Property Trust Claim

H&J was approached by a Trustee in Bankruptcy in circumstances where there were two properties held in the Bankrupt’s name, including one he appeared to be residing in, but which he claimed to be holding on trust for a family member.  The Trustee had significant concerns about the purported trust arrangement but with limited assets in the estate was unable to pursue claims.  

The Bankruptcy commenced in November 2017.  The properties were purchased in 1998 and 2006 respectively.  In 2009 the Bankrupt allegedly entered into a Trust arrangement whereby the equitable interest in the properties was purportedly transferred to his mother.  

H&J acquired the Trustee’s interest in the properties and began investigating the alleged trust structure. H&J identified that one of the witnesses to the trust deed was a cousin of the Bankrupt.  In the attestation accompanying his signature he had stated that his occupation was “retired store manager” - however, H&J identified evidence including contemporaneous news articles proving that in 2009 the witness was not retired at all - but that he subsequently retired in 2015.  

The trust deed was also signed by the Bankrupt’s mother as beneficiary of the trust.  H&J was able to obtain copies of various documents evidencing the beneficiary’s signature in 1995, 2012 and 2017.  The signatures in 1995 and 2012 were visibly very different to that from 2017 - by which time her health had deteriorated considerably.  However, the signature on the trust deed, purportedly from 2009, was far more consistent with her signature from 2017 - and completely different to her signature from 2012.  

H&J instructed solicitors and counsel to make an application for a declaration that the trust was a sham and that (as assignor) H&J was the true legal owner of the properties.  This application was coupled with an application for possession and sale of the properties.  

The application was initially defended - but ultimately in the face of compelling evidence, one of the Defendant’s key witnesses refused to provide a statement (which would have potentially required that witness to perjur themselves) and shortly thereafter a settlement was negotiated pursuant to which ownership of one property was relinquished in full and a significant payment made in respect of the other.  H&J subsequently sold the remaining property and returned a significant sum to the Bankruptcy estate.