Balber Kaur Takhar v Gracefield Developments Limited & Ors [2024] EWHC 1714 (Ch)

“Balber Kaur Takhar, the claimant, is the cousin of the third defendant, Parkash Kaur Krishan. For many years before 2004, they had not seen each other. In that year they became reacquainted. At the time, Mrs Takhar was suffering personal and financial problems. She had separated from her husband some five years previously. As part of the arrangements made between Mrs Takhar and her husband, she had acquired a number of properties in Coventry. When Mrs Takhar and Mrs Krishan met again, according to Mrs Takhar, she confided in her cousin and grew increasingly to depend upon her. Mrs Takhar claims that Mrs Krishan exerted considerable influence over her. The financial problems of Mrs Takhar arose mainly from the condition of the properties which she had acquired from her husband. Some were in a dilapidated condition. Payment for rates were in arrears. Bankruptcy for Mrs Takhar was in prospect. The Krishans provided financial help to Mrs Takhar. Dr Krishan, the second defendant and the third defendant’s husband, took on responsibility for negotiating with Coventry City Council over the rates arrears and the dilapidated state of some of the buildings. Then, in November 2005 it was agreed the legal title to the properties would be transferred to Gracefield Developments Ltd, a newly formed company, of which Mrs Takhar and the Krishans were to be the shareholders and directors [as happened in 2006]. Mrs Takhar claims that it had been agreed between her and the Krishans the properties would be renovated and then let. The rent would be used to defray the cost of the renovation, which, in the short term, would be met by the Krishans. Mrs Takhar would remain beneficial owner of the properties. The Krishans present a very different account. They claim that Gracefield was set up as a joint venture company. The properties were to be sold after they had been renovated. They were to be given an agreed value and this would be paid to Mrs Takhar after they had been sold. Any profit over would be divided equally between Mrs Takhar and the Krishans. They explain that Mrs Takhar agreed to these arrangements because planning permission for development had to be obtained in order to realise the value of the properties and this was an area in which Dr Krishan had experience, having already successfully developed his own medical centre.”

“Ultimately, our client alleges that you have defrauded her so as to obtain legal ownership of the Properties.”

“An agreement was drafted…which was signed. Whilst the draft contained some of the terms of the agreement set out above, it did not in any event comprehensively deal with all that had been agreed…This agreement is headed Profit Sharing Agreement and is purportedly dated 1st April 2006.”

“The Claimant has received no consideration for the transfer of the Properties. In addition to the reasons set out in the Particulars of Claim, the First Defendant would hold the Properties on resulting trust for the Claimant by operation of law owing to this gratuitous transfer.”

“Mrs Takhar’s case is she didn’t sign [the PSA] at all and she has never seen the agreement until this dispute arose. However, no case of forgery is advanced. In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy, I conclude that the Krishans’ evidence, which I believe anyway, should be accepted and that Mrs Takhar took the copy of the agreement that she was signed away, which was returned, probably by her in some way, duly executed to [SB’s] firm, which then ended up misfiled. At all events, I am satisfied that that was the agreement that was made. The properties were transferred by Mrs Takhar in to Gracefield’s name before the written joint venture agreement was prepared, and the only credible explanation that I have heard is that they were so transferred on the terms subsequently set out in the joint venture agreement, which were previously agreed orally.”

“From the beginning of 2005, the First and Second Defendants wrongfully conspired, combined together and agreed that they would by unlawful means: (i) procure the transfer of the Properties to a new company (which in the first instance was to be jointly owned by the Claimant and Defendants and which was in the event incorporated under the name of Gracefield Developments Ltd (‘Gracefield’)); (ii) obtain control of Gracefield; (iii) extract all alternatively most of the equity in the Properties for their own benefit; (iv) hide the misconduct by exaggerating the costs of managing the Properties and by forging documents.”

“[W]here it could be shown that a judgment had been obtained by fraud and no allegation of fraud had been raised at the trial which led to that judgment, a party seeking to set aside the judgment was not required to show that the fraud could not with reasonable diligence have been uncovered in advance of the obtaining of the judgment; therefore, absence of reasonable diligence was not of itself a reason for staying as an abuse of process a claim to set aside a judgment on the grounds of fraud; and accordingly, the claimant’s claim to set aside the judgment was not an abuse of process and [the Newey Judgment] refusing the defendants’ application would be restored .”

“I am satisfied, on the balance of probabilities, that not only did the Defendants have strong motive, and opportunity, to forge the document by transposition of the Claimant’s signature onto it from elsewhere (and that there is no evidence or sufficient reason to think that anyone at [SB’s firm] did so), but that they did do so. Based on all the evidence I have heard, the Defendants were in my judgment, on the balance of probabilities, responsible for the forgery of the signed profit sharing agreement document by adding the Claimant’s signature to a copy of it by transposition from [a] letter. This amounted, in the words of Aikens LJ in RBS, to “conscious and deliberate dishonesty”.”

“In any trial, and in a fraud trial in particular, the court is of course looking for independent and contemporaneous indicators of where the truth lies on crucial issues, such as in this case, whether there was a profit sharing (or “joint venture”) agreement. The forged document clearly evidenced this in the absence of forgery of Mrs Takhar’s signature on it. Had the Judge known that her signature on the copy of that before him had been forged, for which the Defendants were responsible (causing him also to weigh their oral evidence in the light of that knowledge), that plainly would have (in the words of Aikens LJ in RBS) ‘entirely changed the way in which the first court approached and came to its decision’ and it was plainly an ‘operative cause of the court’s decision to give judgment in the way that it did’….”

“Further or alternatively, and without prejudice to the relief sought in the foregoing, it is averred that by reason of the terms of the Agreement, Gracefield held the Properties pursuant to an express, alternatively, an implied trust for the benefit of the Claimant….”

“It is averred that the Krishans’ actions referred to at paragraphs 9-40 above constituted an unlawful means conspiracy, in that the Krishans conspired and combined by unlawful means to (a) procure the transfer of the Properties to Gracefield……(b) obtain control of Gracefield; (c) extract all, alternatively most of the equity in the Properties for their own benefit; and (d) disguise their misconduct and mislead the Court, by exaggerating the costs of managing the Properties and forging documents, and thereby procuring judgment in the Original Claim in their favour.”

“The composite reference to paragraphs to paragraphs 9 to 40 is inadequate to plead a claim in conspiracy. Many of these paragraphs do not refer to actions of Dr and Mrs Krishan at all and the plea that such of those paragraphs that do comprise allegations of ‘actions’ ‘constituted’ a conspiracy is legally nonsensical. If Mrs Takhar wishes to allege that unlawful acts were carried out by Dr and Mrs Krishan, they must be pleaded with specificity.”

“….based upon the Defendants’ actions taken after the commencement of claim 8BM30468 [i.e. the Original Proceedings] to procure judgment in their favour and to mislead the Claimant and the Court …..[and] no arguments will be made as to the effect of section 32 of the Limitation Act other than to the extent relevant to the conspiracy claim as explained…”

“Res judicata is a portmanteau term which is used to describe a number of different legal principles with different juridical origins. As with other such expressions, the label tends to distract attention from the contents of the bottle. The first principle is that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is ‘cause of action estoppel’. It is properly described as a form of estoppel precluding a party from challenging the same cause of action in subsequent proceedings…..[Next], there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties…’Issue estoppel’….[Last], there is the principle first formulated by Wigram V-C in Henderson v Henderson (1843) 3 Hare 100, 115, which precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones….”

“Arnold v National Westminster Bank plc [1991] 2 AC 93 is accordingly authority for the following propositions. (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”

“Res judicata and abuse of process are juridically very different. Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court’s procedural powers. In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation. That purpose makes it necessary to qualify the absolute character of both cause of action estoppel and issue estoppel where the conduct is not abusive.”

“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive… [T]here will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been…to render raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”

“…..[61] The cause of action to set aside a judgment in earlier proceedings for fraud is independent of the cause of action asserted in the earlier proceedings. It relates to the conduct of the earlier proceedings, and not to the underlying dispute. There can therefore be no question of cause of action estoppel. Nor can there be any question of issue estoppel, because the basis of the action is that the decision of the issue in the earlier proceedings is vitiated by the fraud and cannot bind the parties… If the claimant establishes his right to have the earlier judgment set aside, it will be of no further legal relevance qua judgment. It follows that res judicata cannot therefore arise in either of its classic forms. [62] The rule…in Henderson…that a party is precluded from raising in subsequent proceedings matters which were not but could and should have been raised in the earlier ones, is commonly treated as a branch of the law of res judicata…….[W]here a question was not raised or decided in the earlier proceedings but could have been, the jurisdiction to restrain abusive re-litigation is subject to a degree of flexibility which reflects its procedural character. This allows the court to give effect to the wider interests of justice raised by the circumstances of each case. [63] It is this flexibility which supplies the sole juridical basis on which the defendants can argue that the evidence of fraud must not only be new, but such as could not with reasonable diligence have been deployed in the earlier proceedings. It is also the basis on which Lord Briggs JSC, in his judgment on the present appeal, suggests a less absolute rule…I cannot accept either the defendants’ argument, or Lord Briggs JSC’s more moderate variant…[P]roceedings of this kind are abusive only where the point at issue and the evidence deployed in support of it not only could have been raised in the earlier proceedings but should have been: see Johnson…. Lord Bingham observed…it is ‘wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive’. The ‘should’ in this formulation refers to something… the law would expect a reasonable person to do in his own interest and…the efficient conduct of litigation. However, the basis on which the law unmakes transactions, including judgments..procured by fraud is a reasonable person is entitled to assume honesty in those with whom he deals. He is not expected to conduct himself or his affairs on the footing that other persons are dishonest unless he knows that they are. That is why it is not a defence to…deceit to say that the victim of the deceit was foolish or negligent to allow himself to be taken in…It follows that unless on the earlier occasion the claimant deliberately decided not to investigate a suspected fraud or rely on a known one, it cannot be said that he ‘should’ have raised it.”

“[F]irstly, there has to be a ‘conscious and deliberate dishonesty’ in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be ‘material’. ‘Material’ means that the fresh evidence that is adduced after the first judgment has been given is such that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court’s decision to give judgment in the way it did. Put another way, it must be shown the fresh evidence would have entirely changed the way in which the first court approached and came to its decision. Thus, the relevant conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.”

“[If] clearly established by fresh evidence that the court was deliberately deceived in relation to the credibility of a witness, a fresh trial will be ordered where there is a real danger…this affected the outcome of the trial.”

“I am inclined to agree…that the test was over-stated in the Royal Bank of Scotland case and that the proper approach is that laid down by the Court of Appeal in the Hamilton case.”

“I recognise the risk of frivolous or extravagant litigation to set aside judgments on the ground of fraud, but like other members of the court, I think that the stringent conditions set out by Aikens LJ in [Highland]…, combined with the professional duties of counsel, are enough keep it within acceptable limits. I do not think that the imposition of further conditions would be consistent with the long-standing policy of equity of reversing transactions procured by fraud.”

“If the claimant establishes his right to have the earlier judgment set aside, it will be of no further legal relevance qua judgment.”

“Fraud is a thing apart. This is not a mere slogan. It also reflects an old legal rule that fraud unravels all . . . Once fraud is proved, ‘it vitiates judgments, contracts and all transactions whatsoever’: Lazarus Estates Ltd v Beasley [1956] 1 QB 702, 712 per Denning LJ. Parties entering into a commercial contract will no doubt recognise and accept the risk of errors and omissions in the preceding negotiations, even negligent errors and omissions. But each party will assume the honesty and good faith of the other; absent such an assumption they would not deal.”

“The proper method of impeaching a completed judgment on the ground of fraud is by action in which, as in any other action based on fraud, the particulars of the fraud must be exactly given and the allegation established by the strict proof such a charge requires….That, however, there is jurisdiction in special cases to set aside a judgment for fraud on [appeal with] a motion for a new trial may be accepted…[H]owever…the necessity for stating the particulars of the fraud and the burden of proof are no whit abated and all the strict rules of evidence apply….Fraud is an insidious disease, and if clearly proved to have been used so that it might deceive the Court, it spreads to and infects the whole body of the judgment.”

“[18] There is no doubt that a judgment obtained by fraud can be set aside either by order made in a fresh action brought in fraud to impeach it or on appeal to the Court of Appeal by adducing fresh evidence sufficient to establish the fraud….Certainly, an appeal rather than a fresh action in fraud is the appropriate course where part only of a judgment is being impugned. A fresh action, if well-founded, is apt to set aside a judgment. Their Lordships know of no case, however, in which it has served some lesser purpose, say a reduction in the damages award…[my underline]…. [27] Even were the appellant on this appeal able to demonstrate to the necessary standard of proof that the respondent to some extent deliberately inflated his loss of earnings claim, their Lordships conclude that it would not be right to set aside the entire judgment. So far as the issue of liability was concerned, this was not, it must be observed, a close run case….”

“It was accepted before me that the findings of liability in the 2021 Judgment do not bind Ms Lakatamia (Hollington v Hewthorn [1943] KB 587). However, that does not mean that the contents of the judgment are without significance. The relevant principles were set out [by] Laurence Rabinowitz KC in JSC BTA Bank v Ablyazov [2016] EWHC 3071 (Comm), [24]…: “The application of the principle in Hollington has in recent years become substantially diluted. In particular: (l) Whilst a court cannot rely upon a bare finding of a prior court for example that a party has been negligent, it can rely upon the substance of the evidence which is referred to in the judgment of the prior court, including for example the contents of a document, the evidence given by a witness and the like: Rogers v Hotle [2015] QB 265, [40], [55]; (2) Whilst….a subsequent court cannot rely upon [non-binding opinion in an earlier one as it] must make its own findings of fact, a reference in a judgment to the substance of evidence is itself evidence which the judge in a later case can take into account "in like manner as he would any other factual evidence, giving to it such weight as he thinks fit" : Rogers (supra). (3) Moreover, if the judge in a later case concludes that the matters of primary fact recorded in an earlier judgment justify the conclusions reached in that judgment, he is entitled to reach the same conclusion: Otkritie International v Gersamia [2015] EWHC 821 (Comm), [25] (Eder J)”

“The court would also have to consider what consequential directions would be required for the hearing of the trial, and in particular, what directions are appropriate as regards the ‘fraudulent’ evidence. The deceiving party will, presumably, have to adduce a further witness statement to allow the new trial to proceed on honest evidence. Given that the procedure for setting aside the original judgment will have taken place in open court, it is inevitable that the tribunal on the new trial will be aware of the fraud perpetrated in respect of the original judgment, notwithstanding any prejudicial effect that may have.”

“113. As shown both in this trial and in the trial before Judge Purle, what has been called the “Balber Takhar Account” put forward by the Defendants to the Claimant during the course of their dealings contained deliberate untruths. It was demonstrably untrue in referring to the Second and Third Defendants having spent £556,000 from their own accounts management, professional fees, planning applications and surveys, etc. This document was prepared and presented to the Claimant by the Defendants with these false figures in it in order, as the Second Defendant described it to Judge Purle, to “get her off the fence and do something with these properties”... 116. Similarly, in order to try to persuade the Claimant to agree to sell the properties, the Defendants presented her with the “Options for Gracefield” document to try to achieve what they wanted. This also contained demonstrable untruths – for example in stating that a £60,000 corporation tax bill that would shortly need to be paid…. 119. These documents were created by the Defendants in an attempt to persuade the Claimant to act on the basis of the untruths in them. That is by no means the same, and is very far from, producing a forged document to a court to try to pervert the course of justice.”

“I am satisfied, on the balance of probabilities, that not only did the Defendants have strong motive, and opportunity, to forge the document by transposition of the Claimant’s signature onto it from elsewhere (and that there is no evidence or sufficient reason to think that anyone at [SB’s firm] did so), but that they did do so. Based on all the evidence I have heard, the Defendants were in my judgment, on the balance of probabilities, responsible for the forgery of the signed profit-sharing agreement document by adding the Claimant’s signature to a copy of it by transposition from the …letter. This amounted, in the words of Aikens LJ in RBS, to “conscious and deliberate dishonesty”.” (my underline) Mr Gasztowicz QC went on to find that this forgery was ‘material’ to the Purle Judgment stating at [137] (as quoted more fully above): “Had the Judge known that [the Claimant’s] signature on the copy..before him had been forged, for which the Defendants were responsible (causing him also to weigh their oral evidence in the light of that knowledge), that plainly would have (in the words of Aikens LJ in RBS) “entirely changed the way in which the first court approached and came to its decision”…”

“If a legal rule requires a fact to be proved (a ‘fact in issue’), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are zero and one. The fact either happened or it did not….If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of zero is returned and the fact is treated as not having happened. If he does discharge it, a value of one is returned and the fact is treated as having happened.”

“16. While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people’s memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate. 17. Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called ‘flashbulb’ memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description ‘flashbulb’ memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness’ memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory). 18. Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time. 19. The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party’s lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces. 20. Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often……when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness’s memory has been ‘refreshed’ by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness’s memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events. 21. It is not uncommon (and the present case was no exception) for witnesses to be asked in cross-examination if they understand the difference between recollection and reconstruction or whether their evidence is a genuine recollection or a reconstruction of events. Such questions are misguided in at least two ways. First, they erroneously presuppose that there is a clear distinction between recollection and reconstruction, when all remembering of distant events involves reconstructive processes. Second, such questions disregard the fact that such processes are largely unconscious and that the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth. 22. In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

“Gestmin is not to be taken as laying down any general principle for the assessment of evidence. It is one of a line of distinguished judicial observations that emphasise the fallibility of human memory and the need to assess witness evidence in its proper place alongside contemporaneous documentary evidence and evidence upon which undoubted or probable reliance can be placed. Earlier statements of this kind are discussed by Lord Bingham in his well-known essay ‘The Judge as Juror: The Judicial Determination of Factual Issues’ (from ‘The Business of Judging’, Oxford 2000). But a proper awareness of the fallibility of memory does not relieve judges of the task of making findings of fact based upon all of the evidence. Heuristics or mental short cuts are no substitute for this essential judicial function. In particular, where a party's sworn evidence is disbelieved, the court must say why…it cannot simply ignore the evidence.”

“‘Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person ? Secondly, is he, though a truthful person telling something less than the truth on this issue, or though an untruthful person, telling the truth on this issue ? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them ? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over much discussion of it with others ? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason, a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken ? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability…”

“[Y]ou perhaps begin to understand why I expressed a little pushback on courts giving such primacy to contemporaneous documents. They may be produced near the time, but..[are]…after the memory has been encoded, and if there is an encoding fallibility, which there may be for these different reasons, it infects the so-called contemporaneous record every bit as much as other reasons for the fallibility of recollection which affect it at the storage and retrieval stage.” 70.2 ‘Storage’: As Popplewell LJ stressed at ps.56-63 of his lecture, the main problem with storage of memories of events in long-term episodic memory is forgetting. A retrial after fraud by definition comes with substantial delay meaning witnesses forget things. Yet as Lord Bingham recognised decades ago, forgetting is not as linear as Lord Pearce described in Onassis: ‘with every day that passes the memory becomes fainter’. Research actually suggests memory loss is initially rapid and levels off over time. But it also again suggests what we ‘store’ depends on what matters to us, perspectives and wishful thinking. By reference to Leggatt J’s observation in Gestmin at [19]-[20], I would add if there is a dispute, those factors may be entrenched by the litigation and so storage may be distorted by a ‘litigation mindset’. 70.3 ‘Retrieval’ – As Leggatt J said in Gestmin, that same litigation mindset also affects how all witnesses retrieve memories in preparing their statements and then giving evidence. As Popplewell LJ said at para.40 of his lecture: “The semantic memory can also corrupt a recollection by affecting it at the retrieval stage….That applies to some extent to recall of events, where…semantic memory can do some filling in of the gaps where details are forgotten. It is especially important to keep in mind when witnesses are giving evidence of what they thought or believed at the time….As Leggatt J said in Gestmin ‘Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs’.”

“In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

“100 Case law emphasises the importance of documentary evidence in assessing the credibility of oral witnesses. In Onassis…at 431, Lord Pearce, having reviewed the various reasons that a witness’ oral testimony might not be credible, stated, “All these problems compendiously are entailed when a judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.”

“It is frequently very difficult to tell whether a witness is telling the truth or not and where there is a conflict of evidence… reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth’. 101 That approach was approved by the Privy Council in Grace Shipping Inc v C F Sharp & Co (Malaya) Pte Ltd [1987] 1 Lloyd’s Rep 207 and applied in a number of subsequent cases. For example, in Goodman v Faber Prest Steel [2013] EWCA Civ 153 the Court of Appeal held that the trial judge had erred in accepting a personal injury claimant’s evidence of pain without dealing with contradictory documentary evidence and explaining why the claimant’s evidence was to be preferred. Moore-Bick LJ applied the approach of Robert Goff LJ and stated that ‘memory often plays tricks and even a confident witness who honestly believes in the accuracy of his recollection may be mistaken. That is why in such cases the court looks to other evidence to see to what extent it supports or undermines what the witness says and for that purpose contemporary documents often provide a valuable guide to the truth.”….. 103 Although said in relation to commercial litigation, I consider that the observations of Leggatt J in Gestmin….at [15]—[22] have much to commend them. His statement at para 22 appears to me especially apt…”

“In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including e-mails and instant messaging. Those tend to be the documents where a witness’s guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence. The classic statement of Robert Goff LJ in Armagas…is frequently, indeed routinely, cited…It is therefore particularly important that, in a case where there are contemporary documents which appear on their face to provide cogent evidence contrary to the conclusion which the judge proposes to reach, he should explain why they are not to be taken at face value or are outweighed by other compelling considerations….”

“[T]he observations in Gestmin were expressly addressed to commercial cases. For a paradigm example of such a case, in which a careful examination of the abundant documentation ought to have been at the heart of an inquiry into commercial fraud, see Simetra…and the apposite remarks of Males LJ at paras. 48-49. Here, by contrast, the two parties were private individuals living together for much of the relevant time. That fact made it inherently improbable that details of all their interactions over the creation of the screenplay would be fully recorded in documents….”

“In a case such as the present, where the events in question took place over 9 years before trial and occurred in a narrow period of around 3 weeks, the salutary warnings about the recollections of witnesses in Gestmin and Blue are pertinent. It was therefore of paramount importance for the Judge to test that evidence against the contemporaneous documents and known or probable facts if and to the extent that it was possible to do so. We say, ‘if and to the extent that it was possible to do so’, because it is important to bear in mind that there may be situations in which the approach advocated in Gestmin [at [22]] will not be open to a judge, or, even if it is, will be of limited assistance. There may simply be no - or no relevant - contemporaneous documents, and even if there are, the documents themselves may be ambivalent or otherwise insufficiently helpful. The case could be one about an oral promise which turns entirely on the word of one person against another’s, and the uncontested facts may well not point towards A’s version of events being any more plausible than B’s. Even in a case which is fairly document-heavy (as this one was) there may be critical events or conversations which are completely undocumented….”

“Such documentation as there is tends to favour the defendant, but that cannot be conclusive where the nature of the documents is said to be to assist in presentation of a false picture to the outside world and not to reflect the arrangements privately agreed.”

“Faced with documentary lacunae…the judge has little choice but to fall back on considerations such as the overall plausibility of the evidence; the consistency or inconsistency of the behaviour of the witness and other individuals with the witness’s version of events; supporting or adverse inferences to be drawn from other documents; and the judge’s assessment of the witness’s credibility, including his or her impression of how they performed in the witness box, especially when their version of events was challenged in cross-examination. Provided that the judge is alive to the dangers of honest but mistaken reconstruction of events, and factors in the passage of time when making his or her assessment of a witness by reference to those matters, in a case of that nature it will rarely be appropriate for an appellate court to second-guess that…”

“(T)he judge seems rather to have compartmentalised his treatment of the appellants’ 16 points.…. Put another way, what is lacking in the judgment is an element of standing back and considering the effects and implications of the facts he had found taken in the round. Let me say at once that this approach would not necessarily be fatal to the findings he has made. It would, in my judgment, depend on whether it could properly be said that the somewhat piecemeal approach that he adopted unfairly affected the judge’s evaluation of the facts….”

“(1) The burden of proof rests exclusively on the person making the claim (she or he who asserts must prove), who must prove the claim to the conventional civil standard of a balance of probabilities; (2) Findings of fact must be based on evidence, including inferences that can properly (fairly and safely) be drawn from the evidence, but not mere speculation (Re A (A child) (Fact Finding Hearing: Speculation) [2011] EWCA Civ 12, per Munby LJ); (3) The court must survey the “wide canvas” of the evidence (Re U, Re B (Serious injuries: Standard of Proof) [2004] EWCA Civ 567 at [26] per Dame Elizabeth Butler-Sloss P (as then was)); the factual determination “must be based on all available materials” (A County Council v A Mother and others [2005] EWHC Fam. 31 at [44], per Ryder J (as then was)); (4) Evidence must not be evaluated “in separate compartments” (Re T [2004] EWCA Civ 558 at [33], per Dame Elizabeth Butler-Sloss P), but must “consider each piece of evidence in the context of all them other evidence” (Devon County Council v EB & Ors. [2013] EWHC Fam. 968 at [57], per Baker J (as then was)); such “context” includes an assessment of (a) inherent coherence, (b) internal consistency, (c) historical consistency, (d) external consistency/validity – testing it against “known and probable facts” (Natwest), since it is prudent “to test [witnesses’] veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case” (The Ocean Frost)… (5) The process must be iterative, considering all the evidence recursively before reaching any final conclusion, but the court must start somewhere (Re A (A Child) [2022] EWCA Civ 1652 at [34], per Peter Jackson LJ… (6) The court must decide whether the fact to be proved happened or not. Fence-sitting is not permitted (Re B… at [32], per Lady Hale); (7) The law invokes a binary system of truth (Re B at [2], Lord Hoffmann): (8) There are important and recognised limits on the reliability of human memory….(Gestmin…); and the court should be wary of “story-creep”, as memory fades and accounts are repeated over steadily elapsing time (Lancashire County Council v C, M and F (Children – Fact-finding) [2014] EWFC 3 at [9], per Peter Jackson J); (9) The court “takes account of any inherent probability or improbability of an event having occurred as part of the natural process of reasoning” (Re BR [2015] EWFC 41 at [7], per Peter Jackson J); “Common sense, not law, requires… regard should be had, to whatever extent appropriate, to inherent probabilities” (In re B at [15], per Lord Hoffmann); (10) Contemporary documents are “always of the utmost importance” (Onassis…per Lord Pearce), but in their absence, greater weight will be placed on inherent probability or improbability of witness’s accounts… (Natwest at [50])… (11) The judge can use findings or provisional findings affecting the credibility of a witness on one issue in respect of another (Arkhangelsky); (12) However, the court must be vigilant to avoid the fallacy that adverse credibility conclusions/findings on one issue are determinative of another and/or render the witness’s evidence worthless. They are simply relevant: “If a court concludes that a witness has lied about a matter, it does not follow that he has lied about everything.” (R v Lucas [1981] QB 720, per Lord Lane CJ); Similarly, Charles J: “a conclusion that a person is lying or telling the truth about point A does not mean that he is lying or telling the truth about point B...” (A Local Authority v K, D and L [2005] EWHC 144 at [28]). What is necessary is (a) a self-direction about possible “innocent” reasons/explanations for the lies (if that they be); and (b) a recognition that a witness may lie about some things and yet be truthful “on the essentials … the underlying realities” (Re A (No.2) [2011] EWCA Civ 12 at [104]. (13) Decisions should not be based ‘solely’ on demeanour (Re M [2013] EWCA Civ 1147 at [12], per Macur LJ); but demeanour, fairly assessed in context, retains a place in the overall evaluation of credibility: see Re B-M, at [23] and [25]: “a witness’s demeanour may offer important information to the court about what sort of a person the witness truly is, and consequently whether an account of past events or future intentions is likely to be reliable”; so long as “due allowance [is] made for the pressures that may arise from the process of giving evidence”

“… an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.”

“….c. The task of the Court is always to go on looking for a kernel of truth even if a witness is in some respects unreliable….. d. Exaggeration or even fabrication of parts of a witness' testimony does not exclude the possibility that there is a hard core of acceptable evidence within the body of the testimony…. e. The mere fact that there are inconsistencies or unreliability in parts of a witness' evidence is normal in the Court's experience, which must be taken into account when assessing the evidence as a whole and whether some parts can be accepted as reliable… f. Wading through a mass of evidence, much of it usually uncorroborated and often coming from witnesses who, for whatever reasons, may be neither reliable nor even truthful, the difficulty of discerning where the truth actually lies, what findings he can properly make, is often one of almost excruciating difficulty yet it is a task which judges are paid to perform to the best of their ability…”

“There is only one rule of law, namely that the occurrence of the fact in issue must be proved to have been more probable than not. Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to the inherent probabilities….”

“Lord Bingham said: ‘An English Judge may have a shrewd idea of how a Lloyd’s broker, or a Bristol wholesaler or a Norfolk farmer might react in some situation, but he…should feel very much more uncertain about the reaction of a Nigerian merchant or an Indian ship’s engineer or a Yugoslav banker’. Speaking for myself I’m not sure I would be confident even about the Lloyds broker, let alone the Bristol wholesaler or Norfolk farmer.”

“It is well established that ‘cogent evidence is required to justify a finding of fraud or other discreditable conduct’ per Moore-Bick LJ in Jafari-Fini v Skillglass [2007] EWCA Civ 261 at para.73. This principle reflects the court's conventional perception that it is generally not likely that people will engage in such conduct: “where a claimant seeks to prove a case of dishonesty, its inherent improbability means that, even on the civil burden of proof, the evidence needed to prove it must be all the stronger”, per Rix LJ in Markel v Higgins, [2009] EWCA 790 at para 50. The question remains one of the balance of probability, although typically…(as cited by Lord Nicholls in In re H, [1996] AC 563 at p.586H), “The more serious the allegation the more cogent the evidence required to overcome the unlikelihood of what is alleged and thus to prove it”

“Once other findings of dishonesty have been made against a party, or he is shown to have given dishonest evidence, the inherent improbability of his having acted dishonestly in the particular respect alleged may be much diminished and will need to be reassessed.”

‘if a court concludes that a witness has lied about a matter, it does not follow that he has lied about everything’

“I remind myself that witnesses can often lie and for different reasons. Lies in themselves do not necessarily mean that the entirety of the evidence of a witness should be rejected. A witness may lie in a stupid attempt to bolster a case, but the actual case nevertheless remains good irrespective of the lie. A witness may lie because the case is a lie.”

“[S]ome of [the witness’] conduct was not only discreditable but dishonest. However, that does not necessarily mean that all his evidence in this case is to be rejected. The fact that an individual has acted dishonestly does not mean that he is therefore dishonest in all that he says or does.”

“...There was agreement on the principles that: (i) Just because a witness is lying on one issue does not mean that the entirety of their evidence is to be rejected; (ii) It should be borne in mind that a witness may lie to bolster a true story, or to try to bolster a false one; (iii) A witness’s evidence may be wholly wrong without his or her having lied—their recollection may be distorted by reinterpretation of what happened, or even delusion.”

“Where a judge draws inferences from his findings of primary fact …dependent on his assessment of the credibility or reliability of witnesses and of the weight to be attached to their [oral] evidence, an appellate court may have to be similarly cautious in its approach to his findings of such secondary facts and his evaluation of the evidence as a whole…Where findings of fact based entirely or almost entirely on undisputed documents, one will be close to the latter end of the spectrum." Indeed, as I shall discuss below, in Enal, Sir Nicholas Patten giving the Privy Council’s judgment at [37]-[38] moved away from older more restrictive authorities on drawing inferences of a transferor’s intention when transferring property to endorse this more modern approach based on all the evidence as articulated in Lavelle v Lavelle [2004] EWCA Civ 223 at [19] by Lord Phillips: "…[I]t is not satisfactory to apply rigid rules of law to the evidence that is admissible to rebut the presumption of advancement. Plainly, self-serving statements or conduct of a transferor, who may long after the transaction be regretting earlier generosity, carry little or no weight. But words or conduct more proximate to the transaction itself should be given the significance they naturally bear as part of the overall picture." On that ‘overall picture’, as there is rarely direct evidence (e.g. admissions) of fraud or dishonesty, inferences of them must be based on all the evidence and primary facts. As noted in Kekhman, Moore-Bick LJ said in Jafari-Fine at [76]: “Whenever an allegation of fraud or similar misconduct is made it is particularly important to consider the whole of the evidence before reaching a final conclusion, to test the oral evidence by reference to any contemporaneous documents and to consider the inherent probabilities….”

“[78] As is often the case in cases involving allegations of civil fraud and questions of knowledge, much of the evidence in the present case is circumstantial evidence. The nature of circumstantial evidence is that its effect is cumulative, and the essence of a successful case based on circumstantial evidence is that the whole is stronger than individual parts. In relation to circumstantial evidence and the drawing of inferences…… [Rix LJ said in JSC v Ablyazov [2012] EWCA Civ 1411 at [52]]: “….The essence of….successful circumstantial evidence is the whole is stronger than individual parts. It becomes a net from which there is no escape…..[A] jury may quite properly draw the necessary inference having regard to the whole of the evidence, whether or not each individual piece of evidence relied upon is proved beyond reasonable doubt, provided they reach their conclusion upon the criminal standard of proof. Indeed, the probative force of a mass of evidence may be cumulative, making it pointless to consider the degree of probability of each item of evidence separately. ’” [79] Of course, what Rix LJ stated in Ablyazov…was stated in the context of contempt where the standard of proof is to the criminal standard…where the ‘net’ metaphor is particularly apt. However, care needs to be taken in utilising [that] metaphor where the standard is th[e] balance of probabilities. Something can be proved on balance of probabilities even if all other possibilities have not been excluded, which is why Lord Millett in Three Rivers referred to some fact which tilts the balance and justifies an inference of dishonesty. Nevertheless, the points that are made that it is the essence of a successful circumstantial case that the whole is stronger than the individual parts, and that circumstantial evidence works cumulatively, are equally apt in the context of civil fraud.”

“It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

“[When he] said that it was not open to the court to infer dishonesty from facts which have been pleaded but are consistent with honesty, he was not laying down a general rule that can affect a case like this where there were multiple allegations founding an inference of dishonesty, many of which are themselves allegations of dishonesty that have been found proven.”

“[S]ince the final conclusion must be capable of accommodating any facts which are admitted or which are established by evidence which is not capable of being seriously challenged, such facts provide a useful starting point for the assessment of the more controversial parts of the evidence.”

“Regard may be had, in particular, to the following— (a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness; (b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated; (c) whether the evidence involves multiple hearsay; (d) whether any person involved had any motive to conceal or misrepresent matters; (e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose; (f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight.”

“Where the question is one of credibility of witnesses, and competing accounts of events (or the extent of a person’s knowledge and involvement) I accept that evidence untested by cross-examination is to be given less weight, but it does not follow that it should be given no weight whatsoever having regard to the circumstances of the case, and any reasons given as to why a particular witness or witnesses were not called to give oral evidence.”

“[I]n Wiszniewski v Manchester HA (1998) Lloyd's Rep Med 223. Brooke LJ set out the…principles (at 240)… “(1)…[A] court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in the action. (2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

“The ability to tell a coherent, plausible and assured story, embellished with snippets of circumstantial detail and laced with occasional shots of life-like forgetfulness is very likely to impress any tribunal of fact. But it is also the hallmark of the confidence trickster down the ages.”

‘I can recall this shift in the tenor and nature of her conversations quite distinctly because it was a marked change’ as being inconsistent with her own words and suggestive of having been drafted by someone else. I agree. But I would also make the same point about the wording of the 4th July 2005 letter e.g. ‘I write to formally advise you that I am currently in negotiations to develop the above sites’

“When the company was set up 3 years ago the aim was to stop Balber losing the properties in Coventry and to pull her out of debt and prevent bankruptcy. At that stage, the properties had no value and were a liability. The Council was considering Compulsory Purchase Orders and she would have received nothing whatsoever in return.”

“Because an expert’s task is to assist the judge in matters outside the judge’s expertise, and it is the judge’s role to decide the case, the quality of an expert’s reasoning is of prime importance. This court gave guidance on the role of the expert in Kennedy v Cordia [2016] 1 WLR 597…[at 48]: “An expert must explain the basis of his or her evidence when it is not personal observation or sensation; mere assertion or bare ipse dixit carries little weight, as the Lord President (Cooper) famously stated in Davie v Magistrates of Edinburgh 1953 SC 34, 40. If anything, the suggestion that an unsubstantiated ipse dixit carries little weight is understated; in our view such evidence is worthless…. Wessels JA stated the matter well in….South Africa in Coopers…Ltd v Deutsche Gesellschaft 1976 (3) SA 352, 371……Proper evaluation of the opinion can only be undertaken if the process of reasoning which led to the conclusion, including the premises from which the reasoning proceeds, are disclosed by the expert. As Lord Prosser pithily stated in Dingley v Chief Constable 1998 SC 548, 604: As with judicial or other opinions, what carries weight is the reasoning, not the conclusion.”

“…. It seems to me most unlikely that Mrs A or anyone at X would have [forged the PSA]…It would elevate an act of negligence (…never...alleged) into a serious fraud and attempt to pervert the course of justice (which if discovered would have been added on top of such negligence). Furthermore, if they had lost a copy which had been returned signed and wanted to behave dishonestly… they could simply have continued with the line that they had no copy of it, and said that it must therefore never have been returned, there being no documentary or other independent evidence to the contrary….In contrast, the Defendants had every reason to forge [it].”

“[Claimant]…[Y]ou are spending a really excessive amount. [Mrs Krishan] We are yes, we have to, we have got another six months at least of this, all right and then you know we should be able to sort of move forward, all right. These things just take time, you know, but I looked at them yesterday and I thought there is no way my sister [a reference to the Claimant, even though they were cousins] is actually going to get caught up in the hands of Inderjit [the Claimant’s brother-in-law, known in the family as ‘Ian’] because I know how you feel and I don’t want anybody associated with him tackling it because you know what they’ll do, they’ll sub let it to him or they’ll give it further on to him, and I am not having that. I think – I don’t know why but it’s a question of family honour, almost.”

“[Mrs Krishan] I don’t do anything without you, but I do protect your interests…[T]he only thing that really mattered to me was when you told me you didn’t really want to lose it, and I thought well you’ve got to have something as well. What bothered me was – well I’ve got so much and you’ve got nothing really in that sense.” 121.2 Secondly, Mrs Krishan said the Properties in 2005/06 were ‘worthless’: First Call: “[Claimant] I’m not sure what choice was there [to do with the Properties] to be quite honest. [Mrs Krishan] Well precisely, because by the time you paid everything back there was nothing there. When you look at the balance sheet, right, if you had paid everything back, everything owing to the Council, everything owing to everybody, right, I mean they were actually worthless on paper. There was nothing there. I know you like to think that, yes, you know, they are there, but they are actually worthless.” 121.3 Thirdly, Mrs Krishan effectively said they had spent £500,000: First Call: “[Claimant] Suddenly you see you have spent £500,000, I mean that is a lot of money, that is a huge amount. [Mrs Krishan] I know it is. [Claimant] That is a humungous amount of money. [Mrs Krishan] Yes. But it was either that and making them viable or letting them go under completely.” 121.4 Fourthly, Mrs Krishan told Claimant she risked being made bankrupt: Second Call: “[Claimant] I am just concerned with all the money that you are…you know…[Mrs Krishan] Well yes you have…to do things, you know to build up anything you have to do that…I mean how else could we have done it, right. The only other alternative open to us was that they go, and that they take them off [a reference from before to the Council] and you know, they pay some of the debts and they [sic – presumably she meant ‘you’] are made bankrupt.” 121.5 Fifthly, that the Krishans had no benefit themselves from the Properties: Second Call “[Claimant referring to estranged husband ‘Bill’ working hard] [Mrs Krishan] “But hang on a minute….Why do you think we have fought so hard for you not to have lost them and to get them to this stage where they are viable. It’s not been any benefit to us…I have no vested interest in them, but I know you have because that’s your life, all right and you think clearly some time why. I mean they were at a stage where you would have lost them, whether you know, how would you then look up to Bill, your children, everybody, right.”

“…[A]lthough we are handling it the property is yours.”

“[Claimant] I have been very appreciative, I have been very, very appreciative, in fact you don’t know how appreciative I am, okay. I don’t think you realise that. [Mrs Krishan] Really, when the first lot of CPO orders came, maybe, you know, it would have been better had we not done anything and they had just been taken off, and it would have left you absolutely nothing.” [At the end, just as the Claimant was saying goodbye, Mrs Krishan added the following]: “[W]e are still sort of going back to the stage where we are saddled with CPOs and everything else again.”

“Once other findings of dishonesty have been made against a party, or he is shown to have given dishonest evidence, the inherent improbability of his having acted dishonestly in the particular respect alleged may be much diminished and will need to be reassessed.”

“If proven it was a very serious, pre-meditated, carefully planned and executed fraud which was instrumental in the defeat of Mrs Takhar’s claim, and plainly aimed from start to finish at deceiving the court about the central issue in the case.”

“[The Krishans] not only forged a key document in support of their case with a view to deceiving the court in the original action (which worked), but also went on oath in the present action to lie about what they had done and to seek to deflect blame for the forgery onto third party professionals, who were not before the court.”

“…basically in reasonable structural condition and has the potential for renovation/conversion…[but] the costs will be relatively high and…it may be more cost-effective to demolish the structure and to redevelop the site. [It is] in a fairly prime location and has the potential for either a community facility as intended or alternative uses such as mixed retail and rental.”

“It was clear that neither he nor his mother possess the funds to develop the sites themselves and are unlikely in my view to be able to cover any future building maintenance costs or premises costs for such large sites in such poor condition. Given his desire to lease the properties this means he needs to bring in significant long-term streams of income or sell the sites on.”

“As the medical practitioner involved in [her] care…I can confirm that during the period of late 2003 to 2005, she was suffering significant stress in relation to a family member. This was her son Sukhjeet, who I saw at the end of 2003, suffering from psychosis…”

“At the time, she was also experiencing difficulties with her younger son, Arun, for severe headaches and he was requiring cranial osteopathy….”

“[M]y life was slowly unravelling from 2000 onwards. By 2004, my marriage had fallen apart in all but name. I was in debt, but didn’t really want to ask my eldest son for help. My two younger sons were both ill and required constant care. My daughter had gotten married to someone whom I thought would be bad for her and which ultimately ended up in divorce....”

“[A] we grew closer and closer, I started to confide in Parkash about my personal problems. I told her about my struggles with Bill, my worries about my children (particularly Arun), my health issues and my money problems. I felt really comfortable sharing these things with her. I had never shared so much with anyone before and it felt really good opening up about these very private aspects of my life.”

‘we had never really talked about her wealth much before’

“Obtain a solicitor’s letter granting him Power of Attorney to negotiate on behalf of his mother, the registered legal owner, and forward this to Andy Duncan by September.”

“Dear Sir/Madam, Re: Former Co-Op Emporium…and Ritz Cinema Following your meeting last week with my son on the 30th June I write to formally advise you that I am currently in negotiations to develop the above sites and would be grateful if we could arrange a meeting to sort the matter out. I have authorised Dr Krishan to contact you on [my ?] behalf to arrange a mutually convenient time for this meeting as soon as possible. Yours Sincerely [her signature] B.K. Takhar (MRS). ”

“JD, Dr K, Mrs K, Mrs Takhar relative. Mrs Balber Takhar not seen for 33 years. Needing help with bankruptcy and eviction. Properties in Coventry – CPOs losing them. Has no family or no help – CCJs, no family support, violent marriage, divorce. Demanding help handed deeds and was very insistent. Verbal discussion agreed with 50/50 share and further written agreement sorted. Deal was in her favour as Dr K to do finance. Need an architect. JD to be contacted. Jean to remind JD.”

“[I]n fact, on July 2nd – I will never forget that because we sat down and that 50-50 agreement [sic] and how it would help her. She was adamant we had to try and do something and in fact she sat on the computer and a letter was written and she wanted my husband to actually sort things out….”

“[T]he buildings had become a liability and if the Council was not properly dealt with, my mother would be left with huge debts and legal costs. [Dr Krishan] in particular weighed in with what appeared to be quite detailed knowledge of the CPO procedure and warned that my mother could be left bankrupt and homeless. Prison was even mentioned. The Krishans then said they had experience in fighting CPOs, having done so in relation to some land on which they were building their new Mayfield Medical Centre. They told us about how they knew inside out the tricks the Council would use… I remember how passionate Parkash in particular was, and how she said that they would not allow the Council to take away her ‘children’s birthright’ and they would fight my mother’s corner with all the experience that they had built in property development. They told my mother that it was ‘payback time’ for all that she had done for Parkash in her childhood.”

‘the buildings had become a liability and if the Council was not properly dealt with, the Claimant would be left with huge debts and legal costs’

‘needing help with bankruptcy and eviction’ and ‘CPOs losing them’ (not ‘threatened’ or ‘likely’ – whatever exactly was said and whoever said it to Mr Davies in the circumstances). Fourthly, it is also corroborated by Mrs Krishan’s comments in June 2008: ‘When the first lot of CPO orders came’ (not ‘were threatened’) and ‘back to [being] saddled with CPOs….again’

“I recall asking [the Krishans] what would happen to the Properties when they were transferred to the company. The[y] had been in the family for many years and I was anxious to make sure they stayed that way. So I needed to know..whatever the Krishans did with the[m], they would remain in my ownership. [They b]oth repeatedly assured me that the transfer of the Properties was only a formality and that of course they would still be mine.”

‘Although we are handling it the property is yours’

“Ultimately, however, I felt trapped. I was too afraid that I would lose the Properties to the Council and end up, as the Krishans described it, penniless and homeless. I was too tired to face this problem on my own, but Parkash’s warnings, echoing my own concerns, that I should not be burdening Bobby with my problems were ringing in my head. Moreover, what the Krishans were offering was exactly what I needed help with – they seemed to be offering a perfect solution to my problems, because I could both ensure that the Properties were put back into good condition, but also keep them in the ownership of me and my family. So I eventually agreed to accept their help”

‘we did say it would be 50/50 on what we did’ as the Claimant acknowledged. However, as I said at paragraph 174 above, that same week, Dr Krishan had arranged the incorporation of Gracefield with the Claimant to have 50% of the shares and the Krishans 25% each. Despite what Dr Krishan told SR in the Claimant’s absence on 18th November, there is no clear reference in Mr Davies’ note to ‘sale’

“On 20th February 2006, I had a further meeting with the Krishans and the Claimant. In advance of that meeting, I made a note of the consequences of the properties being transferred at either £100,000 (being their value in the event that they were subject to a Compulsory Purchase Order) or £300,000 (being the estimated market value. Both of these values had been advised to me by Dr Krishan and, I believe, were what had been agreed by all concerned as representing fair and realistic values.”

‘we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value’. 214.2 The Claimant recalls after seeing (I will find, both) those letters, she spoke to Mrs Krishan, who said ‘They were just paper figures, set because that was the price the Council had fixed. She again said I had to do this to save the Properties’, entirely consistent with SB’s two letters and indeed also I find Mrs Krishan reminding the Claimant in 2008: “When the first lot of CPO orders came’ and ‘[We are] going back to the stage where we are saddled with CPOs… again”: implying there had previously been CPOs.

“With regards to the payment for the properties, the sum of £100,000 will be transferred to a loan account in your name and the purchase price of the property will be paid out to you once the redevelopment of each plot is completed and the new properties have been sold. In addition, I am also preparing a profit share agreement which will show that additional sums are paid out to you in the first instance as soon as each development is sold. This is due to the fact that we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value. The profit shares allocated to you first will be as follows: 3 houses - £20,000 each; Ritz Cinema - £60,000. Co-Op £80,000. I would hope that the agreement will be sent to you within the week.”

“Please find enclosed a copy of the letter I have today sent to the solicitor advising him of the sale of the properties into Gracefield. He will no doubt be contacting you shortly to confirm you are happy with the instructions. With regards to the payment for the properties, the sum of £100,000 will be transferred to a loan account in your name and the purchase price of the property will be paid out to you once the redevelopment of each plot is completed and the new properties have been sold. In addition, I am also preparing a profit share agreement which will show that additional sums are paid out to you in the first instance as soon as each development is sold. This is due to the fact that we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value. The profit shares allocated to you first will be as follows: 3 houses - £20,000 each; Ritz Cinema - £60,000. Co-Op £80,000. I would hope that the agreement will be sent to you within the week. I trust this is all clear however, should you have any further queries, please do not hesitate to contact me. Kind Regards…..” (my underline). This not only referred to ‘sale’ as opposed to ‘transfer’ at £100,000, but also its payment to a loan account. It also explicitly told her (I find for the first time) of the prospect of later sale of the Properties after refurbishment – the opposite of what she (let alone Bill) wanted. However, rather than ask SB about this, such was her implicit trust in Mrs Krishan, the Claimant asked her instead. She visited Mrs Krishan on 24th March 2006 to query it, yet then signed this letter to Mr Whiston, again in terse professional language I accept (see paragraph 99) was drafted by Mrs Krishan (who was copied into SB’s letter to the Claimant): “I have met and discussed the best way forward for redevelopment of my properties with [SB] and you will have received a letter dated the 15th March [from her]. I confirm that the [Shops] are to be sold to the company at a value of £10,000 each pre-31st March 2006. I also confirm that the former Ritz Cinema and the Co-Op site are to be sold to the company for £30,000 and £40,000 respectively, post 6th April 2006 but before the 30th April….”

“You will appreciate that as I have acted for Doctor and Mrs Krishan (albeit in a personal capacity) in the past, there may well arise a conflict of interest if I act for you in connection with the transfers of the properties to the company. Accordingly, I need to advise you to take independent advice from another solicitor in respect of the proposed transactions. If you do not wish to take such advice, I would be grateful if you would telephone my office immediately upon receipt of this letter to confirm that you wish me to proceed with the transactions and then confirm the same in writing.”

“Thank you for your letter received this morning. I wish to confirm that there is no conflict of interest regarding the transfer of the properties to the above-named company. As requested, I have spoken to your secretary of the same and am forwarding this letter accordingly.”

“Thank you for your letter of 6th April. I think that you have misunderstood the situation, as I was not implying that there was a conflict of interest between yourself and Doctor and Mrs Krishan. What I was suggesting was that there may be a conflict of interest for me in acting on your behalf and protecting your interest and acting for Doctor and Mrs Krishan in protecting their interest. I have taken your letter as approval to continue with the transfers and that in this respect you will act on your own behalf. I will let you have further transfers for signature in respect of the remaining properties in due course.”

“THIS PROFIT SHARE AGREEMENT is made on 1 April 2006 BETWEEN Balber Takhar….(‘Mrs Takhar’) of one part and Gracefield Developments Limited….(‘the company’) of the other part….WHEREAS (b) Mrs Takhar has sold 3 lots of properties to the company. The value placed on these properties is £100,000 which represents the value of compulsory purchase orders. NOW THIS DEED WITNESSETH: 2. The company covenants with Mrs Takhar the following: (a) The £100,000 purchase price of the properties shall be split… £30,000 – three residential properties [i.e. ‘the Shops’]; £30,000 Ritz Cinema Site £40,000 Former Co-Op Site. This sum shall be placed on a loan account within the company and shall be paid to Mrs Takhar on the completion and sale of each site. (b) Further sums shall be payable to Mrs Takhar which represent deferred consideration for an uplifted value of the properties at the time they were transferred to the company. Again these sums shall be payable on the completion and sale of each of the sites: £60,000 - three residential properties (£20,000 each) £60,000 - Ritz Cinema Site…..£80,000 - Former Co-Op Site. Mrs Takhar shall also receive 50% of the profits on the sale of each site. The treatment of the payment of the profits will be discussed at the relevant time and take into account Mrs Takhar’s personal taxation position…………….. B TAKHAR……… .FOR AND BEHALF OF GRACEFIELD DEVELOPMENTS LTD …. DIRECTOR….SECRETARY….”

‘Purchasers are paying a premium for derelict properties or properties in need of refurbishment, with or without planning consent’

“In addition, all bills and liabilities paid for management, authorisation, architects, quantity surveyors, structural engineers, planning applications, designs, air and noise surveys etc. Currently out of Premier and Private accounts £556,000 plus two more current bills outstanding to Structural Engineers for further work of approx. £2,000 and £7,600 to Loveitts for marketing purposes. Total so far: £565,600. Further work being done by Architects, Quantitty Surveyors, Engineers and Planners being done to ascertain feasibility and current costs as of today of developing sites.”

“[W]e have got another six months at least of this, all right and then you know we should be able to sort of move forward, all right. These things just take time, you know, but I looked at them yesterday and I thought there is no way my sister is actually going to get caught up in the hands of Inderjit [‘Ian’] because I know how you feel and I don’t want anybody associated with him tackling it because you know what they’ll do, they’ll sub let it to him or they’ll give it further on to him, and I am not having that. I think – I don’t know why but it’s a question of family honour, almost.”

“The properties be sold through auction as originally planned but will now yield a lower return.”

“[Claimant] I have been very appreciative…[Mrs Krishan] Really, when the first lot of CPO orders came, maybe, you know, it would have been better had we not done anything and they had just been taken off, and it would have left you absolutely nothing.” [At the end, just as the Claimant was saying goodbye, Mrs Krishan added]: “[W]e are still sort of going back to the stage where we are saddled with CPOs and everything else again.”

“The profit agreement is as in the agreement [i.e. a reference to what she had told J as recorded in the earlier note]. As to what happened to it, I am not sure but it was in the 2005 and 2006 that it was agreed.” (my underline) J responded by asking whether the PSA had been signed, Mrs Krishan replied: “As far as we know the agreement was signed. Not sure where it is or who has copies.”

“...was advised [from context, by the Krishans] not to contact Coventry City Council as she would be seen as influencing a compulsory purchase order procedure initiated by the Council. She was told on numerous occasions that there was an ongoing legal battle with the Council regarding CPOs.”

“Subject: Gracefield: Dear [SB], I have been going through some of the papers that I had before the dispute with Mrs Takhar. I found a second sheet copy of the profit agreement signed by Mrs Takhar but not by ourselves. I don’t have the first sheet. Do you have the original signed copy ? We will send it with the change of name for the Pharmacy. [That last reference is to another business venture]. Speak to you soon. Parkash and Kewel.”

“Morning Parkash, I have the original document, but it is not signed by either party. Can you please arrange to sign and send over. Regards…”

“Draft Profit Sharing Agreement prepared by [SB’s firm], which reflects the contents of [its] letter to your client of 15 March 2006. We are instructed that there is a signed copy of the agreement which will follow.”

“Dear [SB], We have not as yet had the draft profit agreement to sign. Please email and we will sign and return.”

“Do your clients have any evidence of the value of the compulsory purchase orders as alleged within the [PSA] to form the basis of valuation of £100,000 for all of the Properties ?”

“The letter is fine to send. We will look at the Defence and Counterclaim and get back to you. There is a signed profit sharing agreement in place that SR says she has forwarded you in the file so this needs to be confirmed and changed in the defence as it says there is not one that is signed. Will look at the rest and get back to you.” (my underline) Indeed, the next day, Thursday 26th March 2009, it appears from a file note that J’s assistant at H had conversations with both Dr Krishan and SR, who mentioned a copy of the second page of the PSA signed by the Claimant but not by the Krishans. At 14.50, SR emailed J’s assistant enclosing other documents. Further, at 17.05, SR emailed Mrs Krishan (with the subject ‘agreement’) enclosing ‘signed agreement as requested’. That must be the backsheet supposedly ‘signed’ by the Claimant, as lastly at 18.16 that evening, SB emailed J directly saying: “Further to our telephone conversation please find attached the copy of the profit-sharing agreement signed by Parkash and Kewal [i.e. the Krishans]. Apologies my colleague didn’t send this over earlier with the copy of Mrs Takhar’s signature – I was holding it in a separate file. As discussed, I will hold the original signature copy until further notice.”

“An agreement was drafted by [the Defendants’ accountants] which was signed. Whilst the draft contained some of the terms of the agreement set out above, it did not in any event comprehensively deal with all that had been agreed as set out. This agreement is headed Profit Sharing Agreement and is purportedly dated 1st April 2006.” (my underline) A counterclaim sought a declaration in accordance with the Defence’s pleaded terms, seeking legal confirmation that Gracefield was the legal and beneficial owner of the Properties and the following declaration: “A declaration that the first defendant is contractually bound (and the claimant to accept) that at the time the Properties are sold to distribute the net proceeds after all the proper costs of the first defendant have been paid such that (a) the claimant is repaid her loan of £100,000; (b) the claimant is thereafter entitled to a further £100,000 by way of deferred consideration; and (c) thereafter the net proceeds….are shared equally between the claimant… and the second and third defendants.”

“On 12th April 2006, I saw [SB]. She handed me a copy of a Profit Sharing Agreement that she had drafted. My wife was in India, but when she returned, we signed this on behalf of Gracefield and my wife gave a copy to the Claimant for signature. We wanted [her] to have time to consider this, so she took it away before signing it. I understand she then forwarded a signed version to SB, as she had been requested..”

“While [the Claimant and I] were away [in India], Sue Bowdler had prepared a Profit Sharing Agreement. When we returned, my husband and I signed it. We also gave a copy to the Claimant. We suggested that she should take it away and if she was happy with it, sign it and return it direct to SB. I understand that she did that and SB retained copies of the Profit Sharing Agreement signed by all parties.”

“…I do not know if Hamiltons drafted the profit share agreement … I had not seen it before the proceedings. I do not recollect signing it or being asked to. I do not have a copy nor have I ever. In summary there was never any such agreement discussed or agreed with me. It was not mentioned to me by the Second or Third Defendant on any occasion we were together or by any other form of communication." Mrs Krishan responded in a February 2010 statement at paras 12 and 13: “…[T]he Claimant states that she had no knowledge of any Profit Sharing Agreement. This is not correct….[SB] provided a draft Profit Sharing Agreement to my husband in April 2006. I gave a copy to the Claimant for her to take home and consider and she then apparently signed the Agreement and returned it to [SB]. There is no copy of the Profit Sharing Agreement with both the Claimant and mine and my husband’s signatures on it because we did not all sign the Profit Sharing Agreement together.”

“All I know is that [the Claimant] took it away and she signed it and sent it back and we did the same with our copy.”

“Q. How did you know she had returned it to the accountants ? A. I didn’t actually until much later. I assumed she’d returned it.. Q. Did she tell you she had signed it? A. Yes, she did somewhere along the line but I can’t precisely…”

“I do not have the original signature of Mrs Takhar – only a copy – we have never had sight of the original. The signed document was passed from Mrs Takhar to Parkash although I am not sure if Parkash had sight of the original or was simply supplied with a copy by Mrs Takhar”

“…Mrs Takhar’s case is she didn’t sign [the PSA] at all and she has never seen the agreement until this dispute arose. However, no case of forgery is advanced…. In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy, I conclude that the Krishans’ evidence, which I believe anyway, should be accepted and that Mrs Takhar took the copy of the agreement that she was signed away, which was returned, probably by her in some way, duly executed to [SB’s] firm, which then ended up misfiled. At all events, I am satisfied that that was the agreement that was made. The properties were transferred by Mrs Takhar in to Gracefield’s name before the written joint venture agreement was prepared, and the only credible explanation that I have heard is that they were so transferred on the terms subsequently set out in the joint venture agreement, which were previously agreed orally.”

“29….There were two documents, one called the Balber Takhar account, the other the Gracefield Options, which clearly misstated the position, in my judgment deliberately so, in an endeavour to put pressure on Mrs Takhar. These were unworthy and wholly inappropriate steps to take and [the Claimant’s Counsel] pertinently asks: Why tell these lies ? The only, or at least most compelling answer, he says, is because everything that Mrs Takhar previously has said is true. The Krishans were concealing from Mrs Takhar the true purpose of the transfers. She never regarded the properties as anything other than hers. Nor did the Krishans, and they were put in to Gracefield merely as a shell not because of any joint venture agreement… 30 However, I regard the other evidence to be too compelling. I regard the contemporaneous evidence to point unerringly in the one direction of a beneficial transfer to Gracefield in return for a joint venture agreement, which cannot be castigated as unfair or inappropriate. I regard the responses given in April and May 2008, to Mrs Takhar’s volte-face (which is what it was) to have been an exercise in frustration which, however understandable were in truth inexcusable but did not alter the facts of the past.”

“Whilst there was undoubtedly a relationship of trust and confidence, it was not a relationship in which Mrs Takhar put her decision-making powers at the disposal of the Krishans. She retained her own decision-making powers and the transactions were not those which on their face called for an explanation. In any event, such explanations as I have heard persuade me that there has been no abuse of trust and confidence in this case.”

“64. In relation to the Profit Sharing Agreement document, the Claimant’s handwriting expert, Mr Radley in his report of 4th October 2013 concluded that there was conclusive evidence of the copy of the Claimant’s signature on the Whiston letter having been transposed onto the document. It matched exactly - even though no individual [would] sign…a complex signature of the sort involved here in exactly the same way on more than one occasion. The Defendants’ own expert, Mr Michael Handy, in his report dated 2nd July 2020 agreed there was conclusive evidence of this transposition. At trial, no doubt was cast on these conclusions; indeed, the Defendants through their counsel accepted the document had been forged in this way. 65. I accordingly find the Claimant’s signature on the profit sharing agreement document to have been forged by her genuine signature on the Whiston letter having been transposed onto the document prior to it being photocopied/scanned….. 86. It seems to me most unlikely that [SB] or anyone at [her firm] would have done this, however. It would elevate an act of negligence (which had never been alleged) into a serious fraud and attempt to pervert the course of justice (which if discovered would have been added on top of such negligence). Furthermore, if they had lost a copy which had been returned signed and wanted to behave dishonestly (rather than just saying so and supporting the Defendants’ case in that honest way), they could simply have continued with the line that they had no copy of it, and said that it must therefore never have been returned, there being no documentary or other independent evidence to the contrary. 87. In contrast, the Defendants had every reason to forge the document. Although the Defendants have at this trial sought to minimise its importance on the basis that the agreement relied on was merely oral anyway, and that this document did not contain reference to the agreement that the 50% of the net profits remaining in Gracefield after sale of the properties, and due payments, being theirs, it was a document which, if signed, [Dr Krishan’s] own witness statement describes as being seen as critical to the defence….. 88. And it was, of course, of great value to the Defendants to be able to produce a copy of the draft signed by the Claimant. Such a document signed by her was likely to show the Claimant’s case that there was no agreement for profit-sharing to be fundamentally wrong, and the Defendants’ case that there was such an arrangement to be fundamentally right. 89. The point is made by…the Defendants that at the time the document was drafted, the Claimant owned half the shares in Gracefield and that a term stating they were to get the 50% of the net proceeds remaining in the company after the Claimant was paid her 50% could have been inserted in a forged document if the Defendants were going to forge her signature. However, the profit-sharing agreement document had been drawn up by [SB] in the terms that it was, for whatever reason, and had been referred to in the Defence from the start, with no reference to any other document having been produced or signed. Forging the Claimant’s signature on a copy of it would simply involve one addition and be entirely consistent with what the Defendants had said about the documentation there was. This would considerably assist the[m] on the fundamental point that profit sharing had been agreed, leaving the Claimant’s evidence discredited and the Defendants free to convince the court… the 50% net profit left in Gracefield was to be theirs - as in fact they subsequently did at trial. As mentioned above, they also in fact held all the share capital in their names by then. 90. In terms of opportunity for the Defendants to forge of the Claimant’s signature by transposing her genuine signature on the Whiston letter onto a copy of the Profit-Sharing Agreement document, this would only have been there if the Defendants had access to a copy of that letter. 91. A copy of the signed Whiston letter may well have been sent by Mr Whiston to the Defendants, when received by him. Aside from this, the evidence shows that a copy of the signed Whiston letter was certainly sent to the Defendants’ new solicitors by [Mr Whiston’s firm] in August 2008. The Defendants’ solicitor, [J], then wrote to Challinors…on 28th August 2008 a detailed letter setting out how the [Krishans] had helped the Claimant and refuting allegations of fraud made by the Claimant in relation to their dealings with her, and attached a copy of the Whiston letter to it. 92. [Dr Krishan] went…before me from saying that he ‘would’ have been sent a copy of this letter by his solicitors to saying he positively remembered there had not been any attachments to it. He was obviously closely involved in the litigation and it would seem surprising if he did not want to see relevant documents as referred to in that letter. Whether or not he read them in detail then, he would have been likely to have got and kept copies of them…[that] would have been available to him later, giving the opportunity of transposition of the signature from the attached Whiston letter onto the profit sharing agreement document. Taken with all the other evidence in the case which suggests transposition of the Claimant’s signature from it by them, I am satisfied the Defendants did have access to the Whiston letter… 99. It is not clear how the Second Defendant was able to instruct his solicitors to write to the Claimant’s solicitors on 30th October 2008 that a ‘signed copy of the letter would follow’…when there is no evidence of [SB] changing [her] position as expressed on 27th August that they had no record of the return of a signed copy of the Profit Sharing Agreement document. ….On the evidence, only on 26th March 2009 did [SB’s firm] say they had a copy of it. Had the Defendants themselves provided, or been intending to provide, a purportedly signed copy of the letter to [SB’s firm] (which could then be produced by them to the Defendants’ solicitors) they would obviously have been able to give such instructions, however. 100. It seems to me likely that that is what happened. It is borne out by the statements of [SB] nearer to the time….. 109. [Yet her answers in cross-examination] suggests that when [SB] said in her witness statement that she “received a signed copy from the Claimant some time afterwards”, she meant she “received a copy signed by the Claimant sometime afterwards”

“The signature on the copy of the signature page purportedly signed by C has been found to be a forgery for which the Krishans were responsible. That is a juridical fact. This does not affect the Krishan’s belief that C did sign a version of the written Agreement and did post it back to [SB’s firm] …The forging of C’s signature on one version of the written PSA is an established juridical fact and is clearly not justifiable or excusable. However, at most its effect was to strengthen what was already a good and strong case, that the parties entered the Agreement contended for by Ds.”

“I have been shown [the recently-disclosed emails] for the purposes of making this statement. Until I saw these emails again, I did not recall them at all – it clearly went out of my mind. However, I now recall that sometime in 2008, when I was going through some old SAT [exam] papers that I was due to throw out, I found some papers that I presumed Mrs Takhar had left, and that amongst them was a copy of what I thought may have been the original agreement, because it only had Mrs Takhar’s signature on it. I knew the original had been sent to the accountants in 2006, so I was not sure whether this was a copy or what it was, but I sent it on to [SB] and [J]…in any event. Nobody replied to say what it was, copy or original, which I would have expected them to do, and so I forgot about it.”

“The profit agreement is as in the agreement [i.e. a reference to what she had told J as recorded in the earlier note]. As to what happened to it, I am not sure but it was in the 2005 and 2006 that it was agreed.” (my underline) J responded by asking whether the PSA had been signed, Mrs Krishan replied: “As far as we know [it] was signed. Not sure where it is or who has copies.”

“[W]hat I must look at is whether [the claimant] was caused to enter into the transaction by undue influence; and this necessarily means looking at the situation at the time the impugned transaction was entered into, rather than at subsequent events, save in so far as subsequent events cast light on what was happening before and at the time of the impugned transaction. A transaction into which someone enters of their own free will does not retrospectively become tainted by undue influence merely because the counter-party fails to perform his or her side of the bargain.”

“It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

“[When Lord Millett] said it was not open to the court to infer dishonesty from facts which have been pleaded but are consistent with honesty, he was not laying down a general rule that can affect a case like this where there were multiple allegations founding an inference of dishonesty, many of which are themselves allegations of dishonesty that have been proven.”

“First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.”

‘we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value’

“[T]he state of a man’s mind is as much a fact as the state of his digestion. …A misrepresentation as to the state of his mind is a misstatement of fact.”

“I felt trapped. I was too afraid I would lose the Properties to the Council and end up, as the Krishans described it, ‘penniless and homeless’…[And] they seemed to be offering a perfect solution to my problems, [as] I could both ensure the Properties were put back into good condition, but also keep them in the ownership of me and my family. So, I eventually agreed….”

“6…Undue influence is one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over another is not abused. In everyday life people constantly seek to influence the decisions of others. They seek to persuade those with whom they are dealing to enter into transactions, whether great or small. The law has set limits to the means properly employable for this purpose. To this end the common law developed a principle of duress. Originally this was narrow in its scope, restricted to the more blatant forms of physical coercion, such as personal violence. 7 Here, as elsewhere in the law, equity…extended the reach of the law to other unacceptable forms of persuasion [to] investigate the manner in which the intention to enter into the transaction was secured: ‘how the intention was produced’, in the oft-repeated words of Lord Eldon LC, from as long ago as 1807 (Huguenin v Baseley 14 Ves 273, 300). If the intention was produced by an unacceptable means, the law will not permit the transaction to stand. The means used is regarded as an exercise of improper or ‘undue’ influence, and hence unacceptable, whenever the consent thus procured ought not fairly to be treated as the expression of a person's free will. It is impossible to be more precise or definitive. The circumstances in which one person acquires influence over another, and the manner in which influence may be exercised, vary too widely to permit of any more specific criterion. 8 Equity identified broadly two forms of unacceptable conduct. The first comprises overt acts of improper pressure or coercion such as unlawful threats. Today there is much overlap with…duress as [it]...has subsequently developed. The second form arises out of a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage… 9 In cases of this latter nature the influence one person has over another provides scope for misuse without any specific overt acts of persuasion. The relationship between two individuals may be such that, without more, one of them is disposed to agree a course of action proposed by the other. Typically, this occurs when one person places trust in another to look after his affairs and interests, and the latter betrays this trust by preferring his own interests. He abuses the influence he has acquired….In Allcard v Skinner (1887) 36 ChD 145…Lindley LJ, at p 181, described this class of cases as those in which it was the duty of one party to advise the other or to manage his property for him. In Zamet v Hyman [1961] 1 WLR 1442, 1444-1445 Lord Evershed MR referred to relationships where one party owed the other an obligation of candour and protection. 10 The law has long recognised the need to prevent abuse of influence in these ‘relationship’ cases despite the absence of evidence of overt acts of persuasive conduct. The types of relationship, such as parent and child, in which this principle falls to be applied cannot be listed exhaustively. Relationships are infinitely various. [T]he question is whether one party has reposed sufficient trust and confidence in the other, rather than whether the relationship between the parties belongs to a particular type: see Treitel, The Law of Contract, 10th ed (1999), pp 380-381. For example, the relation of banker and customer will not normally meet this criterion, but exceptionally it may: see Natwest Bank v Morgan [1985] AC 686, 707-709. 11 Even this test is not comprehensive. The principle is not confined to cases of abuse of trust and confidence. It also includes, for instance, cases where a vulnerable person has been exploited. Indeed, there is no single touchstone for determining whether the principle is applicable. Several expressions have been used in an endeavour to encapsulate the essence: trust and confidence, reliance, dependence or vulnerability on the one hand and ascendancy, domination or control on the other. None of these descriptions is perfect. None is all embracing. Each has its proper place. 12 In CIBC Mortgages pic v Pitt [1994] 1 AC 200 your Lordships' House decided that in cases of undue influence disadvantage is not a necessary ingredient of the cause of action. It is not essential that the transaction should be disadvantageous to the pressurised or influenced person, either in financial terms or in any other way. However, in the nature of things, questions of undue influence will not usually arise, and the exercise of undue influence is unlikely to occur, where the transaction is innocuous. The issue is likely to arise only when, in some respect, the transaction was disadvantageous either from the outset or as matters turned out. 13 Whether a transaction was brought about by the exercise of undue influence is a question of fact. Here, as elsewhere, the general principle is that he who asserts a wrong has been committed must prove it. The burden of proving an allegation of undue influence rests upon the person who claims to have been wronged….The evidence required to discharge the burden of proof depends on the nature of the alleged undue influence, the personality of the parties, their relationship, the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship, and all the circumstances of the case. 14 Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of a satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties' relationship. He preferred his own interests. He did not behave fairly to the other. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn…. 15….[I]n Natwest Bank v Morgan [1985] AC 686, 707, Lord Scarman noted that a relationship of banker and customer may become one in which a banker acquires a dominating influence. If he does, and a manifestly disadvantageous transaction is proved, ‘there would then be room’ for a court to presume that it resulted from the exercise of undue influence. 16 Generations of equity lawyers have conventionally described this situation as one in which a presumption of undue influence arises. This use of the term ‘presumption’ is descriptive of a shift in the evidential onus on a question of fact. When a plaintiff succeeds by this route he does so because he has succeeded in establishing a case of undue influence. The court has drawn appropriate inferences of fact upon a balanced consideration of the whole of the evidence at the end of a trial in which the burden of proof rested upon the plaintiff. The use, in the course of the trial, of the forensic tool of a shift in the evidential burden of proof should not be permitted to obscure the overall position. These cases are the equitable counterpart of common law cases where the principle of res ipsa loquitur is invoked. There is a rebuttable evidential presumption of undue influence. 17 The availability of this forensic tool in cases founded on abuse of influence arising from the parties' relationship has led to this type of case sometimes being labelled ‘presumed undue influence’. This is by way of contrast with cases involving actual pressure or the like, which are labelled ‘actual undue influence’: see BCCI v Aboody [1990] 1 QB 923, 953, and Royal Bank of Scotland pic v Etridge (No 2) [1998] 4 All ER 705, 711-712, paras 5-7. This usage can be a little confusing. In many cases where a plaintiff has claimed that the defendant abused the influence he acquired in a relationship of trust and confidence the plaintiff has succeeded by recourse to the rebuttable evidential presumption. But this need not be so. Such a plaintiff may succeed even where this presumption is not available to him; for instance, where the impugned transaction was not one which called for an explanation…..”

“I question the wisdom of the practice which has grown up, particularly since…Aboody ….of attempting to make classifications of cases of undue influence..[which is] not easy to define… It is something which can be more easily recognised when found than exhaustively analysed in the abstract. Correspondingly the attempt to build up classes or categories may lead to confusion. The confusion is aggravated if the names used to identify the classes do not bear their actual meaning. Thus, on the face of it, division into cases of ‘actual’ and ‘presumed’ undue influence appears illogical. It appears to confuse definition and proof. There is also room for uncertainty whether the presumption is of the existence of an influence or of its quality as being undue. I would also dispute the utility of the further sophistication of subdividing ‘presumed undue influence’ into further categories. All these classifications to my mind add mystery rather than illumination.”

“151.…The nature of the two classes was described by Slade LJ in Aboody…at 953: "[Class (1)] is those cases in which the court will uphold a plea of undue influence only if it is satisfied that such influence has been affirmatively proved on the evidence (commonly referred to as cases of 'actual undue influence' ). . .; and [Class (2) is] those cases (commonly referred to as cases of 'presumed undue influence')…in which the relationship between the parties will lead the court to presume that undue influence has been exerted unless evidence is adduced proving the contrary, e g by showing that the complaining party has had independent advice." 157 In…. Aboody…. Slade LJ split the Class 2 cases into two subdivisions. He categorised at p 953, the ‘well established categories of relationships, such as a religious superior and inferior and doctor and patient where the relationship as such will give rise to the presumption’ as Class 2A cases, and confirmed that neither a husband / wife relationship nor a banker / customer relationship would normally give rise to the presumption….He continued, at p 953: ‘Nevertheless, on particular facts (frequently referred to in argument as 'Class 2B' cases) relationships not falling within the 'Class 2A' category may be shown to have become such as to justify the court in applying the same presumption’. 219 The presumption of undue influence, whether in a category 2A case, or in a category 2B case, is a rebuttable evidential presumption. It is a presumption which arises if the nature of the relationship between two parties coupled with the nature of the transaction between them is such as justifies, in the absence of any other evidence, an inference that the transaction was procured by the undue influence of one party over the other. This evidential presumption shifts the onus to the dominant party and requires the dominant party, if he is to avoid a finding of undue influence, to adduce some sufficient additional evidence to rebut the presumption. In a case where there has been a full trial, however, the judge must decide on the totality of the evidence before the court whether or not the allegation of undue influence has been proved. In an appropriate case the presumption may carry the complainant home….. But it makes no sense to find, on the one hand, that there was no undue influence but, on the other hand, that the presumption applies. If the presumption does, after all the evidence has been heard, still apply, then a finding of undue influence is justified. If…..the judge, having heard the evidence, concludes that there was no undue influence, the presumption stands rebutted. A finding of actual undue influence and a finding that there is a presumption of undue influence are not alternatives to one another.”

“In the broadest possible way, the difference between the two classes is that in the case of actual undue influence something has to be done to twist the mind of a donor whereas in cases of presumed undue influence it is more a case of what has not been done namely ensuring that independent advice is available to the donor.”

“What that passage establishes is that an issue as to whether there was undue influence involves an issue of fact. The party asserting that there has been undue influence can call direct evidence which supports such a finding. Alternatively, that party can call evidence of other matters which justify the inference that undue influence was used. Either way, the party is attempting to prove the fact of undue influence.”

“In the words of Lord Scott, the judge had to decide on the totality of the evidence whether undue influence had been proved..There was nothing procedurally unfair in the judge determining whether all of the evidence led him to find that actual undue influence had been established.”

“Thus, for a claim to succeed on the ground of actual undue influence, it must be established that (a) the complainant’s free will was impaired, (b) there was impropriety in the defendant’s conduct and, in terms of causation, (c) the improper conduct constituted by (a) and (b) were part of the process by which the complainant’s consent to the transaction was obtained.”

“There is no precisely defined law setting limits to the equitable jurisdiction of a court to relieve against undue influence. This is the world of doctrine, not of neat and tidy rules. The courts of equity have developed a body of learning enabling relief to be granted where the law has to treat the transaction as unimpeachable unless it can be held to have been procured by undue influence. It is the unimpeachability at law of a disadvantageous transaction which is the starting-point from which the court advances to consider whether the transaction is the product merely of one's own folly or of the undue influence by another. A court in the exercise of this equitable jurisdiction is a court of conscience. Definition is a poor instrument when used to determine whether a transaction is or is not unconscionable: this is a question which depends upon the particular facts of the case.”

‘Unconscionable conduct may be a minimum condition, but never a sufficient condition, for the intervention of Equity’

“The means used is regarded as an exercise of improper or ‘undue’ influence, and hence unacceptable, whenever the consent thus procured ought not fairly to be treated as the expression of a person's free will. It is impossible to be more precise or definitive. The circumstances in which one person acquires influence over another, and the manner in which influence may be exercised, vary too widely to permit of any more specific criterion.”

“[I]t is impossible adequately to classify every type of situation in which improper or undue influence can be said to have been used to persuade a person to enter into the transaction…. But for a person’s conduct to fall into this category it must…. make it unconscionable for that person…to seek to rely on the effect of what has been done.”

“[I]n all cases of undue influence the critical question is whether or not the persuasion or the advice, in other words the influence, has invaded the free volition of the donor to accept or reject the persuasion or advice or withstand the influence. The donor may be led but she must not be driven and her will must be the offspring of her own volition, not a record of someone else's. There is no undue influence unless the donor if she were free and informed could say ‘This is not my wish, but I must do it’.”

‘people do not usually trust those who coerce them’

“It is true that Lord Nicholls defined actual undue influence in terms of ‘overt acts of improper pressure or coercion such as unlawful threats’. It is, of course only one way of describing [it]…Lindley L.J. in Allcard [at 181 described it as] ‘…cases in which there has been some unfair and improper conduct, coercion from outside, over−reaching, some form of cheating, and generally, though not always, some personal advantage obtained by a donee placed in some close and confidential relation to the donor’.”

“[A] finding of undue influence does not depend, as a necessary pre-requisite, upon a conclusion that the victim made no decision of her own, or that her will and intention was completely overborne. No doubt there are many examples where that is shown, but a conscious exercise of will may nonetheless be vitiated by undue influence.”

“.…..[I]n my judgment there is no logic in imposing such a requirement where actual undue influence has been exercised and proved. Actual undue influence is a species of fraud… Like any other victim of fraud, a person who has been induced by undue influence to carry out a transaction which he did not freely and knowingly enter into is entitled to have that transaction set aside as of right. A man guilty of fraud is no more entitled to argue that the transaction was beneficial to the person defrauded than is a man who has procured a transaction by misrepresentation. The effect of the wrongdoer's conduct is to prevent the wronged party from bringing a free will and properly informed mind to bear on the proposed transaction which accordingly must be set aside in equity as a matter of justice.”

“In all of these relationships, whether of [Class 2A or Class 2B], the principle is the same. It is that the degree of trust and confidence is such that the party in whom it is reposed, either because he is or has become an adviser of the other or because he has been entrusted with the management of his affairs or everyday needs or for some other reason, is in a position to influence him into effecting the transaction of which complaint is later made….[In] cases where functions of this sort constitute the substratum of the relationship, there is no need for any identity of subject matter between the advice which is given or the affairs which are managed on the one hand and the transaction of which complaint is made on the other. Nor….is it necessary for the party in whom the trust and confidence is reposed to dominate the other…in any sense in which that… is generally understood.”

“The power of a court of equity to intervene in these cases is designed to prevent a relationship of influence from being abused. The object of its inquiry is to determine how the intention to enter into the transaction was produced. In Etridge Lord Nicholls at [7] observed ‘the circumstances in which one person acquires influence over another, and the manner in which that influence may be exercised, vary too widely to permit of any more specific criterion’. The earlier authorities are full of examples of cases where even in the absence of some overt form of improper pressure or coercion gifts or transfers of property have been set aside….[In] Allcard where an over generous gift of property to a religious order was held to be the product of motives of beneficence created by the relationship between Miss Allcard and the order which she had joined… raising an inference that it was induced by th[at] relationship of dependence that had grown up….”

“As Lord Nicholls made clear in Etridge [at 11] a relationship of influence is not confined to cases where one party reposes trust and confidence in another. It extends to other cases where one party has ascendancy, domination or control over the other party due to reliance, dependence or vulnerability of the other party. Therefore, in determining whether there was a relationship of influence, it would be wrong for the court to confine itself to the question whether there was evidence of trust and confidence in financial matters thereby ignoring evidence of the complainant’s vulnerability. However, it is not enough simply to show that one party was under some disability such as chronic intoxication. What is required is affirmative proof one party had influence over the other in the relationship.”

“Whilst there was undoubtedly a relationship of trust and confidence, it was not a relationship in which Mrs Takhar put her decision-making powers at the disposal of the Krishans. She retained [them].”

“The existence of the [grandson’s] power of attorney is not of itself sufficient to raise a presumption of undue influence but it is probative of a relationship of trust and confidence which coupled with the highly unusual aspects of the sale ….lay[s] the ground for an inference of undue influence.”

‘there was undoubtedly a relationship of trust and confidence’

“I felt trapped. I was too afraid I would lose the Properties to the Council and end up, as the Krishans described it, ‘penniless and homeless’….[W]hat the[y] were offering was exactly what I needed help with….a perfect solution to my problems…. So, I eventually agreed to accept their help.”

“So far as I can see, [the solicitor] acted and advised properly and with reasonable competence in his position as the solicitor instructed by, advising, and representing the two clients jointly. What he did not do, or purport to do, was to give any advice to Miss Cooper from her own separate point view and for her own separate benefit. This is, therefore, not a case in which Miss Cooper had any independent advice. The judge’s comment that Mr Grimes did not know one client better than another ‘and to that extent was independent’ is not really to the point. What is meant, in this context, by independent advice is advice to and for the benefit the one party alone given by an adviser whose duty it is to consider the position that party and to advise her so she can give thought, free from any influence or dependence on the other party, as to whether she really does want to enter into the transaction, bearing in mind its full implications from her point view. The adviser, advising the party in question alone, must explain the nature and the consequences the transaction to that party with full knowledge of the relevant circumstances: see, for example, Snell’s Equity… para 8–31. Mr Grimes was not in that position. It did not occur to him that Miss Cooper needed any such protection. He did not know the relevant underlying circumstances. He did not, and did not profess to, give Miss Cooper any advice as to her position separately.”

“I felt trapped. I was too afraid I would lose the Properties to the Council and end up, as the Krishans described it, ‘penniless and homeless’….[W]hat the[y] were offering was ….a perfect solution to my problems….”

“21 As already noted, there are two prerequisites to the evidential shift in the burden of proof from the complainant to the other party. First, that the complainant reposed trust and confidence in the other party, or the other party acquired ascendancy over the complainant. Second, that the transaction is not readily explicable by the relationship of the parties. 22 Lindley LJ summarised this second prerequisite in the leading authority of Allcard v Skinner (1887) 36 ChD 145, where the donor parted with almost all her property. Lindley LJ pointed out that where a gift of a small amount is made to a person standing in a confidential relationship to the donor, some proof of the exercise of the influence of the donee must be given. The mere existence of the influence is not enough. He continued, at p 185 ‘But if the gift is so large as not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act, the burden is upon the donee to support the gift."… 23 The need for this second prerequisite has recently been questioned: see Nourse LJ in Barclays Bank pic v Coleman [2001] QB, 20, 30-32, one of the cases under appeal before your Lordships' House. Mr Sher invited your Lordships to depart from the decision of the House on this point in National Westminster Bank pic v Morgan [1985] AC 686. 24 My Lords, this is not an invitation I would accept. The second prerequisite, as expressed by Lindley LJ, is good sense. It is a necessary limitation upon the width of the first prerequisite. It would be absurd for the law to presume that every gift by a child to a parent, or every transaction between a client and his solicitor or between a patient and his doctor, was brought about by undue influence unless the contrary is affirmatively proved. Such a presumption would be too far-reaching. Something more is needed before the law reverses the burden of proof, something which calls for an explanation. When that something more is present, the greater the disadvantage to the vulnerable person, the more cogent must be the explanation before the presumption will be…rebutted. 25 This was the approach adopted by Lord Scarman in Morgan….[ at] 703-707. He cited Lindley LJ's observations in Allcard…above. He noted that whatever the legal character of the transaction, it must constitute a disadvantage sufficiently serious to require evidence to rebut the presumption that in the circumstances of the parties' relationship, it was procured by exercise of undue influence. Lord Scarman concluded, at p 704 ‘The Court of Appeal erred in law in holding that the presumption of undue influence can arise from the evidence of the relationship of the parties without also evidence that the transaction itself was wrongful in that it constituted an advantage taken of the person subjected to the influence which, failing proof to the contrary, was explicable only on the basis that undue influence had been exercised to procure it’. 26 Lord Scarman attached the label ‘manifest disadvantage’ to this second ingredient necessary to raise the presumption. This label has been causing difficulty. It may be apt enough if applied to straightforward transactions such as a substantial gift or a sale at an undervalue. But experience has now shown that this expression can give rise to misunderstanding. The label is being understood and applied in a way which does not accord with the meaning intended by Lord Scarman, its originator. 27 The problem has arisen in the context of wives guaranteeing payment of their husband's business debts…. 28 In a narrow sense, such a transaction plainly ("manifestly") is disadvantageous to the wife. She undertakes a serious financial obligation, and in return she personally receives nothing. But that would be to take an unrealistically blinkered view of such a transaction. Unlike the relationship of solicitor and client or medical adviser and patient, in the case of husband and wife there are inherent reasons why such a transaction may well be for her benefit. Ordinarily, the fortunes of husband and wife are bound up together….A wife's affection and self-interest run hand-in-hand in inclining her to join with her husband in charging the matrimonial home, usually a jointly-owned asset, to obtain financial facilities needed by the business…. 29 Which, then, is the correct approach to adopt in deciding whether a transaction is disadvantageous to the wife: the narrow approach, or the wider approach? The answer is neither. The answer lies in discarding a label which gives rise to this sort of ambiguity. The better approach is to adhere more directly to the test outlined by Lindley LJ in Allcard…and adopted by Lord Scarman Morgan….in the passages I have cited.”

“13. The second element is most clearly set out in the speech of Lord Nicholls in Etridge at [14] [which I have quoted above and need not repeat] 14. A similar explanation was given by Lord Scott in [220] of his judgment. Referring to the label of ‘manifest disadvantage’ that other cases have suggested might not be entirely helpful, Lord Scott said:‘[T]he expression is no more than shorthand for the proposition that the nature and ingredients of the impugned transaction are essential factors in deciding whether the evidential presumption has arisen and in determining the strength of that presumption. It is not a divining-rod by means of which the presence of undue influence in the procuring of a transaction can be identified. It is merely a description of a transaction which cannot be explained by reference to the ordinary motives by which people are accustomed to act.” 15. If on the evidence the transaction cannot so be explained—that is to say, the transaction calls for an explanation and that explanation is not forthcoming—the burden then shifts to the claimant to show that in fact, and despite the terms and nature of the agreement, he did not in truth abuse the position that he held. He would normally discharge that burden—as, for instance, now at least occurs in husband and wife cases—by showing that the defendant entered into the matter with his will fully unconstrained, usually with the benefit of independent legal advice… 20….[C]ounsel for the appellant argued that merely because, in the words of Lord Nicholls, the transaction ‘called for an explanation’…then that in itself was enough to shift the burden of denying misuse of the admitted existence of trust and confidence on to [the father]. That… cannot be right in view of the totality of the formulation adopted by Lord Nicholls. The first issue, at least in a case such as the present, is whether the transaction, looked at as a whole, can be explained in terms other than those of undue influence. …21. Only if that exercise cannot be successfully discharged does the question arise of whether the claimant actually exercised undue influence. ….Lord Scarman in Natwest v Morgan [1985] A.C. 686…[said]: ‘An advantage taken of the person subjected to the influence which failing proof to the contrary was explicable only on the basis that undue influence had been exercised to procure it’ The judge, having drawn attention to that test, continued: “[I]t seems to me that what a trial judge ought to be doing is trying to exercise his common sense and assuming the necessary relationship to consider whether, given the circumstances and the nature of the transaction, it says to the unbiased observer that absent explanation it must represent the beneficiary taking advantage of his position.”

“[F]acts must be established which persuade the court the transaction in question is of such a nature that a person in the [claimant’s] position, acting in the way that such a person might ordinarily be expected to act, would not have entered into the transaction unless his or her will was overborne….”

“[B]y reason of the…Agreement, Gracefield held the Properties pursuant to an express, alternatively, an implied trust for [her or TTC’s] benefit ….”

“A general distinction might be drawn between express, resulting and constructive trusts on the basis that express trusts…are founded on the express or inferred intention of the settlor, resulting trusts are founded on the presumed (but rebuttable) intention of the transferor or purchaser of property, and constructive trusts are imposed on a person who holds the title to property against his intention. But the proposition that a resulting trust is founded on a presumed intention does not mean that where a trust is expressly intended to take effect it can do so only as an express trust. A resulting trust can arise in circumstances where an express trust for a settlor founded on his express intention would have been created but for a failure to comply with the formal requirements of section 53(1) of the Law of Property Act 1925. But the resulting trust is still founded on the presumed intention of the settlor. It is created, not because it was intended by the settlor, but by operation of law because the settlor is presumed to have intended not to make a gift, his actual intention being consistent with that...”

“The Court [in Re Llanover Estates [1926] 1 Ch 626] held that the expression covers resulting trusts, rejecting the argument in this context an ‘implied trust’ is merely an inferred or precatory [‘future’] trust.”

“Since the equitable jurisdiction to enforce trusts depends upon the conscience of the holder of the legal interest being affected, he cannot be a trustee of the property if and so long as he is ignorant of the facts alleged to affect his conscience, i.e. until he is aware that he is intended to hold the property for the benefit of others in the case of an express or implied trust, or, in the case of a constructive trust, of the factors which are alleged to affect his conscience…There are cases where property has been put into the name of X without X's knowledge but in circumstances where no gift to X was intended. It has been held that such property is recoverable under a resulting trust… These cases are explicable on the ground that, by the time action was brought, X or his successors in title have become aware of the facts which gave rise to a resulting trust; his conscience was affected as from the time of such discovery and thereafter he held on a resulting trust...”

“….[I]t is averred that by reason of the terms of the Agreement, Gracefield held the Properties pursuant to an express, alternatively, an implied trust for the benefit of the Claimant, alternatively TTC….”

“Under existing law a resulting trust arises in two sets of circumstances: (A) where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A's intention to make an outright transfer…Vandervell v. Inland Revenue Commissioners [1967] 2 A.C. 291, 312 et seq.; In re Vandervell's Trusts (No. 2) [1974] Ch. 269, 288 et seq. (B) Where A transfers property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest: ibid, and Quistclose Investments Ltd. v. Rolls Razor Ltd (in liquid.) [1970] A.C. 567. Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention. Megarry J. in In re Vandervell's Trusts (No. 2) suggests that a resulting trust of type (B) does not depend on intention but operates automatically. I am not convinced that this is right. If the settlor has expressly, or by necessary implication, abandoned any beneficial interest in the trust property, there is in my view no resulting trust: the undisposed-of equitable interest vests in the Crown as bona vacantia: see In re West Sussex Constabulary's Widows, Children and Benevolent (1930) Fund Trusts [1971] Ch. 1.”

“As to type (A), any presumption of resulting trust is rebutted since [the] payment [was made] with the intention the moneys....should become the absolute property of the...authority. [They]…. were under misapprehension that the payment was made in pursuance of a valid contract. But that does not alter the actual intentions of the parties at the date the payment was made or the moneys were mixed in the bank account….[T]the presumption of resulting trust is rebutted by evidence of any intention inconsistent with such a trust, not only by evidence of an intention to make a gift.”

“34 Where a property has been purchased and conveyed into the name of someone other than the person who has paid the purchase price the traditional starting point in equity has been to presume that the property is held on trust by the named transferee in favour of the person who has paid for it. Equity is said to lean against a gift unless there is evidence of surrounding and other circumstances which indicates that this was what the payer intended. In the absence of evidence of an agreement or declaration to that effect at the time of the transfer the ascertainment of the payer's true intentions will be largely a matter of drawing inferences from the objective facts relevant to the transaction. 35 [Where] the property has been transferred into the name of a child of the payer….there is a presumption of advancement in favour of the child which, unless rebutted, will displace the presumption of a resulting trust. Although much criticised as based on outdated assumptions…the presumption of advancement continues to form a relevant part of the court's inquiry as to the intended legal consequences of the transaction…..”

"In these cases equity searches for the subjective intention of the transferor. It…is not satisfactory to apply rigid rules of law to the evidence that is admissible to rebut the presumption of advancement. Plainly, self-serving statements or conduct of a transferor, who may long after the transaction be regretting earlier generosity, carry little or no weight. But words or conduct more proximate to the transaction itself should be given the significance that they naturally bear as part of the overall picture. Where the transferee is an adult, the words or conduct of the transferor will carry more weight if the transferee is aware of them and makes no protest or challenge to them."

“Where A transfers, or directs a trustee for him to transfer, the legal estate in property to B otherwise than for valuable consideration it is a question of the intention of A in making the transfer whether B was to take beneficially or on trust and, if the latter, on what trusts. If, as a matter of construction of the document transferring the legal estate, it is possible to discern A's intentions, that is an end of the matter... But…if the document is silent, then there is said to arise a resulting trust in favour of A. But this is only a presumption and is easily rebutted. All the relevant facts and circumstances can be considered in order to ascertain A's intentions with a view to rebutting this presumption.”

“There is no need, or room, as I see it, to invoke a presumption. The conclusion, on the facts found, is simply that the option was vested in the trustee company as a trustee on trusts, not defined at the time, possibly to be defined later. But the equitable, or beneficial interest, cannot remain in the air: the consequence in law must be that it remains in the settlor….. There is no need to consider some of the more refined intellectualities of the doctrine of resulting trust…..”

“The judge’s error…was to conclude the beneficial interest was transferred to [the daughters] in the absence of any common intention as to when and to whom they should dispose of it in the future. He should have concluded, in the light of all the other evidence he accepted, that the absence of any such common intention as to the future supported the evidence of the Father he did not intend to transfer the beneficial interest with the consequential inference that it remained with him. In that event the Father was and is entitled to direct [them] when and to whom to transfer the legal interest.”

“2. At all material times, the Claimant held the Properties on trust for TTC… and managed the properties on behalf of TTC. 3. The Claimant was responsible for maintaining the Properties and paying all relevant outgoings relating to them,… 4. In or around May 2005, the [Krishans] offered to take over the management of the Properties to help the Claimant: 4.1 [The Krishans incorporated Gracefield] for the purposes of holding the Properties on trust for the Claimant or alternatively TTC; and managing the Properties. 4.2 It was agreed between the parties that legal title to the Properties would be transferred to [Gracefield] for administrative convenience and the management of the Properties only. 4.3 It was agreed between the parties legal title to the Properties would be transferred back…to the Claimant on her demand. 7. The Properties were transferred to [Gracefield – Shops on 31st March 2006 and Cinema and Co-Op on 28th April 2006]: 7.1 By the Claimant with the intention that equitable estates in the Properties be held on trust for her, further or alternatively TTC. 7.2 For the particular purpose known to and intended by the parties. 7.3 In accordance with the agreement set out in paragraph 4 above; 7.4 For no consideration; 7.5. Further or alternatively for consideration that has wholly failed. 8. In the premises [Gracefield] holds the Properties on trust for the Claimant absolutely.”

“The Claimant has received no consideration for the transfer of the Properties. In addition to the reasons set out in the Particulars of Claim, the First Defendant would hold the Properties on resulting trust for the Claimant by operation of law owing to this gratuitous transfer.”

“It also seems to me to follow from my findings [of fact] that there was a beneficial transfer and that Gracefield was not intended to be other than beneficial owner, albeit subject to an obligation to dispose of the proceeds and profits in a particular way. Nor is this a case where there has been any failure of purpose so as to give rise to a constructive or resulting trust….”

‘[T]he setting aside of the judgment (and consequential orders)…will in turn pave the way for a new trial on the true facts. There will be no need to issue a new claim form: the new trial will be within the old proceedings which will be automatically revived by the setting aside of the previous judgment and all orders flowing from it…’

“The costs order has been set aside and what follows from that is that the parties fall to be restored to the position they were in had this order not been made. That includes the defendants repaying the monies they were paid…”

“Further or alternatively, and without prejudice to the relief sought in the foregoing, it is averred that by reason of the terms of the Agreement, Gracefield held the Properties pursuant to an express, alternatively, an implied trust for the benefit of the Claimant, alternatively TTC.”

“The material terms of the parties’ oral agreement (‘the Agreement’) were: a. That the Krishans would procure the incorporation of a new company to which the Properties would be transferred; b. The new company would hold the Properties on trust for Mrs Takhar, alternatively for Gracefield; c. That such transfer was to facilitate the Krishans assisting Mrs Takhar in dealing with the threat of a compulsory purchase order and to render it administratively convenient for the Krishans to manage and refurbish the Properties on Mrs Takhar’s behalf; d. That, upon demand by Mrs Talkhar, the Properties would be transferred back into her name.”

“I recall asking [the Krishans] what would happen to the Properties when they were transferred to the company. The[y] had been in the family for many years and I was anxious to make sure they stayed that way. So I needed to know..whatever the Krishans did with the[m], they would remain in my ownership. [They b]oth repeatedly assured me that the transfer of the Properties was only a formality and that of course they would still be mine.”

‘Although we are handling it the property is yours’

“I have no vested interest in them, but I know you have because that’s your life’.” 442.4 That strong attachment of the Claimant to her ‘family properties’ and her fear of Ian taking them is consistent with Mrs Krishan also saying in 2008: ‘There is no way my sister is going to get caught up in the hands of [Ian]’ and persuading the Claimant the company would protect them from him. 442.5 It also fits the Claimant seeing the Properties as belonging to herself and Bill, as I said at paragraph 149: and so not agreeing to transfer until he did. Indeed, as I went on to find at paragraph 346.3 above, which again I reiterate: “I found as a fact (at paragraphs 200-203, 208, 211-215, 218 and 221) that after the formal transfers of the Properties ‘into Gracefield’s name’, the Claimant intended they would really still belong to her (and Bill). That is why she repeatedly sought assurance about it and did not agree until she had Bill’s blessing; what she believed was being discussed with Mr Davies and SB; and why she was concerned about SB’s letters but reassured by Mrs Krishan on 24th March 2006 that those letters were just ‘paper figures’ and ‘hoops’: effectively a tax or accounting exercise which she accepted as ‘not a numbers person’. Even if I am wrong about that, the disclosure of ‘profit share’ on sale in SB’s letter was not inconsistent with the Properties staying in the Claimant’s beneficial ownership if in Gracefield’s name until that sale, especially as the Claimant would get up to £300,000 of the proceeds first, the destination of the balance of the proceeds was not clear and on the face of it would go to Gracefield (see paragraph 229 above).”

“The claimant bears the burden of pleading and proving all elements of the cause of action in conspiracy. An allegation of conspiracy is a serious one. Accordingly, the standard of proof (though it remains the balance of probability) is a high one, commensurate with the seriousness of the allegation. A conspiracy claim must be clearly pleaded and clearly proved with convincing evidence. Dishonesty is not, strictly speaking, an element of the cause of action in conspiracy….However, for practical purposes most conspiracy claims involve an allegation of dishonesty, even if no fraud as such is alleged… It is accordingly clear…that, for practical purposes, an allegation of conspiracy engages the same professional issues as to what allegations can properly be made and how they must be pleaded as any other claim in which dishonesty is an element of the cause of action.”

“Although most of the authorities address the applicable principles in the context of pleading and proving fraud and associated dishonesty, aspects of the applicable principles will be of relevance when allegations of serious wrongdoing are made more generally, even if there is no requirement to plead or prove fraud or dishonesty, as such, as an element of the cause of action (such as in unlawful means conspiracy), and even though the strictures applicable to a plea of fraud or dishonesty are not automatically triggered. In this regard I was referred to Ivy Technology v Mr Barry Martin & Others [2019] EWHC 2510 (Comm)…..at [12] by Henshaw J: “Conspiracy must be pleaded to a high standard, particularly where allegations include dishonesty: i) Allegations of conspiracy to injure ‘must be clearly pleaded and clearly proved by convincing evidence’ ii) The more serious the allegations made, the more important it is for the case to be set out clearly and with adequate particulars……….. iii) Unlawful means conspiracy is a grave allegation, which ought not to be lightly made, and like fraud must be clearly pleaded and requires a high standard of proof… iv) Where a conspiracy claim alleges dishonesty, ‘all the strictures that apply to pleading fraud" are directly engaged’: it is necessary to plead all specific facts and circumstances supporting the inference of dishonesty by the defendants.”

“185. It is important to appreciate that there are two principles in play. The first is a matter of pleading. The function of pleadings is to give the party opposite sufficient notice of the case which is being made against him. If the pleader means ‘dishonestly’ or ‘fraudulently’, it may not be enough to say ‘wilfully’ or ‘recklessly’. Such language is equivocal…. 186. The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.”

“[When Lord Millett] said it was not open to the court to infer dishonesty from facts which have been pleaded but are consistent with honesty, he was not laying down a general rule that can affect a case like this where there were multiple allegations founding an inference of dishonesty, many of which are themselves allegations of dishonesty that have been proven.”

“[A]n important aspect of the role of statements of case is to enable the other party to know what case it has to meet….[W]hether particulars of claim do so can often be tested by examining what a defendant pleads back to the particulars of claim and what that reveals as to the defendant’s understanding of the case being advanced against it….”

“A series of acts may be carried out pursuant to a single conspiracy. [Or] those acts may be carried out pursuant to separate conspiracies. There may be an overarching conspiracy and sub-conspiracies, with varying parties to each….In some cases, the issue will be a dry analytical one with no practical consequences (for example, if the same group of defendants had the same involvement in all the same acts carried out over a period). In other cases, though, a finding that there were separate conspiracies may allow some defendants to escape or limit their liability if they are not held to have been party to a single over-arching conspiracy……The point is also capable of having practical importance in the context of how the….claim is pleaded. In AG of Zambia [v Meer Care [2007] EWHC 902 (Ch)], only one overarching conspiracy had been pleaded. This was not held to preclude a lesser finding of liability based on sub-conspiracies, but it appears the defendants did not contend that it should have done. And there are examples going the other way eg Colliers CRE Plc v Pandya [2009] EWHC 211 (QB) in which HHJ Seymour QC held that the claimant’s decision to limit its pleading to a single conspiracy precluded a finding that a particular corporate defendant was party to it, since it was not party to the initial agreement. A claimant who wishes to preserve the possibility of presenting its claim according to these alternative analyses would be well advised to ensure the alternatives are each pleaded.”

“The position of [the second defendant company] was somewhat more complicated. As it was, on the evidence, the creature of [the first and third defendants], it knew what they knew. However, they only became respectively the company secretary and director of [it] on April 2006 and the earliest cheque drawn payable to [the second defendant company] was [in] September 2006 in the sum of £2,169.19. The chronology thus demonstrated that [the second defendant company] could not have been a party to the [pre-April 2006] initial agreement between [the first and third defendants]. It may well be appropriate to conclude that [the first, second and third defendants] made an agreement to cause harm to [the claimant] by unlawful means at a date after the initial conspiracy – probably at about the time cheques ceased to be drawn payable to [the fifth defendant] and started to be drawn payable to [the second defendant], so in the autumn of 2006. However, no such second conspiracy was pleaded on behalf of [the claimant] and, even if it had been, it does not appear that, in practical terms, there would have been any benefit to [the claimant], for the sums for which [it] would have been liable would almost certainly have been those for which I have found [it] was liable as money had and received.”

“It is not necessary for all parties to a conspiracy to have joined the conspiracy at the same time in order for them to be liable. However…a defendant will have no liability for specific losses incurred or caused before he became a party to the conspiracy, or (it would logically follow) for acts which have already occurred and which may give rise to loss in the future.”

“We do not consider there was any unfairness in the way that the judge approached the case or, indeed, in the way in which it was advanced at trial. The defendants had no doubt at each stage what case they had to meet.”

“From the beginning of 2005, the First and Second Defendants wrongfully conspired, combined together and agreed that they would by unlawful means: (i) procure the transfer of the Properties to a new company (which in the first instance was to be jointly owned by the Claimant and Defendants and which was in the event incorporated under the name of Gracefield…; (ii) obtain control of Gracefield; (iii) extract all [or] most of the equity in the Properties for their own benefit; (iv) hide the misconduct by exaggerating costs of managing the Properties and by forging documents.”

“41. It is averred that the Krishans’ actions referred to in paragraphs 9 to 40 above constituted an unlawful means conspiracy, in that the Krishans conspired and combined by unlawful means to: (a) procure the transfer of the Properties to Gracefield…(b) obtain control of Gracefield; (c) extract all, alternatively most, of the equity in the Properties for their own benefit; and (d) disguise their misconduct and mislead the Court by exaggerating the costs of managing the Properties by forging documents and thereby procuring judgment in the Original Claim in their favour. 42. The overt acts which amount to an unlawful means conspiracy were carried out by the Krishans with the intention of procuring, for their own benefit, [the Claimant’s] interest in the Properties, thereby causing her loss, in that but for the Krishans’ conspiracy, [she] would have: (a) retained ownership of the Properties; (b) further or alternatively, sold the Properties; (c) further, until…. the Properties were sold, received rental income…”

“The composite reference to paragraphs to paragraphs 9 to 40 is inadequate to plead a claim in conspiracy. Many of these paragraphs do not refer to actions of [the] Krishan[s] at all and the plea that such of those paragraphs that do comprise allegations of ‘actions’ ‘constituted’ a conspiracy is legally nonsensical. If Mrs Takhar wishes to allege that unlawful acts were carried out by Dr and Mrs Krishan, they must be pleaded with specificity.”

“(a) It is denied that Dr and Mrs Krishan entered into the alleged or any combination…(c) Dr and Mrs Krishan did not procure the transfer of the Properties to Gracefield. The transfer was effected pursuant to the agreement of the parties. (d) Dr and Mrs Krishan took ownership of Gracefield solely to satisfy the bank’s requirements in order to obtain and overdraft for the company. (e) Dr and Mrs Krishan did not extract all or most of the equity in the Properties for their own benefit and did not seek to do so. (f) Dr and Mrs Krishan did not seek to mislead the Court save to the extent that they are bound by the findings of Deputy Judge Gasztowicz QC (g) The conspiracy claim is out of time.”

“A conspiracy to injure by unlawful means is actionable where [i] the claimant proves that he has suffered loss or damage [ii] as a result of [iii] unlawful action [iv] taken pursuant to a combination or agreement between the defendant and another person or persons [v] to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do.”

‘the fraudulent concealment of their dishonest and unlawful actions as aforesaid as set out in paragraphs 34-37 CAPOC’

“The Defendants presented false evidence at the trial of the Original Claim …to hide their dishonesty, procure judgment in their favour and continue to maintain control of the Properties and [their] proceeds of sale. On 28th July 2010, HHJ Purle QC gave judgment dismissing the Original Claim.”

“After the Purle Judgment was handed down, the Krishans procured the sale of the Properties by Gracefield [noting the sales of the Co-Op in March 2011, sale of the Shops at an undervalue in May 2011; and sale of the Cinema at undervalue in August 2014]. The[y] kept the entirety of the proceeds of sale and did not account or pay to Mrs Takhar any part of them.”

“….based upon the Defendants’ actions taken after the commencement of claim 8BM30468 [i.e. the Original Proceedings] to procure judgment in their favour and to mislead the Claimant and the Court….”

“The Defendants presented false evidence at the trial of the Original Claim …to hide their dishonesty, procure judgment in their favour and continue to maintain control of the Properties and the proceeds of sale.”

“It will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation, by reason of there having been no suggestion whatever in the course of the case that his story is not accepted.”

“…notwithstanding the “general rule in civil cases … that a party is required to challenge by cross-examination the evidence of any witness of the opposing party on a material point which he or she wishes to submit to the court should not be accepted” (see Griffiths…at paragraph 70(i), per Lord Hodge) and the (overlapping) obligation on a party to put his case to a witness with relevant knowledge.”

“In conclusion, the status and application of the rule in Browne v Dunn and the other cases which I have discussed can be summarised in the following propositions: (i) The general rule in civil cases….is that a party is required to challenge by cross-examination the evidence of any witness of the opposing party on a material point which he or she wishes to submit to the court should not be accepted. That rule extends to both witnesses as to fact and expert witnesses. (ii) In an adversarial system of justice, the purpose of the rule is to make sure that the trial is fair. (iii) The rationale of the rule, i e preserving the fairness of the trial, includes fairness to the party who has adduced the evidence of the impugned witness. (iv) Maintaining the fairness of the trial includes fairness to the witness whose evidence is being impugned, whether on the basis of dishonesty, inaccuracy or other inadequacy…(v) Maintaining such fairness also includes enabling the judge to make a proper assessment of all the evidence to achieve justice in the cause. The rule is directed to the integrity of the court process itself…. (vi) Cross-examination gives the witness the opportunity to explain or clarify his or her evidence. That opportunity is particularly important when the opposing party intends to accuse the witness of dishonesty, but there is no principled basis for confining the rule to cases of dishonesty. (vii) The rule should not be applied rigidly. It is not an inflexible rule and there is bound to be some relaxation of the rule…. Its application depends upon the circumstances of the case as the criterion is the overall fairness of the trial. Thus, where it would be disproportionate to cross-examine at length or where, as in Chen v Ng, the trial judge has set a limit on the time for cross-examination, those circumstances would be relevant considerations in the court’s decision on the application of the rule. [Lord Hodge at [59]-[60] also referred to the example of Edwards v Boston [2018] FSR 29 (CA)]. (viii) There are also circumstances in which the rule may not apply…”

“[T]he evidence of fact may be manifestly incredible, and an opportunity to explain on cross-examination would make no difference. For example, there may be no need for trial and cross-examination of a witness in bankruptcy applications where the contemporaneous documents properly understood render the evidence asserted in the affidavits simply incredible.”

“…. In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy, I conclude that the Krishans’ evidence, which I believe anyway, should be accepted and that Mrs Takhar took the copy of the agreement that she was signed away, which was returned, probably by her in some way, duly executed to [SB’s] firm, which then ended up misfiled. At all events, I am satisfied that that was the agreement that was made. The properties were transferred by Mrs Takhar into Gracefield’s name before the written joint venture agreement was prepared, and the only credible explanation that I have heard is that they were so transferred on the terms subsequently set out in the joint venture agreement, which were previously agreed orally….Whilst there was undoubtedly a relationship of trust and confidence, it was not a relationship in which Mrs Takhar put her decision-making powers at the disposal of the Krishans. She retained her own decision-making powers and the transactions were not those which on their face called for an explanation. In any event, such explanations as I have heard persuade me that there has been no abuse of trust and confidence in this case.”

“An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

“[The] common law causes of action, including deceit [and] conspiracy …are all…claims in tort. Accordingly, s.2 [LA] is prima facie applicable to all of them…In almost all claims in tort damage is the “gist” of the action: the tort is only complete, and so the cause of action only accrues, when legally recognised damage has been sustained by the claimant.”

“The conspiracy is the gist of the wrong, though damage is necessary to complete the cause of action.”

“(1)…. where in the case of any action for which a period of limitation is prescribed by this Act, either— (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant …the period of limitation shall not begin to run until the plaintiff has discovered the fraud [or] concealment…..or could with reasonable diligence have discovered it…. (2) [In]..(1) above deliberate commission of breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”

“96 What section 32(1)(b) requires is that the defendant has ‘deliberately concealed’ ‘a fact relevant to the plaintiff’s right of action ….[It covers]…a fact without which the cause of action is incomplete: Arcadia v Visa Inc [2015] Bus LR 1362…if the claimant can plead a claim without needing to know the fact in question, there would appear to be no good reason why the limitation period should not run. 109… What is required is (1) a fact relevant to the claimant’s right of action, (2) the concealment of that fact from her by the defendant, either by a positive act of concealment or by a withholding of the relevant information, and (3) an intention on the part of the defendant to conceal the fact or facts... 153….’Deliberate’, in section 32(2), does not include ‘reckless’. Nor does it include awareness that the defendant is exposed to a claim. As Lord Scott said in Cave at para 58, the words ‘deliberate commission of a breach of duty’ are clear words of English. They mean, as he added at para 61, that the defendant ‘knows he is committing a breach of duty’….”

“The difference is explained, at least in part, by the need for the Court to protect its own process where it has been proved that it and the claimant were deceived by matters discovered after the trial, and because it is contrary to justice for a fraudulent individual to profit from a failure of reasonable diligence. In contrast, a failure to bring an action based on fraud in time is not concerned with seeking to unravel something that has been obtained by fraud, but seeking to prevent proceedings being brought too long after the cause of action accrued when it was reasonable for it to be brought for reasons that must include avoiding claims that are stale. Absent a standstill agreement, or protective proceedings, limitation arises when the cause of action accrues, subject to s. 32 Limitation Act 1980.”

“A conspiracy to injure by unlawful means is actionable where [i] the claimant proves that he has suffered loss or damage [ii] as a result of [iii] unlawful action [iv] taken pursuant to a combination or agreement between the defendant and another person or persons [v] to injure him by unlawful means, whether or not it is the predominant purpose of the defendant to do.”

“….’Unlawful means, both in the intentional harm tort and in the tort of conspiracy, include both crimes and torts (whether or not they include conduct lower on the scale of blameworthiness) provided that they are indeed the means by which harm is intentionally inflicted on the claimant (rather than being merely incidental to it)….. [C]riminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort …. provided that it is indeed the means (what Lord Nicholls…in OBG Ltd v Allen [2008] AC 1, para 159 called ‘instrumentality’) of intentionally inflicting harm.”

“Even if the claimant loses at trial, it will not mean she is responsible for the costs incurred in there having been an earlier trial of no effect.”

“11 Conspiracy being a tort of primary liability, the question what constitute unlawful means cannot depend on whether their use would give rise to a different cause of action independent of conspiracy. The real test is whether there is a just cause or excuse for combining to use unlawful means. That depends on (i) the nature of the unlawfulness, and (ii) its relationship with the resultant damage to the claimant. This was the position reached by the House of Lords in Total Network…..[in holding] that a criminal offence could be a sufficient unlawful means for the purpose of the law of conspiracy, provided that it was objectively directed against the claimant, even if the predominant purpose was not to injure him. 12 The facts of Total Network were that the commissioners had sued Total for participating in…VAT frauds. They alleged unlawful means conspiracy …consisting of the commission by…other conspirators of the common law offence of cheating the revenue. [It was assumed this]… gave rise to no cause of action at the suit of the commissioners independently of the alleged conspiracy….[T]he House declined to apply to unlawful means conspiracy the condition which it had held in OBG… to apply to the tort of intentionally harming the claimant by unlawful acts against third parties, namely that those acts should be actionable at the suit of the third party. They held that the means were unlawful for the purpose of founding an action in conspiracy, whether they were actionable or not…… 14…..[In Total Network]…addressing the character of the unlawfulness required, Lord Walker derived from the authorities the proposition that ‘unlawful means, both in the intentional harm tort and in the tort of conspiracy, include both crimes and torts (whether or not they include conduct lower on the scale of blameworthiness) provided that they are indeed the means by which harm is intentionally inflicted on the claimant (rather than being merely incidental to it)’: para 93…He concluded [at 94]: ‘From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort.. Lord Hope arrived at the same conclusion, at paras 43-44, where addressing the facts of the case before him, he observed that although there was no predominant intention to injure the commissioners, ‘the means used by the conspirators were directed at the claimants themselves’: ‘a conspiracy is tortious if an intention of the conspirators was to harm the claimant by using unlawful means to persuade him to act to his own detriment, even if those means were not in themselves tortious’. 15 The reasoning in Total Network leaves open the question how far the same considerations apply to non-criminal acts, such as breaches of civil statutory duties, or torts actionable at the suit of third parties, or breaches of contract or fiduciary duty. These are liable to raise more complex problems. Compliance with the criminal law is a universal obligation. By comparison, legal duties in tort or equity will commonly and contractual duties will always be specific to particular relationships. The character of these relationships may vary widely from case to case. They do not lend themselves so readily to the formulation of a general rule. Breaches of civil statutory duties give rise to yet other difficulties. Their relevance may depend on the purpose of the relevant statutory provision, which may or may not be consistent with its deployment as an element in the tort of conspiracy. For present purposes it is unnecessary to say anything more about unlawful means of these kinds. 16 The unlawful means relied upon in this case are criminal contempt of court albeit that the offence is punishable in civil proceedings… The freezing order and the receivership order had been made on the application of the bank for the purpose of protecting its right of recovery in the event of the [underlying] claims succeeding. The object of the conspiracy and the overt acts done pursuant to it was to prevent the bank from enforcing its judgments against [the first defendant] and the benefit to him was exactly concomitant with the detriment to the bank as both defendants must have appreciated. In principle, therefore, we conclude the cause of action in conspiracy to injure the bank by unlawful means is made out. We say ‘in principle’, because there remains an issue as to whether an action for conspiracy to commit a contempt of court is consistent with public policy..”

“I have real doubts as to whether English law recognises a tort of unlawful means conspiracy dishonestly to defend a claim through the production of forged documents in those proceedings…. [and] whether the deployment of forged evidence at trial can provide the basis for a private law cause of action, or is a matter to be dealt with under the court’s jurisdiction (through strike-out or committal) or under the criminal law (cf. Marrinan…)”

“18….Mr Samek for Mr Khrapunov, submitted that not only is there no right of action for contempt of court as such, but the absence of such a cause of action reflects a principle of public policy that persons in contempt of court should not be exposed to anything other than criminal penalties at the discretion of the court. He called this the ‘preclusionary rule’. It follows, he says, that even if a non-actionable crime can in principle constitute unlawful means for the purpose of the law of conspiracy, a claim for civil damages founded on a contempt of court is contrary to public policy, however the cause of action may be framed….. 22 [W]e consider that the case against a right of action for breach of a court order cannot be based on any ‘preclusionary rule’ of public policy. When judges [in authorities they had considered at [17]-[21]] say that the ‘sole remedy’ for contempt is criminal penalty, they are not stating a principle of public policy, let alone a ‘preclusionary rule’. They are simply asserting that no private law right is engaged by a contempt. There is a world of difference between the mere absence of a relevant right and a rule of law precluding such a right even if the elements to support it otherwise exist. 23…Mr Samek’s submission, in summary, was that the principles on which the law of contempt was founded required the court to have control over the consequences of a contempt, which it would not have if a right of action existed. That was because a right of action would make damages for contempt a matter of right….We are unmoved by these concerns. It is a commonplace of the law that the same act may give rise to criminal and civil liability. It necessarily follows that in such cases the sentence for the crime will be discretionary, but the civil consequences will not. Thus a person may be given immunity in a criminal trial for burglary, for example because he agrees to give evidence against others involved, but that will not protect him against civil liability to the owner of the goods stolen… [B]reach of an order of the court is actionable where it gives effect to an underlying private law obligation which is itself actionable, although the result is to produce exactly the result that Mr Samek finds objectionable…”

“A person to whom a court order is addressed is guilty of a contempt of court if they breach the court order…. Third parties who have notice of a court order may also be guilty of contempt if they do something which is a wilful interference with the administration of justice….Attorney-General v Times Newspapers Ltd [1992] 1 AC 191, 218-9. The former is often described as a civil contempt and the latter a criminal contempt. Although these labels are controversial and in some circumstances misleading, it is convenient to adopt them…[T]he principal difference between civil and criminal contempt in the present context is the mental element involved in establishing the contempt, as Lord Oliver explained in…Times Newspapers at pp. 217-218. For a civil contempt…the mental element required of a contemnor is not that he either intends to breach or knows that he is breaching the court order or undertaking, but only that he intended the act or omission in question, and knew the facts which made it a breach of the order. By contrast, for a criminal contempt by a third party what is required is a wilful interference in the administration of justice, which in the case of a court order requires an intention that it be breached.”

“70. There is no doubt (and no dispute in this case) that misleading the court by the use of forged documents or by presenting a false case is capable of amounting to an act of contempt… 73. In relation to….the deployment of forged documents, the Defendant contends that it is necessary, in order to establish an act of contempt, to demonstrate that the deployment of forged documents had a significant impact on the court itself, for example, by causing the court to rely upon the forged document in some way. I do not accept this proposition…….Sir Richard Scott V-C, in Malgar Ltd v RE Leach (Engineering) Ltd, having noted that CPR 32.14 had not introduced a new category of contempt [said]: “The general law of contempt is that actions done by an individual which interfere with the course of justice or which attempt to interfere with the course of justice are capable of constituting contempt of court”. 75….[I]n my judgment…it is not necessary to show that either the court or another party was actually misled by the deployment of false or forged evidence. Nor is it necessary to show that either the court or another party took action in reliance on the false or forged evidence. It is sufficient to show that the deployment of the false or forged evidence was likely to have one, other or both of these effects…. 80. In relation to [forgery of documents]….it is agreed that, in order to establish a contempt of court in the ways alleged by the Claimants, the test is that set out in Att-Gen v Sport Newspapers Ltd [1991] 1 WLR 1194, per Bingham LJ at 1208F-H, in a case concerned with whether a publication amounted to contempt:- “the applicant must show that the respondents' publication was specifically intended to impede or prejudice the due administration of justice. Such an intent need not be expressly avowed or admitted but can be inferred from all the circumstances, including the foreseeability of the consequences of the conduct, although the probability of the consequence taken to have been foreseen must be little short of overwhelming before it will suffice to establish the necessary intent. But this need not be the sole intention of the contemnor, and intention is to be distinguished from motive or desire…. 83. It was common ground between the parties that all the allegations have to be proved to the criminal standard, namely beyond reasonable doubt, as is made clear in CPR PD81, para 9: “In all cases, the Convention rights of those involved should be particularly borne in mind. It should be noted that the standard of proof, having regard to the possibility that a person may be sent to prison, is that the allegation be proved beyond reasonable doubt…”

“(1)A person is in breach of this section if he— (a) dishonestly makes a false representation, and (b) intends, by making the representation— (i) to make a gain for himself or another, or (ii) to cause loss to another or to expose another to a risk of loss. (2)A representation is false if— (a) it is untrue or misleading, and (b) the person making it knows that it is, or might be, untrue or misleading. (3) “Representation” means any representation as to fact or law, including a representation as to the state of mind of— (a) the person making the representation, or (b) any other person. (4) A representation may be express or implied. (5) For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications…”

“The elements of the offence of conspiracy to defraud were described in R v Scott [1975] AC 819, 840 by Viscount Dilhorne: “it is clearly the law that an agreement by two or more by dishonesty to deprive a person of something which is his or to which he is or would be or might be entitled and an agreement by two or more by dishonesty to injure some proprietary right of his, suffices to constitute the offence’ …[T]here must be a dishonest agreement which includes unlawfulness, either as to the object of the agreement or the means by which it will be carried out…[E]ither a proprietary right or interest of the potential victim must be injured (or potentially injured)….[T]he defendant must act with an intention to prejudice another’s rights.”

“A person is guilty of forgery if he makes a false instrument, with the intention that he or another shall use it to induce somebody to accept it as genuine, and by reason of so accepting it to do or not to do some act to his own or any other person’s prejudice.”

“I accept that…[‘creating ‘false and fictitious documentation’ to conceal the transactions under the schemes’]…might constitute unlawful means so as to give rise to the tort of conspiracy, provided that the ‘false and fictitious documentation’ was created in order to enable the schemes to be put into effect. I cannot accept that deceptive documents that were not contemplated at the time of a transaction and were drawn up subsequently in order to conceal what had been done would constitute unlawful means whereby a combination to bring about the transaction would be tortious.”

‘litigation forgery’

“I have real doubts as to whether English law recognises a tort of unlawful means conspiracy dishonestly to defend a claim through the production of forged documents in those proceedings. The extension of the tort of malicious prosecution to the initiation of civil proceedings is not without controversy (see the differing views in Willers…), and there is no tort of maliciously defending proceedings….”

“In an action for malicious prosecution, the claimant must show first that he was prosecuted by the defendant, that is to say, that the law was set in motion against him by the defendant on a criminal charge or, now, via civil proceedings; secondly, that the proceedings were determined in his favour; thirdly, that the defendant acted without reasonable and probable cause; and fourthly, that the defendant was malicious. The onus of proving every one of these is on the claimant. Evidence of malice of whatever degree cannot be invoked to dispense with or diminish the need to establish separately each of the first three elements of the tort.”

“20 [R]easonable and probable cause means an honest belief based on reasonable grounds that there is a proper case to lay before the court…. 21 Malice means an improper motive. The proper motive for a prosecution is a desire to secure the ends of justice. Malice will be established if it is shown that this was not the motive of the defendant or that something else was. Malice may be inferred from lack of reasonable and probable cause, but this will depend on the facts of the individual case.”

“55 Malice is an additional requirement….. As applied to malicious prosecution, it requires the claimant to prove that the defendant deliberately misused the process of the court. The most obvious case is where the claimant can prove that the defendant brought the proceedings in the knowledge that they were without foundation… But the authorities show that there may be other instances of abuse. A person, for example, may be indifferent whether the allegation is supportable and may bring the proceedings, not for the bona fide purpose of trying that issue, but to secure some extraneous benefit to which he has no colour of a right. The critical feature which has to be proved is that the proceedings instituted by the defendant were not a bona fide use of the court’s process [as in Crawford]. 56 The combination of requirements that the claimant must prove not only the absence of reasonable and probable cause, but also that the defendant did not have a bona fide reason to bring the proceedings, means that the claimant has a heavy burden to discharge.”

“Reciprocity. It is suggested that the logical corollary of allowing a claim for malicious prosecution of civil proceedings should be a right to sue for the malicious defence of a civil claim without reasonable or probable cause. The same argument might logically be advanced in relation to the malicious prosecution of criminal proceedings. That aside, the question whether there should be civil liability for bad faith denial of claims raises other and wider considerations. For an English court to adopt the approach of Supreme Court of New Hampshire in Aranson v Schroeder (1995) 671 A 2d 1023 and recognise the existence of [that] cause of action….would be bold, to say the least, but I do not see that recognition of civil liability for malicious prosecution of civil proceedings carries with it as a necessary counterpart that there should be liability for bad faith denial of a claim. There is an obvious distinction between the initiation of the legal process itself and later steps which may involve bad faith (for which the court is able to impose sanctions) but do not go to the root of the institution of legal process.”

“Whatever view one takes about recognition of a tort of malicious defence, it is possible, I believe, to remain sanguine about its likely prevalence. Again it must be proved that the defendant knew or had notice of the lack of merit of the basis on which the claim was resisted and persisted in it for a reason unrelated to its legitimate defence. These are not insubstantial requirements of proof. They represent significant evidential hurdles.”

“A claimant who has been subjected to legal proceedings improperly instituted against him will naturally be aggrieved by the institution of those proceedings, be they criminal or civil. Where the charge or claims against the claimant are unfounded, they may ultimately fail, but nonetheless cause injury to him. He is put to the expense of defending himself; damaging publicity may harm his reputation and cause him further financial loss; the trauma of litigation may injure his health…”

“The reason why a claimant cannot as a rule succeed if a prosecution…. terminates adversely to himself is that otherwise there might be a conflict between civil and criminal justice, and all the issues, the conclusive determination of which properly belongs to the criminal court, might be tried over again by a sort of informal appeal. Extended to malicious civil proceedings, there remains a need to avoid collateral attack on decisions.”

“It is by no means unknown for disappointed litigants, looking back at proceedings which resulted in an adverse judgment…to come to believe that…..their opponent must have engaged in deceit. Conduct and intentions not originally seen as fraudulent may now be perceived in a malign light….There are sayings, mentioned in Takhar, that… fraud ‘unravels all’. But allegations of fraud are not to be regarded as some kind of open sesame which have only to be uttered to enable a party to engage in a new round of litigation of disputes that have been compromised or decided.”

“6 ….[T]he economic torts are a major exception to the general rule that there is no duty in tort to avoid causing a purely economic loss unless it is parasitic upon some injury to person or property. The reason for the general rule is that, contract apart, common law duties to avoid causing pure economic loss tend to cut across the ordinary incidents of competitive business, one of which is that one man’s gain may be another man’s loss. ….Identifying the point at which it transgresses legitimate bounds is therefore a task of exceptional delicacy. The elements of the…established economic torts are carefully defined so as to avoid trespassing on legitimate business activities or imposing any wider liability than can be justified in principle.…[O]f all the economic torts [conspiracy] is the one whose boundaries are perhaps the hardest to define in principled terms…. 10 What is it that makes the conspiracy actionable as such ? To say that a predominant purpose of injuring the claimant in the one case and the use of unlawful means in the other supply the element of unlawfulness required to make a conspiracy tortious simply restates the proposition in other words. A more useful concept is the absence of just cause or excuse…A person has a right to advance his own interests by lawful means even if the foreseeable consequence is to damage the interests of others. The existence of that right affords a just cause or excuse. Where, on the other hand, he seeks to advance his interests by unlawful means he has no such right. The position is the same where the means used are lawful but the predominant intention of the defendant was to injure the claimant rather than to further some legitimate interest of his own. This is because in that case it cannot be an answer to say that he was simply exercising a legal right. He had no interest recognised by the law in exercising his legal right for the predominant purpose not of advancing his own interests but of injuring the claimant. In either case, there is no just cause or excuse for the combination.”

“In the end I conclude that the arguments against renewed recognition of a tort of malicious prosecution of civil proceedings fail to override the need for the law to be true to the reason for its very existence. In X (Minors) v Bedfordshire CC [1995] 2 AC 633 Sir Thomas Bingham MR referred, at p 663, to ‘the rule of public policy which has first claim on the loyalty of the law: that wrongs should be remedied’. The word in the rule is ‘wrongs’ as opposed to ‘misfortunes’: see Gorringe v Calderdale MBC [2004] 1 WLR 1057, para 2 (Lord Steyn). In Jones v Kaney [2011] 2 AC 398, para 113 Lord Dyson JSC said: ‘The general rule that where there is a wrong there should be a remedy is a cornerstone of any system of justice. To deny a remedy to the victim of a wrong should always be regarded as exceptional ..any justification must be necessary and requires [to be] strict and cogent.”

“In the ordinary run of cases, courts consider what has been decided previously and follow the precedents. In cases where the question whether a duty of care arises has not previously been decided, courts will consider the closest analogies in the existing law, with a view to maintaining the coherence of the law and the avoidance of inappropriate distinctions. They will also weigh up the reasons for and against imposing liability…to decide whether the existence of a duty of care would be just and reasonable.”

“[T]he higher courts have in a number of respects laid down important and binding principles regarding what justice requires in the context of litigation which are relevant to the application of the overriding objective in the CPR, and one of these is….finality in litigation. This is a general principle with various aspects, including the rule in Henderson v Henderson…This rule is firmly underwritten by and inherent in the overriding objective.”

“Where a party to an action seeks to challenge, on the ground that it was obtained by fraud or mistake, a judgment or order that finally disposes of the issues raised between the parties, the only ways of doing it that are open to him are by appeal….or by bringing a fresh action to set it aside.”

“[T]he doctrine of abuse of process is best framed, at least in the context of a ‘collateral’ attack on a prior civil decision, by reference to the test expounded by Lord Diplock [in Hunter]…If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings, then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge in the earlier action if (a) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (b) to permit such re-litigation would bring the administration of justice into disrepute.”

“…[S]trike out for abuse of process is a flexible power unconfined by narrow rules. It exists to uphold the private interest in finality of litigation and the public interest in the proper administration of justice and can be deployed for either or both… It is a serious thing to strike out a claim and the power must be used with care with a view to achieving substantial justice…where the court considers... its processes are being misused. It will be a rare case where the re-litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse, but where the court finds such a situation abusive, it must act.”

“I have real doubts as to whether… the deployment of forged evidence at trial can provide the basis for a private law cause of action, or is a matter to be dealt with under the court’s jurisdiction (through strike-out or committal) or under the criminal law (cf. Marrinan v Vibart [1963] 1 QB 234 (CA)”

“Whatever form of action is sought to be derived from what was said or done in the course of judicial proceedings must suffer the same fate of being barred by the rule which protects witnesses in their evidence before the court and in the preparation of the evidence which is to be so given.”

“The immunity from suit…is designed to encourage freedom of speech and communication in judicial proceedings by relieving persons who take part in the judicial process from the fear of being sued for something they say. It is generated by the circumstances in which the statement was made and it is not concerned with its use for any purpose other than as a cause of action. In this respect, however, the immunity is absolute and cannot be removed by the court or affected by subsequent publication of a statement.”

“As all the cases recognise, a rule designed to protect the innocent will, on occasion, protect the guilty. A witness does not lose his immunity simply because he has been dishonest or malicious in giving his evidence.”

“A witness…is absolutely immune from civil liability for things said in evidence or in circumstances directly preparatory to giving evidence. An action against him for negligence or defamation would fail. If it were framed in conspiracy, it would still fail, as it did in Marrinan…This is because the objection to such an action is not the absence of the necessary elements of a cause of action, but a special immunity based on a public policy that a witness should be able to give evidence without fear of adverse legal consequences other than prosecution for perjury or perverting the course of justice. The public policy is engaged by any attempt to found a claim on what the defendant did as a witness, irrespective of the legal label.”

“[The immunity] does not involve that an action…not brought in respect of evidence given in court, but …alleged abuse of process of the court must be defeated if one step…involved giving of evidence….[A] defendant [sued]..for malicious prosecution [may] have given evidence in the criminal prosecution of which the plaintiff complains….So also in actions based upon alleged abuses of the process of the court it will often have happened that the court will have been induced to act by reason of some false evidence given by someone. In such cases the actions are not brought on or in respect of any evidence given but in respect of malicious abuse of process.”

“The statement…supports a broader proposition that if the action is not brought simply in respect of evidence given or supplied, but is brought in relation to some broader objective during the currency of which it may well be that evidence was given, witness immunity should not apply.”

“As the….immunity is to encourage freedom of expression, it is limited to actions in which the alleged statement constitutes the cause of action.”

“(i) the core immunity relates to the giving of evidence and its rationale is to ensure that persons who may be witnesses in other cases in the future will not be deterred from giving evidence by fear of being sued for what they say in court; (ii) the core immunity also comprises statements of case and other documents placed before the court; (iii) that immunity is extended only to that which is necessary in order to prevent the core immunity from being outflanked; (iv) whether something is necessary is to be decided by reference to what is practically necessary; (v) where the gist of the cause of action is not the allegedly false statement itself, but is based on things that would not form part of the evidence in a judicial inquiry, there is no necessity to extend the immunity; (vi) in such cases the principle that a wrong should not be without a remedy prevails.”

“[T]he distinction…I would draw [is] between the act itself and the evidence that may be given about the act or its consequences. This distinction rests upon the fact that acts which are calculated to create or procure false evidence or to destroy evidence have an independent existence from, and are extraneous to, the evidence that may be given as to the consequences of those acts. It is unlikely that those who have fabricated or destroyed evidence would wish to enter the witness box for the purpose of admitting to their acts of fabrication or destruction. Their acts were done with a view to the giving of evidence not about the acts themselves but about their consequences. The position is different where the allegation relates to the content of the evidence or the content of statements made with a view to giving evidence, and not to the doing of an act such as the creation or the fabrication of evidence. The police officer who is alleged to have given false evidence that he found a brick or drug in the possession of the accused or that he heard an accused made a statement or a remark which was incriminating is protected because the allegation relates to the content of his evidence. He is entitled to the immunity because he was speaking as a witness, if he made the statement when he was giving evidence, or was speaking as a potential witness, if he made it during his preliminary examination with a view to his giving evidence.”

“[T]he immunity in essence relates to the giving of evidence. There is, in my opinion, a distinction in principle between what a witness says in court (or what in a proof of evidence a prospective witness states he will say in court) and the fabrication of evidence, such as the forging of a suspect's signature to a confession or a police officer writing down in his notebook words which a suspect did not say or…planting…drugs on a suspect.”

“In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy, I conclude that the Krishans’ evidence, which I believe anyway, should be accepted and that Mrs Takhar took the copy of the agreement that she was signed away, which was returned, probably by her…duly executed to [SB]..”

‘It was a very serious, pre-meditated, carefully planned and executed fraud..instrumental in the defeat of Mrs Takhar’s claim, plainly aimed from start to finish at deceiving the court about the central issue’

“[The Krishans] not only forged a key document in support of their case with a view to deceiving the court in the original action (which worked), but also went on oath in the present action to lie about what they had done and to seek to deflect blame for the forgery onto third party professionals, who were not before the court.”

‘intention’, ‘combination’, ‘causation’ (including the forgery was ‘indeed the means’ of inflicting the intended harm) and ‘damage’

‘what the Claimant would have done’ had the Krishans not intervened from 2005 onwards. I make these findings on balance of probabilities - since it relates to her counterfactual conduct rather than that of third parties (see Perry v Raleys [2020] AC 532 (SC) at [20]). However, whilst Perry held damages reliant on third party conduct (including a Court) are assessed on the loss of a chance, since the Purle Judgment has been set aside and I have re-tried and upheld the undue influence and resulting trust claims, no discount need be made to them or to conspiracy damages to reflect the chance HHJ Purle QC would have found for the Krishans in 2010 in the absence of fraud. That would be an impossible exercise (not least since HHJ Purle QC has tragically died), the Purle Judgment caused the Claimant damage, but it was not ‘damages’

‘Purchasers are paying a premium for derelict properties or [ones] in need of refurbishment, with or without planning consent’

“16. Challinors was retained by the defendant [i.e. the present Claimant] in or about July 2008 and acted on her behalf up to and including the conclusion of litigation between her and the Krishans and an associated company, Gracefield, which the defendant lost. 17. As a result of losing the litigation against the Krishans and Gracefield: a. the defendant became liable to pay 80% of the Krishans and Gracefield’s costs which have yet to be assessed but which may well amount to over £600,000; b. the defendant is unlikely to receive any benefit from the sale of the…Properties (which she understands has now occurred) because her entitlement to share in the proceeds of sale, as found by the court, is likely to be more than offset by her liability to pay the Krishans’ and Gracefield’s costs; and c. she did not recover any of her costs from the Krishans and Gracefield which costs, subject to assessment totalled c. £212,000. 18. Challinors was in breach of the terms of its retainer and/or negligent in: a. failing to procure in good time and deploy as required expert evidence which was necessary for the successful prosecution of the litigation against the Krishans and Gracefield; b. failing to advise her adequately as to the amount of the costs she would have to incur and might have to pay if the litigation was lost; c. failing to identify the need for and to procure for the defendant after-the-event insurance (‘ATE insurance’) which would have protected her in whole or in part against the risk of an adverse costs order and/or the risk of not recovering her own costs. 19.And the defendant accordingly seeks damages by this counterclaim for: a. the value of the lost chance of success which the defendant would have had but for the failure to obtain appropriate expert evidence; and b. the value of the lost opportunity to obtain ATE insurance which would have covered her against the risk of an adverse costs order and/or an inability to recover her own costs in the litigation against the Krishans and Gracefield in the event it had still been lost.”

“The party exercising undue influence incurs no liability. It is merely that the party whose consent was obtained by the exercise of undue influence is entitled to have the contract set aside.” (As noted at paragraph 415 above, that was why Gracefield is in the same position as the Krishans as a result of their undue influence on the Claimant in procuring the transfers). The equitable doctrine of set-aside is ‘rescission’. The modern approach was summarised in Cheese v Thomas [1994] 1 WLR 129 (CA) by Sir Donald Nicholls V-C (as he then was). Like his own restatement of undue influence as Lord Nicholls in Etridge, I again quote it at length at pgs.134-138: “Restitution has to be made, not damages paid. Damages look at the plaintiff's loss, whereas restitution is concerned with the recovery back from the defendant of what he received under the transaction. If the transaction is set aside, the plaintiff also must return what he received. Each party must hand back what he obtained under the contract. There has to be a giving back and a taking back on both sides…It is well established that a court of equity grants this type of relief even when it cannot restore the parties precisely to the state they were in before the contract. The court will grant relief whenever, by directing accounts and making allowances, it can do what is practically just: see Erlanger v. New Sombrero Phosphate Co. (1878) 3 App Cas. 1218, 1278-1279, per Lord Blackburn….. “….The basic objective of the court is to restore the parties to their original positions, as nearly as may be, consequent upon cancelling a transaction which the law will not permit to stand.”

‘The remedy is equitable. Its application is discretionary, and where…applied, it must be moulded in accordance with the exigencies of the particular case’.….. If the defendant has improved the property he is ordered to return, the plaintiff may be required to compensate him. On the other hand, if the plaintiff has improved the property he seeks to return, he will not necessarily be entitled to a further payment from the defendant; it may not be just to require the defendant to pay for improvements he does not want. If the plaintiff has permitted the property to deteriorate, he may be required to make an allowance to the defendant for this when seeking an order compelling him to retake [it]. If a joint business venture is involved, such as an agreement between a pop star and a manager, and the agreement is set aside and an account directed of the profits received by the defendant under the agreement, the court in its discretion may permit the defendant to retain some profits, if it would be inequitable for the plaintiff to take the profits without paying for the expertise and work which produced them……. In O’

"Substantial injustice may result without it. A hard and fast rule that the beneficiary can demand the whole profit without an allowance for the work without which it could not have been created is unduly severe. Nor do I think that the principle is only applicable in cases where the personal conduct of the fiduciary cannot be criticised. I think that the justice of the individual case must be considered on the facts of that case. Accordingly, where there has been dishonesty or surreptitious dealing or other improper conduct then….it might be appropriate to refuse relief; but it depends upon the circumstances."

“If A transfers an asset to B under a voidable contract, and, before the contract is avoided, B sells the asset to C who does not have notice of the circumstances that make the contract voidable, C will take the asset free from any claim by A to recover it. [However]..the fact that the third party, C, has securely acquired an asset from the wrongdoer, B, has never....been treated in equity as barring rescission of the contract between A and B. Following rescission, the claimant A may be entitled either to trace into the proceeds of the sale if they remain identifiable in the B’s hands, or else to claim a financial accounting of those proceeds.”

“The innocent party’s equity to rescind is an entitlement to apply to the court for such an order. The contract remains in force until the order takes effect. Even then the relief may be expressed conditionally, such that the claimant is authorised to elect to rescind upon making counter-restitution or fulfilling other terms….Rescission will be barred where restitutio in integrum is impossible. [It]…will only be possible where the party seeking rescission is able to put those against whom it is asked in the same situation in which they stood when the contract was entered into. The concern of the bar is to protect a defendant from unjustified prejudice; that circumstances have changed such that it is no longer possible fully to restore the claimant will not preclude rescission. In making their election, it is for the claimant to decide whether they are content to get back less than they gave.”

“It is through the accounting procedure, and….the principles that govern it, that any personal liability a custodial fiduciary may have arising out of maladministration is ascertained and determined. For instance, where the fiduciary no longer has an asset which they should have, the accounting serves to convert the obligation to make it over into a personal obligation to pay an equivalent sum as ‘an equitable debt or liability in the nature of debt’. Even where a full and formal accounting is not necessary, the same principles apply. Third parties who receive misdirected trust assets with sufficient knowledge of their wrongful provenance are accountable in the same sense.” (citations omitted and my emphasis). As Mr Graham also accepted, as resulting trustee Gracefield owed the Claimant fiduciary obligations; and likewise, I found that as the Claimant’s agent with Coventry CC, Dr Krishan also owed her fiduciary obligations ‘within the confines of that agency’ as Mr Graham put it. Whether or not that would have entitled the Claimant to claim an account of profits for undue influence against Dr Krishan on that footing is now academic. However, he had a treble status as (i) fiduciary before the resulting trust; then along with Mrs Krishan (ii) joint director of the resulting trustee Gracefield; then (iii) joint recipient of the proceeds of the resulting trust (although Knowing Receipt was also not pleaded, factually I found they did receive the proceeds). That treble status for Dr Krishan (and double status for Mrs Krishan) reinforces the availability of an equitable account against them. Equitable accounting was explained by Lord Millett in the Hong Kong Final Court of Appeal in Libertarian Investments v Hall (2013) ITELR 1 (in deciding an account was unnecessary given findings of loss by fraudulent breach of trust): “[168] [A]n order for an account does not in itself provide the plaintiff with a remedy; it is merely the first step in a process which enables him to identify and quantify any deficit in the trust fund and seek the appropriate means by which it may be made good. Once the plaintiff has been provided with an account he can falsify and surcharge it. If the account discloses an unauthorised disbursement the plaintiff may falsify it, that is to say ask for the disbursement to be disallowed. This will produce a deficit which the defendant must make good, either in specie or in money…. [170] If on the other hand the account is shown to be defective because it does not include property which the defendant in breach of his duty failed to obtain for the benefit of the trust, the plaintiff can surcharge the account by asking for it to be taken on the basis of ‘wilful default’…on the basis the property should be treated as if the defendant had performed his duty and obtained it for the benefit of the trust. Since….the property has not been acquired, the defendant will be ordered to make good the deficiency by the payment of money and in this case the payment of ‘equitable compensation’ is akin to the payment of damages as compensation for loss. [171] In an appropriate case the defendant will be charged, not merely with the value of the property at the date when it ought to have been acquired or at the date when the account is taken, but at its highest intermediate value. This is on the footing either that the defendant was a trustee with power to sell the property or that he was a fiduciary who ought to have kept his principal informed and sought his instructions. [172] At every stage the plaintiff can elect whether or not to seek a further account or inquiry. The amount of any unauthorised disbursement is often established by evidence at the trial, so that the plaintiff does not need an account but can ask for an award of the appropriate amount of compensation. Or he may be content with a monetary award rather than attempt to follow or trace the money, in which case he will not ask for an inquiry as to what has become of the trust property. In short, he may elect not to call for an account or further inquiry if it is unnecessary or unlikely to be fruitful, though the court will always have the last word.”

“135 The measure of [equitable] compensation should…normally be assessed at the date of trial, with the benefit of hindsight. The foreseeability of loss is generally irrelevant, but the loss must be caused by the breach of trust, in the sense that it must flow directly from it. Losses resulting from unreasonable behaviour on the part of the claimant will be adjudged to flow from that behaviour, and not from the breach. The requirement that the loss should flow directly from the breach is also the key to determining whether causation has been interrupted by the acts of third parties…. 136 It follows that the liability of a trustee for breach of trust, even where the trust arises in the context of a commercial transaction which is otherwise regulated by contract, is not generally the same as a liability in damages for tort or breach of contract. [But] of course the aim of equitable compensation is to compensate: that is to say, to provide a monetary equivalent of what has been lost as a result of a breach of duty...”

“[T]he plaintiffs cannot recover damages for injury to reputation. Nor can they recover damages for injured feelings…. But the plaintiffs also contend that if they can prove some pecuniary loss…. they can also maintain some general, unspecified and unquantified plea of damage to goodwill arising from all the other overt acts relied upon which are wholly unconnected with any loss…I cannot accept this…[T]here must be a sufficient nexus between the act causing pecuniary loss and the other damage for which compensation is claimed. Since the tort of conspiracy to injure is not complete without pecuniary loss, any damages at large must be referable to the act causing the pecuniary loss which constitutes the tort. [Lonrho also claims] the costs of defending the Esterhuysen proceedings. In my judgment this claim is unsustainable. [Lonrho] accepts that [it] can have no claim unless [it] wins the Esterhuysen litigation….[But] …a party cannot recover in a separate action costs which he could have been, but was not, awarded at the trial of a civil action, or the difference between the costs he recovers from the other party and those he has to pay his own solicitors.”

‘The intention to injure disposes of any question of remoteness’

“Consequences intended by the defendant will never be too remote…. [Liability in the intentional torts]…extends to all the consequences which can be linked to the tortious conduct, provided those consequences are properly attributable as a matter of causation to the defendant’s conduct and not to some [intervening cause].”

“[T]he normal method of calculating the loss caused by the deceit is the price paid less the real value of the subject matter of the sale. To the extent that this method is adopted, the selection of a date of valuation is necessary. Generally the date of the transaction would be a practical and just date to adopt. But it is not always so. It is only prima facie the right date. It may be appropriate to select a later date. That follows from the fact the valuation method is only a means of trying to give effect to the overriding compensatory rule..Moreover, and more importantly, the date of transaction rule is a second order rule applicable only where the valuation method is employed. If that method is inapposite, the court is entitled simply to assess the loss flowing directly from the transaction without any reference to the date of transaction or indeed any particular date. Such a course will be appropriate whenever the overriding compensatory rule requires it.”

“40 If the aim is to put the injured party in the position that he would have been in if the fraud had not occurred, that aim is generally achieved by ensuring he gets back the value, in money terms, of what he parted with. So, for example, if he is fraudulently induced to sell an asset worth £10,000 for £4,000, he is compensated by an award of £6,000 because, by keeping the £4,000, he has received £10,000 in total. If he also had to give credit for interest notionally (or even actually) earned on the £4,000 he would be under-compensated, because he would receive less than the full £10,000 that the asset was worth at the time of sale. The notional interest to be earned in future is not part of the value he receives for the asset from the purchaser, nor is it properly described as a benefit conferred on him by the sale transaction. 41 The longer the delay in the award of the £6,000, the greater the amount of that under-compensation would be. The difference would not be eliminated by an award of interest on the £6,000 because that reflects the loss of use of that sum from the date on which it should have been paid… 42 Now suppose that the asset sold at an undervalue was bought as an investment, and by the time the balance of the £10,000 (i e the £6,000) is awarded, the asset is worth £25,000 and the injured party proves that he would have kept it (for the sake of simplicity, assume that there is no discount for uncertainty about that). The consequential loss is £15,000, which is the difference between the £25,000 (ie what the asset would now be worth if he had not sold it to the fraudster) and the £10,000, which is what it was worth when he did sell it to the fraudster…. If he receives the £15,000 on top of the £6,000 basic damages, he is put in the position in which he would have been but for the fraud….in total £25,000).”

“[T]he fairest way to compensate the claimants is to award them the value of the cargo at the time when he gave his judgment….. Even if the judge had awarded damages based on the value of the cargo at the date of conversion, he would have been able to award the difference in value between the date of conversion and the date of judgment as loss consequential on the shipowners’ breach of duty….This consequential loss could equally be described as damages for loss of use of copper between the date of conversion and the date of judgment and ought to be recoverable as such, provided that there is no allegation that the claimants have failed to mitigate their loss…[T]he judge also awarded the claimants interest on the invoice value of the goods between the date of conversion and the date of judgment on the basis that, for that period, the[y] had been out of their money. [But that] will give the claimants a double benefit. The basis of an award of the value of the goods at the date of judgment is that, although the claimants did not have the money when they expected to have it, they will be compensated for that by the increase in the value of the copper.”

“It was common ground that the applicable measure of damages was that which applies to a claim in deceit, as established by the decision of the House of Lords in Smith New Court…. at 266H to 267D. Although the claim against [the defendant here] was for unlawful means conspiracy rather than deceit, the unlawful means in question consisted of deceiving [the claimant. In Smith] Lord Browne-Wilkinson described the applicable principles: “In sum, in my judgment the following principles apply in assessing the damages payable where the plaintiff has been induced by a fraudulent misrepresentation to buy property: (1) The defendant is bound to make reparation for all the damage directly flowing from the transaction; (2) Although such damage need not have been foreseeable, it must have been directly caused by the transaction…..; (3) In assessing such damage, the plaintiff is entitled to recover by way of damages the full price paid by him, but he must give credit for any benefits which he has received as a result of the transaction….. (4) As a general rule, the benefits received by him include the market value of the property acquired as at the date of acquisition; but such general rule is not to be inflexibly applied where to do so would prevent him obtaining full compensation for the wrong suffered…. (5) Although the circumstances in which the general rule should not apply cannot be comprehensively stated, it will normally not apply where either (a) the misrepresentation has continued to operate after the date of the acquisition of the asset so as to induce the plaintiff to retain the asset or (b) the circumstances of the case are such that the plaintiff is, by reason of the fraud, locked into the property. (6) In addition, the plaintiff is entitled to recover consequential losses caused by the transaction; (7) The plaintiff must take all reasonable steps to mitigate his loss once he has discovered the fraud.”

“The general rule is that loss which has been avoided is not recoverable as damages, although expense reasonably incurred in avoiding it may be recoverable as costs of mitigation. To this there is an exception for collateral payments (‘res inter alios acta’), which the law treats as not making good the claimant’s loss. It is difficult to identify a single principle underlying every case. In spite of what the Latin tag…the critical factor is not the source of the benefit in a third party but its character. Broadly speaking, collateral benefits are those whose receipt arose independently of the circumstances giving rise to the loss. Thus, a gift received by the claimant, even if occasioned by his loss, is regarded as independent of the loss because its gratuitous character means that there is no causal relationship between them. The same is true of a benefit received by right from a third party in respect of the loss, but for which the claimant has given a consideration independent of the legal relationship with the defendant from which the loss arose. Classic cases include loss payments under indemnity insurance or disability pensions under a contributory scheme… …. In cases like these, as between the claimant and the wrongdoer, the law treats the receipt of the benefit as tantamount to the claimant making good the loss from his own resources, because they are attributable to his premiums, his contributions or his work. The position may be different if the benefits are not collateral because they are derived from a contract (say, an insurance policy) made for the benefit of the wrongdoer: …. or because the benefit is derived from steps taken by the Claimant in consequence of the breach, which mitigated his loss: These principles represent a coherent approach to avoided loss. In Parry v Cleaver [1970] AC 1, Lord Reid derived them from considerations of ‘justice, reasonableness and public policy’. Justice, reasonableness and public policy are, however, the basis on which the law has arrived at the relevant principles. They are not a licence for discarding those principles and deciding each case on what may be regarded as its broader commercial merits.”

“If…Mr Hunt had lent the money to Swynson to strengthen its financial position in the light of EMSL’s default, the payment would indeed have had no effect on the damages recoverable from HMT. The payment would not have discharged EMSL’s debt. It would also have been collateral. But the payments made by Mr Hunt to EMSL and by EMSL to Swynson to pay off the loans could not possibly be regarded as collateral….[T]he transaction discharged the very liability whose existence represented Swynson’s loss.”

“….[T]he Court [must first] identify ‘the transaction’ which has caused the claimant to acquire the property in question. Only then is it possible to identify any benefits received as a result of that transaction, as distinct, for example, from benefits received as a result of some other transaction. Benefits received as a result of some other transaction may be regarded as res inter alios acta or…collateral, although that term has generally been used in the context of avoided loss, which I would regard as a distinct matter. The next step is to identify [those] benefits received as a result of the transaction, which may require a decision to be made as to the date at which any benefits should be valued. In most cases those first two steps will be sufficient to assess the loss which the claimant has suffered and thus to arrive at the damages figure which it is entitled to recover….[A] further question may sometimes arise, whether the claimant has avoided that loss, either in whole or in part. When considering that last question, no account will be taken of benefits which are res inter alios acta or collateral…. Broadly speaking, a key test for whether a benefit is collateral is whether its receipt arose independently of the circumstances giving rise to the loss…[W]hether action diminish[ing] loss ‘arises out of the transaction’ as distinct from being independent or collateral is a question of causation…”

“The question whether an alleged benefit should or should not be taken into account cannot be determined by mere application of the ‘but for’ test. Where the wrongful conduct consists of causing the victim to enter into a venture or transaction which he would not otherwise have entered into and the wrongdoer alleges that the victim has received a subsequent benefit which he would not have received but for entering into the venture or transaction, it seems to me that the question to be asked is whether the receipt of the benefit was not merely a result of the venture or transaction, in a historical sense, but was part of the complex of obligations and benefits intrinsic, ie belonging naturally, to the venture or transaction. Otherwise, it is hard to know where to draw the line.”

“[W]hat Mr Tuke did, or may have done, with the cash he received after he received it, is irrelevant. If he had used the money to gamble and had won a further £1m, those winnings would not be brought into account in the computation of damages, any more than a loss of £1m would increase the recoverable damages. The gain or loss would not be a result of the transaction but of his own independent acts and decisions.”

"In proceedings before the … [Court] for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and (a) in the case of any sum paid before judgment, the date of the payment; and (b) in the case of the sum for which judgment is given, the date of the judgment."

“(1) Interest is awarded to compensate claimants for being kept out of money which ought to have been paid to them rather than as compensation for damage done or to deprive defendants of profit they may have made from the use of the money. (2) This is a question to be approached broadly. The court will consider the position of persons with the claimants’ general attributes, but will not have regard to claimants’ particular attributes or any special position in which they may have been. (3) In relation to commercial claimants the general presumption will be that they would have borrowed less and so the court will have regard to the rate at which persons with the general attributes of the claimant could have borrowed. This is likely to be a percentage over base rate and may be higher for small businesses than for first class borrowers. (4) In relation to personal injury claimants the general presumption will be that the appropriate rate of interest is the investment rate. (5) Many claimants will not fall clearly into a category of those who would have borrowed or those who would have put money on deposit and a fair rate for them may often fall somewhere between those two rates [There] are examples of cases….within that mid-category, justifying a blending between rates [where]..interest was awarded at 3% over base rate.”

“The current edition of Jackson and Powell on Professional Liability 8th edn, at para.3–024…states: ‘….[T]he Court may take the rate applicable to judgments by s.17 of the Judgments Act 1838. However, that is only an option and should not be applied without considering whether some other, more flexible rate is more appropriate. In [other cases] interest was awarded on damages awarded against solicitors at the short-term investment rate’…. I consider that it is wholly appropriate to adopt the judgment debt rate… That is not just because [it] more adequately compensates Mr Perry for the fact that he has been kept out of his money for so long, but also because the conduct of Raleys (or their insurers), in their long drawn-out defence of this claim, deserves appropriate sanction. [They]…refused to accept that they were in negligent breach of duty until two days before trial; [they]… raised every conceivable defence, including putting Mr Perry to proof that he would have succeeded in his claim under the Scheme…[they] effectively sidelined the findings of the jointly instructed sole expert…and attempted …to conduct a trial of the….hypothetical claim under the Scheme, based on a superficial cross-examination of an unsophisticated claimant by reference to historical medical records going back many years…. [A] fair and just result justifies interest being awarded on the judgment debt basis. I note that it was not suggested in argument…Mr Perry or his advisers had been responsible for any delay in the resolution of the litigation.”

“…[T]he judge also awarded the claimants interest on the invoice value of the goods between the date of conversion and the date of judgment on the basis that, for that period, the[y] had been out of their money. [But that] will give the claimants a double benefit. The basis of an award of the value of the goods at the date of judgment is that, although the claimants did not have the money when they expected to have it, they will be compensated for that by the increase in the value of the copper.”

“In the absence of fraud Equity only awards compound (as opposed to simple) interest against a defendant who is a trustee or otherwise in a fiduciary position by way of recouping from such a defendant an improper profit made by him. It is unnecessary to decide whether in such a case compound interest can only be paid where the defendant has used trust moneys in his own trade or (as I tend to think) extends to all cases where a fiduciary has improperly profited from his trust.”

“[C]ompound interest may be appropriate where the trustee or fiduciary has misappropriated funds which the court assumes would have been used by him to earn profits and, instead of ordering an account of those profits, orders him to pay compound interest on the sum extracted. Where the fiduciary is ordered to pay equitable compensation on the basis of gains which the court finds would have accrued to the trust estate if he had duly performed his fiduciary duty, it would be double-counting and punitive to order the amount of equitable compensation to carry compound interest.”

“I can elect for 5% as you’re a fraudster and you’ve had my money and kept it. I don’t even have to go into what you’ve done with it.”