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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Sparkasse Koln Bonn v Cutts & Anor [2018] EWHC 1879 (Ch) (30 July 2018) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2018/1879.html Cite as: [2018] EWHC 1879 (Ch)

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IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
BUSINESS LIST (ChD)

		Rolls Building, Fetter Lane, London EC4A 1NL
		30/07/2018

Chief Master Marsh:

1. This is my judgement from the trial of an issue that arose in proceedings brought by the claimant ("Sparkasse") seeking an order for sale after having obtained a final charging order against the first defendant. For convenience I will refer to the first defendant as Mr Cutts and the second defendant as Mrs Cutts.
2. Sparkasse obtained judgement against Mr Cutts in the High Regional Court of Düsseldorf on 3 May 2010 in respect of a debt that Mr Cutts admitted he owed from his business dealings by Mr Cutts having guaranteed a third party liability to Sparkasse. With the accrual of interest, the amount due is now approximately £1.3 million. Sparkasse obtained a European enforcement order and that order was subsequently registered in this jurisdiction on 11 June 2013.
3. Mr Cutts is the registered proprietor under title number NGL815658 of flat 115 to 117 Florin Court 6 to 9 Charterhouse Square London EC1M 6EY ("the Property"). (Originally, they were three separate flats numbered 115, 116 and 117). An interim charging order was obtained by Sparkasse on 30 August 2015 and it was made final on 23 September 2015. As is usual, the charging order does not specify the extent of his interest. It is a charge against his interest, such as it may be.
4. Sparkasse issued a Part 8 claim on 6 July 2017 seeking an order for sale of the Property. The claim was issued without having joined Mrs Cutts as a party although it was known by Sparkasse that she was in occupation of the Property. I directed at an early stage that she should be joined as a defendant. It seems to me that it is usually appropriate to join a person who is known to be residing at the property to proceedings seeking an order for sale, even where the property is in the sole name of the judgment debtor. There are two main reasons for this. First, the person in residence may wish to assert that the legal title and beneficial title do not coincide. The sooner this assertion is known about the better. Secondly, an order for possession will naturally be part of making an order for sale. The person in possession should have an opportunity to file evidence and make representations to the court about when the order is to take effect.
5. After being joined as a party to this claim, Mrs Cutts issued separate proceedings ("the TOLATA claim") against Mr Cutts claiming that he held the Property on trust for them as tenants in common in equal shares. When these proceedings (the proceedings seeking an order for sale) came before me on 19 December 2017, I made an order that the TOLATA claim should be stayed because the issue of separate proceedings was unnecessary. CPR 73.10A(3) permits the court to make a range of orders including directing a trial of any issues between the parties when it decides whether to make the interim charging order final. The extent of the judgment debtor's interest is just such an issue, although given the standard form of order that simply charges the judgment debtor's interest, it is not critical if such an issue is not resolved when considering whether to make the interim order final. Indeed, the judgment creditor and the court will often be unaware that such an issue exists, because the judgment debtor may not attend the hearing and/or the person claiming an interest may not know of the hearing. It may be significant, however, if the judgment debtor makes no mention of a third party's claim to an interest in the property at that stage.
6. Where an issue as to the extent of the judgement debtor's interest in the property arises in the course of proceedings for an order for sale, it will generally be appropriate for the court to make a direction for that issue to be resolved within those proceedings. This is a convenient course of action for its speedy resolution. It is highly desirable, however, for the court to rquire the parties to file points of claim and points of defence to ensure that the issue is properly framed. The court needs to know for the just disposal of the issue how it is said, factually and legally, the beneficial interest is said to arise and the judgment debtor's response to it. The points of claim and defence should comply strictly with the requirements of Part 16 and Practice Direction 16 and close heed should be paid to the requirement for the points of claim to be a "concise" statement of the facts which are relied on together with the conclusions that are to be drawn from them. If, as is sometime the case, a declaration of trust is relied upon, if the judgment debtor wishes to allege it is defective in some way, or a sham, the grounds that are relied upon need to be stated with precision.
7. Strictly, there is nothing in Part 8^[1] or rule 73.10C and PD73 that permits the service of points of claim and defence within a claim. However, the court is given wide powers in CPR 3.2(1)(m) to "take any other step or make any other order for the purpose of managing the case and furthering the overriding objective …". The alternative, which is to direct that the issue proceed as a Part 7 claim, can be cumbersome and likely to be more costly than adopting a hybrid approach.
8. On 19 December 2017, I gave directions for the issue about Mr Cutts' interest in the Property to be tried, including the service by her of points of claim, the service of a defence by Sparkasse, disclosure and exchange of witness statements. It is the trial of the issue raised in her points claim that came before me on 10 April 2018. In that issue, Mrs Cutts is to be treated as claimant and the Sparkasse as the defendant. The burden lies on Mrs Cutts to show that the legal and beneficial interests do not coincide.
9. Mrs Cutts puts forward her claim in the following way:

(1) She relies on a declaration of trust dated 26 March 2003 and she says it evidences an intention to hold the beneficial interest in the Property in equal shares in a manner that satisfies section 53(1)(b) Law of Property Act 1925. If she is right, none of her alternative claims need to be considered.

(2) Alternatively, if the declaration of trust cannot be relied on, she says there the Property is held with Mr Cutts in equal shares under a common intention constructive trust.

(3) In the further alternative, Mrs Cutts says her contributions to the Property are such that a resulting trust arises, or that she relied to her detriment on promises made by Mr Cutts such that it would be unconscionable for her to be denied an interest in the Property.

10. The declaration of trust has formed the primary focus of the trial along with the alterative common interest constructive trust claim.
11. At the trial on 10 April 2018, Mr Cutts was represented by his solicitor. Mr Rea-Palmer appears to have assumed that he was entitled to appear as an advocate in the High Court. In the event, I granted special permission to him to appear on behalf of Mr Cutts to avoid the trial being adjourned. Mr Cutts took a line which supported Mrs Cutts.
12. The registered title to the property reveals the following information that is relevant to the issue I have to determine:

(1) The title to the Property comprises three flats; numbers 115, 116 and 117 Florin Court.

(2) Those flats are comprised in one lease that is dated 30 September 2002 granted for a term of 125 years from 1 April 1988. The date of the lease is material.

(3) Mr Cutts became the registered proprietor of the Property on 19 November 2002.

(4) Bank of Scotland plc registered a charge against the title on 8 September 2004. The charge is dated 26 August 2004.

(5) There is no indication that anyone other than Mr Cutts has an interest in the Property.

13. The first occasion when Mrs Cutts asserted an interest in the Property was on 17 October 2017 when her current solicitors wrote to the claimant's solicitors. They enclosed a copy of a declaration of trust dated 26 March 2003. They asserted that the declaration of trust was written evidence of the fact that Mrs Cutts held an equal equity interest in the Property with Mr Cutts. They acknowledged that the property is misdescribed in the declaration of trust as 115-116 Florin Court. One title was created in 2002 on the grant and registration of the lease (September and November 2002 respectively) and so the declaration of trust materially misdescribes the Property by omitting a reference to flat 117 or to the registered title number.
14. It is right to mention, however, that in response to an order dated 20 February 2017 obtained by Sparkasse against Mr Cutts, that he attend the court for questioning, Mr Cutts completed the standard form of admission. In box 5, where he is asked to describe his residence, he says the Property is his "jointly owned house". Curiously, Sparkasse's solicitors do not appear to have noticed that statement and he was not challenged about it at the time. I will return later in this judgement to the question of whether inferences should be drawn about the late revelation of Mrs Cutts' alleged interest in the property. I simply record at this stage that it was open to Mr Cutts to have disclosed it in 2015, when the interim charging order was made final, and in a more direct way in 2017. He could have stated the basis on which Mrs Cutts claimed to hold a 50% share and referred to the declaration of trust, even if, as it is said, a copy of the document itself was not immediately available.
15. The declaration of trust describes itself as an "Agreement in respect of 115 and 116 Florin Court". It is made between Mr and Mrs Cutts and gives their joint address is being 115-116 Florin Court defined as "the Flat". The declaration is dated "London 26, March 2003". It bears the signatures of both Mr and Mrs Cutts. They are described respectively as "Monika" and "John". The recitals and the operative part of the agreement are as follows:

"1. Monika and John married on 15^th September 2001

2. The flat is Monika and John's home

3. Harald Lipken and Monika designed and executed the reconstruction of the Flat

4. John has four daughters by his first wife

It is agreed

5. Monika holds an equal equity interest in the flat with John

6. In the event of either John or Monica dying prior to the other, then the equity interest in the Flat will transfer to the remaining person

7. Following the death of both John and Monica and if they still owned (sic) the Flat, then the equity therein will be shared equally between John's daughters.

8. John will maintain sufficient life insurance to cover the cost of repaying any mortgage secured on the Flat.

9. This agreement is to be reflected in the respective Wills of both John and Monica."

16. Mr and Mrs Cutts have put forward a case that, in terms of chronology, can fairly be described as muddled. Furthermore, the way in which the case was pleaded in Mrs Cutts' points of claim is not consistent with the way in which it was put forward on her behalf at the trial. She says:

(1) The property was originally three flats, 115, 116 and 117 that have been combined into one dwelling and were registered under one title number.

(2) Mrs Cutts moved to England in 2000 and moved into flats 115 and 116. Flats 115 and 116 became Mr and Mrs Cutts' matrimonial home.

(3) In about September 2001, Mr Cutts was granted licence to combine flats 115 and 116 into a single dwelling. This involved building work and due to Mrs Cutts' background as an artist and designer she together with her brother Harald Lipken planned, designed and oversaw the renovation and construction of the two flats into a single dwelling. She says "shortly after this date", Flat 117 was also purchased and permission was obtained to consolidate it within Flats 115 and 117. Thereafter, the three flats were re-mortgaged in or around 2004 with Halifax plc.

(4) At the time of the re-mortgage, Halifax plc was informed that she held an equal beneficial interest in the combined property with Mr Cutts. She says Halifax plc declined to add her name to the mortgage because she was not employed at the time and as a result of Halifax's refusal to add her name to the mortgage, she and her husband agreed that the combined property would remain in his sole name. It is said that this was the trigger for them entering into the declaration of trust on 26 March 2003 (sic).

(5) The failure to mention Flat 117 in the declaration of trust is an oversight and it was her and Mr Cutts' common intention that the Declaration of Trust was to relate to the entire Property. However, no claim for rectification is made.

(6) Mrs Cutts relies on the entirety of the document for its full terms and effect. (The points of claim do not expressly invite the court to construe the Declaration of Trust as if it had referred to the entire Property.)

(7) The declaration of trust is conclusive evidence of the joint beneficial ownership of the Property or, alternatively, that it reflects their common intention.

(8) Mrs Cutts relies on her expenditure of "significant financial and other resources towards the development, renovation and upkeep of the combined property…". There are two elements to this contribution. First, the use by Mrs Cutts of her expertise in designing and overseeing the renovation of the property. Secondly, she says significant financial contributions were made and she provides particulars of payments from her bank accounts to a joint account at Coutts in 2008, 2009 and 2015.

17. The points of claim do not expressly invite the court to construe the Declaration of Trust as if it had referred to the entire Property. The approach adopted at the trial was primarily to rely on their intention, as they say it was expressed and understood between them, rather than their intention derived from the document itself read in its context.
18. Sparkasse puts Mrs Cutts to proof of her case in every respect save that it is accepted that Mr and Mrs Cutts signed the declaration of trust. Sparkasse's case is that:

"8. … whilst it is admitted that a document entitled declaration of trust ("the Document") was signed by the parties it is not admitted that the same was signed in furtherance of an express agreement as alleged or at all. It is not admitted that the Document constitutes a valid express declaration of trust as alleged or at all. It is averred that:

a. The Document is dated 26 March 2003, but [Mrs Cutts and Mr Cutts] first disclosed the Document to the [claimant] on 17 October 2017. Neither [Mrs Cutts or Mr Cutts] have provided any explanation as to why the Document was only disclosed at this late date and not in previous proceedings;

b. The Document relates to part of the Property only, namely flats 115-116. It is averred that [Mrs Cutts and Mr Cutts] do not seek to rely on any purported trust documentation in respect of the Property. The presumption remains that [Mr Cutts] as sole registered owner of the Property is also the sole beneficial owner, unless [Mrs Cutts] proves otherwise.

c. At paragraph 9 [Mrs Cutts] pleads that [Mrs Cutts and Mr Cutts] expressly agreed and understood that [Mr Cutts] would hold the Property on trust beneficially for himself and [Mrs Cutts] in equal shares "As a result" of Halifax declining to add [Mrs Cutts] name to the mortgage in 2004. [Mrs Cutts] asserts that Halifax declined to add her name to the mortgage because she was not employed in England and Wales at the time. It is further averred that this is inconsistent with [Mrs Cutts'] case as the document predates the time at which Halifax supposedly declined to add [Mrs Cutts] name to the mortgage, the document being dated 26 March 2003. Further, it is not understood why Halifax would decline to add [Mrs Cutts] name to the mortgage on grounds of unemployment in England and Wales, in circumstances where she was a director of a company registered in England and Wales at that time (namely Osmose Ltd) and was asserting a beneficial interest in the property at the time.

9. …

It is averred that paragraph 7 suggest that flats 115-117 were consolidated to establish the property shortly after September 2001, however the document, dated 26 March 2003 relates to flats 115-116 only. [The claimant] does not admit that this was a mere oversight in drafting as alleged, nor does it accept the common intention argument pleaded and requires [Mrs Cutts] to prove the same."

19. At one point during the trial, Sparkasse appeared to be relying on the declaration of trust being a sham in the Snooks v London and West Riding sense. It is essential for an allegation that a document is a sham to be pleaded with full particulars because the onus is on the party alleging a sham to prove it and the onus is a heavy one. However, it transpired that Sparkasse's case is primarily that the declaration of trust was not created in March 2003 and so is said it is a sham in that restricted sense, namely that it is a document of recent creation.
20. The facts relied upon by Mrs Cutts fall into four broad areas, with some overlap between them;

(1) her involvement in the conversion and refurbishment of the three flats as a joint enterprise between them;

(2) the promises made to her by Mr Cutts;

(3) the creation of the declaration of trust;

(4) the financial contributions she claims to have made to the household.

21. The background to the work undertaken to the flats is not in contention. Mr and Mrs Cutts met in about 1995 and formed a relationship. She moved permanently to the United Kingdom to live with Mr Cutts in about 2000 although she had stayed at Florin Court regularly beforehand. They were married on 14 September 2001. As the declaration of trust records, Mr Cutts has four children by his previous marriage.
22. Mrs Cutts is by profession an interior designer. She and Mr Cutts set up a company called Osmose Ltd in 1998. (His main business activity appears to have been on his own account in range of domestic and international businesses). They are equal shareholders and they are both directors. The business of the company has been interior design and its existence enabled Mr and Mrs Cutts to purchase items that were required for the refurbishment through the company. The extent to which this was done is unclear because Mrs Cutts failed to provide the court with accounts for the company covering the relevant period. Equally, there are very few records showing the extent and cost of the refurbishment project is no estimate of the cost is provided in the evidence. Nevertheless, there is no reason to doubt that work was undertaken to convert three flats into one dwelling. It is clear that this work was completed, or at least substantially completed, by the date upon which the lease of the three combined properties was granted, namely 30 September 2002. It is reasonable to infer that the freeholder would not have been willing to grant a single lease of three flats unless they had been physically combined by that date. The work of converting the flats involved Mrs Cutts's brother, Harald Lipken, who at the material time was qualifying as an architect. He did not charge for his services. The work of preparing drawings to obtain the relevant consents was undertaken by him.
23. There is a marked lack of evidence, about the works themselves and it is notable that Mr Lipken was not called to give evidence and no attempt was made to produce copies of the plans that would have been lodged with building control, the grant of planning consent and the grant of the relevant licences by the freeholder. I accept, however, that Mrs Cutts was substantially involved in the building projects and operated and as the project manager.
24. At the heart of Mrs Cutts' evidence lies her assertion that it was always the agreed intention between her and Mr Cutts from early on in their relationship, and certainly before the purchase of flat 116, that the Property would be owned by them jointly. She also says that she invested a considerable amount of money, time and effort into improving the Property on the understanding that she owned an equal beneficial share in the Property. This she says has always been her belief. Mr Cutts does not deal with this point explicitly in his evidence although he deals with other matters. He does say, however, that he agrees with everything that is said in Mrs Cutts's witness statement.
25. As I have indicated, the evidence provided by Mr Mrs Cutts about the Halifax refinancing is very muddled. Mrs Cutts says that the re-mortgage with Halifax came about in 2003 and she was led to believe by Mr Cutts that it was not possible for her to be "added to the mortgage". It is said that part of the funds from the re-mortgage were used to pay for the refurbishment of the Property, but that cannot be right because the principal works were completed sometime previously. First Legal Title, acting for Halifax, wrote to Mrs Cutts on 30 September 2003. They said it was a condition of the mortgage offer that Halifax's mortgage should rank ahead of any rights she might have in the property which they described as "115 Florin Court". Her consent was requested on the basis that she was not a joint owner of the property but lived there. By signing the form, Mrs Cutts agreed to postpone any rights as she may have in the Property and not to claim any rights or interest against the lender. She signed the form as "occupier".
26. However, her case is that Halifax was informed by Mr Cutts that she held an equal beneficial interest in the Property in late 2002 or early 2003. It is suggested that Halifax provided advice concerning the steps that Mr and Mrs Cutts should take as between themselves. Her evidence is that Halifax refused to 'put her on the mortgage' because she had no earnings in the United Kingdom. This is despite her being a director of Osmose Ltd.
27. The mortgage deed is dated 26 August 2004. Mr Cutts is the sole borrower. The property and Mr Cutts' address is described in the typed version as being 115 Florin Court. However, the address has been amended in manuscript and the property is described in the amended form as "Flats 115-117 Florin Court".
28. Mr and Mrs Cutts say they agreed that the Property would remain in Mr Cutts's sole name on the basis that he held it on trust beneficially for himself and Mrs Cutts in equal shares. This assertion is difficult to square, however, with Mrs Cutts's case that it was always their intention that the property would be held equally by them. This inevitably begs the question: why was it not put into joint names in 2003 or 2004?
29. Mrs Cutts provides in some detail evidence of the circumstances in which the declaration of trust came to be executed. She says that 2002 had been a difficult year for them because she miscarried and was subsequently told she would not be able to have children. Furthermore, Mr Cutts's mother lost her eyesight at around that time. Mrs Cutts says that the emotional turmoil that they were experiencing drove them even closer together and the signing of a declaration of trust was a re-commitment to each other. At around that time, Mr Cutts said on various occasions that the Property would always be Mrs Cutts's home.
30. Mr Cutts did not provide any evidence in his witness statement about the circumstances in which the declaration of trust was created. His evidence on this point is given merely by adopting Mrs Cutts's witness statement. She says the declaration of trust was prepared by Mr Cutts. Despite the document recording on its face that it was signed in London, Mrs Cutts says she believes the document was signed at her parents' home in Germany because she believes the discussions with Mr Cutts leading up to its preparation and signing took place there. Her explanation about her inability to produce the declaration of trust until recently is that she left the document at her parents' home in Germany, partly for safekeeping but also as she now believes subconsciously to keep the documents safe but at a distance due to its connection with the traumas of 2002. The document was only uncovered in 2017 when she was clearing her parents' home. It is her case that no copy of the declaration of trust was made.
31. The reference in the declaration of trust to 115-116 Florin Court is said to be a mistake and that the combined intention of Mr and Mrs Cutts was to refer to the Property. This is a surprising error to have made given that by September 2002 the title to the three flats was comprised in one lease and one Land Registry title. However, as Mr Bryden who appeared for Mrs Cutts pointed out, if Mrs Cutts was 'creating' a declaration to assist this claim, she might have been expected to get this basic point right.
32. Apart from Mrs Cutts' evidence about having made a financial contribution to the building works, the remainder of her evidence about making a contribution is generalised. She says she has made a significant contribution towards the upkeep of the Property, its maintenance and running costs both from her own accounts and those held jointly and solely by Mr Cutts. She provides evidence of payments made in 2008 and 2009 and says she paid the service charge, mortgage payments and other outgoings amounting to about £120,000 during that period.
33. Mrs Cutts has provided a small number of bank statements from an account with Coutts that is in their joint names. She has not provided a sequence of bank statements but merely statements showing sums credited to the joint account from her other resources. One of the credits is €370,000. The other sums are much smaller. There is almost no documentary evidence to support Mrs Cutts' assertions about payments made relating to the Property. No bank statements on their joint account with first direct are provided, very few statements on their joint account with Coutts are provided and no statements relating to accounts held in the sole name of Mr and Mrs Cutts. She provides evidence of the transfers into the Coutts joint account but not the expenditure.
34. Both Mr and Mrs Cutts gave evidence. I did not find either of them to be a satisfactory witness. There have been significant and unexplained failures by Mrs Cutts to provide evidence to support her case. Examples of this include accounts for the company, building control and planning documents, bank statements and evidence from her brother. No good reason has been provided for these failures. It may be that some of the bank statements that are historic would not have been available but there is no evidence of efforts to obtain them. There is only very limited evidence about her involvement with the refurbishment works. Mrs Cutts' evidence also suffered from her unwillingness to answer the questions she found difficult. For example, she was evasive when asked questions about the transfer of €370,000. She provided an explanation to her bank, LCL Banque Privee, saying she had a chance of profiting from an opportunity regarding property which have been presented as very short-term. This was her explanation to the bank to say why she wished to remove the funds from an account which is part of a longer term investment. Either she was misleading her bank (for reasons which are entirely unclear) or her explanation to the court that is untruthful. I prefer the latter explanation. I formed the clear view that in this respect, and many others, the court was not being given the full picture by her.
35. A witness may become muddled about dates where the events took place a long time ago. However, it is troubling that her case about the sequence of events relating to the conversion of the properties and the re-mortgage is so deeply flawed. And the idea that Halifax refused to agree to her being on a mortgage because she had no, or only limited, earnings in the United Kingdom lacks any credibility. She has no first-hand knowledge of what was said as between Mr Cutts and Halifax. (He was unclear whether he dealt with Halifax directly or through brokers).
36. In 2002 a new lease was granted relating to all three flats and that lease was taken in the sole name of Mr Cutts. Plainly, it was open to them to have agreed that the legal title should be held in their joint names and there is no good reason to think that Halifax would have declined to agree to the title being transferred into joint names and to have made a mortgage offer to them jointly. In any event, the reference in the evidence to "putting Mrs Cutts on the mortgage" focusses attention on the wrong legal estate.
37. No evidence was volunteered by Mr or Mrs Cutts about why they did not take the simple step of registering the property in their joint names in 2002 or 2003 or 2004. The absence of a full witness statement from Mr Cutts dealing with the creation of the title to the three flats is unhelpful. I formed the clear impression that he prefers to limit the information he provides. When asked, Mr Cutts said it did not occur to him to put the property in joint names in 2002. I am unable to accept his evidence on this point and any other material that issues. His evidence about discussions with Halifax were muddled and inconsistent. It is difficult to conceive why he would have wanted to ask Halifax about Mrs Cutts being put "on the mortgage" when he says it had not occurred to him that she could be on the title as a joint owner.
38. I am unable to accept Mr and Mrs Cutts evidence about the circumstances in which the declaration of trust came into being. Mr Cutts says the document was prepared in London and that is why the document says in a typed form "London 26, March 2003". He says he then took it to Germany for his wife to sign. She says that discussions about the document took place in Germany and the document was prepared there. The mismatch between the place they now say the document was signed and the statement on the document itself is significant.
39. The declaration of trust requires Mr and Mrs Cutts to reflect its terms in their wills. Neither of them made a will after the declaration of trust was apparently executed. Mr Cutts said he had decided a new will was not needed. It is difficult to understand why he, the draftsman, would have included this requirement if it was not necessary.
40. It is impossible to ignore the late revelation of the declaration of trust even taking into account Mr Cutts' passing reference to joint ownership in 2017. I am unable to accept that a document of such importance was left at Mrs Cutts parents' house in Germany and was only discovered fortuitously when it was being cleared. Mr Cutts had an opportunity to refer to it in 2005 and when providing details of his finances in 2007. I am satisfied that the declaration of trust bears all the hallmarks of a document created long after 2003. In my judgment, it was created recently with a view to using it to minimise the harm created by the judgement obtained by the claimant when the point was reached at which Sparkasse ceased to be willing to defer enforcement. It does not have the effect of evidencing Mr and Cutts' joint intention at the date it bears.
41. Even if the declaration of trust was created in 2003, there are real difficulties with it. It does not refer to the registered title of the Property and only refers to flats 115-116 Florin Court. It makes no reference to flat 117. On its face, therefore, it is incapable of evidencing a trust relating to the Property.
42. The purpose of making an order that Mrs Cutts should set out her case in points of claim was to ensure that the issues she wished to raise were set out so that Sparkasse was not taken by surprise at the trial. Although there may be circumstances in which the court is able to take a generous view about issues that have not been expressly pleaded, I do not consider that this is the appropriate occasion to do so. Mrs Cutts' case about the declaration of trust is inadequately pleaded. (The points of claim are not Mr Bryden's document). It would have been simple for her to have explicitly requested the court in her point of claim to construe the declaration of trust in accordance with established principles as relating to the Property. It is not possible to read her points of claim as raising this issue. Equally, she has not pleaded a case for rectification of the declaration of trust.
43. Mr Bryden put forward Mrs Cutts' claim principally on the basis that the wider evidence supports a common intention constructive trust. He points to the joint venture undertaken by Mr and Mrs Cutts in converting three apartments into one, their joint understanding and the statements Mr Cutts made. Such a case is capable of co-existing with the claim that relies on the declaration of trust, but it suffers from the difficulty that the existence of the express declaration of trust is inconsistent with the claim that the Property (that is the three apartments) was always to be held jointly by her and Mr Cutts. It is difficult to see how the court can properly conclude that there was a common intention trust relating to the Property when the parties entered into a sham written document which is inconsistent with that intention, because it only refers to part of the Property.
44. In any event, in light of the view I have taken about the quality of the evidence provided by Mr and Mrs Cutts, I am not satisfied that such a common intention existed. Regardless of what Mr Cutts may have said to Mrs Cutts, it appears to me far more likely that his intention was for the beneficial interest to be remain held solely by him. I have in mind in particular Mrs Cutts evidence about what she was told by her husband concerning the re-mortgage and Halifax's unwillingness to put her on the mortgage. The reasons he provided to Mrs Cutts do not bear close examination and could only have been intended to discourage her from requesting that the property be placed in joint names. She may have believed what she was told but Mr Cutts' actions do not chime with there being a common intention to hold the property on trust.
45. Mrs Cutts' case about her having made a financial contribution that is capable of giving rise to a resulting trust is not supported by the evidence she has provided. And I do not consider, on the evidence, she is able to establish promises made by Mr Cutts and detrimental reliance that is sufficient to found a proprietary estoppel in the circumstances of this case. All in all, Mrs Cutts has put forward an extremely muddled and unconvincing case that is an attempt to re-write the clear history that is set out in the title entries.
46. I will dismiss Mrs Cutts claim and give directions for the order of sale to be implemented.

Note 1   Paragraph 15.14(1)(e) of Practice Direction 8A refers to points of claim and defence in a context wholly unrelated to the present one.    [Back]