England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NORWICH COUNTY COURT
His Honour Judge O'Brien
OBQ 01256

		Royal Courts of Justice Strand, London, WC2A 2LL
		12/07/2013

Lord Justice Moses:

1. There was before the court a renewed hearing of an application for permission to appeal. It was conducted for an hour by Mrs Knowles' son. Rather than reiterating the many grounds which had previously been rejected by Lewison LJ, he focussed on his mother's financial circumstances before and at the time of the purchase the Red Barn, Bull Court, Gresham Road, West Beckham, Norfolk. This is not to say that the other grounds were abandoned but amounted to a sensible recognition that the factual findings as to those circumstances and as to the inferences which were to be drawn from them were crucial to this application.
2. Before I deal with the essential arguments which her son advanced, I should remind the defendant applicant that applications for permission to appeal can only be granted if there is a realistic prospect of success. The court is not allowed to grant permission because it feels sorry for a litigant. It is notoriously difficult for an applicant who seeks to challenge the factual findings of the court below, not least because the Court of Appeal does not re-hear the case, and, of course, was not in the same position as the judge to hear and sift the evidence. An applicant cannot achieve permission, let alone success, merely by suggesting that the judge ought to have believed one party rather than the other.
3. Mr Duncan Mayes suggested that his mother's wealth and resources were such that it was unthinkable that she would knowingly or freely have left herself with, in reality, nothing by the time of the Claimant's claim for an order for sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. By 1986, with her background as a successful fashion and textile designer, Mrs Mayes had a shop and residence in Northampton, worth, he says, £74,000 and, in that year, inherited a 5- bedroom town house in Waterbank Road, Sheringham, Norfolk, worth, he says, £125,000.
4. She then moved, in 1987, with her three children and bought one third of the Red Barn for £54,000. Purchase fees and a structural party wall were £11,000. In addition, he says that she obtained a Rural Government Grant for a workshop, which cost her £3,000 to construct. Additionally, there were internal and service works costing £29,500, covered by a mortgage from Norwich and Peterborough Building Society. Accordingly, he said that the total cost of the Barn and works was £97,500, her wealth was £199,000 and she was, thus, left with significant assets to spare of £101,500.
5. It was submitted that the judge paid no heed to the evidence of this wealth, as had he done so he would have appreciated that there was no rational explanation for its disappearance. Certainly, there was no justification that she would have given half the value of Red Barn away to the claimant.
6. The difficulty with the history Mr Mayes now gives lies in the judge's account of the evidence and his findings of fact. Mrs Mayes gave evidence that she paid the claimant's brother £35,000 for work on Waterbank Road. The judge rejected her complaint as to that cost (para. 20).
7. The judge found that there was a bridging loan for the purchase of the Red Barn by means of a bridging loan secured on Waterbank Road. That property was put on the market in May 1989 for £125,000 but, as the judge recalls, there were no takers at that price (para. 24).
8. The judge's findings about what happened contradict the account I was given at the hearing of the application for permission. The bank, Barclays, did threaten to foreclose on the mortgage secured on Waterfield Road and the claimant's brother bought it for £65,000. But the judge found that the bank would only lend the money secured on Waterfield Road on the understanding that Timothy Knowles would buy it for £65,000. He rejected Mrs Mayes' assertions of its value (para. 29).
9. That is part of the factual background against which the crucial question of the deed of gift arose. The other essential part of the background is the relationship at that time between the claimant and the defendant. Annabelle was conceived in the summer of 1989, not long before the deed in issue was signed on 2^nd April, 1989. It seems to me beyond argument that that relationship scotches any attempt to prove a presumption of undue influence, let alone actual undue influence. The defendant had to show that the gift could not reasonably be explained other than on the basis of such influence. If she could do so, it would then have been for the claimant to rebut it. The transaction must be one which could not reasonably be accounted for on the ground of friendship or relationship (Allcard v Skinner [1887] 36 ChD 145, 185). This is the approach espoused by Lord Nicholls in Royal Bank of Scotland v Etridge (No.2) [2001] 3 WLR 1021 [23]-[29].
10. It was the relationship, coupled with her financial circumstances, which the judge found led to the deed of gift (para. 54). In my view, given the combination of the financial situation, coupled with her close relationship, the deed of gift is amply explained.
11. Once that factual conclusion is reached, much of the rest of the case falls away. The suggestion of trickery, or non est factum, cannot stand with the letter from Barclays, dated 24 July 1990 once, finally, it had been disclosed, nor in the light of the solicitors' letter dated 21 October 2003. These factual conclusions must also cover the procedural complaints the defendant now makes as to the conduct of the trial. A court of appeal is bound to be influenced in its views of the merits of any appeal by the colour of the allegations made against the other side and the judge; they smack of understandable desperation but they diminish any chance of success the application might have had.
12. I shall not repeat all the other grounds on which reliance is placed because they have no prospects of success in the light of the main factual findings of the judge. I repeat my sympathy at the plight with which Mrs Mayes now finds herself faced. But I can do no more than dismiss this application and refuse permission to appeal.
13. The court office passed on a letter in which accusations have been made that someone on the claimant's behalf sought to pre-empt this judgment. A stay was imposed pending its handing-down. I am not in any position to adjudicate on such matters. In any event it is a matter for the judge to whom was given the misleading information (if that is what happened) that I had given any advance indication of the result. I merely say now that no early indication of this refusal has been given. I remove the stay and refuse the application to appeal.