Popely v Heltfield Properties Ltd.& Ors

This action is founded on the claim of the claimant, Mr John Popely, to be entitled to a beneficial half share of land ("the land") to the north west side of Gravel Road, Bromley Common. The land is registered at HM Land Registry in the name of the first defendant, Heltfield Properties Limited ("Heltfield"), to the shares of which the Claimant also lays claim. There is no real dispute between the parties as to the law which applies; the issues are ones of fact.

The claimant's case is that in 1995 he and his younger brother Mr Ronald Popely ("Ronald") orally agreed that they would buy the land as a joint venture. They were, he claims, to provide the purchase money equally and own the land in equal shares. He puts his case on the basis of resulting trust, on the ground that he paid half the purchase money. Alternatively he claims there was a constructive trust, on the ground that the brothers had an express common intention as to how the land should be held (Lloyds Bank Plc v. Rosset [1991] 1 AC 107), and that he paid a share of the purchase money accordingly. His case at trial was that on the day of completion he paid the sum of £20,000 in cash from his own resources to the vendor Mr Barrie Butcher.

The claimant says that he and Ronald agreed that the land would be purchased in the name of the fourth defendant, Maltcrown Limited, ("Maltcrown"), which the claimant maintains was a nominee company belonging to and controlled by Ronald.

Five years later, the land was transferred from Maltcrown to Heltfield. The claimant's case is that the transfer was at his prompting because he had discovered that his investment was potentially at risk since Maltcrown was not dormant but trading. He alleges that Heltfield is another company belonging to Ronald and that although the transaction purported to be a sale for £15,000 no consideration was in fact given for the transfer. The second defendant, Stephen Blake, was at all material times a director of Heltfield and is also a shareholder, although not now the only shareholder.

It is common ground that if Maltcrown held the land on a resulting or constructive trust for the claimant his interest constituted a minor interest within the meaning of the Land Registration Act 1925 s. 3(xv) as amended.Accordingly, if no valuable consideration was paid on the purchase by Heltfield, the claimant's interest, if established, would be binding on it. If on the other hand valuable consideration was paid, Heltfield will have taken free of the interest unless the claimant can make good further claims. These are that Ronald was the controlling mind and will of Heltfield and the transfer from Maltcrown to Heltfield was made on Ronald's express instructions. If so, the claimant's case is that Heltfield must therefore either be taken to have accepted the land subject to the trust (see e.g. Lyus v. Prowsa Developments Ltd [1982] 1 WLR 1044) or the transfer was made in deliberate breach of trust such that Heltfield was in knowing receipt of trust property and a constructive trust attaches to it: see e.g. El Ajou v. Dollar Land Holdings Plc [1994] 1 BCLC 464, Bank of Credit and Commerce International (Overseas) Limited v. Akindele [2001] Ch 437.

The claim as against the third defendant arose as follows. On 4th May 2001 Heltfield transferred the land to Spacegain Limited ("Spacegain"). On the face of the documentation the transfer was a sale, made in consideration of the sum of £16,000, funded by a loan from Mr Blake. It is accepted that the loan was a paper transaction and no money actually changed hands. However the claimant says that the transfer to Spacegain was effected in an attempt to put the land beyond his reach. Before the transfer could be registered, the claimant commenced these proceedings and registered a caution against dealings at HM Land Registry. In February 2002 the transfer to Spacegain was cancelled and the transaction reversed. Mr Blake also cancelled his loan on condition that Heltfield was substituted as the borrower. Heltfield duly entered into a loan agreement with Mr Blake on the same terms and granted him a debenture including a fixed charge over the land. Spacegain was never registered as owner at HM Land Registry.

The issues are now between the claimant, Heltfield and Mr Blake. Neither Maltcrown nor Spacegain has filed a defence in the action and they have both been debarred from defending. Maltcrown was struck off the register of companies on 29th June 2004.

The defendants (by whom I mean the first and second defendants) deny that there was any agreement that the claimant would have an interest in the land. They aver that the land was purchased from Mr Butcher for £14,000, the price that appears on the face of the documentation, and that the claimant did not make the alleged or any contribution to the purchase price. The claimant's involvement in the matter, they say, was limited to acting as a messenger tocollectkeys from Mr Butcher on the day of completion.

In any event it is the defendants' case that Heltfield's transfer from Maltcrown was made in pursuance of a genuine sale; valuable consideration passed so as to defeat any interest that the claimant may have had as against Ronald or Maltcrown.

Thirdly, the defendants maintain that Ronald was not the directing mind and will of either Maltcrown or Heltfield. Both companies were beneficially owned by their respective shareholders and managed by their respective directors. Even if there was a trust in the claimant's favour, the companies had no knowledge of it.

The defendants also allege that the claimant parted with any interest he may have had in the land by way of gift to his son Andrew Popely so that he has no interest in the subject matter of the action.

There are broadly speaking three areas in which I have to decide issues of fact, as follows:-

Ronald's alleged dealings with the land and his alleged manipulation of the defendant and other companies are at the heart of the claim. Ronald's conduct and personality have been at the forefront of the evidence throughout the trial and the claimant alleges that Ronald still has a half share in the land. It is thus a curious feature of the case that Ronald is not a party to the action. At one stage the claimant applied to join Ronald as a defendant but then abandoned the application which was accordingly dismissed. The reason given by the claimant for not joining Ronald was, in short, that Ronald brings pressure to bear on him in litigation (they have been involved in other litigation for some time) with which he is unable to deal financially or, I apprehend, emotionally.

The claimant asks the court for a declaration as to his ownership and also an order for sale. The land has no development value without access. Heltfield owns no property affording access. Those who do are not parties to the action. In particular, Ronald is not a party and not personally bound by any decision I make. It is hard to see how an order for sale would achieve the development value that the claimant seeks, or indeed anything other than to put illegitimate pressure on Ronald.

The defendants did not call Ronald as a witness, nor did they call other persons such as Ronald's nephew Paul Duthie and Ronald’s business associate Mark Lett, who were also involved in transactions in relation to the land. I have been invited by the claimant to have regard to what has been said about them, (in particular as to their probity and credit) by judges in other litigation in which they have been witnesses. However the issue of credibility does not arise in relation to people who have not given evidence.

Witnesses on both sides of the record agreed that until about 6 years ago the claimant and Ronald had a very close relationship. They were in business together for most of their lives, not only in England but also in Cyprus, France and elsewhere. They were involved in many diverse enterprises including freight forwarding, hotels, time shares, a golf club, a stud and bloodstock business and property development. Many if not most of those businesses were conducted through companies. Again, witnesses on both sides of the record testified to Ronald's forceful and engaging personality. He has a flamboyant lifestyle and he is, or gives the appearance of being, a successful and wealthy businessman.

The brothers fell out, apparently over the conduct of their business enterprises, during the course of 1999. The claimant blames Ronald for irregularities resulting in Department of Trade and Customs and Excise investigations and the collapse of part of their empire. He believes Ronald has defrauded him. It is plain from evidence on both sides of the record that Ronald is equally antagonistic to the claimant, and will not pay him anything without a contest. The claimant has a strong feeling of grievance against Ronald. He believes that Ronald is determined to ensure that he, the claimant, will not get his entitlement from any of their businesses and will do anything, legitimately or otherwise, to exert pressure on him. The question for me, however, is whether the claimant has proved that he has the entitlement he claims in this case.

In 1995 the brothers were still on excellent terms. They were working together on a number of ventures, sharing an office at Hever in Kent. The claimant's evidence was that Ronald mentioned the land to him there, having himself been told about it by a man called David Mortimer, a friend of the owner, Mr Butcher, a painter and decorator who lives at no 14 Gravel Road. Mr Butcher owned the land which he used as a paddock for his daughter's pony. The land had potential for residential development but a developer would have to acquire one or more of the adjoining houses (Nos 16, 18, 20 and 22) in order to provide sufficient access to be in a position to apply for planning permission.

The claimant said that he was brought into the deal in about the autumn of 1999 because he had a large sum of cash available from the sale of a horse whereas Ronald was having cash flow problems. Ronald was going through an acrimonious divorce and his wife had incurred a substantial liability on his American Express credit card. The claimant asserted that he and Ronald orally agreed to purchase the land as a joint investment on the express basis of equal contribution and equal beneficial ownership. They also agreed, at Ronald's instigation, that the land would be held for them by Maltcrown, which Ronald told the claimant was a dormant company.

Ronald conducted all the preliminary negotiations with Mr Butcher. The claimant said Ronald told him that the purchase price was to be £44,000, of which £30,000 was to be paid in cash. It is now common ground that on the day fixed forsimultaneous exchange and completion the claimant met Mr Butcher at the offices of Maltcrown's solicitors I.V. Heap and Co. I shall refer to those solicitors for convenience as "Heaps" throughout this judgment notwithstanding various changes in partnership and name. The claimant says that at that meeting he agreed with Mr Butcher to defer £10,000 of the cash payment until such time as planning permission was granted for development of the land. He says he then paid over £20,000 in cash and gave Mr Butcher a note (which I shall call "the IOU" as it was so referred to at trial) in the claimant's handwriting evidencing the promise to pay the £10,000, and the purchase went ahead. The IOU, of which only a photocopy apparently survives, is dated "28.11.95.", signed by the claimant, and reads as follows:-

Mr Butcher maintained that he conducted all negotiations with Ronald, the purchase price was £14,000 as appears in the documents and there was no additional under the table cash element. However, at trial he accepted for the first time that a further £10,000 was to be paid when planning permission was obtained. He said the payment was in consideration of his agreeing not to object to a planning application if and when it was eventually made. He asserted this was an agreement he and Ronald had reached orally at a much earlier stage and that the claimant had nothing to do with it. He disavowed all knowledge of the IOU: if he had seen the IOU he would not have let pass the misspelling of his forename. He said he met the claimant for the first time on the day of completion and their dealings were limited to the delivery and collection of keys.

What took place between the claimant and Mr Butcher on 28th November 1995 is crucial. If the claimant's story is a fabrication, his whole case fails. If however it is true, then it follows as a matter of common sense that the rest of his case on the first issue must also be substantially true. The only first hand evidence of what happened between the claimant and Mr Butcher is comprised in the evidence which they gave in their witness statements and orally under cross examination.

The claimant's evidence, and indeed his case, has changed in a number of material respects since he started this action in the Bromley County Court on 16th May 2001. In part, he attributes the changes to the length of time which has elapsed and the fact that he was suffering from severe stress when the proceedings were issued. However this does not explain the improvement in his recollection by the time of trial. His counsel, Miss Kyriakides, submitted that this is accounted for by other evidence which acted as a trigger for his memory as it emerged, but I am not persuaded by this explanation. The claimant also sought to lay blame on his previous counsel and solicitors, in relation to matters contained in an unsigned witness statement and in his original pleading. He may well, as he says, have refused to sign the statement because he knew it contained some errors. However, from his struggles in attempting to explain his changes of story under cross-examination it is plain to me that both the statement and the original application (which contains a statement of truth signed by the claimant) were prepared on the basis of his instructions. And there are too many changes in his story thereafter to be accounted for by simple error on the part of his legal advisers.

The claimant's unsigned witness statement and his original pleading speak of the purchase of the land as though negotiations began in the autumn of 1995. However it is evident that Mr Butcher is right in saying that he first met Ronald in February of that year as the matter was in the hands of solicitors not long afterwards. Their files show that the parties were ready to exchange contracts by the end of July. That is inconsistent with the claimant's assertion at trial that he knew about the sale all along in some detail and was aware of correspondence about the matter at the Hever offices. It is not however necessarily inconsistent with the claimant's essential case that an agreement with Ronald was reached in the autumn of 1995. The correspondence shows that the purchase went into abeyance between August and November, apparently because Heaps had no instructions to proceed. The defendants could not explain the delay: the claimant's case is that Ronald was short of funds. Indeed Heaps were paid £14,000 in anticipation of completion out of which, when the deal went quiet, £5,000 was used to pay Ronald’s American Express bill.

The claimant also asserted that he knew of Maltcrown and its involvement from the outset and that it was he who asked for a transfer away from Maltcrown when he discovered that Maltcrown was trading. He said that when a company called Weldonhill Limited ("Weldonhill") was suggested as the transferee he opposed it and that was why Heltfield was used instead. However, it is clear that the claimant believed Heltfield was the original purchaser when he was discussing the matter with his accountant Mr Mitchell, who wrote to Mr Blake on that basis. The claimant was plainly still of that belief when he applied to register his caution at the Land Registry. His statutory declaration in support of the caution declaring, "the cautioner provided one half of the purchase money when the registered proprietor purchased the property in 1995" contains a manuscript amendment (presumably in the claimant's hand and certainly initialled by him) naming Heltfield as the registered proprietor who was the purchaser in 1995. Further, his original application (to which Maltcrown was not joined) also alleged that Heltfield was the original purchaser. The claimant changed his case only after Mr Blake had served a witness statement (or the claimant had otherwise been informed by Heltfield's solicitors) that Heltfield was not incorporated until December 1999 and did not acquire the land until April 2000. Miss Kyriakides submitted that after several years he had forgotten the details and his memory needed to be jogged. However I find his insistence that he was party to the decisions to involve these companies unconvincing and suspect that Mr Clargo’s submission is correct that the claimant's recollection in this as in some other material respects was tailored to fit facts as they emerged.

The claimant's accounts of (1) the amount of the purchase price agreed with Mr Butcher (2) the amount of money he, the claimant and Ronald respectively provided, and (3) his arrangements with Ronald as to the payments have all varied over time.

As to the agreement with Mr Butcher, the claimant's case in his original pleading in April 2001 and his unsigned witness statement was that the agreed purchase price was £30,000 plus the deferred £10,000 on the grant of planning permission. The figure of £34,000 plus the deferred £10,000 appears for the first time in his particulars of claim substituted in July 2001.

Turning to the amount of cash provided by the claimant, I observe that in the original particulars of claim there is no mention of cash at all: the allegation is that the price was £30,000 to which the claimant and his brother are said to have contributed equally. The first reference to cash is in the claimant's unsigned witness statement: again it is said to have been contributed equally by the claimant and Ronald. In the witness box, the claimant said that he had £30,000 in cash with him from his own resources (which would be a minimum of 600 notes) when he met Mr Butcher and he paid over the £20,000 from that. By then the discrepancies as to the amounts paid and how the money was provided were such as to cast increasing doubt on the claimant's credibility. In his original particulars of claim and his unsigned witness statement he claimed to have provided £15,000 (half the price of £30,000); in his substituted particulars of claim he claims to have contributed £17,000, £10,000 in cash and half of the £14,000 paid through solicitors. In his signed witness statement of 24th August 2001 he says he paid £17,000 of the cash element, and Ronald paid the money that went through solicitors. In his witness statement of 25th November 2001 he claims to have funded £20,000 in cash, and Ronald the £14,000. In the Amended Particulars of Claim submitted on the first day of the trial he alleged that his contribution was £17,000 in cash and none of the £14,000. In evidence, the claimant was unable to say at what stage, if at all, Ronald gave him the remaining £3,000 of the £34,000. The claimant's final account in cross-examination was, in effect, that the claimant was the source of all the cash element of the purchase price and Ronald either did or 'would have' evened things out in due course.

The evidence about availability of cash related to the sale of Mrs Popely's horse Fleurance. The claimant has deposed that the sale took place on 5th November 1995. Mrs Popely said nothing at all in her witness statement about the horse sale, nor was she cross-examined about it. However Mr Willium van Heyningen, the purchaser, made a witness statement in which he said:

Two documents were adduced in support of this transaction.One is a certificate, dated "November 1995" signed by Mr van Heyningen (not the claimant or his wife) stating that Mrs Popely received the sum of £89,000 as payment for the horse. I agree with Mr Clargo that the certificate is odd and has the look of a document prepared after the event to confirm that a payment was made rather than, as described by the claimant, a contemporaneous bill of sale.The other document is a receipt dated 19th October 1995 signed by the claimant for money received from Mr van Heyningen's father-in-law David Driscoll on behalf of Mr van Heyningen. The sum specified is £30,000, although it is just possible, as Mr Clargo urged upon me, to read the figure as £90,000. Perhaps surprisingly (given that the primary relevance of this transaction is to establish that the claimant or his wife had £30,000 in cash at the relevant time) Mr Driscoll was not called to give evidence. The receipt does not mention whether the money was paid in cash or otherwise, whether the sum was a part payment only or whether the sale was at that stage conditional on veterinary examination or other matters which were mentioned in evidence.

When Mr van Heyningen was cross-examined about the payment he said he could not remember whether he had given cash to his father-in-law in advance or whether he paid him back afterwards. The source was, he said, a trust fund in Switzerland. He was not present when the £30,000 was handed over and when asked why he believed the payment was made in cash he could only say that that was what his father in law had told him. He gave no explanation for why his trust fund would generate cash. He said he had not mentioned the involvement of his father-in-law in his witness statement because he had not seen that it was relevant: as far as he was concerned it was he who had paid the money for the horse. He had been asked to give evidence to confirm that he had bought the horse from Mrs Anne Popely at the relevant time and that was what he had done. He said he saw nothing odd about the certificate and he saw no reason to doubt that he had signed it at the time it was dated.

I am sure that Mr van Heyningen did indeed buy the horse from Mrs Popely in November 1995. There must however be a doubt whether£30,000 was handed over in cash on 19th October. Mr van Heyningen's evidence about this was hearsay only and his recollection of how the money was provided and at what time or times was extremely vague. The fact that there was a cash element in advance might have been supported to some extent by showing what happened to a separate cheque for £59,000. As usual in this case, however, the claimant's account changed over time. At first he said (in his unsigned witness statement and his signed witness statement of 24th August 2001) that the cheque was paid into his wife's account, without any mention that this might have been a joint account. In his witness statement of 25th November 2003 he said that it was paid into his son John's account. Shortly before the trial he said that it had been paid into a joint account in an Isle of Man Bank which no longer had any records.

The claimant's credibility is not assisted by his casual attitude to financial and legal matters. He plainly sees nothing untoward in large unrecorded cash transactions some of which can only be designed to evade tax or for other nefarious purposes. Nor does it seem to him worthy of comment if cash consideration is at variance with that inserted in documentation drafted by solicitors in good faith on the parties' instructions. He treats legalities generally as something apart from the reality of a transaction. In other litigation (J H Popely and others v. Ayton Limited unreported) the claimant, his wife and sons sought, and were refused, a declaration that the company in which their family home was vested held it on a bare trust for them. Mr Charles Aldous QC sitting as a Deputy Judge of the High Court found that the claimant had made a number of false and inaccurate claims and assertions: meetings and discussions about which the claimant gave evidence did not take place at all and there were irregularities in the appointments which he took it upon himself to make of new directors and trustees. Further the claimant admitted in that case, and in evidence before me, that he had improperly signed an equitable mortgage in the name of his son John Anthony Popely. While those matters are not directly in issue in this action, the claimant's change of position and disregard for legalities are entirely consistent with the attitude he displayed in the present case. There is also the matter of application forms signed by the claimant for social security benefits in 1999 and 2000. In all those forms he stated that he owned no land or trust interest in land. When it was put to him that the application was inconsistent with his case, he asserted that when he completed the forms he believed that he had given his interest in the land to his son. The dates do not tie in with a letter written by Mrs Popely about the gift to which I refer below. And even on a benign interpretation of the forms, they are reticent about the claimant's shareholdings and business interests.

On or about 6th July 2001, after these proceedings had been issued, the claimant spoke to Mr Butcher by telephone with a view to obtaining evidence from him.

On 11th July 2001 the claimant called at Mr Butcher’s house without prior appointment. He took Mr Jonathan Mitchell with him, partly as a witness to the conversation and partly, he said, because he thought the presence of a professional man would prevent Mr Butcher from feeling that he was being physically intimidated. Mr Mitchell is a chartered accountant and a partner in Spain Brothers & Co, the firm of accountants which acts for the claimant. Mr Mitchell gave oral evidence but he could not recollect in any detail what was said at the meeting. He did however make an attendance note dated 13th July 2001, which reads as follows:

Mr Mitchell impressed me as a careful professional man and an honest witness and I have no doubt that the attendance note was the genuine fruit of his recollection made something less than two days after the event. But it was not necessarily accurate: Mr Mitchell may have misunderstood or misinterpreted what was said, particularly as he was briefed by the claimant (to whom is he plainly partisan) and evidently viewed matters in the light of what he had been told.

Mr Butcher gave a plausible explanation for having said that he could not find the IOU. This was that on the telephone the claimant had sounded so certain that there was an IOU that Mr Butcher had doubted his recollection and looked to see if he had one. But when pressed as to whether the note was accurate where it said "Barry confirmed that it was at [Heaps'] offices that JHP gave him the document" he responded he could not remember. The significance of the distinction between admitting that he was given the IOU at Heaps' offices and merely addressing the question of where he had previously met the claimant was explained to him by the Court and I have no doubt that he understood it. The question was then put again but he still answered that he could not remember. Mr Butcher appeared concerned, almost painfully so, to depart as little as possible from the factual content of Mr Mitchell's note, even where it could not easily be reconciled with his account of events. This seemed to me more than reluctance to contradict a professional man whom the court might be supposed to favour; my impression was that he did not want to contradict the note because it was accurate. Nevertheless he was adamant that the claimant had not in fact given him the IOU.

I did not find Mr Butcher a wholly reliable witness for a number of reasons. First, and most importantly, because his witness statement (made before he knew of Mr Mitchell's note) made no mention of the deferred payment of £10,000. Secondly, because I received an impression of evasiveness about what he may have said about the IOU at the meeting.

Thirdly, there must be a doubt whether he would have, as he said he did, entered into an agreement about this additional payment (which on his account of the sale was more than 70% as much as the sale price) without any written evidence of it. Mr Clargo, counsel for the defendants, submitted that Mr Butcher had the security of knowing that he could still object to a planning application if he had any doubts about Ronald's promise to pay. That makes no sense: Mr Butcher would not know whether the money was forthcoming until after planning permission had been granted. His own explanation for not requiring a written agreement or promise was that he trusted Ronald. When asked by the Court how he knew he could trust Ronald when at the relevant stage he had only met him twice his only answer was that he just knew that he could. It seems to me that his trust was supported by something more concrete than mere instinct.

My other reservation about Mr Butcher's evidence was his distinct reticence about the full extent and nature of his dealings with Ronald. Mr Butcher accepted that he did a lucrative painting and decorating job in France for Ronald after these proceedings began; he accepted that he has met Ronald since; he disclosed that it was Ronald who asked him to give a witness statement (to the defendants' solicitors whom he called "Mr Popely'ssolicitors") in the action.

There is another important piece of evidence which I should deal with under this head, as it is capable of supporting the claimant's case that, pursuant to an agreement with Ronald, he contributed to the purchase price for the land. This is a letter dated 9th June 2000 written by Mr Blake. In a judgment given at an earlier stage of this action District Judge Brett described the letter as "rather bizarre", and it is certainly completely at odds with the defendants' case. The letter was written in response to a telephone call from the claimant to Mr Blake made at a time when the claimant had fallen out irrevocably with Ronald. Mr Blake accepted the gist of the claimant's evidence about what was said. The claimant told him he owned 50% of the land, that he had paid 50% of the purchase price and that he wanted a letter of comfort to confirm this. He also wanted to know how his interest had been noted by Heltfield. In his witness statement Mr Blake said his response was that he did not know and expected that to be the end of the matter. However he accepted in oral evidence that he also said something along the lines of "I'll speak to Ron and get back to you".

Mr Blake said that he was not in the event able to contact Ronald, even on his mobile phone, since he had gone abroad and could not be reached. Instead, he said he spoke to Mrs Oliver of Aiston Oliver who confirmed to him that there was nothing in her firm's papers suggesting that the claimant had any interest in the land. He then wrote the letter of 9th June 2000, which is on Heltfield's writing paper at the Coachyard address, and reads as follows:

Mr Blake now resiles from the content of the letter. He says that he drafted it himself at a time when he was under great stress because his wife had been diagnosed with cancer; he also says that as a result of a number of phone calls from the claimant he felt intimidated by him and did not want the claimant distressing his wife. He says that he wrote the letter to "get the claimant off my back". However he denies that he deliberately wrote the letter to appease the claimant knowing it to be untrue, nor does he say that he believed the claimant and only subsequently discovered that the claimant had no interest in the land. He said that the letter was "badly drafted"; it was intended merely to record what the claimant had told him and he mistakenly omitted the words "you told me that" in the second sentence.

It seems to me that the letter cannot be adequately explained by bad drafting. The words "I am aware that", "In these circumstances" and "your interest in the property has been formally noted" were deliberately used to give the claimant precisely the comfort that he was seeking. When this was put to Mr Blake in cross-examination he responded by accepting that he had made a grave error of judgment in writing as he did. Mr Clargo submitted that this was a mere error and, moreover, an error which has cost the defendants dear: the telephone call from the claimant had been a fishing expedition and the letter provided the peg on which the claimant has hung his claim.

The claimant referred the letter to Mr Mitchell, who wrote to Mr Blake on 1st February 2001 enquiring how the claimant's interest was recorded, whether by a declaration of trust or an interest in the Heltfield shares. He went on to say that the reason the information was required was because his firm was bringing the claimant's tax affairs up to date and the claimant's interest had been gifted to Andrew Popely at the end of June 2000. There was no reply, so Mr Mitchell wrote a reminder on 26th February 2001. On 21st March Mr Blake replied as follows:

I heard evidence from Mr Malcolm Cunningham, Maltcrown’s sole director from incorporation in 1994 to 1998. Although he had not previously mentioned this in his witness statement, he also said that he was then the owner of the shares in Maltcrown. Mr Cunningham’s account of the genesis of Maltcrown is as follows. In the early 1990s Accor, the French hotel group, was looking for sites for so-called Formula 1 hotels in the M25 corridor. Accor entered into negotiations with Mr Cunningham, who was a builder, to find and develop 20 hotel sites over a period of 3 years. Mr Cunningham knew Ronald (indeed he had worked for and with him over the years) and they agreed, at Ronald’s suggestion, that if Mr Cunningham were to form a company Ronald would use his connections in the property field and find sites on his behalf. According to Mr Cunningham Ronald’s involvement was limited to locating and negotiating the purchase of potential sites. Ronald would in every case lend the purchase price to Maltcrown for the sites he located at an interest rate of some 10%. Mr Cunningham said Maltcrown belonged solely to him and it was his, Mr Cunningham's, decision whether to make a purchase. When a site was acquired and Accor commissioned a hotel Mr Cunningham’s company Pyramid Buildings Systems Limited would build it and that company would pay Ronald commission on the profit. When asked what the commission would be Mr Cunningham said it was not fixed and none was ever paid because no deal was ever completed with Accor. There was no documentation of the arrangements with Ronald: no loan was secured or documented, nor was even the fact of a commission arrangement evidenced in writing.

Maltcrown acquired three properties, all financed by unsecured, undocumented loans from Ronald. One was Crabtree Manorway, an industrial site. This property had belonged to Ronald and he was originally going to sell it to his own company Shellday Limited. Mr Cunningham's explanation for why Maltcrown took over the purchase was to say that it gave Maltcrown “some asset value” and “some substance”, even though Maltcrown’s balance sheet did not increase as a result. At any rate the purchase was made, at the price agreed with Shellday. Maltcrown obtained no independent valuation: Mr Cunningham simply said that Crabtree Manorway “seemed good value” judging by the rent and he was content to accept the price which Ronald had fixed with his own company. A second property, West Kingsdown, was the only potential hotel site. Mr Cunningham said after acquisition it was turned down by Accor and eventually sold to Berkeley Homes for residential development. Ronald then obtained repayment of his loan with interest.

As to the land, Ronald again negotiated the purchase and again lent Maltcrown the purchase price. The land was always unsuitable for hotel development but was, said Mr Cunningham, a potentially good investment if access and planning permission could be obtained. When asked how it would be developed, his answer was “housing, one would assume”. Ronald was not apparently paid anything for his services, although Mr Butcher believed that Ronald had himself paid David Mortimer a fee for the introduction. Mr Cunningham was unable to recollect in what manner the purchase price had been provided. When told that there was a bankers' draft he could not say whether it had come from Maltcrown's bank account or directly from Ronald. Maltcrown itself did not comply with an order of the Court to disclose documents as to the payment.

Heaps were instructed to act for Maltcrown on the purchase. They had been Ronald’s solicitors for many years and the correspondence shows that they accepted their instructions from Ronald in this case, without apparently obtaining any confirmation from Mr Cunningham. Further, all letters written by Heaps were copied to Ronald. Mr Cunningham had no recollection of any details of the transaction, of why the purchase went dead in the summer of 1995, of how the purchase money had been paid or about the settlement of Ronald’s Amex account in the interim. He was also unaware of any additional deal reached between Mr Butcher and Ronald about payment of £10,000 in the event of planning permission.

Maltcrown was managed on a day to day basis from a small office in a portakabin (the size of a large mobile home) called "the Coachyard" in Kent. Mr Cunningham was based in Beverly in Yorkshire. The company secretary who managed Maltcrown's affairs was Mr Russell Miller, who worked at the Coachyard, had a long association with both Popelys and had regularly acted as company secretary and accountant for Ronald. Mr Miller, but not Mr Cunningham, was signatory to Maltcrown’s bank mandate. Maltcrown’s accountants were Bryden Johnson & Co ("Brydens"), who were also Ronald’s accountants, and Maltcrown’s registered office was at their offices. Maltcrown’s accounts for the year ended 31^st March 1997 purport to have been signed by Mr Cunningham but the signature is not his and he said he did not know who in fact signed them in his name. When directed to a letter from Brydens dated12th April 2002confirming "that any correspondence sent to these offices addressed to Maltcrown Limited has been and will continue to be forwarded to Mr R. Popely" Mr Cunningham said that during his directorship he had given no such instructions. He added that he would have expected Ronald to be copied in on correspondence relating to land transactions as a matter of courtesy.

Mr Cunningham retired from Maltcrown in autumn 1998. He was succeeded as sole director by Ronald's nephew Paul Duthie. Mr Cunningham also transferred his shares in Maltcrown to Mr Duthie in consideration of the sum of £2. Evidence on both sides of the record agreed, to a greater or lesser extent, that Mr Duthie was influenced by Ronald and worked closely with him. He had held shares as nominee for Ronald in the past. Mr Duthie was the sole director of Maltcrown at the time of the transfer to Heltfield but according to a company search resigned on 9th February 2001.

Maltcrown wrote to Mrs Tunbridge of Heaps on 11th June 2001 as follows:

It seems to me that Ronald was the person who, directly or indirectly, instigated the collection of the files. Mr Blake accepted in evidence that he believed (or, as he said, "assumed") that Maltcrown was indeed Ronald's company, and the letter of 26th June 2001 plainly indicates that he regarded himself as a courier for Ronald.

All the evidence shows that Ronald was closely involved in the affairs of Maltcrown at every stage and was treated by everyone, including its solicitors and accountants, as having the right to be so. Further it seems to me unlikely that Ronald would with his own money buy investment land with development potential for a company over which he had no control merely on an unsecured loan basis and without any fixed arrangements for commission or a share of the overage. I particularly bear in mind that in addition to the purchase price for the land he probably gave Mr Mortimer an introduction fee and certainly was willing personally to pay Mr Butcher £10,000 in the event of planning permission being obtained. It seems to me that Ronald was in a position where he was able to exercise total control over Maltcrown’s business and the acquisition and disposal of its assets.

Weldonhill was incorporated in March 1999; Mr Duthie was appointed sole director in March 1999 and Mr Blake joined him on the Board on 29th December 1999. Mr Duthie held all the ordinary shares. Weldonhill, Maltcrown and Heltfield all shared the office at the Coachyard. In 1999 (when Mr Duthie was also the sole director and majority shareholder of Maltcrown) it was proposed that Weldonhill would buy the land from Maltcrown. Correspondence between solicitors in December 1999 shows that a purported sale had been agreed in principle at a price of £20,000. Messrs Aiston Oliver were the solicitors instructed to act for Weldonhill and Heaps for Maltcrown. However, it could hardly have been an arms length transaction. The correspondence shows that Mark Lett, (who according to both Mr Cunningham and Mr Blake worked or had worked for Ronald) was not only the person to whom Heaps wrote as General Manager of Maltcrown for instructions and to furnish answers to preliminary inquiries, but also the person from whom Aiston Oliver accepted instructions and sought information on behalf of Weldonhill.

Heltfield had been incorporated in December 1999 and Mr Blake was its sole director. There were two ordinary shares, one of which remained at first with the formation agents and the other of which was issued to Mr Blake. In Heltfield's accounts for the year ended 11th June 2003 Mr Blake is shown as owning both shares; however, in the annual return signed by Mr Blake on 4th January 2004, Ronald's son Darren Popely is shown as the owner of one of the shares.

By 11th January 2000 Weldonhill’s purchase had been switched to Heltfield and by 14th January the price had been reduced to £15,000. Instructions were again received from Mark Lett, but this time "for and on behalf of Heltfield", although Mr Blake confirmed that Mark Lett was never an employee of Heltfield. His letter states the following terms:

Mr Blake said it was Mr Duthie and Darren Popely (Weldonhill’s company secretary) who made Weldonhill’s decision not to buy: they were builders and unenthusiastic about a long term investment. Mr Blake said he decided that the land would suit him instead because it had development potential and he accordingly acquired Heltfield off the shelf for the specific and only purpose of acquiring the land. He said he was happy to use Weldonhill's solicitors for the purchase, as Mrs Oliver's offices had been next door to his when he worked at Barclays Bank and he knew her well. He maintained he spoke to her by telephone and instructed Mark Lett to write the letters on his behalf although Mark Lett was paid by Weldonhill and not by Heltfield. There is no written evidence of any instructions from Mr Blake, nor did Aiston Oliver write to him at any time. He seems to have had little active involvement with the transaction. He did not know whether Heltfield was paying the same price as Weldonhill; he said he agreed the price of £15,000, having simply gone and looked at the land over the wall at the back. He did not look at any of the answers to pre-contract inquiries or ask if there were any title, environmental or other problems affecting the land.

It is the claimant's case that the deferred purchase price was arranged to disguise the fact that no money actually changed hands. Mr Blake's evidence was that the deferral was his idea, because he believed there was a prospect of a subsale to a third party; he mentioned the name of a Mr Beasleigh. Prior to trial, neither Mr Blake nor Heltfield was asked for particulars of how the purchase price of £15,000 had been funded. In cross-examination Mr Blake said that he had lent Heltfield the money from his own resources. The loan, which is undocumented, appears in Heltfield's audited accounts. Once again, as is all too frequent in this case, the assertion is that this money was provided in cash. Mr Blake said he had a large sum of cash available to him, having accumulated a float (in what currency or denominations he did not say) from rents collected from tenants in Portugal. Heltfield had no bank account until May 2000.

There is also the evidence of the aborted transfer to Spacegain. This took place in May 2001, at the same time as Mr Blake was corresponding with Mr Mitchell. Ronald’s partner Mrs Hawley acquired No 20 Gravel Road on 31st August 2001. Miss Kyriakides submitted that it can be inferred that the transfer, made at the expressed consideration of £16,000, was effected with the intention of putting the land beyond the claimant's reach at a time when access was about to be acquired and planning permission could be applied for. The claimant's registration of a caution frustrated this plan and the transaction was reversed for that reason. Mr Blake's connection with Spacegain was concealed by the use of nominee shareholders in Spacegain.

Mr Blake insisted that the Spacegain transaction was quite unconnected with the claimant's claims. In a witness statement he said that the land was transferred:-

I should say something about Mr Blake at this juncture. For most of his working life he worked for Barclays Bank. He met the claimant and Ronald in the 1970s and they developed a close business relationship. He was also friends with both of them, although latterly more so with Ronald. He stressed that he did not like to have to take sides between the brothers but that the proceedings had forced him to do so. I suspect that he is closer to Ronald than he was prepared to admit. For example his wife and Ronald had a joint birthday party at Ronald's chateau in France in or about June 2001. Indeed it may have been that trip to which Mr Blake refers in his letter to Heaps of 26th June 2001. Mr Blake took early retirement from the Bank in 1993 at which time he was a senior corporate manager at the Croydon Branch. He then worked as a part-time consultant for Brydens as he knew Mr Terry Negus the senior partner there and it was through that connection that Ronald became a client of Brydens. Mr Blake also became involved in property development, having about 17 company directorships. He identified one of the companies of which he was a director as a company controlled by Ronald, PDR Investments Limited. He said that he joined the Board of Weldonhill at the suggestion of Mr Negus "who was dealing with Ronald Popely and Weldonhill and was aware that the directors of Weldonhill were Darren Popely and Paul Duthie". Mr Gould, also of Brydens, was Weldonhill's company secretary. He is also incidentally a trustee of Ronald's family settlement.

In some respects I found Mr Blake a credible witness. He appeared to strive to answer questions about personalities and connections between people honestly and candidly. However I found particular aspects of his evidence less convincing. He manifestly wanted to keep his dealings with Ronald as close to his chest as he could. He said that he had no recollection of discussing the land at all with Ronald prior to Heltfield's purchase. That is hard to believe. He assumed Maltcrown was Ronald's company and he must have realised that the land was originally a project of Ronald's. Mr Blake must have met Ronald regularly at the Coachyard.

There is without doubt a continuing relationship between Ronald and Mr Blake in relation to the land, the details of which have not been disclosed. As I have said, Ronald's partner Mrs Jane Hawley acquired No 20 Gravel Road, one of the plots giving access to the land in August 2001. Subsequently, Mr Duthie acquired No 18 and now rents No 20 from Mrs Hawley. Neither Mr Blake nor Heltfield as such had taken any steps to buy the properties on their own account when they came on the market. When Mr Blake was asked about this he admitted that he knew about these acquisitions after the event and that they gave Ronald the opportunity to develop the land. When asked by the Court whether he regarded Heltfield's access problem as having been solved he said that he did: although he had no legal control he had effective control over the access because he now had what he described as "a friend in the camp". I infer that whatever the legal ownership of Nos 18 and 20 Ronald was behind the acquisitions. Mr Blake said that if planning permission were obtained Heltfield would use Weldonhill for the development.

Mr Blake accepted that he has talked about this case with Ronald, probably, he said, about 15 times. It is clear that Mr Blake and Ronald have joint plans for the development. I infer that they do not want to proceed with an application for planning permission until the issues in the action are resolved. The solicitor Mr Blake originally instructed in these proceedings was introduced to him by Ronald in France. Weldonhill has assisted Mr Blake with the costs of the litigation. The links between Ronald and Mr Blake, both directly and indirectly through Mr Duthie, Mr Lett, Mr Darren Popely, Weldonhill, Brydens and in other ways indicate a relationship that is cosy in the extreme. Indeed in my judgment there has always been an understanding between Ronald and Heltfield about the land. The precise nature of the arrangement is a mystery, but plainly there is a joint venture of some kind. Ronald has never been at risk of losing the opportunity to participate. At the outset he was prepared to promise Mr Butcher an extra £10,000 when planning permission was obtained, a promise which Mr Butcher plainly believes is still live notwithstanding transfers between companies. Ronald was also prepared to fund the purchase of Nos 18 and 20 Gravel Way in order to obtain access for the land.

The defendants allege that it can be inferred that any interest the claimant had in the land was gifted to his son Andrew in June 2000. The defendants would have been alerted to the potential gift by Mr Mitchell's letter of 1st February 2001. Mr Mitchell's evidence, which I accept, is that he has never seen a Deed of Gift or other written document demonstrating that a gift was made. The evidence of both the claimant and his wife was that they had told their son that the land was his and thus believed and treated it as his, but they now understand that there was no perfected gift effective under s.53(1)(c) Law of Property Act 1925. However, in January 2001 Mrs Popely wrote to Mr Mitchell in the following terms:

I do not accept Mrs Popely's explanation of her letter. But it does not in my view follow that an effective gift was in fact made. The content of the letter is at best hearsay and depends on what the claimant told his wife, whether it was true and whether her understanding of what he had told her was reliable. In circumstances where the evidence indicates that no formal gift was accepted by Andrew Popely, (indeed, if one were made, he appears in effect to have disclaimed it) I am not prepared to find on the balance of probabilities that a valid gift was made. That disposes of the third issue.

The claimant's case stands or falls on the first group of issues, and they depend in large measure on his own sworn evidence. As I have intimated, I found much of his evidence unconvincing or exaggerated. But the claimant is a man whose sense of grievance and lack of objectivity is such that it is possible that in some respects he may be unaware that he is embellishing his recollection. I therefore have to be careful that I do not reject any kernel of truth that there may be in his case. As was famously said in a different context, a man may tell lies to bolster a true case, or out of panic, distress or confusion.

Moreover, there are aspects of the defendants' witnesses' evidence, in particular that of Mr Butcher and Mr Blake, which are also unsatisfactory. Indeed, as I have made clear, I have found few of the witnesses who gave evidence wholly reliable. I have to steer a way through a mass of exaggerations, evasions and unrecorded cash transactions and distinguish circumstantial evidence from mere speculation in order to decide whether the claimant has made out his case as to the fundamental issue.

First, there is the alleged agreement between the claimant and Ronald. As I have already observed, the fact that the purchase went quiet between August and November 1995 is consistent with the claimant's assertion that he was brought in on the deal at that time because of Ronald's shortage of funds. There was also evidence from a Mr Frank Swann who was apparently engaged by Ronald to provide some unspecified paralegal services irrelevant to the present dispute. Mr Swann said that when they met in April 2001 Ronald told him that he was having trouble with the claimant, and mentioned numerous joint ventures including "a property deal in Bromley". I do not attach any weight to this evidence as it would be reading too much into the remark to interpret it as an incontrovertible admission of any kind. And Mr Swann freely admitted that he has a grievance against Ronald for not paying his fees.

There is also the fact that the claimant undoubtedly knew some of the details of the deal which did not appear from any of the documents, such as the introduction by David Mortimer and the deferred consideration of £10,000. But at the time the deal was progressing the brothers were sharing an office on good terms. The claimant would naturally have been aware of the purchase and some of the details. That knowledge is balanced by his evident lack of knowledge of other matters of which he would be expected to have kept abreast if he had been a participant, such as the progress of the purchase, and, as I have found, the involvement of Maltcrown.

I therefore turn to the claimant's oral testimony that Mr Butcher and Ronald had negotiated a £30,000 cash payment and that the claimant in the event paid £20,000 to Mr Butcher in cash. The payment of the money is completely bound up with the existence of the agreement such that the two stand or fall together. The defendants did not raise any argument based on the principle of reliance on illegality (see Tinsley v. Milligan [1994] 1 AC 340) but such a transaction would plainly have been tainted with illegality. I am not prepared to find that such a serious charge against Mr Butcher has been made good without cogent evidence to support it.

As I have said, the claimant's accounts of the amount of cash contribution have varied so wildly over the course of the action that no reliance can be placed on them without some corroborative evidence. Five matters occur to me.

First there is Mr Butcher's willingness (belatedly admitted) to accept deferred consideration, (which he did not in terms deny would be payable in cash- he merely side-stepped the question) without telling his lawyers about it. That willingness makes it less unlikely that he might have held out for an extra cash payment on the sale itself. It is perhaps noteworthy that Mr Butcher negotiated a price of £14,000 with Ronald without taking any steps to obtain a valuation or information about potential development value. The price was only £2,000 more (ignoring all the expenses of purchase and sale) than the price he had paid for the land some three years before. However these matters do not go beyond speculation and I cannot regard them as providing much support for the claimant's case.

Another factor is the sale of Mrs Popely's horse. As I have said, I am not persuaded that Mr Popely has proved that £30,000 in cash was in his hands at the relevant time. However even if it was, this does not go to prove that he gave any of it to Mr Butcher.

Yet another is the impression that Ronald has indeed taken every step he could to distance the claimant from the land. But against the history of their relationship that is just as consistent with avoiding a bogus claim as evading a genuine one.

The last two matters are the ones that weigh with me the most. One is the IOU. As I have said, Mr Butcher was reluctant to make an absolute denial that he had said, in the presence of Mr Mitchell, that the claimant had given him the IOU at Heaps' offices. This leads me to think that the IOU is likely to be genuine. However, that does not necessarily mean that the whole of the claimant's account of his agreement and the cash element is true. I believe that Mr Butcher was not prepared to exchange and complete the sale without something in writing about the extra £10,000 and that it is likely that he said so when he met the claimant at Heaps' offices on 28th November 1995. The claimant was on good terms with Ronald, they worked together a great deal and their business dealings were what might charitably be described as fluid. He may well have expected to be cut in on the development of the land in due course. Even if his only role was, as the defendants assert, as a messenger on that day, I believe he would have, and in the event did, give Mr Butcher the IOU to enable the sale to proceed. That does not mean that there was a pre-existing agreement with Ronald to share in the venture or that he paid Mr Butcher an additional large sum in cash.

The most compelling piece of evidence for the claimant is Mr Blake's letter of 9th June 2000. Whenever I have been tempted to dismiss the claimant's case out of hand I have come up against that letter. However, it is the only concrete piece of evidence to support what is to my mind a shadowy case and I do not believe that it is enough to tip the balance in favour of the claimant. The pressure that Mr Blake felt under to placate the claimant may well have led him, as he asserts, to write a very unwise letter.

The burden of proof is on the claimant, and, bearing in mind the manifold major deficiencies and inconsistencies in his story, he has in my judgment provided insufficient proof of the agreement with his brother and contributions to the purchase price which he claims. I am bound to add the rider that in view of the unsatisfactory nature of the evidence on all sides I am by no means sure that the claimant's case is a fabrication, but in my judgment he has not made it out on the balance of probabilities. I observe that if a person chooses to participate in an unrecorded cash transaction which is contrary to the legal documentation he has only himself to blame if at a later date he cannot prove to the satisfaction of the Court that it took place.

On that basis the other issues fall away. As I have found there was no trust for the claimant, the issue of knowledge of that trust cannot arise. However, in case I am wrong on the main issue I ought to deal with the others in any event, subject always to the caveats that I have not heard Ronald’s evidence or seen any of his documents and he is not bound by any of my findings in this case. I have indicated my view that Maltcrown was controlled by Ronald. I have also indicated that there was and remains a close connection between Ronald and Mr Blake and that Ronald has an arrangement with Mr Blake, Heltfield and Weldonhill with regard to the land. However the claimant has not to my mind established that Heltfield is owned and controlled by Ronald, that is to say that Mr Blake is and has always been (as he put it) Ronald's stooge.

The outstanding matter is whether Heltfield paid Maltcrown for the land, or whether the transfer was made without valuable consideration for the purposes of s.20(4) of the Land Registration Act 1925 as amended. Having heard the evidence on both sides, the claimant has not satisfied me that the sale was a sham as he alleges. On the other hand the same objection applies to Mr Blake's undocumented cash transaction as to those alleged by the claimant, and the defendants have not proved their assertion that the payment of the £15,000 consideration which appears on the face of the Transfer and in Maltcrown's receipt was in fact made. On that basis I am thrown back on the presumption of regularity, a presumption that gets stronger as time goes by. If I had to decide this issue I would decide it against the claimant.

No separate (or indeed any substantial) case was put forward for ownership of the shares in Heltfield so the claimant's case must fail on that head also.

In these circumstances the defendants are entitled to an order that the claimant's caution at H M Land Registry be vacated.