Arthur Panayotis Fitzwilliam v Richall Holdings Services Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Newey : |
| Judgment Date | 28 January 2013 |
| Neutral Citation | [2013] EWHC 86 (Ch) |
| Docket Number | Case Nos: HC11C01929 and HC11C04534 |
| Court | Chancery Division |
| Date | 28 January 2013 |
[2013] EWHC 86 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Royal Courts of Justice,
7 Rolls Buildings, Fetter Lane,
London, EC4A 1NL
Mr Justice Newey
Case Nos: HC11C01929 and HC11C04534
Mr Richard Clegg (instructed by Colman Coyle) for the Claimant
Mr Greville Healey (instructed by Underwood & Co) for the Defendant
Hearing dates: 10-13 December 2012
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This case concerns the ownership of a house at 100 Richmond Avenue, London N1.The claimant, Mr Arthur Fitzwilliam, was for many years registered at HM Land Registry as the proprietor of 100 Richmond Avenue, but the defendant, Richall Holdings Services Limited ("Richall"), was registered in his place after a Mr Sameer (or "Sam") George had purported to sell the property to it using a power of attorney supposedly granted to him by Mr Fitzwilliam. Mr Fitzwilliam maintains that he never authorised the sale and that the power of attorney is a forgery. On that basis, he seeks to have the register altered in his favour pursuant to schedule 4 to the Land Registration Act 2002 and/or an order for 100 Richmond Avenue to be transferred to him. Among other things, the case raises issues as to whether the decision of the Court of Appeal in Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151, [2002] Ch 216 (which related to the Land Registration Act 1925) should be followed in the context of the 2002 Act.
Factual history
Mr Fitzwilliam was for many years based in Dubai, where he has been involved in property development. He also owns firms engaged in providing financial advice in the United Arab Emirates. In addition, he has property interests in this country.
Richall was incorporated in the British Virgin Islands on 29 September 2009. It is owned by the trustee of a discretionary trust ("the Kumar Trust") of which Mr Rajinder Kumar and members of his family are possible beneficiaries. Mr Kumar has for many years worked in the travel and tourism business as well as investing in property.
Mr Fitzwilliam was registered as the proprietor of 100 Richmond Avenue in 1972.
In June 2003, 100 Richmond Avenue was let to a Mr Roderick Kentish and a Miss Teresa Rider. The initial tenancy agreement provided for the property to be let from 27 June 2003 to 25 June 2004, subject to each party having the right to terminate on two months' notice. The agreement was to "take effect subject to the provisions of Section 11 of the Landlord and Tenant Act 1985 as amended by section 116 of the Housing Act 1988 if applicable to the tenancy".
The tenancy of 100 Richmond Avenue was renewed on a number of occasions. The last renewal before the purported sale to Richall was effected in June 2009. A memorandum of agreement dated 9 June 2009 provided for Mr Kentish and Miss Rider to take "a renewal of the original term within the Agreement [defined as 'The original agreement dated 26th June 2008'] to commence on 26th June 2009 to end on 25th June 2010".
On 6 June 2008, Mr Fitzwilliam was arrested in Dubai. He was subsequently charged with aiding and abetting a bank fraud, and he remained in prison until 27 April 2011, when he was acquitted.
While in prison, Mr Fitzwilliam became friendly with a fellow inmate, Mr Ahmed Farhat, known as "Mikey". Mr Farhat was acquitted and released from prison in October 2008.Not long after this, he lent Mr Fitzwilliam £20,000 to resolve a cash flow problem Mr Fitzwilliam had.
Mr Farhat also put Mr Fitzwilliam in touch, by telephone, with Mr George. Mr George told Mr Fitzwilliam that he was willing to intercede on his behalf with Sheikh Maktoum's sons, with whom he claimed to play poker, to try to secure his (Mr Fitzwilliam's) release from prison. He said, too, that he was seeking to raise money for a deal he wanted to do in Iraq. Mr Fitzwilliam told Mr George of someone who might be able to help him obtain funding, but ultimately agreed to lend Mr George £200,000 himself.
The £200,000 was provided from the proceeds of sale of one of Mr Fitzwilliam's London properties. The property in question, 43 Thornhill Square, was sold in March 2009. The sale needed to be made because the Dubai bank accounts of Mr Fitzwilliam's companies had been frozen, and the proceeds of the sale were in large part used to meet unpaid salaries and other liabilities of the companies. £20,000 was also transferred, on 26 March, to an account in the name of Mr George's mother, in repayment of the sum that Mr Fitzwilliam had borrowed from Mr Farhat. £200,000 of the balance was paid to Mr George's company, Al-Samawa Group Limited, on 30 March in respect of the loan Mr Fitzwilliam had agreed to make.
Mr George had agreed with Mr Fitzwilliam that the latter would receive a return of £30,000 a month until the £200,000 was repaid. In the event, Mr George made only three payments of £30,000. Some smaller sums were paid subsequently, and £25,000 in March 2010 (which Mr Fitzwilliam's wife understood to be from the sale of a car). Nothing further was paid. Mrs Fitzwilliam was constantly given excuses for non-payment by Mr George.
At some stage, Mr George told Mr Fitzwilliam that he could help him to raise money on the security of 100 Richmond Avenue and another property, 8 Hale House, Lindsay Square, London SW1. Mr Fitzwilliam was keen to obtain such funding to assist with the mortgage payments on a further London property, 72 Chester Square. He was prepared to lend any surplus to Mr George.
Mr Fitzwilliam never authorised Mr George to effect a sale of either 100 Richmond Avenue or 8 Hale House. His objective was to borrow money on the security of the properties, not to sell them.
Mr George met Mr Kumar for the first time at the Mayfair Hotel in London in late October or early November of 2009. Mr George alleges that the meeting was pre-planned, but I accept Mr Kumar's evidence that, so far as he was concerned, he was at the hotel merely to meet a close friend of his, Mr Taher Suterwalla. Mr Suterwalla already knew Mr George and introduced him to Mr Kumar. A number of other people were also there; Mr Kumar assumed that everyone but him and Mr Suterwalla was connected with a conference that was taking place in the hotel. Those present may well have included brothers by the name of Vaid, but Mr Kumar was not acquainted with them.
In the course of conversation at the Mayfair Hotel, Mr George asked Mr Kumar whether he would be interested in making a bridging loan to be secured against 100 Richmond Avenue and/or 8 Hale House. Mr Kumar was not prepared to make a loan, but he indicated that he might be willing to buy the properties on the basis that each would be subject to an option entitling Mr Fitzwilliam to buy it back within 12 months. Mr Kumar spoke of paying 60% of the value of the properties as assessed by a valuer he would instruct. In discussions subsequent to the meeting, Mr Kumar agreed to work by reference to 65% of the valuation figure rather than 60%.
According to Mr Kumar, Mr George said that he had been granted a power of attorney by the owner of the properties, Mr Fitzwilliam. Mr George claims that he had been informed by the Vaid brothers in advance of the Mayfair Hotel meeting that they had told Mr Kumar that the power of attorney in Mr George's favour was a forgery. He also asserts that he told Mr Kumar during the meeting that he had forged the power of attorney. I reject this version of events. My reasons include these. First, Mr Kumar struck me as a truthful witness. Secondly, I cannot regard Mr George as a reliable witness. By his own account, he was guilty of forgery and lied to Mrs Fitzwilliam. Mr Farhat said in evidence that he had been told many things by Mr George and 99% of them were untrue. Thirdly, Mr George was maintaining to Mr Kumar as late as June 2011 that Mr Fitzwilliam was aware of the transaction. That would make little sense had Mr George known Mr Kumar to have been aware from the outset that the power of attorney authorising him to act on Mr Fitzwilliam's behalf was a forgery. Fourthly, it is inherently improbable that Mr Kumar would have been willing to proceed with the transaction had he known that the power of attorney was forged. As Mr Kumar explained, he is a director of a FTSE 100 company and runs reputable businesses with a large number of employees; he is not likely to have been unwise and dishonest enough to put his career at risk by knowingly participating in a fraudulent transfer of 100 Richmond Avenue. Nor is he likely to have risked his money (or that of the Kumar Trust) on a transaction he knew to be a sham.
On 9 November 2009, Mr Kumar emailed Mr Kenneth Le Claire, who has worked for successive trustees of the Kumar Trust, to say that he would like the trust to purchase 100 Richmond Avenue (and also at that stage 8 Hale House) using a new company. On 11 November, Mr Le Claire acquired Richall on behalf of the Kumar Trust with a view to its being used in the acquisition of 100 Richmond Avenue.
At much the same time, Lamberts, a firm of chartered surveyors, were instructed by Mr Kumar to value 100 Richmond Avenue (as well as 8 Hale House). They reported that the market value of 100 Richmond Avenue was £850,000.
By 27 November 2009, a firm of solicitors called Fernando & Co had been retained by Mr George. On 7 December, Underwood & Co, who were acting for Richall, pressed for a certified copy of the power of attorney under which Mr George was acting. Not having received such a copy, Underwood & Co wrote to Fernando & Co again on 9...
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