[PROBATE DIVORCE & ADMIRALTY DIVISION]

COOK v. COOK.

Husband and Wife - Settlement - Variation - Meaning of "settlement" - Purchase of house for matrimonial home - Conveyance in name of husband only - Wife contributing towards purchase price - Whether a post-nuptial settlement - Matrimonial Causes Act, 1950 (14 Geo. 6, c. 25), s. 25 - Settled Land Act, 1925 (15 & 16 Geo. 5, c. 18), s. 117 (1) - Law of Property Act, 1925 (15 & 16 Geo. 5, c. 20), s. 205 (1).

Whilst a husband and wife were living together, a house was purchased for use as the matrimonial home. Both parties contributed towards the purchase price, but the property was conveyed into the name of the husband only. Later, the wife, having been granted a decree nisi of divorce against the husband, applied to the court for an order under section 25 of the Matrimonial Causes Act, 1950, on the basis that the property was the subject of a post-nuptial settlement. The registrar held that there was no post-nuptial settlement and dismissed the application. On appeal by the wife:-

Held, (1) that since both parties had contributed to the purchase price, and the conveyance had been in the name of the husband only, they were equitable tenants in common, the husband holding the property subject to a resulting trust in favour of the wife and subject to a statutory trust for sale.

(2) That the conveyance of the property to the husband, together with the oral arrangement between the parties that the wife should contribute to the purchase price, constituted a settlement; as there was a nuptial element in the whole arrangement, it constituted a post-nuptial settlement within section 25 of the Matrimonial Causes Act, 1950, just as if the transaction had been expressed in a document. Accordingly, the registrar's order would be set aside and the matter remitted to him to determine what variation, if any, should be made in the settlement.

Bull v. Bull [1955] 1 Q.B. 234; [1955] 2 W.L.R. 78; [1955] 1 All E.R. 253, C.A. and Brown v. Brown [1959] P. 86; [1959] 2 W.L.R. 776; [1959] 2 All E.R. 266, C.A. applied.

APPEAL from the registrar (Mr. Registrar Kinsley).

The parties were married in June, 1947. There were two children of the marriage. On November 22, 1960, the wife was granted a decree nisi of divorce on the ground of the husband's cruelty. Subsequently, the wife applied by summons under section 25 of the Matrimonial Causes Act, 1950,^* for an order

[Reported by D. R. ELLISON, Barrister-at-Law.]

* Matrimonial Causes Act, 1950, s. 25: "The court may after pronouncing a decree for divorce or for nullity of marriage inquire into the existence of ante-nuptial or post-nuptial settlements made on the

relating to the dwelling-house at 25, Tudor Close, Dartford, in the County of Kent, the former matrimonial home, on the basis that it was the subject of a post-nuptial settlement. The house was purchased on January 29, 1957, for the sum of £2,350, for the purpose of a matrimonial home. The sum of £350 was paid in cash, the balance of £2,000 being borrowed from an insurance company on the security of a mortgage. The husband took out two policies of assurance on his own life, each in the sum of £1,000, which were held by the insurance company as collateral security. On completion of the purchase the house was conveyed into the name of the husband. The registrar held that the house was never the subject of a post-nuptial settlement and dismissed the summons. The wife appealed. The appeal was heard in chambers and reserved into open court for judgment.

R. J. A. Temple Q.C. and Elaine Jones for the wife.

K. Bruce Campbell for the husband.

Dec. 21. PHILLIMORE J. referred to the facts and continued: The registrar found as a fact that the wife "contributed towards the purchase price." There is some doubt as to how much she contributed, but it was "not less than £145." Although the husband at one time described the wife's contribution as a loan, in his affidavit in these proceedings he himself describes it as a contribution towards the purchase of the house.

There is no doubt that if the house had been conveyed into the joint names of husband and wife a settlement would have been created: Smith v. Smith¹ and Brown v. Brown.² Does it make any difference if it is conveyed solely to the husband? The registrar thought it did and that there was no settlement created. It is, of course, well settled that where two persons advance purchase money jointly and the purchase is taken in the name of one only there is a resulting trust in favour of the other as to so much of the money as that other advanced; see Snell's Principles of Equity, 24th ed., p. 150. An instance of that occurred

parties whose marriage is the subject of the decree, and may make such orders with reference to the application of the whole or any part of the property settled either for the benefit of the children of the marriage or of the parties to the marriage, as the court thinks fit, ..."

1 (1945) 61 T.L.R. 331; [1945] 1 All E.R. 584.

2 [1959] P. 86; [1959] 2 W.L.R. 776; [1959] 2 All E.R. 266, C.A.

in Bull v. Bull.³ In that case, a son purchased a house jointly with his mother to form a home for them both. He contributed the greater part of the purchase price and the conveyance was made to him. Following the son's marriage, differences arose between the mother and the daughter-in-law and the son then gave his mother notice to quit and sued for possession. The county court judge dismissed the action and the son appealed. The appeal was dismissed, the Court of Appeal holding that the mother was an equitable tenant in common with the son and that, until the house was sold, each of them was entitled, concurrently with the other, to possession of the premises, and that neither of them was entitled to turn the other out. Denning L.J., in the course of his judgment, said⁴: "The judge has found that the mother did contribute a substantial amount towards the house and that she did not intend to make a gift of that money to her son. There was therefore no presumption of advancement, but a resulting trust in her favour. Furthermore, the judge has found that, when the house was bought, it was the intention of both mother and son that it, although taken in the son's name, should be a home for them both. He has held that in these circumstances the son cannot turn the mother out now as if she was a trespasser; and that his only remedy is by application to a court of equity. The son appeals to this court.

"Similar circumstances must often arise in families, but strangely enough there is no authority on the point. The son is, of course, the legal owner of the house; but the mother and son are, I think, equitable tenants in common. Each is entitled in equity to an undivided share in the house, the share of each being in proportion to his or her respective contribution. The rights of equitable tenants in common as between themselves have never, so far as I know, been defined; but there is plenty of authority about the rights of legal owners in common. Each of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account. If one of them should go so far as to oust the other he is guilty of a trespass: see Jacobs v. Seward.⁵ Such being the rights of legal tenants in common, I think that the rights of equitable owners in common are the same, save only for such differences

3 [1955] 1 Q.B. 234; [1955] 2 W.L.R. 78; [1955] 1 All E.R. 253, C.A.

4 [1955] 1 Q.B 234, 236.

5 (1872) L.R. 5 H.L. 464, H.L.

as are necessarily consequent on the interest being equitable and not legal. It is well known that equity follows the law; and it does so in these cases about tenants in common as in others. ... I realise that since 1925 there has been no such thing as a legal tenancy in common: see section 1 (6) of the Law of Property Act, 1925. All tenancies in common now are equitable only and they take effect behind a trust for sale: see section 36 (4) of the Settled Land Act, 1925. Nevertheless, until a sale takes place these equitable tenants in common have the same right to enjoy the land as legal tenants used to have."

The husband and wife in the present case are likewise equitable tenants in common, the husband holding the house subject to a resulting trust in favour of his wife and subject to a statutory trust for sale.

I have already referred to Smith v. Smith,⁶ where the matrimonial home was conveyed into the joint names of husband and wife, and to Brown. v. Brown,⁷ a similar case. In those cases conveyances recited that the parties were trustees for sale and described them as joint tenants. The position was thus summarised by Hodson L.J. in Brown v. Brouwn⁸: "The position is, we think, made clear by the relevant sections of the Law of Property Act, 1925, ss. 23-38, the effect of which is summarised in the judgment of Denning J. in Smith v. Smith⁹ in the following passage: 'The result was that the husband and wife held a joint tenancy of the legal estate in the land (which could not be severed) and an equitable joint tenancy in the income of the land pending sale and of the proceeds eventually arising from the sale (which could be severed by taking the appropriate steps). ... So long as the husband and wife were living in the house, they, of course, shared the occupation and acquiesced in a postponement of sale, and if they had continued in that way until one died the survivor would take the whole legal and beneficial interest in it. If they together let or sold the house, either of them could sever the equitable joint tenancy in the income or proceeds, whereupon each would be entitled to one half. No letting or sale could, however, be effected by one without the consent of the other, except by order of the Court of Chancery, which would consider whether in the particular circumstances it was right and proper that such an order should be made.' Neither party has given any

6 61 T.L.R. 331.

7 [1959] P. 86.

8 Ibid. 90.

9 [1945] 1 All E.R. 584, 586.

notice of severance, and so long as the power of sale is postponed, and there is no severance, the joint tenancy continues until one dies and the other takes the whole legal and beneficial interest on survivorship.

"Without, therefore, resorting to the liberal construction of the word 'settlement,' which has been so much discussed in the authorities, it is, in our judgment, right to regard the conveyance here in question as a settlement by the parties upon themselves as trustees which by its terms created legal and beneficial interests such as to give it the attributes of a settlement. We respectfully agree, therefore, with that part of the judgment of Denning J. which deals solely with the instrument under his consideration."

Mr. Campbell objects that in the present case the conveyance contains no such express provision since it is a simple conveyance to the husband, and whilst conceding the presumption in favour of the resulting trust, he asserts that there is no settlement because, he says, a settlement requires a document.

What is a settlement for the purpose of section 25 of the Matrimonial Causes Act, 1950? The Act itself does not define it. In Halsbury's Laws of England, 3rd ed. (1960), vol. 34, at p. 428, there is the following broad definition: "Parliament has from time to time defined the word 'settlement' for the purposes of particular statutes, but there is no generally accepted definition of the word. It may, however, be defined as any disposition of property, of whatever nature, by any instrument or number of instruments, whereby trusts are constituted for the purpose of regulating the enjoyment of the settled property successively among the persons or classes of persons nominated by the settlor. The term 'settlement' has, however, two different senses in law; it can mean either the documents which express the dispositions that are the settlement, or the state of affairs which the documents bring about."

The Law of Property Act, 1925, s. 205 (1) (xxvi), adopts the definition in the Settled Land Act, 1925, which is to be found in section 117 (1) (xxiv), and reads as follows: "'settlement' includes an instrument or instruments which under this Act or the Acts which it replaces is or are deemed to be or which together constitute a settlement, and a settlement which is deemed to have been made by any person or to be subsisting for the purposes of this Act."

Here is a state of affairs in which this husband is deemed to hold the land subject to a trust in favour of his wife. So long as

the house is retained she is entitled to enjoy it. On its sale he must account to her in respect of the proceeds. The position holds all the normal attributes of a settlement.

In Celestine De Nicols v. Curlier¹⁰ the House of Lords dealt with the position where two people married in France, and the question was whether thereupon the spouses became subject under the law of France to the system of community of goods. In dealing with the problem in that case Lord Macnaghten said¹¹: "This is the case of a French marriage with a settlement prescribed and constituted by the law of the land and followed by naturalisation in a foreign country." In other words, he was describing as a settlement the rights which parties were deemed to acquire in each other's goods on marriage.

In my judgment, the settlement is deemed to have been made. In this case, to adopt the definition of the Settled Land Act, 1925, it arises from the conveyance together with the oral arrangement for contribution. That arrangement and the conveyance resulting from it are deemed by law to render the husband a trustee for his wife. Since there is a nuptial element in the whole arrangement in that this was to be the matrimonial home, it is, I think, a post-nuptial settlement within the meaning of section 25 of the Matrimonial Causes Act, 1950, just as it would be with a trust imposed by law and which is deemed to arise if this transaction had been expressed in a document. I therefore send the matter back to the registrar to consider what variation, if any, should he made in this post-nuptial settlement.

Solicitors: Frederick Weil; Denis Hayes for Hewitt & Co., Dartford.

10 [1900] A.C. 21.

11 Ibid. 34.