ISAAC TANTAMENI C. CHALI v LISELI MWALA (Single woman) (1997) S.J. 22 (S.C.)

FULL CASE

SAKALA, J.S delivered the Judgment of the Court:

This is an appeal by the Executor of the Will of the late Mwalla Mwalla against a judgment of the High Court varying the deceased’s Will.  The order appealed against is couched in the following terms:

1.         That the estate should be divided into two.  The house left by the deceased should not be sold but should continue to generate rentals which will continue to be divided between the three parties.  I order that half of the estate should be devolved to the deceased’s mother.  If she dies before the Applicant, the house should then be passed to the first child of the Applicant.  Should he die, then the house should be passed to the Applicant and her brother.

2.         The other half should devolve to the Applicant, her brother and her first child in the following proportions – 15 per cent for the Applicant, 15 per cent for her brother and 20 per cent for the first child of the Applicant. The Estate should be administered by Mr. Chali the Executor in consultation with Mr. Mbushi of Ndola Chambers.  I order costs to be borne by each of the parties.

HOLDING OF THE COURT BELOW

Brief Facts

The facts of the case are that, the deceased was not married up to the time of his death.  He had two children, a son and a daughter, the Respondent in this appeal and the Applicant in the Court below.  The deceased kept the Respondent in his custody and care from the time she was 11 years of age and also kept the brother up to the time of his death.  The Respondent is unmarried.  She has three children born out of wedlock. In addition to the two children, the deceased is survived by a mother; the sole beneficiary of the Will.

The Will was testated to on 21st January, 1996.  It was common cause that under the Will the deceased left no provisions for the Respondent and her brother.  It was further common cause that under the Will the deceased directed that in the event of his mother dying before him the Estate should devolve to his three surviving sisters namely, Grace Kabanda of Lusaka, Pamela Tembo of Mhangura in Zimbabwe and Mrs Margaret Chipoya of Kalulushi to own the Estate jointly and equally.  The deceased’s death was by way of suicide.

There was evidence by the Respondent that when she moved to her father’s house, he had carnal knowledge of her resulting in a pregnancy while she was still at school. She subsequently gave birth to a boy who is deaf and dumb.  According to the Respondent, she could not progress in her education because of the pregnancy.  She only completed grade eight. 

According to the Respondent, her father was not co-operative with her to continue with her education but instead organized a forged certificate in her name purporting to show that she had attained ‘O’ levels when in fact she did not.  According to the Respondent’s evidence, sometime in 1987, before she became pregnant, she had complained to her mother about her father’s involvement with her. Her mother reported the matter to Mpatamatu Police Station. The police interviewed him. 

The deceased, according to the Respondent, promised, in the presence of the police, to pay her K400,000.00 to set up a business. The Respondent further testified that on the day her father died, they were not on talking terms.  And when he was making the Will in issue, he only summoned a Security Guard and a House Worker to witness it.

She was not surprised that he left nothing for her. The Respondent testified in cross-examination that although she was then 27 years of age, she relied on her deceased father because of her low level of education which did not enable her to get good employment.  She is now working at the hospital as a cook where, according to her, her certificate is treated with suspicion.

The mother of the deceased, the sole beneficiary of the deceased’s Will, testified that she was the dependant of the deceased as much as a dependant of her other children and the three sisters of the deceased.  She explained that during the life time of the deceased, she used to stay with him once in a while and that he was responsible for her treatment. She further explained that she suffers from a heart problem. After the death of her son a sum of K10 million was taken from his estate for her treatment. She explained that she was prepared to look after the respondent and her children.

Observations of the Court Below

image shows observation glasses to emphasize the point of observation.

After reviewing the evidence before her, the learned trial judge made several observations, among them that this was a sad case because the evidence before her disclosed that the deceased, who did a most unnatural thing to his daughter, resulting in his daughter becoming pregnant, decided to completely disregard his responsibility, and that the conduct of the deceased was not only morally unacceptable but also legally reprehensible. She refused to accept a suggestion by the appellant’s counsel that the appellant had blackmailed the deceased by insisting that he was responsible for her first son.

According to the learned trial judge the applicant was right to insist that the deceased, who was heartless, had to live up to his responsibilities by at least establishing a business for her. The learned trial judge also pointed out that the Respondent was right to have reported the conduct of the deceased to the Police. It was also the learned trial judge’s observation that the respondent had become permanently disempowered and unable to rise to societal responsibilities

Turning to the issue of varying the Will, the learned trial judge reproduced Section 20 (1) of the Wills and Administration of Testate Estates Act No. 6 of 1989.  She then observed that she had jurisdiction to visit the Will and vary it by making reasonable provisions for the dependants.  She observed that the respondent and her children as well as her brother were treated like animals by the deceased.  She accepted the decision in the case of Diamond v The Standard Bank of South Africa Limited (Executors) and others which according to her decided that if a person has no other serious means of livelihood other than the deceased, that person is a dependant. 

She held that in terms of Section 3 of Act No. 6 of 1989, a wife, husband, child or parent are dependants at law, and that a child means a child born in or out of marriage or an adopted child, conceived but not yet born.  The learned trial judge was satisfied that the respondent, although aged 27 years and working, and her brother aged 25 years were dependant as well as the respondent’s first born child and the deceased’s mother.

On the question of the deceased not making reasonable provisions for the maintenance of the dependants and on whether hardship would be caused if no such provision were made, the court found that apart from the deceased’s mother, no reasonable provisos were made for the other dependants. On the authority of the decision in National Provincial Bank Limited and Others the learned trial judge held that the respondent be given K400,000 as a gift as promised by the deceased before he died. The court concluded by making the order set out above, the subject of this appeal.

Arguments on Appeal

In arguing the appeal before us, Mr. Chali advanced five grounds. He also informed the court that he was, in addition, relying on the submissions he made in the court below. 

Ground One

The first ground argued was that the learned judge erred by making orders providing for persons not parties to the action.  The gist of the argument submitted on this ground was that according to the originating notice of motion there were only two parties to the action, the appellant and the respondent, this position remained the same up to the conclusion of the trial. 

Counsel pointed out that while Order 14 Rules 1-5 of the High Court Rules Cap 50, and Order 15 Rule 4 of the White Book, 1995 edition provide for joinder of a party, the joinder has to be made before the trial of the action.  He submitted that due to the non-joinder of the persons other than the respondent, the learned trial judge was legally and effectively precluded from considering the interests of non-parties to the action. It was finally submitted on this ground that the orders made by the learned trial judge in relation to the Respondent’s child and the brother were wrong and ought to be struck out.

Ground Two

The second ground was that the learned trial judge’s orders requiring the appellant to administer the estate “in consultation with” the respondent’s advocate amounted to an appointment of an additional administrator not justified in the circumstances of the case. Counsel pointed out that there was no application or prayer in the originating notice of motion before the learned trial judge for the appointment of an additional executor or administrator.  Mr. Chali submitted that in these circumstances the order made by the learned trial judge that the appellant should administer the estate “in consultation with” the respondent’s advocate ought to be struck out.

Ground Three

The third ground was that the learned trial judge’s decision of varying the will was contrary to the letter and spirit of the provisions of the Wills and Administration of The Estates Act  No. 6 of 1989 and was unjustified in the circumstances of the case.  In arguing this ground Mr. Chali referred the court to the statutory definition of “dependant” and “child” as found in section 3 of Act No. 6 of 1989 and section 2 of the Affiliation and Maintenance of Children Act No. 5 1995

Counsel submitted that under these statutes the respondent was effectively excluded as a “dependant” on account of the fact that she was a working person with means of her own and also on account of her age given as 27 at trial.  Counsel pointed out that under section 20 (2) of Act No. 6 of 1989, matters for consideration before varying the terms of a Will are “children” under 18 years or are in school or disabled.  Counsel further pointed out that other important matters as provided under section 21 of the Act are the testator’s reasons for not making any particular provision for a dependant; the past present and future capital or income of such dependant; and the dependant’s conduct in relation to the testator. 

Mr. Chali submitted that on the evidence on record, reasons have been given why the deceased made the will in the manner he did, among them being the respondent being in employment, accommodated by her employers, and her own testimony of her alleged intimate relationship with her father and if true made it obvious as to what led to the testator’s death.

Counsel submitted further that the testator was blackmailed into his death by the respondent and therefore the respondent ought not to benefit from the deceased’s estate. It was Mr. Chali’s final submission on this ground that, all these matters although put before the learned trial judge, were not taken into account before the judge decided to vary the Will.

Ground Four

The fourth ground was that the learned trial judge’s orders as to the devolution and administration of the estate, including the order concerning the house, are not in the best interests of the beneficiaries of the estate.  Mr. Chali argued that should this court consider that the respondent ought to benefit from the said estate, it should then interfere with the extent of the interest to which the respondent ought to so benefit on account that the Respondent was in employment and on account of her conduct.  Counsel submitted that the interests of the respondent and her grandmother cannot be said to be at par.

Ground Five

The fifth ground related to the order of costs.  The gist of the submission on this ground was that the order will operate unfairly against the appellant.  Counsel contended that the learned trial judge’s order as to costs ought to have specifically provided for the appellant’s cost of action to be borne out of the estate because it is the duty of an executor to institute or defend actions to protect the interest of the estate if the institution or defence of the action is deemed reasonable. Mr. Chali urged the court to uphold the appeal and vary the findings and orders of the court below.

Opposing Counsel’s reply

In his brief reply, Mr. Mbushi submitted that under section 3 of Act No. 6 of 1989, the respondent and her deaf and dumb child as well as her brother qualify and are therefore entitled to reasonable provision under the will. He further submitted that the orders made by the learned trial judge were all reasonable. He also submitted that the other three beneficiaries namely, the sisters of the deceased were not destitute and the learned trial judge rightly excluded them from benefiting from the house.

Judgment on Appeal

General Comment on Observations deduced by the Court Below

In dealing with this appeal we have been very mindful of the fact that the matter was decided upon by one of our learned senior female judges, and involving a female applicant. We are, however, constrained to comment on some of the observations and findings made by the learned trial judge which in our considered opinion appear to have heavily influenced the learned trial judge in making the orders she did. Our observations will be based on some aspects of the evidence that was before the learned trial judge.

According to the learned trial judge this was a sad case because the evidence disclosed that the deceased did an unnatural thing to the applicant. While we accept that there was some evidence, for that matter from the respondent herself, the evidence was in our view not conclusive and not corroborated. Above all, there was also evidence that the respondent who is unmarried has two other children. The finding that the conduct of the deceased was not only morally unacceptable but also legally reprehensible was in our view not justified. 

On the available evidence it was not fair to the deceased, when he could not defend himself, to conclude that he was heartless. The observation that the respondent had become permanently disempowered and unable to rise to societal responsibilities was not supported by the evidence which clearly established that the respondent was working and is accommodated by her employers. The determination of whether the deceased’s Will had to be varied depended on an interpretation of section 20 (1) and 3 and 21 of Act No. 6 of 1989. But before dealing with the issues of interpretation it is necessary to dispose of the other grounds raised by counsel for the appellant.

Judgment on Ground One

One of the grounds argued by Mr. Chali related to parties to an action. He submitted that the inclusion of the respondent’s child and her brother in the deceased’s Will was wrong in law and should be struck out as not being parties to the action at any stage. Order 14 of Cap 50 provides for various situations of parties to an action. It provides for when a person can be made a party either at the instance of the person suing or being sued or at the instance of the court.  The court can also strike out a party where it is shown there is a misjoinder. The contention by Mr. Chali was that a person should be made a party to or if made a party be struck out from an action before the action is concluded. 

In the case of The Attorney General v Aboubacar Tall and Zambia Airways, the High Court made the Attorney General a party to the proceedings after the close of the defense, but before judgment, which had already been prepared in draft form, had been delivered.  This court upheld the learned trial judge on appeal. Very recently, this court struck out the Electoral commission as party to an election petition for  misjoinder before the hearing of the election petition in Mbikusita Lewanika and 4 Others v F.T.J. ChilubaS.C.Z./E.P. 3 & 4 of 1996.

We totally agree with Mr. Chali that according to the Rules of Practice governing joinder of parties and due to non-joinder of parties before trial of the action, other than the respondent, the learned trial judge was legally and effectively precluded from considering the interest of non-parties. The orders made by the learned trial judge in relation to the respondent’s child and brother were, in our view, wrong in law and are struck out. This ground of appeal therefore succeeds.

Judgment on Ground Two

The next ground argued by Mr. Chali was that the order requiring the appellant to administer the estate “in consultation with” the respondent’s advocates amounted to an appointment of an additional Administrator. The contention of Mr. Chali is that this remedy was not pleaded and not prayed for and must therefore be struck out.  We agree with counsel.  This order requiring the appellant to administer the deceased’s estate “in consultation with” the respondent’s advocates is struck out. This ground of appeal also succeeds.

Judgment on Ground Three

The ground on statutory provisions was that the variation of the Will was contrary to the letter and spirit of the provision of the Wills and Administration of Testate Estates Act No. 6 of 1989. 

THE LAW

The relevant Sections of that Act are 20(1) 3 and 21 (1) Section 20(1) reads as follows:

”20.(1) If, upon application made by or on behalf of a dependant of the testator, the court is of the opinion that a testator has not made reasonable provision whether during his life time or by his Will, for the maintenance of the dependant, and that hardship will thereby be caused, the court may, taking account of all relevant circumstances and subject to such conditions and restriction as the court may impose, notwithstanding the provisions of the Will, order that such reasonable provision as the court thinks fit shall be made out of the testator’s estate for the maintenance of that dependant.”

The language of the section is clear.  It does not suggest the rewriting of the Will by the court. The first consideration before varying a Will is that the court must be of the opinion that a testator has or has not made reasonable provision for the dependant in the Will. The second consideration is that the absence of or inadequacy of reasonable provision for the dependant in the Will would cause hardship.  The third consideration before making the reasonable provision is that the court may take into account all relevant circumstances.

Section 3 defines dependant to mean a wife, husband, child or parent. The age at which one ceases to be a child is not specified in the Act. But the age of a minor is given as a person who has not attained the age of 18 years. On the other hand section 20(2) (b) (iii) acknowledges that where the reasonable provision order provides for periodical payments, it shall provide for termination not later than, “in the case of a child, his attaining the age of eighteen years or upon leaving secondary school, or under graduate university or whichever is the later”. 

REITERATION OF COUNSEL’S SUBMISSION

Mr. Chali referred the court to section 2 of the Affiliation and Maintenance of children Act No. 5 of 1995 where “child” has been defined to mean a person below the age of eighteen years whether a marital or non-marital child from the statutory definition of “dependant” and child”. Mr Chali submitted that the respondent is effectively excluded from being a “dependant” on account that she is a working person with means of her own and on account of her age of 27 years as given at the trial. 

Mr. Chali also pointed out those matters for consideration as provided in section 20(2) of Act No. 6 of 1989 seem to concern themselves with a “child” under 18 years, or in school or disabled.  Counsel also drew the court’s attention to matters to be considered by a court when varying the Will as provided under Section 21 (1) of Act No. 6 of 1989.  Among these are: the testator’s reasons for not making any provision for a dependant; past, present and future capital or income of such dependant; and the dependent’s conduct. Mr. Chali submitted that all these matters were not taken into account or considered by the learned trial judge before varying the Will.

FINAL THOUGHTS ON GROUND THREE

We have anxiously examined the learned trial judge’s judgment and her considerations and findings. As already observed, the evidence from the respondent that the deceased made her pregnant seem to have heavily influenced the learned trial judge’s findings.  While she alludes to section 20 (1) of Act No. 6 of 1989, and cited it, she seems to have only been concerned with the issue of her jurisdiction “to visit the Will and vary it making reasonable provisions for the dependants”.  In our view the issue of jurisdiction was not in dispute.

With all the respect to the learned trial judge, it appears to us that she totally misapprehended the decision in Diamond v The Standard Bank of South Africa Limited (Executor) and Others.  According to her, the case dealt with the definition of dependant at law and her understanding of the case was that if a person has no other serious means of livelihood other than the deceased, that person was a dependant. 

This was an incorrect and unfair interpretation of the decision.  We have also visited that case.  The issue of dependant in that case never arose.  And it could not arise because the application was by wife and two children who were before the age of 18 years. The court in that case was only concerned with whether the provision made by the deceased was reasonable. In other words, the deceased made provisions for his wife but she complained that it was not reasonable.  Hence the court varied it by increasing it.

We are satisfied that on the evidence as a whole, the learned trial judge in the present case, did not apply the proper principles of law and her findings were not supported by a proper approach to the evidence. Consequently, her conclusions could not be correct and cannot be supported. The ground based on the interpretation of statutory provisions also succeeds.

Judgment of Ground Four

The other ground not related to the interpretation of the Statutes relates to orders of the devolution and administration of the estate of the house.  Counsel urged the court to interfere with the extent of the interest to which the respondent ought to benefit if the court considers that she ought to benefit.  Counsel argued that on the evidence that she is employed, and the evidence as to her conduct, her interest and those of her grandmother cannot be said to be at par.  While we agree with this submission it is our considered view that success or failure of this ground depends on the question of whether the Will should or should not be varied.

Judgment on Ground Five

The other ground argued related to costs. The gist of the submission by counsel was that to order costs against the appellant operates unfairly because it is the duty of any executor to institute or defend action against the estate if the institution or defense of an action is deemed reasonable.  Counsel submitted that the costs of the action should be borne out of the estate. We agree with counsel. The proper order should have been that costs be borne out of the estate. This ground of appeal also succeeds. 

Final Conclusive words

Our conclusion in this appeal which is based on the law as it stands may appear morally hard. But it must be recognized that section 20 Act No. 6 of 1989 is a departure from the long standing recognition of unfettered right of disposition by the testator of his property. This departure is a limited one as it only confers on the court a jurisdiction to depart from the dispositions of a testator by providing reasonable provision for certain of his dependants if it is of the opinion that he had not done so himself. The court’s jurisdiction to make reasonable provision for the dependant only arises if it is of the opinion, that it is satisfied, that such provision has not been made by the testator.

For the reasons we have given in dismissing the ground based on statutory provisions and the other grounds, we are satisfied that the respondent is in law not covered by the definitions of “dependant” or “child”.

The ground of appeal based on the interpretation of statutory provisions also succeeds.  We therefore allow this appeal.  All the orders by the learned trial judge are set aside.  We also set aside the order relating to a gift of K400, 000.00 which in our view was not proved. The costs of this appeal and in the court below will be borne by the estate.

Appeal Allowed.

Commentary

Due to the considerable length of this case, a commentary will be reproduced in another post.

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Bernard v Josephs (1982) 3 ALL ER 162 CA

Full case:

LORD DENNING Master of the Rolls:

Brief History

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 thirty.  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.   They 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 installments.  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 quarreled.  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 the payment of the installments. Both go out to work.  They pay the outgoings out of their joint resources. One paying for the food and housekeeping while the other paying the mortgage installments.  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 Section 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-section (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 section 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. 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 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 the 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 section 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):

‘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 maybe to other relationships too …  In 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 realized, 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 afterward 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 section 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 cases. 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 section 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 realized for cash.  That was emphasized 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.’

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 installments 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 installments 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 installments 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 installments (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.