Gelley & Ors v Shepherd & Anor

This is an appeal from an order made by His Honour Judge Walton, sitting as a Judge of the High Court, on 2 November 2012 after a four day trial in April 2012 of two preliminary issues and resumption of the hearing on those issues on 10 September 2012 and 2 November 2012. The appeal is brought by Robert Gelley, the First Defendant (“Mr Gelley”), Collect Investments Limited, a company incorporated in the British Virgin Islands and the First Part 20 Claimant (“CILBVI”), and Comvecs Intell Limited, the Second Part 20 Claimant (“Comvecs”). Mr Gelley’s wife, Susan Gelley (“Mrs Gelley”), is a director of Comvecs with authority to manage its affairs and also claims to be entitled to act on behalf of CILBVI. The Respondents are the Claimants in the action (“Mr Shepherd” and “Albert Hill Skip Hire”, respectively). The proceedings concern land at 630 Whessoe Road, Darlington, County Durham (“the Land”).

Although the Appellants were represented by Counsel below and had the assistance of (different) Counsel in drafting their grounds of appeal, they were not so represented at the hearing in this Court. Instead, Mrs Gelley presented the argument for them on the appeal. It was clear that she had devoted a lot of care and effort to preparing for the appeal, and it is right to record that she presented the argument for the Appellants in an articulate and measured way.

The Respondents are in occupation of the Land. The two preliminary issues determined by the judge were directed to resolving rival claims in respect of the Land by Mr Shepherd (who claimed to have a tenancy of the land, alternatively a superior right to be in possession of the land by comparison with the rights of other parties) and by CILBVI and Comvecs (who, acting by Mrs Gelley, claimed to be owners of the Land and entitled to possession of it). Another part of the proceedings relates to a claim in conversion (wrongful interference with goods) by the Second Respondent against Mr Gelley and a company acting on his instructions, the Second Defendant (“Nor-Dem”, which is not a party to this appeal). In large part, the outcome of the claim in conversion will depend upon whether Mr Gelley and Nor-Dem were properly authorised by CILBVI to take possession of the Land from the Respondents on about 14 April 2010. In the course of doing so they seized and removed goods of the Second Respondent, comprising a significant number of skips and industrial bins located on the Land.

Mrs Gelley’s father, Mr Blair, was a businessman with various interests. He set up a number of English and offshore companies as vehicles for his business activities, several of them with the name Collect Investments Limited. These included a Panamanian company (“CIL Panama”, incorporated in 2002) and CILBVI. In the 1960s he acquired the Land, which had an office located on it and a large open area which came to be used for breaking up building waste known as hardcore.

The judge found (para. [61]) that CILBVI became owner of the Land in 1996 and that it was the entity registered by the Land Registry as the proprietor of the Land at that time. There is no appeal in relation to this.

However, as emerged in the course of the trial, in 2001 CILBVI was dissolved, having been struck off the register of companies in the British Virgin Islands (“the BVI”) in 1991, presumably because it appeared to have become dormant and failed to comply with local reporting and regulatory requirements.

Mr Blair continued to use the Land. However, he relocated his main residence to Portugal and had less direct oversight of what was happening in relation to his business interests in the United Kingdom.

In 2007 Mr Blair and Mr Shepherd entered into an arrangement whereby Mr Shepherd (and his company Albert Hill Skip Hire) would have use of the Land in return for providing assistance to Mr Blair in respect to certain planning issues he had with the local authority, Darlington Borough Council (“the Council”). An important issue at trial was whether the arrangement involved the grant of a lease or only a licence to Mr Shepherd. Mr Shepherd claimed that Mr Blair had agreed that he should have a five year lease, but the judge found (paras. [64]-[74]) that it was only agreed he should have a licence. The agreement was that he could remove the existing hardcore on the Land and use it to level the site and sell any not so used.

The judge found that Mr Shepherd began using the Land in ways going outside what he was entitled to do under the licence. In breach of the agreement with Mr Blair, he used the Land as a general landfill site, dumping waste on it (para. [71]).

Mr Blair, acting through solicitors, Row and Scott, sent a letter dated 15 December 2008 terminating the licence and requiring Mr Shepherd to quit the Land within seven days (“the termination letter”). There was some confusion regarding the entity on behalf of which the letter was sent. Mr Blair seems by this stage to have lost sight of the fact that the Land was owned by CILBVI, which had been dissolved, and thought it was owned by CIL Panama. Despite this, the judge found that the termination letter was effective to terminate the licence (paras. [75]-[76]). There is no appeal in respect of this. From about 22 December 2008, therefore, Mr Shepherd and Albert Hill Skip Hire were trespassers on the Land.

However, they did not leave the Land. They went on in occupation and continued to use it as a waste disposal site, in breach of planning controls. Very large quantities of waste have been dumped there.

On 25 August 2009, the Council issued an enforcement notice under the Town and Country Planning Act 1990 in relation to the Land, which included a requirement that the Land be reinstated to its condition immediately before the breaches of planning control took place. That obligation could be very expensive to comply with, since it would require removal of all the landfill waste dumped on the Land by Mr Shepherd. The notice was served on Mr Shepherd and also on Mr Blair, for the owner of the Land. On 27 August 2009, the Council issued a temporary stop notice under the 1990 Act, addressed to Mr Shepherd, requiring him to cease this activity. On 13 November 2009, the Council issued a final stop notice.

The Respondents’ activities on the Land still did not cease. Eventually, the Environment Agency brought criminal prosecutions against them in relation to their operation of an unauthorised waste disposal site at the Land. On 21 August 2012, Mr Shepherd and Albert Hill Skip Hire were convicted at Teesside Crown Court of eight counts of offences of acting contrary to environmental regulations. They have entered appeals against their convictions.

Meanwhile, Mr Blair, who was very elderly, tried to take steps to recover the Land from Mr Shepherd. On 7 September 2009 he commenced possession proceedings in the name of CIL Panama, but they were not ultimately pursued and were struck out. In the course of researches for the purposes of this action, it emerged that CILBVI (now dissolved) was likely to be the true owner of the Land.

Mr Blair died on 13 November 2009, leaving his two daughters, Mrs Gelley and Mrs Cail, to inherit his estate under an intestacy. This complicated the steps to be taken in seeking to remove the Respondents from the Land.

Mrs Gelley was originally appointed as sole administrator of Mr Blair’s estate under a grant of probate in a letter of administration dated 10 January 2011. However, on 27 October 2011 new letters of administration were issued appointing Mrs Gelley and Mrs Cail as joint administrators of Mr Blair’s estate.

Before these events, however, Mrs Gelley was concerned that steps should be taken to remove the Respondents from the Land, so as to stop them from continuing to use it as a waste disposal site and thereby increasing the possible eventual cost to the true owner of the site of restoring it in compliance with the enforcement notice issued by the Council. What the judge described as “something of a wrestling match over possession of the Land” took place (paras. [22]-[27]). On about 7 April 2010 a letter in the name of Mrs Cail, but not signed by her, was sent by Mr and Mrs Gelley to the Respondents on behalf of CILBVI (para. [22]). The judge found that Mrs Cail had not authorised the sending of this letter and had not agreed that Mr Shepherd should be given notice to leave the Land (para. [56]). There is no appeal in relation to these findings.

On 14 April 2010, Mr Gelley, acting on instructions from Mrs Gelley, refused Mr Shepherd access to the Land, save to remove equipment there (para. [23]). On 19 April 2010 Nor-Dem removed items of the Respondents’ property from the Land (a number of skips and industrial bins) to take them into storage elsewhere (para. [24]). However, the same day Mr Shepherd managed to gain access to the Land again and continued using it as a waste disposal site as before.

With a view to assisting in removing the Respondents from the Land, Mrs Gelley arranged for Comvecs to be incorporated on 13 April 2010. She and her family held a four fifths interest in Comvecs, with Mrs Cail having only a one fifth interest (para. [29]). Although at the hearing in this Court Mrs Gelley said that there had been a change in the ownership of Comvecs so that she and Mrs Cail were equal joint owners of it, no evidence was adduced to support that contention.

Having formed Comvecs, Mrs Gelley then purported to effect a transfer of the title in the Land from CILBVI to Comvecs on 8 June 2010 for a consideration of £1 (“the Comvecs transfer”), and applied for Comvecs to be registered by the Land Registry as the new proprietor of the Land. The judge found that Mrs Cail did not authorise or approve the formation of Comvecs or the transfer of title in the Land to it (paras. [49]-[51]). He found that the purpose of the transfer was to defeat Mr Shepherd rather than being for any possible benefit of CILBVI; that it had been made by Mrs Gelley without authority from CILBVI as she was not a director of that company; and that the transfer, whereby CILBVI was divested of its only asset at a gross undervalue of £1 without authority, was tainted by fraud (paras. [49]-[51]). There is no appeal in respect of these findings.

Before it would register Comvecs as proprietor of the Land, the Land Registry asked for confirmation that CILBVI was an extant company. By letter dated 29 June 2010 from Row and Scott, on the instructions of Mrs Gelley, the Land Registry was sent documents which purported to be a certificate of incumbency dated 20 April 2010 (which appeared to be an official confirmation by CILBVI’s registered agent in the BVI that, as at that date, CILBVI was in existence and in good standing) and a notarial certificate which purported to authenticate that certificate. It emerged from further material which came to light shortly before the judge was scheduled to hand down his judgment in May 2012 that both certificates were likely to have been forged, and the judge so found. I refer to these documents as “the forged certificates”. The Land Registry was satisfied on the basis of the forged certificates that CILBVI was an extant company, and proceeded to register Comvecs as the new proprietor of the Land with effect from 30 June 2010.

The judge found that the overwhelming probability was that the forged certificates were produced by someone for use in the process of transferring the Land to Comvecs then registering it (para. [37]) and that this had been done by Mrs Gelley or with her authority (paras. [38]-[39]). There is no appeal against these findings.

On 22 June 2010 Nor-Dem, acting on instructions from Mrs Gelley, again secured the Land and barred the Respondents from it. On 26 June 2010 Nor-Dem started removing further equipment of Albert Hill Skip Hire from the Land.

Over the same period, Mrs Gelley negotiated with the Council regarding the breaches of planning control at the Land. The Council appears to have been re-assured by the expulsion of the Respondents from the Land and the willingness of Mrs Gelley, for the owners of the Land, to address its planning concerns, with the result that on 7 July 2010 the Council granted full planning permission for the Land to be used for waste disposal activities, on certain conditions.

The present action was commenced by Albert Hill Skip Hire on 24 August 2010, claiming against Mr Gelley and Nor-Dem in respect of wrongful interference with its property at the Land. On 7 October 2010 Mr Shepherd issued a claim against Mr Gelley and Nor-Dem for possession of the Land. In these proceedings Mr Shepherd claimed that he had a leasehold interest in the Land and that, in any event, he and (acting with his authority) Albert Hill Skip Hire were entitled to be in possession of the Land as against Mr Gelley and Nor-Dem and damages in respect of interference with that possession and with their goods. Mr Gelley and Nor-Dem entered a Defence, denying that the Respondents had or have any right to possession of the Land.

In January 2011, Mrs Gelley made an application to the Court in the BVI for an order restoring CILBVI to the companies register there. Originally, she made her application purporting to be a director of CILBVI and in that capacity. She signed an affidavit in support of the application in which she stated that she was a director of CILBVI, having been appointed to that post by a directors’ resolution dated 28 July 2007, which was exhibited to the affidavit. This purported to be a resolution of a meeting of the board of directors of CILBVI held on that date, attended by Mr Blair and his wife, Mrs Gelley and her son Ryan, which appointed Mrs Gelley and Ryan as directors of CILBVI. After careful consideration, the judge concluded that this document also was not genuine (paras. [41]-[48]). I refer to this as “the false resolution”. The judge therefore concluded that Mrs Gelley was not a director of CILBVI and had no authority to act on its behalf (para. [48]). There is no appeal against these findings.

In her affidavit for the BVI court, Mrs Gelley did not reveal that she had formed Comvecs and arranged for the transfer of the Land from CILBVI to Comvecs for £1. Instead, she said that she urgently needed to respond to the proceedings against Mr Gelley and to seek the restoration of CILBVI in order to defend the proceedings with respect to the Land: this was true, but only part of the truth. She also said that the company had been struck off the register because Mr Blair had been its sole liaison with its registered agent in the BVI, and that as a result of his death in November 2009 “the chain of contact was broken and no information was received to indicate that licence fees were in arrears or that the company had been struck off.” This account was not accurate, but the inaccuracy was obvious on the face of the affidavit, which also disclosed that CILBVI had been struck off the register in 2001.

It appears that the application to the BVI court came on before the relevant judge, Bannister J, in December 2010 and that he pointed out that Mrs Gelley could not be making the application in her capacity as a director of CILBVI, since it had been dissolved before the date of her purported appointment pursuant to the false resolution. The claim in the BVI was amended to show that Mrs Gelley was seeking the restoration of the company in the capacity of personal representative of Mr Blair, the deceased shareholder in CILBVI. The amended claim was accompanied by an affidavit by Mrs Gelley’s lawyer in the BVI, exhibiting the letter of administration dated 10 January 2011 granting probate to Mrs Gelley (which included the formal rubric that the grant was limited to the purpose of “collecting, getting in and receiving the estate”).

The amended claim in the BVI was re-presented to the court and by order dated 11 January 2011 made by Bannister J (“the January 2011 Order”), the dissolution of CILBVI was rescinded and it was restored to the companies register. Paragraph 4 of the order stated, “The Company [CILBVI] is deemed never to have been dissolved or struck off the Register of Companies.” There was uncontroversial evidence at trial from a lawyer with relevant expertise in the law of the BVI that, according to the law of the BVI, this order was effective to achieve what it stated.

In his judgment, His Honour Judge Walton held that the January 2011 Order was “tainted by fraud” by reason of mis-statements by Mrs Gelley to the BVI court in seeking the restoration of CILBVI. On the basis of a concession made by counsel for the Defendants and Part 20 Claimants as to the applicable law (para. [53]), he held that the effect of this was that the January 2011 Order restoring CILBVI did not take effect in England, with the result that “Neither Mrs Gelley, nor for that matter Mrs Cail, could give notice to Mr Shepherd to quit the site on behalf of CILBVI because the restoration of the company to the register in the BVI is of no effect within this jurisdiction and so CILBVI was at all material times dissolved” (para. [54]).

The material mis-statements identified by the judge (paras. [52]-[53]) were that Mrs Gelley had said in her affidavit that she was making the application as director of CILBVI; that “the restoration was not, as claimed, to gather in the assets of Mr Blair’s estate”, as the Land had already been transferred away from the company so this was not the purpose of the restoration; that in her affidavit Mrs Gelley said she had taken no steps on behalf of CILBVI whereas she had already purported to transfer its asset, the Land, to Comvecs; that Mrs Gelley stated that she needed to defend the claims, but there was no claim against CILBVI in the proceedings; and she said that the striking off came about because the chain of contact with the registered agent was broken by the death of Mr Blair in 2009, whereas CILBVI had been struck off and dissolved since 2001. The judge found that the effect of these mis-statements was to cover up the fact that Mrs Gelley had transferred CILBVI’s only asset to another company for her own purposes without authority (para. [53]). The Appellants appeal in relation to these findings and in relation to the judge’s conclusion at para. [54] of the judgment.

By amendments to the Defence dated 30 March 2011, Mr Gelley and Nor-Dem pleaded that the Land had been owned at all material times by CILBVI then Comvecs, that by virtue of the January 2011 Order CILBVI had been restored to the companies register and that all transactions entered into or purportedly entered into by CILBVI up to the date of that order were rendered valid and effective from the dates they were entered into and that on about 14 April 2010 Mr Gelley, instructed by Mrs Gelley acting on behalf of CILBVI, had taken possession of the Land. It was pleaded that Mr Blair only agreed to Mr Shepherd going into possession of the Land pursuant to a licence, not a tenancy, and that Mr Blair had terminated the licence agreement by the termination letter in December 2008. It was admitted that goods of the Respondents had been seized, removed from the land and taken into safe-keeping.

By further amendments to the Defence dated 19 April 2011, CILBVI and Comvecs were added as Part 20 Claimants, each counterclaiming (depending on the view the court might ultimately take about the effect of the Comvecs transfer) for possession of the Land, a declaration that Mr Shepherd does not have any right to possession of the Land and an order requiring Mr Shepherd to remove a unilateral notice registered against the title to the Land with the Land Registry in respect of his claim to be entitled to a tenancy of the Land.

The trial resulted in a draft judgment prepared by the judge in May 2012. Shortly before handing it down, however, the Respondents came forward with new evidence which indicated that the forged certificates were forgeries. The judge admitted this evidence and re-opened the hearing. At the resumed hearing on 10 September 2012 the parties made detailed submissions in light of the new evidence, regarding the findings the judge should make and the legal analysis to be applied. Unsurprisingly, the new evidence caused the judge to re-evaluate his assessment of Mrs Gelley, in particular, as a witness. As a result, he made the findings referred to above in respect of her conduct.

By his order of 2 November 2012, the judge, amongst other things, made declarations and orders at paragraphs 3 to 6 and 9 as follows:

“3)

On the first preliminary issue, ‘whether [Mr Shepherd] is entitled to possession of [the Land] or alternatively whether one or other of the Part 20 Claimants [i.e. CILBVI or Comvecs] is entitled to possession of the Land?’, that [Mr Shepherd] is entitled to possession of the Land; the Part 20 Claimants are not and never were entitled to possession of the Land.

4)

On the second preliminary issue, ‘whether [Mr Shepherd’s] right to possession (if any) was lawfully terminated and, if so, when?’, that [Mr Shepherd’s] right to possession was terminated by letter from Row and Scott on behalf of Mr Blair to [Mr Shepherd] dated 15^th December 2008 but his right to possession remains superior to that of the Part 20 Claimants even though he is a trespasser.

5)

It is declared that the transfer of the land from [CILBVI] to [Comvecs] dated 8th June 2010 was procured by fraud.

6)

[Mr Shepherd] is granted possession of the Land forthwith. …

9)

[Mr Shepherd] shall by 4pm on 29^th November 2012 apply to remove or vary the unilateral notice lodged at the Land Registry in relation to the Land subject to this dispute …”

Put shortly, the judge rejected Mr Shepherd’s claim to have a lease in relation to the Land and found that he had only enjoyed a licence to occupy it, which had been terminated by the termination letter in December 2008 sent on behalf of Mr Blair (hence the order in paragraph 9 that Mr Shepherd remove the unilateral notice he had entered against the Land with the Land Registry, asserting that he owned a lease in relation to the Land); however, he found that CILBVI and Comvecs had no superior title to the Land than Mr Shepherd as the person in occupation of the Land. Therefore, on the usual approach in English law that claims of a right to possession of land are relative, even though Mr Shepherd did not own the Land and was a trespasser on it, he still had a better right to possession of the Land than Mr Gelley and Nor-Dem, CILBVI and Comvecs. The implication of this is that Mr Gelley and Nor-Dem had no proper authority to try to take possession of the Land from Mr Shepherd and to seize the goods on the Land.

After judgment was given, Mr Shepherd made an application of his own dated 4 February 2013 to the Land Registry seeking rectification of the entry on the register in respect of the proprietor of the Land, from Comvecs to CILBVI. Mr Shepherd would like the register entry to note that CILBVI has been dissolved.

The appeal is brought on four grounds. At the hearing, Mrs Gelley applied for permission to introduce a fifth ground of appeal.

The first ground of appeal is to challenge the judge’s conclusion that CILBVI should not be recognised as existing in England by virtue of the January 2011 Order made by the court in the BVI, on the basis that it was tainted by fraud. The Appellants sought permission to withdraw the concession made by counsel on their behalf at trial that a foreign judgment “tainted by fraud” may not be recognised by an English court and also appealed on the footing that there had been no operative fraud by Mrs Gelley which resulted in the January 2011 Order being made.

The second ground of appeal is to challenge the judge’s rulings that Mrs Gelley had no authority to act on behalf of CILBVI and no authority to give instructions to Mr Gelley to take possession of the land. In particular, it is said that CILBVI was owner of the Land at the relevant time; that the ownership of CILBVI formed part of Mr Blair’s estate; and that Mrs Gelley as sole administrator of his estate under the grant of probate by the letter of administration dated 10 January 2011 had authority (standing in Mr Blair’s shoes as sole shareholder or owner of the company) to act on behalf of CILBVI. It is said that it was beneficial to the estate for Mrs Gelley to seek to remove the Respondents from the Land, so as to protect the Land and stop criminal offences being committed on it. As well as maintaining that Mrs Gelley had authority for CILBVI to authorise Mr Gelley to resume possession of the Land from April 2010, the Appellants contend that CILBVI’s claim for possession as a Part 20 Claimant in the proceedings, made by amendment in the Amended Defence and Counterclaim served on 19 April 2011, was unanswerable and that the judge should have awarded possession to CILBVI.

The third ground of appeal is to challenge the judge’s ruling that the transfer of the Land to Comvecs was of no effect. The Appellants contend that the judge failed to apply section 58(1) of the Land Registration Act 2002 (“the LRA”), which has the effect, according to the Appellants, of making the title of Comvecs registered with the Land Registry on 30 June 2010 conclusive as to ownership of the Land, even if the transfer itself had been tainted with fraud.

The fourth ground of appeal is closely related to the first, and will be considered with it below. It amounted to a further way of challenging the judge’s conclusion that the January 2011 Order was tainted with fraud and hence should not be recognised by the English court in the present proceedings.

At the hearing in this Court, Mrs Gelley, for the Appellants, sought permission to introduce a further ground of appeal, namely that the judge should have ruled in favour of the Appellants on the preliminary issues on the basis that the Respondents’ claims in relation to the Land were invalid and should not be accepted by reason of the principle that ex turpi causa non oritur actio (i.e. that a cause of action based on the unlawful conduct of the party asserting it should not be recognised and given effect). Mrs Gelley referred us to Gray v Thames Trains [2009] UKHL 33 and Moore Stephens v Stone Rolls Ltd [2009] UKHL 39; [2009] 1 AC 1391 for discussion of the principle. She submitted that since the Respondents had been convicted by the Crown Court of offences arising out of their use of the Land in breach of environmental regulations, it was now open to the Appellants to rely on the ex turpi causa principle as a further answer to the Respondents’ claims in respect of the Land, even though it had not been pleaded or argued below.

The Court refused permission for this additional ground of appeal to be introduced. The reason it did so is that this new argument gives rise to no prospect that the appeal should be allowed. The appeal relates only to the preliminary issues in respect of the claims to ownership and possession of the Land. Mr Shepherd went into possession of the Land pursuant to an arrangement with Mr Blair which was not affected by any illegality. It was not agreed between them that the Land would be used for unlawful purposes. Mr Shepherd breached the agreement, as the judge found, by using the Land for tipping waste, but this does not mean that his occupation of it was based on such unlawful conduct. Whether the Respondents have committed offences on the Land or not is irrelevant to the claims they made to ownership of the Land under a lease and regarding their superior right to possession of the Land as compared to the Appellants, upon which the judge has ruled. I would add that it is possible that the Respondents’ claim for damages in the next phase of the proceedings at first instance might be affected by the unlawfulness of the Respondents’ activities on the Land; but, if the Appellants wish to argue that, they will need to consider whether they should apply to the judge for permission to amend their pleadings to introduce this issue at that stage.

The first and fourth grounds of appeal: should the January 2011 Order be given effect by the English courts?

At the resumed hearing before the judge on 10 September 2012, Mr Stubbs for the Respondents submitted that various fraudulent mis-statements had been made to the BVI court in the course of the application for the January 2011 Order to restore CILBVI to the list of companies in the BVI and drew the attention of the judge to a passage in Adrian Briggs, Civil Jurisdiction and Judgments (5^th ed., edited by Peter Rees QC) at para. 7.62, pp. 756-760, dealing with the principle that an English court will not recognise and give effect to a judgment of a foreign court which is obtained by fraud; at p. 759 the phrase “tainted by fraud” is used. Counsel for the Appellants accepted at that resumed hearing that such a principle exists, but sought to contend that it did not apply in the case of the January 2011 Order because none of the fraudulent mis-statements alleged had been an operative cause of the making of the Order. The concession made was referred to by the judge (para. [53]) and explains the terminology he used and the focus in the judgment on whether the January 2011 Order was “tainted by fraud”.

Mrs Gelley seeks permission to withdraw the concession that was made. There is a formidable hurdle to be overcome before the Court could conclude that it is in the interests of justice and the overriding objective to allow withdrawal of a concession on appeal (see Jones v MBNA International Bank [2000] EWCA Civ 514, esp. at [38] and [52]). However, in this context it is not necessary to examine this question, since in my view the judge fell into error in concluding that the January 2011 Order was “tainted with fraud” in the requisite sense. I would add that it is understandable that he did so, since there seems to have been little debate at the hearing about what precisely this might mean and it is an expression which can, as a matter of language, suggest a wide scope of application for the relevant principle.

The January 2011 Order was made by the BVI court in relation to a matter – recognition of CILBVI as a company under the law of the BVI – which was exclusively within its jurisdiction. In the ordinary course, such an order of a foreign court would be entitled to recognition by the English courts without investigation of the merits or reasoning underlying the making of that order. In my judgment, the relevant exception to this identified by Briggs, namely that an English court will not recognise and give effect to a foreign judgment which was obtained by fraud, is a carefully delimited exception, and is not to be given expansive application. The principal statement of the exception given by Briggs (p. 756) is that it applies where the foreign judgment “was obtained by fraud.” That reflects the authorities cited by him: see in particular Jet Holdings Inc. v Patel [1990] 1 QB 335, at 344H-345A per Staughton LJ (“… a foreign judgment cannot be enforced if it was obtained by fraud …”). The fraud may be fraud going directly to the cause of action or collateral fraud, which misleads or deceives the judicial tribunal: ibid. 345B-C and 346H-347C. It is clear from Staughton LJ’s judgment, with which Nicholls LJ agreed, that he considered that if the foreign court would have made the order in question in that case even with full awareness of the conduct of the person said to have practised the relevant fraud upon the court, he would have been prepared to recognise and give effect to the order (hence he described this issue as being “the heart of the matter”): it was only because he was not persuaded that this was necessarily the case on the facts for the purposes of an application for summary judgment that he held that the application for summary judgment should be dismissed and the case should go to trial (p. 347C-G).

Other commentators use a similar formulation for the extent of the exception to the general rule of giving recognition to a foreign judgment and order such as this: see Dicey, Morris and Collins, The Conflict of Laws (15^th ed), para. 14-138 (a foreign judgment “is, if obtained by fraud, open to attack”) and Halsbury’s Laws of England, 5^th ed., vol. 19 (Conflict of Laws) (2011), para. 427 (“Judgment obtained by fraud”). It was also the formulation used by the House of Lords, when reviewing the common law rule for the purposes of interpreting legislation, in Owens Bank Ltd v Bracco [1992] 2 AC 443, at 484 and 489 in the leading speech of Lord Bridge of Harwich. Lord Bridge also referred with approval to Jet Holdings Inc. v Patel, at p. 484.

In my view, in line with the approach in Jet Holdings Inc. v Patel and the formulations in the authorities and by leading commentators, in order for the exception to recognition to apply it is necessary to establish that the fraud in question has been operative in obtaining the foreign judgment and order in issue, in the sense that without such fraud having been practised the order would not have been made, or there is a real possibility that it would not have been made. Although use of the phrase “tainted by fraud” can be a useful shorthand label for this, this is a narrower and more precise question than simply to ask whether in general terms the order was “tainted by fraud”.

To frame the question in this more precise way seems to me to reflect properly the underlying policy considerations, that an operative fraud should be taken to unravel a legal step taken on the basis of it and to override the general policy favouring finality in litigation and conclusiveness of foreign judgments and that a person should not be permitted to take advantage of his own wrongdoing (see Briggs, op. cit., para. 7.62, p. 757). If the fraud in question is not operative in the sense I have described, then there is not a sufficient basis for overriding the general policy of finality and conclusiveness of foreign judgments; and the person seeking to rely on the foreign order will not in reality be seeking to take advantage of his own wrongdoing, but will only be seeking to rely on an order which would have been made by the foreign court in any event.

In that regard, it is relevant to note that the English doctrine only means that the foreign judgment and order is not recognised in this jurisdiction. It remains a valid and binding judgment elsewhere, and in particular in the jurisdiction in which it was issued (see Briggs, op. cit., para. 7.62, p. 759). Thus it will not usually be a practical option for the fraudster to return to the foreign court, make full disclosure of all relevant matters and ask it to rule again: the foreign court is likely to decline any such application, on the grounds that it has already validly and sufficiently ruled upon the matter in question. If the English courts can be satisfied that the foreign court would have made the order in question if the fraudster had not deceived it, it would be disproportionate to conclude that nonetheless the order should not be recognised in this jurisdiction, thereby depriving the party of an order which would have been made in his favour in any event. The force of this consideration increases still further where, as in this case, the English court has no power itself to achieve the outcome achieved by the foreign order (restoration of CILBVI to the BVI register of companies) and where interests of innocent third parties may also be affected if the English court does not recognise the foreign order.

Turning to the facts in this case, the judge was entitled to find as he did that Mrs Gelley deliberately sought to mislead the BVI court by covering up the fact that Mrs Gelley had transferred CILBVI’s only asset to Comvecs for her own purposes without authority (para. [53]). He was also entitled to find that she made the misrepresentations identified in para. [52] of the judgment.

Various of the mis-statements identified by the judge at para. [52] of the judgment were clearly not operative frauds in relation to obtaining the January 2011 Order: (i) Bannister J himself spotted that she could not be making the application as a director of CILBVI, and this led to her making the application (correctly) in her capacity as administrator of Mr Blair’s estate; (ii) Mrs Gelley did not herself state that she was making the application to gather in assets of the estate (this was something drawn from the text of the letter of administration which was put before the court), but in any event it was appropriate for her as administrator of the estate to seek an order restoring the company to the register to enable steps to be taken to protect its position; (iii) Mrs Gelley said that she needed to defend the present claims, but she also exhibited to her affidavit the claim forms showing that CILBVI was not itself the subject of a claim in the present proceedings; it was not inaccurate or misleading to suggest that CILBVI had interests implicated in the present proceedings which ought to be protected; (iv) Mrs Gelley said that it was Mr Blair’s death which led to the company being struck off the register, but it was clear from the facts set out on the face of her affidavit that this could not be right, since the company was dissolved in 2001 whereas he died in 2009. Nonetheless, that leaves for consideration the basic finding of fraud against her, as set out in para. [53] of the judgment.

However, in my view, even though a false picture was fraudulently presented to the BVI court upon the application, the fraud was not operative in the sense referred to above. If the BVI court had been fully informed about the circumstances of the application (including about the deliberate attempt by Mrs Gelley to mislead it), it would still have made the order it did. This is for the simple reason that CILBVI is the owner of the Land and there was good reason why it should be restored to the register in the way it was by the January 2011 Order, in order to protect its own interests in relation to the Land and to protect the interests of all the shareholders/owners of CILBVI, including Mrs Cail.

The Respondents did not seek to adduce evidence to suggest that the approach of the BVI courts in deciding whether to make an order restoring a company to the register would be any different from that of the Companies Court in England, nor would one expect it to be any different. Under English law, a company will be restored to the register if it is clear that a low threshold is met of showing that there is good reason to restore the company, in that the restoration will do some good having regard to the interests of the company itself and those with an interest in the company and its assets and affairs: see e.g. Re Blenheim Leisure Restaurants (No. 2) [2000] BCC 821, 830; Stanhope Pension Trust Ltd v Registrar of Companies [1994] BCC 84, 90; Re Blue Note Enterprises Ltd [2001] 2 BCLC 427.

The discretion to restore a company to the register is not exercised on penal principles. Therefore, even if Mrs Gelley were the sole person with an interest in having CILBVI restored to the register and had lied to the court, the fact that she had lied to the court when she did not need to in order to obtain the order for restoration would not be a sound basis on which such an order should be refused, if it was otherwise right that it should be made. In the complicated situation which had arisen in relation to the claims to the Land, it was in my view clearly right that CILBVI should be restored to the register in order to assert its ownership of the Land.

That conclusion is strongly reinforced by the fact that interests of persons other than Mrs Gelley were in issue as regards the question of restoration of CILBVI to the register, and those interests clearly required that the January 2011 Order should be made by the BVI court so that they could be properly protected. Since the judge found that Mrs Gelley’s actions were in part to assist in removal of the asset of CILBVI at an undervalue and without authority, it is not possible to treat Mrs Gelley’s fraud as attributable to CILBVI itself. In the circumstances, it was essential that CILBVI should be restored to the register so that steps could be taken for it to protect itself against being deprived of the Land in this way. For example, it was only if CILBVI were restored to the register so that it could be regarded as an extant company able to assert its own claim to own the Land, that it could be put in a position to promote an application to the Land Registry for rectification of the entry on the register showing the proprietor of the Land from Comvecs to itself, thereby undoing the effect of the unauthorised Comvecs transfer.

Similarly, Mrs Cail (who has a half interest in Mr Blair’s estate and hence in CILBVI) is entirely innocent of any fraud in relation to the BVI court and has a clear and compelling interest in having CILBVI restored to the companies register. If CILBVI is restored to the register, it can seek rectification of the Land Register in England to re-establish itself as the owner of the Land, with the practical effect that what appears to have been an improper dilution of her (indirect) interest in the Land from half to one fifth through the transfer to Comvecs will be reversed.

Thus, if the full circumstances had been explained to the BVI court before it made the January 2011 Order, even though it would no doubt have been extremely concerned and angry about the effort by Mrs Gelley to deceive it, it would nonetheless have established that there were compelling reasons why the order should be made.

This view is further reinforced by consideration of the position which would arise if the English courts do not recognise the January 2011 Order. As mentioned above, the order would remain valid in the BVI, but would not be recognised in England. That would leave CILBVI in a curious and very undesirable limbo. The Court pressed Mr Stubbs on what would then happen to CILBVI’s property in England, i.e. the Land. In his submission, since non-recognition of the January 2011 Order would mean that the English courts do not recognise the existence of CILBVI, the property owned by it should go to the Crown as bona vacantia. That would no doubt suit Mr Shepherd very well, since it would be likely to postpone the day on which he can be removed from the Land; but it would in my view clearly be a most unjust outcome so far as CILBVI and Mrs Cail, in particular, are concerned. That would also have been the likely outcome had the BVI court not made the January 2011 Order. Again, once the implications of making no order to restore CILBVI to the companies register were digested and understood by the BVI court, this would clearly have led it to consider that the January 2011 Order should be made despite the fraud perpetrated by Mrs Gelley.

For these reasons, I consider that the appeal against the judge’s order should be allowed in part. In my view he was wrong to hold at para. [54] of the judgment that the January 2011 Order is of no effect in this jurisdiction and wrong to make the order he did in the terms of paragraph 3 and paragraph 4, declaring that the Part 20 Claimants “are not and never were entitled to possession of the Land” and that Mr Shepherd’s right to possession of the Land “remains superior to that of the Part 20 Claimants even though he is a trespasser”. In the circumstances which had emerged at the end of the trial, the judge should have held that CILBVI was to be regarded as the true owner of the Land at all material times. I will review the precise terms of the order which should have been made after dealing with the other grounds of appeal.

Before doing so, two further points should be mentioned. First, the Respondents questioned whether any shares in CILBVI had actually been issued to Mr Blair originally, which could be treated as property in his estate. After some debate before handing down his judgment in November 2012, the judge made no findings about this. In my view, nothing turns on this for the purposes of the analysis above and the outcome of the appeal. CILBVI was plainly established as a company fully owned by Mr Blair, whether shares in it were actually issued or not. If they were not, he had a right to require shares to be issued to him reflecting his ownership of the company. Either way, his rights in respect of ownership of the company (whether in the form of issued shares or in the form of a right to have shares issued to him) became part of his estate, and were owned 50/50 by his daughters, Mrs Gelley and Mrs Cail.

Secondly, it should be noted that the January 2011 Order was an order in rem, restoring CILBVI to the BVI companies register with effect against all the world. It was not simply an order in personam, regulating and declaring rights between two parties. The discussion above shows that interests of persons other than Mrs Gelley and Mr Shepherd were engaged by and affected by the January 2011 Order, namely CILBVI and Mrs Cail. Interests of other third parties might also be affected if CILBVI purported to enter legal relations having been restored to the register. There is commentary in Dicey, Collins and Morris, op. cit., at paras. 14-145 and 14-148, which questions whether the exception to recognition of foreign judgments where they have been obtained by fraud applies to judgments in rem in the same way that it applies to judgments in personam. In the event, as the appeal on this ground has been allowed by reason of the analysis set out above, it is not necessary or appropriate to go further and consider whether the exception should apply at all in the case of the in rem order made in relation to the status of CILBVI.

The second ground of appeal: the authority of Mrs Gelley to act on behalf of CILBVI

In my view, this ground of appeal should be dismissed. The case for the Appellants on the issue whether CILBVI had authorised the acts of Mr Gelley and Nor-Dem and the demand for Mr Shepherd to give up possession of the Land was put on a particular basis at trial, was carefully examined by the judge on the facts and was found not to be made out.

The basis on which the Appellants put their case at trial at the resumed hearing on 10 September 2012 was that, if the false resolution did not make Mrs Gelley a director of CILBVI (as the judge duly found), nonetheless CILBVI was owned in equal shares by Mrs Gelley and Mrs Cail as the administrators of Mr Blair’s estate and that “so long as all the steps taken on behalf of the company were taken with the agreement of both Mrs Cail and Mrs Gelley, then they are valid” (paragraph 22 of the skeleton argument for the Appellants for the hearing on 10 September 2012). The Appellants contended that Mr Gelley had been authorised by Mrs Gelley and Mrs Cail to take possession of the Land.

It seems that in putting the case in this way, the Appellants focused only on the letter of administration of 27 October 2011 appointing Mrs Gelley and Mrs Cail as joint administrators (and presumably relying implicitly on a contention that such appointment could be taken to relate back to the time of Mr Blair’s death), and did not seek to rely on the earlier limited grant of probate to Mrs Gelley as sole administrator by the letter of administration dated 10 January 2011. The judge made his assessment and ruling on the basis of the case presented to him by the Appellants. He found that Mrs Cail did not consent to or agree with the steps taken to evict Mr Shepherd (para. [56]). Therefore the case advanced by the Appellants failed. There is no appeal against that finding.

Mrs Gelley sought to advance a number of different arguments on the appeal. In my judgment, none of them are open to the Appellants at this late stage.

First, she now seeks to rely upon the earlier letter of administration of 10 January 2011 with its limited grant of probate to her alone, and a contention that the law recognises that it has effect relating back to the time of Mr Blair’s death. This is not an argument properly open to the Appellants on appeal. If this argument had been raised at trial, the Respondents would have pursued a different course, seeking to introduce further evidence and argument to rebut it. When evidence emerged of the forged certificates and the false resolution, and the likely involvement of Mrs Gelley in their production, the Respondents asked for her to return to the witness box to be cross-examined about them, but she refused. The Respondents did not press the judge for an order requiring her to give further evidence. However, if the Appellants had sought to introduce the argument which Mrs Gelley now puts forward, it is likely that the Respondents would have required Mrs Gelley to return to the witness box to be cross-examined in relation to it. They would also have developed further arguments to meet such a different case. In light of what appears to have been an attempt to transfer value (in the form of the Land owned by CILBVI) from the estate of Mrs Gelley’s father, owned in equal shares by her and Mrs Cail, into Comvecs, of which she owned four fifths, there would plainly have been serious questions to be asked of her whether in April and June 2010 she was acting properly in compliance with her duties as administrator, or whether in fact she was acting in breach of them by taking the steps she did to recover the Land from Mr Shepherd with a view to transferring it to Comvecs (and so secure four fifths of its value for herself and her family, rather than ensuring that Mrs Cail got half the value). There would also have been significant scope for argument about the relationship between the first letter of administration and the second letter of administration: it is by no means clear that any doctrine of relation back of the grant of probate to April and June 2010 would operate by reference to the first letter rather than the second. It is distinctly arguable that since the second letter, granting probate to Mrs Gelley and Mrs Cail together, was intended to supersede the first, the doctrine of relation back should operate by reference to that later letter. It is unnecessary to explore all these issues further in this judgment, since these points all demonstrate that it would be unfair to allow the Appellants to introduce this argument for the first time on appeal.

Secondly, Mrs Gelley sought to rely on section 109(6) of the BVI Business Companies Act 2004, which provides that if at any time a company does not have a director, “any person who manages, or who directs or supervises the management of, the business and affairs of the company is deemed to be a director of the company for the purposes of this Act.” She argued that she had acted as such a person at the relevant times in relation to the affairs of CILBVI, and so should be deemed to be a director of the company with authority to take the steps that she did on CILBVI’s behalf. This again was a completely new argument on the appeal (it was not even heralded in the grounds of appeal, but appeared in a skeleton argument). The effect of section 109(6) is not clear, especially against a background of Mrs Gelley taking steps to remove the sole asset of CILBVI at an undervalue: it seems at least questionable whether the provision is intended to validate the actions of a person who acts in such a way against the interests of the company itself. Whether it does or it does not is a matter of the law of the BVI, and if the issue had been raised at trial the Respondents would have had an opportunity to adduce expert evidence on the question of the meaning and effect of the BVI Business Companies Act 2004. They were denied that opportunity because of the way in which the Appellants framed their case. Therefore, I again consider that it would be unfair to allow the Appellants to introduce this argument for the first time on appeal.

Thirdly, as a fall back argument, the Appellants now contend that CILBVI and Comvecs both claimed possession of the Land from the Respondents by way of the counterclaim pleaded on 19 April 2011. If one or other of them was the owner of the Land at that time, its claim to possession was unanswerable, so the judge should at least have granted possession to one of the Part 20 Claimants on the counterclaim, even if the earlier actions by Mr Gelley and Nor-Dem in April and June 2010 may not have been properly authorised. Again, this was not an argument presented to the judge at trial. In fact, I think it is an argument that is precluded by findings that the judge did make and concessions made by counsel for the Appellant at the hearing on 10 September 2012; and in any event it would be unfair to allow the Appellants to introduce this argument for the first time on appeal, since if introduced at first instance it would very probably have led to further evidence and cross-examination of witnesses and the presentation of further and different legal argument.

The difficulty for the Appellants on this new argument is that the bringing of the counterclaim by CILBVI was not properly authorised by the persons entitled to act for CILBVI in April 2011, nor was it ratified by them at any time before judgment. Where a legal claim is brought in a company’s name but without proper authority from the company (e.g. if a solicitor issues proceedings in its name without proper instructions or if an officer of the company without authority to do so issues such proceedings) it is open to the defendant to defend himself by pointing out that the claim is not properly authorised by the company, and hence is not really a claim by the company at all. That could be done by the defendant applying to strike out the claim on the ground that it is not properly authorised or simply by pleading in his defence that it is not a properly authorised claim. In my view, that is a matter which the Respondents put in issue by pleading in paragraphs 4 and 30 of their Reply (which included their defence to the counterclaim by the Part 20 Claimants) that they put the Part 20 Claimants to strict proof of the authority of Mrs Gelley to represent CILBVI at any material time. It was Mrs Gelley who had signed the statement of truth on behalf of CILBVI for its counterclaim in April 2011, purporting to do so as its director.

At the hearing on 10 September 2012 it was very doubtful that Mrs Gelley was in fact a director of CILBVI, and in the event the judge found that she was not. As explained above, the Appellants’ alternative case as to authority for action by CILBVI was that it had been agreed by the persons who owned 100% of the company, namely Mrs Gelley and Mrs Cail. But the judge dismissed that argument on the facts: see para. [56] of the judgment. The judge found that Mrs Cail had not agreed to CILBVI taking steps against Mr Shepherd at the outset. There is no evidence that she had had any change of heart by the time the counterclaim was issued in April 2011 or by the time of trial or judgment. The inference, therefore, based on the judge’s finding, is that Mrs Cail had not agreed that CILBVI should issue a counterclaim against the Respondents claiming possession of the property. Therefore, at the time of the counterclaim and down to judgment the Respondents had a good defence against the claim to possession purportedly brought by CILBVI in the proceedings, but which was in fact not a claim properly authorised by CILBVI or in reality brought by it.

For the hearing in this Court, Mrs Gelley produced a Supplementary Skeleton Argument dated 5 July 2013 which was also signed with a statement of truth by Mrs Cail to affirm certain parts of it. The Supplementary Skeleton Argument states that both Mrs Cail and Mrs Gelley are in support of the appeal. This does not affect the analysis in relation to this argument. Where proceedings are commenced without authority, the principal may subsequently ratify the claim and such ratification relates back to the time the claim was made (this can be important for the purposes of limitation periods: see Presentaciones Musicales S.A. v Secunda [1994] Ch 271; Bowstead and Reynolds on Agency, 19^th ed., para. 2-092). However, I do not think that any such principle could allow ratification of a claim after there has been a trial and judgment on that claim in favour of the opposing party, where the issue of absence of authority was raised as a defence and absence of authority was established. Furthermore, there is no clear statement by Mrs Cail or in the parts of the Supplementary Skeleton Argument affirmed by her that as joint administrator of Mr Blair’s estate she affirms and adopts the claim issued in the name of CILBVI in April 2011.

The third ground of appeal: the effect of section 58 of the LRA

Section 58(1) of the LRA provides for entries on the Land Register to be conclusive, subject to a qualification in sub-section (2), as follows:

“(1)

If, on the entry of a person in the register as the proprietor of a legal estate, the legal estate would not otherwise be vested in him, it shall be deemed to be vested in him as a result of the registration.

(2)

Subsection (1) does not apply where the entry is made in pursuance of a registrable disposition in relation to which some other registration requirement remains to be met.”

Prior to the resumed hearing on 10 September 2012, the issue of the fraudulent nature of the Comvecs transfer was raised by the Respondents. Counsel for the Appellants sought to meet the objection that because of fraud on the part of Mrs Gelley and Comvecs it should not be recognised as the owner of the Land, by arguing that although the forged certificates were sent to the Land Registry in order to obtain the registration of Comvecs as owner and hence affected the registration, they did not affect the question whether Comvecs was in fact the owner (i.e. whatever the Land Register might say), since they were not the instruments used to effect the underlying transfer transaction. In setting out this submission in paragraph 25 of her skeleton argument for that hearing, counsel for the Appellants referred to the requirement by the Land Registry that a certificate be provided that CILBVI was an extant company and stated:

“It is accepted that the forgery [of the forged certificates] is relevant to the question of Comvecs being registered as proprietor. However, it does not affect the question of whether or not Comvecs is in fact the proprietor. The question of who is or who should be registered at the Land Registry is not a question for the court. The Part 20 Claimants seek only an order that Comvecs is entitled to possession of the land, no more” (emphasis in original).

She continued, in paragraph 26, to say that if the false resolution was found not to be true, then it was accepted that Mrs Gelley had no authority to transfer the Land from CILBVI to Comvecs, because Mrs Cail did not, in her capacity as joint owner of CILBVI, give Mrs Gelley authority to make that transfer.

At the hearing on 10 September 2012, counsel for the Appellants referred to the argument set out in paragraphs 25 and 26 of her skeleton argument, but now called the judge’s attention to section 58(2) of the LRA. In light of that provision, she acknowledged that the argument in paragraph 25 was a technical point and that it “probably falls foul because of section 58(2) … because, if the legal estate would not otherwise be vested in Comvecs, because of the forged documents, then section 58 [sc. section 58(2)] would apply and the transfer would fail”. She amplified this point by saying that the reality was that “if the transfer can’t be registered, then the transfer would fail. So, the reality, if you find that the owner of the Land is CILBVI, is the Land remains with CILBVI.” In context, the point counsel for the Appellants was making was that the requirement by the Land Registry that evidence be provided that CILBVI was an extant company was a “registration requirement”, within the meaning of section 58(2), and the provision of the forged certificates rather than true evidence regarding the status of CILBVI meant that this registration requirement had not been met; consequently, section 58(1) of the LRA had no application on the facts of the case.

On the appeal, Mr Stubbs submitted that it was not now open to the Appellants to introduce yet another new argument, this time to say that section 58(2) of the LRA was not applicable and that the position was to be regarded as governed by section 58(1). I agree.

Mrs Gelley did not show the Court the relevant provisions of the LRA or the Land Registration Rules which define “registration requirements” for the purpose of section 58(2), nor did she explain why – even though the Land Registry had required provision of evidence that CILBVI was an extant company before it would register Comvecs as the new proprietor of the Land - nonetheless that was not a relevant “registration requirement” or that, if it was, it was satisfied by the provision of forged evidence to that effect. It is also difficult to know what steps the Respondents might have been able to take to meet an argument based on section 58(1), had the point been taken below. For example, it might have been open to them to seek a stay of the proceedings to allow them to make an application for rectification of the Land Register.

In these circumstances, there is no good ground on which withdrawal of the concession made on behalf of the Appellants (that section 58(2) operated and so section 58(1) did not apply) should be allowed. On the basis of that concession, the Appellants have no argument that by virtue of the operation of section 58(1), Comvecs should be regarded as owner of the Land for the purposes of a claim for possession against the Respondents. On the contrary, on the basis of the factual finding by the judge that the false resolution was forged (which is not challenged), the Appellants accepted that CILBVI was at all times the owner of the Land.

This background also explains why, in his judgment, the judge did not deal with any argument based on section 58(1) of the LRA. Instead, at paras. [49]-[51], he addressed the argument presented in paragraph 25 of the Appellant’s skeleton argument for the hearing on 10 September 2012, and rejected it: he found that the underlying transfer from CILBVI to Comvecs was itself tainted by fraud.

This analysis of the third ground of appeal means that it is unnecessary to explore in this judgment the question whether registration on the Land Register of a new proprietor of land pursuant to a transfer which is procured by fraud should be disregarded or rectified, and if so from what date. It also means that it is unnecessary to deal with a further argument put forward by Mr Stubbs, to address a case founded on section 58(1), that the ex turpi causa principle would apply to prevent Comvecs from relying on its entry on the register in pursuing its claim against Mr Shepherd.

The appeal is allowed to the limited extent necessary to correct the judge’s error in failing to recognise and give effect to the January 2011 Order made by the BVI court:

Save to this extent, the appeal is dismissed.

Although the Respondents, by a Respondents Notice, invited this Court to direct the Land Registry to rectify the Land Register to remove Comvecs as the registered proprietor of the Land, I do not think that it is necessary or appropriate to make such an order. There is on foot an application to the Land Registry for rectification of the register, and the Land Registry can be expected to take account of the decision and order in this Court and act appropriately. In general terms, it seems clear that the Land Register ought to be rectified to reflect the position as determined by this Court, namely that CILBVI is the true owner of the Land. However, there may be further considerations to be taken into account, including the date from which the Land Register ought to be rectified, on which the Land Registry will be better placed to make a decision.

In broad terms, the effect of the analysis in this judgment and the order I would make on the on-going proceedings and the relations between the parties is that (i) subject to any other defences which might be available, the Respondents are likely to be successful in their claim for wrongful interference with their goods, on the basis that Mr Gelley and Nor-Dem did not have proper authority from CILBVI, the owner of the Land, to exclude them from the Land and seize their goods located on the Land; (ii) it is likely that CILBVI, as owner of the Land, will now be able to claim possession of the Land from the Respondents, provided that Mrs Gelley and Mrs Cail (who together own the entirety of CILBVI) both authorise a claim to that effect; and (iii) it is possible that CILBVI may have a claim against the Respondents for payment of a reasonable fee or rent for their use of the Land, CILBVI’s property, on the grounds of the Respondents’ use of the Land without CILBVI’s consent since the end of December 2008. Whether such further claims by CILBVI will be allowed, and on what terms, will be a matter for the judge to decide in the exercise of his case management powers. I would only add that, in view of what appears on the evidence available to this Court to be serious misuse of the Land by the Respondents, it would seem very desirable that CILBVI be put into possession of the Land promptly.

I agree.

I also agree.