England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
Civil Division
From Mr Registrar Caird

		Royal Courts of Justice
		1st February. 1968

THE MASTER OF THE ROLLS; This case raises another short interesting point. Husband and wife were married on the 20th October, 1954. The wife had a child by a previous marriage. She had two children by this marriage, one born in 1955, a girl, and the other born in 1961, a boy. They bought a house, 151 Faraday Road, Wimbledon as their matrimonial home. It was a leasehold which at that time had 44 years to run and it cost £1,375. It was taken in the husband's name but the wife paid the deposit and the husband paid the expenses. He paid also the Building Society instalments. The wife did not go out to work, but the Registrar was satisfied that they were entitled to the leasehold in equal shares. That is not disputed.

In March 1964 the husband left the house. The wife filed a petition for divorce on the ground of the husband's cruelty. That petition was taken out on the 20th July, 1964. There was a decree nisi on the 17th March, 1966, and a decree absolute on the 3rd March, 1967.

Here is the important point. After the wife filed her petition, in October 1964 the husband purchased the freehold of the house. The owners asked £500 but he managed to get it down to £200, and eventually he bought the freehold for £200. He borrowed the money from the Building Society. Re paid an extra sum of £3.8s.0d. a month in respect of that freehold interest. In point of law the leasehold merged in the freehold and he was the owner of the whole freehold.

The question now arises: What about the wife's half share? It has been contended on behalf of the husband that she only had a half share in the leasehold and that she had no share in the freehold which it was said was entirely his own property. He bought the property after she left. Re had no intention whatever of giving this freehold reversion to her.

The point is of considerable financial importance. A valuation has been made of the property. The leasehold would be worth separately £2,450, whereas if the whole were sold freehold, it would be worth £3,950. In other words, £1,500 difference. The husband says that £1,500 difference belongs to him and he had no intention whatever that it should belong to the wife.

The short answer to the husband's contention is this: Although the house was in the husband's name, he was a trustee of it for both. It was a family asset which the husband and wife owned in equal shares. Being a trustee, he had an especial advantage in getting the freehold. There is a long established rule of equity from Keech v. Sandford. (1726) Sel. Chan. Cases, p.61, downwards that if a trustee, who owns the leasehold, gets in the freehold, that freehold belongs to the trust and he cannot take the property for himself. On that principle when the husband got in the freehold, it attached to and became part of the trust property.

Nevertheless, the expense to which he was put in getting it in ought to be allowed him. The Registrar held that the wife "is entitled equally with the husband in the net proceeds of sale of the freehold premises; 151, Faraday Road, Wimbledon, subject to the prior and entire reimbursement of the husband of his payments under the separate mortgage on the freehold and the legal expenses in connection therewith". That seems to me a very proper order in accordance with the well-established doctrines of equity. It meets the justice of the case. It was pointed out to us that the maintenance payable to the wife is less, and a good deal less, because she has the benefit of living in the matrimonial home.

I see no error at all in the way the Registrar dealt with this ease and I would dismiss the appeal.

LORD JUSTICE DANCKWERTS: I agree.

LORD JUSTICE WIDGERY: I agree.

Order: Appeal dismissed.