Day (Lilian) v Day (Philip)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WARD,SIR MARTIN NOURSE |
| Judgment Date | 14 March 2006 |
| Neutral Citation | [2006] EWCA Civ 415 |
| Docket Number | A3/2005/1429 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 March 2006 |
[2006] EWCA Civ 415
Lord Justice Ward
Sir Martin Nourse
A3/2005/1429
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT CHANCERY DIVISION
(MR L HENDERSON QC)
Royal Courts of Justice
Strand
London, WC2
MR A DAVIES (instructed by Messrs Fenwick & Co, London, WC1V 6DT) appeared on behalf of the Appellant
MR D MARGOLIN (instructed by Messrs Turner & Debenhams, 107 St. Peters Street, St. Albans, AL1 3EW) appeared on behalf of the Respondent
Judgement
The background to this appeal is this, stating the matter very shortly. It is a sad and sorry dispute between a mother and her son about the beneficial ownership of the net proceeds of sale, amounting to nearly £194,000, of a property in Chorleywood which was sold in September 2001 following the death in April of that year of the registered proprietor of the property, the late Mrs Elsie Day, whom I shall call Elsie.
The property itself was a council house built at the end of the Second World War. Elsie and her husband William were the original tenants and lived in that property from 1947 onwards. There they brought up their five children. In due time the children left to make their independent lives. William died in 1978, leaving Elsie as the sole tenant of the property. She eventually lived there alone. The claimant, now the appellant, Mrs Lillian Day, married Elsie's eldest son John in 1952. John died in 1992. The claimant and John had seven children, the eldest being Phillip, the defendant. By her last will Elsie left the property to Phillip, and her executrix accordingly paid the net proceeds of sale to Phillip after it had been sold.
John and the claimant lived nearby in a council house which they originally rented in 1955, and there they brought up their seven children. In about 1978, before the introduction of the right to buy legislation, they were able to buy that property from the local council and clearly thought that was a good idea. Consequently, in about 1985, John recommended to his mother that she exercise her right to buy the property under the legislation then in force. The property was agreed to be worth £37,250 and she was entitled to a 60% discount, leaving a balance to be paid of £14,900. John agreed to put up the money, which it seems likely that he borrowed from his bank, Elsie agreeing to charge the property to the bank as security for that loan.
But what precisely was agreed or understood between Elsie and John was the main issue at the trial. Mr Lancelot Henderson QC, the Deputy Judge of the Chancery Division, summarised the rival contentions of the parties in this way, at paragraphs 28, 29 and 30:
"28. The Claimant's primary contention is that it was the common intention of Elsie and John, when the Property was bought from the Council in 1985 that it should be a home for Elsie for the rest of her life, and thereafter should belong to John. It is therefore alleged in paragraph 9 that the Particulars of Claim are that Elsie held the property 'on a common intention constructive trust for herself for life, with remainder to [John].' An alternative contention in paragraph 10 of the Particulars of Claim that she held the Property on a resulting trust for John absolutely is no longer pursued, and the Claimant's fallback position is that Elsie held the Property on a resulting trust for herself and John in the ratio of 60:40, treating the value of her right to buy discount for this purpose as a contribution to the purchase price."
"29. Phillip's primary contention, by contrast, is that the sum of £14,900 which John contributed towards the purchase of the Property was intended by him and Elsie to be a gift, and took effect as such. The result on this analysis is that Elsie was the sole beneficial owner of the Property, and was entitled to dispose of it by her will as she thought fit. Her initial intention, given effect in her 1985 will, was to leave the Property to John, but in 1989, in the light of John's financial difficulties and the risk that he might be made bankrupt, she made her second will leaving the Property to Phillip."
"30. Phillip's fallback position is the same as the Claimant's, namely that Elsie held the Property on resulting trust as to 60 per cent for herself and as to 40 per cent for John."
The claimant impressed the Deputy Judge as:
"a patently sincere witness, but she was prone at times to confusion and her recollections were often hazy as she was then a woman of some 72 years of age."
He considered that Kevin, her second son, was the driving force in the litigation and he made a most unfavourable impression on the judge, coming across as an:
"aggressive, self-satisfied bully ready to tell lies whenever it suited him."
The judge found that Phillip's treatment of his mother was:
"in general distant and cold-hearted, and he did not enjoy a close relationship with her or indeed with any of his younger brothers and sisters."
That said, the judge considered him to be:
"in general a truthful witness, although always concerned to try and put everything in the best possible light from his point of view."
So it is quite clear that there was, and sadly, it seems to me, is very bad blood between the defendant and the other members of his family.
The judge came to these conclusions at paragraphs 38 and 39:
"38. It was accepted by Counsel on both sides … that their fallback position was logically the starting point, and that it should prevail unless I was positively satisfied on the evidence either that there was a common understanding in the terms contended for by the Claimant, or else that John made a gift of his contribution to his mother."
"39. Having heard the oral evidence, and carefully considered the submissions on each side, I have come to the clear conclusion that there is no solid evidence to displace the resulting trust analysis, and accordingly that the Property was held by Elsie when she acquired it upon trust for herself and John in undivided shares of 60 per cent and 40 per cent respectively."
He dismissed the claimant's primary claim, holding in paragraph 40:
"The fatal obstacle to this contention is the lack of any firm evidence that there was indeed an agreement or understanding between Elsie and John at the time when the Property was acquired, to the effect that the Property was to be hers for the remainder of her life and that it should then belong to John absolutely."
He rejected Phillip's primary case that John made a gift of his contribution to his mother, because (paragraph 44) :
"It seems to me inherently most improbable that John would have been content to provide the whole of the cash needed to purchase the Property without requiring any stake in it."
Accordingly, on 23 June 2005 the Deputy Judge declared that the parties were beneficially entitled to the net proceeds of the sale in shares of two fifths to the claimant and three fifths to the defendant. The defendant was entitled to credit in respect of certain amounts he had paid out of the proceeds of sale to his brothers and sisters, and indeed a small sum to the claimant herself; and allowing for that credit, he ordered that the defendant pay the claimant the sum of £53,185.65 together with interest eventually agreed at £10,214.16.
He then heard argument on the question of costs and ordered that the defendant pay the claimant's costs until 14 February 2005, but with no order for costs thereafter. The appellant now appeals, with permission granted by Jacob LJ, against the Deputy Judge's refusal to...
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