Harman v Glencross and Another

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE BALCOMBE,LORD JUSTICE FOX,LORD JUSTICE MUSTILL
Judgment Date20 December 1985
Judgment citation (vLex)[1985] EWCA Civ J1220-8
Docket Number85/0884
Date20 December 1985

[1985] EWCA Civ J1220-8

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL

ON APPEAL FROM THE HIGH COURT OF JUSTICE

FAMILY DIVISION

(MR JUSTICE EWBANK)

Royal Courts of Justice.

Before:

Lord Justice Fox

Lord Justice Mustill

Lord Justice Balcombe

85/0884

No. 8199 of 1982

Harman
and
Glencross & Anor

MR WALTER A. AYLEN. Q.C., and MR D. MARTINEAU (instructed by Messrs. Cecil Altman & Co.) appeared on behalf of the Appellant.

MR NICHOLAS MEDAWAR, Q.C. and MR J. HARWOOD-STEVENSON (instructed by Messrs. Parkes & Wilshire) appeared on behalf of the Respondents.

LORD JUSTICE BALCOMBE
1

This is an appeal from a judgment of Ewbank J. dated 16th February 1984, reported in (1985) Fam. 49, whereby he dismissed an appeal from an order of Mr Registrar Angel. The Registrar's order, made on 9th May 1983, was to the effect that a charging order obtained by a judgment creditor of a husband on the husband's beneficial interest in the matrimonial home should be subject to any order made in favour of the wife on her application made in divorce proceedings for a Property Adjustment Order. On 10th May 1983 the Registrar, on that application, ordered the husband to transfer his interest in the matrimonial home to the wife, thus leaving nothing on which the judgment creditor's charging order could bite. The judgment creditor has appealed to this Court.

2

The facts may be stated briefly. The husband, Roy Leslie Glencross, and the wife, Maureen Glencross, were married on 30th May 1970. Shortly before their marriage, on 23rd March 1970, they had purchased for the price of £6,200 the house which was to become the matrimonial home, 155 Daneland, East Barnet, Herts, with the aid of a mortgage in the sum of £6,200 from the Leek and Westbourne (now the Britannia) Building Society. The property, which was registered land, was transferred into their joint names and was held by them on a beneficial joint tenancy.

3

The husband and the wife entered into occupation of the matrimonial home and created two further legal charges over the property: one on 13th February 1973 in favour of Julian S. Hodge & Company (now Chartered Trust) as security for a loan to the husband to provide business capital, and another on 15th November 1979 in favour of Lloyds Bank, to secure the overdraft of a firm, Acorn Contractors, in which the husband had been, since May 1979, a partner with Mr Martin Alexander Harman. The wife alleged that the husband procured her signature to the charge in favour of Lloyds Bank by representing to her that the overdraft facility, and hence the limit of the charge, would not exceed £2,000; in fact the overdraft went up to £4,500. The husband maintained that the wife, who was not inexperienced in business matters (having worked as a bank employee and an accounts officer with a financial institution) fully appreciated the extent of the charge in favour of Lloyds Bank. The Judge did not find it necessary expressly to resolve this conflict of evidence, although in considering "all the circumstances of the case" he listed the nine points made on behalf of the wife, including her claim that she had been cheated by the husband in relation to the bank charge, and came to the conclusion that the case for postponing the charging order in favour of any order the wife might get in the divorce proceeding was overwhelming.

4

There are two children of the marriage, both girls, born on 4th February 1975 and 4th November 1976.

5

In August 1980 the husband left the matrimonial home, leaving the wife and children in occupation. On 12th January 1981 the wife filed her divorce petition which included the usual prayers for ancillary relief, including a Property Adjustment Order. In March 1981 she served on the husband a notice of her intention to proceed with her application for ancillary relief. On 19th May 1981 the wife served on the husband a notice severing the beneficial joint tenancy of the matrimonial home. The Decree Nisi was granted on 20th May 1981 and was made absolute on 1st February 1982. From August 1980, when he left the home, the husband paid the outgoings on the house and maintenance to the wife, but these payments ceased in September 1981.

6

In January 1981 Mr Harman's solicitors wrote to the husband about moneys put into the firm of Acorn Contractors by Mr Harman, or on his behalf. The husband's solicitors replied to this letter, referring to the wife's divorce proceedings and to proposals that they had put to the wife's solicitors for the sale of the matrimonial home and for an equal division of the net proceeds of sale. Some abortive proceedings by one of Mr Harman's companies followed, but on 22nd May 1981 Mr Harman issued a specially endorsed writ in the Queen's Bench Division of the High Court, claiming against the husband the sum of £9,251.83. The husband put in no defence to this claim, and on 21st July 1981 judgment was entered against him in the sum of £9,251.83 plus costs of £100. Hereafter I shall refer to Mr Harman as "the judgment creditor".

7

The judgment creditor then applied for a charging order on the husband's beneficial interest in the house. The affidavit in support of this application made it clear that, the judgment creditor understood that the house was in the joint ownership of the husband and the wife. The application made ex parte in accordance with R.S.C. Order 50 rule 2, came before Master Elton on 17th August 1981, who then made a charging order nisi. No notice of this order was served on the wife and she remained in ignorance of its existence. The charging order was made absolute by the Master on 7th September 1981. The precise wording of the order absolute (which follows the prescribed form, No. 76, in Appendix A to the R.S.C) is, so far as relevant, as follows:

8

"It is ordered that the interest of the defendant Roy Lester (sic) Glencross in the asset specified in the schedule hereto stand charged with the payment of £9,351.83….. and interest thereon at the rate of 15 per cent. per annum…. until payment together with £50 the costs of this application…."

9

The Schedule starts with the printed words: "Describe with full particulars the relevant land, securities, funds or trust…." and underneath there has been inserted in manuscript: "Freehold property known as 155 Daneland, East Barnet in the County of Hertfordshire".

10

The wife proceeded with her application for ancillary relief. At some time she became aware of the existence of the charging order, and on 30th December 1981 made an application for its discharge or, alternatively, its variation by providing that the interest charged should be "such interest (if any) as the (husband) shall, after the hearing of the (wife's) application for ancillary relief (including inter alia a Property Adjustment Order in respect of the said charged property) in divorce proceedings (identified) retain in the asset specified".

11

In her affidavit in support of this application, the wife swore that, in view of the husband's desperate financial circumstances and of the priority attaching to the provision of proper housing for the children and herself, it was her intention to ask for a full transfer of the husband's interest in the house.

12

The judgment creditor, in turn, swore an affidavit stating that while he knew of the divorce proceedings between the husband and the wife, he was not aware that she had applied for a Property Adjustment Order until he read her affidavit.

13

On 18th May 1982, on the wife undertaking to transfer her application for ancillary relief from the County Court to the Family Division of the High Court, Master Elton transferred the judgment creditor's Queen's Bench action against the husband, and the wife's application for discharge or variation of the charging order, to the Family Division, "…with the intention that this application be heard by the court hearing the wife's application for ancillary relief in her divorce proceedings". The wife's two applications thus came before Mr Registrar Angel on 9th May 1983, and on that date Mr Registrar Angel made an order: (1) that the husband should forthwith transfer to the wife his legal and beneficial interest in the matrimonial home, subject to the existing mortgage in favour of Britannia Building Society and the charges in favour of Chartered Trust and Lloyds Bank; (2) that the wife should indemnify the husband in respect of his liability under the mortgage and charges; (3) upon transfer of the husband's interest to the wife, the wife's remaining claims for ancillary relief should stand dismissed; and (4) a nominal order against the husband for periodical payments to the children.

14

Since at the date of that order the provisions of Section 24A of the Matrimonial Cuases Act, 1973, had not been brought into force, and the decision of this Court in Dipper v. Dipper (1981) Fam 31 still obtained, it necessarily follows that the wife consented to the dismissal of her other claims for ancillary relief, in particular her claim for periodical payments, even though the order was not expressed to be made by consent.

15

Once the Registrar had made the order of 9th May postponing the charging order to any order made on the wife's application for a Property Adjustment Order, the judgment creditor ceased to have any interest in the proceedings, since the Registrar had made it clear that he proposed to transfer the husband's interest in the house to the wife, and this he did in the absence of the judgment creditor on the following day. The judgment creditor appealed to the Judge who, as already stated, dismissed the appeal.

16

At the hearing before the Judge it was accepted that the house was worth £31,500. The mortgage and the two charges amounted to £9,100; the...

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