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Court of Appeal (CHD) grants permission to appeal in important trust appeal

The Appellant, a former solicitor, claimed he held a beneficial interest in property by way of constructive or resulting trust. The property was purchased as an investment. It was registered in the sole name of the Appellant’s wife. A joint charge was placed over the property by the Legal Services Commission. This was done in order to secure the joint indebtedness of the Appellant and his wife arising out of their legal practice as solicitors.

The Court at first instance held that the Appellant was not entitled to a beneficial interest in the property by way of constructive or resulting trust, and that the property vested in the wife’s joint trustees in bankruptcy.

The Appellant appealed. Permission to appeal was refused on the papers by the Honourable Mr Justice Snowden. The Appellant renewed permission to appeal on the issue of whether he had a beneficial interest in the property. Following an oral hearing in the Business & Property Courts of England & Wales (Chancery Appeals), the Honourable Mr Justice Snowden was ‘persuaded’ to grant permission to appeal limited to that issue without expressing a concluded view on the merits of the appeal.

The appeal raises evidential issues concerning the correctness of the first instance judge’s findings of fact on the Appellant’s beneficial interest in investment property in light of the LSC charge, and all the relevant circumstances.

The appeal also seeks to establish a novel point of law in sole ownership cases involving the determination of beneficial interest in property. Namely where property is purchased as an investment, in the absence of an express direction by the Privy Council that its decision in Marr v Collie [2018] AC 631 represents the law of England and Wales, the Courts at first instance are bound to follow the Court of Appeal decision of Lord Neuberger to the contrary in Laskar v Laskar [2018] 1 WLR 2695.

This is consistent with higher authority, including the reasoning of the Supreme Court in Willers v Joyce [2018] AC 851 concerning the procedure in the Privy Council for holding that a Court of Appeal decision is wrong. This involves expressly making a decision that the Court of Appeal is wrong, and directing that the domestic courts should treat the Privy Council decision as representing the law of England and Wales. Marr does not expressly appear to overrule Laskar. Nor does it appear to contain the direction in question.

Arfan Khan represented the Appellant and did not appear below.