Thames Guaranty Ltd v Campbell
| Jurisdiction | England & Wales |
| Date | 1984 |
| Court | Court of Appeal (Civil Division) |
Joint Interest - Joint tenancy - Equitable charge - Purported charge of matrimonial home by husband without wife's knowledge or consent - Husband depositing title deeds to obtain bank overdraft - Hardship to wife if property subject to charge - Whether charge over husband's interest in property to be enforced
The first defendant and his wife, the fourth defendant, jointly purchased the freehold reversion to their house and by a transfer dated 2 February 1973 the husband and wife became the joint tenants in law and equity of the freehold estate. In April 1973 the plaintiffs, who were the first defendant's bankers, agreed to provide the first defendant with an overdraft facility. By a letter dated 24 May 1973, before registration of the property in joint names had been completed, the plaintiffs and the first defendant agreed an overdraft facility “to be secured” by a first charge on the property, registered in favour of the plaintiffs. In June 1973, after registration in joint names had been completed, the first defendant, without the knowledge or consent of his wife, instructed his solicitors to deposit the land certificate with the plaintiffs. The plaintiffs registered notice of the deposit of the land certificate on 30 April 1974. The plaintiffs renewed and increased the overdraft facility by two further letters in 1975 on the basis that it would “continue to be secured” by a first charge on the property. At the commencement of the hearing the first defendant's indebtedness to the plaintiffs was £34,362.44, including interest. The plaintiffs claimed against the first defendant for the principal and interest due under those facilities, which they contended was secured by an equitable charge of the first defendant's interest in the property. The wife counterclaimed, for an order that the plaintiffs deliver up the land certificate to her. Mann J. made the order sought by the plaintiffs against the first defendant but decided that no equitable charge had been created by him and that the land certificate should be delivered to the wife since, as a co-trustee with the first defendant, she was entitled to call for it so as to hold it jointly with the first defendant.
On appeal by the plaintiffs: —
Held, dismissing the appeal, that the letter of 24 May 1973, in its context, did not create an immediate charge since it was written in executory terms and only amounted to a promise to give an equitable charge, to be completed by the deposit of the title deeds, on the freehold title and that since the first defendant had not obtained the consent of his wife, the co-owner, the letter failed to give rise to an equitable charge on the freehold title even after the deposit of the land certificate; that, although the first defendant could have been ordered to grant a charge on whatever interest he had in the property, that doctrine of partial performance was subject to an exception as to hardship to a third party and that since such an order would expose the wife, an innocent third party, to the risk of proceedings under section 30 of the
Held, further, that, since the first defendant was not entitled to part with the land certificate without the consent of the joint owner of the legal estate, the wife, as joint owner, had at all times been entitled to request the return of the land certificate to the joint custody of herself and the first defendant (post, p. 135E–G).
The following cases are referred to in the judgment of the Court of Appeal:
Bailey (A Bankrupt) (No. 25 of 1975), In re [
Cedar Holdings Ltd. v. Green [
Colebrook's Conveyances, In re [
Craddock Brothers v. Hunt [
First National Securities Ltd. v. Hegerty [
Harman v. Glencross and Glencross, The Times, 20 February 1984
Holliday (A Bankrupt), In re, Ex parte Trustee of the Property of the Bankrupt v. Holliday [
Shaw v. Foster (
Solomon (A Bankrupt), In re, Ex parte Trustee of the Property of the Bankrupt v. Solomon [
Thomas v. Dering (
Turner (A Bankrupt), In re, Ex parte Trustee of the Property of the Bankrupt v. Turner (A Bankrupt) [
Wallis & Simmonds (Builders) Ltd., In re [
Williams & Glyn's Bank Ltd. v. Boland [
Wilson v. Wilson [
The following additional cases were cited in argument before the Court of Appeal:
Bank of New South Wales v. O'Connor (
Clayton's Case (
National Provincial and Union Bank of England v. Charnley [
National Westminster Bank Ltd. v. Stockman [
Swiss Bank Corporation v. Lloyds Bank Ltd. [
Watts v. Spence [
The following cases are referred to in the judgment of Mann J.:
Bank of New South Wales v. O'Connor (
Cedar Holdings Ltd. v. Green [
Clayton's Case (
National Provincial and Union Bank of England v. Charnley [
Pryce v. Bury (
Swiss Bank Corporation v. Lloyds Bank Ltd. [
Thomas v. Dering (
Wallis & Simmonds (Builders) Ltd., In re [
Williams & Glyn's Bank Ltd. v. Boland [
The following additional cases were cited in argument before Mann J.:
First National Securities v. Hegerty [
Hooper v. Smart; Bailey v. Piper (
Shaw v. Foster (
Solomon (A Bankrupt), In re, Ex parte Trustee of the Property of the Bankrupt v. Solomon [
Wellesley v. Wellesley (
ACTION
By a writ dated 26 October 1976 the plaintiffs, Thames Guaranty Ltd., a company in liquidation, claimed repayment by sums loaned by them as bankers to the first defendant. Theophillus Count Campbell. They also claimed limited sums from the second defendant, Likemarts Ltd., who by a written guarantee signed by their director, the third defendant, Michael Jonathan Gillis, had guaranteed the loan to the first defendant to a limited sum. By an order dated 13 April 1981 Master Warren ordered that the writ be amended by adding Laurel May Campbell, the first defendant's wife, as fourth defendant and she was given leave to file a counterclaim against the plaintiffs in which she pleaded, inter alia, that the first and fourth defendants had purchased in joint names the freehold of a dwelling house; that the first defendant had caused the land certificate relating to the property to be sent to the plaintiffs; and that the first defendant had not at any time had authority from the fourth defendant (whereas express, implied or ostensible) to deposit the land certificate with the plaintiffs as security. Accordingly, the fourth defendant counterclaimed (1) an order that the plaintiffs deliver up to the fourth defendant the land certificate and (2) an order that the charges register be rectified by the cancellation of the notice of deposit of land certificate.
The first defendant denied liability to the plaintiffs for the sums claimed. The second and third defendants had settled the plaintiff's claim against them and played no part in the proceedings.
The facts are stated in the judgment of Mann J. and the Court of Appeal.
John Boggis for the plaintiffs.
The first defendant appeared in person.
The second and third defendants did not appear and were not represented.
A. V. B. Bartlett for the fourth defendant.
12 May. MANN J. read the following judgment. In this action the plaintiffs are a company which is in liquidation. Before the commencement of the winding up on 22 March 1976 the company carried on a business as bankers. In the course of their business and between 22 August 1972 and 22 March 1976 the plaintiffs granted four overdraft facilities to Mr. T. C. Campbell, who is the first defendant. Mr. Campbell's indebtedness to the plaintiffs on 22 March 1976 is said to have been £9,594.54. Nothing having been paid by him the indebtedness is said to have grown by reason of interest charges to £34,362.44 as at 9 March 1983. Mr. Campbell was adjudged bankrupt on 13 July 1977. The official receiver...
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