Client separated and she and her two deps moved in with her (farmer) mother as she had nowhere else to go. Overcrowded so client's mother bought a house but put both her own and client's name on deeds. Intention was solely to save any hassle when she (mum) died as she'd already promised her son (client's brother) he would inherit the farm.

When she origianlly moved in she was not on benefits but still has a rent book which showed she was liable for and made payments of rent to her mum. Later client had to claim HB which she again paid straight to her mum. She did state on claim form the property belonged to her mum but nothing about her own interest in this. As far as she was concerned she had none as it was merely as a safeguard when mum died.

Now being prosecuted and has instructed our crime dept who in turn refered her to me. I'm also going to lodge a late appeal and I'd appreciate being pointed in the right direction to any CDs/other info about beneficial interest/implied trusts etc not just for the appeal but also because I know it will help her defence.

Many thanks
Sue

A few months ago, I completed a submission for a local authority (the other side, and the hearing will not be until October/November), asking a Tribunal to decide the issue of a benefit claimant's ownership of a property in 'equity' (in my case, the HB claimant had never been on land reg, but paid a substantial amount towards the purchase price, and was in all but name an owner).

I have re-produced several paras from my submission, which might assist???

18. In reaching this decision, the local authority relies upon R(IS) 26/95, (CAO v Palfrey):

“Where the property is a dwelling house, the resultant situation will be as described by Denning LJ in Bull v. Bull <1955> 1 QB 234 at 237. In that case a mother and her married son had purchased a house in which the mother and the son and his wife were to live. The house was conveyed into the name of the son alone. After a while the mother and her daughter in law quarrelled and the son sought to evict his mother from the house. Denning LJ said:

“The son is, of course, the legal owner of the house; but the mother and son are, I think, equitable tenants in common. Each is entitled in equity to an undivided share in the house, the share of each being in proportion to his or her respective contribution. The rights of equitable tenants in common as between themselves have never, so far as I know, been defined; but there is plenty of authority about the rights of legal owners in common. Each of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account. If one of them should go so far as to oust the other he is guilty of a trespass: See Jacobs v. Seward <1872> LR 5 HL 464. Such being the rights of legal tenants in common, I think that the rights of equitable owners in common are the same, save for any such differences as are necessarily consequent on the interests being equitable and not legal”. (page 490 of the decision).

19. Should the issue of a property being held in trust arise, the local authority would rely on decision of the Court of Appeal in Burton v New Forest 2004 EWCA Civ 1510, (reported as R(H) 7/05):

“As to the other arguments under regulation 7, it by no means follows, in my judgment, that where an applicant for housing benefit is making payments of rent to a trust of which he is a trustee or beneficiary, that applicant would be an “owner” within regulation 1(2): see, on this point, R v Sheffield Housing Benefits Review Board ex parte Smith (1995) 28 HLR 36 (the Sheffield Housing case) discussed below. Regulation 7(1)(e) seems to me clearly designed to cover the situation where a trustee is not entitled to dispose of the fee simple of a property, and is thus not an owner, but is making payments to the trust for his occupation of the property. In these circumstances, if he is to receive housing benefit, he will need to satisfy the relevant authority under regulation 7(1B) that the liability he has incurred was not intended to be a means of taking advantage of the housing benefit scheme”, (paragraph 40).

I am not sure of your clients situation, and the issues of 'legal ownership' but if your client is a legal owner, (if not in equity), then the valuation of the property will be at issue, so you might find COA v Plafrey useful... esp. as that decision has been held to apply in HB as per Mr Commissioner Jacobs comments at para 13 of CH/1953; "First, the tribunal had to identify the claimant’s interest that had to be valued. I assume for this purpose that he and his wife are joint tenants, not tenants in common. On that basis, the correct approach was to value his half interest, not to value half of the whole interest. See the Court of Appeal decision in Chief Adjudication Officer v Palfrey, cited in Hourigan at paragraph 14".

The full transcript of Bull v Bull is also very useful…

Hope this helps!

Wow that was pretty speedy.
Thank you

Sue

On the question of trust/beneficial interest. If I understand you correctly, your client’s mother paid the purchase price of the house and your client contributed nothing financially and there is no mortgage to which your client makes contributions.

If that is so, then your client and her mother as the owners of the legal title hold the property on trust for her mother, as her mother is the beneficial owner. So your client's own legal (only) interest (and therefore her position as trustee) is of no help to her defence.

The first issue will be that she would not have been entitled to HB if she had freehold (legal) title as she would have been able to dispose of the fee simple. She would not have been entitled to HB if she had leasehold (legal) title, as the property would probably be that of a long lease. Both are excluded from HB.

The second issue as I can see it will be one of contrivance to take advantage of the HB scheme. However, I cannot see the LA’s case here. The issue of legal title is one of concern by the mother to protect her daughter’s inheritance. Also she was paying rent under a (presumably) legal liability from her own resources before having to claim HB (but how long was the gap here).

This would point to ignorance of her own position rather than outright intention to deceive. The move to the property was entirely reasonable (overcrowding). And providing there was nothing unusual in the financial arrangements and the amount of rent charged, and the failure to declare herself as owner was due to ignorance or a belief honestly held, then I cannot see where the criminal deception comes in which would necessitate criminal charges.

The LA will have to come up with something more substantial than mere failure to declare herself as joint owner on the HB form. I think that there may be no defence against the OP but I would be more optimistic regarding the criminal charges.

If your client paid toward the purchase price or ongoing mortgage then principles of equity would come into play as suggested above.

Regards
Paul

Another megastar. Thanks paul