Alan Henry Wall v Christine May Hilda Munday
| Jurisdiction | England & Wales |
| Judge | Paul Matthews,HHJ |
| Judgment Date | 27 April 2018 |
| Neutral Citation | [2018] EWHC 879 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: 7BS0052C |
| Date | 27 April 2018 |
[2018] EWHC 879 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: 7BS0052C
Steven Ball (instructed by Burges Salmon) for the Appellant
Robert Trevis (instructed on direct access) for the Respondent
Hearing date: 11 April 2018
Judgment Approved
Introduction
This is my judgment on an appeal brought by Mr Alan Wall, in his capacity of personal representative of the estate of Bryan Wall deceased, against the order of Mr Recorder Norman dated 30 June 2017 (but sealed on 23 August 2017). The order was made in a claim brought by Mr Wall against Mrs Christine Munday, concerning a property bought jointly by the late Mr Bryan Wall and Mrs Munday when they were married to each other. By his order, the judge dismissed Mr Wall's claim, and on a counterclaim by Mrs Munday held that the property belonged beneficially to the estate and Mrs Munday in equal shares absolutely. The judge also made an order for sale and gave certain directions regarding valuation of improvements. He also ordered Mr Wall to pay 80% of Mrs Munday's costs.
The deceased and the respondent were married in 1969 and divorced in 1974, having had no children. The respondent remarried almost immediately after the divorce became absolute, and the deceased remarried later the same year. In June 1972, during their brief marriage, they sold their original matrimonial home for about £5,400 and bought a leasehold house known as 7 Wellsmoor Gardens, Bromley, Kent for £13,600, with the aid of a mortgage loan of £10,000. The legal estate in the land ( ie the long lease) was conveyed to them as joint tenants. The relationship however broke down in 1973, and the respondent left the house and never returned. She commenced divorce proceedings in late 1973. When the parties were divorced, no formal steps were taken to deal with the ownership of the house, still vested in them as joint tenants. But the deceased thereafter treated the house as his own. He insured it, maintained it, and improved it. He left the UK in summer 1974, having meanwhile let it. In 1978 the deceased purchased the freehold of the house. In 1990 he redeemed the mortgage. Tragically, he later developed motor neurone disease and died on 21 March 2015, intestate.
At the time of the divorce proceedings there was some correspondence between the parties' solicitors regarding a matrimonial settlement. This was gone into at the trial, and the judge concluded that any settlement that there was did not include dealing with the ownership of the house. In May 1989 the respondent's solicitors wrote to the deceased about the possibility of realising her interest in the house, but the matter did not progress. The death of the deceased in March 2015 however changed everything. The parties had been joint tenants, and so by survivorship the respondent became the sole legal owner of the house. The question accordingly was whether she also became the sole beneficial owner or whether the estate of the deceased was entitled to a share, and, if so, what.
These proceedings
The claim was issued on 24 April 2015 with particulars of claim attached. The primary claim made by the estate was that the informal settlement come to between the parties at the time of the divorce included a sale by the respondent to the deceased of all her interest in the house. (As I have said, at the trial the judge rejected that claim. There is no appeal against that part of his decision.) A defence and counterclaim were served and filed on 3 June 2015, and a reply and defence to counterclaim on 10 July 2015 (amended 15 February 2016). The claim and counterclaim were tried before the judge on 21 and 22 July 2016, and the judge made provisional findings of fact in writing on 21 October 2016. Thereafter submissions on the law were made at a further hearing on 19 and 20 January 2017, and a final judgment was given in writing on 27 February 2017.
In his judgment, the judge, applying the burden of proof, held that there had been no agreement between the deceased and the respondent for the respondent to sell her interest in the house to the deceased (see the judgment at [50]–[54]). However, the judge held that by reason of the mutual dealings between the parties the beneficial joint tenancy had been severed by the end of 1975 (see the judgment at [71]–[81]). He further recorded that there had been an argument at trial as to whether it was open to the estate on the pleadings to argue that subsequent conduct evidence and intention common to the parties to vary their respective shares (as they have now become) in the property. He had ruled that it was open to the estate so to argue (see the judgment at [61]–[70]). However, having considered the evidence and the arguments, he held that there had been no variation of the parties shares in the property, and that they were therefore still entitled to half each of the beneficial interest (see the judgment at [82]–[85]). There were a number of other matters, largely accounting issues, which were not dealt with in any detail in the judgment and were the subject of further argument and evidence thereafter. Since none of those is challenged, I will not deal with them here, save to underline that the equitable accounting rules that formerly applied in trust of land cases were replaced by ss 12–15 of the Trust of Land and Appointment of Trustees Act 1996: Stack v Dowden [2007] 2 AC 432, [93]–[94]; Murphy v Gooch [2007] EWCA Civ 603.
As I have said, the form of the order was not however finalised until 30 June 2017. The appellant filed a notice of appeal on 21 July 2017. It sought a variation of the judge's order, so that, instead of the parties having 50% each of the beneficial interest, the appellant estate would have 86% and the respondent 14%. Secondly, it also sought to challenge the judge's costs order, on the basis that the estate, rather than the respondent, had been the successful party overall. It did not seek to challenge the judge's decision (again applying the burden of proof) that there was no agreement between the parties for the respondent to sell her interest to the deceased. Indeed, the appellant does not seek to attack any of the findings of fact by the judge. I record here that no respondent's notice has been filed or served, and the respondent through her counsel confirmed to me that no challenge was made on her behalf to any of the rulings or findings of the judge at trial, including the pleading point referred to in para [5] above and the decision on severance. I gave permission to the appellant to appeal on both the points set out in the appellant's notice on the papers on 17 August 2017. The appeal was heard by me on 11 April 2018, having been authorised by the supervising judge of the Business and Property Courts to do so. Steven Ball appeared for the appellant, and Robert Trevis appeared for the respondent.
Appeals
I should briefly mention some important but basic rules about appeals. By virtue of CPR rule 52.21(1), an appeal is limited to a review of the decision of the court below, unless the court considers that in the circumstances of a particular appeal it would be in the interests of justice to rehear the case: Audergon v La Baguette Ltd [2002] EWCA Civ 10, [83]. In the present case I conducted a review of the decision below. It was not argued that I should conduct a re-hearing.
Secondly, rule 52.21(3) provides that the appeal court will allow the appeal where the decision was (a) wrong, or (b) unjust, because of serious procedural or other irregularity in the proceedings below. Here, wrong means wrong in law, wrong in fact, or wrong in the exercise of discretion. As to costs orders, the court cannot interfere unless the judge either (1) erred in principle, or (2) has wrongly included or left out of account some feature to be considered (or not), or (3) went wholly wrong because he did not balance the various factors in the scale: see for example Islam v Ali [2003] EWCA Civ 612, [20], following Lord Woolf in Phonographic Performance Ltd v AEI Rediffusion Music [1999] 1 WLR 1507, 1523. If it is the question of the exercise of discretion, the court can interfere only where it “exceeded that generous ambit within which reasonable disagreement is possible”: Tanfern v Cameron McDonald [2000] 1 WLR 1311, [32].
The first challenge: variation of beneficial interests
As I have already said, the appellant challenges two decisions of the judge at first instance. The first relates to his rejection of the argument that, by their conduct after the divorce, the deceased and the respondent had evinced an intention not only to sever the joint tenancy, but also to vary their beneficial shares in the house from 50–50. The appellant argues that the judge fell into error at paragraphs 82 and 83 of his judgment. But he first referred to paragraph 71.
That paragraph reads:
“On the facts of Jones v Kernott the court did not need to examine the issue severance discretely from the quantification of shares. This was because upon the court finding that, when the parties' common intention had changed in relation to the property, they intended that Claimant should have the sole benefit of any capital gain in the joint property and the Defendant the sole benefit of any capital gain in his new home, it followed that the joint property was thenceforth owned beneficially in unequal shares and therefore on a tenancy in common. It was not therefore necessary to consider the principles of severance separately nor did the Supreme Court do so. In this case however I see it...
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