Sharas Alexander Changizi v Lara Marie Changizi
| Jurisdiction | England & Wales |
| Judge | Master Francis |
| Judgment Date | 18 June 2021 |
| Neutral Citation | [2021] EWHC 1659 (Ch) |
| Date | 18 June 2021 |
| Court | Chancery Division |
| Docket Number | Case No: PT-2020-000505 |
[2021] EWHC 1659 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (Ch D)
Royal Courts of Justice
Fetter Lane, London, EC4A 1NL
DEPUTY Master Francis
Case No: PT-2020-000505
The Claimant, Sharas Alexander Changizi, in person
The First Defendant, Lara Marie Changizi, in person
Lina Mattson (instructed by Berry & Lamberts LLP) for the Second and Third Defendants
Hearing date: 2 June 2021
Approved Judgment
I direct that this approved judgment, sent to the parties by email on 18 June 2021, shall deemed to be handed down on that date, and copies of this version as handed down may be treated as authentic.
Introduction
This is my judgment on the application of the Second and Third Defendants dated 23 October 2020 for the summary dismissal under CPR Part 24 of the claim as it has been brought by the Claimant on the grounds that it has no real prospects of succeeding. The application is framed in the alternative as one to strike out the claim under CPR r. 3.4 (2) (a) as disclosing no reasonable grounds for bringing the claim.
There is also before the Court an application by the Claimant dated 4 January 2021 to dismiss or strike out the defence of the First Defendant. By his order dated 6 January 2021 Deputy Master Moraes directed that both applications should be heard at the same time, but with the Second and Third Defendants' application standing as the lead application. For reasons which will become apparent, I have found it unnecessary to determine the Claimant's application.
Background
This is the latest of a series of unhappy disputes between members of the Changizi family relating to the estate of Parviz Changizi, the father of the Claimant, Sharas, the First Defendant, Lara, and their two siblings, Gheeve and Sarah, and husband of the Third Defendant, Pamela. I will refer to the protagonists by their given names for convenience without intending any disrespect thereby.
Parviz died on 18 September 2010, by then living in Spain as his habitual residence and having taken Spanish nationality. He had formerly lived in England with his family, after coming to this country from Iran at the time of the Islamic Revolution as a refugee. He had made an English will on 1 March 1985 under which he appointed Robin Mayes, the Second Defendant, and Pamela as his executors and trustees (referred to collectively below as “the Executors”), and left his residuary estate on trust, as to one-third share for Pamela, and as to the remaining two-thirds share in equal shares for his four children. Probate of that will, as it related to Parviz's property in England (which I refer to as “the Estate”), was granted to the Executors in solemn form by order of Mann J dated 30 July 2014 at the conclusion of contentious probate proceedings in which Sharas had sought to challenge the will on various grounds. In the meantime, Lara, Gheeve and Sarah, but not Sharas, had entered into a deed of variation on 17 July 2012 passing their shares in the Estate to their mother. So, as matters now stand, Pamela is a beneficiary of 5/6 th share of the Estate with Sharas the beneficiary of the remaining 1/6 th share.
The principal asset in the Estate was a flat at 19 Wetherby Mansions in Earls Court Square, SW5 9BH (“the Property”). This had been purchased on 25 September 2009 by Parviz for a price of £695,000 in the joint names of himself and his daughter Lara on the terms of an express trust of land under which Parviz had an 80% beneficial interest and Lara a 20% beneficial interest. Lara lived in the Property as her principal residence following its purchase.
Previously Parviz had made substantial lifetime gifts to each of his four children in or after 2007, apparently utilizing monies realised on his sale of the family property, Fairhill in Hildenborough, Kent. These gifts had taken the form either of cash sums or property transfers or contributions to the costs of purchasing property, to a value of £300,000. In Lara's case, Parviz had paid for the purchase of a one bedroom flat known as Flat 11, 3 – 5 Collingham Place in March 2007 at a price of £428,000 of which £300,000 was intended as a gift. The treatment of the balance of the purchase monies of £128,000 is one of the issues which falls for consideration on this application.
Each of these lifetime gifts were potentially exempt transfers on which inheritance tax became payable in the event as Parviz did not survive for 7 years after they were made. The manner in which the inheritance tax due in relation to the lifetime gift to Lara was discharged is another of the issues which falls for consideration on this application.
In July 2016 the Executors brought a claim in the County Court at Central London on behalf of the Estate seeking an order against Lara under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 for the sale of the Property, which they said was necessary to enable the outstanding inheritance tax for which the Estate had become liable (including that due in respect of the lifetime gift to Lara) to be discharged and to enable the remaining funds in the Estate to be distributed (“the 2016 proceedings”).
Lara resisted that claim, and contended that she was entitled to buy out her late father's share in the Property for a sum equal to 80% of the purchase price which had been paid in 2009, a sum of £556,000, under the terms of an oral agreement which she had made at the time of purchase with her father, to which the court should give effect under principles of promissory or proprietary estoppel. Lara's case was that it had been intended that she should sell her flat at 3–5 Collingham Place to raise the funds to buy out her father during his lifetime, but his death had intervened, and it was only in 2011 that she finally sold the flat. Since that time she had retained the proceeds, some £461,000, in order that the buy out agreement could be concluded with the Estate.
After taking advice from Ms Lina Mattson of counsel, the Executors chose not to contest Lara's contention in those proceedings that she was entitled in principle to buy out Parviz's share under estoppel principles, but instead limited their challenge to the issues (i) whether the purchase price payable by Lara was the full amount of £695,000 which Parviz had paid on its acquisition in 2009 or only 80% of that sum, the sum of £556,000 asserted by Lara, and (ii) whether Lara was liable to pay interest on the purchase price. The issues between the parties as they had been narrowed in this way were recorded by DJ Lightman in an order dated 22 April 2017.
That dispute came on for trial before DJ Langley in the County Court at Central London on 6 and 7 November 2017. On 23 November 2017 the judge delivered an oral judgment setting out her decision on the two surviving issues together with a further issue which had been identified at the outset of the trial (iii) whether Lara should be denied relief on grounds of delay. The judge determined all of the issues in Lara's favour. I shall return to certain passages of her judgment in due course. For present purposes, it is sufficient to note that she found Lara to be a truthful witness after her evidence had been challenged at some length in cross-examination by Ms Mattson, who appeared for the executors then as she does today in these proceedings.
As a result of her determination, DJ Langley made an order on 23 November 2017 in the following terms
“IT IS DECLARED THAT
1. The Property known as and situate at 19 Wetherby Mansions, Earl's Court Sqyare, London SW5 9BH is held by the Claimants and the Defendant as tenants in common with the Claimants having an 80 per cent share and the Defendant a 20 per cent share of the beneficial interest in the Property.
2. The agreement between the Defendant and the late Parviz Changizi was that she be able to purchase the deceased's 80% interest for £556,000.
3. No interest or compensation is payable by the Defendant to the Claimants on account of any delay or at all.
4. There is no bar on the Defendant's equitable right to enforce the Agreement as a result of any delay or otherwise.
IT IS ORDERED THAT:-
3. The Defendant shall pay the Claimants £556,000 for their 80% equitable interest by 4pm on 12 th January 2018.
4. If the Defendant makes such payment, the Claimants shall have no further interest in the property. The restriction registered on the title of the property on 13 th October 2009 shall be removed.
The judge then went on to make a further order in default of Lara exercising her purchase entitlement for the Property to be sold.
On 20 December 2017 Lara paid the purchase price of £556,000 as ordered by DJ Langley, less a deduction of £25,000 in respect of costs which had been ordered to be paid to her by the executors, and in return the Property was transferred into her sole name.
Sharas was not a party to the 2016 proceedings. He had no right or reason to be a party because the proceedings were not concerned with internal matters of the administration of the Estate but rather with the recovery or realisation of property belonging to the Estate which it was properly for the Executors to pursue on behalf of the Estate. However, by an application notice dated 7 September 2017 he did apply to be joined to the proceedings, he explains, having become concerned that the Executors were not making a robust enough challenge to Lara's claim, and in particular were not challenging the principle whether any estoppel arose in her favour at all. That application was heard by DJ Langley a week before the...
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