Lewis v Eliades & Ors

This is a trial of one of several pieces of satellite litigation between Mr Lennox Lewis (“Mr Lewis”) and his former business manager and promoter “Mr Panos Eliades” (“the Defendant”). The Second and Third Defendants are administrators of the estate of the late Mr Aristos Kaissides pursuant to a grant issued out of the Oxford District Probate Registry on 28 April 2003. Mr Kaissides was a Cypriot national and the grant to the Second and Third Defendants was ancillary to a grant of letters of administration in respect of his estate in Cyprus (he having died intestate on 11 April 2000). On the first day of the trial the Third Defendant, Mr Menelaou, was replaced by Mrs Claire Kaissides who is married to the nephew of the deceased, Athos Kaissides. A revised grant of letters of administration had been granted reflecting that replacement.

Mr Lewis was until February 2004 (when he retired undefeated) a professional boxer and the World Heavy Weight Champion. Mr Panos Eliades was from 1991 to about the end of 2000 his business manager and promoter of contests in which Mr Lewis participated. That relationship was formerly governed by an agreement in writing (“the Promotion Agreement”) dated 19 February 1991 between Mr Lewis (1), Frank Maloney (2) (his manager), Products of Far East Ltd (a Jersey company) (3), and John R Hornewer (4). Products of Far East Ltd was the offshore corporate vehicle designed to be the recipient ultimately of the entitlement to its percentage of fees received for endorsements events. Under clause 4 Products of Far East Ltd (“the Management) agreed to provide various sums of money and services to Mr Lewis including, under subclause (k)(i) to secure for and reasonably furnish free of change to Mr Lewis living accommodation in England which was to be mutually agreed between the Management and Mr Lewis. In addition to the provision of the rent free accommodation, various ancillary services were also required to be paid for by the Management, namely, housekeeping, rent and rates, laundry services, grocery and cooking services.

The activities of Mr Panos Eliades were carried out under the umbrella of this offshore company although (for fiscal reasons, as I understand it) an English company was formed, Champion Enterprises Ltd, which was a company of which Mr Panos Eliades was the sole director from its incorporation in April 1991 until his resignation and replacement by Mr Maloney on 1 September 1992. Nevertheless he held 99 of the 100 shares at all material times, the other one being held by an employee for him. The beneficial interest behind the Jersey company remained obscure and is irrelevant to the issues before me. Suffice it to say that through these corporate vehicles Mr Panos Eliades provided his services which were to be the services required to be provided by the Management under the Promotion Agreement.

The relationship between Mr Lewis and Mr Panos Eliades ended acrimoniously in the latter part of 2000. Shortly thereafter he, through companies owned by him (Panix Promotions Ltd and Panix of the US Inc) sued Mr Lewis in the courts in New York. The principal claim against Mr Lewis was that he had terminated the relationship in breach of an oral agreement allegedly granting Mr Panos Eliades’ companies extended terms as manager, as a result of which it was alleged that Mr Panos Eliades’ companies had suffered losses of some US$100million. Mr Lewis denied the claims and counterclaimed against both Mr Panos Eliades and his companies for damages for fraud, breach of fiduciary duty, breach of contract and damages for racketeering under the Racketeer Influenced and Corrupt Organizations Act (“the RICO Act”).

The action came before the judge sitting with a jury in the United States District Court for the Southern District of New York in February 2002. The court heard the testimony of both Mr Lewis and Mr Panos Eliades (substantial depositions having taken place in accordance with US Court Procedure in the previous November and in January 2002). The claims against Mr Lewis substantively failed and he obtained judgment against Mr Panos Eliades and his companies for damages for fraud, breach of fiduciary duty and under the RICO Act in the sum of US$7,273,641 on 15 March 2002, and a further sum of US$792,164 subsequently.

Mr Lewis sought to enforce the New York judgment in this jurisdiction. On 1 August 2002 he obtained judgment for US$6,273,641 which took into account an agreed set off of US$1million owed by Mr Lewis to Mr Panos Eliades and his companies. Mr Panos Eliades and his companies appealed to a High Court judge who dismissed the appeal. The Court of Appeal dismissed their second tier appeal but (with the consent of Mr Lewis) reduced the amount of the English judgment to US$5,877,559 (removing the RICO Act judgment). The House of Lords dismissed Mr Panos Eliades and his companies’ petition to appeal.

As a result of being in a position to enforce the judgment Mr Lewis took steps to enforce his judgment against Mr Panos Eliades’ assets. No payment whatsoever has been made by Mr Panos Eliades and his companies in respect of the judgment.

Both sides indulged in a little exaggeration of their respective claims. Mr Panos Eliades’ claim was for US$100million, as I have said. Mr Lewis’ claim was for US$24million with the possible tripling of that figure under the RICO Act. The actual recovery was, as I have said above, was US$8million approximately.

During the New York proceedings Mr Panos Eliades was examined as to his net worth. Mr Lewis in the New York proceedings alleged that large numbers of assets (including the property the subject matter of this action) belonged beneficially to Mr Panos Eliades and that his actual worth was far greater than the virtually non-existent worth that he had previously disclosed. In this context, in addition to the apparently poor state of Mr Panos Eliades’ finances disclosed in the New York litigation, in evidence before me he (and his brother Christos) gave evidence to the effect that Christos was owed £3million by Mr Panos Eliades arising out of the costs he incurred in the unsuccessful defence and prosecution of his claim in New York. The financial decline of Mr Panos Eliades seems spectacular given the apparently large amounts gross that he earned under the Promotion Agreement (which appeared to have carried on informally after the expiry of the 4 year contractual term). There may be reasons for this; it was not gone into in any detail before me and forms no part of the present dispute.

The dispute is in respect of the property (“the Property”) known as 39 Beech Hill, Enfield. Mr Lewis has occupied the Property since about 1993 pursuant to the terms of the Promotion Agreement set out above. Prior to that he had been managed by Frank Maloney who was funded by a Mr Roger Levitt. Mr Maloney remained his boxing manager even during the period of the Promotion Agreement. In 1993 Mr Lewis was living in a property in Crayford, Kent, which had been provided under the Management arrangement. He gave evidence to the effect that the lease on the Crayford property was about to expire but Mr Panos Eliades denies that. Nothing determines on that issue in my judgment. He became the occupier of the Property in around 1993 and has used it as his UK residence ever since. I will set out further in this judgment in more detail but that is sufficient for the present purposes of setting the background.

After the judgment was obtained Mr Lewis sought execution. He believed that the Property belonged to Mr Panos Eliades. On 27 April 2004 Mr Lewis obtained an interim charging order over the Property. As I have said, the Property is one of a number of properties in respect of which Mr Lewis contends Mr Panos Eliades is the true beneficial owner.

Shortly before the commencement of the trial in New York, lawyers on behalf of Mr Lewis obtained a without notice freezing order on 15 January 2002 from Pitchford J. The Property was included in the properties covered by the freezing order. It is referred to in the evidence of the affidavit of Judd Burstein sworn on 18 January 2002. Mr Burstein was Mr Lewis’ US attorney and the Property is referred to in paragraph 20(7), where the question of the disputed ownership is set out as it appeared at that time. McCombe J was extremely critical of the obtaining of the freezing order and so indicated at the start of the application to discharge. Mr Lewis’ lawyers, seeing the way the wind was blowing, withdrew the application for the injunction and agreed to pay Mr Panos Eliades’ costs on an indemnity basis. Nevertheless, McCombe J delivered a judgment which was extremely critical of the way in which Mr Lewis obtained the freezing order affecting properties of third parties with evidence which was said to be flimsy or non-existent.

He also indicated that his immediate concern was that the application for a freezing injunction was a tactical one (a theme reverted to at the trial before me by Mr Holland on behalf of Mr Panos Eliades) designed to inhibit Mr Panos Eliades in the prosecution and defence of the New York trial which was shortly to take place. I can well see the force of those submissions and the suspicion that the freezing order generated but this too is not material to the issue which is relevant for my adjudication.

Equally, after the freezing order was discharged in respect of the Property a caution was registered against the title asserting that Mr Lewis had a beneficial interest in the Property by virtue of the substantial expenditure that he incurred in relation to it. The application was supported by a declaration sworn by Mr Chopra, then Mr Lewis’ accountant, supporting that assertion. It is difficult to see any credible basis for such a claim. Mr Lewis at all material times had been a tenant of the Property (a point conspicuously absent from the declaration). I suspect that the lodging of this caution was a tactical decision in order to prevent the registered proprietor, Mr Kaissides, or rather his estate, disposing of the Property. It would of course always have been open to the registered proprietor and the personal representative as successor to have applied to the court for the vacation of the charge. However, that was unlikely to have achieved anything as it would presumably have attracted the proceedings in the present form coupled with an application to preserve the caution against an undertaking in damages in the usual way. There was a time lag of course between the lodging of the caution (25 February 2002) and the present proceedings on 22 December 2003.

The New York litigation was acrimonious and resulted in a substantial success on the part of Mr Lewis (although far below his lawyers’ apparent expectations). In the course of the depositions and at trial, as I shall set out in this judgment, Mr Panos Eliades told a large number of lies. He gave reasons for that before me and further in this judgment I will evaluate the impact the lies have on the credibility of his testimony before me and evaluate the reasons he gave for lying as he did in New York.

In the present proceedings Mr Lewis (for the purposes of the successful enforcement of his charging order) seeks a declaration that Mr Panos Eliades is the true beneficial owner of the Property and that the Second and Third Defendants as administrators of the estate of Mr Kaissides hold the Property upon trust for him. In the alternative, he seeks an enquiry as to what his beneficial interest is and a declaration that Mr Panos Eliades is his landlord in respect of the Property, or alternatively, that he and the other Defendants are estopped from denying otherwise.

As the trial developed the only live issue realistically was whether or not Mr Panos Eliades is the beneficial owner of the Property.

There is further satellite litigation concerning the Property. It is alleged that there was an agreement made in August 2000 for the rent of the Property payable by Mr Lewis to be increased with effect from September 2000 from what was accepted to be a relatively low amount of £1,500 per month to £6,000 per month. If there was any such agreement (and Mr Lewis denied that there was any such agreement) it was oral.

When the Second and Third Defendant’s present solicitors came on the scene they realised that such an agreement, if disputed, could be addressed by serving a notice under the Housing Act 1988. Accordingly a notice was served on 26 August 2003 under section 13(2) proposing an increase to £6,500 per month. That was taken to the Rent Assessment Committee which stayed the application on 3 November 2003 pending a decision on the beneficial ownership of the Property. Whatever the result of these proceedings (i.e. even if Mr Lewis wins) he will ultimately have to account for rent on the Property which has not been paid since early 2001. Of course if it is determined that Mr Panos Eliades is the true beneficial owner he will assert a set off by virtue of the judgment which he has obtained. If of course Mr Kaissides is found to be the beneficial owner he will have no such right of set off but ultimately will be liable to pay back rent to his estate. That amount will have to be agreed or determined by the Rent Assessment Committee after the judgment in this action.

The Defendants’ stance is that the Property belonged to Mr Kaissides beneficially at his death and had passed to his wife and children under the Cypriot laws of intestacy. The Property is now worth approximately £1.7-1.8million. As will be seen from the title documents to which I refer later in this judgment Mr Kaissides became the registered proprietor of the Property on 13 December 1989 following the registration of a transfer in his favour on 25 July 1989. The essence of the Defendant’s stance is that the conferring of the legal title by registration upon Mr Kaissides, by registration, by presumption carries any beneficial interest unless the contrary is shown. The burden of proving the contrary is on Mr Lewis (this was accepted by Mr Ian Mill QC who appeared for him in this trial). Mr Lewis cannot of course adduce much direct evidence to support his contention that Mr Panos Eliades was the true beneficial owner of the Property although he does give some evidence in that regard. The major part of Mr Lewis’ case is one based on inference, namely that there is a significant number of witnesses who could have given evidence on behalf of the Defendant and the Second and Third Defendants but chose not to, or chose not to attend to give oral evidence. In addition, there is a surprisingly large amount of documentation whose absence is unexplained and there are observations on such documents as survived which also throw doubt on the contention on the part of the Defendants that Mr Kaissides was the beneficial owner of the Property.

The Property was acquired by Mrs Eliades (Mr Panos Eliades’ wife) by a transfer dated 1 November 1983 paying a price of £300,000. The entirety of that purchase price was provided by Mr Panos Eliades as a gift to his wife. She was registered as proprietor on 6 February 1984. Mr Panos Eliades also gave her £50,000 to carry out some work at the Property. Initially, the Property was apparently purchased by her to be nearer her sister. However, she found the travelling to the Property from Creighton Avenue, which would be necessary when taking children to school, tiring and in 1986 she had a change of heart about moving out of London. She agreed with Mr Panos Eliades that she could look for a house in Highgate or Hampstead. In May 1987 she found a property (where she still lives) Compton House, Compton Avenue, Highgate, which was purchased for a price of £1,552,000. In order to finance that it would have been necessary to sell the Property and she put it on the market with Blade & Co for £997,500 (there being no mortgage on it). An offer was received subject to contract from a Mr Matheou for £950,000 but by August 1987 it became apparent that he was not in a position to proceed and the Property was remarketed. Compton House, in the meantime, was purchased in August 1987 with bridging finance of £950,000, obtained by Mr Panos Eliades from the Cyprus Popular Bank which took a first charge over Compton House as security. Thus Mr Panos Eliades gave his wife £350,000 in 1984 to enable her to purchase the Property outright in her own name and then enabled her to buy the Compton House property which involved him giving her another £600,000.

There may well have been reasons for all of this but they were not examined at trial. I found Mrs Eliades to be an honest, straightforward and truthful witness. She was determined to own a substantial property in her own name in which to bring up her children. That attitude reflects a conversation which took place between her and Mr Lewis when he first went into occupation of the Property, to which I shall make reference. I am quite sure that she was not aware of any dealings with the Property beyond her own desires. She wanted the Property as hers and that is what it was until it was subsequently sold. I do not think she knew anything of substance about Mr Panos Eliades’ business dealings and the arrangement of his affairs. I should say that while she remains married to Mr Panos Eliades (having married in 1974) they separated in 1997 as a result of an affair he had with another lady. It is clear there was some deception of Mrs Eliades by Mr Panos Eliades in respect of his new relationship but none of that affects the clear impression of truthfulness given by Mrs Eliades as a witness. Indeed, as appears later in this judgment, her determination to have a property free from charges for her to exercise control over, free from any financial pressures was, in my judgment, the reason why the Property was transferred to Mr Kaissides as I set out below.

After the failure to sell to Mr Matheou various tenants occupied the Property. A Mr Chatwell started to occupy the Property in 1988 for about a year paying a rent of £15000 per annum. Thereafter a Mr and Mrs Bassett occupied it for the period August 1990 to August 1991 paying £1,000 per week. The rent was paid through the company Victory Church Ltd. Some bank account statements in respect of a bank account at Barclay’s Bank in the name of Mr Kaissides were produced.

No documentation about the leases has survived. Mrs Bassett’s evidence was unclear and she clearly had no direct involvement in the negotiation of the lease and she was unable to recall who the landlord was, for example. Mr Panos Eliades contended that any documentation would have shown Mr Kaissides as landlord although, as I have said, he did not produce any documentation in respect of the various leases of the Property.

It will be seen that the amount of rental paid by Mr Lewis from 1993 (£1,500 per month) was a substantial reduction on the rental being paid on behalf of Mr and Mrs Bassett. Mr Panos Eliades in his evidence suggested that there were two reasons for this. First, twelve months’ rent of £1,500 per month was better than £1,000 per week for shorter lets with voids. I pointed out to him in the course of his evidence that for that transaction to be better the voids must be around 8 months a year. He suggested to me initially that the Victory Church payments were only £26,000 but it was shown in cross-examination by Mr Mill the next day, having analysed the bank statement, that close on £52,000 had been paid by Victory Church Ltd for 12 months’ occupation. I found Mr Panos Eliades’ first reason therefore unconvincing. His second reason was that he sold it to Mr Kaissides on a “jam for tomorrow basis”, namely that Mr Lewis was a rising boxer and that was all the rent he could afford to pay, but that when he became more successful and more famous, he would be able to pay a greater rent. This too I found unconvincing for a number of reasons. First, by the time Mr Lewis went into occupation, he had already won the WBC heavy weight title and had earned significant earnings by that time. It is true that he suffered later setbacks and rose to even greater heights, but it is difficult to see how it could have been said by Mr Panos Eliades with any credibility that Mr Lewis would have been unable to pay a full rental for the Property in 1993 because of his early and thus tentative career prospects at that time. Even more convincing in my judgment is Mr Lewis’ evidence which turns on the Promotion Agreement. Mr Panos Eliades was obliged to provide the accommodation rent free and in effect negotiated a figure of £1,500 per month which was the most that Mr Lewis was prepared to pay as his contribution to a larger property to alleviate the obligations to pay the full cost. Second, I can see no advantage to Mr Kaissides agreeing that he would take such a reduced rental at that time. If he had purchased the Property for just over £1million, £52,000 per annum would have represented a 5% return on his capital (ignoring capital growth) whereas £18,000 per annum would have represented a modest 1.56%. Given the interest rates that were around in the early 1990s that is an improbably low return. This is a supportive piece of evidence in favour of Mr Lewis that in effect Mr Panos Eliades was the owner of the Property and was simply concerned to extract what he could from Mr Lewis as contribution towards his property.

Although the rentals received from Victory Church Ltd were paid into a Barclays Bank account in the name of Mr Kaissides, no cheque payments were made out to him. Mr Panos Eliades’ evidence was that he managed the letting and prepared schedules of expenses against the rent which he gave to Mr Kaissides from time to time. He also gave evidence to the effect that Mr Kaissides kept details of the gross rental in a little rent book of his own. None of these documents have survived. Nor is there any evidence of any payments out of the Kaissides account in favour of Mr Kaissides. Mr Panos Eliades’ evidence is that during that period he would withdraw cash (there is evidence of cash withdrawals) and hand it over to Mr Kaissides or use it as a counter against expenses being occurred by Mr Kaissides’ children whilst they were in the United Kingdom having university education. No documentation to support this arrangement has survived and (significantly) none of the daughters (although available) has come to court to give evidence to substantiate the relationship between Mr Panos Eliades and their father.

By the time Mr Lewis came on the scene as tenant the only evidence showing rent payment was a running account which Mr Panos Eliades prepared to show to Mr Lewis’ brother from time to time. This recorded expenditure incurred by Mr Panos Eliades on behalf of Mr Lewis. The items on the schedules are wide ranging and cover a vast array of expenditure. Mr Lewis’ brother (completely untrained) apparently reviewed these documents although with what result is difficult to see. He was paid approximately £2,900 per month for this exercise but by September 2000 he had ceased this task.

In August 2000 Mr Panos Eliades contended that Mr Lewis agreed to pay an increased rental of £6,000 per month. Mr Lewis denies that and I prefer the evidence of Mr Lewis. I note that the documentation on the running account shows the increased rent being taken in 3 monthly tranches, but I accept Mr Lewis’ evidence that he and his brother overlooked these items. By that time the relationship with Mr Panos Eliades was terminal and dissolved in acrimony at about the same time. This is the reason, in my view, why Mr Panos Eliades sought to increase the rent. He was no longer receiving monies under the Promotion Agreement because of their dispute and this was a way in which he was seeking to extract further monies from Mr Lewis.

As I have said above, the Property was put on the market unsuccessfully in 1987. Nothing happened with regard to sale and Mrs Eliades (quite understandably with the passage of time) was unable to recall whether the Property was formally remarketed. I suspect it was not. It seems to me that what happened was that Mr Panos Eliades came under pressure from Mrs Eliades to remove the charge over Compton House. The bank statements in respect of the bridging loan account have been disclosed by Mr Panos Eliades, having been found belatedly by Mrs Eliades in a drawer in Compton House when she was clearing things out. They show that on 5 August 1987 a sum of £950,000 was debited to the account. The notation on the entry is “ADV” which is a separate advice. That is not available. Between that date and 27 February 1989 £50,000 was credited by a cheque and significant sums of interest were rolled over. By 27 February 1989 the indebtedness had accrued to £1,035,087.44. That was reduced to £929,384.70 by a payment of £105,702.74. On 28 June 1989 £800,000 was further added and interest two days later was debited in the sum of £32,572.09. On 26 July 1989 a further £198,031.69 was credited and stated to be “sundries”. That was sufficient to clear the outstanding balance. The amounts credited to the account totalled £1,153,733.

Mr Panos Eliades produced no other documentation in respect of this account. There were suggestions that there were other bank accounts in his name with the Popular Bank of Cyprus, but no documentation was produced. The amount paid for the Property, according to the transfer by Mr Kaissides, was £1,150,000 i.e. within £3,000 of the amount which had been paid into Mr Panos Eliades’ account with the Popular Bank of Cyprus. The transfer was dated 25 July 1989. There are a number of curiosities about this document. First, Mrs Eliades has signed it. She filled in the part of the transfer attributable to the transferee rather than the transferor. The part attributable to the transferor is blank. Mr Kaissides therefore never signed the transfer. Second, the stamp duty on the transfer (some £11,000) was not paid until 8 December 1989 when the documents were lodged at the Land Registry. The documentation was prepared by Mr Christos Eliades, Mr Panos Eliades’ brother. He was a solicitor who the previous year had been convicted of false accounting and sentenced to a short period of imprisonment. He was no longer acting as a solicitor and he was struck off the rolls in November 1989. He apparently did the conveyancing, acting for both sides because they were friends. The application form was dated 25 July 1989 and was signed by Mr Panos Eliades but not lodged by him until December 1989. The revenue form PD1 is apparently signed by Mr Kaissides, but I have no evidence independent of that signature showing that that is his signature. No other documentation signed by him has been produced.

Mrs Eliades gave evidence about the sale.

Mr Kaissides was married to a cousin of Mr Panos Eliades. I will say a little more about Mr Kaissides further in this judgment under a separate heading.

Mrs Eliades said that Mr Kaissides was well aware through discussions of her financial position and knew that she was looking to sell the Property and repay the bridging loan obtained by the First Defendant. Mr Kaissides was a manager at the Larnaca branch of the Popular Bank of Cyprus. She said in her evidence that Mr Kaissides asked whether she would sell him the Property and the price of £1,150,000 was agreed. In her evidence before me she said she was disappointed because she thought the Property was worth more. She gave evidence in a witness statement showing that the monies were paid by him in two transfers of £800,000 on 28 June 1989 (reflecting the bank account above) and £350,000 on 25 July 1989 enabling the bridging loan to be repaid. As is seen from the statement, some £160,000 was not received into the account. No documentation has been produced by the Second and Third Defendants showing that the monies credited to the account came from Mr Kaissides. I suspect Mrs Eliades did not know precisely where the money came from.

Having seen her in evidence I am satisfied that Mrs Eliades genuinely believed she was selling the Property to Mr Kaissides for £1,150,000. The purpose was to ensure that the bridging loan was cleared off her property Compton House. She clearly thought the Property was worth more and I do not believe she would have allowed (for example) her husband to have acquired the Property at a figure which represented virtually precisely the amount charged against Compton House.

It does not follow however, that merely because Mrs Eliades believed it was a genuine transaction that it was a genuine transaction whereby Mr Kaissides bought the Property in his own name and in his own right.

It is appropriate at this stage in the judgment to say a little about Mr Kaissides. Apart from being married to Mr Panos Eliades’ cousin, he was apparently on friendly terms with Mr Panos Eliades and to a lesser extent, Mrs Eliades, for a number of years. He was the bank manager in the Larnaca branch of the Popular Bank of Cyprus from 1987-1990. From 1990 he was the manager at Nicosia until his retirement in 1994. It appears that in 1987 he would have been earning CY£13-15,000 per annum (approximately £18,000 Sterling). Mr Athos Kaissides, the husband of the new Third Defendant and nephew of Mr Kaissides also works for the Popular Bank of Cyprus in London. Neither he nor his wife (despite her joinder as a defendant) has given evidence before me. Mr Karis, the Second Defendant, one of the administrators of Mr Kaissides’ estate is a solicitor and he too worked for the Popular Bank of Cyprus from 1991 to 1999. He knew Mr Kaissides from the mid 1980s when he came to London. When Mr Karis went back to Cyprus he apparently did not know how Mr Kaissides could have amassed such a large amount of money. He excused this by saying that Mr Kaissides was a reserved man and did not discuss any personal matters except bank business. That is all very convenient but I have not heard any direct evidence from any other members of his family. His wife has served a statement under the Civil Evidence Act 1995 because she is in Cyprus and may be unwell. All she does by that statement at best is verify matters set out in Mr Karis’ witness statement. He gives no evidence about Mr Kaissides finances save generally in paragraph 16-18. He is told by Mrs Kaissides that the family “have assets worth CY£4,670,000” but no information is provided to enable that assertion to be tested let alone to be verified. He said that the estate in Cyprus was worth some £75,048 but as the agreed statement of Mr Pittas on behalf of the Claimants’ shows, the estate account omitted the property, 1 Iona Nicolaou Street, Nicosia, where Mr Kaissides lived and his widow still lives. That had been valued at CY£50,000 but was subject to a charge in favour of the Popular Bank of Cyprus of CY£54,772.21. The loan was settled outside the estate and the property was transferred in equal shares to Mr Kaissides’ widow and to one of his daughters. It follows that the estate in Cyprus was barely solvent and the house was only preserved by third party funds (unidentified).

None of these show the trappings of someone who has £1,150,000 in cash in 1989. That is a considerable sum by any stretch of the imagination and would have been even more considerable in 1989. No documentation has been produced by any of the defendants showing that those monies actually came from Mr Kaissides and no information has been disclosed showing how Mr Kaissides had access to those apparently large sums. There were hints of possible land deals and tax avoidance and a reluctance to reveal the sources but that in my view is not enough. Mr Kaissides’ modest status cried out for an explanation when placed alongside his ability to provide such a large sum of cash. None was forthcoming. The best that could be said is that Mr Kaissides was a private man or did not explain his financial dealings to his widow, nor apparently, to his adult children. They as I have said, were educated in this country. They are all still alive and however private he might have been in his lifetime he must presumably have kept some evidence showing the accumulation of this large amount of wealth. Any desire on his part to keep matters private during his lifetime disappears on his death. I have had no explanation as to why no documentation is available nor have I had any explanation as to why this significant body of witnesses could not in some way or other have come to court to explain the financial affairs of Mr Kaissides. I will consider the implications of that failure further in this judgment. Equally, although Mr Panos Eliades claimed to be managing the letting of the Property on behalf of Mr Kaissides, the evidence he produced was scanty. As I have already said, he prepared schedules but none survived. He obtained no receipts for cash sums handed over to Mr Kaissides and although he was an agent in respect of an offshore resident, he was either not aware of the obligation or deliberately failed to deduct tax as required by the Taxes Management Act 1970 section 78 (varied as from 6 April 1996). Mr Kaissides was never registered so for all the period when Mr Panos Eliades was allegedly collecting rent on his behalf, he was obliged to deduct tax at source, but he never did. Equally there is no evidence showing that Mr Kaissides ever declared any income in Cyprus just as there is no evidence from the Second or Third Defendants (or Mr Panos Eliades for that matter), beyond Mr Panos Eliades’s assertion that Mr Kaissides ever provided anything towards the acquisition of the Property.

Some electricity bills and other utility bills in the name of Mr Kaissides were produced but there is no evidence showing that any of these was generated directly by Mr Kaissides. There is evidence showing that they were generated by Mr Panos Eliades, see for example the Lee Valley Water Company bill addressed to Mr Kaissides care of Mr Panos Eliades. The same occurs in respect of the Community Charge bill which is addressed to Mr Kaissides at Mr Panos Eliades’ business address in Bloomsbury Square. All of these documents do not, in my view, lead necessarily to a conclusion that Mr Kaissides is the Property owner as they appear to be closely connected to Mr Panos Eliades. There is nothing produced which emanates from Mr Kaissides, as I have said. In short, there is nothing of any credible nature beyond the testimony of Mr Panos Eliades which links Mr Kaissides as being the genuine owner of the Property. I discount Mr Panos Eliades’ evidence for the reasons I have set out below.

Mr Lewis gave evidence. I found him to be a calm, measured and credible witness. Where his evidence differed from that of Mr Panos Eliades I unhesitatingly preferred Mr Lewis’. There was a slight difference in my view between Mr Lewis’ evidence and that of Mrs Eliades when he first occupied the Property. He said that she said the Property had been kept for “her and her kids”. Mrs Eliades denies having any such conversation in that way. One has to make allowances for the fact that this is a casual conversation that took place nearly 12 years ago. It is quite possible that Mrs Eliades could have said this was a house which “me and my kids were going to live in” (which was her original intention) and Mr Lewis elided that with the conversations he had with Mr Panos Eliades about the Property. This to my mind is not significant and demonstrates that very few people can seriously remember the precise detail of conversations that took place many years ago. It does not lead to the conclusion that either of them is untruthful, but merely reflects slight distortions which can give a different impression. Mr Lewis’s evidence is quite clear that the abiding impression he was given by Mr Panos Eliades was that the Property was his. He had never heard of Mr Kaissides until they fell out. I accept that evidence.

Mr Lewis called Mr Patrick Charles English, a US attorney. He gave evidence about Mr Panos Eliades mentioning on a number of occasions that Lennox lived in his house. He said in his witness statement that he could not recall any particular incident but then changed his live evidence and recalled that it took place at a New York dinner when Mr Panos Eliades was recalling various people who had lived in the Property. One of those was apparently Miss Samantha Fox. Mr English had never heard of her and she was described by Mr Panos Eliades to him. All of this was not in his witness statement. Equally he made no reference to the fact that at one of the deposition hearings, taken over the telephone in London in preparation for a committal application to be made by Mr Lewis in the New York proceedings, he participated as counsel on behalf of Main Events, the company for whom he acted. During that session he asked questions about the Property and the ownership by Mr Kaissides. He asked specifically whether or not he told anyone that he (Mr Panos Eliades) had ever owned the house. The answer given then was no. Yet according to his testimony before me, Mr English knew that was untrue because his evidence before me was that Mr Panos Eliades had told him before that that he owned the Property. He did ask a series of questions however, which made reference to the fact that he knew that some church had rented the Property and that Samantha Fox had rented the Property. He made a joke in poor taste about Miss Fox’s attributes. He can only have received this material, in my view, from Mr Panos Eliades. The fact that he did not recall this in his witness statement but did recall it when the deposition transcript was put to him, in my view, supports his evidence. I did not believe that his evidence was set up to draw the transcript in when that could easily have been done in his witness statement. It was dependent on being extracted in cross-examination and could not be guaranteed. I accept Mr English’s professional embarrassment which would have prevented him from putting to Mr Panos Eliades challenges based on his own knowledge. It is clear that on the transcript he obtained information about the tenancies which could only have come from Mr Panos Eliades. I can see no other reason why he would know about those tenancies unless Mr Panos Eliades had told him. I cannot imagine Mr Panos Eliades telling him about the tenancies if the Property was owned by Mr Kaissides unless it is mere embellishment by Mr Panos Eliades.

I have the evidence of Mr Lewis’s US attorney, Mr Hornewer, who negotiated the Promotion Agreement on his behalf and signed it as a party. He too recalled a conversation whereby Mr Panos Eliades told him that the acquisition of the Property was a good deal because he had picked it up in liquidation and put it in his daughter’s name, and would derive a benefit out of having Mr Lewis living there because his daughter would get some rent. He could not remember where or when this conversation took place. This is a bizarre conversation for a number of reasons. First, factually it is completely incorrect; the Property was never in his daughter’s name, nor was it ever acquired in a liquidation. Second, I found it surprising that Mr Hornewer, whilst acting for Mr Lewis, would not be concerned when the person on the other side of the table, as it were, boasted about his ability to hide assets and make himself non-available for honouring obligations. It will be remembered that Mr Hornewer allowed Mr Lewis to enter into an agreement with a Jersey company, which had no apparent assets. Mr Hornewer apparently did not know the significance of a Jersey based company and apparently made no investigation as to the financial worth of such a company, which was going to collect all of Mr Lewis’s money. I did not find Mr Hornewer to be a particularly impressive witness, and I do not accept what he said. It simply does not make sense.

Nevertheless the evidence of Mr Lewis and that of Mr English suggests that Mr Panos Eliades was representing to them that he owned the Property. By itself that would not have been determinative of the case in favour of Mr Lewis because the evidence is not particularly strong. It is explicable on the basis of Mr Panos Eliades boasting about matters.

As I have said Mr Lewis also called Mrs Bassett, but her evidence was equivocal as to the ownership of the Property.

Mr Panos Eliades gave evidence. He faced a great difficulty because he had lied significantly in the New York proceedings. These lies were not limited to the Property, but I confine myself to the lies he gave in respect of the Property. The other lies are relevant to the other litigation, and I do not propose to comment on those so as not to prejudge the results in those cases. On 7^th November 2001 he gave evidence that Mr Kaissides owned the Property and he (Mr Panos Eliades) controlled the Property in an agent capacity. Later in response to questions about correspondence which I shall set out in this judgment, he explained that, he had had discussions and Mr Kaissides had told him that he wanted Mr Lewis out of the Property because he wanted to live in it. He also allegedly told Mr Panos Eliades that he wanted the rent increased from £1500.00 per month. He narrated a detailed conversation he had with Mr Kaissides in February 2001, in which he explained he was having trouble with Mr Lewis and how he wanted the house back. In a subsequent deposition on 10^th January 2002, he said that Mr Kaissides was absolutely livid about the rent not being paid and that he was fed up with Mr Lewis’s position of living in the house free of charge and recounted in a further deposition on 26^th February 2002, that he had spoken to Mr Kaissides in April 2001, and Christmas of that year about Mr Lewis’s recalcitrance in respect of the rent.

All of this was untrue because Mr Kaissides had died on 11^th April 2000.

It carried on. On 2^nd May 2002 following judgment against Mr Panos Eliades and his companies, Mr Lewis received a letter from a further set of solicitors (Boodle Hatfield the current solicitors for the Second and Third Defendants) saying that they were acting for Mr Kaissides the freeholder of the Property requiring possession. Those instructions could only have come from Mr Panos Eliades and he was perpetuating the myth of the continued existence of Mr Kaissides as living owner of the Property. In June 2002, the denouement occurred following Mr Lewis’s lawyers acquiring a copy of Mr Kaissides death certificate. Messrs Boodle Hatfield responded on being told that that they did not know of his death until they received Mr Lewis’s solicitor’s letter.

The reason given for all of these lies and deceptions put forward in New York and again before me was that Mr Panos Eliades was concerned that relatives and friends would be harried by people employed by Mr Lewis. I should say that Mr Holland did not allege any wrongdoing on the part of Mr Lewis; it was more that private detectives and the like would operate with excessive zeal and meanness and harry Mr Panos Eliades’ relatives and friends. The evidence in respect of this is scanty. There are some vague statements by Mrs Eliades in her witness statement about a traffic incident and her children believing that they were being followed, but these appear to relate to events in 2002. Equally, there is a statement by Miss a Perkovic relating to her property in Muswell Hill, which was broken into in January 2002. Undoubtedly, these incidents might well have been unpleasant, but I do not see how they can justify lies, which started two months earlier in November 2001. Even if these matters were true, it is not unheard of in litigation like this for people to be followed by investigators and enquiry agents. It is an unpleasant, but consequential, fact of life flowing from litigation like this. No complaint was ever made to Mr Lewis or his lawyers beyond Mr Panos Eliades’ comment to Mr Burstein at a deposition held on 27^th February 2002. The reports to the police appear to have been routine and no complaint was made apparently to the police that people associated or employed by Mr Lewis might well be involved. None of this in my view justifies the lying that took place beforehand. The reality is that Mr Panos Eliades was being evasive because he had by the time the New York action had been lost no significant assets with which to satisfy a judgment. He well knew that he was likely to be subject to a prolonged and detailed investigation into his affairs and dealings with family and friends as a result. The lies in my view were designed to frustrate any investigation into the financial affairs of Mr Panos Eliades and those associated or related to him. This shows in my view, that Mr Panos Eliades is a man who is willing to lie if it suits his purpose.

Merely because he has lied to that extent however, does not necessarily mean that I discount his evidence before me. I remind myself of my observations in the case of EP Environmental Technologies Inc & Another –v- Symphony Plastic Technologies & Another [2004] EWHC 2945 (paragraph 74 and following) where I emphasised that it is essential to evaluate a witness’ performance in the light of the entirety of his evidence giving allowances for any mistakes and sometimes for lies. I approach Mr Panos Eliades’ evidence in the same way. He has lied and I find the reasons for his lies unconvincing. I have already commented on his evidence when compared with that of Mr Lewis.

There are a number of other features, which make Mr Panos Eliades’ version of events, in my view untenable. Mr Mill QC in his closing submissions identified 30 areas. Some are persuasive, some are not so persuasive and some are not persuasive at all. I set out here the matters that I found to be persuasive. First, I found Mr Panos Eliades’ justification for the low rent charged to Mr Lewis completely unconvincing. It is far more consistent with him seeking to extract what he can out of Mr Lewis when discharging his contractual obligation to provide rent free accommodation. It is bizarre for the reasons set out earlier in this judgment if Mr Kaissides is the owner. Second, the evidence of Mr Kaissides’ personal wealth shows a man of relatively modest means in respect of public documents. I give no weight to Mr Karis’s evidence which is based on hearsay from people who could have given evidence but chose not to do so (see further in this judgment) and which is uncorroborated and unsupported by documents and untested.

Third, I find the total lack of documentation unconvincing. The documentation missing is wide ranging. It stretches from all documents connecting Mr Kaissides with the Property in any significant way, his rent book, Mr Panos Eliades’ accounts notes, the tenancy agreements and any communications or records in respect of how Mr Kaissides had acquired the large sum and any evidence linking him with the credits to the bank account. Fourth, there is the reference to Mr Lewis’s New York attorney’s letter dated 6^th February 2001. In that letter it was asserted that Mr Panos Eliades owed Mr Lewis US$962,000 and it was proposed that Mr Lewis would buy the Property at full market value assessed by independent appraisers less US$962,500.00. He also agreed to exchange mutual releases as an acknowledgment that were no future obligations and forgo further auditing of the accounting of the previous bout. With hindsight Mr Panos Eliades must rue the day that he rejected this proposal. Nevertheless, that he did. He wrote back on 12^th February 2001, saying that he was amused by the contents of the offer and stating that the UK residence was not for sale at any price and that he wished to take that opportunity to give Mr Lewis notice to vacate the premises and that he would use every legal means at his disposal to protect his rights including, but not limited to litigation. On not receiving a reply by 16^th February he wrote saying that he would change the locks. No mention was made of the owner being Mr Kaissides.

The contents of these letters are quite utterly inconsistent with the suggestion that Mr Kaissides was the owner. There can of course be no question of wanting to hide people’s identities at that early stage. It would have been the easiest thing for Mr Panos Eliades to have written back and said, “I don’t own the property. I have spoken to the people who do own it and they do not wish to sell it. There can be no question of you setting off sums due from me against the purchase price of their property.” Instead, he perpetuated the belief in Mr Lewis that he owned the Property by his stance and therefore embroiled Mr Kaissides (if his case is correct) in litigation affecting Mr Panos Eliades’ affairs with that of Mr Lewis. It simply does not make sense if Mr Kaissides is the owner of the Property.

There was a further fatal aspect to this and that is the fact that Mr Kaissides died in April the previous year. Mr Panos Eliades attempted to deal with this by suggesting that all the answers that he had given in the deposition in respect of this (see above) were simply to “cross out Mr Kaissides and replace it with Mrs Kaissides”. This was pure invention in my view. The myth was further perpetuated and the party and party correspondence when the solicitors were unable to identify on whose behalf (by reference to a name) they were acting. When Boodle Hatfield came on the scene a year later, as I have already said, they stated that they were acting on behalf of Mr Kaissides despite his death nearly over 2 years earlier.

Next, I rely upon the fact that Mr Panos Eliades had effected other transactions whereby people were used as nominees. Two examples were referred to by Mr Mill QC, namely the property 84 Green Lanes, which was put in the name of a nominee and about which his wife did not know, and second the transfer of 75% of the shares in Panix Promotions Ltd a public document to Mr Lewis without his knowledge and agreement. Next, there is a total failure of the Kaissides family to record in public documents the existence of the Property as an asset of Mr Kaissides estate for many years. This occurred in respect of the Cyprus assets (it will be recalled that an attempt was not made to seek to recover possession in the estate name until 2002). It is an odd thing for such a valuable property to be overlooked for such a long time, especially as apart from an alleged one-off payment of some £38,000.00 from Mr Panos Eliades, no income was forthcoming.

I also accept the inference that the payment of £1,150,000 was by reference to the amount of secured indebtedness on Compton House rather than any purchase price. That is supported in my view as I have said by Mrs Eliades evidence. Equally, the total failure to retain any documentation is damaging to the Defendant’s case both in regard to Mr Panos Eliades and to the other Defendants.

Taking all of those into account, I find that Mr Panos Eliades is not to be believed on his evidence as to the ownership of the Property. They support the view which I have that he lied to me as well.

Nor do I accept the evidence of Christos his brother. He could have said a lot more about the relationships as he regarded Mr Kaissides as his “father figure”, but one heard absolutely nothing from him about the substantive transactions. His evidence about the transfer was very vague indeed.

I have already commented on Mrs Eliades, but her evidence crucially does not assist in my view in determining whether or not Mr Kaissides was a true buyer or somebody put up by her husband as a buyer so as to raise enough funds to release Compton House. How that was done remains a mystery. It is a mystery because Mr Panos Eliades has chosen not to reveal it. Mr Kaissides was of course a Bank Manager of the bank to which Mr Panos Eliades owed the monies and there is a possibility that he had other accounts which he did not reveal. He certainly held accounts with Barclays, which he said funded the monies used to repay the bridging loan, but he apparently did not keep those statements because they were too voluminous.

All of this evidence shows that I cannot accept Mr Panos Eliades’ evidence. I have already rejected his brother Christos’s evidence. Another brother, Athos gave evidence, but that was limited to discussions in 1999, to draw up plans for a new house. The difficulty with his evidence was that most of the activity took place from February 2001, in respect of the planning application. The application was made in the name of Mr Kaissides despite his death the year before. He too could not explain this satisfactorily. Before that time the evidence was that there were only some sketches (which have not survived). I do not accept Mr Athos Eliades’ evidence that he had discussions with Mr Kaissides in 1999. Further, all of this could have been made far more clear by calling Victoria Steer. She worked in the offices of Mr Rowe-Parr, the architect with whom Mr Athos Kaissides had done business in the past. She was available to be called as a witness but no explanation was given as to why she was not called.

As Mr Mill QC, rightly pointed out in his closing submissions, there is a long list of witnesses who could have given evidence to throw light on the acquisition of the Property by Mr Kaissides. First, there is Mrs Kaissides who provided a short statement, which merely affirmed Mr Karis’s inadequate evidence. I do not see why steps could not have been made for evidence to have been given fully by deposition or by video link. If that was thought to have been a problem, there is no reason why at least one of the three daughters could not have given evidence. Evidence, could have been provided by: Athos Kaissides who at some stage apparently had possession of the land certificate; or by Claire Kaissides the Third Defendant who is still living in England. Victoria Steer could have given evidence, as could Stacey Marchant who had been Mr Panos Eliades’ administrative assistant for 22 years. While Ms Merchant might have had a child in December, she was clearly in a position to have given evidence of a vital nature about all of the transactions.

In addition to the missing witnesses there is the missing evidence, which I have already extensively referred to in this judgment.

In respect of absent witnesses, it seems to me that absent any explanation as to why all these witnesses were unable to give evidence (in the case of Mrs Kaissides to give evidence that was capable of being tested in some way), and bearing in mind the other evidence which is against Mr Panos Eliades referred to above, I ought to conclude that the reason that they will not give evidence is because they will not support his case. I derive this from a series of authorities referred to in Mr Mill QC’s opening; Wisniewski v Central Manchester Health Authority [1987] PIQR 324, Thompson v Bryant Northern Homes [2002] EWCA CIV 1079, and my decision of Rock Nominees Ltd (Holdings) PLC [2003] EWHC 936.

The public financial circumstances of Mr Kaissides as shown by his Cyprus probate estate, his modest income as a bank manager and no other apparent sources of income cried out, as I have said, for an explanation as to how he was able to find £1,150,000.00 cash in the summer of 1989. No explanation has been forthcoming from people who would have been in a position to explain it. Those people have also not provided any documentation when, following his death, one would have expected them to have had in their possession documentation to substantiate his apparently substantial wealth. The list of absent witnesses is long. The only conclusion I could draw is the one I have set out above namely, that they would not come to support Mr Panos Eliades because they did not believe the truth of his case.

Cumulatively, the effect leads me to draw together four areas of evidence, all of which lead to a conclusion that Mr Lewis’s case is to be preferred. First, there is the evidence of Mr Lewis and Mr English. Second, there is the inadequacy of Mr Panos Eliades’ evidence; third, there is the absence of other live witnesses who could have supported him. Fourth, there is the total absence of documentation to support his case to any significant degree.

Both Mr Holland and Miss McAllister submitted that Mr Lewis had to demonstrate two matters. First, he had to demonstrate that the presumption of the beneficial ownership vesting in the registered proprietor i.e. Mr Kaissides was rebutted and second, and independently of that, he had to prove that the beneficial owner was Mr Panos Eliades. To my mind if there was any other potential candidate then of course Mr Lewis would have to establish Mr Panos Eliades on the balance of probabilities was the best candidate in contrast to the other candidates. However, I do not accept that Mr Lewis has to deal with hypothetical candidates. No other potential candidate is being identified and once again absent any other candidate put up by the Defendants (and no one would ever be put up by them in reality), I am entitled to conclude on the material before me as set out in this judgment;