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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Williams & Glyn's Bank Ltd v Boland [1980] UKHL 4 (19 June 1980) URL: https://www.bailii.org/uk/cases/UKHL/1980/4.html Cite as: [1981] AC 487, [1980] UKHL 4, [1980] 2 All ER 408 |
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Parliamentary
Archives,
HL/PO/JU/18/240
Die Jovis 19° Junii 1980
Upon Report from the Appellate
Committee to
whom was referred the Cause Williams and Glyn's
Bank
Limited against Boland
and another, That the
Committee had heard
Counsel as well on Monday the
21st as on Tuesday the 22nd,
Wednesday the 23rd,
Thursday the 24th and Monday the 28th days of
April
last upon the Petition and Appeal of Williams &
Glyn's
Bank Limited of 20 Birchin Lane, London E.C.3.
praying
that the matter of the Order set forth in the
Schedule thereto,
namely an Order of Her Majesty's
Court of Appeal of the 7th day of
March 1979 might
be reviewed before Her Majesty the Queen in
Her
Court of Parliament and that the said Order might be
reversed,
varied or altered and that the Petitioners might
have the relief
prayed for in the Appeal or such other
relief in the premises as
to Her Majesty the Queen in
Her Court of Parliament might seem
meet; as also
upon the Case of Michael Boland
and Julia
Boland
lodged in answer to the said Appeal; and due
consideration
had this day of what was offered on either
side in this Cause:
HOUSE OF LORDS
Lord Wilberforce
Viscount
Dilhorne
Lord Salmon
Lord Scarman
Lord Roskill
WILLIAMS & GLYN'S BANK
LIMITED
(APPELLANTS)
v.
BOLAND
AND ANOTHER
(RESPONDENTS)
WILLIAMS & GLYN'S BANK
LIMITED
(APPELLANTS)
v.
BROWN AND ANOTHER
(RESPONDENTS)
[CONJOINED APPEALS]
Lord Wilberforce
MY LORDS,
These appeals, apart from one
special point affecting only Mr. Boland
, raise
for decision the
same question: whether a husband or a wife, (in each actual
case a
wife) who has a beneficial interest in the matrimonial home, by
virtue of
having contributed to its purchase price, but whose
spouse is the legal and
registered owner, has an "overriding
interest" binding on a mortgagee who
claims possession of the
matrimonial home under a mortgage granted by that
spouse alone.
Although this statement of the issue uses the words
"spouse",
"husband and wife", "matrimonial
"home", the appeals do not, in my under-
standing,
involve any question of matrimonial law, or of the rights of
married
women or of women as such. Exactly the same issue could
arise if the roles of
husband and wife were reversed, or if the
persons interested in the house were
not married to each other.
The solution must be derived from a consideration
in the light of
current social conditions of the Land Registration Act 1925 and
other
property statutes.
The essential facts behind this
legal formulation are as follows. Each wife
contributed a
substantial sum of her own money toward the purchase of
the
matrimonial home or to paying off a mortgage on it. This,
indisputably, made
her an equitable tenant in common to the extent
of her contribution. Each
house being registered land was
transferred into the sole name of the husband
who became its
registered proprietor. Later, each husband mortgaged the house
by
legal mortgage to the appellant Bank, which made no enquiries of
either wife.
Default being made, the Bank started proceedings in
the Boland
case in the High
Court, in the Brown case in the
Dartford County Court, for possession, with a
view to sale. In
each case the judge made an order for possession but his decision
was
reversed by the Court of Appeal. So the question is whether the legal
and
registered mortgage takes effect against the matrimonial home,
or whether the
wives' beneficial interest has priority over it.
The legal framework within which
the appeals are to be decided can be
summarised as follows.
2
"The rights of every person
in actual occupation of the land or in receipt
"of the rents
and profits thereof, save where enquiry is made of such person
"and
the rights are not disclosed".
In relation to rights connected
with occupation, it has been said that the
purpose and effect of
section 70(l)(g) of the Land Registration Act 1925 was to
make
applicable to registered land the same rule as previously had been
held
to apply to unregistered land (see per Lord Denning M.R. in
National Provincial
Bank Ltd. v. Hastings Car Mart Ltd.
[1964] Ch. 665, 689, and in this House
[1965] AC 1175,
1259).
3
section 70(l)(g), we should have
regard to and limit the application of the
paragraph in the light
of the doctrine of notice. But this would run counter to
the whole
purpose of the Act. The purpose, in each system, is the same,
namely,
to safeguard the rights of persons in occupation, but the
method used differs.
In the case of unregistered land, the
purchaser's obligation depends upon what
he has notice of—notice
actual or constructive. In the case of registered land,
it is the
fact of occupation that matters. If there is actual occupation, and
the
occupier has rights, the purchaser takes subject to them. If
not, he does not.
No further element is material.
". . . whoever purchases an
estate from the owner, knowing it to be in
"possession of
tenants, is bound to inquire into the estates those tenants
"have.
It has been determined that a purchaser being told particular
parts
"of the estate were in possession of a tenant, without
any information as to
"his interest and taking it for granted
it was only from year to year, was
"bound by a lease that
tenant had, which was a surprise upon him. That
"was rightly
determined; for it was sufficient to put the purchaser upon
"inquiry,
that he was informed the estate was not in the actual
possession
"of the person with whom he contracted; that
he could not transfer the
"ownership and possession at the
same time; that there were interests, as
"to the extent and
terms of which it was his duty to inquire."
Then, were the wives in actual
occupation? I ask: why not? There was
physical presence, with all
the rights that occupiers have, including the right to
exclude all
others except those having similar rights. The house was a
matri-
monial home, intended to be occupied, and in fact occupied
by both spouses,
both of which have an interest in it: it would
require some special doctrine of
law to avoid the result that each
is in occupation. Three arguments were used
for a contrary
conclusion. First, it was said that if the vendor (I use this word
to
include a mortgagee) is in occupation, that is enough to
prevent the application
of the paragraph. This seems to be a
proposition of general application, not
limited to the case of
husbands, and no doubt, if correct, would be very con-
venient for
purchasers and intending mortgagees. But the presence of the
vendor,
with occupation, does not exclude the possibility of
occupation of others. These
are observations which suggest the
contrary in the unregistered land case of
Caunce v. Caunce
[1969] 1 W.L.R. 286, but I agree with the disapproval of
these,
and with the assertion of the proposition I have just stated by
Russell L.J.
in Hodgson v. Marks [1971] Ch 892,
934. Then it was suggested that the wife's
"occupation"
was nothing but the shadow of the husband's—a version I
suppose
of the doctrine of unity of husband and wife. This
expression and the argument
flowing from it was used by Templeman
J. in Bird v. Syme-Thomson [1979]
1 W.L.R. 440-444,
a decision preceding and which he followed in the present
case.
The argument was also inherent in the judgment in Caunce v.
Caunce
(supra) which influenced the decisions of Templeman
J. It somewhat faded
from the arguments in the present case and
appears to me to be heavily obsolete.
The appellants main and
final position became in the end this: that, to come
within the
paragraph, the occupation in question must be apparently
incon-
sistent with the title of the vendor. This, it was
suggested, would exclude the
4
wife of a husband-vendor because
her apparent occupation would be satisfac-
torily accounted for by
his. But, apart from the rewriting of the paragraph which
this
would involve, the suggestion is unacceptable. Consistency, or
incon-
sistency, involves the absence, or presence, of an
independent right to occupy,
though I must observe that
"inconsistency" in this context is an inappropriate
word.
But how can either quality be predicated of a wife, simply qua wife?
A
wife may, and everyone knows this, have rights of her own;
particularly, many
wives have a share in a matrimonial home. How
can it be said that the presence
of a wife in the house, as
occupier, is consistent or inconsistent with the husband's
rights
until one knows what rights she has? And if she has rights, why,
just
because she is a wife (or in the converse case, just because
an occupier is the
husband), should these rights be denied
protection under the paragraph? If
one looks beyond the case of
husband and wife, the difficulty of all these
arguments stands out
if one considers the case of a man living with a mistress,
or of a
man and a woman—or for that matter two persons of the same
sex—
living in a house in separate or partially shared
rooms. Are these cases of
apparently consistent occupation, so
that the rights of the other person (other
than the vendor) can be
disregarded? The only solution which is consistent with
the Act
(section 70(l)(g)) and with common sense is to read the paragraph
for
what it says. Occupation, existing as a fact, may protect
rights if the person in
occupation has rights. On this part of the
case I have no difficulty in concluding
that a spouse, living in a
house, has an actual occupation capable of con-
ferring
protection, as an overriding interest, upon rights of that spouse.
' . . . upon trust to sell the
same and to stand possessed of the net
"proceeds of sale,
after payment of costs, and of the net rents and profits
"until
sale after payment of rates, taxes, costs of insurance, repairs,
and
"other outgoings, upon such trusts, and subject to such
powers and
"provisions, as may be requisite for giving effect
to the rights of the
"persons . . . interested in the land".
5
and the position as to it is
obscure. Before the Act the position was that owners
of undivided
shares (which could exist at law) had concurrent rights of
occup-
ation. In Bull v. Bull [1955] 1 Q.B. 234, it
was held by the Court of Appeal,
applying In re Warren [1932]
1 Ch. 42, that the conversion of these legal estates
into
equitable interests by the Law of Property Act 1925 should not affect
the
mutual rights of the owners. Denning L.J., in a judgment which
I find most
illuminating, there held, in a factual situation
similar to that of the instant
cases, that "when there are
two equitable tenants in common, then, until the
"place is
sold, each of them is entitled concurrently with the other to
the
"possession of the land and to the use and enjoyment of
it in a proper manner"
(I.c. p.238). And he referred to
section 14 of the Law of Property Act 1925
which provides that the
Act "shall not prejudicially affect the interest of any
"person
in possession or in actual occupation of land to which he may
be
"entitled in right of such possession or occupation".
There are decisions, in relation
to other equitable interests than those of
tenants in common,
which confirm this line of argument. In Bridges v. Mees
[1957]
Ch. 475, Harman J. decided that a purchaser of land under a
contract
for sale, who had paid the price and so was entitled to
the land in equity, could
acquire an overriding interest by virtue
of actual occupation, and a similar
position was held by the Court
of Appeal to arise in relation to a resulting trust
(Hodgson v.
Marks [1971] Ch 892). These decisions (following the law as
it
undoubtedly existed before 1925—see Barnhart v.
Greenshields I.c. p.32,
Daniels v. Davison (1809)
16 Yes. 249, Allen v. Anthony (1816) 1 Mer. 282,
284
per Lord Eldon) provide an answer to the argument that there
is a firm dividing
line, or an unbridgeable gulf, between minor
interests and overriding interests,
and, on the contrary, confirm
that the fact of occupation enables protection of
the latter to
extend to what without it would be the former. In my opinion,
the
wives' equitable interests, subsisting in reference to the land, were
by the
fact of occupation, made into overriding interests, and so
protected by section
70(l)(g). I should add that it makes no
difference to this that these same interests
might also have been
capable of protection by the registration of a caution
(see
Bridges v. Mees p.c. p.487, Land Registration Act 1925,
section 59(6)).
There was finally an argument
based upon section 74 of the Land Registration
Act 1925.
"74. Subject to the
provisions of this Act as to settled land, neither
"the
registrar nor any person dealing with a registered estate or
charge
"shall be affected with notice of a trust express
implied or constructive,
"and references to trusts shall, so
far as possible, be excluded from the
"register".
6
Mr. Boland
's appeal
The special point taken by Mr.
Boland
arises out of the facts of his case and
the nature of the
Bank's proceeding against him. This was brought under
R.S.C. Order
88 for summary judgment. Mr. Boland
contended that there was
a
dispute as to the amount actually owed by him to the Bank, and that
until
this dispute was resolved by trial, judgment for possession
ought not to be
granted against him before he had had an
opportunity of invoking the discretion
of the Court under the
Administration of Justice Act 1970 section 36. The
judgment of
Templeman J., who fully considered this point, provides a
complete
answer to this contention. It is clear that, on the view
of the matter most
favourable to Mr. Boland
, he owes a substantial
sum, of the order of £40,000,
to the Bank. He has, on the
other hand, put forward no material evidence as
to the likelihood,
or possibility, of discharging or refinancing this indebtedness,
upon
which to invoke the court's discretion under the section, and the
judge
was undoubtedly right in refusing to exercise it in the
absence of such material
evidence. In any case, there was no basis
upon which the Court of Appeal could
legitimately interfere with
the decision of the judge, and indeed no substantial
reason was
given for doing so. In my opinion this part of the decision of
the
Court of Appeal cannot be supported.
Viscount Dilhorne
I too would dismiss the appeals.
7
Lord Salmon
my lords,
Lord Scarman
MY LORDS,
"70—(1) All
registered land shall, unless under the provisions of this
"Act
the contrary is expressed on the register, be deemed to be
subject
"to such of the following overriding interests as may
be for the time being
"subsisting in reference thereto, and
such interests shall not be treated as
"incumbrances within
the meaning of this Act, (that is to say):—
" . . .
"(g) The rights of every
person in actual occupation of the land or
"in receipt of the
rents and profits thereof, save where enquiry is
"made of
such person and the rights are not disclosed;"
8
present right of occupation as
well as a right to a share in the proceeds of sale,
if and when
the house is sold: Bull v. Bull [1955] 1 Q.B. 234. It
is also conceded'
that each was at all material times living in
her house with her husband: and,
for the reasons given by my noble
and learned friend, Lord Wilberforce,
I have no doubt that the
wife was, as also was her husband, in actual occupation
of the
home.
An English lawyer ignores
history at his peril. But the lessons of our legal
history are not
always easy to discern. Legal history, even English legal history,
is
not one of unbroken continuity in the law's development: it includes
some-
times the rejection of existing principles and the
introduction of new ones.
The Land Registration legislation is an
example. The wearisome and intricate
task of examining title, and
with it the doctrine of notice have been replaced
by a statutory
system of registration (where the Act applies), subject to
the
overriding interests set out in section 70(1). These interests
take effect under the
section without registration and whether or
not a purchaser has notice of them.
I do not, therefore, read the
Act of 1925 as requiring the courts to give the
words "actual
occupation" in section 70(l)(g) the special meaning for
which
the appellants contend, namely an occupation, which by its
nature necessarily
puts a would-be purchaser (or mortgagee) upon
notice of a claim adverse to
the registered owner. On the
contrary, 1 expect to find—as I do find—that the
statute
has substituted a plain factual situation for the uncertainties of
notice,
actual or constructive, as the determinant of an
overriding interest. Nor—and
for the same reason—do I
accept the submission that assistance in interpreting
these words
is to be gained from considering such cases as Caunce v.
Caunce
[1969] 1 W.L.R. 286, which dealt with unregistered
land. The issue in those
cases was as to the circumstances in
which occupation constitutes constructive
notice to a purchaser of
the rights of the occupier. Like Russell L.J. in Hodgson
v.
Marks [1971] Ch 892 (pp.934-935), I am by no means certain
that Caunce
v. Caunce was correctly decided.
However, since the present case is concerned
only with registered
land, it is unnecessary to express a final opinion upon the
point.
9
For these reasons I would
dismiss the appeals of the Bank in the wives' cases.
I agree with
my noble and learned friend that Mr. Boland's appeal must, how-
ever,
be dismissed. But his lack of success makes no difference to the
outcome
of the litigation. The Bank fails in each case to obtain
what it seeks, an order
for possession of the matrimonial home,
because the wife is in actual occupation
and has herself a right
of occupation.
Lord Roskill
my lords,
"I think, with respect,
that the answer to both points is that the wives'
"interests
have not been overreached and are not capable of being over-
"reached
because in each case the land was held by a sole trustee who has
no
"overreaching powers . . . ".
B721776/MP Dd 8013619 216 6/80