Constructive trust by recorded conversation
In a recent and forthright judgment (the full judgement can be read here [http://www.bailii.org/ew/cases/EWHC/Ch/2016/1432.html], in which he found that the first defendant lied and was evasive, HHJ David Cooke relied heavily on transcripts of conversations between the parties to infer the existence of a constructive trust (although this is not expressly set out in the judgement) and to conclude that the claimant was entitled to the beneficial ownership of shares in two companies. This was despite the fact that there was no documentary evidence to substantiate the existence of a beneficial entitlement and, in fact, such documentary evidence as did exist seemed to conceivably support the defendant’s contention that the claimant was merely an employee.
The striking point in this case is that it turned on the evidence presented by the claimant in the form of transcripts of recordings that he made (it must be assumed clandestinely) of conversations between himself and the first defendant. It is clear that this evidence is central to the judge’s decision to find in favour of the claimant. We do not know what the outcome might have been had this evidence not been available – but it must certainly have been more doubtful that the claimant would have succeeded.
The trouble with relying upon this sort of evidence is that one party knows that the conversation is being recorded and the other (usually) does not. In these circumstances there may be a temptation on the part of the party seeking to rely upon the recording to steer the conversation in a particular way, seek admissions which would otherwise not be volunteered by someone who knew that the conversation was being recorded or otherwise seek to omit or take out of context some aspects of what was said in favour of his own cause.
HHJ Cooke accepts that there may be intrinsic difficulties in relying upon this sort of evidence, but nonetheless concluded that in this case there was great value in the recordings. Whilst the merits of introducing such evidence must, as always, be considered on a case by case basis, it seems to me that in an age where every mobile telephone is equipped with a recorder that there will be more and more cases where such recordings are used as evidence.
If you would like to discuss anything from this article please call us on 0161 745 9170.