Capital Funding One Ltd v Daniel John Esqulant
| Jurisdiction | England & Wales |
| Judge | Mr Justice Freedman |
| Judgment Date | 24 April 2020 |
| Neutral Citation | [2020] EWHC 981 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: E40MA039 |
| Date | 24 April 2020 |
[2020] EWHC 981 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Business and Property Courts Manchester,
Manchester District Registry,
Circuit Commercial Court (QBD)
Mr Justice Freedman
Case No: E40MA039
Appeal ref: M19X177
Arnold Ayoo (instructed by Kuits LLP) for the Claimant
Dov Ohrenstein (instructed by Gisby Harrison) for the 2 nd Defendant
Hearing dates: 8 April 2020
Approved Judgment
Introduction
This is an appeal by Capital Funding One Limited (“the Appellant”) against Alison Jayne Esqulant (“the Respondent”). It relates to a decision of District Judge Ransom (“the Judge”) to permit Mr Daniel John Esqulant (“Mr Esqulant”) to give evidence. The Judge decided to allow the evidence because the Respondent had issued a summons against Mr Esqulant. It is contended by the Appellant that what was required was an application for permission from Mr Esqulant under CPR 32.10 and for relief from sanctions under CPR 3.9. Since this did not occur, it is submitted that the Judge should not have permitted the evidence to be adduced. Further, the Appellant says that if there had been an application for relief from sanctions, then it would or should have been refused. Insofar as the Judge decided to exercise his discretion to allow the evidence pursuant to CPR 34, it is said that he exercised that discretion wrongly and that he ought to have refused permission to call Mr Esqulant.
The case concerned whether Mr Esqulant had a beneficial interest in a property known as 10 Brace Close, Cheshunt, Waltham Cross, London, E76WY (“the Property”). The Appellant sought a final charging order over Mr Esqulant's interest in the Property. The Respondent opposed the charging order on the basis that Mr Esqulant had no beneficial interest. Having heard evidence from the Respondent, Mr Esqulant and the mother of the Respondent, the Judge decided that there was a common intention of the Respondent and Mr Esqulant that Mr Esqulant had no interest in the Property. The challenge in this appeal is not against the principles that were applied in reaching that decision or against any aspects of the trial itself, but entirely against the decision to permit Mr Esqulant to give evidence. If permission had been refused, the Appellant says that the Respondent would, or may, have been unable to prove the common intention.
In these circumstances the Appellant says that there was a serious procedural or other irregularity on the part of the Judge and that as a result injustice was caused and/or the decision of the Judge was wrong. The Respondent seeks to uphold the decision of the Judge for the reasons which he gave: alternatively through a Respondent's Notice, she submits that if permission were required to rely on the evidence of Mr Esqulant pursuant to CPR 32.10, permission would have been granted if sought.
In this judgment, I shall consider the case in the following order:
(1) Background leading up to the trial;
(2) A summary of what happened at trial;
(3) The hearing before the Judge;
(4) The Grounds of Appeal;
(5) Relevant procedural law;
(6) The Appellant's submissions;
(7) The Respondent's submission;
(8) Discussion;
(9) Discretion;
(10) Cross-notice of the Respondent;
(11) Disposal of the appeal.
(1) Background leading up to the trial
The Property was registered in the names of the Respondent and Mr Esqulant. They were married and had 3 children. The marriage broke down and the parties separated in or about 2007/2008. They lived in a relatively large property at 17 Bluebell Drive. Following the breakdown of the marriage, and in the context of the financial difficulties of Mr Esqulant, they agreed to sell 17 Bluebell Drive and that a smaller property would be acquired for the Respondent and the children.
The Property was purchased on 9 th May 2008 for £327,500 in the joint names of the Respondent and Mr Esqulant with the aid of a mortgage secured on the Property. It is common ground that at the time that the Property was purchased, there was no written declaration of trust entered into between the parties. Nor have there been any consequently. Section 11 of the TR1, which is the Land Registry form of transfer deed, contains provision for the transferees to declare any trust on which the Property is held including as joint tenants in equal shares or tenants in common in specified shares. Section 11 was not completed, and neither was the transfer deed signed by either the Respondent or Mr Esqulant. Absent an express declaration, the land registry entered a standard form restriction in the register that no disposition by a sole proprietor is to be registered unless authorised by the court.
The issue in the case is, notwithstanding the acquisition of the Property in the joint names and the use of monies from the former matrimonial home of 17 Bluebell Drive, whether Mr Esqulant and the Respondent had agreed that the Respondent would be the sole beneficial owner. The Respondent maintains that the Property was acquired in joint names because she only had a modest income and could not afford to obtain the required mortgage. Hence Mr Esqulant became a party to the mortgage and the joint owner to facilitate the purchase.
A decree absolute was granted on 20 th November 2008. The Respondent and Mr Esqulant maintain that since that time they have not had contact with one another. Mr Esqulant formed a new relationship with someone else who was pregnant at the time of the divorce proceedings. The Respondent moved into the Property to reside there with the 3 children. The Respondent still lives there but Mr Esqulant never has. In about December 2008, Mr Esqulant became bankrupt.
On 23 rd May 2018 the Appellant issued a claim against Mr Esqulant arising out of the default of Mr Esqulant on a loan dated 19 August 2016 secured against another property. After selling the other property there was a balance as at time of the claim of £312,877.94. On 17 th July 2018, the Appellant obtained a judgment in default against Mr Esqulant for the sum of £276,449.26 together with court fees of £10,783. On 17 th August 2018, the Appellant obtained an interim charging order against the interest of Mr Esqulant in the Property which by then was in the sum of £288,932.18.
On 1 st October 2018, the Respondent filed and served a witness statement in which she claimed to have a 100% beneficial interest in the Property. She stated that “Daniel has never claimed to have a beneficial interest in the property”. She exhibited a signed letter from Mr Esqulant on 26 September 2018 addressed to “to whom it may concern”. He stated: “I had no interest in the Property which should be shown in the legal's (sic). Also I assume this is mentioned in the divorce.” In the bankruptcy of Mr Esqulant, his trustee in bankruptcy never made a claim in respect of the Property. All mortgage and property related payments were made by the Respondent and not Mr Esqulant.
At a hearing of 9 th October 2018, District Judge Swindley ordered that Mr Esqulant should by 4pm on 27 th November 2018 “declare to the court, Alison Esqulant and all other parties a witness statement in response to the statement of Alison Esqulant”. It appears that Mr Esqulant prepared a witness statement dated 26 th November 2018 and that he served the same on the Respondent, but not on the solicitors for the Appellant.
On or about 6 th March 2019, the Respondent applied to be added as a party to the proceedings so that she could contend that the Appellant's interim charge should be discharged and the Appellant's application for a final charging order should be dismissed. An order was made on 15 th March 2019 adding the Respondent as a party to the proceedings. The order provided that there should be heard together the Appellant's application for a final charging order and the Respondent's for a declaration as to the beneficial interest in the Property.
At the direction hearing on 15 th March 2019, District Judge Bever ordered that all parties must serve witness statements, but Mr Esqulant did not serve the above witness statement or any others. The Appellant says that it prepared for trial on the basis that Mr Esqulant had filed no witness evidence.
There were served for the Respondent a second witness statement of her own, a statement from her mother June George and a statement of Michelle Langford who worked for Mr Esqulant. On 21 st August 2019, nearly 3 weeks before the trial, the Respondent's solicitor emailed a letter requesting that Mr Esqulant's witness statement be included in the trial bundle. The Appellant's solicitors did not request a copy of the witness statement or query the request. On 27 th August 2019, the Respondent applied for a witness summons against Mr Esqulant to ensure that he would attend the trial and a relevant order was also served on him. There was no notice provided of the same at the time. On 4 th September 2019, the Appellant's solicitors served hard copies of the trial bundle. The index made reference to the first witness statement of Mr Esqulant, but the statement itself was omitted.
On 4 th September 2019, the Respondent's skeleton was sent to the Appellant which referred to the witness statement of Mr Esqulant at paragraph 4, and at paragraph 38 quoted from the statement. It also referred to a witness summons served on Mr Esqulant at paragraphs 1 and 39. It now appears that the skeleton argument of the Respondent was not considered by the Appellant's counsel until the evening prior to the hearing: see paragraph 31(1) of the Updated Appeal Skeleton Argument. On the morning of the trial, the Appellant's Counsel said that he had thought that the only evidence from Mr Esqulant was the letter. However, it is apparent from...
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Libyan Investment Authority v Roger King
...the cases referred to in those notes. In particular, para 32.10.1 refers to the decision in Capital Funding One Limited v Esqulant [2020] EWHC 981 (QB) in which the High Court upheld the trial judge's decision to admit late evidence from the first defendant in support of the second defenda......