Mustafa Erdem Baldudak v Mark Matteo
[2024] EWHC 167 (Ch)
Lenkor Energy Trading DMCC v Irfan Iqbal Puri
23 November 2023
[2023] EWHC 2979 (KB)
High Court
A company owed money to Lenkor. The company's owner's father bought houses, using a company to hold the title. After the father died, the owner still had a share of the houses. Lenkor successfully claimed a portion of the houses' value to recover their debt.
Key Facts
- •Lenkor Energy Trading DMCC (Lenkor) sought final charging orders against Irfan Iqbal Puri's beneficial interests in two London properties owned by Energy Plus Limited (Energy).
- •Energy contested Lenkor's claim, arguing it was the beneficial owner or that Irfan held only a limited interest.
- •The properties were purchased in 1996 and 1997 by Energy, funded by Mazhar Iqbal Puri (Irfan's father).
- •A 1996 document declared Mazhar's ownership of Energy and appointed Irfan as attorney to manage properties for the family.
- •In 2017, Irfan declared a beneficial interest in the properties in an affidavit, estimating its value.
- •Mohammad Puri (Irfan's son) claimed to have acquired Irfan's interest in 2014, partially paying it off in 2015.
- •Lenkor obtained a judgment against Irfan in 2020, leading to the current charging order application.
- •Extensive evidence concerning the ownership and funding of the properties and shares was presented, including corporate records, bank statements, and witness testimonies.
Legal Principles
Beneficial ownership follows legal title unless a trust is established.
General principles of equity
Resulting, implied, or constructive trusts are exceptions to the writing requirement for interests in land.
Law of Property Act 1925, Section 53(2)
Presumption of resulting trust: when property is purchased in one name but funded by another, a resulting trust is presumed in favour of the funder unless rebutted.
Equity principles
In cases of nominee company acquisitions, the court considers evidence of actual intention, inferring a resulting trust in the absence of clear contrary evidence.
Prest v Petrodel, NRC v Danilitskiy, SFO v Litigation Capital
Dispositions of equitable interests must be in writing (except for resulting, implied, or constructive trusts).
Law of Property Act 1925, Section 53(1)(c)
Outcomes
The court found Mazhar Iqbal Puri funded the acquisition of the properties.
Evidence showed Mazhar's wealth and the 1996 document indicated his funding. The lack of other documentation did not outweigh this evidence.
The court found a resulting trust in favour of Mazhar existed.
Mazhar funded the purchase, and there was insufficient evidence to rebut the presumption of a resulting trust in his favour. The court considered the modern approach in Prest v Petrodel and subsequent cases, which prioritizes evidence of actual intention but presumes a resulting trust in the absence of contrary evidence.
Irfan held a 25% beneficial interest in the properties after Mazhar's death.
The court considered various scenarios (will, intestacy, family agreement) and found the most likely scenario was Irfan inheriting 25%, supported by the 2017 affidavit's specific figures and the lack of evidence contradicting this.
The court rejected Mohammad's claim of a 2014 agreement.
Lack of documentation, inconsistencies with Irfan's affidavit, and the inherent improbability of such a large undocumented transaction led to the rejection of this claim.
Final charging orders granted to Lenkor over Irfan's 25% beneficial interest.
The court found Irfan had a 25% beneficial interest and Lenkor was entitled to a charging order over that interest.