House bought by unmarried couple–Both names on transfer and mortgage, but deposit and outgoings paid by man alone–Woman held to obtain no beneficial interest, despite point as to payments by her for food and clothing–Man must however free her from mortgage liability
By this
originating summons Mrs Joyce Violet Crisp sought an order that Mr William
George Mullings, of 34 The Green, Morden, Surrey, should concur with her in
sale of that property, and a further order for an inquiry as to the beneficial
interest in the property vested in each party. The defendant counterclaimed a
declaration that he was solely beneficially entitled, subject to a mortgage,
and an order that the plaintiff transfer the property to him absolutely.
Mr A H Tibber
(instructed by Montague Gardner & Howard) appeared for the plaintiff, and
Mr D Gidley Scott (instructed by Lethbridges) represented the defendant.
Giving
judgment, MEGARRY J said that the house was registered at the Land Registry
with a good leasehold title. The lease was for 60 years to run at a ground rent
of £8.50 a year. With slight intermissions, the plaintiff and the defendant
cohabited as man and wife, without marrying, from May 1966 until the final
rupture in November 1972. The plaintiff was a married woman until there was a
divorce some two years ago. The defendant was a widower until he remarried in
May 1973. The plaintiff and the defendant first cohabited for over three years
at a council house in Thetford, Norfolk. There was then a break of some three
months, after which the parties cohabited for a little over a year in a
furnished flat in Morden. The landlord of the flat wanted to obtain possession
of it, and the parties arranged to buy the house now in dispute. This purchase
was assisted by a payment of £250 made by the landlord in order to get
possession of the flat, and a loan of £300 by him, secured by a promissory note
signed by the defendant and providing for repayment in the two years from
November 16 1970. The contract for the purchase of the house was dated December
10 1970, and the plaintiff and the defendant were both parties to it under the
description of ‘the purchaser.’ The Land
Registry transfer was dated December 21 1970, and the plaintiff and the
defendant were shown as being the transferees. The transfer was registered on
January 14 1971. There was nothing in the contract, the transfer or the entry
in the register which stated whether the parties took in equity as joint
tenants or as tenants in common. The purchase-money was stated to be £6,250,
and the balance of £5,700 required to make up the £550 provided by the landlord
of the Morden flat to the requisite £6,250 was provided by a registered charge
to a building society. In fact, as the completion statement showed, the vendor
made a last-minute reduction of price by £100, but the transfer and land
certificate ignored this. The charge to the building society was dated December
21 1970, and the plaintiff and the defendant were both parties to it as
borrowers.
Throughout
these documents the plaintiff was described as being the defendant’s wife and
as bearing his surname. It was common ground that the legal estate was vested
in the parties as joint tenants, and the dispute was about the equitable
interest. It was agreed by counsel that any question as to the quantum of the
plaintiff’s beneficial interest, if she had one, should be left for an inquiry
in chambers or for future proceedings before him (his Lordship). The evidence
was conflicting in a number of respects, but many of the conflicts were on matters
which, however much they went to credit, either did not affect the issues the
court had to decide or else had little bearing on them. The plaintiff, of
course, started with the advantage of having the legal estate vested in her
jointly with the defendant, though as she was not married to him she could gain
no assistance from any presumption of advancement, nor could she rely on any
material obligation of support. It was common ground that at all material times
it was the defendant who had made all payments under the mortgage and had paid
the ground rent, rates, insurance premiums and all gas, electricity and
telephone bills. However, Mr Tibber contended that in certain respects the
plaintiff had contributed directly to the cost of the house and that in other
respects she had made substantial indirect contributions. The first claim to a
direct contribution lay in the £550 paid by the defendant’s former landlord. He
(his Lordship) thought that on balance there was not enough to show that any of
the £250 or the £300 (which was repaid by the defendant) was ever the
plaintiff’s money. Secondly, Mr Tibber pointed to the undoubted fact that both
the plaintiff and the defendant had at all times been liable to the building
society for the whole of the £5,700 and also for the other obligations of the
mortgage. Counsel cited Cowcher v Cowcher [1972] 1 WLR 425 for
the proposition that he who assumed liability under the mortgage provided the
money lent on the mortgage.
Mr Scott’s
answer was that whatever the position between the borrowers and the building
society, what mattered was the position inter se between the borrowers.
As already stated, it was common ground that the whole burden of making the
payments under the mortgage had been assumed from the start by the defendant.
In these circumstances, said counsel, in a dispute between the plaintiff and
the defendant, it was quite unreal to regard the plaintiff as having provided
half (or any other fraction) of the £5,700 that had been lent, for, as between
the parties, she had never assumed, or sought to assume, any of the burdens. He
(his Lordship) accepted this submission and held that the plaintiff had not
directly provided any of the purchase price. That left Mr Tibber with his
contentions as to indirect provision, which depended in the main upon there
having been a division of financial obligations in relation to the house. On
any footing, Mr Tibber said, the plaintiff had relieved the defendant of
payments for food and some clothing which otherwise the defendant would have
had to bear, and this enabled him to make the mortgage repayments, which came
to £45.60 a month. He (Megarry J) observed that the defendant did not seem to
have been very fortunate in making his repayments, as £5,774 was now
outstanding, and this was £74 more than the sum which was lent over 3 1/2 years
ago. The payments had thus not even succeeded in keeping pace with the interest
due and had not so far paid off any of the capital indebtedness. On any
footing, the plaintiff, as the evidence stood, could not have contributed even
indirectly towards discharging any of the mortgage. It was necessary for him
(his Lordship) to remember that he was dealing with an unmarried couple and not
with man and wife. Mr Scott very properly accepted on the authority of Cooke
v Head [1972] 1 WLR 518 that this relationship was no bar to the
acquisition of a beneficial interest where each had contributed to the purchase
in one way or another. The question however, was whether there had been any
such contributions; and in considering that, he (Megarry J) must bear in mind
that a man owed an obligation to his wife to maintain her and provide a roof
over her head which he did not owe to a woman who was not his wife. In essence,
he (his Lordship) could not see that quoad property rights there was any
real difference whether the two persons were of the same sex, or different
sexes, or whether or not there was any sexual relationship between them,
provided always that they were not man and wife. He would add that he said
nothing about the case where there were any children of the relationship.
In the present
case, of course, the property was vested in the plaintiff and the defendant,
and the plaintiff could claim the support of the legal title. At first sight it
might well be that if the entire beneficial interest was intended to be the
defendant’s it was a very strange thing for him to have had the legal estate
put into their joint names. As the creation of a trust for sale under which the
defendant was the sole beneficial owner seemed pointless, the prima facie
inference must be that the transaction was intended to pass some beneficial
interest to the plaintiff, whether by gift or otherwise: consider Fowkes
v Pascoe (1875) 10 Ch App 343. The defendant’s explanation in his
affidavit was that the purchase and mortgage were put in the joint names merely
as ‘a matter of form.’ Pressed to
amplify this, he was unable to give any coherent explanation. He (his Lordship)
thought, however, that on other evidence the true explanation emerged. This was
that the defendant’s earnings were not large enough to enable him to obtain a
building society mortgage on his own. On the other hand, the joint earnings of
the plaintiff and the defendant did suffice. The plaintiff was accordingly made
a party to the contract, the mortgage and the transfer in order to enable a
sufficient loan to be obtained and not with the object of making a gift to the
plaintiff of any share of the beneficial interest.
Mr Tibber
contended, in effect that the court should not strain unduly to discover what
had happened when the property was acquired, but need do no more but see what
was a fair result to produce on the state of affairs when the property was
sold. What he (his Lordship) had to apply, however, were the equitable principles
relating to trusts. In working out those principles in domestic situations it
might often be necessary to adopt a somewhat broad approach, but that was quite
different from ignoring those principles and aiming only at a process of rough
justice or, for that matter, seeking to award a quantum meruit to an
estranged wife or a discarded mistress. The question was what interest in
property, if any, the claimant was entitled to, and in this the starting point
must always be the footing on which the property was acquired, however much
this might be explained or modified by subsequent events. The plaintiff alleged
that there was an oral agreement between her and the defendant for the
defendant to pay the outgoings on the house and for her to pay for the food and
certain clothing, and that she carried out this agreement. She also alleged
that the agreement was that the house should be owned jointly. She was very
properly pressed in cross-examination on these matters, and he (Megarry J)
found her answers unconvincing. There was much difficulty in disentangling what
she said had been agreed upon and what she had inferred. He fully accepted her
explanation that it was very difficult after all this time to remember what was
said; that, however, merely reinforced the uncertainty. He was very far from
being satisfied that there ever was any agreement or common intention, or any
consensus, that the plaintiff was to have any property interest in the house,
either of a determinate amount, or of an indeterminate amount which was to
await quantification either in relation to what payments were actually made by
each party or otherwise.
In the end, it
seemed to him (his Lordship) that subject to one point, both on the evidence
and on the law the plaintiff’s claim to any proprietary interest in the house
must fail and so must her claim for an order for sale, so that the originating
summons would be dismissed. The point referred to was the plaintiff’s liability
to the building society under the mortgage. He (Megarry J) had dealt with the
case on the footing that as between the plaintiff and the defendant the sole
liability on the mortgage was the defendant’s. Yet although that was the basis
on which the parties had proceeded, there had been no formal recognition of
this basis. Accordingly he did not think it would be right to make an order in
the defendant’s favour until he had heard whether the defendant was offering
any formal indemnity for the plaintiff against all liability on the mortgage.
Subject to that, the result must be as he had stated. Similarly, subject to
anything counsel might have to say, the counterclaim succeeded and the
defendant was entitled to the declaration and order claimed.
Mr Scott said that he gave an undertaking that a
suitable indemnity would be given; he also accepted that he could not have an
order that the plaintiff join in transferring the property to the defendant
until she was relieved as between herself and the building society from
personal obligation. His Lordship made an order for costs against the
plaintiff, who was legally aided, the order not to be enforced without the
leave of the court. He adjourned the hearing of an application by Mr Scott for
payment of the defendant’s costs from the legal aid fund.
