Goodman v Gallant [1986] Fam 106 is a landmark case in English property law, which addresses the issue of constructive trusts and the severance of joint tenancies. The case is particularly important for understanding the relationship between express declarations of trust and constructive trusts, especially when one party seeks to sever the joint tenancy and alter their beneficial interest. This case also demonstrates how courts interpret the intentions of parties involved in joint tenancies when disputes over property ownership arise.
The central issue in the case was whether a severance of joint tenancy could alter the beneficial interests of the parties involved, despite an explicit declaration of trust stating the property would be held by them as joint tenants. The Court of Appeal’s decision in this case highlights the significance of express declarations in trust agreements, reinforcing that such declarations will prevail unless there is an exceptional reason to set them aside.
Facts of Goodman v Gallant Case
In 1960, the claimant (the plaintiff) and her husband purchased a house. However, although they had agreed that the plaintiff was entitled to a half share of the beneficial interest, the property was conveyed solely in the husband’s name. The claimant’s interest was not explicitly acknowledged in the legal title, despite their agreement. The couple lived together in the house, but by 1971, the husband left the plaintiff, and she subsequently started living in the property with the defendant, a third party.
In 1978, the husband conveyed the freehold of the property to the plaintiff and defendant as beneficial joint tenants on trust for sale. This conveyance was significant because it included a provision that allowed the sale to be postponed. Additionally, the net proceeds of any sale were to be held on trust “for themselves as joint tenants.”
In 1983, the plaintiff served a notice of severance of the joint tenancy on the defendant and filed a summons seeking to determine their respective beneficial interests in the property. The plaintiff’s primary argument was that, as the property had been conveyed to her and her husband as joint tenants, her beneficial interest was already half of the property, and upon severance of the joint tenancy, she was entitled to a three-quarter share of the beneficial interest in the house.
The plaintiff’s contention was that the joint tenancy should only apply to the half share that she had received from her husband, not to the entire property. The legal dispute centred around whether the declaration of trust in the conveyance had any bearing on the plaintiff’s claim for a larger share after the severance.
Legal Issues
The central legal issue in Goodman v Gallant was whether a severance of joint tenancy could alter the beneficial interests of the parties, despite the clear declaration of trust. Specifically, the case raised the following questions:
- Whether an express declaration of trust could preclude the application of a constructive trust.
- Whether the severance of a joint tenancy automatically led to a change in the parties’ beneficial interests, particularly in the context of the conveyance’s terms.
- What the legal effect of the conveyance, which stated that the property would be held on trust for the parties as joint tenants, was in relation to the severance of the joint tenancy.
Court’s Decision in Goodman v Gallant
The registrar initially ruled that, upon severance of the joint tenancy, the plaintiff and defendant would hold the property as tenants in common with equal shares. This decision was based on the general legal presumption that, upon severance, joint tenants are treated as tenants in common, with equal shares in the property unless a different arrangement is explicitly stated.
The plaintiff appealed the registrar’s decision, arguing that she was entitled to a three-quarter share of the beneficial interest in the property after the severance. She contended that she had already acquired a half share from her husband, and thus, the joint tenancy should only apply to that half, with the remainder to be severed according to her claims.
The judge upheld the registrar’s ruling, affirming that the severance of the joint tenancy led to the property being held as tenants in common with equal shares. The plaintiff’s argument that she should be entitled to a larger share was rejected.
The plaintiff then took the case to the Court of Appeal, where the decision was once again upheld. The Court of Appeal confirmed that the express declaration of trust in the conveyance, which had stated that the property was to be held on trust for the parties as joint tenants, prevailed. The court emphasised that once there is an express declaration of the parties’ intentions in the form of a trust, that declaration would override any claims to beneficial interests based on other factors, such as prior agreements or assumptions.
Slade LJ, delivering the judgement, noted that severance of a joint tenancy does not necessarily affect the rights of the parties as set out in an express trust. He clarified that when the terms of the trust are clear and unambiguous, they should be respected, and the application of constructive trusts or claims to beneficial interests must be viewed in light of the expressed intentions of the parties.
Conclusion
Goodman v Gallant [1986] serves as a pivotal case in the development of property law, particularly regarding joint tenancies and the doctrine of constructive trust. The court’s decision affirmed the importance of express declarations of trust, ensuring that such declarations are given primacy in determining the distribution of property interests.
The case established that, in the absence of an exceptional circumstance, a severance of joint tenancy will not alter the beneficial interests in a property unless explicitly provided for in the trust or conveyance. This case continues to serve as an essential reference point in property law, particularly in disputes concerning joint tenancies and the rights of co-owners.
