Carol Diane McKend v David Halpin

This is my decision in respect of Carol McKend’s Form RX1 application for entry of a restriction against the title to the Criffel Inn in Silloth (‘the Property’). Mr Halpin has been the registered proprietor of the Property since 21 June 2012.

The Property is a former pub which the parties converted into a café with a first-floor function room and a second floor flat above.

Ms McKend puts her case very firmly on the basis of an express agreement with Mr Halpin that she would fund work to the Property in return for an equal share in it, with Mr Halpin transferring the title into their joint names. She says that this agreement was reached whilst they were in a romantic relationship and shortly after Mr Halpin bought the Property for £80,000 and came about because Mr Halpin had run out of money to fund renovation. She relied upon this agreement and invested about £74,000 plus her time, giving rise she contends to a constructive trust or an estoppel.

Mr Halpin’s case is even simpler: there was an agreement, but it extended only to the running of the café as equal business partners. He never agreed to or assured Ms McKend that he would share the Property itself and/or put the title into their joint names.

The starting point is that the beneficial ownership of the Property follows the legal title. For Ms McKend to succeed on establishing otherwise, she must show that (a) there was a common intention that she should have a beneficial interest in the Property, (b) that in reliance upon this common intention she acted to her detriment, and (c) as a result it would be inequitable for Mr Halpin to deny her an interest.

Since Ms McKend alleges an express common intention, she must show that they had express discussions “however imperfectly remembered and however imprecise their terms may have been”. The Court or Tribunal will draw the inference that a reasonable person would have drawn at the relevant time. Such an intention is sufficiently established if Mr Halpin induced Ms McKend to believe that she would have an interest in the Property, even if he did not in fact so intend (Megarry & Wade: The Law of Real Property at 10-026A).

In his Skeleton Argument, Mr Oughton (for Mr Halpin) addresses the law on proprietary estoppel rather than constructive trusts. To be fair to him, this is because Ms McKend’s Statement of Case does not use the words “express constructive trust” or “proprietary estoppel” and, I think, he took the view that it must the latter given that any agreement was post-purchase of the Property by his client. Be that as it may, both counsel agreed that the pleaded facts found the basis of either constructive trust or proprietary estoppel. I will focus on the former as Mr Gilchrist presents Ms McKend’s case on this basis and I do not think proprietary estoppel adds anything.

Since it is Ms McKend who has brought this application, the burden of proof is upon her to the civil standard (i.e. the balance of probabilities).

The issues for me to determine are (a) was there an express agreement between the parties (or a representation by Mr Halpin for proprietary estoppel), (b) did Ms McKend act to her detriment in reliance upon the agreement (or representation) such that it would be inequitable for Mr Halpin to deny that she has an interest?

The parties (but not their counsel) may find it helpful if I say a little about how English judges decide civil cases such as this.

First, judges have no special abilities or superhuman powers that enable them to determine when someone is mistaken or lying, or to go back in time to see the property in dispute as it used to be other than perhaps with the aid of photographs. Rather, they consider the parties’ witness statements and supporting documents, listen to the witnesses giving live evidence at trial, listen to the parties’ submissions and then come to a decision. Judges decide cases on the basis of the material and arguments put before them by the parties; they are not investigators and do not look for evidence. Each party is, therefore, responsible for putting forward the evidence and other material that they wish to rely upon, and formulating their legal arguments, so as to persuade the judge to find in their favour.

Secondly, there are two important procedural rules which judges have to observe:

Thirdly, there is the issue of fallibility of memory. It is nowadays generally acknowledged that human memory is quite fallible. This can be particularly important in cases where some of the relevant facts occurred decades ago and memories may have dimmed over the years. Civil judges prefer to rely upon contemporaneous documentary evidence, where available, as it tends to be more objective and reliable than memory alone.

Lastly, civil judges must give reasons for their decisions. They are not, however, required to address every piece of evidence tendered or every argument raised. They deal with the issues that matter most. It should be borne in mind that a judge’s findings of fact are inherently an incomplete statement of the impression made upon the judge by the evidence. Further, that although judgments are unlikely to explain all aspects of a judge’s reasoning, and might well have been better expressed, they should at least address the main issues and enable the parties to understand how the decision was reached.

The parties’ evidence is set out at some length in their Statements of Case and Witness Statements. They both gave oral evidence and were cross-examined, as were Mr Halpin’s three witnesses. The Trial Bundle ran to some 600 or so pages the vast majority of which were not referred to or necessary.

Ms McKend’s evidence was that she formed a “close romantic relationship” with Mr Halpin in March 2012. She had known him in her twenties and been reintroduced by her cousin James Woodford. At the time she was separated from her then husband and Mr Halpin was going through an acrimonious separation from his former partner. Mr Halpin was working as forklift driver at the time. He was also in the process of buying the Property and she had viewed it with him prior to exchange of contracts, albeit without any expectation of involvement. Mr Halpin bought the Property for £80,000 - funded by a three-year interest-only mortgage on his home - and was registered as the proprietor on 21 June 2012. I should add by way of background that Ms McKend had been involved in a serious car accident in 2004 and had received £375,000 compensation. She had used £210,000 to buy her home in 2008 and in 2012 still had some of the balance remaining. Mr Halpin’s evidence was consistent with all this and they also agree that the Property was never to be a partnership asset, but their stories diverge in August 2012.

Ms McKend says that they holidayed together in August 2012 and that shortly after their return Mr Halpin accompanied her by car to an appointment at Hexham Hospital on 29 August. On their way home, Mr Halpin told her that the renovations were costing more than anticipated and that he was running out of money and could not obtain further funding. He suggested she abandon plans to develop her own property and invest in turning the Property into a café on the ground floor with a function room and holiday-let on the first and second floors. He thought the work would not exceed £80,000 and that the flat would appeal to golfers – that it might be let (and that he might move in if he sold his house) was mentioned in a draft business plan prepared with Mr Halpin’s accountants, David Allen, on 26 April 2013 and in a Financial Projection for the year ending 31 May 2014. If she invested, they would treat the Property as jointly owned, share the income generated by it and he would transfer the title into their joint names. Further, he would give up work and manage the project. He was “pretty desperate” and said that if she did not help him, she would “find him hanging in the pines”. It was Mr Halpin’s offer to share ownership jointly in exchange for her investing. She trusted him and did not think it was necessary to formalise the arrangement through a solicitor at the time.

Ms McKend believes that she invested over £75,000 (Footnote: ¹) and also loaned Mr Halpin £12,000 for his living and mortgage expenses. Meanwhile, on her case Mr Halpin had invested very little in the renovations (perhaps just for flooring and curtains) and certainly not the £59,500 he claimed. They had to obtain a further £50,000 loan in August 2013 before opening the café in November 2013. After obtaining this further loan, Mr Halpin’s behaviour towards her changed. He controlled the finances and excluded her from discussions about the café and the Property. In about June 2016, he sold his home, paid off his £80,000 mortgage and moved into the second floor flat. Their relationship came to an end in April 2021 when he unilaterally let the café. In December 2023, Mr Halpin unilaterally withdrew £79,000 from their joint account into which the café tenants paid their rent and has not accounted for any subsequent rent. Despite numerous assurances, he never transferred the Property into their joint names.

Ms McKend placed particular reliance upon a number of documents. One was a notebook entry which, she said in evidence, she made within days of Mr Halpin asking her to fund the renovations whilst driving back from Hexham Hospital on 29 August 2012:

“David asked if I’d fund renovating The Criffel & he’d add my name to deed. Costing more than he thought. Estimated costs? Joint ownership? Who/how loan repayments?”

She accepted that this entry was undated and in pen rather than pencil like other entries but denied having written it recently to assist her case. She said that she had written down questions that she wanted answered before investing. She also relied upon a document titled "Financial Projections for 12 months ending 31 May 2014”, submitting that it provided a snapshot of what Mr Halpin intended when it was prepared by his accountants in May 2013.

Another document, which I gave permission to be admitted in evidence at the very start of the hearing, (Footnote: ²) was an email exchange between Ms McKend and an HSBC employee Ruth Harrison on 22 and 23 July 2013 at which time the parties were seeking to borrow the further £50,000:

Mr Halpin’s evidence differed markedly. He had planned to re-open the Property as a pub (of which he had experience) but that Ms McKend proposed they run a café together and offered to fund the extra cost of renovating for a café as he could not afford this. This appealed to him and so they proceeded with the café plan. He remembered discussing this in the car on the return from Hexham Hospital at the end of August 2012 – she was excited by the project and offered her money. At some point Ms McKend asked him to put her “name on the deeds” to which he had said “no chance”, having bought the Property for himself and had bad experiences of previous relationship break-ups, and that it was up to her if she wanted to invest in the cafe. If the business made a profit, she would hopefully get back her investment and some more. Although she sulked over his refusal, she continued to invest in the café. He thought this was because of their personal relationship and because it was a good business opportunity. She would occasionally bring up her name going onto the deeds but each time he clearly said “no”. He stressed that this stance was attributable to the fact that he had had a number of failed relationships.

It is Mr Halpin’s case that he and Ms McKend had spent roughly the same amount of money on renovations (Footnote: ³) and that she invested nothing in the upper floors; he was insistent that he had never asked her to because she had no interest in the Property. (Footnote: ⁴) Initially during cross-examination he maintained this stance but when pushed conceded that she had spent money on scaffolding and painting the whole building as well as £5,928 to “Sean” for “electrical” on 27 March 2013 and for “second floor fix just fire alarms... which had to be done”. (Footnote: ⁵) Whatever she spent was, he said, “very little percentage-wise”. He had never asked her; it was her choice.

It was also put to him in cross-examination that there was no mention in the Financial Projection for year ending 31 May 2014 of him having spent any money on renovations whereas his £80,000 purchase and Ms McKend’s “approximately £69,000 of her personal monies” was. He said that he had not seen this document before and insisted that even though there was no mention of his having invested money, he had done so. It was also put to him that this document stated “On the third floor is a flat that will be used as holiday accommodation...”. His response to this was that “It was just invented to get the £50,000 loan. It was mentioned to make it look like a good proposition [for the bank]. It was totally wrong.” It was also put to him that later in this document the Property, valued at £80,000 (being what he paid for it), was included as an asset. He could not explain this, not being an accountant and could not remember discussing this with the accountants who had prepared the document. The Property was always going to be his; he had told the accountants this “absolutely 100%”.

In his oral evidence he said that it was at her insistence that he quit his job – she would give him some money so that he could afford to do so. He explained how he had called her from on his forklift truck to ask if the offer was still open and she had said it was. It was put to him that his written evidence differed in that it had made no mention of this call at the point where he mentioned her lending him £10,000 because he had run out of money. His response was that he did not think it necessary to mention it. Further, Mr Gilchrist (for Ms McKend) pointed out that the timings were inconsistent with Mr Halpin’s claims. He had stopped work on 8 September 2012, the cheque stub for the £10,000 was dated 17 December 2012 and he had not deposited it until 14 January 2013. Mr Halpin’s answer to this was that he had been spending his own money in the four months after he had stopped work.

Mr Halpin said that he cannot remember Ms McKend raising joint ownership (“going on the Deeds”) after the café opened. She was an experienced businesswoman and well-knew whether or not she was on the deeds. After about five years, he (not jointly) put the Property on the market. Then, after the café had been closed by the pandemic, he rented the property to be run as a café. Although he consulted her as a business partner in the café, she did not “hold herself out as being the landlord in any way.” He was asked in cross-examination why he prepared a draft lease for the café which had Ms McKend named with him as “the landlord”. His response to this was that it was only he who was named as the landlord. He also said that rent from the café was paid into the parties’ joint account on the advice of his accountants who had told him to leave this arrangement in place until everything had been sorted out. When asked why he had withdrawn £79,000 from this account, he said that no one had told him not to he had not asked the accountants, and he had taken is before Ms McKend did – she could have taken the money too. When asked how he saw Ms McKend getting her investment back if the café business had no value, Mr Halpin said from the sale of the Property.

As for Ms Harrison of HSBC speaking to him in July 2013 about transferring the title into joint names, he could not remember any such conversation.

Messrs Wallace, Woodford and Jones all gave evidence, written and oral, that insofar as they knew, Mr Halpin owned the Property outright. All three said that early on in their relationship Ms McKend had offered to put Mr Halpin “on her deeds” in return for her name going on the deeds for the Property but that Mr Halpin had refused. None of them could remember much about when their conversations with Mr Halpin took place and none of them had discussed it with Ms McKend.

I found Ms McKend to be a good witness: calm, consistent and untroubled in cross-examination. I accept her evidence. Certain documents such as the July 2013 emails, the Financial Projection and, to a lesser degree, her notebook from 2012 supported her case. The emails written over 12 years ago and long before this dispute arose show that transfer into joint names was a live issue that had been raised in July 2013 with HSBC and even though I have not heard from Ms Harrison there is no reason to doubt her “I’ve spoken to [Mr Halpin] this morning to advise...”. The accountant-prepared Financial Projection’s “Executive Summary” from May 2013 is consistent with her case. Mr Oughton submitted that Dr Mushtaq’s letter dated 1 February 2017 to her GP undermined her case (he recorded her as saying “She... owns a café... in a property owned by her partner...”) but it might be said that this was an accurate reflection of the strict legal position and, in any event, it is simply a letter between doctors where such a detail was of no great importance.

To the contrary, I found Mr Halpin to be an unimpressive witness. He had difficulty answering questions during cross-examination such as whether he had spoken to Ms Harrison (HSBC) as her email suggests (I find that he did), whether Ms McKend had spent money on the Property other than the café (I find that she did), the timing of Ms McKend’s £10,000 loan and his quitting his job (I accept what she says and reject his account), the contents of the Financial Projection document (which gives a snapshot of the parties’ intentions as the time – I reject Mr Halpin’s claim to have never seen it; his accountants would have prepared it on his instructions) and the names that he had written on the draft lease for the café (which shines a light on how he considered the Property to be owned then). Further, there was no evidence (in contrast to Ms McKend) that he had spent any money on the Property other than his say-so and the very rough summary document. (Footnote: ⁶)

As for Mr Halpin’s witnesses, they had no direct knowledge and, at their evidence’s highest, were recounting what they said Mr Halpin had told them. I found their evidence vague, uncompelling and of no real assistance. After hearing Mr Halpin’s and their oral evidence and considering the documentary evidence such as the July 2013 emails and the Financial Projection for y/e May 2014, I think it more likely than not that the former has persuaded his friends as to the “truth” of his account and that they have, understandably, tried to support their friend in these proceedings. There was far from enough substance to their evidence to undermine all that I heard and saw in Ms McKend’s favour.

Accordingly, I find as follows. First, where the parties’ evidence differs, I prefer that of Ms McKend for the reasons given above. Secondly, I find that at the end of August 2012, Mr Halpin had run out of money and directly asked Ms McKend to invest in the Property with the express assurance that she would have a half share of it and that he would reflect this by putting the title into their joint names. At this point, he had invested £80,000 in buying the Property (which he expected to be re-paid by the business (Footnote: ⁷)) and the expectation was that about a further £80,000 was needed to finish the renovations. I reject Mr Halpin’s claim that his previous relationship breakdowns were such as to deter him from sharing ownership of the Property with Ms McKend. The Property was not his home and the project was a business proposition, albeit one within the context of a romantic relationship which explains the absence of formality and the trust that Ms McKend put in him. Ms McKend had money and, it is agreed, the necessary culinary skills for a café. (Footnote: ⁸) And, as Ms McKend put it, he was desperate given that by the end of 2012 he had run out of funds and could not raise any further finance.

Thirdly, in reliance upon this representation, Ms McKend dedicated a lot of her time to the project and did indeed invest not far off the £80,000 that Mr Halpin spent on the freehold – although her figure is not identical, it is in roughly the same ballpark. Fourthly, Mr Halpin has inequitably sought to resile from his obligation under the express agreement and not transferred the Property into joint names.

I should add that Mr Oughton raised in his closing submissions the possibility of the Property actually being a partnership asset notwithstanding both counsel assuring me earlier in the hearing that this was not either parties’ position. In the circumstances, I am not prepared to make such a finding. Mr Oughton’s other suggestion, that Ms McKend was content to leave the return of her capital and plus any profit to Mr Halpin’s discretion, is, notwithstanding their relationship, inherently implausible and I reject that too.

Accordingly, I will direct the Chief Land Registrar to give effect to Ms McKend’s original application dated 4 September 2023 (made by a Form RX1 dated 30 August 2023) for entry of a Form A restriction against the title of The Criffel Inn, Criffel Street, Silloth, Wigton, as if Mr Halpin’s objection dated 8 January 2024 (made by his solicitors’ letter dated 5 January 2024) had not been made.

As regards costs, paragraph 9.1(b)(i) of the Land Registration Division’s Practice Direction provides that if the Tribunal decides to make an order about costs, ordinarily the unsuccessful party will be ordered to pay the successful party’s costs.

My preliminary view is that the Applicant is entitled to payment by the Respondent of her reasonable and proportionate costs (i.e. on the Standard Basis) since referral by HMLR to the Tribunal on 5 September 2023.

Any party who wishes to make an application for costs should by 5 pm on 30 September 2025 file and serve by email on the Tribunal and on the other party:

If such a costs application is made: