Ghassemian v Tigris Industries Inc

Property – Declaration of trust – Authenticity – Appellant seeking to register title to land by adverse possession – Court refusing application and making final charging order – Permission to appeal being refused – Appellant appealing against decision of master enforcing final charging order by ordering a deferred sale of property – Whether court erring in placing burden of proof on appellant to establish authenticity of declaration of trust – Appeal allowed. The appellant appealed against the order made by a master enforcing a final charging order by ordering the deferred sale of a property in West London. The appellant’s son had conducted proceedings in her name. In December 2011, the respondent issued a CPR Part 8 claim to enforce the charging order. Prior to the hearing, solicitors acting for the appellant sent to the respondent photocopies of a declaration of trust dated June 1986, which was apparently unstamped but recited that a lease of the property had been granted to the appellant in her capacity as a trustee. The copy of the declaration of trust included a back sheet, which appeared to show that it had been prepared by a firm of solicitors. A dispute arose as to the authenticity of the declaration of trust. The appellant filed further evidence, including a transcript of a judgment given by a district judge in earlier proceedings brought by a bank in 1995 against the appellant. Part of that judgment referred to: (i) a letter written by the solicitors in 1995, which said that it had drafted the declaration of trust and held the original on their file; and (ii) evidence from the landlords of the property that they held a copy of the signed declaration of trust received under cover of a solicitor’s letter dated 8 July 1986. However, the master was not satisfied that the declaration of trust was what it purported to be and concluded that it was more likely that it had come into existence near to the 1995 proceedings. In any event, the master found that the document was a sham. An appeal by the appellant proceeded on the footing that the 1986 letter was not before the master. The appellant argued, amongst other things, that the master had: (i) erred in placing the burden of proof upon her; and (ii) given insufficient weight to parts of the evidence, including the judgment of the district judge, which was at least evidence that the document in question was being referred to in 1995. Held: The appeal was allowed. (1) The burden of proof on the Part 8 claim lay upon the defendant to show that it was entitled to an order for sale. It discharged that burden by showing (i) that it had the benefit of the charging order against the property and (ii) that the property was registered in the name of the claimant, the form of registration (being in a sole name without any restriction or notice) giving no hint of any trust and entitling it to rely upon the presumption that equity followed the law and that the beneficial ownership was identical with the legal ownership. Assuming that she was permitted to make a collateral attack on the charging order an evidential burden lay upon the appellant to adduce material to undermine that prima facie case. An evidential burden lay on her to prove that she was a bare trustee by producing the declaration of trust. Simply producing a photocopy proved nothing, unless it was admitted to be genuine. The authenticity of that document was put in issue, laying an evidential burden upon the claimant to adduce evidence as to the authenticity of the document of such quality as to prevent the defendant persuading the court that, on the balance of probabilities, the property beneficially belonged to her. Such was the strength of the presumptions deriving from the charging order and the form of registration that she had to show that the declaration of trust was probably authentic. The judgment of the master did not suggest that he misunderstood where the burden of proof and the shifting evidential burden lay. His holdings were all consistent with a correct application of the burden of proof and the evidential burden: Pall Mall Investments v Camden London Borough Council [2013] EWHC 459 (Admin) considered. (2) The parties had required the master to make a decision on written material and had to live with the difficulties thus caused. The master had been left to puzzle over what amongst the various photocopied documents he felt he could trust and what he felt was doubtful, knowing that the claimant had declined to be cross-examined upon the doubtful questions. He approached that task with evident care and decided, notwithstanding the absence of any case that it was forged, that he was not persuaded as to the authenticity of the declaration of trust. This was an evaluation requiring different factors being weighed the one against the other. The court had a strong impulse to uphold his judgment because the whole conduct of the litigation by the claimant had been disgraceful, the decisions of masters on Part 8 claims were not as a matter of policy to be treated as open to appeals on fact. Moreover, the nature of the decision was an evaluative one, not the exercise of a discretion but of a complex nature where a similar approach might be justified: see Assicurazioni Generali SpA v Arab Insurance Group (BSC) [2002] EWCA Civ 1642. (3) Questions of weight were for the trial judge. In complex evaluative decisions the question for the appeal court was whether it could identify evidence which the trial judge failed to take into account in his evaluation, or some element that was wrongly taken into account, or whether the outcome was so plainly wrong that such an error must have been made. However, given that the 1986 solicitor’s letter referring to the declaration of trust and considered by a district judge in the earlier proceedings had not been before the master, the troubling point on appeal was whether he had taken it into account in reaching his conclusion as to the authenticity of the declaration. In the circumstances, the master had been bound to address what the district judge had said since, if the document was not drafted by the solicitor and not executed, a question arose as to why the district judge had referred to it. Accordingly, the court felt constrained to allow the appeal and remit the issue for trial before a master with oral evidence. Jonathan Upton (instructed by Housing and Property Law Partnership Solicitors) appeared for the appellant; Kevin Leigh (instructed by Ashfords Solicitors) appeared for the respondent.   Eileen O’Grady, barrister   Click here to read transcript: Ghassemian v Tigris Industries Inc