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(Court of Appeal, Arden, Tomlinson, Davis LJJ, 3 July 2012)
Two friends bought a flat together with the assistance of a mortgage. S paid the larger share and the title was held in his sole name. The Judge found the parties expressly agreed each would have a 50% share notwithstanding their unequal contributions based on a common intention constructive trust.
The judge also found the existence of a further agreement that G would pay a larger proportion of the mortgage repayments to take account of the unequal contribution to the purchase price but he did in fact not do so. There was no written declaration of trust or compliance with the formalities necessary for the creation of a trust. Taking into account all contributions to the property in total S paid 75% and G paid 25% of the costs towards the flat. S now sought to occupy the flat with his girlfriend to the exclusion of G.
The Court of Appeal set aside the 50:50 division and substituted it with a 75:25 division in favour of S. The agreement did not apply in the events that unfolded. The parties had intended that their financial contributions should be taken into account.