Safina Bi Azam v Mohammed Molazam
| Jurisdiction | England & Wales |
| Judge | Sir Paul Morgan |
| Judgment Date | 04 September 2023 |
| Neutral Citation | [2023] EWHC 2202 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: CH-2023-000027 |
[2023] EWHC 2202 (Ch)
Sir Paul Morgan
Case No: CH-2023-000027
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS
Royal Courts Of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Charles Sinclair (instructed by Arcadian Law) for the Appellant
J G Mendus Edwards (instructed by Link Solicitors) for the Respondent
Hearing date: 5 July 2023
Approved Judgment
This judgment was handed down remotely at 10am on 4 September 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives (see eg https://www.bailii.org/ew/cases/EWCA/Civ/2022/1169.html).
Introduction
Prior to 7 October 2019, the Respondent, Mr Molazam, was the owner of a house at 236 Odessa Road, London E7 9DY which was subject to a charge in favour of the local housing authority. On 7 October 2019, Mr Molazam transferred the property to the Appellant, Mrs Azam, for an inadequate consideration. On 9 April 2020, Mrs Azam transferred the property to one of her sons, by way of a gift.
Mr Molazam brought the present proceedings on 3 August 2020 seeking an order that the transfers of 7 October 2019 and 9 April 2020 be set aside on the ground that the transfer of 7 October 2019 was the result of fraud and undue influence practised on him by Mrs Azam. Both Mrs Azam and her son were named as Defendants in those proceedings. Following a trial in the Central London County Court on 3 to 5 January 2023, HHJ Gerald gave judgment on 10 January 2023 in which he held that Mr Molazam was entitled to have the transfer of 7 December 2019 set aside by reason of undue influence and that if that transfer were set aside, the later transfer by way of gift should also be set aside. On 10 January 2023, the judge made an order to that effect.
Mrs Azam now seeks permission to appeal against the order of 10 January 2023. There is no appeal by Mrs Azam's son. It is accepted that there is no need for the son to be a party to this appeal.
On 7 February 2023, Miles J ordered a rolled-up hearing of the application for permission to appeal and any permitted appeal.
The application for permission to appeal and any permitted appeal came before me on 5 July 2023. Mr Sinclair appeared on behalf of Mrs Azam and Mr Edwards appeared on behalf of Mr Molazam. Both counsel had also appeared in the court below.
The judge began his judgment with the comment: “[t]his is a troubling case”. I entirely agree. My reasons for agreeing are these: (1) the transaction between Mr Molazam and Mrs Azam was very one-sided and disadvantageous to him; (2) Mr Molazam's evidence as to the transaction was largely unreliable and most of it was rejected by the judge so that he rejected Mr Molazam's case as to fraud or as to pressure by Mrs Azam; (3) the cross-examination of Mrs Azam and her husband (who gave evidence) was very limited and it was not put to Mrs Azam that she had influenced Mr Molazam in relation to the transaction; (4) Mrs Azam's grounds of appeal include a large number of challenges to the judge's findings of fact either on the ground that they were unsupported by the evidence or were procedurally unfair; and (5) in a case where both sides to the transaction gave evidence, the judge appears to have held that there was no actual undue influence but that there was presumed undue influence.
The basic transaction
The transaction in question involved the transfer by Mr Molazam to Mrs Azam of his house at 236 Odessa Road (“the property”). Mr Molazam was the sole owner of the property. It was the subject of a charge in favour of the local housing authority, the London Borough of Haringey, where the sum secured by the charge was of the order of £41,000. The property had suffered some damage in a fire but the judgment under appeal did not contain detailed findings as to the extent of the damage. It was a condition of the transaction between Mr Molazam and Mrs Azam that Mrs Azam would pay off the sum due under the charge in favour of the council and she did so. Thereafter, Mr Molazam transferred the property to Mrs Azam. After the transaction, Mrs Azam or her husband carried out some repairs in relation to the fire damage and they had foreseen the need to do so at the time of the transaction. Mrs Azam did not make any payment direct to Mr Molazam (as distinct from the payment to the council) as consideration for the transfer. There appears to have been an agreement between them that after the transfer, Mr Molazam would be able to use a part of the property for his own use for at least some further time. He was in fact allowed to do so until a difficulty arose in March 2020 and he was then prevented from using a part of that property from that time. At the trial, the parties proceeded on the basis that the value of the property (with vacant possession) at the time of transaction, free of the charge in favour of the local authority, was some £300,000 and it may have been even more than that.
Mr Molazam's pleaded case
In his judgment, the judge summarised the claim as pleaded by Mr Molazam. He had pleaded that the transaction involved a loan of £41,000 from Mrs Azam to Mr Molazam to be used to repay the council. Mrs Azam was to be able to rent out the upper floor of the property and to receive the rents from such letting until the loan was repaid; Mr Molazam was to remain entitled to occupy the ground floor of the property. When the loan was repaid, the arrangements would come to an end. It seems to have been implicit in this way of putting the case that Mr Molazam would remain the owner of the property at all times. He then pleaded that Mrs Azam had fraudulently misrepresented to him that the document he signed to give effect to the transaction was a loan agreement. It was also pleaded that Mrs Azam had “overtly” pressured him into signing that document.
Mr Molazam's pleaded case differed from what he had told his former solicitors when he first took steps to have the transaction set aside. The judge recorded in his judgment that, on 2 July 2020, Mr Molazam went back to the solicitors who had acted for him in relation to the earlier transaction. He then told them that the arrangement with Mrs Azam was that she would pay off the sum due to the council, he would transfer the property to her and when he was able to pay her back the sum she had paid to the council, she would then transfer the property back to him. The judge noted that this account showed that Mr Molazam had indeed understood that he had transferred the property to Mrs Azam but the judge also observed that this account was not being relied upon by Mr Molazam in these proceedings.
The evidence
Mr Molazam gave evidence at the trial and was cross-examined. Mrs Azam and her husband also gave evidence and were cross-examined. I have been provided with a transcript of the evidence. I will not attempt my own summary of that evidence but I will refer to the judge's comments on the evidence and his specific findings of fact. However, since some of those findings of fact are now challenged on this appeal, I will to the extent necessary consider the transcript in order to deal with those challenges.
The judgment
The judgment is lengthy and dealt with the evidence and submissions in considerable detail. I have paid close attention to all of the comments and findings of the judge but I will seek to summarise the relevant parts of the judgment to bring out the findings which are of direct relevance to the present appeal.
The judge referred to the claim as pleaded by Mr Molazam. He then explained that in closing submissions, counsel for Mr Molazam did not pursue the allegation of fraudulent misrepresentation as to the nature of the transaction. This was said to be because there had been no evidence that Mrs Azam had said anything to Mr Molazam at the time of the execution of the transfer. The judge also commented that it was plain that the solicitors who were involved were the solicitors acting for Molazam and not for Mrs Azam (contrary to an earlier suggestion by Mr Molazam in these proceedings). The judge also noted that counsel for Mr Molazam did not pursue the allegation that Mr Molazam had been “overtly” pressured into executing the transfer because there was no direct evidence of such pressure. The judge commented that it followed that any pleaded claim of actual undue influence was not pursued.
The judge then explained that, in closing submissions, the case for Mr Molazam had become a case of presumed undue influence in that Mrs Azam had taken advantage of or exploited the known vulnerability of Mr Molazam by reason of his financial and other vulnerability owing to his liability to the council, coupled with his health difficulties. This was said to be in the context of the “relationship” between the parties and in relation to a transaction which called for an explanation. The result was that the evidential burden shifted to Mrs Azam to establish that Mr Molazam had entered into the transaction of his own free will.
The judge then commented on the evidence of the witnesses, Mr Molazam and Mrs Azam and her husband. He referred to the “major sea-change” in Mr Molazam's case. The judge commented that some parts of Mr Molazam's evidence were untenable. The judge also said that caution was called for in considering Mr Molazam's credibility where allegations of fraudulent misrepresentation and overt acts of persuasion were not being pursued and where key elements of his own case were retracted in cross-examination. The judge then directed himself that these comments did not mean that the entirety of Mr Molazam's case should be rejected. The judge then commented on the evidence of Mrs Azam and her husband but, at this...
To continue reading
Request your trial