(Court of Appeal, Hallett, Sullivan LJJ, Arnold J, 19 December 2013)
The sister-in-law and brother-in-law purchased a property as an investment and made an express oral agreement as to the terms upon which it was held. However, each asserted 100% all or nothing ownership.
At first instance the judge accepted the man's submission that he had used the woman to obtain a mortgage and legal ownership due to his poor credit rating and that she would act as a bare trustee in return for a monthly salary. The woman had asserted that the intention was for the property to be hers entirely and for her to receive an income from a B&B business run there by the man for which he would take excess bookings for his own B&B at no cost. The woman appealed.
The appeal was dismissed. It was clear that the judge had well in mind the presumption that the beneficial and legal interest should coincide but that this was only a starting point. While in some cases evidence of financial contribution could be vital, in this case as the woman was merely a conduit for payment from business profits the fact that the mortgage was in her name was of little assistance. The Court of Appeal found the judge's reasoning was perfectly intelligible and had taken into account consideration of the man's past business conduct. Although the judge had not dealt with detriment as a distinct issue when the judgment was read as a whole, in a common sense way it contained implicit acceptance of the detriment incurred.
A judicially approved version of the judgment with a comprehensive headnote will appear in a forthcoming issue of Family Law Reports.
Neutral Citation Number:  EWCA Civ 1763
Case No: B2/2013/0106
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CAMBRIDGE COUNTY COURT
(HIS HONOUR JUDGE MOLONEY QC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: Thursday, 19 December 2013
B E F O R E:
LADY JUSTICE HALLETT DBE
Vice President of the Court of Appeal (Criminal Division)
LORD JUSTICE SULLIVAN
MR JUSTICE ARNOLD
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JACI MATOS AGARWALA
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(DAR Transcript of
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Ms Cheryl Jones (instructed by Direct Access) appeared on behalf of the Appellant
Mr John Robson (instructed by Direct Access) appeared on behalf of the Respondent
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J U D G M E N T
 On 6 December 2012, His Honour Judge Moloney QC handed down a judgment in the Cambridge County Court in which he found that the appellant held No 79 High Street, Cherry Hinton, Cambridge ("the property") on trust for the respondent. The appellant appeals against the judge's order dated 14 December 2012 which gives effect to that judgment.
 The background to the case is set out in some detail in the judgment. In summary, the appellant and the respondent are members of the same family, sister‑in‑law and brother‑in‑law respectively. For convenience, the judge referred to them in his judgment by their first names, Jaci and Sunil. I will do the same in this judgment.
 The property is a house. It is common ground that Sunil identified the property as an investment and initially intended to purchase it in the name of a builder friend, Andy Prior, with a trust deed. This fell through and Sunil approached Jaci about the proposition, stating that it was a good deal but he did not have the credit rating to purchase it. The property was purchased in April 2007 on a mortgage as a commercial investment to be run as a B&B business. The purchase was made in Jaci's name. It was agreed that Sunil would operate and manage the B&B and arrange and supervise the necessary works. The legal title is in Jaci's name and the mortgage is in her name.
 The trial of the action before the judge took place between 22 and 29 August 2012. While the proceedings were fiercely contested on both sides, there was agreement on one further matter: namely, that there was a clear express oral agreement, or at least an understanding, between the parties as to the terms on which the property was to be bought, held and used. However, as the judge said, Jaci and Sunil's accounts of what that agreement was were diametrically opposed. The judge summarised the two rival versions of the agreement as follows in paragraphs 3(b) and 3(c) of the judgment:
"(b) Jaci's case is that the property and business were to be hers entirely, and would be her pension. Sunil would arrange the purchase, funding and conversion, and would run the business for her at no charge, with an estimated net income to her of £500 per month. The benefit to him would be that he already ran a B&B business at Bozworth Road, and frequently had to 'farm out' overbookings to rivals at additional expense to himself, whereas he would now be able to send them to her at no extra charge.
(c) Sunil's case is that he wanted No 79 for himself as a home business, but could not obtain a mortgage in his own name because he had a bad credit rating. His sister‑in‑law Jaci agreed to help him by taking out the mortgage in her name, but he would provide her with the money to pay it, and the house and business would in fact be 100% his. (She would in legal terms be a bare trustee). He would however make it worth her while by paying her a monthly salary of £800 to do the accounts of business."
The judge continued in paragraph 3(d):
"It will be seen that neither party contends either that there was no prior agreement between them as to the equity or that there was an agreement for some sort of joint venture such as would give rise to a shared equity; each is adamant that their agreement was that it should be 100% his/hers. In those circumstances, it appears to me that it would be wrong for the Court to look for or seek to imply a joint ownership for which neither side contends, and that the question before me is which account is, overall, the more probable."
Pausing there, the parties' positions in this appeal remain the same. There is no question of any form of joint ownership. Each contends for an "all or nothing" conclusion as to the beneficial ownership of the property.
The judgment below
 The judge began his consideration of the question "who holds the beneficial interest in the house?" with the legal title to the property. In paragraph 3(e) he said this:
"Since the legal title is in Jaci's name, and there is (despite Sunil's worst endeavours) no authentic memorandum in writing, signed by her and acknowledging his interest in the land as required by section 2.2 [Law of Property (Miscellaneous Provisions) Act 1989], he needs to establish his claim by way of the doctrines of constructive trust and estoppel, in accordance with the modern principles set out in Stack v Dowden  UKHL 17 and subsequent cases. Of course this is not a case of cohabiting couples nor of title in joint names, so it is the underlying principles rather than the specific decisions in those cases that matter here. Sunil's position is that when one combines the express agreement between him and Jaci that he should be sole beneficial owner (which may be described as a representation by her, relied on by him, that she would hold it on trust for him) with the detriments to him of the work that he put in buying, converting and running the business, and the monies that he (but not she) put into it, then it becomes unconscionable for her to deny his 100% beneficial interest. She is therefore estopped from denying it, and holds the property on constructive trust for him."
 When the parties fell out in July 2008, Jaci and her husband Sudhir took over the day‑to‑day running of the B&B from Sunil and changed the locks so as to exclude him. Sunil then forged Jaci's signature on a lease and a Deed of Trust in his favour, both backdated to the time of completion in April 2007, and showed them to the police in an attempt to re‑enter the property. Sunil's deceit was soon detected. Although he was arrested, he was not prosecuted. The police treated the matter as a civil dispute.
 It was against this background that the judge commented in paragraph 3(f) of the judgment:
"Sunil's uncorroborated oral evidence as to an undocumented oral agreement would carry little weight with any court, given his conduct in relation to the false Deed and Lease in July 2008 (which are typical of his cavalier attitude to the truth or authenticity of business documents). But it is his case that when one considers all the evidence of the parties' dealings up to July 2008 they are more consistent with his version than Jaci's. Jaci for her part says that all of those matters are equally consistent with the agreement that she contends for, and that their words and conduct throughout fit better with her version of the deal than with his. I shall deal below with the evidence, other than the parties' word, which seems to me to bear most convincingly on that question."
 The judge then dealt with that evidence in paragraphs 4 to 6 of the judgment under three headings: "4. Financial Contributions to Purchase and Improvement", "5. Sunil's Use of Trusts" and "6. Contemporary Emails between the Parties", before reaching his "Conclusions on Beneficial Ownership" in paragraph 7 of the judgment. In paragraph 4, the judge concluded that the evidence of financial contributions was not "of much assistance" in deciding which version of the oral agreement was more likely (see paragraph 4(d)). I will consider his reasons for reaching that conclusion below.
 In paragraph 5, the judge concluded that there were three other transactions in which Sunil had been involved which "bore some resemblance" to his version of the agreement in the present case and which therefore went "some way to strengthening the likelihood that he and Jaci did make such an agreement" (see paragraph 5(a)). In paragraph 6, the judge said that contemporary email traffic was "probably the best evidence of what, if anything, was the deal between the parties" (see paragraph 6(a)). He said that no one email was conclusive. While the judge identified some emails "which may lend support to Jaci's case" (see paragraph 6(b)), he also identified other emails which were "apparently more supportive of Sunil's position" (see paragraph 6(c)).
 Having analysed the evidence in that manner, the judge's conclusions in paragraph 7 on beneficial ownership were as follows:
"A claimant who, like Sunil here, begins by putting forward forged documents in support of his claim will inevitably find all his subsequently evidence viewed with extreme caution. Nevertheless it is important for me to remind myself, as criminal juries are reminded by judges, that the fact that a person has told a lie to the police or the court does not necessarily mean that the whole of his story is false, still less that he is guilty of the misconduct charged. Here he says now that, although the documents or at least their dates and signatures were false, their contents were essentially true ‑ that he was seeking retrospectively to create a written record of an oral trust agreement that had existed from the first. As indicated above, this account is corroborated by his own conduct in other similar situations, and by the contemporary emails considered as a whole; and in my view it is not refuted by the payment history or by Jaci's testimony before me, which is inconsistent with her own previous statements in the emails. When I stand back and look at the evidence as a whole, and ask myself which account is the more probable, I find that paradoxically Sunil's generally unscrupulous and self‑interested character works in his favour. It is very difficult to accept that such a man not only handed over to his sister‑in‑law for nothing a promising business proposition which he had been developing for himself, but also agreed to run it for her at no charge. (The supposed benefit of being able to send surplus guests there at no charge is an inadequate and unconvincing one.) It is considerably more likely that he agreed with her a business plan similar to what he proposed in the three other cases considered above ‑ purchase and mortgage in the name of a 'front man', remunerated to the minimum extent Sunil could get away with, and holding the property on trust for Sunil while Sunil managed the letting business. In these circumstances, a constructive trust on the terms of that oral agreement will arise in Sunil's favour, in accordance with the legal principles set out at 3(e) above."
The grounds of appeal
 In her skeleton argument and her oral submissions on behalf of the appellant, Ms Jones made a wide ranging attack on the judge's conclusions. Her principal criticisms of the judge's approach to the question "who holds the beneficial interest in the house?" were as follows. She submitted that the judge:
(1) Gave no or insufficient weight to the presumption that the beneficial interest in the property coincided with the legal interest in the property.
(2) Wrongly placed the burden of proof on Jaci, rather than placing the onus on Sunil to show that the beneficial interest in the property was different from the legal interest: see for example Stack v Dowden  2 AC 432 at paragraph 56.
(3) Failed to give any, or sufficient, weight to the fact that Jaci was solely liable under the mortgage.
(4) Erred in trying to ascertain what was the parties' common intention rather than first considering whether there was a common intention.
(5) Failed to make a finding that there was a common intention.
(6) Failed to have regard to certain pieces of evidence which supported Jaci's case.
(7) Asked the wrong question in simply considering which account was the more probable, rather than asking himself whether Sunil's case was sufficiently clear and cogent to displace the presumption that Jaci, as legal owner, was also the beneficial owner of the property.
(8) Wrongly gave weight to the forged trust deed.
(9) Gave no, or insufficient, reasons for believing Sunil's account.
(10) Made no finding as to whether, if there was a common understanding, Sunil had acted upon it to his detriment.
 I will deal with these points in turn.
(1) The presumption
 In my judgment, it is plain that the judge had the presumption well in mind. The question is not whether he expressly referred to the presumption as such but whether he applied it. Reading paragraph 3(e) of the judgment (see above) there can be no doubt that he did so. The judge took as his starting point the proposition that, since the legal title was in Jaci's name, it was for Sunil to establish his claim in accordance with the principles underlying Stack v Dowden. The judge was right to focus on the underlying principles, which commence with the presumption, because this was not a cohabiting couples or joint names case. The property was acquired as a business proposition in Jaci's sole name. Unsurprisingly, because this was a business proposition, it was common ground that there was an oral agreement or understanding between the parties as to the terms on which the property was to be bought, held and used. In these circumstances, if Sunil was able to establish, on the balance of probabilities, that the agreement was that he should be the sole beneficial owner, then provided he could also show that he had acted to his detriment in reliance on that agreement, he would be able to discharge the onus of showing that the beneficial ownership differed from the legal ownership. The weight to be given to the presumption will depend upon the facts of the particular case. In a conduct case, where no prior agreement is alleged, and where the parties' conduct is ambivalent, the presumption is likely to be decisive. But in a case such as the present, where it is common ground that there was an agreement as to how this business asset was to be bought, held and used, the presumption is only the starting point.
(2) Burden of proof
 In support of her submission that the judge had wrongly reversed the burden of proof, Ms Jones drew attention to the order of proceedings before the judge in which the judge had directed that Jaci should give her evidence first, followed by Sunil's evidence. Ms Jones submitted that it was for Sunil to establish his case; it was not for Jaci as the legal owner to prove her case. This submission might have had some force if the judge had been asked to consider, in effect, a "no case to answer" submission on behalf of Jaci, but no such submission was made and both parties gave their evidence as to what the agreement or understanding was. In those circumstances, what matters is not the order in which the parties gave their evidence about the agreement but the approach adopted by the judge in his judgment to the burden of proof in the light of the presumption. There can be no doubt that the judge correctly placed the burden on Sunil. It was for him to "establish" his claim: see paragraph 3(e) of the judgment. He had to establish that claim on the balance of probability: see paragraph 7 of the judgment.
(3) The Mortgage
 The judge referred to the fact that the mortgage had been taken out in Jaci's name and that the property was later remortgaged in her name in his "outline chronology" in paragraph 2 of the judgment: see paragraphs 2(a) and 2(b). In paragraph 4 of the judgment, the judge recognised that financial contributions to purchase and improvement were often a "vital source of evidence on the issue of beneficial ownership", and analysed the extent to which the various financial contributions were of assistance in this case. He dealt specifically with the mortgage in paragraph 4(b) as follows:
"b. As to the mortgage payments, again these were intended on either version of events to be met from the lettings of this commercial property, or failing that to be covered by loans repaid at the time of remortgage. Since the mortgage was in Jaci's name she paid the instalments, but Sunil was responsible for paying in money from the business to cover it. (The email trail is full of requests by her for him to do this in order to keep her overdraft down.) So in this case the mortgage payment history is of little help in deciding who is the beneficial owner."
 In support of her submission that the judge had failed to place sufficient weight on the fact that Jaci was the person who was liable under the mortgage, and who was liable to an even greater extent when the property was remortgaged, Ms Jones referred us to the judgment of Lord Neuberger MR (as he then was) in Laskar v Laskar  EWCA Civ 347, in which the Master of the Rolls discussed "the effect of taking the mortgage in joint names" in paragraphs 27 to 31 of his judgment. Laskar was a resulting trust case. The trial judge had found that there had been no discussions between the parties as to the ownership of the beneficial content in the property (see paragraph 8 of the Master of the Rolls' judgment) so the extent of the appellant's beneficial ownership in the property depended on whether the mortgage on the property which was taken out in joint names should be treated as a joint contribution to the purchase price.
 The position in the present case is very different. Since it was common ground that this was a business venture in which there was an agreement as to the terms on which the property was to be bought, held and used, the fact that the mortgage was in Jaci's name and that she paid the instalments was of little help in deciding the issue of beneficial ownership if Jaci was, in effect, a conduit for the payment of the instalments out of the profits of the business venture.
(4) and (5) Common Intention
 There is no force in these criticisms of the judgment. This was a case in which both parties were contending that there was a common intention. I would readily accept the proposition that if the parties' recollections differ as to what their oral agreement was, that may well lead to the conclusion that there was no common understanding: the parties were simply at cross purposes as to what had been agreed. However, it was no part of Jaci's case before the judge that there was no common understanding because she and Sunil were at cross purposes. Given the nature of the two versions of the common understanding, there was no room for a misunderstanding between Jaci and Sunil and none was suggested. Either Sunil was, if only in this particular respect, telling the truth about the agreement, or, as alleged by Jaci, he was lying.
 Ms Jones submitted that the judge had failed to have regard or give due weight to the evidence which supported Jaci's account. In her oral submissions she placed particular reliance on four pieces of documentary evidence which she submitted supported Jaci's case:
(i) Two letters, dated 21 September 2006 and 3 November 2006, from Sunil's solicitors to Sunil and from Sunil to his solicitors, respectively;
(ii) Two emails, dated 20 April 2007 and 21 June 2007, in which Sunil had described Jaci as the "owner" of the property.
 Dealing firstly with the two letters, Ms Jones relies on the letters for the proposition that in the letter from Sunil's solicitors to him, receipt of Mr Prior's cheque is acknowledged and the letter refers to Sunil's "requirements for the preparation of a Trust Deed and an agreement with Mr Prior," whereas in the second letter from Sunil to his solicitors, Sunil simply says that he is acting "for my sister‑in‑law".
 It seems to me that the contrast between the phraseology in the two letters is very far from being conclusive, but in any event, while it is true that the judge did not expressly refer to these two letters, it is clear that he had the inference which Ms Jones seeks to draw from them well in mind. When dealing in paragraph 5 of the judgment with Sunil's use of trusts on other occasions, the judge referred to Sunil's initial proposal that Andy Prior should be his front man in the purchase of the property (see paragraph 5(b)). In paragraph 5(e) the judge said this:
"These transactions do however also raise a point in Jaci's favour. If Sunil was prepared to enter into written trust deeds in respect of each of those other transactions, as the documents in each case show, why did he not also enter into one with Jaci at the time of the purchase of No 79? He says he drew one up then, but did not get her to sign it (and then forged and backdated her signature in July 2008); but he has not given any convincing explanation why, if that was their deal, he did not put it to her in writing for signature as he was willing to in the other cases. (He did however state, in an email to her dated 21 June 2007, that '... you are the owner. I will now start to prepare the tenancy agreement to cover all outgoings and loans so that you have no profit on the rent received and the Deed of Trust'. This suggests that there had, at that relatively early stage, been some mention of a trust between them.)"
 The email dated 21 June 2007 referred to in paragraph 5(e) is one of the two emails to which Ms Jones submitted the judge should have given greater weight. The judge also referred to that email and to the email dated 20 April 2007 in paragraph 6(b) of his judgment as two of the emails which lent support to Jaci's case. While the words "remember that do you now own [the property]" do appear in the email, they are in the context of Sunil's seeking funds and suggesting that the equity of the house might persuade Lloyds to loan some money (for the purpose of relieving his shortage of funds). As the judge pointed out in paragraph 5(e) and in paragraph 6(c) of the judgment, the statement "yes you are the owner" in the email on 21 June 2007 is immediately followed by the words "I will now start to prepare the tenancy agreement to cover all outgoings and loans so you have no profit on the rent received and the deed of trust." The judge, in my opinion, was entitled to conclude that the contemporary emails considered as a whole corroborated Sunil's account of the agreement.
 Ms Jones also placed some reliance on the fact that the property was not insured, was not up to fire standards and apparently was operating as a B&B without planning permission in breach of planning control. She submitted that this indicated that Sunil did not regard the property as his own property. In my judgment, this submission goes nowhere because it is surprising, if Jaci's account of the agreement is to be believed and she had both the legal and the beneficial interest in the property, that she made no attempt to ensure that these insurance and regulatory requirements were complied with. If she was an "owner", then she too was remarkably casual about the incidents of property ownership.
(7) Wrong Question
 In my view, this criticism of the judgment adds nothing of substance to Ms Jones' earlier submission that the judge failed to give sufficient weight to the presumption and/or reversed the burden of proof. At the risk of repetition, in a case in which it was common ground that a property was being purchased as a commercial venture and where there was no dispute that the parties had entered into an agreement as to the terms on which it was to be bought, held and used, the judge correctly focused on ascertaining what, on the balance of probabilities, were the terms of that agreement.
(8) The forged trust deed
 Ms Jones emphasised that Sunil had relied upon the forged trust deed, not merely in his attempt to re‑enter the property, but also in his pleadings in these proceedings. Indeed, he had not conceded that the trust deed had been forged by him until a very late stage prior to the trial. Ms Jones asked rhetorically, how could the judge have accepted Sunil's account of the agreement in these circumstances? She submitted that the judge must have placed some improper weight upon the forged trust deed as setting out the terms of the agreement.
 In my judgment, it is plain that the judge (a) placed no weight on the forged trust deed and (b) gave proper weight to the fact that it had been forged, when assessing the credibility of Sunil's account: see paragraph 3(f) of the judgment and the first sentence of paragraph 7 of the judgment (above).
(9) Inadequate Reasons
 One of the threads running through Ms Jones' submissions was the contention that Sunil's case as deployed before the judge departed from his case as presented in the pleadings and the amended pleadings. The implicit criticism is that the judge's reasoning should have contained an analysis of these discrepancies. In some cases, that might well have been a justified criticism, but the circumstances in the present case were somewhat unusual. There is no doubt that Sunil did depart in a number of significant respects from his pleaded case. While Jaci's pleadings had been drafted by counsel (not Ms Jones), she was represented at the trial before His Honour Judge Moloney by her husband Sudhir, Sunil's brother. Her case, as presented at the trial, also differed from her pleaded case.
 The trial was a fiercely contested family dispute, which took place over a number of days. Reading between the lines, I at least am left with the strong impression that the real dispute was between the two brothers Sunil and Sudhir, and that Jaci was caught in the crossfire. In these unhappy circumstances, the judge was right to focus on the two versions of the agreement as they emerged during the course of the proceedings. The judge's reasons for concluding that Sunil's account of the agreement was more likely are perfectly intelligible. They were (see paragraph 7 of the judgment) (i) it was corroborated by his conduct in other similar situations in which he had sought to persuade another person to hold a legal interest as a "front man" for him; (ii) it was corroborated by the contemporary emails considered as a whole; and (iii) it was inherently unlikely that such an unscrupulous and self‑interested character would do a "good deed" (my words), that is to say finding, setting up and running a business for the sole benefit of his sister‑in‑law at no charge.
 Ms Jones submitted that Sunil had obtained benefit from the arrangement, but, having heard the evidence, the judge was entitled to conclude that the supposed benefit relied upon by Jaci ‑ that is to say Sunil's ability to send his surplus B&B guests to the property at no charge ‑ was both inadequate and unconvincing. In her oral submissions, Ms Jones also argued that Sunil had received a benefit because he had been remunerated to the tune of some £19,500 from running the B&B business. The judge did not make a finding of fact to that effect, and neither the appellant's lengthy grounds of appeal (which were not drafted by Ms Jones) nor Ms Jones' skeleton argument, criticised the judge for failing to make such a finding. It follows that permission to appeal on this aspect of the case has not been granted and in these circumstances it would, in my view, not be appropriate to place any weight on this particular submission at this stage in these proceedings.
 That leaves the one issue which has caused me some concern. The judge clearly recognised that the mere existence of a common agreement or understanding was not enough. Sunil had to establish that he had relied on the oral agreement to his detriment: see paragraph 3(f) above. The judge set out the detriment upon which Sunil was relying: "the work that he put in buying, converting and running the business, and the monies that he (but not she) put into it."
 The judge dealt with the second limb of the claimed detriment in paragraph 4(d) of his judgment. Having concluded that Jaci made no net financial contribution to the purchase, improvement or running of the property before July 2008, he concluded that "It is possible that Sunil made a relatively small contribution, but the evidence is insufficient to be confident of the amount."
 That left the work that Sunil had put in buying, converting and running the business. While the judge did not deal with detriment as a separate and distinct issue in his conclusions in paragraph 7 of the judgment, the judgment must be read as a whole and in a common sense way. While an explicit reference to detriment in paragraph 7 would have been desirable, having set out in paragraph 3(e) the detriment claimed by Sunil, which included the work he put into buying, converting and running the business, the judge was not required to repeat it word‑for‑word in paragraph 7. The judge's reference to Sunil managing the letting business must be a reference back to the detriment claimed by Sunil and an implicit acceptance of at least that part of Sunil's case on detriment. It is not without significance that, having referred to the applicable legal principles in paragraph 3(e), which of course include the need for there to be detriment in reliance upon a common understanding, the judge referred again to those principles in his concluding words in paragraph 7.
 I am conscious that I have not covered each and every one of the points that were made by Ms Jones in her most able submissions, but I have sought to identify the principal grounds on which she challenged the judge's conclusion that Jaci holds the property on trust for Sunil. For the reasons set out above, I would reject those grounds of challenge and I would dismiss this appeal.
 I agree.
 I too agree.