Vaqar Malik v Iftikhar Ahmad Malik
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Bacon |
| Judgment Date | 20 January 2023 |
| Neutral Citation | [2023] EWHC 59 (Ch) |
| Court | Chancery Division |
| Docket Number | Appeal No. CH-2022-000075 and Claim No. PT 2022-000752 |
[2023] EWHC 59 (Ch)
Mrs Justice Bacon
Appeal No. CH-2022-000075 and Claim No. PT 2022-000752
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD) and PROPERTY, TRUSTS AND PROBATE LIST
ON APPEAL FROM HHJ GERALD
COUNTY COURT AT CENTRAL LONDON
Rolls Building
Fetter Lane
London, EC4A 1NL
Stephen Jourdan KC (instructed by Spencer West LLP) for Vaqar, Fahim and Rahim Malik
Thomas Munby KC and James Kinman (instructed by Stephenson Harwood LLP) for Iftikhar Ahmad Malik
Hearing dates: 7–8 December 2022
Approved Judgment
This judgment was handed down remotely at 2pm on 8 November 2022 by circulation to the parties or their representatives by email and by release to the National Archives.
Introduction
This is an appeal from the order of HHJ Gerald in the Central London County Court, dated 14 March 2022, following a trial in a very long-running family dispute concerning the ownership of a leasehold flat in Knightsbridge. The trial was of a Part 20 claim, the Part 20 claimant being the present respondent Iftikhar Malik. The Part 20 defendants, and the present appellants, are Iftikhar's younger brother Vaqar Malik and two of Vaqar's sons, Fahim and Rahim.
Fahim and Rahim were made bankrupt on 14 November 2022, and the Official Receiver (who acts as trustee in each bankruptcy) has confirmed that it does not wish to be represented at or take any active part in the hearing of the appeal. It is common ground, however, that Fahim and Rahim do not have any interest separate from that of their father. It was therefore agreed that the bankruptcy of the two sons would not affect the hearing of the appeal. Given the commonality of interest between Vaqar and his sons, during the hearing counsel generally referred to the parties simply as Iftikhar and Vaqar, and I will generally do the same in this judgment, save where the context requires specific reference to Vaqar's sons.
In short summary, in his Part 20 claim Iftikhar sought possession of the flat from Vaqar (and Fahim and Rahim), together with mesne profits. Vaqar counterclaimed that Iftikhar held the flat on trust for him absolutely, alternatively that he had acquired title by adverse possession. The outcome of the dispute was and remains one of considerable financial significance. The flat was bought in 1978 for £70,250. By 2019 it was thought to be worth £2.5m.
The trial before HHJ Gerald took place in January 2020 and March 2022, in circumstances which I will describe in more detail further on. Judgment was handed down on 14 March 2022 in favour of Iftikhar. The adverse possession counterclaim was dismissed on the grounds of abuse of process, and also that it failed in any event for lack of necessary intent.
Vaqar says that both of the judge's findings on the adverse possession issue were wrong. Iftikhar contends that the judge's findings were correct. In addition, he relies on further grounds set out in a respondent's notice. He also, as a belt and braces approach, applies to lift the stay of earlier proceedings between the parties regarding the entitlement to the flat, those proceedings having been commenced in 1987, but stayed for various reasons thereafter.
Vaqar and his sons are represented in this appeal by Mr Jourdan KC, and Iftikhar is represented by Mr Munby KC and Mr Kinman.
Factual background
The background to these proceedings is set out in the judgment of HHJ Gerald. In short summary, the dispute concerns the ownership of a two-bedroom flat at 7 South Lodge, 245 Knightsbridge. The flat was purchased by Iftikhar in 1978 on a 150-year lease, having been chosen by Iftikhar in 1977 on a trip to London. In 1984 the lease was extended to 999 years.
By the time of completion of the purchase, Iftikhar was living in Pakistan and Vaqar was living in London. Vaqar assisted with completion of the purchase, and he went on to live at the flat from 1979–1981, and again for some months in 1982 before returning to Pakistan. For the next five years the brothers and other family members used the flat when visiting London.
In 1987, following a major breakdown in family relations, Vaqar moved from Pakistan to London and took up residence in the flat, together with his then-wife Saira and their two older sons; and he refused to allow Iftikhar and other family members into the flat. Since then, it is common ground that Vaqar and his family have been in sole occupation. Vaqar says he remains there now with his two youngest sons Fahim and Rahim, who were born in 1995.
The 1987 proceedings
In 1987, following Vaqar's occupation of the flat, Iftikhar issued High Court proceedings against Vaqar and Saira seeking possession. Vaqar in turn issued High Court proceedings against his father, mother and three brothers claiming that there was a family partnership which owned the flat, and that he was entitled to occupy it on that basis.
The complex history of the proceedings which ensued, and the parallel proceedings issued between the parties in Pakistan, is described by Mr John Jarvis QC (sitting as a deputy High Court judge) in his judgment of 21 February 2012, Malik v Malik [2012] EWHC 711 (Ch), at the conclusion of a hearing which I will describe below. I will not repeat that history here, as most of it is not relevant to this appeal. What follows is a short summary of the relevant events and procedural steps in the English proceedings.
Iftikhar's High Court action commenced on 3 July 1987. Vaqar's action commenced less than a month later, on 28 July 1987. At that stage, the central dispute between the parties was whether the flat was beneficially owned by Iftikhar (Iftikhar's case) or whether it was a family partnership asset, which had been or should be appropriated to Vaqar (Vaqar's case).
Iftikhar's action was stayed in December 1987 by an order of Master Munrow, requiring Iftikhar to pay £25,000 into court as security for costs, failing which he was not to take any further steps in the proceedings. Iftikhar did not at that time pay that sum into court. Both actions were then stayed automatically as of 25 April 2000, pursuant to §19 of PD 51A of what was then the new CPR. In the meantime, there were attempts within the family to resolve the dispute.
As part of those family discussions, there was an agreement between the brothers and their father, Bilal, that the father would attempt to resolve the dispute between the brothers regarding the flat. There is some debate, not definitively resolved in the judgment of HHJ Gerald, as to whether this formed part of (or was related to) a written agreement in 1992 between all of the siblings and their mother regarding the distribution by Bilal of various unidentified family assets, or whether there was an entirely separate agreement that was reached later in 1992 or 1993 between Iftikhar, Vaqar and Bilal alone. HHJ Gerald refers to the agreement regarding the resolution of the flat dispute as the “1992 Agreement”, irrespective of when precisely it was reached, and for consistency with his judgment I will do the same.
Unfortunately the family attempts to mediate a resolution were unsuccessful. The terms of the 1992 Agreement are, however, of some importance to this appeal and I will return to this later.
In April 2010 Vaqar was made bankrupt on his own petition, and in December 2010 Mr Papanicola was appointed as Vaqar's trustee in bankruptcy. Any interest that Vaqar held in the flat then vested in the trustee.
In 2011 Iftikhar paid into court (out of time) £25,000 pursuant to the order of Master Munrow, and applied to lift the stays of the English proceedings, seeking judgment in his favour that he was the legal and beneficial owner of the flat. That application was opposed by the trustee on the grounds that Bilal had in fact resolved the dispute and had done so in favour of Vaqar, and that it was agreed between the parties that the English proceedings would be withdrawn or discontinued. The trustee also said that the case turned on very old facts in relation to which there was a risk that a fair trial would not be possible. In addition, the trustee said that if fresh proceedings were commenced he would be pleading a defence of adverse possession.
That led to the hearing in February 2012 before Mr Jarvis to which I have referred above. During that hearing there were several exchanges between the judge and Vaqar (referring to both his position and that of his then-wife Saira) as to the extent to which the adverse possession argument was pursued.
At the conclusion of the hearing, on 21 February 2012, the judge delivered a long and detailed ex tempore judgment refusing Iftikhar's application. As an initial matter, the judge took the view that he could not reject Vaqar's evidence as to the existence of an agreement to withdraw or discontinue the proceedings, and that was a matter to be taken into account when considering whether to lift the stay (§95). He went on to consider various factors relevant to his decision. In particular, in relation to the consequences of refusing to lift the stay, he commented that:
“119. … In considering those consequences, I ask myself the question identified earlier, if I refuse to lift this stay what will happen to the claimant's claim? The claimant, if it wishes to seek possession, will be able to issue fresh proceedings and there is no doubt that the primary issue that concerns the claimant is to get possession of the flat. …
120. … [Iftikhar's] sole interest is possession of the flat, mesne profits for the last six years and interest. There is no reason why...
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