Patel v Euro Investments (UK) Ltd & Ors

In this case the claimant Rajendra Chhotabhai Patel (“Raj”) is one of an Indian Gujerati family who emigrated to this country in 1977. For the last 25 years he has been occupied in the building/development field latterly in a loose family partnership centred on himself and his two brothers. As a result of their efforts the family has assembled a portfolio of nine investment properties all of which include living accommodation and some of which include shop premises or other commercial facilities. In addition Raj and his younger brother Avinash Patel (“Avinash”) own houses in which they live with their families. The properties have been bought with the assistance of loans secured on them. For the purposes of these proceedings the total equity in the family’s property portfolio has been valued at £1.5M approximately. The bulk of the family assets are held as nominee by Avinash.

The first defendant Euro Investments (UK) Limited (“Euro”) is a company whose shares are held by the second defendant Mr Devshi Gami (“Mr Gami”) and his wife. They are also its only directors. The third defendant, Mr Mohan Pinduria (“Mr Pinduria”) has, for the last year, been occupied as a self employed builder having previously worked for John Mowlem plc, the well-known and substantial building company, as an accountant. He is also a long-standing friend of Mr Gami. Mr Gami and his wife are also the sole shareholders in a company whose business is the contract manufacturing of electrical goods called General Electronics Services Ltd (“GES”) which was established in 1990 and has since been trading successfully. Mr Gami emigrated from India to this country in 1980. He is also from Gujerat. He accepts that his command of English is limited and he does not write the language. Accordingly, for the purpose of conducting his business, he requires the assistance of people more fluent than himself. By contrast Raj is fairly fluent in English and Mr Pinduria, another Gujerati, is very fluent.

It is Raj’s case that, in the course of a partnership or joint enterprise between himself, Mr Gami and Mr Pinduria the former British Rail Staff Association Club at Little Green Street Kentish Town London NW5 (“the Property”) was purchased for £1M in the name of Euro. It is his case that, by agreement with Mr Gami and Mr Pinduria, he is entitled to a 25% share of the profits realised as a result of the development and sale of the Property, Mr Gami and Mr Pinduria being entitled to shares of 50% and 25% respectively. Raj claims that he has been denied his share by Mr Gami who, with his wife, controls Euro and claims relief accordingly. Mr Pinduria has not played any formal part in the proceedings although he has been made a defendant. He has not filed a defence. In the proceedings, however, he is an ally of Mr Gami. He gave evidence in support of the other defendants. He was present throughout the proceedings and was given the opportunity, which he did not take up, to ask questions of witnesses. He made brief closing submissions in opposition to the claim.

Raj and Mr Gami first met as a result of the sale by Mr Gami of a property at 210 West Hendon Broadway (“No 210”) in October 1999. They met at the offices of the solicitor instructed by Mr Gami in the sale (“the First Meeting”). Raj was accompanied by Mr Marris his solicitor of many years latterly practising from the St Albans office of Messrs Wedlake Saint. It is common ground that in due course a price for the property was agreed and the sale was completed. There is an issue, however, of what actually took place at this meeting. It is Mr Gami’s account that in the course of the meeting he was asked by Raj why he was selling the property to which he answered that this was because he was looking for a larger property. More importantly Mr Gami says that Raj informed him that he was a building contractor and was going to be developing No 210 and also offered his services to Mr Gami should he in the future require a builder. Raj’s account of the meeting is that there was no such discussion with Mr Gami, rather the meeting concentrated on problems about the planning use to which the building could be put since it was his intention to develop it as a public house. Mr Marris who was called as a witness for the defence and accepts, in his witness statement, that he was present at this meeting, does not give evidence in support of Mr Gami’s account of the conversation that took place but was not questioned by either side about it.

Mr Gami alleges that, following the First Meeting he received some telephone calls from Raj asking whether he had bought other properties and again offering his services as a builder. These telephone conversations are denied by Raj.

It is common ground that early in the year 2000 Raj and Mr Gami met at No 210 (“the Second Meeting”) in respect of which property the building works by Raj to develop it into a public house had been largely completed though it is unclear whether trading had started. However there are widely diverging accounts of the circumstances of the meeting and what took place at it. It is Mr Gami’s account of the meeting that he came as a result of Raj’s invitation to him to look at the quality of the building works at No 210. He said that because he had arranged to see Mr Pinduria that day he asked Mr Pinduria to meet him at No 210. Mr Pinduria arrived while Mr Gami was being shown round the property by Raj and was briefly introduced to him. When the viewing was complete Mr Gami and Mr Pinduria left almost immediately. Mr Pinduria’s account was that he hardly spoke to Raj at all.

By contrast it was Raj’s account that one day while he was at No 210 he happened to notice Mr Gami looking in through a window. He went out and asked him to come in and see round the property. This Mr Gami did spending approximately 45 minutes doing so. He did not offer his services as a builder to Mr Gami and no further discussion of any importance took place. Mr Pinduria was not present at any stage.

There is again a sharp divergence of account as to what happened after the Second Meeting. Since it is during this period that the agreement or arrangement on which Raj relies to establish his claim for relief was allegedly arrived at, it is necessary to analyse the rival accounts of this period in some detail by reference to the pleadings, the documents, the witness statements and the oral evidence.

The next event on Mr Gami’s account of the facts is set out in paragraph 11 of his first witness statement as follows:-

“11

Later [i.e. after the Second Meeting at No 210] Mr Patel contacted me and invited me to view more work he had carried out at 146-148 Blackstock Road London. I visited the property with Mr Patel sometime between April and early June 2000 and again he offered his services as a building contractor on other projects I might have and I said I would consider him if I found a suitable property. There was no mention of Mr Patel investing or partnerships at these meetings.

12

I have had an opportunity to read paragraphs 17-10 of the particulars and reject the claim that myself, Mr Patel or Mr Pinduria discussed the possibility of either of them becoming partners with me. There were no conversations on the telephone and there was no conversation at 210 West Hendon Broadway about Mr Patel or Mr Pinduria becoming a partner in relation to any development project.

13

Both Mr Patel and Mr Pinduria knew I was considering buying a property as an investment. My conversations with Mr Patel were clearly on the basis that I would be purchasing a property and he was offering his services as a builder. My conversations with Mr Pinduria were on the basis that I was purchasing and he may have a played role.”

The meeting described in paragraph 11 of Mr Gami’s first witness statement is not dealt with by Raj in his witness statements nor was the account of it challenged in cross-examination on his behalf. I must assume, therefore, that its occurrence is accepted although it has played little if any part in the submissions which have been made to me. 146-148 Blackstock Road is one of the investment properties in the Patel family’s portfolio on which development works, it is accepted, have been carried out. I will refer to this meeting “the Blackstock Road meeting”.

On the 26^th July 2003, before he had instructed lawyers, Raj wrote to Mr Gami a letter in which he set out his complaints. This letter has been referred to in the proceedings as the “Letter before action”. The first description of the events following the Second Meeting to emerge from the claimant’s side is contained in the third, fourth and fifth paragraphs on the first page of that letter. Because this letter is also the first description by Raj of the history of the whole dispute it is convenient to set it out in full. I have sidelined those paragraphs which relate to the making of the agreement or arrangement alleged by Raj:-

“26/07/03

Re: British rail social club, Collage Rd, Kentish Town

Further to my meeting with you in your office in April. 2003, you told me that the planning appeal hearing is in May 2003. At the same time you told me of Mohan is not with you you can survive but it was essential that you have my help so that you could proceed and complete the above project which we started together.

Since then, by knowing myself that the appeal hearing is in May I have telephoned you to say that if there is any way that I can help I would be more than happy to do so. However, you did not answer or return any of my calls. Finally, I sent my wife to your office in early June as I could not come and see you myself due to a heavy work load. You promised my wife that you would telephone me within the next two days which did not happen. I then spoke to your wife a couple of times and left a message for you to call me back but again you failed to reply. Therefore, I feel that there is no other way that I can communicate with you and am being forced to finally write this letter.

I met you in October 2000 when I purchased one of your properties at 210 West Hendon Broadway to open a public house. You was very impressed with my work and the fact that I completely refurbished 210 West Hendon Broadway and opened up my business for the millennium year within 10 weeks.

Since then we had met a couple of times with Mohan and in this time Mohan decided that we should go into property developments. During those days, we met up one afternoon in my pub and decided that you will invest money in developing properties and that myself and Mohan would contribute as working partners. My expertise would have been my past experience and Mohan’s expertise was to advise the financial side of the aspect.

At this stage, neither you or Mohan had any experience of how the property sells in an auction and how the system works to obtain any sort of planning permission, Finally, we decided that because you are the investor you will remain as a 50 % shareholder and Mohan and myself will remain as 25% each.

After this, we went to an auction to purchase a property in Kings Cross which we believed to be of very good investment. Due to high bidding prices we were not able to purchase that property. Thereafter we started looking for another suitable property that we could purchase. In August 2001 we came across the property in Kentish Town. However, before we went to the auction I spoke to my solicitor Mr Anthony J.C Marris of Wedlake Saint. I explained to my solicitor that Myself, Yourself and Mohan were involved together as a team in future development of this property in Kentish Town that we were looking to buy.

I personally advised both my partners to purchase the property because I could see from my past experiences that a lot of financial benefit could be achieved., We then attended the auction in which you was standing on my right and Mr Mohan was standing on my left. When the bidding went to £980,000 you yourself stopped me from bidding any further on the property but I did not listen to you and instead I went on to bidding the property to £1 million. Today, after a lot of hard work and effort from both sides the property is worth £ 4.5 million.

As I remember correctly, we decided before purchasing the property that due to the claw back in the property with British Rail and the up lift value we should immediately put in the planning application. On the success of the planning application it was agreed that we would sell it back into the auction and proceed with the profits to further investments.

Thereafter, Myself, Yourself and Mohan went back to my solicitor whereby I introduced both you and Mohan to my solicitor and instructed him to proceed with the completion of the property. We then met with your bank in the following week and your bank manager agreed to proceed with the lending seen as though, you had a good track record and also because we were simply going to obtain the planning permission and then sell the property back in the auction.

After the completion, we had a meeting with the presence of Myself, Yourself and Mohan. In this meeting, your strategy suggested that we should buy British Rail claw back because it is a very unique property and it is a one in a million lifetime opportunity,. At that time, I raised a. question that it will be a lot of financial burden due to the fact that the claw back negotiation with British Rail could take a very long time. Even after making this point clear to you you still suggested that we continued to negotiate with British Rail.

From that moment onwards, as a partner I have never stopped spending money and, involving myself in other ways. I have spent time in maintaining the site which involved cleaning it up and, securing boundaries, I also attended the court with regards to the matter with the squatters. I am still communicating with the police and Mr Anani from London Borough of Camden with regards to this matter.

Furthermore, even though it was not in my financial capacity to do so I borrowed money from the bank against my house to pay claw back of £435,000, In this, I paid £50,000 to Wedlake Saint solicitors account. Furthermore, I gave you two cheques which amounted to £14,000 and I also paid for all the repairs which include fencing, blocking the property, telephone bills, travelling, photo copies etc. and have receipts which amount to £9,000.

As a partner, I played a very strong role in this investment especially in relation to the negotiation made with British Rail surveyor. I introduced all my connections for example, Chris McHugh (auctioneer) from, Chris & Co., Jim Lyons from Home View Estate and Nigel Smith a chartered surveyor. These are people who played a vital part in this investment to have become so successful.

As you know I have always been into property developing. I joined with you because you was willing to invest. I have not invested as much as you have but with the little money that I have invested I could have invested in a smaller project one that I could afford myself and would of been able to work my way up.

I must stress to you that even though it is a smaller investment from my behalf I am paying interest on that and again I would like to point out that if I was putting that same money which I was paying interest with into something smaller, of my own I would have made a profit.

Now I have found out that you had no curtesy to phone me and had to find out from Mr Anani who phoned me from London, Borough of Camden that the planning appeal has been successful on 23rd June 2003,

The only mistake I made in this whole situation was when you was giving Myself and Mohan shares and I suggested that we trusted you and that we kept the agreement as a gentleman's promise.

However, I am not writing to you in demand of anything on behalf of Mohan and I do not want you to think at any time that I am against you. All I want is that now the property has the planning permission you have a choice to either borrow further money which I am quite sure the bank will be willing to lend you and then to make me a reasonable offer or we get together and develop the property further.

The decision as always is entirely up to you. However, if you fail to agree that either of these two choices are possible I will be forced to take further action through the courts. I hope that this situation will not come to that and am sure we can resolve the problem on a mutual basis.

I look forward to hearing from you, very shortly.”

In the un-amended particulars of claim to which a statement of truth was attached on the 8^th March 2004. under the heading “the agreement”, extending between paragraphs 7 and 10 the events following the Second Meeting are described as follows:-

“7.

From about February 2000 Mr Patel, Mr Pinduria and Mr Gami had conversations in which they considered the possibility of entering into a property development scheme together. Initially these conversations took place by telephone although some meetings were held in the public house at 210 West Hendon Broadway.

8.

In or around April or May 2000 the Parties met at the said public house (“the Meeting”) and during the course of their conversation reached an agreement (“the Agreement”) as follows:

8.1

that the Parties would work together with a common goal of acquiring a suitable property for the purposes of development and/or profit;

8.2

that the Parties would share profits and losses in the following proportions:

8.2.1.

Mr Gami would take 50%;

8.2.2.

Mr Patel would take 25%;

8.2.3.

Mr Pinduria would take 25%;

8.3

that Mr Patel was to be project manager on account of his expertise and on account of his running a construction business;

8.4.

that Mr Gami would provide the funding for the property acquisition and development, subject to paragraph 8.5 below;

8.5.

that Mr Patel would, if necessary, offer a charge over the property at 51 Heber Road, NW2 6AB [his own house] in which he had a beneficial interest, legal title being vested in Mr Patel’s brother;

8.6.

that Mr Pinduria would maintain the books and records of the partnership as well as preparing accounts in connection with the partnership

8.7.

that the Parties would be entitled to be reimbursed from the joint venture the costs of their expenses properly incurred in pursuit of their said common goal.

9.

In the premises the Parties had entered into a partnership on the above terms for the purposes of property development (“the Partnership”).

10.

In the alternative, the Parties had entered into a contractual relationship on the same terms.”

Particulars of paragraph 7 were given as follows:-

“Mr Patel cannot recall the precise number of telephone calls. In the main, the conversations were between Mr Gami and Mr Patel. The gist of those conversations was that they should join together with Mr Pinduria to create a partnership.

Mr Patel cannot recall the precise number of meetings held. He believes there were at least three.

Mr Patel cannot recall the date of the meetings but they were some time in or after February 2000.

Mr Gami said that he was prepared to invest up to £500,000 in cash in property development. He said that Mr Patel had the knowledge and experience of property development and that they should go into partnership together with Mr Pinduria. The word “partnership” was specifically mentioned by Mr Gami. Mr Patel suggested the percentages which were agreed by the other parties.”

In Raj’s first witness statement dated 11^th January 2005 these events are described between paragraphs 19 and 25 as follows:-

“19

Some weeks after our chance meeting at 210 West Hendon Broadway, I received a telephone call from Mr Gami. Mr Gami said that he and his colleague, he mentioned the name Mohan Pinduria, were interested in working with me if the right property ever became available. He specifically mentioned creating a partnership on more than one occasion during this initial telephone conversation and in our subsequent telephone conversations. Our initial telephone conversation would have taken place in or about February 2000. Thereafter Mr Gami and I had a series of other telephone conversations. During these telephone conversations we continued our discussions regarding property projects and how we might work together. I do not believe I had met with Mr Pinduria at this stage.

20

Mr Gami and I conversed either in Gujerati or in English.

21

In or around April or May 2000 I met with Mr Gami and Mr Pinduria at my newly opened public house at 210 West Hendon Broadway. Mr Gami introduced me to Mr Pinduria as a friend. It was my understanding from what I was told that the Gami and Pinduria families come originally from the same part of India. It was also my understanding, again based on what I have been told, that Mr Pinduria has some sort of accountancy qualification although he does not practice as an accountant. I was also led to believe that Mr Pinduria assisted Mr Gami in the running of his electronic business.

22

During the meeting Mr Gami, Mr Pinduria and I discussed working together with the common aim of acquiring a suitable property for the purposes of development or profit. The three of us sat at a round table in the darts area of my pub. I faced the bar with my back towards the window. Mr Gami sat to my left while Mr Pinduria sat to my right. Mr Gami and Mr Pinduria each drank Holsten Pils while I drank Coke. I remember that they told me that they had to make a delivery to an address in Cambridgeshire and therefore we only had one drink each.

23

During this meeting which lasted approximately 45 minutes we discussed and agreed that we would join forces with a view to purchasing a property. We agreed that as I had direct experience of running a construction business, I would undertake the role of project manager. Mr Gami, for his part, would provide the finance - he having informed me that he was prepared to invest up to £500,000 in cash in property development. For his part, Mr Pinduria would maintain the books and records of the venture as well as preparing accounts. We also agreed that we would be entitled to reclaim from the joint venture any costs and expenses we incurred. I suggested that because Mr Gami would be providing finance for the venture it was only right that he should be entitled to a 50% share. For myself and Mr Pinduria I suggested 25% each. This was agreed by the three of us during the meeting. The word "partnership" was specifically mentioned by Mr Gami on a number of occasions during the course of our meeting and it is my case that the three of us entered into a partnership for the purposes of property development and profit.

24

We also discussed the possibility of acquiring any property in the name of a limited company but nothing was agreed on that subject at that stage.

25

The three of us had further meetings to discuss among other things suitable properties but our partnership was agreed at our initial meeting, the subject having already been discussed between Mr Gami and I during our telephone conversations referred to in paragraph 19 above.”

It will be seen that the descriptions of the events, allegedly resulting in some agreement or arrangement from these three sources, differ. In the letter before action it is said that the initiative to create a “partnership” came from Mr Pinduria (“Mohan”) in the course of the two meetings at an unspecified place and date between Raj, Mr Gami and Mr Pinduria. By contrast in the un-amended particulars of claim it is said that the agreement resulted initially from telephone conversations starting from about February 2000 and meetings at No 210 and finally at a meeting in April or May at No 210 when terms were agreed. In Raj’s first witness statement it is said that the agreement resulted from the initiative of Mr Gami who telephoned Raj after the Second Meeting to suggest such an arrangement. That suggestion was subsequently discussed in a number of subsequent telephone conversations but not at meetings. The final arrangement was agreed at a single meeting at No 210 between the three of them in April or May 2000. I will refer to the meeting alleged by Raj to have taken place in paragraph 21 of his witness statement as “the Third Meeting”.

Raj was cross-examined about this part of his account of the facts. (His answers appear on day two of the transcript between page 159 line 25 and page 168 line 22). It has to be said that his oral account of the circumstances from which the agreement he alleges emerged, was confused. The final position appears to me to be, that there was no discussion and certainly no agreement as to any partnership or joint venture at the Second Meeting. About two weeks later Mr Gami telephoned Raj with such a proposition and this resulted in the Third Meeting in March 2000 when Raj met Mr Pinduria for the first time. Between Mr Gami’s telephone call following the Second Meeting and the Third Meeting, there took place telephone conversations between Raj and Mr Gami, the number of which is unclear, during which a future joint enterprise in property development involving the three of them (“the alleged partners”) was discussed and, it seems, a preliminary agreement arrived at. Raj had not met Mr Pinduria at this time. It was not until the Third Meeting where he met Mr Pinduria for the first time that final agreement was reached including the partnership shares of 50% for Mr Gami and 25% each for Raj and Mr Pinduria. There were other meetings, always between the alleged partners at No 210 but these happened after the Third Meeting and involved the selection of properties of interest to the newly launched enterprise and included, it seems, agreement that the enterprise should be conducted through the medium of a limited company in which the alleged partners would have an interest.

That the Third Meeting took place at all seems to me to be denied by Mr Gami, see paragraph 12 of his witness statement, and also by Mr Pinduria. Mr Gami was cross-examined on this part of his account (on day 6 of the transcript between pages 19 and 26) in the course of which Mr Trace put to Mr Gami, the description of the Third Meeting set out between paragraphs 19 and 26 of Raj’s witness statement which I have quoted above. He was met with denials of his description of the events being put but, apparently, an admission that a meeting took place at No 210 but at which different events occurred. On re-reading those passages in the transcript it is now clear to me that Mr Trace and Mr Gami were at cross purposes. Mr Gami thought that what Mr Trace was putting to him was Raj’s version of the Second Meeting. Mr Gami in his answers repeats and asserts his description of the Second Meeting summarised at paragraph 6 above. This mistake may have flowed from Mr Gami’s doubtful ability to read the paragraphs in Raj’s witness statement as they were being put to him. However it is clear from his witness statement that had he fully appreciated what was being put to him he would have denied that the meeting took place at all mirroring Mr Pinduria’s evidence.

From Mr Pinduria’s cross-examination on this subject it emerges that he only accepted having visited No 210 once and that was on the occasion of the Second Meeting in accordance with Mr Gami’s description of that meeting. He accepts that there were several meetings between himself Raj and Mr Gami to discuss the development of the Property but these were later and at Mr Gami’s offices or at other venues which I will later describe but not at No 210.

The next material event which all are agreed took place was the attendance of Raj, Mr Gami and Mr Pinduria at a property auction on an unidentified date in June 2000 in order to bid for a hotel property which was for sale. It is common ground that Raj, because of his experience, was deputed to be the actual bidder and that the bidding quickly rose above the limit which had been set. It is not clear from the evidence whether Raj actually made any bids before this happened. This auction was referred to in the course of the proceedings as “the First Auction”. It is Raj’s uncontested evidence at paragraph 27 of his witness statement that on the way back from the First Auction he took Mr Gami and Mr Pinduria to visit his family’s development at Blackstock Road. Again, however, there are divergent descriptions of the circumstances which brought the parties to the auction and what took place at it.

It was Raj’s evidence that he identified the property through an auction catalogue and brought it to the attention of Mr Gami and Mr Pinduria. He said that they discussed the property in the course of a meeting at Mr Gami’s office and an agreed upper limit of £750,000 was fixed after he had taken the other two on a visit to the site.

Mr Gami, in his witness statement does not describe how he came to know of the Kings Cross property but his case is that he identified it and took Raj to the auction with him because it was clear that building works would be required on the property, if they succeeded in purchasing it, in which Raj might be interested. He said that he fixed a limit of £450,000 for the bidding which he asked Raj to conduct on his behalf because he did not “feel comfortable going to auctions alone and I normally take someone with me who can help in bidding and with paperwork.”

In the course of his cross-examination Mr Gami accepted that he took Raj on a visit to the site and to the First Auction for the benefit of his advice as an expert. When asked in what capacity he did not reply directly but said that he had in mind that Raj might “come in on some building work as project [sic]”. Mr Pinduria said that he regarded his role at the auction as that of a “spectator”.

The Property was purchased at an auction which took place on the 12^th July 2000 (“the Second Auction”) attended by Raj, Mr Gami and Mr Pinduria for a price of £1M. The actual bidding was done again by Raj in the name of GES and the deposit of £100,000 was paid by GES. However, again, the circumstances in which the parties attended the auction, what took place at the auction and the events before and after the auction are the subject of substantial controversy.

Between paragraphs 29 and 44 of this witness statement Raj sets out his account of the events leading up to the Second Auction. Briefly summarised it is Raj’s case that he became aware that the Property was for sale as a result of receiving, independently, an auction catalogue from Messrs Allsop & Co. He then visited the Property by himself and immediately saw its development potential. He spotted, from the Special Conditions of Sale that the sale was subject to “clawback” provisions entitling the vendor to 50% of any profits made as a result of a sale of the Property within a specified period. But for the existence of the “partnership” which Raj alleges, he would have recommended that his family property business purchased it which he says he was confident that it would have had the resources to do.

The day after he inspected the Property he told Mr Gami that he had identified a suitable development property. At his request they met at No 210 and Raj drove Mr Gami to the Property. When asked by Mr Gami for his assessment of the price Raj estimated that it would be more than £1M. Mr Gami agreed, on the recommendation of Raj, that Mr Marris should be instructed for the purposes of the intended purchase. In Mr Gami’s presence Raj, using his mobile telephone, rang Mr Marris to inform him of the proposed plan saying, in the presence of Mr Gami, that the Property would be purchased by a partnership of which he and Mr Gami were members. He cannot remember whether, in the course of this call, he mentioned that Mr Pinduria was to be a third partner. Mr Marris was instructed to carry out searches on title in respect of the Property.

The following day Raj arranged a meeting with Mr Marris for the next day which was attended by himself, Mr Gami and Mr Pinduria. It took place at around lunchtime. On the way to the meeting Raj recommended that they should also buy three other plots coming for sale at the same auction. At the start of the meeting Raj introduced Mr Gami and Mr Pinduria to Mr Marris as his partners and told him that their interests in the partnership would be as to 50% Mr Gami, the provider of finance for the purchase, and as to 25% each to himself and Mr Pinduria. He told Mr Marris that the vehicle to acquire and develop the Property would be a new company but in the meantime Mr Gami’s company GES would try to buy the Property in advance of the auction. In due course Mr Marris, on instructions, sent a letter to Allsops dated 7^th July 2000 offering £435,000 plus VAT for four plots of land including the Property. In the course of the meeting Mr Marris explained the meaning and effect of the clawback provisions. “After a day or so” Raj telephoned Mr Marris to be told that the offer contained in the 7^th July letter had been rejected. Without, apparently, consulting either Mr Gami or Mr Pinduria, Raj instructed Mr Marris to send a renewed offer at a figure between £700,000 and £750,000, which he says was done but that offer was also rejected.

Mr Gami describes the same events between paragraphs 18 and 21 of his witness statement. Because of their brevity I will set them out in full as follows:-

“18.

Soon after that auction [i.e. the First Auction] Mr Pinduria passed me a brochure, which contained details of the property at Kentish Town. I recall discussing the property briefly with Mr Pinduria and he pointed out the clawback. I was interested and wanted more information. I contacted Mr Patel as there were several potential options for the property and I believed he might have been suitable to do some of the work. There were also a few other properties in the brochure with potential so I asked Mr Patel if he would come with me to visit these properties. We visited these properties and it was clear to me that the Kentish Town property had the most potential but I had some questions about change of use and so on. I said to Mr Patel that I wanted to talk to a solicitor for an opinion and he suggested using Mr A Marris who had acted for him for years. I had met Mr Marris when selling 210 West Hendon and he seemed competent so I accepted this suggestion. Mr Patel contacted Mr A Marris to make the appointment.

19.

Mr Patel did not express any interest in the property save as a building contractor.

20.

I recall meeting Mr A Marris before the auction. I went to see him with Mr Patel and Mr Pinduria. Mr Marris asked who was the client and I said it would be me and GES. Mr Pinduria and Mr Patel_. were present and they did not say they were also the clients or mention anything about partnership.

21.

On the day of the auction I recall that Mr Pinduria and I approached the seller’s solicitors to obtain further details on the clawback, and I discussed it further with Mr Pinduria who explained how the clawback worked. Once he had explained it to me I was satisfied that the property would be a good investment at the right price.”

In the course of his cross-examination Raj extended his evidence by saying that at this stage the parties were not considering buying out the equitable charge by which the clawback provisions were secured on the Property but rather that, having obtained planning permission, the Property would be put back on the market for sale. It was also his evidence that Mr Gami fixed a bidding limit of £980,000 for the Property. Mr Gami’s case, which extended beyond that set out in his witness statement was put to Raj, in particular, Mr Gami’s account of the first meeting with Mr Marris, at the commencement of which he suggested that Mr Marris had asked who the client was, to be told that it was himself and GES: that he was interested in purchasing the four plots: that there was no mention of partnership or purchase by a new company. In this respect attention was drawn to paragraph 19 of the amended particulars of claim which pleads as follows:-

“19

A day after the second auction, the parties attended Mr Marris’ offices and informed him that the three of them had purchased the Property but that the purchase vehicle was to be a limited company. Mr Marris was informed of the 50: 25: 25 ownership of the scheme and that he would be informed of the name of the purchasing company shortly thereafter.” [at paragraph 17 it was pleaded that prior to the meeting Raj had suggested that it would be preferable that the vehicle for the purchase should be a limited company].

It was further put to Raj that the purpose of the meeting was mainly concerned with obtaining Mr Marris’ advice as to the effect of the clawback arrangement and that no revised offer resulted from it. Raj rejected all these suggestions.

Avinash who gave evidence for his brother described, in his witness statement, and in the course of his cross-examination how Raj told him on the telephone of the Property and how he had formed a partnership of himself, Mr Gami and Mr Pinduria, naming them, to acquire and develop it. He described how Raj told him of the equitable charge on the Property securing the vendor’s right to receive half of any development profits as a result of the obtaining of planning permission and the partnership’s plans to buy this out. He described how Raj took him to view the Property before the auction at which it was to be sold, and how Raj said that but for the partnership he would have wished to buy the Property himself. Avinash was confident that the family could have raised the money to enable him to do so.

In the course of his cross-examination Mr Gami said that it was he who found the Property when inspecting a catalogue provided to him by Mr Pinduria and that Mr Pinduria drew his attention to the “clawback” rights to which it was subject. He said he invited Raj to go with him to visit the site because he needed advice about the possible reopening of the club premises on it and also the name of a solicitor to advise him about the effect of the clawback provisions. Raj suggested Mr Marris. As to what took place at the meeting at Mr Marris’ office that ensued he gave evidence backing the suggestions which had been put to Raj when he was cross-examined. In particular he rejected any suggestion that there had been a representation that the purchase was part of a partnership enterprise in which he, Mr Pinduria and Raj were partners and as to their respective partnership shares.

Mr Pinduria does not deal with the events leading up to the Second Auction in his witness statement. In the course of his cross-examination the contents of paragraph 40 of Raj’s witness statement, which contains Raj’s description of that part of the meeting with Mr Marris before the Second Auction in which he describes introducing Mr Gami and Mr Pinduria to Mr Marris as his partners in the purchase of the Property and their respective partnership shares, was put to him. He rejected it as “absolute rubbish”.

Mr Marris describes the events leading up to the Second Auction with which he was concerned, namely, his meetings with Raj Mr Gami and Mr Pinduria, in paragraph 3 of his witness statement. From this it emerges that there were in fact two meetings. In the course of his cross-examination on day 7 of the transcript at page 56/57 Mr Marris is recorded as saying:-

“My Lord, I am satisfied that there were two meetings prior, and I say this in my witness statement, to the auction. The first meeting was so that I could read initially the clawback provisions and so on and then submit that offer. It may well be that after that when this offer was rejected, that I talked to someone on the phone at Allsops and increased the offer, but I know that the response was that because it was a mortgagee selling that they were anxious that it should go to the room.”

It was Mr Marris’ evidence that he was never instructed to do searches properly so called, but he regarded his primary role as satisfying himself that the vendor was capable of giving a reasonable title and explaining to the parties what the effect of the clawback provisions was. In the course of his cross-examination he said that he did not recollect being introduced to Mr Gami and Mr Pinduria as Raj’s partners in the purchase and development of the Property. When examined in chief Mr Marris did say that he had a recollection of Raj mentioning shares of 50%, 25 % and 25 % in the course of a meeting where Mr Gami and Mr Pinduria were present at his office at around the time of the auction. This is obviously an important piece of evidence and I will return to it later in this judgment. Otherwise Mr Marris was clear that his instructions were that Mr Gami wished to buy the Property through GES, his company, and his instructions were to put forward an offer to purchase the Property (and the other three plots) on behalf of GES.

The Second Auction took place on the 12^th July. It is common ground that it was attended by Raj, Mr Gami and Mr Pinduria. Raj was again delegated the task of actually bidding. It is Raj’s case that Mr Gami had fixed a bidding ceiling of £980,000 whereas Mr Gami says that the limit was £1M. Mr Gami’s evidence of the course of the bidding is that there was a counter-bidder at £990,000. Raj’s account is that when the bidding reached £980,000 Mr Gami instructed him to cease but he disregarded that instruction. Until that moment the bidding had been going in jumps of £10,000 but he decided to double this, and bid £1M to which there was no counter-bid. Mr Pinduria denies that Mr Gami instructed Raj to stop bidding at £980,000 but agrees with Raj as to the final stages of the bidding. There is a rare piece of common ground between the parties that after the bidding ceased Mr Satish Patel, an architect, came over to talk to them and offer his services as an architect in the development of the Property revealing that he was one of the counter-bidders. Mr Pinduria completed the contract details in the name of GES and handed over two cheques in payment of the deposit.

After the auction Raj telephoned Mr Marris to report their success. Mr Marris would not accept that this was reported as a successful bid by the alleged partners. He was clear that it was reported as a successful bid by GES. Raj then made an appointment for all three to attend a further meeting at Mr Marris’ office the following day. There is even a dispute as to whether the three alleged partners went for a celebratory drink at Raj’s pub or whether they parted, Mr Gami and Mr Pinduria going to the local Hindu Temple.

At the meeting the following day at Mr Marris’ office it is common ground that instructions were given to him, according to Mr Gami and contrary to Raj’s case, for the first time, that the purchase was to be made in the name of a company of which Mr Gami and his wife were to be the only directors and shareholders. It is Mr Gami and Mr Pinduria’s evidence that at this meeting no question of partnership was raised nor of shares in the purchasing company being distributed to Raj or Mr Pinduria. In his witness statement at paragraph 51 Raj does not assert that those matters were raised at this meeting.

The next material event was the visit by Mr Brown of the National Westminster Bank to the Property on the 19^th July 2000. It is common ground that the purchase price of the Property was to be entirely provided and financed by Mr Gami. It is Raj’s case, denied by Mr Gami, that by way of support he offered a second charge over his house at 51 Heber Road as security for any borrowing if it were required. Mr Brown’s visit was so that he could assess for himself the development prospects of the Property.

Raj’s account of the meeting with Mr Brown at the Property is set out between paragraphs 53 and 56 of his witness statement. In summary, shortly after the post auction meeting at Mr Marris’ office, Mr Gami told him that an approach to his bank, the National Westminster Bank to finance the bulk of the purchase price, had been favourably received by his Corporate manager at the Bank, Mr Philip Brown. At Raj’s suggestion Mr Brown was invited to visit the site. Raj asked Mr Pinduria to prepare a business plan for the development to show Mr Brown and invited him to attend the meeting also. (Mr Pinduria accepted that a document produced in evidence was the business plan prepared by him). The meeting was arranged for the following day when Raj, Mr Gami and Mr Pinduria met at the Property to discuss the business plan before Mr Brown arrived. When he did so Mr Gami introduced Mr Pinduria and Raj as his partners. Raj showed Mr Brown round the Property. Afterwards they all adjourned to a nearby public house. Raj explained to Mr Brown the financing which was required. He had not discussed his proposals with Mr Gami or Mr Pinduria in advance but they did not object. Mr Brown inquired of Raj about his previous experience in property development and was impressed by the answer he received. Raj asked that any offer letter from the bank be sent to Mr Marris.

Mr Gami and Mr Pinduria’s account of the meeting with Mr Brown contained in their witness statements paints a very different picture. It was Mr Gami who arranged for Mr Brown to visit the site and he asked Mr Pinduria also to attend having, at his request, prepared financial projections in relation to the project. Mr Patel was at the Property when the meeting took place, fortuitously being engaged in surveying it for the purpose of making it secure and keeping it tidy. At Mr Gami’s invitation Raj joined them at the pub after the inspection of the Property was over. The financial discussions were entirely between Mr Brown and Mr Gami.

In the course of his cross-examination Mr Gami denied introducing Raj and Mr Pinduria to Mr Brown as his partners. He was, however, prepared to accept that in the course of the meeting Mr Brown discussed Raj’s experience as the manager of a club, since it was proposed that, pending planning permission and development, the club premises, comprised in the Property should be reopened. He also accepted that there was limited discussion of Raj’s experience as a property developer because it was “relevant to the development of the Property”.

Mr Brown was a witness for the defence. At paragraph 8 of his witness statement he describes how he had already attended a meeting with Mr Gami at the Property in July “when I assembled the credit assessment.” This meeting is not referred to in Mr Gami’s witness statement and neither he nor Mr Brown were cross-examined about it. As to the meeting on the 17^th July the picture he paints is of a meeting which lasted between one and two hours which was primarily taken up with financial discussions between himself and Mr Gami. He refers to “two other gentlemen being present whom he did “not recall… saying much if anything….” He said he did not recall additional security being offered by anyone apart from Mr Gami.

Mr Brown willingly conceded that, amongst the hundreds of similar meetings that he had held over the intervening years, his recollection of this particular meeting was very limited. He conceded that he might well have discussed with Raj his experience both as club manager and property developer. He accepted that his recollection did not extend far beyond the text of the credit assessment which he had prepared dated 19^th July 2000 and which was in evidence.

This document consists of a number of separate numbered paragraphs divided into bullet points with subject headings. The first four paragraphs are almost entirely taken up with information about Mr Gami’s business and GES. In the fourth paragraph Raj gets a mention as the intended manager of the reopened club. Euro is mentioned for the first time in the fifth paragraph as the purchaser of the Property for which the finance is required. It notes that “they” intend to apply for planning permission, that “they” require a further £750,000 and that “they” require bridging finance for initial VAT. The seventh paragraph under the heading “risk assessment both credit and non credit related issues” the following passages appear:-

“● I had been aware that DG [Mr Gami] was attending auctions with a view to purchasing a further investment property, we had discussed one two weeks ago where he was prepared to bid to £.5M…

● Long standing customer with an excellent track record.

Core electronics business is very sound with a good financial covenant.

Certainly the sort of client I would want to support at the highest level.

● Adequate means clear assets to support borrowing at this level.

● Some experience in the property market and also able to bring in expertise (Raj Patel) to see the plan through.

● Other business interests to fall back upon giving him means to see the bank out if required.

● Well thought out proposal supported with projections, and a full and frank discussion with all interested parties.

● Potential exit plan is very simple if all else fails he can sell the plot with planning permission and still make a profit. Or if it is not granted then he can trade out with the club.”

The credit assessment shows the customer as being three entities GES, Euro, and Mr Gami. The overall impression that I have of it is that it gives support to Mr Brown’s evidence in his witness statement and under cross-examination that he did not think that he was dealing with a partnership. The purpose of the assessment appears to me to be an examination of whether Mr Gami and his companies would be able, from their resources, to service and repay a £750,000 loan. Mr Pinduria is not mentioned and Raj is only mentioned as being available to Mr Gami or his companies to provide expertise in two fields, club management and property development. In cross-examination Mr Brown said he had no recollection of being introduced to Mr Pinduria and Raj as partners. It was his unchallenged evidence that, had he understood that the bank’s client was a partnership or alternatively a company in which persons other than Mr Gami and his wife would be shareholders or would have a material interest, the bank’s treatment of their customer would have been entirely different. The bank’s records would have been different and there would in all probability have been credit checks on Raj and Mr Pinduria. My overall impression of this document is not altered by the fact that in the fifth paragraph the word “they” is used as I have indicated and in the penultimate bullet point there is a reference to a “full and frank discussion with all interested parties.” It may well be that the use of these words refers to discussions with those present at the meeting but that does not necessarily point to the discussion having taken place between partners. In due course the Bank made the advance.

The sale of the Property was by The British Railways Board (“The Board”) and was completed on the 9^th August 2000. Meanwhile an approach had been made by Messrs Wedlake Saint to Messrs Cobbetts, solicitors for the Board, to purchase the release of the equitable charge on the Property securing the enforcement of the clawback provisions in the contract of sale for the benefit of the Board.

At paragraph 57 of his witness statement Raj describes meeting the surveyor who Mr Gami told him would be visiting the Property to value it for the Bank. There is a dispute as to whether Mr Gami also met the surveyor and explained the proposed development to him or whether Raj did this.

At paragraph 58 and 59 of his witness statement Raj describes a meeting initiated by him between himself Mr Gami and Mr Pinduria and representatives of the Bank of Ireland as an alternative financier for the purchase of the Property. Raj describes how he presented the financing requirements to the Bank. In the result, however, the National Westminster Bank responded positively and the approach to the Bank of Ireland was discontinued. Neither Mr Gami nor Mr Pinduria deal with this incident in their witness statements.

However it was put to Raj that whereas the suggestion of an approach to the Bank of Ireland came from him it was Mr Gami’s decision to look for alternative financiers. Mr Gami presented the finance requirements to the Bank not Raj.

At paragraphs 60 and 61 of his witness statement Raj describes how, at about this time, he arranged for a meeting between himself Mr Gami and Mr Pinduria with a Mr Roche an architect who had been recommended to him as suitable to be employed for the development of the Property. However at paragraph 63 he describes how Mr Gami, shortly after completion telephoned him “to suggest” the employment of Mr Satish Patel (“Satish”) as architect for the development. Raj describes how he accepted Mr Gami’s suggestion although he would have preferred Mr Roche because Mr Gami “held the largest stake in the partnership”. He telephoned Mr Roche to inform him.

Again neither Mr Gami nor Mr Pinduria refer to these incidents in their witness statements. However it was put to Raj in cross-examination that no instructions were given to Mr Roche at the meeting which he rejected asserting that such instructions to prepare plans were given on behalf of the alleged partners. In due course Mr Roche sued Raj, Mr Gami and Mr Pinduria for a small sum of expenses in the County Court and Mr Gami accepts that he entrusted the defence of those proceedings to Raj.

The Peter Tigg Partnership Ltd of which Mr Peter Tigg and Satish were directors was formally retained by Euro by an agreement dated the 22^nd September 2000. It is common ground that besides design work and dealing with the planning authorities in order to obtain planning permission, to Satish was delegated the job of conducting the negotiations with the Board to obtain the release of the equitable charge over the Property securing the clawback provisions.

Mr Marris and Wedlake Saint were instructed to assist in the development of the Property generally and, in particular, in obtaining the release of the Board’s equitable charge and the obtaining of planning permission. There is an issue whether those instructions came from Mr Gami and Euro, as the defendants allege, or whether they came from the alleged partners, as Raj asserts. Mr Marris, who gave evidence for the defence, says that his understanding was always that his instructions came from Mr Gami and GES initially, and, after the purchase of the Property, from Euro, which was owned and controlled by Mr Gami and his wife. Like Mr Brown he says that had he understood that the acquisition and development of the Property was a partnership enterprise between Raj, Mr Gami and Mr Pinduria, the files which were opened by Wedlake Saint when their instructions were received would have been opened in an entirely different form from the form in which they were actually opened.

In the course of his cross-examination (on day 6 of the transcript page 111) Mr Gami appears to accept that Mr Marris was both his and Raj’s solicitor. It is not clear whether Mr Gami was saying that Mr Marris was continuing to act for Raj in matters concerning the development of the Property. He had just acknowledged that he was introduced to Mr Marris by Raj who had had a long previous relationship with him.

In his written submissions in closing Mr Trace for Raj drew my attention to various documents, mostly from Mr Marris’ file which he submitted tended to support his contention that Mr Marris was at all material times acting for the alleged partners.

His first example was an attendance note of Mr Marris’ firm showing Mr Pinduria giving instructions on the 17^th July 2000 with relation to GES deposit payment in the absence of Mr Marris on holiday. The second example is a similar attendance note from Mr Pinduria relating to the clawback negotiations.

The third example was a letter of 24^th July 2000 by Wedlake Saint to Messrs Cobbetts the Boards solicitors in the course of the negotiations for the release of the Board’s equitable charge. So far as material this letter reads:-

“We refer to the above matter and our recent telephone conversation and confirm that it is our clients intention to continue to operate the Social Club as a social club. They anticipate not inconsiderable difficulty in seeking any change of use from D2.

In order however to fund this, they are seeking to develop the land to the north west of the Club. By develop we mean seek the relevant permissions and then sell on the land for development. It appears to us that it would be more appropriate for the equitable charge to be discharged against the whole of the Property against payment of the sum calculated as per the conveyance out of the sale proceeds of the land to be developed subject either to agreement as to a minimum payment or a minimum reserve price for the Property if it were to go to auction.

Dealing with the matter appears to have merits to all parties, namely to your clients in that they will receive a substantial further payment in the very near future, secondly to any developer that the charge is then lifted from the Property so that they are free to develop leaving our clients free to develop their club from any surplus sale proceeds thereby enhancing the asset to the local community which the Local Authority want to see being preserved.”

This letter is used by Mr Trace to demonstrate that the parties had two separate intentions in acquiring the Property, the first, to obtain planning permission and build out any development for which they got permission and sell, the second, to obtain planning permission and immediately put the Property back on the market for sale. It was Mr Trace’s submission, with which I will deal later in this judgment, that the second intention was inconsistent with Mr Gami’s assertion that Raj was assisting Mr Gami in his acquisition of the Property with a view to obtaining at least a share of the building contract work if and when planning permission was obtained. For present purposes Mr Trace points to the use in this letter and in other letters, when referring to those instructing them, to “clients” in the plural. (See also their letter of the 2^nd August 2000).

Another example is an attendance note of Mr Marris of 31^st July 2000 showing two attendances on Mr Pinduria advising him on VAT registration. When this example was put to Mr Marris he also accepted that he received instructions from Euro through Raj.

A further example is an attendance note of Mr Marris of 24^th August 2000 showing him attending Mr & Mrs Gami and Raj to discuss the negotiations for the release of the Board’s equitable charge.

In Mr Marris’ file was an undated attendance note on Mr Gami, Mr Pinduria and Raj recording further discussions for the release of the Board’s charge. When this attendance note was put to Mr Marris he accepted that his impression at the time was that Raj had “considerable involvement” in relation to these negotiations and this was an impression he obtained from all parties.

There is a further attendance note of Mr Marris dated 26^th January 2001 attending the alleged partners, Mr Marris was engaged for three hours again on the subject of the negotiations with the Board.

There is a further attendance note of the 2^nd April 2001 of Wedlake Saint recording a complaint about the condition of the Property from the local authority. It is marked “re Patel – London Railway Cottage, Middle College Lane” (the Property). This matter is raised in a further attendance note of Mr Marris of 30^th April recording an attendance on Raj where also the progress of the negotiations with the Board are mentioned. As we will see those negotiations succeeded on 1^st June 2001.

Finally there is a long attendance note of Mr Marris of 14^th August 2001 attending on Raj on the subject of the withdrawal of the planning application pending completion of the buy out of the Board’s equitable charge and recording a receipt of a telephone call from Mr Gami from the United States on the same subject.

At paragraph 50 I have described the appointment of Satish as architect for the development project. He was a witness for the defence. In his witness statement he describes how all instructions came to him directly from Mr Gami. In cross-examination he accepted that at the meeting when his firm was retained on 22^nd September 2000 both Raj and Mr Pinduria were present and Raj is shown as a witness to Mr Gami’s signature on the memorandum of agreement. When cross-examined about Raj’s presence at this meeting Mr Gami accepted that he was there because he was “part of the development”.

Satish says that “initial meetings with Mr Gami were accompanied by Raj and Mr Pinduria.” Under cross-examination he accepted that there were several subsequent meetings with Mr Gami where Raj and Mr Pinduria were present. At paragraph 13 of his witness statement he says that Raj stopped attending these meetings in about August 2002 but in cross-examination he accepted that his firm’s note of the 28^th October 2002 shows Raj attending a meeting with himself, Mr Gami and Mr Pinduria on that date.

At paragraph 4 of his witness statement he says this:-

“4

Mr Gami told me that Raj Patel and Mr Pinduria would be assisting him in the project, and said that Mr Raj Patel had construction experience and so he might be involved either as a contractor at a later stage or in assisting the construction management once planning permission was obtained from the local authority, and he said that Mr Pinduria had worked as an accountant and would be useful in that capacity.”

He continues at paragraph 6:-

“6

Most of my meetings with Mr Gami were at his offices. Mr Patel and Mr Pinduria attended these meetings. We discussed many aspects of the project including planning, the clawback provision, and works to be done. At no time during any these many conversations did Mr Raj Patel ever say that he had any share in the project or Euro Investments. At one of the earliest meetings Mr Raj Patel said that his involvement was in respect of the construction….”

During examination in chief, Raj’s evidence that at one of the early meetings with Satish, Raj had told him that there was a partnership between himself Mr Gami and Mr Pinduria, was put to Satish and he said that he had no recollection of anything like this happening. He also denied that in the course of meals at Mina Patel’s restaurant, which he accepted took place, he had witnessed Mr Gami and Mr Pinduria being introduced as Raj’s partners.

At paragraph 7 of his witness statement Satish describes his instructions to conduct the negotiations with British Rail to buy out the Board’s equitable charge. He describes how Mr Gami, Raj and Mr Pinduria were present with him at the first meeting with representatives of the Board. It is not in issue that Raj did not attend any of the subsequent negotiations. When Mr Marris’ statement that Raj was heavily involved in the negotiations with the Board was put to Satish in cross-examination he said that from his point of view that did not appear to be the case.

Mr Trace drew my attention to a letter of the 5^th October 2000 in which Satish writes to Mr Holman a representative of the Board saying in the first paragraph “with reference to our telephone conversation I have now discussed the matter with my clients on the basis of which we put forward the following offer in respect of the clawback clause….” He draws attention to the word “clients” in the plural in that and other parts of the letter. Mr Gami accepted in cross-examination that he would have seen this letter and that the word “clients” referred to Mr Pinduria and Raj. Mr Trace drew my attention to other letters of Satish referring to “my clients”.

At paragraph 9 of his witness statement Satish says:-

“9

I do not recall Mr Raj Patel or Mr Pinduria attending any of my meetings with the planning officers.. Mr Raj Patel did not liase with Camden Council in relation to planning permission or the appeal. I conducted all dealings, correspondence and discussions with the planning officers and conducted the appeal with Mr Gami’s planning consultant.”

In cross-examination Satish was prepared to accept that Raj actually delivered the planning application to Camden Council and that it was Raj who actually went to the Council to retrieve it when it was discovered that the settlement with the Board had not been finally completed. In re-examination Satish described the task given to him by his appointment as architect of the project as extending over three years involving undertaking four main tasks. These were the design of the scheme, the negotiation of the buy out of the Board’s equitable charge, the applications for planning permission (of which there were in fact three) and the successful appeal against refusal. It was his evidence that there was little that his clients could contribute to his firm’s performance of the tasks entrusted to it. All the research and inquiries involved were undertaken by his firm or the various consultants including Mr Blackwell who were appointed to assist them.

Mr Trace drew my attention to two letters written by Satish to Mr Blackwell of the 12^th July and 26^th September 2002. In both these letters there are references to the alleged partners as “Mr Gami and his partners”. The subject of both these letters are proposed and actual appeals against decisions of the planning authority. Both letters were copied to Mr Gami and in cross-examination he accepted that he took no steps to correct the impression so given. Satish’s explanation for the letters is contained at paragraph 14 of his witness statement were he says, having referred to the letters:-

“I knew that Mr Raj Patel and Mr Pinduria were involved in discussions and they hoped to have some involvement in the building works if planning permission was obtained and so I referred to them as partners. I could not have described them as friends. I certainly did not think that they had any shares in the site or the project, and that they were partners in the legal sense of that word. I did not give much though to the words I should use to describe them and their involvement. The letter [sic] was not concerned with questions of who owned the site and had shares in the project. If it had been and I had thought carefully about how I should describe their involvement in the site and the project, I would not have described them as partners.”

At paragraph 15 of his witness statement Satish describes how at the end of 2002 he asked Mr Gami if Raj or Mr Pinduria would help him financially and he, Mr Gami, had replied that they were not able to do so. Satish then describes how he offered Mr Gami the assistance of his firm in finding “potential partners”. He says that “at no time during these conversations did Mr Gami ever say or suggest that Raj was his partner.”

Satish accepted that Raj was part of the discussions concerning the decision temporarily to withdraw the planning application in August 2001. He said, in cross-examination, whereas the decision was not his to make, it was he who highlighted the problem that might arise if it was not withdrawn and urged that this should happen. Likewise Satish accepted that it was through Raj’s contacts that Home View Estates that Mr Smith of Barnes Kirkwood & Wolf came to assist in the project.

Satish, in giving evidence, emphasised that he was describing the contribution of Raj as he personally perceived it and that he was not denying that Raj may have performed services to the project out of his sight and of which he was not otherwise aware.

Mrs Mina Patel is the manager of an Indian restaurant in Ealing Road Wembley. Raj is married to her husband’s sister. Mrs Mina Patel gave evidence for Raj. She describes a series of some four or five visits to her restaurant by Raj accompanied by Mr Gami, Mr Pinduria and Satish. She describes how on the first of such visits Raj introduced Mr Gami and Mr Pinduria to her as his partners in a project involving “big land”. She describes how Satish was introduced to her as Raj’s architect and how each of Mr Gami and Mr Pinduria acknowledged that they were Raj’s partners. Under cross-examination she accepted that she could not recollect anything else that Raj and his accompanying visitors to her restaurant said to her on the first or any of their subsequent visits to the restaurant. She recollected the visits because they always took the largest table in the restaurant in order to spread their documents and maps. Mr Gami, Mr Pinduria and Satish deny any mention of possible partnership as alleged by Raj and Mrs Patel in the course of their visits to Mrs Patel’s restaurant which they accept took place

In September 2000 Raj approached Homeview Estates, through Mr Brian Peppiatt as agents to obtain either a buyer or a lessee of the Property. Mr Peppiatt was a witness for Raj and described how he came in to his office representing that he had just purchased the Property and was looking to sell it or let it. In cross-examination Mr Gami accepted that he knew that Raj had approached Homeview Estates with a view to selling or letting the Property. It was his case that the reason for doing this was to discover whether there was in fact a letting market for the Property with its D2 permitted use. This was to assist in the planning application to convert the whole Property to residential use by demonstrating, because of the lack of interest, that there was no demand for the use of the existing club premises as such.

In early 2001 it was apparently decided to obtain a valuation of the Property in its existing condition and subject to its existing D2 permitted use, for the purposes of the negotiation with the Board to buy out the Board’s equitable charge. At paragraph 70 of his witness statement Raj describes the steps that he says he took to assist in obtaining such a valuation. He says that he approached an agent contact of his, a Mr McHugh, and was referred by him to a Mr Nigel Smith of Barnes Kirkwood & Woolf. He says he contacted Mr Smith and arranged to meet him at the Property. He says that he told him that he had purchased the Property with two partners mentioning Mr Gami’s and Mr Pinduria’s names. He says he described the reasons for the valuation and the basis on which the valuation must be made. Mr Smith was a witness for Raj. In his witness statement he says that the inspection of the Property took place on the 13^th January 2001 and it was attended, in addition to Raj, by Satish. His witness statement does not confirm that at the inspection he was told of any partnership. His valuation report, which was in evidence, was sent to Satish on the 26^th January and he initially invoiced Satish for his fees. At paragraph 10 of his witness statement he says this:-

“10

Some time after the invoice had been sent out (I do not recall exactly when) my secretary… chased it up. I then received a call from Raj who informed me that I should redirect the invoice to Mr D Gami at Euro Investments Ltd in Wembley. I attach a copy of the amended invoice… . Raj explained that Mr Gami was his partner with regard to the property. This was the first time that I became aware that there were other people involved with the property.”

Under cross-examination Mr Smith initially said that he was introduced to Raj by Satish as Satish’s client. He later accepted that he could not be sure that Raj had been introduced in that way. He assumed that Raj was the client because, there was no other reason for him to be there. He was not cross-examined about the contents of paragraph 10 of his witness statement. Mr Smith described being asked to re-visit the valuation in the following year, 2002, so as to re-value the property on a different basis. Mr Smith produced a number of documents which tend to confirm Raj’s account of his part in dealing with Mr Smith over the valuations. Indeed under cross-examination Mr Gami accepted that he was aware that Raj was dealing with Mr Smith.

On the 6^th September 2000 Dr Alan Marsh had written to Mr Marris on behalf of the College Lane and Little Green Street Residents Association asking to be put in contact with those who would be developing the Property. At paragraph 65 of his witness statement Raj describes an incident “some time after completion” when he met a gentleman in the course of one of his visits to the Property concerned with his job of keeping it clean. Raj introduced himself as Professor Alan Marsh and a member of the local Residents Association. He describes how he decided to arrange a meeting to be attended by Satish and his partner Mr Peter Tigg. The meeting was arranged to take place at Professor Marsh’s house. Raj describes how, at the meeting, he did most of the talking in order to explain the nature of the development which was planned. After the meeting he reported to Mr Gami and Mr Pinduria.

At paragraph 66 he describes a further meeting with Professor Marsh at the Vine public house close to the Property. That meeting was for the purpose of providing Professor Marsh with the plans of the proposed redevelopment of the Property. It was attended by Satish and Mr Tigg and Mr Gami later joined the meeting. Raj says that he introduced Mr Gami to Professor Marsh but is unable now to recall “whether I referred to him as my partner or as a colleague.” He says that again he led the discussions assisted by Satish and Mr Tigg. Mr Gami said little or nothing during the meeting.

The reaction of Professor Marsh was that their plans were “over development” and that there would be opposition. Professor Marsh was a witness for Raj. His account of meeting Raj differs from that of Raj himself. He says he first met Raj, before the 2^nd auction, on two occasions at the Property when Raj described to him his intention to bid for the Property at the auction and his plans for the Property if successful. He describes being contacted by Raj on the telephone after writing the letter seeking contact with the developers from Mr Marris which I have already referred to and Mr Marris’ response. He says that in the course of the conversation on the telephone Raj “made it clear to me …that he had purchased the Property.” He then describes the meeting at his house in February 2001 and continues at paragraph 17:-

“17

Raj introduced me to Mr Tigg and Satish as the architects involved in the proposed development of the property. Raj took the initiative during the meeting and explained his plans and intentions to develop the site. I was left in no doubt during this meeting that Raj was the prime mover in the proposed development. Neither Mr Tigg nor Satish contradicted him during the meeting. They both deferred to Raj as the client….

18

I had a further meeting with Raj in May 2001. the meeting was at the Vine public house…the same people were present as on the previous occasion and one other gentleman whose name I do not recall. I can recall Raj and his architects laid out the promised draft plans on the table we were sitting at…. He asked my views on the proposals and also how they would be received by other local residents. I told Raj that I thought the plans constituted an over-development… my impression of the meeting was that Raj was still the prime mover in the project and that Mr Tigg and Satish deferred to him as their client.

19

I first became aware of the interest of Euro … as the registered owner of the Property when I had sigh t of its application for planning permission. This was in early September 2001…

23

My entire impression was that development of the Property was Raj’s personal venture.”

Neither Mr Gami, Mr Pinduria or Satish deal with the meetings with the Residents Association in their witness statements. Professor Marsh’s evidence was not much affected by his cross-examination. He differed from Raj in that it was his view that Mr Tigg had “a lot to say” at the first meeting at his house. He resisted the suggestion that Mr Gami and Mr Pinduria attended that meeting although he conceded that they may well have attended the second meeting. It is clear from his answers that he remembered Raj as playing a leading role in both meetings and that “Mr Tigg and Satish Patel deferred to Raj Patel as their client” and “their” [Mr Tigg and Satish] “general presentation, that they were working for Raj Patel who acted as sort of Master of Ceremonies for this discussion and asked them to explain to me some of the principles they had brought to their design and so they responded to his cue to present to me.”

Meanwhile on the 21^st February 2001 an application for outline planning permission for residential development of the Property was submitted by Satish. On the 1^st June the negotiations being conducted by Satish with the Board for the buy out of the Board’s equitable charge reached agreement as to the price to be paid, £435,000 plus legal costs, but final terms had not been arrived at. It is common ground that, apart from the first meeting with those representing the Board, Raj did not attend any of the subsequent negotiations which were all conducted by Satish. As I have already highlighted in the course of his cross-examination, Mr Marris accepted that Raj “had considerable involvement in relation to those negotiations”, primarily, as a “conduit for instructions.”

A problem then arose for Mr Gami as to how to finance the payment of the agreed price to the Board. At paragraph 37 of his witness statement Mr Gami says this:-

“37

When I agreed the price to buy out the clawback I was short of funds. The Property was vacant. There were substantial interest charges. I borrowed £50,000 more from my brother and I approached Mr Patel who had agree to lend me money. I agreed with him that I would pay him interest the same as I would if I had borrowed from a bank and we agreed I would repay him when I could.

38

The loan agreed with Mr Patel was a personal loan to me.

39

I understood that in July 2001 Mr A Marris received a cheque for the sum of £50,000 which was drawn on an account in the name of Mr Patel’s brother. I never spoke to Mr Patel’s brother about this loan and I believe the loan is from Mr Patel to me and I do not owe his brother.”

It is Raj’s evidence that he agreed to make £50,000 available and for that purpose approached his brother Avinash as the holder of the family’s assets. The payment was actually made by cheque signed by Avinash and drawn on his own account to Wedlake Saint dated 28^th June 2001. On the back of the cheque is written in Avinash’s writing “regarding Euro Investment (UK) Ltd Ref Raj Patel”.

It is common ground that subsequently two further payments of £7,000 were made which Mr Gami accepts represented two of the monthly payments he was making to service the loan by the National Westminster Bank. It was Avinash’s evidence that he understood these three payments as an investment by Raj in the project and that Raj was to receive 25% of the issued shares of Euro.

There is an issue between the parties as to whether these payments constituted simple loans by Raj to Mr Gami, as Mr Gami contends, or were capital contributions to the alleged partnership by Raj. Mr Trace drew particular attention to a letter from Mr Marris to Mr Gami of the 1^st August 2001 discussing how the payment to the Board was to be made where, at the second paragraph, it reads:-

“In view of the fact that I have received the capital sum which we discussed from RC Patel I have given them the undertakings so that this matter can proceed swiftly to completion.”

Given that whether the payment is to treated as a loan to Mr Gami personally or a payment to Euro, the £50,000 payment and the two subsequent payments of £7,000 were intended to assist Mr Gami in financing the development, it does not seem to me to matter very much which way this issue is decided.

The full planning application was submitted to the Borough of Camden on 7^th August 2001, the covering letter being signed by Satish. It is Raj’s unchallenged evidence that he delivered the application to the Council. It seems that this was done at a time when it was thought that agreement with the Board over the buy out of their equitable charge had been completed. Raj’s account of these events is contained at paragraph 78 of his witness statement as follows:-

“78

At the time the planning application was made we thought that the purchase of the clawback had been completed. However, I received a call from Mr Marris who told me that it had not been completed due to the absence of the other side’s solicitor. He told me nevertheless that completion was imminent. Mr Gami was away at the time and since I did not want to jeopardise completion of the purchase of the clawback, I made the unilateral decision to remove the papers from Camden Council. I therefore attended Camden Council’s office and told the duty planner that I wanted the papers back to check them. I said they could retain the cheque as the application would be submitted in the very near future. I collected the papers and it was only when the purchase of the clawback was completed that I re-attended at Camden Council’s offices to lodge the documents.”

It is common ground that the planning application was withdrawn (the documents being physically recovered by Raj from the Council’s offices) pending completion of the buy out of the Board’s equitable charge which was completed on 20^th August. There is an issue as to whether it was Raj’s unilateral decision to withdraw it. It seems from an attendance note of Mr Marris of the 14^th August, at a time when Mr Gami was in the United States, that each of Raj, Satish and Mr Pinduria played a part in the decision to withdraw the planning application and thus it cannot be said to have been Raj’s “unilateral” decision but one which came about possibly as a result of his urging. In due course the application was restored on 21^st August 2001 the day after the agreement with the Board was completed.

Mr Garth Ellis-Rickets is an architectural consultant. He gave evidence for the defence. He was an acquaintance of Raj having met him through his colleague Mr Calvin Alleyne. He describes in his witness statement how he was approached in May 2002 by Raj to do some valuation work in respect of a dispute which Raj was having where he was seeking to recover payment from a building owner for whom he had performed works. He describes how in late May he went with Raj to visit the sites in question after which Raj mentioned that he wanted to go and visit his site in Kentish Town, namely, the Property. Mr Ellis-Rickets recognised the site. At paragraph 4 of his witness statement he says:-

“4

…he [Raj] then told me that the loan was “killing him” and causing problems at home. I have a recollection that he mentioned a figure of £6,000 per month and that this was why he urgently needed the money from Jerram [with whom he was in dispute]. I did recall quite specifically that he said he was the sole owner of the Property and had no partners.”

Mr Ellis-Rickets was cross-examined but did not depart form his account of the conversation with Raj at the Property contained in paragraph 4 of his witness statement.

Mr Alleyne was cross-examined as to his recollection of the events described in his witness statement but, like Mr Ellis-Rickets did not concede that his recollection of what was said in the course of his visit to the Property with Raj, was inaccurate.

For the purpose of the planning application it was necessary to take the advice of Town Planning consultants. It is common ground that Satish would have preferred a Mr Burroughs for this purpose and in his witness statement at paragraph 12 he describes a meeting with Mr Burroughs also attended by Raj and Mr Pinduria. Meanwhile town-planning advice had also been obtained from a Mr Blackwell of Cunnane Town Planning. That firm had been consulted in December 2000 by Satish on the prospects for obtaining planning permission for residential development at the Property.

Mr Blackwell was a witness for Raj. At paragraph 5 of his witness statement he describes Mr Pinduria contacting him on the telephone on 12^th June 2002 on behalf of Euro after which a meeting took place at Cunnane’s offices with Mr Blackwell attended by the alleged partners. It is not in issue that Raj preferred Mr Blackwell as consultant and that Mr Blackwell was consulted in preference to Mr Burroughs. The material parts of Mr Blackwell’s witness statement are as follows:-

“6

Mr Pinduria, Mr Gami and Raj were present at the meeting of 14^th June 2002. I recognised him as I had worked for him in connection with a change of use planning application concerning some vacant office accommodation on Cricklewood Lane some years earlier. I was given the impression at the meeting of the 14^th June that Mr Pinduria Mr Gami and Raj were Euro…. I recall being asked to send correspondence to Mr Gami on behalf of Euro at their business address in Wembley. Our subsequent invoices were addressed to Euro care of GES Ltd and for the attention of Mr Gami. Any cheques we received from Euro were signed by Mr Gami…

9

I got the impression that Mr Gami Raj and Mr Pinduria had separate roles in relation to the project I am not certain whether I was specifically told of these separate roles or whether I simply made inferences of my own. Nevertheless it was my understanding that Mr Gami was the man with the finance. He attended meetings but did not, as I recall, visit the property when I did. Raj had the development expertise and consequently dealt with that side of the project…as far as Mr Pinduria’s role is concerned, I had initially presumed that it was purely administrative. I remember being a little surprised to learn later on that Mr Pinduria had an input into the decision making in the project…

11

…generally I would copy any correspondence in relation to the property to Euro to ensure that Mr Gami, Raj and Mr Pinduria were kept up to date with my progress.”

It is clear from his cross-examination that Mr Gami was aware that professionals were communicating with Raj and Mr Pinduria at Euro’s offices and that Mr Blackwell was specifically instructed in the course of the meeting on the 14^th June to follow this course also. In his written submissions Mr Trace drew my attention to a passage in Mr Blackwell’s cross-examination (at day 4 of the transcript page 135) where Mr Blackwell confirms that this was how he communicated with any of the alleged partners. He also drew my attention to another passage (at page 142) where Mr Blackwell records Satish as having said to him that Mr Pinduria had “a more integral and senior role to play in Euro Investments than I had previously got the impression.”

It seems clear that Mr Blackwell’s impression of the attendance of Raj and Mr Pinduria at meetings with himself and Mr Gami was because they were fulfilling the role of clients.

Meanwhile on the 17^th May 2002 Camden Council served on Euro a notice under section 80 of the Environmental Protection Act 1990 to abate noise arising from amplified music emanating from squatters who had moved onto the Property. A covering letter with a copy of the notice was sent to Raj by Dr John Anani a senior technical officer with Camden Council’s Environmental Health Department. Dr Anani was a witness for Raj. In his witness statement he describes faxing a copy of the abatement notice to Raj but says that he could not recall how he came to be aware of Raj’s interest in the Property (but it was his understanding throughout that he was one of the owners of the Property). He says that the majority of his dealings relating to the Property, and his notes show that there were many, were with Raj. He described how on this occasion Raj appeared to be being uncooperative because he was cross with the council about their refusal of planning permission in respect of the Property. He describes how he had been led to believe (he does not say from what source) that Vickers & Co a firm of solicitors had been instructed to take proceedings to recover possession of the Property from the squatters. In fact such proceedings were issued at the instigation of Raj on the 14^th August 2002. Dr Anani therefore got in touch with Vickers & Co and spoke to somebody, who he does not identify, from that firm who referred him to Mr Gami as “one of the partners” in the Property. At paragraph 9 of his witness statement he says this:-

“9

I called Mr Gami and introduced myself. I said I had been dealing with Raj Patel in connection with the problems concerning the squatters at the Property. I said that I had not been getting much cooperation from Raj Patel. Mr Gami said that Raj Patel was “one of the partners” in the Property. He said that he would ensure that the eviction of the squatters and the boarding up of the site would be dealt with. I have a clear recollection of Mr Gami referring to Raj Patel as one of the partners.

10

It was my understanding that there were three partners in the Property Raj Patel Mr Gami and a Mohan Pinduria with whom I had some telephone conversations as is clear from the report. As far as I can recall I met the three of them at the Property on one occasion. I cannot remember how they were introduced to me when we met at the Property.”

It was the Council’s practice to keep, in respect of every property, a register of events relating to that property. Dr Anani was responsible to maintain this register in respect of the Property. This register shows relevant entries relating to nuisance emanating from the squatters on the 27^th May, 6^th and 14^th August and 11^th September 2002. The latter entry reads as follows:-

“I spoke to the owners this morning as I could [not] reach them yesterday. Mr Raj Patel, one of the owners, assures me that the police, two bricklayers and himself will be at Collage [sic] Lane at 9 am Monday 16^th September 2002 to brick the place up. I thought it was going to happen yesterday….”

Dr Anani was cross-examined. I have to say that at times his answers to questions were somewhat incoherent and this is confirmed on reading the transcript. However it does not appear that he departed from his evidence that he had been referred by Vickers to Mr Gami as a partner in the Property and that he identified Raj and Mr Pinduria as the other partners. He recalled visiting the Property on an unidentified occasion in company with the alleged partners.

When Dr Anani’s evidence was put to Mr Gami he said that he recollected the telephone conversation but denied that in the course of it he had said anything which indicated that he was a partner with Raj or anyone else in the Property.

On the 22^nd August 2002 Camden Council served on Euro a notice for the purposes of section 4 of the Pests Act 1949 requiring Euro to clear the Property of accumulated rubbish and dispose of it at a waste disposal site. It is Raj’s evidence at paragraph 88 of his witness statement that this rubbish was largely associated with the occupation of the Property by squatters.

It is not in issue that Mr Gami entrusted the job of keeping the Property secure and free of rubbish to Raj and also the task of removing the squatters which, in due course, was achieved.

On the 18^th October 2002 Camden Council gave notice to the Peter Tigg partnership that the planning officers recommendation to the planning sub-committee in respect of Euro’s application for planning permission for residential development was to refuse that application and it was in due course, refused. With the assistance of Mr Blackwell, Euro, through Satish appealed that refusal.

On the 16^th December 2002 Messrs Ringley, chartered surveyors, who had valued the Property for the purpose of the charge to the National Westminster Bank, on the instructions of Mr Gami, revalued the Property at £1.8M without planning permission, £2.8M assuming planning permission for residential development for 25 three bedroom houses and £12M on the basis of residential development for 25 town houses with off street parking and gardens.

In the fourth from last paragraph of the Letter Before Action set out above Raj speaks of an occasion when Mr Gami offered shares in Euro to Mr Pinduria and himself. He expanded on this in cross-examination (day 4 p.46) saying that the incident occurred at one of the public houses in the course of 2002. It was his evidence that he declined the offer on the basis that his trust for Mr Gami made it unnecessary. At paragraph 93 of his witness statement Raj speaks of another occasion in late 2002 when, at Raj’s house, in the course of a discussion with Mr Pinduria of their short-lived building business, Mr Pinduria suggested that he should ask Mr Gami to give him shares in Euro. Raj said that he refused to do this because he trusted Mr Gami. Both these events are denied by Mr Gami and Mr Pinduria.

It seems that in January 2003 Mr Gami’s financial situation was becoming tight and he was looking for finance to meet his loan interest and development costs in respect of the Property. In late 2002 Mr Gami had approached Mr Devraj Patel a chartered surveyor and director of Gami Associates Ltd. Notwithstanding the name of that company neither Mr Devraj Patel nor the company is in any way connected with Mr Gami.

Mr Devraj Patel was a witness for the defence. In his witness statement he describes that the purpose of the approach was to find a joint venture partner to develop the Property with Euro. He put Mr Gami in touch with such a potential venture partner, negotiations ensued but nothing, in the result, emerged. Commencing at paragraph 5 of his witness statement Mr Devraj Patel says this:-

“5

I confirm that at the meetings it was always made clear that the sole directors/secretary and the shareholders of the company were Devshi Gami and his wife Mrs J Gami who had funded the purchase and had continued to make repayments in respect of the loans to the Bank and that there were no other parties involved with the project….

9

As far as I am aware no other parties have an interest in the project except [ Euro ] the directors/shareholders Mr Devshi Gami and his wife.”

Under cross-examination Mr Devshi Gami accepted that he was unaware of the documents in the case which indicate the possibility that Mr Gami had partners and, in particular, Raj, in the acquisition and development of the Property. It was not sought to move him from his evidence that, in the course of his dealings with Mr Gami and the potential joint venturers, the possibility of an earlier partnership did not emerge.

It is common ground that, at about this time, namely January 2003 Mr Gami approached Raj to obtain a further loan from him.

At paragraph 96 of his witness statement Raj described what happened in these terms:-

“96

… Mr Gami told me that he was under some financial pressure and he asked me if I would be able to invest a further £40,000 to cover the costs of the planning appeal. I should say at this stage that Mr Gami told me that he had fallen out with Mr Pinduria when he learned that he (Mr Pinduria) had borrowed £100,000 from his (Mr Gami’s) younger brother (who is also a building contractor) and invested the sum in our venture. I said I would see what could be done.

97

I mentioned this to my brother Avinash and he said that he could let me have £40,000 but that I would be well advised to obtain a share certificate in respect of my interest in the project. I agreed with Avinash because with Mr Gami and Mr Pinduria seemingly at loggerheads I was anxious to secure my 25% interest in the project.

98

I went to see Mr Gami at Unit 22 [Euro’s offices] and told him that I would be willing to invest a further £40,000 but that I wanted the security of my share certificate because I was unsettled by the dispute that he had with Mr Pinduria. He said that only two shares of £1 each had been issued held by him and his wife but that he would talk to his accountant which I assumed meant that he would be providing me with a share certificate in respect of my 25% interest. Our discussion then turned to our respective investments in the project….”

Avinash supported Raj’s account.

Mr Gami deals with these events at paragraphs 44 and 50 and51 of his witness statement as follows:-

“44

In late 2002 I asked Mr Patel to meet me at my offices. When we met I told him I was struggling financially and asked if he could help. He said he did not have money and reminded me that I would have to repay his existing loan at some point.

50

In about January 2003 Mr Patel came to see me at my offices in Wembley and said that he wanted his money back. He wrote out figures on a sheet of paper, the £64,000 loan and he said he had £6,000 of expenses which together with his £64,000 loan meant he was owed £70,000 and this calculation can be seen in the top left hand corner. He also wrote down figures showing how much the Property had cost me to buy and the interest I had had to pay. He said that he wanted to join me in partnership in the project. I asked him whether he had funding and he told me that he would have to sell his shop and raise the finance with a view to joining the project.

51

Mr Patel never spoke to me again about his proposal that he buy a share in the development and become a partner.”

The paper spoken of in paragraph 50 above was in evidence.

Under cross-examination Raj emphasised that there were two meetings one in January/February 2003 the second in March 2003. At the first he was asked to lend a further £40,000 by Mr Gami and said that he would “see what he could do”. Having discussed the matter with his brother Avinash he returned to Mr Gami’s office for the second meeting at which he asked for a share certificate to represent his 25% interest in the project as a condition of providing the money. Mr Gami did not say yes but said he would discuss the matter with his accountant but, in the result, took the matter no further. Thereafter Raj tried to get an answer from Mr Gami by telephoning him on an number of occasions when, it was his evidence, Mr Gami would not take his calls. As a result Raj asked his wife to go and visit Mr Gami to try and get him to answer. Mr Gami’s case, under cross-examination, was that the first meeting took place at which he asked Raj for a loan but there was no second meeting at which the loan was offered subject to the delivery of a share certificate.

Mr Penaligon was a witness for the defence. He is a businessman and director of his own company Devon Halo Ltd which provides management advice. He was previously employed by the Racal Group of companies in the course of which he met Mr Gami whose company manufactured and supplied products to Racal. At paragraph 3 of his witness statement he says that “because of consistent good quality and delivery, Mr Gami and GES rapidly became the largest supplier of contract manufacturing services to Racal Acoustics Ltd…. I believe Mr Gami and GES remain the largest supplier of this type of service to Racal Acoustics Ltd.”

Mr Penaligon and Mr Gami, as a result of their business association, became and remain friends. When Mr Penaligon left Racal and set up his own company Mr Gami became a client of his in April 2002. Mr Gami told Mr Penaligon of his entry into the development business and his purchase of the Property. Mr Penaligon describes being present at GES in mid 2003 when Mr Gami was holding meetings relating to the development. Prior to one of the meetings he was introduced to Mr Pinduria, Raj and Satish when it was indicated that they were all working for Mr Gami on the development of the Property. He was there in August 2002 when Raj was organising the removal of the squatters and obtaining money to pay the expenses incurred. He was there also in that month when it was indicated that planning permission would be refused.

In January 2003 Mr Penaligon was told by Mr Gami that Raj had said he wanted the return of his loan “and that he would no longer be involved as he did not believe planning permission would be granted.” Mr Penaligon describes how after January 2003 he became increasingly involved in the project to develop the Property and had meetings with Satish and Mr Blackwell. He says that he dealt with the security arrangements at the Property and the difficulties concerning the removal of accumulated rubbish. He attended the planning appeal with Mr Gami on the 28^th May 2003. He was present in June 2003 when Raj’s wife and mother in law visited GES for a meeting with Mr Gami. Mr Gami told him after the meeting that they had asked for the return of Raj’s loan. He says he was surprised when he was told in September 2003 of Raj’s claim. In conclusion at paragraph 26 of his witness statement he says:-

“26

In all my dealings with Mr Gami on [sic] both a professional and social capacity I have not seen or heard anything which would suggest to me that Mr Gami was in partnership with another individual. In fact, when we first discussed this project some years back I had asked Mr Gami if he was taking on this project on his own. I was particularly inquisitive at that time as the project seemed to be a new and exciting venture. His reply was clear and unambiguous and I refer to my comments at paragraph 7 [where Mr Gami is recorded as replying to this question that he was embarking on the project on his own].”

Mr Penaligon was cross-examined and accepted that he had not been present at any of the meetings between the alleged partners and that his witness statement was prepared from his recollection of events as he observed them and discussions with Mr Gami. However he did not retract any of the contents of his witness statement.

Mrs Ragini Patel is Raj’s wife who gave evidence for him. In her witness statement she describes how in the Spring or early Summer of 2000 Raj told her of the commencement of a partnership between him Mr Gami and Mr Pinduria for the development of the Property. She describes meeting Mr Gami and Mr Pinduria on a number of occasions at the two public houses being run by Raj at No 210 and 7 Cricklewood Lane.

In particular she describes a conversation which took place in late 2002 in which she overheard Mr Pinduria, in conversation with Raj at their home, suggest to Raj that he should get Mr Gami to issue share certificates to confirm his 25% interest in the development project and her husband say he saw no necessity to do this because he trusted Mr Gami. Mr Pinduria denies any such conversation.

Mr Ragini Patel also gives evidence of what she describes as a brief visit to Mr Gami at his office “in the early part of 2003” to try to persuade Mr Gami to return her husband’s calls, Raj being heavily engaged at the time on a building project in Peckham and away from home for much of the day. Mrs Gami she says, was present at the meeting. She says that she was not a welcome visitor. Mr Gami and Mr Penaligon recollect the visit. It is Mr Gami’s case that the purpose of the visit was to persuade him to repay the £64,000 which Raj had lent him. That is denied by Mrs Ragini Patel but supported by the evidence of his wife who accepts she was present at the meeting. Like Mr Penaligon Mrs Gami says that Mrs Ragini Patel was accompanied to the meeting by her mother-in-law.

It is Mr Gami’s case that when he approached Raj for a further loan he also approached Mr Pinduria but they both said that they could not be of assistance. He said that at this point they informed him that because it was taking so long to obtain planning permission they would have to cease to assist in the project and set about trying to earn money for themselves. However it appears, from an attendance note of Satish that both Raj and Mr Pinduria attended a meeting at Satish’s offices with Mr Gami and Satish as late as the 28^th October 2002 and from another document emanating from Satish’s office that Raj was being consulted in early December 2002.

It is common ground that Raj and Mr Pinduria embarked on a building partnership together in October 2002 and that that relationship came to an end discordantly in May 2003 with Mr Pinduria alleging that Raj owed him money. It does not seem to me to be possible, on the evidence available, to come to any conclusion as to where the blame should be placed for the discord and whether any debt is in fact due to Mr Pinduria. Any such conclusion could, in any event, only be relevant to considerations of the credit of the evidence of Mr Pinduria and Raj.

On the 23^rd June 2003 Euro’s appeal against the rejection of their application for planning permission for the construction of 20 houses and a block comprising 10 two and three bedroom flats was allowed by the First Secretary of State. On the 23^rd July Ringleys revisited their valuation of the 16^th December 2002 placing a market value on the Property of £2,650,000 and a gross development value of £11M. On the 26^th July Raj wrote to Mr Gami the letter of that date which I have set out in full above. On the 21^st August Mr Marris on behalf of Euro responded, not by dealing with Raj’s allegations point by point, but in the following terms:-

“I have recently been shown a copy of a letter which you sent to the company. I am writing to inform you that Euro have told me that they will repay within 28 days your loans to the company (amounting I understand to £64,000) plus interest together with any suitably vouched expenses which you have incurred.”

On the 29^th August Raj responded pressing his claims but saying that he would accept £0.5M in settlement. On 1^st October solicitors instructed by Mr Gami wrote to Messrs Watson Farley & Williams the solicitors instructed by Euro in place of Wedlake Saint denying Raj’s claims and in particular that “at a meeting held on or about August 2001 a “three partner partnership” was formed comprising Mr Gami, Mr Patel and Mr Pinduria. We further understand it to be your clients contention that pursuant to that alleged partnership the site was purchased and that your client claims to be entitled to “25% of the value of the site”.”

These proceedings were commenced on the 31^st March 2004.

The claim is brought under five heads the first four being in the alternative. These are:-

Section 1(1) of the Partnership Act 1890 defines partnership as “the relation which subsists between persons carrying on business in common with a view to profit.” To enter into that relationship, however, intending partners must contract with each other to do so. Equally parties intending to embark upon a joint enterprise short of partnership must arrive at a contractual relationship which governs how the enterprise is to be managed and its rewards or losses are to be shared. In Banner Homes Group plc v Luff Developments ltd [2000] CHD 372 the Court of Appeal were considering a claim by one development company against another for a share in a property in respect of which it was found that there had been an arrangement between them, short of a contract, by which the claimant undertook not to bid for the property on the basis that it would be entitled to share in the profits resulting from its development and sale. It is apparent from the judgment of Lord Justice Chadwick, who gave the lead judgment in the case, that the claimant was entitled to the grant of a half interest in the property in question by resulting trust by reason of that arrangement or understanding. It follows that to make good a claim under either of these heads a Claimant must establish the fact of some sort of consensual arrangement or understanding between himself and the Defendant.

It is contended by Raj that such an arrangement with Mr Gami and Mr Pinduria was reached in the course of the Third Meeting. They deny that any such meeting took place and that any such arrangement was otherwise arrived at between them. The central issue is therefore one of fact: did the Third Meeting take place and if so what was agreed at it. The only evidence is that of the parties to the alleged Third Meeting and the alleged agreement. There is no evidence from contemporary documents which points one way or the other. Evidence of how the parties have behaved subsequently is of assistance in coming to a conclusion of that central issue. I cannot recall another case where the rival accounts of events extending over so substantial a period of time and in such detail, have been so diametrically opposed.

I hope I will not be misunderstood when I say straight away that I have had difficultly in assessing the reliability of the conflicting evidence of Raj and Mr Gami because their command of English is relatively poor and, in the case of Mr Gami on his own admission, he does not read or write English well and, when documents were put to him, I was never entirely sure that he fully understood their meaning. The same may possibly apply to Raj but to a lesser extent. I have already drawn attention to an important example of this. It was Mr Trace’s submission that in the course of his cross-examination of Mr Gami, Mr Gami accepted that a meeting took place between Raj himself and Mr Pinduria at No 210 in early 2000 but after the Second Meeting. As I have already found, on re-reading the relevant transcript of his cross-examination, it is clear to me that Mr Gami and Mr Trace were at cross-purposes and that his answers do not constitute an admission that such a meeting took place. Mr Pinduria’s command of English is very good and his evidence denying that the third meeting took place is clear and he was not shaken from it.

I have come to the conclusion, accepting the evidence of Mr Gami and Mr Pinduria, that there was no Third Meeting at No 210 as Raj alleges and thus that no arrangement whether by way of partnership or otherwise between Raj, Mr Gami and Mr Pinduria was arrived at in the course of such a meeting. I have arrived at that at that conclusion for the following reasons:-

I will now explain my reasons for coming to the conclusion at iv) above.

It seems to me extraordinary that there should be no written record of any kind of the arrangement it is said was arrived at in the course of the Third Meeting. On any view the acquisition and future development of the Property was a substantial business activity certainly for those whom Raj alleges were to have a share in its successful outcome. It is Raj’s case that at the third meeting detailed terms of how the enterprise was thereafter to be conducted, including the shares of the future “partners”, were agreed. They are pleaded in seven sub-paragraphs at paragraph 8 of the amended particulars of claim. It seems to me quite unlikely that not one of the three made it his business to record the terms which it is said were agreed in writing and, in particular, that Raj did not do so and ensure that the record was preserved. Raj’s case is that the negotiations which led to the final arrangement went on over a number of telephone calls before the third meeting. He failed to produce any note or other record of those conversations.

It seems to me that Mr Marris’ position in the case is a very telling one. At the outset of his instructions he asked who his client was and, without dissent, was told that his client was Mr Gami and that the Property was to be purchased in the name of Mr Gami’s company GES. Had he understood his clients were a partnership his reaction and that of his firm, by way of recording and otherwise, would have been entirely different from that which it was. When he was asked to complete the purchase, in the name of a company to be incorporated for the purpose, he fulfilled those instructions by acquiring Euro and arranging that its shares should be equally divided between Mr Gami and his wife who were to be its only directors. It seems to me unthinkable that, if everyone at this stage understood that there was to be a partnership that that should not have been reflected in the way the shares in Euro were allotted on its acquisition, or, at least, that the question of the allotment of the shares in Euro should not have been raised by either Raj or Mr Pinduria. If all were agreed at this early stage that the Property was to be developed by some form of partnership there would seem to be no purpose at all in setting up Euro in the way that it was set up. Mr Marris never departed from his fundamental evidence that he never understood that there was any sort of partnership with relation to the Property notwithstanding that in the course of a meeting where all three alleged partners were present Raj, “in passing”, mentioned sharing any resulting profit between them in the manner which I have described. Once the dispute surfaced Mr Marris was bound to cease to act for any of the parties and I do not understand him to be still acting for Mr Gami and Euro in any capacity. If Raj’s account of the events is correct, Mr Marris must have been involved in some conspiracy with Mr Gami and Mr Pinduria to conceal the true arrangement between the parties. I find this hard to accept but I do accept Mr Marris’ evidence as entirely reliable.

The position of Mr Brown, whose evidence I also accept, representing the bank that was financing the purchase of the Property is equally incomprehensible if Raj’s account of events is accepted. He also says that he was quite unaware of any partnership or similar arrangement. As I have pointed out in my description of the background facts, his “credit assessment” prepared after his meeting with the parties at the Property is on the basis that the borrower was to be Euro supported by Mr Gami and GES to whose credit worthiness the report is largely directed. Like Mr Marris he was clear that had any question of a partnership or joint enterprise in Euro been drawn to his attention the approach of the bank to the application for a loan and its recording of the transaction would have been entirely different. I can see no reason why, if there had been some sort of partnership arrangement, that that should not have been made clear to Mr Brown at the meeting. Raj was a man of some substance and in a position to help Mr Gami to find security for the bank and there seems to be no reason why this should not have been mentioned to Mr Brown, which it plainly was not. Mr Brown was clear that had he been informed of the existence of some sort of partnership or joint enterprise the bank would have reacted differently in the way it set up the loan account and in the particulars it would have requested to be provided of the participants.

I also accept the evidence of Satish which I have summarised above. It is true that he remains employed by Mr Gami in the development of the Property and thus has an incentive to please him. However, as with Mr Marris, I am not prepared to proceed on the basis that a professional man and a partner in an established firm of architects, would be prepared to perjure himself for the sake of one client. In particular I accept Satish’s view that the extent of Raj’s work in liasing with the planning authorities has been greatly exaggerated by him. My acceptance of Satish’s evidence not only involves my rejection of Raj’s evidence where they conflict but also the evidence of Mrs Mina Patel where she describes being introduced to Mr Gami and Mr Pinduria, in the presence of Satish, as Raj’s partners.

I also accept the evidence of Mr Devshi Gami and of Mr Penaligon, the latter, admittedly, a long-standing friend of Mr Gami. I can see no reason why these two witnesses, who come into the picture at a late stage in the history of relevant events, should wish to present a biased and untruthful view of events as they saw them.

The accounts given by Mr Ellis-Rickets and Mr Alleyne were hardly challenged but they do present an odd picture of Raj which I found reflected in the evidence of some of the witnesses called on his behalf.

In arriving at this conclusion I have to accept that there are certain features of the evidence which have given me pause, in particular, the time spent by Raj assisting Mr Gami, attending meetings and running errands on his behalf, apart from those specific cleansing and construction tasks for which he was to be paid. I incline to the general impression that Raj’s case exaggerates the total effort involved in this but nonetheless over the period of approximately three years it is apparent that he spent an appreciable part of his working time, unpaid, on the business of Euro and Mr Gami. It is clear that Mr Gami needed his assistance and that of Mr Pinduria, with their superior command of English and Raj’s greater experience of the property development business.

It was Mr Gami’s case that Raj was prepared to give the assistance that he did on the basis of a vague and unrecorded promise, not amounting to a contract, that he would benefit in the future by being employed in the building work which would follow the successful obtaining of planning permission for development of the Property. To the Anglo Saxon mind this seems extraordinary particularly in the light of the fact that Mr Gami and Raj were unknown to each other before the purchase of No 210 in October 1999. Furthermore Raj was prepared to extend his assistance by lending £64,000 to the project, admittedly at interest, but without any security and would have been prepared to lend a further £40,000 when approached by Mr Gami if an interest in the Property had been confirmed to him in some way.

I am nonetheless driven by the evidence which supports the defendant’s case to conclude that he was prepared to do this and that he was satisfied that his assistance would be rewarded by being given building contract work in the future. Eventually he despaired of Euro obtaining planning permission and only returned to make this claim when he discovered that, against his expectations, Mr Gami had, on appeal, got that permission with the resulting transformation of his financial situation. It must be remembered that Mr Pinduria was prepared to spend a comparable time helping Mr Gami without receiving an interest in the Property in compensation and does not now claim one.

I am less troubled by the references to Mr Gami’s “partners” in the correspondence between Satish and Mr Blackwell and to the use of the word “clients” in Satish and Mr Marris correspondence when referring to their client. In circumstances where Raj and Mr Pinduria were present at meetings and being used as part-time managers one can well understand how this came about. It is more puzzling why Mr Marris described to Mr Gami Raj’s £50,000 payment as a “capital payment” and why Mr Roche sued the three alleged partners for his unpaid fees and expenses particularly Mr Pinduria. The latter event may have happened as a result of something that Raj said to him when his services were originally engaged but there was no evidence on the point.

Beyond showing Raj working for the Project by obtaining the name of an agent to market the Property the evidence of Mr Peppiatt reflects the evidence of Mr Ellis-Rickets and Mr Alleyne and also Professor Marsh showing Raj claiming to have bought the Property himself.

Neither Mr Smith nor Mr Blackwell gave firm evidence that they regarded Raj, Mr Gami and Mr Pinduria as partners in the development of the Property. They each gave evidence of occasions when Raj and Mr Pinduria assumed a management role in the Project. Mr Smith described an occasion when Raj told him that Mr Gami was his partner. Mr Blackwell said that his impression was that the three of them “were Euro”. Likewise Professor Marsh does not give direct evidence that he regarded Raj as being the developer of the Property in partnership with others. His evidence is that he regarded Raj as the “prime mover” behind the development of the Property and that he was treated as such by Satish and his partner at the two meetings with the Residents Association that I have described.

Of the witnesses called by Raj who dealt with him over the Property only Dr Anani gives positive evidence that he regarded Raj as one of three partners with Mr Gami and Mr Pinduria in the project for the development of the Property. He describes Mr Gami as confirming this in the course of a telephone conversation which Mr Gami himself denies doing. Dr Anani appears to have had reasonably frequent contacts with Raj over the various problems that arose with relation to the Property after its purchase. There does not appear from the evidence to be any reason why he should wish to present a biased and untruthful account for the benefit of Raj. As I have said in arriving at my conclusion there are matters which have given me pause.

In general, however, it seems clear that Raj assumed or was given a management role in dealing with the Property which would be consistent with him having an interest in the success of the Project for its development either as a partner or otherwise. This does not establish that he had such an interest and I have concluded, accepting Mr Gami’s and Mr Pinduria’s account of the facts in preference to his that on the balance of probability, the evidence is against such a conclusion.

I turn to consider the fourth ground of claim – unjust enrichment.

It is submitted by Mr Trace based on the speech of Lord Steyn in the decision of the House of Lords in Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 at p 227 that to establish a claim based on unjust enrichment the claimant must demonstrate four necessary ingredients namely:-

As to the third ingredient it is Mr Trace’s submission that, by analogy with the doctrine of propriety estoppel, the claimant is entitled to rely on the injustice flowing from the fact that his actions in assisting Mr Gami in the acquisition and development of the Property were undertaken in consequence of a mistaken belief that there was a partnership or other contractual relationship entitling him to a one quarter interest in the profits flowing from the Project.

I have rejected Raj’s evidence that the Third Meeting took place and that an arrangement in relation to the acquisition and development of the Property, whether contractual or otherwise, between him and Mr Gami and Mr Pinduria ever came into existence as a result of any such meeting. It is no part of Raj’s case that such an arrangement was arrived at subsequent to the Third Meeting. In the result, in my judgment, Raj does not meet the third ingredient for a claim for unjust enrichment.

In the result, therefore, Raj’s claim to a one quarter interest in the Property or in the shares of Euro fails.

I turn briefly to Raj’s claim in debt. This was not pursued in the course of the hearing. However Mr Gami in his witness statement at paragraph s 37, 38 and 39 expressly admits his indebtedness to Raj in the sum of £50,000. Mr Gami further accepts that the two subsequent payments of £7,000 constitute two further loans to him by Raj.

As to the second matter, namely Raj’s claim in respect of his work on the Property it is, as I understand it, not disputed that he is entitled to some payment but there is a dispute as to amount. I do not consider myself to be in a position to determine this issue and, unless the parties are able to agree it I will direct an inquiry in relation to it.