REF/2011/0136

 

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

LAND REGISTRATION ACT 2002

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

BETWEEN

 

ZAKIR HUSSAIN

 

APPLICANT

 

and

 

ABDUS SALAM

 

RESPONDENT

 

Property Address: Flat 22 Hamilton House, British Street, London E3 4NJ

Title Number: EGL352518

Before: Mr. Michael Mark sitting as Deputy Adjudicator to HM Land Registry

Sitting at: Victory House

On: 11, 12 and 13 February 2013

 

Applicant Representation: Marc Glover, counsel

Respondent Representation: David Gibson Lee, counsel

___________________________________________________________________________­

 

 

Application for registration of transfer from the names of the parties into the sole name of the Respondent found to be based on a document concocted to deceive creditors of the Respondent and is to be cancelled. Direction given for notice of a charging order obtained by one of those creditors to be entered on the register, despite the application of that creditor having previously been cancelled as a result of a decision of the Adjudicator based on that fraudulent document, the Adjudicator then being in ignorance of the fraud

1. For the reasons given below, I shall direct the Chief Land Registrar to cancel the application of the Respondent dated 28 September 2010. I shall also direct the Chief Land Registrar pursuant to rule 41(2)(a) of the Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003 to enter a notice in the charges register of the above property that the interest of the Applicant in the property stands charged with the payment of a judgment debt pursuant to a charging order made in the Queens Bench Division of the High Court of Justice on 23 November 2007. A copy of this decision and the accompanying order is to be sent to Mr. Praful Shah at Unit 8, Space Business Park, Abbey Road, Park Royal, London NW10 7SU.

 

2. The Applicant, Mr. Hussain, is the son of the Respondent, Mr. Salam. This decision follows a rehearing by me of Mr. Hussain’s claim to a beneficial interest in a leasehold flat, Flat 22, Hamilton House, British Street , London E3 4 NJ (the property). At the original hearing, another Adjudicator, Ms Ann McAllister, dismissed Mr. Hussain’s claim, but his appeal was allowed by Sir William Blackburne sitting as a High Court Judge and the matter was remitted to the Adjudicator for rehearing.

 

3. The property had been occupied by Mr. Salam as a council tenant until 1996. In November 1996 a long lease of the property had been granted to Mr. Salam and Mr. Hussein at a 44 per cent discount on the market value. There is a dispute as to who paid the purchase price. Mr. Hussain says that the money came from him. Mr. Salam says that he paid with the help of a loan from Mr. Hussain of £4000.

 

4. In support of his claim, Mr. Salam produced a document referred to as the General Agreement. That document is dated 24 December 1999, was signed by both parties, and provides as follows:

 

“I, Abdul Salam, of 22 Hamilton House, British Street, London E3 and my son Zakir Hussain (same address) have mutually agreed and confirm that when I brought the above address property from the council, I received £4000.00 from my son as a help towards the buying of the above flat. On condition that I Abdus Salam put my son Zakir Hussain’s name on the land registry until I returned his money back by instalments. To day is the last day I returned his all money back as his last instalment respectively.

 

I, Zakir Hussain son of Abdul Salam would also like to confirm that today, I received full amount of money back from my father as last instalments. Therefore I have no any ownership rights along with my father’s flat. My father can remove my name from the land registration when he likes.

 

We both agreed and signed below”

 

5. The document was signed by both parties and their signatures appear on the face of the document to have been witnessed.

 

6. The question whether Mr. Hussein had a beneficial interest in the property had previously been an issue in other proceedings before the Adjudicator when a Mr. Praful Shah had attempted to register a notice in respect of a charging order which he had obtained to secure a substantial judgment debt in his favour against Mr. Hussain in the Queens Bench Division of the High Court – a copy of the charging order are to be found in the Adjudicator’s file for the resulting dispute with Mr. Salam (REF/2008/0944), and the claim number appears from that order to be either HQ-0700082 or HQ-070008. Neither the claim number nor the amount of the judgment debt is wholly legible on the copy of the charging order in that file.

 

7. Mr. Shah’s application was objected to by Mr. Salam on the basis that Mr. Hussein had no beneficial interest in the property, as demonstrated by the General Agreement. The dispute was referred to the Adjudicator. By his Statement of Case dated 27 October 2008, Mr. Salam stated that he had returned the £4000 on 24 December 1999, and referred to the General Agreement to prove his point. He went on to assert that from 24 December 1999 he had been sole proprietor of the property, although he had not taken Mr. Hussain’s name off the title. He verified his Statement of Case with a statement of truth signed by him. Mr. Salam then gave evidence on oath at a hearing on 1 May 2009 as to the arrangement between him and his son and as to the General Agreement. Mr. Salam confirmed that the document had been prepared by a Bengali Community Advisor and had been signed in the presence of one of his daughters and a son-in-law. The Adjudicator found in favour of Mr. Salam and, on 8 May 2009, ordered that the Chief Land Registrar was to reject Mr. Shah’s application as Mr. Hussain had no beneficial interest in the property.

 

8. Mr. Salam repeated his statement about the General Agreement being signed on 24 December 1999 in his Statement of Case in these proceedings, again verified by a statement of truth and repeated the claim in his evidence at the hearing before Ms McAllister and in a further witness statement dated 4 May 2012 stated to be to clarify points raised at a hearing before Vos J when Mr. Hussain sought permission to appeal the decision of Ms McAllister.

 

9. Mr. Hussain has claimed that, although his signature is on the General Agreement, he signed a blank piece of paper at his father’s request and did not know what he was signing. That contention was rejected by the Adjudicator at the previous hearing of the present dispute. She found that he had signed the agreement and not merely a blank piece of paper. She also found that it had been signed in December 1999. Her decision was set aside in the High Court because she had failed to consider a contention made on behalf of Mr. Hussain that the General Agreement was a sham devised to see off Mr. Shah’s claim, although there had been evidence before her indicating that that may have been the case.

 

10. For the first time at the new hearing before me, there was evidence from Mr. Trevor Sowood, the technical services manager of the manufacturer of the paper upon which the General Agreement was typed. His evidence was clear that the watermark on the paper had only been introduced for the first time in May 2001. The new watermark was the result of a design consultation over the previous year or so and despite the efforts of counsel for Mr. Salam in cross-examining , I am satisfied that neither he nor the person who typed the General Agreement could in December 1999 have had a sample of paper with a watermark that was only designed subsequently and only went into production 17 months later. In the end Mr. Salam appeared to accept that the document was not executed in 1999 and indeed said that his son had told him to put in that date.

 

11. It is clear that the General Agreement was not in existence in December 1999, and I also conclude that the only rational explanation for its creation was that it was concocted by Mr. Salam to defeat the claim of Mr. Shah. I shall deal in due course with the extent to which Mr. Hussain was implicated in the deceit despite his assertion that he had simply signed a blank piece of paper at the request of his father. As will appear, I come to the conclusion on the balance of probabilities that he was a knowing party to its creation and that he also wanted it to help him defeat Mr. Shah’s claim against him, despite his assertion that he knew nothing of Mr. Shah’s claim. I am also satisfied that Mr. Salam is somebody who willingly commits perjury and creates false evidence if it serves his purpose.

 

12. As held by Sir William Blackburne at paragraph 16 of his decision on appeal from the decision of Ms McAllister, “As a matter of law there was no reason why Mr. Hussain should not have been entitled to impugn the general agreement as a sham, notwithstanding its purpose as a dishonest means of enabling him to “see off” Mr. Shah.

 

13. In that the general agreement was created to defeat Mr. Shah’s claim, it does not appear to me that I can attach any real weight to it in determining what the respective rights of the present parties were in relation to the property. It was not intended by either of them to be binding between them, although it is possible that it could reflect oral arrangements between them, and I therefore need to consider whether that is the case or whether Mr. Hussain had a 50 per cent beneficial interest in the property as he claims.

 

14. This dispute arose before the Land Registry because Mr. Salam applied in 2010 to register what purported to be a transfer of the property from himself and Mr. Hussain into his name alone. Mr. Hussain objected to that application and the Chief Land Registrar referred that dispute to the Adjudicator. The purported transfer, in form TR1 is dated 17 September 2010, although that date also has been questioned, and in box 8, in which the consideration for the transfer is stated, reference is made to the General Agreement and to the receipt of £4000 by Mr. Hussain. The document is again signed by Mr. Hussain, who again denies having been aware of what he was signing. I shall return to a number of further matters that have been drawn to my attention concerning this transfer, but consider that these need to be set in the context of the facts as a whole, to which I shall now turn.

 

15. Mr. Salam was born in 1934 in Bangladesh. He came to England in the 1960’s but frequently returned to Bangladesh. He married there at the beginning of 1969, and Mr. Hussain was born there in December 1969. Mr. Hussain came to England in about 1975. A brother and a sister also came to England. His parents divorced in about 1982, and at some point Mr. Salam remarried. His new wife and two daughters lived in Bangladesh until about 1995 when they came to England.

 

16. In the latter part of the 1970’s, Mr. Salam had worked at Fords. In the early 1980’s he set up in business on his own. He continued in business, he stated in evidence at one point, until 1994, when he ceased work, apparently due to ill health. He had previously been making VAT returns but stopped doing so. Yet at another point, he claimed still to be in business in 1996 when the property was purchased from the council.

 

17. Meanwhile, in the early 1990’s the family moved into the property. The tenancy appears to have been in Mr. Salam’s name. In 1996, Mr. Hussain married and he and his wife lived in the property with the other family members. By that time he already ran a business and also had purchased a tenanted property.

 

18. At some point, the question of buying the property arose. According to Mr. Salam, this possibility had been ongoing since 1994. According to Mr. Hussain he had persuaded his father to buy in 1996. Solicitors, Bowling & Co., were used and completion took place on 4 November 1996. The completion statement shows a discounted sale price of £15,680. The discount is agreed to have been 44 per cent. Bowling & Co’s ledger sheets show that the funds to purchase and other costs totaling £16,346.31 came from Abbey National plc on 10 October 1996. Mr. Hussain had an account at Abbey National, and although he has failed to find his account statements for the period immediately around October, the statements he has produced show his account increasing from £8000 in mid-April to over £18,000 at the beginning of July that year and to have reduced to around £5500 by mid-November. It is unfortunate that the statements for the intervening period have not been found and I have been asked by counsel for Mr. Salam to find that it is more than unfortunate and that they have been deliberately concealed.

 

19. There is no dispute that the actual funds went to Bowling & Co. from Mr. Hussain’s Abbey National account, but Mr. Salam claims that he paid sums to Mr. Hussain to pass to Bowling & Co. and that all but £4000 came from him in that way and would appear as entries in the statements had they been available. In cross-examination he said that about £11,000 and something or £12,000 was given to Mr. Hussain by him in this way and that the money came from a safe in his shop. The source of the money is surprising, as is his statement that he repaid the £4000 loaned by cash payments of £500 or £600 at a time from the takings in his shop.

 

20. Mr. Salam stated both that Mr. Hussain took over his shop in 1994 and that he, Mr. Salam, rented it until about 2000 and that the business remained his and Mr. Hussain was running it for him. On his own evidence, Mr. Salam did not have a business after 1994, and had stopped making VAT returns, and I do not find his evidence that the business remained his credible. Indeed, in his witness statement dated 4 May 2012 in these proceedings, Mr. Salam stated at paragraph 7 that in 1995 he left his business to Mr. Hussain. In the same statement he says that he gave £11,000 to Mr. Hussain in 1994 and 1996. Moreover, in his evidence to Ms McAllister at the previous hearing, Mr. Salam stated that the money came from his shop. Mr. Hussain had given him lots of money from his shop between 1994 and 1996 and he would give sums back to Mr. Hussain in cash. Mr. Hussain, he then said, had all the documents and records relating to this but had destroyed them. No satisfactory explanation was given as to why he should have given money back to Mr. Hussain as a contribution to a future flat purchase.

 

21. I also note that at the relevant time it would appear, as his own counsel points out, that Mr. Salam was claiming housing benefit in respect of his rent. Were he as honest as he claims, he would have declared this capital to the council and would not have been in receipt of housing benefit because his capital was over the limit – then either £6,000 or £8,000. He did not do so either because he did not have it or because he wished to obtain housing benefit by deception. Despite his own counsel’s plea that I should conclude that he was deceiving the council, I have seen no reliable evidence that he had any such capital while a tenant of the property between 1994 and 1996.

 

22. Mr. Salam did have his own bank accounts and could perfectly well, had he been buying the property just for himself, have put any cash he held through his own bank accounts assuming that he did not have enough money in them in any event. Also, I accept Mr. Hussain’s evidence that by 1996 he had been running his own business for several years. I consider the likelihood is that Mr. Hussain was in business on his own account and that the money to buy came from him and not from his father.

 

23. It follows that with the purchase being in joint names, the presumption is that the property was acquired by them as joint tenants in equal shares. I note that Mr. Hussain is content that the shares should be equal although the discount obtained by his father was only equal to 44 per cent of the value of the property, and I accept that this was their common intention.

 

24. I do not derive any great assistance from other matters put forward in support of Mr. Hussain’s contentions. I note that there was a charge granted in 1998 to secure repayment of a business loan to him, but it appears to me that that is a charge which a father may well have given to help his son even if he owned the property absolutely. So too, I do not derive any great assistance from the fact that while his father was in Bangladesh around 2000 to 2003 Mr. Hussain let the property in his own name and also permitted his mother to live there. The latter step appears to have led to a serious argument with his father who was unhappy at the thought of his ex-wife living in his home.

 

25. In case it may be relevant, I return to the circumstances surrounding the execution of the General Agreement. I note that Mr. Hussain accepts that he did business with Mr. Shah, and that he stated that the last time they did business was around 2004. I also note that the interim charging order was obtained by Mr. Shah on 23 November 2007 and the court seal on the order that it should continue is dated 17 December 2007. It emerged in the course of the evidence of Mr. Hussain and his wife that in December 2007 Mr. Hussain had transferred to his wife the title to their home for £225,000, with her borrowing money from Mortage Business plc to complete this transaction. At the time, the property was said by them to be worth in the region of £300,000. I note that his wife had a completely different surname and I suspect that the mortgage company may not have been aware of their relationship.

 

26. This was said by his wife to be at a time when he was opening a new business and needed money, although she denied any real knowledge of his financial and business affairs. Mr. Hussain also confirmed that he had closed down his clothing business at around that time because it was losing money although he could not remember exactly when that was. He did not know whether he had paid Mr. Shah everything he owed him and also did not know why Mr. Shah had obtained a judgment against him. Mr. Shah had not asked him for money. Since discovering the judgment, he had done nothing about it. He did not know where Mr. Shah was.

 

27. While I note the evidence given by one of his sisters that she signed the document which became the General Agreement after Mr. Hussain and it still had nothing on it except his signature, I am satisfied that Mr. Hussain has not told the truth about this document and his knowledge of it. His father gave evidence that Mr. Hussain had told him to put a 1999 date on it. I find that Mr. Hussain got into financial difficulties around 2007, with a failing business and no doubt pressing creditors including Mr. Shah. I consider that it was for that reason that he transferred his home into his wife’s name, whatever he may have told her. I am also satisfied, despite the evidence that I heard as to family breakdowns and that the parties were not talking to each other, that when Mr. Salam received notice of the application to register notice of the charging order over Mr. Hussain’s interest in the property, which remained Mr. Salam’s home, that he will have contacted Mr. Hussain to find out what it was about and that together they concocted the general agreement to protect the family property and prevent Mr. Shah from obtaining any benefit from his charging order or judgment.

 

28. Following Professor Abbey’s decision in May 2009, Mr. Salam decided he wanted the property, which remained his home, transferred into his sole name, and instructed his solicitors accordingly. By letter dated 21 October 2009, Equitable Solicitors wrote to the Land Registry on his behalf asking the registrar to decide to cancel the name of Mr. Hussain. The request was based on the General Agreement and a copy of it and of Professor Abbey’s decision was sent with the letter. By letter dated 4 November 2009, the Land Registry explained that a deed was required to transfer or deal with the legal estate and the beneficial interest.

 

29. It would appear that in response Equitable solicitors then submitted an application for registration. This may have been done twice as it would seem that it was a letter dated 15 January 2010 enclosing an amended AP1 and TR1 which was rejected by the Land Registry by letter dated 22 January 2010 because they had not provided proof of identity of Mr. Hussain. The Land Registry required the evidence of identity to be in its form ID1. That form required Mr. Hussain’s identity to be verified by a conveyancer or at one of their customer information centres.

 

30. The form ID1 is 5 pages long. The first page contains information as to who has to complete the form, and as to why and how. The second page contains the full name of the person whose identity is being verified. The third page contains further details of that person and of the relevant transaction. The photocopy in the trial bundle refers to a transfer and gives the title number and address of the property. The ink and handwriting are different from that used by Mr. Hussain to sign, and apparently to date the signature, 12.2.10 beneath a certificate by him that the information he had provided in the form was correct to the best of his knowledge and belief. The fourth page is headed Section B and requires the person verifying the person’s identity to state how long he has known that person and to certify their own status and that the individual has produced the originals of the evidence of identity indicated on the following page. This has not been completed. The final page states that Mr. Hussain produced his passport, giving the number and is signed illegibly by the person verifying the information without giving his name legibly or his firm (information that should have been given on the preceding page), but including the date 12.2.10. Finally this page includes a photograph of Mr. Hussain.

 

31. Mr. Hussain accepts that he was asked to provide identification, but claims that he was not told why and that only three of the five pages were given to him by his father. He claims that he did not know that he was signing this in connection with the transfer of the property as there were no details of it on the form when he signed. Mr. Hussain also accepts that he signed the form TR1, although he denies all knowledge of its contents and says it was just another piece of paper he was asked to sign by his father whom he trusted.

 

32. The letter dated 15 January 2010 to the Land Registry was then re-dated in pen 17 February 2010 and resubmitted to the \Land Registry with an additional handwritten amendment enclosing the Land Registry certificate of identity, The reply dated 19 February 2010 was that the application could not be accepted because section B of form ID1 had not been completed. It is also clear from that letter that the form TR1 was still undated at that point. The form, or part of it, then seems to have been taken back by somebody to the person who had verified Mr. Hussain’s identity and who then stamped the firm name, Kunus solicitors, by his signature but still did not complete Section B. By this time, Mr. Hussain’s current address and the number of years he had lived at the firm appear to have been added as well (cf.pp.140 and 148 of the trial bundle). The undated form TR1 appears at pp.150-152 where it is signed by Mr. Hussain and stated to have been executed by him as a deed in the presence of Moahmmed Abdul Wadud. Mr. Hussain claims that Mr. Wadud was not present when he signed it and that he was not aware of what he was signing.

 

33. By letter dated 24 May 2010, Mr. Hussain then wrote to the Land Registry “in concern of the property named above”, which however was 193A Whitechapel Road, and not the property, expressing concern that “some sort of fraud may take place in replacing my name which is on the Land Registry title number EGL352518 off number 22 Hamilton House” and that “the fraud may be processed by the person whose name is also on the land registry.” He asked to be notified if there was any application to change anything. By letter dated 26 May 2010, the Land Registry replied, asking for more information and referring to the previous applications by Mr. Shah and by Mr. Salam’s solicitor.

 

34. What may have provoked Mr. Hussain’s letter at this point is that he appears to have been asked to sign Section B of form ID1 and refused to do so and is said by Equitable solicitors to have made a verbal attack on a Mr. Aziz “who has been helpful for the benefit of the parties”. That statement was contained in a letter to him dated 14 June 2010 which threatened to use a copy of his letter to the Land Registry dated 24 May 2010 as evidence against him (of what is not stated), and also threatens to report matters to the police if he does not return form ID1 signed by him by 19 June 2010, alleging that he was committing a very serious offence – again I am unable to understand what there was to report to the Police in this respect.

 

35. There followed a letter dated 29 July 2010 from Bowling & Co. on behalf of Mr. Hussain, denying that he had signed the General Agreement, alleging that what was said there was false and that Mr. Hussain had never released his beneficial interest in the property, that he was not aware of the proceedings before Professor Abbey, and that Mr. Hussain had not knowingly consented to any transfer or signed any form consenting to it.

 

36. The response of Equitable solicitors was to date the original form TR1 17 September 2010 (p.181, and compare the original undated copy at p.150) and submit it to the Land Registry. The Land Registry gave notice to Mr. Hussain who objected to it and this reference resulted.

 

37. At the hearing before me, Mohammed Abdul Waddad, who is the son-in-law of Mr. Salam, gave evidence that he had been present at Mr. Salam’s house on 17 September 2010 and had signed the transfer to witness Mr. Hussain’s signature, he also being there and signing at the time. Later in his evidence he expressed doubt about the date. In his witness statement he stated that he had signed the form in February 2010 in the presence of Mr. Salam and Mr. Hussain. He also fluctuated between saying that he was sure and not sure of the date and that Mr. Salam also signed at the time and that he must have signed later. The last statement was made to explain why he had not witnessed his father-in-law’s signature and why somebody else had although he was not there at the time.

 

38. It is plain that the TR1 was already signed by Mr. Hussain at latest by the date in December 2009 or January 2010 when the TR1 was first submitted to the Land Registry by Equitable solicitors and that Mr. Waddud’s evidence as to dates cannot be right. I am also satisfied that Mr. Salam’s only concern was that the form should look right when submitted to the Land Registry and that it was of no concern to him or to Mr. Hussain that it should actually be executed in the correct way. I find that it was signed by Mr. Hussain at a different time from the time his signature was purportedly witnessed by Mr. Waddud, who was simply carrying out his father-in-law’s wishes.

 

39. I am further satisfied that Mr. Hussain was well aware of what he was signing. I do not accept that, as an experienced businessman who had been involved in several property transactions he was unaware that he was signing a deed which transferred property, and which described him as transferor beside his signature. I consider that the reason he signed it was that there was an agreement between himself and his father that the property should be put into his father’s name to protect it from further attack from his creditors. Subsequently he became aware that his father had decided to use the so-called General Agreement to deny him any interest in the property and it was this which led to the letter to the Land Registry of 24 May 2010 referring to his father committing a fraud on him.

 

40. It is plain that the application made by Mr. Salam is not in order. It was made based on a fraudulent document produced to deceive Mr. Shah and the Land Registry. Form ID1 was not completed properly at any stage and long before it was in proper form the TR1 had been repudiated by Mr. Hussain. It is substantially defective and must be cancelled by the Chief Land Registrar.

 

41. I have made no specific reference to the evidence given by Mr. Hussain’s sister whose signature appears as a witness to Mr. Salam’s signature on the General Agreement. I am not satisfied that her recollections were correct that there was nothing on the piece of paper signed by her except for Mr. Hussain’s signature, but if she did sign a blank document in this way, it was not the General Agreement, which I am satisfied was a concoction of both Mr. Salam and Mr. Hussain.

 

42. I have power under rule 41(2)(a) to direct the Chief Land Registrar to make a specified entry on the register of any title affected by my order. It appears to me that it should be a condition of my order that the notice should now be entered on the register of this property which should have been entered as a result of Mr. Shah’s application in support of his charging order but for Mr. Salam’s perjury and deceit, and I shall so direct.

 

 

By Order of The Adjudicator to HM Land Registry

 

dated the 18 ^th day of March 2013