Cadogan v Cadogan

JurisdictionEngland & Wales
JudgeLORD JUSTICE GOFF,LORD JUSTICE BUCKLEY
Judgment Date09 March 1977
Judgment citation (vLex)[1977] EWCA Civ J0309-3
Docket Number1974 C No. 8526
CourtCourt of Appeal (Civil Division)
Date09 March 1977
Between:
Edith Maud Cadogan
Plaintiff
(Appellant)
and
Walter Andrew Cadogan
Defendant
(Respondent)

[1977] EWCA Civ J0309-3

Before:

Lord Justice Buckley

Lord Justice Goff

and

Lord Justice Shaw

1974 C No. 8526

In The Supreme Court of Judicature

Court of Appeal

On Appeal from the High Court of Justice

Chancery Division Group A

(Mr. Justice Slade)

MR. J.F. MUMMERY (instructed by Messrs. Mayo & Perkins, Solicitors, Eastbourne) appeared on behalf of the Plaintiff (Appellant).

MR. OLIVER AUBERY (instructed by Messrs. Gwyn, James & Co., Solicitors, Cinderford) appeared on behalf of the Defendant (Respondent).

LORD JUSTICE BUCKLEY
1

This is an appeal from an order of Mr. Justice Slade of 21st June 1976 whereby, on an interlocutory application, he struck out parts of the plaintiff's statement of claim and part of the Prayer for relief depending upon those parts of the statement of claim. The application, which of course was the application of the defendant, was made under 0. 18, r. 19, subparagraphs (a), (b), (c) and (d); but it seems that the grounds under paragraphs (b) and (d), that is to say, that the pleadings sought to be struck out were scandalous frivolous or vexatious, or were an abuse of the process of the court, were not proceeded with before the learned judge, and the matter was disposed of under subparagraphs (a) and (c) of paragraph 1 of the rule.

2

For present purposes the facts of the case must be taken to be those which are pleaded in the statement of claim, and I shall shortly state what they are. The plaintiff was married to her husband, Michael Francis William Cadogan in 1942; I shall refer to him as "the husband" or "her husband" for simplicity. In about 1947 the plaintiff and her husband bought as their matrimonial home a house and property in Gloucestershire. The purchase price was only £900, and of that amount £400 is alleged to have been provided by the plaintiff out of her own money, the balance having been provided by a mortgage obtained by the husband in his own name. The property was convoyed into the sole name of the husband. I assume that in course of time he paid off the mortgage.

3

On that basis the plaintiff in the action seeks a declaration that the husband held the property upon a resulting trust for himself and her in equal shares, or in such other shares as the court should determine.

4

In April of 1949 the plaintiff and her husband separated and have never since lived together; the plaintiff left the matrimonial home.

5

On 5th October 1973 the husband presented a petition for divorce, based on the long separation of the parties; in her acknowledgement of service of that petition the plaintiff stated that she wished to make application for financial relief by way of maintenance, payment of a lump sum, transfer of property and variation of settlement. That was on 18th October 1973. Four days later, on 22nd October 1973, the husband purported to make a voluntary conveyance of the property in Gloucestershire in favour of the defendant, who is one of the two children of the marriage.

6

On 26th October 1973 the husband's solicitors wrote to the plaintiff's solicitors stating that the husband had no capital assets; that was no doubt a state of affairs achieved by the voluntary conveyance of the property to his son. On the next day, 27th October, the defendant purported to grant a lease of the property back to the husband for a term of 21 years at a rent of 5p a year, subject to determination at any time after the husband's death on one month's notice in writing.

7

On 10th December 1973, a decree nisi was granted in the divorce proceedings, but that decree was never made absolute, because the husband died on 31st December 1973. Letters of Administration of the estate have been granted to the plaintiff, and by a notice dated 16th October 1974 the defendant purported to give notice terminating the leasehold interest under the lease. In these circumstances the plaintiff claims that the defendant holds the property upon a constructive trust for himself and the plaintiff in equal shares, or such other shares as the court shall determine; that is to say, she claims that the defendant holds the property on a like trust to the trust upon which the father held it before the voluntary conveyance. She asks for certain ancillary relief in that matter, and then she claims in the alternative, asthe statement of claim was originally framed, an order that the voluntary conveyance of 22nd October 1973 be set aside and cancelled.

8

It was the allegations which are relied upon to support that alternative claim to relief which were sought to be struck out of the statement of claim, as well as the Prayer for the alternative relief.

9

Certain Particulars were given under paragraph 13 of the statement of claim; that is a paragraph in which the plaintiff alleges that the voluntary conveyance of the property by the husband to the defendant was intended to defeat the plaintiff's claim for financial relief against the husband and was therefore fraudulent and ought to be set aside. Those Particulars are to be found on page 18 of our bundle of documents, but I do not think I need read them.

10

In the course of the hearing before the learned judge, Mr. Mummery, appearing for the plaintiff, conceded that his statement of claim in its original form required some amendment to plead expressly the terms of the Law of Property Act 1925, Section 172 and, as will emerge, amendments have been produced in this court to make the pleading accord with what now is the case which the plaintiff wishes to put forward. We have of course been referred to the notes in the Supreme Court practice under 0 18, r.l9, which emphasise that the jurisdiction to strike out a pleading, or any part of a pleading, is one which should only be employed in clear cases. I think that on this appeal we are really only concerned with the question of whether the defendant has shown that this is such a clear case, and that the plaintiff's contentions in favour of her alternative claim to relief are clearly unarguable.

11

Section 172 of the Law of Property Act, 1925 , replaced a Statute of Elizabeth 1, 13 Eliz. 1, c. 5, which was in verydifferent terms but which had, until the Act of 1925 came into operation, been the statute which governed the whole question of dispositions made in fraud of creditors.

12

Section 172 (1) is in these terms: "Save as provided in this section, every conveyance of property, made whether before or after the commencement of this Act, with intend to defraud creditors, shall be voidable, at the instance of any person thereby prejudiced". It will be observed that the last five words are "… of any person thereby prejudiced", and Mr. Mummery for the plaintiff has argued that under that section anyone is entitled to take the benefit of the section if a disposition has been made in fraud of creditors, even though that person is not strictly to be described as a creditor, but is a person who has been prejudiced by the allegedly fraudulent disposition. The learned judge, in the course of a clear judgment, held that there was a triable issue upon the question of whether the voluntary conveyance was made with intent to defraud creditors; but he took the view that the argument that the plaintiff could bring herself within the words "… any person thereby prejudiced", was one that was clearly unsustainable. (He reached that conclusion on page 11 of the transcript of his judgment).

13

The argument which had been presented to the learned judge was to this effect; I will read from his judgment: "Mr. Mummery on her behalf" - that is to say, on the plaintiff's behalf - "recognised that the plaintiff on the facts as pleaded had never been a creditor of the husband, but he" (Mr. Mummery) "indicated that the argument which he would seek to put forward on her behalf, which he conceded is a novel one unsupported by authority, is that, in addition to the two classes of creditors already referred to" - and I say in parenthesis that those are creditors at the date of the disposition who have not been paid off, and creditorswho have become creditors since the date of the disposition - "there is a third class of persons who have the right to get a conveyance set aside under section 172; this class comprises those persons who, like the plaintiff in the present case, as at the date of the conveyance had a claim against the grantor through statute or common law which, while not giving rise to a present debt, could result in those persons becoming creditors of the grantor in the future. A person falling within this category, he submitted, has been prejudiced by the relevant conveyance, at least if one looks at the matter at the date of the conveyance. A person who has been thus prejudiced, he submitted, is entitled to have the conveyance set aside even though, by the time his proceedings are launched, supervening events may have occurred, as in the present case, which render it impossible that he can in fact ever become a creditor of the grantor. The plaintiff, in his submission, can put forward a claim by virtue of this right, even though she cannot do so as the personal representative or as a person beneficially interested in the husband's estate", and then the learned judge said that, attractively though the argument had been put, he thought it was clearly unsustainable.

14

Mr. Mummery had apparently submitted that the plaintiff's claim was one which could be quantified as at the date of the voluntary conveyance, although she was not then a creditor of her husband; but the learned judge thought that that was an argument which could not be sustained. He expressed the view that the Statute of Elizabeth had been one which was for the protection of creditors, and creditors only and that the Law of Property Act 1925 section 172 should be read in the like way, so as to treat the...

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1 books & journal articles
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    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
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