Lea Lilly Perry and another v Lopag Trust R and another
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hodge |
| Judgment Date | 18 May 2023 |
| Neutral Citation | [2023] UKPC 16 |
| Court | Privy Council |
| Docket Number | Privy Council Appeal No 0014 of 2022 |
[2023] UKPC 16
Lord Hodge
Lord Lloyd-Jones
Lord Briggs
Lord Kitchin
Lord Sales
Lord Stephens
Lord Richards
Privy Council Appeal No 0014 of 2022
Privy Council
Easter Term
From the Court of Appeal of the Cayman Islands
Appellants
David Brownbill KC
Daniel Warents
Sparsh Garg
Nick Dunne
(Instructed by Bridge Law Solicitors Limited)
Respondents Graeme McPherson KC
Tim Chelmick
Frederick Wilmot-Smith
(Instructed by PCB Byrne LLP)
Heard on 18 January 2023
It has long been the practice of the Board to decline to hear appeals which are in substance a challenge to the findings of fact of the first instance court which have been upheld by the appellate court, save in exceptional circumstances. This appeal raises the question whether there are exceptional circumstances which would justify the Board in hearing this appeal in so far as it seeks to challenge concurrent findings of fact. The Board is satisfied that, in so far as the appellants seek to challenge concurrent findings of fact, no such exceptional circumstances exist in this case and advises that the appeal be dismissed.
As discussed more fully below, the appeal raises three principal questions. The first is whether there are concurrent findings of fact and if so, whether the Board should review the findings because of any failure of the Court of Appeal properly to address the appellants' challenge to the findings of fact of the trial judge. Secondly, the appellants argue that findings of fact in relation to foreign law need to be treated differently from other findings of fact and do not readily fall within the scope of the Board's practice in relation to concurrent findings of fact. The third question is whether the Board should decline to follow the decision of the Supreme Court in Pitt v Holt [2013] UKSC 26; [2013] 2 AC 108 on the basis that an equitable claim based on mistake extends to a transaction brought about by a party's ignorance as well as by a mistaken belief or tacit assumption. A panel of seven Justices has been convened because of the challenge to Pitt v Holt.
In Devi v Roy [1946] AC 508 the Board explained its practice of declining to hear appeals which were in substance a challenge to concurrent findings of fact by the courts below, save in exceptional circumstances. Lord Thankerton, delivering the judgment of the Board, set out at p 521 in his fourth proposition the scope of the exception to the general practice. He stated:
“That in order to obviate the practice, there must be some miscarriage of justice or violation of some principle of law or procedure. That miscarriage of justice means such a departure from the rules which permeate all judicial procedure as to make that which happened not in the proper sense of the word judicial procedure at all. That the violation of some principle of law or procedure must be such an erroneous proposition of law that if that proposition be corrected the finding cannot stand; or it may be the neglect of some principle of law or procedure, whose application will have the same effect. The question whether there is evidence on which the courts could arrive at their finding is such a question of law.”
More recently the Board has established a procedure by which an appellant in a case which, at least in a substantial part, seeks to disturb concurrent findings of fact will need to demonstrate the required exceptionality, initially in the appellant's written case and, if the Board is not persuaded by that written submission, by concise oral submissions at the start of the appeal hearing: see Sancus Financial Holdings Ltd v Holm (Practice Note) [2022] UKPC 41; [2022] 1 WLR 5181 and Gormandy v Trinidad and Tobago Housing Development Corpn [2022] UKPC 55.
Under this procedure if an appellant is arguing that the judgments of the courts below are undermined by the absence of evidence on which the courts could arrive at their findings, the appellant should set out clearly in the written case (i) what the findings are that are challenged on that basis and (ii) why those findings are critical to the outcome of the case. This will give the respondent the opportunity to answer those assertions in its written case. That in turn will enable the Board to assess the merits of the assertions in their pre-reading so that the matter can be addressed concisely in the initial debate. Devi v Roy lays down that the Board will depart from its practice in relation to concurrent findings of fact only in the exceptional circumstances which it sets out. It is not sufficient for a departure from the Board's practice that there are findings of fact which are unsupported by evidence unless those findings can be shown to be critical to the outcome of the case.
In Sancus, para 5, the Board set out the reasons for its practice of declining to hear appeals against concurrent findings of fact in the absence of such exceptional circumstances. They are, in summary, (i) that the reliability of the trial judge's findings will already have been subjected to careful review by a properly constituted and experienced court of appeal, (ii) when the trial judge and the appellate court have agreed upon a finding of fact, it is inherently unlikely that a second appellate court will be well placed to disagree with both of them with any degree of confidence, (iii) the parties are entitled to expect a reasonable degree of finality in litigation, (iv) the examination of detailed evidence underlying findings of fact is an expensive and time-consuming process for the Board and is likely to strain the Board's limited resources, and (v) in cases where the facts to be found relate to or may be influenced by local customs and practices, local courts are likely to have a deeper understanding of their customs and culture than the Board.
Mr Perry was an Israeli-qualified lawyer and businessman who accumulated substantial wealth for himself and his family by the provision from about 1983 onwards of financial services which allowed Israeli residents to participate in the (then) West German social security pension scheme. Unfortunately, he used criminal means to acquire part of his wealth. At the time of his death in 2015 he was serving a ten-year prison sentence for fraud which had been imposed by the Israeli courts but had been released into house arrest in 2012 on the ground of ill health. In October 2013, as part of his succession and wealth management planning, Mr Perry transferred the single issued share in a Cayman company, Britannia Holdings (2006) Ltd (“BH”) to Lopag Trust Reg (“Lopag”), a Liechtenstein trust enterprise, as trustee of a discretionary trust known as the Lake Cauma Trust. BH held shares in a Cayman Islands insurance company and, through subsidiary companies, other assets of considerable value. In January 2017 Fiduciana Verwaltungsanstalt became a co-trustee of the Lake Cauma Trust and in February 2018 Fiduciana was replaced as co-trustee by Admintrust Verwaltungsanstalt (“Admintrust”). Mr Perry's widow, Lea Lilly Perry and her elder daughter, Tamar Perry, challenge the transfer of the BH share to the Lake Cauma Trust on two principal grounds. First, Mrs Perry argues that the share transfer was void or should be set aside because it breached her matrimonial rights under Israeli law. She argues that the transfer was effected without her knowledge and consent and separately that it did not comply with formalities which Israeli law required. The Board refers to that argument as “the matrimonial claim”. Secondly, Mrs Perry and Tamar (on behalf of Mr Perry's estate) argue that the transfer should be set aside for equitable mistake. They assert that Mr Perry would not have transferred the share if he had known that discretionary beneficiaries did not have effective rights to enforce the trustees' obligations. The Board refers to this argument as “the mistake claim”. Mr and Mrs Perry's other daughter, Yael Perry, gave evidence at trial contesting the claims by Mrs Perry and Tamar Perry. Since succeeding in her opposition to the claims at first instance, she has taken no part in the proceedings on appeal. Lopag and Admintrust continue to oppose the challenge.
As the Board explains below, findings of fact in relation to foreign law are findings of fact but they are in a special category. The lower courts' findings of fact are closely tied into their findings of fact in relation to foreign law. It is appropriate therefore first to address the Board's approach to concurrent findings of fact in relation to foreign law before turning to the question whether there are circumstances which bring this appeal within one of the exceptions recognised by Lord Thankerton in Devi v Roy.
Mr David Brownbill KC for the appellants argues that the Board's practice in relation to concurrent findings of fact should not be applied in this case to the challenged findings of fact in relation to foreign law because such findings differ from ordinary findings of fact. In essence, he submits, the trial judge and the first appellate court can use their legal training and experience to analyse and reach their own conclusions in relation to foreign law. So too may the Board, which, he submits, should not defer to the conclusions of the courts below. The Board does not agree.
The starting point is that findings in relation to foreign law are findings of fact because a judge is not to be imputed to know foreign law: Nelson v Bridport (1845) 8 Beav 527; 50 ER 207. Absent agreement between the parties, foreign law is proved by suitably qualified...
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