England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 October 2004

MR JUSTICE RIMER :

Introduction

1. The claimant is Mrs Joan Humphreys, who appeared by Ms Josephine Hayes. The defendant is Mr Dennis Michael Humphreys ("Dennis"), her son, who appeared by Mr Rupert D'Cruz. The action was commenced by a claim form dated 22 March 2002.
2. Mrs Humphreys was for many years the tenant of a house ("the house") at 20 Framlingham Crescent, Mottingham, London SE9. Bromley Council ("the Council") was her landlord. In 1989 she exercised her right under Part V of the Housing Act 1985 to buy the house and it was transferred to her. The agreed valuation of the house was £64,500 but Mrs Humphreys' long tenure entitled her to a 60% discount on that valuation in calculating the price she had to pay and so she was able to buy it for £25,800. The whole purchase price was borrowed from the Nationwide Anglia Building Society ("the Nationwide") on the security of a mortgage of the house granted by Mrs Humphreys to the Nationwide but (as between Mrs Humphreys and Dennis) Dennis assumed the burden of repaying the mortgage loan. On the same day the purchase was completed Mrs Humphreys executed a trust deed whose effect was that a sale of the house required both her and Dennis's consent and that on any sale the net proceeds of sale belonged to Dennis. Following the purchase, Mrs Humphreys continued to live in the house, as she still does.
3. By the action, commenced nearly 13 years after the purchase, Mrs Humphreys asks for an order setting the trust deed aside. She asserts that it was obtained by Dennis's undue influence, alternatively that it constituted an unconscionable bargain, alternatively that it was induced by misrepresentations, alternatively that it was vitiated by mistake. She asks for declarations as to the beneficial interests in the house and for orders for the removal of a caution, sale and the purchase of a substitute property.
4. Dennis disputes that Mrs Humphreys is entitled to any relief. The house is now worth some £180,000, although it is still subject to the mortgage which, as at 24 September 2003, secured £23,974.64. I now turn to the story in more detail. There are important disputes of fact upon which I will have to make findings.

The facts

(a) General background

5. Mrs Humphreys was born on 28 February 1925 and is now 79. She left school at 14 and disclaims any pretensions to being well-educated, brainy or to being able to read or write well. She said in her witness statement that she always needs to ask a member of her family to help her read and understand solicitors' letters but said in her oral evidence that she reads the Daily Mirror every day. She worked as a cleaner until she was 60, when she retired. She has suffered from a degree of deafness since she was a child and is for that reason registered as having a disability. She wears a hearing aid and says she does not always hear properly. I accept that she has problems with her hearing which cause her difficulty in following ordinary conversations, but I am satisfied that she was able to hear and understand the questions put to her during her oral evidence.
6. Mrs Humphrey originally occupied the house as a joint tenant with her late husband. They had seven children, all of whom had left home by 1978 and are now in their late 40s or older. Dennis is the second of the seven. Mr Humphreys died in 1967, after which Mrs Humphreys occupied the house as the sole tenant.
7. Mrs Humphreys became entitled to buy her house under the "Right to Buy" legislation. She says the matter was discussed within the family in about 1988 or 1989 although the disclosure shows that consideration had been given to it earlier: Cattermole Hawgood & Co, solicitors, were writing to Mrs Humphreys on the subject in 1986, their letter of 3 September 1986 recording that the price was then £15,760. I find that Dennis played a material role in connection with the instructions to Cattermole Hawgood, their letter of 21 October 1986 saying they had spoken to him and that he wanted the purchase to be deferred temporarily. Nothing came of any then proposal to buy and it was not until about 1988 or 1989 that the idea was resurrected.

(b) The discussions about the purchase of the house

8. The opportunity to purchase the house was in principle an attractive one. That is because its agreed valuation in 1988 was £64,500, whereas Mrs Humphreys' long tenure as a tenant entitled her to a maximum discount of 60%, or £38,700, meaning that she could buy it for £25,800. She had, however, no capital with which to buy it and no income with which to service the repayment of any loan raised for its purchase. She lived on her pension and was on housing benefit and income support. In 1988 her housing benefit paid £31.29 of her weekly rent of £32.80 and £4.97 of her weekly rates of £6.21. It was against that background that the possibility of buying the house became the subject of discussion within the family.
9. Mrs Humphreys said in her oral evidence that she had a close relationship with all her children but that she did not tend to discuss her problems with them – she said she did not have any problems. But she said that she did discuss the possibility of a purchase on various occasions with one or other of her children. She said in her witness statement that she discussed with Dennis, Roy, June and Katherine the question of how to pay for the house. She said that Dennis, Roy and June "would consider a joint approach to fund the purchase ...." She said that Roy and June proposed to pay cash but that June then withdrew from the proposal because she did not have enough money and that Roy then said that he did not have enough cash either but "would arrange a mortgage." She said in cross-examination that Roy's proposal that the purchase money should be raised on mortgage did not worry her. She did not know if Roy went to the length of approaching any bank or building society for a mortgage loan but said she then had a meeting with Dennis. She said Dennis's stated position was that it was unnecessary to involve Roy in the purchase because he lived too far away and would be unable to do any of the necessary maintenance to the house. She said Dennis also told her that he would "keep it simple and pay cash for the house rather than have the complications of a mortgage." In the event, Dennis was the only child who played any part in financing the purchase. Mrs Humphreys' oral evidence was that Roy knew that Dennis alone would be funding the purchase, because he had the necessary cash.
10. Roy's evidence on this differed from Mrs Humphreys'. He said the purchase discussions centred round a purchase for cash but said that June could not afford to make a contribution. That left just himself and Dennis. Roy said in his witness statement that he told Dennis that he "could easily obtain the required funds …" although he did not there explain how. He explained in cross-examination, however, that he had just sold his house and could have found £12,000, which he described as the equity he had retained out of the sale. He said that Mrs Humphreys' evidence that he would arrange a mortgage for the purchase was wrong. He also said that the discussion between the family members about the purchase was to the effect that whoever contributed would receive a corresponding share in the house under Mrs Humphreys' will: the proposal was, therefore, that the family members so contributing would make a gift of their contributions to Mrs Humphreys so that she would be the outright owner of the house. Roy's witness statement contained this:

"2. … I told Dennis that I could easily obtain the required funds and he knew of my intention to contribute to the purchase so that mother could own the house without a mortgage. Shortly after this, and without further referral to me, I learnt that Dennis had persuaded mother to proceed without my involvement. I understood Dennis had bought the house for cash, stating that it would be faster and more simple if he did this on his own.

3. Some weeks later Mother told me that the sale had gone through. I believed the property was in her name and that Dennis had paid for it outright. I was a little annoyed with this because I wanted to be kept informed and part of it. I phoned Dennis and told him of my dissatisfaction with his actions"

11. The evidence in this case was in many respects imprecise, and that piece of evidence was fairly typical. The second and third sentences of paragraph 2 are apparently referring to a different conversation from that referred to in paragraph 3, but do not identify when it was or with whom. Whilst the second sentence may be read as referring to a point of time prior to the completion of the purchase, the third sentence can be read as referring to a point of time after completion. But paragraph 3 then appears to cast doubt on that. Roy anyway does not explain why it was apparently only the latter conversation which annoyed him. Nor did he provide a full explanation as to why he was annoyed. Was it because he had lost his prospect of a share of the house on Mrs Humphreys' death? In cross-examination he said that he could not remember precisely when he had learnt that Mrs Humphreys had purchased the house through Dennis, he just remembered Mrs Humphreys telling him that Dennis had bought the house. His further evidence in cross-examination was that in about the winter of 1989 he invested his available cash in the purchase of a boat, apparently after he had learnt of the purchase. Bearing in mind that the house purchase was completed on 27 November 1989, there was, however, not much of 1989 left in which to make the boat purchase. Roy did not produce any documentary evidence supporting his evidence about his available cash funds in 1989 or as to the purchase of the boat. That last comment is not a criticism of Roy, since he was a mere witness. It does, however, mean that there is no documentary corroboration of his claimed recollections of timings and events of long ago or of his claim that he was holding substantial cash that could have been used towards the purchase.
12. Dennis's evidence was to the effect that there was no question of the purchase ever being a cash one. He said there was originally a proposal that he, Roy and June would purchase the house jointly but that June then told him that neither she nor Roy could contribute to the mortgage repayments. Dennis said that, at the time, he was comfortably able to meet such repayments himself and so he and Mrs Humphreys agreed that he should be the sole purchaser. He said that June suggested he should go ahead and buy the house. He was not challenged on that and June did not give evidence. Dennis did not confirm with Roy that he (Roy) did not want to take part in the purchase. He said he never suggested to anyone that he was going to buy the house for cash and that it was always clear to both Mrs Humphreys and the other family members that the purchase price would be raised on mortgage. In cross-examination he denied that Roy had ever made any proposal to him that the two of them should buy the house for cash and he also denied that Roy ever told him he had any funds enabling him to make a cash contribution towards the purchase.
13. Mrs Humphreys said that the main attraction of the purchase proposal as far as she was concerned was that Dennis said that he would help her to obtain a bungalow in place of the house. She was aware that, in 1989, there were rumours that a housing association might purchase the house but denied that the reason she wanted to buy it was because she was concerned that the association might seek to re-house her in smaller accommodation. In this respect, her evidence differed from that of her daughter, Eileen Childs, who said that her mother was concerned of the risk of being moved. Dennis's evidence was to similar effect. Roy's evidence was that it was the family rather than Mrs Humphreys which was worried about this: he did not know if she was worried about it.
14. Mrs Humphreys said in her oral evidence that Dennis asked her to go to Bromley Council and there ask to buy the house. She said that the price had been £15,000, but that the Council asked for double that and then put the price down. Her reference to £15,000 is close to the price of £15,760 mentioned in Cattermole Hawgood's letter of 3 September 1986 and was probably an imprecise recollection of that figure. The price was in fact fixed at £25,800, which is consistent with Mrs Humphreys' evidence that the Council doubled, and then reduced, the original price.
15. The precise timings of these family discussions and of any visit by Mrs Humphreys to the Council are unclear. The documents show, however, that Mrs Humphreys made a formal application to purchase the house on 25 April 1988, that on 23 May 1988 the Council notified her that its value at the former date was £64,500 and that her 30 years' tenancy entitled her to a discount of £38,700 so that she could buy it for £25,800. The letter also notified her that she could defer completion of any purchase for three years provided she paid a deposit of £150 by July 1988. Dennis paid that deposit and on 8 July 1988 the Council wrote to Mrs Humphreys saying that they would hold the price at £25,800 for three years from 25 April 1988.

(c) The course of events leading to the purchase

16. These are central to the claim and there are disputes about them. Kirk & Partners ("Kirks"), solicitors in Eltham, were retained in the transaction on the part of the proposing purchaser, although there is a dispute as to whether their client was Mrs Humphreys or Dennis. Kirks' position is that their client was Mrs Humphreys and their file is consistent with that. I will first summarise the course of events as shown by that file and as briefly elaborated by the evidence of Mr Hugh Lewis, the partner who handled the matter. I will then turn to the other evidence about these events.

(i) Kirks' file

17. Dennis telephoned Kirks some time before 5 July 1988 and arranged for them to act for Mrs Humphreys in the purchase. Dennis made it clear to Kirks in that conversation that the house was not being bought for cash but that a loan was to be raised for the purchase, with its repayment to be secured by a mortgage of the house. On 5 July 1989 (or perhaps 25 July: Mr Lewis thought the date might have been mistyped but nothing turns on it), Mr Lewis wrote to Mrs Humphreys at the house, referred to Dennis's instructions on her behalf and asked her to let Kirks know as soon as she had received the mortgage offer. That letter therefore made it clear to Mrs Humphreys that a mortgage loan was being raised, whereas her case is that she understood that Dennis was providing cash for the purchase and that it was only after the purchase that she discovered that a mortgage had been created. Dennis disputes that and says it was always clear to her that the price was being raised on mortgage.
18. On 25 July 1989 Mr Lewis wrote to the Council in connection with the proposed purchase and asked for "the usual draft papers for approval." His chaser letter of 5 September 1989 reflects that no response had yet been received from the Council but that by then a mortgage offer was "anticipated" and that he had received the result of his local search. On 20 September 1989 the Council wrote to Kirks saying they were dispensing with a contract and enclosing the engrossment of the transfer with copy entries of the registered title. They asked for the prompt return of the executed transfer and proposed completion within a month.
19. On 21 September 1989 Mr Lewis wrote to Mrs Humphreys at the house and enclosed the transfer, adding some explanations about it. He proposed that she should attend his offices to execute it in readiness for completion. He wrote that he had not yet received a copy of the formal mortgage offer and that Mrs Humphreys might wish to delay the appointment until after it had been issued.
20. On 8 October 1989 the Nationwide issued a formal offer of a loan of £25,800 (the full price) on the security of a mortgage of the house. The offer was to Mrs Humphreys but it is unclear whether a copy was sent to her. The copy in evidence is headed "Instructions to Solicitors" and is addressed to Kirks, whom the Nationwide retained to act for them on the transaction. The terms of the offer required Dennis to guarantee the due performance of Mrs Humphreys' obligations as mortgagor.
21. On 12 October 1989 Mr Lewis wrote to Mrs Humphreys at the house. He summarised the terms of the Nationwide's proposed advance and pointed out that it was a requirement that Dennis should be a guarantor. He said he awaited hearing from her with regard to an appointment to "sign the final papers with a view to completing this transaction."
22. By 17 October 1989 Mrs Humphreys had executed the transfer in escrow. It is unclear precisely when she did so although it is clear that she executed it at Kirks' office, her signature being witnessed by Mr Lewis. On 17 October 1989 Mr Lewis sent the transfer to the Council and proposed that completion should be on 27 November 1989, with which the Council agreed. Although the file does not show this, I regard it as probable, and find, that Mrs Humphreys executed the Nationwide mortgage on the same occasion, her signature also being witnessed by Mr Lewis.
23. On 27 October 1989 Mr Lewis wrote to Mrs Humphreys at the house informing her that completion was to be on 27 November. He also enclosed Kirks' account, which showed that a balance of £174.25 was required to complete the purchase. His letter included an important PS, reading "When replying, would you let us have the details of Mr Humphreys' [Dennis's] address for insertion in the Trust Deed." There had been no previous reference to a trust deed in the correspondence and the file includes no attendance note of any meetings with Mrs Humphreys when the making of such a deed might have been discussed. Reference is, however, made to it in the account of Kirks' charges accompanying the letter, the relevant part reading:

"The like charges in connection with the preparation of a Trust Deed whereby it was agreed the property should be held in trust for your son and that he should make payments due under the Mortgage, say … £50.00"

24. That letter and its enclosure came to Dennis's attention. Included in Kirks' file is an undated manuscript note signed by him. It reads:

"Dear Sir,

Ref to your letter dated 27^th October 1989 payment for your professional charges on behalf of Mrs J. Humphreys from her son Dennis Michael Humphreys of 16 Woldenhurst Road, Orpington, Kent BR5 4HW."

I presume Dennis paid the £174.25 required to complete the purchase.

25. Completion was on 27 November 1989, when all the documents (the transfer, mortgage, guarantee and trust deed) were dated. The Council transferred the house to Mrs Humphreys in consideration of £25,800. Mrs Humphreys' mortgage in favour of the Nationwide required monthly repayments of capital and interest and Dennis guaranteed the due performance of her obligations as the borrower. His signature of the guarantee was witnessed by Mr Lewis. Mrs Humphreys' title to the house was registered at HM Land Registry on 7 December 1989.
26. The trust deed was made between Mrs Humphreys (defined in it as "the Nominee") and Dennis (defined as "the Beneficiary"). Mrs Humphreys' signature was witnessed by Joan Swift (Dennis's girlfriend) and I find that she executed it at the house on an occasion when Dennis turned up there with it and Ms Swift and asked her to sign it. Dennis's signature of the trust deed was witnessed by Mr Lewis and was, I find, executed by him at Kirks' offices. His address had been added into the deed in manuscript. The deed recited the transfer, the mortgage and the guarantee. Recital 3 stated that Mrs Humphreys "holds [the house] upon the trusts hereinafter declared as she hereby admits." The operative parts provided as follows:

"1. THE NOMINEE and the Beneficiary have agreed that the Nominee will hold [the house] UPON TRUST that the Nominee shall with the consent in writing of the Beneficiary sell the same or any part thereof in such manner as they shall from time to time jointly think fit with power to postpone the sale so long as they shall jointly think fit

2. THE NET PROCEEDS of sale after payment of the monies due on the Mortgage shall be held entirely for the Beneficiary absolutely

3. THE BENEFICIARY HEREBY AGREES that during the lifetime of the Nominee he will take no steps to enforce the trust for sale under which [the house] is held without the consent in writing first obtained of the Nominee

4. DURING the currency of the Mortgage or any future Mortgage secured on [the house] the Beneficiary will duly and punctually pay to the Mortgagee all monies due under the said Mortgage and will indemnify and keep indemnified the Nominee against any liability in this respect."

27. On 5 December 1989 Mr Lewis wrote to Mrs Humphreys at the house advising her that the purchase and the mortgage to the Nationwide had been completed on 27 November. He added that, if the Nationwide had not already notified her of the mortgage repayments, they would be confirming the position to her shortly.
28. As may be apparent from that summary of the file, there is no attendance note of any telephone conversation or meeting between Mr Lewis (or anyone else at Kirks) and Mrs Humphreys or Dennis. Apart from Dennis's manuscript note to which I have referred, there is no evidence that he or Mrs Humphreys ever responded in writing to any of Mr Lewis's letters. There is no letter from Mr Lewis to Mrs Humphreys or Dennis explaining the effect of the trust deed.

(ii) Mr Lewis's evidence

29. Mr Lewis gave evidence under a witness summons. He qualified as a solicitor in 1979 and specialises in probate, conveyancing and will making. He said he had advised on purchases under the right to buy scheme in hundreds of cases. He had no recollection of this particular case but was confident – presumably by reference to the file – that Kirks' client was Mrs Humphreys, not Dennis. He said he would not have excluded her from any discussions he had with Dennis at any meetings between the three of them. To the suggestion put to him that all instructions had come from Dennis rather than Mrs Humphreys, he said that was possible and that Dennis may have taken the initiative. He was asked what steps he would ordinarily take to ensure that the ramifications of a trust deed such as that executed in this case were properly understood by an elderly tenant with a hearing difficulty. He said that he would take measures and might sometimes have to raise his voice and shout. If he thought any undue influence was being brought to bear, he would see the tenant separately. He said he would have wanted a client such as Mrs Humphreys to understand the effect of the trust deed: for example, that on death the house would not be hers to dispose of, or what would happen if the house was sold or she went into a nursing home.
30. As Mr Lewis did not remember the case, he had no recollection of giving any advice to Mrs Humphreys. He agreed there was nothing in the file showing he had ever had any conversation with her. He accepted that the first time he saw and spoke to her may well have been when she came into the office to sign the transfer. He said he had always regarded the discount to which the tenant was entitled as representing the (or part of the) tenant's contribution to the purchase and said that this was a matter about which he would ordinarily advise the tenant.

(iii) Mrs Humphreys' evidence

31. Mrs Humphreys said in her witness statement that Dennis told her he would arrange for the purchase and that one day he took her to some solicitors in Eltham, "to sort out the house." The solicitors were Kirks. Some years earlier Mrs Humphreys had suffered a personal injury and had used Kirks to make a claim although she could not recall who dealt with that matter for her. She was sure, however, that it was not Mr Lewis and no-one suggested it was. She denied that it was she who suggested they should use Kirks and she claimed it was Dennis's idea.
32. Mrs Humphreys' account in her witness statement is that, after arriving at Kirks' office, she and Dennis were shown into a room and Mr Lewis introduced himself. She says that he and Dennis then did all the talking but she could not hear what they said. She says she was asked to sign a number of papers, which Mr Lewis did not attempt to explain to her. She says she asked Dennis what they were and he said they were "to do with the house" and she signed them.
33. She says that she and Dennis then left Kirks and went to the Nationwide branch in Eltham. She said in her statement that she was there given more papers to sign but did not know what she was signing. She says she signed these papers, as well as those she had signed at Kirks, because she trusted Dennis. She said that "As far as I was concerned I thought I had to sign the papers because Dennis was paying cash. I did not realise that he needed a mortgage. I found out later that Dennis did arrange a mortgage." In cross-examination she said she thought they went to the Nationwide so that Dennis could get his cash out to buy the house. She said she did not know what was going on, what she was signing for or anything.
34. Mrs Humphreys' case that it was only after the completion of the purchase that she learnt that the house was to be, and had been, purchased with the aid of the Nationwide mortgage does not square with a statement she made (and signed as true) on 21 February 2002, one serving as a cross between Particulars of Claim and a witness statement. In paragraph 12, in a section listing various misrepresentations Dennis is alleged to have made so as to induce her to sign the trust deed, she said that he told her that he would only be entitled to the house "when he had made all the mortgage payments after my death, and not that he would be entitled to claim the [house] for himself even if he stopped making the mortgage payments and while I am still living. That was what we had agreed it should say." (Emphasis added). The "it" is a reference to the trust deed.
35. The trust deed, transfer and mortgage were all dated 27 November 1989, the day of completion, and so Mrs Humphreys' statement in paragraph 12, if true to any extent, makes it clear that she knew perfectly well – and before completion – that Dennis was raising the purchase money by a mortgage loan. Paragraph 12 was put to her in cross-examination and she said that Dennis made the statements there alleged "a few days before" completion. Initially – and at least once subsequently - she also agreed that she and Dennis had discussed and agreed before completion that he would be making the mortgage payments as well as maintaining the house. The main thrust, however, of her confused and confusing oral evidence in cross-examination was that at no stage before completion did she know about a mortgage and that she only learnt about it from other family members some time afterwards (a time which varied from weeks to months). She said the question of a mortgage was never discussed when she went to the solicitors. She said that all that she and Dennis talked about before the purchase was going to a solicitor to get the house sorted out. Although Mr D'Cruz tried more than once, he was unable to obtain any explanation from Mrs Humphreys as to what, consistently with the case she now makes, she had meant by what she had said in paragraph 12. She did not, for example, suggest it was simply a mistake. She simply did not deal with the point. She said that her agreement with Dennis before the purchase was that he would have the house if she died "and it was all paid up". He was also going to help her get a bungalow. Given that she claims she understood he was paying cash, it is difficult to understand what she meant by her remarks just quoted.
36. A further difficulty about Mrs Humphreys' evidence in relation to her claimed ignorance of the mortgage is Mr Lewis's letters. I find that Mrs Humphreys went to his offices at least twice although there are no attendance notes of her visits and so no record of what discussion took place. But Mr Lewis also wrote several letters to her, the copies in evidence all being apparently addressed to her at the house and I have no reason to assume other than that they were posted to her, arrived and were opened by her. They make it clear that the purchase price was being raised on mortgage. In cross-examination Mrs Humphreys positively denied that she received Kirks' letter of 5 July 1989 (the first letter, and one referring to the proposed mortgage), adding that she had never had any letters from Kirks. She also said she did not remember the letter of 12 October 1989 (informing her of Nationwide's proposed advance), although she accepted it was possible that she had received it. She also accepted that it was possible that she had received the letter of 27 October 1989 (enclosing Kirks' account and including the PS about the trust deed). Her case about the Kirks correspondence as explained in her witness statement had been slightly different. She there said, in paragraph 13:

"If I received any letters from [Kirks] I would give them to Dennis or he would pick them up using his spare key to enter the house. I have never read any of the letters from [Kirks]."

This seems to amount to an acceptance that the letters (or some of them) either did or may have arrived at the house but to an assertion that she never read them. In cross-examination she made the bizarre observation that she would have opened the letters but would not have read them because "I would not have read other people's letters." But they were not "other people's letters": they were her letters, addressed solely to her. That evidence is to be compared with her statement in paragraph 9 of the document of 21 February 2002. She there said that she never received any letters from the solicitors but that "If I had done I would have shown them to my children Roy, Kathleen or June as I am unable to understand Solicitors' letters without help." She there appeared to disclaim any suggestion either that she would have shown them to Dennis or that she did show them to him, yet he was the only child playing a part in the purchase and there is no suggestion that she did not fully trust him in connection with it. I was informed that the majority of the Kirks/Humphreys letters were disclosed by Dennis in the action so that at some stage they clearly came into his possession, although there is a dispute as to when that was.

37. Mrs Humphreys disclaimed any clear recollection of Mr Lewis. She said she remembered his office and recalled, but was not sure, that she went there once or twice. She thought it possible she first went there in July 1989. She said in cross-examination that all she could recall of the visit, or visits, to Kirks' offices was Mr Lewis and Dennis talking between themselves and then asking her to sign the papers. She said Mr Lewis might have talked about the purchase but she did not understand it. She could not remember any details because it all happened 14 years ago.
38. She said in her witness statement that a "week or so" after going to Kirks Dennis came to the house with his girlfriend, Joan Swift, and told her that she had to sign another document to do with the house but did not otherwise explain it. She says she signed it and that Joan Swift then signed it. I find that this was the trust deed. She accepted in cross-examination that she knew that this document was also "to do" with buying the house. Her case is that she did not understand its contents. She said in paragraph 14 of her witness statement that:

"Although I was not aware of the contents of the documents that I had signed that day I was prepared to give the house to Dennis when I died, on condition that he paid for the house and carried out all repairs and maintenance and that within a few years I would be moving to a bungalow."

39. The last part of that is to be contrasted with her evidence in cross-examination that Dennis would help her find alternative accommodation within a year of the purchase. In paragraph 11 of her earlier statement of 21 February 2002, she dealt more fully with Dennis's alleged promises or representations. She there said:

"11. Dennis told me something that I now know to be untrue, that he was to be responsible for all repairs and maintenance. The Trust Deed does not include any clause making him responsible for repairs and maintenance. He said that he would do all the repairs and maintenance. In fact he has done very little and my Property is now in a bad state of repair with leaking windows. It has not been properly painted outside for over 20 years. He redecorated once downstairs and started laying a drive but left it unfinished at the hardcore stage. He promised to fit double glazing but never did. It now seems he only intended to do the repairs and maintenance so long as it suited him and he misrepresented his intentions in this respect."

40. In cross-examination Mrs Humphreys said that Dennis told her before the purchase that he would do all the maintenance, gardening "and everything." In paragraph 14 of her February 2002 statement she said that Dennis told her that "under the Trust Deed" she would be able to sell the house and buy another one if she wanted to move. In cross-examination she said this conversation preceded the purchase, but she also said, inconsistently, that Dennis never told her anything about the trust deed. In paragraph 15 she also said that Dennis told her that "under the Trust Deed I would be entitled to occupy the Property as long as I wished." In cross-examination, and again inconsistently, she again said she did not remember them talking about the trust deed. She also said that Dennis told her he would pay her £3,000 on completion of the purchase, to help her with the bills for the house. She said he paid her the £3,000 several weeks after the purchase.

(iv) Dennis's evidence

41. At the time of the purchase Dennis was a builder and decorator and had his own business. There is no evidence as to how successful he was. He said in his witness statement that the choice of Kirks as solicitors was Mrs Humphreys': they had acted for her before in connection with her personal injury claim. He accepts that he arranged the initial meeting but said that Kirks were at all times representing Mrs Humphreys' interests. He said that at no time were Kirks instructed on his behalf and nor did they give him any legal advice. He denied Mrs Humphreys' assertion that Mr Lewis spoke to him privately or acted on his instructions. He admits he paid their invoice but that was because Mrs Humphreys had no money. He said Mrs Humphreys asked him to attend each meeting at Kirks and he did so. He disagreed that she is of limited intelligence: he said she can read and write, reads a daily paper and used to write regularly to her sister. He said in his witness statement that he believed that Mrs Humphreys was perfectly aware at all times of what was going on but also said that he would reiterate to her after each meeting at Kirks what had been said.
42. Dennis said that following the first visit to Kirks he and Mrs Humphreys went to the Nationwide to arrange the mortgage. He said she knew perfectly well that a mortgage was necessary. He said that all the Nationwide correspondence was addressed to her at the house, was opened by her and then given to him for safekeeping. He also said that he reviewed all the correspondence she received in relation to the purchase but said this was merely to enable him to explain to her in plain English what the position was.
43. Dennis's evidence in his witness statement was that Mrs Humphreys fully understood the mortgage and trust deed. He said she never gave any indication that she was confused or unclear about the position. He said Mr Lewis explained everything slowly and precisely. He said that "When we left that particular meeting when the trust deed was discussed I asked mother if she had understood and she mocked me and said that she was not stupid and of course she had understood." He said her only concern over the trust deed was that, if he predeceased her, she did not want his children or ex-wife, Anita, to take the house from her and make her homeless. Dennis said in his witness statement that the trust deed was designed to protect his investment: "Nothing more and nothing less."
44. Dennis denied that he agreed to pay Mrs Humphreys £3,000 on completion of the purchase. He admits he gave her £3,000 but said he did so simply because she asked for it. He said it was a gift and was unrelated to the purchase. He also denied that it was any part of his agreement with Mrs Humphreys that he was to be responsible for repairs to and maintenance of the house. He admits he agreed that he would help her to do the repairs she could not do herself: he said that, at the time, she did a lot of decorating herself and also had a partner (who did not live at the house) who used to help her. Dennis said he did, however, paint all the windows internally and also carried out a list of works which he scheduled to his defence and counterclaim. His list describes the works as "Repairs", although at least two of the works (supplying and fitting a garden shed and a greenhouse) would appear to be in the nature of improvements. He said in his witness statement that the labour costs a building company would have charged for the work he did would have been between £19,500 and £26,000, plus materials costing £2,480. Mrs Humphreys complains he failed to double-glaze the house or to extend the kitchen but he said he never agreed to do any such work. He admits he started work on the garden wall but did not complete it, a task which in cross-examination he said she asked him to do after the purchase. He said he did not complete it because his business ran into financial trouble and he did not have the funds. He said he did what he could for Mrs Humphreys having regard to the time he had available and his other financial commitments. In cross-examination he said the last job he did at the house was in 1997 or 1998. He said there had been some damage to a bedroom and some furniture in respect of which Mrs Humphreys made an insurance claim. Whilst her evidence had been that he had received the insurance money, he denied it.
45. In his oral evidence in chief, Dennis disputed Mrs Humphreys' assertion in cross-examination that he and she agreed that within a year of the purchase he would sell the house and buy a bungalow for her in its place. He pointed out that a sale as early as that would trigger the repayment of part of the discount obtained on the purchase. He accepted, however, that he did tell her she would be able to sell the house but I find there was little or no further discussion about that. He admitted that many of the documents relating to the purchase had been in his possession but said that Mrs Humphreys had given him them in about 1996, saying that as he was buying the house he ought to have them. His evidence in his witness statement was to the effect that he was given the Nationwide correspondence for safekeeping from the start.
46. In cross-examination Dennis accepted that in 1989 Mrs Humphreys was a little hard of hearing. He also admitted he did not rate her powers of comprehension on a very high level. In connection with family discussions about the purchase of the house, he said he was unaware of any proposal that Mrs Humphreys was to leave her house by will to such of her children who contributed to the purchase of the house. He said that was not her arrangement with him.
47. Dennis said in cross-examination that, as Mrs Humphreys had asked him to, he explained her concerns to Mr Lewis, namely that she was worried that if Dennis died his ex-wife and children could take the house away from her. Dennis had told her that his ex-wife would have no claim on it because it would be in Mrs Humphreys' name. It was put to Dennis that Mrs Humphreys had a habit of saying "yes" so as to cover up the fact that she could not hear what others were saying to her. He did not agree with that, but he did agree that she trusted him to pass on to her Mr Lewis's advice and to act in her best interests in the transaction. He said he did just that. He said that Mr Lewis explained to her the documents she had to sign. He said that Mr Lewis received instructions to prepare the trust deed on either the second or possibly the third visit to Kirks' offices. He accepted that Mrs Humphreys signed the trust deed at the house. He said she would have telephoned him and told him that there was a document to be signed and he would then have made the arrangements for it. He agreed it was surprising that there was no letter from Kirks to Mrs Humphreys enclosing the trust deed.
48. Dennis was referred in cross-examination to paragraph 30 of his witness statement, in which he described Mrs Humphreys as "a property owner" in relation to the house. He said he still considered the house to be hers. He said that her proposal to him had been that he would pay for the house and that when she died the house would be his. When asked what the position would be before she died, he replied that it was never discussed. He said that he regarded her as buying the house and that he would get it only on her death. He agreed the trust deed said nothing to that effect. He said the agreement was that she could stay there until her death. He said at one point that they did not discuss the question of a sale in her lifetime although he had said earlier in his evidence that he had told her that she could sell the house. He said it was only during the currency of the trial that he had first realised that, if the house was sold, he would be entitled under the trust deed to the net proceeds of sale. He said his understanding had been that if the house was sold and another bought in its place, the trust deed would just "pass on" to that other property. That evidence as to his understanding did not square with a statutory declaration he signed on 16 October 1998 in support of a caution against dealings with the house: he there declared that under the trust deed he was "entitled to the net proceeds of sale." But in cross-examination Dennis said he had not fully understood what that had meant. At that stage he was represented by solicitors, and I infer that the declaration, which bears the hallmarks of being professionally drawn, was drafted by them. Dennis said that he had a copy of the trust deed, which he had taken to his solicitors. He said Mrs Humphreys must have had the original. He did not accept that he had taken custody of the original from the outset. He said the house was Mrs Humphreys' and that she kept the documents from the beginning. He said he believed that the house would come to him on her death but he now understood that the trust deed did not in fact say that.

Events following completion of the purchase

(a) General

49. As I have said, the main thrust of Mrs Humphreys' inconsistent evidence in cross-examination was that she first learnt of the mortgage some time after the purchase (varying from a few weeks to a few months). Roy's evidence was also that he understood Dennis had purchased the house for cash. He said he believed Mrs Humphreys would secure Dennis's interest by making a will under which she left him the house although in cross-examination he said this was merely his assumption. He also said he understood that Dennis said he would maintain the house and help Mrs Humphreys find a bungalow in a more desirable area.
50. It is accepted that Dennis met the mortgage payments until June 1994, when (as is admitted) he stopped paying them. I find that during this period Dennis paid a total of just over £16,000. He explained in his evidence that he became unemployed in June 1994 (he said June 1995 in his witness statement) and was unable to continue making the payments after then. He resented the assertion in Mrs Humphreys' particulars of claim that he only made the mortgage repayments when it suited him: he said his financial circumstances were such that he could not continue to pay them, but said he had no then intention not to resume the payments as and when he could do so: and later he did resume their payment. As a yet further variation in her evidence, Mrs Humphreys said in paragraph 19 of her witness statement that it was only in 1995, after Dennis had stopped making the mortgage payments, that she first learnt of the existence of the mortgage, saying "I had no idea of the mortgage until then". She said in her witness statement she had to make capital payments of £1,050 from her pension so as to avoid the Nationwide's threatened possession proceedings. She said in cross-examination that it was in about late 2002 or in 2003 that the Nationwide threatened such proceedings. There is no documentary evidence indicating that the Nationwide ever did so and Mrs Humphreys said the threat was by telephone. She accepts that Dennis made further mortgage payments in 1999 (his evidence is that between March and November 1999 he made four payments totalling £800) and that he resumed making the mortgage payments in 2002 (his evidence is that since May 2002 he has been paying about £100 a month and that by November 2003 – his witness statement was made on 15 December 2003 – he had paid a further £2,047). In the meantime, the DSS had paid the interest due on the mortgage since February 1995. Dennis said that it was he who contacted the DSS about the problem with the mortgage payments and that the DSS told him that Mrs Humphreys would have to contact them, as she did.
51. Roy's evidence was that he first learnt of the mortgage in about 1995, when Dennis told him of his financial difficulties. Eileen's evidence was also that she understood that Dennis had bought the house for cash and that it was only "much later" that she found out that he had bought it with a mortgage. She said that "things eventually started going wrong." She said Dennis did not keep up the maintenance on the house and Mrs Humphreys began to get letters from the Nationwide saying the mortgage was not being paid and that they would repossess the house. No letters threatening to repossess are in evidence. Eileen said that Mrs Humphreys had told her shortly after the purchase that she had signed a lot of papers concerning the purchase but could not tell her what they were as she never read any of them.
52. In her witness statement Mrs Humphreys said that she believed that she and the other members of the family first learnt of the existence of the trust deed in the mid-1990s. In cross-examination, she replied that she did not know about any trust deed but that the family might have mentioned it. She said she did not discuss the deed with them because she did not understand it and nor did the family explain it to her. She did not tell them that she had not received any proper advice about the deed. She said that, before the discovery of the deed by the family, she had been looking at houses and bungalows to which she might move. She said that every time she found a place she liked, Dennis would say that she could not move there because there was too much work to do on it. She said in paragraph 20 of her witness statement that "Dennis told me that under our agreement I would be able to sell the Property and buy another one if I wanted to move. … we agreed that I would sell the Property and buy a smaller place in a more pleasant area where I would be able to live." Dennis disagreed with that evidence. He said that there was only one property which she liked to which he had had raised objection. That was a bungalow in Charterhouse Road, which he said needed too much work doing to it. He said he had no objections to the other properties she found: it was Mrs Humphreys who found that there were too many faults with them.
53. Roy's evidence was that no other family members were aware at the time of the purchase that Dennis had asked Mrs Humphreys to sign a trust deed. He volunteered his view that Mrs Humphreys would not have known what she was signing. He said in cross-examination it was also in about 1994 or 1995 that he learnt about the trust deed. He said that, following Dennis's difficulty with the mortgage, he and Eileen discussed a possible sale of the house, they found a buyer and his evidence was that Eileen found out that there was a trust deed. That evidence suggests that it was rather later than 1995 that Roy first learnt of the trust deed.
54. Mrs Humphreys said in paragraph 16 of her witness statement:

"16. Dennis has never honoured our agreement. He has done very little and my house is now in a bad state of repair with leaking windows. It has not been properly painted outside for over 20 years. He redecorated once downstairs and started laying a drive but left it unfinished at the hardcore stage. He promised to fit double glazing but never did. He promised to extend the kitchen but never did. He promised to repair the garden wall but never did. I have had to spend money on the property. …".

55. Roy claimed to be able to confirm that, to his knowledge, Dennis did not carry out the necessary maintenance to the house during the first half of the 1990s. He said he and Mrs Humphreys would telephone each other "every few weeks" to discuss the problem. He said he could also see the house was deteriorating. Mrs Humphreys adduced little evidence of any expenditure by her on the house. On 28 January 1999 she paid £50 to a Mr Thorne for investigating and repairing a leak in the airing cupboard. On 30 June 1999 she received, and I understand paid, an invoice for £146.40 (including VAT) from Charm Heating & Plumbing for the supply and installation of a new valve in the heating system. In November 2001 she paid £190 to LG Gas Services for work done to the central heating system. She said there was also a problem with a gutter, for which the Council paid. She was shown the schedule of works that Dennis claimed to have carried out to the house and garden. She admitted he had done the work there listed in relation to the garden. She did not admit the works he claimed to have done to the house.

(b) Subsequent events – the documents

56. The mortgage payments were in arrears in 1990 (£826.27 by October 1990). The Nationwide wrote directly to Mrs Humphreys about it on 11 October 1990, Dennis settled the arrears and thereafter kept the mortgage payments up until June 1994, after which he stopped the payments. The Nationwide sent Mrs Humphreys statements of her account at the end of each December from 1990 to 1997 (subsequent statements are not in evidence). In February 1995 the DSS commenced making payments to the credit of the mortgage account.
57. On 16 January 1997 Broomleigh Housing Association ("Broomleigh") wrote to Dennis, referring to a recent visit to Mrs Humphreys to discuss the possibility of their purchasing the house. Broomleigh asked Dennis to telephone them and to advise them about the outstanding mortgage. Eileen's evidence is that it was she who contacted Broomleigh with a view to their buying the house. Roy's evidence was that Mrs Humphreys herself went to Broomleigh to ask if they would buy the house back, although he was imprecise as to when this was.
58. On 24 April 1998 the Nationwide sent Mrs Humphreys a statement showing that the amount payable to redeem the mortgage in April 1998 was £26,165.89. By July 1998 the only payments being made to the credit of the account were from the DSS, payments which merely serviced the interest and did not reduce the capital.
59. In June 1998 Mrs Humphreys' solicitors, Pumfrey & Lythaby ("Pumfreys") entered the scene. They wrote to Dennis on 17 June 1998 saying they had been consulted by her. Their letter said that Eileen was "dealing with matters on [Mrs Humphreys'] behalf" and Dennis was invited to contact either Eileen or Pumfreys. I infer that Eileen was Pumfreys' primary source of instructions. Pumfreys referred to the purchase of the property and recorded their understanding that Dennis had paid for it and had put forward the trust deed. They said Mrs Humphreys had received no independent legal advice on the deed but that Dennis had placed it before her and demanded its signature. They asserted that it was voidable "in that she was misled by you as to the meaning of the same and not given the opportunity of obtaining legal advice with regard to the effect of such a Deed. Our Client was under the impression that you would recover some of your money upon her death, but that you would not hinder any attempt by her to move from the property during the course of her lifetime." They said the clause in the deed preventing Mrs Humphreys from selling without Dennis's consent appeared unreasonable "and doubtless this would have been pointed out to her had she obtained legal advice." Pumfreys said further:

"[Mrs Humphreys] merely wishes to move from this property and would suggest that any interest you do retain in the property be transferred onto that new property and be secured by way of a Charge. This would reflect that you own a certain percentage in the equity of the property which would be recoverable on the death of [Mrs Humphreys]. Please note that this percentage is to be agreed but should reflect the current interest you may have in this property."

60. Dennis instructed Hawgood Hobbs ("Hawgoods"). They replied on 23 June 1998. They said the trust deed had been drawn by Mrs Humphreys' former solicitors, Kirks, and had been "executed at [Kirks' offices] by [Mrs Humphreys] in the presence of [Joan Swift] and by [Dennis] in the presence of the Solicitor with [Kirks], all parties being present at the same time." I find that those assertions were wrong: Dennis executed the trust deed at Kirks' offices and Mrs Humphreys executed it at the house. Hawgoods said that Dennis rejected Pumfreys' arguments but that:

"[He] does not wish to be difficult and hinder [Mrs Humphreys] in any way and is prepared to give consideration to accepting an alternative Trust Deed/Charge on the property proposed to be purchased by [Mrs Humpreys] provided his position is preserved as per the terms of the existing Trust Deed."

61. On 21 October 1998 Hawgoods lodged a caution against dealings with the house. Mrs Humphreys was notified of it by a letter from HM Land Registry dated 22 October 1998. The caution was supported by Dennis's statutory declaration of 16 October 1998. He relied on the trust deed as entitling him to the net proceeds of sale. Dennis explained in his evidence that the lodging of the caution was the only protection he had for his investment in the house. He repeated in his witness statement that he had and has no objection to Mrs Humphreys selling the house:

"24 … so long as the protection of my investment remains on the new property. I think it would have been very foolish of me at that time or now to withdraw a caution which is the only protection of my investment when clearly the family relationship has broken down beyond retrieval. …

32. I do not, and have never wished for my mother to be deprived of a home. If my mother wishes to remain at the current property then I will continue to meet my obligations as best I can in relation to the mortgage thereon. If my mother wishes to sell the property and purchase alternative accommodation I am more than willing for her to do this subject to my interest in the property being transferred to any new purchase."

62. On 26 February 1999 Roy wrote a long letter to Dennis. He wrote that in 1998 "the family, and Eileen and myself especially" had been concerned about events following the agreement between Dennis and Mrs Humphreys to buy the house. He referred to the trust deed and said that now, in the tenth year of the mortgage, regular payments had not been maintained, payments having ceased in February 1995. He said there was continuing pressure from the Nationwide for some of the capital to be repaid and expressed concern that the mortgage could be called in at any time. He noted that the trust deed did not indicate the responsibility for the house "although it is understood you had agreed to carry out basic maintenance work during the period in which mum owned the house." He wrote that:

"We all feel, myself included, that over the years you have not given the maintenance issue adequate attention, and mum has had to incur financial outlay on repairs, due to your unwillingness to undertake responsibility for this work. I also understand that you have informed mum that you have no intention of undertaking any further work.

In the light of the above events, you are seen as not having honoured your side of the agreement, which was to buy and maintain the house as agreed. As a result, it is felt that you should no longer benefit by securing mums house on her death, and the agreement between mum and yourself is now seen as terminated. Mum was initially very much prepared to fulfil her obligations, if you had fulfilled yours."

Roy referred to his earlier (but rejected) proposal that Dennis should be given 5% of the value of the house when it was sold following Mrs Humphreys' death. He asserted that the trust deed was "now 'Void' for the reasons given." He said a copy of his letter had been sent to Mrs Humphreys, Eileen and Pumfreys.

63. On 4 March 1999 Dennis wrote to the Nationwide asking whether they had been pressurising Mrs Humphreys to pay any mortgage arrears, and for details of the total mortgage payments since 1989 and what had been paid in respect of insurance since February 1995.
64. On 5 March 1999 Broomleigh wrote to Mrs Humphreys offering to pay her £32,500 for the house. The purchase was to be on the basis that she would become their assured tenant. Roy's evidence was that the family advised Dennis of the offer but that he refused to agree to it. Roy said in his witness statement that the family might sell the house to Broomleigh regardless of Dennis's view, to which Dennis replied that he had:

"… secured the property by way of a Trust Deed [which] gave him complete control over the house. He said Mother had signed the Trust Deed and we could do nothing without his permission. This greatly annoyed me. I realised that Dennis had acted deviously in getting mother to sign this document. Mother obviously would not have understood the document and he had deliberately kept the other members of the family in the dark as to what he had done."

65. That evidence is a bit odd because the existence of the trust deed had surfaced some time before and had been the subject of Pumfreys' letter of 17 June 1998 and Roy's letter of 26 February 1999. If Roy's witness statement was intending to convey that it was only some time after 5 March 1999 that he and others learnt of the trust deed, he was confused in his recollection.
66. On 18 March 1999 the Nationwide replied to Dennis's letter of 4 March saying that they could only send out one copy of correspondence, namely to Mrs Humphreys, and that the details of the mortgage payments since 1989 were included in the annual statements sent to her every January. On 20 March 1999 Dennis wrote once more to the Nationwide asking them to reply to his enquiry as to whether they had been putting pressure on Mrs Humphreys to clear any arrears. The Nationwide replied on 25 March 1999 saying they had not.
67. On 20 March 2000 the Nationwide wrote to Mrs Humphreys informing her that they had converted her mortgage to an interest only one. As from 1 April 2000 her new monthly payment was to be £159.69, including a premium of £17.47 for insurance.
68. By 2001 Mrs Humphreys had put the house on the market. It was marketed by Cockburn, estate agents. In April 2001 she accepted the offer of a Mr White to buy the house for £117,500. Pumfreys acted for Mrs Humphreys. She was proposing to buy a substitute property at 38 Leverholme Gardens, Eltham, London SE9. The Nationwide informed Pumfreys that the amount required to redeem the mortgage on 30 May 2001 was £25,579.56. Pumfreys wrote to Dennis on 21 June 2001 enclosing a Form 71 for him to sign (authorising the removal of the caution). They sent a chaser on 28 June 2001, saying they hoped to exchange contracts on the sale by the end of that week. Hawgoods replied on 29 June 2001 saying that Dennis did not agree to the removal of the caution. They referred to their letter of 23 June 1998 and said that matters remained as there stated. I interpret that to mean that Dennis would agree to lift the caution if he was given a corresponding interest in any new property bought in place of the house. On 11 July 2001 Pumfreys wrote to HM Land Registry saying that Mrs Humphreys wished to "warn off" the caution. HM Land Registry served notice on Dennis. The response, by Hawgoods' letters of 13 and 16 July 2001, was that he objected to the removal of the caution. Pumfreys' response was to send HM Land Registry a copy of an unidentified letter from Roy, saying that "the person entitled to the Caution has not complied with the terms of the agreement and, therefore, we feel that the Caution should be removed." On 31 July 2001 HM Land Registry wrote to Pumfreys explaining that Dennis had shown cause that he had an arguable case for the retention of the caution. The letter explained the various procedural alternatives open to Mrs Humphreys. The Nationwide gave Pumfreys a revised statement for a redemption on 21 August 2001. Roy wrote an impatient letter to Dennis on 6 August 2001. He proposed that Dennis should agreed to the sale on the basis that he should have a 15% interest in the equity of the new property, or £20,000, whichever was greater at the time of its sale; Dennis was also to pay the costs associated with the sale and his "on-going claim on the property." On 17 August 2001 Pumfreys wrote to Hawgoods saying that they agreed that Dennis could transfer his caution to the new property that Mrs Humphreys was buying and that a restriction could be placed on it. They wrote that:

"[Mrs Humphreys] states that the trust deed executed in November 1989 does not accurately correspond with the current situation and we feel it is for your client to let us have counter proposals for agreement as to the share he should eventually receive from any proceeds from the sale of 38 Leverholme Gardens."

69. On 17 August 2001 Pumfreys wrote to Hawgoods repeating the proposal Roy had made in his letter of 6 August. Hawgoods rejected it on 21 August 2001. They said that Dennis maintained that the trust deed fairly reflected the position agreed at the time. He would withdraw the caution if he was given the benefit of a like trust deed on the new property, but would first need full details of that property and would wish to inspect it prior to any exchange of contracts. He would also "give consideration to being a guarantor with respect to a proposed mortgage by [Mrs Humphreys] of the alternative property." By September 2001 Mrs Humphreys had withdrawn from the propose sale of the house to Mr White.
70. On 10 December 2001 Pumfreys wrote Dennis a letter before action. The claim form was issued on 22 March 2002.

Findings of fact

71. I have not found the resolution of the factual disputes easy. A major contributor to the difficulty is that the case was started so late (nearly 13 years after the purchase of the house) that memories of what happened in relation to the purchase and what was said at the time must inevitably have become significantly dimmed. The passage of time is such that it is likely to have resulted in the witnesses forgetting, or misremembering, the relevant events and the evidence showed that there has been a good deal of forgetting or misremembering. The evidence of the family witnesses was in material respects imprecise and inconsistent, and Mrs Humphreys' evidence in particular suffered from a high degree of internal inconsistency. The problems are compounded by the unsatisfactory inadequacies of Kirks' file. If Mr Lewis had done his job properly he would have made attendance notes of his meetings with Mrs Humphreys and Dennis which would have recorded the instructions he had received and the advice he had given about the transaction generally and the trust deed in particular. He made no such notes, an omission I regard as inexcusable. He did not even write a letter providing a written explanation of the effect of the trust deed. His oral evidence was that he was unable to recall this particular transaction and so could not add any flesh to the bones of his minimalist file. He could only say what he would have done and identify the sort of matters upon which he would have advised Mrs Humphreys.
72. As for the other witnesses, Roy and Eileen's evidence was of little direct assistance on the main issues, save to the extent that they were able to cast light on the discussions leading up to the purchase. Mrs Humphreys' evidence on crucial matters was very difficult to assess. The essential thrust of her oral evidence was that she had undertaken the purchase transaction in an almost unbroken daze of total incomprehension. She claimed to understand nothing of what was said at Kirks' offices. No-one explained the trust deed to her, she did not know what it meant and she never discussed it with Dennis. She read none of Kirks' letters and believed that Dennis paid for the house in cash. She said he promised to maintain it and carry out certain works of improvement to it but failed to do so. She appears to have recognised that her deal with Dennis was that he was to have the house on her death but she does not appear to have been under any understanding that he would only do so under a devise of the house to him in her will: there is, in particular, no suggestion that she ever made a will leaving him the house or ever agreed or intended to do so. It is, therefore, unclear from her evidence how she understood Dennis was supposed to be able, upon her death, to enjoy the fruit of her deal with him: I understand her to reject the notion that she agreed that he might have been entitled to do so under the trust deed, which she said she did not discuss with Dennis.
73. Mrs Humphreys' oral evidence is to be contrasted with her witness statement of 21 February 2002 in paragraph 12 of which she made a statement whose sense is that she knew perfectly well that Dennis was buying the house with a mortgage and that one of the pre-purchase terms which they agreed was that he would only be entitled to the house if he paid all the mortgage instalments. She also there said that she and Dennis agreed that the trust deed should say this, evidence which suggests that they did discuss the trust deed. Her main witness statement, made on 15 November 2003, refers to the pre-purchase discussions, in particular as to whether the purchase was to be by cash or by mortgage. Her evidence there is that Roy proposed to arrange a mortgage for the purchase but that Dennis then proposed that he would buy the house for cash. None of that evidence squares with either Roy's or Dennis's evidence. But its importance is that, in my view, it does not justify a conclusion that Mrs Humphreys does not understand at least the basics of what a mortgage is: I cannot believe she would have referred to the discussions about mortgages unless she did have such an understanding. I do not overlook that in paragraph 7 of her statement of 21 February 2002 she said that she did not understand mortgages and trusts, but that expression of ignorance did not prevent her from saying in paragraph 12 that she recalled that part of her deal with Dennis was that he would only be entitled to the house if he made all the mortgage payments.
74. Dennis's evidence is that there was never any question of the purchase being a cash one and that Mrs Humphreys knew and agreed from the outset that he alone of the seven children was going to be financing the purchase and was going to be doing so by a Nationwide loan secured by a mortgage on the house. He denied that there was any formal agreement with Mrs Humphreys that he was to carry out repairs or improvements to the house, although he did say that he would do the repair works she could not do herself; and of course he had his own interest in keeping the house in repair since he was, so he said he understood, to become its owner on her death. His evidence is that Mr Lewis explained the trust deed to both of them at one of their meetings with him and that when he, Dennis, later asked her if she had understood the explanation she chided him and said that she was not stupid. He also gave evidence in this context of matters of which Mrs Humphreys was particularly concerned in relation to her agreement with him, namely that, if he predeceased her, neither his ex-wife Anita nor his children would be able to dispossess Mrs Humphreys. He said he told her they would not because the house would be in her name.
75. Coming to my findings on the differences between the witnesses, I find first that Mrs Humphreys understood perfectly well, and from the outset, that Dennis was raising the whole purchase price on mortgage. To the extent that she sought to paint a different picture in the course of her inconsistent evidence, I find that that evidence was untruthful. As I have said, her witness statements reflected (in my view) that she had a sufficient understanding of the essentials of what a mortgage is and her first statement made it clear that she knew of the mortgage from the outset. Moreover, a finding that Dennis lied to her that he was paying cash would presumably necessitate a further finding that he was assuming that she would at no stage discover the fact of the mortgage from either Mr Lewis or the Nationwide. There is in my view no warrant for any such finding. Dennis was completely open about the mortgage with Mr Lewis. He must have known that Mr Lewis would inform Mrs Humphreys of the mortgage, as of course he had to and did. Dennis took her to the Nationwide where he arranged, in her presence, for a mortgage loan and she (so she says) signed various papers. Her evidence that she understood that the purpose of this visit was simply to arrange for Dennis to draw out the necessary cash is evidence I do not accept: I regard it as wholly improbable. In addition, Mrs Humphreys signed the mortgage herself, as the person who (as between herself and the Nationwide) was primarily liable to make the repayments, and she did so in the presence of Mr Lewis, who, I find, must at least have explained to her the nature of the document she was signing. She also signed the trust deed which refers to the mortgage in recital 2 and in clause 4, although I am prepared to accept that the probabilities are that she did not read the deed before signing it. She did not, of course, sign that document in Mr Lewis's presence.
76. In making these findings, I record that I fully accept that Mrs Humphreys is not, and was not in 1989, a woman by any means experienced in matters of this sort. But if, as I am apparently invited to do, I am to accept that in February 2002 she had a sufficient grasp of such matters to be able to confirm the truth of the assertions to which she deposed in the statement she then made, I see no reason to believe other than that, nearly 13 years earlier, in the relative youth of her middle 60s, she was well able to, and did, understand that Dennis was raising the whole price on a mortgage loan. That is what she said in paragraph 12 of her February 2002 statement, it appears to me likely to be true and I find that it was.
77. Roy's evidence, taken at face value, is that all that was ever discussed was a purchase for cash and that he told Dennis that he could provide half the required funds. He then learnt, so he says, that Dennis had gone ahead with a cash purchase on his own and so he applied his own funds in the purchase of a boat. I find it difficult to know quite what to make of Roy's evidence. As I have said, his evidence that he had cash readily available is not supported by any documents, nor is the evidence about the purchase of the boat. The case concerns a purchase which had been the subject of consideration from at least 1986 and it appears that Dennis was the only one of the seven children who ever played a concrete role in it. If Roy's evidence is to the effect that in, say, June 1989 he proposed to Dennis that the two of them should together buy the house for cash, it is not clear to my why he did not follow the matter up and get a positive response from Dennis. I understand that the substance of Roy's evidence is that the next thing that he learnt of the matter – several months later - was that the purchase had been completed. What had he been doing, writing or saying in the meantime? He says that he was annoyed to learn that Dennis had gone it alone. He does not explain why. If he felt that he ought to be lending a hand in the maintenance of the house, he was and remained free to do so. If he was annoyed that Dennis's unilateral action meant that he would not inherit a share of the house on Mrs Humphreys' death, then it is not clear to me why he did not raise the matter with Mrs Humphreys: he had apparently been willing to discuss this aspect of the matter before the purchase, so why could he and did he not also do so afterwards? If he had the cash available he said he did, it would have been easy for him to reimburse Dennis for half. Dennis might not have been keen but Mrs Humphreys might well have had a view on the subject. Apparently, however, Roy said and did nothing, which I find strange. I also do not regard Roy as a wholly disinterested witness in this case, and I therefore approach his evidence with at least some caution. Whilst I find that Mrs Humphreys did intend to give Dennis the whole beneficial interest in the house (although there is a dispute as to the terms on which she understood he was to have it), she made it clear in her evidence that she wants to unscramble the trust deed so that she can treat all her children equally. I interpret that as meaning that she wishes to maximise her own estate so that she can leave it to her children. Those children include Roy, who has for some years been playing a leading part in promoting her case against Dennis and in seeking to reduce Dennis's interest. In the circumstances, I am not prepared to accept at face value Roy's evidence as to his claimed readiness and willingness to provide half the purchase price in cash. Nor, having regard to the uncertainty as to precisely what was being said, discussed and proposed between (at most) three of the seven Humphreys children at about the time of the purchase am I prepared to accept or find that Dennis adopted a deliberate policy to shut out anyone else from the purchase so that he could proceed with it on his own. On the other hand, Dennis admits that Roy had apparently declared himself as willing to participate in the repayment of a mortgage of the house, but he then simply took June's word that Roy was no longer able to do so: he did not trouble to clear the matter with Roy himself, but simply proceeded on his own in the purchase. I accept Dennis's evidence about the exchange with June but I find it surprising that, before embarking on the transaction, he did not first clear the position direct with Roy. I find that, at least to this extent, Dennis was preferring his own position as someone who, if he was the sole participant in the purchase, would be the sole beneficiary of the long term benefits that it would offer.
78. As regards the relatively minor issue of who, as between Dennis and Mrs Humphreys, decided that Kirks should be instructed in the purchase, I find it was Mrs Humphreys who did so although I also find that it was Dennis who then made the overtures to Kirks on her behalf and got the matter up and running. As I have said, I find that Mrs Humphreys made at least two visits to Kirks, on both occasions with Dennis.
79. As to the matter of the trust deed, this was drafted by Mr Lewis. There is no attendance note recording the giving by him of any advice to Mrs Humphreys and/or Dennis of its meaning and effect. That was a unprofessional omission on Mr Lewis's part since he owed a duty to explain it at least to Mrs Humphreys (whom he regarded as, and whom I find was, his client) and probably also to Dennis; and he ought to have recorded his advice in an attendance note. But the absence of an attendance note does not mean that no advice about the deed was given. Mr Lewis's evidence was that he would have advised Mrs Humphreys about it although as he cannot recall the case he equally cannot recall whether he did so advise her. It is probable, and I find, that he did give some advice about the effect of the deed. That was Dennis's evidence; and Mr Lewis's terse postscript reference to the trust deed in his letter to Mrs Humphreys of 27 October 1989 is only explicable on the basis that he was referring to something she already knew about. It is likely that the advice was given on the earlier occasion in October 1989 when Mrs Humphreys attended Kirks' offices to sign the transfer and the mortgage. There is, however, no evidence as to what that advice was or whether it was given in relation to a draft that had already been prepared or whether Mr Lewis simply took the parties' instructions as to what they wanted, advised them as to how they could be implemented and then prepared the form of trust deed which they both executed. In particular, in the complete absence of any evidence touching on the matter, I find myself unable to make any findings as to the extent to which Mr Lewis did or did not advise Mrs Humphreys on wider matters affecting her position: for example, (i) what the position would be if Dennis defaulted on the mortgage and the Nationwide sold the house; (ii) what risks she faced in this respect and how they might be mitigated; (iii) matters relating to the repair and maintenance of the house; (iv) Mrs Humphreys' right (if any) to move to different accommodation; or (v) the fairness of (in effect) giving Dennis the full benefit of the 60% discount. I add that I accept Mrs Humphreys' evidence that Dennis did most of the talking at the meetings with Mr Lewis and that her hearing problems made it difficult to understand all that was said; and Dennis admitted that she does not have advanced powers of comprehension and said that he explained to her both Mr Lewis's advice and his letters.
80. There is also no covering letter from Mr Lewis sending the trust deed to Mrs Humphreys. I find that that is because it was not posted to her but was at some stage personally collected by Dennis, who then took it to the house for signature by Mrs Humphreys, her signature being witnessed by Joan Swift. I find that Dennis gave Mrs Humphreys no additional explanation about the deed on that occasion beyond whatever explanation Mr Lewis had provided on the earlier occasion.
81. As to what the oral arrangement was between Dennis and Mrs Humphreys, I find that the essence of the deal between them, as they understood it, was (i) that Dennis would raise the money on mortgage from the Nationwide; (ii) that he would make the mortgage repayments and indemnify Mrs Humphreys from liability for them; (iii) that she would be entitled to occupy the house for life rent free; and (iv) that on her death the property would belong to him absolutely. Contrary to Mrs Humphreys' evidence, I do not find that it was an express part of the agreement that Dennis should only be entitled to the property once he had paid all the mortgage instalments. Contrary to her evidence in cross-examination, I also find that there was no agreement that the house would be sold within a year so that she could move into a bungalow (any such sale would trigger the repayment of the discount or part of it, which makes it unlikely that it was proposed; and Mrs Humphreys' evidence that it was part of the deal also seems to me to sit ill with her evidence that Dennis agreed to fit double glazing to the house and extend the kitchen). I accept, however, that Mrs Humphreys and Dennis expressly recognised that Mrs Humphreys might want to sell the house within a few years and move into other accommodation, and I find that Dennis indicated to her that this could be done, although I also find that the matter was not discussed in any further detail. I have already found that there was no agreement as to the carrying out by Dennis of any repairs and maintenance to the house: it was contemplated that he would help her out in this respect, but the matter was, I find, left on the informal basis that might be expected between family members. I find that the trust deed was drafted by Mr Lewis with a view to giving effect to these terms, although he does not appear to have focused in any way on the mechanics by which another house might be substituted for the house: as drawn the deed does not contemplate any such substitution.
82. Contrary to Mrs Humphreys' evidence, I find that Dennis has not acted so as to frustrate a sale of the house and the purchase of an alternative dwelling in its place. The documentary evidence traced the history of the proposed 2001 sale in some detail, and I find that Dennis was in principle prepared to agree to it provided that he was given a like interest in the new dwelling as the trust deed gave him in the house. The reason the sale did not go ahead is because Mrs Humphreys was not prepared to agree to that. As regards the earlier alleged abortive sales, the evidence was too imprecise and generalised to enable findings as to who, and in relation to which transaction, was or might have been at fault. The evidence did not satisfy me that Dennis was at fault.

The issues

(a) The trust deed

83. Ms Hayes submitted that the trust deed was void for uncertainty, alternatively that it gave Mrs Humphreys no right of occupation in the house. Those submissions formed part of Mrs Humphreys' case that the transaction was significantly disadvantageous to her and were relevant to her case that the trust was procured by undue influence or that it represented an unconscionable bargain or that it was vitiated by mistake. I do not accept either submission.
84. First, I can identify no feature of vitiating uncertainty in the trust deed. I regard its effect as clear although I accept that it might not be easily understood by a lay person unfamiliar with the concept of a trust for sale. The effect of the deed is that Mrs Humphreys, as the registered proprietor of the house, was to hold it upon trust for sale, but Dennis was not to be entitled to compel a sale during her lifetime save with her prior written consent. When and if she were so to consent, any sale was to be effected in such manner as she and Dennis agreed. Upon completion, Dennis was to be absolutely entitled to the net proceeds after the repayment of any mortgage. In the meantime, he was to be liable for all mortgage repayments and was to indemnify Mrs Humphreys against any liability for them.
85. Secondly, I also reject Ms Hayes's further submission that the deed gave Mrs Humphreys no right of occupation of the house during her lifetime. It is correct that it does not spell out such a right expressly. But, construing the deed against the background in which it was made, I regard it as obvious that it impliedly created such a right. The choice of description of Mrs Humphreys as "the Nominee" might be regarded as pointing away from any suggestion that she was being given any substantive interest in the house. But at the time the deed was executed she had been in occupation of it as her home for decades, she was still so occupying it and she was of course to continue to occupy it. It is obvious that Dennis was not entitled to compel her to give up possession to him on demand, since that would make nonsense of the provision in the deed preventing a sale during her lifetime save with her consent. It is admitted that Mrs Humphreys has no interest in the proceeds of any sale or its income. If, therefore, as Ms Hayes submitted, Dennis was entitled to turn Mrs Humphreys out of the house at will, what possible reason can there have been to include in the deed a provision which precluded a subsequent sale save with her prior consent?
86. In my judgment the scheme implicit in the trust deed is that, during her lifetime, Mrs Humphreys was to be entitled to occupy the house rent free and that such right of occupation could only be terminated upon both parties agreeing to a sale. I find that the deed did, therefore, give Mrs Humphreys a right of occupation for life. Dennis's evidence was that his understanding of the deed was that Mrs Humphreys owned the house during her life and that he would only get it upon her death. Mrs Humphreys' evidence was similarly to the effect that the arrangement was that Dennis would get the house on her death. Their respective views may not be a comprehensively accurate way of defining their respective rights in the house but they appear to me to convey the essence of the deed's effect, which was to give Mrs Humphreys a life interest in the house and Dennis a reversionary interest in it on her death. There was, I find, no question of the parties having intended, let alone agreed, that Mrs Humphreys should be the sole beneficial owner of the house and that Dennis's investment was to be rewarded by a testamentary devise of the house to him.
87. At least one criticism of the deed can be made, namely that it does not attempt to deal expressly with the substitution of another dwelling for the house. I find that this was not discussed in any detail, which is likely to be the reason for the omission. Its failure to deal expressly with the matter might not necessarily represent a fatal problem in its sensible operation. The parties would be unlikely to agree upon a sale during Mrs Humphreys' lifetime except on terms that another property was substituted for the house and they were given like rights in that property. Once they had agreed upon the proposed substitution then it is difficult to see why the matter should not proceed to a satisfactory completion. The proof of that particular pudding was demonstrated in 2001: Dennis was prepared to agree to a substitution, but Mrs Humphreys was not. There could, however, be at least some difficulties in practice, in particular as to whether only the net proceeds of sale (after redemption of the mortgage) were to be applied in the new purchase, or whether (so far as practicable) the unredeemed mortgage was to be transferred to the new property. This could make a significant difference in relation to what could be bought in place of the house, but the trust deed of course says nothing about it.

(b) Presumed undue influence

88. Ms Hayes's main submission is that Mrs Humphreys' execution of the trust deed must be presumed to have been induced by Dennis's undue influence upon her. I was referred to the decision of the House of Lords in Royal Bank of Scotland plc v. Etridge (No 2) [2002] 2 AC 773, in particular to paragraphs 12 to 29 in the speech of Lord Nicholls of Birkenhead. I derive from that speech that Mrs Humphreys will establish that Dennis is presumed to have induced the trust deed by his undue influence if (a) she reposed trust and confidence in him in connection with the transaction and (b) the transaction it effected is not readily explicable by the relationship between her and Dennis. As to the latter matter, the critical question is whether Mrs Humphreys suffered a disadvantage sufficiently serious to require evidence from Dennis to rebut the presumption that, in the circumstances of the parties' relationship, the transaction was procured by his undue influence (see paragraphs 21 and 25 of Lord Nicholls's speech). If Mrs Humphreys proves both matters, then the burden shifts to Dennis to rebut the presumption which flows from their proof. See also paragraphs 151 to 156 in the speech of Lord Scott of Foscote.
89. There is no dispute that Mrs Humphreys reposed the requisite degree of trust and confidence in Dennis, and I understand Dennis's concession on this to mean that such reposing was in relation to the whole matter of the purchase of the house. The main area of difference between the parties is as to the second hurdle that Mrs Humphreys has to surmount. On that I was referred to Popowski v. Popowski [2004] EWHC 668 (Ch), unreported, a decision of Mr Richard Sheldon QC sitting as a deputy High Court Judge in the Chancery Division. On its facts the case bore a similarity to the present one. Mr and Mrs Popowski were longstanding tenants of their council house and were entitled to buy it at a 60% discount. They purchased it with the aid of a mortgage under an arrangement under which one of their four children – Janek, the defendant – assumed responsibility for making the repayments. They executed a trust deed in his favour under which they held the house on trust for him, he in turn giving them an express right to occupy it during their lives. Under the deed Janek covenanted to pay all the mortgage repayments, the relevant clause also containing a provision that "In the event of [Janek] failing to pay all monies due under the said Mortgage then this Deed shall be null and void and [Mr and Mrs Popowski] shall stand possessed of the property free from the provisions on this Deed." In fact, Janek faithfully made all the payments. Mr Popowski died and his widow later sought to set the trust deed aside on the basis of presumed undue influence.
90. The judge directed himself by reference to Lord Nicholls's speech in Etridge. He held that Mrs Popowski had proved that she placed relevant trust and confidence in Janek. He then (at paragraph 29) turned to consider "whether the transaction constituted a disadvantage sufficiently serious to require evidence to rebut the presumption [of undue influence]", drawing on paragraph 25 of Lord Nicholls's speech. He noted the provision in the trust deed under which Janek obtained the whole beneficial interest in the house but was at risk of forfeiting it if (which had not happened) he did not make all the mortgage repayments. He noted that the purchase could not have gone ahead but for Janek's involvement since neither Mr and Mrs Popowski nor their other children could have financed it. He said it was not therefore a case in which the parents were divesting themselves of any interest in the house which they already had: without Janek, they could not have enjoyed the benefit of the discounted purchase at all. In case he was wrong in that approach, he then considered whether, looking at the transaction as a whole, it was sufficiently disadvantageous to Mrs Popowski to require an explanation about it from Janek. In that context he regarded her right of occupation for life, rent free, as of considerable value: she was 54 at the time of the trust deed. He regarded this as providing her with security and as being valuable in financial terms - it saved her substantial rent - and as balancing out the value of any disadvantage (if any) in losing the benefit of the 60% discount. He referred to various further matters, peculiar to the case before him, which I need not detail. He concluded that the disadvantage to Mrs Popowski in the transaction was not sufficiently serious to give rise to any presumption of undue influence. In case he was wrong on that he went on to consider whether Janek had anyway provided an explanation sufficient to rebut the presumption. He held that he had.
91. Mr D'Cruz submitted that I should approach the present case in a similar way, although he did not of course suggest that the decision in Popowski provided a conclusive answer. That decision turned on the facts of the case, just as my decision in this case must turn on the facts as find them. He did, however, submit that the Popowski case provided a pointer as to how I could and should also decide this one.
92. Ms Hayes submitted that for various reasons the trust deed was sufficiently disadvantageous to Mrs Humphreys to justify a presumption of undue influence. She said the case was quite different from Popowski. She said that before the purchase Mrs Humphreys was in the position of a council tenant with a right to a 60% discount if she purchased. She had a secure right of occupation. She was on housing benefit which paid her rent. The Council did the repairs to the house. By contrast, her position since the purchase has been, Ms Hayes submitted, that of a mere licensee with no right to remain in the house, although I have already held that I do not accept that submission but find that Mrs Humphreys is entitled to occupy the house for life. Ms Hayes submitted further that Mrs Humphreys became primarily liable to the Nationwide for the mortgage repayments, but had no funds with which to meet them and was wholly dependent on Dennis to do so. She pointed out that when in 1994 he ceased the payments, Mrs Humphreys had to go back on to housing benefit and had herself to pay capital sums of £50 a month (totalling £1,050) out of her pension. She said that Mrs Humphreys was also unable to sell or move, because on any sale Dennis was entitled under the trust deed to all the proceeds. That submission, however, gave no recognition to the fact that Dennis has, as I have found, made it clear that he was prepared to agree to an alternative house being substituted for the house, provided that he was given the like interest in it. Ms Hayes also submitted that Mrs Humphreys has been disadvantaged by the fact that Dennis has not carried out the works of repair he is said to have promised, although I have also found that, contrary to Mrs Humphreys' case, this was not in fact part of any formal bargain between her and Dennis. Ms Hayes is, however, entitled to submit that in this respect Mrs Humphreys' purchase of the house marked the termination of the Council's repairing obligations. Ms Hayes also submitted that Mrs Humphreys was disadvantaged by the fact that she has wholly disposed of the benefit of her 60% discount. She said that so long as the transaction with Dennis was uncompleted, Mrs Humphreys had the opportunity to make arrangements with others for the purchase, being arrangements under which she could have personally enjoyed all or part of the discount. She submitted that Mrs Humphreys could have raised a small mortgage and said further that four of her children were in principle willing to take part in the right to buy. Had they done so she would have been more secure than she was under the arrangement with Dennis, he alone being responsible for the mortgage payments. Ms Hayes said that under that arrangement Mrs Humphreys was assuming a real risk that Dennis might default, as in 1994 he did. The arrangement was, therefore, an unsuitable one. Ms Hayes submitted that, overall, it called for an explanation.
93. I found the arguments each way on this issue to be fairly finely balanced and they have caused me some anxiety. I have, however, come to the conclusion that, in all the circumstances, the transaction effected by the trust deed does call for an explanation from Dennis. I find that it does give rise to a presumption of undue influence and that the burden is therefore on Dennis to rebut it.
94. Viewing the transaction from Dennis's viewpoint, it was very beneficial. At a cost to him of 40% of the value of the house he acquired a reversionary interest in 100% of the house. The value of that to him should not be overstated, because his enjoyment of his interest was in practice likely to be deferred until his mother's death. She was 64 at the date of the trust deed and could be looking forward to three decades or more of healthy life. But in principle Dennis's investment was obviously a very good one, as I have no doubt he regarded it. Apart from the mortgage his further obligations in relation to the house were virtually nil. In particular, whilst I accept that he has in practice done material works to it, both internally and externally, I also find that he assumed no enforceable obligation to carry them out.
95. Viewing the transaction from Mrs Humphreys' viewpoint, the benefits are less obvious. The purchase extinguished her prior obligation to pay rent, but as almost the whole of her rent was being paid by her housing benefit that represented only a marginal advantage. Whereas previously the Council was under clear repairing obligations, Dennis assumed no like obligations, a matter which can be said to have been foreseen as having the potential for giving rise to differences between them and which has in fact done so. Whereas previously she enjoyed the security of tenure which her tenancy gave her, her security in the house became dependent on Dennis duly honouring the mortgage obligations. There could, in 1989, be no certainty that his business activities would continue to be sufficiently successful to ensure that he would be able to meet those obligations punctually and in the event they were not. A continuing default by Dennis carried the risk of dispossession by the Nationwide, and the net proceeds of a subsequent sale would, under the trust deed, belong wholly to Dennis: Mrs Humphreys would not be entitled to a penny. And although part of Mrs Humphreys' longer term expectations were to sell the house and to buy another in its place for her continued occupation, the trust deed made that operation dependent on Dennis's consent. The deed does not in fact address the question of the acquisition of a substitute property at all, let alone enable Mrs Humphreys, as the life tenant, to call the tune about any sale and repurchase. Further, as regards the 60% discount, this was in substance Mrs Humphreys' contribution to the purchase. Even accepting Mr D'Cruz's point that the benefit of the discount was one that Mrs Humphreys was unable to unlock without the assistance of the key that Dennis provided, it does not follow that fairness between them demanded that he should enjoy the whole of that benefit. Mrs Humphreys had seven children and it seems to me that there is much to be said for the view that it would be fair for her to retain at least a part of the benefit of the discount as part of her free estate: it may be that Dennis had the golden key which unlocked the benefit but, once unlocked, it was in reality something that she had earned.
96. In my judgment, therefore, the transaction reflected in the trust deed is a very one-sided one. I consider that it raises real questions as to whether, from Mrs Humphreys' viewpoint, it was a fair or sensible transaction; and it seems to me obvious that, if the purchase of the house with Dennis was to be pursued, there were several respects in which Mrs Humphreys' position could, and on one view should, have been improved. In particular, consideration could and should have been given to the vulnerability flowing from her reliance on Dennis punctually meeting the mortgage payments. This could have been improved in at least two ways. First, by seeing whether any other family members (Roy, for example) was willing to join in the transaction, so that Mrs Humphreys would have the benefit of one or more additional covenants. Secondly, by including a forfeiture provision in the trust deed similar in effect to that in the Popowski case, the object being to provide that, on any forced sale of the property by the Nationwide, Dennis would forfeit his entire interest under the trust deed and Mrs Humphreys would become absolutely entitled to the net proceeds. Any such provision might need some careful thought and drafting but in the event of disaster it could have provided a valuable safeguard for Mrs Humphreys. In addition, express consideration should have been given to the inclusion in the trust deed of express maintenance and repairing obligations. Further, and importantly, consideration could and should have been given to whether (and, if so, the mechanics whereby) a substitute property might be bought in place of the house, dealing in particular with whether, if practicable, the current mortgage should be transferred to the new house. Finally, consideration needed to be given to the extent to which fairness demanded that Mrs Humphreys ought to have retained the benefit of at least part of the discount.
97. There is no evidence that any express consideration was given to any of these matters. The picture which the evidence painted is that of a relatively simple 64-year old woman with hearing difficulties becoming a party to a transaction in which Dennis played a major part. Whilst I have found that Mrs Humphreys chose Kirks as her solicitors, I have also found that it was Dennis who did all the talking at the meetings with Mr Lewis and I have accepted Mrs Humphreys' evidence about these meetings to the extent that I am satisfied that her hearing problems made it difficult for her to understand all that was going on. Dennis admitted in cross-examination that she does not have advanced powers of comprehension and said that he also explained Mr Lewis's advice to her so she would understand it. He said he similarly explained the letters Mr Lewis wrote. That underlines what I regard as the obviously dominant position that Dennis played in the transaction and the position of relative vulnerability of Mrs Humphreys' position in it. There is, however, no evidence to suggest that the sort of matters I have highlighted were ever the subject of discussion at the meetings with Mr Lewis, let alone that Mr Lewis had a one-to-one conversation with Mrs Humphreys in which he explained them.
98. Taking account of all these matters, I have concluded that the transaction effected by the trust deed does call for an explanation by Dennis. The effect of my findings is that the burden shifts to Dennis to satisfy the court that Mrs Humphreys entered into the trust deed with a full understanding of its merits and demerits and of her own free and uninfluenced will. I have probably said enough to indicate that I find that Dennis has not discharged that burden. In the particular circumstances of this case I consider that he could probably only have done so if he was able to show that Mrs Humphreys had first been given comprehensive and independent legal advice about all aspects of the proposed transaction. He was not able to show that. I find, therefore, that the trust deed was induced by Dennis's undue influence.

(b) Is Mrs Humphreys' claim to set aside the trust deed for undue influence barred by limitation or laches?

99. Mr D'Cruz did not persuade me that Dennis has a defence under the Limitation Act 1980. I prefer the view that, so long as the undue influence persists, claims can be brought whatever the period since the transaction; but that once the complainant is no longer under the defendant's influence, a claim to set the transaction must be brought within a reasonable time. A failure to do so will be likely to attract a defence based on the equitable doctrine of laches, described as follows by Sir Barnes Peacock in Lindsay Petroleum Co. v Hurd (1874) LR 5 PC 221, at 239, 240:

"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material."

100. One matter which was in dispute on the evidence was whether Mrs Humphreys was in possession of the trust deed or a copy of it at all times from the completion of the purchase in 1989. I find that she was not in such possession and that Dennis retained the original. I further find that it was not until early 1998 that a copy of the trust deed came into the possession of Pumfreys so that they were able to advise Mrs Humphreys about it. Prior to then her knowledge of the actual contents of the deed was confined to whatever advice Mr Lewis had given her about it, as to which there is no evidence. I have already made my finding that I am not satisfied that she was given comprehensive advice about the effect of the deed.
101. Ms Hayes submitted that Mrs Humphreys remained under Dennis's influence until about 1994, when he stopped making the mortgage payments. I find it difficult to understand quite on what basis I can make a finding one way or the other on that submission. The present claim is, however, to set the trust deed aside and Dennis's appeal to the doctrine of laches requires me to assess whether the passage of time since 1989 makes it unjust for me to give Mrs Humphreys a remedy on her undue influence claim. One circumstance in which it would be so unjust would be if I were able to conclude that, prior to the bringing of the action, Mrs Humphreys had waived her claim to set the deed aside. As it seems to me, however, there can be no question of her having done so at any time before 1998. That is because I am not satisfied that, before then, she had a sufficient understanding of the deed and its alleged demerits to be able to effect a valid, implied waiver. I accept that since 1998 Mrs Humphreys has had the benefit of advice about the deed but nothing she has done since then can, in my view, be regarded as waiving her claim to set it aside. On the contrary, she has made clear her challenge to it.
102. She did, however, still take some four years from 1998 before issuing her claim form in this action, a delay which surprises me. Having regard to the prior passage of time since 1989, I should have expected her to commence her claim with the minimum of delay. For reasons given, I do not, however, regard that further passage of time as being evidence of any acquiescence in the regime imposed by the trust deed. Mr D'Cruz submitted that the real prejudice to Dennis resulting from that further delay was that he had continued (since 1999) to make the mortgage payments and that the memories of witnesses had inevitably become further dimmed so as to reduce the quality of the evidence. I should point out that Mr D'Cruz in fact submitted that Dennis had suffered relevant prejudice right from the beginning, the prejudice being his making of the mortgage repayments and the carrying out of work to the house.
103. I take the view, for reasons given, that the critical period of delay I have to consider is that between the emergence of the trust deed in 1998 and the commencement of the claim in March 2002. I agree that the witnesses' memories of the relevant events in and before 1989 will have faded very considerably in the years since then, although I doubt whether, since 1998, there will have been very much additional fading. The bulk of the damage in this respect will have been suffered very much earlier. For example, I doubt if Mr Lewis's recollection of the transaction would have been materially better in, say, 1995, than it was in 2004. As regards the suggested prejudice suffered by Dennis in the continued payment of the mortgage instalments since 1999, I do not regard that as prejudice at all. For reasons to which I will come I take the view that, if the trust deed is set aside, the house must be regarded as held upon a constructive trust for Mrs Humphreys as to 60% and for Dennis as to 40%, those percentages being, I consider, their respective contributions to its purchase. Dennis's share of that was represented by his assumption of the obligation to make the mortgage repayments, and the payments he has made since 1999 were simply in part discharge of that obligation.
104. In the circumstances outlined, I am not persuaded that Mrs Humphrey's claim is defeated by laches and I reject this head of defence. The result is that I will make an order setting aside the trust deed.

(c) Unconscionable bargain

105. Ms Hayes acknowledged that the case that the trust deed was an unconscionable bargain imposed upon Mrs Humphreys by Dennis was very much a second string argument, the primary case being that based on alleged undue influence. Her proposition was that Mrs Humphreys was the modern equivalent of what earlier cases referred to as a "poor and ignorant" person, and that by the trust deed she had signed away her entire beneficial interest in the house for an undervalue. She submitted that the facts justified a finding that the bargain represented by the trust deed was one that equity would regard as an unconscionable bargain.
106. I accept that in 1989 Mrs Humphreys was poor and that she was and is a woman of modest education. I have also found that the transaction represented by the trust deed was apparently disadvantageous to her, although I regard it as questionable whether it was sufficiently disadvantageous for the invocation of this head of equitable relief. In addition, it is also an essential element of this basis of relief that the bargain was unconscionable. This means that the party benefiting from the transaction must have imposed the objectionable terms in a morally reprehensible manner and that his behaviour must be characterised by some moral culpability or impropriety (see Boustany v. Pigott (1995) 95 P. & C.R. 298, at 302, 303, per Lord Templeman). Whilst I have found that Dennis is to be presumed to have induced the trust deed by the exercise of undue influence upon Mrs Humphreys, I understood Ms Hayes to acknowledge that that finding is not by itself to be equated with a finding that Dennis had acted with sufficient moral culpability to enable Mrs Humphreys also to invoke this alternative head of relief; and I have made no further findings which would justify a finding of the requisite degree of moral culpability.
107. In those circumstances, Ms Hayes did not satisfy me that Mrs Humphreys is entitled to succeed on this alternative head of her claim, although I find it unnecessary to rule finally one way or the other on it. If I am right in my conclusion on the undue influence claim, Mrs Humphreys has no need of recourse to this alternative head of claim. If I am wrong in my conclusion on the undue influence claim, then I consider there can be no arguable basis on which this alternative head of claim can succeed. I propose, therefore, to say no more about the unconscionable bargain claim.

(d) Misrepresentation

108. Mrs Humphreys also advanced a mixed bag of allegations of misrepresentations by Dennis by which he is alleged to have induced the trust deed (a deed she denied in her oral evidence she had ever discussed with him).
109. First, she alleged that Dennis made misrepresentations about his proposal to carry out repairs and maintenance. Her real complaint is that he did not do what he said he would do, but a complaint such as that can only be one for breach of contract (which is not pleaded), not a claim for misrepresentation inducing the trust deed. Her complaint directed at the latter head of claim is based on the assertion that Dennis misrepresented his repair and maintenance intentions because at the time his true, but unspoken, intention was only to carry out any repairs and maintenance when it suited him. That is a serious allegation, effectively amounting to one of dishonesty. I find that there is no evidential basis for it. Dennis has in fact carried out substantial works to the house.
110. Secondly, Mrs Humphreys made a similar allegation with regard to Dennis's declared intentions with regard to the mortgage payments. She said his true, but again unspoken, intention was only to make such mortgage payments as it suited him to make. That is another allegation for which there is no evidence. Dennis paid some £16,000 in mortgage repayments down to 1994 and only then stopped because, as I find, he was unable to keep them up. When he was able to resume them, he did.
111. Thirdly, Mrs Humphreys alleged that Dennis told her that under the trust deed she could sell the house and move to another one if she wished. She said that his caution has prevented that, and shows that he originally misrepresented his intention to allow her to move. I find that Dennis made no statement to Mrs Humphreys that the trust deed conferred any such right although I have found that he told her she would be able to sell the house and move to another. I do not accept that his subsequent conduct justifies any conclusion that whatever he said back in 1989 about future sale possibilities in fact concealed some different and unspoken agenda. As I have said, I am not satisfied that he has in fact frustrated any sale. It is true that he was insisting that his rights under the trust deed should be transferred to any substitute property, to which Mrs Humphreys would not agree. But he cannot have been suggesting anything different back in 1989 and, at the time he was insisting on such terms, the trust deed was still in full force and effect. I find that there is nothing in this allegation either.
112. Fourthly, Mrs Humphreys alleged that Dennis told her that under the trust deed he would only be entitled to the house once he had met all the mortgage payments and she said that in this respect too he misrepresented the true effect of the trust deed to her. I have found that Dennis made no such representation to Mrs Humphreys and I reject this complaint.
113. Finally, Mrs Humphreys alleged that Dennis told her that under the trust deed she would be entitled to occupy the house for as long as she wished, when in fact the deed does not say so expressly. I agree it does not say so expressly but I have found that it does say so impliedly. If Dennis did say anything to this effect, it was no misrepresentation.
114. I reject Mrs Humphreys' case based on alleged misrepresentation.

(e) Is the trust deed void or voidable for mistake?

115. The only basis on which I understood Ms Hayes ultimately to advance this limb of Mrs Humphreys' case was in reliance upon Dennis's acknowledgment in cross-examination that the trust deed was not in accordance with their agreement – his evidence being that their agreement was that she should own the house and he should only get it on her death. Ms Hayes submitted that, in failing so to provide, the trust deed incorporated a fundamental mistake which was common to both parties and justified the setting aside of the deed.
116. I accept that Dennis gave evidence to the effect just summarised but, as I have earlier explained, I consider that the deed did give effect to the parties' agreement. As I have said, I do not accept that this was a case in which the parties' agreement was that Mrs Humphreys was, from day one, to own the house absolutely, with Dennis merely enjoying the hope of having it devised to him by her will. The substance of their agreement was one under which Mrs Humphreys was given a life interest in the house and Dennis a reversionary interest. That is the effect of what the deed did and I consider that, subject to the shortcomings about it I have mentioned, it therefore properly reflected what the parties agreed. I also reject this head of claim.

(f) What is the consequence of the setting aside of the trust deed?

117. Having concluded that the trust deed is to be set aside for undue influence, the final question to consider is the respective rights of the parties in the house. This involves an assumption that the trust deed was not executed; and I consider it also requires me to ignore the parties' prior oral agreement to which the trust deed was intended to give legal effect. The transfer, mortgage and guarantee of course necessarily remain unscrambled.
118. I start from the basis that the house was worth £64,500 but was bought with a discount of 60% for £25,800. The purchase was in Mrs Humphreys' sole name. The discount was attributable to her long occupation of the house as a tenant. The purchase price of £25,800 was raised on a mortgage. As the purchaser of the house, Mrs Humphreys was also the mortgagor but Dennis guaranteed the mortgage. The background facts against which the house was purchased show that, although she was formally the sole mortgagor, there was no question of Mrs Humphreys being able to service the mortgage, because she had no funds with which to do so. The subsequent history shows that from the outset Dennis assumed the burden of paying the mortgage instalments. In form he was merely a guarantor but he has at no stage looked to Mrs Humphreys for an indemnity for his payments and the documents give him no charge over the house by way of an indemnity.
119. The trust deed purported to set out the trusts on which the house was to be held, and it provided in substance that the house was to be held on trust for Mrs Humphreys for life, with remainder to Dennis. Now that it is to be set aside, it no longer explains the beneficial interests in the house. But even though the trust deed (and the prior oral agreement which led to it) now provide no guide as to the beneficial interests in the house, I have no difficulty in deriving from the evidence that both Mrs Humphreys and Dennis embarked upon the purchase on the basis of a common understanding that they were both to have beneficial interests in the house, and I so find. Moreover, it was a common understanding built on the basis that Mrs Humphreys was going to occupy the house and Dennis was going to assume the burden of paying the mortgage instalments and thereby pay the full purchase price of £28,500. Save for the period during which he was unable to meet the payments, he has met the mortgage repayments and has also, I find, performed some labour in maintaining and decorating the house. Mrs Humphreys is the sole legal owner, but in the circumstances I have related there can, in my view, be no question of her being also entitled to the sole beneficial ownership of the house. In the light of the recent review of this area of the law by the Court of Appeal in Oxley v. Hiscock [2004] 3 WLR 715, I consider it plain that Mrs Humphreys holds the house on a constructive trust for herself and Dennis. That still leaves unanswered the all-important question as to their respective beneficial shares; but I consider that the answer to that is that each is entitled to the share which the court considers fair having regard to the whole course of dealing between them in relation to the house (see paragraph 69 of Chadwick LJ's judgment in Oxley).
120. In my view, on the particular facts of this case, the key factors to take account of in determining those shares are their respective contributions to the purchase. On one view, it might be said that the purchase price is to be regarded £25,800, for the whole of which Dennis was to be exclusively responsible. That is correct, but it only paints part of the picture. It ignores the fact that at the time of its purchase the house was worth £64,500 and that the 60% discount had been earned by Mrs Humphreys' long prior tenure. I was referred to the decision of the Court of Appeal in Mumford v. Ashe and others (2001) 33 HLR 756. I do not propose to discuss the detail of that case but will simply say that paragraph 50 of the judgment of Jonathan Parker LJ (a judgment with which Waller and Kennedy L.JJ both agreed) explained that:

"… where (as in that case) the parties had intended that each should have a beneficial interest but had wholly failed to address the question as to the extent of their respective interests, so that the presumption of resulting trust applied, the value of the discount was a financial benefit which should be taken into account in assessing their respective contributions."

The discount there referred to was the like type of discount as Mrs Humphreys had earned in this case.

121. In my view, therefore, the correct approach in the present case is to treat the parties as having together purchased a house worth £64,500 with contributions from Mrs Humphreys and Dennis of 60% and 40% respectively, an approach which I regard as also in line with the views of Mr Robert Hildyard QC, sitting as a Deputy High Court Judge in the Chancery Division, in McKenzie v. McKenzie, 12 February 2003 (see paragraphs 83 to 87). Whilst I have found that Dennis also did some repair and maintenance work to the house, and made some improvements to the garden, I do not regard those works as justifying any departure from those proportions. I have found that he carried out them out voluntarily rather than pursuant to any agreement with Mrs Humphreys, his outlay for materials was relatively modest (less than £2,500) and there is no evidence that the works increased the value of the house. The consequence is that I hold that, from the completion of the purchase, Mrs Humphreys held the house upon trust for sale for herself and Dennis as equitable tenants in common in 60% and 40% shares respectively. The only gloss I would add is that, as Dennis provided his contribution by assuming the exclusive burden of repaying the £25,800 mortgage, on any sale the money necessary to redeem the mortgage must (as between him and Mrs Humphreys) be charged on his 40% of the net proceeds of sale after the costs of sale. I would also be disposed to consider that the £1,050 of her pension money that Mrs Humphreys paid towards the mortgage repayments should, in the accounting between her and Dennis, also be borne by Dennis but I will hear counsel further on that. I will, therefore, make declarations that the parties are entitled to the respective beneficial interests in the house that I have described but will hear counsel as to its precise form.

(g) Sale

122. I am asked to order a sale of the house and I will do so. I will hear counsel as to the particular directions they wish me to make. I am further asked to order the purchase of a substitute house for Mrs Humphreys' occupation. I see no basis on which I can make such an order or why such an order is needed. Upon the completion of the sale of the house, Mrs Humphreys will receive her 60% of the net proceeds and Dennis will receive his 40% (subject in his case to the charge for the mortgage moneys). Dennis's share will belong exclusively to him and he can use it as he likes. Mrs Humphreys' share will belong exclusively to her and she can do likewise. She will presumably wish to apply it in the purchase of alternative accommodation and will be free to do so. She will not have as much money for that purpose as would have been available if she had taken up Dennis's offer in relation to the proposed 2001 purchase, and she will also be solely responsible for the repair and maintenance of whatever she is able to buy. However, it has been her choice to seek to set aside the trust deed, she has succeeded and those are some of the financial consequences she must face. I hope she may take the view that there are some compensating advantages.