Ali v Khan
| Jurisdiction | England & Wales |
| Judge | The Vice-Chancellor,Sir Swinton Thomas |
| Judgment Date | 11 July 2002 |
| Neutral Citation | [2002] EWCA Civ 974 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 July 2002 |
| Docket Number | Case No: B2/2002/0136 |
[2002] EWCA Civ 974
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM COUNTY COURT
His Honour Judge McKenna
Royal Courts of Justice
Strand,
London, WC2A 2LL
The Vice-Chancellor
Lord Justice Rix and
The Rt. Hon Sir Swinton Thomas
Case No: B2/2002/0136
Mr. John Randall QC and Ms Catherine Rowlands (instructed by Messrs Dickinson Parker Hill) for the Claimant/Respondent
Mr. Mark Cunningham QC and Mr. Abid Mahmood (instructed by Michael Lee & Co) for the Defendant/Appellants
The fourth defendant, Mr Gulzar Khan ("the Father") and his wife Saeeda Bibi ("the Mother") have six children. There are four daughters the claimant, Shazia Parveen Ali ("Shazia"), Haleya Parveen Ali ("Haleya"), the first defendant Naseem Khan ("Naseem") and Shenaz Bibi ("Shenaz"). The two sons are the second defendant ("Zulfiquar") and Zaheer Abbas ("Zaheer"). The only other party to these proceedings is the second defendant Rehanna Ali ("Rehanna"). She is the wife of Zulfiquar.
In 1986 the Father acquired the freehold of No 137 Grove Road, Sparkhill, Birmingham ("No 137") for use as the family home. Thereafter he lived in it with the Mother and their children, who were born between September 1977 and April 1985. On 24th September 1997 the Father, then aged 70, executed a transfer of No 137 in favour of Shazia and Haleya. No 137 had been recently valued for mortgage purposes at £75,000. The consideration specified therein was £25,000, which Shazia and Haleya borrowed from the Halifax Building Society on the security of No 137. The transfer was duly registered and Shazia and Haleya became the registered proprietors of No 137. The circumstances surrounding the execution of the transfer, to which I shall refer in detail later, are crucial to the resolution of the disputes between Shazia and her father, mother, sister, brother and sister-in-law.
Notwithstanding the execution of the transfer the Father and the Mother continued to live in No 137 with their children. The usual domestic bills were rendered to and paid by the Father as well after the transfer as before. The sums due to the building society were paid by Shazia. In November 1998 Shazia and Haleya married in Pakistan. Their respective husbands, Mumtaz and Liquat Ali, are brothers and sons of a brother of the Father. Shortly thereafter, and also in Pakistan, Zulfiquar married Rehanna. In due course the Father, Mother, Shazia, Haleya, Zulfiquar and Rehanna returned from the weddings in Pakistan and continued to live at No 137 with Naseem, Shenaz and Zaheer. In December 1999 Mumtaz and Liquat Ali came to England and joined their wives at No 137.
Unfortunately it proved impossible for all of them to live at No 137 in harmony. In July 2000 Haleya and Liquat left. Haleya transferred her interest in No 137 to Shazia for no consideration except a release of her covenants by the Halifax Building Society. This transfer was duly registered so that Shazia became the only registered proprietor of No 137. In October 2000 Shazia and Mumtaz, Shenaz and Zaheer also left. There remained living at No 137 the Father, the Mother, Naseem, Zulfiquar and Rehanna.
By a letter dated 19th December 2000 solicitors acting for Shazia wrote to the Father, the Mother, Naseem, Zulfiquar and Rehanna requiring them to vacate No 137 within 21 days. They refused to do so and Shazia commenced these proceedings in the Birmingham County Court on 12th April 2001. Her claim for possession was founded on her title as sole registered proprietor of No 137.
The claim was disputed by the Father. He averred that at the time of the transfer No 137 was worth £75,000. He alleged that in 1997 he wanted to raise money to enable him to pay for the impending weddings of Shazia, Haleya and Zulfiquar. He claimed that in order to raise that money he agreed with Shazia and Haleya that they should buy part of his interest. In paragraph 6 of the defence and counterclaim, he alleged that it was the common intention of Shazia, Haleya and himself that Shazia and Haleya should not acquire the entire beneficial interest in No 137 but only such share as reflected their financial stake in No 137, that the Father would retain a beneficial interest therein and should have the right to occupy No 137 for the remainder of his life. He claimed that the transfer was executed in accordance with and in reliance on that agreement and that he subsequently spent some £9,700 on works to No 137. He sought declarations that (a) Shazia holds No 137 on trust for herself and the Father in the proportion 1/3rd:2/3rds or in such other shares as the court may direct, and/or (b) the Father is entitled to occupy No 137 by virtue of his beneficial interest in No 137 or by virtue of a proprietary estoppel.
These contentions were denied by Shazia in her reply and defence to counterclaim. She admitted that the property had been sold at an undervalue but contended that this was to compensate her and Haleya for agreeing to the marriages with Mumtaz and Liquat Ali which the Father had arranged. She denied that there was any agreement that she and Haleya should buy only part of the Father's interest in No 137. She maintained that they had agreed to buy the whole of the Father's legal and beneficial interest. She specifically denied that the Father was to have the right to occupy No 137 for the rest of his life.
The trial of the action took place before HH Judge McKenna on 5th, 6th and 7th November 2001. Oral evidence was given for Shazia by, amongst others, Shazia, Haleya, Liquat, Mumtaz, Zaheer and Shenaz. Oral evidence on behalf of the defendants was given by the Father, the Mother, Zulfiquar and Naseem. Mumtaz, Liquat, the Father and the Mother gave their evidence through an interpreter.
Judge McKenna gave judgment on 14th November 2001. After setting out the undisputed facts which I have summarised the judge referred to the evidence he had heard from various members of the family. He observed that a good deal of it was repetitive so that he proposed to concentrate on the evidence of the principal witnesses on each side, namely Shazia and the Father.
The judge described the evidence of Shazia in some detail. He stated that in numerous respects he found her evidence unsatisfactory. He described certain statements made by her as being intentionally misleading. He concluded that he could not accept her evidence. It is important to appreciate what allegations were made and rejected. First, Shazia alleged that the Father needed to raise capital in order to return to Pakistan. It was, she suggested, for that reason that he wanted to sell "the family home" to her and her sister outright for £25,000. Second, she accepted that the sale was at an undervalue but contended that to that extent the transfer effected a gift to her and her sister. She claimed that the Father did not trust Zulfiquar and wished Shazia to be responsible for and look after the rest of the family. Third, she claimed that the Father did not need to raise £25,000 to pay for the weddings and had in fact spent considerably less.
The judge noted that the evidence of Shazia was at odds with that of the Father. As we do not have transcripts of his oral evidence it is appropriate to set out in full the judge's description of it:
"[The Father] says that in 1997 he did indeed have a need to raise funds, but not to go and live in Pakistan as contended for by [Shazia], but rather to pay for the marriages of three of his children, [Shazia], her sister Haleya and his son Zulfiquar. He estimated that the cost of these weddings would be a maximum of £25,000 and that is how the figure of £25,000 raised came to be identified. He himself did not have any sufficient savings and his income was modest being a small pension from Rover, his state pension and various other benefits in the nature of State benefits.
Zulfiquar was only 17 and earning little as an apprentice and his other children were even younger. [Shazia] and Haleya, on the other hand, were both over 18 and in the case of [Shazia] at least in gainful employment with Birmingham City council.
The issue was discussed within the family and it was agreed that the way in which the necessary funds would be raised was by [Shazia] and Haleya purchasing the property from the Father with the benefit of a mortgage from the Halifax Building society for the amount the Father estimated he needed to fund the weddings. However, says the Father, it was never his intention to transfer ownership of the property outright to his two daughters but rather that in due course they would transfer the property back, not to him, but to his son Zulfiquar.
Following the transfer, utility bills continued to be addressed to the [Father] and he continued to pay them. Indeed he suggests that everything continued as before the transaction.
Now the [Father] was somewhat confused as to the exact basis on which the property was to be held by the claimant and Haleya. In his witness statement he suggest that it was to be held on trust for himself and his wife. This would suggest, as it seems to me, that the daughters did not acquire any beneficial interest in the property, although it must be said that it was clear from his evidence that he had no real understanding of the meaning of the expression of holding property on trust, certainly in the legal sense of the meaning of those words.
In the amended defence and counter-claim it is suggested that the two daughters should obtain a share of the beneficial interest which reflected the extent of their financial stake in the...
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