Balber Kaur Takhar v Gracefield Developments Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Newey |
| Judgment Date | 06 May 2015 |
| Neutral Citation | [2015] EWHC 1276 (Ch) |
| Docket Number | Case No: HC-2013-000172 |
| Court | Chancery Division |
| Date | 06 May 2015 |
[2015] EWHC 1276 (Ch)
Mr Justice Newey
Case No: HC-2013-000172
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY
Birmingham Civil Justice Centre
The Priory Courts, 33 Bull Street
Birmingham B4 6DS
Mr John Wardell QC (instructed by Thrings LLP) for the Claimant
Mr Avtar Khangure QC (instructed by Wragge Lawrence Graham & Co) for the Defendants
Hearing dates: 16–17 February 2015
Further written submissions: 26 & 27 February 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
On 28 July 2010, Judge Purle QC, sitting as a Judge of the High Court, dismissed proceedings ("the 2008 Proceedings") that the present claimant, Mrs Balber Takhar, had brought against the present defendants, Gracefield Developments Limited ("Gracefield"), Dr Kewal Krishan and his wife Mrs Parkash Krishan. In the proceedings before me, Mrs Takhar alleges that the Krishans obtained the judgment by fraud. The issues that fall for determination now are, first, whether the proceedings should be dismissed as abusive and, secondly, whether Mrs Takhar should be given permission to amend her particulars of claim.
The context
The 2008 Proceedings
The 2008 Proceedings, which were issued on 24 October 2008, concerned various properties in Coventry ("the Properties"). Mrs Takhar was formerly the registered proprietor of each of the Properties, but in 2006 they were transferred into the name of Gracefield, the shares in which were at the time split equally between Mrs Takhar on the one hand and the Krishans on the other.
Judge Purle summarised Mrs Takhar's case in the 2008 Proceedings in these terms in paragraph 2 of his judgment:
"[Mrs Takhar] claims that the properties were put in to the name of Gracefield as trustee for her, or as a result of the exercise of undue influence, or that the transactions giving rise to the transfers were otherwise unconscionable. She also suggests there has been a failure of purpose giving rise to a resulting trust and that the transfers were not properly executed and therefore void."
Mrs Takhar and Mrs Krishan are cousins. They lost contact for a number of years, but met again in 2004. In the following year, it was agreed between Mrs Takhar, Mrs Krishan and her husband that the Properties would be transferred to a newly formed company (in the event, Gracefield). At the time, Mrs Takhar had serious financial and other problems, some of which related to the Properties, which were run down and in respect of which there were rate arrears.
In the 2008 Proceedings, the parties differed as to the basis on which the Properties were transferred to Gracefield. As Judge Purle noted in his judgment (at paragraph 7), Mrs Takhar's case was that:
"the properties were not to be sold, they would still be hers, though they would be done up in the sense that the Krishans would get the properties up and running and let them out. The costs of this exercise would be repaid out of the rents of the properties, though coming in the first instance out of the Krishans' pockets."
In contrast, the Krishans' case (as Judge Purle explained in paragraph 8 of his judgment) was along the following lines:
"Gracefield was set up as a joint venture company, … it was agreed that there would be attributed to the properties a price which in the events which happened was £300,000. That would be repaid to Mrs Takhar after the proceeds of any subsequent sale and the profits would be split 50/50 between Mrs Takhar and the Krishans. All options were open but, without being prescriptive, what the parties had particularly in mind … was that planning permission could be obtained, and the properties could then be developed and sold. This … was why Mrs Takhar had asked … the Krishans to help her in respect of the Coventry properties, because she was aware that Dr Krishan had successfully developed his own medical centre in connection with his practice and therefore had the requisite expertise."
Judge Purle preferred the Krishans' version of events. He also concluded that a profit sharing agreement bearing the date 1 April 2006 was "a true reflection of what was agreed between the parties orally in and following November 2005". The agreement ("the Profit Share Agreement") provided for a "£100,000 purchase price" to be placed on a loan account with Gracefield and for further sums totalling £200,000 to be paid as "deferred consideration". The £100,000 and the £200,000 were both to be paid to Mrs Takhar on the sale of the Properties, at which point Mrs Takhar was also to receive "50% of the profits on the sale of each site". Judge Purle found that, when she transferred the Properties to Gracefield, Mrs Takhar "knew that she was transferring them in return for an attributed £300,000 – a price she was happy with and which no expert evidence has demonstrated was an insufficient price – and 50 per cent of the profits". This, the Judge commented, was "a fair return for her given that, had there been a forced sale at a time when she was facing bankruptcy, then by the time all her liabilities had been paid off, she might have received very little indeed, if anything".
Judge Purle noted that, although the Profit Share Agreement was dated 1 April 2006, it was in fact signed later. The Judge recorded that Mrs Takhar's case was that "she didn't sign [the document] at all" and had never seen it until the dispute arose, but also that "no case of forgery is advanced". He said in paragraph 22 of his judgment:
"In the absence of Mrs Takhar giving a coherent explanation as to how her signature came to be on the scanned copy [of the Profit Share Agreement], 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 [the firm of Ms Sue Bowdler, an accountant], 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 into Gracefield's name before the [Profit Share 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 [Profit Share Agreement], which were previously agreed orally."
In March 2008, the Properties were put up for sale, but Mrs Takhar objected. Judge Purle said this about what then ensued:
"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. 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 [counsel for Mrs Takhar] 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."
Judge Purle proceeded to dismiss the claim, explaining that he could not "accede to the suggestion that the deeds giving effect to the transfers (which … were duly executed by Mrs Takhar) were void" (paragraph 33 of the judgment), that the Properties had been transferred beneficially to Gracefield (paragraph 33 of the judgment) and that the case was not one of either undue influence or unconscionable bargain (paragraph 32 of the judgment).
The 2013 Proceedings
The present proceedings ("the 2013 Proceedings") were issued on 20 December 2013. In their current form, the particulars of claim ask that Judge Purle's order be set aside on the basis that it was obtained by fraud. The amendments for which permission is sought by Mr John Wardell QC, who appeared for Mrs Takhar, would introduce a claim for damages for conspiracy/deceit.
The 2013 Proceedings are principally founded on evidence from Mr Robert Radley, a handwriting expert. He concluded in a report dated 4 October 2013 that the Profit Share Agreement "was never … physically signed by [Mrs] Takhar". He explained that a letter of 24 March 2006 "bears an original 'pen on paper' signature which is superimposable with the signature on the copy [Profit Share Agreement]" and that that is "conclusive evidence that a copy of the...
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