BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
England and Wales High Court (Chancery Division) Decisions |
||
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Thomson v Humphrey [2009] EWHC 3576 (Ch) (25 June 2009) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2009/3576.html Cite as: [2010] 2 FLR 107, [2010] Fam Law 351, [2009] EWHC 3576 (Ch) |
[New search] [Printable RTF version] [Help]
CHANCERY DIVISION
Strand London WC2A 2LL |
||
B e f o r e :
____________________
THOMSON | Claimant/Respondent | |
- and - | ||
HUMPHREY | Defendant/Appellant |
____________________
101 Finsbury Pavement London EC2A 1ER
Tel No: 020 7422 6131 Fax No: 020 7422 6134
Web: www.merrillcorp.com/mls Email: [email protected]
(Official Shorthand Writers to the Court)
MR C HOLBECH (instructed by Birketts) appeared on behalf of the Defendant
____________________
Crown Copyright ©
The witnesses and the evidence
"Together, myself and Clive Tanner, designed the house. I also planned the conversion of the double garage into a summer lounge."
"I do not remember speaking to Jane Thomson at any stage, let alone agreeing any designs or plans or working with her."
"24. In Lloyds Bank plc v Rosset [1991] 1 AC 107 the Appellate Committee (no doubt conscious of the widely differing views expressed in Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886) concurred in a single speech by the presiding Law Lord, Lord Bridge of Harwich. The wife claimed (against a bank which was her separated husband's secured creditor) an interest in the matrimonial home (which had been purchased ten years after the marriage and was held in the husband's sole name). She relied on a common understanding or intention arising out of her own efforts in arranging for extensive renovation works and herself carrying out some redecoration (the judge's findings on this are at [1991] 1 AC 107, 129F-131B). At first instance she succeeded on the issue of beneficial interest but failed on a conveyancing issue. She won her appeal ([1989] Ch 350; Purchas and Nicholls LJJ, Mustill LJ dissenting on a conveyancing issue). The House of Lords allowed the bank's appeal on the short ground expressed by Lord Bridge (at 131F):
'The judge's view that some of this work was work 'upon which she could not reasonably have been expected to embark unless she was to have an interest in the house' seems to me, with respect, quite untenable.'
25. Lord Bridge then asked himself whether it was worthwhile to add any general remarks by way of illumination of the law. He limited himself to drawing attention to one 'critical distinction.' If (at 132E-G) there is to be a finding of an actual 'agreement, arrangement, or understanding' between the parties it must 'be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.'
Lord Bridge continued (132H-133B):
'In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as to the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.'
In concurring in this passage the House was unanimously, if unostentiously, agreeing that a 'common intention' trust could be inferred even when there was no evidence of an actual agreement. Apart from two bare references to 'a constructive trust or a proprietary estoppel' (at 132G and 133F) Lord Bridge did not refer to the elaborate arguments of counsel (at 110G-125C) addressed to him as to the varieties and interaction of these two concepts.
26. Lord Bridge's extreme doubt 'whether anything less will do' was certainly consistent with many first-instance and Court of Appeal decisions, but I respectfully doubt whether it took full account of the views (conflicting though they were) expressed in Gissing (see especially Lord Reid [1971] AC 886 at 896G - 897B and Lord Diplock at 909 D-H). It has attracted some trenchant criticism from scholars as potentially productive of injustice (see Gray & Gray, op cit, paras 10.132 to 10.137, the last paragraph being headed 'A More Optimistic Future'). Whether or not Lord Bridge's observation was justified in 1990, in my opinion the law has moved on, and your Lordships should move it a little more in the same direction, while bearing in mind that the Law Commission may soon come forward with proposals which, if enacted by Parliament, may recast the law in this area."
(Quote unchecked)
To a similar affect we find Lady Hale at paragraph 63.
"In my judgment, there has been a tendency over the years to distort the principles as laid down in the speech of Lord Diplock in Gissing v Gissing (1971) AC 886 by concentrating on only part of his reasoning. For present purposes, his speech can he treated as falling into three sections: the first deals with the nature of the substantive right; the second with the proof of the existence of that right; the third with the quantification of that right."
(Quote unchecked)
Dealing with the first, the nature of the substantive right, he says this:
"If the legal estate in the joint home is vested in only one of the parties ('the legal owner') the other party ('the claimant'), in order to establish a beneficial interest, has to establish a constructive trust by showing that it would be inequitable for the legal owner to claim sole beneficial ownership. This requires two matters to be demonstrated: (a) That there was a common intention that both should have a beneficial interest; AND (b) That the claimant has acted to his or her detriment on the basis of that common intention."
(Quote unchecked)
"21. The task of the court is as Lady Hale said in Stack v Dowden [2007] 2 AC 432 at paragraph 60:
'to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.'
22. Lady Hale referred with approval with what was said by the Law Commission in 'Sharing Homes: A Discussion Paper'."
(Quote unchecked)
And then he sets out another passage from her judgment.
"Those comments were, of course, directed to what is always regarded as the second question relating to quantification of beneficial entitlement, the first question being whether an agreement arrangement or understanding that the claimant was to acquire a beneficial interest in the land has been shown. The authorities make clear that a common intention constructive trust based only on conduct will only be found in exceptional circumstances. The evidence in the present case seems to me, with respect to the judge, to be wholly inadequate to establish any such common intention, whether one considers the claimant, Mr Morris or Mrs Morris Senior. One looks in vain in the claimant's evidence, whether by way of her witness statements or the evidence which she gave orally, to find a clear statement that she herself had the belief or expectation that she was entitled to an interest in the land itself even though she believed that she had an integral part to play in the farming and riding school enterprises carried on at the Farm. It is quite impossible, to my mind, to see how it could be said that that was the inference to be drawn from her taking an active part in the farming business, given that the land was owned by Mrs Morris Senior subject to the tenancy agreement; still less if one has regard to the riding school business which the claimant conducted. That riding school business was her own business as she herself asserted in her evidence. That is confirmed by the fact that that business was transferred in 2003 to the company of which she became the sole owner."
(Quote unchecked)
"Oxley v Hiscock has been hailed by Gray and Gray as 'an important breakthrough' (op cit, p 931, para 10.138). The passage quoted is very similar to the view of the Law Commission in Sharing Homes (2002, op cit, para 4.27) on the quantification of beneficial entitlement:
'If the question really is one of the parties' "common intention", we believe that there is much to be said for adopting what has been called a "holistic approach" to quantification, undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which throws light on the question what shares were intended.'
That may be the preferable way of expressing what is essentially the same thought, for two reasons. First, it emphasises that the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended. Second, therefore, it does not enable the court to abandon that search in favour of the result which the court itself considers fair. For the court to impose its own view of what is fair upon the situation in which the parties find themselves would be to return to the days before Pettitt v Pettitt [1970] AC 777 without even the fig leaf of section 17 of the 1882 Act."
(Quote unchecked)
"... with the intention that it may be my home. I lived there with my two children. Roy [that is the defendant] owned it in his sole name. The property had no mortgage. Roy stayed there and I went to his other house in St Brelades very frequently. We were in a relationship together but because the children were young and went to school at Long Stratton it seemed sensible that I would live in the house particularly bought for this purpose."
(Quote unchecked)
"I also looked after his [the defendant's] mother doing all her washing, ironing, shopping before she went into hospital. I visited her very frequently and provided care for her. I was not paid for this."
(Quote unchecked)
"I would have an interest in the property as I was going to be completely giving up my career, my income and my home. I continued to believe this after the property in Long Stratton was bought for me and later when I moved in with Roy to St Brelades and subsequently Church Farm."
(Quote unchecked)
The property she is referring to there is the Long Stratton property.
"I attach a copy of the letter sent to me by Mr Sisson and a copy of the agreement that I did not sign. I knew that Roy wanted me to sign the document and it was explained to me that, if I signed it, I would have no interest in the property. [The property referenced I believe is St Brelades rather than the Long Stratton property. That is what the agreement itself refers to.] I refused to sign it. I explained to Roy that I would not agree to be with him if those were the terms. [That last sentence is important and I will come back to it.] I did not seek independent legal advice at this time. I made myself clear to Roy that I did expect to have an interest in the property. Roy, knowing that I would not sign the agreement and that I would have an interest in the property, continued to live with me and to continue our relationship. The agreement and letter from Mr Sisson in his evidence that the proposal was made to me and my refusal to sign, and yet Roy continued the relationship and bought another house for us to live in. I believe ...(reading to the words)... discussion that the intention was not that I would have no interest."
(Quote unchecked)
I feel there is some confusion in that paragraph about the property that is being focused on. The claimant now claims an interest in the Long Stratton property, but the agreement that we are dealing with concerned the home in which she was living, the St Brelade property, and as a fact she does not and has never in fact claimed an interest in that.
"You want matters dealt with urgently again and you say that you are moving in another woman next week. You say that your partner has no significant resources of her own. You bought her a house in which to live in, in Long Stratton, in your name. She will now be moving to live at your house at St Brelades, Eye, Suffolk. You want an assurance that in the event that the relationship is unsuccessful she cannot make a claim on you. Now, indicating that in general terms the new partner will not be able to make claims on you in the event your relationship is unsuccessful, unless she has put in funds, for instance for improvements to your home or business. Of course if you have transferred property in joint names or given her property then this would allow her to make a claim on you. She does, however, have two children, presently 6 and 11, and I think they are supported by their father. However, they may become dependants of yours. You say you run a most substantial business and ...(reading to the words)... and you want things absolutely watertight and you therefore want a living together contract drawn up."
(Quote unchecked)
"Jane Thomson now wants to sign the agreement."
(Quote unchecked)
"You say she does not want legal advice although you had the impression that it had taken her some time to get used to the contents of the agreement."
(Quote unchecked)
"You said the intention of the agreement was that your partner should acquire no interest in any of your assets."
(Quote unchecked)
"You indicated to DRS [Mr Sisson] in a previous conversation you had not read the agreement and would rely on our drafting. We must emphasise to you that you must be fully conversant with the terms of the agreement. We would much prefer you to call in to see DRS to go through the agreement with us. We are also concerned that there should be independent legal advice and this would be an opportunity for consideration and reflection, particularly if neither party had legal advice. Subsequently telephoning you, you said that you were too busy to come and see DRS this morning and Jane likewise. Therefore you wanted us to send the agreement to you tonight. You instructed us to send the agreement direct to you. You will then discuss this with Jane, emphasising the above points to you in the strongest terms."
(Quote unchecked)
"We emphasised again that the home would remain belonging to Roy, and irrespective of any claim made by Mrs Thomson towards the property, she would receive nothing in the event of the relationship coming to an end. In fact Mrs Thomson indicated that she would not be making any payments on the property and she agreed that the home solely belonged to Mr Humphrey and she sought to acquire no interest in this.
Living expenses. Mrs Thomson explained that Mr Humphreys did not wish her to work. We emphasised to her that in practice in accordance with the agreement that Mr Humphreys would be responsible for living expenses. We warned Mrs Thomson that in the event that the relationship would come to an end and she did not have employment at that time, this could place her in a difficult position. In particular we drew to her attention to her ...(reading to the words)... Then under the paragraph where each person did leave the property, each party would retain their respective assets and in particular Mr Humphrey would retain his business. Mrs Thomson confirmed that she was not seeking to acquire any interest in the business and that it belonged to Roy."
(Quote unchecked)
"Emphasised to Mrs Thomson that in the event that the relationship came to an end in essence she would receive nothing whatsoever. She could not expect to receive any capital from Mr Humphrey nor could she expect to receive maintenance for herself or her children. The only circumstances in which she would receive anything would be in the event that she remained living together with Mr Humphrey at the time the relationship came to an end, in which case Mr Humphrey undertook to make a will in existence containing provision for her."
(Quote unchecked)
"At the start of the meeting Mrs Thomson indicated that she may wish to consider matters following the meeting with DRS. She confirmed this at the conclusion of the meeting saying that she would rather go away and consider the position."
(Quote unchecked)
"At the start of our meeting Mrs Thomson indicated that she may prefer to consider matters further following the meeting and indeed when we had finished, she indicated that she would like to consider matters further before signing the agreement. By the time you receive this letter it may be that we will have further discussions with her."
(Quote unchecked)
"I also emphasise to you that in the event that you sign the agreement without legal advice then you would be deemed to have full knowledge and understanding of its contents. I emphasised to you at the outset and at our meeting again at its conclusion that if you wished to obtain independent legal advice, you should do so."
(Quote unchecked)
"As indicated at the start of the letter, please take this agreement to your solicitor if you wish to have legal independent advice. If, however, you now agree with the contents, please sign where indicated and return to me in the envelope provided."
(Quote unchecked)
"Attending to you when you rang, you say that you are not altogether agreed with Mrs Thomson about matters. She seems to be reluctant to sign the agreement. Saying that, from your point of view, there was no major disadvantage if she did not sign the agreement. The law, for the present, in the event your relationship came to an end she would only receive from the relationship what she had put into it. With that in mind, it may be preferable from her point of view if she did sign the agreement."
(Quote unchecked)
That was the end of the matter so far as Mr Sisson was concerned. He subsequently submitted a fee note.
"I set out in my first statement how Roy bought the property in Long Stratton for me with the intention that it would be my home for myself and my girls. Importantly, at this time, Roy had his own house, therefore, Roy cannot say he bought the house in Long Stratton for himself because he already had a house. Before moving to the house in Long Stratton, I already had my own life and indeed my own job and accommodation."
(Quote unchecked)
However she does not repeat here that the accommodation was rented accommodation.
"This, of course, makes sense as the house was always planned to be my house but Roy was buying it for me."
(Quote unchecked)
"Therefore, I see the house in Long Stratton as mine; having been bought for me by Roy. Therefore, when we decided to live together, I believe I should be given credit to the value of the Long Stratton house."
(Quote unchecked)
"I spent months and months project managing the refurbishment and extension to Church Farm, extensively by way of a manager. I'm prepared to say that I spent about 18 months altogether including Church Farm; work for which Roy never paid me."
(Quote unchecked)
"That is the day I explained to Roy that I would not agree to be with him if those were the terms and I made myself clear to Roy that I did expect to have an interest in the property."
(Quote unchecked)
"In addition, I have also acted to my detriment for the benefit of Roy and I believe ...(reading to the words)..."
(Quote unchecked)
"I have lost the opportunity of working for 13½ years throughout my relationship why Roy. Therefore, at Roy's request, I have giving up the ability to earn a salary and have made a significant contribution towards Roy and Church Farm. I have lost the chance of a mortgage. 13½ years ago, I could have got a mortgage and have paid this off over the timeframe. However, now I do not feel that I will be able to get a mortgage. I have therefore lost that to my detriment that I have suffered for Roy's benefit and that now I have lost the opportunity to obtain a mortgage. I believe Roy has made no sacrifice on my behalf."
(Quote unchecked)
Discussion and Conclusion