Hurndell v Hurndell & Ors (Court of Appeal decision)

The Court of Appeal considered whether 33,309,940 Stanelco plc shares registered in the appellant's name were an outright gift to him or held by him as nominee for Mr White. Key legal principles were the determination of donative intent, the weight to be given to contemporary documents and company disclosures (including the application of s.346 Companies Act 1985 for the meaning of "connected person" in the listing rules), and the effect of new evidence on findings of primary fact. The judge at first instance found the appellant held the shares as nominee, principally because he accepted the authenticity of a contemporaneous handwritten note (the "St Tropez Note") and the stock transfer forms, and disbelieved the appellant's oral evidence. The Court of Appeal majority admitted further evidence relating to the alleged August 2001 meeting and the provenance of the paper used for the note, concluded that the new evidence could undermine the trial judge's central credibility findings about that meeting and note, and ordered a retrial. The Chancellor (dissenting) would have dismissed the appeal, emphasising that, even if the St Tropez Note were set aside, the judge’s other findings (including contemporaneous documents and the position of Mr White) were sufficient to support the conclusion of nomineeship.

Background and procedural posture

The appellant, who was registered in February 2001 as the holder of 33,309,940 Stanelco plc shares, sued for their return and damages after those shares (except 1.5 million) were later transferred to companies connected with the first defendant's family and sold. At first instance David Richards J dismissed the claim, finding the appellant held the shares as nominee for Mr Howard White. Permission to appeal was initially refused but ultimately granted by the Court of Appeal. The appeal raised factual issues and applications to admit fresh evidence.

Nature of the claim

• The appellant sought declaration and recovery of the shares and damages for conversion, asserting beneficial ownership by way of gift or otherwise.

Issues framed

• Whether Mr White intended to give the shares to the appellant (donative intention) or whether the appellant held them as nominee.
• Whether the stock transfer forms transferring most of the appellant's shares were completed with his authority.
• Whether the handwritten "St Tropez Note" dated August 2001 was authentic and, if so, its effect on credibility and the primary findings.
• Whether fresh evidence should be admitted on appeal and, if admitted, whether it undermined the trial judge’s central findings so as to require a retrial.
• Whether the delay in the trial judge's reserved judgment had rendered that judgment unsafe.

Court’s reasoning and disposition

The court examined the trial judge’s detailed factual findings and his approach to credibility in light of mixed and unsatisfactory oral evidence. It applied authorities on delay in judgment and the circumstances in which an appellate court may admit fresh evidence. The Chancellor concluded that, notwithstanding some admissible fresh evidence, the trial judge had correctly found no donative intention and would have dismissed the appeal. By contrast, Pill LJ and Lloyd LJ (majority) held that certain fresh evidence (witness statements and documentary points addressing the August 2001 meeting and the provenance of the paper used for the St Tropez Note) was admissible and could materially affect the judge’s central credibility findings. Because the authenticity of that note and the events of 16 August 2001 were central to the judge’s conclusion that the appellant was a nominee, the majority ordered a retrial.

Practical note: the court emphasised the limited circumstances in which delay in delivery of judgment will render a judgment unsafe and the need for an appellant to show probable or possible attribution of error to delay before relief will follow.

Appeal allowed (majority). The majority admitted fresh evidence concerning the alleged August 2001 meeting and the provenance of the handwritten note and concluded that this evidence could materially undermine the trial judge’s central credibility findings on that meeting and the St Tropez Note, which were decisive for the finding of nomineeship. For that reason the majority directed a retrial. The Chancellor (dissenting) would have dismissed the appeal, reasoning that the overall documentary and circumstantial evidence and the absence of evidence of donative intent by Mr White supported the trial judge's conclusion that the appellant was a nominee.

Appeal from High Court, Chancery Division (David Richards J) HC05C01580. Permission to appeal initially refused by David Richards J and refused on paper by Carnwath LJ; Wall and Rimer LJJ later indicated permission should be granted; the full Court of Appeal heard the appeal and admitted some fresh evidence and ordered a retrial. Neutral citation: [2009] EWCA Civ 67.