Bhura v Bhura

JurisdictionEngland & Wales
CourtFamily Division
JudgeMr Justice Mostyn
Judgment Date18 Mar 2014
Neutral Citation[2014] EWHC 727 (Fam)
Docket NumberCase No: FD12F00238

[2014] EWHC 727 (Fam)

IN THE HIGH COURT OF JUSTICE

FAMILY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Mostyn

Case No: FD12F00238

Between:
Smruti Dharmesh Bhura
Applicant
and
Dharmesh Dwarkadas Bhura
1st Respondent
Yogesh Kumar Dwarkadas Bhura
2nd Respondent
Bhanamati Dwarkadas Bhura
3rd Respondent
The Estate of Dwarkadas Ramji Bhura (Deceased)
4th Respondent

Geoffrey Kelly (instructed by Whitworth and Green) for the applicant

Marilyn Kennedy-McGregor (instructed by YVA Solicitors) for the 2 nd– 4 th respondents

The first respondent appeared in person

Hearing dates: 21 – 24 October 2013 and 10–12 March 2014

Mr Justice Mostyn Mr Justice Mostyn
1

In this judgment I shall refer to the parties as follows:-

i) the applicant, Smruti Bhura, as "the wife";

ii) the first respondent, Dharmesh Bhura, as "the husband";

iii) the second respondent, Yogesh Bhura, who is the husband's brother, as "Yogesh";

iv) the third respondent, Bhanamati Bhura, who is the husband's mother, as "the mother"; and

v) the late Dwarkadas Bhura, who was the father of the husband and Yogesh and married up to his death to the mother, and whose estate is the fourth respondent, as "the father".

2

By an application made under Part 18 of the FPR 2010 the wife seeks declarations that the properties 116 Mayfield Avenue, London N12 9JE ("Mayfield Avenue") and 31 Pembroke Road, London HA9 7PD ("Pembroke Road") are wholly or mainly beneficially owned by the husband, notwithstanding that (i) the legal title to Mayfield Avenue is held in the four names of the father, the mother, the husband and Yogesh, and there is a signed TR1 declaring that they hold it as tenants in common in equal shares, and (ii) the legal title to Pembroke Road is in the sole name of Yogesh.

3

The background to this case is set out in my judgment given in proceedings under s5 of the Debtors Act 1869 between the husband and the wife on 17 December 2012 sub nom Bhura v Bhura [2012] EWHC 3633 (Fam)1. I would suggest that anyone reading this judgment should at this point turn to and read that earlier judgment. Shortly stated, I awarded a suspended prison sentence of 6 weeks against the husband, the term of suspension being that he should pay the American judgment debt, interest and costs in the total sum of £1,256,676 by 16:00 on 18 March 2013. I also charged the husband's interest in Mayfield Avenue with the sum of £1,256,676.

4

The husband did not pay by the due date and the wife applied for the warrant of execution to be issued. That application came before me on 4 June 2013. The husband's father had died on 27 May 2013 and the whole family was in mourning. As an act of mercy I deferred the execution of the warrant until 1 July 2013. I also directed that any application by the wife for declaratory relief in relation to the two properties should be issued by 11 June 2013 and gave consequential case management directions, which included a direction that the final hearing should be listed with a time estimate of 4 days.

5

On 1 July 2013 the husband duly surrendered to the tipstaff and was incarcerated in HM Prison Pentonville from where he was released three weeks later.

6

The wife's application came before me on 21 October 2013. It became obvious early on that the time estimate was wrong. On the fourth day the case was adjourned for three more days on 10 March 2014, which were all fully used. In all I heard oral evidence from 12 witnesses and had to consider documentation filling 14 lever arch files. The inquiry has focussed on events which took place between 1989 and 2006.

7

Normally in a case such as this the parties start on the same line. However here in terms of credit and credibility the husband starts a long way behind the wife. I have already found him to be an unscrupulous husband and a dishonest litigant. I have made clear findings (as has Judge Blum in Georgia) that with his late father's assistance he spirited a way a large amount of valuable jewellery with the intention of defeating the wife's claim for a financial remedy. I have found that the jewellery (or its value) still exists, but its whereabouts are unknown (see para 49 of my earlier judgment). I therefore have sympathy with all legitimate attempts by the wife to locate assets against which to enforce the unsatisfied judgment debt owed to her. But she can only enforce against a property beneficially owned by the husband. In determining whether property is or is not owned by the husband I must rigorously apply our law of property and must not allow my feelings of sympathy for the wife to colour the exercise (although, of course, when issues of credibility between the husband and the wife arise I will have in mind my previous finding of dishonesty against the husband).

8

The applicable legal principles concerning a property dispute such as this are tolerably clear and have most recently been re-stated by the Supreme Court in Jones v Kernott [2011] UKSC 53, [2012] 1 AC 776. In summary I think they are as follows.

i) If there is an express declaration of beneficial interests then that is, almost invariably, the end of the matter. Such an express declaration can only be displaced if it has been procured by fraudulent conduct. In this case it is said by the wife that the signed TR1 for Mayfield Avenue is a sham. A sham is of course a species of fraud. It involves the parties entering into a dishonest compact, i.e. a conspiracy, to express the true state of affairs falsely in the written agreement. I will analyse the law relating to sham transactions a little later.

ii) If there is no express agreement about the beneficial interests then there is likely to be (at least) a tacit understanding. This is hardly surprising as one would expect that when people enter into what may very well be the most important economic transaction in their lives – buying a home – they would have a pretty clear understanding of who owned what share of it. In determining whether there was such a tacit understanding, and if so what it was, the court will look at all the evidence holistically and will examine the whole course of the parties' conduct in relation to the property.

iii) In the rare case where the evidence does not reveal a tacit understanding about ownership the court can reach for the presumptions. An obvious presumption is that beneficial ownership is the same as legal title (see Jones v Kernott at paras 17 and 51(1)).

iv) Another is the presumption of the resulting trust. In Pettitt v Pettitt [1970] AC 777 at 824 Lord Diplock doubted that it was of much relevance in the modern era. In his view it would be "an abuse of the legal technique for ascertaining or imputing intention to apply to transactions between the post-war generation of married couples 'presumptions' which are based upon inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era." Some commentators believe that the doctrine has a medieval origin. The principal problem with it is that that it allows the "solid tug of money" (as Woodhouse J evocatively put it (echoing George Eliot) in Hofman v Hofman [1965] NZLR 795 at 800) "to submerge any faint suggestion that other [non-financial] contributions play a valuable part in the acquisition of family assets".

v) A further presumption is the presumption of advancement but this can be regarded as being on its death-bed given that it is abolished by s199 Equality Act 2010, which is awaiting implementation.

vi) But presumptions are only presumptions. In a memorable dictum Lamm J in Mackowick v Kansas City St. J. & C.B. Ry., 196 Mo. 550, 571, 94 S.W. 256, 262 (1906) stated that "presumptions may be looked on as the bats of the law, flitting in the twilight, but disappearing in the sunshine of actual facts".

vii) "Actual facts" are those which suggest that a result steered by a presumption is unfair. Although there are different degrees of emphasis and nuance all of the Justices in Jones v Kernott accepted that where a tacit agreement could not be found by a process of inference the court could impute to the parties a fair agreement which they never in fact made but which they should "be taken" as having made (see paras 45, 60, 72, 85(2))). Of course, as Woodhouse J pointed out, this involves a "fictional attribution of intention", but the process has a long pedigree. One only needs to remind oneself of Lord Denning MR's statement in Appleton v Appleton [1965] 1 WLR 25 at 28 to see how the wheel has turned full circle. There he said "A judge can only do what is fair and reasonable in the circumstances. Sometimes this test has been put in the cases: What term is to be implied? What would the parties have stipulated had they thought about it? That is one way of putting it. But, as they never did think about it at all, I prefer to take the simple test: What is reasonable and fair in the circumstances as they have developed, seeing that they are circumstances which no one contemplated before?" I cannot see any difference between that statement and that of Lord Wilson in para 87 where he rhetorically asked "where equity is driven to impute the common intention, how can it do so other than by search for the result which the court itself considers fair?"

9

I revert to the law concerning sham transactions. I myself had to consider this in Kremen v Agrest [2010] EWHC 2571 (Fam), [2011] 2 FLR 478. At paras 12 I quoted from the convenient summary expressed by Munby J in A v A [2007] 2 FLR 467 at paras 32–33, 50 and 53. He in turn analysed the classic definition of a sham by Diplock LJ in Snook v London and West Riding Investments Ltd [1967] 2 QB 786, and the more recent exposition by Arden LJ in Hitch v Stone (Inspector of Taxes) [2001] EWCA Civ 63, [2001] STC...

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