A challenge to a trial judge’s findings of fact must demonstrate that the decision was plainly wrong, in the sense that it was one that no judge could have reached.
In McCarthy v Jones and another [2023] EWCA Civ 589 the Court of Appeal has dismissed an appeal concerning beneficial ownership in a Majorcan villa.
The case concerned a contract between Andrew McCarthy and William Jones in 2008 whereby McCarthy would obtain ownership of a yacht and Jones would acquire the beneficial interest in a villa in Mallorca and a mooring in mainland Spain. McCarthy held the legal title to the villa and granted a power of attorney to a Spanish lawyer, to enable Jones to sell it at an optimal time.
The judge found McCarthy to be in breach of contract in a number of ways: the revocation of the power of attorney; its subsequent reinstatement in favour of Brian Proctor, a creditor of Jones; and the sale of the villa in 2016 to a third party. Jones was awarded damages of €1.025m.
McCarthy argued that an e-mail of 9 December 2010 recorded an oral contract for Jones to release his beneficial ownership in the villa to Proctor. The judge had accepted Jones’ case, which was that the e-mail was simply one of a number of proposals under discussion at the time. While the Court of Appeal was prepared to accept that there were features of the e-mail which pointed either way, the question was not whether they would have made the same finding as the judge but whether his conclusion was one no reasonable judge could have reached.
McCarthy had agreed to reinstate the power of attorney in February 2014. The obvious interpretation was that it would be exercisable on the same basis as the original, on Jones’ instructions. Consequently, neither McCarthy nor Proctor could have supposed that Jones had given up his beneficial entitlement to the villa in 2010.
McCarthy also argued that Jones was estopped by convention from disputing that he had any beneficial interest in the villa arising from dealings in 2016. Such an estoppel requires a common assumption to be expressly shared between the parties which the person alleging it has relied on to their detriment. The judge found that the e-mail traffic fell short of establishing a common shared assumption and that, since McCarthy had decided to act independently of Jones in 2014, there was no reliance. This was a finding the judge was entitled to make.
Louise Clark is a property law consultant and mediator
