Popely v Heltfield Properties Ltd.& Ors

A claimant seeking to establish a beneficial interest under a resulting or constructive trust must prove the alleged contribution, agreement and surrounding facts on the balance of probabilities. Serious allegations concerning undocumented cash payments require cogent evidence. Where the claimant fails to establish the underlying trust, questions about notice, control of companies and the effect of later transfers do not arise. A party who uses an unrecorded cash transaction contrary to the legal documentation bears the evidential risk if the transaction later cannot be proved.

The claimant alleged that he and his brother had orally agreed to purchase land as a joint venture, each acquiring a half share. He relied on an alleged cash contribution and alternatively on an express common intention said to give rise to a constructive trust. The land was acquired through Maltcrown Limited and later transferred to Heltfield Properties Limited. The claimant alleged that the transfers were made without valuable consideration or with knowledge of his interest, and that a later transfer to Spacegain Limited was intended to defeat his claim.

The defendants denied any agreement or contribution and asserted that the claimant had gifted any interest to his son. The central issues were whether the claimant had acquired a beneficial interest, whether it survived the transfer to Heltfield, and whether a valid gift had been made.

1. Claim dismissed. The claimant failed to prove on the balance of probabilities that he and his brother had agreed to acquire the land jointly or that he had contributed the alleged purchase money. The resulting-trust and constructive-trust claims therefore failed.
2. The claimant's changing accounts, lack of documentary support and involvement in undocumented cash dealings meant that his evidence required corroboration. The alleged cash payment to the vendor was not established by cogent evidence. The judge observed that a person who participates in an unrecorded cash transaction contrary to the legal documentation bears the risk of being unable later to prove it.
3. The alleged gift to the claimant's son was not proved. The evidence did not establish a perfected gift within Law of Property Act 1925, s.53(1)(c).
4. Although unnecessary to the result, the judge addressed the alternative issues. Maltcrown appeared to have been controlled by Ronald, but the claimant had not established that Heltfield was owned or controlled by him. The claimant also failed to prove that the transfer to Heltfield was a sham or that the stated consideration had not been paid. The judge therefore relied on the presumption of regularity, which strengthened with the passage of time.
5. As no trust in favour of the claimant had been established, the issue whether Heltfield had notice of or was bound by such a trust did not arise. The claimant's caution at HM Land Registry was ordered to be vacated.