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GAZETTE
APRIL 1981
by her husband? This situation was considered in
Caunce
v. Caunce [
1969] 1 All E.R. 722. On 3 November 1959
there was a conveyance on sale of a house to the husband
in fee simple, and on the same day he mortgaged the
house to a building society for the purpose of meeting the
purchase price of the property. The wife provided £479
out of her own money in respect of the purchase price.
This house, which was bought as a proposed matrimonial
home, was acquired on terms between husband and wife
that the purchase price, so far as not obtained from the
building society, should be provided by the wife and that
the property was to be vested in the spouses as joint
tenants at law. The husband, in breach of these terms,
had the property conveyed to him alone, and although the
wife knew this, she took no step to assert her rights. From
the date of the conveyance down to the date of his bank-
ruptcy, 7th July, 1966, the husband paid the instalments
due on the mortgage, and thereafter they were paid by the
wife. Unknown to her, the husband created three further
mortgages in favour of Lloyds Bank Ltd. to secure money
advanced to him. After a receiving order in July 1966, the
husband left the house and thereafter the wife lived there
without him.
The wife issued a writ
inter alia
claiming against the
bank a declaration that her beneficial interest in the
property had priority over the three legal charges. The
wife urged that then when so many matrimonial homes
were purchased out of monies provided in part by the
wife, a purchaser (including a mortgagee) who finds the
matrimonial home vested in one of the spouses is put on
inquiry whether the other spouse has an equitable interest
in the property and that, if he does not inquire of the other
spouse whether such an interest is claimed, he takes
subject to that interest. In this case, as distinct from
Ains
worth's
case, the wife was living in the house with the
husband at the time of each of the bank's advances. The
wife contended
inter alia
that an inquiry ought to have been
made on the property and that, if such an inquiry had
been made, the wife would have asserted her equitable
interest. Therefore, so the wife's argument ran, the bank
had constructive notice of that interest. On this point,
Stamp, J. (at p. 728) ruled that
"where the vendor or mortgagor is himself in
possession and occupation of the property, the
purchaser or the mortgagee is not affected with
notice of the equitable interests of any other person
who may be resident there, and whose presence is
wholly consistent with the title offered. If one buys
with vacant possession on completion and one
knows or finds out that the vendor is himself in
possession and occupation of the property, one is,
in my judgment, by reason of one's failure to make
further enquiries on the premises, no more fixed
with notice of the equitable interest of the vendor's
wife who is living there with him than one would be
affected with notice of the equitable interest of any
other person who might also be resident on the
premises, e.g., the vendor's father, his Uncle Harry
or his Aunt Matilda any of whom, be it observed,
might have contributed money towards the
purchase of the property."
This decision has been both applauded (as by McWilliam
J. in the
Northern Bank
case) and condemned, the latter
somewhat savagely, by John Eekelaar in
Family Security
and Family Breakdown,
at p. 87:—
"The reasoning in
Caunce
v.
Caunce
illustrates with
the utmost clarity how alien it is to English legal
thinking to conceive of the possibility that the wife
might have an interest in the property of her
husband simply because she is his wife. Ineed, had
Mrs. Caunce been a stranger (a mistress, or a male
friend of her husband's), she would have been in a
stronger position because the mortgagee would have
been on his guard as to whether the stranger was in
possession under some interest in the property. It is
difficult to find enthusiasm for a law according to
which the holding of the marriage status, not only
fails to achieve security of occupation in relation to
dealings with it by the other spouse, but is a positive
disadvantage to the person concerned."
The pendulum swings
There was another judicial oscillation towards a more
liberal interpretation of the statutory protection of the oc-
cupier's rights in
Hodgson
v.
Marks
[1971] Ch. 892.
When the effect of paragraph (g) had been considered in
National Provincial Bank Ltd. v. Ainsworth
supra, by
Lord Denning he had interpreted the paragraph literally
and thereby had reached a liberal result. Russell, L.J., on
the other hand, had construed the words of this
paragraph in the general context of the law of property
and, on appeal, the House of Lords had preferred his
restrictive construction. In
Hodgson
this Lord Justice
pronounced the leading judgment in the Court of Appeal
which, if it cast no doubts on the
Ainsworth
case, at least
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