Dondore Incorporated v Victoria Fetaimia & Anor

The Appellants and their children occupy Flat 5A, Albert Court, Prince Consort Road, London SW7 2BH (the “Property”). The Respondent seeks possession of the Property as it claims to be the legal and beneficial owner and the joint liquidators want to realise the Respondent's assets in liquidation. The Appellants claim they are, amongst other defences, the beneficial owners but on 8 November 2024 District Judge Jolly (the “Judge”) refused an extension of time for their defence and she made a possession order in favour of the Respondent.

The Appellants appeal those decisions and have now filed a draft defence (the “Draft Defence”). The parties agree that I should determine if the Draft Defence demonstrates that the claim is genuinely disputed on grounds which appear to be substantial (the test in CPR 55.8(2)). If not, then the Appellant accepts that the application fails. If it does, then the question arises whether I should allow the appeal of the Judge’s refusal of an extension of time. The Respondent does not concede that an extension of time will automatically follow, but accepts it is difficult to argue against such a conclusion. This is a “rolled up” hearing, in other words dealing with permission to appeal and the appeal itself.

The parties have been involved in litigation concerning the Property on a previous occasion in the High Court reported with the citation [2018] EWHC 1832 (Ch), a decision of Amanda Tipples QC sitting as a deputy high court judge (as she then was) (the “Tipples Judgment”). The Appellants have also been in litigation with the management company of the Property resulting in a High Court judgment of HHJ Sarah Richardson (sitting as a Judge of the High Court) reported as Albert Court (Westminster) Management Company Ltd & others v Fetaimia and Fetaimia [2022] EWHC 1657 (QB). The First Appellant has also been in litigation in the British Virgin Islands (BVI) concerning the winding up of the Respondent, most recently culminating in an unsuccessful appeal to the Privy Council. The First Appellant has been made bankrupt, although that is now discharged, but there has been litigation in those proceedings too. The relevant details of all this litigation are set out in the paragraphs that follow.

Mr Pryor acts for the Respondent in this case and appeared before the Judge. The Appellants were represented by Mr Kevin Pettican in the litigation before Amanda Tipples QC and he has drafted the skeleton argument and Draft Defence in this appeal. However, he did not appear before the Judge below or at the hearing before me. Mr Richard Clayton KC represented the Appellants before me and has been instructed in the litigation in the BVI. I am grateful to all counsel for their help.

There are 4 relevant phases to the background. First, the events that form the background to the Tipples Judgment. Secondly, the Tipples Judgment itself. Thirdly, the Respondent’s winding up in the BVI. Fourthly, the background to these proceedings.

In 1991 the Property was purchased by Mr Richard Hitt and Mrs Gillian Barnes. Mr Hitt plays an important part in the background to this case, as will become apparent. On 24 September 2015 the Respondent and Mr Hitt commenced proceedings for possession of the Property from the Appellants. The Respondent was the registered proprietor of the Property and Mr Hitt held the share certificate for the entire holding in the Respondent and was its sole director. The Appellants maintained that the First Appellant owned all the shares in the Respondent and had purchased them from Mr Hitt for £900,000. This is the litigation that culminated in the Tipples Judgment. The judge concluded that Mr Hitt was not a truthful witness. There were a number of disputed facts before the judge and this background section relies upon the facts as they were determined at trial.

Pursuant to a deed of trust, amongst other details which are not relevant, Mr Hitt and Mrs Barnes agreed that they would sell the Property to a person as directed by Mr Hitt. The relationship between Mr Hitt and Mrs Barnes ended in 1994 and Mr Hitt married Ms Frederique Laroche and lived in France. That relationship came to an end as well, although the details are not relevant.

In the 1990s, the Second Appellant trained Mr Hitt for his corporate jet licence renewal and they became friends and on occasion the Second Appellant stayed at the Property. In 2004 the Second Appellant moved to London and lived in the Property and in 2005 there was a non-binding agreement between Mr Hitt and the Second Appellant that he would buy the Property for £450,000. However, Mr Hitt could not transfer the Property to the Second Appellant at this time because of ongoing issues with Mrs Barnes. The Second Appellant met the First Appellant in October 2005 and at the end of that year she too moved into the Property as her home.

The First Appellant met Mr Hitt in October 2006 and she discussed purchasing the Property from him. The First Appellant proposed to acquire the Property through an offshore company. By 27 November 2007, Mr Hitt had agreed to transfer the Property to the First Appellant using an offshore company. In July 2008 the Appellants contacted Mr David Risbey in Switzerland to set up an offshore company to own the Property. The First Appellant chose the name “Dondore” for the company and Mr Risbey proposed that the company should be owned by Mr Hitt until the purchase price for the Property had been paid. Once that had happened then the shares in the company would be transferred to the First Appellant. Mr Hitt and Mrs Barnes executed the transfer of the registered title to the Respondent on 1 August 2008 and the Respondent was registered with the HM Land Registry as the proprietor of the Property. In fact, the Respondent had not been formed as a legal entity at this time, a matter which I will return to.

In 2008 there were negotiations between the Second Appellant and Mr Hitt that resulted in an agreement (the “August 2008 Agreement”) and a revised price of £900,000 for the Property. It was agreed that when Mr Hitt had received the money then the shares in the Respondent would be transferred to the First Appellant.

In April 2009 Mr Hitt became aware that the Respondent had not in fact been incorporated and that was arranged and took place on 16 June 2009. Mr Hitt became the sole director of the Respondent and the entire share capital was transferred to him. The £900,000 was paid in three instalments through a third party. Mr Hitt did not transfer to the First Appellant the shares in the Respondent as he had agreed. Disputes arose between Mr Hitt and the Appellants which led to the proceedings that culminated in the Tipples Judgment.

The issue before Miss Amanda Tipples QC was whether Mr Hitt or the First Appellant was the beneficial owner of the shares in the Respondent. Paragraph 24 of the judgment states:

“That in turn depends on: (1) whether in the summer of 2008, there was an oral agreement between the parties to the effect that Mr Hitt agreed to form a company and to sell the shares in that company to Mrs Fetaimia ("the Agreement Issue"); and (2) whether Mr Hitt has been paid for the shares by, or on behalf of, the defendants ("the Payment Issue").”

At paragraphs 8 and 9, the judge deals with the parties’ statements of case and quotes from the amended particulars of claim as follows:

“…[4]. [Dondore Inc] is entitled to possession of the Property by virtue of it being the registered proprietor. Alternatively, if [Mr Hitt] is still the beneficial owner and/or joint legal owner of the Property, then he is entitled to possession of the same. [5]. No rent was payable in respect of the Defendants' occupation. [6]. The Defendants do not have exclusive possession of the Property. [Dondore Inc] allowed the Defendants into occupation on the basis that its director, [Mr Hitt] would be permitted to access and stay in the Property when in London and/or would retain space in the Property for the storage of personal items. [7.] In the premises, the Defendants' occupation of the Property was by way of licence.”

The Appellants’ amended defence and counterclaim responded as follows:

“[11.] Paragraph 4 is denied. The entire shareholding in [Dondore Inc] belongs to [Mrs Fetaimia] and the Defendants are entitled to occupy the Property as they have done since 2004.

[12.] Paragraph 5 is admitted on the premise that [Mrs Fetaimia] is the owner of the entire shareholding of [Dondore Inc] and by arrangement between [Dondore Inc] controlled by [Mrs Fetaimia] and the Defendants, no rent was payable for occupation of the Property.

[13.] Paragraph 6 is denied. The Defendants have and always have had exclusive possession of the Property by virtue of their case pleaded in this Amended Defence. [Mr Hitt's] right to have access to the Property terminated on 19 October 2011 when the entire shareholding was purchased by [Mrs Fetaimia].

[14.] [Mr Hitt] never stayed at the Property during the period it was occupied by the Defendants and any arrangement he may have had for the storage of his personal items was terminated on 11 November 2011, one month after the purchase by [Mrs Fetaimia] of the shares in [Dondore Inc] was completed. [Mr Hitt] is put to strict proof that he stayed at the Property after 19 October 2011.

[15.] Paragraph 7 is denied. In December 2004 [Mr Hitt] agreed to form a company, subsequently [Dondore Inc] and to then sell his shares in that company ([Dondore Inc]) to [Mrs Fetaimia] for £450,000. It was further agreed between [Mr Hitt] and the Defendants that the Defendants may occupy the Property until the purchase of the Property was completed through the incorporation of the company ([Dondore Inc]) and the purchase of the shares in [Dondore Inc] was completed by [Mrs Fetaimia]. The Claimants are put to strict proof of the existence of such a licence.”

At paragraph 87 of the judgment the judge quotes an extract from an email dated 25 July 2008 to an associate of the Second Appellant from Mr Saunders, the lawyer who had been jointly instructed by Mr Hitt and the Second Appellant for the transfer of the Property to the offshore company. The judge emphasises the following extract:

“[Mr Hitt] could of course therefore direct that the property be transferred immediately to the offshore company that [the second defendant] could acquire. The object of the exercise is achieved.”

The judge goes on at paragraph 88 to make a finding on the “object of the exercise” referred to in that extract. The judgment states:

“It is clear to me that the "object of the exercise" referred to in this email was for Mr Hitt to divest himself of the entirety of his beneficial ownership of the property, by directing the trustees of the property (ie Mr Hitt and Mrs Barnes) to transfer the property to a corporate vehicle, which Mr Fetaimia could acquire. The purchaser of the property would therefore be a company, which would be owned, or become owned, by Mr Fetaimia (or Mrs Fetaimia).”

The judge goes on to find that the First Appellant’s evidence was that the shares in the offshore company were to be registered in her name.

The conclusion of the judgment is at paragraph 165 and it states:

“Mrs Fetaimia is the beneficial owner of the shares in Dondore Inc, and Dondore Inc is the registered proprietor of the property. Mr Hitt agreed to sell the shares in Dondore Inc to Mrs Fetaimia for £900,000. The purchase price for the shares has been paid in full…

In these circumstances:

a.

The claimants claim for possession and mesne profits, and a declaration as to ownership of the property, is dismissed.

b.

The defendants are entitled to a declaration on their counterclaim that the entire shareholding in Dondore Inc is held by Mr Hitt for Mrs Fetaimia, together with an order for payment of £15,700, together with interest thereon, in respect of the insurance claim.”

The order made at the conclusion of the case records at paragraph 4:

“The court declares that [Mr Hitt] holds the entire issued share capital of the [Respondent] on behalf of the [First Appellant]…”

At paragraph 5 of the order Mr Hitt was required to transfer the entire share capital of the Respondent to the First Appellant and to have her registered as the legal owner. Mr Hitt did not comply with paragraph 5 of the order.

The management company for the Property, Albert Court (Westminster) Management Company Ltd (“ACM”), obtained a default judgment against the Appellants in the county court for non-payment of service charges in the sum of £11,470.32, which sum was paid by the Appellants at a later date. However, ACM took proceedings in the BVI to appoint liquidators for the Respondent, although by the time the matter came before the court the sum had been paid. On 7 November 2017 Mr Hitt swore an affidavit for use in the BVI proceedings exhibiting a resolution signed by him as the Respondent’s director stating that he was the beneficial owner of the Respondent and that he was owed substantial sums of money by it. On 18 November 2019 Mr Justice Jack made an order in the court in the BVI appointing receivers as joint liquidators of the Respondent. The First Appellant discovered what had happened and issued an appeal, permission for which was granted. Mr Justice Jack gave a written judgment on 5 May 2021 stating that he would not have made the order if he had known the true facts.

The relationship between ACM and the Appellants had broken down and it resulted in ACM issuing a claim for harassment in relation to the Appellants’ conduct. This resulted in the judgment of HHJ Sarah Richardson and a substantial costs order against the Appellants. In 2023 the First Appellant was registered as the proprietor of the Respondent’s shares. However, costs orders obtained in that claim in favour of ACM were registered in the BVI and all but one of those costs orders were used to obtain charging orders over the First Appellant’s shares in the Respondent in the BVI. On 22 June 2023 ACM obtained an order requiring the Respondent to amend its register to show that ACM itself was the owner of the Respondent’s shares. Relying upon the one costs order that had not been used to obtain a charging order in the BVI, ACM obtained an order in England on 15 August 2023 that the First Appellant be adjudged bankrupt.

On 31 July 2024 the Court of Appeal in the BVI held that the First Appellant had no standing to bring an appeal against the Respondent’s winding up. First, she was no longer the registered shareholder and secondly, on her bankruptcy the shares vested in the trustee in bankruptcy. On 31 October 2024 the Court of Appeal in the BVI dismissed the First Appellant’s appeal against the winding up of the Respondent. The First Appellant appealed to the Privy Council and permission to appeal was refused on 15 October 2025.

As a result of applications by the First Appellant being determined as totally without merit in the ongoing litigation with ACM, Lord Justice Popplewell made an extended civil restraint order against the First Appellant. In other words, unless the court granted permission, she could not make applications concerning any matter involving, relating to, or touching upon or leading to certain named proceedings. On 24 October 2024 the First Appellant made an application to remove her trustee in bankruptcy and/or to assign to her the right to pursue the appeal proceedings in the BVI. On 15 May 2025 the First Appellant made a further similar application and the matter was dealt with by Mr Justice Richard Smith who refused her permission to make the application as totally without merit and struck out the application notice dated 15 May 2025.

The Respondent obtained a copy of the First Appellant’s application dated 23 October 2024 and the accompanying witness statement of the First Appellant dated 24 October 2024 certified with the statement of truth. The witness statement included the following:

The joint liquidators issued the claim form on 11 June 2024 claiming that the Property was the Respondent’s and that the Appellants were licensees to whom notice had been given to terminate their interest. At a hearing on 11 September 2024 the Appellants were ordered to file a defence by 25 September 2024 and that directions questionnaires were filed by 23 October 2024. On 25 September 2024 the Appellants’ solicitors issued an application for an extension of time to 6 November 2024 on the basis that there was a hearing before the Court of Appeal in the BVI on 22 October 2024 and the Appellants considered knowing the outcome of that matter was important before they filed their defence. On 3 October 2024 an order was made extending time for service of the Appellants’ defence to 6 November 2024. There was further correspondence between the parties on the progress of the litigation in the BVI, the details of which it is not necessary for me to go into in this Judgment, but on 5 November 2024 the Appellants’ solicitors issued an application seeking a second extension of time for service of the defence and counterclaim for a further 14 days. A hearing had already been listed for 8 November 2024, which is how the matter came before the Judge. The Judge stated that no real reason had been given for a further extension of time and her reasons included consideration of the Tipples Judgment concluding: “…Nothing has been said that seems to disclose to me a genuine dispute on substantial grounds in relation to the possession claim. No assertion has been made in the many years this has been going on as to the beneficial interest in the property itself, as opposed to the company...”

The Draft Defence and counterclaim set out in detail the background, including the Tipples Judgment. The key points of the Draft Defence may be summarised as follows:

CPR 52 governs appeals and the relevant extracts (omitting irrelevant wording) are as follows:

The relevant part of CPR 55.8 states:

“(2)

Where the claim is genuinely disputed on grounds which appear to be substantial, case management directions given under paragraph (1)(b) will include the allocation of the claim to a track or directions to enable it to be allocated.”

In Global 100 Ltd v Laleva [2021] EWCA Civ 1835; [2022] H.L.R. 20 the test of whether the claim is genuinely disputed on grounds which appear to be substantial is the same as the test for summary judgment in CPR 24(3). Namely, if the court:

“(a)

it considers that the party has no real prospect of succeeding on the claim, defence or issue; and

(b)

there is no other compelling reason why the case or issue should be disposed of at a trial.”

The principles applicable to determining such applications are set out in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 at [24]. In particular, the claim must have a realistic prospect of success. Realistic means it carries some degree of conviction and is more than merely arguable.

As stated above in paragraph 25(i), the Appellants rely on the fact that the Respondent was not incorporated before the transfer of the Property. They say the transfer is void and rely on Emmet & Farrand on Title (at ¶11-152) “a purported conveyance to a company completed before the company has been incorporated will be void”. They also rely on Rolle Family & Co Ltd v Rolle [2017] UKPC 35, where Lord Sumption stated:

“A conveyance, like any other deed, must be signed, sealed and delivered in order to take effect. Both deeds in favour of the company were expressed to have been signed, sealed and delivered on the date of execution, 8 September 2006. The problem arises from the fact that although on that date lawyers had been instructed to incorporate the grantee company, the formalities were not completed and the company did not come into existence until 12 September 2006, four days later. It follows that at the time when the conveyances were executed, there was no grantee in existence in whose favour the deed could be delivered. The general rule at common law is that a company cannot adopt or ratify a transaction purporting to have been made on its behalf before its incorporation: Natal Land and Colonisation Co Ltd v Pauline Colliery and Development Syndicate Ltd [1904] AC 120. In the ordinary course, the result would be that the conveyances in the company’s favour were void”.

The Appellants argue that entry in the Land Register is void as section 58 of the Land Registration Act 2002 provides that:

“(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.”

In the Appellants’ skeleton argument, it is stated that it is a “registration requirement” that the legal person actually existed and reliance is placed on Gelley v Shepherd [2013] EWCA Civ 1172. In response to my question about “registration requirements” Mr Clayton also relied on Schedule 2 of the Act, which includes such requirements.

In asserting a beneficial interest, the Appellants rely upon Prest v Petrodel Resources Limited [2013] UKSC 34. This was a case concerning a matrimonial home and Lord Sumption stated at paragraph 52:

“Whether assets legally vested in a company are beneficially owned by its controller is a highly fact-specific issue…”

The Respondent, amongst other arguments, submits this claim is subject to issue estoppel and/or an abuse of process. The Respondent relies upon Virgin Atlantic Airways v. Zodiac Seats [2014] AC 160 at [17]:

“…there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties: Duchess of Kingston s Case (1776) 20State Tr 355. Issue estoppel was the expression devised to describe this principle by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197—198.”

Further on at paragraph 22:

“(3)

Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”

Desert Sun Loan Corporation v. Hill [1996] 2 All ER 847 involved issue estoppel from a prior foreign judgment but the Respondent submits it is equally applicable and the principles were set out at page 854F:

“The principle is that an issue of fact or law which necessarily was concluded in favour of one party in the foreign proceedings cannot be reopened in further proceedings between the same parties here. Dicey and Morris p 467 states as follows:

‘For there to be such an issue estoppel, three requirements must be satisfied: first, the judgment of the foreign court must be (a) of a court of competent jurisdiction, (b) final and conclusive and (c) on the merits; secondly, the parties to the English litigation must be the same parties (or their privies) as in the foreign litigation; and, thirdly, the issues raised must be identical. A decision on the issue must have been necessary for the decision of the foreign court and not merely collateral.’”

As to abuse of process the Respondent relies on Johnson v. Gore Wood [2002] 2 AC 1 and Lord Bingham stated at page 31:

“But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.”

Mr Clayton’s submissions on behalf of the Appellants were this was a dispute that had real substance, it was real and substantial. The Respondent was not a legal entity when the Property was transferred to it and therefore it cannot hold the Property. There was an intention on the part of the Appellants to set up a trust and that happened as the Respondent did not exist at the relevant time and a constructive trust was created. Mr Hitt held the Property as a bare trustee and it therefore follows that he had to transfer the Property on demand. Alternatively, based on the Tipples Judgment the First Appellant held the beneficial interest in the shares in the Respondent, but the Property was not a gift made by Mr Hitt to the Respondent. He would transfer his beneficial interest in the Property to the Second Appellant or the Appellants and the shares in the Respondent to the First Appellant. The purchase price of the Property was to give effect to the trust. The Appellants were buying the Property. Mr Clayton accepted that the Draft Defence was not entirely satisfactory but, he submitted, it did provide sufficient for the court to take a view on the strength of the defence. He relied upon Rolle, section 58 of the Land Registration Act 2002 and Gelley to support the position that not only was the registration of the Respondent as the proprietor in error but that in addition the Property cannot have been transferred as a matter of law to the Respondent. Mr Clayton also relied upon Prest for his submission that this was a complex factual situation and therefore whether the Respondent was the beneficial owner of the Property supported that there was a real and substantial dispute. Mr Clayton accepted that issue estoppel could apply to the Tipples Judgment, but not otherwise. However, whether the Respondent was the owner of the Property was not challenged. The Tipples Judgment was helpful to the Respondent but no more than that and it did not preclude the Draft Defence going forward. It did not preclude an alternative submission that another form of trust was properly arguable. The parties took the convenient course open to them. As to the abuse of process argument put forward by the Respondent, Mr Clayton submitted that the test in Johnson v. Gore Wood was not a rigid rule but a merits-based judgement. There was insufficient material on which to make such a judgement.

Mr Pryor’s submissions focused on the fact that the case the Appellants rely upon in this claim is totally different to the one they relied upon in the Tipples Judgment and different to the case that the First Appellant had been running in the BVI litigation and in her application to remove her trustee in bankruptcy. That case was based upon the Respondent owning the beneficial interest in the Property. Now the Appellants seek to argue that it does not have that beneficial interest. Mr Pryor criticises the Draft Defence in four main ways. First, it does not identify who is the legal owner of the Property, if it is not the Respondent. Secondly, the counterclaim seeks the legal title in the Property to be transferred to the Appellants, but that position is contradictory to the pleaded case that the Respondent is not the legal owner. Thirdly, rather than responding to the particulars of claim paragraph by paragraph the defence sets out the Appellants’ version of events and denies the particulars of claim where they are inconsistent with it. Fourthly, he criticises it on the basis of the different case that is now being relied upon by the Appellants to re-characterise the facts and in particular the Appellants’ position now that they did not consider it in their interests or necessary to argue that either of them received a beneficial interest in the Respondent. In addition, Mr Pryor submits that the Appellants accepted in the litigation that the Respondent had the legal and beneficial interest in the Property and that is why they paid the £900,000 for shares that would otherwise have been valueless. To claim otherwise is contrary to the Tipples Judgment and the Appellants’ previous case. Mr Pryor raises issue estoppel and relies upon the authorities I have identified above. He submits the parties are the same and the relevant issues were first whether the Respondent was the owner of the Property and secondly the nature of the August 2008 Agreement between the Second Appellant and Mr Hitt. He submits success on either would be sufficient for issue estoppel as this was a judicial decision that was final and conclusive, the issues were identical and the decision was necessary and not collateral. Furthermore, Mr Pryor argues that it is an abuse of process relying upon Johnson v. Gore Wood. In addition, Mr Pryor submits that the defence is unrealistic on the facts. Bearing in mind the Tipples Judgment, it is clear that any case that the Appellants acquired a beneficial interest is hopeless. The proprietary estoppel argument fails when the intention of a corporate vehicle purchase is that the company has all the value. The circumstances in Prest are different.

As Miss Amanda Tipples QC identified at paragraph 24 of the Tipples Judgment, the issue that had to be determined was whether there was an agreement between the parties to form a company and sell the shares in that company to the First Appellant. The defence of the Appellants in those proceedings positively asserts that the shareholding of the Respondent belonged to the First Appellant (paragraph 11 of the defence quoted at paragraph 14 above) and that the purchase of the Property would be completed through the incorporation of the Respondent and the purchase of the shares by the First Appellant (paragraph 15 of the defence). The judge finds at paragraphs 87 and 88 of the judgment that the purchaser of the Property would be a company i.e. the Respondent that would be owned by the First Appellant. That conclusion is confirmed in paragraph 165 of the judgment and on the basis of the order that was made subsequently, that I have quoted at paragraph 18 above.

The issue of the failure to incorporate the Respondent before transferring the Property and the consequences of that for the Appellants was not raised. The Appellants say that that the Respondent was the registered proprietor and that the Appellants had nothing to gain by challenging its legal title in light of Mr Hitt’s case in the claim. The Draft Defence does not plead who now is the holder of the legal title, but presumably it must follow that it would be Mr Hitt and Mrs Barnes. The void transfer becomes irrelevant because of the finding in the Tipples Judgment that there was a binding contract. This requires Mr Hitt to transfer the beneficial ownership of the Property to a corporate vehicle i.e. in this case Respondent. I accept that as a matter of law the Respondent did not acquire legal title as it was not in existence at the time of the purported transfer based on Rolle. However, I am not satisfied that the entry on the Register cannot be relied upon. Schedule 2 of the Land Registration Act 2002 does not have a requirement that there must be evidence that a company “exists”. In a transfer the requirement is that the transferee must be entered on the register as the proprietor. Gelley is not binding on me as it was based on a concession and as far as I can tell there was an assumption in that case that evidence of a company’s existence was a registration requirement. In Gelley the Land Registry asked for evidence that the company was extant and fraudulent documents were provided purporting to show that it was. There is no evidence in this case that any such request was made by the Land Registry and presumably it was not as the evidence could not have been provided. If there is concern about whether a person is a proprietor, then the remedy would be to apply to rectify the Register. There may be arguments about whether section 58 and/or Schedule 2 can be complied with if at the time a company has not been incorporated, but I did not hear full argument on this. Nevertheless, for the reasons that follow, I do not consider that this alters the position between the parties in this case.

At any trial of this case to support their defence (see the summary of the Draft Defence above) the Appellants would have to give evidence that everything material that they provided in evidence in the case leading to the Tipples Judgment was wrong. In particular, that it was not correct factually to conclude that the August 2008 Agreement was as the judge found. That the agreement was to purchase the Property rather than the shares in the Respondent. They will have to give evidence that it was the Second Appellant who stood to gain under that contract rather than the First Appellant and that the Respondent did not have the beneficial interest (or legal interest) in the Property. The conclusions reached in paragraphs 87 and 88 of the Tipples Judgment are wrong on the facts in particular that the August 2008 Agreement did not involve the legal and beneficial interest going to the Respondent and the shares in the Respondent being purchased by the First Appellant. The prospect of this evidence being accepted by a court is in my judgement fanciful. Even if an explanation was provided for the change in evidence the likelihood of any judge accepting such a fundamental alteration in evidence is extremely remote. If that explanation were now related to the transfer of the Property to the Respondent before incorporation it does not assist the Appellants because that does not go to the evidence that they gave about the nature of the August 2008 Agreement. The claim for proprietary estoppel would fail for the same reasons. The judgment in Prest does not assist the Appellants either because as any change in evidence would not be accepted by the court the decision would proceed on the evidence and finding in the Tipples Judgment of the August 2008 Agreement. It was clear that the Respondent received the beneficial interest in the Property. The Appellants cannot show a realistic prospect of going behind the Tipples Judgment and the basis for it and therefore the factual enquiry that Lord Sumption refers to is not engaged as it has already been carried out and established in the Tipples Judgment. Prest does not provide a “very promising basis” for a case that the Appellants (or one of them) beneficially own the flat, as the arrangement that was put in place was the one the First Appellant wished for. Presumably, this was a favourable tax position for the Respondent to own (legally and beneficially) the property. The Respondent was to be a vehicle for the First Appellant and what was in the Respondent’s interest was not the issue and the August 2008 Agreement was the “object of the exercise”. Mr Hitt transferred the legal and beneficial interest into the Respondent for no payment to effect the August 2008 Agreement as he was entitled to do. The payment of £900,000 once received was to buy the shares in the Respondent that was the legal and beneficial owner of the Property. The Respondent would not be expected in such circumstances to receive any benefits or pay any outgoings as it was merely a vehicle allowing the Appellants to occupy the Property. There is no “sham” arrangement.

Furthermore, what has been previously decided between these identical parties is the terms of the August 2008 Agreement. Applying the principles of issue estoppel identified above (at paragraphs 33, 34 and 35), the Tipples Judgment is from a court of competent jurisdiction, it is final and conclusive and it is on the merits. The matter is identical, as what the Appellants have now put in issue is the nature of the August 2008 Agreement. Furthermore, that issue was essential to the outcome of the Tipples Judgment. The Appellants seek to present a different set of facts (as I have indicated above), but I find they are precluded from doing so on the basis of issue estoppel.

In addition, I am satisfied that the Draft Defence would amount to an abuse of process in the way identified by Lord Bingham in Johnson v. Gore Wood. The Appellants’ previous case, and the case that the First Appellant maintained in her application concerning the trustee in bankruptcy, was that the Respondent was the legal and beneficial owner of the Property. Indeed, it is difficult to see how the proceedings in the BVI were pursued to such lengths if as a matter of fact the Respondent was not. Why apply to set aside the appointment of liquidators and pursue this point on appeal if it did not matter to the First Appellant, as it would not have done if the Second Appellant or both of them held the beneficial interest in the Property. The Respondent being incorporated after being registered as the proprietor was not raised in the previous proceedings. If there was a real issue about that it should have been raised in those proceedings, but the fact is there is no real issue on that point to be decided between the parties. The Appellants’ case is confused as can be seen from the fact that the pleadings deny that the Respondent is the legal owner of the Property but then seek an order transferring of the ownership to them. If it is not the Respondent that they believe is the legal owner, they do not identify any other person. This is further support to the conclusion that this defence is an abuse of process. Miss Amanda Tipples QC would have found a route to require the beneficial interest be dealt with in accordance with her findings on the August 2008 Agreement. Now, the Appellants seek an alternative case as the one that has been run previously will no longer work, given the way events have subsequently transpired. They seek to re-litigate what has already been decided between these parties and for a different conclusion to be reached on the findings of fact. Mr Clayton submitted that there was insufficient material for me to reach such a conclusion at this stage of the case. I disagree and as Lord Bingham stated it is to be broad merits based judgement, taking into account public and private interests. The question is whether the parties are misusing or abusing the process of the court and in my judgement that is precisely what the Appellants are doing.

In my judgement, for all of the reasons I have given above, the Draft Defence does not demonstrate that the claim is genuinely disputed on grounds which appear to be substantial. There is no real prospect of succeeding on the Draft Defence. There is no other compelling reason why the case should be disposed of at a trial. The Appellants’ counsel accepted that if I reached such a conclusion the application failed. I have considered whether I should grant permission to appeal, albeit refusing the appeal itself which would then give the Appellants an opportunity of a second appeal. However, for the reasons that I have given I do not consider that this appeal has a real prospect of success and nor do I consider that there is some other compelling reason for the appeal to be heard. This is an attempt to delay the inevitable after many years of litigation and it would not be proportionate or in accordance with the overriding objective to make any other decision than the one that I have reached. I refuse permission to appeal.

This was a “rolled up” hearing. Mrs and Mr Fetaimia are the First and Second Appellants respectively. Dondore Incorporated is the Respondent. The Appellants seek to appeal a decision ordering them to give possession to the Respondent of Flat 5A, Albert Court, Prince Consort Road, London SW7 2BH. The basis for their appeal is that the Respondent is neither the legal owner nor the beneficial owner of that property. Their primary argument is they have a beneficial interest following dealings with the previous owner, Mr Richard Hitt. Those dealings have been litigated between the parties previously and the facts now relied upon are different to those relied upon before. The Appellants rely on a draft defence that was not before the judge below. The parties agreed that I should determine if this draft demonstrated the claim is genuinely disputed on grounds which appear to be substantial. If I concluded it was not then the appeal would be unsuccessful. I have concluded that relying upon the new version of events in the draft defence does not have a real prospect of success, there is issue estoppel and that it is also an abuse of process. There is no other compelling reason why the case should be disposed of at a trial. For those reasons I have refused permission to appeal.