Leeds LS1 3BG
B e f o r e :
| KIM TURNER
|- and -
|BROMETS JACKSON HEATH LLP
BROMET & SONS (A Firm)
Niamh O'Reilly (instructed by Caytons Law) for the Defendants
Hearing dates: 25, 26 and 27 May 2016
Crown Copyright ©
2. The facts
The relationship and the acquisition of 23 Burns Way
|01/09/2003||Bathroom En suite||484.20|
|01/09/2003||Wetherby Builders En Suite||757.00|
|26/10/2003||B & Q||115.97|
|04/09/2003||B & Q radiator||133.75|
|22/10/2003||Allders - bathrm lighting||28.00|
|19/10/2002||Hardacres gas fire||830.00|
It will be seen that the total is just less than £3,000. It will also be seen that some of the items appear to be chattels. When she gave evidence Ms Turner stated that she had spent more than the moneys set out in the list. She estimated that she had spent between £5,000 and £6,000. Mr Millington did not accept this. He pointed out that she had provided no details of any additional expenditure despite being requested to do so on a number of occasions.
The investment of £20,000
Dealings with Bromets
- To carry out a transfer of equity into joint names, I require consent from H/fax for Kim to become party to the mortgage. This is known as Transfer of Mortgage Property, which is a form to be sent, best dealt with by solicitor, apparently. Fee for Transfer is £150.
- Transfer of Equity >Tenants in common in unequal shares
- As to H/fax being the mortgagee.
- As to first £20k Kim
- As to balance H
- Plus a share in any uplift in the value of the house to be shared
Events up to Meeting on 6 December 2005
As to £20k to Kim
I have received your Mortgage Offer and am preparing the Transfer and Trust Deed. I will be in touch shortly to make an appointment to go through the documents and mortgage offer. As mentioned I am working towards a possible completion on 9 December 2005.
I enclose a draft Trust Deed for your consideration. Please peruse the document then kindly telephone me to confirm your approval or otherwise when I will prepare an engrossment for signature by you both. At the same time we can arrange an appointment for you to call in the Office to sign the Transfer, Trust and Mortgage Deeds.
I am working towards possible completion on 9 November.
I enclose herewith an amended Trust Deed for signature by you both. Please sign the same in the presence of an independent witness who should also sign
Deb amend T Deed. Figures wrong. New red st.
Meeting on 6 December 2005
New Trust Deed in the post to-day. Please both sign, have your signatures witnessed and return to me before Friday.
All set for Comp Fri 9 Dec
Kim to transfer to our Bank £20,000
Trust deed sent for signing
Mr M lovely
Kim - B ___ D
Other Events mostly following Completion
3. Findings of fact
1. The letters of 29 and 30 November 2005 corroborate the intention of Mrs Natkus and Miss Alden to hold a meeting before all 3 documents are signed.
2. There is no apparent reason why Mrs Natkus should go through and explain the Mortgage Deed and the TR1 and ignore the Declaration of Trust
3. It is clear that the Declaration of Trust needed amendment in the light of the amended redemption figure that was sent by Halifax on 1 December 2005. It is clear that the Declaration of Trust was in fact amended before 9.45 on 7 December 2005. It seems to me highly likely that the amendment was made as a result of discussions at the meeting.
4. There is no evidence on the conveyancing file that any of the draft documents contained a mis-spelling of Ms Turner's name. If there had been such a mis-spelling I would have expected this to appear in a draft. All of the drafts on the file show her name spelt correctly.
5. Whilst some might regard the comment made by Mrs Natkus about Ms Turner as unprofessional it does to my mind show that Ms Turner was taking an active part in the meeting even if Mrs Natkus found her difficult.
1. That there was a full explanation given by Mrs Natkus at the meeting of all of the documents including the Declaration of Trust. I am satisfied that she made clear that Ms Turner was jointly liable on the mortgage, and that on a sale of 23 Burns Way Ms Turner would be entitled to half any increase in the value of 23 Burns Way after paying off the sums due under the mortgage, and the sums in respect of Mr Millington's equity and her £20,000.
2. That Ms Turner understood that that was the position and agreed to it. I am also satisfied that she had agreed to it in discussions with her parents and Mr Millington between April and December 2005.
3. That Ms Turner and/or her father made the payments set out in the list she provided. She has not satisfied me, on the balance of probabilities that she made any other payments.
4. Conflict of Interest
A solicitor or firm of solicitors should not accept instructions to act for two or more clients where there is a conflict or a significant risk of a conflict between the interests of those clients.
9.8.1 All co-habitees whether they are spouses, civil partners, co-habitees or joint purchasers may need to be advised independently about their respective rights in the property to be purchased. Solicitors should be alert to the possibility of a conflict of interests arising in this situation.
9.8.2 It is advisable for cohabitees who are to be co-owners to enter into a separate deed of trust which sets out their respective interests in the property
9.8.4 In Oxley v Hiscock  EWCA 546 the Court of Appeal provided guidance on the steps to be taken when acting for cohabitees:
- the solicitor should always enquire about the source of funds for the purchase and the future liability for the mortgage.
- If there is evidence that the purchase is actually a joint acquisition or that others may be acquiring rights under a potential constructive trust, the client(s) should be advised either to purchase the property as legal co-owners and/or to record their arrangement in a trust deed
- When drafting the transfer and/or trust deed decisions have to be made as to whether the equitable interest is to be held as joint tenants or tenants in common
Although the underlying matrimonial proceedings were in progress at a time when legal aid was available, the issues thrown up by this case have now assumed wider importance. That is because legal aid is no longer available for divorcing couples seeking to resolve their financial disputes. As King LJ explains in her judgment, it is now commonplace for the parties to negotiate their own agreements and then to instruct solicitors for limited purposes, such as drawing up a consent order for the court's approval under section 25 of the Matrimonial Causes Act 1973. Therefore it is now often the case in the matrimonial context that solicitors undertake a limited retainer of the kind which is in issue in the present case.
38. Let me now stand back from the authorities and summarise the relevant principles:
i) A solicitor's contractual duty is to carry out the tasks which the client has instructed and the solicitor has agreed to undertake.
ii) It is implicit in the solicitor's retainer that he/she will proffer advice which is reasonably incidental to the work that he/she is carrying out.
iii) In determining what advice is reasonably incidental, it is necessary to have regard to all the circumstances of the case, including the character and experience of the client.
iv) In relation to (iii), it is not possible to give definitive guidance, but one can give fairly bland illustrations. An experienced businessman will not wish to pay for being told that which he/she already knows. An impoverished client will not wish to pay for advice which he/she cannot afford. An inexperienced client will expect to be warned of risks which are (or should be) apparent to the solicitor but not to the client.
v) The solicitor and client may, by agreement, limit the duties which would otherwise form part of the solicitor's retainer. As a matter of good practice the solicitor should confirm such agreement in writing. If the solicitor does not do so, the court may not accept that any such restriction was agreed.
1. Both Ms Turner and Mr Millington had been property owners in the past.
2. 23 Burns Way was acquired in October 2001. It was vested in the sole name of Mr Millington. The mortgage was in his sole name. All of the mortgage instalments had been made Mr Millington. Ms Turner did not cohabit with Mr Millington at that time. Cohabitation started sometime after that. Thus, if Bromets considered the guidance given by Chadwick LJ in Oxley referred to in the Conveyancing Handbook there would have been nothing to alert it to a possible interest by Ms Turner at the time of the acquisition.
3. Apart from the discussions relating to the investment of £20,000 there were no express discussions between Ms Turner and Mr Millington as to the ownership of a share in 23 Burns Way by Ms Turner. References to 23 Burns Way as "our home" fall well short of such discussions.
4. There had been some expenditure by Ms Turner. However the sums involved were modest. Some of the expenditure might have improved the value of 23 Burns Way but much of it related to chattels or decoration. Any increase in the value of 23 Burns Way as a result of the expenditure was likely to be extremely modest.
5. There had been discussions in relation to the investment of £20,000 resulting in an agreement between them as to Ms Turner's future interest in 23 Burns Way. The agreement was by no means unfair to Ms Turner. Some might consider it favourable to her. As at the date of the Declaration of Trust the net equity in 23 Burns Way amounted to £180,486.58 of which Ms Turner had invested £20,000. Both parties expected the value of 23 Burns Way to continue to rise. The agreement provided for any increase to be shared equally rather than in proportion to their beneficial shares. Even if Ms Turner is taken to have provided half the mortgage funds of £70,100 her investment only rises to £55,050 against Mr Millington's £195,536.58.
6. Both parties attended the meeting with Mrs Natkus. Ms Turner took an active part in that meeting leading to the comment in Mrs Natkus's note to Miss Alden. All 3 documents were discussed and explained at that meeting. Ms Turner was willing to go ahead on the basis of those discussions and explanations.
5. Loss of Chance
1. Apart from the interest that she would acquire under the Declaration of Trust Ms Turner was most unlikely to have any beneficial interest in 23 Burns Way because:
1) 23 Burns Way was vested in Mr Millington's sole name. Ms Turner had not cohabited at the time of the acquisition. She had not contributed to the purchase price or to the mortgage instalments.
2) There was no express agreement between the parties that Ms Turner should have any beneficial interest in 23 Burns Way. References to it as "our home" were not sufficient.
3) The modest expenditure by Ms Turner was unlikely to throw any light on their joint intentions with regard to the beneficial ownership of 23 Burns Way.
2. The agreement reflected in the Declaration of Trust was perfectly fair and reasonable from Ms Turner's point of view. It is true that she was incurring a potential liability under the UCB mortgage. However the mortgage represented only 28% of the value of 23 Burns Way. The attractive feature of the agreement was that Ms Turner would get a return of 50% of any increase in value above £250,000 when she was investing only £20,000.
3. There was, accordingly, no reason not to execute the Declaration of Trust and other documents necessary to enable the transaction to proceed.