England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE.
COURT OF APPEAL.
Appeal by plaintiff from judgment
of the Vice Chancellor on 10th April 1974.

		Royal Courts of Justice.
		28th April 1975.

Revised.

THE MASTER OF THE ROLLS: I will call her Janet because she has had four surnames already. She was married for the first time at the age of 18; but that marriage only lasted about a year. Next at the age of 19 she met a man, Stuart Eves. He was a married man. They could not marry. So they started living together. She took his name and had two children by him. After 4 1/2 years that relationship broke down. Now both have got divorces from their former spouses and have remarried. The question arises now as to the house where they lived.

When Janet started to live with Stuart Eves in April 1968 it was at his house at Romford. They intended to marry when they were free to do so. In the autumn of 1968 she became pregnant by him. A little later she went to his solicitor and changed her name by deed poll to Janet Eves. They had their first child, a daughter, on 19th April 1969. They looked for a house in a different area. Both took part in the search. They found one at 39, Broadhurst Avenue, Seven Kings, Romford. He told her that it was to be their house and a home for themselves and their children. He said that, as she was under 21, it could not be in joint names and had to be in his name alone; and that, but for her age, it would have been purchased in joint names. She accepted his explanation: but he admitted in the witness-box that it was simply an "excuse." He all along was determined that it was to be in his name alone. The conveyance was actually completed in August 1969, after she was 21. The price was £5,600. He paid for it in part by the sale of his former house and in part by a mortgage for £3,200.

The house was very dirty and dilapidated. They went in and made their home there. She did a great deal of work to the house and garden. She did much more than many wives would do. She stripped the wall paper in the hall. She painted woodwork in the lounge and kitchen. She painted the kitchen cabinets. She painted the brickwork in the front of the house. She broke up the concrete in the front garden. She carried the pieces to a skip. She, with him, demolished a shed and put up a new shed. She prepared the front garden for turfing. To add to it all, they had their second child, a girl, on 29th December 1970. She said:

"So far as I was concerned, we were husband and wife, and I did trust him. I never ever thought anything was going to happen while we were building the home up: as far as I knew we were going to stay there."

Some time later, in 1970 or 1971, their divorces came through and early in 1972 she suggested to him that they should get married. She said he agreed but he did not do anything about it. Soon afterwards he changed his mind about it, because he met another woman called Gloria. He met her when he got a job as a mini-cab driver. In September 1972 he told Janet that he was going to marry Gloria. He told her he was going to sell the house. He actually put it in the hands of estate agents. Thereupon Janet went to solicitors and made an application to the county court. She asked for a share in the house, and her solicitors put a caution on the register. Three weeks later Stuart Eves left the house. He went to live with Gloria and married her.

On 19th January 1973, Janet got an order from the magistrates giving her custody of the two children and ordering Stuart Eves to pay £5 a week maintenance for each. He did not keep up those payments. He went back to the house (where Janet was). He locked up two big rooms, leaving Janet and the children one bedroom and the kitchen and toilet. He took away the deep freeze and the stair carpet. It was a poor return for all she had done.

On 15th May 1973, Janet's case came before the county court. The judge was sympathetic towards her claim; but, when the case was half heard, the registrar noticed that the equity in the house was valued at over £5, 000. So it was outside the jurisdiction of the county court. Janet would have agreed to it going on before the judge. But Stuart Eves did not. So the case was not heard in that court. But outside after the hearing in the county court Gloria made an upset. She raised her voice and said that Janet would not get a penny out of Stuart Eves. She threatened Janet with violence. Janet was very upset and afraid of what might happen if she stayed in the house. So she left and Stuart and Gloria moved in with an Alsatian dog.

Although the magistrates ordered Stuart Eves to pay £5 a week for each child, he has paid very little. He is very much in arrear. By the time the case came before the judge in April 1974, he was (as far as I see it) about £500 or more in arrear. I expect it is more like £1,000 now.

The case came before the High Court in April 1974, before the Vice Chancellor. He accepted the evidence of Janet in preference to that of Stuart Eves, but held that she was not entitled to any share in the house. She appeals to this court.

The problem in this case is a familiar one. It often happens that a man and a woman set up house together and have children. They cannot marry because one or other or both are already married. But they intend to marry as soon as they are free to do so. She takes his name. They live as husband and wife. They are known to their neighbours as husband and wife. They get a house; but it is put in his name alone. Then, before they get married, the relationship breaks down. In strict law she has no claim on him whatever. She is not his wife. He is not bound to provide a roof over her head. He can turn her into the street. She is not entitled to any maintenance from him for herself. All she can do is to go to the magistrates and ask for an affiliation order against him on the footing that she is a "single woman": and get an order for him to pay maintenance for the children. If he does not pay, she may have great difficulty in getting any money out of him, even for the children. Such is the strict law. And a few years ago even equity would not have helped her. But things have altered now. Equity is not past the age of child bearing. One of her latest progeny is a constructive trust of a new model. Lord Diplock brought it into the world and we have nourished it. In Gissing v. Gissing [1971] AC 886, 905, Lord Diplock said:

"A resulting, implied or constructive trust -- and it is unnecessary for present purposes to distinguish between these three classes of trust -- is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land."

We have followed this advice in several cases: notably in Binions v. Evans [1972] Ch 359 ; Cooke v. Head [1972] 1 W.L.R. 518 and Hussey v. Palmer [1972] 1 WLR 1286. I would specially mention Cooke v. Head [1972] 1 W.L.R. 518; because there too a man and woman set up home without being married. I ventured to suggest, at p. 520:

"... whenever two parties by their joint efforts acquire property to be used for their joint benefit, the courts may impose or impute a constructive or resulting trust. The legal owner is bound to hold the property on trust for them both. This trust does not need any writing. It can be enforced by an order for sale, but in a proper case the sale can be postponed indefinitely. It applies to husband and wife, to engaged couples, and to man and mistress, and maybe to other relationships too."

This principle was considered by Walton J. in Richards v. Dove [1974] 1 All E.R. 888. But that case turned on its own special circumstances and is not of any general application.

The principle does apply in the present case. Although Janet did not make any financial contribution, it seems to me that this property was acquired and maintained by both by their joint efforts with the intention that it should be used for their joint benefit until they were married and thereafter as long as the marriage continued. At any rate, Stuart Eves cannot be heard to say to the contrary. He told her that it was to be their home for them and their children. He gained her confidence by telling her that he intended to put it in their joint names (just as married couples often do) but that it was not possible until she was 21. The judge described this as a "trick," and said that it "did not do him much credit as a man of honour." The man never intended to put it in joint names but always determined to have it in his own name. It seems to me that he should be judged by what he told her -- by what he led her to believe -- and not by his own intent which he kept to himself. Lord Diplock made this clear in Gissing v. Gissing [1971] AC 886, 906.

It seems to me that this conduct by Mr. Eves amounted to a recognition by him that, in all fairness, she was entitled to a share in the house, equivalent in some way to a declaration of trust; not for a particular share, but for such share as was fair in view of all she had done and was doing for him and the children and would thereafter do. By so doing he gained her confidence. She trusted him. She did not make any financial contribution but she contributed in many other ways. She did much work in the house and garden. She looked after him and cared for the children. It is clear that her contribution was such that if she had been a wife she would have had a good claim to have a share in it on a divorce: see Wachtel v. Wachtel [1973] Fam 72, 92-94.

In view of his conduct, it would, I think, be most inequitable for him to deny her any share in the house. The law will impute or impose a constructive trust by which he was to hold it in trust for them both. But what should be the shares? I think one half would be too much. I suggest it should be one quarter of the equity. But seeing that she is now remarried, this share would I hope be regarded by her as more in the nature of a provision for the children than for her. The parties may negotiate so that he buys out her interest now by a lump sum charged on the property. The administration of her share must be left for further application; but, if the parties cannot agree on a lump sum, it would seem desirable to postpone any order for sale of the house so long as he makes reasonable payments of maintenance for the children and also a reasonable amount off the arrears and such further sum as would seem reasonable in respect of her share. He is in good work. He tells us his basic wage is £50 a week. So his take-home pay may be more. At any rate, there is no possible excuse for him not paying the maintenance for the children.

I would therefore allow the appeal and declare that the defendant holds the legal estate on trust for sale but the benefit in proportion of the shares of one quarter to Janet and three quarters to Mr. Eves.

LORD JUSTICE BROWNE: I agree that this appeal should be allowed and an order made in the form proposed by my Lord. I have had the advantage of reading the judgment which Mr. Justice Brightman is about to deliver and I agree also with what he is going to say about the basis on which we should decide that Janet Eves is entitled to a share in the beneficial interest in this house. The Vice Chancellor accepted in his judgment that there had been some sort of arrangement between Janet and Stuart Eves that the house should be put in their joint names, but that Stuart Eves had tricked Janet Eves out of this by saying that the house could not be taken in her name because she was under 21. In fact, she was over 21 by the time the conveyance was executed. The Vice Chancellor said:

"If this discussion and this arrangement had been in any way linked in the evidence to Mrs. Eves' activities after the purchase, the arrangement would, I think, afford considerable support for an inference of common ownership based on the contribution represented by these activities."

The Vice Chancellor, however, came to the conclusion that he was not able to find any such link. For reasons which will be more fully stated by Mr. Justice Brightman, I am prepared to draw the inference that there was such a link; and accordingly that the result is that Janet Eves is entitled to a share in the beneficial interest in this house. I agree with my Lord that the right figure in this case is one quarter. Accordingly, I agree, as I have said, that the appeal should be allowed and the order made in the form proposed by my Lord.

Mr. JUSTICE BRIGHTMAN: This is an appeal by the Mrs. Janet Eves against a decision by the Vice Chancellor dismissing her claim to be beneficially interested in a dwelling house, 39, Broadhurst Avenue, Ilford.

The appellant and the defendant, Mr. Stuart Eves, began to live together in April 1968. They first resided in a house at Romford, which belonged to the respondent and had been bought by him with the aid of a mortgage. The appellant never had, and does not claim to have had, any beneficial interest in that house. The parties were at that time married to spouses from whom they were estranged. In April 1969 a daughter was born. In the summer of that year, they both started to look for another house. They found a house which they thought would he suitable. 39, Broadhurst Avenue. The respondent sold the house at Romford. 39, Broadhurst Avenue was bought at the price of £5,600. £2,400 came from the net proceeds of sale of the Romford house, and the balance of £3,200 was raised on mortgage. The conveyance was taken in the name of the respondent alone and the mortgage deed was executed by him alone.

It is clear from the evidence, and was so found by the Vice Chancellor, that at the time of the purchase the respondent told the appellant that if she had been 21 years of age, he would have put the house into their joint names, because it was to be their joint home. He agrees that he used her age as an excuse to avoid this course. He was asked in cross- examination:

"Why did you make that comment to her about the house being in joint names but for the fact that she was under 21?"

He replied:

"I suppose at the time it was an excuse that I did not have to put it in joint names."

It seems to me that this answer raises a clear inference that there was an understanding between them that she was intended to have some sort of proprietary interest in the house: otherwise no excuse would have been needed.

After the purchase, the appellant and respondent set about putting the house and garden in order. The Vice Chancellor accepted the following description of the work done by the appellant, most of which he found was carried out soon after the move. I read from her affidavit:

"9. When the property ... was purchased it was in a very dirty and somewhat dilapidated condition. I myself stripped the wallpaper in the hall, painted woodwork in the lounge and kitchen, painted kitchen cabinets and generally cleaned the whole house. I painted the brickwork of the front of the house. I also broke up the concrete surface which covered the whole of the front garden, carried the pieces of concrete to a skip which had been hired, worked in the back garden and, together with the defendant, demolished a shed in the latter and put up the new shed. I also prepared the front garden for turfing."

According to the respondent's own evidence, there was a large area of concrete to be demolished, and a 14 lb. sledge hammer was used for this purpose. The fact that a skip had to be hired to remove the rubble and rubbish from the house is some indication of the scale of the operations in which both parties were involved.

A second daughter was born in December 1970. Unfortunately relations deteriorated, and in November 1972 the respondent left. He remarried in 1972. He and his wife now live in the house. The appellant was given custody of the two children, and an order has been made requiring the respondent to contribute to their maintenance. The appellant and her children now have a home elsewhere.

The case came before the Vice Chancellor in the form of a proceeding in the county court which was removed to the High Court by reason of the value of the property. In mid-1973 the appellant estimated that the house would realise £ 13,000. That evidence is not contradicted. The matter was heard on the affidavit evidence of the two parties, upon which they were cross-examined. In the course of a reserved judgment the Vice Chancellor expressed the clear conclusion that the appellant's activities were altogether too slight to warrant the inference that when the house was purchased the parties had the common intention to pay the price on the basis of joint contributions in cash and kind, with the consequent creation of a resulting trust. However, he accepted that there was some sort of arrangement between them in the first place that the house should be bought in joint names, but the respondent tricked the appellant out of it by saying that the house could not be put in her name because she was under 21 the Vice Chancellor added:

"If this discussion and this arrangement had been in any way linked in the evidence to Mrs. Eves' activities after the purchase, the arrangement would, I think, afford considerable support for an inference of common ownership based on the contribution represented by these activities."

He considered that no such link was proved. The appellant's claim was accordingly dismissed.

Gissing v. Gissing [1971] AC 886 is the principal authority which has been read to us to indicate the correct approach to this type of case. The actual decision in that case was that the wife had made no contribution to the acquisition of the title to the matrimonial home from which it could be inferred that the parties intended her to have any beneficial interest in it. The present case is different. The respondent clearly led the appellant to believe that she was to have some undefined interest in the property, and that her name was only omitted from the conveyance because of her age. This, of course, is not enough by itself to create a beneficial interest in her favour; there would at best be a mere "voluntary declaration of trust" which would be "unenforceable for want of writing": per Lord Diplock in Gissing, v. Gissing [1971] AC 886, 905.

If, however, it was part of the bargain between the parties, expressed or to be implied, that the appellant should contribute her labour towards the reparation of a house in which she was to have some beneficial interest, then I think that the arrangement becomes one to which the law can give effect. This seems to be consistent with the reasoning of the speeches in Gissing v. Gissing.

The Vice Chancellor was unable to find any such link in the evidence, and I respectfully agree with him that it is not expressly to be found there. But I do not for my own part find much difficulty in infering that link. The house was found by them jointly. It was in poor condition. What needed to be done was plain for all to see, and must have been discussed. The appellant was to have some interest in the house, as so she was led to believe, although her name would not be on the deeds. They moved in. They both set to and put the house to rights. I find it difficult to suppose that she would have been wielding the 14 lb. sledge hammer, breaking up the large area of concrete, filling the skip and doing the other things which were carried out when they moved in, except in pursuance of some expressed or implied arrangement and on the understanding that she was helping to improve a house in which she was to all practical intents and purposes promised that she had an interest.

I would therefore, for my own part, be willing to infer the link which the Vice Chancellor correctly stated did not appear from the evidence.

The question then arises, as to the quantum of the beneficial interest which the court can properly recognise. I find no ready answer. There is a case for saying that in the absence of any contrary indication it can only be a joint interest in equity, leading to a half interest for each party as soon as the joint tenancy is severed. Why, it may be asked, should the interest be any different if the interest exists at all? This, to my mind, is the most difficult part of the case. The problem is increased by the passive attitude of the respondent. The principles involved in this type of case are not easy to apply. The respondent was represented by counsel in the court below, and he won his case. The amount at stake is considerable, because the appellant says the house is worth no less than £13,000, or was in 1973, so that the equity of redemption must have a value of about £10,000 or more: not an insignificant sum. The respondent does not lack money. He was told by his solicitor, he says, that his means are too great to enable him to qualify for legal aid. Yet he does not choose to be legally represented. He has addressed us briefly. But we have not had the advantage of any reasoned argument on his behalf.

Applying the law in a difficult field as best I can, I reach the conclusion, without great confidence, that the court should imply that the appellant was intended to acquire a quarter interest in the house. On this basis, the house is held by the respondent in trust as to three quarters for himself and as to one quarter for the appellant.

At the same time, I consider that so long as the respondent keeps down the mortgage payments, he should not be liable to the appellant for an occupation rent. Also, so long as he makes good the arrears of maintenance in respect of his children by the appellant within a reasonable time, and continues to pay the instalments due in the future, a sale ought not to be ordered at the instance of the appellant in order to realise her interest in the property. When the children are past the age at which maintenance payments are due, the court may have to consider whether it would be right to direct a sale at the instance of the appellant. But, of course, the respondent may be content to pay her out by agreement. Also when no mortgage payments are any longer due, it may be necessary for the court to consider the question of an occupation rent. However, these are future questions and it is to be hoped that they will be satisfactorily resolved by agreement between the parties before they actually arise.

For the reasons which I have given, I agree that this appeal should be allowed.

Appeal allowed with costs in Court of Appeal and below: declaration that Mr. Eves holds legal estate on trust for benefit of the parties in the shares of a quarter to Janet and three quarters to Mr. Eves. The working out of the rest of the order to be done, if need be, by a further application. Leave to appeal to the House of Lords refused.