Polarpark Enterprises Inc v Allason

At a possession hearing under Civil Procedure Rules 1998, the court may decide the claim without directing a full trial where the defendant’s evidence is inherently incredible and has no more than a fanciful prospect of success. The assessment may be made from contemporaneous documents and the surrounding circumstances, without cross-examination.

Adverse inferences from a party’s failure to call witnesses arise only where there is a case to answer. Such inferences affect the relative weight of competing evidence; they cannot rescue evidence which is itself inherently incredible. A court may assume that the same documentary material would be available at trial where further documents are unlikely to be found.

The claimant sought possession of Croftdown, Berkshire, from the defendant, who had continued to occupy the property after his divorce. The defendant advanced claims to beneficial ownership, adverse possession and a lifetime right of occupation based on an alleged 1980 agreement.

The Master rejected all three defences and ordered possession and damages to be assessed. Permission to appeal was granted on the challenge to the rejection of the alleged lifetime right. The central issue was whether the Master was entitled to determine the possession claim under CPR 55.8 without directing a full trial because the defendant’s supporting evidence was incredible.

1. Appeal dismissed. The Master had applied the correct test under CPR 55.8. The question was whether the defendant’s evidence could properly be treated as incredible without cross-examination and the other procedures of a full trial: [1993] 1WLR 1453.
2. The defendant’s alleged lifetime right was irreconcilable with the contemporaneous documents. The instructions for preparing the trust deed and clause 10(e) demonstrated that the professional advisers were unaware of any such fundamental right. There was no suggestion that the documented tax-avoidance transaction was a sham. The defendant’s uncorroborated account therefore had no more than a fanciful prospect of succeeding at trial.
3. No adverse inference arose from the claimant’s failure to call Nicole Allason, Bank of Bermuda officers or the claimant’s directors. The hearing was directed to deciding whether a trial was necessary. Further evidence would have caused delay and expense, and the alleged right had only been supported by a witness statement served three days before the hearing.
4. The principles concerning absent witnesses, stated in Wisniewski v Central Manchester Health Authority and summarised in Fulham Leisure Holdings Ltd v Nicholson Graham & Jones, apply only where there is a case to answer. Inferences may strengthen one party’s evidence or weaken the other’s, but cannot compensate for evidence which is inherently incredible.
5. The probable loss of further historical documents did not require a trial. The proper assumption was that the same documentary fragment would remain available, and that fragment established the critical inconsistency. The defendant’s continued occupation after the divorce did not corroborate a contractual right, since the trustees could permit occupation for the benefit of the children.
6. The Master was, however, wrong to treat the alleged lifetime right as necessarily inconsistent with the defendant’s position in the divorce proceedings. He could have abandoned such a right to release funds for the children’s education. That error did not undermine the Master’s overall conclusion.

• High Court (Chancery Division): Appeal from the order of Master Moncaster dated 7 July 2006. The appeal was dismissed and the order for possession and damages to be assessed upheld.