Amanda Wade & Anor v Mohinder Singh & Ors
[2024] EWHC 1203 (Ch)
Julie Palmer & Anor v Daniel Sans
8 November 2024
[2024] EWHC 2685 (Ch)
High Court
A bankrupt transferred a house to his friend. The bankrupt's trustee said the transfer was illegal. The friend said there was an agreement that he owned the house all along. Even though there was no written agreement, the judge believed the friend because of the friend's actions (paying the mortgage, giving a car, and living in the house for years without paying rent). The judge decided the friend owned the house.
Key Facts
- •Shaun Collins (Bankrupt) transferred a property (Flat 2, Chestnut House) to Daniel Sans on 20 December 2021.
- •The Trustees in Bankruptcy challenged the transfer under section 339 of the Insolvency Act 1986.
- •The main issue was whether Collins held the property on trust for Sans since its acquisition in 2013.
- •The property was initially purchased from Collins' grandmother, Ms Newby, with a mortgage from Barclays.
- •There were discrepancies in the purchase price and the transferee named in various documents.
- •Sans claimed an oral agreement with Collins establishing a trust, with Sans making mortgage payments and providing a car as consideration.
- •There was limited documentary evidence supporting Sans' claim.
- •Sans did not attend the trial.
Legal Principles
To establish a constructive trust, there must be a common intention and detrimental reliance on that intention.
Thandi v Sands and Appleyard [2014] EWHC 2378 (Ch), citing Stack v Dowden [2007] UKHL 17
In commercial cases, courts should place little reliance on witnesses' recollections of oral agreements and base findings on documentary evidence and probable facts.
Gestmin v Credit Suisse [2013] EWHC 3560 (Ch)
The onus is on the person asserting a beneficial interest different from the legal interest to prove it by convincing evidence.
Thandi v Sands and Appleyard [2014] EWHC 2378 (Ch)
Outcomes
The court found that the property was held on a constructive trust for the benefit of Mr Sans.
The court considered various factors, including the undervalue sale price, Sans's mortgage payments, the transfer of the Audi car, and the fact that Sans's family lived in the property rent-free. Despite the lack of contemporaneous documentation, the judge found Collins' testimony credible and believed that the circumstances supported the existence of an oral agreement creating the trust.
The section 339 application concerning the transfer and charge was dismissed as moot.
The court's finding of a pre-existing trust rendered the challenge to the transfer and the charge irrelevant.