Stack v Dowden
| Jurisdiction | England & Wales |
| Judge | Lord Justice Chadwick,Lord Justice Carnwath,Lady Justice Smith |
| Judgment Date | 13 July 2005 |
| Neutral Citation | [2005] EWCA Civ 857 |
| Docket Number | Case No: B2/2004/2208 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 July 2005 |
[2005] EWCA Civ 857
Lord Justice Chadwick
Lord Justice Carnwath and
Lady Justice Smith
Case No: B2/2004/2208
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON CIVIL JUSTICE CENTRE
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Levy QC
Chy04209
Mr Alan Barton (instructed by Walter Jennings & Son, 259/263 Kentish Town Road, London NW5 2JT) for the Appellant
Mr Francis Wilkinson (instructed by Attiyah Lone of 106-107 King Street, Hammersmith, London W6 0QP) for the Respondent
This is an appeal from an order made on 6 October 2004 by His Honour Judge Levy QC sitting at the Central London County Court in proceedings brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The property to which the proceedings relate is a dwelling house known as 114 Chatsworth Road, Willesden Green, London N2. The property is registered at Her Majesty's Land Registry in the joint names of the parties to the proceedings, Miss Dehra Anne Dowden and Mr Barry Alan Stack. The appeal provides an opportunity to review the principles by which the respective beneficial interests of unmarried co-habitees in property registered in their joint names are to be determined in the light of the recent decision of this Court in Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211.
The proceedings were commenced by Mr Stack in or about September 2003. His claim was for a declaration that the property was held by the parties upon trust for themselves as tenants in common in equal shares; and for an order for sale. The judge made an order in those terms. He directed payment out of the proceeds of sale, in advance of division into equal shares, of sums intended to recompense Mr Stack for his cost of renting alternative accommodation since October 2002.
The claimant's primary submission – express trust
The property was transferred to Miss Dowden and Mr Stack, as purchasers, by a transfer dated 27 August 1993. The transfer contains no words of trust. But it does contain a declaration by the purchasers that the survivor of them is entitled to give a valid receipt for capital money. Paragraph 2 is in these terms:
"The Purchasers declare that the survivor of them is entitled to give a valid receipt for capital money arising from a disposition of all or part of the property."
It was Mr Stack's primary submission at the trial that the property had been transferred to the parties subject to the express trust that they held the beneficial interest as joint tenants in equity. In November 2002 Miss Dowden served notice of severance. It is common ground that, if there were a joint tenancy in equity, it was then severed and the parties held the property thereafter as beneficial tenants in common in equal shares.
A declaration in the form of that in paragraph 2 of the transfer deed in this case is consistent with the right of survivorship, inherent in a joint tenancy, extending to the beneficial interests in the proceeds of sale – section 36(2) of the Law of Property Act 1925. It is not apt in a case where there is a beneficial tenancy in common – section 27(2) of that Act. The appropriate (and usual) declaration in a case where the parties intend from the outset that their beneficial interests shall be as tenants in common in equity – whether in equal or unequal shares – is that a valid receipt for capital monies cannot be obtained from the survivor alone. A declaration in that form will lead to a restriction on the register to that effect under section 58(3) of the Land Registration Act 1925.
The judge did not accept that the declaration contained in paragraph 2 of the transfer deed was sufficient, of itself, to lead to the conclusion that the property had been transferred subject to an express trust for the parties as beneficial joint tenants in equity. He addressed the point, shortly, in the opening sentence of paragraph 19 of his judgment:
"The second paragraph of that transfer certainly suggests that there was to be a joint tenancy of the Property, but it is not sufficient by itself for there to be an express declaration of trust, as was found in one of the cases to which [counsel] had referred me."
The case which the judge had in mind as authority for that proposition was, I think, Huntingford v Hobbs [1993] 1 FLR 736.
The submission advanced on behalf of Mr Stack in the court below—but rejected by the judge—is pursued in this Court by a respondent's notice. Mr Stack invites this Court to uphold the judge's order directing payment out of the proceeds of sale to the parties in equal shares on the grounds that this is a case in which the property was transferred subject to an express trust declared in the transfer deed, that the beneficial interests of the parties under that express trust were as joint tenants and that the beneficial joint tenancy under that express trust has been converted into a beneficial tenancy in common in equal shares by severance.
It is, I think, common ground – and, if it is not common ground, it is not open to serious dispute – that, if there were an express trust from the outset, there would be no need to consider, as the judge did, what interests might have arisen (in the absence of an express trust) under resulting or constructive trusts. The express trust would be determinative of the present interests. It is appropriate, therefore, to address that issue first.
That can be done shortly. Huntingford v Hobbs (supra) was a decision of this Court. The facts in that case (so far as material in the present context) are indistinguishable from those in this case. The property had been transferred into the joint names of the parties by a transfer which contained no declaration of trust in express terms, but which did include a declaration as to the power of the survivor to give a receipt for capital money arising on a disposition of the land. The primary submission advanced on the appeal was that a transfer in that form was to be construed as a declaration by the parties that they held the property for themselves as joint tenants (ibid 740E). As Sir Christopher Slade observed (ibid 740 F-G), if that submission were correct, it would follow from the decision in Goodman v Gallant [1986] Fam 106 that, in the absence of any claim for rectification or rescission, the declaration of trust in the transfer conclusively defined the parties beneficial interests, and the effect of the notice of severance (which had been served in that case, as in this) would be to leave the two parties entitled to the proceeds of sale in equal shares.
The Court was divided on the point. Sir Christopher Slade, following the earlier decision of this Court in Harwood v Harwood [1991] 2 FLR 274, held that – on a fair reading of the words of the declaration as to the power of the survivor to give a valid receipt – they did not constitute a declaration of trust. Lord Justice Dillon took the opposite view. He distinguished Harwood and indicated that he would have preferred to adopt the approach in Re Gorman [1990] 2 FLR 284; a decision of the Divisional Court in Bankruptcy which had, itself, been distinguished in Harwood. The third member of the Court, Lord Justice Steyn, held that this Court was bound by the reasoning in Harwood; but that, in any event, he found the reasoning in Harwood "wholly persuasive". He said that he would follow it even if precedent did not compel that course.
Whatever view I might have taken of the effect of a receipt clause in the form of that contained in the transfer deed in the present case if I had been required to consider the matter without the benefit of authority, I have no doubt that it is not open to this Court to depart from the position established by its earlier decisions in Harwood v Harwood and Huntingford v Hobbs. This must be seen as a case in which the transfer of the property into the joint names of the parties contained no declaration of the trusts upon which they were to hold the proceeds of sale.
Implied, resulting or constructive trust
There is, of course, no doubt that the parties do hold the property, 114 Chatsworth Road, as trustees – sections 34 and 36 of the Law of Property Act 1925. Nor is there any suggestion, in this case, that there is any person other than the parties who is beneficially interested under the trusts upon which the property is held. The question is as to the extent of the respective beneficial interests of the parties under those trusts.
In addressing that question it is necessary to have in mind that section 53(1)(b) of the Law of Property Act 1925 requires that a declaration of trust respecting any land must be in writing. In the absence of a declaration of trust which meets that requirement, the answer must be found in the principles of law relating to resulting, implied or constructive trusts. The requirement as to writing does not affect the creation of resulting, implied or constructive trusts – section 53(2) of that Act. The position was explained by Lord Justice Slade (giving the judgment of the Court) in Goodman v Gallant [1986] Fam 106, 110F-H:
"In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property (as would be required for an express declaration of this nature by virtue of s 53(1)(b) of the Law of Property Act 1925), the way is open for persons claiming a beneficial interest in it...
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