FP Redhill Limited & Ors v Ashank Patel & Ors [2026] EWHC 77 (Ch)

[2026] EWHC 77 (Ch)

Case No BL-2021-000736

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

BUSINESS LIST (ChD)

Venue 7 Rolls Buildings, Fetter Lane

Date 19 January 2026

London EC4A 1NL

Before

MR JUSTICE MARCUS SMITH

Between

(1) FP REDHILL LIMITEDClaimants

(2) EQUITY REAL ESTATE (HINDHEAD) LIMITEDClaimant

(3) EQUITY REAL ESTATE (LEO) LIMITEDClaimant

(4) HIGHBARROW HOLDINGS LIMITEDClaimant

(5) EQUITY REAL ESTATE (RUSHWORTH) LIMITEDClaimant

(6) HMAF HOLDINGS LIMITEDClaimant

(1) MR ASHANK PATELDefendants

(2) MR MOHAMMAD BABAR IQBALDefendant

(3) MR IKRAMUL HAQDefendant

(4) EQUITY REAL ESTATE DEVELOPMENTS LIMITEDDefendant

(5) CAPSTAN CAPITAL PARTNERS LLPDefendant

(6) MOONLIGHT INVESTMENTS LIMITEDDefendant

(7) MR MUHAMMAD BHATTIDefendant

(8) ANJALJUN HOLDINGS LIMITEDDefendant

(9) MARKET FINANCIAL SOLUTIONS LIMITEDDefendant

(10) MR PARESH RAJADefendant

(11) PLAN 9 DESIGNS LIMITEDDefendant

(12) MR HARMINDER SINGH SOORDefendant

(13) MR AVNISH PATELDefendant

Hearing Heard on 23 June, 1 to 4, 9 to 11, 14-18 and 22-25 July 2025 with later written submissions provided on 30 August 2025 and 30 September 2025

Stephanie Thompson and Andrew Gurr (instructed by Peters and Peters Solicitors LLP) for Claimants

Harminder Singh Soor (in person, supported by ASR Solicitors) for Eleventh and Twelfth Defendants

Seb Oram (instructed by Clarks Legal LLP) for Thirteenth Defendant

Approved Judgment

This judgment was handed down remotely at 10.30am on 19 January 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

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[1]The Fakhruddin brothers Terms that I have underlined are defined in Annex 1 to this Judgment. – Husainy, Ali and Mohammad – are wealthy businessmen based in Dubai. Between 2016 and 2019, they invested about £20.5 million in five property development projects in England. The projects were recommended to them by the fourth defendant, D4 Equity RED. D4 Equity Red was run by three directors:(i) the first defendant, Ashank Patel (D1 Ash),

(ii) the second defendant, Mohammad Babar Iqbal (D2 Babar) and

(iii) the third defendant Ikramul Haq (D3 Ikram).

[2]I refer to these actors in this way (and other actors that I will come to describe) to enable them to be clearly identified and differentiated in what is a complex factual history, where there are several common names and many actors.

[3]The investments were effected through five special purpose vehicles or SPVs. Each SPV held title to any real property acquired. Each SPV operated a distinct project bank account. This was D4 Equity RED’s standard practice so far as its various development projects were concerned. It should not be thought that D4 Equity RED’s only business interests related to the Fakhruddin brothers. D4 Equity RED had other projects, financed by others, having nothing to do with the Fakhruddin brothers, but which also operated through SPVs. I shall, therefore, differentiate the SPVs in which the Fakhruddin brothers were interested (the Claimant SPVs) from the SPVs in which others were interested (the Non-Claimant SPVs).

[4]Five Claimant SPVs were set up by D4 Equity RED for the purposes of the Fakhruddin brothers’ five property development projects in England. Each of these Claimant SPVs is a claimant in these proceedings. Specifically, they are the first to fifth Claimants. In summary, the position was as follows: SPV Property acquired Bank account Directors The claimants alleged that the persons listed in this column were de jure and de facto directors. None of the parties before me disputed that the directors were as listed here, and nothing turns on the de jure / de facto distinction, which I do not explore further. See, in particular, Day 2/pp12ff. C1 Bracknell C1 Bracknell subsequently changed its name to FP Redhill Ltd, the name that appears in the heading to this Judgment. I shall use the name – Bracknell – that was used at the times relevant to this Judgment, as did the parties before me. Octagon House an office to residential conversion in Basingstoke. The purchase completed in May 2016. Metro Bank account numbered 19648486 (the C1 Account) D1 Ash D2 Babar D3 Ikram C2 Hindhead Innovation Court was an office to residential conversion (like Octagon House). The Old Post Office was a smaller historic building, ultimately converted into four flats. The purchases completed in around September 2016. Metro Bank account numbered 20019937 (the C2 Account) D1 Ash D2 Babar D3 Ikram C3 Leo Copenhagen Court was a property adjacent to Innovation Court in Basingstoke. The purchase completed in around December 2016. Metro Bank account numbered 20489825 (the C3 Account) D1 Ash D2 Babar D3 Ikram C4 Highbarrow Dunsty Farm is a 76 acre site in Aylesbury, Buckinghamshire. The development objective was to seek planning permission to build up to 650 housing units. The purchase of the site completed in December 2016. Metro Bank account numbered 21151755 (the C4 Account) D1 Ash D2 Babar D3 Ikram C5 Rushworth No property was acquired: the intention, which failed, was to acquire Broadlands. The deposit for the purchase was paid in May 2017, but the transaction never proceeded. Metrobank account numbered 20260238 (the C5 Account) D1 Ash D2 Babar D3 Ikram I shall refer to the first three Defendants – D1 Ash, D2 Babar and D3 Ikram – as the Directors when acting in that capacity for the First to Fifth Claimants.

[5]The Claimant SPVs were owned by the Sixth Claimant, C6 Hmaf, a BVI company owned by the Fakhruddin brothers. The Fakhruddin brothers, albeit indirectly (ie through C6 Hmaf), funded 100% of the capital of the First to Fifth Claimants. D4 Equity RED’s role was to source investment opportunities, arrange the property acquisitions and manage the planning consents and construction work.

[6]As noted in the table above, each Claimant SPV had a bank account, and statements recording transactions on those accounts were in the evidence before me. The Fakhruddin brothers were asked by the Directors from time-to-time to fund the Claimant SPVs via that Claimant SPV’s bank account. Payments were then made out of that account on the direction of one or more of the Directors.

[7]Mr Yousuf Hamid (Yousuf) is Husainy’s son. He was the Directors’ principal point of contact. It was to him that the majority of requests for money came; and it was to him that they provided progress updates in respect of the various projects. Yousuf had no experience of property development in the UK, but he did (at the material times, as now) run the family’s property development company in Dubai. His evidence was that relations between the Directors and himself (and so, to an extent, the Fakhruddin brothers) was a close and trusting one. (2). Verdi and D13 Avnish

[8]In the case of some – but by no means all – of the projects, the construction work on the projects was carried out (or, pace the Claimants, wrongfully or improperly carried out) by Verdi Construction Limited (Verdi). Verdi was incorporated on 17 December 2014 and did a lot of construction work for D4 Equity RED. The Thirteenth Defendant, Mr Avnish Patel (D13 Avnish) was a director of and a 25% shareholder in Verdi. Verdi was wound up on 28 August 2019, D13 Avnish W/S 1/[24]. and is not a defendant to these proceedings for that reason.

[9]Practically all, if not all, of Verdi’s work came from D4 Equity RED. By which I mean D4 Equity RED caused the relevant SPV to contract with Verdi. They were able to do so because the Directors would have been the directors of the relevant SPV, as they were in the case of the First to Fifth Claimants. (The converse is not true: D4 Equity RED used Verdi on some, but not all, of its projects.) Of the five projects financed by the Fakhruddin brothers, Verdi was contractually engaged in the construction of three:(i) Innovation Court (for C2 Hindhead);

(ii) The Old Post Office (also for C2 Hindhead); and

(iii) Copenhagen Court (for C3 Leo).

[10]The other work Verdi did for D4 Equity RED – or rather for SPVs associated with D4 Equity RED – is relevant to these proceedings, and it will be necessary to consider Verdi’s broader operations and dealings in the course of this Judgment, even though the documentation regarding such ventures is (through no-one’s fault) significantly lacking. For present purposes, what needs to be noted is that Verdi:(i) was involved in some, but not all, of C6 Hmaf/D4 Equity RED’s projects; but

(ii) was also involved in D4 Equity RED projects that had nothing to do with C6 Hmaf. In short, Verdi’s contractual relations straddled the Claimant and Non-Claimant SPVs. (3). D11 Plan 9 and D12 Singh Soor

[11]The Eleventh Defendant, Plan 9 Designs Limited (D11 Plan 9), was engaged by C4 Highbarrow as planning consultant in regard to the Dunsty Farm project. The Dunsty Farm project was, in vision, much more extensive than the other Claimant SPV projects. Whereas these other projects were essentially re-developments of single buildings, admittedly in some cases large buildings, with multiple units in them, the Dunsty Farm project contemplated the obtaining of planning permission for some several hundred residential (and other) units. Hence the ostensible need for a planning consultant. The Twelfth Defendant, Mr Harminder Singh Soor (D12 Singh Soor In court, D1 2 Singh Soor was addressed as “Mr Singh”, but much of the documentation refers to him as “Mr Soor”. The Judgment uses both names for clarity. ) was D11 Plan 9’s sole director and shareholder. (4). Nature of the claims advanced by the Claimants

[12]The essence of the Claimants’ case against the Directors and D4 Equity Red was concisely put in the Claimants’ Written Opening (Claimants Opening): Claimants Opening/[4]. Unbeknownst to the Fakhruddins, the Directors were operating what was, in effect, a Ponzi scheme. They asked the Fakhruddins to introduce funds to Cs to purchase and develop the sites. Although the sites were purchased, Cs’ funds were diverted back to Equity RED and the Directors, or used to progress other property developments in which the Directors and other investors they had recruited were interested…

[13]Verdi, D13 Avnish, D11 Plan 9 and D12 Singh Soor were all – so the Claimants contended – involved in this improper use of the Claimants’ monies. The causes of action asserted by the Claimants are various and multiple including:(i) breach of fiduciary duty;

(ii) unlawful means conspiracy;

(iii) dishonest assistance; and

(iv) knowing receipt. The prayer to the Claimants’ Re-Amended Particulars of Claim (PoC) sets these out fully at PoC/pp76ff. There was very little dispute about the relevant elements of these causes of action. Consideration of their elements, and which succeed and which fail, is left to the end of this Judgment. In substance, the Claimants’ claims stand or fall on the facts, and specifically whether the Defendants were, or were not, dishonest. Although some of the causes of action asserted can (technically) succeed without findings of dishonesty, the Claimants made no bones about the fact that their claims involved fundamental dishonesty on the part of the Defendants. I will, therefore, throughout the course of this Judgment, make specific findings on the question of (dis)honesty as regards the Defendants’ conduct.

[14]During the course of the trial, three particular sets of claims were canvassed and will require resolution in this Judgment: i) Improper Commission Claims. The Improper Commission Claims are instances where it is alleged the Defendants For ease of exposition, I shall refer to the Defendants generally at this point in the Judgment. However, as will be seen, not every Defendant was involved in every claim. extracted excessive commissions from the Claimants when the various properties were acquired on behalf of the Claimants. When the properties were acquired, the Directors represented that substantial commissions needed to be paid to agents in exchange for introducing the properties. Large portions of these commissions were, so it is contended, invented charges which, when paid by the Claimants, went into the pockets of the Defendants. The Improper Commission Claims are considered in Section F. ii) The Plan 9 Claims. In early 2017, D3 Ikram recommended to Yousuf that C4 Highbarrow retain D11 Plan 9 to coordinate and manage the various specialist consultants needed to make a planning application for Dunsty Farm. As has been described, D12 Singh Soor was D11 Plan 9’s sole director and shareholder. C4 Highbarrow paid just over £1 million to D11 Plan 9 between January 2017 and May 2019. C5 Rushworth also paid just over £100,000 to D11 Plan 9 on 31 August 2017, even though C5 Rushworth was not involved in the Dunsty Farm project. The Claimants allege that the monies received by D11 Plan 9 were not used for the purposes of making a planning application. To draw from the Claimants’ oral opening submissions: Day 2/pp8-9. We know from bank statements obtained from Barclays and transaction lists disclosed by Mr Singh, that Mr Singh used only about £200,000 at most of that £1.1 million to pay entities who, at first blush, appear to have done some legitimate work in relation to the planning application at Dunsty. As for the rest of the funds, a substantial portion was paid to companies controlled by Ikram, the second defendant, and the rest of the funds appear to be spent by Mr Singh on himself and his family. These claims are referred to as the Plan 9 Claims. They were disputed root-and-branch by D12 Singh Soor on behalf of himself and D11 Plan 9. The denial was a comprehensive one on the facts. It is unnecessary to say more than this about the defence for the present. The Plan 9 Claims are considered in Section G. iii) The Verdi Claims. These are considered in Section H. Although Verdi is not a Defendant, that is only because of its insolvent state. Verdi was appointed by C2 Hindhead and C3 Leo to do work on Innovation Court and the Old Post Office (in the case of C2 Hindhead) and Copenhagen Court (in the case of C3 Leo) on the recommendation of D2 Babar. D13 Avnish was the director of Verdi. The company was owned by D13 Avnish (25%), one Jason Verdi (now deceased, 25% I do not know to whom this shareholding devolved, and the point did not emerge as material at the trial. ), D2 Babar (25%) and D3 Ikram (25%). The claims are involving Verdi are referred to as the Verdi Claims: a) Yousuf says that the interests of D2 Babar and D3 Ikram in Verdi were never disclosed to him (or otherwise to the Claimants) when Verdi was appointed as construction contractor. Yousuf W/S 3/[75]. Yousuf gave evidence before me, and was not challenged on this. I accept his evidence. Over a two-year period (between September 2016 and September 2018) Verdi received just over £5.6 million from the Claimants. As the Claimants pointed out in oral opening, Day 2/p10. these payments did not just emanate from C2 Hindhead and C3 Leo, but also came from other Claimant SPVs, even though there were no contractual relations between these parties and even though Verdi was not doing any work for them. Verdi also received some £75,000 from D11 Plan 9 (who received this money from C4 Highbarrow). b) The monies received by Verdi fall into three classes. First, there are payments to Verdi by Claimant SPVs with whom Verdi was in contractual relations: C2 Hindhead and C3 Leo. On the face of it, there was an entirely proper explanation for these payments. They were made for the purposes of developing Innovation Court and the Old Post Office (for C2 Hindhead) and Copenhagen Court (for C3 Leo). These payments (the C2 and C3 Payments to Verdi) amounted to some £5,228,060. I should at this point record the constructive way in which counsel for D13 Avnish conducted themselves. The defence of D13 Avnish was conducted with great skill and force, but with a clear focus on points that were material to the defence of D13 Avnish’s interest. Where a dispute on the facts was unnecessary, because the point was clear, uncontroversial and/or immaterial, the court’s time was not wasted in having to resolve such matters. Thus, the cash flows were pleaded by the Claimants in helpfully great detail in the PoC, and were (I think without exception) uncontroverted by D13 Avnish. Of course, the allegations of dishonesty regarding the circulation of monies was hotly contested. It is worth noting that the maximum contractual entitlement of Verdi under the agreements it had with C2 Hindhead and C3 Leo was around £6,232,048.26. The Claimants say that Verdi performed, in terms of value provided, only a small fraction of the work that it had been paid for. The Claimants contended that “a substantial portion of those funds were transferred back to the directors or Equity RED or to Avnish Patel and the companies in which he was interested”. Day 2/p10. In other words, large parts of the C2 and C3 Payments to Verdi were (according to the Claimants) not used in the construction of Innovation Court, the Old Post Office or Copenhagen Court. The contention that Verdi did not (to put it neutrally) provide value for money was supported by the evidence of Mr David Emin, an expert witness called by the Claimants. c) The second class of monies received by Verdi were monies received from Claimant SPVs with whom Verdi had no contractual relations. These sums amounted to £411,000 and are referred to as the Other Claimant SPV Payments to Verdi. The Claimants contended that there was no justification for these payments to Verdi (and that D13 Avnish knew this and was dishonest). d) The third class of payment comprises payments to Verdi by D11 Plan 9 in the amount of £99,000 (the Plan 9 Payments to Verdi) e) The Claimants contended that all three classes of payment (ie(i) the C2 and C3 Payments to Verdi;

(ii) the Other Claimant SPV Payments to Verdi; and

(iii) the Plan 9 Payments to Verdi) were improper and that the manner in which the payments were made formed a part of a scheme to conceal the diversion of the Claimants’ funds to the Directors. It was alleged that D13 Avnish assisted in those breaches by causing Verdi to pay those monies on to the Directors. That assistance was said to be dishonest “because he [D13 Avnish] knew that Verdi wasn’t entitled to the payments; but that even if he thought there was a paper justification for some of the payments in the form of the contracts [with C2 Hindhead and C3 Leo] he knew that they were being diverted back to the directors and that wasn’t in the best interest of the SPVs or the Claimants”. Day 2/p11. f) Although in the case of the Plan 9 Claims, it is sufficient to note that these were root-and-branch denied by D11 Plan 9 and D12 Singh Soor on the facts, it is necessary to say more about D13 Avnish’s defence for it involves a number of complexities: i) Under the contracts between Verdi and C2 Hindhead and C3 Leo, Verdi was entitled to receive £6,232,048.36. It was contended by D13 Avnish that Verdi was entitled to receive payment of these sums in monthly instalments, which payments were not made in arrears by reference to work done on the projects but which were payable on a stipulated due date however much work had actually been done as at that date. There was thus a disjunction between the obligation to pay (on the part of the Claimant SPVs) and the obligation to perform (on the part of Verdi). ii) Those payments in fact made by the Claimants to Verdi – whether (i) the C2 and C3 Payments to Verdi, (ii) the Other SPV Payments to Verdi or (iii) the Plan 9 Payments to Verdi – totalled £5,738,060. They were within the amounts contractually due or to be due to Verdi. Under the terms of the various agreements, it was contended that D13 Avnish was entitled (as director on behalf of Verdi) to make free use of these monies, and it was said that he used them (amongst other purposes) to make loans to the Directors and/or to prop-up D4 Equity RED which was in financial difficulty and on whose continued trading Verdi itself depended. iii) Put another way, the monies circulating between Verdi and the D4 Equity RED SPVs needed to be seen as a single fund, and Verdi’s dealings with those monies (so it was contended) was entirely proper. As a result, the Claimants could only succeed against D13 Avnish to the extent that Verdi had received monies over and above its contractual entitlement, which it had not. This was D13 Avnish’s contention both as a matter of law and as a matter of how the Claimants had pleaded their case in the PoC. g) It will therefore be necessary to resolve a number of points in regard to D13 Avnish’s defence: (i) the true meaning of the payment provisions in the contracts between the Claimant SPVs and Verdi; (ii) D13 Avnish’s state of mind during the course of these dealings; and (iii) the true nature of the Claimants’ pleaded case, such that provided the payments to Verdi were contractually justified, the Claimants’ case must inevitably fail, because all of the payments to Verdi (whatever their “routing”) were within the contractual “ceiling”.

[15]This Judgment is principally concerned with these three classes of claim ie:(i) the Improper Commission Claims;

(ii) the Plan 9 Claims; and

(iii) the Verdi Claims. There are a number of other claims which can be dealt with more briefly in this Judgment because (although formally before the court) they involved only Defendants who were debarred from defending the claims against them or had otherwise had judgment entered against them. These claims are briefly described in Section A(6), after the identity of the other (essentially non-active) Defendants is set out. (5). Participating Defendants at trial and “non-active” Defendants

[16]Of the Defendants, the only ones actively participating at the trial were D11 Plan 9, D12 Singh Soor and D13 Avnish. Their position in relation to the Claimants has already been described, and it is the claims against them as well as their defences to those claims that this Judgment is primarily concerned with.

[17]As regards the other Defendants, D1 Ash and D3 Ikram had their claims struck out and were debarred from defending. It will be necessary to finally determine the claims against D1 Ash and D3 Ikram, but to the extent the active Defendants are involved (as they are in the Plan 9 Claims and the Verdi Claims) I will consider their position at the same time as I consider the substantive defences of D11 Plan 9, D12 Singh Soor and D13 Avnish. Although this is strictly more than these debarred Defendants are entitled to by way of due process, I can see no other way to be fair to the participating Defendants than to accord the Directors this consideration.

[18]D2 Babar, D4 Equity RED, the Sixth Defendant (Moonlight Investments Limited, D6 Moonlight) and the Seventh Defendant (Mr Muhammad Bhatti, D7 Bhatti) did not acknowledge service. Judgment in default was obtained against them. I need say no more about their position. The fact that judgment has been obtained against them says nothing about the live claims before me.

[19]The Claimants settled their differences with the Fifth Defendant (Capstan Capital Partners LLP, D5 Capstan), the Eighth Defendant (Analjan Holdings Ltd, D8 Anjaljun), the Ninth Defendant (Market Financial Solutions Limited, D9 MFS) and the Tenth Defendant (Mr Paresh Raja, D10 Raja) on terms unknown to this court. These outcomes are simply noted: they have no bearing on the matters that are before the court.

[20]At the pre-trial review, the Claimants made clear that – because of certain late disclosure from D11 Plan 9 and D12 Singh Soor – D12 Singh Soor’s wife, Mrs Singh, might(i) be involved in the claims here being advanced but

(ii) in circumstances where that involvement had been disclosed so late that it was not practicable to join her to these proceedings. I directed that the Claimants should not be prejudiced in any future proceedings by this failure to join Mrs Singh. To the extent I can, I avoid making any findings about Mrs Singh in this Judgment. No findings that I am obliged to make when considering the claims against D11 Plan 9 and D12 Singh Soor can be binding on her.

[21]Another character who is not a Defendant, but who features significantly in the Plan 9 Claims, is a Mr “Bob” Kahlon (Mr Kahlon). As in the case of Mrs Singh, I will seek to avoid making findings in regard to Mr Kahlon (although this is a taller order than in the case of Mrs Singh). There was no suggestion before trial by the Claimants that Mr Kahlon might subsequently have to be joined. However, it may be, in light of the findings made in this Judgment, that this question will have to be re-visited. (6). Secret commission in the purchase of a family home in Knightsbridge

[22]This claim concerns only D1 Ash and D3 Ikram. It is a claim that they secured a secret commission for themselves when they were acting as agents for the Fakhruddin brothers in their purchase of a family home in Knightsbridge. This is referred to as the Ovington Claim, because the home was in Ovington Square in Knightsbridge.

[23]I heard no evidence in regard to this claim, since none of the relevant parties were before the court to give such evidence. I was briefly addressed on the Ovington Claim in closing by the Claimants. The claim has been pleaded out by the Claimants in the PoC, and they have adduced evidence in support. In these circumstances, it is right that judgment be entered against D1 Ash and D3 Ikram, who were (as I have noted) debarred from defending the claim. I am satisfied that on the material before me the Ovington Claim has been made out. B. EVIDENCE BEFORE THE COURT (1). Factual evidence

[24]In the course of the trial, I heard evidence from the following witnesses, listed in the order in which they were called before me:(i) Day 4: Mr Roger Waddams, Mr Simon Fryer and Mr Nicholas Coote;

(ii) Day 5: Mr Nirav Shah, Ms Surbhi Veer and Mr Palvinder Gill;

(iii) Day 6: Yousuf;

(iv) Day 7: the Fakhruddin brothers, Husainy, Ali and Mohammed and Mr Munim Farid;

(v) Days 8, 9, 10 and 11: D12 Singh Soor;

(vi) Days 11, 12 and 13: D13 Avnish.

[25]I now describe the evidence of the witnesses I heard from in greater detail. The order in which I consider the witnesses is a rational and not a chronological one: Evidence from the “investor” side i) Mohammad Fakhruddin. Mohammad is one of the Fakhruddin brothers. His evidence was given in Hindi and I received it by way of translation. His statement is dated 4 November 2024: Mohammad W/S 1. He described his family’s investment in the Claimant SPVs. It is clear from his statement and from the evidence that he gave before me that he operated at arm’s length from these investments and he had very little useful evidence to give. This is in no sense a criticism, merely a reflection of his role. He confirmed – to the extent he was able – the evidence of Yousuf. He was an honest witness. I accept his evidence. ii) Husainy Fakhruddin. Husainy is another of the Fakhruddin brothers. His evidence was also given in Hindi and I received it by way of translation. His statement is dated 15 November 2024: Husainy W/S 1. He also described his family’s investment in the projects. His evidence was a little more detailed than that of Mohammad, and he described the investments in Octagon House, Innovation Court, Copenhagen Court, Dunsty Farm, Broadlands (which never proceeded), as well as the Ovington Claim, including the discovery of the financial irregularities that lead to these proceedings. He was an honest witness. I accept his evidence. iii) Ali Fakhruddin. Ali is the third of the three brothers. He gave a witness statement dated 24 December 2024 (Ali W/S 1), in which he described the relationship the Fakhruddin brothers had with D4 Equity RED and the investments that the brothers made. He also described when he sensed something was going wrong with the projects. He was an honest witness. I accept his evidence. Although his statement is the most detailed of the three Fakhruddin brothers, it is clear that none of the brothers exercised any great control over D4 Equity RED or the projects being conducted by D4 Equity RED on their behalf. iv) Yousuf Hamid. Yousuf is the son of Husainy and the CEO of Fakhruddin Properties Ltd. His third witness statement, Yousuf W/S 3, was the relevant statement before the court and is dated 24 December 2024. In it, he described his role in the Claimant SPV investments. His statement is the most detailed narrative from the “investor” side. He gave evidence about high “advisory” fees charged by D4 Equity RED, relations with Verdi, the various developments in which the Fakhruddin brothers invested and the introduction of D11 Plan 9. He described how he and the brothers came to be concerned about progress and the discovery of financial irregularities. He was a careful and reliable witness, and I accept his evidence. Evidence concerning the Improper Commission Claims v) Roger Waddams. Mr Waddams is an independent real estate professional who gave evidence on behalf of the Claimants in a witness statement dated 18 December 2024 (Waddams W/S 1). He described how he introduced various properties to D4 Equity RED, in particular Octagon House, Innovation Court, and Copenhagen Court. Mr Waddams was a straightforward and honest witness giving evidence on uncontroversial points (so far as the active Defendants were concerned). I accept his evidence. vi) Simon Fryer. Mr Fryer is a director of Fryer Commercial Ltd, giving evidence on behalf of the Claimants regarding the acquisition of Octagon House on behalf of C1 Bracknell. His company specialises in offices and industrial premises transactions. His first and only witness statement was dated 6 November 2024 (Fryer W/S 1). Mr Fryer was a straightforward and honest witness on uncontroversial points (so far as the active Defendants are concerned). I accept his evidence. vii) Nicholas Coote. Mr Coote is a former director of Lambert Smith Hampton, a commercial property agent. He gave a statement on behalf of the Claimants dated 11 November 2024 in regard to the marketing of Octagon House (Coote W/S 1). Mr Coote was a straightforward and honest witness on uncontroversial points (again, so far as the active Defendants are concerned). I accept his evidence. The Plan 9 Claims viii) Harminder Singh Soor. D12 Singh Soor gave a number of witness statements in these proceedings. Most were to do with interlocutory matters. D12 Singh Soor wanted these statements admitted as part of his evidence, and they were. However, given that they related to interlocutory matters, they are relevant as background only. D12 Singh Soor’s substantive witness statement was dated 7 April 2025 (D12 Singh Soor W/S 2). D12 Singh Soor gave evidence over three days. He represented himself and D11 Plan 9. In the most fundamental way he denied the allegations made against him by the Claimants, and it would be inappropriate to say more about his evidence at this stage. Obviously, his evidence receives detailed consideration in the context of the (very serious) allegations that were put to him. During the course of the trial, I treated D12 Singh Soor as a litigant in person, and extended him all appropriate latitude. In particular, D12 Singh Soor was in the awkward position of appearing both as advocate and as a witness in his (and D11 Plan 9’s) defence. It was necessary to ensure that the important distinction between the giving of evidence, the cross-examination of other witnesses and the making of submissions was respected. The point was addressed on Day 2/p87. I am grateful to all the parties for the assistance and cooperation that I was given in managing this issue. I should also say that given the seriousness of the allegations made against him, which were properly put in cross-examination, D12 Singh Soor conducted himself with dignity, courtesy and politeness in what can only have been trying circumstances. ix) Nirav Shah. Mr Shah is a chartered surveyor and presently a consultant for the Fakhruddin Group. He gave evidence for the Claimants in a witness statement dated 29 November 2024 (Shah W/S 1). At the relevant times, he worked for D4 Equity RED in relation to the various investment projects described above. In doing so, he came to know the Fakhruddin brothers. He provided helpful background evidence as regards D4 Equity RED’s operations, but his most important evidence concerned the operation of D4 Equity RED’s “dropbox” account (the Dropbox), to which I shall make more particular reference below. Despite his association with D4 Equity RED, no allegations of dishonesty were made against Mr Shah personally by any of the “active” Defendants. He was a straightforward and honest witness, and I accept his evidence. x) Surbhi Veer. Ms Veer is a business analyst, who formerly worked as a legal manager at various companies and firms. She gave evidence in a witness statement dated 22 November 2024 on behalf of the Claimants (Veer W/S 1). At the relevant times, she worked for the Fakhruddin brothers in connection with the investment with D4 Equity RED. She describes a meeting in 2019 with D11 Plan 9 and D12 Singh Soor, and sets out her concern about irregularities in the Dunsty Farm project. She was called on Day 5 (4 July 2025) via videolink. She was cross-examined by D12 Singh Soor and I consider that she gave honest evidence. However, I attach relatively little weight to after the event meetings which were relied upon by the Claimants effectively as admissions against interest by the Defendants. That is no reflection on the witnesses giving evidence about such meetings, but rather an indication of my preference to attach greater weight to the contemporaneous materials (and to the oral evidence relating to events at the time) rather than after-the-event conversations. The Verdi Claims xi) Avnish Patel. D13 Avnish gave two witness statements on his own behalf dated 24 January 2025 (D13 Avnish W/S 1) and 26 June 2025 (D13 Avnish W/S 2). He gave evidence over three days. I have described the nature of D13 Avnish’s defence already. D13 Avnish gave evidence consistent with that defence. As in the case of D12 Singh Soor, it would be inappropriate to say more about his evidence at this stage. His evidence receives detailed consideration in the context of the (very serious) allegations that were put to him. xii) Munim Iqbal Farid. Mr Farid is an independent construction surveying professional, the sole director of Consult Build Ltd. He gave evidence on behalf of the Claimants in a first witness statement dated 20 September 2024 (Farid W/S 1) and a second witness statement dated 27 November 2024 (Farid W/S 2). He describes how, in about July 2016, he was approached by D3 Ikram to work part time for D4 Equity RED, which he did, and in doing so he worked with Verdi. He was involved in the Innovation Court and Copenhagen Court projects. His evidence describes the state of the sites at various dates, supported by photographic evidence. This material goes to inform the expert evidence of Mr Emin on the value of the work done at these sites by Verdi. I accept his evidence. xiii) Palvinder Gill. Mr Gill was a site-based construction manager who worked for D4 Equity RED between 2015 and 2019. He gave a witness statement on behalf of the Claimants dated 23 January 2025 (Gill W/S 1). He was only indirectly involved in the Fakhruddin brothers’ investment, and that involvement was only administrative and to do with invoicing and payments. He was familiar with Verdi. He was called to give evidence on Day 5 (4 July 2024), and was a brisk and engaging witness, who gave crisp and clear answers to the questions put to him. No allegations of dishonesty were put to him, and I accept his evidence. I have considered all of the evidence of these witnesses. As will be seen from the Judgment, the key witnesses were D12 Singh Soor and D13 Avnish, followed (at some distance) by Yousuf, The other factual witnesses were rather less significant.

[26]D3 Ikram was, as I have described, debarred from defending. From time-to-time over the course of the trial, the possibility presented itself of D3 Ikram giving evidence on behalf of D11 Plan 9 and D12 Singh Soor in a witness statement he had provided dated 7 April 2025. Had he attended, I would have heard from him to the extent that he could assist in the defence of D11 Plan 9 and D12 Singh Soor. In the event, D3 Ikram did not attend court and gave no evidence. I put the statement he submitted (which I read) out of my mind. (2). Expert evidence

[27]One expert gave evidence on behalf of the Claimants. This was Mr David Emin of Quantum Experts, whose specialist field was quantity surveying and construction. I have referred to his evidence at [14(iii)(b)] above. He gave a single report (dated 12 December 2024, Emin Rep 1), which was however updated to include reference to certain, later, materials. The report assesses the value of works completed by Verdi at Innovation Court and Copenhagen Court at that point in time when Verdi’s involvement in those projects ceased. Mr Emin was an obviously competent and capable expert. His evidence on the value of work done at the Innovation Court and Copenhagen Court sites was not the subject of a root-and-branch challenge on the part of D13 Avnish, but nor was it accepted by D13 Avnish. Whilst acknowledging that Mr Emin was given a particularly challenging task in assessing, from secondary materials, the value of work done by Verdi on these sites, I accept Mr Emin’s evidence that the work done on these sites fell very far short of what Verdi had been paid assuming a conventional interpretation of these agreements. Obviously, it will be necessary to resolve the issue of interpretation as to the basis on which Verdi was paid, which was not a matter for Mr Emin but for me (as he and D13 Avnish both accepted). I should say that although I use Mr Emin’s precise calculations as to value of work done in this Judgment, I consider that there is considerable “softness” in these figures. I would be reluctant to accept them as absolutely precise, and do not do so. But that was not the purpose of Mr Emin’s evidence: the essential purpose of his evidence was that assuming Verdi was paid on one of the “usual” contractual bases (which was controversial: I will come to describe these bases at Section H(10)) the work done by Verdi in terms of value added to the sites fell far short of what Verdi was paid. On that basis, I accept as correct Mr Emin’s evidence. Mr Emin was also asked in cross-examination a number of questions about building practice and the terms on which construction projects were conducted. Mr Emin was – understandably – quite cautious, even defensive, in the evidence he gave in response to these questions. This was understandable, because these questions sat at the borderline of building practice and the meaning of building contracts, the latter point being out with Mr Emin’s expertise. I consider Mr Emin’s answers to have been in the high traditions of expert evidence in these courts, and his cautious – even defensive responses to have been entirely understandable. His evidence on these points was helpful background but (and I say this with no disrespect to Mr Emin) of limited use given the issues arising before me. (3). Documentary evidence

[28]I shall refer to the relevant documentary material as appropriate during the course of this Judgment. There are, however, a few points that I should deal with now: i) The Dropbox. The Dropbox was described by Mr Shah in Shah W/S 1: [24] Around 2014 when I first started working with Equity RED there was no formal data archive or shared drive. I set up a Dropbox folder on my existing Dropbox account and initially shared it with [Mr Gill] as a way of sharing files and documents (the “Equity Folder”). Later when an increase in storage was required and a larger fee payable, I requested reimbursement for this cost. This is why I had used my own email address for this and paid for it myself initially. The Equity Folder was shared with the directors in July/August 2014 (shortly after Equity RED was incorporated) and all team members as they joined the business. The directors continued to have access throughout. I never at any point while Equity RED was manager removed a director’s access. I recall there was one occasion where Ashank removed himself from the Equity Folder when he was being investigated for money laundering. I remember telling him a file was on the Equity Folder and he said he was no longer on the Equity Folder and for me to email him the file. I believe I sent him a link or he requested access again. [25] The Equity Folder was for the Equity RED team. As I have said, every team member had access to it (so about eight to ten of us at any given time) including the directors and, as far as I know, it was used by everybody to store documents they received or were working on. As I understood it, it was Equity RED’s main operating database for the business, which everyone used. There was a folder for every project. In each project there was an “admin folder”, a “planning folder”, there were folders for documents relating to the construction, for bank statements. I was the controller of the Dropbox. As I recall, no documents were intentionally deleted from it. [26] I was later asked to create a separate folder in my Dropbox account containing subfolders of documents to share with the investors. There was one folder per investor, each containing a subfolder per project, so in the case of the Fakhruddin, there was one Fakhruddin investor folder (the “Fakhruddin Folder”), which contained one sub-folder for each of Octagon House, Copenhagen Court, Dunsty Hill, the Broadlands, Innovation Court, and the Old Post Office. Each of the Equity RED directors, as well as Yousuf Hamid, were granted access to the Fakhruddin Folder. It was only when Equity RED was terminated as manager of the Fakhruddin project that I removed their access to the Fakhruddin Folder on Yousuf’s request. Each investor sub-folder had final versions of documents that were contained in the Equity Folder. So, for example, there might be multiple versions of financial appraisals in the Equity Folder, but the final version would be copied in the investor subfolder. The investor subfolder would also contain things like bank statements or the insurance certificate for sites. Two points must be made as regards the Dropbox: a) The combined facts(i) that Mr Shah operated the Dropbox through his personal account and

(ii) that Mr Shah migrated his employment from D4 Equity RED to the Fakhruddin brothers meant that disclosure of the contents of the Dropbox (a D4 Equity RED management tool) actually fell to the Claimants. The Claimants undertook disclosure of the contents of the Dropbox responsibly, recognising that disclosure of documents relating to non-Fakhruddin related matters should not be disclosed, but that the content of what Mr Shah called the Equity Folder and the Fakhruddin Folder would have to be reviewed, and relevant documentation disclosed, whilst protecting material that was properly third party material. In the run-up to trial, D12 Singh Soor suggested that there were many significant documents (in particular reports relating to the Dunsty Farm project) that had not been disclosed. Although I was satisfied that the Claimants had conducted the disclosure exercise properly, I suggested (I did not order) a further review of the Dropbox using certain keywords. This produced some further (but not very material) documentation. I am satisfied that all material in the Dropbox responsive to the disclosure orders made has been disclosed by the Claimants into these proceedings. b) I am also satisfied that the Fakhruddin brothers, through Yousuf and no doubt other employees in the Fakhruddin brothers’ organisation, were assiduous in reviewing the Fakhruddin Folder within the Dropbox. This was evident from queries that the Fakhruddin brothers (generally through or by Yousuf) raised with the Directors. I proceed on the basis that the Fakhruddin brothers were contemporaneously aware of the changing content of the Fakhruddin Folder from their review of its content from time-to-time. Save where the context otherwise requires, I shall simply refer to the Dropbox generally, without differentiating between folders and subfolders. ii) Deficiencies in disclosure. There were a number of deficiencies in the disclosure on the part of the Defendants (to the extent disclosure was provided at all) which has not made fact-finding straightforward. I shall refer to these deficiencies specifically at the appropriate points in this Judgment, but in general terms the issues were: (i) I did not have a complete run of the relevant bank statements, which rendered following payments that the Claimants said were illegitimate hard; (ii) some documents (for instance the emails under cover of which D11 Plan 9’s invoices were provided) were not produced. It will be necessary in certain cases for me to consider why these documents were not provided. In the case of the D11 Plan 9 invoices, this may be because they have been lost, never existed or because they existed, but their content was damaging and so they were deliberately not disclosed;

(iii) in some cases, documents were produced as PDFs without meta-data (ie not in their original format) notwithstanding court orders that documents be produced in native format;

(iv) in some cases (for instance the WhatsApp “budget thread” – see Day 9/p66) documents appear to have existed, but were not disclosed;

(v) there was no disclosure from Verdi. This was simply because of Verdi’s insolvency, and no-one is to blame for this (nor are any inferences to be drawn). C. STRUCTURE OF THE JUDGMENT

[29]The rest of this Judgment considers the following points in the following

[30]This is a case that involves allegations of dishonesty which, if unsuccessful, are likely to result in all of the Claimants’ claims – including claims that do not necessarily require dishonesty to be established That is because rejection of the dishonesty allegations would involve findings of fact so inconsistent with the Claimants’ overall contentions that it is impossible to see how any claims could survive. Of course, the extent of any dishonesty is equally important, and will affect which claims succeed and which fail. In particular, as the Claimants recognised, it is perfectly possible for findings of dishonesty to be made against the Directors, whilst exonerating D11 Plan 9, D12 Singh Soor and D13 Avnish. – failing. Accordingly, I will make findings of dishonesty during the course of this Judgment as and when appropriate. It is therefore right to set out now the legal test for dishonesty.

[31]The test for dishonesty is articulated in the decision of the Supreme Court in Ivey v. Genting Casinos (UK) Ltd.

[2017] UKSC 67

. Where dishonesty is in question, the fact-finding tribunal must first ascertain subjectively the actual state of mind of the (allegedly dishonest) individual’s knowledge or belief as to the facts. Once the individual’s actual state of mind as to knowledge or belief as to facts is established, the question of whether their conduct was honest or dishonest falls to be determined by the fact-finder by applying the objective standards of ordinary decent people. There is no requirement that the individual in question must appreciate that what they have done is, by those standards, dishonest. E. THE BACKGROUND FACTS (1).

Introduction

[32]This Section sets out the uncontroversial background facts, before proceeding to a consideration of the three claim groups that were contentious before me. (2). The Fahkruddin brothers’ business

[33]The family of the Fakhruddin brothers had been in business in Dubai for many years. The business included property development in the UAE through Fakhruddin Properties Limited, which was Yousuf’s main responsibility. Yousuf W/S 3/[6]. The family held conservative religious beliefs, one of which was that they could not make investments that earned interest. This rendered real estate investment attractive. Yousuf W/S 3/[7]. The family decided to diversify into the UK. Yousuf was the natural person to develop this part of the business, because he had a UK passport, had command of reasonable English and was a frequent visitor. Yousuf W/S 3/[7]. However, Yousuf had not really been exposed to the UK property market, and was inexperienced in this area of business. Yousuf W/S 3/[8]. (3). Relations between the Defendants

[34]The Directors clearly knew each other through their association in D4 Equity RED. There was not, however, very much information about how they came to associate, as none of D1 Ash, D2 Babar or D3 Ikram gave evidence before me. Nor can very much be said about the relationships between these Defendants and the other “non-active” Defendants. There was, clearly, some sort of relationship between the Directors and Mr Kahlon, but beyond its existence, there is nothing more to be said on the basis of the evidence before me.

[35]D12 Singh Soor became involved with D4 Equity RED through Mr Kahlon. He was working as a legal consultant with Morgan Mark Solicitors. Mr Kahlon and his wife were clients of that firm, and they got to know one another. D12 Singh Soor W/S 2/[6]. The relationship was sufficiently close for Mr Kahlon to invite D12 Singh Soor to participate in D4 Equity RED’s projects: D12 Singh Soor W/S 2/[9]. During 2016 Bob had discussed the possibility of the development of land and property and expressed a wish for me to get involved. Although I had other business commitments and was fairly busy in my legal work and with other clients, towards the middle of 2016, I agreed to help him with future projects on the strict condition that I would only be required to allocate immediately only about 2 to 4 hours of my time per week on the management of the project.

[36]D13 Avnish was good friends with D2 Babar, whom he had known since college in 1985. D13 Avnish W/S 1/[4]. D2 Babar, D3 Ikram and D13 Avnish were united by a shared ownership of Verdi, in which they each had a 25% stake. Verdi, as I have already described, received most, if not all, of its business from D4 Equity RED, in which company D2 Babar and D3 Ikram were involved as Directors. There is thus a mismatch between the Directors (comprising D1 Ash, D2 Babar and D3 Ikram) and those Directors participating as shareholders in Verdi (limited to D2 Babar and D3 Ikram). (4). The initial introduction

[37]D4 Equity RED and the Directors were indirectly introduced to the Fakhruddin brothers in late 2015 by an accountant (Mr Raj Soneji) who had done work for them. Yousuf W/S 3/[9]. The Directors came to introduce business to the Fakhruddin brothers in a manner described by Yousuf in Yousuf W/S 3: [10] My role in relation to the family’s UK property investments was basically a liaison between the family and the developers. I had overall responsibility for bringing property investment proposals to the family, to advise the family on how to proceed and then to follow up with the investment and see what is happening. The Equity guys sometimes gave presentations about the UK properties directly to the brothers when they came to Dubai, or on site visits, but on a day-to-day basis I dealt with them. [11] All of the UK property investments were made through special purpose vehicles owned by [C6 Hmaf], which was a BVI company for group investments abroad. Hmaf is owned jointly by my father and uncles and they controlled it as shareholders and directors. [12] My father and uncles acted as a sort of ‘board of directors’ for the family, and any decision to invest in projects would be joint decisions. They were involved when a big decision needed to be made, but I was the person taking care of real estate to make things move along and execute their decisions. Financial decisions and so on would be made at their level, but operationally if there were small things that needed to be considered I would take care of that. My father would also take care of purchasing foreign currency, that was completely his thing. [13] When I talk about a ‘board’, it’s not a very corporate structure, it’s a family run business. Decisions weren’t always taken at a board meeting, where everyone signs off on something and it’s documented in minutes. It didn’t work that way. Things were dynamic, sometimes very regular, sometimes not. What I really mean by a ‘board’ is that one or two directors would look at things with me, and they will be making the right decisions for all of us. It’s not like everyone is at the same office building and we are meeting together on a daily basis. If one brother was taking care of something the others might leave him to it. [14] I fit into that with the projects I do, it is understood that I’ll do things to make sure everything underneath is going smoothly, and there are checks and balances where they take the decisions. It’s all based on understanding and trust.

[38]The business model between the Fakhruddin brothers and D4 Equity RED was based on a profit share, where the Fakhruddin brothers funded the purchase of properties and their development, and D4 Equity RED sourced those properties and did the development. Yousuf W/S 3/[16]. D4 Equity RED’s model generally involved (in the case of Non-Claimant SPVs) the use of bank funding and investors. In the case of the Fakhruddin brothers, all finance came from them via C6 Hmaf. Yousuf W/S 3/[16]. There was no bank lending in relation to the Claimant SPVs, partly because the Fakhruddin brothers had the money and did not need to borrow, but mainly because of their religious beliefs.

[39]In effect, D4 Equity RED was the “working partner”, and the Fakhruddin brothers the “resting partner” in this arrangement. Yousuf W/S 3/[19]. Generally speaking, Yousuf dealt with the Directors of D4 Equity RED. Yousuf W/S 3/[20]. Over time, the relationship became a closer, less business-like, one: Yousuf W/S 3/[21]. As matters went on and we worked with Ashank, Ikram and Babar, the relationship got more family-like. We started inviting them to our homes in Dubai and England, we shared meals together and started to have meetings at home. The relationship got very close. With all three of them it was very friendly and very cordial and a family-like relationship. It was much more personal and not like I would usually deal with clients or businesspeople, for example I would never have invited an ordinary business contact to come to our home. They communicated in person, over the telephone and via WhatsApp.

[40]Although there was a trusting relationship, in particular as between Yousuf and the Directors, it is quite clear (as I have already noted) that Yousuf and/or the organisation around him were assiduous in checking the documentation produced (generally via the Dropbox) and (as appropriate) raising queries with the Directors. (5). Use of SPVs and the ADMAs

[41]As has been described, D4 Equity RED used SPVs for the purposes of organising the framework within which development projects were undertaken. This was the general practice of D4 Equity RED and the fact that this framework was adopted in the case of the Claimants is nothing more than a consistent specific implementation of a general practice.

[42]The final understanding of each project tended to be put into an Asset and Development Management Agreement (or “ADMA”) between D4 Equity RED and the relevant SPV. Yousuf W/S 3/[25]. This was the case with all of the Claimant SPVs, with the exception of C4 Highbarrow (the Dunsty Farm project) where there was no ADMA. By way of example, I was taken to the ADMA between D4 Equity RED and C1 Bracknell. Day 2/pp13ff. According to the terms of this ADMA, which was representative: i) C1 Bracknell appointed D4 Equity RED to manage the project (here: Octagon House) in return for a percentage of the profit earned. ii) The ADMA contains (in clause 3.2) the “usual” fiduciary obligations of an agent to act in the interests of the principal, including as to the disclosure of conflicts of interest. It is unnecessary to set these out. F. THE IMPROPER COMMISSION CLAIMS (1). Introduction

[43]The Claimants contend that the Directors dishonestly inflated the commission that they charged the Claimants in respect of the properties they purchased for the Claimants. This occurred, so it is claimed, in relation to the following properties: i) Octagon House (C1 Bracknell). ii) Innovation Court (C2 Hindhead). iii) The Old Post Office (C2 Hindhead). iv) Copenhagen Court (C3 Leo). v) Dunsty Farm (C4 Highbarrow). In other words, the only project that was not subject to excessive commissions was Broadlands (C5 Rushworth), which did not proceed. (2). Octagon House (C1 Bracknell)

[44]The project was the subject of a financial model provided to the Claimants prior to purchase. Thus, in an email dated 5 April 2016, D3 Ikram provided a project cash flow in respect of Octagon House. This email was sent to a Mr Scott Ewen (the then CFO of C6 Hmaf) and Yousuf (and is also likely to have been on Dropbox: for the future, when considering communications between the Defendants and the Claimants, I shall not attempt to trace exactly how documents moved from one side to the other, but I am satisfied that they did, save where the point matters and I specifically say they did not.

[45]Yousuf describes Octagon House as an office building in Bracknell. The Directors’ plan was for C1 Bracknell to buy the property, get planning permission for converting it to residential use and then sell the property with the benefit of the planning permission. Yousuf W/S 3/[26]. In accordance with the general relationship between D4 Equity RED and the Fakhruddin brothers, the latter took a “back seat”. Yousuf described the process in the following terms: Yousef W/S 3. [28] The purchase price for the property was proposed to us as completely negotiated by them. They gave us a complete proposal: this is how we buy it, develop it and sell it, etc. They also gave details about the proposed purchase and development costs by email. [29] I remember going to the site after receiving the proposal in March and before I recommended that we go ahead with the project. I brought the site and the proposal to my father and uncles, we talked about the potential for profits, how we can do it, and eventually agreed to go ahead with it. … [30] The detailed terms around profit-sharing and development were in the ADMA…

[46]As has been described, each Claimant SPV The practice was no doubt exactly the same as regards the Non-Claimant SPVs, but the present focus is on the Claimant SPVs. has its own bank account, into which C6 Hmaf would make payments in and from which D4 Equity RED would make payments out. Although the Fakhruddin brothers’ initial thinking was that “the bank account should be in our control as we were making payments and the company was in our name”, Yousuf W/S 3/[34]. it was generally D1 Ash who set up the bank accounts and operated them. Yousuf W/S 3/[34]. The general practice was for D1 Ash to ask the Fakhruddin brothers to make payments into a particular SPV’s bank account and then for D1 Ash to make the onward payments. Yousuf W/S 3/[37]. I should say that I attach little significance to this singling out of D1 Ash. The Directors were all equally responsible for the conduct of the Claimant SPV’s affairs, and the fact that one director may have taken the lead on certain matters is neither here nor there.

[47]Obviously, this process entailed and implied a high degree of trust on the part of the Fakhruddin brothers, but the trust was not blind. Through the Dropbox, Yousuf (or someone employed by the Fakhruddin brothers) would see the relevant documents – including bank statements – and would query matters that looked in need of explanation: Yousuf W/S 3/[38]. Even though we did have some access to see the bank statements, if we ever queried these things, they would always have an explanation. They had so many companies, and because we weren’t managing the project we would trust them when they would tell us “this is for planning, this is construction, for a survey” or whatever. We would accept it saying those kinds of expenses were ok.

[48]For example, D4 Equity RED would, by way of one of the Directors, indicate that cash needed to be injected into a Claimant SPV’s account. Thus, in relation to C1 Bracknell and the Octagon House project, an email request was made in the following terms: We have a total cash requirement for the month of April of £790,747 which is the purchase exchange and fees for consultants on purchase and technical input on the design/construction process

[49]The email attached a budget, containing the following figures: Purchase price The term used is “site value”, but purchase price was meant, as can be seen from the sale and purchase agreement for Octagon House, which was in the amount of £2,350,000. £2,350,000 81.6% Other costs There is no need to differentiate these, they comprised items like stamp duty, legal fees, etc. £128,150 4.5% “Site advisors fees” £400,000 13.9% Total purchase costs £2,878,150.00 100%

[50]D1 Ash emphasised the importance of paying agent’s fees. An internal C6 Hmaf email records him telling Mr Ewen (who was reporting to Yousuf) that “[h]is big concern just now is the first of the 2 payments…As the transaction has now finished the agents require their fees to be paid. He is concerned about his personal reputation with these agents in terms of his other ongoing business”.

[51]Many documents were sent to the Claimants containing the figure of £400,000: it is unnecessary to refer to these documents, but it is quite clear that this cost line was considered and maintained over time. It was not a mistake or slip.

[52]The bank statements for the C1 Account disclose the following transactions: Date Description Amount Designation 27 Apr 2016 Payment IN from the Fakhruddins £543,377 [a] 28 Apr 2016 Payment OUT to Waddams Ltd £36,000 [b] 3 May 2016 Payment OUT to Moonlight Investments Ltd £60,000 [c] 4 May 2016 Payment OUT to Capstan Capital Partners LLP £304,000 [d]

[53]The payments out at lines [b], [c] and [d] total £400,000. It was Claimants’ case that the payment to Waddams Ltd – a company operated by Mr Waddams, who gave evidence before me – was proper commission earned by Mr Waddams, who introduced the Octagon House opportunity to C1 Bracknell: but that the payments to D6 Moonlight and D5 Capstan were dishonestly charged and were not properly incurred commissions at all.

[54]The Improper Commission Claims were brought against Defendants who were not before me. The Claimants’ allegations were not contested. Although all of the Defendants, apart from D11 Plan 9, D12 Singh Soor and D13 Avnish, were either debarred from defending or had judgments in default entered against them, it is important that I consider the substance of the allegations because (on the Claimants’ case)(i) dishonest extraction of money is theme running through the entirety of this case and

(ii) I must bear in mind the potential for tracing claims in the future. I appreciate that these findings of dishonesty are made against the Directors only and (where appropriate) the recipients of the monies extracted. It would be improper to make any inference of dishonesty as against D11 Plan 9, D12 Singh Soor and D13 Avnish, but the dishonesty of the other Defendants (particularly the Directors) is (i) a relevant background feature and (ii) in some cases a necessary pre-condition to the success of the Plan 9 Claims and the Verdi Claims. Accordingly, I consider the Improper Commission Claims in some detail.

[55]For the reasons set out below, the sums of £60,000 (to D6 Moonlight) and £304,000 (to D5 Capstan) were paid out of the C1 Account for services that were never rendered to the knowledge of the Directors: i) The “site advisors” fees, as they were described in the budget, were plainly carefully considered line items, deliberately charged. Although the £400,000 was not disaggregated in these figures, the three payments out of the C1 Account designated [b], [c] and [d] total £400,000. ii) The payment of £36,000 to Waddams Ltd was appropriately charged. Mr Waddams gave evidence before me. As Mr Waddams described, Waddams W/S 1/[9]. he did “purely brokerage work and this involves working with local and London agents. Using my contacts and relationships I have built up over the years, I identify opportunities for clients, for which I am paid an introductory/finders fee based on successful purchases”. Over the course of time, he introduced several properties to the Fakhruddin brothers via D4 Equity RED and those acting for D4 Equity RED. He never encountered any of the Fakhruddin brothers personally. Waddams W/S 1/[11]. Mr Waddams introduced “over 100, maybe 150, buildings to Equity RED over a period, and they acquired several properties, including Copenhagen, Innovation and Octagon”. Waddams W/S 1/[12]. Although fees were a bit of a haggle, Waddams W/S 1/[15]. Mr Waddams’ starting point was to seek a rate of 2%, Waddams W/S 1/[15]. but the negotiating range was 1% to 2%. In this case – Octagon House – 2% of £2,250,000 is £47,000. The payment of £36,000 to Mr Waddams was less than what he would aim for, although there were subsequent payments to Mr Waddams. The history is described in Waddams W/S 1/[20]–[21] and Fryer W/S 1/[9]ff. The detail is not material. The point is that the market rate for acquiring Octagon House in terms of commission was, as I find, £47,000 or less. iii) Mr Waddams acted as the introducing agent and was paid accordingly, at rates that reflected the market value for such services. Although Mr Waddams described the process as regards Octagon House at Waddams W/S 1/[18]ff, the detail is immaterial. The critical question is who was involved in the process, in addition to Mr Waddams, and whether these persons included D5 Capstan and/or D6 Moonlight. As to this, the vendor’s agent was a Mr Fryer. Initially Mr Fryer acted for the company selling Octagon House, but receivers were appointed over that company’s property and Mr Coote then acted for the receivers. I heard evidence from all three – Mr Waddams, Mr Coote and Mr Fryer. None of them was aware of the involvement in the sale of Octagon House of either D6 Moonlight or D5 Capstan. The documents relating to the sale similarly fail to disclose the involvement of these companies. There is no discernible purpose to the payments; and no discernible service was provided by either of these companies. iv) Yousuf queried the level of the charges, and was told that this was the cost of acquiring commercial property in the UK: Yousuf W/S 3. [44] After we got the cash flow projection for Octagon House from Equity, I remember having a lot of phone calls querying the figures. We asked for explanations about stamp duty, legal fees and service valuations, but one question we would always ask and were always concerned about was the advisory fees. [45] For this one, the “advisory fees” were £400,000. We asked why is it that the costs is so high. The Equity Directors (Ashank, Ikram and Babar) had a story about it being off market and we have got to pay this because we are getting the property for a much lower price off market so this is the kind of fee we have to pay. We were told this is how it is and this is how it works, it all goes to the middle men involved in getting the transaction (ie the property purchase) done. On Bracknell specifically the three of them were telling us that if we didn’t pay this to get the deal done the extra cost would be 3.2 million plus. [46] They convinced us that this is how it is. This is the costs involved. Because we had the ADMA we thought everything would be profit sharing, so they would not take any remuneration other than profits. We assumed they were not lying to us. v) The explanation about the level of the commission was untrue, and knowingly so given the extent of the dealings between D4 Equity RED (and so the Directors) and Mr Waddams. The consistent evidence before me was that 2% was the maximum that would be charged in such cases, evidence in the material before me to suggest that(i) Octagon House was a “special case” being acquired at a “special rate”, nor

(ii) was there any evidence of efforts of any sort by the recipients of the bulk of the commission, namely D5 Capstan and D6 Moonlight. As I have noted, none of the persons actually involved (Mr Waddams, Mr Fryer, Mr Coote) had encountered either entity. vi) The payments out of the C1 Account were made for no proper purpose; and this must have been known by both the Directors and the recipients – D5 Capstan and D6 Moonlight. The Directors made these payments deliberately. As regards the recipients, who were not before the court, I find that they provided no value for these payment, but I make no finding as to their state of mind. vii) Some of the monies paid to D5 Capstan found their way into the Defendants’ pockets. The Claimants have not been able to carry out a full tracing exercise, but have in the course of this litigation obtained considerable documentation by way of disclosure (pre-action, third party and inter partes) including of bank statements relating to many accounts. One of these statements (of D9 MFS) shows receipt of £296,400 on 6 May 2016 from “Capstan Capital”. The shareholder and director of D9 MFS is D10 Raja. viii) Given their propensity to supervise, the payments to D6 Moonlight and D5 Capstan had to be justified to the Fakhruddin brothers. Invoices providing such justification were created. Some of these tell their own story. Thus, D5 Capstan emailed D3 Ashank on 3 May 2016 saying “[a]s discussed, please find our invoice for project Octagon House attached”. The invoice was in the amount of £304,000, and referred to services in the form of “commission for debt financing”. The Claimants did not need or use debt financing (on religious grounds: see [38] above), and D10 Raja replied (on 4 May 2016) to this effect: The invoice needs to read “towards the facilitation of the Acquisition for the above site” and not debt financing as they do not have any borrowing requirements. This shows: (i) that D10 Raja knew that no services were actually being provided by Capstan; (ii) a shrewd appreciation that the Claimants would actually look at the documentation; and

(iii) an obvious intention to create deceptive documents to justify illegitimate payments. A revised invoice (revised along these lines) was in due course produced, provided to D3 Ashank and placed in the Dropbox. (I appreciate that this is making findings in respect of states of mind of persons no before the court. However, these documents were put before me and these findings are necessary in order to determine the claims against the Directors, which (for reasons that I have given) it is appropriate to consider substantively. ix) It is not known what happened to the money after it was received by D9 MFS, but there was evidence before me that D9 MFS extended loans to other of the Defendants, including D13 Avnish. x) There is also an invoice from D6 Moonlight. Yousef asked for the invoice on 5 August 2016, because it was not on the Dropbox. The invoice (referring to an “introduction fee”) was duly provided. Although the invoice is dated 2 May 2016, the metadata shows that the document was created on 5 August 2016. and there was no xi) Thus, this invoice was fabricated (ie backdated) in order to assuage concerns that had been raised by the Fakhruddin brothers. (3). Improper commissions charged to C2 Hindhead (Innovation Court and the Old Post Office) and C3 Leo (Copenhagen Court)

[56]Similar excessive commissions were charged to C2 Hindhead and C3 Leo in the case of the Innovation Court and the Old Post Office and the Copenhagen Court projects. In all of these cases, the introducing agent was again Mr Waddams, and his evidence (as in the case of Octagon House above) was that recipients of commission (apart from himself) were unknown to him at the time of the transactions. To his knowledge, such payees were not involved in the project, did no work and provided no services for the payments that they received.

[57]On 29 June 2016, C2 Hindhead was invoiced by D9 MFS in the sum of £200,000 described as a “[c]ommission fee for arranging the acquisition for” Innovation Court and The Old Post Office. On the same date, there was an invoice (in a similar amount: £200,000) from PSR Consultancy for “[p]reparatory intermediary service fees re: Innovation Court & The Old Post Office”.

[58]The C2 Account shows payments out to D9 MFS on 1 July 2016 and to D8 Anjaljun (not PSR Consultancy). The purchase price for both contracts – sold by way of a single transaction – was £3,850,000 exclusive of VAT. Thus, the £400,000 commissions amounted to 10.4% of the net sale price, clearly well above the proper market rate, and unexplained by the evidence before me. In the case of Copenhagen Court, C3 Leo was invoiced £400,000 in two invoices. Again, the rate of commission was significantly in excess of the maximal market rate of 2%.

[59]Yousuf again queried the level of the fees: Yousuf W/S 3. [68] Like with Octagon House, I remember discussing the detailed project cash flow breakdowns for both of these projects with the directors. For the same reasons as on Octagon House we were querying the agents’ fees, and Ashank told me the same sort of thing: this is the market, this is the normal, everyone pays these fees, you’re getting it below market price. I specifically remember Ashank telling me this, but I would often speak to Ikram about this as well and he would say the same things. My relationship with Ikram got a lot more personal than with Ashank: I spent more time with him on the site visits, etc. [69] I think I may have been told about “Market Financial Solutions” as brokers they were using. I asked questions about it and they told me that the fees were only going to the brokers and that they weren’t making any profit out of it. I did not know about Mr Paresh Raja at the time, or about Anjaljun or Mr Bhatti, and I do not remember seeing any invoices issued by them at the time. (4). C4 Highbarrow and Dunsty Farm

[60]The Dunsty Farm project was very different in nature to the other projects which were put forward by D4 Equity RED: Yousuf W/S 3 /[105]. This was an investment into about 77 acres of farmland, which the Equity guys were very confident they could get permission to develop and turn it into a brownfield site. They wanted to get development rights and put a large housing project with 200-1000 houses on it next to an existing village.

[61]The Dunsty Farm project will feature prominently in the consideration of the Plan 9 Claims later on in this Judgment. For the present, only the Improper Commission Claims are under consideration. The evidence in regard to this particular transaction is significantly less strong than in relation to the commissions considered in Sections F(2) and F(3) above. That is because:(i) the project was of a different sort;

(ii) Mr Waddams was not involved in the purchase; and

(iii) there is not so much documentary evidence. There was no relevant witness evidence before me, apart from that of Yousuf, who was not privy to the operations of D4 Equity RED, and so could say nothing on these operations. Yousuf W/S 3/[113].

[62]The point was opened at Day 2/pp34 – 37. The Claimants Written Opening provides: [32] The Directors sought investment from the Fakhruddins in Dunsty, a 77-acre farm plot, on the footing that planning permission would be obtained for a major housing development. The project was first mentioned to [Yousuf] in September 2016, and the transaction completed in early December 2016. [Yousef’s] evidence is that Equity RED and Highbarrow entered an oral agreement on similar terms to the written ADMAs for the other projects. [33] There was a delay in opening a Metro Bank account, so the Bracknell account was used to receive and make payments on behalf of Highbarrow for November and December 2016. These payments included further Purported Commissions, including £49,750 to Anjaljun, supposedly for “preparatory intermediary service fees”; £514,668 to Business Ways Metals Fze (a UAE company), supposedly for “commission for property purchase”; and £60,000 to “Geosure”. There is no evidence that any of those entities introduced the Dunsty opportunity.

[63]These factual assertions were uncontested, and I accept them. (5). Conclusions as regards the Improper Commission Claims

[64]On the basis of the evidence described and the findings made in Sections F(1) to F(4), I conclude that as regards the Directors and D4 Equity RED: i) The Directors (ie the first three Defendants) and D4 Equity RED deliberately charged the first to fourth Claimants (all Claimant SPVs) commissions for the acquisition of Octagon House (C1 Bracknell), Innovation Court/the Old Post Office (C2 Hindhead), Copenhagen Court (C3 Leo) and Dunsty Farm (C4 Highbarrow) that was to their knowledge above the market rate of 1% to 2%. ii) The excess was paid out of the Claimant SPV Accounts to recipients who (again, to the knowledge of the Directors and D4 Equity RED) did nothing for the money that they received. This was done despite the terms of the ADMAs subsisting between D4 Equity RED and the Claimant SPVs and the fiduciary duties that subsisted between D4 Equity RED, the Directors and the Claimant SPVs. The Directors also lied to Yousef about the level of commission payments that were usual in the UK market, and deceived him. I find that in these regards, applying the test I have set out above, these Defendants acted dishonestly.

[65]The recipients of the improper commissions, to the extent that they are named Defendants in these proceedings, acted dishonestly in receiving them and not repaying them. They would have known that they had done nothing to justify such payments; yet no queries as to why these monies had been paid away were raised. Indeed, as has been described (eg the fabricated invoices), there is evidence that these Defendants colluded in extracting money improperly from the Claimant SPVs. G. THE PLAN 9 CLAIMS (1). Pitching the Dunsty Farm project to the Fakhruddin brothers

[66]This description of how the Dunsty Farm project was introduced to the Fakhruddin brothers largely derives from the evidence of Yousuf in Yousuf W/S 3/[105]ff. This evidence was uncontested and I accept it.

[67]The Dunsty Farm project was an investment into about 77 acres of farmland. The Directors of D4 Equity RED asserted that they were “very confident to get permission to develop and turn into a brownfield site. They wanted to get development rights and put a large housing project with 200 – 1000 houses on it next to an existing village”. The quotation is from Yousuf W/S 3/[105].

[68]The special purpose vehicle for the Dunsty Farm project was C4 Highbarrow. Although this project was on an altogether larger scale than the other projects in which the Fakhruddin brothers participated, no ADMA was concluded in this case, although one was envisaged. Yousuf W/S 3/[110]-[111]. Accordingly, there is some uncertainty as to the basis upon which the project was to go ahead. Yousuf’s evidence was that although the Fakhruddin brothers would in the usual way fund the costs of the project – by C6 Hmaf funding an SPV, C4 Highbarrow – with D4 Equity RED running the project and drawing down from the C4 Account as appropriate, the Fakhruddin brothers would be reimbursed the planning costs they incurred if planning permission was not granted. Yousuf W/S 3/[108].

[69]A profit share was agreed, split 70:30 in favour of the Fakhruddin brothers, but rising to 50:50 for profits above £50 million. Yousuf summarised the deal in these terms: Yousuf 3/[112]. …We were investing in acquiring the property, and we were paying the planning costs up front, but (as discussed above) this was all on the understanding that they would bear the costs out of their profits from deals with us if something went wrong…

[70]The high level of trust in D4 Equity RED (or more particularly, in the Directors of D4 Equity RED) on the part of the Fakhruddin brothers and Yousuf that this informally structured transaction evidences is obvious. Given the complexity of the transaction, it is surprising to find its terms so informally structured. However, this informal structuring and documenting of the transaction does not mean that the duties of the parties were in any material way different from the duties set out explicitly in the ADMAs.

[71]The acquisition of the Dunsty Farm site has already been touched upon in the context of the Improper Commission Claims. Nothing more need be said in this regard, save to note that the purchase of Dunsty Farm completed in December 2016.

[72]D3 Ikram informed Yousuf when the planning work on Dunsty Farm was commencing that D4 Equity RED wanted to use D11 Plan 9 in the project: Yousuf W/S 3/[114]. Around the beginning of Dunsty when they were going to start work, Ikram told me that they wanted to use Plan 9. I was told that they were planning consultants, and for tax reasons it would be better for us to use Plan 9 so we could reclaim VAT through them, or something along those lines. At that point I did not know Harminder Soor.

[73]It will be necessary to say more about D11 Plan 9 in due course. However, D11 Plan 9 came onto the scene after another firm – Ingleton Wood – had been appointed to provide architectural and planning services for an outline planning application. It is necessary to consider Ingleton Wood’s involvement first. (2). Retention of Ingleton Wood

[74]In a letter dated 14 December 2016, Ingleton Wood wrote to D3 Ikram as a Director of D4 Equity RED providing an updated quotation for submitting an outline planning application and providing architectural and planning services in relation to Dunsty Farm.

[75]The letter made clear: i) That the objective was to submit an outline planning application in late March 2017. ii) That a team was being mobilised within Ingleton Wood to do this work, but that the level of effort required was impossible to determine at this stage. Ingleton Wood would therefore operate on the basis of a retainer for a minimum level of resource, and charge above that minimum level on a time basis. iii) The names of a team within Ingleton Wood were provided (but are not material). iv) It was made clear that excluded from the quotation were any specialist surveys or reports required to ensure discharge of planning conditions. The letter made clear that a number of specialist surveys would likely be required (eg topographical surveys, archaeological reports, drainage surveys, utilities surveys, flood risk assessments, etc).

[76]The letter concluded: We have attached our standard Terms of Engagement. In order for us to proceed we will need a signed written instruction form from the organisation who will pay our invoices and which references this quotation.

[77]I have not been taken to any such signed written instruction, and it is not completely clear to me who Ingleton Wood considered their client to be: D4 Equity RED or C4 Highbarrow. The point is academic: what matters is who paid the bills and this was done by C4 Highbarrow via D11 Plan 9.

[78]That, however, is to anticipate. What is significant about the Ingleton Wood letter is that there was no mention of D11 Plan 9. There is reference – in the opening words of the letter – to a meeting between Ingleton Wood, D3 Ikram and “Bob” – on 7 December 2016. I find that the reference to “Bob” is a reference to Mr Kahlon, who (despite not being a Defendant nor giving evidence before me) proves to be a central character in the Plan 9 Claims as they came to be articulated before me. (3). Ingleton Wood’s January 2017 email

[79]There was a meeting between Ingleton Wood employees, D3 Ikram and Mr Kahlon on 5 January 2017. An email, sent by Ingleton Wood on 11 January 2017 set out some initial thoughts on the planning strategy and the documents potentially required to support a planning application (emphasis added): Background … …It is my understanding that your attention is to secure planning permission for a mixed use development on land to the south of the village of Calvert Green. The proposal will seek outline planning permission for approximately 300 residential units, a retirement village, together with retail, education and leisure uses. As discussed, we would usually recommend that due to its strategic significance a proposal of this nature is pursued either through the preparation of the Local Plan i.e. a site-specific allocation, or through a series of pre-application discussions with the local planning authority (Aylesbury Vale District Council) and relevant statutory consultees. The latter would be supported by a feasibility study informed by key baseline information from specialist consultants, which would evolve during pre-application discussions and allow key issues to be discussed and addressed prior to the submission of a planning application. Whilst I understand that some initial discussions have been held with representatives of Aylesbury Vale District Council – albeit on political/affordable housing level, not technical officer level – you have advised that you wish to submit an outline planning application without any formal pre-application discussions being held with either the local planning authority or statutory consultees. This is an approach that we would not normally advocate unless a minor, non-contentious application is proposed. The lack of dialogue with these parties obviously introduces an element of significant risk, as it will not be possible for them to comment, and influence where necessary, the preparation of the planning application prior to submission. As discussed, we would be grateful if you could circulate any correspondence you have had with Aylesbury Vale District Council on this site to allow a clearer understanding of the progress of the site’s promotion. Supporting Documents One benefit of pre-application discussion is that it enables the extent of documents required to be submitted in support of a planning application to be confirmed. Accordingly, there is a risk, as you are aware, that certain documents may not be submitted as part of the application; resulting in the application not being validated. It is our view that proposals will constitute Environmental Impact Assessment (EIA) development i.e. development which is likely to have significant effects on the environment by virtue of its nature, size or location. This will have both cost and time implications for the preparation of an application. The requirement for EIA would normally be confirmed with the local planning authority via a Request for a Screening Opinion. In this case, we will proceed on the basis that an EIA will be required as discussed. Where an EIA is required, the scope is normally agreed with the local planning authority through the preparation and submission of a Scoping Report. On the basis that no discussions will be held with the local planning authority, we propose that an EIA is prepared based on experience of similar developments. Whilst we will continue with our initial research and finalise the list of the consultants / supporting documents asap, I suggest that specialist consultants relating to the following areas are instructed: … I recommend that input is obtained from those specialist consultants highlighted in italics above, as soon as possible, as their input will be key to informing the design of the proposed development. The respective consultant programmes for completion of technical assessments and reports is likely to extend to submission programme beyond your target March/April programme. As I understand, you will be speaking directly to preferred consultants you have worked with successfully on other projects. … Principle of Development As discussed at our recent meeting, whilst we are still undertaking research, it would be useful to understand the potential strategy for justifying the principle of development. As you are aware, the site is identified in the Adopted Development Plan as Countryside where there is a general presumption against development… … On the basis of the foregoing, it would appear that, at this moment in time, it is difficult to justify the principle of the proposed development and we would expect an application of this nature, promoted in this way, to be refused. It may be that your programmed discussion with Gavin Barwell, the Housing Minister, offers the quickest route to gain strategic support for the site, building on the Garden Village initiative, particularly given Calvert Green’s potentially strategic location within the future rail transport network. Public Consultation It is also my understanding that it is your intention not to undertake any Public Consultation, during the preparation of the application. You will seek to notify the public of the proposed development on the day of submission. As discussed, we would normally advocate Public Consultation in order to seek to address any concerns that local residents may have prior to submission. Any Public Consultation should normally be held at least 4 to 6 weeks prior to submission of an application, in order to ensure that it is not seen as a “tick box” exercise, and that full regard is seen to be given to the views of the public as necessary.

[80]This email makes Ingleton Wood’s position as regards the project clear:(i) the manner in which D4 Equity RED was proposing to proceed was heterodox,

(ii) contrary to Ingleton Wood’s advice,

(iii) liable to increase the risk of the application being rejected

(iv) in circumstances where the risk of rejection by the authorities was in any event high (if not inevitable).

[81]Again, there is no reference to the involvement of D11 Plan 9, although the reference to “speaking directly to preferred consultants” is suggestive of someone else coming into the project. (4). The 3 March 2017 meeting

[82]In March 2017 – the time when it had initially been hoped that the application for planning would have been submitted – there was a meeting at Ingleton Wood’s offices, which resulted in a document setting out “meeting action points”. The document is dated 3 March 2017, but it is not clear whether that is the date of the meeting or the date the action points were compiled. Nothing turns on this. The record discloses no prior agenda for the meeting. The attendees comprised persons from Ingleton Wood (whose specific identity is immaterial), various consultants (again, their identity is immaterial) and the following three persons: 1. Bob Kahlon (Equity Real Estate Developments) 2. Ikram Haq (Equity Real Estate Developments) … 11. Hari Singh (Plan 9 Designs)

[83]Clearly, between January and March 2017, D11 Plan 9 had been introduced to the project and to Ingleton Wood. D12 Singh Soor’s attendance at the meeting as D11 Plan 9’s representative is explicable on no other basis. The meeting action points identify the individuals responsible for taking forward the action points. Mr Kahlon and D3 Ikram are both so identified (in connection with points to do with crystalising the nature of the proposed development), but neither D11 Plan 9 nor D12 Singh Soor are specifically named as being responsible for any particular task. (5). The appointment of D11 Plan 9

[84]The nature of the appointment of D11 Plan 9, including but not limited to the terms of that appointment, was contested between the Claimants (on the one part) and D11 Plan 9 and D12 Singh Soor (on the other part). I shall not, at this stage, grapple with these differences. This section sets out the terms on which D11 Plan 9 and D12 Singh Soor contended D11 Plan 9 had been appointed. I will consider and resolve later on in this Judgment the rival contentions of the parties as to the true nature of the relations between D11 Plan 9 and C4 Highbarrow.

[85]According to D12 Singh Soor (and I stress again, this was his case, and I make no findings at this stage): i) An oral agreement as to the services to be provided by D11 Plan 9 to C4 Highbarrow was reached in January 2017. In terms of timing, that fits with the chronology outlined above. The terms of that agreement are set out in writing in Schedule 1 to the Amended Defence of D11 Plan 9 and D12 Singh Soor (the D11-D12 Defence). This agreement was formalised in writing on 17 March 2017, in a document entitled the Project Management Agreement and on occasion referred to as the PMA. ii) For the purposes of stating the terms of the agreement, I am going to refer to the written Project Management Agreement. This seems to me to be the better document to use, even though it is expressed as only being effective on 17 March 2017, with the consequence that before that effective date the oral agreement would have governed. iii) It was put in cross-examination of D12 Singh Soor that the terms of the oral agreement as reduced to writing in Schedule 1 of the D11-D12 Defence are so detailed and comprehensive that these terms could never have been agreed orally. The Claimants contended that this excess of detail showed the oral agreement to be a figment of D12 Singh Soor’s imagination. See, for example, Day 2/p41, where the point was put in oral opening. I will be coming to the question of whether the Project Management Agreement in either its oral or its written form was a “genuine agreement”. For the present, I should simply note that I do not consider the excessive detail provided in relation to the oral agreement to be especially supportive of the allegation of “sham” or “invention”, wherever the ultimate truth may lie. D12 Singh Soor was treated by me as a litigant in person, although he has some legal experience and did have the limited assistance of solicitors. What I think has happened is that in seeking to provide the “gist” of the oral agreement, D11 Singh Soor has drawn on the terms of the later written Project Management Agreement and incorporated a version of them into Schedule 1 of the D11-D12 Defence (which purports to state the terms of the earlier oral agreement). I read no more into Schedule 1 than that. Accordingly, I shall pay primary regard to the terms of the (admittedly later) Project Management Agreement, Which was the tenor of D12 Singh Soor’s evidence also: D12 Singh Soor tended to refer to the PMA as governing even in the period prior to its “effective date”. whilst leaving open the question of “sham” for later consideration. iv) The Project Management Agreement was expressed to be between D11 Plan 9 and C4 Highbarrow. D11 Plan 9 was described as the “Project Manager” and agreed to provide the following services to C4 Highbarrow (the “Client”) at the “Venue”, the “Venue” being Dunsty Farm. Quoting from clause 1 of the Project Management Agreement: In consideration of the Client’s desire to develop the land at the Venue location given below (the “Project”), the Project Manager agrees to perform the following services (“Services”):(a) Various surveys and assessments to be undertaken (whether measured, topographical, environmental, geotechnical, ecological, archaeological, transport, air quality, noise & vibration, heritage, landscape, agricultural and soils as may be appropriate);

(b) Specialists, consultants, experts, contractors, publicity agents, etc (together to be known as the “Professional Team”) to be appointed and the terms of their appointments for those purposes; and organising the carrying out of the surveys on terms approved by the Project Manager.

(c) Reviewing requirements for the Project including: (i) design standards, performance criteria and financial criteria; (ii) programming and phasing the procurement route; (iii) letting and sales criteria; and (iv) the revision of the Project Documents and the Business Plan from time to time as may be appropriate.

(d) The Project Manager will undertake work, services, studies to facilitate and assist the Client in the application for planning permission at the Venue location.

(e) The Project Manager will undertake to monitor the work of the Professional Team to provide appropriate reports, feasibility studies, recommendations and publications to allow for the development of the land at the Venue listed below.

(f) Coordinating and issuing instructions to the Professional Team in connection with the preparation of the planning application.

(g) Preparing the ground work for entering into discussions and negotiations with the local planning authority in pursuance of the planning application and monitoring progress of the planning application and the approval of reserved matters. The services under the Project Management Agreement could be enlarged by mutual consent. v) The Project Manager’s remuneration comprised a number of different elements. A 10% commission was payable on the profits made on the Project on conclusion or termination. The detail is immaterial for present purposes. The Project Manager was entitled to “reimbursement for all reasonable and necessary expenses incurred in providing the Services”. The Project Manager would invoice the Client “approximately every month for all Services performed” and invoices would be paid within 14 days. “Within each invoice, the Project Manager is not required to provide [a] detailed breakdown of the exact work carried out nor the exact services provided until the annual review of the project”. There was a pre-approved budget (the Project Budget) of £1,452,000, which was attached as a schedule to the Project Management Agreement. vi) Dated 16 January 2017, the Project Budget provides: Technical Assessment Consultant / Supplier Budget Environmental Coordination and Management Quod £50,000 Transport Vectos £35,000 Air Quality Air Quality Consultants £45,000 Noise and Vibration AECOM £55,000 Archaeology CgMs / RPS £6,000 Built Heritage CgMs / RPS £6,000 AVRs Troopers Hill £9,000 Landscape Consultancy Arc £6,000 Agriculture and Soils Rob Askew £25,000 Flood Risk & Drainage RPS Waterman £25,000 Ecological Surveys Middlemarch Environmental £80,000 PR, promotion, social media Quatro, visual aid, other £45,000 Additional planning, database / modelling / video of concept £30,000 Geo-environmental Hydrock £5,000 Energy conservation study and project construction Verdi / ASA £55,000 Rapid construction technology / proof of model Malmos / others £95,000 Surveys / Investigations £35,000 Planning Conant / Barrister £150,000 Project planning, coordination and management Plan 9 Designs £200,000 Project leader Bob Kahlon £175,000 Planning Consultant / Land development Ingleton Wood / other £120,000 Contingency Various £200,000 Total £1,420,000 D11 Plan 9 was entitled to charge a fee commission of 10% on the invoice amounts raised by the Professional Team. This suggests that the £200,000 budgeted for D11 Plan 9 in the Project Budget is not a separate item of payment, but an estimate (for budgeting purposes) of the fee commission D11 Plan 9 would in due course be entitled to charge (10% of £1.2 million being £120,000, but it being recognised the budget could go up). The fee commission was subject to a “floor” of £5,000/month: if the total monthly amount excluding VAT invoiced was £40,000, the minimum was not payable. There is a certain illogicality here, for 10% of £40,000 is £4,000, and Plan 9 would therefore have every incentive to ensure that its monthly invoicing net of VAT sat at below £40,000 or above £50,000. Indeed, this approach to remuneration would incentivise delay. (6). The importance of the Project Management Agreement in the context of the Plan 9 Claims; and the parties’ rival contentions

[86]The Project Management Agreement was central to the contentions of D11 Plan 9 and D12 Singh Soor. They contended:(i) that the Project Management Agreement was properly concluded between D11 Plan 9 and C4 Highbarrow;

(ii) that it was properly performed by D11 Plan 9; such that

(iii) D11 Plan 9 was entitled to charge as it did for the services it provided, and was entitled to recover such charges as D11 Plan 9 was entitled to, but which C4 Highbarrow had failed to pay. This was (i) the basis for D11 Plan 9’s counterclaim against the Claimants – for monies due under the Project Management Agreement –; and (ii) the justification for certain items of expenditure by D11 Plan 9 on matters that could not plausibly be said to further the Dunsty Farm project. In such cases, D12 Singh Soor tended to say that D11 Plan 9 was spending “its” money, that being the remuneration it derived from the Project Management Agreement.

[87]By contrast, the Claimants contended that “Plan 9 has allowed itself to be used as a conduit for unlawful transfers of funds out of Highbarrow and Rushworth”. PoC/[8]. One question that arises in connection with the Plan 9 Claims is whether it has been accepted (on the pleadings) by the Claimants that there was an element of legitimacy to the monies that were paid out of the C4 Highbarrow and C5 Rushworth accounts (ie the C4 Account and the C5 Account). Certainly, there is no suggestion by the Claimants (and obviously not by the Defendants) that contractors like Ingleton Wood were acting in anything other than an honest and professional way.

[88]The fact that a contractor like Ingleton Wood was acting properly and charging for proper services does not mean that the payor of such services or the party inducing such payment were themselves acting properly. Taking the probity of parties like Ingleton Wood as established (which, to be clear, I do), says nothing about whether payments out of the Claimant SPV Accounts to D11 Plan 9 were proper; nor does it say anything about the propriety of D11 Plan 9’s dealings with these monies. The chains of payment need to be considered link-by-link, and entity-by-entity. I consider that it is open to the Claimants on the pleadings to contend that all of the monies extracted by the Directors from C4 Highbarrow (and any other Claimant SPV involved, like C5 Rushworth) were dishonestly extracted, although a lesser case (that some payments were honestly made) is also open to the Claimants. The fact is that the Claimants have pleaded an exceedingly detailed case, but they do not know every detail. Indeed, as I have been at pains to emphasise, despite considerable effort on the part of the Claimants, there are substantial gaps in the disclosure. See Section B(3). In some – but not all – cases this is explicable by the fact that the holders of some bank statements that are relevant were not before the court.

[89]The same is true of D11 Plan 9’s dealings with the monies it received from the Claimant SPVs. The Claimants allege that “a pattern has emerged evidencing the systematic misuse and/or misappropriation of funds by the Directors and Equity RED, facilitated by the Fifth to Thirteenth Defendants”. PoC/[13]. The Claimants’ case, unsurprisingly given the uncertainty surrounding the dealings with their money, is in this regard again extremely flexible in terms of the payments that are or are not implicated in the Plan 9 Claims. It is, in my judgment, open to the Claimants to contend that all of the payments made by D11 Plan 9 were wrongfully made.

[90]Consistent with this broad but flexible case against D11 Plan 9 and D12 Singh Soor, the Claimants contended that the Project Management Agreement (and the anterior oral agreement) were “shams”, although their position was that their claims could succeed even if these agreements were not (as D11 Plan 9 and D12 Singh Soor contended) shams. (7). The intentions of the Directors

[91]It is necessary to begin with the knowledge and intentions of the Directors in promoting the Dunsty Farm project to the Fakhruddin brothers. I appreciate that the Directors are not before the court: they have either been debarred from defending or have had judgment entered against them. It is not strictly necessary to make detailed findings of fact so far as these Defendants are concerned. However, it is necessary to do so, in order properly to assess the case the Claimants make against D11 Plan 9 and D12 Singh Soor.

[92]It is important to establish, before considering the case against D11 Plan 9 and D12 Singh Soor, whether the Dunsty Farm project was ever a legitimate project or whether it was, from the outset, intended by the Directors to be a project that was always going to fail and was simply a chimera intended to extract money from the Fakhruddin brothers and enrich the Directors. Without a finding as regards the Directors, it is not possible sensibly to address whether D11 Plan 9 was, or was not, complicit in or knowing of the Directors’ intentions as regards the Dunsty Farm project.

[93]Turning then, to the knowledge and intentions of the Directors, no-one before me disputed that substantial monies paid by C6 Hmaf to C4 Highbarrow and then by C4 Highbarrow to D11 Plan 9 ended up in the Directors’ pockets. D12 Singh Soor protested his innocence of any dishonesty, but even he recognised that (at least in hindsight) the affairs of C4 Highbarrow had been irregularly conducted by the Directors. D12 Singh Soor’s point was that he, as well as D11 Plan 9, had been honest, even if the Directors had not been. That is a defence which will require careful consideration in this Judgment. But that defence is obviously coloured by the question I am posing now, namely (viewed from the standpoint of the Directors) was the Dunsty Farm project “bad” from the beginning or did it go wrong after a legitimate and proper start?

[94]For the reasons that I give below, it is my conclusion (and I so find on the facts) that the Dunsty Farm project was itself a “sham”, and that there was never an intention on the part of the Directors to cause the Dunsty Farm development project to progress. This was not a case where a feasible project was being progressed, but monies were being “skimmed from the top” whilst the project did in fact progress. Nor was this a case of a legitimate project that, after a period of time, went improperly wrong and became a money extracting venture. This was a case where there was never any intention on the part of the Directors to progress the project. The project was only ever a device – or sham – for the extraction of monies from the Fakhruddin brothers.

[95]I reach this conclusion for the following reasons: i) The Ingleton Wood email, which I have set out almost in full at [79], makes clear that Ingleton Wood considered that the manner in which D4 Equity RED was proposing to proceed was heterodox, contrary to Ingleton Wood’s advice, and liable to increase the risk of the application being rejected in circumstances where the risks of rejection were in any event high. The project was quite clearly going to fail, as indeed it did. When, in 2019, Yousuf began asking questions directly of Ingleton Wood, this is what he was told: Yousuf W/S 3/[124]–[125]. This was the outcome that ultimately pertained: Day 2/p69. ii) A person actually seeking to progress a legitimate project would have taken on board these points, and progressed the project in an altogether different way, beginning with an engagement with the local authority, and seeking to build a degree of consensus. iii) Furthermore, had the Directors behaved as they should have done with regard to the project, the true nature of the project – and the associated risks – would have been explained to the Fakhruddin brothers. The evidence of Yousuf, in terms of how the project was introduced, was as follows: Yousuf W/S 3. [105] This was an investment into about 77 acres of farmland, which the Equity guys were very confident they could get permission to develop and turn it into a brownfield site. They wanted to get development rights and put a large housing project with 200 – 1000 houses on it next to an existing village. [106] The SPV for this project was called Highbarrow Holdings Ltd. I think this may have been because they didn’t want the Equity name to suggest to the seller or the council that they were trying to develop it. [107] Like the other investments, the Dunsty Hill Farm project was brought to us by the Equity guys. I can see from emails that Ali and I had spent some time talking to them about it in early November 2016, when I visited the UK, for some site visits, and to go to the branch at Metro Bank. [108] We had been trying to understand who would pay for the planning costs if the deal happened. They were always saying how confident they were that they would get planning, and Ashank was saying that they would reimburse the planning costs if it was unsuccessful and would cover our losses if we later sold at a loss. He put that to us specifically in an email on 10 November 2016. The understanding from day one was that they have the expertise in this and were very confident they’ll get planning. We basically said put your money where your mouth is. The email of 11 November 2016 from D1 Ash (referred to by Yousuf in the above quotation) states that “[i]n the unlikely event that we are unable to obtain planning consents for the above site then we will be responsible for the costs of planning and will seek to reimburse these to you by way of a deduction from our (Equity) share of profits from other deals that we are working on together”. The planning costs being contemplated were well in excess of £1,000,000, and so the financial commitment of the Fakhruddin brothers and (in the event of the project going wrong) the financial commitment of D4 Equity RED was significant. I do not consider that anyone proceeding in the light of the negative advice from Ingleton Wood would have been willing to expose themselves to this sort of financial risk, and I consider that the promise made in the email was intended by the Directors to induce the Fakhruddin brothers to participate in the Dunsty Farm project with no intention of honouring the commitment to repay the planning cost incurred by them should the project ultimately fail. iv) A D4 Equity RED proposal, dated October 2016, provides an entirely misleading description of the project: There is an opportunity brought to us to purchase a farm house, outbuildings and 77 acres of agricultural land. The site is located in Calvert Green in close proximity to the towns of Bicester and Aylesbury. This site has been allocated as a potential development site. Through discussion with officers from the local authority we have understood that this site could if designed appropriately, have consent for a mixed use development with the majority of the use as residential. Within the design massing exercise, we have focussed on all the key priorities of the local authority and local needs. We have catered for housing, health, employment, recreation, leisure, care for the elderly and education meeting all the main objectives set out in the planning policies. Furthermore, we have already initiated conversations with certain specialist providers such as registered social landlords, property investment funds, retirement living funds etc to forward sell and secure the sale of a significant proportion of the site to these end users. The timeline for this scheme is 3 to 5 years, to promote and obtain all the necessary permissions and the majority of this time would be spent in promoting and validating our proposal. The current owners are in financial distress with lenders Amicus plc putting pressure on them to dispose of the property to clear debts. As such we have negotiated with the owners and their retained lawyers to acquire the freehold vacant unencumbered site for £3 million. The purchase price is considerably over the current debt on the site and upon purchase completion the site will be clear of all historical debt. Upon receipt of the planning consents, we anticipate disposing of the site in the individual parts to achieve a net profit of approximately £30 million. v) My conclusion as to the nature of the project is reinforced by the appointment of D11 Plan 9. Yousuf was told: Yousuf W/S 3/[114]. Around the beginning of Dunsty when they were going to start work, Ikram told me that they wanted to use Plan 9. I was told they were planning consultants, and for tax reasons it would be better for us to use Plan 9 so we could reclaim VAT through them, or something along those lines. At that point, I did not know Harminder Soor. D11 Plan 9 was a recently incorporated company, with no employees, where D12 Singh Soor was the sole director and shareholder. D12 Singh Soor, by his own admission, had no planning experience, and the description of D11 Plan 9 as “planning consultants” was misleading.

[96]Accordingly, I find that the agreements concluded between D11 Plan 9 and C4 Highbarrow were (considered from the standpoint of the Directors) indeed shams. They were “window dressing” (even if they were concluded when D11 Plan 9 and D12 Singh Soor say they were) for a project that was going to fail from the outset, as the Directors knew. The Directors subjectively intended to use the project to extract money from the Claimants. The payments made to legitimate contractors like Ingleton Wood and (another party we will come to, Quod) were no more than “cover” intended to provide the impression that the project was being progressed. Accordingly, I find that the Directors were dishonest in the conduct of the entire Dunsty Farm project, from conception onwards.

[97]The fact that C4 Highbarrow was induced by a breach of fiduciary duty on the part of the Directors and D4 Equity RED to participate in the Dunsty Farm project (including, even if concluded when D12 Singh Soor asserts, the Project Management Agreement) says nothing about the honesty of D11 Plan 9 and D12 Singh Soor. It is perfectly possible, and consistent with the findings I have made, for D11 Plan 9’s involvement to have been – like that of Ingleton Wood – above reproach. It is to this question that I now turn. (8). Beginning of the involvement of D11 Plan 9 and D12 Singh Soor

[98]Neither D11 Plan 9 nor D12 Singh Soor were involved in the initial discussions whereby the Dunsty Farm project was set up and “sold” to the Fakhruddin brothers. D12 Singh Soor got to know Mr Kahlon and his wife whilst D12 Singh Soor was working as a legal consultant with Morgan Mark Solicitors. D12 Singh Soor acted for or assisted Mr Kahlon in a legal dispute, and that appears to be how they got to know one another. D12 Singh Soor W/S 2/[6], [8].

[99]D12 Singh Soor describes how he came to be involved in the Dunsty Farm project in the following terms: D12 Singh Soor W/S 2/[9]. During 2016 Bob had discussed the possibility of the development of land and property and expressed a wish for me to get involved. Although I had other business commitments and was fairly busy in my legal work and with other clients, towards the middle of 2016, I agreed to help him with future projects on the strict condition that I would only be required to allocate immediately only about 2 to 4 hours of my time per week on the management of the project.

[100]D12 Singh Soor disavowed any knowledge of any negotiations between the Directors and the Fakhruddin brothers regarding the acquisition of Dunsty Farm. D12 Singh Soor W/S 2/[11]. He describes how he came to be involved in the following terms: D12 Singh Soor W/S 2. [12] I became involved with the project in late 2016 when Bob said that he had a number of funders ready to instigate land and property development projects which will need feasibility studies, market research, planning and development and that I should set up a new company to deal with the management of the planning application for these projects. [13] I knew Bob had previously undertaken various land and property development projects and was familiar with the requirements of the local planning authorities…in dealing with urban and building planning projects. … [14] Accordingly, the company, Plan 9 Designs Limited, was incorporated on 12 January 2017. I was given a brief outline of the project that was to be undertaken at Dunsty Hill Farm…Various suppliers were engaged by Bob as he was familiar with this field and in time I received quotations and proposals from the various suppliers. I accept this evidence. It is clear – whatever the status of the Project Management Agreement and its oral predecessor – that D11 Plan 9 was introduced into the Dunsty Farm project at some point between January and March 2017. I do not consider that either D11 Plan 9 nor D12 Singh Soor had any involvement in the acquisition of Dunsty Farm nor any knowledge of the hopelessness of the application for planning permission. The Directors would have had no reason to inform D11 Plan 9 of this, and every reason not to.

[101]Accordingly, I approach the question of the Plan 9 Claims as against D11 Plan 9 and D12 Singh Soor on the basis that D12 Singh Soor was asked to and did incorporate D11 Plan 9 in late 2016 to assist in a planning project of which he was otherwise entirely ignorant. (9). Conclusion as to D11 Plan 9’s and D12 Singh Soor’s understanding

[102]It is appropriate that I state my conclusions as to the understanding of D11 Plan 9 and D12 Singh Soor, before setting out my detailed reasons for reaching these conclusions. Given the radically different alternative cases run by the Claimants on the one hand and D11 Plan 9 and D12 Singh Soor on the other, I must state my finding as to which alternative is the case before setting out in detail the basis for that conclusion.

[103]The alternative cases may be stated thus: i) On the Claimants’ case, D11 Plan 9 was no more than a cypher, used by the Directors as a convenient entity to which payments could be made under a patina of legitimacy, so that the monies received by D11 Plan 9 could be routed back to the Directors (with illegitimate “leakage” of monies to persons like D12 Singh Soor) who (on the Claimants’ case) was fully aware of D11 Plan 9’s role. The payments to parties like Ingleton Wood and Quod were, on this basis, no more than “window dressing” to enable the Directors to persuade the Fakhruddin brothers that the Dunsty Farm project was viable and proceeding. ii) On D12 Singh Soor’s case – which was also that of D11 Plan 9 – D12 Singh Soor was ignorant of the Directors’ dishonest scheme as regards Dunsty Farm, and was bona fide performing under the Project Management Agreement (that term including any anterior oral agreement). The payments made by D11 Plan 9 at the direction of D12 Singh Soor were believed to be proper and in furtherance of the Dunsty Farm project, and any monies received by D12 Singh Soor or by his family were no more than payments out of the remuneration that D11 Plan 9 was entitled to under the Project Management Agreement, which was (as far as D11 Plan 9 and D12 Singh Soor were concerned) a properly concluded and regular agreement.

[104]I find (for reasons set out in detail below) that the Claimants’ contentions are the case. I reject the contentions of D11 Plan 9 and D12 Singh Soor. I conclude that D12 Singh Soor and (by reason of attribution of D12 Singh Soor’s knowledge, D11 Plan 9) appreciated from the beginning of their participation in the Dunsty Farm project that the project was nothing more than a scheme to induce the Fakhruddin brothers (through C6 Hmaf and C4 Highbarrow) to pay monies to D11 Plan 9, which would then be used for the Defendants’ purposes and not for the purposes of the chimeric Dunsty Farm project. Some of the monies, so extracted, I accept, were paid to legitimate contractors like Ingleton Wood and Quod, but this was, as I have said, no more than “cover”. (10). The routing of the monies

[105]In a spreadsheet that was put to D12 Singh Soor by the Claimants in the course of cross-examination Day 10/p159. but not accepted by him, the Claimants contended that of the payments made by D11 Plan 9 purportedly in furtherance of the Dunsty Farm project: i) £212,698.96 was paid to legitimate third-party consultants. ii) £31,628.35 was paid to persons who were not third-party consultants. iii) £534,298.40 was paid illegitimately to the Defendants. I am taking these figures as broadbrush indications of where the monies went, and as such I accept them.

[106]These sums total £778,625.71, which is less than the total monies received by D11 Plan 9 from the Claimants. The Claimants Opening states (at [7]): Plan 9 received £1,156,020 from Cs. Of these payments, nearly £500,000 was transferred straight back to accounts under [D3 Ikram’s] control, and more was diverted to Mr Singh and his family. At most c £200,000 was spent paying genuine invoices related to the Dunsty project. The payees (and their accounts) under D3 Ikram’s control were most importantly ASA Property Developments Ltd (ASA) and JZK Land and Property Services Ltd (JZK). I shall refer to the accounts used by ASA and JZK as D3’s Accounts for simplicity.

[107]This Judgment resolves the Improper Commission Claims, the Plan 9 Claims and the Verdi Claims in terms of whether the Defendants are, or are not, liable to the Claimants. The Judgment cannot (and does not) make specific findings as to where all the monies paid away by the Claimants ended up, nor can this Judgment make specific findings as to entitlement in every case, particularly so far as tracing claims are concerned. These matters will have to await further consideration in the light of the findings made in this Judgment. I accept the figures set out in the spreadsheet put to D12 Singh Soor on this basis, recognising that further investigations and likely an account will be needed. An account is one of the remedies sought by the Claimants in their prayer for relief in the PoC. The usefulness of the spreadsheet thus lies not in its specific accuracy, but in the broadbrush picture that it provides of where the monies went. (11). Approach in regard to my conclusion as to D11 Plan 9 and D12 Singh Soor

[108]The reasons that I have concluded that the Claimants’ case is to be preferred over that of D11 Plan 9 and D12 Singh Soor are set out in the following Sections. In reaching the conclusions that I have, I have borne in mind two matters: i) First, the allegations made by the Claimants against D12 Singh Soor and D11 Plan 9 are extremely serious ones of dishonesty. Although I must resolve these allegations on the basis of the ordinary civil standard, it is right to presume that the vast majority of people are honest in their dealings, and it is appropriate to expect allegations of dishonesty to be clearly put (as they have been by the Claimants) and clearly established (as I find they have for the reasons given below). ii) Secondly, my findings as regards the Directors in regard to the Plan 9 Claims are irrelevant to the question of the honesty of D11 Plan 9 and D12 Singh Soor. I have made these findings because they are necessary for the purposes of a subsequent account, and because they provide important context to D11 Plan 9’s insertion into the Dunsty Farm project. Otherwise, these findings are left out of account when considering the position of D11 Plan 9 and D12 Singh Soor.

[109]In summary, my conclusion is based on the following matters: i) D11 Plan 9 was not a “planning consultant”, nor was D12 Singh Soor: Section G(12) below. ii) D11 Plan 9 and D12 Singh Soor performed no meaningful service for C4 Highbarrow: Section G(13) below. iii) The role of Mr Kahlon and the services provided by him: Section G(14) below. iv) D11 Plan 9’s invoicing for work not done: Section G(15) below. v) The Project Management Agreement was not a genuine document: Section G(16) below. vi) The fact that monies paid to D11 Plan 9 by C4 Highbarrow were used for purposes other than the Dunsty Farm project: Section G(17) below. (12). D11 Plan 9 was not a “planning consultant”

[110]D11 Plan 9 was “sold” to the Fakhruddin brothers as a “planning consultant” by the Directors. Although D12 Singh Soor had little, if any, direct contact with the Fakhruddin brothers or Yousuf himself, this holding out of D11 Plan 9 was also D12 Singh Soor’s consistent message throughout his dealings with Ingleton Wood, Quod and in his evidence to this court.

[111]It does not matter whether D12 Singh Soor directly represented himself to the Claimants as a “planning consultant”: I make no finding to this effect. The point is that throughout the Dunsty Farm project, D12 Singh Soor generally held D11 Plan 9 out to be something it was not: a “planning consultant”. This description implies some level of expertise or professional competence in planning. Yet neither D11 Plan 9 nor D12 Singh Soor had any such expertise. D11 Plan 9 was a recently established company, with no employees and a sole director/shareholder (D12 Singh Soor) himself having no planning experience. Yet D11 Plan 9 overtly involved itself in an ambitious planning project – the Dunsty Farm project – and had dealings with the true professionals (eg Ingleton Wood and Quod) as if it, too, had the competence to perform a planning role.

[112]This holding out would not have mislead either the Directors or Mr Kahlon, but the façade provided by D11 Plan 9 was obviously useful to the Directors when justifying payments to D11 Plan 9; and D11 Plan 9 was an important means of circulating monies back to the Directors, as is considered further below.

[113]The essential point is that D11 Plan 9 was not competent to act as a planning consultant, and this would have been obvious to D11 Plan 9’s only director and shareholder, the person who set the company up, D12 Singh Soor. Because D12 Singh Soor himself had no planning competence, it cannot even be said that D11 Plan 9 was the corporate manifestation of a single “planning consultant”. (13).

(a) Initial appointment

[114]The first appearance of D11 Plan 9 and D12 Singh Soor in the Dunsty Farm planning process was at the March 2017 meeting at the offices of Ingleton Wood. See [82] above. In the meeting notes D12 Singh Soor is described as present, but no tasks were allocated to him or to D11 Plan 9. It is not possible to understand what role D11 Plan 9 was playing, given the roles of D4 Equity RED (the Fakhruddin brothers’ “partner” in the Dunsty Farm development), C4 Highbarrow (the Claimant SPV) and Ingleton Wood. That is why the action plan is so sparse in terms of jobs allocated to D11 Plan 9.

(b) Duplication with Quod

[115]There was a later meeting, in the same month, on or around 28 March 2017. As before, in addition to Ingleton Wood and other consultant representatives, Mr Kahlon (apparently representing D4 Equity RED), D3 Ikram (again, representing D4 Equity RED) and D12 Singh Soor (representing D11 Plan 9) are recorded as being present. Item 5 - under the heading “Quod” records the following action items:5.01 Provide a fee quote for EIA [ie Environmental Impact Assessment] coordination

5.02 Review sub-consultant tracker with IW [ie Ingleton Wood] Plan

[116]Quod were retained in order to manage the various specialist consultants who would be needed for the purposes of the Dunsty Farm planning application. In a letter, sent by email dated 20 June 2017, Quod emailed Mr Kahlon and D3 Ikram (as D4 Equity RED representatives), setting out Quod’s proposals “to act as lead EIA consultants for the project, in a management and co-ordination role”. The letter went on: Our understanding is that the appointment of specialist input for the EIA (eg transport, noise, landscape and visual archaeology, etc) will be separate direct appointments with Equity Red. Through being an independent consultancy, Quod has working relationships with a range of technical specialists with the most relevant experience to carry out the various technical elements to feed into the planning application. We therefore tend to recommend high calibre specialists that we work with regularly for the various technical elements that feed into the EIA and planning application. We have already provided a list of our recommended specialists to Ingleton Wood, and they have confirmed they will be sourcing quotations directly. They have recently requested our input to a specialist consultant’s brief and we have been in touch to discuss the level of input required. A fee breakdown was provided, totalling £53,500 exclusive of VAT.

[117]D11 Plan 9 was not copied on this letter, nor were they mentioned in it. It would appear that at this stage Quod had no sense that D11 Plan 9 had any role in the Dunsty Farm project which (as I find, for reasons that I am giving) was in fact the case. There is the clearest of duplication between the services being offered by Quod and those being offered by D11 Plan 9 as articulated in the Project Management Agreement. In other words, in order to take the Dunsty Farm project further, only one of Quod and D11 Plan 9 was required, not both. This is consistent with D11 Plan 9 having no planning expertise. The difference in expertise may be discerned from the level of detail apparent in Quod’s proposals in this letter compared to the detail set out in the Project Management Agreement. This is on the assumption that the Project Management Agreement was a genuine document, prepared independently of the work done by Quod. It was the Claimants’ contention that the Project Management Agreement was in fact a fabrication, produced after the event by D12 Singh Soor, in order to explain the payments that D11 Plan 9 had received. I shall be coming to this point in due course. For the present I am assuming in the Defendants’ favour that the Project Management Agreement was a genuine document. What is also startling is the difference in charges for the services provided, both in terms of structure (Quod did not charge on a percentage basis) and in terms of amount (Quod quoted a fee of £53,000, whereas D11 Plan 9 estimated its fees as £200,000 in the Project Budget). What is more, both Quod and D11 Plan 9 feature in the Project Budget, which is incomprehensible (at least according to the standards of honest people) given their duplicative roles.

[118]On 23 June 2017, D12 Singh Soor emailed Quod, confirming that “we are happy for your firm to undertake the works mentioned in the proposal as lead EIA consultants on this project”. Quod proceeded to progress the identification and engagement of specialist consultants. Quod were by now aware that D11 Plan 9 had some role in the sense that communications to specialist consultants needed to go through D11 Plan 9. In an email dated 17 June 2017 – before D12 Singh Soor confirmed Quod’s appointment – Quod stated that “[i]n response to Bob’s request to obtain quotes for the various specialist studies required for the EIA for Dunsty Hill Farm”, quotes had been received. The email concluded: Please let me know your thoughts on the enclosed and do not hesitate to get in touch if you have any queries or would like to discuss any of the aspects of the technical fees/scopes further. If you are happy with the quotes and wish to instruct, we can set up individual emails for you to send to each of the specialists to confirm their appointment.

[119]The documentary evidence shows that it was Quod, and not D11 Plan 9, who approached and engaged with the consultants. The relevant documents were opened (Day 2/pp56 ff) and put to Mr Singh Soor in cross-examination. But it is difficult to prove a negative and this Judgment does not traverse the documents between Quod and the specialist consultants. However, Quod considered that D11 Plan 9 had a negative role, in that their consent to progress matters was required. Thus, on 10 October 2017, Quod emailed D12 Singh Soor in the following terms: Following our provision of technical environmental quotes to you for the Dunsty Hill Farm site in June, I wanted to follow up with you to see if there has been any progress made with them for the potential engagement of these consultants?

[120]D12 Singh Soor responded, saying “I will revert back you shortly after consultation with others parties involved in this project”. There were further chasers from Quod, culminating in an email dated 2 November 2017 from Quod to D11 Plan 9 containing draft instructions for D11 Plan 9 to send to the specialist consultants: Dear Hari, Please find the draft instruction email below for the Landscape and Visual Consultant – Arc – for your review and issue. The contact details to issue this are [the email address is set out]. Please note that in my notification email to the consultant team I have made them aware that they are to be expectant of an email from you and also that the instruction to commence is on behalf of Plan 9 Designs Limited. However, if the instruction is to be under a different client name, ie Highbarrow Holdings Ltd, you may also want to indicate that here. The text of the instruction read: Dear Katy, Thank you for your fee proposal dated 8 June 2017 for a Landscape and Visual Impact Assessment on the Dunsty Hill Farm site in the Aylesbury Vale. This email can be taken as a formal instruction to proceed for the total agreed fee of £9,000 for the assessment and reporting (including scoping input and an ES chapter) as set out in your proposal. Should you attend design team meetings or provide advice to the design team, this can [be] drawn down against the capped fee of £2,750 as required. Monthly invoices should be sent to me directly but also copied to Alistair Walker at Quod for initial checking. Similar drafts were provided for the other specialist consultants.

[121]These drafts were not sent out by D11 Plan 9 or D12 Singh Soor without further chasing from Quod. The documents were referenced at Day 2/pp58-59, but there is no need to quote from these. Eventually, in early January 2018, emails are sent out by D11 Plan 9. In form, the composition of these appears to be that of D12 Singh Soor. But the substance is derived from the information provided by Quod to D11 Plan 9, and there is no evidence that D11 Plan 9 considered using any other (different) consultants. So, after a considerable delay, the consultants were brought on board. One of the consultants, Middlemarch Environmental, was in fact sourced by Ingleton Wood, who (in this case) performed the function of Quod. D11 Plan 9’s role remained the same: Day 2/p60. Apart from delay, D11 Plan 9 contributed nothing of substance.

[122]Thus, D11 Plan 9 acted as a cypher – sending out letters of instruction, receiving invoices and – usually after a delay – paying them.

(c) Non-receipt of reports

[123]In the course of disclosure, D11 Plan 9 and D12 Singh Soor disclosed some – but not very many – reports of the consultants. See Day 2/p61. It was said (D12 Singh Soor W/S 2/[77]) that these were “the representative reports relating to the work, surveys and studies carried out by the Plan 9 teams”. This is misleading. It implies what was not in fact the case: that these reports were selected by D12 Singh Soor from a greater whole. In fact, these were the only reports D11 Plan 9 and D12 Singh Soor had to disclose.

[124]D12 Singh Soor contended – rightly – that there were many other reports, which neither D11 Plan 9 nor he held, and so could not disclose. This was the subject of some pre-trial argument: it was D12 Singh Soor’s contention that the Dropbox would contain many more reports, which would support his contention that D11 Plan 9 played a substantive role in the Dunsty Farm project. In fact, when the Dropbox was searched again (the Claimants did so on my suggestion pre-trial), no material additional documentation was found. See Day 2/pp61-62:

“You will recall, my Lord, from the 23 June hearing, that Mr Singh’s position was that: well, there must be more reports, because there were more consultants than just this. If there are more reports, Highbarrow does not have them. Mr Singh obtained from your Lordship an order that Mr Shah search for all of the documents on Equity RED’s Dropbox, responsive to the keywords “Dunsty” or “Plan 9”

. That has been done. That produced a total of 62 new documents, mentioning those keywords. None of those documents are reports.” The point made by the Claimants was that D11 Plan 9’s and D12 Singh Soor’s lack of receipt of the reports reflected their role as cyphers, without any meaningful role in the project. In other words, reports which were produced, were not sent to D11 Plan 9 because D11 Plan 9 had no role. Day 2/p62. (d). No evidence of any other substantive engagement in the Project

[125]The Claimants set out their case clearly in opening: Day 2/pp63-64. What Mr Singh has disclosed, in addition to that handful of reports which I gave my Lord references to, are many emails from the period covered by the claim. So, between 2016 and 2019, we have many emails from Mr Singh. What is absolutely striking, when one reads through all of those emails, is there is not a single email between him and any of the subconsultants substantively negotiating their terms of appointment or organising their surveys or giving them any sort of substantive instructions for their reports, reviewing drafts of their reports, giving feedback on those reports, asking questions about the conclusions reached in them. All we have are really two categories of email. One is the appointment emails he sends formally appointing these sub-consultants, and we know those emails were drafted by Quod. In fairness to Mr Singh, he does make a few tweaks to the draft when one does a line-by-line compare. We also have a multitude of emails between him and the consultants in which the consultants chase for payment. It appears to be a common theme that they would send final payment invoices and threaten proceedings because they simply weren’t being paid and the Claimants say that was because Mr Singh was using the money he got from Highbarrow, in large part, not to pay the consultants, but to pay companies associated with Ikram and to pay himself.

[126]During the course of an extensive cross-examination, this point was put to D12 Singh Soor, who (unsurprisingly) denied the contention. This denial had two aspects. First, D12 Singh Soor sought to defuse the point that D11 Plan 9 performed no substantive role because the effective work was done by Ingleton Wood and Quod. He did so by contending that D11 Plan 9’s role was much more extensive than that of Ingleton Wood and Quod. A persistent theme throughout his evidence was that D11 Plan 9 was responsible for every aspect of the Dunsty Farm project and that the work undertaken by Ingleton Wood, Quod, as well as that of Mr Kahlon and others was done under “the Plan 9 umbrella”. I reject this evidence for the following reasons:(i) it is unsupported by the documentary evidence;

(ii) it is illogical, since until some form of planning permission was obtained (which Ingleton Wood and Quod were undertaking) there was nothing more that could be done to progress the project;

(iii) D12 Singh Soor was unable to provide any evidence of substantial work by D11 Plan 9. Indeed, the examples of the work done by D11 Plan 9 were so insubstantial that in themselves they highlighted the fact that D11 Plan 9’s role was simply to provide a façade for the extraction of monies out of C4 Highbarrow.

[127]This point is related to the second aspect of D12 Singh Soor’s denial of the Claimants’ case, which was that irrespective of the breadth of D11 Plan 9’s responsibilities, no substantive work was done on the project by D11 Plan 9 itself, by D4 Equity RED or by Mr Kahlon.

[128]The role of Mr Kahlon is addressed in the next section: it is sufficient at this stage to note that, contrary to D12 Singh Soor’s assertions, there is no evidence of Mr Kahlon having done any substantive work in progressing the Dunsty Farm project. So far as D4 Equity RED is concerned, their role (notwithstanding the absence of an ADMA) was to progress the development of the project, and that is why the representatives of D4 Equity RED are listed in the various Ingleton Wood meeting notes. However, I have found (see Section G(7)) that the Directors and D4 Equity RED had no intention of progressing the Dunsty Farm project and knew, from the outset, that the project would never complete and that the Fakhruddin brothers were throwing their money away so far as this project was concerned. D4 Equity RED for that reason performed no meaningful work in relation to the project.

[129]So far as D11 Plan 9’s own efforts were concerned, D12 Singh Soor’s attempts to identify work that was done only served to highlight that D11 Plan 9 did nothing substantive. True it is that a drone survey of the Dunsty Farm site was commissioned in early 2017 by D11 Plan 9, and I am prepared to accept that this was useful work if the project had been genuinely intended to progress. But the work done by Survey Solutions was a de minimis one-off, costing £6,576.00. D12 Singh Soor’s repeated reference to this work in cross-examination only served to highlight the absence of substantive effort and work on the part of D11 Plan 9. I regard the survey as an instance of work done by a legitimate contractor, but where the person commissioning that work (in this case, D11 Plan 9 through Mr Kahlon) knew that the work was pointless. In other words, this was another case of “window dressing”.

[130]D12 Singh Soor’s efforts at finding other work that D11 Plan 9 had done tended to backfire. Thus, the work said to have been done in developing solar systems for Dunsty Farm turned out to amount to no more than purchasing solar panels for D12 Singh Soor’s relatives.

[131]During the course of D12 Singh Soor’s cross examination, he made the fair point that he could not be expected to remember details from the very extensive record of the case, particularly given the effluxion of time. Thus, for instance, documents evidencing work that D11 Plan 9 had done might – had D12 Singh Soor been represented – have been put to him in re-examination. Since D12 Singh Soor was effectively representing himself, there was no-one to perform this service for him. Whilst I have no doubt that the Claimants’ legal team put their case to D12 Singh Soor fully and fairly, I considered that D12 Singh Soor should have the opportunity (in place of re-examination) to draw to my attention any documents that might otherwise have been deployed in re-examination, including any substantive discussions regarding work done at Dunsty Farm. D12 Singh Soor duly submitted a document, containing references to materials I should look at, on 30 August 2025 (the D11-D12 August Submission). I have reviewed the references provided in this document. They do not cause me to change the view I have expressed as to the absence of substantive work by D11 Plan 9 and D12 Singh Soor on the Dunsty Farm project. There is no unidentified reservoir of documents to even begin to enable me to do so. (14). The role of Mr Kahlon and the services provided by him

[132]The manner in which Mr Kahlon brought D11 Plan 9 into the project has been described. It has also been seen that Mr Kahlon was – in the meetings with Ingleton Wood – described as representing D4 Equity RED. D12 Singh Soor contended that even at these meetings Mr Kahlon was “working under the Plan 9 umbrella”. Day 8/p31. This was explored in cross-examination: Day 8/pp33ff. Q (Ms Thompson) But you’re present at this meeting, aren’t you, Mr Singh, if we go back to page 1? A (D12 Singh Soor) Yes, I was present, and the meeting was chaired by Bob on behalf of Plan 9. Q (Ms Thompson) But Bob is listed as attending on behalf of Equity Real Estate Developments, isn’t he, Mr Singh? A (D12 Singh Soor) Yes, but he was working for Plan 9 at that stage. You’ll see this throughout the course of the project. Because Ingleton Wood were not really concerned with the designation of all the players. They were more concerned about the technical specialisation that was going to be brought to the project… …And you’ll see Bob Kahlon named under various entities. Obviously, when he started, before Plan 9 actually came into being, he was working with Equity Real Estate Limited, not Developments, so again the name is incorrect. But Bob was initially working with Equity RED, as was Ikram Haq, and obviously that historical situation stuck with Ingleton Wood because, when this whole thing started, probably in 2016, they were given the impression that Bob Kahlon was part of Equity RED.

[133]There are a number of difficulties here: i) D4 Equity RED cannot have been under the D11 Plan 9 umbrella. D4 Equity RED was in partnership with the Fakhruddin brothers to develop Dunsty Farm. C4 Highbarrow was the Claimant SPV set up to achieve this. If anything, D11 Plan 9 was operating under the D4 Equity RED “umbrella”. The idea that D11 Plan 9 could pay D4 Equity RED’s invoices, add its 10% under PMA and effectively cause the Fakhruddin brothers to pay twice over for the same service (once through the “partnership” they had with D4 Equity RED; and once through C4 Highbarrow’s payments to D11 Plan 9) is simply another manifestation of the Directors’ dishonesty. ii) Here, however, we are concerned with the state of mind of D12 Singh Soor and (through him) D11 Plan 9. I do not consider that D12 Singh Soor will have been apprised of the full details of the D4 Equity RED – Fakhruddin brothers arrangements, and I consider his statements regarding the D11 Plan 9 “umbrella” as wrong, but perhaps not subjectively so. It is therefore necessary to consider the D11 Plan 9 relations with Mr Kahlon from the standpoint of D12 Singh Soor (and so D11 Plan 9). iii) There is an ambiguity in D12 Singh Soor’s answers as regards Mr Kahlon. Was Mr Kahlon working for D11 Plan 9 in the sense of him being a cost to D11 Plan 9 (ie something that D11 Plan 9 would have to pay for out of the remuneration it received from C4 Highbarrow) or a cost of C4 Highbarrow which D11 Plan 9 paid for on behalf of C4 Highbarrow, to which costs D11 Plan 9 added their 10% margin. Over the course of the trial, it became clear that D12 Singh Soor regarded the latter, and not the former, as being the case. Since (as will be seen), it was D12 Singh Soor’s evidence that Mr Kahlon was mainly paid through ASA (ie via D3 Ikram), the sheer oddity of the 10% remuneration must have been apparent to D12 Singh Soor: here was a Director invoicing for unspecific services, with D11 Plan 9 adding 10%, in circumstances where that invoice was paid by an entity – C4 Highbarrow – of whom that Director was a director.

[134]In D11-D12 Defence/[18], D11 Plan 9 and D12 Singh Soor denied that Mr Kahlon was a “representative” of D11 Plan 9. I do not understand this to be saying that Mr Kahlon was unrelated to the Dunsty Farm project, but rather that he was an independent contractor retained by D11 Plan 9, and not part of the D11 Plan 9 cost base. This is consistent with the Project Budget appended to the Project Management Agreement. It does not matter (save to increase the factual uncertainty that surrounds all this) that Mr Kahlon appeared to operate under a variety of corporate labels: D4 Equity RED, J & P Developments, etc.

[135]I propose to consider Mr Kahlon’s role in this way. I will be coming to the manner in which Mr Kahlon was paid in due course. Although it is actually very hard to say what Mr Kahlon was paid, the critical question (for present purposes) is not what he was paid, but what he did in relation to the Dunsty Farm project. Questions of payment (both what Mr Kahlon was entitled to receive, and what he did receive) are secondary to this question. The key question is, what, exactly, was Mr Kahlon was retained to do, and did he do that which he was retained. If Mr Kahlon provided valuable planning services to the Dunsty Farm project, then one would expect him to be paid for the rendering of such services. To that extent the two questions – what did Mr Kahlon do?; and how was he paid? – are related. The latter question, however, is considered separately below.

[136]D12 Singh Soor was unable – at any time – to explain in any coherent detail what Mr Kahlon actually did on the project: See Day 9/pp86ff. Q (Ms Thompson) …Bob hadn’t done any other co-ordination of specialist consultants because it is Quod who obtain fee proposals for all of the other consultants in June 2017, isn’t it? A (D12 Singh Soor) That is not correct. Q (Ms Thompson) Ok. Can you give me an example or examples plural of Bob co-ordinating consultants between January and June 2017 other than the Survey Solutions example? A (D12 Singh Soor) We need to look at the payments made by Highbarrow and I believe there is a – and I have seen this in disclosure. I don’t have it in front of me, but there’s a company, I believe it is C&M Land, who did some work on the project. … Now what co-ordination Bob did or Ikram did, I don’t have the full details here, because I don’t have all the disclosure. But there was work being done on the site. The invoice says “work to date to progress application for planning”, so even if that was done, if they had rung someone, they had spoken to someone, that was happening. And then the second part says “co-ordination of specialist consultants” and even if two specialist consultants were working on this project that would satisfy that. And the last thing is meeting with statutory bodies. Now, it doesn’t have to be done directly by us: it can be done by agents that we may have appointed. Q (Ms Thompson) Mr Singh, you weren’t aware of a single one of an agent that you had appointed which had met with statutory bodies. There were no meetings with statutory bodies in this period. This is just a false invoice to provide a paper justification for receiving Highbarrow’s funds and paying them on to Ikram, isn’t it? A (D12 Singh Soor) It is not. If you ring the local authority or if you contact them by emails, you know, to me, that is contact with statutory bodies. Q (Ms Thompson) That’s a meeting, is it? A (D12 Singh Soor) It may not be a meeting, it may be a phone call. You can have a meeting on the phone call. Q (Ms Thompson) Mr Singh, you have absolutely no idea whether or not anyone on behalf of Plan 9 made a phone call to the local authority. Let’s go through the list. Did you make a phone call to the local authority in this period? A (D12 Singh Soor) Well, I think you are… Q (Ms Thompson) Did you personally… A (D12 Singh Soor) No, please, can I just clarify? Can I just clarify. This narration, this narrative, was provided by Bob and I trust him to provide a narrative that is true and fair. He is someone who has engaged in planning permission on projects previously, so he wouldn’t put this down, and it doesn’t matter what you put down here as long as it is what you have done, and if he hadn’t done it, why would he put it. It is not my narrative. It is not my terminology that’s on this invoice. I have relied on someone who I trust and he has in good faith put in this narrative and I believe it to be correct. And for you now to argue against someone who hasn’t contributed to this narrative but has relied on it, I think it is unfair.

[137]One cannot define what services were provided by Mr Kahlon reference to invoices rendered. That is a circular and unhelpful argument. It is certainly not evidence. It cannot be said that Mr Kahlon provided valuable services simply because invoices were rendered suggesting that work was done. D11 Plan 9 was purporting to supervise the Dunsty Farm project. D12 Singh Soor’s reliance on the narrative in invoices was further – and clear – evidence that no substantive work was done either by D11 Plan 9 or by Mr Kahlon. (15). D11 Plan 9’s invoicing for work not done

[138]This is not a re-run of the point at Section G(13), but an altogether narrower point regarding what can only have been dishonest invoicing. As has been described, the specialist consultants were not appointed until January 2018. It follows that no work, in this regard, can have been done (whether by D11 Plan 9 or anyone else) prior to January 2018. Yet D11 Plan 9 invoiced C4 Highbarrow during the course of 2017 for services that could not possibly have been incurred. See Day 2/p60, where the point is made in opening. D12 Singh Soor describes D11 Plan 9’s initial invoices to C4 Highbarrow in the following terms: D12 Singh Soor W/S 2. [18] As per the agreement reached between Bob and HHL on 18-01-17, the first invoice for the work carried out in engaging the specialists was sent to Highbarrow Holdings Limited (“HHL”). As Plan 9’s bank account was not yet operational, a third party, Ace Consultancy (“Ace”) was stated as the recipient of the amount to be paid by HHL on the invoice. This initial transactions were carried out as per the agreed oral terms which are attached to the statement. [19] The funds were used to pay for the various works that had been carried out on the Dunsty project in engaging consultants to begin the detailed reports and proposals for the project. The scope of the work required to be done is shown in the Budget report…It can be seen from the Budget report that the total budget was set at about £1.5 million. … [22] On 01-02-2017, 23-02-2017 and 17 March 2017, the second invoice, third invoice and fourth invoice were sent to HHL and again these invoice amounts were paid to Ace.

[139]The terms of the first invoice were provided to D12 Singh Soor by Mr Kahlon in a WhatsApp, and this invoice formed the basic template for future invoices. Invoices (eg the first one dated 18 January 2017) were on D11 Plan 9 headed paper, addressed to C4 Highbarrow for the attention of D3 Ikram.

[140]As will be described below, D11 Plan 9 initially operated through an account of Ace Consultancy (the Ace Consultancy Account), before opening its own account (the Plan 9 Account). The bank account for payment to D11 Plan 9 was specified in the invoices, and in the early invoices this was the Ace Consultancy Account. The narrative for the invoices was as follows: Fees in respect of site: Dunsty Hill Farm Edgcott Road Calvert Green Buckinghamshire OX27 0BJ Works to date to progress application for planning and co-ordination of specialist consultants and meetings with Statutory Bodies, 1st November – 23rd December 2016 Our charges for the work undertaken £36,000 plus VAT @ 20% Nett amount £36,000.00 Vat at 20% £7,200.00 Total Amount due £43,200.00 The later invoices were in similar form.

[141]The narrative in the invoices is very vague (and it will be recalled that the PMA sanctioned this See [85(v)] above. ). However, it is surprising that D11 Plan 9’s fees are not separately stated, either at the flat rate of £5,000 or at 10%, because D11 Plan 9’s fees were (if the Project Management Agreement was genuine) to be calculated by reference to the costs that D11 Plan 9 incurred and in relation to which was seeking an indemnity or reimbursement. The absence of a separate statement of D11 Plan 9’s fees thus renders it impossible to tell(i) what D11 Plan 9 was purporting to charge for and

(ii) the amount of D11 Plan 9’s remuneration. This obfuscation and lack of transparency is hallmarks of fraud.

[142]Leaving on one side, for the moment, the role of the Ace Consultancy (to which I will return), and assuming (but without accepting) there was an oral agreement regarding the services of D11 Plan 9, the problem with D12 Singh Soor’s account at [138] is that D11 Plan 9 was invoicing for services that cannot have been provided given the chronology of the appointment of the specialist consultants that has already been described.

[143]The evidence was that Mr Kahlon instructed D12 Singh Soor to send the invoices, and that it was Mr Kahlon who told D12 Singh Soor what these invoices were to say. In a WhatsApp message on 17 January 2017 (ie one day before the first invoice), Mr Kahlon gave D12 Singh Soor the address of C4 Highbarrow, and the wording for the invoice: Fees Dunsty Hill Harm Edgcott Road Calvert Green Buckinghamshire OX27 0BJ Works to date to progress application for planning and coordination of specialist consultants and meetings with statutory bodies. 1st November – 23rd December 2016 £36,000 plus VAT @ 20% Send invoice to Ikram Haq ih@equityred.com

[144]In short, the 2017 invoices were simply fabrications, bearing no relation to work done on the Dunsty Farm project. This point was put to D12 Singh Soor in cross-examination: Day 8/pp119 ff. Also, to similar effect, Day 9/pp83 ff. Q (Ms Thompson) [Putting [18] of D12 Singh Soor’s statement set out at [138] above] You say:

“The first invoice for the work carried out in engaging the specialists…”

I’ll put to you, that’s a lie. Other than sending the email in relation to Survey Solutions, you hadn’t carried out any work engaging specialists, that was all Quod and Quod did it from mid-2017 onwards. A (D12 Singh Soor) I’m repeating myself. Quod were part of the Plan 9 team. So when you say Plan 9 did not do it, well, Plan 9 paid Quod to do some of the work. So I think I’ve repeated this a number of times. Whether we did it ourselves or Plan 9’s agents did it or Bob did it, that’s what I mean by Plan 9 undertaking these tasks. I mean that the company and its agents carried out that work. Which part do you say is untrue? Q (Ms Thompson) Hang on. Just picking up on that, it was Quod who carried out the work engaging the specialists you say, but Quod hasn’t been engaged at this point, Mr Singh. We say that Quod weren’t engaged until June 2017. So when you said this invoice was for the work carried out in engaging the specialists, you can’t have meant the work carried out by Quod in engaging the specialists, because Quod doesn’t come on the screen until 6 months later. A (D12 Singh Soor) Where does it say “Quod” in this paragraph? Q (Ms Thompson) The answer you gave me just now was that it didn’t need to be Plan personally doing the work engaging the specialists, it could have been Quod. But I’m putting to you, it couldn’t have been Quod in January 2017, because Quod weren’t on the scene? A (D12 Singh Soor) Yes, but what – the answer I’m giving you is that I say that, as per the agreement reached between Bob and Highbarrow Holdings on 18 January 2017, the first invoice for the work carried out in engaging the specialist was sent to Highbarrow Holdings – and I referred to the actual invoice…

[145]As regards the dictating of the invoices: Day 8/pp126ff. Q (Ms Thompson) Mr Singh, we’ll go through this, but there are many, many examples in these WhatsApp messages of Mr Kahlon dictating to you how much Plan 9 should invoice. There are no examples in these WhatsApps, or in any disclosed document, of you and Mr Kahlon discussing and calculating what that figure should be. What I’m putting to you is that you are lying when you say that you had those discussions with Mr Kahlon, because if it were true that you’d had those discussions, then there would be evidence of them? A (D12 Singh Soor) Well, you’re absolutely wrong. You’re absolutely wrong on that because, as I said, I categorically remember a conversation where Bob would ask me how much Plan 9’s expenses were for that month. I’m not convinced that it’s not in the WhatsApp, it’s probably there and I will see if I can find it. But I can categorically tell you that that is incorrect, your perception is totally incorrect.

[146]There was no basis for the rendering of the 2017 invoices by D11 Plan 9. They charged for services that D12 Singh Soor must have known had never been rendered because they related to periods when Quod was not instructed and no specialist consultants were retained. There is no evidence of any work having been done by D11 Plan 9, whether by itself or through Mr Kahlon. The terms of the invoices were simply dictated to D12 Singh Soor, who caused D11 Plan 9 to render them, knowing that the charges contained therein had not been incurred. (16).

(a) The relevance of the issue

[147]In one sense, the answer to this question does not matter. If the Dunsty Farm project was a sham from beginning to end, as I have found to be the case, then the Project Management Agreement could be regarded simply as “window dressing” by the Directors. In other words, so far as the case against the Directors and D4 Equity RED is concerned, the Project Management Agreement is something of a side-issue.

[148]The point does, however, matter for the purposes of D12 Singh Soor’s honesty. Whilst a genuine Project Management Agreement does not preclude the conclusion that D11 Plan 9 was doing no effective work (which is what I have found), the converse does not hold good: if the Project Management Agreement was an after the event construction, put in place after its stated effective date, then that speaks volumes in terms of D12 Singh Soor’s honesty.

[149]So far, I have proceeded on the assumption that the Project Management Agreement was what it purported to be – an agreement concluded in March 2017, entitling D11 Plan 9 to payment. I have concluded that because the entire Dunsty Farm project was in essence and substance a fiction, that the Claimants can succeed even if the Project Management Agreement was concluded when it was. That being said, the fact that:(i) the Dunsty Farm Project was a fiction;

(ii) D11 Plan 9 was not a planning consultant;

(iii) no substantive work was done by D11 Plan 9 (or any agents “employed” by it, like Mr Kahlon); and

(iv) invoices were rendered for work that could not have been done, all point strongly in the direction of the Project Management Agreement itself being a fiction. That is my conclusion, for these and the following additional reasons.

(b) Relationship of the invoices to the PMA

[150]The general text of the D11 Plan invoices was set out at [140] above. The invoices rendered by D11 Plan 9 bear no relation to the charging structure laid down in the Project Management Agreement itself. The manner in which D11 Plan 9 invoiced makes it impossible to reconcile the amounts invoiced with the terms of the Project Management Agreement. As I have described, the remuneration of D11 Plan 9 depended upon the payments D11 Plan 9 made on behalf of C4 Highbarrow, subject to a minimum payment of £5,000. This required D11 Plan 9 to be clear what services had been obtained and paid for. D12 Singh Soor was unable to explain how the remuneration to D11 Plan 9 had been computed.

[151]D12 Singh Soor was asked about the first invoice set out above: Day 8/pp114ff. The wording of the invoice is at [140] above. Q (Ms Thompson) And Quod is not appointed until June 2017 because we saw the fee proposal that Quod made in June 2017? That’s right, isn’t it? A (D12 Singh Soor) Quod is not…but some – Survey Solutions were paid their first invoice in January 2017, and Bob and Ikram had engaged them previously. So it was… Q (Ms Thompson) Just to understand your evidence, Mr Singh, when you said on the invoice “Coordination of specialist consultants”, it is really your case that this is a reference to sending an email to Survey Solutions asking them to do a drone survey of the land? A (D12 Singh Soor) Well, we are co-ordinating the specialist consultant, aren’t we? We’re working with them to do the survey. So if you say that engaging with them to carry out a survey is not covered by “planning and coordination of specialist consultants”, then I’m sorry, I don’t understand English. But to me, you know, to actually engage a specialist, to have a meeting with them, to write to them through Bob or Ikram, to make sure they understand what needs to be done, is what’s covered by the first part of that narrative. Q (Ms Thompson) Okay. So we saw before that the payment to them was, I think, about £5,500. You agreed with me you spent 30 minutes, which is interesting, but 30 minutes with Mr Kahlon discussing whether to appoint them, and you spent five minutes sending an email, and for that Plan 9 is charging £36,000? Is that your evidence? A (D12 Singh Soor) Well, the actual invoicing was done with coordination of Bob. Q (Ms Thompson) We’ll get to that. I want to understand what your understanding of what this invoice was for. Is it correct that your understanding of this invoice was that you were invoicing £36,000 for the £5,500 that had been paid to Survey Solutions and for the half hour you’d spent discussing with Bob and the five minutes you’d spent sending the email? A (D12 Singh Soor) Well, no. The £5,000 would be our fees for that month. Q (Ms Thompson) For a half-hour discussion with Bob and 5 minutes you’d spent sending the email? A (D12 Singh Soor) Sorry, we have a contract. I’m sorry, but you seem to fail to understand that there was a contract signed in January, and we would be entitled to £5,000. So £5,000 would be that. Nearly £6,000 for the survey. There would be costs for Bob Kahlon. He wanted a car. Q (Ms Thompson) Where’s the invoice from Mr Kahlon for this period? A (D12 Singh Soor) He didn’t invoice, he was paid through ASA, as I’ve already mentioned. So there was an invoice from ASA, which went against this amount. … Q (The Judge) Again, can you help me, Mr Singh, how exactly this £36,000 is calculated? You say you were entitled to a minimum spend of £5,000. This covers a two month period? A (D12 Singh Soor) Yes, your Lordship. Q (The Judge) So £10,000? A (D12 Singh Soor) That’s correct. Q (The Judge) Right, we then have expenditure on Survey Solutions at £5,500? A (D12 Singh Soor) That’s correct, your Lordship. Q (The Judge) Right. And then you get a loading of 10% on that? A (D12 Singh Soor) That’s covered in the £10,000, your Lordship. Q (The Judge) Is it? A (D12 Singh Soor) It is, yes. Q (Judge) I thought it was only if the invoicing was above £40,000 that you… Q (Ms Thompson) Which this is, my Lord. Q (Judge) Is it…If you take the VAT… Q (Ms Thompson) Well… Q (Judge) Okay. It’s slightly circular, isn’t it, because we’re trying to work out what the £36,000 comprises? A (D12 Singh Soor) That’s right. Q (Judge) I’m trying to be generous to Plan 9, so I’m going to add a further 10% to the £5,500. So that’s £500. So we’re at £16,000 roughly. What’s the other £20k? A (D12 Singh Soor) Your Lordship, there would be quite a big component for Bob, which would be added to that. And normally he would tell me how much his expenses were. Initially his expenses were quite high; and then later on they would taper off a little bit. Q (Judge) Well, how did he tell you that? A (D12 Singh Soor) Normally, on WhatsApp. I think some of the WhatsApp exchanges will give us figures that he wants to invoice Highbarrow Holdings. So, for example, your Lordship, if he spent three or four hours talking to specialist companies, then he would equate that to a sum and then he would send me that amount.

[152]I appreciate that vagueness in the invoicing is consistent with the fact that D11 Plan 9 could not actually point to any work being done at all; and that this invoice was for the period pre-dating the formal entry into effect of the Project Management Agreement. Nevertheless, the fact that D11 Plan 9’s contractual entitlement under the PMA is impossible to calculate by reference to the invoices rendered by D11 Plan 9 is telling, and strongly suggests that the Project Management Agreement was itself a document created after the event. (c). The Project Management Agreement was not placed on the Dropbox

[153]The Project Management Agreement was never disclosed onto the Dropbox, which (had it been genuine) it likely would have been.

(d) No meta-data

[154]The Project Management Agreement was disclosed (in the course of the disclosure process) as a PDF without any meta-data – even though the order of the court had been to provide electronic documents in native format so that the meta-data could be considered. I consider that adverse inferences can be drawn from this failure, for D12 Singh Soor could provide no coherent explanation as to why a native version could not be provided. In my judgment, this is a case of a deliberate non-provision of a material document. D12 Singh Soor’s position was that the meta-data was lost, when the PMA was incorporated into a “global” multi-document PDF. It is well understood that such merging of documents duplicates and does not destroy.

(e) Drawing on Quod’s quotation

[155]I have referred to Quod’s proposals in regard to its role as lead EIA consultants for the Dunsty Farm project at [117]. The detail of the Project Management Agreement strongly suggests that it – and particularly the Project Budget appended to the PMA – was compiled after Quod’s work in identifying the specialist consultants had been completed.

[156]The initial proposals were contained in an emailed letter from Quod dated 20 June 2017 – months after the purported date of the Project Management Agreement and the Project Budget attached to it. These proposals, although detailed, did not disclose the identities of the specialist consultants to be appointed to the project. That is unsurprising, since this was the very work that Quod were quoting to undertake. It is therefore surprising that the Project Budget, whilst lacking in the detail of Quod’s quotation, manages to identify – months before Quod – the identities of various specialist consultants ultimately identified by Quod. This is a clear indicator that the Project Budget and the Project Management Agreement were generated at the earliest in late 2017, and quite possibly in 2018.

(f) Conclusion

[157]I conclude that the Project Management Agreement was created after the event, probably in order to buttress the counterclaim. I find that the Project Management Agreement was a back-dated, sham, document. This is not a material finding in terms of liability: but it is relevant to the question of honesty. (17).

(a) Introduction

[158]The Claimants contended that D11 Plan 9 was no more than a vehicle for the improper extraction of monies from C4 Highbarrow, enriching the Defendants illegitimately. The Claimants’ case was that D11 Plan 9(i) did nothing of substance except

(ii) circulate money. See, eg, Day 2/p72. I have found the first proposition to be correct. Not only was the Dunsty Farm scheme understood to be a sham by the Directors, that was also the understanding of D12 Singh Soor. To recap: (i) neither D11 Plan 9 nor D12 Singh Soor were qualified to act as planning consultants or advisors; (ii) neither D11 Plan 9 (including D12 Singh Soor) nor persons purportedly retained by them (like Mr Kahlon) did any meaningful work on the Dunsty Farm project;

(iii) no meaningful work was done at all during 2017, yet D11 Plan 9 rendered a series of invoices during 2017 for services that I have found to be impossible to perform because the relevant actors were not yet retained;

(iv) although some legitimate professionals were retained (notably Ingleton Wood, Quod and some (although not all) of the specialist consultants), this was done not to further the Dunsty Farm project, but to provide cover so that D4 Equity RED and the Directors could show something by way of (meaningless) progress to the Fakhruddin brothers.

[159]The use of D11 Plan 9 as a money extraction device is well-illustrated by the following exchange during the cross-examination of D12 Singh Soor. It is a lengthy extract, but helpfully draws together many of the threads considered above: Day 10/pp147ff. Q (Ms Thompson) So, by 16 January we have had £45,000 into the Ace account from the Plan 9 account? A (D12 Singh Soor) That’s correct? Q (Ms Thompson) Thank you. And then…there is a payment to the London Borough of Barking and Dagenham for £45,000, so that’s the exact sum of the payments in from Plan 9. Do you see that? A (D12 Singh Soor) Yes, I do. Q (Ms Thompson) And I think your evidence is that Plan 9 paid that sum to the London Borough of Barking and Dagenham to settle some litigation that they had with Bob about the payment of council tax? Is that right? A (D12 Singh Soor) Yes, that’s correct. Q (Ms Thompson) Right. A (D12 Singh Soor) No, not council tax, sorry. Q (Ms Thompson) Oh, was that something else, some litigation between Bob and the council? Is that right? A (D12 Singh Soor) That’s correct….Bob and his wife against London Borough of Barking and Dagenham. Q (Ms Thompson) Thank you. So my question, Mr Singh, is why is Plan 9, via Ace, paying Bob’s litigation settlement with the London Borough of Barking and Dagenham? A (D12 Singh Soor) Why was Plan 9…? Q (Ms Thompson) So Plan 9 transfers £45,000 to Ace. The same day, Ace transfers £45,000 to this London local authority. Your evidence is that payment was to settle litigation which Bob and his wife had with the local authority. My question is why is Plan 9 using Highbarrow’s money to settle Bob and his wife’s private litigation? A (D12 Singh Soor) Well, you say it’s Highbarrow’s money. We say it is not Highbarrow’s money, it is Plan 9’s money, Q (Ms Thompson) Right. But Plan 9 got its money from Highbarrow, can we agree that? A (D12 Singh Soor) Yes, but Plan 9 received 10%, which was not then – that wasn’t – once that 10% had come into Plan 9, that wasn’t Highbarrow’s money. It was then Plan 9’s money. Q (Ms Thompson) Mr Singh: the…£45,000 payment was not 10%. So Plan 9 had not invoiced Highbarrow £450,000 that month? 10% of £450,000 is £45,000. A (D12 Singh Soor) It is not that month. I didn’t say that month. You said that month. But this is money that has been – the project has been going on for nearly two years now, so over the two years there has been 10% of £5,000 which has been coming in every month. So from that, Plan 9’s commission, this payment has been made. And it was made because if he didn’t make that payment there was a chance that Bob could be made bankrupt by the London Borough of Barking and Dagenham. They were chasing him for twice this money, if I remember rightly, £90,000. Q (Ms Thompson) …I want to move on now…So here we can see that on 24 May 2019, there is a payment to Malmos Construction for £10,470? … And you didn’t see any evidence of Malmos having done the work, other than an invoice forwarded to you by Ikram, did you? A (D12 Singh Soor) Well, no, there are two things. When I make payments generally, there are two things. One is that there has to be an invoice. The other is that they should be on the budget and I discussed this with Bob and obviously, because of the fact that they are on the budget, I didn't…it didn’t… Q (Ms Thompson) Okay, I think the answer, Mr Singh, to shortcut this, the answer to my question: other than the invoice, did you see any evidence of Malmos having done the work? If the answer to my question is “No”, just say “No”? A (D12 Singh Soor) No, well…yes, but there is a proviso that I did see work from Quod, yes, but I paid their invoices because Bob did see the work… Q (Ms Thompson) I’m sorry, that is not right, that is not correct, you did see work… A (D12 Singh Soor) Can I finish, because it is unfair, it is unfair not to let me finish. I’m not repeating myself, but I’m clarifying that even in the case of Quod, I did not see their reports, but Bob did and Bob authorised that payment. And I believed Bob. I trusted him and in a similar way Bob authorised this payment, he would be the person who would see what had been done or had not been done. Q (Ms Thompson) Mr Singh: I am just going to put to you, when you paid Malmos £10,478, you didn’t believe that they had done any work for Dunsty, you just made this payment because Ikram told you to and you suspected it was a means of funnelling money back to Ikram. A (D12 Singh Soor) That is incorrect. Q (Ms Thompson) Right. Mr Singh, you said on Friday, and you have said it several times, that Bob’s work on the Dunsty project was paid for through the money paid to ASA? That is your case, isn’t it? A (D12 Singh Soor) Yes. Q (Ms Thompson) Okay. Your case is also that the money paid to ASA was an expense for which Plan 9 was entitled to be reimbursed by Highbarrow in the same way, for example, money you paid to Middlemarch was an expense for which Plan 9 was entitled to be reimbursed by Highbarrow? A (D12 Singh Soor) That’s correct, yes? Q (Ms Thompson) And your case is also that under the PMA, Plan 9 is entitled to charge 10% on all invoices raised by consultants and 10% on the profits made on the project? A (D12 Singh Soor) On termination? Q (Ms Thompson) On termination. But that’s correct? A (D12 Singh Soor) That’s correct, yes. Q (Ms Thompson) Okay. So the 10% commission and the 10% profit on termination cannot have been justified by work done by Bob because your case is that Bob was invoicing through ASA and Plan 9 was already passing the cost of ASA’s invoices on to Highbarrow. And in fact we have seen that of the £1.56m that Highbarrow pays Plan 9, £455,000 is paid to Bob. So, on your case, Mr Singh, the 10% commission on the invoices and the 10% profit can only be justified by reference to work that someone at Plan 9 other than Bob does. Do you agree? A (D12 Singh Soor) No, I don’t agree. Anyone on that budget – anyone who is on that budget, if we have to pay an invoice for that work, then there would be 10% which Plan 9 would be entitled to. That was the condition on which I agreed to take on this work. Q (Ms Thompson) Yes, I understand that Mr Singh. But Bob does work and then invoices – ASA invoices for Bob’s work. Quod does work, Quod invoices for Quod’s work, are we agreed? A (D12 Singh Soor) Yes, I agree. Q (Ms Thompson) Plan 9 passes the cost of those invoices in their entirety to Highbarrow, do we agree? A (D12 Singh Soor) Yes, that’s correct. Q (Ms Thompson) Plan 9 then charges 10% of invoices on top, do we agree? A (D12 Singh Soor) That’s correct, yes. Q (Ms Thompson) Okay. In that case, that 10% can only be justified by reference to work that someone other than Bob and someone other than Quod does, otherwise you are just double-counting, you are just adding a margin for absolutely no reason. Someone has to be doing some work for that 10%, do you agree? A (D12 Singh Soor) Yes, for any work that is done on the project, we would be entitled to 10%.

[160]A number of points, already addressed, are made clear or clearer in this exchange: i) The lack of transparency in the D11 Plan 9 invoices enabled D12 Singh Soor to deploy D11 Plan 9’s remuneration of 10% (subject to a £5,000 floor) to justify any payments that could not otherwise be justified. But viewed in the round – and it is very difficult to compile a list given the uncertainties – taking the Project Budget at face value as a genuine document, D11 Plan 9’s entitlement to remuneration can only have been around £150,000. Ie 10% of £1,420,000, being the total in the Project Budget set out at [85]. This, however, contained a good deal of “fat”: £200,000 to D11 Plan 9 and a “contingency” of £200,000. . As this exchange shows, £45,000 went to Mr Kahlon; and every month £2,500 (according to D12 Singh Soor) was due to be paid to the Ace Consultancy for the provision of administrative services to D11 Plan 9, which, over a two-year period would have amounted to £60,000. That leaves £45,000, which (impressionistically) one senses D12 Singh Soor over-spent on. ii) There is a great danger in trying to over-systemise what was in reality an opportunistic and ad hoc fraud. The payment to Mr Kahlon of £45,000 is illustrative of this. There was no regime for paying Mr Kahlon, and I have found it impossible to work out what Mr Kahlon received (a point considered further below), what he did, and how far he was involved in the fraud (and to be clear I make no findings as to his involvement in this regard). What is clear is that C4 Highbarrow’s money was spent as the Directors and D12 Singh Soor fancied. There was no correlation between these transactions and the Dunsty Farm project. iii) The invoicing by D11 Plan 9 was, as I have noted, remarkably untransparent. That served many ends – including an ability to say what one pleased on inquiry (including in court), because the story could not easily be invalidated by reference to specific expenditure. iv) Mr Kahlon was the “catch all” answer for D12 Singh Soor, when D12 Singh Soor was lost for any other answer. But the more one probes the role of Mr Kahlon, the faster the mist descends. It is unclear – even after a trial of many days – what Mr Kahlon’s positive involvement was. Negatively, one can say, as I have found, that Mr Kahlon did nothing substantive in progressing the Dunsty Farm project. D12 Singh Soor’s need to rely on Mr Kahlon was because there no evidence of D11 Plan 9 doing anything substantive on the project. That was for good reason: nothing was being done, save for the instruction of specialist consultants by Quod.

(b) The accounts used by D11 Plan 9

[161]Monies from the Claimant SPVs (mainly C4 Highbarrow and the C4 Account) were paid into two accounts that were operated by or on behalf of D11 Plan 9. In fact, there were in each case two accounts a deposit account and a current account, with frequent movements of money between the two. This will likely be important for tracing purposes, but is not material for the purposes of this Judgment. Accordingly, I refer compendiously to the Ace Consultancy Account and the Plan 9 Account. These were (in chronological order) the Ace Consultancy Account (mentioned above) and the Plan 9 Account, which was a bank account opened later.

[162]The Ace Consultancy Account was an account not in the name of either D11 Plan 9 or D12 Singh Soor but in the name of the Ace Consultancy, which was a business operated by Mrs Singh. Although D12 Singh Soor contended that the Ace Consultancy Account was nothing to do with him and he had no operational power over it, I do not accept that evidence. The evidence discloses that D12 Singh Soor knew very well what monies were coming into the Ace Consultancy Account and D12 Singh Soor did not suggest that payments out of the account – at least when made for the purposes of D11 Plan 9 – were done without his knowledge and authority.

[163]D12 Singh Soor used the fact that he was not named as the account holder to obfuscate and hide the true facts. Thus, during the disclosure process he claimed not to know who the account-holder was; tried to prevent disclosure of the bank statements relating to the Ace Consultancy Account; and (whilst the bank statements were being sought in disclosure) produced instead selective lists of transactions that presented an entirely misleading impression of D11 Plan 9’s business: in other words, transactions that might plausibly support the argument that D11 Plan 9 was acting as a “planning consultant” were disclosed, whilst others (more damaging to the case D12 Singh Soor was seeking to present) were omitted. It is to be inferred that the reason D12 Singh Soor was so reluctant to make full disclosure of the dealings on the Ace Consultancy Account was also because these dealings showed an absence of any segregation between D11 Plan 9’s business (such as it was) and D12 Singh Soor’s household spendings and other business (eg a rental property business). See Day 8/pp128ff, Day 9/pp14ff and Day 10/pp38ff.

[164]The Ace Consultancy Account was used in substantial part to receive and pay away monies received by D11 Plan 9 until D11 Plan 9 was able to set up its own bank account, the Plan 9 Account.

[165]For the most part, it will be unnecessary to differentiate between the Ace Consultancy Account and the Plan 9 Account. I find that D12 Singh Soor was a controlling mind behind the operation of both of these accounts. (c). Payments by the Directors out of the Claimant SPVs’ Accounts to the D11 Plan 9 accounts

[166]For the reasons given above, the payments out of C4 Highbarrow were(i) authorised and made by the Directors (generally D3 Ikram, but I consider that all the Directors would have known what was going on)

(ii) in knowing breach of their duties towards C4 Highbarrow. To the extent that there were payments out of other Claimant SPVs monies to D11 Plan 9 (as there were See, eg, Day 10/p83 and p96. ) I make the same findings. Indeed, these payments are a fortiori the C4 Highbarrow payments, because the “fig leaf” of the Dunsty Farm project did not exist. These payments were therefore not honestly made on the part of the Directors and D4 Equity RED. (d). Characterisation of the receipt of monies by D11 Plan 9 and D12 Singh Soor

[167]For the reasons that I have given, D12 Singh Soor knew that the payments out of the Claimant SPVs were done in breach of duty by the Directors. D12 Singh Soor was dishonest in this regard, and the monies were therefore received by D11 Plan 9 knowing that holding on to those monies or dealing with them was dishonest. I find that any payment by D11 Plan 9 other than one back to C4 Highbarrow (or whatever other Claimant SPV was making the payment) was dishonestly made. (e). The destinations of the monies received by D11 Plan 9: overview

[168]D12 Singh Soor was clear in his evidence that the money flows would be from C4 Highbarrow to D11 Plan 9, which D11 Plan 9 would then (according to him) use to discharge consultant invoices and other legitimate expenses. There would not be money flows going the other way, from D11 Plan 9 to C4 Highbarrow. Day 8/pp14-15. I accept this evidence as regards payments flows, which I hold to be the case whether one accepts the Claimants’ contentions or the contentions of D11 Plan 9 and D12 Singh Soor.

[169]I have described (at [105]) the spreadsheet that was put to D12 Singh Soor as to what happened to the monies paid to D11 Plan 9 out of the C4 Account and (in some cases) out of the Accounts of other Claimant SPVs. This showed, in broadbrush terms, what happened to the monies after they were received by D11 Plan 9. These payees or recipients can be classed under the following heads: i) Legitimate payees who innocently provided “cover” to enable the Directors to persuade the Fakhruddin brothers that the Dunsty Farm project was indeed progressing as had been discussed. Such payees include Ingleton Wood, Quod and those specialist consultants identified by Quod to be appointed and in fact appointed by D11 Plan 9. ii) Payments to D12 Singh Soor and those related to him. iii) Payments to the Directors. iv) Payments to Mr Kahlon.

[170]These various “destinations” are considered further below.

(f) Payments back to the Directors

[171]The Claimants Opening says this about the payments out of the D11 Plan 9 accounts: [99.2] Most of the funds transferred to the Ace Consultancy Account were immediately paid out to accounts in the control of Ikram Haq. It is not clear whether these were supposedly paid under invoices issued by ASA Property Developments Ltd or JZK Land and Property Services Ltd (both dissolved companies; ASA was controlled by Mr Haq and JZK by his son; both companies issued invoices for these payments which gave the same bank details. … [101.1] Like the ACE Consultancy account, Plan 9 held both a current and deposit account with TSB. Funds were often transferred to the deposit account as soon as they were paid to Plan 9, then back to the current account as needed. As such, it is impractical to link each outgoing payment to specific incoming payments from Cs, because unspent funds on deposit were mixed with later payments. With one exception, the only substantial payments into the Plan 9 account came from Cs. Given that the accounts were opened in 2017, Cs consider that the deposit account can therefore be ignored for any tracing purposes. [101.2] Payments were routinely made from the Plan 9 Account to the Ace Consultancy Account as drawings by Mr Singh. These drawings were mixed with the unspent balance of the earlier payments from the Cs, funds introduced by Mr Singh, and rental payments. The mixed fund was spent gradually, mainly on mortgage and routine/household payments… [101.3] For most of 2017 and 2018, the bulk of the Plan 9 payments were used to make payments to Ikram Haq, or to the ASA account (which was under his control), or else retained by Mr Singh in the Ace Consultancy Account. …In 2019, and some parts of 2018, some payments were made by Plan 9 against actual invoices issued by consultants that had been recommended by Quod Ltd and which appear to have performed real work…

[172]The detailed tracing of monies through the various accounts in play is not a matter for this Judgment, given the factual lacunae that exist. Equally, I make no finding as to the effect of transfers between deposit and current accounts.

[173]So far as payments to the Directors – specifically D3 Ikram – are concerned, my conclusion is that D12 Singh Soor and (by reason of the attribution of D12 Singh Soor’s knowledge to D11 Plan 9) D11 Plan 9 knew that these payments were improper in that(i) they were made in fraud of the payee (the Claimant SPVs),

(ii) there was no proper basis for making these payments and

(iii) the recipients had no right to receive these monies. These points are, of course, related, and I turn to them now.

[174]Because the entire Dunsty Farm project was a sham, and known to be so by(i) the Directors,

(ii) D12 Singh Soor and

(iii) D11 Plan 9, it follows that any payments caused to be made by the Claimant SPVs to D11 Plan 9 were improper extractions from the Claimants, to the knowledge of the Directors. Equally, D12 Singh Soor would have known that the services that D11 Plan 9 was rendering were non-existent.

[175]D11 Plan 9 was no more than a façade for the circulation of money. This was put to D12 Singh Soor, and he effectively admitted it – could not plausibly deny it: Day 9/pp47ff. Q (Ms Thompson) …on 24 February 2017, Mr Kahlon says at 15:27:

“Hi Hari, can you check for payment, thanks.”

You respond: “83.4k received.” Just to be clear, the Claimants’ position is that you knew that money had been received because you logged into the Ace account and saw that it had been received? Do you agree with me about that? A (D12 Singh Soor) No, I don’t agree. Q (Ms Thompson) Okay. And then on 26 February at 10:34, you say: “No invoices received yet.” What you are doing there, Mr Singh, is you are asking Bob for invoices because you need to know what to do with the money that has been transferred to the Ace Account by Highbarrow. Is that why you are asking him? A (D12 Singh Soor) I can’t…he’s… Q (Ms Thompson) So Bob is asking you to check for payment? You say 83,400 received? A (D12 Singh Soor) Yes. Q (Ms Thompson) That’s 83,400 from Highbarrow. We can look at the bank statement if you would like? But then you say two days later: “No invoices received yet.” I’m putting to you that you are asking Bob for some invoices so you know what to do with the 83,400 that has just been transferred? A (D12 Singh Soor) Yes. I think that makes sense, yes. Q (Ms Thompson) Right. And then Bob says: “I’ll have a look and I’ll chase up Ikram, thanks.” What we then see is there is an invoice which Bob seems to attach on 26 February for £3,500. He says that is the invoice for £3,500 at 16:25. We will look at that in a moment. But what he then says is: “The other invoice will be in shortly to you for £53k + VAT.” …So that’s an invoice for £53,000 plus VAT… …So you have said: “No invoices received yet.” Bob says: “I’ll have a look and chase up Ikram…” He then tells you that an invoice will be in shortly to you for £53,000. We have seen it was an invoice from JZK, payable to ASA. Mr Singh, you knew that Bob was chasing Ikram for the invoice payable to ASA, didn’t you? A (D12 Singh Soor) Well, if you go back to the invoice…you will see that the invoice that came in was this one, and as far as I was concerned, this was something issued by Imran Haq, so I didn’t – and I think I did check this company and there was no directorship of Ikram Haq on this invoice. So if you check this limited company… Q (Ms Thompson) We can do that, Mr Singh. [The witness was referred to the Companies House record for JZK Land and Property Services Ltd] Look at page 1 first to see if it is the right company. So, this is the company you say you checked, JZK Land and Property Services Ltd? A (D12 Singh Soor) This is more recent. Q (Ms Thompson) Fine. Sorry, that was a very unclear question. What I meant is you had looked this company up on Companies House, back in February 2017. Is that your evidence? A (D12 Singh Soor) At the time, I believe I did, yes. Q (Ms Thompson) Okay. If we go forward [in the document], we can see the director who was appointed on 19 January 2017 was Imran Haq and his correspondence address is 138 Upton Court Road, which is also the address which appears on Ikram’s invoices that he issues personally and the address that appears on the loan agreement you drafted for Ikram? So when you looked JZK up, Mr Singh, you knew there was a connection between JZK and Imran on the one hand and Ikram on the other, didn’t you? A (D12 Singh Soor) Not Ikram. The connection that we got here was that this was a different person, it wasn’t Ikram Haq who was running this company, and the other thing that dawned on me was that this address, 138 Upton Court Road, is probably the address for an accountant, not a home address. So that, when I collected these two things, then that’s what I realized, and the invoice that had come through at that stage was from a different person, it was run by a different person, and at that stage I didn’t have any connection with Ikram. So obviously Bob did say that he would get in touch with Ikram, but the invoices that we were receiving were not coming from Ikram. They were coming from a limited company which… Q (Ms Thompson) They were coming from a limited company controlled by a person with the same last name as Ikram and the same correspondence address, weren’t they? A (D12 Singh Soor) Yes, but… Q (Ms Thompson) So you must have realised they were coming from Ikram’s son? A (D12 Singh Soor) Well, if you look at our pleadings, we have said that you can have… Q (Ms Thompson) Mr Singh, just to get an answer to my question, you realised when Ikram Haq was sending you these invoices, that Imran Haq was a relative of Ikram, didn’t you? A (D12 Singh Soor) Not necessarily. Q (Ms Thompson) Well, that’s not an answer, Mr Singh. There are three possibilities. One is you did realise, one is you didn’t, and one is you can’t remember. Which of those probabilities is it? A (D12 Singh Soor) Haq is a very common surname and it is like Singh, you find lots of Singhs and they are not necessarily related. Similarly, Haq, in the work that I do, is a name that comes up quite a lot and you can’t, just by looking at that surname, assume that there is a relationship. Obviously, we knew that this wasn’t the same person as Ikram. That was certain. That is all I wanted to check. And at that time, I was satisfied that it wasn’t a company that was run by Ikram. That was certain. That is all I wanted to check. And at that time, I was satisfied that it wasn’t a company run by Ikram at that stage. Q (Ms Thompson) So it was important to you that JZK wasn’t a company run by Ikram? A (D12 Singh Soor) Well, no, it wasn’t paramount, it wasn’t the most important thing. Q (Ms Thompson) But it was important enough for you to check? A (D12 Singh Soor) Yes, it was important enough to check, just for my own satisfaction. But, as I said, if it was Ikram, then I would have got in touch with Bob and said: so has Ikram raised these invoices? Because there was an understanding with Bob that he would set up another entity to deal with the payments that were going to be made to him.

[176]This exchange gives a sense of the unsatisfactory and evasive nature of most of D12 Singh Soor’s evidence. If the invoices were not causing money to be paid to the Directors, then they were invoices from an entity about which D12 Singh Soor knew nothing. It is obvious from the exchanges that D12 Singh Soor had with Mr Kahlon that the invoices D11 Plan 9 was receiving were being compiled by D3 Ikram and so were routing monies out of D11 Plan 9 to a direction dictated by D3 Ikram. Given that the essential purpose of D11 Plan 9 was to pay the right people for the purposes of taking forward the Dunsty Farm project, it is obvious that D11 Plan 9 was not doing this. It is incredible that D12 Singh Soor could have believed that the invoice was not directing payment down a route laid down by D3 Ikram, and (to the extent that D12 Singh Soor actually denied this – his evidence was, as can be seen, opaque) I reject that evidence. At the end of the passage I have quoted, there is the suggestion that Mr Kahlon was being paid in this way. I will come to that in a moment.

[177]I find that the payments by D11 Plan 9 to D3’s Accounts were known by D12 Singh Soor to be for the benefit of the Directors and so inevitably improper. The Directors were using D11 Plan 9 as a paid “cut-out” to ensure that transactions that would stand-out as improper when reviewed by the Fakhruddin brothers were given a patina of legitimacy so as to be able to pass at least some scrutiny.

[178]ASA’s invoices were disclosed by Mr Singh, but not in native format. Day 9/p29. Mr Singh’s evidence was that these invoices were sent electronically, Day 9/pp29-30. but no disclosure of the emails under cover of which these invoices were sent was disclosed. Day 9/p30. It was put that they were sent by D3 Ikram, and D12 Singh Soor accepted this might be right. Day 9/p30. I find that D3 Ikram was the sender and I consider that the covering emails (which appear to have been deliberately withheld) would have made this clear. The reason the emails were not disclosed is because it would have meant that D12 Singh Soor could not have resisted (as he sought to do) the suggestion that he knew where these monies were going. As I have described, there is enough evidence to show that D12 Singh Soor knew, without the emails.

[179]There are no invoices regarding the “services” provided by Mr Kahlon. See Day 10/p30. It was D12 Singh Soor’s evidence that Mr Kahlon was paid via ASA. D12 Singh Soor’s evidence on this point was again unsatisfactory: Day 9/pp55ff. Q (Ms Thompson) Mr Singh, I’m putting to you that the reason you haven’t disclosed this email or message from Ikram is because if you did disclose it, that would cut across your pleaded position which is that you didn’t know that ASA and Ikram were connected. A (D12 Singh Soor) No, that’s not true. The true position is that at the beginning I didn’t know. Two, I didn’t really care, because as far as I was concerned, the payments were going to Bob and the vehicle that they use was not relevant. So there’s those three issues right from the beginning and obviously you are fascinated by that aspect: I wasn’t. Q (Ms Thompson) Okay. Mr Singh, you said earlier – I think it was in response to a question from his Lordship – that you weren’t privy to the arrangement between ASA and Bob, so you didn’t know exactly how much ASA was paying Bob. Do you recall saying that? A (D12 Singh Soor) Yes. Q (Ms Thompson) Okay. So Bob has an arrangement with ASA. You knew that. So you knew from the outset , you knew from January 2017, that Bob had an arrangement with ASA by which ASA would pay Bob? A (D12 Singh Soor) That’s correct, yes. Q (Ms Thompson) Okay. Who at ASA do you think Bob had that arrangement with? A (D12 Singh Soor) It didn’t matter to me. It didn’t matter. Q (Ms Thompson) You knew it was an arrangement with Ikram? A (D12 Singh Soor) No, I didn’t know. To tell you the truth, it didn’t matter to me. As far as the funds were going to Bob or any other legitimate party to this project, then it didn’t matter which vehicle was used. Q (Judge) But who could it have been? A (D12 Singh Soor) Sorry? Q (Judge) Who could it have been? A (D12 Singh Soor) Well, I thought that Bob would set something up with Ikram and perhaps another legal limited company. But really I didn’t want to get involved with that because obviously my aim was I was not going to pay payments through Plan 9 which were subject to PAYE, that was my main concern, your Lordship. Q (Ms Thompson) Mr Singh, you just said you thought Bob would set something up with Ikram and that was how Bob would get paid. Is that something you thought in January 2017? A (D12 Singh Soor) All the time. Q (Ms Thompson) All the time, okay. So then you did know right from the outset that ASA was connected with Ikram because you thought Bob was setting up something with Ikram and that is how Bob would be paid? A (D12 Singh Soor) I think you are just putting words in my mouth. That is not what I said. I said that as far as I was concerned payments were going to go to Bob. What vehicle he set up with whom was not my concern. What I wanted to happen was that we would get an invoice from a legal entity which we could process through Plan 9 without being subject to PAYE legislation. That was my concern. Q (Ms Thompson) I think your evidence earlier was you didn’t know how much of the money going to ASA was going to Bob? So you knew that some of the ASA money wasn’t going to Bob? Is that right? A (D12 Singh Soor) Well, I would rely on Bob to tell me if any of the funds were going anywhere else, but I would assume that most of the funds went to Bob. Q (Ms Thompson) But you didn’t know? A (D12 Singh Soor) I didn’t know categorically, no. Q (Ms Thompson) So you didn’t… A (D12 Singh Soor) But in my calculations, I would put Bob against those funds. Q (Ms Thompson) So you didn’t know, Mr Singh, that all of the funds were being spent on people who were involved in the project and doing work on the planning application, did you? A (D12 Singh Soor) No. I did know that, because obviously I was only – I only agreed to this arrangement to make sure that the payments that were supposed to go to Bob which are in the budget would be processed through this entity. Q (Ms Thompson) Mr Singh, you knew – from January 2017 onwards, you knew that you were making payments to a bank account that Ikram controlled and that Ikram could then use those funds however he liked: payments out, pay Bob, it doesn’t matter? Do you agree? A (D12 Singh Soor) No, I don’t agree. Obviously, we were running the budget and if the payments went outside the budget, then we would not be making any more payments to that entity.

[180]In his eagerness to demonstrate that these payments were not to D3 Ikram (obviously improper, for the reasons given) but as remuneration for Mr Kahlon for his (non-existent) work on the Dunsty Farm project, D12 Singh Soor lost sight of the ostensible (but fictional) purpose of D11 Plan 9, which was to make sure that only proper payments were made by D11 Plan 9, proper payments being to persons working towards getting planning permission for Dunsty Farm. It is quite clear from these exchanges, that D12 Singh Soor was saying that he did not care where C4 Highbarrow’s monies ended up. There was, on his own evidence, absolutely no supervision by D11 Plan 9 of payees of the monies entrusted to D11 Plan 9. On his own evidence, D12 Singh Soor was reckless. But I reject that evidence: I do not consider D12 Singh Soor to have been reckless at all. He was being dishonest: the suggestion that Mr Kahlon was paid indirectly had no documentary support, and I consider that D12 Singh Soor knew that the payee was D3 Ikram.

[181]If and to the extent that payments were in fact passed on by D3 Ikram to Mr Kahlon, those payments were themselves dishonestly made, because of D3 Ikram’s knowledge. Whether those payments (if they were made) were dishonestly received by Mr Kahlon is a question that I cannot and do not answer.

(g) Payments to/receipts by legitimate operators

[182]Although D11 Plan 9 and D12 Singh Soor made these payments dishonestly, their receipt by legitimate participants in the Dunsty Farm project clearly cannot have been dishonest. Although they are not Defendants, it seems to me appropriate that I make clear that Ingleton Wood and Quod received the payment that they did bona fide and that they provided value for those payments. There can be no question of tracing monies into their hands.

[183]I regret that it is difficult to make similar findings regarding other specialist contractors retained by C4 Highbarrow simply because these points were not sufficiently traversed in the evidence.

[184]There were some direct payments by D11 Plan 9 to Mr Kahlon. I have already mentioned the £45,000 payment that was made to him. See [159]. There were other payments also, in relation to a car and “Dart” crossing charges. The transactions regarding the car were explored on Day 10/pp10ff. Mr Kahlon may also have received money indirectly: I have already considered this. Here, however, I am considering direct payments from D11 Plan 9 to Mr Kahlon. So far as such direct payments are concerned, it would be inappropriate to make any findings, because Mr Kahlon was not before the court.

(h) Money paid to the benefit of D12 Singh Soor

[185]Some of the monies received by D11 Plan 9 were used to fund things which had nothing to do with Dunsty Farm. Thus: i) Payments were made to D12 Singh Soor’s son, Mr Gurjit Soor. D12 Singh Soor was unclear as to whether Mr Gurjit Soor was(i) being paid out of D11 Plan 9’s profits or

(ii) because he had done work on the Dunsty Farm project: Day 10/pp31ff. Q (Ms Thompson) …there is a payment to Mr G Soor. I think you agreed with me on Friday that Mr G Soor is your son, Gurjit? A (D12 Singh Soor) That’s correct, yes. Q (Ms Thompson) Thank you. So there is a payment of £4,000 to him. As of 6 March 2017, Mr Gurjit Singh had not performed any services for Highbarrow, had he? A (D12 Singh Soor) Well, that can’t be absolutely correct, because he did do some project management, critical path analysis for us. So that is not quite correct. Q (Ms Thompson) Right. So did he issue an invoice for £4,000 for critical path analysis? A (D12 Singh Soor) No, he didn’t. There is no invoicing for my son… Q (Ms Thompson) The reason… A (D12 Singh Soor) …If you let me finish, please. We used to charge – in the invoice we put to Highbarrow Holdings, his amounts were included in that invoice, just like the Plan 9 amounts were included in that invoice. Q (Ms Thompson) Mr Singh, the reason there is absolutely zero evidence in your disclosure of Gurjit Singh doing any critical path analysis is because he didn’t. You were just using Highbarrow’s money to make payments out of the Ace account to your family members, weren’t you? A (D12 Singh Soor) No, that’s not correct. … Q (Judge) Sorry to interrupt, but how was Mr Soor retained? A (D12 Singh Soor) Just by verbal agreement. Q (Judge) I appreciate that, but was it as an employee? A (D12 Singh Soor) No, he was a consultant. Q (Judge) Consultant. Those PAYE problems… A (D12 Singh Soor) No, your Lordship. Obviously we, Plan 9, got payment from Highbarrow Holdings and he was covered in the same invoices we issued to Highbarrow Holdings. Q (Judge) Yes, I am more interested in the basis on which Plan 9 paid him, not how Plan 9 charged for him? A (D12 Singh Soor) Yes. Q (Judge) So, on what basis was he retained? As a consultant, you say? A (D12 Singh Soor) Your Lordship, the - obviously, we retained 10% of… Q (Judge) Again, I’m not interested in what you retained. I’m interested in the basis on which you retained Mr Soor to provide services to Plan 9? A (Mr Singh Soor) Yes, erm… Q (Judge) There is no documentation, as I understand it? A (Mr Singh Soor) No, there is no documentation. But in the accounts we would have certain fixed costs, you know, professional services, so much, and rent and rates, and so on, so it was covered in that respect. It was covered as a fixed cost of services provided to the company. So, a lot of, for example, the payment made to Ace was covered in the fixed cost of rent and rates electricity bills and so on, and there wasn’t an invoice raised because when you do accounts, certain amounts are allowed, about 10% is allowed for your fixed costs and we covered that under that heading. Q (Judge) I understand that. But you would have received, for example, a bill from the electricity company which would say to Plan 9: you owe us X amount for the electricity and you would then have apportioned a portion of that into your invoicing to who paid Plan 9’s invoices. My question is where does the obligation to pay Mr Soor the amount of money we have here, £2,500, where does that obligation arise? A (D12 Singh Soor) Your Lordship, we didn’t have electricity bills as such and we didn’t have other fixed costs as such. It was agreed that we would pay £2,500 to Ace every month for the fixed facilities that we were getting for the company, which included the things that I have mentioned? Q (Judge) Including Mr Soor? A (D12 Singh Soor) He was on top of that. Q (Judge) Right, so on what basis was his entitlement to charge operating? A (D12 Singh Soor) Well, your Lordship, we had a certain flexibility. We charged Highbarrow Holdings 10% of all the invoices, If he felt there was work to be done on a certain part of the project and my son needed to be paid, he would be paid from that money or other monies, but there wasn’t an invoice that he would put to us, because as far as we are concerned he was covered in the funding that – in the invoicing that we were putting to Highbarrow Holdings. We didn’t have invoices for all the expenditure that we carried out and some of it was covered in the 10%, like the £2,500 that we gave to Ace was covered in that, and some of the other payments were covered within the 10%, because we had another £2,500 each month, and some were covered – where additional work had to be done, it was covered in a similar fashion. So there wasn’t an invoice for the 10% we charged every month and this expense came in a similar category, so we didn’t have an invoice from my son. To the extent that any meaning can be derived from these answers, it would appear to have been D12 Singh Soor’s evidence that although his son did work on the project, it was work that was not charged to C4 Highbarrow because it was a cost to D11 Plan 9, which D11 Plan 9 paid out of its remuneration under the Project Management Agreement. The payments to D12 Singh Soor’s son were dishonestly made by D11 Plan 9 and D12 Singh Soor. Whether they were dishonestly received by Mr Soor Junior is a matter I can say nothing about. ii) Payments were made to D12 Singh Soor’s daughter, who did no work on the Dunsty Farm project: Day 10/pp35-36. Q (Ms Thompson) So, then, the payment to your daughter of £1,000, she hadn’t done any work on Dunsty, had she. A (D12 Singh Soor) No, no. Q (Ms Thompson) Right, so this is just you using Highbarrow’s money to give your daughter some money? A (D12 Singh Soor) As I said previously, we had a 10% income on the project. How we spent it was up to us. This was one of many similar payments: Day 10/pp36ff. Q (Ms Thompson) [Referring to the Ace bank statements.] And then, in the left-hand-column, at the bottom, we can see some more of what I think you told us were mortgage payments, but you didn’t know whose properties they were, apparently…then over the page, we can see £600 on 3 April. That is a payment to your daughter, isn’t it, Ms G Soor? A (D12 Singh Soor) Yes. Q (Ms Thompson) And just above that, the Mortgage Express, that has as the reference “Soor”, so that mortgage payment must have been a payment that you or your wife or your daughter – must have been a payment in respect of a mortgage that you or your wife or your daughter have? Is that right? A (D12 Singh Soor) Not necessarily, no. Q (Ms Thompson) Why on earth would someone put the payment reference “Soor” on a mortgage payment if it is not a “Soor” who owns the property? It is a very odd thing to do? A (D12 Singh Soor) I have no idea. I have no idea. … Q (Ms Thompson) [Referring to a payment of £10,000 to Mrs Singh.] So, as at 3 April 2017, your wife hadn’t done £10,000 worth of work on Dunsty, had she? A (D12 Singh Soor) Yes, but obviously Plan 9 had and in my skeleton I have actually broken down all the payments to Ace and most of the payments that are made out to parties associated with me are covered in the 10% that was charged to Highbarrow Holdings. So we are now three or four months in and Plan 9 would have been receiving 10%, £5,000 minimum plus VAT, so £6,000, for three or four months. So that would equate to probably £24,000, if you are going in to April. And it started from November, so in fact the six months. So we are looking at six times £6,000, which is £36,000. So £36,000 y April was due to Plan 9, so some of these payments were made out of funds that we due to Plan 9 from Highbarrow Holdings. Again, the payments were made dishonestly, but I can say nothing as to whether they were dishonestly received.

[186]These are just examples. There were payments in respect of solar panels for family and friends Day 10/pp115ff. and payments for work done on D12 Singh Soor’s personal property. Day 10/pp131ff. My conclusions are the same:(i) the payments were made dishonestly,

(ii) but nothing more can be said about the position of the recipient. (18). Conclusions

[187]It is necessary to consider separately the positions of:(i) the Directors and D4 Equity RED as payers of monies out of the accounts of the Claimant SPVs to D11 Plan 9;

(ii) the recipient of those payments, D11 Plan 9; and

(iii) the onward payments by D11 Plan 9 to others.

[188]So far as the Directors and D4 Equity RED are concerned, the Dunsty Farm scheme was a cash-extraction scheme, the cash being extracted from the Fakhruddin brothers via C6 Hmaf, the Claimant SPVs, D11 Plan 9 back to the Directors, with various “leakages” on the way, notably payments to D12 Singh Soor, Mr Kahlon and third party contractors, legitimate or otherwise. The Directors and D4 Equity RED knew this and were (given that subjective knowledge) dishonest.

[189]D11 Plan 9 (to whom D12 Singh Soor’s knowledge is attributable) was not involved in the acquisition of Dunsty Farm nor in the early meetings with Ingleton Wood, from which it would have been apparent that the Dunsty Farm project was a non-starter. Nevertheless, from the beginning of its involvement, D11 Plan 9 would have appreciated – just as the Directors did – that the Dunsty Farm project was a cash-extraction scheme. This was because D11 Plan 9 had no planning consultancy experience, was knowingly piggy-backing on the work of others (notably Ingleton Wood and Quod), doing no substantive work itself whilst charging for services not done. D12 Singh Soor knew this also. There is a question – which I cannot resolve – as to what difference the receipt of monies by D11 Plan 9 into the Ace Consultancy Account makes. That is one of several matters which will require further consideration.

[190]In terms of onward payees of monies received by D11 Plan 9, these “downstream” recipients fall into two broad classes: Defendants and non-defendants. As regards the Defendants, for the reasons already given, they will have received these monies from D11 Plan 9 knowing that they had been obtained and paid on in breach of trust and fiduciary duty. They were dishonestly received.

[191]So far as non-defendants are concerned, as regards some (Ingleton Wood and Quod) it is possible to say that they received the monies they did honestly and giving value. It seems to me that notwithstanding their status as non-defendants, a finding to this effect is appropriate. As regards other non-defendants – Mr Kahlon, Mrs Singh, other consultants – I can make no findings at all, and do not do so. In the first place, it would be entirely inappropriate to make adverse findings against non-defendants. In the second place, I do not have sufficient material to make findings either way. The fact that I do not feel able to make the same findings as in relation to Ingleton Wood and Quod should not be read as an adverse finding, but simply as a reflection of the fact that the incomplete evidence I have seen renders it impossible to give a clean bill of health. H. THE VERDI CLAIMS (1). Relations between the parties

[192]Verdi was owned 25% by Jason Verdi, 25% by D3 Ikram, 25% by D2 Babar and 25% by D13 Avnish. Day 11/pp41-42. So far as payments by Verdi to others were concerned, these were authorised by D13 Avnish. Day 11/p45. All of the payments made by Verdi to which reference will be made in this Judgment were made by D13 Avnish. Day 11/p 13.

[193]D13 Avnish and D2 Babar were close friends, having met at college in 1985. Day 11/p48. They regularly spoke and met. Day 11/p48. Although D13 Avnish and D1 Ashank were technically neighbours (their rear gardens abutted), they hardly ever spoke, including in regard to the transfers of money. Day 11/p49. D13 Avnish’s conversations about money transfers tended to be either with D2 Babar or Mr Gill.

[194]Verdi and D4 Equity RED were set up at around the same time, in 2014. Day 2/p124.

[195]Verdi had contractual relations with only two of the Claimants, C2 Hindhead and C3 Leo. In each case, the effective counterparty (given that these were Claimant SPVs) was D4 Equity RED or, more particularly, the directors of D4 Equity RED. By “effective counterparty”, I mean that it was the Directors who called the shots, the Claimant SPV simply being a vehicle for keeping one project separate from the other projects being run by D4 Equity RED.

[196]There was a much broader relationship between Verdi and D4 Equity RED. In addition to these contractual relations, Verdi almost exclusively worked for D4 Equity RED on other projects which were not funded by the Fakhruddin brothers. Day 11/pp42ff, esp 44-45. (2). The SPV structure and the position of the Directors and D4 Equity RED

[197]The SPV structure used by D4 Equity RED has been described and mentioned frequently throughout this Judgment. It is a well-known and straightforward means of ensuring that the distinct interests in distinct projects are respected. There is no question that the Directors were guilty of many breaches of fiduciary duty in terms of the way they handled payments out of the different Claimant SPVs. D13 Avnish did not seek to dispute this. It was D13 Avnish’s case that he and Verdi were innocent of the wrongdoings of the Directors, and his case was that whatever the state of mind of the Directors his defence should succeed. This does not absolve me from considering the substantive case against the Directors. Although it may very well be that D13 Avnish can succeed in his defence even if the Directors were dishonestly misappropriating monies from the Fakhruddin brothers, the converse does not hold good: if the Directors were wholly innocent of any wrongdoing, then D13 Avnish’s defence is far stronger. The fact that D13 Avnish did not take this stance does not absolve me from considering it, not least because the Directors did not attend the trial, for reasons that I have explained. D13 Avnish thus had no opportunity to cross-examine some potentially key witnesses. (3). Payments to Verdi

[198]The payments made to Verdi are set out in Annex 2 to this Judgment. This schedule sets out the date of each payment, the amount and the source of the payment to Verdi. Where this is known, the immediately preceding balance on the Verdi Account is stated. It is helpful to know that generally speaking the intermediate balances are sufficiently low that when Verdi was making payments out, it was using monies coming from the Claimant SPVs. If a tracing exercise is called for, far more detail will be required. I have given each payment a reference, “IN:1” to “IN:32”, “IN” because these were payments inward to Verdi.

[199]I do not find – unlike with the case of Dunsty Farm – that the projects of C2 Hindhead and C3 Leo were shams from the very beginning. Indeed, the Old Post Office appears to have been completed and the other projects (Innovation Court and Copenhagen Court) were acquired and worked on, although (as I have noted) these projects were substantially uncompleted and (as I will come to consider) significant amounts of money were diverted away from these projects (which is no doubt why they were uncompleted). But it cannot straightforwardly be said that every payment from the Claimant SPVs was devoid of value to the Fakhruddin brothers. (4). D13 Avnish’s knowledge of D4 Equity RED’s business approach and of the Claimant SPVs

[200]The question of D13 Avnish’s understanding of what was going on is the key issue that will be resolved in the course of this Section of this Judgment. Important to the resolution of the point is the extent to which D13 Avnish knew of D4 Equity RED’s business practices generally.

[201]As regards the non-Fakhruddin brothers’ projects, D13 Avnish knew that the D4 Equity RED SPVs were substantially financed by a senior lender (typically a bank), with the remainder coming from investors, Day 11/p43. although D13 Avnish suggested that D1 Ashank, D2 Babar and/or D3 Ikram might themselves also have invested, which I am prepared to accept as possible (and I accept that D13 Avnish believed this). Day 11/p43. There would be a contract between Verdi and the Non-Claimant SPVs and Verdi would be paid by way of interim payments in arrears, such applications for payment being supported by a valuation. Day 11/p43. I find that D13 Avnish would have expected the D4 Equity RED projects to have been run as in the ordinary course, with work being done by Verdi being paid for in arrears by way of interim payments.

[202]As regards the Fakhruddin brothers’ projects, D13 Avnish was aware that payments out of the relevant Claimant SPV were made with the authorisation of D1 Ashank. Day 11/p45. D13 Avnish knew that the ultimate investors were from abroad, Day 11/p46. and that they operated through C6 Hmaf. Day 11/p46. Although his recollection was less clear, D13 Avnish believed that he knew the name of the Fakhruddin brothers before work started on the Old Post Office. Day 11/p47.

[203]In November 2017, D13 Avnish (with the Directors) visited the home of the Fakhruddin brothers in Dubai: Day 11/pp47-48. Q (Ms Thompson) …And in November 2017, you met the Fakhruddins when you visited their home in Dubai? A (D13 Avnish) That’s right. Q (Ms Thompson) And by that stage, November 2017, at the meeting, you knew they were the investors behind the Innovation Court and the Copenhagen Court properties, didn’t you? A (D13 Avnish) That’s right.

[204]It was D13 Avnish’s evidence that he was essentially a non-participating bystander during the course of this visit. I do not accept this evidence – although I am not prepared to say that D13 Avnish was lying on this point. I prefer the evidence of Yousuf as inherently more plausible: Yousuf W/S 3/[73]. I am not sure when I first met Avnish Patel, the director of Verdi, but I think it was when he came to our home in Dubai with Babar. There was a long conversation, and they were saying that we needed to use Verdi for the Basingstoke sites. They said he would give us a better rate than others by 10%, he’s the best for us, etc. There may also have been conversations alone with Babar on the side, but Avnish was there and he was making the case for himself.

[205]It is not plausible that D13 Avnish would have made the trip to Dubai and visited the Fakhruddin brothers’ home without any participation on his part; and since I consider that D13 Avnish would have participated in the visit, it is likely that he would have joined D2 Babar in promoting Verdi as a company to be entrusted with the Innovation Court and Copenhagen Court projects. The timing of the visit is significant: Verdi had already been awarded the contract in relation to the (smaller) Old Post Office project (contract concluded 5 December 2016), but letters of intent in relation to Innovation Court and Copenhagen Court were only concluded subsequently in January 2018, which makes it likely that one of the purposes of the visit was to ensure that the Fakhruddin brothers were happy with Verdi being appointed as the builder in relation to these two, bigger, projects. On this point, they would have wanted to see and hear from D13 Avnish.

[206]D2 Babar tended to keep D13 Avnish “in the loop” so far as D4 Equity RED’s future projects were concerned, including Fakhruddin brothers’ projects. Day 11/p50, pp52-53.

[207]D13 Avnish was aware that the Fakhruddin brothers did not use bank funding to finance the Claimant SPVs. They were self-funded, with no third party financing, because of their religious beliefs. Day 11/p46.

[208]Each SPV (whether Claimant or Non-Claimant) operated with a different bank account, and D13 Avnish knew this. Day 11/p160. This was, it is to be inferred, because there were different investors behind each SPV, as D13 Avnish knew. Day 11/p161.

[209]Thus, to recap, D13 Avnish understood that there were five Fakhruddin brothers’ SPVs, in which the Fakhruddin brothers were investors. Day 11/pp42-43, 47. Verdi did work for two of these five. He knew that D1 Ashank was the Director who authorised payments out of the SPV accounts. Day 11/p45. He knew, in early 2017, that(i) the Fakhruddin brothers came from abroad,

(ii) their holding company was C6 Hmaf and

(iii) that there was no bank funding because of their religious beliefs. Day 11/pp45-46. D13 Avnish visited the Fakhruddin brothers in Dubai in November 2017. Day 11/p47. By that time, he knew “they were the investors behind the Innovation Court and Copenhagen Court properties”. Day 11/p48.

[210]He knew that there were Non-Claimant SPVs and that Verdi did work for some of these. Day 11/p43. These companies were funded in the following way: Day 11/p43. Q (Ms Thompson) In 2017, you knew that for non-Fakhruddin SPVs most of the financing was obtained through a senior lender, typically a bank, with the remainder coming from investors. Is that right? A (D13 Avnish) Yes, pretty much, yes. Q (Ms Thompson) Okay, and those would be external investors, not Ashank, Ikram and Babar? A (D13 Avnish) I wouldn’t know 100% that they would be external investors, they could be a mixture of both. Q (Ms Thompson) Okay, for each of those contracts with the non-Fakhruddin SPVs, where there was a bank involved, to obtain an interim payment under that contract, Verdi would need to make an interim application supported by a valuation. Is that correct? A (D13 Avnish) That’s correct? Q (Ms Thompson) And the valuation would be of work done in arrears, it would be a valuation of work already done? Is that right? A (D13 Avnish) That’s right. (5). Contractual relations between Verdi and the Claimants

[211]Verdi was involved in two of the Fakhruddin brothers’ projects, C2 Hindhead (ie Innovation Court and the Old Post Office) and C3 Leo (ie Copenhagen Court). There were no contracts between Verdi and the other Claimant SPVs.

[212]A letter of intent was issued in regard to the Innovation Court and the Old Post Office projects on 12 September 2016. A letter from D4 Equity RED stated: It is our intention to award the contract for the construction of Innovation Court & The Old Post Office at New Street, Basingstoke, RG21 7DN to Verdi Construction Ltd. In addition, we wish to have you start work prior to the finalisation of contract documents and final project pricing…

[213]Verdi was obliged not to undertake work or commitments exceeding £175,000 plus VAT, and any payments made were to be treated as “payments against obligations under the main JCT Design and Build contract once this comes into force”. The letter of intent was described as “an interim agreement between Verdi Construction Ltd and Equity Real Estate (Hindhead) Ltd until such time as the ongoing negotiations have concluded with either a formal JCT Design & Build contract being executed or an agreement that the parties will discontinue working together on the project…”.

[214]Separate contracts were entered into in relation to the Old Post Office project and the Innovation Court project. The contract in relation to the Old Post Office (the Old Post Office Contract) describes the employer as C2 Hindhead and the contractor as Verdi. It is dated 5 December 2016.

[215]After the conclusion of the Old Post Office Contract, there was a further letter of intent regarding Innovation Court. The employer’s (C2 Hindhead’s) maximum liability was stated as £202,567.40 and again was done in contemplation of the agreement of a JCT Design and Build Contract 2011 edition. This letter was dated 19 January 2018.

[216]A letter of intent concerning Copenhagen House was concluded between Verdi and C3 Leo, also on 19 January 2018. There then followed two further contracts, one dated 17 April 2018 between C2 Hindhead and Verdi concerning Innovation Court (the Innovation Court Contract), and the other dated 26 April 2018 concerning Copenhagen Court between Verdi and C3 Leo (the Copenhagen Court Contract). I shall use the term Verdi Building Contracts to describe collectively the Innovation Court Contract and the Copenhagen Court Contract. (6). Breach of duty by the Directors: failure to disclose their interest in Verdi

[217]The Claimants said that the appointment of Verdi by D4 Equity RED was in breach of the ADMAs concluded in relation to Innovation Court, the Old Post Office and Copenhagen Court, because of the relationship between the Directors of Equity RED and Verdi, in which two of the Directors were financially implicated. The Claimants contended that Verdi was an associate of D4 Equity RED under the ADMAs because they were “connected companies” and that by virtue of the terms of the ADMAs D4 Equity RED could not commit the Claimant SPV to contract with an associate without the prior written approval of the relevant SPV (which was never sought). PoC/[144]. I find that there was a breach of contract committed by D4 Equity RED, but (more seriously and more significantly) that the Directors committed a clear breach of fiduciary duty in failing to disclose their interest in Verdi to the Fakhruddin brothers. This breach cannot have been unknowingly committed, particularly given the November 2017 meeting in Dubai that I have described. There was a close relationship between D4 Equity RED and Verdi, which was not disclosed to the Claimants, and it should have been. (7). The claims against D13 Avnish

[218]The Claimants asserted that there was a formal mechanism for calculating and making payments under the Verdi Building Contracts. The Claimants contended that these processes or procedures were not followed while the Directors were directors of the Claimant SPVs in respect of the payments specified in the pleading and set out in Annex 2 to this Judgment.

[219]The payments listed in Annex 2 fall broadly into the following categories: i) Payments that were made by C2 Hindhead and C3 Leo to Verdi which (so the Claimants contended) were not proper payments pursuant to the contracts agreed. PoC/[149]. These were IN:1-2, 4-8, 11-12, 18-32. ii) Payments that were made by C1 Bracknell, C4 Highbarrow and C5 Rushworth without any “contractual cover”. PoC/[150]. These were IN:3, IN:10, IN:13 and IN:14. iii) Payments by D11 Plan 9 again without any “contractual cover”. PoC/[152]. These are IN:15, IN:16 and IN:17. I should say that I am adopting this classification to help with the exposition. In terms of the Directors’ responsibilities regarding payments out of the Claimant SPVs, the means by which such payments were made is very much secondary to the purpose of those payment, and whether they were in the interests of the Claimants.

[220]The lawfulness of these payments needs to be considered from three different aspects:(i) the Directors (as payors in their capacities as directors of the Claimant SPVs causing those payments to be made),

(ii) D11 Plan 9 (as payor) and

(iii) Verdi (as payee/recipient). The fact that payment eg by a Director might be unlawful does not necessarily mean to say that there was an unlawful receipt. Take, for instance, the payments by Claimant SPVs where there were no contractual relations to act as cover for the payments. It is very difficult to resist the conclusion that the Directors were acting in breach of duty in making such payments, since this ran flatly against their own “siloed” SPV structure. But it does not follow that these payments would have been known to be unlawful by Verdi or D13 Avnish. In the case of payments where there is contractual cover, it may be that both the Directors and recipient have a defence but it certainly does not follow that if the Directors do not have a defence – which I find to be the case – that the recipient must also “go down”. (8). Notional contractual entitlement

[221]I have described Verdi’s defence to the claims in [14(iii)] above. Under the contracts concluded by Verdi and the Claimant SPVs, Verdi’s maximum contractual entitlement (subject of course to any variation) was £6,232,048.36, comprising £550,143.60 under the Old Post Office Contract, £2,877,847.62 under the Innovation Court Contract and £2,804,057.14 under the Copenhagen Court Contract.

[222]The payments to Verdi were less than this contractual ceiling: they total £5,738,060, comprising £5,228,060 by C2 Hindhead and C3 Leo, PoC/[149]. £411,000 by other Claimant SPVs PoC/[150]. and £99,000 by D11 Plan 9. PoC/[151].

[223]Assuming the payments to Verdi were in accordance with the various contracts, a question I will be coming to, it was D13 Avnish’s case(i) that Verdi received only monies that it was contractually entitled to and

(ii) that Verdi was entitled to pay away those monies as it was advised. There was no obligation to spend these monies on the Innovation Court or Copenhagen Court projects.

[224]It was Mr Emin’s conclusion that these projects were substantially incomplete. Mr Emin was asked to assess the value of the work done by reference to the payment terms in the Verdi Building Contracts, on the assumption (contested by D13 Avnish) that these contracts operated as the Claimants contended.

[225]Under the contracts that Verdi entered into, there were in principle two contractually stipulated modes of interim payment, periodic payments (Alternative B) or stage payments made only when a stage is complete (Alternative A). See Emin Rep 1/[100]. More specifically: i) Alternativea. A. Clause 4.12 of the Verdi Building Contracts provides that the Gross Valuation for each Interim Payment shall be (stripping out immaterial terms) the total of the cumulative value of stages completed. Value is not a term specifically defined, but it is quite clear from clause 5 that it is an objectively measurable thing. ii) Alternative

b. B. Clause 4.13 of the Verdi Building Contracts provides that the Gross Valuation for each Interim Payment shall be (again, stripping out immaterial terms) the total value of work properly executed (including any design work).

[226]Mr Emin helpfully summarised the difference between these alternatives at Emin Rep 1/[72]: In simple terms, and based on my experience in applying these alternative valuation methodologies, the basic difference between “Alternative A” (clause 4.12) and “Alternative B” (clause 4.13) is that under Alternative A the Contractor is only paid for a “stage” of work that is “completed” as stated at clause 4.12.1.1 (ie 100% completed), whereas under Alternative B the Contractor is paid for the value of “work properly executed including any design work…” (whether completed or not, ie the actual percentage completion certified), as stated at clause 4.13.1.1 which also includes “Site Materials” as stated at clause 4.13.1.3, whereas the Contractor does not have entitlement to payment of any Site Materials under Alternative A.

[227]Obviously, Alternative B will generally result in a higher interim payment. Of course, a great deal turns on how “stages” (a term undefined in the contracts) are understood.

[228]Mr Emin assessed the works as “substantially incomplete” for both Innovation Court (Emin Rep 1/[87]) and Copenhagen Court (Emin Rep 1/[97]). His assessment of what was payable on an interim basis was: Alternative A Alternative B Innovation Court £84,995 (Emin Rep 1/[102]) £488,346 (Emin Rep 1/[101]) Copenhagen Court £78,287 (Emin Rep 1/[106]) £301,193 (Emin Rep 1/[105])

[229]I appreciate that this was a difficult exercise, given that Mr Emin was unable to visit the sites and was dependent on documents (chiefly photographs) provided to him by others. Accepting that the basis for Verdi’s payment under the agreements is controversial, and to be determined, Mr Emin’s assessment is nevertheless highly relevant to an understanding of what was going on – or not going on – at the sites. Recognising both the contractual uncertainty and the difficulty inherent in Mr Emin’s assessment, it is nevertheless obvious – on this basis, that the difference between value provided by Verdi (£789,539 – taking the higher Alternative B values) and payments received by Verdi (£5,738,060) is sufficiently stark to require careful consideration.

[230]D13 Avnish’s first witness statement disputed Mr Emin’s conclusions. Mr Emin was cross-examined, and I accept his evidence as to the state of the shortfall in work done compared to contractual entitlement. I reject the evidence of D13 Avnish that “all was well” at the sites. Indeed, when he came to be cross-examined, D13 Avnish’s disagreement with Mr Emin seemed marginal: Day 13/pp71ff. Q (Ms Thompson) I’m interested, in broad terms, to hear what the scope of the disagreement is. A (D13 Avnish) I think just probably in amount, because I think Mr Emin did it off photographs… Q (Ms Thompson) Right. A (D13 Avnish) …which were at set dates. We weren’t given the opportunity to do a valuation when we were terminated off-site. I think we were terminated around February-ish or something like that in 2019. Q (Ms Thompson) 2019. A (D13 Avnish) Yes. Q (Ms Thompson) So I think, just to be clear, your evidence is work on site ceased in November 2018. A (D13 Avnish) Around, yeah, that’s right. Q (Ms Thompson) But you kept a security presence until February 2019? A (D13 Avnish) Until we were told not to do that. Q (Ms Thompson) And by you, you mean Verdi? A (D13 Avnish) Yeah, yeah, that’s fair. Q (Ms Thompson) So let me put it at a higher level of generality, then. Mr Emin’s assessment is that 16% of the work on Innovation Court, 16% of the jobs on Innovation Court, were complete as at the time Verdi stopped work? A (D13 Avnish) Yes. Q (Ms Thompson) You must know in very rough terms: what percentage of the building do you say was complete when Verdi walked off-site? A (D13 Avnish) I would say, as a rough percentage, probably about – anything between 20% to 30%.

[231]Given the monies received by Verdi, the difference between 16% and even 30% (the high end of D13 Avnish’s range) is not material. The point may be expressed in a different way, namely the extent to which Verdi had received the maximum contractual entitlement under the Verdi Building Contracts. This was 92%, ie £5,738,060 of a possible £6,232,048.36 had been paid to Verdi.

[232]I should not forget that I have included in the sums received payments in relation to the Old Post Office, for which Mr Emin did not provide a value, which means that the work done by Verdi is to this extent understated. However, Verdi’s contractual entitlement under the Old Post Office Contract was £550,143.60. Taking the Old Post Office out of account, still results in a significant mismatch between performance and payment under the Verdi Building Contracts. (9). D13 Avnish’s defence

[233]The pleading at PoC/[154]ff shows over-optimistic reports of progress being made by the Directors to the Fakhruddin brothers. I consider these statements to have been dishonest, in that the Directors knew them to false, but such findings cannot further the case advanced against D13 Avnish, for these is no evidence that he was party to such communications or knew that they were being made.

[234]The Claimants’ claim against D13 Avnish was that Verdi had received sums to which it was not contractually entitled and which were being paid away in breach of duty; that D13 Avnish knew both of the absence of contractual entitlement and the breach of duty of the Directors and, even so, caused the monies received by Verdi not to be spent on the projects, but caused them to circulate elsewhere, either to the Directors or to be used by himself.

[235]D13 Avnish’s defence has been set out at [14(iii)] above. As has been described, it was D13 Avnish’s case that: i) The payments received by Verdi were contractually due to Verdi under the Verdi Building Contracts for Verdi to spend as it wished. ii) D13 Avnish believed that this was what the Verdi Building Contracts said, and acted on the honest basis that these monies were Verdi’s and that it was perfectly proper to circulate monies in the way he did, given that belief.

[236]Thus, the Old Post Office was completed. D13 Avnish W/S 1/[28] Innovation Court would have been completed had Verdi not been terminated and that the payments received by Verdi were proper: D13 Avnish W/S 1/[35]. I find it difficult to understand why the [Claimants] assert that the payment arrangement was not as agreed, given that they are experienced Property Developers, albeit outside the UK. The contract terms were clear, and I assume both they and their team in the UAE would have asked to see the contract and the attached payment schedules, especially since I understand that they made payments to the Equity Group for onward payment to Verdi in accordance with those schedules. D13 Avnish made exactly the same point in relation to Copenhagen Court. D13 Avnish W/S 1/[43].

[237]The fact that the payments came from other D4 Equity RED SPVs and even from D11 Plan 9 was irrelevant according to D13 Avnish (even if it was noticed by him, a point on which he was inconsistent). D13 Avnish’s evidence was that the Claimant SPV structure was effectively disregarded, and that payments could be made from any Claimant SPV or Non-Claimant SPV. It was D13 Avnish’s case that the payments to Verdi were not attributable to specific contracts. Rather, because Verdi did essentially all of its work for D4 Equity RED, neither Verdi nor D13 Avnish treated payments as attributable to a specific contract or from a specific SPV, but rather saw the payments as attributable to the portfolio of work done by Verdi. There was always an underlying ambiguity in D13 Avnish’s case as to how this “single pot” worked. Given that Non-Claimant SPVs were paid in arrears on the basis of certified work done, it is difficult to see how the “single pot” approach (as I will call it) could have extended beyond the Claimant SPVs. The payment figures provided to me, which go to inform Annex 2, did not evidence inflow from other, Non-Claimant SPVs, and it seems to me that the “single pot” approach was better seen as limited to payments from the Claimant SPVs.

[238]Because Verdi was so dependent on the business from D4 Equity RED, it was said by D13 Avnish that Verdi lent back to D4 Equity RED (albeit indirectly) money to keep D4 Equity RED afloat. But this was – on D13 Avnish’s case – the lending of Verdi’s own monies, and not dishonest: D13 Avnish W/S 1. [55] The Equity Group was by far Verdi’s largest customer. The success of Verdi depended on the success of Equity Group and therefore was a mutual interest for each other to do well. [56] From early 2018, Mr Ashank Patel and Mr Iqbal told me that they were experiencing cashflow issues completing some of the sites due to variations, bank fee and interest. They asked me whether I could, from the monthly payments received for Innovation and Copenhagen, loan back money to the Equity Group money to complete these. The other sites were much further progressed and they explained that once sold these they would be able to repay the loans…I agreed as this would be in everyone’s interest to exit the sites as soon as possible, clear these loans, and ensure that all other money due to Verdi was paid. Although now, with hindsight, I was clearly very foolish to place such trust in them, at the time I have no doubt that they would not honour the agreement. [57] I did however ensure that these loans were documented, signed and sent by email to each of us. There were in total 7 separate loans over a 8 month period totalling £1,384,500. None of that money has ever been repaid.

[239]D13 Avnish also procured that Verdi made payments to himself or to his benefit. Again, according to D13 Avnish, these were proper payments because “all payments received by Verdi from Equity Group companies were payments owed to Verdi for work that it had carried out for them. There was nothing wrongful about those payments so far as Verdi – or I – were concerned and Verdi was entitled to use that money once received for its own purposes”. D13 Avnish W/S 1/[59]. (10). The “pleading” point

[240]D13 Avnish contended that if his interpretation of the Verdi Building Contracts was right and the payments to Verdi were contractually justified, then the Claimants had no case, because their case as a matter of pleading required these payments to be extra-contractual, ie with no contractual “cover” or justification. Looking at the pleadings, I consider this contention to be correct. There is, in my view, no alternative case from the Claimants contending that even if the payments were contractual, they were nevertheless dishonestly received.

[241]This is, however, something of an academic point. If D13 Avnish’s case on construction is right – namely that monies would be paid over in a manner unrelated to performance of work – and that was the understanding of all concerned, then dishonesty as against D13 Avnish would be hard to establish. D13 Avnish would be relying upon a contractual entitlement, and behaving consistently with it. If, contractually speaking, D13 Avnish’s interpretation is correct, then (particularly if D13 Avnish believed that this was the true construction) a case on dishonesty cannot, in my judgment, be made out on the facts (even if open to the Claimants on the pleadings). See D13 Avnish Written Opening/[9].

[242]Accordingly, for the Claimants’ case against D13 Avnish to succeed it is necessary for them to show(i) that they (and not D13 Avnish) are right on the question of the construction of the Verdi Building Contracts and

(ii) that D13 Avnish did not believe the construction he was advancing to be true at the time Verdi received the inwards payments from the Claimant SPVs and when he (D13 Avnish) caused Verdi to make the payments away that it did. (11). Contractual interpretation

[243]D13 Avnish’s case is clearly stated in D13 Opening/[11]: A first, critical flaw in Cs’ case is that its interpretation of the payment provisions of the construction contracts for Innovation Court and Copenhagen Court is wrong. Indeed, it is barely capable of serious argument. Avnish asserts, but Cs dispute, that those payment terms provided for instalment payments on fixed dates (unlinked to the completion of particular parts of the construction works). By contrast, Cs assert that those contract terms “depended upon it making an interim payment application and on the cumulative values of states of work it had completed, as defined in the Contract Sum Analysis at Appendix B to the Innovation and Copenhagen Court Contracts”…

[244]The D13 Opening expands on this point later on: [59] The terms of these two contracts are analysed below, but it is useful to identify at the outset the central point of construction that appears to divide the parties. [60] Each of the contracts was a “design and build” contract under which the contractor undertook not simply to construct, but also to complete the design so far as that was necessary. In the usual way, the requirements for the works were to be determined by the employer stating its requirements (in “Employer’s Requirements”) and the contractor indicating its proposals for achieving those, to the extent that they had been formulated at the date of contract (in the “Contractor’s Proposals”). The contractor would also provide a breakdown of its price for the works (a “Contract Sum Analysis”). [61] The draftsman (somewhat inelegantly) put two of those Contract Documents within a single appendix. Thus, “Appendix B” to each of the contracts was to contain both the Contractor’s Proposals and a Contract Sum Analysis. That fact is said by Cs to produce the result that both of those documents are the Contractor’s Proposals. Accordingly, Cs assert (and Avnish disputes) that, since the Contract Sum Analysis is also within Appendix B that is to be taken to be part of the Contractor’s Proposals and to define the “stages” of work against which Verdi was entitled to payment…Cs consequently deny “that interim payments would be made in accordance with the documents entitled “Build Cost Cashflow: Innovation Court”; that document simply “provided the Interim Valuation Dates:… [62] The effect of that construction is said by Cs to be that Verdi’s entitlement to payment, subject to the remainder of Section 4 of the JCT conditions…: …would correspond to the cumulative value (by reference to the Contract Sum Analysis) of the stages Verdi had completed as at the relevant Interim Valuation Date, plus the other matters set out in clauses4.12.1 –

4.12.2 of the Conditions, less the deductions set out in clauses 4.12.3, less the deductions set out in clause 4.14.

[245]Although the terms “Employers Requirements”, “Contractors Proposals” and “Contract Sum Analysis” are on the face of it defined terms, the Verdi Building Contracts simply refer the reader on to the provisions specifically agreed between the parties. The standard terms, and the definitions therein, add nothing by way of guidance.

[246]Referring to the Innovation Court Contract (which is the contract to which I was taken by all the parties), this contains various appendices, including an “Appendix B: Contractor’s Proposals”, which itself contains two documents: i) The first is a “Build Cost Cashflow: Innovation Court”, which identifies the “Project” as “Innovation Court”, the SPV as “ERE Hindhead”, the number of units as 39 in number, and then the following dates and figures, with notes underneath: This is not a precise transcription of the cashflow, which was “landscape” in the original, and “portrait” here. To the extent it makes any difference – and I do not think it does – I have been considering the original document, and not my transcription of it. Jan-18 £299,844 Feb-18 £288,701 Mar-18 £291,234 Apr-18 £291,234 May-18 £301,364 Jun-18 £316,558 Jul-18 £298,831 Aug-18 £298,831 Sep-18 £302,883 Oct-18 £173,727 Nov-18 £158,532 Total £3,021,740 Notes: 1. Please remit funds so that clear funds are available by the 20th of every month 2. These costs are for the build of the PDR schemes only, 39 units at Innovation Court 3. Design and Build costs for the enhanced schemes are not included in this cash flow. ii) The second document is headed “CSA” – ie “Contract Sum Analysis” – and contains a list of headings and subheadings with sums set against them. Thus, but way of selective quotation, we have: Floors and stairs Remove access floor £14,351.47 Acoustic flooring £44,568.28 Acoustic flooring over unheated space £21,923.13 Balustrading £12,662.34 Carpet to stairs £3,770.56

[247]There can be no doubt (as Mr Emin recognised) that the contract documents are badly written, and need to be construed carefully. D13 Avnish’s construction detaches payment from performance. Payment under the contract occurs without there being any correlation between what is done on site as against what is paid for.

[248]The Claimants called this an uncommercial outcome, and so it is. There appears to be no incentive during the course of performance of the Verdi Building Contracts for the contractor to do anything. Obviously, there are after the event remedies, when the money is gone. The norm is for there to be interim payment in arrears by reference to defined valuation standards and this is the obvious and express thrust of clauses 4.12 and 4.13 (set out at [225] above). The construction advanced by D13 Avnish disregards the interim payment provisions in the standard form – rendering them meaningless. I accept that payment irrespective of performance could be agreed. But, in this context, and given the uncommerciality, extremely clear words would be required.

[249]I do not consider that the cash flow described at [246(i)] is sufficiently express. It is interesting to note that it is described as a “cash flow” not an obligation to pay, and that the monthly sums differ over time. That implies some sort of correlation between work done and payment, with the cash flow indicating to the Claimant SPV what funds they might expect to have to pay if the project goes to plan.

[250]This implies what is the norm, namely a correlation between the cash flow and the work specification, where every month, according to the cash flow, there is a valuation, and the sum valued is paid by interim payment. On this reading, the second document (the CSA described at [246(ii)] becomes properly meaningful, because it described what Verdi must do in order to obtain payment. Of course, the staging of work is nowhere stated, but this simply shows that the parties intended Alternative B rather than Alternative A. See [225] to [226] above.

[251]On this approach, if the contractor works faster than expected, or there a change in specification requiring more work, this is provided for under the contract. Similarly, if value is not provided to the level anticipated in the cash flow, the client does not pay to the level of the cash flow. Once the cash flow becomes seen as indicative only, the construction of the agreement becomes relatively straightforward and clause 4.13 of the contract, the cash flow and the specification of work all sit consistently with one another.

[252]I therefore reject the contention that the monies paid to Verdi in accordance with the cash flow were Verdi’s monies. Monies paid without a proper valuation were paid improperly.

[253]Counsel for D13 Avnish created a table showing the so-called entitlements of Verdi under the Contracts, and the payments by the Claimant SPVs. In terms of amounts – as has been seen – Verdi received sums within its maximal contractual entitlement. However, the payments made were neither in accordance with the “cash flow” timetable; nor from the correct Claimant SPV. I do not consider that it is right to take such questions of performance into account when construing the Verdi Building Contracts. D13 Opening refers (at [12]) to performance supporting D13 Avnish’s construction. I do not consider the manner in which the contracts were performed to support D13 Avnish’s analysis; but I do not take this point into account against D13 Avnish. But these points will become relevant when considering D13 Avnish’s state of mind.

[254]I reject D13 Avnish’s construction of the Verdi Building Contracts. The construction advanced by the Claimants is the correct construction, giving meaning to the interim payment provisions contained in the standard form parts of the contracts and making sense of the schedules contained in Annex B. Although I accept that the contracts could have been better drafted, they are capable of resulting in an unambiguous construction that aligns with industry practice and basic commercial sense. (12). Findings in regard to the Directors

[255]I find the claims against the Directors to be made out. I reach this conclusion, to be clear, independently of the true construction of the Verdi Building Contracts.

[256]In order to ensure due process in the case of D13 Avnish, it is necessary that I consider (albeit briefly) the substance of the Claimants’ case against the Directors. If the Claimants’ claims against the Directors were bad, in that they had behaved properly in regard to the Claimant SPVs, then the position of D13 Avnish would be a fortiori. It is very difficult to see how the claims against the Directors might be bad in substance, and yet the claims against D13 Avnish succeed.

[257]The Directors were in knowing breach of duty towards the Claimant SPV in the following regards: i) They failed to disclose the involvement of two of their number in Verdi: see Section H(6). ii) They disregarded the SPV structure that D4 Equity RED used generally and for good reason: namely to ensure that each project was separately conducted and that the different interests of the different investors in those SPVs were respected. The Directors owed duties to ensure that the Claimant SPVs were properly run in accordance with the ADMAs that had been agreed. iii) Even if – contrary to the conclusion that I have reached – the Verdi Building Contracts permitted payment in advance of performance, it was a deliberate breach of duty to agree such terms so obviously to the financial disadvantage of the Claimant SPVs. iv) In fact, the Verdi Building Contracts did not permit payments without performance, and the Directors acted in knowing breach of duty: a) In failing to pay Verdi in arrears. b) In failing to ensure that only D2 Hindhead and D3 Leo made such payments. c) In permitting Claimant SPVs (including indirectly, via D11 Plan 9) to make any payments to Verdi. d) In receiving back – via “loans” – monies that should have been deployed in building out Innovation Court and Copenhagen Court.

[258]The claim against the Directors stands whatever the contractual interpretation of the Verdi Building Contracts. That is because – even if the Verdi Building Contracts said what D13 Avnish contended, the contracts were so disadvantageous to the Claimants as to have been concluded in breach of duty. Equally, the circulation of monies to the Directors was unlawful because(i) the Directors were benefiting themselves and

(ii) the payments were cutting across the very SPV structure that D4 Equity RED promulgated, and which was specifically put in place in regard to the Claimant SPVs. (12).

(a) Introduction

[259]I remind myself that the allegations in this case require dishonesty on the part of the relevant actors in order to succeed, and although I have found the Directors to be dishonest in various regards, and I have found D12 Singh Soor and D11 Plan 9 to be dishonest in various regards, D13 Avnish is not to be found guilty by association. Had I found no dishonesty on the part of the other actors, then D13 Avnish would, I consider, have been acquitted of dishonesty himself. But the converse does not hold good. Findings of dishonesty against the other actors make a conclusion of dishonesty against D13 Avnish possible, but no more than that.

[260]I have concluded that(i) D13 Avnish was subjectively aware that the monies Verdi received were paid to Verdi in breach of duty and

(ii) were (after receipt) dealt with by D13 Avnish (initially using Verdi’s account, which D13 Avnish controlled) inconsistently with the rights of the true owners of the money. Verdi gave no value in return for such payments as it received, notwithstanding that some work was done in relation to Innovation Court and Copenhagen Court, because there was no basis for the payments made. (I make no findings in regard to the Old Post Office, which was completed and whose contractual terms were not debated before me.)

[261]My reasons for reaching this conclusion are set out in the following paragraphs. (b). D13 Avnish’s understanding of the Innovation Court and Copenhagen Court Contracts

[262]I have rejected the construction of the Verdi Building Contracts put forward by D13 Avnish. However, this says little about D13 Avnish’s subjective understanding of these Contracts.

[263]I find that D13 Avnish had a conventional understanding of the agreements Verdi entered into, including the Verdi Building Contracts, namely that they involved payment in arrears. I have reached this conclusion for the following reasons. This was the standard (and very sensible) mode of operation in building contracts. It was the way Verdi did business in relation to the other construction work that Verdi did for D4 Equity RED. The terms on which such work was done were not put in the course of the trial, but it was D13 Avnish’s evidence that payments in those cases were made in arrears. The “one-pot” payment in advance approach was thus confined to the Claimant SPVs.

[264]D4 Equity RED’s approach to the use of SPVs – including in the case of the investments of the Fakhruddin brothers – demonstrated a clear intention, for good reason, to keep distinct investments separate. I have described that approach in Section H2, and no more needs to said. What is important is that D13 Avnish knew not only of D4 Equity RED’s general practice regarding SPVs, but knew also that this was the structure that had been put in place in the case of the Fakhruddin brothers’ investments. I have set out D13 Avnish’s knowledge in this regard in Section H4.

[265]In these circumstances, D13 Avnish must have appreciated (and I find did appreciate) that the Verdi Building Contracts had to operate in the usual way, with payment in arrears. Only this way could the investors, D4 Equity RED, the Directors and Verdi be assured that the various projects respected the ring fencing that the SPV approach guaranteed.

[266]D13 Avnish would have appreciated at the time he received the payments that payment without reference to performance was(i) an irregular method of proceeding,

(ii) contrary to industry practice,

(iii) not supported by the Verdi Building Contracts and

(iv) to the obvious disadvantage of the Claimant SPVs.

[267]I find that D13 Avnish knew what was in fact the case, that the Directors were taking advantage of the Fakhruddin brothers’ trust in the Directors and the fact that there was no bank lending to exert control over the works independently of the Fakhruddin brothers. Put another way, D13 Avnish knew that the SPV approach applied to the Claimant SPVs as well; and he had no reason to believe that this structure was being departed from for any good or honest purpose.

[268]I conclude that D13 Avnish did not believe that the Verdi Building Contracts said what he claims they say. This is an after-the-event attempted justification, seeking to render defensible that which is in fact indefensible.

(c) Inconsistent performance

[269]Although the manner in which the parties perform an agreement is not relevant to its construction, the manner of performance can be helpful evidence as to state of mind.

[270]Had D13 Avnish believed that Verdi had an entitlement to monthly payments by reference to the “cash flow” only, and without reference to performance, I consider he would have caused Verdi to demand that this schedule be observed, given the financial pressures on Verdi. As it was, Verdi and D13 Avnish accepted the monies the Directors chose to send Verdi’s way, without questioning why they were receiving what they were receiving. (d). The parties’ conduct in relation to the Innovation Court letter of intent

[271]D13 Avnish cannot plausibly suggest that he was not, personally, capable of taking advantage of the Fakhruddin brothers trust of the Directors. It is not plausible to suggest that D13 Avnish would have insisted on the Verdi Building Contracts being properly performed, which would have been the honest course to take.

[272]D13 Avnish was perfectly capable of colluding with the Directors to the detriment of the Claimants. The letter of intent in the case of the works at Innovation Court was addressed to Verdi and dated 19 January 2018. The letter of intent provided (emphasis added): The Employer’s maximum liability to the Contractor under this letter shall be £202,567.40…(the “Maximum Sum”) and you are to commence the Works immediately. The Maximum Amount shall take into account all reasonable costs properly incurred in respect of the Works. Any expenditure in excess of the sum shall require further written authorisation from the Employer, and any expenditure in excess of this amount not duly so authorised by the Employer will be entirely at your own risk. The Employer will pay the Contractor monthly based on the Contract Administrator’s valuation and certification of the Works, the Contractor is required to provide supporting documentation as reasonably required by the Employer/Contract Administrator. The Contractor is to submit an invoice based on the Contract Administrator’s certificate and payment will be made within 21 days.

[273]These provisions could not be clearer: payment is in arrears, and on the basis of a certificate. What in fact happened is that the payment (IN:18) was made without a certificate, in full, a matter of days after the letter of intent was concluded. The making of the payment was signalled to D13 Avnish on WhatsApp. There is no honest justification for this conduct on the part of either the Directors or D13 Avnish. Put Day 11/pp65ff.

(e) Dealings with monies received by Verdi Introduction

[274]The manner in which monies were dealt with after receipt by Verdi reinforces the conclusion I have reached. It is best to consider D13 Avnish’s position by reference to a few specific transactions, which are representative of the many transactions I was taken to.

IN:13

[275]IN:13 is a payment to Verdi from C4 Highbarrow out of its C4 Account. Verdi’s bank statements show a credit of £80,000 from “Highbarrow Holdings” on 1 June 2017, with a transfer out on the same day and in the same amount to “Equity”. Day 11/p68. The account numbered 82817217 and was in the names of “Mr Avnish Patel & Mr Mohammed Iqbal trading as Equity”. The transfer out was authorised by D13 Avnish personally. The transferee account (the Avnish/Babar Account) was a joint account in the names of D2 Babar and D13 Avnish. Day 11/p68. Still on 1 June 2017, the £80,000 received into this account was paid away in two tranches of £40,000, the transactions being described as “M Iqbal loan” and “I Haq loan”. D13 Avnish confirmed that the transferees were D2 Babar and D3 Ikram. Day 11/p69.

[276]There was an exchange over WhatsApp between Mr Gill and D13 Avnish, on which D13 Avnish was cross-examined. Day 11 / pp70 ff. The exchanges are somewhat Delphic, and I am disinclined to over-construe them: Day 11 / p71. Q (Ms Thompson) Well, you say:

“…they need to pay Roger fees…they are going to transfer £80k into Verdi for me to then transfer to another bank and then £40k each to him…”

Just pausing there, that is Babar, isn’t it? “Him”? A (D13 Avnish) Yes, that’s right. Q (Ms Thompson) “…and Iky…Obviously not fees!!” So 40 to Babar and 40 to Ikram was obviously not Roger’s fees, was it? That is what you are saying here? A (D13 Avnish) I think that is what I was saying. I was saying that they told me that it was to pay Roger’s fees, but I’m saying to Palli it’s probably they are using it for their own cash flow or something like that.

[277]D13 Avnish’s answers are consistent with D13 Avnish’s contention that:(i) Verdi received the monies beneficially, with regard to the identity of the payer;

(ii) that he was entitled to transfer these monies as director and shareholder of Verdi; and

(iii) was entitled to lend them to (in this case) D2 Babar and D3 Ikram.

[278]But this explanation is fundamentally implausible and I disbelieve it: i) Even if Verdi was receiving these monies for the purpose of some construction work, whether for the benefit of C4 Highbarrow or anyone else for that matter, it is irresponsible to pay that money away for purposes other than construction. Of course, once the work has been done, any profit remaining would be Verdi’s. Paying away C4 Highbarrow’s money to the Directors (or two of them) was plainly contrary to the interests of C4 Highbarrow. ii) Furthermore, the monies came in to the Verdi account from a party with whom Verdi was not in contractual relations, which should have struck D13 Avnish as odd in any event, even if he did not know of the Dunsty Farm project. iii) The monies are then not spent on any building work, but moved away from Verdi’s business into an account having nothing to do with Verdi, namely the Avnish/Babar Account. D13 Avnish, even if he subscribed to the “one pot” theory (which I do not believe), would have known that he was acting(i) contrary to the interests of Verdi, in causing Verdi to be unable to build the Innovation Court and Copenhagen Court projects and

(ii) contrary to the interests of whichever SPV was providing the funds, for the same reason. This conclusion is only reinforced by the fact that the monies in the Avnish/Babar Account were then paid back to two of the Directors, D2 Babar and D3 Ikram.

[279]Quite clearly, the Directors were using D4 Equity RED’s and their control over the Claimant SPVs to enrich themselves, using aseries of cut-outs (the Verdi Account and the Avnish/Babar Account) to disguise this fact.

[280]This point was put to D13 Avnish: Day 11/pp83ff. Q (Ms Thompson) You knew the money was being sent to Verdi from Highbarrow, the £80,000, wasn’t the money – wasn’t money that belonged to Ashank, Babar or Ikram, didn’t you? A (D13 Avnish) No, I didn’t. Q (Ms Thompson) Well, Mr Patel, if Babar and Ikram owned Highbarrow they could have transferred the £80,000 to themselves directly. There would have been no need to transfer it to Verdi and ask you to then transfer it to another bank account and then transfer it on to them. If they owned Highbarrow, they just could have made the transfer directly? Do you agree? A (D13 Avnish) I agree they could have but I don’t know why they didn’t. Q (Ms Thompson) Mr Patel, you must have realised when they asked you to do this that the reason they were asking you to transfer the money – to receive the money into Verdi, transfer it on to another bank account and then transfer it on to them was because the £80,000 wasn’t their money and they didn’t want the owner of the money seeing on Highbarrow’s bank statement that it had gone to Babar and Ikram to help their personal cash flow? A (D13 Avnish) Not at all. And in relation to Highbarrow there would be even less reason for me to – again, I’m not sure, choice of words, worry about it or something – because Highbarrow was a company name that was linked to Ashank. Ashank lived on Highbarrow. His road was Highbarrow Avenue or Road or something like that. So you know, it wasn’t – I never even knew anything else. Q (Ms Thompson) But Mr Patel, if you thought this was Ashank’s company you would just have said to Babar and Akram, “Why on earth does this money need to come to Verdi and then to another bank account and then to you? Can’t Ashank just transfer this money to you directly if there is nothing wrong with that happening?” A (D13 Avnish) I mean, with the benefit of knowledge now, yes, I probably should have. But at that time I never thought anything of it.

[281]I do not accept the point about hindsight. I consider that D13 Avnish must – at the time of the payment – have appreciated that there was something irregular. It was obvious to D13 Avnish at the time that Verdi was being used as a cypher to transfer monies for uses that were improper. An honest response to this payment would have been to return it to C4 Highbarrow or at least question with C4 Highbarrow why it had been received.

IN:14

[282]IN:14 was a payment into Verdi’s account on 28 June in the sum of £140,000, the transferor being described as “Equity Real Estate Equity Horsham”. Day 11/p93. This was in fact a payment from C5 Rushworth, as the witness accepted (without saying anything about his contemporaneous knowledge). Day 11/p93.

[283]The payment was the subject of WhatsApp conversations between D3 Ikram and D13 Avnish. Day 11/p94. D13 Avnish was cross-examined on what happened to the £140,000 in the Verdi account: Day 11/pp94-95. Q (Ms Thompson) …so he has asked you to check the payment we just looked at and you say: “The £140k, mate.” Do you see that? A (D13 Avnish) Yes. Q (Ms Thompson) And he says: “Yes, the £140k.” …And you say: “All back to Ash in three tranches within 5 days.” So you are saying there, Mr Patel, £140,000 from Rushworth all went back to Ashank in three tranches within five says? A (D13 Ashank) That’s right.

[284]Bank statements on the record show three transfers going to a joint account of Ashank and his wife Nilpa Day 11/pp97 ff. totalling £140,000. The points made at [278] apply with equal force: I shall not repeat them.

IN:8

[285]So far payments from Claimant SPVs with whom Verdi was not in contractual relations have been considered. IN:8 is a payment from C2 Hindhead to Verdi in the amount of £165,000. Day 11 / pp.178-179 How the money was dealt with is best described by setting out D13 Avnish’s evidence in cross-examination: Day 11 / pp178 ff. Q (Ms Thompson) …on 15 February 2017. Can you see a payment in of £165,000? A (D13 Avnish) I can. Q (Ms Thompson) Do you want to go to the bank statement or are you happy to take it from me for now that it was a payment from Hindhead? A (D13 Avnish) I’m happy. Q (Ms Thompson) Thank you. Can you see on the same day there is a payment of £37,500 to your joint account with Babar? A (D13 Avnish) Yes, that’s right. Q (Ms Thompson) And that was used, I think you say in your second witness statement, to pay or partially pay for the purchase of a property in Caterham? Is that right? A (D13 Avnish) That’s right. Q (Ms Thompson) And that property was owned by what you say is your company, Azure Caterham Ltd? A (D13 Avnish) That’s right. Q (Ms Thompson) Can we see on 17 February 2017 there is a payment of £70,000 to “Equity R E Dev Loan”? Was that a loan that Verdi had made to Equity Real Estate Limited? A (D13 Avnish) That’s right. Q (Ms Thompson) And again, is it your evidence that one of the Directors would have called you and said £165,000 is going to come in, can you loan £70,000 of that back to our company, Equity RED? A (D13 Avnish) I assume so. Q (Ms Thompson) …these are your WhatsApps with Mr Gill again. And in the middle of the page at 16 February 18:08 Mr Gill says:

“Hi Av, Account details for Equity Real Estate (Lamda) Limited…”

And then he gives you an account number and sort code. Do you see that? A (D13 Avnish) Yes. Q (Ms Thompson) And then he says:

“50k to this account, but not from Verdi. Babar will call to explain.”

Do you see that? A (D13 Avnish) Yes. Q (Ms Thompson) Did Babar call you to explain why you needed to send 50,000 to Lambda, but not from Verdi? A (D13 Avnish) I presume he did, but I can’t remember the call. Q (Ms Thompson) And then Palli says later that evening:

“Just got a message from B –”

Is that Babar? A (D13 Avnish) Yes. Q (Ms Thompson) “For you not to send 50k to ERE Lambda. He wants 70k sent to Equity Real Estates Developments Ltd first thing in the morning.” With the reference “loan:”, do you see that? A (D13 Avnish) I do. Q (Ms Thompson) So Mr Gill is just telling you to loan money back to Equity Real Estate and you do it seemingly without asking any questions of Mr Gill as to why this is happening? A (D13 Avnish) I would have had the conversation with Babar the day before or the same day. Q (Ms Thompson) Well, I think your evidence is that you can’t remember that conversation, is that right? A (D13 Avnish) Yes, but if I can’t remember, it doesn’t mean the call didn’t happen. Normally when they want a loan, they would normally call.

[286]Although there was no reason for D13 Avnish to know this (and I make no finding to this effect), the £70,000 transferred to D4 Equity RED was itself transferred to Lambda in the amount of £170,000. Thus, monies coming (in part from Verdi) were “laundered” through Equity RED. Day 11/pp183-184.

[287]Given my conclusions in relation to the Verdi Building Contracts, the monies should never have been paid to Verdi without the Contracts being complied with. There was no basis for making the payment and no basis for Verdi legitimately to receive the money, let alone spend it on anything other than the C2 Hindhead project, Innovation Court.

(f) No honour amongst thieves

[288]D2 Babar and D3 Ikram (as well as D13 Avnish) were 25% shareholders in Verdi. D1 Ash was not. In a conversation that was illicitly recorded and of poor quality, D3 Ikram appears to complain about unfair treatment in terms of how the money of the Fakhruddin brothers was distributed. D13 Avnish was a party to part of this conversation. The transcript was put to D13 Avnish): Day 11 / pp76-77. Q (Ms Thompson) …Mr Patel, when you say “a little drink out of it”, that is a little drink out of Verdi, isn’t it? A (D13 Avnish) Yes. Q (Ms Thompson) Right, and by “little drink”, did you mean a little kickback, a little bit of money to which they were not entitled? A (D13 Avnish) No, I think they all wanted a share out of it, they wanted a share out of Verdi. Initially the share out of Verdi was because they were more experienced than me and also a lot of the work that was coming to – well, in effect it transpired that all the work that came to Verdi was from Equity. Q (Ms Thompson) Mr Patel, Ikram then asks:

“So where’s my little drink?...How much have you given me?”

And you say: “I think I’ve given you around 80, 90.” …

[289]Given the nature of this recording, it would be dangerous to read too much into it. But the whole tenor of the conversation starts from the premise that the Fakhruddin brothers are to be defrauded of their money, and the debate is all about how the spoils are to be divided.

(g) The “one pot” explanation does not suffice

[290]D13 Avnish used what I have termed the “one-pot” explanation to justify the use of moneys on other matters when they emanated from a specific SPV. This would have been improper even if the money emanating from one SPV had been spent on the project of another, different, SPV: Day 11/pp88 ff. Q (Ms Thompson) So you knew that Verdi had no contractual entitlement to receive funds from an entity called Highbarrow? A (D13 Avnish) Yes. We didn’t have a contractual entitlement. Q (Ms Thompson) To receive funds from an entity called Highbarrow? A (D13 Avnish) Yes, that’s right. Q (Mr Thompson) Right. And nobody told you at the time: [D1 Ash Ms Thompson refers to D1 Ash as “Mr Patel”, which of course also D13 Avnish’s surname. There was no confusion during cross-examination – but I have made the question clearer for the reader. ] or Avnish, this is money we are paying to you to discharge liability under this XYZ particular construction contract, did they? A (D13 Avnish) It was never a particular discharge under one contract. Any monies – we always thought of Equity’s monies coming in as put into a big pot and then – because they were my only client. And from there I would spend monies wherever I needed, whichever job needed monies or whatever needed to be doing. Q (Ms Thompson) Mr Patel, you knew that – I assume you knew that the investors behind every SPV weren’t identical. In fact, you must have known that, because you knew that the investors on the Old Post Office were different from the other investors because they wouldn’t allow bank funding? A (D13 Avnish) I knew about Old Post Office, yes. Q Ms Thompson) Right. And so it wasn’t honest for you to treat different investors’ money interchangeably, was it, because they were all different? A (D13 Avnish) I didn’t know what was – what the internal relationships were in Equity between the investors. I always dealt with one of the directors of Equity. I had no knowledge of what was going on internally. I had to rely on them telling me.

[291]In regard to the last answer quoted, where there is an obviously questionable transaction, an honest person questions it, and does not blindly follow instructions. More fundamentally, for the reasons put, cross-subsidization between differently owned SPVs is obviously improper. In this case, there was not so much cross-subsidisation as extraction of value to the Directors.

[292]The “one pot” justification cannot hold water: Day 11 / pp 163 ff. Q (Ms Thompson) Mr Patel, in circumstances where you knew that each project was funded by a different bank, and certainly in some instances by a different investor, it was dishonest, wasn’t it, to put all of the money in one big pot, because the result of that might be that you were using bank A’s money, money from bank A, to discharge liabilities on your books under a contract that you have got with a funder who is funded by bank B? A (D13 Avnish) No, not at all. I mean, if I had 10 sites running, I can’t have 10 bank accounts. And then if I, for example, appoint – let’s say for argument’s sake, a building control officer and he is working on five of my sites, they send an invoice. I’m not going to say: your invoice of £5,000, £745 I’m going to pay from this bank account, related to a site. I don’t believe there is any construction company that would work that way. It would always be put into one site and then you do the reconciliation afterwards. Q (Ms Thompson) I’m not suggesting to you, Mr Patel, that you should have had a separate bank account for every project. What I’m suggesting to you is that when a particular SPV pays Verdi money, the honest thing to do is to allocate that payment…against the contract which that SPV has with Verdi, rather than allocating it against another contract that Verdi has with a different SPV. Do you agree? A (D13 Avnish) No. Again, it depends on – at the end of the day, we were dependent on Equity to tell us their internal accounting procedure. We get the money from Equity… Q (Ms Thompson) But Mr Patel, the effect of the money coming in and all going into one pot and then you deciding which contracts to allocate it against is that money from bank A or investor A is used to discharge liabilities under a contract with bank B or investor B? A (D13 Avnish) I do not decide who to allocate it to. That was decided by Equity. The money comes into one pot, we use it, and then later on there’s a discussion between my bookkeeper, my accountant, et cetera, to work out how it is allocated, how It is invoiced.

[293]All these answers show is the unfortunate consequences of distorting or breaching the proper contractual regime of payment in arrears. Building contracts involve the contractor undertaking the work, and then being paid for it on certification on an interim basis. On such an approach, the question of allocation simply does not arise.

[294]I do not consider that this is a subjectively accurate description, by D13 Avnish of how Verdi did business. The general model was payment in arrears – the banks insisted on this. The Fakhuddin brothers’ projects, without bank finance and trusting customers, were ripe for abuse. So monies were drawn down early and used for purposes that had nothing to do with their intended purpose.

[295]D13 Avnish could not avoid accepting that this approach was inevitably wrong: Day 13 / pp.177 ff Q (Ms Thompson) …it is your case then that you didn’t care where money was coming from. All you cared was that Verdi was receiving it and you had to pass it on to Ashank Patel? A (D13 Avnish) No, what I cared about was that money came from Equity. Q (Ms Thompson) But Mr Patel, you agreed with me earlier that you knew that the banks behind each SPV, and at least in some cases, the SPV – the investors behind each SPV were different. So I put to you that it did matter which SPV the money was coming from, because they weren’t all owned by the same person? A (D13 Avnish) They may not have been owned but they were all controlled by the three directors, or one of the three directors, or two of them, or whatever, you know. It is like, for example, if we got a payment from Sigma, it wasn’t my practice to go into it there, look at Companies House, look at Equity Sigma, look at the directors and then drill down into who was the shareholder. I wouldn’t do that. Q (Ms Thompson) But Mr Patel, I think you would agree with me that you knew the directors didn’t own all of these SPVs. They didn’t – they weren’t the beneficial owners of all of the money in every SPV’s bank account, were they? A (D13 Avnish) As far as I was – yes, why would they not be the beneficial owners of certain SPVs? If they have invested – if the investors are on the project, then either they would be recorded on the SPV, correct, or…I’m sorry, I’m not questioning, trying to turn it around, I’m saying… D13 Avnish’s inability to answer this straightforward question speaks volumes.

(h) Volume of transfers

[296]The volume of transfers from the Verdi account to the accounts controlled by the D1 Ash was considerable. This was put to D13 Avnish: Day 11 / pp104 ff. Q (Ms Thompson) We will come to the payments. But you transfer from Verdi’s account over £600,000 worth of money. He didn’t tell you to do that via WhatsApp: did he call you each time that he wanted you to do it? A (D13 Avnish) I can’t remember. Most probably either called or Babar told me or Palli. But more than likely it is him or Babar. Q (Ms Thompson) Mr Patel, it is amazingly reckless, isn’t it, to transfer £600,000 of Verdi’s money to someone without even having a conversation with them about what that money is for? A (D13 Avnish) We had the conversation. It would have been on the telephone. It was basically… Q (Ms Thompson) I thought you said you couldn’t remember whether you spoke to Ashank or to someone else on the telephone? A (D13 Avnish) I would have spoken to somebody. I can’t just get money in and just transfer it willy-nilly. There would have been a conversation or something for it to happen.

[297]And again: Day 11 / pp116 ff. Q (Ms Thompson) Mr Patel, at the time Verdi received the £140,000 into the account and at the time you transferred it out to Ashank Patel, you knew that that £140,000 that had come in wasn’t Ashank Patel’s money, didn’t you? A (D13 Avnish) No, I didn’t. Q (Ms Thompson) Well, Mr Patel, if it was Ashank Patel’s money, he could have just transferred it to himself directly, couldn’t he? A (D13 Avnish He could have, yes. Q (Ms Thompson) What possible reason was there for him to transfer his own money to another one of his bank accounts via the Verdi bank account? A (D13 Avnish) I’m not sure, I can’t speak for him. Q (Ms Thompson) Mr Patel, as the time Ashank Patel made this request you realised from the fact that he was asking you to transfer this money from Verdi to him that it couldn’t possibly have been his money, because you realised if it was his money he could have made the transfer to himself directly? A (D13 Avnish) As I said, no. Q (Ms Thompson) Mr Patel, you knew that the way that Equity funded their sites was through a combination of banks and other investors, yes? A (D13 Avnish) Yes. Q (Ms Thompson) And you knew that you were helping Ashank misappropriate money that belonged to other investors, didn’t you? A (D13 Avnish) No, I didn’t.

[298]D13 Avnish had no idea what the monies were being used for. Propping up D4 Equity RED at the expense of SPVs to which D4 Equity RED owed fiduciary duties is improper, and D13 Avnish knew this: Day 11 / pp130 ff. Q (Ms Thompson) But Mr Patel, if you truly thought when that money came in that it was to discharge a liability to Verdi under a contract, you wouldn’t have immediately transferred the money back to Mr Patel. You must have thought, you did think: the reason I’m getting this payment is Mr Patel wants me to re-direct this money though Verdi to him? A (D13 Avnish) Not at all. Q (Ms Thompson) Then why on earth did you transfer it all back to him, if you thought it was money owing to your company? A (D13 Avnish) It was money owing to my company but, as I said, they were the main contractors for me. They wanted, for the sake of using the right word, my help to cash flow them on either their expenditures or sites and I wasn’t forced but I did it. Q (Ms Thompson) Mr Patel, your Verdi is the contractor on Equity sites, right? A (D13 Avnish) Correct. Q (Ms Thompson) Right, and a major expense, I imagine, in developing a site is the cost of constructing it, the labour and the materials? Is that right? A (D13 Avnish) Correct. Q (Ms Thompson) So how on earth does it help the cash flow and development of the sites for the contractor of the sites to give the money back to the developer rather than spend it on labour and materials to develop the sites? A (D13 Avnish) Because I needed Equity to survive See also Day 11 / p152. …it just transpired that I did it to ensure that Equity survived in order to get the work done and pay us back and then we move on.

(i) The loans justification

[299]From time-to-time, D13 Avnish would say that the monies paid away to the Directors were “loans” to them. This explanation would only be sufficient if(i) the payment was from a SPV Verdi had contracted with (which raises tracing points) and

(ii) the contractual point went D13 Avnish’s way: Day 11/pp117ff. Q (Ms Thompson) …I put to you that you knew the purpose of the transfer was to help Ashank misappropriate another investor’s money. You have disagreed with me. What do you say the purpose of the transfer was? A (D13 Avnish) They requested loans back from Verdi and I didn’t know what they were going to do with it, but they were in effect my biggest client and I did not think anything of it. Q (Ms Thompson) So you didn’t think anything of transferring £140,000 of someone else’s money to Ashank and his wife’s joint marital account? A (D13 Avnish) I did not know it was anybody else’s money, and also there was full transparency. My book-keeper was there, the guys on the Equity side, the accountants. It wasn’t like, you know, anything was, in my opinion, untoward.

[300]The loans were largely undocumented and represent in my judgment a fig-leaf to explain otherwise dishonest transactions. (14). Conclusions

[301]The Claimant Opening states: [50] The pattern which emerges from these statements is of Verdi transferring funds received from Cs to Ashank Patel’s joint marital account and/or the Avnish/Babar Account immediately after receipt. Some, but not all, of these funds were transferred on to non-Fakhruddin “Equity” SPVs. [51] In fact, this pattern was not limited to transfers made to Verdi from the Fakhruddin projects. Verdi received payments from other “Equity” project SPVs throughout 2017 and diverted them in the same way (ie either to Ashank Patel or the Avnish Babar account). This was mirrored by a similar pattern of Ashank Patel paying some (but rarely all) of the funds he received on to the Equity RED Metro Bank account.

[302]As in the case of the Plan 9 Claims, it is necessary to consider separately the positions of:(i) the Directors and D4 Equity RED as payers of monies out of the accounts of the SPV Claimants to Verdi;

(ii) the director in control of Verdi, D13 Avnish; and

(iii) the onward payments by Verdi to others.

[303]So far as payments by the Directors and D4 Equity RED are concerned, each of the classes of payment described at [219] was improper and dishonestly made. In the case of payments made without “contractual cover” (ie classes (ii) and (iii)), there was no proper basis for making these payments (whether to Verdi or to D11 Plan 9) and the Directors and D4 Equity RED would have known this. So far as class (i) is concerned, there was no proper basis for making these payments because either the Verdi Building Contracts did not provide the basis for proper payment (which is the position I have found to be) or (if I am wrong on this) the Verdi Building Contracts themselves were so disadvantageous to the Claimant SPVs that their very conclusion involved a clear and knowing breach of fiduciary duty.

[304]Turning then, to Verdi and D13 Avnish, I consider that D13 Avnish knew, at the times they were made, that the payments were improper and that Verdi received them knowing this. That was the case so far as all three classes of payment were concerned. Verdi had no proper basis for receiving payments from D11 Plan 9 and the Claimant SPVs with whom it was not in contractual relations, and D13 Avnish knew this. The same is the case as regards the payments from C2 Hindhead and C3 Leo. Although there were contracts in place, there was no honest basis for receiving these payments because the contracts stipulated interim payments in arrears, and D13 Avnish knew this.

[305]So far as onward payments were concerned, these were done by Verdi through the action of D13 Avnish. He knew these payments were improper and so acted dishonestly. That is because the payments should never have been made to the Verdi Account.

[306]So far as the recipients of those payments are concerned, if they were Defendants (ie Directors, D4 Equity RED or D13 Avnish) they were received knowing that they were improper extractions from the Claimant SPVs and made in breach of trust. So far as any other non-defendant recipients are concerned, I make no findings, I. DISPOSITION (1). Introduction

[307]I noted at the outset of this Judgment that the critical matters arising for decision were factual and that the only legal question I would address in the course of the Judgment was the question of dishonesty, which involves applying an objective standard to a subjective state of mind. I have found all the relevant defendants – that is the Directors, D4 Equity RED, D11 Plan, D12 Singh Soor and D13 Avnish to be dishonest. (2). Breach of fiduciary duty

[308]In contrast to the facts, and to the construction of the Verdi Buildings Contracts, the legal principles underpinning the Claimants’ claims were not in material dispute. The Directors owed the Claimant SPVs the fiduciary duties laid down in sections 171 to 177 of the Companies Act 2006, as did D4 Equity RED by virtue of the ADMAs (or, in the case of C4 Highbarrow, where no ADMA was concluded, by virtue of duties assumed arising out of what was a fiduciary relationship). The payments induced by the Directors and D4 Equity RED were in obvious breach of fiduciary duty in the case of the Commission Payments, the Plan 9 Claims and the Verdi Claims.

[309]To the extent monies moved, by way of a chain of transactions, from the Claimant SPVs to the Directors, they received company property, knowing it to be such, and are accountable both for the monies paid away by the Claimant SPVs and the monies received by them (indirectly) from the Claimant SPVs. (3). Dishonest assistance

[310]The victim of a breach of fiduciary duty is entitled to equitable compensation from a third party for losses caused by that breach if that third party dishonestly carried out actions which in fact assisted the fiduciary to commit those breaches of fiduciary duty.

[311]In this case, I have found that all of the third parties – in the Plan 9 Claims, D11 Plan 9 and D12 Singh Soor, and in the Verdi Claims, D13 Avnish – dishonestly assisted the Directors and D4 Equity RED in providing “cover” for extracting monies (in breach of fiduciary duty) from the Claimant SPVs. (4). Conspiracy

[312]A party is liable to pay damages at common law if they(i) combine with other persons

(ii) to use unlawful means

(iii) with the intention of injuring the Claimants and

(iv) act upon that combination such that the unlawful means (whoever committed them) causes the Claimants loss. There must be an actual intention to cause the Claimants loss, either by injuring them or as a necessary consequence of making a gain (where the loss is the flipside of a gain the defendant intends to make). It must be shown that the unlawful means themselves caused loss.

[313]These elements are all satisfied in the present case, by reason of the facts that I have found. The question as yet unaddressed is the extent of the conspiracy. Identifying only Defendants, my conclusion is that whereas in the case of the Improper Commission Claims, the unlawful act conspiracy was limited to the Directors and D4 Equity RED, in the case of the Plan 9 Claims and the Verdi Claims there was a single conspiracy involving these parties, plus D11 Plan 9, D12 Singh Soor and D13 Avnish. Both sets of claims involve essentially the same conspiracy – charging for work that is not done by way of an apparently independent “cypher” and then paying those monies away to persons who should not be receiving them. As has been described, there was some interaction between Plan 9 and Verdi, in the form of the payments made by Plan 9 to Verdi. For the reasons I have given, these payments (like all the other payments) were made and received dishonestly, but this linkage between Verdi and Plan 9 inclines me to the view that there was a single conspiracy, and I so find.

[314]If I am wrong on this, it is beyond doubt that there was: i) A conspiracy regarding the Plan 9 Claims between the Directors, D4 Equity RED, D11 Plan 9 and D12 Singh Soor. ii) A conspiracy regarding the Verdi Claims between the Directors, D4 Equity RED and D13 Avnish. (5). Knowing receipt and tracing

[315]A claim in knowing receipt will arise where a Defendant beneficially receives the Claimants’ assets, where the receipt arises from a breach of trust or fiduciary duty, and there is knowledge that the assets are traceable to a breach of duty sufficient to make it unconscionable to retain the benefit of the receipt. The recipient of property in these circumstances is required to return the property on receipt, is accountable for the property as a constructive trustee, and is liable to pay equitable compensation if they no longer hold it.

[316]So far as direct payees of the monies extracted from the Claimant SPVs are concerned (ie D11 Plan 9, D12 Singh Soor and D13 Avnish), the elements of knowing receipt are made out. No problems regarding tracing of monies arise because of the directness of the payments.

[317]However, in the case of the indirect recipients, eg the Directors and other Defendant payees of D11 Plan 9 and Verdi, whilst I am in no doubt that the receipt was knowing (and, indeed, dishonest, although this is not a requirement), it is necessary when tracing through mixed funds to ensure that traceable proceeds according to the established rules of identification have indeed been received. As I have noted, there is a lack of completeness in the bank statements before me, which precluded determining any (properly so-called) tracing claims. (6). Further directions

[318]I will leave it to the parties to draw up and if possible agree an order. As presently advised, it seems to be inevitable that a further substantive hearing will be required, and it would be helpful if the parties could consider the issues that would fall to be determined and what orders need to be made in the meantime. I anticipate that a directions hearing is likely to be necessary.

order

Section D sets out the test of dishonesty that I must apply; Section E states the uncontentious background facts; Section F considers and determines the material facts of the Improper Commission Claims; Section G considers and determines the material facts of the Plan 9 Claims; Section H considers and determines the material facts of the Verdi Claims; Section I applies the law to the found facts, and disposes of the various causes of action that are before me. D. THE TEST FOR DISHONESTY