Bernard v Josephs
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE GRIFFITHS,LORD JUSTICE KERR |
| Judgment Date | 30 March 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0330-1 |
| Docket Number | 82/0128 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 March 1982 |
[1982] EWCA Civ J0330-1
The Master of The Rolls
(Lord Denning)
Lord Justice Griffiths and
Lord Justice Kerr
82/0128
1978 B. No.525
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (GROUP A)
(HIS HONOUR JUDGE MERVYN DAVIES, Q.C.,
sitting as a Deputy High Court Judge).
Royal Courts of Justice.
MR. W.D. PANTON (instructed by Messrs. Simpson Millar) appeared on behalf of the Respondent.
MR. JOHN SPEED (instructed by Messrs. Moss Beachley) appeared on behalf of the Appellant.
This is all about a young lady, Maria Teresa Bernard. In August 1973 it was her 21st birthday. On that very day she became engaged to be married. It was to Dion Emmanuel Josephs. He was 30. Unknown to her he was already a married man, not yet divorced. They arranged to get a house and set up home together. It was 177 Dunstans Road, S.E.22. It was conveyed to them on the 21st October, 1974 in their joint names. It was a simple transfer by the vendor as beneficial owner "to Dion Emmanuel Josephs and Maria Teresa Bernard", without more, no declaration of trust, or anything.
The purchase price was £11,750. The whole of it was raised on mortgage from the Southwark Borough Council. They both signed the legal charge to secure it. They each paid some of the incidental expenses. She paid £200 of her own money. He paid £250 and £400 which he borrowed. They went into occupation and lived there together as man and wife. The house was quite large. So they let off much of it to tenants. This helped greatly towards the mortgage instalments. Both went out to work. Their earnings enabled them to pay the rest of the outgoings and food, and so forth. Then after a year or two they quarrelled. She says that he was violent to her. So in July 1976 she left. He stayed on in the house. She applied for the house to be sold and for one-half of the proceeds. Meanwhile, in June 1975, he had got a divorce from his lawful wife. In April 1978 he married another woman. He took her to live with him in the house. They are childless.
THE LAW
In our time the concept of marriage—I am sorry to say—is being eroded. Nowadays many couples live together as if they were husband and wife, but they are not married. They hope and expect that their relationship will be permanent. They acquire a house in their joint names. Most of the purchase price is obtained on mortgage in both their names. They are both responsible for payment of the instalments. Both go out to work. They pay the outgoings out of their joint resources. One paying for the food and housekeeping. The other paying the mortgage instalments. And so forth. Just as husband and wife do. But later on, for some reason or other, they fall out. They go their own separate ways. One or other leaves the house. The other stays behind in it. There is no need to divorce. They just separate. What is to happen to the house? Is it to be sold? If so, are the proceeds to be divided? And, if so, in what proportion? Or is one of them to be allowed to stay in it? If so, on what terms? If they had been husband and wife, our matrimonial property legislation would give the Family Court a very wide discretion to deal with all these problems. It is contained in sections 23 to 25 of the Matrimonial Causes Act 1973. But there is no such legislation for couples like these.
THE LEGISLATIVE PROVISION
The legal position is that they hold the house on trust for sale. Section 36 (1) of the Law of Property Act 1925 says that:
"Where a legal estate…is beneficially limited to or held in trust for any persons as joint tenants, the same shall be held on trust for sale, in like manner as if the persons beneficially entitled were tenants in common, but not so as to sever their joint tenancy in equity".
That is followed by section 36 (2) which says:
"…under the trust for sale affecting the land the net proceeds of sale, and the net rents and profits until sale, shall be held upon the trusts which would have been requisite for giving effect to the beneficial interests if there had been an actual severance".
But that does not tell what those beneficial interests shall be.
When there is a dispute as to the shares in the house, the parties can apply to the court for a declaration. After they separate, the appropriate machinery is for one or other to apply to the court under section 30 of the Law of Property Act 1925. He or she can apply to the court "for an order directing the trustees for sale to give effect thereto, and the court may make such order as it thinks fit".
WHAT ARE THEIR SHARES?
When the house is conveyed into joint names, the question often arises: What are the shares of the two parties in the house? And at what date are those shares to be ascertained? If the conveyance contains an express declaration of the shares, that is decisive, as we held recently in Godwin v. Bedwell, 4th March, 1982 (not yet reported). But often there is, as here, no such declaration. In such a case it used to be thought that the shares would always be equal shares. That was the view of Lord Justice Russell in Bedson v. Bedson (1965) 2 Queen's Bench 666 at page 689, when he said:
"If there be two beneficial joint tenants, severance produces a beneficial tenancy in common in two equal shares…by declaration of the beneficial joint tenancy between A and B, their respective rights and titles are no less clearly laid down and established than if there had been a declaration of a beneficial tenancy in common in equal undivided shares".
Lord Justice Russell had previously said much the same in Wilson v. Wilson (1963) 1 Weekly Law Reports at page 609.
But that view has not prevailed. It is because a conveyance into joint names does not necessarily mean equal shares. It is often required by the local council or by the building society when they grant a mortgage—so that they have both responsible for repayment. It is sometimes done on the suggestion of lawyers, without taking into account all the factors, such as their contributions to the purchase money, and so forth.
As between husband and wife, when the house is in joint names and there is no declaration of trust, the shares are usually to be ascertained by reference to their respective contributions—just as when it is in the name of one or other only. The share of each depends on all the circumstances of the case, taking into account their contributions at the time of acquisition of the house: and, in addition, their contributions in cash, or in kind, or in services—up to the time of separation. In most cases the shares should be ascertained as at that time. But there may be some cases where later events can be considered. The departing party may only be entitled to one-half, one-quarter, or even a fifth, depending on the contributions made by each and, I would add, all the circumstances of the case. That was the view of this court in Hine v. Hine (1962) 1 Weekly Law Reports 1124. The facts of that case show clearly that justice requires that the courts should have a discretion to apportion the shares: and that there should not be a rigid rule of equal shares. I would adopt, in particular, the words of Lord Justice Pearson at page 1132:
"In my judgment, however, the fact that the husband and wife took the property in joint tenancy does not necessarily mean that the husband should have a half interest in the proceeds of the sale now in contemplation. The parties agreed, expressly or by implication from the creation of the joint tenancy, that the house should be the matrimonial home and should belong to both of them (technically to each of them in its entirety) and on the death of one it would belong to the other by right of survivorship. They did not, however, make any agreement, or have any common intention, as to what would happen in the event of the marriage breaking up and the property then being sold. That event was outside the contemplation of the parties. The proper division of the proceeds of sale in that event is left to be decided by the court in this application under section 17. The court has to do this by attributing artificially to the parties a reasonable intention at the time of the transaction in the year 1950, and for this purpose has to take into account not only the nature and form of the transaction, but also (as stated by Romer L.J. in Cobb v. Cobb) 'the course of conduct of husband and wife (including their respective contributions towards the purchase price) at the time when the house was purchased and subsequently.'
"In my judgment the principle, which is shortly stated in the maxim 'equality is equity', though it affords a just solution in many cases under section 17, does not in the present case afford a just solution such as the parties can reasonably be taken to have intended".
In that passage Lord Justice Pearson refers to husband and wife, but his reasoning applies also to persons living together, as if husband and wife. We applied it in such a case. In Cooke v. Head (1972) 1 Weekly Law Reports 518, the house was in the man's name only, but the woman made such substantial contributions that she was awarded a one-third share. I said (at page 520):
"The legal owner is bound to hold the property on trust for them both. This trust does not need any writing. It can be enforced by an order for sale, but in a proper case the sale can be postponed indefinitely. It applies to husband and wife, to engaged couples, and to man and mistress, and maybe to other relationships too".
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