Archive for the 'Trusts and Estoppel' Category

Oh dear, oh dear …

Published by Dave on 04/08/2010 in FLW case note and Trusts and Estoppel. 0 Comments

Ashby v Kilduff [2010] EWHC 2034 (Ch) (available on Lawtel and through the Chief [those special powers again]) [edit: now on BAILII too) is about the proprietary consequences of the unhappy demise of the relationship between David Ashby, the former Tory MP, and Roderick Kilduff.  I'm never disposed to feeling empathy with Tory MPs (ex or otherwise) but David Ashby is in an entirely different category (particularly because, if you look at the Standing Committee debates on the Housing Bill 1995-6, he stood up a bit for housing and homelessness rights to the chagrin of other Tory members).  Cast your mind back to the "back to basics" campaign in the early to mid-1990s and you will remember the Sunday Times expose about Mr Ashby having an affair with Dr Kilduff.  They had bought two flats in a small block in Putney (my old stomping ground) and had kitted them out by having the living quarters in one flat and entertaining space in the other flat.

Mr Ashby unsuccessfully sued the Sunday Times for libel (his wife giving evidence against him), Dr Kilduff successfully settled out of court.  Mr Ashby became worried about the Sunday Times coming after him for their costs and also his wife seeking a divorce against him.  In 1995-6, Mr Ashby transferred his interest in his flat to Dr Kilduff, who took out a buy to let mortgage under which Mr Ashby was to be granted an assured shorthold tenancy (which was never signed and, indeed, neither party acted on its terms).  At the trial, there was disagreement about the intention behind this transaction - was it a genuine sale to Dr Kilduff or a sham transaction?  Mr Ashby claimed the latter, supported by his daughter, on the basis of a dinner conversation at a Thai restaurant, although Dr Kilduff disputed that such a conversation took place at the dinner.  Now, it was the case that: money had been paid to Mr Ashby (and had been used to pay off part of his costs to his libel solicitors, Carter Ruck), the sale was at a slight undervalue, Mr Ashby paid "rent" which was to cover the mortgage instalments, Mr Ashby had rekitted out the kitchen in 1996 and the electrics in 2005 (£10k for each), Dr Kilduff paid off the mortgage entirely by 2005 without telling Mr Ashby.  In their executed joint wills, Dr Kilduff left this property to Mr Ashby; Mr Ashby made no mention of any interest in it.

There was also a buy to let property which had been purchased in Manchester in their joint names as beneficial joint tenants.  Mr Ashby paid all the outgoings on the flat and paid the purchase money.  It was their express intention that the Mr Ashby would pay all the outgoings and receive all the rental income as a retirement investment for him.  In their executed joint wills, they each left their share of their interest in this property to each other.  The issue on this property was who was the beneficial owner as mr Ashby claimed the entire beneficial interest?

The relationship between Mr Ashby and Dr Kilduff ended in 2005 in bad circumstances.  Bernard Livesey QC, sitting as a Deputy Judge of the Chancery Division, made pretty devastating findings of fact about each of these parties - on Mr Ashby, "... he would in my judgment be quite prepared to tell a pack of lies if he believed it was just for him and in his interests to do so, in which case he could quite easily persuade himself of the truth and accuracy of an inaccurate account" (at [49]); on Dr Kilduff, “[Mr Ashby] was a generous giver in the extreme and Dr Kilduff appears not often to have turned down an opportunity to receive” and he “… has used all means at his disposal to argue his case, even to the extent of disclosing matters which he would know would be likely to humiliate Mr Ashby and gravely injure his feelings” (at [51]-[52]).

The Deputy Judge then made findings of fact which effectively disposed of the matter:

(1) the purported sale of the flat was genuine and there was no obligation on Dr Kilduff to allow Mr Ashby to remain in the property for the rest of his life.

(2) Mr Ashby paid rent and this was shown by reference to his cheque book pay stubs, movement of money by standing order between bank accounts, income tax and CGT returns.

(3) Mr Ashby’s evidence to this court about his evidence in the matrimonial proceedings was “highly unlikely” to have been accurately reported.

(4) The discussion in the Thai restaurant probably did not take place (and did not appear in their witness statements for this trial).

(5) Whether or not the assured shorthold (reported as a shorthold tenancy agreement protected by the Rent Acts, shurely a mistake) was technically valid, neither party was “troubled by the niceties of the obligations”, it negated Mr Ashby’s claim for a beneficial interest.

(6) The kitchen expenditure was too long past to be of any use (and preceded the matrimonial proceedings)

(7) The £10k on electrics was a different matter and created a proprietary estoppel interest in Mr Ashby’s favour on the basis of an implied representation by Dr Kilduff (by which one presumes the Deputy Judge meant that he stood by whilst Mr Ashby made the improvements, a la Lord Wensleydale in Ramsden v Dyson (1866) LR 1 HL 129).  (An argument that it gave him a CT under Stack was disposed of by the Deputy Judge saying, mysteriously, “I do not find the ration of this case entirely easy to reconcile to the facts of the present case”: [71]).  I cannot say that the Deputy Judge dealt with these points particularly well, but, equally, I can’t see either party appealing.  The Deputy Judge left it to the parties to agree how to satisfy the equity (either repayment or rent free licence for a period).

(8) As regards the Manchester property this was held on an express beneficial joint tenancy, subject to a trust that Mr Ashby was responsible for all outgoings and entitled to the income from the property during his lifetime.  Again, this is not particularly well dealt with.  The starting point must be right (Goodman v Gallant is the authority I use [but take your pick], the Deputy Judge didn’t bother with authority), but superimposed on that is a further express (presumably) sub-trust (hmm, formalities? effect on express jt?).

Intention, intention, intention

Published by Dave on 19/07/2010 in FLW case note, Housing law - All and Trusts and Estoppel. 0 Comments Tags: , , , .

Wright v Wright [2010] EWHC 1808 (Ch) is a near perfect example of a fundamental principle of property law, which we tutors seek to ingrain into our students (mostly, it must be said, with limited success, having looked at hundreds of exam scripts), that intention is what determines the type of interest created or transferred (trust, gift, loan, bailment etc).

The circumstances were also rather unfortunate.  Anthony (Tony) Wright had built up a successful battery business, and sold it to another company for £2.3 million; he joined the new company but, in breach of covenant, allegedly set up a competing battery business.  The new company claimed damages against him of up to £12million.  From here, it all went pear-shaped for Mr Wright.  He began to move his assets around amongst his family, put cheques made out with his initials into his son’s bank account (and his son conveniently had the same initials as him), bought a house in his name for his son, divorced his wife with a financial settlement in her favour – I could go on but you get the picture.  Unfortunately, his now ex-wife hooked up with somebody else, so that any “reconciliation” could not take place, and there must have been a humungous family row because his son sided with his mum after criticism of the son’s management of another company (and the daughter with her dad).  This case, then, concerned whether Tony had made trusts, gifts or loans to his son.  The facts could all get quite complicated but let me cut them short – Tony’s case was that he had done all this, in essence, as part of a scheme to get his assets out of his hands and protect them from any judgment which might be obtained against him.

The judge, HHJ Cooke, could have got all resulting/constructive trusty, but instead (perhaps remembering his Maitland) essentially went through each item of property in dispute looking for the relevant parties’ intention.  Tony is really in trouble here, because his statements in this case were in conflict with his statements in the other case against him, and HHJ Cooke had to give a self-incrimination warning ([22]-[23]).  But, and this is what makes this case a good teaching tool, despite Tony’s assertion that “anyone can change their intention”, the key point to look at intention was the time of the creation of the interest.  In seeking to undo the court order vesting his share of the former matrimonial home in his wife, Tony said that his reason to do so was to protect his assets as part of a collusive arrangement with his then wife.  But the problem here was that, even if that were their intention, “It cannot be open to the parties to litigation to agree in advance with each other that they will procure an order from the court, but that the order will not in fact produce the legal effect it would ordinarily do” (at [34] – in passing, it would be interesting to know if Tinsley v Milligan was cited to HHJ Cooke but that is neither here nor there, I guess); they could always make an arrangement after the court order, of course.  So the outcome was that HHJ Cooke generally found against Tony and that he held property on trust for the son (who was also entitled to equitable compensation for breach of trust by taking a loan out on one of the properties held on trust for the son) or by way of gift to the son..

Although one might empathise with Tony, schadenfreude, I am afraid, has got the better of me so my feeling when reading this case was “what goes around comes around”.

Less than ambulatory intentions

Published by NL on 31/05/2010 in FLW case note, Housing law - All and Trusts and Estoppel. 8 Comments Tags: , , , , .

Kernott v Jones [2010] EWCA Civ 578

This was the Court of Appeal hearing, on a second appeal, of a case on equitable interests in a property. We reported the first appeal to the High Court and were uneasy about the outcome of that appeal, which seemed to turn more on an idea of fairness than on any of the scant facts in imputing intention as to the distribution of equitable shares. The Court of Appeal judgment, while perhaps harsher on one of the parties, goes some way towards re-establishing certainty for those who, foolishly but inevitably, purchase property jointly while remaining unmarried.

The facts are set out in the earlier post. Ms J and Mr K bought the property together and lived there for 9 years. In 1993, Mr K moved out and in 1996 bought another property in his sole name. Ms J remained in the property. She paid the mortgage and outgoings wholly after 1993. It was common ground that up to the point Mr K moved out, the property was held in equal shares (although it appears on the facts that Mr K had made a greater overall contribution to the value of the property during that time). The first instance Judge had found that the interests in the property had changed and awarded 90% to Ms J and 10% to Mr K. This was upheld in the High Court on the basis that the separate finances after 1993 passed the Stack v Dowden [2007] UKHL 17 burden of displacing the presumption of equal shares and that, where there was scant or no evidence as to intention, the parties could be taken to intend that the shares would be whatever the court decided was fair.

The issue for the Court of Appeal, as Wall LJ put it, was:

Where; (1) an unmarried couple has acquired residential accommodation in joint names, which by common agreement was held by them beneficially in equal shares as at the date of their separation, and; (2) one party (here the respondent) thereafter; (a) continues to live in the property; and; (b) assumes sole responsibility for its continuing acquisition and maintenance – i.e. not only supports herself and the parties’ children but pays the mortgage and all the outgoings (including repairs and improvements) – can the court properly infer an agreement post separation that the parties’ beneficial interests in the property alter or (to use the phrase coined by Lord Hoffman in argument in Stack v Dowden [2007] UKHL 17. [2007] 2 AC 432) become “ambulatory”, thereby enabling the court – as here – to declare that, as at the date of the hearing before the court, the beneficial interests in the property are held other than equally?

By a majority, the Court of Appeal found that the answer was no.

Wall LJ considers Lord Chadwick’s formulation in Oxley v Hiscock [2004] EWCA Civ 546, :

In those circumstances, the second question to be answered in cases of this nature is “what is the extent of the parties’ respective beneficial interests in the property?” Again, in many such cases, the answer will be provided by evidence of what they said and did at the time of the acquisition. But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have – and even in a case where the evidence is that there was no discussion on that point – the question still requires an answer. It must now be accepted that (at least in this Court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property. And, in that context, “the whole course of dealing between them in relation to the property” includes the arrangements which they make from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home.

Without anything further, this would have been a basis to dismiss the present appeal as the Judge found the 90:10 split on the basis of fairness and on taking into account the whole course of dealing between the parties. However, Stack v Dowden is not only more recent, but a House of Lords decision. It also deals specifically with joint interests, where Oxley didn’t. He notes Baroness Hale’s formulation that holding in joint title must be taken as giving an intention of equal shares, and that an assertion to the contrary must be proved. Further, he notes Baroness Hale’s view that:

61. [...] the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended. Second, therefore, it does not enable the court to abandon that search in favour of the result which the court itself considers fair. For the court to impose its own view of what is fair upon the situation in which the parties find themselves would be to return to the days before Pettitt v Pettitt [1970] AC 777 without even the fig leaf of section 17 of the 1882 Act.
62. Furthermore, although the parties’ intentions may change over the course of time, producing what my noble and learned friend, Lord Hoffmann, referred to in the course of argument as an “ambulatory” constructive trust, at any one time their interests must be the same for all purposes. They cannot at one and the same time intend, for example, a joint tenancy with survivorship should one of them die while they are still together, a tenancy in common in equal shares should they separate on amicable terms after the children have grown up, and a tenancy in common in unequal shares should they separate on acrimonious terms while the children are still with them.

Wall LJ then spends rather more time on and expresses sympathy for Lord Neuberger’s dissenting view in Stack v Dowden that the starting point must be resulting trust from contributions to purchase and, alternatively, in a constructive trust approach that there should be no ‘imputed’ intentions, where they could not be inferred. Again, ‘fairness’ is not the appropriate yardstick for reaching a conclusion as to the parties’ inferred or imputed intentions.

On the facts of this case, both an Oxley v Hiscock and a Stack v Dowden approach should reach the same end point. Oxley would find an intention to share but no definition of the interests. Thus an express joint intention to share should result in 50:50 interest. Stack would start from the presumption of joint names meaning joint (equal) interest and without anything further to show changed intentions, the passage of time is not enough:

There has to be something to displace those interests, and I have come to the conclusion that the passage of time is insufficient to do so, even if, in the meantime, the appellant has acquired alternative accommodation, and the respondent has paid all the outgoings. In my judgment, the appellant has a 50% interest in the property, and both the judge and the deputy judge were wrong to conclude otherwise.

Rimer LJ concurs with Wall LJ, emphasising Baroness Hale’s view in Stack v Dowden that while the whole course of conduct between the parties should be considered, “the search is ‘for the result which reflects what the parties must, in the light of their conduct, be taken to have intended.’ In the same paragraph she said that it is not open to the court to abandon that search ‘in favour of the result which the court itself considers fair’”. Rimer LJ confesses himself unsure what Baroness Hale meant by ‘imputed intentions’ when saying that the Court must seek the parties’ intentions, whether ‘actual, inferred or imputed’. If it is not a synonym for ‘inferred’ then it is inconsistent with her insistence that the goal is to find the parties’ intentions, which must be what they actually meant. Accordingly, Rimer LJ does not see Stack as authority for imputing an intention where none was expressed or can be inferred, even without Lord Neuberger’s ‘demolition’ of the idea in his dissenting judgment.

The facts of this case

cannot, however, in my view without more – and there was nothing more of relevance – have justified the inference of a joint intention that Ms Jones should have some, presumably, steadily increasing beneficial share in the house as the years rolled by (I put it that way because it is improbable that the judge would have arrived at the same beneficial division if he had been deciding the case in, say, 1998: his assessment of a ‘fair and just’ solution would surely then have required him to give Ms Jones a smaller share than he gave her in 2008).

Jacob LJ dissents. On his view the appeal should only be considered by the Court of Appeal if the Court below applied the wrong legal test, as otherwise, the issue is solely one of drawing inference from the primary facts and there was no sign that the findings below were perverse.

The Judge at first instance had applied the correct legal test, starting from the presumption of joint interest, considering the ‘whole course of conduct’. There was no reason for either the High Court or the Court of Appeal to interfere with this.

Appeal allowed and the interest in the property given as 50:50 as tenants in common.

Wall LJ, noting that there was no evidence that the parties had been advised on the meaning of joint tenancy when first purchasing, adds some words of warning:

I described this case as a cautionary tale. So, in my judgment, it is. The purchase of residential accommodation is perhaps the single most important financial transaction which any individual transacts in a lifetime. It is therefore of the utmost importance, as it seems to me, that those who engage in these transactions, and those who advise them, should take the greatest care over such transactions, and must – particularly if they are unmarried or if their clients are unmarried – address their minds to the size and fate of the respective beneficial interests on acquisition, separation and thereafter. It is simply impossible for a court to analyse personal transactions over years between cohabitants, and the costs of so doing are likely to be disproportionate in any event. Cohabiting partners must, it seems to me, contemplate and address the unthinkable, namely that their relationship will break down and that they will fall out over what they do and do not own.

Comment
While this is undoubtedly a somewhat harsh outcome for Ms J, as the Court notes, it does re-establish some certainty for those involved in or advising on these situations. What is particularly interesting is that the approach of both Wall LJ and Rimer LJ is to limit or deny any suggestion that Stack v Dowden allows for intentions to be imputed, that is ascribed to the parties by the court, rather than inferred. Inferred intention requires some evidence from the course of conduct that the parties did intend a certain division (or change in share). Where, as here, there is simply not enough evidence to suggest that the parties’ intentions changed, it is not for the court to consider that the course of conduct, in fairness, allows it to impute that intention to them. The presumption in Stack v Dowden cannot be overcome that way.

Also worthy of note is that separation of finances, although a key element in Stack, is not enough per se to overcome the presumption – although difference here was that Ms J was seeking to argue a change from an admitted intention of equal shares, where Stack was an argument that the intention from the start was unequal shares.

Now, are the conveyancers advising properly on joint tenancy?

Rowena Meager also has a comment on this case.

Family Feuds and Estoppel

Published by David Smith on 25/03/2010 in FLW case note and Trusts and Estoppel. 0 Comments

Cook v Thomas & Thomas [2010] EWCA Civ 227

This case was well describd by the Court of Appeal as “a most unfortunate and regrettable dispute”.

The facts were as follows. C is the sole legal owner of a small ara of farmland with farmhouse in Wales by survivorship from her husband. It is currently also occupied by her daughter and her husband, Mr & Mrs T. Prior to her marriage Mrs T (or Miss T as she then was) helped C’s husband to farm cattle for milk on the land, a small local business carried on in his spare time, and also operated a small riding stables. Her marriage to Mr T ended this relationship and caused a siginificant and enduring family rift. Mr & Mrs T therefore occupied a mobile home elsewhere and communicaiton was limited. On the death of C’s husband Mr & Mrs T attended the funeral and a degree of rapprochment was achieved. The upshot of this was that planning permission was sought to place a new mobile home on land near the farmhouse and that Mr & Mrs T moved into it. The planning permission was partially granted on the basis of C’s statement that she needed assistance in her home that Mr & Mrs T would apparently provide although it was asserteed by C in Court that this was an exaggerration. After storm damage tothe mobile home Mr & Mrs T later moved into the house itself. Various works were carried out and paid for on the house by C and also by Mr & Mrs T. Mr & Mrs T were also permitted to run the farming operations entirely as they saw fit and for their own benefit. This domestic bliss collapsed after an argument over a landrover and since that point the partis had been living in the house but entirely seperately.

The foundation of Mr & Mrs T’s case was four statements made to them at different times which are referred to as the four promises. They contended that these amounted to an understanding that they could remain in the farmhouse until C died and then that it would be given to them. They had acted to their detriment in relaiance on the promises by doing works to the house and providing companionship and a degree of care to C.

The original case was heard by Mr Recorder Eyre sitting in Hereford County Court and it was this decision that was the subject of the appeal. He had sat for two days to hear the evidence of the three parties and a fourth witness. It had not been easy for him, particularly because of the deafness of C and he had therefore been concerned to ensure that she was at all times able to understand the proceedings and the questins being put to her, a fact commended by the Court of Appeal. He had made findings as to the reliability of all the main witnesses, holding that while they clearly believed what they said there was areas in which their evidence had been coloured by their personal animosity toward one another and their views as to what was right. He was therefore faced with the unenviable task of making untagling the evidnce and making findings of fact regarding each of the four promises from a number of self-conflicting and inconsistent positions. His judgement was described by the Court of Appeal as an “ admirably careful and considered judgment”.

The leading judgement was given by Lord Justice LLoyd, Laws and Sullivan assenting. While a number of different arguments of various sorts of estoppel, constructive trust and unjust enrichment were advanced the Court of Appeal considered that it was a case of proprietary estoppel and that if Mr & Mrs T could make their case on that basis “they cannot do so under any other label”. Accordingly, the playing field was set.

Mr Stenhouse, on behalf of the appellants, did not criticise in any respect the judge’s overall assessment of the witnesses, set out at paragraphs 30 to 38 of the judgment, which I have summarised above. Nor did he challenge in any material respect the summary of the law which the judge had set out at paragraphs 19 to 29. He argued that the judge had not in all respects applied the law correctly, even though he had stated it correctly. The main burden of his appeal, however, was on the judge’s findings of fact. He contended that the judge’s findings about the four promises, and about how they were taken and what was done in reliance on them, were against the weight of the evidence.

Mr Stenhouse did not have a great day out. The Court was critical of his grounds of appeal, holding that they did not properly comply with the practice direction to CPR 52 as they were primarily related to findings of fact rather than of law. They were less than complimentary about his skeleton argument and oral submissions as well.

Ultimately, the Court felt that the appeal revolved around the findings of fact made by the Recorder. It addressed a number of the well-accepted authorities on the ability of an appellate Court to overturn findings of fact made by a lower court which has had the benefit of hearing the evidence, particularyl when the evidence is of a detailed nature and involves handling other issues involving the understanding of the witnesses. It was certainly not prepared to hold, as Mr Stenhouse argued, that the transcript itself provided showed that the Judges findings were wrong, gave incorrect weight to the evidence, were unjustified and also provided enough for the Court of Appeal to substitute the proper findings.

The Court also referred to the now leading case of Thorner v Major and pointed up the vital flaw in the case of Mr & Mrs T that, irrespective of promises made, it was hard to see what detriment they had suffered in reliance on them given that they had lived, rent free, for some considerable time.

Mr Stenhouse finally argued that the Recorder had made an unjusitified decision by not specifically adressing in his judgement the four promises and the resulting actions of Mr & Mrs T as a whole and had also taken into account irrelevant factors by considering works on the property paid for by C. The Court of Appeal disagreed that the Recorder had to provide detailed further reasoning on the overall picture above and beyond his reasoning on each of the four promises in order to demonstrate that he had considered the overall picture. It also found the argument inconsistent as in looking at an overall picture it was surely relevant to take into account items that C had paid for herself.
All in all then a case which turns on its facts and does not really provide any useful point of law. It is perhaps as much a lesson, with apologies to Mr Stenhouse, on how not to conduct an appeal and a reminder of the reluctance of the Court of Appeal to overturn findings of fact made by lower courts.
Permission to appeal to the Supreme Court was denied.

Estoppel and Laches in Looe

Published by Dave on 24/03/2010 in FLW case note and Trusts and Estoppel. 0 Comments

Lester v Woodgate [2010] EWCA Civ 199 is a wonderful example of a neighbour dispute getting out of hand (so out of hand, in fact, that indemnity costs were awarded against the Claimant, in the Truro County Court,  in “an exemplary use of the power to mark the court’s disapproval of the use of litigation to intimidate”, Sedley LJ at [53]).  It concerns a strip of land between a couple of houses in Looe, Cornwall (a nice place where I’ve been known to holiday, but will stay away from the locals in the future).  In 1980, a previous claim was settled between the parties’ predecessors in title allowing the Claimants’ predecessors a right of way by foot and using a wheelbarrow (I kid you not) over the strip of land.  A concrete ramp was constructed to facilitate the use of the easement.  The owner of the servient land proceeded to demolish the ramp and create a car parking space, which effectively made the use of the right of way impossible.  The then owner of the dominant land objected to the dumping of rubbish but did not apparently object to the creation of the car parking or the destruction of the ramp.  The servient land was sold in 2000 to the Defendants who, in answer to preliminary enquiries, were told that there was no neighbour dispute as, at that time, there was none.  In 2005, the Claimants took the dominant land, knowing that the easement was disputed.

The Claimants then brought a claim for the right of way and (a lot of) damages.  The Defendants defended on the basis of laches and estoppel.  In the County Court, the Recorder seems to have assimilated those defences into one general doctrine and debarred the Claimants’ claim.  In a careful judgment in the CA, Patten LJ separated out the defences, pointing out that, although similar, they were rather different partly because laches would not necessarily have prevented the Claimants from pursuing the claim because of the inaction of their predecessors in title (although that would have been put into the mix, citing Nwakobi v Nzekwu [1964] 1 WLR 1019, 1024, Viscount Radcliffe).  On the other hand, estoppel would provide a complete defence to the Claim brought by the current Claimants.

Patten LJ has an enormous amount of ground clearing to do on estoppel by acquiescence and does it with some aplomb.  In particular, the problem of Fry J’s well-known five probanda in Willmott v Barber (1880) 15 Ch D 96, at 105, which has bedevilled this area in the past, is again at stake here because eg it was not known whether the Defendants’ predecessor in title had made a mistake as to his legal rights (probanda 1).   But we have travelled some distance since Fry J’s restrictive probanda were uttered (Taylors Fashions Ltd v Liverpool Victoria Trustees Ltd [1982] 1 QB 133, of course, being the most pertinent authority, but others are cited), and Patten LJ said that the court was able “to take a flexible and very fact-specific approach to each case in which estoppel by acquiescence is relied upon” (at [39]).  The overriding consideration is, of course, unconscionability but the underlying principle here was stated as follows:

If the claimant’s conduct at the time takes the form of encouraging the defendant to believe that his otherwise tortious interference with the claimant’s property will be waived and not objected to and, in reliance on that, the defendant subsequently acts in a way which can be characterised as detrimental then the position is, I think, different from the facts considered in Ramsden v Dyson and the court does then have to decide whether the causative effect of that conduct is sufficient to bar the enforcement of the legal right. (at [40])

The basic point in this case was that the then owner of the dominant land did not complain about the construction of the parking space and the destruction of the ramp; they only complained about the dumping of the rubble.  They thus stood by, so to speak, while their rights were being interfered with.  The Recorder established the estoppel by holding that the property had been sold to the Defendants without notice of any pending dispute about the right to use the parking spaces, which was also accepted by Patten LJ.  The estoppel was therefore established and it was perfectly proper for it to be used as an equitable defence to the claim.  According to Patten LJ, the same result would have occurred if the matter had pursued only on laches (although that must have been a bit more tricky).

Proprietary Estoppel: Detriment and Remedy in the Privy Council

Published by Dave on 18/02/2010 in FLW case note, Housing law - All and Trusts and Estoppel. 0 Comments Tags: , .

In Henry and Mitchell v Henry [2010] UKPC 3, the Privy Council have given further consideration to the doctrine of proprietary estoppel.  The judgment of the PC was delivered by Sir Jonathan Parker and it will be of particular interest as it demonstrates the continuing importance of the Court of Appeal’s excellent judgment in Gillett v Holt [2000] EWCA Civ 66 as well as raising (without deciding) the interesting issue of the remedy when section 116, LRA 2002 is in issue in relation to third party buyers after the estoppel has been established.

In summary, the facts are that Geraldine Pierre, who people referred to on St Lucia simply as “Mama”, allowed Calixtus Henry’s grandmother to build a house on her land and live there.  Calixtus was born there and continues to live there to this day.  Mama visited Calixtus’ plot daily and treated him like a son.  Mama was regarded as such because of her refusal to leave St Lucia and for her willingness to let people live on her land in exchange for working on it.  Calixtus was the only man up to the task.  His evidence was that “Mama stated many times to me … that she would leave the land for those that worked the land and for those that cared for her in her home country”.  Mama also promised him that because he lived on the land, cultivated it, and cared for her, that he would be given her share of the land on her death.  The plot provided food for Calixtus and his family, as well as Mama; that he took food to her and sold any leftovers.  Mama left her share in her will to Theresa Henry.

At first instance, the judge found that Mama had made a clear representation to Calixtus but that Calixtus had not acted to his detriment because he had lived on it rent free for decades, it had been his source of livelihood, and he had reaped its benefits.  Further, his interest could not bind the subsequent purchaser of the land.  The Court of Appeal found that Calixtus had acted to his detriment and awarded him effectively Mama’s share of the property, his “expectation interest”.

In the Privy Council, the issue was as to how the principles of proprietary estoppel should apply in this case.  The question was whether Calixtus had acted to his detriment.  The Board said that the process of deciding whether there had been sufficient detriment was to weigh up the advantages and disadvantages suffered by Calixtus in reliance on Mama’s promises.  The process, in effect, is similar to a proportionality assessment (as to which see below).  The Board followed the approach taken in Gillett that, although the criteria for establishing a claim in proprietary estoppel can be viewed individually, they are often intertwined and, in this case, that was certainly so.  The Board was accordingly required to revisit the question of detriment and found that because he remained working on the land (unlike others), caring for Mama and providing food for her, and effectively depriving himself of the opportunity for a better life elsewhere Calixtus had established detriment and his equity.  He had opted for a “hard life, in which he has had to struggle to make ends meet and to provide for his family, in circumstances where more attractive prospects beckoned elsewhere.

Calixtus had an overriding interest, which bound subsequent purchasers.  It was argued, drawing on Gray and Gray’s excellent Elements of Land Law at para 9.2.93, that proprietary estoppel connotes an inchoate remedy which can be satisfied in a number of different ways including the payment of money depending on all the circumstances of the case.  Section 116, although simple in utline, is really rather a tricky provision because although the equity arises when the detriment has been done, that does not actually affect the potential range of remedies.  In relation to the equivalent provision to section 116, the Board found that it did not arise in this case because it had not been originally pleaded.  However:

The Board does not rule out the possibility that cases may arise in which the particular circumstances surrounding a third party purchase may, notwithstanding the claimant’s overriding interest, require the court to reassess the extent of the claimant’s equity in the property. [56]

With respect to the parties in this claim, this was the most interesting and important issue of law (see my reflective piece which touches this issue in relation to section 2, LPMPA, but could have amplified further in relation to section 116) and it’s a shame that the Board were not able to address it.

Thus, the remedy was in issue.  The Board stressed the following idea: “Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application” (at [65]) – a comment which should be in the heads of all practitioners and students (although I fear it won’t be in the minds of the latter).

Calixtus got one half of  Mama’s share, now vested in Theresa Henry, as the minimum equity to do justice to his claim.   They might have done more here to justify this outcome, but the overall feeling is that Calixtus was not best served by the St Lucian courts.

Credit where it's due?

Published by Dave on 12/01/2010 in FLW case note and Trusts and Estoppel. 0 Comments

Walsh v Singh [2009] EWHC 32 is a fascinating case about constructive trust (CT) and proprietary estoppel (PE), or at least it could have been. First credit goes to HHJ Purle QC, sitting as a judge of the High Court, who has managed the seemingly impossible task of giving judgment in such a case without reference to any authority (beyond Yeoman’s Row v Cobbe, but on the quantum meruit point), despite the case being redolent (at least) of the facts in Lloyds Bank v Rosset, Midland Bank v Cooke, Coombes v Smith, Cobbe (on the estoppel point), Stack v Dowden, Thorner v Major (although probably distinguishable), a possible tinge of Tinsley v Milligan, and I could go on.  That’s not to say that the judge was wrong or that he necessarily applied the wrong principles, but it does make the case eminently appealable.  In fairness to the judge, one might say that CT/PE cases are fact specific and he heard evidence over around seven days, the parties clearly hated each other and the evidence was hardly ad idem, so he had much to sort out; and he did apply a set of principles which broadly correspond to the law.

I’m going to set out the facts and judgment, and then seek to reconstruct the case, identifying some further issues.  In particular, part of the interest in this case comes from the basic problem facing anybody trying to make a claim based on CT and PE as regards detriment when they have been in a loving relationship (although this one seems to have been quite turbulent): how can you show that your acts were done on the basis of gaining an interest in the home as opposed to doing them out of love for your partner? (on this, see in particular Rosset, where, to paraphrase Lord Bridge, it was the most natural thing for a wife to do the acts Mrs Rosset did to get the home ready in time for christmas).  But I’m getting ahead of myself – first, the facts and judgment.

Ms Walsh is a barrister, who began practice in 2000; Mr Singh is a dentist but also “a canny businessman”.  They began living together in 1997, they became engaged in 2001 but subsequently the engagement broke off in 2005.  The property (“the Leire project”) that was the main subject of this dispute was bought in 1999.  The property was bought in Mr Singh’s name only and he paid the entire amount including a mortgage in his name.  The property was bought with the intention of developing it over time into an equine centre (cue amusing jokes about names of horses – ege a stallion, “Pointless”, who lived up to his name by not breeding).  Before the purchase, Ms Walsh’s evidence was that the property was put into Mr Singh’s name because he was paying the mortgage, but that Ms Walsh would have a half share.  That evidence was doubted because Ms Walsh was unsure of the exact words he had used on that occasion.  Subsequently, he promised her “financial security” and that she was entitled to have a joint say in decisions about the home and be clear about decisions made.  Other evidence was that they had engaged on a “joint venture”.  Mr Singh subsequently purchased fields and a paddock for his SIPP.  Ms Walsh assisted with the purchase of both by paying Mr Singh £7500 in respect of the fields and £25000 in respect of the paddock.  That was the evidence on common intention/assurance.  I’m leaving out of the discussion here Mr Singh’s unfortunate conduct in relation to the engagement ring, not dwelt on here but his conduct was “decidedly unattractive” and raised the possibility that his conduct was less than forthright in relation to the properties.

What about detriment?  In addition to the payments for the fields and paddock, Ms Walsh found the property, researched various legal points (a protected tenancy issue and planning permission), contributed to the obtaining of planning permission (in their joint names), and she contributed physically to renovation works, helped him with his other business activities, and, significantly, gave up her promising career at the bar (going part time and then ceasing her practice in August 2004) to run the equine centre.

Ms Walsh claimed a 50% share of the entire property.

HHJ Purle found against Ms Walsh.  He found that the payments for the field and the paddock were loans (as Mr Singh claimed) on the basis that the SIPP arrangements presupposed that Mr Singh was investing his own money as he was entitled to tax relief on his contributions.  Although her conduct was significant, the judge was unable to accept Ms Walsh’s evidence that she was promised or was encouraged to believe that she would have a half share.  He gave 12 reasons for that finding, the most significant of which were all the cash was provided by Mr Singh; they kept their finances separate; there was nothing in writing about the half interest despite Ms Walsh’s concern to have an explicit assurance (“surprising in the case of a person of high intelligence, the more so as she was training to become (and subsequently became) a barrister”); statements to others that she knew that she wouldn’t be entitled to anything if they separated; Mr Singh wouldn’t have promised her anything when all the financial burden and risk was on his side; there was a gentleman’s agreement between them in March 2006 that accepted that Mr Singh owned and controlled all of the property (but would pay Ms Walsh maintenance); all of Ms Walsh’s contributions were referable to their long-term relationship, with the prospect of marriage and not to the acquisition of a beneficial interest; Mr Singh’s contribution were much more significant that Ms Walsh’s.

As regards what the judge referred to as an “implied bargain constructive trust” – surely wrong – he said that Ms Walsh’s strongest point was giving up the bar to run the equine centre but she did that “because she was committed to Mr Singh as her partner and (from April 2001) her fiance, and because she hoped and expected to marry him” (at [59]).  Even though the gentleman’s agreement expressly recognised the significant contribution made by Ms Walsh to the ongoing development of the site and the equine centre, that was insufficient for the same reason.  A quantum meruit claim also failed because she never intended to act for a reward.

Finally, there was a jointly owned villa in Italy which the judge held  (on the basis of English law anyway) was beneficially owned in equal shares because there was nothing to rebut the presumption of  beneficial ownership in equal shares.

I accept that the judge had an awful job in this case disentangling the interests of the parties and also that English law, of course, knows no concept of community/family property etc.  The basis for asserting the claim had to be a CT or PE.  If there was no property-specific assurance about the Leire project, only assertions of “joint venture” etc,  that pretty much deals with the PE issue (see Coombes v Smith). But there did seem to be more than that if one accepts that he said words to the effect that her “home is her home”.  The same is true of the express common intention.  This raises an issue which is kind of left hanging in Thorner: How unclear/ambiguous does a statement have to be before it fails to act as an assurance/representation?  One answer to this, perhaps drawing on Gillett v Holt, is that a lack of clarity can be made up by the extent of the detriment undertaken by the Claimant (?).

But, most significantly, the judge refers to implied bargain CT and simply does not engage with the issue of whether such an intention can be inferred or, as suggested obiter probably by at least two members of the HL in Stack, imputed.  Whether that would, in any event, have assisted Ms Walsh is open to doubt though, bearing in mind her professional status – an imputation must have some basis in fact (or at least, that’s what I think).  But the inference is open to question, raising the prospect of discussion about the thorny issue of the relevance of indirect contributions.  The issue here about Ms Walsh’s direct contributions to the SIPP fund, entitling Mr Singh to tax relief on those contributions, is a bit like the problem in the way of Mrs Rosset as Mr Rosset’s swiss family trustees had explicitly said that Mrs Rosset was not to get a beneficial interest in the property putting the kibosh on her claim to an express CI.  Ms Walsh’s situation is different as she would be claiming an inferred CI and Tinsley v Milligan might be of assistance here.

I could go on (and on – having just prepared my lectures on this).  My point is that none of this was discussed.  Ms Walsh’s situation is like Mrs Burns in Burns v Burns, although perhaps not as extreme.  It raises the question, which equity forces us to ask, as to why people do things.  The answer must be more complex than the rules of equity allow us to think – Ms Walsh may have given up her career at the bar because she loved horses and Mr Singh, but maybe she also gave it up because this was a joint venture, which suggests some form of stake in the project.  Ms Walsh is better equipped to answer that not just because she was involved but also because her first degree was in psychology.  As Baroness Hale said in Stack (at [69]), in law “context is everything”.

It's a confused world out there…

Published by NL on 04/01/2010 in ASB, Adverse possession, Allocation, Disrepair, Housing law - All, Leasehold and shared ownership, Nuisance, Possession, Tolerated trespasser, Trusts and Estoppel, Various (non-housing), assured-tenancy and secure-tenancy. 11 Comments Tags: .

And for the new year, it seems an opportune moment to delve into the Nearly Legal search logs in a vaguely quixotic attempt to provide answers to some of the questions that brought people here. Alternatively, where this is not possible, we can stare in mute bewilderment at what was behind the question…

It is with the latter that we begin
tolata mother and daughter inheritance tax and succession with a will
Just how much can you stuff into one short question? And without giving us any idea what is actually going on?

rehousing on asthma grounds lambeth
I’m resisting the temptation to make the obvious joke about Asthma Grounds being a surprisingly pleasant low rise estate. If your current housing is having an impact on your asthma, you may get a medicial priority, but as far as I recall from Lambeth’s allocation scheme, it is not likely to be a high priority. You should see a local independent housing advisor, as a lot depends on the specific details.

not paid rent from and onwards
Are you boasting imprecisely or complaining without detail?

tenant gas inspection statutory nuisance
If you mean can a gas inspection be a statutory nuisance, no. If you want a gas inspection and the landlord isn’t carrying one out, this is a serious breach of tenancy conditions and potentially the landlord’s repairing obligations if there is a problem – in which case run, don’t walk, to your nearest housing solicitor, local authority tenancy relations team or housing advisor. If, and I am scratching my head over the statutory nuisance here, the issue is another tenant refusing access for a gas inspection in their property which is affecting yours, then their landlord is the first point of contact and possibly the local authority environmental health and/or the gas co.

charging orders declaration of trust deed
Eh? Trying to avoid a charging order or assign the benefit of one?

music 3 am asb warning
Not bloody surprised. And possibly from the same person, we have…

noise abatement order defence student
Being a student is not going to help. There is no ‘young, irresponsible and drunk much of the time’ defence in the statute.

delegated authority to issue possession proceedings
No – not by an agent or another behalf on of the landlord unless the person is the landlord’s legal representative (meaning a solicitor authorised to sign the claim on the landlord’s behalf). If a power of attorney is involved – maybe and perhaps, but if so only with leave of the court.

will i get evicted for unlawful subletting of shared ownership?
Quite possibly. Depends on the precise terms of the lease, but it is likely to be either a lease or an assured tenancy and under either a sublet is likely prohibited. You appear to know that this is the case as you call it unlawful, If it is, then it is a significant breach of lease/tenancy and the landlord could probably seek possession.

unlawfully evicted illegal subletting
I think the answer is in the question. Unless, of course, you were thrown out without a possession order having been obtained against the tenant who unlawfully let to you…

i am a tennant in a house where the bank have a posession order can i make them an offer on the property uk
You can, of course. There is absolutely no guarantee that they will take any notice of you whatsoever.

quick access to adverse possesion in luton
It is no quicker in Luton than anywhere else. 10 years now. You’ll just have to wait.

plural of criterea
What are they teaching the children in school these days? Any fule no it is criterion.

dyslexics could not understand legal contracts
Words fail me.

southwark housing act regarding repair before tenancy commence
There is a legal requirement that a property be fit for human habitation when it is let as a furnished property, but this is a pretty low threshold in any event. Otherwise, repairs are not enforceable (assuming that they are repairs for which the landlord is liable under the tenancy agreement and s.11 Landlord and Tenant Act 1985) until the tenancy has begun. However, it is worth checking Southwark’s tenancy agreement, allocation policy and other documents for any statements of the minimum standard of housing to be provided. These may be useful. Off the top of my head and without them in front of me, I couldn’t say.

the courts have given me a suspended sentance for rent arrears what does this mean
That you got a really, really tough District Judge? I presume you mean suspended possession order – if so, it means make the payments set out in the suspended order or your landlord can ask the court for a warrant to evict you. Until May 2009, it would have meant a lot of other things as well, none of them good, but at least now you remain a tenant.

when did was secure tenancy introduced
1980, it did was.

i have been living as a tolerated trespasser for 6 years can i be evicted
The good news is that you aren’t a tolerated trespasser any more and haven’t been since May 2009 – you have a ‘replacement tenancy’ of some kind. The bad news is that the original possession order is still there, so if you haven’t paid off the rent arrears – if that is what it was – you still could be evicted, but your landlord would probably need to apply to the court for permission to apply for a warrant, as the possession order is over 6 years old.

first essex high court
There may be High Courts outside London now, but this is just a little ahead of its time. The Billericay High Court is not sitting yet…

can sister claim possession of my property
I have absolutely no idea. I am not acquainted with your sister or your property or the relationship between them.

how many weeks make a year
There are limits to our public service remit. Out of curiosity, I googled this. NL is at the bottom of page one – for a post called ‘How many weeks make 8′. Above NL are about 10 links that all say ’52, idiot. I can’t believe you are asking this’. So this person clicked on the link to NL…

A strange new beast in the forest

Published by Francis Davey on 09/12/2009 in Housing law - All and Trusts and Estoppel. 2 Comments Tags: .

The case of Clarence House v National Westminster Bank [2009] EWCA Civ 1311 deals with a relatively new form of transaction that seems, at present, to be confined to City property transactions. I report it here because it may become more widespread.

This new beast is the virtual assignment. The idea is a simple one: a tenant, usually one who is also a landlord of sub-tenants, by a contract assigns all the economic rights and obligations of their lease to a third party, without actually assigning the lease itself. Most modern commercial leases prohibit (at least without consent) the assignment of the lease; parting with or sharing possession or a declaration of trust of the lease in favour of someone else. A virtual assignment is designed to side-step these prohibitions.

This is what National Westminster Bank had agreed with a Gibraltarian company New Liberty Property Holdings Ltd, their lease having the usual assortment of prohibitions against assignment etc.

Clarence House was rather unhappy about this, as Ward LJ put it:

Who was this unforthcoming Gibraltarian company who had been foist upon it without its knowledge or consent in place of its approved tenant, a copper-bottomed high street bank? The respondent made plain how unhappy it was dealing with the interloper, especially in the light of the disconcerting fact that since its involvement, the rent was in arrears. Their concerns could not be assuaged. Their concerns were not without foundation. We have now been informed that on 28th October Provisional Liquidators of New Liberty were appointed.

They applied to the High Court for a declaration that the virtual assignment was a breach of the terms of the lease as being a parting with or sharing of possession or a declaration of trust. The judge found for National Westminster, the Court of Appeal dismissed Clarence House’s appeal.

Clearly National Wesminster were not in literal possession of the premises (it was sublet) and so could neither share possession nor part with it, but landlord and tenant lawyers use the term “possession” more broadly. In particular s.205(1)(xix) of the Law of Property Act 1925 defines possession to include “receipt of rents and profits or the right to receive the same, if any”.

The Court rejected the suggestion that New Liberty were in receipt of rents for two reasons: the first was that they received the rents as agents of the landlord and, although they immediately became the property of New Liberty (as a result of the virtual assignment) there was an instant of time when they were not. I confess I am unhappy with an argument based on a scintilla temporis. Much better, in my view, was the second reason which was that it is entirely possible to assign the chose in action representing the right to receive rents while retaining the reversion: it is the latter, not the former, on which s.205(1)(xix) bites and which represent possession in the technical legal meaning of the word. Thus New Liberty were never in possession and so possession could not have been shared with or given to them.

The Court also took the view that a virtual assignment is not a trust. Ward LJ puts it thus:

I recognise that Virtual Assignments are strange new beasts in the forest; that one must circle around them suspiciously and cautiously; but the moment one gets close and has a good sniff, the overwhelming smell is of contract, not trust. Although the judge would not for a moment have expressed himself in such an inelegant way, so lacking jurisprudential precision, this was the central finding on this point and he was correct in that conclusion.

That must, I think, be right.

Chancery or Family? – the former matrimonial home

Published by Francis Davey on 09/12/2009 in Housing law - All and Trusts and Estoppel. 0 Comments

In Smith v Smith the Court of Appeal considered the conflict between TOLATA and its family law jurisdiction.

The background is a sad one. The Smiths married in 2004. They bought what I assume to be a lovely house of 3,800 square feet in 5 floors and with substantial gardens both front and back for a total of £6 million. They spent another £7.4 million on “elaborate works of renovation” (with contributions of £1.5 million from Mr Smith and £0.4 million from Mrs Smith, the rest being funded by a mortgage). Mrs Smith directed the works and “her energy and flair were major contributors to its ultimate style and beauty”.

In April 2007 they moved into the house, but their marriage had already hit difficulties and Mr Smith eventually moved out of the home for good in January 2008 — they had lived together in the home for only 6 months.

Mr Smith continued to pay the outgoings on the house which amounted, he said, to some £228,000 a year. In addition he had annual outgoings of £18,000 (an allowance paid to his wife), £100,000 (rent on his own home) and obvious other living expenses (I suppose one is expected to think this leaves little change out of his net income of £350,000 per year — readers with social housing practices may think otherwise).

Mr Smith petitioned for divorce in May 2008, Mrs Smith answered in July 2008, indicating her intention to resist her husband’s petition. Mr Smith’s solicitors pressed Mrs Smith concerning the house, telling her that a sale was both urgent and inevitable. Mrs Smith disagreed.

In October 2008 Mr Smith applied for an order under s.14 of the Trusts of Land and Appointment of Trustees Act. He also applied for an order for a sale of the family home under s.17 of the Women’s Property Act 1882 and for an occupation order prohibiting Mrs Smith to exercise her right to occupy the home under s.33(3)(d) of the Family Law Act 1996.

Just before the hearing Mr Smith was paid an exceptional commission of £720,000 (net) on a corporate deal that had been made in March 2009. This rather put the Kaibosh on the case that he had advanced, namely that he could barely afford to maintain the family home (with other outgoings) on his income. At the hearing he described the commission as a “once-in-a-lifetime payment” and argued that although he could, in the short term, afford to maintain the property, it was unreasonable to expect him to do so.

Mrs Smith argued that the application was premature given the pending matrimonial proceedings.

The recorder held that:

  • the home was “far larger than could objectively be justified by reference to [Mrs Smith's] reasonable housing need”
  • the purpose for which the property was acquired was to provide a home for both of them while they lived together and that purpose could no longer be achieved

He ordered that the home be sold with completion no earlier than 3 months from his order. The net proceeds of sale were then to be divided into two sums and placed on deposit pending agreement between the parties or an order of the court.

In the matrimonial proceedings, the judge found that Mrs Smith had behaved in such a way that the husband could not reasonably be expected to live with her and their marriage had broken down irretrievably. He therefore granted a decree nisi.

On appeal Mrs Smith argued that:

  • the order for sale was premature in advance of a decree of divorce
  • in particular the substantial and exceptional payment to the husband (so that he no longer needed to sell the home urgently) meant that the TOLATA application should not have been heard in advance of the divorce
  • finding that the purpose for which the home had been acquired was now defeated, effectively pre-empted the inquiry as to whether the marriage had irretrievably broken down that was to be decided in matrimonial proceedings
  • as a general rule TOLATA was an inappropriate vehicle for the resolution of issues between husband and wife.

Wilson LJ set out the approach a court should take to an application under TOLATA between separated spouses. As a general rule it is better if questions of shared property are dealt with as part of divorce proceedings:

It is in principle much more desirable that an issue, as here, about sale of the home should be resolved within an application for ancillary relief. For there the court will undertake a holistic examination of all aspects of the parties’ finances, needs, contributions etc; will devise the fairest set of arrangements for the future housing and finances of each of them; and, to that end, will provide for the transfer of capital, as well perhaps as for payment of future income, from one to the other. By an order under TOLATA, on the other hand, the court lays down only one piece of the jigsaw, namely that the home be sold, without its being able to survey the whole picture by laying down the others.

So a court faced with such an application should carry out a threshold enquiry, asking itself whether the issues raised by the application could reasonable be left to be resolved within an application for ancillary relief following divorce. In doing so the court will have regard to whether (within a time-frame “tolerable in all the circumstances) the parties will become able to apply for ancillary relief.

Further the court should consider whether there is a “measurable chance” that on such an application for ancillary relief one of the parties might preserve their occupation of the home or secure an outright transfer of ownership (or a variation of the trust). If so, an order for sale under TOLATA is unlikely to be right.

Wilson LJ found on the facts that the delay before ancillary relief was not tolerable and that there was no measurable chance that Mrs Smith would retain occupation of the home or otherwise preserve her right to live there. The recorder’s decision was therefore correct.

A second point raised by Mrs Smith at first instance was that before making a TOLATA order in her circumstances, the recorder would have to be satisfied that it would have been appropriate to make an occupation order. The recorder disagreed, but found that the requirements for such an order were satisfied. The Court of Appeal agreed.

One point that surprised Wilson LJ, but which had not been addressed by either party in proceedings, was the nature of the recorder’s order. Where was Mrs Smith supposed to live after sale while the proceeds of sale were languishing in a deposit account pending a judicial determination or an agreement. That would be a circumstance that should be taken into account under s.15(2) of TOLATA. He said:

One might wonder whether such a strategy would be likely to prove as satisfactory for the wife as a submission to the recorder that no order under TOLATA should be made until the husband had made satisfactory proposals for these two allied aspects of her needs. But, although had I been in the recorder’s shoes, I would myself have invited submissions in these respects, he cannot fairly be criticised for not having done so and thus for not having in any way addressed the wife’s needs following sale.

A point to consider in the face of a similar TOLATA application in future.

An interesting and important case for those dealing with matrimonial home disputes. TOLATA may be an alternative to waiting for ancillary relief to be resolved.