Parker-Tweedale v Dunbar Bank Plc
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE NOURSE,SIR MICHAEL KERR,LORD JUSTICE PURCHAS |
| Judgment Date | 14 December 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J1214-1 |
| Docket Number | 89/1216 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 December 1989 |
[1989] EWCA Civ J1214-1
Lord Justice Purchas
Lord Justice Nourse
and
Sir Michael Kerr
89/1216
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PETER GIBSON J.
Royal Courts of Justice
THE APPELLANT (Plaintiff) appeared in person.
MR. TIMOTHY LLOYD Q.C. and MR. STEPHEN ACTON (instructed by Messrs Clintons) appeared on behalf of the First Respondents (First Defendants).
MR. HENRY SUMMERFIELD (instructed by Messrs Philip Ross & Co.) appeared on behalf of the Second Respondents (Second Defendants).
MR. STEVEN WHITAKER (instructed by Messrs Baldocks) appeared on behalf of The Third Respondent (Third Defendant).
In this case a husband claims that a mortgagee, in exercising its powers of sale over joint property of which his wife was the sole legal owner and mortgagor, owed him an independent duty to take reasonable care to obtain a proper price. He also claims that the mortgagee did not take reasonable care and did not obtain a proper price. Peter Gibson J. decided both issues in favour of the mortgagee and the husband has now appealed to this court.
The husband is the plaintiff in the action, Mr. Barry James Parker-Tweedale. The mortgagee is the first defendant, Dunbar Bank plc ("Dunbar"). The second defendant is Penbrook Land Ltd. ("Penbrook"), to which company the mortgaged property was sold by Dunbar, with notice, so the plaintiff alleges, of Dunbar's breach of its duty to him. The third defendant is the plaintiff's former wife, Annabel Theresa Parker-Tweedale ("the wife"), against whom it was alleged that she had given her consent to the sale in breach of trust to the plaintiff. At the opening of the hearing before the learned judge he was informed that the plaintiff had reached a settlement with the wife, who took no further part in the proceedings except as a witness. After a trial lasting 22 days, the judge, in a judgment running to nearly 42 pages of transcript, dismissed the action as against both Dunbar and Penbrook.
One of the principal matters which was in dispute at the trial was the plaintiff's claim that he was entitled to a beneficial interest in the mortgaged property. In that claim he was successful, the judge holding that the effect of three separation agreements between him and the wife was that the plaintiff was entitled to the surplus proceeds arising on the sale of the mortgaged property after discharging the borrowings secured on that property and also on another property, which had been acquired for the wife. Against that holding Dunbar has not appealed. Penbrook put in a respondent's notice on that point, but it has not been necessary for it to be argued. The effective elimination of any dispute as to the plaintiff's beneficial interest in the mortgaged property makes it possible for the facts to be stated with greater brevity than in the court below. They can be stated mainly in the judge's own words.
The plaintiff and the wife were married in 1973 and they had two children who were born in 1979 and 1982. Between 1980 and 1984 they lived in Cobham, Surrey, where they jointly owned a house which had been purchased with the aid of a mortgage from Dunbar. In September 1984 the plaintiff, who wished to move further away from London, found a property in Gloucestershire known as Ditchford Hill Farm near Moreton-in-the-Marsh, ("Ditchford"). At that time the marriage was breaking up. The parties had had numerous rows and the wife had spoken to the plaintiff of divorce. She was not keen to move to Gloucestershire, but agreed to do so on terms that Ditchford was to be in her sole name.
The purchase of Ditchford took place by three stages in December 1984 and April and September 1985. In order to help finance the third stage, part of the land which had been acquired at the second stage was resold. The total purchase price, less the amount received on the resale, was £248,000. At the end of the third stage the property consisted of a period farmhouse with farm outbuildings, a small bungalow and nearly 50 acres of land.
The wife became the sole legal owner of each part of Ditchford. At each stage the purchase was made with the aid of borrowings from Dunbar, in whose favour the wife executed legal charges dated 19th December 1984 and 16th April and 13th September 1985. The effect of those charges was to charge the property with payment to Dunbar of all moneys and liabilities then or thereafter owing or incurred to it from or by the plaintiff and the wife on any account. Each legal charge contained a provision that the statutory power of sale should immediately be exercisable at any time after the moneys owing on the security should become payable. Facility letters were issued to the plaintiff and the wife. On 3rd September 1985, pursuant to a term in the facility letter issued in respect of the third stage, the plaintiff executed a statutory declaration declaring that he occupied Ditchford as licensee under a licence determinable at will. He agreed that such rights, if any, as he might have or acquire to share in or occupy Ditchford should be postponed and be subject to the rights, interests and remedies of Dunbar as mortgagee, and that he would not assert or maintain against Dunbar any rights, interests or claim in equity or by way of overriding interest or otherwise. The practical effect of the statutory declaration was to deprive the plaintiff of any right which he might otherwise have had to remain in possession of Ditchford as against Dunbar; cf. Williams & Glyn's Bank v. Boland [1981] A.C. 487.
In early 1985 the plaintiff and the wife moved to Ditchford, but in mid-February the plaintiff was knocked down by a car and seriously injured. His severe injuries caused him to be in hospital for several weeks and for many months adversely affected his earning capacity as an investment analyst, his income having previously been substantial. The accident marked the start of a progressive decline in the plaintiff's finances. By the beginning of October 1985 the borrowing secured on Ditchford had reached some £164,000 and it was necessary for Dunbar's loan facility to the plaintiff and the wife to be increased to £180,000. It was at about the same time that the plaintiff and the wife agreed to separate. That led to the execution of two separation agreements between the plaintiff and the wife on 4th October 1985 and 26th February 1986, together with a further agreement and deed of indemnity executed at the same time as the second agreement.
Broadly speaking and so far as material, the effect of the arrangements between the plaintiff and the wife was that the wife should purchase in her own name Wilkes Farm, near Stratford-upon-Avon ("Wilkes") for £130,000 as a home for herself and the children. The purchase of Wilkes was completed in April 1986 partly with £72,500 borrowed from Dunbar and secured on Wilkes, partly with £55,000 borrowed from the Co-operative Bank and secured by a second mortgage on Ditchford and as to the balance and the expenses of the purchase by the plaintiff himself.
As a further term of the arrangements, the plaintiff undertook to reduce the amount of Dunbar's mortgage on Wilkes from £72,500 to £20,000 by the end of August 1986, at which date he had made no reduction at all. At about the same time he failed to pay the interest due to Dunbar on the moneys secured on Ditchford. Dunbar thereupon obtained an order in the county court for possession of Ditchford, but the plaintiff was able to remain in possession by persuading the wife to agree to further borrowings from the Co-operative Bank on Ditchford. That was the subject of a third separation agreement made on 5th January 1987, by which the plaintiff further agreed, first, to offer Ditchford for sale for the best possible price with all reasonable speed and, secondly, that the mortgage on Wilkes should be discharged on the sale of Ditchford. Thus it was recognised to be essential to the long term security of the wife and the two children in their new home at Wilkes that Ditchford should be sold.
Between January 1987 and May 1988 there followed long and often complicated negotiations between the plaintiff and Dunbar, the plaintiff and the wife and the plaintiff and various other interested parties, whose broad purpose was to enable the plaintiff to retain the main house at Ditchford and some of the land, and at the same time to pay off the mortgage on Wilkes. Those negotiations, which for present purposes are largely irrelevant, came to nothing. On 27th May 1988 Dunbar as mortgagee, with the approval of the wife as mortgagor, sold the whole of Ditchford to Penbrook for £575,000. That is the transaction of which the plaintiff complains in this action. It is only necessary to deal with the previous negotiations and events in so far as they bear on the propriety of that sale.
On 3rd November 1987 Dunbar was able to enforce its possession order in respect of the main house at Ditchford and on 16th February 1988 it obtained possession of the remainder. In November 1987 Dunbar instructed Knight, Frank & Rutley to advise on how Ditchford should be sold. Mr. Forsyth-Forrest, an associate partner with that firm, advised that it be offered for sale by auction in two lots, with an anticipated price of between £300,000 and £345,000. Once it had obtained possession of the whole, Dunbar instructed Strutt & Parker to act jointly with Knight, Frank & Rutley on the sale of Ditchford by auction. On 18th March 1988 Knight, Frank & Rutley advised that it would fetch between...
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