Samad v Thompson and Another
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE SALES,Mr Justice Sales |
| Judgment Date | 18 November 2008 |
| Neutral Citation | [2008] EWHC 2809 (Ch) |
| Court | Chancery Division |
| Date | 18 November 2008 |
| Docket Number | Case No: HC06C01797 |
[2008] EWHC 2809 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Honourable Mr Justice Sales
Case No: HC06C01797
Mr Russell Stone (instructed by Elliot Stephens) for the Claimant
Mr Paraskevakis Paraskos (instructed by LL Sassoon & Co) for the Defendants
Hearing dates: 21.10.08 – 29.10.08
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.
Mr Justice Sales:
This is a claim for a declaration that the Defendants (“Mr and Mrs Thompson”) hold the leasehold property at Flat 82, 9 Albert Embankment, London SE1 7HD (“the Property”) on trust for Mr Samad, and are required now to transfer it according to his directions. Mr and Mrs Thompson are the registered legal owners of the leasehold interest in relation to the Property. Mr Samad's case is that Mr and Mrs Thompson acquired the Property pursuant to an oral agreement that he had made with them, whereby they agreed to acquire the Property but then hold it for the benefit of Mr Samad, while he paid the deposit and covered all expenses in relation to the Property including service charges, ground rent and payments in respect of the mortgage which the Thompsons took out to pay the purchase price. Mr Samad's case is that a resulting trust arose in relation to the Property by virtue of the fact that he has paid the whole of the costs of acquisition by providing the deposit in the sum of £38,000 and meeting all the mortgage payments. In the alternative, he says that a constructive trust arose in relation to the Property by virtue of the fact that it was acquired by the Thompsons pursuant to an express oral agreement that it would be held for his sole beneficial benefit, where he has acted to his detriment in reliance on that agreement and has at all material times been and remains ready, willing and able to discharge the Thompsons from their borrowing under the mortgage which they took out to buy the Property. In the further alternative, he claims to be entitled to the whole beneficial interest in the Property or a part thereof by virtue of a proprietary estoppel which he claims arose out of the agreement made with Mr and Mrs Thompson and acts of his own in detrimental reliance upon that agreement.
The Thompsons, for their part, deny that any such oral agreement as is alleged was ever made. They maintain that no resulting trust arose for the benefit of Mr Samad because (i) so far as concerned the deposit, which they accept was paid by Mr Samad, they say that was done pursuant to a particular arrangement that had been agreed with Mr Samad according to which they understood that Mr Samad or the property company which he represented, Monopoly Property Investments Ltd (“Monopoly”), had itself acquired the Property from the freeholder, was anxious to sell it on (presumably at a profit) and offered to pay the deposit as an incentive for the Thompsons to purchase the Property and (ii) as to the balance of the purchase price, they say that the money used was their money obtained by them by means of a loan from Bank of Scotland to them against the security of a mortgage given by them in respect of the Property. So far as the constructive trust claim is concerned, they deny that a constructive trust has arisen, since they deny that the oral agreement which Mr Samad alleges was ever made. They say that the payments of the mortgage sums due and the payments of service charges and ground rent by Mr Samad were pursuant to an agreement that he would sub-let the Property from them in return for such payments, which were to stand as rent only. It is common ground that Mr and Mrs Thompson at an early stage paid two monthly mortgage payments themselves. Mr Samad's case as to those is that in due course he reimbursed Mr Thompson for those payments, so that the practical effect was that Mr Samad had paid all the mortgage payments. Mr Thompson denies that such a reimbursement arrangement was ever entered into. So far as concerns the proprietary estoppel claim, the Thompsons' case again is one of denial of the alleged oral agreement upon which Mr Samad seeks to rely and a denial that there were any acts of detrimental reliance by Mr Samad in relation to any such agreement.
As appears from this summary, this is a case in which the resolution of the dispute turns critically upon conflicting evidence about oral agreements which are alleged on the one hand to have been made but which are denied on the other. Accordingly, the court's assessment of the witnesses on both sides is central to determination of the issues which arise. Having observed the witnesses carefully in the witness box and taking account of all the circumstances of the case, I have come to clear views concerning the reliability and truthfulness of the witnesses on each side.
I found Mr Samad and the other witnesses called to support his case to be truthful and credible in all the essential elements of their evidence. Their version of events was corroborated by such contemporaneous documents as were available to the court. The witnesses for the Claimant also provided strong mutual corroboration for various important aspects of Mr Samad's case.
On the other hand, both Mr and Mrs Thompson made an adverse impression upon me. Although Mr Thompson had been represented by lawyers at different stages in the proceedings, he had provided only limited documentation in relation to the matters relevant to the case, which was surprising. In the course of giving his evidence, he would not accept that any document had been sent to or seen by him unless he thought that it would strain credulity too far to deny it. I did not think that he was being open and frank with the court. His evidence was frequently vague and he affected not to remember significant matters. In all this he seemed to me to be a witness who was concerned to keep his powder dry so far as possible at all times so as to have a free hand to tailor his version of events to cope with any twist and turn in the case being made against him and the evidence as it was presented to the court.
In May 2007 Mr Thompson had provided a very summary four-page witness statement for use in the proceedings. On the first day of the trial his counsel, Mr Paraskos, informed the court that Mr Thompson would wish to supplement that witness statement. I gave leave for that to be done provided that a further witness statement was provided by him. Accordingly, on the second day of the trial, a second witness statement from Mr Thompson was provided. Both witness statements were unsatisfactory judged in the light of the way in which Mr Thompson's case emerged in the course of the hearing.
At this stage, while setting out my assessment of the quality of the witnesses, it is relevant to refer to some significant matters which particularly impressed me as indications that Mr Thompson could not be relied upon as a truthful witness. In paragraphs 24 to 26 of his second witness statement Mr Thompson said the following:
“24. In relation to the payment of any stamp duty or legal fees although on the face of it there do appear to be documents indicating that a deposit and reservation fee were paid, I cannot be sure whether such money ever was paid in the first place or whether any such money if paid was ever returned to the Claimant. I believe that the stamp duty and legal fees were actually paid by us. It is denied that the HSBC account that the Claimant refers to is mine and I cannot recall any money being paid into my account.
25. It is correct that I was never given a set of keys to the Property as it was discussed just before completion that the Claimant would use the Property as a show-home. As part of the agreement the Claimant was to make the mortgage payments in lieu of rent. Additionally, the Claimant was to pay all other charges such as the service charge in relation to the Property.
26. It is correct that the £2,383 was never returned to me. I was never told that there was any surplus money and never received a completion statement. At no time did I give permission for this money to be taken or used elsewhere.”
The following points should be made in relation to these paragraphs. First, in paragraph 24 Mr Thompson dealt with the question of payment of the deposit and reservation fee in respect of the acquisition of the Property. It is striking that he expresses uncertainty whether such a deposit and fee were ever paid and whether such money, if paid, was returned to Mr Samad. As the evidence emerged during the hearing, it became obvious that Mr Samad had indeed paid a reservation fee of £1,000 and the balance of the deposit in the sum of £37,000, making a total deposit of £38,000. So when Mr Thompson gave his evidence under cross-examination in the witness box, his story was changed to a version of events according to which he maintained that the Claimant had in fact paid the reservation fee and deposit, but that this was done pursuant to an arrangement with Mr Samad (who, on Mr Thompson's version of events, was anxious to sell the Property on to Mr Thompson so as to make some form of trading profit in relation to it) whereby in order to realise that profit Mr Samad had undertaken to pay the deposit monies himself so that Mr and Mr Thompson's acquisition of the Property could proceed. On Mr Thompson's final version of events, then, the deposit and reservation fee were indeed paid by Mr Samad (or Monopoly) but as an incentive for Mr and Mrs Thompson to proceed with the purchase of the Property for themselves. In his closing submissions for Mr and Mrs...
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