Kamarah Kathleen Inessah Graham-York v Adrian York (Personal Representative of the Estate of Norton Brian York) and Others and Another
| Jurisdiction | England & Wales |
| Judge | Tomlinson LJ,Lady Justice King,Lord Justice Moore-Bick |
| Judgment Date | 10 February 2015 |
| Neutral Citation | [2015] EWCA Civ 72 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 February 2015 |
| Docket Number | Case No: B5/2014/0777 |
[2015] EWCA Civ 72
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
HER HONOUR JUDGE FABER
3CL 10298
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Moore-Bick
Vice-president of the Court of Appeal, Civil Division
Lord Justice Tomlinson
and
Lady Justice King
Case No: B5/2014/0777
Mr Richard Power (instructed by Quality Solicitors Orion) for the Appellant
Miss Sarah Haren (instructed by Russell-Cooke LLP) for the First Respondent
Miss Sheelagh Putnam (instructed by Optima Legal) for the Second Respondent
Hearing date: 12 November 2014
Introduction
Miss Graham-York lived with the late Norton Brian York between 1976 and his death in 2009. They were not married. From 1985 until 2009 they lived together at 17 Marlborough Road, London W4, "the property". The property was upon his purchase of it in 1983 registered in the sole name of Norton York. It remained so registered, and is and has at all material times been mortgaged by Norton York to a mortgagee lender, since 1990 that lender being the Leeds Building Society, "the Building Society".
After Norton York's death Miss Graham-York continued to live and still lives at the property. She appears to have no or no significant income. On 8 January 2011 the Building Society issued proceedings in the Brentford County Court against Adrian York as personal representative of Norton York's estate. Adrian York is the son of Norton York, born of a relationship which preceded that with Miss Graham-York. Adrian York was not on good terms with his late father, by whom he considered both he and his mother had been abandoned when he was a small child. Similarly, Adrian York is not on good terms with Miss Graham-York. After the death of Norton York mortgage arrears developed and as at 6 th January 2011 amounted to £58,283.14. The Building Society sought judgment in respect of the entire indebtedness secured by the mortgage over the property, then £449,561.62, and an order for possession. Unsurprisingly, Adrian York, at this stage the sole defendant to the proceedings, did not contest the claim. On 7 February 2011 District Judge Allen gave judgment for the sum of £449,722 and ordered Adrian York to give the Building Society possession of the property on or before 9 March 2011.
At this point Miss Graham-York applied to be joined to the proceedings. After various interlocutory skirmishes concerning attempted enforcement of the warrant for possession, on 25 August 2011 District Judge Plaskhow directed that Miss Graham-York be joined to the proceedings as Second Defendant. Thereupon she resisted the claim of the Building Society for possession and brought a third party counterclaim against Adrian York alleging that she had a beneficial interest in the property. Her contention was that that interest arose out of a constructive trust giving effect to the common intention of her and the deceased Norton York, and that since she was already in actual occupation of the property when in October 1990 Norton York executed the charge in favour of the Building Society upon which it now relies, her interest was an overriding interest taking priority over the mortgage to which she was not party.
After further seemingly interminable interlocutory skirmishes the matter came before his Honour Judge Dight at The Central London County Court on 13 September 2013. At this hearing Miss Graham-York was represented by Counsel. Judge Dight made an order for possession in favour of the Building Society and ordered the property to be sold. The date for possession was to be fixed after trial. The Order of Judge Dight does not identify the subject matter of the trial for which the judge proceeded to give directions, although the issues may of course have been clear to the parties before him. There was no appeal in respect of any aspect of his Order.
On 3 December 2013, after the adjournment of an earlier fixture, the matter came on for trial before Her Honour Judge Diana Faber, again sitting at The Central London County Court. The trial occupied 5 days. The judge records at the outset of her first, reserved, judgment, dated and made available to the parties on 24 January 2014, that the issues for determination as identified by then counsel for Miss Graham-York, Mr Bernard Devlin, were:-
"1) Does the Second Defendant have a beneficial interest in 17 Marlborough Road (called in this judgment "the property")? 2) Was there an express agreement or arrangement made between her and the deceased that she should be beneficially entitled? Alternatively can a common intention that the Second Defendant would be beneficially entitled be inferred or imputed? 3) Is the claimant entitled to be subrogated to the rights of Barclays Bank under its charge of 15 th October 1982? 4) Is the Second Defendant entitled to an order postponing the date of possession? If so for what period and on what terms?"
The judge appears to have handed down judgment on 19 February 2014, on which occasion she heard further argument and delivered a second, extempore, judgment.
The outcome of the trial, as reflected in Judge Faber's Order of 19 February 2014, was that the judge determined that Miss Graham-York has a beneficial interest in the property to the extent of 25% of its value. She directed that Miss Graham-York give the Building Society possession of the property on or before 8 March 2014. The net proceeds of sale, i.e. the proceeds of sale less the costs of and incidental to the sale, Judge Dight having already ordered sale, were to be applied in such manner that the Building Society is entitled to retain all sums due and owing upon redemption of the mortgage and Miss Graham-York is entitled to 25% of the balance remaining. The further 75% was to be paid into court or otherwise secured pending determination of disputed probate proceedings in the High Court between Adrian York and Miss Graham-York.
Miss Graham-York appeals to this court on two points. First, she says that the judge erred in not determining that her interest in the property was equal in value to that of the deceased Norton York, i.e. the Judge should have found that the property was held in equal shares of 50%. Second, she says that the judge erred in directing that 25% of the net proceeds of sale of the property should be paid to her after, rather than before, payment of the amounts owed to the Building Society by the deceased Norton York.
Neither the judge nor we were supplied with any evidence as to the value of the property, the true extent of which will of course only become apparent on sale, which from the point of view of the Building Society has been long delayed, not least by this appeal. It is said by the Building Society that Miss Graham-York has refused to permit it to carry out a valuation of the property. The only evidence of "value" is an offer for purchase at £1.2 million made in August 2011. I have already recorded that Miss Graham-York appears to have no significant source of income. She has continued to live at the property since the death of Norton York and it is common ground that she has not paid interest as it has fallen due. Her sole contribution to payment of the mortgage debt since 2009 has been a single lump sum payment of £4000. The extent to which she contributed to the servicing of the mortgage before 2009 is a contentious issue about which the judge made findings to which I must revert. Whatever the value of the property, it is obvious that, if Miss Graham-York's proportionate share, whatever it is, is to be paid to her before satisfaction of the claim of the Building Society, then her recovery will be proportionately greater than that consequent upon the Order made by the judge, which in effect awards her a 25% share subject to mortgage. Similarly, resolution of the second point could affect the question whether the Building Society recoups the entirety of the amount secured by the mortgage, including of course the costs of the proceedings to which it is entitled pursuant to the mortgage deed, although by the end of the hearing Mr Richard Power for Miss Graham-York accepted that the Building Society is entitled to recover everything that it is owed. The amount outstanding at the date of the hearing, inclusive of most but not all of the Building Society's costs, was £632,681.67, therefore in excess of a 50% share of an assumed value of £1.2 million. The property is said by Adrian York now to be worth in the region of £1.75 million. The second point therefore ultimately resolved into a debate whether the estate is obliged to indemnify Miss Graham-York to the extent that her interest is diminished by satisfaction of the mortgagee's claim.
The First Issue
Neither Adrian York nor the Building Society challenge the judge's finding that Miss Graham-York is entitled to a beneficial interest in the property. Adrian York submits that the judge correctly evaluated its extent at 25%, an evaluation which, in refusing permission to appeal to this court, the judge described as a "generous estimate" – the emphasis is that of the judge. The Building Society was unconcerned with the evaluation of the extent of the beneficial interest of Miss Graham-York since it was its contention, and ultimately it seems common ground, that it is entitled to recoup itself out of the net proceeds of sale in respect of all outstanding indebtedness secured by the mortgage. The argument on...
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