Family Law Hub

Agarwala v Agarwala [2013] EWCA Civ 1763

  • In brief: The appellant and respondent were sister-in-law and brother-in-law respectively. The property in question had been purchased as an investment.

    Both parties agreed that there had been an express oral agreement between them as to the terms upon which it had been bought and was to be held. The dispute related to the contents of that agreement, with the parties holding diametrically opposed positions, whereby each asserted 100% "all or nothing" ownership. 

    The trial judge had accepted the respondent's (Sunil), case that he had used his sister-in-law to obtain both the mortgage and the legal ownership because his own credit rating was poor, that she would be a bare trustee and that, in return, he would pay her a monthly salary.

    The appellant (Jaci) contended that the property was to be hers entirely. She was to receive income from a B&B business to be run from it by Sunil for which he would receive the benefit of being able to "farm out" excess bookings for his existing B&B at no cost.

    The appeal was based on ten separate grounds, dealt with in turn by Lord Justice Sullivan.

    In respect of the complaint that the judge had given insufficient weight to the presumption that the beneficial and legal interest should coincide, the appeal court found that the judge had had the presumption "well in mind" (having been clear that it was for Sunil to establish his case for beneficial ownership and demonstrate that he had acted to his detriment in reliance on the agreement). The judge had been right to focus on the principles. In a case of this nature, the "presumption" was, in any event, only the starting point.

    The trial judge had not wrongly reversed the burden of proof. The order in which he had heard the evidence mattered not. It was clear that, in the light of the approach he had taken in respect of the presumption, he had correctly placed the burden on Sunil.

    As to the argument that the judge had not attached sufficient weight to the mortgage (and remortgage) having been in Jaci's name, although in some cases, evidence of financial contribution could be a "vital source of evidence", in this instance (as it was agreed that it was a business venture) if Jaci was merely a conduit for payment derived from the business profits, the fact that the mortgage was in her name was of little help in determining beneficial ownership.

    The linked arguments, that the judge had erred by failing to consider whether the parties had indeed had a common intention (before considering its nature) and by making no finding that one existed, had no force. Both parties contended that there was a common intention – it was the nature, not the existence of this, that was at issue.

    As for the assertion that the judge had failed to have regard to specific pieces of documentary evidence said to support Jaci's case, the phraseology in the two letters cited was "far from conclusive", whilst the judge had been entitled to conclude that  the contemporary emails, taken as a whole, supported Sunil's account.

    The judge had not, moreover, erred by asking which account was more credible rather than asking whether Sunil's case was sufficient to displace the presumption that the legal owner was also the beneficial owner. His focus had been correct and this submission added nothing of substance.

    In respect of a forged trust deed (engineered and formerly relied upon by Sunil), the judge had not, as submitted, placed any weight upon its contents. It was clear from passages in his judgment that he had, however, given proper weight to the fact of it being a forgery when assessing the credibility of Sunil's account.

    Also complained of was the judge's alleged failure to give adequate reasons for preferring Sunil's account. The appeal court found that his reasons for so doing  were "perfectly intelligible" and included consideration of Sunil's past (similar) business conduct, the totality of the emails and the improbability of such an "unscrupulous and self- interested character" providing the appellant with a property and business at no charge.

    Finally, in respect of the question of "detriment suffered", the judge had recognised that it was necessary for Sunil to establish that he had relied on the agreement to his detriment. Although he had not dealt with this as a distinct issue, his judgment had to be read as a whole and in a "common sense way". He had set out the detail of the detriment claimed and was not required to repeat it "word for word". The judgment contained implicit acceptance of the detriment having occurred as well as clear reference to the applicable legal principles.

    Accordingly, the grounds of challenge were rejected and the appeal dismissed.

    Read the full text of the judgment here

Case note, published: 18/02/2014


Published: 18/02/2014


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