Analysis
The Respondent was originally the sole proprietor of 54 Beaulieu Close, Slough (‘Property’). The Appellant, who was one of her children, managed the family wholesale grocery business. He and his wife moved into the Property to live with the Respondent and spent money on its extension and refurbishment. On 12 October 2012 the Respondent made a new Will gifting a 25% share in the Property to the Appellant and giving him an option to purchase the whole on her death. On the same day the Respondent executed a Declaration of Trust by which she declared that she held the Property as to 75% for herself and as to 25% for the Appellant. Shortly afterwards, the Respondent proposed that the Appellant start the process of buying the Property from her and, on 30 July 2013, the Respondent transferred the Property to the Appellant, who executed a Declaration of Trust to the effect that he held the Property as to 25% for his mother and as to 75% for himself. The Appellant’s acquisition of a 50% share was partly by purchase of 25% and partly by gift of 25%. The Respondent now claimed that the transfer was made as a result of undue influence (presumed and actual), mistake and misrepresentation. She was successful before the First-Tier Tribunal whereby in a judgment dated 5 June 2017 it was held that the transaction had been vitiated by undue influence, but no decision was made as to mistake or misrepresentation. The Appellant appealed.
Held (allowing the appeal):
The First Tier Tribunal had erred in basing its decision on a finding that a relationship of trust and confidence existed between the parties – in relation to the transaction itself; Macklin v Dowsett was not authority for the proposition that the requisite relationship of influence will found a presumption of undue influence if it arises only in relation to the transaction itself. The requirements are sequential; for the presumption of undue influence to arise there must be a relationship of influence, whether as one of trust and confidence or one of vulnerability, and then a transaction. The reason for that is that the pre-existing relationship lays the claimant open to influence, so that all that is required for the evidential presumption to arise is a transaction that calls for an explanation. Accordingly, the appeal had to be allowed and the decision substituted that a presumption of undue influence did not arise.
Furthermore, if the judge had intended to make a formal finding that there had been actual undue influence, this was not supported by sufficient findings of fact and the appeal on this ground would be allowed. Alternatively, it was not possible to take the findings of the judge in the First Tier Tribunal on undue influence and retro-fit them into a decision on mistake as sought by the Respondent. The judge had expressly made no finding about mistake and therefore his decision could not be upheld on the basis that the transaction was vitiated by mistake because the Respondent did not understand that she was transferring the Property to the Appellant. Accordingly, the matter should be remitted to the First Tier Tribunal for re hearing on the issues of actual and undue influence, mistake and misrepresentation.
JUDGMENT JUDGE ELIZABETH COOKE: [1] This is an appeal by Mr Saleem Perwaz from a decision of the Land Registration Division of the First-tier Tribunal (‘the FTT’) dated 5 June 2017. The FTT directed the Chief Land Registrar, first, to cancel his application to remove from the title to his property a unilateral notice entered …Continue reading "Perwaz v Perwaz [2019] WTLR 275"