An equity of exoneration in favour of a wife arises ‘at the time she charges her estate’. The doctrine of exoneration is based on an inference in each case from all the facts of that particular case. Where one co-habitee joins in granting a charge over the jointly-owned property to secure a loan to the other co-habitee, there is a presumption that the former is entitled to exoneration. Tthis is an evidential presumption, capable of rebuttal by evidence from which an actual or inferred contrary intention can be drawn. It is ‘a prima facie inference’. In my view, it is no different from the position of any surety. The evidence may show an actual or inferred intention on the part of the surety and principal debtor that the surety would have no, or only limited, rights against the principal debtor. But, in the absence of such evidence, there is a presumption that the parties would intend the natural result that, as between them, the principal debtor was to bear responsibility for the debt.
Commenting on Paget, Warrington J said that the MR: ‘intended the two parts of his judgment to stand together – that if the facts are those which he stated in the early part of his judgment there is a prima facie inference to be drawn from those facts, but not a legal presumption in the strict sense, in favour of the wife, and, unlike the case of a legal presumption, you are entitled to go into all the facts of the case to see whether there is or is not that prima facie inference.’:
Warrington J
[1911] 1 Ch 487
England and Wales
Citing:
Discussed – Paget v Paget CA 1898
The plaintiff wife was ‘a lady of fortune’, with the bulk of her property settled on her for life for her separate use without power of anticipation. They ‘moved in good society and, large as their income was, they lived far beyond it.’ They were . .
Cited by:
Cited – In Re Pittortou (a bankrupt) ChD 1985
H and W charged the property to secure the H’s overdrawn bank account. The account was used both for his business and for payment of expenses relating to the matrimonial home. H was adjudicated bankrupt. W sought her equity to be exonerated from H’s . .
Cited – Day v Shaw and Another ChD 17-Jan-2014
Mr and Mrs Shaw had granted a second charge over their jointly-owned matrimonial home to secure the personal guarantee given by their daughter and by Mr Shaw in respect of a bank loan to a company (Avon). Their daughter and Mr Shaw were the . .
Cited – Re Woodstock (a bankrupt) ChD 19-Nov-1979
Walton J drew attention in his judgment to the need for the courts, in considering how the equity of exoneration should work as between a husband and a wife, to take into account the relationship which husbands and wives bear, or ought to bear, to . .
Approved – Armstrong v Onyearu and Another CA 11-Apr-2017
Exoneration of partner’s equity on insolvency
The court considered the equity of exoneration, where property jointly owned by A and B is charged to secure the debts of B only, A is or may be entitled to a charge over B’s share of the property to the extent that B’s debts are paid out of A’s . .
Lists of cited by and citing cases may be incomplete.
Equity
Updated: 12 November 2021; Ref: scu.567248