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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Ranger v Ranger & Anor [2001] EWCA Civ 2073 (12 December 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/2073.html Cite as: [2001] EWCA Civ 2073

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
(His Honour Judge Boggis QC)

		Royal Courts of Justice Wednesday, 12th December 2001

1. LORD JUSTICE ROBERT WALKER: This is an application for permission to appeal which Aldous LJ adjourned on 1st October last to be heard in court on notice. The applicant is Mr. Victor Ranger, who was below the first defendant to a claim made by his brother, Mr Noel Ranger. Victor Ranger was the Part 20 defendant to a counterclaim made by the second defendant, Miss Shirley Williams. I shall, for simplicity, refer to the two brothers as Victor and Noel.
2. The application for permission to appeal is from an order of His Honour Judge Boggis made on 3rd August 2001 at Birmingham, when the judge was sitting as an additional judge of the Chancery Division of the High Court. As well as an application for permission to appeal, there are also applications for permission to amend the grounds of appeal and for permission to adduce fresh evidence. Mr. Stenhouse, who appears today for Victor, accepts that the application for fresh evidence should be dealt with separately if he is successful in his application for permission to appeal. I shall assume, although we have not called on other counsel to comment on this, that permission should be given for amendment of the grounds of appeal, and I consider all the grounds of appeal and all the skeleton arguments which have been put forward by Mr Stenhouse.
3. The judge's order declared that Noel, Victor and Miss Williams had in 1981 entered into an equal partnership for the purchase of a property known as 6 Sycamore Road, Handsworth, Birmingham, in order to run it as a hostel. The order also declared that the properties known as 6, 8 and 12 Sycamore Road are properties of the partnership. These declarations were accompanied by orders for sale of the property and equal distribution of the net proceeds, with accounts to be taken of future dealings only. The judge thought that an account of past dealings would be a waste of money. Victor was ordered to pay Noel's and Miss Williams' costs of the proceedings.
4. The judge's judgment might be described as robust, although it may be none the worse for that. Otherwise the judge's fact finding exercise might have foundered in a morass of conflicting oral evidence with only sparse documentary support. I shall come back to the criticisms which have been made of the judgment. After starting with the incontrovertible fact that 6 Sycamore Road was bought at the beginning of 1982 in the sole name of Miss Williams, who was at one stage Victor's girlfriend, the judge made a forthright assessment of the witnesses from whom he had heard oral evidence:

"I have heard evidence from Noel, Victor, Lovat, a third brother, two sons of Noel, Danny and Anthony, Francis Hart, a builder who worked for the brothers when the property was purchased and from Shirley Williams. The evidence of Noel, Victor and Lovat was most unsatisfactory. Lovat is the youngest of the three brothers but holds himself out as the leader of the family. He supports Victor. His evidence was vague and evasive. When pressed for details of conversations he relied upon, it was clear that he had no proper recollection.

Victor was completely untrustworthy in his evidence. His case is that, to start with, he alone was responsible for the development of the hostel. Later a new girlfriend came on to the scene, Maeva Wright (or Maeva Phillips as she is also known). He explained how the business was run by her alone. I was shown ledger entries from Lloyds Bank, a joint account, giving the account holders as Mr and Mrs V Wright. He denied that he was Mr V Wright when it was perfectly obvious that this was a reference to him. I do not accept Victor's evidence at all.

Noel was also vague and evasive and at times incoherent. His evidence must be regarded with caution.

The only witness who was reliable was Shirley Williams. She is a former nurse. She gave her evidence clearly and understandably. I accept her evidence."

5. In the light of that assessment it is not a promising start that Victor's first three grounds of appeal were as follows: (a) the learned judge made findings of fact that were against the weight of the evidence; (b) the learned judge failed to make any findings of fact on issues that were before him in the evidence and that were vital to the appellant's case on the claim and counterclaim; (c) the learned trial judge made findings of fact that no reasonable tribunal can properly make on the weight of the evidence. The 4th and 5th grounds added nothing specific to the first three. However, Mr. Stenhouse has since helpfully clarified the proposed grounds of appeal.
6. Before turning to how those grounds have been developed, I should note some landmark events in the obscure and often confused sequence of events on which the judge had to find the facts. In doing this, I have been assisted by a chronology prepared and updated by Mr. Quirke who has appeared today, as he did below, for Miss Williams. I must also say something about the course of the proceedings and the issues on the pleadings.
7. Miss Williams was registered as sole proprietor of No 6 on 19th February 1982 and she became liable as mortgagor to National Westminster Bank. Number 6 was and no doubt still is a large property with 17 bedrooms. It was therefore suitable for use as a hostel. However, it was in a poor state of repair, a fact no doubt reflected in the purchase price of £15,500. The judge's findings were that it was Miss Williams who found the property and recognised its potential and that she borrowed £7,700 as a business development loan. Noel put in £900. Victor put in £700. The vendor, Mr Cramp, agreed to leave £5,000 outstanding as a loan for which Miss Williams was responsible. Miss Williams charged her own house, 59 Laurel Road, as security for her borrowing. The partnership business was therefore launched largely on borrowed money, with Miss Williams primarily, although not solely, responsible for the borrowing. Various creditors applied pressure from time to time. Meanwhile, the business of the hostel was generating income derived wholly or largely from public funds payable for the maintenance of disadvantaged persons.
8. In May 1985 a solicitor acting for Noel and Victor (I note that at that stage they were both making common cause) wrote to the bank claiming that his clients were the owners of No 6 and that Miss Williams was merely a nominee because Noel and Victor were both unemployed. The solicitor was asking whether the mortgage could be transferred to Noel and Victor or, if that was unacceptable because they were still unemployed, to a female nurse whose name has been mentioned, Maeva Wright. There was some desultory correspondence, some of it quite obscure and suggesting that the solicitors had not been given correct instructions as to the facts. It appears that refinancing, which enabled National Westminster Bank to be paid off, was obtained from a firm of oil merchants, the Nolan brothers, who put up some money (and like Mr Cramp had to wait a long time before they saw anything back).
9. On 15th January 1986 Miss Wright was registered as the owner of No 6; that is, she became the transferee from Miss Williams. Solicitors acting for Miss Williams were told that she had been no more than a nominee. On 27th March 1987 Mr. Cramp obtained judgment for about £9,400 with costs against Miss Williams, Noel and Victor. On 7th July 1987 Miss Wright was registered as the owner of No 8 with a charge to TSB. On 17th August 1988 Miss Williams' own home was made subject to a charging order in favour of Mr. Cramp. His solicitors threatened to sell the property. I am told that later it was indeed sold. On 12th November 1989 Miss Wright was registered as proprietor of No 12 with a building society charge. Victor was, as the judge found, calling himself Mr. Wright.
10. In 1991 Noel was made bankrupt. He was subsequently stopped from attending the hostel at No 6 because of complaints against him, some of a serious nature, in relation to his conduct towards residents. However, none of those complaints was raised on the pleadings and unsurprisingly the judge made no findings about them. Noel's bankruptcy must have caused the dissolution of any subsisting partnership under section 33(1) of the Partnership Act 1890, subject to any agreement between the parties. No such contrary agreement was pleaded or proved. Another reasonably certain fact, therefore, is that any subsisting partnership came to an end with Noel's bankruptcy.
11. On 31st March 1994 Victor became the registered proprietor of No 6 and No 8. In 1996 Miss Wright was made bankrupt. In 1998 No 12 was transferred by Miss Wright's trustee in bankruptcy to Victor who paid a sum of rather over £22,000 for her beneficial interest, that interest being ostensibly under a partnership deed dated 2nd January 1995 between Victor and Miss Wright. I should add that the judge also heard evidence and saw some documentary evidence about other properties, but since he made no order about them there is no need to complicate what is already a complicated story by referring to the other properties.
12. The proceedings began as an action in the Chancery Division of the High Court, Birmingham District Registry, commenced by Noel against Victor. The writ was issued on 8th April 1998. The statement of claim pleaded a partnership at will between Noel and Victor. It said nothing at all about Noel's bankruptcy. However, it is common ground that Noel did at some stage obtain from his trustee in bankruptcy an assignment of any cause of action which he had against Victor, so that the proceedings were properly constituted. Victor's original defence denied any partnership and asserted that Victor was the sole owner of Nos 6, 8 and 12. It also pleaded that Noel's claim was statute barred.
13. At that stage Miss Williams was to have been called as a witness on behalf of Noel. She had had no legal advice herself. She signed a short witness statement prepared by Noel's solicitors, which is now said to have contained, and indeed plainly did contain, material inconsistencies with her case at trial. What happened was that the judge adjourned the proceedings to permit Miss Williams to obtain independent legal advice. She became a party to the proceedings as second defendant. She counterclaimed for a declaration that No 6 was held in trust and for accounts and other appropriate relief. It was open to counsel for Victor to put her earlier witness statement to her in cross-examination, but it seems that for whatever reason he did not do so. The point cannot now be re-opened.
14. Victor's amended defence and defence to Miss Williams' counterclaim put all these matters in issue. It pleaded the Limitation Act 1980 against Miss Williams also on the basis that any partnership had come to an end in 1985. Those were the pleaded issues before the judge. Much of the evidence which the judge heard seems to have gone outside the pleaded issues. Conversely, the limitation points were not, for whatever reason, relied on in closing submissions to the judge and are not therefore dealt with in the judgment. The judge made clear findings supported by some documentary evidence as to the inception of the partnership in 1981. Miss Williams was the one who found No 6 and recognized its potential and she had nursing skills necessary to running the hostel. It was her misfortune that the business was seriously undercapitalised and therefore seems to have been in financial difficulty from the start. I do not think that it lies in the mouth of Victor to criticize her for that. He, Noel and Miss Williams were all partners together in this undercapitalised business.
15. The judge did not make as clear findings as he might have done as to what happened in 1985. The case put forward by Mr. Quirke in his skeleton argument was that Miss Williams was told in 1985 that she was still to be a partner even though she had ceased to be the registered owner of No 6. She still had a substantial financial stake in the business because she had put her own house, 59 Laurel Road, at risk. Eventually she lost it when it was sold in order to pay the debt. However, the judge must have accepted the evidence in her witness statement:

"I was assured by Victor Ranger that even though the property was going to be transferred to Maeva Wright the business arrangement, ie that we were equal partners in the business, would remain the same and that I would receive profits from the business."

16. The judge must also have accepted Miss Williams' evidence when she said in the course of her oral evidence:

"They gave me a gentleman's or gentlewoman's agreement that the business would have continued and I would be a part owner of the business. Nothing changes, he said, nothing changes."

17. In view of the judge's assessment of the witnesses and in the absence of documentary evidence to the contrary, that conclusion also seems to me to be unassailable. Moreover, it seems at first sight to put an end to the limitation point relied on on behalf of Victor, which was clearly premised (see paragraph 23 of the amended defence to counterclaim) on the partnership having ended in 1985 and on section 43 of the Partnership Act 1890 having applied on that occasion. The same reasoning must apply to the limitation point taken against Noel. Section 43 of the Partnership Act 1890 does not apply on the occasion of a general dissolution (such as must have occurred on Noel's bankruptcy in 1991) if the assets of the partnership continue to be held in trust (see the decision of this court in Popat v Shonchhatra [1996] 1 WLR 1367). The claims against Victor are founded in fiduciary obligations, not in debt. It is not section 5 but section 21(1) of the Limitation Act 1980 which was in point.
18. Mr. Stenhouse, who has prepared carefully crafted submissions and who has presented them cooly under a certain amount of discouraging fire, has challenged that approach. He pointed out, correctly, that the primary relief sought by Noel and Miss Williams was for accounting. He relied on the recent decision of this court in Paragon Finance v Thakerar [1999] 1 All ER 400, not following Attorney General v Cooke [1988] Ch 414. However, Miss Williams did assert a trust affecting No 6 and the judge's finding was that Nos 8 and 12 were bought out of partnership profits derived from No 6. It seems to me that the existence of a trust was very much an issue in the proceedings. It also seems to me that Mr. Stenhouse was at this point in his submissions trying to have the best of both worlds. Mr Stenhouse candidly accepted that he was seeking permission to raise points which were neither pleaded in relation to Noel's bankruptcy (as opposed to in relation to 1985), or argued at the trial, while apparently being unwilling to concede a similar latitude to Miss Williams and Noel and their advisers. If this case were to be retried, with a general permission for all sides to amend their pleadings, the likelihood is that both side's cases would look very different at the retrial. However, there must be an end to litigation.
19. The court is not asked to decide at this stage on the application to adduce fresh evidence, but I think it is right to form at least a rough provisional view as to its prospects since they may have a bearing on the proposed appeal on questions of fact. Again, Mr. Stenhouse has acknowledged that he is making an application to put in as fresh evidence material which was available at trial and which was not put forward, it seems, on advice from the solicitors and counsel then acting for Victor, both of whom have since changed. Although the rule in Ladd v Marshall [1954] 1 WLR 1489 has no longer the same rigidly binding force, the court would still be very slow indeed to let in evidence which, it is accepted, could easily have been put in at trial. I conclude therefore that the prospects of that application being successful would not be good.
20. Mr. Stenhouse has put forward everything that could possibly be put forward in support of this application. His diligence has produced a skeleton argument of 28 pages but he has refined his argument in his oral submissions to its essentials. Reduced to its essentials, his argument raises three points: first, the limitation points; second, the form of the judge's order; and, third, the judge's findings of fact. I have already explained why the limitation points cannot in my view succeed. It seems to me that they are hopeless.
21. The next point is the argument that the judge should, in the particular circumstances of this case, have made a special order on the lines of that approved by the House of Lords in Syers v Syers (1876) 1 App Cas 175, that is an order permitting Victor to have the opportunity to buy out the other two partners rather than an order for sale of all the partnership assets. Whether to make such a special order was a matter for the judge's discretion, and after trying this difficult case the judge was in the best position to decide what the justice of the case demanded. It seems that he was not even asked to make such an order, so it is unsurprising that he did not do so. It may be that Noel and Miss Williams would be willing to fall in with the practical effect of such an order, in the event, as to which I have no information at all, that Victor was in a position to raise sufficient finance to buy out his former partners. However, that must be a matter for them. It can no longer be a matter for the court.
22. Then there are the judge's findings of fact and, it is said, the points on which the judge failed to make findings of fact, although he should have done so. The weight of the criticism is directed to the judge's failure to make findings about what was taking place from time to time at Nos 6, 8 and 12; that is, who was running the hostel business and what effect that had on the evidence as to Miss Wright being only a nominee and the general circumstances of her withdrawal in 1985. It is said that the judge ignored evidence indicating that Miss Williams was happy to retire and retire without any continuing proprietary interest in the business in 1985.
23. I think that this is a criticism which calls for serious consideration. It is easy to point to matters which could have been dealt with more clearly or more fully in the judgment. However, the judge had a difficult case to try, and litigants who do not take the trouble to make a proper written record of their business affairs, and who then tell lies to the court and try and deceive the court, really cannot complain if a judge fails to give as full and coherent account of the matter as would be the ideal. Having listened to all the criticisms that have been made, I see no grounds for suspecting that there has been any miscarriage of justice in this case.
24. I do feel that Miss Wright may have been used, if that is the right word, in the same sort of way that Miss Williams seems to have been used, as a convenient holder of the legal estate, in such a way as to expose her and to shield others from liabilities to third parties. However, since Miss Wright's trustee in bankruptcy has already sold her interest, she herself can no longer be in a position to complain about that except so far as she now allies herself with Victor. I am clear that permission to appeal should be refused so far as Miss Williams is concerned.
25. In relation to Noel I am less confident of the justice of the outcome. But I can see no solid ground for any distinction between the two. In relation to both proposed respondents I would dismiss the application.
26. LORD JUSTICE WARD: I agree.
Order: Applications refused