In the recent Supreme Court ruling in Horsfall v Potter, the Court looked at the common intention of the parties to determine whether a commercial building was “relationship property”.
Mr Horsfall and Ms Potter acquired the commercial property in their joint names in 2003 and the property was sold in 2004 with most of the sale proceeds being transferred to a company owned by Mr Horsfall’s family trust.
The claim was brought on the basis that Ms Potter had an interest in the property that was disposed of to defeat her rights under section 44 of the Property (Relationship) Act 1976.
Mr Horsfall, a property developer, argued that the property was held on trust for the company and that the purpose of the joint ownership was to protect against tax liability. This was based on an informal oral agreement between the parties.
The Supreme Court, upholding the decision of the Family Court and Court of Appeal, determined that there was no common intention that the property be held on trust so Ms Potter had acquired a joint beneficial interest in the property and it was relationship property.
This case highlights the importance of correct registration of ownership of property and how things might work against a party if there is a subsequent separation and Relationship Property dispute. If you need any advice on these matters please contact us and meet the team here.