In Begum v Issa (County Court (Leeds) 5 November 2014) the parties were a married couple with two children. The family home was in joint names and the transfer to them contained an express declaration that they held as beneficial joint tenants. Mr Issa (the husband), acting alone, transferred the property to his brother (it seems that Ms Begum’s signature on the transfer was forged). The brother was registered as the proprietor at HM Land Registry. Ms Begum, unaware of what had happened, remained in occupation with her husband and children. As Ms. Begum was in actual occupation and had not been a party to the transfer to the brother, the effect was that the brother’s registered title was subject to Ms Begum’s equitable interest (Land Registration Act 2002, s. 29).
The judge (HH Judge Behrens) then had to consider the rights of Ms Begum and the brother against each other as equitable co-owners. Section 12 of the Trusts of Land and Appointment of Trustees Act 1996 meant that both Ms Begum and the brother, as beneficiaries, had a right to occupation. Sections 13(1) and 14 gave the court power to exclude one co-owner (here the brother) from occupation on terms which may include the making of payments. Where the court makes such an order it must take into account the matters set out in section 15. The judge had regard to the intention of Ms Begum to occupy the property and the welfare of the two children (one of whom was disabled and who would find any move especially disruptive). On the other hand, it had to have regard to the brother’s intention to achieve a return on his investment in the property. The balance was struck by making an order for sale postponed for twelve months. This delay would allow Ms Begum time to find another suitable home. The brother was entitled to have Ms Begum make a contribution to the mortgage installments paid by the brother. However, the brother had borrowed GBP 92,250 while the outstanding amount on the mortgage taken out by the couple stood at GBP 33,241 at the date of the transfer to the brother. Ms Begum was only liable to pay a proportionate part of the brother’s mortgage payments (36% ie 33,241 / 92,250).
A further question was whether there should be any accounting as between Ms Begum and her husband who alone made all mortgage payments (even those due under the brother’s mortgage until the husband left the property). Was he entitled to a contribution to the mortgage payments from his wife despite their equitable joint tenancy? HH Judge Behrens decided that he was not. He referred to his own decision in Clarke v Harlowe and the English Court of Appeal decision in Wilcox v Tait. He concluded:
‘This is a case where the parties agreed that Nargis Begum would not work and would look after the children. All financial matters were dealt with by Nadeem Issa. In those circumstances I have no hesitation in coming to the conclusion that it was the common intention of the parties that neither should thereafter have to account to the other in respect of expenditure incurred by the other on the property during the period of cohabitation.’ ([112]).
The cohabitation context allows (but does not require) the court to infer a common intention that there would be no liability to account in respect of the period of co-habitation.
On the face of it, Ms Begum was subject to the rights of the mortgagee under the mortgage to which she was a party but not the rights of her brother-in-law’s mortgagee. However, the later mortgagee was subrogated to the rights of the earlier mortgagee to the extent of the amount outstanding under the earlier mortgage at the date of its redemption ([119]).
Michael Lower
