Abbey National Plc v Moss and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PETER GIBSON,LORD JUSTICE HIRST,LORD JUSTICE RALPH GIBSON |
| Judgment Date | 12 November 1993 |
| Judgment citation (vLex) | [1993] EWCA Civ J1112-14 |
| Docket Number | CCRTF 92/1219/E |
| Court | Court of Appeal (Civil Division) |
| Date | 12 November 1993 |
[1993] EWCA Civ J1112-14
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE MAYOR'S AND CITY OF LONDON COUNTY COURT
(His Honour Judge Cooke)
Before: Lord Justice Ralph Gibson Lord Justice Hirst Lord Justice Peter Gibson
CCRTF 92/1219/E
MR. R. REID and MR. O. RHYS (Instructed by the Vanderpump & Sykes, Enfield, Middlesex) appeared on behalf of the Appellant
MISS J. JACKSON (Instructed by Stephenson Harwood EC4) appeared on behalf of the Respondent
( )
Friday, 12 November 1993
This is an appeal by the First Defendant, Mrs. Moss, from part of the order made on 25 June 1991 by His Honour Judge Roger Cooke in the Mayor's and City of London Court. By his order the Judge ordered that the Second Defendant, Mrs. Leto, and her husband, the Third Defendant, should pay the Plaintiff, Abbey National Building Society, £45,624.46 due from them as mortgagor and guarantor respectively under a mortgage dated 12 June 1986. That mortgage was in form one on the dwelling house, 58 Village Road, Bush Hill Park, Enfield, Middlesex, owned by Mrs. Moss and Mrs. Leto as joint tenants, and on the face of the Deed it had been entered into by Mrs. Moss as well as Mrs. Leto as mortgagors. But the Judge held that Mrs. Moss had not executed the Deed, her signature having been forged, and that the mortgage was effective only to charge Mrs. Leto's interest. Accordingly the Judge declared that that interest in the net proceeds of sale of the property stood charged to the Plaintiff as security for the monies advanced together with interest, costs and expenses. Neither Mr. or Mrs. Leto defended the proceedings against them and there is no appeal from the orders against them. However the Judge went on to hold that the Plaintiff by reason of its charge on Mrs. Leto's interest was a "person interested" for the purposes of s.30 Law of Property Act 1925 and on its application under that section the Judge ordered that the property be sold. It is against that order for sale that Mrs. Moss appeals.
On 7 October 1993 we heard, but dismissed, an application by the Plaintiff to adduce additional oral evidence on appeal. The facts relevant to this appeal are therefore those found by the Judge, subject to one matter raised by Miss Jackson for Mrs. Moss to which I shall return. I summarise those facts as follows.
Mrs. Moss is Spanish by birth. She is aged about 61. Her husband, Mr. Moss, bought 58 Village Road in or about 1971 in the joint names of himself and Mrs. Moss. On his death on 10 April 1981 she became the sole owner of the property. At that time it was the home not only of Mrs. Moss but also of her son-in-law and daughter, Mr. and Mrs. Leto, and their children. On 7 June 1982 Mrs. Moss transferred the property into the joint names of herself and her daughter, receiving no consideration for the interest thereby conferred on Mrs. Leto. The circumstances surrounding this are of importance in this appeal, and I shall set out the Judge's findings on this (at pp.3–5 of the Transcript):
"Mrs. Moss's evidence was that after her husband died she had what I take to be some form of breakdown and psychiatric treatment as a result. At or about this time the daughter appears to have suggested a transfer of the property into joint names, apparently on the basis that when her mother came to die, survivorship would make the transfer of the property to her so much simpler. The mother agreed, so she says, on condition that the house would never be sold in her lifetime. There was of course an excellent reason for this. It was her only home and she had a strong sentimental attachment to it and particularly to the memory of her husband, who had bought it…… As regards this particular issue, I think the inherent probability is that she would have stipulated that there was no sale so long as she was alive. If one thing shone through her evidence, it was her almost painful attachment to the house and to the memory of her husband; just what one would expect. So I think she said what she said to the daughter, and the daughter agreed."
In 1986 Mrs. Leto wished to borrow £30,000 from the Plaintiff on the security of the property. An application in writing dated 15 April 1986 was made on the Plaintiff's standard form and on its face it bears the signatures of Mrs. Moss and Mrs. Leto as the intended mortgagors and Mr. Leto as the intended surety. On 25 April 1986 the Plaintiff in response to that application made an offer of a loan in the required sum on mortgage, that offer being on the Plaintiff's standard form. That day solicitors claiming to act for Mrs. Moss as well as for Mr. and Mrs. Leto wrote to the Plaintiff saying that they had been consulted by Mrs. Moss and Mrs. Leto with regard to mortgage facilities in the sum of £30,000 to be advanced to them in respect of 58 Village Road, and they suggested that they should act for the Plaintiff as well. The Plaintiff agreed. Also on 25 April 1986 the offer document was signed and there are signatures on it not only of Mr. and Mrs. Leto but also one purporting to be that of Mrs. Moss. A Mortgage Deed in the Plaintiff's standard form bears date 12 June 1986, and by it the property is purportedly charged with the repayment of £30,000 with interest and costs. The parties to it are expressed to be Mrs. Moss and Mrs. Leto as mortgagors and Mr. Leto as surety. On its face there are signatures of the parties. However Mrs. Moss has consistently stated that she never instructed solicitors on the mortgage and never signed any of the mortgage documents, and the Judge, after hearing her oral evidence on this as well as the evidence of a handwriting expert on each side, accepted Mrs. Moss's evidence on this. He held that the signatures purporting to be hers were forgeries and he blamed Mrs. Leto. The £30,000 borrowed from the Plaintiff went to Mrs. Leto who with Mr. Leto took responsibility for making payments due under the mortgage. Mr. and Mrs. Leto, in the Judge's words, "largely pocketed" the borrowed monies.
The Judge found as a fact that Mrs. Moss learnt of the mortgage by a letter dated 30 June 1986 from the Plaintiff, yet made no protest to the Plaintiff that she had not been a party to the mortgage. Miss Jackson has sought to challenge the Judge's finding that Mrs. Moss did know of the mortgage then. The oral evidence of Mrs. Moss as recorded in the Judge's notes and that of her neighbour, Mr. Russell, lend some support to that challenge, save for one sentence recorded in the Judge's notes and referred to in his judgment. But the Judge did record Mrs. Moss as saying "I knew at the time the money was borrowed on security of my house". Further in an Affidavit which Mrs. Moss swore in June 1988 in proceedings brought against her by Mrs. Leto, she referred to Mr. and Mrs. Leto informing her before they went on holiday to Greece in the summer of 1988 that she had to pay £200 per month for the repayment of the mortgage and she said that when her daughter returned she (Mrs. Moss) made enquiries about the mortgage. The Judge had the advantage of seeing Mrs. Moss cross-examined about those matters and it seems to me that it is not open to this Court to interfere with the Judge's conclusion that she knew about the mortgage through the letter dated 30 June 1986.
Early in 1988 Mrs. Moss and Mrs. Leto fell out. Mrs. Leto threw her mother out of the house and started proceedings under s.30 Law of Property Act 1925 for an order for the sale of the property. Those proceedings never came to trial but Mrs. Moss did obtain an order allowing her to return to her home in the summer of 1988. Mr. and Mrs. Leto then left the property and in November 1988 they left the country. They stopped making payments under the mortgage, the last payment being dated 19 July 1988. Arrears built up and on 6 February 1989 the Plaintiff commenced proceedings against Mrs. Moss and Mr. and Mrs. Leto, claiming possession of the property and payment of the monies due under the mortgage. Mrs. Moss put in a defence claiming that she had not been a party to the mortgage and she counterclaimed for rectification of the Land Registry's register in which the Plaintiff's charge is registered against the property. Subsequently the Plaintiff also sought an order for sale under s.30. Mr. and Mrs. Leto did not put in a defence although they were represented by a solicitor at the trial.
The Judge held that the mortgage was effective only to charge Mrs. Leto's beneficial interest and that thereby the beneficial joint tenancy of Mrs. Moss and Mrs. Leto was severed, so that the proceeds of the sale of the property were held for them as tenants in common in equal shares. He then turned to s.30.
It is convenient at this point to set out the material terms of the section:
"If the trustees for sale refuse to sell….or any requisite consent cannot be obtained, any person interested may apply to the court for a vesting or other order for giving effect to the proposed transaction or for an order directing the trustees for sale to give effect thereto, and the court may make such order as it thinks fit."
The Judge held that the Plaintiff, as a person interested for the purposes of s.30, was entitled to ask for execution of the trust for sale.
The Judge then considered whether to order sale and give possession to the Plaintiff. He identified two interrelated issues which arose. The first was: ought he to decline to make an order because it would defeat a collateral purpose? The second was: ought he to decline to do so because, in all the circumstances, Mrs....
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