Golnar Zarbafi and Another v Arsalan Zarbafi
| Jurisdiction | England & Wales |
| Judgment Date | 07 May 2014 |
| Neutral Citation | [2014] EWHC 1787 (Ch) |
| Docket Number | Case No: HC14E00593 |
| Court | Chancery Division |
| Date | 07 May 2014 |
[2014] EWHC 1787 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
DEPUTY JUDGE CHARLES HOLLANDER QC
The Rolls Building
Fetter Lane
London EC4A 1NL
Case No: HC14E00593
Romie Tager QC, J CrystalandR Clegg (instructed by Hill Dickinson LLP) appeared on behalf of the Claimant
Elizabeth Weaver and Lily Mottahedan (instructed by Withers LLP) appeared on behalf of the Defendant
DEPUTY JUDGE CHARLES HOLLANDER QC:
Golnar Zarbafi ("Golnar") brings proceedings on behalf of herself and her father, Mahmood Zarbafi ("Mahmood"), as his litigation friend, against her brother Arsalan Zarbafi ("Asi"). She seeks summary judgment on part of the claim under CPR Part 24. This application was determined over today and yesterday and this is an extempore judgment.
The principles on which summary judgment applications are determined are well known and set out in the 2014 Supreme Court Practice at p734.
Mahmood came to England in 1979 and is now 80. He has had strokes and various serious medical conditions and requires full-time care. His wife, Ziba, died in 2005 and their children are Golnar, Asi and their brother, Amir. Golnar is the sole beneficiary under Ziba's Will, but it has not been proved as a Will, may not be recognised under Iranian law and, therefore, potentially may only cover English assets.
In 1987 Mahmood bought a property called Standford Grange. It was until 2002 registered in his own name. In 1987 he declared a Trust over the property in 20 per cent shares for himself, his wife and each of the three children. In 1992 there was a further Declaration of Trust whereby Amir and Asi transferred their 20 per cent interests to Ziba and Golnar respectively.
So in 1992, subject to what is now contended, the interest according to the Declarations of Trust were 20 per cent to Mahmood, 40 per cent to each of Zeba and Golnar. Asi's case in these proceedings is that it was the intention of Mahmood to create an unrestricted life interest in his own favour, notwithstanding the terms of the Trust Deeds.
Standford Grange was sold in September 2004. Prior to effecting that sale, Asi transferred the title from Mahmood's sole ownership to the ownership of himself and Mahmood. Then, relying on his title, Asi borrowed significant monies on the security of Standford Grange. He subsequently applied the borrowings and proceeds of sale in the purchase of a flat used as a residence for Mahmood at 44 Eaton Square and also, he says, to meet living care and medical expenses of Mahmood and Ziba. There is no suggestion that he used his own money for the purchase of 44 Eaton Square. He registered 44 Eaton Square in his own sole name.
In these proceedings Asi claims that all payments he made in relation to 44 Eaton Square were made by him as trustee for Mahmood and he says that he holds 44 Eaton Square on trust for Mahmood, rather than on the trusts of the 1987 and 1992 Trust Deeds. On his own case, he is a bare trustee of 44 Eaton Square.
The lease of 44 Eaton Square expires in 2016 and it is held by Asi as tenant of the Grosvenor Estate. Asi says that he thinks he can enter into a transaction whereby the lease will be extended and there is evidence dealing with that, which Golnar does not at all accept.
Asi has been marketing 44 Eaton Square. An injunction was granted at the outset of these proceedings ex parte by Warren J in favour of the Claimants to prevent Asi marketing or dealing with 44 Eaton Square. Asi says the injunction should be lifted to enable him to market the property.
Golnar now asks for summary judgment on a variety of claims for declarations as to the ownership of 44 Eaton Square and consequential orders. Further she seeks an order under CPR 19.8 in these proceedings to bring proceedings also on behalf of Ziba's estate. She also seeks various consequential relief in terms of the continuation of injunctions, which I will deal with separately.
Asi opposes summary judgment on the following grounds:
a. it is arguable that 44 Eaton Square is held on trust for Mahmood. Asi says it was the intent of Mahmood to create an unrestricted life interest in his own favour, notwithstanding the terms of the Trust Deeds.
b. it is arguable that Golnar is not entitled now to assert her beneficial ownership of 44 Eaton Square by reason of laches.
c. because of the conflict between the interest of Mahmood and the interest of Golnar it cannot be said that there is "No other compelling reason why the case should be disposed of at trial"
d. CPR 19.8 does not apply and therefore this claim is brought improperly on behalf of Ziba's estate.
Eaton Square held on trust for Mahmood?
The 1987 Trust Deed, dated 22 January 1987 stated:
"THIS DECLARATION OF TRUST is made the 22 nd day of January One thousand nine hundred and eighty-seven by Mahmood Zarbafi of 155 The Albany Manor Road Bournemouth in the County of Dorset (hereinafter called "the Trustee")
WHEREAS:-
1) The freehold interest in the land and premises (hereinafter called "the property") described in the Schedule hereto was conveyed unto the Trustee by a Conveyance dated the twenty-second of January One thousand nine hundred and eighty-seven in consideration of the sum of Two hundred and twenty thousand pounds (£220,000) therein stated to have been paid by the Trustees to the Vendors herein described Marchant-Lane Property Company Limited
2) The said sum of Two hundred and twenty thousand pounds (£220,000) together with the legal costs fees and Stamp Duties in connection with the said purchase were provided out of monies belonging to the property of the Trustee and Trustee's wife Ziba Mansour Tehrani Zarbafi and the three children of the Trustee and his said wife Arslan Zarbafi Amir Zarbafi and Golnar Zarbafi having been transferred to the United Kingdom out of funds held jointly by the Trustee his said wife and his said children in the Islamic Peoples Republic of Iran and being their sole and unencumbered property
NOW THIS DEED WITNESSETH as follows:-
THE TRUSTEE hereby declares that he holds the property on trust for himself and his said wife Ziba Mansour Tehrani Zarbafi his said son Arslan Zarbafi his said son Amir Zarbafi and his said daughter Golnar Zabafi in equal shares."
That provided for Standford Grange to be held on the various shares as set out.
The 20 March 1992 Trust Deed stated:
"THIS DECLARATION OF TRUST AND ASSIGNMENT OF EQUITABLE INTEREST is made the 20 th day of March One thousand nine hundred and ninety two BETWEEN MAHMOOD ZARBAFI of Standford Grange Standford Bordon in the County of Hampshire (hereinafter called "the Trustee") of the first part ARSALAN ZARBAFI of 107 Park St, London W1 (hereinafter called "Arsalan") of the second part and AMIR ZARBAFI of 6 Warrington Crescent, London W9 (hereinafter called "Amir") of the third part
WHEREAS
(1) By a Declaration of Trust dated 22 January 1987 by the Trustee the Trustee declared that he held the legal estate of the property described in the schedule thereto known as Standford Grange aforesaid in trust for himself and his wife Ziba Mansour Tehrani Zarbafi (hereinafter called "Mrs Zarbafi") and his three children Arsalan Amir and Golnar Zarbafi (hereinafter called "Golnar") in equal shares
(2) Amir is desirous of assigning his equitable interest in the property to Mrs Zarbafi
(3) Arsalan is desirous of assigning his interest in the property to Golnar
NOW THIS DEED WITNESSETH as follows
1. The Trustee hereby declares that he holds the property on trust for himself as to one fifth share and by the direction of Amir directing that his said share shall be assigned to Mrs. Zarbafi in trust for Mrs Zarbafi as to two one fifth shares and by the direction of Arsalan directing that his said share shall be assigned to Golnar on trust for Golnar as to two one fifth shares
IN WITNESS whereof the Trustee Arsalan and Amir have set their hands the day and year first before written …"
Those Declarations of Trust make clear the terms on which the property at Standford Grange was held. However, in Asi's evidence in his first witness statement at tab 17 of the main bundle he says as follows:
44. As I have already said, I accept that I hold 44 Eaton Square on trust for my father. I deny that my sister has any beneficial entitlement in that property or that she had any beneficial interest in Standford Grange.
Standford Grange legal/beneficial interests
45. When the Standford Grange property was first bought by my father in 1987 he entered into a Declaration of Trust dated 27 January 1987 declaring that he held the property on trust for me, my sister, my brother, my mother and himself in equal 20% shares [GZ1 p.1–3].
46. However, I am 100% certain that, irrespective of the legal position, my father never intended for any of the beneficiaries (myself included) to enjoy or have any say over the interest allocated to us in the property during his lifetime. That applied equally to all and any assets he had put in any of our names during his lifetime. He only intended for the beneficial interests to be effective when he passed away and subject to anything he had done with them in the meantime.
47. In entering into this declaration of trust my father was i) approaching matters from an Iranian cultural perspective where there are no wills and inheritance is in accordance with shari'a law unless assets intended to be received as inheritance are transferred during the transferor's lifetime and/or ii)...
To continue reading
Request your trial