Mrs Kuljinder Kaur Thandi v Mr Tripatpal Saggu
| Jurisdiction | England & Wales |
| Judge | Mr Hugh Sims |
| Judgment Date | 20 October 2023 |
| Neutral Citation | [2023] EWHC 2631 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: PT-2021-00456 |
[2023] EWHC 2631 (Ch)
Mr Hugh Sims KC (sitting as a Deputy Judge of the High Court)
Claim No: PT-2021-00456
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS AND PROBATE (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
The Claimant appearing in person (assisted by a McKenzie Friend)
Mr Jeff Hardman (instructed by Mills Chody LLP) for the Defendant
Hearing dates: 4–7 October 2023
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down remotely with circulation to the parties or their representatives by email. It will also be released to the National Archives for publication. The date and time for hand-down is deemed to be 10:30am on 20 October 2023.
Mr Hugh Sims KC:
Introduction
The subject of this trial is a mixed-use property located on Northend Road in Dartford, Kent, called 7 Parkside Parade (“7 Parkside Parade” or the “property”) 1. The main issue arising is whether or not there was a valid contract for sale of 7 Parkside Parade made in 2018. There is tension in the law of real property between legal certainty, represented by the formality requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“the 1989 Act”), and the application of equitable doctrines, in particular, that of proprietary estoppel and constructive trusts. An issue in this case is how that tension should be resolved where at least some of the relief sought in equity closely resembles enforcement of an invalid contract.
The claimant, Mrs Thandi, is the freehold registered proprietor of 7 Parkside Parade. The defendant, Mr Saggu, is managing director of a construction company called Earlswood Interiors Limited (“Earlswood Interiors”), which operated from premises situated at Unit 20 Mulberry Court, Bourne Road, Crayford, Kent DA1 4BF. In 2017 Earlswood Interiors carried out construction work at Mrs Thandi's home, called 8 Heather Drive, also located in Dartford, Kent. Following substantial completion of the works an issue arose as to whether or not Mrs Thandi still owed Earlswood Interiors some money, principally for additional works to that originally quoted for. Mr Saggu continued to chase Mrs Thandi for payment in the latter part of 2017 and the early part of 2018. In early 2018 Mrs Thandi and Mr Saggu had discussions where they agreed Mr Saggu would purchase 7 Parkside Parade from Mrs Thandi for the sum of £270,000. Mr Saggu alleges this was a binding contract and complains Mrs Thandi withdrew from the sale and this was a breach of contract by her. This is denied by Mrs Thandi who says the agreement was an oral one, impliedly subject to contract and did not comply with section 2. Mrs Thandi also argues that her signatures to the relevant documents were procured as a result of undue influence and/or under duress.
Mrs Thandi is the claimant as Mr Saggu had registered a unilateral notice against the registered title to protect his alleged interest in the property and Mrs Thandi issued proceedings on 19 May 2021 to have the notice removed so she could carry out a refinancing exercise with MT Finance. On her application for an interim injunction heard by Mr Justice Adam Johnson on 2 September 2021 (see [2021] EWHC 2842 (Ch)) an order was made requiring Mr Saggu to cancel the notice on the basis of undertakings given by Mrs Thandi. These were intended to enable Mrs Thandi to refinance, but also to provide some protection to Mr Saggu, in relation to the property, in the event that his claimed interest in the property was successful. The undertakings granted by the claimant included
that she would not dispose of any interest in either the property or her then residence, 8 Heather Drive, until the conclusion of the proceedings or further court order. Mrs Thandi also owns another property at 11 Chaucer Way, Dartford DA1 5JU, but the undertaking did not extend to that propertyMr Saggu subsequently issued a counterclaim seeking, amongst other things, specific performance of the contract for sale, alternatively damages. In the counterclaim Mr Saggu claims, if specific performance is not granted, damages, alternatively restitution, for the sum of: (i) £15,000 based on a waiver of fees said to be owing by Mrs Thandi to Earlswood Interiors (and subsequently assigned to Mr Saggu); (ii) £5,000 paid by Mr Saggu to Mrs Thandi by way of deposit; (iii) £2300 for reimbursement of legal costs on the aborted sale; and (iv) the difference between the sale price and the market value of the property. The market value of the property has recently been assessed by a jointly instructed expert, Mr Dunsin, as being £345,000, an uplift of £75,000 on the price of £270,000. He also gives an opinion that the property was worth the same figure as at July 2018.
Subject to one significant qualification, the main issues for determination by me arising from the parties' statements of case are:
(1) what was agreed by Mrs Thandi and Mr Saggu in relation to the sale of 7 Parkside Parade;
(2) whether the agreement satisfied the formality requirements of section 2(1) of the 1989 Act;
(3) whether or not any agreement was impliedly “subject to contract” such that it was not immediately binding and enforceable;
(4) whether the agreement was in other ways not binding or enforceable;
(5) whether that agreement was entered into under undue influence and/or duress;
(6) whether that agreement was (i) breached, (ii) was terminated or abandoned/rescinded, (ii) should be specifically performed, or (iii) damages awarded in lieu; or
(7) if there was no valid or enforceable agreement, whether the property should be transferred or some other lesser relief should be granted either (i) in satisfaction of an equity arising under the doctrine of proprietary estoppel or (ii) pursuant to a constructive trust; or
(8) whether Mrs Thandi should be required to make a payment under the common law and/or in restitution in favour of Mr Saggu for any monies transferred under the invalid agreement.
The qualification concerns the order sought for transfer of the property, or specific performance. On the first day of trial I was informed that the lender, MT Finance, had taken steps to enforce its security over 8 Heather Drive and 7 Parkside Parade. 8 Heather Drive is now under offer and/or contracts have been exchanged. In relation to 7 Parkside Parade completion was due to take place on 16 October 2023 with an unrelated third party. The Defendant explained to me that they understood there was unlikely to be any equity available from the sale, due to the charge in place from MT Finance, but I was not provided with any documentation to enable the precise position to be identified. In these circumstances, the issue of whether or not I should grant specific performance for the sale of 7 Parkside Parade to Mr Saggu has been overtaken by events, and no longer strictly arises, though it may have some significance for costs and I shall briefly address it below. The claim based on a constructive trust also falls away, and was not pursued in closing. The proprietary estoppel remains of potential relevance, however, in the event that I conclude the agreement failed to satisfy the formality requirements of section 2(1) of the 1989 Act. Any conclusions I reach on it may also be significant for costs purposes, which by the time of this judgment are significantly greater than the sums now in issue.
My approach to the evidence and the witnesses
Judges will usually assess the reliability of witnesses against the contemporaneous documents. The fallibility of human memory is now well recognised. In commercial cases this may result in little, if any, reliance being placed on witnesses' recollections of what was said in meetings and conversations, and instead findings of fact being based on inferences drawn from the documentary evidence and known or probable facts: see Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), Leggatt J (as he was then) at [15] to [22]. This does not mean however that no reliance is to be placed on witness testimony in all business and property disputes, or that Gestmin lays down any general principle for the assessment of evidence: see Martin v Kogan [2019] EWCA Civ 1645 at [88]. The court should, nevertheless, ordinarily, start with and pay particular regard both to the documents and to motive when assessing disputes of fact. This is emphasised in the oft-cited statement of Robert Goff LJ in The Ocean Frost [1985] Lloyd's Rep 1, at 57 where he said: “ It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence … reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.” These observations have since been applied in a number of cases: see R (Bancoult No 3) v Secretary of State for Foreign and Commonwealth Affairs [2018] UKSC 3 at [100] to [103]. I also have in mind the recent guidance given by Males LJ in Simetra Global Assets Ltd v Ikon Finance Ltd [2019] EWCA Civ 1413 at [48] to the effect that these observations concerning the use of contemporaneous documents as the best guide to ascertaining the truth may apply with even greater force to a party's internal documents, such as emails and instant messaging.
This case presents some unusual challenges in relation to reliance on the documentary record because Mrs Thandi's ability to read and write English is a fact in issue in the case. Mrs Thandi claims not to have understood some of the key documents in the case which...
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