Re Pavlou [1993]
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Re Pavlou (A Bankrupt) [1993] 1 WLR 1046 (Ch) addressed the issue of severance of a joint tenancy in a matrimonial home and the equitable division of proceeds between beneficial joint tenants.
A husband and a wife who jointly purchased a home as beneficial joint tenants in 1973. After the husband left the home in 1983, the wife continued as the sole occupant, contributing to mortgage payments and making improvements to the property. The wife obtained a divorce in 1986, and in 1987, the husband faced bankruptcy, leading to the appointment of a bankruptcy trustee. The trustee sought an order for sale, claiming that there was no distinction in the division of proceeds between beneficial tenancy in common and beneficial joint tenancy. The key issue was the division of shares in the proceeds of sale, taking into account the wife's significant contributions to the property and repairs.
The court held that, in the equitable division of shares, there is no inherent distinction between beneficial tenancy in common and beneficial joint tenancy. It emphasised the principle that the division must consider any increase in property value brought about by the expenditure of one party. In this case, the wife's contributions, including repairs and improvements, had enhanced the property's value.
The court ruled that the bank, as the bankruptcy trustee, must take into account the wife's expenditures and contributions when dividing the shares in the property. The calculation of the wife's contribution would be from the time the husband left the property in 1983, not from the date of his bankruptcy in 1987. This decision underscores the court's commitment to an equitable and fair distribution of proceeds, considering the actual contributions of each party to the property.
A husband and a wife who jointly purchased a home as beneficial joint tenants in 1973. After the husband left the home in 1983, the wife continued as the sole occupant, contributing to mortgage payments and making improvements to the property. The wife obtained a divorce in 1986, and in 1987, the husband faced bankruptcy, leading to the appointment of a bankruptcy trustee. The trustee sought an order for sale, claiming that there was no distinction in the division of proceeds between beneficial tenancy in common and beneficial joint tenancy. The key issue was the division of shares in the proceeds of sale, taking into account the wife's significant contributions to the property and repairs.
The court held that, in the equitable division of shares, there is no inherent distinction between beneficial tenancy in common and beneficial joint tenancy. It emphasised the principle that the division must consider any increase in property value brought about by the expenditure of one party. In this case, the wife's contributions, including repairs and improvements, had enhanced the property's value.
The court ruled that the bank, as the bankruptcy trustee, must take into account the wife's expenditures and contributions when dividing the shares in the property. The calculation of the wife's contribution would be from the time the husband left the property in 1983, not from the date of his bankruptcy in 1987. This decision underscores the court's commitment to an equitable and fair distribution of proceeds, considering the actual contributions of each party to the property.
