John McLinden v Shiao-Chen Lu & Anor

John McLinden v Shiao-Chen Lu & Anor

The 1996 and 2010 declarations of trust were authentic, effective, and not shams. Fazal Khair Khan became the absolute beneficial owner of Avarn Road by at least August 2010. The 2011 charging order was improperly made as Munaver Khan had no beneficial interest at the relevant time. The application to discharge the charging order was not abusive. There was no transaction at an undervalue or for the purpose of defrauding creditors, and no illegality barring enforcement. The charging order must be discharged.

Parties
Claimant: John McLinden; Defendant/applicant: Shiao-Chen Lu; Third Party/respondent/applicant: Shabnam Khan (on behalf of the Estate of Fazal Khair Khan); Defendant: Mohamed Munaver Khan; Defendant: The Official Receiver
Jurisdiction
England and Wales
Judgment Date
21 November 2022
Procedural Posture
Civil (property/bankruptcy) / Judgment After Trial of Issues Relating to Beneficial Ownership and Discharge of Charging Order
Outcome
Application allowed; charging order discharged
Legal Topics
Beneficial Ownership, Charging Orders, Declarations of Trust, Constructive Trusts, Abuse of Process, Illegality, Section 423 Insolvency Act 1986, Section 357 Insolvency Act 1986
Property Law Insolvency Law Trusts Law Civil Procedure Beneficial Ownership Charging Orders Declarations of Trust Constructive Trusts +4 more

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Parties

John McLinden

Claimant

Shiao-Chen Lu

Defendant/applicant

Shabnam Khan (on behalf of the Estate of Fazal Khair Khan)

Third Party/respondent/applicant

Mohamed Munaver Khan

Defendant

The Official Receiver

Defendant

Procedural Posture

Civil (property/bankruptcy) / Judgment After Trial of Issues Relating to Beneficial Ownership and Discharge of Charging Order

Legal Issues

  1. 1 Whether the November 2011 charging order over 45 Avarn Road was properly made or should be discharged
  2. 2 Whether Fazal Khair Khan (and now her estate) was the beneficial owner of Avarn Road at the relevant time
  3. 3 Whether the application to discharge the charging order is abusive re-litigation

Ratio Decidendi

The 1996 and 2010 declarations of trust were authentic, effective, and not shams. Fazal Khair Khan became the absolute beneficial owner of Avarn Road by at least August 2010. The 2011 charging order was improperly made as Munaver Khan had no beneficial interest at the relevant time. The application to discharge the charging order was not abusive. There was no transaction at an undervalue or for the purpose of defrauding creditors, and no illegality barring enforcement. The charging order must be discharged.

Court Disposition

Application allowed; charging order discharged

Orders

  • The November 2011 charging order over 45 Avarn Road is discharged pursuant to section 3(5) of the Charging Orders Act 1979.
  • Any interim charging order in favour of Mr McLinden over the November 2011 charging order is also discharged.