Karsten & Anor v Markham & Anor

This is a renewed application for permission to appeal from the judgment of HHJ Raynor QC given on 17 December 2009 for a stay of his order and for the setting aside of a freezing order granted by the same judge on 14 January 2010. Permission to appeal was refused on the papers by Patten LJ. Mr Khan now appears before me to renew that application for permission to appeal.

The details of the case appear from the judge's judgment. Broadly, the appellant, Mr Markham, and the respondent, Ms or Mrs Karsten, entered into a relationship from about 1999 until 2005. During that time she transferred, to use a neutral word, the sum of £850,000 in various tranches, as recounted by the judge, to the appellant. She claimed at the trial that this was by way of a loan. The appellant said it was a gift.

The key question before the judge was which of those two stories was true. She relied upon certain documents, an Acknowledgement of Indebtedness of 17 August 2005 and a trust deed of 6 October 2005, to reinforce her claim that this was indeed no more than a loan. The judge believed her and gave thorough and completely convincing reasons as to why he did not believe the appellant. He saw the witnesses. There was ample material upon which he could make the findings that he did. Once it was established that this money was by way of a loan, all questions of undue influence and the like which had been ventilated simply go out of the window. Oddly, of course, normally in a case of undue influence it is somebody who has been induced to part with their money where the point comes into play. Here it was the respondent who parted with her money, and before you get to any question of whether the two documents were obtained by undue influence or not you have to examine why she parted with the money, and the judge has found that she parted by way of loan.

Mr Khan first sought to raise a point of actual undue influence. That was not pleaded and in any event would not be relevant given that the money was by way of a loan. Mr Khan took me to paragraph 133 of the judgment where part of the pleading is recited. It goes nowhere near pleading actual undue influence. The point is not available on an appeal even if it had been relevant.

The next point Mr Khan took was that even if it was a loan, there was no details of the contract of loan and, in particular, no requirement that the loan be repayable at any particular time. That seems to me to be utterly misconceived in law. A loan does not have to be by way of a contract. The proposition that when A lends money to B, if nothing is said about it A can never claim it back seems to me to be absolutely untenable. These were not contractual loans. They were never said to be contractual loans. They were just loans between lovers.

Next, Mr Khan suggested that the proceedings were unfair. He raised three points. First, he said that the litigant in person was not allowed to call a witness. What actually happened is recorded by the judge at paragraph 88. The appellant wanted to call a Mr Kingsbury, who was in fact a party to the proceedings. What the judge records is as follows:

No application was made to use the normal video link method was made. When the appellant did ask that Mr Kingsbury should give evidence by Skype it was impractical to do so because Mr Kingsbury had none of the documents and could not realistically be cross-examined. The judge also points out that Mr Kingsbury not only was a party to the litigation but that the trial window was fixed for his convenience and had elected not to come. That was an entirely proper exercise of judicial discretion in a case where already the defendant had been seeking adjournment after adjournment.

The next point of alleged unfairness is at paragraph 42 of the judge's judgment where the defendant had produced a document saying:

The claimant acknowledged that the writing looked like hers but did not accept it was a genuine document. The judge goes on to point out that the document was not referred to in the defence, a remarkable fact in itself if it was a genuine document existing at the time. Mr Khan suggested that it might have lead to the basis of an estoppel. You do not get as far as raising an estoppel unless first of all you raise the representation in your pleadings and then prove reliance upon it. Neither of those things happened. There was nothing unfair about the judge's treatment of this document.

Next, Mr Khan suggested that the judge had behaved generally more unfairly in an unparticularised way and took me to some correspondence from Mr Markham to the judge. That is not evidence of what actually happened. I asked Mr Khan whether he had any material to show the judge had behaved unfairly in some way or other. The best he could do was to say that his client had in his Appellant's Notice said that he had sought a transcript. Well, the judgment was given last December. There had been ample time to get the transcript. The suggestion that anybody is at fault other than the appellant for the transcript not being available is inconceivable. The plain fact is that it was not right or proper to accuse this judge of failure to behave judicially, of bias, when there was simply no material whatever to raise that allegation.

In the end this is a plain, straightforward case. The judge examined it in very careful detail. He heard and saw the witnesses and came to a firm conclusion that Mr Markham was not an honest man, had not given honest evidence and he had got this money from this lady and that he ought to pay it back. There is no realistic prospect whatever of the Court of Appeal coming to any other conclusion. I dismiss this application.