Robert James Stokes v Sebastian James Stokes & Anor [2026] EWHC 1576 (Ch)

Case No BL-2025-LDS-000040

[2026] EWHC 1576 (Ch)

IN THE HIGH COURT OF JUSTICE

Venue BUSINESS AND PROPERTY COURTS IN LEEDS

BUSINESS LIST (ChD)

Date Date: 24 June 2026

Before: His Honour Judge Richard Carter

Between

ROBERT JAMES STOKESClaimant

(1) SEBASTIAN JAMES STOKESDefendants

(2) OLIVIA MONTGOMERY STOKESDefendant

Ms Yasmin Yasseri (instructed by Fraser Dawbarns) for Claimant

Mr Adam Griffiths (instructed by Freeths) for Defendants

Hearing Hearing dates: 9 - 12 March 2026

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.

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[1]The Claimant, Robert Stokes (Robert), brings a claim against his grandson, Sebastian Stokes (Sebastian), and Sebastian’s wife, Olivia Stokes (Olivia), for repayment of monies he says he loaned to Sebastian between 2020 and 2022. Sebastian and Olivia contend that the money was gifted to Sebastian/them by Robert. I shall refer to the parties by their first names in this Judgment as they were during the Trial.

[2]Robert is currently represented by his Litigation Friend (“LF”), Richard Stokes, one of his two sons, and Sebastian’s uncle. At a hearing on 4 March 2026, an application was made on behalf of Robert for the appointment of Richard as his LF. Although the Defendants opposed the application, I ordered that Richard be appointed as LF considering the medical evidence produced in support.

[3]In light of Robert’s medical problems, it was decided not to call him to give evidence, but to serve a hearsay notice in relation to his witness statement. In response, the Defendants issued an application for Robert to attend for cross-examination. They also sought an order that John Dungworth attend following a hearsay notice being served in relation to his evidence. Mr Dungworth, Robert’s independent financial adviser, was on holiday in the Seychelles, and his unavailability had not been provided when the Trial was listed.

[4]Following submissions, I refused to order Mr Dungworth to attend, as he would not be able to attend if ordered, and noted that I would attach such weight to his witness statement as was appropriate in the circumstances. As to Robert, I was concerned that the medical evidence addressed his capacity to litigate rather than his capacity to give evidence at trial, whether in person or remotely, and directed that further questions be put to the medical expert. Following receipt of that evidence, the Defendants conceded that Robert should not be ordered to attend and that his witness statement should be allowed under the hearsay notice.

[5]There was no evidence to suggest that Robert’s current issues were present when the claim was begun, or when he made his witness statement, so it is to be assumed that he had the capacity to litigate and recollect the evidence contained therein.

[6]As I set out below, and as was forcefully argued by Mr Griffiths for the Defendants, Robert was the key witness to the discussions and agreement reached between himself and Sebastian. Mr Griffiths submitted that his absence not only makes it difficult for the Court to determine the key issues, but that it has also prejudiced the Defendants’ case. He was unable to put Sebastian’s case directly to Robert and could only put “derivative” questions to Richard and Mr Morgan (Robert’s Tax Solicitor). He complained that the details of the “loan” were never properly evidenced or put to Sebastian. I will address my findings on those submissions below, but I accept Mr Griffiths’ point that this case has been made much more difficult by Robert's absence. However, there is no other way to deal with this dispute than to deal with the evidence before the Court, and to assess that evidence in the usual way, bearing in mind the burden of proof.

The Background

[7]Robert is 90 years old having been born on 15 February 1936. He is a successful businessman who built the family firm, Stokes Tiles, into a substantial company. He had two sons, Richard, his LF, and Tim, Sebastian’s father. He has four grandchildren, Sebastian (dob 30 September 1994), Imogen (dob 10 September 1999) – both Tim’s children – Katherine (dob 6 April 1997) and Louis (dob 11 January 1995) – both Richard’s children. Richard’s wife is Helen Stokes and Tim’s ex-wife is Sue Stokes.

[8]Robert sought to make provision for his grandchildren by gifting money into trusts that would allow them to purchase properties when needed. From 2017, Mr Morgan advised Robert and his wife, Anne, on their Wills, LPAs and inheritance tax planning. From 2020, Robert was also advised by Mr Dungworth, a regulated IFA (Independent Financial Advisor). Mr Morgan set out in his witness statement a detailed history of Robert’s estate planning: i) He first advised and drafted Wills for Robert and Anne in October/December 2017. The Wills removed Richard as a beneficiary and appointed Sebastian as an Executor. At the same time, discretionary trusts were established for both Anne and Robert to hold monies for the grandchildren and move them out of his taxable estate for IHT purposes. The Trusts were to look after each grandchild equally, and £325,000 was paid out of Robert’s estate and £214,000 out of Anne’s. ii) In October 2018, Sebastian was loaned £300,000 (£315,000) by Robert’s Trust (although the funds were lent by Robert to the Trust rather than by cashing in investments in the Trust) to purchase 169 Blair Athol Road for £315,000. On 24 October 2018 Mr Morgan emailed the conveyancing Solicitors to confirm the source of the funds and outlining the basis of the loan (interest rates, security by mortgage of £300,000 plus a second unsecured loan of £15,000). The basis for the scheme adopted is set out in Mr Morgan’s email to avoid additional SDLT and to allow CGT relief on sale. The mortgage was said to protect the Trust. iii) In May 2020, Mr Morgan was contacted by Robert and Anne about redrawing their Wills following a “falling out” with Tim. That resulted in the revocation of the LPAs and new Wills and letters of wishes. At that stage, Sebastian was appointed executor and was to receive half of Robert’s shareholding in Stokes Tiles (worth a considerable amount) with the other half to go to Louis if he worked for the company, or Imogen if not. As Sebastian had had his £300,000 loan, there was provision for the other 3 grandchildren to receive £300,000 and for Richard to receive £300,000 plus the “land at Ringinglow”. Tim was written out of the Will. iv) By this time, Sebastian had given up his job at Barclays Bank and had started to work for Stokes Tiles (from September 2019). He was employed in a sales role but would attend some Board meetings and it was Robert’s intention:

“to immerse him in business decisions so that he could take forward the business in the future. It saddens me to now state that Anne and I would refer to him as "the future" and we would also introduce him to friends as the "ﬁfth generation" of Stokes Tiles””. v) In August 2020, Mr Morgan was instructed by Robert that he and Anne had told Sebastian that he no longer needed to make the interest payments on the £300,000 loan. However, before being able to action it, Anne passed away unexpectedly on 2 September 2020. Mr Morgan had a meeting with Robert shortly after (and met Sebastian for the first time). The steps necessary to deal with Anne’s estate and the means of passing the £300,000 for Richard, Imogen, Louis and Katherine were discussed. Robert wanted Sebastian to inherit all his shares in Stokes Tiles “… now that he has joined the company and committed his future to the company.”

Anne’s pension fund was to be divided among the four grandchildren in equal shares. vi) In March 2021, a new Will and Letter of Wishes was drawn up. There were discussions about extending Robert’s property to allow Sebastian, Olivia and their family to move in to provide support for Robert. The Letter of Wishes provided for Robert’s shareholding in Stokes Tiles to go to Sebastian in full “I am aware this will make Sebastian the wealthiest member of the family, but he has given up his career in banking to go into the family company, and a ship can only have one captain.” In addition, Sebastian was to inherit Robert’s Bungalow, the land at Ringinglow was to go to Imogen and not Richard, and the residual estate was to be split between Richard, Sebastian, Louis, Katherine and Imogen – the £300,000 for Louis, Katherine and Imogen was to be provided by the Trusts in addition. vii) In April 2021, Mr Dungworth became fully involved. There were discussions about utilising Foresight EIS (Enterprise Investment Scheme) – a scheme which would allow assets to come out of Robert’s estate in just 2 years as opposed to 7 for potentially exempt transfers (PETs). The gifting of £300,000 to Imogen was also being planned – Sebastian’s £300,000 loan having been written off (although the agreement was not executed until 9 August 2021). There was also mention of £75,000 having been loaned to Sebastian to invest in a property project with a friend. This is again referred to in a letter of 13 May 2021.

[9]During the period from September 2019 to September 2020, Robert’s evidence is that Sebastian was working for Stokes Tiles and the relationship with Robert and Anne was very good. As noted above, Anne passed away on 2 September 2020, leaving Robert bereft. In his statement, he said:

“I felt completely lost, anxious about the amount of administration there was to do and generally found it very difﬁcult. Anne and I were together for over 60 years, and it was hard to cope without her. I had to quickly learn to deal with things I had not had to deal with before in addition to dealing with the grief of losing Anne. This included things like cooking, paying bills and general household tasks. I felt like I had been plunged into the deep end of having to learn new things on my own.”

[10]There were then discussions about Sebastian moving in with Robert – initially selling the Bungalow and Blair Athol and buying a new property, but despite Sebastian identifying one, Robert was not happy with it. There were then discussions about extending the Bungalow, and Sebastian commissioned a company called Five Seventy-Three Ltd to draw up some plans. Robert mentions in his witness statement concerns about the lack of involvement of Olivia and suggests that Sebastian was deliberately keeping her out of the discussions.

[11]In May 2021, Sebastian had identified a new, larger family home for him and his family, Fernleigh Mount, 116 Totley Brook Road (“Fernleigh Mount”). Robert states that Sebastian told him he could get it at a substantial discount (about £200,000 off the £985,000 price). Robert states that Sebastian told him that if they could buy it, then they could sell it in 2022 for a substantial profit, which could then be used to pay for the redevelopment of the Bungalow (“flipping”).

[12]Sebastian’s case is that he was aware that Robert was going to put some £700,000 into the EIS and asked him whether he would instead give him the money to purchase a “suitable home”. He says that Robert agreed and “just said yes”. He transferred £700,000 (actually £718,483.32) directly to the conveyancing solicitors. The deposit was paid by Robert from his Director’s Loan Account at the Company to Sebastian, who then transferred it to the Solicitors. A further £295,000 was then transferred from the Company to cover the anticipated money from the sale of Blair Athol.

[13]The sale was completed on 13 August 2021. Prior to that, the conveyancing Solicitor (Jessica Gamble) attended Robert at the Bungalow. Various documents were signed by Robert, including a declaration of gift (“the Declaration”). Ms Gamble was not called to give evidence, but the documents are contained in the Bundle. Robert’s version is that Sebastian had not told him Ms Gamble was coming, nor was she introduced. He says he was presented with a one-page document and was asked to sign it. He believed it was just confirmation that he was the source of funds. A copy of the attendance note is included in the bundle.

[14]Sebastian and Olivia’s second child, Posie, was born on 9 September 2021. Robert certainly went to Fernleigh Mount, as there is a photograph of him with Posie - though he says that he was not told about completion of the purchase and was not invited for Christmas or New Year as he had expected. A meeting was held on 21 September 2021 between Robert, Sebastian, Mr Morgan and Mr Dungworth – a manuscript note has been produced by Mr Dungworth with which I deal below.

[15]In 2022, Sebastian and Olivia were married. Sebastian’s case is that Robert offered to and did make several payments to the venue as well as other sums towards the wedding. Robert does not address this in his evidence (indeed the word “wedding” is not mentioned at all) although the claim includes sums that appear to relate to it, and which are implicitly wedding payments from the titles in the payment schedule in the Particulars of Claim (and were loans to both Sebastian and Olivia).

[16]In August/September 2022 Robert asked Sebastian to place Fernleigh Mount on the market. He contends that Sebastian promised that he would but failed to do so. In November 2022 it appears that Richard and Helen provided Robert with details from Social Media of work to Fernleigh Mount which Olivia was posting. Thereafter Richard became involved in the attempts to make Sebastian sell Fernleigh Mount.

[17]In December 2022 Helen prepared a Loan Agreement (having recalled advice from a Judge Rinder television programme) which was signed on 19 December 2022 (“the Written Agreement”). The Agreement read as follows: “This Agreement is confirmation that money totalling £864,000.00 was temporarily loaned to Sebastian James Stokes for purchase of Fernleigh Mount, 116, Totley Brook Road, Totley, Sheffield, S17 3QU in 2021. The loan was made in good faith and only intended for a short period of time. The debt is due to be repaid in full. The property is now marketed for sale by Blenheim Estates, Sheffield. It is agreed that on completion of the sale, the total loan amount of £864,000 will immediately be repaid back to Robert James Stokes by Sebastian James Stokes. It is noted that the Land Registry is in the joint names of Sebastian James Stokes and Olivia Mary Montgomery Stokes. Therefore, both parties agree that the loan will be repaid in full on completion of the sale of the property".

[18]This claim was issued on 14 December 2023 and on 8 February 2024 Robert obtained an interim freezing order over Fernleigh Mount. On 1 March 2024 that order was continued through to Trial.

List of Issues

[19]A list of issues was prepared for the PTR on 18 December 2025, with disputes tracked. Ms Yasseri has provided a clearer version, which I have adopted for the purposes of preparing this judgment. I do not consider that the List of Issues prepared for the PTR/Trial would be any more useful: i) Did Robert make payments to Sebastian in the total sum of £864,722.00 as set out at paragraph 5 of the Re-amended Particulars of Claim? ii) Were the Sums paid by Robert to Sebastian by way of loan or gift? a) What were the terms of the Loan? b) Consider the Declaration i) Is the signature that of Robert? ii) If so, is the document nonetheless a sham? iii) Is the document voidable by reason of non est factum? iv) Is the document voidable by reason of misrepresentation? v) Is the document voidable by reason of actual undue influence? vi) Is the document voidable by reason of presumed undue influence? c) Consider the Written Agreement i) Is the signature that of Olivia? ii) If not, is Olivia nonetheless bound by reason of estoppel, assent or retrospective authority? iii) Is Sebastian’s signature voidable by reason of duress? d) Consider the contemporaneous communications passing between the parties and witnesses: Have the Defendants acknowledged the Loan? iii) If gifts – that is the end of the enquiry. iv) If loans – continue – v) What is the effect of the Written Agreement? a) Is it a contract? b) Is it an express trust? c) Is it evidence of a common intention constructive trust? d) Is it an equitable charge? vi) What remedy is Robert entitled to?

[20]A further issue that became apparent during the Trial concerned the total amount said to have been loaned to Sebastian. A Schedule was included in the Bundle at C1229, totalling £864,722, which differs from the Schedule contained in the Particulars of Claim at A64. It appears that two payments have been omitted (28.10.21 £13,500 and 28.10.21 £1,000). Redacted Bank Statements from Robert’s Halifax account have been provided, showing all but one of the payments (22.08.21 to Grantley Hall) and including 2 further payments (22.3.21 for Flowers £1,000 and 24.8.21 to Susan £5,000).

Witnesses

[21]As noted above, I did not hear from Robert. His witness statement was tendered as hearsay, and I was invited to attach such weight to it as I considered appropriate. Section 4 of the Civil Evidence Act 1995 sets out a non-exhaustive list of relevant considerations, including: Whether it would have been reasonable and practicable to have produced the maker of the original statement. Whether the original statement was made contemporaneously with the occurrence or existence of the matters stated. Whether multiple hearsay is involved. Whether any person involved had any motive to conceal or misrepresent matters. Whether the original statement was an edited account, or made in collaboration with another, or for a particular purpose. Whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight.

[22]That guidance provides little assistance where the hearsay evidence being adduced is the sworn written testimony of a claimant no longer capable of giving evidence or being cross-examined. In my judgment, the factors to be considered are: i) The witness statement, which had a statement of truth signed by Robert on 28 February 2025 and accompanied by a statement of compliance signed by Robert dated 28 February 2025 and one signed by Mr Shuardson-Hipkin, Senior Associate Solicitor, dated 4 March 2025, can be assumed to have been made at a time when Robert was competent. There is nothing in the medical evidence filed in support of the appointment of a Litigation Friend that would suggest Robert was not competent in early 2025. ii) The Particulars of Claim (the original and the two amended versions) were all signed by Mr Shuardson-Hipkin on Robert’s instructions, and it can be assumed that he did not have concerns about Robert’s capacity at those times. iii) To the extent to which Robert’s evidence is supported by contemporaneous notes provided by Mr Morgan and Mr Dungworth, there is a limit to what could have been achieved by Mr Griffiths in cross-examination in challenging them. iv) However, Robert’s evidence about the discussion referred to at §4 of the Particulars of Claim and further detailed in his witness statement at §31 would have been the subject of extensive cross-examination, and that opportunity was lost. Without further evidence on such a critical element of the Claimant’s primary case, that lacuna cannot be ignored. There is no suggestion that Robert was unable to provide further evidence at any point prior to his legal advisors deciding that he no longer had competence, and of course, a Reply was prepared on his behalf in response to the pleadings. v) That lack of detail in Robert’s witness statement on the terms of the loan cannot simply be filled by the evidence of other witnesses. The Claimant brings the claim, and he must prove the claim (on the balance of probabilities) – where there is an absence of key evidence from the Claimant (Robert), it would be wrong to imply it into his evidence from others when he cannot be questioned about it. vi) It is also relevant that, from the close of pleadings, it was clear that no steps were taken to flesh out the key evidence of the discussions. That must be assumed to have been a deliberate decision of Robert and his legal advisors.

[23]The second witness, Mr Dungworth, who had provided a witness statement and was unable to attend, presents a different problem. He has no good reason for not attending (his holiday was not included in the availability for trial), and it cannot be said that it was not reasonable or practicable for him to attend (absent his holiday). His evidence was relied on to prove a handwritten document he prepared from a meeting on 21 September 2021, which I deal with below, and perhaps more importantly, however, the evidence he gave at §13 of his witness statement, where he said as follows:

“On the 2 August 2021, Robert telephoned me to apologise but he didn't want to proceed with the Foresight Scheme at this time as he had been in discussions with Sebastian who had found a property in nearby Totley that was struggling to sell ("Fernleigh Mount"). He explained to me that Sebastian had managed to agree a discounted price. The plan was for Robert to buy it and then sell it at a proﬁt in 2022 which he could use towards moving in with Sebastian as previously discussed and agreed. Robert thought this was good idea given the discount Sebastian had negotiated and it would help with any future development. He also conﬁrmed during the phone call on 2 August 2021 that he would revert to me in 2022 to reinstate the Foresight Scheme given the tax advantages and the investment could be more than £700000.”

[24]That meeting was referred to in a letter from Mr Dungworth to Robert’s Solicitor on 11 December 2023 where he said that:

“2nd August 2021, Bob telephoned me quite apologetically to conﬁrm that he didn't wish to proceed with the €700,000 as he had been in discussions with Seb who had found a property in Totley, Shefﬁeld and could buy it at a substantial discount and then to sell it in 2022 for a proﬁt which he can then put towards moving in with his grandfather as it was always the intention to develop his grandfather's house. Bob conﬁrmed he would use the £700,000 from the Foresight Scheme and to loan it to Seb on a short term basis as he thought this was a good investment given the discount that Seb was able to negotiate. Furthermore, he conﬁrmed he will reinvest the proceeds, if not more, taking into account any proﬁt when the loan was repaid on the property sale.”

[25]No contemporaneous note has been disclosed for this meeting in which Mr Dungworth’s version of the meeting was set out – and no explanation was provided for the difference in the two descriptions – in particular, the explicit reference to a “loan”. Further, the correspondence from 2 August 2021 (1424 onwards) between Mr Morgan, Mr Dungworth, Robert, and Sebastian makes no mention of the £700,000 loan. The only record is the handwritten note from September 2021.

[26]I should also note that despite the certificates of compliance to his witness statement (and I accept no point was taken by Mr Griffiths), it contains several comments about the case – for instance at §16 he said:

“As I have stated if was to be a gift James Morgan would have been involved more and I suggest may have like I would have advised against it. Sebastian's position just doesn't make sense to me. It was for this reason that I am happy to support Robert as a witness…”

[27]I do not attach any weight to Mr Dungworth’s evidence beyond the documentation he refers to. In the absence of cross-examination about the source of his recollection of the 2 August 2021 meeting, it would be wrong to attach any weight to his (seeming) key evidence about his discussions with Robert. That is further supported by the inconsistencies I refer to at §88.xiii) below.

[28]I heard from 3 witnesses for Robert: Mr Morgan, Richard and Helen. Mr Morgan was a professional witness who gave his evidence clearly and in a measured manner. He was prepared to make concessions where necessary and to accept, for instance, that Robert made gifts of which he was unaware or loans from the company. He had prepared letters instead of file notes and used them to make a contemporaneous (or nearly so) record of meetings. He was, in general, a reliable witness. However, and again despite the certificate of compliance, his witness statement included some intemperate comments about Sebastian after being contacted by Richard and Helen:

“33. I was then asked to come up to Sheffield urgently on 134 February 2023 to meet Robert and his son Richard and his daughter-in-law (Richard's wife) Helen. It was one of the saddest meetings of my 30 odd year career. I was shocked to discover that the First Defendant had been abusing his position of trust and conﬁdence with Robert over the last couple of years, since Anne died in September 2020, and that he had been living a luxurious lifestyle he could not sustain and apparently borrowing money from less than scrupulous people as well as his grandfather and there was now a risk that the large amount of money that Robert had lent him was at risk. I was shown at the meeting a document that Richard and Helen had drawn up and asked the First Defendant to sign that conﬁrmed his total borrowings from Robert were a staggering £864,000 not the c.£700,000 I had previously believed them to be.”

[29]Later, there are comments such as “This, I would suggest, is an example of the First Defendant's penchant for misstating the facts.” §36 and then at §40:

“40. I was then subsequently shocked to be told by Fraser Dawbarns and Robert (for whom I continue to act in non-contentious matters) that the First Defendant and the Second Defendant had alleged that the large transfer in August 2021 (and further loans before and since that time) were gifts not loans. I am 100% certain that this is not true; I am very disappointed in the abuse of the position of trust the First Defendant had gained with Robert by the First Defendant. I am aware that the only write off of a loan between the parties to this case ever is the one on 9th August 2022 re the initial £300,000 advanced from the 2017 Robert Stokes Trust by secured charge. I think it worth repeating that it would be wholly uncharacteristic of Robert to depart so radically from a plan long in gestation to treat all his grandchildren equally save and except for the brief period in 2021-22 when Sebastian was favored above the others in the Will of Robert vis a vis his shares in the family company (and potentially moving in together) and that 'favouring' was only to take effect at death and was essentially dependent on (a) the plan to move in together happening (which it never did) and (b) Sebastian remaining the family member involved in the company (which is also now not the case). I do also have credible reasons to suspect monies withdrawn from the Halifax account of Robert by the First Defendant were also not gifts or loans and I have advised this ought to be reported to the police, but it hitherto has not been to my knowledge. I have formed the opinion in the recent months since January 2023 that the First Defendant is not a person afraid of untruthfulness if he thinks it will benefit him.”

[30]Richard and Helen both were portrayed by Mr Griffiths as being vindictive towards Sebastian and jealous that he had been Robert’s favourite. They accepted that they had not been involved with Robert in 2019/the early 2020s when Sebastian was being groomed as the next generation of Stokes Tiles. Although they accepted that they were not involved at the time of the primary loan, their explanations for their involvement after seeing Olivia’s social media posts were unconvincing. Indeed, Helen’s evidence about how she found about Fernleigh Mount was clearly disingenuous as was her explanation for the Written agreement (a recollection of a television programme). They both appeared to believe that Sebastian had been taking money from Robert’s accounts and he taken advantage of him despite there being no claim or evidence to support that allegation. I am satisfied that their views of both Sebastian and Olivia were coloured by this perception and that informed their actions from September 2021 onwards.

[31]Of particular concern is the preparation of the schedule of monies loaned. Helen said that Robert had provided her with a verbal figure of £856,000 but she was then provided with the Bank Statements from which the current figure was then calculated. Robert’s evidence was that “…I checked the amounts that had been loaned and gave the final figure to Helen”. No mention is made of a different figure or Helen going through the bank statements. Further in cross-examination Helen was keen to suggest (as Robert’s evidence also does) that she and Richard believed that Sebastian had been transferring money using his control of the online banking. I found her evidence about the other loans weak.

[32]It was also clear from some of the evidence given by Richard and Helen that they took particular issue with Sebastian and Olivia’s lifestyle. For instance, Helen said in answer to a question from Mr Griffiths “I think it’s very sad that it’s so important for them to live such a lavish lifestyle at Bob's expense”. She said in her witness statement that:

“Around the time of the wedding, we began to realise that something was not right. First, we discovered that the Defendant was living in a £1.3m house; then we attend their wedding, which was clearly a very expensive affair. This was not the lifestyle of somebody who earned around £40,000 working for the family business and whose wife did not work.” and “I also noticed that the Defendants had purchased a brand-new Porsche Macan with a private registration plate POS 111E. This again made Richard and I question where all the money had come from.”

[33]I found both Richard and Helen to be motivated in their involvement with the dispute with Sebastian as much by their view of him and Olivia as by their concerns about Robert. That was supported by the approach taken by Richard when Fernleigh Mount was on the market and as can be seen in the Whatsapp messages. That does not mean of course that their view of Sebastian was necessarily wrong.

[34]Olivia described Sebastian in a Whatsapp in June 2023 as “a people pleaser and he hates to think he’s let anyone he’s down, so he’ll tell the white lie and he’ll bury his head in the sand and just hope that everything just works.” That is an accurate description of him. He came across as being unwilling to challenge people or to tell people (Olivia, for instance) things they would not want to hear. However, he did not strike me as someone seeking to mislead or who would have acted dishonestly toward Robert. His anger over his treatment is directed not at Robert but at Richard and Helen, whom he believes are behind these proceedings. He clearly was telling Robert one thing and Olivia another about the proposal to move into the bungalow, but he and Olivia both treated Fernleigh Mount as their home and were spending a considerable amount (of Robert’s money) on improvements to their (or Olivia’s) tastes. That supports my assessment of Sebastian as someone who sought to please everyone, even when his positions were irreconcilable.

[35]Olivia was clearly upset with how she feels she and Sebastian have been treated by Robert, as guided (in her view) by Richard and Helen. That feeling has been exacerbated by the impact on her family and children. She, unsurprisingly, therefore approached this case as personal with Richard and Helen, and her evidence was coloured by that. Nevertheless, I do not consider that she sought to mislead or that her evidence cannot be relied on.

Law

[36]As set out in the List of Issues, there are several different bases on which Robert’s claim has been advanced. I shall set out the law on each issue in turn.

Sham – The Declaration

[37]Ms Yasseri deals with this allegation in her Skeleton at §25 and refers to the Reply at §19: The Declaration does not reflect the parties' actual and/or pleaded intentions in or around August 2021 as regards the financing of the purchase of the Property and is a sham with no legal effect.

[38]No authority is referred to in support of the pleading that the Declaration is a “sham”. In Snook v London and West Riding Investments Ltd

[1967] 2 QB 786

, Lord Diplock held: “As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a " sham," it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the " sham" which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co. v. Maclure 15 and Stoneleigh Finance Ltd. v. Phillips), " that for acts or documents to be a " sham," with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a " shammer " affect the rights of a party whom he deceived. There is an express finding in this case that the defendants were not parties to the alleged " sham."

Non est factum – The Declaration

[39]Non est factum is a species of mistake which can be relied upon to make a document void. It applies where a party has been misled into signing a document essentially different from that which they intended to sign – see Saunders v Anglia Building Society

[1971] AC 1004

: Per Lord Reid: “The matter generally arises where an innocent third party has relied on a signed document in ignorance of the circumstances in which it was signed, and where he will suffer loss if the maker of the document is allowed to have it declared a nullity. So there must be a heavy burden of proof on the person who seeks to invoke this remedy. He must prove all the circumstances necessary to justify its being granted to him, and that necessarily involves his proving that he took all reasonable precautions in the circumstances. I do not say that the remedy can never be available to a man of full capacity. But that could only be in very exceptional circumstances: certainly not where his reason for not scrutinising the document before signing it was that he was too busy or too lazy. In general I do not think he can be heard to say that he signed in reliance on someone he trusted. But, particularly when he was led to believe that the document which he signed was not one which affected his legal rights, there may be cases where this plea can properly be applied in favour of man of full capacity. The plea cannot be available to anyone who was content to sign without taking the trouble to try to find out at least the general effect of the document. Many people do frequently sign documents put before them for signature by their solicitor or other trusted advisers without making any inquiry as to their purpose or effect. But the essence of the plea non est factum is that the person signing believed that the document he signed had one character or one effect whereas in fact its character or effect was quite different. He could not have such a belief unless he had taken steps or been given information which gave him some grounds for his belief. amount of information he must have and the sufficiency of the particularity of his belief must depend on the circumstances of each case.

[40]Chitty on Contracts (36th Edition) at 5-048 sets out the key elements for a successful plea as summarised as follows:(a) the belief of the signer that the person is signing a document of one character or effect whereas its character and effect were quite different;

(b) the need for some sort of disability which gives rise to that state of mind;

(c) the plea cannot be invoked by someone who does not take the trouble to find out at least the general effect of the document.

[41]Mr Griffiths, in his skeleton, referred to the decision of Lord Pearson in Saunders at 1032 where he said (following the conclusion of Denning MR in the Court of Appeal):

"… whenever a man of full age and understanding, who can read and write, signs a legal document which is put before him for signature - by which I mean a document which, it is apparent on the face of it, is intended to have legal consequences - then, if he does not take the trouble to read it, but signs it as it is, relying on the word of another as to its character or contents or effect, he cannot be heard to say that it is not his document. By his conduct in signing it he has represented, to all those into whose hands it may come, that it is his document; and once they act upon it as being his document, he cannot go back on it, and say it was a nullity from the beginning." "… Mrs. Gallie cannot in this case say that the deed of assignment was not her deed. She signed it without reading it, relying on the assurance of Lee that it was a deed of gift to Wally. It turned out to be a deed of assignment to Lee. But it was obviously a legal document. She signed it: and the building society advanced money on the faith of it being her document. She cannot now be allowed to disavow her signature."

Misrepresentation – The Declaration

[42]Ms Yasseri, in her skeleton, referred to SK Shipping Europe PLC v Capital VLCC 3 Corp & Anor

[2020] EWHC 3448

Comm and Chitty at §10-006. She identified the requirements as being:a. He must have entered into the contract after a statement of law or fact on which it was reasonable for him to have relied upon;

b. The statement must have been at least substantially untrue;

c. The statement must have induced him to enter into the contract.

[43]In SK Shipping at §112 the Judge set out the law on actionable misrepresentation as follows: 112. The general principles of the law relating to actionable misrepresentation were not substantially in dispute. I have gratefully adopted the following summary of the law from the judgment of Jacobs J in Vald Nielsen Holding A/S v Baldorino

[2019] EWHC 1926 (Comm)

, [131-157], which draws on earlier authority, and which I have supplemented by the further authority cited to me by the parties. 113. First, the defendant must establish that a representation was made:(i) A representation is a statement of fact made by the representor to the representee on which the representee is intended and entitled to rely as a positive assertion that the fact is true.

(ii) Determining whether any and if so what representation was made by a statement involves (1) construing the statement in the context in which it was made, and (2) interpreting the statement objectively according to the impact it might be expected to have on a reasonable representee in the position and with the known characteristics of those to whom the representation is being made.

(iii) A statement of opinion is not in itself actionable but is invariably regarded as incorporating an assertion that the maker does actually hold that opinion. Further, at least where the facts are not equally well known to both sides, a statement of opinion by one who knows the facts best may carry with it a further implication of fact, namely that the representor by expressing that opinion impliedly states that he believes that facts exist which reasonably justify it.

(iv) Silence by itself cannot found a claim in misrepresentation. But an express statement may implicitly represent something. In relation to implied representations, the ‘court has to consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context’ (Toulson J in IFE v Goldman Sachs

[2006] EWHC 2887 (Comm)

; [2006] 2 CLC 1043, [50]). That involves considering whether a reasonable representee in the position and with the known characteristics of the actual representee would reasonably have understood that an implied representation was being made and being made substantially in the terms or to the effect alleged.

(v) In a deceit case, it is also necessary that the representor should understand that he is making the implied representation and that it had the misleading sense alleged. A person cannot make a fraudulent statement unless he is aware that he is making that statement. To establish liability in deceit, it is necessary ‘to show that the representor intended his statement to be understood by the representee in the sense in which it was false’ (Morritt LJ in Goose v Wilson Sandford & Co [2001] Ll Rep PN 189, [41]). 114. Second, the representation must be false. A representation may be true without being entirely correct, provided that it is substantially correct and the difference between what is represented and what is actually correct would not have been likely to induce a reasonable person in the position of the claimant to enter into the contracts: Rix J in Avon Insurance plc v Swire Fraser Ltd [2000] CLC 665, [17]. 115. Third, for the statement to have been made fraudulently: (i) One of the two mental states established in Derry v Peek

(1889) 14 App Cas 337

must be established: the statement must have been made knowing it is untrue, or recklessly, not caring whether it is true or not. (ii) The requirements for proving that a misrepresentation was made fraudulently must not be watered down into something akin to negligence, however gross. However, the unreasonableness of the grounds of the belief, though not of itself supporting an action for deceit, will be evidence from which fraud may be inferred. (iii) Actionable fraud involves an intention on the part of the representor to induce the representee to act as he did. It is not necessary for the representor to intend to induce the specific action taken by the representee in reliance on the misrepresentation. It is only necessary that there should be an intention that the representation should be acted on. (iv) The standard of proof in a case of fraud is the balance of probabilities. 116. Fourth, the representee must show that he in fact understood the statement in the sense (so far as material) which the court ascribes to it, and that, having that understanding, he relied on it. The general principles applicable where a misrepresentation is said to have induced the making of a contract are set out in Chitty on Contracts (33rd edn) paras. 7-036 to 7-042. In this regard, it is important to keep two distinctions well in mind: the distinction between fraudulent and nonfraudulent misrepresentations; and the distinction between what the misrepresentee must establish in order to be in a position to rescind a contract for a pre-contractual misrepresentation and what must be shown in order to be able to recover damages for loss suffered as a result of entering into a contract. 117. The principles are as follows: (i) For rescission, it is not necessary that the misrepresentation should be the sole cause which induced the representee to make the contract. It is sufficient if it can be shown to have been one of the inducing causes. (ii) However, where a party has entered a contract after a misrepresentation has been made to it other than fraudulently, it will not have a remedy unless it would not have entered the contract (or not on the same terms) but for the misrepresentation. (iii) In cases of fraud, however, if the representee seeks to rescind, it is no defence for the representor to show that if the misrepresentation had not been made, the misrepresentee might still have made the contract. It is sufficient if there is evidence to show that he was materially influenced by the misrepresentation in the sense that it had some impact on his thinking, or as it is sometimes put, ‘was actively present to his mind’: BV Nederlandse Industrie van Eiprodukten v Rembrandt Enterprises Inc

[2020] QB 551

, [32], [44-45]. (iv) Once it is proved that a false statement was made which is ‘material’ in the sense that it was likely to induce the contract, and that the representee entered the contract, it is a fair inference of fact (though not an inference of law) that he was induced by the statement. (v) The inference is particularly strong where the misrepresentation is fraudulent. In BV Nederlandse Industrie van Eiprodukten v Rembrandt Enterprises Inc, [43] the Court of Appeal held that in deceit cases ‘there is an evidential presumption of fact (not law) that a representee will have been induced by a fraudulent misrepresentation intended to cause him to enter the contract and that the inference will be “very difficult to rebut” ...’

(vi) It is sometimes said that a misrepresentation will not be effective to ground relief in law unless it was material, in the sense that a reasonable person would have been influenced by it in deciding whether to enter into the contract, although there is no clear authority denying relief to a representee who has in fact been influenced by a misrepresentation which would not have influenced a reasonable person. In cases of fraud, the representor is not permitted to argue that it was unforeseeable that the representee would be influenced by the lie.

(vii) When a claimant seeks damages, whether for negligent or fraudulent misrepresentation, for loss which it alleges it has suffered by entering into a contract on particular terms as a result of that misrepresentation, the court must find that it would not have entered into the contract on those terms but for the misrepresentation: Chitty on Contracts (33rd edn) paras. 7-039, 7-040 and 7-055. To this extent, in fraud cases there is a difference between what must be shown in order to obtain rescission of a contract, and what must be shown to recover damages.

Actual/Presumed Undue Influence - Declaration

[44]Ms Yasseri referred to Snell on Equity, 35th Edition at §8-018, Chitty at §11-097 and Etridge

[2002] 2 AC 773

. She summarised actual undue influence (UI) as being a case where a party can discharge the burden of showing that a transaction was entered into because of UI without needing to rely on the evidential presumption that arises in presumed UI. There are two strands of actual UI: i) Cases where there is an improper threat or inducement; and ii) Cases where the nature of the relationship between the parties is such as to impose on the stronger a “duty to behave to the vulnerable party with candour and fairness”.

[45]She noted that the Court must take account of all the circumstances of the case including “the nature of the alleged undue influence, the personality of the parties, their relationship, [and] the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship”.

[46]As to presumed UI she defines it as a case where a party can discharge the burden of showing that a transaction was entered into because of UI with the assistance of an evidential presumption of UI. Two facts must be shown:a. A relationship of influence between the claimant and the party exerting the claimed influence; and

b. The impugned transaction is one that calls for an explanation.

[47]Mr Griffiths pointed to Royal Bank of Scotland PLC v Etridge

[2001] UKHL 44

and the relationships within which presumed UI can arise. 18 The evidential presumption discussed above is to be distinguished sharply from a different form of presumption which arises in some cases. The law has adopted a sternly protective attitude towards certain types of relationship in which one party acquires influence over another who is vulnerable and dependent and where, moreover, substantial gifts by the influenced or vulnerable person are not normally to be expected. Examples of relationships within this special class are parent and child, guardian and ward, trustee and beneficiary, solicitor and client, and medical adviser and patient. In these cases, the law presumes, irrebuttably, that one party had influence over the other. The complainant need not prove he actually reposed trust and confidence in the other party. It is sufficient for him to prove the existence of the type of relationship.

[48]He appeared to accept the test for actual UI contained within Etridge: 13. Whether a transaction was brought about by the exercise of undue influence is a question of fact. Here, as elsewhere, the general principle is that he who asserts a wrong has been committed must prove it. The burden of proving an allegation of undue influence rests upon the person who claims to have been wronged. This is the general rule. The evidence required to discharge the burden of proof depends on the nature of the alleged undue influence, the personality of the parties, their relationship, the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship, and all the circumstances of the case. 14 Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of a satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties' relationship. He preferred his own interests. He did not behave fairly to the other. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn.

Forgery, Estoppel, Assent and/or Retrospective Authority – the Written Agreement

[49]Ms Yasseri at §54 of her Skeleton submits that the Court can infer that Sebastian signed Olivia’s name on the Written Agreement (the expert evidence concluding in the joint report that “they are both in agreement that there is nothing to indicate that Olivia Montgomery Stokes signed the Loan Agreement dated 19 December 2022 using her normal signature style.”).

[50]However, by her actions Olivia expressly or impliedly represented that she had signed it by her message on 20 December 2022, that she assented to the agreement by that message or that she gave Sebastian retrospective authority to sign it on her behalf. She referred to Bowstead & Reynolds 23rd Edition at §2.047: Where an act is done purportedly in the name or on behalf of another by a person who has no actual authority to do that act, the person in whose name or on whose behalf the act is done may, if the third party had believed the act to be authorised, by ratifying the act, make it as valid and effectual, subject to the provisions of Articles 14 to 20, as if it had been originally done by his authority, whether the person doing the act was an agent exceeding his authority, or was a person having no authority to act for him at all.

[51]The note to that paragraph refers to Firth v Staines

[1897] 2 QB 70

which held that: “To constitute a valid ratification three conditions must be satisfied: first, the agent whose act is sought to be ratified must have purported to act for the principal; secondly, at the time the act was done the agent must have had a competent principal; and, thirdly, at the time of the ratification the principal must be legally capable of doing the act himself.

[52]As discussed below, the relevant part of the test is that the agent must have purported to act for the principal – i.e. the principle covers situations where the person signing (for instance) an agreement must have been doing so on behalf of the principal – if he or she was, then even if they did not have authority to do so, then the principal can ratify that signature.

[53]Ms Yasseri also relied on a plea of estoppel – i.e. that Olivia is estopped from denying that the Written Agreement binds her because the Written Agreement gave Robert comfort that Fernleigh would be sold and the loan repaid, and it would therefore be unjust or unconscionable for Olivia to resile from it. She referred to two cases: Kelly v Fraser

[2013] 1 AC 450

at § 17 and Guest v Guest

[2022] UKSC 27

at §61, 71 and 138.

[54]§17 of Kelly v Fraser per Lord Sumption states: 17 The relevance of detrimental reliance in the law of estoppel by representation is that it is generally what makes it unjust for the representor to resile from his previously stated position. However, for this purpose, the ordinary rule is that the detriment is not the measure of the representee’s relief, and need not be commensurate with the loss that he would suffer if the representor did resile: see Avon County Council v Howlett

[1983] 1 WLR 605

, 620—625, where the authorities are reviewed by Slade LJ. Indeed, the detriment need not be financially quantifiable, let alone quantified, provided that it is substantial, and such as to make it unjust for the representor to resile. A common form of detriment, possibly the commonest of all, is that because of his reliance on the representation, the representee has lost an opportunity to protect his interests by taking some alternative course of action. It is well established that the loss of such an opportunity may be a sufficient detriment if there were alternative courses available which offered a real prospect of benefit, notwithstanding that the prospect was contingent and uncertain: Greenwood v Martins Bank Ltd

[1933] AC 51

and Ogilvie v West Australian Mortgage and Agency Corpn Ltd

[1896] AC 257

, 268, as explained in Fung Kai Sun v Chan Fui Hing

[1951] AC 489

, 505—506.

[55]Guest v Guest held as follows: 61 Drawing together this lengthy review of the authorities and looking at the matter historically, I suggest that what has happened may be summarised in this way. For over a century, starting in the 1860s, the courts of equity developed an equitable estoppel-based remedy, the aim of which was to prevent the unconscionable repudiation of promises or assurances about property (usually land) upon which the promisee had relied to his detriment. The normal and natural remedy was to hold the promisor to his promise, because that was the simplest way to prevent the unconscionability inherent in repudiating it, but it was always discretionary, and liable to be tempered by circumstances which might make strict enforcement of the promise unjust, either between the parties or because of its effect on third parties. While reliant detriment was a necessary condition for the equity to arise, the court’s focus on holding the promisor to his promise was not aimed at “protecting” the promisee from the detriment, still less compensating for it. It was aimed at preventing or remedying the unconscionability of the actual or threatened conduct of the promisor, with the effect, but not the aim, that it tended to satisfy the expectations of the promisee. 71 In my view therefore this court should firmly reject the theory that the aim of the remedy for proprietary estoppel is detriment-based forms any part of the law of England. I acknowledge that the common law (and perhaps even equity) could have based itself on such a theory, and I accept that the concept that the remedy compensates for detriment is one which will appeal to some minds. But the cases show that equity did not take that course, and there is no good reason for doing so now, by a reversal of over 150 years careful development of the remedy upon a different foundation. (1) The name “proprietary estoppel” 138 Although the origins of the doctrine can be traced back to cases in the nineteenth century and before, the name “proprietary estoppel” appears to have been first used in Snell’s Equity, 26th ed (1966), pp 629—633, which was cited by Danckwerts LJ in E R Ives Investment Ltd v High

[1967] 2 QB 379

, 399. It is an irony that, soon after the name “proprietary estoppel” was invented, the doctrine developed in a way which made this name inapt. Estoppel is a negative and essentially defensive legal principle. The very words “estoppel” and “estop” are simply an archaic form of the word “stop”. To say that a party is estopped or subject to an estoppel means that the party is stopped by law from asserting or denying something. Detrimental reliance is a requirement of many forms of estoppel. For example, an estoppel by representation may arise where A makes a representation on which B relies in a way which would cause detriment and hence injustice to B if A were permitted to resile from the representation. In such a case, A may be estopped from denying the truth of the representation.

Duress – Written Agreement

[56]Ms Yasseri referred to Chitty at §11-020 and submitted that Duress requires proof:a. of illegitimate pressure arising from a threat coupled with a demand;

b. that the effect of the pressure was to cause coercion in the sense of an absence of practical choice; and

c. that the pressure was a sufficient cause of the victim’s entry into the transaction. Pressure may be economic but demands motivated by commercial self-interest are usually justified.

[57]She identifies the basis of the defence as being the threat of pressure in relation to one contract (the employment contract) as the reason for vary/affirming a different contract, and notes that his allegations of the threat of disinheritance does not fall within the recognised categories – Times Travel (UK) Ltd v Pakistan International Airline Corp

[2021] UKSC 40

. Held, dismissing the appeal, that the doctrine of lawful act economic duress existed in English common law as a ground for the rescission of a contract or the restitution of a non-contractual payment; that the elements of such duress were(i) the making of an illegitimate (albeit lawful) threat by one party,

(ii) sufficient causation between the threat and the threatened party entering into the contract or making the non-contractual payment and

(iii) the lack of any reasonable alternative to the threatened party giving in to the threat; that the illegitimacy of a threat was to be determined by focusing on the nature and justification of the demand made by the threatening party, having regard to, among other things, the behaviour of the threatening party (including the nature of the pressure it applied) and the circumstances of the threatened party; that since the law generally accepted that the pursuit of commercial self-interest was justified in commercial bargaining, a demand which was motivated by commercial self-interest would, in general, be justified; that, further, the question of whether a threat was illegitimate was not to be determined by applying a “range of factors” approach, nor by reference to a principle of good faith dealing; that (per Lord Reed PSC, Lord Hodge DPSC, Lord Lloyd-Jones and Lord Kitchin JJSC) a threat would be illegitimate if it amounted to the kind of reprehensible or unconscionable conduct which, in the context of the equitable doctrine of undue influence, had been judged to render the enforcement of a contract unconscionable; that, in the present case, where the defendant genuinely believed that it was not liable for breach of contract as a result of its failure to pay past commission, there had been no illegitimate threat; and that, accordingly, the claimant could not avoid the new contract.

[58]Mr Griffiths referred to the decision of Locatta J in The Atlantic Baron

[1979] QB 705

at §249 and Chitty at §11-021. However, the conclusion on economic duress is set out at 11-034: Conclusion on legitimacy of threat to break contract It is thus difﬁcult to state with conﬁdence the circumstances when a threat of a breach of contract will be regarded as legitimate. It is submitted that deliberate exploitation of the victim’s position with a view to gaining some advantage, particularly one unrelated to the contract and to which the threatening party knows they are not entitled, is clearly illegitimate. 156 At the other end of the scale, an apparent threat should not be treated as illegitimate if it was really no more than a true statement that, unless the demand is met, the party making it will be unable to perform. The difﬁcult case is that of the party who has a genuine belief that they areentitled to the amount demanded. It is submitted that, by analogy to the cases in which it has been held that there is consideration for a compromise of a claim which is in fact bound to fail if the party making the claim honestly and reasonably believed in its validity, a party who honestly and not unreasonably believes that they have a legal claim is not acting in bad faith by demanding what he thinks is due. A court should hesitate to ﬁnd that the demand was illegitimate. It is also suggested that a demand made in good faith in the sense that the party demanding has a genuine belief in the moral strength of his claim—for example, because they have encountered serious and unexpected difﬁculties in performing and will suffer considerable hardship if their demand is not met; or to correct an acknowledged imbalance in the existing contract—may in extreme circumstances also be treated as legitimate. Here the behaviour of the victim, for example whether they protested, will be relevant. First, as argued earlier, it will go to causation: if the victim pays without protest, that may be evidence that they were not inﬂuenced by the threat. But secondly, payment without protest may leave the demanding party believing that the justice of their demand is admitted, whereas it will be harder for them to prove that they were acting in good faith if they ignore the victim’s protests.

Acknowledgement

[59]There is an issue relating to whether Sebastian acknowledged the loan. Save for a reference to the evidence supporting the description of the advance as a loan, and Sebastian not demurring, there is nothing further advanced in support of such a contention. Indeed, the Particulars of Claim simply note that the Written Agreement was “…in acknowledgement of the Loan Agreement and the Loans…” Perhaps unsurprisingly, Mr Griffiths did not deal with this issue in his skeleton.

Is the Written Agreement confirmation of the loan agreement?

[60]Ms Yasseri states that the Written Agreement is confirmation of the Loan Agreement (see “acknowledgement” above) although such an argument presupposes that there was a Loan Agreement to be confirmed. As an alternative she submits that it is a variation of the Loan Agreement (to sell the property and for the debt to be paid from the proceeds) and that benefit represents consideration. She referred to Williams v Roffey Bros & Nicholls (Contractors) Ltd

[1991] 1 QB 1

a decision which confirmed that a promise to make bonus payments was enforceable where the promisor had obtained a benefit or obviated a disbenefit (absent fraud or duress). This was not argued further in closing submissions. Mr Griffiths noted simply that past consideration is not good consideration.

[61]Ms Yasseri addresses Olivia’s position as not a party to the Loan Agreement. She submits that the Written Agreement is a new contract between Olivia and Robert because Robert’s performance of his obligation to Sebastian under the Loan Agreement conferred on Olivia a factual and legal benefit (joint ownership of the property), and that performance constitutes consideration. She referred to The Eurymedon

[1975] AC 154

. However, it is unclear how it applies, and Ms Yasseri made no submissions in closing.

Declaration of Trust

[62]Ms Yasseri also submits in her skeleton that the Written Agreement is a declaration of Trust in favour of Robert because it imposes on the Defendants a legally enforceable duty of repayment of the Loan Agreement from the sale proceeds. She set out the requisite elements taken from Snell’s Equity 35th Ed at §22-012:a. the settlor must intend to impose legally enforceable duties of trusteeship on the owner of the property;

b. the subject-matter of the trust must be certain;

c. the objects or persons intended to have the benefit of the trust must be certain.

[63]Again, this argument was not pursed in closing submissions and no explanation was made of how (a) above was satisfied by the Written Agreement.

Common Intention Constructive Trust

[64]This claim is predicated on there being a common intention, either at the time of purchase or at a later date, that both parties would have a beneficial interest in the property and one party has acted to his/her detriment in the belief that by so acting he was acquiring a beneficial interest. Reference was made to Lewin on Trusts 20th Ed at §10/062: Where property is occupied in the domestic context, as a home for more than one party, the presumption of resulting trust has over the past decades gradually given way to changing social and economic conditions. The search is now to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.266A constructive trustarises in connection with the acquisition by one party of a legal title to property whenever that party has so conducted himself that it would be inequitable to allow him to deny to another party a beneficial interest in the property acquired. This will be so where(i) there was a common intention that both parties should have a beneficial interest either at the date of acquisition or at a later date and

(ii) the claimant has acted to his detriment in the belief that by so acting he was acquiring a beneficial interest. Some element of bargain, promise or tacit common intention must be shown in order to establish such a trust. The trust comes into existence at the time of the conduct relied on, not when the court declares its existence, a point very material in the bankruptcy of one of the beneficiaries. These principles apply equally whether the property is held or registered in the name of one or more parties, and take into account the presumption that the beneficial ownership of property will follow the legal ownership, and that the onus is on the party alleging that the beneficial ownership is different to show why.

Equitable Charge

[65]Ms Yasseri referred to Fisher & Lightwood’s law of Mortgage 15th Ed at §6.1 – “When real or personal property is appropriated for the discharge of a debt or other obligation, but without giving the creditor either an absolute or a special property in the subject of the security, nor any right to possession, the security created is an charge”. She further referred to Amari Lifestyle Ltd v Wames

[2018] Ch 161

per Stephen Hourdan QC sitting as deputy High Court

Judge at §31-32:

“31 On this point, I was referred only to Fisher & Lightwood’s Law of Mortgage, 14th ed (2014), para 1.22 which says: “An equitable charge is created when real or personal property is expressly or constructively made liable, or specially appropriated, to the discharge of a debt or some other obligation without there being any change in ownership either at law or in equity. It creates an equitable interest and confers on the chargee a right of realisation by judicial process.” 32 In my view, and in the absence of the citation of any authority to the contrary, an agreement which expressly appropriates an identified property to the payment of a debt, advanced for the purpose of buying that property, and under which the debt is to be paid upon sale and out of the proceeds of sale, does create an equitable charge. The chargee’s rights can be realised by judicial process in the form of an injunction restraining the chargor from disposing of the proceeds of sale free from the charge and directing that they be paid to the chargee in so far as needed to satisfy the debt. Although in the normal case, an equitable charge will secure debt payable at a defined time, and the chargee can then apply to the court for an order for sale if the debt is not paid, I do not consider that it is an essential characteristic of an equitable charge that the debt must be repayable at a specific time, rather than upon sale and out of the sale proceeds, or that the chargee must be able to require sale of the property against the will of the chargor in order to satisfy the debt. Rather, I consider that the essential characteristic of an equitable charge is that the owner of the property assumes an obligation to deal with that specific property for the benefit of the creditor, so that the creditor has a security interest in the property, and can require that, when sold, the proceeds of sale are to be appropriated to the payment of the debt owned to the creditor.”

[66]She submitted that by the Written Agreement the Defendants had appropriated Fernleigh Mount for the discharge of the debt. The consequence of that includes, in her submission, an entitlement for Robert to interest on the debt and to reimburse himself for all costs, charges and expenses reasonably and properly incurred in enforcing or preserving the security – see Fisher and Lightwood at §54.44 and 55.1. Discussion Did Robert make payments to Sebastian totalling £864,722?

Discussion

[67]There is clear evidence that Robert transferred £727,086 to Wosskow Brown Solicitors on 5 August 2021. Robert’s bank statements refer to a payment of £700,000 going into (he states from Mr Dungworth’s firm) and out of his Halifax account by cheque in July 2021 (1863) and then a wrap payment of £718,483.32. On 5 August 2021, the sum of £727,086 was paid to Sebastian’s Solicitors (1176). That bank statement is heavily redacted, but it is a Halifax account.

[68]The email from Jessica Gamble to John Dungworth on 5 August 2021 (2247) refers to £700,000 being paid from Robert. The document dated 19 July 2021, signed by Robert, also refers to a gift in the sum of £700,000 to “my grandson and his partner” This is one of the 2 documents which the experts agreed “there is strong evidence to support the proposition that Robert Stokes signed the Two Documents dated 19 July 2021 and 04 August 2021". . The Reply asserted not that this was not signed by Robert but that it did not represent the true position. However, in his witness statement, Robert stated that “I do not remember signing this document, and it was a shock for me to see it for the ﬁrst time when it was disclosed”.

[69]Despite the confusion, I accept that Robert paid a sum of £727,086 to Wosskow Brown for the purchase of Fernleigh Mount.

[70]Turning to the remaining sums, I have already noted the inconsistencies in the figures in the schedule at §4 of the Particulars of Claim (although the total is said to be £864.722, the items total £850,222). The document at 1226, which was prepared by Helen for the purposes of preparing the Written Agreement, includes 2 sums not contained in the pleading: £13,500 on 28 October 2021 and £1,000 on 22 August 2021 (although these do not total £864,722).

[71]Helen’s evidence was that Robert had told her verbally that he had loaned Sebastian £856,000 and that when she had been through the bank statements provided by Robert they showed the entries leaving his account (1171 onwards) showing that sum. She was unclear whether the list at 1229 was hers. What is clear, however, is that the sums contained in 1229 were payments either made to Sebastian or to Grantley Hall (save for 27 April 2022, £10,136 to Fulford Flowers ref Olivia Grantley HA).

[72]I am prepared to accept, therefore, that the sums contained in the schedule to the Particulars of Claim constitute payments made to Sebastian directly or in relation to his wedding to Olivia. I note that the Particulars of Claim asserts that the Grantley Hall payments were joint gifts to both, although the claim was that all the payments were made to Sebastian pursuant to the Loan Agreement. I do not accept the full sum advanced, however, and claimed is £864,722, but in fact totals £850,222 – the error, either in calculation or being drawn up, is not something that can simply be ignored. The Claimants could have sought to amend the schedule, but chose not to do so and must therefore stand by the sums claimed in the Particulars of Claim to have been advanced. 74. Were the Sums paid by Robert to Sebastian by way of loan or gift? Non Fernleigh Mount advances/Wedding payments

Non Fernleigh Mount advances/Wedding payments

[73]In the Particulars of Claim, Robert alleges that:

“In or around late September or early October 2020, at a meeting at the Claimant's home, Claimant orally agreed to provide to the First Defendant loans which he was advised were for the purpose of property investment.”

His witness statement however states that Sebastian approached him in or around May 2021 with the proposal to purchase Fernleigh Mount – it makes no mention of any discussion about loaning other sums to Sebastian for the purpose of property investment prior to (or indeed after) that first discussion save for a general reference to “He would simply turn up at my house and ask to borrow money for various things.”

[74]Indeed, at no point in his witness statement does Robert provide any evidence of discussions about the provision of the other sums that make up the balance of the advances. The sums relating to the wedding of Sebastian and Olivia are not advances for the purpose of property investment, and Robert does not say that he agreed with Sebastian (and Olivia) to lend them the money to pay for their wedding.

[75]In contrast, Sebastian and Olivia both gave (unchallenged evidence) that Robert was treated as the guest of honour at the Wedding – presumably because he had funded it. Although Sebastian was questioned about the payments to Grantley Hall, and it was suggested that they were payments for him and Olivia to stay there, not for the wedding, it is clear from the evidence that payments related to the wedding (the invoice from Grantley Hall at 2337 makes clear that a total of £53,676 was paid to the venue). It is perhaps surprising that if Robert’s case was that the payments he made in relation to the wedding were in fact loans, then the payment of £10,136 for flowers on 27 April 2022 is included, but not the payment of £1,000 made on 22 March 2021.

[76]In the absence of any evidence to support the contention that the monies advanced by Robert to pay for Sebastian’s wedding were a loan and that Robert was expecting to be repaid, I dismiss his claim for repayment of those sums. I am satisfied that at the time that the advances were made, the relationship between Robert and Sebastian was still positive, and that it is more than likely that Robert would have been keen to help pay for the wedding. Notably, the wedding payments are not mentioned anywhere in the correspondence until Helen prepares the Schedule and adds those amounts from the bank statements.

[77]The sum claimed by Robert should therefore be further reduced by £25,636, which represents the payments to Grantley Hall in the Schedule to the Particulars of Claim. Non Fernleigh Mount advances/other payments

Non Fernleigh Mount advances/other payments

[78]The other payments which are not specifically related to the purchase of Fernleigh can be separated into two groups – those prior to the purchase of Fernleigh and those subsequent to it. Payments totalling £34,000 are said to be loans prior to August 2021. There is nothing in the bank statements to show the purpose of these advances, and yet again, Robert gives no evidence about them, the discussions about why they were being advanced or the basis on which he expected repayment. The pleading that the “loan agreement” was reached in September/October 2020 appears to have been intended to include these earlier payments, but as noted above Robert’s evidence is that the discussion about loaning money only took place in May 2021 meaning that only the last of the advances (£10,000 on 21 May 2021) could have been made after that discussion.

[79]Considering that at the time of the earlier payments, Robert believed Sebastian to be the future of the business, and Sebastian was helping him following Anne’s death, it is more credible that these were gifts made by Robert to Sebastian. The absence of any details of the discussion or any requests for repayment until after the relationship soured and Helen prepared the Written Agreement, satisfies me that these sums were gifts and there was no intention or understanding that they would be repaid. The underlying suggestion in Robert’s witness statement that in some way Sebastian was misappropriating the money, together with the references to the password book that were put to Sebastian in cross examination, suggest to me that it was in fact Robert’s belief at the time that the proceedings were issued that these were not loans but Sebastian helping himself (see also Mr Morgan’s letter (§29 above)).

[80]It is, of course, Robert’s case that the loans were for property investment. There was evidence contained in the emails from Mr Morgan that Sebastian had been lent £75,000 to buy into a property project (see, for example, the letter following a meeting on 12 May 2021 at 1319). That loan was evidenced by a draft Declaration of Trust and Assignment, which noted that it was a loan and that it would be owed to Katherine as part of her £300,000 gift. Although the letter and the draft were in May 2021, there is no mention of the other sums said to be owing (or indeed any mention of a payment of £10,000 to be made a few days later). It is clear that Robert was not informing Mr Morgan of other sums he was advancing to Sebastian, in addition to the £300,000 being given to each of the grandchildren.

[81]I am satisfied that the £34,000 advanced prior to the purchase of Fernleigh was not a loan, and that there was no discussion in September/October 2020, as pleaded in the Particulars of Claim, at which Robert agreed that these (or any) sums would be loaned and at which Sebastian agreed he would repay.

[82]The second tranche of payments follows the purchase of Fernleigh Mount. Once again, these advances are not addressed by Robert in his witness statement, and there is no evidence of a discussion in September/October that Robert was going to advance money to Sebastian for property investment or, subsequently, for the purchase of Fernleigh Mount. Indeed, there is an inconsistency in Robert’s case: he says he was wholly unaware that Sebastian was spending money improving Fernleigh until Helen showed him the photos, but he advanced money on the basis that Sebastian would use it to invest in property (and by implication in improving Fernleigh Mount for “flipping”).

[83]The obvious conclusion is that the discussion about property investment referred solely to the purchase of Fernleigh Mount and did not apply to other sums advanced to Sebastian. The Written Agreement supports the understanding of Robert (as communicated to Helen) that the money advanced was for “…purchase of Fernleigh Mount, 116, Totley Brook Road, Totley, Sheffield, S17 3QU in 2021” and not for other sums which he (or Helen) had decided to seek the return of.

[84]The wedding of Sebastian and Olivia was in June 2022 (and there is a photo of Sebastian and Robert at 2336). That would suggest that certainly, up until the third last payment being claimed the relationship was still close, and that it is likely that Robert would have continued to help with the costs of the wedding (beyond the direct payment to the Venue). One of the problems with the absence of Robert and the deficiencies in his witness statement is that it does not address at all Robert’s paying for the wedding and why that would be a loan, whether his description of an advance for property investment or otherwise is accepted.

[85]Sebastian was specifically questioned about the £25,000 payment on 3 December 2021 and accepted that some of it was used to fund the new kitchen, as evidenced by the social media posts. Sebastian said that he had asked Robert whether he could have some money to pay for the kitchen, and Robert agreed, so he did not accept that Robert would have been upset by the photographs. He stated it was not part of any plan to “flip” the property. Robert’s evidence about these works is at §67 of his witness statement: “67. At [130] the Defendants refer to the fact a nursery was being completed indicating that this was to be a family home, rather than a property which (as agreed) would quickly be sold for a proﬁt.68. Above all, when I saw these photos, I began to doubt whether the Defendants actually had any intention of selling the property as we had agreed. I did not understand why so much money was being spent on the property in circumstances where the plan was to ﬂip it. The Defendants were clearly treating this as a family home rather than an investment.

69. I recall that upon seeing these photos/posts, I was extremely distressed and upset. I felt like I had been taken advantage of and deceived by the First Defendant who had taken advantage of me in a vulnerable state. Above all, I felt foolish for letting myself get drawn into the First Defendant’s plans. On the other hand, I needed the First Defendant because there were so many tasks that I was unable to do without the assistance of Anne.

[86]There is no mention that Robert had advanced the £25,000 as a loan to carry out property improvement works on Fernleigh as part of the agreement to “flip” it, rather that he was upset that Sebastian was treating Fernleigh as a family home. I am satisfied that the further sums claimed as loans were, in fact, gifts from Robert to Sebastian, and that a further £64,500 must be deducted from the claim. Fernleigh Mount

Fernleigh Mount

[87]Accepting as I do that Robert advanced the sum of £727,086 to Wosskow Brown to part fund the purchase of Fernleigh, it is his case that this was a loan advanced on the basis that it would be utilised for the purchase of Fernleigh at a discount of some £200,000, that Fernleigh would be sold in 2022 for a substantial profit, and that the profit could then be used to fund the redevelopment of the Bungalow – see §31 of his witness statement. That discussion and agreement is claimed to have occurred in September/October 2020, although the Reply suggests that the discussion in May 2021 was an agreement “…to make further loans to [Sebastian] pursuant to the terms of the Loan Agreement, to allow [Sebastian] to purchase the Property”.

[88]The evidence is as follows. i) Mr Morgan’s letter of 8 September 2020, following a meeting on 6 September 2020, makes no mention of Sebastian borrowing money, though it does note that Anne’s shares in the business were to go to Sebastian. Anne’s other assets would be used to equalise the inheritance left to the grandchildren. ii) Mr Morgan’s letter of 10 November 2020 again deals with Anne’s Estate. iii) 16 December 2020, following a meeting between Robert, Sebastian, and Mr Morgan, which dealt with the proposed £300,000 payments to the other grandchildren (Sebastian already having had his). There is “Phase 3” planning mentioned which referred to:

“…you may move into an annex built on to your existing property and then have Sebastian move into the current property you live in which would then leave Sebastian's £300,000 plus property bought recently as a potential asset for further payments to the other grandchildren if you are going to give Sebastian your considerably more valuable home as part of the above arrangement when he moves to the site and you move to live in the annex to be built. We can discuss that in more detail at a later date.” iv) 15 March 2021. The first reference to BPR qualifying investments, such as Foresight EIS. A figure of £900,000 to £1M is mentioned. There is no reference to any agreement about loaning money to Sebastian having been reached in the Autumn of that year. There is a discussion about the tax implications of Sebastian moving into the Bungalow. v) 13 May 2021. There is a reference to the £75,000 loaned to Sebastian “…so that he can buy into a property project with a friend.”

This is the first mention of any loan (other than the £300,000) and of investment in property. It does not mention any plan to purchase Fernleigh Mount. vi) Robert, in his witness statement at §21, details the discussion about Fernleigh Mount in May 2021, “…which he was able to purchase at a substantial discount because the current owners needed a quick sale. He told me he could get the house for around £200,000, less than it was worth (it was on the market for £985,000), and I trusted his word and thought that this sounded like a good deal.” He says Sebastian told him that they could sell in 2022 and make a substantial profit – Robert says he agreed to the loan on the basis of the reassurance that he would get a good return. Robert does not address why he transferred £727,086. vii) 2 June 2021. Further discussions about Foresight and a report prepared by Mr Dungworth. viii) 7 July 2021. Letter from Wosskow Brown to Robert that “…we understand that you have chosen to make available a sum of money – on a gifted basis – to our client(s)”. ix) 19 July 2021 – the form of authority signed by Robert. This is the letter Robert says he has no recollection of signing, and that it was a shock to see. x) 2 August 2021. Mr Dungworth, in his witness statement, refers to a conversation with Robert that mirrors the version of the discussion in the witness statement/Reply. There is no note of this discussion (other than a letter on 11 December 2023 to Robert’s Solicitors) and Robert makes no mention of it. There is also a reference to a discount (Fernleigh Mount was purchased above the asking price - £1.05M v £985k). Mr Dungworth was not called and was not cross-examined on this. xi) 4 August 2021, the documents prepared by Wosskow Brown and taken by Ms Gamble that Robert dealt with at §34 of his witness statement. xii) 23 August 2021. A letter from Mr Morgan which stated:

“I believe Seb was repaying you some money from a loan that you had made to him soon and that was one of the sources of cash we could use”

. Mr Morgan believed that referred to the £75,000 and it is clear that he was unaware of the payment of the £700k+ for the purchase of Fernleigh Mount. xiii) 21 September 2021. Mr Dungworth’s handwritten note which appears to record:

“Foresight – Cancelled – All Ok – Totley Property purchased at discount to move to Grandad’s house – to develop 2022 jointly owned Robert Seb - Funds to come back. £700,000 + 400,000 £1.1m. TR1? Gift or Loan. No Insurance”

There is no explanation why it refers to “Gift or Loan”. Mr Dungworth stated in his witness statement that “I don't recall discussing it being a loan or gift” although he had stated in the preceding paragraph that he had the telephone discussion with Robert a month and a half earlier where it was discussed, and during which Robert had been clear it was a loan. xiv) 22 September 2021. The first reference to a loan from Robert to Sebastian is made while referring to Sebastian having moved into:

“…a new home bought with a further loan from you personally Bob. The long-term plan is to extend your home at Bents Close during the next year and for Sebastian and family to move in with you at which point Sebastian can also sell (again CGT free if he makes a gain as hoped) this second property he has bought. The sale proceeds of the two properties (plus Sebastian's other recent successful property venture with his friend which has also now concluded) will allow Sebastian to repay all the monies you have lent him.” and later that “3. Sebastian will sell houses as and when appropriate.” xv) 12 September 2022. An email from Mr Morgan with his notes for the meeting the following day. It records that: “NB - there have been other dealings between Bob and Sebastian re property and loans in the background but they are irrelevant to the trusts and the £300k each grandchild gifting programme”. xvi) 14 September 2022. A letter from Mr Morgan which includes a reference to “…before Seb has repaid you the £700,000 he owes you to do with his various property transactions that are ongoing”

. It is not clear what is meant by “various property transactions”, and Mr Morgan, in his witness statement, notes there is no mention of the events of August 2021, but also comments that “…I would have certainly expected [to be told] had he been given rather than lent funds in August 2021”. However, Mr Morgan gives no evidence beyond the letter about the discussions or what he knew or was told about the loan. He does not appear to have been told by Robert the detail of the discussions in September/October 2021 or in May 2021. xvii) September 2022 Richard Stokes becomes involved and describes a discussion with Robert at the Bungalow in which Robert described that the property (which Richard had told Robert he had heard about on the grapevine) had cost over £1M and had been bought with a Loan from him. Richard in his witness statement states:

“The idea was for it to be ﬂipped very quickly and sold for a substantial proﬁt within a year or two. I did express my concerns that the Defendants may get comfortable living there, especially as it was a family home, but the Claimant was conﬁdent that the plan would all run smoothly and that he trusted his grandson.” xviii) Written Agreement. This was prepared by Helen and states as follows: “This Agreement is confirmation that money totalling £864,000.00 was temporarily loaned to Sebastian James Stokes for purchase of Fernleigh Mount, 116, Totley Brook Road, Totley, Sheffield, S17 3QU in 2021. The loan was made in good faith and only intended for a short period of time. The debt is due to be repaid in full. The property is now marketed for sale by Blenheim Estates, Sheffield. It is agreed that on completion of the sale, the total loan amount of £864,000 will immediately be repaid back to Robert James Stokes by Sebastian James Stokes.". xix) The Written Agreement is clearly inconsistent with Robert’s case for several reasons: a) It is his case that monies were loaned for the purpose of property investment (§3 of the Particulars of Claim), that they would be short-term and repayable on demand. However, as I have noted above, some £100k was not loaned for property investment at all and was certainly not loaned for the purchase of Fernleigh Mount; b) The loan was said to have been “for a short period of time”

. It was Robert’s case that the sums were, in fact, payable on demand, but also payable on the sale of Fernleigh Mount at some point in 2022 or alternatively when there was a substantial profit. c) Robert does not describe at all in his witness statement the sums additional to the £727,086 being loaned to Sebastian, being for property investment (as opposed to a loan for the wedding for instance). xx) 16 June 2023 Mr Morgan wrote to Sebastian that “he had been instructed to seek repayment of the debt” and referred to the debts now amounting to £864,000. Sebastian replied:

“There is no doubt in my mind that this loan needs to be repaid and we are trying have dropped the price twice already to speed wasn't originally put in Robert’s name because of the SDLT implications on your recommendation. The bulk of the money was to be put away forever and I never thought it would cause my grandfather any ﬁnancial issues. I'm sorry that it has come to this point and will do all I can to put it right" xxi) Letter before Action sent on 10 August 2023. The payment schedule mirrors the Particulars of Claim and the amount included in the Written Agreement. It asserts that: “It was always agreed between yourselves and our client that this Debt would be repayable. The payments were not intended to be gifts, nor does any documentation or correspondence suggest that these were intended to be gifts. We understand that several meetings took place between our client, Sebastian Stokes and James Morgan where it was also conﬁrmed that the loans were in no way meant to be gifts.”

[89]In determining whether the £727,086 was a loan or a gift Ms Yasseri submitted that the issue will turn on “…the terms, if any, that were agreed between Bob and Sebastian at the time that payments were made, and Bob and Sebastian’s intentions.” She referred in her skeleton to the pleaded claim that there was a discussion in September/October 2020 where there was an agreement that sums would be loaned for the purpose of property investment. Despite that, there was then a further discussion where further terms were agreed that Fernleigh Mount would be bought and “flipped”. The basis of that was Fernleigh Mount was on the market for £200,000 less than it was worth, and so a sale in 2022 would generate a profit. She relies on the contemporaneous documents summarised above.

[90]Mr Griffiths relies on other contemporaneous documents - particularly the documents from Wosskow Brown signed by Robert, the fact that the other advances were made for purposes other than property investment, and that Robert was preferring Sebastian over other members of the family. He also strongly asserted that there was a clear change in Robert’s position on Fernleigh Mount after Richard and Helen became involved.

[91]I am not satisfied that there was any discussion between Robert and Sebastian as pleaded at §3 of the Particulars of Claim, i.e. in September/October 2020. Robert does not provide any evidence in support of this allegation in his witness statement and, in the Reply, simply refers to the discussions about moving in that began at that point. The allegation was specifically denied in the Defence and has not been proved by the evidence before me. The suggestion that the advances were for property investment is wholly inconsistent with Robert’s own evidence.

[92]Why therefore has Robert asserted that there was any such discussion? The obvious conclusion is that the first sum, which formed part of the Written Agreement, was paid on 9 October 2020, and several of the other “loans” were paid prior to the second agreement in May 2021. Without some agreement to lend money being advanced (especially in circumstances where Robert’s own evidence is that he could not recall specifically these advances and his suggestion that they were taken from his Bank by Sebastian) they could not be recovered as loans or included in the Written Agreement.

[93]It is reasonable, therefore to approach the rest of Robert’s case with considerable caution – if his claim can seek to recover from his grandson money which I have already found was given to him for his wedding, and for which he has not provided any good contemporaneous evidence, it is quite possible that he has revisited his previous indulgence of Sebastian and chosen to pursue this claim – with or without the encouragement of Richard and Helen.

[94]Another element of the evidence that has not been properly addressed is the £75,000 loan to Sebastian for a specific property investment. It does not form part of this claim, but it had clearly been regarded as a loan by Robert and Sebastian and had been discussed with Mr Morgan during his tax meetings. No explanation has been given for why that loan was treated differently from the advance for the purchase of Fernleigh Mount. In the absence of Robert as a live witness, he cannot clarify this inconsistency, and no step was taken to address it in his witness statement.

[95]Turning then to the discussion between Robert and Sebastian that led to the advance of £727,086, Robert describes the meeting and the agreement at §31 of his witness statement but gives no detail beyond that first discussion. He did not make any enquiries about the property or discuss why the sale should be in 2022. Of course, it is possible that Robert accepted what Sebastian told him because “…I trusted his word and thought this sounded like a good deal”. However, this evidence must be viewed in light of a man who was a successful businessman and had regular discussions with his tax Solicitor and financial advisor about how to minimise his IHT liability. The granting of a loan to Sebastian would have kept the money within his estate rather than start the clock running on a PET, and bearing in mind there had been discussions about putting this money into a BPR scheme, it is surprising that Robert did not discuss this with his advisors – although it is also surprising that moving such a sum out of his estate was not reported to Mr Morgan.

[96]I accept that Mr Dungworth suggests that there was a discussion in August 2021 which supports Robert’s case in detail. However, I do not accept that evidence for the reasons already set out, and had there been such a discussion, I find that Robert would have mentioned it to Mr Morgan as well (particularly as the deed of forgiveness was being discussed) in the discussions at the same time as Mr Dungworth’s purported telephone call.

[97]Robert accepts that he went to the Bank and transferred the money (§55) though he does not recall doing so. That is hard to understand – if his case is that he was loaning the money to Sebastian for such an important purchase and transferring such a large amount, it is odd that he cannot recall the details. But in any event, there is good evidence that he arranged the payment by directing the money be moved from other investments/accounts.

[98]Sebastian relies on other evidence that Robert knew he was gifting the money (the Declaration). There are three separate documents that refer to this being a gift – the letter of 7 July 2021 from Wosskow Brown, the form of authority dated 19 July 2021, and the attendance on 4 August 2021.

[99]Ms Yasseri deals with these in her Skeleton at §24: i) She notes the email is undated and does not bear a Wosskow Brown header and that it refers to a deposit. Of course, the document is in the bundle (and no notice to prove was served) so it must be assumed to be valid. ii) Letter 7 July 2021. She notes that it refers to both Olivia and Sebastian even though it is Sebastian’s case that it was a gift to Sebastian. However, they were joint purchasers, and I do not consider that to be a good point. iii) The attendance at Robert’s home. a) She criticises the Attendance Note for not recording any explanation of the purpose of the visit, what the documents were, or inviting him to take legal advice. Although it is right that these are not recorded, and therefore cannot be assumed to have been discussed, it does record Robert’s concerns and that Robert provided the documents. I attach little weight to the questionnaire in the absence of Ms Gamble being called as a witness. b) She notes that the documents refer to Sebastian and Olivia as clients and the gift being to “…my grandson and his partner”.

[100]Robert’s evidence is that he was unaware that Ms Gamble was going to visit and that he thought she was an estate agent only there for 5/10 minutes. He was asked to sign a one page document which was not professionally written (which would suggest that he took time to read it). Despite that he says he was “…led to believe by both the First Defendant and Jessica Gamble that I was simply signing a document to conﬁrm that money was available to purchase Fernleigh Mount. Nothing more. I now realise that what I had signed was something completely different to what I was told at the time.” He then repeats the points adopted by Ms Yasseri in her skeleton.

[101]I do not accept that Robert, an experienced businessman, would not have read a document before signing or that he would have completely misunderstood what it was. The evidence of the meetings between him and Mr Morgan and Mr Dungworth shows someone fully capable of dealing with complex financial issues and unlikely to have been hoodwinked by someone putting a document in front of him and telling him to sign it. He does not provide any explanation why he believed Ms Gamble was an estate agent, and I am satisfied that Ms Gamble would have explained who she was and why she was there. Although she was not called to give evidence, there is no reason to believe that she would have sought to mislead Robert. Once again, Robert has been unable to give any clarificatory evidence to explain his case.

[102]Set out at (b)(ii) of the List of Issues are several challenges to the Declaration made by Robert. I shall deal with each in turn:

Sham

[103]The key point made by Ms Yasseri is that the Declaration did not reflect the parties’ pleaded position. She set out in her skeleton at §25 that Robert’s case is that the advance was a loan, and Sebastian’s case is that it was gift to him. Neither of them asserted that it was a gift or a loan to Olivia, and so, presumably, it does not reflect their case. It is right that the documents do not identify that the advance is for Sebastian alone (the parenthesised plurals are not corrected).

[104]As set out above, for the Declaration to be a sham, it would be necessary that “all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating”. Sebastian and Olivia did not give any evidence that this was their intention, and Robert does not refer to such an intention in his evidence. Indeed, it is his evidence that (while having come to a view about the document) he did not understand what he was signing. I have no hesitation in rejecting any suggestion that the Declaration was a sham. Non Est Factum

Non Est Factum

[105]Robert’s evidence is not that he was told that the Declaration was something other than it was but rather that he was given a different explanation by Ms Gamble about the reasons for her attendance, and that she/Sebastian did not explain the document to him. He also accuses Sebastian of simply saying “You need to sign this”, not of telling him that he was signing something different to the actual Declaration. The third limb of the test set out in Chitty above is:” (c) the plea cannot be invoked by someone who does not take the trouble to find out at least the general effect of the document.”

[106]It is clear from Robert’s evidence that he did not take the trouble to find out what the document was, even though he had concluded it was not professionally drafted. There is, in those circumstances, no merit in the plea of Non Est Factum. Although Ms Yasseri suggested that Robert was “vulnerable” at the time he signed the Declaration, there is nothing to show that he lacked capacity – especially when his Tax Solicitor and his Financial Advisor were satisfied of his competency (and his Solicitors must have been when this claim was initiated)

Misrepresentation

[107]Misrepresentation allows the rescission of a contract where a party has entered into it after a false statement of law/fact has been made on which he relied, and which induced him to sign the contract. Robert does not suggest that this document was a contract – it is advanced purely as evidence of the nature of the agreement he had already entered into. I do not understand the basis on which it can be said that Robert entered into a contract to gift the advance as a result of the alleged misrepresentation. It is his case that he had already agreed a loan in May 2021 (or September/October 2020). Undue Influence

Undue Influence

[108]There is a similar underlying problem with this allegation. It is not clear what transaction Robert entered into that requires an explanation. Ms Yasseri in her skeleton at §39 falls into error of treating the Declaration and the gift as being the same. The agreement to loan/gift was made in May 2021 (if not in September/October 2020), not at the time of the Declaration. If Robert’s case is that the agreement to gift was unwise, wholly one-sided, and obtained by the exercise of undue influence by Sebastian, then it is that agreement which would have to be challenged. Robert does not say that he was unduly influenced into gifting the advance but that there was an express agreement to loan it. The declaration is only evidence of what Sebastian (and if accepted, Robert) described as the basis of the advance to the conveyancing Solicitors.

[109]In any event, the relationship between Robert and Sebastian does not fall within the class of relationships to give rise to a presumption, and there is no evidence from Robert to establish what the undue influence was. His high point is that Sebastian told him he needed to sign it. Finally, in the light of the unusual circumstances of the relationship between Robert and Sebastian at the time, the gift does not call for any explanation. Robert was treating Sebastian as the future of the family business and helping him financially over and above the other grandchildren.

[110]I do not find that the Declaration was obtained by the exercise of actual or presumed undue influence. Other evidence

Other evidence

[111]Taking into account that the documentation which was given to Robert - which it is now accepted he signed - and which he considered sufficiently to be able to comment that it was not “professionally written” I am satisfied that Robert was aware of the nature of Ms Gamble’s attendance and that he was prepared to sign the documents produced by the Defendants. The fact that Robert signed them does not in itself mean that he did not have an agreement with Sebastian that he would lend him the money, but it is, in my view, strongly supportive of Sebastian’s case that Robert had agreed to fund the purchase of Fernleigh Mount as a gift to him.

[112]Another element that supports the suggestion that this was not a loan is that the balancing payments (the deposit and the money to come from Blair Athol) were not provided by Robert personally but were paid by the Company. There is no explanation why it was necessary to differentiate between the two sources of funding if there was to be a quick sale of Fernleigh Mount save for some emails/letters which set out his various sources of funding.

[113]Against the above, there is the letter from Mr Morgan on 22 September 2021 (some 5 weeks after Fernleigh was purchased) which refers to Sebastian having moved into a new home “…bought with a further loan from you personally, Bob”. As Mr Morgan pointed out, he was not involved with and did not have knowledge of the advance from the Company to make the balancing payments, and therefore this must be assumed to be a reference to a loan in addition to the £300,000 loan (or potentially the £75,000). As there is a reference to the sale of the house, it must be assumed that it does not refer to the £75,000 as suggested by Mr Griffiths.

[114]The difficulty with this evidence is that Mr Morgan relies solely on his letters and is unable to provide any details of the meetings or discussions that led to the letter being sent. There is specifically no mention of: i) What were the terms of the agreement? ii) When it was made and in what circumstances; iii) Why the money lent to Sebastian for Blair Athol (and for which a deed of forgiveness had been executed) would be used with the proceeds of sale from Fernleigh Mount to repay “…all the monies you have lent him” so that it can again go into the EIS scheme. iv) The sale of Fernleigh appears to have been dependant on Sebastian and his Family moving into the Bungalow – there is no mention of any “flipping” of Fernleigh Mount in 2022 which Robert contends was the specific agreement.

[115]Once again, Robert's absence to provide an explanation for the discrepancy between the description of the agreement he had reached and the terms of the purported loan leaves his case in considerable difficulty. Some consideration must be given to the parties’ subsequent positions. I remind myself of the observations of the Court of Appeal in Maggs t/a BM Builders v March & Anor

[2006] EWCA Civ 1058

where Smith LJ stated:

“Determining the terms of an oral contract is a question of fact. Establishing the facts will usually, as here, depend upon the recollections of the parties and other witnesses. The accuracy of those recollections may be tested and elucidated by things said and done by the parties or witnesses after the agreement has been concluded. Receiving evidence of such words or actions does not mean that the judge is losing sight of his task of deciding what the parties agreed at the time of the contract. It is simply helping him to decide whose recollection is right. It is not surprising to me that the editor of Lewison should observe that there is nothing in the authorities to prevent the court from looking at post contract actions of the parties. As a matter of principle, I can see every reason why such evidence should be received.”

[116]Before turning to the Written Agreement and the actions of Sebastian in relation to the sale, I should observe that until the involvement of Richard and Helen, there is nothing in the manner in which Sebastian or Robert acted to suggest that Sebastian’s case is not correct. Although Robert asserts that the agreement was that Fernleigh would be sold in 2022, until August 2022 (save for the above letter) there does not seem to have been any discussion about its sale, or the repayment of the £700,000. Indeed, Robert accepts that he went to Fernleigh on 9 September 2021 (as per the photograph) and again a few days later, and that he was at the wedding. He is also making substantial payments to Sebastian for the wedding or for other expenses. That is not consistent with his subsequent case that he intended to treat the grandchildren equally.

[117]As for Sebastian, it is clear that he, and perhaps more obviously Olivia, were treating Fernleigh Mount as their family home, carrying out substantial works on it, and not preparing it to “flip”. As is clear from the social media posts, they were not treating it as a place to sell for a quick profit so they could move into the Bungalow.

[118]Sebastian’s position on the Bungalow is hard to determine. Although he appears to have told Robert that he and his family would move in with him, I do not believe he told Olivia this, and I suspect he had no desire to do so. Whether “stringing” Robert along was an ungrateful way to behave, it explains, particularly in the light of Olivia’s description of him, why Sebastian appears to have been riding different horses on the move. It does not help determine whether the advance was a loan – it may be that Robert thought that, when the move came, Fernleigh would be sold and the money used for the work on the Bungalow. But that is not the same as an express agreement that Fernleigh Mount was to be flipped and the £727,086 to be repaid.

[119]Much weight has been placed by Robert on the Written Agreement, and Sebastian’s acceptance that Fernleigh Mount should be put on the market, and that Robert should get his money back. It is Robert’s case that this reflects the true agreement. However, I would make the following observations: i) After the initial involvement of Richard and Helen, it is clear that Sebastian was trying to keep Robert on side. Bearing in mind that Sebastian was at that point the future owner of the business and likely to inherit the greater part of Robert’s wealth, such an approach is understandable. Indeed, Richard in his witness statement at §25 refers to Sebastian being compliant because “he wanted [Robert] to (in his words) ‘keep faith in him’” ii) The Written Agreement does not accurately reflect what Robert’s evidence about the original agreement was. It appears to be an attempt to get back from Sebastian all the money he had been given, over and above what the other grandchildren received. That is the only real explanation for the sudden demand for the repayment of the wedding and other advances. Sebastian's willingness to sign the agreement merely reflects what I have noted above. iii) Further the description that the money “temporarily loaned” was for the “purchase of Fernleigh Mount” was inaccurate and does not reflect either Robert’s case as set out in his witness statement or in the letter from Mr Morgan (1736) which seems to assert that Sebastian had been taking money from Robert’s account without his agreement – and so was clearly not a loan. iv) I do not accept Sebastian’s case that he signed the agreement as a result of duress – whatever pressure was placed on him, either through veiled threats about his position at the Company, or as a result of his own concerns about falling out with Robert, it cannot be said that there was an absence of practical choice. Further, as Ms Yasseri notes in her skeleton, the treatment Sebastian details in the replies to the Part 18 Request does not constitute:

“the kind of reprehensible or unconscionable conduct which, in the context of the equitable doctrine of undue influence, had been judged to render the enforcement of a contract unconscionable”

. Further within the domestic/family context, it is clear that Sebastian was motivated by a desire to keep Robert “on side” and did not sign the Written Agreement because he lacked any reasonable alternative.

[120]I do not find that the Written Agreement or other statements by Sebastian and Olivia in the many messages and emails assist me in determining what was said between Robert and Sebastian in May 2021 when he agreed to pay £700,000 towards the purchase of Fernleigh Mount. As Ms Yasseri noted in her submissions, the question of the Written Agreement's legal status is irrelevant if the original agreement was that Robert gave Sebastian that money. I am satisfied, on the balance of probabilities, for the reasons I have set out above, that he did so. There was no agreement that the money would be repayable on demand or on the sale of Fernleigh Mount, nor was there an agreement that Fernleigh Mount was purchased to “flip” in 2022 and that the profit would then go back to Robert.

Conclusion

[121]The Claimant’s claim must therefore be dismissed as I am satisfied that the advance (£727,086) was a gift to Sebastian to purchase a family home for him and his family. I also dismiss the claim for the other payments – they too were gifts by Robert to Sebastian, predominantly to pay for his wedding.

[122]I was provided with two documents by Ms Yasseri following circulation of the draft judgment. One of those dealt with request for “typing corrections and other obvious errors” in accordance with the header to the draft judgment. I have been assisted by both counsel’s corrections and where appropriate have adopted them.

[123]I was also provided with a document at 54 in the bundle for the consequentials hearing which was titled:

“Requests for corrections, clarifications and amplifications to the Draft Judgement”

. It consisted of 52 separate items. I have considered the guidance in R (Counsel General for Wales) v SoS BEIS

[2022] EWCA 181

and the notes to the White Book at 40.2.4. I have considered at some considerable length the request and I do not consider that the Judgment needs to be expanded, corrected or re-written. I have not set out in detail all of the 52 items but would note as examples the following: i) 10 – It is unclear what relevance this issue has to the determination of the issues. It is correct that I have not made any finding about the motivation of Richard and Helen, but it is wholly unnecessary to do so. See also the list of issues. ii) 32 – this is bare assertion of the pleaded case. iii) 43 – I fail to understand what is being questioned – I have been clear about my assessment of the case on misrepresentation. iv) 48 – it is clear from the judgment what my reasoning was and I do not understand why such a request is being made. v) 51 – a request that various documents be considered. Where I have referred to documents within the judgment I have done so because they were relevant to my reasoning. I do not refer to every document within the judgment.

[124]I hesitate to criticise Counsel within this judgment, but I do not consider that these requests are appropriate or necessary to enable the parties to understand the reasoning of my decision. I am of course aware of the decision of Munby LJ in Re A (children) (Judgment: Adequacy of Reasoning). I do not consider that my (lengthy written) judgment is defective for a lack of reasons, or that it is necessary to provide further reasons as sought by the Claimant. It is of course open to the Claimant to seek permission to appeal by judgment.