Equity and Law Home Loans Ltd v Prestidge and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MUSTILL,LORD JUSTICE BUTLER-SLOSS,LORD JUSTICE MANN |
| Judgment Date | 03 October 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J1003-7 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 91/0932 |
| Date | 03 October 1991 |
[1991] EWCA Civ J1003-7
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE TRURO COUNTY COURT
(MR RECORDER BURNETT, Q.C.)
Royal Courts of Justice
Lord Justice Mustill
Lord Justice Butler-Sloss
Lord Justice Mann
91/0932
and
MR GEORGE BROWN, instructed by Messrs Gregory Rowcliffe & Milners (London Agents for Messrs Davies Partnership, Penzance, Cornwall), appeared for the Appellant (Second Defendant).
MR STEPHEN LENNARD, instructed by Messrs Winter-Taylors (High Wycombe, Bucks), appeared for the Respondents (Plaintiffs).
The First Defendant did not appear and was not represented.
In November 1987 Mrs Ivy Brown was the owner of 50 Queen Margaret's Road, Coventry. She was a divorced woman who was living with Mr K.J. Prestidge. They decided to move to Pendeen in Cornwall and they set up house with her three children at "Fair-view", 11 Jubilee Place in that town. For this purpose Mrs Brown sold the house in Coventry for a net sum of £10,340. The purchase price of "Fairview", namely £39,950, was met as follows. Mrs Brown put in a little less than £10,000 from the proceeds of sale of the Coventry house. The rest was raised by a mortgage of £30,000 taken out with Britannia Building Society (hereafter "Britannia"). The Deed of Charge named Mr Prestidge alone as the borrower, and he alone covenanted to make the repayments. So also with the conveyance of "Fairview" which was in the sole name of Mr Prestidge.
In her evidence in the county court Mrs Brown explained, and the Recorder accepted, that the choice of Mr Prestidge as the only party to the transaction, notwithstanding that Mrs Brown was putting up one quarter of the price, was deliberate and was taken on the advice of their solicitor; the reason being, apparently, that Mrs Brown had a county court judgment outstanding against her, and it was thought that this might make the building society less willing to lend if she was shown as jointly interested in the transaction. At all events, she undoubtedly knew very well that her name did not feature in the documents. In a written statement put in evidence in the county court she gave this explanation:
"I remember being worried about the arrangements and discussing the matter with my parents. As a result, I went back to see Mr. Stewart [he was the solicitor] again and said 'I want my name to be on the title deeds'. I remember Mr. Stewart saying 'You've got nothing to worry about. It's all in black and white. You've put money into this house and you've heard what Mr. Prestidge has said about that and anyway you'll be getting married. If you don't get married, we can always sort this problem out after you've purchased 'Fairview'. I do not recall Mr. Stewart saying anything about the problem being one of time as there was a contract race. Davies Partnership have explained to me that an amendment of the mortgage offer to Mr. Prestidge in order to include me may well have caused a delay and this was perhaps what Bate Edmunds were concerned about. I honestly do not recall any mention of this difficulty. As Mr. Stewart had said I had nothing to worry about, I let the matter go through. I was very concerned throughout the transaction and indeed considered withdrawing from the whole business. I spoke with Prestidge on the telephone in Cornwall on many occasions and his reaction to my saying I would withdraw was to reassure me that as far as he was concerned, 'Fairview' was mine."
Evidently Mrs Brown continued to be worried for we find her writing to the solicitor on 4th December 1987 as follows:
"Also, I would be very grateful if you could make up some kind of papers to show I sold my house, and put all I had left to pay a quarter of this one. It might seem silly, but it is best to be careful."
The solicitor does not appear to have replied. However, on 13th April 1988 he wrote to Mr Prestidge and Mrs Brown jointly as follows:
"In the meantime, perhaps you could let me know whether it is still your intention to transfer 'Fairview' into your joint names. If so, I can then retain the Title Deeds from the Britannia for a while longer to deal with these formalities. If not, I must then return them to the Building Society straight away."
There is no reply to these letters included in the documents before us, but we see that on 6th May a few weeks later the solicitor wrote to them in these terms:
"As to the transfer of the property, I would suggest that you wait until you are actually married and then approach a local office of the Britannia Building Society for an application form to transfer the Mortgage into joint names. Once that has been approved, it will be a simple enough matter for us to transfer the property itself."
The two addressees of the letter do not seem to have replied.
A serious problem then arose concerning the sale of the Coventry house. The details do not matter for present purposes. It is sufficient to say that a claim was made by Coventry Council for repayment of a discount allowed to Mrs Brown when she purchased the house, which had originally been council property, and which had not been taken into account when Mrs Brown put up the whole of the net proceeds of sale as her contribution to the purchase of "Fair-view". Evidently the difficulties which ensued caused her to lose confidence in her solicitor, for on 21st July she went with Mr Prestidge to consult new solicitors, Messrs Jewill Hill & Bennett, who then took over negotiations concerning the discount.
Although both parties were concerned in giving instructions to the new solicitors, Mr Prestidge must already have been planning to cheat Mrs Brown, for only a few days later we find him in touch with mortgage brokers with a view to arranging an advance on "Fairview" in his name alone. The intended mortgagees were Equity & Law Home Loans Limited, the present plaintiffs. In their first letter to Mr Prestidge they made these enquiries:
"You do not appear on the voters roll. Please forward a written explanation along with documentary evidence of your address ie. Driving Licence, Bank Statement, etc. Please confirm whether any other person over the age of 17 years will be residing in the property. Could you please confirm what Life Assurance Policy you require in conjunction with your mortgage."
Mr Prestidge replied on 17th August:
"As requested in your letter dated the 15–8–88 I am not on the Voters Roll because it is not brought up to date until October each year. I enclose evidence of my address. Also, the only other person over the age of 17 residing at the property will be a Mrs Ivy Brown who is my common law wife."
Further on in time still Mr Prestidge filled in an enquiry form relating to the mortgage, in which in response to a question, "Is this mortgage either to purchase a new residence or to improve your main residence?" he had ticked the box relating to improvements, and further on in the form under the heading "Non-Owner Occupant's Details" is written the name Ivy Ann Brown. In the box marked "Reasons for Occupation or Relationship to Borrower" he had written "Common Law Wife", and under the heading "Have They Executed Deed of Consent" he had ticked the box marked "No", and had added "but will".
The plaintiffs were evidently reassured by this response, and they made a formal offer, which was accepted, and after some delay an advance was made of £42,835 net, secured by a charge on "Fairview" in the name of Mr Prestidge. It seems that part of this sum was used to redeem the mortgage with Britannia Building Society and that the rest was pocketed by Mr Prestidge.
At the hearing in the county court Mrs Brown gave evidence, which the learned Recorder accepted, that she knew nothing at the time about the redemption of the Britannia mortgage and the re-mortgage to Equity & Law, and only found out about these transactions in late November 1988. The firm of solicitors who acted for Mr Prestidge in the redemption and re-mortgage have in turn asserted in correspondence that they did not know that Mrs Brown even existed, let alone that she was residing in the property.
Not long afterwards the relationship between Mr Prestidge and Mrs Brown broke down, and he ceased to reside at "Fairview". He never made any repayment under the Equity & Law mortgage, and Mrs Brown (who by now was living on social security) could not do so. Subsequently, Mr Prestidge informally renounced all his title to the house, but no documents have been executed to recognise whatever interest therein Mrs Brown may possess.
On these facts the learned Recorder gave...
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