Lord Keith of Kinkel:

My Lords,

[1] I agree with the speech to be delivered by my noble and learned friend Lord Goff of Chieveley, which I have had the advantage of reading in draft. I would therefore allow this appeal.

Lord Goff of Chieveley:

My Lords,

[2] There is before your Lordships an appeal by the appellant, Stella Ruth Tinsley, from an order by the Court of Appeal whereby the Court, by a majority (Lloyd and Nicholls LJJ, Ralph Gibson LJ dissenting), dismissed the appellants appeal from an order of Judge Hywed Ap Robert, sitting in the Caerphilly County Court, ordering (inter alia) that the appellants claim for possession of 141 Thomas Street, Abertridwr, Mid-Glamorgan, be dismissed, and that the appellant holds 141 Thomas Street on trust for the respondent, Kathleen Milligan, and herself in equal shares. The appeal, which is brought by leave of the Court of Appeal, raises the question whether the claim of the respondent to an interest in the property in question is defeated by reason of frauds practised on the Department of Social Security. The facts of the case can be encapsulated in a few brief sentences. However it is desirable to obtain the full flavour of the case; and for that reason propose to adopt the account given by Nicholls LJ in the report in [1992] Ch 310, 315-317, which for convenience of reference I propose to set out in full.

[3] The house in question is 141, Thomas Street, Abertridwr, Mid-Glamorgan. It is registered in the name of the plaintiff Miss Stella Tinsley. She is the sole legal owner. She and the defendant Miss Kathleen Milligan were, to use the judges expression, lovers for about four years, from 1984 to 1988. In the discussions they had during the course of their relationship, both the plaintiff and the defendant expressly recognised they were running a lodging house first at 9, Fitzhamon Embankment, Cardiff, and subsequently at Thomas Street, as a joint business venture and that the ownership of the respective houses was also on a joint basis.

[4] The parties are intelligent and articulate. They met in 1984. The plaintiff was then 19, and the defendant 38. The defendant was the dominant character, but not such as to be able to impose her will on the plaintiff. The defendant was living at 9, Fitzhamon Embankment, which belonged to a Mr Slater. She was running a bed-and-break-fast business. In 1983 a Miss Llewellyn began living in the house, and after a while she was treated as being the housekeeper in place of the defendant. The housekeeper was the person to whom the DSS turned for verification that those to whom it was paying benefits were indeed resident there. In December 1984 the plaintiff moved in and Miss Llewellyn moved out. After a month or two the plaintiff took her place as the nominal housekeeper, although most of the physical work and much of the managerial work were done by the defendant.

[5] The bank and building society accounts used by the parties were put in the plaintiffs sole name, but they were regarded as joint property. Through these accounts the parties conducted most of their financial affairs: nearly all their money went into them, and nearly everything they spent was paid from them. In July 1986, Fitzhamon Embankment was purchase in the plaintiffs name. The price was £29,000. A bank provided £24,000 by way of a mortgage loan to the plaintiff alone. The balance was provided principally from the sale proceeds of a car which belonged to them jointly.

[6] Two years later this house was sold for £33,000, and the mortgage repaid. 141, Thomas Street was bought for £19,000, again in the sole name of the plaintiff. That was in August 1988. £12,000 was provided by a bank loan to the plaintiff alone, and the balance came from the proceeds of sale of 9, Fitzhamon Embankment. In this way all the money provided by the parties for 141, Thomas Street came ultimately from their joint business. Shortly thereafter, the parties quarrelled. The plaintiff moved out, and the defendant rem