Supperstone v Hurst
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE WARREN,MR JUSTICE LINDSAY,THE HON MR JUSTICE FLOYD,Mr Justice Floyd,Bernard Livesey QC |
| Judgment Date | 08 June 2009 |
| Neutral Citation | [2008] EWHC 735 (Ch),[2009] EWHC 1271 (Ch),[2006] EWHC 2147 (Ch),[2005] EWHC 1309 (Ch),[2005] EWHC 2808 (Ch),[2007] EWHC 865 (Ch) |
| Docket Number | Case No: CH/2005/APP/0019,Case No: CH/2007/PTA/0347,Case No: CH/2005/APP/0737,Case No,Case No: 50851 2000,Case No. 5085 of 2000 |
| Court | Chancery Division |
| Date | 08 June 2009 |
[2005] EWHC 1309 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE MATTER OF THE INSOLVENCY ACT 1986
Royal Courts of Justice
Strand, London WC2A 2LL
Mr Michael Briggs QC
(Sitting as a Deputy Judge of the High Court)
Case No: CH/2005/APP/0019
Re: Robert Alfred Hurst—In Bankruptcy
Mr Richard Fisher (instructed by Taylor Wessing) for the applicant
The respondents appeared in person
This is an appeal by Mrs Ann Stephanie Hurst against the decision of Mr Registrar Jaques made on 21 December 2004, whereby he declared that the property known as 73 Southway, London NW11 6SB ("the property") was beneficially owned as to 50% by Mr Anthony Peter Supperstone and as to 50% by Mrs Hurst. The learned registrar went on to make orders for vacant possession and for the sale of the property, and that Mrs Hurst should pay 95% of the costs of Mr Supperstone's application.
Mr Supperstone is the trustee in bankruptcy of Mrs Hurst's husband Robert Hurst, Mr Hurst was made bankrupt on 12 April 2001, pursuant to a petition presented by his former partners in a solicitors' firm, following litigation between them which concluded, unsuccessfully for Mr Hurst, in the House of Lords, under the title Hurst v Bryk [2002] 1 AC 185. The property is and has since January 1984 been Mr and Mrs Hurst's matrimonial home.
Mr Supperstone applied for an order for the possession and sale of the property, and the distribution of the net proceeds of sale between him and Mrs Hurst on a 50/50 basis by ordinary application dated 3 October 2003. It was heard over two days, namely 13 May and 1 July 2004, the first of which was taken up largely by cross-examination of Mr and Mrs Hurst upon their witness statements.
There were by the time of the hearing only two issues. The first was whether the property had been owned beneficially in equal shares by Mr and Mrs Hurst at the time of his bankruptcy (as claimed by Mr Supperstone) or in the proportions 85%/15% respectively by Mrs Hurst and Mr Hurst (as they both claimed), it being common ground between all three parties that Mr and Mrs Hurst had been beneficial tenants in common. The second issue was whether Mrs Hurst was entitled against her husband, and as his successor against Mr Supperstone, to an equity of exoneration in relation to the sum of £37,000 borrowed by Mr Hurst in 1989 in order to buy his share in the solicitors' partnership of Malkin Janners, the repayment of which having been secured on the property. The effect of that equity if established would be that the amount due under that security would, as between Mr Supperstone and Mrs Hurst, stand as a charge on his beneficial interest in the property as Mr Hurst's trustee in bankruptcy. As I have described, Mr Supperstone was successful on the first issue, but Mrs Hurst succeeded on the second, Mr Supperstone has not challenged the learned registrar's decision in relation to the equity of exoneration, but Mrs Hurst has appealed his finding as to the beneficial ownership of the property, which is therefore the only issue before me.
Mr Supperstone was represented both before me and the learned registrar by Mr Richard Fisher. Mrs Hurst was represented before the learned registrar by Mr Gregory Denton- Cox, but was unable to obtain legal representation on her appeal. At her request, but with some misgivings, I permitted Mr Hurst to speak for her during the appeal. Although a solicitor, he does not hold advocacy rights. The circumstances were far from ideal for him to be her advocate, having regard to his having been a witness of fact in the proceedings, having had his credibility as a witness commented upon adversely by the learned registrar, and having to support his wife in proceedings brought by his own trustee in bankruptcy. My misgivings were nonetheless ill-founded. Mr Hurst proved to be a well prepared, courteous and effective advocate for Mrs Hurst. Although he occasionally strayed into attempts to give evidence, for the most part he supported his submissions with precise and relevant references to the documents before the court, and to the full transcripts of the oral evidence taken on 13 May 2004.
It might have been thought that, in determining that the beneficial interests of the parties in the property were 50/50, the learned registrar had an easy task. That is because, although the transfer of the property to Mr and Mrs Hurst contained no express declaration as to their beneficial interests, they each made written statements to that effect in June 2001, in connection with Mr Hurst's then proposed (but in the event unsuccessful) voluntary arrangement ("IVA"). Nonetheless both Mr and Mrs Hurst contended strenuously both before the learned registrar and before me that these statements were, for various reasons which I shall have to describe, by no means determinative of their respective beneficial interests in the property. Basing themselves primarily upon a precise calculation of their respective contributions to the purchase of the property and of its predecessor as their matrimonial homes, they maintained that Mr Hurst's share was no more than 15%.
The law
It is and has always been common ground between the parties that Mr and Mrs Hurst each owned beneficial shares in both their matrimonial homes. It was further common ground both before the learned registrar and on appeal that their respective beneficial interests arose under a constructive rather than express or resulting trust. The only issue has therefore been the respective sizes of their beneficial interests as tenants in common. Despite the wealth of authority, and the significant changes in emphasis which the law has undergone on the question of quantifying beneficial interests of cohabiting tenants in common, it was also common ground that the relevant legal principles may safely be extracted from the following paragraphs of the judgment of Chadwick LJ in Oxley v Hiscock [2004] 3 WLR 715, as follows:
"Summary
68. I have referred, in the immediately preceding paragraphs, to 'cases of this nature'. By that, I mean cases in which the common features are: (i) the property is bought as a home for a couple who, although not married, intend to live together as man and wife; (ii) each of them makes some financial contribution to the purchase; (iii) the property is purchased in the sole name of one of them; and (iv) there is no express declaration of trust. In those circumstances the first question is whether there is evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial share in the property. In many such cases—of which the present is an example—there will have been some discussion between the parties at the time of the purchase which provides the answer to that question. Those are cases within the first of Lord Bridge's categories in Lloyds Bank plc v Rosset [1991] 1 AC 107. In other cases—where the evidence is that the matter was not discussed at all—an affirmative answer will readily be inferred from the fact that each has made a financial contribution, Those are cases within Lord Bridge's second category. And, if the answer to the first question is that there was a common intention, communicated to each other, that each should have a beneficial share in the property, then the party who does not become the legal owner will be held to have acted to his or her detriment in making a financial contribution to the purchase in reliance on the common intention.
69. In those circumstances, the second question to be answered in cases of this nature is: 'What is the extent of the parties' respective beneficial interests in the property?' Again, in many such cases, the answer will, be provided by evidence of what they said and did at the time of the acquisition. But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have—and even in a case where the evidence is that there was no discussion on that point—the question still requires an answer. It must now be accepted that (at least in this court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property. And, in that context, 'the whole course of dealing between them in relation to the property' includes the arrangements which they made from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home."
Chadwick LJ went on to identify three strands of reasoning as underlying the "fair share having regard to the whole course of dealing" approach which has emerged from the recent authorities. The first is that the parties are taken to have agreed that their shares should be left to be determined at the end of their relationship or upon the sale of the property upon the basis of such an assessment. This is based upon the speech of Lord Diplock in Gissing v Gissing [1971] AC 886, at 909D and the judgment of Nourse LJ, in Stokes v Anderson [1991] 1 FLR 391, at 399–400. The second is that a review of the whole of the parties' course of dealing reveals what was their assumed common intention at the time of purchase. This is based upon the judgment of Waite LJ in Midland Bank plc v Cooke [1995] 4 All ER 562 at 574, The third is an application to particular circumstances of the doctrine of proprietary estoppel, based upon the judgment of Sir Nicolas Browne-Wilkinson V-C in Grant v Edwards [1986] Ch 638 at 656–57, the judgment of Robert Walker LJ in Yaxley v Gotts [2000] Ch 162 at 177 and the decision of the Court of Appeal in Drake v Whipp [1996]...
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