Ralph v Ralph [2021] EWCA Civ 1106
The Court of Appeal has held that an error made in a transfer deed could not be rectified as the parties to the deed never agreed on how the property in question should be held. The case of Ralph v Ralph [2021] EWCA Civ 1106 highlights the importance of agreeing on how joint purchasers will share the beneficial interests of a property at the outset of a transaction.
Joint name property
In this case, a father and son are the registered legal proprietors of a property purchased in 2000. At the time of purchasing, the father could not obtain a mortgage on his sole income, so the eldest son of five children, who was working, could show an income.
The son assisted his father by becoming a second applicant to the mortgage but did not contribute to the deposit nor the monthly mortgage payments.
The property was conveyed into joint names, and the transfer deed indicated, by a cross-entered in Box 11 on the deed, that they were to hold the property as tenants in common in equal shares. The deed was signed by the sellers of the property, but it was not signed by the father and son as purchasers. Neither of the parties could recall being advised as to how the property should be held.
When the son came to buy his own property, he discovered that his name was on the title to the property. It was the son’s position that the property was held as tenants in common in equal shares. The father’s position was that this was a mistake, and they did not intend to hold the property as beneficial joint owners. The son sought a declaration that he was a beneficial joint owner of the property in accordance with the transfer deed.
The trial at County Court
The father said that he had intended the flat to benefit all children. The son’s evidence was rejected. The trial judge found that the declaration in the TR1 was a mistake as there was no express agreement as to how the property would be held and no common intention in that regard.
The High Court found that the transfer could be rectified.
Appeal to the High Court
The judge held that there was no agreement between father and son as to the beneficial interests. In the absence of agreement or discussion, the parties must have intended the transfer deed to be silent on the issue. The best way to proceed would be to remove the cross from Box 11, as this is what the parties intended.
It was not appropriate to vary the transfer deed such that the property was held for the father alone, but it could be rectified by deleting the cross from Box 11 because neither party intended it as there was no expression declaration at all.
Therefore, the appeal was dismissed.
Second Appeal to the Court of Appeal
The son brought a second appeal on the basis that rectification was inadmissible because, at the time, there was no common agreement and no outward expression of accord.
The judge held that there needed to be a distinction between the absence of agreement and an actual agreement. The court needed to find a mutual intention on the part of both parties.
The judge could not find a ‘continuing common intention’ for the transfer deed to contain no declaration of beneficial ownership but only an absence of agreement; therefore, the transfer deed could not be rectified.
Rectification
Rectification is the power to correct mistakes in what parties have actually agreed. In this case, there was no agreement. Neither party could recall discussing how the property was to be held with the conveyancer. No agreement could not be equated with an agreement, and so rectification could not occur.
Here to help
If you would like more information or have any questions regarding a transfer deed, please get in touch with our Property Litigation Team on 0161 941 400 or email the Property Litigation Team.