Smith v Andrew

A trial judge is entitled to determine the extent of a beneficial interest by applying the governing authority to the facts found, particularly where the claimant’s evidence has been rejected and the defendant’s evidence accepted. An appellate court will not interfere where the conclusion was plainly open on those findings and there was no misdirection of law. In exercising costs discretion, the court may consider settlement offers made before trial, including an earlier offer and the firmness of the rejection, even where the later offer allowed less than the usual period for acceptance.

The claimant sought permission to appeal from a decision of the Truro County Court concerning his claimed beneficial ownership of property renovated during a period of cohabitation. The county court held that he was entitled to a sum representing half the value added by his work and contributions, equivalent to a 26 per cent share of the property’s value. It also made an adverse costs order after taking account of settlement offers.

The claimant challenged both the valuation of his beneficial interest and the costs order. The Court of Appeal, on an oral renewal of the permission application, considered whether the judge had misapplied the law or exceeded his discretion.

1. Permission to appeal refused. The claimant’s application concerning the beneficial interest and costs order was dismissed.
2. The alleged concessions in cross-examination did not establish that the purchase itself had been a joint venture. The evidence supported the distinction between the joint renovation venture and the defendant’s control of the purchase.
3. The county court judge had rejected important parts of the claimant’s evidence and explained why he preferred the defendant’s evidence. On those findings, he was manifestly entitled to conclude that the claimant’s beneficial interest should equal one half of the amount by which his work and contribution increased the property’s present value.
4. Both parties had accepted that the determination was governed by Lloyds Bank v Rossett. The Court of Appeal found no misdirection in the judge’s application of that authority to the facts as found.
5. The costs challenge was also unarguable. The judge was entitled to consider the 12 November offer, the earlier August offer, the absence of correspondence responding to it and the firm terms in which the claimant rejected settlement. The fact that the later offer was made only 12 days before trial did not prevent those matters from informing the discretion.
6. The application for permission to appeal the order of Judge Neligan dated 21 November 2001 was dismissed. The order was: application for permission to appeal refused.

• Truro County Court: His Honour Judge Neligan awarded the claimant a sum equivalent to a 26 per cent share of the property’s value and made the relevant costs order.
• Court of Appeal (Civil Division): permission to appeal was refused and the application dismissed.