Family arrangement between couple and wife’s parents–Mortgage taken out by couple alone without capital contribution from parents–No evidence that parents had or could have had reasonable belief that they were acquiring a beneficial interest in house out of payments of £5 a week
In this action
Mr Peter Edward Hannaford and his wife, Mrs Lilian Kathleen Hannaford,
registered proprietors of 15 Dales View Road, Ipswich, sought an order under
section 82 of the Land Registration Act 1925 that a caution against their title
registered by the defendants, Mr Frederick William Septimus Selby and his wife,
Mrs Lilian Violet Selby, be vacated. Alternatively they sought such an order
under the general jurisdiction of the court. They also sought an order for
possession of the property.
Mr L Hoffmann
(instructed by Sharpe, Pritchard & Co, agents for Westhorpe, Ward &
Catchpole, of Ipswich) appeared for the plaintiffs, and Mr G Hill (instructed
by Block & Cullingham, of Ipswich) represented the defendants.
Giving
judgment, GOULDING J said that this was one of those unhappy cases which owed
their origin largely to the present housing shortage. Mr and Mrs Selby were the
parents of Mrs Hannaford. Since the autumn of 1974 the parties had been living
together as one family with the two schoolgirl daughters of the plaintiffs in a
semi-detached house, 15 Dales View Road, Ipswich. The presence in the house of
the defendants arose from an arrangement made between them and the plaintiffs
shortly before the latter bought the house. The plaintiffs were then living in
a village outside Ipswich and wanted to move into the town. The defendants were
living at Edmonton in North London and saw advantages in moving away from
London. What was decided after family discussion was that the plaintiffs should
buy the house and the defendants would move in to live with them and the two
children. The house was a three-bedroomed one with two living rooms, not
counting the kitchen. The parties were to live as one family. The defendants
were to pay £5 a week, a figure arrived at as one-third of £15 a week, which
was estimated as the approximate outgoings of the plaintiffs in respect of
mortgage instalments together with rates. Living expenses were to be fairly
shared, and Mr Selby, whose one absorbing hobby was gardening, was to put the
garden at 15 Dales View Road in order and cultivate it for the benefit of the
family at large. Against the background of that proposed arrangement, the
plaintiffs bought the house for £9,500. Exactly one-half of that sum was provided
out of the plaintiffs’ own money derived from the sale of their previous house.
The remainder was borrowed by the plaintiffs as joint mortgagors from the Leek,
Westbourne & Eastern Counties Building Society. The initial rate of
interest was 11 per cent per annum. Repayment was to be made by monthly
instalments of £47.10. The purchase was completed by the plaintiffs. They and
the defendants moved in and the arrangement was carried into effect.
For something
like a year the parties seemed to have lived reasonably amicably. Then friction
began, and the usual difficulties arose that were experienced where two
generations had to live together–indeed three generations here had to live
together–and where mother and daughter had to share the use of a kitchen. It
was agreed in evidence by all four parties that the present family atmosphere
in the house was intolerable. The plaintiffs early this year came to the
conclusion that they must put an end to the unsatisfactory situation. They
formed the opinion that the only, or at any rate the most hopeful, way of
setting about it was to sell the house and buy another house themselves, where
they would live with their daughters without the defendants. About the end of
January or very early February, Mr Hannaford told Mr Selby of his intention and
its reason. Mr Selby, according to Mr Hannaford’s evidence, said, ‘You will
have to find me a place to live.’ The
plaintiffs went ahead and put the house in the hands of an estate agent. An
offer was quickly obtained, and after the usual delay a contract was signed on
March 23 1976 for a sale at a price of £10,750. The court had been told that
the plaintiffs on their side had contracted to buy another house for
themselves. The defendants found themselves in the obvious difficulty of not
knowing where they would live. They took advice, and as a result of what they
were told they registered a caution against the title of the plaintiffs. In
their statutory declarations made in support of the caution they claimed to be
entitled to protection as having a beneficial interest in the proceeds of sale
of 15 Dales View Road, through their having made financial contributions in
respect of the mortgage together with other contributions, financial and
otherwise, in respect of the property. In order to complete their contract to
sell the house the plaintiffs commenced the present proceedings.
It was
important to mention what the situation of the defendants was before they moved
in with the plaintiffs. They had been living in a council house in Edmonton
where no doubt they were enjoying practical security of tenure. They gave that
up in order to come to Ipswich, and brought with them furniture which was their
own property. The leaving of the council house had played an important part in
the able argument of Mr Hill on behalf of the defendants. That fell into two
main branches. First Mr Hill said that the defendants had, as they claimed to
have when they registered the caution, a beneficial interest in the proceeds of
sale of the house, although he did not put it at at more than £50. Counsel
submitted that since, by an arrangement preceding the common occupation of the
house, the defendants undertook the payment of £5 a week, being one-third of
the mortgage instalments and rates, they were helping to buy the house;
moreover, they incurred a detriment by giving up their council house and their
other established circumstances at Edmonton, in the expectation of having an
interest in the new house at Ipswich. It was in the same expectation, it was
submitted, that Mr Selby undertook to work, and did work, in the garden,
supplying the whole family with vegetable produce, on his uncontradicted
evidence, of quite substantial value.
The law on
this kind of topic was summarised in the speech of Lord Diplock in Gissing
v Gissing [1971] AC 886 at 905. In the present case, in his (Goulding
J’s) judgment the evidence did not show that the defendants had or could have
had a reasonable belief that they were acquiring a beneficial
with either of the plaintiffs about who was going to own the house. He took it
for granted that he and his wife would stay in the house for their natural
days. Nothing was said about it. The plaintiffs and the defendants were just
one amicable family who expected to get on together. They did not discuss
breaking up or not breaking up. In the circumstances already mentioned, of half
the purchase money being found by the plaintiffs and the other half being
borrowed by the plaintiffs from the building society, he (his Lordship) could
not see that the defendants had any reasonable justification for believing that
by giving up their security at Edmonton and going to live with the plaintiffs
at Ipswich they were acquiring a beneficial interest in the house. It was true
that the plaintiffs had the £5 a week as part of the money available for
mortgage instalments and rates. But as between the plaintiffs and the
defendants–and that was the important point–it was in his judgment no more than
a contribution to expenses in consideration of being allowed to live with the
plaintiffs in the house. It could not in any reasonable way be regarded as
payment for the acquisition of a capital interest. Similarly the work that Mr
Selby did in the garden did not seem to him (his Lordship) to have been done in
the expectation of acquiring any proprietary interest. It was part of his
contribution week by week, round the year, to the common living of the family,
just as that part of his pay which went to provide their joint food and other
household necessities. The first main branch of the defendants’ case
accordingly failed.
He (Goulding
J) nevertheless did not think it would be right, as suggested at one point on
behalf of the plaintiffs, to regard the whole arrangement between the parties
as something of a purely family arrangement resting in family honour only and
not intended to create any legal rights or liabilities whatever. The
defendants, people in their fifties, were giving up their home and customary
way of life. It was clear they must have expected, and the plaintiffs must have
known they expected, that they would not be turned out of the new home without
reasonable notice to give them an opportunity to find somewhere else. The
circumstances thus made it necessary to imply that the new housing arrangement
was only to be terminated on reasonable notice. According to Lord Devlin in the
case of Australian Blue Metal Ltd v Hughes [1963] AC 74, the
court must look to the circumstances when notice was given in order to see what
length of time was reasonable. It was not unfair to take the date when the
defendants knew that their immediate vacation of the house was required by the
plaintiffs as February 1, provided it was borne in mind that this was only an
approximate date.
Mr Hoffmann
had submitted that three factors should be mainly taken into account in
determining a reasonable notice in the circumstances. First was the time
required by the defendants to find new accommodation. As to that it was clear
from the evidence that efforts had been made by the defendants–not according to
Mr Hoffmann as substantial as they might have been, but certainly by no means
trivial–to find new accommodation without success. Mr Hannaford, a postman, had
himself done what he could. It was clear that in Ipswich it was not easy to
find premises, particularly unfurnished premises, to rent. It was not unlikely
that the defendants, in view of their age, would find it difficult or
impossible to get a substantial mortgage. That aspect pointed to a generous
allowance of time. The second matter mentioned by Mr Hoffmann pointed the other
way–the family atmosphere in the home. There was evidence that the health both
of Mrs Selby and of the Hannaford children was put under some strain by the
unsatisfactory position in the house. Therefore it would be in the interests of
all parties, including the defendants themselves, to make the difficult period
in which they remained as brief as possible. Mr Hoffmann’s third submission was
that the court should remember the fact that the plaintiffs had contracted to
sell the house and the completion date was the next day, April 30. Once that
date was passed, the plaintiffs would be in peril if unable to perform their
own contract of sale, and would also be in a position in which they would be
unable to complete the purchase they had undertaken. It might be that others
would suffer inconvenience and loss.
These last
considerations did not weigh with him (his Lordship) to any appreciable extent.
The plaintiffs decided to sell the house as a means of putting pressure on the
defendants and before the defendants had taken advice or their position had
been fully clarified. The plaintiffs must take the matter as they found it. The
most important consideration was a reasonable chance for the defendants to find
alternative accommodation. Taking the position as to housing as it emerged in
the evidence, he (Goulding J) was of opinion that as at February 1 1976 a
reasonable time would have been six months. He would accordingly give the
defendants until July 31 to leave. So far as the remaining relief sought was
concerned, there was an application for vacation of the caution by way of
rectification of the register. No attempt had been made to operate the special
machinery for dealing with a caution which the landowner desired to challenge.
There had been no argument as to jurisdiction on this point, and in the absence
of authority he (his Lordship) was doubtful whether a caution could or should
be dealt with by way of rectification under section 82 of the Land Registration
Act 1925, which at once gave rise to questions of indemnity under section 83.
He therefore proposed to exercise the general jurisdiction of the court and
order the defendants forthwith to take all steps necessary to procure the
cancellation of the charge. He thought that the claim for possession was
inappropriate in the circumstances, and he would grant a mandatory injunction
directing the defendants to vacate the house on or before July 31 1976.
The
defendants being legally aided, the plaintiffs were given an order for costs,
the order not to be proceeded with without leave of the court.
