Geary v Rankine
Court of Appeal
Citations:  EWCA Civ 555;  2 FLR 1409;  2 FCR 461.
G and R were in a romantic relationship. They lived together in a house in London and had a son together. Six years into the relationship, R bought a guesthouse in Hastings as an investment with his own money. R initially intended the guesthouse to be run by an independent manager. However, when problems arose, R had to move away from London to manage the business himself.
G initially remained in London, where she worked as a receptionist. However, when R found himself unable to cope, G moved to Hastings. While there, she helped with cleaning, did all the cooking, and assisted with the administration and bank paperwork. She was not paid a wage, but R gave her money if she asked for it. When G asked R what security existed for her and their son, R responded that the business should remain in his sole name.
The relationship broke down. R claimed that she had either acquired a beneficial interest in the guesthouse or the guesthouse was a partnership asset.
- Had R acquired a beneficial interest in the guesthouse by way of constructive trust?
- Were R and G in a partnership with respect to the guesthouse? If so, was the guesthouse a partnership asset?
The Court of Appeal held in favour of R. There was no evidence of a business partnership. G was clearly not intended to be entitled to a share of the profits. Even if there was a partnership, R bought the guesthouse with his own money and clearly intended to own it absolutely, rather than as a partnership asset.
There was no common intention constructive trust either. This was because R bought the house entirely with his own money, and at the time there was no intention that G would live in the home or even play a part in the business. There was no evidence that the parties’ intentions concerning the equitable title subsequently changed.
This Case is Authority For…
Where one party solely owns property, there is no presumption of joint beneficial ownership. The court will assume that the sole legal owner intended to hold the equitable title absolutely. This can be rebutted by objective evidence, derived from the parties’ conduct, that they intended something different.
The court noted that a common intention to run a business together is not the same thing as a common intention that business property be jointly owned.