Legal Principles and Key Points

  • In the case of Zeital v Kaye [2010] EWCA Civ 159, the deceased gifted a flat to the woman he had a relationship with (as opposed to leaving it to his previous family), though he could only make this imperfect gift a perfect one by doing everything in his power to complete the transfer

Facts of the Case

  • A man (Raymond Zeital) died intestate; the appellants (As) – his wife Giselle and daughter Kim (plus Natasha, Raymond’s other daughter) – were the sole administrators and beneficiaries of the deceased’s estate
  • Giselle and Raymond separated 20 years before the man’s death in 2004, after which he formed a relationship with Stefka Appostolova
  • The case arose because of the voluntary liquidation of Dalmar Properties Ltd, who had acquired a flat in Barnet; Raymond incorporated Dalmar Properties
  • This flat cost £99,750, funded by a loan of £46,500 from Northern Rock Plc
  • Cannon Reid & Co was found to be the landlord of this flat, though, the judge discovered that Raymond was the actual owner – he had another business going by this name
  • The Zeitels and Stefka dispute over who received the shares of this flat; Stefka claimed that Raymond had given her the shares
  • In August 2003, Raymond handed Stefka the complete stock transfer form of the shares; there were two shares, of which the second were owned by a different person (Mrs. Kumar); Stefka claimed the shares were a gift to her from Raymond

Issues in Zeital v Kaye [2010] EWCA Civ 159

  • The initial ruling of the case declared that the Zeitels had no legal interest in the shares and that they ought to remain with Stefka; the Zeitels challenged this

Held by the Court of Appeal (Civil Division)

  • Appeal allowed – it was held that the Zeitels had a beneficial interest in the property as Raymond had not transferred the shares to Stefka because he had not provided her with the title documentation that she needed in order to be registered as a member of Dalmar (bearing in mind he could have equipped her with this document)
  • The cross appeal was also dismissed
  • Lord Justice Rimer
  • Rimer LJ distinguished Re Reose [1952] Ch 499 on a factual basis and was not convinced that Raymond was a constructive trustee for Stefka of the second share
  • ‘It is common ground that immediately before the handing of the stock transfer form to Stefka in August 2003 Mrs Kumar was the legal owner of the second share and Raymond was its beneficial owner. Raymond had, therefore, no more than an equitable interest in the share. Accepting that his actions and words of August 2003 evinced a donative intent in respect of the second share, he could on one view do no more than transfer or assign that equitable interest. Moreover, it is no part of Mr Banks’ argument for Stefka that Raymond did transfer to Stefka more than that equitable interest.’ [35]
  • ‘He did not purport to declare a trust (which, had he wanted to, he could have done orally). Nor did he effect a written assignment either to Stefka or to a trustee for her. I would not regard the stock transfer form signed by Mrs Kumar as constituting such an assignment. That was a document she had signed for the purpose of enabling a future transfer of the legal title to the second share. It did not purport to assign Raymond’s equitable interest in the share.’ [37]
  • Lord Justice Maurice Kay and Lord Justice Dyson
  • Both laconically agreed with the judgement above, without providing any further commentary