Laches

Patel and others v Shah and others [2005] EWCA Civ 157; NLJ 29 April

The defendants had purchased a number of properties in their names with the assistance of investors. When the property market slumped investors failed to contribute to the shortfall between the rental income and the mortgage payments. One of the original investors assigned its beneficial interest in the properties to the claimants for the sum of £1. The claimants did not tell the defendants about the assignment. In Lindley and Banks on Partnership, Lord Lindley wrote: ‘A court will not aid those who can be shown to have remained quiet in the hope of being able to evade responsibility in case of loss, but of being able to claim a share of gain in case of ultimate success.’ That principle applies with equal force to a joint venture of this kind. In upholding the judge’s dismissal of the claimants’ claim, the Court of Appeal said that in this case the trusts were merely vehicles for accomplishing a commercial aim. Not only did the claimants’ conduct fall within the principle enunciated by Lord Lindley, but it also fell within the overarching principle, embracing the defence of Laches, namely that the claimants’ conduct was such that it would be unconscionable to assert their beneficial rights.