In Pankhania v Chandegra ([2012] EWCA Civ 1438, CA (Eng)) title to a house was transferred into the joint names of P and C (an aunt and nephew). The transfer contained an express declaration of trust that P and C were equitable tenants in common in equal shares. P sought an order for sale and an equal share of the net proceeds. C claimed that there was, at the time of the acquisition, a common intention that she was to be the sole beneficial owner. C succeeded at first instance but P’s appeal was successful.
The express declaration was conclusive (Goodman v Gallant; Pettitt v Pettitt) in the absence of a vitiating factor such as fraud or mistake. If the express declaration did not reflect the parties’ subjective intentions, either of them could apply for rectification but that had not been done. Further, the fact that the express declaration may not have reflected subjective intentions was not enough to render the declaration a sham. There was no attempt to deceive any third party; the arrangements between the co-owners were a matter of indifference to the mortgage lender.
Michael Lower
