England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LONDON COUNTY COURT
(HIS HONOUR JUDGE COWELL)

		Royal Courts of Justice Strand London, WC2
		16th March 2005

Wednesday, 16th March 2005
1. LORD JUSTICE JONATHAN PARKER: This is an application by Dilip and Satish Kalidas, the defendants in a possession action brought against them by their brother, Bhik Kalidas, in respect of a freehold property at 82 Hartford Road, Kenton in Middlesex, of which he is the sole registered proprietor.
2. The application was listed for renewal at an oral hearing before me on 21st February of this year following my refusal of the application on the papers. Although no direction had been for that oral hearing to be on notice, nevertheless Mr Russell Stone appeared on behalf of the claimant, Bhik. Mr Mark Warwick appeared for the applicants. He had not appeared below before the judge. Counsel representing the applicants before the judge was Mr Mark Walsh. Unfortunately it transpired that due to some administrative mishap a revised skeleton recently lodged by Mr Warwick, together with a revised grounds of appeal, had gone missing. I accordingly adjourned the application on notice and reserved the costs of that hearing to the adjourned hearing. This is the adjourned hearing.
3. The applicants seek permission to appeal against a possession order made by His Honour Judge Cowell in the Central London County Court on 3rd November of last year whereby he ordered that the applicants give possession of the property in 14 days. The judge refused permission to appeal.
4. Although the order does not say so in terms, its effect was to dismiss a counterclaim by the applicants in which they had asserted that the property is beneficially owned by them and their brother Bhik in equal one-third shares.
5. As will already, I think, be apparent from that short introduction, this is a most unfortunate, as well as a most bitter, family dispute.
6. The parents of the applicants and the claimant died tragically in a car accident on 4th March 1995. They died intestate. Their next of kin are their 7 children; the applicants, the claimant, and four daughters.
7. The property at 82 Hartford Road was bought on 2nd March 1987 in the names of two of the daughters, Usha and Naina. It is common ground, however, that they were not intended to have any beneficial interest in the property and they made no contribution towards its purchase. Their names were on the title simply because they were in a position to obtain a mortgage. The purchase price of the property was £82,000 of which £54,500 was financed by a mortgage with the Cheshunt Building Society. The balance of the purchase price was provided from what the judge described in his judgment as "family funds", and loans from friends of the family.
8. Following its purchase the property became the home of the parents and their three sons, that is to say the applicants and the claimant. The daughters were, by that time, living away from home. It appears that one of the daughters, Naina, moved into the property for about a year but left again in March 1989.
9. Some time in 1989 the claimant borrowed some £70,000 on his own account. The judge found that he applied the whole of that sum in redeeming the building society mortgage, the redemption of the mortgage taking place on 19th September 1989, and in carrying out works of improvement to the property.
10. By this time neither of the sisters wished her name to remain on the title to the property and in August 1991 the property was transferred out of the names of the two sisters and into the sole name of the claimant. He was, in due course, registered as sole proprietor of the property. Thereafter the parents and their three sons continued to live in the property.
11. On 4th March 1995, as I have said, the parents were killed in a car crash. The three brothers continued living in the property. By early 1998 both the claimant and Dilip had married (in the claimant's case for the second time) and their respective wives were also living in the property. At about this time what the judge described in paragraph 19 of his judgment as "ghastly friction" broke out, leading to the claimant giving Dilip and his wife and Satish notice to quit on the footing that they were in occupation of the property as mere licensees.
12. They asserted, however, that they were equal beneficial owners of the property with the claimant. That led, inevitably, to the commencement of the present action in May 2003 and to the delivery of the applicants' counterclaim, claiming one third beneficial interests in the property.
13. The judge described the dispute as "a very bitter family dispute" and he referred in the course of his judgment to the applicants' evidence being coloured by spite and by "bitter brotherly hatred" (see paragraph 30 of his judgment). He found the applicants to be unreliable witnesses; in contrast to the claimant, whom he found to be "far more reliable as a witness than his brothers" (see paragraph 31).
14. Addressing the dispute as to the beneficial ownership of the property, in paragraph 38 of his judgment the judge addressed the question: what purpose did the family have in mind when the property was purchased? In paragraph 39 of the judgment he said this:

"But the particular purpose in 1989 arose from this fact: there was the anxiety of the parents to find somebody, and the person they found was Bhik, to remove the threat of the sale made by Naina's solicitors, that being her only course if the mortgage were not redeemed. Bhik was effectively the only answer to the problem; he was the only person whose participation would guarantee the parents a home, which he also regarded as his duty as the eldest son to achieve."

15. In paragraph 41 of his judgment the judge concluded that it was intended that the property should be the home of the parents and their three sons for the foreseeable future. However, it is clear from the terms of his judgment that the judge was careful to distinguish between intentions in relation to occupation and intentions in relation to the creation of property interests. Thus, he said, in paragraph 41:

"It seems, in short, that when it comes to purpose, of course the parents intended that in the foreseeable future No 82 would be the home of themselves and of their three sons. That can so readily be confused with the notion of beneficial interest and, of course, it does not correspond with it."

16. In paragraph 42 of his judgment the judge said this:

"If one looks at the case with an eye to seeing what trusts might result by reason of contributions, one has two important features: one is the contributions already made towards the purchase, which came substantially from the parents, for they must have provided the bulk of the original purchase in 1987; and then there is the liability that Bhik undertook for the £70,000 that he borrowed. On ordinary resulting trust principles, this would give Bhik a beneficial interest in something like 80% or 90% of the house, with the parents having the rest. But the parents effectively received their share by the understanding that they would occupy, as in fact they did, for the rest of their joint lives and the life of the survivor, since the purpose of the acquisition that it should be their home to live in gave them the equivalent of a life interest. The claimant has at all times remained personally liable for the £70,000."

17. After reviewing the evidence, and after referring to the well known House of Lords decision in Lloyds Bank v Rosset [1991] 1 AC 107, the judge said this in paragraph 49 of his judgment:

"In short, I accept the argument of Mr Stone that what is needed is clear evidence of a common intention which goes to the actual beneficial interests in the house, not some vague understanding about who would live in the house."

18. It is clear from his judgment that the enquiry which the judge was making was as to whether there was evidence of a common intention that the beneficial interest in the house should be split three ways between the applicants and the claimant.
19. In the concluding paragraph of his judgment, that is paragraph 53, the judge said this:

"I think I have covered all the points that I should. Just as I find that Bhik felt at the time of what is called [the] third meeting that perhaps it would be fair to provide something for Satish, because that would have been his parents' wish, so I am conscious that perhaps the parents would wish that something could be provided by Bhik to his two brothers, but that is [as] far as I think I can go. When it comes to the law and applying the law, as I understand it, I am simply not satisfied that there was any express agreement or understanding that the beneficial interests should be third shares for each. It seems to me that, for that reason and for all the other reasons I have attempted to give, this is not a case in which it can be said that the two brothers have any beneficial interest in the property."

20. By his revised grounds of appeal Mr Warwick abandons the challenges to the finding of facts which were made in the original grounds of appeal cited by Mr Walsh; challenges which seem to me to have no real prospect of success in this court, hence my refusal of permission to appeal on the papers. Rather he seeks to challenge the judge's decision on the ground that applying the decision of this court in Oxley v Hiscock [2004] 3 WLR 715, an authority which was not cited to the judge, the judge ought to have found that the applicants were each entitled to a one third beneficial interest in their parents' beneficial share in the house.
21. This is plainly a new case and one which was not advanced at trial. It is apparent from the judgment read as a whole that the judge was, as I said earlier, concerned to enquire as to whether there was, as alleged by the applicants, a common intention that they should have each a one third beneficial interest in the entire property.
22. Notwithstanding the way that the case was presented to the judge below, Mr Warwick nevertheless submits that it is within the terms of the applicants' re-amended Defence and Counterclaim. In particular he draws my attention to the prayer for relief, which seeks a declaration that Bhik holds the property on trust for himself and the applicants "in equal shares alternatively in such shares as the Court shall determine."
23. Mr Warwick accordingly submits that it was open to the judge to find some lesser beneficial interest and that had the case of Oxley v Hiscock been cited to the judge, that is the course which the judge would have taken. The enquiry in that event would have been a different one, but it is, he submits, one which was open to the judge to take on the evidence, and one which, had this additional authority been cited, he would have taken.
24. Mr Warwick submits that the judge did not follow the approach established in Oxley by enquiring whether there was express agreement as to the extent of the applicants' respected beneficial shares. He submits that, instead, the judge should have considered whether, on the evidence, there was a common intention that they should have some beneficial interest. On the authority of Oxley, the next step, he submits, would be to enquire as to what a fair beneficial share would be, having regard to the whole course of dealing by the parties in relation to the property.
25. I enquired of Mr Warwick, in the course of his helpful oral submissions, whether he was accepting that a retrial would be inevitable were permission to appeal granted. Mr Warwick submits, however, that it would not be necessary to have a retrial. He submits that there is at least a real prospect of the Court of Appeal, at a substantive appeal, concluding that it was appropriate to make findings on the basis of the case as now advanced; that is to say, to make findings as to whether there was a common intention that the applicants should have a beneficial interest in their parents' share of the beneficial interest in the property.
26. Mr Stone, for the claimant, submits that the revised grounds of appeal have no better prospect of success than the original grounds. He points out that the applicants' case before the judge was, as I have already indicated, quite different from that which is now asserted. The case before the judge was that there was an expressly formulated common intention that each of the applicants should have a one-third beneficial share in the property.
27. As an indication of the way in which the case was presented to the judge, Mr Stone has referred me to paragraph 8.2 of the closing skeleton argument on behalf of the applicants where Mr Walsh stated, "Of course, in the instant case, [the defendants] say that the intention was expressed quite clearly." In context, that intention is plainly an intention that there should be a three-way split of the beneficial interest in the property between the three brothers.
28. Mr Stone points out that in paragraph 53 of his judgment, which I quoted earlier, the judge concluded that there was never any common intention in favour of the applicants. On that basis, he submits, the question of the extent of their beneficial interest never arose. The findings of the judge are clear in this respect, he submits. They were that there was no discussion about anything other than the occupation of the property, as opposed to its beneficial ownership.
29. In my judgment it is simply not open to the applicants to seek to advance an entirely new case on appeal. Nor does the common form of prayer for relief afford any support for the contrary view. In any event the new case now sought to be advanced seems to me to be doomed to failure on the findings of fact which the judge made, to the effect that there was never any common intention that the applicants should have a beneficial interest in the property. On that basis the second question identified by Chadwick LJ in Oxley simply does not arise. Moreover, it seems to me that were permission to be granted, and were the appeal to succeed, the inevitable result would be a retrial. I cannot think that there is any real prospect of the Court of Appeal sanctioning such an outcome.
30. Accordingly, it seems to me that these revised grounds of appeal do not have any substantial basis and they do not give rise to any real prospect that the proposed appeal would succeed.
31. Accordingly, for those reasons, I dismiss this application.

ORDER: application dismissed; applicants to pay claimant's costs of today, subject to detailed assessment; no order in relation to the claimant's costs of hearing on 21st February.