Vanida Walker v Ekkachai Somboonsarn [2025] EWHC 1643 (Ch)

[2025] EWHC 1643 (Ch)Case No PT-2020-000963IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 03/07/2025
Before
MASTER MCQUAIL
Between
VANIDA WALKERClaimantEKKACHAI SOMBOONSARNDefendant
Timothy Cowen (instructed by Herrington Carmichael LLP) for ClaimantRobert Strang (instructed by Germain Kalle Law) for DefendantHearing Hearing date: 19 June 2025
Approved JudgmentThis judgment was handed down remotely at 10.00am on 3 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................MASTER MCQUAIL
[1]HHJ Davis-White KC (the Judge) heard the trial of a claim brought by Vanida Walker against her son Ekkachai Sombooonsarn over eight days in May 2023. The claim concerned the beneficial ownership of three companies, through which the claimant and defendant operated a number of restaurant businesses and of a number of properties. In April 2024 the Judge handed down a comprehensive judgment running to 686 paragraphs (the Judgment).[2]In the order made on 7 May 2024 giving effect to the Judgment it was declared that the legal and beneficial ownership under the right to subscribe of the right to the shares in Finfish Catering Limited (Finfish), Anglo Thai Limited (ATL) and Thai Metro Limited were vested in the claimant. It was also declared that the defendant holds the beneficial ownership of the freehold properties at 78 Hermit Road London E16 4LF (78 Hermit Road) and 38 Charlotte Street London W1P 1HP (38 Charlotte Street) on trust for the claimant as sole beneficial owner.[3]The order went on to direct that:(i) “an equitable account be taken of rent received by and any liabilities incurred by the Defendant in respect of 78 Hermit Road and 38 Charlotte Street”; and(ii) “an equitable account be taken of all dividends paid out of Thai Metro Limited, Anglo Thai Limited and Finfish Catering Limited since the dates of incorporation of those companies”; and the taking of the accounts be listed before a Master . This is my judgment on the taking of those accounts.[4]Orders for directions as to the taking of the account were made and complied with as follows:(i) the defendant was to file a schedule of rents and liabilities for the two properties and a schedule of dividends. The defendant’s wife compiled 5000+ pages of material including a summary (Bundle B) which was verified by a one page witness statement of the defendant dated 29 July 2024;(ii) the claimant was to file notice of objection. This was done by way of a witness statement of the claimant’s daughter based on the claimant’s instructions and dated 23 September 2024;(iii) the defendant was to file a response to the objections in Scott Schedule format and the parties were to meet and discuss with a view to agreeing a list of issues disputed and agreed in order that the claimant would then file a statement of matters disputed and agreed together with a spreadsheet Scott Schedule. The claimant has endeavoured to comply with that direction; an unagreed list of issues dated 13 May 2025 and accompanying spreadsheet are included in the hearing bundle. That spreadsheet is the starting point for the adjustments which I will direct in this judgment.[5]The defendant filed and served a further witness statement dated 4 June 2025. It exhibited 242 pages of documents. The claimant objected to that witness statement. The defendant made an application to rely on the statement orally at the commencement of the hearing. For the reasons I gave after hearing that oral application I did not permit the defendant to rely upon that witness statement or the material exhibited to it.[6]There remain three areas of dispute:(i) a claim by the defendant that contributions he says he made to the purchase price of 38 Charlotte Street be credited to him in that account;(ii) a claim by the defendant that expenses and costs incurred at 78 Hermit Road while it was rented out should be chargeable by him as trustee expenses in that account;(iii) in respect of dividends paid out to the defendant while he was trustee of the shares of Finfish and ATL that their amount be awarded to him as remuneration for acting as director of those companies so he has nothing to pay on that account.

Relevant Law

[7][41-005] of Lewin on Trusts 20th Edition says this about the taking of an account in common form:
“A claimant to an account in common form need not allege or prove any default in the trustee’s dealings. An order for an account of administration in common form requires the trustee to account only for what he has actually received, and his disbursement and distribution of it. Accordingly, such an account enforces the trustee’s primary duty to hold the trust property for the beneficiaries, paying out sums only as he is authorised to do under the terms of the trust. It is thus incumbent on the trustee to justify any payments made, and not on the beneficiary to prove any breach of trust.”
[8]The onus is thus on the defendant to prove factually that payments were made and justify all payments alleged to have been made as trustee qua trustee. It is not for the claimant to prove that they are unjustified.[9]Mr Cowen referred me to the recent decision of Rukhadze v Recovery Partners GP Ltd [2025] UKSC 10 where Lord Briggs summarised the court’s discretion to credit a fiduciary in an account of profits with an equitable allowance as follows: “it compensates the fiduciary in an appropriate case for his devotion of work and skill, and perhaps the putting at risk of his own capital, in generating the relevant profits. The court applies a broad brush in determining the amount of the allowance and it does indeed limit the potential for injustice in the traditionally strict enforcement of the duty to account. This ability to temper the wind to the shorn lamb is a familiar equitable tool. Beyond that there is a fuller description of the equitable allowance in the judgment of the Court of Appeal in the present case at paras 112-123, with which neither of the parties before this court took exception.[10]Mr Cowen referred me to the passages referred to in the decision of the Court of Appeal [2023] EWCA Civ 305 and directed my attention to the following points: (i). making an equitable allowance will be exceptional [116]; (ii) the ultimate test is whether it is inequitable on the facts for the beneficiaries to take the profits without paying for the skill, labour and risk which produced it [116]; (iii) an allowance will not be made if it would be seen as encouraging fiduciaries to breach their duties [116]; (iv) dishonesty, bad faith or surreptitious dealing may mean no allowance will be made [117]; and (v) a claim to an equitable allowance should be pleaded and proved by evidence [123].[11]Mr Cowen referred me also to the judgment Master Marsh (sitting in retirement) in Hubbard v Hubbard [2025] EWHC 855, where he set out a helpful description of how the process of taking an account proceeds and at [47] discussed the approach to evidence adduced by trustees to establish expenditure and the questions the court will have in mind when assessing that evidence and in particular the last of those:
“ If there is sufficient evidence of an item of expenditure being incurred, was it … incurred on behalf of the trust, as opposed to being for the personal benefit of the trustee?”

Evidence

[12]At no stage did either party suggest that there was to be cross-examination of any witness on the taking of the account; directions were either agreed or given on the basis that the hearing would proceed on submissions alone. In those circumstances the documentary evidence or the absence of it is clearly crucial. To the extent that either the defendant or the claimant advances a case by reference to an interpretation of the documents which cannot be discerned from the documents themselves, I need to be cautious of accepting such a case. I bear in mind also that at [251] of the Judgment the Judge concluded that the defendant was willing “to say things that were not true as a way of furthering his case.” 38 Charlotte Street[13]The purchase of 38 Charlotte Street completed in late November 2009 at a total price of £1.45m. Contributions to that price may be broken down approximately as follows:(i) £145,000 paid by a company to remove the property from auction, in effect the deposit;(ii) a mortgage advance of £832,500;(iii) £303,000 met by a loan from relatives in Thailand; and(iv) a further amount of some £225,000. The numbers do not add up precisely because there were other costs associated with the purchase which had to be paid.[14]The defendant claimed for the first time in a statement of income and outgoings in Bundle B that he had made a “contribution towards purchase price” in the sum of £259,643. The claimant objected to this new claim in the 23 September 2024 responsive documents.[15]The defendant’s case now is that:(i) the £145,000 deposit was paid by Finfish and he reimbursed Finfish £38,000 personally and also forgave Finfish £107,000 owed to him;(ii) he contributed £90,000 from his own funds; and(iii) ATL paid £130,000 and that he reimbursed ATL in tranches of £30,000 and £100,00.[16]At trial the question of the beneficial ownership of 38 Charlotte Street was in issue. The case now advanced by the defendant as to contributions to the purchase price was not advanced at all.[17]The Judge dealt with the relevant pleaded cases of the parties and the evidence at [652-667] of the Judgment and recorded his findings at [668-680]. The only case advanced by either the claimant or the defendant at trial about their own contributions to the non-mortgage element of the purchase price concerned the loan from relatives in Thailand. The claimant said that that was a loan to her, the defendant said it was a loan to him. The Judge found in favour of the claimant.

The Judge’s conclusion at [681] was as follows:

“In circumstances where, apart from ongoing funding by way of income from the property used to meet payments under the mortgage loan I am satisfied that the immediate monies to pay for Charlotte Street represented sums belonging to and arranged by Wanda. I am also satisfied that the property was acquired by her as beneficial owner that being the agreement between Ekk and Wanda.”
[19]Mr Strang on behalf of the defendant said that it was a matter of regret that the defendant did not advance the evidence and case that he now advances about contributions. He sought to persuade me that because the Judge had not made any express findings about the balance of the contributions to the purchase price that was a matter that was still open to be argued. He said that properly analysed the contributions that the defendant claims he made are contributions made in the character of a trustee, who by contracting to purchase became personally liable to pay the price and that he is entitled to be credited in the account accordingly.[20]Mr Cowen submitted that it was too late for the defendant to make any case about contributions to the purchase price now, it was a matter that should have been raised at trial. He said that the formulation of the account directed to be taken made that clear.[21]The Judgment records at [663] that in his trial witness statement the defendant asserted that the £145,000 deposit was found from ATL; that was consistent with his pleaded case. In the commentary within Bundle B it is stated that the £145,000 was paid by Finfish and repaid by elimination of a loan by the defendant to Finfish of £107,000 and that the defendant personally reimbursed Finfish £38.000 on 14 June 2010.[22]Included in Bundle B are(i) statements for the defendant’s bank account with Barclays (20-49-81, 8057877) and(ii) statements for ATL’s bank account with Barclays (20-36-47, 40967696).[23]The ATL statements show a payment out of £130,000 to the conveyancing solicitors engaged in the purchase of 38 Charlotte Street on 23 November 2009 and payments in of £30,000 and £100,000 from the defendant on 30 November and 18 December 2009.[24]The following movements of money at least potentially connected to the acquisition of 38 Charlotte Street in the fourth quarter of 2009 may be identified from the defendant’s statements: Date Description Details In/(Out) 13 Oct Deposit at Barclays Soho Square Ref 1000023 Account Credit 90,000.00 28 Oct Bill payment to Sandom Robinson Ref 38 Charlotte St On-line banking (5,000.00) 4 Nov Received from PO Woo Co 817718 Loan From:* Transfer 72,494.00 6 Nov Received from PO Woo Co 721818 Loan From:* Transfer 137,994.00 9 Nov Received from PO Woo Co 728610 Loan From:* Transfer 92,894.00 23 Nov Payment to Charlotte Street 036094 Sandom Rob Transfer (395,000.00) 24 Nov Received from PO Woo Co 815819 B/O Thatha Transfer 49,994 30 Nov Transfer to Sort Code 20-36-47 Account 40967696 On-line Banking (30,000.00) 18 Dec Transfer to Sort Code 20-36-47 Account 40967696 On-line Banking (100,000.00) 18 Dec Received from PO Woo Co 738402 O/B Thong Transfer 99,994.00 *Agreed to be the loan from Thailand[25]The defendant’s statements also show a payment in of £37,994.00 with the description “PO Woo Co 744996 O/B: Thong” on 11 June 2010 and a payment of £38,000 made to 20-36-47 80603961 (that is Finfish’s account) on 14 June 2010.[26]Finfish’s 2009 and 2010 accounts appear to show that a creditor in the amount of £107,000 was repaid between the dates of those accounts; the accounts do not identify the creditor by name.[27]Mr Strang invited me to accept the evidence from the bank statements in support of the defendant’s case that he contributed £90,000 directly as well as £145,000 and £130,000 by reimbursing Finfish and ATL to the 38 Charlotte Street purchase price.[28]Mr Cowen pointed out that it was clear from the known receipt into the defendant’s bank account of the loan from the relatives in Thailand in three tranches that the defendant’s account was being used at least in part as a conduit to pass monies belonging to the claimant to the conveyancing solicitors. He pointed out also that in the case of each of the other payments out on which the defendant relied there were very closely corresponding payments in of sums which could not, without more, be said to be funds beneficially owned by the defendant. There is nothing to show where the £90,000 deposited at Soho Square on 13 October 2009 came from and the payments on 24 November, 18 December 2009 and 11 June 2010 have references which suggest, when compared with payments accepted to represent the loans from relatives in Thailand, a similar source. He pointed also to the inconsistency between the defendant’s position at trial that it was ATL who paid the deposit and his position now that it was Finfish. He submitted that the defendant was simply picking out documents which contained numbers from which he could construct a case.

Conclusions – 38 Charlotte Street

[29]My reading of the Judge’s conclusion that “the immediate monies to pay for Charlotte Street represented sums belonging to and arranged by Wanda” is that the matter of contributions to the purchase price was determined finally by the Judge. The words defining the account which was ordered in relation to 38 Charlotte Street do not on a natural reading encompass contributions to the purchase price. Those were matters which it was for the defendant to plead and prove by evidence before the Judge. It is rather more than a matter of regret that those matters were not so pleaded and proved, those matters could and should have been raised at trial. That they were not, is in my judgment fatal to any claim that in the taking of this account, as ordered, the question of contributions to the purchase price can be reopened.[30]If that conclusion is wrong it nevertheless reflects on the plausibility of the claim that the defendant now seeks to advance that he did not raise the issue of other claimed contributions to the purchase price in the context of his claim at trial to be sole beneficial owner.[31]The defendant’s case made at this late stage is lacking in plausibility. It is a case he not only could and should but would have made at trial if it were a true reflection of what occurred in 2009-2010 as it would have added significantly to his case that the claimant was not the sole beneficial owner of 38 Charlotte Street. The contradiction between the case at trial that ATL paid the deposit and the present case that it was Finfish adds to the implausibility. The evidence from the bank statements is consistent with the use of the defendant’s account as a conduit for funds belonging to others being used to fund the purchase price, as was the case with the loan from the relatives in Thailand. Absent other supporting documentation I cannot conclude from the evidence in the bank statements and Finfish’s accounts that the defendant has made out a case that he was the beneficial owner of any of the balance of the funds making up the purchase price of 38 Charlotte Street.[32]Even if I were to accept that the defendant had made out a case that the payments he says he made were made with funds that were beneficially his own, I am far from persuaded that the contribution would give rise to a beneficial share or a right to recoupment from the claimant in the account which he is to give as trustee rather than, possibly, to an entitlement to repayment of loans made by him to the claimant, Finfish or ATL.[33]Accordingly the sum of £259,643.00 is to be deleted from the “claimed debits” column in the 38 Charlotte Street account. 78 Hermit Road[34]78 Hermit Road is a one bedroom house in a terrace in Canning Town. The purchase price in 2008 was £285,000 It was used as a central kitchen and storage area for three restaurants. The three restaurant businesses were all owned and operated by companies: ATL and Finfish and Scoffle Limited, which was owned beneficially by the defendant. The companies paid rent for their use of 78 Hermit Road until 2015. Thereafter the property was let to residential tenants. There are no written agreements to evidence the terms upon which the companies or individuals occupied 78 Hermit Road. The only contemporaneous documentary evidence of the income are the quarterly invoices rendered to the companies. These invoices describe the charge made to the company occupiers as in respect of “food preparation and storage” for the period 2009 to 2012 and as in respect of “rent and service charge” in the period 2013-2014. Scoffle paid a fixed monthly sum which was at various times £1,440, £1,620, £1,500 or £1,100 while ATL and Finfish paid £350 each monthly throughout the period of the companies’ occupation.[35]That there was total rental income of £298,053 is agreed. It is also agreed there was further income of £10,000 which was a covid support payment from the local authority and £558.72 representing a waste collection refund. A number of categories of outgoings are agreed including the mortgage payments.[36]The items claimed by the defendant which are contested are as follows:(i) Business rates: £5,197.19;(ii) Water Rates: 8,847.04;(iii) Water Other: 2,229.97;(iv) Light and Heat: 67,121.07;(v) Light and Heat – other: 5,556.55;(vi) Phone / broadband: 4,761.93;(vii) Pest Control: 2,235.53;(viii) Waste Collection: 4,055.29;(ix) Waste Collection other: 200.00;(x) TV Licensing: 145.50; and (xi). Repairs and renewals: £33,886.58.[37]It is the defendant’s position that these sums were proper trust expenses and the money coming in from the occupiers was intended to cover them and that he should therefore be entitled to all these debits until such point as the income is exhausted. He accepts that so far as the expenses exceed the income he may not recover such sums.[38]It is the claimant’s position that the defendant was the trustee of the property and he may only recover expenses paid qua trustee. It is said that the starting point is that where a commercial property is occupied it is to be expected that the charge made for occupation would cover the business expenditure of the occupier, such as the utilities, whether by the rental amount including a sufficient margin or, more likely, by the levying of a variable service charge calculated by reference to the actual business costs. In addition (and it was not seriously disputed) business rates are payable by the occupier in accordance with the provisions of the Local Government and Finance Act 1988. Disputed items (ii) to (x) are evidently costs of businesses operating at the property and are not justifiable costs of the trust. The burden would be on the defendant to establish the contrary So far as the defendant has paid various bills that should in fact be to the account of the company occupiers that is a matter between him and the companies and not something he can claim as trustee.[39]The claimant has agreed the £10,000 covid rebate and £558.72 waste collection refund in the credit column but it is acknowledged that if business expenses are not allowed those income items should be deleted from the credits..[40]The claimant acknowledges that repairs and renewals might be in a different category. A trustee would be entitled to proper costs of repair and renewal, but the costs are high when regard is had to the modest nature of the property and where the property was let to a commercial tenant it might be expected that there would be a contribution from the tenant via a service charge.

TOTAL 11,209.76

[41]To the extent that individual items of repairs and renewals can be identified it seems that they represent purchases of commercial equipment, domestic appliances and furnishings as follows.(i) Refrigeration: 4,993.75;(ii) Acme Catering: 434.76;(iii) Acme Catering: 219.60;(iv) Acme Catering: 121.80;(v) Acme Catering: 1,038.00;(vi) Ikea: 1,062.00;(vii) Dixons: 878.10;(viii) Comet: 544.93;(ix) John Lewis: 229.00;(x) Dunelm: 429.94;(xi) Currys: 274.99;(xii) Asda: 97.95; and(xiii) World Stores: 884.94. TOTAL 11,209.76 The identified items amount to about 33% of the total amount claimed for “Repairs and Renewals”. The claimant submits that this puts the balance of this claim into question and where the burden is on the defendant to justify the expenses as trust expenses I should not be satisfied he has done so.

Conclusions - 78 Hermit Road

[42]As trustee of the property the defendant should have ensured that the charges made for it occupation covered expenses truly attributable to the occupiers. The label given to the charges made to the occupiers in the various invoices is of no particular assistance in determining what the commercial tenants should have been paying for. In my judgment the defendant has not satisfied the burden on him that the disputed items he claims in this account are legitimate trust expenses. If he made payments that should have been to the account of the companies, that is a matter between him and the companies.[43]I will therefore disallow all of the items identified in paragraph 36. I will however, by the same token, remove the covid payment and the waste collection refund from the credits column.

Company Dividends

[44]The amount paid to the defendant as dividends by each company is admitted. The defendant was at the time of payment holding the shares as trustee on behalf of the claimant and he has been ordered to account for them.[45]Mr Strang submitted firstly that the dividends paid to the defendant were not in fact or law dividends because they were mistakenly paid by the companies to a person not entitled to dividends and so the amount of the dividends should be returned to the company and not be the subject of the account at all. Alternatively he says that he is entitled to keep the dividends, in lieu of remuneration as a director of the companies. The defendant points to the accounts of ATL and Finfish in an attempt to demonstrate that his remuneration was low and points also to recognition in the judgment of the employment tribunal that dismissed his unfair dismissal claim against ATL and Finfish that he had been compensated for low wages by the payment of dividends.[46]Mr Cowen says that the defendant’s first argument makes a nonsense of the order to account. At trial it was understood that dividends had been paid to the defendant and an account was ordered against the defendant as trustee of the shares and recipient of such dividends as were paid. So far as the defendant claims remuneration it must be remuneration as a director of the relevant company, not as trustee and therefore not susceptible to any form of equitable set-off. Any claim to unpaid remuneration is for the defendant to make against the companies. There is no legal basis upon which the defendant can claim director’s remuneration as a justifiable expense of acting as trustee of the claimant’s shares in the companies. Making an equitable allowance is discretionary and exceptional. In this case the defendant has not pleaded and proved a case for such an allowance.

Conclusions – the Dividends

[47]The account ordered was of the dividends. Their amount is not in dispute. I do not accept Mr Strang’s contention that because they were paid to the defendant when he was not the beneficial owner of the shares that they cease to count as dividends of which the account was ordered, that would make a nonsense of the account ordered.[48]So far as concerns the making of an equitable allowance. In the first place any remuneration claim would be against the companies not the beneficial owner of the companies. Secondly it is a matter that should have been pleaded and proved at trial so that the Judge who heard the evidence was in a position to assess whether any such allowance should be made and if so in what amount. If it were still open to me to make any such allowance I would not in this case do so. This is not the case of a trustee doing his honest best, but of a trustee who denied his trustee status all along.[49]The account should record the full amount of the dividends as being owing to the claimant without deduction.