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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Wall v Munday [2018] EWHC 879 (Ch) (27 April 2018) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2018/879.html Cite as: [2018] EWHC 879 (Ch) |
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CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
2 Redcliff Street, Bristol, BS1 6GR |
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B e f o r e :
(sitting as a Judge of the High Court)
____________________
Alan Henry Wall (as personal representative of the estate of Bryan Charles Wall deceased) |
Appellant |
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- and - |
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Christine May Hilda Munday |
Respondent |
____________________
Robert Trevis (instructed on direct access) for the Respondent
Hearing date: 11 April 2018
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Crown Copyright ©
HHJ Paul Matthews :
Introduction
These proceedings
Appeals
The first challenge: variation of beneficial interests
"On the facts of Jones v Kernott the court did not need to examine the issue severance discretely from the quantification of shares. This was because upon the court finding that, when the parties' common intention had changed in relation to the property, they intended that Claimant should have the sole benefit of any capital gain in the joint property and the Defendant the sole benefit of any capital gain in his new home, it followed that the joint property was thenceforth owned beneficially in unequal shares and therefore on a tenancy in common. It was not therefore necessary to consider the principles of severance separately nor did the Supreme Court do so. In this case however I see it as my task to consider the principles of severance firstly and then the question of shares."
"82. Jones v Kernott was cited to me extensively. I do not think it necessary to analyse the judgment as extensively in this judgment. Basing myself on Jones v Kernott (and taking account of Barnes v Phillips which was also cited to me) I direct myself (I believe uncontroversially) that I must ask myself (before ever I can address the question as to the quantum of shares) whether there was a common intention to rearrange the beneficial interest in the property. In that enquiry in the absence of direct evidence (of which there is none) I am able to draw inferences from the conduct of the parties which would lead the reasonable observer to conclude that that was the common intention. The conduct must have been conduct observed or observable by the other party and I am to take no account of intentions of one not communicated to the other. In deciding upon the inferences that I draw on this question I take into account the following matters:
82.1. It was clear to both parties that the deceased was undertaking the burden of the mortgage outgoings on the property, its insurance and maintenance:
82.2. It was also clear to both parties (or as regards the defendant readily ascertainable if she did not in fact no) that to enable the deceased to undertake this burden he was managing and letting out a property;
82.3. Despite the deceased undertaking these burdens and receiving the benefits, the legal liability under the mortgage remained throughout a joint liability:
82.4. In theory on a sale of the property the incidence of these burdens and benefits could be adjusted by an accounting exercise:
82.5. There was no mutual conduct or conduct of one party known to the other which pointed to an adjustment of the shares in which the beneficial interest was held.
83. I therefore conclude that I am unable to infer from the conduct of the parties that there was a common intention to rearrange their beneficial interests in the property."
"In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property,
'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': Chadwick LJ in Oxley v Hiscock [2005] Fam 211, [69].
In our judgment, 'the whole course of dealing … in relation to the property' should be given a broad meaning, enabling a similar range of factors to be taken into account as may be relevant to ascertaining the parties' actual intentions."
The respondent's criticism
"In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention…"
So, before the rest of the citation can apply, it has to be
"clear … that the parties … had changed their original intention".
Yet the reference to looking at the whole course of conduct comes only later:
"that share which the court considers fair having regard to the whole course of dealing between them".
Hence, it was argued that, because it was not clear that the parties had changed their original intention, there was no need for the judge to look at the whole course of conduct between the parties.
"if the task is embarked upon, it is to ascertain the parties' common intentions as to what their shares in the property would be, in the light of their whole course of conduct in relation to it…"
For this proposition they cited the speech of Lady Hale in Stack v Dowden [2007] 2 AC 432, HL, at paragraph 60. There, Lady Hale (with whom all their Lordships except Lord Neuberger agreed) had said:
"The law has indeed moved on in response to changing social and economic conditions. The search is to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it."
Decision
"no mutual conduct or conduct of one party known to the other which pointed to an adjustment of the shares in which the beneficial interest was held".
'... [S]pecific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance … of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation' (Biogen Inc v Medeva Plc [1997] RPC 1, 45, applied recently in Chen v Ng [2017] UKPC 27).
The second challenge: costs
"14. The first thing that I have to decide in approaching my discretion under {CPR] Part 44 is who has been the successful party, or whether anybody has been the successful party, and I have been addressed with arguments from both sides which descend to the pleading complexities of the case in order to draw from them logically the consequence on success or otherwise for which they contend. In my judgment, this aspect of the case is much more broadly based. I have to look to see what was it that the claimant was claiming and what was it the defendant was claiming, and then look to see what the result was.
15. The claimant was claiming that he, or the estate, was entitled to the whole of the beneficial interest in the property on account of the deal, for want of a better word, that had been reached in relation to it in 1974. The alternative case that was advanced before me was that if that case failed and therefore we started with a position that the parties, on purchase, were entitled as beneficial joint tenants applying the principles of Jones v Kernott, that there had been a severance. The result of that severance, if severance had been brought about by and the result of it, was an agreement that I should infer from the evidence or from the conduct of the parties to the effect, or impute to the parties to the effect, that a very small part of the beneficial interest resided with the defendant and the great majority of it resided with the estate.
16. The defendant, for her part, was responding to the claim that there was an agreement in 1974 and was asserting that because that claim should fail, that she retained a beneficial interest and she retained a beneficial interest as a beneficial joint tenant. Therefore, by the law of survivorship, she scooped the lot. She failed on that but she defeated the claim of the claimant and the alternative claim, that, even with the agreement being rejected, he was entitled to the lion's share of the proceeds of sale. In my judgment, looked at in that way, there is no doubt as to who was the successful party overall in this litigation. The defendant recovered 50 per cent of the proceeds of sale and the claimant recovered 50 per cent set against the claimant's primary contentions that the claimant was entitled to the whole or to a substantial part of the proceeds of sale. Viewed as a jury question, I conclude that the successful party in this case was the defendant."
"14. The court, as it is now well known, has wide powers, including the power to apportion costs or to make issue-related orders for costs. Our attention has been drawn by both counsel to an unreported case of Johnsey Estates v Secretary of State for the Environment [2001] EWCA Civ 535, a landlord and tenant case where there was a claim, broadly speaking, of about one million pounds, a payment into court of about £200,000 and a judgment for a further £236,000. In his judgment, with which the other members of the court agreed, Chadwick LJ stated the applicable principles to be these (paragraph 21):
'(1) Costs cannot be recovered except under an order of the court; (2) the question whether to make any order as to costs – and, if so, what order – is a matter entrusted to the discretion of the trial judge; (3) the starting point for the exercise of discretion is that costs should follow the event; nevertheless (4) the judge may make different orders for costs in relation to discrete issues – and in particular, should consider doing so where a party has been successful on one issue but unsuccessful on another, and, in that event, may make an order for costs against the party who has been generally successful in the litigation; (5) the judge may deprive a party of costs on an issue on which he has been successful if satisfied that the party has acted unreasonably in relation to that issue; (6) an appellate court should not interfere with the judge's exercise of discretion merely because he takes the view that it would have exercised that discretion differently.'
"22. The last of those principles requires an appellate court to exercise a degree of self-restraint. It must recognise the advantage which the trial judge enjoys as a result of his 'feel' for the case which he has tried. Indeed, as it seems to me, it is not for an appellate court even to consider whether it would have exercised the discretion differently unless it had first reached the conclusion that the judge's exercise of his discretion is flawed. That is to say, that he has erred in principle, taken into account matters which should have been left out of account; left out of account matters which should have been taken into account; or reached a conclusion which was so plainly wrong that it can be described as perverse – see Altrans Express Ltd v CVA Holdings Ltd [1994] 1 WLR 394, per Lord Justice Stephenson at page 400C-F and Lord Justice Griffiths at page 403G-H."
15. The first question, therefore, is whether the judge was correct in characterising the outcome of this litigation as a draw. Mr Margolin contends in effect – these are not his words but mine – that it was a no-score draw in the sense that both parties' main shots at goal missed, and neither managed to score any goal at all. The case therefore petered out as a stale draw because the fallback position was maintained by the judge.
16. We must ask ourselves whether the primary rule applies in this case – the general rule, that is, that the unsuccessful party will ordinarily be ordered to pay the cost of the successful party unless the court thinks otherwise. The question is, which, if any, of these parties did enjoy success in this litigation? We were referred to a judgment of Lightman J in Bank of Credit and Commerce International SA v Ali (no.3) [1999], NLJ 1734 Vol. 149 where he said that:
"For the purposes of the CPR success is not a technical term but a result in real life, and the question as to who has succeeded is a matter for the exercise of common sense."
17. I would go further and say that in a case like this, the question of who is the unsuccessful party can easily be determined by deciding who has to write the cheque at the end of the case; and there is absolutely no doubt at all that the person who has to put his hand in his pocket and pay up the money that is in dispute was Phillip. He failed; his mother succeeded. She succeeded, all the more so, because Phillip adamantly and persistently refused to pay her a penny piece, notwithstanding his fall-back position. So I am in no doubt at all that this case did not end in a draw, but ended in victory for mother. Therefore the ordinary rule should apply, and the judge was correct in applying it to the cut-off point of 14 February; but was, I regret to say, in error in failing to apply it for the costs of the hearing. That hearing was necessary. This unfortunate mother had to pursue her son to the judgment seat in order to recover that which was rightfully found to be hers. There was in my judgment, therefore, a fundamental error of principle in the judge's analysis which itself allows this court to intervene."
Decision
Conclusion