Mortgage Corporation v Shaire and Others
| Jurisdiction | England & Wales |
| Judgment Date | 25 February 2000 |
| Date | 25 February 2000 |
| Year | 1998 |
| Court | Chancery Division |
Trust of land - Family home - Joint interest - Equitable charge - Equitable chargee applying for order for possession and sale of home - Matters to be considered - Exercise of discretion -
The defendant and F lived together as husband and wife and each had a beneficial interest in their home. The property was the subject of a mortgage executed by the defendant and F in 1987. Following F's death in 1992 it emerged that he had forged the defendant's signature on a number of documents including a charge on the property in favour of the claimant bank. It was accepted that the charge was valid as against F's estate. Repayments on the charge were not met and the claimant applied for an order for possession and sale of the defendant's home pursuant to section 14(1) of the Trusts of Land and Appointment of Trustees Act 1996F1. The defendant opposed the application on the ground that, since section 15 of the 1996 Act required the court to take into account factors other than just the interest of a chargee when deciding whether to make an order under the section, the claimant's desire for an order for sale should not necessarily prevail over her wish to remain in her home.
On the application—
Held, making no order, that, although prior to the 1996 Act the court generally ordered the sale of a family home at the suit of a chargee, Parliament intended, by section 15 of that Act and the replacement of trusts for sale with trusts of land, to give the court a wider discretion when determining applications for the sale of a home; that where an application was made pursuant to section 14(1) the court was required to have regard to the matters in both section 15(1) and section 15(3); that the interest of the chargee was just one of the factors to be taken into account and there was no suggestion that it was to be given any more importance than the interests of the family residing in the property; that the weight to be given to each factor in a particular case was a matter for the court's discretion; and that, in the circumstances, the court would not make an order until the parties had had an opportunity to consider the consequences of the court's conclusions on the law (post, pp 654C–F, 656C–E, 657E–F, 661A).
Per curiam. Although it would be wrong to reject the wealth of learning in the old authorities dealing with opposed applications for the sale of jointly owned property, given the change in the law introduced by section 15 of the 1996 Act, pre-1996 cases should be treated with caution (post, pp 656G–657A).
The following cases are referred to in the judgment:
Abbey National plc v Moss [
Ahmed v Kendrick (
Bankers Trust Co v Namdar (unreported) 18 July 1995, Evans-Lombe J; (unreported) 14 February 1997; Court of Appeal (Civil Division) Transcript No 349 of 1997,
Barclays Bank plc v Hendricks [
Citro (Domenico) (A Bankrupt), In re [
Dennis v McDonald [
Goodman v Gallant [
Lloyds Bank plc v Byrne & Byrne [
Lloyds Bank plc v Rosset [
Midland Bank plc v Cooke [
Penn v Bristol and West Building Society [
Roberts v Johnstone [
Stokes v Anderson [
TSB Bank plc v Marshall [
Thames Guaranty Ltd v Campbell [
Zandfarid v Bank of Credit and Commerce International SA [
Zwebner v Mortgage Corpn Ltd [
No additional cases were cited in argument.
The following additional cases, although not cited, were referred to in the skeleton arguments:
Birmingham Midshires Mortgage Services Ltd v Phillips [
Bristol and West Building Society v Fancy & Jackson [
Firbank's Executors v Humphreys (
First National Securities Ltd v Hegerty [
Midland Bank plc v Cox McQueen [
Portman Building Society v Bevan Ashford [
Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd (Note) [
Westdeutsche Landesbank Girozentrale v Islington London Borough Council [
By a summons and re-amended particulars of claim for possession dated 18 November 1996 issued in the Barnet County Court, the claimant, Mortgage Corpn (formerly Mortgage Corpn Ltd), sought against the defendants, (1) Marsha Shaire, (2) Adam Shaire and (3) the personal representatives of David Barry Fox (deceased), an order for the possession and sale of 74 Winchmore Hill Road, Southgate, London N14. The claim was based on an equitable charge dated 17 January 1990 made purportedly between the claimant and the first defendant and Mr Fox under which £113,000 was advanced.
By an order dated 21 January 1999 the action was transferred to the High Court.
The facts are stated in the judgment.
By a writ and statement of claim dated 22 November 1995 and amended on 8 February 2000 pursuant to the leave of Master Price the claimant, Mortgage Corpn (formerly Mortgage Corpn Ltd), brought an action against (1) Lewis Silkin (a firm), solicitors who acted for the claimant in connection with a mortgage granted to David Barry Fox and Marsha Shaire, for breach of its retainer and/or its fiduciary duty (i) by failing to ensure that the mortgage granted was validly executed, (ii) failing to ensure that the deed of collateral charge was validly executed and (iii) for failing to act as a reasonably competent firm of solicitors, and against (2) Michael Edgar Blaxill, the solicitor who purported to act for Mr Fox and Mrs Shaire, by warranting to the first defendant that he had authority to act for Mrs Shaire when he did not in fact have authority to do so.
The facts are stated in the judgment.
By an order dated 7 June 1999 Master Winegarten ordered that both actions be heard together.
Timothy Harry for the claimants.
Jalil Asif for the first defendant in the first action.
Patrick Lawrence for the defendants in the second action.
Adam Shaire and the personal representatives of David Fox did not appear and were not represented.
25 February. NEUBERGER J handed down the following judgment.
Introduction
This case concerns the extent and nature of the interests enjoyed by Mrs Marsha Shaire and the Mortgage Corpn in 74 Winchmore Hill Road, London N14, and what order should be made in relation to that house. It raises issues as to the basis upon which unmarried parties own beneficial interests in their home or former home, and also the way in which the court should exercise its powers under the provisions of section 15 of the Trusts of Land and Appointment of Trustees Act 1996.
The basic facts
In 1976 Mrs Shaire married Mr Marvin Shaire and they acquired 74 Winchmore Hill Road as their matrimonial home. It cost £18,750, which was mostly provided with the assistance of a mortgage in their joint names in the sum of £15,000 from the Abbey National Building Society, for which they were jointly responsible. The balance consisted of a gift of £2,000 to both of them from Mr Shaire's parents and £1,750 which came from sources which, due to the passing of time, have become unclear.
From the entries at Her Majesty's Land Registry it appears that Mr Shaire was initially the sole proprietor (and that he may even have initially taken out the Abbey National mortgage alone) but it is clear that on 20 January 1977 both Mr and Mrs Shaire were entered at the registry as joint proprietors.
A son, Adam, was born in 1977, but unfortunately the marriage did not prosper, and Mr Shaire left the house in 1980. He continued to provide Mrs Shaire with the funds to make the Abbey National mortgage repayments, as well as the other bills in relation to the house. After Adam started school in 1985 Mrs Shaire began work in a local chemist's shop, where she still works most mornings, and one afternoon, a week.
In early 1986 Mrs Shaire started a relationship with a Mr David Fox. In May 1986 she and Mr Fox told Mr Shaire that Mr Fox had moved into the house and was living with Mrs Shaire. Mr Fox and Mr Shaire then discussed matters in the absence of Mrs Shaire. Following that, on 6 March 1987 a transfer of the house was executed by Mr and Mrs Shaire to Mrs Shaire and Mr Fox. This transfer was said to be made “pursuant to an agreement made in divorce proceedings between the parties in the Divorce Registry … and in consideration of £15,000”. Clause 4 of the 1987 transfer provided: “The transferees declare that the survivor of them can give a valid receipt for capital money arising on a disposition of the land.”
The reference to the Divorce Registry arose from the fact that Mrs Shaire had begun divorce proceedings against Mr Shaire, and, by an order made by consent in the Divorce Registry on 16 March 1987, it was ordered that: “The respondent”—i e Mr Shaire—“had transferred all of his interests in the [house] to the petitioner”—that is Mrs Shaire—“and Mr David Barry Fox.”
It was stated to be in consideration for this transfer, according to the order, that Mrs Shaire and Mr Fox paid to Mr Shaire the lump sum of £15,000. In consideration for this, the order recited, all...
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