JMW succeeds in landmark case on property co-ownership and proprietary remedies

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JMW succeeds in landmark case on property co-ownership and proprietary remedies

Judgment was handed down on Friday 22 April by Deputy Master Hansen in the case of Fattal v Fattal [2022] EHWC 950 (Ch). Peter Barnard and Layla Kelly acted on behalf of the successful Claimant, William Fattal.

The dispute arose in relation to the ownership of 106 Nottingham Terrace, London, NW1 (“the Property”). William Fattal, the Claimant, had purchased it in his sole name in 1972. In January 2014, he transferred it to his brother, Elias Fattal, the Defendant, for no consideration on the basis that in or around 1990, William had orally agreed to transfer the Property to Elias pursuant to a proposal that Elias would pay William £400,000 for his interest. Neither party contended that the transfer had been a gift.

William’s case was that the 2014 transfer had been pursuant to a mistaken belief that he had been paid the £400,000 in or around 1990. The claim sought relief for the consequences of that mistake and other relief.

Elias’ position was that the brothers owned the Property beneficially as tenants in common from acquisition in 1972 pursuant to a common intention constructive trust and that the proposal in 1990 was for him to acquire William’s 50% beneficial share. Elias asserted that whilst he couldn’t recall the specifics of the arrangement William would have allocated a sum in one of the accounts of the many jointly owned companies, a director’s loan account, a trust account or similar device so as to account for the movement of a sum of money from the Defendant to the Claimant to reflect the transfer of the Claimant’s beneficial interest in the Property to the Defendant.

The Deputy Master held:

  1. There was no evidence to support Elias’ claim that he had made a financial contribution to either the acquisition or subsequent refurbishment of the Property and that notwithstanding the brothers’ shared occupation of it for a number of years, there was no common intention to share the Property beneficially and no detrimental reliance on Elias’ part to support such an intention;
  2. Elias had not paid William for the acquisition of his beneficial interest either in 1990 or thereafter; and
  3. As a result, the 2014 transfer was a void contract for the sale of land and ought to be unwound on the basis that Elias held the Property on constructive trust for William (Ali v Dinc [2021] 2 P & CR 19, followed). It was further appropriate to grant equitable relief on the basis of William’s mistaken transfer of the Property in 2014 and/or alternatively Elias held the Property on a presumed resulting trust for William. Elias was also ordered to account to William for the rental income received since the transfer of the Property in 2014.

This is a significant decision in the field of co-ownership of property and proprietary remedies following a mistaken or void disposition. Please do not hesitate to contact either Peter Barnard or Layla Kelly should you have any questions arising out of it.

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