Manoj Saluja & Anor v Vyman Solicitors Ltd

Introduction

This case concerns two claims based essentially on the same facts arising out of loan agreements made in August 2017.

The second claimant, Thamesmere Ltd, lent £742,000 to the first claimant Manoj Saluja (“the Thamesmere loan”). The purpose of this loan was to help Manoj Saluja and Gracechurch fund an onward loan of £1.6 million to Milan Patel, a solicitor, and HBMP Developments Limited (“HBMP”) (“the Gracechurch loan”), for the purposes of a property development.

The defendant acted for Thamesmere in relation to the Thamesmere loan, and Manoj Saluja in respect of the Gracechurch loan. Manoj Saluja claims that the defendant also acted for him in relation to the Thamesmere loan.

The Thamesmere loan was purportedly secured against a property, 18 Hillcroft Crescent, belonging to the parents of Milan Patel, Chetan and Maltiben (“Malti”) Patel. However, when it became clear that the loan would not be repaid and an attempt was made to realise the security in December 2018, Chetan and Malti Patel applied for and were granted an injunction preventing sale.

It transpired that a fraud had been committed by Milan Patel: handwriting analysis established that the security documents had been signed by imposters posing as Milan Patel’s parents. Shital Shah, a solicitor who was a consultant at the firm owned by Milan Patel, had acted as independent solicitor for the third party sureties. He had failed to make the proper checks to establish their identities.

The claimants allege that Vyman was negligent in accepting the use of Shital Shah as independent solicitor, given his close relationship to Milan Patel. They claim that Vyman’s breach of duty caused their respective losses arising out of the failure of the third party security.

The Claims

Manoj Saluja claims that Vyman was acting for him, not only in respect of the Gracechurch loan, but also in respect of the Thamesmere loan.

He claims that Vyman acted in breach of contractual terms and/or in breach of its tortious duty.

He further claims that Vyman acted in breach of their contractual and tortious duties in respect of the litigation following Chetan and Malti Patel’s application for an injunction in relation to the sale of Hillcroft Crescent from December 2018 onwards, and he therefore incurred legal fees and costs in respect of that litigation.

As a result, Manoj Saluja suffered the following losses:

Manoj Saluja therefore claims a total loss of £210,667, plus additional liability for costs arising out of the Chetan and Malti Patel proceedings and interest thereon.

Thamesmere claims that Vyman as its instructed solicitor in respect of the Thamesmere loan acted in breach of contractual terms and/or in breach of its tortious duties.

Thamesmere further claims that Vyman acted in breach of its duty as a trustee, having released money advanced by Thamesmere on the basis of a fraudulent security.

At trial, Thamesmere’s case was that it had suffered the following losses: 

From this sum is deducted the £150,000 recovered from Manoj Saluja in the settlement of its claim against him.

Thamesmere therefore claims a total loss of £642,032.32, plus additional liability for costs arising out of the Chetan and Malti Patel proceedings and interest thereon.

The defendant denies that it was acting for Manoj Saluja in respect of the Thamesmere loan.

The defendant denies that it acted in breach of any duty to Thamesmere or Manoj Saluja, or in breach of trust.

The defendant denies that it was negligent in any way in its dealings in respect of the Thamesmere security.

The defendant denies that it is responsible for any losses suffered by either claimant as a result of the subsequent litigation.

Relevant people

Thamesmere Ltd (“Thamesmere”) is a company incorporated in the British Virgin Islands. At the time of these matters its sole shareholder was Sheikh Mehboob Ahmed, a Pakistani national. Jay Bhogaita acted as its agent under limited authority.

Manoj Saluja is a chartered accountant, property developer and was a director of Gracechurch Ltd. He acquired ownership of the second claimant Thamesmere Ltd in 2023.

Vyman Solicitors Ltd (“Vyman”) is a firm of solicitors. Anup Vyas is its managing director. Kajal Patel is a senior associate solicitor employed by Vyman.

ALD Legal Ltd (“ALD Legal”) was a firm of solicitors incorporated on 12 February 2007. Shital Shah was the original director and shareholder. It ceased trading in December 2017 and was dissolved on 14 December 2020.

Milan Patel was at the relevant time a practising solicitor and sole principal of ALD Legal. He acquired the firm from Shital Shah in 2015, and thereafter employed Shital Shah as a consultant.

Chetan Patel and Maltiben Patel (“Chetan and Malti Patel”) are the parents of Milan Patel and were registered as proprietors of 18 Hillcroft Crescent, Wembley (Hillcroft Crescent).

Trial

A trial of these matters took place between 1 and 4 December 2025. Four witnesses gave evidence: Jay Bhogaita, Manoj Saluja, Anup Vyas, and Kajal Patel. Closing submissions were heard on 18 December 2025.

Facts

In May 2017, Milan Patel asked Manoj Saluja for a loan in exchange for a first legal charge over Hillcroft Crescent and a second legal charge over a property at Thames Street. Manoj Saluja obtained an informal valuation of Hillcroft Crescent from another director of Gracechurch, who estimated that it would sell for “about £700,000”.

On 22 June 2017 Manoj Saluja entered into two agreements with Milan Patel and his parents, Chetan and Malti Patel. He agreed to advance Milan Patel and Chetan and Malti Patel £500,000 in exchange for a first legal charge over Hillcroft Crescent; and he agreed to advance Milan Patel and HBMP Developments £500,000 in exchange for an option to purchase the ground floor commercial unit at Thames Street once the development was completed. These agreements collectively make up “the June 2017 loan”.

A legal charge over Hillcroft Crescent was purportedly executed by Chetan and Malti Patel in favour of Manoj Saluja (“the June 2017 charge”). The purpose of this was to secure the loan to Milan Patel and Chetan and Malti Patel. However, the charge was not registered at that stage at HM Land Registry.

ALD Legal also provided a solicitor’s undertaking guaranteeing Milan Patel’s performance of the June 2017 loan (“the June 2017 Undertaking”). The June 2017 loan and the June 2017 charge were witnessed by Shital Shah and stamped ALD Legal.

In July 2017 Manoj Saluja and Gracechurch Ltd agreed to lend money to Milan Patel for the purpose of developing Thames Street. On 20 July 2017 Milan Patel sent Manoj Saluja a draft agreement. This was forwarded to Vyman on 21 July 2017. Vyman agreed to act for Manoj Saluja in relation to this loan (“the Gracechurch loan”). The value of the Gracechurch loan was £1.6 million.

On 21 July 2017 Jay Bhogaita emailed the Thamesmere directors asking for permission to lend £742,000 to Manoj Saluja in exchange for a first legal charge over Hillcroft Crescent. Vyman agreed to act for Thamesmere in relation to this loan (“the Thamesmere loan”). The value of the Thamesmere loan was £742,000. It was agreed that Manoj Saluja would repay Thamesmere the sum of £900,000 after 18 months.

The reality of this was that the Gracechurch loan would in part be funded by the Thamesmere loan.

On 21 July 2017 Anup Vyas sent an email to Jay Bhogaita and Thamesmere’s directors in respect of these two loans which read as follows:

Vyman opened separate files for each of these two loan agreements. Its position is that it was acting for Thamesmere in relation to the Thamesmere loan; and for Manoj Saluja and Gracechurch in relation to the Gracechurch loan.

On 2 August 2017 Vyman emailed Jay Bhogaita and the Thamesmere directors attaching a draft loan agreement. This email referred to the fact that there would be a third party charge against Hillcroft Crescent, the property owned by Milan Patel’s parents, Chetan and Malti Patel. The email stated that Chetan and Malti Patel needed independent legal advice.

On the same day Vyman emailed Milan Patel asking for evidence that Chetan and Malti Patel had received independent legal advice. The email included the following paragraph:

On 7 August 2017 Anup Vyas circulated a further draft of the Thamesmere loan agreement to Thamesmere by email. Manoj Saluja was copied into the email. The email contained the following paragraph:

At 14.06 on the same day Vyman emailed Milan Patel:

The attached letter addressed to Chetan and Malti Patel read as follows:

A copy of this letter was returned to Vyman and Manoj Saluja by email from Milan Patel’s email address at 14:51 nominating a Mr H Shah at Axiom Stone Solicitors. It appeared to have been signed by Chetan and Malti Patel. Photocopies of their passports showing similar signatures were attached.

17 mins later at 15:08 Milan Patel emailed Vyman and Manoj Saluja from the same email address stating:

At 15:50 Kajal Patel on behalf of Vyman emailed Milan Patel as follows:

A printed copy of this document is annotated by Kajal Patel in manuscript ‘Discussed with AV – he agreed for Shital Shah toproceed’.

At 16.13 Milan Patel emailed Kajal Patel at Vyman asking them to send a copy of the Thamesmere charge to Shital Shah by email “as the clients are known to him and he is an independent solicitor. […] [he] will also undertake that he has advised the clients and signed in his presence.”

At 16.49 Vyman emailed Shital Shah attaching a letter of instruction and a specimen independent legal advice certificate. The letter stated:

The wording on the specimen certificate included:

At 16.51 Kajal Patel emailed Milan Patel confirming acceptance of Shital Shah as the independent solicitor, and continuing:

On 8 August 2017 a Law Society search of Shital Shah was performed by Vyman.

At 12.22 an email was sent by Shital Shah from his ALD Legal email account to Manoj Saluja and Vyman attaching the signed Thamesmere charge, certificate, and undertakings.

The attached letter signed by Shital Shah also dated 8 August confirmed that Shital Shah had acted for the Third Party Chargors and included the words:

Vyman also received what purported to be signed confirmation from Chetan and Malti Patel that they had nominated Shital Shah as their independent solicitor to advise them about the Hillcroft Crescent charge.

Later on 8 August, Kajal Patel on behalf of Vyman emailed Manoj Saluja advising him of progress. The email included the following paragraph:

A similarly worded email was sent to Thamesmere the following day.

At 23.49 on 8 August Manoj Saluja replied to the email responding to a number of queries and correcting details. His response included the following:

On 9 August 2017 Vyman emailed Milan Patel at 10.03 to ask for a copy of ALD Legal’s insurance certificate, which was provided later that day.

At 10.59 Jay Bhogaita messaged Anup Vyas by SMS asking for a call, and at 11.39 he emailed Kajal Patel: “Hold fire we are hoping to come and see Anup this PM I need Anup to call me asap.” At 14.13 Jay Bhogaita sent an SMS message to Anup Vyas: “Likely to be 10 min late […].”

At 14.30 Kajal Patel forwarded an email from Milan Patel to Jay Bhogaita asking how Jay Bhogaita would like her to respond. Jay Bhogaita sent an email from his iphone: “Hold on we are nearly at Ur office.”

The completion statement for the Thamesmere loan was signed by both Manoj Saluja and Jay Bhogaita on 9 August at the offices of the defendant. All four of the live witnesses I heard at trial gave evidence as to their recollection of events that afternoon. I deal with this evidence and make findings of fact below.

The Thamesmere Loan Agreement was dated 10 August and the Thamesmere loan monies of £742,000 was released from Vyman’s client account the same day. The Thamesmere charge was registered against Hillcroft Crescent on 11 August 2017.

The Gracechurch Loan Agreement was dated 10 August and loan monies of £1.6 million were released from Vyman client account to ALD Legal the same day. The Gracechurch charge was registered on 20 September 2017.

There is a significant area of factual dispute concerning the events of 7 to 9 August 2017.

The key disputes are as follows:

The defendant disagrees with all these assertions.

I summarise very briefly the relevant witness evidence.

Jay Bhogaita gave a witness statement dated 2 September 2025. He makes it clear that he is an agent for Thamesmere, and was not authorised to sign any official documentation unless he had been provided with authority in writing by one of the directors.

He did not see the email exchanges between Kajal Patel and Milan Patel into which Manoj Saluja was copied on 7 August. He says:

He continues:

He confirms that he has consulted his diary and he had an appointment in London on the afternoon on 9 August. He recalls that he had travelled from London to Leicester with his son. He says:

In cross examination he added that he could not recall whether he saw Kajal Patel that day or not.

He said he did not know what he had meant by “hold fire”. He said that he did not have the authority to make decisions legally; that was between Vyman and the directors in Dubai.

He agreed that he had messaged to say he was likely to be 10 mins late. He could not remember what he was saying he would be late for, and he agreed that he did not have a clear recollection on 9 August. He could not even say if the completion statement had been signed that that day. He agreed that the blue pen with which he signed it was a Vyman pen. He finally agreed that he could not recall seeing Manoj Saluja on 9August, but he could not remember either way.

In his witness statement of 26 September 2025 Manoj Saluja says of the Thamesmere loan:

In cross examination Manoj Saluja dealt with events of 7-9 August 2017. He said he had regular phone contact with Anup Vyas throughout. He agreed that there had been an email discussion of the risks about ALD Legal being a small firm. The main point was the insurance and his understanding was Vyman would not complete without satisfying themselves on that point.

He accepted that he was copied into the emails from Milan Patel about Shital Shah. He raised no concern about it as Vyman were not registering his charge; it was Thamesmere’s charge. They had made it clear they were not acting for him in this regard. It was for Vyman to decide whether they could trust Shital Shah. He would however have expected to be told that they had made the decision to go with Shital Shah.

On 9 August 2017 his recollection was that he went to Vyman’s office to sign the completion statement and hand over the client care letter. He said that he probably signed this at reception where it had been left for him. It did not happen at a meeting, and he did not see Jay Bhogaita or Anup Vyas that day. He reiterated that Anup Vyas had not advised or consulted him about accepting Shital Shah as independent solicitor for Chetan and Malti Patel.

In his witness statement of 26 September 2025 Anup Vyas says that he has “quite a good recollection” of events. There was a lot of pressure from the claimants to complete the transactions quickly. He supervised Kajal Patel who had day to day conduct of each of the transactions.

He says that the security arrangements for the Thamesmere loan were unusual; usually one would expect the borrower, in this case Manoj Saluja, to put up security; instead it was Milan Patel’s parents who were providing security.

He deals with the necessity of ensuring that Chetan and Malti Patel had independent legal advice. On 7 August there were the two emails from Milan Patel in quick succession; the first attached the nomination letter for Axiom Stone; the second said that Shital Shah would act. He says:

He goes on to say that he explained the role of the independent solicitor to Jay Bhogaita. He had advised that the fact that ALD Legal was a small firm might offer limited security if anything went wrong. He says:

Checks were made concerning the level of ALD Legal’s professional indemnity insurance, which was confirmed to be £3 million. He continues:

His concern was that any recourse against a small firm might be limited. The confirmation of the insurance position satisfied that concern.

He goes on to detail the meeting he says occurred on 9 August at Vyman’s offices between him and Manoj Saluja and Jay Bhogaita. He says:

He adds that it was his belief that both Manoj Saluja and Jay Bhogaita regarded Milan Patel as an unreliable borrower, and had regular debates about whether they would lend the money or not. In the end they decided to proceed, and the completion statements were produced and were signed by both Jay Bhogaita and Manoj Saluja at the meeting.

In cross examination he said:

Kajal Patel confirms in her witness statement dated 26 September 2025 that she worked on this matter under Anup Vyas’s lead. She was contacted by Jay Bhogaita and Manoj Saluja throughout the transaction. The communication was mainly by emails. There were short phone calls in which she would provide updates, but not substantive advice.

As far as the Thamesmere charge was concerned, this was the first time she had dealt with a third-party charge. She researched and understood the Etridge guidance. Her understanding of the guidance was initially that the solicitor had to be from a different firm. She said:

She details the steps which were then taken to progress this. As far as the change of nominated solicitor she said:

She recalls the work that had to be done on 9 August in finalising the completion statements. She was instructed to get the details of ALD Legal’s professional indemnity insurance. She continues:

In making findings of fact, I bear in mind guidance on evidence based on recollection given by Leggatt J in Gestmin SA v Credit Suisse (UK) Ltd [2013] EWHC 3560. He warns that “the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth” (paragraph 21), and goes on to suggest that:

This is especially relevant when events happened many years ago, and are being recalled after later developments which have given greater significance to matters which might have seemed less important at the time.

In this case, all parties agree that there was very frequent phone contact between them over the days leading up to the completion of these transactions. The Hillcroft Crescent charge was a key part of the Thamesmere loan. Jay Bhogaita’s evidence was that without this security, the transaction would not have gone ahead.

Manoj Saluja was copied into the relevant emails, and there is therefore no dispute that he knew that Shital Shah was proposed as the independent solicitor.

It is clear from the documentary evidence that the potential role of Shital Shah was raised as an issue between Kajal Patel and Anup Vyas and discussed. There was no reason for Anup Vyas to conceal it from the parties. In Anup Vyas’s words, it was “no skin off his nose” if the deal did not go ahead, or if it took longer than parties hoped. He had no reason to conceal from the parties the fact that Shital Shah was being used as Chetan and Malti Patel’s independent solicitor, and the issues that raised. Given that the parties were in such frequent contact it is not credible that this key matter was discussed by Anup Vyas and Kajal Patel, but was avoided in verbal contact between Anup Vyas and the claimants.

Anup Vyas’s account is further confirmed by the evidence of Kajal Patel, who recalls him saying that he had spoken to Thamesmere about the matter.

I accept Anup Vyas’s evidence that he discussed the appointment of Shital Shah with both Jay Bhogaita and Manoj Saluja in phone calls before the documents were signed on 9 August, and that they confirmed their agreement.

With regard to whether there was a meeting on 9 August: I have carefully considered the evidence of Jay Bhogaita. His account is impossible to reconcile with the documentary evidence. It is clear from the messages sent by him on 9 August that he was on his way to a meeting. His insistence in his evidence that these messages are consistent with him simply parking the car at the offices before going on into London lacks credibility.

I have considered Manoj Saluja’s evidence that he “probably’ signed the documents at reception on 9 August. He had made criticisms of the Gracechurch loan completion statement late on 8 August, and a new version had been produced on 9 August. There is no evidence to suggest that he was sent a revised draft of the Gracechurch Loan completion statement by email. He would therefore have needed to see and approve the new draft at the offices before he signed. It is not credible that, given the importance of the transaction, he went into the office where Anup Vyas was present and signed the redrafted documents at reception without seeing or making contact with him.

In contrast, Anup Vyas gives a clear account of a meeting, quoted at length above. Given the importance of the transaction and the fact that all parties were present at the offices on that day when the document was signed, it is much more likely that the account given by Anup Vyas is correct, despite the fact that there is no note of the meeting on the file. His evidence is credible, and is supported by the evidence of Kajal Patel.

In making my findings I bear in mind the limitations of witness testimony, particularly after the passage of time. My findings are supported by the documentary evidence, including but not limited to:

The documentary evidence therefore supports the accounts given by Anup Vyas and Kajal Patel.

I find it proved on the balance of probabilities that:

It is agreed that a fraud was perpetrated by Milan Patel. There is no evidence that Shital Shah was a party to the fraud. The key facts are as follows:

Shital Shah gave a statement dated 9 January 2019 in Chetan and Malti Patel’s litigation which was part of the evidence in this case, and the contents of which are accepted by all parties for the purposes of these proceedings. He had met people who purported to be Chetan and Malti Patel on a previous occasion in February 2017, when he had also witnessed their signatures. He goes on to say:

As a result of the fraud, there was no valid charge against Hillcroft Crescent.

Events which happened after 10 August 2017 can be summarised briefly.

During April 2018 discussions began between Manoj Saluja and KYA Developments and Southcote Developments concerning the assignment of the Gracechurch loan. On 25 April 2018 Southcote Developments paid Manoj Saluja £211,042.42 for a 10% interest in the Gracechurch loan.

On 8 May 2018, on Manoj Saluja’s instructions, Vyman prepared the documents assigning the Gracechurch loan and the Gracechurch charge to Southcote Developments and KYA Developments. On 9 May 2018 Southcote Developments paid £1,245,820.68 (“the first assignment payment”) to Vyman. On 10 May, on Manoj Saluja’s instructions, Vyman sent this to an account in Gracechurch’s sole name.

There is some disagreement as to how much Manoj Saluja in fact received from Southcote Developments and KYA Developments pursuant to the assignment of the Gracechurch loan and other loans. It is not necessary for me to resolve these matters in order to determine this case.

By mid 2018 it was apparent to Thamesmere that their loan was unlikely to be repaid, and they set about appointing a receiver to repossess and sell Hillcroft Crescent. Given that the loan term had not expired, they were advised that it was difficult to establish a default, and therefore the action was abandoned. Instead, Manoj Saluja instructed Vyman to register the June 2017 charge. This was done in October 2018. LPA receivers were appointed on 21 November 2018 and Hillcroft Crescent was sold at auction for £450,000 on 12 December 2018.

On 21 December 2018 Chetan and Malti Patel issued a claim against parties including Manoj Saluja and Thamesmere for a declaration that their signatures on documents, including those relating to the June 2017 charge and the Thamesmere charge, were forged. On the same day they obtained an urgent injunction preventing completion of the sale of Hillcroft Crescent.

Thamesmere continued to instruct Vyman in its defence of the action; Manoj Saluja disinstructed Vyman on 14 March 2019 and instructed Martin Shepherd Solicitors instead.

Ultimately, handwriting experts agreed that Chetan and Malti Patel’s signatures were probably forged. On 3 February 2020 a declaration was made by the court to this effect.

On 16 July 2020 Thamesmere agreed to settle the Thamesmere loan with Manoj Saluja. Under the terms of the settlement, Thamesmere accepted £150,000 in respect of the £900,000 owed under the loan agreement.

In 2023 Manoj Saluja acquired Thamesmere for a payment of £100,000. A ‘bonus’ payment is due if Thamesmere makes a substantial recovery in this litigation.

Consideration

There is a dispute as to whether the defendant was acting for Manoj Saluja in respect of the Thamesmere loan.

Anup Vyas ensured that Vyman operated separate retainers for the two different transactions. His position is that for the Thamesmere loan Vyman was acting for Thamesmere alone, and that they were acting for Manoj Saluja only in respect of the Gracechurch loan. He said that he recognised the possibility of a conflict of interest but believed that it was reduced as Vyman was not involved in the negotiation of the commercial terms. He said:

Manoj Saluja on the other hand said that he believed that Vyman was representing him in respect of the Thamesmere loan from 21 July. He said:

He was not aware that Vyman was claiming it was not acting for him in relation to the Thamesmere loan until he received the email of 7 August, as quoted above:

His evidence is that he did not respond in writing to this email, but he called Anup Vyas and was reassured by him that Thamesmere’s charge over Hillcroft Crescent was also going to safeguard his own interest. He therefore agreed to Vyman’s terms of engagement under the impression Vyman would represent his interests with regard to both loan agreements.

Where the solicitor in question has made it clear in writing that he is not acting for an individual, and this has not been challenged, beyond the claim that the individual was given an informal general verbal assurance, the representation cannot be inferred retrospectively. For the purposes of the Thamesmere loan, Vyman was acting as solicitor only for Thamesmere.

That does not mean that Vyman owed no duty of care towards Manoj Saluja. However, in order to determine whether Manoj Saluja has a potential claim, the simplest starting point is to consider whether he has suffered any loss as a result of the failure of the Hillcroft Crescent charge.

Under the terms of the Thamesmere loan, Manoj Saluja owed Thamesmere £900,000. This was repayable 18 months after the loan agreement dated 10 August 2017. It was agreed that the loan would be secured by a first legal charge over Hillcroft Crescent in favour of Thamesmere. The purpose of the charge was to provide security in the event that Manoj Saluja failed to repay.

At the same time, Manoj Saluja and Gracechurch jointly lent £1.6 million to Milan Patel and HBMP under the terms of the Gracechurch loan. This was made up of monies from the Thamesmere loan, and other funds provided by Manoj Saluja and Gracechurch. For the purposes of this judgment, the exact sources of the other funds do not matter. Under the agreement, Manoj Saluja and Gracechurch were owed £1.6 million by Milan Patel. This was secured by the Gracechurch charge.

On 8 May 2018, on Manoj Saluja’s instructions, the Gracechurch loan and the Gracechurch charge were assigned to Southcote Developments and KYA Developments in return for substantial payment. There is a dispute as to how much was paid, and how much of this Manoj Saluja himself received, the detail of which it is not necessary for me to determine. However, two payments were made by Southcote to Manoj Saluja and Gracechurch: the initial payment of £211,042.42 on 25 April 2018; and the first assignment payment of £1,245,820.68 on 10 May 2018.

Manoj Saluja claims not to have received any benefit from the first assignment payment, as it was paid to Gracechurch on his instructions. However, under the terms of the assignment, it was payable to Manoj Saluja and Gracechurch jointly. The fact that he decided to have it paid to Gracechurch does not mean that he did not receive the benefit of it. None of the funds received in respect of the assignment were used to repay his debt to Thamesmere.

Later in 2018, Thamesmere decided to appoint an LPA receiver to repossess and sell Hillcroft Crescent. However, given that the loan term had not yet expired, it was decided that Manoj Saluja would register the earlier June 2017 charge, which he did in October 2018, and it was under this enforcement action that Hillcroft Crescent was purportedly sold on 12 December 2018. Had the sale been effective, the purchase price of £450,000 would have been owed to Thamesmere, who had the first legal charge over Hillcroft Crescent.

Manoj Saluja is wrong to say that Thamesmere and Manoj Saluja had an “identical” interest in securing an effective charge over Hillcroft Crescent. The security over Hillcroft Crescent under the Thamesmere loan was not a replacement of Manoj Saluja’s obligation to repay the loan. Under the loan agreement, he owed Thamesmere almost £900,000. On any basis, the Hillcroft Crescent charge was insufficient security for the loan. Had the enforcement action been successful, and had Hillcroft Crescent sold for £450,000, Manoj Saluja would still have owed Thamesmere the remaining £450,000. Even if it had sold at the initial informal valuation of £700,000, he would still have owed Thamesmere almost £200,000.

On 16 July 2020 Manoj Saluja reached a settlement with Thamesmere under which his debt of £900,000 was extinguished in return for a payment of £150,000. Far from having “lost” this £150,000, he in fact benefitted significantly from the surprisingly favourable settlement. He had assigned the Gracechurch loan, he and Gracechurch had received substantial monies in respect of that. The assignment payment was not used to repay Thamesmere, and Manoj Saluja finally paid only a fraction of his remaining debt. That fraction was substantially less than the amount he would have owed even if the Hillcroft Crescent charge had been effective.

Manoj Saluja suffered no loss with regard to failure of the Hillcroft Crescent charge. Therefore the extent to which Vyman may have owed him a duty of care in respect of the Thamesmere loan does not require determination for the purposes of deciding his claim. His claim in respect of the defendant’s alleged breach of any duty fails.

As far as the Patel litigation is concerned: the defendant acted for Manoj Saluja from October 2018 until early March 2019 when he appointed different legal representatives. The litigation was settled in February 2020 and costs orders were made in September 2021.

Manoj Saluja does not identify what costs were incurred by what he asserts be negligent advice given by the defendant in respect of the decision to defend the Patel litigation. The litigation was continued for over a year under his new solicitors with no change in his position after Vyman ceased to act.

In those circumstances, Manoj Saluja has not proved that the defendant is liable for any costs arising from that litigation.

The leading authority on the approach the court should take to professional negligence claims is Manchester Building Society v Grant Thornton UK LLP [2022] AC 783. Lord Hodge, giving the judgment of the Supreme Court, said (at paragraph 6):

The first question is undisputed: the subject matter is actionable. I deal with the second and third questions in turn.

The defendant had a duty to act with reasonable care and skill in the work it carried out for Thamesmere. The nature of this work is set out in the retainer as follows:

The defendant was not retained to give commercial advice. Thamesmere realistically accepted in the course of closing arguments that the defendant’s duty did not extend to ensuring that the loan would be “risk free”. The commercial risk inherent in the loan agreement was a risk assumed by Thamesmere, and it was not part of the defendant’s duty to protect Thamesmere from that risk.

It was Thamesmere’s decision to obtain the security over Hillcroft Crescent. It was also Thamesmere’s decision to seek no formal valuation, and the informal valuation of £700,000 indicated that it would not provide full security for the £900,000 Thamesmere loan. Thamesmere knew this when it decided to enter into the loan agreement.

It was confirmed in writing that Thamesmere did not wish Vyman to carry out any customary searches or enquiries, and Anup Vyas wrote:

Thamesmere therefore demonstrated that it was prepared to accept a certain level of risk in respect of the Hillcroft Crescent charge.

The defendant accepts that it had a duty to ensure that the charge over Hillcroft Crescent was executed in accordance with the law. Given that the charge was granted by third parties who were not direct beneficiaries of the loan, the defendant was required to advise on the principles set out in Royal Bank of Scotland Plc v Etridge (No.2) House of Lords [2001] UKHL 44 (“Etridge”) to protect against future challenges.

Etridge deals with the situation which arises when a wife's interest in her home has stood as security for her husband's indebtedness. The House of Lords set out the steps to be followed by lending banks in such cases, principally to avoid the risk of securities being later challenged for equitable wrongs: undue influence, misrepresentation, unconscionable bargain and duress. The bank lending money on such a security is “put on inquiry” where the transaction is not to the financial advantage of the wife; in such cases the wife should have the benefit of independent legal advice from a solicitor.

Lord Nicholls in Etridge sets out a number of steps that a bank should take.

I now return to the steps a bank should take when it has been put on inquiry and for its protection is looking to the fact that the wife has been advised independently by a solicitor.

One of the unsatisfactory features in some of the cases is the late stage at which the wife first became involved in the transaction. In practice she had no opportunity to express a view on the identity of the solicitor who advised her. She did not even know that the purpose for which the solicitor was giving her advice was to enable him to send, on her behalf, the protective confirmation sought by the bank. Usually the solicitor acted for both husband and wife.

Representatives of the bank are likely to have a much better picture of the husband's financial affairs than the solicitor. If the bank is not willing to undertake the task of explanation itself, the bank must provide the solicitor with the financial information he needs for this purpose. […]

Exceptionally there may be a case where the bank believes or suspects that the wife has been misled by her husband or is not entering into the transaction of her own free will. If such a case occurs the bank must inform the wife's solicitors of the facts giving rise to its belief or suspicion.

The bank should in every case obtain from the wife's solicitor a written confirmation to the effect mentioned above.

The independent solicitor’s duties are set out as follows:

In the type of case now under consideration the relevant retainer stems from the bank's concern to receive confirmation from the solicitor that, in short, the solicitor has brought home to the wife the risks involved in the proposed transaction. As a first step the solicitor will need to explain to the wife the purpose for which he has become involved at all. He should explain that, should it ever become necessary, the bank will rely upon his involvement to counter any suggestion that the wife was overborne by her husband or that she did not properly understand the implications of the transaction. The solicitor will need to obtain confirmation from the wife that she wishes him to act for her in the matter and to advise her on the legal and practical implications of the proposed transaction.

Lord Nicholls goes on to consider what amounts to “independent” advice, and the role and duties of the independent solicitor:

I turn next to the much-vexed question whether the solicitor advising the wife must act for the wife alone. Or, at the very least, the solicitor must not act for the husband or the bank in the current transaction save in a wholly ministerial capacity, such as carrying out conveyancing formalities or supervising the execution of documents and witnessing signatures. Commonly, in practice, the solicitor advising the wife will be the solicitor acting also for her husband either in the particular transaction or generally.

Next, a simple and clear rule is needed, preferably of well nigh universal application. In some cases a bank deals directly with a husband and wife and has to take the initiative in requiring the wife to obtain legal advice. In other cases, a bank may deal throughout with solicitors already acting for the husband and wife. […]

Thirdly, here again, a balancing exercise is called for. Some features point in one direction, others in the opposite direction. Factors favouring the need for the solicitor to act for the wife alone include the following. Sometimes a wife may be inhibited in discussion with a solicitor who is also acting for the husband or whose main client is the husband. […] Sometimes a solicitor whose main client is the husband may not, in practice, give the same single-minded attention to the wife's position as would a solicitor acting solely for the wife. Her interests may rank lower in the solicitor's scale of priorities, perhaps unconsciously, than the interests of the husband. Instances of incompetent advice, or worse, which have come before the court might perhaps be less likely to recur if a solicitor were instructed to act for the wife alone and gave advice solely to her. As a matter of general understanding, independent advice would suggest that the solicitor should not be acting in the same transaction for the person who, if there is any undue influence, is the source of that influence. 

The contrary view is that the solicitor may also act for the husband or the bank, provided the solicitor is satisfied that this is in the wife's best interests and satisfied also that this will not give rise to any conflicts of duty or interest. The principal factors favouring this approach are as follows. A requirement that a wife should receive advice from a solicitor acting solely for her will frequently add significantly to the legal costs. Sometimes a wife will be happier to be advised by a family solicitor known to her than by a complete stranger. Sometimes a solicitor who knows both husband and wife and their histories will be better placed to advise than a solicitor who is a complete stranger.

In my view, overall the latter factors are more weighty than the former. The advantages attendant upon the employment of a solicitor acting solely for the wife do not justify the additional expense this would involve for the husband. When accepting instructions to advise the wife the solicitor assumes responsibilities directly to her, both at law and professionally. These duties, and this is central to the reasoning on this point, are owed to the wife alone. In advising the wife the solicitor is acting for the wife alone. He is concerned only with her interests. I emphasise, therefore, that in every case the solicitor must consider carefully whether there is any conflict of duty or interest and, more widely, whether it would be in the best interests of the wife for him to accept instructions from her. If he decides to accept instructions, his assumption of legal and professional responsibilities to her ought, in the ordinary course of things, to provide sufficient assurance that he will give the requisite advice fully, carefully and conscientiously. Especially so, now that the nature of the advice called for has been clarified. If at any stage the solicitor becomes concerned that there is a real risk that other interests or duties may inhibit his advice to the wife he must cease to act for her.

The lender’s solicitor – in the case of Etridge, the bank’s solicitor, and in this case the defendant, has a very different role:

Confirmation from the solicitor that he has advised the wife is one of the bank's preconditions for completion of the transaction. But it is central to this arrangement that in advising the wife the solicitor is acting for the wife and no one else. The bank does not have, and is intended not to have, any knowledge of or control over the advice the solicitor gives the wife. The solicitor is not accountable to the bank for the advice he gives to the wife. To impute to the bank knowledge of what passed  between the solicitor and the wife would contradict this essential feature of the arrangement. The mere fact that, for its own purposes, the bank asked the solicitor to advise the wife does not make the solicitor the bank's agent in giving that advice. 

In the ordinary case, therefore, deficiencies in the advice given are a matter between the wife and her solicitor. The bank is entitled to proceed on the assumption that a solicitor advising the wife has done his job properly. I have already mentioned what is the bank's position if it knows this is not so, or if it knows facts from which it ought to have realised this is not so.

In addition to complying with the Etridge principles, a solicitor has a general duty of to point out risks which should be obvious to a solicitor but which a layman might not appreciate. This has been dealt with a number of times by the Court of Appeal, and is set out by Bingham LJ in County Personnel (Employment Agency) v Alan Pulver & Co[1987] 1 W.L.R. 916 as follows (at p922):

In order to consider this, I need to look first at the steps set out in Etridge, and compare them with what was in fact done in this case.

Etridge requires the following:

In this case, Vyman sent an email to Milan Patel attaching a letter for his parents in the following terms:

The letter was also sent to Chetan and Malti Patel by post, although it was wrongly sent to Hillcroft Crescent which was not their home address. The error was understandable, as Chetan and Malti Patel provided this postal address to the Land Registry. In any case, given that a reply was received well before any letter could have arrived, this error is of no real relevance.

A copy of the letter was also sent to Chetan and Malti Patel via an email to Milan Patel. There is nothing wrong in principle with sending a letter via this conduit. In the husband/wife situation, there could be no objection to a letter being given to the husband to pass on to his wife; of course, the bank would need to be sure that she had in fact received it. But this requirement is fulfilled by the fact that the wife responds to the letter and signs the nomination.

In this case, Milan Patel himself was a solicitor, and there were no grounds whatsoever to suggest that he was not passing letters on to his parents, or that he was acting fraudulently.

The letter was duly returned, attached to an email sent by Milan Patel, purportedly signed by Chetan and Malti Patel, and nominating Axiom Stone as independent solicitors. A few minutes later, Milan Patel emailed to say that the independent advice form and legal charge had in fact already been signed by Shital Shah.

The claimants allege that Vyman should have seen the appointment of Shital Shah as a “red flag”, both from the way in which it came about, and from the fact of his connection with the ultimate borrower, Milan Patel.

The claimants argue that the speed of the change in nominated solicitor should have signalled to Vyman that something was amiss. But they struggle to identify what issue this might have flagged. Both the Axiom Stone nomination and the Shital Shah nomination came by the same method of communication. They were both emailed from Milan Patel’s email address, and both copied in Manoj Saluja. Manoj Saluja and the defendant both knew that Shital Shah had witnessed what appeared to be Chetan and Malti Patel’s signatures on the June 2017 charge.

There is nothing improbable in the supposition that Milan Patel was in very close contact with his parents over the matter. All parties wanted these transactions to be completed as quickly as possible. It is impossible to maintain that Vyman should have been put on notice that something was wrong by the speed at which these different responses were received. The implication is that a longer interval would have been less concerning. I can see no reason why this should be the case. The first claimant, Manoj Saluja, was copied into the two relevant emails. If the fact that there were two emails in quick succession nominating and then changing the nomination of solicitor was such an obvious red flag, he might have been expected to raise it. He did not.

Thamesmere asserts that any change of nominated solicitor should have shown that “something” was wrong. But as both defence witnesses said, it can be difficult to find a local solicitor who can undertake work at every short notice, and as far as the parties to this transaction were concerned, time was of the essence. One solicitor might not have been able to perform the work within a suitable time. Another option might then have been considered. A change in choice of solicitor is not inherently suspicious.

Setting the change of solicitor to one side, the question then is whether Vyman should have refused to accept Shital Shah as an appropriate independent solicitor.

Anup Vyas said in evidence:

Shital Shah had a relationship with the ultimate borrower, Milan Patel, in that he was a consultant for his firm, ALD Legal. The claimant argues that this relationship made him unsuitable as an independent solicitor.

However, that position is impossible to maintain in the light of Etridge. Etridge does not require the independent solicitor to be distanced from a borrower. Indeed, it is made clear that the independent solicitor may in fact be the same solicitor as the one acting for the borrower. It is for the independent solicitor, and not the lender’s solicitor, to determine whether he can appropriately carry out his role, and give advice that is truly independent. As set out in Etridge:

The claimants argue that Vyman should have seen the appointment of Shital Shah as so obvious a “red flag”, that they should have refused to accept his own assessment that he could act. They argue that there is a stark difference between the Etridge situation where a solicitor acts for both a borrower/husband and a surety/wife; and the situation where the solicitor himself is employed by the ultimate borrower.

While the situation is different, there is nothing in the difference to suggest that Shital Shah’s connection with Milan Patel made his use obviously risky or inappropriate. Shital Shah was an experienced solicitor, whose relationship with Milan Patel was a professional one. He was believed to have witnessed Chetan and Malti Patel’s signatures in the recent past, and his own assessment was that he could give independent advice. Vyman considered the issue, raised it with their client, who made no objections, and decided that there was no bar to relying on Shital Shah to carry out this role.

Anup Vyas raises the issue of ‘risk’ in his email to Jay Bhogaita on 9 August:

It is clear from both the context and the wording of the email that the ‘risk’ referred to is the risk that ALD Legal as a small one partner firm will not have the necessary level of insurance to cover any losses.

Anup Vyas explained this in his evidence when he said:

There is no reference to any risk arising from Shital Shah’s connection with ALD Legal, and this therefore does not demonstrate any acknowledgment on the part of the defendant that it was risky to accept Shital Shah as independent solicitor for Chetan and Malti Patel.

The fact that Shital Shah was a consultant at the firm of the ultimate borrower, a firm in whose competence and probity there was no reason to doubt, does not indicate that he was an inappropriate choice as independent solicitor. The risk which Etridge addresses is the risk of a security being later challenged for equitable wrongs. There was nothing to suggest that Shital Shah’s appointment might give rise to such a risk. The fraud in this case was made possible not by any lack of independence, but by his negligence. Nothing could have alerted Vyman, or the claimant, to this risk.

Vyman’s duty of care does not extend to policing the conduct of the independent solicitor. This is made clear in Etridge: “The bank is entitled to proceed on the assumption that a solicitor advising the wife has done his job properly.” After verifying his status with the Law Society, and considering his professional link with the ultimate borrower, Vyman could reasonably expect that a qualified solicitor understood his duties when advising a surety in this context.

The claimant argues that the defendant’s duty of care goes beyond compliance with the Etridge principles, and includes a duty to alert its clients to suspicious behaviour which might not be obvious to a lay person. While that is correct, the assessment of the defendant was that the appointment of Shital Shah was not suspicious. In any event, this claimant is experienced in business dealings. Jay Bhogaita was consulted about the appointment of Shital Shah, and knew of his relationship with Milan Patel. This is not a case where there is a “risk which might elude even an intelligent layman”. There was no risk which would be obvious to a solicitor but which a lay person experienced in business dealings might fail to appreciate.

The independent solicitor has a duty to reliably identify the surety. The appointment of Shital Shah could not possibly have alerted Vyman to a risk that this task would not be undertaken properly. There is no ground for arguing that this is a task that Vyman themselves should have undertaken. There is no requirement, under the Etridge principles or otherwise, that a lender’s solicitor must check the work done by the independent solicitor in this respect. Vyman were entitled to take on trust the assertion that Chetan and Malti Patel’s solicitor had carried out this work properly, and to accept his written representation that not only “The Third Party Chargors executed the Third Party Legal Charge in my presence and of their own free will and accord.”; but also: “The persons who signed the Third Party Legal Charge are the Third Party Chargors.”

The reason why neither Jay Bhogaita, Manoj Saluja, nor Anup Vyas saw anything suspicious about the appointment of Shital Shah is simply that it was not a suspicious circumstance. This is a case in which events which later unfolded have given an apparent significance to a matter which is not capable of bearing the weight the claimants place on it. No one could have foreseen the risk that Milan Patel, himself a solicitor, would employ imposters to pose as his parents and sign surety documents in their name.

Taking a step back and reviewing the whole sequence of events, not only have the claimants failed to prove that Vyman acted negligently, but the evidence supports the opposite conclusion. Vyman, under considerable pressure from both claimants to complete the transaction quickly, took care to ensure that proper steps were taken in respect of the Thamesmere security, and to ensure that Chetan and Malti Patel received independent legal advice. The negligence of Shital Shah is not the responsibility of the defendant. Thamesmere was victim of a fraud. The success of the fraud cannot be attributed to any breach of duty on the part of the defendant.

This answers the third of the Manchester Building Society questions in the negative. The claimants have failed to prove on the balance of probabilities that the defendant acted in breach of its duty, and the further questions are therefore irrelevant.

The finding that negligence has not been proved in this case also disposes of the claim for breach of trust.

The costs of proceedings to enforce the security are not the result of any negligence on the part of the defendant, and are therefore not recoverable.

Conclusion

For all these reasons, the claims of both Manoj Saluja and Thamesmere fail.