Balber Kaur Takhar v Gracefield Developments Limited & Ors

This case is the sequel to Takhar v Gracefield [2020] AC 450, in which the Supreme Court held that where it was proved that a judgment had been obtained by fraud, a party seeking to set it aside did not have to show that they could not with reasonable diligence have uncovered and alleged that fraud before that judgment (which I shall refer to as ‘the Supreme Court Takhar Judgment’).

That decision opened the door to Mrs Balber Takhar (the Claimant as I shall call her) to seek to set aside for fraud the 2010 judgment of the late HHJ Purle QC sitting as a High Court Judge (Takhar v Gracefield [2010] EWHC 2872 (Ch): (‘the Purle Judgment’). She alleged her signature on a key document HHJ Purle QC relied on had been forged by the Defendants – her cousin the Third Defendant (‘Mrs Krishan’) and the latter’s husband the Second Defendant (‘Dr Krishan’), directors and shareholders of the First Defendant company (‘Gracefield’). In 2020 before Mr Gasztowicz QC sitting as a High Court Judge (Takhar v Gracefield [2020] EWHC 2791 (Ch), ‘the Gasztowicz Judgment’)) the Claimant did prove fraud and the Purle Judgment was set aside. (Mr Gasztowicz QC’s costs judgment is reported at [2020] Costs LR 1851).

This case is the retrial of the original action, but with two new causes of action: deceit and conspiracy. The former effectively duplicates one of the original claims, undue influence. The latter alleges fraudulent conduct of the previous action, as found in the Gasztowicz Judgment. The Defendants deny all claims on the merits and raise limitation on the new claims. This case raises three legal issues of wider relevance after judgments are set aside for fraud - not covered by much direct authority according to my research (‘the three wider questions’):

The second and third questions also link to limitation. Deceit is no longer pursued as a tort due to limitation, but it founds the argument that fraudulent misrepresentation also amounts to undue influence, not argued before HHJ Purle QC. Conspiracy is new, but raises the point that (following the Supreme Court Takhar Judgment) whilst reasonable diligence in discovering fraud is not necessary to set a judgment aside, it is highly relevant to whether a new claim arising from or concealed by fraud is limitation-barred, since s.32(1) Limitation Act 1980 states where an action is based on fraud, time does not start to run until the claimant ‘could with reasonable diligence have discovered it’.

In terms of the essential background to this case, initially, I very respectfully adopt the factual summary (albeit parts of it are in dispute before me) by Lord Kerr in the Supreme Court Takhar Judgment at [1]-[6]:

Whilst I detail the full procedural history below, in short, in October 2008 the Claimant sued alleging on her version of the agreement was a trust or a contract, and on the Defendants’ version, it was procured by undue influence or was an unconscionable bargain. However, the Defendants relied on a written ‘Profit Share Agreement’ (‘PSA’) consistent with their case the Claimant had apparently signed. Whilst she denied that, she did not claim forgery. HHJ Purle QC relied on that to dismiss the Claimants’ claims in 2010. However, in 2013, she obtained expert evidence that her ‘signature’ was a forgery and applied to set aside the Purle Judgment. The Defendants sought to strike that out as an abuse of process, which failed in 2015. That result was confirmed by the Supreme Court in 2019, which held the Claimant could aside the judgment for fraud without proving she could not have discovered it beforehand. In October 2020, Mr Gasztowicz QC found her signature had indeed been forged – by the Defendants - and set aside the Purle Judgment. The proceedings before me were therefore a re-trial of those original allegations with the new cause of action of conspiracy (and deceit) added in March 2015. The two actions were consolidated by consent in 2021.

The case was (re-)listed for trial in December 2023 before me. Mr Halkerston was Counsel for the Claimant (showing total command of a bundle of 10,000 pages). Mr Graham and Mr Perring were for the Defendants (only instructed two weeks before trial, with faultless preparation at lightning speed). Owing mainly to the Claimant’s evidence, the 8-day trial did not prove enough and we re-listed 2 days of submissions in January 2024. The break enabled the Claimant to indicate that she only pursued claims in undue influence, resulting trust and conspiracy, the latter narrowed to forgery in the earlier case. This also gave me the chance to raise various authorities on the three wider legal questions and Counsel to prepare extremely helpful submissions - Mr Graham on the facts, Mr Perring on the law, Mr Halkerston on both (assisted by Mr Lee Jia Wei on remedies). So, I have considered about 150 authorities in this judgment – the vast majority ventilated with Counsel. However, as I have written, I have referred to others cited in texts I was referred to as ‘worked examples’ of points. I have also analysed others in more detail on conspiracy (on the wider implications of the issue which Counsel left to me), resulting trust (which has risen in prominence in this case) and remedies. Indeed, in preparing my draft judgment, it became apparent I needed more submissions on remedies. So rather than a straightforward hand-down hearing, I had a further day of submissions on remedies and consequentials. This ended up rather delayed as although I circulated my draft judgment in March 2024, the Defendants were unavailable for a period of time as they were out of the country, so that hearing was listed in June 2024. Having heard submissions, I gave brief oral reasons for my conclusions (along with costs etc) and then after inviting brief further submissions on interest, I finalised this judgment, handing it down with an order reflecting my decision. As the Claimant raised a narrow application for permission to appeal on remedies and interest, for convenience I have addressed those points in this judgment right at the end.

With the focussing of the Claimant’s case after the evidence, re-ordering and simplifying the list of issues after trial, the issues I must still resolve are these:

This is now effectively ‘two cases in one’: a retrial of the original action (albeit actual undue influence is now pursued through the claim of fraudulent misrepresentation) and a new conspiracy claim on the conduct of that action (which now must itself be the subject of detailed findings of fact as the Krishans still deny the forgery but on a different basis than before Mr Gasztowicz QC). Therefore, the fact-finding exercise is on multiple layers, based on a 10,000-page bundle over a 20-year period, with difficulties in the evidence of all the key witnesses. So, given the tortuous history of this litigation, whilst I have not read every page or dealt with every point, I have tried to deal with the case thoroughly. Following a review of the authorities on memory and fact-finding since Gestmin, I assess the evidence as a whole (including witness credibility) before making detailed findings of fact (not least because Mr Graham has helpfully provided 60 pages of submissions on the facts). But first I must decide the scope of the finding of fraud binding the parties by issue estoppel and given some pleading points, the procedural history must be detailed. Given all that, while HHJ Purle QC was elegantly concise in his judgment of only ten pages, despite my very best efforts but regrettably lacking HHJ Purle QC’s gift for brevity, I eventually failed in my attempt to keep my own final judgment within thirty times that length.

So, it may assist the parties if I set out now the structure of my judgment. I will address the issues listed above, but in a different order in the following ‘chapters’ (for want of a less grandiose word):

I touched on the procedural history of this litigation at paragraph 6 above. In most cases such a brief summary would do. However, as this is a retrial following an earlier judgment being set aside for fraud, indeed one raising complex issues of limitation with new causes of action, more detail is needed, especially in the light of the Defendants maintaining the stance that they did not forge the PSA, despite the findings in the Gasztowicz Judgment. At this stage, I will consider the original pleaded claim, HHJ Purle QC’s findings in dismissing it; the Claimant’s subsequent litigation with her own solicitors; the new expert evidence proving forgery of her signature on the PSA; the 2013 claim against the Defendants to set the Purle Judgment for fraud and its journey to the Supreme Court, the new 2015 allegations of deceit and conspiracy against Dr and Mrs Krishan; and the Gastozwicz Judgment in 2020 and since. However, I reserve until later my findings on the alleged acts of conspiracy in this period.

As I shall explain later in my findings of fact, this case concerns five properties in Foleshill in Coventry that from 2000-2006 were in the name of the Claimant:

Whilst I will obviously return to those underlying facts later, for the moment, it suffices to note that all the Properties were transferred from the Claimant into the name of Gracefield in March-April 2006 and were all mortgaged and made subject to a debenture in December 2006. Dispute between the parties broke out in Spring 2008, after Dr and Mrs Krishan briefly put the Properties onto the market. The Claimant sought advice from a property consultant Mr Matthews, who after a meeting with the Second and Third Defendants in June 2008 suspected fraud as did the Claimant who brought a claim in October 2008.

Since the Defendants continue to rely on it before me and it was so central to the history, it is convenient at this stage to set out the PSA almost in full:

The PSA was drafted by the Krishans’ own accountant, whom I shall refer to as ‘SB’. I make clear this is not because she did anything wrong, although she was accused by the Krishans before Mr Gasztowicz QC of the forgery (which he roundly rejected, finding it was the Krishans). In the Gasztowicz Judgment, he anonymised her and her firm with random letters, but to make this much longer judgment easier to follow, I have adopted her initials ‘SB’. Whilst SB understandably did not participate in that trial before me in 2023 or him in 2020, she was a witness before HHJ Purle QC in 2010 and I will refer to her statement and evidence later, as an important part of the evidential material before me. Similarly, I will anonymise the Krishans’ lawyers in 2008-2010, although again stress they did nothing wrong at all. Only the Krishans knew about their forgery.

On 24^th July 2008, the Claimant’s then-solicitors, Challinors (who later settled her claim for negligence, as I shall describe) sent a letter before claim to Dr and Mrs Krishan which initially denied the Claimant’s awareness of the company, contended they held the properties for the Claimant on trust and stated:

That Claim Form was issued on 24^th October 2008 under claim number 8BM30468 (which I will refer to as ‘the Original Proceedings’). The Claim Form sought a declaration that Gracefield held the Properties on trust for the Claimant absolutely; and pleaded that the transfer had been procured by ‘misrepresentation and/or undue influence’ from Dr and Mrs Krishan. However, neither fraud, deceit, nor conspiracy were pleaded in that Claim Form. The Particulars of Claim followed on 19^th February 2009. However, the pleaded claim of misrepresentation was not pursued. Instead, the case was put alternatively in trust, contract, undue influence and unconscionable bargain. As the latter and contract are not pursued, undue influence is pursued on rather different bases and I return to the pleading of trust, I need not set that out.

The Defence and Counterclaim denied the Claimants’ allegations and relied on the PSA in the following rather cryptic way at paragraph 29:

The Reply and Defence to Counterclaim dated 9^th April 2009 included pleas that the Claimant signed the transfers without understanding the nature and effect of what she was signing, as Mrs Krishan represented them as merely administrative documents and added at Paragraph 13.6 of the Reply:

Following further interlocutory skirmishes, including an injunction restraining Gracefield and the Krishans from dealing with the Properties pending trial, three versions of the PSA were disclosed by the Defendants on 13^th July 2009: an unsigned version, an undated version signed by the Krishans and the version ostensibly signed by the Claimant which it was later found the Krishans forged. Well after the trial had been listed for July 2010, and indeed at least three months at the latest after she had received a copy of the PSA with her apparent signature, the Claimant made a belated application on 31^st March 2010 for handwriting expert evidence. Unsurprisingly, so close to that trial before himself and bearing in mind the Claimant was saying she could not remember signing the PSA, rather than saying that she did not do so, HHJ Purle QC refused that application.

At the trial itself before HHJ Purle QC in July 2010, the parties maintained their positions. The Claimant essentially said she did not recall signing it and in closing submissions, her Counsel accepted she did not allege forgery. The Krishans maintained their stance that she had signed and returned the PSA. In HHJ Purle QC’s extempore judgment on 28^th July 2010 at [21]-[22], he accepted the Defendants’ case and found that the Claimant signed the PSA:

I will frequently return to parts of the Purle Judgment below and to some passages in the cross-examination of all three parties. For now, I note that Judge Purle QC during the trial intervened to prevent the Claimant’s then-Counsel from cross-examining Dr Krishan on the basis that the agreement to transfer the Properties to the Third Defendant company was procured by misrepresentation – whether fraudulent (i.e. deceit) or even innocent and the Claimant’s then-counsel accepted neither deceit nor misrepresentation had been pursued. It is now pursued before me, albeit no longer through the newly-pleaded tort of deceit, but as a different way of putting the originally-pleaded undue influence.

After HHJ Purle QC in 2010 ordered the Claimant to pay 80% of the Defendants’ costs, in 2011 they set off £560,653.80 against her entitlement to the sale proceeds under the profit share HHJ Purle QC found, cancelling it out. To make matters worse, the Claimant’s own solicitors Challinors in March 2011 sought possession of her own home which she had charged as security for their fees. Around the same time, the Defendants sold the Co-Op at auction for £675,000 and in May 2011 at auction the Shops were sold for £175,000.

When the Claimant was sued by Challinors for their fees, in October 2011, her Defence and Counterclaim alleged professional negligence, including failing to apply earlier for handwriting expert evidence. Challinors denied that, but that action settled by Tomlin Order on 22^nd January 2013 with a payment to be made from Challinors to the Claimant in the sum of £300,000 and she was excused from the outstanding costs of Challinors (who entered administration in August 2013). That £300,000 payment is important to the issue of remedies at the end.

In October 2013, the Claimant obtained a final handwriting report from expert Mr Radley (having obtained a preliminary one in October 2011 as part of her case with Challinors). As Newey J (as he was) explained in his decision later upheld in the Supreme Court: Takhar v Gracefield [2015] EWHC 1276 (Ch) (‘the Newey Judgment’) at [11], Mr Radley concluded that a letter signed by the Claimant on 24^th March 2006 ‘bore an original 'pen on paper' signature superimposable with the signature on the copy PSA’, which was ‘conclusive evidence that a copy of the original signature on the letter has been transposed by one of several simple processes onto the PSA’. Mr Radley also concluded that a 2011 banking account enquiry form was not signed by the Claimant, but was transposed from a 2006 account enquiry form, for which there was ‘strong evidence’ that the Claimant did not sign that either. Finally, Mr Radley also concluded there was ‘limited positive evidence’ that the Claimant did not sign the first page of a stock transfer form in the Third Defendant, although he described that as ‘far from conclusive’ and it could be an ‘abnormal signature’.

On 20^th December 2013, the Claimant issued proceedings to set aside the Purle Judgment for fraud, relying on Mr Radley’s report under claim number HC-2013-000172 (‘the Set Aside Proceedings’). On 4^th March 2014, the Defendants’ Defence denied that claims and contended the proceedings should be struck out as an abuse of process as the alleged fraud – primarily the forgery of her signature on the PSA – had been discoverable by her in the Original Proceedings – hence her late application for handwriting evidence in March 2010. The Claimant then sought permission to amend those new proceedings to allege deceit and conspiracy against Dr and Mrs Krishan. I note the Defendants finally sold the Ritz Cinema by auction for £191,000 in August 2014.

The Defendants’ strike-out and the Claimant’s amendment applications were heard by Newey J in February 2015 and determined in the Newey Judgment. He decided that it was unnecessary for a party seeking to set aside a judgment for fraud to show that it could not have been discovered before the judgment with reasonable diligence. Newey J also refused permission to the Claimant to amend so as to add claims of deceit and conspiracy, essentially because he considered there was an arguable limitation defence and that those did not ‘arise out of substantially the same facts’ as the 2008 proceedings under CPR 17.4.

However, on 5^th March 2015 the Claimant issued a fresh action against Dr and Mrs Krishan for Deceit and Conspiracy as case number HC-2015-000788 (‘the Deceit/Conspiracy proceedings’). That date is crucial for the limitation issues on the remaining conspiracy claim. It is accepted that for it, the limitation period under s.2 Limitation Act 1980 is six years ‘from the date on which the cause of action accrued’. That means conduct prior to 5^th March 2009 is time-barred subject to the Claimant’s limitation arguments, including s.32 Limitation Act. The Defendant’s Defence to this new action obviously raised this limitation point.

As the Claimant later amended her pleading of conspiracy and deceit and no longer pursues the latter, I need not detail pleading of either in 2015. But in short, the deceit was pleaded as knowingly false representations that (i) the Properties were subject or likely to be subject to Compulsory Purchase Orders (‘CPO’s) (when they were not); (ii) that as a result they were ‘worthless’ or only worth £100,000 in total (when a CPO entitles an owner to market value); (iii) that if without CPOs, they would be worth £300,000 in total (when in fact they were worth over £1 million collectively); and (iv) if the Claimant agreed to transfer the Properties to Gracefield, that the Krishans would ensure the CPOs or threat of them were removed and the Properties were refurbished and managed for the Claimant’s benefit as an ‘act of charity’. Conspiracy was summarised:

As summarised in the Supreme Court in Takhar, the Defendants appealed the dismissal of their abuse of process argument in the Newey Judgment. Permission was granted and the appeal heard by the Court of Appeal in December 2016. In their judgment of 21^st March 2017, the Court allowed the appeal on the basis that a judgment could not be set aside for fraud which had been discoverable with reasonable diligence beforehand. On foot of that decision, the Defendants issued bankruptcy proceedings against the Claimant based on the balance of their costs.

However, in the meantime the Supreme Court heard the Claimant’s appeal in October 2018 and on 20^th March 2019, the Court handed down its unanimous decision. I will return to passages in it in more detail below, but for now I simply quote the headnote from the Appeal Cases report ([2020] AC 450) that:

The Supreme Court’s decision opened the door to the trial of the Set Aside Proceedings before Mr Gasztowicz QC from 9^th-11^th September 2020. On 23^rd October 2020, he handed down the Gasztowicz Judgment. This is surprisingly unreported given that it resolves a tension in the precise test for setting aside and again, I will return to that point and other specific findings in this case below. However, for now the kernel of his decision was three-fold. Firstly, at [74] following the handwriting experts’ joint view that it was inconclusive whether the bank account form in 2006 and 2011 had been forged, he found that they had not been forged. Secondly, at [64]-[65] following the handwriting experts’ joint view that the Claimant’s signature on the copy PSA had been forged, that was no longer disputed. Thirdly, he rejected the Krishans’ argument that SB or her firm had forged the PSA signature, concluding at [126]-[127]:

Following those decisions (neither appealed by the Defendants), on 21^st July 2021, DJ Malek (as he then was) ordered by consent consolidation of the re-opened Original Proceedings with the Deceit/Conspiracy Proceedings. The Claimant in her Consolidated Reply dated 17^th December 2021 argued at paragraph 22a that the limitation period for the deceit and conspiracy claims was ‘rewound’ to the start of the Original Proceedings on 24^th October 2008 as ‘relation back’ under s.35 Limitation Act 1980. Mr Halkerston initially relied on the cases of Arab Monetary Fund v Hashim (No.4) [1992] 1 WLR 553 and Freemont Insurance v Freemont Indemnity [1997] CLC 1428. However, in a powerful riposte under time pressure before trial, Mr Graham and Mr Perring’s Limitation Skeleton pointed out that both cases really concerned the pre-CPR ‘use’ of consolidation to engage the court’s discretion to extend validity of a claim form to ‘serve out’ the jurisdiction. More relevant are Chandra v Brooke North [2013] EWCA Civ 1559 and Burton v Bowdery [2017] EWHC 208 (Ch) which held that where a court refuses permission to amend (as Newey J did here in March 2015), a claimant’s remedy is to issue fresh proceedings (as the Claimant here then did), where limitation could be determined at trial. I would have agreed that is the situation here. However, wisely, Mr Halkerston did not pursue ‘relation back’ in closing submissions and I will say no more about it. Indeed, as I shall describe, the Claimant made further concessions on limitation.

In accordance with DJ Malek’s order, on 3^rd September 2021, the Claimant filed and served her Consolidated Amended Particulars of Claim (‘CAPOC’), which substituted for the Particulars of Claim in both the Original Proceedings and Deceit/Conspiracy Proceedings. Save on resulting trust and conspiracy, there were no substantial changes in the contours of the originally-pleaded claims and so I can summarise the pleaded allegations relatively briefly:

In their Amended Defence of 22^nd October 2021, the Defendants denied all these claims. As their positive case remains in essence that which they originally pleaded and Judge Purle QC accepted, their position can be summarised briefly:

On 17^th December 2021, the Claimant filed and served a Reply. This denied the Defendants’ asserted factual case, effectively maintaining her own case. It did not respond on the trusts point, but as quoted above, did ‘unpack’ the conspiracy claim and respond to the pleading points, including at paragraph 10 by specifically pleading that if the ‘agreement’ were that pleaded by the Defendants, it was procured by the false representations as pleaded in the CAPOC as summarised above. On limitation, other than the ‘relation back’ point, the Claimant relied on s.32 Limitation Act contending fraud/concealment could only have been discovered with the handwriting report in 2013.

In terms of further case management, on 27^th April 2022 at CCMC, DDJ Caun made directions approving the Claimant’s cost budget in the sum of £481,419 and the Defendant’s cost budget in the sum of £533,534. DDJ Caun made standard directions (subsequently extended by consent) for disclosure and witness statements and granted permission for expert valuation evidence (which only the Claimant obtained). The original time estimate was 5 days.

However, on 30^th January 2023 at a Pre-Trial Review before myself, the parties agreed 8 days were needed and I extended the trial window to the end of July 2023. However, in the event, limited party availability meant the trial was listed for December 2023. As I said, the Defendants changed legal teams and Counsel two weeks before. The 8 days set down for trial proved insufficient because the Claimant’s evidence took 2½ days rather than 1 day, as I explain below. As a result, we agreed to go part-heard for two days for submissions in January 2024, which as I say meant the parties were able to reflect and research further.

On the Friday before submissions started on Monday 8^th January, the Claimant narrowed the issues. In addition to concessions on various costs and expenses, the Claimant abandoned her claims in contract, unconscionable transaction and deceit. She maintained her claims in resulting trust, undue influence (including ‘fraudulent misrepresentation’ which is why deceit was not separately pursued). She also maintained her claim in conspiracy, but limited in the following way:

There was some discussion at trial about the extent to which (if at all) I was bound by findings in the Purle Judgment and Gasztowicz Judgment, especially the finding the Krishans had forged the Claimant’s signature on the PSA. Mr Graham and Mr Perring called it a ‘juridical fact’, but Mr Halkerston contended it gave rise to an issue estoppel on the now-narrowed conspiracy claim. Since it is now the centrepiece of that claim, I consider it now in some detail. There is an obvious interface between the two common law doctrines of setting aside a judgment for fraud and Res Judicata. However, fortunately, the leading case on that interface is the Supreme Court Takhar judgment and I will focus mainly on Takhar and Virgin Atlantic v Zodiac Seats [2014] AC 160, but also the Privy Council decision in Finzi v Jamaican Redevelopment [2024] 1 WLR 541. This ‘chapter’ addresses two follow-on consequences of those principles after a judgment has been set aside for fraud. First, to what extent, if at all, do findings in a judgment later set aside for fraud unaffected by it survive ? Second, to what extent, if at all, are the parties bound by any findings in the later ‘set-aside judgment’ – in other words does set-aside take the parties ‘back to square one’ ? These questions were not directly considered by the Supreme Court in Takhar or Virgin, nor in the only case I found which cites them both (itself an unsuccessful set-aside application): Longe v Bank of Scotland [2019] EWHC 3540 (Ch). Nevertheless, I consider the answers are clear from those authorities.

I turn first to Lord Sumption’s summary in Virgin at [17] (also quoted in Longe) of the various strands of res judicata, although I limit it to the three relevant here: cause of action estoppel, issue estoppel and ‘Henderson’ abuse of process by re-litigation (I need not deal with merger of a successful cause of action in judgment nor the related rule in Conquer v Boot, but I will return to the broader ‘Principle of Finality’ towards the end of this judgment at paragraphs 545-550):

It is in the light of those definitions Lord Sumption had given a few paragraphs earlier at [17] of Virgin that his summary at [22] (quoted by Lord Kerr in Takhar) of the principles of cause of action estoppel and issue estoppel must be read:

However, this possibility of issue estoppel on a point not raised (without reasonable diligence) in earlier proceedings creates overlap to an extent with ‘Henderson abuse of process’, since each can apply to a point not raised in earlier litigation. But that does not mean issue estoppel has now ‘swallowed up’ Henderson abuse of process. On the contrary, in Virgin at [23]-[26], Lord Sumption emphasised the two doctrines were different, as he explained at [26]:

Having pinned down the different concepts of cause of action estoppel, issue estoppel and Henderson abuse of process, I now turn to their interface with the doctrine of setting aside a judgment for fraud central to this whole litigation. In Takhar, Lord Sumption again explained how all those doctrines fitted together at [61]-[63] (my underline), having explained at [60] that setting aside for fraud is not a procedural application but itself a free-standing cause of action:

The sentence I have underlined in [61] raises one of the consequential questions I must consider: the status of a set-aside judgment on a retrial. However, the answer in part turns on the test for setting aside approved obiter, by the Supreme Court in Takhar (Lord Sumption at [67] and Lord Kerr at [56]) of Aikens LJ in Royal Bank of Scotland plc v Highland Financial [2013] 1 CLC 596, para 106:

This was the test Mr Gasztowicz QC applied, in preference to the test of materiality in Hamilton v Al-Fayed [2001] EMLR 15 at [34], favoured but not adopted by Sir Terence Etherton MR in Salekipour v Parmar [2018] QB 833 (which was decided before the Supreme Court in Takhar endorsed Highland):

However, in the Gasztowicz Judgment at [33]-[61], Mr Gasztowicz QC showed how Aikens LJ’s formulation in Highland had been endorsed by all the Justices in Takhar despite both Hamilton and Salkeipour being cited to them in argument. He also pointed out that contrary to the tentative view in Salekipour, the Highland test was indeed perfectly consistent with Lady Hale’s analysis in Sharland v Sharland [2016] AC 871, which concerned an (approved but unsealed) consent order obtained by fraud. Just as Aikens LJ had in Highland, Lady Hale in Sharland had held fraud leading to a consent order would not be ‘material’ justifying the order being set aside if the court would not have made a significantly different order had it been aware of the fraud at the time of making it. Mr Gasztowicz QC also found Highland to be consistent with the Supreme Court’s approach to materiality where a civil settlement not by order is obtained by fraud in Zurich Insurance v Hayward [2017] AC 142, as Highland only required fraud to be ‘an’ operative cause of judgment, not ‘the’ operative cause’.

I respectfully agree with Mr Gasztowicz QC’s analysis favouring Highland, both for the reasons he gave and also because of the underlying policy reason why Lord Sumption in Takhar at [67] endorsed Aikens LJ’s formulation in Highland:

However, this causative test of materiality of fraud in Highland endorsed in Takhar then raises the first consequential question I must resolve. If a judgment is only liable to be set aside if the fraud was an operative cause of that judgment being in the terms it was, what about any terms of (and findings in) that judgment which were entirely unaffected by the fraud ? What if the original action raised several causes of action and the fraud was only fatal to some of them, but another cause of action failed for reasons wholly unrelated to the fraud - would that create any sort of Res Judicata at the retrial following the judgment being set aside ? This raises the question of the status of some of the findings in the Purle Judgment

I repeat the sentence I underlined above by Lord Sumption in Takhar at [61]:

Notwithstanding that, there does appear to be jurisdiction for the Court to set aside part of a judgment for fraud, as Lord Brown said in the Privy Council case of Boodoosingh v Ramnarace [2005] 4 LRC 240 (albeit Jonesco was not cited). That was a case where the plaintiff had been shot by the defendant and won his claim for damages for assault. The unsuccessful defendant both appealed and brought a fresh action to set that judgment aside for fraud (namely alleged perjured evidence of his loss of earnings). The Court of Appeal of Trinidad and Tobago in separate decisions dismissed the appeal on the basis the new evidence was equivocal and then stayed the fresh action pending further appeal of its first decision to the Privy Council. Dismissing that further appeal, Lord Brown said at [18] and [27]:

This principle would appear to be unaffected by the advent in England and Wales of liability to lose the right to judgment for a proven personal injury claim if tainted with ‘fundamental dishonesty’ under s.57 Criminal Justice and Courts Act 2015: relating to the position where fraud is proven before judgment, not after. In my own judgment, Boodoosingh is also reconcilable with the reaffirmation of Jonesco in Owens v Noble [2010] 1 WLR 2491, where the Court of Appeal held a judgment could either be set aside for fraud by fresh action or by appeal, but only on appeal if either the Court of Appeal found fraud was admitted or incontrovertible, or ordered a separate remitted hearing of the fraud issue under CPR 52.10 (an ‘Owens v Noble hearing’). I note that in Dale at [42], Asplin LJ adopted a test closer to Hamilton rather than Highland test for when the Court of Appeal will order a ‘Noble v Owens hearing’, but that is consistent because it is a ‘filter’ rather than a finding of fraud. Despite reference to Lord Sumption’s comment in Takhar at [61] I set out, Asplin LJ in Dale at [54] left open the possibility of a ‘conditional order’ for only part of a judgment to be set aside for fraud. Given Boodoosingh (that was not cited), that course seems open on appeal either for admitted or incontrovertible fraud, or at an ‘Owens v Noble hearing’.

However, it is equally clear from Boodoosingh and Lord Sumption’s comment at [61] of Takhar that where the judgment is set aside for fraud by fresh action, as here, the whole judgment ‘will be of no further legal relevance qua judgment’. That applies here to the whole of the Purle Judgment. That plainly means neither cause of action nor issue estoppel can bite on it. In any event, even if it were theoretically possible for findings in a judgment set aside for fraud unaffected by fraud to survive (which I find it is not), the whole of the Purle Judgment is ‘infected’ by fraud (to use Lord Buckmaster’s phrase in Jonesco). As HHJ Purle QC made clear in his judgment at [32], he saw the case as turning on the facts and in particular his acceptance of the Krishans’ factual account and rejection of the Claimant’s. Since, as Mr Gasztowicz QC found at [134]-[137] of his judgment that the forged PSA was a key part of Judge Purle QC’s overall factual reasoning, it is clear no causes of action failed independently of the fraud. In those circumstances, the Claimant re-running the original causes of action cannot possibly amount to a Henderson abuse of process either (it hardly amounts to ‘unjust harassment’ of the Defendants in Lord Bingham’s phrase in Johnson). The bringing of new claims which could and should have been brought originally which are unaffected by the fraud found (e.g. the claim in deceit about the earlier alleged fraudulent misrepresentation which HHJ Purle QC made clear wa not before him) might amount to a Henderson abuse of process, but that is not argued by the Defendants who prefer to defend it on the merits and on limitation.

Nevertheless, whilst the Purle Judgment is ‘of no further legal relevance as a judgment’, it remains forensically relevant, if not quite in the same way as a valid earlier judgment in a later trial in the same litigation involving another party, as Foxton J recently said in Lakatamia v Tseng [2023] EWHC 3023 (Comm) at [14]:

This second question raises a quite different point: what (unappealed) findings made by the court when setting a judgment aside then bind the judge at re-trial ? (Obviously if the judgment is not set aside, this does not arise). Again, there is little direct authority on this point, to the extent that even in the excellent ‘Civil Fraud’ (1^st Ed, 1^st Supp, 2022) by Thomas Grant KC and David Mumford KC, the learned editors can only offer fairly general guidance on the retrial at 38-032:

Indeed, to illustrate how issue estoppel works, before turning to the status of Gasztowicz Judgment, whilst I did not hear argument on it, there seems to me a clear issue estoppel in relation to the Supreme Court decision in Takhar itself. That is the question of when the Claimant ‘could with reasonable diligence have discovered the fraud’ for the purposes of s.32 Limitation Act 1980 quoted at the start of this judgment and considered later. It is clear from Finzi it was part of the ratio of the Supreme Court’s decision in Takhar that the Claimant could have discovered the fraud with reasonable diligence before the Purle Judgment. That is not only clear from the Court’s judgments, the contrary conclusion would render their whole decision obiter ! In fairness, there is no dispute about that and I need not articulate it as an issue estoppel (although technically I consider it gives rise to one). One issue on limitation for conspiracy is really when before the Purle Judgment the fraud took place and then when was it ‘discoverable with reasonable dilligence’. Both were obviously before the Purle Judgment – but how long before ? That illustrates that an issue estoppel does not necessarily determine the outcome of the question where one ‘issue’ is ‘estopped’ by a prior decision. In this case, that raises both the scope and effect of any issue estoppel in litigation.

As to the scope of an issue estoppel, it is important to be precise about what was actually decided in the particular set-aside judgment. Not everything said in it is a formal decision (rather than observation). This point can be illustrated with two different aspects of the Gasztowicz Judgment. Firstly, Mr Gasztowicz QC made similar observations as had Judge Purle QC on the deliberate falsehoods in the Balber Takhar Account and Options for Gracefield documents. It is worth setting out what he said on that topic in full, as I will return to it later in this judgment:

Turning to what Mr Gasztowicz QC actually decided and so what does fall within the true ‘scope’ of the issue estoppel, as described when summarising his judgment in the procedural history, the three findings Mr Gasztowicz QC made were as follows. Firstly, at [74] he found the bank account forms in 2006 and 2011 had not been forged. Mr Halkerston accepts that finding now binds the Claimant and so her argument about that is not pursued before me and I will only touch on it in my findings of fact. Secondly, Mr Gasztowicz QC in his judgment at [64]-[65] following the handwriting experts’ joint view that the Claimant’s signature on the copy PSA had been forged, noted that was no longer disputed. Therefore, that is a binding decision too. Thirdly and most importantly, the Gasztowicz Judgment rejected the Krishans’ argument that SB or her firm had forged the PSA signature, concluding at [126]-[127] it was the Krishans together:

Whilst the Krishans repeatedly asserted in evidence that Mr Gasztowicz QC ‘only’ decided they had forged the PSA ‘on the balance of probability’, that finding binds them. As confirmed in Re B (Children) [2009] AC 11 (HL), there is only one civil standard of proof - the balance of probabilities - and just because something is very serious (indeed a crime) that does not elevate that standard of proof into a criminal standard of proof, but is relevant to the inherent probabilities (as I discuss in a moment). As Lord Hoffmann pithily explained at [2]:

Even if I am wrong and the Krishans’ forgery of the Claimant’s signature on the copy PSA and its causative impact on the Purle Judgment are simply ‘juridical facts’, those findings still bind the Krishans. Indeed, that was perfectly clear from Mr Graham and Mr Perring’s pre-trial Skeleton Argument. Therefore, I was not expecting to hear much in evidence about the forgery itself, as it was already proven. However, as I shall explain below, following disclosure in 2022 by the Krishans’ then-solicitors of emails from the Krishans in October-November 2008 not previously disclosed in the litigation, the Krishans have put forward a new factual case about the forgery they did not run before Mr Gasztowicz QC in 2020 (when they blamed their accountant, whom I am calling SB). Before me, the Krishans suggested those emails show that in October 2008, they had found a copy of the PSA they believed had been signed by the Claimant and sent it to SB (along with a second copy of the PSA they signed as SB had lost the first copy they had signed themselves in 2006). The Krishans accepted the copy PSA SB had later sent their solicitors and which was disclosed in the Original Proceedings was forged – which they still denied they had done – but believed the copy PSA they sent to SB in 2008 had been genuinely signed by the Claimant. My initial view was this argument was foreclosed by issue estoppel as it could and should have been presented to Mr Gasztowicz QC: see Lord Sumption’s judgment in Virgin at [22]. However, Mr Halkerston did not take this point when I raised it, preferring to cross-examine the Krishans about it. Therefore, given its importance to the conspiracy claim, I will have to make detailed findings of fact about this issue, to an extent covering again the same ground as the Gasztowicz Judgment which I quote at length, albeit with new documents and evidence. I am afraid this will add significantly to the length of my own judgment. Indeed, it is also relevant to the Krishans’ credibility, as I will discuss in my assessment of the evidence. However, before turning to that, I will first discuss fact-finding after fraud.

As explained in the Introduction, fact-finding in a re-trial after a judgment has been set aside for fraud may be very complex. There is a ‘perfect storm’ of challenges. Firstly, given the inevitable delay built-in by the initial litigation, its re-opening and the re-hearing of the original claims (and any new ones), many years may have passed since the events under dispute. (Here, trial was over 18 years after the Claimant and Krishans began their discussions in mid-2005). Moreover, witness’ memories of what happened may have been distorted by the almost constant litigation and the finding of fraud. Indeed, some potential witnesses may no longer be able to give evidence or even have passed away. Secondly, after such a delay and inevitable impact on witness memory, a judge’s instinct may be to rely heavily on contemporary documents. However, where there has been a forgery to procure a judgment by fraud as here, it may strike at the heart of the reliability of such documents. Thirdly, faced with such unreliable memory and wary of how much weight to place on certain key documents, a judge risks being buried under the morass of material available. Moreover, as is clear from the quote from Civil Fraud above, there seems to be no authority and little guidance on how to approach fact-finding at the re-trial. So, I hope I may be forgiven for considering the best approach in principle in some detail first. I will start by reviewing recent judicial observations on memory, then consider the role of contemporary documents and finally I will propose a ‘holistic approach’.

In my own experience, the single most-quoted authority in any skeleton argument across a range of fields of law is Leggatt J’s (as he then was) analysis of the fallibility of memory in Gestmin v Credit Suisse [2013]EWHC 3560 at [16]-[22]. Sure enough, each Counsel here referred me to it. Despite its familiarity, because of its importance, I shall set it out once again in full:

Gestmin itself was a negligence claim by an investment company (the alter ego of a wealthy investor) against a bank which gave the company advice to invest in sub-prime mortgages prior to the ‘credit crunch’ starting in 2007/08. Leggatt J found unreliable the recollection of the investor that his company had specified low-risk investments, because it was not only unsupported by contemporary documents, the bank’s investment instruction documents flatly contradicted it.

Yet that particular feature of plentiful documentation in Gestmin is sometimes overlooked when it has been cited in a wide range of fields. It has particularly proliferated in personal injury and clinical negligence case. I reviewed key cases in that field in Freeman v Pennine NHST [2021] EWHC 3378 (QB), they were summarised by HHJ Bird in Jackman v Harold Firth [2021] EWHC 1461 (QB) and again in Powell v University Hospital Sussex NHST [2023] EWHC 736 (KB) by Mr Dias KC. Gestmin has even been cited in family cases, although that was questioned by Jackson LJ in Re B-M [2021] EWCA Civ 1371 cited in Powell.

Nevertheless, even within its original setting of commercial cases, it is necessary to put Gestmin in some judicial and scientific context – both before and since. The science of forensic memory has developed in the decade since Gestmin, in fairness, not least because of the debate it provoked. However, as the Court of Appeal emphasised in Martin v Kogan [2020] EMLR 4 at [88]:

Indeed, that ‘line’ of judicial observations on memory goes back at least 45 years before Gestmin. One quoted by Lord Bingham in that essay was Lord Pearce’s dissent in Onassis v Vergottis [1968] 2 Lloyds Rep 403 (HL) at pg. 431:

Indeed, Bingham J’s (as he then was) luminous essay ‘The Judge as Juror’, cited in Martin, itself anticipates much of Leggatt J’s analysis in Gestmin by almost 30 years. Bingham J discussed the fallibility of memory and quoted psychological research showing memory did not just fade in a linear manner as Lord Pearce had assumed in Onassis, but dropped off sharply then plateaued. He discussed how research also showed that memory could be distorted by external influences, including the process of litigation. In my view, [16]-[21] of Gestmin (I return to the more contentious [22]) are best seen as an invaluable updating of Lord Bingham’s insights with more modern research, albeit Leggatt J did not cite any.

However, Leggatt J himself remedied that in another judgment (rather overlooked by comparison to Gestmin): Blue v Ashley [2017] EWHC 1928 (Comm), which involved a totally undocumented alleged promise of a bonus during an evening’s drinking in a pub. Tellingly, despite being a ‘commercial case’, Leggatt J could not focus on key contemporary documents in the way he suggested at [22] of Gestmin, as there were not any. Instead, he focused intensely on witness evidence of the evening and its plausibility compared with detailed background findings of fact before and after, making allowances for fallibility of memory. He said at [68]:

That three-stage analysis of memory as being ‘encoded’, ‘stored’ then ‘retrieved’ is now mainstream psychological opinion, as is differentiation into three types of memory: ‘working memory’ (short-term memory), ‘semantic memory’ (retained knowledge of the world) and ‘episodic long-term memory’ (memory of experienced events), explained in 2023 British Academy paper ‘Legal Aspects of Memory’ (https://www.thebritishacademy.ac.uk/documents/4750/JBA-11-p095-Baddeley-et-al.pdf). Its implications for civil litigation were very recently discussed by Popplewell LJ in his invaluable lecture ‘Judging Truth from Memory: The Science’ (https://www.judiciary.uk/speech-by-lord-justice-popplewell-judging-truth-from-memory). Most importantly, as HHJ Bird noted in Jackman, a similar analysis is now accepted in CPR PD 57AC Appendix p.1.3:

Whilst acutely conscious that I am not a psychologist and have no expert evidence in that field in this case, armed with those invaluable observations, I would tentatively suggest all three stages of memory pose risks to accuracy of witness memory, especially in a retrial after a judgment has been set aside for fraud:

Whilst Leggatt J’s observations about memory itself in Gestmin at paragraphs [16]-[21] have been widely endorsed, his proposed solution to the problem at [22] has provoked more debate. For convenience, I repeat it (with my underlining):

Just as Leggatt J’s observations at [16]-[21] form part of a line of judicial thinking on memory (c.f. Martin at [88]), so too does his focus of documents at [22]. This ‘line’ was helpfully summarised by Lord Kerr (albeit in his dissenting judgment) in Bancoult v SSFCO (No.3) [2018] 1 WLR 973 (SC). The case concerned the long-running litigation over the British Indian Ocean Territory in the Chagos Islands. In 2010, the British government declared a Marine Protection Area (‘MPA’), but Wikileaks released a US Embassy cable of a meeting between US and UK diplomats in London which the claimants argued proved the real purpose of the UK government declaring the MPA was simply another way to stop locals returning. In the Administrative Court, because the cable was unlawfully leaked, the Judge ruled the British diplomats giving evidence could not be cross-examined on it further and held that there was no improper purpose. The Court of Appeal and majority of the Supreme Court held the cable was admissible despite the unlawful leak once it came into the public domain, but held that further cross-examination of the British diplomats on it would have made no difference. Lord Kerr disagreed with the latter point and said this on contemporary documents:

To those endorsements of the value of contemporary documents can now also be added those of Males LJ in Simetra v Ikon [2019] 4 WLR 112 at [48]-[49]:

Indeed, such is the importance of contemporary documents, especially in commercial cases, that as Lady Rose again explains in her lecture, the BPC disclosure process has been overhauled in CPR PD 57AD, so that there is greater oversight from the Court and that disclosure is focussed on the key issues of the case, by reference to the different ‘disclosure models’. That will be important in a re-trial after a judgment is set aside for fraud, because of the sheer volume of documents (both contemporaneous with events under dispute and relating to the later litigation). Otherwise, the parties may lose sight of the wood for the trees.

Nevertheless, however important contemporary documents may be to the forensic process, they may not be a panacea. Just as Leggatt J himself found in Blue with the absence of contemporary documents concerning the crucial conversation about the bonus, it may not always be possible, even in commercial cases, to follow his suggestion in Gestmin at [22] to ‘place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts’. This point was also emphasised in Martin at [89]:

Firstly, as in Blue and indeed Martin itself – about contested authorship of a film - there may be a paucity of such documents because conversations are not recorded. As will appear, that is a particular issue in this case too with the many conversations prior to transfer between the Claimant and the Krishans. This point was developed further in Natwest v Bilta [2021] EWCA Civ 680, a claim about alleged dishonest assistance from bank employees in a VAT carousel fraud. As the Court (Asplin LJ, Andrews LJ and Birss LJ) explained at [49]-[50]:

Secondly, as the Court in Natwest mentioned, such contemporary documents as there are, may be ‘ambivalent or otherwise insufficiently helpful’. For example, in Bancoult, whilst Lord Kerr in dissent considered the leaked cable confirmed the real purpose of the MPA was to stop locals returning to the islands, the majority of the Supreme Court interpreted it as essentially ambivalent. As Lord Mance said at [40]-[41], as the US not UK Diplomats had prepared the note, it was more likely to record what the US was interested in and therefore was ambivalent in proving the UK diplomats’ purpose in establishing the MPA. Moreover, as Popplewell LJ said in his lecture at para.55, ‘contemporaneous documents…may be produced near the time, but…if there is an encoding fallibility… it infects the so-called contemporaneous record every bit as much’.

Thirdly, even worse, a document may simply be deceptive at face value, deliberately misleading, or even forged. As my former colleague in Birmingham BPC, HHJ Cooke, said in Singh v Singh [2016] EWHC 1432 (Ch) at [12]:

Given all these potential problems with witness memory and with the documents, fact-finding seems like a particularly difficult challenge in this case. Certainly, it cannot possibly be as straightforward as simply following the approach in Gestmin at [22] to ‘place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts’. However, in my view, that is just one judicial approach to fact-finding which works best in a commercial case with plentiful and reliable documentation like Gestmin itself and Simetra. Yet as Leggatt J’s own very different approach in Blue shows, it is far from the only approach, even in ‘commercial cases’. Gestmin and Blue are at different ends of the spectrum on the availability and reliability of documents. Most cases are more likely to fall somewhere in between. In truth, all judicial fact-finding involves a mixture of the tools and techniques discussed in cases like Onassis and Armagas: reference to the objective facts and documents, to the witnesses’ motives and recollections, and to the overall probabilities, the precise balance of which will depend on the circumstances of the particular case. In some, more like Gestmin, contemporary documents will be central, if not paramount. In others, more like Blue, witness recollection will be central, but must be weighed alongside those other tools and yardsticks as Leggatt J himself did in Blue itself. As the Court of Appeal added in Natwest at [51]:

A ‘holistic approach’ also benefits from being open to fact-finding insights from other jurisdictions, including Family and Crime. That was the approach Mr Dias KC adopted in the clinical negligence case of Powell at [25] with his ‘13 axioms of fact-finding’ (which I repeat with some citations and quotations excised):

Firstly, the burden and standard of proving facts is firmly on the claimant on the balance of probabilities. Where, as here, the defendant has procured a previous judgment through fraud, I must be very careful to avoid reversing or diluting that burden and standard of proof. Whilst the finding of fraud is relevant to the inherent probabilities (as I discuss next), that does not change the burden’s incidence or strength. One party’s dishonesty does not prove the other’s honesty. Whilst the Defendants have put forward a positive case about what happened with the transfer of the Properties, they did not have to do so and do not have to prove it. Moreover, it would also be wrong to choose the ‘most likely’ scenario unless I am satisfied it is more likely than not - as if I am not so satisfied then it follows the Claimant has failed to discharge her burden of proof, as Lord Brandon said in ‘The Popi M’ [1985] 1 WLR 948 (HL). There is only one civil standard of proof that does not change with the allegation, as Lord Hoffmann said in Re B at [15]:

Secondly, on such inherent probabilities, I must be conscious of the limits of my understanding of what action is ‘inherently probable’ for an individual in a different social or cultural situation than myself. As Popplewell LJ said at para.14 of his lecture, quoting from Lord Bingham’s essay ‘The Judge as Juror’:

Thirdly, however, the corollary of that last point - that a prior finding of fraud may diminish the inherent improbability of other dishonest conduct - needs to be balanced against the point regularly stressed in criminal and family cases (most famously in R v Lucas [1981] QB 720) that: ‘if a court concludes that a witness has lied about a matter, it does not follow that he has lied about everything’. I was referred to a suggested ‘Lucas direction’ by another Birmingham BPC colleague, HHJ Williams in Singh v Jhutti [2021] EWHC 2272 (Ch) at [62] (another local case about informal property transactions within an extended family):

Fourthly, I remind myself of the distinction between finding ‘primary facts’ as to what actually happened on the balance of probabilities and drawing inferences on the same standard in the absence of direct evidence on issues such as an individual’s state of mind, like their intention or beliefs (and indeed, ‘fraud’ and ‘dishonesty’). This is a distinction well-recognised in appellate authorities, like Lord Hodge’s judgment in Beacon v Maharaj [2014] UKPC 21 at [12] and [17], both quoted in Enal v Singh [2023] 2 P&CR 5 (PC)):

Fifthly, with a case with so much evidence as this one – a 10,000-page bundle over 20 years, including multiple witness statements and previous transcripts of witnesses - it would be easy to lose one’s way or overlook potential important evidence. I have tried to address this risk by including the next chapter (albeit that it inevitably lengthens the judgment still further), which is a detailed initial review of the whole of the evidence. Again, learning about fact-finding from the criminal and family jurisdictions, I have tried to take an ‘iterative’ and ‘recursive’ approach as Peter Jackson LJ suggested in Re A quoted in Powell. It seemed to me the most helpful evidential review would be to tease apart and review the different types of evidence. I will consider them in ‘layers’, laying one down upon another, cross-checking the accuracy and cogency of each against the previous layers of evidence to gradually work up a clearer picture of events, before ‘standing back’ as encouraged in Arkhangelsky to make my findings of fact on all the different ‘layers’ of evidence as a whole, all on the balance of probabilities.

Sixthly, as Peter Jackson LJ in Re A also accepted, even on an iterative and recursive approach, it is necessary to ‘start somewhere’. I propose to start with the agreed or incontrovertible facts. As Lord Bingham said in ‘The Judge as Juror’, ‘the normal first step is to add to what is common ground between the parties…facts…shown to be incontrovertible’. He gave examples of ‘real evidence’ like photographs. Moore-Bick LJ also observed in Jafari at [76]:

Seventhly, the next ‘layer’ of evidence to be considered is contemporary documents. As I have discussed, there may be a paucity of them, or they may be ambivalent or downright deceptive, yet as Males LJ said in Simetra at [49]:

Eighthly in a retrial after a judgment is set-aside, it is quite possible the statements from the earlier trials may be available, but the witnesses not re-called. As such their statements are admissible as hearsay, provided there is a Hearsay Notice – see s.1 and 6 Civil Evidence Act 1995 (‘CEA’) and CPR 33. If not, the statement is still admissible, but the Court must take into account the failure to serve a Hearsay Notice on costs and indeed on the weight of the statement – s.2(4) CEA (see Shagang v HNA [2020] 1 WLR 3549 (SC)) which states:

Ninthly, I turn to oral witness evidence itself. Lord Bingham, in ‘The Judge as Juror’ identified the following five factors to assist the task of assessing the honesty or reliability of witnesses: (i) the consistency of the witness’ evidence with agreed or incontrovertible evidence; (ii) the internal consistency of their evidence; (iii) consistency with what they said on other occasions; (iv) the credit of the witness separate from the litigation, and (v) the demeanour of the witness. He considered the first three factors to be ‘a useful pointer to the truth’. He placed less weight on the other two, especially demeanour, to which I will return in a moment. (I have already addressed (iv) in part on the question of past character being relevant - with suitable caution - to inherent probabilities). On a retrial after a judgment is set aside for fraud, there is far more evidential material than usual to assess ‘consistency’ - including transcripts of evidence at previous trials. However, it is well to remember the risk of what Popplewell LJ called ‘single-handed Chinese Whispers’. However, as noted in Arroyo, Smith and Slocom (and as juries are frequently directed) simply because part of a witness’ evidence is wrong – or even dishonest – does not stop other parts of their evidence being accepted. More generally, it is important to bear in mind the nature of memory (as discussed in Gestmin at [16]-[21] and elsewhere) to understand the likely effect on a particular witness’ memory when weighing their consistency. However, I also bear in mind (as I discuss below at paragraphs 471-3) that in fairness to a witness, they should have the chance to answer challenges to their evidence, which the other party must put to them as well as the other party’s case: Chen v Ng [2017] UKPC 27 at [55]; Griffiths v TUI [2023] 3 WLR 1204 (SC) at [70(i)]. In Rea at [52], Newey LJ held that one basis for a judge’s finding of undue influence by coercion had not been put to a witness. In writing my own judgment, my own note of cross-examination has been central to all of my findings of fact.

Finally, there is ‘demeanour’, which Lord Bingham in ‘The Judge as Juror’ defined as ‘a witness’ conduct, manner, bearing, behaviour, delivery, inflexion: in short anything which characterises their mode of giving evidence but does not appear in a transcript of what they actually said’. Lord Bingham’s essay is widely acknowledged as being pivotal to modern judges’ wariness of deciding cases based solely on witness ‘demeanour’. As Lord Bingham remarked:

Consistent with the ‘holistic’, ‘layered’ and iterative approach to the evidence I have just set out, before turning to my findings of fact, I survey the various layers of evidence here: (i) agreed and incontrovertible evidence; (ii) contemporary documentation; (iii) valuation evidence; (iv) absent witnesses; (v) non-party witness evidence; and (vi) party evidence (including covert recordings) before finally (vii) taking a brief summary stock-take of all the evidence as a whole.

Given the animosity and all-out litigation warfare between the parties over the last 15 years, including the forgery, there is a surprising amount of evidence that is essentially agreed or at least incontrovertible. Counsel prepared a detailed chronology running over five pages and spanning over 20 years with all the key events in the case. At trial there was no real dispute about any of those dates, even if there were sharply different accounts of how the events had happened. Indeed, whilst prior to trial the Claimant had disputed the authenticity of documents, that are now no longer challenged, even if the reasons for them are still disputed. That effectively-agreed chronology is therefore the ‘base layer’ of evidence in my findings of fact, augmented by other agreed and incontrovertible evidence.

There is also plenty of incontrovertible ‘real evidence’: for example, agreed photographs of the Properties over time so that I can actually see the state of their outsides for myself, which assists resolution of the debate over what condition they were actually in. On a linked point, although not ‘real evidence’ as such, there are important contemporary valuations of at least some if not all the Properties at various points in time: 2002, 2007 and 2009, as well as confirmation of the prices fetched at auction for the Co-Op and Shops in March 2011 and the Cinema in August 2014. Whilst the Claimant relies on the different valuations by her expert surveyor Ms Dobson for transfer in April 2006, those dates of sale and Ms Dobson’s inspection in November 2022, the 2002 and 2007 valuations are important, not least as Ms Dobson has not commented on those dates. I will consider the contemporary valuations alongside Ms Dobson’s evidence as a separate ‘layer’ later. The Claimant also agreed the Krishans had paid rates and other arrears on the Properties of £5,672 (and had paid her maintenance totalling £13,800). There is also some agreement as to the level of expenditure on the development by the Defendants between 2006 and 2010, totalling £132,084.83 (although it is not agreed this falls to be offset from any remedy).

Moreover, before submissions, the Claimant abandoned her previous primary factual case of a ‘custodial contract’ – i.e. that their agreement was that Gracefield would simply have the paper title of her properties and manage them for her but also return them on demand as she remained beneficial owner. The last part of that case survives as the Claimant’s resulting trust claim, but as Mr Halkerston accepts, that claim presupposes there was in fact no agreement to transfer the beneficial interest to Gracefield in return for a ‘profit share’. This concession on the ‘custodial contract’ (and to a lesser extent the claim for unconscionable bargain) slightly reduced the volume of evidence in real dispute. (The same cannot be said of the dropping of the deceit claim, as the alleged misrepresentations are still part of the actual undue influence claim).

Whilst this is not a case like Gestmin where all the crucial issues are recorded in reliable contemporary documents, nor is it a case like Blue where none are. As I have already said of the chronology, there are abundant documents in relation to most parts of the claim. However, there are no contemporary records of the key conversations in 2005/06 between the parties. The whole trial bundle (not including authorities) runs to 28 bundles, including 10 bundles of documents from 2002 to 2023. Mr Halkerston (who in fairness knew the bundle better than anyone else) estimated it ran to 10,000 pages in all which seems about right. Of course, I was not referred to all those pages – and I explained to Counsel that I would not necessarily read documents that were not raised at trial in some way. However, my ‘working bundle’ of the documents actually raised in evidence or mentioned in the trial spanned two (extremely full) lever-arch files of well over 1000 pages and I actually read much further into the bundle than simply those documents. This judgment is already too long already without referring to every single document which was raised or that I have read, but I emphasise that I have taken them all into account in reaching my findings and will refer to key documents.

However, as I explained above, I consider it helpful to differentiate between contemporary documents which give appear to give cogent evidence and those which I should approach with caution. In the first category, there are numerous documents relating to the Properties prior to July 2005 when the Krishans became involved, when Bobby Takhar and the Claimant were managing the Properties. Those early documents are mostly from apparently independent sources - such as Coventry City Council and their agents such as valuers and property development companies - and I find them obviously reliable and cogent. Nevertheless, to go back to the Purle Judgment, because I have much more evidence of the whole history than HHJ Purle QC did, I have a wider context and so I reach some different conclusions than he did. But I also reach similar ones, such as that Bobby Takhar’s plans to re-develop the Properties were considered by Coventry City Council and their agents as unrealistic, not least as the Properties were in a far worse condition than he suggested. It is also clear Coventry CC did tell him about compulsory purchase, but stressed to him that it was a ‘last resort’.

Moving forward in time to the period after the transfer of the Properties in April 2006 (which no longer forms part of any of the maintained causes of action) there are further documents from independent bodies and professionals: not only Coventry City Council, but also from Mr Johnson whom the Krishans had instructed to develop the Properties and conduct the planning permission process (as well as the contemporary valuation evidence which I will discuss later). Again, I considered all the documentation produced by Mr Johnson and the few documents from Mr Matthews, whom the Claimant instructed in 2008, to be reliable, especially as they were convincing witnesses as I discuss below. Therefore, much of Gracefield’s accounts, ‘work in progress’ logs and director’s loan account ledgers prepared by the Krishan’s accountant, SB, are also broadly accurate insofar as they are based on the expenditure now agreed. As I shall explain below, I consider that SB – who gave evidence in 2010 but not before me – is a broadly reliable and important witness, even though now a hearsay one.

However, that does not mean the accounting documents etc for Gracefield SB prepared in fact reflected reality, insofar as the information which she included came not from an independent professional or third party but from one of the parties. As I shall describe, that is particularly true of crucial documents running up to the transfer. However, picking a different example for the moment, in the ‘work in progress’ logs and accounts from 2006 onwards until at least 2018, SB included in Gracefields’ accounts and records an entry for £225,000 variously described as a ‘management fee or charge’, ‘purchase invoice reserve’ and ‘purchase reserve’. As I shall explain, this was a figure Dr Krishan conjured out of thin air, which distorted Gracefield’s accounts over the years of the litigation.

Moreover, documents produced by the parties themselves are still more problematic. The Claimant claimed typed letters purporting to have been written by her were in fact written on the Krishans’ computer and indeed effectively written by, or dictated to the Claimant by, Mrs Krishan. Indeed, in some cases, the Claimant says that she simply signed letters put in front of her as she trusted the Krishans so implicitly. In other cases, that apparently self-serving assertion would be taken with a considerable pinch of salt. However, for five reasons quite separate from the Claimant’s own evidence, I will find that it is broadly true.

Furthermore, some of the documents admittedly produced by the Krishans themselves are downright deceptive. I will detail the five key instances:

On the subject of valuation, whilst the expert valuation evidence of the Claimant’s surveyor Ms Dobson is clearly relevant to remedies and I return to it in the course of the judgment, it is also useful to consider it now in the context of the documentary evidence of contemporary valuations. That is because the value of the Properties at the time of the transfer in April 2006 is highly relevant to the credibility of the parties as just discussed, as well as to liability and remedies. Before I turn to Ms Dobson’s opinion, I will set out the preceding context of the contemporary valuations - and the Council and its agents’ contemporary estimates of refurbishment costs. Those assessing costs at least actually saw inside the Properties, whilst Ms Dobson did not. She was only instructed in late 2022 and reported for the first time in January 2023, when the Properties had been sold many years earlier and she was not able to enter them. Therefore, I set out the contemporary valuations and costs estimates first, helpfully set out in the following tables by Mr Graham, which I have slightly altered.

There is a striking disparity between the 2006 costs estimate by Coventry CC’s agent Donaldsons and Mr Johnson’s costs estimate only the following year which was twice as much. The reason is not entirely clear from Mr Johnson’s ‘indicative budget cost estimate’, but I suspect his proposed works differed from Donaldsons proposal of 12 flats on the Cinema site and retail unit and 12 flats on the Co-Op site. Of course, there is no contemporary valuation of the Shops until 2007 and no refurbishment costs estimate of them at all. Moreover, we only have costs for developing the Cinema from 2005, so we do not have the costs of demolishing it in 2002, which may well have been factored into its valuation then of £160,000. However, the upshot of those contemporary documents we do have is as follows:

Against that context, I will turn to Ms Dobson’s reports, initially in January 2023 but amended (but without changing her valuations) in November 2023 following receipt of further documentation, including some of the historic costs documents from Coventry CC / Donaldsons and the 2009 Chamberlain valuations. Her valuation conclusions were helpfully set out by Mr Halkerston as follows:

Mr Graham submitted that not only were Ms Dobson’s valuations reached without entering any of the Properties; both of her reports contain errors; the valuations in each are the same even though the second report accepted the condition of the Properties was worse; and she calculated costs for refurbishment, despite that being outside her particular expertise (it required a quantity surveyor), by using generic tools in the first report, but (out of date) contemporary costs estimates in the second. Above all, she did not set out her methodology or calculations for either the ‘pre-works’ or ‘post-works’ valuations. I do accept her reports lost sight of the wood for the trees and left questions unanswered. However, they cannot be characterised, as Mr Graham did, as just ‘bare ipse dixit’, as Lord Hodge said in TUI v Griffiths [2023] 3 WLR 1204 (SC) [37]:

Moreover, applying by analogy the criteria in Kennedy at [44] for expert evidence admissibility to its weight, there is no doubt about Ms Dobson’s expertise (save on costings) and body of knowledge underpinning it; and I would add she was plainly impartial and trying to assist the Court, especially in her oral evidence:

I turn to the statements from absent witnesses. Statements from the trials in 2010 and 2020 of witnesses not called before me are hearsay. (Strictly speaking, the previous statements from current parties and witnesses are also hearsay, but I will consider some parts of those when considering their evidence to me).

Firstly, there are the Claimant’s now-absent witnesses (except her solicitors):

Secondly, there are the Defendants’ now-absent witnesses (except the solicitors). I need only touch on Mrs Beeston who witnessed the transfers, as is now agreed.

Finally, I come to the evidence of SB, who is by far the most important of the now-absent witnesses. If the others’ absence is understandable, SB’s absence requires explanation. After all, she drafted the PSA on which the Krishans later forged the Claimant’s signature, leading to the Purle Judgment being set aside. She gave evidence to HHJ Purle QC that he accepted at [18]. However, the reason SB is not giving evidence to me is simple – and the same as the reason why I have anonymised her name, as did Mr Gasztowicz QC in his judgment (calling SB ‘Mrs A’ and her firm ‘X’). At the set aside trial before him in 2020, the Krishans did not call SB because at that stage they were alleging that either she or someone else at her firm had forged the Claimant’s signature because they had lost the original copy the Claimant had signed. Mr Gasztowicz QC said this at [86]-[87]:

SB’s evidence in brief was that she was instructed by the Krishans to incorporate Gracefield in November 2005 on the basis of the Claimant having a 50% shareholding, with the Krishans 25% each. SB confirmed her initial meeting about Gracefield was with Dr Krishan at his home (when discussing other business) and he mentioned the Properties owned by the Claimant and the plan to transfer them to the company, develop and sell them and split the proceeds. SB first met the Claimant with the Krishans at their home on 20^th January 2006 and SB took a contemporary note of that (which I will find to be accurate) where the market value of £300,000 for the Properties was confirmed as was deferred payment to the Claimant of it and a 50/50 profit share. Before a second meeting to discuss the tax efficiency of the different options, SB prepared another note summarised in her statement at [16]:

I can now deal with these witnesses in the usual way by briefly summarising my impression of their evidence. Following on from SB, for the Defendant, there was Sally Smith, Richard Johnson (who I have mentioned already), Dennis Webb, Suzanne Davies and Dr Sudhir Handa. For the Claimant, there was Peter Matthews (whom I have again mentioned already) and lastly, a ‘semi-party’ witness - the Claimant’s son Sukhjinder (‘Bobby’) Singh Takhar.

Ms Smith was not called to give live evidence as her statement was agreed and so I accept her evidence is entirely reliable. In fairness, it also adds relatively little – Ms Smith was an auction manager responsible for the marketing of the Properties in 2008 and their eventual auction – the Co-Op and Shops in 2011 and Cinema in 2014. Whilst she gives useful evidence about the poor condition of the Properties, she cannot remember any details of the auction, even the sale prices.

Mr Johnson’s evidence I have already indicated I found broadly reliable. He struggled at times with his memory (amusingly, even his own address as he had not long moved), especially how many times he had actually met the Claimant. Mr Johnson also gave evidence to HHJ Purle QC in 2010, but that did not necessary give him an advantage with memory. As if to illustrate the problems with its fallibility that I have discussed, in his 2009 statement he recalled meeting the Claimant twice: once in February 2006 after having been instructed by and met Dr Krishan in December 2005; and again, at the opening of Dr Krishan’s new surgery in Wolverhampton in September 2007. Yet in his 2022 statement for this trial, Mr Johnson only recalled meeting the Claimant at the 2010 trial itself. Since the Claimant accepts meeting him in 2007, I accept they did then. However, I also find he may be muddled about the February 2006 meeting – and indeed a telephone call which he mentioned in neither statement. However, Mr Johnson clearly did work diligently on the project after transfer of the Properties in April 2006, liaising with the Council and its agents, as well as various other professionals (such as ‘JS’ whose invoice was amended). Mr Johnson confirmed the poor state of the Properties but arranged no repairs as applications for planning permission were pending. Mr Johnson was also taken through all the expenditure in Gracefield’s ‘work in progress logs’ (except Dr Krishan’s £225,000 ‘management charge’) up to June 2010 totalling £132,084.83 and confirmed it had all had been spent, which is now agreed to have happened (if not that it should be credited as I said above).

Mrs Davies is the widow of John Davies who sadly died in March 2010, just before the first trial. As Dr Krishan was his doctor, it is understandable that she wishes to assist him. Mr Davies was in the business of office refurbishment and introduced him to Mr Johnson in 2006. He certainly made a note in November 2005 which refers to the Krishans and the Claimant and discusses the context and the agreement. I accept the note suggests the Claimant was present. Mrs Davies was not there – the person referred to was Mr Davies’ secretary Joan. I do not accept that Mrs Davies would remember her husband telling her at the time in 2005 about such an inconsequential meeting where all he did was recommend an architect. However, I do accept he would have told her later about the dispute after it broke out in 2008, especially as she had by then met the Claimant in 2007. However, given the forgery, I can attach no weight to Mrs Davies’ multiple hearsay evidence about what another now-deceased witness, Linda Hunt, told her.

Indeed, this same Linda Hunt popped up in the evidence of Mr Webb, another patient of Dr Krishan, and Dr Handa, a fellow GP, also both evidently keen to support Dr Krishan. Mr Webb’s other evidence was again hearsay conversations with Mr Davies who was negative about the Properties, but I find again this is most likely to have been after the dispute erupted in 2008. However, Mr Webb briefly mentioned Linda Hunt had emphasised the Claimant’s clear animosity towards Dr Krishan to him. Like Mrs Davies, Dr Handa said he remembered Linda Hunt reporting that the Claimant had told her she was going to photocopy a signature onto a document rather than physically signing it because she did not want any comeback from HMRC or DWP (the Claimant was on benefits and later investigated about the Properties, but no action taken). This anecdote seems to have been deployed by the Krishans through Dr Handa to insinuate the Claimant herself forged her signature, which actually Dr Krishan openly alleged in evidence. Given the Gasztowicz Judgment, that is untenable. Overall, my impression of the mysterious Linda Hunt is that she was very close to the Krishans, but disliked the Claimant and was willing to make wild accusations about her to all and sundry, so I totally ignore what she said. Speaking of wild accusations, Dr Handa also accused the Claimant of trying to ruin Dr Krishan with complaints including a 2011 outcome letter saying she wrote vindictive letters. However, that was based on an interview with Dr Krishan who had a motive for implicating her, not the Claimant herself. One anonymous letter, which is the bundle, was in my judgement clearly written by the Claimant’s estranged husband Parminder Singh Takhar (informally known as ‘Bill’), who has mental health issues and is clearly also angry with the Krishans. Whilst I am no expert, the handwriting and content of the letter is similar to a letter signed and named Parminder Takhar which is also strongly critical of the Krishans. Therefore, the evidence of Mr Webb and Dr Handa did not really assist me at all.

Turning to the Claimant’s witnesses, I found Mr Matthews to be an impressive witness. He runs a number of companies and is clearly an expert on properties. He was introduced to the Claimant by her friend Mrs Kaur in March 2008 after the Claimant was upset that the Properties had been marketed and she had objected to that to Mrs Krishan (which was the start of the deterioration of their relationship). He was concerned from his initial discussion with the Claimant, who mentioned that in 2005 she had been worried about the Properties being compulsory purchased and her getting nothing. Mr Matthews knew that could not happen. He also felt the Claimant lacked understanding in other practical ways. He also saw the outside of the Properties and felt mortgages could be raised on them (as the Krishans had done with the debenture on Gracefield). Yet even the best witnesses after 15 years have memory issues – I find Mr Matthews mixed-up in his evidence which ‘JS Invoice’ he saw first. He said in 2009 and I accept it was the forged one first, as makes more sense. In June 2008, he met the Krishans and the Claimant, where he agreed sale was reasonable plan (although not what the Claimant wanted to do), but the Krishans gave him the (lower) JS Invoice and ‘Options for Gracefield’ and gently challenged them, which is when he said ‘the mood changed’ and so he ended the meeting. He could see those documents were misleading (for similar reasons as I have already discussed about them) and told the Claimant that he suspected fraud by the Krishans. It was his involvement and strong suspicion of foul play which led to the Claimant covertly recording conversations with Mrs Krishan in May before and then after that June meeting.

However, before I turn to those recordings, the last ‘non-party’ witness is Bobby Takhar. Yet in reality, he is a party in all but name. In the courtroom, the person sat behind Mr Halkerston who seemed to be giving instructions was not the Claimant but Bobby Takhar. He was also apparently the person who first spotted the PSA had been forged and pressed for the Purle Judgment to be set aside. Bobby (as I shall call him) was evidently emotional when discussing the Properties, especially the Co-Op. It was a well-known property in the area which his father Parminder (‘Bill’) had bought at a time when he was in partnership with his now-estranged brother Inderjit (known informally as ‘Ian’) as the ‘Takhar Trading Company’ (‘TTC’), having arrived in the UK with nothing and built up the business through hard work over many years. As I shall explain later, Bobby and his mother the Claimant plainly saw the Properties as ‘family properties’, formally owned by the Claimant but on behalf of Bill but not Ian. Whilst in the Original Proceedings, the Claimant’s case was that she held the Properties on trust for TCC, I will find it was much simpler – Bill owned and gifted the Properties to the Claimant who owned them absolutely, as the Krishans originally pleaded. Therefore, it is not really an appropriate case to examine the interface between the ancient English concept of the trust and the complex cultural web of ‘interests’ in properties regarded as owned communally within more traditional British Asian families (the only analysis I am aware of is Sir William Blackburne’s fascinating judgment in Singh v Singh [2014] EWHC 1060 (Ch)).

Like HHJ Purle QC, I find Bobby Takhar had a rather rose-tinted view of the Properties – at least the Co-Op and the Shops (again which had a lot of history within the family) and in evidence minimised the state of their disrepair evident from all the contemporary evidence. It is a classic example of what Popplewell LJ in his lecture described as an individual’s deeply-held beliefs affecting the ‘encoding’, ‘storage’ and ‘retrieval’ of long-term memories. I also agree with HHJ Purle QC that Bobby Takhar’s claim to have not ‘picked up on’ Coventry CC’s warning of the possibility of CPOs as a ‘last resort’ at a meeting on 30^th June 2005 is implausible. I will find Bobby wanted to get an informal ‘power of attorney’ (in essence written authorisation) to deal with the Properties and told his mother what Coventry CC had said and she told the Krishans, who then stepped in – what Bobby called their ‘power grab’. I will find this ‘not picking up on the CPOs’ was his genuine memory – but not of what happened, but how he remembered feeling when the Krishans emphasised the seriousness of CPOs. Indeed, I will find he gave a clear and consistent account of what they said.

HHJ Purle QC inferred from Bobby’ Takhar’s rejection of offers that he was open to selling the Properties. In fairness, when seen in that wider family and cultural context, I find that evidence is more consistent with Bobby’s evidence that the family did not want to sell the Properties to normal developers, as he was determined to develop them as community assets, especially the Co-Op. Indeed, he said in evidence whilst he accepted the family could not have developed both, the Cinema was an ‘outlier’ which Bill had bought, whereas the Co-Op was ‘the jewel in their crown’ and if necessary to develop it, the family would have sold the Cinema, which I will find below at paragraph 569 would have happened by April 2006 absent the Krishans. Overall, except insofar as it is contradicted by independent and reliable contemporary documents (as on the condition of the Properties), I accept the evidence of Bobby Takhar as honest and otherwise fair.

I turn now finally to the evidence of the Claimant and the Krishans. It is a reflection of the complexity of the fact-finding in this case that it is the first case I recall hearing when no Counsel sought to persuade me their own client was a satisfactory witness. However, before their actual evidence, I should deal with the covert recordings the Claimant took of conversations with Mrs Krishan in May-June 2008. On 19^th May, she covertly recorded two conversations. I do not accept the Claimant’s suggestion that this was initially inadvertent on her mobile phone. After all, she was already concerned enough about the mounting costs of the project suggested by the ‘Balber Takhar Account’ to instruct Mr Matthews. I find that she was ‘fishing for evidence’. I find that she lied about why she did this as she did not want to be criticised for doing it deliberately, although she freely accepted she recorded the second and third calls deliberately. In the light of that, giving myself a Lucas direction, I accept this minor lie does not undermine her other evidence, but I bear it in mind. That being the case, the observations of HHJ Cooke in Singh at [8]-[12] quoted in part above are useful:

As HHJ Cooke said in Singh, it is always necessary to approach covert recordings with caution, especially on what the recording party said, but sometimes they can yield real evidential insight and do so here. Mrs Krishan said that in the first two calls on 19^th May 2008 (as I will explain, there was a third on 30^th June after the Matthews meeting) she was at work, distracted and unwilling to go into detail on the call, so did not hear or correct some of things the Claimant said. However, the transcripts of the two calls on 19^th May do not show Mrs Krishan suggesting talking another time when she was not busy. In fact, they had two long calls when she did most of the talking. The Claimant repeated her concerns about the costs (she already had been given the Balber Takhar Account saying £556,000 had been spent of the Krishans’ own money). Yet Mrs Krishan made a number of statements consistent with the lies in the Options for Gracefield document and which are clearly phrased as her own opinion, not repeating back to the Claimant what the latter had said in 2005/06 as Mrs Krishan claimed in cross-examination:

A fortnight after these calls, there was the meeting on 9^th June 2008 between the Claimant, her son and Mr Matthews on one side and the Krishans on the other that I mentioned, after which he told the Claimant he suspected the Krishans of fraud. The Claimant’s third covert recording weeks later on 30^th June 2008 needs to be seen in that context. It also needs to be seen in the light of a letter on 25^th June 2008 from Coventry CC giving formal notice under s.215 Town and Country Planning Act 1990 (a purely planning not compulsory purchase power) the Claimant had to either demolish or refurbish the Cinema within 28 days. Indeed, the tone of the call was different, Mrs Krishan said if the Claimant was not happy with what they had done, she could deal with them and also that:

Looking at these calls in the round, whilst the Claimant clearly was hoping to obtain evidence from Mrs Krishan’s own mouth, this plainly succeeded. Mrs Krishan was not aware she was being recorded and so had her guard down, rather like the internal emails Males LJ discussed in Simetra. She clearly wanted to take the opportunity to cajole and in the third call outright pressure the Claimant into agreeing with their plans for the Properties by ‘reminding’ her - not of what the Claimant had said in 2005/06 but what Mrs Krishan presented as ‘home truths’ about the situation back then (and by 30^th June 2008, ‘again’). The recordings give strong corroboration to the Claimant’s evidence that Mrs Krishan said similar things in 2005/06. I will refer to this as Mrs Krishan’s ‘rescue narrative’ to the Claimant – this is my term, not the Claimant’s nor Counsel’s and I simply use it as shorthand to avoid confusion in a very long judgment to refer to what the Claimant’s solicitors in correspondence called the Krishans’ ‘campaign’. The calls also show (again my terms as shorthand) Mrs Krishan using both ‘carrot’ (e.g. ‘I don’t do anything without you, but I do protect your interests’) and ‘stick’ (e.g. ‘When the first lot of CPO orders came, maybe it would have been better had we not done anything and they had just been taken off, and…left you absolutely nothing’). It is arguable whether those covert recordings are ‘hearsay’, they are tendered to show not the truth of the matter stated, but what Mrs Krishan was stating, said to be untrue. Yet if ‘hearsay’, but for the purposes of s.4 CEA 1995, I have already explained why I give them considerable weight, not least as they were first-hand hearsay from the period, if not contemporaneous with 2005/06; Mrs Krishan had no motive to conceal (just the opposite), Mrs Krishan’s answers were freely her own and there is nothing preventing their evaluation.

Yet I must now turn to my impression of the Claimant’s own evidence. As Mr Graham said on behalf of the Defendants, she is clearly an intelligent and articulate lady. She has a degree in English Literature and Cultural Studies from Warwick University, worked in the family business, was a trainee teacher at a school and then taught herself yoga and now teaches it. Yet her evidence planned to last a day (always optimistic) actually lasted 2½ days, because for the first 1½ days, she was an incredibly difficult witness, manifesting many of the poor habits criticised in Painter. She was argumentative, avoided answering questions, rambled long discursive answers with unimportant information and contradicted herself. She made speeches and snide or sarcastic remarks. She turned herself away melodramatically. Rather than politely disagreeing with Mr Graham’s questions, she would ‘perform’ an irritatingly histrionic ‘Please !’. At certain points, she gave absurd answers, like saying she thought ‘drawings’ in the context of a company were little pictures. Mr Graham’s patience and determination was commendable. Time and again, I had to tell her to calm down and simply answer the question. He very fairly described my interventions as ‘increasingly firm’.

However, on the third morning, after having been delayed on the motorway in the cold, a very different Claimant turned up for the last day of her evidence – and we made ten times the progress as we had the first 1½ days. She was quiet, thoughtful and aside from a couple of flashes of (more understandable) emotion, she mostly simply answered the questions calmly and clearly. It was as if a completely different witness was giving evidence. When I complimented the Claimant on the change in her demeanour (a word I use deliberately as I will explain), she said that she was now ‘all out of emotion’. That, it seems to me, is the key to understanding both her original antics then her total volte-face.

I remind myself that I should not assess a witness based solely on demeanour, but it can be relevant, with allowances made for the pressures, as said in Natwest. While I was not taken to the transcripts of the Claimant’s evidence in 2010 and 2020, I have read them. Under long and detailed cross-examination then, at times the Claimant rambled and was emotional, but that was distress, not anger. For example, before Mr Gasztowicz QC, the Claimant was cross-examined at length by the Krishans’ then Counsel about benefit fraud, said to go to her credit. She rambled about it, but the upshot was that the DWP investigated in 2009-10 but took no action. Despite the Krishans’ insinuation of fraud by her in a trial about fraud by them, there was no explosion of emotion and histrionics. The Claimant then (and in 2010) was like she was with myself on the third day: reasonable.

In fact, it was telling that the Claimant was not taken in cross-examination before me, even on the last day when being reasonable, to her previous statements or transcripts of evidence at the 2010 and 2020 trials to reveal any inconsistencies, as Mr Halkerston later did with the Krishans. I was acutely conscious Mr Graham and Mr Perring had precious little time to prepare for trial, which is one reason that I read her transcripts myself. However, such was their professionalism, I am sure they will have read the Claimant’s long previous statements, as I also did. Whilst I may have missed a few needles in the haystacks (and will make some references to the previous statements), there were few inconsistencies in the content of what she said, even if her demeanour in evidence was very different.

So, what am I to make of the Claimant’s ‘Jekyll and Hyde’ evidence to me ? In my judgement, her broad consistency in content over the three trials and her latterly calm evidence – and even concessions - suggests that she genuinely believed what she was telling me. I find that she was an essentially honest witness. Especially given that abrupt change, it would be simplistic to attribute the Claimant’s histrionics for the first 1½ days as her consciously ‘lying’. That would be a reversion to simplistic reliance on ‘demeanour’ Lord Bingham deprecated. However, her demeanour does have an impact on her reliability as a witness. Ultimately, the Claimant is plainly a very emotional person. I remind myself of Lord Pearce’s wise warning in Onassis that ‘emotional witnesses who feel morally in the right easily and unconsciously conjure up legal rights that do not exist’. As Leggatt J said in Gestmin and Popplewell LJ elaborated in his lecture, the ‘storage’ and ‘retrieval’ of memory can be distorted by emotions, beliefs and a ‘litigation mindset’. At paragraph 70, I suggested that would be a particular risk in a retrial after a finding of fraud. After 15 years of battling the Krishans over the Properties, the Claimant’s litigation mindset is more entrenched than most. She is particularly indignant that she sees herself as having trusted the Krishans as family and them as having betrayed her trust, as she implied towards the end of her evidence. Moreover, her anger has been particularly stoked by the fraud in 2009-10 which lost her chance to recover her Properties. Her evident anger in the first 1½ days led her to do something she did not do in 2010 or 2020 – simply dismiss a question or evidence simply because it came from the Krishans – like meetings with or contemporary notes of SB or Mr Davies, even though I will find they partly support her case. In any event, insofar as the Claimant’s evidence is contradicted by contemporary documentation from professionals neither prepared by or derived from the Krishans, I will prefer that documentary evidence.

However, insofar as the Claimant’s evidence is only contradicted by the Krishans’ evidence, in particular their discussions about the Properties in 2005/06, I prefer at least the core (if not all details) of the Claimant’s recollection, for five reasons:

Before I turn to my reasons for that conclusion, it is important to distinguish observations on a witness’ reliability or even honesty on particular parts of their evidence from an inference of dishonesty on a cause of action, which must be on all the evidence – see Three Rivers and Jafari-Fine. Indeed, I remind myself that even if a witness lies about one aspect of their evidence, that does not mean they have lied about anything else, especially what they are alleged to have lied about at the time which forms the core of the cause of action. Indeed, as I have already said, I found the Claimant lied - in part - about how she came to make the covert recordings in 2008, but I found there was a clear explanation for that minor lie which does not undermine the rest of her evidence, although I bear it in mind. Moreover, just like the Claimant, the Krishans were giving evidence about events up to 18 years ago and it is only fair to make allowances for memory fallibility and ‘forgetting’ for them too. In fairness, much of their evidence as to timelines, meetings and work done on the Properties is supported by contemporary documents prepared by professionals I consider to be reliable. Nevertheless, I must focus on the reliability of their evidence as to their undocumented discussions with the Claimant from July 2005 to April 2006 about the transfer of the Properties; and on their conduct during the dispute and litigation in 2008-10.

It is particularly important that I remind myself the finding that the Krishans had lied and forged the Claimant’s signature in the Gasztowicz Judgment does not mean they are not being honest in evidence to me. As said in so many contexts since Lucas 40 years ago, witnesses can often lie and for different reasons. Lies in themselves do not necessarily mean the entirety of the evidence of a witness should be rejected. A witness may lie in a stupid attempt to bolster a case, but the actual case nevertheless remains good irrespective of the lie. A witness may lie because the case is a lie. Likewise, the fact that a witness has been dishonest about part of their evidence does not mean that the whole of their evidence is dishonest – and that a witness’ evidence may be wrong in the absence of dishonesty through distorted recollection – as indeed is true of the Claimant as I have discussed.

But whilst a ‘Lucas Direction’ reminds judges that witnesses may have lied in the past to bolster a true account, as Males LJ said in Arkangelsky at [120] - that:

Especially in the light of the suggestion that Mr Halkerston did not ‘put his case’ on conspiracy as I discuss in more detail below, it may be helpful to discuss the evidence in cross-examination of the Krishans more generally. The trial was planned to last 8 days. In the end, because of the Claimant’s behaviour in evidence, we finished her case two days behind schedule. Whilst I initially wanted to see whether we could recover the timetable, I was persuaded by Counsel that we should go part-heard for two days of submissions. However, we all agreed that all the evidence had to be finished within the remaining days of the original trial. Therefore, I limited Mr Halkerston’s cross-examination, even though he had more witnesses to cross-examine (and indeed two main witnesses, not one). So, we all agreed that he would divide up his cross-examination between Dr Krishan and Mrs Krishan, rather than having to put every topic to them both. As Lord Hodge said in TUI, at [70(vii)] such a ‘guillotine’ on cross-examination is relevant to the ‘flexibility’ of the rule that a party is required to challenge in cross-examination every material part of their evidence which he will submit the Court should reject; and indeed, what Newey LJ in Rea at [52] called ‘the (overlapping) obligation on a party to put his case to a witness with relevant knowledge’.

In my view, Mr Halkerston fairly but clearly exposed Mrs Krishans’s evidence across the whole scope of the case to be seriously unreliable. Working backwards:

Turning to Dr Krishan, again I am satisfied Mr Halkerston fairly but clearly exposed his evidence across the whole case to be seriously unreliable:

For all these reasons, individually and cumulatively in relation to both Dr Krishan and Mrs Krishan, I find that substantial parts of their evidence were seriously unreliable. This is not the Lucas error of ‘they lied before, so they must be lying again’. It is rather ‘they lied before and they are seriously unreliable again’. I reach that view on the evidence they gave me in 2023, quite separately from the finding of dishonesty in 2020. As a result, similar to Painter, I consider that I can place no reliance on their evidence unless corroborated by indisputable and contemporaneous documents, such as the records of meetings with professionals.

As I discussed in detail in the previous section, I have set out in great detail those various ‘layers’ of evidence in endeavouring to take a ‘holistic’ approach to the evidence to my findings of fact. I have not simply focussed on contemporaneous documents as in Gestmin, although they are very important as stressed in Simetra. I consider this approach to be consistent with guidance in cases such as Natwest, Arkangelsky, Powell (and Kekhman on ‘circumstantial evidence’).

I now propose to ‘stand back’ (as suggested in Arkangelsky) and look at all those ‘layers’ of evidence together, iteratively and in the round, to illustrate my fact-finding process. In doing so, I find I can summarise ten key points drawn from the whole of the evidence, which then form the ‘skeleton’ of my findings of fact which then follow. Whilst I will need to make particularly detailed findings of fact on the period between July 2005 and the transfers in April 2006 and the run-up to litigation in 2008, I can take the intervening period from 2006 to 2008 much more swiftly, as it is no longer the focus of the remaining causes of action.

Those ten key points drawn from all the layers of evidence are as follows:

Against that context, I can finally turn now to my findings of fact. As I have just illustrated, I will make each of them ‘iteratively’ by considering all the layers of evidence that I have analysed in detail, sometimes referring to my general assessment of the evidence in giving reasons for my findings. However, given the lack of documents for 2005, I will review the evidence on that before making detailed findings on 2005-06, before briefly on 2006-07, then more detail on 2008 and the litigation up to 2010.

This long chapter of my judgment is in five sections: (i) the parties and properties up to June 2005; (ii) my assessment of the evidence on the key period from July to November 2005 when the Krishans became involved and Gracefield was incorporated; (iii) my findings of fact from July 2005 to the transfers in April 2006; (iv) developing the Properties from 2006-2007; and (v) the dispute and litigation from 2008-2014, although I focus on particular aspects of the litigation, as I have already set out the full procedural history.

The Claimant was born in 1952 and her younger cousin the Third Defendant, Parkash Krishan was born in 1954. Her father was one of five brothers, of whom the Claimant’s father was the youngest. Their families had moved to England from India in the 1950s and they were very close as children. Mrs Krishan in her 2009 statement strikingly described the Claimant as ‘like a sister to me’. The Claimant in her 2022 statement said that she ‘regarded Parkash as the sister I never had’. Likewise, Mrs Krishan’s 2009 statement recalled that she had grown up in Wolverhampton and the Claimant in neighbouring Wednesfield, but she remembered the families saw each other almost every weekend. They would play together all the time. Mrs Krishan said she looked up to her slightly older cousin, whilst the Claimant said that she saw herself as ‘the big sister’.

However, they began to grow apart in the 1970s. Mrs Krishan’s father died in 1970 and whilst the Claimant supported her, including paying for her school trip to Wales, it appeared a family argument broke out over his land in India. Moreover, in 1972, the Claimant married Parminder Singh Takhar (known as ‘Bill’) and whilst Mrs Krishan attended the wedding, they fell out of contact afterwards. Bill’s family was very traditional and felt that as the Claimant was entering their family in Coventry, she had to reduce ties to the Black Country.

Mrs Krishan went on to marry Dr Krishan in 1975, but the Claimant did not come to their wedding. Mrs Krishan took two degrees, became a teacher and since 1990 has been a Deputy Headteacher in Wolverhampton and sometimes an Acting Headteacher. Dr Krishan became a successful GP in Wolverhampton. Moreover, he also developed related businesses. SB and her firm began acting for him in 2002 and she later reported that another company he ran was developing a new Health Centre in Wolverhampton with a £2.1 million build cost (this was opened in September 2007 where the Claimant met Mr Johnson). Moreover, in an August 2005 letter to Coventry PCT, Dr Krishan said he had ‘experience with health centre developments and currently have one in Wolverhampton’ so I infer that he had undertaken such projects before. Therefore, Dr and Mrs Krishan were (and are) both successful professionals.

Life took a very different path for the Claimant. From Bobby’s first statement, I note that Bill and his father had started a grocery shop in Foleshill in Coventry in the 1960s, which steadily grew into the Takhar Trading Company (‘TTC’), which despite its title was actually a family partnership. Bill’s younger brother Inderjit (known as ‘Ian’) joined in the late 1970s. Bill worked more or less every day in the business, whilst the Claimant helped out on practical tasks and spoke to customers in (rather than running) TTC’s electronics store. That store was at 554-556 Foleshill Road – i.e. ‘the Shops’, which in those days was knocked through to one property. Ms Dobson described it and enclosed this picture:

Over time, Bill went on to acquire all three of the Properties, including the prestigious if dilapidated old Art Deco ‘Co-Operative Emporium’ at the heart of Foleshill High Street. Ms Dobson described it and enclosed this picture

The Properties were all considered ‘family properties’ as I have already mentioned. All of them were acquired by dint of Bill and Ian’s hard-work over many years and they were both very emotionally-attached to them (as evidenced by Bill’s later angry letters about the Krishans, to which I have referred). As I shall explain, this led to a dilemma for the Claimant later about dealing with them because they were so important to Bill. However, the three Properties were in Bill’s name and he later transferred them to the Claimant in 2000. It is true she said in 2002 to Coventry CC that the Shops were owned by Bill, Ian ‘and family’ when denying responsibility for rates. That was clearly Ian’s perspective, who continued to include the Properties in TTC’s accounts after Bill stopped work. However, since TTC was a partnership, there is no evidence that the Properties’ beneficial ownership was different than their legal ownership – in Bill’s name, even if practically seen as part of TTC’s ‘empire’.

The Claimant and Bill went on to have four children: the eldest was Bobby, then Nina, Sukhjeet and finally Arun. Bobby as a youth worked in the family business but went on to University and eventually became a BBC Producer. I will touch on some of the life experiences of the younger three in a moment. However, the Claimant, as an intelligent woman, found her domestic-centred life increasingly stifling and frustrating. Indeed, later, she enrolled at Warwick University and obtained a Degree in English Literature and Cultural Studies. Over the years, the Claimant’s marriage to Bill also became increasingly difficult. Bill began to suffer from serious mental health issues in the 1990s. He became abusive to the Claimant, physically and verbally. By 1999, she had decided to move out. Whilst Bobby, Nina and Sukhjeet were adults by then, Arun was still a child. The Claimant moved out with him to her parents but really wanted her own place. So, with Bobby’s help, she rented a property in Shropshire, the other side of the Midlands - and told Bill she wanted a divorce.

However, even in 1999-2000, divorce was still a taboo subject in Bill’s traditional family. Bill (who owing to his illness had effectively retired from TTC) accepted they would live apart for the moment but promised to transfer the three Properties into her name if she did not divorce him. This was the point on which the Claimant was cross-examined in 2020, as she had said in evidence in 2010 that Bill put them in her name due to the dispute with Ian. However, as the Claimant pointed out, these were linked – she mentioned both points to the Council in that conversation about rates for the Shops in 2002. If anything, the dispute with Ian in conjunction with stopping the divorce is all the more reason for Bill to want to gift the Claimant the Properties, which were no longer in use. Mr Graham makes a fair point that the Claimant has expressed herself differently about this – initially that she held them on trust for TTC, now as ‘family properties’. Yet that is how she saw them, which her then-lawyers (wrongly) interpreted as ‘TTC’ being a beneficiary. But far from accepting Ian’s claim on the Properties, she wanted to avoid Ian having any claim, as I will find Mrs Krishan knew and exploited. I return to this on resulting trust, but I find the Claimant was beneficially gifted the Properties by Bill, but despite the legal (and formal equitable) position, she informally considered that they remained ‘family properties’ in which Bill had a ‘stake’, or even that they ‘really belonged’ to herself and Bill. However, Bill’s mental illness continued and the Claimant and Arun made a new life in Telford, but regularly seeing her other children. Bill accepted this, as he paid £180,000 for her to buy her own home in Telford outright. With that and the Properties, she was asset-rich but cash poor, studying her degree on benefits (lawfully as the DWP accepted in 2009-10).

However, by 2002, the Claimant was beginning to struggle financially. She certainly had no money to maintain the Properties and pay for their expenses. Presumably from a search of the Land Registry, she was contacted by Coventry City Council (‘Coventry CC’ or ‘the Council’) about the business rates for the Shops in May 2002. That led to the Coventry CC’s note of its discussion with her I have mentioned. It records that the Claimant told them that whilst the Shops were ‘given’ to her by Bill, they were ‘owned’ by him and Ian (along with other property on the Foleshill Road) but she was separated from Bill. That may be the way she saw the situation (especially as it would avoid her liability) but the Council did not see the legal/equitable position that way and nor do I.

All the Properties had been empty for a long time and were in poor condition. In November 2002, Coventry CC’s rates valuation report described the Co-Op as ‘in very poor condition and requiring a substantial amount of work to bring it to a tenantable standard’. This included repairs to the roof, brickwork, guttering, stairs, walls gates to the yard, replastering of the internal walls, rewiring, installation of a fire alarm and lighting, replacement of the toilets, installation of running water and central heating, repair of the lift, pumping out of the flooded basement, external redecoration and general tidying. The report estimated the total cost of the works would be around £750,000. As it stood, the report estimated the value of the Co-Op as only £108,000. The same impression is confirmed by a later full survey of the Co-Op in 2003 by Barneveld surveyors, who estimated repair costs as £677,000 at full specification or around £400,000 ‘if much lower spec’. (Ms Dobson found this was a helpful report on costs).

By March 2003, the ‘owner’ of the Co-Op was described in that report as ‘Mr Takhar’: which I suspect was a reference to Bobby who took on management of the Properties around this time. He had actually worked in the Co-Op building when it was still TTC’s shop when younger and recalled it holding a lot of stock on the upper floors. In his statement, he described the Co-Op as having been empty for 2-3 years and ‘needing some work done’. He suggested Bill’s contacts could do the work for £200,000. However, that may be because they were all rather in denial about the amount of work needed. Bobby clearly saw the Co-Op through rather rose-tinted spectacles as ‘the Jewel in the TCC Crown’ as he put it. It certainly had a faded glamour of a bygone age of Art Deco and was a well-known and prestigious building in Foleshill, but the evidence and 2005 photographs show that it was simply in very bad condition.

Similarly, Bobby described the Shops in his statement as ‘needing some touching up’. This was another understatement. There is no contemporaneous evidence about the Shops. However, the Savills report in May 2007 noted that Number 558 had ‘suffered significant structural damage evident from the severe cracking at first floor level’, although they could not gain entry to the premises or even see the garden because it was so overgrown, confirmed by 2005 photographs. By then, the old TTC electronic store had been re-converted back into the three Shops, but were still seen (as Ms Dobson noted) as one ‘job lot’.

In fairness, Bobby was rather more clear-eyed about the Cinema, which he described as ‘his father’s dream’ not theirs and ‘an outlier’. He said he would have been prepared to sell it to fund development of the Co-Op (to which I will return on remedies at the end of this judgment). Bobby said in his statement the Cinema ‘had been vacant for 20 years and was in significant disrepair’. Indeed, the Claimant later commissioned a survey in December 2004 through the Shropshire Chamber of Commerce which said that it was:

Whilst the Shops were certainly subject to Council Tax and Business Rates, there is no evidence the Co-Op and Cinema were, possibly owing to their condition. Coventry CC certainly wanted something done with the dilapidated and disused Cinema, under some local pressure. A March 2003 note records that three Councillors had presented a petition (and as will be seen, they did not give up). The report proposed that the Cinema be valued (why I suspect that Coventry’s valuation of £160,000 if demolished came from mid-2003 not late 2002) and Coventry CC work with the owner to develop it, possibly with a grant.

Notably, in June 2003 to discuss this Coventry CC wrote not to the Claimant, but to Bobby (who had also been the contact for the Barneveld Report). By then, he had largely taken over from the Claimant in dealing with the Properties, but not entirely (e.g. she commissioned the December 2004 survey on the Cinema). In July 2003, Coventry CC did write to the Claimant once it confirmed she was formally the owner. However, from other documents such as a February 2004 internal email within the Council, it appears they were generally dealing with Bobby. His status came up again in mid-2005, as I will describe. However, that February 2004 email noted he had said the Properties were owned by his mother but that he was dealing with them and envisaged a ‘community use open to all’ rather than some faith groups or purely commercial developers.

As I said earlier, whilst HHJ Purle QC concluded that Bobby wanted to sell, I conclude he was prepared to sell the Cinema, but had declined offers for the Properties because he wanted to pursue a ‘community use’ for them. In evidence to me, Bobby explained that he had initially left management of the Properties to his father, but Bill was struggling with his mental health and whilst he kept saying he would sort out with Ian what was happening with the Properties, he never did. Bobby and his mother got tired of waiting and – I find in 2003, he decided as the eldest son, it was his responsibility to try to develop the Properties as community assets. As Bobby explained, Foleshill was a busy and close-knit Asian community with many local businesses, including TTC. One jeweller had approached Bill and Ian but they could not agree about what to do. Others approached Bobby about the Properties. However, Bobby wanted to try and get funding to develop them for community use or rental rather than sell them. This was not least because Bobby still saw Bill as having a stake in the Properties and he wanted his father’s ‘green light’. Bobby said he was even prepared to dip into his own savings which were at that time around £80,000, or as I noted, to sell the Cinema to fund developing the Co-Op and Shops.

However, in that February 2004 internal email Coventry CC officers were blunt:

Another reason Bobby had taken on responsibility for dealing with the Properties from around 2003, other than his father’s inertia, was his mother’s other problems. The first aspect was her financial worries. In July 2002, the rates bill for the Shops was £2,044.75, which led to a Magistrates’ Court summons for £2,119.75 in October 2002. This led to the involvement of the bailiffs. Whilst she managed to pay that off, by April 2003, the rates arrears were back up to £1,529. The Claimant managed to find work as a teacher on a graduate training scheme at a high school in Wolverhampton in 2003 and her net salary was c.£12,000. Doubtless this helped a little, but it was not enough to cover her mounting costs. The Claimant approached Bill, but he told her to speak to Ian, but when she did, he simply told her to speak to Bill again. She became desperate. Indeed, in December 2003, she finally decided to tell Bobby how bad things were financially and he paid off a bailiff demand of £1,539.

However, the Claimant’s problems were only really beginning in 2003. Her second oldest son Sukhjeet was at university and began experiencing mental health problems. The Claimant called Bobby and they went to Kent to pick Sukhjeet up, but he did not really recover until 2006-2007. So, during the critical period in this case, she was caring for him, as well as for Arun. Indeed, I accept all this stress began to take its toll on the Claimant as well. She has not disclosed her medical notes from the period, but there is a 2009 GP letter which says:

Moreover, things then got even worse for the Claimant. She was briefly signed off sick from work in March 2004 for minor physical conditions, which would not have helped. Meanwhile, her debts were building up. These included her substantial credit card debts, which at one stage were £5,500 on her RBS card, £3,800 on her Barclaycard and £550 on her Natwest card. Moreover, in 2004, her other child Nina was getting married and the Claimant felt the responsibility to pay for the wedding. She got into further debt to the sum of £22,000, which ended up in a County Court Judgment in 2006 that Bobby paid in 2008. To make matters worse, a week before the wedding in 2004, she and Arun were in a car crash. She sustained soft tissue injuries to her shoulder and hip and whilst she attended the wedding, she eventually gave up work and went onto benefits. But I suspect that was more the mounting stress than her own injuries, as Arun was injured and started having headaches, as also confirmed by the 2009 GP letter:

Whilst I am conscious that the Claimant is over-dramatic and has a distorted or poor memory at times, it is fair to describe all these problems coming together in the course of 2004 as a ‘perfect storm’. The financial pressures were made worse by Nina’s marriage, in turn made worse by caring for Sukhjeet’s mental health problems, in turn made worse by a car accident causing significant injuries to Arun; eventually leading to her giving up work (although that happened later), in turn making her financial problems even worse still. I therefore accept that even before she gave up work, as the Claimant put it in her statement:

It was under this mounting pressure that in mid-2004, the Claimant remembered her cousin Parkash and reached out to her by calling her to invite her to Nina’s wedding. I do not accept this was some sort of devious plan to get the Krishans to give her financial support. I accept that in mid-2004, the Claimant felt she needed emotional support and thought of her cousin with whom she had once been so close. She was no longer with Bill and so got in touch with Mrs Krishan to invite her to Nina’s wedding. They did not attend it because they never received the actual invitation – it seems that the Claimant got Mrs Krishan’s address wrong. This suggests the Claimant is right in her recollection that she called Mrs Krishan and was invited round to the right address rather than turning up out of the blue to an address she had got wrong, as Mrs Krishan suggested. Either way, they both reconnected and the Claimant became a regular visitor, not always invited but always made welcome, as one would expect from reacquainted cousins. They initially reminisced about childhood, but eventually the Claimant felt comfortable enough to confide her problems in her cousin and at this stage, in fairness to Mrs Krishan, it sounds like she gave a lot of emotional support and in turn rightly gained the Claimant’s trust, as the latter put it in her statement:

Given that, it was inevitable that in early 2005 the Claimant would mention the Properties at some point to her re-found confidante, Mrs Krishan. I accept the Claimant’s recollection that what prompted her to mention it was Mrs Krishan asking her about divorce. The Claimant explained she had not got divorced from Bill, but he had transferred her the Properties. Mrs Krishan said it was unfair she had been lumbered with them as they were probably mortgaged to the hilt (doubtless thinking of her financial problems which they had often discussed). However, when the Claimant told Mrs Krishan the Properties were not mortgaged, I find that Mrs Krishan realised these Properties could be valuable. Mrs Krishan claimed the Claimant first told her the Properties were derelict, so she could not sell them and even if she could, it would not pay off her debts. However, given the Claimant and Bobby’s rose-tinted view of them – and indeed the then-recent survey suggesting the Cinema had development potential - I find the Claimant probably told her about their development potential. Doubtless, Mrs Krishan then mentioned this to her husband, who was undertaking his own health centre development in Wolverhampton at the time. I find like most successful business-people, he was always on the lookout for a development opportunity.

I also accept the Claimant’s perspective that this first conversation in early 2005 about the Properties being mortgage-free and capable of development was a turning point in their relationship. I accept Mrs Krishan started talking about money a lot more and how experienced they were in property development. As noted, the Claimant’s statement stated ‘I can recall this shift in the tenor and nature of our conversations quite distinctly, because it was a marked change’, which Mr Graham suggests is obviously in the Claimant’s lawyers’ language, not hers. I accept that, but it does not mean the Claimant did not notice a change in tone from Mrs Krishan. I accept that she did – as she went on to say in simpler language: ‘we had never really talked about her wealth much before’. I find that it was Mrs Krishan, doubtless encouraged by Dr Krishan, who was angling to help with the Properties, not the Claimant angling for help with the Properties. Indeed, I find the Claimant repeatedly declined it, since she did not want to ‘burden’ the Krishans with it and she trusted her son Bobby to deal with them.

However, by early 2005, Coventry CC were starting to lose patience with Bobby and his unrealistic plans for the Properties. On 8^th February 2005, faced with ongoing councillor pressure about the dilapidated Cinema, Cabinet agreed in principle that the compulsory purchase process could be followed ‘as a last resort’ for the Cinema and Co-Op (not the Shops despite the arrears) among other unrelated properties. An email a year later in March 2006 states the strategy was ‘to give authority to use the CPO process, inform owners of this, then encourage progress by negotiation and this fails, to use CPO’. However, given Mr Todd and Mr Duncan’s evidence and their brief to the agent Donaldson’s in May 2005, this was not the formal start of the CPO process, which was a formal report to Cabinet to make a CPO - that never happened. It was simply authority to use a potential CPO process as leverage to get progress on the Properties. As it was put in a May 2005 brief, the plan was for the Council to take preliminary steps for CPO in August 2005, recruit a developer by November 2005, complete negotiations by April 2006 and ‘start the CPO process, if necessary’ in May 2006. Even if that were to happen, as I explained, the owner could appeal it to the Secretary of State and was compensated at full market value, subject to outstanding Council debts.

It was in that context that Coventry CC briefed Donaldsons in May 2005 that the value of the Co-Op was £108,000 (that was from 2002), but there was a full structural survey (by Barneveld in 2003) and it was located in a district centre – and ‘retail, community, offices or residential were all possible’ but ‘the owner was unrealistic’. Whilst the owner was named as Mrs Takhar, her representative had been Bobby and it was his plans being described as ‘unrealistic’, although the plans for a drama and literature centre at either the Co-Op or the Cinema doubtless were endorsed by his mother with her degree in English Literature. The Cinema was described as valued at £160,000 assuming demolition (as I said, probably from early 2003). It noted that the owner had refused a structural survey, but in fairness this may be because the Claimant had a structural survey in December 2004 as I said. However, again the brief stated: ‘owner unrealistic’. Accordingly, Donaldsons took the steer from their client, the Council. In their report circulated to the Claimant in July 2005, Donaldsons noted and fully costed the Takhar family’s plans for a drama and literature centre at either the Co-Op or the Cinema, which for the former would cost nearly £1 million and the latter over £1 million. However, Donaldsons also ‘appraised more commercially viable alternative use’. They described the Co-Op as ‘derelict with substantial refurbishment required’, which even on a commercial mixed retail/residential basis would be £867,000. They proposed demolition and a residential development for the Cinema, not least as the proposal for a community project may be hampered by the lack of parking.

Whilst the Donaldsons report was not sent to the Claimant until 12^th July 2005, Donaldsons had plainly reached their view prior to a crucial meeting between Coventry CC officials including Mr Duncan and Bobby Takhar on 30^th June about the Co-Op and the Cinema (again, the Shops were not mentioned). The notes of the meeting record the Takhar family had requested a meeting as they were considering commercial offers from developers (I find of the kind Bobby described from local businesses) but preferred them to have a community use. It was noted that Donaldsons felt whilst the Cinema if demolished for housing ‘would offer a commercially attractive proposition to a developer, the same could not be said of the Co-Op’ and recommended the two were treated as one project. The meeting noted the Co-Op was valued at £100,000 (strictly, £108,000 in 2002 as there was no updated valuation) and needed £900,000 of work - £700,000 structural and £200,000 refitting. Bobby said his own costing from (a contractor of) McAlpine was £200,000, but as I said, that was an unduly optimistic estimate. Mr Duncan said that grant funding was unlikely through the Council. But, more positively, another official suggested it may be available for the Co-Op to be converted into a local health centre that Foleshill needed as ‘there had been a long and fruitless search’ for one as with other parts of Coventry and an official from the Primary Care Trust said it could be investigated. The notes continued:

I make five comments about the notes, including the ‘action points’ that followed:

So, before moving on to what happened next, it is convenient to consider and comment on Mr Graham’s submissions of the Claimant’s position in mid-2005, which I can roll together in three points flowing from my findings above.

Yet within five days of Bobby’s meeting, on 4^th July 2005 the Claimant had signed a letter authorising not him to deal with the Properties on her behalf with the Council, but Dr Krishan. But it took until 20^th November 2005 for Gracefield to be incorporated. What happened over this four-month period is critical, yet none of the discussions the Claimant and the Krishans say occurred are recorded. Moreover, they give irreconcilable accounts. The Krishans say that transferring the Properties to Gracefield was the Claimant’s idea because of her financial desperation, as a joint venture company to renovate the Properties then sell them, dividing the profits equally after the Claimant first had £300,000 – the market value at the time of the transfers in March/April 2006. The Claimant says that in this period the Krishans told her the Properties were subject to CPOs (or at the least ‘likely’ to be), that they were ‘worthless’ or only worth £100,000 because of the CPOs, that if the CPOs were removed they would be worth £300,000 (instead of their real value of almost three times that); that if the Properties were transferred into Gracefield’s name, they would be renovated and let (not sold) and managed for her benefit but would still belong to her; and this was an ‘act of charity’. The Claimant now contends that all of these were fraudulent, misrepresentations. As I explained by reference to Three Rivers and Jafari-Fine, the inference of fraud must be assessed on all my findings of primary fact and so I will determine that later in my conclusions on undue influence. But I can now decide on the balance of probabilities who said what to whom and whether or not it was factually true. Yet while not quite the totally-undocumented pub conversation in Blue, this period was very far from the document-heavy dealings in Gestmin. So, as I said when assessing the evidence of the parties, given the importance of this four-month period, before making findings of fact about it (and indeed on to the more-documented period from December 2005 to April 2006), I find it helpful to assess all the evidence on it: a few contemporary documents and the evidence of the parties (and Bobby).

I start with the incontrovertible evidence and contemporaneous documents:

The most contentious document is Mr Davies’ note. It is not suggested this has been concocted and I find it is a contemporary note of a real meeting on 16^th November 2005. However, the Claimant denies being present. Yet, if she was not there, her personal circumstances would not have been discussed in such detail if Dr Krishan was just asking Mr Davies to recommend an architect. In fact, the listing of names suggests the Krishans and the Claimant were all there. Mrs Krishan says the Claimant told Mr Davies what she had told them. However, I do not accept she would have said she was ‘demanding help and very insistent’ and had ‘no family support’ given Bobby, or mentioned ‘divorce’ when still married to Bill. Indeed, Dr Krishan’s statement does not mention the Claimant even being there and neither of the Krishans mentioned that in their 2009-10 evidence. They told me they did not want to involve Mr Davies in 2010 as he was dying. But they could have mentioned the meeting but explained that. Therefore, all the parties’ evidence on this meeting is unreliable and I have found Mrs Davies’ hearsay evidence unreliable too. Conscious of Chen, TUI and Rea, whilst the note was put to all parties and their evidence was challenged, the ‘cases being put’ to each of them are wrong. I therefore do not make findings about exactly what was said and by who to Mr Davies at that meeting. However, as I find that it is a genuine note of a meeting I find they all attended, I can take it into account, in weighing the parties’ wider evidence on July-November 2005.

On that approach, whoever was doing the talking and whatever precisely was said, Mr Davies was told either by or in front of the Claimant that she was ‘needing help with bankruptcy and eviction. Properties in Coventry – CPOs losing them’. The Krishans say that is what the Claimant had been telling them. However, by November 2005 Dr Krishan had been dealing with the Council for four months and I find on the balance of probabilities would have known that the Council still saw CPOs as a ‘last resort’ and even if made, paid full market value less Council debts. It is difficult to understand why Dr Krishan would have let the Claimant repeat (or repeated himself) things he must have known by November were wrong like ‘CPOs losing them’. Therefore, the note is more consistent with Mr Davies being told what the Claimant says the Krishans had been telling her for the previous four months - ‘CPOs losing them’ i.e. the Properties would be lost to CPOs, (not ‘CPOs mentioned’, or ‘threatened’, or even ‘likely’) and bankruptcy and eviction. This also fits more Dr Krishan talking – consistent with his statement he met Mr Davies. Even the reference to ‘50/50 share with further written agreement sorted’ is ambivalent, as a day earlier Gracefield was incorporated and the Claimant had 50% of the shares and the Krishans 25% each. It is unclear what the ‘further written agreement sorted’ was - to rent the Properties and split that 50/50 as the Claimant says, or to rent or sell them to split 50/50 that as the Krishans say. Whilst that is clear in SR’s note of what Dr Krishan told her days later, it is not clear in Mr Davies’ note.

I turn to the parties’ accounts. The gist of Mrs Krishan’s 2009-10 statement was the Claimant started pressuring her and Dr Krishan to help her with the Properties in early 2005, that increased after Bobby’s meeting with the Council on 30^th June 2005, after which the Claimant visited and telephoned several times a week saying if the Properties were compulsorily purchased she would only receive £100,000 but she thought they were worth £300,000 on the open market. While the Krishans initially refused to help because of their own development in Wolverhampton, they eventually agreed in principle to develop the Properties and if sold over £300,000, to split the profit 50/50 and Mrs Krishan then wrote the cheques. There was no reference to 2^nd July 2005, despite the diary entry, nor to 4^th July despite the letter, nor to any meeting with Mr Davies (only his recommendation of Mr Johnson). But Mrs Krishan’s account in evidence in 2010 specifically focussed in on 2^nd July 2005:

However, it appears that Mrs Krishan did forget again about the 2^nd July 2005 after all. In her 2022 statement, unless I have missed it, there does not appear to be any reference to it, despite the diary entry. Instead, her account in her 2022 statement was essentially that after the Claimant pressing for financial help, ‘in the end’ Mrs Krishan gave in and paid cheques to the Claimant and agreed to pay her £400 a month cash to ‘help her get back on her feet’. The statement only then goes on to say the Claimant asked for help with the Properties, which she told them were ‘derelict’ so she could not sell them and they would not pay off her debts anyway. The Claimant said to Dr Krishan ‘Oh brother, you must help me’ and suggested they could make the Properties viable, sell them and go 50/50 on the profits and that the Properties should be transferred to a company as she was worried about benefit fraud. Mrs Krishan’s statement suggests that they ‘eventually’ said they would help and they then had a meeting with John Davies. Therefore, this account is different again: it put the money before ‘help’ with Properties not afterwards, it did not mention Bobby’s meeting or the importance of 2^nd July, but did mention the Davies meeting not mentioned in 2009-10.

Unsurprisingly, Mr Halkerston cross-examined Mrs Krishan in detail about these inconsistencies and put to her the alleged fraudulent misrepresentations. She went back to her account that the key discussion was on 2^nd July 2005. The Claimant had been in quite a state, broke down and said she felt there was a real chance she might lose the Properties. It was the Claimant who had mentioned the CPOs and that the Properties were ‘worthless’ as a result and Mrs Krishan herself only later found out they were actually worth £300,000 and the extent of the debts (she did not know about the £22,000 wedding debt at the time). When referred to the 2008 covert recordings, Mrs Krishan insisted she herself was only repeating back to the Claimant what he latter had said herself back in 2005. Mrs Krishan said it was on 2^nd July 2005 that she wrote the cheques for the Claimant’s debts and agreed to help. She said the Claimant not her had drafted the letter on 4^th July. She insisted it was the Claimant’s idea to transfer the Properties to a company to be refurbished, sold and the profits split 50/50 and she kept pressing them to progress it, but the Krishans were dragging their feet.

However, there are a number of serious problems with Mrs Krishan’s account:

Dr Krishan’s accounts were different yet again – from Mrs Krishan’s and his own:

There are also a number of serious problems with Dr Krishan’s account:

Of course, the Claimant’s reliability is also weakened by her forgetting about that Davies meeting. But as I said, the Krishans did not mention it at all in 2009 or 2010 and Dr Krishan did not mention her being present in his 2022 statement, so this point only goes so far. Moreover, unlike the Krishans, the Claimant’s account of this time has remained broadly consistent in her statements and evidence (why she was not really cross-examined much on ‘internal’ inconsistency with them). She said she accepted Mrs Krishan’s help with the money first and then accepted her persistent offer to help with the Properties (which I accept is also inconsistent with the dates of the 4^th July letter and 22^nd July cheques). She insisted Mrs Krishan persuaded her to let Dr Krishan help and drafted the letter on 4^th July 2005. She said that after he started speaking to the Council, they met and the Krishans told her that CPOs had been applied against the Properties by the Council, which could be taken off her, leaving her with only liabilities, she could be left ‘bankrupt’, ‘penniless’ and ‘homeless’ or could go to prison and that Ian could take the Properties off her which ‘terrified her’. However, she said the Krishans said they wanted to help as it was ‘payback time’ for the help she had given Mrs Krishan in childhood. They said they had experience with development and CPOs and that she should trust them with the Properties. She said she resisted their help for some time because she wanted to stand on her own two feet. However, over the autumn of 2005, the Krishans supported her and took her on holiday to Spain. They suggested they would fight the CPOs with lawyers, get the Properties up and running and rented out; and whilst they would be put in a company for administrative reasons, this was only a formality as they would still belong to her. The Claimant said she eventually gave in to the Krishans’ persistent suggestions (I quote from her 2022 statement below). In short, her account has always been they used what I am again calling as shorthand both ‘stick’ and ‘carrot’ combined in further shorthand ‘the rescue narrative’.

As I have said, during the difficult first 1½ days of cross-examination before me, the Claimant was emotional, histrionic and dismissive of questions. But she did answer some of the questions clearly, especially on this key topic. At one point she even said she was ‘remembering detail as they were going through it’ (but I am cautious of that). She said she planned to authorise Bobby to deal with the Properties, but Mrs Krishan said the Claimant should not be burdening him with them and they should deal with it for her. She said Mrs Krishan typed the letter of authorisation for Dr Krishan for her to sign. The Claimant said they got her to sign that letter and once they had done that, the other times they put a letter in front of her to sign, it was easier. As she had in her 2009 statement and 2010 evidence, she described how the Krishans told her CPOs had been made. They said the Properties were ‘worthless’ (only worth £100,000 and not enough to cover her debts, including the mounting arrears in rates and Council Tax). They said she risked bankruptcy, legal proceedings and even prison. They also kept on about her ending up bankrupt and homeless. She added when she and Mrs Krishan returned from Spain, the Krishans met Bill who handed over some keys. The Claimant said eventually she gave in and agreed. She said once she accepted financial support, first the cheques and then the monthly maintenance, she got used to it and whilst she initially she insisted she could have managed without it, in re-examination she admitted she found it useful and came to depend on it.

On the CPO issue, the Claimant’s solicitor’s letter of 24^th October 2008 (to which I return) said she had been told ‘a compulsory purchase order procedure had been initiated by the Council’. It was later in November 2008 that the Council’s Mr Todd confirmed the Properties were never ‘threatened to become subject to a CPO’ which was always a ‘last resort’. Whilst it was vague in the initial letters, throughout the Claimant’s evidence – her 2009 statement, 2010 oral evidence, 2022 statement and 2023 oral evidence, she has consistently insisted the Krishans said CPOs had been made. The irony is there is some contemporaneous corroboration in the note of the meeting with Mr Davies in November 2005 she denied she attended, where he noted ‘Properties in Coventry – CPOs losing them’ (not ‘CPOs but last resort’, ‘CPOs threatened’ or even ‘CPOs likely’). As I said, I cannot find precisely what was said in that meeting and by whom. However, Mr Davies was told something like ‘CPOs losing them’ and I find that is consistent with what the Claimant says the Krishans told her. In her statements, the Claimant said the Krishans told her in 2005 words to the effect that ‘CPOs had been applied against all the Properties’ (2009 statement) or ‘CPOs had been applied on the Properties’ and ‘the Properties were worthless and it was essential to remove the CPOs to protect their value’ (2022 statement) – in other words that CPOs had been made. This is also corroborated by Mrs Krishan saying in the 19^th May 2008 recording the Properties were ‘worthless’ and the 30^th June 2008 one: ‘When the first lot of CPO orders came’ (not ‘were threatened’) and ‘back to [being] saddled with CPOs and everything else again’.

Whilst the Claimant’s lawyers in 2021 pleaded that the misrepresentations were in Spring 2005, she had already said it was later in her 2009 statement. As I said at paragraph 99 above, the letter of 4^th July 2005 is more consistent with being drafted by Mrs Krishan than the Claimant, just as Mr Graham pointed out similarly-complex language in her statement was not consistent with her own. Four months between July and November 2005 is also inconsistent with the Krishans’ case: far from them dragging their feet (Dr Krishan was authorised on 4^th July, sent Donaldson’s report 12^th July, Mrs Krishan wrote cheques on 22^nd July, Dr Krishan wrote to the PCT 5^th August etc), I find the Claimant did so. The Krishans did not pay rates arrears on the Shops in September-October 2005 (which was missed from a Council letter in 2014) - I find it was the Claimant, Bobby or Bill. She says in November the Krishans met Bill and went round the Properties (hence their photographs of 5^th November) and he handed them keys. The Krishans said in 2009 they met Bill around that time, as the Claimant saw them as ‘family properties’, I find that she would not have agreed to the Krishans’ plan until Bill had also agreed. The last barrier to her agreement was overcome. That explains why Dr Krishan in November suddenly started to instruct all the professionals. That it is consistent with her case that until then, they pressed her.

As to how the Krishans ‘pressed’ the Claimant, her account is also supported - and theirs undermined – by what Mrs Krishan said in the 2008 recordings:

Moreover, on this key point, the Claimant is also corroborated by her son Bobby, who in his statement recalled visiting the Krishans with her and them saying this:

In the light of all that, in my judgement the underlined content of Mr Davies’ note corroborates the Claimant and Bobby’s accounts of what the Krishans told them:

I find the ‘50/50 share’ mentioned in November 2005 is consistent with a 50% shareholding in Gracefield, organised that same week. The ‘further written agreement to be sorted’ is consistent with what the Claimant says was their agreement - for the Properties to be renovated and rented, with a 50/50 split of the proceeds (and indeed the Krishans’ expenditure repaid from her share), but there is no mention in Mr Davies’ note about later selling their Properties or their sale value. This is consistent with the Claimant’s evidence that at least at this stage, there was no discussion in front of her of onward sale of the Properties or a profit share as such. Certainly, a profit share was not mentioned by Dr Krishan to SB’s firm two days later on 18^th November when SB’s colleague SR had recorded Dr Krishan telling her that he would be buying into the Properties by paying off the Claimant’s debts. Moreover, as I will describe, there is also no mention of a true ‘profit share’ on sale of the Properties in SB’s 2006 notes.

I remind myself that I have rejected parts of the Claimant’s evidence, not least as she forgot this meeting; she lied about why she started making the covert recordings in 2008; and at least for 1½ days of her evidence was an incredibly difficult witness. I also remind myself of the important evidential principles at paragraphs 81-89 above. The burden of proof is squarely on the Claimant and it is not enough to for her to persuade me that her account is ‘the most likely’, as that would be her failure to discharge the burden of proof (‘The Popi M’), which is to persuade me that it is more likely than not that the Krishans told her what she alleges (Re B). Since the Claimant alleges fraud and undue influence, I will decide those allegations later, on all my primary findings of fact which shed light on conduct and intentions at the time and must be clearly proved (Enal, Three Rivers, Jafari-Fini, Kekhman). However, whilst for now making findings of fact on this period, I remind myself that the conduct the Claimant alleges is inherently improbable requiring cogent evidence (Rea, Jafari-Fini, Kekhman, Privalov). In particular, I remind myself that the fact the Krishans were found to have committed fraud procuring the Purle Judgment and to have lied in their evidence in the Gasztowicz Judgment, does not mean they are now giving dishonest evidence to me – they may have lied earlier to bolster a true case they now pursue before me that there was no undue influence (Lucas, Jhutti, Slocom, Martin). Yet even bearing all that in mind, I strongly prefer the core of the Claimant’s account, which I find to be true on the balance of probabilities, on three alternative bases:

I will start my findings of fact for this period by picking up where I left off with my findings at paragraph 168-170, about Bobby Takhar’s meeting on 30^th June:

Indeed, standing back to review all my findings so far, one can see the Claimant’s trust (in the lay sense – I come to the legal issue of ‘a relationship of trust and confidence’ later) in the Krishans growing and developing over time:

Shortly after the Claimant had signed that first letter of authorisation in July 2005 and the Krishans had sent it, they received a copy of the Donaldsons report sent on 12^th July 2005, which suggested the Cinema ‘offered a commercially attractive proposition to a developer’. Yet whilst Donaldsons was less positive about the Co-Op, the idea of a health centre must have attracted Dr Krishan. Indeed, within a month of being authorised by the Claimant, on 5^th August, he had written to the PCT, although he said he ‘was not interested in selling the building or site’. He told the PCT ‘he had spoken to the planners’ who had suggested it – just as it had been suggested in the meeting. I find that Dr Krishan must have either had a copy of the note of the meeting on 30^th June, or already been told the gist of it by the ‘planners’ at the Council, including that the process had started leading to CPO powers being made available, but as an ‘absolute last resort’ – just as Bobby had been told at that meeting. Indeed, CPOs would have been the obvious first question to ask the Council about. I find on the balance of probabilities Dr Krishan - and through him Mrs Krishan - knew full well CPOs were a ‘last resort’ and indeed the Council’s position did not change.

Dr Krishan in his 2022 statement recalled thinking, ‘there should be a corporate vehicle to protect them all’, ‘any borrowing would be in the company name so they would not be liable’ and ‘transferring the Properties into a company meant they would not all be in one name and would prevent anyone being able to walk away with them’. As I said, Dr Krishan suggested it was the Claimant’s idea, because of her benefits, rates and Council Tax bills and the Council’s ‘s.215 notices’ on the Cinema – as he admitted, different from CPOs (which it ‘had not occurred to him to mention’, even though he said she worried about CPOs leading to ‘bankruptcy’ and ‘homelessness’). This does not fit his description of her to Mr Rodgers as having ‘no business acumen’. I find it was Dr Krishan’s idea, for the reasons he gave. Indeed, the Claimant’s suggested motive makes little sense. Maintenance from the Krishans might also be thought to affect her benefits. In any event, she would not have needed either if she had simply sold the Cinema – even for £160,000, let alone £200,000. It would have got the Council ‘off her back’, avoided any ‘s.215 notice’, paid the rates and Council Tax arrears on the Shops and left a ‘development pot’ for the Co-Op (I will find that but for the Krishans’ intervention, it would have been a ‘no brainer’ by April 2006 for her and Bobby). The Claimant’s family were still paying arrears on the Shops in October 2005, not pushing the Krishans to pay. There was no ‘s.215 notice’ on the Cinema until 25^th June 2008: before the covert recording on 30^th June when Mrs Krishan said ‘when the first lot of CPO orders came’.

Mrs Krishan did not claim she had mixed up s.215 notices with CPOs – indeed there were neither before 2008 (and never a CPO). But her comment then supports the Claimant’s account that the Krishans had told her there were actually CPOs (not just ‘likely’ ones) before. In her 2022 statement, the Claimant said they told her in 2005 that ‘CPOs had been applied on the Properties’ which ‘meant they could be snatched away from her leaving only liabilities’ and ‘she could be left ‘penniless’ and ‘homeless’ and ‘it was essential to remove them to protect their value’. This is similar to the core of her account in her 2009 statement that ‘CPOs had been applied against all the Properties’ and the Council could ‘snatch’ the Properties, leaving her ‘penniless’ and ‘homeless’. Her solicitors put it differently in late 2008, but at that time whether there had been CPOs or not was still being clarified with the Council. Given the Claimant’s patchy memory, in fairness to the Krishans, I have also considered whether she may have misremembered them telling her CPOs ‘had been applied for’ on the Properties – as a misunderstanding of ‘the start of the process’ as stated on 30^th June, or indeed ‘investigation’ of a s.215 notice on the Cinema in October 2005. However, neither was put to her - the Krishans say she mentioned both, not that she misunderstood them mentioning either. Moreover, the Claimant and Bobby already knew what the Council had said on 30^th June about CPOs and Dr Krishan said he did not need to mention it. As I noted, whilst he said the Claimant mentioned ‘s.215 notices’, there were no such s.215 notices until 2008 and it was only ‘investigated’ in October 2005. Indeed, I find that the Claimant’s clear and consistent recollection of being told about CPOs by the Krishans – rather like her clear and consistent recollection of the proposed auction in 2008, was a strong shock clearly lodged in her memory.

Therefore, on all the evidence, I find on the balance of probabilities that over the Summer of 2005, after Dr Krishan had been authorised by the Claimant to deal with the Council, he and Mrs Krishan arranged to meet the Claimant (I accept the little detail in her 2022 statement that it was in Debenhams). I find on the balance of probabilities that the Krishans between them told the Claimant that ‘CPOs had been applied on the Properties’ which ‘meant they could be snatched away from her leaving only liabilities’ and ‘she could be left ‘penniless’ and ‘homeless’. However, I accept the Claimant had been told by Bobby that CPOs were a last resort, but she had not understood them to have such dire consequences and she was very worried. However, I also find on the balance of probabilities that the Krishans reassured her they were professionals, with experience in property development and that she should leave this to them, as it was ‘payback time’ for the help the Claimant had given to Mrs Krishan in her childhood. This was the start of what I am calling the ‘stick’ and ‘carrot’ of the Krishans’ ‘rescue narrative’. I find the Claimant told Bobby, who was also shocked and they visited the Krishans. I have quoted his account above at paragraph 186 and I explained his shock at this meeting explains his evidence about ‘not picking up on the CPOs’. I find on the balance of probabilities that as Bobby says, the Krishans told them: ‘the buildings had become a liability and if the Council was not properly dealt with, the Claimant would be left with huge debts and legal costs’. Dr Krishan mentioned she would be left ‘bankrupt and homeless’ and mentioned prison. He also said they had ‘experience in fighting CPOs’ and ‘knew inside out the tricks the Council would use’. Mrs Krishan said they would not allow the Council to take away the ‘children’s birthright’, would ‘fight her corner’ and that it was ‘payback time for all that she had done for Parkash in her childhood’.

Indeed, on the first alleged false representation, I find on balance of probabilities the Krishans did say to the Claimant words to the effect that the Properties were subject to CPOs (or even if I am wrong about this, that they were ‘likely’ to be):

I deal next with the third alleged false representation i.e. but for the CPOs, the Properties would be worth £300,000 on the open market. Mr Graham submits that the Claimant and Bobby were in a better position to know the Properties’ value – the Krishans were not expert valuers and relied on the earlier valuations consistent with a total value of £300,000. However, I find Dr Krishan came up with this value, which was incorrect (whether fraudulent I will decide below):

This leads to the second alleged representation: that with a CPO, the Properties were ‘worthless’ or only worth £100,000. Dr Krishan accepted even if there had been a CPO, the Properties were still worth £300,000, not £100,000. Mr Graham therefore accepts if the Krishans had said that due to the CPOs or threat of them the Properties were only worth £100,000, that would be a clear misrepresentation. But he submits the Krishans never said that they were, still less that they were ‘worthless’. However, I find on the balance of probabilities that they did both:

However, the Krishans always balanced their ‘stick’ with their ‘carrots’. On 22^nd July 2005, Mrs Krishan paid the two cheques totalling £5,000 to the Claimant. In October, she also took her to Spain for a break the Claimant clearly needed, still struggling financially and caring for Arun and Sukhjeet. Moreover, I also accept the Claimant’s evidence that Mrs Krishan also presented transfers as positive – a way to deal with the CPOs (never properly explained) and to avoid any claim by Ian. Moreover, I find the Krishans reassured the Claimant the transfers to a company was to fight the CPOs and renovate the Properties to rent them out. I find she never agreed for the Properties to be refurbished and sold. They were her ‘family properties’ and Dr Krishan himself accepted she was reluctant to sell (as shown by her dismay in 2008 when the Co-Op was up for auction). I find proved on the balance of probabilities the Claimant’s pleaded fourth false representation: that if she transferred the Properties to Gracefield, they would ensure the threat of CPOs was removed and refurbish and manage them for her benefit. (Again, I come back to the issue of fraud). However, the fifth is not proved: whilst the Krishans called it an ‘act of charity’, the Claimant knew they would also benefit.

I also find on the balance of probabilities that the Krishans reassured the Claimant that, whilst the Properties would be transferred to the company to undertake the developments and she had a 50% shareholding, this was only a formality and beneficially the Properties still belonged to her which she believed. As she said:

Therefore, on 5^th November 2005, after the Claimant and Mrs Krishan got back from Spain, the Claimant and the Krishans went to see the Properties with Bill. The Claimant said she travelled with Mrs Krishan, whilst Dr Krishan drove Bill and spent the day talking to him and asked him for the keys, which Bill gave to him. So, the Claimant knew Bill also agreed, which I find then enabled her to agree in principle to the transfers. She gave the reasons in her statement:

Once the Claimant had agreed in early November 2005 to transfer the Properties to a new company, Dr Krishan acted quickly. Mrs Krishan chose the name ‘Gracefield’ and once the Claimant handed over the deeds on 14^th November, Dr Krishan instructed SR at his accountants to incorporate it and on 16^th November confirmed to SR its shareholdings: 50% to the Claimant, with 25% each to the Krishans. But as I said, the Claimant was told the Properties still belonged to her, so transfer was just a formality. I find on the balance of probabilities their agreement was for a ‘50/50 share’ of Gracefield and the benefits from renting, albeit the Krishan’s expenditure would be repaid from the Claimant’s share. From the letters from Donaldsons to Dr Krishan (of 1^st November and 23^rd November 2005), I find that he met them and an officer from the Council on 16^th November – the same day as Mr Davies – it is unclear which was first. I have seen no note of that meeting, but I assume pending the PCT’s response on the health centre, he proposed a similar plan as SR told SB on 18^th November he had told her: that paying off the Claimant’s debts would be ‘his way of buying into the properties’ and he planned to demolish the Cinema and build flats; and at the Co-Op to build 3 units and upper floor flats; and in each case to rent out the flats or to sell them.

However, when on the same day Dr Krishan – now with Mrs Krishan and the Claimant – met Mr Davies, Mr Davies’ note mentions nothing about any plan to sell the Properties. As I said at paragraphs 173-174 above, given all the parties’ unsatisfactory evidence about this meeting, I am wary of making findings about exactly what was said and who said it, but I do find Mr Davies’ note to be a reliable and contemporaneous record of the gist of the meeting. I find on the balance of probabilities that gist is more consistent with the Claimant’s account of what she had been told by the Krishans since July – what I am calling their ‘rescue narrative’ – than it is with the Krishans’ account of what the Claimant told them. This is why Mr Davies was told at the meeting – either by the Claimant or the Krishans – that she ‘needed help with bankruptcy and eviction’ as due to ‘CPOs’ she was ‘losing’ the Properties. If necessary to make a finding on who was relaying this to Mr Davies, I would find on the balance of probabilities it was Dr Krishan – whose statement did not even mention the Claimant being there.

Dr Krishan speaking (at the very least towards the end) would also be consistent with the comment that the ‘deal was in her favour as Dr K was to do finance’. That is the context for the description of a ‘verbal discussion agreed 50/50 share with a further written agreement sorted’. As Mrs Krishan later put it: ‘we did say it would be 50/50 on what we did’ as the Claimant acknowledged. However, as I said at paragraph 174 above, that same week, Dr Krishan had arranged the incorporation of Gracefield with the Claimant to have 50% of the shares and the Krishans 25% each. Despite what Dr Krishan told SR in the Claimant’s absence on 18^th November, there is no clear reference in Mr Davies’ note to ‘sale’. I find ‘sale’ was not mentioned in front of the Claimant, which is one reason why she was quite so shocked by the auction in March 2008. For that and the other reasons at paragraphs 171-189 above, I accept on the balance of probabilities the Claimant’s evidence that she never agreed to refurbish and sell the Properties, but only to rent them. Mr Davies’ note is not inconsistent with that. However, as I say, that agreement is also inconsistent with a pure ‘act of charity’: which reflects their refrain of ‘payback for the Claimant’s help’, but clearly by November 2005 she knew the Krishans stood to benefit. Then Dr Krishan got to his point: he needed an architect and Mr Davies suggested Mr Johnson.

On 28^th November, Dr Krishan instructed his regular solicitor, Mr Whiston of Pitt & Cooksey Solicitors, enclosing the deeds explaining that Gracefield had been incorporated (with the three of them as directors and shareholders) for the Properties to be transferred from the Claimant and instructed him to implement that. On 14^th December 2005, Mr Whiston confirmed all were mortgage-free and asked Dr Krishan to confirm whether there would be consideration for the transfer or whether they would be a gift. He added the Claimant should take tax advice. Of course, Dr Krishan had already instructed SB, but he was her client, not the Claimant. Then on 7^th December, Dr Krishan first met Richard Johnson, the architect, introduced by Mr Davies. The Claimant was not present. They visited the Properties and Mr Johnson later said in his letter of 12^th December 2005, he felt the Shops required a structural engineer but could be refurbished. He felt the Cinema was derelict and they agreed to knock it down for a residential development to be built. The Co-Op was empty and the building was in poor repair, with broken windows and brambles. They agreed to keep the ground floor as retail with the upper floors as flats. The same day, Dr Krishan wrote back to Donaldsons to confirm that both Mr Johnson and SB were involved. They acknowledged that on 16^th December.

As 2006 began, Coventry CC were still receiving requests for updates from councillors about the Cinema – pressing for demolition. It was decided to review whether a CPO could force development of the site which was to be considered. However, it is confirmed by Mr Duncan and Mr Todd’s uncontested evidence that it never even got to the first stage for a CPO of a Cabinet report. As Mr McGuigan later replied on 27^th March 2006, whilst there was a decision to use the CPO process as a ‘last resort’, there was now a development company and things were ‘moving in the right direction’. I find Dr Krishan would have known this all along. Doubtless it would have been confirmed to him in his frequent dealings with the Council and their agents Donaldsons in Autumn 2005, not only by his discussions with the planners referred to in his letter to the PCT in August, but in his November meeting with Donaldsons and the Council on 16^th November.

On 30^th January 2006, Ms Hayward wrote to SB to say they were ‘encouraged that Dr Krishan has now become involved’, but wanted to know more about his track record. The plans were for 12 residential apartments at the Cinema site, with ‘rough estimate costs’ of £606,000 to build; and at the Co-Op, a retail unit on ground floor and 12 apartments above costing £925,000. Ms Hayward added that ‘no allowance has been made for land value as the land [will be] owned by the company’ (she noted above it was still owned by Dr Krishan’s ‘family’). On 21^st February 2006, SB replied to Ms Hayward to explain about Dr Krishan’s health centre project in Wolverhampton with a build cost of £2.1 million and she added that Dr Krishan ‘had secured funding for the development’. However, by that stage, Dr Krishan had done no more than set up Gracefield’s bank account.

SB’s letter brings me to her involvement following SR’s email on 18^th November. As I said earlier, in brief SB’s evidence was that her initial meeting about Gracefield was with Dr Krishan at his home (when discussing other business) and he mentioned the Properties owned by the Claimant and the plan to transfer them to the company, develop and sell them to split the proceeds. However, I do not accept the latter was discussed in front of the Claimant. SB met her with the Krishans at their home on 20^th January 2006 and SB took a contemporary note. The ’client’ at this stage is noted to be Dr Krishan and I find that it was him doing most of the talking. The Claimant was largely a ‘passenger’. She accepts she briefly met SB but became emotional about Bill and left them talking and left the room, which explains why she cannot remember the discussion well. Certainly, there would have been nothing in it to change her understanding that the Properties would still belong to her and the transfer was for ‘administrative convenience’. This may also explain her lack of interest in the mechanics of that. SB remembered the Claimant’s gratitude to the Krishans and said in evidence that she also made ‘the odd point’. That was probably the Properties being owned jointly for approximately 10-11 years with the Cinema bought in 1986, with 1999/2000 ‘sale range’ when she acquired the Properties from Bill – who is later referred to as ‘still being a partner in the business but being ill in the mid-1990s’ and also confirming her benefits position (Income Support and Child Tax Credit).

Speaking of the Claimant’s finances, it is undisputed that from November 2005, the Krishans started paying the Claimant a monthly maintenance of £400 and also discharged the bills on the Properties which she had been struggling to do. Therefore, whilst the Claimant said she could have managed without it, it is clear at the time that she was not managing without it and that maintenance was vital to her and also made her feel financially dependent on the Krishans. Turning back to the SB meeting, I find Dr Krishan told SB they would fund the development, which would have benefits for the Claimant, such as them paying the arrears (said to be £7,500) and an allowance to her of £400 a month starting two months earlier following the £5,000 (on the credit cards in July). The Claimant now accepts that in total from December 2005 to September 2007, she was paid £13,800 for her maintenance, which less the £5,000 would equate to 22 monthly payments. That is effectively the same as on the Original Balber Takhar Account. However, whilst she also accepts the Krishans paid £5,672 in rates and other arrears, that is much lower than in the Balber Takhar Account and I return to it. In any event, this financial support from the Krishans from late 2005 was invaluable for the Claimant in financially managing, but also crucial in cementing her trust in them.

I find that after the Claimant left the room, Dr Krishan relayed to SB in January their actual plans for the Properties in much more detail than before Mr Davies in November. The Co-Op was said to have a £1 million cost to convert to shops and flats; whilst the Shops were to be converted back into residential accommodation. Though there was subsidence, a grant was available and the Krishans were also paying the rates at that time. It was noted the earliest date for the build would be Summer 2007. Yet tellingly, whether or not the Claimant was present, as SB accepted in evidence in 2010: the notes simply do not mention the possibility of sale. The closest they come is a reference to developing the Cinema ‘15 flats x £150k £55-60k’. SB in her evidence did not explain what that meant. However, especially given the reference in the next line to ‘Co-Op £1m spend to convert’, I find the reference to the Cinema was development costs not sale prices.

Unlike the Davies meeting two months earlier, there was discussion of the values. The total market value of all the Properties was said to be £300,000. In her 2010 evidence, SB said she understood that had been agreed before the meeting. SB accepted that she had seen no formal valuation of that. It was broken down into the Co-Op as £120,000, the Cinema £90,000 and the Shops £90,000 (‘3 x £30k’). SB noted she needed to check the position on VAT with the Co-Op. SB’s note mentioned ‘Post April 2006’ (perhaps the plan to stagger the transfers). However, just as with Mr Davies in November, there was no reference in SB’s 20^th January meeting notes to any payment (beyond arrears and maintenance) to the Claimant, still less to any 50% profit share: consistent with the Claimant’s recollection that it was not discussed in front of her. In fact, SB’s 2009 statement and 2010 evidence was that the profit share was mentioned by Dr Krishan in discussion in late 2005, not at the 2006 meeting. I find that even if the Claimant was present, she would have ‘tuned’ out from the detailed business discussion. In any event, I find there would have been nothing in it to change her fundamental understanding that the Properties would still belong to her (and Bill) after the ‘formal’ transfers.

Indeed, SB added in her statement after that meeting, she considered there were actually two tax options: either the parties’ plan for the Claimant to transfer the Properties to Gracefield legally, or for her to retain them and for Gracefield to act as the developer. The Claimant does not mention that, but had she heard it, it would have confirmed her view that the transfer was just a formality for tax reasons and the Properties would still belong to her (and Bill). Dr Krishan accepts SB said this to him, so it cannot have been finally decided by the 20^th January. However, he wanted the Properties transferred to a company he could control, not the burden of managing them without the benefit of ownership. There is a clue to how he responded to this unexpected threat in an important note from SB dated 20^th February 2006. She said she prepared part of the note in advance of the meeting of 20^th February (I find the first page) and part at the meeting itself (I find the second page). The Claimant did not recall this meeting, but I find that as the topic was tax planning (even though it was her potential tax), she ‘tuned out’ and has since forgotten about it. However, the contents of the first page of SB’s note – written before the second meeting - are very revealing. SB set out two options, although neither appear to involve the Claimant retaining them. ‘Option 1’ was based on a sale value ‘Per CPO’ of £100,000 which following tax calculations would end her up with a tax bill of £24,600. ‘Option 2’ was based on a sale value ‘Est value £300,000’ which would end up with a tax bill of £88,600.

At this stage, I repeat paragraph 16 of SB’s 2009 statement (with my underline):

Moreover, as I noted above at paragraphs 193-198 above, I found on the balance of probabilities the Krishans told the Claimant in 2005 not only that ‘the Properties were worthless’ but also that ‘it was essential to remove the CPOs to protect their value’. In any event, I also find on balance of probabilities that the Krishans told the Claimant (and I find SB – despite her saying ‘in the event that’) there were CPOs in 2006 before the transfers, shown by documents from March:

At the 20^th February meeting, I find SB discussed the two tax options for the transfer ‘price’: the £100,000 ‘CPO Value’ and £300,000 ‘market value’. I find £100,000 was agreed as the ‘price’. The £200,000 ‘deferred consideration’ was the balance of the agreed ‘market value’ of £300,000 (as SB later adjusted in the accounts). I accept Dr Krishan’s characterisation to Mr Rodgers that the Claimant (then) had ‘no business acumen’. She did not understand the CPO process (how they were made, challenged etc) and specifically that CPOs paid full market value less debts. She also did not expect to be actually paid (or indeed to be treated as loaned) a penny because as far as she was concerned, all these detailed mechanics of transfer were just formalities and tax planning, as the Properties would still really belong to her (and Bill) after transfer into Gracefield’s name. So, whilst this was not in fact purely an accounting exercise by SB as Mr Graham suggested, that was how the Claimant understood it: she thought all these were just ‘paper figures’, as Mrs Krishan would soon call them. However, what was not discussed at the 20^th February meeting was any onward sale of the refurbished Properties.

Indeed, SB’s note does not refer to any ‘50% profit share’ on sale, as she accepted in evidence. Indeed, her statement itself stated the action point was to ‘draft an agreement regarding the £200,000 split over properties’, not a 50% profit share. That is also clear from SB’s letters to Mr Whiston and the Claimant noted above. I return to both, but quote and underline part of the letter to the Claimant, which again would have reinforced the Krishans’ incorrect statement there were CPOs:

Going back to late February 2006, as noted above, on 21^st February, SB did write to Donaldsons to confirm Dr Krishan’s development experience including on a health centre. But on 23^rd February, Mrs Hayward told Dr Krishan that would go no further, inviting his proposals on use for the Co-Op. (Dr Krishan therefore changed to his back-up plan of mixed retail/residential use discussed with SB). But Mrs Hayward was more positive about the development of the Cinema, enclosing a residential development brief for Mr Johnson. In essence, this was for demolition of the Cinema and construction of a 3-4 storey block of flats (with parking). After another meeting with Dr Krishan, Mr Cocks and herself on 3^rd March to consider Mr Johnson’s draft plans, Mrs Hayward noted good progress. The Cinema would have 14 flats in total. The Co-Op would be retail development on the ground floor and 12 flats above – six one-bed and six two-bed flats.

Also on 3^rd March 2006, with Donaldsons’ blessing to proceed, Dr Krishan set up Gracefield’s bank account (as Mr Rodgers confirmed) and Mrs Krishan wrote to Mr Whiston to request him to prepare transfer documentation for the Shops to be transferred to Gracefield in March and the Cinema and Co-Op after 5^th April (as also discussed on 20^th February). On 3^rd March, Mrs Krishan also prepared a letter in the Claimant’s name confirming she instructed Mr Whiston to transfer the Properties to Gracefield. As noted above at paragraph 99, the format and mis-spelling of SB’s firm’s name was identical, showing she drafted both. The Claimant signed it, not only as she implicitly trusted her, but also because I find she had recently been in two meetings with SB to discuss it. As I say, in the first, she became emotional and left the room. The second, I found she ‘tuned out’ of discussions of further mechanics and tax implications. But by the end of that meeting at the very latest (in fact I find months before), the Claimant had been told by the Krishans (or at the very least, had been told by them through SB) that CPOs had been made and the Properties were only worth £100,000. Yet as I have also found on the balance of probabilities, nothing had been discussed at either meeting to change the Claimant’s established understanding that after formally ‘putting the Properties in Gracefield’s name’ to protect them from the CPOs (and Ian) the Properties would really still belong to her (and as she saw it, Bill too).

Ironically, on 14^th March (see paragraph 223 below) the Council discussed their response to Councillors about the Cinema, saying their plan of warning of CPOs as a last resort then negotiating had seen progress. In stark contrast, as SB had been told by Dr Krishan CPOs had been made valued at £100,000, on 15^th March, SB wrote her letter to the Claimant (quoted again below); and this to Mr Whiston:

The Claimant has always accepted seeing a copy of SB’s letter to Mr Whiston which he sent to her on 15^th March asking her to confirm the values. She recalls reflecting on and querying ‘sale’ to Gracefield and the low valuations (I find the Krishans had told her the £100,000 ‘CPO value’ before and she had ‘tuned out’ of SB’s meeting, but she was now being asked to confirm it by a professional). Whilst she earlier denied seeing SB’s letter to her, both in her 2009 statement and her ‘calm’ cross-examination she accepted she did. It stated as follows:

Given the Claimant’s signature in this letter was found to be the source of the forged PSA in the Gasztowicz Judgment, it has been explored in detail in evidence. I note the Claimant addressed it in her 2009 statement much closer to the time – before repeated ‘re-retrieval’. Although confusingly dealt with in two different places (paragraphs 303-304 and 319-321), she appears to be discussing one conversation about Mr Whiston’s letter and SB’s letters and the draft response. The Claimant said she ‘plucked up the courage to question her’ but Mrs Krishan said they were just ‘paper figures’ and ‘the price set by Coventry CC for them’ (as the Claimant had been told in February by the Krishans and – unwittingly, also SB) and ‘They had to do this to save the Properties’ and pressed her ‘Do you not want to save them ?’ stressing ‘family honour’ and explaining the transfers were split as it was more ‘tax efficient’. The Claimant said she was also reassured by Mrs Krishan’s explanation of SB’s letter to herself as ‘just the hoops they had to go through to allow them to deal with the Properties on her behalf’ and such was her trust in Mrs Krishan, she accepted it. The Claimant’s 2022 statement covers some of the same ground and in evidence, she added Mrs Krishan had called the letters ‘legalese’ that the Claimant accepted as she ‘was not a numbers person’. She therefore also accepted Mrs Krishan’s word the transfers had to be done to save the Properties from the CPOs, so she signed Mrs Krishan’s draft. Whilst Mrs Krishan denied it, on the balance of probabilities I accept this was the gist of what she told the Claimant on 24^th March 2006. Indeed, it is pretty similar to what Mrs Krishan told the Claimant in the 2008 covert recordings. The ‘stick’ were the CPOs which reduced the Properties’ value and meant ‘she had to do this to save the Properties’. The ‘carrot’ was Mrs Krishan’s reassurance of the Claimant that this was a question of ‘family honour’ and these were just ‘paper figures’ or ‘legalese’: presented as SB’s tax/accounting exercise, even though it was not, as I discussed at paragraph 215. Therefore, I find on balance of probabilities despite SB’s letters of 15^th March, the Claimant was still reassured that even after transfer the Properties would really still belong to her (and Bill) and indeed, despite references to ‘sale’, the plan in reality was still to rent, not sell.

On 29^th March 2006, Mr Whiston sent Dr Krishan (not the Claimant) the three TR1 transfer forms on the Shops and explained the Claimant needed to sign them in the presence of an independent witness (who was Mrs Beeston, Dr Krishan’s receptionist). On 31^st March, Mr Whiston sent on another two TR1s for two of the three Shops, with consideration for each as £10,000 each (and later for the Cinema £40,000 and Co-Op £30,000 – totalling £100,000 for all the Properties). The Claimant now accepts that she signed and Mrs Beeston witnessed the three transfers for the Shops (with no reference to trusts) on 31^st March, but I accept her recollection: only after Mrs Krishan said she needed to sign them to save the Properties as ‘the Council had become more aggressive’. This was really a continuation of Mrs Krishan’s ‘rescue narrative’ throughout.

I should add here that on 22^nd March, Mr McGuigan at Coventry CC emailed Mr Duncan asking him to draft a reply to the councillors’ January letter pressing for action on the Cinema, following an email discussion about it earlier in March. Somewhat ironically given Mrs Krishan drafting letters for the Claimant to sign, Mr Duncan did so for Mr McGuigan which was sent out on 27^th March. As I noted above, it said in February 2005, the CPO process had been approved in principle as a last resort. The letter set out the progress suggesting it was ‘moving in the right direction’ but ‘if progress stalls, the option of compulsory purchase remains provided it can be justified and financed’. So, internally within the Council, the officers were even telling Councillors that CPOs were only ‘an option’. The Krishans knew this, but it was totally different from what they had incorrectly told the Claimant: that CPOs had now been made, they meant the Properties were only worth £100,000 and with her debts ‘worthless’.

However, unaware of that, such was the trust that the Claimant now placed in the Krishans that on 3^rd April 2006, a letter in her name (which again I find was drafted by Mrs Krishan) asked him to prepare her a new will to benefit in equal shares Bobby, Sukhjeet and Arun – Nina was not mentioned – and tellingly, to have the Krishans as the executors. Optimistically, he was asked to draw this up before her holiday to India (in fact with Mrs Krishan) that week and also to draft up a formal Power of Attorney for Bill who was mentally ill. I do accept that the will is what the Claimant wanted to do – in May 2006, she confirmed as much to Mr Whiston in a meeting without the Krishans. However, by this stage, the Claimant was not only trusting them with the Properties through their company (albeit she was a director and 50% shareholder at that stage), but also trusting them with the execution of her will. Nevertheless, on 5^th April, Mr Whiston wrote back to the Claimant and rightly explained he could not prepare a will for her without meeting her and confirming her identity. He again rightly added that he could only draw up a Power of Attorney on Bill’s own instructions, but questioned whether he would have mental capacity for it.

The same day, 5^th April, Mr Whiston also wrote to the Claimant a letter. As well as confirming receipt of the signed TR1s for the Shops, he asked whether the £30,000 consideration for them would be paid to her on completion of the transfers or whether she had already been paid and if so, when. He added:

The Claimant responded in the one letter from her in her handwriting of 6^th April. But she says she was just writing down what Mrs Krishan told her over phone to write. I accept that, especially given the again rather formal language and the rush to get this done as Thursday 6^th April 2006 was only two days before she and Mrs Krishan were due to head to India on the Saturday. It said:

Mr Whiston wrote back on 10^th April, although by that time the Claimant and Mrs Krishan were in India. His letter replied:

On 12^th April, whilst the Claimant and Mrs Krishan were in India, Dr Krishan met SB who handed him a draft of the profit share agreement (as she annotated ‘passed to client 12 April 2006’) – the ‘PSA’ on one copy of which the Krishans later forged the Claimant’s signature. I have quoted that at the start of this judgment, but will do so again. I set it out almost in full (again noting SB’s language at the first (b) is consistent with thinking there actually was a CPO):

The PSA needs to be seen in the context of my earlier findings at paragraphs 203-204, 210-212, 215-216 and 219-221 above. The PSA is the first appearance of the ‘50% profit share’ in the documentary record. I found it was not mentioned in Mr Davies’ note of 16^th November 2005, where I found ‘50/50 share’ was consistent with the agreement between the Claimant and the Krishans to split 50% shareholdings in Gracefield and split 50/50 the profits of renting the Properties (after payment of Gracefield’s / the Krishans’ costs). This is borne out by the absence of reference to a ‘50/50 profit share on sale of the Properties’ in either SR’s note of what Dr Krishan told her on 18^th November - or the 2006 notes of SB on 20^th January or even 20^th February. This is also consistent with SB’s letter to the Claimant of 15^th March, splitting the £100,000 ‘purchase price’ of £100,000 on the director’s loan account; with a ‘profit share’ totalling £200,000 – with no reference to 50%. On the balance of probabilities, I accept the Claimant’s evidence that it was never discussed with her. Indeed, it is unclear how this 50% profit share for the Claimant came to be inserted by SB. SB said she understood the Claimant and the Krishans would each have 50%. Yet, that is not mentioned in SB’s note, nor in her 15^th March letters; she did not specify the Krishans had 50% in the PSA either. In evidence, SB accepted the draft was incomplete and could be interpreted as leaving it to Gracefield, so further split between the Claimant and Krishans. There is no way in 2006 the Krishans would have signed it in those circumstances. As I elaborate later, I reject their entirely new account before me that they signed two copies of (they say, the incomplete) PSA – in April 2006 and in October 2008. It is also inconsistent with the newly-disclosed emails showing SB in October 2008 had no signed copies. I will find the Krishans signed the PSA for the first time in November 2008 after the litigation started. Since I find the Krishans did not sign the incomplete PSA themselves in 2006, they were hardly likely to give it to the Claimant to sign. I find this is why she never saw it, let alone signed it. I reject the vague hearsay accusation of Linda Hunt to the contrary.

Finally in this section, in the Claimant and Mrs Krishans’ absence, the development progressed. Mr Johnson emailed Dr Krishan on 18^th April to set out the proposed works. On 21^st April, Mr Whiston sent Dr Krishan the transfers for the Cinema and the Co-Op for the Claimant to sign and be witnessed. Meanwhile, SR wrote to Dr Krishan on 24^th April asking about the Properties’ proposed use. He answered on 26^th April confirming they expected to sell the flats on the Cinema site (I find not discussed with the Claimant), whereas the Co-Op retail and residential units would be rented. Finally, on 28^th April 2006, again witnessed by Mrs Beeston, the Claimant signed the Cinema and Co-Op transfers (again with no reference to trusts), but again I accept only after Mrs Krishan had told her she was in a fix and needed to get on trying to deal with the Council – one more use of the ‘rescue narrative’ to carry the Krishans’ plan safely through. Finally, they now had control of the Properties.

In the context of a judgment which is already so long, fortunately I can deal with the findings of fact in this section very briefly, since as the Claimant’s case has been narrowed down, no cause of action arises out of them. I will need to return to more detail in the last section of my findings of fact on 2008, but not as much as in the most crucial section I have just dealt with on 2005-2006.

As I mentioned above, on 4^th May 2006, the Claimant met Mr Whiston - for the only time - when she gave instructions for her will. Mr Whiston’s 2009 statement confirms that Mrs Krishan brought the Claimant to his office, but did not sit with her. As I mentioned above, the Claimant told Mr Whiston she owned her own home, mortgage-free, valued at £180,000. She confirmed she wanted the Krishans to be his executors and his three sons to have her property equally. However, the Claimant added that she wanted her jewellery to her daughter Nina (formally Satwinder): a family tradition as she explained in evidence. However, that had not been mentioned in the letter the Claimant had signed to Mr Whiston about the will on 3^rd April – again suggesting she did not draft it, but Mrs Krishan did. This is supported by another letter in formal language about the will which did not mention Nina the Claimant signed dated 26^th July 2006. I find if she had written those letters herself, she would have mentioned Nina’s jewellery each time, if only so that she mentioned all four of her children in the letters. The Claimant signed her will in these terms in August 2006 – as I say, again illustrating the trust and confidence she still had in the Krishans.

Around that time – late April-early May 2006 - Bobby attended the Shops and helped to tidy them up, assisted by Sukhjeet and to an extent, by Bill. They cleared the undergrowth and hired several skips in which to put the rubbish, which all took about two weeks. The Krishans were not present. It seems from Gracefield’s accounts (which are no longer challenged on general expenditure) at some point, there was also some scaffolding at the Shops and a skip hired. Other than that, there was no maintenance work carried out on any of the Properties at any point before 2008. They were never renovated by Gracefield.

This work Bobby undertook to the Shops may have prompted Dr Krishan on 11^th May 2006 to write to Coventry CC to confirm they were purchased by Gracefield on 31^st March and that they were unoccupied and unfurnished and requested that the business rates would be zero. A 2014 letter from Coventry CC to the Claimant – after the Purle Judgment, the sale of the Shops and Co-Op and the Set-Aside Proceedings had been issued – appears to have overlooked the payments in 2005 (paragraph 172.5 above) but confirmed that Council Tax and Business Rates on the Shops were received in December 2006 and then not again until mid-2007 – and a bill from July 2006 shows that over £800 of Council Tax on one of the Shops had been refunded. I return to that letter below.

On 8^th May 2006, the Claimant and the Krishans signed forms setting up Gracefield’s bank account with Natwest (as Mr Gasztowicz QC found in rejecting the Claimant’s argument that her signature on the forms was forged). However, as confirmed in Mr Rodgers’ 2009 statement, it was Dr Krishan who set up the account on 3^rd March 2006 and told him that the Claimant had ‘no business acumen of her own’ – I have rejected Dr Krishan’s denial of that.

On 14^th July, Mr Johnson wrote to Mr Rodgers with the plans for the Properties. I do not doubt he was working hard to progress Dr Krishan’s instructions and the development and he produced detailed drawings. However, as I said at paragraph 113 above, I found Mr Johnson’s evidence on when he met the Claimant before 2010 to be muddled and I do not find he met her until 2007. I find she had very little involvement from May 2006 until March 2008. When Gracefield was incorporated in November 2005, she was a director and a 50% shareholder. By January 2007, she was neither. How this happened from July 2006 is no longer part of a claim, but again proves the Krishans’ influence over the Claimant.

The first stage was that on 26^th July 2006, the Claimant (as she effectively accepted in evidence – and there is no evidence of forgery here) signed a stock transfer form, transferring one share from herself to Mrs Krishan, so that she was now only a 49% shareholder – losing control over Gracefield. However, because of her lack of business acumen, she would not have appreciated this at the time – indeed I find it was how Mrs Krishan cajoled her into doing it. The latter’s plan was clear: to give the Krishans control if there was a deadlock. Mrs Krishan in her 2009 statement said it had ‘occurred to her that there was no casting vote in Gracefield’, so ‘the Claimant agreed that one of her shares should be transferred to me’ and she emailed SR on 26^th July and asked her to draw up the stock transfer form and then emailed it back to her the same day. That is consistent with the contemporary emails and I accept it. What I cannot accept is Mrs Krishan’s total volte-face on this topic in her 2022 statement when she says it was the Claimant who was worried about a deadlock and wanted to transfer. This meant that the Claimant with 49% could no longer stop a sale.

The second stage was in November 2006 when the Claimant transferred all her remaining 49 shares to Mrs Krishan. Mr Rodgers explained that in the course of deciding whether to grant Gracefield a large overdraft, he undertook a credit check in accordance with bank policy on Gracefield’s ‘principals’ – i.e. those with at least 25% of the shares. That revealed the Claimant’s poor credit history – and indeed the fact she now had a CCJ on the wedding debt of £22,000 (which until then the Krishans had not been aware of at all). Mr Rodgers told Dr Krishan ‘one of the principals’ had poor credit history, but it would have been obvious that it was the Claimant. The practical effect of this – as I find Mr Rodgers explained to Dr Krishan at the time - was that whoever that was would have to reduce to a less than 25% shareholding. So, to secure the funding, it was only necessary for the Claimant to transfer 25 of her remaining 49 shares. Indeed, I note that Dr Krishan admitted he was told this ‘25% rule’ at the time in his 2009 statement, although he said in evidence to me he only found out later ‘principal’ meant 25%, which I reject. The Claimant did not know the ‘25% rule’ and I find Dr Krishan tricked her by asking her to transfer all of her shares, which she did, again demonstrating the extent of trust she had in them. Within two months, in January 2007, Dr Krishan also got the Claimant to agree to resign as a director. For the reasons at paragraph 220 and 229 above, as she never saw let alone signed the PSA, SB’s 15^th March letter only entitled her to the first £300,000 on sale of the Properties and left everything else to Gracefield under control of its directors. However, by the start of 2007, the Krishans had not only taken over the Properties, they had successfully ousted the Claimant from Gracefield itself.

Shortly before the Claimant’s resignation, this was recorded in the director’s loan account in December 2006 crediting the Claimant another £200,000 for the Properties. It would have come as little use once she was no longer a director. Her ouster had also made it easier for the Krishans to execute a debenture over Gracefield in favour of the bank on 21^st December 2006 (although for a few more days a director, she was not told) for a £20,000 overdraft from Natwest, secured by a debenture over Gracefield and a personal guarantee from Dr Krishan. This enabled the Krishans from January 2007 to begin taking drawings from Gracefield. As I said at paragraph 100.2 above, a plain reading of the Balber Takhar Account in 2008 would suggest the Krishans had spent £556,000 out of their own bank accounts. However, it is telling that in the directors’ loan account, their balance as at 30^th November 2006 was only £23,950. The vast majority of that was financial maintenance to the Claimant and arrears payments (though not including the £7,500 lump sum they would claim in the Balber Takhar Account). Gracefield’s work in progress logs up to 30^th November 2006 prepared by SB show no expenditure at all on the Properties save the ‘purchase price’ of £100,000 and in December 2006, the extra £200,000 credited. Moreover, after the overdraft rose to £100,000 in June 2007, the Krishans drew £51,000 from the director’s loan account in July 2007 and a further £41,000 from it in September 2007. So, by 30^th November, their director’s loan account balance was only £733. By then they had ceased to pay the Claimant monthly maintenance of £400 in September 2007 (when rates on the Shops re-started). From the work in progress logs, the only expenditure on the Properties in the year up to November 2007 was £9,109 – most of which professionals’ fees: no longer disputed as actually spent.

In fairness, that £9,109 paid to Mr Johnson and to other professionals such as Nolans (structural engineers), M Lathwood (Quantity Surveyor) and (with a caveat about the invoice), ‘JS’ the air quality and noise surveyor on the Cinema for example, was clearly money well-spent. Their work had enabled effective planning permission applications to be made on the Shops (for change of use to three residential properties), which had been granted on 19^th December 2006. The same date, Mr Johnson submitted planning permission applications for the Co-Op and the Cinema. The Co-Op was granted quickly on 21^st March 2007: for various works leading to a retail unit on the ground floor and residential accommodation on three floors. Nevertheless, I note despite that success, he still had to chase the Krishans for his fees in June 2007. Despite the Council’s desire to see a resolution to the Cinema issue, it took them another six months until December 2007 to grant (assisted by JS’ report) planning permission for demolition and the erection of three-storey residential accommodation.

At paragraph 105.1 above, I summarised why despite the difficulties in the clarity of Ms Dobsons’ expert reports, that in the light of her helpful oral evidence, I accepted her ‘pre-works valuations’ for April 2006, of £890,000 in total (£450,000 for the Co-Op, £240,000 for the Shops and £200,000 for the Cinema). In short, they were corroborated by the Savills valuations in May 2007, instructed by Natwest due to the debenture lending, which said: ‘Purchasers are paying a premium for derelict properties or properties in need of refurbishment, with or without planning consent’. However, I should elaborate on why I reached that conclusion on each of the Properties:

Whilst I accept Ms Dobson’s expert (and Savills’ contemporaneous) opinion that in the ‘hot market’ of 2006-07, actually getting planning permission added relatively little to the ‘pre-works’ value of development opportunity properties even if derelict or in poor repair, it is clear from Savills’ assumed ‘post works’ valuations of the land once developed as ‘unlocked’ by planning permission were much higher. Whilst this did not really apply to the Shops (which were to be re-converted to homes, not ‘developed’), it certainly did to the Cinema, where Savills ‘pre-works’ valuation of £450,000 rose to its ‘post-works valuation’ of £1,905,000; and on the Co-Op where Savills’ ‘pre-works’ valuation of £425,000 rose to its ‘post-works’ valuation of £1,572,000. In both cases, on the 2006 Donaldsons refurbishment estimates of £606,000 for the Cinema and £925,000 for the Co-Op, the potential profit on the Cinema alone could approach £1.3 million, with the Co-Op adding up to £650,000 potential profit. So, in June 2005, it was the Cinema which Donaldsons considered the best opportunity, not the Co-Op, for all its local history. I find those potential ‘post works values’ in 2007, while not calculated for 2006, buttress Ms Dobson’s April 2006 pre-works valuations of £890,000. On the Savills 2007 valuations and the Donaldsons’ 2006 costings, the profits one could expect from development and sale of the Properties (assuming the Shops were broadly cost-neutral) would approach £2 million.

However, by the time of the Savills’ valuations in May 2007, Mr Johnson in his January 2007 ‘Indicative Budget Cost Estimate’ had actually fully assessed the refurbishment costs of the development (which appears to have changed in specification and so doubled in cost from what Donaldsons estimated). That meant, on Savills’ post-works valuations of the Co-Op as £1,572,000 but Mr Johnson’s much higher costs of £1,831,507, developing the Co-Op would actually make a loss of c.£260,000. On Savills’ post-works valuation of the Cinema of £1,905,000 but Mr Johnson’s costs of £1,434,484, its profit would only be c.£470,500, not much different from their ‘pre-works’ valuation of £450,000 which would not require them to spend anything. Again assuming the Shops were broadly cost-neutral, the Krishans would make much better profits if they simply sold the Properties as they were at Savills’ pre-works valuations of c.£1,085,000.

Therefore, by mid-2007, the Krishans would have realised that a quick sale of the Properties as they then were would generate an extremely good financial return for them. They had spent effectively no money on the Properties themselves (and what little money they had spent on those and maintaining the Claimant was largely refunded by the overdraft by November 2007). They not had undertaken any maintenance – Bobby had done that done for free at the Shops in April 2006 and again in late 2007 on the Co-Op. Moreover, it now suited them that there was no signed PSA for the Claimant to receive 50% of the profit share, as they knew she had last been told by SB on 15^th March 2006 that she would receive (only) £300,000 in total on a sale. So, the Krishans might make c.£700,000 at little cost.

No wonder the Krishans felt they had many reasons to celebrate in September 2007 at the opening of their new health centre. From photographs, the Claimant attended and briefly met various people, including Mr Johnson and Mrs Davies, I accept her evidence at this stage the Claimant was ‘gushing’ about the Krishans’ help whom she still trusted implicitly. But I do not accept she mentioned a 50% profit share. I have found as a fact it was never mentioned to the Claimant. Mrs Davies may have got that information from her husband who had been told by the Krishans when the dispute arose in 2008. I accept and find as a fact on balance of probabilities the Claimant never even saw, let alone signed, the draft PSA.

As 2007 turned into 2008, whilst the Krishans’ plans of developing the Properties seemed to have ended, they looked forward to high returns from sale. As noted, on 7^th December 2007, planning permission was granted on the Cinema. Whilst Dr Krishan says Natwest were pressing for repayment of the overdraft, from the chronology, the bank increased it to £125,000 in January 2008 and to £150,000 in March 2008. By then, I will find the Krishans had decided to sell the Properties through auction with Loveitts, precipitating a dispute with the Claimant in March and eventually litigation by October 2008. This then concluded in July 2010, with the Co-Op and Shops sold in March 2011 for £675,000 and £175,000 respectively and the Cinema sold in August 2014 for £191,000.

I have already covered in my assessment of the evidence earlier many key points about 2008 - indeed finding in several respects the Krishans’ evidence about it was seriously unreliable. Moreover, at the start of this judgment, I also detailed a full procedural history. However, given the findings of fact from 2008 to 2014 relate to the conspiracy claim as it has now narrowed, I will need to focus in on a little detail (although not as much as for 2005/06) on five particular aspects of the period from 2008-2014: (i) how the dispute developed in 2008, (ii) its progress to litigation in October 2008; (iii) how and when the Krishans forged the PSA (which I can take in significant part from the binding findings in the Gasztowicz Judgment with a little supplementation given the new disclosure); (iv) how the Krishans deployed the PSA and other false evidence in the litigation and its mixed fate in the Purle Judgment in 2010 (again, which I can largely but not entirely take from the Gasztowicz Judgment); and (v) the sale of the Properties in 2011/14.

Gracefield’s bank account from 2006 to 2010 eventually incurred an overdraft of £181,661.98. As discussed at paragraph 239, whilst the Krishans had incurred expenditure themselves, by November 2007 they had paid themselves back using the overdraft so they were only owed £733 in their directors’ loan accounts with Gracefield and they had ceased to pay the Claimant maintenance. Whilst they did still use their own funds, so that by February 2008 they were owed £19,583 but in April 2008, £20,000 was paid to Dr Krishan, again using that overdraft. Given its size, it is not surprising that between 2006 and June 2010, Gracefield incurred bank interest and charges of £49,116.68 and that total was not challenged when Dr Krishan was cross-examined. However, he appears to have double-counted in that schedule the £19,582.35 in bank charges which forms part of the £132,084.83 in expenditure which Mr Johnson showed was incurred from 2006 to June 2010.

At the start of 2008, by then it had become apparent to the Krishans that they would get better returns selling the Properties as they were than by developing them, as most of the ‘development uplift’ as assessed by Savills in May 2007 would be swallowed up by the very high development costs, at least as Mr Johnson had assessed them in 2007. Therefore, once the Cinema obtained planning permission in December 2007, it was wise to sell the Properties. Indeed, Ms Dobson’s report at paras.16.1-2 details how the market turned from boom in 2007 to bust in 2008. As she said (and frankly I can clearly remember) the fact that by the end of 2007, the ‘Northern Rock Crisis’ had first publicly revealed in the UK the emerging ‘Credit Crunch’ which had started in the US. The Krishans were astute enough to know that they should sell the Properties and sell quickly. Indeed, at other points of her report Ms Dobson herself says that the best time to sell was 2007. Certainly, by the time the Krishans met Mr Matthews in June 2008 (as I detail below), he agreed with them the Properties should be sold then - if they were to be sold (although he knew the Claimant did not want to sell – showing her attachment to them). Therefore, with the New Year, the Krishans pressed forward with their new plans to sell the Properties. On 27^th February 2008, nine months after their previous valuation, Savills re-affirmed their valuations of the Cinema (which had already factored-in planning permission which was now actually granted) as £450,000 and slightly increased its valuation of the Co-Op to £430,000 (from £425,000). This was done in the context of a ‘Marketing Report’ for the sale of the Properties. I note that Savills tendered services on the basis of marketed sale, not auction.

However, in fact, Loveitts were instructed to auction the Co-Op, then the Cinema. Mrs Krishan says it was the Claimant’s suggestion. Dr Krishan does not mention that – he said that the Claimant agreed the Properties should be sold and then he had the Properties valued by Loveitts. Mrs Smith from Loveitts remembers him. The Claimant for her part is adamant that she knew nothing about the sales until 17^th March 2008, when she happened to be in Coventry going to the Register Office for a copy of Arun’s birth certificate, drove past the Co-Op and saw an ‘For Sale’ sign outside it for an auction on 14^th May. She vividly described in evidence her shock. After going to the Register Office, she drove past the other Properties and saw the same sign outside the Shops but not outside the Cinema. She was upset and called Bobby, who also remembered that same day clearly. I accept the Claimant’s account on the balance of probabilities for three reasons:

Indeed, on discussing what had happened with the Claimant, Mrs Har Hari recommended that she take advice from Mrs Har Hari’s own financial adviser, Mr Matthews, whom I found an impressive witness, corroborated by his contemporary notes. The Claimant contacted him after she tried and failed to get hold of Mrs Krishan. Mr Matthews recalled that having been introduced by Mrs Har Hari, he met the Claimant for the first time on 31^st March 2008 and took a note of that. It recorded the Claimant describing being gifted the properties about 9 years before (i.e. 1999/2000), that they were empty and in need of repair and had rates and costs to be paid as she was on benefits. She explained (still not realising at that stage what had in fact happened) that in 2005 her cousins offered to help for family reasons not profit by transferring Properties into a company to ‘cover overheads, renovate and let’. The note does not record mention of compulsory purchase, but Mr Matthews was clear in evidence that he recalled it was mentioned as the Claimant thought the Properties could be subject to CPO without fair compensation, which he knew was wrong. However, the note did not record it as it was just an overview, not investigation of fraud at that stage. I accept Mr Matthews’ evidence which also fits my findings. The Claimant went on to tell Mr Matthews (as I noted above) that she had found out the Properties were due to be auctioned in May 2008 which she had not been consulted about and sale was not what they had agreed. He told her to tell the Krishans to stop the sale.

It is not disputed that this is what the Claimant did – she and Bobby invited the Krishans, once they had returned from holiday, to her home on 5^th April 2008. The Claimant said (and I accept) that during the meal she had cooked them, she told them she had found out about the auction, had spoken with Mr Matthews and suggested they and she meet him to get advice. Mrs Krishan apologised for not communicating, but tried to persuade the Claimant that selling the Properties was a good idea. However, the Claimant made clear that she did not want the Properties sold and it was agreed that the Co-Op would be removed from the auctions. The next day, the Krishans instructed Loveitts on 6^th April to stop the auctions. I consider this point - April 2008 – the crucial turning-point in the dealings between the Claimant and the Krishans. She had previously trusted them implicitly – initially Mrs Krishan for emotional support and then her and Dr Krishan for support financially and practically with the Properties. Indeed, she had been very grateful for their help – as she told people like Mrs Davies in 2007 and even Mr Matthews at the first meeting in March 2008. However, given what had happened, now the Claimant was angry with the Krishans, not simply for failing to consult her, but in deliberately planning to sell the Properties when she had never agreed that. For their part, whilst the Krishans pulled the auction, they knew that they needed to sell and sell quickly.

Therefore, the Krishans decided to try and persuade the Claimant to agree to selling the Properties. Strictly speaking of course, Gracefield legally owned the Properties and they owned Gracefield, so they could have ploughed ahead regardless. However, in 2005/06, they had told the Claimant the Properties would really still belong to her and they must have known that ploughing ahead might open a can of worms about the transfers. They had cajoled and pressured the Claimant then and I find that is just what they decided to do again. Therefore, they invited the Claimant and Bobby to their home to discuss the Properties on 30^th April. In turn the Claimant says that she asked them to have the invoices for their spending on the Properties ready. However, beforehand, they decided to put their case to sell to the Claimant as strongly as they could and once again, to exaggerate to do it. So, they prepared the ‘Balber Takhar Account’.

As I noted at paragraph 100 above (and as both HHJ Purle QC and Mr Gasztowicz QC found before me), the Original Balber Takhar Account is a misleading document. It starts reasonably enough, with an accurate list of the initial £5000 cheque for the Claimant’s credit cards and monthly payments of £400 from December 2005 to August 2007 (with £200 in September 2007). There is no dispute the Krishans paid the Claimant £13,800, which is essentially the same as the list of payments to her on the Balber Takhar Account. That is not surprising: the Claimant would know full well how much they paid her. However, as I noted earlier, when it came to paying others, the Original Balber Takhar Account started radically diverging from reality. It suggested the Krishans had paid Coventry CC from 2005 to May 2008 a total of Council Tax and Rates of £28,500. Whilst the Balber Takhar Account says ‘outstanding rates on Ritz and Co-Op also cleared’, given there is no evidence of rates being charged on these, I do not accept that. On the Shops, the letter from Coventry CC from 2014 confirms the position for rates and Council Tax from 2006 (it missed a couple of payments in Autumn 2005) to 2010. No rates were levied on 554-556 Foleshill Road in the period and no Council Tax was charged at all from June 2009, when Bobby Takhar started paying. The total paid on both on the Shops from 2006 to 2010 was £2,190.18 on 554 Foleshill Road and £2,191.25 on each of 556 and 558 Foleshill Road, a grand total by my calculation of £6,572.68 (rather than the £5,672 the Claimant accepts, but I am prepared to accept the higher figure). Therefore, the Original Balber Takhar Account over-estimated the amount spent on Council Tax and Rates on the Properties by over four times. So, their future estimate of annual rates on all the Properties of £42,000 was a massive over-estimate too.

However, all that simply pales in comparison with what was said at the bottom of the first page and top of the second about other costs, which given its significance (and how it later changed) I set out in full (my italics):

After the findings in the Purle and Gasztowicz Judgments had ‘highlighted’ this issue, the Krishans before me desperately tried to explain this all away as a typo by Dr Krishan, as ‘Currently out of Premier and Private accounts’ [full stop] £556,000 plus two more current bills outstanding.” This is plainly nonsense. To start with, ‘Currently out of Premier and Private Accounts’ alone would make no sense – and they put it on a different line than the previous expenditure (which is not counted up) and the costs were never anywhere near £556,000. Alternatively, they suggested that they meant but did not clearly state that £556,000 was the amount they expected to realise from the sale (what they had told Mr Gasztowicz QC). But, as he found (and I agree) there is no reference to that (or any valuation of the Properties which would explain it) anywhere in this document, which is all about ‘costs’. It would make no sense to ‘sandwich’ an unexplained profit between a list of costs. I find on the balance of probabilities the Krishans concocted this document. I agree with Mr Gasztowicz QC that the document was ‘demonstrably untrue’ and with HHJ Purle QC this was done to ‘get the Claimant off the fence’ and to agree to the sale of the Properties.

Unsurprisingly, when the Original Balber Takhar Account (with some invoices I will come to in a moment) was handed to the Claimant and Bobby by the Krishans when they visited on 30^th April they were in shock at the levels of cost. The Krishan’ plan was to persuade the Claimant that the costs were so high that it would be better to sell or at least continue development. I find their underlying plan had not changed – as the financial crisis snowballed in Spring 2008, they must have known property prices would fall. Certainly, despite all the talk of costs (and future costs), I find the Krishans knew it would be much better to sell than develop, but they had seen on 5^th April that the Claimant did not want to sell. The critical thing was to ‘keep her on board’, rather than ‘opening up the can of worms’ of 2005/06 (if I may be permitted the mixed metaphors). The Balber Takhar Account was intended to inflate the costs to achieve just that. This is why they presented it to the Claimant and Bobby when they visited.

However, the Krishans’ plan backfired. On 30^th April, the Claimant was horrified at how much had been spent and told them not to spend any more on the Properties, as she could not afford to pay them back what they had spent already. (This suggests she considered herself still their ‘owner’). Immediately, the Claimant sent Mr Matthews the Balber Takhar account and a collection of invoices she and Bobby were given, including I find the ‘JS Invoice’ of 14^th June 2007 (reference JS/1/2007/RGA1). As I will explain, that differed from another copy of the same invoice with the same reference only totalling £6,010.13. This first invoice totalled £39,045.25, by someone adding a ‘2’ to the start of £3,505 for the Air Quality Assessment of 11^th June so it was now £23,505 and adding a ‘1’ to the start of the next three items, inflating them by £1,000 each. The Krishans accepted this higher invoice was forged but both denied it was them. Dr Krishan even suggested the Claimant had forged it to implicate them, but again, this is nonsense. The Claimant sent it to Mr Matthews who considered it ‘amateurish’ without a proper heading. However, the inherent improbability of forgery is reduced by the Krishans’ later forgery of the PSA copy: Arkhangelsky. I find on the balance of probabilities the Krishans forged the JS Invoice to pretend it was a revised invoice with substantially inflated costs, chiming with their approach in the Original Balber Takhar Account.

By May 2008, the Claimant was starting actively to suspect the Krishans of underhand tactics. Therefore, she decided to try and get evidence to prove her suspicions and for Mr Matthews. That is why when the Claimant called Mrs Krishan on 19^th May 2008 – twice – she recorded it both times. This was not accidental at first on her mobile phone as she drove as she suggested. I found she lied about why she did this as she did not want to be criticised for doing it deliberately, although she freely accepted that she recorded the second and third calls deliberately. Giving myself a Lucas direction, I accept this minor lie does not undermine her other evidence, though I bear it in mind. However, as I said I have found the actual transcripts very revealing and useful. I have set out the material passages above in my assessment of the evidence. But it is helpful to summarise them briefly in their proper place in the timeline of events. In the calls on 19^th May 2008, when Mrs Krishan was at work, she still did most of the talking, in response to the Claimant’s repeated concerns (stemming from the Balber Takhar Account) they were spending far too much on the Properties.

As quoted at paragraph 121 above, Mrs Krishan responded that the Properties in 2005/06 had been ‘worthless’, the Claimant had at that time risked bankruptcy, that the Krishans had and were helping her as family to save the Properties from Ian, that they derived no benefit themselves, but had spent £500,000 in developing them. Now placed in the context of what was actually happening when those calls were made, it is clear that Mrs Krishan was returning to – and reminding the Claimant of – ‘the rescue narrative’ she and Dr Krishan had fed her in 2005/06: e.g. the ‘worthlessness’ of the Properties, the risk of bankruptcy and how they were trying to help her not helping themselves. I have found these were wrong in 2005-06 (but not yet made findings on their fraudulence) and they were certainly wrong – and I find deliberately misleading - in 2008. It is clear that this was part of the Krishans’ plan to ‘keep the Claimant ‘on board’.

The key passage of the 19^th May calls at the time was Mrs Krishan saying:

However, this time, the Claimant was not taken in, even by the ‘emotional button-pressing’ by invoking family honour and the risk of Ian ‘getting his hands on’ the Properties. The Claimant insisted on a meeting with Mr Matthews on 9^th June and the Krishans reluctantly agreed. They knew that they would not be able to cajole the Claimant so easily with an independent professional there. They also knew that they should not continue to rely on the forged JS Invoice and decided to hand over the original totalling £6,010.13 in case he wanted to go through the records. However, otherwise they decided to throw everything at their attempts to keep the Claimant ‘on board’, or even agree to a sale. Persuasion and cajoling was not working as it worked in 2005/06. Therefore, they went back to their computer – always an integral part of their schemes and produced ‘Options for Gracefield’.

That document, as discussed above at paragraph 100, was found by both HHJ Purle QC and Mr Gasztowicz QC to be misleading. Once again, on the evidence I have heard and reaching my own view, on the balance of probabilities I agree and indeed find that ‘Options for Gracefield’ was intentionally misleading. As I noted earlier, like the ‘Balber Takhar Account’ it incorrectly stated the development had ‘incurred huge costs. Most of these had been met by us personally’. As I have explained, this was misleading as by November 2007, the Krishans had effectively if not entirely been repaid. Moreover, it added ‘Shortly there will also be a £60,000 Corporation Tax Bill’ which is wrong and I reject Dr Krishan’s excuse he meant Capital Gains Tax. As Mr Graham says, it is true that in other respects the document could be said to be factually accurate, save for one

In order to do that, the ‘Options for Gracefield’ document set out four supposed ‘options’ which in fact were clearly a ‘steer towards sale’:

In any event, Mr Matthews’ purpose for the meeting was not a general discussion. He already had concerning information and it was now exacerbated by another copy of what appeared to be the same ‘amateurish’ invoice but now with completely different figures on it. Moreover, he could immediately tell ‘Options for Gracefield’ included inaccuracies and possible lies – like under compulsory purchase the Claimant would have got ‘nothing whatsoever in return’, which the Krishans also reiterated to him at the meeting. He did not challenge that or the documents, as his purpose was to investigate the Krishans, not to challenge them. Indeed, when he gently probed about the initial transfer and tax implications they did not answer the questions. Moreover, when he queried the £500,000 costs in the Balber Takhar Account by suggesting they had ‘inadvertently placed additional costs in the spreadsheet’, they denied it, ‘the mood changed’ and he ‘decided to wind up the meeting without pressing any further’.

After that meeting, it was clear to Mr Matthews and he told the Claimant that it was likely the Krishans had defrauded her and that she should get some legal and accountancy advice. Whilst he had become involved to see if he could assist the Claimant to develop the Properties, which having seen them from the outside he considered still viable, given the suspected fraud, clearly there was no longer any role for him (except as perhaps the only entirely reliable witness I had) in what would clearly become a ‘legal wrangle’. It is striking that Mr Matthews’ initial intuition even at that stage that ‘something did not seem right’ – and his perceptive analysis of the problems with the various documents from the Krishans from April-June – Mr Matthews was proved right about the legal wrangle too. However, before getting to that, there were a few last issues.

On 25^th June 2008, a few weeks after the difficult meeting with Mr Matthews, doubtless still under pressure from councillors, Coventry CC finally ran out of patience with the Cinema. They wrote to the Claimant warning her under s.215 Town and Country Planning Act 1990 (as discussed above, a planning power, not compulsory purchase one) that she must either demolish or come up with ‘a substantial package of proposals to tidy up the building’ within 28 days, otherwise the Council could issue a formal notice requiring her to do so, breach of which could result in prosecution – notably, not ‘prison’ as the Krishans had said back in 2005/06) and/or undertake the work itself and charge her for it. This was also sent to Mr Johnson, who emailed Dr Krishan on 28^th June. He said given the local pressure, he felt the Council’s threat was real and could lead to ‘compulsory purchase of the site’. That is true, but not the same as saying CPOs were even ‘likely’. Nevertheless, in mid-2008, the situation was getting serious.

This is the context for the last call the Claimant covertly recorded on 30^th June. As I observed in my assessment of the evidence earlier, the tone of the call was different from those on 19^th May (before the Matthews meeting as well as the Council’s letter). Consistently with ‘Options for Gracefield’, Mrs Krishan said if the Claimant was not happy with what they had done, she could deal with it:

A few days later (in fairness, not a month as the Claimant says in her statement), on 4^th July 2008, the Claimant visited the Krishans uninvited (as she may well have done before, but in a very different context). In short, it was a difficult meeting where the Claimant and the Krishans argued – perhaps for the first time. As a result, the Claimant tried one last time with a handwritten letter on 7^th July. It was a concillatory letter which went back to the re-kindling of their relationship ‘at a low ebb in her life’, how she confided in Mrs Krishan and how they supported her financially and the Properties, but how she could not expect the Krishans to carry on supporting her, so if they let her know the cash incurred to date, she would reimburse them. Mrs Krishan herself did not respond.

Instead, on 14^th July, Dr Krishan tried one last time too, albeit in a very different way. He wrote to the Claimant to say that she had not given them a decision (in fact she had done in her letter). He added that Coventry CC’s concerns could lead to prosecutions and CPOs. This was either a little slip forgetting that in 2005 /06 they had told the Claimant there were CPOs, or simply part of their ongoing narrative that they would and now had ‘saved’ the Properties from CPOs in some way. Indeed, I accept after transfer the Krishans had briefly suggested to the Claimant they had instructed solicitors to do so. Dr Krishan repeated what they had said in ‘Options for Gracefield’: that they were no longer prepared to develop the Properties. He suggested she could, but she would have to buy them at their current market value (a slightly different tack than repaying their costs which by then they knew Mr Matthews suspected, but obviously equally deliberately unrealistic). Dr Krishan ended by saying that if the Claimant did not buy the Properties on that basis within 28 days, the Krishans would have no option but to sell them. In fact, that had been their plan since they realised development was uneconomic in late 2007. But they thought it was worth one last application of pressure to see if the Claimant would agree so they could achieve their goal.

This letter from Dr Krishan on 14^th July was the last straw for the Claimant and she finally instructed solicitors – as I said Challinors. I have already explained their first pre-action letter of 24^th July 2008 on her behalf to the Krishans does not set out the ‘stick’ part of their ‘rescue narrative’ in 2005/06. I have taken that into account finding the Claimant was mistaken in saying the Krishans told her CPOs had actually been made in 2005 rather than 2006 given SB’s notes. However, at this stage Challinors were still investigating the CPO position with Coventry CC and this point was addressed one they had heard back in their letter of 24^th October. However, the ‘carrot’ side of ‘the rescue narrative’ is set out in detail in the 24^th July letter and described as a ‘campaign’. On my findings, especially when taken with the ‘stick’ side, that is a reasonably fair description. Tellingly (as the Claimant later pleaded in her professional negligence counterclaim against them), in this very first letter, Challinors on her behalf alleged fraud. They set out a case principally based on Gracefield holding the Properties on trust for the Claimant but also effectively of undue influence, but it is not explicitly mentioned. What is mentioned – and I return to at the very end of this judgment – is the Claimant’s proposal to ‘provide recompense for reasonable expenditure on the Properties’. Lastly, the Krishans were invited to undertake not to deal with the Properties, to avoid the need for an application for an injunction.

The Krishans promptly instructed a firm of solicitors. Although they did nothing wrong whatsoever, in the circumstances I simply will refer to them as ‘H’ and the solicitor with conduct as ‘J’. It appears that SB was also involved as she met the Krishans on 4^th August and on 7^th August emailed J and her assistant a PDF of various documents the Krishans had given her. This included not only Challinors’ letter before claim, but also a statement prepared by Mrs Krishan setting out her account of the transfers, including an agreement to pay the Claimant £300,000 and 50% of the profits on sale, but without any reference to either her or them signing a PSA. It also included an unsigned copy of the ‘Whiston letter’ of 24^th March 2006 which I found Mrs Krishan had drafted (and the 4^th July 2005 letter), ‘Options for Gracefield’ and an edited version of the ‘Balber Takhar Account’.

Having first met the Krishans on 26^th August 2008, the next day J contacted SB’s colleague SR. From J’s file note, SR had SB’s letters of 15^th March 2006 (not 2008 as recorded) to the Claimant and to Mr Whiston. Despite the headings of those letters, SR also confirmed they had not acted for the Claimant (Mr Whiston later told Challinors he had not acted for her either and declined their request for a copy of his file). SR also referred to a copy of a profit share agreement dated 1^st April 2006 which had been ‘handed to the client’. Given they did not act for the Claimant, that would have been a reference to Dr Krishan, as he accepted. Importantly, SR confirmed at as of 27^th August 2008, there was no signed copy of the PSA on their file. SR emailed those documents, including the unsigned PSA noting that SR/SB had no record of it being signed and returned. Again, from disclosure from H’s file, it appears that J emailed the Krishans that day to ask them what happened to the PSA. Mrs Krishan responded briefly:

On 28^th August, J responded in detail to Challinors. That set out much of the chronology in dealings with professionals that I have detailed, including the meetings with SB. It also enclosed a copy of the 24^th March 2006 signed ‘Whiston letter’. J’s letter also said that in 2005, it was the Claimant who said Coventry CC were threatening CPOs (the first mention in the legal correspondence, in fact). The basis of the Krishans’ agreement was set out in accordance with the Krishans’ instructions, although interestingly, it suggests the agreement was the Claimant would receive the first £60,000 of any sale proceeds from the Cinema, £80,000 from the Co-Op and £20,000 each in respect of the three Shops. Those figures, totalling £200,000, are taken from SB’s letter to the Claimant of 15^th March 2006 which J had been sent by SR, although it did not specify a further split and did not actually mention the payment of the £100,000 ‘purchase price’. J offered the Krishans’ undertaking not to deal with the Properties. As one might expect of an initial response, I find on balance of probabilities J sent the Krishans a copy of this letter and its enclosures, including the signed copy of the Whiston letter.

Following the warning in June 2008, on 19^th September 2008, Coventry CC issued a formal notice under s.215 of the Town and Country Planning Act 1990 (the planning, not compulsory purchase power) requiring Gracefield either to demolish or undertake maintenance and cleaning to the Cinema by 27^th October. Coventry CC’s letter of 22^nd September to Gracefield urged compliance with it. Indeed, in October, Coventry CC also warned s.215 improvement notices on the Shops on 17^th October 2008 and issued a formal notice on the Co-Op on 20^th October. This was the first formal action on the Properties, for which Gracefield had been responsible for over 2½ years yet undertaken no improvements (save Bobby’s efforts in tidying them up). But these were planning notices, not CPOs.

At the same time, Coventry CC were also corresponding with Challinors. On 30^th October 2008 they confirmed the planning notices on the Properties. However, before that on 3^rd October 2008 Coventry CC confirmed the Co-Op was taken out of business rates in 1998 and there were no outstanding arrears on it. They would later on 28^th November confirm the same for the Cinema and the rates for the Shops on an ‘empty’ basis for 2005/06, 2006/07, 2007/08 and 2008/09. Back on 10^th October 2008, Coventry CC also confirmed there were no CPOs on any of the Properties and on 23^rd October, Mr Todd confirmed that there had never been any. Challinors pressed and eventually on 11^th November 2008, Mr Duncan at Coventry CC confirmed that over the last 16 years, he could say for certain the Properties had never even been ‘threatened’ with CPOs.

Pre-action correspondence continued back and forth and both parties contacted the Land Registry to make entries. Meanwhile, the Krishans may have been considering the now full-blown financial crisis and been desperate to sell. On 10^th October, J wrote to Challinors warning that they would sell the Properties after 14 days unless proceedings were issued. On 13^th October, Challinors invited them to extend the period, or they would seek an injunction. On 21^st October, J replied saying there was no basis for an injunction and stated after 24^th October the Krishans would deal with the Properties as they saw fit. The same day, J emailed the Krishans chasing them for documentation to disclose, including the PSA. On 22^nd October, J spoke to Dr Krishan where he appeared to be resistant to disclosure, but J advised him if helpful it would pressure the Claimant. Notably, even then, Dr Krishan did not tell J they had any signed copy of the PSA.

On Friday 24^th October 2008, Challinors issued a Claim Form under claim number 8BM30468, what I detailed above in my procedural history as ‘the Original Proceedings. The Claim Form sought a declaration that Gracefield held the Properties on trust for the Claimant absolutely; and pleaded the transfer had been procured by ‘misrepresentation and/or undue influence’ from the Krishans. However, neither fraud, deceit, nor conspiracy were pleaded. Moreover, as I also explained, misrepresentation was not pleaded in the February 2009 Particulars of Claim, as HHJ Purle QC pointed out to the Claimant’s then-Counsel at trial.

The same day, Challinors sent a long letter (and fax) to H responding to its long letter of 28^th August. Again, the broad thrust was the ‘carrot’ side of the Krishans’ ‘campaign’ for her to transfer the Properties in 2005/06, setting out the Claimant’s understanding and reassurance from the Krishans that the Properties would remain hers, at least beneficially. This was the stated basis for her trust claim and would be the basis for her later-pleaded contract claim. As I have said, it would have been better characterised (and in due course was), as a false representation of the position after transfer to induce the Claimant to do so. Challinors’ letter again stressed and detailed the ‘implicit trust’ the Claimant had in the Krishans. But as I noted, the letter also mentioned the CPOs and said the Claimant:

Since the Challinors letter was also a fax, I find on the balance of probabilities it would have arrived with H that day – Friday 24^th October 2008. In the light of what follows, I find that J or a colleague at H told the Krishans that day that the Claimant had issued a claim (if not necessarily sent them a copy of the letter and Claim Form). After all, J had been emphasising to Dr Krishan the importance of providing the PSA and other documents and now the Claimant had issued a claim – but not yet served it. It was now becoming urgent for those documents to be sent to Challinors – provided they supported the Krishans’ case.

That explains the significance of the next day, Saturday 25^th October 2008. This crucial date has been revealed by the very proper disclosure of emails by Gowlings solicitors, acting for the Krishans in 2022 (but no longer doing so) as part of the disclosure exercise for the current proceedings. In his statement, the Krishans’ then-solicitor explained that as part of an electronic review of the Krishans’ emails, they had discovered emails between the Krishans, J and her firm H and SB in October and November 2008, which they confirmed had neither been disclosed to the Claimant earlier in the litigation, nor provided to Gowlings by the Krishans. They are clearly extremely important and should have been disclosed earlier. However, before reviewing the findings in the Gasztowicz Judgment and making my own about the forgery (which is not disputed even if the Krishans still deny responsibility for it), I will consider in detail the contemporaneous documents relevant to that issue in 2008-09.

The late-disclosed emails show that at 12.43 on Saturday 25^th October 2008, the lunch-time after Challinors confirmed to the Krishans’ then-solicitors that proceedings had been issued, Mrs Krishan emailed SB, saying:

On Thursday 30^th October 2008, the deadline for replying to Challinors, at 11.44 am, J emailed (through her secretary) the Krishans a copy of a draft letter explaining that she had not been able to get hold of Mrs Krishan, but felt the letter should go (implicitly, that day). Given that the Krishans later replied to that email on 7^th November, I infer they did not confirm H’s draft letter at the time, so she sent it. This confirmed that they would stand by their undertaking not to deal with the Properties without giving 7 days’ notice and indicated that they had ‘no intention of litigating by correspondence’. Indeed, since proceedings had now been issued, the substantive statements of the parties’ respective cases in correspondence naturally ended too. The letter enclosed a Form 288b relating to the Claimant’s resignation as director of Gracefield, a Stock Transfer Form for the one share in it to Mrs Krishan, a summary of work in progress of works done and Gracefield’s Accounts for year ending 30^th November 2007 showing the Claimant as a creditor. I will return to the other enclosure in a moment.

However, in those 2007 accounts (I note sent by SB’s colleague to Dr Krishan on 7^th August 2008) is the first reference to a £225,000 ‘Purchase Reserve – Management Fee’, said to be a 15% charge on the ‘uplift in value’ of the Properties: the Shops from £100,000 to £225,000, the Cinema from £100,000 to £600,000 and the Co-Op from £100,000 to £975,000. These values for the Cinema and Co-Op were significantly in excess of Savills’ valuations for the current value of the land and there appears to be no basis for them. Nor was there any basis for such a ‘charge’ – Dr Krishan admits the Claimant never agreed it. In evidence to HHJ Purle QC in 2010, he accepted he would not be entitled to both. Yet before me, having initially suggested it was removed from Gracefield’s balance sheets after the Purle Judgment, he was taken to the 2011 and later accounts up to 2018 showing it was still there. Indeed, in 2014 after the Cinema was sold (but after the Claimant had issued the Set Aside Proceedings), Dr Krishan asked SB to calculate the returns from the sale with and without this ‘fee’, suggesting he was not treating it as an alternative at all. I find on all the evidence that Dr Krishan in early August asked SB to include this spurious ‘management fee’ as an ‘insurance policy’ to try to offset from any litigation the Claimant brought, having just received Challinors’ first letter before claim in July 2008.

Going back to H’s letter of 30^th October 2008 when that management fee first appeared, the last enclosure was the blank copy of the incomplete PSA and stated:

However, it appears that having sent the Krishans a draft of her 30^th October letter, J understandably did not send them another copy of it (which was identical). As I noted, the Krishans only responded to J’s 30^th October email a week later at 7.27am on Friday 7^th November, when Mrs Krishan emailed J (through her secretary) and said this (among comments about cheques and unrelated matters):

The Krishans also emailed SB the same day - 7^th November – again only disclosed by the Krishans’ later (but not current) solicitor in 2022 and so they are not mentioned in the chronology at [83] of the Gasztowicz Judgment. At 07.29am, two minutes after Mrs Krishan sent her email to J, Dr Krishan emailed SB:

This flurry of emails on 7^th November about the PSA may have been prompted by Challinors’ letter to H on 4^th November, which as well as queries about the other documentation disclosed by H on 30^th October asked:

In the meantime, in November-December 2008, there was correspondence between Coventry CC and Gracefield or Mr Johnson about the improvement notices to the Properties, but little had been done. On 12^th January 2009, the Council finally ran out of patience with the Shops too and issued a s.215 improvement notice on those as well. On 7^th February, the Krishans instructed an agent to develop the Properties. Indeed, in February 2009 – long after the deadline for the improvement notices on the Cinema and Co-Op had expired, further emails suggest that Dr Krishan was liaising with professionals about demolishing the Cinema, which he authorised on 13^th February 2009, but it never occurred.

That is because days afterwards, on 18^th February 2009, Challinors served the Claim Form and Particulars of Claim I detailed above in my procedural history I need not repeat. In short, it was pleaded the Claimant and Krishans had made an agreement that she would transfer the Properties to Gracefield which would develop and rent them and pay her rent; that this agreement was procured by undue influence and/or unconscionable bargain (not misrepresentation) and that Gracefield held the Properties on trust for the Claimant and/or TTC. Doubtless, the proceedings were served on H on behalf of Gracefield and the Krishans just within the 4-month time-limit from issue of the Claim on 24^th October 2008.

In March 2009, Dr Krishan got quotes for remedial works to the Co-Op and Shops to comply with the planning improvement notices. The total was about £35,000 (just for compliance, not to develop them). Plans also appeared to be proceeding to demolish the Cinema after an asbestos survey. On 23^rd March, Challinors wrote to H indicating they were aware of the plans to demolish the Properties and asking for confirmation that it would not proceed otherwise they would apply for an injunction. On 24^th March, H told Challinors that demolition was required under the notice and it would proceed. Moreover, on Wednesday 25^th March 2009, J emailed the Krishans a draft letter inviting Challinors to apply for injunction.

It appears that as at 25^th March 2009, the Krishans’ Defence had been drafted but not yet served, as Dr Krishan authorised that letter be sent by email, but added:

The Defendant’s Defence is undated, but it must have been served between 26^th March and 9^th April when the Claimant’s Reply to it was served. I detailed the Defence above at paragraph 17 and need not repeat it, save to say all allegations were denied, but also that it had obviously been slightly but importantly amended in the light of Dr Krishan’s comment about the signed PSA, as paragraph 29 said:

It is possible that the service of this Defence prompted Challinors on 31^st March 2009 to apply for an injunction to restrain any demolition of the Cinema and in his own first involvement, HHJ Purle QC granted it on a without notice basis until the return date on 16^th April 2009. Whilst I do not have a copy of that, my understanding is that the injunction was continued to trial. I understand from other documents that the Claimant took responsibility for undertaking the works to the Co-Op and Shops under the planning improvement notices. Frankly, from rather confusing emails at this time from the Council, it is unclear what the position was on the Cinema, but it was not demolished. In March 2009, the Claimant had also got the valuations from Chamberlains of the Co-Op for £215,000, Cinema for £165,000 if demolished and Shops for £120,000 I noted above as plainly affected by ‘litigation blight’. Moreover, Challinors also instructed the Claimant’s then-Counsel to draft a Reply and Defence to Counterclaim, which as I noted was dated 9^th April 2009. Again, I have summarised the effect of this at paragraph 18 above and it included a specific plea of resulting trust on the basis of gratuitous transfer. The response to paragraph 29 of the Defence and the ‘signed PSA’ was simply to note the admission of an incomplete agreement, not to say the Claimant did not sign the PSA (although in fairness the Defence had not said that in terms).

It also appears that another order was made at a hearing on 12^th May 2009 before HHJ Brown QC, which I do not have either. H’s letter to Challinors dated 7^th July 2009 accuses them of not complying with it, in that no works had been undertaken on the Co-Op or the Shops and Council Tax had not been paid on it, threatening an Unless Order. From Coventry CC’s 2014 letter to the Claimant referred to earlier, it appears this was the point when Bobby Takhar started paying Council Tax and Rates on the Shops. H proceeded to apply for an Unless Order for those works to be done as Gracefield and the Krishans were under threat of prosecution. On 24^th July, Coventry CC indicated they would extend time for compliance but hold fire on action until after a visit in October 2009. That was how the Properties were left. It was around this time the Claimant faced investigation into benefit fraud (given the timing, I suspect prompted by the Krishans or Linda Hunt), which went nowhere. Whilst her benefit position until 2006 was complicated by the Properties, the DWP accepted there was no ‘fraud’ and that is clear to me.

However, H’s letter of 7^th July also proposed disclosure in the proceedings took place by 4pm on 13^th July 2009. It appears to have occurred around this time, as there is a flurry of correspondence in late July between H and Challinors about partial disclosure on each side (for example the lack of emails from the Claimant, although it is accepted she did not have a computer until 2008). But Challinors did not complain about lack of disclosure of the PSA and other key documents. Therefore, I infer that around this time, the Defendants disclosed the altered JS Invoice which the Krishans gave the Claimant in April 2008 (not the original version Mr Matthews also saw in June 2008). It is unclear whether the first page of the ‘Balber Takhar Account’ was disclosed but the second page they did disclose had been altered, as I mentioned above in assessing the evidence. It was altered so the original reference to ‘Total so far: £565,600’ had become ‘Total estimated approx so far £565,600. Will check’. It is true that this is a small change, but it is important: showing the Krishans trying to soften their huge exaggeration. It also demonstrates their story to me about an original typing error is nonsense, since they amended the document without altering what they said was a typo on the first page. When talking of the document with the original first page and altered second page, I am calling this the ‘Altered Balber Takhar Account’.

Crucially, whilst I do not have the disclosure statement, I note on the chronology and accept that on 13^th July 2009, H disclosed to the Claimant and sent to Challinors the copy PSA with the Claimant’s signature on it, later admitted to be forged. Indeed, it is not disputed that the first date on which the Claimant could have seen the PSA with her forged signature was on 13^th July 2009. As I said at paragraph 19, but repeat now in context, three PSAs were disclosed then:

Dr Krishan annexed this to his statement of 15^th December and said at para. 42:

SB also gave evidence on this issue. Her December 2009 statement said at para.27

Sure enough, as later found in the Gasztowicz Judgment, to which I will now turn, the ‘signed copy PSA’ was pivotal to the Purle Judgment, which HHJ Purle QC gave orally on 28^th July 2010, observing at [21]-[22]:

I pause there in the timeline at the Purle Judgment in July 2010 to turn to the Gasztowicz Judgment in 2020. I have detailed the procedural history in the intervening decade (including the Supreme Court decision in 2019) which I need not repeat. However, it is worth emphasising one observation I made there that in paragraphs 9 and 10 of her 2020 statement in the Set Aside Proceedings, Mrs Krishan specifically denied the suggestion the Krishans’ solicitor in 2009-2010 recorded from SB (whom by that stage they were blaming for the forgery) that Mrs Krishan had passed SB the copy ‘signed’ by the Claimant. That was not mentioned in Mrs Krishan’s 2010 evidence, nor in SB’s own evidence as I noted. Nor did Mrs Krishan mention in 2010 or 2020 what she said in the later-disclosed emails from 2008 that she had ‘found’ a backsheet of the PSA signed by the Claimant and sending it to SB and J. This was only prompted by the emails of 25-27^th October 2008 I have discussed disclosed by her new solicitors in 2022 which had not been previously disclosed in the whole of this litigation.

Therefore, the following findings in the Gasztowicz Judgment need to be read with the fact he had not seen those 25-27^th October 2008 emails firmly in mind. Mr Gasztowicz QC’s key findings were as follows as I set out in detail:

Those findings are binding on the Krishans, whether as an issue estoppel arising in the conspiracy claim largely based on that forgery, as Mr Halkerston submitted and I accept, or as a ‘juridical fact’ as Mr Graham accepted. Either way, the Krishans are, as Mr Perring engagingly put it (in a very different register of language from his erudite submissions on the law), ‘stuck with it’. However, as I observed when considering issue estoppel, whilst Mr Halkerston did not argue the Krishans were prevented from doing so, the Krishans firstly gave evidence that they did not forge the Claimant’s signature on the disclosed PSA (stressing the finding in the Gasztowicz Judgment that they did so was only ‘on the balance of probabilities’). Secondly, they also said that both they and the Claimant had originally signed copies of the PSA back in 2006: themselves based on their own evidence and the Claimant based on Linda Hunt’s account given through Mrs Davies and Dr Handa. Mr Graham knew he could not - and so did not - argue the first point, but fearlessly submitted on the second strand of his clients’ evidence:

I have absolutely no hesitation in rejecting the suggestion that the Krishans and the Claimant signed the PSA in 2006 and they signed it then and again in October-November 2008. On the issue of the Krishans’ signing, at no stage in the contemporary documents, or in any of their earlier evidence over the last almost 15 years, have they ever suggested that happened. It would also be inconsistent with SB’s 2008 emails suggesting she had no signed copy of the PSA. The assertion of ‘another misfiling’ is just that – an assertion: all the easier to make because it cannot be gainsaid, not least because SB is no longer a witness as the Krishans dishonestly accused her of forgery. Whilst in cross-examination at the Set Aside Trial in 2020 they certainly did suggest that the Claimant originally signed the PSA, Mr Gasztowicz QC rejected that at [122]-[125] of his judgment I quoted above, not least because, yet again, they had never said it before, not even in their own statements for the trial before him. Therefore, the Krishans are seeking to run a factual case he rejected, which again to my mind seems to give rise to an issue estoppel in the conspiracy claim. However, even if I am wrong about that, I unhesitatingly reject this attempt to exploit the sadly-deceased Linda Hunt’s wild accusations about the Claimant, whether directed at Mrs Davies or Dr Handa (neither of whose evidence was particularly helpful to me in any event). Whatever the difficulties with other parts of the Claimant’s evidence, I have and do entirely accept her consistent and clear evidence that she never saw at the time or signed any version of the PSA. Indeed, this new account by the Krishans was so late in the litigation and so threadbare that it says less about the Claimant’s credibility than the Krishans’ own credibility, especially in proferring it through others (by multiple hearsay from a dead ‘witness’). Moreover, their preparedness simply to brush aside the findings in the Gasztowicz Judgment weakens it further.

Having dealt with the case Mr Graham argued, I return to what he did not – whether the Krishans forged the Claimant’s signature on the PSA disclosed in July 2009. I have treated the Krishans as having done so throughout this judgment so far, because their own lawyers rightly accept it is at least a juridical fact and I find it is an issue estoppel on the conspiracy claim. However, as I said, the Krishans in their evidence did not appear to accept even that juridical fact – pointing to the Gasztowicz Judgment being ‘on the balance of probabilities’. Therefore, whilst I make my findings on that same – and correct - correct civil standard of proof, I will then - even though it is unnecessary to do so, go on to test it by applying the criminal standard. After all, as I explain later, the forgery of the Claimant’s signature and its deployment in the Original Proceedings was a crime, albeit one that would never realistically be prosecuted as it was also a contempt of court. However, I start by saying I am satisfied on the balance of probabilities that the Krishans together combined to forge the Claimant’s signature on the PSA in October 2008 then deploy it in evidence from July 2009.

As Mr Gasztowicz QC found, the Krishans forged the Claimant’s signature on the copy PSA, using her signature on the letter from her to Mr Whiston on 24^th March 2006 confirming her instructions that the Properties be transferred to Gracefield for £100,000. I found above that Mrs Krishan drafted that letter for the Claimant to sign. Whilst it may be too much of a stretch to say the Krishans kept a copy of the signed letter to use it forgery over two years later, I certainly find they were familiar with this letter and as Mr Gasztowicz QC found, a signed copy had been sent by J to Challinors on 28^th August 2008. I found, as is common for such a detailed ‘first substantive reply’, that a copy of that letter – and its enclosures including a copy of the Whiston letter with the Claimant’s signature on it - was sent to the Krishans as well. I also note that is at almost exactly the same time – 27^th August 2008 – as J was corresponding with SB and SR and asking about the PSA – including asking the Krishans whether they had a signed copy. As I noted above but repeat here to assist, that day Mrs Krishan said:

I turn, with some relief, to the last topic in my findings of fact: the sale of the Properties in 2011-2014, which I can take very shortly indeed. The only issue which is factually disputed is the Properties’ value at the time (returning me to Ms Dobson’s evidence). However, I will pick up the narrative again on 28^th July 2010, at the very point at which HHJ Purle QC dismissed the Claimant’s claims. Entirely unsurprisingly, the first to speak was the Defendant’s Counsel, who asked for and was given a declaration in terms of the PSA plus the Krishans’ 50% share rather than strictly of the counterclaim as such – that Gracefield was the legal and beneficial owner and that it and the Claimant was contractually bound that upon the sale of the Properties, she would receive £200,000 then for the net proceeds to be split 50% to her and 50% to the Krishans.

This can now be seen in context of my findings. As I explained above, the Krishans’ attempts to cajole and pressure the Claimant into agreeing to sell the Properties in 2008 after she had objected to the auction simply ended in her suing them on 24^th October 2008. In the light of my finding that the Krishans forged the Claimant’s signature on the copy PSA the very next day – 25^th October 2008, it is clear their plan had changed. Whereas in 2005/06 they had cajoled the Claimant into transferring the Properties to their company and shortly afterwards into their full control, I find that from 25^th October 2008, they decided to use forgery in the coming proceedings to maintain and secure their control of the Properties, so that they could sell them as soon as they could and finally release the returns.

This conclusion is supported by the Krishans’ remarkable determination in 2009 – relying on the improvement notices which Coventry CC had issued but showed little interest in enforcing – to demolish the Cinema. As H said to Challinors at the time, the Krishans considered this would enhance the land value. However, with an injunction from March 2009, they handed over responsibility for compliance on the Co-Op and Shops to the Claimant. At the same time, now that proceedings had been served, the Krishans decided to rely on the signed PSA in their Defence, as Dr Krishan insisted in his email of 25^th March 2009 to J that it be amended to refer to the signed PSA. The next day, 26^th March, Dr Krishan spoke to J, who then spoke to SR and SB, who sent J for the first time the ‘signed’ copies of the PSA. This included both the copy with their forgery of the Claimant’s signature and the copy the Krishans signed for the first time at the meeting with SB on 10^th November 2008, by which time SB had the forged copy.

Consistently with the Gasztowicz Judgment and the emails they both sent at the time, I am sure the decision to forge the Claimant’s signature was a joint decision which the Krishans executed together, as they had executed their plans together back in 2005/06: Mrs Krishan had cajoled and persuaded the Claimant and produced letters for her to sign; and Dr Krishan (once he had the Claimant’s authority to deal with the Council from 4^th July 2005), had told (along with Mrs Krishan) the Claimant there were CPOs, or at least deliberately exaggerated their likelihood and consequences. The Krishans have been a team throughout and they supported each other’s lies in the Original Proceedings as they supported each other’s (what I find on this to be) lies in their evidence before me. Once the forged PSA was disclosed in July 2009, they not only contended the Claimant had signed it, they dragged in SB to give evidence to that effect, yet that did not reflect what she told their solicitors, or the October 2008 emails the Krishans concealed.

However, having succeeded in the Purle Judgment, the Krishans immediately obtained their declaration, albeit not in the terms originally sought, but in the terms of the PSA upheld in the Purle Judgment: with the Claimant on the sale of the Properties entitled to £100,000 ‘repayment of her loan’ and a further £200,000 ‘by way of deferred consideration’, with the net balance after expenses etc being shared equally between her and the Krishans. Moreover, having sought and inevitably been granted their costs (although reduced to 80% by HHJ Purle QC because of their misleading Balber Takhar Account and Options for Gracefield documents), the Claimant was ordered to pay £100,000 of the Defendant’s costs on account and total costs were sent for detailed assessment.

From Mr Gasztowicz QC’s costs judgment in 2020, when he ordered the Krishans to repay their costs the Claimant had paid in 2010, it appears that the total costs the Krishans had originally sought in July 2010 was £560,653.80. However, the Krishans contended that only £363,975.60 had been ‘paid’ by the Claimant, which he ordered the Krishans to ‘repay’. Mr Halkerston accepted in his Skeleton Argument the Claimant had actually been paid this, so would have to give credit for £363,975.60 from any damages I awarded. This is because she was ‘repaid’ something she had never truly ‘paid’ to the Krishans anyway. It is not disputed and is clear from contemporary documents this was not so much ‘paid’ by her, as deducted by the Krishans from the Claimant’s supposed ‘share’ under the PSA when the Co-Op and Shops were sold a few months later in March 2011.

Indeed, the Krishans acted quickly after the Purle Judgment on 28^th July 2010. Fewer than 6 weeks later by 6^th September 2010, Dr Krishan had reinstructed Ms Smith from Loveitts to proceed to auction. It appears from their letter that it was planned to market the Co-Op for £800,000. However, on 22^nd October 2010, a report showed there was asbestos in the Co-Op and it appears from other emails there was a dispute over the Shops, with neighbours disputing the rear garden and parking at the front. One wonders whether Bill Takhar - who was extremely angry with the Krishans - had pulled local strings to make life more difficult for them. I find it was then that Bill made anonymous NHS complaints about Dr Krishan. Certainly, despite the Purle Judgment, it appears that the Claimant sought to frustrate the proposed sales with notices on the Land Registry and even complained to Gracefield’s new bank RBS. Bill even applied for an injunction on 8^th November 2010 to Telford County Court to restrain Gracefield and the Krishans from dealing with or securing monies on the Properties (or the Claimant’s home) with a pending auction on 17^th November. However, on 12^th November, HHJ Purle QC in Birmingham granted the Krishans’ application and not only directed Bill’s application be transferred and dismissed it as totally without merit, but also injuncted both Bill and the Claimant from seeking to register cautions and restrictions at the Land Registry to frustrate the pending sale. This use of Court proceedings enabled auctions to proceed on the 17^th November 2010. Therefore, it is important to note that the Krishans did not just deploy forgery in evidence in their plan to procure the Purle Judgment to confirm Gracefield’s ownership of the Properties, they then used the Purle Judgment itself to get an injunction in order to implement their plan to sell the Properties. As shown by the counterclaim declaration then enforced by injunction, for the Krishans, the litigation was not an end in itself, but entwined with their plans.

At the November 2010 auctions, the Shops were successfully auctioned for £175,000, with a completion date set initially for January 2011. However, the reserve on the Co-Op of £700,000 was not met. Nevertheless, negotiations continued and on 13^th December 2010 a sale contract on the Co-Op for £675,000 was initially agreed with January completion. However, due to conveyancing complications, the completion date for the Shops was 21^st March 2011 and for the Co-Op was 29^th March 2011, by which time planning permission granted. Accordingly, those sales of the Co-Op and Shops realised a total of £850,000 from which, subject to sale costs, under HHJ Purle QC’s declaration, the Claimant would be entitled to £575,000 (£300,000 plus 50% of the net balance). However, from the director’s loan account, it appears that £563,650.80 was paid to Wragges from the Claimant’s entitlement (in fairness, the same sum as the Claimant later argued – I find correctly - to Mr Gasztowicz QC had been ‘paid’ by her in costs, although he cautiously adopted the Krishans’ figure of £363,975.60). Therefore, the Krishans had not only succeeded in their plan to keep and sell the Co-Op (the property most precious to the Claimant and her family) and Shops, they also managed to retain all the proceeds and also pay their lawyers in full not just 80% from her share. This effectively avoided the ‘hit’ from the 20% costs reduction – a further entwining of the litigation with their sales of the Properties.

Pausing there, I note the sale price for the Co-Op of £675,000 (by which time planning permission had lapsed) is very similar to the March 2011 ‘pre-works’ valuation Ms Dobson came to of £700,000. As I explained at paragraph 105.4 above, unlike her 2011 ‘post-works’ and rental values, for her ‘pre-works’ valuations, she more simply analysed whether a different approach to the sales could have fetched a higher price. The question is whether with reasonable effort, an extra £25,000 making a total of £700,000 could have been achieved. Certainly, the Chamberlains valuation in March 2009 during the litigation of £215,000 was far too low. As Ms Dobson explained at para 18.17 of her first report, the Co-Op’s actual sale price of £675,000 was less than it could have been because it was limited to auction with cash buyers. After the reserve price was not met, it seems that negotiations simply continued with one of the bidders, rather than even going to open auction again, still less marketing the Property openly. I recognise that there had recently been an asbestos report and the auction happened just after the Claimant and Bill had tried to stop it but had been injuncted. But I accept Ms Dobson’s opinion that with more effort and less haste, a sale price of £700,000 (only an extra £25,000) could have been achieved very easily. Therefore, I accept Ms Dobson’s ‘pre-works’ valuation for the Co-Op in March 2011 of £700,000.

The Shops have a much wider differential between their total sale price of £175,000 in March 2011 and Ms Dobson’s valuation of them then of £300,000. However, as she explained in her first report at paras.18.24-18.26 and in evidence as noted at paragraph 241.3 above, the problem was that the Shops had always been seen and were being marketed as a ‘job lot’ and would have fetched more if sold separately and not limited to cash buyers. By reference to comparable commercial properties, Ms Dobson identified an average value of £80,000, but that totals not her £300,000 (which appears to have taken into account planning permission) but rather £240,000. Whilst this is the same as in April 2006, other terraced properties on the Foleshill Road also had similar values in 2011 as 2006.

However, the Cinema was not sold in 2010/11, even though the original planning permission granted on 7^th December 2007 did not lapse until 7^th December 2010. The application to extend planning permission was only made days before it lapsed and the permission was not extended. As a result, there had to be a fresh application, which due to local opposition took another three years and had to change from the originally-granted 18 flats to only 10 flats. As Ms Dobson explained, this reduction in flats also reduced the Cinema’s value. So, I accept her view the sale price in August 2014 of £191,000 was not as high as it could have been. Yet, there is no valuation for the Cinema with renewed planning permission in late 2010. However, Ms Dobson showed the 2009 Chamberlains valuation of £165,000 is based on an incorrect estimate of the square-footage, as Ms Dobson showed, so that does not help either. Ultimately, I cannot value the Cinema in late 2010 and I have to proceed on the basis of the value in August 2014. However, the difference between Ms Dobson’s valuation of £250,000 then and the actual sale price of £191,000 is explicable because it was auctioned to cash buyers only, not marketed more widely. I accept Ms Dobson’s opinion at para 18.22 of her first report that since the Cinema would inevitably have been demolished (as Coventry CC had said back in 2003), a marketed sale would have been open to a wider range of potential buyers with different purchase options, such as an offer conditional on planning permission, or once granted, by mortgage with a proposed lease. Limiting it to cash buyers limited the price substantially. I accept Ms Dobson’s opinion that had the Cinema been sold unrestricted in 2014, it would have fetched the price of £250,000 at the least (only £50,000 more than its value in 2006 and only £90,000 more than its value over a decade earlier). However, yet again the Claimant in 2014 received nothing from the Cinema’s sale because any ‘share’ she may have had under the declaration in the Purle Judgment was offset again by Dr Krishan’s spurious ‘management fee’ discussed at paragraph 284 above, as by 2014 the Set Aside Proceedings had begun. In any event, together with £240,000 on the Shops and £700,000 on the Co-Op, the true value of £250,000 for the Cinema in August 2014 means the total value at the times of sale was £1,190,000, not the actual total sale price of £1,041,000.

After the draft judgment was circulated, Dr Krishan provided another schedule which after deduction of a slightly higher overdraft figure purports to suggest that from June 2010 to 2019, £44,802.39 of further expenditure was incurred. £16,490.06 of this appears to relate to the sale of the Co-Op and Shops in March 2011; and £16,148.15 clearly relates to the renewed planning application and sale of the Cinema in 2014. So, whilst that total of £32,638.21 clearly relates to the sale of the Properties, the balance of £12,164.18 does not. Instead, it seems to relate to Gracefield’s accountancy and tax expenses (suggested by several payments to SB’s firm) and given that most of that £12,164.18 relates to the period after the Cinema sale, it may possibly even be linked to the litigation.

Finally in my findings of fact, I address Ms Dobsons’ valuations of the Properties in November 2022. As I said at paragraph 105 above, those were based on her actual inspection (albeit not inside) of the actual Properties. The Co-Op ground floor (only) had been refurbished and was in use as a shop with an annual rent of £144,000 and had been sold in 2016 for £1,320,000. The Shops had been tidied up and two of them were being used as shops with flats above and no.558 had its subsidence repaired and was a dwelling. Ms Dobson also noted recent comparable sale prices – for example the next-door property to the Shops sold in July 2021 for £202,000. These together with her own inspection in November 2022 support Ms Dobson’s ‘post-works’ valuations in 2022 of £1,150,000 for the Co-Op and £540,000 for the Shops. I explained at paragraph 105.3 above Ms Dobson’s 2022 ‘pre-works’ valuations worked backwards from that post-works value by deducting average costs and profit, using industry-standard software in the first report, calibrated against the extra information about the Properties in the second. I accept this is a reliable approach and I accept Ms Dobson’s 2022 ‘pre-works’ valuations of the Co-Op at £950,000 and Shops at £380,000. The Cinema is more simple, since in November 2022, it was still ‘pre-works’ albeit in informal use as a church. Ms Dobson saw it and I accept her valuation of £500,000.

Undue Influence focuses on the transfer of the Properties by the Claimant to Gracefield in March/April 2006 and spans the period from July 2005 until then. In this ‘chapter’, I first determine the linked and mainly factual questions of the actual terms of transfer and whether fraudulent misrepresentations by the Krishans induced it. Second, I consider whether they can in principle amount to undue influence. Third, I examine whether there must be (and was) a pre-existing relationship of trust and confidence. Fourth, I resolve the Claimant’s ‘actual undue influence’ argument; and fifthly her ‘presumed undue influence’ argument.

The second key question at the start of this judgment was whether fraudulent misrepresentations can amount to undue influence; and if so, whether there needs to be a pre-existing relationship of trust and confidence. In other retrials after a judgment is set aside, the same fraud may have also been central to the transaction previously litigated, leading to a new or re-opened claim for undue influence, although that does not arise here. Yet, there is still a parallel between setting aside a transaction for undue influence (by fraud) and setting aside a judgment for fraud. If ‘fraud unravels all’, surely fraud inducing a transaction also amounts to ‘undue influence’ ? Certainly, there are dicta which link misrepresentation with undue influence, including RBS v Etridge (No.2) [2002] 2 AC 773 (HL). However, as Lord Nicholls said there, over centuries Equity developed the doctrine of undue influence in parallel with the common law tort of duress: they did not merge. Likewise, the tort of deceit and the equitable remedy of rescission for fraudulent misrepresentation have not merged, though have stayed in harmony (for example by the latter applying by analogy the statutory time-limit for the former: HMRC v IGE [2021] Ch 423 (CA)). Those careful ‘checks and balances’ within and between Equity and common law would be disturbed by simplistically ‘treating fraud as actual undue influence’ (itself contested after Etridge). Unlike the forgery of the PSA in 2008, the alleged ‘fraudulent misrepresentations’ in 2005-2006 are as yet unproven. So, in this judgment, I take a rigorous approach to (i) the standard of proof on fraudulent misrepresentations; (ii) whether they are proved (to the deceit requirements); if so, (iii) how they fit into ‘undue influence’ and what ‘actual undue influence’ means after Etridge; (iv) whether proving undue influence with fraudulent misrepresentations requires a prior relationship of ‘trust and confidence’; before (v) my overall conclusions on ‘undue influence’.

In 2010, undue influence was the main claim before HHJ Purle QC, who insisted misrepresentation was not run, as it was not pleaded in the Particulars. On his findings of fact in the Purle Judgment, including that the Claimant signed the PSA, HHJ Purle QC rejected undue influence and also unconscionable bargain. The latter is no longer pursued before me either as Mr Halkerston accepted that it added nothing to undue influence and in this case I agree. However, I will come back to the role of ‘unconscionability’ within ‘undue influence’ itself.

However, my own findings of fact are very different from those in the Purle Judgment. So, I must revisit undue influence completely, especially as now (unlike then), ‘false representations’ are pleaded, but not pursued as torts of misrepresentation or deceit, instead as ‘actual undue influence’ (with presumed undue influence in the alternative). However, before turning to the key principles, I address the issues of the terms of the agreement to transfer in March/April 2006 and whether it was induced by any fraudulent misrepresentations. That enquiry can encompass later evidence shedding light on parties’ intentions at the time: Enal v Singh [2023] 2 P&CR 5 (PC) at [37]. That is different from treating events after a transaction as proof of undue influence, which is impermissible as Lewison J (as he was) said in Thompson v Foy [2010] 1 P&CR 16 at [101]:

The Claimant’s primary pleaded case (Consolidated Particulars of Claim (‘CAPOC’) para 15) had been there was an oral contract between her and the Krishans that: (i) they would set a new company to which the Properties would be transferred; (ii) it would hold them on trust for the Claimant; (iii) it would re-transfer them to her on her demand; and (iv) the transfer was to address the threat of CPOs and make it administratively convenient for the Krishans to manage and refurbish the Properties on her behalf. Indeed, I have found on the balance of probabilities at paragraph 200 above the Krishans did tell the Claimant that whilst the Properties would be transferred to the company to undertake the developments and she had a 50% shareholding, this was only a formality and beneficially the Properties would still belong to her. Moreover, I went on to find at paragraphs 219-221 above, when the Claimant queried SB’s letters of 15^th March 2006 which said something different on 24^th March, Mrs Krishan said those letters were just ‘hoops to go through to allow them to deal with the Properties’ and the £100,000 total price was a ‘paper figure’: presenting them to the Claimant as a tax/accounting exercise. This reaffirmed her belief that the transfers were only a formality. So, I accept she saw them as what might in lay terms be called ‘putting the Properties into Gracefield’s name’ but that they would ‘really still belonged to her’ - hardly an unusual arrangement within families. However, she now accepts this ‘formality transfer’ was not the true contractual nature of the transaction. She also accepts she cannot at the same time argue the Krishans objectively agreed merely ‘to be putting the Properties in Gracefield’s name’, but also that they fraudulently misrepresented that was the true nature of the transaction, which I will consider below as part of the fourth fraudulent misrepresentation claim. The Claimant’s belief that the transfers were just a ‘formality’ is also key to the resulting trust claim. But neither are contractual.

Therefore, as Mr Graham fairly said, there was always an inconsistency between the Claimant’s pleaded contractual ‘agreement’ between her and the Krishans and her undue influence case that she was pressurised and/or tricked into the transfers by them. Yet there has also been an inconsistency in the Krishans’ case as well. The original pleaded case on behalf of them and Gracefield in the Original Proceedings (Original Defence para.1) was that the true nature of the transaction was in the terms of the PSA, save that ‘deferred consideration’ was £100,000 (not £200,000 as in the PSA) then 50% to the Krishans and Claimant (less maintenance from her 50%, also not in the PSA). However, HHJ Purle QC did not make a declaration that those were the contractual terms, but instead that the terms were those in the PSA (quoted at para.228) but with the Krishans having the other 50% profit share. In other words, he found the ‘terms of the transaction’ were the Claimant would transfer the Properties in return for (i) £100,000 on her Gracefield director’s loan account, (split between £30,000 for the Shops, £30,000 for the Cinema and £40,000 for the Co-Op), to be paid on the completion and sale of each site; (ii) £200,000 ‘deferred consideration’ payable on the completion and sale of each site (split £60,000 for the Shops at £20,000 each, £60,000 for the Cinema and £80,000 for the Co-Op); (iii) 50% of the profits of sale to the Claimant; with (iv) the other 50% of profit share was for the Krishans. Since that last element is not actually part of the PSA, I will call these the ‘PSA Plus’ terms. Those are what the Krishans still maintain were the true terms of the transaction.

However, I have found (at paragraph 229) that the Claimant never agreed the PSA or a 50% profit share as it was never discussed with her. Therefore, what was found in the Purle Judgment to have been the nature of the transaction has been undermined first by the Gasztowicz Judgment finding the Purle Judgment was procured by fraud and secondly now by my own findings that the Claimant did not agree the PSA (or indeed, the ‘PSA Plus’ terms). I found (as summarised at paragraph 229 by reference to earlier findings) that in Mr Davies’ note of 16^th November 2005, the ‘50/50 share’ was consistent with the Claimant and Krishans’ agreement to have a 50% shareholding in Gracefield and to split 50/50 the profits of renting the Properties (after payment of Gracefield’s / the Krishans’ costs). This is borne out by the absence of reference to a ‘50/50 profit share on sale of the Properties’ in SR’s note of what Dr Krishan said on 18^th November 2005, or the 2006 notes of SB on 20^th January or even 20^th February. This is also consistent with SB’s letter to the Claimant of 15^th March (quoted above at paragraph 220). That letter only mentions the £100,000 ‘purchase price’ (described there and in the PSA as the value of the CPOs) credited to the Claimant’s loan account and the £200,000 which SB’s letter describes as a ‘profit share’. However, as £200,000 was the balance of the agreed (supposed) market value of £300,000, it is better described as ‘deferred consideration’, as it was in the draft PSA. Nor was any ‘profit share’ (or indeed even any ‘deferred consideration’) mentioned in the transfers. The first appearance of the ‘50% profit share’ was in the draft PSA itself that as noted at paragraph 229 above included a 50% share for the Claimant but not the Krishans. As a result, I also found that they neither signed it themselves, nor gave a copy to the Claimant to sign. So, I found the ‘PSA Plus’ terms were never actually agreed with the Claimant even if they reflected SB’s own (mis)understanding of the deal.

Indeed, if one just focusses on the contemporary documentation seen by all parties, one might think the true terms were ‘the transfer terms’ set out in the transfers themselves (i.e. sale of the Properties for £100,000); or the terms of SB’s 15^th March letter to the Claimant, also copied to Mrs Krishan (and doubtless seen by Dr Krishan). What I will call these ‘15^th March letter’ terms were that the £100,000 ‘purchase price’ would be paid to the Claimant’s director’s loan account in Gracefield and the £200,000 (albeit as ‘deferred consideration’ rather than ‘profit share’), with no explicit 50% profit share. Since on this basis Gracefield owned the Properties, that would mean that if the Properties were sold for at least £300,000 in total, the Claimant would get that and Gracefield the ‘profit’, to be distributed as its then directors and shareholders saw fit. I emphasise ‘then’, not as the Claimant was in fact ousted by the end of 2006 - as later events are not relevant: Thompson. The point is that directorships and shareholdings can always change and so on this basis, any ‘profit share’ for anyone was non-contractual.

So, if it were open to me, I would find either the ‘15^th March letter terms’ were the true objective terms of the transaction. Certainly, for presumed undue influence, whether the terms of the transaction ‘call for explanation’ so as to raise the presumption is assessed objectively as Mr Perring submitted, relying on p.11-010 of Professor Enonchong’s excellent work ‘Duress, Undue Influence and Unconscionable Dealing’ (2023) 4^th Edition (to which I return repeatedly below). That is not the same as assessing objectively what the terms of the ‘transaction’ actually were, but it would be analytically inconsistent if that was not done. Indeed, that would also be consistent with the contractual principle that the terms of a contract are determined objectively, not subjectively (Chitty on Contracts (2023) 35^th Ed paras.4-002-3). Undue influence is also a part of contract law.

However, I do not believe this conclusion is fairly open to me as the ‘15^th March transfer terms’ were not ‘put’ in cross-examination either to the Krishans or to the Claimant: see Rea v Rea [2024] EWCA Civ 169 at [52]. Since the Claimant now only pursues the ‘formality transfer’ terms as a fraudulent misrepresentation not the true terms of the agreement, that leaves me with the ‘PSA Plus’ terms which I have found she was not aware of, let alone agreed. Nevertheless, in fairness to the Krishans and Mr Graham who addressed me on the ‘PSA Plus’ terms, I focus on these for both ‘presumed undue influence’ and ‘actual undue influence’, although ‘cross-check’ my conclusions with the ‘the 15^th March letter terms’ and ‘transfer terms’. If the result is the same, the issue is academic. Moreover, as Mr Halkerston said, ‘actual undue influence’ turns on alleged ‘fraudulent misrepresentations’, so I consider those before wading into the more complex legal question as to whether they can amount to ‘actual undue influence’.

The five alleged fraudulent misrepresentations are effectively pleaded as such, as paragraph 10 ‘CAPOC’ states they ‘untrue and known to be so by the Krishans’ at paragraph 11. I will summarise them and the pleaded facts at paragraph 12:

I made findings of fact above at paragraphs 190-200 above as to what the Krishans told the Claimant in Summer-Autumn 2005 and at paragraphs 208-230 above as to what they told her in January-April 2006. However, at that stage I did not decide whether they were fraudulent misrepresentations because as I said at paragraph 84 above, a conclusion of fraud is usually a matter of inference from the primary facts, as Lord Millett said in Three Rivers at [186] (quoted above and in Kekhman at [42]). As I said there, Lord Millett continued by saying:

As Males LJ added in Arkhangelsky at [117] and [120] (the latter quoted above at paragraph 83), while the starting-point is that fraud or dishonesty are inherently improbable, once other such findings have been made against a party, the inherent improbability of his having acted fraudulently or dishonestly in the respect alleged may be much diminished. Yet, as discussed at paragraph 84, the ‘Lucas direction’ is that if someone has committed fraud in another respect, that does not prove they have committed fraud in a different respect alleged. As stressed in Kekhman, Privalov and Otkritie (also quoted at paragraph 83 above), even if there are other findings of dishonesty, there is still a need for cogent evidence of fraud to be satisfied on the balance of probabilities it occurred. Here, the Krishans were found in the Gasztowicz Judgment to have been dishonest in relation to the PSA forgery, reducing the ‘inherent improbability’ of further dishonest conduct. Moreover, I have found the Krishans’ evidence seriously unreliable on other aspects like the Balber Takhar Account, the forged JS Invoice and Options for Gracefield. Nevertheless, it does not mean the finding of dishonesty is evidence of fraudulent misrepresentations, still less does it prove them as stressed in Lucas.

Moreover, there is no alternative case of negligent or innocent misrepresentation, which is not pleaded. So, it would be just as unfair on the Krishans, having faced an allegation of fraud, to be found to have misrepresented negligently (still more innocently), as it would be to find dishonesty when not alleged, as Lord Millett said in Three Rivers. This is particularly true given the now-dropped deceit claim was bound to fail on limitation. It was only ever pleaded in relation to the transfers in March/April 2006, so under s.2 Limitation Act 1980 (‘LA’), limitation expired in April 2012. However, the deceit claim was only issued in March 2015. The Claimant has dropped her ‘relation back’ argument, rightly as I said at paragraph 33 above. The Claimant’s only other argument was s.32 LA, but that only stops limitation running on an action based on fraud of the defendant until the fraud could have been discovered with reasonable diligence. Unlike on the conspiracy claim below, the relevant ‘fraud’ in the deceit claim was the alleged fraudulent misrepresentations up to 2006. As Mr Perring said, the Claimant alleged those were fraudulent back in 2008 but chose not to plead it. Limitation expired in 2014.

For those reasons, I consider I should hold the Claimant to her factual pleading of fraudulent misrepresentation, assessed at the legal standard of what she pleaded it as: deceit. Indeed, there is a close analogy between the elements of common law deceit and for equitable rescission for fraudulent misrepresentation: IGE, which is in turn analogous to equitable rescission for undue influence. I gratefully take the elements of deceit from Mr Graham and Mr Perring’s original skeleton: (1) the Krishans made a false representation by words or conduct to the Claimant; (2) they did so ‘fraudulently’ (which I explain below); (3) they intended the Claimant to act on it; and that (4) she was induced to do so and so suffered loss: Bradford Third Equitable Benefit BS v Borders [1941] 2 All ER 205 (HL) at 211. If a representee acts as the fraudulent representor intended them to act, they cannot deny ‘materiality’: Versloot v HDI [2017] AC 1 (SC) [31] (indeed they need not even believe in its truth: Zurich v Hayward [2017] AC 142 (SC) at [18]), although lack of materiality or belief is relevant to inducement in fact: Barings v Coopers & Lybrand [2002] BCLC 410 at [117]. On the third element of ‘fraud’, Lord Herschell explained in Derry v Peek (1889) 14 AC 337 (HL) 374:

However, since deceit cannot be pursued, that begs the legal question whether fraudulent misrepresentation with those same elements as the tort of deceit can itself amount to ‘actual undue influence’, which I consider below. However, despite the fact that this was not pleaded, this is not suggested to give rise to any limitation issue. In Anullment Funding v Cowey [2010] EWCA Civ 711 at [54] it is made clear even if undue influence is originally pleaded as ‘presumed’, it is open to the Court to find proven ‘actual undue influence’ on the evidence.

For context, I first very briefly summarise my findings of fact relating to Summer 2005 at paragraphs 167-170 and 190-191. At Bobby’s meeting with Coventry CC on 30^th June 2005, he was told the Council and Donaldsons did not consider his proposed ‘community uses’ for the Properties realistic but would look into using the Co-Op as a health centre and did consider the Cinema a viable development opportunity. Coventry CC said they would ‘start the process leading to CPOs being made available’ but they were an ‘absolute last resort’. Bobby told the Claimant what happened and he needed her written authorisation. The Claimant told Mrs Krishan this on 2^nd July 2005. Mrs Krishans persuaded her to authorise Dr Krishan rather than Bobby and sign a letter Mrs Krishan wrote on 4^th July.

The first pleaded false representation made by the Krishans to the Claimant is that they told her that the Properties either were subject to CPOs or were ‘likely’ to be. On that issue, I have found the Krishans said different things at different times:

Pausing there, conscious of the cogent evidence required for a finding of fraud, even with a previous finding of fraud in a different respect, I find on the balance of probabilities that either way, the Krishans made fraudulent misrepresentations. Whilst Dr Krishan’s knowledge is not to be imputed to Mrs Krishan or vice versa, on my all my findings of fact, they always ‘worked as a team’ and I find shared all relevant information with each other, but did not do so with the Claimant:

In any event, irrespective of my findings for 2005, in respect of January-April 2006, I went on at paragraphs 211-230 above to find on the balance of probabilities the Krishans deliberately told the Claimant there were in fact CPOs on the Properties knowing there were not, in three different (and cumulative) ways, which in addition I find all amounted to fraudulent misrepresentations:

I turn to the closely-linked second pleaded false representation, namely that the Krishans told the Claimant that due to the threat or making of the CPOs, that the Properties were ‘worthless’ or alternatively worth only £100,000. At paragraph 198 above, I noted Mr Graham accepted that if the Krishans had told the Claimant that the Properties were worth £100,000 because of the CPO, that would be a misrepresentation, even if innocent. Whilst he submitted against that finding, I found on the balance of probabilities that between July and November 2005, the Krishans told the Claimant due to the threat of CPOs, the Properties were only worth £100,000 and told her given her debts were ‘worthless’ to her because;

Therefore, having made that finding, as Mr Graham concedes, that is a misrepresentation. Moreover, I find it was plainly fraudulent, as Dr Krishan accepted he knew that a CPO entitled the owner to full market value (which he considered to be £300,000) less debts (which he thought at the time were only c.£15,000). He did not suggest he did not know about that rule at the time, as SB said. Indeed, he said SB got it wrong about the ‘£100,000 CPO Value’. So, when telling the Claimant that, he must have known it was wrong (or at least been reckless about it - Derry). Again, I find Mrs Krishan is in the same position, as they shared all relevant information and ‘worked as a team’. In short, they both lied to the Claimant and that was one operative cause of her transferring the Properties. So, I also uphold the second fraudulent misrepresentation.

The position is even clearer in January-April 2006, for similar reasons as for the linked first fraudulent representation. By February 2006, I found the Krishans were not just telling the Claimant that due to the threat of CPOs the Properties were only worth £100,000 so ‘worthless to her’, they were also telling her directly and through SB that £100,000 ‘was the value of the CPO’. I find on balance of probabilities the Krishans expanded their earlier lie to the Claimant into a bigger lie that the Council had not just made CPOs but fixed the price at £100,000 and indeed as Mrs Krishan said to the Claimant on 24^th March, transfer was needed to save them. That is an entirely separate reason for finding the second fraudulent misrepresentation proved (like for the first fraudulent misrepresentation, whether the terms of the transaction were ‘PSA Plus’ or ’15 March letter’ is irrelevant).

The issue with the third pleaded false representation – that if the CPOs or their threat could be removed, the value of the Properties would increase to £300,000 – is again linked. There is a shorter and a longer answer:

I turn to the fourth pleaded false representation: that if the Claimant agreed to transfer the Properties to a company, they would take appropriate steps to ensure CPOs or threat of them were removed; and refurbish and manage them on her behalf for her benefit. This differs than the first three fraudulent misstatements of current fact (including on the third, as I have found a fraudulent misrepresentation of the fact of the Krishans’ opinion). By contrast, the fourth does relate to the terms of the transaction itself – or at least their future intention. This differs from Chandra on forecast of future events. Prof. Cartwright says in Misrepresentation at paras.3-44-45, an honest statement of current intention about future conduct is a prediction or a promise, but not a misrepresentation as you cannot know in fact what you will do. But a lie about your current intention about your own future conduct is a fraudulent misrepresentation as to your own current state of mind. As Bowen LJ famously said in Edgington v Fitzmaurice (1885) 29 Ch. D. 459:

However, I reject briefly the pleaded fifth false representation – that the Krishans said the transaction would be ‘an act of charity’. I accept the Krishans had said from July to November 2005 - as I said at paragraph 204 above, it went hand in hand with their suggestion their help was ‘payback’ for the support the Claimant had given Mrs Krishan. However, by November 2005, the Claimant knew the Krishans would also benefit from the transfers, so they were not ‘acts of charity’.

However, for the avoidance of doubt, my rejection of the fifth fraudulent misrepresentation does not affect the following important conclusions:

Turning back to the first four fraudulent misrepresentations I have found proved, I would make three general points. The first is that, as I have said, they reflect the combination of Dr and Mrs Krishan working together as a team; and the combination of both ‘carrot’ and ‘stick’. Dr Krishan was more responsible for the ‘stick’ and used his position as the Claimant’s representative with the Council to misrepresent the Council’s position e.g. CPOs had been made or were ‘likely’, the Properties being ‘worthless’, or only worth £100,000 rather than £300,000 on the open market. He was also responsible for the ‘carrot’ of the first strand of the fourth fraudulent misrepresentation: that he could save the Properties from that. Broadly, Mrs Krishan was more responsible for the ‘carrot’: exploiting the Claimant’s implicit trust in her to reassure her they would manage the Properties for her benefit and the transfer was just a formality. But she could occasionally wield the ‘stick’ as well as the ‘carrot’ e.g. by her own references to the CPOs.

The second point is that this overall ‘rescue narrative’ not only lasted for nine months between July 2005 and April 2006, it also subtly developed over that time. I have found that the Krishans’ ‘stick’ of both the first and second false representations took different forms in Autumn 2005 and Spring 2006, the latter using the involvement of SB. However, the Krishans also developed their ‘carrot’. In Autumn 2005, Mrs Krishan took the Claimant away to Spain and reassured her doubts about the transfers with the fourth fraudulent misrepresentation that they would manage the Properties for her benefit. Yet, when SB in March 2006 talked in terms of ‘sale’ of the Properties, Mrs Krishan used the Claimant’s implicit trust in her to soothe her concerns about SB’s March letters as ‘paper figures’ and ‘hoops’; and to steer her through the transfers over the next month.

The third point is the Krishans’ ‘rescue narrative’ took as long as it did because it had to wear down the Claimant’s reluctance to accept help and to transfer the Properties from July to November 2005, after which, as she said in her statement:

As noted at the start of this judgment and ‘chapter’, this case raises the question – whether fraudulent misrepresentation can constitute ‘undue influence’ and if so, whether that requires a pre-existing relationship of trust and confidence. In this section of this ‘chapter’, I examine the first limb of that question, in the next, the second limb. On the first, one might think a conclusion of fraudulent misrepresentations inducing the Claimant to transfer the Properties would inexorably lead to a conclusion of undue influence. However, as discussed at paragraph 321 above, fraudulent misrepresentations cannot be simply ‘treated’ as ‘actual undue influence’, especially as the old distinction between that and ‘presumed undue influence’ was itself questioned in Etridge. Moreover, the latter requiring a relationship of trust and confidence but the former not doing so, has been questioned in the context of misrepresentations by Professor Enonchong in Chapter 8 of ‘Undue Influence’. There are some relevant judicial dicta, including of Jonathan Parker LJ in UCB at [84]-[91] (quoted later) who concluded ‘undue influence may include fraudulent misrepresentation’. However, in UCB, a relationship of trust and confidence was accepted, whereas here it is contested.

So, as Lord Nicholls put it in RBS v Etridge (No.2) [2002] 2 AC 773 (HL) at [6], ‘it is necessary to go back to first principles’ in living transactions (the principles are different with wills: see Rea at [20]-[32]):

This last point made by Lord Nicholls in Etridge is of real importance in this case, since notwithstanding his warning that the usage can be a little confusing, Counsel before me divided their submissions on undue influence into ‘actual undue influence’ and ‘presumed undue influence’. In this case, I actually found that helpful, although it does require careful consideration. In Etridge, Lord Clyde expressed himself more strongly than Lord Nicholls on this point at [92]:

Even since Etridge, the subdivision of cases of undue influence evidentially as opposed to doctrinally into ‘actual’ and ‘presumed’ has persisted and even been endorsed. In Drew v Daniel [2005] EWCA Civ 507, Ward LJ said at [31]:

Therefore, I accept Mr Perring’s submission that after Etridge, undue influence is a ‘unitary doctrine’ where ‘actual undue influence’ and ‘presumed undue influence’ are not two different things, just two different methods of proving the same thing. (As Lord Nicholls said in Etridge at [16], the rebuttable evidential presumption of undue influence is the equitable counterpart of common law res ipsa loquitur - ‘the thing speaks for itself’). That ‘thing’ – i.e. undue influence - can either be affirmatively proved without resort to any evidential presumption (i.e. a finding not a claim of ‘actual undue influence’), or established without such affirmative proof by presumption from the nature of the transaction which is not rebutted (i.e. a finding not a claim of ‘presumed undue influence’).

Ultimately, as Mr Perring also submitted, relying on Lord Nicholls’ observation in Etridge at [6] and Lord Lindey’s in Allcard at 182-183, the objective of the law is not to save an individual from their folly, but to ensure that the influence of one person over another is not abused. But what counts as ‘abusing’ such influence ? Professor Enonchong in ‘Duress’ sets out this analysis at para. 8-001:

However, if ‘actual’ and ‘presumed’ undue influence are two different ways of proving the same thing, if ‘unconscionability’ is a requirement, it is one for both. Moreover, any suggested test of ‘unconscionability’ must be seen in the light of Lord Scarman’s view in Natwest Bank v Morgan [1985] AC 686 (HL) at pg.709:

Whilst as Lord Clyde observed in Etridge at [92], undue influence is easier to recognise than define in the abstract, it is unnecessary to fall back on any sort of ‘elephant test’. In my own very respectful judgment, Lord Nicholls in Etridge at [7] put his finger on the touchstone of living transaction ‘undue influence’:

As Lord Nicholls said in Etridge at [13], in determining that question of fact, the court must take into account all of the circumstances including: the nature of the alleged undue influence, the personality of the parties (including their age, health and ‘vulnerability’: Etridge at [11]), their relationship, and extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship. Ward LJ proposed a yardstick in Drew at [36]:

It is true that some of the phrases Ward LJ used in Drew were drawn from cases on undue influence in the context of wills, which is narrower than for living transactions: limited to ‘coercion’ (see Rea [20]-[32]). Certainly, if a party to a living transaction were ‘coerced’ into it, that would also plainly be ‘undue influence’. Such ‘coercion’ would include the cases Lord Nicholls described in Etridge at [8] of ‘overt acts of improper pressure or coercion such as unlawful threats’. A clear example of that is a wife being bullied by a husband into agreeing loans until she eventually signed anything put in front of her as in Aboody. In that context, as Lord Nicholls said in Etridge at [8] there is considerable overlap with modern common law duress (which was also Lord Hodge’s view in the duress case of Pakistan Airways v Times Travel [2021] 3 WLR 727 (SC)).

Indeed, modern Family Law has belatedly caught up with Equity in recognising ‘coercion and control’ as the touchstone of ‘domestic abuse’, as the husband’s conduct in Aboody would now doubtless be seen. I respectfully agree with Prof. Enonchong at paras.8-006-7 and 8-014-8-18 that such cases do not require a pre-existing relationship at least of trust and confidence: it would be a contradiction in terms and indeed an abuse of language for the law to do so. As Lewison J said in Thompson at [101]: ‘people do not usually trust those who coerce them’. However, it is fair to characterise such cases as a ‘relationship of influence’ - but not of ‘trust and confidence’, rather of ‘ascendancy’, ‘control’ or ‘domination’, as Lord Nicholls put it in Etridge at [11]. I come back to that point below.

However, ‘undue influence’ is not limited to such ‘barn-door undue influence’. Equity is more subtle than that. As Ward LJ also observed in Drew at [30]:

This brings me to the first part of the second question I asked at start of this judgment, which in the light of Etridge and the cases since already discussed, I re-phrase as: ‘Does proof that fraudulent misrepresentation induced a transaction affirmatively prove undue influence ? The answer to that first part of the question is that it plainly can. Indeed, in Etridge, Lord Hobhouse observed firmly at [103]:

Lord Nicholls’ dividing line was explored further in Chandra, where a husband’s genuine forecast of costs in persuading a wife to guarantee a business loan was held not misrepresentation even though it turned out to be wrong. Patten LJ at [94] endorsed David Richards J’s (as he then was) differentiation at first instance between ‘deliberate concealment’ which can amount to ‘unacceptable means’ and ‘inadvertent non-disclosure’ which could not. Whilst Patten LJ in Chandra at [32] differentiated between misrepresentation and undue influence, he was expressing the view that innocent misrepresentation could not produce ‘undue influence’. However, Patten LJ in Chandra did not say fraudulent misrepresentation could not do so – on the contrary, at [26], he gave ‘conscious deception’ as an example of undue influence. In any event, that position is put beyond doubt by two other Court of Appeal decisions which it is not clear were cited to the Court in Chandra:

As Prof Enonchong says at para.8-103 of his work, discussing Cowey and Chandra, innocent misrepresentation or non-disclosure is more difficult to analyse as proving ‘undue influence’. However, fraudulent misrepresentation plainly can amount to undue influence, but that is not the same as saying it automatically will. For example, in Zurich v Hayward [2017] AC 142 (SC), where defendant insurers in a personal injury case settled a claim which they suspected to be exaggerated and it turned out it had been fraudulently so, it was held they could rescind the settlement agreement for fraudulent misrepresentation - there was no suggestion they could have done so for undue influence. Indeed, it follows from what I have said the real issue is not whether fraudulent misrepresentation can amount to undue influence, but whether if there has been fraudulent misrepresentation, in the words of Lord Nicholls in Etridge at [7], ‘ought the consent thus procured not fairly to be treated as the expression of a person's free will ?’ In Etridge at [36] Lord Nicholls said a husband misleading a wife could be undue influence, but did not suggest that was different from his test at [7]. In short, the ultimate issue remains whether there was undue influence not (just) deceit. But that therefore leads to the second part of the second question I phrased at the start of the judgment I clarify this way: whilst fraudulent misrepresentation clearly can amount to ‘unacceptable means’ for the purposes of undue influence, does it also require there was a pre-existing relationship of trust and confidence ?

For cases of what used to be called ‘presumed undue influence’, as Lord Nicholls said in Etridge at [18]-[19], unless there is a special class of relationship such as a parent over child (the old Aboody ‘Class 2A’), in other relationships (the old ‘Class 2B’), as Lord Nicholls said in Etridge at [10] ‘the question is whether one party has reposed sufficient trust and confidence in the other, rather than whether the relationship belongs to a particular type’. Lewison J said in Thompson at [100]

However, Thompson itself was the other side of the line. A daughter promised to buy out her mother’s property and the mother gifted it, but the daughter did not pay. Lewison J held their relationship was one of trust, but no different from the mother’s with her other daughter. The mother did not entrust financial affairs to the key daughter, made her own decisions and knew she took a risk with the gift, not least as she had first been warned about that by an independent solicitor.

Before Etridge, in Goldsworthy v Brickell [1987] Ch 378 at 401, Nourse LJ said:

In Enal at [50] Sir Nicholas Patten noted the overlap between relationships of trust and confidence and fiduciary duties, also discussed in Snell’s Equity (2022) 34^th Ed at paras.7-065-9. It also explains at paras.7-003-6 that outside settled categories of fiduciary such as trustee (including resulting trustee as I return to), fiduciary duties can also arise in ‘relationships of trust and confidence’. That phrase in the fiduciary context was equated with the ‘duty of loyalty’ Henry J for the Privy Council described in Arklow v Maclean [2000] 1 WLR 594 (PC) at 598-600: ‘where one person is in a relationship with another which gives rise to a legitimate expectation that Equity will recognise…the fiduciary will not utilise his or her position in such a way which is adverse to the interests of the principal’.

Having said all that, as Prof. Enonchong explained at para.10-044 of his work:

That leads me to cases of ‘actual undue influence’ – in other words, ‘affirmative proof’ of undue influence. Classically, as Lord Hobhouse said in Etridge at [103], that ‘does not depend upon some pre-existing relationship between the two parties though it is most commonly associated with and derives from such a relationship’. That is because the classic territory of ‘actual undue influence’ entails conduct like improper pressure or coercion, such as unlawful threats’ or indeed ‘domination’ which as discussed above at paragraph 360, do not require a pre-existing relationship of trust and confidence. However, one analysis of the ‘coercion’ cases (i.e. indisputably ‘Class 1 cases’ of ‘actual undue influence’) is that whilst there is no need for a relationship of trust and confidence, the ‘coercion’ itself creates a ‘relationship of influence’, albeit of a twisted kind. After all, even with so-called ‘presumed undue influence’ cases, a ‘relationship’ can arise due to the circumstances of the transaction itself’ as Buxton LJ put it in Turkey at [11] if in a very different context. However, this is not a ‘coercion’ case.

As Lord Nicholls observed in Etridge at [9], older cases to which the label ‘presumed undue influence’ could apply have articulated the nature of the required ‘relationship’ in different ways, such as one party ‘owing a duty to advise the other or manage his property’ in Allcard; or ‘relationships where one party owed the other an obligation of candour and protection’ in Zamet. Against that context, Lord Nicholls himself in Etridge at [33] gave the example where a husband whose wife has reposed trust and confidence in him prefers his own interests to hers, describing him as ‘failing to discharge the obligation of candour and fairness he owes her looking to him to make the major financial decisions’. Building on this, Prof. Enonchong at paras. 8-009-13 of his work argues that deliberate misrepresentation or concealment cannot be actual undue influence without a pre-existing ‘duty of candour and fairness’ he summarised at para.8-10:

One reading of this analysis is effectively to equate ‘the duty of candour and fairness’ with ‘a relationship of trust and confidence’. Certainly, that appears to have been the approach of Briggs J (as he then was) in Hewitt where, having considered Chandra and Thompson, he held a husband’s deliberate non-disclosure of his affair to his wife when asking her to agree to a new bank charge meant her consent had been procured by undue influence. He said at [29]-[30]:

As with most ‘labels’, in my own very respectful judgement, it is important to distinguish between the label and the contents. The ‘label’ of a ‘duty of candour and fairness’ taken from Lord Nicholls’ specific example in Etridge at [33] of a husband who ‘fails to discharge the obligation of candour and fairness he owes to his wife looking to him to make the major financial decisions’ must be seen in the light of his description of the wife as first ‘reposing trust and confidence in him’. Likewise, Lord Nicholls appears to have derived that expression ‘obligation of candour and fairness’ from Lord Evershed MR’s description in Zamet of ‘an obligation of candour and protection’, which Lord Nicholls quoted in Etridge at [9]. Yet as he immediately went on to say at [10]-[11], the modern formulation of that is the ‘relationship of trust and confidence’, although a relationship of influence or ascendancy can arise where a vulnerable person has been exploited. Therefore, given that Lord Nicholls and other Lords in Etridge like Lord Clyde discouraged a proliferation of confusing terminology and classification in the law of undue influence, I prefer to focus on the contents of a ‘relationship of trust and confidence’ rather than the label of ‘an obligation of candour and fairness’.

After all, Lord Nicholls, Lord Scott and the other Lords in Etridge stressed that ‘actual’ and ‘presumed’ undue influence were different methods of proving the same underlying concept – or ‘unitary doctrine’ – as Mr Perring put it. Therefore, at least in cases which do not involve ‘direct pressure’ or ‘domination’ where a relationship of ‘trust and confidence’ (at least) is inapt, it is logical to require the claimant to prove the same relationship, whether they then seek to prove undue influence affirmatively by ‘unacceptable means’ like deliberate misrepresentation or concealment; or by invoking the ‘evidential presumption’ discussed in Etridge.

Therefore, I accept that for both what Mr Halkerston called the Claimant’s ‘actual undue influence’ and ‘presumed undue influence’ arguments, I agree with Mr Perring that the burden is on her first to prove she had a ‘sufficient relationship of trust and confidence’ with the Krishans. But since on ‘presumed undue influence’ I am leaving aside my findings on fraudulent misrepresentation, I will leave them aside on ‘trust and confidence’ as well, even as applied to ‘actual undue influence’ (though they come back in at a later stage). Notably it is relevant to both that even on his very different factual findings, HHJ Purle QC said at [32]:

In his submissions applying the law Mr Perring set out to the facts, Mr Graham made seven different points, which I can conveniently group into three themes:

I agree with Mr Graham that the relationship between the Claimant and the Krishans was not one in which she placed her trust and confidence in them in respect of management of her financial affairs generally and that other than for the Properties, she remained entirely free and able to make her own decisions. Therefore, the case is different from Enal where a grandfather had decades earlier been granted an effectively unused power of attorney by his son over the latter’s properties which the grandfather had bought in his son’s name. The grandfather used the power of attorney to sell one of the properties for a tenth of its real value without consulting his son, to his daughter (the son’s estranged sister) with whom he lived and his grandson (her son), to whom the grandfather had recently granted his own power of attorney. Sir Nicholas Patten for the Privy Council said at [57]:

However, as I noted, in Enal at [55], Sir Nicholas Patten had endorsed the analysis in Goldsworthy quoted above of Nourse LJ I partially repeat and underline:

In my judgment, the relationship between the Claimant on one hand and each of the Krishans on the other, had a degree of trust and confidence, such that the Krishans individually and jointly were in a position to influence the Claimant into the transaction of transferring the Properties to Gracefield on the ‘15^th March letter terms’, let alone the ‘PSA Plus’ terms. As I said at paragraph 191 above but repeat for ease with further elaboration, one can see the Claimant’s trust in the Krishans growing and developing over time:

Since I have now travelled this ground frequently, I simply give the key points:

This is confirmed when one stands back and distinguishes the different roles the Krishans played in their individual relationships with the Claimant:

In my judgment, this was undoubtedly a relationship of sufficient trust and confidence. It had grown. It had kept the Claimant on an even financial keel. It had led to her effectively handing over all control to the Krishans from November 2005, which enabled them to steer the Claimant through the transfer process in March/April 2006. By the same repeated (even if not fraudulent) encouragement, entangling and gradually binding her into greater and greater trust and confidence in the Krishans, until she dutifully signed anything in front of her, including her family properties away for very modest financial support ‘up front’. When all is seen holistically, it shows the huge trust the Claimant put in the Krishans.

Indeed, even if I am wrong (and more importantly, so would be Lewison J in Thompson) and ‘trust and confidence’ requires management of financial affairs generally, on my findings, for the same reasons, this was even more clearly a ‘relationship of influence’ based on the Claimant’s relative vulnerability and the Krishans’ increasing ascendancy (which I have found they deliberately brought about). Indeed, contrary to HHJ Purle QC’s findings, I find the Claimant absolutely did put her decision-making powers for the Properties at the disposal of the Krishans. For example, when the Claimant queried SB’s letters in March, she then meekly accepted Mrs Krishan’s explanation (even if not fraudulent) and dutifully signed the letter (which the Krishans much later used for their forgery).

But let me assume I am wrong on the facts and agreed with the Purle Judgment. Let us say, as HHJ Purle QC did at [6], [11] and [12] of it, the Claimant was stressed and in financial difficulty and Bobby’s negotiations had failed, so she who persuaded the Krishans to help her, rather than the other way around as I have found. Let us also say, as found by HHJ Purle QC at [14]-[16], that she was happy to transfer the Properties to Gracefield and knew full well the plan was to sell them. Further, let us say, as HHJ Purle QC found at [19]-[23], that the oral agreement was in the terms he declared. Then finally, as HHJ Purle QC found at [19]-[24], that the Claimant was entirely happy to transfer the Properties and had the chance of independent advice from Mr Whiston before she did. Yet despite all that, HHJ Purle QC still found at [32] of the Purle Judgment: ‘there was undoubtedly a relationship of trust and confidence’. I entirely agree. However, of course my own findings of fact are very different. It is with my own findings in mind that I must now turn to my conclusions on ‘actual undue influence’.

Whilst as I have explained, ‘actual undue influence’ is simply a different method of proof than ‘presumed undue influence’, it is convenient to label the Claimant’s argument of ‘affirmative proof’ as her ‘actual undue influence argument’. As I summarised above at paragraph 364, whilst fraudulent misrepresentation can produce undue influence, the ultimate test for what is really ‘affirmative proof’ of it was set out by Lord Nicholls in Etridge at [7]: whether a complainant’s ‘intention to enter into the transaction’ was ‘produced by unacceptable means’ so that the transaction ‘ought not fairly be treated as the expression of their free will’.

The short answer is that, for the reasons given at paragraphs 171-230 and 321-349 above, I am satisfied undue influence is affirmatively proved on the balance of probabilities. The Krishans from July 2005 to April 2006, by means of the fraudulent misrepresentations I found proved, unconscionably produced the Claimant’s intention to transfer the Properties to Gracefield by unacceptable means so they ought not fairly to be treated as the expression of her free will. Contrary to HHJ Purle QC’s finding quoted at paragraph 375 above, I find on the balance of probabilities the Claimant did ‘put her decision-making powers at the disposal of the Krishans’; and they did abuse her trust and confidence:

However, in deference to the high quality of Mr Graham and Mr Perrings’ submissions, let me answer them. Mr Graham’s over-arching submission was that there was no nor unconscionable conduct by the Krishans, or even if there was, no impairment of the Claimant’s will in her agreement to transfer. As he put it: the Claimant was not led to do anything, never mind driven: it was not in her nature to be led; and it was not in the Krishans’ nature to drive her’. I will address Mr Graham’s individual points in three broad groupings of them to start with:

In relation to independence, Mr Graham submitted positively and correctly that the Claimant was an intelligent, independent and resourceful woman. She is a graduate and trainee teacher, owning her own property and caring for her family. In 2002-2004, the Claimant had handled the Properties alongside Bobby, getting a survey of the Cinema and a valuation and even in July 2005, she received the Donaldsons’ valuations. I accept all that. Indeed, since it is rare for an advocate to ‘endure’ cross-examination more than the witness, Mr Graham has earned the right to point to the Claimant’s histrionic evidence to say she was ‘strong and robust, not a woman who could be cowed from exercising her free will’. Quite.

However, when determining whether the Claimant was subject to actual undue influence in 2005-06, I have to look at evidence of the Claimant’s independence at that time, not years before and certainly not years later in the shadow of the litigation which has consumed her life. As I have found at paragraphs 150-165, the contemporaneous evidence shows that in 2004-05 the Claimant’s ordinarily redoubtable independence and intelligence was rather overwhelmed and she was under ‘significant stress’ as her GP put it (I accept, not ‘clinical depression’). There was a ‘perfect storm’ of personal problems, including a financial crisis. On that subject, Mr Graham skilfully sought to present her payment of bills and dealings with bailiffs as a reflection of independence. It was not – rather it was a reflection of her financially struggling and fire-fighting. Therefore, I find in 2004-2005, by comparison to her previous determined individualism, exemplified by separation from Bill and university studies, the Claimant was relatively ‘vulnerable’. However, I doubt that would have reached the high threshold of ‘serious disadvantage through poverty, ignorance, lack of advice or otherwise’ as required to claim ‘unconscionable bargain’ (Pakistan Airways at [24]). However, that does not mean that claim was ‘bogus’ as Mr Graham submitted, it simply means that on the evidence the Claimant would have failed to prove it.

I also accept Mr Graham’s point that in mid-2005, the Claimant knew she had to do something about her financial situation and the Properties (although given they could have been sold – especially the Cinema – CPOs, bankruptcy or other loss of the Properties were a very small risk). The Claimant had largely (but not entirely) left them to Bobby and I find were it not for the Krishans ousting him in July 2005, she would have authorised him to continue, not dealt with it herself. When Mrs Krishan did persuade the Claimant to authorise Dr Krishan rather than Bobby, the Claimant was happy to hand over liaison with the Council - as she had previously done. She did not really want to be involved and had enough on her plate. As I said, she trusted Dr Krishan as an extension of her trust in Mrs Krishan. Whilst it was not the Krishans’ case, I accept the four months between July and November 2005 it took for them to persuade her to agree to the transfer in principle illustrates perhaps best her independence and the fact this was certainly not a ‘relationship of domination’. However, it is also clear that the Claimant was worn down by the ‘stick’ and ‘carrot’ of the Krishan’s rescue narrative, including the four fraudulent misrepresentations I have accepted above, as she said:

I turn to the Claimant’s ‘involvement’ with the Properties from July 2005 to April 2006. In fairness to Mr Graham, much of the rug from under his submissions has been pulled by my findings of fact (but I do stress in making them, I considered those submissions). I have found the Claimant accepted help from the Krishans in July 2005, not begged them for it. I have found that Dr Krishan came up with the idea of a development company and the transfers of the Properties to it, not the Claimant. As I say, I have found that she took some persuasion to agree in principle to transfer the Properties to a company over the four months between July and November, not proposed the idea and pestered the Krishans about it.

Nevertheless, I accept between November 2005 and April 2006, the Claimant attended more meetings than she accepted (including both with Mr Davies in November 2005 and SB twice in January and February 2006). Moreover, I accept she signed the transfers and later the stock transfer forms she earlier denied and has not pursued other allegations of forgery. Furthermore, I accept she also sent and received more correspondence about the development than she had accepted (including to Mr Whiston on 3^rd March authorising the transfers, his and SB’s letters of 15^th March about the terms of transfer, her confirmation of the values to Mr Whiston on 24^th March and letters to and from him about the will).

However, at the end of the day, whilst I am wary of what findings I can make of the Davies meeting in November 2005, for those with SB in January and February 2006, the Claimant was essentially a ‘passenger’. She contributed ‘the odd point’ as SB put it in evidence in 2010. The person driving the process was not the Claimant but Dr Krishan. Likewise, I have found that Mrs Krishan drafted for the Claimant to simply sign the 2006 letters in her name to Mr Whiston of 3^rd March, 24^th March on the transfers and 3^rd April on the will (although I accept the Claimant gave her own instructions on the will when she met him on 4^th May).

Turning to advice, whilst Mr Graham also relies on the Claimant’s involvement with professionals to show she could get independent advice, in fact that was a problem. As the Claimant was a mere ‘passenger’ with SB who was actually involved in the transaction, she was hardly likely to seek independent advice from third parties like the Shropshire Chamber of Commerce (through whom she had instructed the surveyor of the Cinema in 2004) or advisers like Mr Matthews whom she instructed in 2008. Whilst she was supported throughout by Bobby, he had also been taken in by the Krishans’ ‘rescue narrative’, just as she had. Therefore, understandably, on his advice argument, Mr Graham places most emphasis (both on actual influence and on rebutting any presumption of undue influence) on the exchange between the Claimant and Mr Whiston in April 2006. On receipt of the Claimant’s signed transfers for the Shops, Mr Whiston then on 5^th April wrote to the Claimant to advise her that as he had previously acted for the Krishans and there may be a conflict of interest and she should seek independent legal advice about the transfer. The Claimant wrote back in her own handwriting on 6^th April confirming in terms that there was no conflict of interest in relation to the transfer from her to Gracefield. As Mr Whiston pointed out in his reply on 10^th April, that was not his point, but he took it as confirmation the Claimant was declining to get independent advice. Mr Graham points out that the Claimant’s incorrect answer actually shows she felt there was no conflict of interest in the transfer itself, he submitted showing there was no undue influence.

In the presumed undue influence case of Smith v Cooper [2010] 2 FLR 1521 (CA) a woman transferred her home from her own name to that of herself and her partner for no consideration, then used that property to get a mortgage to buy another property, again in joint names. A solicitor involved throughout did not advise the woman at any point to get independent legal advice because he considered she did not need it, even though her instructions vacillated and she suffered from depression and panic attacks. In upholding her claim to set both transactions aside for undue influence, Lloyd LJ observed at [56]:

It is true that Mr Whiston did not fall into the same trap as the solicitor in Smith. Whilst he did not purport to give the Claimant independent legal advice (indeed he explained why he could not do so due to the potential conflict of interest), he did advise her to get some. However, the difficulty with this point is that there were clear misunderstandings between Mr Whiston and the Claimant. As I have explained at paragraphs 219-227 above, Mr Whiston was not aware of any discussions about ‘deferred consideration’ of £200,000 or indeed a 50% profit share, even assuming that was agreed by the Claimant and Krishans, which I have found it was not. So far as Mr Whiston was concerned, the transaction was simply the transfers (split over the tax year) of the Properties for a total of £100,000, being ‘the amounts placed on the properties by the council with regards to the compulsory purchase order’. So, just as the Claimant was misled by the Krishans’ fraudulent misrepresentations, so too were SB and Mr Whiston. As a ‘one-man band’ high street solicitor, doubtless Mr Whiston could have researched CPOs, but it is very unlikely he would know about them off the top of his head. In any event, he had asked the Claimant to confirm the values, which she had ostensibly done on 24^th March 2006. Yet Mr Whiston perfectly reasonably misunderstood that too because I have found Mrs Krishan drafted that letter for the Claimant to sign (the same signature she and her husband later used in forgery). Mr Whiston did not know he was to all intents and purposes corresponding with Mrs Krishan.

Indeed, there was a further innocent misunderstanding by Mr Whiston. I have found at paragraph 226 that whilst the Claimant did hand-write the letter of 6^th April, it was dictated by Mrs Krishan. She did not have time to write a letter in the Claimant’s name as usual, as they were in a rush before they went to India, as another Mrs-Krishan-drafted letter said dated 3^rd April 2006 for the Claimant to sign to instruct Mr Whiston on the will. Yet even if I am wrong, whoever composed the 6^th April letter, did not answer Mr Whiston’s question and so failed to address whether the Claimant wanted independent legal advice. Certainly, the Claimant did not realise that and if she did, she even let the other party to the transaction dictate her response. Therefore, whilst I agree with Mr Graham that the Claimant’s handwritten letter of 6^th April is ’particularly significant’, it shows the opposite of what he claims. Far from showing the Claimant clearly not under influence of another person, it demonstrates her writing a letter at Mrs Krishan’s dictation. This suggests that, in Ward LJ’s words in Drew, that far from her response that there was no conflict of interest in the transfer being ‘the offspring of her own volition’, it was literally ‘the record of someone else’s’.

Indeed, this last point is demonstrated throughout by revisiting the development of the relationship of trust and confidence between the Claimant and the Krishans discussed in the last section, but now including how the fraudulent misrepresentations I have upheld fitted in. I deliberately left those to one side when summarising the development of the relationship of trust and confidence. Yet they were deployed by the Krishans as part of their ‘rescue narrative’, which in turn strengthened the relationship – they are entangled. Therefore, it may be helpful to look again at that development as the growing abuse of trust and confidence, before once again applying Lord Nicholls’ test in Etridge at [7]: whether the Claimant’s ‘intention to enter into the transfers’ was ‘produced by unacceptable means’ so that they ‘ought not fairly be treated as the expression of her free will’ (and indeed it would be ‘unconscionable’ to so regard them):

Therefore, irrespective of whether the terms of the transaction were the ‘PSA Plus terms’, ‘15^th March letter terms’ or ‘transfer terms’, I find the Claimant has affirmatively proved her actual undue influence claim. Moreover, even though it is strictly unnecessary – UCB, as I said at paragraph 349, I find on the balance of probabilities, but for the 2005 fraudulent misrepresentations (irrespective of the 2006 ones), the Claimant would not have transferred the Properties to Gracefield in April 2006. I repeat this passage in the Claimant’s statement once more:

In case I am wrong on actual undue influence, I turn to consider the Claimants’ ‘presumed undue influence’ argument, now leaving entirely aside my finding on fraudulent misrepresentation. Here, the terms of the transaction do matter and I will focus on the ‘PSA Plus terms’. I have found the Claimant and the Krishans had a relationship of trust and confidence (even on HHJ Purle QC’s findings). I turn to the second and third stages: whether the transaction ‘calls for explanation’ so the evidential burden shifts to the defendants and if so, whether they rebut it.

Whilst Counsel used the familiar (if question-begging expression) ‘whether the transaction calls for an explanation’ Lord Nicholls used in Etridge at [14], I will underline and use his more precise formulation at [21] he explained at [22]-[29]:

With that point, Lord Nicholls’ important guidance in Etridge and Prof. Enonchong’s helpful analysis in his work at Chapter 10 all in mind, I can gratefully adopt the following points of Mr Perring on ‘the second prerequisite’:

That fifth point was summarised by Mr Perring from Prof Enonchong’s work at ps.11-018-19. It is illustrated best by Turkey, which was not in the authorities bundle but which Prof Enonchong mentioned at para.11-018. In any event, it confirms Mr Perring’s point and indeed the significance of the precise formulation one adopts of the transaction. As noted above, in Turkey, there was a relationship of trust and confidence between a Saudi husband and wife who owned an English property rented to but managed by her father. As the owners were in financial trouble, the father bought them out for a sum in Saudi currency without a valuation at an undervalue. The Court held the transfer did not ‘call for an explanation’ as it was a family transaction in response to financial problems, rather than an ‘arm’s length transaction’ where the absence of valuation etc would have done. Buxton LJ gave a detailed analysis of the ‘call for an explanation’ test:

Another example applying Turkey but going the other way (also noted by Prof. Enonchong in p.11-018) is Hart v Burbidge [2014] EWCA Civ 992. In Hart, a daughter persuaded her mother to sell properties left in her will to other family and to cash in investments to purchase a new property for her to live with her daughter and her husband in their names not hers. The Court held that transaction should not be separated into cash and properties but considered as a whole and held that it called for explanation as it was clearly disadvantageous to the mother.

I turn to my conclusions on ‘presumed undue influence’. For the avoidance of doubt, I emphasise again I leave to one side all my conclusions on the fraudulent misrepresentations (although not the underlying findings of fact about what was said). As I said at p 329 above, I will focus on the ‘PSA Plus terms’, but then also cross-check my conclusion against the ‘15^th March letter terms’ and ‘transfer terms’. If I find ‘presumed undue influence’ proven on any basis, this issue is academic. Indeed, it is anyway given my conclusions on ‘actual undue influence’.

On that footing, Mr Graham’s overarching submission was that the ‘PSA-Plus’ terms did not ‘call for an explanation’. Again, I group his submissions into three:

Of course, the parties did not have a crystal ball at the time, but this point about how disadvantageous to the Claimant even the ‘PSA Plus terms’ truly were can be illustrated by another counterfactual – what if the Properties had simply been sold for their true market value later in 2006 ? I assess this firstly on Ms Dobson’s valuation of £890,000 and secondly assuming the value was actually £300,000:

In any event, following Etridge, the legal test is no longer ‘manifest disadvantage’, but whether the ‘transaction calls for an explanation’ in the sense that it is ‘not readily explicable by the relationship of the parties’ to use Lord Nicholls’ formulation in Etridge at [21] which I prefer. I have detailed my findings on that relationship of trust and confidence at paragraphs 375-383 (and can now leave aside my ‘counterfactual’ at 384). In short, from July to November 2005, it had grown from a relationship of emotional trust and confidence between the Claimant and Mrs Krishan to one of trust for Dr Krishan over the Properties, to her handing over total control to them and becoming a ‘passenger’.

I have first taken fully into account, as Turkey requires me to do, any explanation put forward which would explain the transaction and remove suspicion of possible exercise of undue influence, including Mr Graham’s submissions that it was advantageous to the Claimant and indeed ‘skewed in her favour’ (which I have rejected); and that in any event, is readily explicable as a commercial arrangement albeit in a family context. I remind myself the Court does not often interfere with family arrangements if they are reasonable with full and fair communication. However, I find the transaction is not readily explicable by the relationship of the parties, even bearing in mind their close family relationship:

It follows that ‘terms of the transaction’ issue is indeed doubly academic. On the ‘15^th March letter terms’, if the Claimant knew that on sale of the Properties she would get up to ‘agreed’ market value £300,000 but any ‘profit’ would have to come via Gracefield and would depend on her position then (even ignoring what happened next: Thompson), that conclusion would be even clearer: