Mr Thain-Michel Kleinhentz v Mr Mark Harrison
| Jurisdiction | England & Wales |
| Judge | Robin Vos |
| Judgment Date | 15 December 2020 |
| Neutral Citation | [2020] EWHC 3439 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: PT-2018-000094 |
| Date | 15 December 2020 |
[2020] EWHC 3439 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
PROPERTY TRUSTS & PROBATE LIST (ChD)
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Robin Vos
(SITTING AS A JUDGE OF THE CHANCERY DIVISION)
Claim No: PT-2018-000094
Mr Edward Bennion-Pedley (instructed by direct access) appeared for the Claimant the First Defendant and the Second Defendant appeared in person
Hearing date: 16–18 November 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to BAILII. The date and time for hand-down is deemed to be 15 December 2020 at 10.30am
DEPUTY JUDGE
Introduction
The Claimant, Mr Thain Kleinhentz and the First Defendant, Mr Mark Harrison lived together for most of the period between 1990 and 2011. Throughout the hearing, Mr Kleinhentz and Mr Harrison were referred to respectively as Thain and Mark and so I shall do the same in this Judgment.
In 2005, Mark purchased a house in Margravine Gardens in his sole name using money provided by his father. When Mark asked Thain to leave in 2011, Thain asserted that he had a beneficial interest in the property. However, on 24 September 2011, Mark and Thain entered into an agreement under which, subject to certain conditions, Mark agreed to pay Thain a minimum amount of £250,000 (the “2011 Agreement”). In return for this, Thain withdrew any claim that he had a beneficial interest in the property.
The house at Margravine Gardens was subsequently sold in 2015. Part of the sale proceeds was used to purchase a property in the name of the Second Defendant, Craig White, with whom, by this time, Mark had entered into a civil partnership.
Mark has not paid any money to Thain under the terms of the 2011 Agreement as he says that none of the conditions have been satisfied. In his defence he also argued that the agreement was either unenforceable or should be set aside on numerous grounds including lack of consideration, uncertainty, duress, undue influence and incapacity. He no longer relies on these defences but continues to argue that the relevant conditions have not been satisfied so that no payment is due.
Thain, on the other hand, says that the conditions were satisfied when Mark received the proceeds of sale of Margravine Gardens or, alternatively, that Mark waived or varied the conditions so that payment became due on receipt of the sale proceeds.
The reason that Mr White is a defendant is that Thain asserts that Mark held the proceeds of sale (or at least a relevant part of the proceeds of sale) as constructive trustee for Thain, so entitling him to follow/trace those proceeds into the house which is owned by Mr White and which was funded by Mark. This is important for the purposes of enforcing any order in Thain's favour as he does not believe that Mark has any other assets out of which such an order could be satisfied.
As an alternative, Thain claims that Mr White holds the property as trustee for Mark on the basis of a resulting trust given that Mark provided funds for the purchase. However, having heard the evidence on this point, all parties now agree that the Court should not make any finding in respect of this issue.
One unusual feature of this case is that Thain asserts that he and Mark were in a committed relationship whilst Mark denies the existence of any such relationship. It is therefore necessary for me to examine the nature of their relationship, at least to the extent necessary to determine the issues which I have to decide.
Relevant issues
The first question I have to decide is whether, although Margravine Gardens was held in Mark's sole name, Thain had a beneficial interest in the property. Thain's case in relation to this is based on the existence of a common intention constructive trust. In examining this question, it will also be necessary to determine whether Thain had a beneficial interest in the previous property which they occupied, a one-bedroom flat in Comeragh Road which was also held in Mark's sole name.
Although Thain's primary case is that he is entitled to be paid £250,000 in accordance with the 2011 Agreement which settled his claim to an interest in the property at Margravine Gardens, the question as to whether he had a beneficial interest in that property is relevant should I come to the conclusion (as Mark asserts) that the conditions for the payment of the £250,000 have not been met. The reason for this is that Mr Bennion-Pedley submits on behalf of Thain that, if the conditions for payment have not yet been met, the 2011 Agreement may be of no effect. In this case, he suggests that Thain's disclaimer of any interest he might have had in Margravine Gardens would also be of no effect. Alternatively, he submits that Thain's disclaimer was conditional on being paid so that, if he has not yet become entitled to be paid, the disclaimer has not taken effect.
The next issue is the interpretation of the 2011 Agreement and, in particular, whether the conditions for the payment of the £250,000 have been met as a result of the receipt by Mark of the sale proceeds of Margravine Gardens.
Assuming the sale of Margravine Gardens and the receipt of the proceeds by Mark did not trigger the obligation to make the payment of £250,000 to Thain, I will need to decide whether Mark and Thain agreed to vary the 2011 Agreement so that the obligation to make the payment nonetheless became due following receipt by Mark of the proceeds of sale of Margravine Gardens.
If I find that Thain is entitled to the payment of £250,000, the final point which needs to be determined is whether Thain had an equitable interest in the proceeds of the sale of Margravine Gardens which would entitle him to follow/trace those proceeds into the property owned by Mr White. In this respect, Thain puts his case on the basis of proprietary estoppel.
Background facts
Before considering these issues, it is convenient to set out the key events in relation to which there is no dispute, other than possibly the precise date when those events occurred. In this respect, at the end of the hearing I invited the parties to provide me, for reference purposes, with a chronology setting out the evidence from both parties as to the dates of the key events. The chronology which has been provided is helpful. However, I should make it clear that I have based my findings in relation to any dates when events have taken place solely on the evidence which was available to me at the hearing.
Thain is South African. He arrived in England from South Africa in August 1989. He and Mark met at a gay nightclub in November 1989.
Thain moved into Mark's one-bedroom flat in Morpeth Terrace in February 1990. The flat was owned by Mark's father.
In May 1991 Thain married a German lady, called Kirsten Bragard as he was hoping to be able to get a German passport.
In 1992, the flat at Morpeth Terrace was sold and Thain, Mark and Kirsten moved to a two-bedroom flat in Beaufort Street.
Thain was unsuccessful in obtaining a German passport and he and Kirsten divorced in around June 1993.
At around this time, Thain and Mark moved out of Beaufort Street. Mark moved to a rented one-bedroom flat at 10 Redcliffe Gardens. Thain moved to a property in Ifield Road. However, after about three months, Thain moved into 10 Redcliffe Gardens with Mark.
After Thain moved into Redcliffe Gardens, Thain's mother came to visit from South Africa and met Mark for the first time.
At some point in 1994, Thain had to leave the UK due to his immigration status and return to South Africa. Mark visited him in South Africa for two weeks in February 1995, staying with Thain's parents.
In May 1995, Thain came back to the UK on a six month visitor's visa, returning to South Africa in November 1995. He came back to the UK again at some point in 1996, returning to South Africa in September 1996.
In 1997, Mark moved to Chicago for work. At some point in 1997, Mark sent money to Thain to enable him to come and visit Mark in Chicago, where he stayed for a month before flying back to South Africa.
Mark returned to London in March 1998, renting another one-bedroom flat, this time at 98 Redcliffe Gardens. Thain joined him there, coming back to London from South Africa in April 1998.
In August 1998, Thain and Mark consulted immigration lawyers about the possibility of obtaining permission for Thain to remain in the UK as Mark's partner given that the rules had recently been changed to make this possible for same sex relationships.
Mark and Thain moved to a one-bedroom flat in Comeragh Road in March 1999. Mark purchased the flat for about £160,000 using money given to him for the purpose by his father.
In April 2000, Thain applied for indefinite leave to remain in the UK on the basis of his relationship with Mark. This was granted on 2 April 2002.
In September 2002, Mark purchased the property at Margravine Gardens for £550,000. The purchase price was funded from the £250,000 sale proceeds of Comeragh Road with the balance again being provided by Mark's father.
Mark was diagnosed with HIV in early 2005.
In 2007, Thain met Darren Cooper who moved into Margravine Gardens sometime after he was made redundant in November 2007.
Mark met the second defendant, Craig White, in 2010. Mr White moved into Margravine Gardens in June 2011.
Around this time, Mark's father told him that he was planning to give Mark...
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