Le Foe v Le Foe
Woolwich v Le Foe
High Court
Citations: [2001] 2 FLR 970; [2002] 1 FCR 107; [2001] Fam Law 739.
Facts
The parties were a married couple living in a matrimonial home. In the beginning, the husband paid the mortgage, while the wife paid for all other domestic expenditure. However, the wife received a considerable inheritance which she put towards the mortgage. Later in the relationship, the couple began using the property as a B&B and jointly used the profits to meet mortgage payments.
Unbeknownst to the wife, the husband took out a second mortgage on the home. He told the bank that he was separated from his wife and misrepresented his income. The husband used part of the second mortgage to discharge the first mortgage. The wife consented to the money being used to pay off the first mortgage, though she did not know where it came from.
When the husband failed to pay this second mortgage, the bank sought possession of the house. The wife sought to block possession proceedings.
Issue(s)
- Should the bank receive a possession order?
Decision
The High Court granted a possession order, but stayed it pending separate proceedings to sell the house. The wife’s contributions to the home indicated that she was intended to have a 50% share in the equitable title under a constructive trust. Her equitable interest was an overriding interest since she was in actual occupation of the property.
However, she was bound by part of the second mortgage – the part that had been used to discharge the first mortgage. This was because she had consented to the repayment. This justified the possession order. However, since the husband had committed fraud against her, the bank could only demand his share of sale proceeds to pay off the second mortgage.
This Case is Authority For…
Contributions to domestic expenses count as detriment for the purposes of constructive trust provided they are designed to free up the other party to pay the mortgage.
