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02 DEC 2008

PROPERTY: Frear v Frear [2008] EWCA Civ 1320

(Court of Appeal; Sir Andrew Morritt, Chancellor, Hooper and Wilson LJJ; 2 December 2008)

The son contributed substantially to the purchase price of the property. The parents supplied the remainder, mostly in the form of a mortgage, which the parents serviced. The son and the parents lived in the property together, agreeing between them that the son owned half the property, even though the property was registered in the name of the parents. On the father's death the mother became the sole legal owner. When the mother died she purported to leave the son half the property in her will, dividing the remainder of the property between four other siblings. The son, who now lived alone in the property, argued that he was entitled either to the entire beneficial interest under the original agreement, or to his own half beneficial interest, plus half the mother's beneficial interest under the will. At first instance the judge dismissed the son's case, on the basis that the parents had held the whole beneficial as well as legal interest, but that the parents had been under an obligation to leave half the property to the son on death.

Dismissing the appeal, and concluding that the son was entitled to only half the property, but for different reasons to the judge, the court noted that under the agreement the son had always held half the beneficial interest in the property. However, the equitable doctrine of election applied and the son was required to decide whether to keep his existing beneficial interest, and renounce his bequest, or to accept his bequest, and compensate the estate by ceding to it his existing beneficial interest or its notional value. Whichever election of gifts the son made, he would end up with half the house.

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