Wade v Baylis

Permission to appeal should be refused where the proposed grounds disclose no real prospect of success. A transfer of legal title from joint names to one owner may also transfer the transferor’s beneficial interest. A claimant seeking to establish a continuing beneficial share must prove an express agreement or facts from which a shared intention can properly be inferred. In assessing occupation rent and orders for sale of jointly owned property, the court may consider wider occupation and financial circumstances. Working together as a team does not, without more, establish a partnership. A party who accepts and retains a substantial benefit under an order may be refused permission to raise a belated challenge to it.

The claimant and respondent had lived together and acquired or operated assets during their relationship. After trial, Mr Recorder Gardner QC rejected the claimant’s claims concerning a beneficial share in Keyworth, a share in the Jigsaw Galore business and its assets, and an occupation rent in respect of Seaward. He ordered Seaward to be sold, subject to the respondent’s right to buy out the claimant’s share, and ordered the claimant to pay 80% of the respondent’s costs.

The claimant applied to the Court of Appeal for permission to appeal. He challenged factual findings and the treatment of the parties’ dealings with Keyworth, the refusal of an occupation rent, the Seaward sale order, the finding that Jigsaw was a sole-trader business, and the costs order.

1. Permission refused on all grounds. The proposed challenges to the Recorder’s factual findings and discretionary decisions had no real prospect of success.

2. On Keyworth, the 1986 transfer into the respondent’s sole name could be treated as transferring both the legal and beneficial interests. The Recorder was entitled to reject the claimant’s alleged express agreement that he would retain a 50% beneficial share. The claimant’s later concern that being restored to the title might expose the property to creditors supported the inference that he did not regard himself as retaining a beneficial interest. His subsequent work, alleged mortgage payments and improvements did not require an inference of a shared intention to retain such an interest. The burden remained on him to establish that case: [2007] UKHL 17; [2007] 2 AC 432.

3. The refusal of an occupation rent was within the Recorder’s discretion. If reconsidered, the claimant’s rent-free occupation of Keyworth, the £2,000 already paid and the anticipated receipt of his share in Seaward made a further award almost inevitably unjust. The approach was consistent with doing equity between the parties, as discussed in Murphy v Gooch [2007] EWCA Civ 603.

4. The claimant’s acceptance and retention of £50,000 paid towards the respondent’s purchase of his Seaward share effectively affirmed the buy-out order. It was unjust to permit a belated challenge to that order, and permission to add the new ground was refused.

5. On Jigsaw, even assuming no illegality prevented the claim, the finding that the parties worked as a team did not establish a partnership. The fact that the claimant was not an employee did not entail that he was a partner. The Recorder was entitled to find that the respondent remained the sole trader and solely responsible in law for the business liabilities.

6. The 80% costs order fell within the proper range of the Recorder’s discretion. Permission was therefore refused on the costs ground as well.

• Court of Appeal (Civil Division): Permission to appeal refused on all grounds. The application arose from the judgment and orders of Mr Recorder Gardner QC in the Torquay and Newton Abbot County Court, delivered on 22 January 2009.