Indemnity costs ordered against trio behind sham trust deeds in Teixeira v Moaven

The High Court has ordered indemnity costs, on a joint and several basis, against three parties found to have been complicit in the creation of sham declarations of trust designed to disguise the true extent of a deceased man's estate from his widow and HM Revenue and Customs.

Handing down a costs judgement in Gabriela Mozerle Teixeira v Amir Ahmed Moaven & Ors [2026] EWHC 1542 (Ch), Master Bowles, sitting in retirement, addressed the costs consequences of his earlier ruling that declarations of trust executed by Amir Abbas Moaven in April 2012, shortly before his death, were sham documents with no legal or equitable effect. The declarations had purported to confirm an informal arrangement under which Abbas, his brother Amir Ahmed Moaven, and their mother pooled and equally shared all their assets, a narrative the court found to be entirely fictional.

The costs application was brought by the claimant, Gabriela Mozerle Teixeira, and her two children against Amir, the deceased's brother, together with Behzad Faiz, the family accountant, and Marios Pittalis, the conveyancing solicitor who drafted the disputed documents. Parallel costs were sought by Simon Treherne and Helen Bunker, the independent administrators appointed in 2020 to replace the original executors following their removal.

Amir's counsel did not resist liability for indemnity costs, accepting that his client's wholly dishonest defence fell manifestly outside the norm of acceptable litigation conduct. The more contested questions concerned Mr Faiz and Mr Pittalis, both of whom sought to limit their exposure, with Mr Pittalis's counsel arguing he had been an innocent participant deceived by Amir and should instead recover his own costs from him.

Master Bowles rejected that characterisation. He found that Mr Pittalis's own attendance notes demonstrated detailed knowledge of multiple, mutually inconsistent draft declarations prepared to support whichever narrative best served Abbas's purpose of diminishing his estate, and that Mr Pittalis had actively maintained the validity of the declarations in witness evidence before reversing his position only once cross-examination at trial made the truth unavoidable. Mr Faiz, who did not appear at the costs hearing, was held to bear equivalent responsibility, having stood by with full knowledge of the deception rather than disclosing the truth at any stage.

Applying the principles in Excelsior Commercial & Industrial Holdings v Salsbury Hammer Aspden & Johnson and Esure Services v Quarcoo, the court held that conduct directed towards deceiving the court itself, rather than merely the parties to whom the documents were deployed, justified indemnity costs against all three men jointly and severally. Master Bowles declined to apply any discount for alleged duplication of work between the claimant's team and the independent administrators, or for delay in bringing proceedings, holding that such matters were properly for detailed assessment rather than summary determination.

A modest ten per cent allowance was made in respect of Mr Faiz and Mr Pittalis's liability for the claimant's costs, reflecting aspects of her claim unrelated to the validity of the declarations, given their more limited involvement compared with Amir's broader role in the related 1975 Act proceedings.

On payments on account, the court applied a recovery assumption of 80 per cent of claimed costs for the family's claim, reduced further to reflect duplication concerns, and 70 per cent for the administrators' costs after excluding administrative expenses not properly attributable to the trial. The resulting sums, exceeding £470,000 in aggregate, are payable by 21 September 2026, with both costs claims remaining subject to detailed assessment if not otherwise agreed.