Ahmed v Ahmed & Ors

Permission to appeal should be refused where the proposed grounds disclose no arguable error and the appeal would be hopeless. A finding that documents are shams depends on the parties’ common intention that the documents should not create the apparent legal rights and obligations. That intention may be inferred from the surrounding circumstances and from findings that apparent participants were acting as pliant objects of another person’s will. Where the first-instance judge has carefully examined the evidence, applied the relevant principles and reached findings supporting the sham conclusion, an appellate challenge based on a different understanding of the parties’ intentions will not be arguable.

The claimant brought a complex Chancery Division property dispute concerning ownership of, and rights in, several properties. The deputy judge held that leases affecting 35 Russell Road were shams and, alternatively, dispositions in breach of fiduciary duty which did not bind the claimant.

The fifth and ninth defendants sought renewed permission to appeal and a stay of execution. They argued that, even if others intended the leases to be shams, their own legal rights remained unaffected. The central issue was whether that argument disclosed an arguable ground of appeal.

1. Application dismissed. The renewed application for permission to appeal and for a stay of execution was refused. The appeal would be hopeless and no arguable ground had been shown.
2. The deputy judge had made detailed findings that the relevant dispositions were shams. The applicants relied on the principle stated in Snook v London & West Riding Investments Ltd [1967] 2 QB 786, that a sham requires a common intention that the acts or documents should not create the legal rights and obligations which they appear to create.
3. The argument that the applicants’ rights were unaffected because they might later resist pressure from their father was untenable on the findings made. The deputy judge had found that they were the pliant objects of their father’s will. In that context, the judge was entitled to conclude that they had no different intention from the other participants and that the apparent leases were not intended to create enforceable rights.
4. The deputy judge had addressed the issue clearly and fully, referring also to National Westminster Plc Bank v Jones [2001] 1 BCLC 1998 and Hitch v Stone [2001] STC 214. His judgment was clear, thorough and impeccable. The other proposed grounds were likewise not arguable.
5. There was no order for costs.

• Court of Appeal (Civil Division): renewed application for permission to appeal and for a stay of execution dismissed.
• Chancery Division: order made by Mr Nicholas Warren QC, sitting as a Deputy Judge of the High Court, on 1 March 2001, following a complex property dispute.