Mars Capital Finance Ltd v Mr Zahid Hussain

JurisdictionEngland & Wales
JudgeMr M H Rosen
Judgment Date06 September 2021
Neutral Citation[2021] EWHC 2416 (Ch)
Docket NumberClaim No. BL-2018-001625
CourtChancery Division

[2021] EWHC 2416 (Ch)




Royal Courts of Justice

Rolls Building, Fetter Lane, London, EC4A 1NL


Mr M H Rosen QC, sitting as a Judge of the Chancery Division

Claim No. BL-2018-001625

Mars Capital Finance Limited
(1) Mr Zahid Hussain
(2) Mr Costas Papachristoforou
(3) Mrs Kyriacoulla Papachristoforou
(4) Mr Demitrakis Tsolakides
(5) Mrs Sophia Ktori

Mr Thomas Grant QC and Mr Laurie Brock of Counsel (instructed by Teacher Stern LLP) appeared on behalf of the Claimant

The First Defendant appeared in person. The Second and Third Defendants did not appear and were not represented

Hearing Dates: 21, 22, 23, 26 and 27 July 2021


(1) Introduction


In these proceedings, the Claimant finance company (‘Mars’) on one side, and the First Defendant Mr Zahid (also known as John) Hussain and the Second and Third Defendants Mr and Mrs Costas and Kyriacoulla Papachristoforou on the other side, seek opposing declarations relating to various loans and mortgages originally taken by the Defendants from the UK branch of the Cyprus Popular Bank Public Company Limited (‘the Popular Bank’) trading under the name ‘Laiki Bank’. Mars alleges and the Defendants deny that such loans and mortgages have been validly transferred via the Bank of Cyprus to Mars and that it is entitled to take enforcement action as regards the same.


The proceedings were issued on 18 July 2018 and the original five defendants served a Defence and Counterclaim dated 10 October 2018 subsequently amended on 30 March 2020. During at least that period, when disclosure and exchange of witness statements and experts reports took place, their solicitors were Emms Gilmore Liberson (‘EGL’, later called Knights). The Fourth and Fifth Defendants Mr Demitrakis Tsokalides and Mrs Sophia Ktori settled their dispute with Mars by a consent order dated 7 June 2021, after those solicitors had come off the record for the First to Third Defendants in January 2021, seemingly due to some perceived conflict of interest.


The trial, first listed for May 2020 but adjourned for COVID-related reasons to January 2021 (when Mars served its then skeleton) was further adjourned to late July 2021 in the light of the First to Third Defendants' difficulties without their former solicitors. In the event the First to Third Defendants did not engage new solicitors thereafter. A further adjournment application was refused by Mr Justice Michael Green on 22 June 2021 and Mr Hussain then conducted the (remote) trial for himself, with the assistance of his brother Masud Husain, whom he described as a banker in Amsterdam and who co-authored Mr Hussain's written submissions. Mr and Mrs Papachristoforou did not attend or otherwise participate, or even respond to the notifications of trial.


In the result, the trial might be said to have been in a number of ways ‘one-sided’ or unbalanced. Mars were represented throughout by Thomas Grant QC and Laurie Brock of counsel instructed by Mars' solicitors Teacher Stern, who fully addressed the pleaded issues. Mr Hussain gave and made little if any coherent evidence or submissions going directly to those issues. Instead he devoted himself orally and in writing to repeated collateral attacks, some long-standing and others still evolving, on the conduct of the Popular Bank, Mars, its solicitors and others, alleging fraud and forgery at every conceivable (if often irrational) turn.


The function of the trial judge in such circumstances was to ensure that fairness and justice still prevailed. This required significant endeavour to assist Mr Hussain to understand, identify and explain any relevant points and to allow him to develop whatever might reasonably support or oppose the rival declarations sought. This judgment seeks to explain the legal issues and the documented facts as they unravelled. As always, the superior legal resources of one side compared to the other should not allow for its case to pass without critical scrutiny and the inability of the opposing party to concentrate on relevant matters without diversions should not be allowed to overwhelm any case on the merits. Mr Husain's case did not grapple with those issues or facts but instead depended on his, in the event unwisely, seeking to sweep away all the documents as fabricated. That was a task which, for a host of reasons, was entirely beyond him. But that was of necessity not the end of the determination of Mars' title to the loans and mortgages which the Defendants had put into question.

(2) Background — the loans and mortgages


The relevant documents of the Popular Bank, for which alleged copies were put into evidence, show in the case of Mr Hussain, two loans under letters dated 6 June and 1 December 2006 initially for £168,000 and £330,000, and a current account (no. 81079816 (allegedly at one point over £47,000 overdrawn); and four legal mortgages in standard form over four separate properties in Sutton Coldfield, West Midlands dated 13 December 2002, 3 November 2005, 7 August 2006 and 5 March 2007. One of these was in respect of Mr Hussain's residence at 57 Stonehouse Road, Boldmere B73 6LL, and the other three were over buy-to-let flats which he acquired (respectively Flats 1, 2 and 15 Arbor Court) at 295, 293 and 301 Penns Lane, Walmley B76 1NA.


In the case of Mr and Mrs Papachristoforou, there were ten loans under facility letters dated between 19 May 2005 and 8 May 2009 for varying amounts of between £65,000 and £220,000; and two standard legal mortgages dated 7 October 2002 and 3 June 2003 in respect of their home at The Lodge, Quarry Park Road, Norton, Stourbridge DY8 2RE and another property at 107 Bromford Lane B24 8JR respectively.


Each of the loans was governed by the Popular Bank's standard terms and conditions, updated from time to time, referred to in and attached to the facility letters. At trial Mr Husain denied that any of what appeared as his signatures on these copy documents were his. He said that he was dyslexic and had learnt to read only during these proceedings and in preparation for the trial. He denied that the copy facility letters and terms and conditions relied on by Mars were genuine, in the absence of its producing the Popular Bank's originals and given what he claimed to be documentary anomalies such as page numbering and line spacing.


He did not produce any alternative documentation but claimed among other things that an earlier version of the standard terms and conditions in a letter offering previous facilities, which did not contain a provision relating to the transferability of the loans, went to prove that later alleged versions were false.


However there was little put in dispute on the pleadings as regards the loans and the mortgages. Whilst the Defence denied four out of the ten loans to Mr and Mrs Papachristoforou, and Mr Hussain said that he had long disputed with the Popular Bank and since, the amounts outstanding on his loans, he admitted taking the loans alleged, for which he ceased making any repayments after they were allegedly transferred from the Popular Bank and from at least 2014 (whilst continuing to receive the rents totalling over £1,500 per month from his three buy-to-let properties).


Mr Hussain also claimed that, in or about November 2009, the manager of the Popular Bank's UK branch a Mr Tasos Dimitriou orally agreed to release the mortgage over 295 Penns Lane; but he adduced no documents as would usually be necessary in support of this otherwise bare assertion. Indeed, on 20 December 2012, in proceedings 1BM73006 (‘the 2012 Birmingham possession proceedings’) a District Judge of the Birmingham County Court made a possession order in favour of the Popular Bank against Mr Hussain in respect of this and the other two Arbor Court flats, wholly inconsistent with any such assertion.


Similarly whilst the Amended Defence and Counterclaim contained a bare denial of Mr Hussain's current account, he could not and did not maintain that in evidence, and indeed a complaint letter written to the Popular Bank on Mr Hussain's behalf in March 2012 expressly mentioned it. I must unfortunately refer separately below to some of the other outlandish and groundless allegations made by Mr Hussain.


As for Mr and Mrs Papachristoforou, their witness statements expressly accepted that their ten loans were made and the bank statements show repayments. Unlike Mr Hussain, they did not deny accepting the standard loan terms and conditions; indeed, in several cases, these were specifically and separately signed. Mr Papachristoforou's witness statement said only that he did not recall signing or accepting them.

(3) The transfer from the Popular Bank to the Bank of Cyprus


By early 2013, the Popular Bank (second in size in Cyprus only to the Bank of Cyprus) was at imminent risk of insolvency, part of a critical state of collapse for Cyprus' entire economy and banking system, apparent from a judgment of the Supreme Court of Cyprus in the case of Christodoulou referred to further below.


In response to that situation, the Cyprus parliament enacted the Resolution of Credit and Other Institutions Law of 22 March 2013 which provided for a ‘Resolution Authority’, namely the Central Bank of Cyprus (‘the CBC’, to be distinguished from the Bank of Cyprus) with an executive ‘Resolution Committee’ as its decision-making body: their primary responsibility was ‘the implementation of the provisions of this Law, the taking of decisions and the...

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