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Home > Judgments > 2015 archive

Arif v Anwar [2015] EWHC 124 (Fam)

A case involving the claim of a beneficial interest in a property by a third party and further sums owed to that third party, against a backdrop of a voluntary bankruptcy and financial remedy proceedings

This judgment concerned the trial of two preliminary issues:

1. The issue of a beneficial interest in a property; and
2. The "dealings" issue.

By an order dated 21 March 2013 (reported at [2013] EWHC 624 (Fam) Norris J had directed that these issues should be determined in matrimonial proceedings.

Background
W petitioned for divorce on 11th June 2011. H was made bankrupt on his own petition on 6th October 2011.

H was living in the 8 bedroomed FMH at 68a Burkes Road, Beaconsfield ("the Property"), with his son (Raziz Rehan, the second respondent), his son's wife and their child.  The property was valued at £1.75m. W was living in a small rented flat with the child of the marriage. Raziz was claiming a 50% interest in the property as well as monies owed to him by H as the result of certain dealings, the result of which claims would be to reduce the size of any surplus in the bankruptcy and therefore the size of any surplus in the estate sufficient to make some provision for W.

The Beneficial Interest Issue
The Judge commented that standard disclosure was ordered on the Beneficial interest issue was not conducted with care by H or Raziz, with much disclosure missing or being produced very late. The oral evidence of all parties was significantly coloured by what that party saw as being in his or her best interests. H and Raziz were determined that W should not receive anything.  The Judge therefore took a cautious approach to resolving factual issues.

The Property was transferred from H to W in 2001 and she executed a declaration of trust in 2003 stating that she held the Property in trust for H, agreeing that she would at his request and cost transfer it to him. In March 2011 H requested that W transfer the Property to him, presenting a TR1 transferring it to H and Raziz, "on trust for [H]". W refused to sign and petitioned for divorce.

In 2006, Raziz was said to have contributed £500,000 towards the renovation of the Property in return for a 50% share. There were several different but broadly consistent accounts given which were also said by the judge to be consistently vague, but H also gave two inconsistent accounts of this in that he also contemplated engineering a charging order or creating a secured loan. W disagreed.

There were two documents that arose in disclosure which caused the Judge some concern: the '2001 Declaration' which was prepared on H's business notepaper, recording that H's late first wife held the Property on trust for H and that H wished to gift the beneficial interest to Raziz when he reached 21, and the '2006 Declaration' recording that H was gifting his entire beneficial interest in the Property to Raziz and, H and W's son, in equal shares.

The Judge made the following findings:

1.  The Judge found that the 2001 Declaration was ineffective, and therefore found that the 2003 Declaration (signed by W) was correct according to its terms.

2. On the question of whether an agreement was made by H and Raziz in 2006 that Raziz should have a half share, the Judge stated that if an agreement is to have legal effect, it must survive appropriate scrutiny which, where the parties involved are disagreeing, can usually be effected within a trial. However, where the parties are in agreement and it is being challenged from the outside, the general policy is that interests in land should follow the necessary formalities. On the basis that H and Raziz had a common desire to preserve for themselves what they could, the Judge could not place a great deal of reliance on their evidence. He therefore found that in mid-2006 there was an agreement, but the precise position of the ownership would be sorted out in the future.

3. The Judge therefore considered whether there was an alternative of entitlement by operation of a proprietary estoppel available and found that there was.

4. As to the question of Raziz's contribution, the Judge considered the evidence and found that on £280,000 of it could be attributed to Raziz.

5. On that basis, he awarded Raziz a 25% share in the Property. The need to make estimates on the figures made it inappropriate to attempt precise accounting.

6. The 2006 Declaration was therefore found not to effect some settlement of H's retained interest in the property.

The Dealings Issue
Raziz also claimed that H owed him further sums from the repayment of borrowings on a further property by Raziz when H was liable for such borrowings. Since the borrowings appeared to have been properly applied originally, this argument would only succeed if Raziz could demonstrate that those borrowings had already been paid off by him, and that the remaining borrowings represented money taken for H's personal benefit.

At the OS v DS hearing the Judge had therefore made careful directions for the examination of various transactions. Unfortunately, this was less useful than hoped due to the limited and late disclosure, and also due to the fact that each and every transaction would have to be considered. A hearing of the issue was not the appropriate vehicle within which to conduct a trust account.
However, the Judge did proceed to make some findings and found that there was no claim against H.

Case summary by Kyra Cornwall, barrister, 1 Hare Court


______________


Case No: FD11F00482
Neutral Citation Number:
[2015] EWHC 124 (Fam)

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Royal Courts of Justice
The Rolls Building
Fetter Lane
EC4A 1NL

Date: 26/01/2015

Before :

MR JUSTICE NORRIS
- - - - - - - - - - - - - - - - - - - - -

Between :

Sofia Arif Applicant
- and - 
Arif Anwar 1st Respondent
-and-
Raziz Rehan 2nd Respondent
- - - - - - - - - - - - - - - - - - - - -

Duncan Brooks and Marlene Cayoun (instructed by Hughes Fowler Carruthers Ltd) for Sofia Arif
Valentine Le Grice QC
(instructed by Zaks Solicitors) for Arif Anwar Zar
Penelope Reed QC
and Nicholas Fairbank (instructed by Saints Solicitors) for the Raziz Rehan
Messrs Charles Russell Speechlys attended on behalf of the Trustees in bankruptcy of Arif Anwar

Hearing dates: 4-7 November and 18 December 2013, 14 March and 19-20 June 2014
- - - - - - - - - - - - - - - - - - - - -

Judgment
Mr Justice Norris :
1. This judgment arises from the trial of two preliminary issues ("the Beneficial Interest Issue" and "the Dealings Issue") which I directed by order dated 21 March 2013 should be determined in matrimonial proceedings. My judgment at [2013] EWHC 624 (Fam) explains why I so directed. The oral evidence and argument requiring consideration took 10 days spread over an extended period and involved analysis of sporadically disclosed and incomplete (i) correspondence (ii) legal files and (iii) primary accounting material, going back to 1999 and some of it only produced days before closing speeches. I am grateful for the help Counsel gave me.

2. 68a Burkes Road, Beaconsfield ("the Property") is now an 8-bedroom house with 8 bathrooms (valued at £1.75 million) and is occupied by Arif Anwar ("the Husband") and Raziz Rehan ("Raziz"), his son by a first marriage (together with the wife and child of Raziz). It was formerly also occupied by Sofia Arif ("the Wife"): but she now lives in a small rented flat with the child of the marriage. The Wife presented a petition for divorce on 11 June 2011. The Husband was made bankrupt upon his own petition on 6 October 2011. A key question is whether there is sufficient in the bankruptcy estate for some modest financial provision to be made for the Wife and for the child of the marriage. Raziz makes a claim to a 50% share in the Property, which would reduce the size of the bankruptcy estate. Raziz also claims that he is owed money as the result of certain dealings: and the effect of those claims would reduce the size of any surplus in the bankruptcy.

3. In relation to the Beneficial Interest Issue I directed that it be determined whether in the events which have happened Raziz was (at the commencement of the divorce proceedings) the beneficial owner of a 50% share in the Property or was entitled to some other (and if so, what) interest. I directed that he should be the claimant in that issue, and I gave directions for standard disclosure.

4. Raziz submitted Points of Claim. The Husband submitted no statement of case, but gave evidence in support of Raziz. The Wife responded to Raziz' statement of case. Standard disclosure was not conducted by Raziz or the Husband with care and (despite the stringent terms of the Order of Eleanor King J dated 6 November 2002 and the conduct by me of an OS v DS hearing) it became depressingly evident in the course of the oral evidence that further important documents existed (beyond those supportive of the Husband's case that had remarkably survived the water damage in consequence of which so many other documents had perished).

5. This is not a case in which I can treat the oral evidence as the primary source of reliable material. The recollection of each party is significantly coloured by what each sees as his or her best interests. In particular the Husband and Raziz struck me as determined to see that (whatever arrangements were made for the youngest child) the Wife should not receive even modest provision out of the bankruptcy estate or other free assets of the Husband: I can think of no other reason why my pleas that the costs of determining the legal issues (with both the Husband and Raziz engaging Leading Counsel) must far outweigh satisfactory modest provision were disregarded. I therefore propose to look at the way the claim by the Husband and Raziz that the latter owns 50% of the Property has been advanced, and to look at what the surviving documents say before conducting an analysis.

6. The Wife is the registered proprietor of the Property as a result of a transfer dated 26 November 2001 ("the 2001 Transfer"). Two years later to the day (on 26 November 2003) she executed a Declaration of Trust ("the 2003 Declaration") under which she declared that she held the Property in trust for the Husband and agreed that she would at his request and cost transfer the Property to such person or persons as he should direct or appoint. (I should note that according to the Office Copy Entries the Transfer dated 26 November 2001 was not in fact registered until 3 December 2003: the reason for the delay in registration and in the declaration of the beneficial interests was not addressed in the evidence).  

7. On 7 March 2011 the Husband as beneficiary under that Declaration of Trust requested the Wife to transfer the Property, and he presented a form TR1 for signature by her.  In the draft transfer the Husband "as beneficial owner of this property" directed the Wife to transfer the Property to the intended transferees, who were the Husband and Raziz. The draft transfer contained a declaration by the transferees that the Husband and Raziz were "to hold the property on trust for [the Husband]".

8. The Wife refused to sign the draft transfer, and shortly thereafter presented the divorce petition.

9. In his Form E dated 16 August 2011 the Husband described the ownership of the Property in these terms:-

"My wife is holding [the Property] as the registered proprietor under a bare trust instrument that she signed in my favour on 23rd November 2003… For over 20 years, since well before the marriage, I was reluctant to hold the legal title to [the Property] except as a trustee for others, because my role as Chairman of the Trustees of the Imran Khan Cancer Appeal which made me potentially liable for any improper dissipation of the substantial funds… under the charity's control… In 2006 I agreed to share my beneficial ownership of the property equally with my elder son, Raziz, on the basis of which he invested over £500,000 in [the Property]…. By 2006, when Raziz was aged 20, he had accumulated further capital…. and in addition we were concerned that [his house] was not appreciating sufficiently in value. [The Property] needed refurbishment and I therefore suggested to Raziz that he should sell [his house] and use the proceeds and his further capital to invest in a substantial extension and improvement at [the Property] in return for which he and I would come equal beneficial joint owners….Raziz and I did not prepare a new Declaration of Trust to set out our beneficial interests, as it was clearly understood between us that we would be equal beneficial owners and we trusted each other….. As there was already a Declaration of Trust in place in relation to the Property confirming that [the Property] belonged beneficially to me, neither Raziz nor I considered at the time of his investment that anything needed to be reflected on the title at the Land Registry."

10. At a hearing before me it was assumed that this attempt to conceal property from the Husband's potential creditors worked. It was not, for example argued, that the only way that the Husband could genuinely avoid exposure to claims against him arising from his obligations as trustee of the Imran Khan Cancer Appeal was if he genuinely gave away the beneficial interest in the Property (not merely the bare legal title). But it is a clear demonstration that ownership issues involving the Husband are unlikely to be straightforward.

11. In the light of the contents of the Husband's Form E, on 6 November 2012 Mrs Justice Eleanor King directed the Husband to make an affidavit relating to the purported transfer of a beneficial interest in the Property to Raziz setting out, with reference to all the documentation and information upon which the Husband intended to rely, his full case as to that beneficial interest.

12. The heart of his response was in these terms:-

"I was already considering refurbishing [the Property] as it required modernisation and development. The reason for extending the property was that if we all decided to live under one roof then the accommodation would be tight and it would be more helpful to live as two families if there was more floor space available for both my family and Raziz's family. In the circumstances, I asked Raziz to invest his money into [the Property] and the conclusion of our conversation was that he would have a half share in [the Property] provided he paid around £500,000. With hindsight, it is apparent that the actual value at the time in question of the Property was probably more in the region of £750,000 rather than £1 million … on this basis Raziz has paid an extra £128,785 on top of his 50% contribution. [The Wife] was party to these discussions and was well aware of the arrangements I made with Raziz. Her denials of these arrangements today are self-serving."

13. The Husband then explains that from July 2006 until June 2007 Raziz paid a total of £503,785.53 either directly to the builders or to the Husband, confirming that that sum was paid

"… after the time that we both agreed that Raziz would be entitled to and have a half share in [the Property] on the basis that he would pay these monies as and when required by me and/or the monies were to be paid to the builders."

14. Raziz himself had made a claim in correspondence to a 50% share in the Property. His solicitor's letter of the 12 September 2011 addressed to the Wife's representatives said:-

"Between 13 July 2006 and 27 June 2007 [Raziz] made six payments to your client and the Husband totalling £503,785.53. In return [the Husband] agreed to relinquish 50% of his beneficial interest in the Property to [Raziz]."

15. By the Order of the 6 November 2012 Raziz was also ordered to file an affidavit setting out this case in full. His affidavit of 30 January 2013 did so. Raziz says that a property in Holtspur Top Lane Beaconsfield ("Tema House") was bought by the Husband in December 2003 for £545,000, but that it was intended as an investment for Raziz. Raziz says that the purchase price was in effect paid from an account called "Master Raziz Rehan Capital Account". In support of his claim to beneficial ownership he exhibited a Declaration of Trust dated 20 December 2003.

16. Tema House was put on the market in late summer 2006. Raziz says that the decision to sell Tema House was taken because it was not showing a sufficient rate of capital appreciation, and that he was advised to reinvest in "the golden triangle" of central Beaconsfield (which is where the Property is located). He continues:-

"It was at this point that my father suggested that I invest my money into acquiring a half share of [the Property], my current home, which was worth in the region of £1 million at the time, and was in the golden triangle. I readily agreed to this, as the Property was on the most favoured road in town, and could be made large enough to accommodate my needs going forward into the future. We agreed that if I invested around £500,000 into the Property I would acquire a half share in the Property… Indeed it was also a very attractive deal as I knew I could pay my father over a longer period of time due to the inherent informality between father and son. This coincided with his cash flow requirements for the building works….. I thus agreed verbally with my father in mid-2006 to pay him £500,000 for a half share in the Property, to be all paid at most within a year. The money was going to come from the sale proceeds of Tema House and my accrued capital. As the intention was that the money would be used to fund improvements to the Property it was also agreed that I would have substantial input into the intended improvements to the Property…"

17. In the Points of Claim which I directed should be filed by Raziz his case was pleaded in this way:-

"In or around 2006 it was orally agreed between the [Husband] and [Raziz] that [Raziz] would spend £500,000 including the proceeds of sale of Tema House on developing and refurbishing the Property with a view to increasing its size…. [Raziz] would be entitled to a one half share in the Property which was informally valued … at that time at about £800,000 to £1 million….In accordance with the said agreement and acting to his detriment [Raziz] paid a sum of £503,785 towards the development and refurbishment of the Property… Further in reliance upon the agreement and acting to his detriment Raziz personally supervised the building works to the Property and provided specifications for the work is being undertaken…"

What is then claimed is that Raziz acquired a one half beneficial interest by way of constructive trust or alternatively that the Husband is estopped from denying that he is entitled a one half share in the Property, which estoppel is binding both on the trustee in bankruptcy and upon the Wife.

18. These various accounts are broadly consistent, but consistently vague. But the Husband has given two other accounts which are not consistent with them.  I will note these now before resuming the narrative: each refers to a loan having been made (not an interest in the Property having been purchased).

19. First, late disclosure during the course of the hearings revealed that on 19 November 2010 the Husband had written to his professional body seeking advice as to whether he should submit to a County Court judgment. The letter explained the circumstances as these:-

"My wife has threatened to file for divorce against me…. The question of the protection of assets acquired before marriage, including a home that my eldest son has occupied since the age of 10 has come up…My son has a clear equitable interest in the property and in addition has loaned me (unsecured) over £448,000 from my late wife's inheritance … to expand the property from a five bed home into an eight bed home; this he did in order to stay in the home and expand it to accommodate him and his family…. He is uncertain what may happen and clearly wishes to protect his position by securing a charge over the property. I have been advised that he cannot get such a charge unless he gets a charging order, which can only follow a CCJ… Would a CCJ under such circumstances affect my professional standing…?... My house is worth over £1.8 million and has no charge on it at the moment and was acquired and paid for by myself four years before I married my second wife."

This is the first account that is not consistent with the case otherwise advanced.

20. Second, when the husband petitioned for his own bankruptcy in October 2011 he prepared a Statement of Affairs, dated 5 October 2011 and verified by a statement of truth. In it the Husband said that Raziz was a co-owner of the Property, but that Raziz held a charge or mortgage over the Property on which the amount outstanding was £925,000, so that the net value of the Property (so far as the Husband's Statement of Affairs was concerned) was £925,000.

21. Having noted those accounts by the Husband that are not consistent with his case that there was an agreed transfer of 50% of the beneficial interest in the Property to Raziz I can resume the narrative from mid-2006.

22. Raziz says that by June 2007 he had paid payments to the Husband directly or to the builders on his behalf totalling £503,785: and that he had substantial input into the work that was undertaken. I will look at the detail of that when analysing the arguments. For the present I simply record that from the documents it is apparent that not all of the intended work was done and some of what has been done has not been properly done. Planning permission was not obtained for some of the work, building regulations approval was not obtained for any of it, there has been no certificate of practical completion, no electrical certificate has been given, the hot water system is inadequate, the damp proofing system is ineffective and the roof timbers inadequate; in all some £200,000 of remedial work is required. So it is not to be assumed that the sums expended are reflected pound-for-pound in an uplift in value or that the value resulting from the expenditure is equal to half of the value of the unimproved Property.

23. In January 2008 Raziz was seeking to make a case for his new wife Amber to join him in the United Kingdom. He wrote to the Visa Entry Officer at the High Commission in Islamabad describing himself as "of 68A Burkes Road Beaconsfield Bucks". After detailing his means of supporting Amber he said:-

"Finally I own half of the above property and this can be confirmed by my father Arif Anwar at the above address. I thus have a place to live with my wife."

In re-examination Raziz relied on this as demonstrating that his allegation of an agreement with his father over ownership of a 50% share was not an invention made after the divorce proceedings had commenced.

24. In October 2010 (because the marriage of the Husband and the Wife was in jeopardy) a restriction was put on the title to the Property indicating the existence of a trust under which Raziz had some interest. There could be no disposition by a sole proprietor other than a trust corporation: and no disposition to be registered without a certificate that notice had been given to Raziz at Charles Lane. The documents leading to the entry of that restriction were not disclosed.

25. In December 2010 the Husband (whose business was then facing some financial difficulty) sought to obtain a loan of £150,000 secured on the Property for his own benefit. This attempt was known about from the documents disclosed by the Husband: but it was much illuminated by further disclosure of a solicitor's file during the course of the hearing itself. Before any secured loan could be obtained the Husband had to ensure that the Wife transferred the legal estate to two trustees who could give a receipt for the capital money arising: this was the object of the draft transfer to which I have referred at paragraph [7] above which declared that the Husband and Raziz would hold the Property on trust for the Husband beneficially.

26. Because of the restriction entered on the title, notice of the intended charge had to be given to Raziz. That was done  by a letter dated 3 February 2011 in which the Husband wrote to Raziz:-

"I intend to register a charge against [the Property] in the sum of £150,000 in my capacity as beneficial owner of the property."

Raziz did not respond: "You are not the beneficial owner  of the property".

27. Because the Wife refused to sign the draft transfer proceedings were prepared seeking a vesting order under section 41 of the Trustee Act 1925. These proceeded on the footing that the Husband was the beneficial owner of the Property and claimed "a transfer of the property from [the Wife] to [Raziz] and [the Husband] to hold on trust for [the Husband]".

28. The further disclosure revealed two even more surprising documents. The first was a Declaration of Trust apparently dated 23 November 2001 ("the 2001 Declaration") prepared on the headed notepaper of the Husband's business. The 2001 Declaration was apparently signed by the Husband, and his signature is witnessed by Shahid Akmal (who was with the Husband co-executor of the estate of the Husband's late first wife, Aksa Anwar): but the signatures are on a separate piece of paper so that one cannot be sure to what document they were originally appended. The document recites that the late Aksa Anwar held the Property on trust for the Husband and that the Husband now wished to gift to his only son Raziz the beneficial ownership of the Property. The recital continued:-

"As his son is still a minor (aged thirteen with a date of birth 18 February 1986) this property shall remain in the beneficial ownership of Arif Anwar until his son Raziz Rehan reaches the age of 21 years."

(This is very odd: by November 2001 Raziz was aged 15. So the recital suggests the document was originally prepared in 1999, in which year Aksa Anwar had died: and that would be consistent with the fact that the 2001 Declaration refers to the Husband simply as "Arif Anwar" whereas he had since 8 November 2000 styled himself "Arif Anwar Zar"). The dispositive part of the document said:- 

"…the [Husband] declares that he will hold the property in trust for [Raziz] and agrees that he will at the request and cost of [Raziz] transfer the said property to him at such time or times and in such manner or otherwise deal with the same as [Raziz] will direct upon reaching the age of 21 years … This declaration of trust will not prohibit the [Husband] registering the property in the name of any other party or body provided a deed of trust is obtained by [the Husband] from any such party or body confirming that they are holding said property in trust for [the Husband] who shall remain beneficial owner at all times until [Raziz] reaches the age of 21 years old"

29. When the late disclosure was made the Husband was recalled to give evidence concerning it. He explained that he had bought a home in Pakistan where his new wife's family was living: and that he had outsourced his office work to Pakistan. He said that he felt he was starting a new life and did not want the son of his first wife to be neglected, and that he thought of splitting his wealth between his newborn son and the son of his first wife. He explained that he forgot all about the 2001 Declaration and gave it no significance.

30. The 2001 Declaration was shown to the Husband's solicitors at the time when he was seeking to raise money on the security of the Property in late 2010 and they initially gave advice which took it into account: but as the form of the draft Transfer which they produced shows, something must have occurred by the beginning of February 2011 to alter that initial advice and to cause them to revert to proceeding on the footing that the Husband was the beneficial owner of the Property who could do with it as he wished. (This was in marked contrast to the way in which they dealt with a property called Rifsons House, Charles Lane ("Rifsons House"). The Husband and the Wife had signed a document which recognized that they held Rifsons House on trust for Raziz until he reached the age of 21 years. But in this case the Wife was required to transfer this to Raziz).

31. The second surprising document was headed "Gift of Beneficial Interest" It was signed by the Husband (his signature being witnessed) and was dated 1 December 2006 ("the 2006 Declaration"). It said:-

"I Arif Anwar Zar, resident at the above address and the beneficial owner of the freehold interest in the above property hereby declare the following … I gift my entire beneficial interest to my two sons Raziz Rehan (18 February 1986) and Nehme Umayr Rehan (29 April 2002) equally subject to [certain] conditions and reservations….."

Further provisions dealt with the mechanics of how the gift would be given effect.

32. On 14 March 2011 the Husband wrote to his solicitor about a document that had been "discovered at home relating to the future possibility of transferring/gifting [the Property]". He explained that

"..the document was written when my son Raziz… was about to be married, as to a possible intention I had mused about at the time."

Since Raziz did not marry until 2007 or 2008 this does not fit comfortably with either the 2001 Declaration or the 2006 Declaration, though it is plainly much more in conformity with the latter: in 2001 Raziz was only 15, whereas by December 2006 he was 21 and there was a suggestion in the evidence that in 2006 the Husband was looking for a wife for him. Since no other document has been disclosed "relating to the future possibility of transferring/gifting [the Property]" (despite the order of Eleanor King J and the disclosure requirements arising during the hearing itself) I find that the March e-mail was referring to the 2006 Declaration. In relation to that the Husband told his solicitor in March 2011:-

"I had no intention to gift or transfer the property at that time or indeed at any time since. Indeed, I had forgotten I had even prepared said document until it was discovered this morning. To be clear I can confirm no steps have ever been taken in regards to this and I still remain the sole beneficiary of the Property… I may in the future decide to deal with the possible gifts of parts to my son or sons."

33. I can now turn to an analysis of the available material. The first main issue is: what is the effect of the 2001 Declaration? If it is an effective declaration of trust then its effect is conclusive and cannot be undone by anything that happened subsequently (short of a disclaimer by Raziz or the creation of some superior equitable obligation). The fact that the Husband has acted inconsistently with it cannot undo its effect: though such acts might indicate that it was intended to be effective in the first place.

34. In closing speeches the 2001 Declaration was unsurprisingly placed in the forefront of the submissions on behalf of Raziz, so that his and the Husband's original case that Raziz owned a 50% share as the result of an agreement made in 2006 became a "fall-back" position. The argument advanced on behalf of Raziz was simple. At the date of the 2001 Declaration the legal estate in the Property was vested in the personal representatives of the late Aksa Anwar as successor trustees and was held by them on a bare trust for the Husband. The Husband could declare a trust of that equitable estate. The 2001 Declaration was made as a deed and complies with any possible formalities either for the declaration of a trust relating to land or the disposition of an equitable interest under section 53 of the Law of Property Act 1925: and the case is unanswerable. That there have subsequently been inconsistent dealings is immaterial: what was once done cannot be undone or ignored however much the original settler may come to regret what was done.

35. The very late production of the 2001 Declaration (although the Husband had been specifically reminded of its existence in 2011 and extraordinarily did not disclose it) meant the opportunity for consideration was limited. The Wife simply argued that it was a sham: although Counsel also advanced on her behalf a short (and attractive) argument that the retention of "beneficial ownership" by the Husband until Raziz attained 21 conferred on the Husband a general power of appointment which he exercised by requiring the Wife to declare a trust in his favour by means of the 2003 Declaration.

36. In truth I think the effect of the 2001 Declaration is resolved at a more fundamental level. In my judgment the 2001 Declaration was not an effective declaration of trust. I find that it was probably not intended to have immediate effect, was prepared in readiness for possible implementation, but was not implemented.

37. I so hold for the following reasons, which are of differing weight, and none of which is in itself determinative, but which in combination present to me a clear picture. :-

a) The form of the document (on business paper, with the signatures on a separate sheet, giving the wrong age for Raziz and the wrong name for the Husband) raise doubts as to whether it was intended to be a document that was immediately legally effective rather than a record of something that might later be implemented formally.

b) The document was not stamped and appears to have been retained by the Husband and not put into any sort of circulation (so that questions of "sham" do not really arise since the Husband did not try to give a false impression to anyone). It was simply "kept in a drawer" by him and not delivered to anyone.

c) The Husband immediately acted contrary to its terms, for the 2001 Declaration bears a date of 23 November 2001 and on 26 November 2001 the Husband joined in a Transfer to the Wife without then obtaining from her any declaration confirming  the real beneficial ownership (as the 2001 Declaration required).

d) When two years later the Wife did sign a declaration of trust (prepared on the instructions of the Husband) it was a declaration that she held on trust for the Husband beneficially (not that she held it on trust for the Husband until Raziz reached the age of 21).

e) The 2001 Declaration was not handed over to anyone until late 2010 or early 2011 (when it was included in a file of papers given to the Husband's solicitors in connection with his attempts to raise money). Until then it had remained with the Husband and was not acted upon in any way. The Husband said that that was because he forgot about it. But I do not believe that anyone could simply "forget" giving away in 2001 a £750,000 house in which he and his new wife and imminent family (she was 3 months' pregnant) lived and which represented his principal personal asset in the country of his birth and of his professional base if that had been the intent of the 2001 Declaration. If it was "forgotten" it was because it had not been intended to be effective immediately.

f) When the document did emerge it was treated as wholly ineffective. It is unlikely that in 2010 solicitors instructed by the Husband (who himself had cordial relations with Raziz and whose solicitors appeared also to be acting for Raziz) would have deliberately suppressed a document which they knew to be legally valid and would have proceeded to try and implement a loan transaction which they knew proceeded upon entirely the wrong basis as to beneficial ownership and would be impeachable: so the instructions from the Husband are likely to have been that the document was never intended to be effective and had never taken effect. That, indeed, is the effect of the e-mail that he sent on 14 March 2011 (albeit that that was directed to a different document).

g) Whilst the oral evidence of the Husband contains a plausible reconstruction of the sort of considerations that might then have been running through his mind, I do not accept it as an accurate recollection of his then thoughts. It seems improbable that the Husband would wish in 2001 to make immediate and irrevocable decisions about the division of his English and Pakistan estates when there is no suggestion in the evidence that he was relocating to Pakistan and every indication that he intended to remain in practice in England long after Raziz attained 21 (in which event he would need a home for himself, his wife and his by-then 5 year old son).

h) It is known from the creation of the 2006 Declaration that the Husband prepared documents that were not intended to take immediate effect but which represented possible courses of action which he might decide to implement (and this is reinforced by other documents relating to the appropriation of Rifsons House). 

38. Ms Penelope Reed QC (Counsel for Raziz) submitted that before reaching that conclusion it would be instructive for me to consider what would be the case if the contest was in fact between the Husband and Raziz in ordinary civil proceedings. Would it be truly open to the Husband to argue that the 2001 Declaration was a sham and therefore he should not be bound by it? The form of a question is, of course, loaded. But if the Husband said that in 2001 he had not intended immediately and irrevocably to give his only personal asset of substance in this jurisdiction to his 15-year-old son so as to deprive himself of the means of accommodating his new wife and expected child or paying his creditors I would find that entirely credible.

39. That answer to the first main issue means that the 2003 Declaration was correct according to its terms and that the Property was held by the Wife upon trust for the Husband and that she undertook to transfer it at his direction. In the absence of any vitiating factor which might warrant the setting aside of the 2003 Declaration, the Court must give legal effect to that express trust. On that footing the second main issue is: was an agreement made between the Husband and Raziz in mid-2006 that Raziz should have a half share?

40. It is important to set this question in its legal context. The Wife held the Property upon a bare trust for the Husband. For that position to change there had to be an assignment by the Husband of part of his equitable interest. (I ignore the possibility of the declaration of a sub-trust for which no-one argued). A disposition of an equitable interest subsisting at the time of the disposition must be in writing signed by the disponor (or by his agent lawfully authorised in writing). But s.53(1)(c) LPA 1925 does not affect the creation or operation of constructive trusts. A constructive trust normally arises on the occasion of the transfer of a legal or equitable interest if there is a specifically enforceable contract for the transfer (because equity treats as done that which ought to be done). But in the context of agreements to assign equitable interests it is perhaps not essential that the agreement be enforceable by an order for specific performance: see Chinn v Collins [1981] AC 533 at 548.

41. These seem to me to be the relevant principles where there is a clear statement on the face of the conveyancing documents as to beneficial ownership and an alleged oral agreement that it should change in a specific way.  I do not think that much assistance is to be derived from Oxley v Hiscox [2004] 546 (relating to the purchase in the sole name of one party of a property by an unmarried couple as a home, and (in the absence of any formal declaration as to beneficial interest) their expressed or inferred intentions as to shared ownership); or (as Ms Reed QC accepted) from Stack v Dowden [2007] (relating to the purchase of a domestic property by a cohabiting couple in joint names, and (in the absence of any formal declaration as to beneficial interest) the circumstances in which presumptive joint beneficial ownership was displaced by a common intention as to some other arrangement); or (as Ms Reed QC again accepted) from Jones v Kernott [2011] UKSC 53 (relating to a joint purchase in which the beneficial interests were undeclared and where the primary task had to be the objective deduction of what the parties had originally intended or had come to intend after a consideration of the whole course of dealing between them). 

42. But one point that Miss Reed QC did seek to draw from this line of authority was that if a Court was called upon to decide upon the division of the beneficial interest then the Court could give effect to agreements made subsequent to the original acquisition and which might have changed the original entitlement. It is important to set out the passage from Lloyds Bank v Rosset [1991] 1 AC 107 on which she relied. At p. 132 Lord Bridge (speaking of co-habiting partners sharing a property not subject to an express declaration of trust) said:-

"The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially…… Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel. " (Emphasis supplied).

I do not, of course, question the authority of that statement. As its context makes it clear, it is addressing the case arising between cohabiting partners, where there is no express declaration as to the beneficial interests. I do not think it can be used to displace the principles otherwise applicable where there is a formal declaration of trust and the question arises whether the expressed beneficial interest has been effectively transferred to another party.

43. I therefore address the issue: was an agreement made between the Husband and Raziz in mid-2006 that Raziz should have a half share in the Property? By "agreement" I mean some arrangement intended to have legal (though not necessarily contractual) consequences. Within families many informal arrangements are made which are not intended to have legal consequences but to rest in familial obligations. The effect of any such an agreement intended to have some legal effect is to make the registered title and the formal record of the beneficial ownership materially inaccurate, and to defeat the claims of those (be they the Wife or the creditors in the bankruptcy estate) who look to the property of the Husband for satisfaction; so in my judgment such an agreement must be established on the balance of probabilities by clear evidence that has survived appropriate scrutiny. In most cases that scrutiny will arise from the fact that the existence of the constructive trust or the estoppel will be a matter of contention between parties to the alleged agreement or understanding, whose respective cases will be tested at trial. But that is not so in every case. Where the issue as to the existence of the agreement or understanding is not (in reality) being argued out between the parties to it then it is especially important to remember that the general policy of the law is that interests in land should be formally recorded and formally transferred and that that policy would be defeated if interests in property could be readily transferred simply by conversations between parties interested in a particular outcome which are not corroborated or otherwise soundly evidenced.

44. Both the Husband and Raziz have said that there was an agreement. I have recorded above what their respective cases are; and it must be emphasised that in each case this is the best account either can give in response to the stringent order of Eleanor King J. I do not feel able to place a great deal of reliance on their written or oral evidence because (despite their protestations) they seemed to have a common desire to preserve for themselves what they could from the claims of the Wife and the creditors, and the accounts of their  recollection were undoubtedly influenced by that objective. But their evidence as to some arrangement is not to be dismissed as an entire fabrication and receives some support from the objectively ascertainable facts that

a) this was not an arrangement between strangers but between father and son:

b) the nature of the works to the Property was to make it more suitable for occupation by two families:

c) some payments for the works had their origin in credit balances on accounts designated as held for Raziz:

d) the two families did live together.

45. Nor can one simply ignore Raziz' assertion in January 2008 to the immigration authorities that he had a half share in the Property, a statement made well before the bankruptcy of the Husband or the divorce proceedings. But, of course, the fact that Raziz and the Husband had agreed in 2008 that Raziz could so state does not mean that in fact in 2006 an agreement to that effect had been made, given the obvious desire of Raziz (who had his father's support) to secure that his new bride be admitted to the UK: and it may in the light of all the evidence turn out to be an invention.

46. The Wife denied that there ever could have been any such agreement because everything was always treated as belonging to the Husband (in whosesoever name it was held). I accept that in all probability she was not told of any proposed sharing of the ownership of the Property (because the clear impression I have gained from the evidence is that as regards financial matters she was a mere cipher, used when convenient and simply told what to do); indeed Raziz did not originally say that she was party to any agreement about ownership (though the Husband did, and in oral evidence Raziz moved toward that same position saying "I do not say she was aware: but I do not say she wasn't"). But she was informed about the proposed alterations to the Property and that their purpose was that Raziz should continue to share occupation of the Property but now with his new wife and family. Raziz said so: and so, at one point in her oral evidence, did the Wife.  

47. Being unable simply to accept the case of either party I must decide where the truth probably lies, applying proper scrutiny to the oral and limited documentary evidence. I am not satisfied that in mid-2006 a clear agreement was reached between the Husband and Raziz that Raziz should be entitled to a 50% share in the Property in return for the payment of £500,000 representing one half of an agreed value for the Property of £1 million. I find and hold that in mid-2006 it was agreed between the Husband and Raziz (a) that Raziz could continue to share the Property when he married, with the two families living together; (b) that the Husband could use monies held in accounts in the Husband's name but designated as Raziz' accounts to fund the necessary works; and (c) that the position as to what of Raziz' money had been spent and as to ownership of the Property would be sorted out later once it was known what work had been done and what money used.

48. This finding is built on a number of discrete component parts.

49. A. I am satisfied that an agreement of some sort was made. Plainly there was a family understanding about the sharing of occupation of the Property between the families of the Husband and Raziz: the legal status of that "understanding" does not matter. Implementation of that "understanding" involved material alterations to the Property held at that point (it is agreed on all sides) beneficially for the Husband. The material alterations were paid for by money that was in fact either held in a Barclays account opened in 2003 and designated "Arif Anwar Re Raziz Rehan Capital Account" ("the Capital Account") or derived from Tema House, which was held for Raziz under a Declaration of Trust dated 20 December 2003. Although the Husband was in control of these funds and although Raziz was a dutiful 20-year old son it is very improbable that the funds could have been accessed and deployed without the knowledge of Raziz. It must have been a consensual arrangement. 

50. B. I am satisfied that at the time the arrangement was made at least some part of the credit balance on the Capital Account and Tema House itself were each viewed by the Husband and by Raziz as "belonging" to Raziz; and that they did so belong.

51. I will deal first with Tema House. In her written evidence dated 23 August 2011 the Wife put in issue whether Tema House did in fact "belong" to Raziz. She says that the Husband always described it as belonging to himself and made clear that the decision to sell it was his (not Raziz'). She elaborated upon this in her Affidavit of 6 November 2012 when she explained that although the Husband was born in England, his attitudes about family were firmly rooted in Pakistan. She said:-

"In this culture the head of the household owns all the wealth in a family and manages it as he chooses. It would not be possible for a son who lived under his father's roof to own property or have significant money of his own – those funds would be considered to belong to his father. This is absolutely the case with [the Husband]. [He] was very much the head of the family…."

I should again make explicit my approach to this sort of evidence. Whilst the cultural context may make some actions or transactions more or less likely to have occurred, the legal effect of those acts or dealings is to be determined according to English law. Ownership is not determined by cultural norms but by legal rules.

52. Adopting that approach I find and hold that the proceeds of Tema House belonged to Raziz. That is so whether one starts either

a) (as I would prefer) with the December 2003 Declaration of Trust (signed contemporaneously with the acquisition of Tema House); or

b) (as was done in argument) with an analysis of how Tema House was paid for (being as to some £387,500 or thereabouts by mortgage from the Woolwich Building Society secured on Tema House and as to about £184,000 being part of a loan secured on Rifsons House which it is acknowledged belonged to Raziz).  

53. When Tema House was sold the proceeds belonged beneficially to Raziz. There is one point raised by the Wife that as a matter of account the Husband may have had a personal claim against Raziz relating to the monies released by the sale of Tema House (because he had repaid part of what is called "the equity release loan" out of personal monies). But I can at this stage leave that point because it muddles up ownership of monies and repayment claims.

54. As regards the Capital Account, it suffices at this stage of the analysis to record that I am satisfied that the Capital Account contained some monies to which Raziz could lay claim. With enormous industry Ms Reed QC and Mr Fairbank (and the team supporting them) undertook a detailed analysis of all money movements on the Capital Account from its inception (by reference to bank statements some of which were produced after the conclusion of oral evidence), and prepared schedules, amended schedules and supplementary schedules. They also endeavoured to compute the net rental income that would have been received from tenancies and sublettings of Rifsons House, and to compute and then apportion the interest payable on various borrowings. The finding with which this paragraph opens (and subsequent findings about the Capital Account) would not have been possible without that enormous effort: and I am indebted to them for it, even though it cannot be tested by the other parties or explored in evidence, and even though it necessarily makes untested assumptions about the application of withdrawals from the account.  But it is neither necessary nor appropriate for me to conclude that the figures they produced are right. Those figures are generated from material suffering from severe limitations, and may be deployed in claims that Raziz may advance against the Husband and the Wife or within the bankruptcy (when they will be examined in context). As Ms Reed QC and Mr Fairbank themselves submit, this case is not an appropriate vehicle to conduct a trust account or to attempt a reconciliation of the Capital Account with that trust account. But without accepting that the figures are right it is possible to say that on the balance of probabilities the Capital Account contained some money to which Raziz could properly lay claim as owner. I do not regard it as likely that all money held in the name of Raziz was held by him (in effect) as nominee for the Husband.

55. C. I am satisfied that if there was an agreement about the use of monies thought to belong and in fact belonging to Raziz then that agreement was understood to have legal consequences. However deeply the affairs of the Husband and Raziz were intertwined (as they then were and now still are) I do not consider it probable that Raziz simply permitted the Husband to take the money trusting to a sense of paternal obligation, particularly given the rival claims of his step-brother. To the extent that Raziz contributed funds that could be regarded as his own to the alteration of the Property to accommodate two families I think it probable that he secured agreement that his expenditure would be reflected in some way. In reaching this view I have discounted to a degree Raziz' insistence upon the investment-driven reasoning behind some of the decisions taken. Although I accept that property would have been seen by the Husband and by Raziz as a good investment, Tema House was not a pure investment proposition: the picture I have is the Husband paid the mortgage on it, that the family used it whilst the work on the Property was done, and that it was sold not because of its performance as an investment but principally because it was no longer really needed (whereas the money tied up in it was).

56. D. I am satisfied that Raziz' entitlement related to some sort of interest in the Property. Whatever the Husband may subsequently have said in his attempts to keep the entire benefit of the Property from the Wife or from his creditors it seems to me improbable that Raziz' entitlement was viewed in terms of loan. The context of the use of the monies on the Property was a sale of Tema House, which, if not a pure investment proposition, did have an investment element.  Even though, if viewed as "a stand-alone venture", the purchase and sale of Tema House was unsuccessful (taking into account funding costs), in raw terms it produced a small apparent profit: and I think it likely that both the Husband and Raziz would have viewed the pending transaction as a "rollover" i.e. as ultimately giving Raziz some stake in a property which would produce a gain free of capital gains tax. Raziz gave unchallenged written evidence that at the time when the sale of Tema House was being considered he made an (unsuccessful) offer for another house; though the funding arrangements for the purchase were not disclosed. That supports his evidence that property ownership was a current interest.

57. In reaching this view I have not ignored the terms of the Husband's e-mail to his solicitors of 14 March 2011 that he "had no intention to transfer the property at that time [sc. December 2006] or at any time since….I still remain the sole beneficiary…..".  I take account of this hereafter.

58. E. I am not satisfied that there was any agreement as to the precise extent of the entitlement.

59. First, so far as the evidence discloses (and this is the fullest and best account that the Husband and Raziz can give) there was not (either in July 2006 or ever) any overall costed project or redevelopment plan such that anyone could have said "This is going to cost £500,000 and these are the cash flow requirements". Rather there seem to me to have been (from the scant evidence) a series of works settled upon as the refurbishment proceeded and funded as and when required from whatever money was available.  In the absence of a settled, coherent, costed project plan it is inherently unlikely that there was clear agreement on what Raziz would be required to invest and what he would get in return.

60. Second, the lack of any clear agreement as to entitlement would explain why the Husband could "muse" about making disposals in the terms of the 2006 Declaration within months after the alleged agreement that Raziz should have a 50% share in the Property. I do not accept (as submitted by Ms Reed QC) that the 2006 Declaration was really directed at the Husband's "retained" 50% interest in the Property and that the intended outcome was that Raziz should have 75% and his other son 25%. The Husband quite clearly refers to himself as "the beneficial owner of the freehold interest in the above property". The 2006 Declaration is to be seen as a consideration by the Husband as to how the beneficial interests in the Property might be sorted out.

61. Third, the lack of any clear agreement as to entitlement would explain why when the Husband did have to set out what that entitlement was, he could not consistently do so and had to try and engineer a charging order or create a secured loan.

62. Fourth, if there was a clear agreement in the terms alleged then the form of the Transfer that the Wife was asked to sign in March 2011 (to which I refer in paragraph [7] above) is incomprehensible. If the Husband and Raziz had agreed that each owned 50% of the Property, why, when the Property was to be vested in the joint names of the Husband and Raziz, should the two of them declare that it belonged beneficially to the Husband? If at that stage matters had not been settled and remained to be sorted out at least that disposition is understandable.

63. The Husband sought to overcome this difficulty by saying that the problem was the Wife would not sign anything in favour of Raziz because of her "pathological hatred" of him, so he was advised to achieve the desired end of Raziz being an equal co-owner in two stages: the first being a declaration of the beneficial interest belonging to the Husband, and the second being a declaration by the Husband that the beneficial interest was shared equally. There was not a shred of documentary evidence that such advice was given: the documents suggested it had not been. The "advice" was itself incoherent, given that the document the Wife was being asked to sign relating to the legal ownership was a transfer to the Husband and Raziz. The evidence is pure invention.

64. Fifth, if in June 2006 there had been a clear agreement as to a 50% sharing of the ownership the Husband simply could not have written as he did to his solicitors on 14 March 2011.

65. Sixth, the absence of a clear, settled and implemented agreement that the Property was owned jointly and equally by the Husband and Raziz would explain why in his dealings and in his evidence (written and under cross-examination) the Husband constantly referred to the Property as "his".

66. Lastly, if there was clear agreement as to Raziz' entitlement I am absolutely sure that the Husband would at the time have presented the Wife with a letter to sign recording what that entitlement was (particularly if, as he insists, she knew everything about the arrangement).

67. As I explained in paragraph [45] I have not overlooked Raziz' letter to the immigration authorities. For the reasons there set out the terms of the letter do not compel the conclusion that in July 2006 there was agreement in the terms asserted, but only that in 2008 and for the purpose of securing the position of Amber's wife Raziz and the Husband were content to represent that that was the outcome of the dealings between them. I think it was a convenient invention then: and I am sure that the supposed clear agreement in July 2006 as to a 50% split in the ownership of the property is a convenient invention now designed to do down the Wife and the creditors now.

68. The result of the holding in paragraph [47] is that I reject the argument that a constructive trust arises as to 50% of the Property by virtue of an agreement to that effect made between the Husband and Raziz in July 2006. This gives rise to the third main issue: if Raziz does not obtain an interest under a constructive trust, is the pleaded alternative of an entitlement by operation of a proprietary estoppel available? Was some representation made or some understanding reached that as a result of use of monies held in his name he would acquire some interest in the Property, such that if he relied upon that (to his detriment by permitting use of the monies) then equity would award him the minimum interest necessary to do justice?

69. I answer that in the affirmative. I have dealt with the nature and terms of the agreement or understanding. I have adverted to what was done: money held by the Husband to which Raziz could lay claim was used to pay for work. (The work done may be gleaned from the valuer's report, and the Wife did not challenge it. The builders were in part paid from the Capital Account). I am satisfied that Raziz did not object to that use because of some agreement or understanding reached. That understanding was not simply that in return for allowing his money to be used in the refurbishment he could share occupation of the Property whilst it belonged to the Husband. It was that in return for his money he would get some sort of interest to be sorted out later. Until it was sorted out the Husband would indeed remain the sole beneficial owner: but a "sorting out" was needed.

70. This now leads to the fourth main issue: what contribution did Raziz make? This involves looking at where the money used came from: and at how it was used.

71. The money used was (a) derived from Tema House or (b) transferred from the Capital Account.

72. The first question is to identify how much might have been derived from the sale of Tema House. Tema House was sold in October 2006 for £595,000. Raziz says that all of the paperwork regarding the purchase and the sale is missing because it was inadvertently thrown away following a burst water pipe at the Property in 2008. The evidence shows that there were four instances of water damage at the Property between December 2006 and July 2007, and it is possible that Raziz is mistaken as to the date of the destruction of this important file. But I do not regard his explanation as satisfactory. It seems to me that if in November 2012 (when Eleanor King J made her Order) a reasonable search had been made at the offices of the solicitors handling the sale a conveyancing file dating from 2006 ought to have been recovered. 

73. The absence of the conveyancing file means that it is not possible to be certain as to the available proceeds of sale after the expenses of the sale and the discharge of the Woolwich mortgage. Failure to disclose means that a cautious estimate is justified. I estimate the available proceeds to have been £184,000 (allowing for the items mentioned). This was not "profit". In fact the acquisition and sale of Tema House (taking into account dealing and funding costs) produced an actual loss of about £22,375. The £184,000 was simply the equity in the property released by the sale. This equity in fact represented what had been used from loan money raised (at the time of the Tema House purchase) on the security of Rifsons House. But instead of being applied to redeem that Rifsons House borrowing the released equity was applied in obtaining an interest in the Property. (Ignoring the slight complication of a bridging loan) it was paid over (a) as to £100,000 to the bank account of the Husband in August 2006 and (b) as to £83,910 to the bank account of the Husband and the Wife in October 2006.

74. It is at this point that the accounting question arises. The Wife says that although money released from the sale of Tema House and derived from the Rifsons House loan was used on the Property, by that stage the Rifsons House loan had been paid off using money that belonged to the Husband: so the "released equity" really belonged to the Husband.

75. It is not possible to conduct a trust account in these proceedings so as to work out with whose money the Rifsons House loan was discharged, and I do not accept that the evidence establishes that the Husband had paid off that part of the Rifsons House loan that had been used to buy Tema House.  Counsel for the Wife said that the Husband had acknowledged during his oral evidence in the OS v DS hearing that he had personally discharged this loan: but in my judgment the Husband only acknowledged that by May 2009 he had repaid any money which he personally had used deriving from the loan secured on Rifsons House. He did not say that by 2006 he had personally paid the Tema House element of the Rifsons House loan. Moreover, as I have indicated, I think the argument muddles up beneficial ownership of the proceeds of sale of Tema House with personal claims. So I will treat the £184,000 derived from Tema House as money to which Raziz was beneficially entitled.

76. The second question is to ascertain what of the payments made from the Capital Account consisted of money belonging to Raziz. I can treat this as consisting of two categories.

77. Category 1 comprises payments made direct to the builders (on 13 July 2006, 2 August 2006 and 25 October 2006 and totalling about £120,000). What funded these payments? The Capital Account contained some accumulated rent from Rifsons House.

78. Counsel for the Wife argued that the total accumulated net rent amounted to only about £55,000 and was insufficient to cover the payments. The basis for the argument was a schedule that the Husband had prepared for presentation to his trustees in bankruptcy. The Husband said that the schedule had been prepared by an employee and was wrong: Raziz said the schedule was plainly wrong. Neither produced documents to back up the criticism.

79. Counsel for Raziz said the total gross rent could be computed (though without the benefit of the lettings file) at £644,000 and the net accumulated rent at £444,000. Against this would have to be charged interest due on the properly-applied borrowing secured on Rifson's: in what follows I assume this to be interest on £600,000 (which would amount to £240,000 and leave a total accumulated rent balance of about £200,000).

80. The truth cannot be known because the relevant papers of Rifsons (the Husband's business) have all been lost or destroyed and neither the Husband or Raziz ever declared the rent to the Revenue (so it accumulated tax-free and there are no tax returns). No forensic accounting exercise has been undertaken. I must make a cautious estimate of the accumulated rent.

81. The Capital Account also contained some loan monies raised on the security of Rifsons House. On 31 October 2003 the Husband had accepted the offer of a Property Investment Loan made by Barclays Private Clients International ("BCP") to "Trustees of Raziz Rehan" secured on Rifsons House ("the equity release loan"). The loan was of £600,000 repayable in 2006: but (for reasons to which I will come) released only £355,000 cash. This £355,000 was sent to the Husband's solicitors (Musa Dudhia & Co) and they were instructed by the Husband to apply part of it as the cash element in the purchase of Tema House (i.e. the shortfall between the Woolwich mortgage and the purchase price): and with this I have dealt. The remainder was to be put towards an intended purchase of another property adjacent to Rifsons House. But that intended purchase fell through: and this element of the advance (I assess it at £174,000) was returned to the Capital Account.  Being unable to make a precise finding I must make a cautious estimate of the returned money.

82. Making a cautious estimate of the accumulated rent and a cautious estimate of the size of the net balance of the returned money I regard it as probable that there would have been sufficient money to which Raziz was beneficially entitled to fund these category 1 payments. The amount standing to the credit of the Capital Account during July to October 2006 so far as it related to accumulated rent and the balance of the returned money was in each case sufficient to cover  the relevant Category 1 payment. There is no reliable evidence to suggest that this credit balance derived from monies introduced into the Capital Account from some other source. So the category 1 payments  are to be treated as made out of money belonging to Raziz.

83. The Wife submitted that I should not draw that conclusion. She said that Raziz was the claimant in the issue and that therefore shortcomings in disclosure or the disappearance of documents should simply lead to the conclusion that he had not proved his case. But I think the position is more nuanced than that. The burden undoubtedly lies on Raziz to establish (amongst other things) detriment. He leads evidence that the payments were made from a designated trust account. He ought (as the person claiming to be beneficially entitled) to have obtained copies of the relevant bank statements and to have disclosed them. He failed to do so until the last minute, and that has hampered examination. So a cautious view of what he claims is justified. The relationship between the Husband and the Wife on the one hand and Raziz on the other was not a conventional trustee/beneficiary relationship. The Husband and Raziz worked together and the Wife was ignored. But even so I think Raziz is entitled to say (as against the Husband who controlled the Capital Account and as against the Wife who was in name a trustee of Rifsons House): "If you say the in the money Capital Account in the period July-October 2006 comes from somewhere other than my rent and my mortgage advance, you tell me where". So he has discharged the burden of showing that it is prima facie trust money and does not in this instance bear the burden of showing that it is not.

84. Category 2 consists of a single payment of £200,000 made on 27 June 2007  by the Husband effecting a transfer from the Capital Account into the Husband's offshore bank account. Did the money belong to Raziz (although it came from the Capital Account)?

85. I hold that it did not.  In my judgment this £200,000 was money belonging to the Husband which he sheltered in the Capital Account (in much the same way as he "sheltered" his ownership of the Property from claims from the Imran Khan Trust). When he drew on the mixed fund in the Capital Account he drew on his own money.

86. It is common ground that the source of the funds for this payment was a payment of £200,000 that the Husband had made to Raziz. Disclosure after the conclusion of evidence established the date of the transfer from the Husband to Raziz as 21 December 2005 (18 months before the transfer from Raziz to the Husband). The key question is whether (as the Husband and Raziz both maintain) the December 2005 transfer was a gift, or whether (as the Wife maintains) this was simply the Husband "parking" money in Raziz' account (which he controlled). Counsel for Raziz submit that the question is answered by reference to the presumption of advancement. Counsel for the Wife say that the answer to the question is illuminated by where the £200,000 came from in the first place. 

87. I do not consider that the question is answered by the application of a presumption (whether the presumption of loan under Seldon v Davidson [1968] 1 WLR 1083 or the presumption of advancement). A presumption may assist in the absence of any worthwhile evidence. But the primary task for the Court is to ascertain the true intention by reference to the direct evidence of the transaction and any inferences that may properly be drawn. So I will examine the entire transaction.

88. In his Form E dated 16 August 2011 H explained that he had received a sum of money from an Irish business associate (whom I will call "Declan"). He said:-

"In 2004/5 I assisted [Declan]… in an investment project in Ireland. As a result of the deal, I was due a commission of €600,000.00. As I wanted the cash upfront, partly for investments in Lahore, I asked [Declan] if he would loan it to me as an advance on my commission and he agreed to do so. Unfortunately, the property market in Ireland collapsed and the commission was no longer due to me, and [Declan] has therefore demanded repayment of his loan. At the point the deal failed, we agreed that I would pay interest at the Dublin Central Bank rate plus 7% as I was unable to repay the loan. [Declan] originally indicated that he would accept repayment in sterling, but given the dramatic movement in the exchange rate he is now insisting on repayment in Euros…"

89. The Husband's disclosure showed that this alleged "loan….as an advance on commission" had in fact been made a by series of odd-figure payments between February 2004 and September 2005. Late disclosure (during the course of the hearing itself) showed that these payments were made pursuant to an agreement dated 2 February 2004 between the Husband and Declan's (dormant) company for loans in the sum of £183,360.99 and €319,982.29 payable in five specified instalments. (The document does stretch credulity: but I take it at face value). In a document prepared in 2012 to explain his personal finances the Husband explained that by 2000 he had depleted all his personal savings to support Rifsons, and that in 2005 he "sought assistance from [Declan] to support myself as my company could clearly no longer do so".

90. This account by the Husband himself shows how very improbable it is that in December 2005 he should feel so well off that he could make a gift of £200,000 to Raziz (money that he had borrowed because he needed assistance and which was repayable on demand) and how very much more likely it is that the transfer into the Capital Account was a simple "parking" of the money away from the prying eyes of creditors, which was reversed on 27 June 2007. Whatever the Husband and Raziz now say, I do not accept that the Husband would use precious borrowings to make a gift to Raziz. I find that the £200,000 (however it was applied in the refurbishment works) did not belong to Raziz.

91. Thus the answer to the second question is that the Tema House money and the category 1 payments represent contributions of money belonging to Raziz. These may be rounded to £300,000.

92. The third question is to see whether this money, whether paid to the Husband (or to the Husband and Wife) or to the builders, was expended on building works.

93. I accept (with one exception) that money paid to builders was expended on the works. The exception is a payment for a new kitchen, which it is clear has never been installed (but nor has recovery of the money been sought): I was simply not told the truth about this curious transaction. I shall take the sum involved to be £20,000 (though £40,000 was also mentioned).

94. As for the money derived from Tema House and paid direct to the Husband (or to the Husband and the Wife), no attempt was made to trace (within the evidence) precisely how that money was applied to funding the works of alteration: the refurbishment records were (it is said by the Husband and Raziz) inadvertently thrown away after water damage (though oddly a few cheque stubs emerged very late in the day). Raziz simply said in his verified Points of Claim that this money was "paid towards the development". The Wife put him to proof of that (paragraphs 5.2 and 5.3 of her Defence). He subsequently confirmed in oral evidence the truth of his assertion that he paid the £503,785 to his father or to the builders to acquire an interest in the property: and in cross-examination adhered to his position that much work was done and that "I paid for all of it". Counsel for the Wife was (on the available material) unable to put in cross examination any other obvious target for the expenditure of the Tema House monies transferred in August and October 2006. From scant hints in the evidence it seems to me probable that in October 2006 a major phase of the work was coming to an end, with the consequence that the Property became habitable, a final payment would be due to the builders and Tema House was no longer required to house the family. I find that the Tema House money was paid towards the development.

95. It is now necessary to determine what the effect of the contribution was. Raziz says that he "supervised" the work: he probably overstated that, but undoubtedly played a significant part in the definition of the work and in the way the development was embarked upon. The works originally undertaken (for which planning permission was granted in March 2006) consisted of a partial reconfiguration of the accommodation (including modification to the accommodation in the roof), the building of a small extension to the dining room, and bringing forward the front elevation.  (Raziz says that this phase included conversion of the garage to living accommodation: but I do not think he is right about that because planning permission for that had been granted in 2000). A second phase (for which planning permission was only granted in February 2008) involved building a two storey rear extension and creating two further bedrooms in the roof space. (The date on which planning permission was granted casts some doubt on whether this work was done (as the Husband and Raziz say) in 2006/2007). Some other work was done for which planning permission was not obtained. There are serious problems with the plumbing and the wiring. Some work was paid for but not done. Before any of the work was done the Property had a January 2006 value of £1.0 million. Assuming the Husband and Raziz are right about the timing of the work, after it was all completed the Property had a January 2008 value (assuming the work had been done properly) of £1.9 million: but it is not possible to say what part of that is attributable to the work and what to a general movement in property prices. The valuation indicates that there was a rising market in 2006-2007 but that it had peaked some months prior January 2008. In fact, of course, the work was sub-standard and lacked building regulations approval. The jointly instructed valuer (Mr Hockley BSc MSc MRICS of Hamptons International) thought the deficiencies meant that this "could impact heavily on the value" though the impact would be greater now than it would have been at his assumed valuation date.

96. This leads to the fifth main issue: in the light of the amount and effect of those contributions by Raziz, what relief is it right and conscionable to grant so as to ensure that Raziz suffers no detriment by as a result of allowing his money to be used in the way I have outlined? In my judgment he should be declared to have a 25% share in the Property.

97. The need to make estimates about the sums contributed and the complete absence of disclosure about the sums expended on the works makes it inappropriate to attempt precise accounting. But broadly, Raziz laid out about £280,000 (£300,000 less the £20,000 thrown away): though even this was not spent effectively. £500,000 was spent but perhaps £200,000 of remedial work is now required. I will call the effective expenditure "£280k minus". It is inappropriate to seek some pound-for-pound correlation between what Raziz allowed to be used and what he receives. One is trying to settle upon a share that is proportionate to "£280k minus" whether that is looked at as a contribution towards acquiring an interest in a property worth £1 million (which will be enhanced by improvements funded by the "£280k minus") or as a reward for enhancing the value of that property by £0.9 million (or so much of that as is attributable to the work and not the market) by the laying out of the "£280k minus"). Balancing the variables I consider a 25% share is fair.

98. I have considered what impact upon this assessment the behaviour of Raziz in 2011 might have. He was then prepared to sign documents which acknowledged the Husband as sole beneficial owner. Does this mean that he was in effect abandoning reliance upon any promise that matters would be sorted out and was expressing himself content that the Husband should be treated as sole beneficial owner? I do not think that it would be fair so to find. What was going on in late 2010 and early 2011 was a desperate attempt to raise money. Raziz would have helped his father in that temporary expedient, but not to the extent of saying as regards third parties that for all time he relinquished his right to have matters sorted out.

99. I must now address the sixth main issue: what is the effect of the 2006 Declaration? Did it effect some settlement of the Husband's retained interest in the Property?

100. In my judgment it did not. I have dealt with the issue above. The document was prepared on the footing that the Husband was the beneficial owner of the entire freehold (not the beneficial owner of a part interest in the freehold). It was dealing with the whole, not part.  In creating the document the Husband was "musing" about how he might dispose of his affairs at some time in the future, not intending thereby immediately to dispose of them. The document makes some (though not complete) sense if there had been an understanding that interests in the Property would have to be sorted out with Raziz 

101. I can now turn to the Dealings Issue. The context in which the Dealings Issue was formulated was that Raziz claimed at the OS v DS hearing that he had paid off substantial borrowings secured on Rifsons House for which the Husband was liable, and which were to be the subject of a claim in the bankruptcy. This claim could only proceed on the footing that the borrowings represented money from which the Husband had benefited (rather than money which had been properly applied for Raziz). Since the borrowings appeared to have been properly applied originally, Raziz' argument depended upon him being able to demonstrate that those borrowings had already been paid off by him, and that the remaining borrowings represented money taken for the Husband's personal benefit. So in paragraph 30 of my first judgment I gave directions (a) for the examination of (i) £245,000 borrowed from BCPI as indirect replacement for the Norwich Union mortgage charged upon Rifsons House (ii) £390,000 borrowed from Woolwich BS and £155,000  borrowed from BCPI and used to fund the purchase of Tema House (together with £16,450 borrowed from the same source to pay the costs and stamp duty) and (iii) £174,250 transferred to the Capital Account for S's benefit from the BCPI ("the Mortgage Liabilities") (b) for an examination of the source of any funds used to repay the Mortgage Liabilities and (c) what drawings were made on  BCPI account secured by a charge on Rifsons House between 29 May 2009 (when the Husband said he had paid off whatever personal liabilities he alleged he had to Raziz in respect of drawing on the Capital Account) and 6 October 2011 when he became bankrupt.

102. The exercise was less useful than I had hoped partly because of limited and late disclosure, partly because what did emerge showed that one might indeed have to enquire into every dealing between the Husband and Raziz (not least because the Husband paid non-trust money into the Capital Account) and the hearing of the issue was not an appropriate vehicle within which to conduct a trust account, and partly because (when they attempted a reconstruction of a notional trust account in respect of income deriving from the accumulated rents from Rifsons House and the interest payments due upon borrowings secured on Rifsons House and Tema House) Counsel for Raziz did not accept that 9 May 2009 was a date that was significant to the exercise.

103. But it is possible to make some progress and to make some findings and holdings that will be of value in trying to sort out the mess created by the way the Husband conducted his affairs and by the destruction of key documents.

104. I will deal first with the £245,000. The Husband was previously married to Aksa Anwar ("the Deceased") who died on 20 December 1999. Her estate was valued at some £391,964 net when probate was taken out. Included within that estate was Rifsons House from which the Husband's insolvency and accountancy practice operated. By a Transfer also dated 26 November 2001 Rifsons House was vested in the Husband and the Wife who declared that they held it as trustees and statutory owners for Raziz (then aged 15). The Transfer explained:-

a) That Rifsons House had been valued at £425,000:

b) That at the death of the Deceased Rifsons House was subject to a charge in favour of Norwich Union for £226,300:

c) That Rifsons House was being appropriated in satisfaction of a legacy of £231,000 (a sum equivalent to the nil rate band for Inheritance Tax purposes) given to Raziz by the will of the Deceased:

d) That the Transfer was a document falling within Category D for stamping purposes i.e. was purely an appropriation in satisfaction of the legacy given by the will and did not contain any element of variation of the will itself (for example, by enlarging the legacy and reducing the Husband's entitlement to residue).

105. Curiously the documents put in evidence disclose that in 2002 an Instrument of Appropriation was prepared and signed in blank (i.e. without the crucial figures completed) notwithstanding that (according to the Transfer) the appropriation had already been effected.   This Instrument provides a warning not to accept at face value documents produced by the Husband because they may not be accurately dated or may not record contemporaneous or real transactions. Late disclosure during the hearing itself also produced material suggesting that there was a Deed of Appropriation dated 26 November 2001. This provides a warning that the Husband signed documents which were not necessarily put into effect, the desired result being achieved in other ways (in this instance, by the Transfer).

106. As is apparent from instructions given by the Husband to his solicitor on 31 October 2003 (and according to his oral evidence, which I accept) in July 2001 the Husband had paid off the Norwich Union mortgage secured on Rifsons House in the sum of £245,000. Raziz accepted that he did so either out of the Husband's personal funds or out of the Husband's interest in the residuary estate of the Deceased. Thus the statutory owners took Rifsons House free from the registered charge in favour of Norwich Union but subject to such rights of subrogation or other claims to repayment as the Husband had arising from his repayment of that registered charge.

107. On 31 October 2003 the Husband accepted BCPI's offer of the equity release loan secured on Rifson's House. The advance was accordingly trust money. In addition to the charge over Rifson's House BCPI required a charge over a cash deposit of £245,000 to be made by the Husband and (subject to the charge) to be held to his order. The Husband used £245,000 of the advance under the equity release loan to perform this obligation i.e. he took £245,000 from the advance as his own. He instructed Musa Dudhia & Co (his solicitors) in these terms on 31 October 2003:-

"I have accepted the enclosed offer from [BCPI] to mortgage [Rifsons House] for the sum of £600,000…From this sum will be deducted the sum of £245,000 repayable to myself for the mortgage I repaid on [Rifsons House] for Raziz..in July 2001"

108. The sum released was accordingly £355,000: and it was this that was used to pay the cash element of the Tema House purchase (and the costs of the transaction), with the balance being returned to the Capital Account after the failure of the abortive purchase of another property.

109. (Also on 31 October 2003 the Husband, as trustee for Raziz, borrowed another £600,000 ("the back-to-back loan") of which £435,000 had to be used as a cash deposit securing the advance and £165,000 of which became available for use. Much confused evidence was given about this: and no relevant transactional documents were disclosed. The "back-to-back" loan was created as a tax-saving vehicle to exploit the Husband's non-domicile status and thereby to reduce the tax payable on rent received from Rifsons House. The Husband said in the OS v DS hearing that it "was never utilized": that is no surprise because the Rifsons House rent was never declared to the revenue authorities so the need for tax-saving never arose.  I can leave the back-to-back loan on one side. Its only materiality is that the interest payable upon it (net of "offset" interest arising from the related cash deposit) would probably count as an expenditure of the trust in the drawing up of any trust income account, and if £165,000 had been released then it would need to be dealt with in any capital account). 

110. The Wife submitted that the equity release loan was not material to anything I had to decide on account of the terms of the Will. Clause 13 of the Will of the Deceased conferred on the persons whom she appointed as her executors (who included the Husband)  and "any other persons who act as my personal representatives" the power to enter into any transaction concerning her estate notwithstanding that one or more of them may be personally interested in the transaction. The Wife submitted (Third Affidavit paragraph 42) that the intention and meaning of that provision was that until Rifsons House vested legally in Raziz the Husband could manage it as he wished and in such a way as to allow him to profit from it from it without having to give any account to Raziz and without any liability for loss.

111.  I do not accept this submission. Clause 13 conferred powers upon the Deceased's personal representatives in relation to property forming part of her estate. Once Rifsons House ceased to form part of the Deceased's estate (by being appropriated to Raziz and transferred by way of assent to statutory owners for Raziz) this clause ceased to have any operative effect. The Husband held Rifsons House on trust: and so did the Wife.

112. The equity release loan has therefore to be dealt with. As I have found above, the £355,000 eventually funded Raziz' contribution to the works on the Property. The question is how the £245,000 taken by the Husband is to be treated.

113. In his Points of Claim in the Dealings Issue Raziz pleaded:-

"Freed from the Norwich Union charge [Raziz] accepts that the value of [Rifson's House] exceeded the value of the legacy and that as residuary beneficiary the [Husband] expected at the date of the appropriation that he would be repaid at sometime in the future for the sum expended on the redemption of the charge in favour of the Norwich Union."

Notwithstanding that acknowledgement, Counsel for Raziz argued that the Husband had forgiven the liability and thereby in effect made a gift of £245,000 into the trust of Rifsons House (either as a matter of direct intention to forgive or by operation of the presumption of advancement).

114. I do not accept this submission. I hold that the Husband was entitled to recoup his £245,000 spent on redeeming the Norwich Union charge and insofar as the equity release loan funded the payment of that £245,000 (a) the Husband properly instructed Musa Dudhia to treat it as the Husband's and (b) the £245,000 represented proper borrowings by the trust (to fund recoupment to the Husband).

115. It is not open to Raziz to argue that the payment by the Husband in July 2001 of the Norwich Union charge on Rifson's House followed by the appropriation was itself a gift. It is acknowledged that the Husband did not so intend at the time, but expected to be repaid. That indeed is the only conclusion that can be drawn from the appropriation having regard to the absence of any enlargement of Raziz' interest in the Deceased estate by way of variation, the value at which Rifson's House was appropriated, the stamp duty certificate showing no element of gift, and the potential fiscal consequences of the Husband making a gift into settlement contemporaneously with the appropriation.

116. The argument therefore has to be that the Husband's right of recoupment somehow lapsed between November 2001 and October 2003, and that he then wrongly purported to revive it.  But there was no evidence of any such event occurring. It would not be sufficient for the Husband simply to say "I forgive the debt" (even if there were evidence that he did so). I therefore find that the Husband's right to recoup was not abandoned or released.

117. The second group of dealings that I identified should be examined related to Tema House, namely the Woolwich mortgage ( of £387,500 or £390,000), the cash contribution derived from the equity release loan secured on Rifson's House, and some £16,450 in respect of the costs of the purchase of Tema House.

118. I have dealt above with how this worked out. The Woolwich mortgage was redeemed out of the proceeds of sale of Tema House. In the taking of any account between Raziz and his trustees it may therefore be ignored as to capital. How the interest on the mortgage was paid during its currency was not the subject of detailed analysis or argument: but the evidence of the Husband was that he paid it. The cash contribution from the equity release loan was "rolled over" into payments made by Raziz for work done on the Property and also funded the economic loss made on the Tema House venture (including the dealing costs).

119. The main conclusion to be drawn from this is that the proceeds of the equity release loan were properly applied for the benefit of Raziz, that the whole of the interest upon it is properly chargeable to the trust account and that insofar as Raziz (upon the Husband's bankruptcy) discharged it or any refinancing of it he did so for his own benefit and has no claim against the Husband in the bankruptcy in respect of it.

120. As to the post 2009 dealings, I regret that the exercise has not proved helpful. Ms Reed QC and Mr Fairbank's Schedule D2 set out their revised analysis of the full run of late-acquired bank statements relating to the Capital Account and an attempted reconstruction of a trust account: and the Wife's legal team had an extremely short time within which to analyse this material. The analysis apparently shows that after November 2009 some £100,525 was drawn by the Husband from the Capital Account: but this seems to have been drawn in respect of household living expenses (which benefited Raziz and his family as much as the Husband and the Wife) and gives the appearance of being an arrangement known to (and not objected by) Raziz. (It would not be right to express a concluded view because of the way the material emerged).

121. However, this process produces a very partial picture. First, the affairs of the Husband and of Raziz were and are deeply intertwined and I am now of opinion that it would be wholly artificial to look at the Capital Account (or to attempt a reconstruction of the trust account) without scrutinizing with equal care dealings by the Husband and Raziz within the various Rifsons businesses, to examine, for example, how Raziz' extraordinarily expensive taste in cars was funded and from where (in the absence of disclosure of his tax returns, as ordered). Second, there is to my mind a real question as to the extent to which Raziz acquiesced in whatever dealings there were. Third, the process itself is dependent upon an understanding of what rent was received in respect of and what money was laid out upon Rifsons House (to produce a properly grounded net rent account). Yet it seems that the key books and records have been destroyed, and no tax returns prepared, so that to a significant degree this element of the account is founded upon untested assumption (which, because he is bankrupt and exposed to a claim from the Wife the Husband has no interest in challenging). An example is the opening "debit" balance of £61,715 said to be due from Rifsons before the Capital Account was opened. Fourth, in constructing the trust account Raziz' legal team have assumed that the only debits to the trust account properly allowable are those in respect of credit card payments on behalf of Raziz and some payments in respect of his cars: but having regard to the way that the affairs of the Husband and Raziz were intertwined this assumption requires to be tested.

122. Not only does the exercise produce a partial picture, but I accept the submission of Ms Reed QC and Mr Fairbank that in truth the date of May 2009 (referred to in my formulation of the issue because it was the date by which the Husband said all accounts were in balance) is not a critical date.

123. In the result I cannot fairly determine what drawings were made on the Capital Account and which were for the benefit of Raziz.

124. I find and hold:-

(a) That Raziz is entitled to a 25% share in the Property;

(b) That the equity release loan was properly applied both as to the £355,000 cash released and as to the £245,000 cash retained: and that the £600,000 plus the interest due thereon are burdens properly borne and to be discharged by the trust of Rifsons House in the taking of any trust account.

125. I will hand down this judgment in Manchester and do not expect attendance. Issues of costs arise. If it is possible to fix a one day hearing before 2 March 2015 then that should be done. If not then I will deal with these costs so far as I can by written submissions. Raziz was the Claimant in both issues. He will set out his case on costs in writing by (subject to further submission) 4.00pm 9 February 2015 together with any other applications he wishes to make. The Wife and the Husband will set out their cases by (subject to further submission) 4.00pm 23 February 2015. Raziz may reply by 4.00pm 2 March 2015