Property Law - Oxley v Hiscock - Case Study Example

1. The Case of Oxley and Hiscock Case (essay) on: Oxley V Hiscock [2004] EWCA Civ 546 2. Introduction This analysis is on the Oxley V Hiscock [2004] EWCA Civ 546 case that relates to property law and claims of individuals who cohabit a particular property. This is an important case about cohabitants' property rights and division of assets after medium or long term marriage. Ms Oxley and Mr Hiscock cohabited a property that was owned by Ms Oxley purchased by her under right to buy legislation. This property was financed entirely by Mr Hiscock but was later sold and the sale proceeds were used to purchase another property in which Mr Hiscock and Ms Oxley lived1. After the relationship broke down, Ms Oxley claimed that the proceeds of sale of this property should be distributed in equal shares. She argued that as there was no discussion on the financial issues, although she had inferred that the sales proceedings would be equally shared for beneficial ownership. Mr Hiscock appealed that there has been no discussion on intended shares so Ms Oxley's presumption should be displaced. This case shows the extent to which cohabitation could be considered as a condition for equally distributed shares in property being considerably important within property law and analysis of equity and trusts. Trust law falls under the broader topic of property law and family law and relates to wills, trusts and property that are shared or distributed. The importance of this case of Oxley v Hiscock lies in the fact that it shows the limitations applicable in distribution of property or shares even in case of cohabitation or marriage. The case and its judgement provide insights into the nature of family law particularly in relation to trusts and property share. The proceedings were brought to the court under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The appeal and the judgement highlight the question of how 'proceeds of property in which an unmarried couple have been living as man and wife should be shared between them when the relationship comes to an end'2. 3. Facts of the Case The facts of the case could be summarised as follows: Mr Hiscock, the appellant purchased a property at 35 Dickens Close, Hartly, Kent in April 1991 under his name. Mrs. Oxley formerly occupied a house at Dartford as a secure tenant but by September 1987 exercised her rights under Part V of the Housing Act 1985 to acquire this property with a discount of 20,000 she could buy the property for 25,200. At the end of 1990, Mr Hiscock purchased his home in 35 Dickens Close for himself, Mrs Oxley and her children from a previous marriage for a purchase price of 127,000 which was funded by a building society advance, proceeds from sale of 39 Page Close and balance of Mr Hiscock's own savings. Thus some amount of money 61,500 has been obtained from the sale of 39 Page Close the property acquired by Mrs Oxley who was a secure tenant in local authority housing. The property at 39 Page Close was documented as being bought with assistance of funds from Mr Hiscock and purchased under the sole name of Mrs Oxley3. Thus Mr Hiscock was definitely associated with interests in the property but although the property 39 Page Close could have been transferred to joint names after a three year period, this was not done and remained in Mrs Oxley's name. After the sale of the property at Page Close for which Mr Hiscock claimed nothing, Mr Hiscock contributed 25,200 to the purchase of 35 Dickens Close and Mrs Oxley contributed the balance, 36,300. Following sale of 35 Dickens Close in 10 years, the proceedings began with the claim that under section 14 of the 1996 Act, there is a declaration that the proceeds of sale of 35 Dickens Road were to be held by Mr Hiscock upon trust for himself and Mrs Oxley, in equal shares; alternatively, in such shares as the court should determine. The judgement was given in favour of Mrs Oxley and Mr Hiscock appealed against the decision. 4. The Issues of the Case (Consequences of the Law) The court ruled that Mrs Oxley's exercising the right to buy and Mr Hiscock proceedings to sell his house have been considered as related. Thus Mr Hiscock sold his house so that Mrs Oxley would be able to exercise her right to buy this house at 39 Page Close. After the sale of Page Close to buy property at Dickens Close, Mrs Oxley had written instructions from her solicitors that she should provide written instructions on the proceedings of sale of 39 Page Close which would be used for the purchase of 35 Dickens Close. Being advised by her solicitors to take legal protection for claim on 35 Dickens Close, Mrs Oxley confirmed that all proceeds from sale of 39 Page Close would be put to buying 35 Dickens Close by Mr Hiscock4. The parties lived at 35 Dickens Close for ten years between April 1991 and the beginning of 2001 and with the end of their relationship, 35 Dickens Close was sold in March 2001 at a price of 232,000. Following the sale of 35 Dickens Close, a property in Chatham, 34 Beacon Hill, was purchased by Mrs Oxley at a price of 73,000, of which 40,000 was funded by a mortgage advance. The balance money was provided by Mr Hiscock for satisfying Mrs Oxley's interest in 35 Dickens Close along with a further 5000 and an amount of 3200 for renovations to 34 Beacon Hill. Mr Hiscock himself purchased a property at 39 Grassmere Road in Whitstable, at a price of 122,000 retaining the balance from proceeds of sale 35 Dickens Close. Mr Hiscock accepted that a small part of the balance amounting to 1000 remains due to Mrs Oxley. The case was filed by Mrs Oxley. It was stated in the claim by Mrs Oxley that "it was expressly the joint intention of the Claimant and the Defendant at the time of the purchase of the second property that they should share the beneficial ownership of that property equally".5 However when 35 Dickens Close was bought there was no evidence of to support an agreement on shares for 35 Dickens Close. The judge's findings were that Mr Hiscock and Mrs Oxley were in general agreement that the property would be shared, before the acquisition of 35 Dickens Close; but that there was no express agreement or written documentation as to what their respective shares should be. The judge found her claim that the agreement was for equal shares as not had been expressly stated. This is similar to the case on Midland Bank v Cooke and another [1995] 2 FLR 915 in which no express agreement was made on the distribution of shares6. The judge stated that" the proper approach of a court to a dispute of this nature is that when there is no express agreement between the parties the court must look to the whole course of dealings to infer what the agreement between those parties was." The judge is thus required to infer agreements from parties when there are no express agreements or documentation provided. In the claim by Mrs Oxley, she suggested that she is entitled to hold equal shares or half shares on the Hartley property along with Mr Hiscock. Considering equal shares and the difference for property price already paid to her by Mr Hiscock, the sum owed by Mr Hiscock to the claimant was at 72,056. To this claim, the judge decided that after analysis of the facts of the case, the claimant is entitled to equal or half shares of the proceedings from sale of the 35 Dickens Close property at Hartley. Mr Hiscock obtained permission to appeal against this decision. He suggested that the judge should have based her agreement on the presumption that the property has been held on trust for individuals who provided the financing and claims should also be in accordance with the proportion of purchase money provided by the concerned individuals7. Since there was no explicit discussion on intended shares or equal shares for the matter, Hiscock appealed that the judge had misdirected in her decision. The appeal was allowed and some of the attributes that could be delineated as characterising this case would be based on the fact that this was a property bought as a home for a couple who were living as man and wife and each made financial contribution to the purchase and also when property is bought in one person's name and there is no written documentation or trust to suggest that both the parties could claim equal share. This case is indicative and representative of all such characteristics and the judgement is based on the beneficial interests in the property and in case of no express documentation on shares, the court provides entitlement to shares as it deems fit for the situation and that which would be fair considering the financing of the property. On this aspect, Hiscock's appeal was granted as he suggested that judgment be based not on unspecified intention of equal or half shares but according to the proportion of financial contributions made to buy the property. In this context the case of Springette v Defoe 24 HLR 552, [1992] could be cited in which no actual discussions took place between parties but there was evidence that parties assumed that shares would be distributed between them equally8. The judgment was based on the fact that without express written documentation, no common intention to share equally could be inferred however it considered the fact that Miss Springette made some significant contributions to her purchase and thus had claims on the share. This is contrast to Savill v. Goodall [1993] 1 FLR 755 case in which a home was purchased jointly by Savill and Goodall and there were discussions on claim for shares in case of sale of property9. The judge for the appeal suggested that "It is difficult to avoid the conclusion that the judge placed undue weight on the fact that the parties regarded both [their homes] 'as their [joint] home'. It does not follow from the fact that parties live together in a house that they both regard as their home that they share the ownership of that house equally."10 Thus it would wrong to decide that parties who live together would consider to share the property equally in every respect. Following the appeal of Mr Hiscock, the court held that it would be unfair to expect Mr Hiscock to share equal proceeds from sale of the Hartley property with Mrs Oxley especially considering the fact that Mr Hiscock's contribution to the purchase price of the property has been much greater than Mrs Oxley's financial contributions to the property. The Court of Appeal provided the divisions for the proceeds of sale of the Hartley property and suggested that 40 per cent of proceeds from sale of property be given to Mrs Oxley and 60 percent to Mr Hiscock. Considering this case in the context of recent research, Hopkins and Laurie (2006) discuss the implications of housing and property law within the practice of right to buy or RTB. The funding arrangements between a tenant who possesses the right to buy and another party were discussed in the paper and shows how courts decide on the entitlement of parties regarding their claim to home or property11. Considering the statutory discount offered to a secure tenant as seen in the case of Mrs. Oxley, it may be difficult to determine the position of a tenant or categorize entitlements under traditional property law principles. Hopkins and Laurie suggest that there may be possible exploitation or misuse of the RTB scheme which can be related to exploitation of the policy or exploitation of the tenant12. The Housing Act 2004 was implemented to determine illegitimate use of the scheme. Although there may be government approval to the arrangement, non resident relatives may contribute to the funding and claim benefits from the scheme. 5. Conclusion Considering exploitation of the RTB, it is of course quite controversial whether Hiscock could be considered as having indirectly benefited from the sale of 39 Page Close which was acquired by Mrs Oxley on his advice. However, the judgment on Mr Hiscock's contribution and shares in proportion to his contribution to purchase shows the role of the court in decisions guided by inference rather than written agreement on shares. Bibliography Hopkins, Nicholas & Laurie, Emma (2006) Housing or property The dynamics of housing policy and property principles in the right to buy. Legal Studies26(1),65-87. Hovius, Berend. The law of family property /Berend Hovius, Timothy G. Youdan. [Toronto] :Carswell,c1991. Ross Martyn, John G. Family provision :law and practice /by John G. Ross Martyn. 2nd ed. London :Sweet & Maxwell,1985. Cases referred Springette v Defoe 24 HLR 552, [1992] Savill v Goodall [1993] 1 FLR 755 Oxley v Hiscock [2004] EWCA Civ 546 Midland Bank v Cooke and another [1995] 2 FLR 915 Read More