Balwant Singh Gill v Jashpal Singh Thind
| Jurisdiction | England & Wales |
| Judge | James Pickering |
| Judgment Date | 11 November 2020 |
| Neutral Citation | [2020] EWHC 2973 (Ch) |
| Court | Chancery Division |
| Date | 11 November 2020 |
| Docket Number | Claim No. BL-2019-000427 |
[2020] EWHC 2973 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
James Pickering QC (sitting as a Deputy High Court Judge)
Claim No. BL-2019-000427
Geraint Jones QC (instructed by Rainer Hughes Solicitors) for the Claimant
John Randall QC and Robert Mundy (instructed by George Green LLP) for the Defendants
Hearing date: 21 April 2020
APPROVED JUDGMENT
James Pickering QC (sitting as a Deputy High Court Judge):
PART I: INTRODUCTION
PART II: BACKGROUND
PART III: THE LAW
PART IV: THE PRESENT CASE
PART V: CONCLUSION
PART I: INTRODUCTION
In February 2019 the claimant, Balwant Singh Gill (“ Mr Gill”) issued a claim against a number of parties including his daughter, Baljit Gill Thind (“ Mrs Thind”) and son-in-law, Jashpal Singh Thind (“ Mr Thind”).
That claim included a number of derivative and double derivative claims. To the extent that the claims are derivative claims, under section 261(1) of the Companies Act 2006 permission is required to continue those claims. To the extent that the claims are double derivative claims, the above statutory provision is not engaged but not dissimilar principles apply at common law. In any event, the application now before me is Mr Gill's application for permission to continue the above derivative and double derivative claims.
There are 7 such derivative or double derivative claims. If I grant permission to all or any of those claims, those permitted claims will be allowed to proceed in the usual way. If I refuse permission in relation to any of them, those refused claims will not be allowed to proceed and will end here and now. In relation to all 7 such claims, Mr and Mrs Thind invite me to refuse permission and do so for a variety of reasons.
PART II: BACKGROUND Mr Gill and his family
Mr Gill was born on 9 April 1939. At the time of this judgment, therefore, he is 81 years old. He (together with his wife, Baljinder Kaur) have 4 adult children. One of those, as set out above, is Mrs Thind who (together with Mr Thind) has 3 children. Mr Gill's other children have between them a further 4 children and accordingly in total Mr Gill has a total of 7 grandchildren.
Jeeves Investment
For many years, Mr and Mrs Thind ran a successful pharmacy business. On 12 January 2004 (and while still running the pharmacy business), they arranged for the incorporation of Jeeves Investments Limited (“ Jeeves Investments”). According to them, the purpose was to buy properties as investments for their children. Mr Thind became its sole director.
A few months later, in July 2004, Jeeves Investments made its first investment, buying a flat in Whitechapel in London. The purchase price was some £220,000, some of which came from the Thinds and another company owned by them 1, with the balance being raised by way of a mortgage secured over the flat. According to Mr and Mrs Thind, it was shortly after this that they received tax advice that the shareholding in the company ought to be in the name of one or more of their children's grandparents. They therefore approached Mr and Mrs Gill who, according to the Thinds, agreed to hold the shareholding in Jeeves Investments for their (the Thinds') children.
In any event, in December 2004 the annual return for that company was filed stating that the issued share in that company was registered in the name of “ Mr and Mr B S Gill (Trustees)” – in other words, in the name of Mr Gill and his wife. According to Mr and Mrs Thind, this reflected the fact that Mr and Mrs Gill had agreed to hold the
shareholding on trust for their children. According to Mr Gill, on the other hand, the filing of the above annual return was made without his knowledge and consent and, moreover, did not reflect the true position given that he and his wife did not hold the above shareholding in Jeeves Investments for Mr and Mrs Thind's children but instead held it for themselves absolutely.The Laurels
In late 2005, Mr and Mrs Thind came across an opportunity arose to buy a nursing home in Hastings called the Laurels. The plan was that the freehold property itself would be bought by Jeeves Estates Limited (“ Jeeves Estates”), a company which had been incorporated by the Thinds a few years earlier but which had been dormant ever since. The business of the nursing home, however, was to be run by a newly incorporated company called Laurels Nursing Home (Hastings) Limited (“ Laurels”) which would accordingly have to pay rent to Jeeves Estates.
Importantly, however, Mr Gill wished to become involved in the project. According to the Thinds, Mr Gill wanted to be a silent partner who would hold his interest not for himself but instead for all of his grandchildren (in other words, not just the Thinds' children but also the children of Mrs Thinds' siblings too). In any event, there is no dispute that in June 2006 Jeeves Estates bought the freehold property and that Laurels bought the business for a total sum of about £1.3 million. Nor is there any dispute that of that sum, £133,000 was advanced by Mr Gill 2, £267,000 was advanced by Mr and Mrs Thind, with the balance being raised by way of a mortgage secured over the property and guaranteed by the Thinds.
As for Laurels, its share capital was originally allotted 75% to Mr and Mrs Thind and 25% to Mr Gill. In December 2009, however, the above shareholdings were transferred to Jeeves Estates such that Laurels became a wholly owned subsidiary of Jeeves Estates. As for Jeeves Estates, as stated above, that company had in fact been set up by the Thinds a few years earlier with themselves as its only shareholders. In December 2008, however, an annual return was filed stating that its shares were held
as to 200 by Mr Thind and 100 by Mr Gill. According to the Thinds, Mr Gill was nothing more than a silent partner in the business and held these shares on trust for all of his grandchildren; according to Mr Gill, on the other hand, the business was being run as a quasi-partnership and that he held his shareholding for himself absolutely.St Margaret's
In late 2010, Mr and Mrs Thind came across a further opportunity – this time to buy the freehold and business of a nursing home in Hythe called St Margaret's (“ St Margaret's”). On 1 June 2011, St Margaret's was bought by Simicare Limited 3 (“ Simicare”), a company which Mr and Mrs Thind had set up a few years earlier and of which Mr Thind was the sole shareholder and director. The purchase price was some £1.6 million, some of which came from the Thinds and another company owned by them 4, with the balance being raised by way of a mortgage secured over the assets of Laurels, Jeeves Estates and Simicare and guaranteed by Laurels, Jeeves Estates and the Thinds.
According to Mr and Mrs Thind, shortly before the above purchase, they had had a further discussion with Mr Gill in which they had said that they wanted to buy St Margaret's for the benefit of their children, and once again asked Mr Gill, for tax reasons, to hold the shareholding in Simicare on behalf of their children to which, according to them, he agreed. In any event, in May 2012 Mr Thind transferred the shareholding in Simicare to Mr Gill. Again, therefore, the Thinds say that the above shareholding is held by Mr Gill on trust for their children; and again this is disputed by Mr Gill who says that he holds the same for himself absolutely.
Sherwood House
In mid-2012, a yet further opportunity came to the attention of Mr and Mrs Thind – this time to buy the freehold of a nursing home in Rochester called Sherwood House. In September 2012, they arranged for Sherwood House to be bought by a small self-administered scheme pension (the “ Thind SSAS”) which they had set up. Following
There appears to be no dispute that once again Mr Gill was involved in the project and indeed advanced the sum of £280,000 although there is a dispute as to whether the same was advanced as a loan (as the Thinds say) or as an investment (as Mr Gill says). In any event, in about January 2014, Mr Thind arranged for his shareholding in Watts to be transferred to Jeeves Estates. As explained above, while there is no dispute that Mr Gill holds shares in Jeeves Estates, there is a dispute as to whether he holds them for all of his grandchildren (as the Thinds say) or for himself absolutely (as Mr Gill says).
The 2015 declarations of trust
According to Mr and Mrs Thind, following advice from their bank, in about August or September 2015 they asked Mr Gill to sign two declarations of trust – one in relation to his shares in Jeeves Investment, and one in relation to his shares in Simicare.
As for Jeeves Investment, as explained above, back in December 2004 an annual return had been filed stating that the issued share in that company was registered in the name of “ Mr and Mr B S Gill (Trustees)”. By the declaration of trust prepared by the Thinds in 2015, Mr and Mrs Gill purportedly confirmed that they did indeed hold those shares for the Thinds' children 5. According to the Thinds, Mr and Mrs Gill both...
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