Knight & Anor v Knight & Ors [2019] EWHC 915 (Ch) (29 April 2019)

Knight & Anor v Knight & Ors [2019] EWHC 915 (Ch) (29 April 2019)

The court found that the defendants held Close Court as bare trustees for Stephen Knight, who was always the beneficial owner, and that the proceeds of sale (after redemption of the mortgage from Stephen's inheritance) are held on trust for his estate. The evidence, including the undervalue of the 2000 transfer, the use of Stephen's funds to redeem the mortgage, and the parties' conduct and correspondence, established a common intention trust in Stephen's favour. The defendants' expectation of inheritance did not confer beneficial ownership. The court rejected the defendants' alternative case of an agreement for Stephen to live rent-free for life with the property passing to their children.

Citation
[2019] EWHC 915 (Ch)
Parties
Claimant: Sarah Knight; Claimant: Gordon Gregory; Defendant: Richard Knight; Defendant: Lesley Anne Knight; Defendant: Megan Knight
Jurisdiction
England and Wales
Judgment Date
29 April 2019
Procedural Posture
Chancery Division Claim for Declaration of Trust and Related Relief / Trial Judgment
Outcome
Claim allowed. Declaration granted that the proceeds of sale of Close Court are held on trust for the claimants as administrators of Stephen Knight's estate.
Legal Topics
Resulting and Constructive Trusts, Beneficial Ownership, Bankruptcy and Insolvency, Family Property Disputes, Declarations of Trust, Redemption of Mortgage, Administration of Estates
Equity and Trusts Property Law Civil Procedure Resulting and Constructive Trusts Beneficial Ownership Bankruptcy and Insolvency Family Property Disputes Declarations of Trust +2 more

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Parties

Sarah Knight

Claimant

Gordon Gregory

Claimant

Richard Knight

Defendant

Lesley Anne Knight

Defendant

Megan Knight

Defendant

Procedural Posture

Chancery Division Claim for Declaration of Trust and Related Relief / Trial Judgment

Legal Issues

  1. 1 Whether the proceeds of sale of Close Court are held on trust by the defendants for the benefit of the claimants as administrators of the estate of the late Stephen Knight
  2. 2 Whether the defendants were bare trustees for Stephen Knight or beneficial owners
  3. 3 Whether the payment of the mortgage from Stephen's inheritance altered beneficial ownership

Ratio Decidendi

The court found that the defendants held Close Court as bare trustees for Stephen Knight, who was always the beneficial owner, and that the proceeds of sale (after redemption of the mortgage from Stephen's inheritance) are held on trust for his estate. The evidence, including the undervalue of the 2000 transfer, the use of Stephen's funds to redeem the mortgage, and the parties' conduct and correspondence, established a common intention trust in Stephen's favour. The defendants' expectation of inheritance did not confer beneficial ownership. The court rejected the defendants' alternative case of an agreement for Stephen to live rent-free for life with the property passing to their children.

Court Disposition

Claim allowed. Declaration granted that the proceeds of sale of Close Court are held on trust for the claimants as administrators of Stephen Knight's estate.

Orders

  • Declaration that the proceeds of sale of Close Court, amounting to £204,442 plus accrued interest, are held on trust by the first and second defendants for the benefit of the claimants as administrators of the estate of the late Stephen Knight.
  • Directions for payment or transfer of the proceeds to the claimants as administrators.