Mr Samsul Haque v Ms Mukhlisha Raja and Another

JurisdictionEngland & Wales
JudgeMr Justice Henderson
Judgment Date28 July 2016
Neutral Citation[2016] EWHC 1950 (Ch)
Docket NumberCase No: HC-2016-000716
CourtChancery Division
Date28 July 2016

[2016] EWHC 1950 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building

Royal Courts of Justice

Fetter Lane, London, EC4A 1NL

Before:

Mr Justice Henderson

Case No: HC-2016-000716

Between:
Mr Samsul Haque
Claimant
and
(1) Ms Mukhlisha Raja
(2) Mr Sheraz Ali Khan
Defendants

Ms Louisa Nye (instructed by Arona St James Solicitors) for the Claimant

Ms Bridget Williamson (instructed by Farooq Bajwa & Co) for the Second Defendant

Hearing date: 17 June 2016

Mr Justice Henderson

Introduction

1

The issue on this application, which I heard on 17 June 2016, is whether an interim proprietary freezing order ("the Injunction") which was first granted without notice by Arnold J on 12 April 2016 should be continued until trial of the action, or discharged. The hearing before me was the effective return date of the application, following a further hearing before Arnold J on 19 April when he gave directions for the filing of evidence and ordered an expedited hearing of the application on a date to be fixed.

Background

2

The property to which the Injunction relates ("the Property") is at 96 Bramley Close, London, E17. Originally built as commercial premises, although in a mainly residential district, it is a detached rectangular building of two storeys with a flat roof and floor space of approximately 1,500 square feet. The Property is registered at HM Land Registry under title number NGL 112946.

3

The present registered proprietor of the Property is the second defendant, Mr Sheraz Ali Khan ("Mr Khan"). Mr Khan was registered with title absolute on 4 April 2013, having purchased the Property for £135,000 from the previous registered proprietor, Ms Mukhlisha Raja ("Ms Raja"), who is the first defendant. After purchasing the Property, Mr Khan obtained permission from the local authority (the London Borough of Waltham Forest) to change its use from commercial to residential, and he is now in the process of converting it into two flats. According to his evidence, Mr Khan has not yet decided what to do with the Property when the work is complete. He may sell it, but has no immediate plans to do so.

4

Ms Raja had herself been the registered owner of the Property since 6 May 2010, following its purchase at auction in November 2009 for £160,000. Ms Raja was at the time married under Sharia law to the claimant, Mr Samsul Haque. They were married in August 2008, but the marriage was never registered under the civil law of England and Wales. According to the claimant, it was he who purchased the Property at auction in November 2009 as an investment, and the whole of the purchase price was provided by him. They nevertheless arranged for the Property to be registered in the sole name of Ms Raja, although he says it was always understood between them that he was, and would remain, the sole beneficial owner of the Property.

5

In or around 2011, a number of significant events took place. First, the relationship between the claimant and Ms Raja deteriorated, and they divorced under Sharia law. According to the claimant's pleaded case, Ms Raja's father sought to mediate when their marital difficulties arose, and during their discussions he acknowledged that the claimant would get the Property back if he and Ms Raja separated. The claimant further alleges that, at the time of the divorce, he and Ms Raja orally agreed and confirmed that the Property belonged to him.

6

Secondly, between about March and October 2011 the claimant arranged for various works to be carried out at the Property, with a view to converting it from commercial premises into three residential flats. No planning consent had been obtained for this, however, and there are issues about the extent, nature and quality of the works that were carried out. According to the claimant, he spent approximately £90,000 on the works, and they added about £200,000 to the value of the Property.

7

Thirdly, on 19 October 2011 the claimant was convicted of conspiracy to defraud certain insurance companies, and was given a custodial sentence of five years' imprisonment. He was detained in prison from October 2011 until September 2013, when he was moved to an open prison. He was finally released from custody on 17 April 2014.

8

While he was in prison, the claimant says he gave the keys of the Property to a friend, Mr Fizul Abdurrahman Khan, whom he knew as Ray Khan, so that he could manage the Property and obtain an income from short term lettings. According to the claimant, he asked Ray Khan to finish the necessary works and then rent out the top floor. They agreed it would be necessary to find a residential tenant, albeit in breach of planning control, because this would be the only way to secure some income as child support for the claimant's daughter with Ms Raja while he was in prison. Ray Khan then completed the conversion of the top floor into a residential flat, and in about August 2012 he found some residential tenants for it.

9

This evidence is corroborated, at least in broad terms, by Ray Khan in his witness statement dated 3 May 2016. There is also an issue whether the Property was used as a brothel during this period. This is alleged by Mr Khan, but denied by the claimant and Ray Khan.

10

Ms Raja was by now living with her daughter in Newcastle, the city where she (Ms Raja) had been born and grown up. One of her closest childhood friends was a Ms Husnara Ali, who was married to Mr Khan's brother, Shahzad Khan. There is no evidence before the court from either Ms Raja or Ms Ali, but Shahzad Khan has filed evidence in support of his brother.

11

According to Shahzad Khan, his wife and Ms Raja had a series of telephone discussions in 2012 during which Ms Raja complained about the stress and financial hardship caused by her ownership of the Property. The problems included outstanding demands for business rates, illegal occupancy of the Property, the issue of an enforcement notice by the London Borough of Waltham Forest, and her inability to claim benefits due to her ownership of the Property. Shahzad Khan says that initially he paid little attention to these matters, when his wife mentioned them to him, but eventually, knowing that Ms Raja was a childhood friend of his wife, and at his wife's request, he felt obliged to help Ms Raja. He visited the Property in the late Summer or early Autumn of 2012, and was able to confirm that it was being occupied. He then decided to contact the police, and they assisted in the eviction of the occupants. Upon entry, it was clear to him that the Property was being used as a brothel. He then arranged for the locks to be changed. Ms Raja was very pleased when told that the Property had been vacated, and she then indicated to him "that she simply wanted to dispose of the Property as it had caused her nothing but hassle, and it was too difficult for her to manage it from Newcastle". He agreed to help her sell the Property, and she offered to pay him some sort of remuneration for his services, but this in fact never occurred because the eventual purchaser was his brother.

12

The steps which Shahzad Khan took to sell the Property on Ms Raja's behalf are described in his statement. He says he lacks any experience in marketing or selling properties. He first placed an advertisement on the online website Gumtree, at an asking price of around £180,000, but this elicited no offers. He then decided that the Property should be sold by auction, and made enquiries of an estate agent who advised by email on 21 November 2012 that the next possible auction in which to enter the Property would be held on 18 December 2012 at the Connaught Rooms in Covent Garden. The agent recommended a reserve price of £150,000 to £160,000. The entry fee would be £395, and commission would be payable at the rate of 2.5%, in each case plus VAT. Meanwhile, says Shahzad Khan, he mentioned the Property to his brother, in the hope that one of his friends or colleagues might wish to purchase it. His brother then expressed some interest in the Property himself, and eventually agreed a price of £135,000 for it. The sale was then handled by the respective solicitors of Ms Raja and Mr Khan, and Shahzad Khan had no further involvement in it.

13

Mr Khan confirms in his evidence that the purchase was carried out through solicitors on both sides. He paid for the Property in two tranches, making a first payment of £90,000 on 11 March 2013, and paying the remaining £45,200 on 8 October 2013. Ms Raja registered a restriction against the Property in the interval between the two payments, in order to protect her interest. According to Mr Khan:

"I was buying the Property from someone I did not know in an arm's length transaction. I am not a professional property dealer and this is my first and only property development, for which it took me some time to raise the funds, which had to be paid in two tranches."

The claimant's case

14

Against this background, the claimant's case, as pleaded in his particulars of claim settled by Ms Louisa Nye of counsel, is as follows. He claims that, when the Property was put into Ms Raja's sole name in May 2010, she held it on a resulting trust for him absolutely. He says that his subsequent expenditure in 2011 on improvements to the Property evidences a common intention on the part of himself and Ms Raja that she should continue to hold the Property on trust for him absolutely, upon which he relied to his detriment by trusting her and taking no steps to place a restriction on the registered title to reflect his interest. In relation to the subsequent sale of the Property by Ms Raja to Mr Khan, the claimant alleges that the sale took place without his knowledge or consent, and was intended by Ms Raja to defeat his interest in the Property while he was in prison.

15

No interim relief is sought against Ms Raja, so I can summarise the claim...

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2 cases
  • Mark Byers v Samba Financial Group
    • United Kingdom
    • Chancery Division
    • 15 Enero 2021
    ...of the Law Commission's commentary, cited in [96] above. 100 The claimants also rely on an observation of Henderson J in Haque v Raja [2016] EWHC 1950 (Ch). That decision was made on an application by a respondent to discharge a proprietary freezing order on the ground that the applicant h......
  • Mark Byers v The Saudi National Bank
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 27 Enero 2022
    ...in our view, the Privy Council did not in fact do so. However, the Commission also relied in support of its view on Haque v Raja [2016] EWHC 1950 (Ch), where, in the course of a judgment in which he concluded that an interim proprietary freezing order should not be continued, Henderson J s......
2 books & journal articles
  • Mistakes, mispleading and overreaching: understanding title registration and correcting the register
    • United Kingdom
    • Journal of Property, Planning and Environmental Law No. 14-1, May 2022
    • 18 Marzo 2022
    ...are seen as in competition, it is but asmall step to argue that overreaching should not always prevail (see the attempt in Haque vRaja[2016] EWHC 1950 (Ch)); and sometimes it is easy to ignore overreaching in favour of a potentialoverriding interest (AIB Group vTurner [2015] EWHC 2994 (Ch))......
  • Mistakes, mispleading and overreaching: understanding title registration and correcting the register
    • United Kingdom
    • Journal of Property, Planning and Environmental Law No. 14-1, May 2022
    • 18 Marzo 2022
    ...are seen as in competition, it is but asmall step to argue that overreaching should not always prevail (see the attempt in Haque vRaja[2016] EWHC 1950 (Ch)); and sometimes it is easy to ignore overreaching in favour of a potentialoverriding interest (AIB Group vTurner [2015] EWHC 2994 (Ch))......

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