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England and Wales Land Registry Adjudicator
You are here: BAILII >> Databases >> England and Wales Land Registry Adjudicator >> Andrew Wing v Lorraine Eades (Beneficial interests, trusts and restrictions) [2013] EWLandRA 2011_1178 (13 December 2013)
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Cite as: [2013] EWLandRA 2011_1178
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REF/2011/1178
PROPERTY CHAMBER, LAND REGISTRATION DIVISION
FIRST-TIER TRIBUNAL
IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY
BETWEEN:-
ANDREW WING
APPLICANT
and
LORRAINE EADES
RESPONDENT
Property Address: 55 Braeside Crescent, Billinge, Wigan WN5 7JA
Title Number: MS366561
Before: Judge Michell
Sitting at: Piccadilly Exchange, Manchester
On: 8 th and 9 th April 2013 and 13 th May 2013
Followed by Written Submissions
Applicant Representation: Mr Lomax, lay representative
Respondent Representation: Miss Katie McCann, counsel
___________________________________________________________________________
DECISION
___________________________________________________________________________
RESTRICTION–CLAIM TO BENEFICIAL INTEREST IN HOUSE IN SOLE NAME OF RESPONDENT-WHETHER COMMON INTENTION EXPRESS OR TO BE INFERRED-WHETHER APPLICANT ENTTLED TO AN INTEREST BY REASON OF S.37 MATRIMONIAL PROCEEDINGS AND PROPERTY ACT 1970 AND S.2 LAW REFORM (MISCELLANEOUS PROVISIONS) ACT 1970
Cases referred to
Lloyds Bank Plc. v. Rosset [1991] 1 AC 107, at p.132
Oxley v. Hiscock [2004] 3 All ER 703
Stack v Dowden [2007] 2 AC 432
Jones v. Kernott [2011] 3 WLR 1121
Matrimonial Proceedings and Property Act 1970 S. 37
Law Reform (Miscellaneous Provisions) Act 1970 S.2
1. The Applicant, Mr Wing, claims to be entitled to a beneficial interest in a house, 55 Braeside Crescent, Wigan (“55 Braeside”). He applied to HM Land Registry to enter a restriction on the title to the house. The Respondent, Miss Eades is the sole registered proprietor of the house. Miss Eades denies that Mr Wing has any beneficial interest in the house and objected to the registration of the restriction. The matter was referred to the Adjudicator to HM Land Registry for determination. The office of Adjudicator to HM Land Registry was abolished on 1 st July 2013 and the functions of the Adjudicator were transferred to the First-tier Tribunal and allocated to the Property Chamber.
Background
2. In 1987 Mr Wing suffered multiple injuries, including a brain injury, in a road traffic accident. He was in a coma for many weeks. He was awarded damages in proceedings brought as a result of the accident. Mr Wing was made a patient of the Court of Protection. The hearing of this matter was to have commenced in July 2012 but the hearing was adjourned when the Adjudicator was told for the first time at the hearing that Mr Wing had been made a patient of the Court of Protection. Mr Wing knew that his father had been made the receiver of his property and affairs. However, he did not himself then know whether he was still a patient. The hearing was adjourned for enquiries to be made to discover whether Mr Wing was still a patient and if not, when he was discharged. It was subsequently discovered that the Court of Protection made an order determining proceedings on 6 th January 1998 and that on that date Mr Wing was restored to the management of his property and affairs and the powers of the receiver were determined. The order further provided for the investments comprising the fund in Court to be transferred to Mr Wing.
3. Using money from the damages awarded to him, Mr Wing purchased outright a two-bedroom house at 45 Upholland Road, Billinge for £55,000. He said in his statement of case served in January 2012 that he bought this house “20 years ago” but it would appear that he bought it some time after 1996 and probably after the order of the Court of Protection restoring him to the management of his property and affairs. His father in a report filed with the Court of Protection in 2006 said that Mr Wing wanted to use the money in court to purchase a home of his own.
4. Mr Wing and Miss Eades began a relationship in September 2001. At that time, Miss Eades owned a house in her sole name 45 Farm Meadow Road, Orrell where she lived with her son, Joshua. This was a four-bedroom detached house on a modern housing development. It had been the show house on the development. Miss Eades was divorced in about 2002 and received on the divorce a 50% interest in the sale proceeds of the former matrimonial home and insurance policies and a lump sum of £62,000. There was no evidence before me as to the value of Miss Eades’s interest in the former matrimonial home or of the insurance policies. Miss Eades sold 45 Farm Meadow Road for £140,000 in 2003. At about that time Miss Eades moved into 45 Upholland Road to live with Mr Wing.
Purchase of 55 Braeside
5. Both parties agreed that prior to the purchase of 55 Braeside, they had discussions about buying a house together. It is apparent from both parties’ accounts of these discussions that they were made in the context of considering what Miss Eades should do with the proceeds of sale of her house.
6. Mr Wing said that he was adamant about keeping 45 Upholland Road as his house alone. He said he made it clear to Miss Eades that it was his house and his house alone and that he would never be prepared to surrender any part of it to Miss Eades. He said that it was agreed that instead of Miss Eades putting money into 45 Upholland Road, he and Miss Eades would buy another house together to live in. Mr Wing said that the agreement was Mr Wing would let out his house and use the rent to pay the mortgage on the new house.
7. Miss Eades said that she agreed with Mr Wing that they would both sell their houses and buy one house together. The intention was that after Miss Eades had sold her house, Mr Wing’s house would be sold and they would then buy a house together. Miss Eades said that Mr Wing did put his house on the market but that he then withdrew it and told Miss Eades that he had decided he wanted to keep his house. Miss Eades said that she then decided to buy a house alone. She said that the purchase of the house was an attempt to secure her independence from Mr Wing should she need it and to prevent the further erosion of the buying power of the money she had obtained from the sale of 46 Farm Meadow Road since house prices were rising. She estimated that by the time of the purchase of 55 Braeside, the value of 46 Farm Meadow Road had risen to £210,000.
8. Both parties agreed that it was principally Miss Eades who did the work of looking for a house to buy. Mr Wing said that Miss Eades started looking at properties worth about £500,000 but that Mr Wing was concerned about the level of mortgage that would be required to buy a house of this value. He said that Miss Eades then found 55 Braeside. However, there is some conflict of evidence about when Mr Wing first saw 55 Braeside. Mr Wing said that he and Miss Eades went to estate agents together and went together to view the house. Miss Eades said that the estate agents got in touch with her to tell her that the house was on the market. 55 Braeside was a three-bedroom detached house. Miss Eades said that she made arrangements to view the house. Miss Eades said that she went with her son to view the house first. She then took her father and some work colleagues to see it. They all saw it before Mr Wing. Miss Eades said that having viewed the house, she made her own decision to buy it. Mr Wing did not see the house until after she had put in the offer and started the purchase process.
9. Mr Wing said that he went to the solicitor with Miss Eades for legal advice on the conveyancing. He said that the solicitor knew that it was to be a joint property even though the legal title was to be in the sole name of Miss Eades. Miss Eades in her statement of case said that Mr Wing did not visit the solicitors. She went to the solicitors to arrange the conveyancing and arranged the mortgage without Mr Wing’s involvement. Neither party produced any evidence from the solicitors who dealt with the purchase or from the solicitor’s conveyancing file.
10. In October 2004, the house, 55 Braeside was purchased for £145,750 in the sole name of Miss Eades. The purchase was financed with £95,750 from the proceeds of sale of 45 Farm Meadow Road and the balance was raised on mortgage in the sole name of Miss Eades from Nationwide Building Society. Miss Eades was registered as sole proprietor on 10 th November 2004.
11. Miss Eades said that there was no agreement for Mr Wing to pay towards the mortgage. She was able to pay the mortgage from her own income. At the time, Miss Eades was working for her father’s company, QED Scaffolding Ltd. She was paid £25,000 a year. Her salary was increased to £40,000 in 2007. On the birth certificate of Mr Wing and Miss Eades’s daughter, Aimee, Miss Eades occupation is described as “accountant”. Miss Eades said that her occupation was bookkeeper. She had an Association of Accounting Technicians foundation qualification.
12. Following the purchase, the mortgage was paid by direct debit from the account of Miss Eades at HSBC being account number 51604996. The monthly mortgage payments were £331.86 and they remained at this rate throughout the period that instalments of mortgage were paid, that is until 2010. In addition to the regular mortgage instalments, additional payments towards the mortgage were made by standing order from that same account. These were £100 a month paid from 30 th May 2006 to 28 th December 2006 and £400 per month paid from 29 th January 2007 to 30 th November 2009.
13. Mr Wing said that he drew out £150 a week from his account with NatWest and paid it to Miss Eades to go towards the mortgage and that the rent from 45 Upholland Road was also handed over to Miss Eades, either directly or by Mr Wing withdrawing a similar amount in cash from his Halifax account and handing it over to Miss Eades. He said that he also did work on his own account for which he was paid in cash and which he handed over to Miss Eades. Miss Eades said that Mr Wing gave her between £200 and £300 in cash every two weeks or so for his “keep” and as contribution towards food and bills. She did not ever pay that amount into her HSBC current account.
Works to Braeside
14. The parties did not move into 55 Braeside as soon as it had been purchased. Works were carried out to that property first. Mr Wing said that when the house was purchased, it needed a lot of work; re-wiring, re-plumbing, relaying floors, new kitchen and bathroom, re-plastering, new ceilings, straightening and re-enforcing the staircase and re-landscaping the gardens. He said that he a stripped out the house. The need for this work was not identified in the survey report from Countrywide Surveyors prepared after an inspection on 17 th August 2004. The only work identified in the report as necessary was work to make the staircase safe for children. There is no real dispute however that substantial work was done to the house in the months after it was purchased, that a stove was installed in 2006 and that subsequently in 2008 there was work to the garden. There is a dispute however about how much work was done by Mr Wing himself and whether he paid for any of it.
15. An electrician was brought in to do some rewiring work. Miss Eades said he was called Duncan McCloud. Mr Wing accepted he could have been called Duncan McCloud. Mr Wing said that the electrician was paid for joint funds.
16. Mr Wing collected a new bathroom suite. Miss Eades paid for it. Mr Wing said that this was because Miss Eades was in change of all the couple’s finances and payment came from joint funds. The bath and basin were installed by Mr Middleton. Mr Middleton was paid £1,780 on 4 th November 2004 and £1,000 on 14 th December 2004 out of Miss Eades’s bank account for this work and for installing some radiators.
17. Mr Wing said that he removed what appeared to be tar on the floors and laid a self-levelling concrete base. A professional joiner then laid a wooden floor on top and was paid out of joint funds. Miss Eades said the floor was laid by a retired builder and that this was arranged by her father. K Flooring was paid £2,500 out of Miss Eades’s bank account. Mr Wing said this was for flooring in the conservatory.
18. Mr Wing said that an industrial heating/air conditioning unit was installed and paid for out of joint funds.
19. Miss Eades said that she paid Abbotts £318 for a banister and spindles for the staircase.
20. Mr Andy Yates was paid out of Miss Eades’s account to fit a new kitchen. Mr Wing took out and disposed of the old kitchen and helped Mr Yates to fit the new kitchen. Miss Eades denied in cross-examination that Mr Wing had taken out the old kitchen. Miss Eades produced a receipt from A Yates, kitchen fitter for £770 for “fitting kitchen and wood floor”, paid in cash on 25 th January 2005.
21. Bedrooms were replastered and decorated. Miss Eades paid £651.42 to EnaShaw Fine Furnishing for wallpaper purchased on 26 th February 2005. Miss Eades produced an undated estimate or invoice (it is not clear which it is) from J.C. for plastering bedroom walls for £210
Miss Eades said that the house was professionally redecorated. She produced an undated estimate or quote for painting and wallpapering. The name of the person or company giving the estimate or quote is illegible on the copy produced. Miss Eades produced an undated receipted invoice from R&B Kitchens Bedrooms for £2,310 for fitted bedrooms
22. Miss Eades was invoiced on 22 April 2006 by D Roberts Heating for £600 for a multi-fuel stove.
23. Decking was laid in the rear garden. Mr Wing said he laid the decking with the help of Mr John Fishwick and that he paid £2000 for the decking and for Mr Fishwick to help him. He said that he paid with compensation money he received following an injury to his hip sustained at work. Miss Eades paid a cheque to Mr Fishwick on 31 st July2008 for £1,225, which she said was for some decking to be done at the property. Mr Wing said this was payment for work to the conservatory and front bay windows and not for the decking.
Mr Wing said that he did gardening himself. He levelled ground and laid cobbles. He constructed a black slate monument and laid an intricate patterned pavement with beds for plants and shrubs. He fenced off the side garden, had 10 tonnes of top soil delivered and raised the lawn as a play area for Aimee. He erected trellis and laid turf with the help of a friend. This work would appear to have been done in 2008 because Aimee was not born until 3 rd November 2008. Mr Wing said that he paid someone to tidy up and finish off the laying of Indian stone paving after Miss Eades refused to pay the man who had laid some because she was unhappy with his workmanship. Miss Eades said that the gardening work Mr Wing did was to mow the grass and cut the conifers once a year.
24. Mr Houghton gave evidence for Mr Wing. His evidence, as it appeared following cross-examination was that he had seen Mr Wing doing work in the garden. He saw Mr Wing planting conifers around the garden. He also saw him put up a metal fence and lay soil and turf. He also saw him construct a 3 feet high slate feature. He had also advised Mr Wing about how to do things in the house and had seen Mr Wing fitting a switch on the landing and putting up a light fitting in a bedroom.
Letting of 45 Upholland Road
25. Mr Wing said that once the parties had moved into 55 Braeside, 45 Upholland Road was let out and that the rent was paid to Miss Eades to put towards the mortgage. On 7 th July 2005 Michael Reay of Michael Reay Ltd, letting and managing agents, emailed Miss Eades saying
“Please find attached copy of property management contract as per discussion with Andy on Monday evening. I will not be charging a finders fee as you have found the tenant yourselves”.
Mr Wing produced account statements from Michael Reay Ltd., letting and managing agents, for August 2005, November 2005, 0ctober 2006, and February 2007 showing collection by them of rent for 45 Upholland Road and payment by them to Mr Wing of the net rent after deduction of a management fee. The October 2006 statement has written upon it in manuscript the words, “Andrew, Copy of the statement for the £530 I paid direct into your account on 20 th November 2006. On 12 th April 2007 Miss Eades signed a receipt for £575 as 1 months rent for 45 Upholland Road. Mr Wing produced receipts dated 9 th May 2007 and 14 June 2007, each being for one month’s rent received for 45 Upholland Road from Donna Abdesalam in the sum of £575. There are no corresponding credits into Mr Wing’s bank account 50750739 or into any bank accounts for which Miss Eades produced statements but there are entries in a bank statement produced by Mr Wing for his Halifax account 00963639 showing a payment by standing order on 7 th May 2010 of £550 and a cheque for £500 on 12 th June 2010, which Mr Wing accepted in cross-examination were payments of rent.
Mr Wing’s income
26. Mr Wing was employed by Wigan Metropolitan Borough Council and paid fortnightly. His wages varied but he was paid after deductions a minimum of approximately £471 per fortnight and often more. His wages were paid into his NatWest account number 50750739. In the period 6 th April 2006 to 31 st December 2006 he was paid £11,607.27; in 2007 he received £14,613.83; in 2008 he received £14,987.98; and in 2009 he received £12,875.11. Mr Wing also received Disability Living Allowance, paid monthly into his NatWest account number 50750739. For period May 2006 to 31 st December 2006, he received £2,091.85. For the year 2007 he received £3,097.30. For the year 2008 he received £3,215.25. For the year 2009 he received £3,365.45.
Mr Wing’s business
27. In 2007 Mr Wing went with Miss Eades to obtain advice about setting up a business from St Helens Chamber. They were provided with a cash flow template. Mr Wing produced a completed but unsigned and not dated, application form for a grant to buy equipment to set up a tree surgery business. Miss Eades’s evidence was that she though the application form was never completed. There was no evidence that Mr Wing ever received a grant. Mr Wing produced a number of invoices on notepaper headed “Heartwoods Arbor Care” and giving the 55 Braeside Crescent address. Thirteen are dated 2 nd March 2009 and addressed to “Busy Bee Nurseries” at various different addresses and are for “chainsaw carved mushrooms”. They are for amounts totalling £1,605. He also produced 2 invoices dated 27 th and 30 th May 2009 addressed to Miller Construction for work to a beech tree, for sums totalling £1,835.36. He also produced an invoice to Knowsley Metal Fabrications dated 9 th September 2009 for £1,250 for the removal of hedges and shrubs, and an invoice to LP Groundworks dated 15 th October 2009 for £427.50 for chainsaw carved toadstools. On the last day of the hearing, Mr Wing produced bank statements from a NatWest account 48560723. This account was in the name of Mr Wing “T/A Heartwoods Arbor Care”. These statements covered the period July 2008 to June 2011. The total sums deposited into this account were £1,800. Mr Wing asserts that he gave all his earnings from this business to Miss Eades and that he believes the amount he gave Miss Eades was greater than the amount paid into this account.
Payments to Miss Eades
28. Miss Eades accepted that she received sums of money from Mr Wing but disputed that these were sums paid either towards the mortgage or to pay for works to 55 Braeside. Miss Eades produced copy bank statements.
(1) She produced bank statements for her HSBC account 51604996 from July 2005 to December 2010. This was the account into which her salary from QED Scaffolding was paid and from which the mortgage was paid. The bank statements show cash credits to the account of £300 on 3 rd March 2006 and £500 on 5 th June 2006,
(2) She produced bank statements for her HSBC Premier Savings Account (renamed a Flexible Saver account from December 2008) being account number 81591452 for the period June 2005 to September 2010. The bank statements show the account being credited with a number of round cash sums in 2006; £620 on 27 th January, £320 on 9 th February, £200 on 20 th April 2006, £500 on 27 th April 2006, £400 on 7 th August 2006, £200 on 10 th August 2006, £770 on 22 nd August 2006, £1,400 on 27 th October 2006. There were no credits made during 2007 except for a credit of £4,781.25 on 20 th December 2007. In 2008, there were cash credits of £458 on 21 st January 2008, £195 on 22 nd May 2008, as well as a number of much smaller credits of odd sums. Miss Eades conceded that there were some payments into this account of cash that came from Mr Wing, which may have amounted to £5,000. She said that this was Mr Wing’s contributions of his share of the cost of a number of holidays to New Zealand, Goa, Gambia, China, Egypt, Greek islands, Turkey, Spain and France. She booked the holidays and Mr Wing gave her some cash towards the cost.
(3) She produced bank statements for her FlexAccount with Nationwide, being account number 632987603 for the period from 31 st December 2004 to June 2010.
(4) She produced bank statements for her account 85921545, being an “Investdirect” account with Nationwide for the period November 2004 to September 2010.
Miss Eades also said that she lent Mr Wing money to buy a Land Rover and to help buy a wood chipper and chain saws. Mr Wing paid her back in cash. She paid some of the cash into her FlexAccount.
29. Mr Wing had an account with Halifax number 00963639. He produced statements for this account from January 2005 to March 2011. This statements show regular monthly bank credits into the account of £467.72 from 28 th July 2005 to July 2006. There are no regular payments into the account thereafter. They also show cash withdrawals; amounting to £700 in December 2005, £1000 in February 2006.
30. Mr Wing also had an account with NatWest being account number 50750739. This account was in 2010 converted into a joint bank account. On the last day of the hearing, Mr Wing produced bank statements for this account from 6 th April 2006 to 6 th June 2012. The statements show payments into the account of Mr Wing’s wages and Disabled Living Allowance. It is not possible to ascertain from looking at the bank statements what sums were paid to Miss Eades and there do not appear to be regular payments out of the account to Miss Eades. There are numerous withdrawals of cash but it is not possible to link any particular withdrawal of cash to a payment to Miss Eades.
Engagement
31. Mr Wing said that he and Miss Eades were engaged to be married. He did not give any evidence as to where or when the engagement took place; who proposed marriage; where or when the proposal was made; when or where or in what circumstances the proposal was accepted. Mr Wing accepted in cross-examination that no plans for a wedding ceremony were ever made. He said that he purchased an engagement ring for Miss Eades in October 2006. He produced an insurance valuation on notepaper headed “Josephs jewellery inspired by dreams”, addressed to Mr Wing at the house, dated 25 th October 2006 and signed by Joseph Gibney. It is a valuation of
“one ladies platinum single stone diamond ring. Comprising one modern brilliant cut diamond set in platinum four claw setting mounted on platinum shank”.
The value given is £3,950. Miss Eades said that this was a ring she purchased herself because she wanted a nice ring and that Mr Wing and she were never engaged to be married. Miss Eades accepted that Mr Wing came with her to the jewellers when the ring was purchased. She said that she did no realise until recently that Mr Wing’s name was on the insurance valuation. Miss Eades said that she paid for the ring. She produced a receipt from the jewellers for £3,300 showing payment was made by Mastercard and a bank statement for account number 51604996, showing £3,300 being paid to Mastercard on 3 rd November 2006.
32. Two witnesses gave evidence that Miss Eades and Mr Wing were engaged. Mrs Jean Withey is an aunt of Mr Wing. She gave evidence that she was present when Mr Wing and Miss Eades told Mr Wing’s father that they had become engaged to be married and that Miss Eades showed the engagement ring to her and Mr Wing’s father. Mr Houghton said that he was present at a local public house when Mr Wing and Miss Eades announced their engagement to everyone at the public house. Mr Wing also produced photographs showing Miss Eades wearing the ring on the 3 rd finger of her left hand. He also produced a photograph of the parties standing outside a church in Nerja, Spain. He said that they had discussed getting married in that church. Miss Eades recognised the church but said that she and Mr Wing had never discussed getting married themselves there. Mr Wing had mentioned that a previous girlfriend of his had wanted to get married there. Miss Eades denied that there had been any announcement of an engagement either to Mr Wing’s father in the presence of Miss Withey or at a public house.
33. Mr Wing produced on the last day of the hearing a gold ring made of Welsh gold, which he said Miss Eades had given him. Miss Eades accepted that she had bought a gold ring for Mr Wing but said that it was a Valentine’s Day present given in 2006 and not an engagement ring. Miss Eades pointed to two payments made from her account 51604996 to Burns Jewellers, being £50 on 13 th February 2006 and £149 on 15 th February 2006. She said these were payments for the ring.
34. Miss Eades said that Mr Wing did propose to her once but that was in December 2009 at a time when they had separated. She gave a graphic account of Mr Wing coming to the door of the house one evening, carrying flowers, a bottle of wine and a bag of soil. He told her that he had dug the soil from the field where his mother’s ashes had been scattered and then asked her to marry him. She refused and closed the door.
35. Mr Wing completed a nomination form dated 10 th July 2006 nomination Miss Eades, described in the form as his partner, as the person to whom any lump sum payable on his death under his occupational pension scheme should be paid.
36. The initial purchase of 55 Braeside Crescent was the purchase of a long leasehold interest. The freehold was transferred into the name of Miss Eades in July 1996 for £50. The purchase money plus legal costs and an administration fee paid to the vendor’s agents were paid out of Miss Eades’s HSBC account number 51604996. The correspondence concerning the purchase was addressed to Miss Eades. Mr Wing could not recall any involvement in the purchase of the freehold.
37. Between December 2007 and April 2008 Mr Wing and Miss Eades had email correspondence about raising money to buy a house in France. Miss Eades said in her evidence that Mr Wing wanted to sell his house in Upholland Road and buy a house in France. The correspondence suggests significant involvement by Miss Eades. Monique Thorez of UCB sent a repayment mortgage quote for E170,000 to Miss Eades on 26 th February 2008. The covering email letter is addressed “Hi Lorraine”. An email signed “Andrew and Lorraine” and sent to the estate agent, Jason Leach on 19 th February 2008 includes the statement, “ We don’t think we could get anywhere near 210k , as house prices in the UK have started to fall, therefore, we’ve had to reduce the price for our house and we don’t want to borrow anything above this as we would find the repayments too high” (emphasis supplied). Although all emails were sent on Miss Eades’s email account, some emails are signed by Mr Wing, some by Miss Eades and some by both of them. The correspondence gives the very clear impression that both Miss Eades and Mr Wing were intended to be involved in the purchase. Mr Wing wrote on 19 th February 2008 about works to the house in France, saying “Lorraine would want a new kitchen and bathroom anyway”. On 26 th February 2008 Miss Eades wrote to Monique Thorez attaching “details of our income etc as requested”. The emails also show that both Mr Wing and Miss Eades considered buying the house in France before Mr Wing’s house sold and obtained mortgage quotes on this basis. Miss Eades sent an email to Mr Tom McCullock on 12 March 2008 in which she said
“We are still trying to decide what to do. We are mulling over our finances and trying to decide on a short-term mortgage. We think we will put an offer in for that last house we looked at. We went back on Sunday morning to have another look at it and all three of us really like it, so as they say “nothing ventured nothing gained”.
The reference to “all three of us” was to Miss Eades, Mr Wing and Miss Eades’s son, Joshua.
Mr Wing gave notice to the estate agents on 6 th September 2008 to take his property off the market.
38. Mr Wing and Miss Eades have a daughter, Amy, who was born on 3 rd November 2008.
39. Mr Wing and Miss Eades separated for some time in 2009. The mortgage was paid off in December 2009 with monies given to Miss Eades by her parents. Miss Eades produced a copy of a cheque for £26,000 dated 10 th December 2009 and paid by Mr and Mrs Eades to Miss Eades.
40. On 10th June 2010 Miss Eades transferred £500 from her account 85921545 with Nationwide to her account 632987603 with Nationwide and then transferred that sum to Mr Wing. On 16 th June 2010 Miss Eades transferred £9,500 in the same way to Mr Wing.
41. In December 2010 the relationship broke down finally and Mr Wing left the house.
Mr Wing’s Mental Capacity
42. Mr Wing produced a letter from Dr Howard Jackson, clinical director and consultant clinical neuropsychologist of the Transitional Rehabilitation Units. Mr Wing was at Transitional Rehabilitation Units between 1996 and 1998. Dr Jackson wrote as follows
“It was my opinion that by virtue of his brain injury and consequent cognitive impairments (most importantly impaired executive functioning) he lacked mental capacity to weigh up information regarding large sums of money, entering into financial contracts or managing his estate. He was also vulnerable and easily duped as a result of his neuropsychological impairments. In my opinion, these impairments were permanent. Therefore in 2008, I would have considered Mr Wing a vulnerable adult with at best borderline mental capacity to manage his finances and I think this status persists today”.
Mr Wing had not sought prior to the hearing and was not given permission to rely on expert medical evidence. Dr Jackson was not called to give oral evidence. Miss Eades was asked about the evidence in cross-examination and said that she did not agree with Dr Jackson’s conclusions
The Law
43. Where the legal title to a house is in a sole owner, the presumption is that the sole owner has the sole beneficial interest. There was no express declaration of trust of 55 Braeside in favour of Mr Wing. Mr Wing seeks to overturn the presumption that Miss Eades is the sole beneficial owner by establishing that Miss Eades holds 55 Braeside on a constructive trust for him. T he elements of a constructive trust are those explained by Lord Bridge of Harwich in Lloyds Bank Plc. v. Rosset [1991] 1 AC 107, at p.132:
"The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting the claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel."
Where the parties have not used words to communicate their intention, the court may infer from their conduct an intention that both are to have an interest in the property. Lord Bridge said in Lloyds Bank Plc. v. Rosset at p, 133A
“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 … trust. But … it is at least extremely doubtful whether anything less will do”.
44. In Oxley v. Hiscock [2004] 3 All ER 703 at paragraph 68 Lord Justice Chadwick gave this useful summary of the law as it relates to sole name cases
“I have referred, in the immediately preceding paragraphs, to "cases of this nature". By that, I mean cases in which the common features are: (i) the property is bought as a home for a couple who, although not married, intend to live together as man and wife; (ii) each of them makes some financial contribution to the purchase; (iii) the property is purchased in the sole name of one of them; and (iv) there is no express declaration of trust. In those circumstances the first question is whether there is evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial share in the property. In many such cases – of which the present is an example – there will have been some discussion between the parties at the time of the purchase which provides the answer to that question. Those are cases within the first of Lord Bridge 's categories in Lloyds Bank Plc v Rosset. In other cases – where the evidence is that the matter was not discussed at all – an affirmative answer will readily be inferred from the fact that each has made a financial contribution. Those are cases within Lord Bridge's second category. And, if the answer to the first question is that there was a common intention, communicated to each other, that each should have a beneficial share in the property, then the party who does not become the legal owner will be held to have acted to his or her detriment in making a financial contribution to the purchase in reliance on the common intention” .
45. Lord Bridge’s observation in Lloyds Bank Plc v Rosset that it is extremely doubtful whether anything less than direct contributions to the purchase price would justify the inference that the party whose name was not on the legal title should have a beneficial interest in the property was the subject of comment in the House of Lords in Stack v Dowden [2007] 2 AC 432 and by the Supreme Court in Jones v. Kernott [2011] 3 WLR 1121. Both these cases dealt with a situation in a domestic context where two people buy a house together in their joint names but there is no express declaration of trust. Lord Walker in Stack v. Dowden expressed doubt whether Lord Bridge’s doubts about whether anything less than direct contributions towards the purchase price could form the basis for an inference that both parties were to have an interest in the property
“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”.
Also in Stack v Dowden Lady Hale said
“There is undoubtedly an argument for saying, as did the Law Commission in Sharing Homes (2002, op cit, para 4.23) that the observations, which were strictly obiter dicta, of Lord Bridge of Harwich in Lloyd's Bank plc v Rosset [1991] 1 AC 107 have set that hurdle rather too high in certain respects. But that does not concern us now”.
In Jones v. Kernott Lord Walker and Lady Hale said at paragraph 52
“This case is not concerned with a family home which is put into the name of
one party only. The starting point is different. The first issue is whether it was
intended that the other party have any beneficial interest in the property at all. If
he does, the second issue is what that interest is. There is no presumption of joint
beneficial ownership. But their common intention has once again to be deduced
objectively from their conduct. If the evidence shows a common intention to share
beneficial ownership but does not show what shares were intended, the court will
have to proceed as at para 51(4) and (5) above” .
46. Lady Hale set out at paragraph 69 factors relevant to ascertaining the parties’ intentions but that was in the context of determining whether joint owners intended that their beneficial interests should be different than their legal interests. In Stack v Dowden Lady Hale said:
47. The starting point is therefore for me to determine whether Mr Wing and Miss Eades had a common intention that 55 Braeside should be held by Miss Eades on trust for herself and Mr Wing. T he intention is to be deduced objectively – it is the intention which was reasonably understood by the other party to be manifested by that other party's words or conduct. In considering whether the intention can be deduced from conduct, it seems to me that following the strictures of Lord Walker and Lady Hale in Stack v. Dowden, I should not look only for direct contributions towards the purchase price but may look at the conduct of the parties more widely, keeping in mind always that the task is to discover the intention of the parties.
48. If the common intention is established but it does not indicate in what shares the property was to be held then (at this stage) the determination of the shares in which the property is held is a matter to be decided by reference to what is fair having regard to the whole course of dealing in relation to the property. That appears from Oxley v. Hiscock and the following passage in the judgment of Lord Justice Chadwick, as cited with approval in Stack v Dowden :
"But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have—and even in a case where the evidence is that there was no discussion on that point—the question still requires an answer. It must now be accepted that (at least in this court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property. And, in that context, 'the whole course of dealing between them in relation to the property' includes the arrangements which they make from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home."
49. If the parties' intention changes subsequently, the court will give effect to the changed intention. In such a case the court must first seek to ascertain the changed intention objectively and where possible give effect to that intention. Where that search proves fruitless the court is entitled to decide upon that intention by reference to what is fair.
Findings
50. I do not find that there was any express agreement, arrangement or understanding between Mr Wing and Miss Eades at the time of the purchase that 55 Braeside should be owned beneficially by both Mr Wing and Miss Eades.
51. I accept Miss Eades’s evidence that initially the parties agreed they would both sell their houses and buy a house together. Miss Eades evidence about this was convincing. I can think of no reason why Miss Eades should have given this evidence if it was not true. It is not a piece of evidence that could have been thought in advance to be necessary to further her case or to have even advantaged her case. Miss Eades’s evidence in this regard also ties in with Mr Wing’s evidence that Miss Eades started looking at houses worth about £500,000 but later looked at cheaper houses. This is something which is consistent with an initial plan that both parties should sell their houses and buy another house together. That initial plan was not put into effect because Mr Wing wanted to keep his house and to keep it as his own separate property, as he clearly stated in his evidence. It represented to him the compensation he had received from his accident and he wanted it to remain his and for Miss Eades to have no claim upon it.
52. 55 Braeside was purchased with money realised on the sale of Miss Eades’s house and with a small mortgage. The mortgage was taken out in Miss Eades’s sole name. It was of an amount which she could borrow on the basis of her sole income of £25,000 per annum and which she could afford to repay out of her income. The monthly mortgage instalments of £331.86 represented a little over 25 per cent of her take home pay for the month. I do not accept Mr Wing’s suggestion that Miss Eades was unable to purchase the house without his help. The overpayments of mortgage, being £100 a month and then £400 a month from 1997 when Miss Eades was earning £40,000, were amounts which I consider Miss Eades was able to afford from her own monies.
53. The money realised on the sale of Miss Eades’s house represented part of the settlement she had received on her divorce. 55 Braeside was purchased at a time when Mr Wing had made it clear to Miss Eades that he wished to retain his own house and that he did not wish Miss Eades to acquire an interest in that house. Against that background, I think it highly improbable that Miss Eades would have agreed to Mr Wing having an interest in a house purchased using her capital, whilst he retained his house exclusively. I accept the evidence of Miss Eades that she intended to purchase a house in her name with money raised from the sale of her house and with money borrowed in her name . I do not accept Mr Wing’s evidence that it was intended he should have an interest in 55 Braeside.
54. Mr Wing gave no convincing explanation as to why 55 Braeside was purchased in Miss Eades’s name alone if he was to have an interest in it. There is no obvious reason why he should not have joined in the purchase or been a joint borrower of the mortgage monie if it was intended that he should have an interest.
55. I do not accept Mr Wing’s evidence that the solicitors acting on the purchase of 55 Braeside knew that though Miss Eades was to be the sole legal owner, the house was to be owned beneficially by Miss Eades and Mr Wing together. If they had been so aware, they would have advised the parties to enter into a trust deed to set out the basis on which the property was owned beneficially. Such advice would have been recorded in an attendance note on the file. Mr Wing said in cross-examination that he could not recall having been advised by the solicitors to enter into a trust deed. I think it utterly improbable that the solicitors were told that Mr Wing was to have an interest in 55 Braeside, as Mr Wing asserts.
56. I also take into account the evidence Mr Wing gave in proceedings under the Children Act concerning Aimee. Mr Wing made a witness statement in those proceedings in April 2011. In that statement he said
“I would like to make it clear that I have no interest in Ms Eades’s property. We are both in the fortunate position of owning our own properties which enable us to both provide a home for Aimee”.
Mr Wing said that he did not have a solicitor acting for him at this time and that he made the statement because he did not want to antagonize Miss Eades but wanted to do all he could to ensure that he won the right to see his daughter. I do not accept this explanation. Although Mr Wing said that he had no interest in “Miss Eades’s property” i.e. 55 Braeside, he did maintain in that statement a claim to a static caravan that Miss Eades claimed belonged to her. I do not consider that Mr Wing would have maintained this claim if his sole interest in making the witness statement was not to antagonize Miss Eades. It seems to me that what Mr Wing said in this witness statement represents his then understanding of the arrangement with Miss Eades. It was later that he came to consider that he might be able to make a claim to a share in 55 Braeside.
57. I turn then to consider whether it is to be inferred from the dealings between the parties that Mr Wing was to have an interest in 55 Braeside. In addition to the facts set out above when considering whether there was any express agreement, understanding or arrangement for Mr Wing to have an interest in the house, the following additional facts seem to me to be relevant to the consideration of whether an intention that he should have a beneficial interest should be inferred.
58. I accept (indeed it was not in dispute) that the parties intended at the time of the purchase that they should live together in that house. It was to be a home for Mr Wing with Miss Eades and Joshua as a family unit. That is important background but it does not without more mean that the parties intended Mr Wing should be a part owner of the house. It is also to be kept in mind that Mr Wing had retained his property and that he considered it important that he should retain it and not share it with Miss Eades. It would not be surprising if, having been told by Mr Wing that he wanted to keep his own house, Miss Eades considered that 55 Braeside should belong to her alone.
59. Mr Wing and Miss Eades maintained separate bank accounts. In a statutory declaration made on 15 th August 2011, Mr Wing stated that when he and Miss Eades started living together, his account with NatWest was transferred into joint names and that his wages were paid into the joint account. However, he accepted in cross-examination that he and Miss Eades did not have a joint account until 2010. The position is that until near to the end of their relationship, Mr Wing and Miss Eades had separate bank accounts.
60. I do not accept that Mr Wing effectively handed over all his income to Miss Eades. Mr Wing’s bank account was an active one. It is plain from the bank statements that Mr Wing used his account for numerous small payments as well as withdrawing cash.
61. Mr Wing paid Miss Eades about £150 per week as his contribution towards household bills. It is not possible to tell from the documentary evidence produced what, if any, additional sums he paid to Miss Eades. It is quite probable that as he was in a relationship with Miss Eades, he would have made payments from his account which would have benefitted both of them.
62. It is not possible from the documentary evidence to determine the origin of the monies paid by Miss Eades works to 55 Braeside in the period November 2004 to the late spring of 2005. These sums total about £7,500. Mr Wing was not himself able to point to any particular payments made by him to Miss Eades to cover any particular bill. Neither party produced bank statements for this period. Mr Wing had an income of approximately £16,000 per annum (including his Disable Living Allowance) at the time 55 Braeside as purchased but there is no evidence that his income had increased from the period running up to the commencement of the works. There is no evidence that he had any significant savings at the time of the commencement of the works and indeed, it is not his case that he had savings. Miss Eades had received some money on her divorce. It would have been possible for her to use some of this money to pay for the works to 55 Braeside. Having seen both Mr Wing and Miss Eades give evidence, I accept the evidence of Miss Eades that she paid for these works.
63. I then consider the work done by Mr Wing to 55 Braeside. The amount of work that Mr Wing did to 55 Braeside at the time of the purchase is not such as to lead to the inference that the common intention of the parties was that he should have an interest in that property. Mr Wing did some stripping out work and helped tradesmen who did most of the work inside the house. What he did is compatible with his acting out of the desire to make a comfortable home for himself and Miss Eades and with what Lady Hale described as “natural love and affection”.
64. I do not consider that the email correspondence about the purchase of a house in France assists me in determining whether the parties agreed that Mr Wing should have an interest in 55 Braeside. There are elements of the correspondence which could suggest that the house in France was to be a joint purchase albeit one using the proceeds of sale of Mr Wing’s house at 45 Upholland Road but it does not follow from that that the purchase of 55 Braeside Crescent was intended to be a joint purchase.
65. Having considered all the factors set out above, I do not consider I should infer that Mr Wing was to have a beneficial interest in 55 Braeside. Such an inference would be inconsistent with the explanation Miss Eades gave as to why she wanted to buy a house herself, an explanation which I have accepted.
66. I should add that I do not consider Mr Wing’s brain injury should lead me to a different conclusion. That injury did not affect Mr Wing’s ability to recognise that 45 Upholland Road belonged to him solely and to be alert to the risk of Miss Eades acquiring an interest in it. It would not have affected his ability to form an intention as to, or to make an agreement with Miss Eades as to, the basis on which 55 Braeside was to be acquired and owned. Further, as there was no application ahead of the hearing for permission to rely on expert evidence as to Mr Wing’s mental or psychological condition and Miss Eades did not accept that Mr Wing was not capable of managing his own finances, I do not consider that I should accept the untested written evidence of Dr Jackson. If Dr Jackson had given evidence, he would have been asked to explain how it was that the Court of Protection restored Mr Wing to the management of his property and affairs. The Court of Protection must have decided at the time of discharge that Mr Wing was capable of managing his property and affairs. It is not suggested that Mr Wing suffered anything to worsen his condition after the date of the discharge. In the circumstances, I consider that so far as it may be relevant, I should proceed on the basis that Mr Wing was at the time of purchase of 55 Braeside capable of managing his property and affairs.
Engagement
67 Section 37 of the Matrimonial Proceedings and Property Act 1970 provides
“It is hereby declared that where a husband or a wife contributes in money or money’s worth to the improvement of real or personal property in which or in the proceeds of sale of which either or both of them has or have a beneficial interest, the husband or wife so contributing shall, if the contribution is of a substantial nature, and subject to any agreement to the contrary express or implied, be treated as having then acquired by virtue of his or her contribution a share or an enlarged share as the case may be in that beneficial interest”.
Section 2 of the Law Reform (Miscellaneous Provisions) Act 1970 provides
“(1) Where an agreement to marry is terminated, any rule of law relating to the rights of husbands and wives in relation to property in which either or both has or have a beneficial interest, including any such rule as explained by section 37 of the Matrimonial Proceedings and Property Act 1970 shall apply, in relation to any property in which either or both of the parties to the agreement has a beneficial interest while the agreement was in force, as it applies in relation to property in which a husband or wife has a beneficial interest”.
As an additional or alternative basis of claim, Mr Wing seeks to rely on these provisions as giving him an interest or an enlarged interest in 55 Braeside.
68. The statutory provisions require consideration of
(a) whether the parties entered into an agreement to be married; if so
(b) whether Mr Wing, while engaged to be marred to Miss Eades, made a contribution in money or money’s worth towards the improvement of the property;
( c) whether that contribution was substantial; and
(d) whether there was any agreement express or implied that Mr Wing should not thereby acquire an interest in the property.
69. In considering whether Mr Wing and Miss Eades became engaged to be married in about October 2006, I have in mind as important background the fact that by that date Mr Wing and Miss Eades had been in a relationship for about 5 years and had been living together for about 4 years.
70. I accept the evidence of Mrs Withey that she was present when Mr Wing and Miss Eades announced to Mr Wing’s father that they were engaged to be married and showed him Miss Eades’s engagement ring. Mrs Withey appeared to be a straightforward and honest witness. It appears that she has been assisting both Mr Wing and Miss Eades in the difficulties over Mr Wing seeing Aimee following the break down of their relationship. Mrs Withey has collected Aimee from and returned her to Miss Eades’s home when Mr Wing was to see her. I do not consider that she would have said that she was present when Mr Wing and Miss Eades made the announcement to Mr Wing senior if it was not true. It is not the sort of thing about which she is likely to be mistaken.
71. I also accept the evidence of Mr Houghton that he was present when Mr Wing and Miss Eades announced there engagement in the public house. Mr Houghton was generally an honest witness. Though he may have used loose language in his witness statement when describing the work Mr Wing did to 55 Braeside and thereby exaggerated the amount of work Mr Wing did, he was quite straightforward in the answers he gave in cross-examination, stating clearly the limited amount of electrical work he had helped Mr Wing to do personally and the limits of what he himself had seen Mr Wing do.
72. I do not consider that Mr Wing’s father would have been told that Mr Wing and Miss Eades were engaged to be married and shown a ring unless Mr Wing and Miss Eades had agreed to get married. I do not accept Miss Eades’s evidence that the ring purchased in October 2006 was not connected to her becoming engaged to be married to Mr Wing but that she simply wanted a nice ring. It seems to me that I am entitled to take judicial notice of the fact that a solitaire diamond set on a platinum or gold band is a style of ring frequently chosen as an engagement ring to be worn (usually) by a woman to symbolize that she has become engaged to be married. I also take judicial notice of the fact that an engagement ring is by tradition worn on the third finger of the left hand. I have no doubt that Miss Eades was aware of these facts. Miss Eades chose a solitaire diamond ring and she chose to wear it on the third finger of her left hand. Had Miss Eades simply wanted a nice ring and wanted to solitaire diamond ring, she could have purchased it in a size to wear on a different finger.
73. The fact that Miss Eades wore the ring on the third finger of her left hand seems to me to indicate either that Miss Eades was engaged to be married or that she wanted other people to think that she was engaged to be married. In the light of Mrs Withey’s evidence, I am satisfied that Miss Eades wore the ring because she had agreed to marry Mr Wing.
74. I have next to consider whether while engaged to be married to Miss Eades, Mr Wing made a contribution towards the improvement of 55 Braeside. The only work done during or after October 2006 about which I have evidence is the work to the garden done in 2008. Miss Eades did not dispute that work of the description given by Mr Wing was done to the garden but she did deny that it was Mr Wing who did the work. Mr Wing’s evidence about his having done work in the garden is to some degree corroborated by the evidence of Mr Houghton, who saw him lay soil and turf, put up a fence, and build a feature with slate. I accept that Mr Wing did this work. I also accept that he played a part by physical labour in the laying of decking in the garden. It is then necessary to consider whether that work amounts to “improvement” of 55 Braeside within the meaning of Section 37. I was not directed to any authority on the meaning of “improvement” for the purposes of Section 37. Given that the consequences of a finding that a person made a contribution to an “improvement” of a property is that he obtains a beneficial interest or an increased beneficial interest in the property, it seems to me, in the absence of having been referred to any authority, that an improvement is something which enhances the value of the property. There was no evidence before me as to the effect on the value of 55 Braeside of the gardening work done by Mr Wing in 2008. It is not obvious that this work would have improved the value of the property and I do not consider that I can assume it did. In the absence of evidence that the work to the garden enhanced the value of 55 Braeside, I do not find that it was an “improvement” for the purposes of Section 37.
Conclusions
75. I shall direct the Chief Land Registrar to cancel the application of Mr Wing to register a restriction on the title to 55 Braeside. I find that Mr Wing is not entitled to a beneficial interest in that property, either under a constructive trust or under Section 37 of the Matrimonial Proceedings and Property Act 1970.
76. As Miss Eades has succeeded in opposing the application, my preliminary view is that Mr Wing should pay the costs of the proceedings. Any party who wishes to submit that some different order should be made as to costs should serve written submissions on the Tribunal and on the other party by 5pm on 17 th January 2014.
. BY ORDER OF THE TRIBUNAL
Dated this 13 th December 2013