Jones v Challenger
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DEVLIN,LORD JUSTICE ORMEROD |
| Judgment Date | 14 March 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J0314-1 |
| Court | Court of Appeal |
| Date | 14 March 1960 |
In the Matter of the Law of Property Act, 1925
In the Matter of a Trust for Sale Affecting 10, Bailey Street, Deri, Bargoed
[1960] EWCA Civ J0314-1
Lord Justice Ormerod,
Lord Justice Devlin and
Mr. Justice Donovan.
In The Supreme Court of Judicature
Court of Appeal
MR. H.W. JAP ROBERT (instructed by Messrs Parlett, Kent & Co., agents for Messrs Norman Morgan & Davies, Cardiff) appeared as Counsel on behalf of the Appellant (Applicant).
MR. PHILLIP WIEN (instructed by Mr. W.H. Williams, Caerphilly) appeared as Counsel on behalf of the Respondent (Respondent).
Considered
I have had an opportunity of reading the Judgment about to be delivered by Lord Justice Devlin in this case. I am in full agreement with it and there is nothing I can usefully add.
This is an appeal from a decision of His Honour Judge Temple Morris given in the Bargoed County Court on the 5th August, 1959. The matter before the learned Judge was an application under section 30 of the Law of Property Act, 1925, for an Order that the Respondent as co-trustee with the Applicant of a house known as 10, Bailey Street, Deri, Bargoed, should concur with the Applicant in offering the property for sale, or alternative that the property should be sold by order of the Court. The Applicant and Respondent were formerly husband and wife, and, on 7th March, 1956, while they were still married, they purchased for £375 the lease of No. 10 Bailey Street. The lease was for 99 years and was created in 1867. So that at the time of the purchase it had about 10 years to run. The assignment of the lease was granted to the purchasers as trustees to sell the same with power to postpone the sale thereof upon trust for themselves as joint tenants. The learned County Court Judge has carefully investigated the circumstances in which the house was bought and has reached the conclusion, which is not challenged, that the money which went to buy it was provided by the parties equally. They are thus beneficiaries in equal shares.
Unfortunately, shortly after the purchase, the marriage broke up, and in 1957 the husband filed a petition for divorce on the ground of the wife's adultery and cruelty. It was not defended, and a decree was given against her on the ground of her adultery, which was made absolute on the 9th February, 1959. Before the divorce proceedings began, the wife had bought another house and was living apart from her husband, and in March, 1959, she remarried. The wife does not want to live in No. 10 Bailey Street; she wants her share of its value in cash. The husband does not want to sell. He has throughout continued to live in No. 10 Bailey Street and wishes to go on doing so. He regards it as his home and does not wish to go into lodgings. There is some prospect that he may marry again, but it is quite indefinite; the lady in question is a married woman and no proceedings have yet been instituted.
Section 30 of the Law of Property Act, 1925 , provides that, if trustees for sale refuse to sell, any person interested may apply to the Court for an order directing the trustees for sale to give effect thereto, and the Court may make such Order as it thinks fit. The learned County Court Judge reviewed the cases in which this section has been considered and came to the conclusion that he had a complete discretion to do what was reasonable in the circumstances. He said: "I think it would not be reasonable to order a sale at this moment, the effect would probably be to put the Respondent out. He is there alone, he was nowhere to go. He is in his own home. His half share is in it. The Applicant's half share is quite safe in it. All the circumstances must be examined, the Applicant has chosen her new life, and is living in her new home with her husband. It may well be in the future, possibly the very near future, the situation will change, but at this moment I think this application is premature. Today, I think the attitude of the Respondent is reasonable."
I do not think that on any view the application can properly be described as premature. The marriage broke up three years ago, and applications to divide up the property of a husband and wife are frequently made under the Married Women's Property Act, 1882, section 17, while the marriage is still alive. This marriage is irretrievably finished, and the application was not made until two months after the decree absolute had been pronounced. I think that the wife is entitled to know where she stands. Apart from the uncertain prospect of the husband's remarriage, there is no likelihood that the circumstances will change. If circumstances do not change, the effect of the Judge, Order must be that the husband can continue to use the house as his home for so long as he wants or until the lease expires. The Value of the lease hold must be diminishing, and, if the lease runs its course, the wife may lose all the money she put into it. There does not appear to be any case which an order under section 30 has been made where the trust property consists of what was formerly the matrimonial home. The learned county court judge had no clear authority to guide him in arriving at his decision and neither have we. After careful consideration of the authorities and some hesitation, I have come to the conclusion that the learned Judge applied the wrong test and that the question is not whether it is reasonable or unreasonable that the husband should be allowed to remain in the house.
At the front of his argument on behalf of the wife Mr. Ap Robert put the case of Re Mayo, 1943 Chancery, page 302. In this case Mr. Justice Simonds (as he then was) said at page 304: "The trust for sale will prevail, unless all three trustees agree in exercising the power to postpone." If that dictum governs this case, Mr. Ap Robert must succeed. But he felt a difficulty in pushing his argument to this extent because of what was said by the Master of the Rolls, Lord Greene, in Buchanan-Wollastons's Conveyance, 1939, I chancery, page 738, where he laid down the principle more widely, and said at page 747 that the Court must ask itself "Whether or not the person applying for execution of the trust for sale is a person whose voice should be allowed to prevail."
The apparent difference between these two dicta is, I think, explained when the different facts in the two cases are considered. Re Mayo was a simple uncomplicated case of a trust for sale of freehold property where the beneficiaries were brother and sister and where there was no suggestion that either of them were intended to or even wished to occupy the property. Mr. Justice Simonds was applying the simple and fundamental principle that in a trust for sale there is a duty to sell and a power to postpone; and that accordingly one trustee may call upon the others to perform the duty, but all must be agreed if they are to exercise the power.
But this simple principle cannot prevail where the trust itself or the circumstances in which it was made show that there was a secondary or collateral object besides that of sale. Mr. Justice Simonds in his judgment in Re Mayo said that If there were mala fides, the position would the position would be different. If it be not mala fides, it is at any rate wrong and inequitable for one of the parties to the trust to invoke the letter of the trust in order to defeat one of its purposes, whether that purpose be written or unwritten, and the Court will not permit it. In Buchanan-Wollaston, four owners who each had separate but neighboring properties, combined to buy a piece of land which they desired to keep as an open space. The land was conveyed to them as joint tenants and consequently a statutory trust for sale came into existence by virtue of section 35 of the law of property Act, 1925. The parties then entered into a covenant in which they agreed in effect to preserve the land as an open space. One of the parties subsequently sold his property and then applied against the opposition of the others to have the piece of land sold. The application was refused and it is plain from the Judgment that in such circumstances the Court has a complete discretion to do what is right and proper and will not allow the voice of the man who is in breach of his obligation to prevail.
Three other cases were cited as supporting this order principle. The facts in Re Hydes' Conveyande, decided by Mr. Justice Danckwerts in 1952, are to be found only in a note in the Law Journal, Volume 102, at page 58. Two brothers jointly purchased property for occupation by a company in which they were both interested and for the erection of a factory thereon. Subsequently they quarreled and one brother applied for an Order under section 30 for the sale of the property. The company was still a going concern and the applicant had abandoned a petition for its winding up; he had also refused an offer from the other brother based on the full market value of the property as settled by an independent value. The application was refused. Mr. Justice Danckwerts appears to have been satisfied that the applicant was acting out of spite and said that he was endeavoring to use the trust for sale to defeat the purpose for which the land had been acquired.
In Re No. 39 Carr Lane, 1953, I all England Reports, page 699, a husband and wife held property, which was in fact the matrimonial home, on trust for sale as tenants in common in equal shares. A judgment creditor of husband applied for an Order under section 30, which was refused by Mr. Justice Upjohn (as he then was) on the ground that he creditor was not a person interested. But the Judge went ion to say that the creditor could in any event have no better right than the husband and that the husband could not obtained on order...
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