Cobussen Principal Investment Holdings Ltd v Akbar & Ors

Whether a company holds property beneficially for its controller is a highly fact-specific question. The court must apply the ordinary principles and presumptions of equity, including those relating to gifts and resulting trusts. Relevant factors may include payment of the purchase price, control of the acquisition, the company’s lack of independent business purpose, occupation by the controller or family without rent, and the absence of evidence that payments were loans or capital contributions. Where those factors establish that the controller funded and effectively controlled the arrangement, the presumption of a resulting trust may remain unrebutted.

The claimant sought to make final a charging order over a valuable leasehold property. The order secured a judgment debt owed by the first defendant, Mr Akbar, following proceedings in the Eastern Caribbean Supreme Court, BVI. The legal title to the property was held by the second defendant, Legacy Holdings Limited, whose share was held through the Garden Trust. Mr Akbar and Legacy disputed that he had any beneficial interest, asserting that his aunt had funded part of the purchase and that the trust structure owned the property.

The central issue was whether Mr Akbar had a beneficial interest capable of being charged, including whether Legacy held the property on resulting trust for him and whether he was the ultimate beneficial owner of Legacy and the trust structure.

1. Declarations and charging order. The court found that Mr Akbar supplied the deposit, guaranteed and funded the mortgage obligations, controlled the property and the corporate structure, and used the property and refinancing proceeds for his own purposes. The declarations sought by the claimant were granted and the interim charging order was made final.
2. Evidence and factual inference. The evidence of Mr Akbar and Mrs Mumtaz was rejected. There was no credible evidence that Mrs Mumtaz supplied the alleged £643,000 contribution. The court found that Mr Akbar had been in sole effective control of the property and Legacy, and that the recorded loans and formal trust arrangements did not reflect the practical reality.
3. Resulting trust. The question was one of fact, determined by careful analysis of the circumstances. Applying the principles identified in Prest v Prestodel Resources Ltd [2013] 2 AC 415, the court held that Legacy held the beneficial interest in the property on resulting trust for Mr Akbar. His intention when funding the purchase and meeting the mortgage obligations was that he, and no one else, should be the ultimate beneficial owner.
4. Relevant factors. The court adopted the approach in NRC Holding Limited v Anatoly Danilitiskiy and others [2017] EWHC 1431 (Ch). The relevant considerations included the company’s incorporation to hold title, its lack of other operations or assets, the controller’s instructions arranging the acquisition, payment from his resources without evidence of a loan or capital subscription, occupation as a family home, and the absence of rent.
5. The court also accepted as apt the treatment in Arab Investment Syndicate v Hiseman (unreported, 15 February 1994) of circumstances in which the parties’ common intention was inconsistent with the alleged retention of beneficial ownership. The defendants’ explanations having been rejected, the presumption of a resulting trust was not rebutted.

First instance decision. The judgment records earlier procedural orders concerning disclosure and the interim charging order, but no appeal.