Van Der Merwe v Goldman & Anor

Where joint settlors seek to set aside a settlement for mistake, the equitable rules governing a unilateral transaction apply where the other beneficiaries gave no consideration. A prior agreement between the joint settlors to create the settlement does not alter that analysis. Permission to appeal should be refused where the proposed point would not affect the result or lacks a realistic prospect of success. A leapfrog certificate requires the statutory conditions to be met, and the 14-day period under section 12(4) concerns the application, not the court’s determination. Costs should reflect the parties’ common position and the work caused by the intervening party.

This was a post-judgment decision following the court’s substantive judgment on 11 April 2016, concerning settlements made by the claimant and the first defendant. The court had ordered relief on the basis that the equitable rules in Pitt v Holt applied. HMRC, which had been added as a defendant after initially having no part in the proceedings, sought permission to appeal, a certificate for a direct appeal to the Supreme Court under the Administration of Justice Act 1969, and orders concerning costs.

The issues were whether the proposed grounds had a realistic prospect of success affecting the result, whether the statutory conditions for a leapfrog certificate were satisfied, and how the costs of HMRC’s involvement should be allocated.

1. Order and substantive basis. The court ordered the setting aside of the transfer of 24 March 2006 and the settlement and transfer of 27 March 2006. The central reasoning was that an application by joint settlors to set aside a settlement made in favour of themselves and another person should be treated in the same way as an application by one settlor to set aside a settlement in favour of that settlor and another. Where the other beneficiary gave no consideration, the transaction was unilateral and the beneficiaries were volunteers. A prior agreement between the joint settlors to make the settlement would not affect that conclusion.
2. Permission to appeal. Permission to appeal to the Court of Appeal was refused. The proposed arguments concerning a prior contract, the reasoning in paragraph [44] of the earlier judgment, and the boundary between contract and gift would not have provided a realistic prospect of success on a point affecting the result. The case was a clear one on the gift side of that boundary.
3. Leapfrog certificate. The court refused a certificate under section 12 of the Administration of Justice Act 1969. The proposed public-policy issue, based on the tentative possibility mentioned by Lord Walker in Pitt v Holt, had not been fully considered by the Court of Appeal or Supreme Court and this was not a suitable case in which to explore it. The criteria in sections 12(3)(b) and 12(3A) were not met. Section 12(4) imposed a 14-day limit for making the application, not for determining it.
4. Costs. HMRC was ordered to pay the claimant’s costs of the Points of Dispute, Points of Reply and Further Information, one-third of specified counsel’s trial fees, and the solicitor’s charges for attending the trial on 17 March 2006. There was no order as to the first defendant’s costs. HMRC should not pay two sets of costs because the claimant and first defendant were in the same position and the effective claim was brought jointly, or alternatively the claimant alone was entitled to relief.

The judgment was a post-judgment decision of the High Court (Chancery Division) following the court’s substantive judgment of 11 April 2016, reported as [2016] EWHC 790 (Ch). Permission to appeal to the Court of Appeal and a certificate for a direct appeal to the Supreme Court were refused.