Judgment delivered on the 7th day of June, 2011 by Denham J.
1. This case raises the query as to whether in all the circumstances there was a resulting trust, whether a presumption arose as to such a trust and, if so, whether the presumption was rebutted.
2. This is an appeal by James Stanley, the plaintiff/appellant, referred to as "the appellant" in this judgment, against an order of the High Court (Laffoy J.) made on the 30th July, 2007, in which the appellant's claim was dismissed.
3. Mary Kieran, the first named defendant/respondent, is referred to as "the respondent". River Properties Limited, the second named defendant/respondent, is referred to as "the company".
4. The appellant brought proceedings claiming, inter alia, that he is the beneficial owner of lands and premises, referred to in these proceedings as "Brownsbarn House". In the alternative, he sought a declaration that the respondent holds the issued share capital in the company on trust for him.
5. In the statement of claim it was stated that the appellant is a businessman and that he resides in Moscow. It was stated that the respondent is a nurse who resides or "formally" resided at Brownsbarn House. The company was described as a limited liability company registered under the laws of the British Virgin Islands.
6. Between the years 1983 and 1994 approximately the appellant and the respondent cohabited.
7. The High Court (Laffoy J.) delivered judgment in this matter on the 19th July, 2007.
8. The learned High Court judge explained that this was the second of three connected proceedings. The other two were the O'Connor proceedings: John O'Connor v. Mary Kieran and River Properties Limited (Record No. 2004/19479p); and the 2007 proceedings: James Stanley v. John O'Connor (record no. 2007/2451p). The common feature of the three actions was that they concern the ownership of issued shares in the company and of residential property in County Kilkenny. The residential property, Brownsbarn House, is registered on Folio 4444F of the Register of Freeholders, County Kilkenny. The company was registered as full owner on Folio 4444F on 8th August, 2000, but the High Court found that the evidence established that the transfer under which the company acquired the lands from the previous registered owner was dated 12th January, 1990. These proceedings were registered as a lis pendens on Folio 4444F on 30th January, 2001. The O'Connor proceedings were also registered as a lis pendens on Folio 4444F on 22nd December, 2004. These proceedings were further registered as a lis pendens on the lands registered in Folio 18341F, County Kilkenny. The respondent was registered as owner of the lands the subject of that folio on 15th April, 1999.
9. The O'Connor proceedings were heard on 1st May, 2007. The respondent appeared in person, there was no appearance by or on behalf of the company. The High Court gave an ex tempore judgment, making the following orders:-
"(i) a declaration that the plaintiff, John O'Connor, had exercised the option, which the [respondent] granted to him on 17th September 2004, for the purchase of the shares held by [her in the company.] at the price of €1,600,000; and
(ii) an injunction until further order restraining the [respondent] by herself, her servants or agents, from disposing of, charging or otherwise dealing in the shares held by her in the [company.]"
10. The 2007 proceedings, as they were described by the learned High Court judge, in broad terms address issues of priority as between John O'Connor and the appellant. The learned High Court judge stated, on 19th July, 2007, that they remained to be heard.
11. In these proceedings, while the statement of claim was more broadly drawn, at the hearing in the High Court the reliefs pursued by the appellant were:-
(a) a declaration that the appellant is the beneficial owner of the lands registered on Folio 4444F and Folio 18341F, County Kilkenny;
(b) further, or in the alternative, a declaration that the respondent holds the issued share capital in the company in trust for the appellant;
(c) a mandatory injunction directing the respondent and the company, their servants or agents to transfer the lands registered in Folio 4444F and Folio 18341F of the Register of Freeholders, Co. Kilkenny, to the appellant and to execute all documents necessary to effect such transfer; and
(d) further, or in the alternative, a mandatory injunction directing the respondent to transfer all the shares held by her in the company to the appellant.
As regards the relief claimed at (a) above, counsel for the appellant submitted to the High Court that the basis of the claim was that the company has at all times held the lands on a resulting trust for the appellant personally. As regards the relief claimed at (b) above, the basis of the claim was that the respondent held the shares in the company in trust for the appellant.
12. The High Court (Laffoy J.), in a reserved judgment delivered on the 19th July, 2007, set out details of the background to the case. This judgment may be seen in full on www.courts.ie.
13. Very briefly, the appellant claimed that he purchased Brownsbarn House in late 1989. The property was conveyed to the company, the share capital of which is registered in the respondent's name, and held in trust for him. There were subsequent improvements to the property, all financed by him. In December, 2000 the appellant requested the respondent to join with him in steps to mortgage Brownsbarn House. She refused. It appears she intended to dispose of the property without reference to him. Until May, 2006 there was a solicitor on record for the respondent and the company in the proceedings. The respondent discharged the solicitor in May, 2006. Later, on 6th November, 2006, the solicitor was declared by the High Court to be no longer acting for the company and was allowed to come off record. There were a series of matters pleaded in the defence, including that it was denied that the appellant purchased any of the properties referred to in the statement of claim in the name of the respondent and/or the company in trust for him. It was pleaded that the appellant was estopped by reason of his conduct and representations from asserting or claiming any ownership or beneficial interest in Brownsbarn House; specifically that the appellant was estopped by reason of the express agreement between him and the respondent that, in consideration of the respondent living with him as his common law wife and personal assistant in his business affairs, she would be entitled to the sole and exclusive beneficial interest in the said house and lands. It was also denied, inter alia, that the house and lands were purchased by monies provided by the appellant.
14. The learned High Court judge detailed the course of the hearing in the High Court; how it advanced initially in the absence of the respondent due to her refusal to attend, how the respondent returned to the courtroom and testified; and how she left during her cross-examination by counsel for the appellant and before it was concluded. She did not return at any time thereafter. The learned High Court judge pointed out that in reality the company was not represented at the hearing.
15. The High Court held that the appellant had provided the entire consideration for the acquisition of Brownsbarn House and lands, and that he had also provided the money to purchase the lands in Folio 18341F. The High Court held that these facts, in the absence of a contest as to what the appellant intended in purchasing the properties in the names of the respondent and the company, give rise to the presumption of a resulting trust in favour of the appellant. Further, the High Court held that, in the case of a contest, the onus of rebutting that presumption would normally lie with the person asserting that the presumption did not apply, in this case the respondent and the company. The High Court held that they did not discharge that onus, that there was no appearance for the company, and that the respondent did not participate properly in the proceedings.
16. The learned High Court judge went on to hold:-
"However, the evidence of the [appellant] goes beyond merely establishing that he provided the purchase money. The issue the court has to address is whether the evidence raises questions about the [appellant]’s intentions as to the beneficial ownership of Brownsbarn House when it was acquired in 1989 and the beneficial ownership of the shares in the [company]. In my view, it does.
First, there is the evidence as to the acquisition of the Lower Mount Street apartment in the name of the [respondent]. The [appellant's] case is that the entire purchase money was indirectly provided by him out of the proceeds of the sale of the Dalkey apartment. On the [appellant's] own evidence, a resulting trust in his favour would have arisen in relation to that property, subject to the life interest he testified he intended to confer on the [respondent]. Nonetheless, after they separated, he allowed the [respondent] to sell the apartment and retain the entire proceeds of sale. It may be that the [appellant] took a pragmatic view and decided that there was no point in pursuing the [respondent] for his share of the proceeds of sale. Alternatively, it may be that the [appellant] desisted from pursuing the [respondent] out of generosity towards her. The history of the Dalkey apartment and the Lower Mount Street apartment was introduced to give the full context of the [appellant's] relationship and dealings with the [respondent]. However, it does raise a question mark about the intentions of the [appellant] in vesting property, which he had paid for, in the sole name of the [respondent].
Secondly, the ten year delay in registering the lands registered on Folio 4444 F in the name of the [company] raises questions. On his own evidence, the [appellant] appeared to be unaware of the delay. He claims to be the beneficial owner of the issued share capital in the [company], yet he appears to have had no involvement whatsoever, either directly or indirectly through solicitors acting on his behalf, in the perfection of the title of the [company]. He apparently has not investigated the delay in registration and he cannot explain it.
Thirdly, the element of control which the [appellant] gave the [respondent] over the property and the title deeds is not consistent with the [appellant's] claim to be the beneficial owner, through the medium of the [company], of Brownsbarn House. According to the folio, the land certificate in relation to the folio issued to the solicitor formerly on record for the [respondent] in these proceedings in 2006. On the basis of the [appellant's] evidence and the public record, the [appellant] allowed the [respondent], as the sole registered proprietor of the shares in the [company], free rein to dispose of and encumber the lands registered on Folio 4444 F until the lis pendens was registered on 30th January, 2001.
Fourthly, and most significantly, the [appellant] adduced no documentary evidence of the legal or beneficial ownership of the issued shares in the [company] and the only evidence led as to the beneficial ownership was what he testified he told Susan Neill in 1989 and what he told Susan Neill and the [respondent] in 1995. In the O’Connor proceedings a share certificate in relation to what I understand to be the only two issued shares in the [company] was put in evidence. That share certificate showed the [respondent] as the owner of the two issued shares on 8th March, 1999. It was sealed in the presence of Susan Neill, as a director of the [company]. Presumably, the company law code of the British Virgin Islands requires the maintenance of registers of members of the company and the making of returns. It must be assumed that the [appellant] could have adduced documentary evidence to corroborate his contention in relation to the ownership of the shares, for example, a change in the registered ownership from Susan Neill to the [respondent] in 1995. Additionally, his agent in Jersey, presumably, could have given comprehensive evidence about the incorporation of the company, its membership and officers at material times and so forth. The fact that the court has only the [appellant's] word as to the ownership of shares in a limited company incorporated in a foreign jurisdiction is wholly unsatisfactory.
Fifthly, there is the curious fact that the lands registered on Folio 18341 F, which were acquired in 1999, some four years after the relationship of the [appellant] and the [respondent] had terminated, and which the [appellant] testified were of strategic importance in terms of the development of the lands registered on Folio 4444 F, were acquired in the name of the [respondent], and not in the name of the [company]. That is not consistent with the [appellant's] explanation for the acquisition of the lands registered on Folio 4444 F in the name of the [company], which was that he was treating the acquisition as an investment because of the development potential of the lands. One would have assumed that the acquisition of contiguous land of strategic importance would also have been taken in the name of the [company].
Finally, there is the proposed settlement in 2003. The [appellant] did give an explanation as to why he was prepared to forgo his claim to Brownsbarn House and lands for a fraction of its value: because he wanted funds to participate in the Russian venture. However, as with the evidence that the [respondent] was allowed to retain the entirety of the proceeds of the sale of the Lower Mount Street apartment, the fact that he wanted to settle on that basis raises questions about what his intentions were in relation to the beneficial ownership of Brownsbarn House when it was purchased.
Leaving aside the question of the conduct of the [respondent] in relation to these proceedings and the absence of the [company], the question for the court is whether the foregoing factors, all of which arise from evidence adduced by the [appellant], separately or in aggregate, raise doubts as to whether the intention of the [appellant] in 1989 was to secure the beneficial ownership of Brownsbarn House to himself by holding it in the name of the [company] and through the beneficial ownership of the shares in the [company]. The combination of those factors suggests to me that, as a matter of probability, the [appellant] intended to benefit the [respondent]. The conduct of the [respondent] rendered these proceedings unsatisfactory. Counsel for the [appellant] acknowledged that, but submitted that it was a factor which was not to be held against the [appellant]. While that is so, it is the [appellant's] evidence which has raised the questions as to his intentions as to the beneficial ownership of Brownsbarn House.
At the insistence of the [appellant] this case proceeded in the absence of the [company]. The failure of the [appellant], to adduce any evidence of the current incorporated status of the [company], its membership and directors and officers, whether its assets are charged and so forth is difficult to comprehend. If the [appellant] is the beneficial owner of the [company], as he contends, he must surely be in a position to adduce satisfactory evidence of that fact."
The appellant's claim was dismissed.
17. The appellant filed a notice of appeal submitting that the learned High Court judge had erred in law or in fact or in a mixed question of law and fact. While there were seven grounds in the notice of appeal, in the written submissions it was stated that they could be reduced to two submissions. These were:-
Submissions
18. Written submissions were received from the appellant and the respondent.
19. In the written submissions on behalf of the appellant it was submitted that, in the absence of any challenge by way of cross-examination of the appellant's evidence, it was not open to the High Court to make any finding adverse to the evidence given by the appellant. Two reasons were given: (a) in the absence of any challenge to his evidence, the appellant's evidence stood at the conclusion of the hearing as the only direct evidence and that, not having been put in doubt, it could not then be displaced by mere inferences; and, (b) as a matter of fundamental fair procedures, the learned High Court judge was not entitled to take into account any doubts or make adverse inferences where the matters in question had not been put to the witness. It was submitted that it was not open to the High Court to reject the appellant's evidence. Alternatively, if this Court found it was open to the High Court to enter into a consideration as to whether there was any reason to question the appellant's evidence, it was submitted that the conclusion reached by the High Court should be reversed. The submissions also considered the inferences drawn by the learned trial judge.
20. Written submissions of the respondent were received. The first set of submissions referred to the appellant, Bula Resources and oil fields and other matters which are not relevant to the issues in this appeal. A second set of submissions was received in court at the opening of the hearing. The Court adjourned for a period so that counsel for the appellant could read the submissions and decide if he wished to make any application. On his return counsel for the appellant informed the Court that he had read the submissions; that they raised new issues; and that the High Court had heard and determined the case on the issue of a resulting trust. He asked the court to proceed with the appeal as there had been many delays in the case.
21. This case was heard and determined in the High Court on the basis that the issue to be determined was whether there was a resulting trust in favour of the appellant. In the new submissions filed on behalf of the respondent at the hearing of the appeal it was stated that the case raised the question as to what principles of law determine the rights of cohabiting partners to property purchased during their relationship. The submissions considered the correct approach to determine the property rights of cohabitants and the issue of proof of a witness. It was submitted that the presumption of a resulting trust was the incorrect starting point for an analysis of the respective interest of property purchased by the cohabitants. Reliance was sought to be placed on the House of Lords decision Stack v. Dowden [2007] 2 AC 432. Also, the submissions addressed the issue of proof of a witness, and it was stated that regardless of whatever presumptions the law might apply in a particular case, the onus is on a party to prove his case. In this instance the respondent contended that the appellant had failed to prove his case. In particular, the appellant's reliance on oral testimony in light of the lack of documentary evidence put forward in support of his case was, it was claimed, fatal to the contentions he made.
Pleadings
22. The plenary summons is drafted as a claim that the appellant is the beneficial owner of property. The defence filed is in the form of generally denying the claim of the appellant and asserting that the respondent owns the stated properties. It was denied that the appellant provided the monies for the purchase of Brownsbarn House, or provided funds for its improvements. It was claimed that the appellant was estopped from claiming beneficial ownership in Brownsbarn House. In paragraph 14 of the defence it was pleaded:-
"The [appellant] is further estopped from asserting or claiming the alleged or any ownership or beneficial interest in the aforesaid Brownsbarn House and lands by reason of the express agreement between the [appellant] and the [respondent] that in consideration of the [respondent] living with the [appellant] as his common-law wife and personal assistant in his business affairs, the [respondent] would thereafter and irrevocably be entitled to the sole and exclusive beneficial interest in the said house and lands. The said agreement was affirmed and fully implemented by the [appellant] when he terminated the relationship between the [respondent] and himself in or about the year of 1989."
Absent from Court
23. However, as referred to in the judgment of the High Court, the respondent knew the case was proceeding but absented herself from the first day of the proceedings, returned to court on the second day, but left before her cross-examination had concluded. She stated that Brownsbarn House was her house. She repeatedly said these proceedings were about other matters. As the respondent left during her cross-examination the learned High Court judge disregarded her evidence.
24. While the learned High Court judge was entitled in law to disregard the evidence of the respondent, it is notable that the respondent merely asserted that she owned Brownsbarn House but gave no evidence of any express or other agreement with the appellant, that, in consideration of her living with him as his common law wife and personal assistant, she would be entitled to be the sole beneficial owner of the said house and lands, or that any such agreement was affirmed or implemented.
25. Thus issues on the status of cohabitee were not determined by the High Court. This is an appellate court which is hearing an appeal from the decision of the High Court. A new case cannot be pleaded and submitted at this stage in this Court. Consequently, the issues for determination arise out of those matters heard and determined by the trial court.
26. The fundamental issue before the Court is whether the respondent and the company hold Brownsbarn House in a resulting trust for the appellant. This question requires to be determined on the evidence given in the High Court.
Law
27. The law as to the nature of a resulting trust is stated clearly in Delaney, Equity and the Law of Trusts in Ireland: 4th Ed., (Dublin, 2007), starting at p.135. It is described as:-
"Resulting trusts can be said to arise by implication and are founded on the unexpressed but presumed intention of the settlor."
The traditional approach has been to find the real intention of the settlor. However, as Delaney points out at p.136, there has been some modern analysis. Dr. Chambers, Resulting Trusts (1997), at p.2, reached a conclusion that:-
"All resulting trusts come into being because the provider of property did not intend to benefit the recipient."
Following that analysis in Twinsectra Ltd v. Yardley [2002] 2 AC 164, at 190, Lord Millett stated:-
"The central thesis of Dr Chambers's book is that a resulting trust arises whenever there is a transfer of property in circumstances in which the transferor (or more accurately the person at whose expense the property was provided) did not intend to benefit the recipient. It responds to the absence of an intention on the part of the transferor to pass the entire beneficial interest, not to a positive intention to retain it."
However, it is not necessary to consider any complex academic analysis in this case. The claim was fought in the High Court and in this Court on the basis that there was a resulting trust, in that the property belonged to the appellant and that he did not intend to benefit the recipient. There was an absence of intent by the appellant to pass the beneficial interest.
Presumption
28. There is a presumption that the provider of funds for the purchase of the property is the beneficial owner. As stated in Delaney at p.161:-
"… where a person provides the purchase money for property, whether real or personal, which is conveyed or transferred to another person or to himself and the other person jointly, it is presumed that the latter holds the property on a resulting trust for the person who provided the purchase money."
Rebutted
29. The presumption may be rebutted. This may be done by evidence that the provider of funds intended to benefit the other party. Or, the presumption may be rebutted by the presumption of advancement; that, however, does not arise in this case. The parties in this case were not husband and wife. The issue of their relationship as cohabitees was not an issue decided by the High Court.
30. Thus it is necessary to consider the evidence given in the High Court and to apply the applicable law on resulting trusts.
31. In the High Court the appellant was represented by solicitor and counsel. The respondent absented herself from the first day of the proceedings, and then left the court on the second day, during her cross-examination by counsel for the appellant. There was no appearance by or on behalf of the company.
32. The evidence before the High Court was essentially that of the appellant. On 1st May, 2007, the respondent left court when the High Court was giving judgment in the O'Connor proceedings. After she left, the hearing of this case was adjourned until 2nd May, 2007. The solicitors for the appellant were instructed to contact the respondent and inform her that the matter was proceeding on the following day. The respondent did not appear in court on 2nd May, 2007. The solicitors for the appellant had been unable to contact her. However, the appellant, who notwithstanding these proceedings is still in communication with the respondent, had travelled by train to Dublin and met her at Heuston Station shortly after 10.00 am, and told her the action was proceeding and encouraged her to attend, but she made it clear she did not intend to do so. The case proceeded in her absence, and in the absence of representatives of the company. On 2nd May, 2007, the High Court heard the evidence of the appellant and submissions on the law by counsel for the appellant, and a subpoena duces tecum was served on the Property Registration Authority to produce the instrument on foot of which the company was registered as owner on Folio 4444F. When the matter resumed on 3rd May, 2007, the respondent was in court. She was allowed to testify. However, during the course of her cross-examination by counsel for the appellant she refused to participate and she left the court. The witness from the Land Registry attended at 2.00 p.m. on 3rd May, 2007, and produced the relevant instrument.
33. The High Court reviewed the evidence received in oral testimony from the appellant, in the absence of the respondent, and which was not the subject of cross-examination. It was wide ranging evidence as to the relationship between the appellant and the respondent, the acquisition and sale of properties, the appellant's work and travel.
33(i) In relation to Brownsbarn House, the appellant said he was looking for a summer place or country house in 1989. He purchased Brownsbarn House in 1989 because he thought it had development potential. He saw potential for resale. He paid IR£220,000 for it out of his own money. There was no borrowing in relation to the purchase. The respondent did not provide any part of the purchase money. Brownsbarn House was vested in the company as the appellant decided it would be more convenient to hold in it an offshore company. He asked his agent in Jersey to form an offshore company for him. Initially the two issued shares in the company were held by his agent in Jersey in trust for the appellant. The appellant gave evidence of improvements he carried out on the property.
33(ii) After the relationship between the appellant and the respondent ended in 1995, the respondent continued to live in Brownsbarn House; the appellant maintained personal items and clothing there.
33(iii) The appellant said that the lands in Folio 18341F County Kilkenny were acquired with his money. He gave evidence of the purchase of the additional property, Folio 18341F, County Kilkenny, in 1999; it was land originally acquired by Kilkenny County Council for road widening; the acquisition of this land was of strategic importance to the appellant as regards access to Brownsbarn House. The folio is in the name of the respondent.
33(iv) The appellant gave evidence that in 1995 he varied his instructions to his agent in Jersey, Sue Neill, in relation to the issued shares in the company. He told her that she was to hold the two shares for the respondent. He stated that he told the respondent that she was holding the shares on his behalf. This was done before the relationship ended. His explanation for this was that he feared litigation at that time from a Russian businessman, with whom he had provision dealings, and who knew of Brownsbarn House.
33(v) In 1998 proceedings were instituted by Bula Resources (Holdings) Plc against the appellant and Mir Oil Development Limited. In August, 1998 a Mareva type injunction was granted to Bula Resources (Holdings) Plc restraining the appellant from removing any of his assets within the jurisdiction out of the jurisdiction or from disposing of, transferring, charging, diminishing or in any way dealing with certain specific assets; including Brownsbarn House. The court gave liberty to the appellant's solicitors to inform various persons, including the respondent. In December, 2000 the orders were discharged and the action against the appellant struck out. The appellant stated that the respondent was aware of the freezing order but did nothing to challenge it.
33(vi) The appellant gave evidence that he had tried to settle these proceedings with the respondent. A business opportunity arose with the Russian businessman previously referred to. The appellant stated that in 2003 he met the respondent and agreed to forego his claim on Brownsbarn House, he gave her a paper setting out his understanding of their agreement, it was a fax transmission signed by the appellant and dated 26th November, 2003; and transmitted to the respondent on 27th November, 2007. It provided that the appellant would give up his claim to Brownsbarn House in return for €450,000 to be paid by 1st December, 2004; if the sum was not paid by then the respondent would sell the property and the appellant would be entitled to €500,000 out of the proceeds of sale; the litigation was to cease; the lis pendens was to be lifted; and the agreement was to be "registered in court". The appellant's evidence was that the respondent did not reply to his fax of the agreement. Further, he stated that he met the respondent in August, 2004. He needed €1million for a deal. He struck a deal with the respondent; he said that their agreement was that she would give him €500,000 by the 1st November, 2004, and she would invest €500,000 in the venture, which she said she would borrow. However, the respondent did nothing.
34. The only other evidence given was the evidence of the official of the Land Registry who produced the instrument on foot of which the company was registered on Folio 4444F, County Kilkenny. The transfer to the company was dated 12th January, 1990. There was a delay of ten years in registering the transfer. The High Court held that "on the basis of the evidence, it is not possible to come to any conclusion as to the reason for the delay in registering the transfer".
35. The High Court referred to the evidence of the respondent. As to why the property was put in the name of the company, the respondent's evidence was that as the appellant had not obtained a divorce at the time and as she did not have a legal separation, the property needed to be purchased in the name of a company. She asserted that the property was always intended to be for her benefit and that the shares in the company are hers, as is Brownsbarn House and lands. The High Court pointed out that the appellant was not in a position to challenge the respondent on that assertion because she left the courtroom before he had an opportunity to cross-examine her on it. Of course, it should be noted also that the appellant was not cross-examined on his evidence.
Decision
36. This case turns on the question as to whether, on the evidence, the respondent holds Brownsbarn House in trust for the appellant.
Presumption arises
37. The evidence of the appellant was that he provided the money to purchase Brownsbarn House and the lands. There was no evidence contradicting that fact. Indeed the respondent agreed that this was so. The High Court held:-
"I am satisfied on the evidence that the [appellant] provided the entire consideration of IR£235,000 for the acquisition of Brownsbarn House and lands now registered on Folio 4444 F. In the absence of evidence to contradict the [appellant's] evidence on this point, I also accept that he provided the purchase money to acquire the lands registered on Folio 18341 F. Those facts alone, in the absence of a contest as to what the [appellant] intended in purchasing the properties in the names of the [company] and the [respondent], would give rise to the presumption of a resulting trust in favour of the [appellant] in relation to the lands registered on both folios."
I would affirm this finding. On the facts the presumption of a resulting trust in favour of the appellant arose.
Rebuttal
38. The next question is whether the respondent and/or the company rebutted that presumption. The company was not represented at the hearing and the sporadic attendance at the hearing of the respondent has been described. The High Court held:-
"In the case of a contest, the onus of rebutting that presumption would normally lie with the person asserting that the presumption did not apply, namely, the [respondents]. The [respondents] did not discharge that onus. There was no appearance for, or representation of, the [company] and the [respondent] did not properly participate in the proceedings."
I would affirm the finding of the learned trial judge that the respondent and the company did not discharge the burden of rebutting the presumption. Thus the presumption of a resulting trust would stand, and so the appellant would be entitled to succeed on his claim.
39. However, the learned High Court judge took a further step and went on to consider the evidence of the appellant in detail. Counsel for the appellant submitted that it was not open to the learned High Court judge to draw inferences and make findings against the appellant in circumstances where his evidence was not challenged and he had no opportunity to meet the case found against him. Counsel initially submitted that where there was uncontested sworn evidence which was not the subject of cross-examination or conflicting evidence that then it must be accepted by the Court. Reference was made to Antoni & Anor v. Antoni & Ors [2007] UKPC 10 (26 February, 2007).
40. However, I am satisfied that the learned trial judge had a duty to act judicially, to hear and consider any evidence, to make determinations as to issues arising, including as to the credibility of witnesses, and to render a judgment on the case. The decision should be based on the evidence before the Court, and so would be limited by that evidence. I am satisfied that it was within the jurisdiction of the learned High Court judge to consider all the evidence given (which was essentially that of the appellant) and to make a determination thereon.
41. It was open to the learned trial judge to make a decision on the credibility of witnesses appearing before her. As the respondent did not stay for her cross-examination, the learned trial judge made no finding based on her evidence, quite correctly. The appellant gave oral evidence, but was not cross-examined on it as at the relevant time the respondent had absented herself from court. It was open to the learned trial judge to make a finding on the credibility of the appellant and of the evidence of the appellant. However, the learned High Court judge made no express finding as to whether or not she believed him.
42. The learned trial judge drew inferences from the evidence of the appellant. As the High Court made no express finding that the evidence of the appellant was not credible, it must be presumed to have been credible. In those circumstances this Court is in the same position as the learned High Court judge in the drawing of inferences from the evidence.
43. Thus the evidence of the appellant is the foundation for any decision. I will consider seriatim the six matters listed by the High Court, as quoted earlier in this judgment, and the inferences drawn from the evidence.
44. (i) First, there was the evidence as to the acquisition of the Lower Mount Street apartment, which was funded by the appellant, was in the respondent's name, and of which the appellant gave evidence that he intended the respondent to have a life interest. However, after the separation he allowed the respondent sell the apartment and retain the entire proceeds of sale. The learned trial judge said that this raised a question mark about the intentions of the appellant in vesting property, which he paid for, in the sole name of the respondent.
On this property the appellant had agreed that the respondent could have the apartment for life but that if she predeceased him it would revert to the appellant. It was a specific agreement between them. I would differentiate the two situations – the apartment and Brownsbarn House. There was the express agreement that the respondent would have a life interest in the apartment. There was no such agreement as to Brownsbarn House. I would draw no inference from the agreement as to the apartment and the appellant's intent in 1989 when he bought Brownsbarn House and stated that the shares of the company were held on trust for him. It seems to me that the learned trial judge erred in drawing any adverse inference from the matter of the apartment. It was a specific separate agreement and irrelevant to the issue of Brownsbarn House. Further, any adverse inference on this basis was contrary to the evidence of the appellant and without any express basis given for rejecting that evidence.
44 (ii) The second matter raised by the learned High Court judge was that the appellant was unaware of the ten year delay in registering the land in Folio 4444F in the name of the company. However, the appellant was out of the county for most of this time, no discovery was made by the respondent, and it transpired that the delay was due to getting s.45 consent. I am satisfied that there is no basis to draw an adverse inference on this matter.
44. (iii) Thirdly, the learned trial judge stated that the element of control which the appellant gave to the respondent over the property and the title deeds was not consistent with the appellant's claim to be the beneficial owner, through the company, of Brownsbarn House. However, the element of control is consistent with property being transferred to another person in trust. The learned trial judge failed to give sufficient weight to the nature of the personal and business relationship between the parties, and to the fact that the shares were put in the respondent's name in 1995. Also, there was a failure to give weight to the substantial amount of personal property belonging to the appellant that was kept by him at Brownsbarn House, even after the relationship with the respondent ceased.
44. (iv) The learned trial judge stated that fourthly, and most significantly, the appellant adduced no documentary evidence of the legal or beneficial ownership of the issued shares in the company, and stated that the only evidence led as to the beneficial ownership was what he testified he had told his agent, Susan Neill, in 1989 and what he told Susan Neill and the respondent in 1995. It was stated that his agent in Jersey could have given evidence about the incorporation of the company, its membership and officers. The learned trial judge stated further:-
" The fact that the court has only the plaintiff’s word as to the ownership of shares in a limited company incorporated in a foreign jurisdiction is wholly unsatisfactory."
However, the respondent had taken control of the company (she had the shares registered in her name in 1999) and she failed to make discovery to the High Court. One wonders whether a person with no registered interest in a company could obtain information from the British Virgin Islands as to the ownership of the shares. The appellant did arrange the calling of a witness from the Land Registry when the learned trial judge expressed concern at the delay in registration. That evidence corroborated the evidence of the appellant. As the respondent held the two shares in the company, and did not cooperate with the Court, it does not seem that any weight could be put on this factor to draw an inference negative to the appellant.
44 (v) The fifth factor referred to by the learned trial judge was that the lands registered on Folio 18341F, which were acquired in 1999, some four years after the relationship of the appellant and respondent ended, were acquired in the name of the respondent. The High Court considered that this was not consistent with the appellant's explanation for his purchase of Folio 4444F, in the name of the respondent, as an investment for development potential. The High Court stated that one would have assumed the acquisition of contiguous land of strategic importance would also have been taken in the name of the company. There was no direct evidence on this issue. It is true that irrespective of whether the appellant or the respondent was the beneficial owner of Brownsbarn House, it is an anomaly that the additional folio was in the name of the respondent. But the matter was not raised during the hearing. The appellant gave evidence that he purchased Brownsbarn House originally as a holiday home and for development, and that he purchased it in the name of the company. He gave evidence that when he purchased the additional folio he gave the respondent the money to acquire the lands, and that she acquired the lands in her name. This was after their relationship had ended. There is no doubt it could be a factor indicating that the entire property was hers, but a relevant factor also is the continuing good relationship between the parties and in this relationship the appellant has left the respondent to sort out this type of deal. It is a factor which has to be seen in the overall nature of the unusual ongoing relationship between the parties. I do not consider that it has any determinative weight.
44. (vi) The final matter relied on by the learned High Court judge was the proposed settlement in 2003. The appellant had given evidence that he was prepared to forego his claim to Brownsbarn House and lands for a percentage of its value because he wanted funds to participate in a Russian business venture. The learned trial judge stated that the fact that the appellant wanted to settle on that basis raised questions as to what his intentions were in relation to the beneficial ownership of Brownsbarn House when it was purchased.
On this matter the appellant gave evidence as to why he would settle, he wanted €500,000 for a Russian business venture and he needed the money urgently for that purpose. I find that explanation consistent with his evidence of his ownership of Brownsbarn House and with his wish for fast cash for a deal. After all, if the respondent was in fact the beneficial owner why would she have countenanced giving him €500,000? There was no reason why she should give him anything. In fact she did not respond to his suggestion as to a settlement. It is true that the respondent entered into an option agreement with Mr. O'Connor. However, that was evidence in another case to which the appellant was not a party. In this Court the respondent said that she would continue to help the appellant, and that she would have entered into the Russian deal also. However, all of that went sour.
I am satisfied that the evidence of the appellant that he would have taken €500,000 was plausible and consistent with his work and with his relationship with the respondent. He needed the money for a deal. I would not regard it as conduct undermining his claim that the respondent was not the beneficial owner. Indeed it is more consistent with the appellant being the beneficial owner.
I do not consider that the foregoing factors arising from the evidence of the appellant are such as to undermine his evidence that he paid for Brownsbarn House and lands, and intended it to be a holiday home and for development, and for good reason he had the property held by the company in a resulting trust for himself. While originally his agent in Jersey held the two shares in the company, in time these were transferred to the respondent, but he continued to be the beneficial owner.
45. There was no adverse finding as to the credibility of the appellant by the High Court. Yet there were inferences drawn by the High Court that in 1989 the appellant intended to benefit the respondent. It is equally open to this Court to draw or not to draw inferences from the evidence. Such inferences drawn by the High Court were contrary to the evidence, as the result of such inferences meant that the High Court reached a view contrary to the evidence of the appellant. The sworn evidence of a person, which was not subject to cross-examination, even in a situation where there is a lay litigant who has acted to frustrate the court proceedings, where the credibility of the person was not expressed to be in any doubt by the High Court either in court or in the reserved judgment, should not be discounted without reasons to the contrary and should not lightly be set aside by inferences. In this case the learned trial judge erred in setting aside the express evidence of the appellant, without stating that it was not credible, by inferences which do not carry any or any significant weight.
46. The appellant gave unchallenged evidence, not stated to be disbelieved, that he bought Brownsbarn House in 1989 with his money as a holiday home or for development, to be held by the company. This raised the presumption of a resulting trust. The onus was then on the respondent and the company to displace this presumption. This they did not do. While the learned trial judge was entitled to consider all the evidence, for the reasons given, I would not accord weight to the inferences drawn by the High Court. The inferences drawn by the High Court on the evidence of the appellant have little or no weight. They may indicate an unusual relationship between the parties. But the inferences do not discharge the onus or displace the presumption. Thus I am satisfied that Brownsbarn House is held by the company on a resulting trust for the appellant; that the respondent holds the shares of the company in trust for the appellant; and that the respondent holds the property in Folio 18341F in trust for the appellant.
47. For the reasons given, I would allow the appeal.
