Wade v Grimwood

A contractual obligation to contribute equally to property outgoings may create an immediate right of reimbursement when one party bears more than the agreed share. That obligation is distinct from an account taken only on sale, although any cross-claim may be subject to set-off. The sale clause governs the stated order for applying sale proceeds and need not provide separately for accrued contribution claims. In an informal domestic relationship, a party may waive reimbursement by conduct. The court may assess representation, reliance and inequity in their factual context without insisting on commercial formalities. A waiver defence raised by the judge will not necessarily occasion procedural unfairness where its substance was apparent and no further evidence is identified.

The claimant and the deceased lived together for more than 15 years and jointly owned their home. Their agreement and declaration of trust provided that they would bear property outgoings equally and that, on sale, the net proceeds would be distributed after specified deductions, with the balance divided 80 per cent to the claimant and 20 per cent to the deceased.

After the deceased died intestate, her mother, as administratrix and sole beneficially entitled person, claimed the deceased’s share of the sale proceeds. The claimant sought the whole fund, alternatively an account under the outgoings clause. His Honour Judge Weeks QC held that the clauses were independent and that the deceased’s 20 per cent share was not reducible by sums allegedly due under the outgoings clause. The claimant appealed. The central issues were the construction of the two clauses and whether the claimant had waived any right to reimbursement.

1. Appeal dismissed. The outgoings clause imposed mutual and independent obligations to contribute equally as each cost, expense or outgoing became payable. It was therefore a set-off situation, not an accounting situation in which liability arose only when the property was sold. The word “payable” showed that rights of contribution accrued throughout the period of joint ownership. This construction was supported by Halesowen Presswork & Assemblies Ltd v Westminster Bank Ltd [1971] 1 QB 1, which distinguished set-off from an account.
2. The sale clause specified the order in which sale proceeds were to be applied. It contained no provision for a balance owing under the outgoings clause. The two clauses were accordingly independent, and the deceased’s 20 per cent share was not automatically reduced by historic outgoings.
3. Nevertheless, the claimant had waived any right to reimbursement for payments made from his personal account. The judge was entitled to find that, in the context of an informal domestic relationship, the claimant had made it clear that he would not enforce reimbursement and that the deceased had ordered her affairs accordingly. The court should not insist on the formal application of representation, reliance and inequity in that context.
4. The waiver conclusion was not procedurally unfair. Although waiver had not been specifically pleaded or argued and was raised by the judge in the judgment, the substance of the defence—that the claimant had lost any right to reimbursement—was apparent, and he identified no further evidence he would have adduced.
5. The further limitation defence did not require decision, although it had considerable force on the correct construction of the outgoings clause. The appeal was dismissed, with the respondent to pay the appellant’s costs, subject to detailed assessment.

• Court of Appeal (Civil Division): dismissed the claimant’s appeal from the decision of His Honour Judge Weeks QC in the Chancery Division.
• Chancery Division: held that the outgoings and sale-proceeds clauses were independent and that the deceased’s 20 per cent share was not reducible by sums allegedly due under the outgoings clause.