Mossop v Mossop

FAMILY; Other Family

COURT OF APPEAL, CIVIL DIVISION

FOX, BALCOMBE LJJ AND SIR FREDERICK LAWTON

24 FEBRUARY 1988

Engaged couple – Property – Transfer of property – Jurisdiction of court – Parties living in house
owned by respondent – Engagement called off – Whether applicant entitled to property transfer
order – Law Reform (Miscellaneous Provisions) Act 1970, s 2(1) – Matrimonial Causes Act 1973, s
24(1).

The applicant claimed to have become engaged to the respondent in 1979. From 1979 to 1983 the
parties lived together in a house which was in the sole name of the respondent. The applicant did
not make any contribution towards the purchase price. In 1983 the parties separated and the
applicant issued a summons seeking an order for the transfer of an interest in the house to her or,
alternatively, an order that the house be sold and the proceeds divided between the parties. The
registrar, on the respondent’s application, struck out the summons as disclosing no reasonable cause
of action and on appeal his decision was upheld by the judge. The applicant appealed, contending
that, because s 2(1)a of the Law Reform (Miscellaneous Provisions) Act 1970 provided that where an
agreement to marry was terminated the rules relating to the property rights of husbands and wives
applied to property in which the parties had an interest, she was entitled to a property transfer
order under s 24(1)b of the Matrimonial Causes Act 1973.

________________________________________

a Section 2(1) is set out at p 203 j, post

b Section 24 (1), so far as material, is set out at p 204 c d, post

¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯

Held – It was an express condition precedent to the making of a property transfer order under s 24
of the 1973 Act that there should be a decree of divorce, nullity or judicial separation. Accordingly,
the court had no jurisdiction to make such an order in relation to an unmarried couple who had
called off their engagement. The summons disclosed no reasonable cause of action and had rightly
been struck out. The appeal would therefore be dismissed (see p 205 b to d h and p 206 h, post).

Notes

For property of engaged couples, see 22 Halsbury’s Laws (4th edn) para 903.

For the Law Reform (Miscellaneous Provisions) Act 1970, s 2, see 27 Halsbury’s Statutes (4th edn)
544.

For the Matrimonial Causes Act 1973, s 24, see ibid 726.
Cases referred to in judgments

Bernard v Josephs [1982] 3 All ER 162, [1982] Ch 391, [1982] 2 WLR 1052, CA.

Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 77, [1969] 2 WLR 966, HL.

Interlocutory appeal

The applicant, Gail Mary Mossop, appealed with leave against the order of Ewbank J made on 12
June 1987 whereby he dismissed her appeal against the order of Mr John Merrick sitting as a deputy
district registrar in the Chichester District Registry on 2 October 1985 striking out her originating
summons for the transfer to her of certain property on the ground that it disclosed no reasonable
cause of action against the respondent, Roger Mossop. The facts are set out in the judgment of
Balcombe LJ.

Charles Taylor for the applicant.

Elizabeth Brann for the respondent.

202

24 February 1988. The following judgments were delivered.

BALCOMBE LJ (delivering the first judgment at the invitation of Fox LJ). This is an appeal with the
leave of a single Lord Justice from an order of Ewbank J dated 12 June 1987. That judge upheld the
decision of the deputy district registrar in the Chichester District Registry dated 2 October 1985
whereby he struck out the applicant’s originating summons as disclosing no reasonable cause of
action. For the purposes of this judgment I will assume that the facts as deposed to by the applicant
are true, although it is right to say that a number of important particulars are highly disputed.

The applicant is female, the respondent male. She asserts that in April 1979 they became engaged
to be married; that, I should add, is one of the disputed facts. They lived together from 1979 to
1983. The house in which they lived together was called ‘Killin’, Fletcher’s Close, North Mundham,
Chichester, West Sussex. That house was in the sole name of the respondent. The applicant does
not assert that she provided any part of the purchase price. When they parted the applicant
asserted that the respondent had retained certain chattels belonging to her, a list of which is
contained in a schedule to the originating summons in this case.

The originating summons is dated 14 April 1985 and I should refer to it in some detail. It is headed:

‘IN THE MATTER of the Matrimonial Causes Act 1973(as amended) AND IN THE MATTER of the Law
Reform (Miscellaneous Provisions) Act 1970 AND IN THE MATTER of a question between Gail Mary
Mossop and Roger Mossop concerning the title to or transfer of or possession of property.’

Gail Mary Mossop is the applicant and Roger Mossop is the respondent and the relief for which the
applicant asks by the originating summons is in a series of numbered paragraphs:
‘1. That the Respondent shall be ordered to transfer to the Applicant such part of his interest in the
property at “Killin” Fletcher’s Close, North Mundham, Chichester, West Sussex as may be just.

2. That the property be sold and the net proceeds of sale divided equally between the Applicant and
Respondent or otherwise as may be just … ’

Paragraph 3 refers to the chattels listed in the schedule, and it appears that nothing now remains in
relation to those chattles so that they are not the subject of any live issue between the parties.
Paragraph 4 is an application for costs.

As I said, there was an application by the respondent to strike out the originating summons as
disclosing no reasonable cause of action. Although there would have been a cause of action relating
to a declaration of title as to some of the chattels, that ceased to be a live issue. The deputy district
registrar struck out the summons and his decision was upheld by the judge.

Before I refer to the judgment I should refer first to s 2(1) of the Law Reform (Miscellaneous
Provisions) Act 1970, which is the section on which the applicant relies. I should preface my remarks
about that section by stating that s 1 of that Act abolished the right of action for breach of promise.
It is headed: ‘Engagements to marry not enforceable at law.’ Then s 2, headed ‘Property of engaged
couples’, is in the following terms:

‘(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 had 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.

(2) Where an agreement to marry is terminated, section 17 of the Married Women’s Property Act
1882 and section 7 of the Matrimonial Causes (Property and 203 Maintenance) Act 1958 (which
sections confer power on a judge of the High Court or a county court to settle disputes between
husband and wife about property) shall apply, as if the parties were married, to any dispute
between, or claim by, one of them in relation to property in which either or both had a beneficial
interest while the agreement was in force; but an application made by virtue of this section to the
judge under the said section 17, as originally enacted or as extended by the said section 7, shall be
made within three years of the termination of the agreement.’

Now, put shortly, the submission which counsel has made for the applicant both in this court and, it
would appear, in the court below can be summarised by saying that s 2(1) of the Law Reform
(Miscellaneous Provisions) Act 1970 in effect puts engaged couples on a par in all respects with
married couples in relation to property and includes, in particular, the right now contained in s 24 of
the Matrimonial Causes Act 1973 by which:

‘(1) On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation
or at any time thereafter … the court may make any one or more of the following orders, that is to
say—(a) an order that a party to the marriage shall transfer to the other party … such property as
may be so specified, being property to which the first-mentioned party is entitled, either in
possession or reversion … ’

It is common ground before us that there is no reported decision in which the effect of this section,
ie s 2 of the Law Reform (Miscellaneous Provisions) Act 1970, has been considered by the court. It is
fair, however, to say in defence of counsel’s submission for the applicant that at any rate Griffiths LJ
in this court in Bernard v Josephs [1982] 3 All ER 162 at 169, [1982] Ch 391 at 403 considered that
the case which counsel has put before us might be arguable. He said, after referring to s 2(1) of the
1970 Act:

‘Although Miss Bernard claimed that she was officially engaged to Mr Josephs at the time they
bought the house, she did not rely on this section, and accordingly, although there was some
discussion about the effect of the section, its full scope was not examined and does not fall to be
decided in this case, in particular whether it empowers the court to use all the powers of the
Matrimonial Causes Act 1973 to adjust the rights of property between engaged couples, which it
certainly does not possess in the case of couples living together who have not become engaged to
marry.’

So certainly Griffiths LJ treated the question as at least arguable, and it falls to this court now to
decide whether there is any substance in the submission.

For my part, I should say at once that I am not satisfied that there is any substance in the
submission. Section 2(1) may be difficult to construe in certain respects and certainly its effect may
be somewhat limited. Nevertheless, it seems to me that it has a perfectly sensible meaning. 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 would include amongst others the rule of law that, in the case
of a property transfer to a wife by a husband, there is a presumption of advancement so that no
resulting trust would arise. Other possible applications of the subsection might arise from the rules
considered by the House of Lords in Pettitt v Pettitt [1969] 2 All ER 385 esp at 405, [1970] AC 777 esp
at 813 per Lord Upjohn.

Be that as it may, it seems to me that, certainly in relation to the presumption of advancement and
also to the rule expressly referred to in the subsection explained by s 37 of the Matrimonial
Proceedings and Property Act 1970, which concerns contributions by a spouse in money or money’s
worth for the improvement of property, there is subject matter on which the subsection can bite.
Despite counsel’s submissions to the contrary, for my part I am quite satisfied that s 2(2) of the Law
Reform (Miscellaneous Provisions) 204Act 1970 is purely procedural in its operation and refers only
to the manner in which questions of this kind can be litigated between engaged couples once their
engagement is terminated.

Again, I am prepared to assume in favour of counsel for the applicant, without actually deciding it,
that a rule of law relating to the rights of husbands and wives in relation to property could include
such a rule as is contained in s 24 of the Matrimonial Causes Act 1973, in other words that the right
of a husband or wife in relation to property includes the right to have the court decide as between
them as a matter of discretion whether one should transfer to the other property. But the prefatory
words of s 24 are, as I have already said, ‘On granting a decree of divorce, a decree of nullity of
marriage or a decree of judicial separation’ and the existence of one or other of these decrees
constitutes a condition precedent to the exercise by the court of its discretionary powers contained
in s 24. I am quite unable to accept the submission made by counsel for the applicant (and I quote
from his skeleton argument) that these provisions, namely the existence of the appropriate decrees,
are merely administrative requirements applicable only to divorce. They are no such thing.

So I would decide this case on the very short point that, even though the right of a husband or a wife
to have a transfer of property order made under s 24 of the Matrimonial Causes Act 1973 may be a
right of the kind referred to in s 2(1) of the Law Reform (Miscellaneous Provisions) Act 1970, the
exercise of that right requires and is conditional on there having been a decree of divorce, a decree
of nullity of marriage or a decree of judicial separation. By the very nature of things, that cannot
arise in the case of engaged couples who never have been married and, therefore, whose marriage
cannot be terminated by a decree of divorce or nullity of marriage or, if not terminated, be affected
by a decree of judicial separation.

Counsel for the applicant referred us also to the two Law Commission reports (Family Law: Report
on Financial Provision in Matrimonial Proceedings (Law Com no 25) and Breach of Promise of
Marriage (Law Com no 26)) which preceded and on whose recommendations were enacted both the
Law Reform (Miscellaneous Provisions) Act 1970 and the Matrimonial Proceedings and Property Act
1970, s 4 of which is the precursor of s 24 of the 1973 Act. But I can find nothing in the Law
Commission reports which supports the submission of counsel that the intention both of the Law
Commission in recommending and Parliament in enacting these sections was to equate in relation to
property the position of enagaged couples with that of husband and wife in all respects.

The judge dealt with the matter quite summarily. He said:

‘The Law Reform (Miscellaneous Provisions) Act 1970, s 2 provides that engaged couples would have
the right of husband and wife in relation to property, but that means the right to apply as a husband
and wife have a right to apply; it clearly does not mean, in my judgment, that they have the rights of
divorced husbands and wives under the Matrimonial Causes Act 1973, so there is no jurisdiction to
make a transfer of property order.’
The judge in effect said there what I have attempted to say, probably at far too great a length, but in
my judgment both he and the deputy district registrar were right that this originating summons, so
far as it claims an order for the transfer of an interest in the property ‘Killin’ and a sale of the
property, which is the only live issue, discloses no reasonable cause of action. I would therefore
dismiss this appeal.

SIR FREDERICK LAWTON. If counsel’s submission on behalf of the applicant is right, a new hazard has
been introduced by Parliament into the making and accepting of proposals of marriage because, if
the engagement is terminated, both parties to it put all their property at risk pursuant to s 24(1)(a)
of the Matrimonial Causes Act 1973. In addition, when coming to consider what should happen to
the property which is at risk under s 25 of that Act, amongst a number of matters, most of which are
wholly 205 inappropriate to the relationship between an engaged couple, one matter that the court
would have to take into account under sub-s (1)(b) is the financial needs, obligations and
responsibilities which either or each of the parties to the engagement has or is likely to have in the
foreseeable future. If Parliament had intended anything of the kind to come about, in my judgment,
it would have said so in much clearer terms than s 2(1) of the Law Reform (Miscellaneous Provisions)
Act 1970.

Counsel for the applicant boldly submitted that, unless the court put on his construction of s 2(1) the
meaning for which he contends, s 2(1) would have no purpose whatsoever. That is wrong. Before
the passing of this Act there were frequently, particularly in the county courts, disputes between
those who had been engaged to one another to marry about the ownership of property which had
been bought in contemplation of marriage, sometimes by the man, sometimes by the woman, and
which they had put into each other’s names for various reasons which were convenient to them.
When such actions took place the court was faced with a difficult evidential problem because very
often it was impossible to say what had been intended by either party at the time when the property
was acquired. The convenient procedure of s 17 of the Married Women’s Property Act 1882 was not
available. The parties had to start an action. It seems to me, having regard to the terms of s 2(1),
that what Parliament intended was that after an engagement had terminated the formerly engaged
couple should be in the same position as a husband and wife would have been in had they had a
dispute about the ownership of property. There would then be available a summary procedure; and
Parliament enacted that there should be one by the provisions of s 2(2) of the 1970 Act and that
evidential problems could be overcome by applying the law relating to advancement.

It is pertinent in this respect to invite attention to the passage in Snell’s Principles of Equity (28th
edn, 1982) p 183, which deals with the relevant presumptions:

‘Accordingly, if a man buys property and has it conveyed to his wife (or intended wife, if he later
marries her), prima facie this is a gift to her; a fortiori if he contributes to the mortgage payments on
a property owned or purchased by the wife.’

Then the editors go on further down the same page in these terms:
‘On the other hand, no such presumption arises when a wife buys property and puts it in her
husband’s name; prima facie he holds as trustee for her. Nor does it arise when the purchaser
makes the purchase in the name of a woman with whom he has contracted an illegal marriage, or
with whom he is cohabiting without any marriage at all.’

It is clear from those two passages that an engaged couple, if the engagement is terminated, is in a
worse position than a husband and wife. In my judgment, it was the intention of Parliament to put
them on the same basis as spouses.

I agree with what Balcombe LJ has said and I would dismiss this appeal.

FOX LJ. I also agree with the judgment of Balcombe LJ and would dismiss this appeal accordingly.

Appeal dismissed.

Solicitors: George Ide Phillips, Chichester (for the applicant); Thomas Eggar & Son, Chichester (for
the respondent).

Bernard v Josephs

TRUSTS

COURT OF APPEAL, CIVIL DIVISION

LORD DENNING MR, GRIFFITHS AND KERR LJJ

4, 5, 30 MARCH 1982

Trust and trustee – Constructive trust – Unmarried couple – House acquired by joint efforts for joint
benefit – Principles governing apportionment of beneficial interests – Relevance of principles
governing rights of husband and wife in matrimonial home – House acquired by engaged couple in
joint names – Both going into occupation and letting rooms to meet mortgage instalments – Couple
separating – Man thereafter occupying house alone – Sale of property – Share of proceeds of sale to
which woman entitled – Whether order for sale should be made.

In 1973 the plaintiff and the defendant became engaged and subsequently purchased a house for
their joint occupation. The whole of the purchase price was borrowed on mortgage, for which they
assumed joint liability, and the house was transferred into their joint names, without any express
declaration of trust. They each made an initial contribution to the expenses of the purchase, and the
defendant spent a further sum on improvements to enable part of the premises to be let, the
resulting rents being used for the mortgage payments. Both the plaintiff and the defendant went
out to work and both contributed towards the joint living expenses. In 1976 they separated and the
defendant remained in the house and later married another woman. In February 1978 the plaintiff
commenced proceedings in the Chancery Division seeking an order for sale of the house and a
declaration that she was entitled to a half share of the proceeds. The judge held that, subject to
each party receiving credit for their initial contribution towards the expenses of the purchase and to
the defendant receiving credit for the sum spent on improving the property, they had an equal share
in the proceeds of the house, and, since the purpose for which the house had been acquired was at
an end, the house should be sold with vacant possession. The defendant appealed, contending that
he should have the major share in the equity and that no order for sale should be made. Pending
the hearing of the appeal, the plaintiff indicated that she would not insist on a sale if the defendant
purchased her share.

Held – (1) Where a house had been acquired jointly by an unmarried couple but without 162 any
express declaration of trust and the couple lived in it together as if married, the share of the
beneficial interest in the property to which each was entitled was normally to be ascertained
according to the same principles applicable to a married couple. However (per Griffiths and Kerr
LJJ), the nature of the relationship was an important factor when considering the inference to be
drawn from the way in which the parties had conducted their affairs and it was essential for the
court to be satisfied that the relationship between the parties was intended to involve the same
degree of commitment as a marriage before applying the principles applicable to a married couple
(see p 167 e to g, p 169 f to h, p 170 a b and p 173 h j, post); Cooke v Head [1972] 2 All ER 38 applied.

(2) Accordingly, where there was no express declaration of trust there was no presumption that the
parties would always take equal shares; instead, their respective shares were to be ascertained
according to the circumstances and the parties’ respective contributions to the purchase and the
joint finances of the home, either (per Lord Denning MR and Kerr LJ) by adding up the contributions
in cash, in kind or in services of each party up to the time of the separation and even, where
necessary, having regard to post-separation events, or (per Griffiths LJ) by determining the intention
of the parties at the time of the purchase regarding their respective beneficial interests as evidenced
by their respective contributions both at the time of the purchase and subsequently (see p 166 d e j,
p 169 c d, p 170 e to j, p 171 b c and p 173 e to g, post); dictum of Pearson LJ in Hine v Hine [1962] 3
All ER at 350, Pettitt v Pettitt [1969] 2 All ER 385, Gissing v Gissing [1970] 2 All ER 780, Hazell v Hazell
[1972] 1 All ER 923 and dictum of Lord Denning MR in Cooke v Head [1972] 2 All ER at 41–42
considered.

(3) Since the house had been purchased in the parties’ joint names in order to provide a house for
them, since the mortgage was in joint names and since each had contributed to the purchase price
and they had pooled their incomes, the proper inference to be drawn was that the parties intended
that they should have equal shares in the house subject to receiving credit for their initial
contributions and sums spent on improvements. Furthermore, since the purpose for which the
house had been bought (and for which there was a trust for sale) was at an end, the judge had been
right to make an order for sale. However, since the plaintiff had agreed to let the defendant remain
in the house and purchase her share, the order would be postponed pending the purchase (see p
167 j to p 168 h, p 171 d to p 172 d, p 174 a to h and p 176 g h, post).

Per Lord Denning MR. Cases concerning homes of unmarried couples should be brought in the
Family Division and not in the Chancery Division because they are so similar to those concerning
husband and wife (see p 168 j, post).

Notes
For resulting trusts arising out of joint transactions, see 38 Halsbury’s Laws (3rd edn) 868, para 1462,
and for cases on the subject, see 47 Digest (Repl) 127, 925–927.

For the determination of property rights between husband and wife, see 22 Halsbury’s Laws (4th
edn) para 1030, and for cases on the subject, see 27(1) Digest (Reissue) 305–315, 2267–2330.

Cases referred to in judgments

Ball, Re, Jones v Jones (1930) 74 SJ 298, 47 Digest (Repl) 412, 3692.

Bedson v Bedson [1965] 3 All ER 307, [1965] 2 QB 666, [1965] 3 WLR 891, CA, 27(1) Digest (Reissue)
313, 2316.

Browne (formerly Pritchard) v Prichard [1975] 3 All ER 721, [1975] 1 WLR 1366, CA, Digest (Cont Vol
D) 427, 6962Add.

Cobb v Cobb [1955] 2 All ER 696, [1955] 1 WLR 731, CA, 27(1) Digest (Reissue) 309, 2296.

Cooke v Head [1972] 2 All ER 38, [1972] 1 WLR 518, CA, Digest (Cont Vol D) 1008, 927a.

Cowcher v Cowcher [1972] 1 All ER 943, [1972] 1 WLR 425, Digest (Cont Vol D) 394, 715a.

Crisp v Mullings (1974) 233 EG 511; rvsd (1975) 239 EG 119, CA.

Dennis v McDonald [1981] 2 All ER 632, [1981] 1 WLR 810; affd [1982] 1 All ER 590, [1982] 2 WLR
275, CA.

163

Evers’s Trust, Re, Papps v Evers [1980] 3 All ER 399, [1980] 1 WLR 1327, CA.

Farquharson v Farquharson (1971) 115 SJ 444, CA, 27(1) Digest (Reissue) 312, 2308.

Gissing v Gissing [1970] 2 All ER 780, [1971] AC 886, [1970] 3 WLR 255, HL, 27(1) Digest (Reissue)
311, 2303.

Godwin v Bedwell [1982] CA Bound Transcript 185.

Hall v Hall (1981) Times, 4 April, CA.

Hazell v Hazell [1972] 1 All ER 923, [1972] 1 WLR 301, CA, Digest (Cont Vol D) 398, 2310a.

Hine v Hine [1962] 3 All ER 345, [1962] 1 WLR 1124, CA, 27(1) Digest (Reissue) 313, 2315.

Jones v Challenger [1960] 1 All ER 785, [1961] 1 QB 176, [1960] 2 WLR 695, CA, 47 Digest (Repl) 400,
3595.

Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 777, [1969] 2 WLR 966, HL, 27 Digest (Reissue) 102,
707.

Rawlings v Rawlings [1964] 2 All ER 804, [1964] P 398, [1964] 3 WLR 294, CA, 27(1) Digest (Reissue)
94, 680.
Richards v Dove [1974] 1 All ER 888, Digest (Cont Vol D) 1009, 927b.

Robinson v Robinson (1977) 241 EG 153.

Turner v Morgan (1803) 8 Ves 143, 32 ER 307.

Williams v Williams [1977] 1 All ER 28, [1976] Ch 278, [1976] 3 WLR 494, CA, Digest (Cont Vol E) 255,
662b.

Wilson v Wilson [1963] 2 All ER 447, [1963] 1 WLR 601, CA, 27(1) Digest (Reissue) 93, 676.

Cases also cited

Burgess v Rawnsley [1955] 3 All ER 142, [1975] Ch 429, CA.

Fender v Mildmay [1937] 3 All ER 402, [1938] AC 1, HL.

Appeal

The defendant, Dion Emmanuel Josephs, appealed against the decision of his Honour Judge Mervyn
Davies QC sitting as a judge of the High Court on 17 July 1980, whereby the judge ordered that the
beneficial interest in the property known as 177 Dunstan’s Road, London SE22 was held on equal
shares by the defendant and the plaintiff, Maria Teresa Bernard, that the property be sold with
vacant possession, that the defendant give vacant possession on or before 1 November 1980 and
that the net proceeds of sale after deducting the amounts owing on mortgage and amounts owing to
the parties be divided equally between the parties. The facts are set out in the judgment of Lord
Denning MR.

John Speed for the defendant.

William Panton for the plaintiff.

Cur adv vult

30 March 1982. The following judgments were delivered.

LORD DENNING MR. This is all about a young lady, Maria Teresa Bernard. In August 1973 it was her
21st birthday. On that very day she became engaged to be married. It was to Dion Emmanuel
Josephs. He was 30. Unknown to her he was already a married man, not yet divorced. They
arranged to get a house to set up home together. It was 177 Dunstan’s Road, London SE22. It was
conveyed to them on 21 October 1974 in their joint names. It was a simple transfer by the vendor as
beneficial owner ‘to Dion Emmanuel Josephs and Maria Teresa Bernard’, without more, no
declaration of trust, or anything.

The purchase price was £11,750. The whole of it was raised on mortgage from the Southwark
London Borough Council. They both signed the legal charge to secure it. 164They each paid some
of the incidental expenses. She paid £200 of her own money. He paid £250 and £400 which he
borrowed. They went into occupation and lived there together as man and wife. The house was
quite large. So they let off much of it to tenants. This helped greatly towards the mortgage
instalments. Both went out to work. Their earnings enabled them to pay the rest of the outgoings
and food, and so forth. Then after a year or two they quarrelled. She says that he was violent to
her. So in July 1976 she left. He stayed on in the house. She applied for the house to be sold and
for one-half of the proceeds. Meanwhile in June 1975 he had got a divorce from his lawful wife. In
April 1978 he married another woman. He took her to live with him in the house. They are childless.

The law

In our time the concept of marriage, I am sorry to say, is being eroded. Nowadays many couples live
together as if they were husband and wife, but they are not married. They hope and expect that
their relationship will be permanent. They acquire a house in their joint names. Most of the
purchase price is obtained on mortgage in both their names. They are both responsible for payment
of the instalments. Both go out to work. They pay the outgoings out of their joint resources. One
paying for the food and housekeeping. The other paying the mortgage instalments. And so forth.
Just as husband and wife do. But later on, for some reason or other, they fall out. They go their own
separate ways. One or other leaves the house. The other stays behind in it. There is no need to
divorce. They just separate. What is to happen to the house? Is it to be sold? If so, are the
proceeds to be divided? And, if so, in what proportion? Or is one of them to be allowed to stay in
it? If so, on what terms? If they had been husband and wife, our matrimonial property legislation
would give the Family Division a very wide discretion to deal with all these problems. It is contained
in ss 23 to 25 of the Matrimonial Causes Act 1973. But there is no such legislation for couples like
these.

The legislative provision

The legal position is that they hold the house on trust for sale. Section 36(1) of the Law of Property
Act 1925 says:

‘Where a legal estate … is beneficially limited to or held in trust for any persons as joint tenants, the
same shall be held on trust for sale, in like manner as if the persons beneficially entitled were
tenants in common, but not so as to sever their joint tenancy in equity.’

That is followed by sub-s (2) which says:

‘… under the trust for sale affecting the land the net proceeds of sale, and the net rents and profits
until sale, shall be held upon the trusts which would have been requisite for giving effect to the
beneficial interests if there had been an actual severance.’

But that does not tell what those beneficial interests shall be.

When there is a dispute as to the shares in the house, the parties can apply to the court for a
declaration. After they separate, the appropriate machinery is for one or other to apply to the court
under s 30 of the Law of Property Act 1925. He or she can apply to the court ‘for an order directing
the trustees for sale to give effect thereto, and the court may make such order as it thinks fit’.

What are their shares?

When the house is conveyed into joint names, the question often arises: what are the shares of the
two parties in the house? And at what date are those shares to be ascertained? If the conveyance
contains an express declaration of the shares, that is decisive, as we held recently in Godwin v
Bedwell [1982] CA Bound Transcript 185. But often there is, as here, no such declaration. In such a
case it used to be thought that the shares would always be 165 equal shares. That was the view of
Russell LJ in Bedson v Bedson [1965] 3 All ER 307 at 318, [1965] 2 QB 666 at 689, when he said:

‘If there be two beneficial joint tenants, severance produces a beneficial tenancy in common in two
equal shares … by declaration of the beneficial joint tenancy between A and B, their respective
rights and titles are no less clearly laid down and established than if there had been a declaration of
a beneficial tenancy in common in equal undivided shares.’

Russell LJ had previously said much the same in Wilson v Wilson [1963] 2 All ER 447 at 453, [1963] 1
WLR 601 at 609.

But that view has not prevailed. It is because a conveyance into joint names does not necessarily
mean equal shares. It is often required by the local council or by the building society when they
grant a mortgage, so that they are both responsible for repayment. It is sometimes done on the
suggestion of lawyers, without taking into account all the factors, such as their contributions to the
purchase money and so forth.

As between husband and wife, when the house is in joint names and there is no declaration of trust,
the shares are usually to be ascertained by reference to their respective contributions, just as when
it is in the name of one or other only. The share of each depends on all the circumstances of the
case, taking into account their contributions at the time of acquisition of the house, and, in addition,
their contributions in cash, or in kind, or in services, up to the time of separation. In most cases the
shares should be ascertained as at that time. But there may be some cases where later events can
be considered. The departing party may only be entitled to one-half, one-quarter or even one-fifth,
depending on the contributions made by each and, I would add, all the circumstances of the case.
That was the view of this court in Hine v Hine [1962] 3 All ER 345, [1962] 1 WLR 1124. The facts of
that case show clearly that justice requires that the courts should have a discretion to apportion the
shares, and that there should not be a rigid rule of equal shares. I would adopt, in particular, the
words of Pearson LJ ([1962] 3 All ER 345 at 350, [1962] 1 WLR 1124 at 1132):

‘In my judgment, however, the fact that the husband and wife took the property in joint tenancy
does not necessarily mean that the husband should have a half interest in the proceeds of the sale
now in contemplation. The parties agreed, expressly or by implication from the creation of the joint
tenancy, that the house should be the matrimonial home and should belong to both of them
(technically to each of them in its entirety) and that, on the death of one it would belong to the
other by right of survivorship. They did not, however, make any agreement, or have any common
intention, what should happen in the event of the marriage breaking up and the property then being
sold. That event was outside the contemplation of the parties. The proper division of the proceeds
of sale in that event is left to be decided by the court in this application under s. 17 [of the Married
Women’s Property Act 1882]. The court has to do this by attributing artificially to the parties a
reasonable intention at the time of the transaction in the year 1950, and for this purpose has to take
into account not only the nature and form of the transaction, but also (as stated by ROMER, L.J., in
Cobb v. Cobb ([1955] 2 All ER 696 at 699, [1955] 1 WLR 731 at 735)) “the course of conduct of
husband and wife (including their respective contributions towards the purchase price) at the time
when the home was purchased and subsequently.” In my judgment, the principle, which is shortly
stated in the maxim “equality is equity”, though it affords a just solution in many cases under s. 17,
does not in the present case afford a just solution such as the parties can reasonably be taken to
have intended.’ (My emphasis.)

In that passage Pearson LJ refers to husband and wife, but his reasoning applies also to persons
living together, as if husband and wife. We applied it in such a case. In Cooke v Head [1972] 2 All ER
38, [1972] 1 WLR 518 the house was in the man’s name only, but the woman made such substantial
contributions that she was awarded a one-third share. I said ([1972] 2 All ER 38 at 41–42, [1972] 1
WLR 518 at 520–521):

166

‘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 may
be to other relationships too … In the light of recent developments, I do not think it is right to
approach this case by looking at the money contributions of each and dividing up the beneficial
interest according to those contributions. The matter should be looked at more broadly, just as we
do in husband and wife cases. We look to see what the equity is worth at the time when the parties
separate. We assess the shares as at that time. If the property has been sold, we look at the
amount which it has realised, and say how it is to be divided between them. Lord Diplock in Gissing
v Gissing [1970] 2 All ER 780 at 793, [1971] AC 886 at 909 intimated that it is quite legitimate to infer
that “the wife should be entitled to a share which was not to be quantified immediately on the
acquisition of the home but should be left to be determined when the mortgage was repaid or the
property disposed of.” Likewise with a mistress.’

That view was confirmed by this court recently in Hall v Hall (1981) Times, 4 April. A man and
woman lived together for seven years without being married. The house was in the man’s name
alone. They separated. The woman left. The court ascertained the shares at the date of separation
and held that her share was one-fifth. I notice that in that case we referred to cases between
husband and wife, and said that the shares are ascertained at the date of divorce. But I do not think
that is correct. Their shares should normally be ascertained at the time of separation; not at the
date when they acquired the house, but at the date of separation: see Hazell v Hazell [1972] 1 All ER
923, [1972] 1 WLR 301. That is the proper date, for only then can the respective contributions be
fairly assessed. But later events can be taken into account. And, of course, under the matrimonial
legislation, the Family Division can afterwards vary those shares by appropriate transfers.

In my opinion in ascertaining the respective shares, the courts should normally apply the same
considerations to couples living together (as if married) as they do to couples who are truly married.
The shares may be half and half, or any such other proportion as in the circumstances of the case
appears to be fair and just.

Engaged couples

As it happened Parliament had in 1970 passed an Act which put engaged couples on the same
footing as husband and wife: see s 2 of the Law Reform (Miscellaneous Provisions) Act 1970. Our
decision in Cooke v Head does the same for couples living together as if they were husband and wife,
even though they have not made any agreement to marry. This is very desirable. There is no good
reason for making any difference between the two kinds of case. Especially when their relationship
of ‘engaged’ or ‘not engaged’ to be married is so often undetermined and indeterminable.

Should there be an order for sale?

When the parties separate, each wants to know what is to be done with the house. One or other
then makes an application under s 30 of the Law of Property Act 1925. Under it the court has ample
power to postpone a sale. I stated the modern approach in Williams v Williams [1977] 1 All ER 28 at
30, [1976] Ch 278 at 285:

‘When judges are dealing with the matrimonial home, they nowadays have great regard to the fact
that the house is bought as a home in which the family is to be brought up. It is not treated as
property to be sold, nor as an investment to be realised for cash. That was emphasised by this court
in the recent case of Browne v Pritchard [1975] 3 All ER 721, [1975] 1 WLR 1366. The court, in
executing the trust, should regard the primary object as being to provide a home and not a sale.
Steps should be taken to preserve it as a home for the remaining partner and children, but giving the
outgoing partner such compensation, by way of a charge or being bought out, as is reasonable in the
circumstances.’

167

The same approach should be adopted to cases where a man and woman are living together but not
married: see Re Evers’s Trust, Papps v Evers [1980] 3 All ER 399, [1980] 1 WLR 1327. Also when, as
here, there are no children. The court can refuse to order a sale at the instance of the outgoing
party, even after they separate, if it would be unduly harsh to require the remaining party to vacate,
or it can make an order for sale but suspending it on terms.

Turning into money

After ascertaining the shares, the next problem arises when it is to be turned into money. Usually
one of the parties stays in the house, paying the mortgage instalments and the rates and other
outgoings. The house also increases in value greatly owing to inflation. None of that alters the
shares of the parties in the house itself. But it does mean that when the house is sold, or the one
buys the other out, there have to be many adjustments made. The value of the house itself is taken
at the value at the time of sale or buying out. There must be deducted from it all the money needed
to redeem the mortgage. Then the one in possession must be given credit for paying the other’s
share of the mortgage instalments and be debited with an occupation rent for using the other’s
share of the house. Other adjustments may be needed for other outgoings. Then the net amount
must be divided according to the shares.

Applied to this case

The judge assessed the shares in the house as half and half. He took it at the date of acquisition.
But I think on the facts it would be the same (half and half) at the date of separation. Mr Josephs
and his present wife have been in the house for over three years now. Miss Bernard has not been in
it for five years. It would be unduly harsh to turn Mr Josephs and his wife out of this house, simply in
order to provide funds for Miss Bernard. But, seeing that he has the use of her share, it would only
be fair that he should pay an occupation rent in respect of it: see Dennis v McDonald [1981] 2 All ER
632, [1981] 1 WLR 810; [1982] 1 All ER 590, [1982] 2 WLR 275. No doubt, however, he has been
paying the whole of the mortgage instalments and this should be taken into account as well. It may
relieve him of paying any occupation rent for her half share.

The problem is to calculate the sum which Mr Josephs should pay to Miss Bernard to buy her out.
This is to be done by taking the price obtainable for the house if it were sold now with vacant
possession. Then deduct the sum payable to redeem the mortgage. Then deduct one-half of the
amount paid by Mr Josephs since the separation for mortgage instalments (deducting, of course, the
amount received from the tenants). He should only get credit for one-half, because he has had the
benefit of her half share. Then make any other special adjustments.

It is undesirable to spend money on inquiries. On the information given to us, we calculate that the
sum payable by Mr Josephs to Miss Bernard is £6,000. An order for sale should be made, but not to
be enforced if Mr Josephs pays £6,000 to Miss Bernard within four months. On his paying her that
sum, she should transfer all her share in the house to him.

We are told that both sides are legally aided. It looks as if the Law Society will have a charge on Miss
Bernard’s £6,000 for their costs on her behalf, and a charge on the house for their costs on Mr
Josephs’s behalf. The allowance of £2,500 is made only to married persons, not to unmarried ones.
Each charge will reduce the amounts considerably. But this case will, we hope, be a precedent for
others of like nature, so that they can be settled by agreement without recourse to the courts.
One last word: these cases about the home of couples living together are so similar to those of
husband and wife that I think they should be started in the Family Division or transferred to it, rather
than the Chancery Division.

GRIFFITHS LJ. This appeal presents a problem with which the courts are becoming very familiar.
Today more and more people live together without getting married. They 168 acquire a house in
their joint names, and then, when their relationship breaks down and they part, they cannot agree
who owns the house so they turn to the courts to solve the question of ownership. In my view the
legal principles by which the court must solve the problem are now well settled and are to be found
in two decisions of the House of Lords: Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 777 and Gissing
v Gissing [1970] 2 All ER 780, [1971] AC 886.

Before Parliament enacted the Matrominal Causes Act 1973, which now gives the court a wide
discretion to adjust rights of property on the breakdown of a marriage, the question of the
ownership of the matrimonial home was generally settled on an application to the court under s 17
of the Married Women’s Property Act 1882. In the case of an unmarried couple the appropriate
machinery is to make an application under s 30 of the Law of Property Act 1925, as was done in this
case. Both sections are essentially procedural: neither gives the judge a wide discretion to decide
the question of ownership of the house in accordance with his idea what would be ‘fair’ in all the
circumstances. The respective interests of the parties must be determined by the application of the
law relating to trusts. This is, of course, far easier to say than to do.

The task of the judge is to look at all the evidence placed before him and decide whether it indicates
an intention by the parties that the beneficial ownership of the house should be held in other than
equal shares. It is only in the somewhat unlikely event that nothing in the evidence provides a
pointer to the intention of the parties that the judge should decide the case on the basis that the
equitable title follows the legal title or to use another maxim that equality is equity.

In Pettitt v Pettitt [1969] 2 All ER 385 at 406, [1970] AC 777 at 813–814 Lord Upjohn said:

‘… in the absence of all other evidence, if the property is conveyed into the name of one spouse at
law that will operate to convey also the beneficial interest and if conveyed to the spouses jointly that
operates to convey the beneficial interest to the spouses jointly, i.e., with benefit of survivorship,
but it is seldom that this will be determinative.’

See also Crisp v Mullings (1975) EG 119.

The cases that have been decided in the last 30 years provided valuable pointers to the matters that
the courts should or should not take into consideration when assessing the proportions in which the
beneficial interest in the house should be divided. But here I would like to sound a note of caution.
Most of the decided cases have been dealing with married people. The legal principles to be applied
are the same whether the dispute is between married or unmarried couples, but the nature of the
relationship between the parties is a very important factor when considering what inferences should
be drawn from the way they have conducted their affairs. There are many reasons why a man and a
woman may decide to live together without marrying, and one of them is that each values his
independence and does not wish to make the commitment of marriage; in such a case it will be
misleading to make the same assumptions and to draw the same inferences from their behaviour as
in the case of a married couple. The judge must look most carefully at the nature of the relationship,
and only if satisfied that it was intended to involve the same degree of commitment as marriage will
it be legitimate to regard them as no different from a married couple. Parliament itself has
recognised this and has made specific provision for it by providing in s 2 of the Law Reform
(Miscellaneous Provision) Act 1970 that in the case of engaged couples where the 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 … shall apply … ’

Although Miss Bernard claimed that she was officially engaged to Mr Josephs at the time they
bought the house, she did not rely on this section, and accordingly, although there was some
discussion about the effect of the section, its full scope was not examined and does not fall to be
decided in this case, in particular whether it empowers the court to use all the powers of the
Matrimonial Causes Act 1973 to adjust the rights of property 169 between engaged couples, which it
certainly does not possess in the case of couples living together who have not become engaged to
marry. There will of course be many cases of couples living together with every intention that the
relationship should be permanent and with the same degree of commitment as marriage; they may
be unable to marry because one or other cannot obtain a divorce, and in such cases it may be
legitimate to regard them in the same way as a married couple. Each case will depend on its own
facts, and I only warn against a blithe assumption that all couples living together are to be regarded
as no different from a married couple.

The starting point of an inquiry into the beneficial ownership of a house in joint names must be the
conveyance. If the conveyance deals with the beneficial ownership and defines the shares, it is
conclusive: see Pettitt v Pettitt [1969] 2 All ER 385 at 405, [1970] AC 777 at 813, where Lord Upjohn
said:

‘If the property in question is land there must be some lease or conveyance which shows how it was
acquired. If that document declares not merely in whom the legal title is to vest but in whom the
beneficial title is to vest that necessarily concludes the question of title as between the spouses for
all time, and in the absence of fraud or mistake at the time of the transaction the parties cannot go
behind it at any time thereafter even on death or the break-up of the marriage.’

I wish more heed had been paid to the advice to solicitors given by Bagnall J in Cowcher v Cowcher
[1972] 1 All ER 943, [1972] 1 WLR 425, in which he pointed out the wisdom of making an express
declaration of the beneficial interests in the property at the time it is bought. The home is usually
the most valuable asset of any couple living together and if, when they separate, a legal battle is
waged with the aid of legal aid over the ownership of their shares in the house the result is that both
of them see a large part of their share of the equity disappear in costs into the maw of the legal aid
fund, as indeed will happen in this case.
In the absence of any express declaration as to the beneficial interest, the judge must look to see the
respective contributions made towards the purchase price. In the unlikely event that the house was
bought without a mortgage, their respective contributions to the purchase price will determine their
share in the equity.

If the house has been bought on a mortgage, the inquiry is more difficult. The fact that one party
paid the mortgage may indicate that it was recognised by the couple that that party was solely
responsible for providing the purchase price and therefore to be regarded as the sole beneficial
owner. But often, where a couple are living together and both are working and pooling their
resources, which one of them pays the mortgage may be no more than a matter of internal
accounting between them. In such a case the judge must look at the contributions of each to the
‘family’ finances and determine as best he may what contribution each was making towards the
purchase of the house. This is not to be carried out as a strictly mathematical exercise; for instance,
if the man was ill for a time and out of work so that the woman temporarily contributed more, that
temporary state of affairs should not increase her share, nor should her share be decreased if she
was temporarily unable to work whilst having a baby. The contributions must be viewed broadly by
the judge to guide him to the parties’ unexpressed and probably unconsidered intentions as to the
beneficial ownership of the house. There is of course an air of unreality about the whole exercise,
but the judge must do his best and only as a last resort abandon the attempt in favour of applying
the presumption of equality, which may so often give an unfair result.

It emerges clearly from the speeches in Pettitt v Pettitt and Gissing v Gissing that it is the intention as
to the beneficial ownership at the time the house is bought that is crucial, and the contributions
made by the parties to the acquisition are examined to establish that intention: see Pettitt v Pettitt
[1969] 2 All ER 385 at 394, 400, 408, [1970] AC 777 at 800, 807, 816 per Lord Morris, Lord Hodson
and Lord Upjohn; and see also Gissing v Gissing [1970] 2 All ER 780 at 783, 786, 787, [1971] AC 886 at
898, 900, 902 per Lord Morris, Viscount Dilhorne and Lord Pearson.

170

It might in exceptional circumstances be inferred that the parties agreed to alter their beneficial
interests after the house was bought; an example would be if the man bought the house in the first
place and the woman years later used a legacy to build an extra floor to make more room for the
children. In such circumstances the obvious inference would be that the parties agreed that the
woman should acquire a share in the greatly increased value of the house produced by her money.
But this depends on the court being able to infer an intention to alter the share in which the
beneficial interest was previously held; the mere fact that one party has spent time and money on
improving the property will not normally be sufficient to draw such an inference: see Pettitt v Pettitt.
In the absence of any special circumstances I agree with the judge in this case that the time at which
the beneficial interest crystallises is the time of the acquisition, but to ascertain this he must look at
all the evidence including all the contributions made by the parties. As a general rule the only
relevant contributions will be those up to the date of the separation, but it does not necessarily
follow that what happens after the separation will in every case be irrelevant. In my opinion the
judge should examine all the evidence placed before him and not regard the date of separation as a
cut-off point. The task imposed on the judge is so difficult that every scrap of evidence may be of
value, and should be available to him.
On the facts of this case I have no doubt that the judge was right to hold that the beneficial
ownership was held in equal shares. The house was bought to provide a home for the couple and
they lived in it together; it was bought in joint names, the mortgage was in joint names; the
intention was to pay the mortgage by taking in tenants and using their rent; they pooled their joint
income; the girl worked all the time, but the man was for a period unemployed. They both
contributed small sums to the expenses involved in the purchase: she provided £200 of her own
money; he £650, £400 of which he borrowed.

When they parted she left the house and he continued living there and is still living in the house. He
married another woman in 1978 and the mortgage repayments are up to date. It appears that the
rent of tenants has continued to contribute to the cost of the mortgage.

The judge concluded that the evidence showed that this couple must be regarded as providing the
purchase money in equal shares and that accordingly the beneficial ownership of the house must be
declared to be held in equal shares, and I agree with him.

The fact that Mr Josephs paid the mortgage after Miss Bernard left the house was in this case clearly
done for his own convenience and provides no clue to their intentions at the time they bought the
house. I agree that in this case none of the evidence of the behaviour of the parties after the
separation throws any light on the question of the beneficial ownership of the house.

Now comes the problem as to the form of order that a judge has power to make on an application
under s 30 of the Law of Property Act 1925. This was recently considered by the Court of Appeal in
Re Evers’s Trust, Papps v Evers [1980] 3 All ER 399, [1980] 1 WLR 1327.

The court should look at the purpose for which the house was bought in joint names and which
resulted in its being held on trust for sale. If the purpose of that trust is exhausted, then the court
should make an order directing the sale of the house. This house was bought to provide a home in
which Miss Bernard and Mr Josephs could live together. Now that they have separated, the purpose
of the trust is exhausted, and if Miss Bernard insisted on sale I can see no legitimate ground on
which the court could refuse to make an order for sale, although it could of course postpone sale for
a few months to give Mr Josephs a reasonable chance to make other arrangements for his
accommodation. I can see no ground for criticising the judge’s order that Mr Josephs should have
four months to vacate the property and that there should then be a sale with vacant possession.

When the proceeds of sale are realised there will have to be equitable accounting between the
parties before the money is distributed. If the woman has left, she is entitled to receive an
occupation rent, but if the man has kept up all the mortgage repayments, 171he is entitled to credit
for her share of the payments; if he has spent money on recent redecoration which results in a much
better sale price, he should have credit for that, not as an altered share, but by repayment of the
whole or a part of the money he has spent. These are but examples of the way in which the balance
is to be struck. The judge did it in this case; I see nothing wrong in his approach.

Now, it would be a great hardship on Mr and Mrs Josephs if they were to be forced to leave their
home to enable it to be sold with vacant possession. Miss Bernard does not wish this misery to be
inflicted on them, but she does want a fair sum of money for her share in the value of the house.
There is agreement as to the present market value of the house and this court has all the material
available to calculate the sum that would represent the present value of her equity in the house
after taking into account the equitable accounting to which I have referred. This being so, and
because Miss Bernard through her counsel sensibly and compassionately agrees to this course, I
accordingly agree with the orders proposed by Lord Denning MR, which will give Mr Josephs the
chance to buy Miss Bernard’s share for £6,000; but, if he does not pay the money within four
months, the house must then be sold with vacant possession and the proceeds distributed as
directed by the judge.

KERR LJ. The facts of this case have already been stated in the judgment of Lord Denning MR, but I
think that it is necessary to mention some of them in detail, as well as the way in which these were
dealt with in the decision of his Honour Judge Mervyn Davies QC, in order to illustrate the problems
raised by this appeal.

As frequently happens, the parties decided to buy a house for their joint occupation with the
possibility of ultimate marriage in mind, but with no clear agreement or common fixed intention
concerning their future. Accordingly, the machinery of adjustment under s 2 of the Law Reform
(Miscellaneous Provisions) Act 1970 is unavailable. The house was conveyed to the parties in 1974
under a council transfer as joint owners without any express declaration of trust, and they assumed
joint liability under a council mortgage for 100% of the purchase price of £11,750. The plaintiff, Miss
Bernard, then contributed £200, and the defendant, Mr Josephs, £650 to the costs incidental to the
purchase, the mortgage and the expenses of moving in. Mr Josephs thereafter spent £2,000 on
decorations and repairs to enable part of the premises to be let, and the resulting rents were used
for the mortgage payments, which were made by him throughout. These were their respective
contributions to the acquisition of the property and to its improvement during their cohabitation.
They also both contributed to their living expenses during this period. Miss Bernard paid for their
food and household necessities, and Mr Josephs paid the electricity and other bills. I only mention
the latter contributions in passing, since the judge rightly took no account of these domestic
arrangements, which might apply equally to any people living together in, for instance, rented
accommodation, and which throw no light on what should be their shares in the property in which
they live. This relationship continued for about 18 months until Miss Bernard left against her will,
following a serious disagreement in which Mr Josephs appears to have behaved with violence
towards her. She was accordingly in the position of having been ousted from the jointly owned
property, similarly to the facts in Dennis v McDonald [1981] 2 All ER 632, [1981] 1 WLR 810; [1982] 1
All ER 590, [1982] 2 WLR 275, to which I refer further hereafter. Mr Josephs continued to live in the
property and, for some time at any rate, to rent out parts of it. He fell into arrears with the
mortgage, but successfully resisted a claim for possession by the council by bringing the mortgage
payments up to date, as they evidently now are. I will return to the resulting figures in a moment in
the context of the judgment given below.

In February 1978 Miss Bernard then issued proceedings in the Chancery Division by originating
summons under ss 30 and 203(5) of the Law of Property Act 1925 and s 57 of the Trustee Act 1925
for an order for sale and a declaration that she was entitled to a half share of the proceeds after
deduction of the outstanding mortgage. In this connection 172 it was common ground before us
that the balance of the equity value of the house, in view of the rise in property prices since 1974,
would now be about £15,000. Shortly after the proceedings began Mr Josephs remarried, having
meanwhile obtained his divorce from a former marriage, and he and his wife are now still living in
the house. No children are involved as the result of either relationship.

Although the action had been commenced by originating summons followed by (conflicting)
affidavits on both sides, it was ordered (pursuant to RSC Ord 28, r 8) that the proceedings be
continued as if they had been commenced by writ. Pleadings were served and there was an oral
hearing in which all the circumstances were inquired into. Accordingly, I turn to the judge’s decision
from which Mr Josephs now appeals on two main grounds, viz that (i) he should have been awarded
the major share of the equity and (ii) no order for sale should have been made.

First, in the light of the circumstances concerning the acquisition of the property, the judge
concluded on the evidence that he would not be justified in imputing to the parties any common
intention as to their then respective ownership rights, but that, having regard to the facts that the
property was conveyed to them jointly and that both assumed joint liability under the mortgage, the
house belonged to the parties in equal shares. He accordingly made a declaration to this effect.

Pausing at this point, although it was strongly contended on behalf of Mr Josephs that this was an
inequitable result, I have no doubt, in agreement with the judgments which have already been
delivered, that no other conclusion could possibly have been reached in the circumstances. But I
would add two comments, although for the reasons mentioned hereafter neither affects the
outcome of this appeal.

First, if the parties’ contributions towards the acquisition of the house had been substantially
unequal, then this would no doubt have been reflected in their respective shares in equity, since the
absence of any express declaration of trust as to their respective shares would permit this result.
The judge clearly accepted this in principle, as did the parties on the appeal to this court.

Second, while I agree that the parties’ contributions on acquisition necessarily provide the starting
point for the declaration as to what their respective shares should be, I also respectfully agree with
Lord Denning MR that on the authorities as they now stand the court should consider the ultimate
position concerning the parties’ rights in the property by reference to the time of separation, when
one of the parties moves out and the common purpose of the implied trust thereby generally, but
not always, comes to an end; and further that, for the purposes of equitable accounting, it is also
permissible to have regard to the events concerning the property which have occurred thereafter.
In my view these principles clearly follow from a number of decisions, most of them in this court, in
which Gissing v Gissing [1970] 2 All ER 780, [1971] AC 886, following on Pettitt v Pettitt [1969] 2 All
ER 385, [1970] AC 777, has been considered. In relation to married couples these are in particular
Farquharson v Farquharson (1871) 115 SJ 444, Hazell v Hazell [1972] 1 All ER 923, [1972] 1 WLR 301
and Williams v Williams [1977] 1 All ER 28, [1976] Ch 278. In relation to unmarried couples the main
decisions are Cooke v Head [1972] 2 All ER 38, [1972] 1 WLR 518, Richards v Dove [1974] 1 All ER 888
at 894, Crisp v Mullings (1974) 233 EG 511, reversed on the facts (1975) 239 EG 119, CA, Robinson v
Robinson (1977) 241 EG 153, Re Evers’s Trust [1980] 3 All ER 399, [1980] 1 WLR 1327 and Hall v Hall
(1981) Times, 4 April.

It follows, in my view, that in principle there should be no difference, as between married and
unmarried persons, in seeking to ascertain their common intention (if any) as to their respective
rights to the property in which they live, and that in both cases it is appropriate for this purpose to
have regard to their respective contributions up to the time of separation, and perhaps thereafter,
and not merely as at the time of acquisition. However, in agreement with Griffiths LJ, I also consider
that cohabitation in marriage, in contrast to a less permanently intended relationship, may of course
have an important bearing on the ascertainment of their common intention and on the
determination of an appropriate apportionment of their respective rights to the property in which
they live.

173

I then return to the judgment given in this case. Although the judge concentrated primarily on the
rights of the parties as derived from their position as at the time of acquisition, he did not in fact
disregard the subsequent events, and in my view it would have been wrong had he done so. Thus,
although the parties clearly started on a fifty-fifty basis in their acqusition of the property, subject to
the small disparity in their respective contributions at that time, the judge rightly also took account
of their contributions to the property up to the time of their separation. In this regard it was
irrelevant that Mr Josephs made the mortgage payments, since these were financed out of the rents
received for their joint benefit. However, the judge rightly gave credit to Mr Josephs for the £2,000
which he spent on improvements. In respect of the period of cohabitation up to separation, he
accordingly gave credit to Miss Bernard for her initial contribution of £200, and to Mr Josephs for his
initial contribution of £650 plus the subsequent expenditure on the property of £2,000. However,
notwithstanding this relatively small disparity in their respective contributions, he concluded, in
effect, that, subject to giving the appropriate credit to each of the parties, their basic share in the
equity remained equal. In my view he was clearly correct in this conclusion, both as at the time of
acquisition and as at the time of separation. It follows that Mr Josephs’s appeal on the first ground
must fail.

Next, it is necessary to mention what the judge decided in relation to the events subsequent to the
separation. Again, he rightly did not disregard these. Miss Bernard had been ousted from the house
against her will, but Mr Josephs continued to make the mortgage payments for which both of them
remained liable. On the other hand, Mr Josephs also continued to receive some rents from letting
part of the premises. His mortgage payments between the date of separation and the trial were
£4,743 and the amount received by way of rent was £2,080, leaving a balance of £2,663 which Mr
Josephs paid out of his own pocket during this period. The judge accordingly gave further credit to
Mr Josephs for £1,331·50, one-half of this balance, by way of a further adjustment to the parties’
equal shares. In my view this was again clearly correct. By allowing only half of this balance to Mr
Josephs, the judge in effect made him pay an ‘occupation rent’: cf Dennis v McDonald. Conversely,
and in my view equally correctly, by holding that Miss Bernard must give credit for half, but only half,
of this balance, the judge treated her as being still entitled to an equal share in the property, but also
liable to contribute equally towards the expenses referable to it.

None of these adjustments as such were challenged on the appeal to this court, but it was faintly
argued on behalf of Mr Josephs that his post-separation expenditure could also be taken into
account in determining what should be the parties’ basic equitable shares in the property. In my
judgment this is untenable in the present case; since everything which occurred after the separation
took place against Miss Bernard’s will, the subsequent events could not possibly have any bearing on
their common intention as to what should be their respective rights in the property; in the present
case any common intention in this regard clearly came to an end with their separation.

There then remains the important question concerning the order for sale which was made by the
judge. This was the second ground of appeal by Mr Josephs and it raises the second issue of
principle. Again it is important to note what happened, both below and in this court. The judge
said:

‘The plaintiff asks for an order for sale. The purpose for which the house was bought in co-
ownership is at an end and I see no special reason why the defendant should continue to enjoy the
house to the exclusion of the plaintiff. There was no offer made of any rent or periodic payment or
other compensation for the defendant’s sole occupation. Accordingly, I will order that the property
be sold with vacant possession. The defendant is to vacate the property within four months so that
vacant possession may be given by 1 November next.’

Pausing there, I agree that the purpose for which the house was bought in co-ownership came to an
end when Miss Bernard moved out. She could obviously never 174 have intended that it should
continue to provide a home of Mr Josephs with his new wife. Nor could it be said ever to have been
their common intention that, if their relationship should break down and one of them should move
out, let alone unwillingly, the house should remain available as a home of the other. Accordingly,
decisions such as Re Evers’s Trust have no application, and s 30 of the Law of Property Act 1925 must
inevitably come into operation.

In order to follow what happened on the appeal to this court, it is necessary to see how s 30 would
have operated under the order made by the judge. The house would have been sold and, before
dividing the net proceeds of sale into equal shares, Miss Bernard would have had to give credit for
£3,781·50 against her share. This sum is arrived at as already explained. Up to the time of the
separation, Mr Josephs was given credit for £2,450, ie the £650 which he provided at the time of
acquisition, plus the £2,000 which he spent on improvements, less the £200 which Miss Bernard
provided at the time of acquisition. Then, for the period after Miss Bernard had moved out, Mr
Josephs was given credit for half the mortgage payments made by him less half the rents received, ie
£1,331·50, making a total credit of £3,781·50, or, say, £3,800, in favour of Mr Josephs.

In my view this result would have been wholly correct in applying s 30 and ordering a sale. However,
a sale pursuant to s 30 may well entail consequences which neither party really wants, if some other
solution can be found. A forced sale at short notice may fail to realise the best price obtainable for
both parties in the long term, and it will inevitably involve immediate expense. Moreover, and
above all, in these times of housing shortage, a sale has the disadvantage that the property ceases to
be available as a home for either of the parties. This is likely to inflict hardship on the occupant and
may also not be desired by the non-occupant if some other equitable financial adjustment can be
made. On the present appeal, all these undesired consequences of a sale in fact ultimately became
common ground between the parties. However, before turning to what happened, I think that it is
necessary to consider the position in principle as to the extent to which an application under s 30
may allow some latitude to the court.

As to this, I think it is clear that the concluding words of s 30, ‘and the court may make such order as
it thinks fit’, confer no powers on the court unless an order for sale is in fact made. This was the
view expressed by Purchas J in Dennis v McDonald [1981] 2 All ER 632 at 640, [1981] 1 WLR 810 at
819–820, and nothing to the contrary was said in this court, when an appeal against his award of an
‘occupation rent’ was dismissed. He said:

‘I now turn to consider s 30 of the Law of Property Act 1925. Counsel for the plaintiff submitted that
I can make appropriate orders by virtue of the provision in s 30. After considering the wording of
this section I have come to the conclusion that it does not confer any power on the court to this
effect. As was said in argument, the section was really passed for conveyancing purposes to help
deal with the flood of equitable tenants in common holding under trusts for sale which resulted
from the passing into law of the Law of Property Act 1925. I do not think that this section enables
the court to make orders where an order for sale is not made. Only orders ancillary to an order for
sale which are necessary to implement the sale are envisaged by the words of the section. The
words are “and the court may make such order as it thinks fit” and not “or the court may make such
other orders” etc. As is explained in Megarry and Wade’s Law of Real Property (4th edn, 1975, p
427) s 30 of the Law of Property Act 1925 is the successor to the old Partition Acts and in particular
the power of sale granted under the Partition Act 1868. In Turner v Morgan (1803) 8 Ves 143 at 145,
32 ER 307 at 308 Lord Eldon LC held the threat of making a partition order over the parties in order
to bring them to terms. Although s 30 does not grant a power to the court to order the payment of
an occupation rent it certainly could be used in a manner similar to that adopted by Lord Eldon LC,
by means of indicating that unless an undertaking to pay an occupation rent was forthcoming from
the defendant then the order for sale would be made.’

This passage also demonstrates that the threat of making an order for sale under s 30 175can be
used against the occupant in order to seek to compel him to make an equitable financial adjustment
in favour of the party who is out of occupation if the latter does not insist on a sale. However, could
the threat of refusing to make an order for sale, or postponing a sale indefinitely, also be used
against the non-occupant, unless he agrees, in effect, to allow his interest in the property to be
bought out on reasonable terms? As at present advised, I am driven to the conclusion that this
would not be possible. Once the purpose of the trust has come to an end, it seems clear that a sale
can be insisted on by any of the beneficiaries unless the court considers that it is inequitable for him
to want to realise his investment: see the decisions of the majority of this court in Jones v
Challenger [1960] 1 All ER 785, [1961] 1 QB 176 and Rawlings v Rawlings [1964] 2 All ER 804, [1964] P
398 (albeit under s 17 of the Married Women’s Property Act 1882), and Bedson v Bedson [1965] 3 All
ER 307 at 312, [1965] 2 QB 666 at 678 per Lord Denning MR. The fact that these were cases
between married couples does not appear to me to make any difference; on the contrary, when
property is bought otherwise than as a matrimonial or family home, it seems to me even more
difficult to find grounds for refusing an order for sale. It is also interesting to note that in Turner v
Morgan 8 Ves 143 at 145, 32 ER 307 at 308, the case cited by Purchas J, Lord Eldon LC ended his
judgment by saying:

‘Out of mercy to the parties I will let it [an order for sale] stand over: but I have no doubt what is to
be done, if they will have a decree.’

Finally in this connection the decision of Luxmore J in Re Ball, Jones v Jones (1930) 74 SJ 298 must
also be borne in mind, that the power to postpone a sale under s 25 of the Law of Property Act 1925
cannot prevail when the right to insist on a sale under s 30 has arisen.

However, ultimately these issues did not arise for decision on the present appeal; we heard no full
argument on them; and I only venture into this territory with diffidence. The reason why this issue
did not arise was that, with the assistance of the court, the parties effectively came to terms to a
large extent, and it is to be hoped that the same result may follow in other cases. Miss Bernard very
sensibly decided not to insist on a sale, in consideration of being bought out; but there was some
argument about the terms. As already mentioned, the equity value of the house was about £15,000
after allowing for the mortgage. On the basis of the financial adjustment made by the judge, Miss
Bernard would accordingly have got about £5,600, taking round figures, viz £15,000 less £3,800
equalling £11,200, of which one-half is £5,600. We were told that Mr Josephs had previously offered
£5,000, and before us his counsel raised this offer to £5,500. In effect the parties left it to us to
determine what would be a fair sum for Mr Josephs to pay, also having regard to the passage of time
since the proceedings began. We indicated that in our view £5,000 would produce an equitable
result, and Mr Josephs’s counsel did not object to this sum if this would avoid the necessity of an
order for the sale of the house in any event. We accordingly arrived at the order mentioned by Lord
Denning MR on the basis that both parties should regard this as a reasonably satisfactory outcome in
all the circumstances. It is to be hoped that this approach may provide an acceptable basis for the
resolution of similar cases in the future.

Accordingly, I would dismiss this appeal subject to the substitution of the order mentioned above,
not as a matter of law but in view of the course which was taken by both parties on the appeal to
this court.

Appeal dismissed.

Solicitors: Simpson Millar (for the plaintiff); Moss Beachley (for the defendant).

Diana Procter Barrister.

176

[1982] 3 All ER 177