Yedina v Yedin & Anor [2017] EWHC 3319 (Ch)

Case No HC-2016-000428[2017] EWHC 3319 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Rolls Building, 7 Rolls Buildings, Fetter Lane, London, EC4A 1NLDate 15/12/2017
Before
MR JUSTICE MANN
Between
Iryna YedinaClaimant(1) Oleksander YedinDefendants(2) Skelling LtdDefendant
Mr James Sheehan (instructed by Westbrook Law Ltd) for ClaimantMr Anthony Verduyn (instructed by Fletcher Day Solicitors) for DefendantsHearing Hearing dates: 30 th& 31 st October, 1 st-3 rd November, 6 th-10 th November, 10 th, 13 th& 15 th November 2017
JudgmentMr Justice Mann :Introduction
[1]This is a dispute which centres around a husband and wife Mr Yedin and Mrs Yedina, or perhaps former husband and wife - whether there was a divorce is in dispute. In February 2009 Mr Yedin signed a deed in which he made and promised to make certain financial provision for Mrs Yedina. She seeks to enforce it in this action (via a repudiation and damages claim) and Mr Yedin claims that he is not bound by it by virtue of a range of defences starting with non est factum. Mrs Yedina also claims to be able to enforce her judgment over the proceeds of sale of a flat sold by the second defendant (“Skelling”), a BVI company, by virtue of a claim that the flat was held as nominee for Mr Yedin, or alternatively that Mr Yedin was the beneficial owner of the shares in Skelling, an allegation which Mr Yedin and Skelling deny.[2]For his part Mr Yedin counterclaims for a declaration that various properties held here, in Cyprus and in Moscow, and now vested in Mrs Yedina (or in companies whose shares are owned by Mrs Yedina) are held on what he calls a Family Trust, for the benefit of himself, Mrs Yedina and their two children Denis and Darina.[3]There is one procedural complication which arises in relation to Mrs Yedina’s claim to enforce over the proceeds of sale. As appears, one of her routes to that claim is to say that Mr Yedin is the absolute beneficial owner of the shares in that company. The shares are actually held by his business partner, Mr Goncharov. He has not been joined to these proceedings, though he did give evidence. He denies that he holds for Mr Yedin. Without more, therefore, it would not be possible for Mrs Yedina to make a fully effective claim based on the ownership of the shares because she has not joined the alternative beneficial owner. Mr Goncharov has signified his willingness to be bound by the decision in this action, both in writing and orally. The effect of this is something to which I return at the end of this judgment.

An expanded outline of the case

[4]Mr and Mrs Yedina come from the Ukraine and were married there. They lived there together for a time until 1996 when Mrs Yedina (her name has the extra character) started to spend more time here because their children were sent for education here. She became resident here in 1998. There is a dispute over when (and possibly whether) their marriage ended but in the course of their relationship they and their family lived (inter alia) in a flat in Tunbridge Wells (5 Calverley House, Post Office Square - “the Tunbridge Wells flat”) and then in a flat in Knightsbridge (Flat 3B, Collier House, 163-169 Brompton Rd, London SW3 - “Flat 3B”). The flats were owned by offshore companies - Ross Investments NV (”Ross” - a Curacao company) and Asha Capital Corp (“Asha” - a BVI company) respectively. By 2008 (if not before - that is in dispute) their marriage was in trouble and Mrs Yedina sought to secure her position in relation to property ownership and maintenance. She agreed with her husband the transfer of properties in the Ukraine and elsewhere, and agreed that she would acquire ownership of Flat 3B. Then on 10th February 2009 she and Mr Yedin entered into the Deed which is the centrepiece of this litigation, which dealt with her maintenance. Under it Mr Yedin apparently agreed to pay the outgoings on Flat 3B (including mortgage repayments and the repayment of the mortgage principal) and on the Tunbridge Wells flat, and to discharge the mortgage on Flat 3B. He also agreed to pay a sum for maintenance.[5]Mr Yedin indicated that he was not going to honour the provisions of the Deed and Mrs Yedina claims he has repudiated it and that she is entitled to damages as a result. Mr Yedin defends by relying on a large number of the textbook defences to an action on a contract, including non est factum, undue influence and unconscionable bargain. That constitutes one half of the claim. Mrs Yedina also makes a claim, as against the both defendants, that the proceeds of sale of another flat in the same building as Flat 3B (namely flat 2B) are owned beneficially by Mr Yedin, or alternatively that Skelling is his company, so that she can enforce her damages claim against those moneys (she currently has the benefit of a freezing order over them and they are held in a solicitor’s account). For his part Mr Yedin counterclaims (as mentioned above) for a declaration that Mrs Yedina holds a number of foreign properties on trust for himself and their two children (and Mrs Yedina).[6]There are so many properties and offshore companies involved in the history of this matter that it is, unfortunately, necessary to consider a lot of detail before one gets to the real issues in this case. But it will be useful to set out the terms of the Deed at this stage of this judgment because the narrative will be a little easier to follow with the documentary end point in mind.[7]The document is headed “Deed re English Property”. After setting out the parties as Mr and Mrs Yedina (given the names “Alexander” and “Irina” respectively) the Deed goes on:
“Recitals 1. IRINA is the beneficial owner of the entire issued share capital of Ross Investments N.V. (“Ross”), a Curacao company which is the registered proprietor of 5 Calverley House, Post Office Square Tunbridge Wells, Kent England (“the Kent Property”). 2. Asha Capital Corp., (“Asha”) is the registered proprietor of Flat 3B, Collier House, 163-169 Brompton Road, Knightsbridge, London SW3 1PY (“the Knightsbridge Property”). 3. Ross is the registered proprietor of the total issued share capital of Asha. 4. Accordingly ALEXANDER and IRINA have agreed to deal with the Knightsbridge Property on the terms of this Agreement. Now This Deed Witnesseth as follows: 1. Principal Residence 1.1 ALEXANDER hereby acknowledges that the Knightsbridge Property has a mortgage from the Bank of Scotland International of £1,078,175 (“the BOS Mortgage”) and that he has procured that the BOS Mortgage has hitherto being fully paid on a monthly basis, together with other outgoings including the service charge. Accordingly ALEXANDER hereby agrees to pay for the term of the BOS mortgage all interest, payments and other outgoings in respect of the BOS Mortgage and to pay as they fall due the service charge and other outgoings in respect of the Knightsbridge Property including all utility bills and parking charges in respect of the garaging of IRINA’s car in the building of which the Knightsbridge Property forms part or any parking permit fees. ALEXANDER will on the expiration of the term of the BOS Mortgage or any extension thereof, repay all principal, charges and outstanding interest to Bank of Scotland International arising from the BOS Mortgage. 1.2 It is hereby further agreed that it is the intention of IRINA to utilise the Knightsbridge Property as her principal residence. 2. Maintenance 2.1 ALEXANDER hereby agrees that he will provide all reasonable maintenance for IRINA to enable her to enjoy an appropriate lifestyle in London and with regular visits to Cyprus and the Ukraine. At the date hereof such maintenance is agreed to be approximately £220,000 per annum, but such sum shall be adjusted for inflation on a yearly basis geared to the Retail Price Index in the United Kingdom on the first day of January in each year. 2.2 ALEXANDER further agrees that he or that he will pay all normal outgoings including utility bills relating to the Kent Property and the Knightsbridge Property so long as such properties shall be owned by Ross and Asha respectively or shall be otherwise in the beneficial ownership of IRINA. 3. General 3.1 The proper law of this Agreement shall be the law of England but it shall be intended to be fully effective in Ukraine. 3.2 Each party shall do such acts and deeds and execute all such documents as shall be required to carry the terms of this Deed into effect.”
Now This Deed Witnesseth as follows:

Mrs Irina Yedina

[8]Mrs Yedina was cross-examined for over a day and a half, a large part of which was more as to credibility than as to the issues in the action. She gave her evidence in English, though she had the assistance of an interpreter to translate the questions for her when they were complex. She had a reasonable command of English but sometimes her English was a little hard to follow as a matter of language. That, rather than a lack of credibility, explained a number of instances where she might otherwise have been accused of not answering the question.[9]On many issues she presented as a reasonably credible witness. One big issue in the case where she did not was the question of her marital status and divorce. I deal with this under a separate heading below because a lot of effort in the case was directed towards it and it was treated as an important issue, though ultimately it was background (though important background) for the real issues in the case. On this issue I have found that I do not accept her evidence. This is very important in relation to her credibility. Her evidence came over as unreliable in relation to some of the property-related activities as well, even allowing for difficulties in her seeking to use English as the language of her oral evidence, and she was apparently defensive in some of the cross-examination about her other means. Accordingly, overall she was not a completely credible witness, and her evidence must be considered carefully, particularly in the absence of corroboration.

Darina Yedina

[10]Darina is the daughter of Mr and Mrs Yedina and is now 28. She gave evidence of family life, the acquisition and disposal of the two Knightsbridge flats, her father’s health and language abilities and events in 2008 and 2009. She was at the meeting when the Deed was signed. She was a careful witness and in my view her evidence was helpful and credible. She did not display any evidential bias in favour of either parent. Where her evidence covers the same events as those dealt with by others, I consider that I can use it is a touchstone of the accuracy of the evidence of others.

Mr Paul Simms

[11]Mr Simms is a former solicitor, having been struck off at some stage in the past in circumstances which involved findings of fraud against him. However, at some point since then he started a consultancy company, Citilegal International Ltd (“Citilegal”) which, at least in this case, involved him providing some quasi-legal, or even legal, services. He drafted the Deed, and acted in relation to the acquisition of the two Knightsbridge flats, stopping short of doing the actual conveyancing. He advised on using offshore corporations as a way of holding properties and avoiding tax. Somewhat remarkably, no attendance notes of his meetings relevant to this case have survived, and his evidence about the generation and preservation of contemporaneous documents demonstrated (if true) an undesirable practice, especially for someone with a solicitor’s background. Bearing in mind the absence of attendance notes (though letters survive), and the passage of time, the detail of some of his purported recollection has to be approached with great caution. He was a very defensive witness who did not always address the point. I approach the credibility of his evidence generally with caution.

Mr Yedin

[12]Mr Yedin was cross-examined over more than three days. That became necessary because he gave his evidence through an interpreter, which added significant time, and because he was given to providing long discursive answers which very often did not answer the question. In part this was because of the language barrier and a failure to understand the nature of the process. However, in part I consider it was because on many points of the evidence he had his points that he wanted to get over and preferred to make those points rather than answer the question. This amounts to a form of evasion.[13]His witness statement was comparatively short, particularly bearing in mind the factual issues that arose in this case. There were a number of important parts of his oral evidence which one would have expected to appear in his witness statement if they were true, but which did not.[14]These matters, and the content of some of his evidence, has led me to the view that Mr Yedin is a very unreliable witness of fact. I consider that he has arranged his financial affairs in such a way as to enable him to present those affairs in different ways depending on how it suited him to do so, irrespective of the truth. He essentially admitted that on his own evidence as to the purchase and charging of the Knightsbridge flat, he suppressed what he said was the involvement of Mr Goncharov and presented himself as the beneficial owner of at least one corporate entity when, on his case, he was not. He seemed to think it acceptable to present himself as the “front man” for this transaction while concealing the interests behind it. In the circumstances this amounted to an act of dishonesty, but he did not seem to view it as such. These are not the acts of a man whose evidence can be relied on.[15]I can usefully deal here with Mr Yedin’s command of English. This is relevant to his claims about what he did and did not understand about the Deed when he executed it. His case was that he spoke conversational English sufficient to get by on a day to day basis in shops and the like, but did not speak English better than that. In particular he claimed it was not good enough to understand legal technicalities. His witness statement described him as being at a “beginner’s level”.[16]The claimant’s case was that his English was better than that. He studied it at University and taught it. Mrs Yedina said he was “fluent” in it, and could read and write it well. His daughter Darina insisted that he spoke good English - he spoke it as well as her mother. She assessed he would be capable of understanding basic documents but not elaborate ones. Mr Simms’ evidence was to the effect that Mr Yedin was capable of conducting business meetings without needing an interpreter. On his own evidence he taught English, filling in for teachers who were absent in a college at which he taught.[17]I prefer the thrust of evidence of Mrs Yedina, Darina and Mr Simms on this point. I consider it likely that Mr Yedin spoke reasonable English, and probably found it easier to understand than to speak. When he conversed with another of his witnesses, Mr Orsini, they spoke in English (as their only common language). When he took notes of a meeting with Mr Simms when the purchase of the Tunbridge Wells flat was in contemplation he wrote some English words and concepts (”trustees”) in English, and not in Ukranian or Russian version. He has a Wikipedia entry which describes himself as being “fluent” in English, and while that is likely to be an overstatement, and bearing in mind the uncertainty of the authorship of these articles, in my view that part is likely to have been entered by someone with Mr Yedin’s interests at heart and is closer to the truth than Mr Yedin’s evidence of his own abilities. In cross-examination he confirmed that his witness statement was prepared in Russian and then translated for him into English, but he felt able generally to confirm the English version. While he gave his evidence in Russian with the aid of an interpreter (which was no doubt wise in all the circumstances) he told me that he was able to understand about 70% of what Mr Sheehan was saying when he posed questions. It was obvious that he understood some of the questions because on occasions (not many) he was able to answer without waiting for the translation. He admitted he was capable of generally understanding his own witness statement in English. While he was certainly not fluent, I find that he had a reasonable understanding of it. I find he was capable of understanding the important basics of documents which do not include too many technicalities. Furthermore, and critically when it comes to considering a crucial meeting in February 2009, I consider that his forcefulness of character would be such that he would make it quite clear when he did not understand something which he needed to understand, and would make sure that he had an accurate picture of it.

Mr Alexey Goncharov

[18]Mr Goncharov does not speak much English and gave his evidence in Russian. Like Mr Yedin he was apparently willing to allow ownership of companies to be disclosed or hidden according to the requirement of the circumstances. He was aware that Mr Yedin would be presented to potential lenders as the owner of both Knightsbridge flats, contrary to his case as to ownership, and did not seem to think there was anything wrong in that. He gave equivocal evidence about applying for a visa to visit the UK at the time of the proposed purchase, and I consider that his equivocation arose from the quality of his evidence rather than from difficulties in translation of his evidence. It was not possible to rely on him as a reliable witness, particularly when it came to the matter of the true owner of assets.

Mr Serge Zevlever

[19]Mr Zevlever came over to England at the request of either Mr Yedin or Mr Goncharov (I will have to determine which it was) to consider various aspects of the transaction for his sender. He was able to give his evidence in English, though his English was not perfect. He did not come over as someone who was particularly careful in his evidence. That also appeared from the substance of his evidence, as set out below. I did not consider his evidence to be a carefully considered neutral version of the facts.

Mr Ciro Orsini

[20]Mr Orsini is a restaurateur and a long term friend of Mr Yedin. He has also known Mr Goncharov for a long time, though he did not describe him as a friend. He gave short evidence about an alleged initial discussion about Mr Goncharov acquiring a London flat. His evidence was not substantial, and was probably (and inevitably) affected by the passage of time. I did not consider I could necessarily give a lot of weight to his evidence, but I do not accuse him of mendacity.

Mr Nicolai Tsyb

[21]Mr Tsyb is a long-standing business associate of both Mr Yedin and Mr Goncharov, having been (and still being, as I understand it) employed by various of their companies. For present purposes his significance is that he had significant contacts with England over the purchase of the flat and he was involved as director and/or administrator in various companies. He gave evidence of those functions and of his understanding as to who was buying Flat 2B. He spoke and wrote fairly good English, and was particularly called on when translation, or communicating in English, was required.[22]He was a more careful witness than others, and gave his evidence in English with the occasional assistance of an interpreter for the odd word or odd slightly difficult (in terms of language) question. However, I still considered that his evidence had to be considered with care. I do not consider that he was always fully candid, particularly in relation to his employment history and one or two documents which it is apparent he must have sent or received but which he denied having sent or seen. On his own evidence, which supported the Yedin/Goncharov case that Mr Goncharov was at all material times to be, and was, the purchaser of Flat 2B, he participated in events involving a concealment from the bank which he must have known to be dishonest, but like his principals gave no sign of finding such behaviour to be wrong. He professed to an ignorance of some matters relating to dealings relating to a company called Nichols Ltd that was implausible in the light of his involvement in the affairs of Mr Goncharov and Mr Yedin. I cannot treat him as a reliable witness of fact.

Missing witnesses

[23]There is at least one witness whom one might have expected to attend to give evidence but who was not called. She is Victoria Novikova. At the time of the deed she was employed by Citilegal and participated in at least the early part of the meeting at which the Deed was signed, and in some of the preparatory matters. She could have given some useful evidence as to the circumstances of the meeting, and in particular what translating of the deed she did there and whether Mr Yedin would have been able to benefit from that translation. She was not called by Mrs Yedina (unlike Mr Simms), and no explanation was given as to why that was. There was no suggestion that she was unavailable to the claimant, who might have been expected to call her. She has since become a solicitor and practices in London. She has also since the events of this action married Mr Simms, so there is no question of her whereabouts being unknown or (if relevant) of her being ignorant of this action - it is inconceivable that it has not been mentioned between them.[24]Mr Verduyn referred to this absence and the fact that adverse inferences could be drawn from it, though he did not make great play of it. Mr Sheehan submitted that her evidence was not necessary and would not be useful because, in relation to the critical meeting in February 2009, she left part of the way through with Mrs Yedina. I disagree. On any footing she would be a relevant witness who, if she had any recollection, would be likely to have relevant evidence to give. In my findings hereafter I have borne in mind this unexplained absence in my findings of fact about circumstances of the signing of the Deed, and whether I should draw adverse inferences from it, whether or not I mention it at key stages.

Early history and the childrens’ education

[25]In what follows in this section I put on one side an odd dispute as to when and whether the marriage of the Yedins came to an end. So far as relevant, that requires a separate section of this judgment. In what follows in this section any narrative of fact should be taken as a finding of fact unless the contrary appears.[26]The Yedins were both born in Ukraine, Mrs Yedina in 1966 and Mr Yedin in 1960. Mr Yedin studied Roman and German literature at university and graduated as a translator of Spanish and English and as a teacher of Spanish. He also speaks Portuguese more or less fluently. After graduating he served for 3 years in the Russian army. After the army he spent some years as secretary of a youth organisation in Kiev in the course of which he stood in for absent English-teaching colleagues on occasion. He married Mrs Yedina in May 1986. Their son Denis was born in 1987 and Darina was born in 1989.[27]After the fall of communism Mr Yedin entered commerce and formed a company called Interkontact with Mr Goncharov, with whom he has maintained a close business and personal connection. Interkontact became involved in equipment manufacture and freight forwarding and became a substantial business. It had a significant number of subsidiary or associated companies. Mr Yedin was cagey about the relative interests of himself and Mr Goncharov in Interkontact, but eventually admitted that it was 55:45 in his favour (at least during most of the time relevant to this action) while he claimed to view himself and Mr Goncharov as 50/50 partners. So far as relevant, I find that he was the controlling shareholder.[28]As business grew Mr Yedin set up various offshore companies in Cyprus and elsewhere. There were also banking arrangements in Cyprus, where law-related activities were handled by a Mr Eliades. When in Cyprus Mr Yedin had to, and did, conduct his business in English. Over time Mr Yedin’s business prospered and he owned or had interests in, directly or indirectly, about 20 different businesses by 2000, according to the unchallenged evidence of Mrs Yedina. In about 1995 Mr Tsyb joined him and acted as a form of financial adviser and accountant, though he had no formal accountancy qualification. It is plain from the facts of this case in relation to property matters that he liaised for Mr Yedin in relation to property and financial matters.[29]In 1996 Mr Yedin decided to stand as a member of parliament (deputy) in Ukraine. He was elected a deputy in 1997 and remained in parliament until 2014. Whilst a member of parliament his summer holidays, or a large part of them, were spent in the Crimea with his family where facilities were provided for deputies generally. He claims to have withdrawn from participating in business during this period, leaving the running of the businesses to Mr Goncharov; I doubt if he withdrew as much as he said he did. He has obviously acquired considerable wealth over the years. A Ukrainian magazine put his wealth at $73m. That is an unverifiable number, and was denied by Mr Yedin and Mr Goncharov, but I nonetheless consider it likely that he acquired wealth in the tens of millions of dollars.[30]In about 1995 the Yedins decided that their children should be educated in England, and schools in or near Tunbridge Wells were chosen. In order to enable Mrs Yedina be near her children a succession of properties in the area were acquired. The first was one known as Bushy Gill, about which little evidence was given. Then in 1996 a property known as Hither Chantlers was purchased for £215,000 with the purchase price being provided by a BVI company called Nichols Ltd (”Nichols”). There is a material dispute as to the ownership and control of this company which is dealt with below. That property was held until 2002, when it was sold and the Tunbridge Wells flat was bought for £1.2. The funds for its purchase again came from Nichols. Title was held by a Curacao company called Ross Investments NV, whose issued shares were held by a local trust company. Mr Simms at Citilegal advised as to the setting up of this structure; this was the first occasion on which he had had instructions from the Yedins (or Mr Yedin). Again, there is a dispute as to the beneficial ownership which has to be dealt with separately. For the moment it is sufficient to observe that Mr Yedin was the only person capable of giving instructions in relation to its affairs until 2009, when control was (apparently) given to Mrs Yedina.[31]Once Mrs Yedina and the children had started living in England they spent a considerable time apart from Mr Yedin. He spent most of his time in Ukraine, and Mrs Yedina spent most of her time (at least in term time) with her children in England in the various English properties while the children were at school here. Mr Yedin would make occasional visits to this country, but his greater contact with his children was in the holidays in Ukraine, and in holiday destinations such as Dubai (a favoured destination for Christmas and the New Year) and Paris where he would join the other three members of the family and where Mr and Mrs Yedin acted as if husband and wife (at least as far as the children and the outside world were concerned).[32]During this entire period Mr Yedin supported Mrs Yedina and his family. The full level of support in financial terms did not appear, and it was not necessary to establish it. However, one method of support was to procure the payment of a salary, or purported salary, to Mrs Yedina through an English company named Logistrans (UK) Ltd, which was owned and run by a friend and associate of Mr Yedin. From 2002 until 2015 Mrs Yedina had a contract of employment with that company via which she was paid a salary. It is not clear how much she received over the entire period, but at the end she was receiving over £46,000 pa. She claimed to be providing valuable services to the company, and while she may have provided some, I do not consider that she was in reality an employee to the extent that her salary might have suggested. She accepted that Mr Yedin essentially funded this salary and that Logistrans was a channel through which he could provide funds to her.[33]In 2006 the childrens’ school education was coming to an end. It was anticipated that they would go to university and it was agreed between the Yedins that it would be sensible to buy a London base. In that context the Knightsbridge flats were identified and purchased. Flat 3B became the family home, but the Tunbridge Wells flat was retained as well.[34]This state of affairs persisted until the end of 2008 when there was a marital crisis. Mrs Yedina claims to have discovered that Mr Yedin had had a child by another woman in the Ukraine and confronted him. The result was a transfer of various properties into her name, and the Deed.

The marital status and divorce point

[35]I deal with this as a separate point because of the detail involved. It was Mrs Yedina’s case that until 2008 she believed that, and everyone acted as if, she and Mr Yedin were married. She says that in 2008 her husband informed her of a dissolution that had taken place in 2006, and that was the first she had heard of it. She believed the documents, or some of them, produced by Mr Yedin to support what he said, to be fake. The factual matters were as follows.[36]Mr Yedin’s case, as put to Mrs Yedina, was that by 1997 their marriage was in trouble. Both had had affairs, and Mrs Yedina applied for a divorce. That, on Mr Yedin’s case, generated two documents. The first is a manuscript document on a court headed form. A translation was in the bundle but, with the assistance of the interpreter in court, it became apparent that the translation was not complete. The text is in Russian, not Ukrainian. At the very top is a stamp indicating that it is a copy. Below that it is headed “Ministry of Justice of Ukraine” below which is the word “Decision”. Below that are words which can be translated as “Ukrainian Russian Socialist Republic”, which have been crossed out in manuscript. That would be a heading which would have been inappropriate for the preceding 6 years, because Ukraine had become a separate state at least 6 years previously. No proper explanation was proffered for that oddity, and it was not represented in the original translation. Below that is a date indicating that the decision was issued on 14th February 1997. In the top right hand corner is the rubric “Case No” with the digits “19 - “ pre-provided below. It is obvious that a case number and year are to be filled in, but they have not been.[37]Below the heading is a line on which the court is identified (in manuscript), followed by lines with rubrics intended to identify the representatives appearing and others attending. None are filled in. The court is identified in words which are translated as: “In an open court session held in Kyiv heard in the case of Iryna Anatoliivna Yedina who filed a motion for divorce from Oleksandr Yospovych Yedin and ..." The document continues: "FOUND The Parties have been officially married since 1986. They have two children in that marriage, born in 1987 and 1989, residing with their mother. The Plaintiff filed a motion for divorce on account of the unfaithful conduct of the Defendant who was in civil marriage with another woman. The Defendant does not oppose the Plaintiff's motion and considers that it is not possible to keep the marriage. The motion shall be granted. The court found that the defendant's unfaithful conduct caused family disruption and loss of love and respect between the spouses. The Parties have not had any marriage relationship since May 1995. Under the given circumstances it is not possible for the spouses to continue living together and keep the family." The document goes on to cite various legislative provisions and a decision to dissolve the marriage. Mr Yedin was ordered to pay UAH 8.50 for the issue of a certificate of divorce and the last piece of manuscript is the word “Judge” followed by what looks like a signature.[38]Both Mr and Mrs Yedin acquired a copy of this document from the court. At this point their copies have different stamps. At the bottom right of the third page of Mr Yedin’s copy is some sort of court stamp superimposed on a stamp enabling the date and names of officials to be filled in. The underlying stamp reads:
"True copy The Court Decision came into force on 24 February 1997. The original of the decision shall stay with court records."
And there are then inserted in manuscript the names and probably the signatures of a "Head of Court" and Registrar. Neither signature appears to be the same as the signature of the Judge.[39]Mrs Yedin’s copy has a different stamp, signed by different officials and which does not contain the reference to the Court Decision or the original. The court stamp is in a different position to Mrs Yedina’s copy, indicating that there is no original document bearing a court stamp from which both copies were taken.[40]There are a number of oddities about this document. The first is that it is based on an inappropriate form. The second is the absence of a claim number. The third is that it cites that the Defendant (Mr Yedin) was in a civil marriage with another woman - there was no evidence of that in the present proceedings and no-one suggested that it was true. The fourth is that it is a little odd that it is in manuscript at all, but that may be explicable by local practices.[41]The fifth relates to the stamp at the bottom of it. As already stated, the copy in the trial bundle contains the stamp to which I have referred. It was obtained and provided by or through Mr Yedin. However, Mrs Yedina went to the court and got her own copy. She was given it out of the court archives. The stamp at the bottom of hers is different. It contains a court seal superimposed on, or overstamped with, a different stamp which bears the signature of two court officials but without the statement about the decision coming into force. On the back of the last page is a similar stamp and similar court seal. It is to be inferred from this feature that the document retained in the court archive has neither form of stamp on it. Mr Yedin’s stamp must have been applied whenever it was that he got the provided copy, which he says was after Mrs Yedina initiated these proceedings. Furthermore, as I have already observed, it would appear that the court seal is not on the original from which Mr Yedin and Mrs Yedina obtained their copies because it is in a different position on each copy.[42]In addition to the manuscript document Mrs Yedina was also given a single page sheet which reflects the fact that she had had a meeting at which she had the opportunity to reconsider the divorce but had decided to go ahead with it. It would seem that it reflects some sort of compulsory cooling off period.[43]The second document provided by Mr Yedin is a printed completed form which claims to be an “Extract” from something (unspecified). It has printed rubrics and spaces which are filled in with further text. This has a completed claim number in the top left hand corner (Case No. 2-836/3 of 1997) and is headed as a “Decision - in the name of Ukraine”. It goes on:
“On 14th February 1997 in open court session Pecherskyi District Court in the city of Kiev heard the case of Iryna Anatoliivna Yedina against Oleksandr Yosypovych Yedin on the divorce. Pursuant to [various statutory provisions] the Court Decided To dissolve the marriage between Iryna Anatoliivna Yedina and Oleksandr Yosypovych Yedin registered by Palace of marriages and births registration under No 1973 as of 10 May 1986 O Y Yedin shall pay UAH 8,40 for issuance of the Certificate of Divorce”
There is then a signature and seal followed by a certification that the decision is final and enforceable. Pursuant to [various statutory provisions] the Court Decided O Y Yedin shall pay UAH 8,40 for issuance of the Certificate of Divorce”

Decided

[44]The status of that document (which was obtained by Mr Yedin) in Ukrainian procedural terms is not clear. Although it has some common elements with the first document, there are material differences in its content. It omits a lot of detail, contains one legislative provision not referred to in the earlier document and omits two Articles which are referred to in the earlier document. It cannot be regarded as an attempt to summarise the earlier document.[45]Mrs Yedina does not accept the validity of any of these documents in the sense that she does not accept that they recorded anything which actually happened. She says she did not apply for a divorce in 1997 and did not attend a pre-divorce meeting. She was not in Ukraine at the time and did not instruct any lawyers to act for her. She knew nothing about a divorce until March 2008 when her husband showed her the documents to which I am about to turn, and as far as she was concerned she and her husband were married, and acting in all respects as though they were married, until the end of 2008, when she found out about a child that her husband had had with another woman. During the course of these proceedings she herself attended the court and obtained a copy of the manuscript version (together with an additional page), and that was the first she knew of any alleged divorce in 1997.[46]The next divorce-related document is a “Marriage Dissolution Certificate”, the authenticity of which is not challenged by Mrs Yedina. It was obtained by Mr Yedin, and records that dissolution of the marriage which was recorded in the register of marriage dissolutions on 3rd October 2006, which was also the date of issue of the certificate, though it was not sealed until 24th March 2008. It seems to have been common ground that in Ukraine divorce is a two stage process. There is first an order in the nature of the disputed order in this case, but the marriage is not dissolved until one of the spouses applies for a dissolution, at which point a certificate is issued and the marriage is dissolved.[47]Those documents provide the framework for a strange dispute between the parties. Mrs Yedina’s case is that as far as she was concerned she Mr Yedin remained married, at least (possibly) until the dissolution certificate (whose status she professed to be uncertain about). She knew nothing of any divorce in 1997 and did not seek or get one herself, and the parties carried on their lives as if they were married. She came to England with the children for their education, while Mr Yedin remained in Ukraine, but he would come over in term time sometimes, and they spent holidays together in (variously) Cyprus, Paris, the Crimea and (at Christmas and New Year) Dubai, throughout the period until the end of 2008. During that period they shared the same bedroom and bed. There are photographs taken on holiday in various years which on their face show the two as a couple happy in holiday and restaurant locations, sometimes in poses of intimacy.[48]Then in March 2008 Mr Yedin showed her the dissolution certificate. This was the first she had heard of a divorce. She noted that it said there had been a divorce in 2006 (as she read it) and that Mr Yedin had apparently sat on it for over a year. She was confused about it but it is not clear that she did anything about it at that time. She says that Mr Yedin assured her that it would not make a difference to them, and it would seem that even on her own evidence she and Mr Yedin carried on as before. There is a photograph of her taken in this period (June 2008) which shows her wearing (and indeed probably showing off to the camera) a new ring which she described in evidence as a new wedding ring given to her on that occasion by Mr Yedin. On 9th September 2008 Mrs Yedina completed a UK naturalisation form in which she described herself as married by ticking the appropriate box and identifying Mr Yedin as her husband. Then in November 2008 a relative told her that he or she had been to a christening of a baby whose father seemed to be Mr Yedin, in Ukraine. As a result she found out that Mr Yedin had formed a new relationship with a lady in Ukraine and had had a child by her. That seems to have changed things for her and effectively brought the marriage to an end in terms of relationships. However, she professed an uncertainty as to her status, and in September 2009 she visited English solicitors apparently to discuss whether she could get a divorce here. She is not recorded as having told them that she had been, or might have been, divorced in the Ukraine.[49]Mr Yedin’s case was very different. It was his case that Mrs Yedina did divorce him in 1997 as a result of their respective infidelities and their marriage breakdown. He did not contest the divorce. That explains the two 1997 documents, which he says were genuine. However, he accepts that they still acted as if husband and wife. His evidence was that he did not present Mrs Yedina as his wife, but did not point out on any given occasion that she was not; then he accepted that he could have called her his wife but could not recall any occasion when he did. He and Mrs Yedina did not always share the same bed (suggesting that sometimes they did) but he categorically denied that there was a sexual relationship between them. The reason that he gave for this pretence was that it was for the benefit of the children. He wanted them to have “both parents” and he wanted the divorce hidden from them because he did not want them to know that their mother had had a relationship with another man. He accepted that he had lied to his children for years.[50]Mr Yedin did not proffer any explanation as to why he waited 9 years before finalising the divorce. His evidence as to why he decided to get the certificate in 2006 varied. In his witness statement he said he needed it as he was going to remarry. In fact he did not re-marry until 2009. In cross-examination he said it was symbolic for him to have the certificate. I regard the latter explanation as untrue - Mr Yedin was not the sort of man who would wish to have such a symbol. He claimed in evidence to have told Mrs Yedina that he had got the certificate in 2006 and that she would have had her own copy, and in any event she would have seen it because it was in the Kiev flat. I do not accept that evidence either. Then he said he provided her with a copy, at her request, in 2008 because she needed it for her naturalisation process. However, when she subsequently filled in her naturalisation form she described herself as married. I do not consider that he informed Mrs Yedina that he had got the certificate, or that she otherwise found out about it, until he gave her a copy in March 2008. I find that that was when she found he had the certificate.[51]Mr Sheehan urged on me that the 1997 documents were not genuine. They had been forged by or at the behest of Mr Yedin, and he had further procured that the manuscript version be inserted into the court files by suborning someone in the court service. He relied on various matters in support of that submission:(a) The oddity of the manuscript document being in Russian and being 6 years out of date in its heading.(b) The absence of a case number and the other other blank lines in the document.(c) The inaccurate statement about Mr Yedin’s civil marriage to another woman.(d) The absence of a record of an agreement (deposed to by Mr Yedin) that he would maintain the children. One would expect a record of such an important commitment, and for Mrs Yedina to have required it if she was to live apart in England with the children.(e) The current absence of a number of supporting documents which Mr Yedin said existed at the time.(f) A statement by Mr Yedin that he had initiated his own divorce proceedings at the time which were rejected for want of proper documentation.(g) An allegation by Mrs Yedina that when she visited the court in November 2016 she was not provided with the second of the two documents (the typed one).(h) On 29th September 2014 Mr Yedin signed a notarised authorisation for Mrs Yedina to sell a flat in the Crimea, in which he stated that he was married to her until 3rd October 2006 (not 1997).[52]I agree that Mr Sheehan has identified a number of odd aspects of the document. He could have added the discrepancies between the manuscript document and the “Extract” typed document. He would also be entitled to say that it might be thought to be very odd that, having divorced Mr Yedin, Mrs Yedina then carried on for years as though she was still married (which I find that she did), and basically hid the divorce that she had bothered to get. One would ask why she bothered to get it. However, that oddity is tempered by the fact that on her own evidence she carried on as a wife even after she had received the notice of dissolution in March 2008. On any footing both parties have behaved oddly. On Mr Yedin’s case the parties carried on as though nothing had happened for a decade. On Mrs Yedina’s own case they carried on as before between 2006 and 2008. If, as was suggested, this was so as not to upset the children, and to present them with apparently happily married parents, it is still odd. If, as is possible, it is so that he could present himself as a happily married family man to his electorate in the Ukraine, then it is dishonest.[53]It would have been of significant assistance to have had some expert evidence of Ukrainian law and procedures so as to be able to have some independent expert views as to the procedures in the Ukraine. However, no-one seems to have sought such evidence. I must do the best I can on the material before me.[54]At the end of the day this issue did not have the significance for the action which it might once have been thought to have had. It is certainly capable of going to credibility, and it was suggested that it might assist in deciding the trust issues because it would provide an opportunity to deploy the presumption of advancement. I can say at this stage of this judgment that the presumption of advancement is not going to be of any assistance in unravelling the property arrangements that existed as between Mrs Yedina and her husband. They are far too complex for that, and the factual context does not need untangling via that presumption. So it is a credibility point only. It is therefore something on which I do not have to pronounce formally, despite the time and effort expended on the issue at the trial. On that basis I express the tentative view that 1997 documents are not forgeries as alleged. Even allowing for the fact that not all forgers are competent forgers, and even allowing for the fact that one very often cannot take the acts and the evidence of Mr Yedin at face value, I consider that two principal features mean that Mrs Yedina has not proved her case on this point. The first is that for the forgery to have worked Mr Yedin would not only have had to have forged the manuscript document. He must also have had it placed with the court records where it could be found by someone looking for it. It would be necessary not merely in case Mrs Yedina looked, but so that there was a record on which the subsequent dissolution certificate could be based (unless a court official was suborned on that later occasion to produce an unjustified certificate, which was not suggested). The insertion into the court records may in theory be possible, but it is a serious step way beyond the forgery itself. The second is the quality of the forgery, with the “wrong” heading, absent text and odd manuscript air about it. If Mr Yedin really did want to produce a forgery one would have thought he would have produced a less amateurish job. The “extract” document is more convincing. That, too, on Mrs Yedina’s case is a forgery, but if a document of that quality can be forged then why is the manuscript document so amateurish? All in all, bearing in mind the enhanced standard of proof required for so extreme an allegation (In re H (Minors) [1996] AC 563), I tend to the view that it is not proved.[55]Had I reached a firmer conclusion it would have had obvious ramifications for Mrs Yedina’s credibility. She has denied doing a publicly recorded act which seems to be genuine. However, bearing in mind the uncertainty on the point it does not have quite the weight that it would otherwise have.

Mr Yedin’s business and property interests

[56]Mr Yedin has a pattern of seeking to conceal his interest in assets by putting them in the names of others. Separate sections of this judgment deal with or refer to various properties in relation to which that was done. He also did it in relation to his Ukraine business interests.[57]As described above, Mr Yedin had significant business interests in the Ukraine via a number of companies the most substantial of which was probably Interkontact. His partner (in the non-technical sense) in those businesses was Mr Goncharov. Before his entry into politics Mr Yedin was the President. After that event, in 1998, Mr Goncharov became President and Mr Yedin became Honorary President. I have already held that on the balance of his evidence I think it more likely that he had a controlling interest.[58]That shareholding was transferred out of the hands of Mr Yedin at about the same time. In his witness statement Mr Goncharov said that when Mr Yedin became an MP he transferred to him 100% of the ownership of all the Ukrainian companies and remained only the honorary president of Interkontact. The clear import of that is that it was an absolute transfer. Then in cross-examination his version of events changed. He said that while the interest of Mr Yedin was transferred, Mr Yedin remained the effective owner of it. The interest was 55% in 1998 but became 50% in 2002. No explanation of that change was given (or, to be fair, sought). Furthermore, the shares were not transferred to Mr Goncharov; they were transferred to Mr Yedin’s sister. The underlying reason for the transfer was to keep the retained interest confidential. He said there was a document which governed this transfer, and he had retained a copy, but it was not made available in this hearing. According to him the shares were transferred back to Mr Yedin in 2015. Mr Yedin has continued to draw on the business throughout though in the form of taking profits, not salary.[59]Mr Yedin did not deal with the transfer of his Ukrainian business interests in his witness statement, but he was cross-examined about it. He agreed that he transferred his interests, and confirmed the accuracy of what Mr Goncharov had said in his witness statement about it (ie a transfer to Mr Goncharov). However, he went on to paint a picture in which Mr Goncharov had “management” of his interests so that he could concentrate on politics. He said he did not take business decisions after that. He made no mention of his sister actually holding his shares. When he originally transferred his shareholding it was not forbidden for MPs to have business interests, but later it became forbidden. He did not divest himself of his interests. Towards the end of his evidence he accepted that he would have political problems if people found out that he still had business interests, and he was hiding his interests from politicians so they could not “black mark” him. He said nothing about a transfer to his sister and nothing about a transfer back to him.[60]Judging by his evidence, and the manner in which he gave it, I think that Mr Yedin was evasive in his dealing with this point. But the more significant impact from the point of view of this case is that it demonstrates a propensity in Mr Yedin (demonstrated elsewhere as well) to put and keep assets in the name of another so that his own interest can be hidden. That becomes important when considering the beneficial ownership of Skelling.

The foreign properties

[61]Various foreign properties have been brought into these proceedings via Mr Yedin’s counterclaim which seems declarations as to their ownership. They are as follows.[62]Flat 54, Solferino East, Limassol. This was purchased in 1996 in Mrs Yedina’s name. Mrs Yedina’s evidence suggested that this was to provide a Cyprus holiday home for the family. It was purchased with Mr Yedin’s money. Mrs Yedina’s evidence was that it was put into her mother’s name in about 2002, and then at some stage it was put back into her name in 2013 prior to its being sold. Mr Yedin’s evidence (eventually) was that he accepted the transfer into his mother-in-law’s name, though subsequently it was “possible” that he instructed his Cypriot lawyer (Mr Eliades) to put an entry on the register to the effect that no transfer was to take place unless it was to Mrs Yedina. It was sold for E650,000. I am satisfied that Mr Yedin procured all the transfers of property in this case, and that it was dealt with according to his direction apart from the final sale. He was unable to give a reason for the transfer into his mother-in-law’s name. I am satisfied that it was because it suited his needs for disguising his property holdings for the time being even though those needs cannot be identified.[63]Flat 51, Solferino East, Limassol. This was purchased for CY£200,000 in 2000. Mr Yedin supplied the finds. It was bought in Mrs Yedina’s sister’s name and Mrs Yedina said that it was purchased as a holiday flat for the wider family. That may or may not have been the motivation - I make no finding about it. Mrs Yedina’s evidence was that because it was not possible for a foreigner to own more than one property in Cyprus it was purchased in her sister’s name; it is implicit in that that otherwise it would have been put in her name. Mr Yedin did not seem to accept that. He did not explain why it was that it was put in the sister’s name in the first place. His evidence referred to her being married to a Cypriot and to his convincing her that when she divorced shortly thereafter it should be treated as a family property and be transferred to Mrs Yedina (which it was). He did refer to the dangers of being in Ukraine at the time. I conclude from this that it was entirely Mr Yedin’s choice, and for his purposes, that the property was put in the sister’s name and that the motivation for that was that he did not want to be seen to be owning it. It was again his choice, and at his direction, that it was subsequently transferred to Mrs Yedina in 2002. His choice of the sister as the original holder was probably to place a greater apparent distance between him and the ownership of the property.[64]The Moscow flat - Tverskaya-Yamsakaya, Moscow. This was funded by Mr Yedin. It was either purchased in the name of Mrs Yedina’s mother (Mrs Kimble) or purchased by one of Mr Yedin’s companies (ABC Contrading, an English entity) and shortly thereafter transferred to Mrs Kimble, in 2002. It is a luxury flat that was purchased as an investment. Mr Yedin said there were “a lot of reasons” why he did not purchase and hold it in his own name, but the one he gave was a desire not to be seen to be holding it because the Russian authorities could have made trouble for him - he was a person who could not enter Russia. This was not the only property he registered in Mrs Kimble’s name - he did the same with a piece of land in Crimea and some land in Kiev (details were not given). Those two pieces of land do not feature in the litigation, but it is relevant to note the use of other names to hold land.[65]Those identified properties are the three foreign properties which are the subject of the trust counterclaim. The counterclaim also extends to two English properties - the Tunbridge Wells flat, and flat 3B.[66]The rest of the Yedin family-related property holdings in Ukraine (or some of them - I am not satisfied that all of them were mentioned in the proceedings) have some relevance to the background to the main issues in the case. They were as follows (not necessarily in chronological order).[67]There was a family flat in Chekistov St. It was bought in the beginning of the 90s. Mr Yedin’s evidence was that it was held in the names of all 4 family members, which is a little surprising since the children were minors at the time. He said that when it was sold in 1996 the proceeds were divided between 3 of the four owners, with Mrs Yedina being given Mr Yedin’s share. This was not challenged, but it was not put to Mrs Yedina either (perhaps not altogether surprisingly).[68]Flat 24, Building 30B Lesi Ykrainki, Kiev was bought in 2003. It was conveyed into Darina’s sole name in 2008 in the circumstances identified below.[69]Flat 9 Gorodetskiy St, Kiev. There is a conflict of evidence as to whether this was bought in Denis’s name, or whether it started with each member of family owning a quarter. But it is common ground that Denis had acquired the whole interest by 2008, and possibly in 2006.[70]The family had the use of a dacha outside Kiev. It was bought with Mr Yedin’s funds and held in his name but on 25th December 2008 it was placed into the names of Mr and Mrs Yedin and the two children.[71]A flat at 7 Gorodetskiy St, Kiev, which was a family home, was purchased in the late 1990’s and apparently (somehow) owned by all four family members (at least according to Mrs Yedina) until 25th December 2008, at which point Mr Yedin procured its transfer to Mrs Yedin.

The purchase of the Knightsbridge flats

[72]There is no dispute about Flat 3B being a Yedin flat (to use a neutral expression for the moment). There is, however, a serious dispute as to whether Flat 2B was also a Yedin purchase, or whether it was a Goncharov purchase.[73]Mr Yedin’s case is that Flat 2B was bought by Mr Goncharov, with money provided by Mr Goncharov, and that that followed a pattern under which Mr Goncharov would sometimes buy flats in the same place as Mr Yedin had already purchased (or planned to purchase). Cyprus was given as an example.[74]Mrs Yedina’s case is that Flat 2B was bought in anticipation of its being used in due course by Darina and Denis, and that its purchase was funded by Mr Yedin (apart from moneys borrowed on mortgage). It was an additional family home. She says that with Denis about to end his schooling and expecting to go to university she agreed with Mr Yedin that it would be sensible to have a home in London for the three of them, with a view to letting and eventually selling Tunbridge Wells flat if it was not being used. Mr Yedin had already been approached by Mr Orsini to see if he was interested in purchasing in Knightsbridge and they met him at his Knightsbridge restaurant. Mr Orsini explained that he already owned two flats in Collier House and others were being refurbished. He took them to see the flats. She and Mr Yedin discussed purchasing two flats, one to live in (which became flat 3B) and one to rent out to cover the outgoings on the first. They also had it in mind to have the second flat (which became flat 2B) for the children in due course, but her witness statement says that it was decided soon after purchase that that would be too expensive. Her cross-examination put it slightly differently. She said that the children would be put in the second flat, but when they realised the expense involved in maintaining the second flat they decided to rent it while the children were at university.[75]Darina gave limited support to her mother’s version of events. She says she was told that her parents were proposing to buy two flats in Knightsbridge, one to be the future family home and the other to be possibly for Denis and her to live in when they graduated if the family could afford it, but in the meantime the second flat was to be rented out to provide funds to service the outgoings on the flat that they would occupy. In her cross-examination she expressed herself to be certain that the second flat was to be purchased for the family.[76]Mr Yedin’s evidence was different. He agreed that it was decided to buy a flat in London for when the children had finished their schooling. Mr Orsini told him, in 2006 and in London, that there were flats for sale in his block (Collier House) and that they would be a good investment, and Mr Yedin told Mr Goncharov about the opportunity to purchase when he returned to Kiev. When Mr Orsini was in Kiev later that year they had a further discussion, to which Mr Goncharov seems to have been a party, and as a result of that discussion Mr Goncharov agreed that he would purchase one flat and Mr Yedin would purchase another. His witness statement identified these as flats 2B and 3B respectively. His cross-examination sought to sustain this sort of sequence of events, and contained some evidence of his taking photographs of his proposed flat on his phone to show his friends in Parliament (implausibly) and to Mr Goncharov and others. However, (and in my view tellingly) he did say that he and Mrs Yedina had contemplated buying two flats, when certain correspondence was put to him. That does not find any reflection in his witness statement. He disclaimed mentioning Mr Goncharov to Mr Orsini in relation to his original viewings of the flats.[77]Mr Orsini gave evidence about a chance encounter with Mr Yedin and Mrs Yedina during a walk in Knightsbridge during which Mr Yedin expressed an interest in a London flat and Mr Orsini told him about flats coming on the market at Collier House. Soon after that Mr Yedin mentioned to him that he (Mr Yedin) would be buying one flat and he would buy one for his “business partner”. On a subsequent visit to Kiev he discovered the partner was Mr Goncharov and that the latter was looking to proceed with the purchase of flat 2B. However, in his cross-examination he said that the business partner was not mentioned until he visited Kiev.[78]Mr Goncharov’s evidence in his witness statement was that he was told about Collier house when Mr Yedin returned to Kiev. It did not suggest that there was any suggestion of his buying before that time. He discussed it with Mr Yedin and Mr Orsini and decided to buy for himself and his family, though he explained that in the end he never occupied it because his children refused to go and live there.[79]Insofar as these accounts differ in their sequencing of events, that is not surprising since if they relate to real events the events are very historic and the individuals would not have realised their significance at the time. They are now relevant to the question of the beneficial ownership of flat 2B, and of Skelling. I will defer making any findings about them until I have considered the rest of the evidence in the case.[80]Mr Tsyb gave evidence to the effect that in early 2006 he understood that Mr Yedin and Mr Goncharov were each going to purchase flats and that he was to provide assistance with the progression of the purchases. In due course he carried out some liaison with Citilegal in accordance with the instructions of Mr Yedin. He did not tell Citilegal that Mr Goncharov was to buy a flat. His cross-examination suggested that Mr Yedin must have told Citilegal that one of the flats was being purchased by a person other than Mr Yedin, but Mr Goncharov’s name was not given. He said in cross-examination (but not in his witness statement) that Citilegal actually advised that mortgage loans be sought in one name only (Mr Yedin’s). This was said by him to be advice given to Mr Yedin and not to him (Mr Tsyb). Mr Yedin did not give evidence to that effect, and I find that that advice was not given. Mr Tsyb said that it was not until 2007, when he sought to bring about the change in the legal ownership of Skelling from Mr Yedin to Mr Goncharov, that he took instructions from Mr Goncharov. Prior to then all his instructions were from Mr Yedin.[81]I can now turn to what the documents and other evidence show. It is apparent that by the beginning of February 2006 the decision to buy both flats had been taken. On 1st February 2006 Mr Tsyb emailed Mr Simms at Citilegal about a purchase: “Dear Mr Simms, Mr Alexander Yedin is going to buy a flat in London and needs your legal assistance in this matter. Mrs Iryna Yedina (his wife) will call you this afternoon concerning this matter."[82]He then gave various telephone numbers of Mrs Yedina and the agent. In his cross-examination Mr Tsyb said that Mr Yedin had actually told him to say that the purchase of the flats was for Mr Yedin.[83]The next day (2nd February) the agent emailed Mr Simms:
"As discussed during our telephone conversation this morning we have received an offer of £2,500,000... from Mr and Mrs Alexander Yedina for the leasehold interests in Apartments 3.1 and 3.2, Collier House, 163-169 Brompton Road, London SW3 1PY… Please find the attached asking price schedule and property details – please note that this is the draft brochure. I would like to prepare and send out the Memorandum of Proposed Sale – please could you email me your postal address details and fax number etc."
[84]It will be noted that those flat numbers do not apparently coincide with the flats as actually purchased, but nothing turns on that. The important point to note is that two flats are said to be the subject of the proposal to buy put forward by the Yedins.[85]It is obvious from that correspondence (and Mr Simms said as much) that Mrs Yedina had already been in contact with him about the purchase of two flats in the same block in Knightsbridge, and Mr Simms was told to liaise with Mr Tsyb. There was some discussion about the number of companies in whose name the apartment should be held when purchased and Mr Simms gave some advice about this in his letter of 2nd February 2006 to Mrs Yedina:
"I have made contact with the agents. I have also made contact with the solicitors to the Vendors. We will form the company and monitor the transaction and see if we can arrange some borrowings, but we do not handle conveyancing. We will therefore arrange it through our contacts, a Mr Harry Turnbull of Lorrells of Fleet Street… However, it would seem sensible to "go slow" at the outset until Alexander is quite certain that he has arranged the necessary funding.… It would be necessary at a later stage to decide whether to hold the properties in one company or to have a company for each property. It can be beneficial to have a company for each property if there is any likelihood of selling one property off without the other where the company may be offered for sale rather than the property which may have the effect of saving stamp duty…"
[86]According to the evidence of Mr Simms, which I accept, there had been a discussion in which Mrs Yedina confirmed that Mr Yedin wished to purchase the two apartments in the names of offshore companies and that the BVI was the favoured jurisdiction of incorporation. After the meeting Mr Simms received the go-ahead for the formation of two BVI companies. He arranged the formation of Asha and Skelling accordingly. Mrs Yedina had explained that Mr Yedin did not wish to be a director of either company and that Mr Tsyb would be the director. Mr Simms proposed (and it was agreed) that he would become a director of both companies initially but would resign once the flats were purchased. His directorship was to enable documents to be signed more easily during the purchase period.[87]Mr Simms then set about trying to raise some mortgage finance. It became apparent that there were two problems in achieving this. First, as a Ukrainian MP Mr Yedin was a “politically exposed person” (”PEP”) with the effect that lenders were wary of dealing with him. The second is that the balance of the equity was being provided by Nichols, which, as a BVI company, did not produce any annual accounts which could be studied by lenders.[88]Over the course of time various institutions were canvassed. Initially Coutts Bank was interested, as Mr Simms reported to Mr Tsyb in an email of 11th February. Coutts expressed an interest in meeting Mr Yedin and arrangements to that end were put in hand. On 14th February Coutts wrote to Mr Simms: “In order to open bank accounts [for the purchasing BVI company] we will, of course, need various documentation to be completed and we will also need to complete our due diligence for Mr Yedin and possibly his wife if she is to be a beneficial owner/officer of the company... As we would be lending to a Company we would most likely wish to seek a personal guarantee from Mr Yedin which we would wish to see supported by evidence of his overall wealth…"[89]On 15 February 2006 Mr Tsyb wrote to Mr Simms:
"Alexander agrees with the prospective offer of 55% finance from Coutts bank and decided to buy each property in a separate company so please form for us two companies."
[90]On 17 February 2006 the agent wrote to the conveyancing solicitor confirming that Mrs Yedina "and Mr Yedin" wanted to change their offer from flats3.1 and3.2 to the apartments now known as 3B and 2B.[91]On 18th February Mr Simms reported to Mr Tsyb:
"I have arranged a meeting at 2:30 p.m. next Friday, 24th February at Coutts. I need to know whether Mr and Mrs Yedin are to be the beneficial owners of the two BVI companies or whether Mr Yedin alone. If they are jointly beneficial owners or are both involved in the beneficial ownership of the property then the bank would like to see both of them."
[92]He repeated his request to know who the owner of the companies was to be in an email of 20th February, and got a reply in an email whose date is obscure but which may be 21st February, from Mr Tsyb:
"The two BVI companies will be owned by Mr Alexander Yedin. Alexander decided to appoint myself as a director for the companies so please inform us what documents do you need from me."
[93]All this, and everything that followed, is completely inconsistent with Mr Simms having any knowledge that anyone other than Mr Yedin was to be the beneficial owner of either of the flats, and I find the evidence of Mr Tsyb to the contrary to be false. In every subsequent document which has any bearing on the point Mr Yedin is thereafter presented to Citilegal and every other third party, expressly or impliedly, as the intended beneficial owner of both companies, and therefore the intended beneficial purchaser of both flats. There is absolutely nothing in any of the documentation up to and beyond the completion of the purchase, and then the completion of third-party mortgages over the flats, which suggests in any way that any third party (whether Mr Goncharov or anyone else) was in any way interested in the flats or the holding companies. Mr Yedin was at all times presented as a beneficial owner.[94]Mr and Mrs Yedin duly visited Coutts as had been arranged, at which it is to be inferred Mr Yedin presented himself as the purchaser of both properties and beneficial owner of both purchasing companies, but that connection ended in mid-March because the bank was not prepared to lend to a PEP indirectly through an offshore company. Prior to that meeting Mr Simms had a discussion with Mr Yedin in which he confirmed that he was buying and there was no mention of Mr Goncharov. I accept Mr Simms’ evidence to that effect.[95]On 20th February Mr Simms wrote to incorporation agents seeking the incorporation of Asha and Skelling, and stating:
“The two companies are to be owned beneficially by Mr Alexander Yedin.”
[96]I consider that those were his clear instructions. On the same day Mr Yedin was issued and allotted the entire share capital of Skelling ($50,000). The same happened on the same day in relation to Asha.[97]By 14th March the Coutts lending proposal had fallen away, and a letter from Mr Simms to Mr Tsyb said: “Clearly unless Alexander is prepared to put up the totality of the purchase price for both properties in case the loan is not available, he could only safely exchange contracts on one which, I assume, would be 3b. This would leave 2b "up in the air" until we can find an alternative lender."[98]It would seem that the reason for its being said that Mr Yedin could only exchange on one flat is because it was calculated that he would have enough money from his own resources for that purpose without borrowing further, because in a letter of the same date to a new proposed lender, namely Ahli United Bank, Mr Simms wrote:
"We have already been put in funds for the deposit for both properties. Mr Yedin is happy to provide 45% of the purchase price of both properties together with the stamp duty, legal costs and other expenses…"
[99]It might have been thought that Mr Yedin could top up the sum of 2×45% of the cost of both properties with a further (approximately) 10% and fund just the purchase of Flat 3B, but that is speculation because nobody gave any evidence about it (the document was not cross-examined on).[100]On 21st March Mr Simms also approached Anglo Irish Bank for mortgage lending. The letter describes the two BVI companies as borrowers and Mr Yedin as the beneficial owner of both companies. He is described as “married” with two children. The letter goes on: “The son of the family is going to London University in the autumn of this year and Mr Yedin has decided that it will be appropriate for his son and daughter to have the use of a flat and for himself and his wife to have a flat in the same block."[101]It was not apparent from the evidence who gave Mr Simms that instruction, but whether it was Mr Yedin or Mrs Yedina it is a matter which is entirely consistent with Mrs Yedina's version of events and completely inconsistent with Mr Yedin's and Mr Goncharov's.[102]Despite the fact that a mortgage offer had not yet been forthcoming, two letters from Mr Simms to Lorrells (the conveyancing solicitors) dated 22nd March record that Mr Tsyb had given instructions to exchange contracts, first for Flat 3B and then for Flat 2B. Two formal letters (one for each flat) followed the next day, signed by Mr Tsyb and Mr Simms.[103]In an email dated 27th March Anglo Irish Bank sought (inter alia) details of the Interkontact Group and Mr Yedin’s shareholding, and confirmation of the source of funds and Mr Yedin’s wealth. Mr Simms responded on 30th March saying that Mr Yedin did not wish to declare his entire funds and wealth. Anglo Irish Bank responded on 30th March to the effect that they did need some form of satisfactory confirmation as to the source of his wealth from a reputable source.[104]The Ahli United Bank application was proceeding in parallel with this activity, and that bank indicated a willingness in principle to lend on 3rd April, and sent application forms. On 5 April 2006 Mr Simms completed mortgage application forms seeking loans from Ahli and signed them on behalf of both BVI companies. £825,000 was sought in respect of Flat 2B and £838,750 was sought in respect of Flat 3B. In both forms it was stated that the Yedins would occupy the property. Mr Yedin was proffered as the guarantor for both loans, and his share of the annual earnings from Interkontact was said to be $850,000.[105]In the trial bundles there is then a significant letter dated 11th April 2006 ostensibly from Mr Tsyb and addressed to Ahli United Bank. It contains significant material but Mr Tsyb denied sending it. This requires a little detailed attention.[106]What is in the bundle (twice) is a letter written on blank paper but with “JSC ‘Inter-Kontakt’” written across the top as a heading. It is addressed to Anna-Marie Grimes at Ahli United Bank, who was not the regular correspondent there but the reference is “YEDIN/MORTADMIN”. There is no document in the bundles to which it was an obvious reply, but I note that the mortgage application forms required the name and address of a person who could confirm the income and the name of an “Accountant (who must be certified or chartered) to whom we can write for confirmation of our income and status”. Looking at the context of the letter it may be that it responds to such a request, though none is apparent in the trial bundles.[107]The body of the letter is headed with Asha’s and Skelling’s names and it reads: “I am the accountant of Mr Alexander Yedin in the Ukraine and I also deal with Mr Yedin’s accountancy and financial affairs internationally. Mr Yedin is the sole beneficial owner of both Asha Capital Corp and Skelling Limited. Mr Yedin holds 55% of the total shareholding of JSC "Inter-Kontakt" and in the last 3 years the Group has made profits of $3,500,000, $3,000,000 and $2,000,000 respectively. Mr Yedin has received substantial dividends and distributions from the Group totalling $1,100,000 in the last financial year. In addition Mr Yedin is a controlling shareholder of an import and export company Nichols Ltd, BVI and this has been consistently profitable and of the last two years Mr Yedin has received distributions of $2,000,000 and $2,000,000 from Nichols Limited. Mr Yedin has agreed to guarantee the loans to Asha Capital Corp and Skelling Limited from your bank and his resources are more than adequate to enable him to do this. Obviously Asha Capital Corp and Skelling Limited are both new companies formed for the purpose of the purchase of the properties in Collier House. The 45% of the purchase cost, stamp duty and other costs of the purchase will be provided from a distribution from Nichols Limited out of the community profits. Yours sincerely, Nikolai Tsyb" Nikolai Tsyb"[108]The letter does not contain a manuscript signature – the end of the letter is precisely as set out in that extract.[109]Mr Tsyb denied sending this letter and said it was prepared in the offices of Citilegal. He pointed out that the level of English used in that letter was not his level of English.[110]This letter is a potentially significant letter in terms of what it says about the beneficial ownership of Asha, Skelling and Nichols. Insofar as it can properly be attributed to Mr Tsyb it can equally be attributed to Mr Yedin because Mr Tsyb's prime function in this case was to translate and communicate for Mr Yedin in relation to this transaction and, to the extent that Mr Tsyb is responsible for it, the information must have emanated from and been approved by Mr Yedin.[111]I accept that Mr Tsyb did not draft this letter himself. I accept that the fluent English involved is not one of which he is capable, judging by his spoken English and by a number of emails from him which I have seen. It will have been drafted for him by somebody else. That is likely to have been Mr Simms who said this in his witness statement:
"18. By 3rd April Ahli Bank indicated that in principle it was prepared to lend 55% of valuation for a term of 15 years on an interest only basis. I informed Ahli Bank on instructions from Mr Tsyb that Interkontact Group has made profits of $3.5, [sic] $3m and $2m in the three previous years that Alexander had received distributions and salary of $1.1m last year and had received $2 million as distributions from Nichols Limited in each of the two previous years. I was instructed that Mr Yedin was controlling shareholder of Nichols Limited (see e.g.p254)."
[112]The page number cross-reference in that paragraph cannot be worked out from the trial bundle, but what Mr Simms is describing is apparently the letter of 11th April. For reasons which will appear shortly, I do not think that Mr Simms did pass that information himself to the bank, but I consider it likely that he drafted the form of a letter from Mr Tsyb to send. There is no evidence of passing drafts in the trial bundle, but there is a hint that that was the sort of thing that Mr Simms would do in a later email of 1st June 2006 written in the context of a later application to the Bank of Scotland International for a loan. On that date Mr Simms wrote to Mr Tsyb:
"We have made substantial progress with the Bank of Scotland International. I will shortly let you know the form of wording that is required by the bank and it will need to be sent to their processing agent [identified]. So that I know what has been sent, can a copy please be sent to me? The wording for the bank references will follow shortly."
[113]The evidence shows that the 11th April letter was indeed sent by Mr Tsyb, and I so find. That emerges from the following. On 12th April Mr Simms wrote to his contact at Ahli United Bank saying:
"I believe you will be hearing from the accountant of Mr Yedin very shortly and you will see that he has a very substantial income, in excess of US$3 million a year, from his various companies."
[114]That anticipates Mr Tsyb sending his letter, and supports the inference that Mr Simms knew of its content. On 18th April the bank replied:
"The Bank has received a reference reply from the client's accountant, but this has prompted further questions, particularly as the equity for the transaction appears to be being originated from another company called Nichols Limited."
[115]On 25th April the bank wrote to Mr Simms enclosing a copy of what it says was the bank's most recent letter to Mr Tsyb which was said to be self-explanatory. It also indicated that the bank was not confident that it would be able to assist in the transaction for want of proper financial information and that the bank would contact Mr Simms as soon as it received a reply from Mr Tsyb.[116]The letter to Mr Tsyb bears the same date and indicates on its face that it was sent to him by email at the address "tsyb@ik.kiev.ua". It is headed with Mr Yedin's name and says (so far as material):
"I thank you for your letter dated 11th April 2006 concerning Alexander Yedin, the contents of which have been noted. In order that we may give this matter further consideration, I should be grateful if you would provide me with copy financials for both JSC "
Inter-Kontakt" and Nichols Limited. It would also be of assistance if you could provide me with details of any websites detailing the activities of either company."[117]Mr Tsyb in effect denied receiving that email. He said he never communicated with Ahli United Bank at all. He simply did not accept that he received this letter. I do not accept that evidence. As the main point of communication and translation, it is in my view inevitable that Mr Tsyb would check his emails and respond appropriately. His own evidence was that he translated all significant documents for Mr Yedin. He said that Mr Yedin had access to that email address, and that may be correct, but that does not mean that Mr Tsyb would not have seen important communications such as the bank letter. I also note that on 28th April Mr Simms wrote to the bank saying he would shortly receive up-to-date brochures of the InterKontact Group (albeit most would be in Russian and Ukrainian) and giving the address of a website for the group. I think it likely that that letter was a follow-up to the bank's letter of 25th April and that it was written having contacted Mr Tsyb about the request for information made in that letter. Mr Simms did not give evidence to that effect, but it seems to me to be likely.[118]In all the circumstances, therefore, I find that Mr Tsyb did send a letter of 11th April, albeit that it was drafted by Mr Simms, that the contents reflected instructions given to Mr Simms by Mr Tsyb (and perhaps in part by Mr Yedin), and that Mr Tsyb's information emanated from and was approved by Mr Yedin. I do not consider that Mr Tsyb would do anything that was not approved by Mr Yedin.[119]Exchange of contracts for both flats took place in mid-May.[120]On 25th May 2006 Ahli United Bank had closed their file and declined the application for want of what it considered to be adequate financial information. On 23rd May Mr Tsyb had said that the purchase could be completed even if there was no mortgage offer in place. By now Mr Simms was pursuing another potential mortgage lender, Bank of Scotland International (“BoS”). However, completion was due on 9th June and it was apparent that the mortgage process would not be finalised by then. Accordingly it was decided that Nichols would provide all the funds, with a mortgage or mortgages being given in respect of £2,117,500, being 70% of the aggregate cost of the two flats, pending the grant of mortgages by BoS, at which point Nichols would be repaid it mortgage. That seems to be what happened.[121]A BoS mortgage application form was filled in for Skelling, and in it Mr Yedin was described as the beneficial owner (and as the President of Interkontact). The form was signed by Mr Simms and Mr Tsyb. The mortgage loan was to be £1,050,000. In his cross-examination Mr Tsyb accepted that by signing in that way he was confirming Mr Yedin as the beneficial owner. The correspondence shows that BoS was seeking a statement of means in respect of Mr Yedin and no-one else.[122]On a date in June which is obscured on the trial copy Ms Novikova answered some questions from the Bank of Scotland which had been passed on by the mortgage brokers who had been engaged to find a lender. Those answers included that Mr Yedin was the beneficial owner of both companies, that Flat 2B would be occupied by Darina and Denis and that Flat 3B would be occupied by Mr and Mrs Yedin. It is not apparent where this latter piece of information came from. It may have come from Mrs Yedina.[123]Formal mortgage offers were made by BoS to each company on 29th June - £1,050,000 plus an arrangement fee of £10,500 to Skelling and £1,078,175 plus an arrangement fee of £10,500 to Asha. The mortgage period was 10 years at a variable interest rate of 0.85% over base rate. Capital was repayable at the end of the period. A personal guarantee from “the ultimate beneficial owner of Skelling, Mr Oleksander Yedin” was required in respect of Skelling, and similarly in respect of Asha. Clause 7.4 made it an event of default if control of the borrower passed to any person without the prior written consent of the bank.[124]Mr Tsyb accepted both offers on behalf of the companies, on 18th July 2006. Mr Simms had resigned as director on 10th July in order to remove the possibility of a continuing link with this jurisdiction, which was seen to be unhelpful for tax purposes, so by the time of the signature Mr Tsyb was the sole director. He accepted he probably read the contents but did not remember. He did not consider that he had to understand the contents fully and did not know whether he understood clause 7.4 - that is plausible.[125]It is alleged by Mr Yedin that during this period, on 5 July 2006, he entered into a loan agreement with Mr Goncharov for monies which are said somehow to represent the balance of the purchase price of Flat 2B which was not covered by the mortgages. This document is relied on by Mr Yedin and Mr Goncharov as supporting their case that Mr Goncharov was the real purchaser of Flat 2B and the provider of funds for its purchase. The authenticity of this document, and of a subsequent receipt for the moneys said to have been loaned, is disputed by the claimant and it will be more useful to deal with that issue in a separate section of this judgment.[126]The theme of the presentation of Mr Yedin as the owner of both flats continued. In response to a query from Lorrells (the conveyancing solicitors) as to who Nichols was, Ms Novikova wrote (on 9th October 2006): “You are correct, 2b is in the name of Skelling Ltd and 3b is in the name of Asha Capital Corp. Both companies are opening their own accounts at the Bank of Scotland. Once the accounts are opened, service charges, et cetera will be paid from those accounts. In the meantime the service charges have been paid from the account of Nicholls Ltd which is a company controlled by the same owner."[127]At this point Mr Zevlever came on the scene. His evidence is potentially significant because if it is accepted then it materially supports the case that Mr Goncharov was intended to be, and was, the beneficial owner of Skelling and Flat 2B all along.[128]Mr Zevlever’s evidence in chief was brief. He referred to his activities in July 2006 when he was asked to assist Mr Yedin and Mr Goncharov when they bought “the properties at Collier House”. He visited the UK, and the reason was said to be to inspect Flat 2B which had been purchased by Mr Goncharov. He was also asked to review the “conditions of mortgage” for that flat, and to consider “additional expenses” connected with the “agent services”. His statement goes on to say that Mr Yedin was not fluent in English and asked him to take part in the process as an interpreter, and he and Mr Yedin met Mr Simms.[129]The statement goes on to refer to “several conversations” which he witnessed between Mr Yedin and Mrs Yedina in which it was stated “multiple times” that Mr Goncharov was the ultimate owner of Flat 2B, and that he was always aware that that was the case.[130]The documents show a different picture, and his cross-examination revealed a yet wider picture. Mr Zevlever told me that he worked for, or perhaps ran, an adoption agency or something similar. It is not clear why his expertise in that field would make him an appropriate person to carry out the functions entrusted to him, but he did have a command of English which Mr Goncharov and perhaps Mr Yedin did not have, so he might have been better placed to negotiate with Mr Simms if negotiation was called for. Mr Simms confirmed that Mr Zevlever did attend their offices, apparently to get Citilegal and Lorrells to reduce their fees, so that, at least, was his function.[131]There was a certain amount of documentary traffic about this, which follows the pattern of there being no mention of Mr Goncharov at all. On 13th October Mr Simms wrote to Mr Yedin to allay his fears that the latter might not be able to pay the BoS mortgage moneys to Nichols, which had led Mr Yedin to considering not taking the BoS loan moneys. In the penultimate paragraph of his letter he referred to potential wasted expenditure if the loans were not to happen. That prompted a fax on 18th October from Mr Tsyb to Mr Simms which enclosed a translation of a letter from Mr Zevlever. Mr Tsyb’s fax read:
“ “Please find attached a translation of a yesterday’s letter of Mr Yedin’s adviser Mr Sergei Zevlever.””
[132]The description of Mr Zevlever should be noted - he is said to be Mr Yedin’s adviser, with no mention of Mr Goncharov.[133]The letter is addressed to Mr Simms and is signed by Mr Zevlever as “Adviser”. It starts:
“I am writing to you in response to your letter to Mr Yedin on October 13 2006.”
[134]It goes on to raise various queries. It is plain from that letter that Mr Zevlever must have seen the 13th October letter, not only because of the first sentence but also because it contains other references which are clear references back to the 13th October letter. Yet in his cross-examination Mr Zevlever firmly denied having seen that earlier letter. I reject that evidence - he plainly had. That is made plainer by an apparently later but undated email that he wrote which again refers to the letter in terms. This denial reinforced the impression of Mr Zevlever in the witness box of a cavalier witness.[135]Mr Simms responded in a letter of 23rd October addressed to Mr Yedin and referring to Mr Zevlever’s first letter to him. It contains a detailed account of the fees and expenses involved and points out the waste that would occur if the BoS mortgage did not go ahead. Mr Zevlever responded in an undated email which started:
“Regarding the final decision about the mortage we will have to wait until Mr Yedin returns from his business trip on Monday.”
[136]When it was pointed out to Mr Zevlever that this letter referred only to Mr Yedin, he said that Mr Goncharov too had to make the decision, even though he was not referred to.[137]On 31st October 2006 Mr Tsyb set up Mr Zevlever’s visit. He emailed Mr Simms:
“Mr Sergei Zevlever, attorney of Mr Alexander Yedin, is ready to visit your office to check the financial documentation concerning the purchase of the flats, purchase of BVI companies and financial documentation relating to the mortgage. Please inform us when you will be ready to accept him in your office and provide him with all required documentation.”
[138]When asked why this email referred to him as the attorney for Mr Yedin only, he explained that the loans were all for Mr Yedin, and he could not represent Mr Goncharov if he was “not on the papers”. In other words he was taking a technical point about whom he was technically representing if he was complaining about the expenses of the transaction. I do not accept that Mr Zevlever would have viewed matters in that way, or Mr Tsyb either (since it is his expression). I think that Mr Zevlever’s view was contrived to justify why there was no reference to Mr Goncharov. If he was really representing Mr Goncharov as well (and his evidence was that Mr Goncharov paid his fare) then he would not have thought in that technical way.[139]The meeting duly took place though it is undocumented. Mr Simms refers to it briefly in his witness statement as an attendance by Mr Zevlever but gives no details of the discussion. Mr Zevlever’s own witness statement is equally brief, as identified above. However, in cross-examination he expanded on some of the things said and said that Mr Simms was aware that one of the purchasers would be Mr Goncharov. He went further, and says he discussed with Mr Simms the possibility of one of the loans being taken by Mr Goncharov, but was told it would be very expensive and would take too much time. His evidence was that Mr Goncharov had asked him to raise that possibility.[140]That allegation about Mr Goncharov suggesting that he would take a loan and of Mr Zevlever raising it with Mr Simms is of obvious significance to this action, and I consider that Mr Zevlever, Mr Goncharov and Mr Yedin would have realised that. Yet it is not in Mr Zevlever’s witness statement and it was not put to Mr Simms. I do not accept it. I think that it has been made up for the purposes of Mr Zevlever’s evidence to embellish the case for Mr Goncharov’s ownership. Furthermore, it is implausible that at that relatively late stage in the transaction Mr Goncharov, through Mr Zevlever, would have raised the possibiity about his taking on a loan, particularly when it had been so obviously avoided (if his case on ownership is right) in the past. If he had really thought about taking on one of the loans himself (which presumably means guaranteeing it and being seen to be the man behind it) it would have been raised much earlier.[141]I also note that the order of purposes of Mr Zevlever’s trip was reversed in his oral evidence - expenses first, then reviewing the mortgage conditions (whatever that might mean - Mr Zevlever did not need to come here for that) and “viewing” (not inspecting) the flat. That again demonstrates the lack of care with which Mr Zevlever has approached the preparation of his evidence.[142]Mr Zevlever claimed to have agreed a deal on some of the fees at the meeting. It is not clear what that deal was, but that does not matter. The significant evidential point which emerges about Mr Zevlever’s involvement is that it was again an involvement in which there was no mention to Citilegal of Mr Goncharov being interested at all. Furthermore, the quality of Mr Zevlever’s evidence is such that I do not accept his evidence about the Yedins discussing it between themselves (again, an implausible assertion anyway) or about his hearing it mentioned in the Ukraine.[143]Going back to the mortgage, it seems to have been some sort of requirement of the bank that tenancy agreements be entered into with the occupants of the flats. It is not clear why this was required, but in any event a form of agreement for both flats was entered into. The tenant under each agreement was Mr Yedin, and he signed them.[144]On 5th December 2006 Mr Goncharov signed a document on behalf of Interkontact confirming that Mr Tsyb was employed by them and confirming his address. That, and an email sending it on to Lorrells, is the only reference to Mr Goncharov in the whole of this sequence of events (apart from his name being in Interkontact brochures). It is of no significance in the dispute as to the ownership of Flat 2B and Skelling.[145]On 8th December 2006 the mortgages were finally completed and the mortgage moneys paid to Citilegal. Citilegal sent them on to Nichols (net of fees) on 11th December (a Monday). On that date Mr Simms reported completion to Mr Yedin. Mr Yedin duly provided the guarantees for both companies. In addition, Mr Yedin entered into deeds of postponement in respect of each company (probably executed much earlier in the year). The purpose of those documents was to postpone loans he is said to have made to the companies so that they ranked after the BoS loans. The relevant parts of the Skelling deed read: “I, Oleksander Yedin residing at Flat 2B Collier House, 163 – 169 Brompton Road, London, SW3 1PY CONSIDERING THAT SKELLING LIMITED ... Is indebted to me by way of sums advanced by me on loan and that I have agreed to postpone my claims upon it in respect of such loan and interest thereon and of any further loans which I may make to it in the future to your claim upon the Company in respect of its obligations to you…"[146]The significance of that deed is that it assumes that the balance of the purchase monies was loaned by someone, and that person was Mr Yedin. Whether he, as opposed to Nicholls Limited, was the provider of the residual sums is not the point here. The significance of that deed (whose execution was witnessed by Mr Simms) is that it is completely consistent with Mr Yedin being the beneficial owner of Skelling and completely inconsistent with the case that Mr Goncharov was the purchasing beneficial owner.

The loan agreement

[147]Mr Yedin has produced a loan agreement entered into between him and Mr Goncharov which is said to relate to this transaction, and he has also produced a receipt which is said to evidence the repayment of the loan. The authenticity of both documents is challenged by Mrs Yedina.[148]The loan agreement itself is on paper which bears the trident symbol of Ukraine. It is typed in Ukrainian or Russian (it does not matter which) and is obviously a formal document formally drawn by someone with legal and drafting skills (in other words it is not a home-made document). It purports to have been made in the town of Brovary (Kiev region) on 5th July 2006 and contains some elaborate provisions. It is not necessary to set them all out verbatim but it is necessary at least describe most of them.[149]The parties are described as Mr Goncharov as Lender and Mr Yedin as Borrower. The numbered paragraphs are as follows (in the agreed translation provided): “1. The LENDER has transferred, and the BORROWER has taken into possession GBP 496,825 (four hundred ninety six eight hundred twenty five pound sterling), that at the exchange rate of the National Bank of Ukraine (as of the date of signing this Agreement) amounts to UAH 4,628,521 (four million six hundred twenty eight thousand five hundred twenty one) hryvnias 06 copecks. 2. At the moment of signing this Agreement, the LENDER has transferred the said amount of money, and the BORROWER has accepted for his payment of 30 (thirty) per cent of the full cost of the apartment 3b (ASHACAPITALCORP) located in the United Kingdom of Great Britain and Northern Ireland in London at Collier House 163 – 169 Brompton Road, London, SW3 1PY, as well as the re-registration of 100 per cent of the authorised capital of Skelling Limited registered at Vanterpool Plaza, Wickhams Cay 1, 2nd Floor, Road Town, Tortola, British Virgin Islands, in favour of the LENDER. 3. The BORROWER shall repay the said amount of money to the LENDER in cash and/or otherwise in the manner, not contradictory to the effective legislation, by December 31, 2007 with the right of prepayment of money. Upon repayment of money by the BORROWER, the LENDER shall provide the BORROWER with the written receipt evidencing that he has received the full amount of money specified in paragraph 1 of the Agreement and that no claims exist regarding the fulfilment of this Agreement."[150]Paragraph 4 provides for the repayment of the loan to be effected at an address stipulated by the parties and paragraph 5 repeats the obligation to pay within the period specified in paragraph 3. Paragraph 6 allows for enforcement procedure if the money is not repaid and paragraph 7 again provides for the moment of deemed repayment. Paragraph 8 contains certificates by the parties as to such matters as non-concealment of relevant circumstances and their free will.[151]Paragraphs 9 and 10 read:
"9. Other spouse's consent to the conclusion of this Agreement by [Mr Goncharov] for granting the borrowed money specified in para 1 hereof has been verified by me [the notary] according to the separately submitted consent notarised by [the notary] under registration number 6251. I, the borrower, am aware of the contents of this statement. 10. Other spouse's consent for the BORROWER for borrowing of the money specified in 1 hereof has been verified according to the separately submitted statement, which signing was notarised by me on July 05, 2006 under registration 6251. I, the LENDER, am aware of the contents of this statement."
Neither of those consents was made available.[152]Paragraphs 11 to 14 provide for various formal matters, including the cost of notarisation of the agreement. Paragraph 15 deals with counterparts:
"15. This Agreement has been executed and signed by the Parties, mutual agreement in three counterparts having equal legal effect. One counterpart shall be kept in files of [the notary]. Other counterpart shall be issued to the LENDER and the BORROWER."
[153]Below that the document is signed and below that there is a notarisation by the notary (Burlaka Oleg Victorovych), being a notary of the Brovary District Notary Circuit. The notary certifies that the agreement had been signed by the parties in his presence, their identity had been ascertained and their legal capacity verified. It was said to be "Registered in the register under No. 6251". An apparent Ministry of Justice seal is applied.[154]The agreement covers two sides of a piece of paper. At the foot of the first page there are three silvered seals, applied to the face of the document, two to the left and one to the right. The right-hand most seal is rectangular and bears a printed number in red saying "BCX No 857995". As will appear, that seems to be a way of identifying the document numerically in the register of such agreements under Ukrainian law.[155]On the left there is an almost square seal bearing the Trident sign and with the word "Ukraine" appearing vertically either side of the central motif, although that text was not visible looking at the seal straight on; it can only be seen by shining a light through from the back. In the centre there is a circular seal bearing a Justice-like figure and some text which was not translated. Those two seals look like some sort of official verification.[156]I did not receive any expert evidence on the Ukrainian law relating to the notarisation and registration of these agreements, and in particular how those three seals came to be applied. One would have thought that they would be applied after the agreement was printed and executed in order to provide some sort of official cross-reference to the register and authentication of the registration process. If that is correct then it would seem that the document has one odd physical feature. The quality of the paper is such that one can clearly see the text on the reverse face by holding it up to the light. Indeed, some of the text has bled through on each side. The seals are applied across an area of the agreement which bears typing. Looking at the document from the front they seem to have been placed in an area containing typed text.. Typed words are "interrupted" by the positioning of the seals. One would therefore expect the text to overprint the seals if the seals were applied first (and if it was capable of adhering to the seals) or to be visible behind the seals when held up to the light if the seals were applied after the document was typed. It was apparent from my investigation of the document that there is no text visible behind any of the three seals, which is not what one would expect if the seals were applied to a completed document. However, it is also not obvious that there was any overprinting of text on the seals. There are one or two black smudges on the seals but they cannot be identified as text and, without forensic evidence, it is not safe to conclude that they are printing ink, typewriter ink or toner. I am alive to the fact that the court must not act its own unassisted amateur forensic expert, but I consider that the absence of any apparent printing under the seals is a feature which casts doubt on the authenticity of the document if, as seems the more probable case, the seals are a form of authentication placed on a document once it has been written.[157]There is a further very significant oddity about the document itself. It is Mr Yedin's case that document was properly notarised and registered. In support of that case his counsel produced what turned out to be part only of the register showing that an agreement with the number on the rectangular silver seal (BCX 857995) was registered on 5 July 2006. That extract was apparently procured by virtue of a search carried out on 9 October 2017 at 14:17. Mr Yedin produced that version of the printout during his evidence in chief on 4th November, with no explanation being given as to why it had not been produced before. Indeed, his counsel had said earlier in the trial that a print from the register was not available. That was plainly wrong.[158]With the benefit of that printout and of a sight for the first time of the BCX number on the silver seal (the number and nature of that seal was not apparent from the disclosed photocopy), the claimant carried out her own search of the register of notarised agreements during the trial. I was provided with the results of those searches which was fuller than that provided by Mr Yedin. They showed that a document with that number was indeed "issued" on 5 July 2006 and that its code ("3 – other contracts") was the same as on the extract provided by Mr Yedin. However, the entry went on to describe the notary by whom the document had been "issued". (A supporting witness statement from a Ukrainian notary refers to a “registering” notary.) The notary thus appearing on the register was a completely different notary from the one who purported to notarise the loan agreement, and in a completely different part of the country. The ostensible registering notary was said to be in the town of Brovary, which is near Kiev. The registered notary was a differently named one (Tsigankova Olena Olexsandrovna) in the Crimea. The claimant also got registration details of the numbered registrations on either side of BCX 857995. Those entries show that the notary registered those agreements as well, suggesting registration of a series of agreements by the same notary. The witness statement of the notary who carried out the searches did not suggest that there would any difference between the notarising notary and the registering notary. No real explanation was proffered for this difference in notaries, or for the fact that the identity of the notary was not reproduced on the register extract produced by Mr Yedin. Mr Verduyn sought to rely on some evidence that attorneys in the Crimea were all struck off the register after the Russian takeover in 2014, but that does not go to the point at all. These question-marks over registration therefore also raise a serious question mark over the authenticity of the document.[159]The oddities do not stop there. In his witness statement Mr Yedin said that Citilegal (presumably Mr Simms) advised "us" to conclude a loan agreement between them in respect of 30% of the purchase price of Flat 3B. However, he did not maintain that account in cross-examination. He referred to various agreements between Nichols and Asha, and Nichols and Skelling (which may or may not have been the mortgages) but did not make any reference to Mr Simms recommending the type of agreement embodied in the loan agreement. Instead he said he (and presumably Mr Goncharov) entered into this document at the request of Mrs Yedina to make sure that Flat 3B was secured for her and the family. It was said to be a way of demonstrating that although Mr Goncharov supplied the money for the flat (presumably through Nichols) the Yedins would still have Flat 3B, about which Mrs Yedina is said to have expressed concerns.[160]That does not really make sense. If the idea was to make sure that Mr Goncharov could have no claims on Flat 3B there would have been much simpler ways of going about it. One would have thought that a simple acknowledgment would have sufficed. Furthermore, if that was its purpose it would not be necessary to include a reference to Skelling in paragraph 2. To evidence an absence of entitlement by creating or evidencing a loan is not a plausible way of achieving what Mr Yedin said was intended.[161]There are yet further strange features:(a) No-one was able to suggest how the figure of £496,825 was arrived at if it were 30% of the cost of Flat 3B. On footing 100% would be £1,656,083.33, and it is not apparent how that figure would be made up on the facts of this case.(b) In a pre-trial letter dated 14th March 2017, in response to a request for further information and banking documentation, Mr Yedin’s solicitors said that no other documents relating to the loan were in existence, and that the amounts lent were paid in cash, as was the repayment. This was because of weaknesses in the Ukrainian banking system. This does not square with the loan agreement, which refers to sums “transferred”, or with the known mechanism of payment for the flats which was via Nichols, which was able to operate a reliable bank account.(c) To have such a formal document is at odds with the otherwise apparently highly informal arrangements which Mr Yedin apparently had with Mr Goncharov. In the context of the reimbursement of liabilities arising out of the use of Flat 2B rents to pay Flat 3B outgoings Mr Yedin’s evidence was that that was done by various mechanisms which are undocumented; the same applies (as will be seen) in relation to his evidence about the alleged repayment of the loan; and no other documentation exists which governs the probably complex dealings between Mr Yedin and Mr Goncharov generally.[162]Before reaching a conclusion over the genuineness of this loan agreement I should deal with the purported repayment. Mr Yedin has disclosed a receipt for repayment. It is a simple manuscript document written in Ukrainian in the hand of Mr Goncharov himself, signed by him and dated 20th February 2007. It simply records the receipt by Mr Goncharov of the sum of £496,825 “after completion of Loan Agreement dated 04.07.2006 concluded between myself and Mr Yedin OY. I have no claim or contradictions arising out of the fulfilment of the Loan Agreement dated 04.07.2006.”[163]The first observation to make is that this document mis-dates the agreement to which it is said to relate, though it does get the amount right. The parties cannot have had the agreement before them when they entered into this document, though the amount in question is not an easy amount to remember unless prompted by the actual document in question.[164]The next observation is that there is a complete lack of documentary evidence as to the actual repayment, and significant inconsistency as between the witnesses as to the method of repayment . The solicitors’ letter to which I have referred says it was repaid in cash, and that was Mr Yedin’s answer in cross-examination when he was asked how it was repaid. He put this down to the untrustworthiness of the Ukrainian banking system. The currency of payment was said to be Ukrainian local currency. That would, in the circumstances, have required a lot of notes. No details were provided of whether it was in one or more instalments. However, Mr Goncharov’s evidence was different. He says it was repaid in cash (money) and land, and that a form of account was kept of their dealings. The cash was both Ukrainian currency and US dollars. The land comprised 10 or 12 plots of land outside Kiev, transferred into his name. His evidence tended to suggest that monetary matters were dealt with via the profits in Nichols and he said the that state of their account with each other (that is my expression, not his) was kept in manuscript. He even suggested that such a document might still exist. It did not appear that anyone had ever looked for it, much less made it available in these proceedings. No documents relating to the suggested land transfers were disclosed.[165]There is also an inconsistency between the loan document and the defendants’ pleaded case on the loan. The Defence pleads a sequence for the purchase and financing of the Knightsbridge flats along the lines appearing from the facts - Nichols provided the funds to allow completion by way of loans and the BoS mortgages were applied for. Paragraph 12 then pleads: “12. The loan was completed and the funds were drawn down in early December 2006. After deductions of fees and cost the aggregate sum of £2,089,932 was paid back to Nichols, discharging in substantial part the loans provided by Nichols to the two companies. Asha's remaining debts to Nichols was later discharged by means of a loan from Mr Goncharov to the First Defendant."[166]The emphasis is mine. The paragraph specifically pleads that the Yedin/Goncharov loan was made after the mortgage monies were paid, i.e. in or after December 2006. Yet the loan agreement is dated 5 July 2006. The Defence actually pleads a plausible state of affairs. It is plausible that, after the mortgage monies became available, and the parties knew what the mortgage proceeds would be, they might tidy up the loan structure in the manner referred to in the pleading. It is a little less plausible that they would do that when the prospect of getting the mortgage, and perhaps how much they would manage to get, were still up in the air (in July 2006). Be that as it may, the discrepancy between the paragraph and the evidential case of the defendant's trial is striking. The pleading suggests that the loan agreement was not available to the pleader, which again is surprising if it was a genuine document and as significant to the defendants' case as they would say it is.[167]Looking at this body of evidence overall, I am not satisfied that the loan document and receipt represent genuine transactions. There are too many discrepancies, inconsistencies and implausibilities to enable me to take the loan document and its contents as face value. It is not possible (or in my view necessary) to identify the date and circumstances in which the loan agreement came into existence, but I am not satisfied that it represents a genuine transaction or is a genuine document executed and notarised as it purports to be on its face. I consider that it is a document produced by Mr Yedin and Mr Goncharov for their own purposes, either in the context of this action or otherwise, but it does not represent a true state of affairs. Accordingly its evidential value in the debate as to the ownership of Skelling is nil. I reach this conclusion bearing in mind the enhanced standard of proof necessary to make good a serious allegation such as the contrivance of evidence.[168]The same conclusions apply in relation to the receipt.

Events relating to Skelling and the flats subsequent to the mortgages

[169]In February 2007 Mr Tsyb asked Mr Simms to prepare documents transferring Mr Yedin’s shares in Skelling to Mr Goncharov. Mr Simms prepared a draft resolution and procured a certificate from the agents and Mr Tsyb signed them on or about 8th February. Thus Mr Goncharov became the legal owner of the shares.[170]The defendant’s case is that this was a transfer to give effect to the original intention. Mr Simms was not told why it was being done, but his evidence was that he assumed this was just a transfer of the legal interest and that Mr Yedin remained the beneficial owner. He would otherwise have advised Mr Yedin that a change of beneficial ownership needed to be cleared by the bank lest it give rise to an event of default.[171]The effect of this transaction is a point lying at the heart of Mrs Yedina’s claims to be able to execute any judgment she gets against the proceeds of sale of Flat 2B, and that is the subject of a later heading of this judgment. For the time being I will continue the narrative of Flat 2B.[172]As appears above, it is Mrs Yedina’s case that one of the purposes of buying a second flat (Flat 2B) was so that it could be let and the income could be used to pay the outgoings on Flat 3B. Whether or not that was an original intention (which would be consistent with Mr Yedin’s buying both flats), that is what happened from time to time. Flat 2B was not let for the whole of the period between its purchase and sale, but when it was part of the incoming rent was used towards Asha’s (or the Yedin family’s) outgoings on Flat 3B. That is common ground. Mrs Yedina says, of course, that that implemented the original intention. Mr Yedin’s case is that that happened as a matter of convenience. He had an arrangement with Mr Goncharov that the English income from the flat could be used in that manner and that he made compensating payments in the Ukraine. In that way he avoided the cost of making transfers of funds into the UK from other jurisdictions.[173]Each side’s case has its problems of credibility in this area. It is not clear how the mathematics would have been anticipated to work at the time the purchases and mortgages completed. The income from Flat 2B would have been required to pay the mortgage payments and other outgoings on Flat 2B itself first. It was not clear what calculation could have been made at the outset which would have demonstrated a worthwhile surplus to put towards the outgoings on Flat 3B. The position might have changed once the variable interest rate was significantly reduced after the financial crash, but that will not have been foreseen, and could not have been calculated, at the outset. So far as Mr Yedin’s explanation is concerned, I do not consider that money transfer charges would have been seen as at all significant in this context. It is hard to accept Mr Yedin’s reason for what happened. Furthermore, he has not produced a single piece of documentary evidence to back up his version, whether relating to the cost of money transfers, or relating to the balancing exercise carried out elsewhere. This is despite the fact that he claimed in cross-examination to have had a “balance sheet” (prepared by Mr Goncharov, and perhaps Mr Tsyb - the evidence was equivocal) showing how much money was transferred and how much was spent on outgoings. Mr Yedin claimed that the balancing payments were made in various ways - cash, land or shares - as part of a general accounting between them from time to time. It remains surprising that there is no documentary evidence of how this was done, especially since it is also relevant to the question of how the alleged loan was repaid. Whatever Mr Yedin’s motivation was, I find it hard to accept it was the one he identified. That leaves only Mrs Yedina’s, and I am minded to accept it despite its problems.[174]Whatever the explanation may be, where additional moneys were required they were provided from funds from elsewhere (out of the jurisdiction), and it seems they came from Nichols.[175]It was not disputed that Mrs Yedina arranged for the furnishing of Flat 2B. Mr Goncharov says he asked her and she agreed to help; Mrs Yedina said that she arranged the furnishing of the flat as part of the agreement between herself and Mr Yedin that it should be let. It is common ground that Mrs Yedina found a letting agent, but Mr Goncharov says that he asked her to find one and she says it was done on her and Mr Yedin’s account. Mr Goncharov seemed to deny that Mrs Yedina did any more in relation to letting and says that he paid her for her work. However, he had corrected his witness statement to say that her help ceased in 2011, impliedly accepting that she did assist before then (more than an initial furnishing and finding an agent). I find that Mrs Yedina was involved in at least the initial letting of Flat 2B and for a period thereafter. It is not clear who had any necessary ongoing functions supervising the letting agents are that time but there was no evidence that Mr Goncharov, or someone specifically authorised by him (other than Mrs Yedina) did it for any part of the period. I prefer Mrs Yedina’s evidence as to who it was who asked her to get involved in the initial activities (not Mr Goncharov).[176]On 3rd April 2013 Mr Tsyb wrote to Foxtons, who were managing Flat 2B, about that flat. He wrote:
“Today Mrs Irina Yedina - ex-wife of 2b landlord - who lives in 3b will call you concerning storage containers. She has some items there and wants to add more. Please help her to arrange access to those containers.”
[177]The reference to her being the ex-wife of the landlord of Flat 2B only makes sense if Mr Yedin was treated as being that landlord, which in turn only makes sense if he was the beneficial owner of Skelling. In cross-examination Mr Tsyb said that Foxtons had been told that Mr Goncharov was the beneficial owner - he had provided documents to Foxtons demonstrating that because Foxtons had asked for documents demonstrating beneficial ownership. No copies of those documents were disclosed or otherwise provided in this litigation. Mr Tsyb’s explanation of this email (which he said he had forgotten until he saw it in the run-up to the trial) was that Mrs Yedina suggested that she be described as the ex-wife of the landlord to give her a connection with the flat in order to justify the request. I found that explanation completely implausible.[178]By 2015 Mr and Mrs Yedin had long since separated. Mr Yedin had remarried in 2009 and made a new life with his wife and child. The rents on Flat 2B, when it was let, were used to pay the outgoings on Flat 3B, and transfers of money were made to deal with shortfalls. Mrs Yedina was living off the rent from the Tunbridge Wells flat and her income from Logistrans. Then in February 2015 Mrs Yedina heard from Mr Tsyb and Citilegal that Flat 2B was to be sold. This caused her concern because it would deprive her of the benefit of the rents which discharged at least some of the outgoings on Flat 3B, and if sold it would not be available to be sold to discharge the mortgage on Flat 3B when the mortgage term expired - she had been anticipating a discharge (provided for by the Deed) by that means. She therefore sent Mr Yedin an email on 3rd March 2015: “"I am very concerned about the anticipated sale of 2B Collier House. If I right understand you and Alexey [Goncharov] have decided to sell it. If you and Alexey take away all the sales proceeds from England, there will be nothing in London to pay the expenses for 3B. If Alexey wants to take his 50% share that is up to him but do not think that you should retain your share in London to pay for the expenditure on 3B which runs at about £2,500 per month, taking into account the mortgage, other outgoings and the service charge? When both 3B and 2B Collier House were purchased in 2006, you said that the expenditure on 3B would be met from the letting income from Flat 2B and that is what has happened until now. If 2B goes there will be no letting income and nothing with which to pay for 3B. I do not have the income to deal with it by myself and, I trust you in this matter as you agreed to meet the outgoings. In this situation from where shall I expect the monthly sums from? I am also worried about what will happen to the mortgage on 3B which will need to be repaid in June 2016. As I mentioned earlier, I cannot refinance it as I have not income and nothing I can do is only to sell 3B. Where shall we live then? You agreed that you would pay off the mortgage from selling 2B. If you with Alexey sell 2B now and take the money out of England, how and I to arrange the repayment of the mortgage? Denis told me when you discussed this matter with him you made it clear to him that you did not intend to pay off the mortgage for 3B. That is not what we agreed in 2009. I would much prefer that you leave everything on its places and carry on with the current arrangements for dealing with the outgoings on 3B and you and Alexey do not sell 2B; and that you sell it in 1.5 years' time (in June 2016) and pay off the mortgages on both 2B and 3B from the proceeds of sale. Also I want to tell you that flat 2B for your children Denis and Darina is the only chance/place which they can rely on in the future and to have a roof above their heads. Therefore please think carefully and do everything in order to leave 2B to your children. If you are definitely going to sell, can you allocate £1.078 million of the proceeds for the mortgage on 3B and pay it off now rather than wait until June 2016? Alexander! Please put yourself on my place and consider the above alternatives and let me know your answer as soon as possible while it would not be too late."[179]It will be apparent that this letter is inconsistent with what Mrs Yedina said was the original intention when Flat 2B was purchased. Her evidence was that the original intention was that Mr Yedin would purchase it. In this letter she assumes that Mr Goncharov had a half interest in it. In cross-examination she explained that she was not sure of the ownership of Flat 2B because her husband and Mr Goncharov carried out changes (presumably to their various commercial interests) about which they did not tell her. In re-examination she explained that she understood there was a sale when she saw people coming out of the flat she did not recognise and when she called Mr Tsyb to find out what was happening he said that "they" were selling. Be that as it may, it is plain that this letter proceeds on the assumption that Mr Yedin did not own the whole of Flat 2B. On the other hand, it does proceed on the assumption that Mr Yedin had some interest in the flat, contrary to Mr Yedin's case and the case of the witnesses who said that Mrs Yedina understood that Mr Goncharov had purchased. Furthermore, it does presuppose some form of entitlement to the whole of the rents from Flat 2B which would be consistent with Mr Yedin owning the whole of the beneficial interest in that flat. I shall take this letter into account when coming to my conclusions on the true ownership of Skelling and its funds.[180]Mr Tsyb replied on behalf of Mr Yedin on 10th March:
"Alexander asked me to answer your email. He said that he would be happy to help but now he does not have money to pay the mortgage. Only one thing he can do is to speak to Alexey about delaying of the sale of the apartment."
[181]He wrote further on 19th March:
"Unfortunately Alexey needs money and he is categorically/strong against to delay of selling the apartment. He has advised to sell the apartment in London (now it can be sold out for £3-3.5m) or in Moscow. He has reliable friend to build these flats [ie the Moscow flat]… who can help to sell the apartment. Alexander has not have money now. You have to be responsible for all payments in relation to mortgage of 3B and other expenses (to agents and lawyers) as soon the tenant vacant the flat (she has been given a notice to vacant it before 30th May) and stop paying the rent."
[182]In a further email the next day Mr Tsyb said Mr Yedin was going to stop paying the mortgage and that Mrs Yedina could live in the dacha in Kiev, but she would have to pay the utility bills et cetera for her part of the dacha.[183]Mr Goncharov’s evidence was that he wanted to sell the flat to repay a loan due in Cyprus. No documentary evidence was produced to support that claim.[184]The flat was then put on the market. Darina was actually involved in the sale and was instrumental in introducing a purchaser. She introduced Harrods estate agents. Her evidence, which I accept, was that she had all her instructions from her father and not from Mr Goncharov. That is reflected in an email that she wrote to Mr Tsyb on 25 September 2015. In cross-examination it was suggested to her that she referred to discussions with her father in that email because she knew that there was a dispute about the proceeds and deliberately referred to her father even though she knew that Mr Goncharov was the owner. She denied that and I accept her evidence. I do not think that she would be capable of such calculated conduct, particularly at that time.[185]In due course the flat was sold, and the proceeds frozen by the freezing order paid into a solicitor’s account.[186]So far as Flat 3B is concerned, Asha was placed into solvent liquidation by Mrs Yedina in February 2017. I was told that the flat has now been transferred into her name. She has given the liquidators an indemnity against the company’s liabilities.

The status and ownership of Nichols

[187]This is an important matter for two reasons. First, what Mr Yedin has said about it from time to time, and how he has presented Nichols, goes to the credibility of the evidence of himself (and Mr Goncharov). Second, it was the source of the moneys used to buy Flats 3B and 2B, and if and insofar as that money might fall to be treated as Mr Goncharov’s then that might support the case for the latter’s ownership of 2B.[188]It will be remembered that Nichols had one share, and that it was a bearer share. It started out as Mr Yedin’s company. Mr Goncharov said that in his witness statement, but Mr Yedin did not. The latter’s witness statement simply stated that it was Mr Goncharov’s company, though he accepted that he was the initial owner in his cross-examination. In his cross-examination he said that he transferred the single share to Mr Goncharov in 2001 because he wanted to be involved in politics. This is despite the fact that he had been in politics since about 1998. Then he offered that it was agreed that the profits of Nichols would be split roughly 50/50. His evidence was that he could get information from the bank at any time he chose, demonstrating that he retained a real interest in the company. The thrust of his evidence was that Mr Goncharov was technically the shareholder, and to that extent the owner of the company but he (Mr Yedin) had an interest in it as well. He sought to justify the clear statements as to Mr Goncharov’s ownership contained in his witness statement as being true because Mr Goncharov held the share. I do not accept that evidence. The context of the relevant paragraphs (53 and 54) was an explanation of the funding of the purchase of the Knightsbridge flats. It was designed to give the impression that that funding was provided by a solely-owned Goncharov company, and was in my view deliberately misleading because he knew it was in substance a jointly owned company. He went on to accept that the Tunbridge Wells flat was purchased with Nichols money which fell to be treated as his own, which reinforces the point that Nichols was at least jointly owned and Mr Yedin plainly had an interest.[189]Mr Goncharov’s evidence in chief was also plainly designed to say that he was the sole owner of Nichols, and that since the purchase money for the Knightsbridge flats was Nichols, they were bought with his money. That, again, was deliberately misleading evidence. However, he accepted in cross-examination that the “business” was divided 50/50.[190]During the course of the trial Mr Yedin produced a document headed (after the name of Nichols) a “Certificate of Shareholder”. It is dated 15th January 2001 and signed by Mr Goncharov and Mr Yedin, with Mr Tsyb signing as witness. It says:
“We hereby confirm the following: 1. Mr Oleksii Goncharov start to be the sole bearer Share Certificate of the company Nichols Limited; and 2. The sole Beneficial owner of the company Nichols Limited is Mr Oleksii Goncharov (born on 17 May 1965).”
[191]Mr Tsyb explained that he drafted this document basing it on a prior document prepared by an English solicitor. He did not know why he was asked to prepare it. He did not think about the statement of beneficial ownership, and was not aware of any arrangement to share that beneficial ownership 50/50.[192]Mr Goncharov relied on the genuineness of this document. Although it was (he said) available to him when he made his witness statement, he could not explain why his statement said that he became the owner of Nichols on 1st January 2001 when this document was dated 15th January 2001. He insisted that it was owned beneficially by him even though the profits were split 50/50 with Mr Yedin. He thought that the document had been given to a Cyprus bank. He said that the share was transferred to Mr Yedin at the time the BoS mortgage was being arranged and was re-transferred back to Mr Goncharov once the mortgage moneys were received.[193]Mr Yedin too referred in his witness statement to 1st January 2001 as being the transfer date and was unable to explain why this document bore the 15th January date other than to say that he might have made a mistake. In addition, he too suggested that it was based on a prior English text, probably from an identified English lawyer. He also gave evidence that the share was transferred to him during the mortgage negotiations and transferred back to Mr Goncharov when they were complete (he gave his evidence on this before Mr Goncharov gave his). At one stage he said he had control of Nichols and could sign documents, though Mr Goncharov dealt with business.[194]I do not consider that this document has any evidential force so far as the ownership of Nichols and its funds are concerned. There are a number of problems with accepting it at face value:(a) it was produced late in the action - on Day 9. If it were genuine it has a plain relevance and would have been produced earlier. Mr Verduyn explained that it had been discovered in a file of originals, but he did not say by whom, and no proper evidence as to its discovery was produced.(b) Its wording suggests that it was not based on a prior English draft.(c) It is surprising that no-one could remember why it was produced.(d) The statement of beneficial ownership is plainly wrong if Mr Yedin and Mr Goncharov shared the profits and even more erroneous if Mr Yedin was the owner. It is plain that on their own evidence Mr Goncharov was not the beneficial owner. It is therefore misleading, and I consider it to be deliberately so.(e) Nichols was used as a means of funding the purchase of the Tunbridge Wells flat, which was bought in 2002, over a year after this document. Mr Yedin’s evidence was equivocal as to whether Nichols was just used as a channel or whether he drew on his own money in Nichols - he certainly seemed to suggest the latter. But whichever it was is inconsistent with a complete transfer of beneficial ownership being evidenced by this document.[195]What I consider to be plain is that during the attempts to get a mortgage in 2006 Mr Yedin presented himself as the controlling shareholder of Nichols so that that could be passed on to potential lenders. The evidence for this appears above. So far as it appears in communications from Citilegal, they can only have got that idea from Mr Yedin or from Mr Tsyb acting on his behalf. It was an impression that Mr Yedin was keen to create so that funding could be accounted for and so that he could establish his means. His own evidence about the transfer of the share to him at this time demonstrates that (even though it did not appear in his witness statement).[196]Mr Yedin and Mr Goncharov would have been assisted in their cases had they produced any reliable documentary evidence relating to the ownership of Nichols. However, they have produced not a shred of such evidence other than the January 2001 document. I have already dismissed that document as having any evidential force. There is no other document in the case which goes to the point. It is apparent from the evidence that Mr Yedin, at least, drew on Nichols as and when necessary, and he described it as an “instrument”. It may have done substantial business, but it was also a means by which Mr Yedin, at least, funded foreign transactions and discharged foreign liabilities (such as funding Logistrans for Mrs Yedina’s salary).[197]The overall effect of the evidence about the ownership of Nichols is that it is not a company owned by Mr Goncharov. It is a company whose ownership was presented as being vested in whoever needed to be seen to be the owner at any given moment. It is likely that in 2001 Mr Yedin wished to hide any obvious interest that he had in the company because of his desire not to be seen to be having any business interests, but he did not completely divest himself of ownership. Mr Goncharov never had the whole beneficial ownership of the company.[198]What is more difficult is to ascertain is whether it was a purely Yedin company or whether Mr Goncharov did have some interest in it. I think it more likely that Mr Goncharov did have some interest, which may or may not have been 50%. It may be significant that in 2006 Mr Yedin did not present himself as being the sole shareholder, but merely as being the controlling shareholder, which I consider to be likely (he could call for the share when he wished to have it, and did in 2006). However, I do not think the difference between being a controlling shareholder and being the sole shareholder makes any difference to these proceedings. Mr Yedin was, in my view, at least the former. Of more significance is whose money it was once it had left Nichols to pay for the Knightsbridge flats.[199]The important thing about Nichols is its status as a sort of banker or money transfer vehicle. It had a bank account in Cyprus. It carried out a trade, which generated funds, and may well have been funded in order to effect transfers as well. It obviously had access to substantial funds for a significant period of time. Broad details of funds were given during 2006 in the course of the mortgage applications, but those details almost certainly do not portray the full picture. It had sufficient funds to be able to provide the purchase price of the Knightsbridge flats, which it did. It provided funds to top up the outgoings on the Knightsbridge flats. It funded Mrs Yedina’s salary. According to Mr Goncharov moneys were paid from Nichols to furnish Flat 3B, and to pay Mrs Yedina for finding tenant. Mr Yedin’s evidence was that much of the moneys for the Tunbridge Wells flat came through Nichols. No doubt it provided other moneys as and when required (and able). So it was a company which held funds which were distributed as and when necessary. Mr Yedin was able to draw on those funds, so the pertinent question becomes whether the funds he was drawing on for flat 2B fall be treated as his or Mr Goncharov’s.[200]No records have been produced which enable one to answer this question clearly. From time to time in the evidence witnesses spoke of balances being kept to reflect who had drawn what or (in the case of the alleged loan) how much had been repaid and in what manner. I do not accept that evidence in relation to the loan, but if Nichols was a shared company between Mr Yedin and Mr Goncharov there must have been some documents capable of recording drawings. However, none have been produced. The claimant was told by the defendants during the course of the proceedings that there were no bank statements, and none could now be obtained from the bank, which was in liquidation (though I am not aware that that matter was anything other than an unevidenced assertion). No other form of documentation has been produced. However, Mr Goncharov himself thought it probable that bank statements existed in archived documents. This complete absence of documents is a striking feature of the case. While it may be that Mr Yedin and Mr Goncharov conducted their relationship in an informal manner, there must have been some documents evidencing and recording their transactions (if their evidence about their relationship is correct) and I do not accept that none exist or that proper efforts have been made to find them.

The execution of the Deed

[201]Whatever the position was in relation to the marriage up until March 2008, from that date Mrs Yedina knew, at the very least, that its status was uncertain. On about 9th November 2008 she says she heard from a relative of hers that the relative had attended a christening of a young baby whose father was Alexander Yedin. It turned out to be true that this was the child of Mr Yedin and a lady with whom he had formed a relationship in Kiev. There was a dispute in the evidence as to whether Mrs Yedina had found out before then about the baby (a daughter) and had rung Mr Yedin to congratulate him. I do not find it necessary to decide who is right about that.[202]On or about 27th November 2008 Mr Yedin visited London and stayed at Flat 3B. In the evening the family went out to dinner. Mr Yedin and Darina went ahead. Mrs Yedina followed. It is common ground that there was a discussion at the restaurant at which Mr Yedin’s new relationship and child were disclosed to Darina for the first time. There is a dispute as to how it was disclosed. Mr Yedin’s witness statement strongly suggests that it was a voluntary disclosure made by him to Darina. The evidence of Mrs Yedina and Darina is that the disclosure came more as a result of a challenge by Mrs Yedina who showed Darina photos of Mr Yedin’s new baby on a phone (Mr Yedin’s phone, which Mrs Yedina she had found in the flat and looked at) and told her this was her new sister. This does not matter to the main issues in the case, but I find that the evidence of Mrs Yedina and Darina is to be preferred. I consider Darina to be a reliable witness of fact with a recollection of the facts which is likely (in the circumstances) to be clearer. I also think it was unlikely that Mr Yedin would volunteer this material to Darina in circumstances in which friends were also present (which they were). Mr Yedin reassured Darina that nothing would change as a result of this new relationship but Darina was very upset and left the restaurant.[203]Before Mr Yedin left to go back to the Ukraine he told Darina that he would continue to look after her and her brother and would transfer flats held in the Ukraine into their sole names. At that time and over the period following his return to Ukraine he also reached an agreement with Mrs Yedina that he would transfer a number of properties (which he described in his witness statement as the entire family property) into Mrs Yedina’s ownership. That was an overstatement because, as just stated, two of the properties were to be given to Darina and Denis. Mr Yedin’s case is that this portfolio was to be transferred to her to be held in trust, and the purpose of the transfer was to prevent claims being made by Mr Yedin’s new partner. This is part of the claim that I will have to resolve later in this judgment. Mrs Yedina’s case is that it was agreed that she would acquire properties absolutely in her own right.[204]This agreement was followed through. In the period that followed the following properties were transferred (in addition to those transferred to Darina and Denis):(i) One quarter of the Dacha in Kiev was put in her name.(ii) Three quarters of the interest in the family flat in Kiev (Gorodetsky St) was transferred to her, so she became the sole owner.(iii) The shares in Ross (which held the Tunbridge Wells flat) were transferred into her control (2nd December 2008), so she thereby became effectively the owner of that flat. This was achieved, or recorded, by a Declaration of Ownership executed by Mr Eliades, a Cypriot lawyer, as “Managing Director-Chairman”. It declares Mrs Yedina to be the beneficial owner of the company. The legal effect of this was not investigated or challenged. It was presumably treated as an instruction to the trust company which was holding the shares. The parties to this action have treated it as effective.(iv) The shares in Asha were transferred to Ross (9th February 2009), so Mrs Yedina effectively became the owner of Flat 3B, which was Asha’s sole asset. This was achieved by a short letter from Mr Yedin dated 9th February 2009 addressed to the agents in Curacao for Asha requesting the cancellation of his share certificate and the issue of an equivalent one to Ross, and the issuing of that equivalent.(v) The Moscow flat was transferred into Mrs Yedina’s name in October 2009.[205]One of the Cyprus flats was already in Mrs Yedina’s name (Flat 51). The other was transferred to her in 2013. No evidence was given as to why that was done at that time; I infer it was done to complete the promises given in 2008.[206]In Dubai over the New Year Mr Yedin produced to the children the documents relating to their flat transfers. Mrs Yedina said that Mr Yedin also agreed that Flat 3B should be sold and replaced with a larger flat. In the New Year, in Ukraine, Mr Yedin said he could not afford to do that, and it never happened. However, she said that he told her that he would discharge the mortgage on Flat 3B at the end of the 10 year mortgage term, and that he expected to be able to discharge it by selling Flat 2B and applying the proceeds to that end. I accept that evidence.[207]In January 2009 Mrs Yedina visited Kiev and stayed in the dacha. Mr Yedin’s new partner and child (and the sister of the former) were there as well, so things were obviously awkward. During this time Mr Yedin gave (probably by way of repeating) assurances that he would support Mrs Yedina.[208]In this context it was agreed that Mr Yedin would come to England. He did so on 8th or 9th February 2009. His witness statement said that he came to England to sign a deed to transfer Asha to Mrs Yedina, in order to satisfy Mrs Yedina’s concerns that his new partner and child might make a claim to it. He complained that he was in ill health and he was under pressure from Mrs Yedina who had threatened to speak the media in Ukraine and tell them details of what he described as the scandal, by which I assume he meant his new relationship and child. He maintained this allegation of pressure in cross-examination. Mrs Yedina denied this allegation of pressure. I have no hesitation in rejecting it. It makes little sense. Mr Yedin accepted that his new relationship was not a secret in the Ukraine. He had been an MP for some time, and his new partner was the ex-wife of the Ukrainian boxer Vladimir Klitshchko, and therefore had her own public profile. It was not made clear what scandal Mrs Yedina might disclose. The relationship cannot have been one. It was not apparent what other plausible trouble (to any serious extent) Mrs Yedina could cause. I consider that this allegation was a contrivance designed to boost Mr Yedin’s attacks on the validity of the Deed.[209]Mrs Yedina’s evidence was that Mr Yedin agreed to come to London to put his agreements into effect. I accept that evidence. It is not plausible that he would agree to come to London merely to transfer the shares in Asha. Although it was one of the things which were done when he was in London he would not have needed to come here just to do that. The simple documentation could be done in Kiev or elsewhere, if necessary on the basis of documents sent from London. Indeed on his own evidence he brought a file of documents from Mr Tsyb, which I find may have included undated documentation. It is not apparent that Mr Yedin himself signed anything in this connection. He must have been expecting to do more than transfer Asha and Mrs Yedina’s evidence is plausible and, I find, correct.[210]In order to pursue her goal of formalising Mr Yedin’s promises Mrs Yedina went to Citilegal for assistance. On 2nd December 2008 Ms Novikova wrote to her recording some instructions and pointing out some of the steps necessary to safeguard her position, including seeking maintenance of £25,000 per quarter. She prepared a draft deed which she sent to Mrs Yedina on 11th December and which had the following elements:(a) It was headed “Deed of Financial Provision” and ran to 5 pages.(b) The parties were Mr and Mrs Yedin, and Nichols, which was joined for the purposes of covenanting to pay some outgoings.(c) It recited that the parties were “contemplating divorce” and that Mrs Yedina was the beneficial owner of Ross.(d) Clause 2.1 recited an agreement to effect a permanent division of assets as if there were a divorce on a clean break basis.(e) Asha was to be transferred to Ross and Mr Yedin and Nichols were to pay the outgoings on Flat 3B. Nichols was to discharge the mortgage at the end of the term.(f) Mrs Yedina would look for a new London flat, and if he approved it Mr Yedin would provide the purchase price. The Tunbridge Wells flat would be sold and the proceeds used to contribute to the new London flat, which would be owned by Mrs Yedina personally or through Ross.(g) It provided for the transfers of the other properties which I have identified above.(h) It provided for maintenance to be paid by Mr Yedin to Mrs Yedina in an unspecified amount (there was a blank in square brackets in the draft) and for Mr Yedin to procure that Nichols would pay the outgoings on the Tunbridge Wells flat and on Flat 3B.[211]Ms Novikova also wrote to Mr Yedin at about the same time, proposing how to transfer Asha’s shares and indicating agents’ invoices for the administration of Asha and Ross which had to be paid.[212]As appears above, Mr Yedin came to London on 8th or 9th February. The parties do not agree which date it was, but that does not matter. Mr Yedin’s initial evidence was that there were two meetings at Citilegal, one on 9th and one on 10th February. However, he became less certain about that in his cross-examination; he said that the two days he was here (9th and 10th) blended into one. His evidence was that on 9th February he and Mrs Yedina went to Citilegal’s offices, where he was invited to sign a “document of financial provision of many pages”. He did not understand its content and refused to sign. He claims that Mrs Yedina subjected him to “psychological pressure” and scolded and reproached him, saying all the property would be retained for the children. When he refused to sign she left the meeting. In cross-examination he said he refused to sign it because saw the words “financial provision” in it, and did not read the rest of it. He knew it was a document relating to financial provision.[213]According to Mr Yedin, that evening they had an amicable discussion in which Mrs Yedina said she needed assurances and Mr Yedin said that he intended to support her until she met someone else. The next day he attended Citilegal’s offices again and he was handed a new document to sign. His witness statement deals with this meeting fairly shortly. He noted that the heading was “Arrangement about English Property”, and paragraph 71 as originally drafted went on to say:
“I must also point out that I did not understand what “Arrangement” meant in English. The translation of “Arrangement” into Russian implies an “agreement”
. Therefore I thought the Arrangement was a statement of my intentions rather than a legally binding document. I did not understand the nature of that document and I thought that, being a “letter of intent”, it did not impose any responsibility on me.”[214]In oral evidence in chief he amended the word “Arrangement” to “Deed” in paragraph 71, and the word “agreement” to “action or business”. His witness statement goes on to allege that the financial provision was deliberately hidden from one of its clauses, but does not go on to say how. The thrust of his evidence on the rest of this meeting is that he was stressed and ill, and wanted to get it over with. He reviewed the document briefly, but no-one translated it for him so it was difficult for him to understand its significance properly. He asked what the purpose of the document was and Mrs Yedina said it was for her comfort and to make her feel secure. He denied giving an instruction to take Nichols out of the agreement. He was not sure whether Ms Novikova was at the meeting, but he remembered himself, Mr Simms and Mrs Yedina being there; he did not remember Ms Novikova explaining the agreement to Mrs Yedina. He supplemented the evidence in his witness statement with evidence about particular conversations (of some materiality if the evidence is accurate) that he had with Mr Simms after Mrs Yedina had left the meeting (which she did, before he signed, uttering unpleasant remarks to him). He accepted that Darina was at the meeting (though that did not appear in his witness statement). Significantly, he accepted he had the intention that he would pay off the mortgage on Flat 3B and that he said to Mr Simms that if he did not do that then the Moscow flat would be left for Mrs Yedina as a guarantee (his word).[215]Underpinning his evidence about how he conducted himself at this meeting, and what he understood, was Mr Yedin’s evidence about his mental state. I deal with this in more detail below, but for present purposes it is sufficient to record here that his case was that his mental state was “poor”, and affected by the political situation in the Ukraine and the fact that his daughter in the Ukraine was ill, to an extent which meant he did not feel himself mentally capable during the visit, though he felt he had no alternative (witness statement paragraph 76). I set out in more detail below the evidence he relied on in this respect and my findings in relation to it, which are relevant to a number of Mr Yedin’s defences.[216]Mrs Yedina’s case on the meeting is similar in some respects but (not surprisingly) crucially different in others. She says (as appears above) that she had left a draft agreement with Mr Yedin in January. She was keen to get an agreement in England to embody the assurances of support, and property transfers, that had already been given by Mr Yedin. Assuming that there had been a divorce in the Ukraine (which she did not accept) it was too late to apply for financial provision there and in any event she was worried about her husband being able to exercise a corrupt influence over the courts there. He agreed to travel to London to give effect to his expressed intentions, and he came on 8th February for that purpose. He agreed to sign, and did sign, documents transferring Asha (it is not clear what documents these can have been - they were not in evidence) and they both attended Citilegal’s office, with Darina, at 11am on 10th February 2009.[217]Mrs Yedina said that prior to the meeting she explained to Ms Novikova that Mr Yedin did not want Nichols to be a party to the deed. At the office they met Ms Novikova and Mr Simms. A further draft was produced, which was translated for her, in Mr Yedin’s presence, by Ms Novikova. Like her, Mr Yedin listened to the translation and to explanations of each clause given by Ms Novikova. Mr Yedin objected, saying that he was prepared to sign only a short document, and he specifically said that the word “approximately” should be added before a maintenance figure which should be £220,000 per annum. Although this was less than the figure of £20,000 per month which he previously agreed to, Mrs Yedina agreed to it. Mr Yedin agreed it should be index-linked. Mrs Yedina also agreed to the insertion of the word “approximately” even though she was warned by Ms Novikova that that left the term uncertain, because she did not want to be difficult. The document had not been signed within an hour, and at that point Mrs Yedina felt emotional and left, saying that she would accept any further reasonable amendments proposed by Mr Yedin. She denied exerting any pressure on Mr Yedin, who appeared normal and able to understand what was happening and what was proposed.[218]Mr Simms’ account was largely supportive of Mrs Yedina’s. It contains a level of detail which is a bit surprising bearing in mind the length of time that has elapsed and the absence of contemporaneous documents, but much of it rings true. He explains how he drafted the December 2008 document (above) on the basis of what was required at the time, but in January he was told that the Ukraine properties had been dealt with so it was now necessary to focus on the English properties and Mrs Yedina’s maintenance. He produced a much shorter document in January and sent it to Mrs Yedina, via Ms Novikova. It still contained Nichols as a party and contained a figure of £20,000 per month (index-linked) by way of maintenance.[219]Mr Simms said there was no prior meeting on 9th Febuary. He was quite clear that only one meeting took place. The day before the meeting on 10th February he was told by Ms Novikova that Mr Yedin was not prepared to have Nichols as a party, and he carried out amendments to remove it. This further draft was handed round and translated by Ms Novikova. Mr Yedin was confident and self-assured, and Mrs Yedina hardly said anything at the meeting. Mr Yedin said he wanted a still shorter agreement dealing with only Flat 3B, outgoings and maintenance. Mr Simms shortened it further (but only a little). Mr Yedin proposed further minor changes, and there was a further discussion between him and Mrs Yedina about this. She then left the meeting saying she would agree whatever Mr Yedin required. When she had gone Mr Yedin proposed that the maintenance figure should be changed from £20,000 per month to “approximately £220,000” per annum, and this was accepted despite Mr Simms’ (not Ms Novikova) saying using the word “approximately” was “unusual” (Mr Simms’ word). Mr Simms also thought that he gave effect to other minor requests of Mr Yedin, but he could not remember what they were. So far as Mr Yedin’s understanding was concerned, Mr Yedin read the agreement for himself and did not need assistance with the English in it. He was a sophisticated businessman and politician, with a good working knowledge of English and Mrs Yedina seemed slightly in awe of him. No strain or illness was apparent in Mr Yedin; he appeared to be “full of beans”. The more limited content of the deed when compared with the early draft was explained by the fact that other aspects of the arrangements between Mr Yedin and Mrs Yedina had been dealt with, leaving only the embodiment of those matters that were addressed in the Deed.[220]Darina was at the meeting and gave evidence about it which tended to support the accounts of her mother and Mr Simms. She was not concerned with the details of the agreement but understood before she went that her father had agreed to pay the outgoings on Flat 3B and to discharge the mortgage when it fell due for repayment; and her mother was to receive regular maintenance payments. At the meeting she was given a draft, and her father said it was too long and should be simple and no more than two pages. He asked for various amendments, which were agreed. Mrs Yedina did little talking, and most of the conversation was in English between Mr Yedin, Ms Novikova and Mr Simms. Her father had no difficulty in understanding and discussing the draft agreement, and he did not complain about being unwell. Her mother was upset and left the meeting (not uttering harsh words) saying she would agree to any amendment that her father was talking about, which at the time involved the amount of maintenance. Mrs Yedina’s proposal of £20,000 per month was rejected by him; he required £220,000 per annum, and the word “approximately”. In her cross-examination she put this the other way round - that he wanted to substitute £20,000 for £200,000 - but I find that she simply mis-expressed herself in relation to this. She was not challenged about her evidence of the introduction of “approximately”.[221]It is common ground that at the end of the meeting Mr Yedin executed two copies of the Deed (witnessed by Mr Simms) and the copies were given to Darina to take to her mother, who executed them in Darina’s presence. Mr Yedin was then given one original.[222]There is one additional contemporaneous document to which it is now convenient to refer. It is a further draft of the Deed, of uncertain date. It must have been done after Mr Simms was told that the foreign properties had been dealt with, but before Asha was transferred, because the former have been omitted but the latter transfer is still provided for. The draft contains the following provisions, (it is unnecessary to set them out verbatim).(a) Nichols is still expressed to be a party, along with the Yedins.(b) Clause 1 contains an agreement by Mr Yedin to transfer Asha to Ross.(c) Clause 1.2 is virtually the same as clause 1 of the Deed, save that Nichols is referred to as having paid the mortgage payments hitherto. Mrs Yedina records her agreement to be satisfied if Nichols continues to pay the outgoings, and Nichols joined with Mr Yedin in promising to repay the BoS mortgage .(d) Clause2.1 has a figure of £20,000 per month for maintenance where the Deed provides for “approximately £220,000 per annum”.(e) Clause2.2 provides that Mr Yedin will procure that Nichols will pay the outgoings, whereas the final version provides for Mr Yedin to do that himself.(f) There is a clause 3.1 which binds Nichols into the agreement.[223]Apart from those matters this draft is word for word the same as the final version. It therefore reflects three differences - the agreement to transfer Asha, the removal of Nichols and the change in the amount of the maintenance. It is likely to pre-date the meeting if Mr Simms is correct in saying that he was told to remove Nichols, and did remove it, before the meeting. On the other hand, apart from those amendments it contains no other alterations other than the amount of maintenance, thereby contradicting Mr Simms’ evidence that other amendments were carried out at the meeting.[224]Before making findings about the disputed evidence on this issue it is necessary to deal with the question of Mr Yedin’s health, because it plays such an important part of Mr Yedin’s case about his understanding and ability to cope with the transaction what was proposed to him.

Mr Yedin’s health in February 2009

[225]Mr Yedin maintained the case that he was suffering from what I will summarise as psychological disabilities in February 2009. He was concerned about the political situation in the Ukraine and had been subject to verbal and physical pressure there because of his activities as an MP. On one occasion he had green paint thrown over him. He claims to have been suffering from post-traumatic stress, psychotic disorders and frequent severe depressive episodes. These are said to have affected his ability to understand the effect and content of the Deed. They also form part of the background to his claim that he was somehow pressured by his wife, because, if true, they would make him more vulnerable.[226]As well as his own assertions as to his mental state Mr Yedin adduced some medical evidence. This did not take the form of expert evidence from an expert witness. It took the form of the production of some hospital records and a form of certificate from a medical centre. They are said by Mrs Yedina to have been forged by or for Mr Yedin, so I have to deal with that allegation as well as to their evidential weight if they are genuine.[227]The hospital records come from a clinic known as the Boris Clinic. This is apparently a private clinic. Mr Yedin at first denied that he had a commercial relationship with the clinic, though he knew a lot of people there. Much later in his evidence he revealed, with apparent reluctance, that he held an “indirect” interest in it through a company. He put that interest at 10%. This denial and retraction does significant damage to Mr Yedin’s credibility, but it does not mean he procured non-genuine medical records.[228]There is no evidence of how the Boris Clinic records were produced. In form they are printed forms on a “Form No. 028/o” (according to a box in the top right-hand corner) approved by the Ministry of Health in the Ukraine and dated (as a form) 14th February 2012. The main section is headed “Consultative opinion of neurologist” with details of the patient (Mr Yedin) underneath, including his EMR (Electronic Medical Record) number. The forms all have an outpatient record Number of 17442 with the date 25.09.2008 next to it. To the right of that is another date and time. The inference is that this is the date and time of the entry of the details that appear below or (less likely) the date and time of the consultation. The name of the doctor appears below that.[229]That is in the top third of the form. The rest of the form contains medical details - measurements of the patient and standard readings, then sections for Complaints, past history, Life history, Allergic history, Objective examination findings, “Ds” (presumably short for “diagnosis” - that would make sense in the context of the information that follows), Treatment, Prescription and Insurance History.[230]There are 4 such records, dated 22nd January 2009, 6th February 2009, 24th March 2009 and 29th May 2009. They record various things, varying from one to the other. There is nothing on the face of any of them to indicate that they are anything other than genuine. It is unsatisfactory to have no evidence of how they were produced, particularly since the challenge to their genuineness was made at the PTR for this case, which gave enough time to put in such evidence. The only evidence about their source came from Mr Yedin himself who said that he asked for these reports in the context of the litigation and was provided with them. The sensible inference appearing from their face, absent a realistic challenge on validity, is that they are a printout out of a computerised record on a form which, as a computer form, dates from 2012.[231]In support of his averment that these forms are not genuine Mr Sheehan relies on the following:(a) The date of the outpatient record on each of them (25th September 2008) predates the date on which Mr Yedin said in cross-examination he first sought medical attention for his conditions which was January 2009. However, Mr Yedin was not categorical in that date and in any event may have had other treatment earlier. I do not regard this as a significant point in this context.(b) The variation in the conditions from which Mr Yedin is said to have been suffering. There is indeed such a variation (as will appear shortly) but if these printouts were forged to bolster his case at this trial one would have expected the forger to do better.(c) The fact that the recorded creation of the record or date of consultation (whichever the 2009 dates might be) pre-dates the date of the form. I find that the more likely explanation of this is that the form, as a blank pro forma form, dates from 2012 and the computer uses it to reproduce the medical data it holds in its database.(d) Mr Yedin’s denial of a commercial interest in the clinic and his retraction of it. I have made remarks about that above.[232]Mr Yedin bore the burden of proving these reports. He might have done so by a witness statement from the clinic, and has not done so. His only evidence is that he asked the clinic for them and the clinic produced them. That is thin evidence in the circumstances, but the counter-case is that they are not genuine ie they are a contrivance. That is a significant case to make out, and I consider that Mr Sheehan has failed to make it out. The documents on their face bear no sign of such a contrivance. They contain the sort of material one would expect in a medical report of a consultation, and the recommended treatment. I find they are genuine.[233]The other report is a certificate from the European Headache Federation. The first Boris Clinic report indicates that he had been referred there. This certificate, dated 22nd February 2016, was apparently acquired shortly after the commencement of these proceedings. Its relevant provisions read (in one of the two translations in the trial bundle - the differences in translation are mostly not material): “This is to certify that Mr Yedin, born in 1960, underwent monitoring in this Centre from 29.01.2009 till 15.07.2009. Ds: post-traumatic stress disorder. Acute depressive episode with psychotic disorders. During this period the subject was incapacitated. [The alternative translation uses the word "disabled".] Currently the subject is monitored for tinnitus, 2nd degree arterial hypertension, crisis course [hypertensive crisis in the other translation] dyssomnic disorder."

During this period the subject was incapacitated. [The alternative translation uses the word "disabled".]

[234]Mr Sheehan again challenges the validity of this document, and again Mr Yedin has not produced any positive evidence in support of its validity. It is a strange document, and on this occasion I would probably be minded to conclude that Mr Yedin has not established its validity. However, as will appear, since its evidential value is insignificant I do not need to make a strong finding against Mr Yedin.[235]I therefore turn to the question of the evidential value of all that material for the purposes of Mr Yedin's case as to his mental state in February 2009. The Boris Clinic medical reports record a variety of complaints and diagnoses. They are as follows: “Report for 22.01.2009 Complaints – pain in the back of the head and earache. Mild pain in the epigastric. Decreased concentration of attention. Diagnosis – vegetovascular distonia; pronounced headache. [This is the report which recommended a reference to the Headache Centre.] Report for 06.02.2009: Complaints – persistent headache, floaters, apathy, poor sleep. Diagnosis – arterial hypertension, depressive condition. Report for 24.03.2009: Complaints – sore throat, headache, overall indisposition, fatigue, tinnitus. Diagnosis – acute respiratory viral infection. Acute bronchitis. Report for 29.05.2009: Complaints – headache, vertigo, tinnitus. "Compared with previous visit, symptoms are less intensive but poor sleep, anxiety, certain depression persists." Diagnosis – 2nd degree arterial hypertension. Asthenic and depressive condition." Report for 06.02.2009: Report for 24.03.2009: Report for 29.05.2009: Diagnosis – 2nd degree arterial hypertension. Asthenic and depressive condition."

Report for 29.05.2009:

[236]It is not possible, on the basis of this material, for this court, unassisted by any expert evidence, to conclude that Mr Yedin was suffering from the degree of disability or incapacity which he relies on. If accurate, they show a degree of depression, but they also show a number of other conditions. One does not even get the impression that his mental difficulties were particularly severe. In any event, it would not be right for this court to come to a conclusion about the degree of mental disability that they show without some expert assistance (even though it is obvious, with the aid of a medical dictionary, that some of the conditions with which he was diagnosed are highly unlikely to have had an effect on his mental condition).[237]The report from the Headache Centre is of no real evidential value. There is no evidence as to the status of this Centre, and no proper medical evidence which enables this court to assess what the short expressions of the diagnosis really meant in the real practical world in terms of the effect on Mr Yedin's capacities. It is true that the certificate records that Mr Yedin was "incapacitated" or "disabled" but I do not regard that as good evidence of his real mental state, and in any event insofar as it might be thought to record his state it is actually falsified by his own evidence that during this entire period he did not take any time off work. He was therefore, apparently, not disabled from conducting his activities as an MP, and he did not consider himself to be disabled from being able to fly to this country so that he could negotiate with those representing his wife even if he thought he was negotiating a document encapsulating a statement of intent rather than contractual engagement.[238]In the light of the weakness of that evidence, and in the light of the evidence of those who participated in the meeting and who gave evidence for Mrs Yedina, whose evidence I prefer to Mr Yedin's, I find that while Mr Yedin might have been suffering from headaches, and while he may well have been suffering from a degree of stress arising from his activities as an MP (and possibly other political activities in the Ukraine), he was perfectly able to function on a commercial level and on a practical day-to-day level. He appeared to be able to form proper judgments on the matters before him, and I find that he was. Furthermore, I find that his evidence to the contrary has been contrived for the purposes of this litigation. I do not accept that he believed the truth of what he was saying in this respect, and find him to have been lying about it.[239]For the sake of completeness I would deal with a small point raised by Mr Yedin. He said that his new daughter in Kiev was ill and he was affected by his worrying about that. He produced a Boris clinic report about that (before he produced the clinic’s reports into himself). They said that she was suffering from a cold and ear infection. He would obviously be worried about that as a parent. However, I find that his worry was not sufficiently great to affect his ability to engage with and understand what it was proposed that he should do when he was considering the Deed.

Findings about the execution of the Deed

[240]In making these findings I bear in mind that it is not surprising that details of the sequence of events leading up to and at the meeting are not wholly consistent or not wholly clear, after this remove of time. Discrepancies are not necessarily a badge of deliberately false evidence. With so few contemporaneous documents to rely on I base my findings as to what happened on the inherent probability or improbability of the various versions of events, and on the demeanour of witnesses (which has to be handled with particular care in the case of foreign witnesses and the use of interpreters). I also rely on the evidence of Darina as a kind of touchstone, since I regard her as an inherently reliable witness with no particular axe to grind.[241]On that basis of the above, I make the following findings about the meeting:(a) The accounts of Mrs Yedina, Mr Simms and Darina are generally to be preferred to that of Mr Yedin. Mr Simms’ sequencing of the drafts cannot easily be fitted in with three currently available versions of the document, but that is likely to be because of an understandable failure of recollection and not fabrication.(b) Mr Yedin was present when Ms Novikova translated the Deed to Mrs Yedina and was able to hear it. He is likely to have listened to it, to have paid attention and to have understood it. The translation was accurate.(c) Mr Yedin was able to read it and understand the drafts and the final Deed for himself. This is demonstrated most clearly by the amendment that he required to the maintenance figure and the addition of the word “approximately”, as I find he required. It is also demonstrated (to a lesser extent) by his insistence that Nichols be removed from the document. But in any event I accept the evidence to the effect that he appeared to understand the document and its effect, and actually did so.(d) I reject the evidence that he thought he was signing merely some declaration of intent. Paragraph 71 of his statement, even as amended, indicates that he considered he was signing something with some legal force. He would not have flown all the way from Ukraine just just to sign an indication of intent and to transfer Asha.(e) He gave no appearance of being ill. He was forceful and assertive in the meeting. Mrs Yedina was not, and did indeed leave the meeting because she was upset, and said that she would accept whatever Mr Yedin wanted, either expressly subject to a requirement of reasonableness or impliedly so. He may have been under stress, or subject to depression and headaches, but not so as to disable him in any material way from participating in the meeting in a meaningful and commercial manner.(f) The document was, as a matter of fact, tying up those bits of the preceding agreement between Mr and Mrs Yedin that had by then not been implemented. In implementing it Mr Yedin was dutifully carrying out his assertions that he would do those things and would provide for Mrs Yedina and his family.[242]In reaching these findings I have borne in mind the absence of Ms Novikova as a material witness whose absence has not been explained. I have considered whether that absence would justify the drawing of adverse inferences so far as Mrs Yedina’s case on the meeting is concerned. It is a surprising feature of the case, but bearing in mind the nature and strength of the the evidence given by Mrs Yedina’s three witnesses (including herself) I do not consider that any possible adverse inference would be strong enough to outweigh that evidence.

Events subsequent to and relating to the Deed

[243]These do not need much exposition. Mr Yedin started to default on his obligations to pay maintenance more or less immediately, though Mrs Yedina still had the income from Logistrans. In 2009 Mrs Yedina went to solicitors Burt Brill to have her position considered. She did not claim to be divorced already. She did not mention the deed, according to the attendance note. Mr Verduyn relied on that as evidence that she did not regard it as binding. It is indeed odd behaviour, but I do not think that it evidences that. I consider that it shows she was probably manoeuvring, and while this does not reflect well on her as a person given to open dealings, it does not in my view affect the credibility of her version of events in relation to the Deed.[244]As appears above, in 2015 Mr Yedin began to propose selling Flat 2B. In 2014 Mrs Yedina was told by the owner of Logistrans that he was not receiving moneys from Mr Yedin any more and that he was going to cease to employ her. In due course she was dismissed and her remuneration was paid up to the end of the 2014/2015 tax year. All further financial support to her ceased in 2015, and by then arrears were building up on the outgoings on Flat 3B. Mr Yedin indicated that he would not repay the mortgage on Flat 3B at the end of the mortgage term.[245]All these acts are said to be a repudiation of the Deed if the Deed’s obligations applied at the time. Mr Verduyn did not seem to dispute that if the breaches are made out as breaches then there was a repudiation.

The ownership of Skelling, Flat 2B and Skelling’s funds

[246]With all that background I now turn to the ownership of Skelling. I find that Mr Yedin was and is the beneficial owner of, and controller of, Skelling.[247]I reach this conclusion on the basis of what actually happened in 2006 and the paucity, unreliability and implausibility of the evidence in support of the contrary case in favour of Mr Goncharov’s ownership.[248]It is, of course, the case that Mr Goncharov could use his ownership of the shares in Skelling as the starting point. The documents show that Mr Yedin transferred the shares to him in February 2007. However, in the light of the way in which Mr Yedin’s assets and interests were held in whatever names it suited him to have them held (see above) that transfer and the current share ownership of Mr Goncharov is of little significance by itself. It must be remembered that this transfer was not said to effect a change in the beneficial ownership. It is Mr Yedin’s and Mr Goncharov’s cases that it brought the legal ownership into line with the previous beneficial ownership. It is therefore necessary to establish the evidence in favour of that preceding beneficial ownership.[249]The whole of the documentary evidence surrounding the purchase of flat 3B is completely contrary to Mr Yedin’s case. There is not a single document which in any way reflects it, and a large number of documents reflecting the contrary. Banks were told that Mr Yedin was the beneficial owner; Mr Yedin gave guarantees. I do not need to repeat the content of the contemporaneous documents which I have set out above.[250]I find that all that reflects what Mr Simms was told. Mr Yedin sought to say that Citilegal and Mr Simms was told that Mr Goncharov was to be the purchaser of Flat 2B, and that he advised that it be not passed on to lenders. I reject that evidence. While it is plain that not all Citilegal’s documents have survived, there is still no hint in those that have survived that anyone other than Mr Yedin was going to be the purchaser of both flats. As I have recorded, Mr Yedin even went so far as to say (in cross-examination, but not in chief) that Citilegal advised him that he should purport to be the purchaser of both flats (and Mr Goncharov said something similar). I reject that suggestion. It would make Citilegal complicit in a serious deceit for no particular reason. It is not without significance that this point was not made in his original witness statement. Furthermore, this was never put to Mr Simms. No particularly sensible reason can be advanced in favour of it. If anything, having a purchaser who was not a PEP (Mr Goncharov) might have made matters easier, at least for him. I do not accept that either Mr Tsyb or Mr Zevlever referred to Mr Goncharov. At the time they were always presented, and presented themselves, as acting in the interests of Mr Yedin.[251]That coincides with the evidence of Mrs Yedina who was always clear as to who the purchaser of Flat 2B was to be and what its purpose was - a potential future home for Darina and Denis. Darina (whose evidence I generally find credible) gave evidence of her understanding to the same effect. Contemporaneous documents (referred to above) are consistent with that. That is consistent only with Mr Yedin having the beneficial ownership of the flat through Skelling. It is not without significance that at one stage in his cross-examination Mr Yedin said that there was an original plan to buy two flats (albeit the second one was a small one). I think that at this point the mask slipped. It is more likely that he planned to buy the two Knightsbridge flats at all times.[252]Ranged against this large amount of incontrovertible or otherwise credible evidence is the evidence of Mr Yedin, Mr Goncharov and their three supporting witnesses. This is oral evidence only with no documentary support at all. If there are documents involving them (and particularly Mr Tsyb) they are contrary to Mr Yedin’s case. Those witnesses are unsatisfactory witnesses in their own various ways, which I have dealt with above. Mr Tsyb’s evidence about hearing conversations about the flats was a little too convenient. I would not accept any of this evidence without corroboration, and there simply is none.[253]One of the difficulties with the Yedin/Goncharov case is that no plausible reason has been put forward for having Mr Yedin front a purchase for him much less to do it and keep so quiet about it. It was suggested in evidence that Mr Goncharov would find it hard to get a mortgage because he had no property here and no credit history. However, Mr Yedin had no credit history either, and his properties here were purchased in the names of companies. As already observed Mr Yedin had the additional disadvantage of being a PEP, which came close to posing a complete obstacle to a loan. It could hardly have genuinely been thought that Mr Goncharov would find it any more difficult; in fact, he might have been the solution to that problem so far as Flat 2B was concerned. It was also suggested that Mr Goncharov could not visit this country, but there was no good reason why that should be the case. His own evidence was that he made an application for a visa but it took too long for his liking and he abandoned his application. Whether or not that is true, there is no apparent reason why he could not have got a visa had he wanted one; and in any event it was also not apparent why his not being able to come here was an obstacle to his being identified as a purchaser.[254]There are one or two other bits of evidence which are inconsistent with Mrs Yedina’s case. There is the letter she wrote in 2015 when she heard that Flat 2B was to be sold. However, that does not support the case that Mr Yedin had no interest in the flat; on one possible basis of that letter he had at least a half share, though of course that is no support for the case that he owned it all. However, whatever the thought processes behind that letter, it has little weight in the scales when it comes to opposing the great weight of evidence in favour of Mr Yedin owning Flat 2B and Skelling.[255]At the heart of the Yedin/Goncharov case as to ownership are two things. The first is their agreement about it. The quality of their evidence is such that I would not accept this evidence by itself, particularly when placed against what was said and done in the course of the purchase and the mortgage applications.[256]The second is a claim that it was Mr Goncharov’s money that was used to purchase both flats pending the bank mortgages. If that had been demonstrated things might well have been different (though not necessarily so). However, it has not been demonstrated. It has been merely a matter of assertion. It is clear enough that the funds actually came from Nichols. That would not necessarily mean that it should not be treated as Mr Goncharov’s money. The claimant’s case, after all, is that the Nichols money fell to be treated as Mr Yedin’s. All his statements and acts in 2006 were to the effect that they were his moneys. Bearing in mind how Nichols was used and viewed by Mr Yedin and Mr Goncharov, it might have been possible for Mr Goncharov to have produced documentation, consistent with his case, showing that the moneys flowing from Nichols on the occasion of the purchase fell to be treated as his drawings, or moneys to which he was otherwise entitled. Neither he nor Mr Yedin have produced any evidence at all going to that point. I do not accept that such evidence does not exist in some form - bank statements, some form of inter partes accounting records of the kind that witnesses suggested did exist, or perhaps in other forms. I have already observed that even though any relationship of Mr Goncharov and Mr Yedin concerning Nichols was informal, it is impossible to accept that there was no record of their dealings.[257]That means, first, that that particular type of theoretically useful evidence has not been deployed by the defendants in order to meet the claimant’s case, leaving nothing of any weight to counterbalance it. But second, it also means that I should (as invited by Mr Sheehan) draw an adverse to the defendants from their non-production of any evidence of this nature. Its non-production stems from the fact that it does not exist and never existed. Had the defendants been correct in their case some such documentation would have existed. From this one infers that the defendants’ case is false.[258]I do not ignore the existence of the loan agreement as being a piece of evidence which might have been capable of supporting the claimant’s case. It would have made sense if moneys paid by Nichols could be seen to have been drawings (or other entitlements) of Mr Goncharov, so that he should be treated as having drawn the money personally, lent it to Mr Yedin so that he could purchase flat 3B, and then been repaid it by February 2007. However, the problems with the loan agreement which I have outlined above mean that this piece of evidence is not available to the defendants as a weapon of any significance.[259]The evidence as to how the rent from Flat 2B was used over the years is some evidence which supports the claimant’s case, and has a little weight. Had Mr Yedin and Mr Goncharov been more credible in their evidence of their mutual dealings they might have been able to establish that there was a good explanation consistent with their case, but I consider that they have not established a sufficiently good explanation of this factor which supports their case. Nor have they adduced any evidence which shows any real participation by Mr Goncharov in the running and letting of Flat 2B in the period between its acquisition and the plans to sell.[260]Weighing all this evidence, I have come to the conclusion, and find, that Skelling was effectively Mr Yedin’s company. It was the vehicle through which Mr Yedin decided he wanted to buy one of the two flats. Mr Goncharov had no interest in it. His purported interest has been contrived for the purposes of resisting claims that Mrs Yedina might have to it.[261]It is next necessary to decide whether Skelling held the flat, and then proceeds of sale of the flat, as nominee for Mr Yedin or in its own right. Mr Sheehan’s first case is the former. I reject that case. There is no evidence for it. The only material relied on by Mr Sheehan was that Skelling was the vehicle chosen for the acquisition of the flat, it had no other purpose, and its sole director after the resignation of Mr Simms was Mr Tsyb who admitted he was a nominee. All those facts are true, but they do not justify a finding of pure nomineeship. They are just as consistent with the beneficial interest being in the company with Mr Yedin owning his interest through his ownership of the shares. That is almost certainly how Mr Yedin operated in relation to his business interests. There is no evidence of pure nomineeship.

The validity of the Deed

[262]Resistance to the enforcement of the deed came in the form of a range of averments about the invalidity or unenforceability of the Deed. The findings of fact that I have already made mean that I will be able at this stage to deal with them briefly. They were as follows.

Non est factum

[263]I can take the essence of this claim from the leading case of Saunders v Anglia Building Society [1971] AC 1004. It is encapsulated in the following extracts from the speech of Lord Reid:
“The plea of non est factum obviously applies when the person sought to be held liable did not in fact sign the document. But at least since the sixteenth century it has also been held to apply in certain cases so as to enable a person who in fact signed a document to say that it is not his deed. Obviously any such extension must be kept within narrow limits if it is not to shake the confidence of those who habitually and rightly rely on signatures when there is no obvious reason to doubt their validity. Originally this extension appears to have been made in favour of those who were unable to read owing to blindness or illiteracy and who therefore had to trust someone to tell them what they were signing. I think it must also apply in favour of those who are permanently or temporarily unable through no fault of their own to have without explanation any real understanding of the purport of a particular document, whether that be from defective education, illness or innate incapacity. The plea cannot be available to anyone who was content to sign without taking the trouble to try to find out at least the general effect of the document. Many people do frequently sign documents put before them for signature by their solicitor or other trusted advisers without making any inquiry as to their purpose or effect. But the essence of the plea non est factum is that the person signing believed that the document he signed had one character or one effect whereas in fact its character or effect was quite different. He could not have such a belief unless he had taken steps or been given information which gave him some grounds for his belief. The amount of information he must have and the sufficiency of the particularity of his belief must depend on the circumstances of each case. Further, the plea cannot be available to a person whose mistake was really a mistake as to the legal effect of the document, whether that was his own mistake or that of his adviser. That has always been the law and in this branch of the law at least I see no reason for any change.”
[264]The key elements for present purposes are the following:(a) The belief of the signer that the person is signing a document of one character or effect whereas its character and effect were quite different.(b) The need for some sort of disability which gives rise to that state of mind.(c) The plea cannot be invoked by someone who does not take the trouble to find out at least the general effect of the document. Mr Yedin fails under all three heads. On the basis of the evidence and findings set out above in relation to the circumstances of the execution of this document, I find that Mr Yedin did know the sort of document he was signing. He knew what financial provision for his wife meant because he did not like that heading on the previous document. Although the final draft did not bear that heading the change was not done so as to be misleading. He was able to understand the translation of the document provided by Ms Novikova, and therefore to understand its effect. He read it, and understood it sufficiently to take issue with at least the periodic maintenance figure. He did not think it was merely a statement of intention. I find he understood its nature; indeed he understood its contents too.[265]The disability question does not arise in this case. Unfamiliarity with language may amount to a disability for these purposes, but I find that Mr Yedin had, and demonstrated, sufficiently competent English so as to be able to understand what he was signing, especially bearing in mind the preceding translation which he was able to hear. Nor did his medical (mental) condition have any relevant impact on his ability to understand. I have made findings about this above. There is no evidence that his mental state was sufficient to disable him in any material respect from understanding what he was being asked to do. Whatever he was suffering from, and whatever its degree, it was not sufficient to do that.[266]Point (c) does not arise in this case. On the facts Mr Yedin knew what he was signing. I consider that Mr Yedin was not the sort of person who would ever sign anything without understanding what he was being asked to sign.

Unduly onerous terms

[267]Under this head Mr Verduyn invokes some principles applicable to standard form terms which have unusually onerous terms within them. He relies on Chitty on Contracts 32nd Edition at paragraph 13-0015: “Onerous or unusual terms. Although the party receiving the document knows it contains conditions, if the particular condition relied on is one which is a particularly onerous or unusual term, or is one which involves the abrogation of a right given by statute, the party tendering the document must show that it has been brought fairly and reasonably to the other’s attention."[268]That passage occurs within the context of a section headed "Standard Form Contracts". That hardly describes the Deed. There is apparently a debate in the authorities as to whether or not the principle can ever apply to a signed contract – see e.g. Do Buy 95 Ltd v National Westminster Bank plc [2010] EWHC 2862 (QB) at paragraph 91. It is unnecessary for me to add my deliberations to the higher courts who have not expressed a view on it, or who have stated a non-binding view that the doctrine does not apply. That is because I find that even if it was capable of applying, the provisions as to maintenance in the Deed are not sufficiently onerous to invoke the doctrine. Conditions relating to maintenance are what one would expect to find in a contract between a separating former husband and wife, which this was. Even if it is the case that the maintenance provisions are very generous in favour of Mrs Yedina they do not amount to the sort of onerous terms which might be capable of somehow invoking the doctrine. I have found that Mr Yedin was sufficiently aware of what it was that he was being asked to sign, that he was sufficiently aware that it contained maintenance provisions and that he was actually aware of what those provisions were. That is an end of the point.

Lack of capacity

[269]Next Mr Yedin seeks to say that he lacked capacity. I am afraid this point is hopeless.[270]A party is presumed to have capacity, and the burden of establishing incapacity lies on the party alleging it (Chitty at para 9-001). The nature of the capacity required is conveniently set out in paragraph 9-089: “At common law, the understanding and competence required to uphold the validity of a transaction depend on the nature of the transaction. There is no fixed standard of mental capacity which is requisite for all transactions. What is required in relation to each particular matter or piece of business transacted, is that the party in question should have an understanding of the general nature of what he is doing."[271]The Mental Capacity Act 2005 deals with the matter thus: "[A person]… lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain." (Section 2(1)). "… a person is unable to make a decision for himself if he is unable(a) to understand the information relevant to the decision,(b) to retain that information,(c) to use or way that information as part of the process of making the decision, or(d) to communicate his decision (whether by talking, using sign language or any other means." (Section 3(1)).[272]Whichever test one applies (see Chitty at paragraph 9-092) Mr Yedin does not come close to satisfying it. I have made my findings about his mental state above, and they demonstrate that he has not proved his case. Even if he was suffering from some of the conditions referred to in the medical reports there is no evidence that they were so severe as to deprive him of capacity in any of the senses referred to in this section of this judgement. The point is, in my view, fanciful.

Undue influence

[273]Mr Yedin relies on both actual and presumed undue influence, applied by Mrs Yedina, as being a basis on which the Deed should be set aside.[274]So far as actual undue influence is concerned, it is alleged that Mrs Yedina had the capacity to influence Mr Yedin as his former wife responsible for raising their children. She insisted that he come to England for the purposes of the Deed and unconscionably in a number of ways - threatening exposure to the media of his domestic and financial arrangements; threatening domestic strife; and unwarranted and sustained emotional pressure, including having Darina at the execution meeting. Mr Yedin’s poor health made him vulnerable and he could not obtain legal advice (which was said to be plainly required) so as to be able to form an independent and informed judgment.[275]So far as presumed undue influence is concerned I was invited to find that by reason of her conduct in 2008 and 2009 Mrs Yedina had acquired a significant degree of “dominion” over Mr Yedin, allowing her to gain control over the Family Trust (his portfolio of properties) and extract the benefit of the Deed. In support of this part of the case Mr Yedin also relies on the allegedly highly onerous financial terms which the Deed imposes.[276]Actual undue influence requires “overt acts of improper pressure or coercion such as unlawful threats” (per Lord Nichols in Royal Bank of Scotland v Etridge [2002] AC 773 at paragraph 8). Mr Yedin has failed to make out any such acts. It must be remembered that the starting point of the chain of events that led to the Deed was Mr Yedin’s statements that his new relationship would make no difference to what had gone on before, and that he would provide for his family. Pursuant to that he embarked on the transfer of the various properties in favour of Darina, Denis and Mrs Yedina. The maintenance provision was almost the last thing to be sorted out, but it was part of the whole sequence. There is no suggestion that the whole sequence was motivated by improper pressure. The scope for applying pressure in person was limited. After the November restaurant incident, the Yedins met over Christmas and the New Year, when Mr Yedin went to Dubai with his new partner and Mrs Yedina was there with her children, and there was a degree of contact. There is no suggestion of pressure being applied there. Then Mrs Yedina made a visit to Kiev where she stayed at the dacha, in January, and although that visit is mentioned in Mr Yedin’s witness statement there is no suggestion that she pressured him there. Then she did not see him until he came in February. The suggestion in his witness statement is that during this time Mrs Yedina threatened to speak to the media in Ukraine and give them details of “the scandal”. He does not specify what that scandal was and, as indicated above, it cannot realistically have been exposure of his new relationship because that was known in Kiev already. The only other material alleged in support of this pressure was that Mrs Yedina “cried, scolded and reproached” Mr Yedin when he came over in February. That is not sufficient for an actual undue influence claim. The suggestion that moral pressure was applied by bringing Darina to the meeting is, in the circumstances, completely unjustified.[277]Thus far Mr Yedin has failed to make any reasonable case for an actual undue influence claim. But there is positive evidence the other way. He had by then been an MP for over 10 years. He had survived what he describes as threats of physical violence. He had built up successful businesses. 2 years previously he had been able to act positively and in a businesslike manner in the acquisition of the Knightsbridge flats. At the February meeting he effectively took control of things, according to Mr Simms, whose evidence I accept. He was able to say firmly that he wanted a shorter agreement, and to procure the removal of Nichols as a party to the agreement. He was able to require amendments. And most significantly, part way through the meeting Mrs Yedina left, saying she would accept what Mr Yedin proposed (presumably within reason). All that, and particularly the last matter, is inconsistent with the application of improper pressure.[278]The actual undue influence claim therefore fails.[279]The presumed undue influence claim fares no better. Mr Yedin needs to establish a relationship of confidence and a transaction which calls for an explanation for which no explanation is forthcoming. Mr Yedin fails at both hurdles.[280]As to the first, there is no evidence of such a relationship. The parties were living apart in separate households thousands of miles apart. They lived their own lives with limited contact, usually in a family setting (the restaurant meal, and the New Year Holiday, at the time). There is simply no evidence of the degree of dominion, or “confidence”, required under this head. The two Yedins were far too independent of each other for that.[281]A deed providing for maintenance for a former wife shortly after the husband started a new relationship and had a child in that relationship hardly calls for the sort of explanation required under this head, but if it does then the explanation is obvious and lies in the circumstances. Mr Yedin was finalising provision for his former family in circumstances where he had started a second, and was following through what he had said he would do. The amount of maintenance provided is not so extravagant that it calls for any explanation. Mr Yedin was a wealthy man at this time.[282]The undue influence claim therefore fails.

Unconscionable bargain

[283]Mr Verduyn cited Goff & Jones on the Law of Unjust Enrichment (9th Edn at para 11-59):
“Equity will intervene to prevent any ‘‘unconscientious use of power’’, when there is weakness on the one side and extortion on the other, and will set aside improvident bargains, made with any ‘‘poor or ignorant person acting without independent advice, which cannot be shown to be a fair and reasonable transaction’’. Equity does not intervene simply because the bargain is hard, unreasonable or foolish: it must be oppressive to the complainant in its overall terms, and although Lord Brightman contemplated in Hart v O’Connor that the doctrine might be triggered by the ‘‘passive acceptance of a benefit’’, more recent cases have insisted that the party benefiting from the transaction must have actively imposed oppressive terms on the other party in a morally reprehensible manner.”
[284]It is unnecessary to go into a consideration of the authorities on this point. Assuming that statement to be an entirely accurate statement of the law, Mr Yedin fails on the facts. While it seems to be the case that Mr Yedin did not have separate legal advice, none of the other requirements of the doctrine are fulfilled. Mr Yedin was in no sense a poor or ignorant person. He was a seasoned businessman and politician who had acquired considerable wealth in the Ukraine in the post-communist era. It was a fair and reasonable transaction which he entered into as a result of his own free will, and on the facts (the material ones having been set out earlier in this judgment) Mrs Yedina in no way imposed oppressive terms or behaved in a morally reprehensible manner. Apart from anything else, an oppressor does not usually get upset at the transaction meeting and leave, pronouncing that he or she will accept what the other side propose.

Uncertainty

[285]There is more in this point than in any of Mr Yedin’s points hitherto. He takes the point that the formulation of the maintenance obligation as one to pay “reasonable maintenance” expressed as an “approximate” sum is too vague a term to have contractual force. Unlike market cases where reasonableness can be judged against a commercial market (see eg Mamidoil-Jetoil Greek Petroleum SA v Okts Crude Oil Refinery AD [2001] EWCA Civ 406), there is no market equivalent against which the sum can be tested, and the concept of an “approximate” figure makes the uncertainty worse. In the present case the uncertainty is said to be exacerbated by the fact that Mrs Yedina had not previously been in receipt of anything like £220,000 pa. She had something approaching £50,000 from Logistrans and had various of her expenses paid, but that does not get close to £200,000 pa.[286]This point, too, fails. The courts are reluctant to hold that an agreement, apparently intended as a serious binding agreement, or a term within such an agreement, is void for uncertainty. As Jacob LJ said in Shaw v Lighthousexpress [2010] EWCA Civ 161 at para 20:
“Courts are most reluctant to hold that contracts are void for uncertainty – particularly business contracts. Void for uncertainty is a last resort conclusion.”
[287]This was obviously intended as a serious binding agreement. Not even Mr Yedin (on my findings) thought it was anything less, and objectively that is apparent from its terms and the fact that it was a deed. There is no need to be driven to the conclusion of uncertainty. Jurisprudence and the courts are very familiar with obligations qualified by reasonableness - price and time are prime examples. So are obligations to use “best endeavours”. So far as maintenance is concerned there is even statutory sanction for the concept. The Inheritance (Provision for Family and Dependants) Act 1975 provides for “reasonable financial provision” for dependants (section 1(1)(e)) and the amount to be awarded: “means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance” (section 1(2)(b)).[288]The concept of reasonableness in the present context is not intrinsically different from this Act or its use in a commercial context. The court will do its best to determine a proper figure. The then agreement at “approximately” £220,000 per annum might provide a guideline. It may be that the word “approximately” means that Mrs Yedina could not insist on the specified amount as of right, but it does not introduce uncertainty into the underlying obligation. I note that in another incarnation of the Mamoil case ([2002] EWHC 2210) the court enforced a clause which required delivery of “about” a specified amount of a commodity. That did not create an uncertainty problem.[289]Accordingly I find that the neither the Deed nor the maintenance clause is void for uncertainty.

Rectification

[290]Next Mr Yedin avers that the Deed is liable to be rectified for unilateral mistake. He says he made a mistake because his understanding was that the figure in the document was to be £22,000, reflecting some of the domestic costs that he was willing to meet, like parking, council tax and the like. He says that this mistake would have been obvious to Mrs Yedina and Citilegal.[291]This claim fails on the evidence. Mr Yedin’s own witness statement does not evidence his mistake as to this figure. The closest it gets is paragraph 72: “Besides, the title of the agreement had been changed and the section concerning the financial provision was (and I insist on that) intentionally hidden in one of its clauses. A large amount of £220,000 per year had been included. I believe that I was intentionally deceived in this respect. Previously, I had discussed with the claimant the amount of £22,000 as payment of annual agency fees of Ross Investment and Asha, as well as of municipal bills, parking, et cetera."[292]That is as far as his evidence on the point goes. The rest of his evidence about the agreement is focused on the fact that he did not understand sufficiently what it was and what it said. That leaves little room for him to say that he was mistaken about its contents, but in any event he does not say so. Prior discussion about numbers is one thing. Making a mistake about what a document contains is another. Mr Yedin was not mistaken about anything.[293]That, by itself, is an end of the point. However, it is also a requirement of unilateral mistake that the counterparty is aware of the omission and that it was due to a mistake of the allegedly mistaken party (see Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505). There is no evidence that either Mrs Yedina or anyone else on her behalf was aware of this mistake.[294]Putting it shortly, the evidence comes nowhere near what would be sufficient to give Mr Yedin success on this point, and the point therefore fails.

A point of construction on the obligation to discharge the mortgage

[295]Mr Yedin next takes a point of construction on the terms of the Deed in relation to the obligation to discharge the mortgage. He points out that clause 1.1 of the Deed does not indicate from where the mortgage on Flat 3B was to be repaid. It was submitted that the evidence showed that there was an agreement that it would be discharged by selling the Moscow flat if Mr Yedin could not find any other source. Mr Verduyn seems to argue from that that the obligation contained in the deed was merely one to cooperate in the discharge of the mortgage and not an absolute obligation to procure the discharge of the mortgage.[296]This point simply does not work for Mr Yedin. The Deed says what it says, and what it says is that Mr Yedin would repay the principal and interest outstanding at the end of the mortgage. It is silent as to mechanism or source, and understandably so. Mr Yedin was to be free to pay it from whatever source he thought fit. There is no available material, as a matter of construction, which limits that source to the Moscow flat or, come to that, Flat 2B. Any prior expectations about the Moscow flat (as to which I shall make no finding) are irrelevant to that obligation. It is not qualified as a matter of construction, and no other contractual basis is put forward for limiting it.

Repudiation and agreed damages

[297]It is not disputed that Mr Yedin has ceased to pay any of the maintenance-related payments, and that he has not procured the discharge of the mortgage on Flat 3B. Mr Verduyn did not dispute that, if the Deed was valid, those failures amount to a repudiation, as alleged by Mr Sheehan. Since I have found that the Deed is valid, repudiation is therefore not challenged. Mrs Yedina has accepted it, so damages fall to be assessed on that basis.[298]Several heads of damages are agreed, so I can deal with those briefly first: Bank of Scotland mortgage principal. This is agreed at £1,078,175. Bank of Scotland mortgage outgoings. This is agreed at £38,546. Flat 3B outgoings - accrued service charges and insurance. This is agreed at £38,901.98. Tunbridge Wells flat - accrued outgoings. This is agreed at £49,637 (one outstanding matter having been finally agreed in final speeches). A claim for future outgoings is not pursued on the footing that Mrs Yedina intends to sell this flat. Expenses of re-mortgage of Flat 3B. This is agreed in the figure of £47,217. Disputed damages - ATED[299]The first disputed head is a liability for the relatively new Annual Tax on Enveloped Dwellings (ATED). This is a tax imposed on corporate owners of property and is potentially leviable on Asha. No returns have been made, and no assessment has been imposed by the Revenue. It would cover the period from the imposition of the tax in 2013 to when Mrs Yedina became the owner this year. Mrs Yedina claims to be entitled to damages in respect of this potential liability to the Revenue. Although it is not clear that she would be personally and directly liable, she has given an indemnity to the liquidators of Asha which would cover it if Asha were liable.[300]Mr Verduyn opposes this head of damages. He says that no evidence has been provided that it has been paid, and a reference to penalties in the damages schedule suggests it has not. He says that Mrs Yedina has not suffered loss, and the imposition of penalties and interest is speculative. Furthermore, he says that Mrs Yedina could have mitigated liability by letting Flat 3B, claiming an exemption and residing at the Tunbridge Wells flat.[301]There has been no suggestion that Asha was not liable for this tax. In my view the liability is (as a matter of construction) an outgoing under clause 1.1. It is recoverable as such, whether one calls it a contractual sum (due as outgoings) or damages. The fact that it was technically Asha’s liability does not seem to me to affect this. The obligation fell within clause 1.1 and that is an end of the matter. As a matter of practicality, Mrs Yedina would have been forced to discharge the liability even if it was technically the company’s, and she has now given an indemnity which obliges her to do so. As a matter of principle, therefore, the main sum is recoverable.[302]I do not follow Mr Verduyn’s mitigation point. It was not pleaded, and was not investigated with Mrs Yedina in cross-examination. Furthermore I do not know how it is said to have been workable in order to reduce the tax. I do not understand why it is said that Mrs Yedina should have withdrawn to Tunbridge Wells flat as a matter of mitigation, though in fact the amount of mortgage payments due on Flat 3B caused her to let it out at the end of December 2016, and she is in fact currently living in the Tunbridge Wells flat. For those reasons this mitigation point fails.[303]However, assuming there to be a liability in respect of the ATED, I do not consider that Mrs Yedina should be entitled to recover the penalties for late payment or the interest. Asha was her company, and it fell to her to make sure its taxes were paid. If they are to be recoverable from Mr Yedin the penalties and interest must be viewed as damages for non-fulfilment of his clause 1.1 obligations. There is no evidence to support such a claim. Until about 2015 he was paying outgoings. There is no evidence he was asked to, and refused, to pay any ATED amount. Until 2015 any failure to pay ATED was down to Mrs Yedina, not Mr Yedin. After 2015, when Mr Yedin stopped paying moneys to Mrs Yedina, the non-payment can in a sense be attributed to Mr Yedin, so that the penalties and interest might also be so attributable. But Mrs Yedina has not demonstrated that she had no other source from which she could have paid any tax that was due, so she cannot demonstrate that Mr Yedin has caused Asha (and her) to incur a liability for penalties and interest.[304]I therefore conclude that in principle Mrs Yedina is entitled to recover the tax but not the penalties and interest for late payment. In my view it does not matter that the tax has not yet been assessed. On the facts it would seem that it ought to be, and no defence to it has been suggested. The liquidators ought to make the necessary returns. It should not be assumed they will not do so.[305]Next Mr Verduyn disputes quantum. Tax is payable according to which of several valuation bands the flat falls in. He submits that there is no evidence of valuation which enables one to determine which band, if any, the flat sits in for the purposes of the tax. Mrs Yedina’s claim puts the flat in the £2m to £5m band for all years since the inception of the tax, giving an aggregate of £88,775. If it were worth less than £2m it would attract no tax in the early years and less tax in the later years. There is no formal valuation evidence supporting this. Mr Sheehan relies on a statement in a mortgage offer made to Mrs Yedina in July 2017 to the effect that the property was valued at £3.2m; and the fact that Flat 2B, which is thought to be slightly less valuable than Flat 3B, was sold for £2.85m in February 2016. I am invited to take those figures as justifying the band for Flat 3B, extrapolating backwards for figures for the preceding years.[306]It is tempting to accede to that approach to save the cost of a formal valuation, and as a matter of impression I would have thought that the £2-5m band was likely to be the appropriate band throughout. However, valuation is a matter for experts, and it would be wrong to succumb to the temptation to enter on a do-it-yourself valuation exercise. The appropriate course is to order an inquiry as to the amount of tax likely to be payable (which turns on the valuation point). Mr Yedin has not accepted the valuation figure subject to liability, and in the light of that it needs to be properly proved. If, having seen this judgment, he considers it proper to agree it at the figures required then he and Mrs Yedina can avoid the costs of an inquiry which would, it seems to me, to be likely to be borne by Mr Yedin if Mrs Yedina is right, and by Mrs Yedina if she has overvalued the property for these purposes.[307]Mrs Yedina has proffered an undertaking to pay any sums recovered under this head to Asha so that it can fulfil its tax liabilities, and to procure that Asha does so. I accept that undertaking.

Disputed damages - maintenance

[308]Mrs Yedina claims a capitalised sum for loss of future maintenance. Notwithstanding the reference in the Deed to the sum being “approximately” £220,000 pa she bases her claim on a much lesser sum, namely her final salary from Logistrans, which is put at £46,299.96. She claims 16.5 years lost maintenance at that rate which is then discounted by 15% for early payment. This generates an overall figure of £639,518.[309]Mr Verduyn accepts that taking a base figure, allowing for 16.5 years and then applying a discount of 15% is an acceptable technique, but disputes the base figure for two reasons. First, he says it ought to be £22,000 pa, on the footing that that is what Mr Yedin thought the incorporated figure in the deed was, and second he says that whatever the base figure is, and particularly if it is the Logistrans salary, it should taken net of tax, and not as a gross sum.[310]His first point can be quickly dealt with. I do not accept as a matter of fact that Mr Yedin thought the maintenance figure was £22,000 per annum. For the reasons given above he understood that the figure was £220,000 per annum.[311]His second point is more difficult. He accepted that if the sum was to be treated as compensation for loss of earnings then it would be right to award the gross sum, presumably on the footing that the sums would be taxable in the hands of Mrs Yedina. However, what she got from Logistrans was in fact a sum net of tax (about £33,000 pa), and that is what she should now have (as the annual base sum) if she was seeking to replace the Logistrans payment.[312]This is an interesting argument. Mrs Yedina is not seeking actual loss of earnings, or a direct replacement, as of right, for the Logistrans payment. Under the Deed she is entitled to reasonable maintenance. Rather than make out a case for that based on such things as her means and liabilities and the like, she has decided to use the Logistrans payments as a sort of proxy for what is reasonable maintenance. She did not articulate it like that, but that is what she must be saying. Her net receipts from Logistrans were (I shall assume - it has not actually been proved) around £33,000. She might therefore be taken to be saying that £33,000 pa is a reasonable sum for her maintenance, because that is the true proxy. If that is right then Mr Verduyn’s argument that that should be the base sum succeeds.[313]However, I do not consider it does succeed. Mrs Yedina did not rationalise her choice of maintenance figure on the footing that whatever she got (net) from Logistrans was the right figure. She simply proposed it as a figure, which was gross, with some sort of correlation with Logistrans. That is not quite the same thing. She should therefore not be saying that in effect £33,000 net was a proper figure for her. The effect of taxation will have to be worked out as and when it arises. Awarding her only £33,000 odd would only be justified if two things were true. First, if she was proposing the net figure, and second that it was plain that the gross figure in her hands would not be taxable as income. The burden of establishing the latter is on Mr Yedin - see Stoke on Trent City v Wood Mitchell & Co [1980] 1 WLR 254 at 259G-H. He has not demonstrated that.[314]On the limited submissions made to me I find that the appropriate base figure is the Logistrans figure.[315]In the circumstances this figure falls to be calculated in the manner proposed by Mrs Yedina, which yields a figure of £639,518.

Disputed damages - future outgoings on Flat 3B

[316]Mrs Yedina claims future outgoings on Flat 3B (the above agreed figure is for accrued outgoings). She claims at the rate of £12,000 for 20 years (on the footing that she is unlikely to move), with no discount for accelerated payment - Mr Sheehan said a discount was already built into the 20 year period which could well be an under-estimate.[317]Mr Verduyn did not respond to this point. The evidence on it was very thin - little more than an implied assertion of the figures. There was some evidence that the £12,000 was less than the average of the last 3 years for service charges, insurance and repairs for Flat 3B, so I am prepared to take that as a base. However, a multiplier of 20 seems excessive. I will allow 15, giving a total of £180,000.

The trust and estoppel claims

[318]Mr Yedin’s counterclaim relates to the two Cyprus flats, the Moscow flat, the Tunbridge Wells flat and Flat 3B. He claims that those properties were originally acquired to be held on trust for Mr and Mrs Yedin and the two children in equal shares. That was the case when they were put into the names of the original legal estate holders, and it remains the case now that Mrs Yedina has the properties in her name or in the name of the companies that she controls. Mr Yedin seeks a declaration and consequential relief accordingly.[319]I was not significantly addressed (other than a brief reference to the Mozambique rule referred to in Dicey, Morris and Collins on the Conflict of Laws at para 23R-022 et seq) on the conflicts of laws points that might arise out of the fact that some of the properties are in foreign jurisdictions, and at least one of them (the Moscow flat) is in a jurisdiction which almost certainly does not recognise the doctrine of trusts. I shall assume that I can apply English trust and estoppel doctrines to all of the properties.[320]By way of a preliminary point I also get out of the way an abandonment point that Mr Sheehan took. Towards the end of his cross-examination Mr Yedin made remarks which, if taken at face value and ignoring the context, might be viewed as an abandonment of his trust claim. He seemed to say clearly he was not pursuing it in this action. To a degree he seemed to retract that in his re-examination. At this stage it is sufficient to say that I do not take what he said in cross-examination as a formal abandonment which removes the claim from the action. Despite what Mr Yedin said, I very much doubt that he meant to do that. It was probably an ill-considered remark in its context and not sufficient to give rise to an abandonment. The claim is still live and has to be dealt with by me.[321]Mr Yedin’s case is based on an alleged agreement with Mrs Yedina that each property would be held on the family trusts, and that he thereafter acted to his detriment by investing in property in the name of companies and individuals other than himself to that end, and in transferring properties into Mrs Yedina’s name or control. Although no claim is made in these proceedings in relation to Ukrainian properties, it is alleged that those properties, or some of them, were subject to the same trusts.[322]I shall start by considering the factual basis of the claim and whether Mr Yedin can establish his claim at this level. It is part of his case that it is obvious that at least some of his properties were held in trust. He points to the fact that the Moscow flat was originally acquired in the name of Mrs Yedina’s mother, and one of the Cyprus flats in the name of Mrs Yedina’s sister, and I am invited to find it would be absurd to find that they were to be held beneficially. I do indeed find it unlikely that they were to be so held. I think it much more likely that they were being held to the direction of Mr Yedin, as is demonstrated by the fact that they were both transferred when required. However, it does not follow that they were held on trust (though that may well be an English law analysis) and if they were it does not follow that they were held on the “Family Trusts”. Prima facie if they were not held beneficially by the legal owners they were held on trust for Mr Yedin alone.[323]So the next question is whether Mr Yedin has demonstrated his intention to hold all the properties on the particular trusts he alleges. I do not accept that he ever had that intention, or that there was any discussion between him and Mrs Yedina which gave rise to the agreement about it which his witness statement says existed. I reach this conclusion for the following reasons.(a) In all the documentation that currently exists there is no mention of the trusts. It would have been most relevant in relation to the purchase of the Tunbridge Wells flat, because there was talk of a trust structure in relation to that, and Mr Yedin wrote some brief references to professional trustees in his notes. The shares in Ross were held by trustees. However, neither they nor Citilegal (who helped set up Ross) were told by Mr Yedin that the trusts were trusts for the benefit of all 4 members of the family in equal shares. The trustees were obviously expecting and expected to act on the instructions of Mr Yedin without recourse to anyone else, which is what ultimately happened.(b) In relation to certain properties Mr Yedin plainly acted as if he were the sole beneficial owner, entitled to give instructions as to its disposition, without any suggestion that he had the proprietary interests of any else in mind. Thus: (i) In relation to the Moscow flat he failed to tell Mrs Yedina’s mother who she was a trustee for. (ii) When he wanted to have the flat transferred, he gave instructions to that effect without any regard to beneficial interests. (iii) His own evidence was that the Moscow flat was to stand as some sort of guarantee for the repayment of the mortgage on Flat 3B. If it really were trust property he could not simply do that without regard to the interests of the children even if Flat 3B were held on the same trusts. He simply viewed himself as the beneficial owner entitled to dispose of the property as he thought fit. (iv) Mrs Yedina was allowed to have all the rental income from the Moscow flat after the transfer to her. That is inconsistent with the trust alleged. There is no evidence that Mr Yedin treated any rental income before then as subject to the trusts he now alleges. (v) I accept Mrs Yedina’s evidence that the Moscow flat was to be given to her absolutely as part of the settlement in 2008/9. That is not something that Mr Yedin would have been entitled to do if he considered himself a trustee. (vi) I have referred above to a declaration in respect of Ross signed on 2nd December 2008 declaring Mrs Yedina to be the beneficial owner of Ross. That must have been done on the instructions of Mr Yedin. I find that in doing that he had it in mind to achieve the vesting of the Tunbridge Wells flat in Mrs Yedina. Ross did not hold the property on trust. Mr Yedin had no right thus to vest the shares (and therefore the property) if the property was a trust asset.(c) When Flat 3B was being purchased there is no suggestion that it was a purchase for anyone other than Mr Yedin in his own right. He presented himself, and was presented, as the beneficial owner of Asha, and that was obviously intended to convey that he was the ultimate beneficial owner of the property.[324]There are other matters demonstrating the same thing, and it is unnecessary to list them. Putting it shortly, Mr Yedin did no acts which suggested that he thought that the properties said to be subject to the trust were so subject, and did many acts which are inconsistent with that. He has not demonstrated that he had the intention alleged, or that he reached an agreement with Mrs Yedina to that effect.[325]I have also formed the view that it is unlikely that Mr Yedin would ever wish to tie his hands in that way in relation to these various properties. If they were truly subject to the trust he would lose a lot of control over them if he were being conscientious. He could not buy and sell at will, and if he ever sold he would have to distribute to the beneficiaries or invest for them if they were minors. I do not believe that it would ever have occurred to him that that was the position. He was the sort of man who would want to keep control of properties and not impose on himself the sort of obligations that a trust would impose on him (unless he specifically chose to do so, which he did in relation to some of the Ukraine properties).[326]That is not to say that Mr Yedin had no regard for his family in relation to at least some properties. I would be prepared to accept that he would wish his family to benefit, and he saw at least some of the properties as family homes. He may even have had it in mind in due course that Darina and Denis would acquire interests in them (whether on death or otherwise). But that does not mean that he formed a clear intention to create a binding trust in relation to them. I find he did not, and did not reach any relevant agreement to that effect with Mrs Yedina.[327]It is part and parcel of this finding that I find (as I do) that at the end of 2008 and the beginning of 2009 Mr Yedin embarked on his process of transferring properties to Mrs Yedina. He sought to suggest that he was doing that (at least in relation to some of them) to give her control, and did not intend to change underlying beneficial interests. In other words, he was saying that he was putting her in the position of a trustee. I do not accept that that was his intention. He was achieving a property separation in the context of it becoming apparent that he had moved into a new relationship. I consider that his conduct in this respect demonstrates what his view had been all along - that he retained control over all the properties which was inconsistent with a trust.[328]That finding makes it unnecessary to consider in detail other matters which might be thought to be obstacles to Mr Yedin, but I will mention one briefly.[329]That matter is the basis on which the trust is said to arise. Mr Verduyn did not cite direct authority in his final submissions, but he did refer to Megarry and Wade on the Law of Real Property, 8th Edn at paras 11-013 to 11-017 and 11-023 to 11-029. That suggests reliance on the very long line of cases in which non-legal owners have (summarising briefly) sought to claim beneficial interests in their favour as against the legal owner as a result of contributions to the purchase price, household or living expenses or other acts of detriment said to have been done on the basis of an intention or assumption of acquiring a beneficial interest. Mr Yedin’s case is that he acquired the various properties on the assumption that they would be trust properties, and seeks to raise an equity against (in effect) himself at this stage in the reasoning. That is not the same situation as exists in the line of cases implicitly relied on by Mr Verduyn, where a contributor seeks to raise an equity against the legal owner. I do not see how that line works for him (though I was not treated to any argument on the point). If his evidence of intention were accepted (which it is not) what he has done is more akin to establishing an incompletely constituted trust, which does not get him home either.[330]What might have been more fruitful for Mr Yedin as a matter of legal analysis is to say that the various properties (or shares in the companies holding them) were transferred to or put in Mrs Yedina’s name on the shared assumption that she would hold them on trust for the family members. He seeks to raise this sort of argument via an estoppel argument, suggesting that there was an implied representation by Mrs Yedina that the properties were to remain in the Family Trust even though they were transferred to her. However this, too, fails on the facts. Since there was no preceding trust intention on the part of either of the Yedins, there was no implied representation (or assumption) that such an intention would continue. Nor was there any express arrangement to that effect at the time of the transfers.[331]Accordingly, Mr Yedin’s counterclaim fails.

Conclusions on the claims

[332]I therefore conclude: 1. The Deed is valid and enforceable. 2. The Deed has, as a contract, been repudiated, and that repudiation has been accepted. 3. Mrs Yedina is entitled to damages as a result. She is entitled to the sum of £2,024,777.98 and an inquiry as to the ATED damages. 4. The counterclaim fails and falls to be dismissed.[333]There is a dispute as to whether Mrs Yedina should have interest on her damages. I agree with Mr Sheehan that that is best dealt with after further argument as to liability, dates of accrual and rate on or after the hand-down of this judgment.

Relief

[334]Any further disputes about the form of relief can be dealt with as one of the consequential matters flowing from this judgment. However, there is one point which needs to be flagged at this point.[335]One of the heads of relief sought by Mrs Yedina is: “… consequential relief to provide for the funds in Court to be paid out to IY.” (The funds are the net proceeds of sale of Flat 2B, and they are in a solicitor’s account, not in court.) In the light of my finding that Flat 2B, and therefore the proceeds of sale, are owned beneficially by Skelling and not by Mr Yedin, that is relief which is capable of irremediably affecting Mr Goncharov if I am wrong about Skelling (unlike my finding about the beneficial ownership of the shares). He is, as I have pointed out, not a party to this action. I have yet to hear argument as to whether, and perhaps when, it would be appropriate to order Skelling’s money to be paid to satisfy Mr Yedin’s judgment.[336]It seemed to me that there was a potential problem about granting relief which would directly impact a non-party, even though it might be thought, or assumed, that Skelling would de facto represent his interest if, as was his case, it was his company. As a result of my querying his position at the start of the trial Mr Goncharov provided a hand-written document (in English) and signed by him saying:
“I hereby give my undertaking to the Court that I will be bound by the court’s final decision in relation to the case against Skelling Ltd. I have been offered independent legal advice in relation the decision.”
[337]At the end of his evidence I raised the matter with him again, and he confirmed that he was content for a decision to be reached in this case which might affect his interest without being represented. He also said that he had taken advice on the point from his own lawyers in the Ukraine (whom he identified).[338]Mr Goncharov thus seems to have demonstrated his contentment to the ownership of Flat 2B and the Skelling money representing the net proceeds of sale being decided without his being a party. Nonetheless I think it right that he should have the opportunity of considering his position in the light of this judgment. I do not propose to make any order affecting the money in the solicitor’s account until Mr Goncharov has had the benefit of reading this judgment and considering his personal position. I shall direct that he be sent a copy of this judgment and that part of the consequentials hearing, at least, will take place not less than 28 days after the handing-down of this judgment in order to give him the opportunity to consider making any submissions. I am not indicating that he would be entitled to make any intervention. His stated stance may well prevent it, but nonetheless he should have the opportunity.

Cited in 4 later judgments