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HHJ Johns KC yesterday handed down judgment on the third day of the trial in Anderson v Breakenridge in Central London County Court. The decision is particularly interesting because of the court’s reliance on the decision of Lewison LJ in Hudson v Hathway [2022] EWCA Civ 1648. HHJ Johns KC accepted the Defendant’s submission that the decision provides authority for the proposition that there can be detrimental reliance on an agreement where one of two co-owners remains in a property after a breakup and discharges the mortgage payments as they fall due.
The dispute concerned the beneficial ownership of a house in Leyton, east London, which the parties had purchased together in 2007 whilst they were in a relationship. At the time, they declared that they held the title on trust for themselves as joint tenants. Miss Anderson’s parents provided the parties with a £15,000 loan towards the deposit, with the balance being paid by a mortgage company. Around two years later, Miss Anderson ended the relationship and moved out of the property. Mr Breakenridge remained in the property.
In around 2016, a dispute arose about the extent of the parties’ beneficial ownership and Miss Anderson later issued a claim for an order for sale on the basis that she owned fifty percent of the property. Mr Breakenridge counterclaimed for a declaration that he was the sole beneficial owner, relying on an oral agreement reached shortly after their breakup, on which he had relied to his detriment.
HHJ Johns KC found that the parties had reached an agreement that, in return for Mr Breakenridge taking on full responsibility for the property, which was then in negative equity, Miss Anderson would give up her stake. He rejected Miss Anderson’s evidence that she did not know that the property was in negative equity and found that this was the reason the property was not sold at the time. He went on to find that Mr Breakenridge had relied on that agreement to his detriment by assuming the burden of repaying the parties’ loan from Miss Anderson’s parents and by assuming full responsibility for the outgoings on the property. The court stressed the importance of looking at detriment ‘in the round’ in the evaluative exercise which it must carry out, rather than applying a granular analysis of particular acts or omissions.
Miss Anderson’s claim for an order for sale was dismissed, and Mr Breakenridge was granted the declaration for which he counterclaimed: that he is the sole beneficial owner of the property under a constructive trust in his favour.
Tom Morris acted for Mr Breakenridge, the successful defendant and counterclaimant, instructed by Advocate.
