BL-2023-000501 - [2025] EWHC 2334 (Ch)

Fecha: 19-Sep-2025

The question arising in the present claim

The question arising in the present claim

65.

Despite the width of the factual background relied on by the parties, there is a single principal question arising (with subsequent questions in the event that it is answered in the positive). This is whether Mr Anisimov was the settlor of an express bare trust in respect of the Payment for the benefit of Mr Stein, of which trust Mr Jaffe alone or Mr Jaffe together with Pumula were the trustees. Paragraph 17 of the amended particulars of claim pleads that the relevant terms of the trust were the following:

17.1

The Defendant was the sole trustee of the Trust and Pumula was controlled by the Defendant and/or authorised to and did act as nominee of the Defendant. Alternatively, the Defendant and Pumula were both trustees.

17.2

The subject matter of the Trust was the Payment and the Trust was constituted by the receipt of the Payment by Pumula.

17.3

The sole beneficiary of the Trust was the Claimant.

17.4

The Trust was a bare trust pursuant to which the Defendant was obliged to simply inform the Claimant that the Payment had been received and thereafter to cause the Payment to be transferred in full and without deduction on to the Claimant.’

66.

The claimant’s primary case is that Mr Jaffe was the sole trustee of the express bare trust alleged to have been created by Mr Anisimov, with Mr Jaffe being constituted as trustee upon receipt of the Payment by Pumula on the footing that Pumula was his nominee and also controlled by him. The alternative case is that the intended number of trustees expanded after 21 June 2012 when the arrangement between Dryden and Pumula was put in place.

67.

The statements of case proceed on the assumption that English law applies to all material questions. The parties were agreed that I should proceed on the basis that, whatever the putative proper law of the trust that is alleged to have been created, it is to be assumed to be the same as English law.

68.

The test as to when an express trust is created in English law was set out thus by Aikens LJ in Williams v Central Bank of Nigeria [2013] EWCA Civ 785 at [37] (cited in the current edition of Underhill & Hayton, at 10.1):

‘37. Put very generally, in English law an express trust is created when a person, (the settlor), directs that certain identified property (the trust property) will be held either by him or others (as trustees) under a legal obligation which binds the trustees to deal with that property, which is owned by them as a separate fund, for the benefit of another (the beneficiary) who has an equitable proprietary interest in the trust property and its fruits from the moment that the trust is created. (See Underhill & Hayton: Law of Trusts and Trustees (18th ed 2010) at para 1.1 and 3.1. There are, of course, other ways of creating express trusts with which we are not concerned.) Thus, if it is intended that a document is to create an express trust, it is sufficient that it is demonstrated with reasonable certainty:

(a)

there is an intent to create a trust;

(b)

that the trust property is intended to be kept separately from other property of the trustee;

(c)

the identity of the trust property;

(d)

the person(s) intended to be beneficiary(ies); and

(e)

the purpose of the trust and that it is administratively workable. (Ibid. para 7.1.)’

69.

The editors of Underhill & Hayton go on to state the uncontroversial requirement that the trust must be for the benefit of persons so that some person has standing to enforce the trust, if it is non-charitable. They then point out that whether an intention to create a trust is sufficiently evinced is in each case a question of objective contextual interpretation; the question most often arises in relation to the construction of written words, but not always so. There must, however, be an external manifestation of the intention to create a trust. So, as the editors say at 10.2:

‘Equity will not take cognisance of a private unexpressed intention to create a trust. It is unnecessary that the settlor's intention to do so be communicated to the beneficiary at the time the trust is created, but a failure to communicate the intention to create a trust to any beneficiary may raise a strong inference that the settlor did not intend to create one. The important point is that the settlor's intentions to create a trust must be externally manifested somehow, eg by saying something to someone else or writing them down in a form that is discoverable by others later. Otherwise, the intended beneficiary and/or trustee cannot decide whether to accept or disclaim the settlor's bounty and/or the office of trusteeship, nor will third parties who come into contact with the relevant assets be able to tell whether they are subject to a trust or not.’

70.

Mr Page submits that there was certainty of intention, by dint of Mr Anisimov’s words on 2 June 2012 and by his conduct on 25 June 2012, when he caused the Dryden/Pumula loan document to be executed. He relies on a series of other propositions taken from authority:

(a)

The court is concerned with discerning the intention of the settlor. The intention of the trustee is irrelevant: High Commissioner for Pakistan in the United Kingdom v Prince Muffakham Jah [2020] Ch 421 at [244].

(b)

The use by the settlor of the word ‘trust’ is not required. The question for the court is whether in substance a sufficient intention to create a trust has been manifested: Re Kayford (in liquidation) [1975] 1 WLR 279 at 282, Megarry J.

(c)

There must be an intention to create a trust, and it is an objective question. The arrangements entered into must objectively have the effect in law of creating a trust: Challinor v Juliet Bellis & Co [2015] EWCA Civ 59 at [57], [59], citing Twinsectra v Yardley [2002] 2 AC 164 at [71], Briggs LJ.

71.

In the High Commissioner for Pakistan case, Marcus Smith J made the following comment about the three certainties, which I consider relevant in the present circumstances:

‘245. Although conceptually speaking the three certainties are separate, they can seldom in practice be segregated. In the present case, assuming there was an intention to create a trust, there can be little doubt as to the second and third certainties. …. [emphasis in original]’

72.

Precisely the same comment can be made in this case. The subject matter of the alleged trust is the Payment (or, perhaps, such of the Payment as was not used to defray Mr Stein’s expenses), and the beneficiary is Mr Stein. The trust would also be a bare trust, being a relationship where (i) the nominee or bare trustee holds property on behalf of a (usually single) beneficial owner; (ii) the nominee or bare trustee has no active powers of investment, other than to deal with the relevant asset as instructed by the beneficial owner; and (iii) save where it would be illegal to do so, the nominee or bare trustee must deal with the asset as instructed by the beneficial owner: Kazhakhstan Kagazy plc v Zhunus [2021] EWHC 3462 (Comm) at [273].

73.

Mr Page also submits that the intention to create a trust does not need to be evinced in words, and that a declaration can be established by words or conduct, so long as it amounts to clear evidence of the requisite intention. For that proposition, he cites Paul v Constance [1977] 1 WLR 527 at 532. I note that, in Challinor v Bellis, Briggs LJ said at [59] that a person creates a trust by their words or conduct (emphasis added), and their subjective intentions are irrelevant. In Paul v Constance, it was held that when an unmarried couple placed money in the name of one of them, who frequently said to the other that ‘the money is as much yours as mine’, the use of the words was itself a declaration of trust. It would be an unusual case where a trust was declared with no words of any kind being used, and it is not Mr Stein’s case that this is such a case: he relies on what was agreed with Mr Anisimov at the meeting on 2 June 2012 at which many words were no doubt exchanged, followed by the conduct of causing the Payment to be made to a company either controlled in fact by or connected to Mr Jaffe.

74.

As I am reminded, the court has to consider separately what was said by the alleged settlor, and whether there was an intention to create a trust. As Arnold LJ said in Gill v Thind [2023] 1 WLR 2837 at [57]-[58]:

‘57. … in the case of an oral declaration, it may well not be possible for the court to make a finding as to the exact words used by B, and so the court may only be able to make a finding as to their gist. In those circumstances, there would be nothing wrong in the court running the two questions together and asking whether, on the balance of probabilities, B said words that were such as to demonstrate an intention to declare a trust.

58.

Turning to the standard of proof, it will be noted that I have referred to the balance of probabilities and have not used expressions such as “clear evidence”. Quasi-criminal (eg committal) proceedings aside, the standard of proof in civil cases is always the balance of probabilities: In re B (Children) (Care Proceedings: Standard of Proof) [2009] AC 11. No different standard of proof applies to proving an oral declaration of trust. I do not think that Scarman LJ [i.e. in Paul v Constance] meant to say anything different when, during the course of an extempore judgment, he accepted counsel’s submission that there must be clear evidence of an intention to create a trust. Rather, I consider that what he meant was that the words and conduct relied upon must demonstrate a sufficiently clear intention to create a trust.’

75.

On the facts of the present case, and with reference to how the Payment was applied by Mr Jaffe, it is also worth bearing in mind how Millett LJ stated the requirement for the trust property not to be at the free disposal of the transferee or trustee: Paragon Finance plc v Thakerar [1999] 1 All ER 400 at 416.

‘It is fundamental to the existence of a trust that the trustee is bound to keep the trust property separate from his own and apply it exclusively for the benefit of his beneficiary. Any right on the part of the defendant to mix the money which he received with his own and use it for his own cash flow would be inconsistent with the existence of a trust.’

76.

A point which I raised with counsel more than once was whether the facts might tend to show that there had been a Quistclose trust arising in relation to the Payment once it had been transferred to Pumula. Mr Jaffe’s version of events might be thought to point to such an arrangement: he indicates that the money was paid to Pumula to be held pending a suitable structure being put in place, and that Mr Stein’s entitlement to the moneys would not arise until that had been done. He was also unsure at first, on his case, whether he (or Pumula) was entitled to spend the money for his own purposes. This would appear to be on one view consistent with a Quistclose trust, i.e. where the recipient holds the moneys on resulting trust for the transferor, subject to a power to apply them with an intended purpose: see Twinsectra at [13], Lord Hoffman.

77.

Lord Millett made the following statement in Twinsectra, in the context of Quistclose trusts, at [73]-[74]:

‘73. A Quistclose trust does not necessarily arise merely because money is paid for a particular purpose. A lender will often inquire into the purpose for which a loan is sought in order to decide whether he would be justified in making it. He may be said to lend the money for the purpose in question, but this is not enough to create a trust; once lent the money is at the free disposal of the borrower. Similarly payments in advance for goods or services are paid for a particular purpose, but such payments do not ordinarily create a trust. The money is intended to be at the free disposal of the supplier and may be used as part of his cashflow. Commercial life would be impossible if this were not the case.

74.

The question in every case is whether the parties intended the money to be at the free disposal of the recipient: In re Goldcorp Exchange Ltd[1995] 1 AC 74, 100’.

78.

This mirrors what he had said in Paragon Finance, and the question stated at [74] may arise whenever it is disputed whether a trust has arisen in a commercial context. If the money represented by the Payment was, as Mr Jaffe contends, beneficially owned by Pumula, then it was at Pumula’s free disposal and there can have been no trust over it.

79.

Both parties, for obvious reasons, eschew any reliance on a Quistclose trust in the present case. Mr Anisimov would have been the beneficiary under such a trust. From the claimant’s perspective, it would defeat his claim that he was beneficially entitled to the Payment under a bare trust as soon as the money was transferred to Pumula. For the defendant, the existence of such a trust would mean that any use by him of the Payment without Mr Anisimov’s consent or beyond the purposes for which it was held was a breach of trust as against Mr Anisimov, with whom he is now in dispute in relation to other matters.