Sharma v Sood & Anor

LORD JUSTICE PILL: This is an appeal against a judgment of HHJ Hamilton given at the Luton County Court on 8 December 2005. The judge found that the claimant, Mr Ravi Sharma was entitled to repayment of the sum of £45,000, which he had lent to the defendants, Mr Sood and his life partner, as he describes her, Ms Kohli. The defendants claim that the sums were paid to them as investments in a partnership and not, as the claimant contended and the judge found, as a loan or a series of loans. Ms Kohli makes the additional point that she was not a party to any arrangements which were made between Mr Sood and the claimant.

Permission to appeal was given following an oral hearing. Mr Sood’s grounds of appeal are that the judge was in error in not allowing him to cross-examine the claimant and in not allowing him to exhibit bank statements. It is claimed that the judge was in error in finding that it was a loan and that, in law, the arrangement, on the evidence, was a partnership. The judge, it is claimed, did not weigh the evidence in an appropriate manner. He should have struck out the evidence of a witness, Mr Sabharwal, who was not truthful. Ms Kohli also submits that the judge was in error in law in not finding that there was a partnership but claimed that she was not a party to any obligation to repay money to the claimant.

The central part of the defendants’ submissions this morning has been on the first question, the alleged error of the judge in law in failing to allow Mr Sood to cross-examine the claimant and, as a result, it is submitted, the hearing was unfair and a retrial should be ordered. Mr Sood has appeared in person for both himself and Ms Kohli at this hearing. It was clarified at the beginning of this hearing that that would be the position and Ms Kohli agreed with Mr Sood’s statement to the court to that effect. Mr Sood has legal training and is well on the way to qualification. At the hearing he was, it is claimed by Mr Ghaffar on behalf of the claimant, represented by counsel, but there is no doubt that at some stage those instructions to counsel were withdrawn and the ground of appeal arises out of the consequences of that. It is not in dispute that counsel, Mr Nusrat, acted throughout the hearing for Ms Kohli.

Before turning to that central allegation I refer to the judgment. It is recorded that it is common ground that the money was paid over. Two businesses were in contemplation, a restaurant business which eventually came to nothing, and a project by which a well-known singer from India, Mr Udit Narayan, was to come to England to give a series of concerts. The claimant’s evidence was that he was not interested in becoming involved in such a project. He did, however, introduce the defendant to friends of his, Mr and Mrs Sabharwal. There had been preliminary discussions as to setting up a partnership. The claimant’s evidence was that nothing came of that; no agreement was reached and the money was paid by way of loans, which the claimant described in his evidence. There was a joint bank account between the claimant and Mr Sood. The judge found that the object of that was an attempt by the claimant, who was not an experienced businessman, to have security for the loans which he had given.

The case was listed for a day and a half, and evidence was given at some length by the claimant, who was cross-examined by counsel, Mr Nusrat, on behalf of the defendants. The judge stated that no partnership agreement in respect of either the restaurant or the show, which named the claimant, had been produced, nor were any partnership accounts, but only the joint bank account on which the claimant’s name appeared.

The judge obviously considered the evidence carefully. He stated that he had the advantage of seeing and hearing the witnesses; he referred to reservations he had about certain aspects of the claimant’s and Mr Sabharwal’s evidence, but he bore in mind, in his conclusion, the fact that the defendant, Mr Sood, had made a partnership agreement with Mr Sabharwal was entirely inconsistent with the case now put forward that he had a partnership with the claimant. In his evidence, Mr Sood claimed that he and Mr Sharma were partners, both in the restaurant business and the show project.

The judge also took into account an agreement made with Mr Sharma, that he would be made a director of the company which was to run the project and would be a shareholder, receiving a share of the profits, if there were any, in that way. That, found the judge, was “utterly inconsistent” with the case put forward that there was a partnership between Mr Sood and the claimant. The judge concluded that the case as to partnership did not “realistically get off the ground when one considers the documentation”. He stated that he was quite satisfied on the overall evidence that Mr Sood was acting as agent for himself and for the second defendant and/or the companies which they had set up. He had the full authority of Ms Kohli to look after their business interests.

The judge referred to certain acts of Ms Kohli in the business and concluded that she was a party to the loan transactions and liable for the payment. This, concluded the judge:

“…has been a transparent attempt by him [Mr Sood] and through him by both defendants to wriggle out of their just obligations, and it has transparently failed. I find that there never was any partnership in respect either of the restaurant or the Udit Narayan show in which the claimant was involved”.

Mr Ghaffar, who appears for the claimant today, also did so at the hearing. He has described what happened at the hearing insofar as it affects the procedural complaint made. In my judgment, the account which he has given is entirely borne out by the transcript which has now been supplied. The transcript is difficult to follow, in that the identities are not always correctly stated and the sequence is not correct, but with the help of Mr Ghaffar’s notes and a brief oral submission, we have been able to follow the sequence of events.

When Mr Ghaffar went to court for the claimant he was under the impression, as a result of instructions from his instructing solicitor, that counsel was acting only for Miss Kohli, but he quite rightly attempted to clarify the position at the beginning of the hearing and we have been referred by Mr Sood, in some detail, to the transcript. Mr Nusrat confirmed to Mr Ghaffar that he, Mr Nusrat, was acting for both the first and the second defendant. Mr Ghaffar, in opening the case, introduced Mr Nusrat in that way and there was no dissent, either from Mr Nusrat or from Mr Sood.

On the morning of the first day the claimant was cross-examined in considerable detail by Mr Nusrat and we have been referred to parts of the transcript. He clearly was cross-examined not on the more limited defence which was the particular concern of Ms Kohli, namely her lack of participation in the arrangements between Mr Sharma and Mr Sood, particularly any loan arrangement, but covering a much broader area and indeed the area which one would expect to cover for Mr Sood, having regard to the case which Mr Sood was seeking to put forward.

When the time for the short adjournment was reached, the judge referred, in his last intervention, to documents, stating, at page 163 of the transcript:

“Very well, I am going to call for disclosure on both sides of this joint bank account … immediately after lunch.”

On return after the short adjournment, Mr Nusrat told the judge: “I am only acting for Ms Kohli, but not Mr Sood, who is representing himself.” He appears to have had instructions during the short adjournment that that was the position; the solicitors were not in court, there may have been a telephone conversation with them. The request was then made that, following Mr Nusrat’s cross-examination of the claimant, Mr Sood himself should have the opportunity to cross-examine. That was opposed by Mr Ghaffar and submissions were made by both counsel. Mr Nusrat stated:

“… my client came quite late, as soon as he came, we came to the court, but I did tell my learned friend that from the start of the litigation that I am acting for both, and that no particular name had been mentioned, that I am only acting for Ms Kohli. These are very [word unclear] and you could, you know you could see from the date of the letter. It was very late evidence set down in this matter and no direct instruction had been taken, as we know from herself.

“Judge Hamilton: No, but did you check with Mr Sharma as to whether you were acting for him [he must mean Mr Sood] before we came into court?

“Mr Nusrat: This morning, yes I said that ‘Am I acting for both of you?’ at that time he didn’t say that I’m only acting for her. [Mr Sood said that counsel was only acting for Ms Kohli]

“Judge Hamilton: Well then if he did not divert from it now; I’ll allow him to withdraw your instructions at the end of this cross examination, but not before, otherwise he can cross-examine later witnesses.”

Mr Sood then intervened, and he relies on the fact that the judge said “Please sit down”, but it must be stated that that was only after the circumstances had been investigated. Neither Mr Nusrat nor his instructing solicitors have since supplied any further information which might be of assistance to the court, though that does not involve a criticism of them.

It is clear, in my judgment, first that Mr Nusrat thought, and rightly thought, that he was acting for both defendants. He understood that his cross-examination was to be conducted on that basis and it was, in fact, conducted on that basis. In my judgment, in those circumstances, the judge was entitled to say, as he did after the short adjournment and having heard further submissions, that he would not permit Mr Sood to conduct a second cross-examination of the claimant.

Mr Sood says that he had not wanted to be rude and allowed proceedings to continue during the morning without intervention for that reason. He does not dispute that he gave instructions to counsel, Mr Nusrat, in the course of Mr Nusrat’s cross-examination of the claimant. Mr Sood has, this morning, made submissions as to what he would have put to the claimant had he had the opportunity himself to cross-examine, and I refer to these for that reason and also because they do go to the merits of the case and to the alleged error of law by the judge. Mr Sood referred to a letter, which is at page 76 of Ms Kohli’s appeal bundle, from a firm of solicitors to Mr Sood, which claims a debt of £1,500 arising out of a business transaction and is headed “Rakesh Sood, Ravi Sharma and Suman Kohli”. Mr Sood submits that that is evidence that there was a partnership between them and he would have put that to the claimant.

In my judgment, that would have got Mr Sood’s case nowhere. The solicitors concerned cannot have been expected to know the details of the arrangements between the three people concerned. If there was further material that either Mr Sood or his solicitors had taken the matter up with Mr Sharma and underlined to him his duties which were claimed to arise as a partner, the point may have had relevance, but that was not the position, as Mr Sood accepts, and the heading of a letter from a firm of solicitors would have assisted the judge not at all in his consideration of the issue as to whether there were partnerships or loans.

The second point is in relation to a document which was in evidence (that is at page 51 of the bundle). It is a letter in which the claimant himself used the word “partner” in relation to the arrangement. The judge had that point well in mind and he referred to the document in two places in his judgment. I can see no further advantage which would have come to Mr Sood from putting the point to the claimant as to why he had used the word in the letter which he wrote. It was open to Mr Sood, in his own evidence and in his final submissions, to add the emphasis to the point which he gave it this morning, as he sought fit.

The third point is that Mr Sabharwal, who did have a partnership arrangement, made a substantial payment by cheque to Mr Sood and the cheque bounced. The claimant’s case was that he helped out Mr Sood by then paying a sum himself to enable Mr Sood’s venture to continue. The cheque did, however, clear on the second presentation a few days later and Mr Sood says that, had he had the opportunity to cross-examine, he would have put to the claimant that it was very surprising he had not there and then asked for the money back, if he was merely helping with a loan, until the position with the partner was sorted out. That is not a point which was made by Mr Sood in his detailed court statement in relation to these proceedings, which does mention the cheque bouncing but does not go on to make that point, nor, it appears, was it made either in evidence or in a closing submission.

The fourth point made is that he would like to have cross-examined as to why there was no discussion about repayment terms. The fifth point is that further bank statements would have been put and further questioning about the existence of a joint account and the court has been shown what appears to be a joint account for the restaurant, as well as for the other matter.

In my judgment, insofar as these points were not covered by counsel in his cross-examination, it could not realistically have made any difference to the judge’s findings expressed in the strong terms they were. Moreover, that is not the end of the matter, because while cross-examination is an important part of our legal processes, Mr Sood, having dispensed with the services of counsel and any help which that would have given him by way of guiding him in his evidence and in any closing submissions, having dispensed with that advantage, Mr Sood failed to make these points in the evidence which he gave.

We have not been through the transcript with a toothcomb but Mr Sood has been invited to refer us to places in the transcript where he says that he did take the points and he has not done so. He does say that the judge was short with him and did not give him a proper opportunity to give his evidence; that is not a ground of appeal, and having referred to the transcript, I see no merit in it in any event. The judge did stop Mr Sood from giving evidence on a point which the judge considered to be irrelevant and the judge was, in my view, entitled to take that view.

There was a request from the claimant before the hearing for further information about the alleged partnership and no opportunity was taken in response to that request to make the points on which Mr Sood now seeks to rely.

In my judgment the judge, as the tribunal of fact, was entitled to reach the conclusion he did. The arrangements, whatever view one takes of them, were not of the most business-like. The claimant is a show presenter who also has religious duties and little experience in business, and the judge formed the view he did about the relationship between the parties which I have cited. The judge was entitled to reach those findings of fact.

As to the procedural point, first, I conclude that the judge was entitled in the circumstances to disallow a second cross-examination of the claimant. The judge was entitled to take into account the understanding of everyone else present in court that Mr Nusrat was acting for Mr Sood, and he was entitled to take into account the length of cross-examination and the range of topics covered in it. The judge has to be fair to both parties and to keep cases, if possible, within the times for which they are listed. Taking an overall view, the judge was entitled to make the ruling he did.

Moreover, I am far from satisfied that any cross-examination of the claimant by Mr Sood could possibly have made any difference, and I have referred to some of the points raised. The judge must have had some of them in mind; on others they could not have been fundamental to the decision in the case. Moreover, Mr Sood did not take the opportunity, it seems, in his own evidence and in his closing submissions to make the points, the absence of putting which he now claims renders the entire process invalid.

Waller LJ, when granting leave, was concerned about the point of procedure, about the position of the second defendant and about the procedure in general. Mr Sood has had the opportunity to pursue those points. Waller LJ was no more than saying that there was an arguable case with a real prospect of success. Having heard Mr Sood at some length addressing the court courteously as he has, I am quite unable to find that this is a case where either substantive or procedural injustice has been done, and I am very far from persuaded that the court ought to accede to the defendant’s application that there should be a new trial.

I would dismiss this appeal.

LORD JUSTICE JONATHAN PARKER: I agree. I would only add a few words in relation to Mr Sood’s primary complaint, which is that the judge did not allow him to cross-examine the claimant, Mr Sharma. In granting permission to appeal, Waller LJ said in paragraph 9 of his judgment:

“I am troubled about that ruling in that, if counsel was not instructed on behalf of Mr Sood; it does not seem to me that one can fairly say that Mr Sood had cross-examined through counsel.”

In granting permission to appeal, Waller LJ did not have the benefit of seeing a transcript of the proceedings; that is an advantage which we have had. An examination of the transcript confirms that there is no question of any unfairness in the ruling which the judge made. Indeed, as it seems to me, a ruling in the contrary sense would have been, in the circumstances, manifestly unfair to the claimant. Mr Sood was present in court throughout. He must have heard Mr Ghaffar appearing for Mr Sharma introducing his opposite number, Mr Nusrat of counsel, as appearing for both defendants. Mr Sood then sat through an extensive cross-examination of the claimant by Mr Nusrat, in the course of which Mr Nusrat had put Mr Sood’s case. Indeed, it is, I think, accepted by Mr Sood that, from time to time, during that cross-examination, he gave instructions to Mr Nusrat.

Following the judge’s ruling after the short adjournment, Mr Nusrat continued his cross-examination of Mr Sharma. Thereafter, in accordance with the usual procedure, Mr Sood gave evidence himself, albeit that in the result the judge did not believe his evidence. In my judgment, it would have been manifestly unfair to allow Mr Sood, in effect, a second bite at the cherry, by allowing him to cross-examine the claimant at the conclusion of Mr Nusrat’s extensive cross-examination.

For those reasons I have no hesitation in agreeing with my Lord that the procedural complaint has no substance. As to the facts, I entirely agree that the judge was fully entitled to make the finding which he made and to reach the decision which he reached.

So I agree with my Lord, Lord Justice Pill, that this appeal should be dismissed.

LORD JUSTICE MOSES: I agree with both judgements.