Maghsud Azhdari v Farhang Adjari
[2024] EWHC 2824 (Ch)
Mustafa Erdem Baldudak v Mark Matteo
31 January 2024
[2024] EWHC 167 (Ch)
High Court
Two business partners fought over who owned their building. One partner (Claimant) paid for the whole thing. Although the money went through another company, the judge decided the paying partner owned it all. The other partner (Defendant) had already agreed in an earlier case that the Claimant paid for it, so the judge wouldn't let him change his mind now. The Defendant lost.
Key Facts
- •Mustafa Erdem Baldudak (Claimant) and Mark Matteo (Defendant) were 50/50 partners in a joint venture.
- •Dispute over beneficial ownership of a commercial property (the 'Property') purchased in 2016 and held in joint names.
- •Purchase funds originated from PCB Centres Limited (PCB), a company now dissolved.
- •Claimant argues for sole beneficial ownership based on sole contribution to purchase price.
- •Defendant claims joint beneficial ownership based on PCB's intention and contemporaneous actions.
- •Previous proceedings determined that Claimant's £1 million contribution was a loan, not an investment, and that Defendant was unlawfully excluded from HTS.
- •These proceedings concern the beneficial ownership of the Property, separate from the previous proceedings focusing on HTS.
- •The Claimant's WhatsApp messages for a crucial period were not disclosed, raising concerns about potential withholding of evidence.
Legal Principles
Resulting Trust
Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669
Quistclose Trust
Barclays Bank v. Quistclose Investments Ltd [1970] AC 567; Twinsectra v Yardley [2002] 2 AC 164
Issue Estoppel
Arnold v National Westminster Bank Plc [1991] 2 AC 93; Spens v IRC [1970] 1 W.L.R. 1173
Election/Appropriation and Reprobation
Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320
Outcomes
Claimant's claim succeeds.
The court found the Claimant solely funded the Property purchase, despite the funds passing through PCB. The Defendant's actions in previous proceedings, including agreeing to the deduction of the full property cost from the Claimant's loan account, and the lack of evidence to rebut the presumption of a resulting trust in the Claimant's favour, led to this decision.
Defendant's counterclaim dismissed.
The Defendant's counterclaim was dependent on his successful challenge to the Claimant's claim, which failed.
Declaration that the Property is held on a resulting trust for the Claimant alone.
The court found that the Claimant solely provided the purchase price and that the Defendant failed to rebut the presumption of a resulting trust.
Order for Defendant to transfer his legal interest in the Property to the Claimant.
This is a direct consequence of the resulting trust finding.