Imran Kanval v Rizwan Kanval

JurisdictionEngland & Wales
CourtChancery Division
JudgeMr Recorder Richard Smith
Judgment Date12 Apr 2021
Neutral Citation[2021] EWHC 853 (Ch)
Docket NumberClaim No PT-2018-000579

[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

Before:

Mr Recorder Richard Smith

(Sitting as a Judge of the Chancery Division)

Claim No PT-2018-000579

Claim No PT-2017-000201

Between:
Imran Kanval
Claimant
and
Rizwan Kanval
Defendant
And Between:
Javaid Kanval
Claimant
and
(1) Rizwan Kanval
(2) Prince Evans Solicitors
Defendants

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

1

INTRODUCTION

(a) Background

1

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”).

2

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

3

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.

4

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

5

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.

6

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

7

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.

8

Javaid moved out of Sutherland in 2010,...

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