Midland Bank plc v Cooke
| Midland Bank plc v Cooke | |
|---|---|
 | |
| Court | Court of Appeal |
| Citation(s) | [1995] 4 All ER 562, (1995) 27 HLR 733 |
| Court membership | |
| Judge(s) sitting |
Waite LJ Chadwick LJ Stuart-Smith LJ |
| Keywords | |
| Constructive trust, family home, undue influence | |
Midland Bank plc v Cooke [1995] 4 All ER 562 is an English land law case, concerning constructive trusts. It held that so long as some financial contribution, however, small can be identified as going to the purchase of a home, the court may quantify that contribution in a greater amount than initially given.
Facts
The Cookes paid for the house purchase price of £8500 by getting a mortgage loan from a bank, and Mr Cooke’s savings and a wedding gift from his parents of £1100. They then replaced that mortgage with one from Midland Bank plc to secure Mr Cooke’s business overdraft. Mrs Cooke signed a consent form for her interest to be postponed to the bank’s security. The property was put into Mr Cooke's name as sole legal owner. Midland Bank plc was demanding repayment of £52,000 and sought possession. Mrs Cooke argued her signature was obtained by undue influence. (Mrs Cooke admitted at trial that they had never discussed any beneficial entitlement.)
The Judge held the bank knew of Mr Cooke’s undue influence and that she had an equitable interest given that the wedding gift was partly hers. He assessed her interest as 6% of the property, and Mrs Cooke appealed.
Judgment
The Court of Appeal held that the gift was made to the couple jointly. This was proof of a common intention to have a beneficial interest. But in quantifying her interest the financial contribution was not the only thing which mattered: the whole course of dealing did. On the facts it was clear that the presumed intention was that she should have an equal share of the beneficial interest. Waite LJ observed that people usually will not talk about legal entitlements to property when young and embarking on a relationship, and says that should not leave them ‘beyond the pale of equity’s assistance’. The parties shared everything equally, including ‘the upbringing of their children.’ He continued as follows.
| “ | ... 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… Only if that search proves inconclusive does the court fall back on the maxim that ‘equality is equity’.’
... 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. |
” |
Chadwick LJ remarked accordingly.
| “ | It must now be accepted… that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property…. [which] includes the arrangements which they make from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home. | ” |
Stuart-Smith LJ concurred.