Cayman National Bank Ltd v McField

• Jurisdiction: Cayman Islands
• Judge: (Henderson, J.)
• Judgment Date: 22 July 2003
• Court: Grand Court (Cayman Islands)
• Date: 22 July 2003

Grand Court

(Henderson, J.)

CAYMAN NATIONAL BANK LIMITED

and

C. McFIELD and D. WEBB-McFIELD

Ms. R.J. Heap for the plaintiff;

Mrs. R.C. Whittaker-Myles for the second defendant.

Cases cited:

(1) Lloyds Bank PLC v. Rossett, [1991] 1 A.C. 107; [1990] 1 All E.R. 1111, applied.

(2) Williams & Glyn”s Bank Ltd. v. Boland, [1981] A.C. 487; [1980] 2 All E.R. 408; (1980), 124 Sol. Jo. 443, distinguished.

Legislation construed:

Registered Land Law (1995 Revision) (Law 21 of 1971, revised 1995), s.28(g): The relevant terms of this sub-section are set out at para. 9.

Land Law-overriding interests-occupation of matrimonial home-wife with equitable interest, in actual occupation of matrimonial home, has overriding interest under Registered Land Law, s.28(g)-no equitable interest if no contribution to purchase price, mortgage repayments or upkeep of home-no overriding of bank”s claim under mortgage if wife”s interest only acquired after mortgage

Trusts-constructive trusts-contribution to purchase of property-wife”s contribution necessary to give equitable interest in matrimonial home owned by husband-no inference of share in ownership merely by wife”s signature of mortgage together with husband-actual occupation to be coupled with equitable interest to create overriding interest under Registered Land Law, s.28(g) valid against mortgagee

The bank applied for payment to it of a mortgage debt due to it from the proceeds of the sale of a matrimonial home.

The husband charged his interest in property of which he was the sole registered owner to the bank for a loan of $70,000 to fund the construction of the matrimonial home in 1986. Both the husband and wife signed the charge but the wife made no financial contribution to the acquisition of the property, nor did she contribute to the upkeep of the home or repayment of the mortgage until 1996.

By a variation of the charge in 1994, the husband borrowed an additional $120,000 for private business purposes of which his wife had no knowledge. At a later date, he transferred legal title to the property into their joint names and the wife then made repayments on the mortgage until their marriage broke down.

On divorce, the court ordered the sale of the matrimonial home and equal division of the proceeds between the spouses. The bank claimed, however, that its charge over the property gave it priority in the repayment of the mortgage debt out of the proceeds. The wife conceded the bank”s claim to the original $70,000, but disputed its claim to recoup the additional loan from her share of the proceeds.

The bank submitted that (a) although the wife had been in actual occupation of the property at the date of the variation of the charge, she did not at that time have any equitable interest in the home which could

have been recognized by s.28(g) of the Registered Land Law as an overriding interest, as she had not made any financial contributions to the acquisition of the property; (b) the court should not infer, from the mere fact that both husband and wife executed the 1986 charge, that they intended that she share the beneficial interest in the property; and (c) moreover...