Sueda Yusuf v Tanju Yusuf
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Falk |
| Judgment Date | 28 January 2019 |
| Neutral Citation | [2019] EWHC 90 (Ch) |
| Docket Number | Case No: HC-2017-001106 |
| Court | Chancery Division |
| Date | 28 January 2019 |
[2019] EWHC 90 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
Mrs Justice Falk
Case No: HC-2017-001106
Case No: CR-2018-002869
and
In the Matter of Pekalp Properties Limited and in the Matter of the Companies Act 2006
Timothy Evans (instructed by Seddons) for the Claimant and Petitioners
Hefin Rees QC and Anthony Pavlovich (instructed by Harper & Odell) for the Defendants and Respondents
Hearing dates: 5 to 17 December 2018
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This dispute relates to a family owned property company called Pekalp Properties Limited (“PPL”). Tanju Yusuf, the First Defendant, is the son of the Claimant and First Petitioner, Sueda Yusuf. The Second Petitioner, Askin Ozerin, is Sueda's daughter. The other key family members for the purposes of this dispute are Askin's husband Arif Ozerin, and Isfendiyar Yusuf, Sueda's husband and the father of Tanju and Askin. Isfendiyar died in June 2014. For convenience and as Counsel did during the trial, I will refer to each of these family members by their first names throughout.
Sueda's initial claim, under reference HC-2017-001106 (the “Chancery action”), sought an order to the effect that she was beneficially entitled to 25% of the shares in PPL and that Tanju should transfer those shares to her, or alternatively that its register of members should be rectified in her favour. Sueda also sought specific performance or damages for breach of an agreement said to have been made between her and Tanju on or around 27 February 2015, under which she alleged that Tanju had agreed to transfer an additional 25% of the shares in PPL to her and had undertaken certain additional obligations, including the transfer of other property.
Tanju and PPL defended the claim and brought a Part 20 claim under which they allege that Sueda and Askin hold funds received in connection with the sale of a Cypriot company on trust for PPL, pursuant to the terms of a declaration of trust said to have been entered into in 2003. In the case of Askin an order is also sought requiring her to account for profits made pursuant to an alleged agreement to carry out property development for the benefit of PPL.
In March 2018 Sueda and Askin filed a petition in the Companies Court (the “Petition”) alleging unfair prejudice, and seeking relief which included ensuring that PPL's share register reflected the percentage ownership claimed by each of them, and requiring Tanju either to purchase their shares in PPL at fair value, or sell his shares to them at fair value, or alternatively that PPL should be wound up. In June 2018 an order was made transferring the Petition to the Business List and requiring it to be managed and tried together with the Chancery action. Where convenient I will refer to Sueda and Askin together as the Petitioners, without drawing a distinction between the Chancery action and Petition.
In this judgment, I first summarise the factual background and the parties' assertions. I then discuss the witness evidence before addressing the parties' various claims, which are dealt with in the following order: Sueda's interest in PPL (paragraphs 87 to 97), Askin's relationship with PPL (paragraphs 98 to 102), the Cypriot company dispute (paragraphs 103 to 128), the February 2015 agreement (paragraphs 129 to 134), the Petition (paragraphs 135 to 170) and the appropriate relief (paragraphs 171 to 181). Finally, I deal with an application made on behalf of Tanju after the end of the trial to admit additional evidence (paragraphs 182 to 185). A summary of my conclusions is at paragraph 186.
Background facts and the parties' assertions
Family
Sueda was originally from Turkey. Isfendiyar's heritage is Turkish Cypriot. Sueda's marriage to Isfendiyar was arranged, and she travelled to London with him at the age of 15, marrying him in 1964 at the age of 17. Isfendiyar worked as a carpenter, making frames for furniture. Sueda worked from home as a seamstress.
Tanju was born in 1967 and Askin in 1968. The family initially lived at Isfendiyar's family's home in London, before moving into a council house a few years later. In the early 1970s Sueda took divorce proceedings under which she was awarded custody and Isfendiyar was required to leave the family home. They subsequently agreed to reconcile. In 1975 Sueda identified and purchased a family home in Essex, using the proceeds of sale of a sweet shop and tobacconist that she had previously acquired with savings from her work. Sueda still lives in this house, which I will refer to as “Falmouth Gardens”. The couple also remarried in 1975.
During the 1970s Isfendiyar started his own furniture business, having previously worked as an employee. Sueda's evidence was that she provided a significant amount of assistance, including working as a seamstress in the business. This evidence was challenged by Tanju but, to the extent relevant, I conclude that Sueda did do some work in the business in the early years. The business struggled financially for a while, and at one stage in the mid-1980s Sueda acquired and ran a café to boost the family's earnings. This was sold after two or three years, leaving Sueda with about £80,000 which she intended to split between her children. After discussions with them the money was used to acquire and renovate a residential property in London that I shall refer to as “Bromfield Street”, converting it into three flats.
After finishing university in 1989, Tanju joined his father in the furniture business. His role throughout has been office based, dealing with administration, including responsibility for bookkeeping and the accounts. Isfendiyar's written English was not good and he was poor at paperwork.
Askin trained as an architect. She left university in 1991, having married Arif in late 1990. Arif also joined the furniture business at around this time to help Isfendiyar, and worked in the business until March 2014. Arif is from Northern Cyprus and originally met Askin there, through one of Askin's cousins. His role at the business was to work on the manufacturing side with Isfendiyar, handling orders and dealing with clients. He became the assistant factory floor manager and remained in that role until he left in 2014. Arif managed the factory floor when Isfendiyar was away, as he increasingly was in the later years.
Isfendiyar and Sueda's marriage was deeply troubled for many years. Sueda was hospitalised with depression during the 1990s and again for significant periods between around 2008 and 2009. She told Isfendiyar that she wanted a divorce in 2009, eventually instructed solicitors in early 2011 and formally instigated divorce proceedings in 2012. Tanju sided with his father and stopped Sueda seeing his children.
Sueda's case is that during the divorce proceedings she found out that Falmouth Gardens had been remortgaged in March 2007, at a time when she was in Cyprus. She also says that it was during those proceedings that she found out that her 25% shareholding in PPL had been transferred to Tanju. She claims that Tanju subsequently admitted to her that he forged her signature on the mortgage documents, and promised to repay the money (he denies this though he says that his father might have used her signature). Tanju's case is that the funds were required in Cyprus to establish a hair salon business which Sueda set up and ran for a short period. Sueda accepted in cross examination that she had spent about £100,000 on the hair salon, but claimed that she used her own savings to do so.
On 28 February 2014 Isfendiyar made a will appointing Tanju as his sole executor and leaving the entire estate to him. Askin, Arif and Sueda only became aware of the existence of the will after Isfendiyar's death.
During March 2014 an incident occurred at the factory. Arif's version of events was that Tanju was walking round the factory on the phone to his sister Askin (Arif's wife), abusing her in front of Arif and other workers. He refused Arif's request to stop and told him that the business was all Tanju's (rather than Arif receiving a share in it as well, as he was expecting), and that Arif should leave. Arif was provoked into attempting to hit Tanju with a piece of wood. Other workers evidently pulled them apart and Arif immediately left the business and refused to return, despite an attempt by Isfendiyar to get him to do so and an offer from Tanju of a 25% share in the business shortly after Isfendiyar's death. As discussed below, Tanju's version of events was different and he says that there was no offer of a share in the business.
At the time of Isfendiyar's death in June 2014, the divorce proceedings had not concluded and no financial award had been made. In addition, as already mentioned, Sueda did not benefit from the will. Once she understood this she took advice from a solicitors' firm called Blavo & Co about whether the will could be challenged.
The Pekalp companies
The furniture business was incorporated as Pekalp of London Limited (“Pekalp London”) in 1993, on the advice of Mr Zeren Safa, an accountant. Mr Safa's services were originally used by Sueda in connection with her shop in the early 1970s, and he subsequently became the long-standing accountant for the family's businesses as well...
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