NEUTRAL CITATION NO. [2003] EWHC 1538 (Ch)
IN THE SUPREME COURT OF JUDICATURE
CHANCERY DIVISION
27th June 2003
Before:
Between:
Claimant
-and-
Defendant
The claimant appeared in person.
Helene Pines Richman (instructed by Hatten Wyatt) for the defendant.
1. The claimant, Josephine Buggs, and the defendant, David Maurice Buggs, married on 2 August 1980. They were then aged 21 and 23 respectively. They have three children: Andrew, born on 11 October 1982, Mark, born on 17 February 1986, and Hayley, born on 28 November 1987. The marriage was ended by a decree of divorce made absolute on 22 July 1997. In the divorce proceedings there was an ancillary relief claim. There was deep distrust, and no little acrimony, between the parties. The ancillary relief proceedings were resolved by consent by an Order made on 23 June 1998. This Order included financial provision and property adjustment provisions. (Although the copy in the trial bundle does not show a seal, I was shown a sealed copy.) Its recitals included:
3. Upon the parties agreeing that the provision referred to hereafter is expressly without prejudice to the Petitioner’s claim for an interest in the Property known as 16A Knockhall Chase Greenhithe Kent, and/or in its proceeds of sale, (such claim being disputed by the Respondent) ...
It is in substance that claim that is now asserted in these melancholy proceedings: Mrs Buggs asks, principally for a declaration that she is entitled to a share in that property.
2. Mrs Buggs, whose documents have been skilfully prepared and show obvious signs of assistance from a litigator, has had to conduct these proceedings in person, and did so very well.
3. Recital 2 to the Order of 23 June 1998 recorded an acknowledgment by each party that the Order was otherwise 'in full and final settlement of claims for capital and property adjustment' by either against other. The effect of the Order is that neither party could thereafter apply for a property adjustment order to be made as regards 16A Knockhall Chase (hereafter, '16A', or, where appropriate, 'the Property') or its proceeds of sale. Ancillary relief has been finalised.
4. Mr Buggs’ mother, Muriel Elsie Buggs, lived for many years as a council tenant. She had lived for a time at another property in Knockhall Chase, in a 3-bedroomed property, and later at Ingress Gardens, also a three-bedroomed property. She moved from there to 16A after her husband’s death. 16A was a two-bedroomed property. The Housing Act 1985 having given her the right to buy it, she set about doing so in 1986/7, taking a 125-year lease on 2nd March 1987, registered under title number K623725. The purchase price was £14,560, which was discounted by 48% from open market value to reflect the length of her period as a council tenant (in various properties), thus implying an open market value of £28,000: the details appear from the lease. She was registered as sole proprietor, with no encumbrances. The lease contained a repayment of discount clause, cl. 2(14), which would be triggered by a disposal within 3 years of the kind mentioned in s.155 of the Housing Act 1985, but my reading is that the provisions of that Act as to repayment would not have been triggered by creation of any of the equitable interests of the type which have been discussed in this case.
5. The total outlay required to buy 16A was a little over £14,560: solicitors were instructed, so there were fees to pay. No documents from the solicitors have been made available in these proceedings. Without prejudice to the question whose money it was, most or all of this (Mrs Buggs says all: 80B-2) came from the household of David and Josephine Buggs. Muriel’s core income was from public funds, essentially a single State pension. She did have some savings in a Building Society, said to be some thousands of pounds, with which she did not wish to part, and which were generating interest. She did not have any other savings or the means to enable her to obtain a mortgage. No contribution to the overall costs of acquisition was made by or from the resources of any other member of the family; in particular, no contribution was made by Mr David Buggs’ brother, Barry.
6. Given that the four persons who feature in this litigation all share the same surname I trust that it will be regarded as acceptable that I refer to Mrs Muriel Buggs and Mr Barry Buggs by their first names. I shall use the first names of the claimant and defendant where convenient, but 'Mr Buggs' and 'Mrs Buggs' always refer to defendant and claimant, and never to Barry and Muriel.
7. Muriel died on 9 August 1999. Her will named Mr Buggs sole Executor. He obtained a Grant of Probate on 5 April 2001. As (1) Mr Buggs wanted to sell the flat but (2) Mrs Buggs had lodged a Caution against the Title, eventually Mrs Buggs was faced with the position that either she commenced proceedings or the Caution would be vacated: on 13 March 2002 the Solicitor to H.M. Land Registry directed Mrs Buggs to institute proceedings in this Division of the High Court for the purpose of determining whether the Caution should be cancelled. I find no substance in the criticism of her timing. It appears to me entirely reasonable that she took no action, apart from registering the Caution, during Muriel’s lifetime, and not unreasonable that she did nothing to pursue her claim until the events of 2001.
8. By paragraph 2.2 of the Particulars of Claim, Mrs Buggs contended that:
The Property was to be held on Trust for the benefit of the Claimant and the Defendant jointly (and as a future investment for their children), subject to Muriel being allowed to live in the Property for the rest of her life.
I cannot read this in any way other than as an assertion that Muriel had held the Leasehold Property as Trustee and not as sole beneficial owner.
9. By her 1997 (and final) Will Muriel attempted to leave the Property to David and Barry in the respective shares 20%:80%. If the assertion in paragraph 2.2 of the Particulars of Claim is correct, she was not free to do so, and there is nothing as regards this Property in respect of which Barry is entitled to participate. If, by contrast, Muriel did not hold as Trustee, Barry is entitled to 80% of the proceeds of the Property. At the time of the Grant of Probate, Mr Buggs was hoping to sell the property for just under £75,000. I have been given no indication of current value, but am aware that values of many properties in the south-east rose strongly in 2001-2002, so it is certainly possible that Barry’s share, if he would be entitled to one, would be worth £80,000 today.
10. As soon as I started reading into the papers I became concerned about Barry’s position, he not being party to these proceedings. My concerns were not reduced by the fact that the approach taken by the defendant was that it was suggested that Mrs Buggs was only claiming an interest in Mr Buggs’ 20% share under the Will - a position which I cannot reconcile with what is said in the Particulars of Claim. The proceedings therefore came on when the claimant was unrepresented, the person who stood to lose most was not a party, and the defendant was appearing to be tackling the proceedings on the footing that the claimant was asserting something different from that which the Statements of Case say, apparently unconscious of the threat to Barry’s interest.
11. Having explored this distinctly awkward situation with the parties, I decided to proceed, tempted though I was not to do so. C.P.R. Part 19.7A(1) appeared to me to enable the proceedings to continue without Barry being made party. I consider that for three reasons these can be regarded as proceedings brought against Mr Buggs in the capacity of Executor within the meaning of that rule: first, because the proceedings are about the Caution, which is registered against the title belonging to the Estate and not to Mr Buggs personally; second, because the Land Registry direction dealt with Mr Buggs in the capacity of Executor; and third, because the claim as set out in paragraph 2.2 of the Particulars of Claim can only be construed as against the Estate (even if one may consider that there is an alternative personal claim against Mr Buggs, on the basis that what Mrs Buggs really wants to know is whether she has some beneficial interest in something and if so what that interest is). Even so, I would not have proceeded had Mr Buggs been taking any position other than that the property had been Muriel’s free of trust, to dispose of by Will as she might wish; but he was taking that position. Miss Pines Richman, for Mr Buggs, did not ask for an adjournment, having had the opportunity to consider whether she wished to do so. I was told that Barry had known of these proceedings for about a fortnight. He was also, at my request, told by Mr Buggs’ solicitors that the trial had started and would be continuing next day.
12. Mrs Buggs had also been seeking adjournments and representation, either with publicly funded or pro bono representation. Such an adjournment had already been given by Neuberger J. and had led to the postponement of the trial for a short period. Mrs Buggs said that she could not indicate to me that an adjournment of any definable length would result in her being represented, only that it might. Despite the difficulties inherent in the situation, it appeared to me better, in accordance with the overriding objective of the Civil Procedure Rules, to proceed. In the event, Mrs Buggs has been an impressively organised litigant in person, to the point that when she told me that she is at present training, I enquired for what, and would not have been surprised had the answer been for legal work (in fact the answer was, in the use of accountancy software).
13. Mrs Buggs’ case is put on the basis that the purchase price and outgoings of 16A were paid by the parties. Realistically read, paragraph 2.2 of the Particulars of Claim also asserted a common intention that the Property was to be held on the Trust I have already quoted. The Defence denied any participation by the claimant in the purchase price and outgoings of 16A; asserted that the funding to Muriel was provided by Mr Buggs as a gift and/or repayment of loans, and denied that the Claimant had acquired an interest by common intention or otherwise.
14. The law in this area, and the difficulty of the relevant fact-finding, have been the subject of many well-known decisions, particularly Gissing v. Gissing and Lloyds Bank v. Rosset. I have approached this case with the following very much in mind.
15. In Gissing v. Gissing [1971] A.C. 886 Lord Diplock said this, in the well-known passage at p.905:
A resulting, implied or constructive trust - and it is unnecessary for present purposes to distinguish between these three classes of trust - is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.
A resulting, implied or constructive trust - and it is unnecessary for present purposes to distinguish between these three classes of trust - is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land. 'This is why it has been repeatedly said in the context of disputes between spouses as to their respective beneficial interests in the matrimonial home, that if at the time of its acquisition and transfer of the legal estate into the name of one or other of them an express agreement has been made between them as to the way in which the beneficial interest shall be held, the court will give effect to it - notwithstanding the absence of any written declaration of trust. Strictly speaking this states the principle too widely, for if the agreement did not provide for anything to be done by the spouse in whom the legal estate was not to be vested, it would be a merely voluntary declaration of trust and unenforceable for want of writing. But in the express oral agreements contemplated by these dicta it has been assumed sub silentio that they provide for the spouse in whom the legal estate in the matrimonial home is not vested to do something to facilitate its acquisition, by contributing to the purchase price or to the deposit or the mortgage instalments when it is purchased upon mortgage or to make some other material sacrifice by way of contribution to or economy in the general family expenditure. What the court gives effect to is the trust resulting or implied from the common intention expressed in the oral agreement between the spouses that if each acts in the manner provided for in the agreement the beneficial interests in the matrimonial home shall be held as they have agreed.
16. In Lloyds Bank v. Rosset [1991] 1 A.C. 107 Lord Bridge of Harwich, with whom all the other members of the House expressed agreement, said this [at pp. 127-8]:
The question the judge had to determine was whether he could find that before the contract to acquire the property was concluded they had entered into an agreement, made an arrangement, reached an understanding or formed a common intention that the beneficial interest in the property would be jointly owned. I do not think it is of importance which of these alternative expressions one uses. Spouses living in amity will not normally think it necessary to formulate or define their respective interests in property in any precise way. The expectation of parties to every happy marriage is that they will share the practical benefits of occupying the matrimonial home whoever owns it. But this is something quite distinct from sharing the beneficial interest in the property asset which the matrimonial home represents. These considerations give rise to special difficulties for judges who are called on to resolve a dispute between spouses who have parted and are at arm’s length as to what their common intention or understanding with respect to interests in property was at a time when they were still living as a united family and acquiring a matrimonial home in the expectation of living in it together indefinitely.
17. In this case the question for me is different, because we are concerned with the arrangements for the acquisition of Muriel’s home, but the difficulties about evidence are no less given that I am concerned with, among other things, a possible understanding or common intention involving not only the husband and wife but also Muriel.
18. Reverting to the Rosset case, at p.132 Lord Bridge declined to embark on any attempt at a comprehensive statement of the law in this area, but was at pains to emphasise one point in these terms:
I do, however, draw attention to one critical distinction which any judge required to resolve a dispute between former partners as to the beneficial interest in the home they formerly shared should always have in the forefront of his mind.
The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.
In sharp contrast with this situation is the very different one where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.
19. I have approached the evidence in this case with these passages very much in mind. I also paid particular attention to the following passage from the judgment of Browne-Wilkinson L.J. in Grant v. Edwards [1986] Ch. 638 at p.655, where he said:
In cases of this kind the first question must always be whether there is sufficient direct evidence of a common intention that both parties are to have a beneficial interest. Such direct evidence need have nothing to do with the contributions made to the cost of acquisition. Thus in Eves v. Eves [1975] 1 W.L.R. 1338 the common intention was proved by the fact that the claimant was told that her name would have been on the title deeds but for her being under age. Again, in Midland Bank Plc. v. Dobson (unreported), 12 July 1985; Court of Appeal (Civil Division) Transcript No. 381 of 1985 this court held that the trial judge was entitled to find the necessary common intention from evidence which he accepted that the parties treated the house as 'our house' and had a 'principle of sharing everything.' Although, as was said in the latter case, the trial judge has to approach such direct evidence with caution, if he does accept such evidence the necessary common intention is proved. One would expect that in a number of cases the court would be able to decide on the direct evidence before it whether there was such a common intention. It is only necessary to have recourse to inferences from other circumstances (such as the way in which the parties contributed, directly or indirectly, to the cost of acquisition) in cases such as Gissing v. Gissing [1971] A.C. 886 and Burns v. Burns [1984] Ch. 317 where there is no direct evidence of intention.
The Dobson case was later reported at (1986) 1 F.L.R. 171 and I have read it since the end of the hearing: I need not cite from it. In that case the need for caution about the evidence was emphasised in the context that the husband and the wife were both taking a position adverse to the interests of the creditor; I do not doubt that Browne-Wilkinson L.J. was suggesting a need for caution about evidence, of the type heard in that case, generally.
20. It is against that background that I consider the question of common intention, understanding, or similar state of affairs. I wish to begin by saying something about the witnesses.
21. Quite apart from the difficulties which any case like this must present, Mr Buggs has a track record which would naturally make me approach evidence from him with caution. In 1998 his Legal Aid certificate for the ancillary relief proceedings was discharged. It had appeared to his solicitors that there were 'certain inconsistencies in regard to information supplied' and they felt compelled to report the position to the Legal Aid Board. The Board, having given Mr Buggs opportunity to show cause why the certificate should not be discharged, did discharge it. That information by itself might raise my level of wariness, but it is raised to a different extent when one finds a recent conviction, and a year’s prison sentence (suspended for 2 years), for attempting to obtain a pecuniary advantage by deception: Crown Court at Maidstone, 10 August 2001, plea of guilty. (The indictment was not concerned with any matter relating to litigation or any dispute between these parties).
22. None of that does more than make me start from a position of caution: in relation to evidence about matters affecting his pecuniary interests, Mr Buggs does not start this case on the basis of being able to say that he has a good record of providing reliable statements where his own money interests are concerned; he has an adverse record. That said, I am, and was during the hearing, conscious that having sailed dangerously close to prison in 2001 he might be very careful indeed not to take the same risk another time.
23. Mrs Buggs is careful, particularly about money, observant, and I believe a reliable witness. This is not to say that she is always 100% accurate (the purchase price stated in paragraph 2 of the Particulars of Claim was wrong, for example, but was carefully corrected in paragraph 6 of the Reply), but because both of her accuracy of observation and the quality and conscientiousness of her recollection I am satisfied as to her reliability. Mr Buggs’ observation may not have been as detailed but was by no means poor. But his memory can be poor: he appeared genuinely unable to remember details such as where the parties met or even the year in which they were married. It was my clear impression that he was being careful not, knowingly, to mislead me, for the reason just given. But he is not someone who recollects things either well or with detachment: the account in paragraph 2.15 of the Defence of Mrs Buggs’ involvement with the family company belittles her contribution to it, and he maintained in oral evidence an attitude quite at variance with the position he had taken in the divorce proceedings, when he was saying, in effect, that the absence of co-operation in the business by Mrs Buggs was making running the business difficult (see paragraph 7 of his Affidavit of 9 August 1996, which when I asked him about it he accepted had been an accurate statement). In the Reply Mrs Buggs, by contrast said that 'she and the Defendant could complement one another as a very good team', which I have no doubt was a fair description of the way they worked in setting up an effective company; in paragraph 3 of her witness statement she acknowledged the defendant’s skill and qualification as a painter, and his skills as estimator and supervisor and the value of these to the company. Her skills were on the administrative side, and they were very much needed because Mr Buggs is short on literacy skills. She has the ability to give detached evidence about matters between them. He does not.
24. The parties had met when they were both working for a pharmaceutical company. Mr Buggs owned a house, 39 Eynsford Road, subject to a mortgage, having bought out the interest of the woman with whom he had first bought it.
25. There was dispute as to the extent to which the parties’ earnings were pooled: I refer to that later.
26. In 1986 they had two children, the younger, Mark, still being a baby. The question of Muriel’s purchase seems to have arisen while Mrs Buggs was pregnant. Mrs Buggs was not earning at this time.
27. The circumstances of the flat purchase are not documented. I have tried to identify the intentions of the people involved, and the source of the money.
28. I find that the possibility of the purchase of the property was discussed in considerable depth. 'Some depth' was what Mr Buggs said in paragraph 4 of his Affidavit of 3 March 1997, and sits well with Mrs Buggs’ expression of 'some length' in her witness statement. Mr Buggs’ witness statement’s I cannot remember having any lengthy discussions with [Josephine] concerning the purchase of the property' is probably literally true: he does not remember. That is quite different from saying that Mrs Buggs is wrong. In particular, I have no doubt, having seen and heard her give evidence, that Mrs Buggs was involved in the financial decision whether to go ahead or not. It is not disputed that she knew of it, and I cannot imagine her failing to see that she understood it. Among other things, she, articulate, fluent and organised, was readily able to deal with documents. Neither Mr Buggs nor Muriel was. And, as Mr Buggs’ Affidavit of 3 March 1997 put it . the Petitioner and I purchased my mother’s council flat.'
29. The one uncontrolled, and because of that very revealing, passage in her oral evidence came at the end, when she said, of the implications of the decision, 'Our mortgage had more than doubled overnight and our children were in jeans with holes in before that became fashionable'. Both she and Mr Buggs appear to have been very careful with money. While their care meant that taking the further loan of £13,000 was a decision safely accomplished in the event, I have no doubt that it appeared a major financial decision, in what was a one income household with one small child and a baby expected (and by the time of the advance with the baby born); that at that stage Mr Buggs would have discussed such a matter with her; that she would have been closely involved in the decision-taking; and that it would have been unlikely that the transaction would have gone ahead without her support for it.
30. There is evidence that a factor in the decisions being taken was that purchase would eliminate a perceived risk, real or not, that Muriel might otherwise be required to move away from 16A to another Estate. I accept that that was a factor in the decision. I am satisfied, however, that the major reason for the decision was that, from the viewpoints of all of Muriel (for whom traditional rent would be eliminated), David and Josephine, the purchase was financially attractive. The discount of 48% offered the opportunity of the acquisition of an asset worth £28,000 for an outlay of £14,560. Aware that house price inflation could (but not necessarily would) generate a substantial gain, the opportunity was there for a controlled outlay of money to make a substantial contribution to the long-term financial prospects of the family, and I believe this to have been the driving force behind the transaction.
31. I do not believe that Mrs Buggs would have been content for her husband to proceed with this unless she believed that her family unit would benefit from the exercise. I believe that she understood the financial circumstances of her family unit well and was a good financial manager (I think that Mr Buggs was a good financial manager too). She saw the plan as a sensible one. It would not have been a sensible one from her point of view if her family unit was not going to gain, eventually, from accepting the burden of financing the purchase. She was conscious that the provision of funds could lead to her family unit facing financial difficulties. She was willing to face them if appropriate. But she would, she told me, have been horrified if she had been asked whether she would be content if Muriel were to leave the property to someone other than herself or her husband, and I believe that she would have been horrified by that idea - not in a grasping or unattractive way, but simply because this was a co-operative venture involving a significant immediate financial sacrifice by her own family unit.
32. So far as Mr Buggs’ intention was concerned, I reject his evidence that his intention as to the provision of funds to Muriel was that it was to be without obligation on her part (gift and/or repayment of loans). I have no safe basis for deciding whether Muriel had or had not assisted him financially with the purchase of Eynsford Road; she may well have done so. The change in the law offered both the chance for Muriel to control her destiny, at least to the extent of taking control from the Council, and achieving that was a motive, but also the chance of long-term benefit to the providers of funds, and I do not think that anything would have been done about this without the solid expectation of an eventual return, whatever may previously have been assistance provided by Muriel to Mr Buggs.
33. As to Muriel’s intentions, the evidence is unsurprisingly very thin, but the 1994 Will left the property to David and it is common ground that her earlier Will did too. Until the divorce reached the point at which Mrs Buggs formally claimed an interest in the property that remained the position. At that stage Muriel made a new Will leaving 16A to Barry and David in the proportions 80:20, and the coincidence of timing - just after Mrs Buggs had formally stated her claim to a resulting trust, in the ancillary relief proceedings - affords a safe inference that she did not do this behind Mr Buggs’ back or otherwise without his agreement.
34. No one suggests that the Wills were made with the benefit of thought, let alone careful analysis, of the possible trust position. Mrs Buggs is clear that no one understood about trusts and their potential significance. Those involved were aware of Wills. Leaving property by Will to a person to whom an obligation was owed would have seemed to them the right way to meet the obligation which I consider existed. What is clear is that until 1997 Muriel wished the property to go to David on her death, and this is consistent with a belief that it ought to do so. (Of course it is not inconsistent with the absence of such belief.) Given that the parties were in regular contact with Muriel, and that I find that they both had an intention that the result of the transaction should be an eventual benefit to their family unit, I am confident that this must have been discussed with Muriel. This was a family in which such things were discussed. For example, Muriel told David and Josephine of the terms of her 1994 Will. It is to me inconceivable that the reasons for the provision of funds would not have been discussed and understood.
35. It is undoubted that Mrs Buggs knew of the terms of the 1994 Will when it was made and also that she did not suggest that its terms ought to be different. Miss Pines Richman relied strongly on the absence of query as to the terms as evidence that Mrs Buggs did not really consider herself, as opposed to W Buggs, as entitled to be an owner of 16A after Muriel’s death, but I do not consider that the mere absence of query affords that inference in this case. Mrs Buggs has later become very proficient in arguing her corner (and I mean that as a compliment to the way in which she has conducted this case). I do not consider that she was ever the sort of person to say to her mother-in-law that she thought that her mother-in-law ought to be leaving property to her, at any rate unless the question were raised by her mother-in-law (and there is no evidence that it was). Given that the property would be coming to her family unit, it was not a matter about which Mrs Buggs would be likely to question with her mother-in-law, even if, as Miss Pines Richman suggested, there was some basis (rejected by Mrs Buggs) for supposing that the marriage was starting to show strain.
36. Approaching the question as indicated by Lord Bridge, I find that on the balance of probabilities the devolution of the property on Muriel’s death was discussed with her and that it was recognised by all three parties that the scheme was that after Muriel’s death 16A should belong to the David/Josephine household. The members of that household acted to their detriment. David borrowed, and provided to Muriel, £13,000 (and probably provided more). Josephine agreed to this and to the consequential doubling (and more) of her family unit’s monthly mortgage commitment, which meant a sustained long-term reduction in the funds available for the members of her household. The holes in the jeans were predictable. I regard the acceptance of that sustained long-term reduction in available funds as a sufficient detriment in the terms envisaged by Lord Diplock in the passage cited from Gissing v. Gissing.
37. In my view it would have been against conscience for Muriel to leave the property away from that family unit without appropriate consent. It follows that in my view her interest was subject to equitable obligations in favour of - whom? The question is begged, to whom, and in respect of what, were such obligations owed?
38. The problems of evidence about such matters are well known. In opening, verified as to fact when giving evidence, Josephine told me that her view was that Muriel was 'probably entitled to leave the 4M’ which was seen as 'representing Muriel’s contribution' away from Mr and Mrs Buggs. Yet, she said, it was known as 'Jose’s and Dave’s flat'. Was it their flat, or was it their 52% of a flat? Was it Muriel’s flat to live in for her life, but Mr and Mrs Buggs’ to own?
39. In my judgment Muriel entered into the transaction intending that the property should, subject to her being able to live there for life, then be the property of, loosely, the family of David and Josephine. I recognise this as a very marginal conclusion, but am significantly influenced by it being known as 'Jose’s and Dave’s flat' as opposed to 'Muriel’s flat' (and because of Mrs Buggs lack of overstatement in her evidence I accept that to some it was so known). The view of Mrs Buggs mentioned in the previous paragraph could of course be very significant, but this is one of those areas of uncertainty inherent in cases of this kind, and I regard my conclusion as more probably correct: her remarks about the point over the first day of trial were uncharacteristically inconsistent, which suggests to me that her view was for once unclear.
40. I do not, however, consider that Muriel did so with the intention that it should be the property of David and Josephine. To adapt Lord Bridge’s words (but remembering that judgments are not statutes):
The expectation of parties to every happy marriage is that they will share the practical benefits of [owning a property investment] whoever owns it. But this is something quite distinct from sharing the beneficial interest in the [property investment in question].
Conscious that Mrs Buggs’ witness statement had barely addressed this issue - it being a handicap for litigants in person that they are not necessarily well directed to exactly what they should be addressing - I asked her to tell her own story in the witness box, and also asked questions about this myself Mrs Buggs’ answers about Muriel’s intentions were not in terms of what Muriel said or showed; they were in terms of what Mrs Buggs presumed or assumed, although it was said that Mr Buggs’ brothers knew it as Jose and Dave’s flat. I felt that her evidence was being very carefully and conscientiously given; that she was not saying that she could speak for Muriel’s intentions as to Mrs Buggs’ personal interest, as opposed to the intention as to the family unit’s interest; and that she was being scrupulously careful not to say that because she could not properly do so. This was entirely consistent with not her behaviour about the 1994 Will but what she thought about that Will: as she saw it, it was her family unit that was to benefit from the investment, not she herself who was to have a property interest. This, too, is consistent with the frequent references to 16A being an investment for the children: these references impacted on me as references to who would see the eventual benefit from the investment, as opposed to references as to who would have a beneficial interest in the investment.
41. I have considered whether there may have been an intention that Mrs Buggs should be entitled to a share in any share which Mr Buggs might have in the property (this was, after all, what the defendant apparently thought was the case being put against him, even though he disputed the case). For the same reasons as above, I do not think that there was such an intention. 'Ours' was not being used to refer to ownership as opposed to benefit.
42. I have also considered whether this could be a case in which the position was that held to have existed in Midland Bank Plc. v. Dobson (1986) 1 F.L.R. 171, where a general policy of shared ownership was hold by the Judge to have existed in the particular case. There are certainly indications that this could have been the case at the time. When this subject was raised in Affidavits in the divorce proceedings the description was that of a joint scheme.
In the course of the divorce proceedings Mrs Buggs claimed a proprietary interest in 16A. This first occurs in the present trial bundle at p.636, when, in paragraph 12 of an Affidavit in injunction proceedings. Mrs Buggs said:
He then accused me of trying to evict his mother from her flat (because I alleged a resulting trust in view of our providing the purchase money therefore.) I have no intention of ever evicting her.
This passage received no response when Mr Buggs put in an opposing Affidavit on 9 August 1986 [650]; that does not surprise me, as his Affidavit was focussed on the injunction issues.
In due course Mrs Buggs applied for ancillary relief Her Affidavit of 27 November 1996 said this in para 17:
In approximately September 1986 the Respondent and I paid for the purchaser by the Respondent’s mother of flat 16 Knockhall Chase, Greenhithe, Kent (of which she was previously the Council. Tenant) and have also paid Council Tax, rates, water rates, service charges on a regular basis until the introduction of the Poll Tax ...
18. I allege that there is a resulting trust in favour of the Respondent and myself. I do not wish to dispossess the Respondent’s mother, but desire that the court should take the circumstances of the acquisition of the flat into account when making a final disposition of my claims in this case. I believe the current value of this unencumbered leasehold flat to be about £35,000.
Mr Buggs replied by Affidavit sworn on 3 March 1997:
It is correct that in approximately September 1986 the Petitioner and I purchased my mother’s council flat.
43. All this comes across as a joint exercise, which it was. It does not, though, seem to me to amount to a general agreement that all property acquired involved an intention of shared ownership. Mr Buggs put it this way, and my impression when he did so was that he was being careful to avoid stating an untruth (but also careful to avoid giving anything away unavoidably):
The way I was looking at it was I was married at that time. I would not say that I saw it as a joint purchase, I was looking at it that I was married at that time.
Whether this was recollection or after-the-event wishful thinking is difficult to be sure. On the whole, more probably the latter: contrast the Affidavit of 3 March 1997. But, conscious that different people may have been using language differently, my sense is that the decisions were joint decisions without an understanding as to what the property rights would be between the parties, which is why I quote the remark.
44. So far I have been concerned with intention, I trust treating it as a distinct question as identified by Lord Bridge.
45. Mrs Buggs also relies on the funding of the purchase, both at the time and by the indirect route of contribution to the meeting of the interest and capital repayments of the borrowing which substantially funded the purchase.
46. It is unfortunate that, despite her careful work on researching documents, the material does not stretch back to the time of purchase, beyond a statement showing the advance -which was on the security of a property which was the matrimonial home and was, and continued always until sold in 1995 to be, in Mr Buggs’ sole name. The material to try to see where the balance of the funds (beyond the £13,000) came from is only vaguely sketched.
47. It is common ground that in the early 1980s the parties had separate bank accounts. Mrs Buggs says that at the time of the purchase there was a joint account with the Midland Bank; Mr Buggs that there was not. In the end it was not established in whose accounts what monies were. Mrs Buggs regarded the savings, wherever they were, as 'our' savings. They had certainly accumulated because the parties were thrifty and were not engaging in significant independent spending. It is possible to an extent that the savings represented in part money saved by Mrs Buggs or saved because of her earnings in the days when she was earning, but I am not able to quantify a contribution of this kind. I do repeat that I do not believe that the transaction would have gone ahead had Mrs Buggs been opposed to it: as regards a transaction of this kind, there was joint control, irrespective of whose account the money was in. I note that the account card for the mortgage on the matrimonial home, which property was in Mr Buggs’ sole name, was at some stage changed into joint names; I do not attach great significance to this, even though I prefer Mrs Buggs’ evidence that Mr Buggs assented to this, but it fits in with my picture of joint control of major financial decisions.
48. As to later contribution to meeting the family’s financial needs, Mrs Buggs was a considerable contributor. In 1988 (the year after the 16A purchase) Mr Buggs left his job and the parties set up Triangle Decorating Contractors Ltd., a company which thrived by their joint efforts, from day one (Affidavit of 9 August 1996, paragraph 4) and for so long as they were both putting their efforts into it; its fortunes waned when the fortunes of the marriage did (there were various reasons for the effect on the company). Here both parties were good at their roles, and prosperity came from teamwork. The parties, as director-employees, were paid. What they were paid went into accounts (different at different times) from which the mortgage was paid and sometimes bills were paid for Muriel. I have no doubt that Mrs Buggs was contributing to what was essentially a common pool, and that out of that pool the mortgage obligations taken on in order to finance the acquisition of 16A were met.
49. I do not see that this history gives rise to a trust in Mrs Buggs’ favour, which requires the drawing of an inference that Mrs Buggs was to have a beneficial interest in the property (or, on the alternative basis, a beneficial interest in any share which Mr Buggs might have). While it shows her as a determined, hard-working wife who made a strong contribution to the family’s welfare in financial as well as personal terms, it does not show the intention that she was to acquire a beneficial interest in the property, against the background of the consideration given to the acquisition of the property and its long-term destiny which I have set out above.
50. The result of the above is that in my opinion Mrs Buggs has failed to establish her claim, with the result that the Caution ought to be vacated. I regret the disappointment which this will give to this impressive woman, who had done much for her family, and who presented her claim with conspicuous fairness towards her ex-husband, even though it is clear that she regards him as a deceitful man for whom she has rather less than no respect. Fortunately this is a case in which the powers of the Matrimonial Causes Act 1973 were available and were used, and the dispute about this particular asset is only one part of the resolution of the unhappy falling out of these parties.