Jennifer Yalcinkaya (Aka Jenny Lee) v Metin Hassan
| Jurisdiction | England & Wales |
| Judge | David Holland |
| Judgment Date | 11 October 2022 |
| Neutral Citation | [2022] EWHC 2516 (Ch) |
| Docket Number | Case No: PT-2020-000842 |
| Court | Chancery Division |
| Year | 2022 |
[2022] EWHC 2516 (Ch)
Mr David Holland KC
Sitting as a Deputy High Court Judge
Case No: PT-2020-000842
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
7 Rolls Buildings
Fetter lane, London
EC4A 1NL
Sam Brodsky (instructed by Dumonts Solicitors) for the Claimant
The First Defendant appeared in person
The Second Defendant did not appear and was not represented.
Hearing dates: 27 th June – 1 st July 2022
Approved Judgment
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and released to The National Archives. The date and time for hand-down is deemed to be 11th October 2022 at 10.30am.
David Holland KC:
Introduction
This is the trial of two consolidated cases which relate to the ownership, proceeds of and rental income from five residential properties in South London.
The properties are as follows:
a. 226a Devonshire Road, London SE23 3TQ (registered under title number TGL168570) (“Devonshire Road”)
b. 14 Kashmir Road, London SE7 8QL (registered under title number TGL33402) (“14 Kashmir Road”)
c. 33 Kashmir Road, London SE7 8QN (registered under title number TGL179877) (“33 Kashmir Road”)
d. 38 Highcombe, London SE7 7HR (registered under title number TGL187160) (“38 Highcombe”)
e. 26 Charlton Dene, London SE7 7BZ (registered under title number SGL346917) (“Charlton Dene”)
I shall refer to these properties collectively as “the Properties”.
The Claimant originally issued proceedings in the County Court at Bromley on 2 nd September 2019 seeking an order for possession of 33 Kashmir Road against the Second Defendant who occupies that property under a tenancy granted by the First Defendant. Possession was (and still is) claimed under Ground 8 to Schedule 2 of the Housing Act 1988 on the basis of alleged rent arrears. The proceedings were defended by the Second Defendant on the basis that there were no arrears as he had paid his rent to the person who was his landlord, that is the First Defendant. The First Defendant intervened in the County Court proceedings.
In the meantime, on 27 th October 2020, the Claimant issued proceedings in this court seeking declaratory and other relief in relation to the Properties. By order of Master Teverson dated 29 th January 2021, the County Court proceedings were transferred to this court and consolidated.
The Parties cases in summary
In summary, the Claimant claims as follows.
She asserts that she allowed the First Defendant to manage on her behalf three of the Properties, being Devonshire Road, 33 Kashmir Road and 38 Highcombe, which were acquired and owned legally and beneficially by her. In breach of trust and fiduciary duty, the First Defendant failed to:
(i) provide the Claimant with a proper account in respect of his management of those properties;
(ii) pay to her the amount due in respect of the rents and profits from those properties; and
(iii) pay to her the proceeds of sale of Devonshire Road and 38 Highcombe.
In addition she alleges that he sold 38 Highcombe without her knowledge or consent
She also alleges that she paid to the First Defendant £80,000 in exchange for a 50% beneficial share in the other two Properties, namely Charlton Dene and 14 Kashmir Road, of which he was already the legal and beneficial owner. This is accepted by the First Defendant (although he asserts that the sum was £85,000). However the Claimant alleges that, in breach of trust and fiduciary duty, the First Defendant has failed to:
(i) provide her with any accounts in respect of his management of those properties;
(ii) pay her share of the rents and profits from those properties;
(iii) pay her proper share of the sale proceeds of Charlton Dene (paying to her instead only the sum of £30,000 despite the sale price being £170,000).
In addition, she alleges that he has now purported to sell 14 Kashmir Road to his daughter at a gross undervalue and without her knowledge or consent.
As stated, the Second Defendant is the present occupier of 33 Kashmir Road and the Claimant continues to seek possession of that property from him.
The First Defendant denies these claims. His case is, in short, that in late 2002 or early 2003, the Claimant and he entered into a partnership or joint business venture whereby it was agreed that:
(i) The Claimant would re-mortgage her existing property at Devonshire Road;
(ii) The First Defendant would refurbish Devonshire Road, and use his own monies to do so;
(iii) Devonshire Road would then be rented out once refurbished;
(iv) The First Defendant would then hold a 50% beneficial interest in Devonshire Road;
(v) The Claimant would use some of the released sums to invest in properties already owned by Mr Hassan, namely Charlton Dene and 14 Kashmir Road;
(vi) She would pay the First Defendant £85,000 for a 50% beneficial share in Charlton Dene and Kashmir Road;
(vii) They would both then invest and purchase further properties, which would be owned equally. Specifically, they would use their own monies to contribute to the purchase price and/or refurbishment and/or upkeep of any such properties;
(viii) Each would be beneficially entitled to the profits from the properties in equal shares; and
(ix) Since she would have to vacate Devonshire Road, the Claimant could live with Mr Hassan.
He alleges that, pursuant to this arrangement or agreement:
(i) He arranged for Devonshire Road to be refurbished in around mid-2003. The refurbishment included, but was not limited to, replacing: the windows and doors; the carpets and flooring; the kitchen units and furniture as well as decoration. He estimates that he spent about £20,000 of his own money on these works.
(ii) Devonshire Road was thereafter rented out to tenants until it was sold.
(iii) A joint bank account was opened into which the rental sums from the Properties were paid and from which various expenses, including the monthly mortgage payments, were defrayed.
(iv) The Claimant re-mortgaged Devonshire Road in the sum of £141,965 of which £85,000 was paid to the First Defendant (for a 50% share in 14 Kashmir Road and Charlton Dene) and £43,069.73 to the Claimant. It is agreed that, following this payment, the Claimant held a 50% beneficial share in 14 Kashmir Road and Charlton Dene.
(v) Whilst 33 Kashmir Road and 38 Highcombe were purchased in the Claimant's sole name with mortgages in her sole name, it was always intended that they should be jointly owned beneficially. The First Defendant asserts that he paid £10,000 from his own funds by way of contribution to the deposit on 33 Kashmir Road and £20,000 from his own funds by way of contribution to the deposit on 38 Highcombe. The reason that these properties were purchased and mortgaged in the Claimant's sole name was, he asserts, because she could obtain a much better mortgage deal if the properties were bought by her alone.
(vi) 33 Kashmir Road and 38 Highcombe were then rented out to tenants and the proceeds paid into the joint account.
Thus he asserts that:
(i) The Claimant held Devonshire Road, 33 Kashmir Road and 38 Highcombe on trust for herself and the First Defendant in equal shares.
(ii) He held 14 Kashmir Road and Charlton Dene on trust for himself and the Claimant in equal shares.
However, he asserts that, in or around late 2006 or early 2007, the Claimant, having married a Turkish national, wished to move permanently to Turkey and therefore the parties agreed to dissolve or terminate their joint arrangement. He says they came to an agreement as follows (which in his Defence is referred to as “the Dissolution Agreement”):
(i) Devonshire Road was to be sold and was sold in May 2006. The net proceeds were £54,013.86 and were paid into the joint account and then to the Claimant. She had already received £30,000 as a result of an earlier re-mortgage of that property and this sum was deemed to be hers as well.
(ii) Charlton Dene was to be sold and was sold in February 2007 for £170,000. The net proceeds of sale were £29,000. It was agreed that the Claimant would have these and she was paid £30,000 by way of bankers draft from the First Defendant's son.
(iii) Additionally, a loan of £8000 taken out by the Claimant was to be paid out of the joint funds and the First Defendant agreed to write off £7000 in rent arrears owed by the Claimant's daughter and son on 38 Highcombe.
(iv) He also asserts that he gave the Claimant £20,000 by way of a banker's draft.
(v) The remaining properties, 14 Kashmir Road, 33 Kashmir Road and 38 Highcombe were to be retained and owned beneficially by the First Defendant.
The First Defendant asserts that, in effect, the Dissolution Agreement was put into effect. From March 2007 the Claimant has been permanently resident in Turkey and between that date and early 2019, she had little, if anything, to do with the three remaining Properties which have been treated by him as if he owned them. He has retained the rental income from the remaining Properties because, he asserts, he was entitled to do so. At the same time he has paid all the outgoings including the mortgage payments. He did sell 38 Highcombe and retain the proceeds because he was entitled to do so. He has “sold” 14 Kashmir Road to his daughter for the price of £162,000 because the term of the existing interest only mortgage was about to come to an end and that was the sum his daughter could obtain by way of mortgage loan which was sufficient to discharge the capital sum that was due. He accepts that this sum is well below the market value of 14 Kashmir Road but asserts that the whole point of the exercise was to pay off the existing loan and retain the property as a family home.
The facts accepted and...
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