Identification of beneficial interests arising from a gratuitous transfer of property can be identified: i) from any written or oral declaration; ii) failing that from evidence of a common intention as to such ownership, and; iii) if none, as a last result, to presumptions of advancement or a resulting trust.
The High Court has considered such issues in determining what property was available for the purposes of a final charging order in Lenkor Energy Trading DMCC v Puri and another [2023] EWHC 2979 (KB).
The case concerned the beneficial ownership of two houses at 8 and 28 Brendon Street, W1, registered in the names of Energy Plus Ltd, which the claimant asserted were beneficially owned wholly or in part by the defendant, Puri. Lenkor was granted summary judgment in proceedings against Puri for around £38.4m in January 2020 and interim charging orders had been made in August 2022.
In 1996, Puri’s father, Mazhar, declared he had formed Energy, a company registered in the Cayman Islands, for personal and family investments and that he had allocated £1.2m for the purchase of properties in London. Puri was appointed to purchase and manage such properties for the family’s benefit. Number 8 was purchased in 1996 for £360,000 and number 28 in 1997 for £362,500. Members of the family occupied number 8 when they stayed in London and rooms in number 28 were let.
The annual returns between 1998 and 2002 showed the shares in Energy in the name of two companies in Jersey. All shares were transferred to Puri in 2003 and cancelled in 2015 with 100 new shares being issued to his son, Mohammed.
The court decided that Mazhar had funded the purchase price of the properties. There was no written or oral declaration of trust but the 1996 document as a matter of construction pointed to an objective and subjective intention that Mazhar was to own the properties beneficially and so there was a presumption of a resulting trust in his favour.
There was insufficient evidence that Energy was intended to be more than a bare trustee. Following Mazhar’s death, intestate, in 2003 Puri received 25% of his father’s estate, his three siblings receiving the remaining 75%, which was consistent with the 1996 document. There was insufficient evidence to support any agreement that Irfan was entitled to any more or that he had transferred his interest to Mohammed in 2014. Lenkor was entitled to a final charging order over Puri’s interest in both properties.
Louise Clark is a property law consultant and mediator
