Khambay & Anor v Nijhar (t/a Gravitas Consulting)

This dispute arises out of a property development which did not achieve what had been hoped for it. That much is common ground between the parties, although not much else is. On the contrary, this is a case in which there are a substantial number of hotly contested issues, not least whether the Defendant (“Mr Nijhar”) committed the tort of deceit, as alleged by the Claimants. 

The First Claimant (“Dr Khambay”), who is a dentist but who is also somebody who has a certain amount of experience in developing properties, alleges that Mr Nijhar, whose main experience is in the housing association sector, presented himself (to Dr Khambay) as an experienced and very well-connected property professional and induced him (Dr Khambay) to purchase the former site of the Duncan Edwards Public House, Priory Road, Dudley DY1 4EH (the “Site”) by representing that he (Mr Nijhar) had received assurances from (i) local planning officers in Dudley that planning permission would be granted quickly for mixed retail and residential use with a supermarket development of at least medium size, and (ii) from housing associations and retailers that they would purchase the Site. Dr Khambay also alleges that Mr Nijhar guaranteed Dr Khambay that a profit of at least £500,000 would be achieved if the Site was purchased and planning permission obtained.

It is Dr Khambay’s case, and the case of the Second Claimant (“Clubhire”), a company owned by Dr Khambay, that these representations were false, and that Mr Nijhar is liable in the tort of deceit or on the basis that there is actionable negligent misrepresentation/misstatement or for breach of an alleged collateral contract. Dr Khambay and Clubhire say that they were induced by what Mr Nijhar said to purchase the Site for £875,000 on 10 August 2006 – the purchase being through Clubhire rather than by Dr Khambay in his personal capacity. They contend that Mr Nijhar wanted the Site to be purchased in order that he would be appointed to oversee its development and onward sale either for a profit share or for a lump sum payment of £129,500.

Mr Nijhar was, indeed, appointed – or, more accurately, his newly incorporated company, Gravitas Consultancy Limited (“Gravitas”) was appointed – by Dr Khambay as ‘project manager’. In that capacity Mr Nijhar and Gravitas earned substantial sums of money. In particular, and this is the other aspect of Dr Khambay’s and Clubhire’s case, despite planning permission not being obtained and the Site not being sold, the allegation is that, having omitted to tell Dr Khambay/Clubhire that a planning scheme submitted in early 2007 had been rejected by Dudley Metropolitan Borough Council (the “Council”), Mr Nijhar made certain misrepresentations on 14 August 2007 which caused Dr Khambay to authorise an additional payment to Gravitas in the sum of £34,042.55 (exclusive of VAT) on 17 August 2007. The Claimants’ case is that these representations were also made deceitfully and that Mr Nijhar is liable accordingly.

Mr Nijhar denies each of the Claimants’ allegations. His case is straightforward. It is, essentially, to deny that he made the statements which he is alleged to have made, and to maintain that as regards what he did say there was no falsity as alleged. Mr Nijhar denies also that he guaranteed a profit of £500,000 at any time. Again, he says that this was discussed merely as a possibility. He adds that, in any event, in the economic circumstances which prevailed in 2006, two years ahead of the global economic downturn, it was a reasonable opinion to hold – indeed, it was an opinion which (as appears below) was shared by an experienced property developer, Mr Amar Mehli. Further, Mr Mason submitted on Mr Nijhar’s behalf, nobody in Dr Khambay’s position, with experience in property development, would have understood him to be giving the guarantee now alleged. As a result, the case on inducement cannot hope to succeed. The more so, Mr Nijhar contends, given that Dr Khambay (and Clubhire) relied not on him, or not exclusively on him, but on various other professionals in the form of Mr Mehli (who brought the opportunity to Dr Khambay in the first place and who is an experienced property professional), Mr Surbit Khurll (the director of a company providing commercial property sales and agency services) and Mr Vinay Lakhani (who was Dr Khambay’s long-term accountant) throughout the negotiations and subsequent project management.

Mr Nijhar’s position is that, as he puts it, “the real difficulty” in the present case resulted from the unexpected economic downturn in 2008 and the “dramatic” effect which that downturn had on the property market. He maintains that, throughout the relevant period, he continued to pursue the possibilities for the Site with “all proper diligence and competence”, spending more than the 110 days originally planned on the project. In this context, he firmly rejects the allegation that the £34,042.55 (exclusive of VAT) payment made on 17 August 2007 was made only because he had misrepresented to Dr Khambay and Clubhire the progress which had been made by Gravitas in relation to the Site.

It will be apparent from the nature of the issues which arise in this case that determination of those issues depends very largely, perhaps even exclusively, on my assessment of the witnesses who gave evidence before me. Put shortly, I have to decide whether representations were made; if they were, whether they were made deceitfully or negligently; and if that is the case, whether the Claimants’ case on inducement has been made out. Each of these matters will turn on the quality of the evidence given by the witnesses, and that depends, in turn, on the witnesses’ credibility – primarily that of the main protagonists, Dr Khambay and Mr Nijhar, neither of whom I found impressive as witnesses.

I start with Dr Khambay. He is, as I have already mentioned, a professional man, a dentist. He is also, it would appear, a successful businessman, not only as the owner of apparently busy dental practices but additionally as the developer of certain commercial ventures, namely pubs and clubs, and as the owner of property on the Continent, in particular in Turkey. It would, in such circumstances, be wrong to regard him as inexperienced in property matters, and I do not do this. I accept nonetheless that it would equally be wrong to approach him, and the evidence which he gave, on the basis that he was experienced in developing property similar in size or scale to the Site. I accept his evidence that this was his first venture into the type of development represented by the Site. I accept also that Dr Khambay’s practice is to obtain advice from property professionals whenever he was dealing with property development projects. This was what Dr Khambay himself said in evidence. It is also what Mr Khurll had to say based on his experience of working with Dr Khambay on various property deals. It is further borne out by what happened in the present case, with Mr Mehli and Mr Nijhar both involved in the Site at the beginning and then, after Mr Mehli dropped out, Mr Nijhar, or his company, Gravitas, employed as a property consultant.

Dr Khambay’s abilities were evident to me when he gave evidence; he is undoubtedly an able man. Unfortunately, however, it was also apparent to me that he was astute to the need to ensure that the evidence which he gave did not harm the case which he and Clubhire were advancing against Mr Nijhar. I am also clear that, whilst he was not setting out to mislead in the evidence which he gave, nonetheless he did engage in what has been termed in the past as ‘litigation wishful thinking’ (see Tamlura NV v. CMS Cameron McKenna [2009] EWHC 538, [2009] Lloyd’s Rep PN 71 per Mann J at [174]). Dr Khambay, in other words, has convinced himself, especially given the passage of time which there has been since the relevant events, that his recollection is in all respects the truth, when that is not the case. He was also grudging in quite a few of his answers to perfectly reasonable questions. This was accentuated by his seeming unwillingness to speak up when giving his evidence, despite several requests that he do so because of the difficulty I sometimes had in hearing what he was saying. In these circumstances, I approach Dr Khambay’s evidence with some degree of care and ideally looking for independent support for what he had to say, whether from other witnesses or in the contemporaneous documents. However, I do not consider it appropriate to adopt the course suggested by Mr Mason, which was to place no trust in the evidence given by Dr Khambay. On the contrary, I felt that, in broad terms at least, Dr Khambay was striving to give evidence which was truthful and reliable. Nonetheless, it does not follow that I should uncritically accept everything he told me since I am conscious that, like the other witnesses, he was relating events which took place a long time ago (mainly about 8 years ago). I also am alive, as I say, to the likelihood that, in giving his evidence, Dr Khambay was at pains to ensure that he said nothing which might damage his (and Clubhire’s) case.

I should make it clear that I reject, in particular, Mr Mason’s invitation, put forward on the instructions of Mr Nijhar, that Dr Khambay’s (admitted) severe alcoholism should lead me to conclude that his evidence was unreliable, whether as a result of misrecollection brought about by the alcoholism or because, as I understood the suggestion, Dr Khambay’s alcoholism somehow makes it likely that he will give evidence which is deliberately untruthful. I am quite satisfied that Dr Khambay’s condition did not affect the quality of the evidence which he gave. I also reject the suggestion, again made on instructions, that (as it was put in Mr Mason’s written Closing Submissions) “there is more to [Dr Khambay’s] activities and character than meets the eye”. This was a submission which was said to be justified by reference to a number of matters, none of which I consider warrants the conclusion which I was asked to draw. I do not accept, in particular, that Dr Khambay and his solicitors have adopted an overly aggressive approach to the bringing of this claim. I was taken to various correspondence said to demonstrate such an approach. However, in none of it did I detect any inappropriate conduct. Nor do I accept that Dr Khambay is to be criticised for the Court only learning about his alcoholism (and it was suggested, quite wrongly as far as I could tell given that Dr Khambay confirmed in evidence that he only ever took prescription drugs, a “drug addict”) earlier this year in the context of an adjournment application made by Dr Khambay. I do not consider that there was any obligation on Dr Khambay to reveal his medical difficulties other than in the context of that adjournment application – an application which was based on the fact that he was suffering that condition.

Similarly, the so-called Due Diligence Report, which had been produced in the context of certain bankruptcy proceedings relating not to Dr Khambay but to a former business associate, a Mr Raghbir Brar, does not seem to me to take matters any further. As Dr Khambay explained when he was asked about it, this was a report which Mr Brar obtained in support of his opposition to a bankruptcy petition which had been brought by Dr Khambay because Mr Brar had refused to pay outstanding rent. It was a report which had been prepared in order to discredit Dr Khambay and appears largely to be based on unattributed hearsay and speculation. I place no weight on it in these circumstances. Nor do I place any reliance on a draft witness statement in the name of a Sergeant Charlton, which was made in opposition to an application to extend the operating hours of the Whispers Nightclub, an establishment owned by Dr Khambay but which had previously been managed by people whom he described in his evidence as “gangsters”. I agree with Mr Goodkin, counsel for Dr Khambay, that Dr Khambay cannot sensibly be blamed for the conduct of third parties as described in the draft witness statement. I acknowledge that the draft witness statement also refers to certain complaints about Dr Khambay’s behaviour whilst he had been drinking. However, I must take account of the fact that, whatever the truth of those matters, Dr Khambay faced no proceedings over them and received no caution; he has a clean criminal record. In any event, it is not clear to me how this behaviour can have any bearing on the matters which I must decide.

This leaves, lastly, Mr Mason’s (and Mr Nijhar’s) reliance on what was said to be Dr Khambay’s “ruthless and determined” behaviour in relation to certain proceedings in Turkey relating to a property development in that country in which both Dr Khambay and Mr Nijhar (and Mr Lakhani and Mr Nijhar’s wife) were involved. This behaviour was said by Mr Mason (and Mr Nijhar) to have involved “asset stripping”, an allegation also made in relation to a property in this country. Again, I am not prepared to find that Dr Khambay’s conduct is to be criticised, and anyway that it is relevant to the matters which I must decide in the present proceedings. My knowledge of the detail of the Turkish proceedings is necessarily limited, but I am satisfied that when Dr Khambay told me that he had merely taken lawful steps, based on legal advice received in Turkey, to protect the project’s assets, he was telling me the truth.

I should make it clear that, in the same way as I am not prepared to draw adverse inferences against Dr Khambay based on what I know about the Turkish proceedings, so I am not prepared to make adverse findings against Mr Nijhar despite Mr Goodkin’s invitation by reference to an expert’s report produced in those proceedings which suggests that the construction works carried out by the joint venture company totalled only £431,172 when Dr Khambay had been asked by Mr Nijhar, and had paid pursuant to those requests, over £720,000 to cover such costs. It seems to me, again, that I am in no position to determine the rights and wrongs of the parties’ respective positions in Turkey, and that it would be unwise for me to attempt to do so.

Like Dr Khambay, Mr Nijhar is an intelligent man. He is well-educated with a postgraduate degree in Housing and Public Administration from the London School of Economics. He has a long and apparently successful track record in the housing association sector, having served on the board of Inside Housing Magazine (part of the Chartered Institute of Housing) and having established and served on the board of Inquilab Housing Association in West London (“Inquilab”), an association which he explained has a market value of over £140 million today. He has also been Director of Policy and New Initiatives at Centrepoint, the national youth homeless charity, and has experience as well in the private sector working for Hall & Tawse Partnership Limited and for Capita Consulting Limited working on public sector projects. He has additionally worked in central government, and was from 1994 to 2006 a councillor in the London Borough of Ealing, serving on a number of council committees including as chairman of the Housing Committee, the Perivale Area Committee and the Public Health and Consumer Protection Committee. It is clear that not only does he have considerable experience in the housing association sector and the public sector generally, but also that to his credit he has a long record of public service. It is less clear to what extent he has (or back in 2006 had) experience in the private property sector. This is one of the issues which I must address and I, therefore, say no more about it at this stage.

Regrettably, despite all the good things which Mr Nijhar has done in his career, I did not find him to be a satisfactory witness. Time and again Mr Nijhar would not answer straightforward questions clearly. I recognise that there may have been difficulties, on occasion, in Mr Nijhar reading the documents to which he was taken, owing to certain difficulties which Mr Nijhar has with his eyesight. However, I was careful to ensure that everything that could be done was done to accommodate those difficulties, with extra lighting provided and breaks taken during Mr Nijhar’s evidence. I am confident, therefore, and this was acknowledged by Mr Nijhar, that he was able to follow the questions he was asked about the documents. It follows that Mr Nijhar’s poor eyesight was not the reason why he sometimes failed to answer questions properly. I concluded that Mr Nijhar was deliberately trying not to answer questions which he did not like. His evidence was given in a manner which suggested a marked reluctance to be open, with his main concern being to ensure that his case was not prejudiced by the answers which he gave to Mr Goodkin’s questions. More than this, it was perfectly clear to me that, in a number of respects, Mr Nijhar manufactured answers which he knew were not true, in particular in relation to evidence which he gave concerning a flash drive of documents which he had only very belatedly produced. All in all, I formed the clear conclusion that I should adopt a very cautious approach to the evidence that Mr Nijhar gave. It does not follow from this that I should necessarily reject everything which Mr Nijhar said in his evidence, and prefer that given by Dr Khambay or the other witnesses. That would involve too sweeping an approach and is not, therefore, an approach which I would regard as being appropriate. However, I consider that I should only accept his evidence if satisfied that what he said was inherently likely to be right, or if there was support for his evidence from the documents or from other credible evidence. In adopting this approach, I bear in mind that the issues which I have to decide fall within a fairly narrow, and certainly very specific, compass. It is possible that, despite being an unsatisfactory witness overall, on the issues which matter for the purposes of Dr Khambay/Clubhire’s claims the evidence which Mr Nijhar gave was nonetheless true. Equally, I must, of course, assess the totality of the evidence before me and decide whether the evidence adduced by Dr Khambay/Clubhire is sufficient to establish the allegations which they advance. Unless I conclude that the allegations are made out, the claims must fail. It is for Dr Khambay/Clubhire to prove their case. This will be the position even if I were to find evidence given by Mr Nijhar on particular issues was unreliable.

I have mentioned the flash drive of documents. I should say something more about this since Mr Nijhar’s conduct in relation to the flash drive serves to demonstrate the unsatisfactory quality of the evidence which he gave before me. As long ago as 6 October 2009, Dr Khambay’s then solicitors asked Mr Nijhar to let them have all documents relating to Mr Nijhar’s (or Gravitas’s) project management of the Site development, to which Mr Nijhar’s response (through solicitors) was to question what contractual entitlement Dr Khambay had to the documents sought. On 4 November 2009, Dr Khambay’s solicitors responded, repeating their request. A week later, Mr Nijhar then provided a lever arch file of documents, which was described as representing “all documents and recorded information available”. It was explained at the same time that “a search of our electronic storage for all potential data” had been undertaken and confirmation was given that “the results of that search are included”. Mr Nijhar’s solicitors also wrote: “As you [sic] client is aware our client lost information stored on a laptop that was damaged, the information contained within proved to be unrecoverable despite our client’s best efforts to do so. Clearly there can be no disclosure of information thereon”. Mr Nijhar’s evidence was that he had previously informed Dr Khambay of this hard-drive failure, although there is no document to corroborate this and Dr Khambay’s (and Mr Goodkin’s) position is that Dr Khambay was not told anything of the sort. Mr Nijhar subsequently served a disclosure statement in which he made no attempt to list or identify the documents which he had located through his searches.

This, then, was the context in which Mr Nijhar came to give his oral evidence – something which he started doing on Monday 10 November 2014, the trial having started the previous Wednesday. At the beginning of his cross-examination, he was asked about a document which had been disclosed by him that very morning. This was a letter dated 13 December 2006, dealing with certain demolition work carried out at the Site, which was an issue that had been the subject of certain evidence given by Mr Lakhani the week before in the context of a Gravitas invoice dated 15 December 2006 in the sum of £7,953.54 for “post completion work related” to the Site. Mr Nijhar’s position was that the 13 December 2006 letter, which was from the Building Control Manager at the Council and which referred to Gravitas having that day given notice to demolish, demonstrated that Gravitas carried out relevant work which was the subject of the invoice. He was asked, not unreasonably, why it was that the letter had not been disclosed earlier. His answer was that he “did not have it in my possession until this weekend”, explaining that he “scoured around for documents” and he found this and certain other documents disclosed that (Monday) morning. He said that he found it on a flash drive in his office at home. He said that he was able to access it and that it contained back-up emails. He said that he had previously searched the flash drive but that he had “overlooked it at the time”. He went on to explain that he had had what he described as great difficulty since July 2010 in putting together the documents concerning his involvement with the Site, having lost a major part of his back-up electronic documents through the hard drive failure. He added, when pressed, that he had not backed up everything on the flash drive which he had unearthed over the weekend. He suggested that it was just a small flash drive (2GB), which backed up email only from the 2006/2007 period “or thereabouts”, and which had photographs of his Turkey visits on it which took up a lot of space. He suggested also that it did not back-up all emails as he was using AOL, and the relevant AOL account no longer exists. He then suggested that he used other servers to communicate with people and so the flash drive would not cover everything in any event. This, notwithstanding that the 13 December 2006 message which prompted this line of questioning by Mr Goodkin was itself an email which was sent from Mr Nijhar’s AOL account. Mr Nijhar then went on to explain that he also did not go about backing up in a systematic way, and that he could not remember which of his various email accounts he did not back up.

This was decidedly unimpressive evidence, which was delivered in a wholly evasive manner. I formed the clear impression that Mr Nijhar was trying to justify his failure to disclose what he should have disclosed. Whether that failure was innocent or deliberate, I do not know. What was clear to me, however, was that Mr Nijhar was not being straightforward in the explanations he was giving to the Court, in answer to Mr Goodkin’s questions, as to why relevant documents on the flash drive had not been disclosed before. My suspicion that this was the case became more than mere suspicion when Mr Nijhar then went on to contradict his earlier evidence that he had previously searched the flash drive but had “overlooked” the 13 December 2006 document by saying that, before the weekend which had just gone, he had not known that the flash drive was in the office where it was. He explained that he had thought that the “information”, as he put it, on the flash drive had, again as he put it, “long gone”, and that he only found it on the weekend because he had been looking for some photographs for a colleague and he had stumbled across the 13 December 2006 document on the flash drive whilst he was in the process of doing that. This was an explanation which was hard to square with his earlier evidence that he had spent the weekend “scouring” for relevant documents. It was equally difficult to understand how, as he went on to explain, he could have been “scouring” for documents which had “already been disclosed”, since if documents had already been disclosed there would be no need to have searched a second time for them. Pressed still further, Mr Nijhar then gave contradictory answers in quick succession: first, that when giving disclosure he “would have looked at this drive” but that he “did not think it was relevant”; and then, that he could not remember if he did this and that he “was under enormous pressure from [Dr Khambay’s] lawyers to submit a Defence”. That latter explanation was not a good one, however, since, as was pointed out to him by Mr Goodkin, the Defence was served on 23 March 2011, and standard disclosure was given three months later on 20 June 2011.

All in all, what Mr Nijhar had to say on this topic was unimpressive, to put it mildly. It caused me to doubt that he was really setting out in his evidence to be open, and this impression was reinforced by other aspects of the evidence which he gave. The fact that this was evidence which he gave at the very start of his cross-examination seemed to me to underline his less than candid approach to the giving of his evidence. I agree also with Mr Goodkin that the fact that Mr Nijhar gave this contradictory evidence in so confident and assured a tone as he did, with little hesitation or apparent uncertainty, suggests that he felt under little inhibition to give evidence which was untrue and knowingly so.

The evidence given by Mr Nijhar concerning the flash drive was not the only evidence which caused me to doubt Mr Nijhar’s credibility. Specifically, Mr Nijhar was asked in detail by Mr Goodkin about a business card and, more particularly still, a marketing flyer-type document which Mr Nijhar gave either to Dr Khambay or Mr Lakhani at some point, Mr Nijhar explaining that he had 250 copies of the flyer printed, relatively shortly before he met Dr Khambay. The flyer is headed “Gravitas Consulting, Inderjeet Nijhar” and goes on to list a number of activities under the heading “Professional Support to Maximise Value”, namely: “Planning – PR – Regeneration – Policy – Acquisitions - Asset disposals – Funding – Management - EU/Asia/Africa Networks”. Asked about this list, Mr Nijhar stated that, whilst he was saying in the flyer that “we can provide these services”, he himself “could not possibly provide all the services personally”. He explained that he, as he put it, “brings in skillsets” and the areas listed in the flyer were “elements of my experience”. He went on to explain that the flyer was, again as he put it, “a precursor to see what the market was looking for and seeing what I could do with people around me”; it was, he said, “a market research type flyer”. In fairness, when pressed, Mr Nijhar accepted that, given what was stated in the flyer, there was a risk that it was misleading in the sense that the reader would not know which skills Mr Nijhar was saying that he himself possessed and which skills he would bring in from elsewhere. However, he insisted that the flyer was only a market research tool and nothing more than that, when it was clear to me that that cannot have been the case at all. It was quite obvious to me that Mr Nijhar produced the flyer in order to try to obtain work, and not merely as part of some sort of research exercise. In my view, in giving the evidence which he did concerning the flyer being a market research tool, Mr Nijhar was trying to explain away the fact that this was a document in which he was telling the reader that he had skills which he manifestly did not have – skills which, in evidence, he knew he would have to accept (as he did, indeed, accept) he did not possess.

Nor was I impressed by Mr Nijhar’s insistence, in cross-examination, that he was not overly bothered whether Dr Khambay purchased the Site or not. Leaving aside whether he had the motivation to make misleading statements to Dr Khambay in order to ensure that Dr Khambay (or Clubhire) made the purchase, something which Mr Goodkin submitted was the case and which Mr Nijhar disputed, it was nonetheless striking that Mr Nijhar was not prepared to acknowledge the obvious: that he stood to make considerable sums of money from Dr Khambay purchasing the Site and employing him (or Gravitas) to assist in its development, and that these sums would substantially exceed his current income. Mr Nijhar (or Gravitas) expected to earn at least £150,000 from Dr Khambay’s purchase of the Site, with Mr Nijhar estimating that he would work 110 days on the project. On the basis that this equates to about a third of a year, the £150,000 which Mr Nijhar expected to achieve for 110 days of work amounted to a yearly salary equivalent of £450,000. This is a substantial sum and compares particularly favourably with what Mr Nijhar was then earning whilst working at the Cabinet Office, which he stated in evidence was about £60,000 to £70,000 “depending on the time I put in”. I found Mr Nijhar’s insistence that he did not view matters in this way, that £150,000 was “not a lot of money” and that he is not “a money-motivated person” wholly unconvincing. In the circumstances, I do not accept that Mr Nijhar can have been quite as phlegmatic about Dr Khambay buying the Site as he suggested in his evidence. Indeed, it is instructive that, when pressed about his attitude to Dr Khambay not proceeding with the Site, Dr Khambay’s response was to say that the Site was “not the only project”. This was a reference to Dr Khambay purchasing a site in Feltham instead of the Site and to Mr Nijhar being part of that alternative project. It seems to me to underline Mr Goodkin’s point that Mr Nijhar was very much interested in making money from Dr Khambay making a purchase, whether that be of the Site or of the Feltham property.

Another example of Mr Nijhar’s evasive approach was his insistence that the primary, or at least a significant, source of the instructions which he received in relation to the Site, over the period when Gravitas was acting on behalf of Dr Khambay/Clubhire, was a Mr Gerry Dolan rather than Dr Khambay. I found this insistence unfathomable since Mr Dolan appears nowhere in any of the contemporaneous documents, whether as a sender of any message or as the recipient or as a party who was copied in or as somebody who was at any meeting or at all. This is not altogether surprising since Mr Dolan’s role at the time appears to have been, exclusively, as somebody who cared for Dr Khambay’s wellbeing from a health (rather than a business) perspective; Mr Dolan is a nurse. Despite this, Mr Nijhar maintained his insistence that Mr Dolan performed the different role which he described. I am quite clear that the reason why he did so is not because he was telling the truth about Mr Dolan’s role in the project, but because he appreciated that making out that Mr Dolan was involved allowed him to make assertions about what happened as the project unfolded which Dr Khambay was not in a position himself to gainsay. I consider that Mr Nijhar also probably calculated that, by stating that Mr Dolan was involved as opposed to Dr Khambay, this enabled him to maintain his case that Dr Khambay was often incapacitated through his alcoholism, and that that was the reason why Mr Dolan had to be involved. This was much to Mr Nijhar’s discredit and increases my disquiet at how Mr Nijhar approached the task of giving evidence in this case.

This last example and the other matters to which I have referred are, however, but illustrations of the unsatisfactory nature of the evidence given by Mr Nijhar. In the circumstances, I do not propose setting out other such instances. I do not, in particular, make findings concerning Mr Nijhar’s conduct as regards various charges levied by Mr Nijhar/Gravitas in respect of work carried out for Dr Khambay or his companies in relation to the obtaining of a licence for the Whispers Nightclub (£22,090.07 charged to Nice People Limited which ultimately led to a rather more modest payment of just £4,000) and in relation to ‘notice to cease’ building work issues concerning the Glassy Junction public house (£17,419.01 subsequently reduced to £6,000). Mr Goodkin submitted that I should conclude that this showed that Mr Nijhar was willing to charge for services in respect of which he had no expertise, and that he was unscrupulous in his approach to billing. However, besides noting Mr Nijhar’s willingness to accept substantially smaller amounts than he invoiced, it is not clear to me that I am in a position to make the further findings which Mr Goodkin invites me to make. Nor, despite Mr Goodkin’s invitation, am I prepared to conclude that Mr Nijhar fraudulently inflated his invoice dated 15 December 2006 concerning work he claimed was carried out in relation to demolition at the Site. Although it is not entirely clear what exactly Mr Nijhar (or Gravitas) did in this regard, nonetheless I do not feel able to conclude that he acted fraudulently without having more knowledge of what was involved and who did what.

I now come on to deal with the other witnesses. I should, first, however, make it clear that, in arriving at the views which I have in relation to Mr Nijhar, I have proceeded on the basis that he was not responsible for, nor aware of, certain letters which were sent anonymously to each of Dr Khambay’s witnesses in the immediate lead-up to the trial. These letters consisted of posters bearing Dr Khambay’s photograph and various other images, together with descriptions of Dr Khambay which I do not repeat here but which were highly derogatory. Attached to the posters was the draft witness statement from Sergeant Charlton to which I have previously referred. It was put to Mr Nijhar by Mr Goodkin that he was responsible for the sending of these letters. His answer was that it was “outrageous” for it to be suggested that he created the posters. He suggested that it was not in his nature to discredit anybody, a point he repeated shortly afterwards when, in a different context, he stated that he was “not in the business of discrediting anybody”. Although I am sceptical that Mr Nijhar had nothing to do with these letters, since plainly they must have been sent by somebody with access to Sergeant Charlton’s draft witness statement, a document which Mr Nijhar said he had obtained 3 or 4 weeks earlier and which he had disclosed only the week before the trial started, nonetheless I cannot be sufficiently confident that Mr Nijhar was involved in order to find that he was. It is for this reason that I have proceeded on the basis that he lacked responsibility and awareness. My assessment of Mr Nijhar’s evidence is, accordingly, arrived at on the basis that he was not involved in, nor aware of, the letters which were sent to the Claimants’ witnesses.

I can deal with the other witnesses rather more briefly, not least because I considered them to be witnesses who, without exception, gave evidence which was both honest and straightforward. They all were quite clearly doing their best to assist the Court, and they were doing this with an independence which was very evident to me and which was to their considerable credit. The extent to which their evidence matters as regards the issues which I must determine nonetheless varies somewhat. The witness whose evidence I regarded as having the greatest bearing on those matters was Mr Mehli, and I start with my assessment of him.

Mr Mehli was the person who first brought the Site to Dr Khambay’s attention. He had previously worked with Dr Khambay in relation to the purchase of Osterley Sports Club and is somebody with considerable experience in property development and, certainly, property purchases. He described himself in his witness statement as a property consultant, and described how in about May 2006 a friend of his introduced him to the Site. He inspected it and concluded that it represented a good investment opportunity. He was particularly attracted by the fact that the Site had a lot of road frontage because, he explained, that provided a lot of options for residential and commercial development. He was sufficiently interested to make an offer, through his company, to purchase it for £600,000. That offer was rejected shortly afterwards, but in the meantime he had discussed the Site with Dr Khambay and a couple of other potential purchasers. He stated that he showed Dr Khambay the Site on Google Earth and asked him whether he would be interested in the Site at £600,000, the amount which he told him his own company had offered. Dr Khambay said that he would, indeed, be interested. Mr Mehli added how he had explained to Dr Khambay in that initial approach that the Site could, he considered, be used for redevelopment, with the buildings being demolished and the land (an acre or so) then being used for mixed commercial and residential development.

A few days later, Mr Mehli’s company’s £600,000 offer having been rejected, Mr Mehli (again through his company) made an increased offer in the sum of £700,000. That offer was also rejected a short while later. About a week after that, Mr Mehli not having spoken to Dr Khambay in the meantime, Mr Mehli learned that Punch Taverns, which owned the Site, had agreed a sale price of £1 million with another party. Punch Taverns asked Mr Mehli whether his company wanted to match that price. It did not, but Mr Mehli spoke again to Dr Khambay and asked whether he would be interested in purchasing the Site at that price. Dr Khambay’s answer was that he was not interested. A month or so later, however, in late May or early June 2006, Mr Mehli learned that Punch Taverns had been unable to sell to the other party owing to certain problems with the roof of the building as well as concerns over title. Mr Mehli was asked whether he was interested in purchasing at a discount, and he then made a further offer again in the sum of £600,000. That offer was rejected and so Mr Mehli then made an offer of £700,000. That offer was also turned down, and so Mr Mehli (or perhaps his company) offered £800,000 – an offer which was again declined.

Mr Mehli at that stage made contact with Dr Khambay again, explaining about the other party’s interest having ceased and why that was the case. Dr Khambay indicated that he would be interested at the right price. Mr Mehli was then told that Punch Taverns had received an offer of £875,000, and that an offer matching this would be required if the Site were to be secured. Mr Mehli told Dr Khambay about this, and he told him that he would get back to him. It was in this context, as I shall explain later, that ultimately Dr Khambay (or Clubhire) came to make a revised offer, have that offer accepted, exchange contracts with Punch Taverns and become the Site’s owner. It was in this context also that Mr Mehli was introduced to Mr Nijhar and Mr Nijhar became involved in the purchase of the Site in place of Mr Mehli. Again, these are matters which I must address in some detail later. What is important for present purposes is that it was Mr Mehli mainly, and to some (rather lesser) extent Mr Lakhani, who was able to give evidence concerning Dr Khambay’s dealings with Mr Nijhar in the lead-up to the Site’s purchase by Dr Khambay/Clubhire. It was Mr Mehli who, therefore, gave evidence concerning a meeting he had with Mr Nijhar and Dr Khambay (but not Mr Lakhani) at Dr Khambay’s house in “about June 2006”, a dinner at a restaurant called Laguna on 28 June 2006 attended by Mr Mehli, Mr Nijhar and Mr Lakhani (but not Dr Khambay), a meeting on 12 July 2006 at Dr Khambay’s house attended by Mr Mehli, Mr Nijhar and Dr Khambay (but not Mr Lakhani) and a further meeting, again at Dr Khambay’s house, on 19 July 2006 attended again by Mr Mehli, Dr Khambay and Mr Nijhar (but not Mr Lakhani).

As these are the critical meetings (strictly not the Laguna restaurant meeting because Dr Khambay did not attend this) when it is alleged by Dr Khambay (and Clubhire) that Mr Nijhar made the various representations which are central to the present claim, it will be appreciated that Mr Mehli’s evidence in relation to these various meetings is of critical importance. Besides Dr Khambay and Mr Nijhar themselves, Mr Mehli is the only witness who was able to give direct (as opposed to hearsay) evidence in relation to the misrepresentations which Dr Khambay has alleged. Unlike Dr Khambay and Mr Nijhar, Mr Mehli was an independent witness. He had nothing to gain from giving evidence which favoured either side. He was, as he told me in no uncertain terms, only concerned “to speak the truth”, and I am quite satisfied that this is precisely what he did when he gave his evidence. As he explained, he would have been willing to make a witness statement at Mr Nijhar’s request had it not been for the fact that he had already agreed to provide a witness statement in response to Dr Khambay’s (or his solicitors’) request that he do so. He denied that he had been threatened by Dr Khambay to give evidence on his behalf, and that he had told Mr Nijhar during 2011 that he had been so threatened. He was clear that he had merely told Mr Nijhar that he had been asked by Dr Khambay to provide a witness statement and that his position was that he “would only tell the truth whoever it helps”. That, I am sure, is precisely what he did. Indeed, as will appear, Mr Mehli’s evidence did not wholly support Dr Khambay’s version of events, not merely in relation to minor detail but in relation to important aspects.

Mr Mehli’s impartiality was also borne out by the fact that he explained in cross-examination that he tried to mediate between Mr Nijhar and Dr Khambay in relation to their dispute. It is further underlined by evidence which he gave during re-examination to the effect that, in the same way as he had had previous dealings with Dr Khambay (as regards the Osterley Rugby Club), so he had had subsequent dealings with Mr Nijhar after Mr Mehli had dropped out of the proposed purchase of the Site, which he did (as will appear) after the meeting which took place at Dr Khambay’s house on 19 July 2006. Mr Mehli explained that he and Mr Nijhar were both involved in a project in Enfield, Mr Mehli arranging for Mr Nijhar to be paid for preparation of a report concerned with certain planning issues. This was in addition to a project in Bedford in which, again, Mr Nijhar became involved through Mr Mehli, Mr Nijhar receiving payment for certain lobbying-type services which he provided. Clearly Mr Mehli, businessman that he is, was keen to continue on good terms with Mr Nijhar. In these circumstances, I reject any suggestion that, in giving his evidence, Mr Mehli in any way favoured Dr Khambay over Mr Nijhar. On the contrary, as I say, I consider that Mr Mehli was a scrupulously fair and independent witness. I reject the specific suggestion made by Mr Mason that his evidence was lacking in independence because he had been shown the Particulars of Claim. That Mr Mehli was shown the Particulars of Claim is not something which I find remotely surprising. In any event, I regard the criticism as particularly lacking in substance once it is appreciated that, not only was Mr Mehli shown the Particulars of Claim, but he was also asked to comment, in detail, on Mr Nijhar’s Defence and in certain respects he agreed with what Mr Nijhar there alleged. Again, this seems to me to underline Mr Mehli’s independence.

As for Mr Lakhani, I regarded him also as somebody who was doing his best to assist the Court. I do not accept that Mr Mason’s characterisation of his evidence as “vague, muddled and evasive” is fair. Nor do I consider that his close relationship with Dr Khambay, as his long-term accountant and through the fact that his wife works for Dr Khambay three days a week (as well as being secretary in certain of Dr Khambay’s businesses), justifies a conclusion that Mr Lakhani’s evidence is to be mistrusted. Mr Lakhani was, in fact, a careful witness and clearly a careful professional. He gave his evidence with clarity and in a level of detail which was impressive, especially bearing in mind the length of time which has passed since the events in question. It was to his considerable credit that he managed to do this in circumstances where Mr Nijhar had made complaints which had led to Mr Lakhani being the subject of two disciplinary inquiries by his professional body, the Association of Chartered Certified Accountants, as a result of Mr Lakhani providing accountancy services for Mr Nijhar (or his company, Gravitas). Those complaints were each dismissed, the second as recently as October last year, just a few weeks before the trial. It is clear that they were complaints which were not regarded by Mr Lakhani’s professional body as justified. They must, however, have caused Mr Lakhani considerable upset, and it might have been understandable if a certain amount of animosity had been apparent during his cross-examination by Mr Mason on Mr Nijhar’s behalf, particularly when he was asked (as he was) about the matters which were the subject of Mr Nijhar’s (unwarranted) complaints. Mr Lakhani, however, remained composed and gave his evidence in a dignified manner. This was, as I say, to his considerable credit. It also, to my mind, demonstrated that Mr Lakhani was a witness of truth, even though in one respect (concerning a meeting which took place on 7 August 2006), as I shall come on to explain, it does seem to me that he was mistaken.

The other two witnesses called on Dr Khambay’s behalf were Mr Khurll and Mr David Prichard. Like Mr Mehli and Mr Lakhani, I regarded Mr Khurll and Mr Prichard as good witnesses who gave their evidence in an honest and open way. As for Mr Khurll, he is somebody who has been involved in property transactions in the Southall area of West London for around 20 years. He is currently a director of Monarch Commercial Limited, a company which provides commercial property sales and agency services. I am not aware of any justification for Mr Nijhar’s suggestion, when he gave evidence, that Mr Khurll was not regarded in the Southall community as being trustworthy. He explained in his witness statement that he had known Dr Khambay for a number of years and that he had, as he put it, been involved in property transactions with Dr Khambay on several occasions. He explained, and repeated in cross-examination, that he and Dr Khambay spoke regularly, perhaps up to seven times a week. His evidence was that he met Mr Nijhar in the middle of 2006, having been invited by Dr Khambay to his house in order that the possibility of Mr Khurll working alongside Mr Nijhar on projects for Dr Khambay could be explored. He stated that the meeting was concerned with a site in Southall called the Glassy Junction and a site in Dudley (the Site). Mr Khurll was already involved in relation to the former, but not the latter and, indeed, Mr Khurll never became involved with the Site. He explained how Mr Nijhar was, as he put it, “driving the meeting”, and how Mr Nijhar “seemed keen to get involved” in the Glassy Junction project as well as the Site. To this end, Mr Khurll’s evidence was that Mr Nijhar talked about his experience in housing associations and his experience also of local planning authorities. As far as Mr Khurll was concerned, Mr Nijhar “was clearly trying to sell himself” to Dr Khambay. In particular, according to Mr Khurll, Mr Nijhar “spoke in some detail about his contacts in the housing associations and local authorities in both Southall and Dudley”. Mr Khurll found Mr Nijhar to be “a very engaging character”. Although I do not doubt that what Mr Khurll had to say as to these matters is correct, it should be acknowledged, however, that he was not at the meetings in which Dr Khambay alleges that the misrepresentations now relied upon by Dr Khambay/Clubhire were made. His evidence was very generalised and unspecific. I am not greatly assisted by it as a result, other than in finding it broadly instructive in gaining an understanding of the dynamic between Mr Nijhar and Dr Khambay when they first became involved together in relation to the Site. I agree with Mr Mason, therefore, that Mr Khurll’s evidence is only of limited value to me in determining the issues which arise in these proceedings.

This leaves, so far as Dr Khambay’s and Clubhire’s witnesses are concerned, Mr Prichard. He was an impressive witness. He is a planning consultant of considerable experience, who gave evidence not in relation to any pre-contractual events but in relation to a much later stage, post-February 2010, after he had been instructed by Dr Khambay in order to obtain planning permission. Mr Prichard also, in his witness statement, commented on the earlier efforts made by Mr Nijhar/Gravitas to obtain planning permission. He was very critical of those efforts, describing in his oral evidence “serious shortcomings” which included an absence of “proper architectural drawings” and a “failure to understand fundamentals of development”. As far as he was concerned, again as he put it orally, “the scheme cannot work”, referring to what had been presented to the planning officers at the Council, as will appear, in February 2007. He was adamant that there were a number of serious issues which needed to be resolved before the planning officers were approached, and that these issues (including a car park access issue) had been “completely ignored” in the drawings which had been submitted. What was submitted was, as he put it in re-examination, of “no value at all”; it had been a “pointless exercise” which would have seriously undermined the project’s credibility in the eyes of the planning officers. These were powerful criticisms. Mr Prichard was, as I say, an impressive witness.

I turn now to Mr Nijhar’s witnesses: Mr Richard Holmes, Mr Duncan McCallum, and Mr Brar. I deal first with Mr Brar, who was not required by Mr Goodkin to attend to be cross-examined. In his witness statement, which was made on 5 August 2014 but which was only sought to be relied upon by Mr Nijhar during the course of the trial, Mr Brar explained that the Due Diligence Report to which I have previously referred was a report which had been commissioned by him. He stated that he was content for Mr Nijhar to make full use of the report in the present proceedings. He then requested that he be permitted to “appear in person to provide the Trial a firsthand experience of the dealings and affairs of Dr A.S. Khambay, as covered in the report and subsequently from June 2010 onwards” (the time when the report had been prepared). In the event, Mr Mason did not press this last request and was content that Mr Brar should not attend to give live evidence in view of Mr Goodkin indicating that he had no objection to the witness statement being admitted late and did not require to cross-examine Mr Brar. I have previously addressed the Due Diligence Report and the attack made on Dr Khambay by Mr Mason, on Mr Nijhar’s behalf. I do not repeat what I have had to say about this.

As for Mr Holmes, he is a chartered surveyor who runs his own consultancy, Richard Holmes Property Consultants Limited. He was, however, previously Group General Manager, Property Professional Services for the Mid-Counties Co-operative Society Limited (“Mid-Counties Co-Op”), a position he had held since 1990. The significance of Mid-Counties Co-Op will be addressed later, but what matters for present purposes is that Mr Holmes explained in his witness statement how, in late 2007, he was approached by Mr Nijhar concerning the Site and how Mid-Counties Co-Op had expressed an interest in the Site but that that interest had ceased “after the beginning of 2010”. He then set out a certain amount of chronology, albeit without the benefit (as he readily acknowledged) of having himself retained the relevant documents. In cross-examination, he (again very fairly and to his credit) agreed that the plans which he had been shown by Mr Nijhar were, as he put it, “schematic” and “not developed to the level you would expect for planning consent”. He further confirmed that he had not been told by Mr Nijhar that the Council had, as will appear later, very firmly rejected the plans which Mr Nijhar was showing him. It was apparent to me that, in the circumstances, and through no fault of Mr Holmes, the value of what he had to say was limited. Mr Holmes was clearly a straightforward witness. There is no doubt that he was doing his best to assist the Court. It is simply that what he had to say was not of much (if any) value.

The same unfortunately applies to the evidence which was given by Mr Nijhar’s other live witness, Mr McCallum. Like Mr Holmes, Mr McCallum is a property professional of considerable experience, a chartered town planner who in 2009 was a director of DPDS Regional Limited, a town planning consultancy based in Bristol. He explained in his witness statement how he was approached by Mr Holmes to examine the planning prospects for a mixed development with retail use at the Site. He explained how he had worked with the Co-Op (by which I took him to mean Mid-Counties Co-Op) on a number of planning projects since 1995. He explained how he visited the Site, how he then submitted a fee proposal to Gravitas, and how (although the proposal had yet to be accepted) he then attended a meeting with the Council planning officers to assess the likely response to a planning application “prior to the go ahead for work on the project being given”. This took place on 1 December 2009, and he stated that the officers expressed concern that the proposed development might have an adverse effect on Dudley town centre. Subsequently he heard nothing more, although he stated that he “formed the impression that the project was being handled in a professional way”. In cross-examination, however, Mr McCallum (like Mr Holmes) acknowledged that he had not seen any of Mr Nijhar’s correspondence with the Council and that, therefore, the extent of his knowledge of what had gone on before was limited. He agreed also that his reference in his witness statement to his having formed the impression that “the project was being handled in a professional way” was based solely on two meetings which he had had with Mr Nijhar and he was not expressing any view about Mr Nijhar’s handling of the project more generally. Therefore, although (as with Mr Holmes) I do not doubt Mr McCallum’s willingness to give evidence which is straightforward, I nonetheless do not find Mr McCallum’s evidence particularly helpful.

As I have explained, there are two aspects to the case advanced by Dr Khambay/Clubhire in these proceedings. The first aspect relates to the period prior to Dr Khambay/Clubhire’s purchase of the Site, specifically the allegations that Mr Nijhar made representations (i) that he had received assurances from local planning officers in Dudley that planning permission would be granted quickly for mixed retail and residential use with a supermarket development of at least medium size, (ii) that housing associations and retailers had told him that they were interested in the Site, and (iii) that Dr Khambay was guaranteed to make a profit of at least £500,000 if the Site was purchased and planning permission obtained. The second aspect concerns the allegation that Mr Nijhar made certain specific representations on 14 August 2007, and that on the faith of these further representations Gravitas was paid certain monies. In what follows, I deal with these two aspects separately, starting obviously with the case which focuses on the pre-purchase period.

Apart possibly from briefly coming across each other at a charity event long before, something recalled by Mr Nijhar but not apparently by Dr Khambay, Mr Nijhar and Dr Khambay first met in about the middle of 2006. They were introduced by Dr Khambay’s brother, Vinny. Mr Khambay is an electrical engineer, although Mr Nijhar appears to have thought that he was an architect as that is what was stated in the Defence. Mr Goodkin suggests that this was a deliberate attempt by Mr Nijhar to support his argument that Dr Khambay was surrounded by people with property expertise. In my view, that is unlikely to be the position. It is rather more likely that Mr Nijhar simply made a mistake. I accept, therefore, that Mr Nijhar did, indeed, think that Mr Khambay was an architect. Be that as it may, Mr Nijhar’s evidence was that Mr Khambay asked him to see Dr Khambay because Dr Khambay was “facing some difficulties” and he (Mr Khambay) thought that Mr Nijhar “had the right qualities to help him”. He explained that these difficulties related to certain projects in which Dr Khambay was involved and in relation to which there were problems with builders.

He said that Mr Khambay had not been very specific in making the request to him. Mr Nijhar was adamant that, although he knew that Dr Khambay was a dentist, he had not known that he was wealthy. He added that, in meeting Dr Khambay, he did not intend to persuade him to do business with him; nor did he hope that Dr Khambay would engage him as a property development manager. I consider this unlikely, however. Whilst I accept that Mr Nijhar is unlikely to have had any specific project in mind when he first met Dr Khambay, given that Mr Nijhar would not have known what projects Dr Khambay was, or was intended to be, involved in, nonetheless there is no dispute that, when they met in 2006, Mr Nijhar told Dr Khambay about his background, experience and qualifications. In these circumstances, I struggle to see that Mr Nijhar would not have been trying to coax Dr Khambay into engaging him or working with him on projects, whether then or in the future. If that was not the case, it is not clear why Mr Nijhar would have told him what he did about himself, specifically, as Mr Nijhar admitted in evidence: that he was well connected to a number of housing associations across the country; that he had started Inquilab and this was very successful, had 900 dwellings and was expanding rapidly; that he had been in the housing industry for twenty years; that he had worked for a number of charities; that he had been a Labour councillor for 12 years for the Perivale ward; that he knew a lot of local councillors personally; that he knew several members of the House of Lords and they were personal friends of his; that he had a degree in economics from the London School of Economics; and that he had known HRH The Princess of Wales, was involved with the Princes’ Trust and was organising a gala with Princess Diana.

These are not things which Mr Nijhar would have told Dr Khambay unless he was trying to impress Dr Khambay, and he can only have been trying to do this because of the possibility that the two of them might work together. This seems to me to be obvious. It makes no difference that Mr Nijhar denied making other statements alleged by Dr Khambay, including that he knew a large number of planning officers throughout the country, that he had worked for then Chancellor of the Exchequer Gordon Brown’s monetary policy unit, that he knew a lot of MPs and that he also knew a lot of people at the Department for the Environment. The simple fact is that what he admitted telling Dr Khambay represented a list of achievements and a description of his experience, and he can have imparted such information only because he was trying to impress Dr Khambay in the hope that work might result. My conclusion in this regard is, furthermore, borne out by what Dr Khambay explained, in his witness statement, happened after this first meeting between Dr Khambay and Mr Nijhar, which was that Mr Nijhar tried to persuade Dr Khambay to become involved in various projects, including the acquisition of a property in Southall which was owned by Inquilab. Although Mr Nijhar denied the allegation put to him by Mr Goodkin that he had offered this property to Dr Khambay for £200,000 less than its real value, he nonetheless admitted that he did bring the property to Dr Khambay’s attention and suggest that he buy it. Mr Nijhar, therefore, clearly was interested in doing business with Dr Khambay, and he was also quite obviously aware both of Dr Khambay’s interest in buying properties and of his financial ability to purchase. On that basis, I consider it more likely than not that, contrary to the evidence given by Mr Nijhar, he was, indeed, wanting at this time to work with Dr Khambay and was aware that that business was likely to entail property development.

Mr Goodkin suggested that the point goes still further, in that Mr Nijhar’s showing of the Inquilab property to Dr Khambay, and specifically his suggestion that Dr Khambay might purchase it at an undervalue, demonstrates also that Mr Nijhar is a dishonest individual. I decline, however, to find that Mr Nijhar made such a suggestion. I am satisfied that that is not something which Mr Nijhar is likely to have done since, as he explained when the point was put to him in cross-examination, he had set up Inquilab, it was, as he put it, “like my own child”, and he had sat on its board for some twenty-five years. In these circumstances, I regard it as unlikely that Mr Nijhar would have been prepared to see the Inquilab property sold at an undervalue. It may be that Mr Nijhar suggested that £700,000, the price he suggested that Dr Khambay could purchase the property for, was a good price and that he might be able to make a £200,000 profit were he to buy. That is not, however, the same thing as saying that a property with an actual value of £900,000 could be purchased at just £700,000.

As I have previously mentioned, it was Mr Mehli who introduced Dr Khambay to the possibility of purchasing the Site. He did this shortly after Punch Taverns had rejected an offer which he had himself made to purchase the Site, having had the Site brought to his attention by a friend in about May 2006. It was in the context of Mr Mehli’s discussions with Dr Khambay concerning the Site that Dr Khambay introduced Mr Mehli to Mr Nijhar, and the meeting at Dr Khambay’s house in “about June 2006” took place. This was a meeting attended only by Dr Khambay, Mr Mehli and Mr Nijhar. It was a meeting which was preceded by Dr Khambay making contact with Mr Nijhar, as it is alleged in paragraph 6 of the Particulars of Claim and as admitted in paragraph 8 of the Defence, “in order to discuss what if any development potential the Site had and whether it would be advisable for the Claimant to purchase it”. Dr Khambay’s evidence, which I accept notwithstanding Mr Nijhar’s denial, was that, when he contacted Mr Nijhar, he made it clear that he would not be interested in purchasing the Site unless there was significant potential there and it could be “turned around quickly”. I rather doubt that Dr Khambay repeated this to Mr Nijhar “every time we met”, as he alleged, but I am confident that nonetheless Mr Nijhar would have clearly understood that Dr Khambay was interested in buying the Site only if there was the significant potential and ability for quick turnaround which was mentioned when Dr Khambay first made contact with Mr Nijhar.

It follows that the first of the meetings between Dr Khambay, Mr Nijhar and Mr Mehli took place after Mr Mehli had brought the Site opportunity to Dr Khambay in May 2006, and after Dr Khambay had the same month asked Mr Nijhar to get involved with the Site. The meeting took place, it seems, a matter of a few weeks later, and so in June 2006. I say this based on Mr Mehli’s evidence, whose evidence was that, although he did not recall precisely when the first meeting took place, “it was about June 2006”, and not on the evidence given by Dr Khambay whose evidence was that he could not recall when the first meeting took place but that he estimated that it was “in about early July 2006”. It is fair to say that Dr Khambay’s evidence as to when meetings between Mr Mehli, Mr Nijhar and him took place was vague. He admitted, indeed, that he did not remember the dates, merely recalling that “there were about 4 or 5 meetings” and that they took place “about once per week”. As for Mr Nijhar, in his witness statement he did not deal with the meetings with any precision at all. In the circumstances, it seems to me that Mr Mehli’s evidence is the best evidence available on the matter of when the meetings took place. Indeed, as will appear, I consider that the evidence given by Mr Mehli provided the most reliable evidence as to these meetings generally, and in relatively broad terms at least as to what happened at them.

As I say, the first meeting, “in about June 2006” at Dr Khambay’s house, was the meeting at which Dr Khambay introduced Mr Mehli to Mr Nijhar. Mr Mehli’s evidence was that the meeting lasted about 45 minutes to 1 hour, and that Dr Khambay told him about Mr Nijhar’s “history”, explaining that Mr Nijhar was working in the property sector “for a lot of companies and on a lot of schemes”. Mr Mehli explained that the three of them also talked in general terms about what he was doing in business terms. According to Mr Mehli, the main purpose of this meeting was to see whether he and Mr Nijhar got on. He said that he was very impressed by Mr Nijhar, and that Mr Nijhar seemed to Mr Mehli to “know what he was doing” and also “to know all of the right people”. I am clear that what Mr Mehli had to say about this was the case. I am also clear that at the same meeting, as Mr Mehli explained, the Site was discussed and Mr Nijhar said that he could see great potential in it. Mr Mehli’s evidence was that his impression was that Mr Nijhar and Dr Khambay were “a strong unit” and they wanted him to work with them.

Mr Mehli added that, in discussing how the development of the Site would proceed, the plan appeared to be that Mr Nijhar would (as he put it) “run the Site and deliver the project to generate profit”. Mr Mehli suggested to Dr Khambay that the three of them should all work together as Dr Khambay and he had not undertaken any projects together recently. Mr Mehli, therefore, suggested that he should (again as he put it) “join the company”, with Dr Khambay providing the finance and Mr Mehli and Mr Nijhar working together “to deliver the Site” in return for Mr Mehli and Mr Nijhar each receiving 25% of the profit. Again, I am clear that this is, indeed, what happened. Mr Mehli went on to say that Mr Nijhar said that Dr Khambay wanted him (Mr Nijhar) to drive the scheme forward. Again, I am satisfied that Mr Nijhar said something along these lines.

Mr Mehli also gave evidence that Mr Nijhar said that he knew Dudley very well, that he knew the council there well, and that he personally knew planning officers at the Council very well, which would enable him to maximise planning and achieve the maximum density of developments. According to Mr Mehli, Mr Nijhar said in this context that “planning was not a problem”. These are matters to which I shall return later, when also considering Mr Mehli’s further evidence that, Mr Mehli having mentioned that it was an option to “do a turnkey with a housing association”, Mr Nijhar’s response was to say that “he knew people at housing associations” and that “he was going to talk to them”.

Mr Mehli summarised the meeting by saying that he had the impression that throughout Mr Nijhar was making out that, whatever Mr Mehli could do, he (Mr Nijhar) could do better. I am clear that that is probably right. Indeed, Mr Mehli himself very frankly accepted that “there was a degree of competition” between Mr Nijhar and him as to “who would be the driving force of the project”, and that, therefore, both of them were, in effect, trying to sell themselves to Dr Khambay. I am quite sure that this is, indeed, what both Mr Mehli and Mr Nijhar were doing, and understandably enough as it seems to me. What Mr Nijhar had to say during this sales process is, however, a different matter, and is something to which, as I say, I must return.

Mr Mehli’s evidence was that, at the first meeting, there was no discussion of what profit would be generated. According to him, the meeting ended with everybody agreeing that matters would be explored further, Mr Mehli making it clear that he had no problem with working with Mr Nijhar as long as they could agree an appropriate profit share. It was with this in mind that, a few days after the meeting, Mr Mehli telephoned Mr Nijhar to discuss how to take matters forward and, specifically, an appropriate profit share. Mr Mehli’s evidence (which again I accept) was that he told Mr Nijhar that he was happy to work with Mr Nijhar on the basis that they each received a 25% share of the profit. Mr Nijhar agreed with this, the two of them deciding that Mr Mehli should be the person to negotiate with Dr Khambay on their joint behalf. I accept also Mr Mehli’s evidence that, during this conversation, Mr Nijhar told Mr Mehli that “he would sort out the planning” as he had “good contacts and knew good architects”.

Mr Mehli went on to explain that, a couple of days later, he telephoned Dr Khambay, and Dr Khambay told him to make contact with Mr Lakhani so that he could make arrangements to set up a company. This must be right because it explains why subsequently, on 28 June 2006, Mr Lakhani went to a dinner at the Laguna Restaurant along with Mr Mehli and Mr Nijhar (but not Dr Khambay). Mr Mehli’s evidence is that the dinner lasted between 1½ and 2 hours. Its primary purpose was to discuss arrangements for setting up the company. However, there was also some discussion about the Site project, specifically various schemes which could be pursued. Mr Mehli’s evidence was that Mr Nijhar said that “we would have no problems getting planning”, and that “we could do a housing scheme, with high density flats or apartments at the back and shops and flats at the front”. According to Mr Mehli, Mr Nijhar “also had ideas about a commercial development”, with planning permission being obtained for a supermarket and a pharmacy, for example. Again, these are aspects to which I shall return later and so I say no more about them at this stage. I am clear, however, that Mr Mehli was right when he added that, in these discussions, he and Mr Nijhar were aiming to achieve something in the order of £1.2 million to £1.3 million, and that the various schemes they were talking about had that type of target in mind.

The next meeting took place on 12 July 2006, when Mr Mehli met up with Dr Khambay and Mr Nijhar again at Dr Khambay’s house. Mr Mehli’s evidence was that he only attended this meeting for about half an hour, and that the discussion focused on “figures” and various different schemes. Although Mr Mehli was not able to recall the detail, his evidence (which I accept) was that “the worst case scenario schemes led to profit of about £200,000 to £250,000, which was based on £800,000 for the residential development and £400,000 for the commercial component”, and that the “best case schemes” would result in a profit of £700,000 to £1,000,000. Mr Mehli went on to explain (as again I accept) that the “middle ranking schemes were looking at about 25 residential units” which, together with some kind of commercial development, “would lead to a sale price of about £1.5 million or £1.6 million and a profit of about £500,000 or £600,000”. According to Mr Mehli, Dr Khambay said that he would be happy if he made a return of about 20% on his investment in the Site or about £200,000. Mr Mehli added that Mr Nijhar said at this meeting that he would be able to remove a particular covenant concerning the Site and that this would give Dr Khambay “carte blanche to develop the Site however he wanted”. Again, I accept that evidence. By the end of this meeting, Mr Mehli explained, the three of them had not yet finally agreed that “we would all be partners”. This was apparently a matter which would need to be taken further forward with Mr Lakhani’s input.

The 12 July 2006 meeting was followed, a week later, on 19 July 2006, by a further meeting. This, again, took place at Dr Khambay’s house and, as before, was attended by Mr Mehli, Mr Nijhar and, obviously, Dr Khambay himself. This meeting lasted about 30 minutes. It started with Mr Mehli talking about the 25% profit share which he and Mr Nijhar were wanting Dr Khambay to agree to their each receiving. Initially, Dr Khambay seemed agreeable to this. However, Mr Mehli explained (and again I accept) that, by the end of the meeting, Dr Khambay had changed his mind, taking him to one side and telling him that he preferred instead to pay Mr Mehli an agent’s fee. Mr Mehli said that, on this basis, he wanted to be paid £30,000, and Dr Khambay agreed to this. It followed that Mr Mehli was no longer going to receive a profit share. Mr Mehli’s evidence was that he felt somewhat aggrieved that Dr Khambay had changed his mind in this way.

As far as Mr Mehli was concerned, that was the end of his close involvement in the project, but he told Dr Khambay that he would still help with the Site if he could. Indeed, subsequently, in the immediate lead-up to the purchase of the Site, Mr Mehli was asked by Dr Khambay to ask Punch Taverns to agree to a short delay on the exchange date, and Mr Mehli was able to achieve this. Also, Mr Mehli stated that Dr Khambay called him “a couple of times”, as did Dr Khambay’s solicitor, Mr Julian Bloom, and Mr Nijhar also, asking him to use his influence at Punch Taverns to secure agreement to an extension to the date for completion. Dr Khambay simply said that he was not ready to exchange. Mr Nijhar asked Mr Mehli to try to delay the completion since, Mr Nijhar told Mr Mehli, that would help in submitting a planning application in respect of the Site.

In addition to these various discussions, in meetings and on the telephone, there was also a certain amount of correspondence in this period, up until the time when the Consultancy Contract was entered into and the Site purchased. This started, as far as I can tell, with an email from Mr Nijhar to Mr Lakhani on 12 July 2006. In that email, Mr Nijhar referred to a meeting which he had had with Dr Khambay that day and also to a meeting the previous Thursday which, it seems from what Mr Nijhar wrote, was attended by Mr Nijhar, Mr Lakhani and (although only in part) by Dr Khambay. The email proceeded to refer to a letter which Mr Nijhar said he had drafted to be sent in relation to “the Feltham site”, before going on to state that “the Dudley site is now actively being pursued by me and Amar’s [Mr Mehli’s] cousin is completely out of the picture giving us a clear run”. Mr Goodkin submitted that this demonstrates that Mr Nijhar was taking the lead in “actively pursuing” the purchase of the Site, and that this was difficult to reconcile with Mr Nijhar’s evidence in cross-examination that Mr Mehli was the driving force in relation to the Site rather than him. I agree with Mr Goodkin about this. It seems to me that Mr Nijhar was quite obviously regarding himself, and portraying himself to Mr Lakhani, in this email as being in charge of the proposed Dudley project. Mr Nijhar’s insistence that what the email had to say did not accurately reflect the reality is not credible. It is also undermined by the fact that Mr Nijhar apparently chose not to copy Mr Mehli into this email. I am quite clear that what Mr Nijhar wrote in the email reflected his thinking and intentions at the time.

This conclusion is also supported by the fact that on 17 July 2006, a week after Mr Nijhar’s email to Mr Lakhani, the Council sent Mr Nijhar (not Mr Mehli) a letter in which reference was made to “our earlier conversations regarding the affordable housing elements of any future s 106 agreement”. The author of this letter was Mr Andrew Leigh, who described himself as the “Acting Head of Strategy & Development”. He went on to say that the Council (he used the word “We” actually) “would be keen to support flats on the site ... as this would help to address the lack of variety in the area both in terms of size of property and tenure”, as well as to make certain other observations concerning the type of development which might be undertaken at the Site. When asked about this letter in cross-examination, Mr Nijhar was reluctant to acknowledge that it showed that he had been carrying out investigations. Somewhat oddly, his response was that he had merely been “investigating for the SPV”, a reference to the company which it was at that stage contemplated would be set up to develop the Site. I was clear that this was another example of Mr Nijhar striving to give evidence which he thought would assist his defence, rather than simply giving an answer which reflected the truth. Mr Nijhar plainly had in mind that, if he could demonstrate that he was acting for a company which, in the event, was not incorporated, then he could avoid liability in these proceedings. It would, however, have been better if Mr Nijhar had instead simply agreed with Mr Goodkin that the Council’s letter demonstrates that he had been carrying out investigations. Aside from anything else, it seems to me that the fact that the letter was written by Mr Leigh supports Mr Nijhar’s case that the only mention he made of discussions with the Council when speaking to Dr Khambay at about this time was of conversations which he had had with the Housing Strategy team, and not the Council’s planning officers.

Mr Goodkin relied also on a letter which Mr Nijhar sent to Mr Lakhani on 28 July 2006. In this letter, under a heading saying “The Site”, Mr Nijhar stated that the “site and property has been inspected by both Amar [Mr Mehli] and I on separate occasions”. He then went on, in the next sentence, to ask whether “a formal valuation of the site” was needed, apparently suggesting that this was a matter for Dr Khambay to decide. The letter then went on to refer to various issues, including a point concerning the existing betting shop on the Site, a restrictive covenant, and “searches and Reports”. Mr Nijhar ended, under a heading saying “Purchase Price and VAT”, by saying that “The purchase price is right” and then making a point concerning VAT and another point relating to “the completion date” which he stated should be “set three/four months from exchange (Amar [Mr Mehli] to confirm)”. Mr Goodkin put to Mr Nijhar that this letter demonstrates not only that he had carried out investigations but, furthermore, that he was holding himself out to Mr Lakhani (and so to Dr Khambay) as a property professional. Again, Mr Nijhar’s response was unimpressive, insisting that he “was not a property development expert” and, moreover, that the property “expertise within the planned SPV” rested not with him but with Dr Khambay, whom he described as having “done a number of planned investments”. Again, this was unimpressive evidence. It is quite clear to me that Mr Nijhar was purporting to offer a professional opinion in this letter and that the letter also shows, conclusively and consistent with what had been decided by Dr Khambay at the 19 July 2006 meeting, that it was Mr Nijhar who had done the bulk of the work in relation to the Site up to this point.

This is further illustrated by an email which Mr Lakhani sent Mr Nijhar the next day, 29 July 2006. In this email, Mr Lakhani addressed a number of matters, including (at point 2) what he described as the “costs of site feasibility and associated work to date of £13,500” which he proposed should “be paid from the profit share in due course” and in relation to which Mr Lakhani asked Mr Nijhar to provide “a detailed breakdown ... with supporting documentation for my files”. Mr Lakhani then went on (at point 3) to propose that Mr Nijhar’s profit share (the words he used were “Your profit share”) “should be 20%, and not 25%”. Mr Lakhani concluded by reminding Mr Nijhar “that you are to let me have a letter on Gravitas Consulting letterhead confirming your services as a project manager, and detailing the work involved”. Asked about what Mr Lakhani had written at point 2, Mr Nijhar again gave unsatisfactory evidence, suggesting that the £13,500 related partly to his work and partly “to other people involved with me at the time”. It was not clear what Mr Nijhar meant by this since he was not apparently suggesting that these fees covered work undertaken by Mr Mehli, something which clearly cannot have been the case, and it is wholly unclear who else (besides Mr Nijhar and Mr Mehli) had carried out any “site feasibility and associated work to date”. What is nonetheless certainly clear, as Mr Goodkin submitted, is that Mr Nijhar was seeking to charge in respect of professional consultancy services which he (not Gravitas, the company which he later incorporated) had provided to Dr Khambay in advance of the Site’s purchase. It follows that Mr Nijhar’s insistence that he had not provided such services prior to the purchase (after which Gravitas, rather than Mr Nijhar personally, provided services going forwards) is difficult to follow. It seems that the explanation is that, to Mr Nijhar’s way of thinking, at the time when the plan was that a company would be incorporated (a single purpose vehicle), any services provided by him were (as he put it) “informal”. That may be right. However, after this ceased to be the plan, and as confirmed by the fact that Mr Nijhar was seeking payment in respect of apparently all the work which he had carried out in relation to the Site (both before and after the plan had changed), it must follow that Mr Goodkin was right when he put it to Mr Nijhar that he had performed professional services for which he was asking to be paid by Dr Khambay. Mr Nijhar’s reluctance to accept this was not to his credit.

Two days after Mr Lakhani’s 29 July 2006 email, Mr Nijhar drafted a letter to be sent to Dr Khambay at Clubhire. The letter was also copied to Mr Lakhani, as it bears a ‘received’ stamp showing that it was received (probably by Mr Lakhani rather than Dr Khambay) on 2 August 2006. The letter was written on a “Gravitas Consulting” letterhead. By this, I mean not the letterhead of Gravitas, the company, but the letterhead of what was a trading name for Mr Nijhar. This is clear not only from the fact that nowhere is there any mention in the letter of “Gravitas Consulting” being a company, but also from the fact that at the foot of the page the words “Inderjeet Nijhar t/a Gravitas Consulting” appear. As to the contents of the letter, it began by stating: “The project management consultancy support that we will provide to Club Hire Ltd. from pre-acquisition stage to completion of the proposed development over the period over the next few months is detailed below”. I agree with Mr Goodkin that this shows that Mr Nijhar, who was writing the letter on his own behalf (and not on behalf of a company which was not mentioned in the letter and which had not yet been brought into being), was taking the position that he had already provided professional consultancy services and would continue to do so in the period both before acquisition (by which he must, in my view, mean exchange of contracts) and after acquisition.

The letter then went on, after listing the various services which it was proposed would be provided, to state that the “scheme design will need to achieve 35 dwellings or above with consideration of retail space within the scheme”. Mr Goodkin submitted that this demonstrates not only that Mr Nijhar was providing professional services, but that he was advising on precisely what planning permission needed to be obtained. Again, it seems to me that this is probably right. It does not follow, however, that Mr Nijhar had previously made the various representations which Dr Khambay/Clubhire seek to establish in these proceedings. These are matters which I come on to consider later.

Between sending his 31 July 2006 letter and its being received, assuming that the letter was sent on the date it bears, Mr Nijhar emailed Mr Lakhani on 1 August 2006. He did so in response to Mr Lakhani’s email sent on 29 July 2006, as demonstrated by the fact that Mr Nijhar addressed each of the points which had been made in Mr Lakhani’s email. In relation to point 4, Mr Nijhar took issue with the suggestion that the “profit share” should be reduced from 25% to 20%, making the point that 25% had previously been agreed and suggesting that 25% had itself represented a reduction from the 30% which “was initially suggested at the table”.

Having received Mr Nijhar’s email, Mr Lakhani explained in his witness statement that he then asked Dr Khambay’s solicitor, Mr Bloom, to draft a formal written agreement which recorded that Mr Nijhar’s remuneration would be a 25% share of the profits. In fact, however, the draft agreement dated 2 August 2006 did not refer to a percentage, but instead left a space for what was described as a “fee”, and in the version which was before me Mr Lakhani (as he confirmed in his oral evidence) had written in the figure “£42,500” and then also added “plus disbursements”. Mr Lakhani explained that he discussed this draft with Mr Nijhar, probably on 7 August 2006, when Mr Nijhar’s position was that there was no need to set out in a contract “all the things he would do” (not that, I am bound to observe, Mr Bloom’s draft made any such reference), and that this was covered by the letter which he had sent dated 31 July 2006. Although it was suggested to Mr Lakhani in cross-examination that Mr Nijhar was not shown the draft contract, I am satisfied that it was, indeed, shown to him on 7 August 2006, although it does not seem that it had been sent to him in advance of that meeting and Mr Lakhani was unable to recall that he did send it in advance. Mr Lakhani explained that, when he spoke to Dr Khambay about this, he was told by Dr Khambay that he was happy to proceed on this basis, as long as Mr Nijhar provided a breakdown of his fees.

In the meantime, Mr Nijhar - or, more accurately, Gravitas (this time, the company rather than a trading name for Mr Nijhar) – had sent Dr Khambay/Clubhire a letter dated 4 August 2006, with a copy to Mr Lakhani. This letter was not signed, but I am quite clear, despite Mr Nijhar’s denials, that it was sent as an attachment to an email which Mr Nijhar sent to Mr Lakhani and Dr Khambay on 7 August 2006 ahead of the meeting that same day. There is nothing to suggest that it had been sent before that date, other than the fact that it is dated 4 August 2006. I do not consider, however, that this is sufficient to prove that it was actually sent before 7 August 2006. Indeed, since Gravitas was only incorporated on 9 August 2006, it makes it unlikely that the letter can have been sent five days previously. That said, even if it was sent on 7 August 2006, as I have concluded it was, that still means that it was sent ahead of incorporation.

The letter started by referring to “our recent meeting and discussions” and then set out “the terms of our appointment, together with the details of the costs involved in relation to the acquisition and development” of the Site. Those terms included, on the second page, reference to an estimate (described as being “Our estimate”) “that the project will take approximately 110 days of our time” and then to an “offer” on the basis that there should be remuneration comprising a “Discounted daily rate of £1,177 plus VAT, which would produce a total fee of approximately £129,250 plus VAT” (with agreement on stage payments). The proposal was also for a “performance bonus to be determined at the consideration of achieving an added value for the project of increased value of the scheme and contractual turnkey solution to the disposal of the development to an agreed RSL, or third party” (it may be that there were typing errors in this formulation, and that “of” should read “or” before “increased value” and before “the development”). The bonus percentage was to be “5% of potential sale value”. In other words, other than the “performance bonus”, the suggested remuneration was on a fixed fee basis.

Mr Lakhani’s evidence, however, was that all discussions with Mr Nijhar (and, ultimately, Gravitas through Mr Nijhar) were on the basis that a profit share would be paid, and nothing else. I accept that evidence because, as I have previously made clear, I regarded Mr Lakhani as a truthful witness. It does mean, however, that the discussion on 7 August 2006 cannot have been a very focused discussion, at least as regards the basis on which Mr Nijhar (or, more accurately, given that the letter was on Gravitas’s letterhead, Gravitas) would be providing consultancy services. In this regard, although in his witness statement Mr Lakhani referred to the meeting on 7 August 2006 as being a meeting attended by both Mr Nijhar and Mr Mehli, and as being a meeting at which there was discussion “in very broad terms” about the price of the Site and at which there was agreement “in principle” that Mr Nijhar would be paid a 25% profit share, I struggle to see how this can be right. Not only were these matters which had already been the subject of discussion, even if not final agreement, before 7 August 2006, but in addition Mr Lakhani accepted in cross-examination that, whilst he and Dr Khambay regarded themselves as “dealing with” Mr Nijhar, they nonetheless knew and understood that as at 7 August 2006 (but not, I accept, before) Mr Nijhar was proposing that Gravitas (the company) should act as project manager. That is why, in the event, Gravitas sent out invoices and received payment for work done. It is also why, after the meeting on 7 August 2006, Gravitas sent a letter to Dr Khambay/Clubhire in terms which replicated those of the 4 August 2006 letter. This letter, which was dated 9 August 2006, was again copied to Mr Lakhani and was stamped as having been received the following day. In fairness to Mr Lakhani, he acknowledged during his cross-examination that possibly he was getting confused over the meeting, albeit when dealing with Mr Mason’s suggestion that there had been a meeting the previous week, as I understand it, in addition to a meeting on 7 August 2006. It seems to me that what he had to say about the meeting on 7 August 2006 is, accordingly, not wholly reliable. I decline, however, to go further and decide that, since I have accepted Mr Lakhani’s evidence that all discussions with Mr Nijhar were on the basis that a profit share would be paid, so it must follow that Mr Nijhar must have been lying in his evidence when he stated that that was not the case. It seems to me that all that Mr Nijhar was really doing, in saying what he said, was pointing to the terms of his letters dated 4 and 9 August 2006, which refer to a daily fee together with a performance bonus. He was entitled to rely on what these letters had to say. In any event, in view of Mr Goodkin’s acceptance, in his written closing submissions, that this is a matter which only goes to credibility and the conclusions which I have previously stated concerning Mr Nijhar’s credibility, I am quite clear that there is notthing to be gained from my acceding to Mr Goodkin’s invitation to make findings as to Mr Nijhar’s credibility on this issue.

Three days after the meeting on 7 August 2006, on 10 August 2006, contracts were exchanged for Clubhire’s purchase of the Site for the sum of £875,000, with Mr Bloom acting on Clubhire’s behalf. It was suggested by Dr Khambay that he was wavering as to whether to go ahead right up until the last minute, and that Mr Nijhar called him repeatedly urging him to proceed. Mr Nijhar disputed this. Ultimately, I do not consider it really matters whether Mr Nijhar did as Dr Khambay suggests. All that really matters is that the purchase happened. There is no claim based on Dr Khambay being urged to go ahead by Mr Nijhar on 10 August 2006. I find that Mr Nijhar did telephone Dr Khambay and did encourage him to proceed with the purchase. Whether he did so repeatedly, however, I somewhat doubt. Be that as it may, it was agreed, on exchange of contracts, that completion would be on 8 December 2006. The same day, Gravitas sent a letter to Dr Khambay at Clubhire which stated:

“We are pleased that you have chosen to appoint Gravitas Consultancy Ltd to act as your Project Managers for the acquisition and development of the above site.

We will now work to secure the first phase of the project and will keep you informed of progress on a regular basis.

In line with the letter of appointment, we are enclosing our first invoice for the initial phase of the project.

We should be grateful for your early consideration of the same. We look forward to working with you.”

The invoice referred to in this letter stated as follows:

“Invoice for first phase of the Project Management of the above development: Total Fee at £129,250 +VAT

First phase fees@ 35% of the total (£129,250) £45,237.50 (VAT will be billed separately in due course on the above amount.”

Bank details were then provided which revealed that payment was to be made to a business account in the name of “lnderjeet Nijhar T/A Gravitas Consulting”. Mr Nijhar explained in his evidence that this was because at this point Gravitas did not have its own bank account. This invoice was paid on 17 August 2006.

Dr Khambay, in his witness statement, acknowledged, expressly, that he is “unable to remember precisely what was said during any particular meeting or telephone call”. The evidence he then went on to give concerning the representations alleged to have been made to him by Mr Nijhar, the representations which form the basis of the pre-exchange representation case advanced in these proceedings, was described as an account of what Mr Nijhar and Dr Khambay “said to each other at some or all of the meetings and during some or all of the phone calls prior to exchange”. In short, there was no precision as to what is alleged to have been represented by Mr Nijhar on any particular occasion, whether that be a meeting or a telephone conversation. That remained the case even after Dr Khambay had completed his oral evidence. Although this does not mean that what Dr Khambay has to say should be discounted altogether, it does make it difficult to place great reliance on evidence which is so lacking in detail. It also means that Mr Mehli’s evidence as to what was discussed at the various meetings which he attended is especially important in making appropriate factual findings in this case. I say this notwithstanding that, as explained previously, there came a time prior to Dr Khambay/Clubhire’s purchase of the Site when Mr Mehli had largely dropped out of the picture. In circumstances where Dr Khambay is unable to explain with any precision when particular statements are alleged to have been made by Mr Nijhar to him, specifically that any particular statements were made at meetings or in telephone conversations not involving Mr Mehli, I am reluctant to assume in Dr Khambay’s favour that statements were made which were not also made to Mr Mehli. To do so would entail my making findings that Mr Nijhar misled Dr Khambay on the basis of evidence which is somewhat less than compelling, and it needs to be remembered that the findings which Mr Goodkin invites me to make involve findings of deceit. In any event, it seems to me most unlikely that, to take the example of the allegation that Mr Nijhar told Dr Khambay that he had spoken to supermarkets and they were interested in the Site (as will appear, the allegation in paragraph 12 h) of the Particulars of Claim), Mr Mehli would not have known that such a statement had been made by Mr Nijhar to Dr Khambay at a meeting or during a telephone conversation not involving him prior to purchase of the Site by Dr Khambay/Clubhire when, as Mr Mehli explained in paragraph 73 of his witness statement, Mr Nijhar told Dr Khambay and Mr Mehli “probably just after exchange” that he was “talking to the Co-Op and … they were interested”. I find it inconceivable that, if he had previously told Dr Khambay about this or any other discussions he had had with supermarkets, Mr Nijhar would not have said so when he later told Dr Khambay and Mr Mehli about his contact with the Co-Op.

Notwithstanding my concern about the vagueness of Dr Khambay’s evidence, I should nonetheless record the evidence which he gave. In view of the fact that Dr Khambay’s evidence is not specific to any particular meeting or telephone conversation, and given also the importance of the evidence in relation to the case which is now advanced, I set out the relevant passages from Dr Khambay’s witness statement in extenso:

“44

I am a cautious man and I did not want to speculate with the Site. However, [Mr Nijhar] told me that if I purchased the Site, he would act as project manager and do everything necessary to obtain planning permission.

45

[Mr Nijhar] told me that he knew the relevant planners intimately and that he would get me planning permission for the Site before Easter 2007. He specifically said that he had spoken to the planners and to various housing associations and that there was a lot of interest in the Site. He convinced me that he would be able to flip it around.

46

In every meeting I said that I was reluctant to purchase the Site. However, [Mr Mehli] was keen for me to purchase the Site. [Mr Nijhar] was also very convincing when he said that he could obtain planning permission. He said that it would be a purely paper exercise and would go through easily.

47

[Mr Nijhar] said that as soon as I exchanged contracts, he would get the ball rolling with the planning application as he had already made the necessary enquiries and arrangements. [Mr Nijhar] said that if I could complete the purchase of the Site before Christmas of 2006, then he would get planning permission before Easter of 2007. I was surprised at the tight timescale and queried this, but he assured me that it was a formality. He said that the profit would be £500,000, of which he wanted a 30% share plus his expenses.

48

[Mr Nijhar] said that he knew the senior planning officers in the council and that he was on first name terms with them. [Mr Nijhar] said that he had already spoken with the senior planning officers and that he could get permission for retail and residential use.

49

[Mr Nijhar] also said that had spoken to several housing associations and that he would be getting in touch with supermarkets as well. [Mr Nijhar] was trying everything to convince me to buy the Site.

50

[Mr Nijhar] said that the proposed sale price of £875,000 was reasonable and indeed that it was below the market rate. I did not have the property valued because [Mr Nijhar] was guaranteeing a quick turnaround and guaranteeing that we would earn £500,000 of profit. In my opinion there was no point in having the property valued in those circumstances.

51

[Mr Nijhar] did not go into specifics about what planning permission would be obtained. He did not, for example, say how many houses we would be able to build on the Site or what total retail area would be permitted. What he kept emphasising was that he would get a profit of £500,000 and that he wanted a 30% share of any profits, which was later negotiated down to 25% by [Mr Lakhani].”

These passages in Dr Khambay’s witness statement echo, although not in all respects as I shall explain, how the case was put in the Particulars of Claim, paragraph 12 of which alleged that Mr Nijhar made the following statements to Dr Khambay/Clubhire:

“a)

That the Defendant personally knew and was on first name terms with the senior planning officers of the Dudley Metropolitan Borough Council (the ‘Council’), which had responsibility for the grant or refusal of planning permission for the Site.

b)

That the Defendant had personally spoken with planning officers at the Council in relation to the Site;

c)

That the said planning officers had told the Defendant that planning permission would be granted for the Site for mixed retail and residential use;

d)

That the Defendant would be able to obtain planning permission for the Claimants for the Site for mixed retail and residential use;

e)

That the retail element of the planning permission to be granted for the Site would or could include supermarket development of at least medium size;

f)

That such planning permission as aforesaid would be obtained before Easter of 2007 for the Site if the First and/or Second Claimant purchased the Site before Christmas 2006;

g)

That the Defendant had spoken with several housing associations and that those housing associations were interested in carrying out a residential development of the Site or part of it;

h)

That the Defendant had spoken with a number of major supermarket retailers about the Site and the Tescos and the Co-Op were interested in carrying out a retail development at the Site for a medium sized supermarket;

i)

That if the First and/or Second Claimant purchased the Site, the Defendant would generate a profit of at least £500,000 and that such profit was ‘guaranteed’ from the development of the Site.”

The reason why I say that Dr Khambay’s witness statement does not in all respects echo what was alleged in the Particulars of Claim is that, although the witness statement is consistent with what is alleged in paragraphs 12 a) to f) and i), it is not supportive of what was alleged in paragraphs 12 g) and h). Specifically, in relation to paragraph 12 g), the allegation that Mr Nijhar stated that he had spoken with several housing associations and those housing associations were interested in carrying out a residential development of the Site or part of it, it is significant that, in paragraphs 45 and 49 of his witness statement, Dr Khambay’s evidence was merely that Mr Nijhar told him that he had spoken to several housing associations and “there was a lot of interest in the Site”. This does not seem to me to go quite as far as Mr Nijhar saying, as alleged in paragraph 12 g), that the housing associations contacted by him were interested in carrying out a residential development of the Site or part of it. This may be thought to be a subtle distinction. The more so, perhaps, given that, when asked in cross-examination about the paragraph 12 g) allegation, Dr Khambay was insistent that Mr Nijhar had told him that he had spoken to several housing associations and they had told him that they were interested in being involved in the development of the Site. However, I must bear in mind also that, as I come on to explain, Mr Mehli’s evidence, as contained in paragraph 72 of his witness statement, was that Mr Nijhar had merely said to Dr Khambay (and to Mr Mehli) that “he would speak to housing associations and that he was very confident about getting them onboard” and that he does not recall Mr Nijhar saying prior to exchange that he had already spoken to housing associations. That said, in the Defence, Mr Nijhar’s position, stated in paragraph 11(g), was that he told Dr Khambay prior to purchase that he had spoken “to one or two Housing Associations but did not at that stage say that those Housing Associations were interested in carrying out a residential development”. This was repeated by Mr Nijhar when he was cross-examined by Mr Goodkin. Therefore, Mr Nijhar accepts doing more than Mr Mehli says but denies going as far as Dr Khambay alleges in paragraph 12 g). It is, of course, open to me, notwithstanding Mr Nijhar’s evidence, to prefer Mr Mehli’s evidence. However, I do not consider that appropriate in the present case. I have concluded, instead, that Mr Mehli’s recollection is mistaken, in that mention was made of housing associations having been contacted by Mr Nijhar and of those housing associations having expressed an interest in the Site but not of them being interested in developing the Site. It seems to me that mistake, or a misrecollection after all these years, is the explanation for Mr Mehli saying what he says. As I see it, the alternative explanation is that Mr Mehli was simply not involved in any discussion with Mr Nijhar prior to purchase where housing associations were mentioned as having already been contacted by Mr Nijhar, but that he had been involved in a (necessarily earlier) discussion when Mr Nijhar had told Dr Khambay that he would be speaking to housing associations and was confident that they would come on board. I am confident that Dr Khambay was not told by Mr Nijhar, in Mr Mehli’s presence, that housing associations to which he had spoken were interested in developing the Site; and if that is what Dr Khambay was told by Mr Nijhar when Mr Mehli was not present, I am confident that Mr Mehli would have been told by Dr Khambay that this is what Mr Nijhar had said since, even though Mr Mehli was no longer so involved after 19 July 2006 as he had been before that date, he was nonetheless still in contact with Dr Khambay and it seems to me very likely that Dr Khambay would have shared this information with him. Had he done that, it is most unlikely that Mr Mehli would have given the evidence which he did, namely that Mr Nijhar had merely said that he would be speaking to housing associations.

As to the other respect in which Dr Khambay’s witness statement does not support what was alleged in the Particulars of Claim, namely paragraph 12 h) and the allegation that Mr Nijhar had spoken to a number of major supermarket retailers about the Site and Tesco and the Co-Op were interested in carrying out a retail development at the Site for a medium sized supermarket, the position is less nuanced as far as Dr Khambay’s own evidence is concerned. This is because Dr Khambay himself says that Mr Nijhar told him merely “that he would be getting in touch with supermarkets”. This is not consistent with the allegation that Mr Nijhar said that he had already made such contact and that that contact had led to Tesco and the Co-Op expressing an interest in the Site. It is right to acknowledge that, when during cross-examination he was asked about what Mr Nijhar had told him about his contacts with supermarkets, Dr Khambay’s evidence was that Mr Nijhar had mentioned “many names” and that it was the Co-Op which “he was going on about”, telling Dr Khambay that he had personal contacts with the Co-Op to whom he had spoken and “they were on board”. Although this was evidence given in relation to a paragraph in the Particulars of Claim which, like the rest of paragraph 12, referred to statements alleged to have been made prior to Dr Khambay/Clubhire’s purchase of the Site, nonetheless it is not clear to me that what Dr Khambay had to say on this topic did, in fact, relate to the pre-purchase period. If it did, then, I find it inconceivable that, in his witness statement, Dr Khambay would have stated only that Mr Nijhar told him that he would be making contact with supermarkets, and not that he had already made such contact. The more so, in circumstances where Mr Nijhar had denied, in paragraph 11(h) of the Defence, that he had said anything about supermarkets in the pre-purchase period, explaining that he did not approach Tesco, Sainsbury’s or the Co-Op until after the purchase of the site by Dr Khambay/Clubhire (the position he maintained in cross-examination). I also regard it as significant that it was Mr Mehli’s evidence, in paragraph 73 of his witness statement, that Mr Nijhar had only mentioned the Co-Op “probably just after exchange” rather than in the pre-purchase (or exchange) meetings during which it is alleged, in the Particulars of Claim, that Mr Nijhar made the representation about his having spoken to a number of supermarkets and Tesco and the Co-Op being interested in the Site. This seems to me to confirm that no such representation was made prior to the purchase of the Site. I might add that Mr Lakhani made no mention in his witness statement of Mr Nijhar having stated prior to purchase that supermarkets had been contacted and were interested. He did say, when being cross-examined, that Mr Nijhar “had been talking from day one about a supermarket being interested”. However, I find it remarkable, if that really was the case, that Mr Lakhani did not say so in his witness statement. Accordingly, I do not accord any weight to this piece of evidence given by Mr Lakhani.

My conclusion, therefore, in relation to the allegations contained in paragraphs 12 g) and h) is that the evidence adduced by Dr Khambay and Clubhire does not support the case which is advanced by them in these proceedings. That is plainly the position in relation to the allegation concerning Mr Nijhar’s contact with supermarkets (paragraph 12 h)) since neither Dr Khambay nor Mr Mehli gives evidence which supports the allegation. The evidence of Mr Mehli in particular, which was given in an open and straightforward way and which was independent, leads me to conclude that this aspect of the case is not made out. It is also the position, in my judgment, in relation to the allegation concerning Mr Nijhar’s contact with housing associations (paragraph 12 g)), even though, for reasons which I have explained, the position concerning Mr Mehli’s evidence on this matter is less straightforward. It follows that Dr Khambay/Clubhire’s case based on the statements alleged in paragraphs 12 g) and h) of the Particulars of Claim must fail. That is the position in respect of each of the different ways in which the case based on those statements is put – whether on the basis of deceit, negligent misrepresentation/misstatement or breach of collateral contract.

It seems to me that the case that Mr Nijhar guaranteed Dr Khambay/Clubhire a profit of at least £500,000 must also fail. It does so for different reasons which I now explore. I start by noting that, in paragraph 11(i) of the Defence, Mr Nijhar denied the allegation, in paragraph 12 i) of the Particulars of Claim, that he had given the guarantee to which I have referred. He did so by making the point that there were “a number of discussions about the level of profit that might be achieved on the Site and the First Claimant expressed the desire to generate a profit of £500,000”, before adding that the “possibility of even higher figures was discussed by the parties but no guarantee was ever given or asserted by the Defendant as to the generation of profit”. In his witness statement, at paragraph 19, Mr Nijhar went on to explain that Dr Khambay had, as he put it, “a figure of £500,000 in his head as a minimum profit target” and that that had “evolved out of the many discussions held” at Dr Khambay’s house with Mr Mehli. Mr Nijhar then stated that Dr Khambay and Mr Mehli “talked about profits being generated in excess of £1 million on the sites” (by which he meant the Site and the separate proposed Feltham project) but that he (Mr Nijhar) “urged caution as the figures seemed unreal” to him. Mr Nijhar explained that he “could not fault their lower end projections”, however insisting that, in any event, he “made no promises”. This was evidence which Mr Nijhar repeated during his cross-examination, insisting that he regarded £500,000 as “a reasonable profit that could be delivered” but that he had not guaranteed that there would be a profit at this level. Dr Khambay, in contrast, stated, in paragraph 50 of his witness statement, that Mr Nijhar guaranteed “that we would earn £500,000 of profit”. In cross-examination, Dr Khambay maintained that that is what Mr Nijhar had told him, confirming that Mr Nijhar had actually used the language of “guarantee” when saying that there would be a minimum £500,000 profit.

It follows that there is a direct conflict of evidence between Dr Khambay and Mr Nijhar which must be resolved. Again, Mr Mehli’s evidence is, therefore, important. What he stated in his witness statement, in a section dealing with the Defence, was focused not on paragraph 11(i) (the direct response to the allegation in paragraph 12 i) of the Particulars of Claim that Mr Nijhar had guaranteed that a minimum profit of £500,000 would be made), but was instead in response to a later paragraph of the Defence (paragraph 14), in which Mr Nijhar had stated that Dr Khambay was “very aggressive in his approach to profit figures and even mentioned a profit of £1 million” but that he (Mr Nijhar) “urged caution and realism in relation to such figures”. Mr Mehli stated that he disagreed with this, in that: Mr Nijhar influenced Dr Khambay “a lot in relation to the purchase of the Site”; Dr Khambay did not mention making a profit of £1 million in front of Mr Mehli; Dr Khambay told him that he would be happy with a £200,000 profit; Mr Nijhar “always said his target figure for the profit was £500,000”; and Mr Nijhar “never urged caution about the likely profit” and “never disagreed with the figures being discussed”. Earlier, in paragraph 46 of his witness statement, Mr Mehli had stated that Mr Nijhar “always said that £500,000 was the target profit figure” and that he “said that it ‘would’ be and that it ‘will’ be achieved”. This is the nearest that Mr Mehli got to suggesting that any guarantee in this regard was given by Mr Nijhar to Dr Khambay. In my judgment, it is not far enough.

This evidence was repeated in cross-examination, when he accepted that, whilst Dr Khambay had said that he would be happy if he made £200,000 “on a quick sale or a 20% return if it took longer”, Dr Khambay was “keen to target higher, and so £500,000”. He added, importantly as it seems to me, that both he (Mr Mehli) and Mr Nijhar “worked out that we could achieve £500,000 but were quietly confident that we could achieve a lot more”. He added that that was, as he put it, “the way it was expressed”, a reference to how matters were put by Mr Nijhar and him to Dr Khambay: “a realistic target of £500,000 but we could possibly get more”. This was evidence which Mr Mehli gave in relation to the meeting which took place between Dr Khambay, Mr Nijhar and Mr Mehli on 12 July 2006, a meeting at Dr Khambay’s home. Mr Mehli went on, however, when asked specifically about paragraph 14 of his witness statement, to say that they (that is, Dr Khambay, Mr Nijhar and Mr Mehli) had discussed a £1 million profit and how “everyone gets bamboozled by numbers”, but that he was in agreement with the view that there was a potential for a profit of between £400,000 and £500,000. He added, during his re-examination, that a £500,000 profit was “the target” which Mr Nijhar had said he was confident could be achieved, and that he (Mr Mehli) “also told Dr Khambay that those numbers were right and certainly £500,000 was a very reasonable target” albeit that he could not (and did not) guarantee that planning permission would be obtained.

I have no hesitation in accepting what Mr Mehli had to say on this topic. It seems to me that it is inherently unlikely that somebody in Mr Nijhar’s position, however keen he was for Dr Khambay to purchase the Site, would offer a guarantee that a profit at a particular minimum level would be achieved. I am quite clear that, consistent with what Mr Mehli described in his evidence, Mr Nijhar did no such thing. I am sure that Mr Nijhar expressed his optimism and expectation that at least a £500,000 profit would be achieved. That is not the same, however, as guaranteeing such a level of profit. Had Mr Nijhar given a guarantee as Dr Khambay has alleged, then I am confident that Mr Mehli would remember him doing so, yet he did not suggest that a guarantee was given. On the contrary, Mr Mehli’s evidence was entirely consistent not with a guarantee being given by either Mr Nijhar or him, but with both Mr Nijhar and Mr Mehli expressing their view that a minimum £500,000 profit would be made. It is clear also that Mr Mehli was involved in such discussions over potential profits as took place between Dr Khambay and Mr Nijhar. There was no suggestion in Dr Khambay’s evidence that there were such discussions not involving Mr Mehli. Even if there were such discussions, the evidence in relation to them is so imprecise as to be unable to support a finding that a guarantee was given. In any event, I find it inconceivable that, had a guarantee been given by Mr Nijhar to Dr Khambay as alleged in these proceedings, Mr Mehli would not have been told about it by Dr Khambay at the time. There is no suggestion in the evidence that this is what happened. Nor was it suggested by Mr Mehli, either in his witness statement or when he gave his oral evidence. Indeed, when shown the Defence and the denial of paragraph 12 i), it is telling that Mr Mehli made no specific comment, instead focusing not on the denial of the allegation that a guarantee was given by Mr Nijhar to Dr Khambay, but on Mr Nijhar’s attempt to suggest that he was the cautious one of the three (Dr Khambay, Mr Mehli and Mr Nijhar) when, I am quite satisfied, as Mr Mehli explained, that Mr Nijhar actually had the same level of optimism as Mr Mehli had.

It follows from this that the Claimants’ collateral contract case founded on paragraph 12 i) of the Particulars of Claim must fail. The guarantee was not given, and so there can be no question of Mr Nijhar having warranted that a minimum £500,000 profit would be made. The same applies to the related case in deceit. That case, like the collateral contract case, was put forward - at least primarily - on the basis that a guarantee was given. As no guarantee was given, so the deceit case - at least in its primary form - cannot succeed. It was not - at least primarily - alleged that Mr Nijhar expressed the opinion that a minimum £500,000 profit would be made when he did not, in fact, hold that opinion or did not know of facts which reasonably justified the opinion he expressed: see on this Clerk & Lindsell on Torts (21^st Ed., 2014) at paras. 18-13 to 18-14; Deceit, The Lie of the Law, MacDonald Eggers (2009)at paras. 3.14 and 3.15; and Brown v Raphael [1958] Ch 636. In the circumstances, that alternative case in deceit must also fail. This is because, as confirmed by Mr Mehli’s evidence, Mr Nijhar plainly did hold the relevant belief, and there were reasonable grounds for that belief since Mr Mehli, an experienced property professional, himself shared the self-same opinion. In such circumstances, it is equally impossible to see how the Claimants’ case in negligent misrepresentation/misstatement can succeed. Assuming that Mr Nijhar owed Dr Khambay/Clubhire any duty (a matter to which I shall return later), I am clear that, in saying what he did about a minimum £500,000 profit being made (I repeat that I do not accept that any guarantee was given in this regard), Mr Nijhar exercised all appropriate care and skill, and that as such there can be no liability on Mr Nijhar’s part to Dr Khambay/Clubhire on this alternative basis. Mr Mehli and Mr Nijhar were both agreed that this was the level of profit which, in the then market conditions, was reasonably to be expected. I accept Mr Mehli’s evidence in this regard that actually he and Mr Nijhar thought that a £500,000 minimum profit was very likely to be bettered. In view of this evidence, I consider it impossible to conclude that Mr Nijhar is under the liability alleged by Mr Goodkin on Dr Khambay/Clubhire’s behalf. The claims in relation to paragraph 12 i) of the Particulars of Claim, accordingly, all fail.

This brings me to the alleged statements covered by paragraphs 12 a) to f) of the Particulars of Claim. These form part of the case which was summarised by Mr Goodkin as entailing a representation by Mr Nijhar that he had received assurances from local planning officers in Dudley that planning permission would be granted quickly (namely by Easter the following year) for mixed retail and residential use with a supermarket development of at least medium size. Here again I must resolve a stark conflict between the witnesses. Dr Khambay’s evidence in his witness statement was as I have recorded it previously. It was that Mr Nijhar told him that he knew “the relevant planners intimately and that he would get me planning permission for the Site before Easter 2007” (paragraph 45), and that Mr Nijhar said that “it would be a purely paper exercise and would go through easily” (paragraph 46) as he had “already made the necessary enquiries and arrangements” and if Dr Khambay were to complete the purchase of the Site before Christmas 2006, “he would get planning permission before Easter of 2007” (paragraph 47).Dr Khambay’s evidence was that Mr Nijhar told him that “he knew the senior planning officers in the council”, “that he was on first name terms with them”, and that he “had already spoken with the senior planning officers and that he could get permission for retail and residential use” (paragraph 48). In his oral evidence, under cross-examination, Dr Khambay maintained this evidence. He explained that Mr Nijhar told him that he knew the planning officers from his time as a councillor in West London, explaining that they were friends who had “moved around the country” and that that is how he came to know them even though they were working in Dudley rather than West London. He stated that Mr Nijhar told him that planning “was a done deal” and merely a “paper exercise”, and that Mr Nijhar told him that he “had done all the due diligence”. Pressed on this, Dr Khambay then stated that Mr Nijhar had guaranteed that planning permission was merely a “paper exercise”, emphasising that Mr Nijhar had used that very phrase and had also used the language of guarantee. He was adamant that it was not simply a case of Mr Nijhar being confident, and that what Mr Nijhar told him was that “he would get it for me”.

Mr Nijhar, who did not address the issue in his witness statement (it seems probably because at the time when he prepared that witness statement he no longer had solicitors acting for him and had yet to instruct Mr Mason on a direct access basis), disputed Dr Khambay’s version of events. In paragraphs 11(a) to (d) of the Defence (a document which had been prepared at a time when Mr Nijhar had both solicitors and counsel acting for him), Mr Nijhar explained that he had informed Dr Khambay only that he had been in contact with two senior members of the Council’s Housing Strategy team, people with whom, he explained to Dr Khambay, he was on first name terms. According to him, he had given Dr Khambay the names of these Housing Strategy team members, Mr Leigh and Dr Ron Sims. He denied that he had told Dr Khambay that he knew planning officers as opposed to Housing Strategy team members. His position was that he told Dr Khambay that the Housing Strategy team would support an application for a scheme which included affordable housing. Otherwise, he said that he merely informed Dr Khambay at the same time that the Site already “incorporated an element of established retail use”, not that the planning officers had told him that planning would be obtained for a mixed retail and residential use scheme. He accepted, however, that he did tell Dr Khambay that planning permission would be obtainable for mixed retail and residential use. He maintained that that was his opinion at the time, and that it was an opinion which he genuinely and reasonably held. It was only because of the economic downturn which unexpectedly occurred that things changed and planning permission could not be obtained. That is not something which he envisaged at the time that he said what he said to Dr Khambay.

In his oral evidence, Mr Nijhar denied that he told Dr Khambay that he was on first name terms with the planning officers at the Council. He accepted that he did tell Dr Khambay that he knew senior planning officers around the country. However, he insisted that he did not say anything about knowing planning officers in Dudley. He did tell Dr Khambay that he knew people in the Housing Strategy team, Mr Leigh and Dr Sims, although his recollection (arguably at odds with what was stated in the Defence) was that he did not give Dr Khambay their names. Indeed, it is to be noted that the letter from the Council to Mr Nijhar dated 17 July 2006, to which I have previously referred and which began by referring to “earlier conversations”, was a letter which was written by Mr Leigh. His position was that Dr Khambay would have understood that there is a difference between people working as planning officers and members of the Housing Strategy team. I did not understand him, however, to suggest that he himself drew that distinction to Dr Khambay’s attention. It seems that Mr Nijhar simply took it that Dr Khambay understood the distinction. In any event, as far as Mr Nijhar was concerned, he did not tell Dr Khambay that he had been told by planning officers that planning permission would be a mere “paper exercise”. Mr Nijhar also disputed that he told Dr Khambay that the planning officers had told him that permission would be obtained for a mixed use scheme, and that he told him that permission would be granted by the following Easter.

In view of the conflicting evidence given by Dr Khambay and Mr Nijhar, and in circumstances where no other witnesses gave evidence on the issue, Mr Mehli’s evidence again assumes a particular importance. In his witness statement, Mr Mehli stated that at the first meeting between Dr Khambay, Mr Nijhar and him, at Dr Khambay’s house, Mr Nijhar “mentioned that he personally knew planning officers at Dudley Council very well, which would enable him to maximise planning and achieve the maximum density of developments” (paragraph 29). He added that he remembered Mr Nijhar saying that “planning was not a problem” (paragraph 30). Later on, referring to the meeting at the Laguna Restaurant which took place on 28 June 2006, Mr Mehli’s evidence was that Mr Nijhar “said that we would have no problems getting planning” (paragraph 41). He then referred to Mr Nijhar saying at another meeting, which he could not identify, that “an application for planning permission would be submitted within three months and the decision would be obtained three months later, so the whole process would take six months” (paragraph 57). Then, in the part of his witness statement in which he commented on what had been stated in the Defence, Mr Mehli stated that he disagreed that Mr Nijhar referred only to his knowing members of the Housing Strategy team at the Council. Mr Mehli’s evidence was that Mr Nijhar said that he knew senior planning officers (paragraph 67). In relation to paragraph 11(b) of the Defence (Mr Nijhar’s denial of the allegation in paragraph 12 b) of the Particulars of Claim that Mr Nijhar told Dr Khambay that he had personally spoken to planning officers at the Council in relation to the Site), Mr Mehli said that he was unable to comment (paragraph 68). However, somewhat inconsistently, Mr Mehli went on to say that he disagreed with Mr Nijhar’s denial of the allegation, in paragraph 12 c) of the Particulars of Claim, that he told Dr Khambay that the planning officers at the Council had told him that planning permission would be granted for the Site for mixed residential and retail use. Mr Mehli stated that Mr Nijhar “did say that planning officers” (by which I took him to mean planning officers at the Council) “had told him that planning permission would be granted for mixed retail and residential use” (paragraph 69). He added that Mr Nijhar stated that planning permission would be obtained by April 2007 (paragraph 71).

Asked during cross-examination about what Mr Nijhar told Dr Khambay (and Mr Mehli) on this topic, and specifically when it was put to him by Mr Mason that Mr Nijhar had not said to Dr Khambay that he knew planning officers but that he knew people in the Housing Strategy team at the Council, Mr Mehli’s answer was that Mr Nijhar told Dr Khambay that “he knew people in the departments and that there would be no real issues in achieving planning and doing the scheme”. His reference to “the departments” in the plural might have been an acknowledgment by Mr Mehli that Mr Nijhar might have mentioned the Housing Strategy team (or department) as well as the planning department. Equally, it may be that Mr Mehli did not have a clear recollection of who it was that Mr Nijhar was telling Dr Khambay (and Mr Mehli) he knew and contacted. In my assessment, the latter was the case, as underlined by the fact that Mr Mehli went on to say that Mr Nijhar told Dr Khambay that “he knew people in that particular borough and he had discussed [the Site] with them”. This is consistent with Mr Nijhar not telling Dr Khambay (and Mr Mehli) that he had spoken specifically to the planning officers at the Council, but that he had spoken to unidentified people in an unidentified department or departments. As such, Mr Mehli’s evidence in cross-examination does not support Dr Khambay’s case that Mr Nijhar told him that he had spoken to the planning officers at the Council, not people in the Housing Strategy team. It should be acknowledged that in his witness statement Mr Mehli had been more specific, in stating in particular in paragraph 69 that Mr Nijhar had stated that planning officers had told him that planning permission would be granted. I consider, however, that this evidence needs to be viewed in the light of the evidence which Mr Mehli gave orally. As I have previously explained, Mr Mehli was a straightforward witness, and I am quite satisfied that what he was doing in cross-examination was giving straightforward and truthful evidence. It is that evidence, given when the detail of what Mr Nijhar had to say to Dr Khambay (and Mr Mehli) was being closely examined, which I am clear should be treated as the most reliable evidence as to what Mr Nijhar stated to Dr Khambay (and Mr Mehli).

Even if this is wrong, however, and Mr Nijhar did speak to Dr Khambay (and Mr Mehli) not about what members of the Housing Strategy team had told him (whether giving Mr Leigh’s and Dr Sims’s names or not) but about what planning officers at the Council had told him, I find nonetheless that Mr Nijhar did not tell Dr Khambay (and Mr Mehli) that he had been told by the planning officers that planning permission would be obtained for a mixed retail and residential scheme, nor specifically that planning permission would be merely a “paper exercise”. I have reached this conclusion because, aside from what he had to say in paragraph 69 of his witness statement when dealing with paragraph 11(c) of the Defence, Mr Mehli’s evidence was that Mr Nijhar had merely said that “planning was not a problem” (paragraph 30) and that “we would have no problems getting planning” (paragraph 41). This is not the same thing as Mr Nijhar saying that planning permission would be nothing more than a “paper exercise”. It is, furthermore, significant in this context that, in cross-examination, Mr Mehli described Mr Nijhar as simply saying, having spoken to the planning officers, that “there would be no real issues in achieving planning” and, as Mr Mehli went on to put it, that “there were issues [with planning] but they would be resolved”. This evidence is difficult to square with Dr Khambay’s insistence that Mr Nijhar told him that the planning officers at the Council had told him that planning permission would, in effect, be just a formality. In these circumstances, I am satisfied that, even if (contrary to my primary finding) Mr Nijhar did refer to his having spoken to the planning officers at the Council (not members of the Housing Strategy team), nonetheless he did not make the representation which is alleged by Dr Khambay/Clubhire and which lies at the heart of case advanced against Mr Nijhar in paragraphs 12 a) to f) of the Particulars of Claim. I am quite clear that the position is that Mr Nijhar told Dr Khambay (and Mr Mehli) that he expected planning permission to be obtained for a mixed residential and retail use scheme. I do not accept, however, that he told Dr Khambay (and Mr Mehli) that this is what the planning officers at the Council, or for that matter members of the Housing Strategy team (not that this was alleged), told him. I am also satisfied that, whilst Mr Nijhar did say that he expected that planning permission would be obtained by Easter 2007, whether this was something which Dr Khambay himself considered or not, this did not entail Mr Nijhar reporting to Dr Khambay what the planning officers (or the Housing Strategy team) at the Council had told him, but was simply expressing his genuinely held belief. It follows that Dr Khambay/Clubhire’s case in these respects must also be dismissed. Again, this applies to each of the different ways in which that case is put: whether on the basis of deceit, negligent misrepresentation/misstatement or breach of collateral contract.

As with the other alleged representations, since I have concluded that what Dr Khambay and Clubhire have alleged has not been made out on the evidence, there is no need for me to reach conclusions in relation to what are really sub-issues. I have in mind specifically whether Dr Khambay/Clubhire can make good their case that the various statements which are alleged were made without belief in their truth or in circumstances where it was known that reasonable grounds did not exist which justified the making of the statements. As to this, if the statements were made, it seems to me to follow that they were made in such a way as to attract liability in deceit, in that they must have been made in the knowledge that they were false (which, there is no dispute, they would have been) or recklessly and, in the case of the statements entailing expressions of opinion, in the knowledge that, or reckless as to whether, there were no reasonable grounds for the opinion stated. I am clear also that, if the representations were made, it would have been intended by Mr Nijhar that Dr Khambay/Clubhire should rely upon them. As it was put by Lord Herschell in Derry v Peek (1889) 14 App Cas 337 at page 365, the representor must have intended that the representee “shall be led to act upon it [the representation] as if it were the truth”. As observed in Deceit, The Lie of the Law at para. 5.28, in Arnison v Smith (1889) 41 Ch D 348 at page 368 Lord Halsbury LC equated the intention that the representation be relied upon with an intention to deceive – in other words, dishonesty. If the representations were made, it seems to me to be inevitable that they must have been made with such an intention. It is difficult to see how the position could be otherwise. Although it is clear that a representor’s motive is irrelevant (see Deceit, The Lie of the Law at paras. 5.32 to 5.46), I might add that I nonetheless agree that, as Mr Goodkin submitted, Mr Nijhar’s motivation in the present case was clear: he wanted Dr Khambay/Clubhire to enter into the Consultancy Contract, thereby earning for Gravitas, his company, substantial fees; he wanted Dr Khambay/Clubhire to purchase the Site, and so allow fees to be generated through the Consultancy Contract; and he wanted to ensure that he, rather than Mr Mehli, worked with Dr Khambay/Clubhire in relation to the Site, and so again allow fees to be generated through the Consultancy Contract.

Other aspects which do not, on my primary findings, arise are whether Dr Khambay/Clubhire have made good their case on reliance, and the question of whether, in all the circumstances of this case, Mr Nijhar is properly to be regarded as having assumed a duty of care to Dr Khambay/Clubhire. In view of this, I propose saying relatively little about these matters.

As to reliance, Dr Khambay/Clubhire’s case is that they (strictly Clubhire, Dr Khambay’s corporate vehicle for present purposes) were induced by Mr Nijhar’s various statements to purchase the Site, and this resulted in substantial losses sustained in pursuing its development with singular lack of success. Alternatively, or additionally, Dr Khambay/Clubhire say that they were induced to enter into the Consultancy Contract with Gravitas (again strictly it was Clubhire which did this), and this resulted in further losses comprising the payments made to Mr Nijhar or, more accurately, Gravitas, Mr Nijhar’s company and the party to the Consultancy Contract.

In these respects, Mr Goodkin relies on the following passages in Clerk & Lindsell, which set out the relevant principles:

“18-34 The claimant must have been influenced by the misrepresentation To entitle a claimant to succeed in an action in deceit, he must show that he acted in reliance on the defendant’s misrepresentation. If he would have done the same thing even in the absence of it, he will fail. What is relevant here is what the claimant would have done had no representation at all been made. In particular, if the making of the representation in fact influenced the claimant, it is not open to the defendant to argue that the latter might have acted in the same way had the representation been true. … .

18-35 Joint inducement suffices Although the claimant must show that he was induced to act as he did by the misrepresentation, it need not have been the sole cause. Provided it substantially contributed to deceiving him, that will be enough. If the claimant’s mind was partly influenced by the defendant’s misstatements the defendant will not be any the less liable because the claimant was also partly influenced by a mistake of his own. In such cases, moreover, the claimant has the benefit of a presumption that he was influenced at least to some extent by the deceptive statement.”

Also relevant in this context are the following further passages:

“18-37 Carelessness of claimant in not discovering the untruth no defence A person to whom a misrepresentation is made is not deceived if he actually knows the truth. But it is no answer to an action for deceit that the claimant might have discovered the falsity by the exercise of ordinary care: it does not lie in the mouth of a liar to argue that the claimant was foolish to take him at his word. Thus, where a vendor of a public-house was sued in deceit for misrepresenting the takings of the business, it was held to be no defence that the vendor’s books were in the house at the time and would have disclosed the truth had the claimant chosen to look at them.Nor can the representor escape liability on the ground that knowledge of the truth must be imputed to the representee; as, for example where the representee’s agent knew the true facts.

18-38 Reliance and materialitySince the reasonableness of the claimant’s reliance is not relevant to liability in deceit, it is submitted that it equally follows that the materiality or otherwise of the defendant’s statement is out of account. All that is required is reliance: once this is shown the fraudulent defendant should not be permitted to argue that what he said would not have induced a reasonable person to so act.”

Mr Mason did not dispute that these passages accurately state the law. Nor did he take issue with Mr Goodkin’s submission that it is not necessary that the misrepresentation should be the sole cause which induced the representee to make the contract, and that it is sufficient if it can be shown to have been one of the inducing causes. That this is the position was famously confirmed by Denman J and the Court of Appeal in Edgington v Fitzmaurice(1885) 29 Ch D 459, a case in which the plaintiff had advanced funds on the faith of a prospectus, which was materially false as to the intentions for the funds being raised by the issue of debentures, but also on the basis of the plaintiff’s own mistaken belief as to how the debentures were to be secured. Bowen LJ, at page 482, held that the fraudulent misrepresentation must have been “either the sole cause of the plaintiff’s act, or materially contributed to his so acting”, so indicating that the fraudulent misrepresentation need not be the only causative element. Cotton LJ held the same, namely that it “is not necessary to show that the misstatement was the sole cause of his acting as he did” (see page 481). Similarly, there was also no issue between the parties as to the following proposition stated in Chitty on Contracts (31^st Ed., 2012) at paragraph 6-039 (“Material misrepresentation and a presumption of inducement”):

“Once it is proved that a false statement was made which is ‘material’ in the sense that it was likely to induce the contract, and that the representee entered the contract, it is a fair inference of fact (though not an inference of law) that he was influenced by the statement, and the inference is particularly strong where the misrepresentation was fraudulent. …”.

Mr Mason submitted that, notwithstanding this presumption, the evidence demonstrates that, in the present case, Dr Khambay/Clubhire were relying not on anything stated by Mr Nijhar but on their own experience in the property sector or on the experience of Mr Mehli and (possibly) also Mr Khurll and Mr Dolan, or a combination of this experience. I say straightaway that I reject the submission that Dr Khambay/Clubhire relied, in any material respect, on Mr Khurll or Mr Dolan in relation to the Site. It was perfectly clear from the evidence given by Mr Kurrl that his involvement with the Site (such as it was) was very slight and that Dr Khambay was not basing himself on what he was told by Mr Khurll. Clearly, as far Dr Khambay was concerned, the people he was working with in relation to the Site were Mr Nijhar and Mr Mehli. As between Mr Nijhar and Mr Mehli, however, it is clear that it was ultimately Mr Nijhar to whom Dr Khambay looked, Mr Mehli ceasing to be anything like as involved as he had previously been after the meeting on 19 July 2006 when it was decided by Dr Khambay that Mr Mehli would no longer be part of the single purpose vehicle arrangements which had until then been contemplated. As for Mr Dolan, as I have previously pointed out, nowhere is there any mention of him in any of the contemporaneous documents. I am quite sure, in the circumstances, that he had no involvement in relation to the Site and that he was not somebody upon whom Dr Khambay placed any reliance in relation to the Site. There is no evidence that he has any property experience at all.

In any event, what matters for present purposes is what reliance was placed on the statements which Dr Khambay/Clubhire have alleged were made by Mr Nijhar. I have to decide whether in relation to those statements, or any of them (assuming of course that they were made at all, which I have concluded they were not), Dr Khambay/Clubhire relied on what Mr Nijhar told him, or whether he instead relied either on his own experience or that of Mr Mehli. If Dr Khambay/Clubhire relied both on what Mr Nijhar told him and on his own experience or that of Mr Mehli, reliance is established. It is only if I were to conclude that Dr Khambay/Clubhire placed no reliance on the statements alleged to have been made by Mr Nijhar that reliance would not be made out. My focus, therefore, is on the statements which Mr Nijhar is alleged to have made, and not on matters which are really to be regarded as no more than generality. I must ask myself whether Dr Khambay/Clubhire relied on those alleged statements. If they would have done what they did regardless of the alleged statements, namely proceed with the purchase of the Site and enter into the Consultancy Contract with Gravitas, then inducement is not made out. Consistent with the correct approach as a matter of law, I must leave out of account the question of whether Dr Khambay/Clubhire acted reasonably in relying on Mr Nijhar’s alleged statements.

Applying this approach and considering the alleged statements in the order which I have done above, had I found that the housing association and supermarket representations which Mr Nijhar is alleged to have made in paragraphs 12 g) and h) of the Particulars of Claim had actually been made, nonetheless I would have decided that inducement had not been established. It might be thought that this is the obvious conclusion in circumstances where, my having concluded that those representations were not made, nonetheless Dr Khambay/Clubhire went ahead and purchased the Site, and also entered into the Consultancy Contract. That, in my judgment, represents too simplistic an approach, however, since it might legitimately be observed that, if the representations had been made, Dr Khambay/Clubhire would have been bound to have relied on them to some degree. Nonetheless I do not consider that, on analysis, this is right. I am satisfied that Dr Khambay/Clubhire would have proceeded as they did even if the representations had not been made or if it had been explained that what had been represented was actually untrue (I need not, in the circumstances, decide which is the right test to apply in this context: see Deceit, The Lie of the Law at paras. 7.33 to 7.41), and what Mr Nijhar had instead told Dr Khambay was simply that he had spoken to housing associations and they were interested in a general sense (as Mr Nijhar admitted and as I have found was what he did tell Dr Khambay). As to the supermarkets, I have found that no mention was made by Mr Nijhar of his having spoken to them prior to the Site’s purchase. Even had some mention been made, however, but not in the terms alleged by Dr Khambay/Clubhire and instead in the more general way that housing associations were mentioned, I consider that Dr Khambay/Clubhire would, in any event, have acted in the same way as they, in fact, did. In my view, that also would have been the position even if no mention of supermarkets had been made at all, since I consider that Dr Khambay/Clubhire are likely, even in those circumstances, to have gone ahead on the basis that, in all probability, supermarkets would be interested in a location such as the Site. Mr Mehli had, after all, told Dr Khambay at the very outset that he considered that the Site could be used for mixed commercial and residential development.

As to the allegation that Mr Nijhar guaranteed that a minimum £500,000 profit would be made since, even if this was what Mr Nijhar did, in view of what Mr Mehli described as his own view that there would be a £500,000 minimum profit, I consider that, in all probability, Dr Khambay/Clubhire would have gone ahead with the purchase of the Site and entered into the Consultancy Contract with Gravitas, in any event, and so regardless of whether Mr Nijhar gave the guarantee alleged. I accept that Dr Khambay only wanted to purchase the Site if satisfied that it had significant potential to make a profit for him. To that extent, therefore, I accept also that he was reluctant to proceed with the purchase. However, I am satisfied that that reluctance went away not because Mr Nijhar made him any guarantee that a minimum £500,000 profit would be made (assuming that he did), but because Mr Nijhar and Mr Mehli were agreed that that was the minimum level of profit which they expected to be made. In other words, even without the guarantee allegedly given by Mr Nijhar, Dr Khambay/Clubhire would anyway have done what they did.

This leaves the statements alleged to have been made in paragraphs 12 a) to f) of the Particulars of Claim concerning Mr Nijhar saying that he had received assurances from the Council’s planning officers that planning permission would be granted for mixed retail and residential use and, in view of this, that this would be achieved by the following Easter. Again, these are representations which I have concluded were not, in fact, made. Assuming that they were, however, made, the question, as before, is then whether Dr Khambay/Clubhire relied on them. In my view, they did not. Even though Dr Khambay’s experience had been to date in West London and in smaller properties than the Site, Dr Khambay nonetheless had not insignificant experience in the property business. Specifically, as his curriculum vitae demonstrated, Dr Khambay had experience in relation to the obtaining of planning permission. I recognise that that experience probably entailed Dr Khambay employing others with more property experience to take care of the planning permission process. However, it would be unreal to regard him as naive in property matters and in relation to planning permission in particular. In view of this, I consider that the suggestion that Dr Khambay/Clubhire relied on the representations with which I am now dealing should be viewed with some scepticism. I emphasise that I am not approaching matters on the basis that there is a requirement that Dr Khambay/Clubhire should have acted reasonably in relying on the representations, since I acknowledge that there is no such requirement in addition to the requirement that it be established, on the evidence, that Dr Khambay/Clubhire relied on the representations. I do, however, consider that it is relevant to ask whether, given the experience which Dr Khambay had in relation to property matters and in relation to planning permission specifically, there can really have been the inducement which is now alleged. As it is put in Deceit, The Lie of the Law at para. 7.42:

“Once the fraudulent misrepresentation has been established as having induced the resulting loss-causing conduct, it seems just that the credulity or stupidity of the representee in relying on the representation should not enter into the equation of determining the causative influence or effect of the representation. Fraudsters prey on the gullibility and naivety of their victims. There is no good reason why the mere fact that the representee was ‘taken in’ by the misrepresentation, no matter how silly the representee’s faith or error, should relieve the representor of liability. That is not to say that the more unreasonable the representee has been in relying on the misrepresentation should be ignored in coming to a conclusion on whether there has been an inducement at all or in rebutting any applicable presumption of inducement. If, however, it is proved that the representee was induced, irrespective of how foolishly, the representee should have a cause of action in deceit assuming all of its requirements are satisfied.”

It seems to me that, adopting this approach, I am entitled to conclude that Dr Khambay/Clubhire cannot have been induced in the manner suggested by the representations set out in paragraphs 12 a) to f) of the Particulars of Claim. That is the conclusion which I have reached. It seems to me that, in view of the experience which Dr Khambay had in relation to property and planning permission in particular, he cannot have placed any reliance on what he says Mr Nijhar told him about what the planning officers at the Council had said. Dr Khambay must have known that no planning officer would commit to granting planning permission on the basis of what, on any view, was only brief contact with somebody in Mr Nijhar’s position. The suggestion, in such circumstances, that Dr Khambay/Clubhire relied on Mr Nijhar’s statement, as it is put in paragraph 12 c), that “the said planning officers had told the Defendant that planning permission would be granted for the Site for mixed retail and residential use” is, in my view, unrealistic. Dr Khambay would have been bound to have known that the planning permission process would follow a set course, and that without that course being followed there could be no assurance that planning permission would be granted. He would have known that the process takes several months. That, indeed, is what Mr Nijhar made clear to Dr Khambay. The reason why the process takes several months is precisely because applications have to be made in a proper way, and before applications are made, a pre-application process is followed which is meant to ascertain what is likely to be achievable and what is not from a planning perspective. I consider that, with this type of knowledge, Dr Khambay cannot have relied on what Mr Nijhar is alleged to have told him in paragraph 12 c), nor what is alleged in paragraphs 12 d) to f), since those paragraphs essentially follow on from paragraph 12 c) and entail the allegation that Mr Nijhar was telling Dr Khambay that the matters set out in paragraphs 12 d to f) were what he had himself been told by the Council’s planning officers (and not merely what Mr Nijhar himself thought) or, at least, were what followed from what the planning officers had told Mr Nijhar. Further, in view of what I have decided in relation to paragraph 12 c), it seems to me that the representations alleged in paragraphs 12 a) and b) (that Mr Nijhar knew senior planning officers at the Council, indeed, that he was on first name terms with them, and that he had spoken to planning officers at the Council) are also representations on which Dr Khambay/Clubhire cannot have relied. I am clear that, since Dr Khambay would have known, as I have decided, that there could be no assurance that planning permission would be obtained, the fact that he was being told by Mr Nijhar (if he was being told) that he knew senior planning officers at the Council and had spoken to planning officers there is not something which he would have relied upon when deciding to proceed with the purchase of the Site and to enter into the Consultancy Contract.

There remains the case based on breach of duty. In the light of my findings as to what Mr Nijhar told Dr Khambay/Clubhire in advance of the Site’s purchase, this is a case which cannot succeed. I should nonetheless deal with the question of whether Mr Nijhar owed Dr Khambay/Clubhire a duty of care, in case the matter were to go further, in circumstances where I have, of course, heard a considerable quantity of evidence which is relevant to the duty of care issue. I shall endeavour, however, to set out my views as briefly as I can – a task aided by the fact that there was no dispute between Mr Goodkin and Mr Mason as to the applicable legal principles.

In support of his argument that a duty of care was owed by Mr Nijhar to Dr Khambay/Clubhire, Mr Goodkin’s essential submission was that there is, as he put it in his written closing submissions, “good evidence” to show that Mr Nijhar assumed a duty of care in relation to the opinions and advice he expressed, and to show also that it was reasonable for Dr Khambay to rely upon the opinions and advice that Mr Nijhar provided. Mr Goodkin submitted that this follows from the fact that Mr Nijhar purported to have special skill and specialist knowledge of the residential and retail developments generally as well as, importantly, specialist knowledge of the planning and profit potential of the Site. In this regard, Mr Goodkin relied on Hedley Byrne v Heller [1964] AC 465 per Lord Morris at pages 502-503, and on Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 per Lord Goff at page 180. Mr Goodkin submitted, as he described it in the further or alternative, that: Mr Nijhar voluntarily assumed responsibility for the advice which he gave to Dr Khambay/Clubhire (see Hedley Byrne v Heller per Lord Devlin at page 529, and Clerk & Lindsell at para. 8-95), pointing out that the test of assumption of responsibility is applied objectively (Henderson v Merrett Syndicates Ltd per Lord Goff at page 181); and/or that a special relationship arose out of the fact that Mr Nijhar was seeking to persuade Dr Khambay/Clubhire to enter into the Consultancy Contract with Gravitas and to purchase the Site (Hedley Byrne v Heller per Lord Reid at page 483 and per Lord Morris at page 502, and Clerk & Lindsell at para. 8-94); and/or that Mr Nijhar knew, or ought to have known, that Dr Khambay/Clubhire were relying upon his advice given the experience and particular knowledge which Mr Nijhar claimed to possess and their comparative lack of expertise; and/or that it would be fair just and reasonable to hold that Mr Nijhar was subject to a duty of care when he tendered the advice to Dr Khambay/Clubhire (Caparo Industries v Dickman [1990] 2 AC 605, and Clerk & Lindsell at para. 8-97).

In these respects, it seems to me that it is helpful to have in mind the following passage from the speech of Lord Bingham in Commissioners of Customs & Excise v. Barclays Bank plc[2006] UKHL 28, [2007] 1 AC 181, the leading authority to which reference is made in the extracts from Clerk & Lindsell relied upon by Mr Goodkin.

“4.

... the authorities disclose three tests which have been used in deciding whether a defendant sued as causing pure economic loss to a claimant owed him a duty of care in tort. The first is whether the defendant assumed responsibility for what he said and did vis-à-vis the claimant, or is to be treated by the law as having done so. The second is commonly known as the threefold test: whether loss to the claimant was a reasonably foreseeable consequence of what the defendant did or failed to do; whether the relationship between the parties was one of sufficient proximity; and whether in all the circumstances it is fair, just and reasonable to impose a duty of care on the defendant towards the claimant ...”.

After reviewing a number of authorities concerned with the application of these various tests, Lord Bingham went on to say this:

“8.

... it seems to me that the outcomes (or majority outcomes) of the leading cases cited above are in every or almost every instance sensible and just, irrespective of the test applied to achieve that outcome. This is not to disparage the value of and need for a test of liability in tortious negligence, which any law of tort must propound if it is not to become a morass of single instances. But it does in my opinion concentrate attention on the detailed circumstances of the particular case and the particular relationship between the parties in the context of their legal and factual situation as a whole.”

The same point was made by Lord Hoffmann:

“35.

There is a tendency, which has been remarked upon by many judges, for phrases like ‘proximate’, ‘fair, just and reasonable’ and ‘assumption of responsibility’ to be used as slogans rather than practical guides to whether a duty should exist or not. These phrases are often illuminating but discrimination is needed to identify the factual situations in which they provide useful guidance.”

In support of his arguments in this context, Mr Goodkin relied on the following evidence in particular: the fact that Mr Nijhar purported to charge, in an email sent on 29 July 2006, £13,500 for professional consultancy services which he provided prior to purchase of the Site by Dr Khambay/Clubhire; the fact that in his 31 July 2006 letter, as well as in further letters dated 4 and 9 August 2006, Mr Nijhar referred to his “project management consultancy support” running “from pre-acquisition stage”; the fact that Mr Nijhar admitted in the Defence that Dr Khambay contacted him “in order to discuss what if any development potential the Site had and whether it would be advisable for the Claimants to purchase it”; the fact that Mr Nijhar accepted in cross-examination that he was instructed by Dr Khambay to carry out an appraisal of the Site; the fact that Mr Nijhar wrote on 12 July 2006 that he was “actively pursuing the Site”, with Mr Mehli’s cousin being “out of the picture”; the fact that Mr Nijhar accepted, again during cross-examination, that he began investigating the planning potential of the Site and advising Dr Khambay in relation to it prior to purchase of the Site; and the fact that on 28 July 2006 Mr Nijhar advised that he had inspected the Site and told Dr Khambay that the purchase price was “right” in view of his inspection.

Taken together, Mr Goodkin submitted that Mr Nijhar should be regarded as having owed Dr Khambay/Clubhire a common law duty of care to ensure that the statements of both fact and opinion made by him were true. Mr Mason did not accept this. His position was uncomplicated: that the relationship between Mr Nijhar and Dr Khambay/Clubhire was, as he put it in his written closing submissions, “of an arms length business nature and not such as to give rise to a duty of care”; and, in any event, that Mr Nijhar professed no specialist knowledge of the planning and profit potential of the Site, so that there was no assumption of any duty of care by him. It seems to me, although I reiterate that ultimately nothing turns on this aspect of my decision, that Mr Goodkin’s submissions are right. Adopting the approach described by both Lord Bingham and Lord Hoffman in Commissioners of Customs & Excise v. Barclays Bank plc, I am satisfied that this is a case in which it is appropriate to conclude that a duty of care was owed. It seems to me that, for the reasons given by Mr Goodkin and specifically based on the evidence to which he referred, the particular relationship of Mr Nijhar towards Dr Khambay/Clubhire in the lead-up to the entry into the Consultancy Contract (with Gravitas, not Mr Nijhar) and prior to purchase of the Site was one which gave rise to a duty of care. It is no answer for Mr Mason to say that, after the Consultancy Contract was entered into, duties were only owed by Gravitas, since the focus of Mr Goodkin’s submission is on the earlier period and a time when not only did the Consultancy Contract not yet exist (other than in draft) but, in addition, Gravitas had still to be incorporated and so brought into existence.

As I have made clear, however, my conclusion that a duty of care was owed by Mr Nijhar is wholly academic in view of the conclusions which I have reached both as to whether the statements alleged by Dr Khambay/Clubhire were made at all (I have decided that they were not) and as to whether, if the statements were made, they were relied upon by Dr Khambay/Clubhire (I have, again, decided that they were not).

I come on now to address Dr Khambay/Clubhire’s additional case. This is the allegation that, having omitted to tell Dr Khambay/Clubhire that a planning scheme submitted in early 2007 had been rejected by the Council, Mr Nijhar made certain misrepresentations on 14 August 2007 which caused Dr Khambay to authorise an additional payment to Gravitas. It is a very modestly valued claim: if successful, Dr Khambay/Clubhire stand to recover £34,042.55 (exclusive of VAT), the amount which Gravitas was paid on 17 August 2007. Despite its modest value, a large part of the trial was taken up with it. Mr Nijhar was cross-examined at length over post-purchase events, starting in August 2006 and stretching not only over the following year (up to August 2007, when the payment was made), but also beyond on the basis, as Mr Goodkin explained it in his written closing submissions, that events in the later period “related to factual disputes arising earlier in time, or collateral issues of Mr Nijhar’s honesty and credibility”. In addition, the evidence given by Mr Prichard, Mr Holmes and Mr McCallum all related to post-August 2007 events: in the case of Mr Prichard, his evidence was concerned with things which happened after February 2010; Mr Holmes gave evidence concerning his involvement starting in late 2007; and Mr McCallum did not become involved with the Site until 2009.

I have to say that I regard it as unfortunate that so much time and effort should have been devoted to such matters. It is right to acknowledge that Mr Nijhar had in the Defence put Dr Khambay/Clubhire to proof in respect of steps taken by them in mitigation of their (alleged) loss. I appreciate, therefore, that evidence had to be gathered in order to address this issue, and that in this context disclosure had to be given also. However, at some point (I am not clear when) Mr Nijhar ceased to take a failure to mitigate point, and so it is open to considerable doubt whether, in the event, all the evidence which was put forward (admittedly on both sides) really was necessary. In the circumstances, I do not intend making this judgment even longer than it already is by making findings concerning events after August 2007. Mr Goodkin, in his written closing submissions, himself expressly acknowledged that it “is not necessary to make specific findings of fact in relation to the period after the second payment [the August 2007 payment] was made to Mr Nijhar”. I agree, and I decline to do so. I bear in mind, in this context, that inasmuch as Mr Goodkin relies on such events as impacting on Mr Nijhar’s credibility, I have already essentially accepted Mr Goodkin’s submissions in relation to that matter. In my view, to take up time exploring in any detail events which substantially post-date the representations relied upon by Dr Khambay/Clubhire in relation to this additional claim is quite unnecessary.

It follows that I focus in this part of my judgment on events leading up to the August 2007 payment. This requires me, in effect, to consider what happened in the calendar year immediately after purchase of the Site by Clubhire in August 2006 as background to the case advanced by Dr Khambay/Clubhire, namely that Mr Nijhar made certain representations on a specific day (14 August 2007). In doing so, I remind myself that the only case which, as I understand it, is advanced is a claim in deceit. There is no alternative claim in negligent misrepresentation/misstatement or in breach of collateral contract. In paragraphs 45 to 47 of the Particulars of Claim, the following is alleged:

“45

Further or alternatively, on 14 August 2007, the Defendant made express and/or implied representations that:

a)

there was a reasonable prospect of a deal being entered into with the Co-Op whereby a supermarket would be established on the Site; and/or

b)

as at 14 August 2007, it was possible to obtain planning permission for a substantial retail element in the development of the Site.

46

The representations set out at paragraph 45 above were false. At the time the said representations were made, the Defendant had been informed and was aware that no retail development in excess of 200 square metres would be permitted. …

47

The First and/or Second Claimant reasonably relied upon and was induced by the representations set out at paragraph 45 above to make a payment of £34,042.55 (exclusive of VAT) to the Defendant on 17 August 2007. … .”

This is a claim in deceit, and it is this claim which I must now consider, doing so by reference to what has been specifically alleged rather than by reference to anything more general. In a case where deceit is the case advanced, it seems to me that it is very important to be specific. That is what I intend, therefore, to be. I shall concentrate on the matters on which Mr Goodkin placed particular emphasis.

Before embarking on an examination of the relevant events, I should first, however, address a point which emerged during the course of oral closing submissions and which was the subject of further written submissions from Mr Goodkin on 12 December 2014 and from Mr Mason a week after that. The issue is whether it is open to Dr Khambay/Clubhire to advance a claim in deceit against Mr Nijhar personally, as opposed to Gravitas, Mr Nijhar’s company and the party which entered into the Consultancy Contract.

It was Mr Goodkin’s position that Mr Nijhar can be held personally liable, notwithstanding the fact that it was Gravitas (not Mr Nijhar) which was a party to the Consultancy Contract and Mr Nijhar’s role after this agreement had been entered into was, as he accepted was the case, to act as Gravitas’s agent in dealings with Dr Khambay/Clubhire. Mr Goodkin relied in this regard on the following observation by Lord Scarman in Stanley Yeung Kai Yung & Another v Hong Kong and Shanghai Banking Corp [1981] AC 787 at page 795D:

“It is not the law that, if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another, unless he can show that by the law of agency he is to be held to have expressly or impliedly negatived his personal liability.”

Mr Goodkin submitted, therefore, that, unless Mr Nijhar can establish that he expressly or impliedly negatived his personal liability to Dr Khambay/Clubhire, he will be liable in the tort of deceit in the same way as he would be so liable had he not acted as Gravitas’s agent. As Mr Goodkin put it, the starting point is that an individual will always be liable for his or her torts unless he or she has negatived his or her personal liability. In the present case, Mr Goodkin submitted, Mr Nijhar did nothing to negative his personal liability, nor did he give any indication even that he was not regarding himself as assuming personal liability for torts which he might commit (including the tort of deceit).

Mr Mason’s position was that this is not a situation such as that contemplated by Lord Scarman in Stanley Yeung Kai Yung & Another v Hong Kong and Shanghai Banking Corp. That was a case, he submitted, involving a principal and an agent, as demonstrated by Lord Scarman’s reference at page 795 C-D to “a person” being “liable for his engagements (as for his torts) even though he is acting for another”, the “person” in that case being the agent which was a separate legal entity from the principal. Mr Mason suggested that Mr Nijhar’s situation is not the same because what he did in his dealings with Dr Khambay/Clubhire after August 2006 was not to act as Gravitas’s agent, but to act as Gravitas itself. Accordingly, so Mr Mason submitted, applying the approach enshri6`ned in Saloman v Saloman & Co. Ltd (1897) AC 22, Mr Nijhar cannot be liable in his own (as opposed to in Gravitas’s) right.

Mr Mason highlighted in this context that Saloman v Saloman & Co. Ltd was a case in which the decision at first instance that the defendant company was acting as an agent for a company member was rejected by the House of Lords, with Lord Herschell saying this at page 43:

“In a popular sense, a company may in every case be said to carry on business for and behalf of its shareholders: but this certainly does not in point of law constitute the relation of principal and agent between them or render the shareholders liable to indemnify the company against the debts which it incurs.”

Mr Mason also relied on what Lord MacNaghten had to say at page 51:

“The company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act. That is, I think, the declared intention of the enactment.”

Mr Mason’s submission was that it follows from these statements of principle that Mr Nijhar is not to be regarded as having been acting on anything other than Gravitas’s behalf. He added, in support of this proposition, that Dr Khambay/Clubhire knew that Gravitas had been incorporated by Mr Nijhar and knew also that this was the entity which entered into the Consultancy Contract. It was Gravitas which provided the services under that agreement and which invoiced for those services. In such circumstances, Mr Mason submitted, Mr Nijhar cannot have been doing or saying anything other than as Gravitas; he was not acting on Gravitas’s behalf, and so was not in any sense an agent of that company.

I cannot accept Mr Mason’s submissions. It is quite clear to me that Mr Nijhar was acting as the agent of Gravitas. Gravitas, like any company, will typically act through agents. Those agents may themselves be other companies. In the present case, no other company was involved; Gravitas acted through Mr Nijhar. Mr Nijhar was, therefore, Gravitas’s agent. As such, he is himself liable, personally liable, for his actions and statements. As it is put in Deceit, The Lie of the Law at para. 6.22:

“In cases where the agent has been fraudulent, whether or not the fraud is answerable by the principal, the agent remains liable for the fraud in an action for deceit brought by the third party. This is so, because the liability in deceit is not dependent on any particular or special relationship between the third party and the agent. The agent’s fraudulent misrepresentation is made in contravention of the so-called universal obligation of honesty. Accordingly, if the principal was vicariously liable for the agent’s fraud, the fact that the agent’s conduct has been attributed to the responsibility of the principal does not through some alchemical process deprive the agent of his own responsibility for such conduct.”

Saloman v Saloman & Co. Ltd does not assist Mr Mason’s argument. This is because that was a case in which the issue was not the present issue. On the contrary, it was a case in which the issue was whether a company is to be regarded as one and the same as its members (or shareholders). The House of Lords decided that that is, indeed, how a company is to be regarded. As such, a company is not, in law, an agent of its members, but is a legal entity which is distinct from its members. It cannot conceivably follow from this that the law is that a company cannot act through agents (including agents who are its members). This is a quite different issue. Indeed, far from supporting Mr Mason’s submission, it is clear to me that Saloman v Saloman & Co. Ltd actually supports Mr Goodkin’s submission because the principle of separate corporate personality serves more than amply to confirm that a company is a separate legal entity from its members, and so when it acts through its members the company is engaged in a principal/agent relationship with its members. Mr Mason’s submission that Mr Nijhar is Gravitas represents a denial of the principle of separate corporate personality, and is simply wrong. It follows that I reject Mr Mason’s submissions on this preliminary point of principle.

I might add that, although Mr Goodkin’s submission was that it would have been open to Mr Nijhar to have negatived (expressly or impliedly) his personal liability, it is not clear to me that this would be the position in relation to what is, after all, a case in which deceit is alleged. I did not hear argument on this issue, which anyway does not arise in circumstances where Mr Mason was unable to point to any evidence demonstrating that Mr Nijhar negatived his personal liability. However, the usual position is that a party cannot contract out of liability for fraud: see Deceit, The Lie of the Law, MacDonald Eggers (2009)at para. 8.95. Therefore, had Mr Nijhar purported to negative his personal liability, I am doubtful that this would have achieved what he had intended. As I say, however, on the evidence before me, the point does not arise.

Although no claim has been brought in relation to Mr Nijhar’s or Gravitas’s management of the project, Mr Goodkin strongly questioned Mr Nijhar’s competence. He did so in reliance on Mr Prichard’s evidence in particular, and his clear view that the first step, when seeking to obtain planning permission, is determining what development a site can accommodate because there is no point seeking planning permission for a scheme that is physically impossible to build. In this case, Mr Prichard was absolutely clear that a highway consultant was required to determine what development could be accommodated. He was also clear that it was vitally important for a commercial retail development to have an architect and a planning consultant. Despite this, Mr Nijhar (and Gravitas) took no steps to engage a highway consultant or a planning consultant. Mr Nijhar sought to justify this by saying that he had been told not to incur any additional expenses because the idea was that money would come from the local authority rather than from Clubhire (and Dr Khambay). However, when pressed about who he was saying had told him this, Mr Nijhar unconvincingly said that it was Mr Dolan, somebody who clearly had no involvement in relation to the Site at all. I am quite clear that the reason why such consultants were not engaged was simply that Mr Nijhar did not give thought to the need to engage this type of expertise. I am also quite clear that this was because Mr Nijhar lacked experience in property development and specifically planning permission issues. Indeed, it is instructive that, when pressed still further, Mr Nijhar gave a different reason why a highway consultant and a planning consultant had not been engaged. This was that he did not consider that they were required at the pre-application stage. Why Mr Nijhar should give contradictory evidence in this way is not clear. It was again much to his discredit. However, I consider that this alternative (and inconsistent) explanation is more likely to reflect the truth than the explanation which involved Mr Dolan. It is an explanation which, I am quite satisfied, serves to underline Mr Nijhar’s lack of relevant experience. This lack of experience is also illustrated by Mr Nijhar’s choice of architect, a company called Homestyle Projects Limited (“Homestyle”), which proved unable to produce a viable scheme, with Mr Prichard describing the quality of their work as appalling.

I remind myself, however, that the claims in these proceedings are not claims against Gravitas in respect of its mismanagement of the Site development. The fact that, as matters stand, planning permission has still to be obtained and no buyer has been found for the Site is, of course, highly relevant to Dr Khambay/Clubhire’s damages claims – as is the fact that it appears, based on the evidence before me, that the Site is worth substantially less than the £870,000 which Clubhire paid for it. However, whether this is the position because of mismanagement of the development is not the issue which I must determine. I must instead decide whether Dr Khambay/Clubhire were deceived into making a single payment in August 2007 by what Mr Nijhar told them. I acknowledge that this requires me to explore, at least to some extent, the background. However, it does not require me to determine a project mismanagement case which has not been advanced in these proceedings and which, in any event, would in all probability be a case which, were it to be put forward, would need to be advanced not against Mr Nijhar in his personal capacity but against Gravitas, a non-party to these proceedings and the company which entered into the Consultancy Contract.

A few weeks after Clubhire’s purchase of the Site (by which I mean exchange of contracts rather than completion), Gravitas prepared what was described as a “Development Progress Report” in which it was stated that the “Purpose of the Report” was to “inform the client, Clubhire Limited, of the progress on the plans to develop the site”. This report was dated 1 September 2006 and purported to report in relation to the period from 9 August to 1 September 2006. It began by stating that Gravitas “have initiated and held several meetings with potential clients for the site over this period”, referring to “Four separate client meetings ... held in and around the Midlands area including Nottingham”. It went on to refer to Gravitas having “agreed for two Registered Social Landlords to undertake feasibility of the site based on their housing need research for the area” and added that “We have indicated to them that we should like to take forward the design of any outline scheme to the planners by October with a view to securing a detailed planning consent by Easter 2007”. Mr Goodkin submitted that this is consistent with Mr Nijhar having represented, prior to the purchase, that planning permission would be obtained by Easter 2007 at the latest. I agree. However, it is not the same thing as saying that the reason why planning permission would be obtained in this timescale was that Mr Nijhar knew the planning officers at the Council and they had told him that planning permission would be just a “paper exercise”.

This is, of course, a matter in relation to which I have already stated my conclusions. I do not, therefore, take up further time with it in this context. I should, however, record that Mr Goodkin made powerful criticisms of the evidence given by Mr Nijhar when asked about the 1 September 2006 report. He pointed out that, when it was suggested by Mr Goodkin that the reference to Easter 2007 suggests that he told Dr Khambay/Clubhire, in advance of purchase of the Site, that planning permission would be obtained by that time, Mr Nijhar’s initial answer was that he had learned that two or three housing associations were likely to go forward given the market and local authority approval, and it was this which led him to believe that planning permission could be obtained by Easter 2007. Mr Goodkin highlighted the fact that Mr Nijhar agreed with Mr Goodkin that these had been discussions which had taken place prior to the purchase or at least that he had discussions with one or two housing associations at that stage, but then Mr Nijhar went on to state that he had learned, importantly since the Site’s purchase, that the Council would (as he put it) “offer” a partner, specifically the Bromford Housing Group, and that the Council would provide a grant. Mr Goodkin submitted that this was all evidence which Mr Nijhar had made up in the witness box. I am not so sure about this, however, because four days after the 1 September 2006 report, on 5 September 2006, Jephson Homes (a housing association) sent Mr Nijhar a fax which attached what was described as a “Maximised Scheme Layout” in respect of the Site. The writer, somebody by the name of Paul, continued by referring to a discussion (presumably with Mr Nijhar), stating that “the land value is working out at around £25k per plot and £1100 m² build”, and giving a “Land” value of £1 million and a “Build” value of £2.9 million. It is apparent from the scheme document that, consistent with what had been stated in the Gravitas letter dated 9 August 2006, the intended scheme was for 38 dwellings. The fax ended by stating that “This assumes Housing Corp Grant of £1.3m”. Shortly after this, on 7 September 2006, the Bromford Housing Group emailed Mr Nijhar (Gravitas), offering £25,000 per flat and £35,000 per house. Mr Lance Gurney, who sent the email, made it clear that these figures assumed “grant input”. Accordingly, although I agree with Mr Goodkin that the manner in which Mr Nijhar gave his evidence in relation to the 1 September 2006 report gave the impression that the evidence was untruthful, I do not feel in a position to conclude, taking into account these contemporaneous references to grant availability (including in an email from the Bromford Housing Group), that what Mr Nijhar had to say was made up.

That said, it is instructive that Gravitas’s first progress report was followed by another at the end of the same month, on 30 September 2006, and that in this report, under the heading “Dudley Council”, it was stated merely that “the ongoing negotiations with both Dudley Borough Council and local residents are beginning to warm up to the idea for a local residential development on the site”. This is an oddity, but I do not consider that it means that I should conclude that what Mr Nijhar had to say in evidence concerning grant availability was untrue. Again, I remind myself also that the allegation which I am now considering, Dr Khambay/Clubhire’s additional claim, is a very specific allegation concerning something which is alleged to have happened almost a year later.

Returning, therefore, to the chronology, it is clear from Mr Nijhar’s own handwritten notes that there was only limited activity in relation to the Site on his, or Gravitas’s part, during October and November 2006. On 7 December 2006, however, an offer was made on behalf of Mid-Counties Co-Op, through a Mr Gerard Thompson, to lease retail premises on the Site for £48,000 a year. This was expressed in terms that there should be a “headline rent of £12.00 per square foot”, so indicating that the intended lease would be in respect of a 4,000 ft² retail space. The offer letter began by referring to “our recent conversations”, reflecting the fact that Mr Nijhar had had discussions with Mr Thompson. Although I do not consider it greatly matters, these were discussions which, I am satisfied, were instigated not by Mr Nijhar, as he was apparently inclined to suggest in his witness statement, but by Mr Thompson.

Gravitas then produced a third progress report. This was dated 15 December 2006 and coincided, as Mr Goodkin pointed out, with three invoices which were sent to Dr Khambay/Clubhire seeking payment in relation to various matters. The report referred to various matters, in particular to a “painstaking exercise with numerous meetings and furnishing information for the supermarkets and their respective appointed agents”. It also stated, just before this, that a number of the supermarkets “have been in discussions with us to date”. Included in the list which was then set out, at the end, was “Mid Counties Co-Op Ltd”. The report then went on to refer, in terms, to Mid-Counties Co-Op’s 7 December 2006 offer, and to state how this had been discussed with Dr Khambay and it had been “agreed with you to pursue the offer and have proceeded to appoint an architectural practice to facilitate a mixed tenure scheme, forthwith”. It added: “We are endeavouring to have an outline planning application ready for submission by February 2007. This will incorporate the design brief received from the operator and with close liaison with the Co-Op”.

As contemplated by the end of year report, Gravitas submitted a pre-planning enquiry to the Council in early February 2007, probably on 7 February 2007 judging from the Council’s responsive letter dated 27 March 2007. This entailed the submission of drawings prepared by Homestyle. The proposal was a development with 860 m² of retail space and 63 housing units. This scheme corresponded both with Mid-Counties Co-Op’s requirements in relation to the retail requirements, and with the 63 units which Mr Nijhar had worked out (as demonstrated by certain handwritten notes on the email from Mr Gurney at the Bromford Housing Group sent on 7 September 2006) were required in relation to the offer which had been made by the Bromford Housing Group. The proposals did not, however, meet with approval from the Council. On the contrary, they met with considerable, and strongly expressed, disapproval in the form of the Council’s letter dated 27 March 2007. This letter contained a summary at the end in the following trenchant terms:

“The scheme represents a gross overdevelopment of the site and is poorly designed. This is demonstrated through an excessive density, large scale and bulk and massing of buildings that appear to have little regard to the context of the site and the existing form, nature and pattern of development within the area. The intensity and mixed use nature of the proposed development is likely to raise concerns in terms of noise impacts to prospective occupiers of the properties.

It is unlikely that a large retail development in excess of 200 square metres could be supported in this out of town location. ... The proposals fail to meet nature conservation objective as set out within Adopted Dudley Unitary Development Plan and would fail to integrate and retain the existing mature trees in the site within the new proposals to the detriment of the character of the area. The scheme would not be supported by the highway authority due to concerns regarding poor visibility, deficient loading area and lack [of] off-street parking for the scale of the proposals ... .”

This summary followed four pages of detailed consideration of the proposals, in which a number of matters were raised. These included the following observations:

Despite the clear terms of the Council’s response, Mr Nijhar insisted during his evidence, including in answer to a question from me, that he did not see what the Council had said as a rejection of the proposed scheme. This was very curious evidence indeed, since the Council had quite clearly formed a very dim view of what had been submitted. There can be no doubt, to my mind, that the Council had rejected the proposed scheme, and in strong terms. I do not see how Mr Nijhar could fail to see this, whether when giving evidence and being shown the letter in that context, or when reading the letter after it had been sent to him in 2007. I am quite clear that, whatever Mr Nijhar may have suggested when giving evidence over seven years after the event, at the time he knew that the Council had rejected the scheme and, furthermore, that that was not something which he expected would happen. This is confirmed by Mr Nijhar’s own contemporaneous notes, in which he stated that the Council’s response was “not as expected”. I reject his evidence, when taken to this comment by Mr Goodkin, that he was referring not to the Council’s rejection of the scheme, but to the fact that the Council’s response had been briefer than he had expected. This is not something he had ever said previously. Nor is there any evidence that, having received the letter dated 27 March 2007, Mr Nijhar contacted the Council to ask for a more detailed response. I am quite clear, in short, that Mr Nijhar was simply trying to explain away the obvious, which is that he had expected the Council to indicate approval for the scheme and not to reject it in the manner set out in the letter.

As Mr Goodkin put it in his written closing submissions, the “next and essential question” is whether Mr Nijhar informed Dr Khambay of the Council’s rejection of the proposed scheme. Mr Goodkin submitted that, if Mr Nijhar did not do this, then it constitutes “a material misrepresentation that induced the August 2007 payment”, as well as “strong evidence of Mr Nijhar’s dishonesty”. If by this Mr Goodkin meant to suggest that a failure to tell Dr Khambay/Clubhire about the Council’s decision would itself, and without more, entitle Dr Khambay/Clubhire to succeed with their additional claim, then, I do not agree. As made very clear in paragraph 45 of the Particulars of Claim, as set out above, the allegation which is made in these proceedings, and the only allegation, therefore, which it is open to Dr Khambay/Clubhire to pursue, is that Mr Nijhar made an express and/or implied representation on 14 August 2007. It is no part of Dr Khambay/Clubhire’s pleaded case that Mr Nijhar made an earlier misrepresentation.

I do nonetheless acknowledge that whether Mr Nijhar told Dr Khambay/Clubhire about the Council’s decision is relevant context to what Dr Khambay/Clubhire allege was represented by Mr Nijhar on 14 August 2007. I am quite clear that Mr Nijhar did not inform Dr Khambay/Clubhire. Dr Khambay’s evidence was that Mr Nijhar did not tell him. Indeed, Mr Nijhar himself did not say, when asked in cross-examination, that he told Dr Khambay. His evidence was that he “did not tell Dr Khambay personally”, but that he told Mr Dolan. He insisted that Mr Dolan was, as he described him in this context, “Dr Khambay’s property manager”. Mr Nijhar went on to say that it was his “remit from Dr Khambay” to speak to Mr Dolan. He added that the reference in his handwritten notes to the “Pre-App” having been “discussed with client” (following on immediately, in the same phrase, from the words “not as expected”) was intended by him to be a reference not to Dr Khambay, but to Mr Dolan. I have concluded that what Mr Nijhar had to say in relation to this was not true. As I have previously pointed out, Mr Dolan had no apparent involvement in relation to the Site. He is not mentioned in any of the very many documents which were produced for the purposes of the trial. Neither Mr Lakhani nor Dr Khambay suggested that he had any involvement. Nor did Mr Mehli, whose name is also mentioned in the handwritten note prepared by Mr Nijhar as having been told about the Council’s decision. It is perfectly clear that Mr Dolan had no involvement. It follows that Mr Nijhar’s evidence that he told Mr Dolan about the Council’s rejection of the scheme cannot be accepted. In the circumstances, I am unable to afford any significance to the reference in Mr Nijhar’s handwritten note to his having “discussed with client” the unexpected response of the Council to the proposed scheme. As Mr Nijhar himself acknowledged that the reference to “client” is not a reference to Dr Khambay/Clubhire, I struggle to see why it would be appropriate to conclude that it was, in fact, such a reference. I decline to do so. It is clear to me also that Mr Nijhar did not inform Mr Lakhani, not that it was Mr Nijhar’s position that he did. Specifically, under cover of an email sent by Mr Lakhani to Mr Nijhar on 26 April 2007, after he had apparently returned from a vacation which had started on 2 April 2007, Mr Lakhani provided Mr Nijhar with minutes of a meeting he had had with Mr Nijhar on 23 March 2007, four days before the Council’s letter dated 27 March 2007. The minutes indicate that that meeting was concerned with a number of matters, including Gravitas’s fees (mention was made of an agreed 25% profit share). They also record Mr Lakhani asking Mr Nijhar for “a copy of the drawings”, with Mr Nijhar responding “that these have been revised recently” but that he would let Mr Lakhani have a copy as soon as possible. Nowhere is there any mention of a pre-planning application having already been made to the Council, or of the drawings which Mr Lakhani had requested having already been provided to the Council with a decision by the Council in relation to those drawings awaited. This suggests to me that Mr Lakhani was unaware that an application had been made in early February 2007. I am clear also that, if Mr Lakhani was unaware of this having happened, Dr Khambay would have shared Mr Lakhani’s ignorance. Mr Lakhani was somebody in whom Dr Khambay placed a great deal of trust. It is inconceivable that Dr Khambay would have not kept Mr Lakhani in the loop as regards any application which had been made. I am not dissuaded from this conclusion by the fact that, in an email sent by Mr Nijhar to Mr Lakhani on 26 April 2007, in which Mr Nijhar took issue with the accuracy of Mr Lakhani’s minutes (albeit not saying on what basis), Mr Nijhar began by stating that he had “given a verbal update personally to Amarjit [Dr Khambay] at he [sic] beginning of this month and he is fully aware of the progress”. As I have pointed out, Mr Nijhar’s evidence was not that he had told Dr Khambay anything at this time, but that he told Mr Dolan – and then, as I understood him, not until the middle of the following month (May 2007). I am satisfied that neither Dr Khambay (and Clubhire) nor Mr Lakhani knew about the Council’s rejection of the proposed scheme. Indeed, I am clear that they did not even know that a proposed scheme had been submitted in February 2007, and that this unawareness on their part is the reason why nowhere in the documents is there anything showing that Mr Lakhani, Dr Khambay or Clubhire were chasing Mr Nijhar (and Gravitas) to be told what the Council had decided. Mr Lakhani’s request for sight of the drawings at the meeting on 23 March 2007 demonstrates that they had not been shown to him previously, yet he would have been bound to have asked to see any drawings which he was aware had already been submitted to the Council. The fact that, having failed to obtain the drawings from Mr Nijhar, Mr Lakhani then wrote directly to Homestyle to request them, which he did on 30 April 2007 and again (by email) on 17 May 2007, establishes that he did not already have them and was not aware that a proposal had already been submitted to, and rejected by, the Council.

I shall come on very shortly to address the meeting which took place between Mr Nijhar and Dr Khambay on 14 August 2007. I need first, however, briefly to mention that, on 4 June 2007, a different Co-Op entity, Midlands Co-operative Society Limited (“Midlands Co-Op”), emailed Mr Lakhani “to express an interest” in the Site. This was a contact which was made directly between Mr Nick Riches, a Business Development Negotiator at the Midlands Co-Op, and Mr Lakhani. A few weeks later, on 21 June 2007, Mr Riches wrote to Mr Nijhar, repeating the expression of interest and asking to arrange a meeting with Mr Nijhar. It is not entirely clear to me whether a meeting between Mr Nijhar and Mr Riches did take place, and if it did, when that was. What is clear, however, is that subsequently, on 4 July 2007, Mid-Counties Co-Op (not Midlands Co-Op) made an offer to lease retail premises at the Site “to establish a store of 4500 sq ft gross trading from 3000 sq ft with a minimum of 12 car parking spaces” for an annual rent of £54,000.

This, then, was the immediate backdrop to the meeting which took place on 14 August 2007. This meeting, like those which took place in the lead-up to Clubhire’s purchase of the Site, took place at Dr Khambay’s house. It is Dr Khambay/Clubhire’s case that, at this meeting, Mr Nijhar persuaded Dr Khambay to make the further payment of £34,042.55 (exclusive of VAT) or £40,000 (inclusive of VAT), and that he did so by representing that, firstly, there was a reasonable prospect of “a deal being entered into with the Co-Op whereby a supermarket would be established on the Site”, and, secondly, that, as matters stood at the date of the meeting “it was possible to obtain planning permission for a substantial retail element in the development of the Site”. In view of these being the allegations which are levelled at Mr Nijhar, it might have been expected that, in his witness statement, Dr Khambay would deal with the 14 August 2007 meeting, and indeed do so in some detail. Surprisingly, however, he did not do so. In fact, he made absolutely no mention of the meeting. The most that he did was to say this in paragraphs 65 and 66, although even then it is not clear to me that he was meaning to refer to a meeting on 14 August 2007 specifically:

“65

[Mr Nijhar] told me that he had been in discussions with the Co-Op and that they were interested in purchasing the Site. I asked him many times for confirmation of that but he did not produce it.

66

Our regular meetings continued throughout 2006 and 2007. Throughout the whole time, [Mr Nijhar] continued to tell me that he was dealing with senior people at the Co-Op. He claimed this had been happening since about Christmas 2006. He repeated this again and again, at most meetings that we had. I would ask him for meeting minutes or confirmation emails, something in writing on the Co-Op letterhead. He would say that he would get this for me and that it was no problem. He said that the Co-Op would write to him and that he would forward a copy of the letter to me. I would ask him at every meeting for minutes and documents from the Co-Op. [Mr Nijhar] never provided them. Likewise I asked repeatedly for minutes from the housing associations and the Council. He did not provide me those documents. He would give me the same reassurances and the same answers every time.”

When he came to give oral evidence, he was cross-examined by Mr Mason, but understandably only very lightly on the topic of the 14 August 2007 meeting. His evidence, in answer to such questioning, was that Mr Nijhar had told him at the meeting that he required payment because “he had to pay another consultant”, adding that he told him that “there were two consulting firms who could expedite planning permission”. Dr Khambay explained that he told Mr Nijhar that he would pay “if I have receipts”. He was then shown Mr Nijhar’s email later the same day to Dr Khambay, in which Mr Nijhar stated as follows:

“It was good to meet you this morning and I wanted to confirm the actions we have agreed.

I will now ask the architect working for us on the Dudley project to redraw the scheme in line with the information received from Matrix Partnership and Accord Housing in Birmingham. This will involve substituting the flats for the houses on a 70:30 split basis on the lines of their requirement. The Co-Op we will finalise the deal with once we have the scheme agreed in principle and the freehold and leasehold are drawn up by our lawyers (who would you want to use for this?).

You will release on account for the project on the lines of last years [sic] figures. I shall send in the invoice for the last period to cover the meetings etc.

... .”

Dr Khambay’s response was that he “was relying on Mr Nijhar assuring me, not the correspondence”. It was suggested to him by Mr Mason that the payment had nothing to do with contractors needing to be paid, to which Dr Khambay responded by saying that it was as Mr Nijhar told him that “he had already paid contractors” and it was on the basis of this that he (Dr Khambay) agreed to pay.

It seems to me that this evidence from Dr Khambay presents Dr Khambay/Clubhire’s case in relation to the additional claim with very real difficulties, both in relation to their need to prove that what is alleged in paragraph 45 of the Particulars of Claim was actually represented to Dr Khambay by Mr Nijhar at the 14 August 2007 meeting, and as regards the need to prove reliance. As to the former, I might add that I do not really understand how the implied representation case can work, other than in relation to the allegation that whatever Mr Nijhar expressly stated concerning “the Co-Op” and the obtaining of planning permission with a substantial retail element carried with it an implied representation that Mr Nijhar knew that there were reasonable grounds for what he was saying. It seems to me that Dr Khambay/Clubhire must, in other words, make good their case that Mr Nijhar did actually say something about these matters, and that it is not open to them to succeed with a case which is exclusively based on an alleged implied representation. In view of this, the lack of evidence from Dr Khambay is striking. Dr Khambay was not accompanied by anybody else at the meeting with Mr Nijhar. Mr Lakhani’s evidence is, therefore, not of any assistance as to what was or was not said by Mr Nijhar.

I have to decide whether, notwithstanding Dr Khambay’s evidence (or the lack of it) in relation to the 14 August 2007 meeting, the additional claim can nonetheless succeed because of what Mr Nijhar’s email had to say concerning the agreement said by him to have been reached at the meeting, and taking account also of Mr Nijhar’s evidence as to what happened at the meeting. I bear in mind, in this context, that paragraph 45 of the Particulars of Claim refers back to paragraph 27, in which the 14 August 2007 email is quoted, and that paragraph 28 then states that Mr Nijhar “thus assured” Dr Khambay/Clubhire “and represented that the development was feasible with both the Matrix Partnership and the Co-Op, in contradiction of the previously clearly expressed views of the Council”. It seems, therefore, that the deceit case put forward in paragraph 45 includes an allegation that Mr Nijhar misrepresented the position in his email as well as at the meeting itself. That said, as I shall come on to explain, the only deceit allegation in paragraph 45 concerns a representation by Mr Nijhar as to the Co-Op, not also the Matrix Partnership.

As to Mr Nijhar’s evidence, he said this in paragraph 56 of his witness statement:

“I met [Dr Khambay] on 14^th August 2007 at his residence for a meeting and provided all the latest information and [Dr Khambay] as part of the meeting agreed to release part of the outstanding second tranche of fees. Information from Matrix Partnership and Accord Housing were discussed and action agreed ... .”

In cross-examination, it was put to Mr Nijhar by Mr Goodkin that at the meeting he told Dr Khambay that “Matrix and the Co-Op were goers” yet that was not the case. His answer was that this was “incorrect” since “Matrix and the Co-Op were real prospects”.

The position on the evidence is, therefore, odd. Dr Khambay’s evidence does not support the case which is advanced. Mr Nijhar’s evidence, however, does provide some degree of support for that case, in that it is to the effect that there was a discussion concerning “Matrix and the Co-Op”. This is also supported by what Mr Nijhar had to say in his email sent after the meeting had taken place and reporting on what had been agreed. I have to ask myself, however, whether Mr Nijhar’s evidence (both in his witness statement and during cross-examination) and the contents of the email are sufficient to make me satisfied that, as alleged in paragraph 45 of the Particulars of Claim, Mr Nijhar represented that there was a reasonable prospect of “a deal being entered into with the Co-Op whereby a supermarket would be established on the Site”, and that “it was possible to obtain planning permission for a substantial retail element in the development of the Site”.

It seems to me that Mr Nijhar’s telling Dr Khambay that “Matrix and the Co-Op were real prospects” (as he put it in cross-examination) did equate to a representation (as far as the Co-Op was concerned) that there was a reasonable prospect of “a deal being entered into with the Co-Op whereby a supermarket would be established on the Site”. I do not consider, however, that it follows that Mr Nijhar’s evidence in this regard supports the additional allegation that “it was possible to obtain planning permission for a substantial retail element in the development of the Site”, since for that to be the case Mr Nijhar would have had to tell Dr Khambay rather more about what Mid-Counties Co-Op had offered. There is no evidence that he did so, other than the very vague evidence, in paragraph 56 of Mr Nijhar’s witness statement, that he “provided all the latest information” to Dr Khambay during the meeting. I cannot know what this “latest information” comprised, and I am not prepared simply to assume that it included the full details of the offer which had been made by Mid-Counties Co-Op (including the fact that it contemplated a 4,500 ft² retail unit). Nor, it seems to me, does Mr Nijhar’s email reporting on the meeting constitute such evidence.

Assuming that the first of the alleged representations concerning the Co-Op (by which Dr Khambay/Clubhire must mean Mid-Counties Co-Op, rather than Midlands Co-Op) was, indeed, made, and assuming also for present purposes that it was made deceitfully, given that Mr Nijhar would have known that the Mid-Counties Co-Op’s offer concerned a retail unit which was larger than the Council had indicated would be permissible, nonetheless I consider that Dr Khambay/Clubhire have not made out their case on inducement. Dr Khambay’s evidence was silent on the issue; indeed, his oral evidence was inconsistent with inducement by either of the representations alleged to have been made by Mr Nijhar at the meeting on 14 August 2007. Nor did Mr Lakhani assist in the evidence which he gave because, after referring to Mr Nijhar’s email sent after the meeting, Mr Lakhani went on in his witness statement to explain that he said to Dr Khambay that he “had not seen any progress and did not think that any further payment should be made”, but Dr Khambay told him to go ahead and pay in any event (which he did). This seems to me to make it very difficult for Dr Khambay/Clubhire’s reliance case to succeed.

It follows that, in my view, Dr Khambay/Clubhire’s additional claim must fail. I would only add that I do not regard it as open to Dr Khambay/Clubhire to advance a case based on anything which Mr Nijhar may have said concerning the Matrix Partnership and Accord Housing. Such a case is not advanced in paragraph 45 of the Particulars of Claim, the paragraph in which the deceit case is set out. The fact that there is reference to the Matrix Partnership and Accord Housing in Mr Nijhar’s 14 August 2007 email is, accordingly, irrelevant. Nor, I note, is it a case which was put forward in Mr Goodkin’s written opening submissions (see paragraph 61). In these circumstances, I propose to say nothing more about it.

In conclusion, therefore, despite my considerable misgivings over much of the evidence given by Mr Nijhar, I have reached the clear conclusion that the allegations made against Mr Nijhar by Dr Khambay/Clubhire have not been made out on the evidence adduced before me. It follows that Dr Khambay/Clubhire’s claims, both the primary claim and the additional claim, must be dismissed.