Dennis PRITCHARD Evans v TIGER Investments Ltd and David John Moore
| Jurisdiction | England & Wales |
| Judge | Lord Justice Potter,Lord Justice Kay |
| Judgment Date | 20 February 2002 |
| Neutral Citation | [2002] EWCA Civ 161 |
| Docket Number | Case No: B2/2000/3192 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 February 2002 |
[2002] EWCA Civ 161
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HASTINGS COUNTY
COURT (Mr Recorder Morris-Coole)
Royal Courts of Justice
Strand,
London, WC2A 2LL
The President
Lord Justice Potter and
Lord Justice Kay
Case No: B2/2000/3192
Michael Fullerton Esquire (instructed by Nigel Weller & Co for the appellant)
Neil Vickery Esquire (instructed by Lawson Lewis & Co for the respondent)
INTRODUCTION
The first defendants Tiger Investments Limited ("Tiger") appeal from the decision of Mr Recorder Morris-Coole sitting in the Hastings County Court on 8 September 2000, whereby he gave judgment for the claimant against Tiger for the sum of £53,599.44 being principal and interest upon a loan made by the claimant in December 1994 which had not been repaid. That loan was secured by a form of legal charge ostensibly executed by Tiger over properties owned by Tiger and registered under title numbers ESX 184226 and ESX 195537 ("the Dalehurst Road properties"). By his judgment, the Recorder also ordered possession of those properties in favour of the claimant pursuant to the charge and he dismissed Tiger's counterclaim against the claimant for a declaration that the charge was not executed by Tiger, or with its authority or approval, and was therefore not binding upon it.
The individual to whom the claimant had made the loan (which was in cash) was David Moore the second defendant. He was one of two equal shareholders in Tiger and was the signatory to the form of charge. He asserted that, in receiving the loan and executing the form of charge he was acting for Tiger. The claimant, as an alternative to his claim against Tiger under the form of charge, claimed against Mr Moore on the ground that he was personally liable. The judge, having held Tiger liable, dismissed the claim against Mr Moore.
By its Grounds of Appeal, Tiger complains that the judge's decision was against the weight of the evidence in a number of respects and in particular that he erred in law in finding that, what would otherwise have been an invalid and unauthorised charge on the part Tiger, had nonetheless been validated by the sanction and acquiescence of its other joint shareholder, Mr Hill. In so asserting, Tiger seeks to adduce fresh evidence in the appeal, the burden of which is to confirm the thrust of Tiger's case at trial (rejected by the judge) that Mr Moore received the loan of £40,000 for use in the purchase of a farm property as his own home, and that he acted in a personal capacity throughout and not, as he asserted before the judge, for the purpose of a purchase on behalf of Tiger.
THE FACTS
Tiger was incorporated in the Isle of Man on behalf of Mr Moore and Mr Hill, who divided its issued share capital equally between them and used the company for the purpose of furthering joint property acquisitions and building development enterprises. The company had two directors, Mr and Mrs Solly, one of whom was company secretary, and both living on the Isle of Man. Mr Moore and Mr Hill had strong family ties built up over years, Mr Hill living in a settled relationship with Mr Moore's daughter. They spent much time in the company of each other in pursuing their business and as an extended family. Each would seek out business opportunities through extensive connections in the property world in the form of properties which were suitable for acquisition, development and sale, Moore conducting the building operations, whilst Hill was more concerned with the administrative side. Mr Moore also had property dealings on his own account from time to time. The judge observed that their close relationship was central to an overall understanding of the manner in which they conducted business and the mutual trust and reliance on which their continuing success was based. By the time of the trial, however, they had fallen out, their relationship was 'solely business' and they took opposing sides in the case.
The relevant facts and issues as found and dealt with by the judge at trial are as follows. Mr Moore met the claimant in December 1994 and, after taking him on a tour of various properties, including the Dalehurst Road properties the subject of the eventual charge, persuaded Evans to lend him £40,000 for the purchase of a farm property ("Cowbeech") which he said he was anxious to acquire. On 20 December 1994 the claimant went to Mr Moore's office where he met him and Mr Robinson, who acted as the conveyancing solicitor both for Tiger and Mr Moore in relation to their property dealings. Mr Robinson drove the claimant to a building society where he collected £40,000 in cash, returning to Mr Moore's office where the claimant handed over the money. The loan was to be a short-term loan to be repaid by the end of February 1995 and it was agreed that interest would be paid upon it at the rate of 6%. Although the claimant made no request for security, the provision of security was discussed in front of him between Mr Moore and Mr Robinson, during which the name of Tiger was mentioned. Mr Robinson left briefly and returned having prepared a charge document in the name of Tiger, the material part of which read as follows:
"In consideration of Forty thousand pounds (£40,000.00) receipt of which is acknowledged Tiger Investments Limited whose registered office is at National House, Santon, Isle of Man as beneficial owner hereby charge the land comprised in the title above referred to with the payment to Dennis Pritchard Evans of 5, Meads Road, Seaford, Sussex of the principal sum of £40,000 on or before 28 th February 1995 together with interest at 6% per annum."
It was "signed as a deed by Tiger Investments Limited acting by" Mr Moore. Having signed the charge, Mr Moore gave it to the claimant and asked Mr Robinson to drive the claimant to Mr Moore's home to collect the land certificates for the Dalehurst Road properties covered by the charge which were kept there. That was done
It was the evidence of Mr Moore at trial that it was his intention throughout to purchase Cowbeech for Tiger, although he would sign the purchase contract in his own name for lack of time. The judge accepted that evidence and held that Mr Robinson was also aware of that intention at the time when he produced the charge document which Mr Moore signed. He rejected the evidence of Mr Robinson (who was called as a witness by the defendants) that he believed himself to be acting throughout for Mr Moore personally, Mr Moore being anxious to purchase Cowbeech as his own home. The judge did so because he preferred Mr Moore's evidence on that point holding that it was consistent with the way that Mr Moore had previously acquired properties for Tiger, passing over to Mr Hill the question of attendance to the formalities by the Isle of Man directors. The judge also found that it was consistent with the behaviour of Mr Robinson in relation to the preparation of the security. In that respect, Mr Robinson, having discussed and prepared the form of charge, made no comment or reservation concerning Mr Moore's signature on behalf of Tiger, although he knew that, for the charge to be formally valid, it had to be signed by the director and secretary, Moore being simply a 50% shareholder. Mr Robinson stated in evidence that he had had no qualms about the execution of the charge and the handing over of the deeds to the claimant. In this respect the judge said that he found it "inconceivable" that a solicitor who had acted for both Mr Moore and Tiger as separate clients in the past would lend himself to the purported charging of Tiger's properties as security for a personal loan made to Mr Moore unless satisfied that the purchase of the property was for the benefit of Tiger and not Mr Moore. In that respect the judge stated that his finding was not undermined by the fact that the receipt of the £40,000 was entered on the ledger card kept by Mr Robinson in the name of Mr Moore because it appeared that there was no separate card kept for Tiger and the judge was satisfied that at least one other transaction entered upon that card related to Tiger rather than to Mr Moore personally.
Mr Moore stated in evidence that, although he had not asked for Mr Hill's prior consent to Tiger's entry into the Cowbeech transaction, each trusted the other and each had the general authority of the other to negotiate transactions. Normally he, Mr Moore, would find the property and tell Mr Hill who would then confirm the transaction and the Isle of Man directors would sign the necessary documents on request. In respect of Cowbeech, Mr Moore said he had told Mr Hill immediately he had arranged the purchase of Cowbeech with the aid of the charge on Dalehurst Road and that Mr Hill raised no objection. Mr Moore said that, after exchange of the contract, they were unable to complete by the new date because of Mr Robinson's failure to arrange long-term mortgage finance, and, in those circumstances, Mr Hill went to see the vendor of Cowbeech in order to seek more time to complete. When the vendor declined, the £40,000 deposit on Cowbeech was forfeited. Mr Hill stated that, some time later, he and Mr Hill fell out over money matters unrelated to the Cowbeech transaction. He suggested that that was the reason why Mr Hill was contesting Tiger's liability rather than accepting the position.
Mr Hill denied that he had any knowledge of the signing of the charge until the claimant later sought to register and thus to enforce it. He said he knew...
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