2007 agreement.

Ms Robson’s defence was that it was the common intention of the parties that they should own 6 Torbay Road in equal shares as their family home from the outset and that she contributed to the costs and expenses of the family once she moved in. She sought a declaration that Mr Ely owned 6 Torbay Road on trust for them both in equal shares.

The judge stated at trial that there was a negotiated settlement and what remained was simply a matter of mechanics to achieve their clearly stated objectives about their interests. He also found that Mr Ely was led to believe that Ms Robson agreed to those objectives and on that basis, did not pursue his claims for a declaration that she had no interest in the home.

Ms Robson appealed to the Court of Appeal which supported the first judges decision and that the judge was entitled to find that the parties intended that their oral agreement, which was sufficiently certain, be binding upon them. Accordingly, the court found that Mr Ely held the property on constructive trust for the parties in 80/20 shares.

Let that serve as a warning. Do not enter into agreements recklessly.

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitor
0207 183 2898

 

Post Script – see later case of Saranovic v Saranovic for interesting parallels