Mohammed Khalid Raja & Anor v ATM Law & Ors

A party relying on a trust deed to establish that a registered proprietor has disposed of a beneficial interest bears the burden of proving the disposition. The court may assess authenticity by considering the absence of the deed from earlier documents, failure to produce originals, the absence of supporting contemporary evidence, inconsistencies in the associated case, and the failure to call a key independent witness. Where that witness’s evidence is untested and no adequate explanation for non-attendance is given, an adverse inference may be drawn and the evidence may be given no weight. On the evidence, the alleged deed was made after an interim charging order to defeat recovery of a judgment debt.

The claim concerned two preliminary issues arising from an application by the third defendant, a judgment creditor of the first claimant, for a charging order over 45 Morrab Gardens. The first claimant was the registered proprietor and relied on a purported trust deed dated 14 March 2008, asserting that he held the property for his wife and children and retained no beneficial interest.

The claimants had to establish that the deed was genuine and effective. The court considered documentary and witness evidence, including the deed, a similar deed relating to an adjoining property, later dealings with the property, and the failure of the deed’s alleged independent witness to attend court. The second preliminary issue concerned the effect of the second claimant’s bankruptcy and subsequent disclaimers, but its determination became unnecessary.

1. First preliminary issue: the claimants failed to prove that the first claimant had disposed of his beneficial interest in 45 Morrab Gardens by the purported trust deed.
2. The deed’s alleged independent witness was a key witness. He did not attend any of the listed hearings, and no satisfactory explanation was provided. The court drew an adverse inference and gave no weight to his evidence, which had not been tested by cross-examination.
3. The deed was first mentioned only after the interim charging order, almost ten years after its purported date. Neither the deed nor the similar deed relating to the adjoining property was produced in original form. The explanation that the originals had been given to the second defendant was untested, unsupported by contemporaneous documents and rejected.
4. The factual basis for the deed, including the alleged funding of renovation works and the works themselves, lacked documentary support. The claimants’ pleaded case concerning the adjoining property was also inconsistent with reliance on the similar deed and instead alleged a constructive or resulting trust. That inconsistency strongly indicated that the deeds did not exist when the earlier pleading was made.
5. The court was not satisfied that the purported deed had been executed on the date appearing on its face. It found that the deed was made after the interim charging order for the purpose of defeating the third defendant’s recovery of the judgment sum from the first claimant.
6. In light of that conclusion, it was unnecessary to determine the second preliminary issue concerning the second claimant’s bankruptcy and the subsequent disclaimers.