Saeed & Saeed v Ibrahim & ors


Reference:
[2018] EWHC 1804 (Ch)

Date:
3rd August 2018

Court:
High Court

Facts:

In 2005 Mr Saeed anticipated his wife might divorce him. He and the Defendant Mr Ibrahim together engaged in a classic ‘warehousing’ fraud to liquidate all of Mr and Mrs Saeed’s matrimonial assets and conceal them. Signatures were forged on transfer and mortgage deeds, and Mr Ibrahim received over £590,000 in cash, which he then used to purchase properties in the names of his sons. Some properties changed hands several times, through various nominees. After all of their matrimonial assets had been hidden in this way, Mr Saeed went to Pakistan for 5 years. Upon his return, he demanded his assets back from Mr Ibrahim, who denied any knowledge of the fraud and refused to repay anything.

 

Mr Saeed was subsequently reconciled with his wife and together they brought proceedings to recover property, rental income and cash worth over £800,000. The proceedings were defended on the facts, but the Defendants also relied upon the defence of illegality – ex turpi causa non oritur actio – and limitation, since most of the fraud had occurred nearly 9 years before issue of proceedings.

 

Following an unsuccessful application for strike-out by the Defendants - [2018] EWHC 3 (Ch) – the matter proceeded to an 8-day trial in the Chancery Division. Giving Judgment, HHJ Simon Barker QC made scathing comments about the First Defendant, calling him “devious and unreliable”  – “To describe [him] as an unimpressive witness would fall well short of the mark” – and found that he was constructive trustee of over £290,000, and that his son and daughter-in-law were constructive trustees of a residential property.

 

Dealing with the illegality argument and applying the guidance from the Supreme Court in Patel v Mirza [2016] UKSC 42, he found that Mr Saeed was guilty of deliberate and serious illegal conduct which was central to the arrangements relied upon. However, he found that Mr Ibrahim was equally guilty. He concluded that to leave very substantial sums and property in the hands of Mr Ibrahim and his family “would offend both policies underpinning the illegality principle and condone and produce an unjust outcome”.

 

As to limitation, he concluded that Mr Ibrahim, or his sons acting as his nominees, had either received the sums claimed as an express trustee, or had deliberately concealed that conduct from Mr and Mrs Saeed. He found that the knowing receipt of trust property by Mr Ibrahim as attorney for his sons amount to a breach of duty in circumstances where it was unlikely to be discovered for some time for the purposes of s.32 Limitation Act 1980.

 

Aidan Briggs appeared for the successful claimants, instructed by John Kenneally of Miller Rosenfalck LLP

 

View judgement here


Judge:
HHJ Simon Barker QC

Comment:

Warehousing frauds of this kind are becoming increasingly common, as wealthy but unscrupulous actors seek to put their assets beyond the reach of creditors or spouses. What was unusual in this case was the intricate web of family connections, in a very closed traditional muslim community, used to achieve this purpose. Bags of cash were deposited at houses, powers of attorney were created in order to purchase properties in the names of family members, and bank statements in different names were used interchangeably to create a complex tracing exercise. There were also certain solicitors used on multiple occasions on interchangeable sides of the same transaction. It was also a case in which the judge concluded that the “actual unreliability of almost everyone who gave oral evidence” was a hamper to establishing the true facts.

This made preparation of the claim a careful forensic exercise, with a great deal of detailed scrutiny required of every document, which paid off in cross-examination.

 

Legally, the case is a rare example of the principles from Patel v Mirza [2016] UKSC 42 being applied at trial, rather than on a strike-out application, and placing some emphasis on the minority view of Lord Neuberger that in circumstances where both sides are equally culpable, the best course is to restore the status quo.

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