Mehul Devani v Amir Sharon [2026] EWHC 1037 (Ch)

[2026] EWHC 1037 (Ch)Case No CR-2024-003912
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
Date 5 May 2026
IN THE MATTER OF HERMES HOUSE NW2 LIMITED
Before
Deputy Insolvency and Company Court Judge Kyriakides
Between
Mehul DevaniClaimantAmir SharonDefendant
Amy Proferes (instructed by Howard Kennedy LLP) for ApplicantWilliam Harman (instructed by CMS Cameron McKenna Nabarro Olswang LLP) for RespondentHearing Hearing dates: 11-13 November 2025, with closing submissions having been completed on 4 December 2025
APPROVED JUDGMENTIf this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.

Deputy Insolvency and Company Court Judge Kyriakides :

[1]This was the trial of a claim by Mehul Devani (“Mr Devani”) for the following orders: 1.1. a declaration that he is beneficially and absolutely entitled to 50% of the issued share capital of Hermes House NW2 Limited (“the Company”); 1.2. an order that Amir Sharon (“Mr Sharon”) transfers 50% of the issued share capital to him or his nominee and procures the issue of a share certificate to him or his nominee and the registration of either him or his nominee as the holder of the shares.[2]It was also the trial of a counterclaim by Mr Sharon for the following declaratory relief: 2.1. that Mr Devani is the beneficial owner of 33.33%, and Mr Sharon the beneficial owner of 66.67%, of the issued share capital in the Company; 2.2. that Mr Sharon is not required to transfer legal title to the shares in which Mr Devani has a beneficial interest to Mr Devani unless and until Mr Sharon and Mr Devani enter into a binding shareholders’ agreement; 2.3. that Mr Devani is liable to pay 33.33% of the cost of developing the property known as 1 Ridge Road, London NW2 2QR (“Hermes House”).[3]On 6 November 2025 Mr Sharon transferred 33.3% of the issued shares in the Company to Mr Devani’s nominee, Pangbourne Investments Limited, without first requiring the entry by the parties into a shareholders’ agreement. Accordingly, it is no longer contended by Mr Sharon that any obligation to transfer shares which are beneficially owned by Mr Devani is dependent on a binding shareholders’ agreement being entered into.[4]The issue that I now have to decide is whether Mr Sharon holds 16.7% of the issued share capital in the Company on trust for Mr Devani and is obliged to transfer that interest to Mr Devani or his nominee. Background The Parties

Background

[5]Mr Devani is the director of an independent sales agency, a position he has held for the last 25 years. He has bought and sold numerous properties for both himself and on behalf of clients, but did not have any direct experience in developing projects.[6]Mr Sharon has a degree in mechanical engineering and has substantial experience in developing properties, including the conversion of business premises into residential properties. He is in business with Stephen Glynne (“Mr Glynne”) and through their companies has carried out around 12 projects.[7]Mr Devani and Mr Sharon have known each other for a substantial period of time. In about 2009/2010 Mr Devani entered into a joint venture agreement with Mr Sharon and Mr Glynne for the purchase and development of a pub into Houses in Multiple Occupation (“HMO”). Mr Sharon in his evidence states that Mr Devani paid about one third of the purchase price for the building, with Mr Glynne paying the balance, and that the development costs were shared equally between them. Mr Sharon was the person responsible for the development, including its design, planning, legal procurement and project management. Subsequently, the three of them through a company bought another property to develop, but this did not proceed and Mr Glynne bought Mr Devani out.

Hermes House and the joint development agreement

[8]In or about 2015 Mr Devani was looking to purchase a building that could be developed into residential flats and houses and learned that Hermes House was on the market for sale. In light of Mr Sharon’s development experience, he approached Mr Sharon and asked him if he would be interested in purchasing the building with him.[9]Both parties’ evidence is that Mr Sharon suggested that they should look for another investor to join the project. Mr Sharon in his evidence states that the reason for this is that he understood from Mr Devani that he did not have the funds to purchase Hermes House and that he told Mr Devani that he also did not have the funds to do so as his monies were tied up in another project, SE20, and he did not want to start something without having the funds.[10]Mr Devani then approached Hussein Lalani (“Mr Lalani”) to see if he would be interested in investing in the project. Mr Devani had been friends with Mr Lalani since university and knew that Mr Lalani was actively looking for investment opportunities after having sold his company.[11]Discussions then ensued between Mr Devani, Mr Sharon and Mr Lalani. On 2 June 2016 the Company was incorporated by Mr Sharon for the purpose of acquiring Hermes House. Its issued share capital of £100 divided into 100 shares of £1.00 each was held by Mr Sharon who was also the sole director of the Company.[12]Both parties agree that in June 2016 a binding joint venture agreement (“the JV Agreement”) was concluded between Mr Devani, Mr Sharon and Mr Lalani (“the JV Partners”). They also agree that it was a term of the JV Agreement they would each fund 33.33% of the development costs of Hermes House, that all profits would be divided equally between them and that Mr Sharon would procure the issue of an additional 200 shares in the Company, which would be held as to 100 shares for Mr Devani and 100 shares for Mr Lalani so that the share capital would be held equally between the three of them.[13]The parties, however, disagree on how the purchase cost of Hermes House was to be funded, a matter which I consider later on in this judgment. In brief, Mr Devani’s evidence is that it was agreed that he, Mr Sharon and Mr Lalani would fund the purchase of Hermes House in equal shares, but that prior to exchange of contracts on 24 June 2016 Mr Sharon informed him and Mr Lalani that due to cash flow issues, he could not fund his one third share of the purchase price. As a result, it was agreed that Mr Sharon would carry out the necessary project management work in obtaining planning permission and would pay his share of the purchase price when he was able to. The purchase price was therefore primarily funded by Mr Devani and Mr Lalani, although it is accepted that Mr Sharon, through a company called ATN Property Limited, made a contribution in the sum of £13,600.[14]Mr Sharon’s case, however, is that there was no agreement that he should contribute towards the purchase price of Hermes House. He states that it is his policy never to contribute towards the purchase price of a property where the parties are entering into a joint venture with each other for the first time. As he had never entered into a joint venture before with Mr Lalani, it was accordingly agreed that the purchase price for Hermes House would be funded by Mr Devani and Mr Lalani in equal shares and that he would contribute his experience, skill and time developing the property. His evidence is that shortly prior to exchange, he suggested to Mr Devani and Mr Lalani that instead of paying the usual 10% on exchange, they should pay 50% in order to get the keys to the property and six months to start the work. It would appear that Mr Devani and Mr Lalani agreed to this suggestion, with Mr Lalani agreeing to pay £400,000 on exchange and £150,000 on completion and Mr Devani £150,000 on exchange and £400,000 on completion, which is what occurred.[15]Mr Sharon’s case was also that it was agreed in June 2016 or subsequently that legal title to the shares would only be transferred to Mr Devani and Mr Lalani (or their nominees) after the three of them had entered into a formal agreement governing the relationship between them. This is disputed by Mr Devani.[16]Exchange of contracts for the purchase of Hermes House took place on 24 June 2016 with completion occurring on 15 December 2016.

Warspite

[17]Following completion of the purchase of Hermes House, Mr Sharon introduced Mr Devani and Mr Lalani to another potential project, namely, the purchase and development of a property known as 1 Warspite Road, London SE18 5PG (“the Warspite Property”). After discussions between the parties, it was agreed in or about February or March 2017 that they would each contribute the sum of £80,000 towards the deposit for the property, Mr Lalani would fund the balance of the purchase price and that the Warspite Property would be purchased by Warspite Woolwich Limited (“WWL”), a company which had been incorporated on 19 January 2017 and whose directors were Mr Sharon and Mr Glynne (“the Warspite Agreement”).[18]The JV Partners paid their shares of the deposit for the purchase of the Warspite Property, together with further sums towards professional fees and expenses incurred during the conveyancing process. The total paid by each of them was £85,000 (“the Warspite Deposit”).[19]Mr Lalani subsequently informed the JV Partners that he was not able to pay the balance of the purchase price for the Warspite Property. It is Mr Devani’s case that following this, he and Mr Lalani were told by Mr Sharon that the Warspite Deposit had been forfeited to the seller. Mr Sharon denies this. His case is that the seller of the Warspite Property served a notice on WWL to complete the purchase of the property on or before 7 April 2017 and that Mr Glynne agreed to procure the funding required for WWL to complete the purchase in exchange for, among other things, Mr Sharon agreeing that the amount of the Warspite Deposit would be paid in full to Mr Glynne before any other distributions were made by WWL with WWL’s repayment obligation being personally guaranteed by Mr Sharon. A written agreement to this effect was entered into between Mr Glynne and Mr Sharon. Although it is dated 6 April 2017, Mr Sharon accepted in his evidence that the agreement might, in fact, have been produced in June 2020 and then backdated.[20]Mr Sharon further claims that on or about 6 April 2017 he told Mr Devani and Mr Lalani that WWL would be completing the purchase of the Warspite Property using funding from Mr Glynne, together with the Warspite Deposit that WWL had already paid to the seller. Both Mr Devani and Mr Lalani deny this and claim that they first learned of what had happened in early 2020.[21]It is, however, common ground between the parties that as Mr Devani and Mr Sharon had each lost the sum of £85,000 because of Mr Lalani’s inability to fund the completion monies for the Warspite Property, on 4 May 2017 a written agreement was entered into between the JV Partners whereby Mr Lalani agreed, among other things, that he was indebted to each of Mr Devani and Mr Sharon in the sum of £85,000 (“the 4 May Agreement”). It was also agreed at around this time that the sums owed would be reflected in the accounts of the Company as a credit of £85,000 for each of Mr Devani and Mr Sharon and a debit of £170,000 for Mr Lalani (“the Warspite Debt”) and that Mr Lalani would pay this sum from his share of the profits from Hermes House and, if insufficient, from the capital repayments to him.

The deterioration of the relationship between the JV Partners

[22]From about September 2017 disputes arose between the JV Partners concerning:(i) the amounts which Mr Sharon claimed had been paid by him on the Company’s behalf in relation to the development of Hermes House; and(ii) the Company’s accounts which were approved by Mr Sharon. I am not asked to determine any of these issues, although, in his evidence, Mr Sharon candidly admitted that the accounts were a mess at the time and that amounts were claimed by him which, in fact, related to other projects. The disputes concerning Mr Sharon’s contributions were ultimately resolved at a meeting held between the JV Partners whereby the parties agreed to value Mr Sharon’s contributions to development costs at £30,000.[23]By January 2020 no shares in the Company had been issued and allotted to either Mr Devani or Mr Lalani. On 8 January 2020 Mr Devani sent an email to Mr Sharon requesting that his shares be transferred to him, having been told by his accountant, Maria Johnson, that the monies he had paid into the Company needed to be properly accounted for.[24]As a result of this, on 17 January 2020 Mr Sharon procured the issue by the Company and the allotment to him of a further 200 shares of £1.00 each. The email correspondence shows that, despite requests made by or on behalf of Mr Devani, for 100 of these shares to be transferred to him, initially Mr Sharon’s position was that he would not do so until the accounts had been agreed between the parties, and subsequently, he declined to do so until the parties had entered into a shareholders’ agreement. A draft shareholders’ agreement was circulated on 1 May 2020, but was never agreed between the parties.[25]On 12 February 2020 a meeting was held between Charles Goldstein, the Company’s accountant (“Mr Goldstein”), and the JV Partners, which is recorded in Mr Goldstein’s email dated 16 February 2020. The email records that at the meeting Mr Lalani stated that he wanted Mr Sharon to provide evidence that the Warspite Deposit was allocated to “the new partner” who had stepped in to complete the purchase of the Warspite Property and avoided the loss that would have occurred had completion not taken place. Mr Lalani is also recorded as having stated that if he was satisfied that Mr Sharon and Mr Devani had lost their deposits of £85,000, as previously agreed, he would then repay these amounts to them from his share of the profits from Hermes House and, if not sufficient, from the capital repayment to be made to him.[26]Following this meeting Mr Lalani sent emails on 8 June 2020, 17 June 2020 and 25 November 2020 to Mr Sharon asking for proof that his and Mr Devani’s deposits had been lost. When no response was received, Mr Lalani instructed Knights Solicitors, who on 27 April 2021 sent a letter of claim to Mr Sharon’s solicitors, CMS Cameron McKenna Nabarro Olswang LLP (“CMS”) claiming that the 4 May Agreement had been procured by deceit and was a nullity, that Mr Sharon had been enriched by his use of the sum of £85,00 and/or was a constructive trustee of that sum for Mr Lalani (“the Warspite Dispute”) This claim was disputed by Mr Sharon. I am not asked, and do not need, to decide the merits of the Warspite Dispute.[27]By June 2021 Mr Lalani no longer wanted to be a JV Partner in the Company. On 23 June 2021 Mr Devani sent a WhatsApp message to Mr Sharon and Mr Lalani asking for a meeting to be arranged for 5pm at his office. Mr Lalani and Mr Sharon agreed, but Mr Sharon made it clear that the meeting was to be without prejudice.[28]A meeting was duly held between the JV Partners at Mr Devani’s office on 25 June 2021 (“the 25 June Meeting”). What happened at that meeting is disputed between the parties. Mr Devani in his witness statement (although his pleaded case is slightly different) claims that the following agreement was reached between the parties: 28.1. that Mr Lalani would exit the JV Partnership and Mr Devani and Mr Sharon would continue with the project as equal partners; 28.2. that Mr Sharon would pay Mr Lalani the sum of about £565,000; 28.3. that Mr Devani and Mr Sharon would each forgo the sum of £85,000 owed to them by Mr Lalani; 28.4. that Mr Sharon would transfer 50% of the issued shares to Mr Devani; and 28.5. that Mr Sharon would pay Mr Devani the sum of £20,000 when the Hermes House project (“the Project”) was completed.[29]Mr Sharon denies Mr Devani’s account of the meeting and denies that any agreement was made between him, Mr Lalani and Mr Devani. What happened at this meeting is the crux of Mr Devani’s claim and I shall therefore deal with it in greater detail later on in this judgment.[30]Following the meeting, Mr Sharon and Mr Lalani proceeded to negotiate a written settlement agreement through their respective solicitors and steps were taken for the amounts of the contributions by Mr Lalani and Mr Devani to the Company to be agreed.[31]On 12 December 2021 Mr Sharon and Mr Lalani signed a written Settlement Deed which set out the terms agreed for Mr Lalani leaving the Company and settling the Warspite Dispute.[32]On 5 January 2022 Mr Lalani forwarded to Mr Devani a copy of the Settlement Deed in response to a request made by Mr Devani. This was subsequently followed by correspondence between Mr Devani and Mr Sharon or their representatives, from which the dispute as to whether Mr Sharon held 50% of the issued share capital in the Company on trust for Mr Devani became apparent.

The Witnesses

[33]At trial, I heard evidence from Mr Devani, Sanjana Jansari, Mr Devani’s sister, Mr Lalani and Mr Sharon.

The approach to the witness evidence

[34]The court is required to decide issues of fact going back to 2016 and where the evidence relating to the most important events differs widely between the parties. In these circumstances, I must bear in mind how I should approach the oral evidence of the witnesses. This was summarised in Peter Glenn and others v Adam Walker and others [2025] EWHC 1286 (Ch) at [10]-[16] as follows:10. In this case the Court is required to decide questions of fact relating to events going back to some 10 years or so, with the key events of February 2018 now having occurred over seven years ago. In these circumstances, it is necessary to bear firmly in mind the much repeated observations of Leggatt J (as he then was) in Gestmin SGPS S.A. v Credit Suisse Limited [2013] EWHC 3560 (Comm) at [15] – [22] with regard to the unreliability of memory, and his caution to place limited, if any, weight on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.11. A particular concern identified by Leggatt J was the ability of a witness, in seeking to recall events that took place some time ago, to falsely do so, but to do so with genuine conviction and belief that their recollection is accurate. Thus, as Leggatt J cautioned in Gestmin at [22]: ”… it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”12. Allied to this is a concern that a witness seeking to recall events over a significant period of time is liable, in reconstructing those events in his or her own mind, to do so in a way that inaccurately recalls those events in his or her favour, and to exaggerate perceived advantages to his or her own case, and do so without deliberately seeking to give false evidence.13. As to the “demeanour” of witnesses, I note the observations of Arden LJ (as she then was) in Re Mumtaz Properties Ltd [2012] 2 BCLC 109 at [12] : ”12. There are many situations in which the court is asked to assess the credibility of witnesses from their oral evidence, that is to say, to weigh up their evidence to see whether it is reliable. Witness choice is an essential part of the function of a trial judge and he or she has to decide whose evidence, and how much evidence, to accept. This task is not to be carried out merely by reference to the impression that a witness made giving evidence in the witness box. It is not solely a matter of body language or the tone of voice or other factors that might generally be called the ‘demeanour’ of a witness. The judge should consider what other independent evidence would be available to support the witness. Such evidence would generally be documentary but it could be other oral evidence …”14. I also note the observations made as to the importance of contemporaneous documents by Males LJ in Simetra Global Assets Limited v Ikon Finance Limited [2019] EWCA Civ 1413 at [48] , reinforcing what was said by Leggatt J in Gestmin : ”48. In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including e-mails and instant messaging. Those tend to be the documents where a witness’s guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents.”15. In addition to documentary evidence, it is plainly appropriate to test the witness evidence against the inherent probabilities of the relevant situation, and considerations such as the consistency (or otherwise) of a particular witness’s evidence with other evidence, the internal consistency of that evidence, and the consistency of that evidence with what the witness might have said on other occasions – see e.g. Kimathi v The FCO [2018] EWHC 2066 (QB), at [98] .16. The established approach to fact-finding thus requires the reliable contemporaneous documentary evidence to be used as a platform, to which are added known or established facts, agreed facts, or probable facts (both inherently probable and by inferences properly drawn from known, established or agreed facts), which the Court will then build upon by reference to witness testimony which is consistent or compatible with that underlying body of reliable documentary evidence and is not tainted or flawed by other indicators of unreliability – see e.g. Re Parsonage (deceased) [2019] EWHC 2362 (Ch) , per HHJ Simon Barker QC at [32]-[37].” Findings on the Witnesses Mr Devani

Findings on the Witnesses

[35]In the Confirmation of Compliance section of his witness statement, Mr Devani confirmed that his witness statement set out only his personal knowledge and recollection in his own words and that on points that he understood to be important in his case, he had stated honestly(a) how well he recalled matters and(b) whether his memory had been refreshed by considering documents, and if so, how and when. In the body of his witness statement he also stated that, “All the documents that I referred to for the purpose of providing the evidence set out in this statement are listed in a schedule of which appears towards the end of my statement”. The schedule identified only eight documents.[36]During the course of Mr Devani’s cross-examination, it became apparent that for the purpose of preparing his witness statement, Mr Devani had looked at numerous documents, which he did not refer to or identify in his witness statement, despite his statement of truth. In his oral evidence, he made it clear that he looked at these documents for the purpose of refreshing himself on dates, times and what had happened. This evidence was supported by his sister Ms Jansari, who also referred to having looked through numerous documents and to their both having worked from a “central folder” which had a time-line of everything so that “when we refer to any e-mail or document - - because I update it – that’s where we get the information from.”[37]As a witness, Mr Devani came over as someone who passionately believed that he was entitled to 50% of the shares in the Company and had been wronged by Mr Sharon. He was clearly frustrated by, and angry with, Mr Sharon, and to a certain extent, it was understandable why he might have felt this way, in particular, having regard to the monetary contributions that Mr Sharon claimed that he had made towards the development costs, when Mr Sharon later accepted that many of them had been made for other projects, and the pre-conditions imposed by Mr Sharon to his transferring one third of the shares to Mr Devani and Mr Lalani, which were never agreed to by Mr Devani and Mr Lalani.[38]In light of the above matters, it is difficult to discern which parts of Mr Devani’s evidence represent a genuine recollection on his part of events and what has been re-constructed by him from his reading of the documents, coloured by his strong belief that he and Mr Sharon have made roughly equal monetary contributions to the Company and that he and Mr Sharon should be equal partners with each owning 50% of the issued share capital. I am not prepared to find that Mr Devani has deliberately lied to this Court, as Mr Harman for Mr Sharon invited me to do. However, it seems to me that Mr Devani falls into that category of witnesses who has through the lens of his belief as to what he was entitled to, reconstructed from the documents a version of events, particularly those relating to the original agreement and what happened at the 25 June Meeting, which accords with his own narrative and, as a result, has come genuinely to believe that his reconstruction of those events is a genuine recollection of them. As will be seen below, where there is therefore a dispute regarding the terms of the original JV Agreement and what happened at the 25 June Meeting, I prefer the evidence of Mr Sharon.

Mrs Jansari

[39]In my judgment, the evidence of Mrs Jansari adds nothing to that of Mr Devani. It is clear that on the important issues that I have to decide, she only relies on what her brother is said to have told her and has no actual knowledge herself. Further, whilst her evidence purports to corroborate the evidence of Mr Devani, it does not appear to record her own independent recollection. First, she admitted that she had looked at numerous documents and a central folder with a timeline of everything, which she has not referred to in her witness statement (the witness statement stating that she had only looked at one document) and has refused to disclose documents in her possession to Mr Sharon. Second, she was candid enough in her oral evidence to admit that she did not have a good memory and needed to write things down. Third, she was clearly very loyal and supportive of her brother and genuinely appeared to believe that he had been wronged by Mr Sharon. However, as a result, her evidence was, in my judgment, coloured by her partisanship towards her brother. Finally, it appears that she and Mr Devani worked on their witness statements together. Not only is this apparent from Mrs Jansari’s oral evidence that they were both working from a central folder, but similar mistakes were made in their witness statements. For example, in their witness statements both Mr Devani and Mrs Jansari stated that the 25 June Meeting had taken place on 21 June 2021. In their examinations-in-chief, they then had to correct this date to 25 June 2021, with Mr Devani stating:
“..we - - the date, I believe that we have put down is 21 June and the meeting was 25 June.”
Accordingly, her evidence cannot be regarded as truly corroborative and I attach little, if any, weight to it.

Mr Lalani

[40]As Mr Lalani accepted in his oral evidence, he was an old university friend of Mr Devani and did not like Mr Sharon. He also appears to have wanted to help Mr Devani and to sign up to Mr Devani’s version of events. Mr Harman demonstrated to me that Mr Lalani’s witness statement could not have been all in his own words and appears to have been drafted by Mr Devani’s solicitors by cutting and pasting some passages from the version of the Particulars of Claim in circulation at the time. For example, Mr Lalani’s evidence in his witness statement relating to what is alleged to have been agreed at the 25 June Meeting is almost identical, and uses the same words and phrases, as are set out in paragraph 10 of the Amended Particulars of Claim. Whilst initially in his oral evidence Mr Lalani unconvincingly claimed that the wording in his witness statement had been “refined” by Mr Devani’s solicitors, at the end of his cross-examination, the following exchange occurred:
“Q. So it’s pretty clear what has happened here. Mr Devani, or his solicitors, sent you a statement to sign. You wanted to help him. So you either signed it without really thinking about the detail or you knew it was –wasn’t accurate and signed it any way. That’s what has happened, isn’t it? A. You can say that.”
[41]In light of the above, I attach little weight to Mr Lalani’s witness statement. However, this does not mean that I wholly reject his oral evidence. Whilst he continued to try and defend Mr Devani’s position, towards the end of his cross-examination, he appeared to be less defensive and gave evidence which, in my judgment, more likely than not was nearer the truth of what happened at the 25 June Meeting as I discuss later on in this judgment.

Mr Sharon

[42]Although Mr Sharon’s evidence was not wholly satisfactory, he came across as an honest witness who sought to recall the events as best as he could. Where he could not properly recall an event, he said so and where an email differed from his recollection he said so. He also set out in his witness statement the documents he had used to refresh his memory and candidly accepted that the agreement dated 17 April 2017 made with Mr Glynne may, in fact, have been signed in 2020 and back-dated. I also take into account that whilst Mr Sharon’s English was very good, it is not his first language.[43]Therefore, where there is a difference on the two main issues between the evidence of Mr Devani and his witnesses and Mr Sharon, unless there is a document stating otherwise, I prefer the evidence of Mr Sharon.

The Issues

[44]The issues that the court has to decide are as follows: 44.1. whether or not it was agreed as part of the JV Agreement that each of the JV Partners would contribute one third each towards the purchase price of Hermes House (“the First Issue”); 44.2. whether any agreement as alleged by Mr Devani was concluded at the 25 June Meeting (“the Second Issue”); 44.3. if so, whether it was a binding legal agreement with the consequence that Mr Sharon holds 50 shares in the Company on trust for Mr Devani (“the Third Issue”). The First Issue The evidence of Mr Devani

The First Issue

[45]In his witness statement Mr Devani states that at a meeting held on 8 June 2016 it was verbally agreed between the JV Partners that they would be equal partners in the Company and that they would contribute equally to the purchase price and development of Hermes House. He then states that at some point after that meeting, but prior to exchange on 24 June 2016, Mr Sharon informed him and Mr Lalani that he was in the process of selling one of his buildings and would not be able to contribute his share of the funds to purchase Hermes House at that time and asked Mr Lalani if he would loan him the money until he sold his building, when he would make up his share.[46]He then goes on to say that as a result of this, Mr Lalani suggested that he (Mr Lalani) should invest £1 million for a 50% share in the Company, Mr Devani should invest the sum of £670,000 for a 33% share and Mr Sharon should invest the sum of £300,000, made up of the sum of £100,000 to be paid by Mr Sharon directly and the sum of £200,000 to be loaned to him by Mr Lalani, for a 17% share. Mr Devani says that this was not agreed and that he and Mr Lalani therefore decided to contribute the money equally to purchase Hermes House and that Mr Sharon should contribute his share of the purchase price when he had sold his building. He then says that this was agreed orally with Mr Sharon in about mid-June 2016, when it was also agreed that in return for delaying payment of his share, Mr Sharon agreed to carry out the necessary project management and planning permission work and to his becoming entitled to his 33% share of the profits only once his contributions had equalled those of Mr Devani and Mr Lalani.

The evidence of Mr Sharon

[47]Mr Sharon, in his witness statement, gives a different account of what happened. He says that he and Mr Devani were looking at purchasing Hermes House around the end of 2015 or the beginning of 2016, but that neither of them had the funds at that time to do so. In the case of Mr Sharon, the reason for this was because his funds were tied up in SE20. He and Mr Devani therefore agreed that the only way that Hermes House could be purchased would be if they found an investor to put the money in on the basis that the investor’s investment would be repaid first before the profits were divided between the parties.[48]Mr Sharon then explains that Mr Devani introduced him to Mr Lalani as a potential investor. The introduction took place at a meeting, which was also attended by Stephen Glynne and Mr Glynne’s sons. Mr Glynne had been introduced to Mr Sharon by Mr Devani in about 2010. Mr Sharon says that at the meeting, he explained to Mr Lalani and Mr Devani that Mr Lalani needed to contribute the funds required for the proposed JV venture at Hermes House and that he would do the design work (including the design, planning, legals, structure mechanical and electrical design (subject to external professional approval)) and build work with approved sub-contractors and certifications.[49]He says that it was originally agreed between the JV Partners that Mr Lalani would pay the full cost of Hermes House, Mr Devani would pay his own share of the development costs and that Mr Lalani would pay his and Mr Sharon’s shares of the development costs. However, Mr Lalani subsequently backed out of this agreement during a meeting between the JV Partners at a coffee shop and told them that Mr Sharon would have to pay his own share of the development costs and that Mr Devani would have to pay 50% of the purchase costs, which came as shock to both him and Mr Devani.[50]On 12 June 2016 Mr Sharon sent a schedule (“12 June Schedule”) by email to Mr Lalani and Mr Devani. Mr Sharon’s evidence was that this schedule first set out a theoretical split if the purchase and development costs were split three ways, but at the bottom reflected what had been discussed and originally agreed at the meeting whereby most of the funding for the project would be provided by Mr Lalani. Against “agreed”, Mr Sharon provided that Mr Lalani would fund £1,235,333.33 of the anticipated purchase and development costs of £2 million, that Mr Devani would fund a third of these costs in the sum of £666,666.67 and that he would fund £98,000 of the costs. He says in his witness statement that he also believes that at this stage it had been agreed that 5% interest would be payable on the JV Partners’ respective investments.[51]On 14 June 2016 Mr Lalani sent an email to the JV Partners stating that he could not finance Mr Sharon to the tune of £570,000 with only a 5% return and suggested that his share of the Company should be increased to a 50% share in exchange for a £1 million investment and that Mr Sharon should invest £300,000 of which £200,000 would be loaned by him to Mr Sharon. The proposal made by Mr Lalani was different from what Mr Sharon says the JV Partners had previously discussed and therefore on 15 June 2016 Mr Sharon replied to Mr Lalani’s email stating as follows:
“if I was in your father’s shoes I will do the same I don’t needs to repeat the added value i am bringing The money needs to be paid in stages Within 1 year you have your money back and profit on a nice project This arrangement I have with all my investors (on the 1st project on all other future project it will be subject to each one funds) In any case I’m sure we will find a project in the future that will suit you subject to the same terms”
I don’t needs to repeat the added value i am bringing The money needs to be paid in stages

Within 1 year you have your money back and profit on a nice project

[52]In his witness statement, Mr Sharon states that he wrote this email because he did not want to proceed with the joint venture on Mr Lalani’s terms. Further, he states that even if he had had the funds to fund one third share of the purchase price, he would not have agreed to it, because, first he was bringing his expertise to the project and, second, in relation to any first project with a new partner (as would have been the case with Mr Lalani), whilst he will contribute his expertise to the project, he never contributes towards the purchase price of the property and that this happened in relation to the first project he had done with Mr Devani and Mr Glynne in 2010 in respect of 187 Rotherhithe New Road.[53]Following Mr Sharon’s email, Mr Sharon states that Mr Lalani and Mr Devani agreed to his terms, namely, that Mr Lalani and Mr Devani would share the purchase costs and that the JV Partners would equally share the development costs. He then adds that close to exchange, when the Company was required to pay a 10% deposit, he suggested, and Mr Devani and Mr Lalani agreed, that the Company should instead pay a 50% deposit in exchange for getting the keys to the property and an additional six months to start work prior to completion.[54]Mr Sharon then states that the JV Partners had a meeting at which it was agreed that Mr Lalani would provide the sum of £400,000 on exchange and Mr Devani the sum of £150,000 and that Mr Devani would provide the sum of £400,000 on completion and Mr Lalani the sum of £150,000. Following this meeting, Mr Sharon refers to sending a second excel sheet on 19 June 2016 (“the 19 June Spreadsheet”), which was a cashflow projection both for the purchase of Hermes House and its development. The excel sheet refers to the above arrangement for payment of funds on exchange of contracts and completion, as well as showing the sum total of £210,000 to be paid by Mr Devani and Mr Lalani, and the sum total of £250,000 to be paid by Mr Sharon (up from the sum of £98,000 shown in the 12 June Schedule), for development costs.[55]Mr Sharon therefore denies Mr Devani’s case that it was agreed that he would contribute a third of the purchase price for Hermes House, that, in exchange for delaying his contribution towards the purchase price, it was agreed that he would carry out the project management work up to obtaining planning permission, that he would contribute his share of the purchase price when he was able to and that until he equalised his payments, he would not be entitled to his 33% of the profits.

The submissions made on behalf of Mr Devani

[56]Ms Proferes, counsel for Mr Devani, submitted that I should accept the evidence of Mr Devani and reject that of Mr Sharon for the reasons set out below.[57]First, Mr Sharon’s oral evidence in which he referred to his wanting Mr Lalani to “subsidise” him in relation to the purchase price and his explanation as to why this did not mean that he was liable for part of the purchase price did not make sense.[58]Second, whilst Mr Sharon had asserted that in relation to the first project carried out between himself, Mr Devani and Mr Glynne, it had been agreed that he would not contribute to the purchase price of the property and he did not contribute to it, Mr Sharon clarified in his oral evidence that half of the monies paid by Mr Glynne related to Mr Sharon’s share of the purchase costs. In particular, the Claimant relied upon the following exchange:
“A..Mel put one third of the investment in 187 project, which is London Bridge 19. Steve subsidised my share of the purchase. We equally shared the development costs. And I did the project from start to finish, using my 20-plus years of experience from - - to manage the project from start to finish, and that was my contribution. Q. Well, but you’ve just said that Mr Glynne put in a third of the purchase price on your behalf. So you funded a third of the purchase price using monies paid by Mr Glynne is what I understood you to say. A. I think I was very clear that Mr Glynne put in two thirds of the purchase price, Mel put in one third of the purchase price, and that’s how we went on with the project. Q. I think we’ll need to look at the transcript. I understood you first to say that Mr Glynne put in -he funded your third. So he put in two thirds, but a third of that was on your behalf. A. Of the purchase price? Q. Yes. A. Yes, that’s correct.”
A. Of the purchase price? A. Yes, that’s correct.”

A. Of the purchase price?

[59]Third, Mr Sharon’s attempt to borrow money from Mr Lalani does not make sense if it had always been agreed that he would contribute nothing to the purchase price. The email from Mr Lalani dated 14 June 2026 referred to in paragraph 51 above shows that Mr Lalani would never have agreed to an arrangement whereby Mr Sharon paid nothing for the purchase price, but only contributed his labour. Given Mr Sharon’s own evidence that he would understand why a third party would think it was a bad deal for him to supply nothing but expertise, Mr Sharon’s evidence that his usual arrangement with a new partner was not to contribute to the purchase price of a property makes no sense, although it would make more sense if that partner had already worked with Mr Sharon on a previous occasion.[60]Fourth, Mr Sharon’s email dated 15 June 2021 referred to in paragraph 51 above, which stated that he could repay Mr Lalani in a year, showed that in June 2016 Mr Sharon was anticipating coming into significant funds in 6 or 7 months’ time from the SE20 project. The funds did materialise in March 2017, but Mr Sharon then used them for the Warspite Property. It is therefore inherently likely that Mr Sharon had intended to use the funds from the SE20 project for the purpose of paying his share of the purchase price for Hermes House, but then did not do so because of the funding issues that arose in relation to completion of the purchase of the Warspite Property. Mr Sharon’s oral evidence that he believed that Hermes House could be completed in a year and that this is what he was referring to in his email dated 16 June 2016 when he said that Mr Lalani could have his money back in a year was accordingly entirely implausible.[61]Fifth, the fact that neither Mr Devani nor Mr Lalani pressed Mr Sharon to contribute his share for the purchase price does not mean that this was not agreed. The project was nowhere near complete and the disputes over the accounts and Warspite were more immediate. Further, as the 19 June Spreadsheet was produced by Mr Sharon, it was not surprising that it did not contain details of when Mr Sharon would make repayment.[62]Sixth, the court should reject the submissions made by Mr Harman, counsel for Mr Sharon, relating to: 62.1. the email from Mr Devani dated 1 June 2020 to Mr Lalani, in which he stated in respect of the 19 June Schedule which Mr Sharon had re-sent to him:
“Why would we have agreed to this???”
. Mr Harman argued that this email showed that Mr Devani realised what they had agreed to and was regretting it by this stage; and 62.2. the email from Mr Lalani to Mr Devani dated 1 June 2020 in which he stated “We didn’t agree to it. Show me an email where we said that we guaranteed it.” Mr Harman argued that this email was a suggestion that some kind of email confirmation would be required to hold him and Mr Devani to the agreement, but was not a disavowal of the agreement itself.[63]In submitting that Mr Harman’s arguments about these emails should be rejected, Ms Proferes referred me to Mr Devani’s oral evidence where he stated that these emails were written because his recollection was that neither of them had agreed to the position set out in the 19 June Schedule.[64]Finally, Ms Proferes invited the court to reject Mr Harman’s submissions made in relation to emails setting out what had been agreed at a meeting held on 14 January 2021. Mr Devani and Mr Lalani agreed that the minutes should record, inter alia, as follows:
“It was agreed that Mehul and Hussein would not claim an interest on the money they had put in to buy the building and this would offset the time and effort Amir has put into getting planning and to project management the development.”
In his email dated 18 January 2021 Mr Sharon stated his recollection of the meeting which included the following: “We have agreed that no management fees to me for the duration of the project but at he same time the initial investment sum paid by Hussein and Mel will have no interest on it and will stay at fixed sum”.[65]Ms Proferes stated that the above emails recorded what was discussed at meetings nearly five years after the original JV Agreement, as the parties tried to find a way forward and were not a record of what had been agreed from the outset.[66]With no disrespect to Mr Harman, I do not propose to set out his submissions as they are taken into account in my findings as set out below.

Discussion

[67]I have before me two very different oral accounts of what was agreed between the parties relating to the contributions to be made towards the purchase price for Hermes House. In deciding this issue I bear in mind that the JV Agreement was made over nine years prior to the trial of this matter. In accordance with the principles in Peter Glenn and others v Adam Walker and others [2025] EWHC 1286 (Ch), which are set out above, I have weighed the parties’ respective written and oral evidence against the inferences that may be drawn from the small amount of contemporaneous documentary evidence and the known or probable facts.[68]For the reasons set out below, I reject Mr Devani’s evidence and arguments and find it more likely than not that the agreement reached between the parties was that Mr Sharon would not be required to contribute to the purchase price of Hermes House and that this would be funded by Mr Devani and Mr Lalani in equal shares.[69]First, I accept Mr Sharon’s evidence that where he carries out a project with a new partner, whilst he will contribute his expertise to the project, he never contributes to the purchase price of the property. This statement is supported by: 69.1. Mr Sharon’s email dated 15 June 2016 in which he rejected the offer made in Mr Lalani’s email dated 14 June 2016, which itself had rejected the figures in the 12 June Schedule, although Mr Sharon states that these had been initially agreed. In his email dated 15 June 2016, Mr Sharon, in imperfect English, makes it clear that in a first project with any new partner his main contribution is his expertise, and not his funding, and that if the partners then did further projects together, it would be “subject to each ones funds”. Mr Sharon in his evidence explained that by this he meant that such projects would be funded equally by the partners; 69.2. the evidence of Mr Devani, who when asked about the London Bridge 19 project, which was the first project carried out between Mr Sharon, Mr Devani and Mr Glynne, agreed that the company, through which the project was carried out, was owned in equal shares by the parties, that only he and Mr Glynne contributed to the purchase costs of the property, that this was in exchange for Mr Sharon managing the development and that the development costs were split between them.[70]I also do not accept Ms Proferes’ argument set out in paragraphs 57 and 58 above that Mr Sharon’s use of the term “subsidise” in relation to both his request for funding from Mr Lalani and his evidence relating to Mr Glynne is to be interpreted as meaning that what was agreed was that his share of the purchase price of the relevant property was or was to be loaned to him. Mr Sharon in his oral evidence said that his use of this term meant that he was not himself providing any funds towards the purchase price, but that what would otherwise be his share was being funded as part of the investment by another party. In the case of London Bridge 19, he said that part of Mr Glynne’s investment was to pay two thirds of the purchase price of the property. In relation to Hermes House, his email dated 15 June 2021 showed that he rejected Mr Lalani’s proposal that he should contribute the sum of £300,000 towards the project and Mr Lalani’s offer to loan to him £200,000 of this sum. He said that the agreement ultimately reached was that which is reflected in the 19 June Spreadsheet. I accept Mr Sharon’s evidence. In so doing, I take into account that English is not Mr Sharon’s first language and that it appears that his understanding of the term “subsidise” is different from what the word actually means.[71]Second, emails sent on 17 June 2016 show that by that date it had been agreed that 50% of the purchase price was going to be paid on exchange and that this was going to be provided by Mr Lalani and Mr Devani. The subsequent 19 June Spreadsheet shows that Mr Devani and Mr Lalani were to finance in equal shares the cost of Hermes House and that, save for the additional sum of £40,000 to be paid by Mr Sharon, the JV Partners were to share equally in the anticipated development costs. The 19 June Spreadsheet therefore supports Mr Sharon’s case as to what was agreed. There are no emails at this time from either Mr Devani and Mr Lalani disputing the 19 June Schedule. There are also no emails or other documents between the parties which seek to record or assert that of the payments made by Mr Devani and Mr Lalani for the purchase of Hermes House, the sum total of £366,666.66 (or £183,333.33 each) was a loan from them to Mr Sharon. This is to be contrasted with the position taken in respect of the Warspite Deposit where the parties’ agreement was set out in the 4 May Agreement.[72]Third, both Mr Devani and Mr Lalani paid the purchase price for Hermes House. At no time, however, did they seek repayment of what Mr Devani asserts were loans by them to Mr Sharon; nor, it would appear, did Mr Devani seek to assert that the sum of £366,666.66 was a loan to Mr Sharon until 2022. For example, when Mr Goldstein sent an email to the JV Partners stating that Mr Devani and Mr Lalani had each loaned to the Company the sum of £553,000 and that Mr Lalani had agreed to reimburse Mr Devani and Mr Sharon the sum of £85,000 each in respect of the lost Warspite Deposit, Mr Devani in an email dated 16 February 2020 responded by asking Mr Goldstein to provide a breakdown of all the money they had put into Hermes House and then referred to Mr Sharon owing him the sum of £10,000 from a previous project. The fact that no reference is made in this email or, indeed, any other email sent by or on behalf of either Mr Devani or Mr Lalani prior to 2022 to any sums allegedly owed to them by Mr Sharon in respect of his share of the purchase price, is both remarkable and telling, particularly, in light of the fact that:(i) Mr Devani thought fit to mention in his email the relatively small sum that he believed was owed to him by Mr Sharon at that time; and(ii) Mr Devani and Mr Lalani having both chased Mr Sharon and argued with him for a number of years over issues relating to comparatively small sums claimed by Mr Sharon to have been contributed by him towards the development costs.[73]Fourth, Mr Lalani in his evidence did not support Mr Devani’s case and assert that it had been agreed that each JV Partner would contribute one third towards the purchase price and that he and Mr Devani had loaned to Mr Sharon a sum equal to his one third share. Indeed, if, as alleged by Mr Devani, it had been agreed that payment by Mr Lalani of the sum of £183,333.33 towards the purchase price had been a loan by Mr Lalani to Mr Sharon, it is remarkable that Mr Lalani did not seek to set-off this sum against the sum of £85,000 claimed by Mr Sharon in respect of his contribution to the Warspite Deposit and instead agreed to pay Mr Sharon the full amount of this sum under the 4 May Agreement.[74]Fifth, there are inconsistencies in Mr Devani’s version of events. In his Re-Amended Particulars of Claim, Mr Devani claims that the oral agreement that the JV Partners would share equally in funding both the purchase price and development costs of Hermes House was agreed in June 2016 and that it is evidenced by an email exchange between the JV Partners and Mr Sharon’s accountant, Charles Goldstein of Brindley Goldstein Ltd between 25 June 2016 and 2 July 2016, although those emails merely confirm that the parties had agreed to increase the share capital of the Company to 300 shares to be held equally between the JV Partners and that Mr Devani through his company, Pangbourne Investments Limited, and Mr Lalani were going to provide the funds to purchase Hermes House.[75]The Re-Amended Particulars of Claim then state that prior to completion on 15 December 2016 Mr Sharon informed Mr Devani and Mr Lalani that due to cashflow issues he could not fund his share of one third of the purchase price and it was therefore agreed that Mr Devani and Mr Lalani would fund the purchase price in equal shares with Mr Sharon paying his one third share of the price when he was able to do so and in exchange for his carrying out the necessary project management work.[76]This is to be contrasted with Mr Devani’s witness statement in which he claims that the oral agreement referred to above was made on 8 June 2016 and that prior to exchange of contracts on 24 June 2016 Mr Sharon told him and Mr Lalani that he was in the process of selling one of his buildings and would not be able to contribute his one third share at the time. It is alleged that he therefore asked Mr Lalani to loan him the monies until he had sold his building and that he would then make up his share at a later stage. It was in this context that Mr Devani effectively says that:(i) the offer in Mr Lalani’s email of 14 June 2016 was made, but rejected;(ii) Mr Lalani and Mr Devani agreed that the two of them would fund the purchase price equally; and(iii) in a telephone conversation in mid-June 2016 Mr Sharon also agreed to their doing so on the terms alleged to have been agreed as set out earlier in this judgment.[77]In his oral evidence, Mr Devani admitted that he did not actually recollect that the JV Agreement had been made on 8 June 2016 and that this date had come from an alleged document. The document itself, however, was not in the court bundle and had not been referred to in Mr Devani’s witness statement. Although not entirely clear, his oral evidence also appeared to suggest that without referring to the documents, he, in fact, had no personal recollection of the events that occurred nine years ago. This appears in particular from the following parts of his evidence:
“A. You’ve asked me to refresh myself without looking at any documents. You’ve asked me a question, sir, about what happened nine years ago, at a specific date [i.e. 8 June 2016] – sorry, no, without any reference to looking at anything. I don’t remember what happened that many years ago, nine years ago….. Then with reference to the documents listed as being the documents Mr Devani looked at to refresh his memory pursuant to paragraph 3.2 of PD 57AC on Trial Witness Statements in the Business and Property Courts: “Q. So it is not actually the list of documents that is, you looked at to prepare the witness statement? There are more. A. When we were preparing the witness statement, I’m sure there were lots of documents we looked at, just to refresh on dates, times, what happened, when it happened.”
[78]In light of the above, this court cannot be certain whether any of the evidence given by Mr Devani relating to what was agreed in respect of the funding for the purchase of Hermes House represents Mr Devani’s genuine recollection of the events or is a reconstruction by him of events from his interpretation of the contemporaneous documents. Indeed, his evidence referred to in paragraph 76 above may well be his reconstruction of events following his having seen, inter alia, the email dated 14 June 2016 from Mr Lalani and his own email to Mr Lalani dated 15 January 2021.[79]Seventh, I also reject Mr Devani’s evidence on this issue for the following additional reasons: 79.1. the evidence of Mr Devani appears to be that before the agreement referred to in paragraph 44 above was made, nothing was discussed or agreed concerning Mr Sharon contributing his expertise to the project and that it was only as part of that agreement, that Mr. Sharon agreed to carry out the necessary project management work and obtain planning permission. However, this evidence does not accord with Mr Sharon’s email dated 15 June 2016 where he makes it clear that in exchange for Mr Lalani’s financial contributions to the project as set out in his 12 June Schedule, he would be bringing his expertise to the project, which he describes as “the added value I would be bringing”. I further reject Ms Proferes’ argument that the reference in this email to Mr Lalani being repaid his money within a year with a profit on what is described as “a nice project”, is a reference to when Mr Sharon would be able to repay any loan made to him by Mr Lalani. In my judgment, its more natural reading is that it reflects a belief by Mr Sharon that the Hermes House project could be completed within a year and that Mr Lalani’s investment and any profit could therefore be repaid by the Company within that time. This is also what Mr Sharon said he meant by the email and I accept that evidence; 79.2. I further find it implausible that Mr Sharon would have agreed to fund one third of the purchase price, knowing that he had no funds to do so, and then only a few days later to say that he was not able to provide the funds and needed to sell a building.[80]Eighth, I accept that the email dated 1 June 2020 from Mr Devani to Mr Lalani and the email of the same date from Mr Lalani to Mr Devani appear to show that, after four years and disagreements between the parties resulting in the deterioration of their relationship, neither Mr Devani nor Mr Lalani appears to have any had any recollection of the 19 June Spreadsheet. However, if the emails are looked at in the context in which they were sent, it will be seen from the earlier emails on that day that Mr Sharon was asking Mr Devani and Mr Lalani to provide further funds towards the development of Hermes House. When Mr Devani said that he did not understand why Mr Sharon was asking him to provide these further funds, Mr Sharon in his email sent at 16:16 on 1 June 2020 responded by stating that they had agreed to fund the planning, had guaranteed the payments via email and were now backing out of the agreement made. He then said that he had paid a total of £1,600 and requested that they both made a payment of an equal amount. In this context, he also forwarded to them his email dated 19 June 2016 which attached the 19 June Spreadsheet, and which stated that he did not think that they would need £100,000 every month, although this sum should be available.[81]It was in the context of a request for payment of further development expenses and being shown the 19 June Spreadsheet which referred to each party contributing the sum of £30,000 each month that it appears that the emails of 1 June 2020 passed between Mr Devani and Mr Lalani. It is not surprising that they state that they did not agree to pay the sum of £30,000 a month as all parties are agreed that the agreement reached was that they would each pay one third of the development expenses, not that they would pay these specific sums each month. However, no issue relating to purchase costs or to sums said to be owed by Mr Sharon to Mr Devani and Mr Lalani was itself raised.[82]Finally, as regards the email communications dated 14, 15 and 18 January 2021 which sought to record what was agreed at the meeting between the JV Partners on 14 January 2021 regarding how they would move forward with the Hermes House project: 82.1. Mr Lalani in his email of 14 January 2021 to Mr Devani did not record any agreement or discussion between the parties about Mr Sharon having previously agreed or agreeing at the meeting to fund a third of the purchase price of Hermes House; 82.2. Mr Devani responded to this email by stating that the phrase in the minutes that “We would all need to contribute equally towards the build cost” should be changed to “the total sum of money for purchase & development is to be shared equally between the 3 of us”; 82.3. Mr Lalani then added this to his email and on 15 January 2021 sent his record of the meeting to both Mr Sharon and Mr Devani; 82.4. on 18 January 2021 Mr Sharon sent what was his recollection of the meeting in an email dated 18 January 2021. This email referred only to the parties’ agreement to share the development costs and further stated that the JV Partners needed to speak again and discuss the issues point by point; 82.5. on 21 January 2021 the JV Partners had a further meeting by Zoom. The record of what was agreed at the meeting is set out in Mr Sharon’s email dated 25 January 2021, which neither Mr Devani nor Mr Lalani disputed. That email showed that it was agreed that Mr Sharon would only have to contribute one third of the development costs. Mr Devani therefore appears to have backed-down from his assertion that it was agreed at the 14 January 2021 meeting that Mr Sharon should also share equally in the purchase costs.

The Second Issue

[83]I now turn to whether or not an agreement was made at the 25 June Meeting that Mr Devani would become a 50% shareholder in the Company. The evidence relating to the 25 June Meeting Mr Devani’s evidence

The evidence relating to the 25 June Meeting

[84]In his oral evidence Mr Devani stated that Mr Sharon had told him many times since 2020 or 2021 that he could no longer work with Mr Lalani, that Mr Lalani should leave and that he and Mr Devani could then be 50/50 partners. Mr Sharon denies ever having said to Mr Devani that if Mr Lalani went they would be partners on a 50/50 basis.[85]As an illustration of the above, Mr Devani referred to a meeting that took place on 16 February 2020 between himself, Mr Sharon, Mr Lalani and Mr Goldstein, although the meeting was, in fact, on 12 February 2020. Mr Devani said that by this time, there was a lot of animosity between Mr Sharon and Mr Lalani because Mr Lalani wanted proof from the accountant as to what happened to the Warspite Deposit and his solicitors had sent a letter to Mr Sharon claiming that Mr Lalani was not, or was no longer, liable to pay the sum of £85,000 to Mr Sharon. In his oral evidence, Mr Devani gave the following account of the meeting:
“At that meeting it was agreed that we would get planning permission and then either sell the project and all walk away or buy each other out. I recall Mr Sharon telling me at the meeting that as he was having difficulty with Mr Lalani, he wanted Mr Lalani to exit the project as he (Mr Sharon) and I would work much better as equal partners on a 50-50 basis”
[86]In his witness statement Mr Sharon accepted that a meeting took place on 12 February 2020 between the JV Partners and Mr Goldstein and stated that he believed that they spoke about a shareholders’ agreement. He makes no reference to any discussion having taken place between him and Mr Devani as alleged by Mr Devani in his oral evidence.[87]Following the meeting, on 16 February 2020 Mr Goldstein sent an email to the JV Partners recording what had taken place. Towards the end of the email Mr Goldstein stated as follows:
“Your latest application will be heard by the planning committee at their meeting in February or March. After that meeting you will obtain a valuation of the property with the planning permission held at that time and then either sell the property or one or two of you will buy out the other person/person and then proceed with the development. I think that this would be best and that it would not be a good idea to proceed with the development with all three of you due to the problems that currently exist between Amir and Hussein.”
[88]Disputes between the parties continued after the meeting, in particular in relation to the accounts, the transfer of shares by Mr Sharon and, in the case of Mr Lalani, the issue also of what had happened to the Warspite Deposit.[89]On 11 June 2021 a further meeting was held between the JV Partners. At the request of Mr Sharon, and agreed to by Mr Devani, it was held on a “without prejudice basis”. Both Mr Devani and Mr Sharon agree that at this meeting it was agreed that the sum of £46,000 that Mr Sharon was claiming he had paid for development costs should be valued at £30,000 in the accounts. However, Mr Devani’s evidence was that he did not believe that a single penny had, in fact, been spent by Mr Sharon and admitted that the agreement by him to accept the sum of £30,000 was not an amicable one.[90]On 14 June 2021 Mr Sharon sent an email to Mr Goldstein, copied to Mr Devani and Mr Lalani, with a revised account showing his contribution to the works on site as being £30,000 as agreed at the meeting on 11 June 2021.[91]On 25 June 2021 a further meeting was held between the JV Partners (both Mr Devani and Mrs Jansari assert in their witness statements that the meeting was held on 21 July 2021, although they accepted that this date was wrong). The evidence of both Mr Devani and Mr Sharon was that it was agreed that the meeting was to be held on a without prejudice basis. The account of what happened at this meeting is, however, disputed.[92]In his witness statement, Mr Devani states that at first the meeting was amicable, but then became very heated between Mr Sharon and Mr Lalani. He goes on to state that an agreement was, however, reached that Mr Sharon would pay back Mr Lalani the money that he had invested “so that it would be equal to my investment in the company” and then he and Mr Sharon would continue with the project “on an equal basis each with a 50% shareholding”. He later states that it was agreed at the meeting that Mr Sharon would pay Mr Lalani the “the agreed settlement of £565,000”.[93]Mr Devani also states that he queried his £85,000 relating to Warspite which was in the Company’s accounts and that Mr Sharon told him that he should look at the bigger picture, forgo that money as he would have 50% of the Company and that he would agree to give Mr Devani £20,000 at the end of the project. He then continues in his witness statement:
“In order for Mr Sharon to equal the investment that I had put in it was agreed that he would pay Mr Lalani the agreed settlement of £565,000, which, with the £13,600 took his contribution to £578,600. By excluding my £85,000 from Warspite but paying me £20,000 at the end of the project, our investments would then roughly be the same.”
[94]In his oral evidence, Mr Devani described what happened in the following way:
“…….. Hussein’s intention to come into the meeting was that, number 1, he wanted to sort out his Warspite issue with Hussein. And number 2, he was ready to exit. For Mr Sharon, Amir, it was exactly the same thing: sort out the Warspite issue, because there’s litigation going on now; and Mr Sharon told me, “I just want an end to this”
. And, with Hussein exiting, “it’s a great ….it’s a very good thing. For me, how I saw it, because I was the one in the middle, when I knew Hussein wanted to leave….So….this meeting happened. It was very clear that …..Hussein asked Amir, “Can” - - you know, “We’ve spoken about me exiting. I’d like some interest on the money”. Amir said, “I don’t know if I can give you interest”, he said, “What about Warspite?” ….they agreed they would forgo his …£85,000 claim that Amir had against Hussein……. …I asked, “What about my £85,000….. Hussein in front of …..Amir, in front of Hussein said, “Mel, look at the bigger picture, you are now getting. If you forgo your 85, that’s Hussein done and him exiting. We can now move on. And look at the bigger picture. You are now getting 50% of the company”. So…for that 17%, I’ve paid £85,000…. Hussein agreed to exit……and Amir agreed to give him back what he had put in, which I believe is around £565,000. So Hussein is now exiting with £565,000; and he does not have to pay myself or Amir £85,000 Warspite money, which is currently sitting in the Hermes bank account. Q…….you also say that Mr Sharon was going to pay you £20,000? …….. Q. So you’re saying …..Mr Sharon agreed to you paying £65,000- - A. Yes. Q. - - for 17% of the company. A That is correct.” Q…….you also say that Mr Sharon was going to pay you £20,000? Q. So you’re saying …..Mr Sharon agreed to you paying £65,000- - A That is correct.”

Q. So you’re saying …..Mr Sharon agreed to you paying £65,000- -

[95]He adds in his witness statement: “My impression at the time was that Mr Sharon was relieved that an agreement in principle had been reached and Mr Lalani was “going to be out the picture”, especially as Mr Lalani was not going to bring a claim against him regarding the Warspite deposit”.[96]According to Mr Devani, Mr Lalani then left the meeting and he and Mr Sharon discussed how things would work going forward. His evidence was that they agreed that they would enter into a shareholders’ agreement once Mr Lalani had settled with Mr Sharon and the shares had been transferred to Mr Sharon and that he anticipated that his 50% shareholding would be transferred to him as soon as Mr Sharon and Mr Lalani had entered into their settlement.[97]Mr Devani states that he then told his sister what had had happened as she had been sitting outside and had heard some, but not all, of the conversation.

Mr Lalani’s evidence

[98]In his witness statement Mr Lalani confirms that he was present at the meeting held on 25 June 2021. He says that Mrs Jansari was also in the office and came in and out of the meeting room a few times, but did not participate in the meeting. The purpose of the meeting, he says, was to discuss the Hermes House development, his withdrawal from the project and the issues that had arisen between himself and Mr Sharon regarding Warspite.[99]He then states that during the meeting it was agreed that it would be best for Mr Devani and Mr Sharon to continue the development without him and that two people working together was better than three. Accordingly, it was agreed that: 99.1. Mr Sharon would pay him the sum of approximately £565,000 to reflect the amount he had invested into the Hermes House Development and that by paying that sum Mr Sharon would have invested the same (or close to the same) amount that Mr Devani had invested; 99.2. in return, Mr Lalani agreed to exit the Company and relinquish any claim he might have to the issued share capital of the Company; 99.3. Mr Devani and Mr Sharon would continue the Hermes House development as equal partners (i.e. each owning 50% of the issued share capital in the Company); 99.4. Mr Sharon would relinquish his entitlement to repayment of the sum of £85,000 in relation to the Warspite Deposit.[100]As a result of Mr Devani raising his contribution of £85,000 to the Warspite Deposit, it was further agreed between Mr Devani and Mr Sharon that: 100.1. Mr Devani would forgo his loss and that on the conclusion of the Hermes House development, Mr Sharon would pay Mr Devani the sum of 20,000, which would equalise the contributions of Mr Sharon and Mr Devani to the development; and 100.2. following Mr Lalani’s exit from the Company, Mr Sharon would procure the transfer of 50% of the issued share capital in the Company to Mr Devani and register him as a shareholder.[101]Mr Lalani’s oral evidence differed to a certain extent from his written evidence. In particular, I refer to the following parts of that evidence:
“A. …And then Mehul goes, “What about my 85?”
And I distinctly remember what Amir said; he goes, “look, look at the bigger picture, Mehul. Once Hussein leaves we can then do this together as partners and we can then move on……………………. ………………………………………… “Q. You asked if Mr Sharon would be interested in buying you out, didn’t you? A. No, I said that I wanted to exit the company and would he - - would I get my - -can I get my money paid back to me. Q. Okay. And Mr Sharon said that he’d think about it, didn’t he? A. Yes. Q. And you and Mr Sharon then agreed to continue without prejudice discussions via lawyers, didn’t you? A. Yes. Q. And there was no discussion about Mr Devani getting 50% of the shares when you were present, was there? A. At that meeting, when he said, “Look at the bigger picture” and then he said words to the effect of - - you know, because he had always gone on about “two is better than three”, and that, you know, him and Mehul should work together, that he didn’t like me. You know, we had a lot of sour grapes in the past. And then he goes - - and then he said, “Look at the bigger picture. Once Hussein is out, you know, you know, we are partners” or “equal partners” or something to that effect; and that they could carry on without me. And he was going on about how they could work together and he couldn’t work with me. Q. …..I also say there was no discussion about Warspite or £20,000 when you were there either. A. So, then - - yes, so then Amir said - - what was it? He said to - - he said to Mehul - - that was it, he goes, “Take a haircut of like £50k or something; and then, at the end of the project I’ll give you your - - I give you your £20k to make it up”. Q. Okay. And Mr Sharon said that he’d think about it, didn’t he?

Mrs Jansari

[102]In her witness statement, Mrs Jansari states that during the meeting she sat at a desk outside the meeting room and that, although it started off calmly, subsequently voices were raised with the conversations focussing on Warspite and Mr Sharon’s not wanting to work anymore with Mr Lalani.[103]She then says that after the meeting, her brother told her what had been agreed, namely that Mr Sharon would pay the full amount that Mr Lalani had invested in Hermes House to date and that in return, Mr Lalani would release his interest in Hermes House and in Warspite. She then states that the effect of this was that Mr Sharon’s contribution would be “approximately close to” Mr Devani’s contribution. She also says that it was agreed that going forward, Mr Devani and Mr Sharon would be equal parters and that once the payments and paperwork had been finalised, Mr Sharon would confirm this and transfer 50% of the shares in the Company to Mr Devani.[104]She then says that she was told by Mr Devani that after Mr Lalani had left the meeting he and Mr Sharon discussed, among other things, the Warspite Deposit and that Mr Sharon told Mr Devani that he should “look at the bigger picture”, forgo the £85,000 Mr Lalani owed him as they could now go ahead and develop the project, and that, in return, Mr Sharon would compensate Mr Devani by paying him the sum of £20,000 at the end of the project.

Mr Sharon

[105]Mr Sharon’s account of the 25 June Meeting is very different from the accounts given by Mr Devani, Mr Lalani and Mrs Jansari.[106]He says that prior to the meeting, but after the meeting held on 11 June 2021, he had a conversation with Mr Devani during which Mr Devani said that Mr Lalani wanted to meet with both of them and that he thought it might be about the court case that Mr Lalani had threatened to bring against him. He says that during this conversation Mr Devani made it clear that he could not support Mr Sharon if the court case was brought because his family and Mr Lalani’s were very close. He adds that although they did not discuss the £85,000 owed by Mr Lalani to Mr Devani, he believed that Mr Devani might have already been paid this sum because he recalled Mr Devani telling him (he believed in 2020) that Mr Lalani had promised to pay him privately.[107]Mr Sharon states that as he did not know what they were going to discuss at the meeting, he told Mr Devani that, unless he knew in advance what Mr Devani and Mr Lalani wanted to discuss, the meeting would be without prejudice. As he was not told this, in a What’s App message sent on 25 June 2021 Mr Sharon said that the meeting was to be “without prejudice”.[108]Mr Sharon’s account of the 25 June Meeting is that Mr Lalani told him and Mr Devani that he was considering exiting the Hermes House project and asked Mr Sharon whether he would be interested in purchasing his shares. He said that he thinks that Mr Lalani said that if he decided to sell his shares, he was expecting to get back his investment plus interest on it. Mr Sharon understood this to mean that Mr Lalani wanted to be paid an amount equal to the funds that he had invested into Hermes House.[109]Mr Sharon then says that without thinking about the cost and especially how he would raise the funds, he said yes, that he would consider it, but that he did not think that he could pay more than what Mr Lalani had put into the project and that he could not consider paying him any interest. It was then at this point that Mr Lalani asked about the sum of £85,000, which he owed Mr Sharon in respect of Warspite. Mr Sharon understood that what he wanted was to remove this sum from the equation so that he would not have to pay it. Mr Sharon said that he would think about it and what could be done, but thought to himself that maybe doing that would compensate Mr Lalani for some of the interest he was asking for, and therefore wanted to think about it after the meeting because he had not come to the meeting prepared and Mr Lalani had not confirmed that he definitely wanted to sell his share. He says that he also told Mr Lalani that even if they reached an agreement, they needed to deal with all claims against him concerning Warspite and the £85,000 and that that needed to be part of the agreement.[110]He said that they did not put the numbers together, that Mr Lalani was not sure how much he had invested and although Mr Sharon knew that he had put in £550,000, none of them knew what the actual amount was, save for the £85,000. They also did not know what sum for interest Mr Lalani was asking for. In light of this, they agreed a timeframe for completing the accounts, as there were one or two invoices outstanding, which needed to be finalised.[111]Mr Sharon says that the meeting was not long, lasting about 30 minutes when all three of them were there and that it was very positive with Mr Devani not saying anything, save that Mr Lalani and Mr Sharon should work it out between themselves. He adds that it was not clear to him at that time whether agreement between him and Mr Lalani would be reached.[112]He agrees with Mr Devani that Mr Lalani left the meeting and that he and Mr Devani then had a separate conversation. He says that he recalls Mr Devani asking him if he would have the option to buy the difference so that they had “equal shares” if the deal with Mr Lalani went ahead. Initially, he recalled Mr Devani asking if could buy 50%, but believes that he said “equal shares” or something like that. Mr Sharon says that he told Mr Devani that that was an option, but they did not speak about numbers or the then current project values. He then states that he thinks that Mr Devani told him to consider and to try and do the deal with Mr Lalani and that he spoke about the costs and duration of the project. They also discussed another project that Mr Devani was doing. He believes that this part of the meeting lasted between 10 and 15 Minutes.[113]Mr Sharon denies that: 113.1. Mrs Jansari attended any part of the meeting; 113.2. at the meeting Mr Devani raised the sum of £85,000 owed to him by Mr Lalani; or 113.3. he promised to pay Mr Devani the sum of £20,000 to encourage him to agree to Mr Lalani exiting the project. However, he does say that he thinks that Mr Devani said something to him about the sum of £20,000 and that he wanted to allocate some sum to himself and Mr Sharon in the accounts, which he understood was only to deal with the situation if one of them were to leave the Company in the future. However, they did not discuss this in detail and therefore he did not actually know why Mr Devani wanted this.

The evidence of what happened following the 25 June Meeting

[114]It appears to be common ground that after the 25 June Meeting there were no further discussions between all three of the JV Partners.[115]Following the meeting, Mr Sharon made the following entry in his diary for 1 July 2021:
“NW2 Cost Breakdown for Hussein out For AS for Agreement • Buying HL Part of investment and 1/3 future share • The sum of WS Ltd will be offset against interest% on HH Ltd • HL will Have No Demands and any control of HHL and WWltd • H’s payment to MD Has Nothing to Do with me • Buying H’s investment under company name (New) “Six point Ltd”” • Buying HL Part of investment and 1/3 future share • The sum of WS Ltd will be offset against interest% on HH Ltd • HL will Have No Demands and any control of HHL and WWltd • H’s payment to MD Has Nothing to Do with me • Buying H’s investment under company name (New) “Six point Ltd””
[116]In his oral evidence Mr Sharon explained that he wrote this list for himself after the meeting, because these were the matters that he wanted to discuss with his solicitor. He made it clear that these matters were not a minute of what had been discussed at the 25 June Meeting. Counsel for Mr Devani said that she was not proposing that they were.[117]The evidence of Mr Sharon, which is supported by the email correspondence, is that subsequently attempts were made to agree the amount of the investments made by Mr Lalani and Mr Devani into the Company and that, after some corrections, they were agreed.[118]The relevant email correspondence is as follows: 118.1. on 29 July 2021 Mr Sharon sent an email to Mr Devani which sought to set out the amounts invested by Mr Devani into the Company, stating they amounted in total to the sum of £572,300. The figures did not include Mr Devani’s contribution of £85,000 towards the Warspite Deposit nor the sum of £20,000, which Mr Devani stated Mr Sharon had agreed to pay him at the end of the project; 118.2. on 30 July 2021 Mr Devani sent Mr Sharon Mrs Jansari’s comments on the account; 118.3. on 2 August 2021 Mr Sharon sent a further email to Mr Devani stating that Mr Devani had paid sums totalling £3,348 on behalf of Mr Lalani and asked him to confirm that the account sent on 29 July 2021 was correct or to get Mr Lalani to confirm that the payments of £3,348 should be allocated to Mr Devani and deducted from his account; 118.4. on the same day, Mr Devani confirmed that sums totalling £2,424 had been paid by him on behalf of Mr Lalani, that of the total of £3,348 he had himself paid £924 and that otherwise the account was correct; 118.5. following this, on 5 August 2021 Mr Sharon sent to Mr Lalani a without prejudice email in which he made certain corrections to Mr Lalani’s account, the new figure showing that Mr Lalani had invested the sum of £565,390.67 into the Company, and asked Mr Lalani to confirm that the account was correct; 118.6. on 9 August 2021 Mr Lalani stated in an email to Mr Sharon that he thought that they were nearly there with the accounts, that he had been speaking to Mr Devani over the weekend who had agreed that they should cross-reference their accounts as they had paid sums on each other’s behalves and asked Mr Sharon to forward to him Mr Devani’s account; 118.7. on the same day, in a without prejudice email, Mr Sharon forwarded details of both Mr Devani’s and Mr Lalani’s accounts with the Company; 118.8. in response, on 18 August 2021, Mr Lalani sent to Mr Sharon the following email:
“I am in agreement with these figures and ready to proceed. Pls advise when you are on the agreement? I want to close off asap pls”
.

Pls advise when you are on the agreement?

[119]Mr Sharon states that the issue of the agreement was passed by both him and Mr Lalani to their respective solicitors, although he recalls talking to Mr Lalani on the telephone about some payment terms that he needed to agree with him.[120]On 24 August 2021: 120.1. Mr Sharon asked Mr Devani to confirm the figures for his account, which he did later that day; 120.2. Mr Sharon made the following diary entry: “HL v AS”. He says in his evidence that this was a reference to the agreement between himself and Mr Lalani.[121]On 19 October 2021 Mr Devani sent the following email to Mr Sharon:
“Hope all is well. How are things progressing with you and Hussein? Amir – I wanted to know when you will be transferring 50% of the shares for Hermes House to me as agreed. I would also like our finalise the accounts so we can get things moving forward. Kindly let me know when you are available.”
How are things progressing with you and Hussein? Kindly let me know when you are available.”

How are things progressing with you and Hussein?

[122]On 21 October 2021 Mr Sharon replied by email as follows:
“It is not finalised yet with Hussein but we are getting there, as agreed once it is done we can progress and finalise the account between us and agree term of moving on. I’ll call you later today to discuss.”
I’ll call you later today to discuss.”[123]When questioned about the email of 19 October 2021 and his response, Mr Sharon stated:
“…We agreed terms to move on and finalise the account. The account is not just the two items are there. It’s need to be account that should be between us, should be a shareholder agreement. And don’t forget that in 19 October I have only one third of the shares. When he requests 50% of the shares I hold only 33% of the shares …………………….. MS PROFERES: 3346. Yes, he’s asking about when you will be transferring them. A. He knows that the agreement wasn’t settled then. He knows. He knows 100% definitely he knows. And in asked me October about 50% to be transferred when there are buffers that need to be achieved before, which is the shareholder agreement, there is agreement with Hussein, there is agreement between us. It’s all preliminary. There was never agreed terms in 10 minutes that he will get his 50% with no cost involved, ignoring my benefit to the project at that time, ignoring the fact that I bought one third of Hussein, first of all, or that acknowledge that I bought one third of Hussein. I don’t know how to look at that mail when I’m thinking now. Is he acknowledge that I bought one third of Hussein or he is acknowledge that I bought only 17% of Hussein? So that email wasn’t really clear. But my answer to him was very clear: we need to finalise things between us, we need to agree terms, we need to finalise the account and we need a shareholders’ agreement. I think that summarised what the agreement or the discussion briefly was, preliminary, on that date 25 June 2021.”
It’s all preliminary. There was never agreed terms in 10 minutes that he will get his 50% with no cost involved, ignoring my benefit to the project at that time, ignoring the fact that I bought one third of Hussein, first of all, or that acknowledge that I bought one third of Hussein. I don’t know how to look at that mail when I’m thinking now. Is he acknowledge that I bought one third of Hussein or he is acknowledge that I bought only 17% of Hussein? So that email wasn’t really clear. But my answer to him was very clear: we need to finalise things between us, we need to agree terms, we need to finalise the account and we need a shareholders’ agreement. I think that summarised what the agreement or the discussion briefly was, preliminary, on that date 25 June 2021.”[124]Mr Devani did not respond to Mr Sharon’s email of 21 October 2021. In his oral evidence, Mr Devani stated that he viewed the response as a satisfactory response and that his father had palliative dementia at the time. He explained that after agreement had been reached in June 2021 he moved on to care for his father, which was why he did not see Mr Sharon for a while.[125]On 12 December 2021, being about five and a half months after the 25 June Meeting and about four months after Mr Lalani and Mr Devani had agreed the amounts of their investments, the Settlement Deedwas entered into between Mr Lalani, Mr Sharon and the Company. The Settlement Deed recited, inter alia, that: 125.1. Mr Lalani had invested the sum of £565,390.67 into the Company and was a creditor of the Company in that amount (the ”Hermes House Debt”) and Mr Devani, who was not a party to the Deed, had contributed the sum of £566,557.53; 125.2. the Warspite Dispute had arisen between Mr Lalani and Mr Sharon; 125.3. Mr Sharon and Mr Lalani had settled their differences and agreed terms for the full and final settlement of the Warspite Dispute.[126]The terms of the Settlement Deed included the following: 126.1. that Mr Sharon would pay Mr Lalani the sum of £565,390.67 as to £150,000 on or before 7 January 2022 and as to the balance on or before 24 March 2022; 126.2. that, in consideration of the payment of £565,390.67 being made, Mr Lalani surrendered and released and would no longer have any legal, equitable, beneficial or other interest in Hermes House and/or the Hermes House Debt would be considered satisfied in full and Mr Lalani surrendered and released and would no longer have any legal, equitable, beneficial or other interest in the Warspite Property; and 126.3. that, notwithstanding clause ii of the agreement made between the parties on the 4 May 2017, upon payment of the sum of £565,390.67, Mr Lalani would have no obligation to pay Mr Sharon the sum of £85,000 which Mr Sharon contributed towards the purchase of the Warspite Property and this sum would be treated as interest on the Hermes House Debt paid by Mr Sharon to Mr Lalani on the date the sum of £565,390.67 was paid.[127]On 14 January 2022, Mr Sharon wrote in his diary “Mel Agreement (Draft) Get Quote from Jonathan”. In his statement, Mr Sharon said that he wrote this because the agreement with Mr Lalani had been signed and he was thinking of an agreement between himself and Mr Devani to move the project on. Although in his statement he states that this was either a shareholders’ agreement or maybe a potential agreement to buy Mr Devani out, in his oral evidence he stated that this was a reference to a shareholders’ agreement.[128]On 19 January 2022 Mr Sharon made the following entry in his diary:
“NW2 Account to Charles to confirm. Account to date. Mel 1/3 payment. Exit offer and costs £450k x 3 years @ 5% + 20k less costs to date AS v MD and legal cost of HL (1/2 of my costs).”

Exit offer and costs £450k x 3 years @ 5%

[129]In his witness statement he states that he wrote down “Mel 1/3 payment” because Mr Devani had not paid his one third of the outstanding development costs and that he wrote one third and not one half because he considered that Mr Devani owned a third of the shares. He says that he also wrote down some draft calculations for an exit offer, but could not recall the detail of this, but knew that it related to Mr Devani and Hermes House. In his oral evidence, it was apparent that he did not know why he had written down the figure of “450k”. He said that the figure did not make “any sense”.[130]On 24 January 2022 and 9 February 2022 emails were sent to Mr Sharon from LSA Accounts (presumably, Mr Horne) with calculations of what it was believed Mr Devani owed in his respect of his one third share for the development costs. Attached to the email dated 9 February 2022 was a spreadsheet prepared, it would appear, by Mr Horne, which had calculations dealing with three different scenarios: the first was if Mr Devani remained a 33.3% shareholder in the Company; the second was if Mr Sharon’s 33.3% was bought out at the year ending 30 June 2022; and the third was if Mr Devani’s one third share was purchased at the year ending 30 June 2022. In calculating the purchase price for Mr Devani’s one third interest, interest at the rate of 5% per annum has been included as well as a “goodwill gesture payment” of £20,000.[131]On 10 February 2022 a meeting took place between Mr Devani, Mr Sharon and Stuart Johnson, who at that time was Mr Devani’s General Manager overseeing the running of his business. In his witness statement, Mr Sharon said that he thought the meeting was in May or June 2022, but in his oral evidence stated that if it was being said that it was on 10 February 2022, he would accept that.[132]In his account of what happened at the meeting Mr Devani states in his witness statement that as the agreement with Mr Lalani had been completed, as far as he was concerned, the way forward was that he and Mr Sharon would be working on a 50-50 basis as agreed in the previous June. He then states that the purpose of the meeting was to move forward with starting the works on site and agreeing on raising funds for the construction stage. They discussed this issue and the role of Mr Johnson going forward. He then states that towards the end of the meeting Mr Sharon suggested that it might be a good idea to bring Mr Glynne in as he might be able to pay for further development costs so that he and Mr Devani would not have to fund anything further themselves or incur interest through obtaining bank development finance and suggested that they meet with Mr Glynne.[133]In his witness statement, Mr Sharon states that the purpose of the meeting was to agree a way forward. He says that they discussed the potential of a future agreement between them and it was agreed that they should move to a shareholders’ agreement. He also says that Mr Devani and Mr Johnson had queries on the accounts and it was agreed that Mr Devani would appoint Mr Johnson and Mr Sharon would appoint Callum Horne, a bookkeeper in his office, to finalise the accounts. He then goes on to say that he recalled that he mentioned that he had bought out Mr Lalani with funds from one of his and Mr Glynne’s companies, which had taken a loan from Lloyds Bank (in his oral evidence, Mr Devani said that this was not mentioned) and that Mr Glynne could help fund the development costs, instead of getting a development loan from the bank at a higher interest rate. Finally, he states that he did not recall talking about any percentage ownership and there was no mention of any 50% shareholding at the meeting.[134]In his oral evidence, Mr Sharon said that there were two options for Mr Glynne: either for him to hold one third of the shares in the Company or to be a joint holder of 66.7% of the shares jointly with Mr Sharon through a special purpose vehicle which Mr Sharon would set up and that he spoke openly at the meeting that Mr Glynne was not coming in as a lender, but as a developer and as Mr Sharon was a developer and Mr Devani had previously worked with Mr Glynne, Mr Devani should have understood what this meant. It does not appear that Mr Sharon, however, expressly stated that Mr Glynne would be taking either a one third interest in the Company or a two thirds joint interest with Mr Sharon through an SPV. Indeed, this appears clear from Mr Sharon’s witness statement, in which he states that he did not remember talking about “any percentage ownership”.[135]On 17 February 2022 Mr Sharon sent an email to Mr Johnson, copied to Mr Devani and Mr Glynne. The email included the following:
“Agreement between all involved: I’m preparing shares agreement between us 3 (Mel, Steve and me) that will allow us to proceed once planning received as we all want to move on and complete the project. I will send (once ready) draft agreement so we all can confirm or amend and once agreed it will be sent to the solicitor to form a document that we all can sign. The agreement will contain; % of interest on funds invested, costs for development monitoring, and exit options from the project that we all need to agree on. We may need to meet again to finalise details of way of funding the project.”
We may need to meet again to finalise details of way of funding the project.”[136]On the same day, Mr Johnson replied to Mr Sharon saying that he and Mr Devani had reviewed Mr Sharon’s email and directing him to their comments on it.[137]In relation to what Mr Sharon had said under the heading “Agreement between all involved” as set out above, the comment from Mr Johnson and Mr Devani was as follows: “We look forward to receiving this as soon as possible as it is key to get this agreed before we move forward. We agree that it would be beneficial to meet again regarding the funding arrangements once we have sight of the draft agreement”.[138]Following these emails, Mr Johnson and Mr Horne continue to liaise over the accounts. In paragraph 8 of an email dated 15 March 2022 sent by Mr Johnson nearly one month after his email of 17 February 2022 to Mr Horne, and copied to Mr Sharon and Mr Devani, Mr Johnson stated:
“8. Add Pangbourne Ltd as a 50% shareholder, please send us the shareholder agreement as agreed and stated in previous emails.”
[139]In cross-examination, both Mr Devani and Mr Sharon were asked about this email.[140]The exchange that took place with Mr Devani was as follows:
“Q. So Mr Johnson clearly thought that the amount of the shareholding was going to be part of the shareholder agreement, didn’t he? A. Going forward, of course, we’re ironing out the accounts. We’ve already agreed we’re going 50/50. So now it is the time when Amir is saying, you know, “Shareholders’ agreement”, yes, please, of course send it to us because we want to formalise things as we’re moving forward now. Because there’s been such a mess previously, let’s – we want to make sure we’re all - - and we even said - - you know we agreed that way before, that’s how we were going to be moving on.”
Because there’s been such a mess previously, let’s – we want to make sure we’re all - - and we even said - - you know we agreed that way before, that’s how we were going to be moving on.”[141]The exchange that took place with Mr Sharon was follows:
“Q. This is 15 March 2022. So Stuart Johnson and Mel had understood that the shareholder agreement was going to be between the two of you, or your nominees. They didn’t say, “Add Pangbourne as a one third shareholder”
. Mel still thought he had 50% of the shares at this point, didn’t he?” A. Not really. I disagree with you. Because that e-mail sent three weeks after my e-mails of the minutes of the meeting, which is very important. Three weeks’ time, we are dealing with the account. And suddenly when the account is supposed to be approved, there is one-line insert over there, “Please transfer the 50% shares to Pangbourne”, or whatever the company name is. So that was almost three weeks after. So in two weeks, Callum Horne and Stuart dealing with account professionally, mentioning the three-way agreement; and then two weeks later on the same account, not related to anything, there is one line, “Please make sure the 50% was transferred”. It’s like – looks like insert of an item that don’t belong to the same discussion on the same time, And I replied to that.” So Stuart Johnson and Mel had understood that the shareholder agreement was going to be between the two of you, or your nominees. They didn’t say, “Add Pangbourne as a one third shareholder”. Mel still thought he had 50% of the shares at this point, didn’t he?” So in two weeks, Callum Horne and Stuart dealing with account professionally, mentioning the three-way agreement; and then two weeks later on the same account, not related to anything, there is one line, “Please make sure the 50% was transferred”. It’s like – looks like insert of an item that don’t belong to the same discussion on the same time, And I replied to that.”[142]On 16 March 2022 Mr Horne sent an email to Mr Sharon with suggested responses to Mr Johnson’s email of 15 March 2022. It would appear that the email was approved by Mr Sharon and on 16 March 2022 it was sent by Mr Horne to Mr Johnson, copied to Mr Devani and Mr Sharon.[143]In response to paragraph 8 of Mr Johnson’s email, Mr Horne on behalf of Mr Sharon stated as follows:
“Following on from the meeting you had on the 10th February 2022, with Amir, you were notified and agreed between all parties that the shares will be split equally between Mel, Steve and Amir (as it was before). Mr Steve Glynne has stepped in for Houssain’s in the company. Again, the Shareholder Agreement is being prepared but should not delay the accounts submission anyway. I will however make a note to chase this up with the solicitor (once the shareholding agreement points agreed between us) and would like to get this agreed and proceed with completing the project.”
[144]When Mr Sharon was asked about this email and it was suggested that he was saying that Mr Glynne was definitely going to be a shareholder, Mr Sharon responded as follows:
“Steve Glynne going to be a shareholder whatever happens: if Mel agreed to give him one third, or if not, I have 66.7. So on the SPV I will create, Steve will have shareholders over there. So shares will always be allocated to Steve, regardless of who and how it’s going be in the format of the company.”
I wanted to establish it as one third each in Hermes House because I know that Steve have credibility. I know that Mel know him, I know that Mel can work with him, and I also know that Mel later contact him to try and negotiate between us as well.”[145]On 22 March 2022 Mr Johnson replied to Mr Horne’s email dated 16 March 2022 in the following terms:
“The agreement made between Mel and Amir is for Mel and Amir to hold 50% each. Amir raised the addition of Steve Glynne at the meeting on 10th February which I attended which was understood to be an option for an alternative way of funding the build. It was not agreed to bring in another shareholder. As it stands the original agreement made between Mel and Amir to be the remaining shareholders only, as a result of Houssain’s settlement is what has been agreed. The shareholder agreement has been outstanding for some time, so we welcome the news of the imminent delivery of the draft, but this should be for 50%:50% between Mel and Amir. As above, it is should include the interest accrued to the date of Mel becoming a shareholder as detailed above. It is not agreed that any other party becomes a share holder. The only parties are Mel, Amir and Houssain, and Houssain has now settled and will no longer be a creditor or shareholder as a result.”
[146]The response to the above email from Mr Horne on behalf of Mr Sharon was as follows: “It was discussed in the meeting that you attended on 10/02/22, that Steve was going to pay Houssain for his % in the company. As per the follow up email sent by Amir on Thu 17/02/22 14:57. The original agreement that stood in place between Mel, Houssain and Amir: they would all own a third of the company each. The related parties who injected funds would remain as “creditors” within the SoFP until the shareholders agreement was prepared and signed. The agreement remains the same, but instead Steve is stepping in for Houssain. This is what was discussed, Mel and Amir owning 50% of the company each was never discussed between them and will not be the case. Why would Steve pay of Houssains creditor account if he wasn’t going to benefit in some way?”.[147]Finally, three further emails are relevant. The first is an email dated 5 April 2022 from Mr Devani to Mr Sharon. In that email Mr Devani stated:
“It has always been agreed, through multiple discussion between Hussein, yourself and me, that you would buy Hussein out and you and I would remain as equal partners. You always said to Hussein & myself that three partners doesn’t work, and is two is better. You also reiterated this very strongly on our meeting on 10th February when Stuart Johnson was present. You were very insistent on this and always have been. You have never mentioned that Steven Glynne was buying out Hussein so I am extremely surprised to hear of this. The only reference to Steve Glynne in our meeting on 10th February was when you said Steve Glynne could be willing to pay for all the construction costs. This was presented as an option rather than you and I putting in our own funds or applying for development finance and this was a major discussion point in the meeting in terms of how costs could be monitored and finance sought. As stated this was only presented as an option ….Why would I ever agree to give Steve Glynne 33% of the shares which would be equivalent in monetary terms of at least £1 million. The cost of development finance would be circa £50,000 to Hermes House overall of which we would split equally. Therefore giving someone else 33% would make no commercial sense whatsoever. If you needed Steve Glynne to assist you in buying out Hussein, then that is fine, but it is a matter between the two of you and should not affect Hermes House NW2 Limited or myself. Now you have bought out Hussein, both you and I are equal creditors of the company…..and therefore we will be 50% shareholders each………. I am ready to move forward and reiterate that I will contribute 50% of the costs to complete the development with you as an equal partner. As promised I await the draft shareholders’ agreement between the two of us, and would look to get this resolved as soon as possible….”
[148]Mr Sharon responded to this email on 25 April 2022. The gist of his response was that Mr Lalani, Mr Devani and Mr Sharon had agreed that they would each be one third shareholders on terms that Mr Lalani and Mr Devani would introduce the majority of the capital needed to purchase Hermes House (although he made a financial contribution, which had not been originally envisaged), he would give his time and expertise to the project and all three of them would contribute to the development costs with profits being shared equally. He then says that Mr Lalani sold to him his third share interest meaning that he had a 66.66% interest in the Company and that at the meeting on 10 February 2022 it had been agreed that, because Mr Glynne had financed the funds to pay off Mr Lalani, he would be transferring the 33.33% he acquired from Mr Lalani to Mr Glynne. In response to Mr Devani’s statement that he was now a 50% shareholder, Mr Sharon said that that was not correct as he had not contributed any further funds to acquire an interest above the original 33.33%.[149]The last email is an email dated 25 April 2022 from Steve Glynne to Mr Sharon where Mr Glynne stated:
“…Clearly Mel (& Stuart) feel MdV interest should rise from 33.3% to 50% with out him paying penny to buy Hussain’s 33.3%. He’s acting Deluded or crazy or just trying it on! We’ve seen this before from MdV. Why on earth does he think I would put in Hussain’s 33.3% share and not receive his shares??? That’s the only reason anyone would invest that money, as we discussed all along!”
[150]After that date the parties continued to dispute the percentage shareholding that Mr Devani was entitled to, which is the dispute I now have to decide.

The Claimant’s submissions

[151]Ms Proferes submitted first that Mr Devani’s evidence about the purpose of the 25 June Meeting and what happened at that meeting is clear. She says that it was agreed that Mr Sharon would repay Mr Lalani what he had contributed, which they were all aware was about £565,000 as they had been recently considering the accounts, that Mr Devani and Mr Sharon would continue on together and that both Mr Devani and Mr Sharon would forgo the sum of £85,000 standing to their credit in the Company’s accounts, an agreement which is shown by the omission to refer to this sum in the draft accounts produced after the meeting. Thus, she said, the parties would have contributed broadly the same amounts with Mr Devani having contributed £558,300 (£643,300 - £85,000) and Mr Sharon £543,000 (£63,500 + £565,000 -£85,000). She then says that as a result of Mr Sharon offering to pay £20,000 at the end of the project, Mr Devani’s contribution would be reduced to £538,300.[152]Second, Ms Proferes submitted that Mr Sharon’s evidence on what had happened at the 25 June Meeting had developed over time. She referred to his pleaded case in which he said that it had been agreed that Mr Lalani would exit the partnership and provisionally agreed, subject to contract, that Mr Sharon would pay him approximately £550,000. This had changed in his witness statement to him saying that he “considered” buying Mr Lalani’s share. In his witness statement he also asserted for the first time that Mr Devani had asked him if he would have the option to buy the difference to have “equal shares” if the deal with Mr Lalani went ahead and mentioned that he recalled a discussion concerning the sum of £20,000.[153]As regards Mr Sharon’s evidence that Mr Devani had asked him if he could have the option to buy more shares to make him an equal shareholder, Ms Proferes submitted that Mr Sharon’s explanation was incomprehensible as to why he had expressly denied any mention of the words “50/50” or “equal shares” in his Re-Amended Defence and Counterclaim when in his evidence he said that he recalled those words as having been used. In contrast to this, Mr Devani’s evidence was clear that he would never have offered to pay Mr Sharon yet more money to acquire a 50% interest as he believed that Mr Sharon had not put in the monies he had previously agreed to contribute (I assume that this is a reference to the purchase cost of Hermes House). Accordingly, it was inherently likely that this new case was an attempt at damage limitation if Mr Devani’s evidence as to what happened was accepted.[154]Third, Mr Goldstein’s email of 16 February 2020 was nothing more than an accountant’s suggestion of what might happen, but it does not show what actually happened: no valuation of the property was obtained to inform the “buy-out figure”; instead a deal was struck. The e-mail therefore carries little weight.[155]Fourth, Mr Sharon’s attempts to explain why the sum of £85,000 standing to Mr Devani’s credit was removed from the accounts, if this had not been agreed at the 25 June Meeting, were incredible. It was clear from the contemporaneous documents that they had been recorded in the accounts prior to the 25 June Meeting and were removed from the accounts after the meeting by Mr Sharon himself, but Mr Sharon’s explanation in his oral evidence as to why this had happened was not clear. Further, there are no documents recording any discussions about this between the parties between the 25 June Meeting and 24 August 2021, when the account was sent. The mere fact that Mr Devani said that his account was fine was not evidence of any request by him for the Warspite Deposit to be removed. In the premises, the simplest and most likely explanation was that the removal of the sum of £85,000 from Mr Devani’s account was because it had been agreed at the 25 June Meeting that he would forgo payment of this sum.[156]Fifth, as regards the lack of contemporaneous documents recording what was agreed at the 25 June Meeting or showing Mr Devani chasing Mr Sharon for an agreement speaks for itself. Mr Devani would never have quietly sat by knowing that Mr Lalani was leaving the partnership without knowing on what basis he and Mr Sharon were proceeding and would not have been content to be left with a minority shareholding in circumstances where he had contributed equal funds to the Company and was dissatisfied with how Mr Sharon had run the Company when in sole control.[157]Sixth, the email dated 19 October 2021, which was Mr Devani’s first contact with Mr Sharon save for agreeing the account, is important, because it shows that the conversation at the 25 June Meeting did not morph into an agreement in Mr Devani’s mind over time and as a result of growing frustration. Only a few months after the meeting, and with no indication of frustration, Mr Devani was clear that an agreement to be 50/50 shareholders had been reached. It is therefore not plausible that in October 2021 Mr Devani had resolved to pretend that this had been agreed and was seeking to lay down a paper trail. The fact that Mr Sharon in his reply email dated 21 October 2021 did not dispute the agreement is telling.[158]Seventh, the fact that Mr Devani was not himself a party to the Settlement Deed was because this was in a large part resolving the Warspite dispute between Mr Sharon and Mr Lalani, to which he was not a party. However, the agreed account of his contributions to the Company was annexed at Schedule 2 to the Settlement Deed.[159]Finally, the email exchanges which took place in February 2022 and March 2022 do not reflect Mr Devani hoping that he would get 50% of the shares, but certain that this had been agreed. The original JV Agreement between the parties was for equal shareholdings reflecting equal contributions. Likewise the agreement reached at the 25 June Meeting was the same agreement, adjusted to reflect that there would only be two partners. It is therefore inherently probable that this is what the parties agreed.[160]Again, with no disrespect to Mr Harman, I do not propose to set out his submissions as they are taken into account in my findings as set out below.

Discussion

[161]I have before me very divergent accounts as to what happened at the 25 June Meeting and, in particular, whether it was agreed that once Mr Lalani had left the Company, Mr Devani would be a 50/50 shareholder with Mr Sharon in the Company. In deciding what is the crux of this case, I bear in mind that the burden is upon Mr Devani to prove on the balance of probabilities that the agreement he alleges was made.[162]Looking at the testimony of the various witnesses through the lens of the contemporaneous documents or lack of them and the known or probable facts, I reject Mr Devani’s evidence and arguments that an agreement was reached at the 25 June Meeting. I deal with each of these matters below.

The Contemporaneous Documents

[163]There is no contemporaneous documentary evidence which records or even to refers to the agreement that Mr Devani claims was made at the 25 June Meeting. In my judgment, this is remarkable in itself for the reasons set out below.[164]First, it seems that from about 2020, when the relationship between the parties had deteriorated as a result of disputes concerning the accounts and, in Mr Lalani’s case, his threatened litigation against Mr Sharon, the JV Partners were concerned to record important discussions or agreements between them in writing. The evidence shows that emails were circulated to the JV Partners (whether by one of them or a third party, acting for one of them), the purpose of which was to record in writing what had been discussed or agreed. Examples of such emails are Mr Goldstein’s email dated 16 February 2020 recording what happened at the meeting on 12 February 2020, Mr Devani’s email dated 21 May 2020 recording what he says was his conversation with Mr Glynne, Mr Devani’s two emails dated 2 June 2020 emphasising that nothing on the accounts would be agreed unless and until they had been confirmed in writing by him, Mr Sharon’s and Mr Lalani’s emails with their record of what happened at the meeting on 14 January 2021, Mr Sharon’s email dated 25 January 2021 recording what happened at the parties’ meeting on 21 January 2021 and Mr Sharon’s email dated 14 June 2021 recording the outcome of the meeting held on 11 June 2021. I also note that the agreement between the JV Partners relating to the Warspite Deposit was recorded in the 4 May Agreement and the timing and source of the payments to be made in Mr Lalani’s email dated 4 May 2017.[165]Second, it was clear from the evidence that Mr Devani did not trust Mr Sharon. In his oral evidence, Mr Devani admitted that although they had agreed at the meeting on 11 June 2021 to value Mr Sharon’s contribution towards development costs at £30,000, he still believed that Mr Sharon had inflated his costs. He also said that his relationship with Mr Sharon was not amicable. In her submissions, Ms Proferes said, in effect, that Mr Devani would never have allowed Mr Lalani to leave the Company without it first having been agreed that he would be a 50% shareholder, particularly, in circumstances where he had contributed equal funds to the Company and was dissatisfied with how the Company had been run under Mr Sharon’s sole control.[166]Having regard to the above matters, and the importance that Mr Devani is said to have attached to his having an agreement that ensued that he would be a 50% shareholder once Mr Lalani left, had an agreement been made at the 25 June Meeting, it is extraordinary that the meeting was not followed up with any email recording what is said to have been agreed, whether from Mr Sharon or Mr Lalani, and more importantly, Mr Devani. Whilst I therefore agree with Ms Proferes’ submission that the lack of contemporaneous correspondence recording the alleged agreement or showing Mr Devani chasing Mr Sharon for an agreement does speak for itself, it does not speak for itself in the way that she submitted. The absence of such correspondence, in my judgment, speaks not for, but against, any agreement having been made.[167]Turning to the contemporaneous documentation that does exist, Ms Proferes submitted that, at least, two documents and the emails sent in February and March 2022, supported Mr Devani’s evidence that an agreement had been made at the 25 June Meeting.[168]The first document Ms Proferes relied upon was the account agreed by the JV Partners following the 25 June Meeting relating to the contributions made by Mr Lalani and Mr Devani to the Company (“the Account”).[169]As stated above, Ms Proferes submitted that the fact that all reference to the Warspite Debt had been removed from the Account showed that at the 25 June Meeting it had been agreed by Mr Sharon and Mr Devani that they would waive payment of this debt. I do not accept this submission.[170]The Warspite Debt was not a debt owed by the Company to Mr Devani and Mr Sharon; it was a personal debt owed by Mr Lalani to Mr Sharon and Mr Devani pursuant to the 4 May Agreement, which the parties had agreed could be paid by Mr Lalani from his share of the profits from the Hermes House development, or if that was not sufficient, the capital investment repayable to him. In order to reflect this arrangement, purely as an accounting matter, the sum of £170,000 was deducted from Mr Lalani’s investment in the accounts and the sum of £85,000 was added to each of the investments of Mr Devani and Mr Lalani. It was not suggested by any party that the effect of this accounting treatment was to discharge the personal obligation of Mr Lalani to pay the Warspite Debt to Mr Devani and Mr Sharon. All of the parties treated the obligation as one that continued to exist.[171]In my judgment, the purpose of the Account was to calculate the amounts actually invested by Mr Lalani and Mr Devani into the Company on the basis that Mr Lalani was leaving the Company, was looking to have the whole of his investment repaid to him and was no longer going to be entitled to share in any profits from the development. In such circumstances, Mr Lalani’s agreement to repay Mr Sharon and Mr Devani the Warspite Debt from the profits of the Hermes House Development was no longer appropriate. What had to be calculated therefore was the amount that the Company itself owed to Mr Lalani and Mr Devani. The inter-personal Warspite Debt had no relevance to this calculation. Therefore, the more likely explanation for the Warspite Debt not having been included in the Account is that set out above and not because any agreement forgoing payment of that debt had been made at the 25 June Meeting.[172]That this is the more likely explanation is supported further by the following further matters: 172.1. it is Mr Devani’s case that in exchange for his waiving his debt in the sum of £85,000, Mr Sharon agreed to pay him the sum of £20,000 upon completion of the Hermes House development. If this had been agreed, according to the logic of Mr Proferes’ argument, the Account, insofar as it related to Mr Devani, should have included the sum of £20,000, but it does not and in none of the email correspondence passing between Mr Devani and Mr Sharon, leading up to Mr Devani’s agreement to the Account, insofar as it related to him, did Mr Devani suggest that the sum of £20,000 should be included; 172.2. there is no reference in the Settlement Agreement to Mr Lalani ceasing to be under any obligation to pay the Warspite Debt, only to how the half of debt owed to Mr Sharon was to be treated. Had an agreement been reached at the 25 June Meeting, an agreement which Mr Devani pleads in his Re-Amended Reply and Defence to Counterclaim (supported by his evidence) was a tripartite agreement between the parties, Mr Devani fails to explain, either properly or at all, why he was not a party to the Settlement Deed and why the alleged agreement for him to forgo the debt of £85,000 owed to him by Mr Lalani and his entitlement to receive half of Mr Lalani’s interest in the Company was not included in that agreement as this was the most obvious place to have ensured that he received 50% of the shares in the Company; 172.3. the Settlement Deed itself is not consistent with an agreement having been made with Mr Sharon at the 25 June Meeting for him to waive payment of his £85,000. The Settlement Deed provided that Mr Lalani was only to be released from his obligation to pay the sum of £85,000 once full payment of the sum of £565,390.67 (being the sum shown in the Account) had been made (the final instalment of £415,590.67 being due on 24 March 2022), when it would be treated as interest on Mr Lalani’s investment. Contrary to Mr Devani’s claim that the debt of £85,000 owed by Mr Lalani to Mr Sharon had ceased to be owed from the date of the 25 June Meeting, it continued to be a debt owed by Mr Lalani until payment in full had been received by him from Mr Sharon; 172.4. in his diary entry dated 1 July 2021, where Mr Sharon appears to list what he would like the exit agreement with Mr Lalani to contain, he states that Mr Lalani’s payment to Mr Devani has nothing to do with him, in other words, it was a personal matter between Mr Lalani and Mr Devani for them to resolve between them. The diary entry supports Mr Sharon’s version of events that no agreement was made at the 25 June Meeting, including any agreement relating to the debt owed by Mr Lalani to Mr Devani. I would add that whilst Mr Sharon expressed a belief that this debt might have already been paid to Mr Devani or that Mr Devani had decided that he would not seek payment of it, there is no evidence from which I can make any finding to this effect.[173]The second document that Ms Proferes relied upon was Mr Devani’s email dated 19 October 2021, in which Mr Devani asked for Mr Sharon to let him know when he would be transferring to him 50% of the shares in the Company “as agreed”. For the reasons set out below, I do not accept that this document is proof of the agreement alleged to have been made on 25 June 2021.[174]First, it was written four months after the alleged agreement and makes no reference at all to the 25 June Meeting, or, otherwise to when and how the agreement was made or, indeed, to what is alleged to have been agreed other than the transfer of 50% of the shares. The email also needs to be viewed in the light of Mr Sharon’s reply and other correspondence referred to below. It is clear from Mr Sharon’s reply on 21 October 2021 that Mr Sharon did not accept that there had been any agreement for him to transfer 50% of the shares to Mr Devani. In that email, Mr Sharon stated that this was a matter for discussion between him and Mr Devani once final agreement had been reached with Mr Lalani. Mr Devani did not reply to this email or seek to contend that as an agreement had already been made between them, there was nothing further to discuss, at least, as regards the transfer of 50% of the shares to him.[175]The third set of documents that Ms Proferes relied upon was the email correspondence from February 2022 and March 2022. To this should also be added the email correspondence sent in April 2022. In none of these emails does Mr Devani claim that a binding agreement was reached on 25 June 2021 and set out what the agreement was. At best, it is asserted by Mr Johnson in his email dated 22 March 2022 that it had been agreed that Mr Devani and Mr Sharon would each hold 50% of the shares and, more importantly, asserted by Mr Devani in his email dated 5 April 2022 that it had always been agreed through multiple discussions between himself, Mr Sharon and Mr Lalani, that Mr Sharon would buy out Mr Lalani and that afterwards he and Mr Sharon would remain as equal partners (repeated also in his oral evidence). Later in that email Mr Devani stated that the effect of Mr Lalani leaving the Company was that he and Mr Sharon remained as equal creditors of the Company and “therefore” [my emphasis] they “will [each] be 50% shareholders”. He also offered to contribute 50% of the costs to complete the development and added that the issue of the shareholding needed to be resolved before he would move forward with anything else.[176]This last email is telling. Had an agreement been made on 25 June 2021, it is remarkable that Mr Devani made no reference to it or to the 25 June Meeting or asserted that because of it, Mr Sharon was bound to transfer 50% of the shares to him. On the contrary, Mr Devani based his right to receive 50% of the shares on numerous alleged past discussions between the JV Partners and on his contention that because he and Mr Sharon had reached the point where they were equal creditors of the Company, they would be equal shareholders. His reference to his willingness to contribute 50% of the costs also shows that he was conscious that his belief that he had made an equal contribution to the Company was not sufficient and that any agreement for him to be an equal partner would have to include an agreement to his contributing 50% of the development costs. This issue was not discussed at the 25 June Meeting; it is unlikely in my judgment that Mr Sharon would have agreed to transfer 50% of the shares without it also having been expressly agreed that Mr Devani would pay 50% of the development costs, which also explains Mr Sharon’s email of 21 October 2021, where, at least from his perspective, there were matters still to discuss between the parties.[177]I accept, however, that it is likely that Mr Sharon did speak to Mr Devani in terms of it being better for Mr Lalani to go, leaving just him and Mr Devani as the only two partners as there is contemporaneous documentary evidence to support this. Being the only two partners left though does not in itself mean that they would be equal partners and, excluding Mr Devani’s and Mr Johnson’s emails referred to above, the contemporaneous evidence does not support Mr Devani’s assertion that Mr Sharon agreed, or was even thinking in terms of Mr Devani and himself being equal shareholders if that happened. In particular, the following further documents are significant: 177.1. first, the email dated 16 February 2020, in which Mr Goldstein summarised what had happened at the meeting held on 12 February 2020. That email records that the options that the parties discussed were either to sell Hermes House or for one or two of them to buy out the other person or persons and then proceed with the development. As all parties agreed that they each had a third interest in the Company, the latter option meant that if one person bought another out, their investment would increase to two thirds and if two of them bought the other out, then they would have an equal investment. However, what is not said or envisaged is that if one bought another out, their investment with the remaining partner would be equalised, thereby entitling them to have 50% of the issued shares; neither does what was discussed envisage that any party could increase his shareholding without paying monies to the party to be bought out; 177.2. second, the email dated 4 December 2020 from Mr Sharon to his daughter, in which Mr Sharon sets out his thoughts on the future of the Company and the options available. Those options included:(i) Mr Sharon buying out Mr Devani and Mr Lalani and adding 5% on their investment, or Mr Sharon buying out only Mr Lalani because he could not work with him, but could work with Mr Devani; or(ii) selling Hermes House and then paying out the initial investment and the profits on an equal basis. The email also refers to a telephone conversation Mr Sharon had with Mr Devani, during which Mr Devani is recorded as having said that he knew that Mr Lalani would not pay his equal share of the investment and that it would be down to his involvement only. Mr Sharon records that he offered to balance the investment costs immediately and said that the joint venture just with himself would work better for Mr Devani as Mr Sharon would manage and reduce the build costs which would “free” Mr Devani. However, Mr Sharon does not record any agreement with Mr Devani in this conversation that if the investment costs were to be balanced up by him, then he and Mr Devani would be equal shareholders. Further, it is not alleged by Mr Devani that anything to this effect was said by Mr Sharon.[178]In addition to the above documents, there is further contemporaneous documentary evidence after 25 June 2021 which does not support Mr Devani’s assertion of an agreement having been made at the 25 June Meeting, including the following: 178.1. Mr Sharon’s diary entry for 1 July 2021, which, like other diary entries made by Mr Sharon, was written for no one’s benefit but his own. The diary entry lists what Mr Sharon wanted to be included in the exit agreement with Mr Lalani. In that list, he states that he will buy Mr Lalani’s “Part of the investment and 1/3 share” and was therefore envisaging that this would then increase his share to two thirds. He does not state that he will be buying half that share with the other half being transferred to Mr Devani or refer to any agreement with Mr Devani that once he had acquired Mr Lalani’s one third share, he would transfer one half of the issued shares to Mr Devani. Further, the fact that he refers to Mr Lalani’s debt to Mr Devani as having nothing to do with him, supports his version that at the 25 June 2021 Meeting, no agreement was reached that Mr Devani would forgo payment of this sum; 178.2. Mr Sharon’s diary entries for 14, 18 and 19 January 2022, which refer to drafting an agreement with Mr Devani. Mr Sharon could not recall what type of agreement he was thinking of at the time. The last entry on 19 January 2022 shows Mr Sharon’s thinking about a possible exit offer that might be made to Mr Devani. In his oral evidence, Mr Sharon stated that “Mel 1/3 payment” was referring to the fact that Mr Devani needed to contribute his one third share. In this respect, it would appear from Mr Horne’s email dated 24 January 2022 to Mr Sharon that Mr Devani’s one third share to date had not been paid. As to the sum that he put in his diary that he thought might be offered for Mr Devani’s interest, he could not explain what his thinking was behind the figure of £450,000, but his diary note does record that he was also considering adding an additional sum £20,000 to this less certain costs; 178.3. an email dated 9 February 2022 sent by Mr Horne to Mr Sharon, together with a schedule setting out the various exit options for Mr Sharon and Mr Devani. It would appear that this document was sent with a view to the meeting which was due to take place on 10 February 2022, but was for Mr Sharon’s own internal purposes. It is not suggested that the schedule was shared by Mr Sharon at the meeting, but one of the options in the schedule was for Mr Sharon to purchase “Mels’ 33.3% share”; 178.4. the email dated 25 April 2022 from Mr Glynne, which shows that both Mr Glynne and Mr Sharon believed that what was being acquired was Mr Lalani’s one third interest and that, because it was a one third interest, if Mr Devani had wanted to acquire an additional 17%, then he would have had to pay something to acquire that additional interest; and 178.5. finally, the Settlement Deed by which Mr Lalani surrendered the whole of his third interest in the Company to Mr Sharon, not half of it to Mr Sharon and half to Mr Devani.[179]In conclusion, in my judgment, on the balance of probabilities, the contemporaneous documents or lack of them support Mr Sharon’s case that no agreement was made at the 25 June Meeting as alleged by Mr Devani.

Inherently probability

[180]I now deal with whether it is inherently probable that an agreement was reached at the 25 June Meeting, having regard to the known or probable facts. In examining this aspect of the case, it is necessary to have regard to the justification given by Mr Devani as to why he says it was agreed that he would receive 50% of the shares once Mr Lalani had been bought out and an additional payment of £20,000 from Mr Sharon.[181]In his original Particulars of Claim Mr Devani did not seek to give any explanation to justify why Mr Sharon had agreed to pay him £20,000 in addition to transferring half of the interest he was to acquire from Mr Lalani. In his Amended Particulars of Claim Mr Devani stated that “Mr Sharon promised to pay £20,000 to Mr Devani on conclusion of the Hermes House project, to equalise the difference between the sums contributed by him and Mr Devani”. This explanation was deleted in the Re-Amended Particulars of Claim and replaced with the assertion that the additional payment was given “to encourage Mr Devani to agree to Mr Lalani exiting the JV Partnership on the terms set out herein.”[182]In his witness statement, Mr Devani reverted to the equalisation explanation. He stated that in order for Mr Sharon to equal his investment, it was agreed that Mr Sharon would pay Mr Lalani the sum of £565,000, which, with Mr Sharon’s £13,600 payment, took his contribution to £578,000. By then excluding Mr Devani’s £85,000 and Mr Sharon paying him £20,000 at the end of the project, their investments became roughly the same. This meant that he and Mr Sharon would be equal capital partners, which was the logic of what was agreed at the 25 June Meeting.[183]Mr Harman submitted that, in the circumstances, it was inherently improbable that Mr Sharon would have agreed to Mr Devani having 50% of the Company without Mr Devani contributing further funds or that he would have agreed that, in addition to giving Mr Devani 17% of the Company for free, he also would have agreed to pay him an additional sum of £20,000.[184]For the reasons set out below, I accept Mr Harman’s submission.[185]First, as I have found, the position of the parties as at 25 June 2021 was that they were each entitled to a one third share in the Company. As I have found, in the case of Mr Devani and Mr Lalani, their one third share was in exchange for the capital investments made by them towards the purchase of Hermes House and their each agreeing to pay one third of the development costs. In the case of Mr Sharon, his one third share was in exchange for his committing his time and expertise to the design and planning process and the management of the project, and to pay one third of the development costs. Mr Devani’s explanation ignores Mr Sharon’s contractual commitment to give his time, expertise and labour to the project in lieu of making a capital contribution to the purchase price (although in fact, he ended up paying £13,600). Whilst Mr Devani in his oral evidence sought to contend that the work to be provided by Mr Sharon was in exchange for his and Mr Lalani’s agreement not to charge interest on their investment, this does not reflect what was originally agreed by the parties in 2016 as found by me.[186]What was therefore proposed at the 25 June Meeting was that Mr Sharon should purchase Mr Lalani’s one third interest in the Company in exchange for his reimbursing Mr Lalani the sum total that Mr Lalani had paid for that one third interest, being his contribution to the purchase and development costs of Hermes House. In these circumstances, I accept that it is inherently improbable that Mr Sharon would offer to repay Mr Lalani the full amount of the investment that Mr Lalani had made for his one third share in exchange for receiving only half of Mr Lalani’s interest in the Company and also agreeing to Mr Devani, whose capital investment had also been to acquire a one third share, having the other half of Mr Lalani’s interest for nothing and paying him an extra £20,000.[187]The reality of the situation was that whether or not Mr Devani became an equal partner with Mr Sharon was not dependent upon what Mr Devani wanted, but ultimately upon what Mr Sharon was prepared to agree with him. When, according to Mr Sharon’s evidence, Mr Lalani’s oral evidence and even Mr Devani’s own evidence in his witness statement, Mr Sharon and Mr Lalani still had to negotiate the terms of an agreement and Mr Sharon’s evidence (which I accept) that he needed to source the funds required to purchase Mr Lalani’s share, it is, in my judgment, inherently unlikely that Mr Sharon would at the 25 June Meeting have agreed, and committed himself, to transferring 50% of the shares to Mr Devani, particularly on the terms alleged. It is also, in my judgment, inherently unlikely that Mr Sharon would have done this without first having ensured that Mr Devani also agreed to pay 50% of the development costs. Neither Mr Devani nor Mr Lalani, however, contend that any term to this effect was agreed.[188]I also do not accept that a payment in the sum of £20,000 would have had the effect of equalising the capital contributions of the parties as claimed by Mr Devani. In this respect, it is important to look at what the parties believed their respective capital contributions to the Company were at that time of the 25 June Meeting. On 14 June 2021 Mr Sharon circulated to Mr Devani and Mr Lalani the draft accounts to 30 June 2020, which took into account Mr Sharon’s contribution to the development costs as having been agreed in the sum of £30,000. Mr Sharon in his witness statement referred to the accounts circulated as those identified as “CMS_0001386”. Those accounts show, in round figures, that, including the Warspite Debt:(i) Mr Sharon’s capital contribution was £158,001 (he included £89,550 for his share of the Warspite Debt, which included £5,000 from the £85,000 owed to Mr Devani and a further £5,000 said to have been owed to him by Mr Devani);(ii) Mr Lalani’s contribution was £399,648; and(iii) Mr Devani’s contribution was £643,300 (of which £80,000, not £85,000 was shown as being the amount owed to him in respect of the Warspite Debt).[189]If the amount of the Warspite Debt is taken out of the parties’ respective accounts, the resulting contributions are:(i) for Mr Sharon, the sum of £68,451 (£158,001 less £89,550), although the parties both agree, and Mr Sharon accepted in his oral evidence, that the figure was, in fact, £63,500 (although not clear, I assume that this figure is derived from the removal of the sum of £5,000 alleged to have been owed by Mr Devani to Mr Sharon);(ii) for Mr Lalani, the sum of £569,648 (£399,648 plus £170,000) ; and(iii) for Mr Devani, the sum of £563,300 (£643,300 less £80,000). During his cross-examination, Mr Devani accepted that between 20 June 2020 and 25 June 2021 he had only contributed the sum of £2,000 to the project, taking his contribution up to £565,300.[190]If Mr Sharon purchased Mr Lalani’s share, according to the figures known at the time, (excluding the Warspite Deposit) the parties are likely to have believed that he would have had to pay a sum in the region of £569,648 (it is not clear where Mr Devani and Mr Lalani get the sum of £565,000 referred to in their evidence), making his total contribution come to £633,148. This is £67,848 more than Mr Devani’s contribution to the Company. A payment of £20,000 by Mr Sharon to Mr Devani upon completion of the project would therefore not have equalised their contributions, but, in fact, would have increased the difference between them to £109,848 (with Mr Sharon’s contribution increasing to £654,148 and Mr Devani’s contribution decreasing to £543,300).

The evidence of Mr Lalani, Mr Devani and Mrs Jansari concerning the 25 June Meeting

[191]The written evidence of Mr Devani, Mr Lalani and Mrs Jansari differed in some respects as to what happened on 25 June 2021 as did some of their written evidence from their oral evidence. The most striking example of this was the difference between Mr Lalani’s oral evidence and his written evidence as to whether or not agreement had been reached at the 25 June Meeting. In Mr Lalani’s witness statement, he stated that there had been an agreement in terms very similar to those pleaded in the Amended Particulars of Claim. In his oral evidence, whilst he originally sought to defend the alleged agreement, he subsequently conceded that no agreement had, in fact, been made, and that he and Mr Sharon were to continue to have without prejudice discussions through their respective lawyers as shown by the exchange set out at paragraph 101 above. This evidence therefore supported Mr Sharon’s, not Mr Devani’s, version of events that no agreement was reached at the 25 June Meeting. Further, when it was put to Mr Lalani that there was no discussion about Mr Devani getting 50% of the shares, he did not claim that this was expressly said, but referred to Mr Sharon saying that once Mr Lalani had left the partnership, he and Mr Devani would be partners or “equal partners” (he did not appear to recollect which one it was). This is to be contrasted with his witness statement where he claimed that it was expressly agreed between Mr Sharon and Mr Devani that following his exit, Mr Sharon would procure the transfer of 50% of the shares to Mr Devani.[192]Finally, I would mention that whilst both parties have made points about each other’s pleaded cases and changes to, or omissions from those cases and/or certain claimed inconsistencies between their statements of case and their evidence, in light of the other more significant matters set out above, I do not consider any of the points made by either Ms Proferes or Mr Harman to have been of such significance as to impact my decision relating to the likelihood of what happened at the 25 June Meeting.

Conclusion

[193]For all the reasons set out above, I find that, on the balance of probabilities, no agreement was made at the 25 June Meeting as claimed by Mr Devani.

The Third Issue

[194]Given the conclusion I have reached above, the issue as to whether or not the agreement alleged by Mr Devani to have been made was a binding agreement is an academic question. However, as the parties have argued this point, I shall deal with it.[195]In her opening, Ms Proferes originally argued that the agreement did not need to be a binding agreement. She submitted that the agreement constituted a declaration of trust by Mr Sharon that once he acquired Mr Lalani’s interest in the Company, he would hold 50% of the issued share capital on trust for Mr Devani. I questioned Ms Proferes as to whether a declaration of trust could be made in respect of property which a party did not then own.[196]In her closing submissions, Ms Proferes appears to have accepted, and rightly so, in my judgment, that it is not possible for a person to make a declaration of trust in respect of property that they do not own (see: Lewin on Trusts, 20th ed. at3-004 and Garwoodv Ambrose [2012] EWHC 1494 (Ch) at [18]). Instead, she argued that as Mr Sharon already held a beneficial interest in 33.3% of the issued shares, he could declare an immediate trust over a portion of those shares in favour of Mr Devani. However, she conceded that this was a very artificial argument as no one at the time was thinking in terms of a trust. I agree. In any event, Mr Devani’s case is that he would not acquire a 50% interest until a settlement had been finalised with Mr Lalani, in other words, his additional right to 50 further shares would only accrue once Mr Lalani had surrendered the whole of his interest to Mr Sharon.[197]Accordingly, Ms Proferes confined her case to arguing that the agreement was a legally binding agreement pursuant to which Mr Sharon became obliged to transfer an additional 50 shares to Mr Devani once Mr Lalani’s interest vested in him.[198]Mr Harman denied that any legally binding agreement was made on two grounds: 198.1. there was no intention to create legal relations; and 198.2. Mr Devani provided no consideration to Mr Sharon.

The Law

[199]The courts apply an objective test in deciding whether the parties have reached a legally binding contract. The cases setting out the legal principles for determining this issue are conveniently set out by Butcher J in Rotam Agrochamical Co Ltd v GAT Microencapsulation GmbH [2018] EWHC 2765 (Comm) at [139] – [143] as follows:
“139. The legal principles as to whether or not a binding contract has been concluded were restated by the Supreme Court in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2010] UKSC 14; [2010] 1 WLR 753 at [45]: ”
The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to a concluded and legally binding agreement”. 140. The following passage from the judgment of Lloyd LJ in Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 610 was cited by the Supreme Court with approval: ”(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole … (2) Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that the contract shall not become binding until some further condition has been fulfilled. That is the ordinary ‘subject to contract’ case. (3) Alternatively, they may intend that the contract shall not become binding until some further term or terms have been agreed … (4) Conversely, the parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled … (5) If the parties fail to reach agreement on such further terms, the existing contract is not invalidated unless the failure to reach agreement on such further terms renders the contract as a whole unworkable or void for uncertainty. (6) It is sometimes said that the parties must agree on the essential terms and it is only matters of detail which can be left over. This may be misleading, since the word ‘essential’ in that context is ambiguous. If by ‘essential’ one means a term without which the contract cannot be enforced then the statement is true: the law cannot enforce an incomplete contract. If by ‘essential’ one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by ‘essential’ one means only a term which the court regards as important as opposed to a term which the court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the judge [at p 611] ‘the masters of their contractual fate’. Of course the more important the term is the less likely it is that the parties will have left it for future decision. But there is no legal obstacle which stands in the way of the parties agreeing to be bound now while deferring important matters to be agreed later. It happens every day when parties enter into so-called ‘heads of agreement’.” 141. In determining whether or not a contract has been concluded through communications between the parties, it is necessary to consider communications subsequent to the date of the alleged contract. In the words of Earl Cairns LC in Hussey v Horne-Payne (1879) 4 App Cas 311 : ”You must not at one particular time draw a line and say, ‘We will look at the letters up to this point and find in them a contract or not, but we will look at nothing beyond’. In order fairly to estimate what was arranged and agreed, if anything was agreed between the parties, you must look at the whole of that which took place and passed between them.” 142. As to agreements “subject to contract”, this area was addressed by Beatson J in Benourad v Compass Group plc [2010] EWHC 1882 (QB) at [106(a)]: ’”[T]he more complicated the subject matter the more likely the parties are to want to enshrine their contract in some written document to be prepared by their solicitors. This enables them to review all the terms before being committed to any of them. The commonest way of achieving this ability is to stipulate that the negotiations are ‘subject to contract’. In such a case there is no binding contract until the formal written agreement has been duly executed …. But it is not necessary that there should have been an express stipulation that the negotiations are to be ‘subject to contract’. …”: Cheverney Consulting Ltd v Whitehead Mann Ltd [2006] EWCA Civ 1303 at [42], per Sir Andrew Morritt C; Investec Bank (UK) Ltd v Zulman [2010] EWCA Civ. 536 at [17]. Where there is no such stipulation, this (see e.g. Winn v Bull (1877—78) LR 7 Ch 29 , 32, per Jessel MR) is a question of construction. The fact that a draft contractual document or a covering letter to it invites a party to initial or sign a copy and return it to the other party, or contemplates that a party would obtain legal advice before signing are telling indications that the parties do not intend to be bound until the document is signed: Investec Bank (UK) Ltd v Zulman [2010] EWCA Civ. 536 at [19—20].” 143. Finally, I note that it is possible for parties to agree to a binding preliminary contract, pending the agreement. I was referred to the following passage from the judgment of Pain J in Donwin Productions Limited v Emi Films Limited (Times, March 9, 1984) :
“It is clearly the law that parties may make a preliminary arrangement which may either be an enforceable agreement pending the completion of a fuller and more complete written agreement, or which is to have no effect pending the completion of such written agreement… Whether the preliminary agreement is to have contractual force or not will depend upon the intention of the parties. Mr. Bowsher seemed to suggest that there could be no binding agreement on the 4th June because the parties recognised at that stage that there were further terms to be agreed and embodied in the final written agreement. This is not a valid contention of law. It has considerable force when one is examining the evidence to ascertain the intention of the parties but as a matter of law there is no reason why one cannot have a partial binding agreement pending the completion of the full agreement. Initially the burden is on the Plaintiff to prove that it was the intention of the parties that there should be a binding agreement but if he can show: (1) that there was a commercial relationship between the parties; (2) that there was a meeting of minds; and (3) that consideration passed from the Plaintiff to the Defendant, then the onus shifts to the Defendant to prove that there was no intention to create a binding agreement …”
[200]In that case, the court held that an alleged oral agreement made on 30 August 2010 was intended to be a binding agreement. In reaching his conclusion, Butcher J stated at [148] and [152] (passages relied upon by Mr Harman):
“148. Furthermore, any such agreement in relation to CS-CLO was bound to be a complex one, on which the parties would wish to consult internal or external lawyers. They had already, prior to 30 August 2010, been exchanging drafts of a formal Commercial Agreement. Rotam had engaged outside lawyers to consider the drafts. Given this context, in my judgment it was implicit in the discussions on 30 August 2010 that to the extent that matters were the subject of agreement between those present, they would be embodied in the formal agreement which was being negotiated, so that the parties could then review all the terms before being committed to any of them. It is to be noted that the process of continuing to attempt to agree the terms of the formal contract continued after 30 August 2010, with the exchange of further drafts on 14 September, 8 October, and 11 October 2010…….. 152. Secondly, there are none of the contemporary indications which might be expected that the parties considered, or conveyed to each other, that they had crossed from non-binding negotiation to contractual commitment at the 30 August Meeting. There is no suggestion, for example, that there was a handshake to signify a contractual commitment, or any express words confirming that a binding deal had just been concluded. There are no expressions in the contemporary documents of relief or congratulation at a deal having been arrived at.”
[201]Mr Harman also drew my attention to the following additional principles, which were not disputed by Ms Proferes: 201.1. under the objective test, an apparent intention to be bound by the offeror may suffice so that the offeror may be bound if their words or conduct are such as to induce a reasonable offeree to believe that he intends to be bound, even if, in fact, he has no such intention, and the offeree gives a final and unqualified expression of assent to the terms of the offer. However, whether an offeror is actually bound by an acceptance of their apparent offer will depend upon the state of mind of the offeree so that if the offeree actually and reasonably believes that the offeror has the requisite intention, the objective test is satisfied so that the offeree can hold the offeror to his offer. However, if the offeree knows that, in spite of the objective appearance, the offeror does not have the requisite intention, the offeror is not bound (Chitty on Contract, 36th edition at 4-002-4-004, 4-032); 201.2. in determining whether an offer has been made with the requisite intention to be bound by it, the court will look at whether the language used is committal or non-committal and whether it was reasonable for the other party to expect further negotiations. The appropriate analysis will therefore depend upon whether the communication or conduct evinces the appropriate degree of commitment, and of certainty and finality as to terms (Chitty on Contracts at 4-012-4-013); 201.3. an agreement may not have contractual effect if, among other things: 201.3.1. it is so vague or uncertain that no definition can be given to it without adding further terms. Thus, an agreement to agree or an agreement to negotiate is too uncertain to have any contractual force (Chitty on Contracts at 4-169-4-170, 4-188); 201.3.2. if an offer is made in jest or anger or at least if this fact is obvious to the person to whom the statement is made. In this respect, I was also referred to Blue v Ashley [2017] 1928 (Comm) at [56]; 201.3.3. if the promisee does not provide something of value in exchange for the promise. However, if it is clear that the promise would have accomplished the act or forbearance anyway, even if the promise had not been made, then refraining from a course of conduct that was never intended to be pursued will not be valuable consideration. In these cases, the burden of proof is on the promisor to show that the promisee would (even if the promise had not been made) definitely have accomplished the act or forbearance in question (Chitty on Contracts at 6-003 and 6-027); 201.3.4. if it is an agreement on one issue out of a wide-ranging discussion about multiple issues, unless there was a segregation or distinction made between that issue and other matters on which no binding agreement was reached. In support of this proposition, in addition to Chitty, he relied on George v Revenue and Customs Commissioners [2018] UKFTT 509 TC at [96] and [99].

The submissions

[202]Assuming that Mr Devani’s evidence was accepted, Ms Proferes submitted that this was a case where at the 25 June Meeting all the necessary terms for a legally binding agreement to come into effect had been agreed and although a written agreement between Mr Sharon and Mr Lalani (who were engaged in pre-action correspondence and had solicitors) needed to be finalised, their conduct did not suggest that a written agreement was a pre-condition to a concluded agreement. She argued that the conclusion of such an agreement was one of the obligations to be carried out. As regards the shareholders’ agreement to be agreed between Mr Sharon and Mr Devani, she submitted that this was a matter to be dealt with after the transfer of the shares.[203]Mr Harman submitted that no legally binding agreement had been reached for the following reasons: 203.1. first, he referred to Mr Devani’s evidence in his witness statement and Mr Lalani’s oral evidence, where both refer to the agreement reached as being “an agreement in principle”. He argued that this phrase was a complete answer and showed that all parties knew that it was not intended that their oral agreement should be a binding agreement; 203.2. second, he said that the JV Partners’ words and conduct both before and after the meeting were inconsistent with an objective intention to create legal relations. These included: 203.2.1. the fractious nature of the JV Partners’ relationship and the heated exchanges at the 25 June Meeting at which Mr Sharon had become angry; 203.2.2. the developed practice of the JV Partners to record or seek to record significant agreements in writing, including the Warspite Debt Agreement, the proposed shareholders’ agreement, the emails recording the discussions in January 2021 and 11 June 2021; 203.2.3. Mr Devani’s repeated emphasis in the context of the disputes relating to the accounts that nothing would be agreed until he confirmed it in writing; 203.2.4. what he argued was a wide-ranging discussion on multiple matters at the 25 June Meeting, including Warspite, planning and project finance, and, in the context of which, Mr Devani accepted that some of the matters were to be formally agreed in a written settlement agreement between Mr Lalani and Mr Sharon and a written shareholders’ agreement between himself and Mr Sharon. As regards, the shareholders’ agreement, a draft agreement was already in circulation that had left the shareholdings blank and from which it could be assumed that the next draft shareholders’ agreement would likewise leave the shareholdings blank. Further, there were provisions in the draft shareholders’ agreement that related to the shares, including what a shareholder could do and how and when he could sell his shares, all of which was closely bound up with who owned the shares; 203.3. third, it was plainly reasonable for the parties to expect there to be further negotiations where: 203.3.1. the meeting had been held on a without prejudice basis and further discussions were to take place between the parties’ lawyers on a “without prejudice” basis, which is exactly what happened in the case of Mr Sharon and Mr Lalani’s whose lawyers continued to negotiate on this basis; 203.3.2. essential matters had still to be agreed, including the JV Partners’ respective contributions to date and how development costs would be funded going forward; 203.4. fourth, even if there had been the outward appearance of an intention to create legal relations, Mr Devani subjectively knew that Mr Sharon did not intend to create legal relations; 203.5. fifth, the essential matters which remained to be agreed rendered the alleged agreement incomplete and/or too uncertain to be binding; and 203.6. finally, there was no consideration provided by Mr Devani in circumstances where Mr Devani had already resolved not to pursue Mr Lalani for his share of the Warspite Debt because their families were close (if, indeed, Mr Lalani had not already paid Mr Devani the sum of £85,000 in connection with WWL).[204]In response to Mr Harman’s submissions, Ms Proferes argued as follows: 204.1. first, in the context, no weight should be attached to the use of the phrase “in principle”, given: 204.1.1. Mr Devani’s evidence that he understood that a binding agreement had been made at the meeting; 204.1.2. Mr Lalani’s oral evidence that he was clear that a deal had been done; 204.1.3. that neither Mr Lalani nor Mr Devani was a lawyer and there was no written draft document headed “Agreement in Principle”, nor indeed any evidence that those words were actually used by anyone at the time. The fact that Mr Devani and Mr Lalani thought that an agreement in principle had been made did not mean that they understood the legal implications arising from the use of this phrase, in the same way that Mr Devani and Mrs Jansari did not understand the legal significance of the term “HMO”; 204.2. second, the fact that there were still elements to be formalised did not of itself mean that the agreement was not binding, having regard to the applicable principles set out in Rotam Agrochemical Co Ltd v GAT Microencapsulation GmbH referred to in paragraph 199 above. The factors set out in the final paragraph of [143] of that case were met in this case: there was a commercial relationship between the parties; a meeting of minds and consideration which passed from Mr Devani to Mr Sharon, namely, forgoing payment of the sum of £85,000. As regards this sum, it was recorded in the Company’s accounts and there was no evidence that it had either been repaid to Mr Devani or that Mr Devani had decided not to pursue Mr Lalani for this sum; 204.3. third, in addition to agreeing to forgo payment of the sum of £85,000, Mr Devani provided non-monetary consideration in that he agreed to carry on the project with Mr Sharon, which was of real value to Mr Sharon, Mr Sharon having accepted in his witness statement that it was clear that Mr Devani and Mr Lalani were on “one side” and he was on the other. Between them, Mr Devani and Mr Lalani owned 66.7% of the shares and, as such, they could have outvoted Mr Sharon and removed him as a director. After the 25 June Meeting, Mr Devani and Mr Sharon had equal shares in the Company and neither could control the other; 204.4. fourth, the fact that the parties’ relationship was strained and fractious by 25 June 2021 should point in favour of, rather than against an intention to create legal relations. By this point, it was abundantly clear that Mr Sharon and Mr Lalani could no longer work together and the project was not progressing, despite attempts in January 2021 to agree a way forward. It was common ground that Mr Devani and Mr Sharon intended to work together after Mr Lalani’s exit, and until Mr Sharon refused to acknowledge the agreement as to the 50/50 split, they were moving together well in early 2022; 204.5. fifth, Mr Sharon’s requirement for the meeting to be “without prejudice” because he did not know what would be discussed makes no sense. Rather, it points to an expectation that negotiations would be taking place, in the same way that the parties had reached agreement on the dispute as to the value of works done on site at the 11 June 2021 which he had also asked to be “without prejudice”; 204.6. sixth, solicitors were involved in the Warspite Dispute, but only for Mr Sharon and Mr Lalani. Mr Sharon had also instructed Mr Smee as his solicitor in relation to the shareholders’ agreement, but Mr Devani did not instruct any solicitors until 2022; 204.7. seventh, whilst Mr Sharon relies on Mr Devani’s characterisation of him as angry at the 25 June Meeting as being a factor negativing contractual intention, this point carries no force as Mr Sharon’s evidence was that the meeting was positive and polite; 204.8. eighth, the discussions at the meeting were not wide-ranging, but were focussed on how Mr Lalani would exit the partnership, how the Warspite Dispute would be settled and how Mr Sharon and Mr Devani would continue going forward. The straightforward Settlement Deed formalised between Mr Sharon and Mr Lalani speaks for itself; 204.9. ninth, Mr Sharon has not particularised how it is alleged that Mr Devani subjectively knew that Mr Sharon did not intend to create legal relations; 204.10. finally, no essential matters remained to be negotiated. Mr Sharon agreed to pay Mr Lalani what he had paid in and they knew approximately what the figure was. Mr Devani’s position was that it had been agreed that he and Mr Sharon would share the costs of developing the Property equally (as had been agreed from the start) and that Mr Sharon would manage the Project. This was not a case like Rotam where there were very significant and complex issues not yet agreed nor a case like Georges v Revenue and Customs Commissioners where there had been wide-ranging discussions about a number of internal management issues.

Discussion

[205]Assuming that there had been agreement on the matters claimed by Mr Devani, the parties are agreed that the agreement was a tripartite agreement between Mr Devani, Mr Lalani and Mr Sharon. Therefore, either all of the agreement was a binding agreement with immediate effect from 25 June 2021 or none of it was.[206]I first have to decide whether or not there was any intention to enter into contractual relations on 25 June 2021. I do so, having regard to the principles set out in Rotam Agrochemical Co Ltd v GAT Microencapsulation GmbH.[207]In my judgment, applying the objective test, the parties did not have the necessary contractual intention to enter into a binding agreement on 25 June 2021, including a binding preliminary agreement. I set out my reasons below.[208]First, the evidence objectively shows that the agreement reached on 25 June 2021 was made subject to contract, even though that term was not expressly used by the parties. It was made subject to the terms of a settlement agreement being negotiated and agreed between Mr Sharon and Mr Lalani and embodied in a formal settlement agreement. This is seen from: 208.1. Mr Lalani’s oral evidence that after the 25 June Meeting they would continue “without prejudice discussions [my emphasis]” through their lawyers; 208.2. Mr Sharon’s evidence that there were to be further discussions between them, that Mr Devani said at the meeting “you guys can work it out” and that after the meeting Mr Lalani instructed Knights and he instructed CMS for this purpose; 208.3. Mr Devani’s written evidence where he refers to Mr Lalani and Mr Sharon negotiating terms of their settlement after the meeting, despite his claims that he understood that a binding agreement had been made; 208.4. Mr Lalani’s oral, and Mr Devani’s written, evidence where they both describe the agreement reached as having been “an agreement in principle”. Although these words were not expressly said at the meeting, they reflect what both of them understood was the effect of the agreement, an understanding that presumably derived from the fact that it was agreed that Mr Sharon and Mr Lalani would continue to have further without prejudice negotiations through their lawyers after the meeting. Had a binding agreement been made, it is difficult to see why Mr Devani and Mr Lalani, both of whom were businessmen who must have negotiated and entered into previous contracts, would only have understood the agreement to have been in principle only. 208.5. Mr Lalani’s oral evidence where he said that after the 25 June Meeting he telephoned his wife and told her, “I can get out of this” (thereby looking to the prospect of reaching a binding agreement), not that “I am out of this” (thereby confirming that he had already reached such an agreement).[209]Second, the Settlement Deed itself does not record that a binding oral agreement was made on 25 June 2021 and that the purpose of the Settlement Deed was to record the terms of that agreement and the further terms agreed between the parties. Further, the alleged waiver of the sum of £85,000 by Mr Sharon with immediate effect from 25 June 2021 is inconsistent with the provisions of the Settlement Deed as to how this sum was to be dealt with.[210]Third, there were still essential matters to be agreed as part of the tripartite agreement, including how development costs were to be paid if Mr Lalani left the Company, how and when repayment of Mr Lalani’s investment was to be made, how and when Mr Lalani’s interest was to be transferred to Mr Sharon, the issue of what claims were to be settled and whether or not Mr Lalani should be paid any interest on his investment. It is not claimed that any of these matters were agreed at the 25 June Meeting. However, I do not accept Mr Harman’s submission that the amount of Mr Lalani’s investment was also an essential matter that needed to be agreed. It seems to me that if it had been agreed that Mr Lalani’s investment was to be repaid, the amount of that investment was simply an accounting issue.[211]Fourth, had a binding agreement been made, in light of the parties’ practice to record important discussions or agreements between them in writing, particularly from about 2020, it is extraordinary that no one sought to record the agreement in any communication after 25 June 2021.The fact that no one did this and awaited agreement being reached between Mr Sharon and Mr Lalani on the terms that Mr Lalani was to leave the Company militates against there having been a prior binding agreement.[212]Whilst, in my judgment, no binding agreement was created on 25 June 2021, I should make it clear that I do not accept Mr Harman’s submission that there were wide-ranging discussions at the meeting from which the agreement could not be severed. I agree with Ms Proferes that there were no such wide-ranging discussions and that this case is entirely distinguishable from George v Revenue and Customs Commissioners. Further, I do not accept Mr Harman’s argument that the agreement was made when Mr Sharon was angry and that that militated against an intention to enter into contractual relations. I accept the submission made by Ms Proferes that as Mr Sharon’s evidence was that the meeting was positive and polite, the point carries no force.[213]The final issue that I must consider is, if there had been an intention to enter into contractual relations, whether consideration was provided by Mr Devani for the transfer of his shares. In my judgment, had the agreement been made, consideration would have been provided by Mr Devani in that he agreed to forgo payment of the sum of £85,000 by Mr Lalani at the request of Mr Sharon and therefore suffered a detriment. It is irrelevant that Mr Sharon himself did not receive a benefit and that the benefit, in fact accrued to Mr Lalani. I do not accept Mr Harman’s submission that no consideration was provided by Mr Devani because he had already resolved not to pursue Mr Lalani for his share. The burden of proof showing that this was indeed the case was not, in my judgment, satisfied by Mr Sharon.

Conclusion

[214]For all the reasons set out above, I dismiss Mr Devani’s claim.[215]As to Mr Sharon’s counterclaim, in light of my decision, I find that Mr Sharon is entitled to the declaration sought in paragraph (1) of the prayer that he is the beneficial owner of 66.67% of the issued shares and Mr Devani is the beneficial owner of 33.3% of the issue shares. Whether or not Mr Sharon holds any of his beneficial interest in the shares on trust for Mr Glynne is a matter between him and Mr Glynne and nothing in my judgment shall be treated as deciding on any claim that Mr Glynne might have against Mr Sharon concerning how Mr Sharon’s beneficial interest is held.[216]As to paragraph (2) of the prayer, although Mr Sharon no longer seeks the declaratory relief set out in this paragraph, it seems to me that from 2020, when Mr Devani demanded that his 33.3% shareholding be transferred to him, Mr Sharon had no valid reason to refuse to do so. There is no evidence that it was agreed, as a pre-condition to any transfer, either that the accounts first had to be agreed or that a shareholders’ agreement should be entered into. Had Mr Sharon continued to seek this relief, I would have refused it.[217]As to paragraph (3) of the prayer, it seems to me that this is unnecessary as Mr Devani has always accepted that he is liable to pay a third of the development costs.[218]Finally, I would like to thank both counsel for their very clear and helpful submissions.