Mohammed Khalid Raja & Anor v ATM Law & Ors
[2024] EWHC 2782 (Ch)
HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v Ronald William Gibbs & Ors
5 December 2023
[2023] EWHC 3183 (Ch)
High Court
A creditor won a court case to sell a property owned by a debtor. The debtor tried to claim part ownership of the property wasn't actually his, but the court didn't believe him because of inconsistencies and suspicious behaviour, such as destroying a key document. The court ruled that the property had to be sold to repay the debt.
Key Facts
- •HRH Princess Deema Al Saud (Claimant) obtained a charging order against a property (36 Kings Road, Richmond) owned by Ronald Gibbs (First Defendant).
- •The debt owed is approximately £582,000 plus US$2,076,000.
- •The defendants contested the claim, arguing a Declaration of Trust granted a beneficial interest to Mrs. Gibbs and their children.
- •The court questioned the authenticity of the Declaration of Trust, citing inconsistencies and lack of supporting documentation.
- •Mr. Gibbs's conduct, including misleading statements and lack of cooperation, was heavily criticized.
- •The property is an investment property, not the defendants' primary residence.
- •The court considered various factors under CPR 73.10C and TLATA 1996 in determining whether to order a sale.
Legal Principles
Court's power to order sale of property under a charging order.
CPR 73.10C
Factors to consider when exercising discretion to order sale under CPR 73.10C (e.g., size of debt, debtor's conduct, availability of other assets).
CPR 73.10C and case law (Packman v Mentmore, Barclays Bank v Hendricks)
Consideration of interests of occupiers under TLATA 1996 when exercising discretion to order sale.
TLATA 1996, sections 14 and 15; case law (Wells v Pickering, Close Invoice Financing v Pile)
Principles regarding sham trusts.
Lewin on Trusts, Snell’s Equity, Hitch v Stone
Constructive trusts and common intention.
Cooke v Head, Jones v Kernott, Lewin on Trusts
Section 17 of the Married Women's Property Act 1882.
Section 17 of the Married Women's Property Act 1882; Stack v Dowden
Compatibility of charging order enforcement with ECHR Articles 1 and 8.
Close Invoice Financing, National Westminster Bank v Rushmore
Outcomes
The court found the Declaration of Trust to be inauthentic.
Lack of contemporaneous documentation, inconsistencies in the defendants' evidence, Mr. Gibbs's prior representations of sole ownership, and the suspicious destruction of the original Deed.
The court rejected the claim for a constructive trust in favour of Mrs. Gibbs.
Insufficient evidence of common intention or detrimental reliance, and the significant change in legal principles since Cooke v Head.
The court ordered the sale of the property.
The significant debt, Mr. Gibbs's contumelious conduct and failure to pay, the lack of readily realisable alternative assets, and the investment nature of the property.