Case No. EWFC-75

This is how counsel for the wife put his client’s case in relation to the trust claims and the financial remedy claims in his written opening:•The legal basis on which C [i.e. the wife] seeks her claim for a declaration against the Defendants in respect of the properties and the business are as follows:•Section 24 (1) (b) of the Matrimonial Causes Act 1973, it is within the jurisdiction of the Judge in Family proceedings to decide what are the rights and interest of all parties, not only of the intervenor, but of the husband and wife respectfully in the property which a party asserts the other party has. •Tebbutt V Haynes [1981] 2 A11 ER 238 per Lord Denning MR at 241 [counsel then cited the relevant dicta about the court’s ability to deal with trust issues in financial remedy proceedings] •Jones v Kernott [2011] UKSC 53, [2012] 1 FLR 45: ‘To displace that presumption the court will look for proof of a tacit understanding that beneficial ownership is different from legal ownership, looking at all the evidence holistically and examining the whole course of the parties’ conduct in relation to the property. All of the Justices in Jones v Kernott accepted that where a tacit agreement could not be found by a process of inference the court could impute to the parties a fair agreement which they never in fact made but which they should be taken as having made. In this case the court was completely satisfied that the husband’s brother formed no common intention with either the husband or his father that beneficial ownership would be shared’•C cannot point to any express trust as it is unlikely the parties will disclose the same or even confirm the existence of the same, however C will invite the court draw an inference of express agreement exists but has not been disclosed. •C will rely on the principle of implied trusts namely:i)A resulting trust which arises by way of implication in circumstances where the property is purchased in the name of the legal owner with the money of the beneficial owner,ii)A constructive trust and the court will be invited to infer from the evidence and the course of dealing between the parties that there were common intention that the legal owners hold D1’s beneficial shares in the respective assets and that the course of dealing and the bank statements all points out to the fact that the parties acted throughout in their dealings which is consistent with the fact that it was D1 who was the beneficiary of the assets and enjoyed the fruits of those assets. •C says there is sufficient contemporaneous documents and the dealings of the Ds points to the fact that D1 clearly in conjunction with the other Defendants placed assets in different names so as to conceal assets which were created during the marriage and properly form part of the matrimonial assets. •C says the court will be invited to infer by the course of dealings that the proportions of the assets which are in the names of the other Defendants should be taken as matrimonial assets and D1 purposely concealed the assets knowing that once the C finds out about his relationship with D7 that parties are likely to divorce, and he took pre-emptive actions to conceal his interest in the asserts as identified. •It is settled law that C can expect to receive the higher of a claim calculated by reference to needs or a claim calculated by application of the sharing principle (Hart v Hart [2017] EWCA Civ 1306).•This is a needs case. The primary need is one of housing and income for C who is the primary carer of the parties’ children and there one child who has profound needs. 146.Regrettably, I think that it is extremely disappointing that the points that were made so clearly by the Respondent parties at the hearing in April about the applicable trust principles were not absorbed more carefully on behalf of the wife. The above passage shows a confusion of analysis between the law relating to constructive trusts and that relating to resulting trusts. The very short passage, cited as coming from Jones v Kernott (which it does not), is not a complete analysis of the law. No further arguments about the applicable law were advanced on behalf of the claimant. I have no bundle of authorities. No mention was made by the wife’s counsel of Laskar v Laskar [2008] EWCA Civ 347 or Marr v Collie [2017] UKPC 17. No explanation has ever been given as to why the wife asserts the beneficial interests that she does.147.The principles emanating from Laskar and Marr v Collie can be taken from this passage in paragraph 49 of the judgment in Marr v Collie: ‘The Board does not consider, therefore, that Laskar is authority for the proposition that the principle in Stack v Dowden (that a conveyance into joint names indicates legal and beneficial joint tenancy unless the contrary is proved) applies only in "the domestic consumer context". Where a property is bought in the joint names of a cohabiting couple, even if that is as an investment, it does not follow inexorably that the "resulting trust solution" must provide the inevitable answer as to how its beneficial ownership is to be determined. Lord Neuberger did not intend to draw a strict line of demarcation between, on the one hand, the purchase of a family home and, on the other, the acquisition of a so-called investment property in whatever circumstances that took place. It is entirely conceivable that partners in a relationship would buy, as an investment, property which is conveyed into their joint names with the intention that the beneficial ownership should be shared equally between them, even though they contributed in different shares to the purchase. Where there is evidence to support such a conclusion, it would be both illogical and wrong to impose the resulting trust solution on the subsequent distribution of the property.’148.In paragraph 17 of Laskar, Lord Neuberger had said: ‘In other words this was a purchase which, at least primarily, was not in "the domestic consumer context" but in a commercial context. To my mind it would not be right to apply the reasoning in Stack v Dowden to such a case as this, where the parties primarily purchased the property as an investment for rental income and capital appreciation, even where their relationship is a familial one.’149.On behalf of the Respondents it is argued in relation to 50-52 High Street that this was an investment and commercial purchase. The property was bought with the intention that it would provide the restaurant with its trading premises. A commercial rent was payable. The husband and Rupia Begum (R2) were not a cohabiting couple and their finances and living arrangements were entirely separate. The wife’s representatives have never responded to the contentions based on those authorities.150.In a case that is as highly litigious as this and where there is such a conspicuous lack of focus on legal principles, the boundaries of achievability within the evidence and the incidence of costs, I am extremely reluctant to make a decision that might be taken as being based on any controversial statement of legal principles.151.My approach is this, having considered the evidence, which I will now set out:i)There is no basis for suggesting that there is an express declaration of trust in relation to either 50-52 High Street or 4 Morland Rd. None is suggested. ii)There is no evidence that would support a finding of a resulting trust in relation to 50-52 High Street. The husband has not paid anything to its purchase or to the mortgage. On the basis of the passage from the case law that I have set out above, that should be the end of the wife’s contentions about 50-52 High Street. I explain this further, by reference to the evidence relating to 50-52 High Street, below.iii)There is no evidence that would support a finding that of a resulting trust in relation to 4 Morland Rd, for the same reasons. I have explained that already. iv)There is no basis for contending that there is an express agreement, arrangement or understanding that the husband should have a share in either property. Quite the opposite (and, further, no such agreement, etc is suggested). On the evidence, it is clear that the three legal owners involved (R2, R7 and R8) intended that they should own their respective properties.v)There is no basis for inferring or imputing that there was a constructive trust that might affect either property, even if the issues relating to 50-52 High Street are not confined to resulting trust principles. There is no evidence at all that it has been the husband who has enjoyed the ‘fruits’ of those assets. Rent has been paid for 50-52 High St by the business that is operated from it. The primary benefits of 4 Morland Rd have been enjoyed by the two owners (now the single owner, R7).152.I have therefore examined the full range of trust principles that, conceivably, might apply and I have concluded that none of them assist the wife in her claims. In my opinion the wife’s trust claims have been unprincipled and have stuck rigidly to the contentions made at the outset of these proceedings without there being any sufficient analysis of the evidence as it is has come in or the law applicable to it. 153.50-52 High Street, Burnham-on-Sea – I will now look in detail at the evidence relating to this property. 154.The legal title is vested in the sole name of the Second Respondent, Rupia Begum. It has been valued by Tamlyns at £630,000 ‘subject to the lease to Rexvilla’. I raised with the parties that the property is no longer subject to a lease to Rexvilla but it was not thought that would make any difference. 155.At C3 the wife says that, in 2001, the husband went into partnership with Shaju Miah, Ashid Uddin (his maternal uncle) and Atiq Uddin and opened a restaurant in the name of Chandni Indian Restaurant. When the relationship between the three of them broke down, the husband bought out the other two. The wife says that the restaurant was profitable and the husband decided to move the business next door to 50-52 High Street, calling it the New Chandni Restaurant. She says that he went into business with his uncle, Ashid Uddin, again. She says that the husband told her that he had bought the property on the basis that the husband had a 75% share and Ashid Uddin had 25% [C3]. She says that it only came to her attention in the divorce proceedings that the property had been bought in the name of R2. 156.By his statement at D2 the husband denies that he is the owner of the restaurant or that he has said that he is. At D7 he says that he did go into partnership with Shaju Miah but not with Ashid Uddin or Atiq Uddin. There is a statement from Ashid Uddin, agreeing with the husband, at D15. That partnership did run the Chandni restaurant at 54 High St, Burnham, he says, but it made no money. After working elsewhere for a period, the husband says, he then joined his brother, Almas, as an employee at the New Chandni Restaurant [D7]. He says that he did not state that he owned 75% of the business or that his uncle had 25% of it; Ashid Uddin agrees with the husband’s evidence [D15]. He says that he has no idea how R2 and her aunt (his sister in law) bought 50-52 High Street.157.In my opinion, the wife has not differentiated sufficiently between the business that used to be operated at 54 High Street and the current business. Further, she has not differentiated between: a) the ownership of the property; b) the ownership of the companies that, nominally, ran the business and c) the control of the business. She has assumed that the arrangements for the previous business were transferred to the new business. On balance I do not accept that the husband told her that he was a 75% owner of the new business, whatever may have been said about the business at Number 54. Further, she has not analysed with sufficient care the documents that have been produced. Those documents show that Rupia Begum (and, initially her aunt, Easmin) bought the property, the business was run, nominally, by Rexvilla Ltd and then Bluebird Restaurant Ltd but that the husband and his two brothers Enu (initially) and Almas have always been the controlling force behind the business. 158.In her first statement at D21, the Second Respondent gives an account of how she says the property was bought. By her fourth statement, she gives more detail and says:i)50-52 High Street was bought, initially by her and her aunt, Easmin Nilufa Uddin (Almas’s former wife), in 2008 for £450,000. The Office Copy of the register of title in relation to this purchase is at L409 and shows the purchase by R2 and the aunt for £450,000 being registered, with them having title absolute, on 3rd October 2008ii)The purchase price was funded by a NatWest loan of £344,250 (she exhibits a copy of the loan agreement, dated 30th April 2008). The charge was registered against the property [L410].iii)The balance of the purchase price was provided in equal shares by her and her aunt. The husband did not pay anything towards the purchase. R2 says that she provided her share of the purchase (£65,000) from her own savings and from a loan of £54,000 from another aunt, Sultana Akhter; she exhibits copies of the cheques to her statement [G21]. She says that she paid the sum of £65,000, as her share of the purchase price, to her aunt and her aunt then paid that sum and the aunt’s own share of the purchase price to the solicitors.159.In her second witness statement [D21], Rupia Begum says that her aunt, Easmin, experienced difficulties in her marriage to her husband (Almas). She says that she wanted to ‘steer clear’ of their issues and that she ‘wanted to find a way that [she] could become the sole owner’ of 50-52 High Street’. She says [D21]: ‘I had an apartment in Bangladesh which is better described as 125 Kajol Shah West, Lala Digir Par, Sylhet, Bangladesh. This apartment was one that I had been given by my father. I hardly visit Bangladesh as I have very few relatives there. I had no need for this apartment, which has a cost to maintain and keep secure. It was a 3 bedroom property in a prime location in the town and was worth about £60,000 pounds in sterling value. Easmin’s Husband has family in Bangladesh and we did a swap where I received the equity in the subject property and he took the apartment. I deny that profits have been coming into my account. I have received rental income from my tenant and in turn my mortgage gets paid. It is correct … that I am not part of the restaurant. I am a working professional. It is an investment for me.’160.The TR1 in relation to this transfer of the aunt’s share to R2 is at L97. It records that the aunt was also released from the NatWest charge [L98]. The transfer took place in 2014 (the copy of the TRI is not dated but the property register records R2 as having become the registered proprietor on 22.8.2014 – L170). The official copy of the register of title in the sole name of R2 at L170 records that R2 is the sole proprietor and that the property remains subject to a NatWest charge, dated 11th August 2014. 161.The conveyancing file in relation to the 2014 transaction has been disclosed. Holley and Steer were the solicitors who were instructed to act in the conveyancing procedures to effect the transfer of the property to R2. Because Holley and Steer were not on the NatWest panel of solicitors, they were not able to act in relation to the release of the NatWest charge and so Ash Clifford, solicitors, did so [L89].162.There is an Official Copy of the register of the leasehold interest in the property that was held by Rexvilla Ltd as from 11th August 2014 at L177. It states that on 11th August 2014 a lease or underlease was created by R2 in favour of Rexvilla Limited for a period of 15 years. At L210 there is a deed of surrender, dated 6th November 2019, by which Rexvilla Limited surrendered the lease of the property to R2 for the sum of £1. A lease was then created over the property in favour of R3 (Bluebird Restaurant Ltd) on 7th November 2019 for the period of six years [L236]. The rent is £40,000 p.a. [L238].163.In her statement at G45 the wife says: ‘during our marriage [the husband] has informed me that he purchased a property, namely 50-52 High Street….The First Respondent confirmed that he had purchased the First Property and was very pleased with his business venture. The First Respondent further confirmed that he held 75% share and his business partner Oshid Uddin held 25% in the Property. It came to my attention later at the divorce proceedings that the First Property was purchased in the name of the First Respondent’s niece who is the Second Respondent. The Second Respondent was a student at the time of the purchase and could not in any way purchase such a large property. I believe the Frist Respondent used the Second Respondent’s name to conceal his assets and earnings as our relationship was deteriorating and the First Respondent’s plan by then was to marry the Seventh Respondent.’ That, of course, is not what she said in evidence. 164.There is a letter from Holley and Steer, the conveyancing solicitors, at L411. Amongst other points, it states:i)It has been the solicitors’ understanding that ‘throughout the period, the restaurant that is operated from the site has been managed and continues to be managed by Mrs Begum (R2) and Ms Easmin Uddin’s (i.e. the aunt’s) brother, Alim Uddin (i.e. H)’.ii)In 2014, the husband contacted them to say that Easmin wished to ‘divest herself of her interest in the premises’ iii)The solicitor met with the aunt, Easmin Uddin in 2014 but that ‘at her request the principal conduit for the instructions [in 2014] was Alim Uddin himself, with a request that correspondence be kept to a minimum.’iv)The legal costs of the transactions in 2014 were met by Rexvilla Ltd of which the director was an Enu Miah.v)In the autumn of 2019 the husband, ‘in his capacity as general manager for the Chandni Restaurant, advised that a decision had been taken to wind up the affairs of Rexvilla Ltd, the current leaseholder.’ That led to the surrender of the lease to Rexvilla and the new lease to Bluebird Restaurant Ltd of which R4 is the ‘principal shareholder and the person with significant control.’vi)R4’s English was not very good at the time and so the arrangements were overseen by the husband ‘as general manager of the restaurant.’ All costs and disbursements of the arrangement were met by ‘the business’.165.This letter is helpful in that it adds to the evidence that the property was owned by Rupia Begum and, initially, Easmin but that the control of the business lay with the Uddin brothers. Given that Rupia Begum lives and works as a teacher in London and the Uddin brothers have the experience and background in the restaurant business which they have built up over the years, that might be regarded as hardly surprising. 166.