Panminder Singh Bhabra v Makinder Suri
| Jurisdiction | England & Wales |
| Judgment Date | 28 June 2022 |
| Neutral Citation | [2022] EWHC 1652 (Ch) |
| Docket Number | Claim No: PT-2019-000807 |
| Year | 2022 |
| Court | Chancery Division |
[2022] EWHC 1652 (Ch)
Robin Vos
(SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
Claim No: PT-2019-000807
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Michael Patchett-Joyce (instructed by New Media Law LLP) appeared for the Claimant
Erin Hitchens (instructed by Tenet Compliance and Litigation Limited) appeared for the Defendants
Hearing dates: 27–29 April 2022 and 3–6 May 2022
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.
This judgment was handed down by the Judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 28 June 2022 at 10.30am.
Introduction
This claim is about the beneficial ownership of the shares in a company called Pinegrove Management Limited (“PML”).
Hardial Singh Bhabra and his wife, Harbans came to the UK in the early 1960s. Hardial built up a successful business connected to the television industry. He was joined in that business by his sons, Daljit (“Dahl”) and the Claimant, Panminder (“Pom”) in the 1970s. Together, they grew the business and other related businesses.
In the early 1980s, the family purchased two properties in Windsor, Claremont House (primarily an office development) and Houston Court (an apartment block built by the family on adjoining land). Claremont House was purchased by Hardial Products Limited, a company which carried on part of the family business and which was owned equally by Hardial and Harbans. Houston Court was purchased by Houston Developments Limited, a company which was owned equally by Dahl and Pom.
The first Defendant, Makinder Suri married Dahl in 1987. The second Defendant, Niku Suri is Makinder's sister.
Unfortunately, due to an increase in interest rates and a fall in property prices, the Bhabra family businesses ran into financial difficulties in the early 1990s. Their lenders appointed receivers under the Law of Property Act 1925 in respect of the various properties over which they held charges, including Claremont House and Houston Court.
In response to this, the Bhabra family established new companies and, with the help of financing from HSBC, purchased the properties from the receivers. Claremont House and Houston Court were purchased by PML. The registered shareholders of PML are the Defendants, Makinder and Niku.
Pom's case is that Makinder and Niku held the shares as nominees for his parents, Hardial and Harbans as joint beneficial owners.
Sadly, Hardial and Harbans have both passed away. Harbans died in May 2015 and Hardial in June 2019. Makinder's husband, Dahl also passed away in July 2018.
The capacity in which Pom makes his claim
Pom originally brought these proceedings as executor of his parents' wills. However, on 14 January 2020 letters of administration with will annexed in respect of Hardial's estate were granted to Dahl's and Makinder's son (Hardial's grandson), Amar Jagraj (“Jag”) in respect of a will said to be made by Hardial on 25 August 2018 by which he left all of his assets to Jag.
As a result of this, in May 2020, the Defendants made an application to strike out Pom's claim on the basis that he had no standing to bring the claim. In response, Pom produced a deed of assignment said to be made by Hardial on 18 August 2016 (the “2016 Deed of Assignment”) and in which he assigned to Pom any interest he may have had in the PML shares and any claim for the recovery of those shares. At the same time, Pom made an application for the claim to be made in the alternative capacity as assignee of the cause of action pursuant to the 2016 Deed of Assignment.
On 17 August 2020, a consent order was approved by Deputy Master Smith under the terms of which the strike out application was withdrawn and Pom was permitted to amend his particulars of claim to enable him to bring the claim in his personal capacity as well as in his capacity as executor of his parents' wills.
Pom has however now conceded that, as matters presently stand, he is not able to bring the claim as executor of his parents' estates. The claim is therefore pursued solely in his personal capacity and in reliance on the 2016 Deed of Assignment.
The relief that Pom seeks is a declaration that Makinder and Niku hold the PML shares on trust for him and an order requiring them to deliver to him duly executed transfers of the shares into his name.
Makinder and Niku are adamant that they are (and always have been) the beneficial owners of the PML shares.
Procedural issues
Under paragraph 4 of an order made by Richard Farnhill, sitting as a Judge of the Chancery Division, following the PTR on 29 March 2022, it was left to the trial Judge to determine whether, in the absence of agreement, permission should be given to rely upon additional witness statements of both parties.
Pom has agreed to the admission of the Defendants' additional witness statements. The Defendants have objected to various aspects of Pom's third witness statement on the basis that certain passages do not comply with PD57AC (primarily being commentary on documents disclosed by the Defendants or matters not within Pom's personal knowledge).
In the absence of any objection on Pom's behalf, I gave permission for him to rely on his witness statement on the basis that certain passages I identified (which broadly followed the objections made by the Defendants in their letter of 19 April 2022) should be disregarded.
During the course of the trial three applications were made, two by the Defendants and one by Pom.
Both parties applied to amend their pleadings. In Pom's case, the proposed amendment was to rely on the existence of an undocumented express trust in addition to his existing case which relies on an express trust evidenced by a document which cannot be found.
The Defendants' proposed amendment relates to the status of the 2016 Deed of Assignment. They say that it should be set aside on the basis of undue influence. However, as a result of doubts over their standing to ask the Court to set aside the 2016 Deed of Assignment on this basis, they now wish to include a counter-claim applying to set aside the 2016 Deed of Assignment, such counter-claim being underpinned by the assignment to Makinder by Jag (in his capacity as administrator of his grandfather's estate) of any interest he may have in the PML shares and any right he may have to rescind or apply to the Court to rescind the 2016 Deed of Assignment.
The final application, made by the Defendants, relates to unpaid costs. By paragraph 5 of the PTR Order, Pom was required to pay £14,625 to the Defendants by 12 April 2022. He has failed to do so. The Defendants have applied for an unless order which will lead to the claim being struck out if the costs are not paid by a specified date.
In the event, the parties have been able to reach agreement in relation to all three applications and I have approved an order in the terms agreed. Both applications to amend are allowed and both parties have permission to make further submissions in relation to the points raised by the amendments (as well as one or two additional points identified in the course of closing submissions). I am grateful to Mr Patchett-Joyce and to Ms Hitchens for the submissions which they have provided on 18 and 23 May and which I have taken into account.
In relation to the costs issue, Pom has agreed to an unless order requiring him to pay the outstanding costs by 16 May 2022.
Turning to the evidence, there are a few procedural points which I should note. The first is that both parties have filed a notice to prove documents. In Pom's case the notice to prove relates to four stock transfer forms said to be executed in 1995 and 1997 in favour of Makinder and Niku. As far as the Defendants are concerned, the notice to prove relates to the 2016 Deed of Assignment.
In accordance with paragraph 21.69 of the Chancery Guide, the Defendants have written to the Court on 20 April 2022 to put it on notice that they do not accept that a large volume of documents produced by Pom since approximately 2015 (after the dispute in relation to the ownership of the PML shares first came to light) should be treated as evidence of the facts stated in them. The reason they give for this is that they are simply self-serving documents created by Pom to bolster any claim. I have taken this into account in determining what weight should be placed on any statements made in such documents in the light of all of the other evidence.
The final point to mention is that Pom's first witness statement exhibits a number of statements from friends and family members in support of his case. These are not however formal witness statements. Some of the individuals involved have produced formal witness statements and have given evidence. Others have not. Ms Hitchens submits that the Court should give no weight to the statements produced by those individuals who have not been put forward as witnesses. In principle, I would accept this. In any event, Mr Patchett-Joyce has not sought to place any reliance on those statements in support of Pom's case.
Issues to be determined
The first issue is the question of Pom's standing to bring this claim. He now relies solely on his rights under the 2016 Deed of Assignment. There are two aspects to this. The first is whether the 2016 Deed of Assignment is a genuine document. In this context, as I have mentioned, as...
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