Malik v Messalti [2023] EWHC 553 (KB) (06 February 2023)

Malik v Messalti [2023] EWHC 553 (KB) (06 February 2023)

The Property trust deed was not a genuine and effective divestment of Mr Malik's beneficial interest in 11 St Clair Road; it was a sham transaction intended to put assets beyond the reach of creditors, falling within section 423 of the Insolvency Act 1986. The application for relief under section 423 was not time-barred. Accordingly, a final charging order should be made over Mr Malik's interest in the property to secure Ms Messalti's judgment debt.

Citation
[2023] EWHC 553 (KB)
Parties
Claimant: Mr Kamran Malik; Defendant/applicant: Ms Farida Messalti; Interested Party: Mrs Humera Kamran; Interested Party/child: Urwah Kamran Malik; Interested Party/child: Arfeen Kamran Malik; Interested Party/child: Sanaa Kamran Malik; Interested Party/child: Imaan Kamran Malik
Jurisdiction
England and Wales
Judgment Date
06 February 2023
Procedural Posture
Application for Final Charging Order / Final Hearing and Judgment
Outcome
Final charging order granted over Mr Malik's interest in 11 St Clair Road in favour of Ms Messalti.
Legal Topics
Charging Orders, Transactions Defrauding Creditors, Declarations of Trust, Section 423 Insolvency Act 1986, Sham Trusts, Beneficial Ownership
Civil Procedure Insolvency Trusts and Equity Charging Orders Transactions Defrauding Creditors Declarations of Trust Section 423 Insolvency Act 1986 Sham Trusts +1 more

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Parties

Mr Kamran Malik

Claimant

Ms Farida Messalti

Defendant/applicant

Mrs Humera Kamran

Interested Party

Urwah Kamran Malik

Interested Party/child

Arfeen Kamran Malik

Interested Party/child

Sanaa Kamran Malik

Interested Party/child

Imaan Kamran Malik

Interested Party/child

Procedural Posture

Application for Final Charging Order / Final Hearing and Judgment

Legal Issues

  1. 1 Whether the Property trust deed of 10 November 2008 was genuine and effective to divest Mr Malik of his beneficial interest in 11 St Clair Road
  2. 2 Whether the Property trust deed was a sham or illusory
  3. 3 Whether the transaction falls within section 423 of the Insolvency Act 1986 as a transaction defrauding creditors

Ratio Decidendi

The Property trust deed was not a genuine and effective divestment of Mr Malik's beneficial interest in 11 St Clair Road; it was a sham transaction intended to put assets beyond the reach of creditors, falling within section 423 of the Insolvency Act 1986. The application for relief under section 423 was not time-barred. Accordingly, a final charging order should be made over Mr Malik's interest in the property to secure Ms Messalti's judgment debt.

Court Disposition

Final charging order granted over Mr Malik's interest in 11 St Clair Road in favour of Ms Messalti.

Orders

  • Final charging order made over Mr Malik's interest in 11 St Clair Road, London, E13 9DU, in favour of Ms Messalti to secure the judgment debt of £21,000.
  • The four children (Urwah, Arfeen, Sanaa, Imaan) are joined as parties to the proceedings.