ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
His Honour Judge Collins CBE
Claim No CHY09408
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE RIMER
MR JUSTICE WARREN
| EDDIE JULES
|- and -
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Noel Dilworth (instructed by Davis & Co LLP) for the Respondent
Hearing date : 20 October 2011
Crown Copyright ©
Mr Justice Warren:
i) In about 2002, Mr Jules decided to open or acquire a wine bar. In the event, he acquired shares in a company owning such premises at a price of £170,000. Mr Robertson agreed to provide financial assistance for that acquisition. The Judge found that he did so by way of loan to Mr Jules in the sum of £75,000.
ii) In order to raise the money, Mr Robertson had to borrow on the security of a mortgage on his home. Mr Jules undertook that the mortgage instalments would be paid off out of the income of the business. Unfortunately, after only a few months, Mr Jules was unable to comply with that undertaking because the business was not doing very well. Mr Robertson therefore found himself in the unhappy position of having to pay the mortgage instalments himself.
iii) At the beginning of 2004, Mr Robertson moved in to live with Mr and Mrs Jules. He did so for essentially two reasons. The first was that he had to sell his own house because he could not meet the mortgage instalments out of his own resources and was receiving no payments from Mr Jules or his company. The second reason was that he was getting on in age; he thought he would be able to have a future living with his daughter until he died.
iv) The wine bar eventually folded. Mr and Mrs Jules found themselves, by February 2004, with a possession order being made against them in relation to their own house with about £15,000 of arrears and a desperate need for cash in order to avoid being thrown out of their house and to be able to make something of their future. There were debts of nearly £100,000 to be paid off.
v) On 18 February 2004, Mr Jules entered into an IVA with his creditors.
vi) Mr Robertson's home was eventually sold in November 2004 for £240,000. The net proceeds of sale were £158,000. £100,000 went to Mrs Jules to pay off debts. Subsequently he provided her with a further £40,000 which the Judge held was a gift.
"Furthermore [Mr Jules] successfully completed an IVA in March 2005 thereby absolving [Mr Jules] from all previous debts to the completion of the IVA. It is also shown that [Mr Robertson] had full knowledge of [Mr Jules'] IVA but never declared the £70000.00 as a personal debt to [Mr Jules]."
The character of the payments of £75,000 and £100,000
"As for the IVA it is my intention to make a settlement offer to them [the creditors] for which they have been notified an offer will be made."
"So you see I would like to have this done as soon as possible which would make me feel comfortable in knowing that I have recovered my money in the future value of the property."
"40. The letter of 28 May 2004 makes it clear that the intention was to reflect in the value of the property not only Mr Robertson's advances out of the sale of his property but also the money that he had borrowed to go into the wine bar because Mr Jules specifically says so…"
"42. What is the position about the £75,000 and the £100,000 which was advanced? It was not advanced as a loan apart from the £75,000. It was advanced with the express intention of acquiring an interest in the property on the basis that certain documents would be forthcoming, which were never forthcoming. The question is: what is the legal analysis of that situation? I have heard no submissions from Ms Ballard [the solicitor then representing Mr Robertson] or from the defendants. It seems to me that it would be possible to analyse the position legally in two ways. One is by way of constructive trust; the other is by way of proprietary estoppel. Maybe the same result would be obtained whichever legal route one went down. The extreme informality of the situation suggests that the more appropriate analysis is one of proprietary estoppel, namely, that the defendants made a representation to Mr Robertson that if he were to put money up he would acquire an interest in their property. In reliance upon that, he sold his own property and moved in with them and the necessary arrangements were never made.
44. On the basis that there is a proprietary estoppel to that effect, the court has a discretion as to what is the appropriate remedy to deal with it. An interest in the property is valueless to Mr Robertson as may be any money judgment unless Mr and Mrs Jules win the lottery tomorrow. The proper order to make is that that [sic] the claimant should be repaid the sum of £75,000 by Mr Jules and £100,000 by Mr and Mrs Jules jointly…."
Lord Justice Rimer
Lord Justice Longmore