Balber Kaur Takhar v Gracefield Developments Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Patten,Lady Justice King,Lord Justice Simon |
| Judgment Date | 21 March 2017 |
| Neutral Citation | [2017] EWCA Civ 147 |
| Docket Number | Case No: A3/2015/1709 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 March 2017 |
[2017] EWCA Civ 147
Lord Justice Patten
Lady Justice King
and
Lord Justice Simon
Case No: A3/2015/1709
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Mr Justice Newey
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr John Wardell QC (instructed by Tanners Solicitors LLP) for the Claimant
Mr Avtar Khangure QC and Gavin McLeod (instructed by Gowling WLG (UK) LLP) for the Defendants
Hearing date: 1 December 2016
Judgment Approved
Introduction
On 24 October 2008 the present claimant, Mrs Balber Takhar, issued proceedings in the Birmingham District Registry of the Chancery Division in which she alleged that various properties in Coventry of which she was the owner and registered proprietor had been transferred to Gracefield Developments Limited ("Gracefield") as a result of undue influence or other unconscionable conduct on the part of the second and third defendants, Dr and Mrs Krishan.
Mrs Takhar and Mrs Krishan are cousins. Her case in summary was that the properties were acquired by her from her husband when they separated in 1999. In 2004 she became re-acquainted with Mrs Krishan after not having seen her for about 30 years. At the time Mrs Takhar was experiencing difficulties in her private life and was also in severe financial difficulties. She says that she confided her problems in Mrs Krishan who came to exert significant influence over her.
Her financial difficulties were due in large part to the properties. There were rates arrears and many of the properties were dilapidated. Mrs Takhar said that she was facing bankruptcy. The Krishans provided her with financial help and Dr Krishan took over responsibility for dealing with Coventry City Council. In November 2005 it was agreed that the properties would be transferred to Gracefield, a newly formed company, of which Mrs Takhar and the Krishans were the shareholders and directors.
There is a dispute between the parties as to the terms upon which the properties were to be transferred. Mrs Takhar's case was that the properties were not to be sold but would continue to belong (presumably beneficially) to her. They would be renovated and let with the costs being recouped out of the rents. In the short term, the expense of renovation would be met by the Krishans. Their case was that Gracefield was set up as a joint venture company. The properties were to be given an agreed value which would be paid to Mrs Takhar after the properties were sold and any profit over the agreed value would be split 50/50 between Mrs Takhar and the Krishans. Their explanation of why Mrs Takhar agreed to these arrangements was that planning permission for development needed to be obtained in order to unlock the value of the properties and this was something which Dr Krishan had experience in obtaining having already successfully developed his own medical centre.
Part of Mrs Takhar's evidence was that the properties did not really belong to her and had only been put in her name by her husband to protect them from claims by his brother with whom he was in partnership in a business called Takhar Trading Company. The trial judge (HH Judge Purle QC) rejected this. He also found that it was Mrs Takhar rather than Mrs Krishan who was instrumental in pressing for these arrangements as a way out of her financial difficulties. Although under pressure, she was, he said, perfectly capable of understanding what she was doing and of exercising independent judgment. The real issue therefore concerned the terms upon which the properties were to be transferred to Gracefield. The venture was not risk-free for the Krishans. They had to use their own money to restore properties that were run down and in circumstances where there was considerable public pressure for their demolition. It was unlikely, the judge said, that they would have been prepared to do this simply in return for their expenses and then to hand the properties back to Mrs Takhar at no further cost.
The judge therefore preferred the Krishans' account of what had been agreed. A significant piece of evidence was a joint venture agreement dated 1 April 2006 which the judge said was a true reflection of what was agreed between the parties orally in and following November 2005. The agreement provided for a purchase price of £100,000 which was to be placed on a loan account with Gracefield and for further sums totalling £200,000 as deferred consideration. The total of £300,000 was to be paid to Mrs Takhar on completion of the sale of the properties by Gracefield together with 50% of the profits on the sale of each property. The judge found that Mrs Takhar therefore transferred the properties to Gracefield for a price of £300,000 plus 50% of the profits on re-sale which he said was not shown by expert evidence to be an insufficient price and was for her a fair return. More to the point, it was, he said, what she had agreed as evidenced by the joint venture agreement.
The joint venture agreement, although dated 1 April 2006, was signed later. There was no original of the document signed by Mrs Takhar. The evidence of the Krishans was that it was prepared by accountants at a time when Mrs Takhar was in India and then handed to her when she returned. She was asked to consider it and return it to the accountants to deal with. Mrs Takhar's case was that she did not sign the document and had never seen it until the dispute arose.
The judge said:
"However, no case of forgery is advanced. Only the last page of the version of the agreement signed by Mrs Takhar appears to have survived and that is in the form of a scanned copy, which has emerged in the files of Sue Bowdler's firm. It was misfiled, apparently. Sue Bowdler had not seen the copy with Mrs Takhar's signature on it before until it was found, misfiled. However, there is no doubt that the agreement was prepared for signature. There is no doubt also that the agreement was prepared for signature in or around April 2006 and there is no doubt, in my mind, that it faithfully reflects the oral agreement that had been made.
22. In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy, I conclude that the Krishans' evidence, which I believe anyway, should be accepted and that Mrs Takhar took the copy of the agreement that she was to sign away, which was returned, probably by her in some way, duly executed to Sue Bowdler's firm, which then ended up misfiled. At all events, I am satisfied that that was the agreement that was made. The properties were transferred by Mrs Takhar in to Gracefield's name before the written joint venture agreement was prepared, and the only credible explanation that I have heard is that they were so transferred on the terms subsequently set out in the joint venture agreement, which were previously agreed orally."
In March 2008, when the properties were put up for sale by Gracefield, Mrs Takhar objected. The judge summarises what then happened in [29]–[30] of his judgment:
"29. Following the objections that Mrs Takhar raised to the sale, she obtained the services of a Mr Matthews who looked into the history and suspected fraud. The Krishans claimed at that stage to have invested well over half a million pounds of their own money and appeared to be saying that Mrs Takhar could go back to square one if she wished but she would have to pay off all the Krishans' costs which included the sum of, as I have said, in excess of half a million pounds. In fact, it is now said by the Krishans, that what they had in mind was that their anticipated profit share would amount to a sum in excess of half a million pounds. However, they clearly did not say that at the time. There were two documents, one called the Balber Takhar account, the other the Gracefield Options, which clearly misstated the position, in my judgment deliberately so, in an endeavour to put pressure on Mrs Takhar. These were unworthy and wholly inappropriate steps to take and Mr Burton pertinently asks: Why tell these lies? The only, or at least most compelling answer, he says, is because everything that Mrs Takhar previously has said is true. The Krishans were concealing from Mrs Takhar the true purpose of the transfers. She never regarded the properties as anything other than hers. Nor did the Krishans, and they were put in to Gracefield merely as a shell and not because of any joint venture agreement, which is an invention.
30. However, I regard the other evidence to be too compelling. I regard the contemporaneous evidence to point unerringly in the one direction of a beneficial transfer to Gracefield in return for a joint venture agreement, which cannot be castigated as unfair or inappropriate. I regard the responses, which were given in April and May 2008, to Mrs Takhar's volte-face (which is what it was) to have been an exercise in frustration which, however understandable, were in truth inexcusable but did not alter the facts of the past."
The judge therefore dismissed the claim holding that the properties had been transferred to Gracefield both legally and beneficially subject to the terms of the joint venture agreement.
On 20 December 2013 Mrs Takhar issued a new claim in the Chancery Division by which she seeks to have Judge Purle's order set aside on the ground that it was obtained by fraud. The claim is based on the evidence of Mr Robert Radley, a handwriting expert, who has produced a report dated 4 October 2013 in which he expresses the view that the 2006 joint venture agreement was never signed by Mrs Takhar. He says that there is a...
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