LCF Law wins precedent-setting insolvency case

LCF Law wins precedent-setting insolvency case

Yorkshire firm LCF Law has secured victory in a case that has set a new precedent in insolvency law, with the judge establishing when, and in what circumstances, an interest in a solely owned property can be claimed by a spouse.

The judgment in the Pillmoor v Miah reviews all previous case law in this complex area, and confirms that without exceptional circumstances, or an ‘express agreement’ or evidence of financial contribution towards a solely owned property, a spouse is unable to claim an interest in a matrimonial home when they are not registered on the legal title as a co-owner.

LCF Law was instructed by Alec Pillmoor, from RSM, in his capacity as the trustee in bankruptcy for Mohammed Miah—a businessman from the northeast.

Miah’s wife of almost 40 years, who was not registered as a co-owner on the title of the family home, and had not contributed to the purchase of the property, claimed she was entitled to half of its value.

Jo Barnes (pictured), partner and insolvency specialist at LCF Law, explained: “The matter was first heard at the county court in Sunderland and the judge found that Miah’s wife was entitled to a 50% interest in the property.”

“We appealed the decision on the basis that the court had adopted the wrong legal approach in determining the ownership of the property and the appeal court overturned the decision, ruling that Miah’s wife did not have a beneficial interest in the property and was not entitled to claim an interest.”

The burden was put on Miah’s wife to establish that she had an interest in the property and to prove this, she needed to produce evidence of either an express agreement between her and her husband or demonstrate exceptional circumstances.

The appeal court held that no such evidence had been presented, and that a long and happy marriage, or the property being bought as the family home, were not sufficient in themselves.

It also found that the judge in the first instance had made an evidential leap, because the evidence presented by Miah’s wife was insufficient to justify a financial interest in the family home.

Barnes added: “The appeal judge found that whilst a long marriage may indicate affection between the couple, it did not give any indication about how they intended to own their assets. In addition, the fact that Mr Miah’s wife had left financial matters to her husband to handle was taken as evidence that there was no specific discussion about beneficial ownership of the property.”

“The case shows that, where the marital home is registered in one name only, it is not sufficient to point to a long and successful marriage as evidence of an intention to share ownership,” Barnes continued.

“The ruling clarifies exactly where the law stands and is an important case because it establishes when, and in what circumstances, an interest in a solely owned property can be claimed by a spouse. It is a significant ruling and one that has been very interesting to have been involved with.”

Alec Pillmoor, head of personal insolvency at RSM, said: “We are pleased that the appeal court has given clarity on this complex area. The law now states very clearly what is required to demonstrate entitlement to a beneficial interest in a property. If not named on the deeds, a spouse or partner needs to provide evidence of an express agreement. It is important to ensure all documentation is in place before it becomes too late.”

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Mark Dugdale

Mark is the Editor of Yorkshire Legal. Mark welcomes articles, letters or feedback from readers and can be reached by emailing mark.dugdale@barkerbrooks.co.uk