Oh dear, oh dear …

Ashby v Kilduff [2010] EWHC 2034 (Ch) (available on Lawtel and through the Chief [those special powers again]) [edit: now on BAILII too) is about the proprietary consequences of the unhappy demise of the relationship between David Ashby, the former Tory MP, and Roderick Kilduff.  I’m never disposed to feeling empathy with Tory MPs (ex or otherwise) but David Ashby is in an entirely different category (particularly because, if you look at the Standing Committee debates on the Housing Bill 1995-6, he stood up a bit for housing and homelessness rights to the chagrin of other Tory members).  Cast your mind back to the “back to basics” campaign in the early to mid-1990s and you will remember the Sunday Times expose about Mr Ashby having an affair with Dr Kilduff.  They had bought two flats in a small block in Putney (my old stomping ground) and had kitted them out by having the living quarters in one flat and entertaining space in the other flat.

Mr Ashby unsuccessfully sued the Sunday Times for libel (his wife giving evidence against him), Dr Kilduff successfully settled out of court.  Mr Ashby became worried about the Sunday Times coming after him for their costs and also his wife seeking a divorce against him.  In 1995-6, Mr Ashby transferred his interest in his flat to Dr Kilduff, who took out a buy to let mortgage under which Mr Ashby was to be granted an assured shorthold tenancy (which was never signed and, indeed, neither party acted on its terms).  At the trial, there was disagreement about the intention behind this transaction – was it a genuine sale to Dr Kilduff or a sham transaction?  Mr Ashby claimed the latter, supported by his daughter, on the basis of a dinner conversation at a Thai restaurant, although Dr Kilduff disputed that such a conversation took place at the dinner.  Now, it was the case that: money had been paid to Mr Ashby (and had been used to pay off part of his costs to his libel solicitors, Carter Ruck), the sale was at a slight undervalue, Mr Ashby paid “rent” which was to cover the mortgage instalments, Mr Ashby had rekitted out the kitchen in 1996 and the electrics in 2005 (£10k for each), Dr Kilduff paid off the mortgage entirely by 2005 without telling Mr Ashby.  In their executed joint wills, Dr Kilduff left this property to Mr Ashby; Mr Ashby made no mention of any interest in it.

There was also a buy to let property which had been purchased in Manchester in their joint names as beneficial joint tenants.  Mr Ashby paid all the outgoings on the flat and paid the purchase money.  It was their express intention that the Mr Ashby would pay all the outgoings and receive all the rental income as a retirement investment for him.  In their executed joint wills, they each left their share of their interest in this property to each other.  The issue on this property was who was the beneficial owner as mr Ashby claimed the entire beneficial interest?

The relationship between Mr Ashby and Dr Kilduff ended in 2005 in bad circumstances.  Bernard Livesey QC, sitting as a Deputy Judge of the Chancery Division, made pretty devastating findings of fact about each of these parties – on Mr Ashby, “… he would in my judgment be quite prepared to tell a pack of lies if he believed it was just for him and in his interests to do so, in which case he could quite easily persuade himself of the truth and accuracy of an inaccurate account” (at [49]); on Dr Kilduff, “[Mr Ashby] was a generous giver in the extreme and Dr Kilduff appears not often to have turned down an opportunity to receive” and he “… has used all means at his disposal to argue his case, even to the extent of disclosing matters which he would know would be likely to humiliate Mr Ashby and gravely injure his feelings” (at [51]-[52]).

The Deputy Judge then made findings of fact which effectively disposed of the matter:

(1) the purported sale of the flat was genuine and there was no obligation on Dr Kilduff to allow Mr Ashby to remain in the property for the rest of his life.

(2) Mr Ashby paid rent and this was shown by reference to his cheque book pay stubs, movement of money by standing order between bank accounts, income tax and CGT returns.

(3) Mr Ashby’s evidence to this court about his evidence in the matrimonial proceedings was “highly unlikely” to have been accurately reported.

(4) The discussion in the Thai restaurant probably did not take place (and did not appear in their witness statements for this trial).

(5) Whether or not the assured shorthold (reported as a shorthold tenancy agreement protected by the Rent Acts, shurely a mistake) was technically valid, neither party was “troubled by the niceties of the obligations”, it negated Mr Ashby’s claim for a beneficial interest.

(6) The kitchen expenditure was too long past to be of any use (and preceded the matrimonial proceedings)

(7) The £10k on electrics was a different matter and created a proprietary estoppel interest in Mr Ashby’s favour on the basis of an implied representation by Dr Kilduff (by which one presumes the Deputy Judge meant that he stood by whilst Mr Ashby made the improvements, a la Lord Wensleydale in Ramsden v Dyson (1866) LR 1 HL 129).  (An argument that it gave him a CT under Stack was disposed of by the Deputy Judge saying, mysteriously, “I do not find the ration of this case entirely easy to reconcile to the facts of the present case”: [71]).  I cannot say that the Deputy Judge dealt with these points particularly well, but, equally, I can’t see either party appealing.  The Deputy Judge left it to the parties to agree how to satisfy the equity (either repayment or rent free licence for a period).

(8) As regards the Manchester property this was held on an express beneficial joint tenancy, subject to a trust that Mr Ashby was responsible for all outgoings and entitled to the income from the property during his lifetime.  Again, this is not particularly well dealt with.  The starting point must be right (Goodman v Gallant is the authority I use [but take your pick], the Deputy Judge didn’t bother with authority), but superimposed on that is a further express (presumably) sub-trust (hmm, formalities? effect on express jt?).

Posted in Trusts and Estoppel.

Leave a Reply (We can't offer advice on individual issues)

This site uses Akismet to reduce spam. Learn how your comment data is processed.