Dr Morteza Rajabieslami v Sam Tariverdi & Ors

Where shares in a company holding an asset are transferred to another person or company, the court may find a resulting or express bare trust where the evidence shows that beneficial ownership was intended to be retained. Documentary wording referring to consideration will not necessarily determine the beneficial ownership where the surrounding circumstances make that interpretation unrealistic.

A trustee’s unauthorised sale of trust property constitutes a breach of trust. Equitable compensation may include the property’s value at the date of sale and profits made from exploiting it, but a claimed opportunity loss must be proved by credible evidence and remains subject to the actual commercial circumstances.

The claimant alleged that the defendants held shares in Desero Shipping Corporation on trust for him. Desero owned the oil tanker ARINA. The claimant relied on a Declaration of Trust dated 18 April 2019 and an Amendment dated 3 July 2019. The defendants contended that the documents were forgeries and that the shares had been transferred in consideration for transactions involving Persian carpets.

The defendants’ Defence was struck out and they were debarred from defending after failing to comply with an unless order. The principal issues were whether the trust documents and the alleged carpet-transaction documents were genuine, whether the sale of the Vessel constituted a breach of trust, and what compensation was recoverable.

The claim for breach of trust succeeded. The court found that the Declaration of Trust and Amendment were genuine, while the Rug Transaction Documents were forgeries.

1. The transfer of Desero’s shares and directorship on 3 July 2019 was consistent with an intention that legal ownership should pass to the defendants’ companies while the beneficial interest remained with the claimant. The shares were therefore held on a bare trust for the claimant from that date. Melousa was the direct trustee. Mr Tariverdi knew of its obligations, and direct trust obligations also arose in relation to Passa Navigation’s appointment as director.
2. The sale of the Vessel to Last Voyage on 9 March 2022, without the claimant’s knowledge or consent, was indisputably a breach of trust. Mr Tariverdi, Melousa and Passa Navigation were liable, whether by breach of trust or, in the case of Mr Tariverdi and arguably Passa Navigation, by knowing assistance.
3. Alternatively, even if the trust documents had not been genuine, the forgery of the Rug Transaction Documents and absence of any credible consideration meant that the claimant could not realistically have intended to make a gift of the Vessel. The appropriate inference would have been that the shares were transferred to be held on trust.
4. Equitable compensation for the Vessel was assessed at its actual sale price on 9 March 2022, US$7,392,995.20. The profits made from transporting the cargo to The Bahamas were recoverable at US$4,886,572.95 after operational costs.
5. The claim for prospective trading profits from January to 9 March 2022 failed. The evidence did not establish the alleged profits, and the Vessel was too old to trade. The claimant’s and Ms Sanchouli’s inclusion on the US sanctions list would also have made profitable employment highly difficult.

The total recovery was US$12,279,568.15. The defendants’ application to be heard after debarring was rejected.