Harwood v Harwood
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SLADE |
| Judgment Date | 18 December 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J1218-4 |
| Docket Number | 90/1180 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 December 1990 |
[1990] EWCA Civ J1218-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
PRINCIPAL REGISTRY
(MR. JUSTICE EASTHAM)
Royal Courts of Justice
Lord Justice Slade
and
Lord Justice Butler-Sloss
90/1180
No. 944 of 1988
THE PETITIONER (APPELLANT) appeared in person.
MR. TIMOTHY SCOTT (instructed by Messrs. F.J. White & Co., Solicitors, London, SW18 1QG) appeared on behalf of the Respondent (Respondent).
There are before the court two appeals, each with the leave of the judge, from a judgment of Eastham J. given in matrimonial proceedings on 20th November 1989. The first is an appeal by Mrs. Betty Lynne Harwood ("the wife") from those parts of his order by which he ordered her to pay to Mr. Charles Judson Harwood ("the husband") the lump sum of £50,000 upon the transfer to her of his interest in the property 146 Rosendale Road, London, SE21 upon the sale of that property and that there be no order as to costs inter partes. Though a large number of issues are raised in the lengthy notice of appeal of the husband, who has throughout been acting in person, his appeal as presented to us is in substance one from those parts of the judgment by which the judge decided that the husband and wife held the legal estate in the property as trustees upon trust for sale for themselves as tenants in common in equal shares, and also decided that the wife should have custody of a child of the family, Jonathan Hale Harwood. We shall deal with the custody issue in a separate judgment. This judgment is directed to the other issues raised by the respective appeals.
We can take the history of the matter largely from the judge's full and careful judgment. The wife is now 43 years of age. The husband is now 48 years of age. They are both citizens of the United States of America. The husband is an American attorney, though it would appear that he has not practised law since about 1975. He married the wife on 29th July 1970. There are two children of the family, namely Noell Brooke Harwood, always called "Brooke", who was born on 19th December 1970 and Jonathan Hale Harwood, who was born on 17th April 1975. In 1977 the family came to England and have remained there ever since. Having occupied a rented house in the Clapham area at some stage, the family then moved to 146 Rosendale Road as tenants.
In 1978 or 1979, the husband conceived the idea of producing a taxation magazine, in respect of which he required some financial backing. This culminated in a partnership between the husband and a gentleman called Richard H. Stollenwerck. He is always called "Stoney", and for brevity we will so refer to him. The judge found that the partnership was a partnership at will on the usual terms that the profits and losses would be shared equally on a fifty-fifty basis. In 1979 and 1980, Stoney made financial contributions totalling $50,000 to the partnership, which bore the name of the magazine itself, "Taxes International".
After 1979, the husband maintained two bank accounts for partnership purposes at American Express Bank, one being a sterling account and the other being a dollar account. The wife knew that Stoney was an investor in what, as between herself and her husband, was always referred to as "the company" and that he had lent $50,000 to the partnership and had guaranteed its overdraft. However, her evidence was that the husband in conversations with her referred to the partnership as "his" company and that she so regarded it, believing that he could use the funds of "the company" for his own purposes.
After the formation of the partnership, the husband was drawing from it a cash salary, described by him as "compensation", together with the rent and outgoings of 146 Rosendale Road, where he and his family were living, and in addition car expenses. Although the rent was in fact paid to the landlords by the partner-ship which was using the property, it was understood between the husband and Stoney that the rent and other outgoings on the property formed part of the husband's remuneration. The husband was always the managing partner. Stoney was never active in the partnership business.
In 1982, the landlords of 146 Rosendale Road wished to sell it. The wife negotiated with them a "subject to contract" price of £68,000, which she communicated to the husband. This was subsequently the agreed sale price. On 12th February 1982, Mrs. Mortimer of Messrs. D.J. Freeman & Co., solicitors who were acting for the husband and wife in the proposed purchase, wrote to them asking for their instructions as to whether they would hold the property as joint tenants or tenants in common. In her letter she said this:
"Under English law, the property may be held by you jointly either as joint tenants or as tenants in common. If you hold the property as joint tenants, then on the death of one of you, the property will automatically pass to the survivor. If you hold the property as tenants in common, then each of your shares in the property will pass according to your will or under the intestacy rules if you have made no will. If it is your intention to leave the property to each other on the death of either of you then it is simpler for you at the time of bereavement if you hold the property as joint tenants because the transfer is automatic. The death simply needs to be noted at the Land Registry. Otherwise if it is not your intention, then you should hold the property as tenants in common. May I please have your instructions?"
On 19th February 1982, Mrs. Mortimer made an attendance note in which she recorded:
"I have asked the Harwoods if they wish to hold the property as joint tenants or as tenants in common (having explained to them the difference) but they may wish to take the property in the name of a company (although I have advised them that this may affect their mortgage)."
By that time, it would appear, the husband and wife had decided that part of the money required to finance the purchase would be borrowed from a bank on mortgage and it was further in contemplation that another part would or might be provided by the partnership. The husband, who had discussed the purchase of the house with Stoney over the telephone, wrote to him on 12th March 1982 saying:
"I am maintaining two principal bank accounts for partnership business at American Express Bank [he then gave the sterling and dollar account numbers] and all transactions in those accounts are for the account of the partnership and all assets purchased from those accounts are partnership property."
Stoney, in his reply of 23rd March 1982, wrote:
"I note that all assets purchased from the partnership's two principal bank accounts at the American Express Bank are partnership property even though they may have been acquired in your own name. I assume furthermore that any assets purchased with the help of funds I have provided or guaranteed irrespective of the bank or credit institution involved are also partnership property. I am thinking in particular of the house which may be financed through another organisation. Would you be kind enough to confirm this point?"
The judge found that at some time after receiving Stoney's letter of 23rd March 1982, the husband did confirm the point raised by Stoney and that thereafter he undoubtedly dealt with Stoney on the basis that the house was to be partnership property. Nevertheless, arrangements continued for the transfer to be taken not in the names of the partnership or of the husband alone but in the joint names of the husband and wife, on the footing that the wife would join the husband in executing a mortgage of the property in favour of the lender bank.
On 30th May 1982, the husband drew a cheque for £6,800 on the partnership American Express account 01542427 in favour of the estate agents instructed by the vendors, representing a 10% deposit on the purchase price. It was arranged that £50,000 of the purchase price would be raised by a mortgage advance from Barclays Bank. On 29th April 1982, Mrs. Mortimer wrote to the husband and wife asking them for a banker's draft or building society cheque in favour of her firm for £13,521.20 calculated as follows: After the deposit of £6,800 already paid, and the mortgage advance from Barclays Bank of £50,000 had been deducted from the purchase price of £68,000, this left a sum of £11,200. To that sum there had to be added the solicitors' professional charges, VAT and disbursements amounting to £793.20, stamp duty on the transfer amounting to £1,360 and a Land Registry fee of £168, making a total of £13,521.20. In response to this request, a banker's draft for £13,521.20 was drawn on the partnership account No. 01542427 which, after the addition of a charge for the banker's draft of £2.50, resulted in a debit to that account of £13,523.70 on 6th May 1982.
The deed of transfer ("the Transfer") was sent to the husband and the wife for execution under cover of a letter from their solicitors of 11th June 1982. The Transfer enclosed had by then been stamped and executed under seal by the two vendors, but had not yet been executed by either the husband or the wife. The wife had no clear personal recollection of executing the document, but on the balance of probabilities the judge inferred from her contemporary endorsement "returned June 14th 1982" that she had duly done so.
The Transfer was in the very short printed Land Registry Form 19 (JP), with appropriate typed additions. It stated that the vendors "as...
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