“The lease does not refer to the three month rent deposit – I have seen the rent deposit Deed but does the lease not mention this. Superior lease term to be varied to extend to time beyond the five year period. We have all the utilities in the store room in the ground floor to which we will require access. How do you propose we deal with this issue. Otherwise all appears fine.”
“We had brief discussion and what we had agreed was to regularise sometime later and not immediately. I am not happy with the tone of the email and we need to have one to one and not have this in writing.”
“Can we meet this weekend and resolve the matter. The matter with Prakash has nothing to do with the investment that was jointly undertaken, as you are well aware. There are no legal threats in any of the emails sent to you previously. Numerous investments are jointly held, which you have considerable experience managing and assisting with, like I do. We have numerous clients that are successfully able to own such investments in a JV structure, so I am unsure of your concerns. I agree that the intentions of both partners need to be similar, which is to create an investment vehicle for future generations. That was our respective objective. I don’t believe that has changed, irrespective who owns shares in the Company for succession purposes. You decided that the 50% shareholding was to be held by [Mrs Ved] and you were happy for the other shareholding to be held by [MrsChohan]. I am considering succ-ession planning as you are well aware. When this matter was brought up between us and in [Mrs Chohan’s] presence at my home, you had no issues either. I agree that it is best that matters are dealt with amicably in a manner which creates clarity. What time and where, please?”
“Even after I expressed my desire to move to Central London (which is in the best interest of my business) in the presence of Milan and yourself, you never raised any concern with the jointly held investment. Until the email today, this has never been suggested to either [Mrs Chohan] or myself to date.”
“… and if you do then you might as well forget the friendship and I will walk away from this office which has always been your intention.”
“I brought you into this good faith. I could have used Mama’s funds if I wanted to. Your insistence on regularising the matter has caused all this issues as I do not want to look stupid in front of the bank. I can understand [Mrs Chohan] has put pressure on you and like I said I would rather deal with this now than five years down the line.”
“On Wednesday,12 October 2016 , following our brief telephone conversation, we entered into a frenzy of email exchanges when you basically threw the kitchen sink at me by questioning my honesty, integrity, motive, ability to fund the purchase of 5 Theobald Court on my own and finally as a last insult throwing my late Kaka’s name into the dispute. Let me put the whole situation into perspective, I have from thefirst day acted in the manner in which you have dictated ‐ by not wanting your or [Mrs Chohan’s] name as shareholder in Nexbell. It was entirely your decision. As a result, I applied to Lloyds for a loan stating that I personally had the funds and I together with [Mrs Ved] were solely acquiring the premises. Despite you not wanting to accept the two DOTs, I handed them to you which you took home. For reasons you have already explained to me, you now want to formalize the agreement and make me lose my credibility with the bank. Furthermore, you have copied the email of30 September 2016 to Sujata and Vishal (in your own words for IHT planning), without discussing the same with me. It appears that when you click your fingers, I have to jump. You have not considered my side and the impact it would have on me. Jas I resisted to formalize the situation, you threatened me ‐ that you would call Peter at the bank and not deal with the lease with Success Appointments until I made you a shareholder and director of Nexbell which is totally unprofessional. You brought this subject up when you realized that the rent from the ground floor was in excess of what I was paying for each floor and kept on insisting when we met at your offices that I surrender my lease and formalize so that all rent can go to Nexbell. This is pure greed on your part. However, I have neveraccused of you being greedy. At that time, you did not consider the fact that I had been paying rent, rate and service charges on the entire office solely since last November. You did not offer to pay your share. It was only after I mentioned the fact (during our Sunday walk) that you were supposed to have occupied one floor and shared the rent that you stated that this can be dealt with at the same time as formalizing everything. I have in one of my emails in the past mentioned that both of us have a different outlook for this building, i.e. I use this as my office whereas you have moved out and are now treating it as an investment. I want to spend money on this building to improve the outlook whereas your wish is to pay loan quicker. You want to be debt free on this property whereas paying interest at 2.55% OBR for next 25 years is something I prefer to do for tax purpose. We clearly have two different views which will cause problems in the future. In the absence of a reply from you to my email sent to you early Friday morning, (14 October 2016 at 6.53 am) I have, for the sake of my health, decided to transfer both Suchita's and myshare in Nexbell to your family members. This I believe is the best action to take since receiving your first email on30 September 2016 (when I had specifically requested you not to do so) on this subject, Based on acrimonious email exchanges on Wednesday, when you accused me of being greedy and mentioning my late Kaka's teachings, I think it is better that this matter is resolved now rather than anytime in the future.”
“The Conflicts which compromised his professional duty to our client at the time are obvious.”
"[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 (as in the present case) 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."
“I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities”
“The intention was to give both of us the comfort of being able to continue our different practices without interruption, and after we both moved to central London (although his intended timeframe was longer than mine) to convert this new property to a commercial investment for the benefit of our families”
“was to move to central London with me. The purpose of the purchase was not the occupational intention. It was an investment decision and the intention was to move to central London.”
“that was never indicated to me”
“What I am saying is I understood Mr Ved’s intention to move to central London within the five-year period. Now if he had decided to stay longer, then we would have had a discussion about that. And if he agreed to pay market rent, I would have agreed; because who occupies the property is immaterial, what is important is that market rent is paid.”
“what I am going to suggest to you is at its heart the fundamental agreement between you and Mr Ved, so far as Mr Ved’s occupation was concerned, was that as long as he paid market rent he could continue to occupy and that’s true, isn’t it?”
“The relationships have soured, the relationships have broken down.”
“The use clause should be general clause and not specifically to Class A2 use.”
“In their Lordships’ opinion it is necessary to start with a consideration of the power whose exercise is in question, in this case a power to issue shares. Having ascertained, on a fair view, the nature of this power, and having defined as can best be done in light of modern conditions the, or some, limits within which it may be exercised, it is then necessary for the court, if a particular exercise of it is challenged, to examine the substantial purpose for which it was exercised, and to reach a conclusion whether that purpose was proper or not. In doing so it will necessarily give credit to the bona fide opinion of the directors, if such is found to exist, and will respect their judgment as to matters of management; having done this, the ultimate conclusion has to be as to the side of a fairly broad line. “In Extrasure (supra) the Court considered it convenient to add a fourth stage to the 3-stage test postulated by Lord Wilberforce in Howard Smith, stating (at [92]) that the Court must: (1) identify the power whose exercise is in question; (2) identify the proper purpose for which that power was delegated to the directors; (3) identify the substantial purpose for which the power was in fact exercised ; and (4) decide whether that purpose was proper.”
“changed the headlease for it to be within the Act because I felt that this was the true basis of our joint venture agreement.”
“I inserted the rolling break clause because by then the relationship between Paresh and myself had deteriorated to the point that we were discussing separation. To my mind there was no realistic prospect of a reconciliation. As far as I was concerned it was inevitable that we would have to go our separate ways. I was not willing to remain in the property if Paresh acquired my family’s shares in Nexbell. I needed to be able to terminate the head lease and not be committed to remain in the building with Paresh as my effective Landlord. 99. I did not know how long it would take for us to reach a solution as regards the ending of our joint venture. It is for this reason only that I inserted the break clause. I did not believe when I was doing so that I was acting unfairly or against the interests of Nexbell Limited. There was no other motivation for the changes that I made.”
“6.1.9. Because of the longstanding friendship, and relationship of trust and confidence between Mr Ved and Mr Chohan, and because the latter was a solicitor who had previously performed legal work for Mr Ved and his businesses, Mr Ved implicitly trusted Mr Chohan. Mr Chohan accordingly owed Mr Ved fiduciary duties as a result, including in particular in relation to any legal work undertaken by Mr Chohan, via his legal business entities, in relation to the joint venture ("the JVA Fiduciary Duty");”
“The duty imposed on directors to act bona fide in the interests of the company is a subjective one (see Palmer's Company Law para 8.508). The question is not whether, viewed objectively by the court, the particular act or omission which is challenged was in fact in the interests of the company; still less is the question whether the court, had it been in the position of the director at the relevant time, might have acted differently. Rather, the question is whether the director honestly believed that his act or omission was in the interests of the company. The issue is as to the director's state of mind. No doubt, where it is clear that the act or omission under challenge resulted in substantial detriment to the company, the director will have a harder task persuading the court that he honestly believed it to be in the company's interest; but that does not detract from the subjective nature of the test. ”
“As to paragraph 18, which is denied generally, if it is alleged that any breach of duty Mr Ved as director was authorised by the unanimous agreement of the beneficial shareholders, that is denied both as a matter of fact and it is in any event denied that the JVA could itself amount to such authorisation.”
“Where it can be shown that all shareholders who have a right to attend and vote at a general meeting of the company assent to some matter which a general meeting of the company could carry into effect, that assent is as binding as a resolution in general meeting would be.”
“[40] In the first place, in my judgment if an individual who holds some shares for himself and other shares as a trustee or executor has expressed assent, he is not to be taken to have given that assent in respect of the shares held as a trustee or executor if he did not intend or purport to be making a decision in relation to those shares, at any rate if it would have been apparent to an observer that the assent was not intended to extend to the shares held as a trustee or executor. To take an example with similarities to the case before me, suppose that an individual who held one of a company's 100 issued shares beneficially and the remaining 99 as a bare trustee concluded that a director should be appointed. The requirements of the Duomatic principle should not, without more, be taken to be satisfied were it is evident that the shareholder had considered that it was for the beneficial owner of the 99 shares, and not for him, to make decisions as regards those shares. [41] Secondly, I do not accept that a shareholder's mere internal decision can of itself constitute assent for Duomatic purposes. I was not referred to any authority in which it had been decided that a mere internal decision would suffice. Further, for a mere internal decision, unaccompanied by outward manifestation or acquiescence, to be enough would, as it seems to me, give rise to unacceptable uncertainty and, potentially, provide opportunities for abuse. A company may change hands or enter into an insolvency procedure; in either event, it is desirable that past decisions should be objectively verifiable. In my judgment, there must be material from which an observer could discern or (as in the case of acquiescence) infer assent. The law applies an objective test in other contexts: for example, when determining whether a contract has been formed. An objective approach must, I think, also have a role with the Duomatic principle. ”
“A further possible qualification of the Duomatic principle is that, in some cases, doubts have been expressed as to whether the principle applies where it is the beneficial owners, rather than the registered shareholders, who consent. See, eg, Palmer's Company Law, looseleaf ed, vol 2, para 7.439. But the correct view is that, at least as here where the ultimate beneficial owner and not the registered shareholder is taking all the decisions in the relevant transactions, the Duomatic principle applies as regards the consent of (and authority given by) the ultimate beneficial owner.”
“none of the authorities which have been cited to us have convinced me that a transaction which (i) falls within the letter of the express or implied powers of a company conferred by its memorandum, and (ii) does not involve a fraud on its creditors, and (iii) is assented to by all the shareholders, will not bind a fully solvent company merely because the intention of the directors, or the shareholders, is to effect a purpose not authorised by the memorandum.”