The case of Bhatia v Purkiss (as liquidator of JD Group Ltd) and another [2025] EWHC 359 (Ch) presents significant legal questions regarding beneficial ownership, trust declarations, and rectification of legal documents. This judgment by Deputy Master Scher highlights the complexities involved in determining property ownership when family and financial relationships intertwine.
Bhatia v Purkiss (as liquidator of JD Group Ltd) and another [2025] EWHC 359 (Ch)
Background
The dispute revolved around 33A The Drive, Uxbridge UB10 8AF (Property), which was legally owned by Mrs Suman Bhatia and her son, Mr. Deepak Bhatia. Deepak, a judgment debtor owing over £3.4 million to Mr. Christopher Purkiss, the liquidator of JD Group Ltd, had a charging order placed over his beneficial interest in the Property. Suman and Deepak contended that the Property was wholly beneficially owned by Suman, which, if proven, would prevent the enforcement of the charging order.
Two interrelated claims were brought before the Court:
- Rectification claim: Suman sought to rectify the TR1 transfer deed, which stated that she and Deepak held the Property as beneficial joint tenants.
- Sale application: Purkiss sought an order for possession and sale of the Property to satisfy Deepak’s debt.
Key issues at trial
The Court examined several crucial issues, including:
- Whether Deepak had control over Suman’s finances;
- The existence of any oral agreement regarding the Property’s ownership;
- Whether the TR1 declaration of joint tenancy was a mistake; and
- If rectification should be granted despite any delay that may have prejudiced the liquidator.
The Court’s findings
1. Control of finances: The Court accepted that Deepak managed Suman’s financial affairs after her husband’s death.
2. Loan repayments & property purchase: While evidence showed that Suman funded the purchase, the Court rejected her claim that Deepak had agreed to hold the Property solely for her benefit.
3. TR1 Trust Declaration: The Court ruled that Suman failed to provide “convincing proof” that the declaration of trust in the TR1 was a mistake. Without clear evidence of a contrary agreement, the presumption was that the beneficial ownership followed the legal title, which was clearly noted on the TR1.
4. Rectification claim dismissed: Given the lack of strong evidence proving a mistake in the TR1, the claim for rectification was denied.
5. Sale application granted: The Court, acknowledging the substantial debt owed by Deepak, ruled in favour of the sale of the Property, a decision reinforced by a separate possession order obtained by The Mortgage Business.
Legal implications
The judgment reinforces key principles in property and trust law, particularly:
- Rectification of documents: The ruling underscores that rectification requires “convincing proof” that a mistake occurred in recording the parties’ intentions. In this regard, it is far more probable that mistakes in completing legal documents would arise as a result of non-qualified staff filling them out than if solicitors are retained to complete the said documents.
- Trust declarations: In cases involving family arrangements, Courts are reluctant to override express declarations of trust unless compelling evidence is provided.
- Equity Following the Law: The case reiterates the long established presumption that beneficial ownership aligns with legal ownership unless strong evidence suggests otherwise.
- Credibility – a part of the background was the fact that Deepak had been found to have defrauded creditors in respect of his business. This would no doubt have weighed heavily on the judge in terms of the credibility of an argument that largely relied upon witness evidence of the parties.
This case is a clear example of how difficult rectification arguments are to succeed with. Given such difficulties, it is important that expert legal advice is sought prior to the commencement of any proceedings.
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Kevin Modiri is a Partner in our expert Dispute Resolution team, specialising in civil disputes, insolvency, inheritance disputes, data breach claims and defamation claims.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Kevin or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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