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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Chandler v Clark [2002] EWCA Civ 1249 (28 June 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/1249.html Cite as: [2002] EWCA Civ 1249

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Master Price)

		Royal Courts of Justice Strand London WC2 Friday, 28th June 2002

1. LORD JUSTICE CHADWICK: This is an appeal from an order made on 30 November 2001 by Master Price in proceedings brought in the Chancery Division of the High Court by Mrs Miriam Clark, as executrix of the late Mr. Kenneth Chandler, for relief under section 14 of the Trust of Land and Appointment of Trustees Act 1996. The defendant to the claim in those proceedings is Mrs Valerie Chandler, formerly the wife of Mr Kenneth Chandler. The relief claimed is a declaration that the claimant and the defendant are beneficially entitled in equal shares to freehold property known as 47 Marlborough Close, Grays, Essex; in the alternative, a declaration as to the nature and extent of the claimant's and the defendant's respective interests in that property; and an order that the property be sold.
2. Mrs Valerie Chandler and the late Mr Kenneth Chandler were married in 1958. In 1972 they, with their three young children, emigrated to New Zealand. But, by 1998 they had decided to return to the United Kingdom. Mrs Chandler was the first to return; Mr. Chandler followed a few months later after he had wound up their affairs in New Zealand. The property, 47 Marlborough Close, was purchased as their matrimonial home. It was purchased in the sole name of Mrs Chandler; and, on 3rd November 1998 she was registered as proprietor at HM Land Registry under title no. EX235781.
3. Mr. Chandler retired from employment in January 1997 on the grounds of ill-health. He had been seriously ill for some time before that. He was then 65 years old. His wife was some ten years younger. In or about March 1997 Mr. Chandler met Mrs Clark and they became close. It is clear that, by May 1997, he knew that his illness was terminal and he decided that he wished to end his marriage to Mrs Valerie Chandler; and that he wished to spend what remained of his life with Mrs Clark. He moved out of the former matrimonial home, 47 Marlborough Close, in June 1997. On 15th July 1997 he registered notice of rights of occupation as a spouse under the Matrimonial Homes Act 1983 against the title. Some three days later he commenced proceedings for divorce on the grounds of unreasonable behaviour. On 22nd September 1997 he made a will in which he appointed Mrs Clark to be his executor and trustee, and made her the sole beneficiary of the whole of his estate. His marriage to Mrs Valerie Chandler was dissolved by a decree of divorce made in the Southend County Court on 2nd March 1998, which became absolute on 15th April 1998. He died on 18th May 1998. Probate of his will was granted to Mrs Clark on 2nd September 1998.
4. These proceedings were commenced on 11th April 2001 by the issue of a claim form under CPR Part 8. Details of the claim appear in a document signed by Mrs Clark and dated 23rd February 2001. So far as material it is alleged (i) that the property, 47 Marlborough Close, was purchased with the joint contributions of Mr Kenneth Chandler and Mrs Valerie Chandler, (ii) that the legal estate in that property was vested in Mrs Valerie Chandler as trustee for herself and her former husband, and (iii) that the net proceeds of any sale of that property were to be held by Mrs Valerie Chandler as trustee for herself and the claimant. In an acknowledgement of the claim, dated 26th April 2001, each of those allegations was denied. At a directions hearing on 7th August 2001 the Master ordered an inquiry as to the beneficial interests of Mrs Chandler and the estate of her former husband in the property; and gave directions for evidence.
5. Mrs Clark had no personal knowledge of the circumstances in which the property, 47 Marlborough Close, had been purchased; but she put in, by way of evidence in support of her claim, her copies of the affidavits which were sworn by the parties in their divorce proceedings. In the late Mr Chandler's affidavit, sworn on 6th October 1997, he had described the purchase of 47 Marlborough Close in these terms, at paragraph 10:

"When I returned to the United Kingdom the respondent had purchased the property at 47 Marlborough Close. I believe the purchase price was approximately £100,000.00. The purchase monies were initially made up of our savings that the respondent brought back from New Zealand, the sale of the shop in New Zealand and also bridging finance. When I returned to the United Kingdom with approximately £100,000.00 the bridging finance was discharged leaving a mortgage of about £28,000.00."

6. In the previous paragraphs of that affidavit Mr. Chandler had made it clear that the funds which he and his former wife had brought back from New Zealand (including the proceeds of sale of their former matrimonial home in New Zealand) had been monies to which they were jointly entitled.
7. Mrs Valerie Chandler's evidence, in her affidavit in the divorce proceedings, was much to the same effect; at least as to the source of the funds, although the figures differ. At paragraph 5(i) of that affidavit, which she swore on 16th December 1997, she deposed:

"The property [47 Marlborough Close] was purchased in 1988 for £129,995. It is correct that the purchase monies were made up of both our savings that I had brought back from New Zealand and a mortgage with the Halifax Building Society that I took out to enable me to purchase the property...

The property in New Zealand was sold for $230,000 which is the equivalent to £85,000. When the petitioner returned to the United Kingdom there was approximately £80,000 left after payment of the fares and expenses and discharge of the mortgage leaving a mortgage of £30,000."

8. In the light of that evidence it is not surprising that Mrs Chandler has accepted that, until June 1997, her former husband had had a beneficial interest in 47 Marlborough Close. Her primary contention in these proceedings has been that, on 6th June 1997, he waived that interest and that, thereafter, she has been the sole beneficial owner of the property registered in her sole name. She relies on a document signed by Mr Chandler which is in these terms:

"TO WHOM IT MAY CONCERN

Today, Friday 6th June 1997, I KENNETH WILLIAM CHANDLER do agree that VALERIE shall keep the house at 47, Marlborough Close in consideration that Valerie agrees to a total breakdown in the marriage and agrees to a divorce and monies to me (KWC) as agreed by Valerie Ken + David Chandler and that I will vacate the house to find my own lodgings, returning to the above house to collect personal effects etc, as agreed by all parties. Such goods can be put in the garage so there will be no need for contact with the above house."

9. David Chandler - who is referred to in that note - was the son of Mr. Kenneth Chandler and Mrs Valerie Chandler. The note was signed by Mr. Kenneth Chandler but not by Mrs Valerie Chandler.
10. The inquiry which the Master had ordered in August was made by him at a hearing on 30th November 2001. By the order which he made on that day he declared that the property "is beneficially assured by the claimant as the executor of the estate of the Late Kenneth William Chandler and the Defendant in equal shares"; and he ordered the sale of the property and division of the proceeds equally between the claimant and the defendant after payment of the monies secured by a mortgage to Lloyds Bank Plc and the costs and expenses of sale. He started from the position that, as he said in the first paragraph of his judgment:

"It is now common ground that this property was beneficially owned by the defendant, Mr Chandler's wife, and Mr Chandler in equal shares in equity... subject only to the effect of an agreement alleged to have been made and dated 6th June 1997, under which it is alleged Mr Chandler's share in the property was transferred to the defendant".

11. He rejected the contention that the document signed by the late Mr. Chandler on 6th June 1997 could, itself, amount to a disposition of his equitable interest in the property. As he put it, in a passage at page 5 in the transcript of his judgment, between B-F:

"I am unable to accept that this document amounts to a disposition of Mr Chandler's equitable interest in the property. There were clearly terms attached to the disposal and this, therefore, evidences a contract to dispose of an equitable interest, which would have to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. In my view it did not itself dispose of Mr Chandler's equitable interest and it would only have done so on performance of the contract by the defendant, whereupon equity would of course grant specific enforcement of the contract contained in it, assuming there was indeed a contract, and that it was otherwise enforceable. I therefore do not accept that this document is to be considered as anything other than as evidencing a contract and the contractual issues raised therefore fall to be considered."

12. He went on to address the question whether the inference to be drawn was that the parties had intended to create legal relations and had intended to reach a final settlement of their dispute; and he held against Mrs Valerie Chandler on both of those points.
13. The short answer to a claim based on contract is, as it seems to me, that identified by the Master: namely that a contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in a document which is signed by or on behalf of each party to the contract - see section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Whatever else can be said about the document of 6th June 1997, it cannot be said that it was signed by both Mr. Chandler and Mrs Valerie Chandler. Accordingly, there is no contract. The statute requires that a contract in relation to the sale or disposition of an interest in land can only be made in a particular form; and that requirement was not satisfied in this case. There are obviously other difficulties, including the difficulty that, on any basis, the arrangement appears to contemplate some further agreement in the future.
14. Mr. Nichol, who appears on behalf of Mrs Valerie Chandler, recognized the difficulties that faced him in relying on the document of 6th June 1997 as a contract. He sought to circumvent those difficulties by asserting that the true effect of the document is that it was itself a disposition of an equitable interest under a trust. If that assertion were made out the document would not need to comply with section 2 of the 1989 Act; it would be enough that it complied with section 53(1)(c) of the Law of Property Act 1925. The formal requirement would be that the disposition was in writing, signed by the person disposing of the same, or by his agent thereunto lawfully authorised, in writing. This, if it were a disposition, would meet that requirement.
15. The difficulty, of course, is in treating the document as effecting an unconditional disposition intended to take effect on signature. There are at least three matters which Mr. Chandler clearly had in mind in connection with - or, as he put it in the document, 'in consideration that' any disposition of his interest in the property at 47 Marlborough Close. First, that Mrs Valerie Chandler should agree that there had been a total breakdown in the marriage. Second, that she should agree to a divorce. And, third, that monies should be paid to Mr Kenneth Chandler following agreement by Mrs Valerie Chandler and their son, David Chandler. If those matters are treated as conditions, then, although it might be said that by the death of Mr. Kenneth Chandler the first two had been satisfied - in the sense that a decree of divorce had been made absolute without opposition - there is no material before the court to suggest that the third condition (agreement as to financial provision) has ever been satisfied. The documentation shows that the parties had not reached agreement on 6th June 1997 - and did not thereafter reach agreement - as to the financial provision to be made between them. In those circumstances, if the document of 6th June 1997 is to be treated as a conditional disposition, then the conditions have not been satisfied - and cannot now be satisfied, in the circumstances that Mr. Chandler is dead.
16. It is necessary, therefore, for Mr. Nichol to assert that the document of 6th June 1997 took effect as an immediate and unconditional disposition. If that assertion were made out, the effect would be that Mrs Valerie Chandler would have become the sole beneficial owner of the house on 6th June 1997, whether or not she subsequently agreed to a divorce. Questions of financial provision might arise in the ancillary proceedings; but they would, on that hypothesis, arise on the basis that the property had vested in her as sole beneficial owner on 6th June.
17. To my mind, that is an impossible construction to give to this document. It is clear that Mr. Chandler could never have intended that his wife would become the sole beneficial owner of the property whether or not she co-operated in an uncontested divorce. The document was brought into existence for the obviously sensible purpose of indicating that the husband was not going to advance a claim to share in the property if he could be satisfied on other matters. But it could not have been intended, as it seems to me, to effect an immediate and unconditional disposition. It follows that I would hold the Master correct on the point which he decided.
18. The difficulty which the case presents - as it seems to me - is in the Master's conclusion that the property was beneficially owned by the parties as tenants in common rather than as joint tenants. He does not spell out, in terms, a finding that the property was beneficially held in undivided shares rather than as joint tenants; but it is implicit in the declaration that he made that he must have taken the view that Mrs Valerie Chandler did not succeed to the beneficial interest by survivorship on the death of her former husband. That view can only be supported on the basis that this was a tenancy in common in equity rather than a joint tenancy.
19. The evidence as to purchase points in the other direction. The evidence suggests that the purchase monies were provided from joint funds - not from separate funds - and there is nothing to suggest any agreement between the parties to displace what would be the normal consequence of a purchase with joint monies. Nor is there evidence that a joint tenancy in equity was ever severed between the parties. It is to be remembered that a severance to be effective must, itself, be in writing - see section 56(2) of the Law of Property Act 1925.
20. Mrs Johnson (who appeared on behalf of the claimant, Mrs Clarke) seemed to suggest that the document of 6th June 1997 itself effected a severance. That is a contention which cannot be supported. The document recognizes that Mr. Chandler has a beneficial interest in the property but is silent as to what the nature of that beneficial interest is. It is equally consistent with the interest being an interest as joint tenant as with the interest being as a tenant in common. I can see nothing to suggest, on the material before the Master, that there had been a severance.
21. In those circumstances, the effect of the document of 6th June 1997 being inoperative to effect any disposition would be that the joint tenancy continued with the result that, on the death of Mr Chandler, Mrs Chandler, as the surviving joint tenant, would take the property by survivorship. As I have said, those matters were not explored before the Master because, as he thought, it was common ground that this was a tenancy in common. We have been told that no such concession was made, and is not now made. It follows, in my view, that, although the Master answered the particular issue which he addressed correctly, his order reflects the fact that he started from a position which may well be the wrong position. He started from an assumption of tenancy in common without any investigation or evidence to support that premise.
22. For my part, I think the right order to make in this case is to set aside the order which the Master made on 30th November 2001 and to declare that the document of 6th June 1997 did not itself effect any disposition of such equitable interest as Mr. Kenneth Chandler had in the property; but to remit the matter back to the Master for him to continue his inquiry by investigating the question whether this was, indeed, a tenancy in common or, as the evidence suggests, a joint tenancy.
23. MR. JUSTICE WALL: I agree.
24. LORD JUSTICE THORPE: I also agree. It seems to me plain that any financial dispute between the appellant and the deceased cried out for determination under the discretionary scheme within the family justice system. The route to such an end was terminated by the death of Mr. Chandler on 18th May. Unless the appellant concedes that she became entitled to all of the property under the law of survivorship, it seems to me obvious that an application should have been issued on her behalf under the Inheritance (Provisions for Family and Dependents) Act 1975 prior to 2nd March 1999; that is to say, six months after probate. Thereafter, her right to issue depended upon the discretion of the court.
25. It is a mystery to me how the dispute between the parties ultimately found its way into the Chancery Division, but there it remains, and the prospect they face is one of further proceedings and further costs which, ultimately, may come home as a charge in favour of the Legal Services Commission. They might be wise to consider mediation as an alternative to litigation. Since we are remitting this case for further inquiry, it is open to them to take advantage of the Court of Appeal's Alternative Dispute Resolution Scheme. I will request the Office to send letters of invitation to the parties so that they can give consideration to that alternative.
Order: Appeal allowed; matter remitted to the Master; permission to Mrs Valerie Chandler to seek an order under section 51(6) of the Supreme Court Act 1981 in relation to the costs of the appeal, such application to be made to a Master. (Order not part of the judgment of the court)