Lewis v Eliades (No. 4)
| Jurisdiction | England & Wales |
| Judge | Lord Justice May |
| Judgment Date | 21 December 2005 |
| Neutral Citation | [2005] EWCA Civ 1637 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 2005 |
| Docket Number | Case No: A3/2005/0759/A |
[2005] EWCA Civ 1637
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
MR JUSTICE PETER SMITH
Royal Courts of Justice
Strand, London, WC2A 2LL
The Rt Hon Lord Justice May
The Rt Hon Lady Justice Arden Dbe and
The Rt Hon Sir Martin Nourse
Case No: A3/2005/0759/A
HC03CO4498
Ann McAllister (instructed by Boodle Hatfield) for the Appellant
Ian Mill QC and Timothy Harry (instructed by Forbes Anderson) for the Respondent
Lord Justice May
Introduction
The claimant, Lennox Lewis, is the former world heavyweight boxing champion. The first defendant, Panos Eliades, was his business manager and promoter. They have since fallen out. The second and third defendants are the administrators in this jurisdiction of the estate of Aristos Kaissides, who died on 11 th April 2000. Mr Kaissides was a bank manager in Cyprus with the Popular Bank of Cyprus and known to Mr Eliades.
Under the terms of a promotion agreement dated 19 th February 1991, the claimant was entitled to be provided with living accommodation in England free of charge. From some time in 1993, the claimant lived in England at 39 Beech Hill, Enfield. This was a property which the claimant believed belonged to Mr Eliades. The claimant lived there, not free of charge, but at a rent of £1500 per month. This was a rent which was less than the market rent, although there is some controversy in these proceedings about whether that is indeed so. There are pending proceedings before a Rent Assessment Committee about the proper amount of rent for the Enfield property. The claimant owes an amount, yet to be ascertained, for that rent.
After they fell out in about 2000, the claimant and Mr Eliades participated in acrimonious litigation in New York. Mr Eliades or his company sued the claimant for loss of some US100m. The claimant counterclaimed for damages for fraud and other causes of action. The claimant was successful in these proceedings in February 2002 before a judge and jury. He recovered judgments for some US8m. He subsequently obtained a judgment after set off in this jurisdiction for US6,273,641. An appeal by Mr Eliades to a High Court Judge was dismissed, but the Court of Appeal reduced the amount of the English judgment to US5,877,559
The outcome of the New York proceedings showed that the jury disbelieved Mr Eliades' evidence. In particular, he was shown to have lied comprehensively in evidence about things he said that Mr Kaissides said and did at a time when Mr Kaissides was dead.
The proceedings
The present proceedings are part of the claimant's attempt to enforce his judgment, no payment having been received. By his claim form dated 23 rd December 2003, he claimed a declaration that Mr Eliades is the true beneficial owner of 39 Beech Hill, Enfield ("the Enfield property") and that the second and third defendants as administrators of the estate of Aristos Kaissides hold the property on trust for Mr Eliades. The claim was heard in the Chancery Division by Peter Smith J. On 23rd March 2005, the judge held [2005] EWHC 488 (Ch) that Mr Eliades was indeed the beneficial owner of the Enfield property.
The second and third defendants appeal against Peter Smith J's decision by permission of Carnwath and Neuberger LJJ. Neuberger LJ had originally refused permission on paper, giving what to my mind are compelling reasons for doing so. There is a cross appeal by the claimant against part of a later order of Peter Smith J, to which I shall come later in this judgment.
The defendants' case was that the Enfield property was owned both legally and beneficially by Mr Kaissides and that it is now held by his administrators as trustees of his estate.
The Enfield property was acquired by Mrs Eliades (Mr Panos Eliades' wife) by a transfer dated 1 st November 1983. She was registered as proprietor on 6 th February 1984. The price then was £300,000. This was entirely provided by Mr Eliades as a gift to her. He also gave her £50,000 to carry out work to the property. However, Mrs Eliades did not like travelling to and from Enfield and changed her mind about moving out of London. So in May 1987 she found and in August 1987 bought a property, Compton House, Compton Avenue, Highgate for £1,552,000. She put the Enfield property on the market, but it did not initially sell. So it was necessary to obtain bridging finance for the Highgate property, which Mr Eliades did, obtaining £950,000 from the Cyprus Popular Bank. Mr Eliades gave his wife the balance of £600,000 or so to buy the Highgate property.
Mrs Eliades gave evidence in these proceedings. The judge found her honest, straightforward and truthful. But the judge did not think that she knew anything of substance about her husband's business dealings or the arrangement of his affairs.
After the failure to sell the Enfield property, there were various tenants of it. Mr Chatwell occupied the property in 1988 for about a year paying a rent of £15,000 a year. Then Mr and Mrs Bassett occupied it for about a year from August 1990 paying £1,000 per week. Their rent was paid through a company called Victory Church Limited. No documents relating to the leases had survived, but there were some bank statements of an account with Barclays in the name of Mr Kaissides.
11. The claimant's rent for the Enfield property of £1500 per month was substantially less than Mr and Mrs Bassett had paid, though somewhat more than Mr Chatwell had paid. The judge heard Mr Eliades' explanations for the amount of the claimant's rent. He found them unconvincing. The judge said that Mr Eliades was obliged to provide the claimant accommodation rent free and negotiated a figure of £1500 per month which was the most that the claimant was prepared to pay as his contribution to a larger property to alleviate the obligation to pay the full cost. This supported the claimant's case that Mr Eliades was the beneficial owner, since there was no advantage to Mr Kaissides, who by this stage was the registered owner, in receiving a reduced rent.
The rent payment from Victory Church Limited went into a Barclay's account in the name of Mr Kaissides. There were no cheque payments out of this account to Mr Kaissides, and no evidence, other than that of Mr Eliades, that the cash withdrawals went to Mr Kaissides or to his children while they were receiving education in England. The only evidence of what happened to the claimant's rent was a running account prepared by Mr Eliades to show to the claimant's brother. This showed expenditure by Mr Eliades on behalf of the claimant.
The Enfield property was not sold in 1987. The judge considered that Mr Eliades came under pressure after that from his wife to remove the charge over Compton House by discharging the bridging loan. The Enfield property was transferred to Mr Kaissides by transfer dated 25 th July 1989. The amount paid according to the transfer was £1,150,000. The application to register the transfer, signed by Mr Eliades, was not lodged until December 1989. The conveyancing documents, such as they were, were prepared by Mr Christos Eliades, Mr Panos Eliades' brother. He had been a solicitor, but was struck off, having been convicted of theft.
Mr Kaissides was manager of the Larnaca branch of the Popular Bank of Cyprus. Mrs Eliades gave evidence that she was disappointed that the property did not sell for more. Her evidence was that money was paid by Mr Kaissides in two transfers, one of £800,000 on 28 th June 1989 and the other of £350,000 on 25 th July 1989. This enabled the bridging loan to be repaid. No document was produced to the judge by the second or third defendants showing that any money came from Mr Kaissides. The judge suspected that Mrs Eliades did not know precisely where the money came from. The judge was satisfied that Mrs Eliades genuinely believed that she was selling the property to Mr Kaissides. But it did not follow that it was a genuine transaction.
15. There were some documents relating to the money – bank statements for the bridging loan produced by Mr Eliades, having been found by Mrs Eliades in a drawer at Compton House when she was clearing things out. On 5 th August 1987 a sum of £950,000 was debited to the account. In the succeeding two years, interest was rolled over and certain payments to reduce the debit balance were made. On 28 th June 1989, £800,000 was paid into the account. On 26 th July 1989, a further £198,031.69 was paid in to clear the account. The bank statements give no indication as to the source of these payments. The second of them does not equate to the second amount which Mrs Eliades said Mr Kaissides paid. But the total amounts paid into the account over the years were within £3,000 the same as the amount for which the Enfield property was recorded as having been transferred.
As I have said, there was no document before the judge showing that any of this money came from Mr Kaissides. Mr Kaissides did not sign the transfer which was before the court. The judge gave an account of the evidence relating to Mr Kaissides in paragraph 36 of his judgment. He was manager of the Larnaca branch of the Popular Bank of Cyprus in 1989. In 1990 he became manager in Nicosia until his retirement in 1994. In 1987, he was earning the equivalent of £18,000 sterling a year. Mr Karis, one of the administrators of Mr Kaissides' estate, was the only family member to give direct evidence. He did not know how Mr Kaissides could have amassed such a large amount of money. There was a witness statement from Mr...
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