Analysis
Mr Davis employed Mr Wiggett in his building business from 2007 to 2011. According to Mr Wiggett, they had a common intention to purchase a flat, do it up and let it out. As he already had a mortgage, 68b Queen’s Road, Cheltenham (the flat) was bought in Mr Davis’ sole name for £137,500 in 2008 and, by virtue of their express agreement, on which he relied to his detriment by contributing to the purchase price and working on the property, Mr Wiggett claimed to be a beneficial co-owner under a common intention constructive trust and entitled to half of the equity. Mr Davis, on the other hand, said that the flat was his but that Mr Wiggett did some work on it and paid for some materials, eventually being repaid out of rental receipts credited to a joint account. Mr Wiggett applied for restrictions to be entered on the register of title to the flat to protect the beneficial interest that he claimed in it. When Mr Davis became aware of the restrictions, he applied for them to be cancelled. Mr Wiggett objected and in due course applied to the Land Registration Division of the First-tier Tribunal (the FTT). Mr Wiggett, who was unrepresented at the hearing before the FTT, gave oral evidence that he had made contributions to the mortgage payments on the flat by means of deductions from the wages paid by Mr Davis. The FTT accepted the evidence of Mr Wiggett, preferring it to the evidence of Mr Davis, and decided that there was common intention constructive trust, arising from the express agreement on which Mr Wiggett relied to his detriment, and that the parties owned the flat 50/50. The FTT accordingly directed the Registrar to cancel Mr Davis’ application to remove the restrictions on 4 December 2014. Following the decision, Mr Davis sought to have new evidence admitted, largely in the form of wage slips and bank statements, and requested the FTT to review its decision. The FTT refused to review its decision on 21 January 2015. Mr Davis then sought permission to appeal to the Upper Tribunal but this too was refused by the FTT on 9 March 2015. Permission to appeal was granted by the Upper Tribunal on 9 December 2015.
Held (allowing the appeal)
Mr Davis’ principal ground of appeal was on the basis that the FTT should have allowed him to adduce the fresh evidence. The FTT had refused to admit it after the hearing on the basis that the evidence could with reasonable diligence have been made available at the hearing and therefore should not be adduced later. So far as the bank statements and other material were concerned, this remained the case and could not now found a successful appeal. The wage slips, however, presented a more difficult problem. According to Mr Davis, they had nothing to do with the present dispute, being repayments for materials which Mr Wiggett had bought for himself using the credit card he was allowed to use as Mr Davis’ employee. As he was not forewarned of the evidence which Mr Wiggett gave at the hearing, he had not produced them to rebut that evidence. The criteria laid down in Ladd v Marshall [1954] 3 All ER 745 on the admission of new evidence on appeal were principles, or guidance, rather than rules and the appeal court’s discretion had to be exercised in accordance with the overriding objective of doing justice. There was sufficient authority to demonstrate that fresh evidence should be admitted when to refuse it would affront common sense or a sense of justice. Accordingly, the appeal would be allowed on the ground that the FTT’s decision was made without the benefit of crucial evidence. In addition, the reasons articulated by the FTT in its original decision and in the two subsequent decisions presented, together, a confusing picture. At the very least, the reasoning with respect to the deposit required to be articulated, and the overall impression was contradictory. As such, the contradiction made it impossible to see the basis of the decision as to Mr Davis’ reasoning and intentions at the time of the purchase. Accordingly, this ground too was sufficient to allow the appeal. Five other grounds were relied on, but none of them would have justified allowing the appeal. In conclusion, therefore, the decision of the FTT should be set aside and the matter remitted for rehearing. For this purpose a further direction was made requiring the Chief Land Registrar to restore Mr Davis’ application for cancellation of the restrictions entered by Mr Wiggett on the register of title to the flat.
JUDGMENT COOKE, J [1] Luke Davis is the registered proprietor of 68b Queen’s Road, a flat in Cheltenham; it was bought in 2008 for £137,500. In 2010 Wayne Wiggett applied for restrictions to be entered on the register of title to the flat to protect the beneficial interest that he claims in it; in 2011 …Continue reading "Davis v Wiggett [2016] UKUT 358 (TCC)"