Hakmi v Hakmi and others

JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORREC-TIONS)                MR N STRAUSS QC (Sitting as a Deputy Judge of the High Court):                            Introduction             1. This is a bitter family dispute between three brothers of Syrian origin, the claimant, Rahif Hakmi, and the 1st and 5th defendants, Raghid and Rabe Hakmi. For convenience, I will refer to them by their first names. They were the main witnesses; Rabe’s mother-in-law, Mrs. Khadigeh Alhalak, also gave evidence. Rabe is the oldest of the three brothers, followed by Rahif and then Raghid. There is another brother, Ra’ad, but he plays no part in these events. The 2nd to 4th defendants are companies incorporated in the Marshall Islands and controlled by Rabe. 2. The dispute arises out of two commercial relationships. The first concerns the Park Hospital, Liverpool, a property bought by Rabe and Raghid in 1997 (“Park Hospital”), in which Rahif acquired a 45% interest in a transaction entered into between the three brothers in April or May 2003. The intention from the start was either to resell Park Hospital at a substantial profit or to develop it; neither has happened or now, after 17 years, seems likely to happen. 3. Rahif’s claim in this action is in essence (a) that his brothers did not tell him that the property was subject to a £400,000 charge in favour of their uncle, Farooq Mustafa Assam Al Zuabi (“Mr. Al Zuabi”) dated 12th July 1998, which had been assigned to the 3rd defendant (“Pearl Trading”) on 31st May 2001, (b) that ac-cordingly the charge did not in equity affect his 45% share in the property, and (c) that in any event the charge was a sham and does not secure any debt. 4. Rahif’s belief is that the property is valueless, in which case the outcome of these issues will matter little in practice; nevertheless he wishes to pursue them, and his claim in the action is that the charge does not se-cure any debt and is a sham, alternatively that it is ineffective to bind his share in the property, and that it should be removed from the Charges Register. 5. The second commercial relationship is principally between Rahif and Rabe. By August 2004, Rahif was living in Dubai and was in the initial stages of carrying out a major development there called Armada Towers, through a company called Armada General Trading Ltd (“Armada”). At the beginning of August 2004, Rabe arrived, with his wife and young children, in Dubai. According to Rahif, he came as a fairly junior employee of Armada, at a monthly salary of AED 10,000, later increased to 15,000 (about £2,500), plus allowances for accommodation and transport; although he was in fact paid far more, this was out of generosity. According to Rabe, while there was a contract of employment with Armada, that was merely to satisfy Dubai visa re-quirements; what was really agreed, between Rahif and himself, was that he would be entitled to one-third of the profits of the development and a 3% commission on all sales. 6. This has given rise to the following claims:-    (a) claims by Rabe against Rahif for AED 7.5 million and 5,203,510 (about £2 million in all) pursuant to an oral agreement allegedly made in March 2005 for payments on account of commission and profit share, and for declarations and an account;    (b) a claim by Rahif against Rabe to remove a 2nd charge on Park Hospital dated 29th De-cember 2005 purporting to secure Rabe in respect of the claim for a profit share; and    (c) claims by Rahif against Rabe relating to a villa and a Porsche car transferred to Rabe and used by him while he was in Dubai, from August 2004 to about April 2006, which Rabe claims were part of his remuneration. 7. These disputes have been difficult to resolve for a number of reasons, including the passage of time, the lack of documents evidencing the transactions, the conclusion that I have reached that the evidence of each of the brothers and of Mrs. Alhalak is, in part, untruthful and, in the case of Rabe, his limited command of the English language, resulting at times during a lengthy cross-examination in his not properly understanding the questions put to him and to incoherent answers. I have therefore had to rely, even more than is usual, on what is inherently likely, based on a limited amount of objectively ascertainable evidence and, as regards the evidence of the witnesses, on such parts of it as seemed to me to ring true. Quite a few side issues have been thrown up by the evidence, relating mainly to the parties’ conduct towards each other, which it is not necessary or, for the most part, possible for me to resolve. 8. For the reasons set out in detail below, I have concluded:-    (a) that Rahif was told of the 1st charge before he acquired his 45% interest in Park Hospital;    (b) that the 1st charge is not a sham;    (c) that it is not established that no debt is due under it;    (d) that it was agreed that Rabe would receive much greater remuneration for his work in Dubai than his nominal salary, including the sums he was in fact paid and the villa and the Porsche car that were transferred to him by Rahif; but    (e) that there was however no agreement whereby Rabe was entitled to a third of the profits of the development in Dubai, or 3% commission on sales, or the specific sums on account which he claims. 9. The result of the action, therefore, is that none of the brothers succeeds in any substantial claim. Rahif is entitled to an order removing the 2nd charge on Park Hospital, although it is very unlikely that this will make any practical difference to the financial position between the parties. Otherwise all claims and counterclaims are dismissed.                The parties             10. Rahif came to England in 1983 and obtained M.A. and Ph.D. degrees in civil engineering. He then formed a company called Microcomputers, which carried on business as wholesalers. On 2nd March 1998, he was convicted of several offences of handling stolen goods and was sentenced to 5 years imprisonment. He was released after 2½ years, in September 2000. Shortly after that, he went to Dubai, where he mainly lives, although he also bought a substantial property called Maple Farm in Knutsford in 2002, which he still owns. 11. Raghid, who does not speak or read English, has spent much of his life in Saudi Arabia. He ran a suc-cessful importing and wholesale business there from about 1982 (when he was 17) until 2006. In order to comply with Saudi Arabian law, the business had to be in the name of a Saudi national, and there was an agreement between that individual and Mr. Al Zuabi’s wife, a Saudi citizen. 12. According to Raghid, in 2003 Rahif illegally laundered 20 million riyals through Mr. Al Zuabi, leading to a dispute between them and the nominal owner of his business, which provoked the latter to “eat his (i.e. Raghid’s) rights” in it. Litigation has been proceeding in Saudi Arabia since then. Raghid’s evidence is that these events led him to give up his business in Saudi Arabia and to move to Syria, where he was between about 2006 and 2012; he then came to England to escape the turmoil there. It is not for me to resolve the issues relating to Raghid’s business in Saudi Arabia, the nature of which are in any event unclear, but Raghid accepted in cross-examination that he had blamed Rahif for the loss of his business since 2003 and the depth of his resentment (whether or not justified) was obvious as he gave evidence. 13. Rabe is and has since 1981 been resident in this country. He has been involved in the property market but, as far as the evidence goes, on a fairly small scale. Nevertheless, his family home in North London is of sufficient value to warrant a mortgage of £750,000, and his income is sufficient to fund considerable running expenses relating to Park Hospital. To a large extent, the sources of his income are, as Mr. de Waal Q.C. said during his closing submissions, “a mystery”. 14. Rahif’s evidence was that he had frequently been generous to his brothers and other members of his family; he had always been a wealthy and successful man, whereas they had limited ability and were always struggling. In particular, he had provided funds to enable Raghid to buy his house in Saudi Arabia. Raghid denied this, and said that, for some time after Rahif left prison, he had no money, and that he, Raghid, had had to lend him money. Both Raghid and Rabe accused Rahif of fraudulent conduct, including forgery relat-ing to family property, and of money laundering. On the other hand, Rahif says that Rabe had always be-haved badly, and had defrauded him in a transaction that had taken place in 1991; he had however crept back into his good books by showing sympathy when he was in prison. I have no means of determining the truth about any of these matters, but the at least intermittently poor relationship and mutual contempt be-tween the brothers, mixed at times, for Rabe and Raghid, with respect for Rahif’s academic achievements, is part of the background to this case.                Other proceedings             15. Before relating the detailed facts, I should refer to two other legal proceedings between the parties. 16. The first in time was an action brought by Rabe against Armada and Rahif in the Dubai Labour Court on 16th July 2006 for the allegedly unpaid commission referred to above and salary. On 7th July 2007, the court dismissed the claim for commission and gave judgment in Rabe’s favour only for unpaid salary of AED 16,000 (about £2,000). This decision was upheld by the Court of Appeal on 21st February 2008, although it slightly increased the award, and by the Court of Cassation on 3rd November 2008. 17. The second one was an application made by Raghid, instigated by Rahif, to remove the 2nd charge on Park Hospital (which secured Rabe in respect of his claim for an agreed payment on account of the profit share) from the register of charges. This application, with which Raghid’s evidence in these proceedings is inconsistent, was referred to the Adjudicator of the Land Registry on 20th September 2006. On 4th April 2008, Raghid wrote to the office of the Adjudicator to say that he did not wish to proceed with the application, and on 7th May 2008 the Adjudicator refused Rahif’s request to be joined as a party to it.                Rahif’s acquisition of a 45% interest in Park Hospital             18. By a conveyance dated 21st March 1997, Raghid acquired the freehold of Park Hospital, Liverpool for a purchase price of £251,000. There is an issue between Rahif on the one hand and Raghid and Rabe on the other as to whether Rabe was the beneficial owner of the whole property (as Rahif says he was told) or only of a 75% interest, with Raghid as the beneficial owner of the other 25% (as Rabe and Raghid say). By a charge dated 12th July 1998, which was registered in November 1998, Raghid charged the land with pay-ment of £400,000 plus interest of 15% p.a. payable quarterly in favour of Mr. Al Zuabi. Mr. Al Zuabi trans-ferred the charge to Pearl Trading on 31st May 2001. 19. It is common ground that, at the time of Rahif’s acquisition of a 45% interest in Park Hospital in 2003, it was thought, because of offers or at least expressions of interest received, to be worth in the region of £2 million. Rahif’s case is that he paid £950,000, which is consistent with a value of £2 million; Rabe’s and Raghid’s case is that he paid £600,000, reflecting a value taking into account £800,000 by then due on the charge. 20. Rahif’s case can be summarised as follows:-    (a) Rabe approached him in April 2003 saying that he was the beneficial owner of Park Hospi-tal; it was in Raghid’s name because he was not resident in the U.K. and capital gains tax could be avoided. There was an offer of £2 million for the property.    (b) There had been some Saudi investors who had had a small interest in it, but they had been paid off by April 2003, and Rabe was now the 100% owner.    (c) Agreement was reached at his house in Manchester, in April 2003, after he had been taken to see the property as in Liverpool; he also spoke to Raghid.    (d) He had insisted on Raghid having a 10% interest (5% from each of them) because his name was always being used in Rabe’s transactions, and because he had agreed to hold his (Rahif’s) share on trust for him.    (e) Accordingly, he agreed to pay £950,000, as and when he could afford it, for a 45% interest in a property worth about £2 million.    (f) He was at no stage shown or told about the charge.    (g) He only agreed to participate in order to help his brothers. 21. As to payment, Rahif’s case was that he paid the £950,000 as follows:-Click here to view imageClick here to view image22. Rabe’s and Raghid’s evidence can be summarised as follows:-    (a) The beneficial ownership of Park Hospital was 75% Rabe, 25% Raghid.    (b) By April 2003, there was an offer of £2 million, and other expressions of interest, including some about a joint venture.    (c) Rahif became aware of the property by overhearing a telephone call of Rabe’s and asked Raghid about it: he became very keen on acquiring an interest.    (d) They were reluctant to allow Rahif to participate, because of his earlier misconduct relating to other family property; again I have no means of assessing the truth about this.    (e) Nevertheless, Rabe showed Rahif the property and there were discussions between them at Rahif’s house in Manchester; Rabe informed him about the charge and showed him a copy of the entry at the Land Registry. Rabe explained that the interest rate on the charge was 15%, and that his mother-in-law, Mrs. Alhalak, had an interest in the charge.    (f) No agreement was reached in Manchester, because Rabe had to discuss it further with Raghid.    (g) Rabe went to Dubai in May 2003 and an agreement was reached, which Rahif did not want to have set out in writing, that Rahif would buy a 45% interest from Rabe (30%) and Raghid (15%) for £600,000, payable in two equal instalments. 23. Rabe’s evidence about payment was that he received two payments of £300,000 each in June and De-cember 2003. He denies receipt of any of the alleged cash payments in 2003, other than the two payments of £300,000; he admits receipt of payments totalling £162,500 from the account of Mark Towers, but states that these were repayments of money due from Rahif to Raghid, unconnected with the property. He says that he settled with Raghid separately. 24. As with much of this case, there are obscurities in the evidence, but I have concluded that Rabe and Raghid were telling the truth about disclosing the existence of the charge. I find that Rahif acquired his 45% interest in the full knowledge that Park Hospital was subject to a charge of £400,000 plus 15% p.a. interest, and that this protected his brothers’ interests, as found later in this judgment. It is impossible to say how much Rahif was told of the details of the those interests which, as will appear, are not straightforward, but I am satisfied that he was given the broad picture at least; I doubt if he was greatly interested in the details. 25. The reasons why I reach this conclusion are as follows:    (a) I do not see how Rabe could have risked not telling Rahif. Rahif was an astute, experienced businessman and had an aggressive personality. Putting it at its lowest, Rabe could not have been sure that Rahif would not carry out the usual searches (the charge was registered on 12th July 1998) and, even if he did not, the truth would inevitably come to light when the property was sold which, at the time, all hoped would be in the not too distant future.    (b) Rahif’s pleaded case, that it was agreed that he would pay the price “as and when he could afford it” is improbable. He himself says that he was a wealthy man at the time, who would have been able to make a payment of £475,000 on his credit card; while it is understandable that he might have wished to pay a price of £600,000 in two equal instalments, it is not easy to see why he would have wished to pay £950,000 in dribs and drabs, as he now says he did.    (c) The total of his payments adds up neatly to £950,000, but this is only achieved by a miscal-culation of the exchange rate; the AED payment in June 2003 was almost exactly £300,000, not £309,968.    (d) There are no documents supporting the alleged cash payments in 2003 totalling some £152,000. I asked about this and Rahif said that he would produce documents, but did not do so. There are no documents or records, or even notes. The absence of documents pervades both sides’ cases and is of itself not all that surprising, but I do not see how he could remem-ber, for example, that he made two payments of £3,426 and £1,089 on 15th April 2013 without documents. In my view, Rahif’s payment schedule is largely invented. 26. Mr. Booth Q.C. submitted that it was unlikely that Rahif would have agreed to pay £600,000 for a 45% interest, when the amount of the charge was rising by 15% per annum, in circumstances in which there was as yet no formal valuation of the property and no planning permission. There is some force in this but it does not persuade me to a different conclusion. The evidence shows that there was genuine interest in Park Hos-pital even without planning permission, and Rabe’s evidence, that there was unlikely to be difficulty in ob-taining planning permission for residential development, and that there had been some discussion about a section 106 agreement, was convincing. Despite the uncertainty, I think that there was, in 2003, optimism about the outcome of this project. 27. Mr. Booth made a number of other submissions as to this issue, which for the reasons indicated below I do not accept:-    (a) That the amount secured by the charge was not at any material time £800,000 and that, in any event, since discussions on the defendants’ case took place over a period, there would have had to be ongoing calculations of the amount due. By my calculation, the amount would have reached £800,000 by July 2003, and so would have been approaching it during the dis-cussions. I do not think that the difference would have been material at the time: all the broth-ers hoped, at the time, that there would be a large profit, and I do not think it likely that they would have bothered with week by week updated calculations.    (b) That if Rahif had known that the interest rate was 15%, a more economical source of fi-nance would have been sought. There is no evidence that any such finance would have been available for a project of this kind, especially with interest not paid but rolled up.    (c) That there would have been discussion about all kinds of matters to do with taking the pro-ject forward. That there were not is a bit surprising whether or not Rahif knew of the charge. The probable explanation is that Rahif was very busy with his Dubai project, and left Park Hos-pital to Rabe.    (d) That Rabe has given no detailed explanation amplifying para. 66 of his main witness state-ment, in which he said that the Towers payment of £148,500 in January 2004 was to discharge a debt due from Rahif to Raghid. However, he was not cross-examined about this, and there-fore had no opportunity to explain further. While the rule that every material point must be put to a party in cross-examination is not an absolute one, in this case I am left without any basis for judging whether Rabe’s evidence is plausible or not. 28. For these reasons, I find that Rahif was told that the property was subject to a charge for £400,000 plus 15% p.a. interest, that he paid £600,000 for a 45% interest and that he concocted his story of having paid £950,000 because he realised that the true price of £600,000 was inconsistent with his case. For reasons explained below, however, I prefer Rahif’s evidence that Raghid had no beneficial interest at the time of the transaction, and only acquired 5% from each of his brothers as a result of it.                Was the 1st charge a sham?             29. Rahif’s case on this is now that the 1st charge was a sham because Rabe was the beneficial owner of Park Hospital, and the charge protected his investment, as owner, in it. There was no genuine debt, and the object of the charge was to prevent creditors from getting possession of the property. None of Raghid, Mr. Al Zuabi, Pearl Trading or Saudi investors had any interest in the 1st charge. Earlier in the proceedings, Rahif alleged that the charge had been created at the same time as his purchase of the 45% interest, and was in-tended to affect his beneficial entitlement, but he now accepts that the dates do not fit and has abandoned this. 30. Rahif’s claim is for declarations that the 1st charge has been discharged and/or that it does not secure any debt or obligation owed to Pearl Trading, and for an order that the entry in the Charges Register relating to the 1st charge be removed. There is no alternative claim for an account of how much is due under the 1st charge. 31. It is common ground that the law is as set out by counsel, and reproduced in my judgment, in Earp v. Kurd [2013] B.P.I.R. 965:-    (1) A document is a sham if it is intended by the parties to give third parties or the court the appearance of creating between the parties legal rights and obligations which differ from those which the parties in fact intended to create: Snook v. London & West Riding Investments Lim-ited [1967] 2 Q.B. 786 at 802 per Lord Diplock.    (2) The court is slow to find that an agreement is a sham, and will not do so unless it is no more than a piece of paper which the parties have signed with no intention of it having any effect other than that of deceiving a third party and/or the court; the fact that a document is uncom-mercial, or even artificial, does not mean that it is a sham: Stone (Inspector of Taxes) v. Hitch [2001] EWCA Civ. 63 at para. 67.    (3) The parties’ motive for executing a document, which is intended to give rise to the rights and obligations which it evidences, is irrelevant; it is not undone “merely because there was an ulte-rior purpose in doing it”: Miles v. Bull [1969] 1 Q.B. 258 at 264 per Megarry J.    (4) As to the amount of an advance being shown as greater than the advance in fact made:-    “… there is no legal principle that states that parties cannot agree to assume a certain state of affairs is the case at the time the contract is concluded or has been so in the past, even if that is not the case, so that the contract is made upon the basis that the present or past facts are as stated and agreed by the parties.”    See Springwell Navigation Corporation v. JP Morgan Chase Bank [2010] EWCA Civ. 1221 at para. 143.    (5) A party is estopped from denying the truth of the factual statements or assumptions made in a contract or deed; whereas in equity, notwithstanding estoppel by contract or estoppel by deed, a party may seek to show that money is stated to have been paid had not in fact been paid, such a plea will fail, and a party will be bound by the deed or contract, where he knew that what was stated in it to exist did not in fact exist: see Close Asset Finance Limited v. Taylor [2006] EWCA Civ. 788; Solcom Trading Limited v. Tatik Inc [2012] EWHC 3464 (Ch) at paras. 285-7.” 32. According to the evidence of Rabe and Raghid, from about 1993 onwards they carried on business to-gether, buying and selling inexpensive properties with financial assistance from investors in Saudi Arabia found by Raghid. There were five main investors, including Mr. Al Zuabi, and other smaller investors. Inves-tors were promised either interest, never lower than 15% p.a. (which compared well with commercial finance rates on this kind of transaction), or a profit share, and either way a fair return. The investors trusted Raghid: the only written confirmation they received was a receipt stating that the sum in question had been invested in the UK. From time to time, investors asked for and received repayment. I accept Rabe’s and Raghid’s ev-idence about this, and I do not find it surprising that it is not supported by documents. They trusted each oth-er and, since all these transactions were completed many years ago, there has been no need to keep docu-ments. It is not clear from the evidence what the agreement was between Rabe and Raghid; my impression is that Rabe had the larger beneficial interest, commensurate with Raghid’s limited role of finding some of the finance and holding the property in his name. 33. Park Hospital was bought, as already stated, in March 1997. Rabe found it and negotiated the price. He states, and I accept, that £100,000 of the purchase money was paid out of an account in Raghid’s name beneficially owned by Rabe, containing funds derived from the proceeds of sale of their properties. £148,500 was financed by a company called Commercial Acceptances, on the security of some of other properties in which Saudi investors had an interest. Raghid’s evidence is that he paid £4,000 or £5,000 from money pro-vided by Saudi investors, so as to make up what was needed for the purchase and expenses. I accept this evidence too. 34. Rabe’s and Raghid’s evidence that the beneficial ownership of the property was 75/25 is inconsistent with Rabe’s evidence in the adjudication proceedings that Raghid had no beneficial interest. I do not accept their evidence on this. I find that Rabe was the beneficial owner of the property and I think it likely that the purpose of putting the property in Raghid’s name was indeed, as Rahif says he was told, to avoid tax if sub-stantial profit resulted from the purchase. Rabe received both the £300,000 payments, and there is no doc-umentary evidence showing that he paid Raghid any of it. 35. Rabe and Raghid then go on to say that, over the next year, other properties were sold, and that the proceeds were used to repay, gradually, the Commercial Acceptances loan. Investors whose money had been used to fund the purchases of those properties, and who had beneficial interests in them, were either repaid, or agreed to have their interests changed to interests in the Park Hospital property. 36. The main issue is what the £400,000 charge in favour of Mr. Al Zuabi represented. What is pleaded in the Defence (not by counsel presently representing the defendants) is as follows:    “10. After 3 months the groups of investors referred to above provided money to pay off the Commercial Acceptances’ loan and by so paying had a beneficial interest in the Property or in any event were treated as having such interest by the First and Fifth Defendants.    11. In or around June 1998, it was agreed between the said investors and the First and Fifth Defendants that the investors would release and surrender any interest in the Property in return for an agreement to pay the sum of £400,000 plus 15 per cent interest per annum secured on the Property.    12. In pursuance of the said agreement, the First Defendant executed a written charge dated 12th July 1998 (i.e. “the First Charge”) which charged the Property with payment of £400,000 plus interest at 15 per cent per annum to Farooq Mustafa Assam Al Zuabi (“Mr. Al Zuabi”).    13. Mr. Al Zuabi represented the investors referred to above who had paid off the Commercial Acceptances’ Loan.” 37. This makes little sense, as the amount due on the Commercial Acceptance loan could not, after 3 months, have come to more than about £160,000 and could not have warranted a charge of £400,000. In any event, as is clear from the above, the defendants’ evidence does not support the pleading; they say that the repayment of Commercial Acceptances was funded by selling their other properties, not by the investors. 38. Rabe’s and Raghid’s evidence about this was not very clear, but they frankly accepted that the £400,000 did include Rabe’s contributions to the purchase price and expenses, and said that it represented:-    (a) the £100,000 paid by Rabe towards the purchase price;    (b) £4,000-£5,000 paid by Raghid on behalf of investors;    (c) amounts repaid to Commercial Acceptances out of the proceeds of sale of other properties owned by Rabe and Raghid;    (d) amounts contributed by investors for the purchase of the other properties, which they agreed should now be charged on Park Hospital; Raghid said that these amounted to £70,000 and that he had repaid the investors and stood in their shoes;    (e) security and maintenance expenses paid by Rabe and Raghid; and    (f) interest on all the above. 39. I find that this part of their evidence was truthful. The evidence that the other properties had been fi-nanced in part by Saudi investors found by Raghid, and that those properties had had to be sold to pay off Commercial Acceptances and to help with the expenses of Park Hospital, which was Rabe’s pet project, was convincing. If this evidence is correct, as I find it is, it is inherently credible that investors were told that their investments (unless repaid) would now be in Park Hospital, and this provides a sensible commercial ra-tionale for a charge to secure these amounts. It is not clear from the evidence whether Raghid repaid inves-tors £70,000 before or after July 1998 but, again, it is inherently credible that whenever he did so it was on the basis that he took over their position and stood in their shoes. 40. Mrs. Alhalak’s evidence is inconsistent with the above. She says in her witness statement that Rabe told her that Raghid had used “lenders’ monies” to pay off Commercial Acceptances. Whether or not that is what Rabe told her, I am satisfied that this is not what happened; Rabe and Raghid used the proceeds of sales of other properties. 41. As noted earlier, Rahif’s claim is that the 1st charge should be removed on the basis (a) that it was a sham, or (b) that since Rabe was the only beneficiary of it, and since he could not owe himself money, noth-ing was or could ever be secured by it. 42. I do not think that the 1st charge was a sham. There is now no question of it having been entered into to defraud Rahif, as it was completed 5 years before his acquisition of a 45% interest. The motive could not have been tax evasion because the ability to evade tax was achieved by putting the property into Raghid’s name. Mr. Booth suggests that the motive was to put a barrier in place against any future creditors of Rabe but this, although possible, is not very convincing. There is no evidence that Rabe was ever in trouble with creditors. 43. I find that, whether or not the charge is effective insofar as it secures Rabe’s contribution to the purchase price, it was and is not a sham. There was no intention to deceive anyone. In the course of his evidence, Rabe said quite openly and naturally that he was both an owner of the property and a creditor and I think that this was how he genuinely saw it. The object of the charge was, I find, to put the interests of all those who had contributed to the financing of the purchasing into one pot, for distribution pro rata. They would share the proceeds up to £400,000 plus 15% interest; only the surplus would be available for the owner, who as I have found was Rabe. This would ensure that the Saudi investors’ interests (or Raghid’s when he paid them) would be protected, but that in the event of a shortfall they would not take precedence over the owner, Rabe, who would rank equally with them. Given the uncertainty as to when, and how profitably, Park Hospital would be developed, this was (legal issues aside) a not unreasonable way of adjusting everyone’s interests and providing a reasonable return on a risky transaction. 44. As to the return, Mr. Booth submits that the interest rate was excessive, especially as it was Rabe’s and Raghid’s evidence that it was understood to be compound interest if unpaid, and therefore indicative of a sham, but this was clearly not a prime commercial project for a bank to finance, especially with parties who would be unlikely to be able to pay the interest until the development took place. It is not surprising that Commercial Acceptances required other security. Interest of 15% is certainly not obviously excessive in the circumstances, and there was no evidence before me as to what a reasonable rate would have been at the time. 45. Mr. Booth’s alternative argument in support of Rahif’s case that nothing was due under the charge is that Rabe was the only party whose interests were protected by the charge, and that as the beneficial owner he could not owe money to himself. I have found that he was not the only party whose interests were protected, and the charge is at least valid to the extent that it secures the contributions of investors (whether or not paid off by Raghid or Ms. Alhalak by the time of the 1st charge) or Raghid’s other contributions to expenses; Raghid had no beneficial interest in the property in July 1998, or at any time before 2003. It follows that Rahif is not entitled to the declaration he seeks that nothing is due under the charge. 46. It is therefore unnecessary for me to decide whether Rabe, the beneficial owner of the property, can have an effective interest in the charge to secure his contribution. His interest seems likely to be over half the total but, in the absence of a claim for an account, the evidence available does not permit accurate assessment and the issue is probably academic since the possibility of a sale for a substantial amount seems remote. The issue will only arise if there is a sale at an amount which exceeds or may exceed the amount of the debts secured by the charge, not including Rabe’s contribution. In that event, the starting point may well be Mr. Booth’s proposition that, even if the transaction was not a sham, there is a separate issue as to what was due under the 1st charge, and that this cannot include money paid by the beneficial owner to acquire or maintain the property: see Vickers v. Jackson [2010] EWHC 2213 (Ch.) (HHJ Purle Q.C.), [2011] EWCA Civ. 725. But it may be arguable that the protection for Rabe’s interests reflected in the 1st charge is contractually binding on the parties, including Rahif, even though it might not be on outside creditors. There might also then be issues arising from substantial continuing expenditure on the property since 1998, incurred by Rabe or Raghid or both. 47. Considerable time was spent in exploring the subsequent events, namely loans made or allegedly made by Mrs. Alhalak between 1998 and 2001 and the transfer of the 1st charge to Pearl Trading in July 2001, but I do not think that they matter. Either the 1st charge was valid and effective in July 1998 or it was not. I will however deal with these matters briefly. 48. Raghid gave evidence that between 1998 and 2001 Mrs. Alhalak paid off Saudi Arabian investors, in-cluding £30,000 to Mr. Al Zuabi; his evidence was not very clear, but he said that she paid at least £153,000. She had also paid Raghid some money. Mrs. Alhalak gave evidence to the same effect, although without specifying the amount of her payments, and said that she had been able to do this because she had inherit-ed considerable wealth from her husband. She sought to support this by a claim that she had bought a prop-erty in London for £300,000 and sold it for £370,000, within the previous few years, in each case for cash. There were no documents to support this relatively recent transaction, and no particulars of the property were offered. I do not believe that Mrs. Alhalak would have been able to buy and sell a property in London for cash and I reject this part of her evidence, which was designed to add colour to her evidence that she had substantial means. Nevertheless, I accept that she had means, and bought all or some of the debts secured by the charge from Saudi Arabian investors and from Raghid, prior to the charge being transferred to Pearl Trading, although I am not convinced that Raghid’s evidence about the amount she paid is accurate. 49. Rabe’s evidence is that the transfer to Pearl Trading took place because of difficulties originating in Rahif’s money laundering transactions with Mr. Al Zuabi. I am not convinced that this is true, and another perfectly possible reason is that, once the Saudi investors had been repaid, there was no need to have Mr. Al Zuabi in place to represent them. At all events, I am satisfied that Pearl Trading was set up as an offshore vehicle to house the interests of Rabe, Raghid and Mrs. Alhalak in the money secured by the charge. It is unnecessary for me to consider how much of the amount secured by the charge is referable to Rabe’s con-tribution or whether, as between Rahif and Rabe, it would be protected by the charge. Nor is it necessary for me to consider in what proportions Mrs. Alhalak, Rabe and Raghid are the beneficial owners of Pearl Trad-ing. 50. The overall position therefore is that the charge represents an agreement between Raghid and Rabe that, if Park Hospital was sold, the first proceeds of sale up to £400,000 plus 15% p.a. would be paid rateably to Rabe, Raghid and Saudi investors (or purchasers of their debts) in accordance with their contributions; any proceeds above that would be paid to the beneficial owner of Park Hospital (at the time Rabe, now Rabe, Rahif and Raghid). The charge is effective as regards the contributions of Raghid and Saudi investors; whether it is effective as regards Rabe’s contribution is not an issue in this action.                Conclusion on Park Hospital 1st charge claims             51. For the above reasons, Rahif’s claims in respect of the 1st charge fail.                Rabe’s and Rahif’s Dubai claims and the 2nd charge on Park Hospital             52. In this part of the case:-    (a) Rabe claims AED 7.5 million and AED 5,203,510 for unpaid profit share and commission, and accounts; Rahif denies any liability for profit share or commission and seeks the removal of the 2nd charge on Park Hospital securing the alleged unpaid profit share.    (b) Rahif claims (i) that it was agreed in about March 2005 that he would repurchase the villa and that he paid Rabe for it; Rabe however sold it in 2006 and is liable to account for the pro-ceeds, (ii) that Rabe is also liable for AED 153,750 as the unpaid balance of the loan to Rabe to finance the original purchase of the villa in August 2004 and (iii) AED 225,000, the value of a Porsche car transferred to Rabe; Rabe claims that it was agreed that he could keep both the villa and the car free of charge as part of his remuneration, and denies that it was ever agreed that he would sell the villa back to Rahif. 53. Rahif went to Dubai in about 2002 and set up as a property developer. His main development was a mixed residential and office development in Dubai called Armada Towers, consisting of 3 towers, on land bought by Rahif in January 2004. Sales of units off-plan started in 2005; they were handled by Armada, which was entitled to some of the profit, but Rahif personally owned the property. Rahif was a, but not the sole, shareholder in Armada. Construction of the towers was completed during 2010. According to Rahif, there were delays, cost overruns and cancellations of sales, resulting in losses; the evidence about this was however unsatisfactory; accounts for the years 2005 and 2006 were produced, but there was no explanation for the absence of later accounts. Rahif’s other development was called Salam Towers, in Sharjah, but this was eventually cancelled. 54. According to Rahif:-    (a) In July 2004, Rabe had no work and wanted to leave England with his family.    (b) Wishing to help him, Rahif offered him employment with a Dubai company in which he had an interest, Omran-Global Cont. Co. LLC, as from August 2004, at a salary of AED 10,000 per month; this is evidenced by a contract dated 28th January 2004, which Rabe says he never signed or even saw until disclosure in the action.    (c) On 19th August 2004, Armada wrote to Rabe offering to employ him as an administrative manager; again Rabe’s evidence is that he did not see this until disclosure.    (d) As from 29th December 2004, Rabe was employed by Armada as an administration man-ager at a salary of AED 15,000 per month, this is evidenced by a contract dated 4th January 2005. Rabe accepts that he signed this.    (e) Rabe was an idle and useless employee who, occasionally, came into the office to read the newspaper.    (f) There was no other business relationship between them. 55. According to Rabe:-    (a) In July 2004, Rahif was in trouble with the development, and pressed him, against his incli-nation, to move to Dubai with his wife and 2 young children; Rahif needed both assistance in sorting out difficulties, which Rabe’s experience in the property business (especially in relation to Park Hospital and an earlier purchase of substantial other former hospital premises) would enable him to provide, and some financial assistance.    (b) Rabe had earlier spent several days in Dubai, successfully sorting out issues that had aris-en between Rahif and the 51% shareholder in Armada, a Mr. Al Omran.    (c) In July 2004, the project was at an early stage, with no detailed organization in place.    (d) Rabe asked Rahif for an equal share in the profits; Rahif would not agree to this, but did agree to a one-third share plus 3% commission on sales. Rabe was also to provide working capital, if required.    (e) His employment by Omran-Global and Armada was solely for the purpose of obtaining a visa and did not reflect the underlying agreement between him and Rahif, and he was never paid the salary provided for in it.    (f) Until he left in about November 2005, he worked full time, and played a full and significant role as an executive in the business; he described himself as in effect the general manager. 56. It is common ground that Rabe was provided with both a villa and a Porsche car shortly after his arrival. I deal with the disputes about these later in the judgment. The villa was transferred to him on 16th August 2004. The price was AED 1,425,800 (about £240,000), of which Rahif paid AED 1,050,000 and Rabe AED 375,800. The car was worth AED 225,000. 57. Rabe’s nominal salary was initially AED 10,000 per month. As from January 2005 it was AED 15,000 plus allowances for a car and accommodation; however since both a car and a villa were provided, these were not needed. It is clear on the evidence, however, that in fact AED 30,000 per month was paid as “manage-ment fees” from August 2004 which, it is common ground, is when Rabe arrived in Dubai. By March 2005, Rabe had been paid AED 210,000, when his nominal salary was no more than AED 95,000. 58. Despite Rahif’s evidence that Rabe had no real involvement in Armada’s business:-    (a) There is an unsigned resolution dated 2nd August 2004 showing Rabe’s appointment as attorney for, and manger of, Armada FZ-LLC, a company in which Rahif was the sole share-holder. Rahif’s evidence was that this was an offshore entity with no commercial activity and he could just as well have appointed the tea boy; he also doubted the authenticity of the docu-ment.    (b) There are two documents signed by Rahif showing Rabe to have responsibility for the ad-ministration of employees. The first relates to Armada FZ-LLC and authorises Rabe to sign documents relating to the administration of employees, which suggests that the company was not inactive. The second authorises Rabe to collect and deliver documents and refers to him as “Vice Chairman”; it is not clear to which company this refers.    (c) There is also a Selling Agreement dated 9th December 2004, by which Armada appoints an agent to sell units in Armada Tower 3 and Salam Tower, signed by Rabe.    (d) There are a number of documents showing that he had responsibility for sanctioning pay-ments of commission to salesmen.    (e) Finally, there is a newspaper report on 19th February 2005 on the signature of a contract to build Armada’s “vast and plush” new offices in Dubai; there is a photograph of Rabe, who is referred to as “Vice-Chairman, Armada Group.” 59. Rabe was of course asked in cross-examination to explain why the alleged agreement was not in writing. He said that Rahif had been unwilling to have a signed agreement, and that to have pressed him would have been to imply distrust. Rahif had agreed within a few weeks to forgo repayment of the loan and to repay the AED 375,000 Rabe had paid for the villa and thus in effect give him the villa as a payment on account. 60. On 13th September 2004, Rabe made two payments totalling AED 695,000 ($190,000) to Rahif. Rabe says that they were made in accordance with his obligation to contribute working capital; Rahif says that they were partial repayments of the loan he had made to assist Rabe to buy the villa. Rabe says that he also made a contribution of $25,000 in cash. 61. On 20th October 2004, Mark Towers paid Rabe AED 250,000 by cheque. Rabe says that this payment was made by mistake and that he repaid AED 25,000 to Rahif’s wife and AED 200,000 to Rahif. Rahif says that the payment of AED 200,000 was, again, a partial repayment of the loan for the villa. 62. On 2nd December 2004, Rabe transferred $475,000 to his account in Dubai, his evidence is that this was in order to make it available to meet an instalment then due for the purchase of the land for Armada Towers; however, it was not needed. Rahif denies this. 63. Rabe’s evidence is that by the beginning of March 2005, sales were buoyant and it was obvious that the project would be very profitable; however, he had received very little. He therefore pressed Rahif for further payment in a number of meetings at which Raghid, who was in Dubai, was present. The first result of this was a payment of AED 375,000, representing repayment, as promised some months earlier, of the amount he had paid towards the villa. This is shown in Armada’s books as “co/ Mr. Rabe Cash given ($1,300, $5,700, AED 349,437) (VILLA)… 375,000.” $7,000 plus AED 349,437 is indeed about AED 375,000. The payment was in cash, Rahif having first drawn the money from Armada’s account. Rahif’s case on this pay-ment is unclear. At para. 26 of his Reply, the payment is denied, and nothing is said in his counsel’s written schedule of comment on the various payments, prepared during the trial at my request. 64. Rabe’s case, fully supported by Raghid’s evidence, is that discussions over the next four days resulted in agreement being reached on 7th March 2005 as follows:-    (a) Rabe would be paid AED 9,360,000 commission, representing 3% of the sales to date of AED 310 million, as soon as possible.    (b) Credit would be given for the villa (AED 1,450,000), the Porsche car (AED 225,000) and the “management fees” already paid (AED 210,000), leaving approximately AED 7.500,000 due.    (c) Rabe would also be paid AED 7.5 million on account of his profit share by December 2005.    (d) If the profit share was not paid, there would be a 2nd charge on Park Hospital to secure it; Raghid would execute a power of attorney in favour of Rabe for this purpose, and his (Raghi-d’s) interest would be subject to the charge. 65. Rahif denies that any such agreement was made, and disputes the authenticity of two general powers of attorney signed by Raghid in favour of Rabe and dated 10th March 2005, witnessed by John McKenzie and Basil Mousa, who are, respectively, a property developer who has worked with Rabe for many years and Rabe’s brother-in-law, both working for Armada at the time. 66. The evidence as to the payments made after the alleged agreement in March 2005 is confused, but the position appears to be as follows:-    (a) Rahif withdrew cash totalling AED 151,400 on 5th April 2005, of which AED 30,000 was for “management expenses”, and paid it to Rabe in cash. Rahif also paid Rabe AED 572,000 by cheque on 7th April 2005. Rabe claims that AED 693,400 (i.e. all but the “management ex-penses”) represented repayment of the capital injection totalling $215,000 that he had made in September 2004 (para. 60 above). Rahif claims that he had by this stage agreed to buy back the villa, and that the second payment of AED 572,000 was a part payment for this.    (b) On 12th July 2005, Rahif paid AED 895,440 to Rabe as a part payment, according to Rahif, of the price of the repurchased villa but, according to Rabe, of the commission due to him. Rahif puts the amount of the payment at AED 910,000.    (c) Rabe claims that six further payments of AED 230,000 cash were made between July and October 2005. One of these is challenged but on any view there were at least five monthly payments of the equivalent of about £40,000 which, according to Rahif, were made out of gen-erosity to his brother, because he said that he needed the money for his mortgage and other expenses.    (d) There is a document in the bundle, the authenticity and provenance of which was not ques-tioned in the evidence, which looks like an internal instruction by Rahif to the financial manager to pay Rabe a management fee of AED 30,000 monthly and a consultation fee of AED 200,000 monthly for 3 years, starting on 15th May 2005. There is also a letter dated 5th July 2005 from Rahif, on behalf of Armada, instructing Arab Bank to pay Rabe AED 230,000, broken down as to AED 30,000 management fee and AED 200,000 consultancy fee.    (e) The report of the Court’s financial expert in the Dubai proceedings refers to a letter dated 30th May 2005 in the same terms as the letter just referred to and states that Armada’s finan-cial manger had told him that everything above the basic salary was to be deducted from Rahif’s account “because it is not related to the company and it is against the consultancy that (Rabe) gives him (i.e. Rahif).” (my emphasis) 67. On 10th May 2006, Armada’s chief accountant, Miriam Ancheta, made the following declaration relating to documents which Rabe had asked her to create on 17th May 2005:-    “1. That I joined the firm on 18th September 2004 and have since been working as the Chief Account of Armada Group.    2. That I acted in the capacity of my job designation and carried out my tasks as was told to me by my superior officers including Mr. Rabe Alhakmi.    3. That Mr. Rabe Alhakmi was our Administrative Manager and on his request all these four (4) enclosed documents (dated 7th March 2005) were typed and printed by me on 17th May 2005 at 12:55 p.m. as per his instructions which had been checked by him and asked me to change some of the wordings. When the typing completed he took a soft copy on a floppy disk. All the mentioned figures were supplied by him, I never checked them and I do not know where he got these amounts from. I was surprised from the mentioned amounts as they do not have any re-flection in our records or books, but I never questioned them as I felt it is not my job to do so. Up to date I never seen any copies of these documents signed or unsigned in our files.    4. That those enclosed papers/documents were typed by me in my official capacity and I do not have any further knowledge or have any personal involvement in these matters/dealings. My involvement was in following instruction to type these letters.” 68. The main document attached was a draft letter dated 7th March 2005 from Rahif to Rabe:-    “We thank you for doing a great job as a Consultant for the past seven months. For these, we are pleased to inform you that we have decided to give you the following remuneration:-    a.) With a total amount of Nine Million Three Hundred Sixty Thousand Dirham (AED 9,360,000/-) break into:    AED 1,425000/-        Villa in Meadow 6, Road 9, Dubai, UAE    225,000/-                    Porsche car 3/27455    210,000/-                    Management Allowance for seven months    7,500,000/-                 Consultation Fee    ….    We hope for your continuous support on our Company.” 69. Rabe claims that this letter reflected the agreements reached in August 2004 and March 2005 about commission, but expressed in accordance with Rahif’s wishes so as to express the payment of AED 7.5 mil-lion as the payment of a consultancy fee by Armada, following discussions over the previous months; he had taken notes of what Rahif wanted. Rahif denied this, and said that he knew nothing of the letter until it was discovered on the computer in May 2006. 70. The other documents were draft letters from Rabe to Rahif at Armada’s address acknowledging receipt of AED 1,425,000 “(including) the amount of $315,000, the Porsche amounting to AED 225,000 and manage-ment fees of AED 210,000 for 7 months, in which (is included) … AED 151,050”. 71. These documents are significant for at least 3 reasons. First, the declaration is inconsistent with Rahif’s evidence that Rabe was no more than an occasional visitor to the office. Ms. Ancheta regards him as her “superior officer”. As chief accountant she would hardly accept instructions from someone who had no real position, even if the brother of a shareholder. Secondly, it seems unlikely that Ms. Ancheta did not tell Rahif about the documents or, even if he did not, that Rabe could have relied on her not doing so. Therefore, the likelihood is that they do represent what had been agreed. Thirdly, however, what they evidence is an agreement for consultancy fees, not an agreement for commission, and there is no reference to a profit share. 72. It is common ground that Rabe left Armada in mid-November 2005, but his and Rahif’s accounts of the circumstances in which this occurred differ considerably. 73. Rahif’s account, as pleaded in the Reply, is that Rabe had stolen money and used a false university de-gree to obtain a work permit. His contract was then lawfully terminated on 23rd November 2005 (although the letter terminating Rabe’s employment is dated 11th December 2005). 74. In his witness statement, Rahif said that Rabe had been a disruptive influence in the office since the summer and had been taking confidential papers. This is again inconsistent with his evidence that Rabe hardly ever went to the office and, if true, would make his alleged generosity over the same period surprising. Rahif said that he confronted Rabe with this conduct, whereupon Rabe made a lengthy speech in which he said that he had had a grudge against Rahif since childhood, and then left. 75. In his oral evidence, Rahif said that, having been warned that Rabe was copying confidential papers ear-ly in the morning, and fearing that he might be intending to set up in competition, he lay in wait for him and accused him of copying pages. Rabe denied this and then subjected Rahif to a tirade for several hours, ex-pressing grudges going back to childhood. Eventually, he asked whether he could be allowed to leave with dignity and Rahif said “You are my older brother, of course”. A couple of days later Rabe came back to clear out his office and tried to blackmail him by threatening to reveal his previous conviction to his partners in Ar-mada; Rahif asked him to leave the office. 76. Rahif accepted that he had caused an ‘absconding notice’ to be issued in April 2006, which leads to a conviction for the criminal offence in Dubai of leaving employment without authority and renders the em-ployee liable to arrest. He said that there was an obligation to report Rabe’s “disappearance” when he had not turned up to work for 6 months. However, according to Rahif’s oral evidence, Rabe had been asked to leave and on any view the employment had been terminated at the latest by 11th December 2005. It is diffi-cult to see how reporting him as an absconder can possibly have been justified. 77. Rabe’s account of how they parted in his witness statement was very brief, and his oral evidence was almost unintelligible. What both amounted to was that Rahif had offered to pay him AED 4.5 million of what he was owed, but from a source that was in some way tainted by money laundering. 78. One of the few facts that is common ground is that Rabe did leave Armada in November 2005 and did not come back. Up to this point in time, such contemporary documents as are available (paras. 66-7 above) suggest that there was a 3-year agreement to pay administration and consulting fees, but nothing to suggest an agreement to pay commission or any overall profit share. There is no trace of the claims now advanced until after the termination of Rabe’s employment, which would obviously put an end to any ongoing admin-istration and consulting services. 79. Rabe executed three documents as attorney for Raghid on 29th December 2005:-    (a) A deed of assignment, assigning a debt of AED 7,500,000 due from Raghid to Rabe in re-spect of his guarantee of 7th March 2005 to the 4th defendant (“Pearl Trading Finance”) in re-turn for the issue of 183 shares.    (b) A 2nd charge over Park Hospital in favour of Pearl Trading Finance securing a debt of £2,154,243 plus quarterly interest at 15% p.a., payable quarterly and compounded if unpaid; Rabe’s explanation of the amount is that it represented the outstanding AED 7.5 million on ac-count of the profit share, multiplied by 100/55 to reflect his beneficial interest in the property.    (c) A notice of assignment of the mortgage. There is no explicit reference in these documents to the alleged profit share, or to any other form of consid-eration for the debt. The 2nd charge was registered on 26th January 2006. 80. From March 2006, there was an ongoing exchange of correspondence between solicitors about a dispute between Anglefarm Ltd., another Marshall Islands company controlled by Rabe, and Armada. It is unneces-sary for me to reach any conclusion about this. 81. By May 2006, Rahif had discovered the existence of the 2nd charge. At this time, Raghid was on better terms with him than with Rabe, to whom he was not speaking. 82. On 17th May 2006, Raghid signed a declaration confirming that Rahif owned 45% of Park Hospital and stating that “in late November 2005” he signed 3 attached forms “with request to remove the charge on the premises dates (sic) 22 June 2001 in favour of Pearl Trading Ltd which I own”. 83. Two of the forms attached were:-    (a) A form DS1 in which Pearl Trading Ltd as lender acknowledges that the property is no longer charged as security    (b) A form TR1 by which Raghid transfers the property to himself and Rahif for £855,000. 84. Raghid said that he was pressured into signing the declaration:-    “A. This document actually has taken place during really mysterious circumstances. At that time I was in Dubai. Because of this document, I had so much pressure put on me, even this docu-ment has been changed many times and most of the documents are cursing Rabe. At that time Rabe (sic) was putting so much pressure on me. One of the pressure that he put on me was that my house in Saudi Arabia was in the name of a friend of his and if I didn’t comply with him then eventually then he might have a problem with that friend, which eventually that make me lose the house in Saudi Arabia, as what happened before.    Rahif at that time told me that Rabe has sold the property. At that time I was not speaking to Rabe and Rahif told me that Rabe has taken everything, the property, my share, without any consultation and he put so much pressure on me with a person that he used called Nazim. He was an engineer assistant. He was the project manager at his office. The pressure was for days and actually I am really sorry that I have signed this document and caused Rabe trouble or problems. That was a mistake and I shouldn’t have done it. And this is actually opposite of the truth.” 85. As to the attached documents, he disputed their authenticity, and they have no effect on the outcome of this action. As regards the DS1, it has not been acted on by the Land Registry. As regards the TR1, there is no dispute that the beneficial owners of Park Hospital are Rahif 45%, Raghid 10%, Rabe or assignees 45%. 86. On the same day, 17th May 2006, Raghid wrote to the Land Registry requesting cancellation of the 2nd charge, and he also wrote another letter to Rahif’s solicitors, Shallcross & Co., stating that he had not agreed to the creation of a 2nd charge. Raghid does not suggest in his witness statement that he did not understand what he was signing (although the letters were in English), but rather that Rahif had persuaded him that Rabe was trying to steal the property. 87. The letter to the Land Registry (translated from an Arabic version available to Raghid) read as follows:-    “Whereas the above mention premises are registered in my name at your office and it came to my attention lately by your letter to M/s. Sharllcross & Co. St. Albans DX6152 Dated 15th of May 2006 that above premises is mortgaged to M/s. Pearl Trading Finance LTD on 26th Janu-ary 2006 under mortgage dated 29th December 2005 (Mortgage Party), I would like to clarify the following    1. I never dealt with this Mortgage Party and I never heard of them before.    2. I never give any power of attorney to anybody to deal with this Mortgage Party in relation to this premises or to borrow any monies on this premises or to do any financial transactions or otherwise.    3. I have no knowledge of any mortgage or caution or anything similar on the ownership of this premise to this Mortgage Party.    4. I never give a power of attorney verbally or in writing to deal with this premises, mortgaging it, selling it, donating it or transferring the ownership to any third party.    Kindly requested to cancel any caution or mortgage on the above mentioned premises to the Mortgage Party or any caution on the above mentioned premises and I will not bear any moral or material responsibility resulting from wrong doing of others.    I reserve my right to claim any damages or compensation resulting from this action from any party whatsoever which caused such course.” 88. Raghid’s evidence was again that he had been pressured into writing a letter that he now regretted writ-ing. He said that the pressure was in part due to having been urged to believe that Rabe had sold the prop-erty and in part to a threat to his house in Saudi Arabia, arising from the situation involving a Saudi citizen who was its nominal owner, a Dr. Swayeh. I was not able to understand the nature of the threat from his ex-planation, but I was nevertheless left with a strong impression that Rahif had some hold over Raghid at this time. 89. Meanwhile, on 7th September 2006, Raghid executed a purported transfer of Park Hospital to himself and the 2nd defendant (“Gateway”), another Rabe-controlled Marshall Islands company. This was signed by Raghid in front of Ra’ad in Syria. It was registered on 13th September 2006. The transfer does not affect any issue in this action; nobody suggests that it affects the parties’ beneficial interests. However, it does suggest that Raghid was at this point in time on better terms with Rabe, and was co-operating with him. 90. Rabe started proceedings against Armada in the Dubai Labour Court on 16th July 2006, alleging that he had agreed with Armada (my emphasis) that his wages would be 3% of its real estate sales plus AED 30,000 administrative expenses, as well as, separately, a one-third profit from Armada Towers and Salam Towers, which he acknowledged to be outside the court’s jurisdiction. This is the point in time at which one finds the first reference to the claims for commission and profits share. Rabe claimed that he had been paid only AED 1,806,000 and AED 60,000 administrative expenses. He claimed that the balance of the commission was payable at AED 200,000 per month for three years as from 15th May 2005. This corresponds in amount with the internal document referred to at para. 66(d) above, which is also referred to in Rahif’s counsel’s chronol-ogy without comment and which I therefore assume to be an authentic document. Armada’s response was that Rabe was employed under the written contract of employment for a wage of AED 22,000 per month, including allowances. Rabe later amended his claim to add Rahif as a defendant, not on the basis that Rahif had contracted personally with him, but on the basis that he was liable as “the sole owner of the company”. 91. On 5th February 2007, Rabe’s lawyers were asked to attend a meeting with his witnesses. Rabe did not put forward Raghid as a witness, but only his mother who, he said, was out of the country. Mr. Booth submits that, if Raghid’s evidence to this court that he was present at the meetings in March 2005 had been true, Raghid would have been named as the main witness. However, this is perhaps a less powerful point than it might have been, given Raghid’s shifting allegiances in this case. Rabe’s mother later denied knowledge of any partnership agreement between Rabe and Rahif. 92. According to evidence presented by Armada to the court’s financial expert, everything paid to Rabe above the amount of his wages, as set out in the employment contract, had been debited to Rahif’s personal account with Armada i.e. paid personally by Rahif. 93. The Court decided on 7th May 2007 that Rahif was not personally liable for any amount due from Arma-da, as it was a limited company, the partners in which were not liable for its debts. It further held that Rabe had failed to report for duty from 14th November 2005 and that the contract had been validly terminated on 23rd November 2005. It upheld the court’s expert’s contention that any amounts over and above the wages in the employment contract had been paid by Rahif personally. Rabe was awarded AED 16,000 and interest, on the basis (a) that his wages were stated in the contract of employment and (b) that he had been justifiably dismissed on 23rd November 2005. As noted earlier, the Court of Appeal increased this to AED 32,000, but otherwise upheld the decision, as did the Court of Cassation. 94. I heard expert evidence on Dubai law principles (a) regarding res judicata, directed to whether the Dubai courts had decided against Rabe’s claims against Rahif and (b) regarding the need for writing for a partner-ship agreement or an agreement for a profit share to be valid. Since for reasons explained below I find that there never was any such agreement, I do not need to decide the second question. On the first question, it is clear from the pleadings that the Dubai Labour Court was not asked to consider a claim by Rabe against Rahif for breach of a contract entered into personally by Rahif. Nor could the Labour Court have been asked to decide any such issue, as Rahif was not Rabe’s employer. Whether there was a contract between Rabe and Rahif in his personal capacity, and if so its terms, are therefore not res judicata. The Henderson principle does not apply to such claims, as they could not have been brought in the proceedings in the Dubai Labour Court. Rahif was joined on the basis, rejected by the Court, that he was liable as owner. What the Dubai courts did additionally decide is clear:-    (a). Rabe was employed by Armada on the terms of the written contract of employment and was entitled only to the wages provided for in it,    (b). he was justifiably dismissed on 23rd November 2005, and    (c). any additional payments he had received were made by Rahif personally. 95. It follows that, if there was any contract between Rabe and Rahif, under which Rahif was obliged to augment the wages payable by Armada, that was a claim which would have to be pursued in a different court. In my view, all the above is obvious from the court documents and is not affected by any of the de-tailed evidence about res judicata in Dubai law. The evidence given by the financial manager to the Court’s expert suggests that there was just such a contract. 96. On 1st June 2007, Rabe lodged his own and Mr. McKenzie’s and Mr. Mousa’s witness statements in the adjudication proceedings. He refuted Raghid’s statement that he had not signed any power of attorney and asserted that he had discussed the second charge and its terms with Raghid just before using the powers of attorney to execute it. The statements of Mr. McKenzie and Mr. Mousa confirmed that they had witnessed the execution of the powers of attorney. Mr. McKenzie said that Rabe had explained to him that it was to enable him to execute a legal charge on Park Hospital if a debt due was not paid. Mr. Mousa said that Raghid had given him a similar explanation. Neither said that he was given any explanation what the debt was for. 97. On 3rd October 2007, Raghid’s solicitors lodged statements by the financial controller and H.R. Manager of Armada, making accusations of serious misconduct against Rabe, Mr. Mousa and Mr. McKenzie and as-serting that the powers of attorney could not have been signed and witnessed on 10th March 2005, given the events of that day which they recollected. 98. Raghid’s solicitors had also lodged a statement from a Mr. Jallad, a friend and work associate of Raghid, attaching a draft statement by Raghid who, he said, had approved it after it had been translated to him. In the draft statement, later signed, Raghid denied that any agreement had been made in his presence between Rahif and Rabe, that he had signed powers of attorney or that Rabe had contacted him about using them; he also said that Rabe was only an administrative employee. 99. However, in a note to Mr. Turner of Clyde & Co., (who were conducting the proceedings on his behalf) sent in early September 2007, he commented on the by now signed statement in some detail. He said that it was likely that he had signed the power of attorney, but that it was not for the purpose of a mortgage; Rabe held many powers of attorney for him. He continued:-    “Rabi was manager. An agreement was made before me on Feb. By which Rahif agreed to give Rabi 7.5 million in addition to car and villa to be paid within two years. Rabi latter told me that he was getting AED 200 thousand monthly under 7.5 million account. This also confirmed by Rahif. After the dispute, more than AED 5 million remains payable to Rabi as I know.” 100. Raghid said that, when this was sent, he had an Arabic translation in front of him. Thus, at this stage, Raghid appears to be correcting his evidence in a way that corresponds both to the internal instruction and to the documents produced by Ms. Ancheta, apart from the reference to 2 years. There is a reference to only one amount of AED 7.5 million, and he does not say what this payment is for. He confirms that Rabe was “manager”. 101. Rabe, Mr. Mousa and Mr. KcKenzie responded to these statements on 3rd October 2007 and, during the hearing before me, the defendants produced an email from Mr. Jallad to Raghid, sent in December 2013; it is not very coherent, but is possibly to be taken as a denial of his evidence in the adjudication proceedings.                Conclusions on the Armada Towers claims             102. I have concluded that Rahif has been deliberately untruthful on three matters, namely (a) his evidence that Rabe rarely came to the office and did nothing, (b) his evidence that there was no business arrangement between them other than the contract of employment and (c) his evidence about the villa. 103. As to his evidence that Rabe did no work, my reasons for disbelieving Rahif are as follows:-    (a) it is inconsistent with the documents (see para. 57 above);    (b) it is inconsistent with Ms. Ancheta’s declaration (see paras. 67, 71 above); and    (c) it is improbable that, if Rabe’s conduct had been so unsatisfactory, Rahif would have sanc-tioned payments of AED 30,000 per month, and inconceivable that he would have paid an addi-tional AED 200,000 per month after enduring several months of such conduct. Whether or not Rabe’s duties amounted to being the general manager, I am satisfied that he had, and per-formed, substantial executive duties. 104. As to Rahif’s evidence that there was no business arrangement other than the contract of employment, my reasons for disbelieving Rahif are as follows:-    (a) It is inherently improbable that Rabe would have moved to Dubai for such a small salary, and I found Rahif’s evidence that Rabe was desperate to move to a Muslim country for his chil-dren’s upbringing, and at the same time considering a move to Australia, inconsistent and im-plausible.    (b) While increasing monthly payments to AED 30,000 out of generosity is not wholly implausi-ble, increasing them to AED 230,000 was obviously the result of a business agreement; it is inconceivable that Rahif did this, as he asserts, just to help Rabe with his mortgage and other expenses.    (c) The contemporaneous documents suggest strongly that there was a business agreement between Rahif in his personal capacity and Rabe: see paras. 66-71 above. Indeed Armada’s financial manager said that there was a consultancy arrangement between them. 105. As to the villa, my reasons for disbelieving Rahif are as follows:-    (a) Armada’s books show a payment of AED 375,000 to Rabe for the villa, which corresponds more or less exactly with the amount paid by Rabe towards the purchase price.    (b) Rahif has not given any explanation of the reason for Rabe to resell the villa to him, in cir-cumstances in which it is obvious from the documents that at about the same time an ar-rangement was made involving Rabe remaining at Armada for at least 3 years.    (c) If indeed Rahif had paid Rabe out by July 2005, it is unlikely that he would have left the villa in his name.    (d) He claims that he paid Rabe AED 1,570,000, considerably more than the purchase price.    (e) He claims to have paid Rabe, while leaving outstanding a debt due from Rabe for the bal-ance of the original loan of AED 150,000, which he now claims in this action; this makes no sense.    (f) The documents produced by Ms. Ancheta, including the receipt relating to the villa, are con-sistent with Rabe’s case and reflect the true position. 106. I have also concluded that Rabe has been deliberately untruthful on both the matters that are central to his claim, namely Rahif’s alleged agreement to a one-third profit share and 3% commission. My reasons for this conclusion as are follows:-    (a) I do not find it plausible, having regard to Rabe’s limited experience, and ability to provide finance, that Rahif would have agreed to such generous terms at the outset.    (b) It seems to me very unlikely that, if definite terms of that kind had been agreed at the outset, there would have been no written agreement, especially in a context in which Dubai law at least arguably required it.    (c) Although there is evidence that sales of units at Armada Tower amounted to AED 310 mil-lion by March 2005, it is most unlikely that Rahif would have agreed to a 3% commission (in addition to that payable to the salesmen), payable as soon as possible, especially as the pur-chasers would pay in stages, and construction was years from completion.    (d) It is even less likely that Rahif would have agreed to pay 7.5 million on account of the al-leged profit share within a few months, when any anticipated profit was far from being realised and again payments would be received from purchasers over several years.    (e) There is no reference in any document to an agreement to pay either commission or profit share until after Rabe’s dismissal, which gave rise to an obvious difficulty in the way of Rabe’s claim for the administration and consultancy fees that had been agreed, namely that he could no longer provide his services. 107. For obvious reasons, little reliance can be placed on Raghid’s evidence; what he said depended on which brother he was supporting at the time. It is striking that, even when he sought to correct his statement in September 2007, he did not suggest that he had been wrong to deny either the agreement for a profit share or the agreement to secure any claim with a mortgage over Park Hospital, on both of which he now fully supports Rabe’s case with a detailed account of what was allegedly agreed in March 2005. The only evidence of Raghid’s in relation to this part of the case in which I feel any confidence is this written document (paras. 99-100 above). 108. In the absence of any reliable witness, it is impossible to be certain, but in my view the course of events was probably as follows:-    (a) When Rabe arrived in Dubai in early August 2004, the project had not yet got very far, the finance was uncertain and there was no agreement as to what Rabe would ultimately be paid.    (b) Rahif was not prepared to pay more than AED 30,000 per month for the time being; Rabe was unhappy with this but agreed for the time being to accept Rahif’s promise to let him keep the villa and the car for free, paying back Rabe’s AED 375,800 when he was able to.    (c) It follows that the payments by Rabe of $190,000 or $215,000 (para. 60 above) were pay-ments towards the costs of the project; these relatively small amounts illustrate the tightness of the finance available to Rahif in the early stages.    (d) By March 2005, the project was on a firmer footing and Rabe pressed for more money; Rahif repaid Rabe’s contribution to the purchase price of the villa and, later, his contribution to working capital (paras. 62, 66(a)), and agreed to what is reflected in the internal document, in the documents produced by Ms. Ancheta and in Raghid’s corrections to his witness statement (paras. 66-71, 99-100 above), namely that Rabe would be paid AED 200,000 per month as consultancy fees for 3 years, on top of the existing AED 30,000 per month; he could also keep the villa and the car free of charge.    (e) I accept that this agreement was reached following detailed discussions over more than one meeting about the finances of the project, as Raghid relates. I do not believe that there was any agreement to pay commission; it may be that Rabe asked for this, but, if so, Rahif was not prepared to agree to it, but only to consultancy fees for ongoing work. I do not believe that there was any discussion with Rahif about a charge, or that the powers of attorney were given for the purpose of enabling Rabe to execute a charge. I do not believe that a profit share was ever discussed, let alone agreed. I consider that Rabe and Raghid were both lying about these matters.    (f) It is not easy to account precisely for the payment of AED 895,000 in July 2005 (para. 66(b) above); as explained above, the amount does not fit a resale of the villa, and it is likely that it represents some unpaid administration and consultancy fees falling due between March 2005 and the commencement of the regular payments of AED 230,000.    (g) Neither Rabe’s nor Rahif’s evidence about the termination of the employment was very con-vincing, but it is unnecessary for me to make any finding about this, as the Dubai courts’ deci-sion that Rabe was justifiably dismissed is clearly res judicata.    (h) Once Rabe had been dismissed, he must have realised that he would be unable to justify claims for ongoing administration and consultancy services and in my view that is what led him to invent false claims, eventually backed up by Raghid, for accrued debts for commission on sales and an agreed profit share which were already due and payable, and would therefore be unaffected by his departure from Armada. 109. On the basis of the Dubai courts’ decision that Rabe’s claim against Armada was limited to AED 22,000 per month, the contractual basis for any additional claim by Rabe would have to be an agreement by Rahif personally to augment his wages. This is indeed what Armada’s financial manager said was in existence (para. 66(e) above). As I have found, there was such an agreement, but it clearly could not apply once Rabe had been justifiably dismissed by Armada and could not provide administration and consultancy services. Whether it would have applied if Rabe had been wrongfully dismissed by Armada is an interesting question, but not one that I have to determine.                Conclusion on Rabe’s and Rahif’s Dubai claims             110. Rabe’s claims are dismissed. Rahif is entitled to an order having the effect of removing the 2nd charge on Park Hospital. Rahif’s other claims, for the alleged outstanding balance on the loan for the purchase of the villa, for payment of the proceeds of Rabe’s sale of the villa in 2006 and for the value of the Porsche car, are all dismissed.