Goodman v Gallant

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeLORD JUSTICE SLADE
Judgment Date30 Oct 1985
Docket Number85/0638

[1985] EWCA Civ J1030-4

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL

ON APPEAL FROM THE HIGH COURT OF JUSTICE

FAMILY DIVISION (PRINCIPAL REGISTRY)

(Mr. Registrar Turner)

Royal Courts of Justice

Before:

Lord Justice Slade

Lord Justice Purchas

and

Sir Roualeyn Cumming-Bruce

85/0638

In The Matter of The Trustee Act 1925

And In The Matter of The Trusts Affecting 127 Daws Heath Road, Rayleigh in The County of Essex.

Between:
Patricia Mavis Goodman
Appellant (Plaintiff)
and
Brent David Gallant
Respondent (Defendant)

MR. TIMOTHY J.W. SCOTT (instructed by Messrs Gregson Owles & Roach, Shoeburyness) appeared on behalf of the Appellant/Plaintiff.

MR. BERNARD J. DEVLIN (instructed by Messrs Parker, Fogg & Pinsent, Hornchurch) appeared on behalf of the Respondent/Defendant.

LORD JUSTICE SLADE
1

This is the judgment of the court.

2

This is an appeal by the plaintiff, Mrs. Goodman, from an order of Mr. Justice Hollis made on 28th June 1985, whereby he dismissed her appeal from an order of Mr. Registrar Turner dated 22nd November 1984. The Registrar had before him an originating summons by which the plaintiff sought against the defendant, Mr. Gallant, an enquiry and declaration as to their respective beneficial interests in a house known as 127 Daws Heath Road, Rayleigh, Essex. His decision, subsequently upheld by the learned judge, was that the plaintiff and the defendant held the property on trust for themselves in equal shares.

3

Since the question which arises for decision on this appeal is solely one of law, the salient facts can be briefly stated. The plaintiff in 1960 married a Mr. Goodman. He purchased the house on mortgage. Though it was conveyed into his sole name, the plaintiff's evidence is that it was never in doubt between the two of them that she had a 50% beneficial interest in it. There were three children of the marriage. In 1971 Mr. Goodman left. In about 1975 or 1976 the plaintiff began to associate with the defendant and in due course they started to live together.

4

During the course of 1978 negotiations took place with a view to the purchase by the plaintiff and the defendant from Mr. Goodman of the house or his interest in it. The learned judge was told that in 1978 the property was worth some £17,000 to £18,000, though there is no evidence that any valuation of it had been obtained. The negotiations culminated in a conveyance dated 23rd June 1978 ("the conveyance") whereby Mr. Goodman conveyed the fee simple in the property to the plaintiff and the defendant, who were together referred to as "the Purchasers". The conveyance recited that Mr. Goodman had agreed with the purchasers for the sale to them of the freehold interest in the property for the price of £6,700. By Clause 1 it was provided that, in pursuance of the said agreement and in consideration of the sum of £6,700 paid by the Purchasers to Mr. Goodman (of which he acknowledged the receipt), he conveyed to the Purchasers the property "to hold the same unto the Purchasers in fee simple as beneficial joint tenants". Clause 2 began as follows:

"The Purchasers hereby declare as follows:

(a) the Purchasers shall hold the property upon trust to sell the same with power to postpone the sale thereof and shall hold the net proceeds of sale and net rents and profits thereof until sale upon trust for themselves as joint tenants."

5

In early 1983 the plaintiff served on the defendant a written notice dated 1st March 1983, which described the property in a schedule and stated:

"I hereby give you notice of my desire to sever as from this day the joint tenancy and equity of and in the property described in the Schedule hereto now held by you and me as joint tenants both at law and in equity so that the said property shall henceforth belong to you and me in equal shares."

6

Mr. Scott, who appeared for the plaintiff, told us that it is in fact possible that any beneficial joint tenancy had been severed by earlier correspondence. Nevertheless, the apparent intention of this particular notice of severance, which was no doubt drafted by the plaintiff's legal advisers at that time, was clear enough, namely that she and the defendant should thenceforth hold the property in equal shares.

7

However, on 22nd April 1983 she issued an originating summons seeking an inquiry and declaration as to their respective interests and supported it by an affidavit in which, in the light of the facts and for the reasons there deposed to, she stated her belief that the effect of the purchase from Mr. Goodman was to leave her owning three-quarters of the house and the defendant owning one-quarter. This affidavit was answered by an affidavit sworn by the defendant in which in substance he asserted that his own intention was that the property should be held by the two of them as beneficial joint tenants. Affidavits in reply to the defendant's evidence were sworn by the plaintiff and by Mr. Goodman, who stated that he had always regarded the plaintiff as having a one half beneficial interest in the property and that it was his understanding and intention that the conveyance should merely transfer to the plaintiff and the defendant his one half beneficial interest in the property.

8

However, neither the Registrar nor Mr. Justice Hollis were invited to go into the evidence. They were invited to deal with a preliminary point of law, raised on behalf of the defendant, which can be simply summarised in two propositions said to be based on a line of previous decisions of this court, namely that—

(1) the declaration contained in the conveyance stating that the plaintiff and the defendant hold the property in trust for themselves as "joint tenants" is conclusive as to the nature of their respective beneficial interests;

(2) the inevitable effect of the severance of this beneficial joint tenancy was to leave them entitled to the property or its proceeds of sale in equal shares.

9

These in effect were the propositions upheld by the Registrar and subsequently by the learned judge who said:

"However much I may in a sense dislike it, I think that I am clearly bound by the decisions of the Court of Appeal in Wilson v. Wilson, in Leake v. Bruzzi and in Pink v. Lawrence, which were all unanimous decisions on the meaning of similar declarations as to beneficial interests as is found in this case."

10

Before turning to these and other relevant decided cases, we should refer to the relevant provisions of the Law of Property Act 1925 and make a few observations as to their effect. Section 36(1) provides:

"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."

11

The purpose of the parenthesis "in like manner….." is, in our judgment, simply to refer back to sections 34(2) and 35, which provide in effect that where the legal estate in land is expressed to be conveyed to sui juris persons as tenants in common, the conveyance operates as if the legal estate had been conveyed to them as joint tenants upon trust for sale and to hold the net proceeds of sale upon such trusts as may be requisite for giving effect to the rights of the persons interested in the land.

12

In the present case, therefore, even if the conveyance of the fee simple in the property to the plaintiff and the defendant jointly had contained no express trust for sale and no declaration as to the beneficial interests, a trust for sale would still have arisen through the combined effect of sections 34 to 36 of the Law of Property Act 1925.

13

However, sections 34 to 36, while importing a trust for sale in certain cases where it would not otherwise have arisen, are designed merely to simplify the mechanics of conveyancing. They have no effect whatever on the nature and extent of the respective beneficial interests in the proceeds of sale of the several persons interested. Accordingly, in our judgment, the provisions of Clause 2(a) of the conveyance, by which express trusts are declared concerning the beneficial interests in the property or its proceeds of sale, cannot be regarded as otiose. The position is quite the contrary.

14

In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property (as would be required for an express declaration of this nature by virtue of section 53(1)(b) of the Law of Property Act 1925), the way is open for persons claiming a beneficial interest in it or its proceeds of sale to rely on the doctrine of "resulting, implied or constructive trusts": (see section 53(2) of the Law of Property Act 1925). In particular, in a case such as that, a person who claims to have contributed to the purchase price of property which stands in the name of himself and another can rely on the well known presumption of equity that a person who has contributed a share of the purchase price of property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust: (see, for example, Pettitt v. Pettitt [1970] AC.777 at pp. 813–814 per Lord Upjohn). If, however, the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of the doctrine of resulting implied or constructive trusts unless and until the conveyance is set aside or rectified; until that event the declaration contained in the document speaks for itself.

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2 books & journal articles
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