Slade (t/a Richard Slade And Co) v Abbhi

The Claimant in these proceedings (“Mr Slade”) is a solicitor who at all times material to his claim, including its commencement, was the sole principal in his firm of Richard Slade and Company. The firm’s practice (or business) has since been incorporated.

The Defendant to Mr Slade’s claim (“Mr Abbhi”) is the son-in-law of Mr Slade’s former client, Mr Balmohinder Singh (“Mr Singh”) and he is married to Mr Singh’s daughter Suninder (known as “Seema”).

Mr Slade claims that Mr Abbhi is liable to him in respect of legal fees and disbursements (including counsel’s fees) which Mr Slade’s firm incurred on Mr Singh’s account in 2013 to 2015, in acting for him in litigation, and which remain unpaid. Mr Singh died on 9 February 2015 (he had been quite unwell throughout the period Mr Slade acted for him) and his estate is insolvent, an insolvency referable in no small part to the cost liability he incurred to his son and adversary (“Jasminder”) in the litigation in which Mr Slade came to represent him. In the present proceedings that litigation is described in the statements of case mentioned below, and I will also refer to it, as “the Action”.

By a Claim Form issued on 17 August 2017 Mr Slade seeks to recover from Mr Abbhi the sum of £371,159.59 representing fees of £333,260.63 incurred by Mr Slade in acting for Mr Singh in the Action, plus interest (at 8% p.a.) down to the date of issue of the present Claim. Most of the invoices in support of that claim were rendered before Mr Singh’s death, though the last five (totalling just under £16,000) were submitted either shortly before or within a couple of months after 9 February 2015.

The Claim Form states that Mr Abbhi’s liability in respect of Mr Singh’s legal fees arises “pursuant to an agreement dated on or around 7 November 2013”. However, the Particulars of Claim (also dated 17 August 2017) allege in paragraph 7 as follows:

“On or around 11 July 2013 the Defendant:

(a)

Informed the Claimant that Mr Singh himself would be unable to pay the Claimant’s fees and disbursements to be incurred in connection with the Action”;

(b)

Agreed with the Claimant, in consideration of the Claimant agreeing to act for Mr Singh in the Action, that he would pay such fees and disbursements on Mr Singh’s behalf, alternatively, lend Mr Singh sufficient funds to pay such fees and disbursements and ensure that those funds would be applied for that purpose, pursuant to the 2012 Loan Agreement (a copy of which was provided by the Defendant to the Claimant by email on 16 July 2013)”

That oral agreement of 11 July 2013 is said by Mr Slade to have been reached at a meeting at The Capital Hotel in Knightsbridge between Mr Abbhi, Seema and Mr Slade. There is no dispute that the meeting took place. It was the first time Mr Slade met Mr Abbhi and Seema. It had been arranged by leading counsel, Mr John McDonnell QC who had been instructed on behalf of Mr Singh in the Action for some time, in circumstances where the principal solicitor within Mr Singh’s former solicitors, Pillai & Jones, had been taken ill and replacement solicitors needed to be found to carry on the conduct of the litigation which was coming to trial later in the year.

As Mr Kokelaar for Mr Slade and Mr Robins for Mr Abbhi recognised in their Skeleton Arguments and opening and closing submissions, the case turns upon my findings of fact in relation to that meeting and the legal analysis of any binding agreement I may find to have been reached during it. The legal burden of proof of course rests upon Mr Slade.

Mr Robins was at pains to point out, correctly and with confirmation from Mr Kokelaar, that the claim that Mr Abbhi is liable for the legal fees rests solely upon an oral agreement reached at the hotel on 11 July 2013, and not any later email exchanges in October and November 2013. I return to the point below but note at the outset Mr Robins’ submission that the confusion over the date of the alleged agreement, as between the Claim Form and the Particulars of Claim, was not a promising start for Mr Slade in establishing his case. Mr Robins bolstered that submission by saying that contemporaneous emails from Mr Slade after November 2013 (both to Mr Abbhi and to the legal team of leading and junior counsel and their clerk) clearly indicated that Mr Slade thought that any agreement dated from October/November 2013, rather than the earlier meeting in July of that year; and yet it was obvious, he submitted without contradiction from Mr Kokelaar, that the correspondence between Mr Slade and Mr Abbhi in those two months failed to establish any meeting of minds between them over the payment of fees.

Mr Abbhi’s pleaded case is that he reached no agreement with Mr Slade at the July meeting. In addition to denying paragraph 7 of the Particulars of Claim, his Defence denies that he agreed with the Claimant that he would either discharge Mr Singh’s fees or lend Mr Singh sufficient funds to discharge in full his liability to pay the Claimant’s fees. The only relevant agreement in relation to funding of Mr Singh’s litigation was, Mr Abbhi says, a Loan Agreement dated 16 June 2012 between himself as lender and Mr Singh as borrower which expressly made it clear that any further lending beyond previous loans totalling US $530,000, and lent to fund the Action before Mr Slade’s firm was instructed, was lending entirely within his discretion. That Loan Agreement was entered into before Mr Slade was retained by Mr Singh. The “Initial Loan” of $530,000 mentioned in it had been advanced by Mr Abbhi to two firms of solicitors (including Pillai & Jones) who had successively acted for Mr Singh before Mr Slade came to act. Although the Loan Agreement specified that any further loans under it would be used for the purpose of paying Mr Singh’s legal fees and expenses in relation to the litigation with Jasminder, the Defence denies any separate agreement was made between Mr Slade and Mr Abbhi that they would be used solely for that purpose. Paragraph 37 of the Defence denies any agreement between them that Mr Abbhi would discharge Mr Singh’s legal fees or any other agreement to lend monies for that purpose.

I note that, although paragraph 37(5) denies any agreement to lend so as to discharge Mr Singh’s liability “in full”, there is no recognition of any agreement to lend to a lesser extent. A fair reading of paragraph 37 as a whole (in particular paragraph 37(6)) is that it involves a rejection of any separate agreement having been made between Mr Slade and Mr Abbhi at the hotel meeting. Paragraphs 41 to 43 of Mr Abbhi’s witness statement (which I quote in paragraph 45 below) confirm that interpretation.

As a fall-back defence, Mr Abbhi says that the proper analysis of the agreement alleged against him by Mr Slade is that it was in the nature of a guarantee which is unenforceable for want of any document bearing a signature sufficient to satisfy the requirements of section 4 of the Statute of Frauds 1677.

As I put it to counsel during the course of their brief openings, the issues for trial were, therefore, whether there was any privity of contract between the parties and, if so, what kind of contract had they made given the point taken upon the Statute of Frauds. As I also observed, Mr Slade’s pleaded case amounted to saying that Mr Abbhi had assumed primary liability under an oral funding agreement (albeit that the funding might be channelled through Mr Singh under the separate Loan Agreement between Mr Singh and Mr Abbhi). Mr Robins remarked, however, that the claim against Mr Abbhi for interest on the outstanding sums at 8% (which was the rate specified in the firm’s standard terms of business unless LIBOR plus 5% was higher) could only be consistent with the liability being one of guarantee. That rate of interest was also the same one as specified in the Loan Agreement of June 2012 but there was no question of Mr Slade having any rights under that contract.

Mr Kokelaar had the day before trial submitted a Supplemental Note, supported by authorities, in relation to the requirements of the Statute of Frauds but counsel proposed the sensible course of deferring any further submissions on that aspect until evidence had been given by Mr Slade and Mr Abbhi in relation to the agreement allegedly struck. The authorities on the point were supplemented by others on the morning of the third day of trial when closing submissions were made.

The testimony of Mr Slade and then Mr Abbhi together occupied two days of the trial. Counsel made submissions by reference to the transcripts of evidence during the morning of the third day.

It is appropriate at this stage to record my gratitude to Mr Kokelaar and Mr Robins for the clear and efficient way in which they have each presented their client’s case both in the course of cross-examination and in their submissions.

As the issues that I have to decide fall within narrow confines, there is no need for me to dwell too long upon the nature of the litigation between Mr Singh and his son Jasminder, in which Mr Singh was unsuccessful and which led to him incurring liability for Jasminder’s costs which were said to be in the region of £1.5m (with Mr Singh being ordered on 30 April 2014 to pay £900,000 on account of those costs). How things turned out (in “litigation of a most unusual nature” to quote from the first sentence of the judgment) may be understood by reading the 248 paragraph judgment of Sir William Blackburne given after 19 days of trial in November and December 2013: see Singh v Singh [2014] EWHC 1060 (Ch).

However, a relatively brief description of the Action is required to explain the circumstances in which Mr Slade’s firm came to be instructed because it is, on Mr Slade’s case, an important part of the background that success on the part of Mr Singh would have carried with it, if only indirectly, a benefit for his daughter Seema (Mr Abbhi’s wife) of the kind which explains why Mr Abbhi entered into the agreement alleged against him. Contrarily, it is denied in Mr Abbhi’s Defence that either he or Seema “had any personal interest at stake” in the litigation (a denial repeated in his witness statement).

As appears from Sir William Blackburne’s judgment, and is explained by both Mr Slade and Mr Abbhi, in their witness statements, Mr Singh’s claim against Jasminder (and his other son Herinder who supported the father’s claim) was to the effect that certain property held by Jasminder was subject to a common intention constructive trust under Mitakshara principles which may apply to a “joint” Hindu or Sikh family. The most significant items of property were Tetworth Hall on the edge of Ascot racecourse (a substantial and valuable property owned and occupied by Jasminder but where Mr Singh and his wife also lived in circumstances of some confinement and relative discomfort) and the shares in a very successful hotel group called Edwardian Group Limited (“EGL”). To quote from Mr Slade’s witness statement in the present proceedings:

“Mr Singh was suing his two sons, Jasminder and Herinder, for a declaration that the family’s property was held on a common intention constructive trust to give effect to the Hindu custom of mitashakvara by which the patriarch was entitled to partition the property, which would then be divided among defined male members of the family, here Mr Singh and his two sons, Jasminder and Herinder. The case was financially significant because the family’s property included substantially the entire share capital of Edwardian Group Limited, a hotel-owning and operating group with, on its 2012 accounts, a net asset value in excess of £800 million. In addition, the eldest son, Jasminder, owned a very substantial property, Tetworth Hall, and its estate in Ascot, Berkshire.”

Mr Abbhi’s denial that either he or Seema had “any personal interest at stake” in the litigation is reflected, at least in relation to the absence of any immediate financial benefit for Seema under a successful Mitakshara claim, in what is said at paragraphs 2 and 90 of the 2014 judgment. The coparcenary or joint family property, for which that Hindu legal code provides, benefits the male members of family down to the third generation from a common male ancestor. Seema would not therefore have directly benefited under any judgment in favour of her father, not even (in circumstances where she was already married) from the maintenance or dowry for which Mitakshara provides. And although Mr Abbhi told me that he and Seema had a son (paragraph 2 of the judgment referred to a grandson) my understanding is that neither of those would have been coparceners as they did not descend from the male line. Mr Abbhi said in his evidence to me: “I do not know if my son was going to receive. I am not sure. I have not read that in that detail, because I was not interested, so I do not know”.

But that is not to say that Seema showed no interest at all in the Action. She gave evidence in support of her father’s claim (as appears from paragraphs 143 to 145 of the judgment) albeit that the judgment records her understanding that she would inherit nothing and that what the family jointly owned would go to the male members. Had her father succeeded in his claim then, subject to the need to partition his jointly owned share, there would plainly have been more than enough wealth outside the shares of Jasminder and Herinder to go around. I do not understand the strict Mitakshara principles considered in the judgment to have precluded the possibility of collateral benefit to Seema post-judgment, either during her father’s lifetime or after his death. Paragraph 60 of Sir William Blackburne’s judgment made reference to her mother’s and father’s mutual wills of 1986, and what were presumed to be later executed wills of 2001, under which Seema (or her children under the 1986 will) would have benefited from a share of Mr Singh’s estate.

During the course of his cross-examination (Seema not having given evidence before me or provided a witness statement) Mr Abbhi was shown a letter dated 25 April 2014 which Mr Slade wrote to Jasminder’s solicitors, Orrick, after the judgment. Orrick had written to Mr Slade on 15 April 2014, in the light of their client’s success under the judgment, enclosing a summary of Jasminder’s costs of just over £1.5m and in terms which clearly indicated they intended to make an application on behalf of their client that Mr Abbhi should be held liable for the costs under section 51 of the Senior Courts Act 1981 (a third party costs order). Orrick’s letter had demanded information about the funding arrangements and threatened an application for disclosure. A copy of Mr Slade’s letter in reply had been sent to Mr Abbhi by Mr McDonnell QC the same day “so you can see where we are”. By that reply Mr Slade referred to the possibility that Mr Singh may have been motivated by a desire to effect an equal or more equal distribution of the family’s wealth between his three children (including, therefore, Seema) and, although Mr Slade did not know about any discussions between Mr Singh, Seema and Herinder, his expectation was that they had taken place and that Mr Singh would have derived great pleasure from giving money to Seema and Herinder and to his grandchildren.

When taken to that part of the letter of 25 April 2014 in cross-examination Mr Abbhi said, initially, that it was completely incorrect (he was referring to the concept of Mitashakvara) and that Seema already had many millions of dollars of her own and no need of further wealth. However, he did accept that if Mr Singh wanted to give his daughter monies then she could not stop him and neither could he dispute that Mr Singh may have told Mr Slade of such a wish. In his witness statement, referring to his first meeting with Mr and Mrs Singh at Tetworth Hall on 14 August 2015, Mr Slade said: “[T]hey both told the same story. They wanted to win the case so that they could give Mr Singh’s share to their daughter and, to a lesser extent, Herinder and so that they could move to their own accommodation in a bungalow.”

Without having had the benefit of Seema’s evidence I draw the inference that, until the Action was lost, she had an expectation of deriving some personal financial benefit out of its hoped-for success.

Going back to the position when Mr Slade came to be instructed before the trial, neither was Mr Abbhi himself (i.e. ignoring any financial expectation Seema may have had) entirely disinterested in the litigation brought by Mr Singh against Jasminder. He had entered into the Loan Agreement of 16 June 2012, which I have mentioned above, and which was therefore already in place when Mr Slade came to the Action just over a year later.

Mr Abbhi said in his witness statement that he viewed his lending to Mr Singh, on the security he agreed to provide, as a business transaction. However, in his testimony he said that (Mr Singh having approached him for money to fight the case because he, Mr Singh, was desperate and very down because he felt he had lost his dignity) it was combination of business and doing him a favour.

The lending was certainly given the legal formality of a business transaction. The Loan Agreement was prepared by Dentons, solicitors, and it was reviewed by Mr McDonnell QC, on behalf of Mr Singh, who sent it back to Mr Abbhi for execution by an email dated 15 June 2012. That email concluded with the request “[P]lease tell Seema to call me if any further clarification is required.” The Loan Agreement was dated 16 June 2012. It referred to a total sum of $530,000 that had already been advanced by Mr Abbhi to Mr Singh: the “Initial Loan”. Both the Initial Loan and any “Further Loans” were identified as being for the “Purpose” which was the payment of Mr Singh’s legal fees and expenses in connection with the litigation. Mr Singh confirmed that the Initial Loan had been used for that purpose and undertook that any Further Loans would also be so used. The Further Loans were “any and all sums as may, by agreement between the parties, be advanced” and were entirely in the discretion of Mr Abbhi. Interest at the rate of 8% was payable and the “Repayment Date” (of the principal and accrued interest) was six months after the final determination of the litigation. By clause 8.1 of the Loan Agreement Mr Singh agreed to indemnify Mr Abbhi against any third party costs liability he might incur in the Action.

The security for the lending took the form of a Mortgage over some ordinary and deferred shares (and their distribution rights) which Mr Singh held in EGL. The Mortgage Deed was also dated 16 June 2012.

Mr Abbhi appears to have taken advice from Dentons, in connection with their preparation of this documentation, about the likelihood of his exposure to a third party costs order if his role was confined to funder under those arrangements. Mr Abbhi could not recall whether it was Mr McDonnell QC who first warned him about the risk of a third party costs order being made against him. Therefore, even before Mr Slade became involved, one matter “at stake” for Mr Abbhi in the litigation, and known by him to be so, was his potential exposure to a third party costs order as a provider of funds to Mr Singh. Allowing for the fact that he had already funded $530,000 on an apparently less formal basis, the legal documentation regulating the funding was designed to close off that exposure.

There remains the question of whether Mr Abbhi was aware that Seema stood to benefit financially from the litigation, if successful, as I have concluded by inference she herself was. One would expect Seema to have shared her understanding with her husband who was not in any sense aloof from the litigation. He had entered into the Loan Agreement and, with Seema, had met Mr Slade on 11 July 2013 before Mr Slade had even met his prospective client. But in the witness box Mr Abbhi rejected on a number of occasions the idea that Seema either expected or needed her father’s bounty (he said of Mr Slade’s letter dated 25 April 2014 “my experience is that that is not true”) and I therefore address this question below in the context of my assessment of his evidence generally.

As is obvious from the fact of these proceedings, the agreement alleged by Mr Slade was not adhered to by Mr Abbhi. He had funded Mr Singh’s payment of £20,000 towards Mr Slade’s fees which Mr Slade had asked for in August. By 24 October 2013 Mr Slade was writing to Mr Abbhi indicating that fees already incurred by him and anticipated to be incurred down to the start of the trial the following month would be likely to exceed £100,000 (including VAT) and that there were likely to be outstanding counsel’s fees of around £30,000 to £40,000 plus VAT as well as the expert’s fees. By an email of that date (“I am writing, finally, with an indication of the likely costs to the conclusion of the case”) he summarised the position by saying that the VAT inclusive figures for fees incurred and to be incurred down to the end of the trial were in the region of £130,000 and £390,000 respectively. He told Mr Abbhi he would be incurring personal liability for the barristers’ fees and gave an indication of their likely brief fees and refreshers. By an email dated 29 October 2013 Mr Abbhi responded by saying that due to the time of year he could only send £100,000 the following week “and the balance will be sent after I receive the dividends and other income end of January which means the balance of funds will be sent to Mr Singh (and then to you) in February”.

Mr Slade embarked upon the trial of the Action (the first day of which was 19 November 2013) with Mr Abbhi having, he says, wired a payment of $100,000 to Mr Singh on 8 November 2013. Mr Slade says that these translated into payments by Mr Singh of £25,000 on 8 November and £60,000 on 15 November. Mr Abbhi says he wired a further $100,000 on 28 November 2013 which Mr Slade says resulted in him receiving £30,000 on 29 November 2013 and £25,000 on 9 December 2013.

By an email to Mr Abbhi on 7 November 2013 - which referred to the first anticipated “100k” and a further “50k” at the end of November and “50k” at the end of December (the currency not being clear from that email but which can be presumed to have been Sterling in accordance with their October emails and from the billing currency) – Mr Slade had told him that “[T]he barristers have, very kindly, confirmed they are willing to wait until February”. By the start of the trial and even more so by its end (it appears that closing submissions were made on 19 December) Mr Slade’s incurred fees and commitments to counsel and others were therefore considerably in excess of the sums received by him.

It is clear that Mr Slade and Mr Abbhi were conversing as well as emailing each before the start of the trial (and that Mr Abbhi had had a discussion with Mr McDonnell QC in early November). Mr Slade’s email to Mr Abbhi of 4 November had referred to “our conversations the other night” (and indicated his understanding that Mr McDonnell was prepared to wait for payment until February but that he would have to establish the position of junior counsel, Mr Burkitt).

From Mr Slade’s and Mr Abbhi’s emails of 9 December and 10 December 2013 (the subject matter of the second from Mr Abbhi being “EHL Shares”) it appears that they had discussed the idea of Mr Singh selling the shares mortgaged to Mr Abbhi, the consideration being the amount advanced by him to date with interest ($1,123,200) “plus payment of balance by me to father in the form of additional cash”. Mr Abbhi floated the idea of a stated sale price of £750,000. By the middle of January 2014, the trial having concluded (with the judgment awaited) and Mr McDonnell QC giving some advice about the ability to effect a sale of Mr Singh’s shareholdings prior to judgment, Mr Slade was emailing Mr Abbhi in connection with a possible sale of both Mr Singh’s and his wife’s broadly equivalent shareholdings in EGL to Seema. A detailed email of 16 January 2014 from Mr Slade to Mr Abbhi, about the structure of the contemplated sales, began with the first step being: “[Y]ou pay Mr Singh sufficient to clear the remaining legal fees, i.e approximately £650,000, which he then pays. That crystallises a total sum loaned to Mr Singh of £1,340,000.”

A further email from Mr Slade to Mr McDonnell QC of 21 January 2014, written in the light of a conversation between Mr Slade and Mr Abbhi that day, foreshadowed what in fact happened which was that only Mr Singh’s shareholdings (and not his wife’s also) were sold to Seema. Mr Slade recognised that the transaction “would not produce any free funds to pay the legal team, because the loan as it stands at the moment and the price for the shares are about the same”. He went on: “Deepak’s proposal, at the moment, is that (a) if we win, the legal team is paid by Jasminder; (b) if we lose, the legal team is paid by a second transaction in relation to Mrs Singh’s shares, carried out in about April”. Despite that summary of the proposal, as it then stood, there were further communications about a sale of both Mr and Mrs Singh’s shareholdings.

These included Mr McDonnell QC sending to Seema and Mr Abbhi a draft of a letter for Seema to send to her parents explaining the proposed transaction (which he had discussed with Mr Slade). By an email of 19 February 2014 explaining the draft he said this (I understand that Rachel was a pupil barrister in his chambers who had attended the trial):

“Rachel has just pointed out (which I should have thought of myself) that it would be preferable in terms of risk to Jasminder trying to bankrupt Dad if we lose for Mum to keep her Shares for the time being and for Dad to use the £500,000 which he is supposed to have in an off-shore account. That was constantly referred to during the Trial, but I am not clear whether it actually exists: Rachel believes that it does.”

That reference to monies which were presumed to be held by Mr Singh in an offshore account acquired significance. It appears from an email which Mr Slade sent to Mr McDonnell on 23 March, that Mr Abbhi had proposed splitting the £500,000 so that half went to Mr Slade and the other half went into an account in Mrs Singh’s sole name. The £250,000 available to Mr Singh is the same sum that Mr Abbhi’s Defence states (as I address below) Mr Slade was aware of when they met at the hotel in July 2013.

What ultimately happened (Mr Abbhi having taken further advice from Dentons in connection with the proposed arrangements involving shares sales by both Mr and Mrs Singh) is that in late April 2014 Mr Singh (only) transferred his shares to Seema. For the purposes of that transaction their value was fixed at £949,132.75. In circumstances where Mr Abbhi and Seema had already advanced sums in the total sterling equivalent of £810,640.50, that meant that a further £138,492.25 needed to be paid against the value of the shares (which, once added to the earlier advances, was duly written off in consideration of the price of them). That balancing payment found its way to Mr Slade and reduced his outstanding fees, so that the position (in the light of the share price) was not quite as gloomy as his email of 21 January to Mr McDonnell had predicted. As to the £250,000 (Mr Singh’s share of the offshore monies) the sum of £249,960 was received by Mr Slade in late April 2014 and credited to Mr Singh’s outstanding fees.

The net effect of the further payments to Mr Slade, after he had been retained, was that Mr Abbhi funded a further £185,000 of Mr Slade’s fees in the manner contemplated by the agreement alleged in the Particulars of Claim. He made advances to Mr Singh (for onward receipt by Mr Slade) which led to payments of £20,000 in August 2013, £25,000 on 8 November, £60,000 on 15 November, £30,000 on 29 November 2013, £25,000 on 9 December 2013 and £25,000 in March 2014. Mr Singh, using his share of the offshore monies and the £138,492 balance of the purchase price paid by Seema for his shares, had paid about £388,500. Mr Abbhi says that (by a payment of $230,350 in late April 2014) he also funded that final payment for his wife’s purchase of her father’s shares but, although the point is of no significance to the quantum of Mr Slade’s claim when Mr Slade is not suggesting the corresponding Sterling sum falls to be ignored, the £138,492.25 was, as a matter of analysis, made by Mr Singh out of monies truly belonging to him in the sense there was no obligation to repay Mr Abbhi. Mr Singh’s sale of his shares to Seema had supplanted the arrangement for borrowing from Mr Abbhi against the security of them. The net effect of all the receipts by Mr Slade through Mr Singh was that, by the end of 2015, by which time his client had applied for permission to appeal to the Court of Appeal, which had been unsuccessful on paper and when later renewed orally, the outstanding balance of fees claimed by Mr Slade was £317,823.63.

Nothing had been paid by Mr Abbhi towards the fees (certainly not in the form of an advance under the Loan Agreement with Mr Singh) since the payment of £25,000 in March 2014, not long before the handing down of the unfavourable judgment. After Mr Singh had lost the Action, Mr Slade reported to Mr McDonnell QC by an email dated 19 April 2014 to say that he had spoken to Mr Abbhi who said he was not prepared to pay anything further, that he should not have become involved in the litigation at all and that he now regretted it.

These being the circumstances in which Mr Slade finds himself, the question arises as to whether he is able to recover the outstanding balance from Mr Abbhi.

I have summarised the parties’ respective pleaded cases in relation to the alleged oral agreement of 11 July 2013 in paragraphs 5 and 9 and 10 above.

It is common ground that the meeting at the Capital Hotel that day was a short meeting, of around 40 to 50 minutes, as Mr Slade was running late in a taxi caught in London traffic and did not arrive at the intended start time of 11 a.m; and Mr Abbhi and Seema had to leave for the airport so the meeting had to be concluded by midday. Their suitcases were packed and in the hotel lobby and they had arranged to leave at 12.10 p.m..

In his witness statement Mr Slade said this of the meeting:

“8.

They were certainly well-informed about the status of the case, which we discussed briefly. Mr Abbhi was keen to ascertain how much work would be required and to stress that I should provide him with an estimate as soon as I was able. They professed themselves perfectly satisfied with my credentials, Mr McDonnell’s recommendation being the only important matter. Mr Abbhi explained that while my contract of retainer would be with Mr Singh, his father-in-law had no liquid assets and so he, Mr Abbhi, would be responsible for paying my bills. To protect him from an application for costs in the event of an unsuccessful outcome, the money would be routed through Mr Singh’s bank account, cheques drawn on which and signed by Mr Singh would be delivered to me by hand.

“9.

I told Mr Abbhi that I would be prepared to act for Mr Singh in the proceedings only on this basis. I would never have done so otherwise, given that Mr Abbhi had made it clear to me that Mr Singh did not himself have the funds to pay my firm’s fees.”

Against that, Mr Abbhi’s witness statement said (addressing paragraph 7 of the Particulars of Claim):

“41.

There is no truth in these allegations – save only that I did provide Mr Slade with a copy of the Loan Agreement by email, albeit on 15 July rather than 16 July 2013 (although the difference in dates may be accounted for by an international time difference).

42.

I am quite sure that had Mr Slade suggested I should pay Mr Singh’s legal fees I would remember it since I would have rejected any such proposal out of hand. I had gone to some lengths to document a formal loan agreement and had been advised that provided I was simply a lender of money to Mr Singh I would not be at risk of becoming liable in costs to Jasminder should Mr Singh lose his case. Accordingly, I had every reason to remain at arm’s length from the litigation.

43.

Furthermore, there is no truth in the allegation that I made some commitment to Mr Slade to lend money to Mr Singh. I cannot remember exactly what was said about my loan agreement, but we certainly discussed it, and I clearly mentioned that there was a written agreement because shortly after the meeting Mr Slade asked me to provide him with a copy of it. I am quite sure that I did not make any commitment to Mr Slade of the kind he alleges. I had no reason to do so. I think I would have remembered had he asked me to do so but I do not recall any discussion.”

Mr Robins, in his cross-examination of Mr Slade, sought to suggest that there was a discrepancy between how he expressed himself in his witness statement – that Mr Abbhi would be responsible for paying his bills and that payments would be routed through Mr Singh’s bank account – and the reference in paragraph 7 of the Particulars of Claim to the Loan Agreement. Mr Slade did not accept the criticism and the implicit suggestion that his evidence was therefore unreliable. As part of his answers on the point he said:

“My evidence is the total of what you see here” [by which he meant the Particulars of Claim and his witness statement]. “Perhaps I can help by putting it this way: I do not believe that I had actually seen the loan agreement at the time of my meeting with Mr Abbhi and his wife, Seema, but I had been told of its existence, both by Mr McDonnell and by Mr Abbhi himself.”

On the basis that the Loan Agreement was discussed but only sent by Mr Abbhi to Mr Slade after the meeting once Mr Abbhi had returned to the United States, over which there is no issue, I see no disturbing inconsistency between the two ways in which the agreement is expressed or in the refinement made in the pleading.

On Mr Abbhi’s account of the meeting, at least that given in his witness statement and his Defence, he made no commitment of any kind to Mr Slade. His witness statement says “there is no truth in the allegation that I made some commitment to lend money to Mr Singh”. When Mr Slade received a copy of the Loan Agreement the next day he would have seen that was the position as between Mr Abbhi and Mr Singh and that the making of any “Further Loans” was entirely within the discretion of Mr Abbhi. In response to paragraph 7 of the Particulars of Claim, Mr Abbhi’s Defence, at paragraph 37, says that Mr Singh was solely liable for Mr Slade’s fees and that Mr Slade was “aware that that Mr Singh had disposable resources of at least £250,000 which he was prepared to commit to the Action” (a point also made at paragraph 19).

I return below to how Mr Abbhi came to modify his position in the witness box.

As I have observed, the outcome of these proceedings turns on my assessment of the credibility of the evidence given by him and Mr Abbhi, recognising that Mr Abbhi’s fall-back position carries with it the issue under the Statute of Frauds.

My assessment of their testimony must be made in the context of their pleaded cases and the contemporaneous correspondence between them. In his Skeleton Argument and oral closing, Mr Robins rightly reminded me of the approach to be adopted in cases such as this where there is a conflict of oral testimony over conversations or events which took place some years ago and where, in essence, the probative value of contemporaneous documents is likely to be greater than that of witnesses attempting to give their recollection of events in the face of a fading or even lost memory. Mr Robins relied upon the decision of Lord Goff in Grace Shipping v Sharp & Co [1987] 1 Lloyd’s Rep 207-215 and the more recent statement by Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Limited EWHC [2013] EWHC 3560 (Comm) where he said:

“the best approach for a judge to adopt in a trial of a commercial case is …. to place little if any reliance at all on witnesses’ recollections of what was said in meetings or conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.”

I find Mr Slade to have been a reliable witness though he was prone to an element of witness-box rationalisation of his position on the facts. However, I must remind myself that a degree of this was perhaps inevitable when he is an experienced litigation solicitor and the topic in question was essentially “contract or no contract?”.

There was one aspect of Mr Slade’s testimony, that I found to be less than satisfactory and that was his protest - against the suggestion that he had done so by the wording of an email of 9 October 2013 in a section headed “Non-Party Costs Order” where he noted Mr Abbhi’s position he was simply making “an unrestricted use loan” - that he had not been “papering the file” to cover the eventuality that Jasminder might come to read it. Whatever pejorative description one might wish to give it, it seems to me that (on his case and indeed on a reading of the Loan Agreement) Mr Slade was there putting out what he himself described as “the party line” which involved not mentioning any separate agreement with Mr Abbhi. In his testimony on this email Mr Slade said “I was simply expressing myself accurately” (which was, as he accepted, not quite correct given the terms of the Loan Agreement in relation to the prescribed purpose of any lending) “but perhaps not going into matters which existed but didn’t need to be referred to”.

I mention this aspect of Mr Slade’s evidence because it was Mr Robins’ submission that “the party line” explanation did not really work in explaining why there was no explicit reference in the contemporaneous documents to the July agreement upon which Mr Slade sues. He submitted that the Loan Agreement and records of payments being made by Mr Abbhi, which found their way into Mr Slade’s account, would be disclosable anyway to Jasminder in the section 51 context, so the absence of any reference in that email to an oral funding agreement (when silence upon it would not guard against what those other documents would in any event reveal) was in fact consistent with the position that there was in fact no such agreement. However, in my judgment, this attributes to Mr Slade a degree of prior analysis of the potential range of section 51 disclosure that he probably did not undertake. Instead, I conclude that he considered it would not be the best starting point for Mr Abbhi, attempting to resist a section 51 application by Jasminder, to have spelled out the oral agreement. As I have remarked, I consider that Mr Slade should have recognised more readily that the aim was to put Jasminder off the scent.

My assessment of Mr Abbhi as a witness leads me to make the following observations:

In my judgment it is also significant that Mr Abbhi did not seek to bolster his account of the meeting on 11 July 2013 with evidence from his wife Seema. Only three people were present at that meeting and it would have assisted the court’s determination of the factual question to have heard from the third. When he was asked why Seema had not been called as a witness in support of his position, Mr Abbhi said: “I do not see why I should”. Had Mr Abbhi’s own testimony been more impressive the lack of (presumed) corroboration of his denial of the oral agreement alleged against him may have been of no significance but the reality is that Mr Kokelaar is able to say with some effect that it can be presumed that Seema’s evidence would not have supported him.

In relation to the above observations upon Mr Abbhi’s testimony I noted his appetite in the witness box for reasoning backwards by reference to what was said or not said in the later contemporaneous documents. This is illustrated by the following passage in his cross-examination. Following on from a question to him from me seeking clarification of his position in relation to informing Mr Slade (at the meeting on 11 July 2013) of his preparedness or even commitment to lend up the value of the shares, which Mr Abbhi just confirmed to me he had made clear to Mr Slade, Mr Kokelaar suggested to him that was not true and that there was an uncapped responsibility for the legal fees. Mr Abbhi denied that was so and added:

“And then further, my Lord, if Mr Slade went with a different impression, that I was going to pay his legal – legal costs of Mr Singh and that I was personally liable, he never put that in writing. He could have sent me an email after the meeting of July 11 stating his understanding. And if it was so important to him, the payment of his legal bills were so important to Mr Slade, then he should have put that in an email. He didn’t because there was no agreement.”

This statement by Mr Abbhi struck the same chord as that which ran through the legal submissions that had been outlined in his counsel’s skeleton argument and, when I heard it and similar observations in his testimony, it caused me to be concerned that his testimony was influenced quite considerably by after-the-event analysis. Of course, it is to be noted that neither did Mr Slade promptly record, in an email or otherwise, the arrangement which even Mr Abbhi (in his testimony if not in his witness statement) said he proposed, namely to lend up to the value of the charged shares.

In relation to my first and second observations (in paragraph 55 above) there were a number of points in his testimony when Mr Abbhi provided a less than convincing explanation for what the contemporaneous documents showed. By way of example, I refer to an email which Mr Abbhi sent to Mr Slade on 6July 2013 proposing the date and time of the hotel meeting during his short visit to London. The email said “[P]erhaps this could be used to expedite the conclusion of our arrangements.” When Mr Kokelaar suggested that the email showed that the purpose of the meeting was to conclude his arrangement with Mr Slade, Mr Abbhi’s response was “[I]t doesn’t say “conclude our arrangements”. To the extent that particular difference may have been noteworthy, focus upon it distracted from the bigger question as to what particular “arrangements” Mr Abbhi had in mind. When I asked him that question his answer was:

“The arrangements I had in mind here was for Mr Slade to arrange to have the retainer agreement signed with Mr Singh. That was the main arrangement. The second arrangement was how he was going to receive his money from Mr Singh.”

As a result of the meeting, and before he had even met Mr Singh, Mr Slade was sufficiently “retained” in the Action to be able to prepare a formal Retainer Agreement dated 19 July 2013 (for Mr Singh’s signature) and to make requests for a handover of the papers from Pillai & Jones. Mr Abbhi had been sent a draft of the Retainer Agreement before the meeting and had indicated in an email of 9 July that there were points in it that he needed to understand. The steps taken by Mr Slade after the meeting were all on the strength of the meeting and of course the key recommendation of him to Seema and Mr Abbhi by Mr McDonnell QC who had put them in touch. After Mr Singh had signed the retainer (but still before he had met his client on 14 August) Mr Slade sent Mr Abbhi a “brief progress report”, by email dated 7 August 2013, explaining what steps he had managed to take and concluding with the topic of “Budget”. Mr Slade told Mr Abbhi that he intended to produce a budget for the period between then and the end of the trial and said “I’ll send a bill and monthly report in the first week of each month and we can compare where we are against budget each month.” After he had met Mr Singh on 14 August, Mr Slade sent another progress report to Mr Abbhi reporting on further developments and saying that Mr Singh “does not want his partitioned share all for himself, but to share with his family.”

I mention those communications at the early stage of Mr Slade’s involvement because the trial bundle was replete with further communications informing Mr Abbhi about the progress of the Action. They include not only those relating to funding, upon which Mr Robins relies in saying that Mr Slade has changed his tune as to when he reached an agreement with Mr Abbhi, but also his inclusion in emails sent within the legal team relating to inter-partes offers and developments at trial. In cross-examination Mr Abbhi accepted that he received transcripts of the trial and copies of the parties’ closing submissions. He said he that he needed the transcripts because Mr Singh was not able to read and he needed to apprise him of what was going on, though he also said it he was personally interested to see what was going on as “I was involved in the sense that I was funding the case and Seema was involved because she is helping her parents from an emotional standpoint and therefore this was a relevant set of information”.

Overall, the contemporaneous documents do not lie happily with the denial in the Defence that Mr Abbhi and Seema were closely involved in all stages of the Action. Nor are they consistent with Mr Abbhi’s contention that his lending was first and foremost a business transaction (allowing for the element of personal favour which I have noted above) under which he ought to have had no concerns beyond the security he held over Mr Singh’s undisputed shareholding in EGL.

As for my second observation upon Mr Abbhi’s evidence, on a number of occasions Mr Abbhi made the point that if Jasminder had wanted to make a section 51 application he would have done so by now. On the second occasion I asked him whether he still felt at risk of an application four years on. He answered: “I am not sure, my Lord, if there is any statute of limitations on this. That is the only way to be sure about, otherwise it is open. But the fact that they have not done anything in more than four years is a good indication that they have not found anything inappropriate or they have not found me to be liable for costs.” Mr Abbhi went on to say that he was not aware that a representative of Orrick had been present at a directions hearing in this matter on 8 December 2017 before HH Judge Waksman QC and he pointed out that no such representative was present at the current trial. Nevertheless, it is obvious from his mention of the point that he was mindful of the risk.

Of course, awareness of wider potential implications of losing a case, in terms of consequential exposure to third party creditors or claims, is not usually in itself a reason to doubt the basis upon which it is being defended. But in this case the grounds of Mr Abbhi’s defence have a direct connection with those that might create the third party claim. That Mr Abbhi was still mindful of the section 51 exposure reinforces my concern based upon the other two observations upon his evidence and what may have been his motivation behind it.

This brings me to the third of them which goes to the heart of the factual question I have to decide.

Mr Abbhi’s statement which I have quoted in paragraph 45 above was also echoed a number of times by him questioning why Mr Slade should have wanted to act for Mr Singh in the absence of a documented agreement with himself. By his own rhetoric, in my judgment, Mr Abbhi begins to provide the answer to the case against him. I find it implausible that Mr Slade should have wished to attend the single-entrant beauty parade at the Capital Hotel for the prize of acting in burdensome and costly litigation with nothing more than a hope that he might, but only if Mr Abbhi so chose to exercise his discretion under the Loan Agreement, get paid something for his efforts. It may be that Mr Abbhi himself reflected upon the inherent unlikelihood of such an arrangement from Mr Slade’s perspective, who of course also had the payment of the fees of counsel already retained in the case to safeguard. I say that because Mr Abbhi’s evidence in the witness box produced a more expansive and markedly different account of the July meeting than that set out in his Defence and witness statement.

I have already explained how Mr Abbhi’s Defence and witness statement contain a denial that he reached any agreement with Mr Slade on 11 July 2013 that involved a commitment on his part to provide any funding of the Action. His position was that he had no obligation beyond the Loan Agreement which (despite the supporting security and whatever value that may have had) of course contained no commitment at all to lend further.

However, in his testimony - which had previously sought to emphasise how the hotel meeting was a brief one with much of it taken up with introductory pleasantries so there was no time for a “big oral agreement” - he explained that he had indicated a willingness to provide loans against the value of his security over the EGL shares. Initially Mr Abbhi expressed himself in negative terms, saying “I gave him no assurance that I would pay him one penny outside of the 2012 loan agreement”, by which he meant the value of the shares. When asked questions about any implicit or explicit assurance to lend up to their value, Mr Abbhi confirmed to me that he had made it clear to Mr Slade at the meeting that he would lend up to their value.

That confirmation inevitably provoked questions as to whether or not the value of the shares was discussed at the meeting. The relevant exchange (which involved something of a backtrack on the answer he had just given about clarifying to Mr Slade the limit of his commitment) was as follows:

“A.

I made Mr Slade aware of the mortgage on the shares and he was – because that was part of the loan agreement as well. There was a mortgage over the shares. He was aware of that and I told him as well that this is the maximum amount that I would be lending, if I would even go to that extent, because I do have a clause of further loans at my discretion.

Judge: So when you say, “I told him this was the maximum amount”, what was “this”?

A.

That was the value of the shares, which was at that point around roughly, I would say, £800,000 to £1 million, according to the books – the public records of Edwardian Hotels.”

Allowing for the fact that Mr Abbhi’s later answer contained a reminder of the discretion he had in relation to further lending, these answers represented a significant shift in his account of the meeting. So much so that Mr Slade had not been cross-examined by reference to how Mr Abbhi was now putting it. Mr Robins had cross-examined Mr Slade on the basis that there was a basic inconsistency between an oral agreement which bound Mr Abbhi to make further loans as a matter of obligation and the discretionary language of the Loan Agreement. Until Mr Abbhi gave his evidence there was no question of him having made a commitment to lend up to a certain value, or range of values, but no more.

It follows that there was no cross-examination of Mr Slade upon the point which he would presumably have been most anxious to establish if Mr Abbhi’s account was correct, namely his (Mr Slade’s) inquiry into what the mortgaged shares were worth. Only by establishing what the shares were worth or likely to be worth would Mr Slade have been able to establish what (on Mr Abbhi’s account in the witness box) the remaining headroom for further lending was under the Loan Agreement. Mr Slade says he was aware of the mortgage of the shares (even though it was only the Loan Agreement, which makes no mention of the security, that was sent to him the day after the meeting) but the contemporaneous documents do not contain any indication that he had any knowledge of the likely value of the shares until 10 December 2013. On that day Mr Abbhi sent him an email indicating a possible value of $1,123,200 but that email was written 5 months after the hotel meeting and as the subject matter of the email indicates (“EHL Shares”) it was written in connection with the proposal of a share purchase which had arisen as an alternative to Mr Abbhi lending to Mr Singh against his security.

Then there is the question of whether or not Mr Slade knew at the meeting in July 2013 that Mr Singh himself had some monies available in a Channel Islands bank account (being one half of a sum held with his wife), the significance of that being that Mr Slade would presumably have been more relaxed about an arrangement with Mr Abbhi that saw Mr Abbhi’s commitment fixed at the value of the secured shareholdings. Like the realisable value of the shares, the £250,000 came to feature in the proposals made after judgment in the Action as to how some of Mr Slade’s fees might be paid. At first sight, and a fair reading of the email from Mr McDonnell QC of 19 February 2014, it would seem unlikely that Mr Slade would have known of this available sum back in July 2013. Answers from Mr Abbhi in the witness box were less than confident on this point made by him in paragraphs 19 and 37 of his Defence. He said that Mr Slade was aware, though he lacked written proof of that awareness, because “Mr BM Singh was very open about the money he had” (though it must be noted that Mr Slade did not meet Mr Singh until 14 August 2013 and Mr Slade’s account of that meeting does not extend to any discussion of offshore monies). Mr Abbhi said it may have been discussed at the hotel meeting but “I do not recall if that particular point came up” as it was a very short meeting and, overall, his answers appeared to point to Mr Slade probably having no awareness that the sum did or might exist until November 2013, presumably when it was mentioned at the trial. Further answers from Mr Abbhi in relation to the £250,000 indicated to me that, after the July meeting, he came to factor into his own thoughts how the sum might be used to reduce the amount he would have to produce against the then budgeted costs.

My conclusion, reached in the light of the three general observations above, is that Mr Abbhi was not a reliable witness. I cannot accept his revised version of the meeting which Mr Slade did not have the opportunity to comment upon but which presumably would have seen him, Mr Slade, taking immediate steps in 2013 to establish what the secured shares might be worth or, perhaps more importantly, what Mr Abbhi thought them to be worth. From that exercise, if the need for it had been prompted by their discussions, I would have thought it would have been but a short step for them to fix upon an actual figure to cap Mr Abbhi’s total funding if, indeed, further funding was to be capped.

It is because, as things turned out, Mr Slade received the sum of £138,492 which represented the further funds produced on the sale of the secured shares to Seema and also all but a few pounds of the £250,000 mentioned in the correspondence for the first time in Mr McDonnell’s email of 19 February 2014, that I conclude Mr Abbhi has convinced himself that the original arrangement between himself and Mr Slade was one intended to have that effect. And further, if the court shared this view about the agreement, capping Mr Abbhi’s financial commitment to the Action at a sum which could be reconciled with the combined effect of the Loan Agreement and Mortgage of Shares, then that should mean that the risk of a belated third party costs application being made against him by Jasminder is no greater now than it was in 2014.

The significant gloss upon Mr Abbhi’s account of the meeting on 11 July 2013, applied for the first time from the witness box, was the product of him reasoning backwards by reference to the later developments and documentation. It was not in my judgment a reliable account of what was actually discussed.

In all the circumstances I prefer Mr Slade’s account of the hotel meeting.

In reaching that conclusion I have firmly in mind Mr Robins’ submission about the importance of contemporaneous documents where there is a clash of testimony over oral discussions and also the need for Mr Slade to prove his case.

In his closing submissions Mr Robins said that there were 20 key contemporaneous documents which pointed to the conclusion that it was more likely than not that the 11 July oral agreement did not exist than it did.

I have given anxious consideration to one particular document amongst those 20 which is an email which Mr Slade wrote to Mr McDonnell QC at 02:12 on 22 January 2014 (copying Mr Burkitt and their Senior Clerk, Mr Justin Brown). That email was part of the string headed “EHL Shares” which, it appears, had begun life on 10 December 2013. By that email Mr Slade said this:

“Further to my previous email” – that was the one dated 21 January which I have mentioned in paragraph 35 above – “it is, of course, a feature of these arrangements that Mr Singh (the client and only person legally liable to pay) disposes of his shares (his only asset) to repay Deepak with the result that if Jasminder does not buy them from Seema and the case is lost, the legal team is then entirely dependant for payment on Deepak, Seema and Mr Singh’s goodwill (none of them having any legal liability to pay). So if we structure the share transfer as Deepak has asked, we would need to include in the papers for signature (possibly before anything else was signed) a guarantee by Mrs Singh and a charge over her shares – unless there’s something else you can think of. Let’s discuss this aspect of the matter tomorrow.”

Mr Robins submitted that this was an unguarded email which confirmed that only Mr Singh had a legal liability and Mr Abbhi had no such liability.

When Mr Slade was cross-examined about this email I had expected him to focus upon the reference to “these arrangements”, those being the arrangements described in his email written that night only a few hours before (at 11 pm). That earlier email of 21 January 2014 had contemplated not that Mr Abbhi would advance monies to Mr Singh under the Loan Agreement for onward receipt by Mr Slade but, instead, that Mr Singh would receive payment for his shares and “repay the loan and redeem the charge”. On that basis, I could begin to see the basis for Mr Abbhi suggesting (but only on the basis that he recognised a pre-existing obligation to advance monies under a separate oral agreement with Mr Slade) that, once implemented, the new arrangement superseded and displaced the prior oral agreement and any liability of his under it. Assuming Mr Slade accepted that to be the consequence, one might begin to see the basis for his expression of concern in the later email about nobody but Mr Singh having a legal liability to pay (as well as the inclusion of Seema and Mrs Singh alongside Mr Abbhi, as potential extenders of goodwill, when there was of course no question of them being under a pre-existing obligation to Mr Slade). Indeed, it is clear that quite soon after the 22 January email Mr Slade had asked Mr Abbhi to sign a guarantee or promissory note in relation to Mr Singh’s fees but without success (as appears from another of the contemporaneous documents upon which Mr Robins relies, an email from Mr Slade to Mr McDonnell of 3 February 2015).

Mr Slade’s answers in the witness box in relation to the 22 January email were a little different from what I had been expecting in that he said he had not been writing to set out the legal position but instead to share with the legal team a concern which had come into his mind (evidently in the small hours of the morning) which “funnily enough, what might happen was what in fact happened to a certain extent” and that was “on the documents – not the correspondence, but the documents in the case; the loan agreement and the retainer agreement and so on – we could face a situation where it was said against us that Mr Singh was the only person liable to pay.” He said it did not need to be said to the legal team that Mr Abbhi had a liability under the oral agreement because “everybody knew that to be the case and it did not need to be said.”

However, in continuing that last answer, Mr Slade went on to say something in more general terms which does resonate with a reading of the email in its context and the arrangements under discussion. He said: “I was pointing up the concern that I had at that time that a state of affairs had been created, and by discussing the matter with Mr Abbhi as we were, we were perpetuating that state of affairs which was contrary to our own interests when it came to getting paid.”

In my judgment, Mr Slade’s explanation of the 22 January email was a credible and reasonable one in circumstances where he candidly recognised “it may not have been terribly well expressed”.

Of course, as I have already noted, “the arrangements” contemplated by the 21 January and 22 January emails were implemented (producing some but still not enough “free funds” to pay all of Mr Singh’s legal bills) but it forms no part of Mr Abbhi’s defence that the effect was to release him from a prior liability for the simple reason that he does not accept he had one. Instead, as I have also noted, Mr Abbhi’s position has, though his testimony, become one where the original arrangement with Mr Slade was one under which it was expressly made clear that his lending would not go above the value of the shares.

So far as the weight of the other contemporaneous documents highlighted by Mr Robins is concerned, in my judgment they count against Mr Abbhi rather than for him.

For example, Mr Robins placed much emphasis upon the emails passing between Mr Slade and Mr Abbhi in late October and early November 2013 in which Mr Abbhi had said the most he was prepared to lend at that time was £100,000. But it is necessary to stand back and consider the circumstances in which Mr Slade considered it appropriate to initiate those exchanges by his email of 24 October 2013 which (in the context of then estimated total fees of £520,000) asked Mr Abbhi for an advance of £350,000 followed by three weekly instalments of £55,000. And, even more tellingly, why Mr Abbhi would have responded with his email on 29 October saying he could only send £100,000 the following week and “the balance” would be sent in February.

Later, by an email of 15 January 2014 written to Mr Abbhi in the context of the proposed share sale, Mr Slade felt able to begin the suggested sequence of events with “You pay to Mr Singh sufficient to clear the remaining legal fees, i.e. approximately £650,000, which he then pays” and, prior to the unfavourable judgment, this met with no adverse reaction from Mr Abbhi.

That suggestion in January 2014 found reflection in the draft of the letter for Seema to send to her parents which Mr McDonnell QC sent to her and Mr Abbhi a month later: “Dad owes Richard Slade & Co another £642,340.91 (including VAT) …….. Deepak is proposing to advance the money which Dad needs to pay Richard Slade now and that will bring Dad’s debt to Deepak and me up to £794,726.13 + 642,340.91 = £1,437,067.04”. Although changes were made to that letter before it was given to the parents (to Mr McDonnell’s embarrassment in circumstances where it seems the changes had been made without his knowledge, and despite contrary assurance from Seema, and the parents had signed stock transfer forms on the basis of the revised version) it is noteworthy that the revised version stated that “Deepak is proposing to advance £375,000 of the money which Dad needs to pay Richard Slade and Pillai & Jones now: he will do so after the shares have been registered in my name”. It is not easy to reconcile even the revised version with the position now adopted by Mr Abbhi in this case. I note that the explanation he gave to Mr McDonnell for changing the amount of the proposed advance from £642,340 to £375,000 was the need to hold monies back so that the parents could meet a Capital Gains Tax liability on the sale. The “net of CGT” approach to valuing Mr Singh’s shares, for the purposes of determining Mr Abbhi’s funding limit, formed no part of his explanation of the arrangement he says he reached with Mr Slade.

In my judgment, overall, the approach urged in Gestmin SGPS v Credit Suisse reinforces my conclusion that Mr Slade agreed to act for and incur very significant fees on behalf of Mr Singh on the basis of the agreement with Mr Abbhi alleged in the Particulars of Claim.

On the basis that I prefer Mr Slade’s evidence that an oral agreement was reached on 11 July 2013 the question arises as to what kind of agreement was it.

I have mentioned above (in paragraph 46) Mr Slade’s response to the questions which suggested his account of the 11 July 2013 meeting was unreliable. In that section of his testimony he went on to say:

“The agreement that was made was this: Mr Singh, Mr Abbhi and Seema wanted me to act as Mr Singh’s solicitor for the purposes of the forthcoming trial. I am reducing this to a series of propositions if you like. That is proposition number one. Number two: Mr Singh couldn’t pay. Number three: Mr Abbhi said he would pay. Number four: Mr Abbhi said that there was a slight complication in that he did not want to pay me directly because he considered, on the basis of previous advice, that that might expose him more than necessarily [sic] to an application under section 51 by Jasminder, and so the precise way in which he would pay me would be by providing his funds so that Mr Singh could write a cheque and deliver it to me.”

I accept Mr Slade’s evidence and that his four propositions neatly encapsulate the nature of the agreement reached between Mr Slade and Mr Abbhi.

Moreover, his propositions one and two make it clear that this was not an agreement in the nature of a guarantee but, as pleaded, a funding agreement. There was no question of Mr Abbhi’s obligation to pay being contingent upon prior default by Mr Singh. The whole agreement was premised upon Mr Singh not being able to pay from the outset. Compliance with the agreement by Mr Abbhi would have forestalled any question of default by Mr Singh (about whose inability to pay there was no sense of contingency) and that shows that Mr Abbhi’s obligation was a primary one and not that of a surety. The monies that were to be paid by Mr Slade’s client, Mr Singh, in accordance with the firm’s retainer were always intended to come from Mr Abbhi because Mr Singh did not have them.

It is noteworthy that the oral agreement between Mr Slade and Mr Abbhi was reached in circumstances where the Loan Agreement was already in place, no further contractual input was required from Mr Singh and Mr Slade had yet either to meet or speak to Mr Singh or obtain his formal signature to the Retainer Agreement. These are also clear indications that the agreement between Mr Slade and Mr Abbhi, only, did not involve a collateral liability on Mr Abbhi’s part but a primary one.

On the face of the contractual documentation Mr Slade could have sued Mr Singh for his fees and Mr Singh had a liability to Mr Abbhi (under the Loan Agreement) even if they were paid. But I do not regard these matters as impediments to the existence of a separate, oral funding agreement between Mr Slade and Mr Abbhi which, if complied with, would have averted the first scenario. Nor do I consider that, by entering into that agreement in July 2013 in circumstances where Mr Abbhi and Mr Singh had already made their own bilateral Loan Agreement the previous year, the contractual analysis necessarily becomes one of a tri-partite arrangement of creditor, debtor and surety. That analysis would probably see the surety (Mr Abbhi) resisting liability to pay by reference to the discretionary language of the Loan Agreement or, if Mr Abbhi did pay Mr Slade, Mr Singh (the principal debtor) then arguing that no right of indemnity arose against him until six months after the Action had been determined. But the earlier, two party Loan Agreement cannot be shoehorned into a later suggested creditor, principal debtor and surety relationship so that it might in either of those ways regulate Mr Abbhi’s right to be indemnified by Mr Singh in the event that Mr Abbhi paid his fees. Its terms had no impact upon the agreement between Mr Slade and Mr Abbhi beyond prescribing the conduit for (but not any fixed cap upon) the latter’s funding.

I have considered the point that, under those terms of retainer signed by Mr Singh, it was he and not Mr Abbhi who was the client and he, therefore, who was the contractual debtor in respect of fees and disbursements falling due for payment. This point was relied upon quite heavily by Mr Robins and his client. There is no mention of Mr Abbhi within those terms. I am also conscious that under the terms of the retainer letter and enclosed standard terms the payment to the firm was due upon delivery of a bill, with provision for interest in the event of non-payment, and it is no part of Mr Slade’s case that the timing of payments by Mr Abbhi (to Mr Singh for remitting onwards to the firm) would depart from those. Mr Slade does not allege that the funding would be “up-front” as opposed to responsive to monthly bills delivered to his client.

Mr Robins made a forceful submission that, in these circumstances, any agreement between Mr Slade and Mr Abbhi had to be one of guarantee.

Of course, Mr Abbhi did not keep to the agreement that I have found he concluded with Mr Slade so there was default by Mr Singh in the payment of the bills rendered to him. During the course of his cross-examination Mr Slade recognised that the effect of his agreement with Mr Abbhi (with payments routed through Mr Singh and being responsive to monthly bills) was such that he was taking on the credit risk of one month’s worth of work and disbursements; and, of course, that in the event significantly greater credit was extended to Mr Singh.

Nevertheless, in my judgment the terms of the retainer, and the one month credit to the client for which they provided, do not detract from the analysis that this was a funding arrangement rather than a guarantee. Whether or not Mr Abbhi assumed primary liability to fund the Action does not hinge upon the difference between the funding being up-front and on account or, as here, in response to quantification by client bills. In the present case, the concern that had been raised about potential section 51 exposure to Jasminder, even before Mr Slade was introduced to the case, meant that the latter (with the arrangement between Mr Abbhi and Mr Singh being one of loan) was the way to proceed.

Mr Kokelaar cited Guild & Co v Conrad [1894] 2 QB 885 where the plaintiff sued on oral undertakings given by the defendant that he would provide funds to meet bills drawn on his son’s overdrawn account which the plaintiff was otherwise unwilling to accept. The undertaking had in fact been given in circumstances where a formal guarantee had previously been given by the defendant in respect of credit previously extended by the plaintiff up to the overdraft limit. The trial judge held that the oral undertakings were not within section 4 of the Statute of Frauds and the Court of Appeal agreed. Lindley LJ said (at p. 892) that the nature of the promise is all important and that “if it was a promise to put the plaintiff in funds in any event, then it is not such a promise as is within the Statute of Frauds.” Here Mr Abbhi agreed to put Mr Slade in funds in any event, in circumstances in which both of them knew that Mr Singh could not pay (and, as I find and whether or not Mr Abbhi knew otherwise, Mr Slade was unaware of the £250,000 at the date of their agreement).

For all these reasons I conclude that Mr Abbhi’s obligation under his agreement with Mr Slade to provide the funds was a primary one and not in any sense secondary and dependent upon Mr Singh’s failure to pay. The agreement was therefore not in the nature of a guarantee: see Vossloh Aktiengesellschaft v Alpha Trains (UK) Limited [2010] EWHC 2443 (Ch), [23]-[26] per Sir William Blackburne.

It follows that, in my judgment, section 4 of the Statute of Frauds has no application to this case.

Had my conclusion been otherwise then I would not have found the requirements of the section satisfied and Mr Abbhi would have therefore benefited from the statutory purpose which (as Mr Robins reminded me of it) is to prevent persons being held liable as guarantors by evidence of loose talk, when they never intended to assume such a liability, and about which there is a risk of false evidence being given.

Section 4 provides that:

“[N]o action shall be brought ….. whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriages or another person ….. unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised.”

The express (“special”) promise must therefore be in the form of a written agreement or, if oral, evidenced by a note or memorandum signed by the guarantor or his agent.

It was not disputed by Mr Robins that the memorandum can take the form of a chain of emails signed electronically by a guarantor using only his first name: see Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265, [21] and [24] per Tomlinson LJ.

Mr Kokelaar relied upon two particular emails, namely Mr Slade’s of 24 October and Mr Abbhi’s of 29 October 2013 mentioned above. The question is whether or not together they constitute the note or memorandum of the promise which satisfies the section.

Recognising (allowing for what Tomlinson LJ said at his paragraph [24] about the respective formal requirements of each of the two limbs of the section) that the primary and probably more formal method of satisfying the section - a written agreement signed at least by or on behalf of the guarantor - should set out comprehensively the terms of “the agreement” of guarantee, no matter how elementary or complex those terms might be, it is clear from the language of the section that something less compendious may suffice for the alternative of a “note” or “memorandum” of a guarantee agreed orally.

Nevertheless, it is clear from the authorities that the note or memorandum must evidence all the material terms of the contract: see Andrews & Millett on the Law of Guarantees (7^th ed) para. 3-023 where the authors explain that it must sufficiently identify the principal whose obligation to the creditor is the subject matter of the guarantee. If the principal is not identified then the essential secondary liability of the guarantee may be uncertain and the parol evidence rule may preclude evidence being adduced to cure the uncertainty.

In Golden Ocean Group v Salgaocar Mining Industries, at [24] Tomlinson LJ had said that “if the memorandum or note does not contain all the terms of the guarantee it must contain some reference, express or implied, to some other document or transaction.” He had referred in the same paragraph to Tiverton Estates Limited v Wearwell Ltd [1975] Ch 146 upon which Mr Robins had relied in his closing submissions and (in the same paragraph) said it is authority for the proposition that a memorandum or note must, if it is to be effective, “not only state the terms of the contract but also contain an acknowledgment or recognition by the signatory to the document that a contract had been entered into.”

That proposition does indeed emerge from Tiverton Estates v Wearwell. The Court of Appeal was there addressing the requirements of section 40 of the Law of Property Act 1925 but the language of that section, then regulating the enforceability of contracts for the sale of land or an interest in it, was materially identical to section 4 on the present issue of writing. Mr Robins drew a parallel with what Lord Denning MR had said, at 161F, about a further shortcoming in the draft contract unsuccessfully relied upon in that case as a sufficient note or memorandum: that it did not contain any mention of the term about giving vacant possession of certain parts of the property, as sworn to by the plaintiff’s witness. Mr Robins said that not only do the emails relied upon by Mr Slade contain no recognition that a prior agreement exists but they also omit any mention of that which is pleaded at paragraph 7(b) of the Particulars of Claim.

By his competing submission, Mr Kokelaar said that those pleaded terms were very simple and that Mr Abbhi’s email of 29 October 2013, when read in the light of Mr Slade’s of 24 October, contains an implied recognition of them.

In my judgment those emails do not satisfy the fairly clear requirements of section 4 as those have been explained in the authorities. Their shortcomings in that respect are illustrated by the simple observation that when read together, and in isolation from the evidence of the events giving rise to them, they no more indicate a contract of guarantee (the hypothesis behind this aspect of my judgment) than a vague assurance by Mr Abbhi that he might advance monies towards Mr Singh’s costs (a version of events I have rejected in the light of the evidence as a whole).

I therefore find that Mr Slade has established the oral agreement alleged in paragraph 7 of the Particulars of Claim.

There remains, however, the question of the value of his claim under it. There are two aspects to that question: (1) the debt or damages recoverable from Mr Abbhi in respect of his broken promise to fund when the amount of funding required of him was to be determined by the monthly bills delivered to Mr Singh; and (2) the claim for interest on the principal sum due.

In relation to the first aspect, at the trial Mr Robins did suggest at one point that Mr Slade had failed to prove his case in circumstances where he had been put to proof of the sums claimed by him and there was no evidence in the form of his firm’s invoices or fee notes of counsel. However, he did not press that point too far and in my judgment he was right not do so when the evidence shows that Mr Abbhi was kept informed during the Action of what Mr Slade claimed to be the amount of Mr Singh’s fee liability and where the Particulars of Claim asserting the recoverability of the principal sum are verified by a statement of truth.

In circumstances where I had made reference to the possibility that, if I held Mr Abbhi liable, the Solicitors Act 1974 might have some relevance in relation to his ability to challenge the quantum of Mr Slade’s bills - recognising, however, that he might encounter problems with the statutory time limits for seeking to have them taxed (however harsh that might be for someone whose liability has only been established by the judgment four years or more after the bills were delivered) – counsel sensibly proposed that, if it arose, the issue of quantum should be addressed at a further hearing.

As to the claim for interest at 8% p.a., and as I have already observed, if Mr Abbhi had complied with the agreement then there would never have been more than a month’s work-in-progress by the firm on Mr Singh’s account to be funded by Mr Abbhi. I do not know the precise arrangements in relation to the firm’s payment of counsel’s fees but the documents in the trial bundle indicate, as one might expect, that the firm would not have paid them before it was in funds. No doubt because the intention was that the funds would be forthcoming on a regular basis and in response to the delivery of monthly bills, there is no suggestion by Mr Slade that he discussed the question of interest with Mr Abbhi.

In these circumstances, it is not presently clear to me that Mr Slade has any basis for claiming interest otherwise than under section 35 of the Senior Courts Act 1981. However, as with any argument over the principal sum recoverable by Mr Slade, the question of interest is best addressed by further argument (if necessary) at a further hearing.

I therefore give judgment in favour of Mr Slade with damages and any interest thereon to be assessed following a further hearing.