Singh & Anor v Sanghera & Ors

I have to decide a number of issues relating to what was formerly a Nisa supermarket at 263-267 High Street, Smethwick (“the supermarket”).

Thesupermarket is on the ground floor only. There are rooms over. The freehold of the premises (supermarket and rooms) is owned by the First Defendant, Baljit Singh Sanghera ("Baljit"). At the material times, the supermarket (not the rooms over) was leased by Baljit to the Fifth Defendant, Anjali Enterprises Limited ("Anjali").

Anjali is owned by the Fourth Defendant, Amarjit Singh Sanghera ("Amarjit") who is its sole director. Amarjit is Baljit's brother. They have a sister, Rani Kaur (“Rani”). Their parents, Gurdial Singh ("Gurdial") and Gurmit Kaur ("Gurmit") are the Second and Third Defendants. Gurdial ran the supermarket and formerly owned it until he was “persuaded” by Baljit to transfer it to him in July 1999. Gurdial still continued to run the business after that date, and the transfer was not registered until February 2008, when the lease to Anjali was granted. Baljit, when giving his oral evidence, made a gesture indicating quotation marks around the word “persuaded”, suggesting that this was a euphemism. I infer that he put pressure on his father, as the elder son, to effect this transfer when he did.

Anjali, at any rate ostensibly, owned the business from 1st January 2005, and eventually took a lease from Baljit dated 29^th February 2008. It is in issue to what extent there was a true or complete change of ownership in 2005, and whether the lease was genuine, or a sham. I have no doubt that there was a genuine change of ownership, and that the lease is a genuine document. There is a letter dated 1^st January 2005 (drafted by Rani, a young woman of intelligence and ability) by which Anjali and Amarjit guaranteed trade and terminal accounts taken over by Anjali (which remained in Gurdial’s name as Amarjit had a bad credit record). This, as Rani explained, was to protect her father following the supermarket business being taken over by Anjali. A local shopkeeper (Mr Clarke) also confirmed Gurdial’s retirement at this time, as do the trading accounts of Anjali, and the cancellation by Gurdial of his VAT registration. Others (including casual staff, other shopkeepers and at least one customer) saw Gurdial in the shop from time to time after his retirement, and his accountant (Mr Vaghela) met him there from time to time. The casual staff still saw him as the boss, but this was more referable to cultural values, and respect for community elders, than a reflection of business or property ownership. The degree of Gurdial’s input after his retirement also seems to me to have been overstated. He has suffered from vascular dementia and diabetes for some years and, whilst he may have felt at home in the shop when he was there, he was not running it. As a witness before me, he was unimpressive, and unforthcoming, but this may be due, at least in part, to his failing cognitive awareness attributable to his vascular dementia. Gurmit for her part was (perhaps understandably) defensive but clear enough on the important issues. I did feel she might be holding back on certain issues and have approached her evidence with caution also. One of the issues is whether she ever discussed with Kashmir and Nirmala the possibility of their having a flat above the supermarket. I find this was discussed as a possibility, and that she showed them around, but nothing was ever agreed. I reject the further suggestion that it was ever agreed, by Gurmit or anyone else, or suggested, that Kashmir and Nirmala could stay in the supermarket with their family, turning it into a second home. I also reject the suggestion made by Kashmir and Nirmala that any of the Defendants actually lived in an upstairs flat.

I have seen a copy of the Lease, which is dated 28^th February 2008. It was for 5 years at a rent of £30,000 per annum, guaranteed by Amarjit. By a letter dated 7^th March 2008, (“the deferral letter”) Baljit deferred payment of the rent until demanded. The rents were subsequently demanded in mid-December 2010, as a prelude to forfeiture. The relevant rent arrears have more recently resulted in a judgment against Amarjit, obtained by Baljit. Despite this, they both appeared at the trial before me by the same Counsel. At the time of the hearings before me, no steps had been taken to enforce the judgment, and Amarjit feigned ignorance of the position, which did nothing for his credit. Amarjit has, I should mention, been embroiled in ancillary relief proceedings, and it may be that the judgment was thought to be helpful to defeat the claims of his wife. She previously successfully applied for annulment of a bankruptcy order made on Amarjit’s own petition. That is not a matter for me, but for the family court dealing with the claim. Whatever view might be taken of these manoeuvrings, if that is what they were, the lease did not become a sham because of them. The lease was granted by the registered freeholder (Baljit) to a tenant (Anjali) who was in fact carrying on business at the premises, and the deferral letter would not have been necessary if the lease was simply a pretence. I have seen and heard Baljit and Amarjit in the witness box. Their evidence was far from perfect. For example, each gave evidence contradicting his own pleaded case about the existence and efficacy of a CCTV system at the supermarket. Nevertheless, on the genuineness of the lease, Baljit’s evidence rang true. He was concerned, when he learned, before the Claimants came on the scene, that Amarjit was thinking of selling the business, to collect what was due to him, and made plain that he would expect all arrears to be paid up before he either agreed to an assignment of the lease (his consent was required) or (an option that he acknowledged) granted a new lease. He did not, however, wish to scupper any deal his brother might be able to set up and did not wish to be unduly obstructive. Had, therefore, the deal looked likely to founder on whether the passing rent would be (say) £20,000 or £30,000 per annum, he would in my judgment have much preferred to have £20,000 actually paid than £30,000 not being paid. Likewise, had there been a small shortfall on the arrears, he might have consented, leaving a small shortfall outstanding. As it happens, this was never a scenario he ever faced, as none of the arrears was paid off.

The running of the supermarket business was assumed (a deliberately neutral word given the issues I have to decide) by the Claimants, Kashmir Singh ("Kashmir") and Nirmala Devi ("Nirmala") in September 2010. They carried on the business until evicted from the supermarket by Baljit's bailiffs in January 2011.

Kashmir and Nirmala are husband and wife. They have 4 young children. Kashmir was for many years an employed butcher. Nirmala looked after the home and children. They had savings of about £40,000. With that, and other help from family and friends, they claim to have bought the supermarket business, including a lease.

It is undisputed that at least £60,000 passed hands, so as purportedly to purchase something. It is in issue precisely what the £60,000 was paid for, and to whom. Both sides say that the £60,000 was paid largely in cash, though Kashmir and Nirmala say (now) that £2,000 was paid by two blank cheques of £1,000 each, drawn on the account of a friend of Kashmir (Santok Singh) both of which were completed later in favour of M. Gill, who has a connection with Rani. Rani sought to persuade me that the cash cheques ended up with M. Gill because of some gold transactions involving Nirmala, but I felt unable to accept this evidence. Santok Singh confirmed that the purpose of his giving the blank cheques was to help the supermarket purchase, though it is possible they were applied unbeknown to him for some other purpose. There was however evidence of other payments derived from property owned by the Defendants’ family which were paid to M. Gill. This was confirmed to Mr Uddin (who appeared for Kashmir and Nirmala) over the telephone by Harnesh Mahli of the managing agents collecting rents for the family. He retracted this statement during his oral evidence, claiming to have been pressured by Mr Uddin into saying what he said over the telephone, saying instead that M. Gill was paid as a cleaner. I found this evidence wholly improbable. Nor did it square with the evidence of the telephone conversation given by Sonia Bahia, Mr Uddin’s assistant. Despite some confusion over whether there were two or three cheques, her evidence of the conversation, supported by an attendance note, was overall clear and convincing. I accordingly find that the two cheques for £1,000 each were part of the £60,000, and ended up with M. Gill for reasons which have not been revealed. Quite what the relevance of the point is, credibility issues apart, is unclear. However, the Claimants say that the business was a family business and that the parents as elders, especially Gurdial as father, pulled the strings. They buttress this by evidence of when Gurdial and Gurmit were at the supermarket both following his (as they portray it) supposed retirement, and after 22^nd September 2010, when they took over. None of this evidence was very helpful to me. I need to know who agreed what, and when, and, in considering that question, the legal structures must at least give a clue. Returning to the M. Gill point, the fact that £2,000, along with some rental income, may for some reason or other have gone to her and not to any of the supposed contracting parties, or the person or persons who owned the property from which rent was derived, does not really take matters any further. One possibility hinted at in evidence was that M. Gill was really a pseudonym for someone else in the family, and had no separate existence. I reject that, accepting instead Rani’s evidence about her general acquaintance with M. Gill.

For completeness, in case the point has more relevance than I have given it credit for, I find that Gurdial and Gurmit were not in regular attendance at the supermarket after Kashmir and Nirmala took it over, though Gurdial was occasionally there, as was Gurmit, though less so. I regret that they both distanced themselves (unnecessarily) from the casual workers who assisted, both before and after the takeover. However, to elevate (as Kashmir and Nirmala did) Gurdial’s role to that of someone who trained them in the running of the business is exaggerated and wrong. The casual workers’ evidence was also exaggerated, presumably out of a false sense of loyalty to Kashmir and Nirmala, as was the evidence of Parkash Gill, who had a historic dispute with Gurdial and Gurmit and claimed (wrongly) that Gurdial worked at the supermarket until it closed. Other evidence (Mr Mendez and Mrs Strange’s witness statement, which she did not adhere to fully in the witness box) was simply mistaken on the point. Moreover, Gurdial’s occasional presence did not indicate a role as head of the family which turned the deal into one to which he or Gurmit were parties. For completeness also, they were not, as Kashmir and Nirmala said, living in the flat above, nor was anyone else. The flat had no residential planning permission and was barely habitable, despite a glowing description in agents’ particulars approved by Baljit in 2007.

Kashmir and Nirmala say that they agreed to buy the business from Gurdial and Gurmit, and that the £60,000 was a premium for the business, to include a lease. In their reply to Amarjit and Anjali’s defence, they say that there was to be a new 5-year lease at a rent of £380 per week. Their dealings, initially, were with Gurdial and Gurmit, who were temporarily running the supermarket during Amarjit's absence on holiday in August 2010, and to whom they paid £5,000 on 18^th August 2010. That was the date, their pleaded case and evidence suggests, by which agreement with Gurdial and Gurmit was reached, though many of the discussions, according to them, were through intermediaries, Jasvir and Surjit Singh. The former of those 2 individuals did not give evidence before me, as he could not be found, despite the issue of a witness summons. I draw no adverse inferences against any of the parties from his absence. The second individual did give evidence. He appeared to regard his own witness statement with alien suspicion, and his oral evidence was delivered with a high degree of excitement. I felt he was trying too hard to assist the Claimants (to whom he is now related by marriage) come what may. He was a very poor witness indeed. I could not in the circumstances safely rely on his evidence.

Kashmir and Nirmala also say that a further £20,000 was paid on 23^rd August 2010, £12,000 on 24^th August 2010, and £23,000 on 16^th September 2010. All these payments were made, they say, to Gurdial and Gurmit. I reject the latter point. It is unlikely that Gurdial or Gurmit were present on 24^th August and 16^th September when the money was paid, a point confirmed (as regards 16^th September 2010) by Mr Vaghela, the accountant, who told me (and I accept) that he, but not Gurdial or Gurmit, was present on that date. In addition, Kashmir and Nirmala say that an additional £10,000 was paid by them on 21^st September 2010, £5,000 as rent to a Mr Khan of Pinks surveyors (on behalf of Gurdial and Gurmit) and £5,000 towards the stock that had just been counted, and was to be bought from Gurdial. They say the value of the stock had been estimated at £15-17,000, and they were awaiting a final figure. Over time, according to them, the figure went up in stages to, eventually, approximately £52,000.

It is puzzling how it is that Kashmir and Nirmala can have thought they were buying anything from Gurdial and Gurmit when the business was owned by Anjali (who had a lease) and the freehold by Baljit. Their answer is they were not told this. Yet when the proceedings started, they made their claim against Baljit alone, claiming that they had been told by Gurdial and Gurmit that he owned the property. They now claim they did not know this until they were evicted. The change of position is blamed on the former solicitors, and their failure to translate the claim form and original witness statement. I find this an implausible explanation, which causes me to approach the whole of their evidence with caution. In addition, each of them came across as reluctant or unable to give straight answers in the witness box.

Gurdial and Gurmit both say that they explained to Kashmir and Nirmala that the business was Anjali’s which was their son’s (Amarjit’s) and the property was owned by their other son, Baljit. The two sons were both then (August 2010) on holiday and they would have to speak to them. It is accepted by Kashmir and Nirmana that consultation with the sons was mentioned. In my judgment, it is much more probable than not that Gurdial and Gurmit would have mentioned the ownership, and why they needed to talk to their sons. In the meantime the £5,000 was paid, according to Gurdial and Gurmit, as a goodwill gesture so that Kashmir and Nirmala would have the first right to negotiate with Amarjit on his return. This would be refundable if the deal did not proceed. That, it seems to me, is a much more likely scenario than the scenario advanced by Kashmir and Nirmala, namely of Gurdial and Gurmit negotiating on their own behalf, or as agents for undisclosed principals. This was not a family where all deferred to the parents. There was, naturally, due respect passing from the younger generation, but Amarjit and Baljit, it became clear from hearing their evidence, were both fully Westernised and would regard anything in their own names as theirs and make their own decisions, as happened, I am sure, in this case.

Amarjit returned to England on 23rd August 2010. I am satisfied that no deal was done before then, except as regards the payment of a returnable deposit. That was done after Gurdial spoke to Amarjit in America over the phone, and then spoke in turn to Gurdial over the phone. Amarjit in his witness statement gives a detailed explanation of 4 meetings, with various comings and goings, starting in the afternoon of August 23^rd. This cannot be accurate, as he did not arrive back until the early evening. There is however no doubt that Kashmir and Nirmala attended on that day in the evening, along with, for at least part of the time, Jasvir and Surjit Singh. The only reason for the visit, in my judgment, was because of Amarjit’s return. Kashmir and Nirmala were keen to move forward, but nothing could be finalised while Amarjit was still on holiday, because Anjali owned the business. I am satisfied that they knew this and that, upon his return, Gurdial and Gurmit played no significant part in the discussions.

Amarjit’s case is that he eventually agreed for Anjali a price of £60,000 for the goodwill. £25,000 was paid that day, including the £5,000 previously paid which was first repaid. The rest was paid as indicated above. There is an issue as to whether Gurdial went through the rigmarole of repaying money to Kashmir which then went round effectively in a circle to Amarjit (for Anjali). I somehow doubt it, but do not think it matters as I am clear that Kashmir and Nirmala knew they were dealing with Amarjit and that he was in turn acting for Anjali, because he said so. All their subsequent dealings were with Amarjit too, who introduced them early on (initially on 16^th September 2010) to his accountant, who gave credible evidence before me about the dates of his meetings, backing those dates up with diary entries. I am less than convinced of the accuracy of the detail of his recall of those meetings as they are not supported by contemporaneous notes. I think he may have been reminded of the detail by his client, so his memory can only have been as good as his client’s reminder.

Amarjit says that the lease was a separate matter. However, it is clear from his witness statement that an assignment (according to him) of the existing lease was to proceed in tandem with completion of the purchase, but this would require Baljit’s consent. So it would, but an assignment required Anjali’s agreement also, and this was in my judgment part of what was agreed as the composite deal, albeit subject to Baljit’s consent. In addition, the possibility of a new lease was also raised, a point which Baljit confirmed he had explained to Amarjit. Amarjit says he told Kashmir and Nirmala about the arrears, but I find that he did not do so at this stage. It would not be a sensible way of negotiating. Amarjit knew that with the sale of stock, fixtures and fittings, the proceeds ought to be enough to cover the arrears. There may have been some discussion about a rent of £380 per week but nothing could be finalised on that score without Baljit’s say so.

At the same time, Amarjit agreed to sell Anjali’s stock at a valuation. A stock take would be arranged immediately before the takeover. I do not accept that a figure of £15-£17,000 was mentioned, then or at any time. Finally, a figure of £25,000 was according to Amarjit agreed for fixtures and fittings. I am prepared to accept that this was agreed (though denied by Kashmir and Nirmala) as it is referred to in a document dated 20^th October 2010 signed by Kashmir to which I refer later.

The goodwill in the supermarket business had no value without the right to be there, so that a secure lease was vital. It is obvious that Kashmir and Nirmala were foolish to proceed without legal advice, but they did so.

In my judgment, the deal which was done on 23^rd August was for the sale of the business, including a lease. That might be a new lease, but things were then too uncertain for that to crystallise as a binding obligation, and neither Amarjit nor anyone else had authority to bind Baljit. Accordingly, the deal as done must, as Amarjit says it was in his witness statement, have been for the assignment of the existing lease. If subsequently the relevant parties agreed a new lease, that would be fine, and the agreement would then be varied. Without such further agreement, the sale of the business (which Kashmir and Nirmala proceeded to pay for) carried with it an agreement to assign the existing lease, subject to Baljit’s consent, which everyone was confident would be forthcoming.

Thus seen, the agreement was plainly an agreement to which section 2 of the Law Reform (Miscellaneous Provisions) Act 1989 applied and was void. No part of it can be sued upon: Keay v Morris Homes (West Midlands) Limited [2012] EWCA Civ 900, even the parts that do not relate to land.

Mr Uddin seeks to get round this in a number of ways. He says that there was a constructive trust, giving rise to a lease of the kind his clients say they were expecting – i.e., 5 years at £380 per week (or £20,000 per annum, as it was sometimes put, though £380 per week actually falls short of that figure). I shall assume without deciding that this could happen under a constructive trust. For that to happen, Baljit’s conscience needed to be affected as this required a new lease, and he never agreed to that. Nor did anyone else on his behalf, I find. There would not even be a constructive trust of the existing lease, as there could be no effective dealing with the existing lease without Baljit’s consent as landlord, and, as I have said, Baljit’s conscience was not affected, and he had not consented.

Another way Mr Uddin seeks to get round the problem is by saying that a periodical tenancy (or possibly a tenancy at will) came into being arising from the payment of rent. This depends on whether the £10,000 was paid (5 as rent; the other 5 towards the stock) on 21^st September 2010, as Kashmir and Nirmala contend. Although this is the case of both of them, only Kashmir (of the 2 of them) was at that meeting. Kashmir says that Gurdial was there also, but I find he was not. The main purpose of the meeting was a stock take, and that was too arduous a task for Gurdial even to contemplate. It was not his stock, either, but Anjali’s. Kashmir also says that Mr Khan of Pinks demanded rent and that was why he paid £5,000 to him. I reject this evidence. Mr Khan was advising Baljit. They were there together to collect the arrears and then to deal with the principle of an assignment or new lease, as appropriate. I do not believe that Mr Khan would have been so foolhardy as to accept, still less demand, rent when his client held the trump card of having the ability to block the transaction unless the arrears were paid. That would make no sense, as the creation of a periodical tenancy would undermine Baljit’s position, and might even operate as a surrender of Anjali’s lease if Amarjit went along with the idea. Whilst Baljit did not wish to scupper the deal, he was not willing to relent completely on the essentials of his basic demand for arrears. I therefore find that this £5,000 was not paid to Mr Khan. Nor was £5,000 paid towards the stock. As to the £60,000, £58,000 of this was paid in cash to Amarjit direct for Anjali, apart from the first £5,000 which was paid to Gurdial in Amarjit’s absence and then paid to Amarjit on his return. The two blank cheques were handed to Amarjit.

I have seen the records of the stock take. The valuation, which was satisfactorily explained by Amarjit in his oral evidence, comes to £52,163.77. A number of people claim to remember this figure on the Defendants’ side. A feature of their witness statements is that language substantially identical to that used in other witness statements is sometimes used by witnesses claiming to have written their own witness statements in their own words. I very much doubt the genuineness of all those recollections. Ultimately, this does not matter. The records confirm the figure. In addition, the figure was reconfirmed by Kashmir’s signature on a document dated 20^th October 2010, which acknowledged that a total of £77,163.77 was to be paid in full by Kashmir to Anjali on or before 21^st December 2010. The explanation for that date, according to Amarjit, was that Kashmir did not have sufficient money to complete and, at Jasvir Singh’s urging, and against the promise of a personal guarantee from Jasvir Singh, a further 3 months time to pay was given on 21^st September 2010. I accept that explanation. The note of 20^th October 2010 is a document Amarjit asked Kashmir to sign because he was worried about the way Kashmir was managing his obligations to others. I accept that explanation also. I also find that the signature is genuine and that no trickery was used to obtain it. As already mentioned, the same document acknowledged the £25,000 outstanding for fixtures and fittings – hence the higher total figure of £77,163.77.

By December 2010, nothing more had been paid for the business and Amarjit was seriously worried about whether he would be paid what was outstanding at all. Towards Christmas, he told Baljit what the position was. The principal concern then seems to have related to the stock, which was being or had been used in the business without being paid for, as well as the shortfall in the commission payments. The position was that Kashmir and Nirmala were running the supermarket, without payment of rent, rates or electricity bills, all of which were still being paid by Anjali. In addition, they were effectively living there during the week when the children were at school, because of the late opening hours. Yet they had no lease, and no right to remain there. They had gone into possession with the permission of Amarjit (for Anjali) so their licence to remain could not survive a forfeiture of the Anjali lease. The lease to Anjali was not for residential purposes and they had no separate licence from Baljit who said he did not know they had taken up possession until his brother told him what had happened around Christmas 2010. I accept this evidence. Baljit was working in Manchester at the time (though living at the same house as his parents, Amarjit and Rani) and did not, I find, have occasion to visit the supermarket during this period until Christmas, despite the evidence of some who claim to have seen him there during this period, which I think must be wrong.

On 6^th January 2011, a notice was served on Anjali by Roy Summerfield of Midlaw Legal Services at the supermarket premises (as provided by the lease) requiring payment of all arrears by 20^th January and threatening forfeiture in the event of non-payment. At the same time, a notice was served on Kashmir and Nirmala (though left with someone else at the supermarket) calling upon them to complete an assignment of the lease and to pay for the stock. The thinking was that the stock monies would go a long way to paying off the arrears. The fixtures and fittings payment was not mentioned but, as I have said, Kashmir had previously acknowledged this as due. The notice went on to threaten forfeiture of the lease and concluded by giving notice to vacate the premises on or before Thursday 20^th January at 4 pm if the stock payment was not made and the lease assignment completed.

Kashmir says that at this time he paid a further £5,000 rent, which Baljit denies. I reject Kashmir’s evidence, just as I reject it in relation to the alleged payment of rent on 21^st September 2010. Baljit was taking steps to evict them, should that prove necessary. It is improbable that he would have taken a quarter’s rent thus undermining the whole process. Amarjit did collect some cash at this time from Kashmir towards the commission account liabilities mentioned below, but that was a separate matter.

Kashmir and Nirmala say they did not see the notice to vacate served at the supermarket. I do not accept that evidence. Shortly afterwards, Kashmir made an appointment to see Mr Khan of Pinks to discuss the matter. That must have been triggered by the notice. The meeting (also attended by Baljit but not Amarjit) was an angry one and ended inconclusively. There is a short contemporaneous attendance note setting out the essentials of the meeting

The arrears under the Anjali lease were not paid by 20^th January 2011 or subsequently.

On 21^st January 2011, bailiffs attended the supermarket and evicted Kahmir, Nirmala and their children. This was clearly a distressing event for them and the bailiff in charge (Mr Groves) judged by his oral evidence, seems to have confused the procedure to be adopted with a landlord’s distraint as he was exercising dominion over all possessions except personal possessions. All he should have done was effect possession of the premises. He did that as well, producing a series of notices that looked like (but were not) court orders. I was (to put it mildly) unimpressed by the procedure adopted as it emerged in evidence. Legally, however, Kashmir and Nirmala had no rights. They had a void contract which they had not fully performed, which related to a lease (the Anjali lease) which had arrears (for which they were not responsible but which nonetheless existed). That lease was not for residential purposes, not even in part, and their licence (which was from Anjali) was not for residential purposes either and could not survive forfeiture. They were not therefore covered by the Protection from Eviction Act 1977 as having a statutory right not to be evicted without a court order: compare Patel v Pirabakaran [2006] 1 WLR 3112.

It follows that there was nothing unlawful about the eviction as such, distressing though it undoubtedly was for those on the receiving end.

After the eviction, Kashmir and Nirmala, following a court order, were allowed back in to collect certain of their possessions. The following claims have been made by them for wrongful interference with goods:-

Kashmir and Nirmala claim a number of heads of relief. In so far as they claim damages for breach of contract or wrongful eviction, their claims cannot succeed for the reasons I have given. Their “contract” was void and they were not wrongly evicted. It follows that their claims against Baljit, Gurmit and Gurdial are all dismissed, apart from (in Baljit’s case) the limited damages inquiry already indicated.. Further, as I have found that Amarjit at all times acted openly for Anjali, all claims against Amarjit must be dismissed also, as must his (as opposed to Anjali’s) counterclaim.

Kashmir and Nirmala are however entitled to recovery of the £60,000 paid by them to Anjali. They are not in my judgment entitled to recovery from anyone else as the payments were all received on behalf of Anjali. They are entitled to recover the £60,000 because there has been a total failure of consideration. The business they purchased, and its goodwill, meant nothing without the lease, and, as the agreement to acquire the business including the lease was void, they acquired nothing. The claim is thus restitutionary, to avoid unjust enrichment. Mr Mitchell for Anjali did not resist this conclusion in principle (depending upon my findings on the contract issue) because Anjali also has an unjust enrichment claim. He referred me in this connection to Westdeutche Landesbank Girozentrale v Islington LBC [1996] AC 669 and the commentary at paragraph 13-2- of Goff & Jones: The Law of Unjust Enrichment (8^th ed.). I agree with Mr Mitchell that the result of a finding that the “contract” under which the parties were acting was void is that any party must restore benefits the retention of which would unjustly enrich that party.

There is one further claim made by Kashmir and Nirmala, namely for money expended on a boiler. I find, however, that this sum was paid by Baljit, who produced the relevant invoice and says (which I accept) that he paid it.

I turn to consider Anjali’s counterclaim. It is made by Amarjit as well but is in truth Anjali’s, as Mr Mitchell accepted.

The supermarket had a number of accounts, including commission accounts, which Anjali remained responsible for, either directly or indirectly via the guarantee given to Gurdial in 2005. Following the takeover, cash receipts were passed on to Amarjit by Kashmir to cover the liabilities arising from those activities. Thus, Kashmir and Nirmala were able to keep the commission accounts going. I have seen a detailed breakdown of the transactions. Kashmir stopped covering the liabilities after a while and Amarjit caused Anjali to meet them.

Kashmir and Nirmala agreed to indemnify Anjali against the liabilities arising from their trading activities as part of the deal by which they agreed to buy the business, though any commission income should in turn be credited back to them, as has occurred in the schedules prepared by Amarjit. This applied not only to the commission accounts, but also the existing Nisa account which was used for the supermarket, but remained the responsibility of Anjali. The expectation was that new accounts would in due course be opened for Kashmir and Nirmala, but this never came about.

Mr Mitchell accepts that section 2 potentially (depending on my findings) applies to the indemnity arrangements, as they were part of the original deal. He therefore claims a restitutionary remedy. He is clearly right about that in principle. However, the point is hardly pleaded with clarity, the original defence and counterclaim only claiming “damages” though referring earlier to unjust enrichment “for the reasons set out in this defence” (paragraph 49), which reasons I cannot find so far as concerns any unjust enrichment claim. The unjust enrichment allegation as pleaded is also limited to receipt of the commission agency payments. The schedule of loss, and supporting “M” bundle, in which the details of the claim were to be found, were served late in the day. The “M” bundle includes some documents which are barely legible, is not easy to follow, not following the form of a conventional pleading, and appears to go beyond the pleaded defence and counterclaim. It seemed to me that much of its significance passed Mr Uddin by, and, whilst this is regrettable, it is also understandable. Whilst Mr Mitchell understood it and could explain it, he had the benefit of access to his client, which Mr Uddin did not. The matter was addressed, but only in general terms, in Mr Mitchell’s written opening.

Whilst therefore Kashmir and Nirmala are in principle liable for any benefits they have derived from the “void” contract, it seems to me that a reliable figure can only be determined by an account and inquiry.

Mr Uddin, following the trial, served supplemental written submissions raising new points, which Mr Mitchell understandably objected to. However, it seems to me that the source of the problem was, at least in part, unclear and diffuse pleading on Anjali’s part. None of the parties should be disadvantaged by this given the availability of an account and inquiry. Mr Mitchell also suggested in paragraph 32 of his closing submissions for Baljit that an account would need to be taken, a point he repeated in paragraph 18 of his closing submissions for Amarjit and Anjali. I will reserve the further account and inquiry to myself and will strictly limit the evidence (not going over matters already adequately canvassed). I conclude by saying that as things stand it is clear that a substantial sum will be due on the account and inquiry to Anjali, which is likely to exceed the £60,000 due to Kashmir and Nirmala. I am not therefore ordering immediate payment of the £60,000, as the balance on the final account is likely to require payment in the other direction.

For the avoidance of doubt, the benefits for which Kashmir and Nirmala are accountable do not include the £25,000 for fixtures and fittings, as they have derived no long term benefit from the fixtures and fittings. The original stock (£52,163.77) is included, however, as are outstanding Nisa accounts (which appear to amount to £26,985.22) but excluding a penalty charge. Any loss of stock following eviction is recoupable from Baljit for wrongful interference with goods, but does not affect Anjali’s entitlement. The account should also include machine monies, which presently appear to amount to £80,881.27, and judgments and utility supplies which appear to amount to £16,792.08. These figures are summarised in paragraphs 11, 12, 14 and 15 of Mr Mitchell’s closing submissions for Amarjit and Anjali. There is also a claim in principle for rent or its equivalent, which is good in principle, but that should be at the rate of £380 per week, as that is what Kashmir and Nirmala acknowledged to be a proper rent. I do not think it is right to treat Anjali’s own rental liability, at a greater rate, as having been incurred during the 4 months period of Kashmir’s and Nirmala’s occupation. That rental liability was incurred, albeit prospectively, in February 2008, and there is no evidence demonstrating that this was an appropriate rent in 2010.

I invite the parties to agree an order giving effect to this judgment, and to agree proportionate directions for the account and inquiries. As much of the evidence has already been heard, I see no warrant for the account and inquiries being drawn out. I would even express the earnest hope that the parties might now, even at this late stage, settle their differences. Further litigation, at disproportionate expense, cannot be in anyone’s interest.