Parris v Williams
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rimer,Lord Justice Moore-Bick |
| Judgment Date | 23 October 2008 |
| Neutral Citation | [2008] EWCA Civ 1147 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 October 2008 |
| Docket Number | Case No: B5/2007/2660 |
[2008] EWCA Civ 1147
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BOURNEMOUTH COUNTY COURT
Mr Recorder Stewart Patterson
Royal Courts of Justice
Strand, London, WC2A 2LL
LORD JUSTICE MOORE-BICK and
LORD JUSTICE RIMER
Case No: B5/2007/2660
Claim No: 7BH00195
Mr Philip Glen (instructed by Walton Mills & Co) For The Appellant
Mr Mark Dubbery (instructed by Steele Raymond Llp) For The Respondent
This appeal by Julian Parris, the defendant to the claim, is against an order of 7 November 2007 made by Mr Recorder Stewart Patterson in Bournemouth County Court. The claimant, and respondent to the appeal, is Albert Williams. The dispute relates to the beneficial ownership of a flat in Hampshire. The Recorder made a declaration that Mr Parris held it on trust for Mr Williams absolutely and gave directions for its sale with vacant possession. He refused Mr Parris's application for permission to appeal but Sir John Chadwick granted limited permission on the papers on 20 February 2008; and Mr Parris, who was represented by Mr Glen, has sought to renew a further ground of appeal that Sir John refused.
A. The facts, the issue and the Recorder's conclusion
Preliminary
In the 1980s Mr Williams acquired control and became a director of Antelope Technical Applications Limited (“ATA”) and later persuaded Mr Parris to join him there. Mr Parris acquired a shareholding in ATA equal to Mr Williams's and also became a director. ATA merged with Tridex Products Limited, the merged company becoming known as Antel Tridex Limited (“AT”). AT did not prove to be successful but in the meantime the friendship between Mr Williams, Mr Parris and their respective families had flourished.
In the 1990s Mr Williams ran into financial difficulties and on 23 September 1994 entered into an individual voluntary arrangement (“IVA”) with his creditors.
In 1998 Mr Parris was living at Flat 3 Normandy Court, Warsash, Hampshire. Normandy Court is a small block of flats. He became friendly with Mr and Mrs Brookfield, who owned Flats 1 and 6. Those two flats were adjacent, had two kitchens and two front doors but no dividing wall and had been occupied as one flat. Flat 1 was a two-bedroom flat and was a little larger than Flat 6, a one-bedroom flat. Mr Parris was offered the opportunity of buying both Flats 1 and 6 and he discussed with Mr Williams the possibility that they could buy them together. His plan was that they could be separated into two self-contained flats, which would add value, and let. Mr Williams, however, was unable to contribute to the purchase or to borrow money on mortgage because he was still subject to the IVA, as Mr Parris knew.
Despite this last consideration, Mr Williams's case was that they agreed to proceed with the purchase of the flats as a joint venture. Mr Parris would buy them, but on the basis that Flat 6 would belong beneficially to him, Mr Williams, who intended to leave it to his granddaughter. His case was that the purchase of both flats was to be financed by a mortgage loan, with the mortgage instalments being paid by AT. Mr Parris's case, by contrast, was that once it was clear that Mr Williams could not contribute to the purchase, he went ahead on his own in buying the flats: Mr Williams was to have no interest in them.
Mr Parris did buy both flats in his own name. The issue at the trial was whether Mr Williams was beneficially entitled to Flat Mr Parris denied he had any such interest, claiming to be the sole beneficial owner of both flats. The Recorder directed himself as follows:
“2. [Mr Williams] has to prove, on a balance of probabilities, that there was an agreement between the parties that the property in question [Flat 6] should be held by [Mr Parris] for the benefit of [Mr Williams]. Further, [Mr Williams] must show that, in pursuance of that agreement, he acted to his own detriment in a way which was substantial, not merely trivial.”
In short, Mr Williams's case was that he was entitled to his claimed interest in Flat 6 under a common intention constructive trust.
The purchase of the flats
Mr Parris bought the two flats in 1998, with completion taking place on 16 September 199Each flat had a separate title number. On the advice of Mr Cooke, an independent financial adviser, different solicitors were used, and separate mortgage finance was raised, for each purchase. The price of Flat 1 was £64,000. Mr Parris used his credit card to pay the deposit of £1,000, and a mortgage loan of £62,137 was raised from Woolwich Plc. The balance payable on completion was £3,711.61. The price of Flat 6 was also £64,000, in respect of which a deposit of £1,000 was also paid (again by use of Mr Parris's credit card) and a mortgage loan of £57,960 was raised from Abbey National Plc. The balance payable on completion was £3,420. Each mortgage was for the purpose of residential occupation, not for a “buy to let”. Abbey National made it clear that it expected a party wall between Flats 1 and 6 to be erected between the exchange of contracts and completion of the Flat 6 purchase. Woolwich also required Mr Parris's solicitors to notify it when the wall was reinstated before providing the funds for completion.
Events subsequent to the purchase
Despite the mortgagees' requirements, both purchases were completed without the party wall having been built. It was erected later although there was a dispute as to when. Mr Williams said it was erected shortly after completion. His case was that he paid half the cost of the work, decorated both flats from top to bottom, paid half the costs of other items necessary to set the flats up and paid the annual maintenance charge in respect of one of the flats. Save that Mr Parris admitted that Mr Williams did half a day's painting in the flats – which he said he did as a friend – he denied that Mr Williams made any other contribution to the setting up of or payment in respect of the flats. Mr Parris's case was that it was he who did and paid for everything. He said that following the purchases he moved into the two flats with his girlfriend, who also occupied them for a short while with her two children. He said, and the Recorder accepted this, that the dividing wall was built in April 1999, some seven months after completion of the purchases.
Following the building of the dividing wall, Mr Parris moved out of the flats and both were then let, the rent being used to pay the mortgage instalments on both flats and other outgoings. Mr Parris was alone responsible for arranging the lettings through agents, managing the lettings and for dealing (either in person or through contractors) with the cleaning of the flats between lets.
As to whether there was any agreement that Mr Williams should have an interest in one of the flats, the Recorder heard evidence going both ways. Mr Williams's evidence was that he and Mr Parris agreed at the outset that each was to have one flat. Mr Cooke, the financial adviser, gave evidence, and the Recorder accepted it, that Mr Parris told him that the flats were being bought in his, Mr Parris's, name because of Mr Williams's IVA but that each was to have a flat, which they had agreed on the basis of a handshake. Mr Williams's son-in-law, Mr Baker, and his wife also gave evidence that this was a joint venture, with the intention that Mr Williams's flat would ultimately go to their daughter. Because, however, of the Bakers' personal interest in the matter, the Recorder viewed their evidence with caution.
Mr Halliwell, a director of an electrical company, installed a new meter in Flat 1 and also said that the purchase was a joint one. He said Mr Williams was painting the new dividing wall when he arrived to do the work. His understanding was that Flat 1 was designated for Mr Parris. Mr Vass provided finance for vehicles owned by AT. His impression was that the flats were jointly owned by Mr Williams and Mr Parris. Mr Wheatcroft, an AT employee, carried items, including paint, to and from the flats; he said this was always at the behest of Mr Williams and his evidence was that it was common knowledge at AT that the flats were jointly owned. The Recorder accepted Mr Wheatcroft's evidence but said it amounted to little more than gossip and anyway appeared to have derived from Mr Williams.
By contrast, Donna Sinclair, Mr Parris's partner, supported Mr Parris's case that there was no agreement that Mr Williams should have an interest in either flat. Mr Northie, another AT director, gave evidence that he had never heard Mr Williams claiming to have an interest in them. Mr Dixon of Normandy Court Management Association, the management company of Normandy Court, confirmed that Mr Parris was the registered shareholder of three shares in the company and that the company's records showed Flats 1, 3 and 6 to be registered in his name: but that evidence was of course consistent with the trust arrangement that Mr Williams was asserting.
Having referred to this and certain other evidence, the Recorder turned to consider what, if any contributions, in cash or kind, Mr Williams had made to the purchase. This was relevant primarily to the question of whether he had acted to his detriment in reliance on the claimed agreement, but the Recorder also regarded it as relevant to whether there was an agreement between Mr Williams and Mr Parris in the first place.
As to the construction of the party wall in April 1999, Sean Green gave evidence that he did the work, and did so on Mr Parris's instructions, who also paid him, and...
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