Umer Sufwan Pervaz & Anor v Mehboob Ahmed Pervaz & Ors [2025] EWHC 3405 (Ch)

“Q. What work did you do for the partnership? A. What jobs needed to be done. My husband told me to do things. I had to do them.”

“Q. He made most of the decisions, yes. Q. When it came to the partnership business, was it Khalid who led and decided for the household? A. Yes. Q. In 2010 did Khalid and Ahmed agreed on matters for their families? A. Yes. Q. There were no partnership meetings. Presumably he told you what you needed to know? A. He told me bits of it, but not all of it. Q. Yes, you let him decide what to do? A. Yes.”

“Q. Did you see these [2008] accounts? A. No, no. I left it to my husband. Q, Is that the same for the subsequent accounts? A. Yes. ... Q. You were not involved at all in the partnership accounts, but you husband agreed things for you? A. Yes.”

“Q. Ahmed also says that it was 50-50. Until 2010 it was his, but he had to come off to get his sons on? A. Yes, I agree with that. ... Q. They never agreed that you could come on as a partner. That is what Khalid did, not what was agreed? A. Yes. Yes, I was nominated to receive part of his half. ... Q. You accepted that Ahmed resigned in 2010 to let his sons come in? A. Yes. Q. In 2010 [Ahmed] let his sons run it with Khalid and Sufwan? A. Yes. Q. Ahmed was still involved after 2010? A. Yes. The same with my husband. Q. He could put on who he liked, couldn’t he? A. Yes.”

“Q. Khalid must have discussed things with you and Sufwan? A. He didn’t discuss the business side of things.”

“10. All our animals were supplied by Andrew Atkinson Livestock of Harrogate Ltd. We did business with them for nearly 30 years. 11. We would have the animals delivered to Medina direct from our supplier in Harrogate. After, the animals were processed we would be issued handwritten invoices, we paid monies direct to Khalid. I recall that it was mainly in cash. Sometimes he would call for the money to be dropped off at his house, which I did on many an occasion. I remember this because the payments were made to him at his home late in the evening. 12. On average we slaughtered around 900 animals, and our average bill was around £6,000 per week. However, near Muslim festive days, such as Eid it would be around £20,000 per week. I know this because I would deal with the money side of the business. 13. We were with Medina for around 5 years in total until 2009. For the five years they were our only exclusive slaughterhouse. We did not use anyone else. ... 15. My brother, Shahzad was responsible for buying and production side of the business whereas I did the selling door to door. I would also load and collect the lamb and sheep from Medina. Shahzad also did the finances. 16. The charges for contract kill were around £5 per animal but varied. Lambs were cheaper whereas sheep were dearer. We did a substantial business with Medina. The First Defendant, Ahmed, has shown me Medina’s ledger record sheet which only has about 27 entries in total under our name. These are selective and do not reflect the business we did with Medina. I have obtained our activity report from Atkinsons which paint a totally different picture. We did business with them in millions. However, the amounts shown in Medina’s ledgers do not reflect the number of animals that went through their slaughterhouse. It would not be too difficult to work how much money we paid to Khalid by multiplying the number of animals delivered by £5.00 on average. 17. Khalid also did not reimburse us for the skins and ropes. Either he or Medina kept the money. It happened during all the festive periods when the kill numbers were higher than normal and Khalid promised that he would correct it but never did as he knew we were not in a position to argue. 18. As well as us there were around the same [time] others using Medina for contract kill and I recall the following businesses: i) Al Aqsa Halal ii) Mustafa Premier Halal iii) Lancashire Meats (Kham Ghalib) iv) Raffi Halal Meats v) Qamar Zaman.”

“4. At the time we did not have any premises as such, we would take prebooked orders, collect meat from the supplier and deliver direct to butcher shops. We did this daily. The business that we generated was not exclusive to us as the buyers, mostly shop keepers, would also purchase from other suppliers and nor were they bound to buy from us. We had many a competitor. Moreover, we were always fearful that drivers might leave us one day and start up on their own once they had learned the ropes. That's how easy it is to set up in wholesale side of the business. All you need is a refrigerated van. Load up the van and call on shops, door to door. 5. Between 2007 and 2009 we branched out and started buying our own animals for slaughter. We would have these killed by Medina Meat and Poultry Group on contract kill basis. We would have our animals delivered to their premises to be processed. We were charged around £4.00 up to £6.00 per animal. The prices varied according to whether it was a lamb or sheep. 6. All our business dealings were with Khalid. We would be issued handwritten invoices‏ which we paid mostly by cheque, sometimes cash I think but cannot with passage of‏ time remember whether these were open cheques but could have been. 7. I have been shown a number of invoices which appear as item 22 on the Defendants’ disclosure list. I confirm that these relate to Al Aqsa contract kill animals and we made payments in full on weekly basis to Khalid: and because of this I know that no money was due when Medina shut the contract kill business.”

“The witness statement must, if practicable, be in the intended witness’s own words and must in any event be drafted in their own language.”

"If a witness is not sufficiently fluent in English to give his or her evidence in English, the witness statement should be in the witness's own language and a translation provided. If the witness is not fluent in English but can make himself or herself understood in broken English and can understand written English, the statement need not be in his or her own words provided that these matters are indicated in the statement itself. It must however be written so as to express as accurately as possible the substance of his or her evidence."

“A trial witness statement must comply with paras 18.1 and 18.2 of Practice Direction 32, and for that purpose a witness’s own language includes any language in which the witness is sufficiently fluent to give oral evidence (including under cross-examination) if required, and is not limited to a witness’s first or native language.”

“37. In my judgment, assistance is derived from the references to the guides, and especially to the extract from the Business and Property Guide because this postdates in time the provisions of CPR 32, PD 18.1. It is significant in my judgment that the authors of the guide referred to the witness statement having to comply with paras.18.1 and 18.2 of Practice Direction 32. They could not have been taken then to have been intending to give a new meaning to paras.18.1 and 18.2, but rather to have spelled out what the meaning and effect of 18.1 and 18.2 were. 38. The reference to "for that purpose the witness's own language includes any language in which the witness is sufficiently fluent to give oral evidence (including under cross-examination if required) and is not limited to a witness's first or native language" are in my judgment words of clarification rather than gloss. Perhaps it had occurred to them that there was a need for an explanation to be set out, but in my judgment this points significantly to the correct understanding of the meaning and effect of paras.18.1 and 18.2. 39. It does seem unlikely that it was intended that a separate regime would apply in relation to the Business and Property Courts as opposed to that which would apply in other courts that were not governed by that guide. 40. This construction accords with the purpose of the relevant Practice Direction. The background to it was the concern about what would happen to witnesses who were not proficient with the English language; the problems of vocabulary and nuance that were described by the Judge at paras.8 and 9 of her judgment. That does not mean that it was intended that those who were bilingual, or those who were sufficiently fluent in English to give oral evidence including under cross-examination, should not be able to give their evidence in English. 41. Attention has been drawn to the practical problems that would arise if the Practice Direction had a meaning, the effect of which would be that where somebody's native language was a foreign language but they were sufficiently fluent in English to give evidence in English, that they would then have to prepare statements in that foreign language. 42. My attention was particularly drawn to the fact that there may be millions of people in England and Wales who are sufficiently fluent in English but have a different mother tongue or first language. There may be repercussions for access to justice, and indeed other considerations, in the event that they were required, notwithstanding their sufficiency in English, to provide a witness statement in their mother tongue. 43. All of these points simply give further force to my judgment that the intention of the provision at PD 32, para.18.1 does have the meaning referred to in the Business and Property Courts Guide; that a witness's own language includes any language in which the witness is sufficiently fluent to give oral evidence including under cross-examination if required. 44. It therefore follows that in my judgment the Judge was wrong to reach a conclusion that the language of the witness statement had to be the first language of the claimant, and that it was highly relevant that the claimant read, understood, conversed and gave instructions in English. If there were doubts about the proficiency of the claimant as to whether the claimant was sufficiently fluent, then that could have been tested with a view to considering whether the evidence should be excluded. There was no such exercise before the court.”

“6. In or about June 2016 Khalid came to collect cheques for previous invoices. He asked these to be made out in his son’s name. The cheques were in large amounts. I asked him as to why this was, he replied that Sufwan was looking to put down a deposit on a house. I then made out the cheques as asked. I remember this clearly as in my mind something was not right and I therefore decided to keep copies to cover myself. I normally would not do this as the cheque stubs are sufficient for record purposes. I can also confirm that this was the only time any cheques were made out to Sufwan. 7. When Ahmed turned up at the unit next time, I told him that Khalid had come around to collect payment but strangely he had asked for the cheques to be made out to Sufwan and I also gave Ahmed copies of the two cheques. Ahmed responded by saying as long as Khalid recorded the payment being received by Medina that would be okay. However, if Khalid disputed the money as having been paid we could produce the copy cheques. I remember it well as it was not normal to issue cheque payments to Medina as the usual method was by BACS. 8. I have been‏ shown two cheques which appear as item 66 in the Defendants’ disclosure list and I can confirm these are the same copy cheques that were made out to Sufwan Pervaz on Khalid’s request.”

“Reasons for judgment 18. … judges are not obliged to deal in their judgments with every single point that is argued, or every piece of evidence tendered. They deal with the points which matter most. Moreover, it must be borne in mind that specific findings of fact by a judge are inherently an incomplete statement of the impression which was made upon that judge by the primary evidence. Expressed findings are always surrounded by a penumbra of imprecision which may still play an important part in the judge's overall evaluation. Put shortly, judgments do not explain all aspects of a judge's reasoning, although they should express the main points, and enable the parties to see how and why the judge reached the decision given.”

“It is also important to have in mind the role of a judgment given after trial. The primary function of a first instance judge is to find facts and identify the crucial legal points and to advance reasons for deciding them in a particular way. He should give his reasons in sufficient detail to show the parties and, if need be, the Court of Appeal the principles on which he has acted and the reasons that have led him to his decision. They need not be elaborate. There is no duty on a judge, in giving his reasons, to deal with every argument presented by counsel in support of his case. His function is to reach conclusions and give reasons to support his view, not to spell out every matter as if summing up to a jury. Nor need he deal at any length with matters that are not disputed. It is sufficient if what he says shows the basis on which he has acted. These are not controversial observations: see Customs and Excise Commissioners v A [2002] EWCA Civ 1039 [2003] Fam 55; Bekoe v Broomes [2005] UKPC 39; Argos Ltd v Office of Fair Trading [2006] EWCA Civ 1318; [2006] UKCLR 1135.”

“24. The Claimant complains, however, that although the counterclaim is based on alleged errors, the First Defendant has come close to making un-pleaded, or at any rate complex and unparticularised, allegations of serious breach of duty on the part of the Claimant in seeking to establish such errors, but has not actually made any such allegations. On that basis, the court is urged to make no findings that the Claimant has been in breach of his duties, and in any event to proceed with anxious caution. 25. ... In the first place, if the First Defendant can obtain the relief he seeks without having to establish a case of wrongdoing, I see no reason why he should not do so. In the second place, the First Defendant’s case is set out in a way which makes it clear exactly to what the Claimant needs to respond. In the third place if, in the process of establishing the existence of an error, one also establishes what needs to be done to correct it and why, there is no point at all in failing to do so right away. 26. The conventional approach to an attempt to reopen accounts or to obtain permission to surcharge and falsify items within accounts is to adopt a 2-stage process. The first stage is to obtain permission to reopen them, or to give notice of the particular items to be challenged, and the second is to retake the accounts, or to correct the particular items. The first stage can often be carried out in a fairly summary way. That did not happen in the present case, when the first stage has been the subject of an extensive trial. In the present case the First Defendant invited me, effectively, to carry out the first stage and, at the same time, as much of the second stage as I found I could. Counsel for the Claimant accepted that this was the basis upon which the matter had been case managed through to trial, and the evidence had been prepared. I see nothing wrong with it in principle. The 2-stage approach may be a matter of practice, but the practice may be departed from, and the two stages may be collapsed or shortcut where convenient and just, as it is here. A similar approach was adopted, for example, in Montgomery v. Cameron & Ors [2007] Scot CS CSOH 63 (23 March 2007), and is referred to in Lindley & Banks, Partnership, 21st ed., at 23-122. This does not affect the burden of proof, which I accept remains upon the First Defendant throughout. On that basis, and by agreement, the First Defendant opened the case and called his witnesses first. 27. The Claimant also sought to argue that the First Defendant had adopted an incorrect approach, by bringing a claim that accounts should be reopened without there having been any antecedent judicial findings or admissions as to breaches of duty on the part of the Claimant, so that at the outset of the trial the First Defendant did not in fact know if there were any errors at all. If this is a different submission from those with which I have dealt in the preceding paragraphs, I do not follow it. Distinct errors were alleged and the allegations were supported by evidence, and it was upon that basis that the First Defendant sought to meet the Claimant’s case that the accounts in question were settled accounts. The trial was largely concerned with establishing whether there were such errors so that the accounts should be reopened and, if possible, corrected.”

“31. Following Khalid’s death, it has come to light that, in breach of his duty of good faith, some of the outstanding bad debts had been collected by Khalid but not accounted for to the partnership, that Khalid has used the partnership money to settle his personal credit card balances, to lend money to his family, to pay private tuition fees, the payments, dealings and transactions of Khalid’s construction of houses, that Khalid used money belonging to the partnership to pay for the construction of houses for the personal use and benefit of him and his immediate family, one being at 362 Birkby Road, Huddersfield, and two four bedroom detached houses in the grounds of 362 Birkby Road, Huddersfield and to pay £80,000 to his brother in law Pervaiz Iqbal.”

“52. As part of the accounts, the Defendants will seek directions and orders for an account as to: ... (7) the payments, dealings and transactions relating to Khalid’s construction of houses, using money belonging to the partnership, one being at 362 Birkby Road, Huddersfield, and two four bedroom detached houses in the grounds of 362 Birkby Road, Huddersfield (as referred to in section 6 of the Report), ... (11) In respect of the misapplication of Partnership money referred to above in paragraph 31 and not referred to in paragraph 52(1) to (10) above being: a. the Partnership assets or sums due to the Partnership which were misappropriated and paid to Khalid and his family for their use and benefit and including the personal expenditure, tuition fees, advances to family members (as referred to in paragraphs 8.17 to 8.24 of the Report, and paragraph 8.34 of the Supplementary Report) ...”

“Some aspects of the factual disputes can satisfactorily be resolved by reference to contemporaneous documentation. In other respects, there are gaps in the documentation that lead the court to apply the approach of the Court of Appeal in NatWest Markets Plc v Bilta (UK) Ltd [2021] EWCA Civ 680 at 51: "[51] Faced with documentary lacunae of this nature, 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."” "[51] Faced with documentary lacunae of this nature, 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."”

“All of the websites were moved over to a new webserver the email were not do to no need as they should have been downloaded by the clients.”

“He was asking how much data storage do you want. We opted for 30 days or something. After 30 days they were gone off the servers.”

“The court may be entitled to draw adverse inferences from the absence of a witness who was available to and might have been called by a party. However, the court does not usually do so, not least because there may be all sorts of reasons why a particular witness is not called and one usually cannot be confident to infer what the witness would actually have said. Further, in general it is for a party to choose which witness he wishes to call and there is no property in a witness, and in the case of a witness in the jurisdiction the opposing party can seek to compel a witness’s attendance by means of a witness summons.”

“5. PFA [of HMRC] stated that the purpose of the meeting was to discuss the way the business operated in general, the cash side of the business, the partners drawings from the business, the business recordkeeping procedures and the partners’ own personal finances. The meeting should help to move the enquiry forward. PFA added that, as mentioned earlier, the partnership accounts for year ended 31 July 2005 were being checked. Consequently PFA’s questions would be focusing on that year, rather than what was happening with the business presently. PFA asked the partners to bear this in mind during the meeting and that his questions were directed to what was happening 4 years ago. PFA appreciated that, in view of the time that had elapsed, the partners may not always find this easy but HMRC’s income tax enquiries were nearly always historical in nature.”

“11. During the year under enquiry, chickens, lamb and sheep were slaughtered. The business started to slaughter sheep and lamb in April 2004. There were 2 slaughterhouse units in operation; one dedicated to poultry and the other to sheep and lamb. These were the only slaughterhouse units in operation at the Brookswoods Industrial Estate. The business did not operate any slaughterhouses anywhere else. There were chillers/ refrigeration facilities at both units. Chickens were put into plastic baskets but, apart from that, the business did not undertake any packaging or labelling on behalf of its customers. With sheep, the whole carcass was supplied. 12. All chickens were killed on the same day they were delivered. Sheep could be slaughtered anywhere between 5 and 12 hours after delivery to Medina. Chickens had to be chilled to a temperature of minus 4 degrees for a 24 hour period prior to dispatch. Animals were slaughtered on Mondays, Wednesdays, and Fridays only. Deliveries of lamb and sheep were restricted to those slaughter days with chickens being delivered 6 days a week. Health Inspectors and vets were present each day monitoring the animals, the conditions they were kept in, and the slaughtering process, to ensure that the various regulations relating to hygiene and production were met. The partners had to ensure it complied with all the regulations. The business was completely shut on Sundays and Khalid (SKP) commented this was the only day the partners had off. PFA [of HMRC] referred to a planning application he had come across (on the website for Calderdale MBC) relating to the extension of opening hours, enabling the business to operate and also receive deliveries on a Sunday. Khalid (SKP) advised the application related to deliveries only and recalled only one person had complained about this and he had not lived very near the premises. The application had not been successful and they did not open on Sundays. 13. Most of the meat was sold to butchers or Asian food stores which always had their own butchers attached to them. About 50% of the sheep and lamb was sold to butchers in the Manchester area. 14. The description “oven ready big and small" shown on the sales invoices simply related to large and small chickens that had their heads and guts removed. 15. Contract Kill Sales - amounting to £77,501 in the year - related to customers who brought their own sheep and lamb to be slaughtered at Medina's premises. These customers would take the slaughtered sheep away and sell them on themselves, this was quite common on the red meat side of the business. 16. Skin Sales - amounting to £107,580 in the year - represented the sale of the hides of the slaughtered animals and were simply a by-product of the slaughtering process. The only customer for this in year ended 31 July 2005 was Bradford Skin and Hide. 17. The general social climate/economy could have an overall impact on demand but any specific peaks in sales would occur at Christmas or during periods of religious sacrifices, the time of the latter varying from year to year and lasting 10 days. 18. Medina’s customers were located in Bradford, Leeds, Huddersfield, Halifax, Dewsbury, Manchester and surrounding areas. There were no customers further away in other parts of the country. On the poultry side, one or 2 wholesalers collected the chickens from Medina and then distributed the chickens on themselves. Contract Kill customers collected the carcasses from Medina's premises. Most of the slaughtered animals were delivered by Medina to their customers. 19. The partners did not specifically set out to try and obtain new customers and expand the business. They were really content to deal with the customers they already knew. This was because they found that when they did take on new customers this often resulted in bad debts because they turned out to be bad payers. PFA noted that sales had increased by nearly £1M in the year to 31 July 2003 and then again by nearly £1M in the year ended 31 July 2005. The partners stated that movements in poultry prices had a significant impact on the turnover of the business. When poultry prices were low, Medina’s main customers started to look elsewhere and this affected sales. In 2004 chicken prices had collapsed and some of Medina’s main customers had just walked away to buy cheap chickens from elsewhere. Price fluctuations in the poultry market had a big impact on the business and after a quiet period caused by a fall in chicken prices it was like starting all over again. ... 27. There was no pricing policy as such and it was not possible to achieve a constant profit rate. Medina charged whatever the customers were willing to pay in the context of the overall market prices for poultry at any one time. Poultry prices moved up and down on a weekly, sometimes daily, basis. Because of the limited shelf life of the product, there was very little, if any, scope to hold out in the hope that market prices may go up so Medina could thereby achieve a better price. Medina's prices were also dictated by what other abattoirs were charging and if the other abattoirs reduced their prices then Medina had to react and adjust their prices accordingly. There were good times and bad times depending on the market price which constantly fluctuated. The numbers of chickens ordered from Sullivan’s, and the prices to be paid to Sullivan's, were fixed at the beginning of the 13 week cycle. Therefore the partners had to try and work out what they needed over that 13 weeks period but market prices could easily change within that time frame so the price Medina could charge to their customers also fell as well. If prices did fall, then they could not renegotiate a price with Sullivan’s and Sullivan’s certainly would not take the hit. It was very difficult to try and plan that far ahead. If market prices fell then Sullivan’s certainly would not take the hit. Also, if Medina did not respond to changes in the market price for poultry, then some of the big cutting plants they supplied - for example Bakesa in 2004-05 - would certainly have gone elsewhere.”

“34. The business was normally paid in cash or by cheque with very few, if any, BACs payments. The partners found it difficult to estimate what proportion of sales would be paid for in cash. The method of payment depended on the customer. For example, the large cutting plants that Medina supplied always paid by cheque. They were allowed 3 or 4 weeks credit to pay so a large cheque - up to £20,000 - may be received in one week. Consequently, in that week when a large cheque was received, a greater proportion of sales would be paid by cheque. The “good” customers, those that could be trusted, were allowed to pay by cheque as there was less chance their cheques would bounce. Other customers who were not as trusted, and smaller or irregular customers, had to pay in cash. The proportion of cash to cheque sales therefore varied week by week, depending on who was paying. But, overall, SKP thought the split between cash and cheques was approximately 50/50. 35. The business did have a safe. At the time in 2005 this was a small key operated safe hidden away in a cabinet in the office at the business premises. A couple of years ago the safe itself had actually been stolen from the office so the partners had purchased a new much larger safe which was bolted down to the floor and could not be removed so easily. Cash together with spare keys to the business vans and wagons were kept in the safe. All the partners had keys and access to the safe. No one else could get in to the safe. No one partner in particular was specifically responsible for controlling the cash side of the business. Most of the cash received was collected from the customers, usually by SKP’s nephew, but some customers did come to Medina’s premises and pay in cash at the office. ... 38. Only the partners could accept a cash payment from a customer. No employees could take cash from a customer. 39. Cash received from customers was put into the office safe straight away before being banked. During 2004-05 cash and cheques were banked 3 times a week but at the moment cash and cheques are banked every day. If there was an unusually large amount of cash received then this was banked as soon as possible. When MAP's son collected cash from a customer, he kept a note of how much had been paid by each customer in a separate folder containing each customer’s account details. This was then brought back to the office along with the cash. 40. Business cash was never taken home, it was always kept in the safe at the office. 41. The partners did not use night safe facilities. 42. PFA asked if the amount of cash on hand was ever counted by the partners and, if so, how often, and whether any attempt was made to balance and reconcile the amount of cash on hand. MAP [Ahmed] requested clarification as to exactly what PFA meant by this. PFA explained he was asking if the partners had ever counted the cash on hand and then tried to reconcile the amount counted with the cash on hand brought forward, plus cash received, less cash paid out since the last time cash was counted. In theory, the cash on hand at say week 1 plus cash received, less any cash expenditure, should equal the cash on hand as counted at say week 2. If there was a difference this meant something was wrong somewhere. MAP confirmed they had never counted and reconciled the cash position and this was why he had to ask what PFA had meant. 43. PN [the accountant] commented that the cash processes were now a lot tighter than they had been previously. 44. The amount of petty cash normally kept on hand was somewhere in between £500 and £1,000. This was kept in the safe and only the partners had access to the petty cash. The maximum amount of business cash on hand at any one time was estimated to be up to £40,000 representing 2 or 3 days cash sales. The partners considered it was possible for them to have as much as £70,000 cash on hand at some time. PFA noted the cash on hand figure as at 31 July 2004 was nearly £74,000. Paul Davison (PD) [the accountant] pointed out this would include both cheques and cash. 45. The partners confirmed that during the enquiry period cash was banked, along with cheques, 3 times a week. Banking was undertaken by MAP's son and wife. Apart from the petty cash, all cash received was banked.”

“76. In 2004-05, customers were usually allowed, on average, 21 days to make payment. Originally, customers were supposed to have paid on a week by week basis but bad payers had stretched the amount of time taken for customers to settle their bills. The partners tried to recover outstanding monies by making personal calls to the customers. Over the years, the partners had tried from time to time using debt collection agencies but this had not really worked. Legal proceedings had never been used to try and recover outstanding debts. With their regular customers they preferred to trust them to eventually pay the outstanding amount. On looking at the sales invoices SKP commented regarding one for Umar Halal Butchers that showed an outstanding balance of £11,345 with no payments received. This invoice was dated 16 October 2004 and SKP said that Umar’s balance was now over £40,000. Outstanding amounts were only written off as bad debts as a last resort. Each year the accountants discussed the debtor's position with the partners and identified those where payments would not be forthcoming. The increase in year ended 31 July 2005 was probably due to removing some debts which had been on the system for a long time. 77. PFA explained that during the enquiry it had emerged the amounts included in the accounts as trade debtors were substantially wrong. PFA understood that the customers in question had in fact paid in cash so they did not owe the amounts as shown in the business' Sage records. The total amounts incorrectly treated as trade debtors were £66,870 in year ended 31 July 2005 and £26,139 in year ended 31 July 2006. PFA understood this related mainly to cash on delivery transactions. 78. PFA asked if the partners could offer any explanation as to how this had come about. The partners had no idea how this had happened and as far as they were concerned they had given all the necessary information to the bookkeeper and he was supposed to deal with it. The error had not been discovered by the new bookkeeper but had been advised to Peel Walker by the previous bookkeeper, Steve Scotland-Judd. The computer disk for the 2006 accounts had been accompanied by a brief note from Scotland-Judd stating that the trade debtors had been overstated. Scotland-Judd had sent Peel Walker a printout of the aged debtor’s analysis (at 31 July 2005) and highlighted those debtors who had paid in cash. This was in November 2007. Peel Walker had made the necessary adjustment in one total in the 2006 accounts. It was only during the enquiry, when PFA had asked for some more information about the debtors, they had come to realise that some of the debts identified by Scotland-Judd must relate to 2006. This was because the invoices concerned had only been issued after 31 July 2005 and could not therefore be debtors at that time. Beyond the note from Scotland-Judd, Peel Walker had no further information about this. This was the way Scotland-Judd had communicated with Peel Walker. The partners reiterated this was all down to the bookkeeper. There was no further information that the partners or Peel Walker could provide about the debtor’s error. 79. PFA thought the essential point was that the trade debtor's figures were substantially incorrect and this showed again that the control of cash in the business was very poor, placing question marks over the reliability of all the figures in the accounts. A large amount of cash was coming into the business that was not effectively recorded. The additional cash received had been regarded by Peel Walker as increasing the amount of each partner’s drawings and correspondingly reducing debtors. If this was so then, not only was cash coming in without being properly recorded, but the partners were also taking cash out as and when required without being recorded. 80. PFA thought there were 2 possibilities regarding the cash received from debtors. Firstly, the cash could have been taken out by the partners as additional drawings. Secondly, the cash could have been used to purchase stock for slaughter with both the purchase and sale of the stock going unrecorded. 81. SKP stated this was simply not possible and they did not consider buying and selling off record stuff in the way PFA suggested. Everything that came into the business and everything that was sold was fully recorded. The business had certainly not omitted any sales and they had been relying on their bookkeeper to whom they had given absolutely everything. The partners could only tell PFA what they knew about. SKP pointed out that everything that went through the slaughterhouse was heavily monitored and regulated and the health/hygiene people would have their own records detailing what had gone through the slaughterhouse in terms of weight. All animal purchases were recorded by weight and all the sales invoices showed the weights sold. SKP was sure they could compare the health/ hygiene office records with their own records to show that they had not made off-record purchases when compared to the health/hygiene records. The weights in the health/hygiene records would match the weights in their own records. PFA doubted there would be any realistic prospect of making such a comparison and it would not be possible to tie up the 2 sets of records. PN also unsure as to how this could be done. SKP was nevertheless convinced that if necessary they could show, by using the meat/hygiene records, that the business had not made off-record purchases as suggested by PFA.”

“102. PFA explained he now needed to continue to discuss each of the partner's own personal finances and spending. PFA pointed out the partners’ respective personal finances were confidential to each partner and he wanted to make sure both partners were perfectly happy to discuss their own finances fully and openly in front of each other. If necessary, separate meetings could be held. The partners confirmed they had no problem discussing their personal finances in front of each other.”

“146. PFA asked whether SKP owned or had an interest in any other land or property, apart from his house at 362 Birkby Road and the let property which had been discussed earlier with Ahmed. SKP stated there was some land at Turley (?) Court Farm that he had purchased in 1990. This had originally been bought with the intention of using it for the business right at the very beginning. The title deeds were in SKP's name only. SKP was holding onto the land in the hope that he would obtain planning permission. There was approximately 3 acres of land that was now derelict. Originally, it was used for chicken sheds in the very early days of the business.”

“Salaam After a lifetime of giving you respect I was expecting a better response from you than an email full of false accusations and aspersions. AND Mr Ahmed But seeing as you are not the man or brother I thought you was so in response to your accusations which I assume you mean misappropriation of funds. Any shortfall of money is clearly evident in yearend accounting. AND THERE HAS BEEN NON contrary there has always been overfunding to the accounts so your accusations are unwarranted unproved and petty at best. The only time there was a consistent shortfall of money year after year was when your wife was doing the banking. Every year 70 to 80 k was missing money in not made it to the bank? There was no cash payments made without invoice and all employees were on the books every year invoices were created for hens and David Sykes to cover this short fall you are fully aware of this. And when the banking was taken away from her the shortfalls suddenly stopped and yet you know this over 350k was taken by your wife in a 5 year period more from previous years so don't point your finger at me. I am talking facts IT WAS ONLY AFTER I TOOK OVER THE BANKING THAT THIS COMPANY STARTED MAKING A PROFIT. WHY?????????? Nobody has worked harder than me to make this company 30 years I have put into it Kasim 13 years Hashim 10 years. all you have done is draw money to fund your life and building projects to the point the company was on the verge of bankruptcy when year on year your drawings was exceeding profits and the bank stepped in to stop it and yet you don't see this. As for your accusation of company's going TITS UP I presume you are referring to VIP as previously discussed with you I left that company to concentrate on medina. VIP was a company that was making me good money a sacrifice that you do not APPRECIATE. I realise now that was a big mistake. It did not go tits up that is wishful thinking on your part. I brought this situation to your attention over 18 months ago when there was complete breakdown of control of funds. all money being spent by your family i.e. credit cards, cash taken from business and cheques being issued to for personal use and you have not resolved the cash exiting the business for your family instead it is worse. I no longer wish to continue in this current situation As you said at the time "YOU WALK AWAY OR I WALK AWAY" I REQUIRE A RESOLOTION TO THIS MATTER ASAP AS WE CAN NO LONGER WORK TOGETHER WASSAAALM”

“Dear ahmed .since you think I am a thief and no respect for me .and if you think me and my family is burden to you. it is not worth making things worse by carrying on with this partnership you have no respect for your father and his legacy what I spent on billal,s house was to keep mother happy at any cost which you also you got credit till you said it your self he is not entitled to it and kept saying to mother point one he was your brother plus he is looking after your mother plus if you can not understand that we have nothing more to say my advice to you do not make mother unhappy you will regret it for rest of your life .or are you past caring you going to haj and your heart is hard even to mother .seeing mother with loving eyes is equal to accepted haj. spending money to go to haj when mother is not happy .is wasted money and yes you know all this I do not understand what is happening to you I will pray for you your loving blood brother.khalid.” 20.00 “Dear ahmed. Regarding your sons how many years I spent training kasom and hashim .how many times I got bolloking of mother I am always swearing at them they are hard working and of the streets which I got no thanks .you were too busy with wives regarding Hamza since he started when ever I asked him to do some thing he all ways too busy and was doing some thing else .all ways got answer for every thing .thats why I do try to say anything to him he has all ways got a bullshit answer ready what you sow you reap. I know things you do not understand that's why I told you every thing so you could take over after my death madrasa charity work so you will cope with it .like my father told me every thing and I tried to educate you the same way why have you taken the wrong path every thing I said to you .you took it the wrong way you have broken my heart in the past years but I never gave up on you .kept on trying and ignoring things you did i am lost ahmed .i want the family together if you are not going to make the effort that's up to you I have done my best.” 20.38: “Dear ahmed. Regarding the purchase of the car I told you the 20 k I am putting in cash from Pervez funds .and told you I will take it out when there is profit if you remember our earlier conversation we decided when we got funds we will share the profit between us 2 .since you are in such a rage you took it the wrong way again may be i should have said I will take it out when we share the profits not on top like I said this is personnel expender and is nothing to do with factory cost I hope this clears this matter .the reason I want to put threw books is we can use spent as payments for car and receive depreciation or chq later to put in barcleys .you need to understand I am all ways planning ahead. please make your mother happy I am with you but do not do this to her and make our enemy happy and them laughing at us.”

“Whilst Sufwan was also employed in the business, he knows little about its financial details. It was pretty much a cash business which cash is unlikely to ha[v]e gone through the books and accounts [as] featured in the end of the year accounts.”

“Equally where an account has been settled up to the date of dissolution it does not mean that the partners have foregone their right to have full dissolution accounts taken thereafter, without reopening the settled account. The corollary is that it cannot be assumed that an amount shown as due to a partner in a settled account is necessarily payable to that partner since it may be affected by subsequent accounts which have not yet been taken.” 53. In applying that general approach to the effect of settled accounts the particular circumstances of this case must be borne in mind. If the Farm was not in reality a partnership asset then as between the Claimant and the First Defendant it cannot be appropriate for the final accounting on the dissolution of the partnership between them to be on the basis that it was an asset of the partnership. Neither the Claimant nor the First Defendant is the legal or beneficial owner of The Farm nor does either have any interest in it unless it is held by the Second Defendant for the partnership. In those circumstances neither of them could require the accounting by the other to proceed on the basis that the partnership has an asset which it does not have.” “Equally where an account has been settled up to the date of dissolution it does not mean that the partners have foregone their right to have full dissolution accounts taken thereafter, without reopening the settled account. The corollary is that it cannot be assumed that an amount shown as due to a partner in a settled account is necessarily payable to that partner since it may be affected by subsequent accounts which have not yet been taken.”

“Though Mr Ward and Mr Eid made their wives sleeping partners, there was no formal partnership deed entered into between them. Given the informality of the arrangements, this is not surprising. But given that informality, it is quite clear that the arrangements between the husbands and wives existed from year to year, and were terminable at will. Mr Ward and Mr Eid together controlled all of the five companies that were passing on the management fees, the partnership depended on them totally and consequently they could at any time have terminated any arrangements. In practice they could have apportioned to themselves whatever percentage of the profits they thought fit, and obviously the arrangements made with the revenue would not affect that in any way. The husbands would simply declare the change when it happened.”

“At the end of the day right, no when your dad was here, he was the highest position, he was my big brother, but we were equal partners.”

“At the end of the day right, no when your dad was here, he was the highest position, he was my big brother, but we were equal partners.”

“However, the mere fact that items are treated in an improper way, or are improperly omitted, is not in itself sufficient to induce the court to reopen a settled account; if the partners knew about those items and no fraud or undue influence can be proved, it will be inferred that they were dealt with in an agreed manner.”

“25. It is right to say that no cause of action other than the right to an account and the existence of errors sufficient to justify at least obtaining permission to surcharge and falsify specific items in the settled accounts has been pleaded. Moreover, it is right to say that the First Defendant seeks such specific findings as the court feels able to make at this stage as to what corrections should be made to the accounts, and in particular seeks corrections to be made on the footing that certain sums have been applied to the benefit of the Claimant when either they have not been accounted for, or have been accounted for on the footing that the benefit was not exclusively that of the Claimant. Since, on the facts, the Claimant is alleged to have been the person in control both of the money and of the partnership records, and the preparation of the accounts, it is easy to see that claims might have been (but have not been) formulated on the footing of wrongdoing on the part of the Claimant, and that in the process of making findings which might support the making of corrections to the accounts, the court might make findings of wrongdoing, or of facts which implied wrongdoing, on the part of the Claimant. While this may be uncomfortable for the Claimant, I do not see that it creates a problem with the First Defendant's case. In the first place, if the First Defendant can obtain the relief he seeks without having to establish a case of wrongdoing, I see no reason why he should not do so. In the second place, the First Defendant's case is set out in a way which makes it clear exactly to what the Claimant needs to respond. In the third place if, in the process of establishing the existence of an error, one also establishes what needs to be done to correct it and why, there is no point at all in failing to do so right away.”

“5.1. I attach at Appendix H1 hereto, a schedule of the total amount of bad debts shown in the profit and loss accounts of the Partnership, Medina Meat and Poultry Group, for the years ended 31 July 2002 to 2015 and for the period ended 7 July 2016, the latter being as per the accounts prepared by Sheards, Chartered Accountants. 5.2 In the absence of the Sage nominal ledgers of the Partnership for the years prior to that ended on 31 July 2013, I have not been able to ascertain the composition of the bad debts written off in the Partnership accounts for the years up to and including that ended on 31 July 2012. 5.3 Whilst a review of the Sage audit trail shows the amounts of various bad debts written off between 1 August 2001 and 31 July 2012, I have not been able to reconcile these to the total amounts as shown in the Partnership profit and loss accounts (Appendix H1) for the years ended 31 July 2002 to 2012. 5.4 I attach at Appendix H2 hereto, extracts from the Sage audit trail showing bad debt write offs, or what in my opinion appear to be bad debt write offs, between 1 August 2001 and 1 August 2012. I have highlighted the relevant entries in orange thereon. With regard thereto the write offs on 1 August 2012 would appear to relate to the year ended 31 July 2012. On reviewing these bad debt write offs I note the following: - On 1 August 2011 there is a bad debt of £14,483.70 in respect of account PREM01. This relates to Premier Halal Meats Ltd (see paragraph 4.7 above). - On 1 August 2011 there are bad debts of £16,853.48 in respect of account IQ0002 and £32,499.19 in respect of account IQ0003. These accounts relate to I Q Halal Meats and I Q Halal Contract Killing respectively. I have referred to I Q Halal at paragraphs 4.19 to 4.29 above in the context of possible unrecorded sales invoices. - Whilst in my opinion there are a large number of other bad debt write offs, I list below the most significant of these, being amounts in excess of £10,000.00: Date Account No. Customer Amount £ 31.07.2002 BASH01 B A Poultry Supplies 17,918,98 31.07.2002 ISLA01 Talamabad Poultry 25,591.78 31.07.2006 CHAU01 Chaudry Bros 22,705.02 31.07.2006 MUSL01 Muslim Butchers 13,026.97 31.07.2006 SHAU01 Eastern Foods 22,434.42 01.08.2006 DADI01 Dadipatel Poultry 18,625.76 01.08.2006 MUGH01 Mughal 14,260.99 01.08.2006 MUGH02 Mughal Manchester 13,185.15 01.08.2006 NAFE01 Nafez Superstore 10,953.66 01.08.2008 EUR02 Euro Halal Meat Poultry Ltd 12,813.91 01.08.2008 MALI01 Malik Poultry 31,728.97 01.08.2011 BILA001 Bilal Poultry Products 50,765.54 01.08.2011 QUAL11 Paak Poultry Products 13,286.54 01.08.2012 JAMI01 Pakeezah Superstore 123,932.00 £391,229.69 5.6 With regard to the bad debts written off per the Partnership’s profit and loss account for the year ended 31 July 2013 of £371,094 (Appendix H1), I attach at Appendix H3, a copy of the Sage nominal ledger bad debt provisions account for the year ended 31 July 2014 which would appear to support this figure in the form of the opening balances brought forward. Although the amount of £371,294.14 per the nominal ledger at Appendix H3 is £200 more than that shown in the profit and loss account for the year ended 31 July 2013 I am not aware of the reason for the difference. 5.7 Based on the figures at Appendix H3, I note that in the year ended 31 July 2013, two significant amounts were written off, namely £309,196.35 in respect of account LANC01 – Lancashire Poultry and £44,555.37 in respect of account UMAR01 – Umar Halal Meat Butchers. 5.8 With regard to the bad debts written off per the Partnership’s profit and loss account for the year ended 31 July 2014 of £77,169 (Appendix H1), I attach at Appendix H4, a copy of the Sage nominal ledger bad debt provisions account for the year ended 31 July 2015 which would appear to support this figure in the form of the opening balance brought forward. Furthermore, the debits posted to this nominal ledger account (Appendix H4) amount to £78,418.39 and excluding the opening balance, the credits amount to £1,249.01, resulting in a net amount of £77,169.38, and would therefore appear to represent the composition of this amount. 5.9 Based on the figures at Appendix H4, I note that in the year ended 31 July 2014, there were two significant amounts written off, namely £24,398.79 in respect of account KHAW01 – Khawaja Food Store and £31,023.68 in respect of account YASI01 – Noshi Food Store. 5.10 With regard to the year ended 31 July 2015, the profit and loss account includes an amount of £64,975 in respect of bad debts (Appendix H1) but I have not seen any details as to the make up of this amount as between individual customers. This would possibly appear to be in the nature of a provision made for bad debts as I note that this amount has been carried forward to the final accounting period ended 7 July 2016. 5.11 The profit and loss account of the accounts prepared by Sheards Chartered Accountants in respect of the period ended 7 July 2016 includes a figure for bad debts of £409,360.00 (Appendix H1). This amount comprises of bad debts written off of £328,204.55 in the period plus a general bad debt provision of £146,130.00 as at 7 July 2016 less the provision of £64,975.00 brought forward from the year ended 31 July 2015 (paragraph 5.10 above). With regard to the amounts written off amounting to £328,204.55 details as to which customers this relates to are per the Sage nominal ledger accounts 1101 and 8100 in respect of the period ended 7 July 2016, copies of which I attach at Appendices H5 hereto. 5.12 In connection with the preparation of the cessation accounts of the Partnership as at 7 July 2016, I have been provided with a further schedule in respect of debtors as at 7 July 2016 showing details of the aforementioned bad debts written off of £328,204.55, and a copy of this is attached at Appendix R3 hereto. The amount of £328,204.55 is the total of the second column of figures shown on the schedule headed ‘Bad Debt Woff’ amounting to £474,334.55 less the general provision of £146,130.00. 5.13 With regard to the balance of the amounts owed to the Partnership as at 7 July 2016 amounting to £730,649.11 (Appendix R3) I understand that these were to be collected by Medina Group Limited. The schedule at Appendix R3 shows amounts recovered by Medina Group Limited, amounting to £483,917.13. This would leave amounts not recovered by them of £246,731.98 (£730,649.11 - £483,917.13). The schedule at Appendix R3 however shows bad debts written off in Medina Group Limited of £278,846.37, which is £32,114.39 more (£278,846.37 - £246,731.98). In the circumstances I assume that this difference of £32,114.39 represents the write off of additional debts incurred as a result of sales made by Medina Group Limited following the cessation of the Partnership. 5.14 With regard to the amounts written off in the period ended 7 July 2016 amounting to £328,204.55 (paragraphs 5.11 and 5.12 above), whilst there is a large number of individual write offs, the most significant of these, being amounts in excess of £10,000, are as follows: Account No. Customer Amount £ ALHA02 Al-Haq 26,576.54 ALNA02 Al Nafaj Halal Meat 11,823.43 BEES01 Beeston Halal Meat 15,601.79 DADI02 Dadipatel 12,829.45 IMRA01 Imran Ali 10,729.83 SHAM01 Sham-Ul-Haq 47,826.28 SIFK01 Sifko Ltd 62,655.36 £188,042.68 5.15 The aforementioned amounts totalling £188,042.68 represent 57% of the write-offs of £328,204.55 (£188,042.68 x 100/£328,204.55). 5.16 With regard to the amounts not recovered by Medina Group Limited totalling £246,731.98 (paragraph 5.13 above), the following amounts in excess of £10,000 are also noted: Account Customer Total Partnership Company No. Amount Debt W/off Debt W/off £ £ £ AZEA02 Azeam Grocery Account Customer Total Partnership Company No. Amount Debt W/off Debt W/off & Halal Meat 14,951.27 14,951.27 - 438. EAST01 Eastern Foods 439. Leeds Ltd 15,882.75 15,882.75 - 440. KHAW02 Khawaja 37,784.04 37,784.04 - 441. Poultry 442. PAKE01 Pakeezah 443. Superstore 34,887.19 30,507.05 4,380.14 444. PAKS01 Pak Scotland 31,276.21 31,276.21 - 445. PREM02 Premium Poultry 28,604.24 28,604.24 - 446. RBHA R B Halal Poultry 15,637.10 15,637.10 - 447. £179,022.80 £174,642.66 £4,380.14 5.17. The aforementioned amounts of Partnership’s debts written off of £174,642.66 represent 71% of the Partnership debts not recovered by Medina of £246,731.98 (£174,642.66 x 100/£246,731.98). 5.18. Included in the bad debts not recovered by Medina Group Limited per paragraph 5.16 above, is an amount of £28,604.24 in respect of Premium Poultry. As per paragraph 8.33 below I understand that this is Premium Poultry Products Ltd, a company of the 1st Defendant, Mehboob Ahmed Pervaz. 5.19. With regard to the partnership debtors as at 7 July 2016 which total £1,058,853.66 (Appendix R3), the amounts written off total £574,936.53 (£328,204.55 (paragraphs 5.11 and 5.12) + £246,731.98 (paragraph 5.13)). These write offs therefore represent 54% of the debtors as at 7 July 2016 (£574,936,53 x 100/£1,058,853,66). 5.20. In view of the number of bad debts, in my opinion it is unlikely that these are all genuine bad debts. In view of the allegations made by the Defendants about monies having been received by both Khalid and Sufwan and not being accounted for to the Partnership it is in my opinion likely that some or possibly the majority of these were paid in full or in part, but the receipt has not been reflected in the Sage accounting records. This would in my opinion appear likely particularly as I understand many customers paid in cash. 5.21. On querying the position with the Defendants via their solicitor I have been advised as follows: ‘There are customers who have not paid and some customers have stated that they have paid direct to Sufwan which hasn’t been received by either the partnership or Medina Group Ltd and therefore not accounted in the records for Medina Group Ltd. Some have previously been collected by Khalid in his lifetime. Sufwan made a point of going to all the customers and claiming that all the balances were due to him and not the new limited company and that they should refuse to pay. Some customers did pay Medina Group Ltd and some refused as the money was not payable to the new company and we could not enforce the debt. We can only account for monies received by Medina Group Ltd. We were promised that the debt carried forward would be paid by some customers whilst we continued to trade with them but in reality this never got paid and was later put to bad debts.’ 5.22. In view of my comments above and the points made by the Defendants it is not possible to identify which of the bad debts are genuine bad debts from those where the customer has paid but the receipt has not been recorded. In addition, I have not been able to check the amounts received post 7 July 2016 in the absence of any detailed records of receipts and amounts paid into the bank accounts of the Partnership and Medina Group Limited. 5.23. In my opinion it would appear likely that many, if not nearly all the bad debts written off, particularly in the period ended 7 July 2016, are not genuine bad debts. In this respect these have potentially been paid but the amounts received have not been accounted for and not recorded in the computerized Sage accounting records. 5.24. Unfortunately, there would not appear to be any records available which would enable me to check whether amounts have been received, but not recorded on the Sage computerised system. Whilst I note that the sales invoices issued would appear to include a note of amounts paid, I assume that if these are computer generated they will only show the amounts actually entered on the system. 5.25. In my opinion in order to ascertain the amount of cash that may have been received, but not accounted for it would assist if the parties could identify which of the bad debts written off are genuine bad debts, due to the customer being bankrupt, insolvent or otherwise not being able to pay. Having eliminated these customers the remainder would potentially represent customers who have paid but the amounts received from them have not been recorded.”

“5.7 As I have noted at paragraph 3.69 above, the cash and cheques received and paid into the Barclays Bank account may, in my opinion, in part relate to recorded sales made by the Partnership, but written off as bad debts, as the amounts received were not recorded in the accounting records. In addition, it is possible that in part they relate to sales made, including ‘contract kill’, where neither the sale or the amounts received have been recorded in the accounting records.”

“If monies in respect of sales made have been collected by Khalid and subsequently by Sufwan, but they have not been accounted for to the Partnership, then assuming that such sales have been invoiced, the amounts outstanding as shown in the sales ledger from the relevant customers who have paid Khalid and/or Sufwan will be overstated. I assume that such outstanding balances will then have been written off as bad debts in the profit and loss accounts, hence reducing the profits of the Partnership for allocation to the partners. If such monies collected were to be accounted for to the Partnership, then bad debts would be less and profits for allocation to the partners higher, thus increasing the balances on their capital accounts. Any monies collected and accounted for, if retained, would effectively be additional drawings of Khalid and/or Sufwan and would therefore reduce the balances on their capital accounts.”

“Trade Debtors 76. In 2004-05, customers were usually allowed, on average, 21 days to make payment. Originally, customers were supposed to have paid on a week by week basis but bad payers had stretched the amount of time taken for customers to settle their bills. The partners tried to recover outstanding monies by making personal calls to the customers. Over the years, the partners had tried from time to time using debt collection agencies but this had not really worked. Legal proceedings had never been used to try and recover outstanding debts. With their regular customers they preferred to trust them to eventually pay the outstanding amount. On looking at the sales invoices SKP commented regarding one for Umar Halal Butchers that showed an outstanding balance of £11,345 with no payments received. This invoice was dated 16 October 2004 and SKP said that Umar’s balance was now over £40,000. Outstanding amounts were only written off as bad debts as a last resort. Each year the accountants discussed the debtor's position with the partners and identified those where payments would not be forthcoming. The increase in year ended 31 July 2005 was probably due to removing some debts which had been on the system for a long time. 77. PFA explained that during the enquiry it had emerged the amounts included in the accounts as trade debtors were substantially wrong. PFA understood that the customers in question had in fact paid in cash so they did not owe the amounts as shown in the business' Sage records. The total amounts incorrectly treated as trade debtors were £66,870 in year ended 31 July 2005 and £26,139 in year ended 31 July 2006. PFA understood this related mainly to cash on delivery transactions. ... 79. PFA thought the essential point was that the trade debtor's figures were substantially incorrect and this showed again that the control of cash in the business was very poor, placing question marks over the reliability of all the figures in the accounts. A large amount of cash was coming into the business that was not effectively recorded. The additional cash received had been regarded by Peel Walker as increasing the amount of each partner’s drawings and correspondingly reducing debtors. If this was so then, not only was cash coming in without being properly recorded, but the partners were also taking cash out as and when required without being recorded. 80. PFA thought there were 2 possibilities regarding the cash received from debtors. Firstly, the cash could have been taken out by the partners as additional drawings. Secondly, the cash could have been used to purchase stock for slaughter with both the purchase and sale of the stock going unrecorded.”

“3.1 I have been provided with a copy of a Commercial Lease Agreement dated 17 July 2009 between Medina Poultry (the “Landlord”) and Premier Hallal Meats Ltd (the “Tenant”). It would appear that in the agreement ‘Halal’ has been misspelt as ‘Hallal’ and therefore I assume the correct name of the tenant is Premier Halal Meats Ltd. A copy of this Commercial Lease Agreement is attached at Appendix F1 hereto. 3.2 The lease relates to commercial premises at Unit 2, Brookwoods Industrial Estate, Holywell Green, Halifax. The lease was for a period of three years commencing on 17 July 2009 at an initial rent of £2,000 per week (the “Base Rent”). The rent was subject to annual reviews. 3.3 Whilst there is no reference to VAT in the lease agreement, I note from the documentation provided that Medina Poultry had opted to tax the property for VAT purposes. 3.4 I have been provided with a schedule purporting to show the rents received under the lease (Appendix F2 hereto). I understand that this schedule was prepared by or on behalf of the Defendants, but I have not seen the source information from which it was prepared. 3.5 With regard to this schedule the rent for the first year is shown at £2,000 per week as per the lease agreement (Appendix F1) to which standard rate VAT has been added at the appropriate rate at the time it was received. Thereafter the rent would appear to have increased to £2,900 per week inclusive of VAT. I however note from the schedule at Appendix F2 that when the standard rate of VAT increased from 17.5% to 20% the amount received remained at £2,900 per week and was not increased to reflect the higher rate of VAT. 3.6 It is noted that there are only 146 weeks rent included on the schedule provided (Appendix F2), whereas there should be 156 weeks had the full three years rent been paid. In this respect I am advised that the tenant left the building on or around 7 May 2012, the date of the reading on the final electricity bill rendered to them. 3.7 With regard to the property leased, this forms part of the freehold property with Land Registry Title Number WYK380090, known as Medina Poultry, Brookwoods Industrial Estate, Burrwood Way, Holywell Green, Halifax HX4 9BH. 3.8 The Land Registry shows that the freehold title to this property was on 12 October 1992 registered in the names of Shazada Khalid Pervaz and Mehboob Ahmed Pervaz (Appendix J2). 3.9 This property was shown as an addition to the partnership assets in the accounts of S S, S K & M A Pervaz T/A Medina Poultry for the year ended 31 May 1993 at a cost of £215,000. 3.10 On 31 May 1999, when the trade of the partnership was transferred to the limited company, Medina Poultry (Halifax) Limited (paragraph 2.4 above) the property was not transferred and remained in the ownership of Shazada Khalid Pervaz and Mehboob Ahmed Pervaz. 3.11 Following the transfer of the trade from Medina Poultry (Halifax) Limited to the new partnership on 31 July 2001 (paragraph 2.7 above) the property would appear to have been introduced into the Partnership by Khalid and Ahmed Pervaz. 3.12 From the information provided it would appear that there were two main buildings on the land, known as units 2 and 4. 3.13 On the basis that the property had been leased for three years from 17 July 2009, I would expect there to be shown rent received therefrom in the accounts of the Partnership for the years ended 31 July 2009, 2010, 2011 and 2012. I note however that there is no separate amount shown in the accounts for those years in respect of rent received. 3.14 Without the availability of the full accounting records, and in particular the full computerised Sage records for those years, I have had to refer to the Sage audit trail provided which covers the period from 1 August 2001 to the cessation of the Partnership in 2016. 3.15 On reviewing the Sage audit trail, I note that 28 sales invoices appear to have been raised by the Partnership to Premier Halal Meats Ltd between 3 August 2009 and 8 February 2010. These represent 28 weeks rent being 22 weeks at £2,800 (Net £2,500, VAT £300) totalling £61,600 (Net £55,000, VAT £6,600) and 6 weeks at £2,850 (Net £2,500, VAT £350) totalling £17,100 (Net £15,000, VAT £2,100). As a result, in total, invoices were raised amounting to £78,700 (£61,600 + £17,100) the net amount of which was £70,000 (£55,000 + £15,000) and VAT £8,700 (£6,600 = £2,100) (see extracts from Sage audit trail at Appendix F3 hereto on which I have highlighted the relevant entries in orange). 3.16 I however note that credit notes were subsequently raised by the Partnership effectively cancelling certain of these invoices. These credit notes totalled £28,300 (Net £25,000, VAT £3,300) (see extracts from Sage audit trail at Appendix F3 on which I have highlighted the relevant entries in green). 3.17 Deducting the credit notes from the invoices leaves £50,400 invoiced (Net £45,000, VAT £5,400). This equates to 18 weeks rent at £2,800 per week. Whilst the net amount of £45,000 appears to have been initially credited in the Sage records as income of the Partnership (Sage nominal ledger account No. 4500), it was then transferred and credited to the drawings account of Khalid Pervaz (Sage nominal ledger account No.8710). The narrative in respect thereof was ‘Reverse rental – Private Income’ (see extract from Sage audit trail at Appendix F4 hereto on which I have highlighted the relevant entries in blue). As far as I can ascertain from the limited accounting records available to me no adjustment was made in respect of the VAT of £5,400. 3.18 I note that the amounts invoiced per paragraph 3.15 above are £500 per week more than the amounts shown on the schedule of rents received at Appendix F2 hereto. The Sage audit trail shows the weekly invoice total as £2,800/£2,850 whereas the schedule at Appendix F2 shows only £2,300/£2,350. It would appear that this difference comprises of a weekly charge of £500 to cover rates and insurance. 3.19 In addition to the invoices raised, the Sage audit trail shows 18 receipts from Premier Halal Meats Ltd of £2,800 each although 10 of these appear to have been subsequently deleted (see extracts from Sage Audit trail at Appendix F3 hereto on which I have highlighted the relevant entries in blue). As a result, there are only 8 receipts of £2,800 each recorded totalling £22,400 against the recorded invoices totalling £50,400 (paragraph 3.17 above). In the circumstances there would appear to be unpaid invoices of £28,000 (£50,400 - £22,400). 3.20 I have also looked at the Partnership bank account statements at around the time the above-mentioned invoices in respect of rent were raised. 3.21 With regard to National Westminster Bank account No, 00876186, I have identified, net of represented cheques, 8 amounts paid into the account of £2,800 each between 27 August 2009 and 25 November 2009, all of which I assume were from Premier Halal Meats Ltd. This therefore agrees with the 8 receipts referred to at paragraph 3.19 above. Whilst the aforementioned amounts of £2,800 are shown as separate receipts on the bank statements, it is possible that further amounts were paid into this account and included as part of larger amounts banked. However, without details showing the composition of the amounts banked it is not possible to ascertain whether or not this is the case. 3.22 I have also looked at the bank statements for the former number 2 account of the Partnership, National Westminster Bank account No. 24128376. With regard thereto I note that between 23 December 2009 and 10 January 2011 there are net of represented cheques, 4 receipts of £2,850 each and 32 receipts of £2,900 each shown thereon. These total £104,200 (4 x £2,850 + 32 x £2,900). Once again it is possible that further amounts were paid into this account and included as part of larger amounts banked but without details showing the composition of the amounts banked it is not possible to ascertain whether or not this is the case. 3.23 I have not been able to locate the recording of these receipts into the number 2 bank account on the Sage audit trail of the Partnership. It is possible that amounts equivalent thereto were drawn in cash, which were also not recorded in the Sage records and effectively cancel the aforementioned amounts paid into the number 2 bank account. 3.24 Whilst this may be the case it would appear that the number 2 bank account may possibly not have initially featured in the Partnership accounts and accounting records at all. In this respect the bank statements for this account show that £153,188.03 was held in it at 31 July 2010 (Appendix F5) but this balance does not appear to be included on the Partnership balance sheet at that date. Furthermore, I note that on 11 January 2011, an amount of £215,578.76, which represented the majority of the funds held in the number 2 bank account at that date were transferred into the main Partnership bank account with National Westminster Bank, account No, 00876186 (see copy bank statements for the two accounts at Appendix F6 hereto). The Sage audit trail classifies the amount of £215,578.76 as a bank receipt (BR) and describes it as a transfer from Khalid (see extract from Sage audit trail at Appendix F7 hereto on which I have highlighted in blue this entry). I have not however been able to ascertain how the other side of this transaction has been reflected in the Partnership accounts and accounting records. 3.25 With regard to the rent paid I have been provided with a copy of a letter from Ghulam Mustafa Zaman, who was a director of Premier Halal Meats Ltd (copy attached at Appendix F8 hereto), confirming payment of the rent under the lease (Appendix F1). In this letter he states that he paid Mr Khalid Pervaz the rent in cash and if cash was not available he was paid by an open cheque. 3.26 An online search of Companies House records reveals that there have been two companies with the name Premier Halal Meats Ltd. The first was incorporated on 19 June 2008 with Company Number 06624083 and was dissolved on 5 October 2010. The second was incorporated on 5 October 2010 with Company Number 07396325 and was dissolved on 17 March 2020. Ghulam Mustafa Zaman is recorded as having been a director of both these companies. I also note from Companies House records that neither company filed any accounts with Companies House and in the circumstances the state of their accounting records may in my opinion be questionable and hence also the accuracy and reliability of the contents of the letter from Ghulam Mustafa Zaman (Appendix F8). 3.27 Furthermore, in the aforementioned letter (Appendix F8) he refers to each payment as being £2,900 but the schedule provided of rents received (Appendix F2) only shows this as the weekly amount received from 23 July 2010. 3.28 As mentioned at paragraph 3.17 above rent of £45,000 was transferred to the drawings account of Khalid Pervaz according to the Sage audit trail provided and was described as private income. This related to the period August 2009 to November 2009 which falls into the tax year ended 5 April 2010. Whilst I have not seen his personal self-assessment tax return for that year I have seen those for subsequent years. In particular the return for the year ended 5 April 2011 includes UK property pages and refers to one property being let jointly, but no rent is shown thereon. I am not however aware as to what property is being referred to and it may therefore not be the Partnership property subject to the lease. 3.29 Even if the rent received was not to be regarded as Partnership income, as the title to the property is registered in the names of Shazada Khalid Pervaz and Mehboob Ahmed Pervaz (paragraph 3.8 above), I would have expected any rent received to be split equally between them. 3.30 In view of my comments above and with regard to the schedule provided of rents received (Appendix F2) I conclude as follows: - As far as I can ascertain from the entries on the Sage audit trail no rent has been included in the profit and loss accounts of the Partnership. - Whilst rent receipts from Premier Halal Meats Ltd have been identified as having been paid into the Partnership’s two National Westminster Bank accounts, the majority of these were paid into the number two account, which until 11 January 2011 may possibly not have been included within the Partnership’s accounts (paragraph 3.24 above). - With regard to the eight rent receipts paid into the Partnership’s National Westminster Bank account No. 00876186 (paragraph 3.19 above) I assume that these were posted to the sales ledger against the invoices raised net of credit notes (paragraphs 3.15 to 3.17 above). - The schedule provided (Appendix F2) shows VAT on the rent. I assume that apart from the VAT on the invoices less credit notes recorded (paragraph 3.17 above) no further VAT on the rent received has been accounted for to HMRC. Therefore, any VAT on the rent received not accounted for is due to HMRC. - With regard to the rent shown on the schedule at Appendix F2 and the amounts received I note that up until 16 July 2010 the amounts shown thereon do not agree with the amounts received and would appear to be understated by £500 per week. This amount would appear to be an additional charge for rates and insurance (paragraph 3.18 above). No VAT appears to have been due on these additional charges as per the invoices posted per the Sage audit trail. - With effect from 23 July 2010, the schedule at Appendix F2 shows a total amount of £2,900 per week inclusive of VAT. If this includes rates and insurance, then VAT has been calculated on the rates and insurance element as well as the rent from that date. - The total VAT shown on the schedule at Appendix F2 amounts to £61,065.61. If this figure is correct and on the basis that VAT of £5,400.00 has been properly accounted for on the invoices less credit notes which would appear to have been accounted for in the Partnership’s Sage accounting records (paragraph 3.17 above) then the amount of VAT due to HMRC would be £55,665.61 (£61,065.61 - £5,400.00). - If none of the rent and other amounts received in respect of the property have been recorded in the Partnership’s profit and loss accounts then its profits for the years ended 31 July 2009, 2010, 2011 and 2012 will have been understated by the amounts receivable in those years net of VAT. Furthermore, the allocation of profits as between the partners will also be understated in those years. - Based on the net rental figures per the schedule at Appendix F2 and including an extra £500 per week for rates and insurance, up to and including 16 July 2010 (week 53), the Partnership’s profits have potentially been understated by the following amounts: Year Ended Net Rent Additional £500 Total Potential 31 July (Appendix F2) per week Understatement £ £ £ 2009 6,000 1,500 7,500 (52 weeks) 2010 104,936.18 25,000 129,936.18 (52 weeks) 2011 126,798.28 - 126,798.28 (52 weeks) 2012 94,250.13 - 94,250.13 (39 weeks) Total (146 weeks) £331,984.39 £26,500 £358,484.39 - Furthermore, if Khalid Pervaz has received this rental income, then the amounts inclusive of VAT should have been treated as additional drawings of his in the Partnership’s accounts. In this respect the total amount inclusive of VAT would be £419,550.00 (£358,484.39 + VAT of £61,065.61). - This amount would however appear to need reducing by £5,400 being the VAT on the £45,000 previously transferred and credited to his drawings account (see paragraph 3.17 above). This results in a revised amount of £414,150 (£419,550 - £5,400). - Based on the information and documentation currently available to me it is not possible for me to say with any degree of certainty the actual amounts of rental income that Khalid Pervaz may have received and not accounted for to the Partnership. In particular, and as referred to at paragraph 3.24 above, the position regarding the number two bank account (into which rental income appears to have been paid) and the transfer of the balance thereon to the main Partnership bank account is unclear.”

“Rental income from property leased to Premier Halal Meats Ltd between 2009 and 2012 3.8 In section 3 of my report dated 23 January 2024, I considered matters relating to the treatment of the rental income from the Partnership’s property at Unit 2, Brookwoods Industrial Estate, Holywell Green, Halifax. As per paragraphs 3.1 and 3.2 of my report the Partnership leased the property to Premier Halal Meats Ltd for a period of three years commencing on 17 July 2009. Whilst the lease should have run up to 17 July 2012, I am advised that the tenant left the building on or around 7 May 2012 (paragraph 3.6 of my report of 23 January 2024). 3.9 As per paragraph 3.30 of my report dated 23 January 2024, I concluded that as far as I could ascertain from the Sage audit trail provided that no rent had been included in the profit and loss accounts of the Partnership. Furthermore, I calculated that rent plus additional amounts for rates and insurance amounting to £358,484.39 excluding Vat, had not been included in the accounts, thus potentially understating the Partnership’s profits for the years ended 31 July 2009 to 2012. 3.10 In addition, I concluded that if Khalid Pervaz had received this rental income and had not accounted to the Partnership therefore, then the amounts inclusive of Vat should have been treated as additional drawings of his in the Partnership accounts. In this respect I calculated additional drawings of his in the years ended 31 July 2009 to 2012 of £414,150 (paragraph 3.30 of my report of 23 January 2024). 3.11 With regard to the amounts received in respect of the rental income due, as per my report of 23 January 2024, I identified the following receipts which appeared to relate thereto: - Net of represented cheques, 8 amounts of £2,800.00 each paid into the Partnership’s National Westminster Bank account No. 00876186 between 27 August 2009 and 25 November 2009 (paragraph 3.21 of my report of 23 January 2024). These amounts total £22,400.00 (8 x £2,800.00). - Net of represented cheques, 4 amounts of £2,850.00 each and 32 amounts of £2,900.00 each paid into the Partnership’s National Westminster Bank account No. 24128376 between 23 December 2009 and 10 January 2011 (paragraph 3.22 of my report of 23 January 2024). These amounts total £104,200.00 (4 x £2,850.00 + 32 x £2,900.00). 3.12 As noted at paragraphs 3.21 and 3.22 of my report dated 23 January 2024, it is possible that further amounts in respect of rent were paid into the aforementioned Partnership bank accounts and were included as part of larger amounts banked. However, without details showing the composition of the amounts banked it is not possible to ascertain whether or not this is the case. 3.13 With regard to the Barclays Bank account No. 60231983, for which further information has now been provided, additional receipts of rental income from Premier Halal Meats Ltd have been identified. These amounts which total £112,800.00, are per Appendix D7 hereto, and were received between 5 April 2011 and 25 April 2012. 3.14 Whilst the narrative on the printouts received from Barclays bank show these amounts as ‘Prem Hal Ltd Premier Halal rent’, it is possible that other amounts in respect of rent may have been paid into this account by cash and/or cheque. However, without further details regarding the sources of the cash and cheques paid into this account it is not possible to say whether or not these include any further rent receipts. 3.15 I note for example that of the cheques paid into this account (Appendix D2 hereto), that in March 2011 there were five amounts received of £2,900.00 each, although two of these were unpaid. In my opinion these were possibly rent receipts from Premier Halal Meats Ltd. 3.16 With regard to the amounts of the rent received per Appendix D7 hereto, I note that whilst these initially started in April 2011 at £2,900.00 per week, they then increased to £2,950.00 per week from May 2011. 3.17 The amount of £2,900.00 per week accords with the schedule provided to me (paragraph 3.4 and Appendix F2 of my report of 23 January 2024). I am not aware as to why the amounts received increased by £50.00 to £2,950.00 per week. It is possible that this was due to either a further increase in the rent or the charges for rates and insurance, in which case there would be a further understatement of rent receivable, including Vat thereon, and Partnership profits. Alternatively, the increase may possibly be to make up for previous underpayments. Without any further details I am not able to say what the correct position is regarding the additional amount received. 3.18 Based on the above I have in total now identified rental receipts of £239,400.00 (£22,400.00 and £104,200.00 (paragraph 3.11 above) + £112,800.00 (paragraph 3.13 above). 3.19 From the schedule provided to me (paragraph 3.4 and Appendix F2) of my report of 23 January 2024), the total amount receivable, including Vat, should have been £393,049.65. As per paragraphs 3.18 and 3.30 of my report of 23 January 2024, the amounts shown on the schedule at Appendix F2 of that report required increasing by £500.00 per week in respect of rates and insurance up to and including 16 July 2010 (week53). Adding 53 weeks at £500.00 per week increases the amount due by £26,500.00 to £419,549.65 (£393,049.65 + £26,500.00). 3.20 Deducting the identified receipts of £239,400.00 (paragraph 3.18 above), from the total of the amounts due of £419,549.65 (paragraph 3.19 above) leaves an amount of £180,149.65 in respect of which no receipts have been specifically identified. 3.21 The rental receipts into the Barclays Bank account do not appear to have been reflected in the accounting books and records of the Partnership. I am therefore of the opinion that these receipts do not alter the treatment adopted in my report of 23 January 2024 regarding the rent receipts unaccounted for, in which I treated them as additional drawings of Khalid Pervaz. The only possible impact is that if the amount payable did increase from £2,900.00 per week to £2,950.00 per week (paragraph 3.17 above), then there may be a further understatement of profits in the Partnership accounts, as well as a further understatement of Vat payable to HMRC. In addition, the amounts withdrawn by Khalid Pervaz may also be understated. However, without further details I am not able to comment upon these points further.”

“3.4 I have been provided with a schedule purporting to show the rents received under the lease (Appendix F2 hereto). I understand that this schedule was prepared by or on behalf of the Defendants, but I have not seen the source information from which it was prepared.”

“Q. How was this prepared? Who created this? A. We did. I did. From the time the lease started to the time he left. Q. In fact it is a list of rent payable, not rent received? A. It was a list of what was paid when he was in occupation. Q. What is the basis of saying that this was money received by the partnership? A. It was received and some of it was processed through the partnership accounts. It was processed by Khalid and Sufwan. Q. How do you know it was received? A. I spoke to Mustafa [Zaman] about it.”

“To whom it may concern I Ghulam Mustafa Zaman of 119 healds road Dewsbury West Yorkshire Confirm that I was the director of premier halal meats limited and I entered in to a lease agreement with Mr Khalid Pervaz of Medina Meat and Poultry Group for the lamb slaughterhouse commencing from 17th July 2009 till the 1st May 2012. I can also confirm the rent paid was plus vat as per lease agreement and recorded as such on my company accounts. I paid Mr Khalid Pervaz the rent in cash and if cash was not available he was paid by an open cheque The amount I paid each was £2900.00 I am willing to give a formal statement if and when required.”

“25. The lamb plant and building fully fitted out was then leased out by Khalid to Premier Halal Meats Ltd, a business owned by Mustafa Zaman, pages 7-27. This was from 17 July 2009 to 1 May 2012 for £2,400 per week for the first year then £2,900 per week None of the money has not been accounted for by Khalid in the partnership accounts which he alone collected. I believe Khalid kept the money for himself. There is nothing in the ledgers showing money having been received. 26. It was strange for the business to be shut so suddenly and more strange to be rented out the premises to Premier who were fairly new customers with less than four months business with us. Since Khalid's death I have found various papers relating to it at work, I also went on the Companies House website to have a look at their records. To my surprise they have never ever filed any accounts. Premier Halal Meats Ltd, number 6624083 was incorporated on 19 June 2008 and dissolved on 5 October, 2010, Premier Halal Limited, number 07252271, incorporated on 10 May 2010 and dissolved on 24 May 2011. The registered address is Unit 2 Brookwoods Industrial Estate. A third company is then incorporated with the same name, Premier Halal Limited number 08181906 on 16 August 2012 and dissolved on 10 June 2014. Every time the modus operandi is the same. Run the company for a year or so then close it down and not file any accounts. It appears that, Mr Zaman was running the business under false pretences and would routinely open and close companies. 27. I found a letter dated 29 May 2012 amongst the papers. This is letter from Dodds Co accountants demanding payment, which is of note is a staggering amount of money owed by the company (over £600k!). 28. More worrying is a letter from the regulator, Food Standards Agency, (39 of the Defendant's disclosure bundle) pages 31 32. It seems that when the first company was dissolved, they had not been informed and Mr Zaman continued operating illegally. With each set up you need to apply afresh for a licence and go through the process again. I don't believe for one minute that they would have got a licence because Mr Zaman would have been investigated and he would not have passed the Fit and Proper person test. It seems to me the regulator was about to take enforcement action.”

“Based on the information and documentation currently available to me it is not possible for me to say with any degree of certainty the actual amounts of rental income that Khalid Pervaz may have received and not accounted for to the Partnership. In particular, and as referred to at paragraph 3.24 above, the position regarding the number two bank account (into which rental income appears to have been paid) and the transfer of the balance thereon to the main Partnership bank account is unclear.”

“3.20 Deducting the identified receipts of £239,400.00 (paragraph 3.18 above), from the total of the amounts due of £419,549.65 (paragraph 3.19 above) leaves an amount of £180,149.65 in respect of which no receipts have been specifically identified. 3.21 The rental receipts into the Barclays Bank account do not appear to have been reflected in the accounting books and records of the Partnership. I am therefore of the opinion that these receipts do not alter the treatment adopted in my report of 23 January 2024 regarding the rent receipts unaccounted for, in which I treated them as additional drawings of Khalid Pervaz. The only possible impact is that if the amount payable did increase from £2,900.00 per week to £2,950.00 per week (paragraph 3.17 above), then there may be a further understatement of profits in the Partnership accounts, as well as a further understatement of Vat payable to HMRC. In addition, the amounts withdrawn by Khalid Pervaz may also be understated. However, without further details I am not able to comment upon these points further.”

“Aqsa Halal Meats 4.10 The schedule at Appendix G1 shows 66 invoices raised to Aqsa Halal Meats between 17 November 2007 and 7 February 2009. I have been provided with copies of these invoices which are numbered 12901 to12974, I note however that there are no invoices numbered 12916, 12928, 12930, 12050, 12960, 12965, 12969 and 12970 and that number 12944 was cancelled. In addition, there are two invoices with the number 12914. I also note that there are in some cases small differences between the amounts shown on the invoices and those shown on the schedule. As per the schedule at Appendix G1 these invoices total £112,111.99 (Net £95,779.00 + Vat £16,332.99). 4.11 As to whether the invoices raised have been recorded in the Partnership’s accounting records, I have again in the absence of the full accounting records of the Partnership for the period prior to 1 August 2012, referred to the Sage audit trail provided. As a result, I have not located any of the invoices shown on the schedule at Appendix G1 and it would therefore appear that these have not been recorded on the Sage accounting system. I did however find five invoices dated 14 February 2009 to 14 March 2009 to Aqsa Halal Meats recorded on the Sage system and in this respect I refer to the extract from the Sage audit trail at Appendix G3 on which I have highlighted these invoices in green. These five invoices total £8,421.44 (Net £7,323.00 + Vat £1,098.44). 4.13 I have been provided with a copy of a Sage nominal ledger account (account number 4006 Sales – Contract Kill) showing various sales invoices posted thereto, including the aforementioned five invoices to Aqsa Halal Meats which I have highlighted in green thereon. A copy of this is attached at Appendix G5 hereto. 4.14 I further note from a search of the Sage audit trail that on 1 August 2011 the total amount of these five invoices, £8,421.44 was written off as a bad debt (see extract from Sage audit trail at Appendix G4 hereto on which I have highlighted this entry in green). 4.15 With regard to the 66 sales invoices as per Appendix G1, as well as the other five invoices (Appendix G3), I have not been able to locate any receipts in respect of them and therefore I am not able to say whether or not any monies were received in respect of them. In my opinion it would be reasonable to assume that if payments were not being received then the Partnership would not have continued to let them use their facilities for a period of approximately 16 months from November 2007 to March 2009. 4.16 I have been provided with a Witness Statement of Shafiq Ahmed dated 26 February 2023, a copy of which I attach at Appendix G9 hereto. It would appear therefrom that Shafiq Ahmed was an owner of or involved with Aqsa Halal Meats. In his Witness Statement he refers to using Medina Meat and Poultry Group for the slaughter of animals. He states that all their business dealings were with Khalid. He further states that they were issued with handwritten invoices which they paid mostly by cheque and sometimes cash. He also states that they made payments in full on a weekly basis to Khalid and that no money was due when Medina shut the contract kill business. Based on the information and documentation currently available to me, as well as my comments above, I conclude that: - The 66 invoices raised to Aqsa Halal Meats between 17 November 2007 and 7 February 2009 (Appendix G1) do not appear to have been recorded in the Partnership’s Sage accounting system and as a result sales and profits would appear to be understated by the net amount of £95,779.00 and VAT thereon has been underdeclared by £16,332.99. With regard to the sales of £95,779.00, based on the dates of the invoices shown on the schedule at Appendix G1, £51,070.30 relate to the year ended 31 July 2008 and £44,708.70 to the year ended 31 July 2009. - No receipts appear to have been recorded in the Sage accounting records in respect of the 66 invoices or in respect of the further five invoices that were recorded in the Sage records. - With regard to the five invoices which were recorded on the Sage system, totalling £8,421.44, these were subsequently written off as a bad debt. - If monies have been received from Aqsa Halal Meats in respect of the invoices rendered to them, I am not able to say why they have not been recorded. If the amounts were paid to the Partnership, it is possible that amounts equivalent thereto have been drawn from the business which also have not been recorded as alleged by the Defendants. Alternatively, the monies may never have been paid into the Partnership, particularly if they were in cash. As per paragraph 4.16 above, Shafiq Ahmed of Aqsa Halal Meats refers to making payment in full on a weekly basis to Khalid. 4.18 With regard to the bad debt written off of £8,421.44 (paragraph 4.14 above), I am unable to say whether or not this is a genuine bad debt or whether the amount was received and not recorded against the invoices raised. Other Contract Kill Customers 4.19 In addition to Premier Halal Meat Ltd and Aqsa Halal Meat I am advised by the Defendants of two other contract kill customers, namely IQ Halal and Raffi Meats. 4.20 With regard thereto I note that the copy nominal ledger account provided, account number 4006 – ‘Sales – Contract Kill’ (Appendix G5) shows various invoices rendered to IQ Halal between 28 May 2005 and 14 February 2009, account references IQ0002 and IQ0003. 4.21 In addition, I note from a review of the Sage audit trail that numerous sales invoices have been rendered to both IQ Halal and Raffi Meats, although in the absence of the sales invoices it is not possible for me to say what these relate to. 4.22 With regard to Raffi Meats, the Defendants have advised that this is a customer who has been supplied poultry by Sufwan which is unaccounted for. They further state that the poultry operation was run during the day and the meat operation was during the night and that Raffi was a contract kill customer who had his sheep processed at Medina at night. They then go on to say that Sufwan dealt with him on the meat side which was operational at night and had access to the fridges on the poultry side. With regard to the buying of poultry by Raffi they say that some has been accounted for on the Medina computer system but there are sales unaccounted for. 4.23 I note from the Sage audit trail provided that from in or around September 2005 to early 2009 numerous sales invoices have been raised to both IQ Halal (Account IQ0003) and Raffi Meats (Account RAFF01) on which VAT has been charged. These invoices bear numbers that are not part of the main sales invoice number sequence and as VAT has been charged on them, I assume that they are likely to relate to ‘contract killing’ as there would not appear to be any VAT due on the other sales made by the Partnership. I attach at Appendices G11(i) and G11(ii) schedules of sales invoices which I have extracted from the Sage audit trail in respect of IQ Halal and Raffi Meats respectively. It is also noted that the Sage audit trail includes sales receipts from both IQ Halal and Raffi Meats, schedules of which I attach at Appendices G12(i) and G12(ii) hereto. 4.24 Whilst some of the sales invoices to IQ Halal appear in the ‘Sales – Contract Kill’ nominal ledger account provided to me (Appendix G5 as highlighted in orange thereon and on Appendix G11(i)), the majority do not, and none of the Raffi Meats invoices have been posted to this account. In the absence of the Sage nominal ledgers for the years concerned I can only assume that the recorded sales invoices not posted to the aforementioned nominal ledger account, have been posted to another sales account. 4.25 With regard to IQ Halal the Defendants have provided the following schedules of recorded sales to them: - I.Q. Contract – I.Q. Halal Meats (Beef) – Appendix G6(i) - I. Q. Chicken – I.Q. Halal (Chicken) – Appendix G6(ii) 4.26 I note that the sales to IQ Halal as per the schedule at Appendix G11(i) are not recorded on the aforementioned schedules. 4.27 I have been provided with a Witness Statement of Aftab Iqbal a copy of which I attach at Appendix G10 hereto. I note therefrom that he was in partnership with his brother, Shahzad Iqbal. He states that the partnership was named IQ Butchers. I assume that this is the same or part of the same business as IQ Halal. In his Witness statement he refers to purchasing poultry from Medina and to supplying them with animals for slaughter. He refers to the animals as being supplied by Andrew Atkinson livestock of Harrogate Ltd and delivered direct to Medina. He states that after the animals had been processed they would be issued with handwritten invoices. Furthermore, he states that they paid Khalid, nearly all of which was in cash. 4.28 In his Witness Statement, Aftab Iqbal also states that on average around 900 animals were slaughtered and the average bill was around £6,000 per week but near Muslim Festive days, such as Eid, it would be around £20,000 per week. He also refers to being with Medina for around five years until July 2009. He further states that Medina’s ledgers do not reflect the number of animals that went through their slaughterhouse. 4.29 With regard to the points made by Aftab Iqbal in his Witness Statement, these would in my opinion appear to support the sales and receipts I have identified from the Sage audit trail in respect of IQ Halal (account reference IQ0003) as per Appendices G11(i) and G12(i). Whilst in my opinion it is possible that there are some unrecorded sales and receipts in respect IQ Halal, based on the information currently available to me I am not able to identify and quantify the same. 4.30 With regard to Raffi Meats, the Defendants have provided a schedule of recorded sales to them, a copy of which I attach at Appendix G7 hereto. The Defendants are of the opinion that this schedule does not reflect all the sales made to Raffi Meats and refer to the period 1 April 2007 to 7 April 2008 where no sales are recorded. 4.31 In this respect the Defendants have provided copies of pages from a duplicate book of delivery notes which they advise are unrecorded sales to Raffi Meats. These copy delivery notes are in respect of the period 3 April 2007 to 14 July 2007, and would appear to relate to poultry sales. Every few days there is a summary page showing the previous days sales and the amount due in respect thereof. I attach at Appendix G8 hereto a summary I have prepared of the totals of the amounts due as per these pages. For the period 3 April 2007 to 14 July 2007 the total value of the sales made would appear to be £75,472.65 (Appendix G8). It is not however clear as to whether this was paid in full. I have not been provided with any information as to what the sales may have been for the remainder of the period 15 July 2017 to 7 April 2008. 4.32 If poultry sales made to Raffi Meats in the period 1 April 2007 to 7 April 2008 have not been recorded, then sales and profits per the Partnership’s accounts will have been understated by the amount thereof. Furthermore, if monies have been received in respect of these sales and not recorded then the amount thereof will effectively be monies drawn from the Partnership. 4.33 With regard to ‘contract kill’, it would from the schedules at Appendices G11(ii) and G12(ii) hereto, appear that invoices were raised to Raffi Meats and monies were received from them between October 2005 and January 2009 and were recorded on the Sage computerised accounting system. These schedules include invoices raised and monies received between April 2007 and April 2008. 4.34 Based on the information and documentation currently available to me I am unable to comment further on the matter of the contract kill income and am unable to ascertain the full extent of sales and the monies received therefrom that may not have been recorded in the Partnership’s accounting records and hence in its accounts.”

“9.37 In respect of the Rolls Royce, documentation provided to me indicates that the vehicle was written off as a result of an incident on 15 May 2015. As a result, the insurance company paid out in respect thereof the sum of £134,250 on 16 June 2015 by way of two cheques, one for £100,000 and one for £34,250. It would appear that the cheques were made out to Shazada Khalid Pervaz who in the payment advices issued by the Insurers (Appendix Q7) is referred to as the Insured. I note however that the vehicle was regarded as a partnership asset and was included in the partnership accounts. 9.38 According to the Partnership’s accounting records this vehicle was purchased for £174,000 in the year ended 31 July 2012 and at May 2015 had a book written down value of £75,870. In the circumstances the profit on disposal should be £58,380 (£134,250 - £75,870). 9.39 The accounting records and the accounts prepared therefrom for the year ended 31 July 2015 only show disposal proceeds of £100,000 and as a result a profit on disposal of £24,130 (£100,000 - £75,870), thereby understating it by £34,250 (£58,380 – £24,130). 9.40 As a result of making further enquiries, I am advised by Isha Pervaz, the daughter of the late Khalid Pervaz that the two cheques totalling £134,250 from the Insurers were paid into her late father’s personal bank account with National Westminster Bank. This was account number 01004654, sort code 53-61-07, and a copy bank statement has been provided showing this amount paid in on 19 June 2015 (Appendix Q8). 9.41 I am further advised by Isha Pervaz that on 24 July 2015, her late father drew a cheque for £100,000 made payable to JCT600 in respect of the deposits on two Bentleys, on his aforementioned personal bank account. As per the copy bank statement provided this cleared the account on 30 July 2015 (Appendix Q8). However, with regard thereto, see paragraph 9.73 below. 9.42 A review of the Sage nominal ledger of the Partnership for the year ended 31 July 2015 shows that the balance of £34,250 was included as funds introduced by Khalid Pervaz in the year ended 31 July 2015. In this respect it is noted that £34,250 was paid into the Partnership’s National Westminster Bank loan account No. 61123048 on 24 July 2015. 9.43 This is not the correct treatment as the £34,250 was Partnership monies and not Khalid’s monies to introduce. I note that in preparing the accounts for the period ended 7 July 2016 that Sheards corrected the position in that period by reversing the £34,250 previously treated as capital introduced by Khalid and showing it as additional profit on disposal.”

“Q. You have no personal knowledge of Khalid putting the proceeds of sale from the red meat plant into the partnership, have you? A. I have. Q. What evidence? A. I have seen the customer come down, purchased machinery. Payment would have ended up in Kasim’s hands. He would have given it to Kasim. I have seen it in his hands.”

“I didn’t feel the need to go through it to explain it to that degree/extent.”

“Two hock cutters front and back £3000 each £6000 One punching arm + steriliser £1000 Brisket cutter + steriliser £1500 All the hooks @ £8 each £5040 Splitting saw + balancer £2500 Splitting saw steriliser £350 Spinal cord machine £2500 Band saw £100 Liver (pluck) rack £250”

“Mr Mehboob Ahmed Pervaz - £250,316.02 We act for the above named as Accountants and Advisors. Our client made a series of payments directly to the Halifax Bank to settle your outstanding mortgage, these payments are detailed below. 21 February 2014 - £50,000 28 February 2014 - £50,000 7 March 2014 - £50,000 14 March 2014 - £50,000 21 March 2014 - £50,000 13 May 2014 - £316.02 Our client would respectfully ask the return of these funds, as this was a loan made by him in his personal capacity and was not made from the partnership. Whilst understanding that this is a considerable sum, we would be grateful if you could contact us with some indication as to when the amount can be returned.”

“Q. The accountants say that this was a loan in your personal capacity, not from the partnership. A. That’s how the accountants perceived it. Q. Mr Davidson was of the same view. Both accountants came to the same view. Maybe it was a personal loan? This was written on your instructions. A. They wanted clarification. Q. No, they didn’t want clarification. They wanted Mumtaz to pay you £250,000 in your personal capacity. A. She had clarified it. It was paid by the partnership. What the accountants say is irrelevant. Now we have the answer. Q. This says there was a loan in your personal capacity. A. That was not my intention. This is the accountants’ interpretation of this. I didn’t see the final version of this letter.”

“Q. You don’t understand how this £68,000 is said to have been taken, but if it was Ahmed his account must be debited for that sum? A. Yes.”

“1. Please confirm on which bank account the 2 cheque payments were drawn? 2. Where are the copies of the 2 cheques for the deposits on 11/6/10 and 29/10/10? Please provide copies. 3. If the bank statements are not available, please explain how D2 knows that these cheque deposits were made on his behalf?”

“Q. You want a buy out? A. I don’t understand any of this. Q. If you win, what do you want the Court to do? A. Well, put it through the accounts and then we’ll see what’s what. I don’t know: we’ll see what happens. Let’s see what happens. I can’t comment on that that the moment. ... Q. [It was put to him that on Mr Davidson’s figures the balance on his father’s account was £502,000]. If you succeed, your father’s balance goes to his trustee in bankruptcy, not to him? A. Yes, I think so. Yes, we will have to raise that money. Q. Are you in a position to raise that sort of money? A. Can’t comment on that at the moment. Q. The District Judge will be asked on the final hearing to make a buy out order, but can you afford it? A. I don’t know about that. Can’t comment on it. Q. Have you thought about it at all? Or have you just not bothered? A. We’ll see what Mr Davidson [the expert] says. Q. You’ve not thought about buying out at all? A. No. Q. That is a lie. Your barrister would not have brought a document into Court saying you wanted a buy out unless he had your instructions to do so. A. I don’t know about that.”