Singh v Singh & Anor

MRS JUSTICE PROUDMAN: The action is between the claimant and his two sons but in reality between the claimant and the first defendant because the second defendant in general terms supports his father and does not appear today. They are all members of a Sikh family. The claimant claims that there is a constructive trust affecting all property held in the name of the first defendant and that the claimant’s interest in that trust has been severed. The constructive trust is said to arise from the Hindu Joint Family System and the principles of Mitakshara.

It is said that the first defendant, who is now aged 60, was the family manager or Karta and all property acquired by the parties is family property owned jointly by them, subject to rights of maintenance of female members, namely the defendants’ mother and sister. That appears to be the effect of the claimant’s pleading, although there is some confusion as the result of a witness statement from a Professor Menski who seems to be opining that women may claim a capital interest. His statement is also confusing in that he seems to be saying that, at any rate in the traditional Mitakshara, grandchildren are entitled to an equal share with their parents rather than a stirpital share.

The first defendant denies that the Hindu Joint Family System applies in this case at all and there is a dispute of fact as to the family understanding and adoption of the Mitakshara as applicable to their businesses. The first defendant points to the management and tax status of the family business, the establishment of family trusts and the statement of wishes that went with them, the involvement of the claimant’s wife, the repayment of loans, documents signed by the claimant and various other matters. He says these matters are all inconsistent with the Hindu Joint Family System. The claimant has apparently abandoned claims to the shares in family companies held in those trusts. I should say that the family companies own very substantial hotels and the hotel business is worth many millions of pounds.

There are three parts to this application. One is for costs in relation to a summary judgment application made last July, which the first defendant no longer pursues. The defendant says that he is entitled to an order that his costs be in the case and therefore it would follow that the claimant pays his own costs of that application. The defendant says, in effect, three things in support of this matter.

First, that there was no pre-action protocol in the form of any letter before action and that I should show my disapproval of that and/or if there had been such pre-action correspondence the matters now under debate might well have been resolved at an earlier stage. There were, however, family discussions and there was one formal exchange of family correspondence. It is hard to know whether, if there had been correspondence between solicitors, the parties would be in any different position. I note that in the listing questionnaire the claimant said that he wanted to settle the action and the first defendant said that he did not, but Mr Croxford QC, on behalf of the first defendant, has explained that against the background of the matter and against the pleading which the claimant has served.

Secondly, Mr Croxford says that it was only after receipt of the claimant’s witness statement that it became apparent that the claimant was not making any claim to the assets in trust, which comprise some 90 per cent of the shares in the company. Mr Croxford also points out that as far as the rest of the shares are concerned it is not at all plain whether the claimant is putting his own shares in the pot or whether he is merely making a claim to the first defendant’s shares. Mr McDonnell points out that the shares are worth some £800 million so that even 10 per cent of that plus the family home is very substantial indeed. Abandonment of part of the claim may well be all the more reason for pursuing summary judgment because the weaker the claimant’s claim the stronger the summary judgment application.

Thirdly, it was said that after review of the late evidence from the claimant and from Professor Menski, it appeared that claims were being made that the first defendant had lied and that those matters could not be resolved on paper evidence alone. There was, it was said, a world of difference between the joinder of issue on the pleadings and the specific allegations by a father against his son as to lies. However, it does seem to me that those issues are all there on the pleadings and that they provide no occasion for surprises. Further, it was said that it was apparent that Sikh cultural matters on which there was no conclusive post-independence authority would be unlikely to be ruled out in a summary judgment application. The problem with that submission is that it was always obvious that there would be disputes of fact and that there was to be an argument about Hindu family property.

Mr McDonnell took me to the decision of the House of Lords in Three Rivers (No 3) and the observations of Mummery LJ in the Court of Appeal in Doncaster Pharmaceuticals Group v Bolton Pharmaceutical 100 Ltd [2006] EWCA Civ 661, citing the judgment of Sir Andrew Morritt, Chancellor, in Celador Productions Ltd v Melville [2004] EWHC 2362 (CH) and the four propositions which he enunciated. Mr Croxford said that the case was weak but, as I have said, all the more reason if it was weak to pursue the summary judgment claim.

In this case the first defendant decided not to proceed with his claim for summary judgment. I do not accept that the proper order and the only proper order is therefore for the first defendant’s costs to be costs in the case. I should also mention Mr Croxford’s submission that it is unfair for a defendant to have to pay costs when he might succeed at trial. Whatever was the position on giving permission to defend under the Rules of the Supreme Court Order 14 (and there has been a certain amount of dispute about that, perhaps resolved by Mr Croxford’s reference to the 1999 White Book) the position is now different under the Civil Procedure Rules. However, costs are and always have been in the court’s discretion.

I was at first minded, having heard the submissions of the parties, to say that given the deficiencies in the way that the case is put on behalf of the claimant, the proper order would have been the claimant’s costs in the case. However, Mr Croxford has satisfied me that the summary judgment application did serve a useful purpose in that it elicited from the claimant the position that the claimant was not going to claim the shares, in this action at any rate, which comprise, as I have said, some 90 per cent of the shareholding in the companies. I accept Mr Croxford’s submission that that is not the inference that one would draw from reading the particulars of claim. Mr McDonnell says in the particulars of claim the position goes up to 1989, or whenever it was, and what happened thereafter cannot alter the position as at that date. But it certainly seems to me when you read the particulars of claim that the obvious inference is that a claim is being made to the shares in the company and, although the trusts are not mentioned, that must include the shares in the trusts.

So, for the reasons that I will give, I accept that there are severe deficiencies in the way that the case is put, I accept that there was no pre-action protocol and I accept that the summary judgment application did serve a useful purpose in that it did elicit the acceptance (concession is perhaps too strong a word) that shares in the trust were not the subject of the action. It therefore seems to me that the proper order is that both parties’ costs should be costs in the case.

The second part of the application relates to the allegation that the claimant’s pleading is embarrassing. Mr Croxford asked me to require the claimant to plead his case properly. While accepting that my case management powers are very wide and that I should be proactive in seeking to manage the conduct of the case, I am not prepared to tell the claimant how he should plead his case. It seems to me that it is for the first defendant to seek summary judgment or to try to strike out the claim or seek some other such relief and take his chances on that. However, I do accept that at present the claimant’s case is presented in a way which means that the first defendant is unable properly to meet it. Mr McDonnell says that Mr Croxford misunderstands the way in which the claim is framed, that it is a claim merely for a declaration that all assets of the parties were Hindu Joint Family System property and that the issue of what those assets are should be left to a subsequent inquiry. While I follow the principle, on the facts of this case the issue of what assets are subject to the trust impacts directly on whether there was a trust at all. Mr Croxford points to examples of assets which it is said could not, on the facts, be the subject of the Hindu Joint Family System.

In any event, Mr Croxford says that his client needs to know what is being claimed since in principle a Hindu family trust, if established, is apparently capable of comprising many assets of which no mention is made and the first defendant will need to make very far-reaching inquiries indeed as to what has become of assets he has acquired and disposed of over the years. Further, it may well be necessary to join other parties, such as wives and grandchildren and disponees, to any inquiry, so that it is vital for the first defendant to know precisely what property it is said that the Hindu Joint Family System comprises and what is being claimed by the claimant. I am therefore prepared to order the claimant to answer the questions asked in the request for further information.

Mr McDonnell points out that they are very different from the usual sorts of questions asked in a request for further and better particulars, being in effect a request for the claimant to explain how he reconciles his case with points made by the other side. Mr McDonnell says that in any event the request has already been answered, and he took me to passages in his client’s witness statement. However, it seems to me that formal answers are necessary for the first defendant to understand what the case is against him. Indeed, it is a way of making the claimant plead his case, and to do so under CPR Part 18 is certainly within my case management powers. Finally, and in any event, Mr McDonnell appeared to concede the matter by saying that his client is in fact willing to respond, so that the issue is academic. I observe that Mr McDonnell also says that the answers that are going to be given are not going to be very helpful to the first defendant.

Thirdly, there is the matter of specific disclosure. The first defendant asks for documents pursuant to CPR 31.14, 31.15 and 31.12 and both sides rely on the case of Expandable Ltd v Rubin [2008] EWCA Civ 59. Mr McDonnell says that the witness statement is an expert witness statement and therefore subject to CPR 35 so that the usual rule is that formal instructions are not disclosable, although he appeared to accept that the witness statement, which he said was provided purely for the summary judgment application, does contain opinion on matters of non-expert fact as well as expert fact as to the relevant law. Again, Mr McDonnell accepted that the documents referred to in that witness statement should be produced and was prepared to submit to an order that they should be produced, subject to any objections based on privilege and subject to any objections based on CPR part 35 rule 10, and I believe it was he who suggested 14 days for that. There may well be arguments about the scope of privilege or the scope of Part 35 rule 10, but that is for another day.

I am also asked to order a preliminary issue without prejudice to the answers to the requests as to the existence of the alleged Hindu Joint Family System trust. It did not seem to me that this is very different in practice, although I accept it is different in form, from what Mr McDonnell says is the effect anyway of his claim. I am happy for that matter of principle to be decided first. Whether that is a question that should be framed in a case management conference or whether it is something that I should order I will leave to the parties. It seems to me fair enough that the claimant should spell out his claim in such a way that the first defendant knows what he is required to prove and disprove at the initial stage. I also agree that there ought to be a case management conference to pull all the relevant matters together once the first defendant has seen the formal answers to his requests. I accept that the CMC is an appropriate matter for the judge to hear, having heard both parties address me on that issue.