Ali v Dinc
Court of Appeal
Citations: [2022] EWCA Civ 34.
Facts
Ali was the sole proprietor of two properties: No.19 Trent Gardens and No.67 Geldeston Road. The first he used as his home, while the second was a rental property. In 2016, Ali transferred both properties to Dinc. Dinc did not pay consideration for the properties, but did pay off a charge affecting No.19. He then gave a registered legal lease of 67 Geldeston Road to his brother and a charge to Charter Court Financial Services for £460,000 (which Dinc spent).
In 2018, Ali sued Dinc. He argued that he had transferred the properties to Dinc pursuant to an oral agreement whereby Dinc would pay off the charge affecting No 19 and pay Ali £1.35 million. Ali had never received the money.
Dinc denied there was any such agreement. Instead, he argued that the claimant had agreed to gift the properties to him on the understanding that Dinc would use the properties to raise funds which he would then give to Ali. Dinc argued that the parties had agreed that if anything went wrong with this plan, Dinc would keep the properties absolutely.
The High Court held that the parties made a binding agreement, but not on the terms which either party asserted. However, it was not possible to be completely certain as to the agreement’s terms:
- The parties had agreed Dinc would pay Ali some amount of money by using the properties to raise funds.
- It was unclear how much money.
- The parties had not agreed that Dinc would get to keep the properties if the plan failed.
Since it was clear that Ali had transferred the properties for a specific purpose (raising an unknown amount of funds), Dinc held the properties on Quistclose trust. This trust took priority over the brother’s lease, but not Charter Court Financial Services’s charge.
Issue(s)
- Did the judge adopt an inappropriately inquisitorial approach by rejecting both party’s claims as to what they had agreed?
Decision
The Court of Appeal upheld the High Court’s assessment of the facts. The High Court’s conclusions were based on a combination of facts which were either undisputed or found in one or both parties’ pleaded cases.
This Case is Authority For…
A judge is not required to accept or reject a witness’ testimony in its entirety.
Other
A literal interpretation of s.60 of the Law of Property Act 1925 seems to abolish the presumption of resulting trust for land transfers. However, in the High Court in this case, judge Sarah Worthington QC denied that the provision had this effect. The Court of Appeal did not comment on this point.
