Williams & Glyn's Bank Ltd v Boland

In these two cases a bank seeks to evict a man and his wife and family from their home. Can the bank do it?

THE CASE OF MRS. BROWN

Mr. and Mrs. Brown were married 20 years ago in 1958. They have three children, now aged 17, 15 and 6, all living at home. Throughout their married life, husband and wife have both been working and earning. He was a film producer; she a secretary. In due course he formed his own company called Saunhurst productions Ltd. They pooled their earnings and in 1960 bought their first home at 68 Berwick Crescent, Sidcup. In October 1966 they sold it and bought their second home at 12 The South Glade, Bexley. The conveyance was taken in his name alone. It was registered land and these were the particulars in the Register:

Freehold 12 The South Glade, Bexley Title Absolute Norman Gerald Brown Price paid £6,600.

Charge dated 24 October 1966 to Woolwich Equitable Building Society to secure the moneys therein mentioned. Registered on 3 November 1966.

It is common ground that the wife, owing to her contributions to the purchase, and to the mortgage instalments, was entitled to a share in the house.

Now in 1973 the husband and his company, Saunhurst Productions Ltd., borrowed money from the bank. They borrowed it from Williams & Glyn's Bank at the Manchester Branch. The husband gave his personal guarantee for the company'sindebtedness. In addition he gave a legal charge to the bank on the matrimonial home 12 The South Glade. He did not tell his wife anything about it. It was on the bank's standard form of legal charge to secure any moneys owing by the husband to the bank. The Land Registry issued a warning in these words:

"Enquiries should also be addressed to any persons in occupation of the land or buildings as to their rights of occupation and to whom rent (if any) is paid". But the bank made no enquiries as to whether the wife had any interest in the house. They did not ask the husband. Nor the wife.

Williams & Glyn's Bank entered in the Charges Register this second mortgage: "Charge dated 12 June 1973 registered on 14 June 1973 to secure the moneys therein mentioned".

Two years later in 1976 the husband was indebted to the bank for a large amount. It came to £20,958.70 in his personal account with the bank: and £17,511.34 in respect of his liability under the guarantees. The bank issued a summons in the county court for repayment and also for possession.

The husband has not made any defence. The wife claims to remain in possession by reason of her half-share in the house.

THE CASE OF MRS. BOLAND

Mr. and Mrs. Boland were married 20 years ago in 1959. He was a builder. She was a nurse. They have one son. They both went out to work and in 1961 bought their first home, 9 Park Lawn Avenue in Epsom. They both contributed to the cost and it was taken in their Joint names. Some years later in 1969 they sold it and used the proceeds to buy their second home, No. 11 Ridge Park, Purley. They have lived there ever since with their son. This house was conveyed into the husband'sname only. The wife did not realise this. She thought it was in joint names like the first house. It was registered land. The Land Register showed the proprietor as Michael Boland, registered on the 26th June, 1969, and price paid £7,500. There was a mortgage on it. The Charges Register showed a charge to the Pearl Assurance Company Ltd. to secure the moneys therein mentioned.

Although it was in the husband's name alone, it is quite clear that the wife had contributed much to the cost. It is common ground that she is entitled to a share in it.

Meanwhile the husband had turned his business into a limited company called Epsom Contractors Ltd. He and his brother were directors of it. It flourished and employed 60 people. It purchased a builder's yard at No. 1 Tree Hill Road, Guildford. In 1974 the company needed money to expand. It borrowed large sums from Williams & Glyn's Bank. The company charged the builder's yard to the bank and deposited the title deeds. In addition, the bank required the two brothers to enter into personal guarantees for the company's overdraft. It also required each of the brothers to execute legal charges on their homes so as to secure repayment of any sums owing by them. These would include, of course, the company's debts which they had guaranteed.

The bank did not make any enquiries of the wives. They simply took a charge on each matrimonial home to secure the indebtedness.

Later on the business failed. The company became insolvent and was put into liquidation. It owed the bank £55,000. The liquidators, with the concurrence of the bank, sold the builder's yard. They only got £1,500 for it: whereas there is goodevidence that they should have got £22,500. But even giving credit for £22,500, there remains £32,500 owing. The bank now come down on Mr. Boland for that sum. They claim possession of the matrimonial home. The husband resists on the ground that he may be able to raise the £32,500 and claims the protection of the Administration of Justice Act 1970, section 56. The wife resists by reason of her half-share in the house.

In a similar case, Bird v. Syme Thomson, decided on the 20th April, 1978 and reported in (1978) 3 All England 1027, Mr. Justice Templeman decided in favour of the bank. Pour days later on the 24th April, 1978 he decided this case of Boland in favour of the bank. On the 19th May, 1978 Judge Clapham in Brown's case felt that he must follow that decision. He too decided in favour of the bank.

The wives now appeal to this court.

DESERTED WIVES

To clear the air, I would put on one side the cases from 1949 onwards about deserted wives. In those cases the wife had no share whatever in the matrimonial home. She was a "bare wife" as I pointed out in Gurasz v. Gurasz (1970) Probate 11 at page 17. In this court we gave her the protection which she rightly deserved. But the House of Lords stripped her of it. They held that she had no protection against a lender who took security on the matrimonial home, see National Provincial Bank Ltd. v. Hastings Car Mart(1965) Appeal Cases 1175. This was immediately rectified to some extent by the Matrimonial Homes Act 1967. It gave her a charge on the house; but it was subject to this severe restriction:- It had to be registered as a Class F charge, and not all of the deserted wives had sufficient knowledge or advice to do this. That Act (as it was passed in1967) did not apply to a wife who was entitled to a share in the house. Her position was remedied to a slight extent in 1970 by section 38 of the Matrimonial Proceedings and Property Act 1970. It enables a wife, who has a share, to register a Class F charge. But that amendment was of precious little use to her, at any rate when she was still living at home in peace with her husband. She would never have heard of a Class F charge: and she would not have understood it if she had. If she is to be protected at all, it will be by the decision of the judges.

THE WIFE'S SHARE

Alongside the deserted wife's equity, there was another development of even greater significance. It was the concept of the "wife's share" in the matrimonial home. In former times the house was usually conveyed into the name of the husband alone. He was the one who went out to work, earned the money, paid the deposit and the mortgage instalments. But when the wife went out to work, things changed. Her earnings came in very useful. They went into the family pool. Out of it the outgoings were paid including the deposit and the mortgage instalments. The conveyancers in the old days would have held that the wife gained no interest whatever in the house by reason of her contributions. She got no share in the house itself. Nor, if it was sold, did she have any share in the proceeds of sale. For the simple reason that she could show no contract, no legal right whatever to support any claim, see Hoddinott v. Hoddinott (1949) 2 King's Bench 406. But by a remarkable series of decisions - I do not hesitate, looking back, to call them remarkable - it was held that when a wife contributed in money or money's worth to the purchase of the house, she acquired ashare in it. This started in 1953 in Rimmer v. Rimmer (1953) 1 Queen's Bench 63, and was carried forward in Cobb v. Cobb (1955) 1 Weekly Law Reports 731 and Fribance v. Fribance (1957) 1 Weekly Law Reports 385 and Hine v. Hine (1962) 1 Weekly Law Reports 1124. These decisions were based to some extent on section 17 of the Married Women's Property Act 1882. That ground was held by the House of Lords to be erroneous in Pettitt v. Pettitt(1970) Appeal Cases 777...