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CR v MZ [2013] EWHC 925 (Fam)

Hearing of two preliminary issues: (i) who was the beneficial owner of the former matrimonial home, and (ii) if that beneficial owner was a company, who was the beneficial owner of the shares in that company.

The husband and the wife had lived in West Africa, but, in late 2005, bought their first flat, in Belgravia ("Flat A") for a total cost of £1.62m. The deposit of £155,000 was provided by the husband's father ("the father"), as well as a further £217,000 towards the purchase.  The balance came by way of mortgage of £1.24 million which was guaranteed by both the husband and the father. 

The property was purchased in the name of COG Limited, a company which the husband had set up and of which he had chosen the name (which represented the first two or three letters of the first names of the wife and the two children). In emails between October 2005 and May 2006, the husband was described "the ultimate beneficial owner" or "the ultimate beneficiary of the company". 

The Court found that there was nothing to indicate that the sums paid by the father to the purchase were anything other than gifts. The father had been very generous to the husband over many years, and had never asked for the money back. Further, the husband had presented himself to the outside world as the beneficial owner of COG. The Court also found it significant that the husband had given the company the initials of the wife and children, with whom the father had held some animosity at the time.

In August 2007, a shell company, IUL, was incorporated in the BVI and one share issued to its director, a Ms. A, in the Seychelles.  Ms. A transferred her one share to the husband, which share was then cancelled and 50,000 shares were issued to the husband.  The husband was granted a very wide general power of attorney to deal with company affairs. 

In early 2009 the husband and wife decided to purchase the former matrimonial home ('FMH'), which was a substantial flat next door to Flat A. The purchase price was agreed at £3.8m and the husband and wife raised a mortgage. The conveyancing solicitors were initially told that the flat was going to be purchased by the husband and wife but soon afterwards, on solicitors' advice, it was decided that the flat would be put into the name of IUL. The Court accepted the wife's evidence that she acquiesced to this on the basis that the husband told her it would not make any difference whether it was in the company's name.

It was common ground between the father and the husband that the husband did not tell the father (i) that the purchase or exchange was going to be in the joint names of the husband and the wife, (ii) that the mortgage was going to be taken out in the names of husband and wife, (iii) what security was going to be given, and (iv) that the shares in the company were going to be charged.

The valuation carried out by the lender (ING) on the property led to them advancing less than had first been indicated and it was necessary for the husband and wife firstly to obtain a £100k short term loan from ING and secondly to borrow £190k from a third party, QR. The father also provided £190,000 but the Court held that this was not used towards the purchase price but towards refurbishment on the property.

In the following year the husband replaced ING with the National Bank of Abu Dhabi as lenders. In the re-mortgage process the husband at all times held himself out as the beneficial owner of IUL. By that time, ING was owed at least £550,000 as the overdue first repayment that had been due on 1st October 2010.  The father's evidence was that he was completely unaware of any outstanding sum, and the Court held that it was significant that the husband never approached him in relation to any arrears if he had an interest in the property.

In 2011 it was discovered that the wife was having an affair, which led to the breakdown of the marriage and significant anger in the husband's family.

The Court found that in the context of the father's overall wealth the sums paid to the husband were relatively small and prior to 2011 he had not had any anxiety about the beneficial ownership of the FMH. It also found that the husband would not have perpetrated against the father such an abuse of trust as, on his case, he had, and neither would the father have stayed silent about the same. In any event, the father not having contributed to the purchase price of the property, there was no reason for him to have a beneficial interest, particularly given that there was no reason for him to need this, given his enormous wealth.

It was also held that various documents purporting to show the father as being the beneficial owner of the property were in fact shams.

On the further issue of whether the beneficial ownership of the FMH vested in IUL, the husband or the husband and the wife jointly, the Court held that it vested in the husband and the wife. The Judge noted the authorities of Ben Hashem v. Ali Shayif [2009]  and Prest v.Prest [2011], which he said he struggled to reconcile, but commented that it may be that each case is fact specific. In this case, there was no clear tax advantage in the property being held by the company which would have indicated the property being beneficially owned by the company for the reasons set out in Ben Hashem. The mortgage on the property was taken our personally by the husband and wife in 2009 and they had put in further money which was personally borrowed from QR. The company had provided no consideration for the transfer of beneficial interest and there was no genuine third party involvement. Further, it had initially been intended that the property would be legally registered in the names of the husband and wife.

On the question of costs, the Court held that as the general rule was for costs to follow the event in this type of hearing, an order for costs should be made. Owing to the conduct of the husband and father in seeking to mislead the Court this should be on an indemnity basis.

Case summary by Thomas Dudley, barrister, 1 Garden Court Family Law Chambers


FAMILY DIVISION                                       
No. FD11D03748
[2013] EWHC 295 (Fam)

Royal Courts of Justice,
Wednesday, 13th February 2013



(Sitting as a Deputy Judge of the High Court)

B E T W E E N :

CR Applicant

-  and  -

(1)  MZ

(2)  FZ

(3)  IU LIMITED Respondents

Transcribed by BEVERLEY F. NUNNERY & CO
Official Shorthand Writers and Tape Transcribers
Quality House, Quality Court, Chancery Lane, London WC2A 1HP
Tel:  020 7831 5627     Fax:  020 7831 7737

MR. N. DYER QC and MR. D. HAGEN (instructed by Landmark Legal) appeared on behalf of the Applicant.
appeared in Person.
MR. B. SINGLETON QC, MR. D. NAGPAL and MR A. MOLD (instructed by Howard Kennedy) appeared on behalf of the Second Respondent.
THE THIRD RESPONDENT was not represented.

(As approved by the Judge)

1 This is the trial of a preliminary issue as to the ownership of a flat in Belgravia, London.  I shall refer to it on occasions as the former matrimonial home ("FMH").  The parties are the applicant, CR, who has been represented for the first week of this trial by Mr. Dyer QC, who reappears today, and by Mr. Hagen, a specialist trusts junior who was here throughout the hearing.  I shall henceforth refer to her as the wife.  MZ, her husband, represents himself.  I shall refer to him as the husband.  FZ has been represented throughout by Mr. Singleton QC and Mr. Nagpal, and with a company law junior in addition for the first week of the hearing.  I shall refer to him as the father.  The third respondent to the application is the limited company, IU Limited "IUL".  Though joined as a party, it has not been separately represented.  All arguments that might be available to it have been put forward by the husband and the father.

2 I am required to determine two questions which were settled by Holman J., who directed that the preliminary issues shall be (i) who is the beneficial owner of the FMH, and (ii) if that beneficial owner is a company, who is the beneficial owner of the shares in that company.

Some preliminary points
3 First, in this judgment, where I have given quotes of what a witness has said, they may not be completely word for word as said in evidence.  They are as written down by me in my notebook and I have cross-checked them against the transcript to ensure that I have the correct gist of them. 

4 Secondly, a very large number of issues were raised in the trial.  I have reread my notes of evidence and counsel's written presentations, and I hope and intend to cover the points that are material to my determination.  In a case where the written opening and closing documents of counsel amount to nearly 200 pages, authorities to seven lever-arch files, although we only looked at about ten authorities, and there were about ten or 12 trial bundles, it would be impossible and unnecessary to cover every issue raised. 

5 Next, during the first week of the trial, I directed that the husband had no privilege against self-incrimination when in the witness box when answering questions about his means.  My judgment has been transcribed and is available, but I will not repeat it.  He sought to appeal my judgment, and attended at the Civil Appeals Office.  He then returned to the witness box and answered questions without, it seemed to me, feeling under any pressure or inhibition.  Last week, he told me when we resumed this case that he had abandoned his appeal and saw no point in it. 

6 Shortly before this hearing commenced on 27th November 2012, the wife served two statements.  One was from her brother, QR, about the provision of funds.  I can see no justification why this evidence was produced so late.  She sought to adduce his evidence by video-link from abroad.  That was opposed, and I directed that, if the wife relied upon his evidence, as she did, he must attend in person. 

7 The other piece of evidence related to the management service provider agreement, which I shall henceforth call the MSPA, and its authenticity.  That evidence might have been available earlier, but there was nothing to put the wife on notice that the name of the company providing the services was one that was not in existence at the date the agreement purported to bear.  There can, therefore, be no criticism for the wife stumbling on this important matter at a late stage.

8 As it happened, the evidence of the parties took until the Friday night of the five days for which this hearing was fixed, albeit that all parties agreed at the outset that the time estimate was unrealistically short.  So the case necessarily went part-heard until 4th February, which was the next time that we could all gather.  I then heard from QR, the wife's brother, Mr. Yves Klein (a Swiss law expert) very briefly as to the matters relating to the MSPA, and the husband at more length, principally in relation to the various documents which I will refer to in more detail later in this judgment.

9 On 4th February, the husband filed without leave yet another statement.  In it, he included a request for the disputed documents to be examined by an expert in America who specialises in the testing and dating of inks.  The husband asked me to continue this hearing to a conclusion in any event, but simply delay the delivery of judgment until the results of the ink testing which he sought were available.  I said that, if I considered these tests to be essential, I would inform the parties and we would reconvene, but I made it clear that I would need persuasion.  Having considered the matter further, I am satisfied that my initial instincts not to permit the testing were correct for the following reasons:

(i) There is a substantial chance that the tests would be inconclusive.  Inks deteriorate at different rates, and it may well be that all the expert could say is that, for example, the ink is not less than, say, three months or six months or 12 months old.  That would not help me in any way in resolving the issues.  Only if the ink is over 20 months old, which is towards the outer limit of what testing can show (that is before June 2011) would the information be helpful.  Until the tests are done, there is no certainty that they would be of any value at all.

(ii) If I were to allow the expert to report, the wife may well then say that she wants her own expert to refute the one found by the husband.  Equally, an issue about methodology might arise.  The technique adopted by the American expert is not one available in the United Kingdom and may, I do not know, be open to criticism.  I run the risk, if I accede to the husband's request, of having to decide between experts, none of whom would be based in the United Kingdom.

(iii) Litigation must end somewhere.  This case should have finished in early December 2012.  It is now too late.

(iv) Importantly, there is a final hearing in the financial remedies application listed for next week.  Any further delay would ruin the possibility of that hearing being effective.  This is not just a matter of housekeeping.  Urgent resolution is necessary, as the property in question is about to be the subject of possession proceedings and, in April, the wife is due to give birth.  Moreover, the costs of this litigation are already massive, well over £1 million when the case started, and further delay would only produce further costs. 

(v) In the light of my findings, it would not affect the outcome. 

10 Finally, by way of introduction, I want to say that I am delivering this judgment under some pressure of time, with the hearing fixed for next week.  I have come to clear conclusions.  But, as I have not had the opportunity to get this judgment fully typed up, it will not be quite as polished as I would like, and in some instances may be slightly repetitive, for which I apologise. 

11 The R and Z families are both Christians from the Middle East.  I know very little about the background of the R family, but I have heard a considerable amount about the Z family.  The father is now aged 75.  He has two sons, the eldest, who is the husband in this matter, and a younger son, who practises as a doctor in London and is a single man, and who plays little significant part in the history.  He has not given evidence.  His only relevance has been that, in 2007, the father gave him a sum of money in order to buy a property in London in his own name with the assistance of a mortgage. 

12 The husband has always felt, as he tells me, that the father has treated his brother more favourably than he treated him.  The husband puts that down to the father's disapproval of his marriage to the wife.  The wife says that the husband felt that the father had always throughout life treated his brother more favourably than him, and that this predated her arrival on the scene.  Unsurprisingly, the father denies that he has treated one son more favourably than the other until, says the father, the husband contracted a marriage of which he disapproved.

13 The father has plainly been hugely successful in business.  He told me that he has been trading for over 60 years.  When challenged by Mr. Dyer about his capacity to raise £190,000 quickly to complete on the purchase of the former matrimonial home, the father said that he could raise £50 million at, using my phrase, the drop of a hat, and that this represented no more than 10 per cent of the value of his wealth.  He has a huge property portfolio in the Middle East and owns a significant number of properties in West Africa.  He has property in England, and also has valuable business interests.

14 Of the two sons, the husband alone is the one who has worked in business with the father.  The father says that the husband was an extremely valuable business partner to him and helped him in a variety of different ways.  The father says that it was only in about 2008 that he felt that the husband began to lose focus on business matters when he moved to London, although the husband continued to work for the father, at least until 2012. 

15 The impression that I have been given very clearly during the hearing is that, since early 2012, the husband had ceased to work with his father.  However, in his closing submissions, the husband told me that he had "very recently" been buying a large plot of land for his father. I accept that this may, as the husband told me at the end of delivery of the judgment, refer to a transaction in early 2012 but it seems that all business relations have not been severed. 

16 For a significant period of time, the husband had no fixed salary until he had a discussion with his parents.  As a result, the father agreed to give the husband a nominal salary of £5,000 per month net.  The husband told me that, in fact, he had never received less than £15,000 per month, which he says explains why the figure of £180,000 per annum net appears as his salary on a declaration of wealth form, to which I will refer later, and which can be seen in the schedule which is to be attached to this judgment and which I have handed down to the parties.  In fact, the amount that the father gave the husband by way of support was plainly much more than that.  In the only 12 month period that I have seen records for (it may be a 15 month period as the heading of the document and the dates do not completely tally) the husband received over £440,000, exclusive of £30,000 which came to him through the wife's brother, of which more later.  That was only from one source, and there were other funds provided in the same period. 

17 There is no doubt that the father was not keen on the husband marrying the wife.  He did not regard her family as trustworthy, although he has not explained to me why and he was not asked, and for whatever reason had a low opinion of them.  He even went so far, upon the husband's marriage, as to publish an advertisement disowning any liabilities that the husband might incur.

18 The two families have always kept a considerable distance from one another.  But, once grandchildren were born, the father's view of the wife plainly changed.  She became welcomed into the father's house, and the husband and the wife and their two children, the second of whom was named after the father, all shared the family house in West Africa.  They would have meals together, and lived more or less as one unit.  Whatever the father's misgivings were about the marriage, once the grandchildren appeared, he formed the view that the wife had proved herself to be a good wife to the husband and his disapproval vanished.  Indeed he said to me by reference to about 2007 "His wife by then was very close to us.  She was becoming part of the family", and then a little later "I was very close to [CR].  I tried to treat her like a daughter, to treat the children well.  I was very sad when I learnt of her affair.  I never expected it".

19 It was only in 2011, when the husband's family discovered the shocking news of the wife's affair with a well-known sportsman, that they took the view that all the anxieties which they had first held were justified.  The change was dramatic, and she was effectively written off by both the husband and the father. 

20 The presentation by the husband that the father was always suspicious and wary of the wife throughout the marriage was firmly denied by the father during his evidence.  The father carefully declined to be critical of the wife and specifically avoided the questions put to him, in particular, by the husband, which were intended to produce answers confirming the father's lifelong suspicion of the wife.  Indeed, he refused to be drawn into expressing such anxieties from the time that the grandchildren were born until the breakdown of the marriage.

21 I have considered whether this acceptance of her was an act put on for the court's benefit to present a picture of reasonableness, but I think that would be both wrong and uncharitable.  I am satisfied that, after a rocky start to the marriage, in the period that I have to examine in depth, which is 2005 to 2011, there were good relationships between all three adults, that is father, husband and wife.

The first property transaction
22 I shall look at this in some detail, because it casts light on what happened thereafter.  The husband and the wife had lived in West Africa, but, in late 2005, bought their first London flat, in Belgravia ("Flat A").  It was purchased for £1.55 million, plus costs that included £62,000 of stamp duty according to the completion statement.  That is a total of £1.62 million.  It was purchased in the name of COG Limited.  The husband said that this was a company that he set up and he chose the name.  It was registered in the Channel Islands and had one share held by Atlas Trust Company (Jersey) Limited, subsequently renamed the Nautilus Trust Company Limited.  It was managed by MM in Jersey, who in emails sometimes describes herself as director.

23 In at least four emails (pp.64, 77, 80 and 83 of the COG file) between October 2005 and May 2006, she describes the husband as "the ultimate beneficial owner" or "the ultimate beneficiary of the company".  No document whatsoever in the COG property file relates to the father at all.  It is absolutely plain that, so far as the management company was concerned, whether it was Atlas or Nautilus, the husband's conveyancing solicitors, and to the outside world generally, this property and company were presented as beneficially owned by the husband.  I refer further to pp.3, 5, 6 and 21 of the COG file.  There is no document that evidences the father as having any interest or involvement in COG, in contradistinction to the husband, who was repeatedly described as the beneficial owner.

24 The deposit of £155,000 provided in September 2005 came via two money traders from the father.  £217,000 was also provided by him towards the purchase.  The balance came by way of mortgage of £1.24 million from HSBC, which was guaranteed by both the husband and his father.  There is no explanation in the papers as to why the property was put in the company name. 

25 The fact that the husband's brother has a property in his name whilst the husband did not, apart from later a flat in Eaton Place which I will come back to, does not help me.  It may be connected to fiscal matters perhaps, and this is my surmise, because the husband's brother is tax resident in the UK and the husband is not, but equally, there may be other valid explanations.  It may be, as Mr. Hagen suggested to me, that actually the fiscal advantages were illusory, and I have already referred to the stamp duty that had to be paid, and, for example, it may have been for anonymity's sake that the property was put in the company name.  It would be sheer conjecture on my behalf, which I do not intend to enter further into.  That the father said in evidence that he always bought  his English property in a company name does not, to my mind, take the matter further.

26 There is one other matter I should mention now.  The conveyancing file indicates that there were discussions or plans for the property to go into trust for the family.  Both the father and the husband say that, in fact, no such trust was finalised.  There is no trust deed in any of the files and, in the light of the evidence of the husband and the father, I give no further thought to it and it has not been an issue in the trial.

27 The company name, COG, represents the first two or three letters of the first names of the wife and the two children.  This is not insignificant, as, on the case that the husband and the father put to me, it would be inconsistent for the father, who it is claimed by them so disliked the wife, to use her name as that of the company.  It seems to me far more likely that the name reflected the husband's love and affection for his wife and children, and that he set up the company and that his father had no interest in it.  That would be consistent with the documents and representations, which I have referred to and will refer to, and I so find.

28 The father has been very generous to the husband over many years.  There is nothing that is contraindicative to the large sums of money paid by the father towards this purchase as being other than a gift.  As the husband told me, at no stage prior to the breakdown of the marriage and indeed since has the father ever asked for any money back.  When I asked the husband the question as to whether any request for the return of money had ever been made by the father, he looked astonished that I should ask it, and he duly denied that there had ever been such a request.

29 My finding is consistent also with the way that the husband treated the property, as I shall now explain.  Subsequent to purchase, the mortgage on the property was increased by a further £1.073 million.  I did not receive any satisfactory explanation as to why the mortgage was increased or how the extra monies were utilised, except that it was surprisingly vaguely surmised by the husband that £400,000 of the money was used for the deposit for the purchase of a flat in Eaton Place which was bought for about £4 million.  This flat was not held for very long, but it was purchased in the joint names of the husband and wife.  The father knew nothing about the purchase of the flat, and was not told of it.  Indeed, he did not even know of the existence of a second mortgage until the papers in this case revealed it to him. 

30 The husband said, again in a rather vague manner, that he thinks it likely that he told his father about the purchase, but I am more inclined to accept the father's evidence on this that he was not told.  It has never been suggested that the father had any interest, or indeed involvement in the purchase of the Eaton Place flat.  The fact that the husband used the money to purchase the Eaton Place flat without involving the father in any way at all casts further light on the ownership of COG.  If the husband was not the beneficial owner of COG, it would have been a gross breach of trust for the husband secretly to raise funds on its security to buy a property in his own name.  The flat was not kept long before it was sold for about what was paid for it.

31 In late 2008, Flat A was sold, as the husband and the wife wanted a larger home.  Upon the sale, the proceeds went into the husband's sole account initially at his instruction.  They were not paid to COG or to the father.  Subsequently, they were paid to the mortgage providers. 

32 As I have said, there are many indicators that the husband was, in fact, the beneficial owner of COG, and no single reference to the father in the conveyancing documents, save that both the husband and the father became guarantors of the mortgage.  Whilst it may be said the fact that the father was a guarantor was an indicator that he was the beneficial owner of COG, exactly the same point can be made in reverse.  But, as I have said, what is also significant is the naming of COG, to which I have already referred, the fact that the husband presented himself to the outside world as if he was the beneficial owner of COG, and that included to the lending institutions, and that all this was done with the full knowledge of the managers of the company, the trust corporation in the Channel Islands, whose officers must also have been wholly unaware of any interest that the father might have had in the property.  Thereafter, the way that the husband treated the property is consistent entirely and only with him being the beneficial owner.

33 As a result of the second mortgage, notwithstanding that the property had increased in value by £1.2 million, there was a shortfall of £150,000.  The father cleared the shortfall.  He said in evidence that he was not happy about it, but he appears to have been uncomplaining to the husband.  This would have been consistent with my finding, based on the father's evidence and on the husband's evidence, that he was entirely content to provide funds to the husband as and when asked.  As he said in the context of the Eaton Place lost deposit, to which I will come, but is apposite here as well, "I did not want to interfere.  I wanted them to have their own lives.  I wanted [MZ] to prove that he was successful".

34 For a while, the family rented.  They were at the point of purchasing a different flat in Eaton Place as their home, and the father provided £100,000 by way of deposit, when the husband and the wife decided unilaterally that the flat was not, in fact, a good buy and decided not to go through with the purchase, thus forfeiting the £100,000 deposit which had been paid.  The father accepted that loss without creating a fuss, content with the husband's explanation that it was not the best place for the family to buy.  The father said "I do not remember if I asked him why the purchase did not go through".

The purchase of the FMH
35 In August 2007, a shell company, IUL, was incorporated in the BVI and one share issued to its director, a Ms. A, in the Seychelles.  According to the company register, on 3rd December 2008, Ms. A transferred her one share to the husband, which share was then cancelled and 50,000 shares were issued to the husband.  The husband was granted a very wide general power of attorney to deal with company affairs.  Both then and subsequently, the father never had any dealings at all with Ms. A or with REL Corporate Services, who managed the company.  All dealings were carried out entirely by the husband, and it is plain that at all times the husband was the heart and mind of the company.

36 As I have said, the husband and wife were in rented accommodation following the sale of Flat A from October 2008, and it was in early 2009 that they found a flat next door to Flat A.  This was a very substantial flat, and they decided that it was where the family would make their home.  According to the husband, his mother saw the property before purchase and was against the husband buying it.  The father did not see it, but thought it was too expensive.  Nevertheless, the husband did decide to buy, despite their reservations, which is in itself telling.  The purchase was not entirely straightforward, as the vendor was apparently difficult.  An agreement was negotiated in the sum of £3.8 million and, because the husband and the wife were fearful of losing the flat, they went to ING, who were able to provide the necessary mortgage advance more quickly than the National Bank of Abu Dhabi, who the family had traditionally used.

37 The conveyancing solicitors were the same solicitors as had been used previously by MZ, in the form of Mr. S.  They were told by the husband that the flat was going to be purchased in the joint names of the parties.  Soon afterwards, advice was given by the solicitors that it would be more efficient for the family if it was put into a company name, and that is what happened.  No explanation for this advice appears in any file note.  It is, in my view, significant that the flat was, in the first instance, intended to be purchased in the joint names of the parties. 

38 The wife said she acquiesced in the change of instructions to the solicitors because the husband assured her that it did not make the slightest difference whether it was in the name of a company that he owned or in the name of an individual.  I accept her evidence in this regard.  The wife was happy to leave the legal formalities to the husband.  It was immaterial to her how the family home was held.  I accept that she thought that they were simply buying the home, and she trusted the husband to deal with the legal side of it.  Once again, the husband did not involve his father in the purchase at all.

39 The husband represented himself to ING, IUL, the conveyancing solicitors and to the lenders' solicitors, as the sole legal and beneficial owner of the shares.  The father's name does not appear anywhere in the files.  Very significantly, in my judgment, the husband provided his solicitors with a document headed "Agreement for Director Services", which is silent as to the father and could only have been provided by the husband to his solicitors to confirm the authority of Ms. A on behalf of the company to act.  The document declares:  "Whereas the shareholder [which is the husband] is the owner of all the shares issued in the company".  The document was not signed by him, but it was signed by Ms. A. 

40 The husband says that he just provided Mr. S with the documents that he asked for, and left it to Mr. S, in my words, to sort out the wheat from the chaff.  The husband says that the only significance of the document is that he had not signed it.  As will be apparent, I wholly reject this.  There is no reason for the husband to have provided it in 2009 if it was not a genuine document.  The absence of his signature is not significant, so far as the solicitors are concerned.  Not only did he provide it himself, and thus implicitly approve it, but what they needed to see was that Ms. A's appointment and authority to make the representations and act on behalf of the company was established.

41 The purchase process continued.  It is common ground between the father and the husband that the husband did not tell the father (i) that the purchase or exchange was going to be in the joint names of the husband and the wife, (ii) that the mortgage was going to be taken out in the names of husband and wife, (iii) what security was going to be given, and (iv) that the shares in the company were going to be charged.  The husband says that he did it all under his power of attorney effectively as middleman.  But none of what I have recited is consistent with the father having a beneficial interest. 

42 I have appended to this judgment a schedule which I have prepared of the important documents from the conveyancing file of MZ's solicitors and which I regard as relevant.  It derived initially from a schedule prepared on behalf of the wife, but is my work, having been through the file.  The entries to which I have referred should be treated as written into this judgment.

43 In fact, the valuation carried out for ING of the premises led to the lenders advancing rather less than had first been indicated, and it became necessary for ING to provide £100,000 on a three month short-term loan, still leaving the husband and the wife to find a further £190,000 to complete the purchase.  The £100,000 which repaid the short-term ING loan was repaid by the husband, not by the company or the father, although, says the husband, he did so out of monies provided to him by the father for that purpose.

44 It is in this context that the evidence of QR is crucial.  He told me that he was rung up by the wife, saying that they were short of £190,000 to complete, and that she tearfully implored him to provide the shortfall.  He told me that he was initially resistant and told them to go to the father.  The wife said that the father had refused to help.  QR said that the husband and the wife promised that he would have the money repaid to him by Christmas.  To that end, QR sent the sum of £160,000 direct to MZ's conveyancing solicitors on or about 5th November 2009 with the reference he gave as "value of the house" and a further sum of £30,000 to the husband's account on or about 6th November 2009 with the same reference "value of house", which was then transferred to the solicitors.

45 QR's account is crucially supported by two documents.  First, QR says that he received a text from the husband on 5th November, which appears in my bundle at 1B.783.  It reads as follows:

 "From [MZ]:  [QR], thank you so much for your assistance.  It really means a lot and I am forever grateful.  Thank you.  I will call you this evening.  Thanks very much again, [MZ]".

46 The husband says that he had no recollection of sending that text, and he cannot say whether it is genuine or not.  After all, as he points out, it is a very long time for someone to keep a text message.  But he did not deny that he ever sent it.  I accept it as genuine.  But there can be no question about a transfer made by the husband to QR of $39,640 in February 2010 in, says QR part repayment of the loan, with the reference given by the husband of "family commitment".  No suggestion of any other kind of commitment has ever been made to me that would explain the reference.

47 In addition, a further £50,000 was paid by the husband and the wife to QR  in August 2010.  I, again, accept QR's explanation given to me of that being a further part repayment.  QR vehemently denied the suggestion by the husband that all he was doing was forwarding on money given to him in cash by or on behalf of the father in West Africa from the sale of a piece of industrial machinery.  I accept QR's evidence. 

48. It is, however, clear from the documents that I have seen that the father did also produce a further sum of about £190,000. The father said in evidence that he was unaware that there was any shortfall.  "He did not approach me for the shortfall of [the FMH].  I told him that I thought the property was too expensive, but he bought it.  He knows I will never let him down, whatever happens", and later, "I thought the £190,000 he asked for may have been for renovations.  We did not discuss what he wanted it for.  It was up to him.  Maybe in the future I will give him £5 million or £10 million without a problem" (my emphasis).

49 In the light of my finding that QR did produce the shortfall of £190,000 and that the father provided a similar sum towards refurbishment, there remains the question of why the husband did not get the shortfall from the father.  I cannot answer that.  There are a number of possible of explanations, but it does not matter.

50 The following year, the husband replaced ING with NBAD as lenders.  This had always been planned.  The husband had banked with NBAD.  He went through the re-mortgage process.  I am not going to lengthen this judgment further by going through the conveyancing file, but I refer to the schedule.  The entries point strongly to the conclusion that, at all material times, the husband has held himself out as the beneficial owner of IUL, and that no one other than he had any interest in the property.  The contents of the file are detailed and significant, both as to the purchase, the initial mortgage to ING and the re-mortgage to NBAD.  I draw particular attention at this stage only to the entries of 17th July, 30th September and 10th November 2009 for the original purchase and mortgage, and 19th August, 27th September and 30th November 2010, and the 9th and 10th February 2011 for the re-mortgage.

51 In the spring of 2011, the re-mortgage was completed.  In place of the original guarantee to ING given by the husband and the wife, the husband guaranteed payment of the NBAD loan to IUL, and the husband and the wife each subordinated their rights in the property to the interests of NBAD.  By that time, ING was owed at least £550,000 as the overdue first repayment that had been due on 1st October 2010.  The father said that he was completely unaware of any outstanding sum, and it is, to my mind, again significant that the husband never approached him in relation to any arrears, if, as they allege, the father had any interest in the property.

52 When the new mortgage had replaced the old mortgage, the new mortgage being in a greater sum as the property had by then been refurbished, there was a surplus of £106,000, which the solicitors, again significantly, simply remitted to the husband's sole account, not to the company account.  Soon afterwards, that sole account became a joint account.

53 In 2011, the existence of the wife's relationship with the sportsman was made public.  That aroused huge anger in the husband's family.  Not only the relationship, but also the way it was broadcast in the media, made the father feel that the husband had opened his family to ignominy and, of course, aroused very great anger towards the wife.  Relations were severely compromised, and some months thereafter all payments that were due under the mortgage for the terms of the lease ceased. 

54 In my judgment, there is nothing that has happened since these revelations in 2011 which casts any helpful light on the ownership of the property.  In saying that, I am not forgetting the disputed documents, which I will come to in a minute.

55 I now want to say something about the parties.  The wife is aged 38.  She lives in the disputed property with the two children, who also spend time with their father.  As I mentioned, she is expecting her third child in April by the sportsman.  Her evidence is rather at the periphery of this case.  She was not involved in most of the transactions and, as I find, went along with what her husband suggested.

56 I have looked at her evidence with care.  In particular, I have in mind the unattractive phone call that she made, which was taped and in which she describes the man as a slipper, a very derogatory term in the culture of the parties, and the woman as a queen in the eyes of an English court, the implication being that she is driven by money and her evidence may be unreliable. 

57 I am not going to pass judgment on her moral behaviour, appalling though the husband and the father regard it as being.  She gave her evidence before me in an appropriate manner.  But, as I have said, it is of little determinative weight, save for, in particular, my acceptance about what she said about how she viewed the purchase of the home and her brother's contribution. 

58 I shall turn next to the father.  The father's evidence was revealing.  He is 75.  He says his memory is not as good as it was, but he is plainly still very much on the ball.  He came across rather differently from his written statements.  I had the very clear impression that the father was willing to give the husband whatever money he asked for at any time.  The father repeatedly said to me in evidence that everything he had was for his two sons and his two grandchildren.  As I have mentioned, the husband's brother is not married and he has no children.  He would rather see them comfortable during his lifetime than for them to receive everything upon his death.

59 The picture that was portrayed in writing of the father being a stern patriarchal figure who kept a tight rein on all financial matters and who was determined that his son should have no control of any funds simply did not match the gentleman who appeared in the witness box before me.  Whilst it is true that the husband had to ask the father for funds, I was not told of any occasion when the father refused to hand them over or ever sought repayment, and the figures that I have quoted above show how readily money was available. 

60 In the overall scale of the father's wealth, the amount that he was providing to the husband was very small.  I do not think that, prior to 2011, the father had any genuine anxieties about the ownership of the property, or any desire to keep the wife or husband away from ownership.  I find that it was never in the mind of either of them, prior to the breakdown of the marriage, that the father might wish to or could exercise any power whatsoever over the various premises, and nor was it in the father's mind that there might be circumstances where he could recover any funds.  As the father put it, "It is natural that everything will go to the husband and his brother and the children....Anything I can do for my grandchildren, I will do.....  When children work for their fathers, they work for themselves, because it will be theirs....  I was willing to renovate the property, even though I thought it was too expensive....  I wanted to see my sons comfortable, not just after my death, but during my lifetime".

61 It is, to my mind, an extraordinary feature of this case and of the case of the husband and the father that, despite the husband's gross abuse of trust on their cases, at no stage did the father ever express anger or challenge the husband.  Having seen the father, I do not believe that he would have said little or nothing and done nothing if his rights were being so blatantly mistreated. 

62 It is clear, to my mind, that the husband has enormous respect for his father and would not readily step on the wrong side of the line.  I do not think the husband would abuse the father's rights, any more than the father would stay silent if he had.  When it was asked of the father if he was cross about his son's repeated demonstrations or statements that he owned the property beneficially, the father's reply was "There can be misunderstandings between father and son".  This did not sound to me the reaction of a man who had been grossly ill-treated, as is suggested.

63 For the avoidance of doubt, I do not accept that the large advances of money which the father made to the husband were, in fact, deferred salary or payment of dividends, as the wife claims, for work that the husband had done for the father.  It was not that formal.  It was not a case of the father paying the husband money that he owed him.  The husband did work for the father and the father gave the husband money whenever asked.  It was in the discretion of the father to decline to give it, but he never did.  I, therefore, do not accept her assertion that these were payments of money to which he was entitled as of right.

64 I acknowledge that, in the past, the wife described the father as being honourable man, and I am sure that in many ways he is.  But it does not follow from that that his evidence that he was the beneficial owner of the properties has to be accepted. 

The husband
65 The husband is aged 37.  He has represented himself throughout this hearing and, therefore, inevitably I have seen a lot more of him than I saw of the wife and the father.  He is plainly an articulate and intelligent man.  He is also, if I may say so, longwinded, dogmatic and, at times, combative.  I also felt that, at times, he was deliberately deflective of questions, in particular in relation to documents, where he was keen to pass the blame to others, especially Mr. S, or when he became unaccountably vague.

66 In particular, I do not accept the husband's evidence that he did not bother to read or seek to understand the documents in which he declared himself to have a beneficial interest in companies, or that he relied wholly on his solicitor without bothering to check the documents that the solicitor sent him.  The husband is a man of many words and strong views.  In the witness box, he was extremely particular to make sure that he put his point across and everyone understood exactly what he was saying.  He did not give me the impression of being a person who relied without question on others to explain documents for him.  I reject his evidence that he simply sat back and let his solicitor misrepresent the position.  On the contrary, I find that he knew full well that he was being portrayed as the beneficial owner of the properties.

67 Both the husband and the father are sophisticated men of business.  Each has signed guarantees on many occasions and both are aware of their meaning.  The husband told me that he has on many occasions signed personal guarantees for his father's business, in which he says he has no stake.  This seems to me to illustrate the trust that existed between them.  Each provided assistance for the other without reservation and without qualification.

68 The husband says that Mr. S never asked for any documents about the beneficial interest of the companies.  I find this hard to believe.  The repeated statements that the husband was the beneficial owner of the shares seem to me far more likely to have come from direct answers given by the husband to Mr. S.  In the light of his answers, there would have been no reason for Mr. S to ask for further documents beyond the Agreement for Director Services (the "ADS").  The husband accepts that he did tell Mr. S that he wanted the FMH to be in joint names in the first instance.  The husband said he did not tell the father that that was his intention.  It was only after discussion with Mr. S that the decision was taken, in fact, to proceed in joint names up to exchange, and then complete in the company name.  There is no suggestion in the attendance notes that the change from individual names to a company name was intended to reflect a different view of beneficial interests.

69 I now come to the four documents, all bearing the date of 3rd December 2008.  During the conveyancing process for the purchase of number 6, the husband gave his solicitors, at their request, the ADS, which I have already mentioned.  This was dated 3rd December 2008.  I have no reason not to accept that as a genuine date, because it is known for a fact that it was in the conveyancing file, which very substantially predated the breakdown of the marriage.  As I have mentioned, it describes the husband as the owner of all the shares in the company, and is an agreement between Ms. A and the husband.  It would also have satisfied Mr. S that Ms. A had the authority to sign the documents that were necessary in the conveyancing and mortgage process on behalf of the company.  I see good reason why I should rely on that document.

70 It was the only document that was produced until December 2011, when Howard Kennedy, acting for the father, sent copies of three other documents to the wife's then solicitors.  They were not certified copies of the originals, which it is said the father had in his safe, but copies of what REL, the management company of IUL, had in its files.  Their contents came as a surprise to the wife's solicitors.  They were suspicious of the contents of the documents, as they appeared to show on their face that the father was the beneficial owner of the shares.  They sought the originals.  Only on 8th November 2012 were they provided with the Nominee Shareholders' Agreement ("NSHA") and the MSPA, and a new form of Director Services Agreement ("DSA"). 

71 The parties appeared before Mr. Bellamy QC (sitting as a Deputy High Court Judge) and obtained an order on 19th October 2012.  That order provided, at paras.2, 3 and 4, for the provision of original documents, and also the files in electronic form, so that their history of their creation could be traced.  That history is called its metadata.  I will now deal with the three documents individually.

72 The DSA: To my mind, it is a somewhat curious document.  It records on the face of it a recital, which says:

 "Whereas the shareholder [that is the husband] is the owner of the shares issued in the company held as nominee for and on behalf of the beneficial owner as follows, FZ [that is the father] 50 (50,000) [the word 'thousand' is not typed in] registered shares of US$1 each".

73 There are a number of other rather curious typographical errors in the document.  The shareholder is described, I think, throughout the document as in the plural, "shareholders", even though there was only one.  There are various references to "you", without any clear indication who "you" is.  The original document has never been produced.  Ms. A's signature has been ink jetted on.  It is signed by the father even though he is not a party to it. There is no explanation given to me at all as to how or why two versions so violently different of the same document, that is the ADS and the DSA, appear to have the same date, and why the husband should have given the ADS, rather than the DSA, to his conveyancing solicitors.

74 In relation to the DSA/ADS alone, there is a metadata record; that is the background electronic log.  No party has asked me to say it is conclusive, and I am sure they are right not to do so.  It is well-known that metadata records are wholly reliant on the accuracy of the computer clock and dating mechanism, which can be (and I am not for one moment saying that it has been) altered.  The metadata records that there was a document created in December 2008, and also one created in 2011, although the latter date might be explained possibly by the document having been forwarded from REL Seychelles to REL Geneva and being saved there, so as to give a false impression of a later creation.  It is simply not possible, as everyone agrees, for me to draw a conclusion as to when the documents were created, and there has been no expert evidence on this issue.  But I do know as a fact, for reasons that I have explained, that the ADS was in existence by about 2009, because it was in the conveyancing files. Faced with two conflicting documents, it is plain that I can only safely rely on the ADS. 

75 The NSHA bears the same date.  It is known to be an inaccurate date or a false date, because the husband accepts that he only signed it in about April 2009.  Despite the order, there is no metadata for it.  The document was emailed, so the husband says, to the husband, and he altered the template by, for example, putting in the names.  I refer to para.7 of his statement of 1st February.  There is no extraneous evidence before the court which links it as to coming into existence before November 2011, when a copy was provided by Howard Kennedy, the father's solicitors.  The husband says he backdated it to 3rd December 2008, because he thought that that was the right thing to do to make it consistent with the other documents.  It describes the father as the owner as the shares and the husband holding them on his behalf.

76 The MSPA: This document also bears the date of 3rd December 2008, but that is also a false date, because we know that it did not come into existence until autumn 2009.  That is known because, as Mr. Klein pointed out, the MSPA was drawn up by REL Corporate Services SA, an entity that did not come into existence in that form until autumn 2009, when companies such as REL became required to have MSPAs.  The document is signed by the father.  His clear and certain evidence was that he signed the document on the date that he wrote, 3rd December 2008.  Deliberately or otherwise, that evidence must be wrong. 

76 On 7th December 2009, REL wrote chasing the husband to sign the MSPA.  There is no metadata record for that document either, despite the order.  In the MSPA, the father describes himself as the economic and beneficial owner of the shares. 

78 The production of these documents has been a difficult process.  It has largely been conducted by Howard Kennedy on behalf of the father, and I wish to make it clear that I am not making the slightest criticism of them.  Their letters to REL have been ignored, or deliberately not responded to or only partially responded to.  I shall not go through them.  It is the wife's suspicion that the lack of cooperation from REL is as a result of their taking instructions from the husband as, she says, why else should they not deal with the enquiries emanating from the father.  I cannot draw any conclusion, beyond saying that I find it difficult to believe that the documents could not have been produced earlier and the metadata produced, if the husband had wanted to achieve that end.

79 So what am I to make of the documents, faced with the facts that I have described?  In particular I refer to (i) the fact that at least two of the documents bear false dates, that is the NSHA and the MSPA, and that no metadata has been produced, despite the order, (ii) the other document, that is the DSA, is in direct conflict with another bearing the same date, that is the ADS, and the original of the DSA has not been provided, (iii) the husband's provision of information to his solicitors that was wholly inaccurate on the case of him and his father as to the beneficial owner of the shares, and indeed, much worse deceptive of the lending institution, and (iv) the inconsistency of the documents with the history of the property transactions to which I have referred and from which the father has been so totally excluded, other than as a provider of some of the funds.

80 It must follow that inevitably the husband's case is that either he had been practising a deception on his own father and the lending institutions, the latter because they would never have lent to someone who had no beneficial interest in the property, or that the husband was not being dishonest with the lending institutions and others, but is, with his father's involvement, seeking to mislead this court as to the true ownership, so as to stop his wife having a claim on the property, either directly or through him.

81 Stepping back, I have asked myself many questions, but including these:

(i) If, as I find, the father paid nothing to the purchase price, as opposed to the refurbishment of the FMH, why should it have been agreed that he would have any, let alone 100 per cent, of the beneficial interest of the property?

(ii) What is in it for the father?  He is an enormously rich man.  Why should he want an interest in his son's property?  After all, at the time of these transactions, his upset at the marriage had long since vanished.

(iii) If, as I find, he had no interest in COG, the first property holding company, why should things change for the second company, IUL?

82 As I have said, I am convinced that the ADS is genuine.  No other document has a clear provenance for the reasons given.  Whenever the other documents were created, and I cannot put a date on it, other than to say they were subsequent to 3rd December 2008, thus subsequent to the date they bear, I reject them as being genuine, in the sense of accurately setting out what the intention of the parties to them really was. 

83 It follows from what I have said that those three documents, the NSHA, the MSPA and the DSA, are, in my judgment, shams, in the sense that they profess to show that the husband holds beneficially the shares in IUL on trust for the father.  I find there was never any intention on the part of the husband or his father or the company for the father to have an interest in the FMH or in IUL.  I find it for the reasons that I have given, and I find that those three documents to which I have referred were created to give a false picture, and to mislead the court and/or the wife.  These are, I believe, the tests as set out in Snook v. London & West Riding Investments Ltd [1967] 2 QB 786 and in A v. A & St George Trustees Limited (Interveners) [2007] 2 FLR 67. 

85 I turn now to the beneficial ownership, and return to the questions posed by Holman J. for me to answer.  Having rejected the suggestion that the beneficial ownership vests in any way in the father, I have to ask myself whether it is vested in IUL or in the husband, or in the husband and the wife.

86 This has not been explored in great detail before me.  I have been referred to Sekhon v. Alissa [1989] 2 FLR 94, and the case of Lavelle v Lavelle & Ors [2004] 2 FCR 418, both cases where members of the family had transferred property to another family member for tax reasons, but it was found that the beneficial ownership remained with the money provider.  Neither were referred to or cited in Ben Hashem v. Ali Shayif [2009] 1 F.L.R. 115, an important decision of Munby J., as he then was, who held that the properties were beneficially as well as legally held in a company, because otherwise the purpose of the tax saving scheme would fail.  In Prest v.Prest [2011] EWHC 2956 (Fam), Moylan J.'s finding that a property remained beneficially owned by the husband, despite its transfer to a third party name, survived intact an attempt to appeal that finding.  I have to say I struggle to reconcile these authorities.  It may be that each is fact specific.

87 In this case, I draw particular attention to:

(i)  The absence of any clear tax advantage in the scheme.  The rationale of the decision in Ben Hashem is not established in this case.

(ii) The personal liabilities taken out by the husband and the wife in respect of the mortgage in 2009, when the legal interest was transferred.

(iii) The money that they put in by way of loan from QR.

(iv) The absence of any consideration for any transfer of the beneficial interest.

(v) My finding that the property was initially going to be bought in the names of the husband of the wife, and the husband's assertions to the wife that it would make no difference whether it was in their name or in a company name.

(vi) The absence of any genuine third party involvement.

In all the circumstances, therefore, I find that the beneficial interest did not pass to IUL. 

88 That simply leaves the question of whether it was with the husband or with the husband and the wife.  I think this matters little, as the court has redistributive powers available under the Matrimonial Causes Act.  But, in the light of the matters I have set out immediately above about the liabilities that they took on, what was said between them by way of initial intention, and the contribution of monies, it seems to me that it follows that I should answer the question that the property is beneficially owned by the husband and the wife. 

89 Having given judgment in this matter, there is now the anticipated application for costs made by the wife and resisted by Mr. Singleton on behalf of the father, but without instructions, solely and understandably only on the issue of whether the costs should be on an indemnity or standard basis, and opposed in principle by MZ, the husband, on the basis that the wife has been dishonest in all sorts of ways, other than those that have arisen during the course of this hearing.

90 The principles are plain.  Costs in this sort of hearing should follow the event.  Therefore, an order for costs must be made.  The principles of no order for costs that apply typically in financial remedy cases does not apply to cases such as this, where there is a preliminary issue involving a third party.  So I shall make an order for costs, and then the only question, therefore, is what is the basis.  Should it be standard or should it be indemnity?

91 To my mind, it is appropriate that the order for costs should be on an indemnity basis.  I have found as a fact that, on the critical issues, the husband and the father set out to mislead the court and the wife, and at all times their case was based on a falsehood, namely that the beneficial ownership of the property was with the father.  They have relied on documents that I have found to be a sham, and that in itself is sufficient for me to come to the conclusion that the defence, therefore, has been conducted in a way that is underhand and deceitful.  Therefore, in the circumstances, it seems to me appropriate that I should make an order for indemnity costs. 

92 If I needed more support in that conclusion, then Mr. Dyer points me to the litigation conduct of the defendants and, in particular, the failure to comply with orders for directions.  To my mind, that in itself would not have justified an order for indemnity costs in itself.  But the findings that I have made, in my view, do justify an order for indemnity costs.

93 The request for payment on account in the sum £150,000 seems to me to be plainly appropriate in the circumstances.  It amounts, on the statements of costs that I have seen on behalf of both the wife and the father, to less than 25 per cent of the total costs that have been incurred.  Mr. Singleton, perfectly reasonably, in the absence of instructions, says could he have longer than 14 days for his client to pay, but, having heard what I have about the father's wealth, I am not going to allow longer than 14 days.  I am quite sure that someone can convey the bad news to him, so that he can make arrangements within that time.  Accordingly, I grant the application on behalf of the applicant in the terms that she sets out at para.6.







24.05.09         (4:52)   -           H instructs solicitor that he has agreed to purchase FMH.  "Please note the property will be purchased my name and my wife's name, not [IUL] ".   We have agreed to exchange and complete immediately.


26.05.09         (4:53)   -           Valuation report sent to W.


26.05.09         (4:86)   -         H instructs solicitor that "lease extension will be assigned to us". Property will be in IUL name "as you have advised me. Ideally, please exchange in my name as you advised". [There is no note of the advice]


2.06.09           (4:87)              Selling agents memo describes "Purchaser: H and W (to be acquired in a company name)"


08.07.09         (4:111) -           NBAD to H: "We understand that you have instructed solicitors in London to act for you and to establish a Panamanian company to purchase the property….. when responding may we also ask for a brief resume of your business interests in [West Africa] and elsewhere". 


17.07.09         (4:116) -           ING write to H and W at West African Compound making a mortgage offer at £4.4 million. Borrower described as H and W "to enable the borrower to provide a loan to [IUL] …. to purchase real estate at [FMH] ".


                                                Borrower has to make first payment of £700,000 on 01.08.10 or lodge assets to that value (117).


                                                Lender requires as collateral pledge of shares of IUL, Deed of Guarantee from IUL and pledge of portfolio of assets from borrower (118).


                                                H and W declare they are jointly and severally liable for all the obligations under the agreement (120).


                                               Agreement signed by H and W in London and on behalf of IUL in Seychelles (127).


29.09.09         (4:137) -          H expresses his surprise that banks say that he has not pledged €2 million with the bank.


30.09.09         (4:138) -          H "being the shareholder and beneficial owner of all shares" in IUL authorises Ms A as sole director of IUL to sign various documents including equitable mortgage and guarantee to ING. 


19.10.09          (4:148) -           Mortgage offer to H and W in reduced sum of £3.9 million.


27.10.09          (4:149, 151)     ING reduce mortgage offer again to £3.8 million.  Documents duly signed by H, W and on behalf of company by Ms A.


28.10.09          (4:155) -           ING offer short term loan of £100,000 to be repaid by 31 January 2010. Documents signed by H, W and on behalf of company.


10.11.09          (4:163) -           Guarantee signed by IUL to ING Bank including recital that ING lent money to H and W in order to fund purchase of the property;

                                                Equitable mortgage between H, IUL and ING and H charges his shares in IUL to ING (217). H represents that he is acting as principal and not as agent or trustee (225) and is sole legal and beneficial owner of IUL shares (226)  Resignation letter as a director by Ms A (240) and Share Transfer Form (241) completed and held by lender.





16.08.10          (4:283) -           H gives detail of property to NBAD including "as mentioned when we spoke the plan is to try to sell it in the next 12 months after renovation is completed … and purchase a different property".


19.08.10          (4:282) -           NBAD write back to H saying that "You kindly advised that [FMH] is owned by you, through an overseas company. …".    


14.09.10          (4:320) -           NBAD meet with H and offer financing terms for remortgage subject to formal credit approval, documentation (including a satisfactory net worth statement) and valuation.


27.09.10          (4:320/1)-        H sends NBAD the completed draft financial statement which contains the following:


                                                Assets  : Cash in bank £1.25 million

                                                Personal property in real estate in UK, Middle East and West Africa: £9.5 million (principally FMH) and annual income of £180,000 net salary and dividends from family business in West Africa of £400,000 - £500,000 per annum net (321).


10.11.10          (4:333) -           Bank File Note stating that in 2009 H was introduced to NBAD but due to shortage of time purchase of FMH was financed through his existing bankers ING through a "BVI SPV ([IUL]) wholly owned by H".  H required a bank account to fund his personal expenditure which was to be funded entirely from his personal resources in Middle East.


                                                "H is a director for [JCS]Limited. He currently receives an annual salary of £180k (original employer letter held on file)".


                                                H provided a financial statement in September 2010 showing his net worth at £6.9 million.


30.11.10          (4:335) -           NBAD Customer Profile. H described as "100% beneficial owner", much detail given of his wealth.  H seeks to refinance FMH "owned by [IUL] (a BVI registered company wholly owned by H). Property used by H and W and young family.  It is undergoing a complete refurbishment (£500k) and next year H will decide whether to retain the flat or sell it and acquire a larger London residence for the family". Sanction to this application is strongly recommended by NBAD who describe H as "undoubtedly a high net worth individual from a well-known and highly respected Middle Eastern family … H undoubtedly has the personal financial means to fully support his company's financial commitments under the proposed terms due under this facility".


02.12.10          (4:344) -           NBAD (copying in H) "As you are aware the Bank is seeking to provide finance to H's company, secured by the subject property …".


26.01.11          (4:353) -           Mortgage offer document in sum of £4.375 million. Security required includes unlimited personal guarantee from H.  Documents signed by H on behalf of himself and on behalf of company. [Date of signature not clear but appears to be after 10.02.11].


09.02.11          (4:363/4)         NBAD require from H various paperwork including "details of all (the company) beneficial owners identities and their permanent addresses. Where there are nominee shareholders details of the company's beneficial owner's identities and their permanent addresses are required for each individual who owns 20% of more of the company …".


10.02.11          (4:362) -           H replies and confirms that "Nothing has changed since the deal was completed in November 2009".



10.02.11          (4:365) -           H says that details of directors' addresses will be sent tomorrow and that he has already forwarded proof of identity: "please note the company structure has not changed since the last transaction we did in 2009 with ING".


18.02.11          (5:371) -           H's solicitor to bank "I am also sending to you H's identification as the sole beneficiary and shareholder in [IUL] along with Ms Antat's identification as the sole director and secretary ….".


09.03.11          (5:380) -           Statement from the Grosvenor Estate showing no sums paid for service charge or management since mortgage. 


09.03.11          (5:381) -           ING (now Julius Bar) write to IUL complaining about lack of payment.


24.03.11          (5:393) -           Julius Bar chase H and W and threaten to enforce guarantee.


31.05.11          (5:481) -           Remortgage completed and £106,283 surplus transmitted to personal account of H and W.


23.09.11                                  F writes to give W and H notice to vacate within 48 hours


04.11.11          (5:485) -           Solicitors point out that the share in the management company is in the name of H and not IUL.