Cobussen Principal Investment Holdings Ltd v Akbar & Ors

This is my decision on the claimant’s (“Cobussen”) application to make final a charging order in relation to a valuable leasehold property in London called Apartment 2.5, 22 Trevor Square, London SW7 1EA (“the Property”). Cobussen claims that the first defendant (“Mr. Akbar”) in the beneficial owner of the Property. The second defendant (“Legacy”) claims that it owns the Property, as does Mr. Akbar. The third defendant (“Mrs. Akbar”) is a party to these proceedings because she may have an interest in the Property or at least a right to live in it. She has played no part in the proceedings and appears only so that she can be heard on any application for costs which may follow judgment. I heard evidence and submissions on the issue before the court, namely whether Mr. Akbar has any interest in the Property which can be charged to secure payment of a judgment debt. If so, no-one has submitted that that interest might be held jointly with anyone else. Mrs. Akbar’s position is as I have recorded above. The issue is whether he is solely entitled to the beneficial interest, or whether Legacy is.

In this judgment, page references are to the number printed on the page in the Trial Bundle, and appear as “[page number]”. This is not the same as the digital page number, which is not the best way of preparing bundles. The Trial Bundle was perhaps prepared at speed because of the late disclosure of much of its contents, but it is not searchable and contains multiple copies of emails most of which are of no importance. It contains 2594 pages in the main bundle, and 418 pages in the supplemental bundle. This has added significantly to the time taken to prepare this judgment as I have reviewed the documents in their entirety in the course of its preparation.

By an application on Form N379 issued on 18^th June 2019 Cobussen sought a charging order on the interest of Mr. Akbar in the Property to secure payment of a judgment debt. The judgment was given in the Eastern Caribbean Supreme Court, BVI on 24^th October 2018, and was registered in the High Court of Justice, Queen’s Bench Division on 20^th February 2019. The debt totalled £15,792,071.94 at that date, including interest and costs. It remains unpaid, although Mr. Akbar consented to the judgment in the BVI and, apparently, has the assets to pay it if he chosen to do so. It was, effectively, common ground at the trial that he is a man of great wealth. In fact, his net worth was assessed by one of his banks in 2018 at £695,000, see [1588]. For a man of great wealth, it is fair to observe that he experiences a surprising amount of persistent difficulty in paying his debts. The judgment debt resulted from a Tomlin Order which was agreed in settlement of proceedings by Cobussen against Mr. Akbar and a company of which he was the majority shareholder, but which does not otherwise feature in this case. Cobussen had invested a large sum in this company, and alleged that its assets had been “diverted, dissipated or misapplied, while significant borrowings were assumed against overinflated asset values”. Mr. Akbar chose not to resist the claim that he was personally liable for this conduct.

Before these proceedings began, on 15^th April 2018 Bryan J made an order (“the Norwich Pharmacal Order”) requiring HBL Bank UK to locate and disclose documents to Cobussen. Mr. Akbar had one or more accounts with that bank. The documents thus obtained by Cobussen included an email sent by Mr. Akbar on 4^th

On 21^st June 2019, Jay J made an interim charging order and directed that unless an objection to its continuation were filed within 28 days a Master would consider without a hearing whether it should be made final. In the event that there was an objection, he directed that the application would be heard by a Master on 30^th July 2019 and that the judgment debtor and any other person seeking to object should file and serve their objection and the grounds of it in writing not less than 7 days before the hearing.

His Honour Judge Freedman sitting as a High Court Judge, on 30^th July 2019 made an order dealing with some third party debt orders with which I am not concerned. In relation to the Charging Order, he made an order which regularised service on Legacy and directed that Legacy and Mrs. Akbar should be joined as respondents to this aspect of the proceedings, and ordered that the interim charging order should continue until further order. He then made an order directing:-

Point of Claim were served on 9^th August. Points of Defence were served by the Respondents on 23^rd August 2019. A Reply to both Defences was served on 30^th August 2019.

The Points of Claim allege that Legacy holds the legal title to the Property on a resulting trust, alternatively as nominee, in each case for Mr. Akbar. It alleges that Legacy acquired the Property on or about 14^th April 2004 but that the purchase price when it did so was paid by Mr. Akbar personally, by a mechanism of which Cobussen was unaware. It is claimed that the source of the funds was the sale of a McDonald’s Franchise in Pakistan. It is common ground that a McDonalds franchise in Pakistan was sold at or about this time, realising substantial funds. It is alleged that the

Mr. Akbar’s Points of Defence allege that a relation of his, Mrs. Mumtaz, was the settlor of a Cayman Islands Trust which is called the 2003 Trust in the document.

Legacy’s Defence is attested by a Statement of Truth from a director of its corporate director, an Equiom company. The name is illegible. The document confirms what Mr. Akbar says about the holding of the share in Legacy between 2003 and 2009, and about the subsequent transfers to EFG and then Equiom. The document asserts that Mrs. Mumtaz was the settlor of the Garden Trust. It says that the Equiom Directors have at all times acted independently of the Garden Trust and its beneficiaries. The words “as did the EFG Directors” then follow. Nothing which has been disclosed reveals how the Equiom Directors formed any belief about what the EFG directors had done, or why they had done it. There is a file, called the “corporate file” which has been disclosed, but the documentary history is far from complete. As to the purchase of the Property, the document says that the price of £2,398,000 was funded as to £643,000 by Mrs Mumtaz and as to the balance by a mortgage loan secured by a first legal charge over the Property executed by Legacy. This was refinanced in 2009 by a loan from EFG of £2,700,000, and refinanced again in January 2016 by a loan from Kleinworts. It says that Legacy was the borrower and had “responsibility for maintaining the mortgage loan repayments”. It does not say whether that responsibility was ever discharged, or, if so, by whom. It confirms that there was a licence agreement, but does not say what Mr. Akbar’s obligations are under it. It says that Mr. Akbar has provided loans to Legacy to “assist in the payment of mortgage loan interest and service charges”. It does not say how or when Legacy proposes to repay those loans.

The Reply says that Mrs. Mumtaz is Mr. Akbar’s aunt and has limited financial means. It says she is dependent on Mr. Akbar. Various points are taken about Mr. Akbar’s case which are not material to the applications before me. In summary, his case is denied. A similar approach is taken to Legacy’s Defence.

On 2^nd March 2020 I made a ruling giving reasons for making a wide ranging disclosure order. That is [2020] EWHC 476 (QB), and it is not necessary to repeat what I said here. I concluded that Mr. Akbar and Legacy, acting through the same firm of solicitors, had failed to give proper disclosure and that their solicitors had also failed in their function of ensuring that their clients did give proper disclosure. A great deal of documentation has been disclosed since that order (after a further Order of Kerr J) and there is no doubt that the stance taken by DWF on the instructions of Mr. Akbar and Legacy was highly unsatisfactory. Important documents were disclosed very late, and the documentary material is still incomplete. The principal gap is any material to show that Mrs. Mumtaz paid anything towards the purchase of the Property, or to show her taking any interest in it at all over the last 16 years. Among the recently disclosed material is internal Equiom documentation which shows that they became alive to this gap and were worried enough to make a Suspicious Activity Report about it. I will turn later to the relevance of all this when assessing the oral evidence of Mr. Akbar on which his case, and Legacy’s case, depends.

At the start of the trial Cobussen made an application to amend the Points of Claim by the addition of paragraph 18A. This said

This was an allegation that the EFG and Equiom arrangements were, in law, shams. It was a late amendment, but the defendants can hardly complain at that, given their late disclosure. However, it seemed to me that the nature of a sham is that both sides, or all sides, to such transactions must intend that the documents misrepresent the reality. In this case, this involved a claim in relation to two separate professional trustees in 2009 and 2016. EFG are not parties to the claim and not on notice that any allegation against their professional conduct was to be made. Their only contribution has been a terse refusal to give any disclosure of anything they have which is relevant to the proceedings without giving any explanation of their unimpressive stance, see [2074]. It is conceivable, although not likely, that Equiom might have conducted its case differently had it been aware of the allegation of sham. In these circumstances it seemed to me that it would not be appropriate to permit the allegation of sham to be litigated as a separate route to relief for Cobussen, although it was open to it to explore the factual matrix out of which paragraph 18A came, in support of the other routes to relief already pleaded. The allegation of bare trust did not, in my judgment, add anything to the allegations already pleaded and certainly did not disadvantage the defendants. I therefore refused the application to add paragraph 18A but made it clear that the existing pleadings allowed full exploration of the facts impliedly identified in it. There is therefore no allegation of sham involving EFG or Equiom before me. Given that the most significant dispositions, in my judgment, are those which preceded the involvement of either this does not impede Cobussen and furthers the objective of ensuring that proceedings are no more complex than they need to be.

It will be clear already that although the law in this area is complex, there is at the heart of this case a simple question of fact. Who provided the £643,000 which was paid for the Property in 2003? Mr. Akbar agrees that he guaranteed the loans advanced against the Property at its purchase and in each of the subsequent refinancing arrangements, and he has paid the interest on those loans and all other outgoings on the Property. Mrs. Mumtaz has, apart from her alleged contribution of £643,000 to the purchase price, never paid anything for the Property, she has never lived in it and she has never earned a penny out of it in rent. Mr. Akbar did not know if she had even visited it. The legal interest is now held (via Legacy) by the Garden Trust, of which she is now prevented from ever becoming a beneficiary.

A brief, selective but illustrative chronology of the transactions relevant to this issue is as follows:-

Mrs. Moussaoui made witness statements but was not called to give evidence. Effectively she simply produced documents which had been obtained by disclosure and, in some cases, from third parties. She gave a history of the proceedings and made some comments. I have not taken her evidence into account, although it is a convenient place to find documents and procedural information.

Mr. Sohail Sultan is the ultimate beneficial owner of Cobussen. His interest in it is held by a structure involving the Royal Bank of Canada the details of which do not matter. I think the detail was elicited in order to show that it is not uncommon to find valuable assets held in structures which involve trusts, and companies with corporate directors. I do not find that proposition helpful in ascertaining the true nature of the beneficial interest in the Property. He gave an account of the dispute between Cobussen and Mr. Akbar which resulted in the Tomlin Order. He says in paragraph 4 of his witness statement dated 29 July 2019 at [275.1]:-

“I specifically recall that he told me that he had recently bought the property at Trevor Square using the sale proceeds that he had made from selling his McDonalds franchise. He told me that he purchased the property for £2.5 million.”

He also described at paragraph 5 a conversation as follows from 2009-2018:-

“5.

….During this time I became aware from conversations with the Second Defendant that he needed to raise funds in order to refinance some of his debts which arose in relation to his business interest in Princely Jets and Crown Travel Services. I was informed by the Second Defendant's financial controller that the Second Defendant has received a significant amount of money from a company called "Legacy" in the Cayman Islands which would be used for this purpose. I now know "Legacy" to be a reference to Legacy Holdings Limited (Legacy). I understand that this money was in fact the product of a loan made via EFG private bank Ltd who also managed Legacy Holdings Limited on the Second Defendants behalf.

6.

EFG also managed our joint business interests in the First Defendant. As a result of the matters that arose from that dispute, (which related to the Second Defendants dishonesty), in late 2015 EFG served Notice on the First Defendant resigning as the First Respondent's directors and managers. I believe that EFG also ended its business relationship with both the Second Defendant at the same time.

7.

In 2018 as part of my discussions with the Second Respondent he informed me that in January 2016 he had refinanced the Trevor Square property increasing the finance on the property to circa £3.8 million. This was a higher amount than the original loan from EFG. He used the funds to repay the EFG loan which he had previously taken out to meet his business needs and used the balance of the funds to meet his further business and personal expenses.”

This evidence of Mr. Sultan was challenged. I accept it. What he says about the way in which Mr. Akbar spoke about the property is very consistent with the way in which he spoke to others about it in emails which I shall summarise below. This means that Mr. Akbar was not being entirely frank when he said in 2005 that he had bought the Property with the proceeds of sale of the McDonalds franchise. Most of the purchase price was borrowed. No doubt he wished to give the impression of greater wealth than he actually had when speaking to a person with whom he was interested in developing a business relationship. The later conversations about refinancing are broadly consistent with what happened, in that funds were raised from EFG via Legacy in 2009, and again in 2015. The dates and amounts may be somewhat out of line with the documents, but the broad thrust is correct. At the time when the witness statement was made the documents showing this were not available to Mr. Sultan, and this supports his evidence that he did learn details about the Property from Mr. Akbar in conversations. It seems to me that the evidence that Legacy applied the proceeds of the initial EFG loan to refinance some of Mr. Akbar’s own business debts is of importance. I have recorded resolutions of the directors at 16(v) and (vi) above which are consistent with Legacy making its borrowing available for Mr. Akbar’s personal use. Similarly, the evidence that Mr. Akbar applied funds from the SG Hambros loan to his own purposes is also of importance. As I have said, the defendant’s evidence is silent about what the borrowed monies were used for, although this statement was served in July 2019. One thing is clear: they were not used for the purposes of

In cross-examination Mr Sultan said that Mrs. Mumtaz’s tax affairs were revealed by a private enquiry agent in Pakistan instructed by Pakistani counsel acting on behalf of Cobussen and confirmed that she had not filed any tax return and therefore had no wealth. When he gave evidence Mr. Akbar said that she does not pay tax because her wealth is in her husband’s name. There has been some criticism of the source of

There is no direct documentary evidence of the payment by Mrs. Mumtaz of the £643,000. She was not a witness, although she did make a witness statement in the disclosure proceedings. That statement refuses to provide any information about her personal wealth, but asserts that she is a rich woman. She gives an account of how the Property was purchased by her with the assistance (undefined) of Mr. Akbar for her daughter. She appears to agree that neither she nor her daughter ever used it, and says that she allowed Mr. Akbar and his family to live there. She does not explain how or why her asset is now owned by a company which is an asset of a trust whose beneficiaries are Mr. Akbar and his immediate family, not including her. She does not say what she got in return for her £643,000 or whether she would like it back. She expressly refused to provide any detail. Importantly, she does not say that she bought the Property as a gift to Mr. Akbar. It was bought as her asset, for her daughter’s use. That plan (if it was ever the truth) must have changed very quickly, because neither she nor her daughter has ever lived there. She had, though, intended to benefit her daughter by acquiring a property for her use. She does not mention the fact that she abandoned any interest in it, still less explain why she did that. She does not explain what happened when the Garden Trust was set up in 2009. She is sometimes referred to as the settlor of that trust, but she does not say this. There is no evidence that she is medically unfit to give evidence by videolink from Pakistan, which is how Mr. Akbar gave evidence. Her only contribution to this trial, therefore, has been a wholly inadequate witness statement. This is a bizarre state of affairs which only has one rational explanation: nothing she could say would help Mr. Akbar’s case. This is not a case where I am drawing an inference merely from the failure to call a witness. It is a case where I know at least some of what she would have said from a statement which is verified by a statement of truth. The inference rests not only on her absence, but also on the completely inadequate content of her statement. I will set out paragraphs 4 and 5, on a fair reading of which she was asserting that she still owned the Property.

“4.

I have been asked to say something on the background to the Trveor Square purchase. I decided to purchase that when my daughter was intending to move to London. I contacted Ghouse about it as I knew he was familiar with the city and could help me locate a property. I cannot recall details, but I recall Ghouse helping me with the arrangements too. Citibank, who provided a mortgage for the purchase, advised me on a helped implement a tax efficient structure for it. I do not go into detail here. I understand that the company which holds the property have provide what documents they have. They should show how the arrangements changed from time to time.

“5.

Due to my ill health, I was unable to use Trevor Square as planned and in any event my daughter eventually moved to Chicago USA. It made sense for me to allow Ghouse and his family to use Trevor Square so long as he took care of the administrative costs and tasks associated with it. I understand that has been happening.”

That is an assertion that what “has been happening” is that Mr. Akbar is using the Property because she has allowed it, on terms that he pays the costs. She does not explain how or why he has been helping himself to large capital sums borrowed against it. That activity is entirely inconsistent with the arrangement she describes.

There are some documents about Mrs. Mumtaz’s means. At [425] is a document from Citigroup Private Bank Singapore dated 31 January 2005. This appears to have been supplied to Equiom in answer to their enquiries about her source of wealth in 20182020. It relates to a portfolio and shows that her direct liabilities exceeded the assets of the portfolio by $434,519.24. I do not know what this means, and no-one has explained it. On its face it is not evidence of wealth, and certainly not evidence of the kind of wealth which enables a person to write off any interest in a property in London to which she had contributed £643,000 and which had, by then, increased in value. At [429] is another document from Citibank dated 3^rd May 2005. At this time the value of the portfolio is stated as $4,362,041.11. The value of any “direct liabilities” as set out in the earlier document is not stated. At [520] is a bank statement dated 4^th January 2010 which is an extremely suspicious document. It is for an account in Mrs. Mumtaz’s name at EFG Private Bank, Channel Islands. It is “sheet 1” and shows an incoming transfer of $520,000 on 13^th May 2009 from Shantaris Limited Cititrust. According to the 2009 Deed of Termination Receipt Discharge and Indemnity a share in Shantaris Limited was an asset of the 2003 Trust which was then being terminated, see [514]. A fee for its liquidation had to be paid at that time. Otherwise, the evidence about this company is silent. On 14 May 2009 there was an outgoing transfer in the same sum to “EFG London [account details given] Ghouse Akbar”. A further similar back to back transaction in a smaller sum appears on 8^th and 11^th June between the same parties. Further funds from Shantaris are received on 16^th June, leaving a credit balance at that date of $2,147.65. The statement period ends on 31^st December 2009 and no further transactions between June and December are recorded. This credit balance reappears in the documents at [779] in an email from EFG Bank dated 22 July 2015, 6 years later. It is to Mr.

I do not believe that the documents reveal what happened to that fairly small sum of money, but the way in which the bank sought instructions from its apparent client Mrs. Mumtaz is very revealing, in my judgment. That bank account was held in the name of Mrs. Mumtaz, but the address on the statement was that of the Property. She did not live there. The account was used only to receive funds from Shantaris and to pay them out at once to Mr. Akbar. Although he was asked about it in evidence, Mr. Akbar did not offer an explanation for these transactions. They appear to have the sole purpose of concealing the source of funds by giving the false appearance that they came from his aunt. What appears to have happened is that an asset of the 2003 Trust was converted by the use of this account into money available to Mr. Akbar. Mr. Akbar did not obtain and disclose any documents from EFG as to how and by whom that account was set up, nor any Know Your Client documents for the account holder. No records of any conversations between banker and client were produced, and I have recorded EFG’s refusal to assist above. This unsatisfactory state of the evidence means that there is nothing to rebut the appearance of the use of the aunt’s name to disguise the reality of these transactions, and I find that this was the purpose of this bank account. That bears upon the truthfulness of Mr. Akbar’s case in these proceedings which is to assert that his aunt provided funds which were then used for his benefit in buying the Property.

Whatever may be the safe conclusion from the contribution of Mrs. Mumtaz to these proceedings, plainly the evidence of Mr. Akbar is of central importance. His third witness statement is dated 19 June 2020 and contains a sentence which is central to his case at the end of paragraph 21:-

“I still see [the Property] as my aunt’s investment and have never sought to use the property as my own.”

I reject that statement. It is a lie. It is completely inconsistent with the documents. The legal title to the Property is owned by Legacy, whose only issued share is trust property of the Garden Trust. Mrs. Mumtaz is excluded from being a beneficiary of that trust by reason of a decision of the trustees on 4^th April 2017, see [1342]. The emails now available after the disclosure order are very clear. Nobody ever thought it worth trying to communicate with Mrs. Mumtaz at any point, whatever was being done with the Property. Moreover, when cross-examined Mr. Akbar said that Mrs. Mumtaz and his father had had extensive dealings with each other over the years and he suggested that she may have decided to settle the Property on him as a quid pro quo or as a favour to his father. He said that everything in the family is owned collectively and this would not be odd. It might or might not be odd, but it is entirely inconsistent with paragraph 21 of his witness statement. Both statements cannot be true. On the balance of probability neither of them is.

I will now embark on a review of the abundant documentation which will be a summary, but will explain why I have come to the conclusion that this Property has in fact been used exclusively by Mr. Akbar since its acquisition as both a residence for himself and his family in London, and also an investment from which he can withdraw borrowed funds as its value rises for his own use. I have cited two directors’ resolutions above showing how these funds were dealt with by Legacy which support this conclusion. There are others. Mr. Akbar accepts that he did all the directing of events with EFG and SG Hambros, but says that this was because his aunt authorised him to do this because she was not coping and he was acting for the family abroad. He did this from about 2000. He says that she does not use emails and only ever deals with documents in hard copy and they transact business between themselves face to face, or on the telephone.

On 5 December 2003 the then directors of Legacy were authorised to issue a limited power of attorney to Mr. Akbar, see [368]. Mr. Akbar in his evidence said that he had had a power of attorney in respect of the 2003 Trust as well. On 6 August 2004

The property waiver letter assures the directors of Legacy, then Cititrust, that the Property will be occupied by Mr. Akbar’s family who will be responsible for costs and will indemnify Legacy against any liabilities arising in connection with the property. Mr. Akbar confirmed in evidence that it was only he and his immediate family who had ever lived in the Property and as far as he knew neither Mrs. Mumtaz nor her daughter had ever visited it. Why did Citigroup regard him as “the client”? When asked about this Mr. Akbar said that he had never had a bank account at

Not much is known about the original trust, TR11174. What is known is that in 2004 Cititrust (Cayman) as trustee were given instructions by Mr. Akbar as “Third Party Power Holder of the above trust” to purchase the Property, see [420]. They did as they were told, and on 28 April 2004 sent a completion statement by email to Mr. Akbar. This record the monies received and paid out in the purchase transaction. £643,000 was shown as having been received “FROM CLIENT” on 8 April 2004. No primary document evidencing the source of that money has been produced. Citigroup regarded Mr. Akbar as “the client”, see paragraph 30 above.

There is something of a gap in the documentation between the acquisition of the Property in 2004 and the refinance and transfer of the share in Legacy to EFG Trustees and the appointment of EFG as its director. Mrs. Mumtaz is a missing person in 2009 just as she had been in 2004. She appears to have executed the Deed of Termination for the 2003 Trust as its settlor, but makes no other significant appearance in setting up the new arrangement or benefiting from it. I have referred above to the evidence of Mr. Sultan about the use to which the funds were put. She was also the named account holder on the bank account at paragraph 24 above but that was used only to channel funds to Mr. Akbar from something called Shantaris Limited. This is evidence of his use of her name for his own purposes. As I record above, EFG have failed to provide disclosure of materials in their possession such as their Know Your Client documents and records of conversations which must have occurred between them and Mr. Akbar and, perhaps, Mrs. Mumtaz. I have found above that the only purpose of this account was to create an appearance that funds came from Mrs. Mumtaz when they actually came from Shantaris. She was just a name.

Very substantial sums are recorded in the financial statements of Garden Trust as loans payable to Legacy and in much smaller sums to Mr. Akbar. In 2010 these came to $807,316, in 2011 $806,407 [535], in 2012 $829,223, in 2013 $842,222 [631], and in 2014 $822,581. Equiom has allowed Legacy to be late in filing its financial statements. A draft version appears at [1425]. These show total loans receivable by Legacy from entities associated with Mr. Akbar, including the Garden trust, of $1,024,251, see [1430]. Equiom as director of Legacy has not sought repayment of these loans which are unsecured and interest free. Equiom has no documents in relation to them. Ms. Brown of Equiom, whose evidence I deal with in a little detail at paragraph 36ff, told me that she did not know what had happened to £3m of the SG Hambros loan.

In January 2013 tax changes in the 2012 Finance Bill caused EFG to offer some advice about the structure which held the property to Mr. Akbar. Not to Mrs. Mumtaz. That advice is at [562] Mr. Akbar replied at [564] saying

“It seems that option 1 from Michael’s email re legacy is the best option. Please let me know if you agree and if so what is the cost (one time and recurring), time and documents required.

However, we can have a call on Wednesday as I am not totally clear on the structure.”

This is part of a pattern. The email at 16(ix) above is another part of the same pattern. The pattern is of discussions of this kind being entirely premised on the shared assumption that Mr. Akbar could do what he wanted with the structure, and thus the Property. The pattern is also of Mr. Akbar being quite frequently “not totally clear on the structure”. The reason why he as not totally clear in the structure, I find, is that it was a means by which he could hold the Property for his own benefit in an opaque way. He was not bothered about the details of the structure because they had no reality. They were devices. Other documents supporting this approach can be identified.

It is now convenient to turn to the evidence of Laura Brown, a very experienced provider of corporate services who joined Equiom in 2017. She was cross examined about her witness statement in answer to the disclosure process and Mr. Weale suggested to her that it was fundamentally dishonest. This was principally because it says at paragraph 14 at [1943] “Equiom does not possess copies of any correspondence prior to October 2016”, which is not, as it has turned out, true. She says that this was the only misleading part of her statement and denies that it was dishonest. She identifies in that statement the search terms which had been used and says that she did not believe that anything relevant had been missed, although the outcome of the disclosure order was clearly to establish that she was wrong about this. She says that they employed a disclosure agent and some one million emails were reviewed at that later stage. She agreed that the EFG documents supplied to them when they handed over responsibility for Legacy and the Garden Trust lacked some

Although Equiom has pronounced itself satisfied now with Mrs. Mumtaz’s source of wealth, I cannot myself be so satisfied. I have reviewed what I know about her means above, and the material is deeply unsatisfactory. Whether Equiom is acting appropriately in being satisfied with whatever it has seen is a matter between it and its Regulator. I have seen nothing which could satisfy me that she had the funds to make the payment of £643,000 or that this money came from any funds she may have had. I do not find that Ms. Brown’s first disclosure witness statement was dishonest, although I regret its inaccuracy and this inaccuracy gives me little confidence in Ms. Brown’s evidence more generally. One concern Equiom had was never allayed at all. They were concerned about the lack of tax advice when the structure was set up. I think that this was because they wanted to see that there was a genuine reason for setting up this structure, as opposed to its being a paper trail to hide the reality. There was no tax advice. In the end, the qualms they felt were laid to rest by some means I

In relation to a document at [1271] dated 8 June 2016 Ms. Brown said that she had not been aware of it. It is an email from SG Hambros (at that time Societe Generale and at other points in the documents Kleinwort Hambros) asking for Mr. Akbar to sign a tax declaration form as “UBO [ultimate beneficial owner] of Legacy”. This document was signed and returned by Mr. Akbar on the same day, see [1272]. It is clear evidence that Mr. Akbar regarded himself as the ultimate beneficial owner of Legacy. This means that the HBL email obtained at the start of these proceedings, see paragraph 3 above, is not an isolated document.

I reject the evidence of Mr. Akbar on all relevant matters. I reject the witness statement of Mrs. Mumtaz for the reasons given above. The various claims in the documents about her role in the transactions are inconsistent or self-serving. That means that I have no evidence that Mrs. Mumtaz paid £643,000 of the purchase price

The evidence which I do accept is that he has lived in it, mortgaged it without reference to anyone else, pocketed the money raised by doing so, and claimed to Habib Bank and to Societe Generale that he is the ultimate beneficial owner of Legacy. I do not think that the structure was established to save tax for Mrs. Mumtaz, who pays no tax in Pakistan and who would not have been liable for UK tax if she had left her money in Singapore. It may have been designed to have some tax benefit for its ultimate beneficial owner, Mr. Akbar, but the motivation for its setting up has been hidden from the court. I cannot judge whether that was a real reason for its establishment. It may possibly have been a means of acquiring a valuable asset while sheltering it from creditors, including creditors like Cobussen whom he was to encounter long after the purchase. I am not able to make a finding as to his reason for setting up the structure as he did, and pretending that the deposit came from his aunt because he has chosen to lie to the court to hide the truth. As I have explained above, Equiom tried to discover what tax advantages it may have had but failed. As has been pointed out by counsel for Mr. Akbar, the transactions with Cobussen did not start until after the structure had been established, and they could not have been the reason for it.

It follows from my finding that Mrs. Mumtaz did not fund the purchase that the only other possible source of that money was Mr. Akbar. He has not identified any other benefactor who may have helped him. I therefore find that Mr. Akbar supplied the funds for the purchase because if anyone else had done so they would inevitably have sought some interest in the Property, and would probably now be before the court claiming that interest. The truth is that he has been in sole control of it throughout which generates a strong inference that he paid for it, in the absence of any credible evidence to the contrary. I find that he supplied part of the purchase price, and guaranteed the mortgage of the rest and that he has arranged for the payment of all outgoings through Legacy. Legacy has no means of repaying these sums and their appearance in its books as “loans” is wholly unreal.

It also follows from my finding that Mrs. Mumtaz never acquired any beneficial interest in the Property. She did not acquire the legal title either, since that was conveyed to Legacy a company in which she was never a shareholder. It appears from the 2009 deed of Termination Receipt Release Discharge and Indemnity at [510] that the assets of the 2003 Trust were the shareholdings in Legacy and Shantaris, see [514]. It must have been Buchanan Limited, as shareholder in 2003/04, which caused its share in Legacy to be vested in the Trust but who caused that to happen is not clear from the documents. The case advanced by Mr. Akbar is that Mrs. Mumtaz in some way caused this to happen, and caused the share to be vested in EFG as original trustee of the Garden Trust in 2009, but I have rejected that case. This supports my finding that the true purpose of the creation of the structure by which the Property was held is unknown.

I also find that on the evidence in this case EFG, and later Equiom, accepted Mr. Akbar’s instructions and acted on them which meant that he was not only the ultimate beneficial owner of Legacy but also in sole effective control of it. Whatever may have been the purpose of this structure and whatever the individuals employed by

I do not find it necessary or desirable to set out the law at any length. I have been helpfully supplied with a list of legal materials running to 49 items, extending over 1,821 pages. Of those, the judgment of Lord Sumption JSC at paragraphs [43], [47], and especially [52] in Prest v. Prestodel Resources Ltd [2013] 2 AC 415 is of particular significance.

“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.”

That was specifically said in the matrimonial context, but contains a statement of principle, which is that the issue before me will be resolved by a careful analysis of the facts, which I have attempted above. I am asked to make declarations that Mr. Akbar is the ultimate beneficial owner of Legacy, and/or that the legal title to the Property is held by Legacy on a resulting or as nominee for Mr. Akbar.

In resolving these issues, I have found the way in which Mr. Robin Dicker QC, sitting as a Deputy High Court Judge dealt with very similar issues in NRC Holding Limited v. Anatoly Danilitiskiy and others [2017] EWHC 1431 (Ch) particularly helpful. The passage of his judgment dealing with the position in that case at the date of the acquisition of the property at [37]-[50] sets out the position very clearly. I gratefully

At his paragraph [39] Mr. Dicker lists the factors which led him to make a finding that the beneficial interest in the property which he was dealing with was held on a resulting trust

“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 them to 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.”

All of these factors are of equal weight in the present case.

I have found that the intention of Mr. Akbar when he funded the purchase of the Property by contributing the deposit and guaranteeing and making Legacy’s payments under the mortgages was that he, and no-one else, should be the ultimate beneficial owner of the Property and of the share in the company, Legacy, into which the legal title was conveyed for reasons which he has never explained. In those circumstances,

I think it unnecessary to set out the parties’ rival submissions on the law. In the end, the issue is one of fact.

For these reasons I grant the declarations sought by Cobussen and order that the interim charging order is made final.

My previous experience of this case suggests that it is not likely that there will be an agreed Order consequent upon this finding. Should that turn out to be right, the parties must submit a draft order which includes their rival positions and written submissions. I will then consider whether to deal with any issues on the papers to hold a hearing.