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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 >> Midland Bank Plc v Cooke & Anor [1995] EWCA Civ 12 (07 July 1995) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1995/12.html Cite as: [1995] 4 All ER 562, [1996] 1 FCR 442, [1995] 2 FLR 915, [1995] EWCA Civ 12

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BEDFORD COUNTY COURT
(HIS HONOUR JUDGE HAMILTON)

		Royal Courts of Justice Strand London WC2
		7th July 1995

Friday 7th July 1995

LORD JUSTICE WAITE: This appeal, concerning the disputed beneficial interests in a matrimonial home, was heard during the week in which the Law Commission published its Sixth Programme of Law Reform. Item 8 of the Programme recommends an examination of the property rights of home-sharers. The Report comments that "the present rules are uncertain and difficult to apply and can lead to serious injustice." Though that was a reference to the problems of unmarried home-owners, the rights of married occupiers can be equally problematic - as the present case shows - when the claims of third parties such as creditors or mortgagees become involved. The economic and social significance of home-ownership in modern society, and the frequency with which cases involving disputes as to the property rights of home-sharers (married or unmarried) are coming before the courts, suggest that the Law Commission's intervention is well-timed and has the potential to save a lot of human heartache as well as public expense.

Mr and Mrs Cooke were married on 31 July 1971. After the wedding they moved into their new home "Thatchatty, 58 High Street, Abbotsley Cambridgeshire (to which I shall refer as "the property"). On 1 July 1971, shortly before the marriage, Mr Cooke, who is the first defendant in the proceedings but has played no part in the current appeal, had taken a conveyance of the property in his sole name. He was then 19 years of age and his fiancée was a little older. The purchase price was £8500, of which £6540 was provided by way of a mortgage from the Leeds Permanent Building Society. The balance of the purchase price and costs was paid in cash provided as to £1100 by Mr Cooke's parents, and as to the remainder by a contribution in the region of £1000 by Mr Cooke out of his own savings. The mortgage was of the conventional Building Society type providing for repayment by monthly instalments of capital and interest.

Mrs Cooke, who is the second defendant in the action and appellant in this appeal, was a student teacher at the time of the wedding and qualified soon afterwards. Virtually from the outset husband and wife were both working - she as a teacher and he as a self-employed proprietor of a business selling kits for the making of lampshades. Mrs Cooke did not make any direct payments of mortgage instalments but was discharging other household outgoings out of her earnings. She remained in work, although there were brief spells of part-time working when their three children were born in 1972, 1974 and 1984 respectively.

On 27 September 1971 a second mortgage was taken out on the property in favour of the National Westminster Bank. It was executed jointly by Mr and Mrs Cooke (who were described in it as together constituting the mortgagors) to secure their overdraft with the Bank. This second mortgage was redeemed on 18th May 1972.

The Building Society Mortgage was replaced from 26 June 1978 by a general mortgage of that date in favour of the Midland Bank ("the Bank") who are plaintiffs in the proceedings and Respondents to this appeal. This mortgage (which I shall call "the mortgage") was granted by Mr Cooke in his sole name and charged the property to the Bank to secure repayment on demand of the business overdraft of Mr Cooke's company.

From the outset of their occupation the wife devoted much time and energy to the improvement of the house and garden. The judge's finding about that was:

"Quite plainly the wife was engaged in a considerable amount of work on the property, with or without the assistance of contractors, on the interior of the property and in particular the garden. The works she has described in her evidence - and I do not propose to go through it in detail - could be described as falling into the three categories of redecoration, alterations/improvements and repair."

It is common ground that the evidence which the judge was there summarising included undisputed evidence that she had paid a number of contractors' bills out of her own earnings. It will be convenient to refer to Mrs Cooke's efforts in this respect as "the maintenance and improvement contribution".

The Court of Appeal decision in Williams & Glyn's Bank v Boland (later to be affirmed on appeal to the House of Lords in [1981] AC 487) was reported in April 1979. Soon afterwards the Bank requested Mrs Cooke to sign a form of consent to any present or future right or interest which she might have in the property being postponed to the Bank's security under the mortgage. I will refer to that as "the consent form". She did so sign it on 12th July 1979 at a meeting with officials of the Bank attended by her husband and herself. The judge's findings as to what transpired at that meeting were firstly that Mr Cooke stated to her in front of the Bank officials that she had no alternative but to sign the consent form, and secondly that she was visibly upset by the whole transaction.

On 28 May 1981 Mr and Mrs Cooke together executed a second charge on the property to secure their liability under a joint guarantee they had executed as security for a business loan to Mr Cooke's company.

In about 1984 Mrs Cooke brought Married Womens Property Act proceedings against Mr Cooke in the county court in which an order was made by consent declaring that the property was held by the spouses jointly. That order was recited in a Conveyance of 12th March 1985 made between the spouses and transferring the property into their joint names, holding beneficially as tenants in common.

On 15 July 1987 the Bank brought these present proceedings against Mr and Mrs Cooke as first and second defendant respectively in the Bedford County Court claiming payment of the sum of £52,491 then claimed to be due under the mortgage and possession in default of payment.

On 4 November 1987 Mrs Cooke served a defence in the action. It contained firstly a plea that the mortgage was statute-barred, secondly a claim that her signature to the consent form had been procured to the knowledge of the Bank by Mr Cooke's undue influence, and thirdly an assertion that she was entitled to a one half beneficial interest in the property over-riding any interests of the Bank under the mortgage. She counterclaimed for declarations against the Bank that she was the joint legal owner of the property and entitled to one half of the beneficial interest free of any claim or interest of the Bank. The Bank joined issue by their Reply and Defence to Counterclaim of 25 January 1988.

It does not appear that any defence was served by Mr Cooke, who by this time was living apart from his wife, she remaining in occupation of the property with the children. The litigation moved extremely slowly, but eventually the action was listed for trial before Judge Hamilton in the Hitchin County Court on 5th February 1992. Mr Cooke attended in person and protested that he had not been given notice of the hearing, of which he had learned only the previous day when Mrs Cooke told him about it. There is no transcript of the exchanges which then took place, but it seems clear that the judge, who was understandably alarmed at the prospect of further adjournment of proceedings that had taken so long to come trial, took the view that the action could be dealt with in two bites - with the issues between the Bank and Mrs Cooke being tried at once, and those between the Bank and Mr Cooke on some future occasion at which Mr Cooke could be represented. In the meantime Mr Cooke would be allowed to attend the first stage as a party in person.

The primary issue before the court was the allegation of undue influence upon the signing of the consent form, and the greater part of the evidence was devoted to that issue. Evidence was also given, however, by Mr and Mrs Cooke as to the terms on which the property was first purchased. It was common ground that at the time of purchase there had been no discussions between them as to the name in which the property should be taken, and both stated positively that there had been no discussion and no agreement as to how the property should be owned beneficially. It was also common ground that they each had their own separate bank accounts, that there was no joint account, that Mr Cooke made the payments on the Building Society mortgage until it was redeemed and replaced by the mortgage, and that Mrs Cooke made no savings from her earnings as a teacher, but applied them in the payment of household and decoration bills. It has been common ground at this appeal hearing that although it is undisputed that Mr Cooke paid the mortgage instalments under the original Building Society mortgage and also some of the household bills and that Mrs Cooke paid other bills out of her own earnings, there was insufficient evidence before the judge as to the earnings of the parties and the amount of the outgoings to enable any conclusion to be drawn as to whether (and if so to what extent) Mr Cooke's ability to pay the instalments under the Building Society mortgage was dependent upon the contribution made by Mrs Cooke to other outgoings.

Mr Cooke gave evidence about the contributions to the original purchase price. The relevant passage from his evidence in chief is worth quoting, not only because a submission is founded upon it, but because it provides a vivid illustration of the difficulties which these cases pose for the honest recollections of witnesses and the barrenness of the terrain in which the judges and district judges who try them are required to search for the small evidential nuggets on which issues as to the existence - or the proportions - of beneficial interest are liable to depend.

Q Can you help me with this then? What were the source or sources of the cash deposit?

A I put in about £900 or £1000 from my savings and my mother and father gave us a wedding gift of £1000 towards the house.

Q You say that it was given by your parents to "us". By "us" you mean.....?

A Well, my dad gave it to me, yes.

Q For what purpose?

A Well, to buy the house, help me with the deposit.

Q You referred to it being in the context of the wedding. What do you mean by that?

A Well, we were getting married in July and he gave it towards the deposit. Because the house was quite old the maximum mortgage we could get £6000.

Q You have referred to it earlier in the context of it being a wedding - the money from your father being a wedding gift.

A Well, I mean, he didn't wrap it up or anything but.....

Q Well?

A .....it was their way of --- because Jane's did the wedding and everything.

Q What, Jane's parents paid for the wedding.

A Yes.

Q And your parents.....?

A Put, yes, £1000 towards the house

Q Right. So far as the actual purchase is concerned, we see that it was taken in your sole name - your wife does not appear on the title deeds?

A No.

Q So far as you were concerned, at the time you were signing the conveyance, going through the legalities with the solicitors, whose house did you think this was to be once the transaction was completed?

A Well it was very similar to sort of recalling what was happening 10 or 12 years ago. To be truthful, I can't actually remember, but I always thought of it as "our house". It was just because I did.....Jane was at teacher training college in Eastbourne .....

Q Do you remember anything in relation to the building society and obtaining the mortgage - any problems which arose there?

A Only in respect of when I told them that Jane was a student and they said they didn't want that on the form, basically, because she had no income, you see, so.....

Q Do you now have any recollection of discussing before acquisition or at the time of acquisition or at the time you actually got married with your wife the precise arrangements in relation to the house?

A Not really, no. We were just happy, I suppose, you know.

He was not cross-examined on that evidence. The judge also heard evidence from Mrs Cooke as to the maintenance and improvement contribution, on which she was not challenged. She too agreed in evidence that there had been no discussion or agreement at the time of acquisition as to the terms on which the property was to be owned.

In his judgment delivered on 10th February 1992 Judge Hamilton dealt as follows with the initial contributions to the purchase price.

"The husband, however, told me that of the £2,000 cash that was required for the deposit he put in £900 and his parents had given -- he first used the word "us" - the £1,000 to make up the rest. He went on to say, "My father gave the money to me to buy the house. My wife's parents paid for the wedding. My parents put £1,000 towards the house as a present."

What am I to make of that? I am concerned, of course, with events that happened over 20 years ago, with a wife who, hardly surprisingly, cannot remember any of the details and with two parties who, equally unsurprisingly, gave no thought whatsoever to the legal effect of what they were getting into.

The husband, however, said this in his evidence: "I can't remember whose house it was meant to be but I always thought it was our house."

In the normal course of events, if parents make gifts by way of wedding presents to their offspring, those gifts are considered to be gifts jointly to the husband and wife. As a matter of practice it has become the position - and certainly was when Married Women's Property Act cases had to be thrashed out item by item under voluminous schedules - that, subject to adjustment, those specific items which could be identified as having come from one set of parents rather than the other, should remain after the marriage had broken up in the possession of the person whose parents had so contributed. No such rule, however, applies to money.

I can see here, assuming that I accept the husband's evidence, which I do, no reason to depart from the usual assumption that this gift made by his parents towards the purchase of a house in which he and his fiancée were to live, being their contribution towards what can be loosely described as the overall part of the wedding, should be regarded as otherwise than a joint gift of money to the husband and the wife. If her share of that £1,000, call it £500, then went into the overall sum it would appear of about £8,000, then, in my judgment, she plainly acquires an equitable interest which, at the date of acquisition of the property, bears the relationship of £500 to £8,000. The precise amount may very well have to be decided at a later stage, but there is no question but that such a proportion amounts to a substantial interest in the property which is certainly otherwise than De minimis, and accordingly I hold that she had, upon the purchase of that property, an equitable interest in it."

That was followed by the finding (already quoted) as to Mrs Cooke's maintenance and improvement contribution. The judge held that it did not amount to a contribution to the purchase price, with the result that her beneficial interest depended upon her monetary contribution (i.e. her half share of the joint wedding present from her in-laws) alone. There can be no doubt that this holding was entirely justified by the authorities, ranging from Pettitt v Pettitt [1970] AC 777 to Lloyds Bank v Rosset [1991] 1 AC 107.

The remainder of the judgment was devoted to the issue of undue influence, on which the judge found in favour of Mrs Cooke, holding that the consent form was not binding on her and that her equitable interest took priority over the claims of the Bank. He then dealt briefly with the issue of limitation, on which he found in favour of the Bank that its claim was not statute-barred.

At the end of his judgment the judge indicated that he expected the adjudication of the current proportions of the spouses'

beneficial interests to be dealt with at the second stage of the hearing, when the husband would have an opportunity of professional representation. That was supported by Mr Gore, counsel for Mrs Cooke. Mr Bergin, counsel for the Bank, submitted, however, that the judge should make a ruling on the proportions there and then, on the ground that he had heard all relevant evidence, made all necessary findings and heard submissions from counsel for the only two parties who were affected by the proportions, namely the Bank and Mrs Cooke (it being common ground that the mortgage debt had by then reached a figure which far exceeded the value of any beneficial interest that might be asserted on behalf of the husband). The judge, acceded to that submission, no doubt taking the realistic view that since he already had the husband before him as a party and a witness, and that Mr Cooke's interests in asserting the highest possible beneficial interest in the property were identical to those of the Bank seeking to enforce its charge, it would be pointless to postpone a decision as to current entitlement.

The judge accordingly proceeded to announce his concluded finding in regard to the proportions of beneficial entitlement. He held that Mrs Cooke was entitled to a beneficial interest of 6.47% of the property, that being the proportion born by her half of the wedding present (£550) to the total cost (£8500). It is implicit in that finding (though the judge did not spell it out in so many words) that he did not regard any other aspect of the course of dealing between the parties - whether it be the maintenance and improvement contribution, or the assumption of mortgage liability, or the sharing of household expenses or any other factor - as capable of having any influence at all upon the quantification of the current interests of husband and wife.

The Judge's final order accordingly dismissed the Bank's claim to possession as against Mrs Cooke, adjourned the Bank's claim against Mr Cooke for hearing at a later date, and declared (on Mrs Cooke's counterclaim in the action) that she had a beneficial interest in the property amounting to 6.47%.

From that Order Mrs Cooke now appeals to this court, contending that the judge, having correctly found that she had a beneficial interest, adopted the wrong approach to its quantification; and the Bank cross-appeals, contending that the judge ought to have held that Mrs Cooke had no beneficial interest at all. There is no cross-appeal by the Bank against the finding of undue influence in respect of the consent form. Mr Cooke has played no part in the appeal.

In a clear and able argument, Mr Bergin, for the Bank, contends that:

(1)The evidence did not establish that the contribution made by Mr Cooke's parents to the original purchase price of the property included any element of gift to Mrs Cooke: it was a present to their son alone (this is the basis for the cross-appeal).

(2)If that be wrong, and the parents' contribution is to be regarded as a gift to the spouses jointly, it is conceded that Mrs Cooke would fall on that footing to be treated as a party who has contributed directly to the purchase price; but her beneficial interest is restricted, on basic principles of the law of resulting trusts, to the proportion born by her cash contribution (£550) to the price of the property (£8500). All her subsequent conduct, in the admitted absence of any further direct contribution to the purchase price on her part, is irrelevant, and can have no retrospective effect upon the quantification of her share.

(3)If (contrary to (2)) subsequent conduct is prima facie capable of being taken into account as evidence from which the court could infer an implied agreement between the spouses that the proportions in which they share beneficial ownership should be different from the strict proportions resulting from direct contribution to the purchase price, no such agreed intention can be inferred in the present case because both spouses have stated on oath that they neither made nor intended any agreement - and the court cannot impute an agreement to parties who have expressly stated that there never was one.

I will deal separately with those submissions.

A WAS THERE A GIFT BY MR COOKE'S PARENTS TO BOTH SPOUSES?

The judge was in my view (rejecting Mr Bergin's first submission) fully entitled, on the evidence which I have quoted, to hold that there was. In a case where the bride's parents were paying for the wedding and reception and the bridegroom's parents were providing a contribution to the purchase price of the matrimonial home, it would not only be sensible to draw the inference that the bridegroom's parents intended to make a present to them both of the monies which were to be applied in the purchase, but highly artificial to draw any other inference.

BIS THE PROPORTION OF MRS COOKE'S BENEFICIAL INTEREST TO BE FIXED SOLELY BY REFERENCE TO THE PERCENTAGE OF THE PURCHASE PRICE WHICH SHE CONTRIBUTED DIRECTLY, SO AS TO MAKE ALL OTHER CONDUCT IRRELEVANT?

In contending that it is, Mr Bergin submits that:

(a) it is now well settled that in determining (in the absence of evidence of express agreement) whether a party unnamed in the deeds has any beneficial interest in the property at all the test is the stringent one stated by Lord Bridge of Harwich in Lloyds Bank v Rosset 1991 1 AC 107 at 133:

"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".

(b) by parity of reasoning, in cases where a direct contribution has been duly proved by the partner who is not the legal owner (thus establishing a resulting trust in his or her favour of some part of the beneficial interest) the proportion of that share will be fixed at the proportion it bears to the overall price of the property. Although the proportion may be enlarged by subsequent contribution to the purchase price, such contributions must be direct - i.e. further cash payments or contribution to the capital element in instalment repayments of any mortgage under which the unpaid proportion of the purchase remains secured. Nothing less will do.

Mr Bergin derives support for that submission from Springette v Defoe 1992 2 FLR 388. That was a case where cohabitees of mature years bought in their joint names (so there was no dispute that they both had some beneficial interest) a council house of which one them had been the sitting tenant. After crediting the former tenant with the discount in the purchase price attributable to her rights as a sitting tenant and taking account of the contributions to that price which each partner had made in cash, the proportions of their initial contributions stood at 75% - 25%. Part of the purchase price was provided by a mortgage, and by express agreement the parties contributed to the mortgage installments equally. The judge held that the beneficial interests were equal. He was overruled on appeal, where it was held that the parties were beneficially entitled in the proportions of 75% to 25%.. Dillon LJ said (at page 391) in regard to the common intention to be imputed to the parties, in the absence of express agreement, as to what their precise shares should be:

"The common intention must be founded on evidence such as would support a finding that there is an implied or constructive trust for the parties in proportions to the purchase price. The court does not as yet sit, as under a palm tree, to exercise a general discretion to do what the man in the street, on a general overview of the case, might regard as fair.....

Since, therefore, it is clear in the present case that there never was any discussion between the parties about what their respective beneficial interests were to be, they cannot, in my judgment, have had in any relevant sense any common intention as to the beneficial ownership of the property......The presumption of resulting trust is not displaced."

That decision has to be compared with McHardy and Sons v Warren [1994] 2 FLR 338, a case in which (as here) it became necessary to quantify the interests of husband and wife on a strict equitable basis because of third party claims against the property. The purchase of the first matrimonial home was (again as in this case) partly financed by a contribution from the husband's parents, but with the difference that in that instance the husband's parents paid the whole of the deposit (using that term in the sense of the net purchase price not covered by a mortgage) for the property, which was registered in the husband's sole name. The two subsequent homes successively purchased by the parties out of the net proceeds of sale of the former home were similarly taken in his name alone. The husband then executed a charge on the current home to secure his indebtedness to the plaintiffs who were trade creditors. In proceedings by the plaintiffs against both husband and wife to enforce their charge, the plaintiffs asserted that the wife either had no beneficial interest or at most an interest equivalent to 8.97% representing the proportion that half the initial deposit of £650 bore to the total purchase price of the first home. The judge rejected that claim, holding that the parties were beneficially entitled in equal shares. He was upheld on appeal. It does not appear from the law report that Springette v Defoe was cited, but the presiding Lord Justice was again Dillon LJ who said (at p 340):

"To my mind it is the irresistible conclusion that where a parent pays the deposit, either directly or to the solicitors or to the bride and groom, it matters not which, on the purchase of their first matrimonial home, it is the intention of all three of them that the bride and groom should have equal interests in the matrimonial home, not interests measured by reference to the percentage half the deposit [bears] to the full price."

I confess that I find the differences of approach in those two cases mystifying. In the one a strict resulting trust geared to mathematical calculation of the proportion of the purchase price provided by cash contribution is treated as virtually immutable in the absence of express agreement: in the other a displacement of the cash-related trust by inferred agreement is not only permitted but treated as obligatory. Guidance out of this difficulty is to be found, fortunately, in the passage in the speech of Lord Diplock in Gissing v Gissing [1971] AC 886 where he is dealing (at page 908) with the approach to be adopted by the court when evaluating the proportionate shares of the parties, once it has been duly established through the direct contributions of the party without legal title, that some beneficial interest was intended for both. He said:

"Where in any of the circumstances described above contributions, direct or indirect, have been made to the mortgage instalments by the spouse into whose name the matrimonial home has not been conveyed, and the court can infer from their conduct a common intention that the contributing spouse should be entitled to some beneficial interest in the matrimonial home, what effect is to be given to that intention if there is no evidence that they in fact reached any express agreement as to what the respective share of each spouse should be?

I take it to be clear that if the court is satisfied that it was the common intention of both spouses that the contributing wife should have a share in the beneficial interest and that her contributions were made upon this understanding, the court in the exercise of its equitable jurisdiction would not permit the husband in whom the legal estate was vested and who had accepted the benefit of the contributions to take the whole beneficial interest merely because at the time the wife made her contributions there had been no express agreement as to how her share in it was to be quantified.

In such a case the court must first do its best to discover from the conduct of the spouses whether any inference can reasonably be drawn as to the probable common understanding about the amount of the share of the contributing spouse upon which each must have acted in doing what each did, even though that understanding was never expressly stated by one spouse to the other or even consciously formulated in words by either of them independently. It is only if no such inference can be drawn that the court is driven to apply as a rule of law, and not as an inference of fact, the maxim "equality is equity," and to hold that the beneficial interest belongs to the spouses in equal shares.

The same result however may often be reached as an inference of fact. The instalments of a mortgage to a building society are generally repayable over a period of many years. During that period, as both must be aware, the ability of each spouse to contribute to the instalments out of their separate earning is likely to alter, particularly in the case of the wife if any children are born of the marriage. If the contribution of the wife in the early part of the period of repayment is substantial but is not an identifiable and uniform proportion of each instalment, because her contributions are indirect or, if direct, are made irregularly, it may well be a reasonable inference that their common intention at the time of acquisition of the matrimonial home was that the beneficial interest should be held by them in equal shares and that each should contribute to the cost of its acquisition whatever amounts each could afford in the varying exigencies of family life to be expected during the period of repayment. In the social conditions of today this would be a natural enough common intention of a young couple who were both earning when the house was acquired but who contemplated having children whose birth and rearing in their infancy would necessarily affect the future earning capacity of the wife.

The relative size of their respective contributions to the instalments in the early part of the period of repayment, or later if a subsequent reduction in the wife's contribution is not to be accounted for by a reduction in her earnings due to motherhood or some other cause from which the husband benefits as well, may make it a more probable inference that the wife's share in the beneficial interest was intended to be in some proportion other than one-half. And there is nothing inherently improbable in their acting on the understanding that the wife should be entitled to a share which was not to be quantified immediately upon the acquisition of the home but should be left to be determined when the mortgage was repaid or the property disposed of, on the basis of what would be fair having regard to the total contributions, direct or indirect, which each spouse had made by that date. Where this was the most likely inference from their conduct it would be for the court to give effect to that common intention of the parties by determining what in all the circumstances was a fair share.

Difficult as they are to solve, however, these problems as to the amount of the share of a spouse in the beneficial interest in a matrimonial home where the legal estate is vested solely in the other spouse, only arise in cases where the court is satisfied by the words or conduct of the parties that it was their common intention that the beneficial interest was not to belong solely to the spouse in whom the legal estate was vested but was to be shared between them in some proportion or other."

The decision of this court in Grant v Edwards [1986] 1 Ch 638) also affords helpful guidance. The context was different, in that the court was there dealing with a legal owner who has made representations to the occupier on which the latter has relied to her detriment so as to introduce equities in the nature of estoppel. Once a beneficial interest had been established by that route, however, the court then proceeded - as I read the judgments - to fix the proportions of the beneficial interests on general grounds which were regarded as applying in all cases. That appears from the judgments of Nourse LJ at p 650 and of Sir Nicolas Browne-Wilkinson V-C at p 657, where (after citing the passage I have quoted from Lord Diplock in Gissing) he says at G:

"Where, as in this case, the existence of some beneficial interest in the claimant has been shown, prima facie the interest of the claimant will be that which the parties intended: Gissing v. Gissing [1971] AC 886, 908G. In Eves v. Eves [1975] 1 WLR 1338, 1345G Brightman L.J. plainly felt that a common intention that there should be a joint interest pointed to the beneficial interests being equal. However, he felt able to find a lesser beneficial interest in that case without explaining the legal basis on which he did so. With diffidence, I suggest that the law of proprietary estoppel may again provide useful guidance. If proprietary estoppel is established, the court gives effect to it by giving effect to the common intention so far as may fairly be done between the parties. For that purpose, equity is displayed at its most flexible: see Crabb v. Arun District Council [1976] Ch 179. Identifiable contributions to the purchase of the house will of course be an important factor in many cases. But in other cases, contributions by way of the labour or other unquantifiable actions of the claimant will also be relevant. Taking into account the fact that the house was intended to be the joint property, the contributions to the common expenditure and the payment of the fire insurance moneys into the joint account, I agree that the plaintiff is entitled to a half interest in the house."

The general principle to be derived from Gissing v Gissing and Grant v Edwards can in my judgment be summarised in this way. When the court is proceeding, in cases like the present where the partner without legal title has successfully asserted an equitable interest through direct contribution, to determine (in the absence of express evidence of intention) what proportions the parties must be assumed to have intended for their beneficial ownership, the duty of the judge is to undertake a survey of the whole course of dealing between the parties relevant to their ownership and occupation of the property and their sharing of its burdens and advantages. That scrutiny will not confine itself to the limited range of acts of direct contribution of the sort that are needed to found a beneficial interest in the first place. It will take into consideration all conduct which throws light on the question what shares were intended. Only if that search proves inconclusive does the court fall back on the maxim that "equality is equity".

My answer to Question "B" would therefore be "No". The court is not bound to deal with the matter on the strict basis of the trust resulting from the cash contribution to the purchase price, and is free to attribute to the parties an intention to share the beneficial interest in some different proportions.

Mr Bergin submits, however, that in the particular circumstances of this case, that is an approach which the court is precluded from following by the evidence of actual intention given by the spouses themselves. That brings me to his last submission.

CCAN AN AGREEMENT BE ATTRIBUTED BY INFERENCE OF LAW TO PARTIES WHO HAVE EXPRESSLY STATED THAT THEY REACHED NO AGREEMENT?

Mr Bergin begins by pointing out (rightly) that this is an area of the law in which there is no scope for discretion. The entire jurisdiction rests upon the very limited exception provided by Parliament to the general requirement in S 53 of the Law of Property Act 1925 that trusts must be evidenced in writing. It is an exception in favour of trusts that are "resulting, implied or constructive". Mr Bergin then submits that the resulting trust is that which results from a contribution to the purchase price, and prima facie that fixes the proportion of the beneficial interest. Any implied or constructive trust relied on to alter or enlarge that prima facie entitlement must rest upon an imputed agreement inferred from conduct by equity. If the parties themselves testify on oath that they made no agreement, there is no scope for equity to make one for them.

That is a submission which, if it fell to be considered without assistance from authority, I would reject instinctively on the ground that it runs counter to the very system of law - equity - on which it seeks to rely. Equity has traditionally been a system which matches established principle to the demands of social change. The mass diffusion of home ownership has been one of the most striking social changes of our own time. The present case is typical of hundreds, perhaps even thousands, of others. When people, especially young people, agree to share their lives in joint homes they do so on a basis of mutual trust and in the expectation that their relationship will endure. Despite the efforts that have been made by many responsible bodies to counsel prospective cohabitants as to the risks of taking shared interests in property without legal advice, it is unrealistic to expect that advice to be followed on a universal scale. For a couple embarking on a serious relationship, discussion of the terms to apply at parting is almost a contradiction of the shared hopes that have brought them together. There will inevitably be numerous couples, married or unmarried, who have no discussion about ownership and who, perhaps advisedly, make no agreement about it. It would be anomalous, against that background, to create a range of home-buyers who were beyond the pale of equity's assistance in formulating a fair presumed basis for the sharing of beneficial title, simply because they had been honest enough to admit that they never gave ownership a thought or reached any agreement about it.

Mr Bergin submits, however, that his proposition is supported by authority. He relies upon the passage already quoted from the judgment of Dillon LJ in Springette v Defoe. He also relies on the judgment in the same case of Steyne LJ, who quoted the finding of the trial judge in that case that "It is my judgment that there is sufficient evidence, on the facts, of inference of common intention or arrangement between the parties that the property should be owned in equal shares", and then commented as follows at page 395:

"But these factors could not support such an inference because the assistant recorder had already found as a matter of fact that no such common intention was communicated between the parties. The simple answer to the man's case is that there was no communicated common intention. Given that no actual intention to share the property in equal shares was established, one is driven back to the equitable principle that the shares are presumed to be in proportion to the contributions."

These observations of Dillon and Steyne LJJ (with which Sir Christopher Slade agreed) are of course entitled to the highest respect, and if they formed part of the ratio of the decision would be binding on us. But they are observations which need to be read in the context of a decision relating to the part pooling of resources by a middle aged couple already established in life whose house- purchasing arrangements were clearly regarded by the court as having the same formality as if they had been the subject of a joint venture or commercial partnership. I cannot for my part believe that it was intended in that case to lay down a principle, applicable to all instances, that absence of express agreement precludes inference of presumed agreement. This impression is confirmed by the subsequent participation of Dillon LJ in the decision in McHardy's case.

I would therefore hold that positive evidence that the parties neither discussed nor intended any agreement as to the proportions of their beneficial interest does not preclude the court, on general equitable principles, from inferring one.

CONCLUSION

It follows from the answers I have given to the last two questions that the judge was in my view in error when he proceeded to treat the cash contribution to the purchase price as wholly determinative of the issue of the current proportions of beneficial entitlement, without regard to the other factors emerging from the whole course of dealing between the husband and wife. That was an error of principle, which entitles this court to intervene and reach our own conclusion as to how the proportions of beneficial interest should be assessed.

When the proper approach (that is to say the approach I have summarised in dealing with Question "B") is applied to the present case, I have little doubt as to what the answer should be. Mrs Cooke is a wife who in addition to bringing up three children (one of whom is still only 11) was working full or part time as a teacher and paying out her earnings in relief of household bills. When a second charge was taken out on the property within a few months after the marriage, she undertook joint and several liability to repay it. When her husband wanted her to sign the consent form in respect of the mortgage to the Bank for the benefit of his business, she did so, despite the anxiety and distress which provided part of the grounds for the judge's ruling that it had been obtained by undue influence. Thereafter she again undertook liability under a second charge on the property for the benefit of his business. One could hardly have a clearer example of a couple who had agreed to share everything equally: the profits of his business while it prospered, and the risks of indebtedness suffered through its failure; the upbringing of their children; the rewards of her own career as a teacher; and, most relevantly, a home into which he had put his savings and to which she was to give over the years the benefit of the maintenance and improvement contribution. When to all that there is added the fact (still an important one) that this was a couple who had chosen to introduce into their relationship the additional commitment which marriage involves, the conclusion becomes inescapable that their presumed intention was to share the beneficial interest in the property in equal shares. I reach this result without the need to rely on any equitable maxim as to equality. It is reinforced by the subsequent terms of their compromise of the Married Womens Property Act proceedings.

For all these reasons I would allow the appeal, dismiss the cross-appeal, and substitute for the declaration granted by the judge a declaration that Mrs Cooke has a beneficial one half interest in the property.

LORD JUSTICE SCHIEMANN: I agree.

LORD JUSTICE STUART-SMITH: I also agree.

ORDER: SO FAR AS THE COSTS BEFORE JUDGE BAKER ARE CONCERNED, THEY WILL BE COSTS IN THE CAUSE. THE PLAINTIFF TO HAVE THE COSTS OF THIS APPEAL. APPEAL ALLOWED. CROSS-APPEAL DISMISSED. THAT THERE BE A DECLARATION THAT MRS COOKE HAS A BENEFICIAL ONE HALF INTEREST IN THE PROPERTY. THE APPELLANT'S SHOULD HAVE THE COSTS OF THE APPEAL AND CROSS-APPEAL. THE RESPONDENT'S APPLICATION FOR LEAVE TO APPEAL TO THE HOUSE OF LORDS REFUSED. THE COSTS OF THE APPELLANT TO BE TAXED FORTHWITH. THAT THERE BE LEGAL AID TAXATION OF THE APPELLANT'S COSTS.