B e f o r e :
|KERRY ANDRE GEORGE||Claimant|
|SUSAN ANNE SZYCZAK||Defendant|
Crown Copyright ©
4. The Facts
4.1. Mrs Szyczak
1. 33 The Grove Hipperholme became vested in the sole name of Mrs Szyczak
2. Mrs Szyczak received various sums of money totalling £69,264.23. Much of this was used to pay off the outstanding mortgage leaving only about £5,000 outstanding. After buying a car and giving small sums to Benjamin and her father she was left with savings of about £23,000.
4.2. Mr George
4.3. The relationship
4.4. The Property.
4.5. Initial Discussions as to work
4.6. The discussions following the receipt of the plans.
We decided that I would carry out the work rather than engaging contractors. At the time I was still working and we knew that we would have to do most of the work at week-ends and in between contracts.
When it became apparent that we were not going to get away with [superficial decorating] we took a decision to renovate it properly. We had a specific conversation at that point We agreed that I would carry out the work for our joint benefit we would be saving the cost of hiring a contractor. The burden was obviously going to fall on me and we agreed that while I would do the work I would not be "wasting my time" as I would benefit financially from the work. It was on this basis that I agreed to carry out the work.
3. The conversation took place on a bench outside. we agreed that I would carry out the work instead of a contractor. I would financially contribute to the work as I had some savings. We both therefore agreed that I would have an interest in the property
4. Specifically we agreed that the house was hers to start with but after that we would benefit equally from the work we were to carry out.
5. We talked about a figure of £70,000 as this was the offer she had received for the property I was happy to agree this ball park figure. It was therefore agreed that as it was her house to start with she would have the benefit of those monies when we came to sell it; thereafter it was a fresh start, we would both benefit equally
1. There were a number of discussions between the parties. She did not accept they were on the bench but they may have been.
2. Mr George did explain the work required to be done and she did agree to it.
3. The work would be carried out by the whole family at week-ends and in the evenings. She accepted that Mr George was a professional builder with the necessary expertise but she made the point that there would be assistance from her, her 2 sons. Her eldest son was a plumber.
4. There were discussions about how the work would be financed. As a result of the death of her husband she had money in the bank [about £23,000 at the beginning of 1998 but she knew she would receive further monies from Bryant Homes]. She was going to pay for the materials. There was no discussion that Mr George would contribute financially. There was no discussion about how much the work was going to cost. Mr George knew how much money she had. He was able to get materials at cost. Furthermore she knew she could borrow money on the security of the property if necessary.
5. There was no discussion that Mr George would get any interest in the property. She was at that time in a very vulnerable state. She was suffering from depression following the suicide of her husband; she still had 3 children living at home. She regarded the property and the money she had received as being part of the children's inheritance and would never have agreed to give a share of it to Mr George.
4.7. The Work
We were at the house. He was in the back garden. He was looking at the house
He said I am not going back to work until I have finished this. He said it would be about 6 months. I was elated. I thought I am going to get my home back and I am going to get back to normality.
|Roofs (to include replacing new felt to main house roof)||1,700.00|
|UPVC windows and doors||4,500.00|
|Pointing - house extension chimney||1,100.00|
|Casings internal doors skirting and architraves||1,500.00|
4.9. Expert Reports
1. he assessed the value of the property in July 2007 at £175,000 (that is to say some £50,000 less than the price achieved by Mrs Szyczak)
2. he assessed the value of the property in 1996 at £55,000 (that is to say some £20,000 less than he asking price set by Whitegates and £17,500 less than the offer received by Mrs Szyczak)
3. he assessed the value of the property in 2007 if no work had been done as being £130,000 (thus valuing the increase in value as a result of the work at £45,000 (being £175,000 - £130,000))
4. he assessed the cost of completing the work at about £50,000 and that the value of the property would then have been £225,000.
4.10. Other Evidence
5. The Law.
5.1. Constructive trust
It might in exceptional circumstances be inferred that the parties agreed to alter their beneficial interests after the house was bought; an example would be if the man bought the house in the first place and the woman years later used a legacy to build an extra floor to make more room for the children. In such circumstances the obvious inference would be that the parties agreed that the woman should acquire a share in the greatly increased value of the house produced by her money. But this depends on the court being able to infer an intention to alter the share in which the beneficial interest was previously held; the mere fact that one party has spent time and money on improving the property will not normally be sufficient to draw such an inference.
19. I start with the claim for a common intention constructive trust and for a beneficial interest thereunder. That requires that the court should be satisfied that the relevant parties each had the intention, communicated to each other, that, notwithstanding the paper title in Mrs Morris Senior and notwithstanding the absence of any writing, there should be a disposal of a beneficial interest in land to the claimant. As I have noted, this is not a case where there has been any agreement or discussion on the point by the relevant parties. The events relied on by the claimant are, of course, events which occurred long after the land was acquired by Mrs Morris Senior. That the court can find that a beneficial interest is subsequently acquired by reason of conduct alone has been confirmed by this court in James v Thomas  EWCA Civ 1212. However, I would respectfully emphasise what Sir John Chadwick, giving the only reasoned judgment of the court, said in paragraph 24. Having referred to Gissing v Gissing supra at page 901 D-E and Bernard v Josephs  Ch 391 at 404 E-F, Sir John added this:
"But, as those cases show, in the absence of an express post-acquisition agreement, a court will be slow to infer from conduct alone that parties intended to vary existing beneficial interests established at the time of acquisition."
20. Mrs Gowling was unable to tell us of any decision where it has been held that such a variation of beneficial interests has occurred in such circumstances. I cannot help but wonder whether the judge realised what a rare bird he had discerned in the unpromising factual circumstances of this case.
21. The task of the court is as Lady Hale said in Stack v Dowden  2 AC 432 at paragraph 60
"to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it."
22. Lady Hale referred with approval with what was said by the Law Commission in "Sharing Homes: A Discussion Paper" at paragraph 427 on the quantification of beneficial entitlement, which suggested a holistic approach to quantification, the court undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which throws light on the question what shares were intended. Lady Hale then said this:
"That may be the preferable way of expressing what is essentially the same thought, for two reasons. First, it emphasises the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended. Second, therefore, it does not enable to the court to abandon that search in favour of the result which the court itself considers fair. For the court to impose its own view of what is fair upon the situation in which the parties find themselves would be to return to the days before Pettitt v Pettitt  AC 777 without even the fig leaf of section 17 of the [Married Women's Property Act 1882]."
23. Those comments were, of course, directed to what is always regarded as the second question relating to quantification of beneficial entitlement, the first question being whether an agreement arrangement or understanding that the claimant was to acquire a beneficial interest in the land has been shown. The authorities make clear that a common intention constructive trust based only on conduct will only be found in exceptional circumstances. The evidence in the present case seems to me, with respect to the judge, to be wholly inadequate to establish any such common intention, whether one considers the claimant, Mr Morris or Mrs Morris Senior.
it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or proprietary estoppel.
1. Can Mr George establish on the balance of probabilities that there was a post acquisition agreement as set out in his Supplementary Witness Statement. If not
2. s this one of those rare and exceptional cases where the Court can infer from their conduct that the parties shared intention was to grant Mr George a beneficial interest in the property
3. the assessment of any interest found to exist under either of these heads.
5.2. Proprietary Estoppel
6. Post Acquisition Agreement
1. the evidence of the post acquisition agreement emerged for the first time on the morning of the trial. There were hints of it in paragraph 17 of the Particulars of Claim but it was not set out in evidence until the Supplementary Witness Statement. I would have expected such a central area of Mr George's claim to have appeared in his principal witness statement especially as paragraph 42 of the witness statement was expressly dealing with the discussions in late 1997/ early 1998.
2. Mr George is a man who has admitted making dishonest and fraudulent applications for housing benefit and other benefits. Thus his honesty is questionable and his evidence has to be approached with considerable care.
3. In my view Mrs Szyczak's ledger supported by the receipts is a far more reliable guide to the expenditure on the property than the vague evidence of Mr George supported only by his bank statements and the assertion of £11,000 cash in the safe. If the ledger is correct it corroborates Mrs Szyczak's evidence that Mr George did not contribute financially to the costs of the improvements until August 2000 when Mrs Szyczak ran out of money. It was part of Mr George's case that he would financially contribute to the work. In fact he did not. This militates against the existence of the agreement as alleged by Mr George.
4. At the time of the alleged agreement there was no question of Mr George giving up work. All that was being proposed was that he would provide his labour and expertise at week-ends. He was to be assisted by other members of Mrs Szyczak's family. He was at that time in love with Mrs Szyczak. His actions are consistent with that love. Furthermore I agree with Mrs Szyczak that having acquired the property as a result of her husband's tragic death she was likely to think long and hard before she agreed to pass on part of her children's inheritance to a third party. She was at the time in a vulnerable state and, as she says, off work as a result of the depression. I think it inherently unlikely that she would have entered into the sort of agreement alleged by Mr George.
5. It is to my mind remarkable that if there was an agreement such as is alleged by Mr George it was not mentioned when he agreed to give up work in June 2000 or again in late 2001 when Mrs Szyczak applied for the £30,000 loan from Nationwide. If, as Mr George alleges, it was regarded as a joint loan why was the question of the interest in the house not raised at that point. Yet according to Mr George the only time the post acquisition agreement was mentioned was on the one occasion on the bench outside the outside in late 1997 or early 1998.
6. Mrs Szyczak was subjected to detailed cross-examination both as to the alleged agreement and to the financial payments that were made. She struck me as an impressive witness on these areas. She was prepared to concede points where appropriate. She accepted, for example, that the free issue materials were not included in the ledgers. She accepted that Mr George explained the things he said needed to be done. She was in my view impressive when answering questions over the ledgers and appeared to me to have quite good and honest recollection of what payments were made.
7. Mr George's approach seemed to me to be more blinkered. On an number of occasions he explained matters that he said he had explained to Mrs Szyczak and did not appear to accept that his view might have been wrong. I thought there was force in the criticism levelled at Mr George by both Mrs Szyczak and her son Edward.
7. Beneficial Interest implied from conduct
1. As already noted any intention to be inferred by conduct has to be the joint intention of the parties. The intention of one of the parties - Mr George is not sufficient. I am far from convinced that it can be inferred that Mrs Szyczak ever intended to grant Mr George a beneficial interest in the property
2. The factors pointing against inferring such an intention to my mind include:
1) The vulnerable state of Mrs Szyczak
2) The circumstances in which she acquired the property
3) The payments made solely by Mrs Szyczak between 1997 and 2000 for the materials
4) The fact that all the family were working on the property at the week-ends and that Mr George did not give up work until 2000. There were no discussions when he gave up work to indicate any change in his interest.
5) The fact that it was Mrs Szyczak who applied for the loan of £30,000.