Lenkor Energy Trading DMCC v Irfan Iqbal Puri

This matter concerns the beneficial interests in two houses (“the Properties”), being 8 Brendon Street, London W1H 5HE (registered at HM Land Registry under Title No. LN72533) and 28 Brendon Street, London W1H 5HE (registered at HM Land Registry under Title No. LN80874). The Claimant, Lenkor Energy Trading DMCC (which I will call “Lenkor”) and which appears before me by James Collins KC leading Philip Jones of counsel, asserts that, while each of the Properties is registered with absolute freehold title with the registered proprietor being shown as the Respondent, Energy Plus Limited (which I will call “Energy”) and which appears before me by Elizabeth Fitzgerald of counsel, each are beneficially owned, in whole, but if not in whole then in part, by the Defendant judgment debtor, Irfan Iqbal Puri (whom I will call “Irfan”) and who does not appear, and whose asserted beneficial interests Lenkor seeks to make the subject of final charging order (“the FCOs”).

Energy contends that it is the beneficial owner; and, if that is wrong, that Irfan only owns a limited partial beneficial interest with the majority being owned by others and in particular Mohammad Puri (“Mohammad”) one of Irfan’s children. Energy accordingly seeks for me both to determine and declare the true position (as also does Lenkor) and to set aside the existing interim charging orders (“the ICOs”) which Master Davison granted on 23 August 2022 and to dismiss the application, originally made by Notice of Application dated 23 August 2022, for the FCOs.

On 6 December 2022 Master Davison directed that the Court should resolve the issue “whether or not the Defendant has an interest in the properties in respect of which the ICOs might be granted.” And on 14 March 2023 Master Davison directed that the issue and whether the ICOs should be continued should be listed before me.

Elements of the history are common-ground and in any event I am satisfied on the basis of the evidence before me, on the balance of probabilities, that such have been proved. However, there are various disputes regarding what happened at various times during the history, and I either resolve them or record them when setting out the following.

Mazhar Iqbal Puri (“Mazhar”) was the patriarch of the Puri family which family was historically located in Pakistan. Mazhar was the father of Irfan and other children (“the Siblings”) one of whom was Shahina Puri, and the husband of Zarina Puri; and Irfan is married to Naveen Puri (“Naveen”) and is the father of Mohammad and also three other children (“the Other Children”) being Abdullah Puri, Natasha Puri and Ibrahim Puri. Mazhar died in 2003. This is all common-ground and I find it to be the case. However, there is a dispute as to what was the extent of Mazhar’s assets although Energy says that they were substantial and spread across various jurisdictions including Pakistan.

On 1 August 1994 Energy was incorporated under the laws of the Cayman Islands with 100 issued shares, shown on its register of members as having been originally issued to Fairfield Nominees Limited but on 8 August 1996 as having been vested in Caversham Nominees Limited and Caversham Holdings Limited (which, together with Caversham Secretaries Limited, I will call “Caversham” and all of which were of “Malzard House”, Jersey).

Very few of the corporate records of Energy have been produced by Energy, or anyone else. Some have appeared from the documents which were disclosed into the public domain as part of what have been called “the Panama Papers”). There are no documents available for the early years. It is in dispute as to who set up and who beneficially owned Energy, or assets held in its name, and when.

There exists, signed by Mazhar, a document (“the 1996 Document”, which bears a one hundred Rupee duty stamp, and an Advocate’s signature and stamp with a date of “08 Jul 1996”, and a notary’s signature and stamps dated “17.7.96”, and which appears to be intended to be formal in nature) which reads:

The 1996 Document is only before me in copy form. In a witness statement of 28 June 2023, Thomas Dobson, a solicitor at Farrer & Co. LLP (“Farrers”), solicitors for Energy, stated that following, Mr Dobson had been told, discussions between Irfan and Mohammad, both an Omair Nisar (“Nisar”), a lawyer in Pakistan (who acts for one of Mohammad’s companies), and Mohammad, told Mr Dobson that: the 1996 Document existed; and had been held by another Puri family member (Akbar Puri); but had been physically delivered to Nisar by hand by an unknown person. Nisar then electronically sent to Mr Dobson the 1996 Document as it is before me. Mr Dobson stated that Nisar had opined that under Pakistan law and practice, the original of the 1996 Document might have been thought not to require preservation. I asked Mr Collins KC whether he accepted that the 1996 Document was authentic and he said that the Claimant was not asserting that it was a forgery. In view of that concession, and as was supported by Mr Dobson’s evidence and where the 1996 Document appears to me to be credible both as a document and in context, I regard the authenticity as having been proved on the balance of probabilities and that I should proceed on the basis that it is authentic.

8 Brendon Street was transferred by a Land Registry Transfer dated 20 September 1996 (“the 1996 Transfer”) for £360,000. The Transfer was written to be to Energy, but with the name IRFAN IQBAL PURI crossed out in favour of a handwritten insertion of Energy’s name, of “Haring Ross Gagrat and Gardi, 5 Richbell Place, London WC1N 8BZ”.

28 Brendon Street was transferred by a Land Registry Transfer dated 30 September 1997 (“the 1997 Transfer”) for £362,500. The Transfer was written to be to Energy, of “Haring Ross Gagrat and Gardi, 5 Richbell Place, London WC1N 8BZ”. I refer to the firm of Haring Ross Gagrat and Gardi as “HRGG”.

On 6/7 October 1997 HRGG submitted an application to the Land Registry to register the 1996 Transfer although with a DX address in Wembley and which resulted in Energy being registered with the title to 8 Brendon Street. On 25 November 1997 HRGG made a similar application with regard to 28 Brendon Street and which resulted in Energy also being registered with that title. I note that HRGG’s covering letter gave the 5 Richbell Place address and the Wembley DX number and also a “Property & Private Client Dept.” address at 273 Preston Road, Harrow (“the Harrow Address”), and also listed as a consultant “H.D. Gardi” and as Associated Offices “Gagrat and Gardi, Legal Consultants” at an address in Dubai (“the Dubai Address”).

There is no dispute as to the authenticity of the above documents. I have no other documents regarding the acquisition or funding of the purchases of the Properties and none have been disclosed by Energy, notwithstanding an order for standard disclosure made by Master Davison on 15 March 2023. Mohammad asserts that he has carried out a search and made enquiries of the directors and others referred to in the corporate records (being those mentioned below) but other documents relating to the purchase or being corporate records have not been located.

The next corporate document which I have for Energy is part of a Cayman Islands Annual Return referring to an Annual General Meeting held on 2 November 1998 and which states that the shareholders in Energy were Caversham Nominees Limited and Caversham Holdings Limited (i.e. “Caversham”), who owned 50 shares each, both with Jersey addresses being “Malzard House”. I have a similar part of a Cayman Islands Annual Return referring to an Annual General Meeting held on 4 November 1999.

I then have a Cayman Islands Annual Return referring to an Annual General Meeting held on 28 December 2000. This states that the shareholders in Energy were Caversham, who owned 50 shares each, both with Jersey addresses being “Malzard House”; the company secretary was Caversham Secretaries Limited (also of “Malzard House”, Jersey); and the directors were Raymond Terrence Gibson (“Gibson” described as “businessman” of Sark), Walter George Petre (“Petre” described as “businessman” of Sark) Simon Boyd de Carteret (“Carteret” described as “engineer” of Sark) and Nicholas John MacDonald Bell (“Bell” described as “accountant” and also of the Malzard address in Jersey, and who signed the document).

I then have a Cayman Islands Annual Return dated 31 December 2001: the shareholders and secretary being shown as Caversham; and the directors were Gibson described as “businessman” of Sark, Petre and Carteret each described as “businessman” and of “Harris Crichton Bell” of Malzard House in Jersey, and Bell described as “businessman” and of the Harris Crichton Bell address of Malzard House in Jersey.

The 31 December 2002 Cayman Islands Annual Return of Energy showed: Caversham as shareholders and secretary; Gibson, Carteret now said to be “Electronics Engineer” of Sark, and Bell as directors. Walter George Petre was shown as having resigned as a director in 1997.

The Register of Members shows that Caversham transferred all 100 shares to Irfan on 26 June 2003.

The 31 December 2004 Cayman Islands Annual Return of Energy showed, although only as a partial document: the sole shareholder as being Irfan of address unknown; and the director as being Hasmukh D Gardi (“Hasmukh” of the Dubai address).

The 31 December 2005 Cayman Islands Annual Return of Energy showed: the sole shareholder as being Irfan of address unknown; the secretary as being a Cayman Islands Company, Trulaw of the company’s Cayman Islands registered office address; and the directors as being Hasmukh and Surekha H Gardi (“Surekha” also of the Dubai Address). The 31 December 2006 Annual Return shows the same but with Hasmukh (said to be a solicitor) now also the secretary. The 31 December 2007, 2010, 2011, 2012, 2013 and 2014 returns show the same (with the Trulaw registered office name mutating to become “H&J Corporate Services (Cayman) Ltd but which may well just have been a renaming of that company).

The Register of Members shows Irfan’s 100 shares as being cancelled, and 100 new shares being issued to Mohammad on 24 February 2015.

The 31 December 2015 Cayman Islands Annual Return of Energy shows the same as before but with: the shareholder now being Mohammad; and an additional director being Sanjiv Kumar Patel (“Patel”) of Dubai. The 31 December 2016 Cayman Islands Annual Return of Energy shows the same except that Surekha is no longer a director.

On 30 December 2022 Energy applied to be registered as an overseas company in this jurisdiction stating that Mohammad was a beneficial owner to the extent of more than 25% of its shares and being a person of significant influence or control over it.

There is no dispute as to the authenticity of the above documents, although they are said to be (and to an extent clearly are) incomplete.

There is before me a set of documents, which I conclude are authentic (and which did not appear to me to be disputed), dated 19 March 2001 (“the 2001 Documents”) as follows:

There is before me a copy document dated 3 July 2001 (“the 2001 Charge”), which I regard as being authentic, being a copy of an All Monies charge granted by Energy (whose address is said to be “c/o [the Harrow Address]” securing all liabilities of “the Chargor” and “the Borrower” (and who are both Energy itself) over 8 Brendon Street. The copy document has a stamp on it of “Alan Ross & Partners” (“ARP”) dated 30/7/01 and certifying it as a true copy. I also have a copy application to the Land Registry made by ARP who are said to be of the Harrow Address to register the 2001 Charge; and I find that the registration occurred.

Arnfield (“Arnfield”) is a British Virgin Islands company; and certain of the Panama Papers seem to indicate that its shareholders are Irfan and Caversham.

I have before me annual returns from 2008 and 2009 of a company HD1 Developments Limited (“HD1DL”) which show Irfan (with a Dubai address) and Mohammad (with 8 Brendon Street as his address) as its directors. In 2014 that companies’ address becomes an address in Huddersfield with the company secretary becoming one Mohammad Tayssir Ismail (“Ismail” whose address is stated to be in Stanmore, Middlesex). I find these documents to be authentic (and which is not disputed).

I have before me Barclays bank account ledgers showing Irfan as the holder of an account with 8 Brendon Street as his address “since 26 May 04”; and more recent (2022) statements of a Barclays account of Mohammad’s showing 8 Brendon Street as his address. I have Council tax demands and services bills addressed to Irfan and Naveen at 8 Brendon Street for 2022. I find these documents to be authentic (which is not disputed).

I have before me a series of assured shorthold tenancy agreements for rooms within 28 Brendon Street from 2019 to 2022 and where the landlord is shown to be “ T I Management” and which are signed on its behalf by “M T Ismail” or “T Ismail” (and who I infer to be Ismail). I have correspondence before me from the City of Westminster with T I Management and Ismail regarding 28 Brendon Street being a House in Multiple Occupation (“HMO”). I find these documents to be authentic (and which is not disputed).

There is, however, one assured shorthold tenancy agreement for a room in 28 Brendon Street dated 01/01/20 where the landlord is shown at “HD Developments c/o T I Management”. Mohammad says that this is an error, and it does not seem to me that I need to decide whether or not it was, although I have noted that, even if it was by error, HD1DL has, at least, appeared on relevant paperwork at one point.

I have been taken to tax material regarding the Properties. I have before me a witness statement from Aman Hayer of 25 May 2023 who is a chartered tax adviser and a director of Wheawill & Sudworth Limited (“W&S”), accountants, of the Huddersfield address. She was not sought to be cross-examined and I accept her evidence and I find the following facts.

W&S had been instructed by HD1DL, by its then directors Irfan and a Glen Bayat, from 2001, where HD1DL owned a large property in Huddersfield. At some point soon after 2001, they were asked by Irfan to file overdue tax returns for Energy in relation to the Properties. They filed ordinary tax returns for 28 Brendon Street and its rental income for the years 1998-2022 albeit that those for the earliest years were (obviously) late and out of time.

However, under modern tax legislation, there is an “Annual Tax on Enveloped Dwellings” (“ATED”) where, as here, a foreign company, Energy, owns UK residential property worth more than £500,000, and which provisions had been ignored by Energy until about 2022. I have been provided with extracts from HMRC’s relevant technical guidance which provides that:

In these proceedings on 23 January 2020 (“the 2020 Judgment”) Master Davison granted summary judgment in favour of Lenkor against Irfan for (Dubai currency) AED 123,272,048 together with accrued interest and costs (the then value in GBP being about £38.4 million), and Irfan’s various appeals against that judgment have failed. It is that judgment which is the subject matter of these charging order applications and of the ICOs.

The summary judgment was itself an enforcement of a civil liability held to exist by the Dubai courts arising from Irfan’s having signed cheques drawn on the account of IPC Commodities DMCC (“IPC Dubai”, a company owned and controlled by Irfan) which cheques had not been honoured by the drawer, IPC Dubai, and where, in Dubai law, Irfan incurred personal liability.

The cheques arose from a 2014 transaction (“the Sale Transaction”) between Lenkor, IPC Dubai and a buyer of petroleum products (“the Products”) located in Pakistan (“the Buyer”) under which the Buyer purchased the Products from Lenkor at a price of about $55 million (eventually altered to a recalculated figure of Pakistan rupees “PKR” after $4 million had been paid to IPC Dubai), and which payment IPC Dubai guaranteed. The intention was that the Buyer would pay IPC Dubai, and IPC Dubai would pay Lenkor.

Unknown to Lenkor (or at least its main or current management), a situation (“the Diversion”) was then created by Irfan and Mohammad whereby a “contract of sale” was entered into between IPC Dubai, IP Commodities Limited (“IPC Pakistan” being a company previously owned by Irfan but of which Mohammad was a director and substantial shareholder, other directors and shareholders being various of the Other Children) and the Buyer, whereby the Buyer actually paid IPC Pakistan at IPC Dubai’s nomination. The equivalent of $31 million was so paid to IPC Pakistan but none of those monies (or the previously paid $4 million) was paid over to Lenkor.

Lenkor say, and have said, that this was effectively a fraud upon them; and Lenkor commenced an Arbitration under the Sale Transaction contract (which resulted in an Award requiring IPC Dubai to pay over the $4 million and the equivalent to $31 million; and none of which has been paid) and various other proceedings to seek to obtain the monies in Pakistan, Dubai and here.

The failure by IPC Dubai to honour the cheques resulted in Irfan, as signatory and under the law of Dubai, both incurring a direct civil liability to Lenkor and also committing criminal offences, and for which he was arrested on 8 March 2015, and imprisoned between 9 June 2015 and 29 May 2017. Lenkor, when obtaining the 2020 Judgment, chose not to seek the full face value of the cheques but rather to limit the amounts to what they said had been dishonestly taken from them by way of the Diversion.

Lenkor’s above version of these matters is set out in witness statements from Thomas Spencer of 26 July 2019 and James Atton of 20 January 2023 neither of whom has Energy sought to have cross-examined. In his evidence, to which I will come in due course, Mohammad appeared to accept the generality of the above course of events, and said that: (1) he had been asked by persons (then) involved in the Buyer to engage in the Diversion, including for the equivalent of $31 million to be subsequently paid out from IPC Dubai; however, (2) he did not know and had not been able to ascertain to whom (or how, or to where) those monies had been paid.

Technically, Energy is not bound by the earlier judgments in these proceedings, or those of the Dubai and other courts, except that it has to accept that Irfan is a judgment debtor under the 2020 Judgment and that the other judicial decisions actually exist. However, Energy has not sought to contest Lenkor’s above history, and which is supported by documents attached or referred to in the witness statements (as well as elements of Mohammad’s evidence), and I find it to be proved on the balance of probabilities.

In support of the Arbitration, Lenkor applied for and obtained worldwide freezing orders against IPC Dubai on 9 January 2015 from Males J and against Irfan on 11 July 2017 (“the 2017 WFO”) from His Honour Judge Waksman QC (as he then was). The 2017 WFO required Irfan to provide information as to his assets and bank accounts.

In consequence, Irfan made an affidavit of 24 July 2017 (“the 2017 Affidavit”). He gave a list of assets which he said he owned and which included the following statements:

“5.3

No. 8 and No. 28, Brendon Street, London, United Kingdom. Estimated value of my interest: PKR62,997,445/£461,993.

5.3.1

the registered proprietor of these two separate properties is Energy Plus Limited (see paragraph 8.6 below) a company registered in Cayman Islands. I believe that Energy Plus Limited would acknowledge that I have an interest arising from an informal settlement in these properties to the value of PKR62,997,445/£461,993 but my interest is not registered as a charge on the property. The title registers for the properties confirmed that they each have a mortgage with Habibsons Bank….

8.6

Energy Plus Limited I do not have any direct or indirect legal or beneficial interest in the above company. I do not have any power and/or control over any share in this company nor is there any third party who holds or controls this asset in accordance with my direct or indirect instructions as defined in paragraph 6 of the Order. However, as mentioned above, I have an interest in two properties (House No. 8 & 28, Brendon Street, London, UK) owned by this company to the extent of PKR62,997,445/£461,993 only.”

No other evidence has been adduced from Irfan and he has not been called as a witness in relation to the charging order applications.

Energy has adduced a witness statement from Aman Hayer to which I have referred above. Aman Hayer was not sought to be cross-examined and I accept her evidence as I refer to above.

Energy also adduced two witness statements from Mohammad dated 2 December 2022 and 25 May 2023; and he gave evidence on affirmation verifying them and was cross-examined, re-examined and asked questions by me.

I have reminded myself when considering Mohammad’s evidence that with regard to witnesses:

In his first witness statement, Mohammad:

In his second witness statement, Mohammad expanded on those matters, in particular as follows:

Mohammad was cross-examined extensively. Much of this related to what had happened to the monies paid by the Buyer for Lenkor’s petroleum products. Mohammad said that he had acted on the instructions of a Mr Salim Butt, said to be connected to the Buyer, and of Irfan, and had been content to permit IPC Pakistan to be used as a conduit for the monies, without seeing any documentation to justify the transactions, as that had happened before and his own finance team had dealt with the payments of relevant tax and appeared to regard all this as proper. He said that some of the monies had been used to purchase shares in the Buyer, and that he had been told that they “could not be repatriated due to sanctions”. He said that he trusted the various qualified finance professionals and was not concerned with the source of the funds or where they had gone and could not recall what had happened. It was Mr Butt who had dealt with to what accounts the Lenkor monies were paid out by IPC Pakistan and Mohammad could only say that they were connected to various individuals related to the Buyer and that “we are still looking”. Mohammad said that he had had nothing to do with the Lenkor transaction and that various documents linking him with inspections and testing of the Products only related to some bio-diesel samples that he was marketing and had shared with a person involved for unrelated reasons.

Mohammad said that the litigation with Lenkor had caused a break-down in the relationship between himself and Irfan. He had therefore taken all the remaining profits (the Lenkor monies already having been paid out) out of IPC Pakistan, believing this could be done by a controlling owner without need for documentation or board/shareholder resolutions etc., and sold it and moved to Dubai. The result was that a Mr Khan, and associate of Irfan and who had worked for the Buyer, had taken over what was essentially an empty shell.

Mohammad said that Energy owned the Properties and that he, Mohammad, had wished to buy them and therefore told his own chief financial officer to do what was required for Mohammad to take it over. Mohammad said he did not require any documents himself; and that only later had he sought to obtain Energy’s historical documents, and had spoken to those of the past directors who were still alive, the contact point being Gardi (i.e. Hamukh), but without obtaining any more than has been disclosed in this litigation.

Mohammad said that when he took over Energy in 2014, he learnt that Habibsons Bank had a mortgage but that the only relevant bank account which it secured had been closed in 2014. He said that it had been used to borrow monies to fund Mazhar’s being treated for cancer from 2001.

Mohammad said that he believed that Mazhar had provided £1.2 million but could not say what might have happened to the £400,000+ which would have remained after purchase of the Properties.

Mohammad said that he believed that the Siblings had no interest in the Properties notwithstanding the terms of the 1996 Document. He said that he was told that the Siblings had received properties from Mazhar in Pakistan, Malaysia and London which had equalised their ceasing to have any interests in Energy (or the Properties). He referred to a recollection of a conversation which he overheard when aged about 12 where Mazhar had said to Irfan and the Siblings that there needed to be a discussion regarding inheritance due to Mazhar’s having cancer. He recalled that all of them then locked themselves in a room and that he had then assumed that that discussion took place. Mohammad said that he understood that Irfan was given 25% of Energy for himself with the rest to be held by Irfan for Mohammad and the Other Children, with the Siblings receiving other properties elsewhere, and that was why Irfan had managed the Properties until 2015.

Mohammad said that in 2014, when he had decided to buy-out Irfan and the Other Children, he had not seen it as necessary to make any written agreements with them or the Siblings. In 2015 he had paid Irfan’s Pakistan lawyers in cash, without any documentation. This was done in order to conceal the transactions from the Pakistan tax authorities. He denied that this was an invention. He said that he had been paying the Other Children for their interests by way of regular payments and funding education costs etc.

Mohammad said that the utility bills were addressed to Irfan and Naveen because they had a joint bank account and it was convenient for Naveen to be registered for and to pay them, and not because Irfan owned the Properties. He said that £15,000 per month to Naveen came from his own business and not from the Lenkor monies. He repeated that Irfan had not lived at the Properties.

Mohammad said that so much was dealt with in cash and undocumented in relation to the running of the Properties and the rentals from 28 Brendon Street because he was simply the owner and in effect “Energy” and felt he could deal with his own property (even if owned through a company) without need for documentation. He denied that the ATED documentation had been created to bolster his case in this litigation.

When giving his evidence, Mohammad was clear and he did seek to engage with and respond to the questions. However, when he was questioned as to what had happened with regard to the Lenkor transactions and the Lenkor monies, I found him to be evasive and I did not regard his answers as being at all full.

Although Mohammad was firm as to his role being limited to some marketing of bio-diesel and simply putting other matters to his “finance team” and obeying the instructions of others, the documents and emails appear to show him as having had more of a role in progressing the testing of the petroleum products and the advancing of their acceptance for the purposes of the Lenkor transactions. While I am conscious that I am in no position to, and I am in no way seeking to, determine disputes regarding the Lenkor transactions, at best, on the evidence before me, Mohammad is someone who simply allowed his own company and its bank accounts to be used as a conduit for the equivalent currency of tens of millions of pounds without any apparent commercial justification and in circumstances which would raise “red flags” as to potential fraud and also potential breaches of tax law (and quite possibly international sanctions). Such raises clear questions as to whether he is or is not a person of commercial probity whose evidence can be trusted.

At first sight I cannot see how Mohammad cannot know to which accounts the monies received from the Buyer were paid, and he seemed very evasive when he said, in effect, that that was still being investigated without any outcome as yet. Although this is not directly related to what I have to decide, my instant impression is that he was not being open with the court (I strongly suspect that the true answer is that Mohammad has no intention of revealing precisely what happened with details of relevant accounts and individuals, but, whatever his reasons for that intention, I regard him as not being open with the court in any full sense as to what he does or does not know and why).

I also note that on his own evidence as to the dealings with the Pakistan lawyers (and whether his evidence is correct or not), Mohammad is someone who is prepared to engage in large-scale undocumented dealings in cash designed to enable high-value tax evasion. Whether or not that is usual practice amongst some lawyers in Pakistan, as Mohammad says, it still involves him saying that he is prepared to be a party to dishonesty, and accepting an absence of basic documentation, in the form of receipts, which would be expected to be a basic commercial necessity.

On the other hand, certain of Mohammad’s evidence had some “ring of truth” especially: (i) in relation to his description of the conversations regarding Mazhar’s desire to divide his family patrimony amongst Irfan and the Siblings, and (ii) Mohammad’s treating various company’s assets as simply his own to dispose of without requiring corporate documentation in the form of director or shareholder resolutions etc. The first seemed to me to be genuine and to reflect a standard patriarchal model, and the second was both consistent with the level of documentation in this case (where so much is missing that one would expect that at least some might assist Energy’s and Mohammad’s case) and the way that various lay people treat such formalities of company law as being something of an unreal nuisance.

I have therefore treated much of Mohammad’s evidence with caution and have had to ask myself carefully as to how much weight I can give it when dealing with disputed matters of fact.

Lenkor contends that Irfan has a beneficial interest in each of the Properties over which charging orders can and should subsist, arising from:

Energy contends that:

These submissions give rise to key factual questions of:

I note that Mohammad is not a party to these proceedings, although he has full knowledge of them, is the sole shareholder of Energy and has given evidence. Mohammad has not sought to be joined. While I have had concerns as to whether I should be determining the beneficial interest position with regards to Irfan and the Properties in ways which will affect Irfan, no-one suggested that I should not do so, and I will consider whether some specific direction should be made as to his status in relation to the Charging Order applications (including so as to ensure that he would have rights to appeal) when dealing with the orders to be made consequential upon this Judgment.

Both sides have drawn my attention to case-law with regard to the question as to when, as here, a property(ies) is acquired by a private company owned (directly or through nominees) by its funder, that property(ies) is owned beneficially by the funder or is owned beneficially by the company whose shares are owned beneficially by the funder. Although there may be tax differences and other legal consequences arising from those two different legal structures, there is no general economic difference as far as the funder is concerned, since they own either the Properties directly (that is to say in equity they are the beneficial owner) or indirectly by way of their ownership of the entire shareholding of the entity (i.e. the company) which owns the beneficial interest in the Properties.

Ms Fitzgerald drew my attention to the general principles that, in the absence of sufficient other reason, beneficial ownership follows legal title i.e. that Energy being the registered proprietor of the Properties would own them beneficially as well as in law.

Ms Fitzgerald and Mr Collins both directed me to section 53 of the Law of Property Act 1925 (“Section 53”, but accepted that the provisions of sub-section (2) could potentially apply in this case) which reads:

“53 Instruments required to be in writing.

(1)

Subject to the provision hereinafter contained with respect to the creation of interests in land by parol—

(a)

no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;

(b)

a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;

(c)

a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.

(2)

This section does not affect the creation or operation of resulting, implied or constructive trusts.”

I note, that, subject as is dealt with in the cases and textbooks, there is an ancient principle of equity that, where one person purchases property using the funds of another, there is a presumption that they hold it on trust (i.e. a resulting trust) so that the beneficial interest is in that other, but that that presumption is subject to any relevant common intention or agreement.

Ms Fitzergald then took me, in terms of general approach, to Gany v Khan [2018] UKPC 21 where in paragraph 17 it was stated:

“17.

It is convenient to begin with a re-statement of the basic principles by which equity (which in this respect is shared by England and Wales and the British Virgin Islands) provides for identification of beneficial interests arising from a gratuitous transfer of property. First, if either the transferor or the transferee makes a written (or oral) declaration as to those beneficial interests, or they do so together in an agreed form, that will generally be decisive, regardless of the subjective intentions of either of them: see for example Whitlock v Moree [2017] UKPC 44. Secondly, and in default of any such declaration, the court looks for evidence from which a common intention as to beneficial ownership may be inferred. This may include evidence of statements made by either party before, at the time of or even after the relevant transfer, the parties’ conduct, and the factual context in which the transfer takes place. Sometimes, a choice between possible conclusions as to beneficial interest may properly be arrived at by a process of elimination, whereby the most unlikely conclusions are first removed, leaving the least unlikely as the correct one. Finally, recourse may be had to time-honoured presumptions, such as the presumption of advancement or the presumed resulting trust, where there really is no evidence from which an inference as to common intention may properly be drawn. But these are, in modern times, a last resort, now that historic restrictions on the admissibility of evidence have been removed, and the forensic tools for the ascertainment and weighing of evidence are more readily available to the court.”

Mr Collins took me to the textbook of Lewin : Trusts : 20th Edn at sections 10-019—023 and 10-049 as follows:

“10-019 When property is purchased and transferred into the name of a person other than the purchaser, a resulting trust arises in favour of the purchaser if there is a presumption of a resulting trust which is not rebutted by evidence that he intended a gift, or if the purchaser establishes that it was his actual intention that the property purchased was not to be owned beneficially by the person in whose name the purchase was made. A presumption of resulting trust arises only when the purchase is made in the name of a person who is in equity a stranger to the real purchaser. Hitherto, where a purchase has been made in the name of a person who is not in equity a stranger to the real purchaser, such as his spouse or child, then a presumption of gift, called the presumption of advancement, has arisen in favour of the nominal purchaser. Where this presumption has applied, the real purchaser has been able to establish a resulting trust in his favour only by evidence of his actual intention rebutting the presumption of advancement. When, if ever, section 199 of the Equality Act 2010 comes into force, the presumption of advancement will be abolished, except in relation to anything done before, or in relation to any obligation incurred before, that date. The presumption of advancement has generally been considered to apply only to purchases by a father or husband, and not to those by a wife or mother, the House of Lords having recognised as long ago as 1969 that the presumption arose in circumstances when women’s role in society was very different to now. It is now tolerably clear that the presumption of advancement applies without gender discrimination, so in principle will apply to purchases by a mother in the name of her child and of a wife in the name of her husband. The remainder of this section should be read subject to these points. It would appear that it does not apply as between unmarried couples, but it would almost certainly be held to apply as between civil partners in the same way as spouses.

10-020 It has been seen above that the presumptions of resulting trust and of advancement are, compared with evidence of actual intention, of only limited significance in relation to the establishment of resulting trusts that arise on gratuitous lifetime transfers in the circumstances there considered. The Court of Appeal (in the context of a purchase by a father in the name of his child) has more recently indicated that the law applies presumptions only where there is no evidence of the intention with which a transfer is made, and the court did not draw any distinction in this regard between voluntary transfers and purchases, nor between the different kinds of relationship to which the presumption of advancement applies. We will, nonetheless, approach this topic in the traditional manner, by considering first the presumptions that arise, and secondly the manner in which they may be rebutted.

Presumption of resulting trust

10-0

21 The general rule is that when real or personal property is purchased in the name of a stranger, a resulting trust is presumed in favour of the person who paid the purchase money, if he did so in the character of purchaser.

Land

10-022 The rule was long ago established in relation to land:

“The clear result of all the cases, without a single exception, is that the trust of a legal estate, whether freehold, copyhold, or leasehold; whether taken in the names of the purchasers and others jointly, or in the name of others without that of the purchaser; whether in one name or several, whether jointl^y or successivè; results to the man who advances the purchase money⁹² … and it goes on a strict analogy to the rule of the common law, that where a feoffment is made without consideration, the use results to the feoffor.”

Personalty

10-023 The rule also applies to personalty. Thus if a bond is taken or an annuity, stock, shares, chattel interests, or a lottery ticket are purchased, in the name of a stranger, there is a presumption of a resulting trust in favour of the person who paid the purchase money in the character of purchaser.”

“10-049 The person who claims to be the real purchaser must show that he provided the purchase money as purchaser. If he was a mere lender then his claim to be the real purchaser will fail. In most cases the person who claims to be the real purchaser pays the purchase money direct to the vendor, and, so long as it is clear that he was not a lender, there should be no difficulty in showing that it was he who was the provider of the purchase money in the character of purchaser. Cases where a property is acquired on mortgage are considered in § 10-087.”

Ms Fitzgerald and Mr Collins then took me on historical survey of the modern leading cases in this area.

The first was Arab Investment Syndicate Limited v Hiseman (CA unreported 15 February 1994) where a husband had purchased a property in the name of a Cayman Island company whose shares were held on a discretionary trust in order to ensure that the asset was beyond the reach of his creditors but he could exercise a form of indirect control by giving directions to the trustees. It was held that “It is clearly of the essence of such an arrangement that the company should own its assets beneficially.” This was notwithstanding that the husband had told his wife that this was being done for her benefit, as it was held that the husband had not wanted to give her any actual beneficial interest because he wanted to set up a situation where creditors could not attack the transaction as being some sort of fraudulent disposition by him to her. The result was that the court held that the beneficial interest was in the company. This seems to me to be a case where the court held that this was the funder’s (and by extension also the company’s) actual intention and agreement between them, although it was also held that “The burden is, of course, upon [the wife] to demonstrate the circumstances in which the trust in her favour can be inferred. Prima facie the company, as legal owner, is also beneficial owner.”

Ms Fitzgerald next took me to Stockholm v Garden (unreported 26 October 1995) where a Princess had agreed to purchase a property and then procured for it to be bought in the name of a company with the Princess funding the purchase using funds borrowed from her mother, and being the beneficial owner of the shares of the company. As here, there were no financial documents dealing with the basis of the purchase. It was held that there was no resulting trust in favour of the Princess or her mother but that the beneficial interest was in the company, in particular as follows:

“These findings are not, it seems to me, inconsistent with the ladies' undoubted intention that the property should be available as a London home for both of them. Had Mr Lowe taken the trouble to obtain further instructions from Princes Madawi, he might have suggested that some part of Garden's share capital should be owned by Princess Hend, and I have little doubt that a suggestion would have been welcomed by Princess Madawi. But there was nothing particularly surprising about Princess Madawi owning all the shares; in a way it mirrored the situation in Riyadh, where Princess Hend was sole owner of the house where she and Princess Madawi lived when they were both in Saudi Arabia. As Lord Bridge said in Lloyds Bank v Rosset [1991] 1 AC 107, [1990] 1 All ER 1111, at page 130 of the former report, neither a common intention to renovate a house as a joint venture, nor a common intention that a house is to be shared, throws any light on the parties' intentions as regards beneficial ownership. For these reason I think that it is Princess Madawi's intentions, and hers alone, that I am concerned with.

The other point that I have to come back to is the significance of the transfer being made to a company whose whole share capital belonged to Princess Madawi. If (as in McGrath v Wallis [1995] 2 FLR 114, [1995] 3 FCR 661,) a father and son both contribute to the purchase of a house which is transferred to the son alone, the question whether beneficial ownership corresponds to, or differs from, legal ownership - however it is resolved - has serious financial consequences for the parties. If they fall out and the house has to be sold during the father's lifetime, it affects the destination of the proceeds of sale; if they retain the house until the father dies, it affects how much he has to leave by his will.

The position is quite different if the house belongs to a private company. If a private company is sole legal owner of the house, and the occupier of the house is sole legal and beneficial owner of all the company's shares, then (so long as both parties remain solvent) there is no basic economic difference between the company being sole beneficial owner of the house, and being a nominee for the occupying shareholder. There will be incidental differences - for instance, the tax implications - and these may be of some practical importance, as has been seen. But at a basic level a wholly-owned company cannot be seen by its shareholder either as a potential rival to him in claims to ownership of property, or as a potential recipient of bounty from him (see, in a different context, IRC v Levy [1982] STC 442 56 Tax Cas 68). What goes out of one economic pocket comes straight into the other.

In these circumstances I can see very little room for the application of the traditional presumptions as between Princess Madawi and Garden. I do not discount them completely but I must look first for evidence of actual intention before having recourse to the judicial last resort. From the evidence of Princess Madawi herself (who gave evidence clearly and candidly, though with understandable gaps in her recollection) I find that she did decide that Garden was to be the owner of the property, even if she reached that decision with some reluctance because of Miss Hassan's advice against it. That decision (reached on the understanding that she would be shareholder, but without any advice or thought as to the possibility of nominee ownership and a resulting trust) seems to me to be conclusive evidence of her intention that Garden should indeed be the owner - in technical terms which were not explained to her, that Garden should be beneficial as well as legal owner. The position cannot in my judgment be affected by both ladies having subsequently contributed to the cost of repairing, improving and equipping the property. I can see no evidence that their sharing of these expenses, which was natural in the circumstances, marked any change of common intention or was capable of creating any trust which did not exist beforehand.

I reach this conclusion on my findings as to Princess Madawi's own intentions, without adopting a submission (made to me by Mr Briggs in opening, and repeated more tentatively in reply) as to a client being bound by his solicitor's intentions, if the client has decided to leave a matter to the solicitor. There may be some such principle, especially in the field of artificial tax avoidance (see IRC v Fitzwilliam [1993] 3 All ER 184, [1993] 1 WLR 1189) but its scope is not clear and it cannot, on any view, be of completely general application. If I had to inquire into Mr Lowe's intentions I should have great difficulty in deciding what they were, not only because of his very imperfect recollection of his advice but also because of his rather imperfect understanding of what he was advising on. Instead I base my conclusion, as I have indicated, on what Princess Madawi said about her own decision to accept her solicitor's advice, and her own likely understanding of his brief explanation of the reasons for it.”

Ms Fitzgerald then took me to Nightingale v Mehta [2000] WTLR 901. The Judge here held that where there was a genuine challenge (as in that case and also here) the burden was on the judgment creditor to show that the judgment debtor had a beneficial interest in the relevant property so as to justify the making of the charging order. This was a case of a foreign company, whose shares were vested in a discretionary trust, being transferred a property but where the transfer was funded by the judgment debtor. It was held, though, that the beneficial interest was held by the company as follows:

“Over and above those matters Mr Munby submitted, and I agree, that the proper and natural inference from the decision by an individual to purchase a property in the name of a company and provide it with the funds to do so, especially where the company is controlled by the individual, is that the company should be the beneficial as well as the legal owner of the money and then the property. This is well illustrated in Stockholm Finance Limited v Garden Holdings Inc & ors (unreported) 26 October 1995  …

… Although not a director or shareholder of Omdeep and not a beneficiary of the Lotus Trust, Mr Mehta effectively controlled both Omdeep, through having undated letters of resignation of the three directors, and the Lotus Trust (and through the Lotus Trust the shares in Omdeep) through his power, while protector, to appoint new trustees of the Lotus Trust and, through the exercise of that power and the exercise of his power as protector, his further powers to procure the appointment of whatever beneficial trusts he might wish. The existence of this control renders it all the more likely that Mr Mehta's intention (as provider of the funds) was that Omdeep should become and remain the beneficial — and not just the legal — owner of the property.

I therefore conclude that, although he provided the purchase monies, Mr Mehta did not become the beneficial owner of No 8.”

Ms Fitzgerald further took me to Jones v Kernott [2011] UKSC 53 dealing with implied and resulting trusts in a married/partners relationship context and paragraphs from the judgment; first as to how the individuals may be found to have had a relevant intention as to beneficial interests under the older law, as follows:

“ Inference or imputation?

26.

In Stack v Dowden Lord Neuberger observed (paras 125-126):

“While an intention may be inferred as well as express, it may not, at least in my opinion, be imputed. That appears to me to be consistent both with normal principles and with the majority view of this House in Pettitt [1970] AC 777 , as accepted by all but Lord Reid in Gissing v Gissing [1971] AC 886 , 897H, 898B-D, 900E-G, 901B-D, 904E-F, and reiterated by the Court of Appeal in Grant v Edwards [1986] Ch 638 at 651F-653A. The distinction between inference and imputation may appear a fine one (and in Gissing v Gissing [1971] AC 886 , at 902G-H, Lord Pearson, who, on a fair reading I think rejected imputation, seems to have equated it with inference), but it is important.

An inferred intention is one which is objectively deduced to be the subjective actual intention of the parties, in the light of their actions and statements. An imputed intention is one which is attributed to the parties, even though no such actual intention can be deduced from their actions and statements, and even though they had no such intention. Imputation involves concluding what the parties would have intended, whereas inference involves concluding what they did intend.”

Rimer LJ made some similar observations in the Court of Appeal in this case [2010] EWCA Civ 578, [2010] 1 WLR 2401, paras 76-77.

27.

Both observations had been to some extent anticipated as long ago as 1970 by Lord Reid in his speech in Gissing v Gissing [1971] AC 886 , 897:

“Returning to the crucial question there is a wide gulf between inferring from the whole conduct of the parties that there probably was an agreement, and imputing to the parties an intention to agree to share even where the evidence gives no ground for such an inference. If the evidence shows that there was no agreement in fact then that excludes any inference that there was an agreement. But it does not exclude an imputation of a deemed intention if the law permits such an imputation. If the law is to be that the court has power to impute such an intention in proper cases then I am content, although I would prefer to reach the same result in a rather different way. But if it were to be held to be the law that it must at least be possible to infer a contemporary agreement in the sense of holding that it is more probable than not there was in fact some such agreement then I could not contemplate the future results of such a decision with equanimity.”

28.

The decision of the House of Lords in Gissing v Gissing has been so fully analysed and discussed that it is almost impossible to say anything new about it. However it may be worth pointing out that their Lordships' speeches were singularly unresponsive to each other. The only reference to another speech is by Viscount Dilhorne (at p 900) where he agreed with Lord Diplock on a very general proposition as to the law of trusts. The law reporter has managed to find a ratio for the headnote (at p 886) only by putting these two propositions together with some remarks by Lord Reid (at p 896) which have a quite different flavour. We can only guess at the order in which the speeches were composed, but the third and fourth sentences of the passage from Lord Reid's speech, set out in the preceding paragraph, suggest that Lord Reid had read Lord Diplock's speech in draft, and thought that it was about “an imputation of a deemed intention.”

29.

This sort of constructive intention (or any other constructive state of mind), and the difficulties that they raise, are familiar in many branches of the law. Whenever a judge concludes that an individual “intended, or must be taken to have intended,” or “knew, or must be taken to have known,” there is an elision between what the judge can find as a fact (usually by inference) on consideration of the admissible evidence, and what the law may supply (to fill the evidential gap) by way of a presumption. The presumption of a resulting trust is a clear example of a rule by which the law does impute an intention, the rule being based on a very broad generalisation about human motivation, as Lord Diplock noted in Pettitt v Pettitt [1970] AC 777 , 824:

“It would, in my view, be an abuse of the legal technique for ascertaining or imputing intention to apply to transactions between the post-war generation of married couples ‘presumptions' which are based upon inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era.”

That was 40 years ago and we are now another generation on.”

I was then taken to paragraph 36:

“36.

In the meantime there will continue to be many difficult cases in which the court has to reach a conclusion on sparse and conflicting evidence. It is the court's duty to reach a decision on even the most difficult case. As the deputy judge (Mr Nicholas Strauss QC) said in his admirable judgment [2009] EWHC 1713 (Ch), [2010] 1 WLR 2401, para 33 (in the context of a discussion of fairness) “that is what courts are for.” That was an echo (conscious or unconscious) of what Sir Thomas Bingham MR said, in a different family law context, in Re Z (A Minor) (Identification: Restrictions on Publication) [1997] Fam 1 , 33. The trial judge has the onerous task of finding the primary facts and drawing the necessary inferences and conclusions, and appellate courts will be slow to overturn the trial judge's findings.”

I was then taken to the conclusions as to the principles to be applied in alleged “common intention” “personal relationship” cases:

“51.

In summary, therefore, the following are the principles applicable in a case such as this, where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage, but without any express declaration of their beneficial interests.

(1)

The starting point is that equity follows the law and they are joint tenants both in law and in equity.

(2)

That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change.

(3)

Their common intention is to be deduced objectively from their conduct: “the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words and conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party” (Lord Diplock in Gissing v Gissing [1971] AC 886 , 906). Examples of the sort of evidence which might be relevant to drawing such inferences are given in Stack v Dowden , at para 69.

(4)

In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, “the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property”: Chadwick LJ in Oxley v Hiscock [2005] FAm 211 , para 69. In our judgment, “the whole course of dealing … in relation to the property” should be given a broad meaning, enabling a similar range of factors to be taken into account as may be relevant to ascertaining the parties' actual intentions.

(5)

Each case will turn on its own facts. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended (as in case (3)) or fair (as in case (4)).

52.

This case is not concerned with a family home which is put into the name of one party only. The starting point is different. The first issue is whether it was intended that the other party have any beneficial interest in the property at all. If he does, the second issue is what that interest is. There is no presumption of joint beneficial ownership. But their common intention has once again to be deduced objectively from their conduct. If the evidence shows a common intention to share beneficial ownership but does not show what shares were intended, the court will have to proceed as at para 51(4) and (5) above.

53.

The assumptions as to human motivation, which led the courts to impute particular intentions by way of the resulting trust, are not appropriate to the ascertainment of beneficial interests in a family home. Whether they remain appropriate in other contexts is not the issue in this case.”

Both counsel took me to Prest v Petrodel [2013] UKSC 34 where the Supreme Court analysed the correct approach where a husband had funded the purchases of properties which had been vested in companies wholly owned and controlled (directly or through intermediate entities) by him. The Supreme Court emphasised the existence of the “corporate veil” which divides the company itself from its shareholders.

In paragraph 49, the judgment dealt with the arising of a resulting trust where the husband had himself transferred a property to a company gratuitously (without more in the form, for example, of a declaration as to beneficial ownership):

“49.

Of the other five properties owned by PRL, the first category comprises the three properties (Flats 4 and 5, 27 Abbey Road, and Flat 2, 143 Ashmore Road) acquired by the company in December 1995 and March 1996, in each case for a nominal consideration of £1. Since no explanation has been forthcoming for the gratuitous transfer of these properties to PRL, there is nothing to rebut the ordinary presumption of equity that PRL was not intended to acquire a beneficial interest in them. The only question is who did hold the beneficial interest. Flat 4, 27 Abbey Road was transferred by the husband, who had originally bought it in his own name in 1991, before PRL was incorporated. There is therefore an ordinary resulting trust back to the husband, which is held by him subject to the charges in favour of Ahli United Bank and BNP Paribas. Flat 5, 27 Abbey Road was transferred to PRL by the husband's younger brother Michel. He had acquired title shortly before at a time when he could not have paid for it himself. The wife's evidence was that the husband paid for it. Again, there is no evidence to rebut the ordinary inference that the husband was the beneficial owner of the property at the time of the transfer to PRL, and that the company held it on a resulting trust for him. The leasehold interest in Flat 2, 143 Ashmore Road was transferred to PRL by the wife. The rather curious chain of title before that is summarised above. The circumstances suggest that the husband must have provided the purchase money and was the beneficial owner when the legal estate was held by Jimmy Lawrence and also at the time of its transfer from him to the wife. Either it then became the beneficial property of the wife (which is what equity would initially presume); or else it remained in the beneficial ownership of the husband, which is what I would on balance infer from the wife's evidence that the transfer was procured by the husband without her conscious involvement. In either case, the company as the legal owner can be required to transfer this property to the wife. I conclude that the husband was at all relevant times the beneficial owner of all three properties.”

In paragraph 50, the judgment dealt with the arising of a resulting trust where the company had funded a purchase but from money provided by the husband (such not having been provided by an evidenced capital subscription or loan):

“50.

The freehold interest in 143 Ashmore Road and Flat 6, 62–64 Beethoven Street come into a different category. Flat 6, 62–64 Beethoven Street is known to have been acquired by PRL from the husband in August 1998 for substantial consideration. Since PRL had not begun operations at that stage, I infer that the purchase money must have come from the husband. Virtually nothing is known about the terms of acquisition of the wife's interest in the freehold of 143 Ashmore Road, except that the husband says that the money came from PRL. I infer for the same reason that PRL was funded by the husband. In itself, that is consistent with PRL being the beneficial owner if, for example, the husband provided the money to the company by way of loan or capital subscription. But there is no evidence to that effect, and I would not be willing to presume it in the absence of any. I conclude that the husband was the beneficial owner of these two properties.”

The approach to be taken was further summed up in paragraph 52 albeit in a matrimonial context:

“52.

Whether assets legally vested in a company are beneficially owned by its controller is a highly fact-specific issue. It is not possible to give general guidance going beyond the ordinary principles and presumptions of equity, especially those relating to gifts and resulting trusts. But I venture to suggest, however tentatively, that in the case of the matrimonial home, the facts are quite likely to justify the inference that the property was held on trust for a spouse who owned and controlled the company. In many, perhaps most cases, the occupation of the company's property as the matrimonial home of its controller will not be easily justified in the company's interest, especially if it is gratuitous. The intention will normally be that the spouse in control of the company intends to retain a degree of control over the matrimonial home which is not consistent with the company's beneficial ownership. Of course, structures can be devised which give a different impression, and some of them will be entirely genuine. But where, say, the terms of acquisition and occupation of the matrimonial home are arranged between the husband in his personal capacity and the husband in his capacity as the sole effective agent of the company (or someone else acting at his direction), judges exercising family jurisdiction are entitled to be sceptical about whether the terms of occupation are really what they are said to be, or are simply a sham to conceal the reality of the husband's beneficial ownership.”

The Nightingale decision was not actually cited to the Supreme Court or considered in Prest and this was commented on in NRC v Danilitskiy [2017] EWHC 131 where a recently formed company (Opal Stem) was funded by the judgment debtor (with no evidence that it was by loan or capital subscription – see paragraph 31 of the judgment) to acquire the property. The deputy High Court Judge analysed the position on a purchase as follows:

“37.

Whether an asset legally vested in a company is beneficially owned by the company’s effective controller is a highly fact-specific issue.

38.

Absent anything to the contrary, Opal Stem’s legal title carries with it the beneficial interest in the Property. NRC submits however that, taking such evidence as is available as a whole, when Mr Danilitskiy purchased the Property in the name of Opal Stem then, given in particular that he provided the purchase price, a resulting trust was presumed in his favour with the result that he acquired the beneficial interest.

39.

There are, in my view, a number of facts which together support the presumption of a resulting trust in the present case. I emphasise, in particular, the following:

1.

Opal Stem had only recently been incorporated and was incorporated for the purposes of holding title to the Property. It appears to have had no other assets, no operations and no bank account.

2.

The acquisition of the Property was arranged by and occurred on the instructions of Mr Danilitskiy.

3.

Mr Danilitskiy paid the purchase price of the Property out of his own resources. There is no evidence that the monies were advanced by Mr Danilitskiy to Opal Stem by way of loan or capital subscription.

4.

Whilst the Property may not, it appears, ever have been the main matrimonial home, it was purchased as a home for the family for themto use whilst they were staying in London.

5.

There is no evidence that any rent was in fact paid by Mr Danilitskiy for use of the Property and no evidence that the terms on which he was permitted to use it were otherwise than, in practice, gratuitous.

40.

There is one further aspect that, in my view, needs to be addressed. If a person transfers property to trustees of a settlement previously made by him, it has been held that there is no presumption of a resulting trust for him; the presumption is that he wants to add the property to the trust fund. There is, for similar reasons, a potential issue as to the natural inference to be drawn where a property is purchased by a company which is owned and controlled by the person who provides the purchase price. In this case the evidence indicates that, at the relevant time, Mr Danilitskiy was the beneficial owner of Opal Stem’s shareholder, Clapham Investments.

41.

In Stockholm Finance Limited v Garden Holdings Inc. (unreported, 26 October 1995)… [see citations above]…

42.

In Nightingale Mayfair Limited v Prakash Mehta [2000] W.T.L.R. 901 … [see citations above]…

43.

Neither Stockholm Finance nor Nightingale appear to have been cited to the Supreme Court in Prest v Petrodel Resources Ltd.

44.

I do not find it easy to reconcile the inference which Blackburne J described as natural, with the analysis of the facts in Lord Sumption’s judgment at [43] to [51]. There is, in my view, a question as to whether and in what circumstances the inference that Blackburne J referred to is indeed the proper and natural one. In Nightingale there was, however, unchallenged evidence that the underlying intention was that the company should be the beneficial owner of the property for tax reasons. These tax objectives could only have been achieved, under the structures adopted, if the company owned the property beneficially. One can see why, in these circumstances, there was no scope for the operation of the presumption of a resulting trust. In Stockholm Finance, Robert Walker J did not go further than to say that one needs to look first for evidence of actual intention before having recourse to the judicial last resort.

45.

In the present case, there are various possible reasons why Mr Danilitskiy may have chosen to purchase the Property in the name of Opal Stem. Some of those reasons might have indicated that Opal Stem was intended to be the beneficial owner of the Property and some that it was not. However, although he plainly has relevant evidence to give on this critical question and could have been expected to provide it on behalf of Opal Stem, there is no evidence from Mr Danilitskiy, or indeed anyone else, one way or the other. Nor have I been provided with copies of any board minutes of Opal Stem which assist on this issue, even assuming that such ever existed. In the absence of such evidence, I am not prepared to assume that Mr Danilitskiy intended to transfer the purchase monies to Opal Stem for its benefit nor that he intended Opal Stem to hold the beneficial interest. To the contrary, in my view the appropriate inference which is to be drawn from the decision that he should not give evidence, is that his evidence would not support Opal Stem’s case.

46.

Each case ultimately depends on the facts. In the present case, I conclude that, taking the facts as a whole, the presumption of a resulting trust applies such that, when Mr Danilitskiy purchased the Property in the name of Opal Stem, he and not Opal Stem acquired the beneficial interest. I add that I would have reached the same conclusion on the basis of the available evidence, even if I had not also drawn an adverse inference from Mr Danilitskiy’s failure to give evidence.

47.

The parties referred me to a number of additional authorities in this context. They are, in my view, all decisions on the facts of the particular case and accordingly I do not need to say much about them.

48.

Mr Lord relied on the judgment of Hoffmann LJ in Arab Investment Syndicate v Hiseman (Unreported, 15 February 1994)… [see citations above]… In that case, therefore, there was evidence as to why the property was purchased in the name of the company and that evidence was inconsistent with any trust being inferred in favour of Mrs Hiseman. There is no similar evidence in this case. The decision does not assist Opal Stem.

49.

Mr Milner referred to JSC BTA Bank v Solodchenko [2015] EWHC 3680 (Comm) . The issue in that case was, like in this case, whether a property was beneficially owned by the shareholder of the company in whose name the property had been purchased. Phillips J held, on the facts, that it was, referring to paragraph 52 of Lord Sumption’s judgment in Prest v Petrodel Resources Ltd. It appears that the property in that case was not the matrimonial home and, although there was no evidence of exactly how the properties had been funded, he inferred that the necessary monies had been provided by the shareholder or sourced by him, such as to give rise to a presumption of a resulting trust.

50.

That the answer in any particular case depends on the facts, is also illustrated by the decision of Robert Englehart QC, sitting as a Deputy Judge of the High Court, in United Overseas Bank Ltd v Iwuanyanwu [2001] All ER (D) 40 , see in particular at [29]-[30].”

Ms Fitzgerald also took me to Princess Tessy of Luxembourg v Prince Louis of Luxembourg [2018] EWFC 77 where there was a transfer which recorded a joint tenancy between husband and wife but with the purchase monies having been funded by a third party (ADB) who claimed the entire beneficial interest in the property.

At paragraph 61 the Judge said:

“61.

Prima facie , the transfer of the legal title to a property will carry with it the absolute beneficial interest in the property conveyed. In the circumstances, a person who is not the legal owner of the property who asserts that he is the beneficial owner has to be able to establish a trust of land under which the legal owners hold their legal interest on trust for the beneficial owner. A trust of land can be created expressly, by means of fully satisfying the requirements of s 53(1) of the Law of Property Act 1925 , or by operation of law, by means of a resulting trust (in circumstances where the property is purchased in the name of the legal owner with the money of the beneficial owner) or a constructive trust (in circumstances of common intention between those concerned, a change of position on the part of the beneficiary and a finding that it would be unconscionable to deny the claim). Section 53(2) of the Law of Property Act 1925 provides that the requirement in s 53(1)(b) that the trust be evidenced in writing does not affect the creation or operation of resulting, implied or constructive trusts. The burden of proof lies on the person asserting the existence of a trust of land.”

And with regarding to resulting trusts:

“72.

With respect to resulting trusts, when real or personal property is purchased in the name of a stranger (in equity), a resulting trust is presumed in favour of the person who paid the purchase money, if he did so in the character of purchaser ( Rochefoucauld v Boustead [1897] 1 Ch. 196 ). With respect to real property, this principle has a very long pedigree. In Dyer v Dyer (1788) 2 Cox 92 at 93, Eyre LCB observed that:

"The clear result of all the cases, without a single exception, is that the trust of a legal estate, whether freehold, copyhold, or leasehold; whether taken in the names of the purchasers and others jointly, or in the name of others without that of the purchaser; whether in one name or several, whether jointly or successivè; results to the man who advances the purchase money. This is a general proposition, supported by all the cases, and there is nothing to contradict it; and it goes on a strict analog to the rule of the common law, that where a feoffment is made without consideration, the use results to the feoff or. It is the established doctrine of a Court of equity, that this resulting trust may be rebutted by circumstances in evidence."

73.

The modern approach concerning the establishment of a resulting trust is that such a trust can be established by evidence of the intention of the purchaser (see Kyriakides v Pippas [2004] 2 FCR 434 at [74] and [76]) or, absent such evidence, by way of a presumption that is not rebutted by evidence of a counter presumption of advancement or an intention to make an outright transfer (see Vandervell v I.R.C. [1967] 2 A.C. 291 at 312 and Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 at 708A).

74.

A vital ingredient in creating a resulting trust is establishing that payment of the purchase money for the property was made in the character of a purchaser. In most cases, the person who claims to be the real purchaser pays the purchase money direct to the vendor, and, so long as it is clear that he was not a lender or giving a gift, there should be no difficulty in showing that it was he who was the provider of the purchase money in the character of purchaser (see Lewin on Trusts (19th Edtn.) at [09-049]). In Hashem v Shayif & Anor [2008] EWHC 2380 (Fam); [2009] 1 FLR 115 Munby J (as he then was), made clear at [114] that:

"…whether A provided the money by way of gift, or by way of loan, or qua purchaser is, in the final analysis, a simple question of fact, to be determined in the light of all the evidence as to the relevant circumstances, including, subject to the rule in Shephard v Cartwright [1955] AC 431 (see per Viscount Simmonds at page 445), the parties' evidence as to their intentions at the time."”

And at paragraphs 110-117 it was held and concluded that:

“110.

I am, of course, acutely aware that there exists in this case a TR1 that purports to contain an express declaration of trust in favour of the husband and the Grand Duke, upon which purported express declaration the wife seeks to rely. I am likewise, of course, acutely aware of the principle in Goodman v Gallant that where a relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale, there is no room for the application of the doctrine of resulting or constructive trusts unless and until the conveyance is set aside or rectified and that, until such an event, the declaration contained in the document speaks for itself. However, on the evidence that is before the court in this particular case, I am satisfied that Mr Leech must succeed in his argument as to the ownership of the beneficial interest in the former matrimonial home, based on the express terms of s 53(1)(b) of the Law of Property Act 1925 .

111.

The declaration of an express trust purportedly evidenced by the TR1 can only be effective if, at the time they purported to declare it, the husband and the Grand Duke were "able" to declare a trust of the beneficial interest for themselves for the purposes of s 53(1)(b) of the 1925 Act. However, at the time they purported so to declare, I am satisfied that the beneficial interest in the former matrimonial home was vested in the ADB under a resulting trust for the following reasons.

112.

It is important to note that this is not a 'consumer context case' in which a couple in an intimate relationship jointly purchase a property in which they intend to reside, perhaps with the assistance of a mortgage, and in the transfer document execute an express declaration of trust over the property in favour of themselves, thereby setting out their beneficial entitlement as part of the purchase they have made. In this case, the purchase monies for the former matrimonial home were provided from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal and paid to the vendor by the ADB. The documentary evidence before the court confirms that the money in question was paid from the bank account of the ADB It is common ground between the parties that the intention was that, on any sale of the former matrimonial home, the monies provided from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal would be returned to the ADB as the proceeds of sale. I am satisfied that there is nothing in the evidence before the court to suggest that the monies originally provided from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal constituted a loan or a gift to husband and the Grand Duke.

113.

In the circumstances, satisfied as I am on the unchallenged expert evidence before the court that it is more likely than not that the GroBherzogliches Fideicommiss / fidéicommis grand-ducal and the ADB have separate legal personalities, I am satisfied that the purchase monies from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal were paid to the vendor of the former matrimonial home by the ADB in the character of a purchaser. Further, on the evidence before the court, I am satisfied that at the time the purchase monies from GroBherzogliches Fideicommiss / fidéicommis grand-ducal were paid by the ADB it was the settled intention of the ADB, the Grand Duke and the husband that the ADB would hold the beneficial interest in the property. I derive that conclusion from the following matters:

i)

As I have noted, the property was purchased by the ADB with funds from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal.

ii)

As I have also noted, the wife herself concedes that upon any sale of the former matrimonial home the proceeds of sale would return to the ADB.

iii)

Whilst the compromis de vente completed in relation to the former matrimonial home contains omissions in terms of the husband's signature and a date, its existence in my judgment evidences an intention that the ADB would hold the beneficial interest in the property purchased with funds from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal. Firstly, by reason of the distinction the existence of the compromis de vente creates between the manner in which the property in US property was purchased. When using private funds of Grand Duke to purchase the US property, no compromis de vente was drafted by the ADB. When using funds from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal to purchase the former matrimonial home a compromis de vente was completed by the ADB. Whilst Mr Ewins emphasised the similarities between these two property transactions, in my judgment it is the differences between the manner in which the respective properties were purchased that are more significant. In particular, the fact that when the funds came from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal as distinct from the private funds of the Grand Duke, a compromis de vente designed, as I am satisfied it was, to evidence the ADB's interest was employed. Secondly, by reason of the fact that, whilst incomplete, the terms of compromis de vente themselves constitute evidence of the intention of the husband, the Grand Duke and the ADB that the ADB would retain the beneficial interest in the former matrimonial home.

iv)

The statement of the husband accepts he holds no share of the beneficial interest in the property. Whilst this might be regarded as a self-serving statement in the context of these proceedings, and therefore of lesser weight, it is consistent with the other matters I have set out in this paragraph.

114.

Within the context of this evidence of intention, having regard to the modern approach to resulting trusts set out in Kyriakides v Pippas , I am satisfied that it is not necessary to go on to consider the operation of the presumption. In these circumstances and having regard to the legal principles set out above, I am satisfied that the effect of the matters set out in the foregoing paragraphs was to create, upon the payment of the purchase monies from the GroBherzogliches Fideicommiss / fidéicommis grand-ducal by the ADB, a resulting trust of the beneficial interest in the former matrimonial home in favour of the legal entity that provided the entirety of the purchase monies for that property. Whether the beneficial interest in the former matrimonial home is owned under the resulting trust by the ABD, which paid the purchase monies, or the GroBherzogliches Fideicommiss / fidéicommis grand-ducal, which provided the purchase monies, is perhaps a point of some nicety. However, it is not necessary to decide that point for the purposes of the decision this court has to make. The key point is that the purchase monies did not, I am satisfied, come from the husband or the Grand Duke and they did not intend to own the beneficial interest in the property.

115.

I remain cognisant of the principle in Goodman v Galant . However, whilst in Goodman v Galant the Court of Appeal stated that there is no room for the application of the doctrine of resulting or constructive trusts "unless and until the conveyance is set aside or rectified", in Pankhania v Chandegra I perceive the point as having been expressed in somewhat less absolute terms, with the Court of Appeal stating that there is no room for the application of the doctrine of resulting or constructive trusts unless the defendant has "established a case for setting the declaration of trust aside". Within this context, it seems to me that, given the foregoing evidence before this court, it would be artificial in this case to proceed on the basis of the TR1 when it is plain on that evidence that the husband and the Grand Duke were not "able" to declare a trust of the beneficial interest by reference to the terms of s 53(1)(b) of the Law of Property Act 1925 and, as Mr Leech submits, any application to set aside the declaration on the grounds of mistake would be bound to succeed (accepting that no such application is before the court). A trust of the beneficial interest in the former matrimonial home was not the husband's and the Grand Duke's to declare. In short, you cannot declare an express trust in a beneficial interest that is not yours (or, to indulge in the Latin, nemo dat quod non habet ).

116.

I have, of course, given careful consideration to the contrasting arguments advanced by the wife in support of her case that the husband does own a share of the beneficial interest in the former matrimonial home. I have dealt with the wife's contentions regarding the TR1 in detail above. With respect to the wife's assertion that some of the funds provided for the purchase of the US property constituted a gift to the husband from his mother, which funds were subsequently used to purchase the London property, as very properly accepted by the wife of her own volition, no corroborating evidence of the conversation said to ground that assertion is before the court or exists. The assertion was not raised by the wife prior to the hearing (she stating, perhaps understandably, that she had not appreciated the continuing legal significance of the disposal of Florida property within these proceedings). Further, the wife did not challenge Mr Wildgen's evidence that the funds to purchase the US property were provided by the ADB from the Grand Duke's 'private' funds and appeared to accept during her evidence that the proceeds of sale from the US property were returned to the ADB in their entirety. In any event, as I have noted above, the chronology makes clear that the former matrimonial home was paid for by the ADB with funds from GroBherzogliches Fideicommiss / fidéicommis grand-ducal prior to the sale of the US property. With respect to the wife's argument regarding the omissions in the compromis de vente, whilst it is plain that the husband did not sign that document and that the document is undated, those omissions do not act to alter my conclusions as to what intention is evidenced by the terms of that document within the context of my finding that the ADB paying for the former matrimonial home with funds from GroBherzogliches Fideicommiss / fidéicommis grand-ducal. Finally, with respect to the email from Mr von Habsburg, as I have already set out I am satisfied that Mr von Habsburg's description of the parties as owners in his email of 11 August 2011 is a term of art or a shorthand, rather than an accurate description of the manner in which the former matrimonial home was held following the transaction.

117.

It follows in the circumstances that I must conclude that the husband does not own a share of the beneficial interest in the former matrimonial home. In the circumstances, I am satisfied that the beneficial interest in the former matrimonial home does not fall for distribution in these financial remedy proceedings between the husband and the wife.”

Mr Collins also took me to Re: Smith : SFO v Litigation Capital [2021] EWHC 1272 where the Judge held at paragraphs 604-605:

“604.

In the context under consideration, a nominee is someone who owns property, but holds it on a bare trust for the principal absolutely, effectively dealing with the property as the principal directs, including conveying it to the principal so as to terminate the trust: see Lewin , 1-028. Whether property is held by someone in the capacity of a nominee is essentially a question of fact. Lord Sumption, in Prest v Petrodel Resources Ltd [2013] UKSC 34; [2013] 2 AC 415, [52] , observed [see citation above]… :

605.

There are number of matters which may support the conclusion that the apparent owner of property in fact holds it as a nominee for someone else: whether someone other than the alleged nominee exercises control over the asset ( Phoenix v Cochrane [2017] EWHC (Comm), [17(5)]); whether the apparent owner uses or allows the asset to be used in a manner which advances someone else's interests rather than its own ( Prest, [52]); who paid for the asset, which may support a conclusion that it is held on constructive trust (Lewin, 10-019) and whether the person alleged to be the "real" owner had a motive to disguise his or her ownership ( JSC BTA Bank v Solodchenko & Ors [2015] EWHC 3680, [8] ).”

Ms Fitzgerald submitted in summary (in expansion of what I have already set out above) that:

Ms Fitzgerald further submitted in particular in detail that:

Mr Collins submitted in summary (in expansion of what I have set out previously) that:

Mr Collins submitted further in detail in particular as follows:

In considering the factual issues between the parties, I have had to consider whether the relevant party, on whom the burden of proof lies, has shown to the civil standard of proof, being that on the balance of probabilities (i.e. whether it is simply more likely than not) that any particular historical fact or event occurred. That is something which I have had to do and have done taking into account all the evidence, oral and documentary, as well as counsel’s submissions, and where I have been able to come in all respects to actual conclusions (i.e. that particular facts and matters have been proved i.e. been shown to have been more likely than not to have occurred) rather than ever being in a situation where I could not come to an actual conclusion either way and had to fall back on considering upon whom the burden of proof lay in relation to establishing the relevant asserted fact or matter.

Indeed, there is an outstanding debate in the case-law as to on whom the burden lies to show that Irfan has a beneficial or other proprietary interest in the Properties over which charging orders may be made. My provisional view is that the burden is actually upon Lenkor to show this since it is a pre-requisite to Lenkor obtaining the orders which it seeks, and the position, at first sight, looking at the legal title (and where equity follows the law) is that Energy is the owner of the Properties in law and equity without Irfan having any interest. However, on the facts as I find (without having to resort to burden of proof) them to be, whether this is right or not does not matter.

In considering the issues regarding fact, I have borne in mind that the Court takes into account and tests all of the evidence, oral, hearsay, documentary and expert, considering what weight to give it and then weighing it altogether as an holistic exercise in coming to its conclusions. In doing this the Court, bears in mind:

Certain of the evidence before me is technically “hearsay evidence” being in terms of what someone has been told by another, or what a person has said through a written document. Such evidence is admissible before the Court under the provisions of the Civil Evidence Act 1995 (“the 1995 Act”).

However, section 4 of the 1995 Act provides that the Court has regards to all the circumstances in considering whether any inferences can be drawn as to the reliability or otherwise of the hearsay evidence including particular factors set out in section 4(2) which reads as follows:

“(2)

Regard may be had, in particular, to the following—

(a)

whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(b)

whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(c)

whether the evidence involves multiple hearsay;

(d)

whether any person involved had any motive to conceal or misrepresent matters;

(e)

whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(f)

whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight.”

Thus the weight to be given to hearsay evidence is dependent upon all the circumstances including that the relevant persons have not been called to court to swear an oath or affirm (and be subject to both giving a solemn promise to tell the truth and to potential penalties if they do not) or to be cross-examined and have their evidence tested.

I have applied the above considerations and approaches in coming to my various factual conclusions.

While I have sought to consider each factual conclusion holistically on the entirety of the evidence and legal submissions, rather than simply coming to a first factual conclusion and relying on it to justify subsequent factual conclusions, it seems to me that I have to proceed through a chronological history of the beneficial and other proprietary interests and rights in the Properties (and, to an extent, although I am only indirectly concerned in them, the Shares). I make clear that I have considered all the evidence and the various submissions, written and oral, even where I have simply summarised the main material and submissions in view of the length of this judgment.

The first question is as to who provided the purchase prices for the Properties where the two possibilities are Mazhar and Irfan.

I find on the balance of probabilities that it has been proved that it was Mazhar. I have considered all the evidence, and it seems to me that the following factors have particular weight and lead me to that conclusion:

The next question is whether the result of the acquisition of the Properties was that Energy held them beneficially (with Mazhar’s only beneficial interest having been in the Shares) or whether Energy held them on trust for Mazhar.

Either scenario is possible as a matter of law and where Section 53 does not prevent the arising of a resulting trust. As to the law, it seems to me that:

There is nothing to suggest that Mazhar provided the monies by way of loan or capital subscription.

I have closely considered the wording of the 1996 Document. That appears to contain:

I have to consider the 1996 Document on ordinary principles of considering the various possible constructions and meanings holistically (i.e. altogether as to which is the most likely meaning (including of Mazhar’s state of mind) rather than rejecting one after another and being left with a residual meaning) giving proper weight to the words used but also the factual matrix (as known to Mazhar) and the potential commercial and underlying purposes of the document; and together with the other evidence as to the 1996-7 position and intention of Mazhar as the funder, and which I have done.

It seems to me that the 1996 Document and the other evidence points overall to Mazhar having declared that, and also and separately having had subjectively, and having expressed objectively, the intention that, he was to own the Properties beneficially, and I so find as a matter of construction and on the balance of probabilities. The factors of particular weight seem to me to be that:

However, even if I had not concluded the above as a matter of construction and/or intention, I would have concluded that there was insufficient evidence (at least to establish on the balance of probabilities) of any express intention, or to found an implied intention, being an intention for Energy to hold the Properties (and the acquisition monies) beneficially, to displace the presumption of a resulting trust which I hold exists as a matter of law (as stated above) in these circumstances of financing of and acquisition by a nominee company. I conclude that by reason of my weighing of the all the evidence, but in particular the factors and matters which I have identified above in the preceding paragraphs and also those which I have recited in my consideration of the NRC decision. It seems to me that that conclusion is fully consistent with the reasoning of the NRC decision, on its somewhat similar facts, and that for me to have come to any other conclusion would have been inconsistent with it.

I therefore hold that Mazhar owned the Properties beneficially until his death in 2003.

The question then arises as to what happened to that beneficial ownership of the Properties following Mazhar’s death. There are a number of possible permutations, being:

I note that none of these permutations (unless the Properties simply remained in an unadministered estate, but where the making of charging orders over that to which Irfan would be entitled might well be possible, and which is an outcome for which no-one had contended) result in Irfan, at first sight, being entitled to less than 25% of the beneficial ownership of the Properties.

However, it is possible that Irfan became entitled to 100% of the Properties by one or more of these various means, and that would be consistent with all of the Shares having been vested in Irfan in 2003. Nevertheless, having considered all the evidence (and submissions), I regard, on the balance of probabilities, Irfan as only having had a 25% (or possibly a somewhat greater proprietary entitlement than 25%, being that which was set out in the 2017 Affidavit) for the following reasons (although they somewhat inter-relate):

In the circumstances, I find the 2017 Affidavit as particularly weighty. It was a document made under compulsion, I infer that it was prepared with the benefit of legal advice (as Irfan then had lawyers instructed with regard to the Lenkor litigation in this jurisdiction), and it was prepared in circumstances where Irfan was required to tell the truth both under the WFO and because it was a sworn statement. While Irfan would have had an incentive to seek to minimise his entitlements to the Properties, he deposed to large and very specific amounts which I consider were very likely to have been the product of agreements and to have been recorded in a document.

I find on the balance of probabilities agreement(s) were made with the other then interested parties (in part as a reflection of what they understood to be the then situation and in part as an agreed way forward) and so as to bind them and Irfan that Irfan would have a 25% (or slightly greater) interest. However, I would have come to the same outcome as to Irfan’s eventual beneficial interest even if I had not so concluded that actual agreements were made; as I regard, for the reasons given above, the default position to be that Irfan would have been entitled to 25% (by way of lifetime disposition by Mazhar or death disposition from Mazhar’s estate) and that there is insufficient to prove a departure from that default position.

I have weighed in this evaluation of the evidence, the fact that in 2003 Irfan was registered with ownership of the Shares and which could suggest that Irfan had become (or it had been agreed that Irfan had become) the sole i.e. 100% owner of Energy and the assets held by it (i.e. the Properties). However, it would simply have been convenient for one person to hold the Shares, and thus be able to solely liaise with and instruct the directors of Energy and to pass shareholder resolutions, notwithstanding that other family members (whether the Siblings or Mohammad and the Other Children) had proportionate beneficial interests. The natural person to perform that role was Irfan who had always been the manager of the Properties, which point applies whoever were the others interested, but in particular if the others interested were Mohammad and the Other Children as Irfan was their father (and now their effective patriarch). I have therefore taken this point into account but regard it as having been outweighed by the other evidence and, in particular, the 2017 Affidavit but also the absence of other evidence as to anything contrary to what I have termed above as being the default 25% position.

I have considered four further difficulties with this analysis. The first is that I do not have evidence, or even statements as to their position, from those who would have been the other then interested parties. They might have been the Other Siblings, and who would be entitled to be heard if it was to be declared that they did not have interests. The same applies, but to a lesser extent to Mohammad (who I have heard from but who has decided not to seek to take part as a party to defend his possible interest) and the Other Children. However, I do not think that that gives rise to difficulties in coming to my conclusions below. On any of these analyses Irfan would be entitled to 25% at least, and therefore those others cannot complain about that. Further, as stated above, I consider on the balance of probabilities that the 2017 Affidavit reflects an underlying set of agreements between those whom it was agreed were persons beneficially interested in the Properties, and that those agreements were documented so as to be properly binding under Section 53(1) (although they would also potentially give rise to at least a constructive trust under Section 53(2) as detrimental reliance or other continued conduct preventing such agreements being resiled from in equity would have occurred as a matter of course over the subsequent years).

The second difficulty is that this analysis does not lead to a particular answer as to who were or were agreed to be the other beneficial owners. Mohammad says that was Mohammad and the Other Children and now Mohammad alone, but it could be the Siblings; either scenario is possible on the evidence before me and I have not heard from any of those other people. However, I do not think that I have to decide that point. I am only concerned with Irfan’s beneficial interest, as only that can be the subject of charging orders, and that remains the same whoever are the other beneficial owner(s).

The third and fourth difficulties are as to what is the proportion of Irfan’s beneficial interest and what is the date (and purpose) of the agreement as to the “PKR62,997,445/£461,993 only” and which might impact upon that question e.g. if it fixed Irfan’s beneficial interest as being a specific monetary amount rather than as a proportion the value of which might vary with property prices; or if it provided one element of a calculation of a proportionate beneficial interest based on the agreed or actual values of the Properties as at a particular date. On the other hand, the figures might only be a calculation of what an agreed specific proportion e.g. 25%, was worth in monetary terms at a specific date, and so that it would not matter when that calculation took place because it was simply the fact of a 25% beneficial interest which was what was settled and agreed even if it was being given a notional (but variable for the future) quantification as at one point in time.

Ms Fitzgerald and Mr Collins both submitted that if I was to proceed on this basis, I should conclude that Irfan’s beneficial interest was 25% although Ms Fitzgerald further submitted that I should find (and see below for my judgment as to this) that the financial figures represented the price which Mohammad had agreed with Irfan should be paid by him to buy-out Irfan’s beneficial interest (i.e. as part of the asserted 2014 Agreements).

Here I am concerned that Mohammad’s evidence was that the financial figures were based on Irfan being entitled both to 25% of the value and to something more based on expenditures which Irfan had made or funded upon the Properties. However, I have no evidence as to either what the relevant calculations were or as to when (which date would be essential in terms of working out what might have then been thought to have been the values of the Properties, and hence the value of 25% of the beneficial interests in them) this calculation was made. I am also concerned that Irfan, who may be prejudiced by my confining him to 25%, has not been before me although I am also satisfied that Irfan has decided not to be involved in this charging order application.

However, having considered the evidence and the parties’ submissions, I have concluded that I simply do not have sufficient evidence to conclude, on the balance of probabilities, that there was any agreement (subject to Mohammad’s buy-out argument based on the asserted 2014 Agreements, which I deal with below) that Irfan was entitled to any more (or any less or anything different) than 25% of the beneficial interests which it seems to me, for the reasons given above, was the original default position following Mazhar’s death and was also confirmed by subsequent agreements between those interested.

I have had to consider this on the balance of probabilities and:

I do, however, think that I should afford Irfan some limited protection where he has not attended. I therefore find that Irfan’s beneficial interest following Mazhar’s death and the dealings which followed it was 25% but I will make provision in the ultimate order that Irfan may apply within a set time from the ultimate order to contend that his percentage was a higher one. In view of the amount which Irfan owes to Lenkor, I suspect that Irfan may not do so, but, and where Lenkor itself only seeks 25% in circumstances where I have rejected its primary case above, I consider that that is the appropriate way to proceed.

There remain, however, Mohammad’s contentions, supported by Energy, that Mohammad made the 2014 Agreement with Irfan to pay the sums of “PKR62,997,445/£461,993 only” for Irfan’s beneficial interest (which I have held was 25% although Mohammad would contend that the agreement would extend to any higher proportion) and that (i) the beneficial interest fully vested in Mohammad prior to payment by him and (ii) Mohammad made the alleged 2015 Payments in part payment of that sum leaving only PKR15,747,445 outstanding and that merely as an unsecured debt with no proprietary interests.

Mohammad’s evidence was that all of this, both the 2014 Agreement and the 2015 Payments, are altogether undocumented. In those circumstances, they would not satisfy Section 53(1) which requires dispositions of beneficial interests to be in writing; but, if monies were paid, they might result in some constructive trust (permitted by Section 53(2)) or some other restitutionary right or proprietary estoppel (and which would be potentially proprietary) at least as to the amounts of the payments.

The first question is whether the 2014 Agreement (or any other agreement) was made by Irfan to sell (or transfer) his beneficial interest to Mohammad. That is a question of fact and, having considered all the evidence and submissions, I do not regard that as having been proved on the balance of probabilities but rather the reverse, being that on the balance of probabilities that was not the case. I have considered this holistically with the questions of whether the 2015 Payments (a) were made and, if made (b) were made in relation to the 2014 Agreement (or a similar transaction) – and which I deal with next below.

I have come to this conclusion regarding the 2014 Agreement for the following main reasons:

While this does not strictly arise in the circumstances of my conclusion that the 2014 Agreements were not made, I have considered Mohammad’s contention that they would have had the effect of vesting Irfan’s beneficial interests in Mohammad whether or not the 2015 Payments were made, and with immediate effect, and so as to leave Irfan merely as an unsecured debtor of Mohammad. I consider that that would have been incorrect, for the following reasons:

I also hold that I do not regard it as having been proved on the balance of probabilities that the 2015 Payments were made but rather the opposite. Strictly, what I am considering in relation to the 2015 Payments is both (a) whether they were made and (b) whether they were made so as to be payments of the price of the asserted purchase (i.e. in relation to the 2014 Agreement transaction (or otherwise in relation to Mohammad acquiring Irfan’s beneficial interest)). I have set out above as to why I would not consider, even if the 2015 Payments had been made, that they were made in relation to the 2014 Agreements.

However, I have also concluded that the 2015 Payments (i.e. payments by Mohammad to lawyers in Pakistan in relation to monies owed to them by Irfan and at Irfan’s instigation) were not made (and in any case have not been proved) after considering all the evidence and submissions and applying the balance of probabilities test.

This is for the following particular reasons although I have borne all matters in mind:

I have therefore concluded on the balance of probabilities that the 2015 Payments were not made. However, whether or not the 2015 Payments were made, for the reasons given above I conclude that the asserted 2014 Agreement was not made.

The consequence of my above rulings of law and findings of fact is that Irfan became and has remained entitled to a 25% beneficial interest in each of the Properties and I will so declare (and without making any finding as to who, apart from Irfan whose interest is limited in my judgment to 25%, beneficially owns the remaining 75%), but subject to my granting a limited permission for Irfan to apply to contend for a higher figure as to which I have referred above. As Irfan has those beneficial interests, and having considered all the circumstances, I will made final charging orders in relation to them.