Court of Appeal clarifies two-stage test in claim for beneficial interest in solely owned property.
In a dispute between former cohabitees, the Court of Appeal has clarified the two-stage test where a party seeks to establish a beneficial interest in property which is solely owned by a former partner.
It has long been established that a claimant must show there was an agreement that he should have beneficial interest in the property owned by his partner. If such an agreement can be shown to have been made, the court may then impute an intention that the claimant was to have a fair beneficial share in the asset and assess the quantum of the fair share in the light of all the circumstances.
The test has since been clarified. At the first stage, an actual agreement has to be found to have been made, which may be inferred from conduct. At the second stage, the court is entitled to impute an intention that each person to the share which the court considers fair, having regard to the whole course of dealing between the parties in relation to the property. A court is not entitled to impute an intention to the parties at the first stage.