Kamran Malik v Farida Messalti

Kamran Malik v Farida Messalti

The Property trust deed was genuine, not a sham, and divested Mr Malik of his beneficial interest in the property, so no charging order could be made unless the trust was set aside. The trust deed was a transaction at an undervalue entered into by Mr Malik with the purpose of putting assets beyond the reach of future creditors, satisfying s.423 Insolvency Act 1986. Ms Messalti, as a judgment creditor unable to enforce against Mr Malik's assets due to the trust, is a 'victim' under s.423. Limitation was not a bar as it was not pleaded in time and, in any event, the claim was within time on the facts. The appropriate remedy was to set aside the trust to the extent necessary to satisfy Ms...

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
Civil (enforcement of Judgment/charging Order) / Final Judgment on Application for Final Charging Order and S.423 Insolvency Act Claim
Outcome
Application for final charging order granted in part; s.423 claim succeeds to the extent of Ms Messalti's judgment debt; trust set aside only to the extent necessary to satisfy her claim; remainder of trust stands.
Legal Topics
Charging Orders, Transactions at Undervalue, Sham Trusts, Section 423 Insolvency Act, Beneficial Interests, Limitation of Actions
Civil Procedure Insolvency Law Trusts Law Property Law Charging Orders Transactions at Undervalue Sham Trusts Section 423 Insolvency Act +2 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

Civil (enforcement of Judgment/charging Order) / Final Judgment on Application for Final Charging Order and S.423 Insolvency Act Claim

Legal Issues

  1. 1 Whether the Property trust deed was genuine, illusory, or a sham
  2. 2 Whether Mr Malik retained a beneficial interest in the property
  3. 3 Whether the trust deed was a transaction at an undervalue with a prohibited purpose under s.423 Insolvency Act 1986

Ratio Decidendi

The Property trust deed was genuine, not a sham, and divested Mr Malik of his beneficial interest in the property, so no charging order could be made unless the trust was set aside. The trust deed was a transaction at an undervalue entered into by Mr Malik with the purpose of putting assets beyond the reach of future creditors, satisfying s.423 Insolvency Act 1986. Ms Messalti, as a judgment creditor unable to enforce against Mr Malik's assets due to the trust, is a 'victim' under s.423. Limitation was not a bar as it was not pleaded in time and, in any event, the claim was within time on the facts. The appropriate remedy was to set aside the trust to the extent necessary to satisfy Ms...

Court Disposition

Application for final charging order granted in part; s.423 claim succeeds to the extent of Ms Messalti's judgment debt; trust set aside only to the extent necessary to satisfy her claim; remainder of trust stands.

Orders

  • Final charging order made over sufficient beneficial interest in the property to satisfy Ms Messalti's judgment, interest, and costs.
  • Trust set aside only to that extent; remainder of trust remains for the children.