Bank of Baroda v Dhillon
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROCH,MR JUSTICE CAZALET |
| Judgment Date | 17 October 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1017-4 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CCRTF 96/1738/H |
| Date | 17 October 1997 |
[1997] EWCA Civ J1017-4
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM UXBRIDGE COUNTY COURT
(HIS HONOUR JUDGE CATLIN)
Royal Courts of Justice
Strand
London W2A 2LL
Lord Justice Roch
Mr Justice Cazalet
CCRTF 96/1738/H
MR JOHN ROBSON (instructed by Messrs Bhardwaj & Co, London W1) appeared on behalf of the Appellant (2nd Defendant).
MR ANTHONY MANN QC (instructed by Messrs Lawrence Jones, London SE1 9LH) appeared on behalf of the Respondent (Plaintiff).
The appellant appeals against the order made by HHJ Catlin on the 24th May 1996 by leave of the Single Lord Justice. On that day the judge ordered that possession of 63, Palgrave Avenue, Southall be given up by the appellant by the 1st September 1996; that the property thereafter be sold forthwith, the respondents having the conduct of the sale; and that the net proceeds of sale be applied in this way; half to the respondents, half to the appellant's solicitors. The net proceeds of sale were defined as
"the sale price less the mortgage to Abbey National Building Society plus the reasonable costs of sale."
The order contained a provision as to costs and in addition a provision that:
"In the event that half of the net proceeds exceeds the amount due to the respondents, such excess shall be paid into court and there shall be liberty to all interested parties to apply in relation thereto."
The appellant is the wife of Surinder Singh Dhillon. They were married in 1968. They have four children the youngest of whom is now 20 years of age. Mr & Mrs Dhillon came to the United Kingdom in that year having been married in India. They lived first at 17, Queen's Road, Southall. They remained at that address until about 1972. That property was bought for £3,000. Both Mrs Dhillon and Mr Dhillon contributed £500 each towards the purchase price and Mrs Dhillon's evidence was that she borrowed a further sum of £1,000 from her mother to carry out extensive repairs to the property. That house was sold for £10,000.
In 1973 Mr & Mrs Dhillon bought 63, Palgrave Avenue for £10,000. £2,000 of the purchase price was met out of the monies received for 17, Queen's Road. A mortgage was taken out by Mr Dhillon with the Abbey National Building Society for the balance of £8,000. The profit that Mr & Mrs Dhillon had made on the sale of 17, Queen's Road was used to extend and improve 63, Palgrave Avenue. During part of the time that Mr & Mrs Dhillon lived at 63, Palgrave Avenue Mrs Dhillon worked in a factory and handed her wages to her husband. Her evidence was that she understood that her wages were being used to pay or to help to pay mortgage instalments and other household bills. At other times Mrs Dhillon worked with her husband in his greengrocers shop. 63, Palgrave Avenue, however, was conveyed to Mr Dhillon alone. The title was registered on the 5th March 1973 in the sole name of Mr Dhillon. The same day the charge dated the 1st January 1973 in favour of Abbey National Building Society was registered.
On the 31st October 1978 Mr Dhillon obtained a loan from the Punjab and Sind Bank secured by a second legal charge on 63, Palgrave Avenue. That charge was dated the 31st October 1978 and was registered on the 2nd November of that year. Subsequently that legal charge was assigned by the Punjab and Sind Bank to the respondent Bank. Mr Dhillon fell into arrears with the repayments of the loan and on the 25th July 1991 the respondents obtained against him a money judgment in the Chancery Division in the sum of £12,189.98p plus £3,852 interest together with costs. Those proceedings had been issued in 1985. Following further delay, a possession order was made in the respondent's favour on the 18th March 1992. Following that possession order there were further applications and appeals by and on behalf of Mr Dhillon all of which were unsuccessful. The warrant for possession was due to be executed on the 14th October 1992. At that point the appellant applied to be joined as a second defendant in the proceedings claiming that she had an equitable interest in the property which overrode the bank's interest under their legal charge.
When the matter came before HHJ Catlin the court was told that the value of the house was approximately £78,000 and the sum outstanding on the first charge in favour of the Abbey National Building Society was some £12,691. By that time Mr Dhillon owed approximately £25,000 in total to the respondents under their legal charge. The net equity before taking into account the respondent's charge was at that time £56,200 approximately, half of which would be £28,100, a sum exceeding the amount then owed by Mr Dhillon to the respondents.
On the 23rd April 1981 the appellant had registered rights of occupation in the house pursuant to the Matrimonial Homes Act 1967.
Mr Dhillon had been adjudicated bankrupt on the 1st July 1992. The respondents did not prove in his bankruptcy and Mr Dhillon's trustee in bankruptcy has taken no part in the present proceedings.
The respondents joined Mrs Dhillon as a second defendant to the proceedings in November 1995. At some stage the proceedings were transferred from the Chancery Division of the High Court to the County Court.
In his judgment HHJ Catlin recorded that the respondents accepted that at the time they took a second legal charge on the property they made no inquiry as to the occupants of the property prior to their lending Mr Dhillon £7,000 on the 31st October 1978. The judge went on to say that he was not satisfied that there was any express agreement between Mr & Mrs Dhillon as to how the property was to be owned. The judge however accepted the evidence that a previous home had been purchased by Mr Dhillon in his own name; that both Mr & Mrs Dhillon worked after their marriage and both pooled their resources; that they each made equal capital contributions to the first purchase; and part of the proceeds of sale went into the property and each again contributed equally. The judge accepted the evidence of Mrs Dhillon as to the work she had done and the money she had earned during her marriage and that Mrs Dhillon had been in actual occupation of the property from its purchase to the date of the hearing before the judge. The judge noted that both Mr & Mrs Dhillon said it was their intention that the property should belong to them equally but observed that that was not conclusive in itself. However the judge said that looking at all the circumstances:
"I am satisfied that the court is entitled to impute that there was an agreement between the defendants that the first defendant was to hold the property in trust for himself and his wife in equal shares from 1973. It amounts to an overriding interest and the respondents legal charge with the first defendant takes subject to it."
The judge then recorded that it had not been disputed that the respondents were entitled to apply under Section 30 of the Law of Property Act 1925 for an order of sale of the property. The judge held that the respondents were in the same position as a trustee in bankruptcy and that there should be an order for sale unless there were exceptional circumstances. The court had a wide discretion and was required to balance the equities. The judge carried out that process and concluded that exceptional circumstances did not exist and that there had to be an order for sale. He thereupon made the order summarised at the outset of this judgment. In balancing the various considerations, the judge found that Mrs Dhillon had not known of the second charge in favour of the respondents nor had she received any direct benefit from it. He accepted Mr Dhillon's evidence that he did not tell his wife about the loan at that time or later when he fell into arrears as he was trying to protect her. He had not wished to involve his wife. On the other hand the children were all adult; there was no prospect of the bank being paid in the foreseeable future unless the property was sold; that after sale Mrs Dhillon would have a resource which should enable her to reaccomodate herself.
The main ground on which this appeal is advanced is that the judge failed to consider the nature and extent of the appellant's equitable interest in the house which included a right to occupy the house for the rest of her natural life or for as...
To continue reading
Request your trial