Imran Kanval v Rizwan Kanval
| Jurisdiction | England & Wales |
| Judge | Mr Recorder Richard Smith |
| Judgment Date | 12 April 2021 |
| Neutral Citation | [2021] EWHC 853 (Ch) |
| Date | 12 April 2021 |
| Docket Number | Claim No PT-2018-000579 |
| Court | Chancery Division |
[2021] EWHC 853 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY DIVISION
PROPERTY TRUST AND PROBATE LIST (ChD)
Royal Courts of Justice
Rolls Building,
Fetter Lane,
London, EC4A 1NL
Mr Recorder Richard Smith
(Sitting as a Judge of the Chancery Division)
Claim No PT-2018-000579
Claim No PT-2017-000201
Nigel Woodhouse (instructed by Steadfast Solicitors) for the Claimants
Elizabeth Fitzgerald (instructed by Dewar Hogan) for the Defendant/ First Defendant
APPROVED JUDGMENT
HEARING DATES: 2–5 and 12 February 2021
Table of Contents
| 1. INTRODUCTION | 4 |
| (a) Background | 4 |
| (b) The parties' cases in outline | 4 |
| (i) Imran and Javaid's case | 4 |
| (ii) Rizwan's case | 5 |
| (c) The ‘beneficial interest’ question | 5 |
| (d) Common intention constructive trusts — legal principles | 6 |
| (i) Express agreement to share beneficial ownership | 6 |
| (ii) Inferring a common intention to share beneficial ownership | 6 |
| (iii) ‘Ambulatory’ beneficial ownership | 7 |
| (iv) Burden | 7 |
| (e) Preliminary observations on the evidence | 8 |
| (i) The witnesses | 8 |
| (ii) ‘Case building’/ ‘reverse engineering’ | 8 |
| (iii) Naseem's evidence | 8 |
| (iv) Raza's evidence | 9 |
| (v) November 2017 family meetings | 9 |
| (vi) Evidence of Imran, Javaid and Rizwan | 10 |
| 2. THE EVIDENCE | 10 |
| (a) Pre-Osterley | 10 |
| (b) Osterley — 1994–2004 | 11 |
| (i) Imran and Javaid buy Osterley – June 1999 | 11 |
| (ii) Javaid, Urfan and Raza move into Osterley – 1999–2000 | 11 |
| (iii) The brothers' contributions to the Osterley household expenditure | 12 |
| (iv) Osterley renovations – 2000–2002/ Abid moves in – 2001 | 12 |
| (v) The Osterley “house notes” | 13 |
| (vi) The sale of Osterley – January 2004 | 15 |
| (c) Pre-Sutherland (2004–2006) | 15 |
| (i) The alleged ‘buy out’ of Raza's share in Osterley | 15 |
| (ii) The Kanval brothers' Queen's Drive rental | 16 |
| (iii) The Kanval parents' Princess Gardens rental | 16 |
| (d) Sutherland — 2006–2011 | 16 |
| (i) The Sutherland purchase — 2006 | 16 |
| (ii) Rizwan and Urfan's involvement in the Sutherland acquisition | 16 |
| (iii) Reasons for Rizwan being on the Sutherland mortgage | 17 |
| (iv) The alleged Sutherland agreement | 17 |
| (v) The Sutherland finances – 2006–2010 | 18 |
| (vi) The Devonport renovations – 2007–2010 | 18 |
| (vii) Imran's financial position in 2010 | 19 |
| (viii) The crowded conditions at Sutherland — 2010 | 19 |
| (ix) The first disputed family meeting – February 2010 | 19 |
| (x) Imran moves out of Sutherland – May 2010 | 19 |
| (xi) The Devonport sale proceeds – July 2010 | 20 |
| (xii) Imran and Javaid's case on the Devonport sale proceeds | 21 |
| (xiii) The second disputed family meeting – August 2011 | 22 |
| (xiv) The Spreadsheet | 24 |
| 3. ALLEGED AGREEMENT TO SHARE IN SUTHERLAND | 26 |
| (a) Factors supporting the alleged Osterley/ Sutherland agreement | 26 |
| (i) Limited equity | 26 |
| (ii) Interdependence | 27 |
| (iii) The nature of the brothers' contributions | 27 |
| (b) Factors militating against the alleged Osterley/ Sutherland agreement | 28 |
| (i) Fixed contributions | 28 |
| (ii) Use of bank accounts not controlled by the brothers | 28 |
| (iii) Ignorance of Osterley sale proceeds/ equity share | 29 |
| (iv) Use of the Devonport sale proceeds | 29 |
| (v) Javaid's renewal of his Albany Road tenancy | 30 |
| (vi) Cumbersome nature of the alleged Osterley/ Sutherland agreement | 31 |
| (vii) Lack of legal documentation | 31 |
| (c) The Defendant's ‘vague’ case on the alleged Osterley agreement | 32 |
| (i) Rizwan's pleaded case | 32 |
| (ii) Rizwan's evidence | 33 |
| (iii) Urfan's evidence | 33 |
| (iv) Raza's evidence | 34 |
| (v) Naseem's evidence | 35 |
| (vi) Abid's evidence | 35 |
| (vii) Conclusion on the Defendant's evidence | 37 |
| (d) Difficulties with the Claimants' evidence | 37 |
| (e) The Spreadsheet re-visited | 38 |
| (f) The two November 2017 family meetings | 39 |
| (g) Motives | 40 |
| 4. CONCLUSIONS ON BENEFICIAL OWNERSHIP | 41 |
| 5. DISPOSAL OF EQUITABLE INTERESTS — FORMALITIES | 43 |
| 6. DISPOSAL OF IMRAN'S SHARE | 44 |
| (a) Rizwan's new-found wealth – August 2011 | 44 |
| (b) The third disputed family meeting – September 2011 | 44 |
| (c) Imran had no reason to sell | 45 |
| (d) Imran's ‘disinterest’ in investing in Range Road | 47 |
| (e) Imran's explanation for why Rizwan paid him £65,000 | 48 |
| (f) Danny's evidence | 49 |
| (g) Other improbabilities | 50 |
| (h) Conclusion as to the sale of Imran's share | 51 |
| (i) The sale of the other brothers' shares | 52 |
| 7. DISPOSAL OF JAVAID'S SHARE | 52 |
| (a) Effect of my findings on Javaid's case concerning his Sutherland share | 52 |
| (b) The fourth disputed family meeting – October 2011 | 52 |
| (c) The status of the £37,770 payment to Javaid | 53 |
| 8. JAVAID'S DECEIT CASE | 53 |
| (a) Javaid's deceit case in outline | 53 |
| (b) Deceit – legal principles | 54 |
| (i) Nature of the representation | 54 |
| (ii) Falsity | 54 |
| (iii) Fraud | 55 |
| (iv) Inducement | 55 |
| (v) Continuing representations | 56 |
| (vi) Duty of disclosure in fiduciary relationships | 57 |
| (vii) Causation | 57 |
| (viii) Remedies | 57 |
| (c) Javaid's first deceit claim – Rizwan's available funding | 57 |
| (i) Introduction | 57 |
| (ii) Javaid's first deceit claim – discussion | 58 |
| (iii) Javaid's first deceit claim – inducement/ materiality | 59 |
| (d) Javaid's second deceit claim – intention to ‘take over’ the mortgage | 60 |
| (i) Introduction | 60 |
| (ii) Javaid's second deceit claim – discussion | 63 |
| (iii) Javaid's second deceit claim – inducement/ materiality | 64 |
| (e) Causation | 65 |
| (f) Remedies | 66 |
| 9. JAVAID'S BREACH OF CONTRACT CLAIM | 66 |
| 10. FINAL CONCLUSIONS AND DISPOSAL | 66 |
INTRODUCTION
(a) Background
This judgment concerns a dispiriting dispute between three of the Kanval brothers about the beneficial ownership of a property at 35 Sutherland Road, Ealing, London W13 0DX (“ Sutherland”).
The immediate Kanval family members and their role (if any) in these proceedings are identified in the table below. I refer in this judgment to each family member by forename.
| NAME | ROLE |
| Kanval brothers | |
| Javaid (04.02.1970) | Claimant/ witness for Claimants |
| Kamran (14.08.1971) | None |
| Imran (26.08.1972) | Claimant/ witness for Claimants |
| Urfan (20.08.1973) | Witness for Defendant |
| Rizwan (13.02.1977) | Defendant/ witness for Defendant |
| Raza (03.07.1978) | Witness for Defendant |
| Amar (13.11.1979) | None |
| Abid (10.05.1984) | Witness for Defendant |
| Kanval parents | |
| Abdul (father) | None (died 2017) |
| Naseem (mother) | Witness for Defendant |
These proceedings comprise two closely related actions, one by Imran against Rizwan, the other by Javaid against Rizwan and their former solicitors. They follow a prior reference to the First-Tier Tribunal (Property Chamber) as a result of Imran's application to register a restriction against Sutherland. Given the Tribunal's more limited jurisdiction, that reference was stayed to allow the dispute to be resolved in the Chancery Division. On 1 June 2019, the two actions were ordered to be case managed and heard together. Javaid's claim against the Second Defendant was subsequently compromised. The trial therefore concerned only the claims by Javaid and Imran against Rizwan.
The evidential phase of the trial took place in person over four days between 2 and 5 February 2021. I heard closing arguments remotely on 12 February.
(b) The parties' cases in outline
(i) Imran and Javaid's case
Imran and Javaid claim that they were (and remained throughout) the joint legal and beneficial owners of 24 Osterley Views, Norwood Green, UB2 4UN (“ Osterley”). They purchased this property using their own funds and their joint mortgage. Rizwan, Urfan, Raza and Abid came to live with them. Since the first three worked, they contributed to the household expenses but none of them enjoyed a beneficial interest in Osterley. Osterley was sold in 2004. Following a period spent by the family in rented accommodation, part of the Osterley sale proceeds were used to purchase Sutherland. On this occasion, Javaid and Rizwan acquired legal title and held the mortgage jointly. However, it was agreed with Rizwan that the beneficial ownership of Sutherland would be held on the same basis as Osterley, namely for the joint benefit of Imran and Javaid.
In 2011, legal title to Sutherland was transferred into Rizwan's sole name. Javaid claims that this followed his offer to sell Rizwan his 50% share for £175,000. In the event, Rizwan said he could only afford £15,000. Javaid therefore agreed to sell Rizwan a small part of his 50% interest on the basis that Javaid would come off the Sutherland legal title and mortgage. Javaid now seeks to set aside that sale for deceit. Imran claims that he never parted with his 50% beneficial share in Sutherland and Rizwan therefore continues to hold this for his benefit.
(ii) Rizwan's case
Rizwan's account is very different. He claims that, following their purchase of Osterley, Javaid and Imran agreed that the working brothers who contributed to the household expenditure – Imran, Javaid, Rizwan, Urfan and Raza — would enjoy a beneficial interest in the property proportionate to their contributions and that Abid would enjoy a fixed share. Save in respect of Raza, the same agreement was later expressly repeated for Sutherland.
Javaid moved out of Sutherland in 2010,...
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