Ali v Bashir and Another

JurisdictionEngland & Wales
JudgeHH Judge Pelling QC
Judgment Date22 October 2014
Neutral Citation[2014] EWHC 3853 (Ch)
Docket NumberClaim No: HC14E02544
CourtChancery Division
Date22 October 2014

[2014] EWHC 3853 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building,

110 Fetter Lane,

London EC4 1NL

Before:

His Honour Judge Pelling QC

(SITTING AS A JUDGE OF THE HIGH COURT)

Claim No: HC14E02544

Between:
Ali
Claimant
and
Bashir & Another
Defendants

Mr Falkowski appeared on behalf of the Claimant.

[] appeared on behalf of the First Defendant.

Mr Hamer appeared on behalf of the Second Defendant

Approved Judgment

Wednesday, 22 October 2014

HH Judge Pelling QC

Introduction

1

This is the hearing of an application by the claimant for an order that an interim charging order made on 16 October 2013 be made final. It was also due to be the hearing of an application for an order for the sale of the Property the subject of the charging order. This is also the hearing of an application by the claimant for an order pursuant to Section 423 of the Insolvency Act 1986, setting aside a declaration of trust by which the first and second defendants, who are married, purportedly declared themselves to hold the Property the subject of the interim charging order on trust for the second defendant absolutely. I say "purportedly", because it is the claimant's case that the declaration of trust is a fabrication and/or a sham, and thus ought not to be given effect to in accordance with its terms.

2

As will be apparent from what I have said so far, the following issues arise and must be determined in the following order:

a. Is the declaration of trust a fabrication or a sham?

b. If not, should it nonetheless be set aside under section 423 of the Insolvency Act 1986?

c. If the answer to either (a) or (b) is yes, should the interim charging order be made final?

3

The application for an order for sale is not effective. At the outset of the hearing, Mr Hamer, on behalf of the second defendant, submitted that the application for an order for sale ought not to proceed because (a) the Part 8 claim form had not been issued, (b) the evidence currently available did not comply with all the requirements of CPR 73 practice direction, and (c) the medical evidence on which the second defendant wishes to rely had not been agreed, and the medical practitioner concerned were not available to give evidence before me.

4

In the light of these submissions, I directed that the claim for an order for sale should not proceed, and against an undertaking from the claimant's solicitors to issue the claim form by 12 noon on 21 October 2014, which I later extended until after delivery of this judgment, I gave some directions as to the management of that claim, and further directed that the claim was to be transferred to and determined in the County Court at Guildford, the nearest trial centre to the home of the defendants. These directions are, of course, all provisional, in the sense that they will fall away if the declaration of trust is upheld.

5

In relation to the transfer to the County Court, I note that by CPR 73.10(2) the claim should be issued in the court that made the charging order. However, if the undertaking is complied with, then the proceedings seeking an order for sale will have been issued in the High Court. In directing transfer, I have exercised my powers under section 40(2) of the County Court Act 1984 and CPR 30.3. The sum in issue is less than what is now the County Court limit, but whether it is or is not is immaterial to the effectiveness of the transfer – see National Westminster Bank v King [2008] EWHC 280 (Ch). I would add that, in my view, these proceedings ought to have been transferred in their entirety into the County Court once they had been issued in the High Court. Nonetheless, I intend to proceed with the application under section 423 and the application to make the interim charging order final, rather than transferring them to the county court as well, only because all parties are ready, and to transfer the proceedings into the County Court at this stage would add to the costs burden of the parties rather than reduce them and would not otherwise lessen the burden of this litigation upon them.

Background.

6

I now turn to the facts of this dispute. The background facts are not in dispute. The defendants are, as I have said, a married couple. It is not disputed that the second defendant was brought up in the United Kingdom, the first defendant was brought up in Pakistan, and that their marriage was an arranged one. The defendants contend, and again it is not disputed, that for much of the marriage the second defendant was the breadwinner, working first in a bank and then a doctor's surgery. Initially they lived with the second defendant's parents, but in time were able to rent a property from their local authority. The first defendant accepted in cross-examination, and I find, that they were joint tenants of the rented property.

7

The defendants exercised their right to purchase that property, the address of which is 17 Blackmore Crescent, Woking, Surrey (the "Property"), and by a transfer dated 22 December 1997 the Property was transferred to them. The Property was not registered land prior to their acquisition, but was first registered upon its acquisition by the defendants. It is for that reason I find that the title number was left blank on the transfer document. The transfer document is dated 22 December 1997, and the copy in the bundle is date-stamped by Durham District Land Registry 14 January 1998, that being the date when the defendants were, in the event, registered as joint proprietors of the Property. The defendants purchased the Property in part using a loan from UCB Home Loan Corporation that was secured by a first legal charge over the Property. The office copy entries for the Property available to me record the charge as being dated 22 December 1997, and as being registered on 14 January 1998.

8

The declaration of trust which is at the heart of this dispute (the "Trust Deed") is dated 14 January 1998. There is a dispute as to when it came into existence, but its apparent date makes it convenient to refer to it at this stage. The Trust Deed describes itself as being supplemental to a transfer of whereby the Property had been transferred to the defendants. That was wrong, because, as is common ground, the transfer is dated 22 December 1997. The Trust Deed refers to the registered title number of the Property as being SY675031. That number was not allocated until 14 January 1998, as I have explained, because it was only on that date that the Property was registered. The claimant relies upon this as demonstrating that the Trust Deed could not have been made on the date that appears on it, i.e. 14 January 1998, because the title number could not have been known by that date. The first defendant was cross-examined about this point, but had no satisfactory explanation for it. The document is signed by both defendants, as I have said, and the signature was witnessed by Mr Abdul Rahman.

9

There are two other features of the Trust Deed that I should record at this stage. Firstly, paragraphs 1, 2 and 3 of the Deed respectively provide as follows:

"1. The Trustee shall hold the Property upon trust to sell the same and to hold the net proceeds of sale for Mrs Bashir absolutely.

2. Mrs Bashir shall have sole use and occupation of the Property and Mr Bashir shall at her request execute such transfer of the Property as Mrs Bashir shall at any time determine.

3. Mrs Bashir hereby covenants with Mr Bashir to pay all principal money and interest secured by the Legal Charge and to indemnify him from and against all claims and demands of the UCB Home Loans under or by virtue of the Legal Charge."

These paragraphs are potentially significant because (a) the Property has never been sold and (b) the second defendant has not at any stage had the sole use of the Property. At all times the first defendant has lived at the Property with his wife, the second defendant and their children. The claimant relies on these factors as supporting his contention that the Trust Deed is a sham. Secondly, the Trust Deed was not registered or submitted for registration at or about the time when it was purportedly made. The only reference to it in the office copy entries is dated 19 August 2013 when a restriction to the following effect was added to the Register:

"(19.08.2013) RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court."

10

It was accepted by the first defendant in the course of his oral evidence that the Trust Deed was sent to the Registry on or about that date and not before. The claimant relies on this feature as demonstrating that the document could not have come into existence until shortly before 19 August 2013, at any rate when taken with the other factors relied upon.

11

On 3 May 2012 the first defendant stood for re-election as a local councillor for the Sheerwater Ward of Woking Borough Council. The first defendant was elected, but the claimant challenged the outcome by a petition presented to the Election Court on 25 May 2012, on the grounds that the election was procured by corrupt and/or illegal practices on the part of the first defendant and his agents and/or there was general corruption in the ward to secure the election of the first defendant. On 27 July 2012 an application by the first defendant to have the petition dismissed summarily was heard by Slade J and Nichol J and was dismissed, and on that date a Commissioner was appointed to hear the petition. The copy of the Deed in the bundle...

To continue reading

Request your trial
1 cases
  • Deansgate 123 LLP v Ian Garth Workman
    • United Kingdom
    • Chancery Division
    • 11 January 2019
    ...the validity or effectiveness of a transfer. I was referred to Midland Bank plc v Wyatt [1997] 1 BCLC 242 and Ali v Bashir & another [2014] EWHC 3853 (Ch), [2015] BPIR 211 as examples of cases where the court had at the same time considered whether a trust deed was a sham and also whether,......
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT