Legal Options for Patsy - Report Example

Legal Options for Patsy This analysis explores the options open to Patsy whose relationship with her boyfriend of 6 years has been called off by him.The two had been living in a property mortgaged in Johnson’s name as sole tenant. Patsy is in a unique legal position with respect to her interest in the house because she was neither married to Johnson nor had a civil partnership agreement with him. Furthermore, they did not have any children over the course of the five years they were staying together as cohabitants at 5 Pilchard Way. The case is complicated further by the fact that the tenancy is registered only in the name of Johnson and Patsy is not legally recognized as the joint tenant in the property. However, as the case shows, several details point to the existence of a mutual understanding that the ownership in the property was shared and both Johnson and Patsy were contributing to its ownership and maintenance. Whether Patsy is granted any claim in the 5 Pilchard Way property depends on whether her solicitor can present sufficient evidence to prove that Patsy is a joint tenant in the property with Johnson on the basis of an oral promise and whether her contributions to the payment of utility bills, planting shrubs and trees in the garden, and setting up the recording booth in the house entitle her to a beneficial claim in the property. Contribution to Household Expenses Since Patsy was not married to Johnson, her rights or claims against the house at 5 Pilchard Way are limited. The property was not registered in her name as a joint owner and hence it will be difficult for her to claim a share as opposed to if the two had been married to each other. However, Patsy can claim to have a beneficial interest in the property if she is able to prove in court that she contributed to the mortgage payments or household expenses while she was staying at the house with Johnson.1 However, Patsy would be responsible for proving this since it was established in Stack v Dowden that the onus of proving a difference in beneficial interest from legal interest was the responsibility of the claimant.2 Although the details in the case indicate that Patsy contributed to the maintenance of the house and took care of it, there is no specific evidence of any instance where she may have paid part of the mortgage or household expenses. Since the tenancy is in Johnson’s name it is nearly impossible that Patsy would have ever made any contribution to the payment of mortgage. However, the facts of the case do show that Patsy contributed to some of the household expenses at 5 Pilchard Way. It is stated in the case that after securing a position as a part-time tutor at a Bloomsbury university, she paid the utility bills out of her earnings. On the basis of this evidence, Patsy can prove a financial right to the property. In the case Midland Bank v Cooke the court inferred the beneficial interest from the circumstances of the case even though the financial contributions by the non-owner were small.3 Consulting a solicitor can help Patsy explore all the rights to the property that she can claim on the basis of her contributions to household expenses. Claim of Oral Joint Tenancy Agreement The second aspect that can strengthen Patsy’s claim to the property is if she can prove her position as joint tenant of the house at 5 Pilchard Way. Although Johnson had not taken any practical steps to have the property registered under Johnson and Patsy as joint tenants, he had stated an intention to make Patsy a joint tenant after she had renovated the house. An intention to make someone a joint tenant can support a claim for beneficial interest.4 It is stated in the case that Johnson had suggested to Patsy that they will be living together for the long term and that they will share the house together. The ruling in Qayyum v Hameed can be invoked where a constructive trust was established on the basis of an oral agreement.5 Although this was simply an oral agreement and Johnson did not take practical steps towards getting the agreement in writing from the Land Registry, Patsy may yet be able to prove that she relied on his statement that he intended her to become a joint tenant and thus, the property could not be sold without her consent and she still had a financial interest in the property. However, this would depend on whether the court in her specific jurisdiction would accept her claim of an oral promise by Johnson to make Patsy a joint tenant in the property. If Patsy is unable to prove this then she will have to accept that fact that she has no right in the property and that provided that Johnson gives her a reasonable notice to leave, she will have to leave the house. Contribution to Increasing the Value of the Property Another way in which Patsy can stake a financial interest in the house is if she can prove that the expenditure she incurred in purchasing and planting the shrubs and trees for the house from her own earnings increased the market value of the property. The court is likely to seek evidence that the amounts spent by Patsy actually resulted in an increase in its market value. Estimates may be sought from a local real estate or property agent to verify Patsy’s claims. If it can be proven in the court that these expenditures were of a capital nature, then Patsy can strengthen her claim of having contributed to increasing the value of the property and thus she has a financial interest in the house at 5 Pilchard Avenue. Another way in which she can claim a financial interest in the property is by presenting receipts of her payments for the purchase of hi-tech cameras and microphones as well as the renovation of the spare room into a recording area for their online lectures and talks. This would likely result in the further enhancement of the value of the asset due to the installation of technological equipment and making the house capable of being used as a home recording studio and online business office. It is recommended that Patsy should consult an experienced solicitor to learn to what extent these expenditures entitle her to a financial interest in the property as well as her right as a joint tenant with Johnson. Business Partnership The case states that Patsy and Johnson started a business where they recorded lectures and talks and sold them online under a subscription based payment model. It was the intention at the time, although no formal agreement was made, that they were equal partners in the business. Patsy can also claim to receive her share in the proceeds from their online lectures that were deposited into Johnson’s bank account. Patsy should be able to prove in court that an understanding existed between the two about the payment being owned by both of them jointly. To achieve this, Johnson would have to admit in court that he made such a statement to Patsy about the subscription revenues being ‘our money.’ Even if such an admission is not made, the court may deduce that since both Patsy and Johnson made the recordings, they should both be entitled to share in the proceeds of the lectures. In this manner, Patsy can prove to some extent that she and Johnson were partners in the business that was conducted at the property. Thus, even though the property may still be in the name of Johnson as the sole registered proprietor, Patsy can acquire a beneficial interest in the property regardless of the fact that she would have no legal claim to it.6 This would depend on the extent to which Patsy and her solicitor can prove that the payments made by Patsy were made under the mutual understanding between Johnson and Patsy that they were both joint tenants of the property. The promise made by Johnson would have to be proved and Patsy may have to explain why she did not pursue a legal registration of the property under both their names as joint tenants. She may also have to explain why she did not push for setting up a joint bank account after they had started a business together. It may be expected that even is Patsy cannot offer a compelling explanation, the court is likely to interpret this in the light of the trust she had come to repose in Johnson’s oral promises to her. Right to Short-Term Stay The preceding analysis shows that Patsy is not left without legal options despite her vulnerable position. If Patsy and her solicitor are unable to provide the evidence to prove Patsy’s status as a joint tenant or having an interest in the property, Patsy still has the option to apply for a short-term right to stay in the house. Under this right, she may be entitled to a right to live in the house which will give her some respite despite the fact that the sole owner has a right to have the non-owner no longer live in the house.7 If this right is granted by the court, then Patsy may continue to live in the 5 Pilchard Way house until she is able to move in to an accommodation of her own. Right to Promissory Estoppel Patsy is entitled to promissory estoppel on the grounds that she has an equitable interest in the property although a formal agreement with Johnson is missing. Patsy meets the three main requirements of proprietary estoppel: there was an expression of intention by Johnson to make her a joint tenant, Patsy believed the representation to be true, and she acted to her detriment. The third claim can be established in the light of the ruling in Gillet v Holt8 where the condition of detriment was interpreted by the Court of Appeals as a substantial expenditure but not necessarily financial in nature. Nonetheless, Patsy’s efforts at setting up the recording studio in the house can be invoked as an action to her detriment. The case Hughes v Metropolitan Railway Company9 also supports Patsy’s right to seek promissory estoppel. Both the Court of Appeal and the House of Lords ruled that Hughes could not sue Metropolitan for failing to complete renovation within six months while negotiations for purchase of property were in progress. Patsy’s solicitor can argue that Patsy was acting to her detriment by not seeking another accommodation and continuing to support the household and remodeling expenses. Furthermore, the ruling by the House of Lords in Thorner v Majors10 stated that promissory estoppel could be applied where a reasonable person can be expected to rely on the conduct of the other party. Patsy should be able to prove that she took Johnson’s expressions of making her a joint tenant and making it ‘our house’ and ‘our money’ seriously and acted accordingly. Bibliography Cannock Chase Council, ‘Owner Occupiers & Relationship Breakdowns’ accessed 30 December 2014 Chiltern District Council, ‘Housing and Relationship Breakdown’ http://www.chiltern.gov.uk/CHttpHandler.ashx?id=2810&p=0 accessed 20 December 2014 Gillet v Holt [2001] Ch 210 Hughes v Metropolitan Railway Company [1877] UKHL 1, [1877] 2 AC 439 Midland Bank v Cooke [1995] 4 All ER 562, (1995) 27 HLR 733 Qayyum v Hameed [2009] EWCA Civ 352 Scotland Shelter, ‘Occupancy Rights if you or your partner own your home’ http://m-scotland.shelter.org.uk/get_advice/advice_topics/families_and_households/relationship_breakdown/rights_if_you_or_your_partner_own_your_home/occupancy_rights_if_you_or_your_partner_own_your_home accessed 30 December 2014 Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432; [2007] 2 WLR 831; [2007] 2 All ER 929 Thorner v Majors [2009] UKHL 18, [2009] 1 WLR 776 Read More