Graves v Graves
| Jurisdiction | England & Wales |
| Judge | Lord Justice Thomas,Lord Justice Hughes,Mr Justice Coleridge |
| Judgment Date | 03 July 2007 |
| Neutral Citation | [2007] EWCA Civ 660 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B4/2006/2249 |
| Date | 03 July 2007 |
[2007] EWCA Civ 660
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THEALDERSHOT & FARNHAM COUNTY COURT
Deputy District Judge Haig-Haddow
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Thomas
Lord Justice Hughes and
Mr Justice Coleridge
Case No: B4/2006/2249
Claims No: 6AF00761 and 6AF0253
Tamsin Cox (instructed by Herrington & Carmichael) for the Appellant
Martin Strutt (instructed by Davies Blunden & Evans) for the Respondent
Hearing date: 24 April 2007
The dispute in this case began as a result of the termination of a tenancy granted by Mr Graves to his former wife, Mrs Graves, of a house in Fleet, Hampshire. For reasons I shall explain, Mr Graves began proceedings in the Aldershot and Farnham County Court for possession of the house. The proceedings came before Deputy District Judge Haig-Haddow for a multi-track trial for possession. The judge found that the tenancy agreement was void for mistake or alternatively was frustrated. He ordered payment to Mrs Graves of two thirds of the deposit paid and applied the balance as occupation rent for part of the time she had remained in possession. The judge also varied a maintenance order in respect of one of the children of the marriage which had been made in 1998.
Mr Graves appeals to this court by permission of Neuberger LJ on the issues of frustration and mistake, the order for payment and on the question of whether, in the circumstances, the judge should have varied the original maintenance order.
The background to the marriage and the financial settlement on its dissolution and the facts and evidence relating to the tenancy can be briefly summarised.
The background
Mr and Mrs Graves were married on 14 February 1992. On the marriage Mr Graves treated Mrs Graves's son Anthony as a child of the family and in December 1992 a child of the marriage, Bethany, was born.
In July 1997 a decree nisi was pronounced. There were proceedings in relation to maintenance. On 5 January 1998 an order was made by consent by District Judge Cooper which provided for a clean break; Mrs Graves received a significant amount of capital and Mr Graves was ordered to pay £300 per month for Bethany and Anthony by way of maintenance. That sum was index -linked.
Subsequently Mr Graves agreed that Mrs Graves and the children could return to the former matrimonial home. Thereafter she lived with her children (and another child born of a subsequent relationship) in a series of houses owned either by Mr Graves alone or by Mr and Mrs Graves jointly. In April 2002 Mr Graves became redundant and fell behind with the payment of child maintenance. In circumstances, which it is not for present purposes necessary to go into, Mr Graves in June 2003 transferred his half share in a house at Fleet, which they jointly owned, to Mrs Graves for £8,500. Under the agreement Mrs Graves waived the claim for the children's future maintenance which was assessed as having a value of £50,000. The agreement was not referred to the court and the order of 5 January 1998 was not varied.
As Mrs Graves was unable to maintain mortgage payments on that house she sold it at the end of 2004 and, after repaying the mortgage and her debts, she was left with approximately £17,000. She was qualifying to be a radiographer and had little by way of income.
The arrangement made in respect of 37 Longmead
Mr Graves had moved to Germany to live with his partner and 2 children of that relationship. He still retains property in this jurisdiction. One of those properties, 37 Longmead, Fleet, became vacant in November 2004 because the tenant was leaving. Mrs Graves needed somewhere to live. She asked Mr Graves whether she and the children could live there. It is clear that Mr Graves wanted to be sure that he would receive his rent. He was worried that, in view of the fact he was not paying child maintenance, Mrs Graves might not pay the rent as an indirect way of obtaining maintenance from him.
As he knew that Mrs Graves did not have the income to pay the rent, he wanted to be sure that the bulk of the rent would be paid through the payment of housing benefit to Mrs Graves. The judge made the following finding about the arrangements made:
“I accept Mr Graves' evidence when he said “I believed majority of rent was to be paid by Housing Benefit ….. she said [she had] not sufficient money to pay. The tenancy was on condition of her getting the Housing Benefit. I would never have granted the tenancy, if Housing Benefit were not to pay. We operated on the mistaken basis that Housing Benefit would be paid”. Mr Graves had wisely enquired of Housing Benefit of Hart District Council whether as they had previously been married and had children the benefit would be paid. They said it would. I also accept Mrs Graves evidence to the same effect. She said “I would not have taken the property on unless Hart said Housing Benefit would pay. I would not have lost my £12,000 or spent money doing up the house which was the last money I had”. She had also enquired of Hart District Council whether the fact that they had been married and had children affected her entitlement to Housing Benefit and was told that it did not.”
The finding that Mr Graves had enquired of the Housing Benefit Office of Hart District Council was challenged. We have considered Mr Graves' witness statement and the transcript of his evidence. It is clear that the Judge misunderstood his evidence; although Mrs Graves said that Mr Graves had spoken to the Council, Mr Graves never gave evidence that he had enquired directly himself of the Housing Benefit Office of the District Council; his evidence was that he had been told of this by Mrs Graves. It was submitted on behalf of Mrs Graves that the judge was entitled to make the finding he did on the basis of Mrs Graves' evidence; that was not the way the judge expressed himself and I consider that the finding he made was made on a misunderstanding of the evidence of Mr Graves.
Mrs Graves was also told that housing benefit would not be payable unless she was in occupation. Accordingly a tenancy agreement was executed and dated 4 December 2004 granting an assured shorthold tenancy of 37 Longmead to Mrs Graves and her children for 12 months from 1 February 2005 at a rent of £1,150 a month payable in advance on the first day of each month. On 1 February 2005 she went into occupation and paid Mr Graves £12,000 by way of deposit and £1,150 as the first month's rent.
Hart District Council had given Mrs Graves wrong advice; she was not entitled to housing benefit. The Council refused to pay housing benefit on the ground that Mr Graves was Bethany's father. Mrs Graves subsequently received compensation of £1,000 from the Council's ombudsman for the incorrect advice she had been given. However, Mrs Graves had paid over nearly all her capital to Mr Graves in the form of a deposit and had spent £2,000 on making the house more comfortable. She did not have the funds to pay the rent due for March 2005.
The position in which Mrs Graves found herself was a very difficult one. The judge found that she had no funds to pay what would be required if she was to move to another house—a 3 month deposit, the first month's rent and the moving expenses. If she left 37 Longmead voluntarily, the local authority would not re-house her save in bed and breakfast or hostel accommodation; the judge accepted her evidence that this would be wholly unsuitable for the children.
The judge heard oral evidence on how Mr and Mrs Graves tried to resolve the position and considered the written exchanges between them, including exchanges by text. Initially Mrs Graves had told Mr Graves that she was prepared to leave if he paid her back in full. The judge went on to find that she changed her position:
“Mrs Graves was prepared to leave provided .., as her final proposal, £6,250 of her deposit was paid back and in those circumstances, she would be out by 31 July 2005.”
Mr Graves did not accept the offer. He said he would keep the £12,000 for the rent for the following months and, when the money ran out, he would start eviction proceedings against her and the children.
Mr Graves did as he said he would. During the remaining months of 2005, he did not serve notice or any take any other step to require Mrs Graves and the children to leave; he demanded no rent or other sum.
The commencement and course of the proceedings
On 10 January 2006, he served notice under s. 8 of the Housing Act 1988 and on 13 January 2006 he served notice pursuant to s. 21 of the same Act. On 23 February 2006 possession proceedings relying on the s. 8 notice were issued. On 2 August 2006 further proceedings relying on the s. 21 notice were served.
Mrs Graves served a defence on 20 April 2006; in it she included a claim that Mr Graves had failed to pay maintenance and had not done so for a considerable time. On 6 July 2006 there was a hearing for directions before District Judge Manuel. Directions were made which were appropriate to a possession action and not to proceedings in relation to a variation of an earlier maintenance order in the light of the financial settlement that had been subsequently made.
On 21 September 2006 the trial of the possession action came on before the Judge at Aldershot County Court. Mr Graves was represented by counsel and Mrs Graves appeared in person. Mr Graves and counsel who appeared for him both believed that the trial was to be a trial of the...
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