Abbott v Abbott [2007]

Abbott v Abbott [2007] UKPC 53

Beneficial ownership of matrimonial home; mortgage instalments; gift from husband’s mother.

Facts

The parties were married in 1983 and the following year, Mr Abbott’s mother transferred land to her son, on which their matrimonial home was built. The home was in Mr Abbott’s sole name. Mr Abbott’s mother contributed monies towards the construction cost of the home and the remainder was funded by way of bridging loan and a mortgage which was in joint names. Mrs Abbott did not work from 1986 to 1995 and when they divorced in 1999, she sought a half share of the home.

Issues

Mr Abbott asserted Mrs Abbott’s share amounted to 8% based on her actual contributions to the mortgage when she returned to work after having had children. He sought to rely on Lloyds Bank v Rosset [1991] 1 AC 107 which held that only direct contributions to purchase price or mortgage instalments would suffice to establish an equitable interest in property. He claimed his mother had intended to gift the land and monies to him alone. Mrs Abbott contended the gift had been intended for both parties, and as they had joint accounts and were jointly liable for the mortgage payments, their whole course of conduct should be considered, and the beneficial interests should be in equal shares.

Decision/Outcome

The home was held to be in equal shares. The usual inference when a parent gifts property to newlyweds is that it is intended for both parties. The law had moved on from Rosset and the parties’ whole course of conduct should be considered when establishing their respective beneficial interests. The fact that they held joint bank accounts and assumed joint liability for the mortgage payments was significant, and Mrs Abbott was awarded a half share of the home.