“(3) In about 2015/2016 the Claimant wished to raise finance to fund, amongst other things, litigation in which the Claimant was involved in Cyprus. (4) On dates and places at which the 1st Defendant cannot now precisely recollect, the Claimant orally requested the 1st Defendant to assist him in raising such finance but, when it became apparent that the Claimant would not be able to raise funds in his own name, the Claimant suggested a plan (‘the Claimant’s Plan”) whereby he would transfer No 19 and No 67 by way of gift into the name of the 1st Defendant in order for the 1st Defendant to raise finance on No 19 and No 67 to give to the Claimant. (5) It is admitted that the Claimant requested the 1st Defendant to redeem the existing mortgage on No 19 as part of and pursuant to the Claimant’s Plan. (6) In order to induce the 1st Defendant to assist the claimant, the claimant assured the 1st Defendant that if anything went wrong with the Claimant’s Plan the 1st Defendant would not be adversely affected as he would own No 19 and No 67.”
“28. If the court accepts the Defendant’s version of events it follows that the Claimant will have advanced his primary claim on a wholly false basis, will have deliberately suppressed documents and will have persisted in an attempt to deceive the court throughout the trial. Further his refusal to address the real version will have deprived the court of knowing what his intentions were in entering into the arrangement. The Claimant’s intentions are plainly relevant given that the Defendant’s version involves an oral agreement that the Claimant asserts has failed and generates a trust in his favour. 29. A litigant engaging in deceptions of this scale and magnitude should result in a party forfeiting his right to be heard: see Arrow Nominees Inc v Blackledge [2000] 2 B.C.L.C. 167, CA. 30. If the court does not consider that the Claimant has forfeited his right to be heard, the court will be placed in the difficult position of considering whether the basis of an agreement has failed and/or whether a trust has been created without any evidence on the basis of the agreement from the Claimant or any evidence of the Claimant’s intention as to the creation of a trust of the Claimant.”
“Please find attached the bridging illustration.”
“However, section 2 [of LPMPA] is of relevance only to executory contracts. It has no relevance to contracts which have been completed. If parties choose to complete an oral land contract or a land contract that does not in some respect or other comply with section 2, they are at liberty to do so. Once they have done so, it becomes irrelevant that the contract they have completed may not have been in accordance with section 2.”
“… it is well established that a loan to a borrower for a specific purpose where the borrower is not free to apply the money for any other purpose gives rise to fiduciary obligations on the part of the borrower which a court of equity will enforce. … When the money is advanced, the lender acquires a right, enforceable in equity, to see that it is applied for the stated purpose, or more accurately to prevent its application for any other purpose. This prevents the borrower from obtaining any beneficial interest in the money, at least while the designated purpose is still capable of being carried out. … If for any reason the purpose cannot be carried out, … [then the entitlement to the money] depends on the intention of the parties collected from the terms of the arrangement and the circumstances of the case.”
“The borrower's interest pending the application of the money for the stated purpose or its return to the lender is minimal. He must keep the money separate; he cannot apply it except for the stated purpose; unless the terms of the loan otherwise provide he must return it to the lender if demanded; he cannot refuse to return it if the stated purpose cannot be achieved; and if he becomes bankrupt it does not vest in his trustee in bankruptcy. If there is any content to beneficial ownership at all, the lender is the beneficial owner and the borrower is not.”
“It is therefore necessary to be satisfied not merely that the money when paid was not at the free disposal of the payee but that, objectively examined, the contractual or other arrangements properly construed were intended to provide for the preservation of the payor’s rights and the control of the use of the money through the medium of a trust. Critically this involves the court being satisfied that the intention of the parties was that the monies transferred by the [payors] should not become the absolute property of [the payee] (subject only to a contractual restraint on their disposal) but should continue to belong beneficially to the [payor] unless and until the conditions attached to their release were complied with.”
“Whether the borrower is obliged to apply the money for the stated purpose or merely at liberty to do so, and whether the lender can countermand the borrower's mandate while it is still capable of being carried out, must depend on the circumstances of the particular case.”
“the lender's object in giving the mandate is frustrated, [the lender] is entitled to revoke the mandate and demand the return of money which never ceased to be his beneficially.”
“The borrower's interest pending the application of the money for the stated purpose or its return to the lender is minimal. … unless the terms of the loan otherwise provide he must return it to the lender if demanded; he cannot refuse to return it if the stated purpose cannot be achieved; and if he becomes bankrupt it does not vest in his trustee in bankruptcy. If there is any content to beneficial ownership at all, the lender is the beneficial owner and the borrower is not.”
“I suspect the position we have now reached is that the courts will always strive to work out the real intention of the purchaser and will only give effect to the presumptions of resulting trust and advancement where the intention cannot be fathomed and a “long-stop” or “default” solution is needed.”
“where A makes a voluntary payment to B … there is a presumption that A did not intend to make a gift to B: the money [or property] is held on trust for A … It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A's intention to make an outright transfer”
“the presumption of resulting trust is rebutted by evidence of any intention inconsistent with such a trust, not only by evidence of an intention to make a gift”
“In a voluntary conveyance a resulting trust for the grantor shall not be implied merely by reason that the property is not expressed to be conveyed for the use or benefit of the grantee.”
“(1) Except as provided by sections 29 and 30, the priority of an interest affecting a registered estate or charge is not affected by a disposition of the estate or charge. (2) It makes no difference for the purposes of this section whether the interest or disposition is registered.”
“(1) If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration.
“An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for— … (b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so; (c) an interest— (i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and (ii) of which the person to whom the disposition is made does not have actual knowledge at that time; …” (b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so; (c) an interest— (i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and (ii) of which the person to whom the disposition is made does not have actual knowledge at that time; …”
“A right falling within this description [i.e. the rights described in paragraph 2 of Schedule 3 to the LRA] is one of a number of rights traditionally referred to as overriding interests. … There are a number of preliminary observations to be made about such interests: (i) The equitable doctrine of notice has no part to play in the system of registration of title. In the case of unregistered land, the purchaser’s obligation depends upon what he has notice of— actual or constructive. In the case of registered land, it is the fact of occupation that matters. If there is actual occupation, and the occupier has rights, the purchaser takes subject to them. If not, he does not. No further element is material: Williams & Glyn’s Bank Ltd v Boland[1981] AC 487 , 504 (Lord Wilberforce) and Wishart v Credit and Mercantile plc[2015] 2 P & CR 15 , para 46 (Sales LJ). (ii) Paragraph 2 of Schedule 3 does not create rights. It preserves rights that already exist. If the rights of the person in actual occupation are not under the general law such as to give any priority over the holder of the registered estate, there is nothing in paragraph 2 of Schedule 3 which changes such rights into bigger and different rights: Paddington Building Society v Mendelsohn(1985) 50 P & CR 244 , 248 (Browne-Wilkinson LJ). (iii) Unregistered rights which override registered dispositions under paragraph 2 of Schedule 3 must be proprietary in character. … (iv) … (v) In addition, if there is some rule of law which prevents the occupier from having a relevant right as against the purchaser before one comes to apply the actual occupation test, that may have the effect of preventing a finding that there is an overriding interest under the statute: Credit & Mercantile Ltd, para 47 (Sales LJ)”
“(1) Subject to subsection (2), a person’s right to exercise owner’s powers in relation to a registered estate or charge is to be taken to be free from any limitation affecting the validity of a disposition. (2) Subsection (1) does not apply to a limitation— (a) reflected by an entry in the register, or (b) imposed by, or under, this Act. (3) This section has effect only for the purpose of preventing the title of a disponee being questioned (and so does not affect the lawfulness of a disposition).”
“If there were an overriding interest that interest would not affect the validity of the disposition consisting of the grant of the mortgage. The mortgage would take effect subject to it.”
“But as section 26(3) makes clear, the purpose of the section is to prevent the disponee’s [the mortgagee’s] title from being called into question. Miss Sandells submits on behalf of Mortgage Express that in effect this means that if a right is asserted as an overriding interest, and that right is a right to impugn the title acquired by the disponee, then section 26 defeats that right.”
“This, in my judgment, provides strong support for Miss Sandells’s submission that Ms Lambert is not able to call into question the title acquired by Mortgage Express.”
“If the [alleged prior constructive trust interest] has priority over the mortgage, then the mortgage, in Lewison LJ’s words, “takes effect subject to” the trust. Yet in that event the mortgage would in practice be rendered valueless; there would be no real difference between that situation and one where the mortgagee’s title was said to be invalid. Why would the former situation not amount to “questioning the title” of the Respondent?”
“52. The Brocklesby principle is not based on actual authority given to the agent, but rather on a combination of factors: actual authority given by the owner of an asset to a person authorised to deal with it in some way on his behalf; where the owner has furnished the agent with the means of holding himself out to a purchaser or lender as the owner of the asset or as having the full authority of the owner to deal with it; together with an omission by the owner to bring to the attention of a person dealing with the agent any limitation that exists as to the extent of the actual authority of the agent. This combination of factors creates a situation in which it is fair, as between the owner of the asset and the innocent purchaser or lender, that the owner should bear the risk of fraud on the part of the agent whom he has set in motion and provided (albeit unwittingly) with the means of perpetrating the fraud. The same principle applies where the dishonest vendor or mortgagor of the asset, who by the sale or mortgage raises money from an innocent third party, has been vested with the legal title as a trustee: Rimmer p 173 [Rimmer v Webster[1902] 2 Ch 163 , 173]. As Farwell J explained there: “The gist of the case is that the real owner has invested the dishonest vendor or mortgagor with all the indicia of title as absolute owner for the purpose of enabling him to deal with the property, although in a limited way only; whether the trust was to sell only, or to mortgage only, is immaterial, if the mortgagee or purchaser had no notice of the existence of any trust at all.” 53. In that case, the owner of a mortgage bond delivered it to an agent with instructions to sell it, and transferred legal title to the agent. In breach of his authority, the agent mortgaged the bond to a mortgagee who had no notice of the limits on the agent’s authority and so believed he was dealing with someone with full legal power to enter into the mortgage transaction. The agent pocketed the proceeds of the mortgage. Farwell J held that, by operation of the Brocklesby principle, the mortgagee was entitled to maintain his security interest in relation to the bond as against the owner.”
“There can be no doubt that the mere possession of deeds of title, although that possession has been lawfully acquired from the real owner of them, will not of itself validate a security given by the person to whom the possession of the deeds has been committed where there was no authority given to him to use the deeds as security. … [Y]et where that possession was coupled withan authority to use the deeds for the purpose of raising money, then the security was valid, not to the extent to which the mortgagee had given the mortgagor authority to raise money upon the deeds, but to the extent to which the mortgagor had, in fact, raised money upon them from a person who had no notice of any limitation in point of amount of the authority given.”
“It is, indeed, plain that a man may in many cases intrust another with all the indicia of ownership, including the legal title, and yet not deprive himself of his equitable rights.”
“On the other hand, it is equally well settled that if a man hands over the indicia of title to a third person, for the purpose of enabling that person to raise money, either for his own benefit … or for the benefit of the owner [citing Brocklesby] but with a limit on the amount, the lender, being ignorant of the limit, is entitled to a charge for the whole amount advanced although it exceed the limit.”
“…the particular authority proved or admitted is necessary in order to make the case one to which the principles of agency apply at all; but when that is once proved, and the owner is found to have given the vendor or borrower the means of representing himself as the beneficial owner, the case forms one of actual authority apparently equivalent to absolute ownership, and involving the right to deal with the property as owner, and any limitations on this generality must be proved to have been brought to the knowledge of the purchaser or mortgagee.”
“If that is right, it follows that George Cann was permitted by her to raise money on the security of the property without any limitation on his authority being communicated to the society. She is not, therefore, in a position to complain, as against the lender, that too much was raised …”
“Since the mother knew and intended that the mortgage was to be granted to the society and that without the mortgage the flat in which she claims a beneficial interest could not have been acquired, the only possible intention to impute to the parties is an intention that the mother’s rights were to be subject to the rights of the society. Therefore, if the land were unregistered land, in my judgment the mother’s equitable interest in the flat would have been subject to the society’s rights and would provide no defence to the society’s claim to possession.”
“One thing is clear from start to finish in this case. Money was always going to be raised on mortgage. Mrs Thompson knew and understood that and wanted it to happen. She wanted it to happen because she knew that without a mortgage she would not receive her£200,000 . She executed the assent transferring the legal title to Mrs Foy in order to enable the money to be raised by the grant of a mortgage. In those circumstances I would have held that Mrs Thompson was precluded from relying as against TMB upon any right to set aside the assent for undue influence.”
“in a case where A, the holder of the legal estate in land, has executed a mortgage of the land in favour of B, and C, who claims an interest in the land, has so conducted himself as to give B reasonable grounds for believing that C is consenting to the creation by A of a charge over the land in favour of B which will have priority to C’s interest, then C will be estopped from asserting that his interest has priority to B’s charge.”