Property joint ventures gone wrong!
In good times when it seems that there is money to be made business men and women will often rush into actions they sometimes later regret. A classic situation is where an informal deal is made in relation to a property, perhaps owned by one party, for its development by the other, with some kind of sale / profit-sharing arrangement. However, the terms of the deal are not put into writing – or at least not sufficiently to comply with the provisions of s2 of the Law of Property (Miscellaneous Provisions) Act 1989. Things go wrong and the deal falls apart. The non-owning party, who has perhaps spent a lot of money and put a lot of effort into the development, wants to know whether or not he or she has acquired a share in the property or has some other remedy. Such was the case in Yeomans Row Management Ltd v Cobbe decided by the House of Lords  UKHL 55. What are the lessons to be learned?
We shall come to Cobbe shortly but first another similar situation where the court has held there to be a remedy - what is called the Pallant v Morgan trust (after Pallant v Morgan  Ch 43). The key facts (as set out in Cobbe) were as follows:
"In essence, A and B agreed, prior to an auction of land in which both were interested, that A would bid for the land, that B would refrain from bidding and that if A became the purchaser the land would be divided between them. A did become the purchaser but he and B failed to agree on the scheme and terms of the division. A then claimed to be entitled to retain the whole of the land."In that case Harman J the court declared that "the property is held by the defendant for himself and the plaintiff jointly, and if they still fail to agree on a division the property must be resold, either party being at liberty to bid, and the proceeds of sale divided equally after repaying to the defendant the £1,000 which he paid". There are thus situations where the court will hold that the parties are joint owners, by virtue of a trust, even though the legal formalities have not been complied with.
Yeomans v Cobbe
The first point to note is that in this case Yeomans R ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW
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