Rollerteam Ltd & Anor v Riley

The context of this case is what is now a bitter family dispute. It is all the more
unfortunate because it does appear that originally family relations were
reasonably harmonious. Indeed, members of the family co-operated together in
what has become a fairly successful enterprise. This is the Sherlock Holmes
museum at the well-known fictional detective’s residence said to have been at
221B Baker Street in London but now placed at 239 Baker Street. The
pleadings in the action disclose wide ranging issues. Nevertheless, by the
conclusion of the trial it had become apparent that, whilst there were a number
of subsidiary issues, the central question is whether or not a concluded
contractual settlement had been reached of four legal actions and, if so, on what
terms. There is both a claim and counterclaim. However, it is the counterclaim
and defence to counterclaim which have taken up the great majority of time in
the case. The claim itself raises little of substance. Indeed, it is in my view
clear that, subject to the resolution of one factual point and whatever the
outcome of the counterclaim, the Claimants are indeed entitled to some form of
declaratory relief on the claim.

The First Claimant (“Rollerteam”) was originally incorporated by the Second
Claimant, Mr Aidiniantz, in 1984 to effect leaflet distribution on roller skates,
but in 1989 it was used as a vehicle for the purchase of 239 Baker Street. It was
Mr Aidiniantz’s idea to found a Sherlock Holmes museum but the site was
acquired with deposit money from his mother, Mrs Grace Aidiniantz. To an

Ms Riley, the Defendant, and Ms Decoteau, the Second Counterclaimant, are,
as noted, Mr Aidiniantz’s half-sisters. Ms Riley’s principal occupation is that
of a publisher; at the material time she was concerned in a company called
Square Peg Media Limited. Ms Decoteau, on the other hand, was, with Mrs
Aidiniantz, occupied in working on SHIS business.

The breakdown in family relations may be traced back to September 2012.
Until then, the cash takings from admission receipts to the museum had been
taken each evening for safekeeping by Mrs Aidiniantz or Ms Decoteau to the
safe at Mrs Aidiniantz’s home, 1 Parkgate Road in Battersea. Mr Aidiniantz
would then decide to where the money was to go, whether into one or other of
the bank accounts or retained as cash. In September 2012 Mr Aidiniantz
formed the view that the cash takings were not being properly accounted for.
He cut off access to funds for the other family members. This led to Ms Riley

Mr Aidiniantz’s resort to litigation then led to the institution of further legal proceedings by members of the family. First, Ms Riley commenced proceedings for possession of the house where Mr Aidiniantz lived, that is 1 Albion Mews, London W2 2BA. Ms Riley was in fact the registered owner of the house, although Mr Aidiniantz lived there; he claimed that the house was held by Ms Riley on trust for him. Second, Ms Riley and Ms Decoteau caused SHIS to institute legal proceedings against Mr Aidiniantz and Rollerteam as well as the two other Sherlock Holmes companies I have mentioned. The allegation was that Mr Aidiniantz had been misappropriating the funds of SHIS. In December 2012 a freezing order was granted in favour of SHIS and, specifically, a cash sum of £535,000 which Mr Aidiniantz was holding at his home was ordered to be paid into court. A subsequent attempt by Mr Aidiniantz to have this Order set aside before Proudman J was substantially unsuccessful. Finally, Mrs Aidiniantz launched an action against her son, Mr Aidiniantz, and Rollerteam in which she claimed that in reality the entire share capital of Rollerteam and the museum business beneficially belonged to her.

Thus, there were four sets of proceedings on foot as at April 2013: (1) the Rollerteam claim (2) the 1 Albion Mews possession proceedings (3) the SHIS

On 7 April 2013 Ms Riley and Mr Aidiniantz met up unexpectedly at their mother’s home at 1 Parkgate Road. Mr Aidiniantz was particularly upset about being estranged from his mother and was attempting to see her. By chance Ms Riley was there. After a rather heated altercation, Mr Aidiniantz and Ms Riley went to a nearby café for a discussion. It was there that the notion of resolving all the disputes and restoring family harmony came to be put forward. It would seem that the discussions in the café were considered by both parties to be potentially productive. They both returned together to 1 Parkgate Road where there was in Ms Riley’s words an “emotional reunion” or, as Mr Aidiniantz put it, a desire to “heal our wounds”. Ms Riley and Mr Aidiniantz agreed to meet for lunch at a club, Home House, the following day in order to explore further the possibility of compromise. In the meantime Ms Riley and Ms Decoteau spoke on the telephone about what might be an acceptable settlement.

Over lunch on 8 April 2013 there were wide ranging and apparently harmonious discussions over how to resolve all points of contention. I need not recite all points discussed since, immediately following the lunch, Mr Aidiniantz sent an email to his solicitors, and it is common ground that this email accurately covers the ground apart from one matter relating to a Mr Tariq Siddiqi. He was a gentleman who had been providing some assistance to members of the family

I should refer in some detail to Mr Aidiniantz’s email of 8 April 2013 to his

There then followed frequent and extensive email communications. It will be necessary for me to refer to a number of these emails, but before doing so I should outline the course of some critical events.

On 11 April 2013 there was a formal document signing meeting at 1 Parkgate Road. Present were Mr Aidiniantz, Ms Riley and Ms Decoteau. Mrs Aidiniantz was also there together with Mr Suleman, a solicitor whom the family had previously used, in order to advise her. This was at Mr Aidiniantz’s suggestion. He was concerned at the solicitors then on the record, Smithfield Partners, running up costs which he was going to have to bear since Ms Riley had been paying their mother’s costs and he was agreeing to pay her costs. He was also most anxious that Smithfield Partners should not learn about the sums of money which he and Rollerteam would be paying to Ms Riley and Ms Decoteau. Mr Aidiniantz handed over to Ms Decoteau £300,000 (in fact he had only brought with him £289,000 but the missing £11,000 was taken from the safe). This £300,000 was intended as part payment of the £1 million which was to be paid to Ms Decoteau.

It was at this meeting on 11 April 2013 that the following documents were executed:

Following the 11 April meeting there continued to be extensive email communications. It is also evident that Mr Aidiniantz was very keen that Ms Riley should dismiss Smithfield Partners as her solicitors; in his view there was no need for them now that settlement had been reached, they were running up bills at his expense and it was most undesirable that they should learn about the financial details of what had been agreed. Eventually, on 21 May 2013 Ms

Finally, on 22 May 2013 a third Consent Order in Tomlin form was executed by Mrs Aidiniantz and Ms Decoteau. They signed personally on behalf of SHIS. The effect of the Order was to bring the SHIS proceedings to an end and payment out to Rollerteam of the £535,000 held in court. Again, it had originally been envisaged that this money would go to Ms Decoteau. This, however, did not happen. It is noteworthy that the Order also provided that SHIS was to pay the Defendants’ costs. This is in contrast to what had been provided in Mr Aidiniantz’s original email of 8 April 2013. However, given that henceforth SHIS was intended to be under the complete control of Mr Aidiniantz, it may not have been thought material. There was no Consent Order terminating the 1 Albion Mews possession action; indeed, it was not specifically addressed by the parties. I presume this was because it was generally assumed that with Mr Aidiniantz obtaining beneficial ownership of the house the possession proceedings against him necessarily lapsed.

In all the lengthy email correspondence passing between Mr Aidiniantz and Ms
Riley after 8 April 2013 there was no suggestion from either party that
settlement of the litigation had not been achieved until an email of 18 August
2013. By this email Mr Aidiniantz for the first time asserted that there had only
been a proposed overall settlement which had not materialised. Following this
email, relations between him and Ms Riley rapidly deteriorated. Mr Aidiniantz
attempted to move into 1 Parkgate Road where his mother (with a carer) and her
half-sister with Stephen Riley were living. There followed a flurry of legal
proceedings including (1) the present claim seeking to uphold the declarations
of trust of 11 April 2013 (2) non-molestation proceedings against Mr Aidiniantz
brought by Mrs Aidiniantz’s half-sister (3) winding up proceedings instituted by
Mr Aidiniantz against both SHIS and Ms Riley’s company, Square Peg Media
Limited. Family relations were once again at a very low ebb. However, for the
purposes of this judgment I do not need to elaborate on these legal proceedings.
The main question before me is whether or not there had previously been a
concluded settlement of the litigation.

The central issue before me had by the end of the trial become:

The only witnesses called to give evidence before me were Mr Aidiniantz, Ms
Riley and Ms Decoteau. They were each cross-examined extensively over a
wide range of matters. Their evidence was helpful in providing some
clarification and information from time to time. However, I do not propose to
examine what each had to say in any detail. This is because in my view
resolution of the factual issues in this case largely depends on what would have
been reasonably understood from what the parties communicated to each other
and what they did. It does not depend on what individuals may individually
have thought at the time. I therefore turn to consider the email traffic and other
communications passing between the parties at the material time.

I have already set out the content of Mr Aidiniantz’s email of 8 April 2013
which he sent to his solicitor and copied to Ms Riley. The consistent theme of
all the many subsequent emails between Mr Aidiniantz and Ms Riley is that the
parties considered themselves to have made a deal. It is right to say that the
inter-solicitor communications are rather more cautious. Both solicitors were
understandably anxious to protect their respective clients and not commit them
to something which they might come to regret. Nevertheless, it is important to
bear in mind that this was a settlement negotiated directly between individuals
rather than through the medium of solicitors. At Mr Aidiniantz’s request, the

If this judgment is to be kept within reasonable bounds, I cannot do more than mention some of what the voluminous communications show. On 9 April 2013 Mr Aidiniantz wrote to Ms Riley:

It was following the above communications that the signing of documents took place on 11 April 2013 at 1 Parkgate Road and Mr Aidiniantz handed over £300,000 as I have described.

Following the events of 11 April 2013 Ms Riley was clearly of the view that the litigation had been settled. That afternoon she wrote to Rollerteam’s mortgagee:

On 14 April 2013 Ms Riley again complained by email to Mr Aidiniantz that, although they had agreed everything, “this is all being just strung out”. She remarked:

There followed lengthy correspondence from Mr Aidiniantz in which he maintained his complaints about Smithfield Partners and also about Mr Siddiqi. He also floated various ideas for ways of paying off Ms Decoteau and Ms Riley which might in his estimation give rise to tax savings. He raised numerous other concerns and queries although, as I have noted, at this time he was

There still remained for disposal by Court Order of two pending sets of legal proceedings (apart from the possession action), that is the SHIS claim and the Rollerteam claim. Davenport Lyons put forward for consideration two draft Orders for these actions which appeared to diverge from what had been agreed between Mr Aidiniantz and Ms Riley. Nevertheless, on 2 May 2013 Mr Aidiniantz assured Ms Riley that she could readily agree to these drafts:

On 10 May Mr Aidiniantz repeated a constant message: “Leave Smithfield –
you don’t need them.” Ms Riley finally did as asked in order to bring finality to
what had been a long running saga. She notified the court that she would be
acting in person. As I mentioned earlier in this judgment, consent orders were
finally executed (a) on 21 May 2013 disposing of the Rollerteam claim and (b)
on 22 May 2013 disposing of the SHIS claim. The former was signed by
Davenport Lyons on behalf of Rollerteam and by Ms Riley, Ms Decoteau and
Stephen Riley personally. The latter was signed by Mrs Aidiniantz and Ms
Decoteau as directors of SHIS and by Davenport Lyons for the Defendants in
the action.

For Rollerteam and Mr Aidiniantz, Mr Sims QC submitted on the claim that Ms
Riley clearly had signed the two declarations of trust on 11 April 2013. Her
assertion that what she had signed were some unidentified agreements to create
trusts could not be reconciled with the evidence. The declarations of trust
produced in evidence were consistent with the trust references in all the other
documents. Whilst it may be the case that Ms Riley had not kept copies of what
she had signed, there was no reason to believe that the trust declarations as
disclosed were anything other than genuine documents. The documentary
evidence pointed unequivocally to Ms Riley having signed these documents
whether or not she had read them through carefully before signing. A demand

Turning to the Counterclaim, it was Mr Sims’ case that no concluded binding settlement of the litigation as a whole had been reached. What had been achieved was merely consensual termination by Consent Order of each of the three separate actions. Whilst he acknowledged that the parties had been trying to achieve a settlement, his submission was that that they had been unsuccessful in this aim. The case for a concluded settlement on 8 April 2013 was not maintainable in light of the language used in the contemporary emails, and the case for a concluded settlement of the litigation on 11 April 2013 suffered from the following defects. There had been no intention to create legal relations beyond the formal signed documents; what had been agreed was merely viewed by the parties as an unenforceable moral commitment. Mr Sims emphasised the family context of the dispute and drew my attention to the observations of Danckwerts LJ in Jones v Padavatton [1969] 2 All ER 616 at 620. It was this context which explained how Mr Aidiniantz had come to pay £300,000 and made other payments as a gesture of goodwill.

Mr Sims supported his submissions with written appendices providing detailed analysis of many of the emails. He submitted that the documents showed how the parties had deliberately kept their proposals flexible as had always been the position within the family. There was here much discussion about different ways of achieving the maximum tax advantages for payments to be made to Ms Riley and Ms Decoteau. With this in mind any commitment had been

If there were a compendious binding agreement, it would in any event be
unenforceable by reason of section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989 since the terms of the agreement would have involved the
transfer of interests in land to Rollerteam and Mr Aidiniantz. Mr Sims referred
me to the observations of Peter Gibson LJ in Firstpoint Homes Ltd v Johnson
[1995] 1 WLR 1567 at 1571E-H. Whilst a genuine collateral contract might
avoid the operation of section 2, the courts would be astute to avoid artificiality
just in order to avoid the operation of section 2. He referred me to Business
Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622 at
[42-3] and Sukhlall v Bansoodeb [2013] EWHC 952 (Ch) at [23].

For Ms Riley and Ms Decoteau, Mr Hext QC submitted that the issue on the
claim over what kind of documents relating to the houses Ms Riley signed on
11 April 2013 was in truth insignificant. Nevertheless, I should prefer the
evidence of Ms Riley who was a much more satisfactory witness than Mr
Aidiniantz. In any event, I should not make any order for the transfer of the

The Counterclaim was, of course, the major contest between the parties. The position of Mr Aidiniantz and Rollerteam was highly unmeritorious. On their version of events they had achieved everything they wanted including the end of the SHIS claim, abandonment of Mrs Aidiniantz’s claim and the release of the money in court and in solicitors’ joint account. Yet, their contention was that they were obliged to provide nothing in return.

It was submitted that the contemporary email evidence was overwhelming in support of the case that on 11 April 2013, if not on 8 April 2013, the litigation was regarded by all parties as having been settled. At any rate, there was certainly a settlement by the time the last two Consent Orders came to be signed in May 2013. Mr Hext reminded me of a well-known passage in RTS Ltd v Molkerei Alois Műller GmbH & Co KG [2010] 1 WLR 753 at [45] per Lord Clarke. He also referred me to G Percy Trentham ltd v Archital Luxfer Ltd & Ors [1993] I Lloyds Rep 25 where Steyn LJ pointed out that performance of a putative contract may render it unrealistic to say that there was no contract. Whilst a family context might be material in some cases, here it had to be remembered that the context was essentially the settlement of commercial disputes and litigation.

As for other points raised by Mr Sims, the reality was that Ms Riley was always ready to consider methods of payment proposed by Mr Aidiniantz which he considered might ameliorate the tax position. But, as Mr Aidiniantz’s original email of 8 April 2013 showed, the overriding principle was that the money was to be paid. The existence of an agreement did not depend on mechanics of payment being resolved. Similarly, the fact that the parties or one of them might have envisaged some formal comprehensive document being drawn up to record the settlement did not necessarily mean that there was no contract until this were done.

As for section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, Mr Hext acknowledged that it might give rise to difficulty if there were a finding of a concluded contract on 8 April 2013. However, there was no such problem if the settlement agreement were concluded on 11 April 2013. Section 2 does not invalidate dispositions which actually take place such as the declarations of trust here: cf. Keay v Morris Homes (West Midlands) Ltd [2012] 1 WLR 2855 at [8]. The proper analysis was that on 11 April 2013 Mr Aidiniantz was promising to fulfil the provisions of his 8 April 2013 email if the declarations of trust were signed along with the other documents. This was a true collateral contract which was not vitiated by section 2: cf. Keay and North Eastern Properties Ltd v Coleman [2010] 1 WLR 2715.

Whilst Mr Aidiniantz had made some payments, there was still much outstanding. I was invited to give judgment for the balance due to Ms Decoteau of £700,000 and the £1 million due to Ms Riley. There are further sums owing by reference to the legal costs funded by Ms Riley, mortgage payments and household and care expenses for Mrs Aidiniantz. However, it was agreed that I

I address firstly the claim. I have no doubt that the trust documents which Ms Riley executed on 11 April 2013 were indeed the declarations of trust in evidence before me. The signature is undoubtedly hers, and no other trust documents have been produced. The fact that what Ms Riley signed had something to do with creating a trust in favour of Mr Aidiniantz in respect of 1 Albion Mews and 1 Parkgate Road was common ground. I very much doubt whether Ms Riley analysed in any detail the precise wording of the trust documents which she was signing on 11 April 2013. It is probable that the deep mistrust which Ms Riley now has for her half-brother has coloured her recollection of what she signed. I accept Mr Aidiniantz’s evidence and reject her evidence on this point.

Turning to the Counterclaim, I have concluded that on balance there was no concluded agreement on 8 April 2013. I do not accept Ms Riley’s contention on this point. There had certainly been the amicable lunch on 8 April 2013 at which the outline of an acceptable settlement was negotiated. The principle had been agreed but it was, as the email of 8 April described it, a proposed agreement. As Ms Riley put it in an email to her solicitors: “it looks like we have reached a compromise”. Nevertheless, the documents suggest that all parties were envisaging that further steps would be taken before they would be bound. There was a common desire to progress matters as quickly as possible. Final conclusion of a settlement agreement in accordance with the terms of Mr

Whilst I am not prepared to find that there was a concluded settlement of the litigation on 8 April 2013, I am satisfied that a concluded contract came into existence on 11 April 2013. The terms of the contract were those which had been set out in Mr Aidiniantz’s email of 8 April 2013 to his solicitor and copied to Ms Riley as amplified by the provisions of the formal documents signed on 11 April 2013. It is in my view quite clear from the subsequent email correspondence that from this point both Mr Aidiniantz and Ms Riley considered that a settlement had been reached on these terms. It was not until August 2013 that Mr Aidiniantz first suggested otherwise. Unsurprisingly, given the volume of the email communications, it is possible to latch onto the occasional word or phrase in an email in order to found an argument that there was no agreement. Nevertheless, I am entirely satisfied that the general tenor of the emails is only consistent with both Mr Aidiniantz and Ms Riley considering that they had from 11 April 2013 settled the litigation.

In coming to the above conclusion, I have endeavoured to follow the approach set out in the RTS case at [2010] 1 WLR 753 at [45]:

In my judgment, the following factors point strongly towards a conclusion that on 11 April 2013 the parties had reached a concluded and binding agreement:

I have taken into account Mr Sims’ submission that the family context points towards the parties not intending to create legal relations. Certainly, I accept that such a context will often be highly material. Nevertheless, in my view it is here of little weight. This is not a case of trusting family relations and informal arrangements. On the contrary, the background here is one of bitter commercial disputes and arms length litigation. Nor do I think that the fact that from time to time Mr Aidiniantz proposed possible tax advantageous ways of making payments can affect my assessment that there was a contractual obligation to make the payments. A basic obligation to pay is not dependent upon agreement as to the mode of payment. As Mr Aidiniantz said in his original email of 8 April 2013, a desire to work out the tax implications was not to affect the principle that Ms Decoteau and Ms Riley should be paid.

Finally, on this aspect of the case I should mention that I have also specifically considered two further reasons advanced by Mr Aidiniantz in evidence why there was no concluded contract. I cannot accept that it was a condition of the settlement that Mr Aidiniantz would receive bank funding for the payments he was to make. Mr Aidiniantz may well have wanted to raise money by way of a bank loan but there is no hint in the email traffic of any condition about this in the settlement. Second, the proposition advanced by Mr Aidiniantz that a party

I now turn to Mr Sims’ point on section 2 of the Law of Property
(Miscellaneous Provisions) Act 1989. This provides in material part:

The initial understanding had been the wholly general intention (i) to grant
“beneficial ownership over 1 Parkgate Road” to Rollerteam and (ii) for Ms
Riley to execute “a Trust document” in respect of 1 Albion Mews in favour of
Mr Aidiniantz. It was not until Mr Aidiniantz produced the actual declarations
of trust for signature by Ms Riley on 11 April 2013 that content was given to
the general understanding. I have already found that there was no concluded
contract prior to 11 April 2013. In my view, the proper contractual analysis of
what occurred on 11 April 2015 was that a contract was formed on the terms set

A contract where the consideration, or part of it, is the actual disposition of an
interest in land rather than an agreement to dispose of the interest is not within
section 2: see Keay cited above, especially at [8] and [27-8]. Accordingly, I do
not accept that section 2 precludes enforcement of the settlement agreement in
this case.

In the result, I find that Rollerteam and Mr Aidiniantz are entitled to
declarations on the claim that the declarations of trust dated 11 April 2013 are
valid and binding. However, I consider that this is all the entitlement that has
been established. No case for further relief as claimed in the Prayer to the
Amended Particulars of Claim has been made out. In argument Mr Sims
suggested an entitlement of occupation of 1 Parkgate Road vested in Rollerteam
pursuant to section 12 of TLATA. The section provides in part:

As far as the Counterclaim is concerned, I see no reason why Ms Decoteau
should not be paid the balance of £700,000 which Mr Aidiniantz undertook
would be paid to her. Similarly, Mr Aidiniantz undertook that £1 million would
be paid by Rollerteam to Ms Riley. I had no information about other sums
payable under the settlement and the parties were agreed that I should direct an
inquiry before the Master to establish what, if anything, is due from Mr
Aidiniantz on his promises that:

It may be that some declaratory relief could also be appropriate in respect of
future mortgage payments on 1 Parkgate Road and 1 Albion Mews. I will hear
Counsel on this. However, I am conscious of the fact that compliance with
what was envisaged by the settlement in this respect is not a matter within the
sole power of Mr Aidiniantz himself. Possibly, if in future Mr Aidiniantz does
not in fact meet his commitments when they fall due, a pecuniary remedy may
then become appropriate. Finally, I should say that I do not think it appropriate
to make any order in respect of Mr Aidiniantz’s website about Mr Siddiqi.

Hopefully Counsel will be able to agree a Minute of Order in the light of my judgment. But, if this is not possible, I will naturally hear the parties as well as consider any ancillary matters which may arise consequential upon this judgment.