Mustafa Erdem Baldudak v Mark Matteo
[2024] EWHC 167 (Ch)
Douglas Stuart Ponsford & Anor v Mesud Habib Sali & Anor
13 December 2023
[2023] EWHC 3360 (Ch)
High Court
Two business partners fought over who owned a house and other stuff after they broke up. Even though there weren't proper papers, a judge decided one partner (Mr. Sali) actually owned the house because of how things happened. The other partner (Mr. Ponsford) tried to get a lot of money for managing things after the break-up, but the judge said he needed more proof and will decide later.
Key Facts
- •Mr. Ponsford and Mr. Sali were equal partners in an informal partnership, 'Move on Now,' from October 2010, later becoming equal shareholders and directors of Move on Now Ltd.
- •The partnership used 'Assisted Sale Agreements' (ASAs) to acquire property.
- •In 2021, Mr. Ponsford discovered Mr. Sali had taken substantial money from the business, leading to the dissolution of the partnership on December 1, 2021.
- •A dispute arose concerning the ownership of 2 Walsingham Road, Orpington, and other partnership assets.
- •Mr. Sali relocated to Turkey in 2021.
- •A declaration of trust concerning 2 Walsingham Road was signed by Mr. Ponsford in April 2021.
Legal Principles
Section 53(1)(b) of the Law of Property Act 1925: A declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will.
Law of Property Act 1925
An express trust requires the intention to create a trust, which can be inferred from words and actions. Section 53(1)(b) requires written evidence, but the writing need not create the trust; it only needs to manifest and prove its existence.
Case Law and Law of Property Act 1925
A trust of land may be declared years before being manifested and proved in writing; the writing retrospectively validates the trust.
Case Law
A declaration of trust does not need to be a deed to be valid; it only needs to satisfy Section 53(1)(b) of the Law of Property Act 1925.
Case Law
A trust of the proceeds of sale of land is considered a trust respecting land or an interest in land under Section 53(1)(b).
Case Law and Lewin on Trusts
The burden of proof lies on the party asserting a fact.
Case Law
CPR rule 69.7(4): In determining the remuneration of a receiver, the court considers time spent, complexity, exceptional responsibilities, effectiveness, and value of assets.
CPR rule 69.7(4)
PD69 paragraph 9.4: An application for receiver remuneration must be supported by written evidence showing the basis for the claim and its justification, and a certificate of reasonableness.
PD69
Outcomes
2 Walsingham Road is held by Mr. Ponsford on trust for Mr. Sali.
The court found sufficient evidence to establish that Mr. Ponsford intended to hold the property on trust for Mr. Sali from 2013, corroborated by their subsequent actions. The April 2021 declaration of trust, although not a formally executed deed, satisfied Section 53(1)(b) of the LPA 1925 as written evidence of the pre-existing trust.
No contractually binding interest rate of 20% was agreed.
The evidence supporting the 20% interest rate claim was deemed poor, contradictory, and insufficient to prove an agreement. Even if a promise existed, it lacked consideration.
13 Mill Lane is not a partnership asset.
This was common ground between the parties.
The claim for Mr. Ponsford's remuneration as receiver and manager is adjourned to a later date.
Mr. Ponsford's claim was deemed grossly excessive and lacked sufficient evidence of time spent and proportionality. The court provided guidance on how to properly support a future claim.
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