A married couple bought a house in joint names. The husband borrowed from T and agreed to charge the land. When the property had been registered, he ordered the solicitors to deposit the land certificate with T as security. T registered a notice on the register, and later extended their loans to H. When they sought to enforce the charge the wife obtained an order for the delivery up of the land certificate.
Held: T’s appeal failed. The letter from the husband had been only confirmation that he would deposit the land certificate. At that time the letter was executory only, and since it had been made without his wife’s involvement or consent, an equitable charge had not arisen. The husband might be ordered to charge his own interest to T because of the bank’s own part performance. The doctrine of part performance would require a balancing of any hardship it might cause to the respective parties, and the wife would suffer far more hardship than the bank. The husband had not had the authority to release the land certificate to the bank and it must be returned.
Mann J said: ‘In my judgment the deposit of title deeds with the creditor does not operate as an equitable charge unless the deposit is an effective one. A deposit is an effective one in my view if the creditor can retain custody until his debt is paid. I do not regard the deposit of title deeds by one joint tenant without the consent of the other as being effective in that sense. ‘
Judges:
Mann J
Citations:
[1984] 3 WLR 109, [1984] 2 All ER 585, [1985] QB 210
Jurisdiction:
England and Wales
Equity, Land
Updated: 23 March 2022; Ref: scu.248853