Constandas v Lysandrou & Ors

A court may decide a disputed factual issue by reference to the burden of proof only after genuinely attempting to evaluate the evidence and concluding that it cannot reasonably make a finding. The judgment must make that endeavour and conclusion intelligible. An appellate court will not interfere where the trial judge could not rationally decide the issue either way.

A claimant alleging beneficial ownership different from legal ownership must prove the contribution relied upon. The defendant need not prove an alternative source of funds. Appellate courts exercise particular restraint before disturbing credibility findings. A costs order may depart from the usual rule where serious conduct makes that course a reasonable exercise of discretion.

The claimant alleged that he had paid £600, representing half the purchase price, when a family home was bought in 1959. Although the property was legally owned by the first and second respondents, he claimed a half beneficial interest through a resulting trust. The proceedings were brought under the Trusts of Land and Appointment of Trustees Act 1996.

HHJ Faber in the County Court at Central London found that the claimant had not proved that he made the payment. She dismissed the beneficial-ownership claim, awarded £250 for conversion of belongings, and made no order as to costs because of Michael Lysandrou’s conduct. The claimant appealed the dismissal. The respondents cross-appealed the costs order. The central issues were whether the judge could resolve the factual issue through the burden of proof and whether the costs discretion had been exercised properly.

1. Appeal dismissed. The judge was entitled to conclude that the claimant had not proved that he paid the 1959 down payment. The principles in Stephens v Cannon [2005] EWCA Civ 222 and Verlander v Devon Waste Management & Anr [2007] EWCA Civ 835 permit resort to the burden of proof only where, after examining and evaluating the evidence, the court cannot reasonably make the necessary finding. HHJ Faber had conscientiously evaluated the available documents and evidence, and explained why no reliable finding could be made.

2. The evidential problem was exceptional. The payment was made many years earlier, documents were sparse, the respondents could not give direct evidence because of dementia, and the judge rejected the claimant’s direct evidence as unreliable. The claimant bore the burden of showing that beneficial ownership differed from legal ownership. In the absence of reliable positive evidence that he made the payment, the judge was not required to make the respondents prove an alternative source of funds. She was entitled to decline the proposed inference that the funds must have come from the claimant’s account.

3. The court would not revisit the judge’s credibility assessment. Findings of primary fact founded on witness credibility attract strong appellate restraint: Biogen Inc v Medeva Ltd [1997] RPC 1. Reaching a contrary conclusion would require an impermissible piecemeal reassessment of the evidence. Although it was unfortunate that the judge had not raised with counsel the prospect of deciding by the burden of proof, the claimant identified no further evidence or submission that could have affected the result.

4. Cross-appeal dismissed. Under rule 44.2 of the Civil Procedure Rules 1998, the ordinary costs rule is subject to the court’s discretion in light of all the circumstances, including conduct. The judge was entitled to regard the fabricated assault allegation, use of the claimant’s confidential documents, and manner in which the litigation arose as serious rather than peripheral misconduct. Her no-order-for-costs decision was within the range of reasonable responses and required no appellate intervention.

• Court of Appeal (Civil Division) — dismissed the claimant’s appeal against dismissal of the beneficial-interest claim and dismissed the respondents’ cross-appeal against the costs order: [2018] EWCA Civ 613.
• County Court at Central London — HHJ Faber dismissed the claim to a beneficial interest because the claimant had not proved payment of the £600 down payment. She awarded £250 for conversion of belongings and made no order as to costs.