Barbara Jean Hobson (formerly McFadden) v Kenneth George Ewart
| Jurisdiction | British Virgin Islands |
| Judge | Benjamin, J |
| Judgment Date | 02 April 2002 |
| Docket Number | CLAIM NO. BVIHCV1996/0159 |
| Court | High Court (British Virgin Islands) |
| Date | 02 April 2002 |
IN THE HIGH COURT OF JUSTICE
CLAIM NO. BVIHCV1996/0159
Mr. Lewis Hunte for the Claimant
Mr. Sydney Bennett for the Defendant
The parties are former paramours. They are both nationals of Canada. They met there in 1980 or early 1981 when the Claimant was a clerk at Sears Department Store in Ontario, Canada. At the time, the Defendant owned and operated a company—Arthex-Property Management. He had acquired a house in Mississanga, Ontario and in 1981, the parties began living together as man and wife along with the Claimant's children. The Claimant subsequently left her job at Sears and began working as a weekly-paid employee of the Defendant's company.
In April 1982, the parties came to the BVI on vacation. They decided to purchase land at Spring Bay, Virgin Gorda and to make that Island their home. On December 23, 1982, the Claimant and Defendant were registered as joint proprietors of Parcel 34 of Block 4738 Bin the Virgin Gorda South Registration Section comprising an approximate area of 0.548 acres (hereinafter referred to as ‘the land’).
On June 8, 1983, the parties jointly and severally executed a charge upon the land in favour of First Pennsylvania Bank N.A. to secure the sum of $55,000 and the said charge was registered on June 16, 1983. A house has been constructed on the land and it was dubbed ‘Asterfield Cottage.’
By Instrument No. 108 of 1988 dated January 11, 1988, the Claimant and Defendant severed the joint proprietorship and were registered on January 29, 1988 as ‘proprietors in common in equal undivided shares.’
Unhappy differences arose between the parties in the early part of 1984 and the Claimant left Virgin Gorda and returned to Canada with her children. She now resides in Oakville, Ontario and has remarried. The Defendant has been also married to another and resides in the house constructed on the land with his wife.
On July 27, 1996, the Claimant filed a Writ of Summons with Statement of Claim against the Defendant seeking the following:
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(1) An order that the Defendant vacate the property within such period of time as the Court may specify and that thereupon the property be sold;
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(2) 50% of the value of the property upon the sale thereof;
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(3) $184,272.00 for loss of use of the property calculated at 50% of the estimated rent of the property and such further sums as accrue at the same rate until payment; and
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(4) Costs.
In her Statement of Claim, the Claimant averred that the parties had jointly constructed the dwelling house on the land based on the understanding that the entire property would be held by them in common in equal shares. She further pleaded that she had made contributions by way of labour, materials and money to the construction of the house,which the Defendant in his Defence denied save for the purchase by her of miscellaneous items valued at below $1000.
At the time when the joint proprietorship was severed in January, 1988, the parties had ceased living together. The Defendant agreed that both himself and the Claimant were receiving separate legal advice when the Instrument of Severance was executed. He, however, denied that by virtue of the said Instrument and the registration thereof that the Claimant is entitled to a 50% share in the land and dwelling house thereon (collectively referred to as ‘the property’). The Court is therefore called upon to adjudicate upon the legal effect of the Instrument of Severance and the registration of the same.
In his skeleton argument, Counsel for the Claimant sought to rely on answers given by the Defendant under cross-examination as amounting to an admission by him that the Claimant was a 50 per cent owner of the property. The Court was asked to treat any question of the quantum of the Claimant's contributions to the purchase, construction and improvement of the property as being of no relevance.
The true substance of the Defendant's evidence is that the Claimant had the deposit of 10% or $3,750 paid towards the purchase of the land and the land was registered in their names jointly. He went on to say that he was in love and accepted Counsel's suggestion that ‘Love is blind.’ It is important to note that he went to assert that in severing the joint proprietorship he did not regard himself as thereby conveying an equal share of the property to the Claimant.
Counsel for the Defendant submitted that, consequent upon the severance of the joint proprietorship, the Court must determine where the beneficial interest in the property lies, the legal interest being clearly reflected on the face of the Land Register as being held by the parties in common equally.
The Court was urged to treat section 100 of the Registered Land Act, Cap. 229 of the Revised Laws of the Virgin Islands as dealing with the legal interest in land as opposed to the equitable interest therein. Section 100(1) enacts:-
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‘(1) Every instrument made in favour of two or more persons, and the registration giving effect to it, shall show—
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(a) Whether such persons are joint proprietors or proprietors in common; and
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(b) where they are proprietors in common, the share of each proprietor.’
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For completeness, reference must be made to section 101(1) which identifies the characteristics of joint proprietorship in the following terms:-
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‘(1) Where the land, lease or charge is owned jointly, no proprietor is entitled to any separate charge in the land, and consequently,
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(a) dispositions may be made only by all the joint proprietors; and
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(b) On the death of a joint proprietor his interest shall vest in the surviving proprietor or the surviving proprietors jointly.’
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It was further submitted on behalf of the Defendant, that section 101(3) which deals with the severance of a joint proprietorship does not seek to confer a proprietary interest that did not exist prior to severance but rather seeks to only sever legal rights which can only be done on the basis of equal shares. Put another way, subsection (3) is only concerned with the removal of the right of survivorship while leaving intact pre-existing beneficial interests. That subsection reads:
‘(3) Joint proprietors, not being trustees, may execute an instrument in the prescribed form signifying that they agree to sever the joint relationship, and the severance shall be completed by registration of the joint proprietors as proprietors in common in equal shares and by filing the instrument.’
Again, to complete the picture created by the legislation, section 102(1) is germane and provides as follows:
‘(1) Where any land, lease or charge is owned in common, each proprietor shall be entitled to an undivided share in the whole, and on the death of a proprietor his share shall be administered as part of his estate.’
Counsel for the Claimant argued that the act of severance merely removed the right of survivorship leaving the respective equitable interests of the proprietors in commonunaffected unless it is clearly so stated. Thus, the Court must go on to determine the beneficial interests of the parties by ascertaining their respective contributions.
The case ofGoodman v Gallant [1986] 1 All E.R. 311 was cited to the Court in support of the proposition that it is conceivable that on the face of the Instrument of Severance the proprietors in common may expressly declare the shares in which they hold the property beneficially, thus obviating the need for the Court to embark upon an inquiry as to extent of each proprietor's share therein. In that case, there was a conveyance into the joint names of the parties as joint tenants on trust for sale, with power to postpone sale, ‘to hold the net proceeds of sale…UPON TRUST for themselves as joint tenants.’ The Claimant sought to assert a three-quarters share of the beneficial interest of the property upon the severance of the beneficial joint tenancy. The Court of Appeal held that the Conveyance contained an express declaration that the parties were to hold the proceeds of sale of the property on trust for themselves as joint tenancy, and consequently, on the severance of the tenancy a tenancy in common in equal shares was created. Slade, L.J. had this to say (at p. 314 c–e):
‘In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property…. The way is open for persons claiming a beneficial interest in it or its proceeds of sale to rely on the doctrine of ‘resulting, implied or constructive trusts…In particular, in a case such as that, a person who claims to have contributed to the purchase price of property which stands in the name of himself and another can rely on the well-known presumption of equity that a person who has contributed a share of the purchase price of property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust (see, for example,Pettitt v Pettitt [1970] A.C. 777 at pp. 813–814, per Lord Upjohn). If, however, the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of the doctrine of resulting, implied or constructive trusts unless and until the conveyance is set aside or rectified; until that event the declaration contained in the document speaks for itself.’
The relevant passage from the speech of Lord Upjohn inPettit v. Pettit (supra) was cited to the Court and it is sufficient to set out the following extract which appears at page 813 F:-
‘But the document may be silent as...
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