Jackson & Ors v Thakrar & Ors

Ramila and Vijaya were never intended by Subhash to acquire the beneficial ownership or any interest in any of the properties transferred into their name nor their proceeds of sale; neither of them provided any consideration for the acquisition of any of them, were ever consulted by Subhash as to their acquisition, the funding of that acquisition or any decision as to their management or disposal and were never informed of the fact that they had been acquired in their names. Subhash at no time ever accounted to them for these properties..

The registration of these properties into Ramila and Vijaya's names did not have the effect of passing beneficial ownership of the properties to them. Neither provided any consideration for these transfers and both were in complete ignorance of them.

Glen was formed by Subhash to be the property owning vehicle of all properties he considered himself to be the beneficial owner of including all properties registered in Ramila and Vijaya's names. The purpose of forming Glen was as a tax saving device and so as to protect the dishonestly acquired assets from third parties.

Shares in Glen were issued to Ramila and Vijaya as nominees for Subhash. They provided no consideration for the shares and were in complete ignorance of the transactions that transferred shares into or out of their names. They received no consideration for any transfer out of their names of any shares. The same absence of knowledge and of any provision of, or receipt of consideration for transfers of shares into or out of her name applied in relation to Teso for Vijaya.

Prior to 2000, Glen and Teso were beneficially owned by Subhash, were considered by Subhash to be beneficially owned by him and were considered by the directors of both Glen and Teso to be beneficially owned by Subhash, albeit that such assets were subject to SPC’s overriding interest and tracing rights.

Subhash had complete management control of Glen and Teso and acted throughout as beneficial owner in all respects. The directors of both companies only performed such functions as Subhash directed them to perform and never questioned or challenged any of his directions or decisions.

Mr Harjivan never acquired any beneficial interest in either Glen or Teso or in any shares issued by either of these companies.

There was never any sale or sale agreement whereby Vijaya or Ramila sold shares in Glen or Teso to Mr Harjivan and Mr Harjivan bought shares from Glen or Teso; nor in respect of Teso to his son Mitesh Mahindra.

Vijaya and Ramila never received any consideration for, or had any knowledge of, the sale of any shares in Glen or Teso to Mr Harjivan or in respect of Teso to his son, Mitesh Mahindra.

From 2000 until the appointment of administrators, the management of Glen and Teso has remained with Subhash who has continued to control these companies through the unquestioning following of his instructions by the directors and by those working at the offices of SKT and SKTL.

The conduct of the Thakrar Family members, save for Ramila and Vijaya, in the Family Actions was deceitful and had every appearance of being an abuse of process. These members were funded by Glen at Subhash's direction.

The appointment of administrators was undertaken by the directors of Glen for an improper motive and is liable to be directed to cease under paragraph 81 (1) of Schedule B 1. Furthermore, it appears that the directors never decided to appoint since no meeting occurred on 13 April 2007, albeit that Mr Shelton signed the draft minutes in the presence of, or at the request of, Subhash. No notice was given to Teso of the intention to appoint, the giving of notice is a condition precedent to appointment and the failure to give notice may not be waived or condoned by the chargeholder or the court. It would seem that the Teso floating or qualifying charge was not unenforceable as provided for in Schedule B 1. Furthermore, Glen did not qualify for administration on 13 April 2007 because it was not a company unable to meet its debts as they fell due.

The trial was not an abuse of process and the trial judge is not required to recuse himself. There are no grounds for a declaration of a mistrial or for an order for a new trial or for an order that the judge should recuse himself.

There is no basis for Subhash to contend that he has outstanding contribution claims against Parties 2 and 4 or for his seeking to direct the Trustee to maintain or commence such claims.

Shantaben has had no relevant knowledge of any part of the Thakrar Litigation but Subhash, and since 26 March 2006, Sheela in addition, have acted for her throughout pursuant to general powers of attorney. Her involvement in the actions is not a sham. However, any attempt to make her personally liable may well be met by a plea of undue influence or non est factum in relation to her signature on any power of attorney or other legal document.

Overview

This judgment is the fifth judgment in what has become known as the Thakrar Litigation which has so far involved three trials with at least one further trial (Footnote: ²) and an extended costs hearing still to come. This litigation is now, in 2007, in its eleventh year. It was started when Subhash Thakrar (“Subhash”), suing in the name of his then accountancy practice, S K Thakrar & Co (“SKT”), issued the writ in the lead action on 4 December 1996 in the Colchester District Registry claiming allegedly due and unpaid professional accountant’s fees and compound interest. Additional claims and Parties were added to or directed to be tried with this action as the lead action. This action led to trial no. 1 which culminated in judgment no. 1 that was handed down on 29 September 2004 and judgment no. 2 that was handed down on 20 December 2004. The subsequent litigation has been concerned with the procedural, enforcement and other related consequences of judgments nos. 1 and 2. This litigation has spawned a number of additional actions and applications which have been directed to be heard or tried together. In order to identify the scope of this subsequent litigation, a fresh claim form was issued which was directed to be the vehicle or umbrella encompassing all actions, disputes, claims and applications that had either led to judgment nos. 1 and 2 or which had subsequently arisen out of, or were connected with, the original action and the Family Actions. This composite and consolidating claim form, issued on 29 June 2006, describes all these various strands brought together into the current action of what is now referred to as “The Thakrar Litigation”. The present judgment, being no. 5 in the series of the Thakrar Litigation judgments, is the judgment following the first, fact-finding trial of the current set of actions and applications and was handed down after trial no. 2.

The Thakrar Litigation now consists of twenty separate Parties. Five of the Parties consist of two or more separate individuals so that, in total, trial no. 2 has involved 29 separate individuals or companies. These Parties are grouped broadly into two camps, those claiming relief of some kind, who became known collectively as “the claiming Parties”, and those resisting or defending any of these claims, who became known collectively as “the defending Parties”. Only one Party, Glen International Limited (“Glen”) has adopted a apparently neutral stance. That neutrality was changed into a stance wholly supporting the defending Parties for a period at a late stage in trial no. 2 but, on the purported appointment of administrators, Glen ceased to be an active participant.

The Thakrar Litigation is a hybrid action. The actions of, and the documents associated with, Subhash lie at the heart of all parts of the Thakrar Litigation. He was the principal Party at trial no. 1. He was addressed and referred to as Subhash throughout the Thakrar Litigation and trial no. 1. Many other Thakrar family members, and members and relatives of the Hughes-Narborough family are also Parties to the Thakrar Litigation and they are all similarly referred to by their first names to avoid undue repetition of the Thakrar and Hughes-Narborough family names. Another principal Party, Mr Harjivan, is not a Thakrar family member and he, as with other non-family members of either family, was referred to throughout the trial more conventionally by his title and surname. I will adopt the same convention for these various names in this fact-finding judgment no. 5.

There are two reasons for this topsy-like growth in the range of, and number of Parties involved in the Thakrar Litigation, the complex factual subject-matter of all the disputes is linked and the need to decide the disputes of fact in a way that avoids the need for any of the disputed facts having to be re-litigated. Overriding these two objectives has been the need to provide a dispute resolution forum that enables all the related disputes to be decided in the most proportionate and cost-effective manner given that the resources of most of the Parties are extremely limited.

Trial no. 2 of the Thakrar Litigation evolved into one that lasted for thirty-two days that were spread over thirteen months from 3 July 2006 until 24 September 2007. This prolonged and disjointed trial was brought about by a series of developments which led to the introduction of new issues, Parties and procedural applications. In order to provide a structure and a workable framework to the many disputes that must be decided, I directed that trial no. 2 should be confined to a fact-finding exercise with the aim of my deciding the material disputed facts in a way that will bind all Parties. Following the handing down of this fact-finding judgment no. 5, a further trial, which will be trial no. 4 and which will be concerned with the consequences of those facts, will follow. (Footnote: ³) This consequences trial will cover all claims, applications and disputes arising out of the Thakrar Litigation that the Parties have not been able to resolve following the handing down of this judgment no. 5 (Footnote: ⁴).

One of the causes of the prolongation of the trial was the need for an adjournment of trial no. 2 while there was tried by another judge, Judge Coulson QC, the issue as to whether, at a late stage in the trial, all Parties had compromised the entirety of the Thakrar Litigation in an out of court, informal final and binding settlement agreement. It was necessary for this issue to be tried by Judge Coulson as trial no. 3 because all Parties were concerned to ensure that I, as the trial judge of the Thakrar Litigation, did not become aware of the details of the negotiations leading up to the alleged settlement if it turned out that no binding settlement took place and judgment had to be given in relation to the Thakrar Litigation. Strictly, it was not necessary for the compromise issue to be tried by a different judge, even if the negotiations leading up to the alleged settlement were conducted on a without prejudice basis. However, I exercised my case management powers to direct a trial by a different judge so as to avoid any subsequent suggestion of prejudice or bias if I had to determine the entirety of the disputes between the Parties having learnt of the details of what had turned out to be an abortive settlement negotiation.

This compromise issue was tried by Judge Coulson QC in January 2007 and he handed down judgment on 20 February 2007 and a subsequent costs judgment on 22 March 2007. These were judgments nos. 3 and 4 in the Thakrar Litigation. Judge Coulson decided that the Thakrar Litigation had not been compromised. At the request of the Parties, I have only read Judge Coulson’s judgment no. 3 in a redacted form with the redactions having been agreed by the Parties.

Following Judge Coulson’s judgment, trial no. 2 was resumed but was again subject to a prolonged interruption by Glen, a vital Party to the overall litigation. Initially, Glen instructed leading counsel to pursue a full-blown recusal application for which other defending Parties indicated support. The application was based, so I was informed, on allegations of my actual and presumed bias and judicial incompetence in conducting the trial, the alleged unfairness to the defending Parties caused by the disproportionate inequality of arms between the claiming and defending Parties and irredeemable prejudice to them resulting from the trial having become unmanageable. As a result, so it was alleged at that stage, the trial had become an abuse of process. At a late stage before these recusal applications were due to be heard, Glen and most of the other defending Parties withdrew their applications. However, three of the defending Parties, Subhash, Mr Harjivan, and Party 16, SKTL (“SKTL”), informed the court that they were persisting in their abuse of process applications but accepted that they could be determined as part of the overall judgment on the basis of the written materials already served by all Parties.

One reason for Glen dropping its recusal application was that its directors purportedly resolved on 13 April 2007 to place Glen in administration and they claimed to have made an out of court appointment of administrators. This resulted in a second cause of the trial’s prolongation. This appointment initially had the temporary effect of the proceedings against Party 14 being stayed automatically. This, in turn, prompted to two applications by the claiming Parties, albeit these were mounted by Parties 1 and 4. The first application was for an order lifting the stay at least in relation to the remaining stages of trial no. 2 including the handing down of judgment and the settling of the order consequent upon that judgment. This application was not opposed by Glen’s administrators and I readily granted it. The second application was advanced by Parties 1 and 4 and was made under paragraph 81 of Schedule B1 to the Insolvency Act 1986. This application was to the effect that the administration was engineered by Subhash, who had no role or involvement in the affairs of Glen, and was in any event voted on and initiated by the directors of Glen with an improper motive so that the administration should be set aside with effect from 13 April 2007. The hearing of these applications and a further application by Parties 1 and 4 challenging the validity of the purported appointment of joint administrators prolonged the trial by four further hearing days with further written submissions and extended the overall length of the trial by seven further months.

Thakrar Litigation

Subhash is a central participant in all aspects of the Thakrar Litigation but he has not taken an active part in the trial. He is now bankrupt. His trustee in bankruptcy is, of course, a Party to the Thakrar Litigation but Subhash is a separate Party in his own right. He was summoned to give evidence but on entering the witness box and in the presence of counsel he had instructed to accompany him to court, he declined to answer any questions on the grounds that he might incriminate himself. He was otherwise unrepresented during the Thakrar Litigation although he took to bombarding the court and the Parties with unsolicited e-mails containing huge quantities of submissions, comments, prejudicial and sometimes scandalous allegations and assertions all of which protested his innocence of any wrongdoing whilst accusing the claiming Parties and, for those Parties who were represented, their representatives of all manner of dishonesty and bad faith. Thus, although Subhash and his actions have formed a major part of the investigation at the trial, he has played no significant part at the trial itself.

There are now seven different groups of proceedings being advanced in the Thakrar Litigation. These are, in summary:

The procedure that I decided should be adopted for this trial is one similar to that in use in proceedings involving children in the Family Courts. The procedure breaks the trial down into two parts and two separate trials. The first trial is a purely fact-finding trial which will make findings in relation to all material facts contended for by each Party. These findings will be made by way of a general declaration allied to a detailed schedule of factual findings that will be scheduled to the order giving effect to the judgment. The second trial, which will be trial no. 4, will be a trial to determine the consequences of the findings of fact identified in trial no. 2. These consequences will particularly involve a determination of what relief any Party is entitled to and which defences put forward by any Party are effective.

Judgment No. 1

I will not attempt to summarise my findings in, or the background to, my earlier judgment no. 1. This fact-finding judgment no. 5 should be read with judgment no. 1. It is, however, helpful, to state briefly the conclusions to which I came. Judgment no. 1 was essentially concerned with the joint venture that I held had been operated by Subhash and Neil between 1983 and 1987 for the purpose of developing and selling properties for their sole benefit which had been misappropriated from William’s Estate and SPC Property Company Ltd’s (“SPC”) property portfolio. SPC was a Hughes-Narborough family company which held a large South London residential property portfolio for investment purposes and both SPC and the portfolio were exclusively managed by Neil as an adjunct to his family solicitor’s practice. Subhash’s role was undertaken as an adjunct to his accountant’s practice, one of whose clients was Neil’s firm through whose clients’ account the proceeds of this development venture passed. The principal claim brought by SPC related to the remaining portfolio that was dishonestly acquired from SPC by Subhash in the name of a Thakrar Family member, Ramila. The trial was also concerned with claims that were made by several Thakrar Family members against Neil’s Estate. Neil died in 1995 and the Thakrar Family members pursued claims against his estate for alleged failures by Neil to account to them for the proceeds of sale of some of these misappropriated properties which had been conveyed into their respective names. Finally, the trial was concerned with whether Subhash had any surviving claims for outstanding accountancy fees and accumulated interest. These were pursued against SPC, Neil’s estate under alleged guarantees and two other alleged guarantors of this liability, Kenneth and Rosemary.

The effect of judgment no. 1 was that SPC succeeded in full in recovering its claims from Subhash, Subhash succeeded in recovering a small part of his fees claim against SPC but failed to recover anything from Neil’s estate, Kenneth or Rosemary and the other Thakrar family members, save for those brought in the names of Ramila and Vijaya, failed in their claims against Neil’s estate. Ramila and Vijaya’s claims had been struck out during the trial and a default judgment was entered against each of them. Essential to the judgment in favour of SPC were findings that Subhash had acted dishonestly and fraudulently in procuring the sale of SPC’s property portfolio into Ramila’s name. SPC’s claims against Neil’s estate and Glen were compromised before Part 1 of trial no. 1 in two separate compromise agreements entered into separately and at different times. SPC is now seeking to set aside the compromise agreement with Glen and Ramila it was a Party to on the grounds that it was procured by fraud or fraudulent misrepresentation.

Subsequent Claims and Proceedings

SPC obtained a monetary judgment against Subhash for principal and accumulated interest of a sum a little in excess of £4.1 million as well as its costs and Party 4, which included Neil’s estate, recovered their costs of successfully defending the Thakrar Family members’ claims from Subhash and the other Thakrar family members. Following that judgment, Subhash initially attempted to enter into an Individual Voluntary Arrangement and when it failed, then presented his own bankruptcy petition. Both steps appear to have been ploys undertaken in an attempt to avoid any significant payments being made to the judgment creditors. No-one has yet recovered anything from him or his estate and Party 4 has not recovered anything from the other Thakrar family members because the interim payment on account of costs ordered by me as part of judgment no. 2 is presently held in court under an order of the Court of Appeal.

The full range of claims and applications now made in the Thakrar Litigation have arisen out of attempts by Parties 2 and 4 to recover at least some of the sums due to them and out of Ramila and Vijaya’s applications to set aside the default judgments and consequent costs and other orders entered against them. They rely on similar grounds to those that Party 4 contends for in support of its applications to vary the original orders made in their favour at the original trial. Party 4 wishes to have it made clear that the Thakrar family members’ claims were always shams and an abuse of process and were brought by Subhash for his own purposes.

These applications are advanced by Party 4 following their discovery, as they allege, of significant new facts which they were not aware of, and could not reasonably have been expected to have been aware of, at the time of the original trial. Party 4 alleges that these new facts show that the Thakrar family members’ claims were advanced entirely in their names by Subhash and that he was using the family members’ actions purely for his own benefit. These applications have some additional significance because the Thakrar family members were granted permission to appeal significant parts of the judgment entered against them and that appeal has been directed by the Court of Appeal to be stood over to await this fact-finding judgment. Party 4 alleges that the appeal is misconceived and an abuse of process because the original claims brought by Thakrar family members were themselves abuses of process.

However, the major issue in the Thakrar Litigation relates to the question of who is the beneficial owner of the shares in Glen and Teso International Group Ltd (“Teso”). Most of the appropriated properties were transferred into Glen’s name in the 1990s. This company is a Liberian registered company allegedly managed by a Jersey-based management company that was set up in 1989, one year after Subhash had procured the transfer of all the remaining properties in SPC property portfolio into Ramila’s name. Subhash also procured the transfer into Glen’s name of various other properties that had previously been beneficially owned by SPC. Teso was subsequently set up, so the claiming Parties allege, by Subhash, so as to enable these dishonestly acquired properties to be hidden and “protected” from SPC and the Inland Revenue.

Glen’s shares were, unbeknown to Ramila and Vijaya, originally registered in their names but were subsequently transferred into Mr Harjivan’s name. The claiming Parties contend that these transactions were shams that were made for nil consideration and that Subhash was always, and remains, the sole beneficial owner of these shares. Mr Harjivan contends that he is the beneficial owner of these shares having acquired them at arm’s length from Ramila and Vijaya for approximately £12m. Thus, Glen faces claims from two directions. Subhash’s Trustee claims declarations that she, through Subhash, is the beneficial owner of Glen’s shares so as to enable her to realise Glen’s assets for the benefit of Glen’s creditors, including SPC, and, to claim a distribution of any net assets or their value for Subhash’s estate and his creditors, also including SPC. Meanwhile, SPC claims the return of, or restitution for, the properties it alleges were dishonestly put into Glen’s name by Subhash so as to warehouse them. This information is said to have surfaced during Subhash’s bankruptcy proceedings. These claims are, in part, enforcement proceedings and, in part, direct claims seeking tracing and restitutionary remedies.

SPC has been joined by the trustees of William’s estate who likewise seek tracing and other equitable remedies against Subhash, Glen and Teso because Neil and Subhash’s joint venture wrongly misappropriated properties subject to a will trust in favour of William’s beneficiaries and those properties and their value may now, it is alleged, be traced into the properties now registered in Glen’s name. In addition, Ramila claims, for herself and her family, an account and reimbursement or damages together with interest equivalent to the monies representing her family’s savings held in accounts under a power of attorney given to Subhash for that purpose and appropriated by Subhash. In judgment no. 1 I found that Ramila’s savings had been appropriated in November 1987 by Subhash, applied as part of the payment to the Inland Revenue on behalf of SPC, and treated or accounted for as the deposit paid for the SPC portfolio (Footnote: ⁵).

Finally, the purported administration is challenged on the basis that it is invalid or was allegedly voted for by Glen’s directors at Subhash’s instigation as a last-ditch attempt to stymie the claiming Parties’ attempts to recover or trace into, the properties dishonestly transferred into Glen’s name by Subhash. The claiming Parties seek to set aside the decision to place Glen into administration on the grounds that that decision was taken for ulterior, dishonest overriding reasons and it should therefore be set aside or cessated. Directions are also sought on all sides as to the administration and as to what should happen if the administration decision is declared to be invalid or cessated.

The Parties to the Thakrar Litigation

The Parties to the Thakrar Litigation fall into two groups, the claiming and the defending parties. The claiming parties consist of Subhash’s Trustee in bankruptcy, Neil’s Estate and Barbara Harris in her personal capacity, Neil’s father’s Estate and SPC and its two directors, respectively Neil’s brother Kenneth and Rosemary Campbell. It also includes Ramila Bhojani and her sister Vijaya Radia who are maternal cousins of Subhash and his siblings.

The defending parties consist of Subhash and his five siblings being Mukesh, Vijay, Kishan, Sheela and Naina and their mother Shantaben. The other parties are Glen and Teso which were set up to manage and protect the property portfolio that Subhash dishonestly acquired from SPC. A crucial player in action no. 2 is Mr Harjivan who claimed to have bought the shares in Glen and Teso from Vijaya. The Trustee claims the beneficial interest in those shares for Subhash’s Estate. There are also two Thakrar companies set up after Subhash’s bankruptcy and the demise of his sole practice, being SKTL which inherited his accountancy practice, and Simply Lettings and Management Ltd which took over SKT’s lettings and property management business. Finally, there were two professional parties. Firstly, there were the two Receivers appointed under charges held by Teso over Glen and Subhash’s properties and who were removed from office during the trial by order of the court and two administrators of Glen who were appointed on 13 April 2007 during a late stage of the trial.

Glen, Teso and Mr Harjivan Issues

The issues and the relevant disputed facts arising out of the role of Glen may be shortly stated but are, in reality, the most important of the issues and disputed facts that I must decide. The issues boil down to these:

The following evidence is available in order to decide these issues:

This evidence can be analysed under several headings. I propose to analyse the salient evidence under these headings:

I will, however, first provide a summary of the relevant history of events to enable this evidence to be considered in context.

Why Were Ramila and Vijaya’s names Used?

Background

Thakrar family. The relevant history is to be gathered principally from judgment no. 1, the contents of which were not challenged in any evidence adduced at the fact-finding trial. Subhash is, and has been since April 1985 when his father Kanji died, the head of an extended Indian Gujarati family with branches in England, East Africa and India. Subhash’s parents came to England from East Africa and his mother, Shantaben, is over 80 and lives with Subhash’s sister Sheela. Subhash is the eldest of seven siblings and five of these form the group of Thakrar family members who are Parties to the Thakrar Litigation.

Subhash’s maternal aunt, Jayaben, remained in Tanzania until her tragic death in 1982 when she was murdered. Her husband, Laljibhai, died in 1973. Jayaben and Laljibhai had eight children, cousins of the seven Thakrar siblings. Five of these siblings were daughters, including the two eldest siblings, Vijaya and Ramila, and three sons, Bhikhu, Nilesh and Shimeer and three further daughters. Ramila and Vijaya play a prominent role in the Thakrar Litigation. Ramila used to live in Tanzania but, between 1984 and 1986, she lived abroad in Portugal and India. In 1990, she met and married her husband, Babu who lived in England and since her wedding reception in January 1991 she has lived with her husband in England.

After living in Wellingborough and Sidcup, Ramila and Babu bought a house in Mottingham, London, SE9 in 1995, which is now the subject of a charging order imposed at the behest of Party 4 in an attempt to enforce the costs order against her which was imposed in her absence when the claim in her name against Neil’s estate was struck out. Ramila’s application to remove this charging order is included within the Thakrar Litigation.

Meanwhile, Vijaya has, for many years since marrying her husband Lalit Radia in 1976, lived in Kisumu, Kenya in modest circumstances. Kisumu is located in Western Kenya on Lake Victoria. Lalit worked for many years as a salesman for a small local company but this closed down in 1998 and since then he has kept a small grocery shop. Ramila speaks English to a limited extent and Vijaya speaks no English. Ramila and Vijaya have always been on the fringes of Subhash’s extended Thakrar family and his responsibility towards them does not appear to have extended beyond providing advice and comfort. He does not appear to have provided them with financial assistance save for paying for Vijaya’s journey to India when she accompanied her husband when he went there for medical treatment in 2001. However, he appears to have used their names, with the assistance of powers of attorney he obtained from them, in many of the material transactions with which I am concerned.

Subhash’s joint venture with Neil and William’s Estate properties. Judgment no. 1 found that a joint venture would be established which would develop properties using funds provided equally by both men and the net proceeds of sale would be regarded as being owned by them jointly and shared equally. The properties would be registered in the names of those nominated by Subhash but no distribution of the proceeds of sale of that property to whoever’s name it was registered in would take place. The individuals into whose name the freehold was passed were to be no more than nominees who took no part in the management of the properties and who would not receive any part of the consideration earned from selling long leases of flats within the properties. That consideration would be paid into the running account held by Neil on behalf of both participants in the joint venture and the net profits split 50/50 between the two.

What Subhash did with the money received in this way was something for him to sort out with his siblings and other family members contributing to the pot. Given how the two men worked this joint venture, it would seem that, in Subhash’s mind, the monies he received from Neil would be paid into the general pot or used for subsequent purchases by the joint venture. Those monies were certainly not intended to be paid to the individual in whose name a particular property was registered. Registration was a “flag of convenience” and different names were used so as to spread the incidence of capital gains and other taxes. The attraction of a family member domiciled and resident outside the jurisdiction was that the proceeds of sale of properties registered in such family members’ names would not attract any tax on a disposal and other tax advantages accruing to the income earned from the property by what would appear to be a non-resident overseas domiciled property owner (Footnote: ⁶).

From the start, Subhash was aware that those properties that were provided to the joint venture by Neil from, initially, William’s estate and, from about March 1986, from SPC, were not his to provide. Thus, Subhash knew that the thirteen flats in two adjacent streets that remained in William’s estate formed part of that estate, that Neil was the sole effective executor and that he was not entitled to be a Party to the transfer away from the estate of these properties for no consideration. The justification, in Subhash’s mind, for participating in what was a deliberate and unjustified breach of trust and in agreeing to share the proceeds of sale with Neil personally was:

“[The properties in question], emanating from William’s estate, were part of a larger holding which had already been partially disposed of. They consisted of 13 separate flats in two adjacent streets and were in appalling condition. Most were empty and the rest had sitting tenants in occupation. They were all subject to, or would be subject to, Housing Act Notices. They were virtually unsaleable and Neil and William’s estate, which Subhash was aware of, could not afford to renovate them into a saleable condition.” (Footnote: ⁷)

These properties were refurbished using funds provided 50/50 by Neil and Subhash. These funds were paid into, and then out of, the joint venture account. At least £70,000 was paid in this way, albeit that the work was poorly managed and was carried out in consequence in a grossly uneconomic and unplanned manner. Following refurbishment, these properties were then “sold” to family members in the sense that they were transferred into the names of family members and then, in some cases, long leases were sold on to third Parties and the proceeds of sale credited to Neil and Subhash’s joint venture. According to Subhash’s evidence that he gave during trial no.1, each “sale” was notionally for a small sum, £5,000 per unit, but no money passed from the family members to the Estate or to Neil and Subhash. Even on Subhash’s version of the arrangement, this consideration was to be deferred and paid by way of deduction from subsequently acquired proceeds of sale. By June 1986, 8 of these properties had been sold yielding gross proceeds of sale of £251,555 the entirety of which went into the joint venture account.

There was some delay before these properties were transferred into the names of individuals in the Thakrar extended family. There was no formal conveyancing undertaken, many of the documents are no longer available and the registration process was undertaken in a somewhat haphazard way by Neil. Thus, it is not possible to give precise dates when any particular property in the early years was formally transferred into and registered in the name of a Subhash nominee.

The approximate date of these early transfers and registrations were as follows: 27 Gurdon Road, into Naina’s name in March 1984; 33 Gurdon Road into Sheela’s name in September 1984; 35 Gurdon Road into Mukesh’s name in December 1984; 39 Gurdon Road, first into Kanji’s name in November 1984 and subsequently into Shantaben’s name; and 29 Gurdon Road into Vijay and Kishan’s joint names in January 1985. Two properties were transferred into Vijaya’s name. 4 Fairthorne Road on 15 November 1984 and, much later, 31 Gurdon Road on 1 June 1993.

The five Thakrar family members who gave evidence all gave remarkably similar evidence. I will summarise this evidence.

Mukesh. In his evidence, Mukesh stated that in about 1983, when he was in his 20s, his father and Subhash informed him that the family would be purchasing a number of properties from Neil and that he would be purchasing one of them. Mukesh had no say in which property would be purchased by him. The purchase price would be paid for out of the proceeds of sale and the rental income. Subhash would be arranging for the builders to renovate the property. He had no choice in the matter. Mukesh had no role in any of the renovation work and, so far as he understood the arrangements, these were paid for out of family funds under the control of his father and Subhash. As with other family members, Mukesh had contributed to this pot out of his earnings. Subhash then arranged for the flat to be put on the market. Mukesh stated that he raised with Subhash over the following years the fact that he had not received the net proceeds of sale of the two flats which the house was converted into and he said that he would take it up with Neil. He never received any proceeds of sale. Subhash started proceedings in his name in September 1998 to recover the proceeds of sale from Neil’s estate.

Vijay. In his evidence he gave a very similar account of how he and his brother Kishan purchased jointly a property for £10,000 in 1983. Subhash made all the arrangements, gave them no option about the purchase, decided which property would be registered in their names and stated that the proceeds of sale would be used to fund the purchase. He left Subhash to sort everything out. He likewise asked Neil about the proceeds of sale intermittently over the years and always received the answer: “don’t worry, I will sort it out”. The claim against Neil’s estate was started at the same time as the claim made by Mukesh, albeit in separate proceedings and apart from providing information about the figures, Vijay had little involvement in those proceedings.

Naina. Her evidence was very similar to that of Mukesh and Vijay. She did contribute to the family pot from her earnings and she also provided some details for the proceedings at the request and with the assistance of Subhash.

Sheela. Again, her evidence was very similar to that of Mukesh, Vijay and Naina. She also contributed to the family pot from her earnings. It was pointed out to her that some years after the property had been purchased in her name, Subhash pledged it with other properties as security for a loan that a bank was providing to SPC. Her view was that it was acceptable to her for Subhash to use the property to secure a loan for appropriate purposes for the immediate family but not otherwise. She had no view as to whether this particular use of the property was for appropriate family purposes and ended by stating that she left him to use her property’s name whenever he needed to use it. Subhash did everything in connection with the starting of proceedings to recover the proceeds of sale some years later.

Kishan. His evidence mirrored Vijay’s evidence and he could not explain how any of the figures in the claim started in his and Vijay’s joint names came to be prepared.

Shantaben. She gave a witness statement but was too frail to come to court and give oral evidence. She stated in her statement that she had no knowledge as to how her deceased husband had come to purchase the property in his name and no-one had ever accounted to her for the proceeds of sale.

Ramila and Vijaya

Properties in Ramila’s name. The first property to be transferred into Ramila’s name was 23 Gurdon Road on 6 June 1986. This was not a property taken from William’s estate but was the first property taken from SPC. Eleven other properties followed after this into Ramila’s name between June 1986 and March 1988. These properties were also taken from SPC.

Bhikhu, one of Ramila’s brothers, had three properties registered in his name in this period. Bhikhu tragically died in a swimming accident in 1986 (Footnote: ⁸). A mysterious name, Jagani, had five registered in his name. Subhash on an earlier occasion gave evidence that Jagani was a business contact of his brother-in-law who was known to Ramila in East Africa. According to this evidence, Jagani had orally transferred or assigned his interests in these properties in East Africa in 1987 to Ramila and was paid by Ramila for them in the country of transfer. Ramila stated categorically in evidence that she had never heard of Jagani and had never received any properties from, nor paid anything to, anyone of that name (Footnote: ⁹). These five properties, or at least some of them, appear ultimately to have been registered in Glen’s name and those that were so registered were probably registered in Ramila’s name at some stage after 1986 given Subhash’s evidence about the assignment (Footnote: ¹⁰).

Ramila’s evidence. Ramila gave evidence at length and on several different days during the fact finding trial. Her history and the limited direct contact she had had with Subhash before 1985 are highly material. She was born in 1949 in Tabora, Tanzania and her mother tongue is Gujarati. She speaks English, albeit not fluently, and was able to give her evidence with the aid of an interpreter. Ramila is Hindu. Ramila is the second oldest of the eight children, Vijaya is the eldest, and Shimeer is the youngest having been born in 1969. He speaks fluent English and has settled in England. He has acted as Ramila’s McKenzie friend whilst she gave evidence, sitting near her but not prompting or discussing her evidence with her whilst she was giving it. He also was allowed to make brief written submissions on her behalf.

Ramila’s father died in 1973 when she was 24. She did not know, and had not met, her maternal cousins, being Subhash and his siblings, nor her maternal aunt, being Shantaben, whilst she was a child and the two families, living in Tabora, Tanzania and England respectively, communicated by post. Ramila’s family appear to have been, in financial terms, modestly self-sufficient. During the 1970s and up to 1983 and her mother’s tragic death, Ramila worked in the family business run by her mother. This was a small shop, later two small shops, selling garments and shoes. In the 10-year period between the death of her father and mother, the family started to build up a small trust fund in England to provide for those siblings, particularly Nilesh, who was living in England. Nilesh moved to England in 1973 and he encountered financial difficulties which these funds were intended to alleviate. This trust fund, which does not appear to have been formally created, was arranged by Jayaben with Shantaben and Kanji and was intended to provide a fund to be used to provide financial support for those of Jayaben’s children and grandchildren who were based in England. It is likely that, prior to Kanji’s death in 1985, the fund was administered by Kanji but Subhash had some involvement in this fund, certainly from about 1979 as is evident from the eloquent family letters written by Ramila and Vijaya to Subhash in 1979 which were put in evidence by Mukesh.

The relatively distant, formal but respectful relationship Ramila had with Subhash at that time, being a time before she had ever met her cousin and his wife and two children, can be seen from the contents of these letters. They all start: “Dear brother Subhash, Kiranbhabhi (sister-in-law), Rishi and Rupa”. Addressing her cousin and his wife as brother and sister-in-law was a mark of respect. All the letters provided family news of life in Tanzania and all contained long passages expressing anxiety and worry about Nilesh’s life in England coupled with information about the money that Ramila and her family were arranging to be transferred to Nilesh in small tranches from Tanzania to help him through his crisis. It is likely that the letter-writing stopped once Nilesh had sorted his life out. These letters show that the two families were friendly but not close and are largely concerned with pleas to Subhash to provide comfort and advice to Nilesh in what were clearly difficult personal times for him. There was no evidence that Subhash or his immediate family provided any financial support to Nilesh although they were clearly in regular contact with him.

The fund was created using an apparently legal method of circumventing the strict currency legislation in Tanzania which precluded hard currency being exported. Kanji would find from within the Gujarati community in England someone who wanted to provide payment in Tanzania of a sum similar in size to the sum Jayaben wanted to transfer to England. Jayaben would then arrange to pay that sum to the intended recipient in Tanzania whereupon, Kanji would collect the agreed Stirling equivalent in England and pay that into the account or trust fund being established for the Jayaben children. Ramila believed that about £3,000 to £4,000 per annum in this period was paid into the trust fund in this way. Given the relatively modest circumstances of the widowed Jayaben and those of her children still living with her in Tanzania, it is inconceivable that any larger transfers were made. Ramila was able to produce contemporary evidence of these payments contained in some of the letters written to England in this period by herself, Bhikhu and Vijaya to Subhash. These have otherwise unintelligible references to short and long-sleeved shirts contained within them. Ramila explained that this was family coded language for notification by the Tanzanian family of large or small transfers of funds into the Jayaben children’s trust fund.

Ramila made two brief visits to England in 1981 and 1984. During the first, she met Subhash for the first time. The second visit was in 1984 when she again briefly met Subhash. These visits were, no doubt, primarily to attend family gatherings and to see Nilesh. Following Jayaben’s death in 1983, the siblings still involved in running the shops found that it was not economic to continue with them and they closed them down in 1984. Ramila moved to India for a time and, whilst there she briefly met Subhash who was attending a religious festival also attended by other members of his and Ramila’s immediate family. During their brief renewed acquaintance, he asked her to sign a general power of attorney in his favour which she did on 26 December 1985 before an executive magistrate in Jamnagar. Subhash explained that he needed this to assist him in looking after the Jayaben family money that he had received and Ramila, who had little knowledge of the size of the fund or as to how it was being administered, accepted this explanation and signed the document. Subhash’s explanation would have had some credence since Kanji had died earlier in 1985 leaving him as head of the family and, by succession, trustee and administrator of the late Jayaben’s fund and, following Jayaben’s death in 1983, the ownership of this fund would have passed to all of Jayaben’s children. During their time together in India, Subhash made no mention to Ramila of any other property or funds held by him or of any intention to place any property into her name.

Ramila moved to Portugal and lived there for a few months in 1986. She moved there in order to stay with her brother Bhikhu but a second tragedy hit her and her family when Bhikhu died in a swimming accident on 16 June 1986. Ramila met Subhash again in Portugal when he and Nilesh came from England for the funeral. Ramila does not recall meeting Mr Harjivan during that period but does recall that Subhash went to meet someone of that name. She stated in evidence that she had never met him.

Ramila then returned to Tanzania in 1987 and lived with her sister Varshanti and her husband helping in the house and in their shop. She married her husband Babu in Tanzania on 13 July 1990. Babu was a British citizen who was resident in England and Ramila moved to England with him in October 1990. Ramila first met many of the Thakrar family at her wedding reception held in England in January 1991 which was, of course, attended by Subhash. Ramila first lived in Wellingborough and worked in a chocolate factory earning about £3 per hour. Between April 1991 and May 1995 she and Babu lived on a temporary basis in Sidcup, Kent and, from May 1995 until the present they have lived in Mottingham, South East London in a house they bought for £54,995 which they bought with a mortgage of some £38,000 or less advanced by the Abbey National. In that period since 1990, Ramila has had infrequent meetings with Subhash and some of his siblings. She has more frequently, until the meetings were stopped by Subhash, had meetings with her aunt Shantaben who she is both close to and very fond of.

Vijaya’s evidence. Vijaya has lived in Kisumu since her marriage in 1976. She has always live in modest circumstances and, indeed, she and her husband have struggled over the years since then to make ends meet. Vijaya has only travelled outside Kenya on four occasions in her life. The first such trip was many years ago to Uganda. Some years later she made two visits to England, in 1988 and 2001, and one to India in 2002 when her husband went there for heart surgery. During the first visit to Uganda, she met Subhash who was then unmarried and about to go to England for his professional studies. Vijaya’s second visit outside Kenya in 1988, was to England for a 6-week holiday with her son, then aged 18 months, and her daughter, then aged 5. They stayed with Vijaya’s brother Nilesh and he paid for their travel. During that visit, she met Subhash and Kiran when they invited her to dinner at their home and the following day, at Subhash’s request, she attended his offices where he asked her to sign a general power of attorney in his name. Vijaya was perplexed by this unexpected request and asked why he wanted this. Subhash replied that he wanted it as a favour to him. Vijaya spoke with Nilesh by telephone and he said that it was alright to sign. Vijaya agreed, partly because she was very conscious of her relative financial weakness and because she regarded Subhash as the elder in the family. The document was signed in front of Mrs Barbara Harris in her office which is located close to Subhash’s office and Subhash escorted her round there.

Vijaya had no further contact with Subhash until May 1994 when she received in the post an unsigned power of attorney form with her name typed in at the top and Subhash’s name typed in as the person to whom she was granting the power of attorney. Subhash asked her, probably in a covering letter, to sign this document in front of a witness without giving her any explanation as to what the document was or why he was asking her to sign it. Vijaya took this document to a local lawyer who tried to explain to her what it was without much success. However, on learning that Subhash was both her maternal cousin and head of the family, the lawyer advised her to sign the document which she did. The lawyer witnessed her signature and she posted the signed document back to Subhash.

Prelude to Transfer of Portfolio into Ramila’s Name

Prelude to SPC portfolio transfer into Ramila’s name. The earliest use apparently made by Subhash of the power of attorney granted to him by Ramila that is evidenced in the documentation that is currently available was in August 1986. On 21 August 1986, Subhash sent Neil the original power of attorney that Ramila had executed in India on 26 December 1985 with a copy of the contract for 34 Burchell Road, London, in which she purportedly granted a long lease to a third Party. This property was the second to be transferred to Ramila, in May 1986, but that transfer, like many of the others, is now only evidenced informally in the notes and informal written exchanges between Subhash and Neil. This was, therefore, the first occasion that can now be traced on which Subhash purportedly acted on Ramila’s behalf in a formal transaction in her name and as her agent.

According to Ramila when giving evidence, she was never spoken to or asked about any property transaction by Subhash, whether before or after this transaction. When Subhash needed formally to execute a document in her name, he held himself out as Ramila’s attorney but the only power he held then was the one which he had sought and obtained from Ramila on the basis that he needed it to administer the Jayaben trust fund which Ramila and her mother had established and funded.

At trial no. 1, and as recorded in judgment no. 1, the refurbishment of all these properties was funded on a 50/50 basis by Subhash and Neil and the proceeds of sale were shared or accounted for on a 50/50 basis, albeit that the system of accounting was confined to entries in the relevant ledger cards in Neil’s office. Subhash stated that Ramila provided funds for some of these developments but I found in judgment no. 1, and I confirm now having heard Ramila’s evidence, that she provided no funds of any kind for any property purchase, development or refurbishment and she knew of no such action because she was never informed at any time that her name was being lent to a series of South London property dealings. I am able to confirm my finding of fact in judgment no. 1 that Subhash had no communication with Ramila about any of these properties and that all the relevant transactions were those of Subhash save for the name on the transfer.

There is no direct evidence available to explain why Subhash decided to use Ramila’s name as the transferee of the SPC properties transferred to his appointed recipient by the joint venture. It is not known whether it is significant that the first such transfer related to the first of the SPC properties to be appropriated by the Neil/Subhash joint venture but it seems likely that that does have significance. The properties developed previously had come from William’s estate and were each transferred into a different Thakrar family name: namely into Naina, Sheela, Mukesh, Kanji/ Shantaben, Vijay and Kishan’s names. One was transferred into Vijaya’s name, possibly because of Subhash’s involvement in the Jayaben trust and the fact that, her brother, Nilesh was living in England and was known personally to him. Once his immediate family had each had one property notionally allocated to them, which coincided with the drying up of the William’s estate properties, Subhash seems to have turned his mind to tax saving and asset preservation. His likely thinking was that he needed, for tax-saving and other purposes, an off-shore resident as his nominee owner of the SPC properties developed by the joint venture. This decision was probably taken in late 1985. Ramila’s name was then chosen. In late 1985, Subhash would have known that he was about to meet Ramila in India. He had a ready excuse to persuade her to give him the power of attorney he needed to deal in her name, namely his involvement in the Jayaben trust fund. Moreover, he probably considered that she would never discover that her name had been used in this unorthodox way. Thus, Subhash appears to have decided to use her name and to have obtained her power of attorney in the forthcoming SPC development properties. That would explain why this power was executed in India on an English attorney form. He must have had typed up a blank power of attorney form before he left for India which he took to India with him for Ramila to sign.

Subhash’s evidence at trial no. 1 about Ramila’s involvement in property purchases. Subhash stated in evidence that the reason properties were first transferred into Ramila’s name with the transfer of 23 Gurdon Road was because Ramila and her family were keen to increase their investments in the UK (Footnote: ¹¹). During his evidence, Subhash distinguished between transfer and designation of properties and in fact considered that properties had been designated for Ramila (Footnote: ¹²). He spoke of Ramila expressing an interest in purchasing 34 Burchell Road. He was aware of this interest because he talked to her and Bhikhu at the time. Ramila’s whole family were sending funds from Tanzania to Subhash’s father and to Subhash with a view to investing them. These funds were put into various building society and bank accounts or lent to various Parties through Neil’s firm. These sums were retained in this country. He consulted with Ramila and her family about these investments. However, Subhash felt free to deal with Ramila’s family money indiscriminately (Footnote: ¹³).

Subhash stated that he acted on the basis of the general power of attorney that Ramila had given him. This meant that he didn’t have to speak with her about the dealings he was making in her name except generally in discussions with her. Ramila did write to him in Gujarati letters containing family matters but he didn’t keep these letters. However, he kept no records of his dealings with Ramila’s money or of the properties he acquired on her behalf (Footnote: ¹⁴). Subhash submitted tax returns for her but no copies were any longer available. However, no capital gain was declared on Ramila’s properties because she was resident overseas (Footnote: ¹⁵).

Jagani

Subhash also explained how five properties allocated to Jagani came to be acquired by Ramila. According to Subhash (Footnote: ¹⁶), Jagani purchased five properties from Neil. These properties were 20 & 26 Ruthin Road, 40 Springfield Road, 22 Waldegrave Road and 38 Rosenthal Road. Subhash stated that these properties were sold towards the end of 1986 to Ramila’s and Vijaya’s family in a sale undertaken in East Africa. Ramila’s and Vijaya’s family, using Ramila’s assets, allegedly paid Jagani in East Africa for his interest in these properties. In his evidence at the first trial Subhash had sought to portray Ramila as coming from a wealthy family residing in Tanzania with business interests in the United Kingdom which she sold off in 2000 (Footnote: ¹⁷).

The only evidence that Jagani existed as a separate individual came from Subhash. No other witness appeared to know him. According to Subhash, he was a business associate of Subhash’s brother-in-law and known to Subhash and he knew Ramila’s family in East Africa. He bought these properties as an investment. He fell out with Neil and, as a result, he sold, or as Subhash put it, assigned his five properties to Ramila by means of an oral assignment to her in about 1987. He was paid by Ramila’s family in East Africa (Footnote: ¹⁸). Ramila told him of this assignment but never produced any written evidence of it.

Jagani, according to Subhash, did produce written evidence of the assignment, provided in a written authority addressed to Neil in the form of a short letter which merely confirmed his verbal instructions to Neil to deal with the properties in his name in any manner as directed by Subhash. Subhash produced a photocopy of an unsigned copy of this letter but there was no means of knowing whether this photocopy of an unsigned copy of what purports to be a letter that Subhash produced at trial no. 1 was genuine or, like so many copies of documents that were found on Subhash’s hard drive in 2005, had been replicated by Subhash to make it appear that it had come from someone else, in this case from Jagani. There was no other evidence that corroborated Subhash’s evidence that this was a copy of a genuine letter written by his brother-in-law’s business partner to Neil. All that is known is that these properties ended up registered, some in either Ramila or Vijaya’s names and, more recently, they were registered into Glen’s name.

At trial no. 1, the court did not hear from Ramila who was said by Subhash still to be resident in Tanzania. In fact, she was living in Mottingham, London, SE9. All these transactions were raised with her in her evidence at this trial. Had her presence in England been known about by Groups 2 and 4, the adverse findings about Subhash made at that trial would have been even more devastating to him. It is perfectly clear now, having heard both Ramila and Vijaya’s evidence, that Subhash never discussed anything about any of these properties with either sister, never received any money from either to help pay for or fund the acquisition and refurbishment of any of these properties, never accounted to them and never transferred into their possession nor held to their order any proceeds of sale. Neither Ramila nor Vijaya had ever heard about these properties until a solicitor took their respective proofs of evidence prior to the fact-finding trial (Footnote: ¹⁹).

Thus, Ramila in one concise moment, demonstrated her outrage at Subhash’s fabrication:

“If I was wealthy, then – these people in large cars and large houses, [the Thakrar family], roam around in Rolls Royce and Mercedes and in large houses with large cars. If I were wealthy I would have been like them, living in larger houses and larger cars. I have a terraced house and the car which I have is not like that of a wealthy person.” (Footnote: ²⁰)

I accept Ramila and Vijaya’s evidence. It was clear that neither of them had the means to purchase these properties in the first place, given that their combined value at the time when Jagani allegedly sold them to their family (it was not clear to whom these sales were allegedly made) was approximately £500,000. Moreover, given their modest financial circumstances, it is equally clear that Ramila and Vijaya, either collectively or individually, did not receive by way of payment a sum of that size from the proceeds of any subsequent sale of these properties.

I also find that the purported copy of an unsigned letter adduced into evidence by Subhash at trial no. 1 to support his own evidence that Jagani both existed and assigned the Jagani properties to Ramila and Vijaya’s family for consideration is a fake concocted by Subhash at some time long after the purported assignment. His clearly demonstrated lies about the Jagani saga support my finding that Ramila and Vijaya’s evidence is to be accepted.

Jagani properties – conclusion. There is therefore, no evidence, other than Subhash’s discredited evidence given at the first trial, that Jagani ever existed or that properties registered in his name were ever sold by him to Ramila and Vijaya or that money passed from their families to this third Party or that the properties were subsequently sold by them and proceeds of sale received by them. Subhash’s lies about this matter support the conclusion that the Jagani episode never took place. Instead, Subhash used Jagani’s name, or merely used that name, as a vehicle for the hiding of his real ownership of properties that had been dishonestly acquired by Neil and himself from SPC or William’s Estate. There is, therefore, no difference between the Jagani properties and those registered in Ramila’s name.

Subhash’s use of the Jagani properties, firstly in registering them in that name whilst retaining control and beneficial ownership of them and secondly by using the proceeds of sale of at least some of these properties for his own purposes provides a good illustration of how Subhash used the Ramila properties throughout the history of this saga as though beneficially owned by himself. This was the case, irrespective of whose name these properties were registered in, charged to or, in the case shares in Glen, who was the registered proprietor.

This is, therefore, a good example of the many instances in which Subhash can be seen to have acted on the basis that he regarded himself as beneficially owning the properties that he had arranged to be placed into the names of others.

Subhash’s use of the proceeds of sale of properties held in the name of Ramila or Jagani. Subhash treated the properties that had been transferred into the names of others on his instructions as if he owned them. Thus, he used the proceeds of sale of the properties held in the name of Ramila and Jagani for his own purposes. In his evidence at the first trial, Subhash alleged that the sum of £135,000 required to fund the balance of the purchase price for Unit 8 Waterside Court in March 1989 came from the joint funds which he thought Neil was holding for our benefit from their previous ventures (Footnote: ²¹). In fact, the purchase price came from the proceeds of sale of 3 Mansfield Road (£75,000 in November 1988), 46 Fairthorne Road (£30,000 in December 1988) and 22 Waldegrave Road (£59,000 in February 1989). All three properties were originally owned by SPC and, at the dates of their respective sales, the first two were held in the name of Ramila and the third in the name of Jagani. Subhash could not have legitimately used these proceeds of sale in this way had these three properties been beneficially owned by Ramila or Jagani.

Powers of Attorney

Ramila and Vijaya’s powers of attorney. Subhash used the powers of attorney he had obtained from his two cousins for purposes outside the limited authority that he had been given (Footnote: ²²). He had obtained these powers of attorney from each of them having misrepresented to each that they were needed for limited purposes connected with the Jayaben family trust set up with limited funds to help pay living and educational expenses for Ramila’s family in England. As between Subhash and each cousin, he only had authority to use these powers of attorney for those limited purposes. Instead, he used them to involve their names in property transactions for the sole purpose that, because they were resident overseas, if the properties were registered in their names, he could avoid paying tax on the earnings and capital gains otherwise payable on these properties.

However, Subhash always intended to keep control of these properties, never intended to account to Ramila and Vijaya for them and always intended to retain the beneficial ownership of these properties and their proceeds of sale. The properties had been dishonestly obtained by Subhash. He knew that they had been taken from SPC by Neil without SPC’s authority and without reimbursement and that they had then been used by the joint venture as if Neil and he owned them. The joint venture, that is Neil and Subhash, agreed that these properties would be transferred by Neil, in his solicitor’s role, into Ramila or Vijaya’s names and that the two men would share the net proceeds of sale arising from any subsequent sale or grant of long leases. Subhash would, in effect, “warehouse” these properties in an off shore resident’s name and, for that purpose, he had dishonestly obtained general powers of attorney from both sisters, Ramila in December 1985 and Vijaya in September 1988.

Equally, the properties initially transferred to Jagani were never intended to be sold to a third Party and Jagani, if he existed, was merely a name borrowed by Subhash who apparently was resident overseas. The “assignment” of these properties by Jagani to Ramila in Tanzania never took place, Ramila has never heard of anyone called Jagani. This was an invention of Subhash in order to explain why the documents showed that properties had been allocated to a Jagani which ended up in Ramila and Vijaya’s names. It is significant that, according to Subhash, the rift leading to the assignment to Ramila and the instructions given by Jagani to Neil to deal with the properties as Subhash instructed appear to have occurred in about March 1986, some two to three months after Subhash returned from India with Ramila’s power of attorney (Footnote: ²³). This coincidence suggests that Subhash was seeking to “regularise” the transfer of properties by ensuring that they were transferred into the name of an existing off-shore resident rather than into the name of a fictitious off shore resident or one whose power of attorney he did not hold (Footnote: ²⁴). At all events, Ramila was never consulted by Subhash about these properties, has never known anyone called Jagani and never took an assignment of properties from, nor paid anything for, properties in South London from anyone whilst living in Tanzania in the 1980s.

Transfer of properties into Ramila’s and Vijaya’s names

I have already decided in judgment no. 1 that was given following trial no. 1 that the transfer of properties into the names of family members other than Ramila and Vijaya were as nominees and that the proceeds of sale and any rents and profits earned from the properties following transfer were beneficially owned by Subhash and Neil. These findings are applicable to Ramila and Vijaya’s properties but the findings in relation to both the William’s estate’s properties transferred into family members’ names and SPC properties transferred into Ramila’s name. The evidence of all family members is only consistent with their being nominees in relation to the property registered in their name. In Ramila’s case, she had no knowledge at all of the use of her name and the conclusion as to her is even stronger that she was a nominee owner. Clearly, Subhash did not intend any of the registered proprietors to recover any proceeds of sale or rent from their properties and the only basis for his having arranged for the various family actions to be started can have been that he wanted to recover for himself, in his family members’ names, the proceeds of sale from Neil’s estate.

These findings are now re-affirmed by a weight of further evidence that was neither available nor adduced at trial no. 1. The principal sources of such evidence are the written and oral evidence of Ramila and Vijaya. The totality of their evidence I accept since they were both palpably honest witnesses, their evidence was mutually corroborative and was consistent with all the other non-partisan evidence and it was also inherently true. It is worth setting out a few passages from the evidence of both Ramila and Vijaya so as to obtain something of the flavour of their vehement and angry denials of Subhash’s repeated suggestions in contemporary documents that everything done in their names was done for them as beneficial owners of the property or shares in question and for their benefit.

Ramila stated that she had never received a copy of the agreement to transfer the ex-SPC properties to Glen, and in fact had never seen it prior to being shown a copy in the witness box. Her evidence was trenchant:

“There is no question about me remembering because I was not involved in this and I do not know about this and this topic never came up. Because Subhash has signed here as my attorney, you can now see very clearly that he has misused my power of attorney. (Footnote: ²⁵)”

Ramila also stated that she did not receive any part of the stated purchase price of £1 million:

“I have not received a single penny but they should prove to the Judge - the honourable Judge that whether, if they have paid, then which account it has come from, which account it has gone to, they must prove that. (Footnote: ²⁶)”

She also stated that she did not receive any money from her sister Vijaya for any shares in Glen. Again her evidence was trenchant:

“A. There is no question about it because you have seen in the video link whether my sister

Vijaya has any money or not; millions of pounds! And it was very clear.

Q. You did not receive half a million pounds from Vijaya for the shares in Glen?

Vijaya stated that she had no recollection of (a) being issued with any shares in Glen (b) acquiring any shares in Glen (c) paying any monies for shares in Glen or (d) paying to Ramila just under £½ million on or about 30 March 1990 and a further sum of similar amount in November 1990 (or any sums of such amounts at any time) (Footnote: ²⁸).

It was also corroborated by the plain untruths that Subhash repeatedly stated in giving oral evidence at trial no. 1. In particular, he held Ramila out to be a wealthy woman who had provided him with a general power of attorney to invest substantial sums, being part of that wealth which she had remitted to him, in property in England. Ramila still lived in Tanzania in 2003 in the period he was giving evidence, according to his evidence, and she was aware of the nature and extent of the investments that had been obtained on her behalf. These investments had been put into an off shore company, Glen, for tax purposes and that company had subsequently been sold to a third Party unknown to Subhash for a very substantial sum which had been paid to Ramila.

None of that evidence is true, as is clear from the summary of my findings already set out. The question arises as to why Subhash went out of his way to lie so comprehensively about Ramila, and also about Vijaya, where his lies are similarly untrue. It cannot be said that Subhash might have been mistaken about Ramila’s wealth and where she was living. He had a detailed knowledge of her family circumstances from his mother Shantaben, from Nilesh, from the letters from and the brief contacts with Ramila, from his dealings with the Jayaben trust and from his role as head of the extended Thakrar family. It follows that his evidence was deliberately dishonest and that he must have invented it for a purpose. The obvious purpose was that he invented these lies as a means of covering up that he had placed the properties that he had acquired dishonestly in Ramila and Vijaya’s names as nominees so as to cover up his dishonesty and so as to obtain significant tax relief that would not be available had the properties been placed in his name. These transactions could only have appeared to be bona fide if Ramila was wealthy, had provided him with a power of attorney to act as her investment manager of that considerable wealth, had bought the properties with her own resources, had been accounted to for them by Subhash and was still living abroad.

Subhash had propagated the lies about his cousins for some years before the original trial so as to preserve the fiction that he had no interest in the properties or in Glen that was set up as a vehicle to hold them. Thus, Subhash had no option but to maintain this fiction at the first trial if he was to have any prospect of defending SPC’s claims. This could only be done if he also maintained the lies about his cousins. Thus, Subhash appears to have taken a gamble, which succeeded during the first trial, that it would not be discovered by Parties 2 and 4 that Ramila was in fact living in England. This was a considerable gamble since, if anyone spoke to Ramila, Subhash’s lies about the properties and his cousins would have been discovered. Had this occurred, Subhash’s case and the cases of his siblings at the original trial would have been destroyed.

Decision to transfer the SPC portfolio into Ramila’s name

Factual background

The joint venture continued satisfactorily, from Subhash’s point of view, from 1983 until late 1987 with twelve properties being transferred into Ramila’s name. At that point, SPC’s crisis broke. This arose from the Inland Revenue’s winding up petition due to repeated and wilful failures by Neil to submit tax returns. This crisis created the opportunity for Subhash dishonestly to acquire from SPC, with Neil’s agreement, SPC’s remaining property portfolio at an excessive undervalue, little of which was actually received by SPC and none of which was paid for or provided by Ramila herself as opposed to by Subhash using funds distributed to him from the joint venture account that he had then arranged to have been put in her name. The series of acts of dishonesty culminating in the transfer of that portfolio into Ramila’s name is the subject of a series of findings in judgment no. 1 (Footnote: ²⁹).

This is a summary of the relevant findings of fact taken from judgment no. 1 which have not been challenged since:

The decision to use Ramila’s name for the acquisition of the portfolio was taken by Subhash at or soon after the meeting held in Neil’s house on 11 November 1987, being the meeting at which the decision was taken by Neil and Subhash that Subhash would acquire the SPC portfolio at a serious undervalue. Subhash’s evidence about this decision at trial no. 1 was that Neil, out of the blue, asked him whether he knew of anyone who would buy the portfolio for £1m, a price which Subhash knew was a serious undervalue. His evidence at trial no. 1 was then as follows:

“Q. … you say that Neil and Kenneth asked you if you knew of anyone who might be interested in purchasing SPC’s property portfolio and you immediately indicate that Ramila might be interested?

Subhash stated that Ramila did not have the resources to pay for the portfolio in full up front but would make deferred payments after completion from development profits of some of the houses within the portfolio (Footnote: ³⁴).

It is clear that Subhash used Ramila’s name to enable him to capitalise on this dishonest opportunity to acquire a large property portfolio at a significant undervalue so as to be able to “warehouse” this portfolio using an apparently off shore owner in exactly the same way as he had used Ramila and Vijaya’s names for similar purposes. The only difference was that this, by far the largest acquisition, was one which had been undertaken by Subhash alone and not by the joint venture and that Subhash was cheating not only SPC but also Neil and Kenneth.

The legal status of the properties held in Ramila and Vijaya’s names

All the properties were registered in Ramila or Vijaya’s name by Subhash using the general powers of attorney he held from them. However, Ramila and Vijaya were never intended by Subhash to acquire the beneficial ownership or any interest in any of these properties or their proceeds of sale, neither of them provided any consideration for the acquisition of any of them, were ever consulted by Subhash as to their acquisition, the funding of that acquisition or any decision as to their management or disposal and were never informed of the fact that they had been acquired in their name.

If Subhash was genuinely acting as Ramila or Vijaya’s attorney when arranging for the registration of each property in their respective names, he had a duty to account to them for each acquisition. Thus, if he had been acting bona fide under the general powers of attorney he held, Subhash should have informed Ramila and Vijaya of each property acquisition into their respective names as soon as this occurred and provided them with full details on a regular basis thereafter of all outgoings and income attributable to each property. The absence of any information being provided at any time in relation to any property is very good evidence that Subhash was not arranging for these properties or any income or capital derived from them to be owned beneficially by them but was only arranging for the respective properties’ registration in their name as nominees for an ulterior purpose of his own.

An unauthorised act taken by an agent, such as the unauthorised acquisition of a property in the principal’s name, does not bind the principal unless and until the principal subsequently ratifies that act. Ratification of an unauthorised act cannot occur until the principal gets to hear of the act and is able to take a conscious decision to ratify the act of acquisition. Thus, the registration of these properties into Ramila and Vijaya’s names did not have the effect of passing beneficial ownership of the properties to them. They could have acquired beneficial ownership if they had ratified the transaction since, on ordinary principles of agency, a principal may always ratify an unauthorised act taken in his or her name and thus take both the benefit and the burden of the unauthorised transaction. Unsurprisingly, given their complete lack of knowledge of anything relating to any of the relevant acquisitions, Ramila and Vijaya did not ratify, nor have the opportunity to consider ratifying, any registration or transfer of any property into their names.

Subhash did not, at any stage, account to Ramila or Vijaya and he never intended to. Thus, in the period between the registration of any property in Ramila or Vijaya’s name and the transfer of that property to Glen, Ramila and Vijaya cannot be regarded as holding anything more than the bare legal title of each property. The beneficial ownership of, and any proceeds of sale arising from, each property would have been beneficially owned by Subhash, albeit subject to SPC’s overriding interest and tracing rights. This is the inevitable consequence of the fraudulent circumstances in which Subhash had caused all the properties to be transferred away from William’s estate or from SPC to either Ramila or Vijaya in the first place. One way of testing this conclusion is to ask what would have happened had Ramila or Vijaya unhappily died after a property had been registered in their name. In such circumstances, any claim by their estate for the beneficial interest of that property would have been met by Subhash’s contention that the beneficial interest in the property was held by him on behalf of the entire Thakrar family whose interests he was managing and whose assets he was owning and controlling through the nominee ownership of Ramila or Vijaya.

Conveyancing chain of Ramila’s and Vijaya’s properties

The chain of contracts and registrations that led to the freeholds of the properties outside the portfolio that were transferred into Glen’s name and of the granting of long leases to third Parties cannot be fully documented. This is for three reasons. Firstly, only the most rudimentary conveyancing was undertaken prior to the transfer of freeholds into Ramila or Vijaya’s name, secondly, many of the relevant documents were never retrieved from SKT's premises where all the relevant documents were stored and, thirdly, a full search of the Land Registry for each property registered in Glen’s name has not yet been undertaken.

In relation to the properties transferred into Glen’s name that had been transferred initially to Ramila or another family member outside the portfolio sale, all that occurred was an informal allocation of the property to the family member that Subhash had decided would be the nominee freehold owner followed by a re-registration of that property in the name of that individual, usually only as a prelude to the grant of a long lease to a third Party. The consideration was stated to be a relatively nominal sum, for the William’s estate properties this was £10,000. There is no evidence that any consideration changed hands for any of these properties. A contract for sale was executed and the change of ownership from William’s estate or SPC registered at the time of the grant of a long lease to a third Party. The transfer to Glen was, for some of these properties, included in the schedule of portfolio properties contained in the contract for sale of these properties but, for the rest, no formal registration of Glen’s ownership appears to have occurred until 2000 when Mr Harjivan allegedly became the owner of all of Glen’s shares by way of transfer from Ramila and Vijaya. The portfolio properties were sold to Ramila by a contract dated 17 November 1987 that sale was completed by a transfer dated 25 March 1988. A further contract for the sale of the properties by Ramila to Glen was executed dated 30 March 1990 and the properties were then subsequently re-registered in Glen’s name.

There is a suggestion in the contemporary documents that Ramila executed a further general power of attorney in favour of Subhash dated 15 March 1990. This document has not emerged either as an original or as a copy but it is conceivable that Subhash manufactured one immediately prior to the formal transfer of properties from SPC’s portfolio from Ramila’s into Glen’s name. It is inconceivable that Ramila could have signed such a power of attorney, she was living in Tanzania in March 1990 and was soon to marry Babu. Subhash did not travel to Tanzania and there is no evidence of a blank power of attorney form being sent from England to Tanzania. However, a forged or manufactured power of attorney may well have been used to support the transactions dated 30 March 1990, in which case Subhash’s signature supported by that invalid power of attorney is itself invalid on that ground alone. However, the evidence was not sufficient to enable a finding to be made that Subhash had manufactured a power of attorney dated 15 March 1990 or that such a document had been used as the purported authority for Subhash to act on Ramila’s behalf on any occasion.

Why was Glen Formed and who Beneficially Owned its Shares after its Formation?

Glen’s formation

The conveyancing required to ensure that the portfolio properties were re-registered in Ramila’s name was undertaken by a new firm of solicitors, Mr Roger Smith of Claremont Haynes & Co, instructed by Subhash. Soon after the re-registration had been effected, that firm was evidently advised by accountants it used that properties registered in the name of off-shore residents could be subject to inheritance tax if the registered proprietor died and that it was preferable for such properties to be held by an off-shore company owned by the off-shore resident. This advice was confirmed in a letter written by the solicitor concerned to registration agents based in Jersey on 31 May 1989 which reads in part:

“We acted last year on behalf of a client (Miss Ramila L. Thakrar) who I understand is domiciled in Tanzania and who acquired a number of tenanted residential properties in England. Under the transaction £100,000 was paid on completion and the balance of the purchase price is payable by three annual instalments, the first such instalment being due on 25^th March 1989.

In order to avoid the payment of Inheritance Tax in England should our client die, her accountants have proposed that she should arrange for the formation of a company in Jersey and that she should agree to sell the properties in England to that Company in return for shares to be allotted to her in the Jersey company. She would then make a declaration of trust that she holds the properties in trust for the Jersey company.

The accountants in question (Messrs. S.K. Thakrar & Co) … have instructed us to contact you to enquire whether you are able to assist both in relation to the registration of an appropriate company in Jersey and its subsequent administration …”.

On seeing a copy of this letter, Subhash wrote to the solicitor stating that the contents of this letter were correct and that:

“I have cleared this matter with my client over the telephone”.

This was a lie because Subhash never discussed Glen, its formation, the property holdings in Ramila’s name or anything else concerned with these properties with Ramila over the telephone or by any other means. The letter did, however, state that Vijaya was also to be a shareholder in the company that was to be acquired in Jersey.

On the advice of the formation agents, a Liberian company was formed since this was marginally cheaper than buying or forming a Jersey company. This company was to be administered in Jersey with a full package of directors, secretary, registered office, shareholders and the minimum services to maintain the company by the formation agents. The property management would be undertaken by Subhash and his firm in London. The consequence was that Glen was incorporated on 22 June 1989. Its directors and officers were all based off-shore. On 17 April 1990, 250 shares were allotted to Ramila and to Vijaya and Glen issued share certificates to give effect to this allotment. On 30 March 1990, the SPC portfolio and other properties all registered at that time in Ramila’s name were sold to Glen for a consideration of £1m. The agreement was signed on behalf of Ramila by Subhash and the properties were re-registered in Glen’s name. Later in the year, Subhash arranged for 249 of Ramila’s 250 shares in Glen to be re-registered in Vijaya’s name and the Glen share register records that fresh share certificates were issued to give effect to this transfer. There is no evidence as to the reason for this transfer nor that any purported consideration was paid by Vijaya to Ramila for the acquisition of one half of the shares which would have had, even in 1990 soon after its formation, a substantial value. As with all the other transactions associated with Glen and the properties transferred into its name, this transaction was not discussed with or mentioned to either Ramila or Vijaya.

It is pertinent to set out evidence given by Subhash at trial no. 1 about Glen’s formation and the sale by Ramila to Glen for £1m and the transfer into Glen’s name of the properties held in her name. Subhash said:

“Q. Are you able to point to the individual or individuals who received that advice and then said: yes, please follow that advice and set the company up?

A Yes sir, First [the solicitor who carried out the conveyancing into Ramila’s name] raised [the advice to transfer the properties into an off-shore company] after I think he had been to Jersey for some conference or advice. Then he communicated that to me saying: Subhash, this is a good idea. In the case of Ramila or, you know, is she going to die, then you have a problem. So I said: fair enough so I did communicate that advice to Ramila and her siblings and that was then communicated back saying: yes, you should form the company quickly.

Q. How did you communicate to Ramila: by telephone or writing?

A. Normally we used to do it by telephone, because in writing it was rather dangerous.

Q. Did she give you instructions to set up the company in writing?

A. No, by telephone. …

Q. And it is said that the consideration was £1 million was paid to Ramila?

A. That is correct, and the shares as well.

Q. Do you know whether the £1 million was paid to Ramila?

A. Over the period, monies were certainly drawn by them and then – I do not have much other details.

Q. Were you involved in arranging for the payments from Glen to Ramila?

A. No, but the directors were certainly making some payments to her.

Q. How do you know that?

A. Because I used to do the accounts initially.

Q. Do you know what happened to the properties after they were transferred to Glen?

A. All I know is that Glen has been sold by the family in the year 2000.

Q. Do you know who to?

A. To some people in – Portuguese people in Mozambique as far as I know.

Q. I see, do you know in whose name the properties are now registered?

A. In Glen’s name, as I recall.

Q. Still registered in Glen’s name?

A. As far as I know.

Q. You said “they were”, which date?

A. I think, when – last year, when the solicitors were talking to Ramila and me they were in Glen’s name. (Footnote: ³⁵)”

In considering Subhash’s underlying reason for setting up Glen and for arranging for the transfer of the properties in Ramila and Vijaya’s name to Glen for a purported consideration it is pertinent to consider two significant events that occurred in 1990 in Ramila’s life. The first was her engagement and subsequent marriage to her husband Babu who was then and remains a British national resident in the United Kingdom. The marriage took place in Tanzania on 13 July 1990. Following her marriage, in October 1990, Ramila moved to England with her husband and set up home in Wellingborough, near Ramila’s brother Nilesh. A large family wedding reception was held in England in January 1991. The entire Thakrar family living in England attended this reception including Subhash, Shantaben, Kiran, Mukesh, Vijay, Sheela, Naina and Kishan.

For a time after her marriage, Ramila took a job in a chocolate factory in Wellingborough and then in a packaging factory in Whitworth at a wage at about £3 per hour. Babu was also employed, as a fork lift truck driver. Ramila and Babu moved to Sidcup in 1993 and, in 1995, they bought a former council house in Mottingham for £54,995 with a mortgage for some £38,000 or less secured on the house and funded out of Babu’s relatively modest earnings. The mortgage was arranged by Vijay at Subhash’s suggestion.

At no time did Subhash raise or discuss with Ramila the properties in her name, the formation of Glen, the issuing of shares in Glen in her name, the liabilities arising from her property ownership or the money coming to her for the sale of her properties to Glen.

Subhash’s reasons for Glen’s formation and shareholding

On 30 November 1990, 249 of the block of 250 shares held in Ramila’s name were transferred to Vijaya so that Vijaya was registered as holding 499 of the 500 issued shares. This transfer, like the earlier transfers, was recorded in Glen’s share register and share certificates were issued to formalise this re-registration.

In chronological order, the relevant events relating to Glen’s formation were as follows:

The only conclusion that can be reached as to the reason for the formation of Glen and for the arrangements for its shareholding are that Subhash decided to register all properties he was acquiring from the partnership arrangement with Neil in the name of someone resident overseas for tax reasons and to hide the connection between him and these properties which had all been acquired dishonestly from SPC. He still wished to retain control over these properties and regarded himself as the beneficial owner of them. When the opportunity unexpectedly arose for him dishonestly to acquire SPC’s remaining portfolio, he again arranged for those properties to be transferred into Ramila’s name for the same reasons as he had arranged for the earlier transfers into her name.

Soon afterwards, he was advised of the desirability of setting up an off-shore company for inheritance tax purposes by the solicitors who had acted for Ramila, as they thought, in the portfolio transfer. The advice was given on the basis that the transfer was a bona fide transfer to a wealthy individual resident overseas. Although that was a reasonable view of the arrangement, it was not the correct view as a result of Subhash’s dishonesty. However, the advice must have set Subhash thinking as to whether the then arrangements were satisfactory from his point of view. He was making returns to the Revenue on the basis that the properties were held by an overseas resident so that, if Ramila died, they would pass to her estate and inheritance tax would be payable. Subhash would then lose control of these properties. He therefore appears to have adopted the advice given, albeit to further his own dishonest scheme. Glen was set up and the shares registered equally in Ramila and Vijaya’s names. The properties were then transferred to Glen. Soon afterwards, Ramila married and then moved to England and, as a result, Subhash hastily arranged for all but one of Ramila’s shares to be transferred to Vijaya. This was to enable him to retain control of Glen and the properties registered in its name of which he regarded himself as the beneficial owner.

Beneficial ownership of Glen’s shares

The background to the formation of Glen, Subhash’s misuse of Ramila and Vijaya’s powers of attorney, the failure to inform either of them of any of the transactions undertaken in their names and the use of their names as nominees to transfer the properties away from SPC all point to the conclusion that Glen’s shares were registered in Ramila and Vijaya’s names as nominees. In summary, Glen was set up in order to strengthen the complete control that Subhash intended to retain over the properties. He was therefore putting up a further screen behind which he was hiding his beneficial ownership of Glen. He did not attempt to arrange for the consideration due to Ramila from SPC for selling it the properties registered in her name to be paid to her nor did he arrange for the consideration that should have been paid to her by Vijaya for the sale to Vijaya of 249 of these shares to be paid over. Indeed, he treated these shares as his own since no consideration was apparently considered or provided for. Only Subhash could have procured this transfer since the Board of Glen only undertook such activities and entered into such transactions as Subhash instructed. However, this conclusion is merely provisional until the way in which Glen was managed, directed and controlled and the way in which its assets were used after it was formed are examined.

Evidence of Glen’s management 1990 – 1995

Glen was incorporated in Liberia and its initial share was issued to S.B. Goweh whose address was given in the Articles of Incorporation as being a Post Office address in Monrovia, Liberia. This share was transferred to R.J.E. Managers Ltd and a second share was issued to S.T.R. Managers Ltd who were management companies based in Jersey who were appointed by Strachans, a Jersey-based provider of company management services and related professional services. Strachans had been appointed by Subhash to arrange the incorporation of Glen and to provide management services and a registered office for Glen in Jersey. Three directors were appointed by Strachans, two being management companies based in Jersey. The chairman was a Strachans director who was also a director of Glen. These directors, through their respective representatives, authorised the transfer of the two issued shares to Ramila and the allotment of a further 248 shares to Ramila and 250 shares to Vijaya. SKT, being Subhash’s accountancy firm that was located at Thakrar House, 113, Woolwich High Street, Woolwich, London, SE18 6DN, were appointed Glen’s accountants.

From the start, the management of Glen was undertaken by Subhash from Thakrar House. However, the annual accounts, prepared by SKT under Subhash’s direction, made it clear that Glen controlled its activities outside the United Kingdom and did not maintain any branch offices in the United Kingdom. Despite those assertions, the management of the properties registered in Glen’s name was undertaken by SKT and all paperwork relating to the company’s day to day activities was kept at Thakrar House. The company did not employ any staff directly, save for its directors and Strachans but Strachans’ role was a purely formal one of receiving and transmitting Subhash’s instructions. Thus, the management was, in a formal sense, off-shore.

The extent of Subhash’s involvement can be seen from this extract of a letter written to Subhash by Strachans following Subhash’s termination of their engagement in December 1996 because he thought they were overcharging for their services. The letter is dated 7 January 1997 and reads in part:

“Glen International Limited/Teso International Limited

…

We have always been scrupulously honest with you about our fee rates … What you have difficulty in grasping is that we are the Directors [emphasis in the original] of these companies and as such need to know what is going on but, more importantly, are seen to be people carrying out the actions. You see us as simply as an office you send correspondence to or draft letters for, and do not take seriously our role. Bearing in mind the activities of the company, your involvement and its financial background I think you are taking an unwarranted risk with regard to the U.K. Revenue, in fact for the future I believe the Directors offshore should have more control and you purely perform an accounting function not a decision-making function as you are inclined to do. This is the fundamental difference between our firms, you try to minimise our role, effectively you want a rubber stamping operation, we as Directors are not happy with that condition and hence spend time going through the correspondence you sent us which you think is unnecessary. (Footnote: ³⁶)”

The letter was signed by Mr Richard Egglishaw who was a director of Strachans and had been a director of Glen prior to Strachans’ dismissal by Subhash. The evidence suggests that Subhash continued in his decision-making role and in his treatment of the management companies that followed Strachans, in both Glen and Teso, until and throughout trial no. 2.

Thus, for the first year of trading, being the year ending 30 June 1990, Strachans were paid management expenses, including directors’ fees, of £15,157 in relation to a company with fixed property assets valued at £889,341. The directors only met, outside the United Kingdom and often by a telephone call, to ratify those decisions and transactions that Subhash had taken or instructed that required a Board resolution or director’s approval. Subhash was able to undertake these roles because he was Glen’s accountant, was acting as the manager of the entirety of Glen’s assets being the properties held in its name and was able to assert that he was the owners’ attorney and was taking all decisions on their behalf. The passive role played by the directors and management company in Jersey arose from their understanding that the company had been set up by a wealthy overseas investor for tax purposes and that their role was to take their instructions from the owner, who they had never met, via the person who appeared to have the owners’ authority to convey their instructions to the directors and the management company.

On occasion, Subhash had to manufacture the purported authority of Ramila or Vijaya. Thus, copies of two documents were disclosed by Glen which purported to be authorities signed by Ramila, dated 4 October 1991, and by Vijaya, dated 31 August 1993 and which appointed named individuals as their proxies to vote for them and on their behalf at, respectively, the first and third Annual General Meetings of Glen. Vijaya was, of course, resident in Kenyaand never received a copy of this document to sign and Ramila was adamant that she did not receive documents to sign although, at the date of the document purportedly signed by her, she was resident in England. It would be extremely unlikely that Subhash would have arranged for valid signatures to be placed on these documents by either Ramila or Vijaya since it would have risked Ramila and Vijaya discovering the truth about the misuse of their names in relation to Glen and its property holdings. The signatures did not need to be witnessed and I conclude that the signatures were forged by Subhash so as to enable apparently regular Annual General Meetings to proceed using proxy votes. I also infer that, for reasons of Liberian or Jersey law or as a result of Glen’s internal regulations, it must have been necessary for Subhash to obtain the signature of the owners of the shares on the proxy forms. This is because, otherwise, Subhash would have relied on the powers of attorney that he held to provide his signature for and on behalf of the apparent owners of Glen in the same way that he usually operated when undertaking management functions relating to Glen.

Subhash’s Use of Glen, Glen’s Assets and Glen’s Shares as Beneficial Owner

Discharge of Subhash’s Personal Liability to NatWest

Introduction. Subhash used the assets of Glen in 1991 in order to satisfy his own personal liability to National Westminster Bank plc (“NatWest”). In the course of doing this, if he was using the names of Ramila and Vijaya in a bona fide manner, he exposed them to substantial liabilities to third party lenders which they had no knowledge of. These uses of Glen’s assets therefore suggest that Subhash was using his own assets for his own purposes.

83a Riverside. Subhash and Neil purchased 83a Riverside on 31 March 1988 for £217,000. In order to raise the purchase price, they had to borrow the sum of £150,000 from NatWest in the name of Mukesh since neither of them was able to borrow further sums from NatWest in his own name given the loans that they had already taken out from that bank (Footnote: ³⁷). Subhash told the NatWest manager, Mr Terry Martin, who he was dealing with that the loan would be repaid within 4-6 weeks (Footnote: ³⁸). In fact Subhash and Neil were unable to repay the loan within that time-frame and it was still outstanding on 21 December 1990 when Subhash wrote to Mr Martin stating that he was

“in the course of making arrangements to pay you the quarter’s interest and hopefully clear the capital sums outstanding on Mukesh’s and Neil’s Loan Account (Footnote: ³⁹)”.

The arrangements to which Subhash referred in his letter to Mr Martin were the raising of the money, required to repay the outstanding loan, by way of mortgages on ex-SPC properties that Ramila had purportedly agreed to transfer to Glen. These mortgages were two, for £70,200 and £58,750, raised from Leeds Permanent Building Society on the security of 20 Morton Road and 165 Clive Road respectively and two, for £40,500 and £42,500, raised from Woolwich Building Society on the security of 20 and 20A Fairthorne Road respectively (Footnote: ⁴⁰). Because the building societies would not lend directly to Glen, as an off-shore company, Subhash arranged for Glen to grant long leaseholds to Vijaya (165 Clive Road and 20 Fairthorne Road) and Ramila (20 Morton Road and 20A Fairthorne Road) and for mortgages to be granted over each of those properties (Footnote: ⁴¹). The total sum raised was just over £208,000 and the monies were received in two tranches of £128,250 odd on 3 May 1991 (from the Leeds Permanent) and £80,050 on 20 June 1991 (from the Woolwich) (Footnote: ⁴²).

It is clear that the purpose for which these monies were raised was to discharge Subhash’s personal liability to repay the loan advanced to enable Subhash to purchase in his name 83a Riverside Drive and that it was Subhash who dictated the purpose for which they were raised and who organised their raising. Thus, in a letter Subhash wrote to Mr Gordon Holdich, a Senior Manager of NatWest, dated 8 July 1991, he informed him:

“Therefore you have absolutely no cause to worry about these accounts as Terry Martin would have reassured you and we have done so. We have paid you over £207,000 since our meeting … I would like you to transfer the sufficient amount of money from Neil’s account to close Mukesh’s account as was agreed at the time.” [emphasis added]

The figure of £207,000 referred to by Subhash in this letter to Mr Holdich was almost identical to the total of the funds (£208,000) raised on mortgage on the “Glen” properties in May and June 1991. Of the £207,000 paid to NatWest, £80,050 was initially applied to reduce Neil’s indebtedness to NatWest arising from the loan he took out to meet SPC’s tax assessment. However, pursuant to Subhash’s letter to Mr Holdich, £20,027.67 of this was transferred to the loan account in Mukesh’s name to close that account (Footnote: ⁴³). Thus in all approximately £147,000 out of the monies raised on the mortgages in the names of Vijaya and Ramila was applied to pay off the loan account in the name of Mukesh for which Subhash was liable.

Subhash was able to implement this scheme because he held powers of attorney from Ramila and Vijaya which enabled him to execute the leases and the mortgages on their behalf (Footnote: ⁴⁴) and he was able to direct the directors of Glen what to do. The result was that approximately £147,000 of what on the face of it were Glen’s monies was used to repay a personal liability of Subhash’s. There is only one possible explanation for these transactions. This is that Subhash was himself the true beneficial owner of Glen and he disposed of its assets on this occasion, as on many others, as he saw fit.

Support for this conclusion is obtained from a substantial lie told by Subhash at the original trial. Subhash lied in giving evidence about the purpose for which these monies were raised on mortgage from the Leeds and the Woolwich. According to Subhash, these monies were raised on mortgage to pay an instalment of the purchase price due from Ramila to SPC for the SPC portfolio. However, Subhash also stated that, as there were outstanding accountancy fees owed by SPC to SKT, Neil agreed some time in February to April 1991 that out of the mortgage monies raised, the sum of £134,550 would be paid to SKT (Footnote: ⁴⁵). Subhash then alleged that, contrary to the alleged agreement, Neil did not pay SKT the promised sum of £134,550 but instead, unbeknown to Subhash, applied the same towards the loan account in the name of Mukesh at NatWest established to enable Subhash to purchase 83a Riverside (Footnote: ⁴⁶).

Since Ramila did not owe SPC anything, the loans could not have been intended to enable her to pay SPC. This evidence was therefore a lie. It is obvious why Subhash made up this story. It was to enable him to provide an explanation, which he needed to avoid his case at the original trial being fatally undermined, as to why assets apparently owned by Glen had been mortgaged to raise monies to repay Subhash’s personal indebtedness to NatWest.

Subhash’s Explanation of Glen’s “shareholder’s loan” Account Shows Subhash as Glen’s beneficial owner

The opening year’s accounts for Glen up to 30 June 1990 (Footnote: ⁴⁷) contain figures on page 4 in the Balance Sheet for “Properties” of £889,342 and “Creditors” of £878,648. Note 6 on page 5 explains that the latter figure:

“represents loan accounts which are currently interest free, and not payable on demand”.

The corresponding note in the subsequent year’s accounts up to 30 June 1991 (Footnote: ⁴⁸) states:

“This represents Overseas loan accounts which are not payable on demand. Interest payable will be rolled up. No provision is made in these accounts.”

According to Mr Barby, in an affidavit that he prepared with the assistance of Subhash during the preparation by Glen and Teso’s then legal team of Glen and Teso’s Points of defence:

“Glen’s accounts show an increasing indebtedness expressed to be owed overseas … I understand that it represents the assets and funds advanced to Glen by the beneficial owner over the years. (Footnote: ⁴⁹)”

That explanation can only have been given to Mr Barby by Subhash, since the other sources of Mr Barby’s information that he identified in the affidavit, being Mr Shelton and Mr Harjivan, as they both confirmed in their evidence, had no direct knowledge of how Glen’s accounts were compiled and also had no involvement with Glen prior to 1997 and 2000 respectively.

According to the agreement for sale dated 30 March 1990 between Ramila and Glen, Ramila agreed to sell to Glen the properties she had acquired from SPC save for: (1) properties sold prior to March 1990 and (2) seven properties in Springfield Road (Footnote: ⁵⁰). In return, she was issued with 250 shares in Glen. It is not stated what indebtedness the loan account represented but, if Subhash’s explanations were correct, half of this indebtedness must have been created by Glen not paying Ramila whatever was due for its acquisition of Ramila’s properties and half must have been provided by Vijaya as a loan. This assumption arises because:

Thus, the beneficial owner of Glen in the first accounting year up to 30 June 1990 was, on the basis of Subhash’s explanation, Ramila and Vijaya jointly since each had 250 of the 500 issued shares registered in their name. 249 of Ramila’s holding were re-registered in Vijaya’s name in November 1990 so that, from that time onwards, Glen’s beneficial owner was, on the basis of Subhash’s explanation, Vijaya. Furthermore, on Subhash’s case, the loan account up to November 1990 must have been jointly owed to Ramila and Vijaya as the owner so that each individually was owed half the sum shown in the loan account. In other words, the loan account was made up of the sum Glen was liable to pay Ramila for her properties combined with an identical sum that Vijaya loaned Glen.

Following Vijaya’s acquisition of Ramila’s shares, the whole of the combined sum must have been solely owed to Vijaya since the same sum was shown in the loan account as being due and this, according to Subhash, was due to “the owner”. The only way that the loan account could have remained the same size on this basis would have been if Vijaya had paid Ramila directly on behalf of Glen the sum owed to Ramila by Glen when she acquired Ramila’s shares. If that happened, Glen would still owe Vijaya, as the new owner, the same sum as it had previously owed the joint owners.

Glen’s Balance Sheet as at 30 June 1990 shows the “loan accounts” figure as £878,648. It follows from paragraph 126(2) above, that the monies “put in” by Vijaya, on or about 30 March 1990, must have been about half that amount, or £439,325. Glen’s Balance Sheet for the following year shows the “loan accounts” figure as at 30 June 1991 as £872,527. It also follows from paragraphs 127 and 128 above that Vijaya must have paid Ramila £436,262, for the purchase of her 250 shares in November 1990 so as to have discharged Glen’s indebtedness to Ramila and so as to have enabled Glen’s indebtedness to her to become £872,527.

However, neither Ramila nor Vijaya was the beneficial owner of Glen during this period. Moreover, the evidence that I have accepted of each of them is that neither of them (a) were issued with any shares in Glen (b) disposed of or acquired any shares in Glen (c) made payment of or received any monies for shares in Glen or (d) made a payment of or received approximately £440,000 on or about 30 March 1990 and approximately £436,000 in November 1990 nor any sums of such amounts at any time (Footnote: ⁵³). The evidence of both sisters was that Vijaya did not pay, and could not have afforded to pay Ramila, and Ramila did not receive from Vijaya or anyone else some £875,000 over the space of six months in 1990.

The conclusion is that Subhash was “the owner” in whose favour the loan account was opened and maintained into and beyond 1991.

Proceeds of Sale of ex-SPC Properties Registered in Ramila’s Name

Further, between July 1989, when Glen was formed, and 30 March 1990 the following ex-SPC properties were sold on the open market to third Parties (Footnote: ⁵⁴)

Note 4 to the 1990 accounts states that the freehold properties of the company “At Cost & Legal Fees” were valued at £1,002,249 at the beginning of the year, and that during the year there had been “Additions & Improvements” of £18,646 and “Disposals” of £131,533, so that at the end of the year their value was £889,342. The figure of £132k is very close to the “disposals” figure of £131,533 shown in note 4 to the 1990 accounts with the difference presumably reflecting legal fees.

Further, as stated above, note 4 to Glen’s accounts for the year to 30 June 1990 shows disposals during the year of £131,533 reducing the value of Glen’s properties to £889,342 at the year end. That figure broadly corresponds to the figure of £878,648 shown for the loan accounts (shareholder’s loan) as at 30 June 1990. The implication is that the owner’s loan account has been reduced by the proceeds of property disposals. But that also implies that the sales proceeds were received by Ramila and Vijaya. However, their evidence was that they were unaware of the sales of 4 Cornflower Terrace and 40 Reidhaven Road and did not receive any part of the proceeds of sale (Footnote: ⁵⁵). Nor was any part of the proceeds of sale used to pay the “purchase price” which, on Subhash’s case, Ramila still owed SPC under the March 1988 Transfer. This is because, even on Subhash’s own account as to how instalments of the “purchase price” were paid during SPC’s financial years to 30 September 1989 and 30 September 1990 respectively, no payments were made to SPC out of the proceeds of sale of 4 Cornflower Terrace in July 1989 or 40 Reidhaven Road in January 1990 (Footnote: ⁵⁶).

Thus, the only circumstances in which the accounts of Glen for the years ended 30 June 1990 and 30 June 1991 could have presented a true and fair view of the company’s financial position was if the true beneficial owner of Glen was some one other than Ramila and/or Vijaya. Furthermore, the proceeds of sale of two properties allegedly beneficially owned by Glen having previously allegedly been beneficially owned by Ramila were paid to and used by someone other than either of them. As already stated above, there is no available candidate for such person other than Subhash himself.

Conclusion: Ownership of Glen in Period 1990 – 1995

Overall, there is overwhelming evidence that Subhash was and regarded himself as being the beneficial owner of Glen in and after 1990. This follows from the evidence of how Subhash used Glen and its portfolio and from the overwhelming evidence of Ramila and Vijaya that they had no involvement in, or knowledge of, the ex-SPC properties, Glen or its shareholding or their apparent involvement in them.

Ramila and Vijaya’s Further Powers of Attorney

Ramila did sign a second power of attorney in favour of Subhash dated 1 July 1993. She did not remember the circumstances in which she signed this power of attorney but she could only have signed it on the basis that Subhash stated that it was wanted in connection with the Jayaben Trust. At that time, there was growing concern about the way that Nilesh was apparently failing to account to the trustees of this trust arising out of income from properties bought with trust funds which Nilesh was managing. These properties had nothing to do with, and were not connected with, any of the ex-SPC or ex-William’s Estate properties and no monies associated with those other properties were intermingled with the Jayaben Trust fund. The trustees of the Jayaben Trust were Subhash and Ramila, and Subhash was, as Ramila understood the situation, attempting to regularise the accounts of the trust. It was for this purpose that Ramila thought that she was providing Subhash with her power of attorney.

In the light of his previous failure to provide Ramila with any information about the ex-SPC properties, her apparent ownership of some of those properties or Glen, it is clear that Subhash would not have provided any explanation about the properties held in her name or of her single share in Glen. By 1993, Ramila’s only involvement in Glen and its properties was as the holder of a single share and as bare trustee of properties that had been sold to Glen but, so as to save on stamp duty, had not been formally registered in Glen’s name. It is inconceivable that Subhash would have explained to Ramila that the power of attorney was wanted in connection with either the share or the properties. Thus, although Subhash probably wanted an up to date power of attorney to enable him to complete the conveyancing of the properties from Ramila to Glen, the use of this power of attorney after July 1993 by Subhash was on the same unauthorised basis as his use of the December 1985 power of attorney.

Vijaya also signed a second power of attorney in favour of Subhash dated 19 May 1994 before an advocate in Kisumu, Kenya. Her evidence about this, which I accept, was as follows:

“In May 1994 I was sent this unsigned power of attorney by Subhash asking me to sign it and return it to him. Neither I nor my husband understood what it meant. My husband took the document to a local lawyer who tried to explain but neither I nor my husband understood what he was saying. The lawyer asked us what the relationship was and I said he was my cousin brother. The lawyer said in that case it should be alright. As a result I signed and returned the document to [Subhash]. (Footnote: ⁵⁷)

This power of attorney was provided without any disclosure to Vijaya of the interest she nominally had in Glen or its shares or in any properties previously registered in her name. The power of attorney was, therefore, identical in its scope to the previous power of attorney she had provided to Subhash in 1988. Although general in scope, it was not intended by either Subhash or Vijaya to cover transactions in properties which were not intended to be beneficially owned by Vijaya and for which her name was being misused by Subhash without her knowledge or authority.

Appointment of New Management Company and Directors

On 20 December 1996, Subhash wrote to Strachans out of the blue a letter challenging Strachans fee levels. The letter was couched in extremely intemperate language and, in effect, accused Strachans of dishonestly seeking to charge Glen and the beneficial owner of Glen excessive fees. The letter came out of the blue and was addressed to Mr Egglishaw who was, as part of the management services being provided by Glen, its chairman and one its directors. Part of what Subhash said, which gives a flavour of the letter, was:

“I have to put you on full notice that you have not been honest with me about your fee rates and your claims are totally wrong. I have done a full analysis of all the work that your alleged people have done on this company, I do not accept that its continuously active (sic) throughout the year (meaning your firm doing very substantial work) as I have been copying correspondence only to your office.

… Therefore, in view of your letter and very unhelpful attitude, as I may put it, the clients are very very concerned and have telephoned me to instruct me to transfer their business to their new advisors. You will be getting the necessary letters through the solicitors and the new advisors.”

Mr Egglishaw responded in a temperate manner but set out the nub of the difference between himself and his firm with Subhash. An full extract of that summary has been set out above (Footnote: ⁵⁸). In short, Mr Egglishaw was stating in clear but restrained terms that Subhash was not prepared to allow the management company and directors of Glen any management function and regarded the firm managing the company as nothing more than a post box to receive copies of letters written by Subhash “as Accountant and Attorney on behalf of the clients” as Subhash constantly referred to himself as. It is clear that Subhash’s real reason for terminating Strachans’ engagement was that they and the directors of Glen were not prepared to allow him to run Glen and take all management and executive decisions himself nor were they prepared to be treated as a post box. As clear evidence of Subhash’s role in Glen and its shareholding, he never discussed the change of advisors with either Ramila or Vijaya and, indeed, told a clear and unvarnished lie when stating to Mr Egglishaw that he had received a telephone from “the clients”, that Ramila and Vijaya had expressed themselves to be “very very concerned” and had instructed that “their” advisors engagement be terminated and transferred to new advisors. These lies, and the failure to discuss the matter with them or to inform them of the need to instruct new advisors or to introduce them to the new advisors is the clearest possible evidence that Subhash regarded himself as “the client” and as the person entitled to the beneficial ownership of Glen and, through Glen, its assets.

Following this concocted dispute about fees and the termination of Strachans’ retainer, a new management company, Anchor Trust Company based in Jersey, was engaged and new directors were appointed to Glen. It would appear from their limited involvement in the running of the company and in the absence of Board Meeting minutes recording decisions taken by the directors, that Subhash’s iron grip on the running of the company continued after 1995.

One of the new directors was Mr Barry Shelton. Originally, on 13 June 1997, he was appointed as an alternate director to Mr Michael Power who was also appointed a director on the same date. However, on 3 January 1998, Mr Power resigned as a director and was replaced by Mr Shelton. Mr Shelton remained a director of Glen throughout the subsequent period until his management role was taken over by the purported appointment of administrators (Footnote: ⁵⁹). Mr Shelton was a prominent witness at the trial and was the only active director of Glen and, as he correctly described himself:

“I have been primarily responsible for the formal management of Glen” (Footnote: ⁶⁰).

The reason for Mr Shelton being responsible only for the formal management of Glen is that Subhash was allowed to continue to manage Glen and its properties and to take all decisions relating to its property investment and management. This was done through SKT from its offices in Woolwich (Footnote: ⁶¹). It was clear from the evidence, particularly the copies of correspondence sent by Subhash to Glen, particularly Mr Shelton, that was obtained from Subhash’s hard drive, that Subhash took every decision relating to the appointment, dismissal and re-appointment or new appointment of the directors of Glen and Teso throughout their history, that these decisions were taken without his consulting anyone else and that his instructions about these appointments and retirements were taken without anything other than a formal resolution being passed by the Board of Directors.

There is no disclosed correspondence or other communication from any director other than Mr Shelton and the communications emanating from Mr Shelton and those sent to him were all to or from Subhash. In the years after 1995, neither of these companies held Board Meetings on a regular basis and those that were held were held by telephone and appear merely to have adopted resolutions needed to implement Subhash’s instructions. Most correspondence from Subhash, who is clearly not computer literate and who never himself sent an e-mail, formerly refers to himself as attorney or accountant for Ramila, Vijaya or Mr Harjivan as the case may be, it is clear from the evidence that he never consulted any of these people in relation to any of Glen’s affairs. All correspondence included instructions or complaints and criticisms of the actions of other professionals. However, sometimes the mask slips and the communication is written as if the instructions are being given by the owner of either Glen or the property in question.

Mr Shelton accepted that he received an inordinate volume of communications from Subhash and that these communications always contained instructions to him which Subhash expected him to implement. He contended, somewhat weakly, that he always regarded himself as exercising an independent role as the principal director of Glen, during the time he was a director or alternate director from 1997, and that he only implemented Subhash’s instructions when he agreed with them. He claimed to have disagreed with instructions in writing on a number of occasions but no such communication was disclosed or emerged from the discovery and document seizure of Subhash’s documents. Mr Shelton even volunteered during his cross-examination to produce copies of communications in which he challenged or disagreed with Subhash’s instructions but although he was subsequently recalled to the witness box for further questioning on other matters and also had every opportunity to search out and provide to the court such documents, none were ever produced.

Overall Conclusion – Beneficial Ownership of Glen

The overall conclusion from the evidence, both from the specific evidence referred to in this judgment and from a reading of the totality of the voluminous quantity of documents adduced in evidence, being all of the relevant disclosed documents and those obtained following the search and seizure warrants or disclosure directions, is that Subhash acted throughout as if he was the beneficial owner of both Glen and Teso and, through them, all their assets, that he was free to do what he liked with all assets, that he controlled and managed both companies and that whoever was appointed as director merely acted as a post box or as someone who would unquestioningly implement whatever instructions were received.

Subhash’s control extended to unilaterally deciding which professionals should be appointed to act for Glen and Teso, what they should be remunerated and when they should be dismissed. Subhash clearly has a propensity to challenge and complain about the actions and charging levels of all who are working for him or for Glen and Teso so that the documentation is replete with letters complaining, accusing or criticising the actions of the many professionals who acted in the lengthy period under review.

The net result was that many different firms of solicitors acted for Glen and, hence, Subhash in that period. Each was instructed on the basis of Subhash’s powers of attorney and so he must have repeated the lie that he was acting for Ramila or Vijaya or, after 2000, Mr Harjivan with their knowledge and, often, on their direct instructions, on innumerable occasions. I found no occasion where Subhash stated that he had been instructed by, or had been contacted by, any of these three shadow individuals where the person in question had in fact contacted Subhash or had been informed contemporaneously of the matter in issue. Although most letters contained a statement that they had been copied to the individual allegedly instructing him to send the communication, it was apparent that no such copy was ever sent out. As was also apparent, Subhash resorted to forging either Ramila or Vijaya’s signature on a significant number of documents which were of a kind that they, as owner, would be expected to send or sign, so that the power of attorney would not be sufficient, but which it is clear that they never saw, discussed, had drawn to their attention or were shown.

The overall conclusion is that Glen and Teso were beneficially owned by Subhash, were considered by Subhash to be beneficially owned by him and were considered by the directors of both Glen and Teso to be beneficially owned by Subhash (albeit that such assets were subject to SPC’s overriding interest and tracing claims).

Teso’s Formation, Control, Charges and Beneficial Ownership

Teso’s Formation

The best evidence as to why Teso was formed that was adduced at trial no. 2 is to be found in a letter written by Mr de Figueiredo of Strachans to Subhash that is dated 5 December 1995. This reads in part as follows:

“Dear Mr Thakrar

Teso International Group Limited

Further to our recent telephone discussions in connection with the problems at 57 Landsdown Lane and the High Court Injunction, I now enclose a letter from the Directors of Glen addressed to yourself confirming your appointment as Property Agent for the company with the authority to carry out whatever actions you deem necessary in defending and maintaining the company’s stock of property. I trust this letter is satisfactory, but if you require any amendment do not hesitate to contact me.

One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. … I have now arranged for a company with [the name Teso International Group Limited] to be incorporated and now enclose a copy of the Certificate of Incorporation whereby you will see that the company was incorporated on 22^nd November, 1995.

My understanding is that the new company will acquire the shares currently issued in Glen in exchange for the debts due by the company to the Shareholders and, at the same time, will take a charge over the properties owned by Glen as security for the loans. You will no doubt be instructing Claremont Smith to deal with the various legal formalities.”

The purpose in forming Teso, as summarised in the middle paragraph of Strachans’ letter, was confirmed by Subhash when giving instructions to Shelton & Co for the management of Teso. In those instructions, Subhash stated that Teso’s only purpose was “NON TRADING – will hold charges over properties in the UK” and that Teso would “… hold charges over properties to save overseas owners from other risks etc”.

Teso’s Business and Charges

The best evidence of Teso’s business is contained in evidence given by Mr Barby , a director of Teso. He said:

“Q. Did you discuss what the nature of the companies was that you were taking over?

A. Well, yes, and in this particular case I discussed it with Mr Shelton, who said effectively Teso was inactive, a company which simply held charges. I do not think we discussed it. There were not any loans. In fact, I am reasonably certain that we did not. My understanding of what Teso was, as it were, on day one was it was a company that held mortgages.

Control and Beneficial Ownership of Teso

It was clear, therefore, from the outset of Teso’s formation that whoever was the beneficial owner of Glen had to be the beneficial owner of Teso since its function was to hold charges over Glen so as to protect Glen’s assets from being taken by third parties. Otherwise, the owner of Teso could call in the loan notionally supporting the charges and could then realise the charges and acquire ownership of the property charged from the owner of Glen. It therefore also followed that the beneficial owner of Glen, being the controller of that company, was also the beneficial owner of Teso.

Did Mr Harjivan Acquire Legal and Beneficial Ownership of Glen and Teso in 2000 or 2001?

Introduction

The single most important question in the Thakrar Litigation is whether Mr Harjivan acquired full and complete beneficial interest in both Glen and Teso in 2000 or 2001.

Mr Harjivan, Shelton and Barby’s Evidence

Mr Harjivan’s Evidence

Mr Harjivan’s evidence was given in six witness statements, his Points of Defence document and in extensive oral evidence. The following is an extended summary of that evidence. He stated that he had purchased all of the issued shares of both Glen and Teso from Vijaya and Ramila in 1999-2000, that he had paid substantial sums of money for these shares in 1999-2000 and that he was now the current owner of those shares. (Footnote: ⁶³) His evidence, which of course had been entirely drafted by Subhash (Footnote: ⁶⁴) should be set out verbatim. Thus:

“It was some seven years ago that substantial monies had to be paid by me through various Parties for them and/or on their behalf and also the Companies to make sure that there were no unnecessary overdue Loans or claims left and my monies were also paid through various third Parties overseas and this Ramila and Vijaya have known. Subhash always acted for them and family, kept them fully informed, and their families, also.”

“Regarding … Ramila and … Vijaya … I was made aware that these were the two ladies selling the offshore Companies and they were paid the consideration and given Value that was agreed for and on behalf of the said Parties. Ramila and Vijaya as well as the family had invested monies and borrowed substantial sums of monies with interest accrued and these were overdue and unpaid. If you look at Glen’s accounts it also confirms that there were Shareholders funds, which were accruing interest and no interest provision had been made in the accounts. Therefore, there was a clear basis that substantial amount of monies were due to be paid and these were so paid.”

“Vijaya and Ramila had no substantial monies except for many substantial borrowings … with the Debentures of Glen and Teso taken out in 1995/1996 on advice of Solicitors and Subhash acting as financial accountant … So, there is clear evidence that these large sums of money were at one time due, which I have cleared and now replaced those as being Shareholders funds from me and my family.”

“… I can confirm that very substantial sums of my monies were introduced into the Companies to repay the outstanding overdue Loans in 1999-2000 directly and indirectly through my various Party/business connections in several overseas countries and also monies paid to or on behalf of Vijaya and Ramila through Subhash instructions or request as their Attorney/Accountant and others as I/we were instructed at the time.” (Footnote: ⁶⁵)

Mr Harjivan did not state in this document how much he either agreed to pay or did pay for these shares in Glen and Teso. By the time Mr Harjivan came to give evidence at the trial, however, he stated and continuously repeated that he had paid £12 million “with all the interest rates all included” (Footnote: ⁶⁶). This figure must have come from Subhash and it could only have been ascertained some time after the date in 2000 on which, according to Mr Harjivan, that the final payment towards the purchase price had been paid. This determination of the purchase price would appear to have been made in December 2005 when Glen and Teso’s then legal team were preparing Glen and Teso’s Points of Defence (Footnote: ⁶⁷).

Mr Harjivan stated that he paid this sum in instalments over 1½ - 2 years. It was all paid in cash and no bank account was involved. He was given instructions at various times by Subhash by “small papers” to “pay this amount of money to this family … or pay this amount of money to that family” and Mr Harjivan simply paid what he was asked to pay. Payments were made in cash “because in Africa, because of tax purposes, we use a lot of cash paying bills in Africa” although later in his evidence he stated that the payments that he made were not confined to Africa since “the accountant sent me a document saying the debts were split in three or four countries”.

The payments were not made in a conventional way. They were not made by bank or other method of money transfer nor did they involve a courier taking money in cash directly to the recipient. Instead, as I summarised Mr Harjivan’s testimony in the course of his giving evidence, in a summary that Mr Harjivan agreed with:

“… in general, a transaction takes place like this. Step one: he receives a note telling him of a debt that must be paid. Step two: Mr Harjivan obtains cash or a debt that his company owes or is owed. Step three: he pays the cash or makes a debt transaction in one country. Step four: the person or company that he has dealt with then arranges for a payment to be made or a debt to be dealt with in another country”.

Mr Harjivan then added:

“It is done this way: there are some people they call intermediates; people who do this sort of business. They get money from you to pay somebody else, so what I did was I called one of these persons … I called them or sent a little note, handwritten like a little piece of paper that I needed to make a payment to somebody else. So I get money, cash, on the money from the country where I am and I pass this to the person who will pay my debt in the other country. From the time I give the money to this person until the money is received at the other end, I really do not know how this goes.”

In answering my question where he got the money from to make these payments, Mr Harjivan stated:

“The money I took from my own business and also from loans I had with friends. We ask loans to friends, to people we trust, people we know, particulars, individuals, so if I did not have enough money for the payment, from my business, I would ask the remainder of the money as a loan to somebody else and pay the money.”

Subsequently, when asked the same question in cross-examination, Mr Harjivan admitted that he did not have £12 million in 1999 and said that he raised the purchase price by way of loans from “friends or people I know or people I trust”.

When he was asked how he learned when the money was finally paid to the person overseas, Mr Harjivan replied:

“This is done by trust. So I would learn that the money was paid just by talking to the person who made the payment, or the person, as soon as they would make the payment, they will just contact me saying: everything is fine, the payment is done. And I very rarely … would contact the person who receive the money to check the money was paid.”

Subsequently, when asked in cross-examination how he was able to keep track of all the monies that he was paying, Mr Harjivan replied:

“There was no control whatsoever, we just kept paying little by little the debt, and then one day you would learn, yes, the debt was done, finished and that was it really.”

When asked how he knew when he had finished making the necessary payments, Mr Harjivan said he “learned about the end of the payment from the firm, the accounting firm … So at the end of the debt, I received a letter from them saying that the debt had been paid, and that was it”. Mr Harjivan identified that accounting firm as being Subhash’s. He stated:

“Q. Which was the same firm who introduced you to Glen in the first place?

A. Exactly.

Q. They told you when you had paid enough?

A. Yes, after I asked them if the debt had been paid in full, yes, they told me everything was correct and they would transfer all the documents to my name.”

Mr Harjivan’s evidence was that “there is no paperwork or any details” evidencing the making of the payments or the amounts paid. However, at my invitation, Mr Harjivan produced a handwritten note purporting to identify the families to whom the payments had been made and the amounts paid to each of them. Mr Harjivan prepared this list overnight from memory and name of the family, the country of residence and the amount paid to each family listed in a round lump sum were added. It was noticeable that the family names were all common Indian names. One example, involving payments totalling £3m, was to a family in Uganda called Ruparelia. This sum represented a debt or debts due to that family from Glen. He was instructed to make payments up to £3m to that family by Subhash although it was not stated what level of detail was provided by Subhash on his chitties nor to whom, when or where these debts were paid and what the debts were for was not stated because Mr Harjivan asserted that his memory was poor and the payments had been made about seven years previously. It was also clear that indebtedness to overseas creditors, other than to the owner of Glen, was not carried in the accounts of Glen and was not known about by Mr Shelton.

According to Mr Harjivan, he had no dealings directly with Vijaya and Ramila prior to his purchase of their companies. In fact, Mr Harjivan had never met Vijaya in person but had spoken to her once on the telephone, some fourteen years previously, on the occasion of her brother Bhiku’s funeral in June 1986. Mr Harjivan had met Ramila twice – once at Bhiku’s funeral and a second time at the wedding of the daughter of the person Ramila had been living with in Lisbon in 1985 and Ramila had made one or two telephone calls to Mr Harjivan’s wife just after the wedding. All of these contacts had taken place many years before the alleged sale of the shares.

I gave Mr Harjivan a further opportunity to add to his oral evidence that he had given on 12 and 13 July 2006. This he did by way of his second witness statement dated 6 September 2006 and prepared with the help of both counsel and a solicitor. Mr Harjivan was still unable to give any further particulars as to his payment of the purchase price. He stated:

“21.

… It was reiterated to me by my new lawyers that it was important to provide more details in respect of the amount I paid which amounted in total to £12m.

Although I have racked my brains since giving evidence and since seeing my new lawyers in August of this year I have been unable to come up with any further details.”

Mr Harjivan also sought to add to his evidence in his fourth witness statement. He was still unable to be any clearer on details, but sought to make his explanation and his failure to identify any of the people involved seem more credible:

“12.

I had agreed to buy the company for £12M. The manner of payment in respect of the £12M followed a traditional approach within the Indian community. The process is very unfamiliar to European business people and understandably perhaps difficult to accept because everything is done through third Parties. The process has a name (“chitty”) which when translated means something like “a small piece of paper”. It is difficult to give a lot of detail because I am bound by the agreements that I have with those who assisted in this process in that I have agreed not to disclose their details for all sorts of personal and financial reasons.

The process involved identifying monies owed to me by third Parties and instructing those third Parties to make such payments not to me (as had been intended) but direct to others instructed by Ramila and Vijaya to receive the monies for the sale of the shares. I would estimate that approximately 60 to 70% of the purchase price was paid in this way. The balance was raised through personal loans provided on trust through my business associates in India and South Africa. These were people who were all well known to each other and where trust was very high between us.”

Subhash’s Changing Statements and Mr Shelton’s and Mr Barby’s Evidence

Subhash. It is instructive to trace through the kaleidoscopic changes in Subhash’s statements about Glen and Teso’s ownership in the period after 2000, being the year in which Mr Harjivan stated in evidence that he had become the owner of these companies.

Subhash’s statements as to the beneficial ownership of Glen between 2000 and 2005 were so contradictory and inconsistent that they provide no reliable guidance as to who was Glen’s beneficial owner in that period. This can be seen from the evidence which I will summarise in chronological order:

In cross-examination, Mr Shelton said that in 2000 he was told by Subhash and received correspondence from Subhash that Mr Harjivan had become the sole shareholder in Glen in March 2000. He also stated that he accepted that information as correct since Subhash held both Mr Harjivan’s and Vijaya’s power of attorney (Footnote: ⁶⁸). His basis for considering Subhash’s statement to be correct was misplaced since Mr Harjivan first gave Subhash a power of attorney in June 2001.

Glen’s Register of Members and Share Ledger, which was disclosed by Glen in these proceedings by way of an exhibit to one of Mr Harjivan’s witness statements (Footnote: ⁶⁹), showed Ramila to be the registered owner of 250 shares in Glen from 14 April 1990 to 30 November 1990 under share certificate no 4 and, after 30 November 1990, as the registered owner of one share in Glen. The Register also showed Vijaya to be the owner of 250 shares in Glen under share certificate no. 5 and, after 30 November 1990, as the registered owner of 499 shares under share certificate no. 6. The entry for Vijaya in this Register has written on it in manuscript:

“1/6/2000 Share Certificate No. 6 US$499 Disposals 499 Balance Nil T’fd to Mahendra Mr Harjivan”.

However, no reliance may be placed on this manuscript entry or on the facts it purports to convey and it has no evidential significance. This is because there is no evidence as to who placed this note on the Register, when it was placed there, what the purpose was in placing it on the Register and what the circumstances were that led to the entry being made. Moreover, this informal note or jotting on the Register can have had no legal effect. Glen’s memorandum and articles provided a clear procedure for the re-registration of share ownership and for the evidencing of that by the issue of new share certificates and the creation of a formal new entry in the Register, all undertaken pursuant to a Board resolution. Although the memorandum and articles provide for the issue of Bearer Shares, there is no evidence that any Bearer Shares were ever issued save the suggestion by Subhash to Mr Shelton that such shares were issued. This suggestion was not substantiated with any evidence and Mr Harjivan denied in evidence that he had ever received any Bearer Shares. Thus, this manuscript note is to be treated as nothing more than a self-serving jotting placed on the Register, probably a note placed there by Mr Callendar as a reminder of what Subhash had told him during a telephone call (Footnote: ⁷⁰).

On 27 October 2000, Mr Shelton provided a witness statement, which was supported by a signed statement of truth, in a county court case in which a tenant of a property registered in Glen’s name was bringing enfranchisement proceedings against Glen (Footnote: ⁷¹). Mr Shelton specifically dealt with the question of who was the beneficial owner of Glen as shown in the Statutory Records of Glen that were maintained at his offices in Jersey. His evidence was as follows:

“With regard to the beneficial owner of Glen, I can only confirm what appears on the Statutory records and I can confirm that only Ramila Thakrar’s name appears on the Statutory Records.” (Footnote: ⁷²)

On 18 June 2001, Subhash wrote to Mr Shelton saying that he had: “been advised over the weekend that [Vijaya] has sold her shares”. The letter did not state to whom these shares had been sold, what the circumstances were that involved his being given this information and when it was contended that the actual sale had taken place.

On 22 June 2001, Mr Harjivan executed a general power of attorney prepared by Subhash appointing Subhash as his attorney. The significance of the date of the power of attorney appears from the cross-examination of Mr Shelton:

“Q. What evidence did you have in 2000 that Mr Harjivan was the shareholder?

A. In 2000 the evidence was, I have told you, that it came from Subhash Thakrar who held Mr Harjivan's power of attorney and also Mrs Radia’s.

Q. In 2000?

A. In 2000 I think it was, yes.

Q. You do understand - obviously you will not know this, Mr Shelton, but I will need to tell you, that there has been a search of powers of attorney granted to Subhash, and in particular, the powers of attorney granted by Mr Harjivan, and the earliest power of attorney that is in evidence and the only earliest power of attorney identified by Mr Harjivan in giving evidence at this trial is dated 22nd June 2001?

A. I am sorry, I thought it was 2000.

Q. So, are you saying that you are misrecollecting or that Subhash misinformed you in 2000?

A. Without looking at the correspondence, I cannot say.

Q. Did Subhash tell you in correspondence then in 2000?

A. I think he did.

Q. But you are not able at this minute to point to a letter, even among those that you brought to court, which makes that reference?

A. No, I did not bring those letters to court. I did not think that date was in dispute.

Q. Even though that in October of 2000, having looked at the statutory records, you produced a statement for use in court saying that in October 2000, Ramila was the shareholder?

A. Again, without looking at the documents that came from Subhash, I cannot be specific about the dates.

Q. So, it might not have been 2000 after all?

A. Well, if the documents - if the correspondence from Subhash says 2001, then it was 2001.

Q. So you have no knowledge independently of the correspondence?

A. I do not have any knowledge independent of the correspondence itself, no.” (Footnote: ⁷³)

On 25 January 2002, at Mr Shelton’s request, Subhash faxed to Mr Shelton a copy of Mr Harjivan’s passport, and enclosed copies of Mr Harjivan’s sworn power of attorney in Portuguese and English. These documents were required by Anchor Trust’s Compliance Department in order to allow it to formally recognise a new shareholder in Glen. Mr Shelton stated in evidence that, if he had been informed in March 2000 that Mr Harjivan had become the new owner of Glen, he would have required the same proof of Mr Harjivan’s identity as he in fact requested in January 2002. (Footnote: ⁷⁴)

On 25 March 2003, Subhash wrote to Mr Walter Callender at Glen’s management company Anchor Trust, because Mr Shelton was on holiday at the time, in connection with a loan that he wanted Teso to make to his son Rishi. Subhash stated that the purpose of this loan was to enable Rishi to purchase a flat out of monies which Subhash stated were “banked” with Teso by Vijaya. Subhash also stated that the loan should be interest-free, and not at the rate of 3% over base which Mr Callender had suggested, because such interest should be set off against the interest which Vijaya was owed and had not been paid by Teso “for the substantial shareholder’s loans which have been made over the last 14 years, i.e. from June 1989 to date”. In cross-examination, Mr Shelton agreed that that, if shareholder’s loans were still outstanding to Vijaya in March 2003, logic dictates that Subhash must have considered that Vijaya was still a shareholder of Glen and Teso in March 2003. (Footnote: ⁷⁵)

Mr Shelton attempted to reconcile the obvious contradiction contained in Subhash’s assertion in his letter sent in March 2003 with his other assertions that Vijaya ceased to be a shareholder in Glen some time previously by stating that his own understanding was that the shareholder’s loan referred to by Subhash was not Vijaya’s at all, that Vijaya had no such loan and Subhash was mistaken in what he had said in his letter. This extract from Mr Shelton’s evidence demonstrates not only how unreliable Subhash’s statements were that related to the share ownership of Glen but also how unreliable Mr Shelton’s evidence was on the same subject:

“Q. So all you can do is register your extreme surprise that in March of 2003, Subhash was referring to Mrs Radia as the beneficial owner of Glen?

A. I think I have said that many times, that I do not believe that that is correct.

Q. But your belief is simply based on other statements made by Subhash?

A. I have said that many times as well, yes.

Q. But not based on seeing the underlying share transfer?

A. There was no underlying share transfer as such.

Q. All right. I think that cannot quite be right, is it, because otherwise the original shareholder would remain the shareholder.

A. Well, these were bearer shares in Glen. So, whoever holds the bearer shares has title to them.

Q. And you, of course, would have no idea who at any time held the bearer shares?

A. I have never seen the bearer shares.

Q. Apart from what Subhash told you?

A. Exactly.” (Footnote: ⁷⁶)

On 16 April 2003, Mr Laffoley wrote an internal Anchor memorandum to Mr Callender concerning Glen in which he stated:

“Having reviewed and sorted the stats files comments are:-

…

In the Register of Members the last entry on folio 5 (V Radia) you have written that 499 shares were transferred to Mahendra Mr Harjivan on the 1^st June 2000. There is no record of the transfer having taken place i.e. Stock Transfer, Stock Certificate, Minutes. Also I cannot find current share certificates, not even copies and there’s no record of where they are being kept.

…

If V Radia is the shareholder (which is correct according to the Statutory Records) then we will need to get KYC [know your client information] immediately”.

The fact that Mr Laffoley was questioning the entry made by Mr Callender in Glen’s Register of Members suggests that the entry had only recently been made. It is significant that Mr Laffoley had been unable to find any documentary evidence of the transfer of Glen’s shares from Vijaya to Mr Harjivan in the records of Glen. Thus, so far as he was concerned, Vijaya remained the registered shareholder of 499 of Glen’s 500 issued shares.

On 29 June 2004 Subhash wrote to Ms Christine Barby of Balchan Management Limited with a copy of the letter being sent to Mr Shelton. The letter informed Ms Barby of Subhash’s wish to form two companies in the British Virgin Islands:

“for Mr M Mahendra shareholder in Glen … with a view to procuring air space at Damien Court and also purchase two flats in the same building to enable proper management of Glen …, and its assets in the United Kingdom for Mr M Mahendra and shareholder of Glen …”,

and enclosing:

“a copy of the Power of Attorney given to me to act as the attorney and an accountant for Mr M Mahendra in the United Kingdom”.

It is plain that Subhash’s references in this letter to “Mr M Mahendra” are references to Mr Harjivan’s son Mitesh and not to Mr Harjivan himself. Balchan Management Limited duly organised the formation of two BVI companies including Thornbridge Ltd and on 6 July 2004 Balchan Nominees Limited, the registered holder of the sole issued share in Thornbridge, executed a declaration of trust of its registered share in Thornbridge in favour of Mitesh.

On 30 June 2004 Subhash wrote a further letter to Ms Barby with a copy being sent to Mr Shelton headed “Formation of two companies for Mr M Mahendra shareholder in Glen”, and enclosing a BBVA bank statement and a gas bill “for Mr Mitesh Mahendra”. It follows that Mr Mitesh Mahendra and not Mr Harjivan was, in these communications, being held out by Subhash as the shareholder in Glen.

On 1 July 2004 Philip Evans, a Compliance Officer at Anchor Trust, had a telephone conversation with Subhash about Glen’s shares. Mr Evans’ file note of this conversation recorded Subhash as saying that “the bearer shares issued some time ago to Ramila and Vijaya are now being held on behalf of Mr Mahendra (Footnote: ⁷⁷) in the UK solicitors’ office. Therefore the shares although bearer can be in this case said to be in the hands and therefore the ownership of Mr Mahendra as of today”. A handwritten note on the file note states: “Updated. Taskforce 1/7/04”. According to Mr Shelton, Taskforce was the software system Anchor Trust used to record details of beneficial ownership and similar details. It appeared from this file note that 1 July 2004 was the date on which Mr Mitesh Mahendra was entered onto this system for the first time. (Footnote: ⁷⁸)

On 8 July 2004 Subhash wrote another letter to Mr Evans which he copied to Mr Shelton “Re: Glen International Limited – Mr M Mahendra” in which (a) he referred to Vijaya and Ramila as having “sold their shares in Glen in March 2002, which Barry Shelton is fully aware of”, (b) he requested “the bearer shares” of Glen and (c) he stated that these “are required for Mr M Mahendra [i.e. Mitesh] because he may wish to deal with them, as he sees fit”.

On 10 August 2004, after the hearing at the LVT at which the solicitor acting for the long leaseholders of 92 East Dulwich Road, Mrs Jennifer Israel, alleged that Glen, Teso and Mitesh were connected persons, Subhash wrote to Mr Shelton in the following terms:

“Re: 92 East Dulwich Road

It is imperative that Teso have a separate address to Glen to avoid any wrongful allegations or claims made in Courts, which are wrong. I have advised their solicitors that they are two separate legal entities with separate registrations, separate Company Incorporations in different Countries and separate Shareholders.

One is a Property investment Company and the other is like a Bank and lender and therefore, they cannot be connected Parties, as wrongly alleged by Jennifer Israel & Co, Solicitors.”

Mr Shelton accepted in cross examination that this letter was written by Subhash in reaction to the allegation made by Mrs Israel at the LVT hearing that Glen, Teso and Mitesh were connected persons and so as to ensure that this allegation would not be accepted by the LVT or any other tribunal since any such finding would be detrimental to Glen’s interest. (Footnote: ⁷⁹)

On 17 August 2004 Subhash wrote to Mr Shelton “Re: Bearer Shares – Glen”. In that letter he now gave the following confusing explanation as to the history of the shareholdings in Glen and the lack of a connection between the shareholdings in Glen and the shareholdings in Teso:

“Further to your telephone call to me today … I have confirmed that the bearer Shares were issued initially, and were previously held by [Vijaya], [Ramila] and their family …

In March 2000, they sold [Glen’s] Shares to Mr Harjivan and details of which were given to you. However, your Compliance Officer was making enquiries of me early this year, when I also gave the same information and explained that the bearer Mr Harjivan of Portugal held Shares. He was to issue new bearer shares and send them care of my Office address, which have not yet been sent. Therefore, your record of the Company and shares registration should be corrected, and properly dealt with now …

If the Shares are sold by the Shareholders overseas, then they do not need to concern Glen or if any details of selling considerations or how they have dealt with it, so long as they have been dealt with it properly themselves overseas …

Would you please therefore, confirm that your records are in order, and that there is also a Debenture in favour of [Teso], which is owned by separate family. There is no connection between the two Companies.”

In cross-examination, Mr Shelton confirmed that it was his belief that the shareholder of Glen and the shareholder of Teso was in fact one and the same person. His response to Subhash’s letter of 17 August 2004 is illuminating

“Q. … no doubt, having looked at this letter at the time it was sent to you and the suggestion that the shareholders in Teso and Glen were owned by separate families and Subhash's assertion that you agreed with him that that was the position, surely that is a matter that you would have taken up with Subhash?

A. Not necessarily.

Q. Could you explain why not?

A. Because I think as you pointed out, some of the letters are not strictly rational.

Q. Not strictly rational, did you say?

A. Yes.

Q. But this goes a little beyond that, does it not, because according to your understanding, the shareholder of Teso had to be the same as the shareholder of Glen, given the purpose for which Teso was created?

A. Subhash writes letters as he would like things to be rather than as they actually are. And I think you can appreciate that from a lot of the correspondence. To reply to every single sentence and paragraph and letter of Subhash's would just take an inordinate amount of time and probably he would change his mind again next week. So, you would have wasted an inordinate amount of time as well.” (Footnote: ⁸⁰)

On the same date, 17 August 2004, Subhash wrote to Mr Laffoley “Re: Shareholding Teso”. In this letter, he now gave a parallel and equally confusing explanation as to the history of the shareholdings in Teso and the lack of any connection between the shareholdings in Teso and the shareholdings in Glen:

“You will recall that the shareholding in the above Company has always been in the name of [Vijaya] and her family.

They also have a Debenture, and this was given to Teso from Glen in November 1996.

[Glen’s] shareholding changed in March 2000 …

I would like to make sure that there is no relationship between Glen and Teso … other than as a borrower and lender, and also that we should now have separate Offices address in Guernsey to avoid any confusion with Glen in Jersey.

I had a telephone call today from Barry Shelton, the Compliance Officer, and a Barrister, who were obviously confused and not looking at the correct information. So I thought it best to write to you to make sure that Teso’s affairs are not unnecessarily confused with those of Glen, because of the same office, and the recent concerns, which we have shown to you, due to the Debenture and 92 East Dulwich Road Court proceedings.

There are two separate families in two separate parts of the world, which separately owns each Company, and Teso does not operate or have any business in the UK, which is clearly known to all concerned.

…

I look forward to hearing from you as soon as possible regarding the Shareholding and if any Trustees agreements were wrongly drawn up by Anchor Trustees then they should be corrected with urgency.

I have to also advise the appropriate clients’ to make sure that their affairs in the United Kingdom are properly safeguarded … but we cannot have your records, which vary and do not properly record the proper beneficial owners/shareholdings and their current positions, as they must be reflected properly to ensure that no challenges are made by anybody including UK Courts.”

On 18 August 2004, Subhash wrote to Mr Evans about Teso stating that “[Vijaya] is the current owner of the Shares and all the relevant details are also with the Company. There is will be some changes, I am advised, but that she and family are considering, which shall be conveyed to you in due course”.

On the same date, 18 August 2004, Subhash wrote a further letter to Mr Evans about Glen in which he apologised for his earlier reference to Mitesh as the owner of the shares in Glen:

“I have looked at my letter of 8 July 2004, and certainly it was a typing error, because Mr Mahendra Mr Harjivan is the Shareholder and not Mr M Mahendra. I do apologise for that typing error by the Secretary.”

Subhash’s reference to Mr M Mahendra in his letter of 8 July 2004 was plainly not a typing error. In the 8 July 2004 letter, Subhash clearly meant to refer to Mitesh as the owner of the shares in Glen, as can be seen from his other contemporaneous correspondence (Footnote: ⁸¹).

On 24 September 2004, Subhash drafted a letter purportedly from Vijaya to Ms Marina Buckley at Anchor Trust “re Teso and Glen” instructing her “to arrange for the Share transfers to be effected urgently” as she had sold her shares and “received the full consideration for her shares”.

Mr Shelton. The correspondence and documents summarised in paragraphs 174 - 198 may be compared and contrasted with the following exchanges between myself and Mr Shelton and Counsel for Party 2 and Mr Shelton during Mr Shelton’s cross-examination:

General Evidence that the Same Person was the Beneficial Owner of Both Glen and Teso’s Shares

It is clear from the evidence that the genesis and purpose of Teso was such that whoever was the beneficial owner of Glen also had to be the beneficial owner of Teso. The purpose behind the original formation of Teso appears from the letter dated 5 December 1995 from Strachans, the company agents, who incorporated Teso, to Subhash:

“One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …”.

Mr Barby’s evidence, based upon what he had been told by Subhash, was that:

“Glen’s accounts show an increasing indebtedness expressed to be overseas … The historic debt accrued long before my involvement with Teso. I understand that it represents the assets and funds advanced to Glen by the beneficial owners over the years. I am informed by the Bankrupt [i.e. Subhash] that Teso was formed in or about 1995 in order to take security for that debt in favour of the beneficial owner who had funded Glen.”

Accordingly, the shareholder of Glen and the shareholder of Teso had, both logically and practicably, to be one and the same person, because it would not make sense for the owner of Glen to permit his shareholder’s loan held in Glen to accumulate in circumstances where the assets of Glen were subject to charges in favour of a company (Teso) owned by somebody else.

Mr Shelton’s evidence overall was that the shareholders in Glen and Teso were one and the same person for this very reason. Indeed, he characterised Subhash’s attempts in August and September 2004 to present Glen and Teso as independent companies, in response to an allegation made in enfranchisement proceedings brought against Glen that Glen and Teso were connected as “not strictly rational”. (Footnote: ⁸³)

Mr Harjivan’s Evidence Analysed

Introduction

The claiming Parties asserted that Mr Harjivan was not the beneficial owner of the shares in either Glen or Teso on five principal and related grounds:

In summary, the claiming Parties contended that it was clear from all the evidence that Mr Harjivan was not, never was and could not be the beneficial owner of the shares in Glen or Teso. They contended that his evidence that he purchased the shares in Glen and Teso from Vijaya and Ramila at some stage in the period 1998 - 2001 for a purchase price of £12 million was a piece of fiction that was dreamed up by Subhash. Mr Harjivan was merely the mouthpiece of this fiction, albeit, in repeating it, he actively connived in it. In short, they contended that there was no contract between Mr Harjivan as buyer and Vijaya and Ramila as seller for any of these shares. This was because there was no agreement relating to the sale and purchase of these shares, the shares were not Vijaya and Ramila’s to sell and Mr Harjivan did not become their beneficial owner because he did not pay to, or to the order of, Vijaya and Ramila, and Vijaya and Ramila did not receive from him, any consideration for the shares, let alone £12 million.

I will examine these strands of the claiming Parties’ case in turn.

Incredible and Unbelievable

The claiming Parties contended that what Mr Harjivan said in evidence, both written and oral, should be rejected because it was inherently incredible and self-contradictory.

Mr Harjivan’s evidence has about it the distinct air of unreality, make-believe and fantasy. It collapses altogether when set against the rest of the evidence and the surrounding facts and circumstances. I will analyse Mr Harjivan’s evidence under different headings.

Ramila and Vijaya. According to their evidence, in 1999-2000 neither Ramila nor Vijaya had any knowledge of Glen or Teso, or of their being or supposedly being the legal or beneficial owners of those companies, or of their supposedly having acquired the shares in those companies, or of the sale of the shares in those companies to Mr Harjivan, or of any supposed indebtedness on their part to third Parties overseas, or of any receipts of substantial sums of money overseas whether from Mr Harjivan or otherwise, or of the supposed discharge of their supposed indebtedness to third Parties overseas. I have already accepted the evidence of Ramila and Vijaya when they stated that they were not wealthy, indeed they are both in relatively modest circumstances. It is not credible that women of their modest financial circumstances could have built up indebtedness to third Parties of some £12 million or anywhere close to such a sum in 1999-2000.

Irreconcilable conflict between Subhash’s evidence in 2003 and Subhash/Mr Harjivan’s evidence in 2006. What Mr Harjivan now alleges about the involvement of Subhash in the sale and purchase of the shares in Glen and Teso is contradicted by the oral testimony given by Subhash at the original trial in 2003.

In the Points of Defence signed by Mr Harjivan, Subhash/Mr Harjivan maintained that Subhash had acted for Vijaya and Ramila on the sale of the shares as their attorney/accountant, had arranged for monies to be paid by Mr Harjivan to them or on their behalf and had kept them fully informed. In oral evidence, Mr Harjivan stated that the purchase of the shares in Glen and Teso had been suggested to him by Subhash on behalf of two of his clients whom he identified as Vijaya and Ramila; that Subhash had provided him with some financial and accounting documents relating to Glen and the debt owed by Glen; that, when he received the financial and accounting documents from Subhash, because he understood absolutely nothing about accounts, the first person he spoke to about these documents was Subhash; that the agreement for the sale and purchase of the shares was made following a telephone conversation between him and Subhash; and that Subhash was the person who informed him when he had made sufficient payments to complete his purchase of the companies.

This may be contrasted with Subhash’s oral testimony at trial no. 1:

“MR BARKER: Paragraph 2 (Footnote: ⁸⁴). That is a correct summary of the position as it was in 1999, was before and still is, presumably, Mr Thakrar, is that right?

A. No, sir.

Q. What has changed?

A. It was, sir, at the time.

Q. What has changed since 1999?

A. The company has been sold by the family, as I said yesterday.

Q. When was it sold?

A. In the year 2000 as I recall.

Q. What point in the year 2000, do you recall?

A. I do not have all the details, as I said yesterday.

Q. To whom was it sold?

A. I think, sir, I did say that yesterday. It was sold to a Portuguese family living in Mozambique, as I have been advised.

Q. Did you act at all in this transaction of sale, do you know whether there were monies received on the sale and if so, where they went?

A. I gave my answer yesterday. I do not know anything about that.” (Footnote: ⁸⁵)

Thus, in October 2003, Subhash stated on oath that the sale of Glen was simply something he had been told about but had no personal knowledge of. Now, in 2006, Mr Harjivan stated on oath that the person he dealt with in connection with the sale was Subhash, that he had had no direct dealings with the vendors and that his instructions as to when and how to pay the purchase price came from Subhash.

Mr Harjivan’s confused evidence about the purchase price of £12 million. Mr Harjivan clearly had no idea how the alleged purchase price of £12 million was made up. As was apparent both from his written evidence, despite having been prepared by Subhash, and his oral evidence, Mr Harjivan was wholly confused as to whether Vijaya and Ramila were supposed to have owed monies to Glen and Teso or to have been owed monies by Glen and Teso. Equally, he was wholly confused as to whether his alleged payments were used to discharge the indebtedness of Glen and Teso to Vijaya and Ramila or the indebtedness of Glen and Teso to third Parties or the indebtedness of Vijaya and Ramila to third Parties or all of these things at the same time. The confusion is symptomatic of evidence that had been made up. Furthermore, it was so vague as to suggest that it was devised in an attempt to gloss over the total lack of any documentary support for Mr Harjivan’s evidence and as a cover for the inability of Mr Harjivan or Subhash to identify any particular payments made or indebtedness repaid.

Implausibility of Mr Harjivan’s Evidence about the Circumstances of the Share Purchase. The circumstances in which Mr Harjivan says he came to purchase the shares in Glen and Teso are inherently implausible. He accepted in evidence that he had had no direct contact with Vijaya or Ramila or lawyers acting for Vijaya and Ramila in relation to the alleged sale. He also accepted that he had been given limited information about either company prior to agreeing to purchase their shares. All he claimed to have been shown were some accounting papers relating to Glen. These could not have assisted him in his decision as to whether or not to purchase the company because he knew absolutely nothing about accounts. His decision was an investment decision to provide him with an income for his retirement. He was not a wealthy man and he was unable to provide any documents to establish that his business would have earned him, or could have provided the means of paying, the about £6 – £8 million of the purchase price that he stated that he had provided from his own resources over an eighteen-month period between 1998 and 2000.

His decision to purchase Glen for £12 million was based solely upon what Subhash told him and some discussions he had with “other accountants in Portugal” However, Mr Harjivan could not remember even the name of the accounting firm in Portugal he said that he had sought advice from nor the names of any of the two or three individual accountants he said he had dealt with. Indeed, having initially stated in evidence that the accountants he consulted were “the accountants I usually deal with my business and do my accounts for my business in Lisbon, in Portugal”, upon being cross-examined to the effect that it was surprising that he could not remember the name of his regular accountants, Mr Harjivan promptly changed his story and said that in fact the accountants he consulted were different accountants. By the time he continued his evidence in October 2006, Mr Harjivan was able to come up with a name. However, this time it was to say that he had not in fact instructed a firm of accountants, but a retired accountant by the name of “Mr Cunha”. He could give no further details of this retired accountant except his name which is one of the most common of Portuguese surnames.

Further, according to Mr Harjivan’s oral testimony in July 2006, even his discussions with Subhash were limited. Apparently he had one telephone call with Subhash who sent him papers: “about some premium and some houses and also the debt that the company was owing”. Once he had received these papers, Mr Harjivan, without more, made preparations to pay the money for the companies. Mr Harjivan changed that evidence substantially when he returned to continue his evidence. In his fourth witness statement, Mr Harjivan stated that he had only decided to purchase Glen and Teso after a series of meetings and telephone conversations with Subhash about their purchase and Subhash’s advice and information played a crucial part in his decision to purchase these companies. When asked in cross-examination why he had not mentioned anything about this series of meetings and telephone conversations during his earlier evidence, all Mr Harjivan could say was that “these events were not fresh in my mind” at the time that he gave evidence in July, but “after that, I thought about it again and then all those events, all those facts, came back to mind”.

Mr Harjivan’s evidence also elaborated somewhat on the documents that Subhash had provided him with. He stated that Subhash had supplied him with “accounting documentation for the company”, “details of the debts owed by the company together with details of the accumulated interest on those debts” and “a schedule setting out all of the properties owned by the company … with the values that Subhash had provided”, and showed him all of this “in order that all of the information could be taken into account when arriving at a figure for the purchase of the company”; after being shown which Mr Harjivan “agreed to buy shares in the company for £12M; the company was Glen”. However, that evidence was obviously made up because Mr Harjivan had no idea where the documents he had just referred to were and displayed no understanding or insight as to what might have become of them since, as he explained, the documents had no real meaning or significance for him. Thus:

“Q. Where are these documents now?

A. I do not know where they are, I do not remember.

Q. Are these not very important documents?

A. They were just information about the company, about the properties, about the accounting related to the company; nothing else.

Q. As I understand it, that was the very basis upon which you agreed to pay £12 million for the companies.

A. Yes.

Q. It was your proof that the companies were actually worth £12 million?

A. I talked to some people in Lisbon about this information which was given to me, and then just decided to carry on talking, to carry on discussing the possibility.

Q. So these were very important documents, were they not?

A. I do not remember that these documents were very important; they were information about the company and statistics which were drawn up by Subhash.

Q. Is it your evidence that it was not important to you whether these papers were right or wrong?

A. I believe that the information on these documents was correct because Subhash was a person who was regarded as trustworthy and who had a high standing in the Indian community in London.

Q. So you agree with me that it was important that these documents should be correct?

A. Yes.

Q. They were important documents?

A. Yes.

Q. Surely you would have kept them in safe keeping somewhere?

A. I did not keep them, I do not know where they are, I did not keep them. I do not usually keep documents.

Q. When do you think you disposed of them?

A. I do not know whether I threw them away or whether I disposed of them or whether I have lost them, I do not remember.”

Improbability of the evidence as to the accounting documents seen prior to agreement to purchase. It is inconceivable that a business man seeking to provide for his retirement would have agreed to pay £12 million for a company based on the information Mr Harjivan claims to have been provided with. The only accounting documents of Glen that Mr Harjivan could have been shown by Subhash were accounts of Glen prepared prior to Mr Harjivan’s agreement to purchase the shares in Glen and the commencement of the payment of the purchase price in 1999. The accounts of Glen for the year ended 30 June 1997 show “creditors” standing at £3,185,057 and “overseas loan accounts” standing at £2,907,588. Glen failed to disclose accounts for 1998 or 1999. However, from the accounts for the year ended 31 March 2000 it appears that as at 31 March 1999 “creditors” stood at £4,184,577. The breakdown as between “overseas loan accounts” and mortgage accounts is missing, but even assuming the figure for mortgage accounts remained more or less the same as for 1997, the “overseas loan accounts” would have grown to no more than £3.8 million. Neither the 1997 figure nor the 1999 figure supports a purchase price of £12 million.

In cross-examination on 9 October 2006 about the accounting documents Mr Harjivan says he was shown by Subhash, Mr Harjivan answered that he could not remember being shown the balance sheet of Glen but did remember being shown the profit and loss account of Glen. However, all the profit and loss account of Glen for the year ended 30 June 1997 would have shown him was that the company had made a modest profit of £179,676 during the year but was carrying forward accumulated losses of £439,310. The position as at 31 March 1999 was that the company still had an adverse balance on profit and loss account of £253,889. By no stretch of the imagination could a company reasonably be valued at a price of £12 million on the basis of those figures.

Not having been able to produce any of the documents that he said Subhash had shown him, and having been taken to the accounting documents of Glen that did not support or justify the alleged purchase price of £12 million, Mr Harjivan arrived at the remarkable conclusion that his decision to spend £12 million of Glen “was taken purely on the basis of [his] trust of Subhash”, so that in fact he had not needed to see any documentation about the companies before deciding to purchase Glen and Teso. This evidence was given after Mr Harjivan had previously stated in evidence that Subhash was some one he hardly knew and with whom he did not have a close relationship or even what could be called a relationship at all.

Contract for sale. According to Mr Harjivan, there was no written agreement for the purchase of the shares in Glen and Teso, no instruction of solicitors by either vendor or purchaser to give advice or draw up the necessary documents in connection with the share sale, no warranties were given by the vendor to the purchaser concerning the accuracy of the financial or accounting information provided and no due diligence enquiries were made about either company. In other words, all the usual ingredients of a genuine share sale and purchase were absent.

Payments made by Mr Harjivan. Mr Harjivan was unable to produce any bank or other records of any of the payments he claimed to have paid out or any of the loans he claimed to have obtained in order to pay a total consideration of £12 million. Mr Harjivan’s explanation for this absence of documentation, namely that one of his three brothers “just probably threw the papers away”, is implausible and was precisely the same excuse he gave for not having any record of the repayment in October 2005 of an alleged loan he had been given by “friends of his” in order to make a £1.6 million investment in a project in India in October 2003 (Footnote: ⁸⁶).

Mr Harjivan could give no explanation as to why he had borrowed the amount of money to purchase the shares that he said he did, when according to other evidence given by him, he had only just sold his factory and business in Mozambique in 1997 for a total consideration of £½ million.

Mr Harjivan’s evidence that he did not keep any record of the payments he had made but, instead that he had just kept on paying what he was told to pay via “small papers” until Subhash told him he had paid enough is, incredible. Mr Harjivan’s evidence about his business suggested that it was a small outlet involved in the garment industry and it is inconceivable that such a businessman would have been prepared to conduct business in this way. Furthermore, Mr Harjivan was unable to produce even one example of the “small papers” to which he referred.

Mr Harjivan was unable to produce any documentary evidence, or to give any of the following details of his evidence, as to how he raised and paid the alleged purchase price of £12 million. This absence of supporting evidence covered a wide field including:

In short, Mr Harjivan could not give any details of any particular occasion when he had made or had caused to be made any payment in the general manner that he contended for in his evidence. This absence of details extended to names, addresses, dates, locations, amounts, nature of debts, method of transfer of funds, terms of loans, banks involved and methods of evading currency and other restrictions.

Mr Harjivan’s relative impecuniosity could not have supported the borrowings he alleged that he had made. Mr Harjivan confirmed that when he said that he had raised about 60% to 70% of the purchase price from money owed to him by companies overseas, he was referring to the commissions that he was owed for arranging business deals. However, as his evidence was that his rate of commission varied between 3% and 5% depending on the deal, this meant that he must have arranged some £200 million worth of deals between 1999 and 2000 in order to earn commissions totalling 60% to 70% of the purchase price since that part of the purchase price would have been between £7.2 - £8.4 million. Mr Harjivan could not “remember the numbers” but simply asserted that “there were a lot of businesses I made and I got lots of commission”. From a man who produced no documentary evidence whatsoever of his earnings or income from any stage of his working life, Mr Harjivan’s bare assertion that he turned over £200 million worth of deals in two years appears fanciful.

Mr Harjivan also alleged in cross-examination on 9 October 2006 that, as to the loans he had taken out to pay the balance of the purchase price of about £4 million, he had repaid the same between one and three years previously, from “commissions which were still owed to me”. However, that evidence was contradicted by Mr Harjivan’s own witness statement that he prepared just before resuming his evidence in October that “I have been completely retired for three or four years” and “I no longer take part in any overseas funding arrangements as I did previously when I was in business. There are no longer individuals who owe me money as they used to when I was directly involved in my own business projects”.

Mr Harjivan’s credibility was equally not assisted by his evidence that, at the same time as he was apparently borrowing millions of pounds from those he described as his “friends” to pay the purchase price of Glen and Teso, he was also lending money to others, which was thus available to him later when he needed to repay his “friends”.

The £12 million consideration for Glen and Teso. Mr Harjivan’s evidence was that he agreed to pay to Glen and Teso’s shareholders £12 million as the purchase price for the shares in those companies. He had agreed this price with Subhash as being the amount of money inclusive of interest that was owed by Glen and Teso to its shareholders. This figure for the outstanding indebtedness to Glen and Teso’s shareholders only first came into being long after the event of the alleged sale in December 2005 when Subhash was asked to assist Mr Shelton and Mr Barby to prepare the affidavits ordered by the court and the Points of Defence of Glen and Teso. For that purpose, Mr Narinder Sanghera, an employee of SKTL and previously an employee of SKT, prepared a schedule of the debt alleged to be owed by Glen to its owner that was then exhibited by Mr Barby to his second witness statement. (Footnote: ⁸⁷) Unlike the accounts of Glen, this schedule prepared by Mr Sanghera included “rolled-up” interest on the outstanding loans. There was no apparent reason for using compound interest for the first time. Mr Harjivan’s case was that he paid the sum of £12 million over a period of 1½ - 2 years in 1999 and 2000. The mid-point of that two-year period is 31 December 1999. If one looks on Mr Sanghera’s schedule for the cumulative debt figure stated to have been due on 31 December 1999, one sees the figure of £12,079,155.47. That would seem to match the alleged purchase price which Mr Harjivan said he had actually paid in 1999-2000.

However, December 2005 was the first time that a figure of £12 million appeared as the amount of the shareholder’s loans allegedly owed by Glen to its owner. Indebtedness of this amount had not featured earlier, particularly at the time when Mr Harjivan said that he had paid the purchase price. This can be seen from the evidence produced by Subhash himself. In the course of earlier legal proceedings in November 2001, Glen was required by the court to produce a letter of confirmation of the total debt secured by the Teso charge (Footnote: ⁸⁸). For that purpose Subhash faxed to Mr Laffoley of Glen “calculations of the outstanding Glen loans with interest added to 30 September 2002 and still accruing”. According to these calculations, the cumulative debt figure as at 31 December 1999, including compound interest, was £7,211,821.51. Yet at the time this figure was produced, according to the case now put forward by Subhash and Mr Harjivan, Mr Harjivan had allegedly already purchased Glen by completing payments totalling £12 million to discharge the outstanding shareholder’s loans. The figure for the purchase price of £12 million is, therefore, clearly a subsequent invention. Indeed, there is no evidence in any of the documents that have emanated from Glen or in any of its accounts as to what size any particular loan was, when these loans were advanced, what their purpose was, to what use the money loaned was put and how the shareholder obtained the loans in the first place. The fact that the precise figure representing the outstanding loans in 2000 was only first produced in December 2005 and that there is no evidence about the loans both cast serious doubt as to whether there had ever been any sale of Glen’s shares to Mr Harjivan.

No reference to the purchase price or the extinction of indebtedness. There is no mention of the purchase price of Glen and Teso or of the extinction of indebtedness in any documents contemporaneous to 1999 or 2000 of which disclosure has been given by the Parties, not even in documents saved on the hard discs of the computers recovered from the offices of SKT.

Similarity with Subhash’s Jagani lies. An alleged undocumented and unsubstantiated sale between families overseas of substantial property assets situated in the United Kingdom was one that Subhash had used previously and dishonestly used in order to explain how properties allegedly purchased from SPC by Jagani had ended up in the name of Ramila. The alleged sale between Vijaya and Mr Harjivan therefore has all the appearance of being a convenient fiction that Subhash sought and continues to seek to employ again. There would appear to have been no reality in there having been a sale of the shares in Glen and Teso to Mr Harjivan just as there was no reality in there having been a sale of the five properties by Jagani to Ramila.

Mr Harjivan’s lack of drawings out of Glen despite his impoverishment. Despite allegedly having become the owner of Glen and Teso in 2000, and having had to pay or raise some £12 million to that end, Mr Harjivan has drawn nothing, and has not sought to draw anything, from his companies over the last seven years since then, either by way of dividend payments or of repayments of his substantial alleged shareholder’s loan even though he says his financial position is such that, independently of the assets of Glen, he could not even afford legal representation at the trial no. 2. (Footnote: ⁸⁹)

Further, when Mitesh required £10,000 in July 2000, apparently to open a business, he had to approach Subhash who was described in the documents relating to this loan as his uncle, rather than obtain it from his own father. Again, in May 2001, when money was required for his children for the purpose, according to Mr Harjivan, to expand the shops and buy goods, Mr Harjivan could not provide the funds out of his own resources but had to approach Subhash to see whether he could raise the funds by way of a mortgage from a lending institution in England.

Mr Harjivan’s explanation for seeking relatively small sums by way of loan from or with the assistance of Subhash when he was the owner of a company with a property portfolio worth many millions of pounds was that he did not want to touch Glen’s money because there were lots of investments which had to be done in order to develop the businesses of Glen and Teso. However, when asked why in that case he did not offer some of the properties of Glen as security for a loan to his children, Mr Harjivan could only say that he did not remember. A further feature of this improbable explanation for the apparent improbability of Mr Harjivan owning such a valuable asset is shown by the fact that his loan application, supported only by the security Mr Harjivan and his children were able to provide, was declined owing to inadequate security being offered and Mr Harjivan apparently decided not to obtain alternative funding notwithstanding his apparent ability to obtain huge unsecured loans from family members and members of his community at will when he needed money in relation to Subhash business. (Footnote: ⁹⁰)

A further indication that Mr Harjivan was lying about his ownership of Glen arose when two different parts of his evidence were compared. The first part of this evidence was Mr Harjivan’s factually correct statement that Glen had not repaid any of the alleged shareholder’s loans. This fact was, however, wholly at odds with what Mr Harjivan said when trying to explain how he was able to repay the monies he had originally borrowed in order to pay the purchase price of Glen and Teso. These loans were repaid, he contended, by his taking further loans from yet other unnamed lenders using his shareholding in Glen as security. His evidence was as follows:

“so I asked money – I lend money from various people I trusted and obviously after that the company’s shares started – the value of the shares increased, and of course it became much, much easier for us to repay the debt then” (emphasis added) (Footnote: ⁹¹).

Harjivan’s lack of knowledge about significant facts about Glen. Despite allegedly having been the owner of Glen for some six years at the time he gave evidence, Mr Harjivan knew virtually nothing about what Glen owned or what it did when asked about it. A further example of Mr Harjivan’s ignorance about the company which he claimed to be the sole owner of occurred in 2005 when Mr Barby was ordered by the court to file and serve an affidavit disclosing the detail of Teso’s assets. Mr Barby had to go straight to Subhash and he prepared the required information from a schedule provided to him by Subhash even though he had personally met with Mr Harjivan for the first time just over three weeks previously on the occasion of Subhash’s daughter’s wedding for “due diligence” purposes connected with Mr Barby taking over management of Teso. Clearly, it would have been expected that Mr Barby would have consulted Mr Harjivan about Glen’s assets when preparing a court-ordered document yet it appears not to have occurred to Mr Barby to ask Mr Harjivan for information about the assets of the company of which Mr Harjivan was supposedly the sole owner (Footnote: ⁹²).

Not only that, but Mr Harjivan retained no file relating to Glen nor any documents sent to him by Glen at his home in Lisbon. The explanation given by Mr Harjivan in his exchange with me was as follows:

“Q. If a fax came to you in Lisbon, did you just throw it in the waste paper basket each time?

A. I kept it as long as it was necessary for me to think about them. Once I had dealt with them I would either throw them away, or if they were particularly important I would keep them.” (Footnote: ⁹³)

However, Mr Harjivan was unable to produce even one example of a “particularly important” document he had received from Glen or Teso.

Mr Harjivan could give no real or plausible explanation as to why he had thought it necessary in June 2001 to confer a general power of attorney upon a person who was, as he saw the situation, no more than Glen’s accountant. This was so even though Mr Harjivan was fully aware that he did not need to give a power of attorney to a firm of accountants simply to appoint them as his or his company’s accountants, because he had already appointed accountants for his business in Lisbon without it being considered necessary to grant them also a power of attorney and also because he was adamant that only Mr Shelton could decide matters affecting Glen because he was a director and Subhash was not. It followed that Mr Harjivan, on his view of Subhash’s role, had no need to grant a power of attorney to Subhash and that in reality, Subhash was taking a power of attorney from someone with nominal powers of management in order to allow himself to act as the real owner of Glen.

Harjivan’s conflicting evidence about ownership of Glen and Teso’s shares. Mr Harjivan’s evidence as to the ownership of the shares in Glen and Teso was self-contradictory, shifting, and inconsistent with other available evidence:

Harjivan’s lack of knowledge of Mrs Bhatt. Mr Harjivan alleged in oral testimony that he had appointed Mrs Avni Bhatt as a director of Glen on the recommendation of Mr Shelton. (Footnote: ⁹⁹) However, it is plain from the balance of the evidence that Mrs Bhatt was an acquaintance of Subhash and that he arranged for her appointment. Thus:

Harjivan’s reliance on documents forged by Subhash. Mr Harjivan sought to rely on two letters to Mr Shelton dated 6 and 9 December 2000 that purported to come from, and to have been signed by, Vijaya and Ramila respectively and which he exhibited to his second witness statement dated 6 September 2006. These letters, he contended, evidenced the instructions by these two sisters that they had given to Mr Shelton to arrange for their shares in Glen to be registered in the name of Mr Harjivan because according to Mr Harjivan, received “substantial shares consideration overseas”, (Footnote: ¹⁰³) they had. However, it is clear, and I have found, that these two letters were forgeries, probably executed by Subhash. Thus:

Mr Harjivan’s inability to recall any details of both substantial sale and purchase and lending and borrowing transactions worth millions of pounds in which he claimed to have participated and his further inability to produce any or any genuine supporting documentary evidence for any of these transactions also severely undermines his credibility. A particularly glaring example of what I find was a non-existent transaction about which Mr Harjivan and the Thakrar family all gave dishonest and lying evidence related to Mr Harjivan’s claim that in or about October 2003 he invested £1.6 million in a project in India through a firm of estate agents called Nilesh Exim for which purpose he borrowed £500,000 on a two-year loan which he repaid in or about October 2005. In support of that claim, on the last day of his evidence, Mr Harjivan produced a letter that he said he had asked Jagdish Tanna of Nilesh Exim to write concerning the project. (Footnote: ¹⁰⁸)

In answer to questions in cross-examination, Mr Harjivan’s evidence was that:

This evidence was so far-fetched as to be incapable of belief. It was particularly far-fetched for Mr Harjivan to suggest that it was credible that he had personal resources of £2 million in 2003 from which he was able to make an personal investment in the Indian project and as well as being able to provide a loan to the Thakrar family so they could also invest in the project. This suggestion related to a man whose personal financial circumstances were such that, according to him, in 1999 and 2000 he had had to take out loans to pay the bulk of the purchase price of £12 million for his shares in Glen and Teso. It also related to a man who, in 2001, had been unable to give or lend his children £90,000 in order for them to repay their existing loans and to have some funds to re-equip their shops and who in consequence had had to approach Subhash in an unsuccessful attempt to get him to raise the money in England. (Footnote: ¹¹⁰)

Dishonest Witness

Mr Harjivan was a wholly unreliable witness in that he had been proved to have lied on numerous occasions before and during the trial and had been schooled in what to say by Subhash, both before and after he appeared in court to give evidence in July 2006.

Mr Harjivan was dishonest in the evidence he gave as to how he prepared his points of defence dated 15 June 2006. When he first gave evidence, Mr Harjivan’s evidence consisted of a complete denial that Subhash had had anything to do with the preparation of this document. At that stage, Mr Harjivan was unrepresented. However, once legal assistance, including the assistance of counsel, was provided to Mr Harjivan by order of the court, with an associated order that that representation should be funded out of Glen’s resources, Mr Harjivan served a further witness statement which contained the frank admission that Subhash had in fact written the points of defence in their entirety. Mr Harjivan suggested, by way of explanation for his erroneous evidence, that he had prepared it when he was completely on his own save for the assistance given to him in Lisbon by his daughter who was both an English speaker and a Portuguese lawyer practising Portuguese law in Lisbon.

This was a very significant admission since Mr Harjivan’s original denial that Subhash had had anything to do with the contents of the points of defence was doggedly repeated at length and through a Portuguese interpreter when he initially gave evidence. Mr Harjivan did, however, continue to contend that the substance of his evidence and of the points of defence was correct. The points of defence was a very long document which was written in good English. It amounted to a combination of a pleading setting out Mr Harjivan’s defence, a full witness statement of his supporting evidence and a submission. Thus, the entirety of the incredible explanation of how Mr Harjivan came to be the beneficial owner of the entirety of Glen and Teso’s shares had been drafted by Subhash and Mr Harjivan’s evidence amounted to a repetition and confirmation of this explanation in the witness box. His lies as to how the statement had been drafted and his denial of Subhash’s involvement in that drafting process could only have been both deliberate and calculated. They were only withdrawn after Mr Harjivan had been advised by experienced counsel and an experienced litigator when helping him to draft the further witness statement that retracted his first explanation of how the points of defence had been prepared.

My finding that Mr Harjivan’s original evidence had not been given by mistake or under a misapprehension can be seen from these stark and clear statements of Mr Harjivan as to how the original document was prepared. The questioning was by me and was necessitated by the absence of any supporting documentation for any material part of his evidence and by the fact that Mr Harjivan was unrepresented at that stage. It was therefore necessary to question Mr Harjivan at some length in chief in a non-leading manner in order to get him to explain the context in which his evidence should be set and how the evidence was prepared. The relevant passages of his evidence read as follows:

“Q. Can you tell me how you prepared your statement and the Points of Defence?

A. These Points of defence were made in Lisbon. My daughter helped me, with a group of solicitors in Lisbon. The basis, the principal basis, in London was made with the help with my attorney, because she is also – she is also the accountant and would be able to help me with the papers.

Q. Who prepared the English in the document?

A. It was my daughter. We started doing – raising the points and doing the documents in Portuguese, and after that we had it translated for English.

Q. Who translated it?

A. It was my daughter and the group of solicitors working with her.

…

Q. There are 38 pages of the Points of defence. Where were those typed up?

A. It was typed up in Lisbon.

Q. By Mr Harjivan’s daughter?

A. Yes. She typed it but she had the help of a group of solicitors working with her.

…

Q. The documents are long and written in English. What did you do to check that the English document is true and was the evidence that you wished to give?

…

A. What I did was, a draft of the document was written in Portuguese first and after I read the document and after that I said, yes, this is correct and this is what I would like to be pointed.

Q. When the English document was produced, what does Mr Harjivan say to show that he believes the English document is a fair and correct translation of the document that he agreed to?

…

A. I have a notion of the English language, so I have no doubt that these documents are fairly translated from the Portuguese documents.” (Footnote: ¹¹¹)

This evidence suggests that Mr Harjivan’s understanding of English was good. His evidence as to his “notion of the English Language” shows that he accepted that he could understand English reasonably well since, otherwise, he could not have understood the points of defence. This conclusion is supported by Mr Shelton’s evidence that he never had any difficulty in both communicating with, and understanding, Mr Harjivan in English since Mr Shelton does not speak Portuguese. This conclusion provides support for my finding that Mr Harjivan was not confused when initially giving his evidence.

When initially cross-examined about the provenance of his points of defence, it was put to Mr Harjivan that a fair summary of the evidence he was giving was:

Thus:

“Q. Just to confirm, Mr Harjivan: is your evidence that the defence in English was drafted for you by S K Thakrar Limited?

A. No, it was not by them, we just used their own summary of events because we did not have the documents with us, so we prepared our own documents from their own summary.

Q. Let me put it this way, Mr Harjivan: it is right, is it not, that this document was prepared on your behalf with the assistance of S K Thakrar Limited?

A. No, the S K Thakrar just helped us to gather the documents that we needed to prepare our defence in Portugal because we did not know the laws in England. We needed information from them so we can gather the information to prepare the Defence in Portugal (Footnote: ¹¹²).”

Then, in his third witness statement, Mr Harjivan completely reversed his story and stated that:

Moreover, Mr Harjivan revealed when being cross-examined that he had no knowledge of much of the detail adduced in evidence by him that was contained in the points of defence document and which he had confirmed as being true in the witness box. Thus:

“Q. Mr Harjivan, all the people I have referred to and the litigation I have just referred to, you deal with at length in your defence?

A. Yes, I can only remember about the names of the lawyers that were representing my own interests. I really do not remember any other names or only the lawyers I spoke to. I am only concerned with the process that has been going on against myself and my companies, because I have not been well lately and I cannot really be worried about things that happened in the past, or things that happened that are not of matter to myself.

Q. So, although the people and the litigation are referred to in your defence, the people and the litigation I have just asked you about, you have no personal knowledge of any of them?

A. Yes, I just know about the contract we had from the lawyers in London regarding the process of transferring shares on my own companies. So these lawyers, the lawyers I spoke to in London I know about because we contacted them to get all the information, so at lease we could prepare our own process. Anything else, I really do not know about.” (Footnote: ¹¹³)

There is no excuse for these lies. Mr Harjivan sought to excuse them solely on the basis that he had, just before preparing the points of defence, lost the assistance of his English solicitors, Ross & Craig, who had come off the record due to non-payment of outstanding fees and of further money on account. However, whilst that may have been a reason for Mr Harjivan asking Subhash to help him prepare his points of defence, it was no justification at all for Mr Harjivan lying to the court that Subhash had not prepared it. Mr Harjivan was happy for the court and the Parties to proceed under the impression that the points of defence set out his case when he knew that he had little knowledge of that case and that the document only set out the case that Subhash wanted Mr Harjivan to put forward in Mr Harjivan’s name.

I infer that Mr Harjivan was prepared to lie on oath that he was concerned with the preparation of his points of defence and that Subhash had no involvement in their preparation in order to distance himself from Subhash and to hide the fact that Subhash was directly involved in their preparation. This inference is supported by Mr Harjivan’s attempts elsewhere in his evidence to portray his relationship with Subhash as a distant, commercial one (Footnote: ¹¹⁴).

Mr Harjivan also lied significantly in relation to the use of a post box in Mozambique namely PO Box 1127, Maputo. When Mr Harjivan and his son Mitesh each provided Subhash with a general power of attorney dated 22 June 2001, each provided as his address: “Maputo, Moçambique – postal code no. 1127”. When originally asked about that address by counsel for Party 4 on 13 July 2006, Mr Harjivan insisted that this address had always been his and his alone. He stated:

“Q. One question: in 2002 and 2003, was that also, or possibly instead of you, the address of Vijaya?

A. No, I do not think so because this postal code has always been mine, and if I had any contact with her – I really do not understand.

Q. As far as you are concerned, the answer is “no”?

A. I did not understand completely the question, but what I am saying is this has always been my own postal code.

Q. Postal box?

A. Postal box, yes. My postal box, and if had any contact with her through it, I may have, but it always belonged to me.

Q. I did not ask whether you used it; I asked whether that was also her address as well as yours or instead of yours in 2002 and 2003.

A. No, it always belonged to me and no body else. As far as I have always known, this is my own postal box and it never belonged to anyone else; if it was transferred to given to anyone else, I do not know. As far as I know it has always been mine.” (Footnote: ¹¹⁵)

Moreover, when first giving evidence, Mr Harjivan had stated unequivocally that Subhash had “nothing to do with” this postal box. (Footnote: ¹¹⁶)

However, when counsel for Party 4 asked Mr Harjivan on 3 October 2006 whether he shared that PO box address with any one, he replied:

“Yes … Subhash asked [me] – if any documents had to be sent to Vijaya in Mozambique, he asked the documents to be sent to the PO box … Because cheques were sent to her, she did not like the fact that cheques were being sent to her and then she asked the cheques to be sent to the PO box instead.” (Footnote: ¹¹⁷)

When counsel asked him why he had changed his story, Mr Harjivan said:

“At the time it was not clear to me what you were talking about. After we had the hearing at the court and I spoke to Subhash to find out what had happened, and then he explain to me that it had happened in this way and not in this other way.” (Footnote: ¹¹⁸)

Mr Harjivan also explained that it was Subhash who, in the week following Mr Harjivan first giving evidence and after Subhash had read a copy of the transcript of Day 8, initiated the conversation with Mr Harjivan and “explained” to Mr Harjivan “what was wrong in the transcription”. Despite having changed his evidence, on Subhash’s instructions, Mr Harjivan was unable to give any first-hand evidence that Vijaya had ever used the post box or that mail addressed to Vijaya was ever received at that post box. (Footnote: ¹¹⁹)

Mr Harjivan’s recollection of his own use of the post box was hesitant and confused. From that evidence, it was clear that Mr Harjivan had not used this post box for some years before 2002, albeit that it had been his address when he was resident in Mozambique. He had also clearly left Mozambique for good long before 2002. There was, indeed, no evidence that it was still an active address for Mr Harjivan or for anyone else nominated by him. Finally, Mr Harjivan was unable to give any satisfactory explanation as to why he had provided Subhash with a general power of attorney at all or why he had given as his current address this dormant post box address on that power of attorney. What is clear, however, is that Mr Harjivan had no notion, when first giving evidence, that this address was, or should be presented as being, associated with Vijaya.

Taking all his evidence together, Mr Harjivan can be seen to have told the following lies:

It is worth reflecting why Mr Harjivan lied in these ways. The most obvious explanation is that his original answer that he did not share the post box with anyone else contradicted in a significant respect Subhash’s case that post box 1127, Maputo, was Vijaya’s only postal address in 2002 and 2003. This was the address that Subhash had given to the solicitor who he was instructing should take over acting for Vijaya in 2002 in the Family Action. That solicitor was Mr Simon Clark of Kotecha & Co. Subhash’s instructions also included the information that Vijaya was permanently resident in Mozambique. Mr Clark was instructed by Subhash to send correspondence for the attention of Vijaya to this postal address.

When he gave these instructions to Mr Clark, Subhash lied in stating that he was acting for Vijaya as opposed to using her name for his own purposes, that Vijaya was a real rather than a nominal plaintiff in the claim being pursued, that she had a genuine claim against Party 4, that she lived in Mozambique in 2002 and that the PO box address he gave was her postal address. These lies were integral to Subhash’s and the other Thakrar Family’s dishonest conduct of the Family Action. They were also an integral part of his long-running dishonesty in relation to the ex-SPC properties and to the identity of the beneficial ownership of Glen and Teso.

Subhash would have been concerned that Mr Harjivan’s original answers about this postal address could completely undermine all of these dishonest actions since Mr Harjivan’s original evidence supported and corroborated Vijaya’s evidence that she had had no involvement with the properties transferred into her name or with the shares she was said to own beneficially or with the action brought in her name to enforce her apparent rights of beneficial property ownership. It is therefore highly material that Subhash appears to have persuaded Mr Harjivan to change his evidence relating to Vijaya’s involvement in the Mozambique post box. Subhash’s and Mr Harjivan’s actions in this respect support the conclusion that both were acting dishonestly in relation to their suggestion that Mr Harjivan was the beneficial owner of Glen and Teso’s shares.

Mr Harjivan also demonstrated that he was quite prepared to participate in dishonest and fraudulent actions when it suited his purposes. The first particular example of this was the instance when he was prepared to lend his name to, and participate in, a dishonest and fraudulent loan application made by him and his children through Subhash in 2001 for the purposes of obtaining an advance of £90,000 from a commercial loan company in England. For this purpose, he represented that he was being paid “20.000” a year by a business of his son Mitesh called Mitesh Mahendra Unipersonal Partnership.

In fact, the truth was that his son had not paid Mr Harjivan anything and Mr Harjivan had received no income from the business. Mr Harjivan could give no explanation for his actions. It is not even clear that Mr Harjivan recognised the dishonesty of his actions:

“Q. … This document says that you are earning 22,000. That is false, is it not?

A. At this moment I cannot say whether this is false or true.

Q. Were you earning 22,000, or any money, as manager of Universal Partnership?

A. I do not know how to explain, how I will explain. This was a document which was prepared in order to apply for a loan to see whether they could be successful in the application, nothing else.

Q. But the person who saw the document had to decide whether to give you a loan and that person wanted accurate information. That person would see that you were earning 22,000 a year from the Partnership. If you were not earning money from the Partnership, the information that that person would see would be false. Does it concern you that false information was given to the person who had to decide whether to give you a loan?

A. I cannot give you an answer.” (Footnote: ¹²⁰)

On his own evidence, Mr Harjivan stated that he was prepared to enter into loan arrangements that were unlawful transactions in Portugal or other jurisdictions where the loans were allegedly made. These loans to him were to enable him to provide 30 – 40% of the purchase price of £12m that he claimed to have paid Ramila and Vijaya for their shares in Glen. The evidence he gave about these loans is instructive. One of the crucial passages of this evidence was as follows:

“Q. … you say:

“The balance” [i.e. 30 – 40% of £12m] “was raised through personal loans provided on trust through my business associates in India and South Africa.”

A. Yes.

Q. And you say:

“These were people who were at all well known to each other and where trust was very high between us”.?

A.

There was a lot of trust amongst us, so we could just tell each other how much money should be paid.

Q. So these are people you know well?

A. I do not know all of them, but some of them I know. I cannot give their names.

Q. I see. So some of these people who did not even know you lent you money, is that right?

A. I do not know all of them, but some of them I know. I cannot give you their names.

Q. I see. So some people who did not even know you lent you money, is that right?

A. Because amongst us there is a lot of trust and we all work with that kind of process. So people will tell each other: “Can you lend money” or “Will you please lend money to someone”, and then they were a kind of society, because – Hindus, Hindus.

Q. Many of these people you know well, then?

A. I know them reasonably well. I do not know them very well, but reasonably well.

Q. But you cannot identify who they are.

A. I cannot give their names.

Q. Can you even remember who they were?

A. I do not remember, that is it.

Q. Can I ask, when Mr Harjivan says that the names are confidential, why is he unable to tell us the names because he says they are confidential?

A. Because most people who transfer money in that manner in Africa, they do not like to have their names divulged.

Q. Why not?

A. I do not know, but it is something to do with the development of their businesses.

Q. Is it anything to do with the fact that these are illegal transactions?

A. In most parts, the majority of times, yes.” (Footnote: ¹²¹)

On his own evidence, therefore, Mr Harjivan was prepared to borrow huge sums of money without providing any security, interest, repayment obligations or written evidence for the loans from people he either did not know or was only acquainted with in the knowledge that these loans were unlawful transactions in both Portugal and all other legal systems governing them. As a result of this unlawfulness and apparent dishonesty, Mr Harjivan refused to name any of those whom he alleged had unlawfully lent him sums in excess of £3 – 4m to enable him, on his case, to purchase Vijaya’s beneficial interest in Glen, an interest she did not have and a consideration which she never received.

This was an obvious and blatant example of Mr Harjivan’s dishonesty either inbeing prepared to enter into such obviously dishonest transactions or in being prepared to lie and, in lying, to invent dishonesty in order to seek to obtain a beneficial interest in shares worth many millions of pounds to which he is not entitled. It was also a particularly glaring example of Mr Harjivan’s inability to provide evidence that would corroborate his own evidence. Had he named the lenders, evidence from them could then have been sought and, if Mr Harjivan’s evidence was correct, this third Party evidence would significantly corroborate his evidence. If, however, that evidence was at variance with Mr Harjivan’s evidence, it would undermine if not destroy Mr Harjivan’s case. Thus, Mr Harjivan’s inability or refusal to provide the names of those he had borrowed money from strongly suggested that those lenders did not exist, that Mr Harjivan never borrowed the money at all and that his own evidence that he had borrowed this money was a lie.

The evidence now shows that Mr Harjivan agreed to the misuse of Glen’s assets to pay contributions towards his solicitors’ legal fees in April, May and June 2006 and that he lied to the court in July 2006 as to how he had provided funds to those solicitors. The payments to his then solicitors originated from an account held by Glen in London with the HSBC. This account was entirely under the control of Mukesh and Subhash and was used by them to receive rent payments and other similar income and the only people with authority to run the account were Mukesh and other members of the Thakrar family. Mr Shelton left this account entirely in the hands of the Thakrar family in London and it continued to be operated by Mukesh in breach of the terms of the 2005 freezing orders obtained by Party 1.

In all, £68,000 was paid out of the HSBC account to Mr Harjivan or to his order by Mukesh in this period in six separate payments. These payments were transferred into to Ross & Craig’s client’s account. In the case of the last five of these payments, they were first paid into an account operated by Subhash’s wife or daughter or by Mr Harjivan’s daughter. These payments were made as follows:

On 11 September 2006, Mr Harjivan disclosed to the claiming Parties a copy of a letter that appeared to be a letter that he had addressed and sent to Mukesh dated 5 June 2006. The letter stated:

“Dear Mr Thakrar

I, as the beneficial and legal shareholder of Glen International limited and also, a director of Glen International limited, I confirm my various instructions to you to use monies from Glen International limited, the monies required to pay our solicitors.

They are namely Decherts, or Ross & Craig, solicitors and any other.

I confirm that you have acted on my instructions and this expenditure is in the normal course of our business to protect our best interests as the Court Orders allow. Therefore, you will not be in breach of any Orders and you have been following the clients’ instructions which you are obliged to do.

If there is any argument, I shall deal with it personally as and when necessary. Please do not therefore be unduly concerned. I am sending a copy of this letter to Mr Barry Shelton, so he is aware of my various instruction (sic) on behalf of Glen International limited and myself as some of the monies will be debited to my own loan accounts. These loan accounts are with Glen International limited and Teso International Group limited, the lending company, which is my own also.

If you have any queries, please do not hesitate to contact me.”

This letter is dated with a date that is later than the date on which each of the payments made out of Glen’s account were paid out. It therefore provided, if at all, retrospective authority for those payments to be made.

On 8 June 2006, Ross & Craig ceased to act for Mr Harjivan having obtained the permission of the court to cease to act on the grounds that the firm had not been put in funds to enable it to continue to act for Mr Harjivan at the forthcoming trial no. 2.

In July 2006, Mr Harjivan was seeking from the court orders that would enable him to obtain funds to pay for his renewed legal representation from a Scott & Co. He had informed the court that he could not afford to instruct a lawyer in England and he had remained unrepresented following Ross & Craig ceasing to act. The court had indicated that it would direct Glen to provide funds for this purpose and to vary the freezing order to allow this but required Mr Harjivan first to disclose his means and the source of the funding that had allowed him to pay his previous solicitors. To that end, Mr Harjivan sent the court an e-mail, copied to all other Parties, on 22 July 2006 which stated:

“[I am pleased to note] that you will allow me to draw down funds from Glen and Teso, my and my family companies. This, I do need as my health is not good and I certainly need the support of my and my son’s companies, their directors and other advisers to be able to deal with the matters properly.

I have paid Ross & Craig very substantial fees, which were my private savings also and I have run out of them with my having to also live as a retired man and having been overseas on various business, family and religious reasons.”

On 28 July, the court directed that Mr Coney of counsel, instructed by Scott & Co, should represent Mr Harjivan funded out of funds to be provided by Glen. The court retained control on the limit of funds to be provided in this way. The court accepted Party 1’s submission that such payments were not payments being made in the ordinary course of Glen’s business but directed that the payments should none the less be made from Glen’s funds. This direction was made on the basis that Mr Harjivan was entitled to a fair hearing of his case that he was the beneficial owner of Glen and Teso’s shares and that Mr Harjivan should have access to legal assistance to ensure that his case was fully and fairly presented to the court. The only way this could be achieved was for him to be legally represented using funds provided by the company over which he claimed beneficially ownership and whose beneficial ownership was the principal issue to be resolved in the litigation.

On 9 October 2006, Mr Harjivan was questioned about his statement that he had paid Ross & Craig from his own private savings. He accepted that those payments had in fact been made by Glen and that he had instructed Subhash and Mukesh to arrange for these payments. He had, by the time he was questioned on 9 October 2006 about these payments, disclosed a copy of the letter that has already been set out which appears to have been dated 5 June 2006. The letter states that a copy of it was being sent to Mr Shelton; and Mr Harjivan stated in evidence that a copy had indeed been sent to him. Mr Shelton stated in evidence that he was unaware of the letter or its contents.

When further pressed, Mr Harjivan admitted that the e-mail sent to the court had been drafted by Subhash and then sent to him by email and that he could not himself explain why he erroneously stated, or rather why the e-mail drafted by Subhash and sent to him to send on to the court erroneously stated, that Ross & Craig had been paid out of Mr Harjivan’s own funds. He went on to say that one of the payments made to Ross & Craig for £9,000 had been paid out of Glen’s account with Mr Shelton’s knowledge and, by inference, permission. This line of questioning followed evidence from Mr Shelton about this payment. Mr Shelton had denied all knowledge of it. When Mr Shelton’s evidence was put to Mr Harjivan, he immediately retorted:

“A. I think Mr Shelton may have lied at that point for personal reasons, because he was also sent a £90,000 cheque to this same firm.

Q. 90,000?

A. 9,000, sorry.

Q. I am saying that Mr Shelton knew nothing about the money coming out of the HSBC account. That was his evidence. Was he lying?

A. I spoke to him on the phone. I spoke to him on the phone about the need for money to be paid, and if he said that he did not know about it, it is not my fault.

Q. You are aware, are you not, Mr Harjivan, that there is an injunction freezing Glen’s assets and that its assets can only be used in the ordinary course of its business.

…

A. I did not know anything about the freezing order.

Q. The freezing order was made in 2005.

A. I did not know about it. No body said anything about that to me.”

In the light of this evidence and the reasonable inferences made about it that arise when taking into account all the other evidence of Subhash, Mukesh and Mr Harjivan’s dishonesty, I make the following findings:

Overall, this episode demonstrates the lengths that Mr Harjivan was prepared to go to support Subhash’s dishonest behaviour, to mislead the court, to break court orders and to seek dishonestly to hide the fact that he had knowingly participated in such breaches.

Harjivan’s initial evidence. Until Mr Harjivan returned to the witness box for his second stint of evidence in October 2006, his evidence was to the effect that he hardly knew Subhash and only had a distant business relationship resulting solely from the purchase of Glen and Teso’s shares from two clients of Subhash and from his subsequent appointment of Subhash to act as his and both Glen and Teso’s accountant. This distant relationship was painted in a variety of ways in his evidence. By way of example:

Apparently, having been sent some documents from London, and having had a telephone conversation with Subhash, the agreement was reached over the telephone for Mr Harjivan to buy all the shares in both companies for £12 million. This significant contract was entered into in this way:

“Q. But where was the agreement reached? Was it by telephone, in London, in Tenerife, Lisbon or where?

A.

It was after telephone conversation, after that he send me the documents and I start preparing myself to pay the money.”

The documents he referred to merely consisted, according to his evidence, of some accountancy papers which he has since lost. There were no formal, or even informal, contract documents and the contract was concluded orally over the telephone.

Furthermore, on his own evidence on this occasion, Mr Harjivan had had no personal contact with either of the alleged vendors, Vijaya or Ramila, save for a passing social introduction at Bhiku’s funeral some years earlier, and no solicitors were involved for any Party. Mr Harjivan stated:

“Q. And that Mr Harjivan agreed with Subhash that if £12 million was paid, the Ramila and Vijaya shares would be transferred to him?

A. I did not agree with Mr Subhash. It was not with him, because he was the accountant of the company. I just asked him if the documents has been paid” (Footnote: ¹²³).

Mr Harjivan did not appear to have taken on board the fact that both “these two ladies” from whom he was buying the shares were Subhash’s cousins because, in his evidence, no mention was made of this fact. Despite the informal nature of the contract and his subsequent payments (as he alleged) totalling £12 million, no share certificates were provided to Mr Harjivan and, indeed, no share certificates were ever issued by Glen in his name for the shares in that company that he stated that he had bought.

Mr Harjivan summed up his overall relationship with Subhash in these answers in cross-examination:

“A. There was not a relationship as such. What happened was that Mr Subhash used to be the director of the companies, so if I had any doubt about the company or any matters of it, I would speak to him to clarify matters. That is all.

Contra indications in other evidence. The evidence in fact showed that Subhash and Mr Harjivan acted as if they had, and considered themselves to have had, an on-going close business relationship over many years which was coupled with a family relationship. The following are examples of situations in which either Mr Harjivan or Subhash acted as if, or asserted that, Mr Harjivan and Subhash were closely related and closely associated in business matters:

The contrast between Mr Harjivan’s evidence, prior to his return to the witness box in October 2006, and the other evidence relating to his relationship with Subhash could not have been greater. The reality was that Mr Harjivan was either a blood relative of Subhash’s or a member of the Thakrar family circle who had, for many years, had a close business and social relationship with him. It would appear that that relationship was not an equal one in that Mr Harjivan always appeared to be acting for Subhash and under his direction. Indeed, Mr Harjivan was unable to demonstrate that he had personally benefited in any way from his relationship with Subhash.

Harjivan’s subsequent acceptance of close relationship with Subhash. By the time he returned to give evidence for the second time, Mr Harjivan had dramatically changed his evidence. Mr Harjivan had initially said in his fourth witness statement that, at a meeting with Subhash prior to his purchase of those companies, Subhash had shown him a number of financial documents:

“… in order that all of the information could be taken into account when arriving at a figure for the purchase of the company.” (Footnote: ¹³¹)

When subsequently giving evidence, however, Mr Harjivan’s evidence was that he had not relied on these documents in deciding to purchase the shares in Glen but had, instead, relied on Subhash’s advice and on the trust he had in Subhash who had:

“… assured [him] that the situation of the company was good” (Footnote: ¹³²)

When it was put to him that he was asking the Court to believe that his decision to spend some £12 million on Glen and Teso was taken purely on the basis of the say-so and his trust of a person who, a few weeks earlier in July 2007 he had said in evidence he hardly knew, Mr Harjivan replied:

“If I said that, I do not remember now.” (Footnote: ¹³³)

He then proceeded to allege that between the time he had met Subhash at Bhiku’s funeral in 1986 and the time he had met Subhash in Tenerife in 1998 he had met Subhash:

“[o]n many occasions and many parties and many ceremonies in London.” (Footnote: ¹³⁴)

Conclusion – Subhash/Mr Harjivan relationship. I find that there was a close relationship between Subhash and Mr Harjivan and, indeed, the two were probably related. After all, Mr Harjivan first met Ramila at Ramila’s brother’s funeral in Lisbon in 1986. The fact that Mr Harjivan initially lied about this relationship when first giving evidence supports the conclusion that his evidence had been fabricated and, in this case, the fabrication was so obvious that, on returning to give evidence for the second of his two spells, he felt forced into giving the truth that there was a close relationship since this was by the time his second bout of evidence started, overwhelmingly obvious from all other evidence then available.

Even taken in isolation, as I have already shown, (Footnote: ¹³⁵) Mr Harjivan’s evidence about his supposed investment in India and his funding of the same was wholly unparticularised and unsupported by any cogent contemporaneous documentary evidence. But Mr Harjivan added to this evidence the further evidence that he had, at the same time as he had invested £1.6 million on his own behalf in the Indian project, lent an identical sum to the Thakrar family so that they also could invest in this project. This additional evidence appeared to have been given so as to appear to corroborate the evidence previously given to the Court of Appeal by the Thakrar family when opposing Party 4’s application for security for costs that at the same time as Mr Harjivan had invested £1.6 million on his own behalf in the Indian project he had lent an identical sum to the Thakrar family so that they also could invest in this project. This further evidence was also wholly unparticularised and unsupported by cogent contemporaneous documentary evidence.

Indeed, cogent contemporaneous documentary evidence was adduced which appeared to completely undermine Mr Harjivan’s evidence. This was Glen’s balance sheet for the period during which Mr Harjivan alleged that he had made the loan to the Thakrar family. This balance sheet is highly material because Mr Harjivan also gave evidence that he:

“… assigned the benefit of the loan to Glen in order that it could take security for the loan to the Thakrar family”. (Footnote: ¹³⁶)

The balance sheet of Glen for the year ended 31 March 2004 showed that the figure for “Debtors and Prepayments” actually went down from £1,131,187 to £965,920 over the year 31 March 2003 to 31 March 2004 notwithstanding that during this period (Footnote: ¹³⁷) Mr Harjivan said that he had made a loan of £1.6 million to the Thakrar family and assigned the benefit of that loan to Glen. Further, it was clear from note 7 to the accounts that £789,420 of the figure of £965,920 shown as due as at 31 March 2004 was attributable to a loan advance that was plainly not Mr Harjivan’s alleged loan to the Thakrar family. When this was drawn to Mr Harjivan’s attention in cross-examination, he changed his evidence and stated that the loan was not assigned to Glen but to Teso and sought to justify that evidence by drawing attention to a document headed “Summary of outstanding loans due to Teso as at 31^st March 2002, 2003, 2004, 2005” that he had exhibited to his second witness statement dated 6 September 2006. However, this document did not evidence any assignment of indebtedness to Mr Harjivan from the Thakrar family which he had assigned to Teso since it was no more than a spreadsheet that SKTL produced in December 2005 and it therefore provided no evidence of any liability of the Thakrar family to repay a loan to Teso. (Footnote: ¹³⁸)

Furthermore, Mr Harjivan’s explanation as to where he got the money from to make the loan of £1.6 million to the Thakrar family was the same unparticularised and unsubstantiated account as his account of where he got the money from for his own investment in the same project. His cross-examination on this part of his evidence that related to the alleged loan to the Thakrar family did elicit additional features which further highlighted the mendacious quality of his evidence and the improbability that this loan had ever been made or that any investment in this project had ever occurred. In particular:

Whilst giving evidence, I warned Mr Harjivan about how important it was for him to provide supporting evidence if he wanted the court to accept his unusual and unsubstantiated evidence. Thus:

“Q. Would you explain to Mr Harjivan that this is important evidence that he is giving and he is asking the court to accept evidence without any supporting documents or other evidence.

A. Could you first repeat that?

Q. Could you then say that I will be asked by the other Parties in the case not to accept any of this evidence because there is no supporting documents or other evidence; it is simply his word of mouth in the witness box. Then could you say could he tell me why he says that I should accept his evidence without there being any support at all?

A. I am afraid I do not have any documents at all to support my evidence.

Q. But he is also not prepared to name people who might be able to support his evidence. Could you say I am not going to insist that he names these people, it is for him to decide, but if he is not prepared to name them, I must take into account the fact that he is not prepared to name the other people when I consider whether I can accept his evidence or not.”

Mr Harjivan’s response was:

“I will try to find people who I might give you the names of. It will be difficult, but I will try”. (Footnote: ¹⁴¹)

In the event, when Mr Harjivan returned to give evidence on 9 October 2006, he was still unwilling and unable to provide the court with a single name.

Furthermore, Mr Harjivan was asked whether he had seen any document that recorded security for the loan provided to the Thakrar family, he replied:

“A. I have not seen any documents, but I know there has been recorded in the accounts.

Q. How does he know that?

A. Because I had a conversation about the subject and they showed me some accountancy papers that there was a debt.

Q. Who showed him?

A. It was at the SKT office.

INTERPRETER: And he said Mukesh.

Q. Mukesh showed him?

A. Yes. Mukesh showed me.

Q. I have not seen any document that shows that there is a mortgage in favour of Mr Harjivan as security for a loan that he has made to the Thakrar family for this investment.

A. No documents were prepared, but in the accountancy papers there is a record of it.

Q. So is it Mr Harjivan's understanding that there is a mortgage, but that the mortgage is not in a formal mortgage document, it is simply referred to in accountancy papers?

A. Yes.” (Footnote: ¹⁴²)

In his unprompted evidence immediately after these exchanges, Mr Harjivan stated that the paper he was shown by Mukesh was the balance sheet. Mr Harjivan was again warned of the difficulty he faced in persuading the court to accept his evidence on this topic:

“Q. Could we just explain again to Mr Harjivan: Mr Barby and Mr Shelton have explained to me what that document is. They said that all the information in that document came from Subhash. They did not have any knowledge themselves of that information. Does he understand that?

THE INTERPRETER: He says...

A. I am sure, although not absolutely sure, that these mortgages were set up by Roger Lafolley. This document might be here.

Q. If I can just go on. Subhash has said he will not give evidence to this court, so I have not heard from Subhash. There are no documents that we have seen from Glen that show this mortgage -- if I could just finish. So far as the court is concerned, the only evidence that we have, the only direct evidence we have of these mortgages, is from Mr Harjivan. Is there anything else that Mr Harjivan can tell me which can show that there was a mortgage?

A. I do not know, and I am not going to go through all the documents which have been filed with the court, but I might ask one of the Thakrar family members about it and see whether they can provide me with something.” (Footnote: ¹⁴³)

I conclude that Mr Harjivan did not loan any money to the Thakrar family in order to enable them to invest in an Indian investment project and did not assign the benefit of any loan that had been made by him to Glen or Teso. As counsel for Party 4 put it succinctly in cross-examination:

“… the position is this, is it not; when Subhash needs you or your family to lie for him you do it?

We do not do anything for him. Our family has nothing to do with his family.” (Footnote: ¹⁴⁴)

Overall, these passages of the evidence confirm the conclusion that I have already reached that there never was an agreement to invest in property development in India involving any member of the Thakrar family, that no such investment ever took place and that the Thakrar family and Mr Harjivan’s evidence on this topic was both erroneous and fabricated.

No Payment to Ramila or Vijaya

Ramila gave evidence that I have accepted as true in judgment no. 5 that she never paid anything to SPC or to anyone else for the properties, including the portfolio of properties, that were transferred into her name. She was liable to pay just under £1 million for the portfolio if the contract for this sale was genuine. Both Vijaya and Ramila gave evidence that no money changed hands when Vijaya was alleged to have bought Ramila’s shares in Glen although the 250 shares would have been worth several million pounds. Finally, Vijaya gave evidence that she received nothing despite Mr Harjivan’s evidence that he paid £12 million for her 499 shares in Glen.

There was no other evidence from any of the defending Parties about payment until Subhash elected to put in evidence in reply to additional evidence that they were permitted to admit after the record had been closed in relation to the paragraph 81 application concerning the administrators appointed by Glen’s directors in April 2007. Subhash’s evidence covered a wide field and he signed the statement and verified the truth of its contents on oath. This statement included this bold assertion about Vijaya and Ramila:

“The court cannot condone their [the two principal solicitors acting for Party 1 and the principal solicitor acting for Party 4] lies and tactics to stifle and/or dishonestly profit or cheat any litigants under any circumstances – self created by the claiming Parties presentations without clear factual documentary evidence but on Ramila and Vijaya’s creative hearsay and perjured evidence produced by Party 1 and Parties 2 to 4.”

Since this serious but unsubstantiated allegation had been made on oath by Subhash, I decided to ask Subhash before he was cross-examined on his witness statement in relation to matters concerning the Paragraph 81 application, having reminded him that he was giving evidence on oath, to elaborate on these allegations.

“JUDGE THORNTON: Are you prepared to sign that and, by signing it, you are confirming on oath that the contents of that document are true to your knowledge and belief?

MR SUBHASH THAKRAR: Yes, I do, because I can't go back on what I've said.

JUDGE THORNTON: Okay. Would you kindly sign it, then? (The document was signed).

MR SUBHASH THAKRAR: There you are.

JUDGE THORNTON: That whole document will now become an exhibit in the trial. If you would just keep it there. What I would like to ask you, Subhash, there is a large number of questions that I and the claiming Parties will have no doubt have, if every point that you raised were to be discussed, but I have ruled that you had the opportunity to be questioned on many matters, and you, as we now, on advice, claimed the privilege against self-incrimination, and I subsequently invited you and the claiming Parties whether, in the light of the change of the law, which no longer would enable you to claim that privilege, you would wish to submit yourself to questioning on all the issues in the case, and whether the claiming Parties would wish to question you. You elected not to submit yourself, and the claiming Parties elected not to apply again to cross-examine. In the light of that, it does not seem to me to be appropriate, merely because some of the matters are set out in your statement, to re-open the whole question of your cross-examination. But having said that, in this statement there is a particularly serious allegation, or evidence, rather, that you give. It's the passage where you're dealing with Ramila and I think Vijaya as well. You refer to, and I read:

"Ramila and Vijaya created hearsay and perjured evidence."

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: I would like to ask you if you would please summarise the principal parts of the evidence that you say are perjured.

MR SUBHASH THAKRAR: Yes, I can.

JUDGE THORNTON: Thank you.

MR SUBHASH THAKRAR: …

JUDGE THORNTON: Can I come back to the perjury that you say Ramila and Vijaya have committed. Do you say that it is perjury when Ramila and Vijaya say that they have never received any money in any currency in any country for the properties that are in this country or for the shares in either Glen or Teso? Is that a lie or is that true?

MR SUBHASH THAKRAR: It is a lie, and I say this again. They have had monies and there is some evidence that we were able to find, okay, we've given it to you.

JUDGE THORNTON: How much money do you say they have received?

MR SUBHASH THAKRAR: Over the years it's been quite a lot of money but I don't know the precise amounts because all the files have been seized and suppressed, we don't have the documents to show you. Whatever we could find if I could give them to you, there was in fact a cheque which Kiran sent to you of £10,000 which was – I can't remember the date, but it was for Shimeer's wedding and shows at the back, it's a repayment of the loan, and that was after in effect all the monies – after paying off all the debts and creditors.

JUDGE THORNTON: Are you able to say in approximate terms how much money Ramila has received over the years for the shares that were registered in her name in Glen?

MR SUBHASH THAKRAR: You will remember that she became a shareholder in 1989 when Glen was formed. She decided to get married in 1999, and she had only one share and everything from the family was transferred to Vijaya and she had one share, and in spite of that she got substantial monies for her wedding, holidays, and I can't remember how many thousands of pounds she has had, even tens of thousands of pounds. And also when she bought her house she had monies there, she had monies for her other properties which the family had. So over the years it's quite a considerable sum of money.

JUDGE THORNTON: All that money was paid for what?

MR SUBHASH THAKRAR: Well it was paid for, you know, various family needs that were there for the family: sisters and brothers married, educated.

JUDGE THORNTON: What was she selling in order to get that money?

MR SUBHASH THAKRAR: It was just in between monies she was getting.

JUDGE THORNTON: For what?

MR SUBHASH THAKRAR: Monies that were in need for the family, because monies were borrowed from various other Parties which had to be repaid. So the repayment of those --

JUDGE THORNTON: Originally she was registered as the shareholder of the shares in Glen.

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: And those shares were transferred into Vijaya's name.

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: Did Ramila get paid anything?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: For those shares?

MR SUBHASH THAKRAR: Yes, and also for the properties that were in her name for 15 months.

JUDGE THORNTON: What I'm asking you is the general evidence you've given as to money and properties that she received, were those paid to her in return for, and as the price for, the shares that were transferred from her name into Vijaya's name?

MR SUBHASH THAKRAR: Well, in the family, yes, there were, you know -- what's the word for it? -- set-offs between Ramila and Vijaya and Bhikhu and Nilesh and others.

JUDGE THORNTON: Are you able to provide a list of payments and properties that were paid to or made available to Ramila as the price that she was paid for agreeing to the shares being transferred from her name into Vijaya's name?

MR SUBHASH THAKRAR: There were several at times – I can't remember the dates, but between Nilesh, Shimeer and -- what's her name -- Ramila, for these accounts of various monies that were paid to her, and in fact there is a letter if I recall which is on Nilesh's litigation file which came from Vijaya setting up all the Amounts of monies that have been paid.

JUDGE THORNTON: There is a letter, is there?

MR SUBHASH THAKRAR: There was a letter, yes, and it was actually given to Jeremy Kleinfeld or (inaudible), I'm not sure what firm.

JUDGE THORNTON: No one in this courtroom has seen this letter.

MR SUBHASH THAKRAR: Let me say this to you, and I'm still on oath: there is still a hell of a lot of documentation which this court has not seen because they have been suppressed by my trustee. There are files that have also been suppressed by Ramila and David Gwillim having received them from other solicitors, and they continue deny having them. I am not a madman that I can say something to you on oath and say: look, there are letters, there is correspondence which was reduced in the Nilesh litigation, but there was a hell of a lot of hiccup about it. So what has happened to all of that? All the files and documentation? I'm grateful to Simon Barker [counsel for Party 4] for one thing, and that was the July 2001 the letter he gave to Kiran which you would know about.

JUDGE THORNTON: Are you able to put a value, an approximate value on the sum total of the monies and properties made over to Ramila over the years which you say represents payment to her for the shares?

MR SUBHASH THAKRAR: There was several hundred thousand pounds, you know, but for interest for what --

JUDGE THORNTON: Several hundred thousand?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: Did that reflect a fair value for the shares?

MR SUBHASH THAKRAR: In those days, yes.

JUDGE THORNTON: Who valued the shares?

MR SUBHASH THAKRAR: I think it was just off-the-cuff discussion and valuation --

JUDGE THORNTON: Discussion with whom?

MR SUBHASH THAKRAR: Between the families, and the alleged, Ramila, Vijaya and others in the family.

JUDGE THORNTON: So there were discussions with Ramila?

MR SUBHASH THAKRAR: Yes, in fact before they went to India she took all the documentation and share books and everything with her.

JUDGE THORNTON: What about Vijaya?

MR SUBHASH THAKRAR: Same way --

JUDGE THORNTON: Is Vijaya lying when she says she has received no money at all?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: How much has she received?

MR SUBHASH THAKRAR: Not as much as Ramila but she has definitely received monies.

JUDGE THORNTON: Mr Harjivan has informed the court that over the years he paid over £12 million for the shares in Glen.

MR SUBHASH THAKRAR: No, he hasn't said that to my knowledge.

JUDGE THORNTON: I'm not here to have a debate with you as to the evidence that I've received.

MR SUBHASH THAKRAR: Well my -- all I can say is it's my understanding that the total amount he had to pay was around £12 million for paying off all the loans and the shares and everything. That's what I've been aware of. It wasn't all for the shares.

JUDGE THORNTON: Well how much do you say that Vijaya has received for selling the shares in her name to Mr Harjivan?

MR SUBHASH THAKRAR: She was acting for the family as you know, so whatever the family gave her, including the monies that were given to her for various reasons. I can't precisely tell you, but as I said it was a substantial sum of money like it was for Ramila.

JUDGE THORNTON: When you say she was acting for the family what do you mean?

MR SUBHASH THAKRAR: She is a sort of, you know, non-resident, what you are, UK citizen. Her Siblings elected that she hold the shares for all of them, because Ramila was getting married and I think you probably know that when an Indian girl gets married she relinquishes all her rights from the family.

JUDGE THORNTON: Was Vijaya asked whether she would agree to hold shares in her name for other members of her family?

MR SUBHASH THAKRAR: Definitely, yes.

JUDGE THORNTON: Who asked her and when?

MR SUBHASH THAKRAR: She was asked by me, she was asked by Ramila --

JUDGE THORNTON: When?

MR SUBHASH THAKRAR: After Bhikhu's death, which would be about 1986, 1987, 1988. Something like that. And I remember, Vijaya came here in I think it was 1988 for a holiday.

JUDGE THORNTON: So in fact she wasn't the owner of the shares, she was merely holding the shares as a nominee for the Thakrar family?

MR SUBHASH THAKRAR: She was the owner for a certain extent but not the whole amount.

JUDGE THORNTON: Do you know which part of the shares she owned and which part she was holding for --

MR SUBHASH THAKRAR: As a child of Mrs Jeravim(?) Thakrar, my aunt, she was entitled to a share of the sum of money whatever the family decided.

JUDGE THORNTON: Which family?

MR SUBHASH THAKRAR: The Thakrar family.

JUDGE THORNTON: Her family?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: So who are the family members who formed the group that decided how much Vijaya was to --

MR SUBHASH THAKRAR: Before it was Ramila as the elder, then Bhikhu, who died in 1986, it was Vijaya, because Nilesh, Shimeer, Mivishah(?), Volshah and Neeta.

JUDGE THORNTON: Why was there a sale of shares from Ramila to Vijaya?

MR SUBHASH THAKRAR: Only because she did not trust her husband.

JUDGE THORNTON: Ramila?

MR SUBHASH THAKRAR: Yes, she didn't. And somewhere there was a letter I do recall saying, "I don't want him to know anything, I don't want him to know what the family has et cetera, and I am prepared to take a lie detector test, whatever you want, so I can be very sure what I'm telling you is the truth." And she did not trust even her brothers and sisters and that's why she did say please do not be influenced by her, saying she knew nothing, she can't speak English, she can't do this. That's a lot of lies to put it very simply in the best English language I can, because she went through businesses, she's done metric, which is O Levels, And please don't tell me that she doesn't understand English. How was she able to instruct Hardwick & Co solicitors?

JUDGE THORNTON: Do you know what part of the £12 million, paid by Mr Harjivan, represented payment for the shares, and what part represented repayment of loans?

MR SUBHASH THAKRAR: Repayment of loans were very substantial sum of money with interest recouped. I don't have the, what do you call it, the knowledge of the figures to, you know, give you the background. But the shares were not worth that much as the loans had to be repaid --

JUDGE THORNTON: Presumably Mr Harjivan was repaying loans as part of the consideration that he was providing Vijaya for buying the shares.

MR SUBHASH THAKRAR: Yes, Vijaya and the family.

JUDGE THORNTON: Now these loans. Who was the person or people who owed them money?

MR SUBHASH THAKRAR: There were lots of families. As I recall, there was the Ruparelia family, the Corteta family, there is one family, I can't remember their name, the Gokal family, I'm sorry, in South Africa and there was --

JUDGE THORNTON: And are all these members of Vijaya's family?

MR SUBHASH THAKRAR: No, they were friends of the family As well as people I knew also who had given them loans.

JUDGE THORNTON: But why would Mr Harjivan be repaying loans owed by people that you know as part of the money he was paying to buy Vijaya's shares?

MR SUBHASH THAKRAR: Because I had organised the loans for the family to have, you know, for them to buy properties and pay for various things, to sort of deal with the company's portfolio. And that was perfectly acceptable in, you know -- what's the word for it – agreed between all the Parties.

JUDGE THORNTON: But did Vijaya agree to it?

MR SUBHASH THAKRAR: Of course she did. She knew in 1988 and thereafter she was dealing with matters right up to I think 1995 -- when did her daughter get married? Just before then. I don't know the year she got married.”

A little later in his evidence, Subhash asserted that Vijaya had received small sums of money to pay for her children’s education and to pay for other living expenses that, in all totalled less than £100,000 over many years. There was no substantiation of these sums and no basis for this evidence to begin to undermine Vijaya’s patently honest and independently corroborated evidence.

At the conclusion of this part of his evidence, I asked Subhash why he had stated in evidence at trial no. 1 that he did not know who had bought Glen when in fact he knew perfectly well that it was Mr Harjivan. Subhash then lied since he obviously had no means of satisfactorily explaining the blatant lie he had told during trial no. 1. He stated:

“Q. Is there any reason why you didn’t identify the Portuguese family?

Subhash was clearly caught out by this crucial question and his bluster and lack of any coherent or credible explanation for what was, on the face of it, a clearly identified and blatant lie given during his cross-examination at trial no. 1 speaks volumes as to the dishonesty in relation to Glen, Mr Harjivan and his conduct throughout the Thakrar Litigation particularly in connection with both Ramila and Vijaya.

The summary of this evidence is as follows:

The day after Subhash had given evidence, he sent the court an e-mail which read as follows:

“Dear Judge,

I enclose two Schedules of monies given to Mrs. Vijaya Radia and Ramila which will assist you to appreciate sums of monies that have been taken by the two members of the family.

In addition, Nilesh has had substantial sums of monies also with the properties which are currently valued at £3m. The education and marriage costs of Shimeer, Nimisha, Neeta were also paid out of the family trust monies and other monies. The details of all these were contained in files and accounts agreed between the Parties as we recall. The Trustee has taken everything and you need to make very firm Orders if you wish to see the evidence to support these two Schedules and monies given to the members Thakrar family.

 No doubt, there will be arguments and further discussions arising. I am sorry that I was not prepared for these figures until I sat down and discussed with others to be reminded of the sums.”

The enclosed schedule listed 16 different items paid to Ramila against each of which was a rounded lump sum. The total of these items totalled out at £968,400. For Vijaya, there were 11 items which totalled £347,200.

Unsurprisingly, Ramila and Vijaya, through their brother Shimeer who acted as their representative and, in Ramila’s case, also acted as her McKenzie friend, submitted a short and somewhat outraged submission in reply to this late and highly contentious evidence and submission. This reply stated:

“The 2 schedules sent by Subhash with his e-mail of 26/9/07 timed 16.11 are totally incorrect and not supported with any documentation. All figures are more lies and Subhash is unable to substantiate any figures on these schedules. In his last paragraph he says " I am sorry that I was not prepared for these figures until I sat down and discussed with others to be reminded of the sums" - how can Subhash not be prepared for these substantial sums if they were correct. He obviously wanted more time to create these unsupported schedules just like he has created many other documents in the past (for just one example please see Subhash's evidence given on 24/9/07 with regards to minutes of meetings that he had created without meetings actually taking place). More of these lies would have become apparent if he had given evidence during the fact finding stage of the trial.

The other reason why Subhash could not remember these figures is simply because he did not want any follow up questions from the learned Judge and any other claiming Parties. Subhash is clearly hiding behind e-mails. Ramila & Vijaya request the Judge not to take the e-mail and these 2 schedules as evidence from Subhash as he has no proof and has not been questioned.

The last paragraph of Subhash's e-mail below says "No doubt, there will be arguments and further discussions arising" - This clearly shows that Subhash has doubt in his figures as they are incorrect and made up.

Reading Subhash's evidence of 24/9/07 clearly demonstrates lies after lies.”

This response drew an immediate, infuriated and intemperate response from Subhash. This e-mail came as no surprise since Subhash had, in the weeks prior to my handing down judgment following the close of the record, bombarded the court and the Parties with a series of e-mails in like vein to this one. The relevant parts of Subhash’s response to Shimeer’s e-mail were as follows:

“I have expressed in my earlier e-mail that [Ramila] and [Vijaya] with Shimeer must attend the Court and be cross-examined on Oath. They must give Affidavits also. It is not sufficient for an e-mail sent today 29 September 2007 at 16:43 to “respond” to you. It goes no where to disprove and they do not deny the sums given as I note. The style of writing by Shimeer is not his as I do know and I have helped him in various other matters of family and Solicitors correspondence on Ramila, Nilesh litigation. So please do not be misled that he is capable to deal with all issues or write such an e-mail. I would like him also to produce the recent telephone bills that he has spoken indeed to Vijaya in Kisumu last week and those will be available to him or RSB. Would you please order for him to come to the Court because I am sure that Vijaya will not be able to deal with the matters so quickly in a way that you are being misled to believe. I do not believe Shimeer at all or his stories, so put him to strict proof, please.

 I am more than happy for all the family and client Solicitors files and documentation to be produced to the Courts by Mrs. Shirley Jackson and Mr David Gwillim, which will show what I have stated and what I have recalled to be factual. “If everything I am alleged to be saying is “totally incorrect and not supported with any documentation”, than there will be no hesitation in Claiming Parties 5 and 6 introducing all the original documentation to the Court to disprove me. I challenge them all to do so. Are they saying that there were no legal costs paid for Ramila and Vijaya, when Solicitors were acting, they would not have worked without funds? Are they saying that monies did not come to them from Nilesh’s settlement of £75,000, are they saying that £75,000 or more did not come from 47 Birbeck Road, Sidcup Sale, and lot more which I have stated. If the files were not suppressed by the Trustee and Mr Gwillim I will be able to prove those figures without any hesitation. Shimeer also has copy documents which he kept himself for Ramila and Vijaya. If the figures and what I have stated are lies and I am unable to substantiate it because of the seizure of the documents and files, than please Order the matters and the Police to investigate the matters fully with the Solicitors who had acted also to recollect or produce documentation they have or have given to Mr David Gwillim, Vijaya, Ramila or Shimeer or any other Solicitors who have requested them of them last year. Ask them to state what and where they are held, please.”

My conclusions about this additional evidence, commentary and vituperation provided at a late stage of the trial by Subhash in the guise of responding to evidence that he had been the driving force behind the decision to place Glen in administration and had provided or procured the necessary funds to instruct the professional administrators to agree to their appointment are as follows:

If there ever had been any documents evidencing these payments, they would have surfaced in the search and seizure of documents undertaken pursuant to the two warrants obtained by Party 1 in Subhash’s bankruptcy proceedings and on discovery from Parties 8 – 14. It is clear that no documents have been suppressed by Parties 1 – 4, as alleged by Subhash and the documents he alleges exist which substantiate these payments, I am satisfied, have never existed. In short, save for payments out of the Jayaben fund and some small payments for family purposes, no payments alleged by Subhash as having been made to or for Ramila and Vijaya were made. The payments relied on were made by or on behalf of Subhash for his own purposes or were never made at all.

The failure of any defending Party or Mr Harjivan to have made any attempt to obtain substantiating evidence and Subhash’s failure to allow himself to be cross-examined about these payments or about anything else connected with Glen, Mr Harjivan, Ramila or Vijaya eliminate any remaining credibility with regard to Subhash’s evidence that about these payments.

Subhash’s evidence is wholly inconsistent with any other evidence adduced in the trial save, in part, with Mr Harjivan’s evidence which I have already rejected in its entirety as being a combination of lies, fantasy and half-hearted attempts to establish his hopeless and dishonest case.

A full and careful reading of the transcript of Subhash’s evidence and his follow-up e-mail that I have already set out above show that his evidence is literally unbelievable and was fed by a combination of his dishonesty and his fantasising about himself as a man of integrity, honesty and plain dealing. The evidence is that of a Walter Mitty character.

In short, Subhash is lying in relation to all evidence about these payments. No payments of the kind alleged were made to or on behalf of either Ramila or Vijaya.

Ramila and Vijaya never received any money from any source in any country that represented or formed part of any consideration paid for the acquisition of shares in Glen or Teso from any person or company. Their evidence remains both honest and credible and I both accept that evidence and reject Subhash’s in its entirety in relation to payments made to or for shares in Glen and Teso.

Subhash Always Acted as Beneficial owner of Glen and Teso

Subhash’s answer in the many documents examined during the trial to questions about his role or status in the affairs of Glen and Teso was that he was acting under a power of attorney for the beneficial owner, in other words he was acting as the attorney of Ramila, Vijaya or Mr Harjivan as the case might be. He sometimes held himself out as their accountant. Thus, it was necessary to examine the circumstances and background to the innumerable separate instances when he was acting, purportedly in this agency role since he did not give evidence, save on the last day of the trial in limited circumstances (Footnote: ¹⁴⁷). Thus, the principal way in which I have had to decide whether Subhash was the beneficial owner of Glen and Teso’s shares has had to be by examining all the instances evidenced at the trial of his actions and considering whether each separately and all together are capable of being explained as the actions of an agent for the beneficial owner of the shares in, and hence of, these companies or whether they can only be explained as the actions of the beneficial owner himself. There were, however, many significant actions of Subhash which could be seen only to have been capable of being explained as the actions of someone who was, who was holding himself out to be and who considered himself to be the beneficial owner of the shares. I will address these particular actions and statements in this section of the judgment.

The actions of Subhash in relation to every aspect of Glen and Teso’s activities were only consistent with Subhash being the beneficial owner of both Glen and Teso and, particularly when considered in the round, were wholly inconsistent with them being the acts of Subhash acting as an attorney and agent for some other beneficial owner. Equally, the actions of Mr Shelton in relation to every aspect of Glen’s activities were only consistent with his acting under the direct instructions of Subhash and unquestioningly following those instructions whilst exercising no independent decision-making or management function of his own and where wholly inconsistent with his being and acting as a working director of Glen and taking his own management decisions on its behalf. The role of Mr Barby as a director of Teso was equally obviously that of a functionary acting exclusively on behalf of that company’s beneficial owner.

Original decision to form Glen. Subhash throughout the original trial tried to distance himself from Glen or any knowledge as to the affairs of Glen. Thus Subhash stated at the original trial that it was Ramila’s solicitor, Mr Roger Smith of Claremont Haynes, who advised him that Ramila, because she was resident abroad, should form an offshore company to shield her from UK inheritance tax. As is now known from the contemporaneous correspondence that was not disclosed at the original trial but was obtained as a result of the search of the premises of SKT under the powers of the search and seizure warrant obtained by Subhash’s Trustee, this idea in fact emanated from Subhash himself. Thus in a letter dated 31 May 1989 from Mr Smith to Mr Anthony Evered of Strachans, Mr Smith stated:

“in order to avoid the payment of inheritance tax in England should our client die, her accountants have proposed that she should arrange for the formation of a company in Jersey and that she should sell the properties in England to that Company in return for shares to be allotted to her in the Jersey company … The accountants in question (Messrs S.K. Thakrar & Co …) have instructed us to contact you to enquire whether you are able to assist …”

Subhash responded to the contents of this letter in his letter to Mr Smith dated 2 June 1989, in which he said:

“Thank you for your letter of 31^st May 1989, together with the copy of your letter to Anthony Evered of Strachans in Jersey.

What you have stated is perfectly correct, and I have cleared this matter with my client over the telephone.

All I would say is that her sister, Miss Vijaya Thakrar, is also to be a shareholder in the Company to be acquired in Jersey.”

Of course, Subhash had not cleared anything to do with the formation of Glen with either Ramila or Vijaya over the telephone or by any other means. He had not discussed the formation of Glen with anybody. He took the unilateral decision to form Glen and then stated that this decision was taken on the instructions of two clients who were not clients at all for any purpose connected with Glen, its formation or the properties transferred into Glen’s name following its formation.

Instructions to solicitors to act for Glen in the original portfolio purchase. It was Subhash acting without consultation with and on his own who arranged for Claremont Haynes to be instructed, purportedly on behalf of Ramila, to act on the purchase of SPC’s property portfolio, and who had arranged for the memorandum of sale to be signed by Neil and Kenneth, and who had sent a copy of the same to Claremont Haynes.

Execution of Transfer of property portfolio. Subhash executed the Transfer dated 25 March 1988 whereby SPC’s property portfolio was transferred to Ramila and also the agreement dated 30 March 1990 whereby Ramila agreed to transfer the bulk of the ex-SPC properties unsold as at that date to Glen. Since Ramila had not authorised Subhash to execute these documents, had not consciously provided him with authority to acquire property for herself, did not ratify this acquisition and was not accounted to by Subhash for this property and knew nothing about this acquisition before it took place, at the time it was executed or subsequently, these acts of ownership by Subhash are only capable of being the acts of Subhash as purchaser acquiring beneficial ownership in the property using the name of another as his nominee.

Obtaining fresh powers of attorney from Vijaya and Ramila. Prior to arranging in July 1989 for the issue of 250 shares, being half of the shares to be issued, in Glen to Vijaya, Subhash procured Vijaya, on a rare visit by her to England in September 1988, to sign a power of attorney in his favour. Further, prior to executing the agreement to sell the ex-SPC properties to Glen, Subhash appears to have obtained a further power of attorney from Ramila dated 15 March 1990. Ramila had no recollection of having signed this document on that date but it is not necessary to reach a conclusion as to whether it was a forgery or not. In both Ramila and Vijaya’s case, such power of attorney as was signed was not signed with either being conscious at any time that it was to be used for the purpose of acquiring properties or owning shares. Subhash’s only purpose in obtaining these fresh powers of attorney and then using them unilaterally without reference to Ramila and Vijaya or anyone else was to enable him to acquire the beneficial ownership of both the properties and the shares in question for himself using the names of others as his nominees.

Glen’s formation. Subhash was responsible for the formation of Glen and for appointing Strachans, a firm of Chartered Accountants based in Jersey, to provide administration services for Glen, including signing Strachans’ standard indemnity, purportedly as Ramila’s attorney, whereby he committed Ramila to an open-ended liability to indemnify Strachans against any loss arising out of its administration of Glen. Without her express authority to commit herself in this way, Subhash could only have been acting on his own behalf using Ramila’s name as his nominee.

Glen’s objects only consistent with Subhash being its beneficial owner. Glen’s only rationale was to hold the ex-SPC properties in England as a non-resident company with an overseas shareholder. It did not trade and its nominal directors, secretary and administration were provided for a fee by service companies based in Jersey. These companies were initially Strachans and subsequently Mr Shelton’s company. (Footnote: ¹⁴⁸) Neither Ramila not Vijaya was ever appointed a director of Glen. These arrangements were made by Subhash without reference to anyone else and, again, can only have taken effect in law as arrangements made by, for and on behalf of the beneficial owner of Glen for the purpose of giving effect to that owner’s wishes and intentions.

Ramila’s move to the United Kingdom. When Ramila became resident in the United Kingdom in 1990, Glen was not wound up as it would have been if she had been its beneficial owner as there would have no longer been any tax advantage for Ramila in having the ex-SPC properties vested in an overseas company. Instead, the shares in Glen were simply transferred to Vijaya. Only Subhash appears to have been aware of this alleged transfer and it was brought about, if it occurred at all, by Subhash. The transfer of shares was unknown to either Ramila or Vijaya and this transfer, in these circumstances, can only be explained on the basis of its having been made by the beneficial owner who, for his own purposes, was changing the nominee holding in some of the share he owned beneficially from one name to another.

Teso’s formation. It was entirely Subhash’s idea to create a further overseas company in order to take a charge over the properties held by Glen as device to deter third Party claims against Glen. Subhash instructed Strachans to form such a company as can be seen from Mr de Figueiredo’s letter to Subhash dated 5 December 1995:

“One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …”.

This action can only be explained as being a device thought up and implemented by the beneficial owner of Glen in order to achieve a dishonest vehicle to thwart bona fide claims against Glen and its assets. Clearly, that beneficial owner could only have been Subhash.

Strachans’ dismissal by Subhash and the real reason for this. It was Subhash who in December 1996 dismissed Strachans as the corporate manager of the administration of Glen and Teso and who appointed Mr Shelton and his companies in their place. (Footnote: ¹⁴⁹) The reason given by Strachans for their removal by Subhash, which they set out in a letter to him dated 7 January 1997, was that Subhash considered that they were charging unnecessary fees in running the company which it was Subhash’s prerogative to run. Subhash’s role was described in terms that can only be explained as his acting as beneficial owner:

“ … What you have difficulty in grasping is that we are the Directors of these companies and as such need to know what is going on but, more importantly, are seen to be the people carrying out the actions. You see us simply as an office you correspond to or draft letters for, and do not take seriously our role. Bearing in mind the activities of the company, your involvement and its financial background I think you are taking an unwarranted risk with regard to the U.K. Revenue. In fact for the future I believe the Directors offshore should have more control and you purely perform an accounting function not a decision making function as you are inclined to do.”

It is clear that Subhash had engineered Strachans’ dismissal so as to make it look like a dispute about their professional fees and charges. In fact, it appears that Subhash was not finding it as easy as he would want to exercise proprietorial control over his company and wanted Strachans’ removal for that reason. Had anyone other than Subhash been the beneficial owner of Glen, that person would have had to be consulted by Subhash first both as to the decision to dismiss the professional manager of his company and as to the identity and terms of appointment of the successor manager.

Subhash’s terms of appointment when appointing Mr Shelton as replacement manager. Subhash made it clear to Mr Shelton when he appointed him to replace Strachans that Subhash would take all the material decisions about Glen and Mr Shelton’s role would be to implement those decisions and, in order to provide a veneer of respectability, to front any discussions involving Glen and the Inland Revenue. That was plainly how Subhash regarded the role of the service company in December 1996 and it is apparent from Mr Shelton’s evidence that Subhash’s view of Mr Shelton and his companies was the same.

The way that Mr Shelton was required to play a subservient role to Subhash may be seen from these extracts:

“A. … the experience of Mr Thakrar is that he is a man who likes to get his own way”

Q. Was he the sort of man, as referred to here, who simply saw Anchor as an office to whom he sent correspondence or for whom he drafted letters?

A. He would attempt to act in that way, quite right.

Q. When you say ‘He would attempt to act in that way’, are you suggesting that he did not succeed in acting in that way?

A. Yes I am.

Q. He did not succeed in asking you to sign letters that he prepared for you?

A. Mr Thakrar did attempt to prepare letters on my behalf”. (Footnote: ¹⁵⁰)

Mr Shelton saw his primary role as ensuring that Glen did not have any problems with the Inland Revenue and for that purpose he was prepared to take steps that Subhash may not have liked:

“Q. So, is your evidence that it did not actually matter, the extent to which Subhash acted or purported to act for or took steps or actions on behalf of Teso because in your opinion, Teso was not really important anyway?

A. It was not very important. It had no income. It made little difference what impact Thakrar had – Subhash had on Teso.

Q. Sorry, it made no impact on what –

A. It made little difference to the overall structure of Glen. I was concerned with Glen. Glen had the assets, Glen would be the one that if we allowed too much control to remain outside of our office, that would be – we would have the problems of the UK revenue. Teso had no problems, had no income. It had no real assets.

Q. To summarise: you were content for Subhash to control Teso because it did not have any UK taxation implications but different considerations applied when it came to Glen. Is that a fair summary?

A. I think that is a fair summary.” (Footnote: ¹⁵¹)

Outside of his role of acting as Glen’s liaison with the Inland Revenue, Mr Shelton was content to let Subhash run Glen.

Glen’s overseas loan accounts. Although the single biggest liability of Glen was its “overseas loan accounts”, when Mr Shelton took over the administration of Glen he took no steps personally to verify their existence or validity. (Footnote: ¹⁵²) Furthermore, Mr Shelton was unable from his own knowledge to state or verify what the true amount of Glen’s liability was on its “overseas loan accounts”, not the least because the accounts of Glen prepared by SKT only showed the amount of principal owing and did not show what interest was owing. This can be seen from this extract:

“Q. So who was responsible for determining the amount that was outstanding to the shareholder by Glen?

A. In 1996, when we took it over, it was a historical loan and the additions or subtractions or interest calculations after that date were made by the accountants.

Q. How could the accountants make it?

A. They have all the information”.

All matters concerning the financial relationship between the “shareholder” of Glen and Glen were handled by SKT. On Mr Shelton’s own evidence, he would not know whether the shareholder had added to or subtracted from the capital of the company until he had received the balance sheet from SKT some time after the end of Glen’s financial year. (Footnote: ¹⁵³)

Accuracy of Glen’s accounts. While Mr Shelton asserted in cross-examination that he had “no doubt about the accuracy of the accounts” of Glen, he could give no explanation from his personal knowledge how the “shareholder’s loan” had gone up from £3.7 million, being the figure shown in the accounts of Glen for the year ended 31 March 2001, to £5.9 million, being the figure shown in the accounts of Glen for the year ended 31 March 2004. Mr Shelton could only “surmise” that “some of the properties which were originally being held in one of the Thakrar’s names at some time or another has been put into Glen at valuation” but could not say from his own knowledge whether or not that was what had actually happened. (Footnote: ¹⁵⁴)

Mr Shelton left it to Subhash to determine how to record the “shareholder’s loan” and the charging and accrual of interest on that loan. Although Mr Shelton was, as he put it, “confident” that the figure for the total debt plus interest of £16 million shown in Glen’s accounts for the year ending 31 March 2004 was accurate, or indeed for any other year ending in Glen’s accounts, he could not say how it was made up. He had not checked the interest figure because he considered the amount of interest really owing to the shareholder as “irrelevant”. (Footnote: ¹⁵⁵)

Mr Shelton’s indifference to what he regarded as an irrelevancy but what would have been highly relevant in any circumstances other than one where the company, the shareholders and all assets of the company and its management were all treated as owned by, or in the sole direction of, one person, who regarded this as the beneficial owner of everything. Moreover, Mr Shelton’s attitude to shareholder loan entries in Glen’s account is very good evidence of the fact that these entries recorded fictitious or non-existent loans in the first place, which would be a likely consequence of everything being beneficially owned by one person.

Valuation of Glen’s property in its accounts. Mr Shelton was not concerned what value was put on the property taken into Glen because, whatever the value was, it had been arrived at between Subhash and “the shareholder” and that was sufficient for him. (Footnote: ¹⁵⁶) Mr Shelton accepted in answer to questioning that someone within Glen would have had to have been “satisfied” that the property additions “had come from a reputable source”. (Footnote: ¹⁵⁷) However, not only did Mr Shelton himself not perform this function but also, having suggested that it was the responsibility of the Compliance Department in Anchor Trust and being invited by me to call for and produce the file maintained by the Compliance Department, Mr Shelton never did subsequently produce this compliance file although he was clearly fully aware of its significance to the dispute about Glen’s beneficial ownership. (Footnote: ¹⁵⁸)

I conclude that the person who satisfied himself that the property additions had come from a reliable source was Subhash and that the compliance requirements of the money laundering legislation within Glen were not operated in relation to property acquisitions. This was because Subhash was regarded as the sole beneficial owner of Glen and its assets and that Anchor Trust and Mr Shelton regarded themselves as having no role in relation to its management and trading operations save to follow Subhash’s directions since he was Glen’s sole beneficial owner.

No asset register held by Glen. The directors did not maintain an asset register and accordingly, save by looking at the balance sheets prepared by SKT , did not and could not know what were the properties it held as assets or what the value of the property portfolio was that Glen owned at any one time. (Footnote: ¹⁵⁹) If there was a list of properties, it was maintained at Subhash’s office but no such document was disclosed or found in SKT’s offices. When Mr Shelton was ordered to prepare an affidavit deposing to the worldwide assets of Glen, (Footnote: ¹⁶⁰) he had to get a list of Glen’s properties from Subhash as the directors did not maintain an independent list of their own of the company’s assets at their offices in Jersey or anywhere else. (Footnote: ¹⁶¹)

Directors’ valuations of Glen’s property portfolio. The directors did not obtain or maintain their own valuations of Glen’s stock of properties. Accordingly, when Mr Shelton was ordered to prepare his affidavit as aforesaid, the estimate of the property values stated in his affidavit were provided to him by Subhash. Mr Shelton sought to show that he had some grasp of Glen’s affairs and denied that he was “entirely dependent upon what Subhash Thakrar told [him] as to what assets Glen possessed”. This independent knowledge of Glen’s affairs, he explained, arose because he had a fairly good knowledge of the company’s property portfolio from his seeing various documents such as transfers, rent statements from estate agents, old leases, and solicitors’ correspondence relating to title to the properties, and from personal visits and involvement in renewal of leases”. (Footnote: ¹⁶²)

However, even when shown his affidavit that he had prepared that contained the list of Glen properties that he had been supplied by Subhash, Mr Shelton was unable to identify which of the properties were acquired by Glen after March 2001. This was a particularly glaring example of Mr Shelton’s lack of familiarity with Glen’s affairs and of the fact that Subhash was in sole charge of the management of Glen and acted throughout as if he was its sole beneficial owner. (Footnote: ¹⁶³)

Loan books. The directors of Glen did not maintain any loan books. Accordingly, if Glen had made any loans, the records of these loans would have been maintained at SKT’s offices. (Footnote: ¹⁶⁴)

A letter from Subhash to Mr Shelton dated 27 January 2003 suggested that there was in existence in March 2002 a loan account in respect of money owed by Ramila to Glen, a written record of which Subhash had signed on behalf of Ramila as her attorney. The letter requested Mr Shelton to “complete the formalities”. Mr Shelton’s response when this letter was put to him in cross-examination showed that he was not responsible for the running of Glen and did not regard his role as being one of a director of Glen who had to take his responsibilities seriously.

This can be seen from this passage in his evidence:

“Q. [page] 725(5). Do have a look at it.

A. Sorry, I assume that if Glen completed the formalities, then this letter was seen by Glen.

Q. But it is addressed to you. So is it likely that you would have seen it?

A. Yes.

Q. I ask my question again. Can you assist me by explaining what Subhash is here referring to as an agreement of the monies due from Ramila at the time, which are now secured with Teso?

A. I assume this is – again, this is another assumption – at the time of the transfer of the shares from Ramila to Vijaya.

Q. Well, perhaps I can assist you a little further. You will see in the second paragraph, Subhash says this –

A. At the time in March 2002. It must have been in March 2002.

Q. So, again, what is this letter referring to and what are the formalities that you are asked to complete on behalf of Glen?

A. I do not know. I imagine that that would be minuted.

Q. Do you know what the reference to Ramila is?

A. I do not.

Q. I think you were mentioning a moment ago, did this relate to the transfer from Ramila to Vijaya, so I take it that actually, the name Ramila does have some resonance for you?

A. I do know who Ramila is, sorry.

Q. Who is she?

A. She was one of the original shareholders of Glen.

Q. In March 2002, was she still an original shareholder?

A. In March 2002, she was not.

Q. So, what do you think the reference is to the monies due from Ramila, secured with Teso, a reference to?

A. I do not know.

Q. Are you able to produce the account to which Subhash refers in this letter?

A. No.

Q. Does Glen have a loan book in the name of Ramila?

A. Glen does not maintain a loan book in Jersey, with Ramila.

Q. So, where would the loan book in respect of Ramila be maintained?

A. If there is a loan book in respect of Ramila, it would be maintained at SKT.

Q. So you would be unable from your own records and information to ascertain (a) whether monies were due from Ramila to Glen, or (b) if so, in what amount?

A. That is correct.

…

MR CRANFIELD: You will see Subhash refers in the first paragraph in his letter to various meetings and discussions in the past. So was this a matter on which you had detailed discussions with Subhash?

A. In my recollection, it was not.

Q. So that was simply an invention on his part?

A. In my recollection, it did not happen.

Q. Perhaps you can assist us? What were the formalities that you were being invited to complete in this letter?

A. Without seeing them, I cannot remember.

Q. We know it is in relation to an apparent loan account in the name of Ramila, does that jog your memory?

A. It does not, I am afraid, sorry.

Q. Do you suppose that Subhash was inviting you to sign off on behalf of Glen?

A. I assume that is what it was.

Q. Did you?

A. Without seeing it, I cannot say 100 per cent, but I would imagine that it was done.

Q. Again, in circumstances where your only knowledge about this matter was what Subhash told you?

A. That is correct.

JUDGE THORNTON: Does it go further than that: that you do not know when asked today whether you signed off a loan account in relation to Ramila at all, and that it may be possible that you did in fact never sign off such a –

A. That is possible, my Lord. I am saying that I assume it was done.

JUDGE THORNTON: If no such loan account has been unearthed in any location, including the offices of Thakrar & Co and I was invited to conclude that there was no such loan account in existence, would you have any comment about that?

A. Your Lordship can only make a conclusion based on the facts.

JUDGE THORNTON: That is the only way you are able to help me?

A. That is the only way I can answer at the moment.”

It follows that Mr Shelton’s only knowledge about Ramila’s alleged loan account with Glen was what Subhash told him. Nonetheless, Mr Shelton believed that he did in fact complete whatever formalities were required of Glen to sign off the loan account. However, despite exhaustive searches in the offices of SKT and in every other location where relevant documents might be located if they ever existed, no such loan documentation has in fact been unearthed. I conclude that there never was a loan account, that Mr Shelton never sought to “complete any formalities” and that Subhash’s letter was sent to Mr Shelton for some ulterior and dishonest purpose without Subhash having any honest belief that Ramila was or ever had been owed money by Glen. Mr Shelton, I find, merely ignored the letter once he received it. When asked whether he had any comment about this conclusion, if it were to be made, Mr Shelton had no comment to make about such a conclusion even though such a conclusion would lead to the inexorable conclusion that a potential fraud and deception had been perpetrated by Subhash.

I also find that this incident supports my conclusion that in anything relating to Glen which did not compromise its offshore status, Mr Shelton acted solely on the instructions of Subhash and did not exercise any independent discretion. In other words, save in a situation in which Glen’s off-shore status was threatened, Mr Shelton unquestionably did what he was told or turned a blind eye to anything, such as the letter of 27 January 2003, that he knew or sensed was “part of Subhash’s nonsense”.

Glen’s documentation. Mr Shelton never felt the need to inspect the documents of Glen that were being held by SKT, even though he visited their offices on several occasions. (Footnote: ¹⁶⁵)

Independent verification of identity of beneficial owner of Glen. At no time since he had become a director of Glen would Mr Shelton have been able to verify independently of Subhash who the current beneficial owner of Glen was. Thus Mr Shelton was forced to admit that if, for example, Glen had declared a dividend in July 2004, he would have had to go to Subhash and say:

“Who do you now say is the owner of this company? We need to pay a dividend. Who do we pay it to?” (Footnote: ¹⁶⁶)

Increase in capital stock. The terms upon which the capital stock of the company was added to were not the concern of the nominal directors of Glen but arrived at, according to Mr Shelton, between Subhash and “the shareholder”. (Footnote: ¹⁶⁷)

Subhash’s dishonest misuse of his control of Glen. Subhash was both able and permitted to organise the defence of Glen’s properties from bona fide and good claims from third Parties even to the extent of fabricating fictitious third Party rights against the property with the apparent knowledge and consent of and the apparent active participation of Mr Shelton. (Footnote: ¹⁶⁸)

An example of Subhash’s flagrant dishonesty, which could only have been perpetrated if he had total control over, and was considered to be the beneficial owner of, Glen’s affairs, is provided by the Glen property at 92 East Dulwich Road. The long leaseholders of that property claimed the right, which they clearly had, to exercise their right to purchase the freehold. Mr Shelton agreed when giving evidence that:

Mr Shelton was fully aware of these activities on the part of Subhash, but took no steps to restrain him from acting in this way, let alone forbidding him to act in such a manner, which an executive director of Glen, as opposed to someone merely uncritically following the directions of the executive director of Glen, would have done. (Footnote: ¹⁷¹)

Knowledge of the type of shares issued by Glen. The apparent executive director of Glen did not even know what type of shares had been issued in Glen. Article D of Glen’s Articles of Incorporation authorised shares in the company to be issued either in the name of the owner or to bearer. Thus, the issued shares could all have been in the name of the owner or all bearer or some of one type and some of the other. The evidence disclosed this remarkable lack of knowledge of Glen’s shareholding by the supposed sole executive director of Glen:

Subhash asserted at different times in different contexts in a variety of different documents that bearer shares had been issued. However, there is no evidence of any such shares being issued by Glen and nothing other than general assertions in those places where the assertion is made that bearer shares had been issued.

Thus, the only “evidence” of bearer shares having been issued is found in generalised assertions emanating from Subhash such as those made in his telephone call to Evans on 1 July 2004 and in his letters to Mr Evans dated 8 July 2004 and Mr Shelton dated 17 August 2004 which Mr Evans appears to have accepted in his letter to Subhash dated 6 July 2004. What Subhash asserted, and Mr Evans’ acceptance of that assertion may be seen in this extract from Mr Evan’s letter:

“I have been doing a review of [Glen] and part of the review involves establishing ownership. It is clear from our files that the bearer shares were issued to [Vijaya] and [Ramila] …”.

In the light of Mr Shelton’s evidence, I find that the relevant contents of “our files” contained some letters and other documents which contained unsubstantiated assertions from Subhash that bearer shares had been issued by Glen without identifying when they were issued, to whom they were issued, by what authority of Glen they were issued, whether a necessary resolution of the Board was ever passed and the circumstances of their issue. None of these matters has ever been established by credible evidence nor evidenced in documents that are currently available. Without such details evidenced by appropriate documentary material which did not solely rely on Subhash’s unsubstantiated assertions in documents that were not placed in evidence at the trial, there is no credible evidence that any bearer shares were ever issued.

I conclude that no bearer shares were ever issued, that Subhash was solely responsible for shares to be issued in the name of Ramila and Vijaya and that no shares of any kind were ever issued by Glen in the name of Mr Harjivan. Further, Mr Shelton was not involved in any way in the issue of any of the shares in Glen or Teso at any time.

General documentation. A large number of contemporaneous letters were written by Subhash to Mr Shelton, Mr Laffoley, Glen’s solicitors, Teso’s solicitors, lenders and others. The general tenor of much of that correspondence is of Subhash giving directions to the various professionals retained to provide management, legal and financial advice to Glen and Teso in a way which makes it clear that Subhash expects and intends those directions to be complied with without any query or hesitation. Much of the correspondence is not compatible with Subhash himself merely being an attorney or agent for someone else nor with him being anything other than the beneficial owner of Glen and Teso.

Board meetings and minutes. The final indication that Subhash exercised an iron and resolute control over all aspects of both companies and acted as if both companies and their assets and holdings were his personal fiefdom was provided by the fact that neither company appeared to hold regular board meetings and such board meetings as were held were usually held by telephone and were formal meetings held to ratify decisions taken previously by Subhash or to approve accounts previously drawn up by Subhash without the assistance of anyone else. It did not appear that the Board of either Glen or Teso ever discussed or had placed before them matters affecting the management or administration of Glen or that the directors ever involved themselves in management, supervision or decision-making.

Quite apart from the examples given in the previous section (Footnote: ¹⁷⁷) of Subhash running, and being permitted by the directors of Glen to have the running, of Glen and Teso, in a letter to Mr Shelton dated 18 June 2001, Subhash specifically instructed Mr Shelton not to take any decisions concerning Glen without Subhash’s agreement. The letter reads as follows:

“RE: CHANGE OF SHAREHOLDERS AND APPOINTMENT OF ADDITIONAL DIRECTORS

I have been advised over the weekend that [Vijaya] has sold her Shares. There are three new directors also been appointed to [Glen]. They are no doubt in addition to yourself and other present Officers, as I understand.

…

They have also requested that you please keep me fully informed and consult me at all times before making any decisions so that they can be appraised fully …

… They have advised that no serious decisions should be taken and any routine matters can be dealt with so long as I agree with you.” (emphasis added):

Mr Shelton was asked about this letter in cross-examination and his answers are revealing:

“Q. Is that a letter you recall receiving?

A. I think I do, yes.

Q. If you look at the third paragraph, what is Subhash there telling you?

A. He is asking Glen to keep him fully advised and consult with him at all times before making any decisions; so that, in his words, they can be appraised fully.

Q. So, Subhash is saying that you must advise and consult with Subhash at all times, before making any decisions?

A. He is requesting us to do that.

Q. We see the words on the page. Would you like to go a little further? At the bottom, do you see the final sentence on that page:

"They have advised that no serious decisions should be taken and only routine matters can be dealt with, so long as I, Subhash, agree with you."

Do you see that?

A. I do.

Q. And you see the CC at the bottom?

A. I do.

Q. “The new shareholders and the old shareholders”, whoever they may be?

A. Yes.

Q. Is that not a plain direction to you not to direct without Subhash's say-so?

A. It is.

Q. Was that not the constraint under which you operated at all the times that you were the director of Glen?

A. Definitely not, and I have documentary evidence to prove that that is not so.

Q. Was that the constraint under which you operated?

A. That is not the constraint under which I operated.

Q. Subhash took the view, did he not, that he could equally as well handle the affairs of the company as you could, and frequently he did so and simply told you afterwards; is that not true?

A. That was his view.

Q. Did that not happen?

A. It happened in, as it says here, routine matters.

Q. Well, it says here that you are forbidden from taking any serious decisions?

A. Well, that did not happen.

Q. It is only the routine matters that you are even allowed to make a contribution to.

A. Sorry, it was the other way round. That did not happen. I will be able to address that later.

Q. Subhash's view of life was misconceived?

A. Yes.

Q. And a rather different view from the view you took as to your role?

A. That is correct.

Q. But you did not consider that that led you to act under the constraint of Subhash constantly saying to you: you must do as I say and by the way, the shareholders are telling me that you must do as I say.

A. If Subhash had said: the shareholders have requested me to do something; that would have put a different light on the matter. But as a matter of course, Subhash did not make that statement.

Q. So, in the case of the letter that we have just looked at, that was effectively a direction communicated to you by Subhash, and you would have followed it?

A. To a certain extent, you are correct, but the problem is for the Glen directors, that they had a fiduciary duty to the company which overrides the wishes of the shareholders and overrides the wishes of Mr Thakrar.

JUDGE THORNTON: Can I ask whether you recall informing Subhash that you were not, as a director, able to comply with a direction that all the important decisions of the company should be taken by him and not by the company directors.

A. He had been informed by me orally and I will on re-examination, my Lord, produce to the court some samples of letters that I have written to him which I am sure the trustee has somewhere, which will prove my contention.” (Footnote: ¹⁷⁸)

I responded to Mr Shelton’s claim that he had documentary evidence to prove that he did not perform his services as a director of Glen under any constraint imposed by Subhash, in the following way:

“JUDGE THORNTON: … Your evidence is that you did not comply with this instruction and you informed Subhash in writing on a number of occasions that you were not going to comply with the instruction.

A. That is right, my Lord.

JUDGE THORNTON: It is obviously important that at some stage I should be presented with that evidence, and therefore, I merely indicate for the moment, this evidence is not available to the court”. (Footnote: ¹⁷⁹)

Mr Shelton did not (on 02/08/06 Mr Shelton produced letters in which he gave instructions to Subhash. These are at tab 94 of Bundle 2(5).) produce in re-examination any letters that he had written to Subhash making it clear that Subhash had no authority to insist on being involved in or taking administrative decisions of Glen and no such letters were ever located by Party 1 or by any of the professionals acting in the Thakrar litigation. Mr Shelton never attempted to provide any such copies subsequently. I am satisfied that no such letters were ever written by Mr Shelton and that his reference to producing them at a later stage was a smokescreen invented due to his being under pressure when giving evidence because of the evasions and untruths he was having to give. He was, in other words, “fobbing me and the claiming Parties off until he ceased to give evidence and then he would forget all about this correspondence.

Subhash gave the impression to Mr Manwaring, the corporate manager of the Bank of Wales that he was both a very wealthy individual and also the beneficial owner of Glen, when he wanted to borrow money to augment the property portfolio of Glen in 1999. This can be seen from a letter Mr Manwaring subsequently wrote to Mr Shelton dated 24 May 1999 as a follow-up to the meeting attended by both Subhash and Mr Shelton. He wrote:

In cross-examination, Mr Shelton agreed that it was clear from this letter that Mr Manwaring had been given the impression at his meeting with Subhash and himself the previous Friday that Glen was simply the vehicle that Subhash used to hold his property portfolio. Mr Shelton further admitted that, although he had replied to Mr Manwaring’s letter, he had not sought to disabuse the latter of this impression of Subhash that Mr Manwaring had understandably formed. The only explanation that he could give for not correcting any false impression about Subhash’s beneficial ownership of Glen was that “the subject of Mr Thakrar’s wealth was not relevant to the loan application”. That was clearly an unacceptable explanation of an impression formed by a prospective lender to Subhash of large sums of money where that impression was conveyed to the lender by the prospective borrower. I asked Mr Shelton to reflect on his answer as follows:

“JUDGE: That is your answer?

A. Yes, my Lord.” (Footnote: ¹⁸⁰)

It follows that Subhash must have left the impression with Mr Manwaring that he was the owner of Glen and that Mr Shelton heard what Subhash told Mr Manwaring and did not consider that Subhash had misstated his role as being the beneficial owner of Glen to Mr Manwaring. In other words, Subhash had held himself out to be the owner of Glen and Mr Shelton thought nothing of it because that is what Mr Shelton believed him to be.

Conclusion, Subhash as beneficial owner and Mr Shelton as nothing more than his administrative assistant. I conclude that Subhash always acted as beneficial owner of Glen and Teso, always undertook all decisions and always made it clear that his instructions were to be followed without question by Mr Shelton and Mr Barby at all times. Mr Shelton always believed that Subhash was the beneficial owner of both Glen and Teso. Subhash always held the whip hand with Mr Shelton because, as the only mouthpiece of, and Mr Shelton’s only point of contact with, “the shareholders”, Subhash was always able to override his views if necessary by stating that “the shareholders” so willed it. Further, notwithstanding the Judge’s invitation to Mr Shelton, Mr Shelton has failed to produce further documentary evidence sufficient to dispel the plain inference from the evidence before the Court that Mr Shelton did indeed operate under the constraints imposed by Subhash with regard to the running of Glen.

In addition to the situation concerning Glen that I have now dealt with, so far as concerns Teso, the evidence was clear that Teso had no function independent of Glen and that it was formed, and its only purpose was, to hold a debenture over Glen’s and the Thakrar family properties to deter third Party claims. The directors of Teso always allowed Subhash to run Teso without any hindrance and to use it for such purposes as he alone thought fit.

The purpose behind Teso’s formation is clear from a letter from Strachans, who were the company agents who incorporated Teso, dated 5 December 1995:

“One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …”.

In addition, Mr Shelton’s evidence was that:

“… the intention, the reason, the raison d’etre for Teso, was that it would make people less liable or willing to take action against Glen, knowing that there was very little equity or there could be very little equity in Glen.”

and

“It was always my understanding that the debenture that Teso held on the Glen properties was put there to put off any potential claims that may be made against Glen.” (Footnote: ¹⁸¹)

Barby’s evidence was:

“Glen’s accounts show an increasing indebtedness expressed to be overseas … The historic debt accrued long before my involvement with Teso. I understand that it represents the assets and funds advanced to Glen by the beneficial owners over the years. I am informed by the Bankrupt [i.e. Subhash] that Teso was formed in or about 1995 in order to take security for that debt in favour of the beneficial owner who had funded Glen.” (Footnote: ¹⁸²)

In answer to questions put by me, Mr Shelton added:

“JUDGE THORNTON: Before we adjourn, can I ask you; you understood these to be shareholder's loans?

A. Yes, it is quite common, my Lord, that the shareholder in small companies or small private companies has provided funds at some stage which have not been provided as share capital to the company but simply as loans or introduction of assets.

JUDGE THORNTON: But the shareholder of which company?

A. I am talking about Glen here.

JUDGE THORNTON: So this is Glen’s shareholder?

A. That is right, my Lord. What happens when a company is taken over by whoever; if you took over the shares in Glen, that shareholder's loan would simply be transposed into your name.

JUDGE THORNTON: I am merely asking about the actual shareholder's loan or loans that were recorded in the accounts of Glen. They were identified as shareholder in the singular, presumably, because there was only one shareholder?

A. Yes, shareholder's loan is shareholder, apostrophe s, my Lord.

JUDGE THORNTON: Was a sum of money identified?

A. There was a sum of money outstanding in the balance sheet.

JUDGE THORNTON: And those were loans made to Glen by the shareholder as recorded -

A. In Glen's books.

JUDGE THORNTON: - in Glen's books. And Teso was provided with a debenture?

A. That is right, my Lord.

JUDGE THORNTON: As security for these loans?

A. That is correct.

JUDGE THORNTON: But what would Teso's interests be in the loans to enable it to have a debenture over the assets of Glen?

A. You know, that was one of the reasons why I was not as convinced as Subhash that Teso was a very effective vehicle for securing these loans.

JUDGE THORNTON: Did you form any view when you became aware of this as to whether Teso had any interest in the loans, sufficient to support a debenture over Glen's assets?

A. That was always a concern to me, yes.

JUDGE THORNTON: That it did not have an interest?

A. Yes.

JUDGE THORNTON: If it did not have any interest, what would be the effect of that, in your view?

A. Well, if Teso did not have sufficient interest there, given the common ownership, I felt that it would be fairly ineffective and that the court might just lift the corporate veil in this particular instance and look right through them.

JUDGE THORNTON: And do what?

A. And decide they were ineffective.

JUDGE THORNTON: And therefore, the loans would be then unsecured?

A. Exactly, my Lord.” (Footnote: ¹⁸³)

Mr Shelton’s evidence in cross-examination shows how much Teso was the play-thing of Subhash and how little a role the directors of Glen had in its management. Relevant extracts were as follows:

“Q. What I am putting to you is that the way these companies were run in practice and the way Teso was run in practice, as screams out from this page, is that it was run by Subhash, and Teso and Mr Laffoley were merely regarded as the agents to give effect to Subhash’s instructions?

A. I think that a fair summation of that would be that that would be what Subhash was trying to effect all the time, yes.

…

Q. So, is your evidence that it did not actually matter, the extent to which Subhash acted for or purported to act for or took steps or actions on behalf of Teso because in your opinion, Teso was not really very important anyway?

A. It was not very important. It had no income. It made little difference what impact Thakrar had - Subhash had on Teso.

Q. Sorry, it made no impact on what –

A. It made little difference to the overall structure of Glen. I was concerned with Glen. Glen had the assets. Glen would be the one that if we allowed too much control to remain outside of our office, that would be -- we would have the problems of the UK revenue. Teso had no problems, had no income. It had no real assets.

Q. To summarise: you were content for Subhash to control Teso because it did not have any UK taxation implications but different considerations applied when it came to Glen. Is that a fair summary?

A. I think that is a fair summary.” (Footnote: ¹⁸⁴)

and

“Q. Mr Shelton, I think you eventually accepted this morning that the running of Teso was effectively left to Subhash, but that matters were rather different with Glen?

A. That is correct.” (Footnote: ¹⁸⁵)

Subhash’s role in relation to Teso also appears plainly from the contents of a letter written by Mr Laffoley to SKT in February 2005 in response to a letter of complaint from SKT dated 16 February 2005:

“Let me remind you that Subhash has acted as an adviser to Teso from the formation of the company and it was Subhash who has appointed and instructed various solicitors to act on behalf of Teso since incorporation. We were only informed after the fact when receiving instructions from Subhash, to send letters dictated by Subhash to the solicitors concerned.”

Mr Harjivan Never Acted as Beneficial Owner of Glen and Teso

According to Mr Shelton, the increase in the “shareholder’s loan” shown in the accounts of Glen in the years after 2001, when Mr Harjivan had supposedly become the beneficial owner of all Glen’s shares, represented “the shareholder’s” additions to the capital stock of the company. However, this increase was, again according to Mr Shelton, the result of Glen’s property holdings being augmented in the years 2001-2004 by “properties which were originally being held in one of the Thakrar's names at some time or another” prior to the time Mr Harjivan was supposed to have become a shareholder of Glen. (Footnote: ¹⁸⁶)

Thus properties were added to Glen’s portfolio after March 2001 that were not owned by Mr Harjivan, yet it was the “shareholder’s loan account”, that is money or value owed by the company to Mr Harjivan for these properties, rather than a loan account in favour of the owner of the property that was credited with the value of the properties. Mr Shelton had no personal knowledge of the transactions involved but could only assume, consistently with the practice of SKT in crediting the shareholder’s loan account but in the absence of any documentary or first hand evidence to that effect, that Mr Harjivan must have paid the owner for them when he purchased Glen. However, even Mr Harjivan when giving evidence did not suggest that he had bought from the owner of Glen any property other than or in addition to the shares in Glen and Teso.

In truth, the increase in the loan account was brought about by the beneficial owner of Glen deciding that, for accounting purposes, properties beneficially owned by him outside Glen would be re-assigned to Glen and the notional consideration paid by Glen for these properties would be added to the shareholder loan account. The only person who could have been the beneficial owner for these purposes and who could have taken and implemented the decision to augment the shareholder’s loan was Subhash.

According to Mr Shelton, the terms upon which the capital stock of Glen was added to was not a matter that concerned the directors of Glen but were fixed as between Subhash and “the shareholder”. However those terms are both unusual and uncommercial if the true shareholder was a person unconnected with Subhash. As I summarised the position as explained by Mr Shelton during his cross-examination in a question that he agreed with:

“And so, the basis upon which the property would have been transferred is that the value of the property cannot be reclaimed from the company for at least a year.” (Footnote: ¹⁸⁷)

Thus, pursuant to these terms, the capital in the company was locked up, even from its owner. While such a provision would be highly unusual, whatever the financial circumstances of the owner, they become incredible if, as was suggested, it was Mr Harjivan who was the owner of Glen given that, according to him, he had no substantial assets outside of Glen. This incredulity was stretched beyond breaking point given Mr Harjivan’s further evidence in cross-examination that he did not receive even any part of the rental income stream from the company from the Glen properties and that that income stream was both received, administered and spent by Subhash through SKT. (Footnote: ¹⁸⁸)

The most recent accounts of Glen for the year ended 31 March 2005 show that the income received was £1,129,932 of which £782,088 was spent on “property outgoings” and £325,035 on “management expenses”, leaving an income before taxation of only £31,067. Of the “property outgoings” some £448,804 comprised “repairs, renewals and maintenance” and £176,745 “agents’ commissions and fees”. The “management expenses”, apart from £36,272 for “director’s and agents fees”, comprised “legal and professional fees” of £190,883 and “general expenses” of 97,880.

The accounts, prepared by SKTL, provided no further breakdown. SKT and from September 2004 SKTL were both the accountants of Glen and Glen’s property agent and manager of its property portfolio. They were appointed pursuant to a letter from Strachans to Subhash enclosing:

“… a letter from the Directors of Glen addressed to yourself confirming your appointment as Property Agent for the company with authority to carry out whatever actions you deem necessary in defending and maintaining the company’s stock of property.”

Mr Harjivan’s evidence in his fourth witness statement was that:

“Although it is right to say that I have never sought to be paid a dividend, that is a matter which I had made a decision to adopt as a strategy, in other words to plough back the considerable turnover in terms of rental income, back into the company.

In particular, there was a rolling programme of ploughing money back into the company by refurbishing the property portfolio when it was possible to do so … .”

In other words, there was never any intention of allowing “the shareholder” of Glen to be provided with or be paid any of the money of Glen save for a courtesy non-executive director’s fee for undertaking no role save signing documents on occasion when these were presented to him for signature. Glen’s rental income, net of agents’ commissions and expenses, where agents were used, came into SKT. After Subhash had lost action no. 1 and had transferred his business to SKTL, Glen’s rental income came to SKTL and it was first SKT and then SKTL who decided how the income was to be applied. Within those two organisations, all decisions about Glen were always taken unilaterally by Subhash.

Other General Evidence

At the end of his cross-examination, in the light of his own knowledge of the affairs of Glen and Teso and against the background of the evidence that had been put to him, Mr Shelton was compelled, however begrudgingly, to concede that Subhash had a beneficial connection with Glen and Teso. This emerged from the following exchanges between Mr Shelton and counsel for Party 4:

“Q. Mr Thakrar was asked whether there was no connection but a commercial connection between himself and Teso and he said yes.

Now, as you sit there in the witness box, what is your evidence as to this? Was there or is there any connection other than a commercial connection between Mr Thakrar and Teso?

A. There is a connection, as you know, that he was - for what it is worth until it started - Teso was a dormant company for many years apart from just holding the debenture which I think entitles me to call it a dormant company. And so, Mr Thakrar’s connection would have been fairly tenuous with Teso until at least it started doing something.

Q. He is really focusing then on borrowing money from Teso in about 2003 and I am really focusing on that period and your own knowledge as you sit here in the witness box now, whether in the light of all of this evidence that you have been seeing and hearing and reading, if you think there is anything more than a purely commercial connection between Subhash Thakrar and Teso?

A. I think there is more than a commercial connection.

Q. Can you tell his Lordship what you think that connection in addition to a commercial connection is or might be?

A. I think looking at the evidence here, I think that Subhash - or sorry, the Thakrar family, are connected with Teso and/or Glen but I have no idea to what extent and that is my honest judgment.

Q. By connected, do you mean in some beneficial way?

A. It certainly looks as if there is some beneficial connection. The only rider I would give to that is that I am surprised that everyone is saying that Mr Harjivan is the beneficial owner. Because it would appear to me that if the Thakrars do have an interest in Glen and/or Teso, they are taking a tremendous risk.” (Footnote: ¹⁸⁹)

It follows that even Mr Shelton believed Subhash and/or the Thakrar family were beneficially connected with Glen and Teso. Given the structure of those companies and the evidence of Ramila and Vijaya, that beneficial connection could only have been with Subhash and the connection must have been a full or one hundred percent connection. This revelation did not come to Mr Shelton for the first time when giving evidence and it is a pity that he did not acknowledge it from the outset. It is also significant that this evidence was given by Mr Shelton prior to any steps being taken by him and his fellow directors to place Glen into administration and contending that Mr Harjivan was the sole beneficial owner and a director of Glen in his own right when the good faith of the decision to place Glen into administration was then challenged by Parties 1 and 4.

Conclusion – Glen and Teso’s Beneficial Ownership

The overall conclusion is that Subhash has always been the sole beneficial owner of both Glen and Teso. Mr Harjivan never has been the beneficial owner of any shares in either company and his evidence to the contrary was false and known by him to have been false.

The Validity of the Teso Charges

Teso charges over the assets of Glen

The Teso charges comprise:

The evidence of the nominal directors of Glen and Teso, and the contemporary statements of Subhash himself when Teso was formed and the charges were created, was that the only purpose of the Teso charges over the assets of Glen was to protect the assets of Glen from third Party claims. This was to be done by artificially creating the impression that Glen had little or no free assets because its assets were to be shown in its filed accounts as being matched by equal or greater liabilities that were secured by prior legal charges. The “loans” which the Teso charges purported to secure were not in fact loans from Teso to Glen, but the “shareholder’s loan account”, which was an accounting device whereby the owner of Glen put, or purported to put, assets into the Glen.

Teso’s bank statements and the board minutes of Glen and Teso indicated that funds were passed between Glen and Teso which were described by Mr Barby as “inter-company loans” and which were expressed in the minutes to be “interest-free and repayable on demand”. A schedule exhibited to Mr Barby’s third witness statement showed that were was a net balance due from Glen to Teso of £564,300 as at 28 January 2005. (Footnote: ¹⁹⁰)

However, as the owner of Glen and Teso was one and the same person, the “loans” merely represented money owed by the owner to himself. In other words, the loans were simply another accounting device created and inserted into the accounts by Subhash. From the owner’s perspective, it made no difference whether the net balance of inter-company loans was in favour of Teso or Glen. However, the circularity went beyond this. Since, as Mr Shelton informed the Court, Teso did not trade, had no real assets and no real income and had never traded and never had had any real assets or income, Teso could not itself have been the source of the inter-company “loans” made to Glen.

Although there was no evidence as to what the source or sources of these “loans” were, the inference that I draw is that ultimately they were generated by Glen, being the only company which did have assets. The only possible source of these payments was the rental income generated by Glen’s properties and I also find that that is the source of the income.

The role played by Teso and the fiction of the Teso charges is further demonstrated by Subhash’s letters to solicitors that demanded that they ensure that charges in favour of Teso were registered over all of Glen’s properties. Thus, in Subhash’s letter to Bates Travers dated 30 January 2004 on behalf of Glen, he stated that it was their duty and the duty of Glen to charge Glen’s properties to Teso and that

“The Company has serious risk of losing substantial amount of properties, and other difficulties that could be created for it by not being active and careful in protecting the Company’s assets”

Subhash’s instructions as to the purpose of creating inter-company charges over Glen’s assets were repeated in his letter dated 30 September 2004 to Edward, Oliver & Bellis:

“Further to our firm’s instruction on behalf of [Glen] our clients, we are rather surprised that this matter has not progressed in spite of various reminders and assurances given …

There is a very serious danger that other Parties could start to create problems and the clients’ i.e. [Glen] could end up loosing properties or have to pay costs, which could be very serious sums of money.

…

PS. Please do not forget to put [Teso’s] Debenture on these properties, as agreed and discussed previously.”

Introduction

The purported deeds of mortgage between Subhash and Teso (“the Subhash charges”) were dated respectively 21 August 2003, 21 August 2003, 11 December 2003 and 5 July 2004 (Footnote: ¹⁹¹). According to Mr Barby, the amount outstanding to Teso from Subhash as at 26 July 2005 was £1,501,040.00. However, Mr Barby admitted when giving oral evidence that this figure, and the other loan figures set out in his witness statement, were supplied to him by Subhash by fax or e-mail for the purposes of producing the list of Teso’s assets that Mr Barby had been ordered to produce and that these Subhash figures were contained in a one-page schedule that simply set out global amounts without any breakdown. (Footnote: ¹⁹²)

The Subhash charges were granted over properties in which Subhash had a legal or beneficial interest. The properties in questions are set out by Title Number at paragraph 2 of the order of the TCC dated 2 August 2006. By that order, the TCC declared that the Subhash charges were spent and/or of no effect and made orders for the registers of title of Subhash’s properties to be rectified accordingly. The Thakrar Family members’ charges were granted over properties in which one or more of Parties 8 – 13 had a legal or beneficial interest. These properties are listed in Part B to the schedule to the order. No summary order was made in connection with these properties. The same considerations apply to these so that this judgment is concerned to explain and provide reasons for the summary order made on 2 August 2006 in relation to the Subhash charges and to find facts relevant to applications to rectify the registers of title in connection with the Thakrar Family members’ charges.

The reasons and relevant facts are set out in sections 8.2.2-8.2.6 below.

Role of Teso exactly the same in relation to Subhash’s and Thakrar Family members’ properties as it was in relation to Glen’s properties

Teso was merely a vehicle devised to deter third party claims against the assets of Glen. This was to be achieved by the device of Teso taking charges over the assets of Glen for which it had provided no real consideration. Thus, when Subhash and the Thakrar Family members provided charges which Teso took over their properties, the obvious starting point in considering whether these charges secured any genuine indebtedness was the same as with the Glen charges. In other words, since the charges appeared to have been created in identical circumstances and in an identical manner to those created over Glen’s properties, they were probably created as a device to prevent the Claiming Parties from enforcing their costs judgments in favour of those Parties.

Mr Shelton said in cross-examination:

“Glen had the assets … Teso … had no income … had no real assets”. (Footnote: ¹⁹³)

Accordingly, if Teso had no income and no assets, it did not have the means to advance monies to Subhash. This fact, together with the evidence referred to in sections 8.2.3-8.2.6 below, clearly demonstrates that the Teso charges over Subhash’s properties were, like its charges over Glen’s assets, merely a device to protect Subhash’s assets against the claims of genuine creditors.

Subhash arranged for Teso to take charges over the properties registered in his and his brothers’ names

Mr Shelton’s evidence was that it was quite likely that the suggestion that Subhash grant the Teso charges came from Subhash himself and he agreed that such a request on the part of the borrower “was not logical”. Mr Shelton also accepted that it could be the case that the purpose behind the Teso charges “was simply to protect Subhash’s assets from third party creditors, including those involved in litigations”. Mr Shelton was not surprised that Subhash gave instructions to Teso’s solicitors regarding the Teso charges. (Footnote: ¹⁹⁴)

In finally resolving this issue, I must rely on the contents of the contemporaneous documents since, apart from Mr Shelton whose knowledge was limited, there was no first-hand evidence regarding the circumstances in which Teso came to take charges over Subhash’s properties. Subhash himself declined to subject himself to cross-examination and he put in no sworn evidence on this issue.

The documents demonstrate that:

Subhash identified what properties were to be given to Teso as “security”.

Subhash dictated the final form of Teso’s instructions to solicitors regarding the Teso charges, in particular the timing of the loan and the rate of interest. The timing was that part of the loan had been made “over the last year” but “further funds [Subhash] may also draw down from us” and the rate of interest was to be 2% over Bank Base Rate.

Subhash dealt with Teso’s solicitors, Mr Deepak Manghani of Radcliffes Le Brasseur, regarding the Teso charges.

Subhash pressed the solicitors to get on with the taking of the Teso charges with the instructions: “Charges to be taken as soon as possible. Time is of essence” and “Would you please therefore, put Charges on [my home and the Office] as first Charges for Teso … as soon as possible”.

Subhash wanted charges to be taken by Teso not only over his own interest in the properties but also over the interests of his brothers and gave the necessary instructions for these charges to be taken out.

Subhash regarded these charges as affording protection to him and his brothers. His views about the benefits of his brothers taking charges are clearly set out in this letter that he drafted, a copy of which was found on his hard drive:

“Regarding my brothers, Mukesh, Vijay and Kishore the two properties where they have interests, which is my Office as well as Taylors Building, but the third property i.e. in Clipper Court Mukesh, Vijay, Mrs J M Thakrar and myself have interest. Perhaps we should do a separate agreement between them and Teso … for their share of £200,000 worth of loan to be covered so that they are also not left with any difficulty.” (emphasis added)

Subhash’s views about his brothers are also set out in his letter to Radcliffes Le Brasseur dated 10 May 2004 regarding the taking by Teso of further charges over the properties in the names of his family members:

“We shall appreciate if you will please take first Charges on all these properties in favour of Teso, who have lent substantial monies to the above … secured Charges need to be placed on all of these above properties as soon as possible. Time is of essence. The above individuals do not need independent legal advice and they have asked me to confirm it as we as a family have advised all of them”.

The question arises as to who it is from whom Subhash and his brothers wish to be protected that necessitates these charges. The obvious, indeed only, inference that can be drawn in answer to this question in the light of the circumstances of these charges being taken out, is from creditors of Subhash and his brothers who might otherwise seek to recover against their properties.

Subhash, in a letter drafted for his wife Kiran to send, remonstrated in February 2005 with Mr Laffoley for his failure and the failure of the solicitors instructed on behalf of Teso to perfect the Teso charges. It is telling that in his letter in reply, Mr Laffoley did not express any concern at all about the failure to perfect the Teso charges, but was most concerned to respond to the accusations made against him by Subhash, which he did in the following terms:

“It was Subhash who dealt directly with Radcliffes LeBrasseur and then P S Levy & Co concerning the charges he wished Teso to take over the various properties owned by the Thakrar family. It was Subhash who instructed these solicitors, it was Subhash who ‘fell out’ with these solicitors and it appears that it was Subhash who totally ignored their advice”.

Teso did not in fact advance any monies to Subhash or his brothers

The simple but remarkable fact is that there is no evidence that Teso ever actually made any payments to Subhash, whether by way of loan, gift or otherwise, after December 2001. Thus Mr Barby’s evidence was that:

“I have not been able to find any record in Teso’s bank statements of any funds passing by way of loan from Teso to [Subhash] pursuant to [the] loan facility.” (Footnote: ¹⁹⁵)

Mr Barby did refer, in paragraph 11 of this witness statement to four sums paid by Teso to SKT’s client account in October-December 2001 but he added:

“These transfers pre-date the grant of the loan facility. Further, there is nothing to indicate that these sums were advanced to [Subhash] by Teso by way of a loan.”

Neither Subhash nor his brothers made any “repayments” until after judgment against him

The Loan Agreement the Teso charges were supposed to secure provided that the principal amount of the loan outstanding from time to time would carry interest at the rate of 2% above base rate payable quarterly in arrears at the end of March, June, September and December in each year. Subhash made no payments in any of September 2003, December 2003, March 2004 or June 2004. No demand was made upon Subhash by Teso for payment of interest or breach of the loan agreement. No attempt was made by Teso to exercise its remedies as “mortgagee”. The same failure to make repayments occurred with Subhash’s brothers.

Subhash apparently read the draft judgment following the original trial on or about 3 September 2004. Thereafter he took steps to realise his assets that were not subject to the Teso charges and pay them to Teso or to Anchor Trust. Five payments were made between 17 September 2004 and 1 October 2004. (Footnote: ¹⁹⁶) Given the timing of these payments, they cannot sensibly be regarded as having been loan repayments by Subhash. They were made by Subhash in yet further blatant attempts to avoid his genuine creditors.

No loans were made to Subhash or his brothers by anyone

The evidence also demonstrates that, not only did Teso make no payments to Subhash or his brothers by way of loan, nor did Glen make any loan payments to him or them. I reach this conclusion and make that finding from the following matters and circumstances:

This evidence overwhelmingly supports my conclusion that neither Teso nor Glen made any payments to Subhash or his brothers by way of loan. I reach this conclusion despite Mr Shelton’s suggestions to the contrary in his written and oral evidence. That evidence was yet another example of Mr Shelton deliberately turning a blind eye to the obvious when giving his evidence.

The Court is entitled to conclude from the facts and matters set out above that, on a balance of probabilities, the Teso charges are a mere device and may be disregarded.

Conclusion – Teso Charges

The Teso charges were a sham from their inception. They do not support any borrowing by Glen. There has been no lending to support these charges. They may be discharged forthwith.

Which Transactions Involving Glen and Teso are Void or Voidable?

1987 Agreement and 1988 Transfer

Introduction

The starting point for any determination of the claims of any Party against properties currently registered in Glen’s name or of tracing, restitutionary or monetary claims against Glen is to determine whether the Agreement for sale of SPC’s property portfolio to Ramila (“the 1987 Agreement”) and the Transfer of SPC’s property portfolio to Ramila dated 25 March 1988 (“the 1988 Transfer”) were void and/or of no effect

There was no written contract for the sale of SPC’s property portfolio to Ramila. An oral agreement for sale was made at a meeting between Subhash, Neil and Kenneth on 12 November 1987. It was evidenced by a letter dated 17 November 1987 addressed to Mr Roger Smith at Claremont Haynes and it was executed by Neil and Kenneth (“the Sale Memorandum”). A copy of the part of the 1988 Transfer signed by Neil and Kenneth is at [D1(3)/19B/1615-1620]. A copy of the part of the 1988 Transfer signed by or on behalf of Ramila has never been disclosed. However, Subhash’s evidence at the original trial was that he signed the 1988 Transfer as Ramila’s attorney.

Both the 1987 Agreement and the 1988 Transfer are alleged by Party 2 to have been void and of no effect because (1) they were made without the authority of SPC and (2) they were made without the authority of Ramila.

No authority from SPC

The directors of SPC in November 1987 and March 1988 were Kenneth, Rosemary and Mr David Eley. Neil was the company secretary. The day-to-day running of the company was left by the directors to Neil. Kenneth’s evidence regarding the 1987 Agreement and the 1988 Transfer was that:

“Neil made the decision that all of [SPC’s] properties had to be sold and he and [Subhash] agreed the price and method of payment and handled all the arrangements. The Company did not authorise Neil to make that arrangement with [Subhash]. No meeting of [SPC] was called at which the shareholders resolved that the sale should go ahead, or ratified it afterwards. There was not even a meeting of the Board of Directors to approve the sale, or to recommend it to [SPC’s] shareholders. I know that Neil and/or [Subhash] manufactured Minutes (which I, at his behest, was stupid enough to sign …) to make it look as though everything was regular, but, in fact no meetings were ever convened. I do not believe that any members of [SPC], other than Neil and I, were even aware of the sale at that time.” (Footnote: ²⁰⁷)

Kenneth signed the 1987 Agreement and the 1988 Transfer because Neil and Subhash advised him to do so and Kenneth did not feel able or competent to challenge their advice. Further, according to Kenneth, it was Subhash who drafted:

“… most if not all of the Minutes of SPC between his advent in 1987 and his departure in 1996.” (Footnote: ²⁰⁸)

Although the Minutes purported to record Rosemary as being present, in fact Rosemary had not attended any of meetings until after Neil’s death in January 1995.

Rosemary’s evidence is that she:

“… was not involved in the proposal to sell the properties and … only became aware that [SPC] had been wound up after the event. …

I was not aware that [SPC’s] property portfolio had been sold until after July 1988 … I was given no formal notification of the sale price or that it was to be paid in instalments. I do not recall when I learned of the actual sale price … I only became aware of the actual terms of the agreement to sell (including the size of the portfolio) when I was shown a copy of the document after these proceedings had started in 1996. I had no idea what the portfolio was actually worth. I was not consulted over the sale and I did not discuss the matter with Neil, Kenneth or any other family member or shareholder at the time.” (Footnote: ²⁰⁹)

As regards the actions of Neil and Subhash, Rosemary’s evidence was:

“I trusted Neil as a member of the family and as the company solicitor to act with honour and integrity in all matters. I had no idea that he was manipulating myself and Kenneth to help him strip the company. I also trusted [Subhash]. He appeared to be a very good friend of Neil’s and was a well-known and experienced accountant. I expected that both men would act with honesty throughout and I had no reason to think otherwise until these proceedings were brought.” (Footnote: ²¹⁰)

Further, Rosemary confirmed that she had not been invited to attend, nor had attended, a board meeting of SPC between 1987 and Neil’s death in January 1995.

Neither Kenneth’s nor Rosemary’s evidence was challenged by Subhash, Ramila, Vijaya, Glen, Teso or Mr Harjivan at trial no. 2. The upshot of their evidence is that the sale of SPC’s property portfolio, purportedly effected by the 1987 Agreement and the 1988 Transfer, was never authorised or ratified by a resolution of the board of directors of SPC passed at a meeting of the board or otherwise or by a resolution of the shareholders of SPC passed at a general meeting of the company or otherwise. Neither Neil nor Kenneth had the authority of the board or of the company to execute the Sale Memorandum or the 1988 Transfer on behalf of SPC and neither the Sale Memorandum nor the 1988 Transfer was ever ratified by the company.

No authority from Ramila

Ramila’s evidence was, in summary and contrary to Subhash’s evidence at trial no. 1, that she:

None of the answers given by Ramila in the passages of her evidence referred to in the preceding paragraph was challenged by any other Party to the Thakrar Litigation save for Subhash’s last minute and wholly unsubstantiated challenge to her evidence as being perjured and lying, a challenge that I have expressly rejected as itself being dishonest and untruthful evidence slipped into the trial as a result of Subhash’s misusing the limited permission granted to him to adduce evidence to challenge the evidence adduced by Party 1 that he was the source of the funding of a payment of £20,000 ostensibly provided by Mr Harjivan to fund the appointment of the putative administrators of Glen prior to their obtaining access to its income stream.

Further, the properties transferred to Ramila from SPC were retained in her name for less than a year. By an agreement for sale dated 30 March 1990 purportedly executed on her behalf by Subhash as her attorney, Ramila agreed to sell the ex-SPC properties to Glen in return for a stated consideration of £1 million and the issue of 250 shares in Glen. Within 8 months the shares in Glen issued in Ramila’s name were transferred into the name of Vijaya. Ramila never received one penny of the £1 million purportedly due to her under the contract with Glen nor one penny from Vijaya for her shares in Glen.

Ramila’s own conclusion about the events that had happened concerning her alleged purchase of SPC’s property portfolio was forcibly expressed by her as follows:

Ramila’s allegation set out in this passage of her evidence is supported by the surrounding facts and circumstances and I unhesitatingly accept it in its entirety. In purporting to create legal relations between Ramila and SPC in circumstances where it is plain that Subhash was acting for purposes of his own and, by plain inference, for his own benefit, Subhash was acting and exercising his powers under Ramila’s power of attorney in bad faith.

1990 Sale Agreement

Party 2 contended that the Agreement for sale of ex-SPC properties between Ramila and Glen dated 30 March 1990 (“the 1990 Sale Agreement”) was void and/or of no effect

A copy of the part of the 1990 Sale Agreement executed by Subhash as attorney for Ramila was adduced in evidence. The part of the 1990 Sale Agreement executed on behalf of Glen has never been disclosed.

If, as is inevitable given my findings of fact, the title to SPC’s property portfolio did not pass from SPC to Ramila and the 1987 Agreement and the 1988 Transfer were ineffective to vest any legal or beneficial interest in those properties in her, Ramila had no title to pass to Glen in respect of the properties that were the subject-matter of the 1990 Sale Agreement. The 1990 Sale Agreement was therefore ineffective to confer title to the properties referred to in it to Glen and SPC remains the legal and beneficial owner of those properties.

Independently of the fact referred to in the preceding paragraph 434, the 1990 Sale Agreement was in any event void and/or of no effect because:

The promise contained in the 1990 Sale Agreement to pay £1 million to Ramila and/or to issue to her 250 shares in Glen was illusory because:

Ramila’s evidence was that, contrary to Subhash’s evidence at trial no.1, she:

Ramila’s was evidence entirely corroborated by her sister Vijaya’s evidence. (Footnote: ²¹⁹) Vijaya had no recollection of (a) being issued with any shares in Glen (b) acquiring any shares in Glen (c) paying any monies for shares in Glen (d) paying to Ramila just under £½ million on or about 30 March 1990 and/or (e) a further sum of similar amount in November 1990 and/or (f) or any sums of such amounts at any time.

None of the answers given by Ramila or Vijaya in the passages of their evidence I have set out above was challenged by any other Party to these proceedings save for the intemperate challenge made by Subhash on the last day of the hearing which I have unhesitatingly rejected.

In purporting to create legal relations between Ramila and Glen in circumstances where, as is plain from the evidence of Ramila and Vijaya already referred to, Subhash was acting for purposes of his own and, by plain inference, for his own rather than Ramila’s benefit, Subhash was acting and exercising his powers under Ramila’s power of attorney in bad faith.

Subsequent transfers of ex-SPC properties executed by Ramila

I am also concerned with the subsequent transfers of ex-SPC properties that were executed by or on behalf of Ramila. Party 2 contends that these transfers are void and/or of no effect.

The copy documents disclosed by Mukesh suggest that Ramila executed a number of Transfers subsequent to the date of the 1990 Sale Agreement (“the Subsequent Transfers”), namely Transfers dated 18 September 1991, 27 July 1993, 27 July 1993, 4 October 1996 and 1998.

It was not clear why these documents were disclosed by Mukesh rather than by Glen when, on their face, they purport to be documents belonging to Glen. According to a letter from the solicitors previously acting for Parties 8-13, Seddons, to Speechly Bircham, Party 4’s solicitors, dated 5 December 2005 these documents were supposed to have been found by their clients in:

“… various old (and closed) files … hidden away in the basement.”

Ramila’s evidence was to the effect that she had no memory of signing these documents, might indeed not have signed them and never had any explanation as to what the documents were or why she was being asked to sign them.

These properties or a majority of them, being ex-SPC properties, are now registered at HM Land Registry in the name of Glen. This suggests that further Transfers were executed in favour of Glen, either by Ramila herself or Subhash purportedly acting as her attorney or as the attorney of Vijaya.

The properties in respect of which Party 2 claims it either remains the legal and beneficial owner or, where they have been sold to genuine third Party purchasers, is entitled to trace the proceeds of sale into Glen, are properties nos. 10-110, 114 & 142 on the List of Properties Under Challenge and are set out in a schedule to this judgment. A Transfer dated 18 September 1991 purported to transfer the Springfield Road properties to Vijaya. However, the Glen Properties Report shows that these properties are currently registered in the name of Glen and that they were transferred from Vijaya on 20 September 1999 for nil consideration. These properties are also claimed by Party 2.

It follows from section 9.1 above that title to SPC’s property portfolio did not pass from SPC to Ramila and that the 1987 Agreement and the 1988 Transfer were ineffective to vest any legal or beneficial interest in those properties in her. It therefore follows that Ramila had no title to pass to Glen in respect of the properties the subject-matter of the Subsequent Transfers. The Subsequent Transfers were therefore ineffective to confer title to the properties referred to therein on Glen and legal and beneficial title to the same remains in SPC.

Independently of the fact referred to in the preceding paragraph 446, there is evidence that the Subsequent Transfers were in any event void and of no effect because: (1) when executing the same Ramila’s mind did not accompany her signature, so that she never intended to sign the Transfers to which her name was appended (Footnote: ²²⁰) and/or (2) she did not sign in the presence of a witness who attested the signature (Footnote: ²²¹) and/or (3) her signature was forged on the relevant documents (Footnote: ²²²).

Thus, the Subsequent Transfers would appear to be ineffective or void and failed to pass title even if, which would be contrary to the evidence, Ramila had good title passed to her in the first place.

Factual Background to Trial no. 1 and the Compromise of SPC’s Claims Brought Against Ramila and Glen

The factual background to the compromise reached between SPC and Glen is as follows.

1996 - 1999. Birkett Long, solicitors, acted for Glen, Ramila and Vijaya on a number of matters involving the properties held by or on behalf of Glen. The initial instructions were given by Subhash pursuant to a general retainer letter that was to apply to all matters that Subhash instructed Birkett Long to deal with.

The instructions in each case were always given by Subhash. In Ramila and Vijaya’s cases, pursuant to the powers of attorney each had provided to Subhash. Mr Livesley, the file holder in these matters, and other members of Birkett Long never met Vijaya or Ramila and Subhash’s express and explicit instructions were that the firm should never attempt to contact them directly in Tanzania or Kenya respectively where Subhash informed Birkett Long that each was living. Instead, as Subhash instructed Birkett Long, that firm should always communicate with him about these instructions and, additionally, about the instructions given to Birkett Long on behalf of the other family members.

Mr Livesley, the partner in question, stated that, to the best of his knowledge and recollection, the firm contacted each principal for specific authority in order to validate the power of attorney when first being instructed for a principal through a power of attorney. He remembered that, for Vijaya, a letter was received from her instructing the firm that Subhash was her attorney and that no other direct contact was made with her. He could not remember whether such a letter was also received from Ramila or whether contact had been made in some other way. Both Vijaya and Ramila gave evidence that they never contacted Birkett Long nor were contacted by that firm in any way and I accept that evidence.

It is quite likely that Mukesh, Vijay, Naina and Sheela either provided letters of introduction or even spoke on the telephone since each was aware that the action started in their name was about to be started. In each case, that Family member merely accepted what Subhash would have told them, namely that he was starting proceedings in their name as a necessary step in relation to the property held nominally in their name and that they should leave everything to him save, if this happened, signing a letter or speaking to the solicitor on the telephone to authorise the use of their names. In Shantaben’s case, it is clear that she was not consulted. Subhash held a general power of attorney and would have signed any necessary letter and he or Sheela would have explained that their mother was not capable of dealing with her own affairs but left everything to Subhash or Sheela.

I find that the direct contact between Birkett Long and both Vijaya and Ramila was by means of a letter which appeared to have been written by each to the firm which Subhash provided to Birkett Long. In each case, the letter was drafted and signed by Subhash and was a forgery. Subhash acted in this way so as to be able to start proceedings in both Ramila and Vijaya’s names without them knowing about or being contacted directly by Birkett Long in order to further his fraudulent pursuit of money from the Estate of Neil for himself in relation to properties held nominally in their names. Proceedings brought by the other Family members were started by Subhash at his suggestion and each family member from the outset left everything to Subhash since they regarded the properties held in their respective names as belonging to Subhash and as being placed in their respective names by Subhash for tax or other purposes dictated by Subhash.

4 December 1996. Birkett Long acted for Subhash/SKT in commencing proceedings claiming unpaid fees from Party 2 on behalf of Subhash in the Colchester District Registry. Party 2 issues a counterclaim seeking an inquiry and damages in relation to the transfer of SPC’s property portfolio to Ramila. This counterclaim was the catalyst for Subhash to instruct the issue of the Family actions.

August - September 1998. Birkett Long issued the Family Actions in the Chancery Division against Party 4. Each claim was issued in a separate writ. The writs issued in the names of Ramila and Vijaya were issued pursuant to instructions given by Subhash purportedly acting as their attorney under the respective powers of attorney held by him that each had signed.

The address given on one of the writs issued in Ramila’s name was “C/o 113 Woolwich High Street” and those in Vijaya’s name was “PO Box 78, Kisumu, Kenya”. These addresses had been given by Subhash. In the case of Ramila, Subhash knew Ramila’s actual address in Mottingham which address was given on one set. Following April 2000 he gave his own business address so as not to reveal her address.

24 May 1999. The corporate manager of the Bank of Wales wrote to Mr Shelton following a meeting he had had with Subhash and Mr Shelton a few days earlier. The purpose of the meeting was to discuss the facility that the Bank could offer Glen and in the course of that discussion Subhash represented himself to the corporate manager in this way, as described by him in his letter to Mr Shelton:

“I am exceptionally keen to develop more business with Glen and am extremely grateful for the opportunity to meet directly with Mr Thakrar on Friday last. During our conversation it became apparent that Mr Thakrar, individually and through Glen, is a man of some substantial wealth owning (I believe was mentioned) properties valued at c £35m with the only borrowing being our small facility and I understand about £500,000 elsewhere.”

The letter went on to suggest a trading facility of up to £5m could be provided by the Bank.

I find that Subhash held himself out as being the beneficial owner of Glen’s property portfolio and, in consequence, of Glen itself. He did so on an occasion when he is to have been expected to be telling the truth since he was discussing facility of up to £5m from the Bank of Wales to enable Glen to undertake further acquisitions and refurbishment. He also informed the corporate manager that Glen’s current borrowing was only about £500,000. This information, again, was likely to be accurate given the circumstances in which it was provided. That meant that Glen did not in fact owe many millions of pounds in shareholders’ loans despite the suggestion to this effect in its accounts when they were prepared by Subhash subsequently. Thus, Glen in 1999 had no outstanding debts owed to Teso or Harjivan or Ramila or Vijaya.

Subhash questioned Birkett Long’s handling of Glen’s business and their professional integrity, competence and the fees being charged and Birkett Long decided that their professional relationship with Subhash, Glen and Vijaya had broken down.

24 September 1999. In accordance with established professional etiquette, Birkett Long wrote directly to Vijaya in Tanzania and terminated their retainer with her on the grounds of a breakdown of the professional relationship and for non-payment of fees.

Vijaya was most surprised to receive this letter since she had never heard of the firm nor was aware of any business in England that she was concerned with that had needed the involvement of solicitors to act on her behalf nor, indeed was she aware of any business of any kind in England that she was involved in. Vijaya telephoned Subhash in England and asked him what the letter was all about. He merely told her that there was nothing to worry about and that she should burn the letter. He also told her that she should burn any further documents that might arrive. He also informed her that he was going to send her £10,000 to help fund any of her children’s education and he subsequently arranged for £5,000 to be sent to a bank account opened by Vijaya for that purpose. Vijaya had not asked for this money.

I find that Subhash sent Vijaya this money at this moment in order to “sweeten” her and to seek to ensure that Vijaya did not do anything or inform anyone about this letter and any subsequent letters that she might receive from Birkett Long. It is also clear that this money was extracted from Glen by Subhash.

12 January 2000. Subhash wrote a threatening letter to Mr Livesley of Birkett Long. In this letter he informed Mr Livesley that Vijaya had contacted him and had expressed alarm and fear that the letter had been sent to her direct by Mr Livesley. It was suggested in Subhash’s letter that letters from overseas were often opened by the Kenyan authorities and that if a letter contained anything of a business or financial nature, the intended recipient would often be threatened by the authorities with violence due to their jealousy of those with overseas assets. The letter then stated:

“… You cannot put people’s lives at risk and behave badly as you have do so even now and on her instructions, we have been asked to warn you that you and your personal family will also suffer the consequences if they are harmed … so please take note very seriously indeed what our client has said via us. We do so reluctantly but on her specific instructions.”

The letter also threatened Mr Livesley with having to “personally pay the price of it” if anything happened to Vijaya or her family.

The statements in the letter were lies. Vijaya had not spoken to Subhash about any risk or threat to her or her family resulting from the letter being sent to her and her evidence was that there was in fact no threat to her of the kind suggested by Subhash and she had had no concern about the letter being sent to her. She certainly had not instructed him to complain to Birkett Long about the letter being sent to her.

Birkett Long made a complaint of professional misconduct against Subhash about this letter and it led to a finding by the Disciplinary Committee of the Institute of Chartered Accountants. This complaint was proved on 8 May 2001 after Subhash had admitted it. The tribunal found that there was no evidence to show that the solicitors had in fact placed Vijaya in any danger. Subhash was fined £3,000 and ordered to pay costs of £2,326.

I find that this letter was, in fact, a crude attempt to try and ensure that Birkett Long did not further communicate directly with Vijaya and, thereby, discover his fraudulent use of Vijaya’s name.

14 January 2000. Bowling & Co replaced Birkett Long as solicitors for the Thakrar Parties including Subhash.

March 2000. The properties still registered in Ramila’s name were transferred into Glen’s name by Bowling & Co. These properties had not been re-registered into Glen’s name earlier because Subhash had wanted to save on stamp duty.

I find that Subhash gave instructions for these properties to be re-registered from Ramila’s name some years after they had been transferred to Glen as part of his hastily formed plan to place every property then in Ramila’s name into Glen’s name because he had been frightened by recent events that his fraudulent use of his cousin’s name might be discovered and he wanted to “regularise” the conveyancing of the alleged bona fide arm’s length sale by Ramila of her properties to Glen.

27 June 2000. Subhash sent a complaint about Mr Livesley of Birkett Long to the Office of the Supervision of Solicitors in the name of Vijaya from her address in Kenya. This complaint stated that:

“I am a Kenyan resident national with various UK property and other interests which are administered through my UK representative, namely my maternal cousin, Mr Subhash Thakrar to whom I have granted a general power of attorney.

Unfortunately due to the sensitive political and economic climate in Kenya, it has always been an express instruction to solicitors that all and any written communications must be addressed to my cousin in London who would then seek my instructions by telephone or other safer means via third Parties visiting Kenya or UK. The political and economic climate is such that it is my firm belief that overseas post is often intercepted by the Authorities and/or other powerful Kenyans in positions of authority etc. who seek to use matters to their advantage and to my potential disadvantage.

I understand that there has been a falling out between my cousin and our then solicitors at Birkett Long.

In breach of the express agreement … Mr Livesley of Birkett Long wrote directly to me in Kenya as to confidential financial and business matters. Unfortunately my worst fears were founded insofar as the Birkett Long letter (a copy of which is attached) was intercepted by unknown third Parties such that I then became the victim of intimidation and threats which unfortunately had to be “bought off” by payment of a Stirling equivalent of some £20,000.00.”

No direct evidence was adduced as to what happened to this complaint so that I infer that it was dismissed. Subhash’s letter is remarkable in that it is seeking to secure a disciplinary finding against the solicitor who had reported Subhash to his own disciplinary body in relation to this matter and where a hearing was awaited.

I find, on the basis of Vijaya’s evidence, that she never wrote this letter and that the letter that was written to the OSS was a forgery written by Subhash. Moreover, the alleged interception of the letter, subsequent intimidation of Vijaya and payment by her to forestall further intimidation or violence were all figments of Subhash’s imagination. This letter is another example of Subhash’s dishonest attempts to seek to ensure that his dishonesty in relation to the use of Vijaya’s name would remain undetected.

15 November 2000. A letter dated 15 November 2000 and purportedly signed by Ramila and stated to come from C/o S.K. Thakrar & Co, Chartered Accountants, 113 Woolwich High Street, Woolwich, London, SE18 6DN, was sent to Mr Raja of Bowling & Co purporting to instruct Bowling & Co. The letter included this statement:

“… I had disposed off (sic) my property portfolio to Glen International Ltd on 1 June 1989 and also sold some of my shareholding in the company to Mrs V Radia and her family in Kenya.

Thereafter, before I got married in Tanzania, I was a Tanzanian Citizen throughout the period. I also sold the remaining shares to Parties in Kenya and Tanzania. …

Recently, you have now transferred all the properties into Glen International Limited, and I am no longer required to be a bare trustee. This was done to protect my privacy and also for me getting other complications because I have no interest in the Company since disposing of my shares in 1994. …”.

I find that this letter was written by Subhash and that he forged Ramila’s signature on the letter and then sent it to Bowling & Co. The intention was to provide instructions to Bowling & Co which appeared to come from Ramila directly. Specifically, Bowling & Co was to write to Mr Shelton to instruct him that she has disposed of her shares in Glen some years previously and to ensure that Glen’s records were amended accordingly. I also find that Subhash acted in this way because he wanted to provide a spurious air of authenticity to Mr Shelton that Ramila had sold her shares in Glen previously. I further find that this letter was triggered by Subhash having decided, in the light of his fall out with Birkett Long and their direct contact with Vijaya in Kenya and the disclosures that had had to be made in various pieces of litigation about his involvement in the affairs of Glen, that there was a real risk of his fraudulent use of Ramila and Vijaya’s names coming to light. Subhash had, in consequence, hatched his further fraudulent scheme to transfer all properties registered in Ramila and Vijaya’s names into Glen’s name and all shareholdings in Glen and Teso to be re-registered in Mr Harjivan’s name, in both cases using the registered names as nominees. The beauty of this scheme, from Subhash’s point of view, was that he had obtained Glen and Harjivan’s permission to use their names whilst hiding from both Glen and Harjivan the fraudulent purpose of that use.

6 December 2000. A document dated 6 December 2000 addressed to Mr Shelton at Glen’s offices in Jersey and purportedly signed by Vijaya was disclosed by Subhash during trial no 2. The letter purported to come from Mrs Vijaya Radia, PO Box 78, Kisumu, Kenya and it stated:

“I have sold my 499 shares to a Mr Mahindra Harjivan of Mozambique PO Box 1127 Maputo, Mozambique.

Please arrange for these shares now to be registered in his name. I have received substantial shares consideration overseas as agreed between the Parties. It will remain confidential between us as contracted.

I have requested Ramila L Thakrar as my bare trustee to surrender one share to Mahindra Kumar Harjivan.

Yours sincerely

[Vijaya Radia]

9 December 2000. A shorter letter dated 9 December 2000 purportedly signed by Ramila and addressed to Mr Shelton was also disclosed. This stated:

“As requested by Vijaya Radia, please transfer one share held in my name to Mahindra Kumar Harjivan of PO Box 1127, Maputo Mozambique.

As you know, I had sold all my interest and shares in Glen International Limited back in 1990 when I was non-resident and overseas.

Yours sincerely

[R Bhojani]

This was the first occasion shown in contemporary documents adduced in evidence that Harjivan’s name had been linked to Glen or Teso.

Ramila stated that she never signed the two letters sent in her name and Vijaya stated that she never signed the letter sent in her name.

I accept this evidence from each of them. I find that the purported signatures on these letters were forgeries placed on the letters by or on the instructions of Subhash in furtherance of his fraudulent scheme to misuse Glen and Harjivan’s names as a front to his fraudulent misappropriation of SPC’s and William’s Estate’s property.

1999 – 2000. According to Subhash’s and Mr Harjivan’s subsequent uncorroborated statements unsupported by any document or any other evidence that did not emanate from them, Mr Harjivan bought 499 of the 500 issued shares in Glen from Vijaya and the 2 issued shares in Teso.

I have already found, for the reasons given above, that Mr Harjivan did not buy any shares in either Glen or Teso, did not pay Ramila or Vijaya or any third party or cause any one else to pay Ramila or Vijaya or any third party anything that could be considered to be consideration passing from Mr Harjivan or to Ramila or Vijaya for such a sale and did not acquire a beneficial or any interest in Glen or Teso or in any asset, property, charge or other interest held by or on behalf of Glen or Teso.

June 2001. Enfranchisement proceedings were about to reach trial relating to a property at 92 East Dulwich Road, SE22 brought by the long lessees against Glen, the newly registered freehold owner and also Vijaya, in whose name the property had previously been registered. Furthermore, Birkett Long was seeking to charge this property with the judgment that that firm had obtained against Vijaya for their long outstanding fees.

22 June 2001. Mr Harjivan and his son Mitesh each provided Subhash with a general power of attorney in accordance with section 10 of the Powers of Attorney Act 1971. Each gave as his address: “Maputo, Moçambique – postal code no 1127”. This was the first occasion that this address appeared in any document.

I find that Subhash obtained these powers of attorney initially so as to be able to use both Mr Harjivan and Mitesh’s names as part of his dishonest scheme to deprive the long lessees of their rights of enfranchisement and Birkett Long of its entitlement to charge this property with their fees judgment.

29 June 2001. Bowling & Co were instructed by Subhash to convey Flat 2, 92 East Dulwich Road, SE22 to Mitesh Mahendra. This was undertaken in order to seek to defeat the enfranchisement proceedings and Birkett Long’s charge. On being informed of this transfer, Birkett Long immediately wrote to Bowling & Co challenging the bona fide nature of this transaction and stating that the firm was minded to draw the circumstances of the transaction to the attention of the court. Birkett Long was ultimately paid off using funds supplied by Subhash which he obtained from Glen.

I find that these instructions were given by Subhash to further his fraudulent scheme in relation to this property.

6 July 2001. At a CMC involving all parties, it was stated that SPC intended to advance a Part 20 claim against Glen and Ramila in relation to the property portfolio. All parties were ordered to serve their amended, and final versions of their claims. At that time, Subhash appears to have decided to arrange for Thakrar Family members to be separately represented.

I find that the reason why Subhash decided to arrange for the other family members to change solicitors and to be separately represented in the composite action was because he had become concerned that it would be discovered that Ramila and Vijaya were, in truth, himself by other names and that he had a close connection, or even beneficial ownership, of Glen. Moreover, he wanted to avoid the situation that had arisen not long before this CMC in which parties claiming against Glen were able to show that Glen and Subhash were closely connected. All other parties were not told of this decision and only learnt when SPC attempted to serve amended proceedings on Glen and Ramila by serving Subhash and the other family members’ then solicitors, Bowling & Co who remained Subhash’s solicitors after the change of representation for the other family members. All that was ever stated by Subhash’s representation was that there was a conflict of interest arising from Subhash being sued and from his acting as Ramila and Vijaya’s attorney on their behalf in the same litigation. This explanation was untrue, Subhash did not perceive any conflict of interest, merely a risk to his elaborate and dishonest charade vis-à-vis Ramila and Vijaya being discovered.

29 August 2001. Bowling & Co informed Drukker & Co that they were not instructed by Ramila or Glen when Drukker & Co attempted to serve them with SPC’s amended Part 20 claim which joined them into that claim against Subhash.

October 2001. A witness statement was prepared on Subhash’s instructions by Bowling & Co in the name of Mitesh Mahendra to be signed by him. This states:

“I am Mitesh Mahendra of Maputo Mozambique, caixa postal 1127 and I am the owner of Flat 2, 92 East Dulwich Road, London, SE22.

I can confirm that I purchased the aforementioned property from a Mrs Radia in June 2001. I was first made aware of this property by a Mr Subhash Thakrar who has been my accountant in the UK for about 2 years. He knew that I was looking for an investment property and he advised that another of his clients had this property for sale.

I agreed to purchase the property for £59,995. I paid this sum personally to Mrs Radia in Mozambique in cash in June 2001. I should explain to the court that this is not at all unusual in Mozambique. people do not use banks and cheques as they do in the UK – very large transactions are commonly carried out in cash.

I do not visit the UK regularly and I therefore granted Mr Thakrar a power of attorney in order that he could deal with the formalities of the purchase of the property on my behalf. He instructed solicitors to act for me on the purchase.

… I understand that it is alleged that Mrs Radia sold this property to me so as to prevent the claimants from being able to enforce a judgment against her assets. I have no previous knowledge of these proceedings or indeed of any other of Mrs Radia’s other business dealings. I have never met her before and I have no relationship with her apart from the fact that we appear to share an accountant. I knew nothing of her reasons for selling and I did not ask her about this.

Mr Mitesh Mahendra signed this statement and it was returned to Bowling & Co.

Mr Harjivan admitted in evidence that the statements in this witness statement were untrue and that his son had merely signed the statement and returned it because Subhash had asked him to do this.

I find that the witness statement had been forwarded to Birkett Long by Bowling on Subhash’s instructions in a successful but dishonest attempt, with the dishonest assistance of both Harjivan and his son, to persuade Birkett Long not to press its charging order application against 92 Dulwich Park Road SE22.

26 November 2001. Subhash drafted and sent a forgery, namely a letter purportedly written by Ramila, to Mr Simon Clark of Kotecha & Co instructing him to act for her in the SPC Part 20 claim. The letter was drafted on 26 November 2001 but was backdated so as to be dated 12 November 2001. Ramila’s address was given as PO Box 42, Tabora, Tanzania. Subhash resorted to this manoeuvre so as to be able to implement his decision to instruct other solicitors to act for the other family members that he had taken in July 2001

29 November 2001. Ramila and Glen were joined as part 20 defendants to SPC’s part 20 claim against Subhash and Neil’s executrices. The substance of the principal claim against both Ramila and Glen was that neither was a purchaser for value of the SPC portfolio allegedly transferred from SPC to Ramila and subsequently transferred on from Ramila to Glen. Declarations were sought against both that they held these properties on constructive trust for the benefit of SPC and orders that each should transfer the SPC properties free of any interest of either to SPC.

December 2001. Quastels appointed to act for Glen in the Part 20 proceedings. Bowling & Co continue to act for Subhash. Nicholas Drukker & Co were acting for Party 2.

15 February 2002. Mr Clark telephoned Mr Wheeler of Drukker and asked whether he would be interested in a “drop hands” settlement on behalf of Ramila. This offer was stated to have been made following a meeting of Subhash, Glen and Ramila’s solicitors.

I find that Subhash was the driving force behind the offer being made and that the meeting of solicitors was at his instigation and the offer that emerged from that meeting was the one he instigated and, in effect, instructed should be put forward.

5 March 2002. Nicholas Drukker & Co, who were acting for Party 2 in trial no. 1, were faxed by Kotecha & Co asking for an extension of time for Ramila to serve her defence because of both sickness and bereavement. Mr Clark had been informed by Subhash that those reasons had delayed the instructions needed to enable the defence to be finalised.

6 March 2002. Mr Clark informed Subhash that he would have to give proper addresses for both Ramila and Vijaya.

16 March 2002. Mr Clark sent a letter by hand to 8 Ickelton Road, Mottingham since he wanted to contact her direct to get her to sign the draft pleading and about the security for costs application. The draft pleading was enclosed with the letter. This was a Saturday and the letter was sent by courier. The letter was asking her to contact him. Subhash had informed Mr Clark that Ramila was temporarily in England recuperating from illness. Ramila stated that she never received this letter and Mr Clark does not appear to have chased her up.

I find that Mr Clark’s letter was never received by Ramila. In all probability, it was delivered by courier to Subhash’s offices and he deliberately failed to deliver it to Ramila and, instead forged Ramila’s signature on the defence document.

March 2002. An unsigned defence was served on behalf of Ramila. The allegations and denials were based on instructions received from Subhash. Kotecha stated in a covering letter that they were having some difficulty in contacting Ramila.

20 March 2002. Mr Clark, in relation to a security for costs application against Ramila and Vijaya, served a witness statement that reiterated Subhash’s instructions that Ramila was normally resident in Tanzania and Vijaya in Kenya.

4 April 2002. Nicholas Drukker replied to the drop hands offer with a counter-offer of £300,000 to settle all actions with the defending Parties deciding amongst themselves from which Parties and in what amounts that sum should be provided.

Kotecha replied to Nicholas Drukker rejecting the SPC counter-offer. The letter expressed astonishment that proceedings alleging fraud against Ramila should have been instituted and allegations of fraud made in a case where SPC demonstrably had little or no real evidence to back up the allegations. Kotecha stated that the prospects of SPC succeeding with the claim against Ramila were remote.

17 April 2002. Mr Spalter of Quastels offered a settlement of £50,000 and Mr Wheeler of Nicholas Drukker counter-offered with a figure of £150,000 at a without prejudice meeting of all Parties. These offers were made on the basis of an overall settlement involving Party 2, Subhash, Glen and Ramila.

24 April 2002. Amended particulars of claim were served in the Family Actions on behalf of Ramila, signed RL Thakrar, and on behalf of Vijaya signed by Subhash as her attorney. Ramila disputes that the signature on that pleading was hers.

I find that someone forged Ramila’s signature on the pleading which had been sent to Subhash at SKT for signature by Ramila and returned to Bowling & Co and that Subhash knew that he had no authority from Vijaya to sign a pleading on her behalf.

10 June 2002. Mr Spalter of Quastels telephoned Mr Wheeler of Nicholas Drukker and stated that the offer of £50,000 had been made on behalf of Glen only.

June 2002. Mr Spalter of Quastels offered Mr Wheeler of Nicholas Drukker a sum of £50,000 to be paid by Glen and Ramila to settle SPC’s claims against both. On instructions, Mr Wheeler accepted that offer and SPC’s Part 20 claim against Ramila and Glen was dismissed by order made on 16 October 2002 (Footnote: ²²³).

29 January 2003. Subhash was dissatisfied with the advice and performance of Quastels in relation to that firm’s conduct of Glen’s defence to SPC’s Part 20 claim. He instructed Bates & Co to consider making a negligence claim against Quastels and Bates & Co asked Mr Shelton for his views about Quastels’ handling of the case. Mr Shelton stated in an email sent to Bates that emerged on discovery:

“I confirm that I was of the opinion that settling for £50,000 plus our costs was an excellent result for Glen, as we had no defence to the corporation tax claim, apart from the fraud allegations which were potentially disastrous for us.

I also confirm that Counsel’s advice that there was little likelihood of a successful application for costs [by Glen against Suburban] seemed correct to me.

Further an unsuccessful application may have persuaded the Plaintiffs of the strengths of their case. We were fortunate that the Plaintiffs’ solicitors did not seem to realise how strong their case really was. All in all it was an excellent result for Glen.”

Mr Shelton was asked why he thought that the fraud allegations were potentially disastrous for Glen and he replied:

“Fraud allegations of course could well be – were potentially disastrous for us. If a finding of fraud is made, then of course, there could have been a tracing claim against Glen, but I was also worried within that fraud allegation about the breach of fiduciary duty, although I was not quite so sure about that.” (Footnote: ²²⁴)

I find that Mr Shelton’s freely expressed view in what he would have considered was a privileged email contained a devastating expression of his real view as to the merits of the fraud action against Glen. He clearly thought that that SPC’s fraud action against Glen was both a strong one and one that had real prospects of success. This finding as to Mr Shelton’s view about the fraud claims is reinforced by the evasive answer he gave when asked to elaborate on his view that the fraud claim was a good one. It is clear from the totality of his evidence that Mr Shelton’s view was based on his concern at Subhash’s paramount involvement in all Glen’s affairs including the action against Glen. He obviously thought that Glen, Ramila and Subhash were, in reality, one Party and that if that was established by Suburban, its claims based on fraud would be made good.

Trial No. 1 an abuse of process?

Introduction

This section of the judgment is concerned with the extent to which trial no. 1 was conducted as an abuse of process. This question raises these issues:

These issues arise for five reasons. Firstly, Party 4 faces an appeal brought by Parties 8 – 13 against two of my findings in trial no. 1 relating to the claims brought by those Parties against Party 4 (limited to the claims against Miss Harris as Neil’s executrix) and contends that that appeal should be brought on the basis that it is an appeal from a judgment that is brought by the losing Parties who, as is now known, had conducted their case at trial in a dishonest and abusive manner. Secondly, Party 4 wishes to enforce the costs orders in its favour against Party 1, as Party 7’s Trustee in Bankruptcy, and Parties 7 – 13. Thirdly, if the Family Actions were conducted as an abuse of process, because Ramila and Vijaya were put forward as bringing valid claims in circumstances in which they were not Parties at all and had no valid claims and their claims were pursued in their names by Subhash, the judgments and orders (including for costs) against them should, as they claim, be set aside. Fourthly, if the actions were conducted as an abuse of process that would provide additional grounds for SPC’s claim that the compromise it entered into with Glen in trial no. 1 should be set aside as having been induced by fraud and fraudulent misrepresentation. Fifthly, if the actions were conducted as an abuse of process by Subhash, it would provide an additional ground for his being precluded from maintaining a contribution claim against Party 2 in their on-going claims against Glen and Teso and in their enforcement proceedings being brought against Subhash’s Estate and against Party 4.

The nine Family Actions began as a result of instructions given by Subhash to Birkett Long in 1998, more than 3 years after Neil had died on 17 January 1995 and without any prior written complaint or letter before action. The common allegation was that in about 1983 Neil offered to sell 13 freehold properties in Gurdon Road and Fairthorn Road to Subhash for £5,000 each on the basis that each freehold would be transferred to a member of Subhash’s family.

In order to make up the requisite number of Gurdon/Fairthorn properties for the purpose of the litigation, Subhash included 2 properties transferred to Ramila’s name which were never intended to be part of this ‘job lot’ of 13 properties; this ‘error’ was corrected in 2000 with a re-amended points of claim in one of the actions in Ramila’s name in which a contemporaneous but separate agreement between Neil and Subhash was then alleged.

Of the 9 actions, 2 were brought in Ramila’s name, 2 in Vijaya’s name, and one each by or in the names of Mukesh, Vijay and Kishan, Sheela, Naina, and Shantaben. Three firms of solicitors were involved in these actions. Initially Birkett Long was instructed and Mr Adrian Livesley assisted by Mr Oliver Pryke acted. Mr Pryke gave evidence. When Subhash fell out with that firm, instructions were transferred to Bowling & Co and Mr Jeremy Kleinfeld, who also gave evidence, was the file holder assisted by Mr Simon Clark. A perceived conflict arose between the case being conducted for Subhash in his defence to the main action and those being conducted on behalf of Parties 8 – 13 and instructions for the Thakrar Family Parties were then transferred to Kotecha & Co to Mr Simon Clark who had moved to that firm from Bowling & Co. He also gave evidence. The three solicitors who gave evidence had initially given witness statements for Parties 8 – 13 but those Parties indicated that they were not calling them to give evidence. In consequence, the court directed that they attend to be questioned on their witness statements as officers of the court rather than as witnesses for particular Parties. In addition, on 2 August 2006, the court received a further witness statement from Mr Livesley (Footnote: ²²⁵) in response to written questions raised by Party 4 in consequence of which Mr Livesley was not directed to attend court to be questioned.

One unsatisfactory feature of the written evidence of the solicitor witnesses who were required to attend to be questioned was the way in which Seddons, the solicitors then acting for Parties 8-13, went about obtaining and preparing the statements in 2005. It appears they were prepared by reconstructing the facts based on an incomplete selection of documents supplied to each witness by Seddons. Mr Pryke’s oral evidence, expressing dissatisfaction with the process, was very clear as to how unsatisfactory that process was. However, the oral evidence of each was clear and the result was to provide the court with a clear account of how the Family Actions were progressed. That evidence was also important as the catalyst for the production of the more than twenty boxes of documents which came to light as a result of Mr Pryke’s evidence. These boxes had been in Mukesh’s custody or control at 113 Woolwich High Street since 2005 but had not been disclosed despite the numerous disclosure requests and orders made in these proceedings. It is clear to me that this non-disclosure was the result of Subhash having taken steps to arrange for these boxes to be transferred to SKT’s offices and then having instructed Mukesh to keep them from disclosure. It is not clear how these boxes evaded the search and seizure process undertaken in 2005, probably they were only transferred to SKT’s offices after that process had been executed.

Until, at the earliest, late 2001 Subhash openly gave all relevant instructions for all 9 actions. Simon Clark gave evidence that as from then or early 2002, when a conflict emerged between Ramila and Subhash, he looked to Mukesh and Vijay for instructions. However the documents, such as the instructions as to what experts to instruct that were given to Kotecha in June 2002 and the testimony of Mukesh, Vijay, Sheela and Naina all pointed to Subhash as the directing and guiding hand in the conduct of the Family Actions and that his guidance was followed by his siblings.

In reality, therefore, the evidence demonstrated conclusively that Subhash continued, and indeed continues until the last day of trial no. 2, to be the orchestrator, controller and director of those proceedings. His instructions and authority were never challenged but were always accepted as ‘guidance’ to be followed, even if dishonesty was required by one or more of his siblings in providing that compliance.

The source of funding for the pursuit of the Thakrar Family Actions

Contrary to the evidence given by the Thakrar family at all times to this court and in 2005 to the Court of Appeal, Subhash using Glen funds has funded Subhash’s and the Thakrar family’s proceedings throughout. Examples of such funding include a payment of almost £5,000 to Bowling & Co in June 2000 and a payment of £32,499 to Kotecha & Co in February 2003.

Notwithstanding his written evidence to the effect that the Thakrar family had funded the Family Actions, Vijay had to admit in oral evidence that Subhash in fact funded the Family Actions. (Footnote: ²²⁶) Neither he nor Mukesh could explain where their supposed £100,000 borrowing from Teso had come from or whether, and if so how, it formed part of their supposed borrowings from Teso. Vijay and the other Thakrar family members were offered the opportunity to produce any documentation that might support the evidence that they funded at least part of the costs shown on the schedule purporting to show their respective contributions to costs of the Family actions totalling £282,442. (Footnote: ²²⁷) No such material has been produced.

It is clear, therefore, and I find, that the Family Actions were funded throughout by Subhash using Glen funds and that the Thakrar family knew at all times that Subhash was funding their actions notwithstanding their evidence to the contrary. This funding relates to the costs and disbursements that had to be provided to the solicitors acting for the Thakrar Family members as well as those needed to fund Ramila and Vijaya’s representation and those needed to fund Subhash’s action claiming fees and his defence to the action brought against him by SPC.

The role of Ramila and Vijaya in the Thakrar Family Actions

Subhash has always asserted, and continues to assert in the unsolicited e-mails which he has bombarded the court with in recent months, that Ramila and Vijaya were fully aware of the proceedings being brought in their names and had consented from the start in them being carried on under Subhash’s direction pursuant to the powers of attorney that he had obtained from them for the more limited purposes connected with the Jayaben trust. It is clear, and my findings made in earlier sections of this judgment support this conclusion, that neither Ramila nor Vijaya had the remotest inkling that proceedings had been started in their name or that they were Parties to an action in which monies were being claimed in their name. It is also the case, as I have now found that they had no interest in the subject matter of the actions being brought in their names and that the basis of the actions was misconceived in that the actions were based on the assertion that they were the beneficial owners of the properties in question whereas, as Subhash and the other siblings knew, the properties were beneficially owned by Subhash and had been obtained by him as a result of their dishonest misappropriation from SPC and William’s Estate.

On amendment of the claims in 2002, and in conformity with CPR requirements, Mukesh, Naina, Sheela, and Vijay and Kishan signed Statements of Truth certifying that the facts set out in their respective pleadings were true. Each must have been aware that the basis of the respective actions, namely that they were beneficial owners of the property in question, was untrue and that they were lending their name to an action being brought to enforce Subhash’s perceived entitlement to damages from Neil’s Estate. Shantaben’s pleading and the pleadings in Vijaya’s name were certified by Subhash as attorney.

Ramila challenges the signatures on the pleadings in her name. The evidence is overwhelming that Ramila did not sign this pleading and I find that someone forged her signature on this pleading so as to make it appear as an authentic Statement of Truth signed by the claimant in whose name the action was being brought.

In signing the Statements of Truth as they did, the Thakrar family ‘signed up’ to the job lot agreement and represented to Party 4 and to the court that they were aware of the facts underlying their pleaded case and that those facts were true. From that point onwards, at the latest, they committed themselves to the lie about being individual purchasers of these properties together with each other and Vijaya. They were also locked in to corroborating Subhash’s story that their co-claimant Ramila was in 1987 and remained at all times thereafter a wealthy overseas businesswoman, which was always how Subhash described Ramila so as to explain away her absence and her apparent ability to fund large property acquisitions in England despite her overseas resident status. The Thakrar family sought to explain Ramila’s lack of involvement in the later stages of the proceedings notwithstanding her living in Mottingham and having some contact with some of the siblings by alleging that she had disappeared from the Thakrar family following a family falling-out. This disappearance never occurred but, even if it had, it would not begin to address the fundamental problem for the Thakrar family that they lent their names and their verifying signatures to actions founded on a lie which they knew was being put forward by Subhash.

In July 2001 all Family Actions were transferred to the TCC. As from 2002 these actions were case managed under Subhash’s fees action as the Lead Action and disclosure, evidence and findings in one stood as disclosure, evidence and findings in all.

In November 2001, and as a result of the joinder of Ramila to the Part 20 claim, ‘Ramila’ sent a letter drafted on Subhash’s computer to Mr Simon Clark at Kotecha instructing him to represent her and, to be consistent with the basis upon which ‘she’ had purchased the SPC portfolio, gave her address as PO Box 42 Tabora Tanzania. This letter was a forgery in the sense that it was not written by her, not signed by her but it told a lie about itself in that it was representing to Mr Clark that she was personally instructing him to act for her.

In January 2002, Kotecha replaced Bowling & Co on the record for all claimants in the Family Actions. On 20 March 2002, Mr Clark made a witness statement in opposition to Party 4’s application for Ramila and Vijaya to give security for costs in which he stated that Subhash gave instructions for Ramila and Vijaya under a power of attorney and that they lived respectively in Tanzania and Kenya. This was untrue in relation to Ramila since her home was by then 8 Ickleton Road. Indeed, it had been her place of residence for almost 7 years by that time. Subhash both knew and believed that Ramila was living at 8 Ickleton Road in 2002 as can be seen from drafts of his own correspondence that were found on his hard-drive.

By August 2002, ‘Vijaya’ had been ‘relocated’ to PO Box 1127 Maputo, Mozambique. This followed, and is at least in part a reaction to, the service of a statutory demand at Vijaya’s address in Kenya following a judgment for outstanding fees obtained against ‘her’ by Birkett Long. PO Box 1127, by then a former address of Mr Harjivan, was already in service as the address for Mr Harjivan family’s power of attorney. (Footnote: ²²⁸) As a defunct PO Box, it then became a convenient location for unwanted correspondence to Vijaya, a matter about which Subhash apparently reminded Mr Harjivan between his giving evidence on day 8 and on day 22 because Mr Harjivan’s original evidence had destroyed the pretence that this PO Box had been made available for Vijaya. (Footnote: ²²⁹) This PO Box in Mozambique provided Vijaya and, thereby, Subhash with a new but crucially remote and inaccessible overseas identity.

Subhash attempted to maintain the lies as to the genuineness of this PO Box as Vijaya’s litigation address which she had consciously adopted during the course of the proceedings. I asked him whether Vijaya’s denial of any knowledge of this address or of her knowledge that it was being used although she was still living and resident in Kenya was part of the body of perjured evidence that he had recently maintained Vijaya had given. He insisted that Vijaya was lying in denying knowledge of the use of this PO Box. He stated:

“A. Your Honour, there is a story behind that and the truth of the matter is simple. Birkett Long, Aiden Lively (sic) was a partner who wrote to her in Kenya. I forget the name of the solicitor who directed somebody from Nairobi to go and see her at her shop. Oh crumbs, I’ve forgotten, He is the guy who did the power of attorney for Vijay. I can’t remember his name. Anyway, you know, what happened is she rang me up she says, “Do you want me to commit suicide with all these things happening? What’s going on here? Why is this guy writing to me here when I told him not to write to me?” I said “I don’t know, I’ll have to enquire about it.” She said “You’d better do something otherwise Lalit is going to kill me or I have to commit suicide.” Lalit is her husband. So I then immediately contacted Aiden Lively and sent him a letter which in fact caused me a problem with my institute because I called Aiden and said very simply “Why did you write to Vijaya in Kenya when she was not to be written because of the problems it created?

Then it was agreed between her and Harjivan and myself that, yes, she could use the Mozambique address to deflect future correspondence and that’s a fact, that she had agreed that.

JUDGE THORNTON: Who made the suggestion that she should adopt a Post Office address in Mozambique?

A. I think that was a discussion between three of us: Vijaya, Harjivan and myself.

Q. Where did this discussion take place?

A. On the telephone to her, when she rang me telling me – she was so upset about these letters from Birkett Long, etc.

Q. Did you suggest to her that she’d adopt this address?

A. I may have.

Q. Okay. Did she raise it with you as a possibility?

A. She was more than happy, so long as she did not get problems in Kenya. …

This evidence is dishonest, untrue and a recent embellishment on earlier lies relating to Vijaya’s alleged difficulties in receiving communications in Kenya. Indeed, this evidence has the hallmark of recent invention that was resorted to in desperation and in the knowledge that it would be too late for Vijaya to rebut it or for it to be demonstrated to be untrue. I reject this explanation in its entirety.

It is not necessary to go through each step of the proceedings and examine each dishonest act of Subhash along the way. Suffice it to say that he found the maintenance of the deception that Ramila and Vijaya were live Parties to the litigation harder and harder to maintain. On one occasion, he had to orchestrate a telephone conversation with Vijaya. On another occasion, someone purporting to be Ramila telephoned “her” solicitor and, since he did not know her, was able to deceive him into thinking it was her who was telephoning when it clearly was not her but someone masquerading as Ramila. He also had to carry off the story that Ramila had disappeared following a family quarrel. Some letters were sent to Ramila and Vijaya but were delivered to SKT’s offices at Subhash’s instructions for him to “forward” them to the relevant cousin. Clearly, these letters never re-emerged from SKT’s offices. The disclosed documents are full of letters written by Subhash to the various professionals concerned with the litigation on behalf of the Thakrar interests which refer to instructions he has received from his client, being either Ramila or Vijaya as the case might be, and which are written on the basis of his having direct and regular contact with these clients. Ultimately, the deception could not continue because direct contact between solicitor and either Ramila or Vijaya became necessary. The consequence was that the action brought by each of them was dismissed due to lack of instructions and non-compliance with court orders.

The role of Parties 8 – 13 in the Family Actions

Introduction

Over the course of the original proceedings, the Thakrar family members were, to varying degrees, drawn into continued perpetration of the lies about (a) the respective whereabouts of Ramila and Vijaya and (b) the funding of the Family Actions. Ramila’s and Vijaya’s four actions were finally struck out in August 2003. Before that occurred, the Thakrar family’s lawyers were throughout deceived about the genuineness of Ramila’s and Vijaya’s participation in the litigation and as to the bona fide nature of the Thakrar siblings’ and cousins’ cases. The foreign residence of both cousins was maintained as a fiction. Thus, in resisting a security for costs application against Ramila, her solicitor did not take the first and irresistible point that she was resident within the jurisdiction, no doubt because he had not been informed of this obvious fact by any one of his Thakrar clients, all of whom he was representing. It is clear that the Thakrar family did not have any compunction about their own legal representatives, however innocently, misleading Party 4 and the court. Had the Thakrar family not joined in with Subhash in this deceit, both Ramila and Vijaya would have surfaced, the truth would have been discovered and the Family Actions would have failed on the grounds that they constituted a systematic and fraudulent abuse of the court’s process.

I will examine the role of each sibling in turn.

Vijay

Introduction. In 1995 Vijay, working for SKT, had undertaken the work necessary to arrange a mortgage with the Abbey National to assist Babu and Ramila in the purchase of 8 Ickleton as their home. Vijay and his wife attended Shimeer’s wedding in August 2001 and knew Ramila was still living at 8 Ickleton. This led to his being in difficulties in giving evidence about his knowledge as to where Ramila was living at the critical period during the litigation.

Vijay’s role in the deception relating to Ramila and Vijaya. In July 2002, Mr Clark wrote to Vijay enclosing a letter for Ramila and asking Vijay to forward it. In cross-examination, Vijay was clearly uncomfortable about this letter and I find that he did nothing about it because he was aware that Ramila was not a genuine Party in the Thakrar Family Actions. (Footnote: ²³¹)

In October 2002, Mr Clark sent a draft of Ramila’s statement, giving her address as in Tanzania, to Vijay by e-mail on the basis that Vijay would obtain Ramila’s signature and referred in the e-mail to their discussion about the statement and likewise in relation to Vijaya in February 2003. Vijay’s evidence was that he had no recollection of those e-mails or of attending to them personally. He did recollect that he and Mukesh took over the role of giving instructions on behalf of Shantaben and the other siblings in the other Family Actions from 2002. These instructions were based on discussions the two of them had with Kishan, Sheela and Naina from 2002. (Footnote: ²³²) It is clear that Vijay received these e-mails but decided to ignore them because he did not want to reveal that Ramila and Vijaya were not genuine Parties to the Thakrar Family Actions.

Vijay’s evidence in relation to giving instructions on behalf of Ramila and Vijaya was that he honestly did not even ask himself who was giving instructions on behalf of Ramila and Vijaya. However, Mr Clark confirmed that letters written in February 2003 concerning and giving instructions relating to Ramila’s and Vijaya’s cases were signed by Vijay and Mukesh or by Vijay alone. Mr Clark must have continued to communicate with Vijay about Ramila and Vijaya because Mr Clark was not told that Vijay was unable to reach her and was unaware of where she was. I find that Vijay did sign these letters and that he purported to give instructions on Ramila and Vijaya’s behalf knowing that they were not genuine Parties to the Thakrar Family Actions. (Footnote: ²³³)

On 15 January 2003, Mr Clark spoke to Vijay about arrangements for Ramila and Vijaya attending the trial and Vijay informed him that he did not expected that they would attend. Mr Clark also received a conference phone call from Vijay, Mukesh and Subhash on 24 February 2003 in which he recorded that Vijay said that he had spoken to Vijaya, who in turn had said that she had spoken to Ramila and that neither would travel to England to give evidence or travel to give video link evidence. This information about Ramila and Vijaya was all recorded in a contemporaneous witness statement of Mr Clark prepared to support an application for Ramila and Vijaya’s evidence to be adduced under the Civil Evidence Act 1995 without their giving oral testimony. On 20 March 2003 such a ruling was made in principle, subject to conditions for authentication which the Thakrar family’s lawyers proposed. I find that Vijay did make the statement to Mr Clark that Mr Clark’s contemporaneous attendance note records him as making and that Vijay made that statement knowing it to be a lie.

The court was greatly influenced in deciding at the directions hearing concerned with the admission of Civil Evidence Act notices that the proffered statements of Ramila and Vijaya were genuine by the evidence that Ramila was in Tanzania and Vijaya in Mozambique. This evidence was heavily reliant upon the information provided by Vijay and Mukesh in their conversation with Mr Clark. Vijay’s evidence was that Vijaya had been called by telephone and, after a greeting, simply said to Vijay “we are not coming”. Vijay was unable to explain how the Thakrar family’s legal team had told the court in the lead up to and throughout the trial that Ramila was living in Tanzania and Vijaya in Mozambique. (Footnote: ²³⁴)

In relation to the so-called family fall out in 2002 as a result of which, so the Thakrar family maintained, they believed that Ramila had gone away, Vijay believed the source of that information to be either Subhash, Mukesh, Kishan or Kiran at the office. He was unable to give any sensible reason for not telling Mr Clark in July or October 2002 or even later that Ramila’s whereabouts were unknown and that she could not be contacted. (Footnote: ²³⁵)

In relation to Vijaya’s whereabouts, Vijay said that he thought she lived in Kenya and he did not say anything to Mr Clark about her not living in Mozambique because Mr Clark never asked. In order to escape from the earlier story told to Mr Clark about telephoning to Vijaya, Vijay had to change the story to Vijaya telephoning in – out of the blue – to say she and Ramila were not coming. This bare-faced lie falls apart when set against Vijaya’s unhesitating evidence that she has never spoken to Vijay or Mukesh over the telephone. All Vijay could do, when challenged with this, was to say that as far as he could recall he did have a conversation. (Footnote: ²³⁶)

Vijay’s part in the misleading funding statement. In relation to the funding evidence given during the 2003 trial, it was important to the Thakrar family that they maintained the line that they personally were responsible for funding their and their overseas cousins’ actions. This was done, in part, by each of Parties 8 - 13 confirming the total and breakdown details of funding in a schedule prepared by Vijay and Mukesh. This schedule was exhibited to both Vijay’s and Mukesh’s statements as well as to those of Naina, Kishan, Sheela and Shantaben. Mukesh’s statement was to the effect that he and Vijay had been unable to get Ramila and Vijaya to contribute and that that necessarily meant that unless Mukesh was lying in his statement, Vijay had been lying about a matter he realised was important. Faced with that dilemma in cross-examination, Vijay froze and was unable to explain himself or give a proper answer. (Footnote: ²³⁷)

Finally, and again in relation to the funding evidence, Vijay was unable to produce any evidence to demonstrate that he personally had made any contribution to the costs of bringing the Family Actions.

Overall, on each day that he gave evidence, Vijay was caught out telling lies which he appeared to make up on the spur of the moment. These lies occurred because he was unable to avoid revealing his knowledge and involvement in the deception being perpetrated by Subhash that was needed to maintain the charade that Ramila and Vijaya were knowing and willing claimants pursuing bona fide claims against Party 4 in the Family actions. (Footnote: ²³⁸)

Against this background, I find that Vijay consciously and deliberately misled the Thakrar family’s legal representatives, Party 4 and the court on these matters as and when they arose and did so for his own and for his family’s advantage, to the detriment of Party 4. That active deception on the part of the Thakrar family, including that of Vijay, can be traced back to the time when instructions were given to Mr Clark in January 2002 to represent both Ramila and Vijaya, if not before. Mr Clark was instructed because it was no longer appropriate for Subhash and Ramila to instruct the same solicitor and Mr Clark had to look to Mukesh and Vijay for instructions in relation to the Family Actions. Behind the scenes, Subhash continued to instructed Mr Clark on behalf of the Thakrar family members and he remained the driving force behind the Family Actions. Such instructions as Mr Clark’s clients gave him direct were those that Subhash had instructed his siblings to pass on.

Mukesh

Mukesh’s credibility. Mukesh’s denial of involvement in the Thakrar Family Actions and, in particular, in any deception arising from his cousins’ misplaced involvement in those actions, raises a serious issue as to his credibility. His credibility is in issue for a number of reasons. Firstly, he was caught out over the HSBC account and the instructions that he said had come from Mr Harjivan to make payments from that account. However, his evidence was put in doubt when he then failed to produce the cheque book with the relevant counterfoils. (Footnote: ²³⁹)

Secondly, Mukesh was and remains at the centre of operations at 113 Woolwich High Street. All the keys to Glen’s properties were kept in a cupboard in his office until the interim Receivership was set up by the court Order of 2 August 2006. Furthermore, Mukesh had to compile the details of the leases and tenancies for the interim Receiver and he also stated that he was the only person who could prepare the details of the receipts into and the payments out of Glen’s HSBC account. (Footnote: ²⁴⁰)

Mukesh’s involvement in these matters arose because he was the only one with sufficient knowledge to undertake these tasks and also because he insisted that he was the only one who should undertake them. It appeared that Mukesh had always been responsible for all matters concerning the management of the Glen properties and the HSBC account through which both rental income and property expenditure passed in the SKT era prior to Subhash’s bankruptcy and he continued that role when SKTL was set up to take over SKT’s business. It is also clear that although Subhash was no longer nominally involved in running SKTL’s business, he continued to control Glen’s affairs behind the scenes after his bankruptcy.

Thirdly, another important factor in weighing the likely credibility and attitude of Mukesh is his attitude to potentially relevant documents. In particular, his reaction and behaviour during the execution of the Trustee’s first search warrant in 2005 suggests that he had much to hide in relation to the affairs of Glen and Teso. The warrant was executed by the Trustee’s solicitor Mr Festenstein and he found files relating to Teso in a car in the car park in circumstances in which it was obvious that these files were about to be unlawfully removed from the premises so that they would not be obtained by those executing the search warrant. Mukesh was confronted in the car park and denied that he was attempting to remove files but was reluctant to identify the owner of the car in question. He also stated in evidence that he did not know whether there were Teso files or Glen files in the office. It was, however, clear that Mukesh was attempting to assist in the unlawful removal of Teso files and to minimise his involvement in, and knowledge of, Teso’s affairs. (Footnote: ²⁴¹)

Subsequently, Mukesh purported to find relevant documents hidden away in a basement of SKTL’s offices at 113 Woolwich High Street, London in December 2005 when these documents should have been disclosed much earlier in circumstances in which it was not credible that Mukesh was not aware of those documents. On a later occasion, Mukesh collected over twenty boxes of potentially relevant files from solicitors who had acted for Glen at a time when he would have been aware that the claiming Parties might be about to seek them from those solicitors and then took them to SKTL’s offices without disclosing them. These documents only subsequently came to light. Finally, on a yet further occasion, Mukesh was responsible for the retention of some boxes of documents even when SKT had been directed to hand over to solicitors acting for Parties 1 and 2 all documents in SKT’s possession. (Footnote: ²⁴²)

Mukesh’s involvement in the deception about Ramila and Vijaya. Mukesh was as culpable as Vijay in relation to the steps taken to mislead their own legal representatives, Party 4 and the court about the whereabouts of Ramila and Vijaya and in the deliberate inaccuracies contained in the funding statements produced during the 2003 trial.

In answer to the court’s question as to how the Thakrar family’s legal representatives came to tell the court in 2003 that Ramila was living in Tanzania and Vijaya in Mozambique, Mukesh’s final answer was that instructions were given by Subhash. (Footnote: ²⁴³) Even if true, it is inconceivable that the Thakrar family’s legal representatives never discussed the whereabouts of Ramila and Vijaya with Mukesh in the lead up to the 2003 trial. For example, the Thakrar family’s solicitor would have needed to discuss his urgent need to locate and speak to both Ramila and Vijaya in relation to that solicitor’s application to allow their evidence to be admitted under the Civil Evidence Act in March 2003 and would also have needed to contact them urgently in connection with the four occasions when an application was made that they provide security for costs in March, July and August 2002 and March 2003.

When asked to explain his own role in the proceedings in his name, his answer was that the family left it to Subhash to guide them and Mukesh’s explanation of the assistance he personally gave was that:

“I gave him [Subhash] my authority, and to assist, I wanted him to – well, he continued to help on the basis that I was kept informed”

In relation to the conversation in February 2003 with Mr Clark, Mukesh accepted he was present, said that he did not speak, could not remember whether Vijay did or did not speak, but did remember that Subhash had done most of the talking. He was also unable to assist in relation to Mr Clark’s letter in March 2003 that stated that the information that Ramila and Vijaya would not be attending the trial had come from Vijay and Mukesh. (Footnote: ²⁴⁴) He therefore knew that Mr Clark was being misled about Ramila and Vijaya.

Mukesh identified Subhash as the source of his information that Ramila had disappeared by going to Tanzania in 2002. Then shortly after telling the court that “nothing surprises [him] nowadays”, he said that he would be surprised if Ramila had not gone to Tanzania. Mukesh knew that Ramila was married and had settled and bought a home in Mottingham in 1995 at 8 Ickleton Road. Thus, in truth he would have been surprised had Ramila suddenly disappeared.

Mukesh’s involvement in the misleading funding statement. Mukesh’s evidence about the November 2003 funding statement was very unsatisfactory. He stated that “Vijay and I were not able to get them [Ramila and Vijaya] to send money to us as they were very nervous about anyone in their home countries being made aware that they had money”. He then stated that it was left to Subhash to take steps to contact Ramila and Vijaya. Then he stated in relation to his evidence that “the way it has been put in, it is slightly incorrect” and then, in answer to the court’s question for an explanation said “I did not pay much attention to detail”. Finally, when pressed further, Mukesh admitted that he had no first hand knowledge of any attempt to contact Ramila or Vijaya for funds. (Footnote: ²⁴⁵)

The reality is that if Mukesh genuinely believed that Ramila was a willing Party to the Thakrar Family Actions, he would have contacted Babu or Ramila himself at 8 Ickleton Road and would have suggested that funds could be raised for Ramila by obtaining a mortgage loan from Teso. In fact, he turned a blind eye to the dilemma created by Ramila’s supposed disappearance or non-availability to deal with her evidence or the need to provide funds for her representation and funding information for the court.

Conclusion – Mukesh. Against this background, I find that Mukesh consciously and deliberately misled the Thakrar family’s legal representatives, the court and Party 4 in relation to the whereabouts and participation of Ramila and Vijaya in the Family Actions, about the funding of those actions and the other matters referred to above as and when these matters arose and did so for his own and for his family’s advantage, to the detriment of Party 4, and to obstruct the just determination of the Family Actions. He did so knowing that Ramila and Vijaya did not have genuine and bona fide claims against Party 4 and that they were unaware of the actions or of their supposed ownership of the properties that were the subject-matter of the claims. Mukesh had this knowledge from at least January 2002.